Author Topic: Index fund or ETF with low-balance account  (Read 1688 times)

Djeayzonne

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Index fund or ETF with low-balance account
« on: September 27, 2016, 04:36:33 PM »
Hello,

I just transferred my Edward Jones Roth IRAs to Fidelity.

Two accounts, mine and my wife's, but at the moment are worth 1,500.
I would like to sell whatever it is the Edward Jones guy originally set up and go with something else.

I think I will start off with a total market type index (though open to any and all suggestions on this),
but I really have no idea if I should do ETFs or throw in the extra 1,000 and go with the index fund.

And on that note, should the eventual goal be to switch to the better version of the index fund once the value hits 10,000?
Or, if going ETF, should they just be left alone?


tiger002

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Re: Index fund or ETF with low-balance account
« Reply #1 on: September 27, 2016, 05:36:03 PM »
Their target date funds only have a $1000 requirement so that's an option, then once you get up to $3000 you can put it into the main stock funds.

Djeayzonne

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Re: Index fund or ETF with low-balance account
« Reply #2 on: September 27, 2016, 08:57:15 PM »
I just checked. At least the 2060 Fund has the same 2,500 initial requirement.

Can anyone else provide some info to help me decide between ETF and index fund?

Another Reader

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Re: Index fund or ETF with low-balance account
« Reply #3 on: September 27, 2016, 09:02:25 PM »
Fidelity funds have a $2,500 minimum.  You can duplicate them with zero commission ETF's.  There is a list on Fidelity's website.

MDM

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Re: Index fund or ETF with low-balance account
« Reply #4 on: September 27, 2016, 09:45:10 PM »
Can anyone else provide some info to help me decide between ETF and index fund?
Perhaps https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds.

Djeayzonne

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Re: Index fund or ETF with low-balance account
« Reply #5 on: September 28, 2016, 12:15:09 AM »
Thanks for that link.

I read that a few days ago, and I read it again just now.

I guess it really doesn't matter except that it said ETFs have tax advantages, which would seem to make it a better choice for the after tax account.

Maybe I am overthinking things, but I just feel like doing a bunch of switching around as the account grows would violate the spirit of the whole invest and leave it alone for years and years concept.

Able was I ERE

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Re: Index fund or ETF with low-balance account
« Reply #6 on: October 13, 2016, 11:41:56 PM »
Inside a Roth IRA, any tax advantages of an ETF are irrelevant.  Go with the lowest expense ratio for the fund type you want.  If you can switch to a lower expense ratio later when you have more money, that a good thing.  It's not really changing your investment, just changing the mechanism for making the same investment.