Author Topic: Vanguard Fund Selection  (Read 1525 times)

beavertailbill

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Vanguard Fund Selection
« on: November 21, 2014, 07:48:39 AM »
Using the advice found on MMM, I opened a trad IRA with Vanguard. Starting out small, I invested in VTTSX (a 2060 life fund) to get the benefits of mostly stock (90%). I now have more than enough in the account to get into VTSMX. Question is, should I move all my holdings into the VTSMX fund?

sabertooth3

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Re: Vanguard Fund Selection
« Reply #1 on: November 21, 2014, 08:09:34 AM »
Welcome to the forums! Since the expense ratios are almost identical (0.18% for VTTSX and 0.17% for VTSMX), I'd recommend just leaving your assets where they are for the time being. When you cross over $10k in assets, I'd move it into the Admiral Shares (VTSAX), which has a much lower 0.05% expense ratio.

johnny847

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Re: Vanguard Fund Selection
« Reply #2 on: November 21, 2014, 09:06:33 AM »
I mean, it's a toss up really. As sabertooth3 said, the expense ratio difference is basically nothing, but at the same time, there's virtually no hassle in switching your fund. It's just a couple clicks on the website.

GGNoob

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Re: Vanguard Fund Selection
« Reply #3 on: November 21, 2014, 10:10:03 AM »
Assuming you want to stick with mutual funds, I'd keep your money in the TRD 2060 fund until you are able to switch to a 3-fund portfolio. That way you have a diversified portfolio and are not betting 100% on US stocks. Even then, you could wait until you have enough money for a 3-fund portfolio with Admiral shares funds. Vanguards fees are so low that a few dollars here and there will not hurt you. Honestly, staying in a Target Retirement Date or LifeStrategy fund for your entire life wouldn't be so bad. But once the balances are bigger, you'll probably find the cost savings worth your time to rebalance.

If you didn't care to stay with mutual funds, you could always switch to ETFs to get the lowest fees right away. But make sure you know the differences between mutual funds and ETFs before you do that.