Comments on: Advantages of Investing in Index Funds

By: Mike

Mike — Mon, 14 Sep 2009 12:35:33 +0000

Hi Annie. As you can tell from this article, I obviously think index funds are a great idea for most investors (myself included). As I explain in this article I think Vanguard is an excellent choice for index funds. As to how to go about investing in Vanguard funds, you have two options:

Go to Vanguard.com and open up an account there, and invest in their funds directly. As long as you elect to have your statements emailed to you (rather than snail mailed), there is no fee for having an account. And the fees on their index funds are very low. The only downside is that most of their funds have a $3,000 minimum, so depending upon how much you have to invest, that might not be an option.
Open an account with a discount brokerage firm and purchase Vanguard ETFs. This will allow you to get around the minimum investment, and the ETFs carry even lower expenses than normal index funds. The downside to this option is that you'll have to pay a commission to purchase them. (Though at most discount brokerage firms, the commission is quite low.)

This article provides some more information to help you compare brokerage firms when opening an IRA. Hope that helps. One last thought: Given that you're new to investing, I'd first suggest reading a little on the topic of asset allocation so that you can determine how aggressively/conservatively you want to invest in order to best reach your goals.

By: Annie

Annie — Mon, 14 Sep 2009 05:16:57 +0000

Hi
I’m sorry if I sound naive but I’ve never invested in anything. I heard Howard from CNN suggest investing in Index Funds, Vanguard I think is what he said. But I haven’t a clue how to go about it. Also, how much should I invest and is there a fee for this investment? I don’t have that much savings, the economy isn’t all that great and I have a small boy to look after, it’s just he and I. Any suggestions?

By: Manshu

Manshu — Mon, 09 Mar 2009 04:31:54 +0000

I feel the same way. Most investors are better of buying index funds and saving on costs.

By: Miranda

Miranda — Wed, 04 Mar 2009 14:32:31 +0000

Thanks for this post! I really like index funds. You keep more of the earnings in your pocket, and they’re pretty easy to invest in. Great for beginners or for the person who doesn’t want to worry about active trading.