Comments on: How to Get Started Investing in Index Funds

By: Lauren Noelle

Lauren Noelle — Thu, 23 Jul 2009 23:56:55 +0000

Thank you for posting this article. You have provided several good ways to begin understanding and investing in index funds. I have found http://www.marketriders.com to be an excellent approach to these types of investments and is easy to understand for those who have not previously dealt with index funds.

By: Jesse

Jesse — Mon, 27 Oct 2008 21:02:46 +0000

From a Canadian…I’ve been researching this topic and I can’t seem to find a Vanguard equivalent here. So, I’ve turned to ETF’s as the next best option [low cost index funds]. Can anyone point me to some good Canadian information on investing in ETF’s or other advice for getting around the high cost Canadian mutual funds.

By: Duffy

Duffy — Sat, 14 Jun 2008 05:11:55 +0000

Thanks for posting the article.

FYI – scottrade waives the $7 trade fees when you buy funs with an IRA account. cachunk.

By: Chad

Chad — Tue, 29 Apr 2008 02:56:14 +0000

A coworker told me that I need to invest in a mutual fund – not an index fund. “You’ll get the dividends with mutual funds but index funds ‘index’ the dividends.” He means you don’t get dividends if you are in an index fund (that has stocks that are paying dividends). Is that true? He says that index funds only make money off the increase in price of the index fund.

By: ryan

ryan — Tue, 08 Jan 2008 18:44:28 +0000

how do you like the service with vanguard? has investing with them been easy?

By: Swamproot

Swamproot — Mon, 19 Nov 2007 20:13:05 +0000

T. Rowe Price will let you into their S & P 500 index fund(PREIX) for $50 a month when its in a retirement account. They wave the minimum if you sign up with their Automatic Asset Builder program. I opened up one last month.

By: WritersCoin

WritersCoin — Mon, 19 Nov 2007 03:49:13 +0000

I’m all about this post. Index funds rule. But I’m a Buffett disciple so I have one stock: a B share of Berkshire Hathaway.

So while I want to switch my Roth IRA to Vanguard (the best place to be, I admit) from Scottrade, I have to have way more money than I have now ($100,000 I think) to not incur certain annual fees.

So for now, if I want to have my BRK.B share in there with my other index funds, I’ll be at Scottrade until I break through the six-digit plane.

By: lorax

lorax — Sun, 18 Nov 2007 23:59:41 +0000

Besides the ETF transaction fee, there’s also the often overlooked ask-bid spread. This means you can transparently lose .33% on ETF purchases and sales, compared with the same index fund. Of course, this is a one-time hit.

Many companies that charge no fee for stock/ETF purchases also have very low cash accounts, or require a minimum in a low-interest savings account. You need to make sure you’re really getting a free lunch, not paying for it at the parking meter!

By: JReed

JReed — Sun, 18 Nov 2007 23:35:30 +0000

If you automatically invest monthly through TD Ameritrade, there is no fee.

By: Money Blue Book

Money Blue Book — Sun, 18 Nov 2007 18:39:30 +0000

I always tell newbie investors to start with Fidelity or Vanguard since they have comparatively low fees, and to invest in an S&P 500 Index like VFINX or FSMKX.

The hard part for them is usually getting enough for the minimum.
-R

By: LC

LC — Sun, 18 Nov 2007 18:13:35 +0000

I would add that you may also be able to invest in index funds though your company’s 401k.

By: Nathan

Nathan — Sun, 18 Nov 2007 17:00:29 +0000

Mrs. Micah: Vanguard offers the “Vanguard STAR Fund (VGSTX)” which requires $1000 rather than the usual $3000 to invest. A nice way to get started with them if you don’t have the usual minimum.

By: FinanceAndFat

FinanceAndFat — Sun, 18 Nov 2007 16:55:17 +0000

For what it’s worth, here is what I am doing to invest tiny amounts of money and avoid fees. I opened a Schwab One Banking/Brokerage account (free, no minimums) and that allows me to invest in the Schwab One Source funds for no fees (no extra fees, the mutual funds still have their regular fees) and you only need $100 to invest at a time. There is no transaction fee on that $100, which is critical for the small investor (far superior to something like ShareBuilder). The list of funds available for free is somewhat limited, but there are index funds to choose from.

I’m not trying to sell Schwab to anyone, I’m just sharing what I believe to be a good option for someone who wants to invest small amounts of money.

By: Mrs. Micah

Mrs. Micah — Sun, 18 Nov 2007 16:21:32 +0000

I’m planning to go through Vanguard, but I still need that initial $3000 investment. Until then I suppose it’ll go into things like CDs and such to wait. Thanks for posting about this, I had wondered if there was a way around the $3000 but I guess not.

By: ZenniHill

ZenniHill — Sun, 18 Nov 2007 15:37:00 +0000

Thank you very much for writing this post. You are right, more than just the people who wrote to you need this information. Some of us are just getting started.