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+--- Thread: index funds and mutual funds (/showthread.php?tid=800)
index funds and mutual funds - guileapp - 12-15-2014
Does anyone invest in index funds or mutual funds? I have a fidelity account and saw some nice looking funds (FUSEX) and wondering what others thought of it? The minimum investment for it is $2500. Does it make sense to invest the minimum and hold until retirement? I'm new to investing and in my mid 20s. How often are fees taken out and are the fees taken out of your shares? Thanks for the thoughts! I have shares of Apple, Disney, and 3M but I'm looking to add index funds as a possibility.
RE: index funds and mutual funds - Kerim - 12-15-2014
I think well-selected index funds can be a great vehicle for a younger investor starting out. Immediate diversification at low cost, and good way to learn about the market and about your own temperament as an investor.
As to whether it makes sense to invest the minimum and hold until retirement, that depends on a lot of things. Is the $2500 all you've got to invest? Is that a large share of your assets, or a small one? Will you be adding new money? What are your investing goals? Risk tolerance? Sophistication? Etc. Etc.
RE: index funds and mutual funds - hendi_alex - 12-15-2014
A quick trip to Yahoo shows FUSEX as having a 5.27% front end sales load and a 2.16% deferred sales load. Why would anyone want to pay a sales load for an index fund? Why not get an ETF S&P500 index fund such as SPY which has extremely low fees of 0.09% and has no other costs. Some brokers have ETFs that trade with no commission. There are also ETFs which have dividend growth themes. Those as well would represent a great choice.
The only time that I would ever consider a mutual fund would be for some investment which is difficult to trade on U.S. markets and/or which is very difficult to understand. I bought Matthews Asia Fund for my daughter because I felt that the knowledge of the manager could be important in those obtuse markets. Even there, exposure via a properly themed ETF or two would probably give superior results.