Need some hepping . . . mutual fund costs
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Need some hepping . . . mutual fund costs
Posted by matthew25 on 3/10 at 8:24 am
Hope one of the guru's can hep' me on this theoretical question:

Say I want to buy a MF for $26 (VDAIX); spouse says to look at similar profile MF for $183 (SEQUX). Want to invest $10,000.

Obviously, I can buy more shares of the $26 MF. And if 10% drop, I lose either $2.60 or $18.00 per share.

How should I look at this? I have always bought the less expensive shares.



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Posted by jso0003 on 3/10 at 8:51 am to matthew25
The vanguard fund has about a 4th of the expenses and pays a dividend while the other does not.

From a purely nominal perspective you are correct in assuming the "price" is pretty much meaningless



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Posted by Lsut81 on 3/10 at 9:02 am to jso0003
Ok, another dumb question from the aspiring money man Lsut....

I've got a Vanguard IRA and Roth... Should be very easy to go in an buy Mutual Funds, correct? No restrictions by the Govt?

Follow up, at the end of the year, I'm assuming I would receive a 1099-Int from Vanguard, just like a savings account?

If so, what happens if I lose money in the Mutual Fund, am I able to claim those losses?

TIA



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Posted by jso0003 on 3/10 at 9:05 am to Lsut81
My understanding has always been you would have to liquidate your IRA and pay any penalties associated with doing so in order to claim losses. So probably not worth it.

Eta: and yea you can buy anything you want in an Ira/roth... mutual funds, etfs, stocks


This post was edited on 3/10 at 9:08 am

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Posted by Lsut81 on 3/10 at 9:08 am to jso0003
quote:

My understanding has always been you would have to liquidate your IRA and pay any penalties associated with doing so in order to claim losses. So probably not worth it.



No, I would keep my IRA and ROTH IRA...


Can I just go out and invest in Mutual funds with other cash?



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Posted by jso0003 on 3/10 at 9:25 am to Lsut81
Oh yea sorry I misunderstood. I assume you are maxing your roth and traditional Ira?

Just open a seperate taxable acct.



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Posted by Lsut81 on 3/10 at 9:33 am to jso0003
quote:

I assume you are maxing your roth and traditional Ira?


Have maxed my Roth for 2013.

As far as my traditional IRA goes, how would that work? I rolled over an old 401k a few weeks back. Bc I work in a small shop, we don't currently have a 401k, but will be adding one soon. How can I contribute to my Traditional being that it is pre-tax and any funds I put in would be post tax

Or does that only matter when your employer is contributing, that the initial amount invested isn't taxable

May be a confusing question.




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Posted by jso0003 on 3/10 at 9:36 am to Lsut81
Keep track of your contributions and you can deduct the amount from your taxes when you do your return next year.


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Posted by Lsut81 on 3/10 at 9:36 am to jso0003
quote:

Keep track of your contributions and you can deduct the amount from your taxes when you do your return next year.




You the man

So better to put that money into my IRA than just purchase mutual funds separately?



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Posted by jso0003 on 3/10 at 1:08 pm to Lsut81
if you're ok with not having access to the money, I assume you have a solid emergency fund and cash on hand.


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Posted by Janky on 3/10 at 2:33 pm to jso0003
No 1099s for IRAs unless you take a distribution? You will not get a 1099-int annually. You also cannot deduct loses.


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Posted by TigerDeBaiter on 3/10 at 2:36 pm to Lsut81
quote:

Have maxed my Roth for 2013.



Then you can't contribute to a traditional IRA.



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Posted by ATL TGR on 3/10 at 9:39 pm to TigerDeBaiter
quote:

Then you can't contribute to a traditional IRA.


Unless you're married



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Posted by LSUcam on 3/11 at 8:02 pm to matthew25
If you invest $10,000 and you drop 10%, your left with 9,000 any way you look at it.

Who cares that you would have more shares in the "lower cost" MF. That also represents a lower percentage of ownership in the underlying stock/bond investments.

Look more at manager tenure, 3/5/10 year performance, and then the internal expenses.



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Posted by LSUcam on 3/11 at 8:03 pm to LSUcam

quote:

Look more at manager tenure, 3/5/10 year performance, and then the internal expenses.



In no particular order. Whatever means more to you.



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