Andrew Koenig wrote:
- quote -

ok, thank you

in a previous message you also mentioned this

- quote -

Market Index (VTSMX) or Global Equity Fund (VHGEX) and not worry about it
until I had accumulated at least $10K.
- quote -

two funds ?
based on everything I read so far, I came to understand that it would be better from
all those pesky $10 charges to keep at least 10k in each separate fund and so the
'worry' would not come to play until I was on my 3rd year of contribution(s) since
this would be my roth IRA (with it's inherent limits on max contributions per year) -
of course the $10 is likely easily paid with proceeds

now let me also ask this scenario, suppose you had 4 family members, each making their
4k contribution to a roth ira. what might be something to consider with a view toward
all selecting a similar fund or everyone picking something different since they can't
pool the money (4x4000 = 16k)

"Jim" <jim[at]uncombobulator.com> wrote in message
news:57ddsrF2d78s9U1[at]mid.individual.net...

- quote -

I think they're both fine funds (and in fact I own shares in both of them,
among others), but they don't cast their net as wide as the two I mentioned
and I would therefore be less inclined to choose them as the first funds to
open an IRA. On average, you'd probably do quite well with either one over
the long term; but you'd be more likely to depart from the average than you
might with a more diversified fund.

The point is that NAESX sticks exclusively to small-cap domestic companies,
and VEURX is just large-cap European companies. In contrast, VTSMX covers
the whole USA and VHGEX covers the whole world (albeit with more of an
international bias than would make many people comfortable). So if you
happen to hit a run of a few years when domestic small-cap or european
large-cap underperform other asset categories, you won't be as unhappy. On
the other hand, if you hit a run of a few years when those asset categories
outperform the others, you might well be happier.

I'm sure you'll get lots of other opinions in this newsgroup. Ultimately,
you have to make up your own mind.

Andrew Koenig wrote:

- quote -

Sorry, bad trimming...

-Will

Andrew Koenig wrote:
- quote -

ok, let me know also what you think (in the context of my original question) what you
think about
NAESX and VEURX

"Andrew Koenig" <ark[at]acm.org> writes:
- quote -

If you're going into only one fund (and IIRC, the OP was talking
about $4k? - not really enough to split yet into multiple funds,
and certainly not into individual stocks), there are some one-stop-
shopping funds which offer even more diversification than
the total stock fund which is only US Equities. For example,
within the Vanguard universe, the Lifestrategy Growth fund has
50% in the Total Stock Market Index, 15% in the International
index, 10% in the bond index and 25% in an asset-allocation
fund which itself is split between asset classes. It's kind
of a set it and forget it fund. Never going to shoot the
lights out, but pretty solid across the board and I like that
it's got international exposure, too. I've been thinking
lately about even greater international exposure than 15%
for young folks, too. That Global Equity fund is a 100%
equity and only about 40% US, 11% Japan, most of the rest
in Europe, plus a bit of the rest of Asia and even Aus and NZ.
Very nice mix, too, but I think I'd start out, if I were only
going to invest in a single fund, just a bit less globally.

Fidelity's got a "4-in-1" index fund which is invested
rather similarly to that Lifestrategy Growth fund (and
with expenses almost as low). If the OP is interested in
opening up a brokerage account for his IRA instead of a
mutual-fund-only account and will want more flexibility
later on, such an account at Fidelity, invested at least
for the time being in their all-in-one fund - may make
things easier later on. The minimum investment in
non-retirement accounts is $10k, but in an IRA, it's only
$2500.

There are a lot of one-fund solutions out there. To the
OP - be careful to make sure that if you buy into one
that you aren't getting slapped with two layers of expenses -
some "fund of funds" have an expense ratio which may appear
low if it only includes the "fund of funds" wrapper itself
and have additional fees hidden down in the underlying funds.
The Vanguard and Fidelity funds mentioned above do not have
two layers that way - (some other one-family fund of funds
similar to these two also do not have two layers of fees
either). Morningstar's a great place to read about these
things.



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"Mark Freeland" <BnetOnewsX[at]sbcglobal.net> wrote in message
news:9v8Qh.23960$uo3.14329[at]newssvr14.news.prodigy.net...

- quote -

Right you are -- I had mentioned that in an earlier post but forgot it this
time.

Personally, if I were starting an IRA at Vanguard, I would probably put
everything into a widely diversified stock fund, such as their Total Stock
Market Index (VTSMX) or Global Equity Fund (VHGEX) and not worry about it
until I had accumulated at least $10K.

"Andrew Koenig" <ark[at]acm.org> wrote in message
news:PO6Qh.8156$VU4.321[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

Vanguard also charges $10/year for each IRA fund with less than $5K, until
you have $50K invested at Vanguard. So you may not want to split your IRA
too finely there.

https://flagship.vanguard.com/VGApp/...eesContent.jsp

Mark Freeland
BnetOnewX[at]sbcglobal.net

"Jim" <jim[at]uncombobulator.com> wrote in message
news:57b5s5F2cq80dU1[at]mid.individual.net...

- quote -

I believe that VIMSX charges $10/year if your balance falls below $10K. I
don't think there are are any additional expenses for a Roth IRA: Vanguard's
descriptions says that they charge an additional low-balance fee if your
balance is less than $2.5K, but not for retirement accounts. The only other
restriction I know of is that when you sell shares in a fund, you can't buy
shares in that same fund for 60 days unless you do so by US Mail.

- quote -

Yes; this is called an exchange. I don't think it incurs any extra charges
or limitation beyond the 60-day limitation I mentioned earlier.

Of course, these comments are not necessarily accurate. If you want
accuracy, go to vanguard.com and verify it for yourself.

"Will Trice" <wwtrice[at]paragondynamics.com> wrote in message
news:460FBDD9.3080400[at]paragondynamics.com...

- quote -

Please note that I did not write the text attributed to me above.

Andrew Koenig wrote:
- quote -

Ok

- quote -

but wouldn't this incur extra expenses or restrictions on the balance(s)?

- quote -

is this called an "exchange"? ie. move it all from VIMSX to European Stock Index Inv ?
does this also incur some extra charge or limitation?

Jim wrote:
- quote -

There is nothing about a Roth account that makes this true. Within a
Roth, you are free to buy and sell as you please. Vanguard may have
trading restrictions to keep you from going in and out of funds, but
their restrictions will not be based on when you are eligible to put
more money into a Roth. And it's unlikely that their trading
restrictions would be as onerous as you describe above (only one trade
per year per fund), but I haven't been a Vanguard investor in many years...

-Will

"Jim" <jim[at]uncombobulator.com> wrote in message
news:578gsuF2bj1neU1[at]mid.individual.net...

- quote -

No, I don't think so.

Let's assume you opened a Roth IRA account for $4K, and put it all into the
Vanguard Mid-Cap Index Fund (VIMSX).

The initial investment for this particular fund is 3K. I also believe that
you can reduce your balance in a fund to as low as $500 once you've opened
the account. And, of course, you can always sell *all* of your holdings in
a fund, reducing the balance to zero. So once you had established this
account, you could do any of the following:

1) Move the entire 4K into any other fund that has a minimum of 4K or
less. (You can always reduce the balance to zero).

2) Move any amount between 1K and 3.5K into the STAR fund (VGSTX), which
has a 1K minimum. You can't move less than 1K because of the 1K minimum.
You can't move more than 3.5K because it would leave less than $500 in
VIMSX.

3) Move between 3K and 3.5K into a fund that, like many Vanguard funds,
has a 3K minimum. Again, you can't move less than 3K because of the 3K
minimum. You can't move more than 3.5K because it would leave too little in
VIMSX.

Does this make sense?

John is pretty on the money, but here is a little clarification. It
sounds like your roth is with a brokerage and I am a financial advisor
so here goes. The "roth" part is just putting your account under an
umbrella for tax purposes. All it does is say that, as long as you
meet the requirements, your investment growth and distributions are
tax free since you paid taxes on the money going in. You can have as
many funds in that account as you like, provided you can invest the
minimum in each (determined by the broker). When you have more than
one fund, you will give your broker instructions to put the money in
each fund in pre-determined percentages. I do recommend that you talk
to your advisor on proper asset allocation, and review your account at
least every six months to re-allocate your portfolio. Remember, asset
allocation is different than simple diversification.

Christopher Johnson
Financial Advisor
(304) 518-1131
cmjohnson[at]wradvisors.com

Andrew Koenig wrote:
- quote -

ok, so say for example my initial maximum 4k for roth ira in vanguard mid cap index
fund, inv

I can *not* then touch that until next year, I mean, no sell, no buy orders until it's
time for my next 4k ?

did I understand that correctly?

"Jim" <jim[at]uncombobulator.com> wrote in message
news:576tnhF2brql0U1[at]mid.individual.net...

- quote -

I'm a Vanguard customer, so I can tell you how they do it. I imagine that
the other companies are similar. I also do not guarantee that I have all
the details right; if you want accurate information, you can visit their
website (www.vanguard.com) and click the "Research funds and stocks" tab.

Each of their funds has a minimum initial investment. For most of their
funds, it is $3,000; though it is as low as $1,000 for one of them. Some of
them are $10,000 or $25,000. There is also a minimum balance, usually $500;
if it falls below that, they may close out the fund.

So in principle, once you have $3,500, you can open a second fund and move
$3,000 there. After that, you can allocate the money however you want, so
long as you have at leas $500 in each fund. However, most funds charge a
fee, typically $10/year *per fund*, if your balance in that fund is less
than $10,000 and your total balance at Vanguard (including both taxable and
retiremane accounts) is less than $50,000. There is an additional IRA
custodial fee of $10/year for each fund account with a balance of less than
$5,000.

Whenever you transfer money to Vanguard, you specify how you want it divided
across your fund accounts. Once the money is there, you can move it around
freely between fund accounts, subject to the minima and fees, with two other
restrictions:

1) Each fund has a minimum purchase requirement per transaction, usually
$100.
2) Once you have sold shares in a fund, you cannot buy shares in that
same fund for 60 days via phone or web (but you can by US Mail).

So there is an incentive not to split your money across too many funds until
you have built up a substantial balance.

I expect that other fund companies have policies that are similar, but not
identical. I also expect that I have probably missed some details in the
description above; if you care about accuracy, please visit the source.

In article <576tnhF2brql0U1[at]mid.individual.net> ,
"Jim" <jim[at]uncombobulator.com> wrote:

- quote -

Friend, you are over-thinking this one. A "roth" is just a
shell around a bank or brokerage account. There is nothing more
to it. When you establish a roth, you are just opening a new
account. You then put money into the account, so it goes into
the cash bucket. From there, you can invest the cash by buying
CD's, stocks, bonds, and mutual funds, or you can leave it in
the cash account and get money market rates.

So, if you open a roth and put in $2500, that $2500 goes into
the cash bucket. You then give your banker or broker instructions
on how to invest that money. Lets say you put $2000 into an index
fund, that means your account now has $2000 in the index fund and
$500 left in the cash bucket. You can then give instructions to
invest that remaining $500 any way you want. You can leave it in
cash, put it in another fund, or even break it up 5 ways and buy
5 different things. There are no restrictions on how you invest
it as long as you buy approved investments (ie, cant buy real
estate) and meet any minimums (some funds and CD's often have
a minimum purchase).

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

"Jim" <jim[at]uncombobulator.com> wrote
- quote -

Sure.

The notions of "account" and the "funds (or stocks, or
bonds, etc.) held in the account" are different.

- quote -

No. You have to track what the first fund has done from the
time of the first contribution to the time of the second
contribution to know the percent breakdown. E.g. maybe by
the time of the 2nd contribution, the first $4k (which was
invested in say Fund X) has grown to $4.2k. Then you make
your 2nd contribution of another $4k, buying Fund Y. The
percent in Fund X will be a bit higher at 4.2/8.2.

- quote -

You have to do a little arithmetic to determine how much of
the 2nd contribution goes to each fund to ensure you have
50% in each fund.

Little caveat: With Fidelity and others, watch out for
minimums required to be held in funds. Sometimes there is a
penalty when we're talking about, say, under $10k in a fund.

how does this work?

if one opens a new roth ira account and invests it in some index fund, assuming
initially 100% in that one index fund, can a second fund be added immediately? assume
fidelity, t rowe price, vanguard etc. and assume a maximum contribution for that tax
year opened the account. ie. 4000 for tax year 2006.

if a 2nd fund is added, does that mean the 100% is automatically allocated 50%/50%
between the two funds?

or, does one have to sell the initial index fund first in a separate transaction and
then purchase in another transaction the two funds?