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Old 01-09-2009, 03:17 PM   #41
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Unfortunately, I'm just too greedy to pay extra for an index fund.

That's the reason they are so cheap, they're basically unmanaged..........
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Old 01-10-2009, 10:43 AM   #42
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The vast majority of my portfolio is invested in Vanguard index funds, either directly through Vanguard, or indirectly through my Fidelity 401(k). Most of the remainder is in US Treasuries via the Vanguard brokerage. I'm not too worried about it, but I must admit their cost structure is just too good to be true! If they were exposed as the biggest security fraud in US history, I could look back and say in retrospect I was obviously getting an impossibly good deal. After all, nobody else manages to offer that kind of deal without temporarily waiving fees! Unfortunately, I'm just too greedy to pay extra for an index fund.

Rest assured. VG's cost structure is excellant, but not too good to be true. Thier ER for Index 500 is around .015, but the TSP "C" fund is essentially the same item for around .005, managed by Barclay's, I believe (with overhead subsidized by taxpayers, I guess). And there's Penfed that gave me a home loan for 6% while paying me 6.25 on my CD.
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Old 01-10-2009, 12:12 PM   #43
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That's the reason they are so cheap, they're basically unmanaged..........
I know, index funds are cheap and avoid most manager risk. What I have never really understood is why people buy index funds from other providers who charge more for the same index! Comparing Schwab with Vanguard below, unless you couldn't reach the Vanguard minimum investment, why would you pick the Schwab fund?

Schwab S&P 500 Index Fund - Inv Shrs SWPIX
Gross Expense Ratio (before waivers): 0.35%
Net Expense Ratio (after waivers): 0.35%
Minimum investment $100.

Vanguard 500 Index Fund Investor Shares (VFINX)
Expense ratio as of 12/31/2007 0.15%
Minimum investment $3,000

Schwab Institutional Select S&P 500 Fund ISLCX
Gross Expense Ratio (before waivers): 0.22%
Net Expense Ratio (after waivers through 2/27/09): 0.1%
Minimum Initial Investment $75000

Vanguard 500 Index Fund Admiral Shares (VFIAX)
Expense ratio as of 12/31/2007 0.07%
Minimum investment $100,000

I can imagine someone investing in BOTH the Vanguard and the Schwab fund to diversify away some of their, extremely low, but still present, single management company risk. I'm just too cheap to do that!
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Old 01-10-2009, 12:27 PM   #44
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Rest assured. VG's cost structure is excellant, but not too good to be true. Thier ER for Index 500 is around .015, but the TSP "C" fund is essentially the same item for around .005, managed by Barclay's, I believe (with overhead subsidized by taxpayers, I guess). And there's Penfed that gave me a home loan for 6% while paying me 6.25 on my CD.
Actually the VG 500 Index ER is 0.15% for Investor shares, 0.07% for Admiral.

The TSP C fund ER is 0.015%. A truly minuscule expense ratio, no doubt.

Not to pick, just for the record.
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