[mathjak107]

Quote:

Originally Posted by redduck I understand that Vanguard's Index funds and ETF's are usually less expensive than their competitor's offerings. But, for some reason, I'm under the vague impression that Vanguard's Index funds and ETF's are actually a bit better? smarter? safer? more wisely put together? Anybody have any idea about this?

yes and no. in an up market index funds are great, in a down or sideways market you stand no chance of making money or cushioning the damages. i use both , active and index. long term my active have beaten my index portfolio even with slightly higher expenses.

its nice having the tax efficiancy of the index funds and etf's but watch out for the tax torpedo. sometimes they are soooo tax efficiant that when held in a taxable account you end up with a massive tax bill when sold because very little taxes have been paid along the way and that may be enough to cause you to loose certain tax write offs or trigger the amt tax on all your income....... we lost both the stimulous check and triggered the amt by heavy capital gains..... as well as loosing the college deduction for my wife. in this case a less efficiant fund would have been better for us over all. the amt penalty was an additional 12,000 bucks by itself plus all the other stuff we couldnt take.



like everything in this world things always look great and a no brainer, like paying less taxes along the way , until they arent. then you realize there are pitfalls you didnt even think about