Hi, I was wondering If DCA into SPY was a good idea for my roth if:
a. I use sharebuilder at $4/ transaction
b. I Set the option to only make a purchase when the account balance reaches $1000 ($96 weekly pay decuction x 11[weeks])
(Investing more frequently than 13 weeks to get the dividend.)
c. max out my roth like this each year.
My other option was just doing a fund through T Rowe. like TRRNX.
As I am just starting "the accumulation phase" (read this somewhere). I figure that even though the effective expense ratio I will be paying will be similar, the overall lower annual expense ratio on SPY will win long term because gains - .08% annually > gains -.7 % annaully, even if I pay more of a transaction fee ($20) per year. Is this a good plan. I will have the funds in one of the sharebuilder Reserve money market funds prior to the purchases.
d. My other, bad option is to leave the so called plan I have in place now.
PRNEX $100 / MO
PRMSX $100/ MO
after reading this forum for a bit I consider the exp on PRMSX, way too high, AND now the turnover ratio on PRNEX seem too high for my tastes even in a qualified account. ( I mean what percentage would PRNEX have to beat SPY by over 30 years to compensate for the expense difference of .60 %.
(I found historical data on Yahoo but I am a few months away from being able to link returns together.)
Any thoughts would be appreciated.
a. I use sharebuilder at $4/ transaction
b. I Set the option to only make a purchase when the account balance reaches $1000 ($96 weekly pay decuction x 11[weeks])
(Investing more frequently than 13 weeks to get the dividend.)
c. max out my roth like this each year.
My other option was just doing a fund through T Rowe. like TRRNX.
As I am just starting "the accumulation phase" (read this somewhere). I figure that even though the effective expense ratio I will be paying will be similar, the overall lower annual expense ratio on SPY will win long term because gains - .08% annually > gains -.7 % annaully, even if I pay more of a transaction fee ($20) per year. Is this a good plan. I will have the funds in one of the sharebuilder Reserve money market funds prior to the purchases.
d. My other, bad option is to leave the so called plan I have in place now.
PRNEX $100 / MO
PRMSX $100/ MO
after reading this forum for a bit I consider the exp on PRMSX, way too high, AND now the turnover ratio on PRNEX seem too high for my tastes even in a qualified account. ( I mean what percentage would PRNEX have to beat SPY by over 30 years to compensate for the expense difference of .60 %.
(I found historical data on Yahoo but I am a few months away from being able to link returns together.)
Any thoughts would be appreciated.