Index Fund Checklist: Don’t Leave Home Without It – Episode #23

Ethan Bloch highlights three criteria from his Index Fund checklist. The full checklist is linked up below in webpage and PDF form. Be sure to print this bad boy and place it in your wallet for fast and easy access.

Not working? Try the QuickTime version.

Wine drank on today’s episode:

Vista Hermosa – Red Wine [link N/A]

Resources that go along with today’s episode:

Index Fund Checklist
Index Fund Checklist – Wallet Size PDF

  • AC

    If I wanted to by a Vanguard index fund, am I able to do it from my previously existing Fidelity brokerage account, or do I need to get a Vanguard brokerage account to buy the Vanguard index funds? If still possible to buy Vanguard index funds from Fidelity accounts, will there be more fees for me to deal with?

    Also, is there a way to set up automatic monthly purchases of index funds? Would there be trade fees associated with each monthly purschase?

  • It is possible but would be unwise to buy Vanguard Index Funds in your Fidelity brokerage account, because Fidelity will charge you something like $75 per transaction. That being said Fidelity's own Index Fund offerings are second to Vanguard, I own some in one of the portfolios I manage, you can research the different ones we've talked starting here: http://www.thewaytobuildwea....

    I should add, the biggest downside to Fidelity's Index Funds is the minimum initial investment of 10k that is attached to most Fidelity offered Index Funds. Depending how much cash you have to invest this can be tragic as it is forcing you to take a massive position right off the bat and if you happen to be buying at the wrong time, this could be painful and will be more difficult to average out using a dollar cost averaging process; which I'll be talking about on tomorrows (Tuesday) show.

    In regards to your question about setting up automatic purchase, this is possible through both Fidelity and Vanguard and if you are buying their specific Index Funds there are absolutely no commissions or transaction fees attached.

    Hope this helps [I will respond to your email later today with more details].



  • Thai

    Looking over those tables you posted, I was wondering if the expense ratios indicate anything (characteristics, risks, etc) particular about an index fund... I noticed that International funds are somewhat higher in their expenses in comparison to say the 500 index or total stock/bond index funds but without any insight, I cant see the logic. I can however tie in the connection between a funds age and its avg. return, so that was easy. Do you think you can shed a little light on the matter?

  • Great question Thai. The reason that International Index Funds have higher expense ratios is because they are more challenging to put together and operate. You have to remember these are comprised of the stocks of international companies that trade on international exchanges in international currencies. All of this adds multiple layers of complexity to the to setup and operation of a passively managed international index fund.

    Hope that helps!

    Do let me know if you have any further questions.



  • Thai

    Dude, thanks for answering that man.

    Sometimes it's the little nagging questions, that when answered, are most empowering.

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