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Buying Your First Fund and Taking the Plunge

You've saved your money, taken the time to educate yourself about mutual funds and you have decided that now is the time to take the plunge and invest into an Index Fund. There are so many Index Funds out there and if they all mirror the S&P 500 Index you might think, "What is the difference between any of them?"

In some of the other articles on MsFiscallyFit.com, we have mentioned some of the things to take into consideration when purchasing a mutual fund such as: variety of fund family, sales loads and operating expenses. When considering all of these factors, one particular Index Fund comes to mind, the Vanguard 500 Index Fund (symbol: VFINX, click here to download a prospectus or request one by mail, or call Vanguard at 1-800-871-3879).

VFINX is in the Vanguard Family of Funds which has a very large selection of mutual funds in many different investment vehicles spanning from Index type funds through money market and bond funds. Investing within Vanguard allows you the ability to change your mutual fund investment without having to open new accounts with other companies to find the type of fund you want. Another advantage is that you will have all your Vanguard accounts combined on one statement rather than receiving different statements from many companies (Who needs extra paperwork, right?). The VFINX has no sales load and the operating fees are one of the lowest among all mutual funds.

The return of VFINX has averaged over 18% for the last ten years. Add to this the low minimum initial investment ($3,000 for regular account, $500 for IRA account) makes this Index Fund a very attractive investment.

If you purchase the VFINX from a broker, it is possible that you will pay the broker's fee to process your purchase even though Vanguard does not have a sales load. Check with your broker to see if you will be charged a commission or avoid fees by purchasing the VFINX directly from Vanguard.

Vanguard 500 Index Fund

 

Symbol

VFINX

Phone Number

(800) 871-3879

Web Site

www.vanguard.com

Minimum Investment (Regular acct / IRA acct)

$3,000 / $500

Load

None

Expense Ratio

0.18% (very low)

Redemption Fee (if you sell within 12 months)

none

Year to date return (as of 12/31/99)

21.04%

Average annual 5 year return (as of 12/31/99 )

28.46%

(Source: www.vanguard.com – accuracy of this information is not guaranteed)

 

Note: Past results is no indication of future performance. This information is provided to you as a starting point to BEGIN your research and is not to be construed as an offer to sell or a solicitation of an offer to buy. The information presented in this article represents MsFiscallyFit.com's feelings and opinions about a particular stock or mutual fund on the specified date and is not meant to be a specific trading recommendation. Stocks and sector mutual funds tend to be riskier and more volatile and should be considered by investors that have long term investment timeframes, a tolerance for risk and are willing to accept unplanned volatility. Our opinions are based on sources believed to be reliable and written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness or the results obtained by individuals using such information. Readers are urged to consult with their own financial advisors before any investment decision is made and all information contained in this information should be independently verified with other sources. Partners, employees and affiliates of MsFiscallyFit.com may or may not hold positions in any of the stocks or mutual funds included in this information. MsFiscallyFit.com does not receive any compensation of any kind from the companies that we express opinions about. As always, each reader is responsible for the risks and consequences of their own investment activities and in no event, shall MsFiscallyFit.com or its employees, partners or affiliates be liable for any damages, direct or indirect, that may result from the use of this information.
 

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