allie wrote:Since I'm new to making good decisions with this....2 people suggested the same funds. How would I *know* that those would be good choices? I'm assuming it's not just from the low expense ratios. I'm just starting to learn about all this - I downloaded both Bogelhead books yesterday and am looking forward to reading and learning.
Generally you want to look for:
Indexed to a well known index and does a good job at tracking the index.
Highly diversified (i.e., not an index that's a small slice of a small slice...)
Matches an asset class you want exposure to
Low cost - if two things closely track the same index, why would you pay for the more expensive one?
What to avoid:
What to be careful with:
Non-indexed passive management - can be ok, can be bad... case by case basis. Generally only needed for somewhat esoteric asset classes.
Low ER and Index funds typical are highly correlated, although there are some amazingly expensive index funds out there, so always check the ER! (I know of a S&P500 index at around 2.5% ER! Around 50 times a low-cost one!) The Fidelity Spartan funds and Vanguard funds you had available are well known (at least around here
) for being solid index funds that track nicely, are very broadly diversified, and do so at rock bottom prices. They also match asset classes that you're interested in. So... they're the recommended ones.