Do you recommend investing in mutual funds or ETFs ? (FXAIX vs. VOO)?
Asked 3 years ago
I haven’t invested anything yet since I’m still researching and studying my options. I’m planning to make an initial investment of $2000, and based on what I’ve read so far: I think my best option is S&P 500 index funds. I already opened an investor account and a Roth IRA with Fidelity, and I was thinking of investing in FXAIX shares through my Roth IRA. Right now, I’m looking for long-term investments but would like to look into short-term investments once I feel confident enough and have a deeper understanding of the process. However, I’m not sure if I should go with FXAIX or VOO. I know they are both similar in that they both track the S&P 500, but FXAIX is a mutual fund, and VOO are ETFs. I was leaning towards FXAIX since I already have an account with Fidelity and the shares are cheaper than VOO. What would be my best option between FXAIX vs. VOO? And also, should I split my money between an S&P 500 index fund and some other kind of ETF? Thanks.
Andrew Moran
Wednesday, July 28, 2021
Mutual funds may have been great decades ago when the financial markets were not as democratized as they are today. Exchange-traded funds (ETFs) are the superior option since fees are a lot lower, they are passively managed, and you garner immediate diversification.
Now, in comparison between FXAIX and VOO, I would give the advantage to VOO simply because it is an ETF. Either way, index funds are the best option to have in your portfolio.
Moreover, if you are just starting out in investing, it would be best to start your journey by holding onto either FXAIX and VOO before starting with another investment. After you have some more experience under your belt and you have performed your due diligence, you can ensure you are executing the right trade.
Andia Rispah Igobwa
Thursday, August 12, 2021
Create A Balanced Portfolio With Mutual Funds?
If it's essential to have your money balance out over various investment categories, it may make sense for you to use mutual funds.
Why?
Well, in the world of stocks, there can be up to 2 million different potential investments (not including individual stocks). To put this into perspective, an online broker might offer 4-500 investments.
However, if we look at managed mutual funds and exchange-traded fund (ETF) companies that offer stock portfolios, one can find as many investments as possible.
Some offer up to 1 million+ different types of investments such as emerging markets, small countries, and other less common sectors!
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