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Better to invest in Vanguard 500 or Total Stock index fund?

I am a young investor needing to put money into an IRA and have to choose something within the Vanguard family. Fees are similarly inconsequential at 0.18 or 0.19 %, resp. Shares of 500 fund are $135 compared to $40 for TSI.

Public Comments

1. If your choice is between those two, go with the total market index--it's more diversified and includes small cap stocks (which have a higher return over time). However, I have a Vanguard IRA and did extensive research and questioning before I chose funds. I like the Target Retirement 2045 (or they have 2050 now too I think) because it includes international stocks and bonds and adjusts allocation automatically as I age. I also really like the LifeStrategy Growth fund which is similiar but doesn't change allocation over time. The expense ratios are a little higher, but you save by not having to open 3-4 different funds to meet all your needs (each index fund will cost $10/yr until you have over $10,000 in each one of them). Plus you get the added diversification of bonds and international and sector funds.
2. I went with the TSM Index because it was the whole market with all sectors. The 500 is just the big companies. As well as you being able to get more shares for your money with the TSM.
3. You may want to compare mutual fund retruns with returns from the stocksmonthly.com system.