Please help me ...just starting out with Vanguard, want to open a Roth?

Question:

hi, I finally have $3000 to open a Roth IRA at Vanguard. I want to do a Total Stock Market account (TSM) which I've heard is really good for novice investors like myself who would like a portfolio i don't need to check all the time. BUT, I've also heard that the S&P500 is great too. Can I do both within the Roth with Vanguard or is that a separate MUTUAL fund that has not to do with Roth.

IS the S&P a TSM or are they separate? I did some research on the internet but then my eyes started hurting so i figured I'd just ask my "beginner" question here. I really do appreciate your help as I'm eager to get started. I will call Vanguard I just want to be more informed first. THanks again.

Answer:
You can hold both within your Roth but you will need to meet the fund minimums. You can also hold either fund outside of a Roth in a regular mutual fund account.

Keep in mind that they are very similar funds. Stocks that are in the S&P are also in the TSM - S&P makes up part of the total stock market.

Vanguard has a good fund comparison tool on their website for you to compare the 2 funds.

www.vanguard.com

Once you open an IRA with VGI, you should be able to switch into different funds provided you meet the minimum. Talk to them, they usually are very helpful, I worked there for a while on the phones. Try to bone up by reading the website though.

The Roth is an excellent choice AFTER you have gotten any matching 401K or Simple IRA money via your employer (thats free money, get it 1st). The TSM is a fund of funds and reflects a cross section of the S&P..It is a solid, low maintenance choice but be prepared to hold it thu thick and thin. The S&P is due for a 'correction' (read loss) but these dips have never been more than 7 years across. Read up on the 'Rule of 72' as it is crucial to your long range plans. Good luck!

ok, ROTH is not a mutual fund, once you open a ROTH the bank controls your investment so you can not choose your portfolio but you don´t pay taxes on earnings. Now with a mutual fund you have more control, and an advisor can give you your options depending on your money goal, how long will you be needing the money etc.
S&P and TSM are separate, they are different typer of account management.
Best advice, talk to a financial advisor, and see your options, make a choice based on when you will need the money. The market goes up and down no matter what you chose, but if you have long time to let it accrue then be a bit agresive on your investment (mean taking risks) and more conservative later on. Talk to your advisor he´ll explain that better.

Please help me ...just starting out with Vanguard, want to open a Roth?

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