Submitted by ninjahackerman t3_11dydxk in personalfinance
ahj3939 t1_jabl8pb wrote
Reply to comment by ninjahackerman in Roth IRA and taxable account advice by ninjahackerman
Personally I like VTSAX or FSKAX better since thy are total market index (3000-4000 stocks)
S&P 500 is only the largest 500.
It's not a huge different to be honest because the indexes are market cap weighted. Meaning for example if all the "total market" is worth $100 billion (I'm making up numbers here) and all of Apple is worth $5.32 billion it will be 5.32% of the stock in your total market index (that percent is what Fidelity is currently showing for FSKAX).
So at the end of the day dollar per dollar S&P 500 makes up about 82% of your total market index, that's why they perform about the same.
However personally rather invest in the total market because you're getting exposure (good or bad) to thousands of other stocks.
Also I think the advice "just invest in S&P 500" is antiquated. it's not terrible advice, but the issue is say 40 years ago all these index funds didn't exist and S&P 500 was more or less the most diverse you could invest in.
ETF and mutual fund is the same thing. Use mutual fund in your retirement account and ETF in taxable. It's more tax efficient and also will avoid any possibility of wash sales (as long as you avoid Vanguard funds since they are technically the same fund)
ninjahackerman OP t1_jabm6re wrote
You’ve confirmed my plan so thank you for that. Now should you be more aggressive in a taxable account or the retirement account?
I was thinking AI, Tech and Bioscience ETFs/Stocks for my taxable and simple yet promising Mutual funds for my IRA. Or would you be willing to risk more in the Roth? Looks like all tech stocks are on sale
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