I’ve been investing for about a year and have a taxable brokerage account, Roth IRA, and 401k. The Vanguard 401k is set to the default target 20XX fund while my other two are self managed and are all in total stock market and sp500 mutual funds (Schwab).
I see many people mentioning buying ETF’s instead of mutual funds so I’m wondering if I’m doing something wrong. I understand ETF’s carry commission fees when buying and selling while mutual funds do not, and mutual funds tend to have higher expense ratios. The fact that I make lots of small purchases by investing a portion of my biweekly paycheck makes it seem like I would get hit with a lot of commission fees buying ETF’s, which makes mutual funds look more attractive. Another thing that I recently read was that I may have to pay capital gains taxes on my mutual funds even if I don’t cash them out, since the equities that back them are being bought and sold, while I wouldn’t have to this with an ETF.
I have a few thousand invested in mutual funds. Should I switch over to investing in ETF’s instead? I don’t want to get billed with huge capital gains taxes in the future when my investments are worth much more.
Submitted September 30, 2018 at 07:56AM by zbag2219 https://ift.tt/2Qk0S0X
