Re: SPY vs. VFINX, I have the following info from a person in the know :
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"The SPY will certainly give you exposure to the domestic large
cap stock market. Tracking error should be very low. Expenses
may work out to be a little higher, but not enough to change your
life. You can also sell the SPY short and get instant transactions
rather than wait for the end of the day pricing of the fund. While
not imporatant to me, that may be be considered to be an
advantage to some investors.
But, I do not think that you get automatic reinvestment of
dividends. If that is a concern, the index should be prefered. But,
the SPY is a viable option, and a good product.
Perhaps I should, but I spend very little time wondering about the
gains in the index funds. It may bite me in the event of a real
meltdown, but if the funds use HIFO (higest price in-first out)
accounting, they can liquidate lots of positions before locked in
capital gains become a problem. Bogle is on record that unless
redemptions exceeded 30% of fund assets, taxes can be managed.
If it gets that bad, we will all be looking for places to hide, and
taxes may be far down our list of problems."
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Regards,
Dipy. |
