I’m looking for advice on whether to go with VOO or VOOG for my Roth IRA. I have $8,000 to invest and want something aggressive since I’m in my late 50s and trying to make up for lost time. They seem pretty similar except for the price. Any thoughts or suggestions?
VOO tracks the S&P 500, covering 500 large-cap companies. It’s a broad market index fund.
VOOG is more focused on the growth stocks within the S&P 500. It’s definitely a more aggressive choice if that’s what you’re after.
If you want something even more aggressive, you could look into QQQ, which tracks the Nasdaq 100, or VXF, which focuses on smaller companies outside the S&P 500. To diversify, you might consider a mix of 60% VOOG and 40% VXF.
Good luck with your investment plans!
@Jesse
If diversification is the goal, why not just go with VTI? It covers the total US stock market.
@Jesse
That’s helpful, thank you! I’ll look into VXF and see how it fits.
@Jesse
What’s the difference between VOOG and FXAIX?
Ash said:
@Jesse
What’s the difference between VOOG and FXAIX?
Both track the S&P 500, but FXAIX is a mutual fund from Fidelity, while VOOG is an ETF from Vanguard. The main difference is how they’re traded. ETFs like VOOG trade like stocks during the day, while mutual funds like FXAIX are priced only once daily.
@Harlem
Thanks! I’m new to investing and wasn’t sure why ETFs seem to be more popular. Is there an advantage?
Ash said:
@Harlem
Thanks! I’m new to investing and wasn’t sure why ETFs seem to be more popular. Is there an advantage?
ETFs used to be cheaper than mutual funds, so they became more popular. Now the costs are pretty similar, but people like ETFs because you can trade them during the day and transfer them between brokerages easily.
Ash said:
@Harlem
Thanks! I’m new to investing and wasn’t sure why ETFs seem to be more popular. Is there an advantage?
Exactly! I personally like ETFs better because I like seeing price changes throughout the day. Plus, the expense ratios are pretty similar now, so I’d go with VOOG if you’re picking between the two.
Ash said:
@Harlem
Thanks! I’m new to investing and wasn’t sure why ETFs seem to be more popular. Is there an advantage?
Another thing to think about: mutual funds like FXAIX can’t be transferred between brokerages easily. You’d have to sell them and reinvest, which could cause tax issues. ETFs are more portable.
Ash said:
@Harlem
Thanks! I’m new to investing and wasn’t sure why ETFs seem to be more popular. Is there an advantage?
ETFs are also more tax-efficient in taxable accounts since mutual funds might distribute capital gains you didn’t plan for.
If aggressive growth is your goal, VOOG is the better choice between the two. It’s outperformed VOO since its launch.
But if you’re open to other funds, check out large-cap growth ETFs that have done even better than VOOG. Here’s a link to compare their five-year performance:
https://etfdb.com/etfdb-category/large-cap-growth-equities/#etfs__returns
I put 100% of my Roth IRA into VUG. It’s like VOOG but has lower fees.
If you want to be more aggressive, VOOG is the way to go.