Whats my next index?

[ChromePony]

So even if I just rearrange my holdings within Vanguard and exchange one index for another Im still subject to capital gains tax? I guess on the plus side thanks to this recent market downturn I no longer have any such gains from my emerging markets index so maybe this is the time to do it [img]/images/graemlins/tongue.gif[/img]

[kuboa]

The target funds are a one-size-fits-all solution, and are oriented towards retirement. If you're looking at a 10-year horizon, it's true that you are prudent to avoid 100% equity, which is quite arguably the best approach for a 20+ horizon, i.e., retirement. If you're going to pull your cash out for a house DP, a Roth IRA is not the best approach- you pretty much have to settle for a general account with associated tax-exposure. That said, if you have a work 401k, that money is invested pre-tax (good thing), and if they match, that is FREE MONEY. Once you've got that down, invest the max in your Roth IRA, and pay tax on the way in but never again. Your absolute best friend in investing is time, which you have buckets of, and you're then free to use poker dough to buy the house with wage income supplements as necessary (and for that matter you could (but shouldn't) withdraw Roth contributions for the house). Again, retirement investments at age 22 will be HUGELY valuable later, and should be a top priority, especially if you have other funds you can devote to a house.

As for trading money between funds, if you have a regular account, then yes, you do pay taxes.