Just a couple of things to touch on...
You say that these funds would be "long-term" investment. What do you consider "long-term" and what would these investments be used for?
If you want a REIT, you should hold it in your Roth and not in a taxable account. REIT's are very unfriendly tax-wise and your returns will be significantly decreased by the taxes.
More importantly, you've got to realize the risk of your funds. I know you're young and being aggressive (which IMO is good) but don't be naive about the possiblity of losing a lot of money. I know they have great looking 5- and 10-year returns but don't get blinded by the numbers.
Quote:
|
Originally Posted by usnavy_233
unless the funds had an outright horrible first year (and it would have to be HORRIBLE to offset my monthly additions) I don’t foresee a big problem there. And of course, the amount in the mutual(s) would continue to grow with each year.
|
The funds wouldn't have to have an "outright horrible first year" for you to lose a significant amount of money. You could lose half or more at any given time and your monthly additions WON'T be able to compensate for that. And that's an even bigger determinent of risk...your willingness to stick with them in times of loss. If the funds were to fall significantly (30-40%) would you continue to put money in them or would you sell? Again, I'm not knocking the funds or your decision to go with them; although depending on what they're to be used for maybe you shouldn't. I just want you to know that the possiblity to lose a lot of money is there.