Where to go, what funds?

**Petunia 100** · 03-26-2014, 08:44 AM

You start by making a reasonable asset allocation plan. How much in stocks, how much in bonds, how much in cash. Of your stocks, how much in US, how much in foreign. Those are the big decisions, having the most impact on your portfolio's volatility and returns.

So, how old are you, and what is this money for? If it is retirement money, and your retirement is more than 20 years away, you probably want to be stock heavy.

Personally, I like Vanguard's Target Retirement Funds. They hold total market US stock, foreign stock, US bond, and now even a bit of foreign bond. You get broad diversification, low cost, and automatic rebalancing, all in a single fund.

**sniper260** · 03-26-2014, 09:24 AM

I'm 27 years old... I'm definitely in aggressive mode. So more stocks than bonds. I just got off the phone with vanguard and set up an account and they are sending me the papers to get back to them so I can go ahead and get my Roth Ira to vanguard.

since I have enough to open the account at vanguard I decided not to waste any time with American funds and paying a load up front and higher management fees.... I would rather more of my money go into my accounts than to pay someone else...

for someone with 16- 30 years still to be able to work and contribute max amount to Roth ira.... which vanguard funds do I need to look into? I want diversity.... not straight single stocks so I would go with an aggressive mutual fund type fund correct?

Recommendations on funds?

**sniper260** · 03-26-2014, 09:27 AM

My other accounts with American funds don't have enough in them to open up more accounts at vanguard... so I'm thinking about building these funds up using American funds how ever long it takes.... then transferring them to vanguard when i can...

American funds said they don't have a transfer fee to move the funds so I'm not loosing money there when i do move them...

**autoxer** · 03-26-2014, 10:46 AM

That's great that you made the move! That is going to save you a ton of money in fees.

If you want to keep it really simple, look at the Target date funds. VFIFX is for a target retirement date of 2050. The great thing about the target date funds is that they automatically rebalance to keep the asset allocation balanced for your age. If you look deeper into VFIFX (http://quotes.morningstar.com/fund/VFIFX/f?t=VFIFX), it is currently 63% Total Stock Market Index, 27% International Stock Index, 10% Bond Market Index. That will gradually shift to more bonds and less stocks as you get closer to the target date.

If you want a more hands on approach, you will need to determine a desired asset allocation and check it quarterly or yearly. As for the funds, you don't need a fancy complicated investment plan. You can have a well diversified portfolio by only choosing 2 or 3 mutual funds. If you want to do some reading about investing, check out http://jlcollinsnh.com/stock-series/ He even shows some sample portfolios, depending on your goals and risk tolerance.

If you look at a fund like VTSMX (Vanguard Total Stock Market Index), you can see what it is invested in and how it is diversified:

http://quotes.morningstar.com/fund/VTSMX/f?t=VTSMX

Code:

Top 10 Holdings (14.1% of Total Assets)
Apple Inc.	                AAPL	2.28%
Exxon Mobil Corporation Common	XOM	2.02%
Google Inc.	                GOOG	1.62%
Microsoft Corporation	        MSFT	1.38%
Johnson & Johnson Common Stock	JNJ	1.25%
General Electric Company Common	GE	1.24%	
Wells Fargo & Company Common St	WFC	1.18%	
Chevron Corporation Common Stoc	CVX	1.07%	
JP Morgan Chase & Co. Common St	JPM	1.03%	
Procter & Gamble Company (The)	PG	1.03%

My personal choice is a Target 2045 fund for my 401k & IRA's, and VFIAX (Vanguards S&P 500 Index fund) for my taxable brokerage account. I will diversify my brokerage account more once the balance is larger, so for now, I only have the one fund.

**jIM_Ohio** · 03-26-2014, 11:05 AM

Originally posted by sniper260 View Post

When I'm ready to do so... I'm probably going with Vanguard... but we have a few things to knock out first...

When I do open an account with vanguard what mutual funds and stuff should I put my money into? How do you research the worth of a mutual fund and decide which is best for you? I've heard the vanguard index mutual fund is good... but I also want to end up diversifying things where I don't have all my eggs in one basket too... I know I want the no load funds like I've been told about... that paying 5.75% fee per buy in with a broker is a waste of money that could be working more for me...

how do you go about selecting long term funds to put your investments in?

I need to get my investment stuff done and put where it needs to be so there is no jumping around broker to broker stuff once the accounts have any value. Then I get a fine for moving stuff out of their funds...

what do I do??!!!

Every response you get will take you in a different direction. Most will be correct, but the single best thing you can do is take a step back and learn before you choose.

Learn the difference between a stock and bond
Learn the difference between a large cap stock and a small cap stock
Learn the difference between a corporate bond, junk bond and government bond

Then decide HOW MUCH you are going to invest, as there are minimums. This will limit your choices...
If you invest through Vanguard, they will "force" you to adhere to minimums
If you use etrade and Vanguard ETFs you might have an end run around the minimums

Then decide your asset allocation, which is:
The % stocks and % bonds in your portfolio (for example 80-20 or 40-60)
The % large cap, % mid cap, % small cap and % foreign stocks (for example an 80-20 portfolio might be 30-15-15-20; a 40-60 portfolio might be 20-5-5-10)
The % bonds in portfolio (for example the 80-20 might be 10% corporate, 5% government and 5% junk, the 40-60 might be 10% corporate, 10% government, 10% real estate, 10% junk, % foreign government and 10% emerging market bond).

If you read this from bottom up, you will likely get lost, focusing on a detail when you don't have a big picture thought process. If you read top down, you know what the differences are and know why you want more bond diversification in a 40-60, but need less stock diversification in an 80-20.

If you educate yourself, you will answer your own questions most of the time.

**Petunia 100** · 03-26-2014, 01:18 PM

Originally posted by sniper260 View Post

My other accounts with American funds don't have enough in them to open up more accounts at vanguard... so I'm thinking about building these funds up using American funds how ever long it takes.... then transferring them to vanguard when i can...

American funds said they don't have a transfer fee to move the funds so I'm not loosing money there when i do move them...

Personally, I would not invest another dime into the American Funds.

At Vanguard, you only need 1k to get started with a Target Retirement Fund or the STAR fund. You can make additional investments with as little as $100. If you have that, transfer it. If you don't have that, save up more in a savings account.

Although you certainly can choose to hold many funds, a Target Retirement Fund is all you need.

**Petunia 100** · 03-26-2014, 01:21 PM

Originally posted by sniper260 View Post

I'm 27 years old... I'm definitely in aggressive mode. So more stocks than bonds. I just got off the phone with vanguard and set up an account and they are sending me the papers to get back to them so I can go ahead and get my Roth Ira to vanguard.

since I have enough to open the account at vanguard I decided not to waste any time with American funds and paying a load up front and higher management fees.... I would rather more of my money go into my accounts than to pay someone else...

for someone with 16- 30 years still to be able to work and contribute max amount to Roth ira.... which vanguard funds do I need to look into? I want diversity.... not straight single stocks so I would go with an aggressive mutual fund type fund correct?

Recommendations on funds?

At age 27, I'd do Target Retirement 2050.

I'm 47. In my Roth and in my employer's retirement plan, I hold Vanguard Target Retirement 2030.

**sniper260** · 03-26-2014, 01:39 PM

So the target retirement funds are good...

It all gets so mind boggling... I don't know what year I will retire... I will be eligible to retire in 2030 with 20 years of service at age 44....., but I will end up working longer than to age 44 I'm sure if I can, my government retirement goes nuts the more years I put in after 20 years of service.

for retirement pay I get:
*TSP
*supplemental pay that is about $40 per year of service
*FERS - which is top 3 highest paid years of service averaged together - then I get paid 34% of that number, plus 1% for every year after 20 years that I put in... so if I work 25 years I get 39% of the average of my top three highest paid years of service..
*Roth IRA

So we have a 4 tier retirement as of right now with me... Then the wife's retirement too and her Roth IRA... Between the two of us we have 6 funds for retirement that we will draw money from..

Any other investments are all extra income and wealth building....

It's just not easy to figure this stuff so far ahead... Then there is no guidance with if I am doing the best I can be doing investing wise...

I'm going to have to research the vanguard target date funds more and learn learn learn!!!

**jIM_Ohio** · 03-27-2014, 05:37 AM

Originally posted by sniper260 View Post

So the target retirement funds are good...

It all gets so mind boggling... I don't know what year I will retire... I will be eligible to retire in 2030 with 20 years of service at age 44....., but I will end up working longer than to age 44 I'm sure if I can, my government retirement goes nuts the more years I put in after 20 years of service.

for retirement pay I get:
*TSP
*supplemental pay that is about $40 per year of service
*FERS - which is top 3 highest paid years of service averaged together - then I get paid 34% of that number, plus 1% for every year after 20 years that I put in... so if I work 25 years I get 39% of the average of my top three highest paid years of service..
*Roth IRA

So we have a 4 tier retirement as of right now with me... Then the wife's retirement too and her Roth IRA... Between the two of us we have 6 funds for retirement that we will draw money from..

Any other investments are all extra income and wealth building....

It's just not easy to figure this stuff so far ahead... Then there is no guidance with if I am doing the best I can be doing investing wise...

I'm going to have to research the vanguard target date funds more and learn learn learn!!!

We all can do better at something financially. The art is knowing if your doing good, bad, or need improvement. Avoid doing bad, and you are likely doing really well.

**feh** · 03-31-2014, 10:17 AM

Originally posted by sniper260 View Post

what do I do??!!!

Take the time to educate yourself. Investing is only as difficult as you want it to be.

Start here: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

**snafu** · 03-31-2014, 01:15 PM

If you choose a Vanguard fund and decide you want to shift between funds or even buy a Vanguard ETF it can be done. It's hard to imagine what will be available in 35 years for example. There may be new funds to come we haven't yet imagined. Vanguard may change terms and conditions or be bought out by some super agency.

There is a lot to learn but it can be fun. SA offers some terrific discussions.

**YolandoAmaya** · 07-06-2014, 11:21 PM

It is good that you are following the concept of don't put all eggs in one basket. You have to decide which type of fund you want to select. Vanguard fund is good that you can start with only 1k then further increase it.

**Petunia 100** · 07-19-2014, 09:49 AM

Originally posted by KennethBurroughs

Start your investments with a reasonable property strategy. Make an accurate plan for your requirements and according to your needs select your mutual funds. First, think is for what purpose you are investing your money, according to your necessities select your mutual funds.

According to my opinion Vanguard funds are the best funds to invest. Vanguard Total International Stock Index Fund is among the 25 largest mutual funds that exist with a $48.7 billion under management. If you are looking for an international exposure, then it has become a benchmark for this fund, it means it will invest in both large as well as small companies anywhere in the world. This is the perfect fund where you get a broad diversification, low cost and simplicity.

Well, not quite anywhere. Total Intl has no US exposure. I don't agree that it is a good ONLY fund, though I do agree it is an excellent long-term holding.

Where to go, what funds?