I'm afraid to ask....

[MaryKay]

I'm afraid to ask advice from all you seasoned investors because I know NOTHING about investing I know this is going to sound stupid, but I'd like your opinions, please.

Knowing what I do about investments...which is zero!....and you had a small amount of $$$ (say $5,000)....where would you start?

I've had some suggestions in another post and I looked at them (on Vanguard), but it's like reading Chinese. So....the suggestions from other's have been:

VTINX
VSCGX
VASIX
VWINX

Are these good choices for a beginner, like me? Do you have better recommendations? When a choice (or 2) are made, do you keep adding money to them?

I can see all the eye-rolls now, but I've never learned how to do this and I'm 73 and just starting out, so be gentle....haha

Thanks

[kork13]

First off, I'll say that you should have more confidence in yourself! As a few of us have already said elsewhere, you're doing well, and you're in a very solid, stable position to invest and grow your money better than it currently is. Don't worry, everyone on these forums love to help -- it's why we're here! Feel free to ask any and all questions that you have. We all had to start out learning from ground zero at some point. The fact that you are willing and wanting to learn, even at 73 years old, is admirable.

Two of those fund suggestions are from me, so I'm slightly biased and have already given you my thoughts... but the only notes I'll add to the specific fund choice:
1) As a 100% beginner, I'd suggest sticking to a single, broad-based balanced fund that will meet your needs.
2) I'd argue that your "butter zone" fund should have between 30-40% stocks, 60-70% bonds. That'll give you the stability you want, but the growth that you need. As I mentioned elsewhere, VTINX & VSCGX are both in that range, and would do well for you.
3) VASIX is probably TOO conservative (20% stocks, 80% bonds) for a single-fund "portfolio", and wouldn't be able to give you much growth.
4) VWINX is a fantastic fund for someone in your position. Only note is that its costs ("expense ratio") is about double what the others have. However, .23% is still VERY reasonable, so I'd still say that this is also a very, very good option for you.

As for the second question, you definitely want to keep adding money to your mutual fund investments -- as much as you reasonably can, as often as possible. The more you put into the mutual fund, the more you'll be able to benefit from the growth and compounding interest that it'll earn.

[Singuy]

Those are good choices, but it's more important to understand your situation is. Some people have 5k of liquid money and if they invest it but there's no emergency fund. Looks like the investments people picked out for you can double your money after 13 years, not sure if that's something you are looking for or not.

If 5k is all you have, it's better to put that money into a high yield savings account at 1.8% interest rate when having very easy access to liquid cash can often saves people a ton of money in the long run.

[Jluke]

VTINX target income
30:70 stocks:bond
0.12% expense ratio
$1000 minimum to start

VSCGX life Strategy conservative growth
40:60 stocks:bonds
0.12% expense ratio
$3000 minimum to start

VASIX life Strategy income
20:80 stocks:bonds
0.11% Expense ratio
$3000 minimum to start

VWINX Wellesley (active management)
40:60 stocks:bonds
0.23% Expense Ratio
$3000 minimum to start

The life Strategy funds have international exposure.

if any of these funds are held in a taxable account there may be tax implications for long term gains, dividends etc.

I hold Wellesley VWINX in my Roth and 401k. Good fund. it’s worst year in history was 2008 (-9.8%). 40 positive years and only 6 negative years.

I would consider VWINX and just keep adding to it.

[MaryKay]

First off, I'll say that you should have more confidence in yourself! As a few of us have already said elsewhere, you're doing well, and you're in a very solid, stable position to invest and grow your money better than it currently is. Don't worry, everyone on these forums love to help -- it's why we're here! Feel free to ask any and all questions that you have. We all had to start out learning from ground zero at some point. The fact that you are willing and wanting to learn, even at 73 years old, is admirable.

Two of those fund suggestions are from me, so I'm slightly biased and have already given you my thoughts... but the only notes I'll add to the specific fund choice:
1) As a 100% beginner, I'd suggest sticking to a single, broad-based balanced fund that will meet your needs.
2) I'd argue that your "butter zone" fund should have between 30-40% stocks, 60-70% bonds. That'll give you the stability you want, but the growth that you need. As I mentioned elsewhere, VTINX & VSCGX are both in that range, and would do well for you.
3) VASIX is probably TOO conservative (20% stocks, 80% bonds) for a single-fund "portfolio", and wouldn't be able to give you much growth.
4) VWINX is a fantastic fund for someone in your position. Only note is that its costs ("expense ratio") is about double what the others have. However, .23% is still VERY reasonable, so I'd still say that this is also a very, very good option for you.

As for the second question, you definitely want to keep adding money to your mutual fund investments -- as much as you reasonably can, as often as possible. The more you put into the mutual fund, the more you'll be able to benefit from the growth and compounding interest that it'll earn.

Thank you so much for your suggestions I'm definitely leaning towards the VWINX fund. If I put the minimum of $3,000 in, would that be a good beginning? I would be able to add to it monthly with no problem.

[MaryKay]

Those are good choices, but it's more important to understand your situation is. Some people have 5k of liquid money and if they invest it but there's no emergency fund. Looks like the investments people picked out for you can double your money after 13 years, not sure if that's something you are looking for or not.

If 5k is all you have, it's better to put that money into a high yield savings account at 1.8% interest rate when having very easy access to liquid cash can often saves people a ton of money in the long run.

We already have a savings that earns 1.6% and contains everything we have. I'd only be taking a small amount out.

[Jluke]

Absolutely start with 3k in VWINX.

you might even be able to automate the monthly contribution and purchase.

two words of caution:
1. do not try to time the market.

2. do not focus on the +/- that is reported on the summary screen. Results may be skewed as you start re-investing dividends and capital gains because your cost basis keeps adjusting. Also you may want to turn off automatic reinvestment of dividends and capital gains. Then just have them deposited to your settlement fund and spend or reinvest as you need or desire.

[cypher1]

I consider myself fairly green when it comes to investing, but these links I used for learning when starting out. They may help give you a better understanding of what to look for, and navigating through funds.

While these articles are about Vanguard funds, the same concepts apply to other investment brokers.

This is a great introduction and breakdown for funds which I've referenced before:

https://mymoneywizard.com/how-to-choose-a-vanguard-index-fund/

Active vs passive funds for ETFs/MFs:

https://www.thebalance.com/actively-vs-passively-managed-funds-453773

While I recommend three fund portfolio for simplicity, but this is a good breakdown on portfolios:

https://www.wallstreetphysician.com/building-vanguard-three-fund-portfolio-simple-index-fund-portfolios/

If you want to learn more about for US stocks (small+mid+large caps vs Total Stock Market).

https://www.financial-planning.com/news/three-against-one-a-battle-of-index-funds

For simplicity, I chose to work mainly with passive index funds. Good luck!

[Petunia 100]

I'm afraid to ask advice from all you seasoned investors because I know NOTHING about investing I know this is going to sound stupid, but I'd like your opinions, please.

Knowing what I do about investments...which is zero!....and you had a small amount of $$$ (say $5,000)....where would you start?

I've had some suggestions in another post and I looked at them (on Vanguard), but it's like reading Chinese. So....the suggestions from other's have been:

VTINX
VSCGX
VASIX
VWINX

Are these good choices for a beginner, like me? Do you have better recommendations? When a choice (or 2) are made, do you keep adding money to them?

I can see all the eye-rolls now, but I've never learned how to do this and I'm 73 and just starting out, so be gentle....haha

Thanks

MaryKay, there are no stupid questions! No one was born knowing this stuff; everyone starts out scratching their heads and wondering what this strange new language means. Thankfully, it's not as confusing as it first seems.

Yes, any one of those 4 would be a great choice. They are all a bit different, but they all have a lot in common. They are all "balanced" funds with a significant amount of bonds as well as stocks. They are all very low-cost. Three of the four use index funds; the fourth is actively managed.

Yes, it makes sense to choose one and put all of your investment dollars into it. Remember, each of these funds owns many different stocks and bonds. So buying into any of these funds means you are diversifying into many different securities; you are not putting all of your money into only one thing, even though you own only 1 fund. That said, if you feel more comfortable choosing 2 of them, you can do that too.

[disneysteve]

Yes, it makes sense to choose one and put all of your investment dollars into it. Remember, each of these funds owns many different stocks and bonds. So buying into any of these funds means you are diversifying into many different securities; you are not putting all of your money into only one thing, even though you own only 1 fund. That said, if you feel more comfortable choosing 2 of them, you can do that too.

There's probably not much point or value in picking 2 of them as there would likely be a great deal of overlap in the holdings. I'd pick one of the 3 index funds.

[creditcardfree]

And just since you are new to investing, please be aware that the amount you invest, $5000 (the principal) will fluctuate over time up AND down. Over time it should be more up than down. As this is rather conservative it won't be dramatic, but it can happen. Just want to make sure you know BEFORE you invest. This is NOT the same as a savings account where the interest just adds to the principal. You appear wise, so I don't want to say you didn't know, but also don't want you to miss the basic difference either.

[greenskeeper]

vfiax

[rennigade]

I hold vtsax, and vwinx. I chose vwinx for more exposure to bonds. Ive been happy with it so far.

[bjl584]

I'm not sure if there really is such a thing as a beginner's investing fund.

There are good funds and there are bad ones.

People have their opinions on financial advisers, but someone in your situation with no knowledge or confidence to self direct your investments "could" potentially benefit from a sit down meeting with someone.
Stick to the major players like Fidelity or Vanguard.
I believe that Dave Ramsey has a network of managers that he recommends. Check out his website.

[LivingAlmostLarge]

NOOOOO DO NOT USE Dave Ramsey. I would do VTI and BND and throw in some international like Corn and keep it simple. You'll do fine. Super simple? 50% VTI, 40% BND, and 10% VXUS I am pretty similar to Corn. I keep it simple now because I don't want to pick stocks anymore.