No. of Recommendations: 6
Greetings Allen410,

My only experience was to put about 30K into their indexed 500 account about 3 yrs ago. If my math is correct, my increase in value as of today is about $65--or less than 1%. Please help me understand if that is correct and, if so, what is so great about it.

The 3 year annualized return is about .2% for the past 3 years so your Math is right. Now, did you know that 55% of mutual funds in the same category as VFINX did worse than that? VFINX is also only .01% off of the index each year for that time period while expenses should dictate it to be .18% off so the manager has done some great work there I think. Also, I'd note that 3 years is a fairly short period of time in terms of stock investing as TMF seems to suggest at least a 5 year period of investing while I prefer at least 10 years myself and on those time periods VFINX has bested 80% of its peers. If you take a look at Vanguard's Investment Planner and look at stock market returns over 5 year periods you should see this fairly broad range from -12.4% to +28.6% from years 1926-2000 which should mean that in the short run yes stocks can do poorly which is why most advocate using bonds if you have a short time horizon(See page 9 of http://personal.vanguard.com/pdf/bvip-pl.pdf for other lengths of time analyzed).

JB
(A VFINX shareholder)
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement