UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev Thread | Next Thread
Author: t0bes Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Vanguard choices Date: 6/27/2011 10:36 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
My wife just inherited some money from her mother and I have the responsibility of finding a good home for it. It's not a large amount of money but I'll be in trouble if I screw up and lose it all!

I thought I could choose say half a dozen Vanguard ETFs and then I'd be reasonably safe and still get some growth.

She likes the idea of being able to withdraw some occasionally to pay for things like a family vacation.

Does that sound sensible? At least if it all goes horribly wrong I'll feel better knowing I asked...

Thanks
Print the post Back To Top
Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69199 of 76418
Subject: Re: Vanguard choices Date: 6/27/2011 11:24 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
How large is a "not large amount"? How far from "losing is all" could you (she) accept?
Vanguard mutual funds have a minumum initial inveatment of $3000. Half a dozen funds would be $18,000.

Losses of 30%-50% are not unusual. (We just went through a decline like that in 2008.) Is that too big of a risk?

When this type of thing happened with my wife, I resolved it by putting half of her windfall into savings accounts at Alliant CU and Discover Bank, earning 1.3%-1.5%. Not a great dividend, but enough to let her buy whatever she wanted to without risking a loss in that portion.

The rest, I invested as usual.

Print the post Back To Top
Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69200 of 76418
Subject: Re: Vanguard choices Date: 6/27/2011 11:30 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
How large is a "not large amount"? How far from "losing is all" could you (she) accept?
Vanguard mutual funds have a minumum initial inveatment of $3000. Half a dozen funds would be $18,000.


advantage of ETFs, no?
no minimum /low (possible zero) commissions from Vanguard
(low fees)




Losses of 30%-50% are not unusual. (We just went through a decline like that in 2008.) Is that too big of a risk?


good point..

( i'd go with something like your plan, a portion in something Safe, the rest in 2 or 4 ETFs

Print the post Back To Top
Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69201 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 6:21 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Losses of 30%-50% are not unusual. (We just went through a decline like that in 2008.) Is that too big of a risk?

Fortunately losses of that size are not usual. Otherwise no one would be investing in the stock market. 2008 was a near collapse of US and world financial markets. The last one began in 1929. In such events neither stocks nor bonds are safe, although investors who kept their cool and didn't sell at the bottom have recovered much of their losses.

But the advice to diverisfy and to keep some reserves in liquid assets like CDs and bank accounts is good. 20% corrections are common and you should be prepared to ride them out without having to sell at the lows.

Print the post Back To Top
Author: t0bes Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69202 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 8:40 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thanks for the comments. The amount is around $50K. We're currently in our 40s so we have some time for investments to recover from a few wobbles.

Print the post Back To Top
Author: Ringfinger Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69203 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 9:18 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I hope you find a suitable solution.

Print the post Back To Top
Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69204 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 9:37 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 10
My advice will be different. If you are in your 40s, encourage your wife to learn about investing. Statistically, she is likely to eventually be on her own and it can be difficult enough without ignorance. It's 2011 - not 1950.

My risk assessment goes like this. If tomorrow, either of you checked the balance and it was down 20%, would you both be fine ? If you are honest, you have your assessment and if the answer if no, put it somewhere with almost not risk until the answer is yes and she has the knowledge to manage it herself.

Print the post Back To Top
Author: op456op Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69205 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 2:17 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
Have you been to the Vanguard site yet? They have a section on getting a recommendation based on your input to some questions for establishing your risk profile. You can find it here:

https://personal.vanguard.com/us/funds/etf

After you answer the questions they come back with a recommendation of what Vanguard ETF would be appropriate.

More than likely you'll get a recommendation of (3) ETF's: (click <Get A Recommendation>).

Total Stock market: VTI
Total International: VXUS (no US stocks)
Total Bond Market: BND

The %age to invest in each will depend on your answers.

I agree you should put some in a CD or similar investment. Maybe $20K in a CD ladder. CD's of 1, 2, 3, 4 & 5 year duration with $4k each.

Invest the rest.

Disclosure: I have a Rollover IRA @ Vanguard and am very pleased with them.

Print the post Back To Top
Author: mkt Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69206 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 3:20 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
I suggest you visit the Bogleheads.org site and post your question there. The site is named after John Bogle who is the founder of Vanguard. They run a very knowledgeable and welcoming site.

Look around the site first and familiarize yourself with what is available.

http://www.bogleheads.org/

MKT

Print the post Back To Top
Author: t0bes Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69209 of 76418
Subject: Re: Vanguard choices Date: 6/28/2011 9:36 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thanks again everyone. Boggleheads looks interesting, I'd never seen that before.

Good luck all!

Print the post Back To Top
Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69220 of 76418
Subject: Re: Vanguard choices Date: 6/30/2011 1:40 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I thought I could choose say half a dozen Vanguard ETFs and then I'd be reasonably safe and still get some growth.

This doesn't sound like a well thought out plan, ;-) but is a start.
The suggestion of checking out the Bogleheads is good. You will find many helpful folks there.
I suggest that you do some self education by reading some basic investing books specifically dealing with asset allocation.
I think you could come up with a pretty good using the ETFs for total stock market, total international stock market, and the total bond market or their mutual fund equivalents. It would be better to put bonds into a tax deferred or tax free account for tax efficiency. You might also want a portion in a money market account to be used for the "mad money" that you described.

Bob

Print the post Back To Top
Author: t0bes Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 69221 of 76418
Subject: Re: Vanguard choices Date: 7/2/2011 9:28 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thank you Bob

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev Thread | Next Thread
Advertisement