Hello Fools, Well, I've read John Bogle's "Common Sense On Mutual Funds", "The Four Pillars Of Investing", "Mutual Funds For Dummies", and a have just started a Morningstar book on selecting mutual funds. I don't intend to purchase individual stocks, and am guessing I would not do too badly in an Index Fund, based on the Wilshire 5000 or S&P 500. I have about $35K in existing bank CDs/IRAs, and have been redeeming the CDs as they have come due, and stashing them temporarily in a Money Market Account. I am not sure what the transfer of my exisitng IRA accounts to Vanguard would entail, but I will invest the $$ stashed temporarily first. Can I get some recommendations on how to spread the $35K around at Vanguard? I am open to suggestions pertaining to placing a portion of the $35K into Vanguard funds that carry more inherent risk than the Index type funds. I also have a more general question-- I also purchased several books on how to select individual stocks, but have yet to read them. I do not plan to actively trade stocks, so what is the Foolish consensus as to whether reading these books would significantly assist in the selection of Vanguard funds? I did not particularly enjoy reading the aforementioned books, in fact I found them a bit tedious. I just want to know enough to make reasonably informed decisions. Thanks In Advance, Aidendey
I am open to suggestions pertaining to placing a portion of the $35K into Vanguard funds that carry more inherent risk than the Index type funds.There is a wide variety of index funds - with varying amounts of risk. If you're looking for more risk than an S&P500 fund, you could also put some in a small cap index, foreign index, emerging market index, reit index, etc. (I think Vanguard has all of these)For any asset class & risk tolerance you're looking for, you can find an index fund to suit. This is what I have done with most of mine.-Joe
For a starter portfolio, I would use the Vanguard Total Market Inded Fund (VTSMX), which emulates the Wilshire 5000. Still dominated by the S&P500. I also like the Vanguard Extended Market Index Fund (VEXMX) which is VTSMX less the S&P500. Pick one, depending on how much volatility you are comfortable with. (VEXMX is more volatile.)When you build up to $100,000, consider adding the Vanguard REIT Index fund (VGSIX) as a diversification ploy.That should be all the funds you will ever need.cliff... I assume you are relatively young, and I wouldn't use any bond fund whatsoever until you are older, if ever.
I would suggest you read a couple of books, The Lazy Person's Guide to Investing by Paul Farrell and Coffeehouse Investor by Bill Schultheis. These books will give you some examples of simple, indexed portfolios.You might also give some consideration to Vanguards Life Strategy or Target Retirement funds with appropriate asset allocations. These are funds of funds which provide a well diversified portfolio within a single fund.Bob
I've had retirement accounts with Vanguard for more than 15 years and generally felt they were a good company. As a new investor to Vanguard, however, you should be aware of changes in the company since John Bogle was pushed out. The most recent change has been to their corporate bond funds - they don't have any anymore. These funds are being hybridized with the restriction to invest 80% in corporate bonds being dropped. Investors will not know what the mix is but it could include large percentages of GNMA and treasuries. This change was made without a shareholder vote and has upset many investors who specifically wanted a way to own a diversified portfolio of corporate bonds. Probably not important to your current investment strategy but I believe it typifies growing problems with Vanguard. OTOH they are still a great place to find very low cost mutual funds, especially index funds.
To Cliff666, and all others who replied. Thank you for investing some of your time in my cause. The books were of course a great help, but the advice I have received from kindly Fools has also been a great source of guidance. I suspect I will be posting again after I contact Vanguard, for any suggestions before the money actually changes hands. Aiden
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