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Author: joeyrizzolo One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76395  
Subject: Vanguard Index IRAs Date: 3/15/2001 2:02 AM
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Does anyone have any experience with the higher risk index funds? I have money in an S&P 500 index fund now, but I'm eyeing the others for retirement purposes (such as small-cap growth funds). My thought is that a higher risk investment might be the way to go for money that I'm not going to see for decades anyway (about four of them).

I currently have a Roth in my Credit Union (where I'm turning over a reliable annual 7.2%). Should I opt for an index IRA can I keep this one or am I required to roll in into the index?
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Author: jbking Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28439 of 76395
Subject: Re: Vanguard Index IRAs Date: 3/15/2001 2:12 AM
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Does anyone have any experience with the higher risk index funds?

http://quicktake.morningstar.com/Fund/TotalReturns.asp?Country=USA&Symbol=UOPIX illustrates one that I would view as ultra-mega-risky in that this index seeks to double the return of that sexy, fun index known as the Nasdaq 100. Look at that drop! Isn't that impressive or what?

http://quicktake.morningstar.com/Fund/TotalReturns.asp?Country=USA&Symbol=VEIEX is another contender since here we have that Emerging market area that looks oh so good since this is where there is rapid growth, right? Who cares about that currency and political risk, right?

http://quicktake.morningstar.com/Fund/TotalReturns.asp?Country=USA&Symbol=VPACX is just the Pacific if you want to count on Japan coming back since they are 78% of this fund currently(Remember they were set to take over in the 80s and then the Nikkei went onto a tumble but who knows what the future may hold...)

http://www.barra.com/research/summary_returns.asp and note the 5 year averages. Then there is http://www.tamasset.com/allocation.html.

http://quicktake.morningstar.com/Fund/TotalReturns.asp?Country=USA&Symbol=VIGRX is my kind of high risk index fund that had a great run from 1994-1999 and then 2000 hit and bang not so impressive now.

Should I opt for an index IRA can I keep this one or am I required to roll in into the index?

My advice is to get an Asset Allocation that works for you. If you need help on that look at http://boards.fool.com/Message.asp?mid=13403173 for a bunch of useful links.

Does that help?

JB

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28440 of 76395
Subject: Re: Vanguard Index IRAs Date: 3/15/2001 9:28 AM
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> UOPIX
Note that its "% rank in category" is 100, which means that this is the worst large growth fund anywhere. Wow.

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28441 of 76395
Subject: Re: Vanguard Index IRAs Date: 3/15/2001 9:32 AM
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If you're getting 7.2% guaranteed (what kind of an investment is this, anyway? and how can I invest in it?) it's hard to support giving that up. The stock market's long-term return is only 9-10%. And, given the news lately, things aren't looking so great for the stock market.

Questions to answer:
- How long is the 7.2% rate guaranteed for?
- Can you reach your goals with a 7.2% growth rate?

As to your questions...
Do you *need* to assume extra risk to reach your goals? If not, then why would you want to? "Because I can" is not a valid answer.

I used to think I wanted to take on extra risk. I said "I'm young, my money-earning years are ahead of me, let's put all the money in the riskiest thing since if it goes down I won't mind -- I'm years away from spending the money anyway." But what I really was thinking was "I'm buying a lottery ticket with no cost." It was greed, plain and simple.

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Author: EpiBio Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28443 of 76395
Subject: Re: Vanguard Index IRAs Date: 3/15/2001 11:16 AM
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In this market's climate, check out Vanguard's Balanced Index Fund. Index Funds are not for everyone, but having researched them before moving my IRA to Vanguard, I think they will work in the long run for me.

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Author: EpiBio Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28444 of 76395
Subject: Re: Vanguard Index IRAs Date: 3/15/2001 11:18 AM
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Yes, where are you getting this 7.5% return?
Please advise.

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Author: joeyrizzolo One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28461 of 76395
Subject: Re: Vanguard Index IRAs Date: 3/16/2001 3:06 AM
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Thanks for everybody's replies.

As to your burning inquiries regarding where I get this 7.2% return: The IRA is in a 60 month CD account at my credit union (Digital Credit Union). The current rates aren't quite as good, and I got a slight rate hike for having income on direct deposit.

Alas, the only way to become a member is either through your employer or through someone in the immediate family who is currently a member. Go to www.dcu.org to find out if your employer has an agreement with DCU that would enable you to be a member.

They're bank account rates and probably underperform the market in the long run, but they're the best damn bank rates I've ever seen.

Incidentally, all of your DCU banking can be done online. I've had the account for about twenty years and I've never actually set foot in the credit union! ;)

joey

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