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Message
Best vanguard fund
Posted on 4/23/13 at 11:06 pm
Posted on 4/23/13 at 11:06 pm
I am 33 married with 2 four year olds. I started maxing out Roth IRA 3 years ago and do it every month now. I have almost $20k each for my wife and I. I am long term big time. What suggestion would you give me for allocation of funds?
9
Posted on 4/23/13 at 11:43 pm to dallaslsufan
I would guess the Bogleheads would probably say...
VTSMX - Total US
VGTSX - Total International
VBMFX - Total Bond
...If you're goal is to keep your portfolio super simple and to use funds over ETFs
At 33, I am guessing they would put the allocation something like: (I'm spitballing here)
60% US
30% International
10% Bond (may be high)
It really depends on your risk profile, if you trust yourself with ETFs which can mirror funds with less expense, etc.
VTSMX - Total US
VGTSX - Total International
VBMFX - Total Bond
...If you're goal is to keep your portfolio super simple and to use funds over ETFs
At 33, I am guessing they would put the allocation something like: (I'm spitballing here)
60% US
30% International
10% Bond (may be high)
It really depends on your risk profile, if you trust yourself with ETFs which can mirror funds with less expense, etc.
This post was edited on 4/23/13 at 11:47 pm
Posted on 4/23/13 at 11:57 pm to dallaslsufan
I have held Health Care (VGHAX) and S&P 500 (VFIAX) since 1997. Health care is up 400% and S&P up 60%. Both are 4-stars
Last year, I added these 5-stars: VDAIX, VDIGX and VEIPX
To compare all 5 side by side, go to WSJ.com and MarketWatch (top of page). Put in one of these funds in search box. Then, scroll to middle and put all 5 funds in Fund Comparison box and see the returns, fees and holdings. I look at msnmoney to view the Morningstar risk/return.
At your age, go aggressive. I would purchase 3 funds.
Last year, I added these 5-stars: VDAIX, VDIGX and VEIPX
To compare all 5 side by side, go to WSJ.com and MarketWatch (top of page). Put in one of these funds in search box. Then, scroll to middle and put all 5 funds in Fund Comparison box and see the returns, fees and holdings. I look at msnmoney to view the Morningstar risk/return.
At your age, go aggressive. I would purchase 3 funds.
Posted on 4/24/13 at 12:25 am to dallaslsufan
I'm curious as well. I currently have my 401K in Vanguard Life Strategy Growth(VASGX). Curious as to what the board has to say.
Age-31
4 kids
Put 26%(including employer's match. I'm fully vested) of each check in 401K
Age-31
4 kids
Put 26%(including employer's match. I'm fully vested) of each check in 401K
This post was edited on 4/24/13 at 12:30 am
Posted on 4/24/13 at 1:04 am to ZZTIGERS
You are in a blended fund, 80% stock and 20% bonds in this particular fund.
At your young age, go aggressive on 100% stocks. You do have 4 kids, so in 5-6 years you may want to look into blended funds. Look at Vanguard's Wellington and Wellesley funds.
26% in income going to retirement is OT baller status. Congrats.
At your young age, go aggressive on 100% stocks. You do have 4 kids, so in 5-6 years you may want to look into blended funds. Look at Vanguard's Wellington and Wellesley funds.
26% in income going to retirement is OT baller status. Congrats.
Posted on 4/24/13 at 1:17 am to matthew25
quote:I've always been conservative in regards to money, but most people, yourself included, said I should definitely be more aggressive towards my retirement at my age.
At your young age, go aggressive on 100% stocks. You do have 4 kids, so in 5-6 years you may want to look into blended funds. Look at Vanguard's Wellington and Wellesley funds.
quote:
26% in income going to retirement is OT baller status. Congrats.
We'll, to be fair, I'm only contributing 17%, my company puts the other 9%, but I am fully vested. I'm continually amazed at how many people where I work don't take advantage of the $ for $ 9% match my company gives. I also recently opened a Roth IRA through TD Ameritrade. As of right now, I plan to contribute around $2000/ year, but will increase that amount each year.
My very optimistic goal is to retire at 52(about 20 years), but I'd be happy with 55
. Although, with 4 kids, I fully expect to be working into my 60s 
Posted on 4/24/13 at 1:32 am to dallaslsufan
FWIW, in my Roth I use a STAR fund as my non liquid portion of my emergency fund (Funded by income earned over the marginal tax rate that I no longer feels advantageous to forego the immediate tax break.)
My "real" retirement portion of the Roth I am half and half wirh contributions in a Wellington and Target Date Retirement fund.
For a taxable account that is in excess of retirement net worth, for long term "maybes," I would do the S&P 500 index fund (either mutual or etf).
Not a huge fan of "total" funds.
Be very careful as to which funds you use in a taxable account. You typically will want to stick exclusively to index funds or purchase stock directly. Purchasing actively managed funds in a taxable account opens you up to getting eaten alive by short term capital gains taxes as the fund manager is constantly buying and selling.
If you want to really dig in and do your homework, the stat you are interested in is called turnover rate.
My "real" retirement portion of the Roth I am half and half wirh contributions in a Wellington and Target Date Retirement fund.
For a taxable account that is in excess of retirement net worth, for long term "maybes," I would do the S&P 500 index fund (either mutual or etf).
Not a huge fan of "total" funds.
Be very careful as to which funds you use in a taxable account. You typically will want to stick exclusively to index funds or purchase stock directly. Purchasing actively managed funds in a taxable account opens you up to getting eaten alive by short term capital gains taxes as the fund manager is constantly buying and selling.
If you want to really dig in and do your homework, the stat you are interested in is called turnover rate.
This post was edited on 4/24/13 at 1:35 am
Posted on 4/24/13 at 5:36 am to dallaslsufan
Dallas and ZZ, congrats on developing the long term investing attitude and going with Vanguard. You're already way ahead of the curve.
I agree with previous posters on going with aggressive stock funds. Being in your early 30's, you have lots of time to weather the market gyration over the next 20 years. Just stay invested and never panic.
Specifically, look at small cap value funds such as VBR (the ETF) or VISVX (the mutual fund). Link
Much has been written about the value premium and lower equity exposure risk with these investments in your portfolio. Link
Finally, as you must always do the homework, make it easy on yourself by reading sites like Bogleheads. Linkand Link. All your questions answered by objective plain talk from the experts.
I agree with previous posters on going with aggressive stock funds. Being in your early 30's, you have lots of time to weather the market gyration over the next 20 years. Just stay invested and never panic.
Specifically, look at small cap value funds such as VBR (the ETF) or VISVX (the mutual fund). Link
Much has been written about the value premium and lower equity exposure risk with these investments in your portfolio. Link
Finally, as you must always do the homework, make it easy on yourself by reading sites like Bogleheads. Linkand Link. All your questions answered by objective plain talk from the experts.
Posted on 4/24/13 at 6:56 am to Coeur du Tigre
I have everything in Vanguard 500 index fund until I get a plan.
Posted on 4/24/13 at 7:49 am to dallaslsufan
Glad this thread came up. I'm in VDAIX, but need something to start my wife's IRA.
I still do not have a full-time job and plan on maxing out when I do get a job. It will be hard to do since my wife's idea of what we should save is different than mine.
Right now I'm only putting $200 a month in my Roth.
Also, for college, I'm planning on socking away $200 a month. I know, it will not pay for all my kids school (who is still in the belly right now) but will hopefully pay for at least half.
I still do not have a full-time job and plan on maxing out when I do get a job. It will be hard to do since my wife's idea of what we should save is different than mine.
Right now I'm only putting $200 a month in my Roth.
Also, for college, I'm planning on socking away $200 a month. I know, it will not pay for all my kids school (who is still in the belly right now) but will hopefully pay for at least half.
Posted on 4/24/13 at 7:54 am to dallaslsufan
60% Total Stock Index
40% Total International Stock Index
Leave the active funds, stock picking and market timing to the MT Baller experts.
40% Total International Stock Index
Leave the active funds, stock picking and market timing to the MT Baller experts.
Posted on 4/24/13 at 9:06 am to dallaslsufan
Dallas, that Vanguard S&P 500 is the best choice for you until you put together your asset allocation (which funds and how much in each). And as Springfield said, use low cost index funds whenever possible.
Stick with Bogleheads (and TD's Money Talk, of course...) as your go-to sources. Then for learning about asset allocation, add some sites for future projections of different portfolios. But be forewarned, these sites are addictive... This is the fun part.
Retirement Portfolio Planner App
Portfolio Risk Reduction App
Great Backtest Excel Tool. Click on Spreadsheet - NSFW (no sex, you'll just play with it forever).
Stick with Bogleheads (and TD's Money Talk, of course...) as your go-to sources. Then for learning about asset allocation, add some sites for future projections of different portfolios. But be forewarned, these sites are addictive... This is the fun part.
Retirement Portfolio Planner App
Portfolio Risk Reduction App
Great Backtest Excel Tool. Click on Spreadsheet - NSFW (no sex, you'll just play with it forever).
Posted on 4/24/13 at 9:21 am to ZZTIGERS
quote:
We'll, to be fair, I'm only contributing 17%, my company puts the other 9%, but I am fully vested. I'm continually amazed at how many people where I work don't take advantage of the $ for $ 9% match my company gives. I also recently opened a Roth IRA through TD Ameritrade. As of right now, I plan to contribute around $2000/ year, but will increase that amount each year.
If some of that 17% isn't being matched, I'd try to fund the Roth IRA to the max. Remember that your wife can max hers as well.
Posted on 4/24/13 at 9:45 am to dallaslsufan
You should've watched Frontline last night...the founder of Vanguard was on, he said Index Funds are the only thing that make any sense....the main concern is the fees...here's a link to the program:
The Retirement Gamble
The Retirement Gamble
Posted on 4/24/13 at 10:00 am to dallaslsufan
For balanced income, I have been impressed with VWINX.
This post was edited on 4/24/13 at 10:01 am
Posted on 4/24/13 at 10:09 am to dewster
quote:
I have been impressed with VWINX
True, but all they want is 100% equity or index. I own VWINX and don't plan on selling it for a while.
Posted on 4/24/13 at 10:13 am to ZZTIGERS
quote:
I'm continually amazed at how many people where I work don't take advantage of the $ for $ 9% match my company gives.
Same here. My company matches up to 8%. I'm always shocked at how many folks say that they don't contribute the full 8%. I put in the full 8%, then max out my Roth with a low cost Vanguard S&P indexed fund, and two balanced fund (one of them being VWINX).
People who don't contribute to matching 401Ks are leaving money on the table. No fund will have that kind of return. As tight as money can be some times, I always try to make sure I at least get all of my match. It's imperative for people my age.
This post was edited on 4/24/13 at 10:19 am
Posted on 4/24/13 at 10:50 am to cwill
quote:
The Retirement Gamble
Yeah this scared the crap out of me. I started looking at everything. I'm with an "advisor" too, which makes me more worried.
This post was edited on 4/24/13 at 10:51 am
Posted on 4/24/13 at 3:09 pm to meeple
quote:
I'm with an "advisor" too, which makes me more worried.
IMV, advisors know a lot of financial terms/lingo, but when it comes down to it they're just monkeys throwing darts at the big board. Indexing appears smarter and more cost effective.
Posted on 4/24/13 at 6:37 pm to cwill
quote:
IMV, advisors know a lot of financial terms/lingo, but when it comes down to it they're just monkeys throwing darts at the big board. Indexing appears smarter and more cost effective.
"Indexing" to the S&P 500, for instance, is just a broad version of stock picking IMO. Not saying its goo or bad, but S&P has its own weighting methodology for tracking the 500 leading publicly traded US companies. It has become a bellwether for the US stock market and a benchmark for most equity funds, but in theory it is no different than any mutual fund that trades based on an algorithm.
Index funds are only as good as the underlying index methodology. There are plenty of actively-managed funds that have beaten index mutual funds and index ETFs. JMUEX, since 1996 (as far back as Yahoo had historical prices), has annualized returns of 7.19% with dividends reinvested. SPY and VFINX have 7.13 and 7.15% respectively. That is with all fees included. Additionally, JMUEX has 9.09% annualized returns over the last 10 years compared to 7.74 and 7.70 for SPY and VFINX respectively.
Just do your research.
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