Mutual Funds

A Simple Investment Portfolio

/ bacigirl / Leave a comment

When it comes to investing you want to be diversified, consistent, and be in it for the long run.  There are so many opinions of the best way to invest.  It really comes down to your interest level and level of knowledge in investing.  I think the key is simplicity.

For most people they do not have the time or knowledge to invest properly.  One of the best investment companies is Vanguard.  Vanguard provides very low cost Mutual Funds and ETFs.  They never got into the Mortgage mess and are consistently rated very highly by clients.   The key though is the low cost which allows you to keep more of your  own money.

Here is my Simple Portfolio of only 4 Mutual Funds–I would invest 25% in each.  However, what is generally recommended is to invest your age in bonds.  So if you are 40 years old you would invest 40% in bonds and then 20% in the remaining 3 funds.

1) Vanguard Dividend Growth Fund: this fund invests in Large Cap companies that pay a Dividend.

2) Vanguard Small-Cap Index Fund:  this fund invests in Small Cap stocks that tend to have more risk but better growth.

3) Vanguard Total International Stock Index Fund: this fund gives you International Stock exposure.

4) Vanguard Total Bond Market Index Fund: this fund gives you exposure to the stability of bonds.  It is a mix of all types of bonds and pays a monthly dividend.

Disclaimer: Material presented on Bacigirl.com is for informational and entertainment purposes only and is the opinion of the author and should NOT be relied on or taken as investing advice. The information and content should not be construed as a recommendation to invest or trade in any type of security. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Before acting on anything you read on this site, you must do your own research and you must come to your own conclusion which you will ultimately be responsible for, including any loss you may incur.

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Opening a Vanguard Account

/ bacigirl / 4 Comments

I just opened a new Vanguard Account.  The process took about 10 minutes and was very easy.  The only thing to be aware of is that a new account requires a minimum of $3,000. for each fund that is opened.  The great thing about Vanguard is the account expense fees are very low.  Most of the mutual funds at Vanguard have an expense fee of around 0.20%.  Mutual funds generally have fees in the 1% range.  So the savings are substantial.

I decided to open the Vanguard account in order to diversify my portfolio and reduce risk just in case another major financial institution goes broke.  I currently have an E-Trade account that is used to purchase stocks that focus on dividend yield.  I also have a Merrill Lynch Account that is professionally managed.

I will post my mutual fund strategy in the next blog.

Money 70: The best mutual funds you can buy

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Money 70: The best mutual funds you can buy

Your safest investments now
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Money Magazine’s list of recommended funds is not about aiming for the highest short-term returns. Our lineup is designed to let you build a well-balanced portfolio that will help you reach your most important financial goals, like putting your kids through college, starting a business or achieving a comfortable retirement.

We focus on criteria that have real predictive value: low expenses, a strong record for putting share-holder interests first, a consistent investment strategy and experienced managers.

A fund that meets our standards typically ends up delivering above-average returns – over the past five years, 73 percent of the actively managed funds on our roster outperformed their category average. Even in 2007’s difficult market, 57 percent delivered returns that rank in the top half of their category.

The Money 70 is designed to help you construct all aspects of your portfolio. It includes a range of actively managed stock and bond funds, as well as low-cost index and exchange-traded funds. Or you can put your investments on cruise control with one of our target-date retirement portfolios, which give you a preset mix of funds that automatically becomes more conservative as you near retirement.

See more on how we picked the funds and what changes we’ve made since last year.

Ticker Fund name 1-yr
return		 3-yr
return		 5-yr
return		 Exp.
ratio		 Min.
inv.		 Style
LARGE-CAP
FSMKX Fidelity Spartan 500 Index Investor -6.8% 7.5% 9.7% 0.1% $10,000 Blend
FSTMX Fidelity Spartan Total Market Index Inv -6.3% 8.3% 10.8% 0.1% $10,000 Blend
VFINX Vanguard 500 Index -6.8% 7.4% 9.6% 0.1% $3,000 Blend
VTSMX Vanguard Total Stock Mkt Idx -6.3% 8.2% 10.7% 0.1% $3,000 Blend
MIDCAP
VIMSX Vanguard Mid Capitalization Index -6.5% 10.6% 14.9% 0.2% $3,000 Blend
SMALL-CAP
NAESX Vanguard Small Cap Index -8.2% 9.1% 14.1% 0.2% $3,000 Blend
SPECIALTY
VGSIX Vanguard REIT Index -12.4% 10.5% 16.9% 0.2% $3,000 Real estate
FOREIGN
FSIIX Fidelity Spartan International Index Inv -2.3% 16.9% 19.1% 0.1% $10,000 Blend
VEIEX Vanguard Emerging Mkts Stock Idx 21.3% 31.9% 33.6% 0.4% $3,000 Emerging markets
VGTSX Vanguard Total Intl Stock Index 1.6% 19.1% 21.2% 0.0% $3,000 Blend
BOND
VBISX Vanguard Short-Term Bond Index 7.1% 4.5% 3.2% 0.2% $3,000 Bonds
VBMFX Vanguard Total Bond Market Index 6.4% 4.1% 3.7% 0.2% $3,000 Bonds
Data as of: May 30, 2008