What do you think of Target retirement funds for beginners and hands-off investors?
- Thread starter JEDI
- Start date
I have a Target 2045 plan with Vanguard, with 90% tied up in stocks, the other 10% in bonds. I just started it this year, and have contributed $3800 thus far, and have made ~$240 in profit.
It's 100% index funds (including the bond index) so that's a big plus over actively managed stock-picker mutual funds.
They are all good Vanguard index funds.
It's also a lot easier to afford this one fund than meeting the minimums for each individual fund.
Sounds good, the only tweak I'd make is to reduce the amount of bonds in the mix by picking target 2045 instead of the target 2040 they recommend for her age.
They are all good Vanguard index funds.
It's also a lot easier to afford this one fund than meeting the minimums for each individual fund.
Sounds good, the only tweak I'd make is to reduce the amount of bonds in the mix by picking target 2045 instead of the target 2040 they recommend for her age.
I'm an aggressive investor, so take this with a grain of salt.
S&P has been flat the past few weeks. I've decided a long time ago that if I'm not beating the S&P, I'm doing something wrong. They're up MARGINALLY compared to January.
International is a good move if you can tolerate the risk. Personally, I'm liking Latin America more and more but NOT Venezuela. Brazil, Mexico, and others look like they'll be putting up strong development numbers soon.
The smallcaps and midcaps I've bought have a marginally higher expense ratio than a large growth fund because they turnover more.
Bonds/Fixed income/Cap preservation shouldnt even be looked at for anyone under 50. Its retarded. You're getting 5.5% a year in a bond fund, which is going to be eaten up by inflation.
Just as an FYI, I bought into a dozen funds on November 2nd and I'm already up over 6% AFTER comissions in less than a month. Some people here seem to be content with 6% over the course of a year.
THCGX Thornburg Core Growth Fund - Up 8.32%
JSVAX Janus Contrarian Fund -Up 4.24%
NMTAX Columbia Marsico 21ST Century - Up 5.80%
FREAX First American Real Estate - Up 8.94%
I think 12-15% a year for growth is not unreasonable, provided you have a risk tolerance above "Ninny"
THCGX Thornburg Core Growth Fund - Up 8.32%
JSVAX Janus Contrarian Fund -Up 4.24%
NMTAX Columbia Marsico 21ST Century - Up 5.80%
FREAX First American Real Estate - Up 8.94%
I think 12-15% a year for growth is not unreasonable, provided you have a risk tolerance above "Ninny"
I thought you let your broker pick funds for you, PAB? ( h8 my broker! )
The 2045 version of that Vanguard fund has a 1-year return of 10.7% for 9/05 - 9/06, which is quite good for a fund that's 10% bonds.
For a sister who wants to buy and hold one fund forever it seems like a good, safe choice.
If she is willing to be more agressive (0% in bonds) and has a good amount to invest (over $10K), another approach would be just getting the 2 vanguard "total" index funds (US and foreign).
The 2045 version of that Vanguard fund has a 1-year return of 10.7% for 9/05 - 9/06, which is quite good for a fund that's 10% bonds.
For a sister who wants to buy and hold one fund forever it seems like a good, safe choice.
If she is willing to be more agressive (0% in bonds) and has a good amount to invest (over $10K), another approach would be just getting the 2 vanguard "total" index funds (US and foreign).
I got pissed at him before I realized that the dividend yield that I qualified for matched the drop in NAV. Basically, they give you $1000 in free shares and chop the price so your total investment is valued the same.
Oops. I bought him a beer as a male version of kiss and make up.
Right, and tax-wise it's about the same either way since you were selling -- ($1K diividend + $9K sale) vs. ($0 + $10K sale).
Here's the funds list JEDI:
index funds list
(using 2 funds)
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
Vanguard Total International Stock Index Fund (VGTSX)
(using 3 funds)
Vanguard 500 Index Fund Investor Shares (VFINX)
Vanguard Extended Market Index Fund Investor Shares (VEXMX) -- rest of US
Vanguard Total International Stock Index Fund (VGTSX)
80/20 sounds like a good long-term goal, though depending on how much she has to put in to start it might balance out differently at first.
For example if she's just doing a Roth IRA she might put the full $6K for 2006 into VTSMX year 1, then year 2 put in $3K into each.
For example if she's just doing a Roth IRA she might put the full $6K for 2006 into VTSMX year 1, then year 2 put in $3K into each.
sounds like a good plan, although Roth IRA max for individuals age 49 and below in 2006 under 50 is 4K. It will be the same for 2007, and then increase to 5K for 2008. I currently own two full years of VTSMX, and I think in the 2007 tax year I will put the 3K into VGTSX and 1K into VTSMX.
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