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I recommend the Vanguard Wellington mutual fund. It invests in a mix of stocks (65%--the aggressive part of your portfolio) and bonds (35%--the conservative part). It can, and has, lost money in some years (as any investment will), but it has solid long term returns. It hold up better than the stock market as a whole when there's a major downturn. It's also one of the cheapest actively managed balanced mutual funds out there, charging .26%. This is a fund you can buy and hold for decades.
Besides stocks what else am I allowed use it for. Like can I use it for peer to peer lending and any interest will go back into the IRA? What about I purchase a parking spot and then rent it out, will the rent I collect be able to go back into the IRA?
I'm not sure how old you are, but your under 40 I would go with Vanguard VTI or something similar. It is a very low expense fund that invests in thousands of companies so you get diversification.
I'm not sure how old you are, but your under 40 I would go with Vanguard VTI or something similar. It is a very low expense fund that invests in thousands of companies so you get diversification.
100% stock allocation is too aggressive and not truly diversified (no bonds = not diversified) Most people, regardless of age, bail out of stock funds when they drop by 20% or more.
VWELX is more conservative, which helps people to stick with it for the long run, and it's long term returns are close to, and sometimes exceed the returns of VTI, depending on the time period.
100% stock allocation is too aggressive and not truly diversified (no bonds = not diversified) Most people, regardless of age, bail out of stock funds when they drop by 20% or more.
VWELX is more conservative, which helps people to stick with it for the long run, and it's long term returns are close to, and sometimes exceed the returns of VTI, depending on the time period.
At a younger age and with thousands of stocks I wouldn't consider VTI aggressive. Plus, with an IRA you can only put I believe $6,000 a year in, so it shouldn't be your only investment choice.
At a younger age and with thousands of stocks I wouldn't consider VTI aggressive. Plus, with an IRA you can only put I believe $6,000 a year in, so it shouldn't be your only investment choice.
Age is not the only important factor. I would argue emotions are more important. Most people can't handle the volatility of being 100% stocks, regardless of age. If you can come close to matching the returns of the stock market with less risk/volatility, then it's worth it, because you're more likely to actually stick with such a fund.
VWELX has beaten the S&P 500 stock index for the last 10, 15 & 20 year time periods. It may not do quite as well vs. the S&P 500 going forward, because of the low interest rates on bonds. But, then again, the bear market ended 6.5 years ago. At some point, we're due for another one. I'm betting VWELX will come pretty close to the S&P over the next decade with a better "sleep at night" factor.
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