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Old 12-28-2018, 11:37 AM
 
474 posts, read 654,196 times
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So, I just rolled over my retirement fund from my previous employer.

It is currently parked in a Vanguard money market account within a Traditional IRA.

The plan is to purchase Vanguard mutual funds within my Traditional IRA.

Do you have any suggestions on which Vanguard funds I should invest in?

I am currently 40 years old so i have some time till retirement.

Thank You.
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Old 12-28-2018, 12:18 PM
 
8,673 posts, read 5,053,920 times
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Vanguard has many fine funds. Do you have an Asset Allocation Plan? If no, start with that. How much (percentage-wise) do you want in stocks, bonds, cash. Of your stocks, US only or also foreign? Large/mid/small caps? Index or active management?
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Old 12-28-2018, 12:24 PM
 
Location: The Berk in Denver, CO USA
13,941 posts, read 20,184,988 times
Reputation: 22559
Age = 40.
100% in VFIAX
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Old 12-28-2018, 12:31 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,379 posts, read 39,695,573 times
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Head over to Bogleheads.org for seasoned Vanguard advice.

Be careful about camping too long in Cash / MMA.

If it was in the market... you will want to be back in (within your Allocations) ASAP
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Old 12-28-2018, 03:52 PM
 
Location: Florida
4,305 posts, read 3,641,951 times
Reputation: 4000
Quote:
Originally Posted by H'ton View Post
So, I just rolled over my retirement fund from my previous employer.

It is currently parked in a Vanguard money market account within a Traditional IRA.

The plan is to purchase Vanguard mutual funds within my Traditional IRA.

Do you have any suggestions on which Vanguard funds I should invest in?

I am currently 40 years old so i have some time till retirement.

Thank You.
Seems that you have a good time to buy with everything on sale.
You can look at morning star for their evaluation of the funds.

I would avoid bonds at your age , with a long term investment goal, and interest rates increasing.

I would go to ETF since you can pick your buying and selling prices unlike a mutual fund. (But probably not a big deal)

Go for equity funds. Vanguard has educational material etc so look at that but skip the bonds.

If you really can not make up your mind then pick a Target fund and they will manage it
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Old 12-28-2018, 08:01 PM
 
133 posts, read 230,109 times
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Quote:
Originally Posted by davebarnes View Post
Age = 40.
100% in VFIAX
What are the pros/cons of this vs one of their Target Funds?
Iím on the brink of 50 and have been a very passive investor, utilizing their 2040 Target Fund...not sure if I should be looking at making a change to improve.
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Old 12-28-2018, 08:25 PM
 
Location: Florida
4,305 posts, read 3,641,951 times
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Quote:
Originally Posted by soccerphysio View Post
What are the pros/cons of this vs one of their Target Funds?
Iím on the brink of 50 and have been a very passive investor, utilizing their 2040 Target Fund...not sure if I should be looking at making a change to improve.
The Target fund is for someone that wants to be passive. If your returns are a little lower than you want you can move up 10 or 20 years. That should reduce your fixed income allocation.

If you want to be more active then I would look into index funds that track large caps, small caps, market sectors etc.
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Old 12-29-2018, 09:22 AM
 
8,673 posts, read 5,053,920 times
Reputation: 9758
Quote:
Originally Posted by soccerphysio View Post
What are the pros/cons of this vs one of their Target Funds?
Iím on the brink of 50 and have been a very passive investor, utilizing their 2040 Target Fund...not sure if I should be looking at making a change to improve.
The pro is that if US stocks outperform, you will do better being invested100% in US stocks than you will by diversifying into other asset classes.

The con is that if US stocks do not outperform, you will do worse being invested 100% in US stocks than you will by diversifying into other asset classes.

No one knows if US stocks will outperform or not. Anyone who tells you otherwise is lying, mistaken, or selling something.
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Old 12-30-2018, 06:38 AM
 
25,953 posts, read 28,349,794 times
Reputation: 24602
Quote:
Originally Posted by H'ton View Post
So, I just rolled over my retirement fund from my previous employer.

It is currently parked in a Vanguard money market account within a Traditional IRA.

The plan is to purchase Vanguard mutual funds within my Traditional IRA.

Do you have any suggestions on which Vanguard funds I should invest in?

I am currently 40 years old so i have some time till retirement.

Thank You.
Not trying to attack, but I am starting to cringe when I see posts like yours because the info provided is way too vague.

What usually happens with posts like yours is you'll end up more confused than you started with because everyone will fill in with a fund that they like, which may or may not be appropriate for you.

The other problem is there is probably more than one appropriate option for you. Options are good, to a point, but when there are a lot of good options, people tend to freeze and leave all their money in something like a money market account, which is NOT a good choice for the long term.

With all that said, I'm a mutual fund junkie and can't resist giving advice. I'll offer two that I think are good options, with the understanding that these wouldn't necessarily be the only good options.

1. Vanguard Wellington. One of my all time favorite funds. It's been around since 1929. It has low expenses and great long term returns. Even though it's a balanced fund (usually about 65% to 70% stocks with the rest in bonds/cash), it has beaten the returns of of the S&P 500 Stock Index over the last 20 years--and it has done so with less volatility than the overall stock market. It's very tough for most stock funds to beat the index, let alone funds that contain a slug of bonds, which generally return less than stocks over long periods of time. The S&P 500 Stock Index returned about 6.46% over the last 20 years. Wellington returned 7.42%.

Vanguard Institutional Index Instl Pl (VIIIX) MUTUAL FUND RESEARCH

Vanguard Wellington? Inv (VWELX) MUTUAL FUND RESEARCH

2. If, as some people suggest, you go with a fund that's 100% stocks, I would recommend Vanguard Dividend Appreciation Index. It's available in mutual fund and ETF format. Dividend oriented funds tend to get the same or better returns over long periods of time as the overall stock market, but they do so with less volatility. Like balanced funds, they usually underperform in good times, but lose significantly less in bad years. This year is a perfect example of that as the fund has outperformed the S&P 500 Stock Index by over 2 percentage points YTD. If you have less than $10,000 to invest, I'd go with the ETF as it has a lower expense ratio than the mutual fund. More than $10,000 it doesn't matter whether you buy the ETF or mutual fund, since you get the cheap expense ratio either way.

Vanguard Dividend Appreciation Index Fund Investor Shares (VDAIX) Fund Performance and Returns

Last edited by mysticaltyger; 12-30-2018 at 06:57 AM..
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Old 12-30-2018, 06:45 AM
 
25,953 posts, read 28,349,794 times
Reputation: 24602
Quote:
Originally Posted by rjm1cc View Post
Seems that you have a good time to buy with everything on sale.
You can look at morning star for their evaluation of the funds.

I would avoid bonds at your age , with a long term investment goal, and interest rates increasing.

I would go to ETF since you can pick your buying and selling prices unlike a mutual fund. (But probably not a big deal)

Go for equity funds. Vanguard has educational material etc so look at that but skip the bonds.

If you really can not make up your mind then pick a Target fund and they will manage it
Someone always says this when these types of posts come up. But when you look at a fund like Vanguard Wellington, it's outpaced index funds like VFIAX and VTSAX over the last 20 years with less volatility.

Yes, I know. There's a good chance it won't do that over the next 20 years. But maybe a little less volatility when the market freaks out--as it has this last month--is worth the price of slightly lower long term returns.

Last edited by mysticaltyger; 12-30-2018 at 06:59 AM..
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