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Instead of spending hours reviewing countless investment choices and worrying about results, it's there just an option for one Mutual Fund, that will do the trick for someone in retirement. Maybe one that has a 50/50 mixture of VTI and BND. Or a mixture of the Stock Market, REITS and a variety of bond funds in a good mix for someone who is in their 60s and retired. Anyone?
Vanguard Wellington (which unfortunately I think may be closed to new investors) and Vanguard Wellsley would both be good options. Or one of Vanguard's LifeStrategy funds (either Conservative or Moderate Growth) would also work pretty well.
Instead of spending hours reviewing countless investment choices and worrying about results, it's there just an option for one Mutual Fund, that will do the trick for someone in retirement. Maybe one that has a 50/50 mixture of VTI and BND. Or a mixture of the Stock Market, REITS and a variety of bond funds in a good mix for someone who is in their 60s and retired. Anyone?
There are several good--but no perfect--options.
There are always target date funds from Vanguard, although these do get more conservative over time. Some people think that's a good thing while others don't.
For funds that keep a fairly static allocation between stocks and bonds you have:
Vanguard STAR (VGSTX)- This one is actually one of the better diversified balanced funds. It has small and large cap stocks as well as growth & value stocks, plus about 40% in investment grade bonds. It has solid returns, but not quite top notch returns.
Vanguard Wellington (VWELX) This fund has been the best performers of the balanced or "moderate allocation" group without insane volatility (although it did have a slightly rougher 2008 than the others in the group). Wellesley Income is about 65% stocks and 35% bonds. It's mostly large cap value stocks, though. The bonds are strictly investment grade government & corporate bonds. If your balance is 50K or more, the expense ratio drops to index fund levels--- .18%
Vanguard Balanced Index (VBINX) - This fund is strictly 60% total US stock market & 40% investment grade bonds. The expense ratio is sort of high for an index fund at .24%. But you can get the cheaper Admiral share class once your balance reaches 10K. Its performance isn't as good as Wellington's but it's a consistent performer.
Vanguard Wellesley Income (VWINX) - This is the more conservative sibling of Vanguard Wellington. It's about 40% large cap value type stocks & 60% investment grade bonds. It's very steady eddie, but its returns are likely to be more sluggish over the next 10 years than the previous 10 because of the very low interest rates paid by bonds. Once again, the expense ratio drops to .18% if your balance is 50K or higher.
I don't think any of the above funds have REITs, at least not in any significant concentration.
Vanguard Wellington (which unfortunately I think may be closed to new investors) and Vanguard Wellsley would both be good options. Or one of Vanguard's LifeStrategy funds (either Conservative or Moderate Growth) would also work pretty well.
Vanguard Wellington is open if you go directly through them. I opened an account with Vanguard specifically for this reason. The Admiral shares have a lower expense ratio, but you need $50,000 minimum purchase.
Vanguard Wellington is open if you go directly through them. I opened an account with Vanguard specifically for this reason. The Admiral shares have a lower expense ratio, but you need $50,000 minimum purchase.
Correct. You can still get into Wellington if you open an account directly with Vanguard.
Instead of spending hours reviewing countless investment choices and worrying about results, it's there just an option for one Mutual Fund, that will do the trick for someone in retirement. Maybe one that has a 50/50 mixture of VTI and BND. Or a mixture of the Stock Market, REITS and a variety of bond funds in a good mix for someone who is in their 60s and retired. Anyone?
If you know you want 50/50 VTI and BND, you can just buy exactly that and rebalance once a year or so.
Or, if you know you want stocks, reits, and a variety of bond funds then Betterment would be a good choice. Betterment invests your money in a mix of etfs and charges an additional layer of fees to do so. They have a pre-determined mix of indexes for stocks (including reits) and bonds. The customer decides the stock/bond ratio in increments of 10. So, you could easily open an account, set your mix to 50/50, and Betterment will then divvy your money up in various stock and bond etfs and rebalance for you.
why bother with vbinx , wellington has out performed it just about every time frame . it almost does not matter which one you pick , wellington was a better fund .
why bother with vbinx , wellington has out performed it just about every time frame . it almost does not matter which one you pick , wellington was a better fund .
Apples to oranges. You are comparing an index fund to an actively managed fund. Past performance gives you no advantage moving forward ESPECIALLY when you're looking way back to the 90's when there was no Internet. Not a valid time period for comparison purposes.
All of the experts say to invest in index funds. Cramer summarized it well...
"In study after study, year after year, it has been shown that the vast majority of actively managed mutual funds underperformed their [benchmark index funds]" -- Jim Cramer
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