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Should I invest in the Vanguard funds?
I have about $9,000 to invest in a few of Vanguards mutual fuds, but wondering if I should consider these funds, or switch it up..Your consideration and thoughts will be greatly appreciated.
1) Total Bond Market Index ($3,000)
2) Total Stock Market Index ($3,000)
3) Money Market Mutual Fund ($3,000)
- 1 decade agoFavorite Answer
First part of you question, yes Vanguard are good funds with incredibly low fees so you can feel confident in the manager.
As for the products:
Bond funds are overvalued, bonds are dependent on interest rates and companies not defaulting or getting down graded. At the moment many companies are being both downgraded and are going into administration (not good). Also, Interest rates are at almost 0% and as bonds perform well when rates get cut then there is no more upside to be had from macro conditions. As stated above, the large stimulus packages will most likely lead to inflation - and if they dont it will only be because interest rates are jacked up high enough to curb them (1970s rates were at nearly 20%) This will kill your bond fund (although will be a good time to buy in to one)
Stock market fund is a maybe, i personally (along with many top analysts and fund mangers) believe that the markets are not reflecting the current drop in earnings enough and so the market has further to fall. However if you are willing to hold for several years then maybe it is not a that bad idea.
Money Market fund: why? these track cash and cash is paying almost 0% there is no reason to hold cash at the moment.
A good idea would be to give yourself a crash course in macro economics and financial markets available on sites such as Investopedia and motley fool. This wil give u the best idea as to what to buy.Source(s): http://www.investopedia.com/ www.fool.com
- ThorLv 71 decade ago
First, I like Vanguard and use them myself.
But the rap against the "Total" index funds is that they are too broad and you get all the losers along with all the winners. A more managed fund won't invest in the bad stocks that are covered by a "total" index fund.
- Anonymous1 decade ago
The bond fund is a crap shoot. If there is anyone that does not expect inflation to go through the roof as a result of the government throwing money it does not have in a vain attempt to mitigate the fallout of the bubble it created, I do not know who that person is.
- 1 decade ago
Depends on how old you are. You need to have a proper allocation strategy based on your age. Also, instead of buying funds, you can save more money by buying an equivalent ETFs. There are many advantages to an ETF, such as liquidity and most importantly cost (ie. savings to you).
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- 1 decade ago
In nowadays market crisis, forex is profitable.
if you are serious and have no intention to lose your money in investment, you can google for HSFX Asset Management and start making consistent profits!
- 1 decade ago
Do not jnvest in anything at this time-put it in the bank (good)