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Should I really invest in stock or just in an Index fund in Vanguard.com; your opinion?
I have been investing in stocks an have made and lost money. I have made but not lost money in VASGX (Vanguard Life Strategy Growth Fund) and still have it and I have VFIFX ( Vanguard Target Retirement 2050 Fund) in my ROTH IRA. I have GCC Green Haven Continues Commodity Index fund and lost some but still hang on because I believe commodity prices are and will continue to go up. Your opinion? I am 27 and make less than 20,000.
- JoeLv 61 decade agoFavorite Answer
I think your buying of the Vanguard Target Retirement 2050 Fund was a good idea. I am less enthusiastic about you buying a Commodity Index Fund.
Both Stocks and Commodities are volatile, but over the long run stocks have done much better than commodities. Therefore I think you would do better in stocks and leave out the commodities. Secondly when you buy an ETF you never do as well as the underlying commodities, because you have to pay contango costs. (If you don't understand contango, see the link.) Your ETF also has a rather mediocre management fee of 0.85%. While not horrible, it is higher than Vanguard's funds.
- Anonymous1 decade ago
If I were you, I'd continue to invest in a wider portfolio of mutual funds just because you get the diversification and the management. Individual stock investing/trading is a lot more risky, you need to do a lot more work and research to ensure your success and even then, the market cycles and you might be left holding the bag because the information you get does not always come in the same timely manner as that of a portfolio manager of your fund. Concentrate on your career and improving your prospects there and let your money work for you through professional management.
- Bobby CrosbyLv 51 decade ago
I'm doing the same exact funds as you with Vanguard. The funds spread your money out to reduce risk while maximizing your return. When buying individual stocks and bonds you have to do this on your own, and unless it's your job it's not worth the trouble. You do not lose or gain money until you sell shares in the stock/fund.
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- Anonymous1 decade ago
You shouldn't be messing with stocks at all. Stick with good no-load mutual funds (like Vanguard). Keep in mind that funds are intended for long-term investing - don't get hung up because you "lost money" on one (which you haven't unless you cashed it out) over a short period.
- Common SenseLv 71 decade ago
READ: Mutual Funds For Dummies
You need to have a longer term outlook.... Like over 15 years.
Stay clear of sector funds. Most people shouldn't be in them... especially a novice.