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Reasonable? I called Vanguard, T.Rowe Price, etc. and told them I had just paid cash for a car and wanted to put aside $250/month for the one I'll buy ten-fifteen years from now and wanted to start putting just that much in an index fund earmarked for that purpose.
I was told they don't do that anymore. I said, "That's a shame, I got started in investing - and really saving - by putting $50/month in Mutual Funds a few decades back when the fund firms waived the minimum investment as long as you set up an automatic monthly investment."
Both of the men at Vanguard and T.Rowe Price replied that they, too, thought it was a shame that beginning investors are frozen out of the picture.
What I did instead was select several DRIPs with no purchase fees and automatically put $25 to $50/month in each one including General Mills, Abbott Labs, Cracker Barrel Old Country Store, Exxon, and Emerson Electric. Since I don't have to placate bosses and shareholders with good quarterly to annual returns, I can focus on expected long-term results from these companies which have built the sought-after "durable competitive advantages."
Forget about those so called low cost Vanguard funds.
Isn't it about making money?
If you feel it is about making money check out PRHSX a T.Rowe Price Health fund.
or some of the better Fidelity funds their top 10-15 funds ALL BEAT Vanguards.
2060, 2055, 2050, 2045, 2040, & 2035? There are also target date funds from 2010 to 2030.
We went with the 2040 fund (VFORX). We chose it because it only has a 0.18% expense ratio (fees) & only a $1,000 minimum buy in amount. Plus, over time, the target date funds do all of the reallocation work for you. So, you don't have to do anything - just keep investing as much as you can afford and as you age and get closer to retirement - Vanguard will gradually reallocate your target retirement fund for you - so that it automatically becomes more conservative (less risky) as you get closer to retirement.
In addition, we partly decided on the 2040 fund because it assumes a bit more risk than some of the others with an earlier target date. The 2040 fund is currently about 90% stocks and 10% bonds. However, as we get closer to retirement, we can either keep it in 2040 or maybe xfer it into either the 2010 (VTENX) fund or possibly even the current (VTINX) fund for those who are already retired.
(VTINX) - 30% stocks/70% bonds; and the 2010 fund (VTENX) - 41% stocks, 59% bonds.
What I personally find appealing about these Vanguard target date retirement funds (such as VFORX) is that they are ALL funds that are each individually comprised of differing allocations of Vanguard's MAIN INDEX FUNDS. So, they are essentially funds within their own index funds; which I believe = more diversification.
For example, currently VFORX is allocated as follows:
62.86% invested in (VTSMX) - which is Vanguard's Main Stock Market Index Fund - their biggest fund and is the very fund this article recommends buying!
26.97 % invested in (VGTSX) - Vanguard's Main Total International Stock Index.
8.09 % in (VTBIX) - their Main Bond Index Fund
2.0% in their Main International Bond Index Fund (VTABX - I think).
.08% I think Cash.... ???
Again, because the funds become more conservative (less risky) over time, they could be a good choice for those seeking decent target funds & who aren't really stock/investing "wizards" - so you can kind of "set it and forget it" with these target funds and buy and hold. If "Vanguard" doesn't float your boat, there are several other companies offering similar target date funds... just be sure to compare their fees and performance, etc.
Well BDAWWWG I read your e-mail to me and I still highly disagree with your comments.
Just say we have $50,000 each invested in two funds.
One fund has .18% expense ratio the other has .79%,
the .79% fund is making 30% return for me and the .18% fund is making 20% for me.
WHICH ONE WOULD YOU RATHER BE IN.
Remember .18% AND .79% are both below 1%
Forget your low expense ratio --- IT'S THE TOTAL RETURN that counts.
You need to get your homework done before posting anything.
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