Tilted Forum Project Discussion Community - View Single Post - Suggestions for mutual fund or money market acct.?

abscondo · 04-17-2005, 08:47 AM

You're not going to double your money in four years, so put that idea out of your head right now. It's not impossible, but the odds are so long, and you'd have to take on so much risk that it would be foolish.

arch13 makes many good points. One point where I would disagree is on the Nasdaq index. Also, I think it is possible to invest for yourself IF you educate yourself first.

jhkayakr also makes good points. For how long are you willing to part with this money? If you're considering the stock market, your time horizon should be years. (And do you have several months' income set aside for an emergency?) Absolutely, no-load funds -- but watch the expense ratios, too. Read all the free stuff you can at Morningstar. Check out FundAlarm too.

Beware of chasing performance. Just because a fund did great last year doesn't mean that it will this year or next year -- sometimes quite the opposite, in fact. Look for superior performance over long periods of time.

There is no "best" mutual fund for everyone. If you're looking for a simple answer, one specific recommendation that I usually make for people who want to start investing, and who want to keep things simple, is the Vanguard Wellington fund (VWELX). It's a balanced fund, roughly 60% stocks/40% bonds (bonds help reduce volatility). It's no load and has very low expenses. It will never top the lists when the market is booming, but over the long haul (it was founded in 1929 -- great timing, huh?) it has been a steady performer. Morningstar gives it the top rating of 5 stars. There are other, similar funds (Fidelity's is called Puritan, I think) and I'm not dismissing them, I'm just recommending based upon my personal experience.

04-17-2005, 08:47 AM	#6 (permalink)
abscondo Tilted Location: MI	You're not going to double your money in four years, so put that idea out of your head right now. It's not impossible, but the odds are so long, and you'd have to take on so much risk that it would be foolish. arch13 makes many good points. One point where I would disagree is on the Nasdaq index. Also, I think it is possible to invest for yourself IF you educate yourself first. jhkayakr also makes good points. For how long are you willing to part with this money? If you're considering the stock market, your time horizon should be years. (And do you have several months' income set aside for an emergency?) Absolutely, no-load funds -- but watch the expense ratios, too. Read all the free stuff you can at Morningstar. Check out FundAlarm too. Beware of chasing performance. Just because a fund did great last year doesn't mean that it will this year or next year -- sometimes quite the opposite, in fact. Look for superior performance over long periods of time. There is no "best" mutual fund for everyone. If you're looking for a simple answer, one specific recommendation that I usually make for people who want to start investing, and who want to keep things simple, is the Vanguard Wellington fund (VWELX). It's a balanced fund, roughly 60% stocks/40% bonds (bonds help reduce volatility). It's no load and has very low expenses. It will never top the lists when the market is booming, but over the long haul (it was founded in 1929 -- great timing, huh?) it has been a steady performer. Morningstar gives it the top rating of 5 stars. There are other, similar funds (Fidelity's is called Puritan, I think) and I'm not dismissing them, I'm just recommending based upon my personal experience. __________________ Ceci n'est pas une pipe.