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  #1  
Old 06-28-2017,
AbramTaf AbramTaf is offline
 
Join Date: May 2017
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Default Advice on Which Funds to Pick?

Hi Guys,

After just recently graduating from college and landing my first job I figured it would be a good idea to start investing. Since my knowledge with stocks is fairly limited at the moment I am considering first starting off with investing in a fund or several funds. They seem pretty safe, good for people with little knowledge of investing, and require a minimal time investment.

I am considering splitting my money between several funds (is this a good idea?) and am looking to invest about $30-40k (maybe less to start or just use a cost averaging approach). Some funds I have been considering are: Vanguard S&P, Vanguard VGHCX (healthcare) fund, The Vanguard Star Fund, a Bond Fund (Any recommendations?), and The Fidelity Medical Equipment Fund(FSMEX).

These all look pretty good to me but I wanted to get your opinions: If there are any other funds that work/will work better? If investing in a few separate funds is a good idea and if so how much in each type to invest? Which types of funds should I add if any? And any other comments / suggestions you guys can think of?

I appreciate any advice you guys can give! Thanks in advance!
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  #2  
Old 06-30-2017,
abozafiwunu abozafiwunu is offline
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Well, pages could be written here, but just briefly:

Generally, you'd like a mix of funds that's as diversified as possible. You could add REITs, precious metals and foreign exposure, for example, to what you've mentioned.

The STAR fund is an extremely diversified "fund of funds" (as opposed to the usual fund of STOCKS). The S&P 500, foreign stocks and bonds are already covered there. So you could use that as a "core" fund and add to it where it's lacking (REITs, precious metals & emerging markets, for example) or where you'd simply like more exposure.

Or you could forget the STAR fund and create your own mix using the S&P 500 fund as the core. But going with both the STAR fund and the S&P 500 fund would be kind of redundant.

Looks like you have a preference for the health sector and I would just say be careful about putting a disproportionate amount into any one area. If you want to invest in both VGHCX and FSMEX, maybe put half the normal amount into each.

Good luck and if you have more questions, ask away.
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  #3  
Old 07-01-2017,
AddiePaync AddiePaync is offline
 
Join Date: Feb 2017
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This is some great advice! Thanks LongArm!

After thinking this over more I have added a few more funds to the mix and taken out the STAR fund. Would you guys think that now is a good time to invest in all of the funds I mention below or hold off on a few? Also, The only big thing I can think of that might be worth adding is energy? Know of any good energy funds?

Vanguard REIT Index Fund Investor Shares (VGSIX)- Invest Now or NOT?

Vanguard 500 Index Fund Investor Shares (VFINX)- Invest Now or NOT?

Vanguard Emerging Markets Stock Index Fund Investor Shares (VEIEX) - Invest Now or NOT?

T-Rowe Price Latin America Fund (PRLAX) - Invest Now or NOT?

fidelity medical equipment fund (FSMEX) - Invest Now or NOT?'

I'm looking for whether or not you guys think its a good idea to invest now in these funds or not? Or which funds are good to invest now and which funds I should probably not invest in until later?
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  #4  
Old 07-02-2017,
AdeleBassl AdeleBassl is offline
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You've got some more redundancy there with Latin America and emerging markets since the former is included in the latter. Also keep in mind that emerging markets are VOLATILE (but have large potential for growth), so take note if you have a weak stomach.

I also notice you left out bonds this time. Many think that bonds aren't necessary for a young person, but I like them. Reason is, they can really help smooth out the ride on your overall portfolio due to the fact that they have a low correlation to stocks. And a 6% (or so) return on, say, 25% of your portfolio isn't going to hurt long-term returns much if any, depending on what the stock market does going forward. In fact, over the last 10 years, bonds have actually kicked the S&P 500's a$$. Just something to think about.

As for when/how much to invest, if it were me, under these conditions, I would dollar-cost average into the market rather than going all-in at once. Maybe spread it out over 2-3 years and keep the rest in a high-interest online savings account or CDs.
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  #5  
Old 07-03-2017,
AdaIbx297 AdaIbx297 is offline
 
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Awesome advice once again! I'm thinking of dropping the Vanguard Emerging markets and just going with Latin America. As for bonds- Thats a great idea. How does Harbor Bond Fund (HABDX) seem? Think I might add this into the mix and weight most of the investment to it. Cost averaging sounds like a good idea at this point, especially with funds. Think I might do that.

Also, I think This might be a good % of how much to allocate to each (eventually, using the cost averaging method). Any ideas? Seem like a good percent allocation?

Vanguard REIT Index Fund Investor Shares (VGSIX) - 15%
Vanguard 500 Index Fund Investor Shares (VFINX) - 30%
T-Rowe Price Latin America Fund (PRLAX) - 10%
fidelity medical equipment fund (FSMEX) - 15%
Harbor Bond Fund (HABDX) - 30%

I really appreciate the help! Thanks again
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  #6  
Old 07-03-2017,
admin admin is offline
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Well, IMO, a good fund is defined as one that outperforms its peers (funds in the same category) most years and over the long run. That could mean your fund loses just 10% instead of 15% in a given year. Since most stock funds, even the best ones, are going to go up and down with the market for the most part (just to varying degrees), the only funds you'll find that have gains every year are basically money market and short-term bond funds. Good point about making sure that the manager responsible for past performance is still steering the ship, though.
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  #7  
Old 07-03-2017,
Adaum7edDob Adaum7edDob is offline
 
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As far as funds go.... if you find one with consistant earnings year after year for 10 years that has had the same manager for most if not all of those years then it's likely that the manager knows what their doing and will continue to make those consistant gains. Just make sure it's still going to be the same manager for the future year(s).

This being said... 12% was what was always stated as the market average for indicies. I'm not sure if that's come down since the recession or not, but it's many times hard to beat a "No load" Index Fund.
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