Funds Investing: Make More Money and Worry Less
Some simple portfolio ideas that can help investors stay on track with minimum management
Quoted from Andrea Coombes WSJ Sunday Journal, April 5, 201:
“If you're investing for a long-term goal such as retirement, then keeping it simple with a portfolio of three to six broad-based, low-cost mutual funds can pay off in the long run. Rebalance on occasion, and you'll be well on your way.
Consider this: A portfolio composed of three such funds from Vanguard Group—40% in the Vanguard Total Stock Market Index Fund (VTSMX), 20% in the Vanguard Total International Stock Index Fund (VGTSX) and 40% in the Vanguard Total Bond Market Index Fund (VBMFX)—beat 5,000 variations of similarly composed portfolios of actively managed funds more than 80% of the time over a 16-year period (1997-2012), according to a recent study.
(You can read the study, coauthored by Rick Ferri, founder of investment-management firm Portfolio Solutions, at RickFerri.com.)
Even with just three funds, that type of portfolio "is extremely diversified," says William Bernstein, author of "The Investor's Manifesto" and a principal at Efficient Frontier Advisors. "You basically own almost every significant equity offering in the world."
The hard part is figuring out what percentage of your portfolio to devote to each asset class. That will depend on your risk tolerance, financial situation and time horizon. If you're not sure, there's always that handy rule of thumb: Put a percentage equal to your age in bonds and the rest in equities.”http://online.wsj.com/news/articles/SB10001424052702304441304579477442649398388?mod=dist_smartbrief
Simple Investing
Reviewed by Pisstol Aer
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Published :
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