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I do own the Vanguard 500 Index (fortunate to have the Institutional shares at .05% expense ratio). It's hard to go wrong with an index fund that cheap. The institutional shares actually beat the S&P 500 index that it tracks by a tiny margin over the long run. (They have a way of somehow cheating to beat the index, but I can't explain it).
I also like Vanguard Wellington (VWELX). Since it's a "balanced" fund, it owns some bonds (around 30-35%) but it has great long term returns, beating the S&P 500 stock index over not just the last 10 years but also the last 20 years, with less volatility than the index as well.
Another, even more conservative balaned fund (60% bonds, also known as "conservative allocation") is Vanguard Wellesley Income VWINX. This fund is a little too conservative for me, but has done almost as well as Wellington over the 20 year period and slightly better over the last 10 years. If stocks ever start to perform decently again, this fund is going to look boring, since it's 60% bonds.
But I agree with what another poster said, a lot of Vanguard's funds are mediocre. That is generally true for any large mutual fund company.
Size indicates to me that a lot of people have put trust in the company.
Honestly, where a "lot of people" invest their money means little to me personally. A lot of people are "performance chasers" or invest based on name familiarity or based on tips from co-workers...or whatever. IOW, a lot of people are not savvy investors, IMO.
Many of the funds that have been around a long time and have had some success are bound to become large unless action is taken to limit the inflow of new investors. And many funds are hesitant to do that, even if it means the fund's future performance may suffer, because doing so means less money made from management fees. No, when I see a super-large fund, I think of a tractor-trailer trying to maneuver in a crowded Walmart parking lot.
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Originally Posted by Texas User
You simply can't go wrong with AF's.
I guess you got me there, LOL.
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Originally Posted by mysticaltyger
I also like Vanguard Wellington (VWELX). Since it's a "balanced" fund, it owns some bonds (around 30-35%) but it has great long term returns, beating the S&P 500 stock index over not just the last 10 years but also the last 20 years, with less volatility than the index as well.
And therein lies the reason why I like balanced funds in general (particularly of the moderate allocation variety). VWELX is a good fund, but IMO the best balanced fund out there is Oakmark Equity & Income (OAKBX). Same story as VWELX but even better risk/reward. And you don't even have to pay a big, obnoxious load.
I've had Growth Fund of America for quite a few years now. EuroPacific Growth since around 2006.
No, I haven't sold any and don't intend to.
Like I said, I think most American Funds are good to hold on to as none of their funds are really bad (although a few are just mediocre). However, if you have to pay the sales load, I would not buy more....I'd make my future fund purchases no-load funds instead.
You can't buy AF's without a load unless in your employer plan.
I do own the Vanguard 500 Index (fortunate to have the Institutional shares at .05% expense ratio). It's hard to go wrong with an index fund that cheap. The institutional shares actually beat the S&P 500 index that it tracks by a tiny margin over the long run. (They have a way of somehow cheating to beat the index, but I can't explain it).
I also like Vanguard Wellington (VWELX). Since it's a "balanced" fund, it owns some bonds (around 30-35%) but it has great long term returns, beating the S&P 500 stock index over not just the last 10 years but also the last 20 years, with less volatility than the index as well.
Another, even more conservative balaned fund (60% bonds, also known as "conservative allocation") is Vanguard Wellesley Income VWINX. This fund is a little too conservative for me, but has done almost as well as Wellington over the 20 year period and slightly better over the last 10 years. If stocks ever start to perform decently again, this fund is going to look boring, since it's 60% bonds.
But I agree with what another poster said, a lot of Vanguard's funds are mediocre. That is generally true for any large mutual fund company.
I got started with Vanguard STAR. The only fund that requires a minimum of $1,000. Its a conservative fund. 60% Stocks, 40% Bonds.
You can't buy AF's without a load unless in your employer plan.
I disagree. I am a fee-only Registered Investment Advisor - and we have access to American Fund's "F" share class - no load funds with low expense ratios.
And therein lies the reason why I like balanced funds in general (particularly of the moderate allocation variety). VWELX is a good fund, but IMO the best balanced fund out there is Oakmark Equity & Income (OAKBX). Same story as VWELX but even better risk/reward. And you don't even have to pay a big, obnoxious load.
Yes, I agree with you on OAKBX. I also like T. Rowe Price Capital Appreciation (PRWCX). It didn't do so hot last year, but it has bounced back nicely this year.
That said, Wellington has such a low expense ratio, it would be tough for it to screw up too badly unless it really deviates from it's investment objective.
The other two are great funds, but you do have to watch out for manager changes. I think T. Rowe Price does a good job managing changes in management. I'm not so sure about Oakmark's one way or the other. Both of those two funds are a little annoying with their expense ratios. I think both could come down by 10 basis points or maybe more in the case of OAKBX.
I guess it comes down to the fact that you can't predict which ones will be the best in the future, although all 3 are very solid choices.
Last edited by mysticaltyger; 07-29-2009 at 02:54 PM..
I got started with Vanguard STAR. The only fund that requires a minimum of $1,000. Its a conservative fund. 60% Stocks, 40% Bonds.
Star is a great choice if you only have $1000 to invest. You get a well balanced portfolio for a low price and above average (but not quite top notch) performance. It's tough to argue against it.
The other two are great funds, but you do have to watch out for manager changes. I think T. Rowe Price does a good job managing changes in management. I'm not so sure about Oakmark's one way or the other. Both of those two funds are a little annoying with their expense ratios. I think both could come down by 10 basis points or maybe more in the case of OAKBX.
Sure, it would be nice if OAKBX's ER (.81%) were lower, but then it's still much lower than average for a moderate allocation fund (1.35%). Being a Vanguard fund, it's no surprise that VWELX's ER is very low (.29%), and that does give it a performance edge over most other funds in the category...however OAKBX still outperformed VWELX by nearly 4% per year over the last 10 years. While past performance is no guarantee of future results, yada, yada, yada, OAKBX's great long-term track record--and with the same manager since inception, BTW--makes it very easy, for me personally, to pay that extra .5% in management fees.
But like I said, I agree with you that VWELX is a good fund and would be a solid choice. I just happen to consider OAKBX one of the "elite" funds.
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