Medium risk investment recommendations?


For high risk investments I buy:
FSTMX - SPRTN TOTAL MKT INDX INVESTOR CLASS
and for lower risk I buy:
BND - VANGUARD TTL BD MKT
Any suggestions for something in between these two risks profiles?
The medium risk investment would be for my traditional IRA. I am
looking to invest around $5k/year .
I have around $100k invested in Spartan which is just my spare money.
And I have $30k invested in Vanguard Bond that is part of a SEP IRA.
Reply to
Homer Simpson
I wouldn't exactly call this a high risk investment. More like medium- high. Small cap stocks and international stocks... those are high risk investments.
Similarly, while this is certainly a lower risk investment, I wouldn't call it low risk. For really low risk, you should go with treasuries or short term bonds.
The obvious choice is a balanced index fund like VBINX. But that's pretty much the same as buying 60% of FSTMX and 40% BND. Another good choice is a long-term bond fund like VBLTX.
--Bill
Reply to
Bill Woessner
Thanks, looks like VBINX has a $75 fee and 0.26% expense ratio. Are these numbers high considering I will only be visiting $5k/year?
Reply to
Homer Simpson
DIY asset balancing is better tax-wise than letting a fund do it. You balance by adding new contributions to the weaker fund. No selling and taxable distributions involved.
Reply to
rick++
I found Fidelity has a 4-in-1 index fund called FFONX . I compared it to VBINX and the graphs looked very similar over ten years. It has no fee so looks like a good choice.
Reply to
Homer Simpson
If you are all in tax-advantaged accounts, then a target retirement fund can be an option. Vanguard has a number of low-cost ones. You get more choice as to the allocation than a balanced fund. If you have a portfolio that spans both taxable and tax-advantaged, then it's likely that individual funds will be the way to go, to make sure the correct account type is used for each fund.
Brian
Reply to
Default User
Homer Simpson writes:
The $75 is very high. Presumably, that's because you are buying it within a Fidelity brokerage account.
You can buy the same fund directly at Vanguard with no transaction cost at all.
The expense ratio is very reasonable.
You could replicate it pretty closely by using no-transaction-cost iShares ETFs at Fidelity, too. Put 60% into IWV and 40% into AGG and rebalance periodically. (It's not exactly the same - VBINX's stock portion is Vanguard's total stock index, which tracks the MSCI US Broad Mkt Index which isn't precisely the same thing as the Russell 3000 which IWV tracks. I actaully like the Vanguard index better, and you could actually use VTI, Vanguard's ETF version of it instead of IWV, but then you'll pay transaction costs, now $8/trade at Fidelity).
Expenses via the ETFs are actually lower than the expense ratios via VBINX (and the Vanguard ETFs, VTI and BND, have lower ERs than do the iShares ETFs - in the long run that may be worth paying the transaction fees to get)
Reply to
BreadWithSpam
Homer Simpson writes:
[That's FFNOX]
It's a pretty good one-stop-shopping fund, but it's a bit more risky and aggressive than VBINX. It's only got 15% in bonds, and it's also got a big chunk of international exposure. Not surprisingly, it's got a slightly lower std-dev than FSTMX, and a significantly higher one than VBINX. (trailing 3-yr, via MStar).
Note, too that FFNOX has a $10000 min. If your balance goes below that, even if it's because the market dropped rather than because of sales you make, you may get hit with a $10/yr fee. (Same as they do with all Spartan funds)
Reply to
BreadWithSpam
PRPFX is a good middle of the road investment. More risk than bonds (it does hold some bonds), less risk than stocks (it does hold some stocks). It also holds gold, silver and swiss francs.
Reply to
jIM

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