AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
I have $10K I'd like to put into two mutual funds...Vanguard's VTSMX ($7k) and Vanguard's VGTSX ($3K). Furthermore, I like to make monthly automatic investments of $500 into each of them. These would not be tax deferred accounts.
This is my first venture into mutual funds. I am relatively conservative which is why I am choosing the index funds, but would entertain other options.
Also, would I be better off opening a brokerage account with TDameritrade, Schwab, etc or just invest soley with Vanguard?
Is this a wise move? I am semi-retired at 55 and can afford these amounts.
Thanks!
Ron
Answer Hi Ron--
I really can't give you a definitive answer because I don't know what your entire portfolio looks like--what your goals are (eg, when you plan to retire completely), your risk tolerance, how much is in your nest egg, and so forth. For broader and more specific advice, you might consult a Certified Financial Planner, especially one who is fee-only.
That having been said, those two index funds you mention are fine--but do you have any exposure to bonds? A better choice might be a target-retirement fund, like Vanguard Target Retirement 2020. It owns not only US and foreign stocks, but bonds, too. And as you grow older the fund will become more conservative. VTWNX.
Why don't you invest solely with Vanguard. Why give other companies a cut? If you want to branch out of index funds, and out of Vanguard, you can do it on your own.
I strongly urge you to consult Morningstar Mutual Funds before buying any funds.
