Mutual Funds/vanguard VTSMX

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Question
Good morning,

I am presently retired with a stable income.  That said, I have a bit of extra cash not accruing any interest and am considering a Vanguard mutual fund…VTSMX.  My time horizon for this fund is 5-10 years…and I'm moderate to aggressive in terms of risk.

It will not be sheltered in any retirement tax deferred plan…and simply subject to taxes.

It is money I can afford to risk in the stock market which is why I'm leaning toward the total market index versus a SP500 Index fund.

Any thoughts whatsoever will be appreciated.

Thank you,

Ron

Answer
My only thought is that if you have a lot of money to spare, you spring for more than one fund. Just to make things more interesting--and to diversify more. An emerging markets fund...a fixed-income fund... whatever.

The fund you have in mind has over 3,000 U.S. stocks and gets four stars from M*. With your 5-10 year time horizon, your money seems safe enough. Unless the bottom drops out of the market at the last minute....

Good luck!

WB

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Warren 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.

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