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  #1  
Old 01-14-2005, 01:49 PM
Grisgra Grisgra is offline
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Default Idiot wants advice.

Tell me what mutual fund to toss $5000 into. I don't visit my ETRADE account more than once every two or three months, so this would preferably be something that would be a decent longer-term investment. I tossed my last 5k into an index fund, it's doing okay, might do that again but I thought I'd ask for general advice on an otherwise low-risk fund . . .
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  #2  
Old 01-15-2005, 12:08 AM
Mark Heide Mark Heide is offline
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Default Re: Idiot wants advice.

If you don't keep track at all, you would want to go to a S&P 500 fund which generally have low management fees. With just 5K, and you don't want to bother with anything else, just stay with the S&P 500 fund. Get your money out of anything else. Bond funds would be okay short term, but I generally recommend againt them unless you have your money in a corporate 401K plan with limited choice by your employer. When I mean short term, I'm talking about up until August. But, I would only pick an index fund like the S&P 500 funds, anything else is just wasting your money.

My prediciton this year is for a bottom by July for the Dow to hit 9200 for this year. I expect oil to bounce around a bit form 35 to 55 dollars this year. A wide margin for a crummy overvalued market.

If you do time the market. Stay out of all funds until July or August. Watch and start buying up for the next Santa season.

Good Luck

Mark
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  #3  
Old 01-15-2005, 12:57 PM
RollaJ RollaJ is offline
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Default Re: Idiot wants advice.

Index fund, or ask your broker for a "fund of funds" basically a fund which holds pieces of other funds so you will be very diversified
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  #4  
Old 01-15-2005, 03:58 PM
RunDownHouse RunDownHouse is offline
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Default Re: Idiot wants advice.

Another echo for the index. Just go with an S&P 500 fund. Low management fees, plenty of diversification, and most actively managed funds can't beat it anyways.
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  #5  
Old 01-15-2005, 11:37 PM
FatOtt FatOtt is offline
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Default Re: Idiot wants advice.

I wish people would stop recommending the S&P 500 index when there are many better-diversified indices available at the same low expense ratios.

I'd recommend buying VTI, a very low-expense fund that captures the return of the Wilshire 5000 Total Market Index. Is it going to be very highly correlated with the S&P 500? Yes, but if you're going to diversify, do it all the way.

As far as how you buy it, it trades just like any other stock (and not like mutual funds) - you can buy and sell at any point in any given trading day.
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  #6  
Old 01-16-2005, 12:10 AM
GeorgeF GeorgeF is offline
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Default Re: Idiot wants advice.

I say put it in vanguard inflation protected VINFX or pimco total return, and hope the stock market crashes below DOW 9500. Then buy in.
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  #7  
Old 01-16-2005, 12:50 PM
RunDownHouse RunDownHouse is offline
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Default Re: Idiot wants advice.

[ QUOTE ]
I wish people would stop recommending the S&P 500 index when there are many better-diversified indices available at the same low expense ratios.

[/ QUOTE ]
"Better diversified" needs some defining. Studies have shown that once you've got more than 20 stocks in your portfolio, you're pretty far down the road to total diversification. After 30 or so the incremental diversification really falls off.

5000 is probably better diversified than 500 in an absolute sense, but I wouldn't worry too much about diversifying away 99.999% of risk over 99.99%. It doesn't really make a difference, and for the extremely casual investor its easy to flip over to CNBC or whatever and see what the S&P did.
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  #8  
Old 01-16-2005, 03:35 PM
FatOtt FatOtt is offline
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Default Re: Idiot wants advice.

[ QUOTE ]
"Better diversified" needs some defining. Studies have shown that once you've got more than 20 stocks in your portfolio, you're pretty far down the road to total diversification. After 30 or so the incremental diversification really falls off.

5000 is probably better diversified than 500 in an absolute sense, but I wouldn't worry too much about diversifying away 99.999% of risk over 99.99%. It doesn't really make a difference, and for the extremely casual investor its easy to flip over to CNBC or whatever and see what the S&P did.

[/ QUOTE ]

We're probably in more agreement than disagreement, but it's all a continuum. If 30 stocks gives you adequate diversification, you'd be just as happy owning the ETF that tracks the Dow Jones as you would be owning the S&P 500 tracking stock. I'm simply saying that diversification is very good thing for someone who plans to buy and hold, ignoring any day-to-day news. Absent a belief that large-cap stocks are a better value than small-cap stocks, VTI gives you better diversification than SPY. I don't disagree with the idea that the increase in diversification from 500->5000 is lower than the increase from 5->30.
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  #9  
Old 03-02-2005, 07:39 PM
TN_POKER_MAN TN_POKER_MAN is offline
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Default Re: Idiot wants advice.

This is a fine mutual fund for starting a portfolio off with.

American Century Equity Growth Inv (BEQGX)
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