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Best mutual funds

Dear DL financial advisors,

What are some good mutual funds, or a mutual fund class, to buy and hold onto for a while?

I'm tired of making less than a percentage point of interest on my savings account.

by Boozy Ormanreply 3404/27/2013

Mutual funds are dangerous in their own way. Please go learn something about investing and then decide what to do.

by Boozy Ormanreply 104/20/2013

Buy a dividend paying stock and then reinvest the dividends automatically.

Buy and hold, for years.

by Boozy Ormanreply 204/20/2013

What R2 said.

Look at TOT right now. Oil company, French,

nice dividend.

Put it on dividend reinvestment and sit back.

by Boozy Ormanreply 304/20/2013

Individual stocks are far riskier than mutual funds, OP (I'd highly recommend a Vanguard fund, such as Windsor II). For instance, there's a TOT troll who insists people buy, but its value has dropped 11% this year alone. According to MarketEdge analysis:

[quote]The overall analysis of the fundamental factors for TOT reveals that the company needs to work to improve its financial performance. This shows up in the large number of negative fundamental comments. The stock represents a good value when compared to other stocks in its industry group and appears likely to experience further price appreciation. TOT's ability to generate future earnings appears somewhat questionable at this juncture when compared to industry averages.

by Boozy Ormanreply 404/21/2013

Thanks, R4. I've heard good things about Vanguard funds. Will research Windsor II.

How do T. Rowe Price funds compare?

by Boozy Ormanreply 504/21/2013

I am in a very aggressive Fidelity Fund, and it has performed very well over 20 years.

I apologize for not being able to name it specifically, but I think it's the most aggressive one they offer.

by Boozy Ormanreply 604/21/2013

Mutual funds are so 2000's. ETF's (exchange traded funds) are where it is at. No management fees.

Basically find an ETF that mirrors a top performing fund but without paying the overhead fee that can range from .5% to 1.5% on a mutual fund. Most large investment co's offer ETF's.

My money is an ETF that mirrors the S+P 500 index. Not exciting at all, but it is a good, stable fund.

by Boozy Ormanreply 704/21/2013

Good advice, R7. Thanks.

by Boozy Ormanreply 804/21/2013

I have no management fees on my fund.

by Boozy Ormanreply 904/21/2013


by Boozy Ormanreply 1004/21/2013

Why is a mutual fund better than buying a whole lot of individual stocks?

by Boozy Ormanreply 1104/21/2013

R4. Oh boy, oil companies fluctuate with the price of oil. I recommend TOT when it is low, thereby capturing the higher dividend yield.

It is a stable company, producing a product that won't go out of fashion for a while, so it is a good core stock for someone who wants to build a by and hold portfolio.

There are other good strong companies with long histories of issuing dividends.

After the rise of mutual funds in the 1980's (I started investing in 1973) I became disillusioned with the fees and hidden costs of mutual funds. It is my preference to control my own stock choices. Even when I was only able to save a little money here and there, I carefully bought individual, quality stocks.

This approach is not for everybody...but I do wish you all good luck and good fortune.

by Boozy Ormanreply 1204/21/2013

Another vote for Vanguard. Ask about SPDR.

by Boozy Ormanreply 1304/21/2013

Buy a consistent dividend-paying domestic electric utility. Ideally your own depending on where you live and the name of your supplier so you can in effect "pay yourself."

They're not flashy and currently only hold their value but they have steady earnings and their value is sure to increase if electric cars start being sold in bigger numbers due to some big oil flow interruption, like say, a revolution against the Saudi family in Arabia.

So, you would get steady dividends, low risk, and big potential upside at the oil companies' expense.

Instead of filling up as often, many people could start coming home and plugging in.

by Boozy Ormanreply 1404/21/2013

The utility company stock is also a good idea.

If you do go for mutual funds ALWAYS buy a no-load.

Both Spartan 500 (FUSVX) from fidelity

Vanguard Total Return are considered good.

But please do educate yourself on this stuff and don't buy anything you don't understand.

You can try out your ideas as you learn about investing by creating a mock portfolio on Yahoo/finance.

ALL portfolios go up and down, no one "wins" every time.

Be patient, diversify and keep learning.

The dividend yield for TOT this week is more than 6.5%, BTW.

by Boozy Ormanreply 1504/21/2013

One word, OP: Morningstar

by Boozy Ormanreply 1604/21/2013

OP, Vanguard and Fidelity index funds are a great way to keep your expenses low while spreading your risk among a large number of stocks.

You really need to educate yourself. Check out the bogleheads forum (link below). There is a FAQ and a reading list.

It is time well spent to educate yourself on how to invest your money. We all spend so much of our lives earning money and so little time understanding our options to make the money grow.

My partner and I are retiring in 3 weeks at age 56.

Good luck and good for you for getting started!

by Boozy Ormanreply 1704/21/2013

Congrats, R17! When did you start investing, and how much did you put in each month?

by Boozy Ormanreply 1804/21/2013

Thank you, r18. We started maxing out our 401k and Roths (but back then the ceiling was pretty low, 10% of our incomes), then every year we kept increasing our savings when we got raises. When we paid our house off, we increased our savings by the amount of our principal and interest. I became pretty obsessed with retirement planning and saving.

Along the way we each got an inheritance and we will both have small pensions.

It takes a lot to be able to retire early.

Our mistake was not to start saving right out of college. We really didn't get started until we were ~35. To be honest, if it weren't for the inhertitances, we'd probably be working until we were 60 or 62.

by Boozy Ormanreply 1904/21/2013

This is a very important thread. Keep it going, men and women. Investing always intimidated me...I'm going to educate myself and help other G&Ls.

by Boozy Ormanreply 2004/21/2013

Thanks again, R17/R19. I also regret not investing a little bit each month right out of college. My second big regret is not putting money in funds when the stock market crashed in '09. People who did have basically tripled their money.

Experts, what's your take on the following: VIG SCHD SPLV

And how about biotechnology funds? Those seem to have made huge gains.

by Boozy Ormanreply 2104/21/2013

The plus side to mutual funds is that you don't have to actively manage your money by closely following the stock market. My dad has about $100,000 he uses to invest in individual stocks and he's always buying and selling. Meanwhile, he shows more restraint with his money that is used to purchase mutual funds.

I'm 32 and started saving for retirement when I was 22. I've now saved $100,000...and that's despite the beating most investors took in late 2008. I credit a large part of that to the fact that Vanguard has done an exceptional job in managing its mutual funds.

by Boozy Ormanreply 2204/21/2013

R17, I heard about bogleheads from someone on this forum, might even have been you, a few months ago. I've transferred my IRA to vanguard index funds now. I'm 36, and just started getting serious about planning for the future. Thanks a lot for the tip. I've learned a bit from their wikis, and now I'm focusing on the little things to reduce spending a bit.

by Boozy Ormanreply 2304/21/2013

My 401k is in Vanguard, but in terms of deciding how to divide it into what funds, I wasn't sure how to do it. Between the guidance (a series of questions to determine the level of risk you are willing to take) on the Vanguard site AND a copy of Mutual Funds for Dummies, I feel like I do all right.

by Boozy Ormanreply 2404/21/2013

ETF's are better, and just because you don't pay a fee for a mutual fund it doesn't mean they don't take a percentage off the top. There are annual returns, and 'annual returns before expenses', which can be as high as 2 1/2% per year. The people who run the funds don't do it for free.

If you have enough money (more than $100,000) you could use a portfolio manager instead, they charge an annual fee of 3/4 or 1% and they are much more nimble that the mutual funds. You would have to go through an investment advisor, and you always want to look at the longer term record of the portfolio ro mutual fund (or ETF). Everyone has great 1 year and 3 year returns, you want to go back 5, 10, 20 years (if possible) and since inception.

by Boozy Ormanreply 2504/21/2013

[quote]If you have enough money (more than $100,000) you could use a portfolio manager instead, they charge an annual fee of 3/4 or 1% and they are much more nimble that the mutual funds

No way would I pay someone 1% of my assets. Something like 90% of professional money managers can not beat the indexes over a ten year period of time. It makes more sense to me to use a simple portfolio of 3 or 4 index funds and be done with it.

In retirement I will be living on 4% of my investable assets. Giving 25% of my gross income to someone to manage my portfolio is absurd.

I'm curious as to why you know longer do that type of work, r25. Also, who did you work for?

by Boozy Ormanreply 2604/23/2013

Go to and begin using their free tools to sift through information to pull up what works for you. For the record, mutual funds have capital gains and dividends, too, just like individual stocks which you can reinvest. Look for expenses to tally 1% or under. I'm here to help. Look at Vanguard Prime Cap.

by Boozy Ormanreply 2704/23/2013

[quote]Look for expenses to tally 1% or under

Way too much. There is no good reason to pay that high of a fee.

by Boozy Ormanreply 2804/23/2013

I know this isn't really related to mutual funds, but since some of the talk has veered towards general investing and retirement, I thought I would ask: what exactly are annuities, and when should you buy one?

by Boozy Ormanreply 2904/24/2013

r25 here. That fee (which is much lower than 1% now that I looked it up) includes all transactions.

I was an advisor in the 80's r26, and it was such a goal in college to become one, I couldn't believe how much I disliked it once I was in the business. I didn't know any wealthy people, so I was a glorified cold caller. 200 dials, to have 40 conversations, to get 5 prospects, which would ultimately turn into 1 client. I was hired and trained at EF Hutton, with a branch manager who wanted us all to push insurance products and horrible limited partnerships. I moved to Merrill, which I liked much better. I had little grandma and grandpa clients who would ride the bus to see me with grocery bags filled with $800,000 worth of bearer bonds. Bearer bonds didn't have the owners names on them (they don't issue them anymore) so whoever was in possession of them got to collect the interest. I stressed too much about my clients with finite income, and when the market crashed in '88 I got out.

True story, before the '88 crash I had a minister as a client who told me his investments did well because God wanted him to have wealth. Nothing to do with me of course. He got cocky and decided he wanted a margin account (borrowing against your investments to purchase more) and even though I advised him against it, he did it. When the market crashed we had to liquidate almost 80% of all his holdings to cover his margin call. He was furious. How could I do this to him?! I thought it was God I asked. God would never do this to me he said. Tool.

by Boozy Ormanreply 3004/26/2013


Most independent financial advisors would warn you away from annuities.

They are a promise to return to you a percent of your investment after a period of years....for a fee. You give the money manager your bucks, they use it to make money, they keep the bulk of the profits and give you a small percentage back.

by Boozy Ormanreply 3104/27/2013

OP I checked my records and the Fidelity Fund which has performed so well for me over the years is the Contrafund.

by Boozy Ormanreply 3204/27/2013

Thank you all for the suggestions...I need all the help I can get...

by Boozy Ormanreply 3304/27/2013

Read this thread and watch the PBS video. It is excellent and all a beginner needs to know.

by Boozy Ormanreply 3404/27/2013
Need more help? Click Here.

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