1. Build a base. Any large-cap /bluechip (for stocks) and diversified bond ETF or mutual fund(s) w/ a low expense ratio that tracks a major index; mix/match %'s to suit risk tolerance/age/time/liquidity needs. 2. Diversify. Add some international, emerging markets, mid/small caps, or REITs; emerging market bonds maybe? ETF's are usually cheaper for these.
3. If you have an excellent buying opportunity, pick up, say, a few shares of a stock that's been hammered by temporary bad news; but only if you think it has good long-term prospects AND make sure most if not all of the portfolio pays dividends. IIRC, REIT's also get the pass-through income deduction. @ LongTimeLurker, feel free to point out flaws
3. If you have an excellent buying opportunity, pick up, say, a few shares of a stock that's been hammered by temporary bad news; but only if you think it has good long-term prospects AND make sure most if not all of the portfolio pays dividends. IIRC, REIT's also get the pass-through income deduction. @ LongTimeLurker, feel free to point out flaws
@M_Smart007 wrote:
@Anonymous, Going to try to keep this simple. I have Invested for 30+ years. I have picked individual stocks,
and No Load Mutual funds of ALL flavor's! .. while their might be a few that can pick individual stocks,
and possibly "outperform"??? .. those that can do it, are few and far between (Very Rare).
Investing in a "single" stock vs a broad diversified Mutual fund carries 8x The risk. (Google it)
I have spent countless hours reading and researching.
I have come to the conclusion, after many years of reading, researching and mistakes!,
To beat a Blue Chip Growth fund is pretty hard ..over the long term! (Investing should be long term)
Slow and steady will win the race ..like Credit "It is NOT a sprint, but a marathon".
Fidelity blue chip growth fund, paid My daughter's College tuition! and it was not cheap!
I currently have 2 Mutual funds in My 401K TRBCX & VIGAX ..Allocation is 60% in TRBCX and 40% in VIGAX
here are (2) charts;
Calendar year: Jan 1st 2019 to Aug. 31st 2019 ..Cumulative rate of return is 21.07% / 3 year is 15.44%
Chart #2 Is a Graph Comparing some Mutual Funds, "SPY" S&P 500 INDEX "Spiders" & Your "VYM"
VTSMX = Vanguard total stock market fund / TRBCX = T.Rowe Price blue chip growth fund / VIGAX = Vanguard Growth Index Fund;Admiral
"I currently have 2 Mutual funds in My 401K TRBCX & VIGAX ..Allocation is 60% in TRBCX and 40% in VIGAX"
You can see, in "blue" T. Rowe Price blue chip growth fund ..it is clearly "outperforming" the others.
"larger image of chart" - "Click Here"
Super kudos. It is almot impossible to out preform the market unless yur name is warren Buffett. My favorite mutual firm is Vanguard. You can buy several several different index funds yrmv/your tastes may vary. 1) Spyder S&P 500 index 2) Diamonds Dow Jones 30 industials index 3) Russell 2000 a very broad fund 4) Small cap funds smaller co in theory can grow faster because of size 5) International Funds 6) High Dividend funds usually utility firms. 7) Bond funds by lenght of maturity and bond grade from AAA to junk
I once worked for a firm that kept a very large amount of cash and cash equilevents on hand well over $100 million.
Our cash we did not need for daily use. We kept about 1/2 in Spyders the rest we kept in a US Treasury Note fund with an average maturity of 2 years. Our firm generated a lot of free cash which we would use every few years to buy out a competitor
