Unless you are willing to accept the risk that your $50K could be $40K (or less) in 3 years; then you need to have the money in a high yield CD.
If you intend to invest the money long term (which you specifically said was NOT your intention) - then the Vanguard allocation is completely overweight in bonds.
Knowing what I know about you and your finances and age - - I would give you very different advice before sending you on the "investing" trail:
- Keep an emergency fund of 6 months living expenses in a bank money market or CD
- Pay off every last student loan and credit card and never use credit again.
- Pay down your mortgage
8 months ago you were looking to refi and get $5K cash out. Anyone taking $5K of refinanced home equity has no business "investing" yet. You have no money.
If you invest as your Vanguard rep suggests and need the money in 3 years, i can (almost) guarantee you will have lost money.
If you don't use it as emergency savings and to pay down debt, you will likely spend it. Probably in about 18-24 months. At which time you will wonder where it went.
Lottery winners almost ALWAYS end up completely broke. Don't let it happen to you. Pay off as much debt as possible and you will have something to show for your $50K.
One important factor you did not mention is the purpose of the investment. If you plan to use the money in a year or two you should pick different investments than if you are investing for a retirement income. You also need to consider how many other liquid assets (cash, CDs, etc.) you have. You likely want to keep enough readily available to buy your next car without financing.
Index funds are a good choice for most people, and Vanguard funds traditionally are better than a lot of competitors.
Given your age I do believe if you are looking at these as long-term investments most people would suggest more in the stock funds and less in the bond funds, but if you think there is a substantial chance that you will need to withdraw some of the money within the next 10 years you do not want too much in stocks.
Sit on the money for awhile.
If you have an interest in learning about investing, an hour a day for 30 days, you can know as much as 90% of the investors. AT NO COST.
Go to Yahoo Finance. Read the articles. Follow the links. Check out the advertisers. Visit Motley Fool, Zacks theStreet, and many, many others.
Check out Vanguards Target 2045 (or similar) funds.
Check out assetbuilders.com - Couch Potato Portfolio.
Spend a couple hours reading how Warren Buffett does it.
Check out SPY, DIA, VGT, XLF
With wise investing you could retire wealthy.
Your first investing mistakes are the costliest.
(70% in Bonds seems way too much for a 32 year old. but I have been wrong before)
Here's a great way to think of that cash. That's the last of your father. Spend it wisely. Just don't become OCD. Enjoy it. Take a vacation and pretend your father is with you. Just have fun, but investing is ALWAYS a smart idea. Don't listen to the dummy talking about opening a Scottrade account. You get charged x # of dollars per trade. That will quickly add up. Unless, you're a seasoned Investor go for it. Look at tax advantaged investments. Don't let the fees eat your money away> If you don't know what fees are, then don't invest in mutual funds. Fund managers will TAKE your money through fees. And do you know what all this means:
SEC yield as of 7/14/14 1.7% B 1.99% A 1.28% A
YTD as of 7/14/14 7.42% 5.76% 3.66% 4.48%
1 year 25.04% 22.34% 4.15% 5.47%
Expense 0.17% 0.22% 0.20% 0.23%
If not, another reason NOT to invest. In stocks anyway.
I'm making good profit with penny stock. Check here http://trade-pennystock.checkhere.info
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Those are all good mutual funds. I would choose a different allocation among them (more equities, less bonds) given your young age, but that's a matter of opinion. Read "Investing For Dummies" - it's an excellent overview for newbies. Then, if you want more in-depth info on mutual funds, read "Mutual Funds For Dummies." I have both of those on my bookshelf.
Try http://bond-yields.com they are great for income investors.
I am 32 years old. My father passed away and left me some cash. I would like to invest some of it but reality is I know nothing about investing. I have been reading about investing for people with no real knowledge and everything leads towards passive investing or index funds investing. I am about to meet with a Vanguard advisor who walked me online with the recommendation tool they have based on my level of risk etc. I want to start slow and learn. So I put one year investment, middle risk and return with $50,000 investment. tBelow is the portafolio allocation I was given. PLEASE HELP and let me know if this is a sound plan. I would hate to see my fathers hard earned money wasted away. I realize there is no guarantee in the market these days but my advisor said this is a good plan based on my needs and expectations. A side note, I am not trying to get rich overnight, just get on the wagon while I learn more about this monster.
thank you in advance for your comments.
21% $10,500.00 Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
9% $4,500.00 Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
56% $28,000.00 Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)
14% $7,000.00 Vanguard Total International Bond Index Fund Investor Shares (VTIBX)
*quarter End
VTSMX VGTSX VBMFX VTIBX
SEC yield as of 7/14/14 1.7% B 1.99% A 1.28% A
YTD as of 7/14/14 7.42% 5.76% 3.66% 4.48%
1 year 25.04% 22.34% 4.15% 5.47%
Expense 0.17% 0.22% 0.20% 0.23%
