On average you will get a 7% annualized return. There is no way you are going to get a 10% return is if you are a great investor/forecaster and change the investments as the economy changes.
If you really want to "invest and forget" with a single fund, then pick the appropriate target date fund. With those you get a mix of large/mid/small cap, growth/value, domestic/foreign and bonds. Most of the major fund companies offer them.
Contrary to what another poster says, "index funds" are not necessarily ETFs. There are index mutual funds - in fact, many of the target date mutual funds are index "funds of funds."
Go to Assetbuilders.com, CouchPotato Portfolio, if you want to "DIY".
Vanguard, TRowePrice and Fidelity have Target funds. 2040 or 2050.
If you want a "stock tip", consider Facebook (FB). The mobile market is expected to be huge. FB is positioned to make a ton. The "experts" expect a stock price increase of 50 to 300% in the next couple of years. (I bought some, but I have been wrong before)
SPY which is the S&P 500 has out performed all the indexes this year is a good one. QQQ is the NASDAQ 100, also a very good index to have. Another would be the total stock market from Vangard, and I do not know the symbol for that one. Indexes allow you to own the best stocks because they sell off bad companies and buy new, better performing companies for you. The first one 75% of your money SPY, the next 30% in QQQ, and the rest in the total stock market. You are very smart to use index funds vs mutual funds due to the lower costs. 12b1 fees and sales expenses will hit your mutual funds.
Long term, small caps outperform all other asset classes so try a few small cap value funds
vanguard index funds (low cost)
buy a couple high quality stocks and keep em (like PG, CL, UL, CAT, DE)
I am looking to open a roth IRA this year and am researching how I should invest. I want to invest now and forget about it for 40 years. Should I go with the S&P500? A small cap fun (because I have time), or possibly a foreign small cap fund (Again, I have plenty of time) I am hoping for a 10% annualized REAL return.
Thanks for any suggestions.
