Sun, Apr 20, 2014, 10:05 AM EDT - U.S. Markets closed


% | $
Quotes you view appear here for quick access.

Vanguard Total Stock Mkt Idx Message Board

  • ps56k ps56k Apr 16, 2011 6:52 PM Flag

    small, medium or large

    Can't decide where to put our IRS refund:

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • What is in your current portfolio? If you are just starting out, I would put it in VTSMX. If you are getting a refund large enough to make an initial investment into a Vanguard fund ($3,000) stop giving the government free use of your money and adjust your fed. tax withholding so that you owe (less than $1,000) and get free use of their money for a change.

    • "Some mutual funds will have a strict charter to invest only in the large cap stocks, or the small cap stocks, or something else which is very specific. We don’t think it’s a smart idea to have such a rigid charter.

      How would you feel paying 2 million dollars for a one bedroom condo, if two bedroom condos in same complex, having double the square footage, and with similar features, are available at 1 million dollars? Is it good idea to established a company with a restricted charter to invest only in one bedroom condos?

      Now, consider a market scenario where all large cap stocks are selling at a discount and all small cap stocks are very costly. I am sure that you will agree with us, that it will not be such a good idea to buy the small caps when you have the option to buy the large cap stocks which are selling at a discount. But mutual funds with a strict charter to invest only in small cap stocks will keep buying costly stocks even though it’s not a good investment.

      Some people might think that by allocating 50% in small cap and 50% in large cap, they mitigated this problem; but it’s even worse. If you combine two inefficient strategies, then taken together they won’t become better, rather it magnifies the problem." ( 2nd point in the checklist)

      I am copying the text from another site which answers your reply very well. I have been using the checklist to find good place to park money. You can check the some of the big problems related with mutual funds there.

    • put it into VWINX

47.07+0.09(+0.19%)Apr 17 6:24 PMEDT

Trending Tickers

Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.