I took out my money in this fund several months ago as it was dropping and put it into a money market account. Now I can get in at a much lower price. Do you think it is ok to get back in as I've got a good 20-30+ years going for returns (I'm thinking long term investment).
Absolutely. Indexing in a buy and hold mode is the only way to balance risk and return, despite all the "this is a trader's market" admonitions by Wall Street (which makes money if you trade). Just make sure you're diversified across both assets - stock, bonds, cash - and geographies - US and foreign. Current worldwide stock allocations are 45% US and 55% foreign I believe, Google that to confirm, whereas most people are too heavily weighted to the US.
You must not be a long term ivestor if you pulled your money out so quickly. Buy VTSMX or VASGX, add money periodically over time, and you won't be dissapointed in the results. Especially with the latest correction that's happened. 20 to 30 years of gorwth will put you in a nice position.
some numbers for thought:
this index fund has a 13 year return of 5.34%...of which 2% is dividends. After inflation, your real rate of return is around 1%+.....compare this to vbltx which has a 6.84% return over this same period with comparitively little risk.
The whole point of owning something like this is so that you can easily dollar cost average. If you pull your money out, then put it back in you are running a big risk over time. Big gains in the stock market historically happen in a relatively small time frame. My advice is to buy back in slowly so that you can average in, hedging against another big drop, and from here on out dollar cost average, because just about no one can make accurate macro predictions based on the crap we hear on the news, etc, you are much safer staying the course.
By Long term do you mean 15 to 20 years? If so , Yes, maybe, if the U.S. is still around by then. We are heading toward a socialist state so who knows whats going to happen, The Governemtn can actually seize money to keep itself alive.
I'd say this fund has a minimum of another 10% to shed. I firmly believe we will see VTSMX in the 18's and even lower.
I think something is wrong with it's price now. Why does VTSMX not lose more value when it's top 10 holdings keep getting slammed?
I know some will tell me that is because they are diversified. I'd say that is exactly the reason to wait.
When you hear the average American say "This mess is our fault. Our spending and foolish valuation of assets brought this on. We should stop blaming the president, the fed, the CEO's, pregnant teens and illuminati and come to terms with the fact that the world does not owe us a job, a house or cheap gas and get back to actually adding value instead of looking for that magic business that earns us money while we sleep", then VTSMX will be a good long term hold.
I think that the Vanguard Total Stock Market Index Fund is a great core holding. VTSMX has a great expense ratio of 0.18% and have low turnover and great tax efficency.
While we are all unhappy with the 10 year returns, when the market recovers it will benefit from the rebound in our broad US equity markets!
Happy Holidays to all!
Hilarious! You want it both ways - you state a 20-30 year window for a Vanguard mutual fund buy and hold, but you're already going in and out of things as a market timer. No doubt you'll be in and out of your investments for years to come (while getting dinged on expenses) if you don't get a good plan for your investments. Please inquire with T.Rowe, Fidelity, Vanguard, etc. financial services and they will steer you away from the big mistakes many investors make.