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What index fund is the most safe/reliable/overall best choice as a young investor?
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I am 20 years old and currently keep all my savings in a high yield savings account at my local bank. This get's me like 3-5% returns annually. However, I'm thinking of moving that money into some sort of index fund, but I'm not sure where to go or if there is any sort of strategy when it comes to picking one in particular. I am thinking right now of investing in the Vanguard S&P 500 ETF. What banks should I go to? Is there any sort of negotiating I need to do? What are the common fees?
Top Comment: If you open a vanguard account, vanguard ETF’s are commission free. VTI is my go-to because it’s more diversified than the S&P 500. VOO is vanguard’s S&P 500 ETF. The expense ratio for both VTI and VOO is 0.03%. Leave enough in the HYSA for six months of expenses as your emergency fund, and any other money you plan on needing in the next 0-3 years.
Anyone here decide to start their own fund
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I know its rare, I understand some strategies are capital constrained and require special infrastructure. But anyone say fuck it I am going to start a fund. I also know the chances of me getting downvoted, but wanted to know how life is going for you.
Top Comment: If I had enough money to start my own fund, I'd put the money in a saving account and never work again.
One week later: I Fund
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I caught a lot of hate about a week and a half ago in my post about a possible market trend change.
https://www.reddit.com/r/ThriftSavingsPlan/s/lCvbO7YAeb
The gap has now widened with I Fund at +7.1% YTD and C Fund at -.45%
What do we think now?
edit: i should have made this a poll. This went up to 5 upvotes then back down to 1 lmao.
Top Comment: Remind me in 20 years.
When you invest your money into a fund, where does it initially (literally) go?
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Can someone help me understand the basic mechanics/logistics of investing in a private equity fund, hedge fund, index fund, ETF, mutual fund, or other fund? I want to understand just to have a grasp of the industry, not because I am currently looking to invest in a fund with my own money. Specifically, my question is below.
Where does your money literally, physically (well, digitally) go once you invest in a fund? Do you write a check, or send a wire transfer, from your checking account to the fund's checking account, for the fund managers to pool from when they make investments?
Top Comment: Let’s say you put money into “Reddit Investment ETF”. Reddit Investment Advisor LLC (RIA) receives your cash they direct your cash to a CUSTODIAN BANK (StateStreet bank, BNY Mellon, etc) then your cash goes into the share creation process and your cash is converted to 1 share of RI ETF. That share is recorded at CUSTODIAN BANK. The whole point is the investment decision matter does not and never should be holding your money in an account that is controlled by the investment company. This is to prevent shit like Maddoff or FTX happening.
The pros and cons of starting your own fund
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Context: a longtime business acquaintance (and generally, I'd say he's a friend) of mine recently asked me if I'd be interested in starting a fund with him. We'd be co-GPs, the thesis would fit into our areas of expertise, and I think it would be great to work with him. I think our perspectives on life, family, and even investment approaches line up (but these are all things we'll test one another on before we make the jump).
I'm currently a Partner (non-GP, but junior) at another fund. It's pretty clear that the carry upside, quality of life, ownership and autonomy, etc. would be much higher if i did my own thing, and I've always aspired to start my own company (or build alongside someone else), but I don't know if I'm counting for all the risks of leaving an established fund with a solid reputation underfoot.
I suppose I'd like to crowd ideas from folks in this sub: what would be the important considerations for you if faced with a similar scenario. And what may pop up as the biggest risks from your point of view?
Thanks for humoring me.
Top Comment: I think you've laid out the Pros pretty effectively. It's standard practice to go from established fund to starting your own so there's no reputational risk at all. Actually riskier if you don't do it lol. Some cons to consider: Unless you already have LPs committed be prepared for a *long* grind fundraising during which there's no income, only expenses LP management can also be a grind especially until the "good news" years hopefully later in the fund Standard disclaimer that it's not easy generating good returns in venture, and especially for small funds (so you'll likely need to raise fund II, III etc -see comment on fundraising grind) The commit level of your own fund is 10-15+ years vs being a junior member of an established fund (this can be a pro of course, just a big decision) I'm assuming you are smart/talented, but think about the strength of your own network/reputation (ie dealflow) vs drafting behind the strength of an established brand. Again, not a con but worth considering. Is this business acquaintance a VC as well? Not really cons, more things to consider which I think is what you're looking for.
Good mutual fund opportunities right now?
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My parents gave me a "learning" portfolio in which I've so far invested in VDIGX, VTSAX and VFMXX. I'm trying to add approximately $5000 of investment, do you recommend increasing my investment in any of those 3 funds or is there another fund that's a good buy right now?
Top Comment: The important part about the three-fund portfolio is not the count of three, it's the three asset classes: Total US, Total International, and Bonds. Make an investment plan that you can stick with regardless of what's happening in the market "now". Check out a target date fund glide path to get a reasonable starting point for an asset allocation that makes sense for your age. Of the funds you have: VDIGX: Despite dividend fandom , dividends are not free money VTSAX: total US, great. VFMXX: this is a money market fund, a cash equivalent, not invested.
What are the best funds to let ride?
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I’m 18 years old and have been working since 14. I’ve put almost everything i’ve made into savings accounts or stocks (about 20k at this point) with the help of my parents. Everything I own is mainly in US Energy/Infrastructure companies like Nextera and American Tower or high dividend stocks like British American Tobacco (aside for the 1k i put into a robinhood account on my 18th birthday to fuck around with). I’ve been lurking on this sub for a while and as I prepare for college and have become more future minded, everything here makes sense to me. I have a full ride to college btw so no concern financially there and I plan to continue to work during college.
My question is, what are/is the best funds? I’ve seen a lot of talk about why type a fund is better than type b or the difference between having money in one fund vs being diversified across multiple funds.
Any direction or input here would be great.
Top Comment: I retired at 57 years old. Investing doesn't have to be complicated or costly to be successful; simple & inexpensive is most effective. I invest 100% in total-market, index-based, low-cost mutual funds. Specifically, I use mostly Vanguard's Total Stock Market, Total Bond Market, Total International Stock Market, & Total International Bond Market funds. I've been investing this way for 35+ years. It's effective, simple, & inexpensive. My asset allocation (ratios of the funds mentioned) is based on my need, ability, & willingness to take risks. Market conditions are not a factor. Vanguard's investor questionnaire (personal.vanguard.com/us/FundsInvQuestionnaire) helps me determine my asset allocation. www.bogleheads.org/wiki/Getting_started has some great free resources to learn about investing. After a few hours reading the articles, and, especially, watching the Bogleheads Philosophy videos, most beginners can learn how to get better results than most professionals. Bogleheads is named after John Bogle, founder of Vanguard. Buying individual stocks or sector funds creates unnecessary & uncompensated risk; I avoid doing so. Index funds are boring, but better for making money. If I wanted to talk about my interesting investments at parties or wanted a new hobby, I might invest 5-10% of my portfolio in individual stocks. As it is, I own pretty much every publicly-traded company in the world; that's interesting enough for me. All of the individual stocks & sector funds are being followed by thousands or millions of other investors. Current prices reflect their collective knowledge of future expectations for each one. I'm a member of the Triple Nine Society, but I'm not smarter than all of them. If I found a stock or sector that looked like a bargain, the most likely explanation would be that the others know something I don't. I prefer mutual funds, but ETFs could also work well. The differences are usually trivial for a long-term investor, especially if they're the Vanguard funds I mentioned above. Actually, the Vanguard funds I mentioned above have both traditional mutual fund shares & ETF shares; they both represent a piece of the same fund. The funds I use comprise Vanguards target date funds and LifeStrategy funds; these are excellent choices for many investors. Using the component funds allows some flexibility that can have tax benefits, but also creates the need for me to rebalance them periodically. Expense ratios are slightly higher than for the components but are well worth it for many investors. Other companies have funds similar to the ones I own that would work well. I prefer Vanguard because they've been the leader in this type of investing for decades & because Vanguard's customers are also Vanguard's owners. I hope that helps! I'd be happy to help w/ further questions. Best wishes!
What are some funds that are good for the long term?
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I don't know if this is the right place to ask but here we go anyways. I'm new to the investment game and have been trying to do research on what types of investments to make. I have narrowed it down to 3 funds that are VOO, QQQM, and SCHD. What are your guy's thoughts on these. Are they good long term growth investments?
Top Comment: No. A. Why these 3, other than performance chasing based on recency bias? B. VOO is only US large caps. They've done great recently, which is a reason to be concerned about how they'll do in the near future. C. QQQ picks stocks based on which exchange they're traded on. PepsiCo and Coca-Cola - 1 is included, 1 is not, just because 1 trades on NASDAQ & 1 doesn't. Nice marketing gimmick for NASDAQ, but it's just extra, uncompensated risk for investors. D. SCHD focuses on dividends. This increases risk without increasing expected returns. There's nothing wrong with dividends, but there's no reason for an investor to focus on them 2. I retired at 57 years old. Investing doesn't have to be complicated or costly to be successful; simple & inexpensive is most effective. I invest 100% in total-market, index-based, low-cost mutual funds. Specifically, I use mostly Vanguard's Total Stock Market, Total Bond Market, Total International Stock Market, & Total International Bond Market funds. I've been investing this way for 35+ years. It's effective, simple, & inexpensive. www.bogleheads.org/wiki/Getting_started has some great free resources to learn about investing. After a few hours reading the articles, and, especially, watching the Bogleheads Philosophy videos, most beginners can learn how to get better results than most professionals. Bogleheads is named after John Bogle, founder of Vanguard. My asset allocation (ratios of the funds mentioned) is based on my need, ability, & willingness to take risks. Market conditions are not a factor. Vanguard's investor questionnaire (personal.vanguard.com/us/FundsInvQuestionnaire) helps me determine my asset allocation. Buying individual stocks or sector funds creates unnecessary & uncompensated risk; I avoid doing so. Index funds are boring, but better for making money. If I wanted to talk about my interesting investments at parties or wanted a new hobby, I might invest 5-10% of my portfolio in individual stocks. As it is, I own pretty much every publicly-traded company in the world; that's interesting enough for me. All of the individual stocks & sector funds are being followed by thousands or millions of other investors. Current prices reflect their collective knowledge of future expectations for each one. I'm a member of the Triple Nine Society, but I'm not smarter than all of them. If I found a stock or sector that looked like a bargain, the most likely explanation would be that the others know something I don't. I prefer mutual funds, but ETFs could also work well. The differences are usually trivial for a long-term investor, especially if they're the Vanguard funds I mentioned above. Actually, the Vanguard funds I mentioned above have both traditional mutual fund shares & ETF shares; they both represent a piece of the same fund. The funds I use comprise Vanguards target date funds and LifeStrategy funds; these are excellent choices for many investors. Using the component funds allows some flexibility that can have tax benefits, but also creates the need for me to rebalance them periodically. Expense ratios are slightly higher than for the components but are well worth it for many investors. Other companies have funds similar to the ones I own that would work well. I prefer Vanguard because they've been the leader in this type of investing for decades & because Vanguard's customers are also Vanguard's owners. I hope that helps! I'd be happy to help w/ further questions. Best wishes!