Hello,

I am 34, and just started out with investing.I thought VGSTX,Star fund would be a good one to start with.I do have invested in 401(k).I would like to know more about the next steps in investing.Is it better to stick with Vanguard and research funds withing or keep looking at Fidelity or TRP.I was thinking of moving my Star fund to a Target Retirement Plan 2035.Any kind of suggestions would be appreciated.Thanks. 

I've been with Vanguard since you were in diapers. My experience is they can be trusted and they have your interest at heart.

The answer to your question can get very complicated but there are a few simple questions to ask.

 1. What is your target? Retiring at 64, for example, or something closer.

2. How much time do you want to spend on investing?

3. What is you tolerance for risk? Does the current market look like a disaster or and oppurtinity?

Vanguard and Morningstar both have excellent educational material.

Sticking with Star for now (I've owned this before) is not a bad move. Then set aside some time to explore the education I've mentioned. If you don't want to spend the time, then you've answered Question 2 (above). That might lead you to the Target Retirement.

If you're not familiar with 'dollar cost averaging', look up that topic. The best strategy for a low involvement invester is periodic investments.

 I hope this helps.

 

Thanks Deriter.I did not expect to get reply so soon.Makes me feel comfortable that there are people to help out :)

To answer ur questions.

1.Yes I would like to retire around 60.

2.As for time spending on investing,I would say, be more like a mix between active and passive.I keep an eye on the market everyday,but do not spend a whole lot of time on researching the funds or stocks.

3.Well,the current market to me is an opportunity for investment as I know the market is going to turn around sooner or later,is just that the law of economics,so I am not too worried about that,since I also have time on my side.I want to know more about International markets...so far do not feel very confident on investing a whole lot of money on it especially after seeing what happened a few weeks back.

As far as my research goes,I would feel more confident on investing on index funds.

Thanks again. 

Ok.

You should define 'retire'. I'm retired but work (on what I like). Having a retirement nestegg let's you do this. With demographics what it is, retirement is bound to change by the time you reach 60. In fact, it's chaning as we 'speak.'

If you are not bored by financial stuff, I suggest parking your money in a hands off location and setting up a regular reading pattern. Morningstar is a great source. One thing you can do is set up a model porfolio and play with funny money. This can be done with Morningstar, Yahoo, Google, etc. at no cost. I also subscribe to Moringstar Practial Investor - a great learning tool. Don't forget to set up a monthly savings or investment plan. About 40% of the value of your retirement nestegg will come from what you invest in the next 10 years.

Index funds are good. Low cost and hands off. At this point, I'd say the broader the better, favoring equities. Vanguard Total Stock Market is well rated. There are also total global funds. Those may be a better deal in the long run. As you feel more confident, you can find more specific indexes or actively managed funds. That's what I did. Now I'm a very active investor, but I have the time.

Can anybody answer this:

If I decide to change my  fund and take the money out of VGSTX fund and put in any other  fund of my choice within Vanguard group how much will I be charged for that.Thanks 

I'm pretty sure there is no fee to transfer from one Vanguard fund to another. What will happen is your ability to invest in VGSTX may be restricted. They try to supress rapid trading activity.

 If you don't have an online Vanguard account, I suggest you get one. Since you have a Vanguard fund, access is free. You can make trades online plus have access to a lot of fund data and educational material.

 Probably the best thing to do to set up your account is call them. Their number is on your statement.

what do you think of the precious metals fund in the vanguard line up. will it continue to show the same earnings over the next 12 months?

Well?
about the only reason most of us "old timers" were (are) in Vanguard Index funds is?

There wasn't much else out there for us to invest in until the late 90's forward.. so they and Fido had the market cornered on M. Funds..  and the other's were So new and untested..

But? If I was starting out? ActiveManagedBalancefunds = AMBF's

I'd Go mostly *80%+) with AMBF's for openers and not Risk trying to Figure out all those other Index Funds and How much to Be in them etc..and let proven Pro's do the job for me.

I made this switch to them back in 98/99 & 2000 and sure glad I did.. saved My Retirement $ and My Butt..

As for VGSTX? You REALLY want to Loose over -60% of your $? R U a Masochist? LOL( just ck out how it did btwn 2000 thru 1st qtr of 03' ) It took the next 2+ recovery yrs of 03 & 04 to just get back to even!

and forget about the past 5 yrs... Mid /Small and Reits Did alot better for the past 8 and 10 yrs...

and forget about those Target Funds too..Notice they haven't been tested in a Bear either...giving investors a False Sense of security as you will..

What does one do?

First> Make up a Port of FPACX,OAKBX,PRPFX and PRWCX ( AMBF's)

Equally invested and Do the past 10 yr rtns and crunch the #'s at a per $10,000 invested basis..and look at the Port. Total $ value, not just the Rtns/Apy's..

and use that for your Comparision Model of A Port of funds and if anyother beats it by By at least + 3% apy? Give the other a try..

and pay particular attention to how any of those other funds Did in yrs. 98-2002..

The Problem with Index funds? They Ain't like they were yrs ago.. and they do terrible in Bear markets.. Which , IMO? Is key for Making $..ie: Preservation of Capital in Bear Yrs, since anyone can make Money in Bull Yrs..

Even me..LOL

and if you think you need to make More $ from your Investments than a 10-12% apy? You need to Save More, not take more risks..

Good luck! Hope you do well..