funds) of index funds and ETFs that are our favorites:
iShares Core U.S. Bond Aggregate (AGG): This ETF invests in investment-grade bonds and follows the Bloomberg Barclays Aggregate Bond Index.
Vanguard Total Bond Market Index Admiral Shares (VBTLX): An index mutual fund that follows the Bloomberg Barclays Aggregate Bond Index. The ETF version (BND) has a slightly lower expense ratio.
Vanguard Inflation-Protected Securities (VIPSX): This mutual fund, while technically not an index, largely follows the Bloomberg Barclays U.S. TIPS Index of inflation-protected bonds. Admiral Shares (VIAPX) has a lower expense ratio and a higher minimum ($50,000).
Vanguard Small Cap Value ETF (VBR): This ETF tracks the value companies of the MSCI U.S. Small Cap 1750 Index.
iShares Russell 2000 Index (IWM): This ETF tracks the Russell 2000 index of small-company stocks.
iShares Russell 2000 Value Index (IWN): This ETF follows the Russell 2000 Value index, an index of small-company stocks.
iShares Russell 1000 Index (IWB): An ETF that invests in the larger-company stocks that comprise the Russell 1000 Index.
iShares Russell 1000 Value Index (IWD): This ETF follows the Russell 1000 Value Index, a larger-cap value index.
Vanguard Total Stock Market ETF (VTI): An ETF that invests in small, medium, and large U.S. stocks.
Vanguard Real Estate ETF (VNQ): This ETF follows the MSCI U.S. REIT Index, which invests in real estate investment trusts. You can also buy this as a fund — Vanguard Real Estate Index Fund Admiral Shares (VGSLX).
Vanguard FTSE All-World ex-US ETF (VEU): An ETF that invests globally per the FTSE All-World ex-US Index, which includes about 2,200 stocks of companies in 46 countries, from both developed and emerging markets around the world.
Vanguard Total International Stock Index Admiral Shares (VTIAX): This index mutual fund tracks the FTSE Global All-Cap ex-US Index. The ETF version (VXUS) has a slightly lower expense ratio.
iShares MSCI EAFE Index (EFA): An ETF that invests to replicate the performance of the MSCI EAFE Index.
Assessing and changing your portfolio
Although we advocate doing your homework so you can buy and hold solid investments for the long haul, we do at times support selling when it’s appropriate. If you have investments that seem to be doing poorly over an extended period of time, try determining why they haven’t done well and look at making changes to your portfolio.
However, when assessing your current holdings be careful that you don’t dump a particular investment just because it’s in a temporary slump. Even the best investment managers have periods as long as a year or two during which they underperform. Sometimes this happens when the manager’s style of investing is temporarily out of favor. But remember, our definition of “temporary” isn’t measured in days or months; instead, we mean one to two years.
Losses can help reduce your income taxes. You can see immediate tax relief/reduction for nonretirement losses.
Consider opportunity cost. Consider what kind of future return that money could be providing you with if you switched into a better investment.
As you manage your portfolio:
Don’t become attached to your investments. Over the years, Eric has worked with many clients who have difficulty being objective with and letting go of investments. Just as we get attached to people, places, and things, some investors’ judgments may be clouded due to attachment to an investment. Even if an investor makes the decision to sell an investment based on a sound and practical assessment, his attachment to it can derail the process, causing him to refuse to part with it at the current fair market value. Attachment can be especially problematic and paralyzing with inherited assets.
Don’t let inertia become a problem for you. It wasn’t unusual for Eric to work with clients who have accumulated tens or hundreds of thousands of dollars in checking accounts. Folks who amassed their savings from work income were often fearful of selecting an investment that may fall in value. These people knew how long and hard they had to work for their money, and they didn’t want to lose any of it.
Конец ознакомительного фрагмента.
Текст предоставлен ООО «ЛитРес».
Прочитайте эту книгу целиком, купив полную легальную версию на ЛитРес.
Безопасно оплатить книгу можно банковской картой Visa, MasterCard, Maestro, со счета мобильного телефона, с платежного терминала, в салоне МТС или Связной, через PayPal, WebMoney, Яндекс.Деньги, QIWI Кошелек, бонусными картами или другим удобным Вам способом.
