INVEST IN A DO-IT-ALL FUND
Whether you’re a brand-new investor or an old pro, corralling
a significant portion of your assets in the same fund can sim-
plify your financial life and give you a clear picture of what
you’ve saved and how close you are to meeting your goals.
With an asset-allocation fund, you get a stake in most
major investment categories without having to shuffle the
assets yourself. For example, FIDELITY FOUR-IN-ONE INDEX
FUND (SYMBOL FFNOX) holds four Fidelity index funds, with
an overall mix of 85% of assets in stocks and 15% in bonds.
The fund charges 0.11% of assets annually for a portfolio
that includes stocks of large, midsize and small U.S. com-
panies, shares of foreign companies in developed markets,
and corporate and government bonds. VANGUARD STAR FUND
(VGSTX)^ is more conservative, with 60% of the portfolio
in stocks and the rest in bonds. Star invests in 11 actively
managed Vanguard funds and charges 0.32%. The 15-year
returns of both the Fidelity and the Vanguard funds place
them in the top 25% of similar funds.
Target-date funds, like asset-allocation funds, hold a
diversified portfolio of stocks and bonds, but they shift
toward a more conservative asset mix as you approach
retirement age. VA N G UA R D and T. ROWE PRICE both offer
solid, low-fee options.
Investors who are more hands-on can build a diversified
portfolio on the cheap with exchange-traded funds. Just
two Charles Schwab ETFs—US BROAD MARKET ETF (S CH B) and
US AGGREGATE BOND ETF (S CH Z)—give you a piece of some
2,000 stocks and 3,200 bonds. The funds charge expense
ratios of 0.03% and 0.04%, respectively. RYAN ERMEYOur strategies to streamline
and simplify your finances will
free up both time and cash.
MONEY
MONEY MA
24 KIPLINGER’S PERSONAL FINANCE^ 05/2017