My recent edition of Money Magazine for June has a feature article entitled "The Only 7 Investments you Need Now." In this article the authors encourage investors to simplify their investments during these tough times. They feel that the "right" 7 does offer diversification so here they are:
* Blue-Chip U.S. Stock Fund - First Choice: Fidelity Spartan 500 Index (FSMKX)
Alternatives: iShares S&P 500 Index (IVV) and Selected American Shares (SLASX)
*Blue-Chip Foreign Stock Fund - First Choice: Vanguard Total Int'l Stock Index (VGTSX)
Alternatives: Vanguard FTSE All World Ex-U.S. ETF (VEU) and Dodge & Cox Int'l Stock (DODFX)
* Small Company Fund - First Choice: T. Rowe Price New Horizons (PRNHX)
Alternatives: Vanguard Small-Cap Index (NAESX) and Vanguard Small-Cap ETF (VB)
* Value Fund - First Choice: Vanguard Value Index (VIVAX)
Alternatives: iShares S&P 500 Value Index (IVE) and T. Rowe Price Equity Income (PRFDX)
* High-Quality Bond Fund: First Choice: Vanguard Total Bond Market Index (VBMFX)
Alternatives: Vanguard Total Bond Market ETF (BND) and Harbor Bond (HABDX)
* Inflation-Protected Bond Fund: First Choice: Vanguard Inflation-Protected Securities Fund (VIPSX)
Alternatives: iShares Lehman TIPS Bond (TIP) and T. Rowe Price Inflation-Protected Bond (PRIPX)
* Money-Market Fund: First Choice: Fidelity Cash Reserves (FDRXX)
Alternatives: Schwab Value Advantage Money (SWVXX) and Vanguard Prime Money Market (VMMXX)
So here are my talking points:
1. I know Vanguard is a great Mutual Fund compan, but are they really serious about how many times they recommend a Vanguard fund?
2. I noticed a good amount of ETF's in this list. In my opinion, it's becoming more evident that the ETF will continue to take market share away from the "traditional" mutual fund company. I won't get into it now, but there very distinct advantages with ETF's, which I think will bring about the eventual death to some mutual funds
