Would like to invest about $250,000 in a mutual/index fund for about 10 years. Intend to leave to family member as inheritance.
Well…take your pick. Between S&P and Dow Jones there are probably 100 different indexes available. I would split between a broad total stock market index like VTI or SWTSX and then a more concentrated growth index like VOO, SCHG, or IWY. Given the current valuation of the market, I would probably dollar cost average into your selections…
You might get more responses from a forum such as Bogleheads – they live for those kind of questions
For a long-term index fund investment I think the bigger the better. I’d go with VTSAX and/or VOO.
Since you can currently get 5% on a sweep account, you might want to deposit the $250k in it and buy into VTSAX or VOO in steps over the next six months or so.
Why do you keep asking the same question over and over again? If you’re really looking for help, you should engage the answers you get and provide more information until you get something closer to useful advice. Starting over seems like a waste of time for everyone.
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Of course, feel free to flag this to the moderators as unhelpful if you like, and maybe they’ll ground me…
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There’s a lot to be said for a low cost index fund. I’ve had vtsax for years. Stock market is very high so it would be advisable to dollar cost average, perhaps equal sums once a month for 12 months.
The definitive book explaining the superiority of index funds over the long haul (super low costs and tax efficiency) is “Winning the Losers Game” by Charles Ellis.
You could use a basket of ETF’s as well: SPY, EFA, EEM, QQQ. RSP is the market weighted version of the SPY. You could divide that money into each of these ETF’s as appropriate for your risk tolerance. Including a ETF such as AGG would give you fixed income exposure.
For that amount of money, I’d speak with a Fee-Only money manager. Otherwise, I’d buy the market, but use the spread method (Dollar Cost Average) and put it in by monthly amounts over the next year to 18 months. If there is a recession as some believe, then I’d buy heavier in the low periods. The market could be at a high right now, and I believe it is. Dumping all of it in now could be fatal. Go slowly. No one can predict the market or time it, but if you invest little by little monthly you’ll get the average.
I don’t think any of us can predict a recession or stock market gains/losses. With a 10-year time horizon, I would suggest investing all at once into a total stock market index (or S&P 500) making sure the expense ratios or fees are as low as possible (Vanguard, Fidelity, Schwab).
And if you don’t need the money yourself and are just leaving an inheritance, then you should set-and-forget. Over 10 years historically stocks outperform bonds and money markets. But if you’ll lose sleep if the market drops, then put it all in a money market or high-yield savings account or laddered CDs and, again, forget about it.
Final suggestion - start giving it away to your heirs right now. They may need the money more now than in 10 years. There are a lot of baby boomers in their 60s and 70s who are financially secure who are receiving inheritances from their deceased parents. They would have appreciated the money more in their 40s and 50s.
The individual giver gift tax exclusion amount is $18k for 2024. For a married couple that’s a total of $36k tax-free to the recipient(s.)
good advice