Stocks versus mutual funds

[Anonymous]

as the PP pointed out, you aren't investing directly in vanguard as a company. if they go belly up, they don't lose all your money because they don't have it. they have purchased assets for you.

(in addition, if a firm like vanguard goes belly up, we are all in trouble.)

you could buy one of their more aggressive funds and lose money (or stand to gain a lot), sure...

[Anonymous]

Sure, Vanguard firm can go belly up, but your index mutual fund will not. Vanguard firm only manages fund for you unless they steal your money from the index fund. My favor index fund is Vanguard Total Market. It has more companies than S&P 500. As a result, it has lower risk than S & P 500. However, it performs better than S & P 500 lately. You get the best of both world, low risk with high performance.

[Anonymous]

Anonymous wrote:as the PP pointed out, you aren't investing directly in vanguard as a company. if they go belly up, they don't lose all your money because they don't have it. they have purchased assets for you.

(in addition, if a firm like vanguard goes belly up, we are all in trouble.)

you could buy one of their more aggressive funds and lose money (or stand to gain a lot), sure...

I really don't know, but how is this Vanguard different from Lehman Brothers that lost all that money. NP and TIA!

[Anonymous]

Anonymous wrote:Sure, Vanguard firm can go belly up, but your index mutual fund will not. Vanguard firm only manages fund for you unless they steal your money from the index fund. My favor index fund is Vanguard Total Market. It has more companies than S&P 500. As a result, it has lower risk than S & P 500. However, it performs better than S & P 500 lately. You get the best of both world, low risk with high performance.

when i was young (and thankfully did not have much money to play with), i got into picking stocks for a couple years. that's out of my system and i just invest in vanguard funds now (well, other than my 401k, which offers relatively sucky options compared to vanguard). about half in a target retirement fund, and i have a couple of their aggressive funds that have good track records, just for kicks. autopay every month, and i don't waste any of my time thinking about that shit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:as the PP pointed out, you aren't investing directly in vanguard as a company. if they go belly up, they don't lose all your money because they don't have it. they have purchased assets for you.

(in addition, if a firm like vanguard goes belly up, we are all in trouble.)

you could buy one of their more aggressive funds and lose money (or stand to gain a lot), sure...

I really don't know, but how is this Vanguard different from Lehman Brothers that lost all that money. NP and TIA!

Vanguard is subject to different laws and regulations. Basically they are required by law to use your money to buy stocks in a trust fund and then deposit those stocks with a third party custodian bank. Vanguard the company then is paid a very small fee that they collect from the trust fund, but otherwise the company has no claim on the assets of the trust fund. Moreover, because the assets of the fund are not held at Vanguard, and are given a market value at the close of every business day, there is little chance of the kinds of problems that occurred with other financial firms. There is also $500,000 in insurance through the SIPC in the event someone at Vanguard were to try to illegally siphon money off from the trust funds.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I understand that Vanguard has the lowest fees, but does it really make sense to put all your eggs in the Vanguard basket? What happens if Vanguard goes belly up?

then diversify into other funds/types.

Such as? Everyone on here just buys Vanguard, apparently.

You can invest in other companies' index funds -- Dreyfus has a midcap index that's pretty good. Or you can invest in other ways that matter to you -- buy some shares in an ethical investment fund, for example.

[Anonymous]

at what point to do you cash out of mutual funds? I invested money in FSTVX but am not sure if I should keep it for the long term or get out with profit and invest in another fund.