Is there a best Mutual Fund for a retired upper middle classed couple?

Question

On a scale of 1-10 we're willing to take a #5 level risk.

Answer 1

Since you're both relatively young retirees (at middle age), you have a particularly difficult challenge in that you'll have to outpace inflation since you'll be living longer in retirement, yet also focus on capital preservation because you won't have the luxury of waiting out a prolonged downturn to recover.

I suggest that you look at Vanguard, T Rowe Price and Fidelity. Each of these fund families offers a good variety of retirement funds designed for each stage of life. All of the funds are no-load and carry fairly low expense ratios. Of the three, T Rowe Price tends have the most aggressive asset allocation and Vanguard the most conservative, with Fidelity somewhere in the middle. Look at them all and see what fits your goals and objectives. Good luck!

Answer 2

You're looking for safety it would seem but you need to ask yourself the questions as NC posed.

What is your goal? I think you're looking to maximize your income without losing much if any of your principle.

To maximize your return you may look for a Lifecycle fund that represents the year you retired. For example, you might be able to find a Lifestyle 2006 or something close. These funds will typically have a 40/60 split. This means 40% Stocks and 60% Bonds. This will increase your chances for getting a decent return (around 6% or so being conservative) and limit your loss exposure. You can increase your return a bit if you increase the risk (ie increase the stock percentage).

You may also want to research an Immediate Annuity for 10-20% of your cash. (NOT A VARIABLE ANNUITY). What this will allow you to do is create a consistent income. For the other 80-90% look for a decent fund or funds that fit your risk tolerance. Some rules of thumb you may wish to apply:

1) Never pay more that 1% in Management Fees for any fund. There are a huge number of funds to choose from in this category so this should not be an issue.

2) Never pay a load. If someone offers you a Class A, B, or C share fund I would suggest researching very carefully as these funds carry loads which means they charge fees on top of the management fees. This ultimately eats into your return.

3) Take a look at some index funds for your core investment. They may not get the best return, but more importantly, they will not get the worst.

I've attached some information for you regarding annuities and a place to look at some mutual funds.

HTH

Answer 3

First of all, the fact that you are WILLING to take a medium risk doesn't mean that you are ABLE to do so. To be able to take this medium-level risk, you need most of your income needs taken care of, with the proposed investment filling in the variations in spending gaps from year to year. Is this the case?

Provided that it is, I would suggest investing in two funds rather than one. Medium-risk portflios should have a healthy mix of stocks and bonds. There are funds that invest in both stocks and bonds (usually called "balanced funds"), but they typically lag two-fund baskets (stock fun + bond fund) in performance. Additionally, when you invest in balanced funds, you give the fund manager control over how much of your money is invested in stocks vs. bonds. With two funds, you can adjust your allocation as you deem necessary.

And, to answer your question, no, there is no such thing as the "best" mutual fund. There are some good ones, but even good managers make mistakes and underperform every once in a while. Also, even good (i.e., performing better than benchmarks) funds can be a losing proposition if you invest in them at a bad time. For example, today's interest rates and corporate spreads are low by historical standards and are more likely to go up than down. What is means is that for the next few years, you should stay away from funds investing in long-term bonds (especially corporates) and keep to the short end of the yield curve.

Answer 4

Go to your local library, look up MorningStar. Look up under Moderate Capital Appreciation the best mutual fund. That is great place for starters.

Answer 5

Seek an independent investment adviser. That's one who doesn't sell you their investment products.

You can expect to pay a minimum of $1000 for a thorough analysis. After that, expect to pay 1% per year and above for portfoilios of $100,000 and more.

You need help. I'd bite the bullet and pay.

Answer 6

consult an investment broker...what are your goals? growth? income? how you define 'best' depends on what your goals are and an investment banker can help you make the decision

Answer 7

Does that mean you are willing to lose 50% of your money?

Answer 8

No,buy gold or silver