WHat is a low fee, low load mutual fund that makes sense to park about $8k in?

I have recently been sick and able to work less; I have very little reserve but would like to put that amount of money in a relatively low risk and low fee mutual fund. In this market, does a mutual fund make sense and any advice there? Asked by Mozef 1 month ago Similar questions: low fee load mutual fund makes sense park $8k Business > Financial Planning.

Similar questions: low fee load mutual fund makes sense park $8k.

It appears from the information you have provided that your current risk profile does not support equity mutual fund investment. But, since I do not have all your information, it is difficult to advise. Since you are currently working less, you do not have the luxury of taking a loss in a mutual fund investment and then waiting for the market to recover and make you whole again.

There are some mutual funds that have done well in this volatile market, but even those have had wild up and down swings. The problem comes when you may need funds, and that strong performing fund is in its down cycle. You never want to have to sell low and buy high.An example of a mutual fund that has done well is the Vanguard GNMA Fund.

One would think that a fund associated with Ginnie Mae would be a risk, but the fund has returned 6.87% over the past year and 7.62% over the last three years. This fund has been seen as a safe option. That's because Ginnie Mae doesn't purchase mortgages directly; instead, it insures bundles of loans backed by the Federal Housing Administration or the Department of Veterans Affairs.

Such loans—unlike Fannie and Freddie mortgages—have always been supported by the full faith and credit of the United States government, much like supersafe treasuries. As with other forms of government-backed holdings, investors tend to favor GNMA funds during specific market conditions. The funds, for example, typically perform best during periods of high interest rates.

The fund has returned 6.90 percent over the past five years and 5.66 percent over the past decade. http://money.usnews.com/funds/vanguard-gnma-fund/vfiixBut, only you know how liquid you need the money to be, and if you are comfortable putting money in the market.Com/funds/vanguard-gnma-fund/vfiix.

You are absolutely right that I can't do anything risky! Thank you so much for such a well explained response. Question: How are the fees for this and is it better tax wise to reinvest the dividends?

I'm sure I can look up the actual fund, request info but maybe you know offhand what the ramifications of pulling some out in -say-a year? Being this close to the edge is new for me, used to have lots of investments squirreled away! It's been a while and there is no way i'm putting it in a checking account of otherwise accessible place!

Plus, some yield would matter...Thank you again! Mozef 1 month ago .

The Vanguard GNMA fund has a $20/year account service fee if the account balance is below $10,000. The management expense fee is 0.19% plus a 0.04 misc expense for a total annual fund operating expense of 0.23%. That is 23 basis points.1% = 100 basis points.

Https://personal.vanguard. Com/us/funds/snapshot? FundId=0036&FundIntExt=INTI usually don't recommend to my clients to reinvest dividends.

There are a number of reason.1. Dividends reinvested put those dividends at risk should the value of the fund drop.(Not as much of a chance of this happening in the GNMA fund as compared to say a fund that has Netflix, for example as part of it's holdings. I usually recommend to my clients to take the dividends and put them someplace else, (Municipal bond mutual fund for example.) If done right the interest from the Municipal mutual fund can be income tax free.(It does count toward tax on Social Security benefits if you reach certain income levels.

)2. When you buy and hold mutual fund shares, you will owe income tax on any ordinary dividends in the year you receive or reinvest them. And, in addition to owing taxes on any personal capital gains when you sell your shares, you may also have to pay taxes each year on the fund's capital gains.

That's because the law requires mutual funds to distribute capital gains to shareholders if they sell securities for a profit that can't be offset by a loss. If you want to sell shares purchased by those dividends, make sure the ones you sell are over a year old so they are taxed at a long term capital gain rate.3. The tax on the dividends create what is called a lost opportunity cost.

If you did not have to pay the tax on the dividends each year, you could have invested the tax dollar instead. For example, if the dividends are reinvested, and the value of the fund goes up, those dividends have bought more shares or partial shares that generate usually a larger dividend the next year which creates more tax and so on. Most people usually do not consider the lost opportunity cost of tax because it is to much trouble to calculate or worry about.

But for a fund held a long time, it can add up to thousands of dollars. As I mentioned before, I can not recommend any fund investment choice to you as I have not seen your risk profile. You need to sit down with an investment advisor to see what fund might benefit your specific situation.

You might be better looking at a stable, (Johnson & Johnson, Altria, Wal-mart, ) dividend type of stock. Google; high paying dividend stocks. Stay under yields paying 5% and have consistently paid dividends for the last 10 to 20 years.

Reinvest the dividend. You only pay 15% on dividend yield income verses regular income tax rates. You can do this on e-trade for only $9.99. Make sure you mark reinvest dividend or it will not happen.

Reinvested dividends are free. E-trade is great to work with, if you call them they will walk you through the whole process. Mutual funds have hidden fees, principle goes up and down and unless you're in an EFT you usually don't get the 15% dividend tax rate you would get with an individual stock.

I know the stock can go up and down too but if you pick a reliable stock that's been around for a long time now is a good time to buy; most stock prices are down and even during 2008 2009 these stock continued to pay dividends and did not change as much as the most stocks did. Just a suggestion.

Oh, decisions decisions! And with so little money to play with. I would think stocks that established are so high there would be little gain.

Not sure about Google, Jay Z is planning to launch his own search engine. Could kill Google... ;) Mozef 1 month ago .

Oh, my bad, it's a scavenger hunt not a launch... I tend to question Walmart because I think so many of their electronics they rely on are going to hit the wall unless they drastically revamp. You give me a lot to think about. Thank you!

Mozef 1 month ago .

Could anyone recommend a good fee only financial planner.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.