Buying Everything
IN A FEW YEARS, my wife and I will have additional income, thanks to both Social Security benefits and required minimum distributions from our IRAs. Our thought: Any money we don���t spend from these two income streams we���ll invest for the long term. We wanted to keep this money separate from our other investments, so we opened a new joint brokerage account at Vanguard Group.
We decided to invest our extra cash in the Vanguard Total World Stock ETF��(symbol: VT). It���s a highly diversified portfolio and costs just 0.08% a year, equal to eight cents for every $100 invested. The Vanguard fund tracks the FTSE Global All-Cap Index and owns more than 9,000 stocks. It reflects the composition of the global market, with 58% of its assets in U.S. shares and the rest invested abroad.
We thought this would be a hassle-free way for an aging couple to invest their money in their later years. We don���t have to rebalance because the fund simply buys all of the world���s significant companies according to their stock market value. Since it���s an exchange-traded index fund and it has no bonds, it should be highly tax-efficient, with relatively little taxable income generated each year. We plan to invest in the fund slowly over time, which means we���ll benefit from stock market dips.
We decided to invest our extra cash in the Vanguard Total World Stock ETF��(symbol: VT). It���s a highly diversified portfolio and costs just 0.08% a year, equal to eight cents for every $100 invested. The Vanguard fund tracks the FTSE Global All-Cap Index and owns more than 9,000 stocks. It reflects the composition of the global market, with 58% of its assets in U.S. shares and the rest invested abroad.
We thought this would be a hassle-free way for an aging couple to invest their money in their later years. We don���t have to rebalance because the fund simply buys all of the world���s significant companies according to their stock market value. Since it���s an exchange-traded index fund and it has no bonds, it should be highly tax-efficient, with relatively little taxable income generated each year. We plan to invest in the fund slowly over time, which means we���ll benefit from stock market dips.
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