Mutual funds portfolio for Aggressive investment with 3 year time horizon?

Question

Hello,

Any suggestions on what to add to a Mutual funds (preferably no load) portfolio for Aggressive investment with 3 year time horizon?

Hypothetical amount would be U$ 20k to allow more options.

Answer 1

I'm with the previous answerer - 3 years is too short of a time horizon.  There's too much risk in the short term.

If you still want to gamble, then any diversified stock fund will do.  Yes, Vanguard has some great funds, and you can't beat their expenses.  I like the Total Stock Market Index fund, as well as the Index 500.

One way to hedge your bet - you may want to consider dollar-cost averaging into the fund, so you can spread your risk out a bit.  For example, invest the hypothetical $20K over 10 months ($2K at a time), or at least over 5 months ($4K at a time).  That way, if the market drops more during that period, you'll be buying more shares with the same amount of money.

I hope that helps.  Good luck!

Answer 2

Generally money that will be needed in less than 5 years, should be kept safe at the bank.  Having said that, I would use Vanguards' Total Market Index VTSMX.