Vanguard funds are synonymous with buy and hold investing because of their outstanding selection of high-quality, low-cost mutual funds and ETFs. These qualities make Vanguard funds ideal investment choices for long-term investors.
Perhaps the only disadvantage you’ll find with Vanguard funds is that they have dozens of funds to choose from, so you’ll need to spend some time doing research to find the best Vanguard funds for your personal finance needs.
The list below can help you get started with your Vanguard fund review, as it narrows the selection of Vanguard funds to the 10 best funds to hold for the long term.
Are You a Long-Term Investor?
Before buying Vanguard funds for the long term, decide whether you’re a long-term investor. If you talk with 10 different financial planners or investment advisers, you could get 10 different explanations about what long-term means.
Generally, investors with at least 10 years or more before they need to start withdrawing from their investment accounts fall into the long-term investor category. This also generally holds true for bond securities, like long-term bonds and long-term bond funds. So if you’re saving money for a vacation next year, you’re not a long-term investor and you should look for the best funds for short-term investments.
Retired investors make a common mistake with long-term investing by considering themselves short-term investors.
Although they might be making withdrawals to supplement their retirement income, they may easily have a life expectancy of more than 10 years in retirement. For example, the average life expectancy in the U.S. is about 78 years.
If you retire at 65, you still have 13 years to invest. Depending upon your sources of income and your overall financial picture, you’ll need to invest at least a portion of your retirement assets in long-term investments, such as stock mutual funds.