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Title: Vanguard Funds SCREWED ME With No Reach Around: A Lesson in Why You Should Focus on IRAs and 401Ks
Introduction
Investing in mutual funds is often considered a safe and efficient way to grow one’s wealth over time. Vanguard Funds, one of the world’s largest investment companies, has long been known for its low-cost index funds and reputable management. However, there are instances where investors feel let down by their decisions, their performance, or unforeseen circumstances in the market. This article aims to highlight the importance of diversifying investment portfolios and focusing on individual retirement accounts (IRAs) and employer-sponsored 401Ks as an essential safeguard against unforeseen setbacks.
The Disappointment with Vanguard Funds
Vanguard Funds has built a solid reputation for its conservative investment strategy and low expense ratios. Many investors have trusted the company to manage their money prudently and generate reasonable returns. However, it is essential to understand that investing in mutual funds, including those offered by Vanguard, always carries some inherent risks.
The recent market downturn brought on by the COVID-19 pandemic severely impacted the performance of various investment portfolios, even those managed by reputable companies such as Vanguard. It is during these times that investors feel the sting of losing a significant portion of their hard-earned money, leaving them questioning their investment choices.
Relying Solely on Mutual Funds: A Risky Strategy
One of the lessons that can be drawn from this experience is the importance of diversifying one’s investment portfolio. Relying solely on mutual funds exposes the investor to the performance of the broader market without adequate safeguards. By diversifying their investments across different asset classes, such as stocks, bonds, and real estate, investors can mitigate their exposure to a single investment’s risks.
The Role of IRAs and 401Ks
Individual retirement accounts (IRAs) and employer-sponsored 401Ks play a significant role in providing a safety net for investors, especially during challenging times. Contributions made to these accounts are tax-deductible or tax-free, depending on whether they are traditional or Roth IRAs. Moreover, employer 401Ks often come with matching contributions, essentially providing free money towards retirement savings. By taking advantage of these retirement accounts, investors can build a more comprehensive and diversified investment strategy.
Tax Advantages and Compound Interest
One of the key benefits of IRAs and 401Ks is the tax advantage they offer. Contributions made to these accounts are either tax-deferred, meaning they will be taxed upon withdrawal, or tax-free, ensuring that no taxes are levied on withdrawals. Additionally, the power of compound interest plays a pivotal role in helping investments grow over time. By contributing regularly to these retirement accounts and allowing the investments to compound, investors can significantly enhance their wealth over the long run.
Conclusion
While Vanguard Funds may have disappointed some investors during the recent market turmoil, it is crucial to remember that no investment is entirely risk-free. Diversification is key, and focusing on retirement accounts like IRAs and 401Ks provides a safer and more stable long-term investment strategy. By regularly contributing to these accounts, and taking advantage of tax benefits and compound interest, individuals can secure a more stable financial future despite temporary setbacks in the market. Always consult with a financial advisor and carefully assess your risk tolerance before making any investment decisions.
hi chris, this happened to me (vanguard target retirement 2040), would LOVE to hear your thoughts for a strategy on how to pay the tax-man this spring. what i've done is started to SELL shares of my vanguard target fund, to generate liquidity to pay the bill. vanguard gives different options 'sell lowest cost, highest cost, or 'average' cost of shares,' and i think with my first sales chunk, i chose 'average.' anyhow, as someone who thought they were doing the right thing, i also feel screwed by vanguard (bogle would be ashamed!), would love your thoughts on a strategy!
Dude, what’s in that box?
You are painfully not funny
Thank you for teaching me something today. ✌️❤️
Just buy the spy
Yeah all my stuff is in my Roth except for my zero fee total market fund in fidelity (taxable acct) these people will find any way to screw people over. PS: Schwab is the best
Kevin was on tv news yesterday so strong man he is not backing down as you say many times
Schwab has cheaper target date funds
Lesson of the day: admit your mistakes and don't dollar average on them lol
This video has nothing to do with Jeremy. Stop gritting
Meet Breath doesn't want that smoke. Highly doubtful he wants a debate. You proved your point.
You probably already know this, but you can open custodian roth and ira accounts for your kids. You can transfer that account slowly into those accounts. Appreciate the videos.
Lol I'm in the same boat. You should speak about the Vanguard Roth IRA you allowed to invest $6,000 per year but if you have a 401k from work that allows you to pay after tax money. You can transfer those after tax money to the Vanguard Roth IRA allowing to contribute more the the $6000.
I tried to warn you but you didn’t listen
Jeremy is gasping in that pose after seeing me – or maybe a reflection.
Great info Chris! My funds are in my ira, but I was thinking of adding some to my trading account …but maybe I'll just stick to ETF'S.
Ask your local advisor about SMAs ( Separately Managed accounts). No cap gains distributions and tax efficient investments. It’s basically a mutual fund that buys the actual stocks in your account rather than pooling it in with everyone else. You have your own cost basis. Fideltiy has one that mimics the SPY and costs .65% (a bit more expensive than an etf). But can save a ton in taxes over the long haul in a taxable account. VT and mutual funds are great for tax advantaged accts like Strong man says. If you ever wanna interview me I can talk about it. I was a former advisor. Now manager of advisors. I HATE THE GRIFTERZ!
Very disappointed in the size of my face in your thumbnail
I bought something special for you, by the way.
Watch my channel tomorrow.
“Holy smokas, that ain’t no jokas!”
I had a stupid year last year. I invested 7k made 40k worth of trades and have to pay gains on 3.5K. Re-evaluating this year. I don't think I made 3 trades so far this year.
Meek kevin 5% in gold lol so about 1 million lol did you see his flip flipper video? How have you not reacted!?
What are your thoughts on PLTR?
Buying more VT under $100. Ruuuuuooooooo!
Woooow, should have just listened to Stink Blow and his TEEEEZLA cat
Do you think it’s better to auto reinvest, or build cash with the dividends and add when the market tanks?
You just made the case for why no one should buy these trash target retirement funds.
WHY NOT INVEST IN A LISTED EXCHANGE TRADED VANGUARD FUND?
See Strong Man. You have a go at Peter Schiff, you get beclowned. Called it 😀
Lefufu getting them cheeks pounded.
You're jackin my flipflaps!!
If Russia decides to invade Ukraine over the weekend what comes first, A JUICY DIP or SOME DRAFT LETTERS? :’D
The US market is so overvalued that even Vanguard's passive ETF sold.
Rob Berger did a great video about this also about 2 weeks ago. I highly recommend watching.
Another great learning lesson. Thank you Strongman!
These distributions happens every year maybe not in the target date funds but active manage pays massive distributions you can know months before they pay. ❤️ 401k