“Don’t put all your eggs into one basket” is one of the golden rules of investing. But what if one basket is all you need?
If you can find one mutual fund that is fully diversified, and suits your risk tolerance and investment objectives, and you believe in the wisdom of the set-it-and-forget-it philosophy, there is no need to buy anything else.
If this sounds interesting to you, there are a few Vanguard mutual funds you should consider.
The whole idea of diversification is to have a good balance of asset types — such as stocks, bonds and cash — and a variety of different securities within those asset types. Vanguard has a broad variety of mutual funds and ETFs that represent a range of categories, but we will focus on their great selection of balanced funds, or what some call “hybrid funds,” that enable an investor to effectively get several funds in one.
Some of these options at Vanguard include their target retirement funds, but balanced hybrids enable an investor to get a relatively fixed mix of assets and investment types (target funds shift to a more conservative mix over time). Therefore, our top-four list of Vanguard mutual funds will include the best options for aggressive, moderate and conservative allocations, as well as retirement income.
Let’s take a look at four of the best balanced Vanguard mutual funds for the “set it and forget it” investor: