The best Vanguard funds to buy now could very well be the ones that hold up better than the major stock market indices through volatile market environments, which will likely see a significant correction within the next few years. This makes the time between now and the year 2020 a crucial period to get right with your fund selection.
When making recommendations to clients for the best funds to buy and hold, I like to focus more on the intermediate-term periods than the 10-plus-year time frames. Although I like to keep a long-term outlook, I find that the smartest period of time to consider while choosing mutual funds and exchange-traded funds is the three-year period.
The last three years were relatively easy to forecast — stocks would likely outperform bonds and cash; therefore we overweight the stock fund allocation. But the next three years or so could easily contain a bear market. We are most likely in the mature phase of the business cycle with a recession coming within the next few years, if not sooner.
So within that context, we chose three of the best Vanguard funds to hold through the year 2020.