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The 3 Best Vanguard Funds for a Prosperous Fourth Quarter

VDAIX, VBINX and VGHCX are some of the best Vanguard funds

Source: StockSnap.io

Vanguard funds are designed for long-term investing, but tactical investors can also add exposure to certain funds in the short-term to juice portfolio returns. Now is a good time to look at the best Vanguard funds for the fourth quarter.

The 3 Best Vanguard Funds for a Prosperous Fourth QuarterAlthough uncertainty and volatility are likely to linger through year-end, stock prices could very well move higher during Q4 2016. What has investors a bit nervous is uncertainty over interest rates and the U.S. presidential election.

But even with a bit of a shaky foundation there’s still room to grow for a handful of high quality Vanguard funds in this environment.

So with a backdrop of uncertainty, along with a few pockets of potential to capture some gains, we have three unique ideas for investing with Vanguard funds for a prosperous fourth quarter 2016.

Vanguard Funds for a Prosperous Q4: Vanguard Dividend Appreciation Index Fund (VDAIX)

Vanguard Funds for a Prosperous Q4: Vanguard Dividend Appreciation Index Fund (VDAIX)Expenses: 0.19%, or $19 for every $10,000 invested
Minimum Initial Investment: $3,000

Dividend stocks can be good bets in volatile environments and one of the best Vanguard funds to buy for the fourth quarter is the Vanguard Dividend Appreciation Index Fund (MUTF:VDAIX).

Although some dividend stock funds, such as utilities sector funds that are proxies for bonds, may be weak in Q4, a fund that holds high quality dividend stocks like VDAIX top holdings, Johnson & Johnson (NYSE:JNJ), Microsoft Corporation (NASDAQ:MSFT) and PepsiCo, Inc. (NYSE:PEP), can outperform the S&P 500 through year’s end.

VDAIX has already shown its resilience in the 2016 market environment with an 7.8% year-to-date gain, which compares to 5.6% for the S&P 500. This momentum could continue for the remainder of 2016 and beyond.

Vanguard Funds for a Prosperous Q4: Vanguard Balanced Index Fund (VBINX)

Vanguard Funds for a Prosperous Q4: Vanguard Balanced Index Fund (VBINX)Expenses: 0.22%
Minimum Initial Investment: $3,000

If you don’t want to make any real bets on what types of funds or assets will outperform in Q4 2016, one of the best Vanguard funds to hold is the Vanguard Balanced Index Fund (MUTF:VBINX).

VBINX holds a moderate balance of approximately 60% stocks and 40% bonds that can participate in the market’s upside potential, but still hold up if stock prices turn south in an uncertain quarter.

The stock allocation consists primarily of large-cap stocks like Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), and Microsoft.

Not only is VBINX a balanced way to play Q4, it makes an outstanding core holding or a standalone fund for long-term investors.

Vanguard Funds for a Prosperous Q4: Vanguard Health Care Fund (VGHCX)

Vanguard Funds for a Prosperous Q4: Vanguard Health Care Fund (VGHCX)Expenses: 0.36%
Minimum Initial Investment: $3,000

If you’re looking for a contrarian idea for the fourth quarter, the Vanguard Health Care Fund (MUTF:VGHCX) should make the top of your list of choices.

After the double-whammy of the bio-tech fallout and fears over Hillary Clinton’s negative rhetoric on drug prices, health sector stocks could be trading at a low and possibly ready for a turnaround.

Bio-tech stocks could still have downside pressure from nervous investors selling shares, but pharmaceuticals could be oversold and ready for a bounce up.

Medical device makers and hospital groups can still do well in the current environment and this could benefit a fund like VGHCX, which has a good balance of all kinds of health sector stocks like top holdings UnitedHealth Group Inc (NYSE:UNH), Allergan plc Ordinary Shares (NYSE:AGN) and Bristol-Myers Squibb Co (NYSE:BMY).

As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. His No. 1 holding is his privately held investment advisory firm in Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.


Article printed from InvestorPlace Media, https://investorplace.com/2016/09/3-best-vanguard-funds-prosperous-fourth-quarter/.

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