Vanguard Retirement Savings Trust – Safe Investment or Not?
Is the Vanguard retirement savings trust a safe investment or a bad idea for most investors? Most financial experts have given the trust a good review and rating but this choice is not right for everyone. This investment choice may be perfect for many small business retirement plans and utilizes a strategy designed to minimize risks so it is considered fairly safe. It is important to note that there is no such thing as a risk free investment though, and this trust does carry a small amount of risk. The trust invests in short term fixed income securities that are rated high credit quality. The portfolio choices made are conservative with a tendency towards capital preservation and the portfolio holdings are arranged for maximum diversity and risk management.
The Vanguard retirement savings trust has the goal of maintaining a net asset value that is stable and seeks capital preservation without taking huge risks. Many financial advisers recommend the trust to clients because of the past performance and conservative nature, which can be ideal for retirement capital. The best IRA accounts offer a stable value which will not see a high level of volatility, but some experts argue that it is possible to play it too safe and lose higher returns in the bargain. The most important factor involved with acceptable risk levels will be your age when you start investing. If you start early then you will be able to absorb small losses, but if you start later in life you will generally want to be more conservative with your retirement capital because the losses will be more difficult to replace before you reach retirement age.
Whether or not the Vanguard retirement savings trust is a safe investment in your situation will depend on a number of factors. This choice is not ideal for investors who are looking for the long term capital growth of some options, but if capital preservation and risk minimization are what you want then this trust may be a good choice. Your retirement cash flow depends on the investment choices you make and the wrong investments can leave you without the financial resources you need after retirement. The key to determining which investment choice is best for your retirement and investing needs you will need to research all of the option thoroughly.
The Vanguard retirement savings trust has an expense ratio of 0.31%, which is low when compared with the expense ratio of many other funds. Susan F. Graef is the fund manager and it has net assets valued at $9.2 billion. This Vanguard mutual funds performance has been stable and consistent in the past and there is no reason to expect this to change. This fund only invests in investment grade products and the portfolio consists of AA- and above rated choices. Since every investor is different, with different strategies, goals, and acceptable levels of risks only you can decide if this fund is the right one for you or not. Careful research and fund evaluations can help you make the best investment decisions in your unique situation.