If you’re are having trouble picking winning investments in this turbulent stock market, you are not alone. The state of the economy is shaky at best and the term recession is lingering closer each day. Picking a good investment is extremely difficult as Americans are facing fear and hesitation as to what the future economy will bring. With this said, there is one investment that remains a great choice even in the toughest of markets: Vanguard 500 Index Fund Investor Shares (VFINX).
If you are not familiar of what an index fund is, it’s basically a mutual fund that tracks a stock index. In this case, the Vanguard 500 Index Fund tracks the S&P (Standard & Poors) 500 Index. This fund benchmarks itself against the S&P utilizing large-cap stocks.
To open up the Vanguard 500 Index Fund, you must deposit an initial $3,000. The typical investor for the Vanguard 500 should be a long-term investor who wants a low cost entrance into the stock market.
As of January 2008 here are the top 10 largest stock holdings for this index fund:
- ExxonMobil Corp.
- General Electric Co.
- Microsoft Corp.
- AT&T Inc.
- The Procter & Gamble Co.
- Bank of America Corp.
- Johnson & Johnson
- Chevron Corp.
- JPMorgan Chase & Co.
- Pfizer Inc.
Since the Vanguard 500’s inception in August 1976, it has a return of 11.75%. In a market like we are currently in, people would kill for this rate of return. You can purchase this index fund through Vanguard or by opening an online brokerage account such as TD Ameritrade.
Disclaimer: I am not a financial advisor and this is not investment advice. It is merely information about an index fund that has performed well over the past few decades.
