Kiplinger's Personal Finance
Finance Money Investment Mutual Fund Image Credit: Kiplinger's Personal Finance
Finance Money Investment Mutual Fund Image Credit: Kiplinger's Personal Finance

Simplify Your Finances

Our strategies to tie up the loose ends of your financial life will free up both time and cash.

Streamline Your Portfolio

If you’ve got more tickers in your mutual fund portfolio than the local cardiac ward, it’s probably time to simplify. A portfolio of 20 stock funds will likely mirror the stock market as a whole—and if that’s the case, you could reduce your costs and save some time with a pared-down portfolio.

The one-fund option. If you like the simplicity of putting all your eggs in one basket, VANGUARD WELLINGTON (SYMBOL VWELX) is the basket to own. The venerable fund, launched in July 1929, invests in a mix of stocks and bonds and is a member of the Kiplinger 25—the no-load funds we like the most. Wellington has a value tilt, meaning it searches for stocks and bonds that Wall Street has undervalued. Currently the fund has 53.9% of its portfolio in U.S. stocks, 11.7% in international stocks and 31.9% in bonds. The fund has averaged an 11.1% gain the past 10 years, or about 2.1 percentage points more per year than the average fund in its category. An alternative: VANGUARD STAR (VGSTX), which invests in a diversified handful of other Vanguard funds.

Another solution is a target-date fund, which adjusts its holdings based on when you plan to retire (see “Building a Better 401(k),” on page 58). Simply choose the fund with the date closest to your retirement year. T. Rowe Price has consistently good target-date funds; T. ROWE PRICE

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