I remember traveling on a shoestring in my younger years. The youth hostels I stayed in certainly weren’t five-star resorts, but they did the job. I saved a penny (or two), picked up travel tips on what to see and where to eat, and always had a pillow to rest my head. Heck, I didn’t want to be sitting poolside; I wanted to be out exploring—so why pay up for an expensive hotel? (Or at least that’s what I told myself!)
I might be stretching things here, but index funds are a bit like youth hostels. They give you the basics of what you want or need, including diversification and tax efficiency, and they don’t charge an arm and a leg. While some active funds, like five-star hotels, are worth their higher costs, many aren’t.
Last week, I reviewed Vanguard’s actively managed foreign stock funds. This week, for all of you cost-conscious travelers and investors, I’m digging into their index funds.
First, if you’re looking for a fund that covers both U.S. and foreign markets, back in August I shared my views on Vanguard’s global stock funds. I also debated the merits of investing in foreign stocks here. (My advice: Holding some foreign stocks makes good portfolio sense—just don’t go overboard like Vanguard does.)
If you’re feeling a little jet-lagged by this long journey through Vanguard’s foreign and global stock funds, here’s where my bucks stop: