STAR Funds

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grandpadan
Posts: 23
Joined: Fri Jun 29, 2018 11:29 am

STAR Funds

Post by grandpadan » Sun Jul 01, 2018 5:16 pm

Any thoughts on STAR fund? VGSTX

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: STAR FUNDS

Post by retiredjg » Sun Jul 01, 2018 5:27 pm

It is a fine actively managed mutual fund that contains US stock, foreign stock, and some bonds. It's about 65% stocks and 35% bonds.

People here tend to avoid actively managed funds, preferring index funds because they usually have lower costs. If the STAR fund fits your desires, there is no reason not to use it. But there are now lower cost funds that might also suit your needs.

Austintatious
Posts: 802
Joined: Thu Sep 13, 2012 7:01 pm

Re: STAR FUNDS

Post by Austintatious » Sun Jul 01, 2018 5:45 pm

It's also worth noting that one can buy into Vanguard's STAR for a minimum amount of $1,000, the same lower buy-in amount available with their Target Date Funds. That makes a STAR and the Target Date Funds a notably less expensive start for investors just starting out at Vanguard, most of Vanguard's funds having buy-in thresholds of $3,000 or more.

dharrythomas
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Joined: Tue Jun 19, 2007 4:46 pm

Re: STAR Funds

Post by dharrythomas » Sun Jul 01, 2018 6:43 pm

Nothing wrong with STAR. I think it is about 62.5/37.5. Slightly better return than LifeStrategy Moderate Growth. Probably mostly because a sliver more stock, less international, and maybe a little cheap but quality stock picking.

grandpadan
Posts: 23
Joined: Fri Jun 29, 2018 11:29 am

Re: STAR Funds

Post by grandpadan » Sun Jul 01, 2018 7:04 pm

Is this fund kind of like fund of the funds? But why?

Austintatious
Posts: 802
Joined: Thu Sep 13, 2012 7:01 pm

Re: STAR Funds

Post by Austintatious » Sun Jul 01, 2018 7:17 pm

grandpadan wrote:
Sun Jul 01, 2018 7:04 pm
Is this fund kind of like fund of the funds? But why?
It's a fund that's actually comprised of more than one fund, in this case, 11 different Vanguard funds held in varying percentages. Go to this web page to see the funds and percentages.

https://investor.vanguard.com/mutual-fu ... olio/vgstx

Chaconne
Posts: 145
Joined: Sat Dec 15, 2007 4:18 pm

Re: STAR Funds

Post by Chaconne » Sun Jul 01, 2018 7:55 pm

I first invested in the STAR fund in 1988 as a first-time investor with $8,000. Never sold a share, always added $500 a month to it. It has treated me well, and I'll be sliding into a comfortable, if not opulent, retirement in a few months. That's not to say that it's right for you, but I have no regrets whatsoever, especially when I compare its performance to similar LifeStrategy and Target Retirement funds. Not that it's always been better than all of them, but its returns are competitive or more. One of my main considerations when deciding how to start out was SIMPLICITY. It remains a primary principle to me today, 30 years later.

In, fact I have one STAR as my SEP-IRA and one STAR as a taxable account, which I opened about 10 years ago. (At that time, I looked for a fund that would offer me more promise and peace of mind, but was unable to find one.) Those two STARs plus my Prime Money Market fund are all I've got. It is a fund of managed funds, but it is so broadly diversified that I almost feel like I'm indexing.

If I had it to do over today, I might go for indexing, LS or TR (which, of course, are funds of index funds). But back in 1988, indexing was still relatively a recent concept, and I just didn't have the confidence in it that I got from looking at a longer history for the STAR fund. By the way, current allocation is given as 62.35 / 37.65. There have been some discussions on it here, so be sure do a search if you haven't already. Best of luck.
-Bob

Austintatious
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Joined: Thu Sep 13, 2012 7:01 pm

Re: STAR Funds

Post by Austintatious » Sun Jul 01, 2018 8:04 pm

grandpadan wrote:
Sun Jul 01, 2018 5:16 pm
Any thoughts on STAR fund? VGSTX
grandpadan,

you might get more input from the group if you tell us a bit about why you're thinking about the STAR fund.

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CABob
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Location: Southern California

Re: STAR Funds

Post by CABob » Sun Jul 01, 2018 11:21 pm

The STAR fund used to be recommended on this forum regularly. It was and is a good fund for a beginner without a lot of money to invest since it has a $1000 minimum. At the time all of the other Vanguard funds had higher minimums. Now all of the Target Retirement funds have $1000 minimums and they have become the recommendation for beginning investors.
Bob

Exafchick
Posts: 133
Joined: Thu Nov 09, 2017 10:40 am

Re: STAR Funds

Post by Exafchick » Mon Jul 02, 2018 1:19 pm

I opened my Roth IRA with the STAR fund and haven't changed it in over 15 years. I, too wanted simplicity and diversification in a fund I could afford. STAR definitely fit the bill. It was also highly recommended in the Mutual Funds for Dummies book I was reading! I am a bit more aggressive in my 401k (100% equities) so my investments balance out to about 80/20. I have a guaranteed military pension so feel I can keep this allocation until I retire. I personally think the STAR fund is a great way to get started and once you read/learn more you can change it to something else. I never felt the urge to dump it.

goblue100
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Re: STAR Funds

Post by goblue100 » Mon Jul 02, 2018 1:40 pm

Here is a similar recent thread that might be worth reading for the OP:
viewtopic.php?f=1&t=251941
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

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