<p>I currently have about 13.5K in my checking account and I want to move 10K of that into some investment. I currently have 11.3K in my IRA, about 2.5 in Fidelity Select Industrials, 2.6 in Fidelity Select Chemicals, and 6.2 in Spartan Small Cap Index. I also have 12.2K in Vanguard Life Strategy Growth Fund. The idea, at least right now, is that I want to start saving for a large down payment on a house in 3 or so years. I’m wondering if there’s something with good growth potential that can hedge against what I already have. </p>
<p>The Industrials is about 95% US Stock, 5% European Stock. The Chemicals is about 84% US stock, 13% European, 2% Canadian. The Small Cap is almost 100% US stock. </p>
<p>The Life Strategy Growth fund is comprised of:
56% Vanguard Total Stock Market Index Fund (US Stocks - mostly large cap)
23.9% Vanguard Total International Stock Index Fund (International Stocks)
16.1% Vanguard Total Bond Market II Index Fund (US Bonds)
4% Vanguard Total International Bond Index Fund (International Bonds)</p>
<p>A lot of my 401K is in Mid-cap US stock but it’s relatively small (only 1.2K right now) and I’m not intending to take that out before retirement. So I’m thinking it might be good to get the Mid-Cap Index Admiral stock fund at Vanguard, but I was wondering if you had any advice. I’m also wondering it is better for me to get more international stock, as all the small-cap, mid-cap, large-cap US stock seems to be highly correlated with eachother but International stock is less correlated with either. </p>
<p>OK, I’ll bite. I don’t think this is the best place to look for investment advice, but I would not put money that you want to spend in 3 or so years in stocks of any kind. I would look for a CD and park it. Rates around 2% right now. That’s better than my current Vanguard short-term bond fund is paying.</p>
<p>Talk with your Fidelity representative. Read Money magazine. Consider CDs with short maturities for having a safe place to park your money. Also- consider that you may well move on and not be staying where you are currently. Good to save the money but you may not be wanting to buy a house with it that soon. btw- I know some things about the OP which influences my advice.</p>
<p>Public libraries usually have a lot of books from various authors (often with various points of views) describing the various kinds of investments and the potential risks and rewards. You may want to start reading several of them to get a sampling of the various points of view (though there will typically be some areas where agreement is most common).</p>
<p>Try posting in bogleheads. You might get more answers. I don’t know any 3 yr CD offering 2%. I only see 5 yr CDs. You could look into laddering your CDs and also step-up CDs that allow you to step up to a higher rate for free if interest rate rises during the CD term. In hindsight, had you placed the money in certain stocks a year ago your money would have doubled or tripled. Now, I don’t know. </p>
<p>Which I had, but I didn’t even have the money to invest a year ago. But yeah, 10K in Fidelity Biotech a year ago would be 17.5K today. That’s insane to me. </p>
<p>I posted on bogleheads also but the suggestions there (as here) seemed to be to pay it safe, which isn’t what I’m looking to do. </p>
<p>I talked to my dad and his suggestion was basically to gamble with it. He said that there’s not much point in doing mid-cap because it’s all pretty correlated with general large-cap, and that either sectors or commodities was the best way to go. So I’m thinking $3333 in each of Fidelity BioTech, Healthcare, and Multimedia. </p>
<p>I glanced at Fidelity Biotech. It has regeneron, gilead, celgene and biogen. Looks good as long as you understand that they are trading at almost 52 wk highs. </p>
<p>Do you think it’s overvalued or is the sector really just getting that much better or what? </p>
<p>The biotech is the one I’m least optimistic about because of how much it’s increased in a year. Knowing nothing about the industry, does it sound overvalued? </p>
<p>When you get into talking about value vs growth I’m pretty out of my element. The concept of value to me is intuitive, the concept of growth is not.</p>
<p>I guess I should just ask, do you think that’s a reasonable move over other sectors? </p>
<p>I love the healthcare sector. I rolled over some 401k a decade ago into a healthcare fund IRA. So, yes, it has served me well. Now, if I am in my 20s, I would say yes, I would scale into a healthcare fund. Idk if the Fidelity Biotech or Healthcare is the best one with the lowest fees. I would compare it with other mutual fund families like Vanguard and T Rowe Price.</p>
<p>Well if you want to gamble put all or half into PFSW, a stock that appears to be on the rise. I view most stocks as a gamble, but continue to do well with this one.</p>
<p>I like the sector (e-commerce) and think this sector is on the rise in general. This stock was in the low 3’s fourteen months ago and is now around $8.50. They have some really high profile clients and more continue to sign up. But who knows? I have yet to be disappointed, but I am sure an investment advisor could give you a more sophisticated analysis.</p>
<p>“Value” investing basically means trying to bargain hunt, or buy things when they are on sale. In stocks, this typically means stocks low valuations like price/earnings, price/bookvalue, price/sales, price/dividend, etc… The concept can also be applied to selecting between different asset classes like stock versus bonds, or within other asset classes (e.g. whether or not to buy a house based on house prices versus rents).</p>
<p>“Growth” investing basically means trying to buy stocks that will grow earnings quickly, even if they may seem expensive (by the valuation numbers described above) now.</p>