Author Topic: Vanguard Star Fund  (Read 3885 times)


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Vanguard Star Fund
« on: January 17, 2014, 03:43:44 PM »
Has anyone invested in this fund? im thinking of using this for our emergency fund, or is the Roth IRA a better option?  where do you put your emergency funds?

SoCal Spartan

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Re: Vanguard Star Fund
« Reply #1 on: January 17, 2014, 04:47:11 PM »
When I was looking for advice on a Roth IRA fund towards the end of last year, someone here on the forums recommended STAR. I have been investing in that along with a traditional savings account with GE Capital as my emergency fund.

I recently began to invest more from the traditional savings account into STAR and have now fully funded for 2013 and 2014. I keep enough for at least 3 months in the savings account and put the rest in the Roth (until it's fully funded) as it will likely have better returns (especially in the long run). Hopefully, I'll never need more than 3 months worth of savings and won't have to touch the Roth money, even though the option is there. It helps to give some peace of mind while getting better returns.

I can't speak to your personal goals and situation though, so there may be better funds for you based on your needs.


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Re: Vanguard Star Fund
« Reply #2 on: January 17, 2014, 05:01:55 PM »
I've got a portion of my Roth IRA in that fund.
So far I've kept our whole emergency fund in cash (online savings bank), but am tempted to put a portion of it into investments (in which case I would use a Vanguard fund for that too).


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Re: Vanguard Star Fund
« Reply #3 on: January 18, 2014, 02:09:33 PM »
We've had our emergency funds in STAR for 20+ years.  Yes, I think it's good but it's expense ratio is higher than some other good funds.  I suggest comparing STAR, Wellington and Balance Index on the Vanguard website (we own all 3 of these funds in taxable &/or non-tax accts).


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Re: Vanguard Star Fund
« Reply #4 on: January 18, 2014, 05:40:12 PM »
Hi twinsmom,
A stock or bond mutual fund is not the place for a true emergency fund. If you had put your money in the Star Fund in October 2007 and an emergency came up in February 2009, about 30% of your money would be AWOL.

The only true emergency fund IMO is a daily savings account at your credit union or bank, earning around 0% presently. But at least the money would be there.

If your conditions are fairly stable (2 wage earners, good working car and no roof leaks), then the Star fund could be used. I've never had my money in that one, but I am familiar with it.

In the short term, the bond section might suffer due to the possibility of increasing interest rates banging down bonds. Also, we had a real good 2013. Stocks are considered by many fully valued, but by no means in bubble territory.

In my portfolio, I currently have about 25% cash. My near 60% in stock funds is about this old 63 year old can stand. Got the rest in bonds. Not too tasty as the reward doesn't match the risk.