3 Funds You Can Hold Forever
There are plenty of advantages to reducing portfolio turnover, and these funds are great options to hold for the long haul.
Christine Benz: Hi, I'm Christine Benz for Morningstar.com. Warren Buffett famously said that his ideal holding period is forever. Those are good words for mutual fund investors to live by, too. Buying and holding investments for a very long time helps keep trading costs to a minimum. It will also help limit the drag of taxes on your taxable account. Trading infrequently also lessens the amount of time that you'll have to spend on your portfolio. Index tracking funds, whether traditional index funds or ETFs, are the ideal set it and forget it options. You won't have to worry about portfolio managers coming and going or the fund strategy changing. One index fund can cover the whole U.S. market.
Adam McCullough: IShares Core S&P Total US Stock Market Index, ITOT, is a great fund to own forever because it's very broadly diversified and very cheap. This fund only costs 3 basis points per year, so that means for every $10,000 invested, iShares only charges you $3 to own this fund. The fact that it owns nearly every stock in the U.S. market means that you don't have to shift between large-, mid- and small-cap stocks; you can own this one fund and own nearly every stock in the U.S. market.
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.