Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Fund recommendations for an 18 year old

What fund, ETF, or CEF would you recommend for an 18 year old who is new to investing?


  • From a January 16 discussion at MFO.
  • PRGSX HGGIX. Global, not only domestic stocks. Completely, stunningly great performance.
  • Two other global funds you might want to consider are: mggpx (MS) & pgirx/pgiix (Polen).

    The Polen fund is less aggressive than MS fund still with very good returns.
  • Do they have a goal and a plan to reach that goal or do they just want to make some quick money? Do they understand the risk(s) that come along with investing? IMHO the goal and the plan should come first, then one can select funds appropriate to that effort.
  • edited January 2021
    I prefer MIGPX over MGGPX, though both are great WS funds. MIGPX is much smaller and has shown consistently better TR performance over all periods despite higher ER and significantly higher turnover. That said, I would easily suggest either as an 18 yr old's first fund. Disclaimer: Heavy bias toward MS funds, among the best funds in several cats yet so under-appreciated.

    By the book though, any of a number of low cost, Total Stock Market Index funds would be the suggestion.
  • Couldn’t agree more that MS is under-appreciated.

    Their international and global equity lineups are excellent, as long as you don’t mind a little volatility, ex. MIGPX as stillers pointed out.
  • edited January 2021
    And an 18-yr old should learn to understand and embrace volatility as early as possible in their investing career. As one legendary M* poster used to routinely remind us, "Volatility is the price you pay for growth."

    Note: MS also has some of the very best LC, MC and SC growth funds as I've posted elsewhere. MSEGX could easily be suggested for the OP also, but the noted WS or Total Mrkt Inx funds seem best. Hard to go too far wrong with any of those.

    Aside: My mentor handed me Fido Magellan on a platter as my first fund for its glorious ride through most of the 80's. Then came Fido Low Priced Stock. They paved the way for early retirement, so this first fund choice can be very important over the long haul. Best wishes to the OP.
  • edited January 2021
    @Catch22 offered a good link for the discussion. Would have no hesitation with the funds @Crash mentioned above either.
  • edited January 2021
    Can't really answer that question without more information regarding investment goals and financial situation. Is this money for retirement or to pay for college for instance? If it's for the former it should be invested aggressively, the latter conservatively as the child is 18 and will need the money right away. Is this 18 year old on his/her own and this is all the money he/she has or is it play money his/her parents can give him? The former should be conservative despite his/her age, the latter aggressive. Does this child have any debts he/she should pay off first? Just because someone is young is not a strong indication of how money is to be invested.
  • edited January 2021
    @stillers - If you back out what has happened with the performance in MIGPX since the March 2020 downtown MGGPX has bested it over all time periods. Careful how you read those long-term tables.

    Edit to add: Mggpx is now closed to new investors now I believe however.
  • much discussed already, but I see no good arguments against QQQ and leave it alone for decades
  • edited January 2021
    Mark said:

    @stillers - If you back out what has happened with the performance in MIGPX since the March 2020 downtown MGGPX has bested it over all time periods.

    Well first, their TR performances are not all that different.

    I see your point and understand why one might argue it.

    But I disagree with the concept of creatively subtracting out any interim period or event in order to compare TR performances. The time periods and/or events happened and there's no going back on them. But wouldn't it be nice if we could?

    IF you subscribe to that concept, why not let's for instance then take out any/all periods that MGGPX outperformed MIGPX, or any market events that more negatively impacted MGGPX?

    IF you subscribe to that concept, note that MIGPX's TR YTD, past month and 3-months, interim time periods well after the March crash, are ALL DOUBLE that of MGGPX's. So the current allocations of MIGPX are still working doubly better than those of MGGPX.

    IF you subscribe to that concept, do you also plan to subtract out all future interim periods or events that more negatively impacted MGGPX?

    From another angle...Should an investor just ASSUME that eventually the effects of the March 2020 downturn will magically reverse at some point and MGGPX will get back to an outperformance period(s)? Feel free to do so, but my money is riding on MIGPX going forward.

    Either way, they are both IMO great WS funds and it's likely they'll both continue to outperform others in their cat in future periods.

    Not really looking for answers to those conceptual questions. Just noting that's my take on this concept that some investors like to sometimes apply to discussions about past performance. I trust it differs from yours and likely others, and I respect those opinions. But beyond what has been said about it so far, I'm not interested in a spitting contest over it so I likely won't comment further as I've got nothing more to add.

    Other than this...Another reason for my preference of MIGPX over MGGPX going forward is its use since inception in Dec 2010 of the incredibly experienced 6-member management team that is still in place over MGGPX's use of a single (albeit outstanding) PM.
    Mark said:

    Edit to add: Mggpx is now closed to new investors now I believe however.

    Despite this press release on MGGIX... appears MGGIX/MGGPX, while showing CLOSED at VG, is still OPEN at Fido. To wit, I mocked up a Fido trade for MGGPX that was accepted. I cancelled the trade and am not sure if it would have executed. The article does state "...there will be a few exceptions" to the closing. Interested investors may want to inquire with MS or Fido about its availability. If it is CLOSED, that would make the decision between the two for new investors a simple one.
  • Nope I don't subscribe to any of that. Recent performance has juiced their returns mightily is all I was saying.
  • Not to worry, it was a great exercise for me to help insure that my personal take on both of these funds is correct. YMMV on that.

    FWIW, as a bit of history, I owned MGGPX though much of its outperformance years, sold it around the time of the 2020 crash, and switched to MIGPX a bit later in 2020. Little did I know at the time what it was about to do. My primary reason for buying into MIGPX in lieu of MGGPX was their respective AUM and manager compositions.
  • @stillers: I appreciate what you’ve said when comparing MIGPX and MGGPX. The team at MS led by Dennis Lynch has a great record in several funds. The risk that Kristian Heugh is stretched too thin across several funds seems real to me. The only WS growth fund that has kept up with and even beaten MIGPX is the Baron fund, BGAFX. Maybe not coincidentally, Alex Umansky, the sole manager, cut his teeth at MS helping manage a handful of growth funds up until 2011 when he went to work for Baron. It makes a lot of sense to trust a team over the long haul, unless Heugh and Umansky can continue successfully.
  • edited January 2021

    Thank you for your GREAT additional detail - was not aware of some of it.

    And yes, the decision between one of the MS WS funds and BGAFX was a tough one. All excellent funds. But I chose MIGPX over BGAFX probably due mostly to my greater familiarity, experience and trust in MS funds, but could have just as easily selected BGAFX. With the likelihood that I will want to continue increasing my foreign exposure this year/in the coming years, BGAFX will stay on my radar and will likely be the next add.

    Bottom Line: It's great to have so many excellent choices in WS and Foreign funds these days, the best Foreign pure play of which I consider to be VWILX/VWIGX, a fund whose performance routinely provides upside surprises.

Sign In or Register to comment.