I don't know if money market funds called
"mid-cap index fund" have been discussed in this thread and its obviously too time consuming to wade through 2,438 posts to find out. I did do a search for that term and got no hits.
Anyway, I'm going to retire on Oct.30. We have about $37,000 in a bank savings account that we've managed to save over the past year and a half. Obviously, this is not the ideal place in terms of return on investment, so I'm looking to park it somewhere else where the risk is in the lower range and the return is hopefully in the higher range for mutual funds invested in stocks. We owe nobody anything, including on the house and vehicles. Our income upon my retirement should be enough for us to live comfortably, but only comfortably. After doing a lot of internet research, I've tentatively decided on a mid-cap index money market fund. For those of you not familiar with the terms, mid-cap means the fund invests its money in medium sized corporations, usually defined as those with a total shares value of from 1 billion to, depending on whose definition you use, 7-12 billion, dollars. An index is a list of companies in the field that the fund invests in. In this case, the field is medium sized companies. It can be all the companies, most of the companies, or a representative list of the companies. Again, the definition of the index depends on who's doing the defining. There are some well known and often used indexes. The theory behind a mid-cap index fund is basically that the companies are big enough that they have a low likelihood of failure, because they've moved out of the small company stage, and small enough that they are still in the innovation and up and coming stage and have room to grow. Over the past 20 years, mid-cap index funds have performed admirably. The fund managers simply invest the funds in the companies listed in the index, either by investing the same amount in each company, or investing in each company an amount proportional to the size of the company.
I want a fund that's well known, been around awhile, well run, has a good reputation, has minimal fees and costs charged to the investor, and has a good track record over at least the past 8-10 years. After looking at a lot of mid-cap index funds I've tentatively decided on the Vanguard Mid-Cap Index Fund. We do not plan to use the fund to supplement our income. We'd like to leave the money there, with any returns reinvested in the fund. We'd only sell shares to fund an emergency that we can't otherewise pay for or, perhaps, a major discretionary expense that we cannot otherwise afford. My question to you guys is: What do you think of mid-cap index funds in general and my particular choice of such a fund? Here's a link to Vanguard's page on their fund. As you can see, the return on investment has averaged 11.47% over the past 8 years since the fund was established:
http://flagship2.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0859&FundIntExt=INT
