Jacobs: In the Vanguard

01/10/2003 12:00 am EST


Sheldon Jacobs

Author, Investing Without Wall Street, Five Essentials for Financial Freedom

Sheldon Jacobs is known as the dean of no-load funds. For 25 years, he has published his No-Load Fund Advisor. It is the only newsletter to earn recognition on the annual Forbes Honor Roll in six of the last seven years (through 2002). For his top pick for 2003, Jacobs chooses Vanguard Total, as a play on the overall market's trend.

"Our favorite investment for 2003 is the Vanguard Total Stock Market Index Fund (VTSMX). There are several reasons for this:

1) By allowing us to own the entire market, we consider this fund to be the ultimate 'no-brainer'. The only way you can go wrong is if the market goes down and never recovers. We think 2003 will be a good year in the market.

2) Since the new bull market hasn't really begun, it is difficult at this time to forecast which sectors of the market will beat the overall market. Until these trends develop, it's far more certain just to buy the overall market.

3) The fund has low expenses of 0.20%, which is less than one-seventh of the expenses of the average equity fund."

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