$50K with Fidelity following options action

[stephenson]

So, ended up with about $50K with Fidelity following options action. Sitting there right now in muni MMF.

56 YO, and punching out in about two years. Most of current portfolio still equity oriented so would like to be more conservative with this ... but not silly

Anything interesting and a bit more aggressive than bond ladders - like MLPs?

Would like to keep with Fidelity, but, again, don't want to do this and be silly.

Thanks!

 

[Nords]

Anything interesting and a bit more aggressive than bond ladders - like MLPs?

So... what's your asset allocation?

 

[FIREd]

I invested some money in MLPs earlier this year and they have done very well so far. But I think they are getting a bit rich as an aggregate. People are chasing yield and buying MLPs as if they were CDs (even my MIL who knows nothing about investing said that I should invest some money in MLPs - her yoga instructor said so). I think that, if interest rates start rising, other investments will eventually become competitive with MLPs yield-wise and hot money will leave the sector. Then I'll buy some more. JMO.

 

[brewer12345]

I just puked out the last MLP position I had, since the yield chasers bid it up. Still looking for good places to put the money, since I am full up in my best ideas that are still cheap. But I would not be eager to buy MLPs right now given the run up.

 

[CCdaCE]

If this is hormone money... How about JNJ or GSK? Why are they so cheap? You have enough to meet the minimum of Vanguard Health Care Fund Investor Shares (VGHCX). It's down slightly, but hasn't fallen off a cliff like it did back in Nov. Single stocks aren't very conservative, I realize, but those seem to be decent deals that no one else is buying, yield-wise. The specialized healthcare fund is just a wild hair.

-CC

 

[stephenson]

Nord ... I'm so overwhelmingly equities - and, within that category, emerging markets, that I need some safety

 

[Nords]

56 YO, and punching out in about two years. Most of current portfolio still equity oriented so would like to be more conservative with this ... but not silly
Anything interesting and a bit more aggressive than bond ladders - like MLPs?
... but, again, don't want to do this and be silly.

Nord ... I'm so overwhelmingly equities - and, within that category, emerging markets, that I need some safety

"Safety" and "a bit more aggressive than bond ladders" are two different and mutually incompatible objectives.

You want safety? Go for an insured CD or Treasuries or I bonds or TIPS.

You want "a bit more aggressive"? You could read Larry Swedroe's "The Only Guide to Alternative Assets You'll Ever Need" and find out that maybe a nice blue-chip dividend-paying index equity fund ain't so bad after all. Vanguard does bond ladders better than almost anyone, too.

The root cause of your problem is that you don't seem to have chosen an asset allocation, and so you have no idea what you want. That means you also have no idea what you'll stick with (or buy more of) if the markets go south again. Maybe you need to pick one of Bernstein's AAs out of "Four Pillars", but wherever you get it you need to settle on an AA before you decide what to do with this money.

 

[stephenson]

Thanks, Nords ... I agree ... time to get serious - I'll get back at you with some metrics ...

 

[stephenson]

So, hacked through current AA to develop some basic metrics ... used the Morningstar fund type lists as basis ... broke into "Joint Tenancy" (i.e. non-retirement accounts) and "Retirement" (i.e. IRAs and 401K accounts). Non-retirement value is about 1/2 the size of retirement value.

JT
- Cash and Muni - 18%
- US Stocks and Stock Funds (mainly mid and large cap) - 58%
- Intl Stock Funds - 12%
- Precious metal (not fund) - 12%

Retirement
- Cash - 0%
- US Stock Funds (mainly large cap) - 18%
- Bond Funds (corporate high and low quality mixed about 50/50) - 20%
- Financial and Real Estate Svcs Funds - 6%
- Emerging Markets Stock Funds - 53%
- Intl Stock Funds - 3%

Emerging markets position developed at about right time, but am over rep'd there, now ...

Current situation
- Military retirement (somewhat inflation adjusted) (20 yrs)
- Will have non-inflation adjusted corporate pension (18 yrs) when I punch out a year or so from now
- Home within three years of being paid off
- One rental house within a year of being paid off (value is 25% of home)
- No car loans etc

Comments would be appreciated. It's time for me to sort it out and establish some personal guidelines for AA, how to rebalanced and when.

Thanks!

 

[DblDoc]

stephenson - I would also recommend posting this question over at bogleheads on this forum: Bogleheads :: View Forum - Investing - Help with Personal Investments. But first read this on how to format your post here: Bogleheads :: View topic - Asking Portfolio Questions

DD