franklin templeton income fund yes or no

[frank]

I was talking to a woman at the bank about interest rates and she told me I should get in to franklin templeton income funds c class. she said it would make about 4.75 in dividends. I am pretty much a cd kind of guy. I was wondering if anyone here knows or owns this fund and if you are satisfied with the income and the security going into the next few years. if you have it will you be staying in it? I know nothing about the workings of bond funds and was hoping for a little insight from some of you more experienced people. thanks

frank

 

[gcgang]

http://www.morningstar.com/invest/funds/53664-fcisx-franklin-income-c.html

This fund is a "level load" Class C share of a very good income fund. According to the above Morningstar, it consistently ranks in the top 5-6% in its category. It will no doubt elicit howls of derision on this forum as it has a load. A load is a commission to the person who sells it to you.

If you plan on holding a long time, and have over $250k to invest, you should probably pay the upfront load and buy the A shares.

If you are not familiar with bond funds, you should know that the value of the shares will fluctuate, as will the income you receive.


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[gcgang]

And it is not really a bond fund, as almost half of its current holdings are in dividend paying stocks.


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[frank]

gcgang: where did you find the stock information? I looked at the link above and it was only about 7.4%

 

[Animorph]

Looks fairly volatile to me. By no means a replacement for cash. Compare it to PTTDX (PIMCO Total Return), FGMNX (Fidelity GNMA bonds), AGG (iShares Barclays bond ETF). They have provided a smoother ride (check out 2007 - 2009). Or AMANX is one that I follow that has better performance and no load. I currently only have a little in FGMNX and nothing in the rest, as I normally do not allocate to fixed income.

 

[gcgang]

Click on portfolio, it shows AA. 35% US stock, 13% nonUS stock as of 6/30/14.


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[gozer]

The morningstar link under the portfolio tab appears to be where gcgang (had to edit the name) got the info. I did not have to sign in to my morningstar account to see the data so it looks like it is available to all.

 

[Chuckanut]

I am pretty much a cd kind of guy.
<snip>
I know nothing about the workings of bond funds and was hoping for a little insight from some of you more experienced people.

Two thoughts:

1.) If you invest in a bond fund or an income fund like the one you mentioned, you will no longer be just a CD kind of guy. Can you sleep well at night if your assets decline 10 to 30 percent and take several years to climb back up? Or will you be tempted to panic and end up being the guy who 'buys high and sells low?"

2. Since you know nothing about bond funds I am going to assume you also know nothing about stock funds. Learn about them before you do anything! You won't lose your shirt spending a few months studying the subject. Please do yourself a huge a favor and spend a month or more learning about what you may invest in. Please.

 

[Free To Canoe]

Lost almost 31% in 2008. I bet your CD didn't do that.

This fund is the same type as Wellesley (VWIAX) only not as good for many reasons.

 

[LOL!]

A big fat NO, simply from the fees. One can do better with lower fees.

Also, don't talk to folks at a bank about investing. That's a big no-no, too.

 

[LOL!]

As for income from an investment nowadays, rates are so low that one cannot get a rate above about 2% without risk. This is a pretty big topic in the investing world nowadays.

I think one should go with a decent passively-managed low-expense ratio bond fund. It could lose money, but so what? It is not like you are going to need the principal anyways since this should be a long-term investment.

See also: http://online.wsj.com/articles/when-stocks-and-bonds-yield-nothing-1407027928

But only you can decide how much risk you are willing to take. The problem is that risk can be hidden inside investments that one doesn't understand. You know the ol' saying "There is no such thing as a free lunch." This is exactly the situation where it applies.

 

[eta2020]

It is a high quality fund but within this class of funds Vanguard Wellesley Income fund (VWINX) maybe a better choice.

Neither one of them is my cup of tee.

 

[frank]

thanks folks for all the good advice. I think I will spend some time learning about funds.

 

[racy]

here's one source of info: Bogleheads