Fund for the rest of life..

[Brat]

Looking back at the last year the best I can say is that retirement investments were stress tested.

The international mutual fund portion took a serious hit but I am not inclined to sell them because I think ultimately that is where the growth will occur.

Now comes the rest of the portfolio. I believe in having 5 years of withdrawals in cash = and as I look over what we have I think it is time to do something more than leave the 3 years worth not in I-bonds into CDs or the like.

My inclination is toward balanced funds for the remainder however there have been times in this market I wanted a total return bond fund and a total stock fund instead. However, now comes the issue for a couple at the 'minimum required distribution' stage of life: why not Wellesley?? While previous returns are not predictive of future returns it looks like it has a high probability of supporting us into senility - better even than an annuity. At the present time we have some DODBX, much more OAKBX. Nuf said about DODBX, OAKBX is the only real competitor to VWINX.

Comments folks...

 

[DangerMouse]

I believe it is wise to retain some funds in international shares. Looking at my investments, I have a lot of funds invested in Australian mutual funds, and have to say my Australian investments have shown better returns than US investments. However, what is shocking, is if you look at the returns on most fund managers and it is obvious that we would have been better off keeping our money in the bank as the returns we could have made over the past 10 years staying in cash would have exceeded what we have earned on our investments with none of the attached stress. Our best performer YTD is the Vanguard Emerging Markets fund, up 17% for the year after horrendous fall last year. However, over 10 years it has been up 7.79%.

I think it is wise to keep a minimum of 5 years cash on hand. We have Wellesley and it has not been too bad for us.

 

[brewer12345]

I guess I would have to say that Wellesley is fine for a core holding, but its not enough. I personally would want to supplement it with commodities, emerging markets equities, non-USD bonds, maybe some timber, etc.

 

[Brat]

Well my international funds are split between one global and Asian-Pacific, the latter has a hunk of Australian commodities.

Going back to my question.. VWINX or OAKBX for life's late stages?

 

[brewer12345]

Well my international funds are split between one global and Asian-Pacific, the latter has a hunk of Australian commodities.

Going back to my question.. VWINX or OAKBX for life's late stages?

I am not sure that quite does it for diversification.

As for your question, it strikes me that there is little or no contest: VWINX by a mile. About a quarter the cost, less risk, higher yield and a much longer track record.

 

[Animorph]

I'd be happy with oakbx if I had to chose one. I haven't done a direct comparison with vwinx.

Like the others though, I'd really prefer having cash/bonds I could draw from directly in times like 2008, and maybe more international and small cap. Must be why I have so many funds.

I've been using oakbx, oakgx, oakex, and ryvfx as a small, more diversified equities portfolio. That might be what I'll end up with if I ever simplify.

 

[LOL!]

I am not fooled by balanced funds. The equities in balanced funds drop just as much and just as hard as equities in a stock index fund. The bonds in bond index fund perform just the same as bonds in balanced funds. If you need a balanced fund to fool yourself, then by all means go fool yourself.

I am happy to avoid balanced funds and invest more tax efficiently in the individual asset classes with lower expense ratio funds, to rebalance things whenever needed and to tax-loss harvest to reduce my present and future tax obligations.

 

[Gumby]

I am happy to avoid balanced funds and invest more tax efficiently in the individual asset classes with lower expense ratio funds, to rebalance things whenever needed and to tax-loss harvest to reduce my present and future tax obligations.

Nothing wrong with that. However, some may not want to do that much work and would therefore be content with a balanced fund. Chacun a son gout.

 

[ziggy29]

Nothing wrong with that. However, some may not want to do that much work and would therefore be content with a balanced fund.

True. Like the "lifecycle" funds, these are for people who want something relatively appropriate and diversified for their circumstances but don't want to pay an advisor or take an active role in their own slicing, dicing and rebalancing.

 

[nwsteve]

Brat
You may want to take a look at Jabax (Janus Balanced), Morningstar 5 star. Beats Oakmark and Vanguard YTD, close with Vanguard 1 yr but wins again on 3 and 5 yr.
Oakmark wins on 10 yr but took a real beating in last year or so--prob too much financials.
Shows a lot less volatility than Oakmark.
nwsteve

 

[Brat]

Tax efficiency isn't an issue as all the investments are in IRAs.

I looked at "life cycle" funds and found they didn't perform as well as Wellesley under our recent stress by any measure.

LOL!, that is what I meant when I said I thought about the best of bond funds and a total market equity index fund rather than going the balanced fund route.

What concerns me is what happens if I can't/shouldn't manage our investments down the road. Each of our children are very busy with their own family and business responsibilities.. at opposite ends of risk profiles. Both are very competent in their own way. I just don't want them to need to intervene. Does anyone else have similar concerns?

 

[Rich_by_the_Bay]

Wellesley always confuses me when it comes to AA (I do own some). I'm never sure to think of it as bonds on steroids, value stocks buffered by bonds, or bonds enhanced by value stocks.

I guess I'm too stuck on buckets to know where to assign it. For now it's tucked in with my Bucket 2 holdings, treated much like a balanced fund which needs a 7 year horizon.

But I was a little disappointed with how it performed during the worst of the recession. My intermediate bonds did much better.

 

[Brat]

I too use buckets which is why our current $ wasn't seriously hit. Now I am evaluating our holdings and thinking about the next 10-15 years.

Maybe I should use VWINX as my bucket 2 and an equity index fund for 3.

Did any of you catch Ray on TV recently? My heavens has he lost weight, he looks 15 years younger!

 

[WilliamG]

We have 30% of our portfolio in Wellesley and are very pleased with usually low volatility and the generous income distributions. We currently plan to opportunistically move from 50/50 to 45/55 stock/bond mix by moving a 30% allocation to US stock funds to balanced funds (Balanced Index in Roth and Wellington in IRA). Would like balanced funds to do most of the heavy lifting in portfolio re-balancing but this allows us to retain some diversification. Also hold and plan to continue holding 10% International and 5% REIT for diversification. 25% is in stable value IBonds, CDs, etc.
Might be a similar approach would simplify portfolio without going all the way to just one fund.

 

[unclemick]

After 40 years of investing brilliance - I threw in the towel - er sort of.

At 66 coming up on 4 1/2 yrs. from RMD retirement is Target 2015. The roughly 65/35 becomes 35/65 stocks/bonds when I do a phantom 25 times income from SS and non cola pension and lump the result with portfolio.

Now 15% is Norwegian widow stocks - resistance is futile, hormones are incurable - so I got to have some stocks to play with in case there are no swingers when I get to the rest home/ get tired of football/etc/etc - passive may be scientific but us humans got to play - at least a little.

Right now I'm spending the after tax dividend from those stocks - after RMD -??- don't know.

heh heh heh - full auto til I can't stand it anymore - then football and a few good stocks. .

 

[charlie]

I have mentioned this more than once, but that's what us old f###ts do.

I like a mix of Wellesley and Managed Payout (5%) to suit your risk tolerance plus some Templeton Global Income (GIM) for dollar hedging and
a sprinkle of REIT Index.

Many seem to shun Vanguard's Managed Payout Funds but I think they
have excellent diversification with a higher allocation to international (30%) than other Vanguard balanced funds (20% max). Welleslely adds
a large cap value tilt to the stock allocation.

Cheers,

charlie