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I need Vanguard fund suggestions..
Old 10-06-2010, 10:54 AM   #1
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I need Vanguard fund suggestions..

I'm rolling over my IRA to Vanguard's...psssst...Wellesley fund.

I'm considering sweeping the dividends into another fund that will be considered a cash account. It will be six and a half years before I will make any withdrawals. Any suggestions on conservative funds?

Thanks...
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Old 10-06-2010, 11:10 AM   #2
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With 6.5 years to go, I would probably just reinvest in Wellesley and revisit the decision in 3 or 4 years.
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Old 10-06-2010, 11:14 AM   #3
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If you want a "cash account", then you might want to hold your nose and use one of Vanguard's money market funds that currently pay nada. But, personally, I think Wellesley is conservative enough that I would reinvest the dividends and let them compound over the next 6.5 years.
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Old 10-06-2010, 11:23 AM   #4
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What Brewer said, or else think about short-term bond fund or short term treasury fund.
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Old 10-06-2010, 11:23 AM   #5
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On another note I am wondering if I invest 50000 bucks in the Wellesley fund should I do it through my current broker or sign up for Vanguard account? Any pluses or minuses to either approach? I may even want to go with 100K.
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Old 10-06-2010, 11:27 AM   #6
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On another note I am wondering if I invest 50000 bucks in the Wellesley fund should I do it through my current broker or sign up for Vanguard account? Any pluses or minuses to either approach? I may even want to go with 100K.
Your current broker will likely charge a commission to do so.
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Old 10-06-2010, 11:28 AM   #7
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Your current broker will likely charge a commission to do so.
So I guess the answer would be to sign up for a Vanguard account then! Thanks,. BTW I use Ameritrade.
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Old 10-06-2010, 11:54 AM   #8
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So I guess the answer would be to sign up for a Vanguard account then! Thanks,. BTW I use Ameritrade.
Might be a cheap commission............
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Old 10-06-2010, 12:49 PM   #9
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I'm considering sweeping the dividends into another fund that will be considered a cash account. It will be six and a half years before I will make any withdrawals. Any suggestions on conservative funds?
One option would be PenFed's five-year CDs, considering that if interest rates rise swiftly then you could "upgrade" to a new CD at the new higher rate. PenFed used to do this without penalties in IRAs, but even a 12-month penalty might be paid back by the higher rate. This CD option would give you the flexibility to let the money ride (if you don't actually need to make a withdrawal) or break into it if necessary (not too much of a penalty, especially for CDs in smaller amounts).

Another option if you don't actually need to make a withdrawal after six-seven years would be to stick to shorter-term CDs (one year? two years?) and let the cash pile up. You'll undoubtedly have a buying opportunity in an equity or bond fund during the next five years into which you could sink all of that cash. The caveat is that you might need another 5-10 years before this vulture approach pays off.

I let dividends/contributions pile up in our IRA accounts (which are otherwise invested in equities) and buy when the equity price dips below its long-term average. It sometimes takes 2-3 years of patience.
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Old 10-06-2010, 01:55 PM   #10
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Thank you all for the excellent advice.

Seems I've got a bit of ponderin' to do....
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Old 10-06-2010, 02:14 PM   #11
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Might be a cheap commission............
they charge 49.99 worth signing up for Vanguard account?
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