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Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 08:06 AM   #1
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Is this ok as Fixed Income pat of portfolio

I'm trying to decide if I should leave money in my 401k plan
or rollover to an IRA. The plan has some nice equity options
with index, growth, mid and small cap and international funds and also
some more exotic stuff like First Eagle Global A, some Fidelity
and Templeton funds and Vanguard Targeted Returement funds.
The expense ratio on the Vanguard Funds is 0%

However, there are no Bond funds, but there is an Income fund
that has contracts with insurance companies who invest the fund's
assets in fixed-income securities such as government and corporate
bonds and mortgages. Given the returns below is this a good option
for the 40% fixed income portion of my retirement portfolio

Average Annual Total Returns after all fees and charges (%)
as of 03/31/2006

1 Year 5.67
3 Year 5.42
5 Year 6.11
10 Year 7.12
Life 8.93

Life is as of inception date 07/01/1978.

There's also a money market fund currently paying 3.7%

Would I get better returns by moving the money, and if so where?
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 08:17 AM   #2
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Re: Is this ok as Fixed Income pat of portfolio

What you are describing is known as a "stable value" fund. It is an atttractive option for your FI portion since it is basically a money market (zero principal risk) but pays out higher yield (like a bond). VERY attractive, IMO, and not available outside qualified plans (like 401ks).

Wow, 40%. That's pretty high. Any particular reason?
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 08:52 AM   #3
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Re: Is this ok as Fixed Income pat of portfolio

I'm curious as to why you are talking about moving your money......

Are you changing jobs? It's my understanding that you can't move money from a 401k to an IRA unless you terminate your employment.

If you are changing employers I think you should roll your 401k to an IRA for two reasons: 1) In the unlikely event you were to pass over while your money is in the 401k, it will not receive good tax treatment before it goes to your heirs, and 2) You can probably move the money to another custodian (Vanguard, Fidelity, etc.) with an even larger selection of funds and investment alternatives than available in your 401k.

Regards,

Mike
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 09:06 AM   #4
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Re: Is this ok as Fixed Income pat of portfolio

try putting a small portion in Forex market.

or if you got a lot of fund, consider fraternity/quantum fund which is manage by George Soros (Soros Fund Management) which can yield annually as low as 12% and above that.

http://www.fraternityfund.com
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 09:08 AM   #5
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by Nevi
try putting a small portion in Forex market.

or if you got a lot of fund, consider fraternity/quantum fund which is manage by George Soros (Soros Fund Management) which can yield annually as low as 12% and above that.

http://www.fraternityfund.com
As an alternative, you could light cigars with hundred dollar bills or start each day with a coffee and vodka enema (stimulating).

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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 09:31 AM   #6
 
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Re: Is this ok as Fixed Income pat of portfolio

Nun of the Above,

Is the expense ratio really 0% for the VG fund?
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 10:28 AM   #7
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by TromboneAl


Is the expense ratio really 0% for the VG fund?
I'm guessing that means the service provider does not add any fees to the VG fund but that there will still be a very low ER within the VG fund.
Also agree that stable value funds are nice inside a 401k. 40% would be high unless very near retirement/older age wise. But if the 401k is ending because of change/end of employment then original poster will have to look to IRA possibilities which are many but different than the 401k.
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-21-2006, 10:42 AM   #8
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by yakers
I'm guessing that means the service provider does not add any fees to the VG fund but that there will still be a very low ER within the VG fund.
Also agree that stable value funds are nice inside a 401k. 40% would be high unless very near retirement/older age wise. But if the 401k is ending because of change/end of employment then original poster will have to look to IRA possibilities which are many but different than the 401k.
This 401k is with an old employer, I'm thinking of consolidating my funds into an IRA with a single provider, I'm 44, and planning on ER around 50. Right now my allocation is

15% Income Fund
30% Value Index Fund
30% S&P index Fund
10% Company Stock (Big Blue Chip)
15% International Fund

The postulated 40% in the income fund for when I actually retire in about 5 or 6 years. A 4% withdrawal rate will easily cover my expenses, no because I'm rich, but because I'm frugal.
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Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-27-2006, 11:53 AM   #9
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by brewer12345
As an alternative, you could light cigars with hundred dollar bills or start each day with a coffee and vodka enema (stimulating).

Brewer12345,
the coffee and vokda enema sounds like a new Starbucks blend. I'll bet someone, somewhere in SF is trying that right now.
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-27-2006, 12:00 PM   #10
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by OldAgePensioner
Brewer12345,
the coffee and vokda enema sounds like a new Starbucks blend.* * I'll bet someone, somewhere in SF is trying that right now.* *
Are you there now? Is it as stimulating as I imagined?
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-27-2006, 12:26 PM   #11
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Re: Is this ok as Fixed Income pat of portfolio

Brewer,
All that can go awry, went awry. Awry, awry, ooh.

I can buy the Krystal vodka and the Richard Gere Special Roast coffee but costco was out of turkey basters.

Trying to coordinate plans with international traveling companions is never velly esay.
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-27-2006, 12:38 PM   #12
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by OldAgePensioner
Brewer,
All that can go awry, went awry.* Awry, awry, ooh.

I can buy the Krystal vodka and the Richard Gere Special Roast coffee but costco was out of turkey basters.*

Trying to coordinate plans with international traveling companions is never velly esay.
You'e a resourceful guy. Improvise. Its a coastal cty. I'm sure you could find a garden hose and a bilge pump.
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-27-2006, 01:25 PM   #13
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Re: Is this ok as Fixed Income pat of portfolio

Quote:
Originally Posted by brewer12345
You'e a resourceful guy.* Improvise.* Its a coastal cty.* I'm sure you could find a garden hose and a bilge pump.
Just don't hurt the guinea pig.
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Re: Is this ok as Fixed Income pat of portfolio
Old 04-27-2006, 01:47 PM   #14
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Re: Is this ok as Fixed Income pat of portfolio

Tail first, so it can find it's way out...
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