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One Fund Idea?
Old 12-05-2006, 08:06 PM   #1
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One Fund Idea?

Any thoughts on T. Rowe Price's Capital Appreciation as a simplied one-fund portfolio? Balanced with great 10 yr returns. But few bonds and new managers - does it matter? If not this, what about one of the target retirement funds as your one fund even after retiring?
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Re: One Fund Idea?
Old 12-05-2006, 08:17 PM   #2
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Re: One Fund Idea?

Quote:
Originally Posted by astroboy
....what about one of the target retirement funds as your one fund even after retiring?
I have the TRP Retirement 2020, which I will continue with after retiring. I have it setup with automatic EFT once a month from my checking acct, so I just "set it, and forget it". I'll FIRE in early April 2007, @ 50, and chose the 2020 because I liked the higher percentage of stocks. 8)
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Re: One Fund Idea?
Old 12-05-2006, 09:01 PM   #3
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Re: One Fund Idea?

Quote:
Originally Posted by astroboy
Any thoughts on T. Rowe Price's Capital Appreciation as a simplied one-fund portfolio? Balanced with great 10 yr returns. But few bonds and new managers - does it matter? If not this, what about one of the target retirement funds as your one fund even after retiring?
I prefer one of the target retirement funds because of low cost and predictable allocation.
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Re: One Fund Idea?
Old 12-05-2006, 10:14 PM   #4
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Re: One Fund Idea?

Quote:
Originally Posted by Goonie
I have the TRP Retirement 2020, which I will continue with after retiring. I have it setup with automatic EFT once a month from my checking acct, so I just "set it, and forget it". I'll FIRE in early April 2007, @ 50, and chose the 2020 because I liked the higher percentage of stocks. 8)
What will happen to this fund in 2020 and beyond? Will they just rename it or make you transfer into another fund?
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Re: One Fund Idea?
Old 12-06-2006, 02:13 AM   #5
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Re: One Fund Idea?

It migrates to an income fund.
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Re: One Fund Idea?
Old 12-06-2006, 02:07 PM   #6
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Re: One Fund Idea?

Quote:
Originally Posted by astroboy
What will happen to this fund in 2020 and beyond? Will they just rename it or make you transfer into another fund?
The name will remain the same, and as the years progress, it's asset allocation among stocks, bonds, and short-term investments changes, to lower the risk. For a more in-depth look, you can view the prospectus of the retirement target funds in PDF at the TRP website:

http://www.troweprice.com/cgi-bin/pr...i?ticker=TRRBX

(I imagine you can do the same at Vangard and others, also.)

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Re: One Fund Idea?
Old 12-07-2006, 09:12 PM   #7
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Re: One Fund Idea?

Quote:
Originally Posted by Goonie
I have the TRP Retirement 2020, which I will continue with after retiring. I have it setup with automatic EFT once a month from my checking acct, so I just "set it, and forget it". I'll FIRE in early April 2007, @ 50, and chose the 2020 because I liked the higher percentage of stocks. 8)
Sounds like a good idea, but do you get hit with fees each month when you have a withdrawal? I'd always heard it's best to just do one w/d each year for a whole year's worth to save on fees.
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Re: One Fund Idea?
Old 12-07-2006, 10:24 PM   #8
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Re: One Fund Idea?

Quote:
Originally Posted by astroboy
Any thoughts on T. Rowe Price's Capital Appreciation as a simplied one-fund portfolio? Balanced with great 10 yr returns. But few bonds and new managers - does it matter?
I bought this fund a few years ago with the idea of a one fund approach but have added some international, reits, commodities, etc for added diversification. I have recently thought about converting to a target fund but can't make myself sell what I have and pay cap gains tax. So I will probably stay put unless I become concerned with the new managers of TRP Cap Appre. It has been a great fund.
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Re: One Fund Idea?
Old 12-07-2006, 10:53 PM   #9
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Re: One Fund Idea?

Will massive capital gains taxes need to be paid in 2020, when the fund transitions to an income fund?
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Re: One Fund Idea?
Old 12-08-2006, 02:00 AM   #10
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Re: One Fund Idea?

the change over is very gradual as each year it shifts more and more to its goal.

only thing i dont like about target funds is they tend to become toooo conservative if you dollar cost average in over time. they are best suited for lump sum buy in. the fact that the market rises 2/3 of the time coupled with their constant downward reduction of stock allocations work agsinst you .


other issue is they are best if used alone with no other investments. problem is those well suited for the simplicity of a target fund tend to also own a mish mosh of other investments which offset what your trying to do with the target fund.
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Re: One Fund Idea?
Old 12-08-2006, 08:00 AM   #11
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Re: One Fund Idea?

t.r.price capital appreciation is rather unique among "balanced" funds ... it tends to hold its non-equities in convertables and cash. i like it and hold it, but would be reluctant to use it as a one-fund portfolio because its composition does not reflect what most would consider a "balanced" portfolio.
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Re: One Fund Idea?
Old 12-08-2006, 09:36 AM   #12
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Re: One Fund Idea?

I think the idea of a "one fund" solution is important for a lot of people who have no interest or ability in investing. In the Federal Govt (TSP)we have the choice of Lifecycle Funds, there are many such options from Vanguard, Fidelity & others including target date, target allocation and other balanced options. In my Roth I have VG Asset Allocation Fund (VAAPX) it serves as an S&P500 substitute with a little less volitility. My main TSP fund is mostly in a Target Retirement fund.

Two places to check if you are interested in the subject:
http://turnstoneag.com/downloads/PoppingTheHood2005.pdf

and

https://institutional.vanguard.com/i...ycle_funds.pdf
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Re: One Fund Idea?
Old 12-08-2006, 10:00 AM   #13
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Re: One Fund Idea?

In my kids' custodial accounts (small balannces), I use SWBGX. It could be a little cheaper, but it has a good mix of bonds, cash, equities, etc.
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Re: One Fund Idea?
Old 01-25-2007, 07:51 PM   #14
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Re: One Fund Idea?

Quote:
Originally Posted by mathjak107

only thing i dont like about target funds is they tend to become toooo conservative if you dollar cost average in over time. they are best suited for lump sum buy in.
mathjak107 - could you please explain in more detail why you think this is true? I've been thinking of moving our Roth IRAs to Target Retirement 2035 and setting up automatic monthly DCA, but now you got me worried that might not be a smart thing to do?
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Re: One Fund Idea?
Old 01-25-2007, 09:41 PM   #15
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Re: One Fund Idea?

I have been noodling this same issue for my brother who is retired. I and his significant other have settled on Vanguard Wellesley Income Fund.

I have both the Oakmark and Dodge & Cox Balanced funds. Oakmark Balanced is still open, I think, but lacks the international investmenst in Wellesley.
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Re: One Fund Idea?
Old 01-26-2007, 07:30 AM   #16
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Re: One Fund Idea?

I feel like Vanguard Star is a decent one fund portfolio. Well diversified and alsocarries some international in it's AA.
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