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Suppose you HAD to choose one fund
Old 05-15-2006, 09:09 PM   #1
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Suppose you HAD to choose one fund

What would you choose if you had to choose one balanced stock and/or bond blended fund for your ER nest egg, and one fund for your cash management needs (the cash bucket)?

Conditions: they can't change over time, they are tax sheltered, and you are assuming either a 4% SWR or close variation (e.g. ERBob's rules).

Control yourself - you only get to select one mutual fund for your nest egg, and one to manage your fixed investments and cash flow.

The ultimate simple retirement plan...
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Re: Suppose you HAD to choose one fund
Old 05-15-2006, 09:17 PM   #2
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Re: Suppose you HAD to choose one fund

Rich, I think a key missing element is how old do we assume you are? My choice of funds retiring at age 45 would be different retiring at age 60.

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Re: Suppose you HAD to choose one fund
Old 05-15-2006, 09:24 PM   #3
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Re: Suppose you HAD to choose one fund

I am considering vang. retirement 2035 fund VTTHX.
Best one for what I need very close to the allocation I am looking for:
50%total-stock ix
25% tot-bond ix
25% intern. ix
The only thing I don;t like: it will become more conservative over time so every 10 years I would have to change it the next one 2045 etc
For this drawback I also considered Van. Lifestrategy funds or FidAsset mgr or mgr gwth (don't recall which one). And I rules out those because -well- I forgot why. But anyway I am not using the one fund approach since right now I prefer controling the reallocation.
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Re: Suppose you HAD to choose one fund
Old 05-15-2006, 09:48 PM   #4
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Re: Suppose you HAD to choose one fund

Lead sled dog for the last ten years was Vanguard Lifestrategy moderate. Now that I'm an old phart of 62 - switched to VG Target Retirement 2015 - cause RMD will be here in 8 years.

Have VG Prime MM for my broker account/extra cash - don't conciously count it as a cash bucket although I suppose I could eck out a couple years if Mr Market rattled my cage.

Plain old VG Balanced Index or Lifestrategy or a Target fund OR or - drum roll please - psst Wellesley.

More than one way to skin a cat.

heh heh heh heh heh - male hormones do complicate things though - gotta putz a little.
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Re: Suppose you HAD to choose one fund
Old 05-15-2006, 09:56 PM   #5
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Re: Suppose you HAD to choose one fund

I'd probably pick Janus Balanced fund, and their money market fund, for some good ole boring 10%+ return over the long-term.* (the lions's share would be in the former, just immediate cash needs in the latter).

In realty, i have my complex portfolio that is probably also just going to give me 10%+ at best over the long term... heh, maybe I should just put it all in Janus Balanced.
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Re: Suppose you HAD to choose one fund
Old 05-15-2006, 10:07 PM   #6
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Re: Suppose you HAD to choose one fund

DODBX

Not sure about the cash part

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Re: Suppose you HAD to choose one fund
Old 05-15-2006, 10:16 PM   #7
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Re: Suppose you HAD to choose one fund

I really should keep my mouth shut because it doesn't help me to see the funds grow any larger but...since you asked

Capital Income Builder (CAIBX) for most everything and Vanguard Treasury Money Market for cash. *

Why Capital Income Builder? *

- Yields between 3%-4% while capital gains keep up with inflation. Just spend your dividend which is equal to the magic SWR, and let the rest grow for you.
- Team managed so no risk of losing a star guru
- Pursues the best opportunities internationally including the US. *Most funds are either international or US oriented.* 42% international equity, 27% US
- 21% bonds these days, 10% cash, but could vary the allocation as the market situation warrants
- Yearly management fees of 0.57% which is competitive
- Average Annual Total Returns
1 yr * * * *3 yrs * * *5 yrs * * 10 yrs
15.41% 16.22% 10.82% *11.47%
- Return in 2002: 0.66% versus -21% for Vanguard Total Market Index
- The fund keeps up with the market in the long run but with far less volatility

Downsides: lags the market in big up markets, it's a rather large fund, loads on the A shares are high if you don't meet the breakpoints

Why Vanguard Treasury Money Market?
- Good yield
- No default risk
- Federal money market fund has a better yield, but they are not government guaranteed
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Re: Suppose you HAD to choose one fund
Old 05-16-2006, 07:15 AM   #8
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Re: Suppose you HAD to choose one fund

Quote:
Originally Posted by REWahoo!
Rich, I think a key missing element is how old do we assume you are? My choice of funds retiring at age 45 would be different retiring at age 60.
Fair enough.

You are FIREing within 3 years and you are 55-60 years old (any resemblance to actual persons, living or dead, is strictly coincidental ).
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Re: Suppose you HAD to choose one fund
Old 05-16-2006, 08:03 AM   #9
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Re: Suppose you HAD to choose one fund

I would use(and do use) Trowe Price Cap Appreciation Fund(prwcx). For my cash needs I would simply use a money market fund. Fidelity's cash reserve yielding about 4.6%.
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Re: Suppose you HAD to choose one fund
Old 05-16-2006, 08:06 AM   #10
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Re: Suppose you HAD to choose one fund

Quote:
Originally Posted by Rich_in_Tampa
Fair enough.

You are FIREing within 3 years and you are 55-60 years old (any resemblance to actual persons, living or dead, is strictly coincidental ).
http://intelligentspeculation.blogsp...uard-star.html
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Re: Suppose you HAD to choose one fund
Old 05-16-2006, 08:09 AM   #11
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Re: Suppose you HAD to choose one fund

Quote:
Originally Posted by Rich_in_Tampa
You are FIREing within 3 years and you are 55-60 years old (any resemblance to actual persons, living or dead, is strictly coincidental ).
Thanks for that disclaimer to assist in keeping my personal situation confidential.

If I had to select just one fund, would be torn between Dodge & Cox Balanced or Wellesley. I would use a Vanguard MMkt for the cash portion.

Even though I'm a strong supporter of the KISS strategy, I don't think you should try to limit yourself to just one fund. I went with a combination of D&C Balanced (20%), Wellesley (50%) and D&C International (15%). The remaining 15% is in cash.

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Re: Suppose you HAD to choose one fund
Old 05-16-2006, 11:58 AM   #12
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Re: Suppose you HAD to choose one fund

I could comfortably go with LifeStrategy Moderate Growth from now (age 36) through death. Cash fund? Hrmmm, Prime MM I suppose. My current strategy is to not alter AA based on age, so this would work fine for me.

(In reality I've thrown in some REIT index, extra extended market index, substituted Wellington for LS Mod and then got some extra international index and total bond index to counterbalance the effects of adding REIT and overweighting extended.)
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Re: Suppose you HAD to choose one fund
Old 05-16-2006, 12:15 PM   #13
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Re: Suppose you HAD to choose one fund

Lifestrategy Growth (I'm 25!).
Treasury Money Market Admiral Class.

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