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Old 04-04-2013, 02:55 PM   #21
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I put all my fixed income into short-term TIPS fund in october,when Vanguard released it.Also increased my stock percentage a bit.Seems ok for now.The future,I will have to borrow Brewer"s 8 ball.

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Old 04-04-2013, 03:35 PM   #22
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Originally Posted by antmary View Post
Sorry I wasn't very clear...yes, the situation is interest rate risk that I am concerned about. Similarly to FireD, CD's and I-Bonds look more stable going forward. Right now I am inclined to open a Roth CD for this year (actually, 2012); We have a neighborhood bank nearby that had only one foreclosure during the recent housing crisis. I'll let the other parts of our portfolio stay put.

Some food for thought: John Bogle gave an interview (sorry, I can't provide a link) that he is concerned with what is happening with TIPS and Treasuries right now re: rising interest rates. There is, of course, lots of info on the Boglehead site.

Thanks a lot for your continuing response, Everyone!
It isn't just Bogle that is concerned, everybody from Bill Gross, the manager of PIMCO, to Warren Buffett have described US Treasury as "return-free risk". Now collectively these smart guys,and those off us who follow them have been wrong on our prediction that the bond bubble is going to burst for 4 or 5 years. On the other hand we have been right saying equities will do better, and bonds funds are finally starting to dip.

I recently started moving some of my 87 year old mom's money from Vanguard GNMA to Wellesley. I know Wellesley is still 60% bonds, but
I have some confidence the Wellesley managers will be able to navigate the tricky fixed income water better than the average manager/investor.

If you comfortable with Wellesley than even 100% allocation to the fund only moves your asset allocation for 40% equities to 56%. A 50% allocation to Wellesley along with some CDs seems very sensible to me. BTW, Vanguard also offers CDs and they are generally very competitive.

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Old 04-07-2013, 09:34 AM   #23
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wife and i have a bunch of cds expiring this year. they were all started prior to the crash in 2008 and had interest rates 3.3-5.

now i am looking at far less interest rates on new CDS.

these will be a roth and non roth cds(mostly non -roth).

since i know nothing about wellington or wellesly whats your advice
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Old 04-07-2013, 10:49 AM   #24
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Location: Northern California
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Those were the days weren't they?...when CD's had reasonable interest rates.
The plan I am settling on is to:

1. Continue gradually transferring the stocks in taxable into our Roth accounts; our easy, online business will enable us to have the yearly earned income for that.

2. Open a new account in our Roth IRA's that we will use to hold our money as we age into our 70's and 80's. We are considering one of these three:
a. Vanguard Wellesley
b. Vanguard Target Retirement Income VTINX
c. Vanguard Lifestrategy Conservative Growth fund VSCGX

3. Laddered CD's...our local credit union has reasonable rates, and they have a good "credit rating."
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Old 04-07-2013, 11:13 AM   #25
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When DH got "whacked by a RIF," to borrow Ziggy29's phrase, it was June 2008, and he rolled his 401(k) over to his Schwab account, where I built him a CD ladder.

Those last few great 5% CDs are maturing this August, and we will fill in a few rungs to the ladder where the holdings are light, but also move some to the Wellesley bucket.

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