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Old 09-15-2015, 02:54 PM   #81
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Old 09-15-2015, 02:56 PM   #82
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ICI is the Investment Company Institute, they collection data from all the 250 fund families in the US. This is a link to their website: https://www.ici.org

They publish a yearly Factbook that has all kinds of fund facts, including ER rates. The 2015 Factbook says the average ER of bond funds is .57. How many of the proposed bond funds are less than average ER? None. As said prior what about any of these expensive bond funds says buy me? I don't find any reason to give my money away to an expensive fund (either active or passive) for returns that after expenses are subpar. Just MHO.
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Old 09-19-2015, 02:21 PM   #83
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I did raise the concern about their portfolio complexity and expense but they were not forthcoming. We have left them.
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Old 09-19-2015, 02:51 PM   #84
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I was using bnd as a total bond fund which is a vanguard etf but got rid of it and went back to fidelty total bond.

Better performance most time frames despite a tad higher fees.
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Old 09-19-2015, 03:21 PM   #85
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Glad I made the earlier mistake about the fund since I got the benefit of your very informative reply on dividends, bonds, and the different approaches. I will be following and rereading your posts. Thanks so much!
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Old 09-19-2015, 03:42 PM   #86
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If I just wanted a simplified, hands-off approach to investments, I'd go with a single low-cost balanced fund (Vanguard Balanced, Wellington, Wellesley, LifeStrategy, Target Retirement or Managed Payout) instead of paying 1% AUM to a financial advisor on top of fund expenses.
Can you explain more about the specific funds in your post? Why would they be good in a retiree's portfolio? I have seen more than one of you mention the Wellington and Wellesley Funds. What kinds of funds are they and which do you have the most confidence in?
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Old 09-19-2015, 04:00 PM   #87
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Here is a real portfolio I use for my mom. I may switch to it in about 10 years:

25% S&P 500
25% U.S. total stock market ex-S&P 500 (this overweights mid and small cap stocks)
25% All world ex-U.S. (includes emerging markets)
25% Total U.S. bonds (adjust the percentage to whatever you feel comfortable with)

The Vanguard ETF's are: VOO, VXF, VEU, and BND. However I would recommend the mutual fund versions, Admiral class if your account is large enough. That will make it easier for you to buy and sell your shares.

Once you set it up you just have to check once a year to make sure you are staying close to your target percentages. In Mom's case we have targeted 20% to 30% as an acceptable range, so we shouldn't have to do much.

You can look at what's in the Vanguard Target Retirement mutual funds to get some examples of what funds and percentages they use. Or just use one of them yourself.

VTXVX is Target Retirement 2015 and has this mix:
29.77% Total U.S. Stock Market
19.33% Total International Stock Market
29.79% Total Bond Market
12.75% Total International Bond Market
8.35% Short-Term Inflation Protected Securities
VTXVX Vanguard Target Retirement 2015 Inv Fund VTXVX Quote Price News

That would be quite reasonable, and all you would have to do is sell shares when necessary. In that case you give up the ability to sell only bonds during a big stock market downturn, for example, which is one reason why the flexibility of separate bond, stock, and international funds is nice.

Within an IRA you will be able buy and sell without tax consequences, so if you start simple with one or three funds it won't cost you anything in taxes if you want to move to a more complex portfolio later on.
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Old 09-19-2015, 04:13 PM   #88
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Can you explain more about the specific funds in your post? Why would they be good in a retiree's portfolio? I have seen more than one of you mention the Wellington and Wellesley Funds. What kinds of funds are they and which do you have the most confidence in?
Wellesley (VWINX) and Wellington (VWELX) are "balanced" funds, containing both bonds and stocks. Wellington tends to have more stocks than Wellesley. They are actively managed, but at relatively low cost, and have had exceptional performance in the past. They are not as diversified as a "Target Retirement" index fund or the simple portfolios mentioned previously. But they are solid choices if you want to try to beat the indexes.

VWINX Vanguard Wellesley® Income Inv Fund VWINX Quote Price News
VWELX Vanguard Wellingtonâ„¢ Inv Fund VWELX Quote Price News
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Old 09-19-2015, 05:05 PM   #89
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Before you meet with your planners next week you really need to educate yourself about funds, fees, and expenses. Vanguard has a good model portfolio selection tool, based on your needs, that you can start with. Try this first, it is very easy to use and will give you specific recommendations of low cost funds you can use on your own without an expensive "adviser."
https://personal.vanguard.com/us/fun...recommendation

You can then click on the recommendations for the specific information on that fund, including the expense ratio.

An overview of portfolio allocations models are given here:
https://personal.vanguard.com/us/ins...io-allocations

Then do some probing with them to see why they want to put you into higher expense funds in addition to charging you the 1% fee. You can report what they tell you here if you want feedback. Good Luck!
I used the model portfolio selection tool at Vanguard. Thanks for the link. The overview link, however, did not open for me. I have now left my CFP and sent my application and transfer paperwork to Vanguard. Now, I am reading and re-reading forum contributors and looking up recommended books and websites. I may try to manage the index funds myself with support from you and other members of the 3 forums I have joined (MS, ER, and Bogleheads).
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Old 09-19-2015, 05:13 PM   #90
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I may not be adding much to the excellent opinions here. To answer the question: Bond funds in retirement, bond funds should be a part of asset allocation and the main reason is not to make as much as stocks, but to stabilize your portfolio in volatile situation, like the coming recession and or bear market(if it comes). When the bear market comes and the S&P is losing 35%, the BF may be losing just a tiny fraction or may be gaining 1%.
I've read in WSJ, to put some in Vanguard Intermediate term BF.
Tell me more about the Van. Intermediate BF. What is the term? (How liquid?) What did the WSJ say about this fund? Sounds up my alley. Thanks for mentioning it.
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Old 09-19-2015, 05:18 PM   #91
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Goldenmom, as I recall this is essentially one or two IRAs. If it is all IRA/tax-deferred and you don't have any other significant investments, then your easiest option would be a target date fund that has an asset allocation commensurate with your risk appetite. The next easiest alternative would be to buy the four index funds that comprise the target date funds (Total Stock, Total International Stock, Total Bond and Total International Bond) in proportions that you feel comfortable with.

Where things can get more complicated is if you have significant taxable or tax-free investments in addition to the IRA because for tax efficiency you want to have different funds in different places, but if my recollection of your situation is correct then you can avoid that particular complication.
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Old 09-19-2015, 06:06 PM   #92
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rayinpenn, enjoyed your post a lot. The resources at Transparent Investing are really helpful and I recommend them to others who are new to investing. I have watched two of the three movies you mentioned, but still need to watch Boiler Room. I have also watched Chasing Madoff and the documentaries on Enron--scary stuff. Thanks again for the great post!
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Old 09-19-2015, 06:12 PM   #93
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A good, and short, book that gives a good foundation in managing your investments is "The Investment Answer" by Daniel C. Goldie and Gordon S. Murray. You can get it on Amazon. It's a quick read and, by giving you solid background on investing in an organized fashion, would prep you to go through the many good recommendations already put forth in this thread and apply them to your situation. Don't be rushed into making these big investment decisions until you are ready and feel comfortable with the path you are taking. A little study may help you feel much more confident in your choices.
Found The Investment Answer on Audible and ordered it. Thanks for your advice and the recommendation!
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Old 09-19-2015, 06:31 PM   #94
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Goldenmom, as I recall this is essentially one or two IRAs. If it is all IRA/tax-deferred and you don't have any other significant investments, then your easiest option would be a target date fund that has an asset allocation commensurate with your risk appetite. The next easiest alternative would be to buy the four index funds that comprise the target date funds (Total Stock, Total International Stock, Total Bond and Total International Bond) in proportions that you feel comfortable with.
Instead of a Target Retirement fund which follows a glide path, another option is to choose a Vanguard LifeStrategy fund based on one's risk tolerance. It's composed of the same component funds as the Target Retirement funds but uses fixed allocations.

LifeStrategy
Income VASIX: 20/80
Conservative Growth VSCGX: 40/60
Moderate Growth VSMGX: 60/40
Growth VASGX: 80/20

Granted, Target Retirement funds do include TIPS in the portfolio.
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Old 09-19-2015, 08:25 PM   #95
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If all your funds are at Schwab now, you could call them and modify the account so that the CFP is no longer authorized to trade on your account, see balances, act as your agent, etc. He has no need to do any of that at this point, and it's just a bad idea to allow >any< person to have access to your funds without good reason. He doesn't have a reason any more.

You'll want to arrange the transfer to Vanguard so that they "pull" the money from Schwab, not so that Schwab (or your CFP, especially) "pushes" the money to Vanguard. Neither your CFP nor Schwab has any particular interest in seeing your money leave, and so sometimes it seems to take a while to get these things done if a person arranges things so that the "losing" party has to move the money.

BTW, since all your funds are in IRAs, it will make arranging your asset allocation simpler. If you had a mix of IRAs and "regular" after tax accounts, there would be some value in preferentially putting "tax inefficient" assets (e.g. bonds) in your IRA and putting more tax efficient assets (e.g. stocks) in your regular accounts. But, all your accounts are in IRAs, so this won't be a further complication. (If what I wrote above doesn't make sense to you now, don't worry about it. There's a quick primer at this link. But the "takeaway" is that the simplicity of your situation is one more thing that argues for your ability to handle all the management of these funds by yourself--soon).

Another thing: Will you be wanting/needing to see your husband's Vanguard accounts, set up automatic bank transfers on his accounts, etc? If so, talk to Vanguard about sending the paperwork so that you can do this (and so that he can do the same in your accounts, if desired). Yes, as a practical matter you could just share passwords to your online accounts with your husband, but if you get appointed as his "agent" everything is "legit" and if you need to call and ask for help over the phone about his money, Vanguard will talk to you.
Good advice, as usual. I will definitely need to see my husband's Vanguard account (and vice versa), so I will ask about being his agent. I will be managing the investments with support from the forum communities and what I am learning in books and the media. My husband and I are powers-of-attorney for each other already, but being his agent (and he mine) will simplify things if one of us is incapacitated. Our CFP can still access our account at present. I asked him to liquidate the one asset Vanguard said they could not accept in the transfer and this was done this week to simplify the transfer. It is possible that I may want to repeat that--not sure. I believe Vanguard will be doing a "pull" from Schwab, but I will confirm that. The 5 Ameriprise assets we "carried over" to the new CFP are currently below the purchase price, so I thought we'd hold onto them while we are sorting things out. One of the Ameriprise assets we carried over, (LFMAX - LoCorr Managed Futures Strategy A) had an ER of 2.62--13x the average according to the Vanguard concierge rep helping us open our account, and even our CFP found this remarkable when he liquidated it for us. I hope anyone still with Ameriprise will study their statements and get a second opinion, especially if you have a variable annuity. You may have to be persistent.
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Old 09-19-2015, 09:22 PM   #96
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Thanks everyone for all you have taught me on this thread. I will be starting a new thread as I get my Vanguard account open and hope you will continue my education. I will check back to catch up on your comments when I get an e-mail alerts, and hope I will see you at the Bogleheads forum. I am grateful to you for saving us thousands of dollars in fees and fund expenses with your financial coaching. You're the best, Goldenmom
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Old 09-20-2015, 12:44 AM   #97
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Good luck Golden Mom. Glad you followed Sam Clem''s and Michael B's and others advice. This is a helpful forum.
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Old 09-20-2015, 08:17 AM   #98
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Here is an article is AARP Magazine written by Allan Roth about financial planners. How to Choose a Financial Planner, Adviser - Annual Fees, Your Investm... - AARP

Quote:
Beware the good adviser who does bad things with your money
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Old 09-20-2015, 08:50 AM   #99
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"A widow just shy of her 90th birthday recently asked me to review her investment portfolio. This happens a lot: Much of my practice involves giving second opinions to other financial planners' clients.

This widow had a reason to worry. She had been sold two expensive annuities — just about the last thing a 90-year-old needs — and the rest of her portfolio consisted mostly of risky stock funds and junk bond funds. The planner was making a fortune as the widow's nest egg dwindled."

This has been my experience as well...


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Old 09-20-2015, 09:00 AM   #100
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"A widow just shy of her 90th birthday recently asked me to review her investment portfolio. This happens a lot: Much of my practice involves giving second opinions to other financial planners' clients.

This widow had a reason to worry. She had been sold two expensive annuities — just about the last thing a 90-year-old needs — and the rest of her portfolio consisted mostly of risky stock funds and junk bond funds. The planner was making a fortune as the widow's nest egg dwindled."

An troubling excerpt from LOL cite.... Thanks LOL.

I've been asked to look at people's portfolios over the years - (I am not a CFP but friends, relatives, colleagues respect my investing style. Turtle slow, simple, dividend centered, minimal intervention. Oh and Not too heavy on the rebalancing).... Every time it is the same an inefficient portfolio with costly and often inappropriate investment vehicles...

It kills me.



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