FPURX for a Roth Conversion IRA?

[Fleur58]

Hi :
I am age 60, retired, and living off my taxable savings only.

I plan to convert 15-20K of traditional IRA each year to a Roth account (my first). I don't need the money to live on.

For this first year, I converted 10K to Roth in April and put it all in Fidelity Puritan. FPURX has increased in value by $720 on paper since April.

I'm about to convert another 5K in September. I'd wait until the end of the year however, I need to show accurate documentation of my income in early November to sign up for a HC plan and get an accurate cost.

Guess I'm looking for a solid performer with steady growth. Do I have it already? Or should I use a more aggressive fund for a Roth?

[Dtail]

Do you invest in index funds? For example, the Fidelity S&P 500 index fund FUSVX has higher returns than FPURX no matter how many years of comparison. It also has fee exp of 1.5 bps vs. 55 bps for Puritan.
Something to ponder.

[Al18]

Fidelity Puritan (FPURX) and Fidelity Balanced (FBALX) are both 5 star rated balanced funds with a .55% expense ratio. Both have a long history of good returns. Hard to argue with Puritan, who has been around since 1947

[Fleur58]

Dtail: Good info. I didn't consider 100% equity funds because I initially wanted an allocation fund for a diversification one fund approach.
Al18--I already own a large stake in FBALX in the TIRA. I picked FPURX and FBALX at the same time. Glad to hear I chose good funds.

[Dtail]

Quote:

Originally Posted by Fleur58 Dtail: Good info. I didn't consider 100% equity funds because I initially wanted an allocation fund for a diversification one fund approach. Al18--I already own a large stake in FBALX in the TIRA. I picked FPURX and FBALX at the same time. Glad to hear I chose good funds.

Understand. My Roth is relatively small, so to make the overall AA rebalancing easier, I just used 1 index fund for my Roth and rebalance overall through my TIRA.

[DayDreaming]

Quote:

Originally Posted by Fleur58 Hi : I am age 60, retired, and living off my taxable savings only. I plan to convert 15-20K of traditional IRA each year to a Roth account (my first). I don't need the money to live on. For this first year, I converted 10K to Roth in April and put it all in Fidelity Puritan. FPURX has increased in value by $720 on paper since April. I'm about to convert another 5K in September. I'd wait until the end of the year however, I need to show accurate documentation of my income in early November to sign up for a HC plan and get an accurate cost. Guess I'm looking for a solid performer with steady growth. Do I have it already? Or should I use a more aggressive fund for a Roth?

The money you convert from IRA to Roth is your income (plus any other income of course).
Money growing in your ROTH does not count as income.

For my HC plan under the ACA, my Roth conversions are a significant part of my income. I wrote a letter explaining this, and that was accepted as documentation of my income.

[COcheesehead]

FPURX outperforms its peers by nearly 2x. Not bad for an allocation fund.

[VanWinkle]

This fund looks good for the last 10 years due to heavy concentration in Growth stocks. No one knows how the next 10 years will play out. It beats Wellington for the 10 year results, but Wellington is better for the 15 year results with less equities. The Fidelity fund is 65-70% equities while Wellington is 60%. In a down market(2008) Wellington was about 7% better. The fund is a good choice if it fits your asset allocation, but it is not the only choice.

[38Chevy454]

I also hold FPURX in my mix. It is a 60/40 target allocation fund, but allows the fund mgrs to increase or decrease the numbers some to account for market performance. So it is heavier into stocks now. I like it, and it has a good track record. I do not see anything wrong with your choice for FPURX in a Roth, assuming that it meets your allocation goals.

[sengsational]

Back in 1988 my wife picked Puritan for a tIRA rollover. She has never opened the Fidelity envelope in 30 years; always just puts it in my pile. Can't say I've done a lot of analysis on it, but by ignoring it, she probably did herself a favor; put in about $5K and pulled out about $75K.


EDIT: I just ran a DQYDJ S&P with reinvested divideds for a related time span and it came to 9.4%. My sheet for FPURX said 9.2%.

[OldShooter]

Quote:

Originally Posted by COcheesehead FPURX outperforms its peers by nearly 2x. Not bad for an allocation fund.

"peers" That is a very dangerous comparison. You could easily end up finding the tallest midget. IMO benchmarks should always be broad market indices or, better, broad market index funds.

[COcheesehead]

Quote:

Originally Posted by OldShooter "peers" That is a very dangerous comparison. You could easily end up finding the tallest midget. IMO benchmarks should always be broad market indices or, better, broad market index funds.

50%-70% allocation funds. That is a defined asset category and used for comparison in many places. So it is not ambiguous as you insinuate.

[OldShooter]

Quote:

Originally Posted by COcheesehead 50%-70% allocation funds. That is a defined asset category and used for comparison in many places. So it is not ambiguous as you insinuate.

I'm not insinuating anything. Comparing a fund to its "peers" risks finding the best of a poor lot. The longest of a box of short pencils is still a short pencil.

[sengsational]

OS...check post 10...FPURX is not in a group of short pencils

[COcheesehead]

Quote:

Originally Posted by sengsational OS...check post 10...FPURX is not in a group of short pencils

You and I know that.

[OldShooter]

Quote:

Originally Posted by sengsational OS...check post 10...FPURX is not in a group of short pencils

Not impugning FPURX in any way. I am just pointing out that comparing any fund to its peers, as for example Lipper data,is risky.

[COcheesehead]

Quote:

Originally Posted by OldShooter Not impugning FPURX in any way. I am just pointing out that comparing any fund to its peers, as for example Lipper data,is risky.

If one desires a certain style or segment (balanced, international, etc) and wants one of the better funds in that segment, comparison to its peers is bad? That makes no sense.

[VanWinkle]

Quote:

Originally Posted by COcheesehead If one desires a certain style or segment (balanced, international, etc) and wants one of the better funds in that segment, comparison to its peers is bad? That makes no sense.

I think he means " Past Performance Is No Guarantee of Future Results"

especially when looking at a ten year positive market for growth stocks in

a balanced fund that has a concentration in growth stocks. It would compare

favorably for the the last ten years against a fund like Wellington that has

mostly large value stocks. You may want to compare it to balanced funds

with a growth concentration knowing it may not persist in the future.

VW

[COcheesehead]

Quote:

Originally Posted by VanWinkle I think he means " Past Performance Is No Guarantee of Future Results" especially when looking at a ten year positive market for growth stocks in a balanced fund that has a concentration in growth stocks. It would compare favorably for the the last ten years against a fund like Wellington that has mostly large value stocks. You may want to compare it to balanced funds with a growth concentration knowing it may not persist in the future. VW

The comment comes across as more general than just FPURX. He/she/they use the term “comparing any fund...”

[OldShooter]

Quote:

Originally Posted by COcheesehead If one desires a certain style or segment (balanced, international, etc) and wants one of the better funds in that segment, comparison to its peers is bad? That makes no sense.

Well, first of all I said"risky" not "bad." If you want only the sector and do not care what is going on with the rest of the investment world then that type of comparison may be attractive to you.


Ref @vanwinkle you also have the problem that manager persistence has been shown to be nonexistent in both academic (Fama/French) and empirical (S&P) studies. So trying to pick the best fund in your chosen group is basically a dartboard exercise.