Cash Heavy.. What would you do?

[NW-Bound]

Quote:

Originally Posted by RunningBum That's usually reserved for trivial complaints, and the OP wasn't complaining about anything, just asking for advice, so that comment seems pretty unwarranted. And pretty much anything on this forum is a first world problem, isn't it?

Calmloki was just joking, as he himself has too much cash that he does not know what to do with.

I also have some stinkin' cash that earns barely enough to keep up with inflation if even that, so have been thinking about getting back into bonds. EM sovereign bonds, anyone? I thought I read somewhere that EM country governments have lower debt loads than developed countries, hence the default risk is not as high as people would fear.

[galeno]

From Jan 2006-Oct 2012 30% of port was in intermediate bonds. We sold them and put the proceeds into 5% div stocks and 25% laddered CDs.

Our div stocks have gained over 30%. So it was a good move. We are slowly moving back into intermediate bonds and will complete the transition over the next 4 years.

Quote:

Originally Posted by NW-Bound I also have some stinkin' cash that earns barely enough to keep up with inflation if even that, so have been thinking about getting back into bonds. EM sovereign bonds, anyone? I thought I read somewhere that EM country governments have lower debt loads than developed countries, hence the default risk is not as high as people would fear.

[bradaz2488]

Thanks for all of the feedback. The 401K to IRA transfer date was on Nov 19th so I have not been siting on the 401K cash that long. Here is what I'm considering based on the feedback. Any additional feedback is welcomes ...

1) For the Fidelity IRA account I will put 50% of the cash balance to work right away into stocks/bonds funds and then DCA the remaining 50%. I will double down on a 3-5% dips in S&P/DOW.

2) For the Schwab account I will DCA all the cash into stock funds (no bonds in taxable account). I will double down on a 3-5% dips in S&P/DOW.

3) Since the short term future yields on Bonds is "fuzzy" I think I'll keep my Bond/Cash AA to 10% Bonds (intermediate?) and 25% cash for now. I will move more cash into bonds (intermediate and/or short) later in 2014/2015 if it make sense to do so at that time.

More questions for you all:
1) Should I DCA over 12 or 18 months?
2) Does the doubling down on 3-5% dips make sense?
2) Any feedback on the Fidelity Index funds below and % exposure I should have:
FUSVX U.S. Large CAP
FSEVX U.S. Mid CAP
FSSVX U.S Small CAP
FSIVX International large CAP
FPMAX Emerging markets.
3) Any feedback on the Schwab ETF funds below and % exposure I should have:
SCHX U.S Large CAP
SCHM U.S Mid CAP
SCHA U.S Small CAP
SCHF International large CAP
SCHE Emerging markets.
4) Bond funds are very confusing to me and I'm still educating myself. Sounds like Intermediate Bond funds is the way to go right now and then possible move into short term Bond funds in 2014 pending how interest rate go. Sounds like I should stay away from long term bond funds? Any guidance on Bond fund types and/or specific funds would be much appreciated.

My goal is to be at my desired AA (65% stock, 20% bonds and 15% cash) after I finish my DCA timeline ends.

Thanks again for all the feedback...

[kaneohe]

It's not clear to me if you were at your target AA just before the rollover, but if you were and since the rollover is so recent, it looks to me that the S&P500 is only up 1.5% or so since then so you could just go to your target AA if you wanted.