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Fund Comfort VS Return
Old 11-01-2004, 01:43 PM   #1
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Fund Comfort VS Return

I know that most posters on this board favor index funds and most of my retirement is in index funds. But I have my RothIRA in a Vanguard Asset Allocation fund (VAAPX). I started this a few years ago and it has performed well (better than my one tech fund ) better than the S&P 500 in that time frame. But best of all it has lower volatility. I say I can take big risks but I hurt on my one tech fund, learning can be expensive. While I have less than 10% of my financial assets in this fund, over time I expect to convert my 401K funds into this account and spend down others before this one. I will receive an inflation indexed pension so I do not see a need for additional fixed income funds. So rather that a total market index, a Vanguard timed retirement fund or the countless ways to slice and dice allocations I expect to use this fund and my pension.

Well, that's my plan and I'm sticking to it! Well, maybe not. If a farsighted person on this board can give me alternatives to consider that can better accomplish my goals then I would be happy to listen. But simplicity and reduced volatility are factors in my planning. It used to seem strange to me that coworkers and internet posters loved a particular Fidelity, Vanguard, TIAA-CREF or other fund. Well for some undefinable reason I really like this fund, it just hit the sweet spot on my return, expense, volatility-anxiety matrix. Am I missing something or should I just shut up and stay happy?
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Re: Fund Comfort VS Return
Old 11-01-2004, 01:52 PM   #2
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Re: Fund Comfort VS Return

Am I missing something or should I just shut up and stay happy?

You should read a book from Berstein Called 'The four Pillars of Investing' and all of your above questions will be answered better than anybody can here.

With that said Recent 'Great' performers should be viewed as recency. Remember that successful investing spans a period of 30 years and a good 5 or 10 years of a fund are almost meaningless. Chasing performance is usually a recipe for disaster.

Developing a sound investment plan and staying the course is more important than the plan itself, as investments fall into and out of favor.
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Re: Fund Comfort VS Return
Old 11-01-2004, 02:58 PM   #3
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Re: Fund Comfort VS Return

VAAPX is a timing fund using indexes and cash - using quant methods to vary the mix. It's 25% of our Lifestrategy mod and cons holdings. Sooner or later they will get it wrong (-15+% in 2002). So far it's been ok for us - but I keep looking at the the Target Retirement and also at Wellesley. Our current pensions plus dividend stocks means Lifestrategy sits in reserve.

If I had to pick a long term (20-30 yrs) backup fund(tax deferred) at todays market valuations I dunno - maybe Asset Allocation - I'm leaning toward old school large cap value. Wellesley, Wellington, I believe Dodge and Cox are closed - hence my fear of fishing in fished out waters.

Given that my bell weather - Vanguard Balanced Index has an SEC yield of 2.55% nowadays - ?

I've got a modest amount to bump up the SO's income stream (she nixed ind. stocks) - my heart wants Wellesley but my other brain is leaning toward Target Retirement 2005 or income (10-20 yr planning span).

Sooo - can you define in your mind - what Standard Deviation, SEC yield, planning span you are looking at. It might help your decision making.

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