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Old 07-05-2007, 12:19 PM   #21
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I'm wondering what flipping 10-20% between equities and cash is going to do to the tax efficiency.

At least I dont own the sucker...anymore...
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Old 07-05-2007, 07:33 PM   #22
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Originally Posted by FIREdreamer View Post
I agree with the bunny,

I checked the AA of the VG Asset Allocation Fund just a few weeks ago and on the Vanguard website at least it was listed as 100% invested in equities.
Good to know.

Maybe it bounces around a bit? Prior to April every time I checked it was 100% equities, then I noticed 10% cash and later 20% cash. Now that I think about it, it seems unusual that AA allocation apparently moves in blocks of 10%, instead of 6% or 17% cash...

I think I'll read much less in to AA's future neat and precise 10% shifts

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Old 07-06-2007, 03:04 AM   #23
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I am not sure how much cash I am holding at this point... due to money managers being in cash. I even noticed on one of my index funds that a substantial amount is in cash.

DW has PTTRX (bond fund)... the manager is almost all cash. That thing represents about 12% of our assets. Add the 3% we are holding in cash... we are at least holdin 15%. I suspect if I looked at all funds combined, it is probably close to about 20%.

It is an interesting thought though. Funds usually keep x% in cash equivalents for liquidity. I have a 60/30/10 target @ ER. The 30/10 is controlled by me allocating. IF the funds have another 5% in some sort of short-term instrument... I actually have a 55/30/15 allocation. It is not enough to try to make any adjustments to compensate... but it does explain for some slight variation in funds compared to the benchmark.
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Old 07-06-2007, 07:54 AM   #24
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Mutual fund managers have cash for several reasons:

1)A huge influx of cash that they need time to figure out how to invest.

2)Keeping some available for opportunities that could come along soon.

3)If redemptions start running higher than normal, they would rather pay cash than sell their positions to meet them

4)To protect the fund's shareowners in volatile markets.

I remember AGTHX was 30% in cash in 2000 and 2001. I don't think their shareholders got too pissed when they were buying short-term Treasuries instead of ORCL................
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

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