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Stable Value Funds -- Specifically, Morley Stable Value Fund
10-01-2014, 11:59 AM
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#1
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Full time employment: Posting here.
Join Date: Apr 2006
Posts: 969
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Stable Value Funds -- Specifically, Morley Stable Value Fund
I am seeking the collective wisdom here since this is a subject I know little about, stable value funds, and even less about the one I can now access: The Morley Stable Value Fund.
Until recently, I have not had access to a stable value fund; now, the Morley Stable Value Fund is available to me in a 401(k); and, I am wondering if I should take advantage of it.
- At the risk of sounding like a market timer, bond prices frighten me at current levels.
- CD's and savings accounts pay almost nothing currently as we have discussed here for some time.
- I have been purchasing I Bonds, even at these levels; but, they take a very long time to accumulate under current rules.
The Morley Stable Value Fund has a gross expense ratio of 0.56% which seems a bit high but not too outrageous. I honestly don't know what else, if anything, I should be concerned about with this vehicle.
Mods: Please feel free to move this to Stock Picking (Individual Security Analysis) if you think that is a more appropriate forum for this thread.
Thank you all in advance.
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10-01-2014, 01:25 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
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What is it currently paying? I wish I had access to one that pays a decent rate. Focus on the return to you rather than the expense ratio. I would look at it as a CD alternative.
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If something cannot endure laughter.... it cannot endure.
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Slow and steady wins the race.
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10-01-2014, 01:51 PM
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#3
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Full time employment: Posting here.
Join Date: Apr 2006
Posts: 969
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Quote:
Originally Posted by pb4uski
What is it currently paying? I wish I had access to one that pays a decent rate. Focus on the return to you rather than the expense ratio. I would look at it as a CD alternative.
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Current YTD return is an anemic 0.70% (apologies for that important omission in my original post).
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If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
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10-01-2014, 02:05 PM
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#4
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Full time employment: Posting here.
Join Date: Oct 2009
Posts: 640
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Some split the difference for the fixed income portion: 50% bond fund, 50% stable value fund. I did that until recently but reverted back to 100% bond fund once the stable value fund return dropped below 1.5%. I don't know what to do either.
The expense ratio of the stable value fund available to you sounds high to me.
But then, as I always note, I'm not a financial advisor...
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10-01-2014, 02:14 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2008
Posts: 2,796
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I have 3 different stable value funds, and I have 75 percent of my 401k money in them. They each have an ER of about 0.5 percent. After the ER is deducted, one gets 2.9 %, one gets 2.3% and one gets 1.1 %. I keep most of my $ in them since I don't like risk, and also don't like plunging stocks and/or bond funds. I don't like the low interest rates, but..... what's the alternative, right?
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10-01-2014, 02:24 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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I have about 2/3 of my fixed income in a stable value fund from Nationwide in my 457k earning 3%. There is no expense ratio for this. The other 1/3 is in Pen Fed 5 yr. CD earning 3% also. So I guess I am pretty lucky and out of bonds completely.
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10-01-2014, 03:20 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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My stable value (called stable return) fund is getting 0.97% net year-to-date. I will pay ordinary income tax on withdrawals, but for now it doesn't go down. I think of It like a second-tier emergency fund, not an investment.
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10-01-2014, 05:04 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 1,639
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My stable value fund is Vanguard Retirement Savings Trust - currently paying around 1.85% and ER of .53.
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10-01-2014, 05:13 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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We have access to a SV fund via DW's employer, but I've always avoided it because the ER is 0.83% and it has some very harsh trading restrictions. But I just checked the yield, which is 1.83% YTD. That seems not-so-horrible by comparison to other numbers quoted in this thread. Is that a decent yield for SV?
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Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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Stable Value Funds -- Specifically, Morley Stable Value Fund
10-01-2014, 05:17 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2011
Location: NC Triangle
Posts: 5,807
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Stable Value Funds -- Specifically, Morley Stable Value Fund
Quote:
Originally Posted by Cobra9777
We have access to a SV fund via DW's employer, but I've always avoided it because the ER is 0.83% and it has some very harsh trading restrictions. But I just checked the yield, which is 1.83% YTD. That seems not-so-horrible by comparison to other numbers quoted in this thread. Is that a decent yield for SV?
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I compare to what I would get in a money market fund. You don't know that numbers people post here are accurate.
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10-01-2014, 09:17 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 2,223
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I have access to stable value funds in 401 and 457 plans. During the last year , both have been in the low 2% range. The rate changes every quarter. They seem to lag general interest rates by about a year , both on the up , and , down.Remember stable value funds are not gov. guaranteed.
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10-02-2014, 11:42 AM
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#13
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Moderator
Join Date: Oct 2010
Posts: 10,723
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My whole bond allocation is in stable value, whereas it used to be split evenly between international and domestic bond funds. In August the stable value fund paid .2843%, so if I multiply that by 12 (months), it looks like 3.4% or so.
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10-02-2014, 02:47 PM
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#14
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Full time employment: Posting here.
Join Date: Apr 2006
Posts: 969
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Thanks to all who have contributed.
My thoughts so far:
1) A good stable value fund would be useful to reduce my portfolio volatility.
2) The only stable value fund which I currently have available is not particularly good (comparing its yield to that of others in this thread).
I was just notified of coming changes to one of my 401(k) plans; so, I am hoping for a better option soon.
Thank you all again.
__________________
If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
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10-02-2014, 03:22 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Good vs bad in an SV fund is no different than any other investments. Some hold only short term treasuries while others will be mostly GIC's etc. Some with longer duration holdings may place restrictions on withdrawals to protect the fund. Lot's of variables beyond the yield.
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Took SS at 62 and hope I live long enough to regret the decision.
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10-02-2014, 10:40 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by brewer12345
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Super explanation, thanks Brewer.
Ha
Sent from my iPhone using Early Retirement Forum
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10-03-2014, 05:34 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by haha
Super explanation, thanks Brewer.
Ha
Sent from my iPhone using Early Retirement Forum
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Yes, it is. The only time I am aware of losses was to employees in Lehman Bros' plan (you can guess when that happened).
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10-03-2014, 10:54 AM
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#18
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Full time employment: Posting here.
Join Date: Feb 2008
Posts: 920
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100% of our bond allocation is currently in a Stable Value Fund, paying 1.85% with a 0.44% ER.
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10-04-2014, 07:58 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 4,872
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When I retired early at 52 I moved half of my bond allocation to the stable value fund in my 457 plan. It's one year return is 2% with an ER of 0.4%. I have enough in it to cover my expenses until I reach 59.5, I don't want a market crash to force me to sell low. If equites do well I use those for income, if not I'll tap the stable value fund.
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“So we beat on, boats against the current, borne back ceaselessly into the past.”
Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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