Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 05-05-2008, 09:57 PM   #21
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
Or should I just go for a 50/50 Star and Wellington?
These two have done well but have hight costs. Is it worth the extra costs?

Leuthold Asset Allocation LAALX

GAMCO Westwood Balanced AAA WEBAX
FANOFJESUS is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-08-2008, 05:58 PM   #22
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 471
I own both PRWCX and LAALX in retirement accounts. LAALX has some short stock positions and around 18% intl stocks. I'm not crazy about the ER but as long as they produce decent returns I'll stay with it.

2soon
2soon2tell is offline   Reply With Quote
Old 05-08-2008, 06:28 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Quote:
Originally Posted by FinanceDude View Post
I think one only needs two balanced funds at most, balanced domestic, and balanced international if you want that.

"Slicing and dicing" balanced funds, what's the point?
Because some of them are a wee bit different from each other?

What would you say about a portfolio split 3 ways between Vanguards Star, Lifestrategy Moderate Growth and Target Retirement......oh...2025?

One holds a small number of indexes and changes its allocation towards a higher fixed income ratio over time, one keeps the same balanced ratio of fixed:equity between a handful of indexes and one owns a bunch of thinly sliced actively managed funds.

While they may largely ying and yang somewhat in the same directions to daily market movements, wouldnt that mix produce something of benefit to someone wanting a lot of diversity, reasonable cost, and slow improvements towards a more conservative fixed income/equity position?

Uh, heres the hard part...with no work and no financial advisor?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 05-08-2008, 06:52 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
Quote:
Originally Posted by 2soon2tell View Post
I own both PRWCX and LAALX in retirement accounts. LAALX has some short stock positions and around 18% intl stocks. I'm not crazy about the ER but as long as they produce decent returns I'll stay with it.

2soon
I was thinking like you, these funds are not the best ER but the returns are good. I guess when they fail to beat vangaurd returns that's when I will pull out. I love vanguard but hate to have all my money with them after what happened to me with the Dodge and Cox balanced fund. It just goes to show you never know.
FANOFJESUS is offline   Reply With Quote
Old 05-08-2008, 07:03 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,769
Quote:
Originally Posted by Spanky View Post
One of those funds will suffice - my pick will be Vanguard Wellington because it has a long history and the expense ratio is reasonable.
To quote someone on this board :

PSST!
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 05-08-2008, 07:05 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
A lot of folks liked my original ER idea (circa 2002) of half wellington and half wellesley, which gave you a roughly 50/50 equity/bond portfolio, almost a 4% dividend, and historical capital appreciation (going back to 1929 and 1970 respectively) of another 4-5%.

Well in excess of the recent average for inflation and the fund expenses.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 05-08-2008, 09:07 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
Quote:
Originally Posted by cute fuzzy bunny View Post
A lot of folks liked my original ER idea (circa 2002) of half wellington and half wellesley, which gave you a roughly 50/50 equity/bond portfolio, almost a 4% dividend, and historical capital appreciation (going back to 1929 and 1970 respectively) of another 4-5%.

Well in excess of the recent average for inflation and the fund expenses.

That's a good one too. Also a three some of Star/Wellington/Wellesley would be good too.
FANOFJESUS is offline   Reply With Quote
Old 05-08-2008, 09:33 PM   #28
Thinks s/he gets paid by the post
 
Join Date: Apr 2008
Posts: 2,006
Quote:
Originally Posted by cute fuzzy bunny View Post
A lot of folks liked my original ER idea (circa 2002) of half wellington and half wellesley, which gave you a roughly 50/50 equity/bond portfolio, almost a 4% dividend, and historical capital appreciation (going back to 1929 and 1970 respectively) of another 4-5%.

Well in excess of the recent average for inflation and the fund expenses.
Interesting. There appears to be a lot of overlap in these two funds, but I guess it would be easier selecting these two (or any two or three) in order to get the portfolio diversification you wanted.

I did something similar in my 401K plan (split between two balanced funds), partly because of the ease of managing the stock/bond ratio I wanted and because these two funds were among the better performers the company offered.

Within the taxable accounts, it is a different story. I'm trying to move a large sum from MM/CD/savings to some combination of bonds and stocks. The above portfolio of Wellington and Wellesley would kill me with the taxable bond interest and stock dividends. Nearly all of the balanced funds are geared this way.
statsman is offline   Reply With Quote
Old 05-08-2008, 09:55 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,341
Most of our assets are mostly tax deferred. My biggest fund in a target retirement type fund, DWs largest fund is Wellesley, then we have VG Asset Allocation (VAAPX) for our Rotha bit less than 10% of our assets are in individual stocks.
If all I have was taxable funds and wanted to keep it simple then 50/50 Wellesley/Wellington would be a decent choice.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 05-09-2008, 07:31 AM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Quote:
Originally Posted by statsman View Post
Interesting. There appears to be a lot of overlap in these two funds
That was just a random example, and in this instance there IS some overlap, but the mechanics are different. Star has almost nothing in common with the other two. Lifestrategy moderate is TSM, TBM, and TIM and stays that way. TR2025 is TSM, TBM, europe, pacific and emerging market. So those two share the TSM/TBM component, but the TR2025 loses a lot of its TSM and the three international components over time.

I'd pick something like this if I wanted to be a little bit more equity oriented than the TR series allowed, but still have a conversion (albeit more slowly) from equities to bonds over time...and that 3rd leg gives me a lot more diversity and rebalancing between many other classes that arent heavily weighted in the TR/LS funds.

Quote:
Originally Posted by yakers View Post
VG Asset Allocation
Heres a question for ya. I considered VGAA for my roth, but the chief advantage to it vs a straight s&p500 fund was reduced volatility at the cost of a higher ER. Given that you're not withdrawing from the AA fund in the roth, what would be the advantage of the reduced volatility?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 05-09-2008, 09:34 AM   #31
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 191
rec7 - Was your original plan to split all of your taxable funds across one or more of these balanced funds?

If so, I would consider the following:

+ what are you invested in currently? Will you be incurring a (significant) tax hit to re-align the portfolio?

+ in one of your subsequent posts you are suggesting a 50/50 split between domestic and international equities - you should know that none of your suggested funds have that much foreign exposure (although, since they are all managed, their positions vary over time, I would be surprised they come anywhere near 20%)

+ have you considered munis for your bond exposure?

+ your tax considerations may not be as crucial as they are for someone in early accumulation phase, since (I think) you are living of your investments (i.e., you will not have any negative tax compounding)
lucija is offline   Reply With Quote
Old 05-09-2008, 10:08 AM   #32
Thinks s/he gets paid by the post
 
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
Quote:
Originally Posted by lucija View Post
rec7 - Was your original plan to split all of your taxable funds across one or more of these balanced funds?

If so, I would consider the following:

+ what are you invested in currently? Will you be incurring a (significant) tax hit to re-align the portfolio?

+ in one of your subsequent posts you are suggesting a 50/50 split between domestic and international equities - you should know that none of your suggested funds have that much foreign exposure (although, since they are all managed, their positions vary over time, I would be surprised they come anywhere near 20%)

+ have you considered munis for your bond exposure?

+ your tax considerations may not be as crucial as they are for someone in early accumulation phase, since (I think) you are living of your investments (i.e., you will not have any negative tax compounding)
+ no tax hit to re-align the portfolio

+ I was suggesting a 50\50 split but in that post I was only 50% in equities so only about 25% of the total portfolio in international. A lot of balanced funds are 10-12% international

+ have you considered munis for your bond exposure? I am luckly I am only in the 15% bracket.

There seem to be two camps when it comes to mutual fund as I can see. One the Adam Bold camp he watchs the preformance but the ER is higher. Or the vanguard camp which is to kept the ER down. I see the advantange to each and I guess I am mixing the two a little bit.
FANOFJESUS is offline   Reply With Quote
Old 05-09-2008, 11:03 AM   #33
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 191
Quote:
Originally Posted by rec7 View Post
...I was suggesting a 50\50 split but in that post I was only 50% in equities so only about 25% of the total portfolio in international. A lot of balanced funds are 10-12% international
..
I was thinking 50/50 within the equity portion of your portfolio. 10-15% in international is fine, if that is what you want. However, it may end up being less than 1/2 of the exposure you mention in a non-balanced proposal. I care a lot about allocation, so that's a big deal for me... For example, PRWCX has less than 5% in international at this point.

Quote:
Originally Posted by rec7 View Post
...There seem to be two camps when it comes to mutual fund as I can see. One the Adam Bold camp he watchs the preformance but the ER is higher. Or the vanguard camp which is to kept the ER down. I see the advantange to each and I guess I am mixing the two a little bit.
I like balanced funds a lot and you will rarely go very wrong with them... I think you will be OK with any one of your proposed choices if you decide to go that way.

Also, it's good news you do not have to worry about realignment hit today, but I do think it is a consideration in the future. Suppose you dump the whole thing into one actively managed fund and 15 years down the road the fund takes a dive (by consistently under performing its pears) - what then? Will you be locked in owing that fund (due to appreciation)? This is the reason I prefer index funds in taxable - relative tax efficiency, consistent allocation and no management worries.
lucija is offline   Reply With Quote
Old 05-09-2008, 11:04 AM   #34
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,341
Quote:
Originally Posted by cute fuzzy bunny View Post

Heres a question for ya. I considered VGAA for my roth, but the chief advantage to it vs a straight s&p500 fund was reduced volatility at the cost of a higher ER. Given that you're not withdrawing from the AA fund in the roth, what would be the advantage of the reduced volatility?
Good question. The fund has done what I wanted, maybe I want the wrong thing? I like the lower volatility even though I am not currently drawing from it. After our credit union account it is the next source of 'cash' if an emergency arises. I do not know if we will ever spend it, it may become all the estate we leave to our two sons. But it sits there mostly growing, available for emergencies and could be used as an alternative to liquidating our IRA, stocks or house if circumstances warrant. Maybe there is a better fund but I just like how this fund is run, whenever I start to think I should adjust my AA a little I find the folks in the VG AA Fund have done so already. In 2010 we could go to Admiral shares if we convert other IRA funds to this one. I am open to suggestions but not inclined to change this fund unless there is a really compelling alternative.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 05-09-2008, 11:17 AM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Thanks for the info. Like I said I looked at it for one of our Roth's, but since we wont be touching it for 15-20 years, paying extra for slightly lower long term returns and lower volatility wasnt critical. Since you're leaving it for an emergency cash situation, lower volatility is a more important element.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
24 - Fair and Balanced? donheff Other topics 22 02-12-2007 09:40 AM
Tax-efficient balanced funds ferco FIRE and Money 1 01-22-2007 02:37 PM
Balanced Funds Only? Maneiac FIRE and Money 15 05-22-2006 08:14 PM
Balanced funds in taxable? fire5soon FIRE and Money 9 08-31-2004 06:56 PM
Index Funds or Balanced Funds ? renferme FIRE and Money 5 04-20-2004 04:21 PM

» Quick Links

 
All times are GMT -6. The time now is 07:14 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.