Minimum Mutual Fund Investments

[Camas Lilly]

OK this may be a really stupid question, but if I invest the minimum initial deposit of $25,000 in PIMIX in my Vanguard account, if I withdraw some funds and it goes below this amount, there is no penalty, right? Also I am not sure about subsequent purchases like reinvesting dividends and capital gains into this fund from my other Vanguard funds. Do subsequent purchases have to be a certain amount? Will I be charged a commission on each deposit or withdrawal?

Also does it make sense to spread cash out between PIMIX Pimco Income Fund, FVISX Short Term Treasury Fund, VFSTX Short Term Bond Fund and/or VBTLX Total Market Bond Fund?

 

[OldShooter]

... Also does it make sense to spread cash out between PIMIX Pimco Income Fund, FVISX Short Term Treasury Fund, VFSTX Short Term Bond Fund and/or VBTLX Total Market Bond Fund?

When you don't know where you're going, any road witll get you there. What problem are you trying to solve? Diversification? Some kind of tilt? Or ??

 

[Camas Lilly]

When you don't know where you're going, any road witll get you there. What problem are you trying to solve? Diversification? Some kind of tilt? Or ??

Yes.

Well I want to set some money aside for my bond allocation. I will also use this money to complete my annual draw amount over and above div and cg. I don't need that much, but want to make sure it is still there if we have an extended downturn.

 

[OldShooter]

... to make sure it is still there if we have an extended downturn.

Well if that is the main objective, which DW and I share, then TIPS are the answer. Ideally held in a tax-sheltered account as individual bonds.

The nice thing about TIPS, IMO, is that there really is no significant yield curve so no need for laddering. When we retired our judgment was that our only significant risk was future high inflation. So in 2006 and 2007 we bought a bunch of the longest, lowest coupon, TIPS that were available: 2s of 2026. Longest to minimize screwing around, lowest coupon to minimize reinvestment risk.

With TIPS we give up a few tens of basis points yield, but I view that the same way I view the fire insurance premium on our house. Worth it for the protection we get. I don't think wild inflation or a major house fire are in our future, but I still like having the insurance.

 

[pb4uski]

Yes.

Well I want to set some money aside for my bond allocation. I will also use this money to complete my annual draw amount over and above div and cg. I don't need that much, but want to make sure it is still there if we have an extended downturn.

Sounds like you are looking for a CD ladder for your estimated amounts in excess of your annual draws over dividends and capital gain distributions... you could overestimate and if the maturing CD is more than you need that year then just put the excess on a new CD at the end of the ladder.

 

[Camas Lilly]

Sounds like you are looking for a CD ladder for your estimated amounts in excess of your annual draws over dividends and capital gain distributions... you could overestimate and if the maturing CD is more than you need that year then just put the excess on a new CD at the end of the ladder.

Yes I have been reading a lot about having a combination of High Yield Savings, Short Term CDs, Treasury Bills and Short Term Bond Funds. I would like to put some into PIMCO Income Fund PIMIX though and I understand it is going to follow the market movement somewhat so I was also looking at VFISX Short Term Treasuries, VFSTX Vanguard Short-Term Investment-Grade Inv, VBTLX TTL Bond Mkt and VTAPX ST Inflation Protected Sec.

 

[mickeyd]

Vg pas

Klucich,

You bring up many thoughtful questions. Without us being aware of your full financial situation, it's darn-near impossible to offer good advice. Why not look into Vanguard PAS? The cost only 30bps and you can ask them thoughtful Qs like these.

https://investor.vanguard.com/finan...2019:TXL:TXT:SA:GS:PAS:B:FA:GEN:CLT:FAS:6:SCP

 

[OldShooter]

... I would like to put some into PIMCO Income Fund PIMIX ... I was also looking at VFISX Short Term Treasuries, VFSTX Vanguard Short-Term Investment-Grade Inv, VBTLX TTL Bond Mkt and VTAPX ST Inflation Protected Sec.

Why are you drawn to such complex portfolios? Repeating the earlier question, I don't understand what problem you are trying to solve.