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sundance 07-06-2011 05:15 AM

Portfolio
 
I have some cash sitting inside an IRA that is in the prime money market account at Vanguard & I am thinking about a 50/50 split in Vanguard of the Dividend Stock Index and High Yield Corporate Bond Index instead of using Wellington Fund. Bulk of my retirement fund is in a diversified portfolio with my old job. I am probably going to roll it all over to Vanguard as I am retired. Any thoughts??

mystang52 07-06-2011 05:57 AM

I had a few rollover IRA's and old 401k's due to job changes in the past, and decided to move all of them into Vanguard. From a mental perspective, I am glad I did as I now have virtually all of my retirement funds in one place -- it makes life simpler.
From a financial perspective, it helped in that the aggregate amount got me the free advice of a Vanguard financial advisor. While I didn't follow all of his suggestions, he did give me the knowledge base I needed to help in allocating my and DW's retirement funds. Without knowing your specific financials, all other things being equal I would recommend rolling your retirement $$ to Vanguard or one of the other trusted fund families.

2B 07-06-2011 08:21 AM

I would suggest you educate yourself more about asset classes and diversification. Read William Bernstein's book The Investor Manifesto. It's a pretty straight forward presentation.

Nords 07-06-2011 09:18 AM

Quote:

Originally Posted by Carol911 (Post 1086336)
I have some cash sitting inside an IRA that is in the prime money market account at Vanguard & I am thinking about a 50/50 split in Vanguard of the Dividend Stock Index and High Yield Corporate Bond Index instead of using Wellington Fund. Bulk of my retirement fund is in a diversified portfolio with my old job. I am probably going to roll it all over to Vanguard as I am retired. Any thoughts??

What 2B is pointing out is that you're asking a trick question.

You haven't said anything about your overall asset allocation or your plans for the money. Heck, you haven't even discussed why the 50/50 split is a better deal than Wellington.

Our thoughts are that you need to figure out what overall asset allocation makes you most comfortable with risk, volatility, and return. It'd be good to decide when you're going to rebalance. You might even go as far as a Bogleheads' "Investment Policy Statement". But even with just an asset-allocation plan, then you'll quickly be able to decide what to do with the IRA cash.

Otherwise you're just randomly hunting & pecking around the root problem.

LOL! 07-06-2011 11:43 AM

I have to go along with what the others said.

Let me ask you this: Why did you pick those two funds? What's your plan?

sundance 07-06-2011 05:41 PM

I have a 401K with my former employee. Its asset allocation is about 80/20 Lge cap, Mid cap, small cap, international & Total Bond index fund (20%) each. So I thought I would put this in dividend paying stocks & a corporate bond index. Its been in cash way too long. We are in the process of moving my husband's 401k over to Vanguard. He also has an IRA with them (the Wellington Fund ) I thought my idea was straight forward. Are Corporate Bonds too risky

LOL! 07-06-2011 07:23 PM

High-yield corporate bonds is a euphemism for junk-bonds. They have stock-like risk.

Investment-grade corporate bonds, particular short-term ones, are riskier than Treasuries, but not as risky as stocks.

Your total bond index has corporate bonds in it. Lots of them.
Your large-cap, mid-cap, and small-cap funds have dividend-paying stocks in them. Lots of them.

I see no reason to have something different than what you already have in the 401(k). You didn't really explain why something different would be desirable.

I looked up the past thread you started about IFA. Did you follow any of the advice in that thread? Just wondering.

Nords 07-06-2011 08:49 PM

Quote:

Originally Posted by LOL! (Post 1086589)
I looked up the past thread you started about IFA. Did you follow any of the advice in that thread? Just wondering.

Ah, another poster whose approach seems to be "I'm not going to read any of the textbooks or do any of the homework... I'm just going to keep asking questions."

sundance 07-07-2011 05:58 PM

Everybody thanks for the info. I understand asset allocation but quite frankly I am not sure I buy into the whole diversification since the "BIG DROP". I guess you can say I lost courage but . My husband (little grumpy) and I are moving money from our old company. He's moving his to Vanguard & I'm moving mine to I'm not sure. We are doing my version of slice & dice. I 'm not sure I want everything in one spot. I am thinking T Roe or T.D. Ameri. BUT I will not be doing IFA. Get back to you later

LOL! 07-07-2011 06:41 PM

I prefer WellsFargo PMA relationship with free commissions to my other financial institutions including Vanguard, TDAmeritrade, and Fidelity. All of these have no commissions on at least a selection of usable ETFs. So if you don't want to go to Vanguard, there are other options with no commissions. TRowePrice is not one of them.

At this point in time, everybody should have completely recovered from the BIG DROP. That by itself should be confirmation that asset allocation along with rebalancing works and that fear does not work.

mmgoebe 07-08-2011 03:54 AM

I'd pass on the Dividend Stock Index, and be inclined to buy a few high quality dividend stocks / partnerships / REITs (with the down RE Market). Have the dividends pay into a seperate money account for spending or gifting.


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