pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Might be too late. Postal post #20 didn't help your cause.
I just dont want to get off to a bad start in this forum. We all have different opinions.
@michaelc, a few thoughts:
Your fund, PRWCX, has really not produced "amazing" results. According to Schwab's analysis tools, $10,000 invested 10 years ago has grown to $31,500. The same $10K, invested in the S&P 500 would have grown to $36,982. (I am not sure if they are comparing to the index or to an S&P index fund. If the former, then a fund would not have delivered the full $36,982 but it would be very close. The problem with PRWCX is probably that its bonds are holding down performance. Preferences and risk tolerance vary, but at your age and with your 10 year horizon I think 100% equities is likely to win the horse race. ....
Well, different strokes for different folks. We were close to 100% equities until we actually retired. But that's why I said "Preferences and risk tolerance vary ... "Are we looking at the same thread? OP is 57 and your're recommending 100% equities? I concede that the OP has a 10 year runway, but even so, 100% equities seems too aggressive to me in that situation.
Yup. Guilty again. And back to the 100% recommendation. Dragging all those bonds like a boat anchor seems silly to me.Also, you're comparing PRWCX to an equity index fund when PRWCX is ~55/45 seems like comparing apples and oranges. PRWCX compares very favorably to a conventional 60/40 index portfolio.... see post #16.
And if it is all bonds? Both are irrelevant hypotheticals. As you say, we don't know. But of course that never stops this group. That's why I encouraged him to look at his big picture and not just at the Roth.Finally, we don't know the OPs overall AA.... we just know that the PRWCX/Roth is 19%.... so if his tax-deferred is all equities then his overall AA would be about 91/9.
Im about 60% equities, 40% fixed in my 403(b).
michaelc,Referring to a FA I just met with for advice as "an idiot" is not necessary, but ok, I understand.
target2019, my ROTH is held directly with T Rowe Price, just the one fund, Capital Appreciation.
Excellent point.2. Expense ratio of PRWCX is too high (.71) to hold for a long time.
@michaelc, this post is good counterpoint to mine. While I would encourage you to not let fear drive your investing it is equally valid, as @kjpliny suggests, to trade some volatility for adequate peace of mind.Welcome to the forum!
I don’t have high risk tolerance and I’m 5 years younger than you, but I am really comfortable with the Wellesley fund. I do not suffer from FOMO (fear of missing out) syndrome, nor am I a devout follower of the pervasive Greed is Good mentality. I sleep well at night, I’m happy and don’t really need much more than what I already have. I would absolutely be crushed mentally by a severe market crash were one to happen and If I was more exposed to stocks. I would rather make little than lose most of what I have worked for my whole life if things went really bad and didn’t recover. I also don’t fully trust these manipulated markets, but I really have always been somewhat suspicious of the markets...it runs in the family genes.
My best advice for you is to go with an asset allocation that you are comfortable with, in good times and in bad. Staying the course can sometimes be your best approach as long as you are meeting your financial and quality of life goals.
Target2019,
Thanks, but I dont know where you are seeing PRWCX was down 40% in 2008/2009. According to Yahoo Finance, is was only down 27.17% in 2008.
Peak to trough...Target2019,
Thanks, but I dont know where you are seeing PRWCX was down 40% in 2008/2009. According to Yahoo Finance, is was only down 27.17% in 2008.
Peak to trough...
22.33 on 7/9/2007
11.81 on 3/2/2009
-47%
I could be wrong. My first WAG was eyeballing a chart on my phone earlier.
I agree, Wellesley is more appropriate for conservative investors in retirement.
Wellington is Wellesley's less conservative cousin.
However, you should probably also think about tax efficient placement. I would decide what I want my overall asset allocation (AA) to be, then fill the 403b with fixed income up to your fixed income allocation and the fill out the rest with stocks. That will also put higher growth equties in your tax-free Roth and keeping bonds in your 403b since withdrawals will be taxes as ordinary income when withdrawn.
Having stocks in tax-deferred accounts effectively converts growth that would be tax at preferential tax rates to income that will be taxed at ordinary tax rates.