"anoop" <ghanwani[at]gmail.com> writes:
- quote -

All the "target maturity" funds do this. Effectively, when
one buys into such a fund, one locks in a yield - if one
holds the fund until the target maturity date. See, for
example, the most well known set of them - American Century's.

- quote -

That's different. Here's a nice page explaining what they are.
Thanks, again, to google for finding it:

http://www.comerica.com/cma/cda/main...A_1907,00.html

They are *not* available in non-retirement accounts. There
had been a couple which were available for IRAs, but that
was a recent development and, IIRC, the companies are cutting
back on them.

The ones available for IRAs may be called "Stable Value Mutual
Funds" (as opposed to "Stable Value Funds" which are only
accessible to institutional accounts).

Here's way more than you ever wanted to know about them:
http://www.stablevalue.org/

In particular, see:

http://www.stablevalue.org/help/faq_main.asp
http://www.stablevalue.org/help/faq_mf.asp



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Thanks, Tad. I woundered my nobody could match my 401k's "Fixed
Income" fund. I believe it had some leverage in it also.

The only thing I have found that is similar is Nuveen tax free ETFs.

Frank

anoop wrote:
- quote -

Anoop,
A true "stable-value fund" isn't available in a regular account. It's a
special category that's carved out for qualified assets and some Section
529 plans.

If it's any consolation, the "stable value" is a bit of an accounting
fiction. Usually a good portion of the money goes into things that
aren't marketable in the way that bonds are (GICs - essentially
insurance company debt obligations). But the true value of these GICs is
tied to interest rates in the same way that bond values are tied to
interest rates. The value is stable only because the investments aren't
revalued with every sneeze in short-term interest rates. This is allowed
under regulations that apply the assets. The SEC was recently looking
into whether it's appropriate to keep that stable valuation with the
mutual funds that are offered for IRAs - I don't know how that worked out.

Not to bad mouth them, they can fit in well if you need that kind of
characteristic in the account where they're offered. They typically have
higher yields than a MM fund or CD, because the contracts they're buying
have slightly higher risk. But if you can ignore the fluctuations in NAV
you'd probably find the long-term returns of a high-grade
short-to-intermediate bond fund to be similar.

-Tad

IG = investment grade

Thornburg has, for one, a "Limited Term Income Fund, Class A" (THIFX).
Thornburg describes this as "a laddered portfolio of short/intermediate
investment grade obligations with an average maturity of five years or
less."

But my take is that any typical investment grade bond fund does the same.
Chart THIFX and FTHRX (Fidelity's intermediate term investment grade bond
fund). They track very closely. Most importantly, neither THIFX nor FTHRX
ensure one gets back all of one's principal. This contrasts with BTTNX,
which has an exact, target maturity year, and where one does get back all
one's principal if one holds through that year.

I'm not certain, but it seems to me that what Thornburg is doing has the
potential to support some not-so-ethical sleight-of-hand. Note the fees for
THIFX, too. Wow!

"msg_board_member" <msg_board_member[at]hotmail.com> wrote
- quote -

I think Thornburg does laddered bond funds also (maybe)?

BTTNX is the symbol for one of six "target maturity" funds managed by
American Century. All of BTTNX's bonds mature in 2010, and the fund
dissolves the same year. See American Century's web site
http://www.americancentury.com/funds...cat=Bond_Funds
for descriptions of similar funds maturing in 2005, 2015, 2020, 2025, and
2030. E.g. "Target Maturities Trust: 2005," BTFIX.

(Credit to a poster at misc.invest.mutual-funds who recently mentioned
this.)

"anoop" <ghanwani[at]gmail.com> wrote
- quote -

zxcvbob wrote:

- quote -

Does anyone know of such a fund that is available for non-retirement
accounts?

Anoop

John, you're right.

"John A. Weeks III" <john[at]johnweeks.com> wrote
- quote -

In article <ruFYd.7478$oO4.3030[at]newsread3.news.pas.earthlink.net> ,
"Elle" <elle_navorski[at]nospamearthlink.net> wrote:

- quote -

I agree, but how do you get them in a 401K? Most people have very
limited 401K choices, often with all of the choices having greater
than 5% front end load. I find this funny since if you would cut
people's pay 5%, they would riot in the streets. But do it in the
401K, and almost nobody seems to care.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Joe wrote:
- quote -

Hi Joe;
It is best to max the 401K the contibutions are invested on a regular
basis and has the advantage of dollar cost averaging. The Roth IRA is a
ideal investment for a young person if they have additional funds...it
grows tax free.
As you are starting, I would suggest that you concentrate on Index
Funds...Equity Index 500 - Total Market - and 15% to 20% International
Index.
T Rowe Price or Vangaurd web sites are very good resource for
investing information and go to your local library, there you will find
many books on investing, particularly any of John C Bogle.."The Father
of Index Funds"
The best of luck
Richard

Joe wrote:
- quote -

If you are interested in bond funds, you need to get their prospectuses
and see what their stratagies are. Interest rates are rising, and bonds
usually lose equity when interest rates go up. Short-term bonds are
less affected by this than long-term bonds. If the fund hold bonds
until maturity, the price volatitiy doesn't matter. If the fund invests
in short-term bonds, the price will be pretty stable.

I've never seen a bond fund that stated they held all bonds to maturity,
but a small amount of my 401k is in a bond fund called the Stable Value
Fund (not sure what the fund name actually is), and it somehow rocks
along earning about 5 or 6% no matter what the bond market or the
equities markets do.

Best regards,
Bob

Conventional wisdom is to have some of one's investments in investment
grade bonds, but not necessarily bond funds, to help 'balance things out'
in the event of a stock market decline.

Given the current low interest rate environments, I think this wisdom needs
to be refined for the long-term investor.

Individual bonds and CDs, preferably laddered, seem to me the better choice
than an investment grade bond fund right now.

"John A. Weeks III" <john[at]johnweeks.com> wrote
- quote -

In article <A7tYd.1475$qW.64[at]newsread3.news.atl.earthlink.net> ,
"Joe" <joe[at]noone.com> wrote:

- quote -

Most pundits suggest using the 401K up to the match (get the free
money), then max out your Roth options (if you have any), then
come back and max out the 401K, and then do any traditional IRA
investments (if you are allowed to). If none of that works, some
folks suggest a tax efficient mutual fund such as one of the major
index funds.

- quote -

If the market goes down, all of these go down. It would be nice
to have something in there to balance that out a bit. Perhaps
a little in a bond fund or a balanced fund would be nice. Next,
I'd like to see more large cap action since that was a key driver
in the last bull market. Finally, a little international action
might be nice given how fast our government is exporting our
national wealth.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Joe wrote:

- quote -

Beyond the employer match, contributing to a Roth or Traditional IRA or
529 College Savings Plan is an alternative to further 401(k)
contributions, but it is probably better to exhaust these
tax-advantaged opportunities before saving in a regular taxable
account.

- quote -

<list of funds snipped
- quote -


Here are some historical returns by style and market cap, taken from
the Journal of Indexes at
http://www.journalofindexes.com/contents.php?id=526 . Value has
substantially outperformed growth over the last 10 years for small and
mid-cap stocks, and academic studies have also found this effect over
longer time periods. Therefore I would suggest mixing non-style-based
index funds with value funds, rather than the growth funds you are
currently considering.

2004 2003 3 Year 5 Year 10 Year

Barra SmallCap Value 23.23 40.03 13.86 15.07 16.07

S&P Smallcap 600 22.64 38.77 13.26 11.59 14.28

Barra SmallCap Growth 22.01 37.32 12.35 7.1 11.57

Barra MidCap Value 18.93 40.18 14.44 15.47 16.81

S&P Midcap 400 16.47 35.59 10.51 9.53 16.09

Barra Large Cap Value 15.71 31.79 6.46 2.48 12.24

Barra MidCap Growth 14.01 30.95 6.47 3.92 15.24

Standard & Poor's 500 10.87 28.67 3.58 -2.3 12.07

Hello all,

I've recently started taken an interest in investments and such. For now,
I'm only contributing to my 401K (10% with 4% employer matching). I have a
couple of questions. First, is it best/wise to max out the 401K and put
into it as much as I can (assuming I have my financial house in order with
consumer debts, etc,. etc.). Or is it best to do the minimum employer
matching, then possibly invest outside the 401K.

Second question is, I'm trying to determine a good allocation for my 401K
plan. I'd like to go pretty aggressive since I"m pretty young, and I'm
wanting to save for retirement but am not quite sure if I'm approaching it
OK. Listed below are the funds I have available from my 401K plan.

Intermediate Govt Bond Fund
Core Bond Fund
Strategy Income Allocation
Strategy Growth & Income Allocation
Strategy Growth Allocation
Strategy Aggressive
Large Cap Value
Equity Index Funds
Large Cap Growth Opportunities
Mid Cap Value Fund
Mid Cap Growth Opportunities
Small Cap Valiue
Small Cap Select
Small Cap Growth
International Fund

I was thinking of doing the following:

50% Small Cap Select (Growth)
30% Mid Cap Growth
20% Equity Index Funds

I know this is fairly aggressive, but I'm not sure if this is appropriately
diversified or not. Should I be spreading it accross more funds and/or
possibly including one of the bond funds? Thanks for your help in advance.

Joe