Bob,

Ok, thanks for the info on stable value. Then the only concern I have
for your portfolio is your mix of equity and debt exposure to the
Pacific Basin. That could be a non-issue.

Nice work!

Jason wrote:

- quote -

Actually, I have a strong bias towards "value" equities, and I think
dividends are a good thing. (creative accountants and CEO's can
manufacture "earnings" out of thin air, but it's hard to fake a dividend.)

- quote -

The Stable Value fund is a bond fund. Well, not exactly; it is a debt
fund. It has chugged along earning 5 to 8 percent (usually closer to
6%) for years, independant of the bond market or equities markets:

"The Stable Value Fund seeks to preserve principal
and provide income at a stable rate of interest that
is competitive with intermediate-term rates of
return. The fund invests in fixed-income securities
and book value wrap contracts issued by banks and
insurance companies, which provide for the payment
of a specified rate of interest and for participant
withdrawals at book value (i.e. principal plus
interest). The wrap contracts provide a rate of
interest that will generally reflect movements in
market rates of interest, but which may at any
time be more or less than the actual income
earned by the fixed income securities."

Best regards,
Bob

Bob,

I'll leave your financial relationship with your wife out of any advice
here....

Your current holdings scare me. You have 84% of your holdings mainly
in US Large Cap Equities. Yikes!

Your planned holdings look ok. You do have a strong bias towards
income providing funds, which is conservitive at your age.

What is the difference between the equity income fund, and the stable
value fund? My guess is that they share a lot of similar holdings. I
would call that 50% US Large Cap Value, which is still to high.

I like the Small Cap Value, and the REIT. Good allocations for your
age.

I would look a little further into the holdings of the emerging markets
bonds, and the Pacific Basin index. If your bonds fund is more then
50% exposed to the Pacific Basin, I would opt for more of a latin
america debt fund if you want to stay forign. Then again, I dont like
forign debt securities. They are far more risky then US Debt
securities (one nice thing about the SEC).

If I were your age I would have the following:
US Large Cap Value - 25%
US Small Cap Growth - 15%
REIT - 10%
International Fund - 20%
I-Bonds - 15%
High Yield Fund - 15%


- quote -

x-no-archive: yes
allgyerj[at]hotmail.com wrote:

- quote -

46 years young ;-) Married. One kid that'll be going to college in a
couple of years. About $40000 in mutual funds/I-bonds/EE-bonds
earmarked for college, and I've stopped contributing to all the college
funds and plan to pay-as-we-go for college expenses and let DD get a
student loan if there's not enough money.

I put 6% of my salary in the 401(k) to capture the entire employer
match, then I max out my Roth IRA, and I've just recently upped my
401(k) from 6% to 10% pretax withholding.

I can't accurately access my own risk tolerance, so here's a lot of
relevant info:

I have no debt whatsoever, although my wife has a lot of credit card
debt on cards in her name only that she doesn't think I know about. I
closed all the joint credit accounts a few years ago and it took me
about a year to pay them all off. Apparently, my retirement savings are
supposed to cover both of us because she has not contributed anything at
all to her retirement accounts that I seeded a long time ago. We don't
talk much about money. I'm not sure what happens to her unsecured debts
if she dies before I do, but I'll worry about that if/when the time comes.

About 15% of my liquid assets are in short-term CD's right now, earning
pitiful interest.

I have a taxable account that is mostly in dividend-paying large caps,
although I've been selling off a few positions lately and buying
preferred stocks and exchange-traded debt securities (and I plow the
income back into more investments) Every time I've tried to dabble in
small or mid-cap individual stocks I've gotten burned -- probably
because I'm a sucker for "value traps".

Most of my Roth IRA is in foreign stocks right now. I'm getting nervous
about my largest 2 holdings because they are up so much in the past 2
years, but they still look cheap to me.

I just looked up my current 401(k) holdings:
Large Cap Index fund 71%
Stable Value fund 13%
Small/Medium Cap Index 12%
Total Bond Market 2%
Employer Stock 2%

I'm thinking of not moving any money around within the account but
changing my future contributions to something like this:

Equity Income fund 35%
Small-Cap Value 20%
Stable Value fund 15%
Hi-Yield & Emerging Mkt Bonds 10%
REIT index 10%
Pacific Basin Stock Inx 10%

This looks kind of risky, but remember that I still have most of the
existing funds in large-cap index and stable value funds. I'll probably
need to rebalance it again in a few years.

So, wha'd'ya think? (snip most of this info when you reply, I don't
really want it archived) Thanks.

Best regards,
Bob

bob,

Whats your age? Allocation? Risk tollerance?

- quote -

Why not tell us your age and the percentage of assets in each
investment or investment class and let us comment on your asset
allocation in whole?

For example, I am 63 years old. My retirement assets are allocated as
follows:

60% in U.S. equities
13% in foreign equities
10% in bonds
5% in commodity linked notes
5% in floating rate notes
4% in REITs
3% in cash

I expect to continue a similar allocation well into my retirement
years.

Dave

zxcvbob wrote:
- quote -

Why not tell us your age and what percentages you have in what
investments so we can comment on your asset allocation in general.

Example: I am 63 years old, have 58% of my retirement assets in
domestic stocks, 13% in foreign stocks,

I think using stable value fund+stocks while still working is a
reasonable direction. I don't plan on using bond funds until I am
fully retired and need the income.

Bonds offer good alternatives to stocks for diversification purposes,
but my strategy is to put around 90% of my investments into stocks, the
other 10% in to cash, then using the cash to buy more stocks when the
market takes a dive...

avoid bonds until you need INCOME is my advice

"Bucky" <uw_badgers[at]email.com> wrote
- quote -

Typically, as interest rates rise, the NAV drops and the
yield rises in fairly direct proportion to the NAV drop,
even for inflation protected bonds. So as another poster
pointed out recently, buying bond funds during a low, but
rising, interest rate environment will lock in an interest
rate on the original principal.

I checked this reality not long ago. It's an argument for
staying out of intermediate and long-term bond funds right
now.

zxcvbob <zxcvbob[at]charter.net> writes:

- quote -

I-bonds are not "currently yielding over 9%". I-bonds purchased from
Nov 2000 and April 2001 are currently yielding over 9%, because those
bonds are CPI+3.5% (for life). But you can't buy those anymore.
I-bonds you buy today are CPI+1% (for life).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

anoop wrote:
- quote -

A bond fund's price will initially drop when interest rates rise
(that's how bonds work). But later (probably within a few months), the
return will be greater because the yield is higher. If you look at the
chart in the link below, FINPX has grown over the past 2 years despite
continually rising interest rates. Remember to look at total return,
not just the NAV price.
http://content.members.fidelity.com/...146604,00.html

zxcvbob wrote:
- quote -

I-Bonds are currently at 6.73%. But that's pretty misleading, because
I-Bonds uses inflation numbers for the past 6 months, and inflation
temporarily spiked from the gas prices over the past 6 months. The
I-Bonds rate will probably be very low in April as numbers average out
over time.

The real number to look at is the yield for a TIPS funds. Currently it
is about 1.9% (before adjusting for inflation). Add on 3% for
inflation, and you get about 5% total yield. Seems good to me.

anoop wrote:
- quote -


Yes, I'm currently putting about 20% in a stable value fund. I thought
with I-bonds currently yielding over 9%, the inflation protected bonds
fund might do better than the stable value fund or the "total bond
market" fund. (I just discovered that my plan offers an IP bond fund,
and I haven't gotten a prospectus yet)

Bob

zxcvbob wrote:
- quote -

I-Bonds are OK. I personally don't like TIPS. While interest
rates have been going up, the return on FINPX has been falling.
What kind of inflation protection is that? :-)

I probably don't understand how funds that invest in TIPS work
so I'll stay away from them until I do. At this point, I'd rather
have the money in cash than any kind of bond fund.

Do you have a "stable value fund" as an option?

Anoop

I have way too high percentage in large cap USA stocks. What do y'all
think about inflation protected bonds?

Thanks,
Bob