"Dave Dodson" <dave_and_darla[at]Juno.com> wrote in message
news:1170161446.943186.29080[at]k78g2000cwa.googlegroups.com...
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moving toward the Fidelity Spartan group of index funds...
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I later went back and scrolled thru each fund offering to make sure - and
confirmed the dif.

On Jan 25, 1:49 pm, "jIM" <noreplysoc...[at]hotmail.com> wrote:
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That's a massive weighting in SE Asia!
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Effectively this is a 'value' play. And a good one, long term. For
reasons we don't entirely understand (one of which may have been the
long term effects of personal taxes on dividends, which meant dividend
paying stocks had to be 'cheap' to overcome the cost to investors of
holding them), income tilting equity strategies tend to work over the
long run (the 'value' effect in another form). Normally value is
measured as low price to book in research, however a group of stocks
that pays a good dividend yield is a 'financially secure' group of
value stocks, to a certain extent.

It is also the case that you can't lie about your dividend, whereas
you can make up your earnings. A Board won't authorise a dividend,
unless they really think it will be paid.

It's more tax efficient to buy back shares, but studies show that many
companies that announce share buyback programmes, never complete
them. By contrast, dividends get paid: it is the purest measure of
true profits that we have.

The bad news is dividend payers have done extremely well the last 5
years (part of the same global hunt for yield which has driven REITs
up to premiums to NAV). So the future may not be like the past.

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Convertibles are a specialised area, much frequented by hedge funds.
This makes it hard for the individual investor. Basically, hedge
funds buy the convertibles, and short the underlying stock. They pick
up the yield for free, with no exposure to a fall in the stock price.

Convertibles get over and undervalued, but I have no insight into
where they are now. Tread carefully.

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It should be the case that if you add those up, you get very close to
70% in a Total Market fund. However a TMF would have fewer capital
gains realisations (less disposals), lower turnover (and hence lower
costs) and could/ should have a lower MER.

Beware closet indexing. If an index provider like Dow Jones carves an
index into 'value' and 'growth' stocks, and you own both, you
effectively are owning the index.

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that is a lot for emerging markets. If there was a good international
small stock index fund, I might suggest it. AFAIK there is not (could
be wrong). I think a US investor can afford to avoid the
international small stock effect, and focus on having an exposure to
international stocks via an index fund (which will be mostly or wholly
large caps).

A truly diversified investor would also seek to have an exposure to
gold and gold shares. I must admit I can never make myself put gold
in the portfolio. Gold is a bet, once every 20 years or so, that
everything else goes to hell in a handbasket.
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On Jan 29, 11:28 am, "P.Schuman" <pschuman_NO_SPAM...[at]interserv.comwrote:
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You picked the Advantage Class. There also is an Investor Class of
shares with slightly higher expenses for which the minimum investment
is $10,000.

Dave

"P.Schuman" <pschuman_NO_SPAM_ME[at]interserv.com> wrote in message
news:im4uh.4283$O02.2764[at]newssvr11.news.prodigy.net...
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the minimum for these is $100k
http://personal.fidelity.com/product...vsr?refpr=ipmf
1

On Jan 25, 5:45 pm, darknes...[at]yahoo.com wrote:

Oops I must sound like a total idiot (not for the first time ;-). You
said IRA and I wrote as if we were talking 401k.

The tax implications are different, and I am not an American-based
investor.

As with anything I say, caveat emptor and remember what you paid for
this advice!

On Jan 24, 2:49 pm, "P.Schuman" <pschuman_NO_SPAM...[at]interserv.comwrote:
My suggestion (FWIW):
wife -
Equity-Income - FEQIX - 30%
Convertible Securities - FCVSX - 21%
Small Cap Value - FCPVX - 17%
SE-Asia - FSEAX - 29%

me -
Equity-Income - FEQIX - 30%
Value - FDVLX - 23%
Small Cap Value - FCPVX - 18%
Spartan International Index - FSIIX - 21%
Emerging Markets - FEMKX - 6%

Dave

On Jan 25, 3:52 pm, "P.Schuman" <pschuman_NO_SPAM...[at]interserv.comwrote:
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As always, check the MERs! And the Total Expense Ratios (if available)

The benefit of an index fund is the low costs, plus consistent
middle-of-the-range performance. In the long run, very few actively
managed funds outperform the index. However inevitably some fund
management companies have introduced high cost index funds (for no
better reason than to confuse the customer and extract more revenue).

An alternative is a brokerage type account, where you can purchase (low
cost) ETFs.
Again not all ETFs are created equal-- the Barclays ishares are the
ones I know best, and are fairly low cost.

But for most investors, a low cost index fund should do.

If you wish to add 'spice' to your allocation, then a 'value' fund can
add long term performance (and greater stability in a market downturn).
Value funds conspicuously missed the 'bubble' at the end of 1999
(called the 'internet bubble' but it is a misnomer, in stock market
terms the bubble stocks were more the telecoms and media companies).

*however*

- lots of funds are called 'value'. Few actually consistently pursue a
value discipline (Windsor II, Dodge & Cox, the Vanguard Value index
funds do) of investing in low Price to Earnings and low Price to Book
stocks. I don't know re the Fidelity range that well.

- 'value' has beaten growth very handily over the last few years.
History says at some point this reverses.

A lot of people recommend 'small cap' funds for the same reason
(historic record of outperformance). However I believe that small cap
has done so well relative to large cap, the last few years, that this
effect is unlikely to persist (when it was first widely discovered in
the 1980s, a lot of small cap funds were launched, and the effect
promptly disappeared for most of the 90s).

If one were determined to pursue this, a small cap value fund (with low
costs!) for, say, 10% of the total equity investment would be a
sensible level of risk.

Another thing you need to think about (first, really) is your asset
allocation cash/bonds/stocks. This is what the 'lifestyle' funds do,
and they don't make a bad 1-decision investment for the small investor.
Again I don't know the Fidelity range.

My own view is that those under 40 probably don't want to own many
bonds, and those within 10 years of retirement a lot of bonds. I've
seen formulas like 100 minus your age or 110 minus your age is the
percent in bonds-- both give weightings which feel right (but I am sure
there are more sophisticated ways of working this out).

Another factor is inside/outside tax deferred accounts. In general,
you want your interest income inside the tax deferred account, and your
capital gains and dividends outside (low tax rates). However for most
people, their 401k is all they have in terms of savings that they will
use for retirement, and so my thought is they should go for maximum
capital growth (ie equities).

An advantage of index funds outside tax deferred accounts is that they
should minimise capital gains (they only buy and sell holdings when
they have to) *however* it is important to check the situation within
the individual fund (some have massive capital gains payouts to make).

In terms of which bonds to own, I am a big fan of either short to
medium term corporate bond funds (less than 5 years to maturity, no
'junk') or US real return bonds (TIPS). I see these both as better
substitutes than cash, normally.

I may just start moving toward the Fidelity Spartan group of index funds...
pick 1 of each and that will do it -

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I like Equity Income for long term. An equity income fund is a large
cap fund with a ~3% yield, I think this is a good place for around
20-30% of assets.

FFIDX appears to be overweighted to my taste. FFIDX and FDGRX appear
to be Large Cap growth funds and represent almost 2/3 of your portfolio
and 2/5 of your wife's.

I like to Convertable fund your wife owns. I do not see any domestic
small caps or international small caps. Depending on your age, I also
see very little bonds (this is not a bad thing to me, just an
observation).

My picks are more long term than just one year... I'd decide on a long
term allocation, stick to it, and not worry so much about year-year
changes.

Something like
25% large cap value
25% large cap growth
10% mid cap
10% domestic smallcap
20% international large cap
10% international small cap/ emerging markets

This is similar to the 70-30 split suggested by another poster.

On Jan 24, 8:49 pm, "P.Schuman" <pschuman_NO_SPAM...[at]interserv.comwrote:
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Switch to a US market index fund, and an international stock index
fund-- in roughly a 70/30 split*. The savings in MER are likely,
compounded, to greatly exceed any increment in performance you might
get by trying to pick the 'best' funds.

* there is a case for a small cap value fund for a long term investor.
But small cap has done very well, of late, and so has 'value' over
growth. So I don't expect the returns to be as superior as they have
been, historically.

As some indications lead to a flat growth economy,
thinking about IRA funds for the year.
We currently have all our IRA funds at Fidelity

I've been selling from the Fidelity Growth and Fidelity Fund accounts
which are more large growth and large blend,
and putting the money into the Equity-Income fund.

wife -
Equity-Income - FEQIX - 7%
Convertible - FCVSX - 21%
Fund - FFIDX - 40%
SE-Asia - FSEAX - 29%

me -
Equity-Income - FEQIX - 4%
Fund - FFIDX - 55%
Growth - FDGRX - 18%
Overseas - FOSFX - 21%

comments or suggestions for the year ?