I appreciate all the advice from everyone. I think I am going to pay
for Fidelity's portfolio advisory service. I don't have the time or
the mental capacity to manage all of this one my own, and its
stressing me out.

Thanks for everything

Dan

On Feb 12, 4:46 pm, "dan" <dan.gos...[at]gmail.com> wrote:
- quote -

http://personal.fidelity.com/product...html?315792416

Fidelity Freedom 2050 fund. You will be 72 in 2050, I believe.

http://personal.fidelity.com/product...html?315911404

Total market fund ($10k minimum investment)

http://personal.fidelity.com/product...html?31634R109

FFNOX

provides almost the suggested asset allocation (a bit lighter on the
international side).

FFNOX would be a 1 decision fund.

I'm all for risk, *but* I submit to you that the risk is taking on
equities, and international equities.

None of the other risks you can take on have a return worth it*, in my
mind. The big risk and return decision is to be in equities.

We are also at an apparent peak of the cycle for 'risky' assets. The
premium for risk over safety, eg emerging market bonds vs. US treasury
bonds, is at record lows. Ditto high yield bonds over treasuries.
Experience says that when the risk premium moves, the 'snap' back to
historical levels of risk premium will be quite painful.

This will be as true of equities as of debt.

FWIW in 17 years of tracking markets, US big cap stocks have never
been as cheap relative to all the alternatives, as they are now.

* exception. Over the long run, small cap value outperforms, (and
small cap growth underperforms everything else). But it's a lot to
bet your retirement on the persistence of a phenomenon which is well
documented-- once these things are discovered, they tend to go away.

If you were feeling really racy, you could put 30% your money into
small cap value funds.

http://personal.fidelity.com/product...html?316389832

they call it a 'value' fund, but then put it in the 'blend' category
on the matrix-- go figure.

I'm actually going to keep everything with Fidelity, it's just easier
for me to keep everything in one place, even if the cost to purchase
the fund is a bit higher. Not sure if I can still buy those funds
that I need with Fidelity.

For the person that mentioned lifecycle funds, its seem to me that
they are too conservative. Im 26 and have 30+ years to go, I'd prefer
to have an extremely high risk portfolio

On Feb 6, 8:42 pm, "dan" <dan.gos...[at]gmail.com> wrote:
- quote -

You could consolidate this quite simply:

60% US total market index fund (if you have access to one. If not,
50% in an SP500 index fund, 10% in a small cap index fund)

30% an international stock index fund (small large cap doesn't matter
so much here)

10% in a US bond index fund-- arguably you could dispense with this
and put 10% in a REIT index fund. However I am not particularly
positive about REITs right now, so I wouldn't do this in a hurry --
wait for the world to get gloomy about real estate again.

I would rebalance every couple of years back to those percentages--
sell the winners and buy more of the losers. But not more often than
that.

Even better would be a 'lifestyle' fund of the type Vanguard operates,
that has low total costs, and set the retirement date for as long as
you can get. It is virtually certain by the time you are 70 that the
normal retirement date will be *at least* 70.

Why?

- costs are your enemy - a 0.5% difference in costs between now and
your retirement in 45 years, reduces your final retirement pot by
something like 30% (I would have to check the math on that)

- complexity is bad

- the proposed allocation takes plenty of risk (stocks ie 'equities')
which you can afford to do at your age. Stocks should give you an
8-9% or so return in the long run ie doubling in value every 9 years.
Bonds will only give you a 5% return, and REITs somewhere in between
the two. Costs come off of these returns before you get them

- you'll have exposure to international markets but 70% of your assets
will still be in your home currency

- rebalancing too frequently is probably a bad idea (for practical
reasons rather than theoretical ones). In particular, if an asset
class is doing well, it tends to do well for long periods (but not
forever), so this is a version of 'run your winners'.

I can only think of 1 word for this: lame. I was actually considering
consolidating my E-trade and Vanguard accounts to Firstrade to take
advantage of the no fee mutual fund buys. Thanks for the heads up.
That nips my plan in the rear.

On Feb 9, 2:49 pm, "Mark Freeland" <BnetOne...[at]sbcglobal.net> wrote:
- quote -

<wyu[at]talisys.com> wrote in message
news:1171058832.357144.193600[at]a75g2000cwd.googlegroups.com...
- quote -

Firsttrade will shortly separate funds into NTF and TF. They'll charge
$9.95 for TF funds, including Vanguard.

http://www.prweb.com/releases/2007/2/prweb503611.htm (Press release)

List of NTF funds at Firstrade, with Vanguard missing (it's in their list of
all no-loads):
http://public.firstrade.com/public/p...&ntf=NTF&zone=

Mark Freeland
BnetOnewsX[at]sbcglobal.net

If you want low-cost index funds, some of these categories will be
hard to fill up. DFA (IFA) offers the entire rage but they require a
big buy-in number. The site fundadvice.com does a decent job of
searching for alternatives.

http://www.fundadvice.com/portfolio.html

A brokerage account from Firstrade could be the way to go to build
such portfolios. Free Vanguard fund purchases and $7 ETFs to fill in
what Vanguard doesn't have.


On Feb 9, 9:37 am, "dan" <dan.gos...[at]gmail.com> wrote:
- quote -

Ok so i'm doing my research, but i'm having a tough time finding funds
that fall into some of these categories. Some are obviously pretty
easy (us large cap, small cap) but others like the 4 at the bottom are
a bit tricky. Can anyone recommend some funds that I might want to
take a look at?

Thanks,
Dan

IFA US Large Company Index
IFA US Large Cap Value Index
IFA US Micro Cap Index
IFA US Small Cap Value Index
IFA Real Estate Index
IFA International Value Index
IFA International Small Company Index
IFA International Small Cap Value Index
IFA Emerging Markets Index
IFA Emerging Markets Value Index
IFA Emerging Markets Small Cap Index
IFA One-Year Fixed Income Index
IFA Two-Year Global Fixed Income Index
IFA Five-Year Gov't Income Index
IFA Five-Year Global Fixed Income Index

Wow, my head is still spinning Much more research to do!

For the person who asked if anyone calls you, I just entered a fake
phone # and it worked without issue.

On Feb 7, 6:45 am, "kastnna" <kast...[at]auburnalum.org> wrote:
- quote -

This is the standard "DFA" portfolio based on the Fama/French Three
Factor Model. If you believe it, you overweight in value. If you don't
you pick a different asset allocation.

- quote -

I was simply comparing advice that says "6-8 funds is enough for
diversification" versus "6-8 funds is enough for diversification and
here's the permutations I ran to come to this conclusions". Someone
who provides backup data - especially backup data I can copy & paste
into an Excel spreadsheet to play around with the numbers - has more
resonance with me.

- quote -

I've been doing roughly the same type of analysis by entering past
performance numbers into a spreadsheet, changing % and eyeballing the
end results. One of these days, I'll have enough historical data
collected where I can then add it to my database to run analysis and
simulations against my portfolio.

kastnna wrote:
- quote -

Yes, that was my point. It just struck me as interesting that those few
points of overlap were obvious. When I buy an S&P value fund, it's a
conscious decision to overweight toward value. Same if I saw a portfolio
that had a Fidelity Select Health (the contents of which appear in other
indexes) I'd see that as a purposeful overweighting.
JOE

On Feb 6, 10:42 pm, w...[at]talisys.com wrote:
- quote -

I think what JOE was suggesting that the Large Co Index is 50/50
growth/value and that the Large Cap value is 100% value so really you
have 25/75 growth/value. It looks like a valid concern, but I haven't
researched the funds thoroughly.

- quote -

Given that the first 6-8 funds are the proper one's it is entirely
likely that adding more funds may not improve STD or average return.

There are various financial planning software's that can accomplish
what you ask, but they are expensive. Our office uses "Planning
Station". It actually allows me to enter a client's current holdings
(qualified and non-qual) and then show where that portfolio lies in
relation to the efficient frontier. The efficient frontier is a theory
developed by Harry Markowitz (won him a nobel). Wiki it!

The program shows the expected return and the standard deviation for
the client's current portfolio. It also shows if there are other
portfolios that lie closer to (or on) the efficient frontier. IOW can
a different portfolio offer greater or equal return for less risk. The
only thing left to do is to choose an appropriate risk/return based on
the client's risk adversity.


- quote -

Obviously if the group contructed a hypothetical portfolio (with
symbols and %s) I could plug them in to get an expected return and std
dev. We could also test what happens when investments are added or
removed. I could also probably show you a set of investments that are
all together better (I am a firm believer that ETFs outweigh MFs most
of the time and in most categories). The freedom that MF manager's
have can often misalign even the most perfect of portfolios.

On Feb 6, 4:48 pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

It's the same but you still need 2 funds to capture those two segments
if you consider Growth/Value versus Blend/Value in isolation. Breaking
it into blend + value could possibly let a Total Stock Market fund or
Global Market fund cover all the blend classes with just 1 fund
leaving only the need for value funds to augment the portfolio.

- quote -

I've run into these suggestions before and I rarely see backup numbers
presented with the argument for me to decide for myself how many funds
and what the stddev. Perhaps for the author of the article, 6-8 funds
is good enough. And maybe it is good enough for me also. But I'd
rather see the ata that show ABC asset classes = ZYX std dev, DEF
asset classes = NNN dev, etc, etc, etc and let me decide how much risk/
return I want. And that's why the IFA/DFA numbers catch my attention.

dan wrote:

- quote -

Isn't large cap divided into two groups, growth or value? So isn't above
really about 8% growth, 26% value?

- quote -

ditto

- quote -

one more

I've seen various sites suggesting that 6-8 funds will produce enough
diversification so that further funds don't add much to return, nor do
they reduce your STD. (Standard Deviation, or risk)
JOE

On Feb 6, 3:42 pm, "dan" <dan.gos...[at]gmail.com> wrote:
- quote -

International small cap and International emerging markets could
possibly have some overlap.

Replacing 33 funds with 15 funds is progress... you can probably do
even better.

"zxcvbob" <zxcvbob[at]charter.net> wrote
- quote -

IIRC, I gave the IFA a phony name, phone number, etc.,
during the survey, and all worked fine.

dan wrote:
- quote -


I just filled out the 49 Q survey. Now I have to submit it with my
name, phone#, etc. to see the results. Which means a salesman will be
calling me. Before I hit the <submit> button, how persistent and
obnoxious are they? I *really* don't need another salesman calling me
at home all the time when I'm not there. (Wife hates that)

Best regards,
Bob

Last I heard one had to go through a financial advisor who
worked for/with IFA to buy its funds.

You said earlier your three accounts (IRA, 401(k),
individual taxable) account are with Fidelity. I would try
to mimic whatever allocation you ultimately decide is best
using all the tools at the site I gave as well as input from
here, not just the IFA one. You could even set up a
spreadsheet showing what each tool recommended for your
circumstances. The point would be to get you thinking about
how there is a lot of subjectivity in specific stock
allocation.

Unfortunately, this is going to require further analysis and
study and will still yield a fuzzy answer.

On the other hand, there looms the question of how much
effort you want to put into this. Granted, as you learn
more, you can tweak the allocation (or even change it
radically).

Thanks to everyone who responded on my previous asset allocation
post. It made me aware that while I may have a good mix of small/mid/
largecap/intl, I also have a significant amount of overlap between
funds, and also own far too many different funds to manage them
effectively.

I used this link from Elle's site: http://www.ifa.com/SurveyNET/
Basically, given my age of 26 I indicated that I can withstand the
maximum amount of risk. My goal is to build a well diversified
portfolio that will provide me with the highest possible return in the
long run, regardless of the volatility and short term risk. My
answers to the survey where in line with that mindset, and the site
recommended the following allocation:

IFA US Large Company Index
17%
IFA US Large Cap Value Index
17%
IFA US Micro Cap Index
8.5%
IFA US Small Cap Value Index
8.5%
IFA Real Estate Index
8.5%
IFA International Value Index
8.5%
IFA International Small Company Index
4.25%
IFA International Small Cap Value Index
4.25%
IFA Emerging Markets Index
2.55%
IFA Emerging Markets Value Index
2.55%
IFA Emerging Markets Small Cap Index
3.4%
IFA One-Year Fixed Income Index
3.75%
IFA Two-Year Global Fixed Income Index
3.75%
IFA Five-Year Gov't Income Index
3.75%
IFA Five-Year Global Fixed Income Index
3.75%

While I may not purchase those specific IFA funds, should I just go
ahead and set myself just like is shows above?