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You may want to consider the following: 1. You stated the money came from a worker's comp settlement - are there any medical bills (past, present or future) that need to be paid? What are the other expenses - mortgage, utilities, food, etc.? Is there any other income or other assets? 2. Be careful ...

You seem to be under the misguided impression that taking on "just a bit more risk" will result in better returns. There's a reason it's called "risk": there's a risk of lower returns, in addition to the possibility of higher returns. There are many investments that might result...

My father will soon be receiving a check for $100,000 from a Workers Comp settlement. He is very risk-averse, and was planning to deposit this money in either a CD or regular bank account. However, interest rates are terrible right now. A 1-year CD yields around 1%. I am trying to convince my father...

Rebalancing is nothing beyond simple arithmetic to maintain the selected asset allocation without regard to attempting to determine that something is expensive or not. Trying to say that things are expensive implies a market timing judgement about what the price will be in the future or it is not m...

Investing based on current conditions that are not an attempt to forecast the future is not market timing. Current bond interest rate as such is an example of that. That said, it probably isn't that simple because: 1. A lot of people who might think they are investing on current conditions are actu...

chaz wrote:IMO you should buy and hold - stay the course.

That's what my gut feeling was telling me, but I'm beginning to have doubts.

Should I keep a TIPS fund (VIPSX) as a permanent part of my portfolio (rebalancing regularly), or should I purchase and sell this TIPS fund according to yield? About half of my Roth IRA is in VIPSX. This is about 8% of my total portfolio. My original plan was to have this fixed percentage in TIPS in...

You are right that a down market in TIPS is a good time to buy. Like a few years ago when they were yielding 4% real. (My biggest investment mistake not to load up on them then in a matching strategy for future needs :oops: ) But now is not a time when TIPS are on sale - as with nominal bonds, yiel...

IMHO, TIPS are best used as a matching strategy and held to maturity - that way you know exactly what your are getting. A TIPS mutual fund, like a nominal bond fund, will vary in NAV depending on current yields. Its unclear that a TIPS fund will provide the same benefit in terms of protection from ...

TIPS have negative REAL yield (after inflation), not negative yield. I believe some of the noise you are hearing is coming from people who never wanted anyone to hold TIPS in the first place, and are using negative real yield as a handy new stick to beat TIPS with. And then, of course, there is alw...

+1 Indeed, through my 403(b) every month I buy more shares in the longstanding Vanguard TIPS fund. Especially when part of a balanced portfolio, there is nothing more sensible than TIPS and I-Bonds. So, you're saying 'stay the course' and keep my allocation to TIPS, regardless of the current econom...

I have an allocation to TIPS (VIPSX) in my Roth IRA which is about 5% of my overall portfolio. Recently, as the yield on TIPS has turned negative after inflation, I've been hearing a lot of noise about how I should not be holding TIPS at all in my portfolio right now. This suggests to me that I shou...

Johm221122 wrote:If you use search feature at top right, there are a lot of posts.Here is one
viewtopic.php?f=10&t=93121
John

Thanks, very informative.

Dandy wrote:1/3 stable value, 1/3 short term bonds/funds, 1/3 interemediate bonds/funds

Thanks.

THE MOST important thing is percentage to fixed income

What percentage of fixed income would you allocate to stable value?

I think the heydey of stable value funds might be over for quite awhile. I'm actually starting to think of what to do with the money I currently have invested in it as the monthly returns are beginning to drop quickly already.....a year sooner than I expected. That's not a problem for me, provided ...

A stable value fund is a good all weather choice for a decent portion of your fixed income allocation. At times the return of other fixed income choices will be better and at times worse. But the stability and decent yield warrants it for incluclusion on a permanent basis in your allocation. Thanks...

THE MOST important thing is percentage to fixed income Yeah, what about that percentage? I was wondering the same thing. I think I vaguely remember reading somewhere that stable value fund should make up 15%-20% of the fixed income portion of one's portfolio. What would you allocate to stable value?

I have a Vanguard Stable Value Fund in my 403(b) plan. FWIW, annual returns for 1/3/5 year periods ending 12/31/12 were 1.70/1.84/2.52% and 5-year rolling CMT (constant maturing treasury) which is used as a benchmark were 2.18/2.85/3.24%. So you can see what you give up for the reduction in volatil...

Yes joer, I think having some of one's allocation in stable value is a superior option. I am well aware that this has not been the case in the past as Total Bond and TIPs have both outperformed my stable value fund. Over the past couple years my stable value has dropped from a total return of about...

Less than what? Last time I checked Total Bond was yielding about 1.6%. But that's just yield alone. I think total return for 5 years is around 6%, if I'm not mistaken. If I am, I am pretty sure total bond handily beats stable value. If it didn't, I'd be a fool not to allocate my entire fixed incom...

It would be great if all investments beat inflation. But that is not choices we have before us. We have equity risks which may be higher in the shorter time since they have been on a good bull run. We have bonds that are paying low interest rates - mostly below the inflation rate unles you up the d...

As for beating inflation, the only thing guaranteed is TIPs. Stocks, bonds, real estate, gold, stable value -- all that stuff has no guarantee that it will beat inflation. You take your chances. Yes, but stocks, bonds and real estate have a much better chance of outpacing inflation than a stable va...

Yes, having part of your allocation in a stable value fund makes a lot of sense. In addition to oing your homework on understanding what's under the hood of your company 401K stable value fund, you should read the wiki http://www.bogleheads.org/wiki/Stable_Value_Fund . Make sure you understand the ...

My concern about stable value funds is that they appear to be a free lunch and someday that lunch might come to an abrupt end. Stable value funds are constituted in various ways, including synthetic derivatives, but effectively they are just long term treasury bond funds that aren't required to mar...

I used the Stable Value fund extensively when I was working and loved it. It was hard to find out who was providing the insurance. Once the 2008 crisis started I was not comfortable with the lack of information and the prospect of the insurance company (who ever it was) going into default so I move...

This appears to be a good stable value fund - more transparent than most. I use a stable value fund and I can't see any reason not to use one for a portion of your non equities. In our current interest rate environment, these are good options. Do you think this is a superior option than using 100% ...

My company offers a "stable value fund" in their 401k and 457b plans. Should I add this to the fixed income portion of my portfolio? I'm a little concerned that stable value funds typically don't outpace inflation. Aside from cash, shouldn't every fund in one's portfolio have a real return...

You could consider holding I Bonds in your taxable account instead of a TIPS fund in your Roth IRA. This might allow you to hold more REIT in the Roth IRA. Check the Wiki for info about I bonds. You could consider holding REIT in a Vanguard Variable Annuity. Whether your return will overcome the hi...

I'd suggest that you will fret a lot less about this if you make your overall asset allocation your first priority and tax efficient placement your second priority. Right now it sounds like you have those two things reversed. I agree. That was my original idea, but everyone I've asked in the past s...

You could consider holding I Bonds in your taxable account instead of a TIPS fund in your Roth IRA. This might allow you to hold more REIT in the Roth IRA. Check the Wiki for info about I bonds. You could consider holding REIT in a Vanguard Variable Annuity. Whether your return will overcome the hi...

Missing that one contribution early on had significant ramifications. When you look back in 10 years, I think you'll find that one contribution would not have made a significant difference at all. :happy How so? My Roth IRA currently has about 50% TIPS and 50% REITs. They each make up about 4% of m...

Are you saying that you are not achieving your desired portfolio allocation because you don't have space in your Roth to hold the classes - and that since you don't have the right location room, you're not investing the portfolio the way you want??? I assume that's not what you're doing, but that's...

It's only $5,000 in space from one year out of 30-40 years of retirement savings. I wouldn't lose sleep over it. $5,000 won't make much difference over the long haul. But now my REITs and TIPS allocations are lagging the rest of my investments as a direct result of that, and I can never bring their...

You only have 60 days from the distribution date to roll it into another Roth IRA. All is not lost though. If your income is low enough in 2012 and 2013, you can make contributions now for those years. I already maxed out those years. I want to kick myself for giving up that tax-free space in 2010.

In 2010 I opened a Roth IRA and contributed $5,000 to it (in a Franklin short-term bond fund). A few months later, I decided this investment wasn't for me, so I transferred the money out of the bond fund in the Roth IRA, saved up 10k, and bought a corporate bond instead, outside of the Roth. Can I n...

climber2020 wrote:I wondered the same thing a few months ago. This thread gives you a nice step by step:

viewtopic.php?f=1&t=103022

Thanks for this info.

Just call them - they can sometimes do account setup things that you can't do over internet for some reason. They are good at their jobs... (1) Should I dump this money into these 2 funds all at once, or should I move into these positions gradually? Personally, I'd rather just dump the money in at ...

How do I set up a taxable (non-IRA) brokerage account with Vanguard? I already have a Roth IRA with Vanguard, which I have maxed out for 2012 and 2013. Now, I want to set up a separate taxable account, but I am confused about how this is done. When I log into my Vanguard Roth IRA, there is no option...

[/quote] What Karamatsu says is true, but please note that if you don't reinvest the portion of the distribution which is the inflation adjustment part, your investment in the fund won't keep up with cumulative inflation. Inflation compounds, so the inflation adjustments need to do so also. PJW[/quo...

I need to invest the rest of my money to be reasonably sure to have enough return by the end of each year to max out my Roth. As my investments stand right now, I may not be able to do this. Ahhh, you would "use" the income the TIPS throw off rather than reinvest them in the TIPS fund (ei...

Oh, so you are saying you would get the TIPS fund by selling some of your existing taxable holdings, not by adding new contributions (such as your cash holdings? I would purchase TIPS (VIPSX) using cash from my checking account. So then I'm confused as to why you would not use that same cash to buy...

Oh, so you are saying you would get the TIPS fund by selling some of your existing taxable holdings, not by adding new contributions (such as your cash holdings?

I would purchase TIPS (VIPSX) using cash from my checking account.

Have you bought your annual $10-$15k of ibond yet? I would max out ibonds before I buy TIPS personally. I forgot to mention that I use the return from my taxable investments to fund my Roth every year. I-bonds (I think) have a penalty if I cash out in less than 5 years. I Bonds: Minimum term of own...

BrandonBogle wrote:Have you bought your annual $10-$15k of ibond yet? I would max out ibonds before I buy TIPS personally.

I forgot to mention that I use the return from my taxable investments to fund my Roth every year. I-bonds (I think) have a penalty if I cash out in less than 5 years.

Given a choice, would you rather put TIPS (VIPSX) in a taxable account, and deal with the tax ramifications every year, or not have them at all in your portfolio? This is the decision I must make. I have no space left in my Roth IRA (which contains REITs), so if I want TIPS they would have to go int...

.. why throw Municipals (Taxable acct) in the mix when your 70/30 Stock/Bond split is taken care by $94K/$48K Taxable/Tax-advantaged ? To make matters even simpler, new money is all tax-advantaged (410k, 457b, Roth IRA). You make a good point. I just wondered if a municipal bond fund in taxable wou...

why throw Municipals (Taxable acct) in the mix when your 70/30 Stock/Bond split is taken care by $94K/$48K Taxable/Tax-advantaged ? To make matters even simpler, new money is all tax-advantaged (410k, 457b, Roth IRA). You make a good point. I just wondered if a municipal bond fund in taxable would ...

why throw Municipals (Taxable acct) in the mix when your 70/30 Stock/Bond split is taken care by $94K/$48K Taxable/Tax-advantaged ? To make matters even simpler, new money is all tax-advantaged (410k, 457b, Roth IRA). Very good point. However, I wondered if a municipal bond fund in taxable would be...

Because of the peculiar way that taxes are computed when you have qualified dividends: first you compute your tax on all income except your qualified dividends (and LTCG). If that part of your income is below $35350, then you pay 15% tax on the amount that your income + qualified dividends exceeds ...