Lifestrategy funds

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Lifestrategy funds

Postby Banana » Thu May 02, 2013 4:23 pm

I did a search on the forum to try and find a discussion on the merits of these funds, and was only able to find some information on the funds back when they use to have a portion allocated to discretionary picks. Now that they have changed to a more BH 3-fund approach what do you all think of these funds? Do they have merit for a new investor looking for an 80/20 allocation lets say for a ROTH IRA? Thoughts? Pro/Cons? Thanks!

I don't currently use these funds I use a three fund portfolio, but I have found them to be helpful when talking to new investors, and wanted to make sure I gave them all the information.
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Re: Lifestrategy funds

Postby Twins Fan » Thu May 02, 2013 5:05 pm

For a new investor opening up a Roth or traditional IRA, the lifestrategy funds are a great way to go. They are the 3-fund portfolio, the AA is set (whichever they choose), and all the rebablancing is done for them. Just contribute is all they have to do. The new investor can then continue to learn and break off into their own 3-fund, or whatever the choose, portfolio later on. Or, just keep contributing, let the fund do its thing, and live life. They are a great way to get started.

They are not ideal for a taxable account because of the bond portion of the fund.
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Re: Lifestrategy funds

Postby Boglenaut » Thu May 02, 2013 5:11 pm

Twins Fan wrote:For a new investor opening up a Roth or traditional IRA, the lifestrategy funds are a great way to go. They are the 3-fund portfolio, the AA is set (whichever they choose), and all the rebablancing is done for them. Just contribute is all they have to do. The new investor can then continue to learn and break off into their own 3-fund, or whatever the choose, portfolio later on. Or, just keep contributing, let the fund do its thing, and live life. They are a great way to get started.

They are not ideal for a taxable account because of the bond portion of the fund.



Agreed. But I think they added Intl. Bonds recently, so not 3.
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Re: Lifestrategy funds

Postby Mel Lindauer » Thu May 02, 2013 5:21 pm

Banana wrote:I did a search on the forum to try and find a discussion on the merits of these funds, and was only able to find some information on the funds back when they use to have a portion allocated to discretionary picks. Now that they have changed to a more BH 3-fund approach what do you all think of these funds? Do they have merit for a new investor looking for an 80/20 allocation lets say for a ROTH IRA? Thoughts? Pro/Cons? Thanks!

I don't currently use these funds I use a three fund portfolio, but I have found them to be helpful when talking to new investors, and wanted to make sure I gave them all the information.


The LS funds hold a static asset allocation whereas the newer Target Retirement funds automatically get more conservative as you age. So if you want a static AA, the LS funds would work for you. If you want the funds to get more conservative as you age without you having to do anything, then the TR funds would be your choice.

For most folks, the TR funds probably would be the better choice, since most folks want their portfolios to get more conservative as they age. However, it's always nice to have choices; different strokes for different folks.
Best Regards - Mel | | Semper Fi
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Re: Lifestrategy funds

Postby Twins Fan » Thu May 02, 2013 5:27 pm

Boglenaut wrote:
Twins Fan wrote:For a new investor opening up a Roth or traditional IRA, the lifestrategy funds are a great way to go. They are the 3-fund portfolio, the AA is set (whichever they choose), and all the rebablancing is done for them. Just contribute is all they have to do. The new investor can then continue to learn and break off into their own 3-fund, or whatever the choose, portfolio later on. Or, just keep contributing, let the fund do its thing, and live life. They are a great way to get started.

They are not ideal for a taxable account because of the bond portion of the fund.



Agreed. But I think they added Intl. Bonds recently, so not 3.


Whoops... that's true. Thank you, I keep forgetting that.
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Re: Lifestrategy funds

Postby joe8d » Thu May 02, 2013 10:46 pm

Banana wrote:I did a search on the forum to try and find a discussion on the merits of these funds, and was only able to find some information on the funds back when they use to have a portion allocated to discretionary picks. Now that they have changed to a more BH 3-fund approach what do you all think of these funds? Do they have merit for a new investor looking for an 80/20 allocation lets say for a ROTH IRA? Thoughts? Pro/Cons? Thanks!

I don't currently use these funds I use a three fund portfolio, but I have found them to be helpful when talking to new investors, and wanted to make sure I gave them all the information.


LS Growth (80/20) would be an excellent choice for your Roth. BTW, My Roth is 100% invested in that fund.
All the Best, | Joe
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Re: Lifestrategy funds

Postby Banana » Fri May 03, 2013 10:04 am

joe8d wrote:
Banana wrote:I did a search on the forum to try and find a discussion on the merits of these funds, and was only able to find some information on the funds back when they use to have a portion allocated to discretionary picks. Now that they have changed to a more BH 3-fund approach what do you all think of these funds? Do they have merit for a new investor looking for an 80/20 allocation lets say for a ROTH IRA? Thoughts? Pro/Cons? Thanks!

I don't currently use these funds I use a three fund portfolio, but I have found them to be helpful when talking to new investors, and wanted to make sure I gave them all the information.


LS Growth (80/20) would be an excellent choice for your Roth. BTW, My Roth is 100% invested in that fund.


I agree Joe. I wonder what the pros/cons are for the LS growth compared to a 3-fund portfolio. The only I can think of are Admiral shares for the 3-fund, and also a little more freedom to adjust or place in different tax/tax-protected places. Am I missing something?
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Re: Lifestrategy funds

Postby Johm221122 » Fri May 03, 2013 10:11 am

Banana wrote:I did a search on the forum to try and find a discussion on the merits of these funds, and was only able to find some information on the funds back when they use to have a portion allocated to discretionary picks. Now that they have changed to a more BH 3-fund approach what do you all think of these funds? Do they have merit for a new investor looking for an 80/20 allocation lets say for a ROTH IRA? Thoughts? Pro/Cons? Thanks!

I don't currently use these funds I use a three fund portfolio, but I have found them to be helpful when talking to new investors, and wanted to make sure I gave them all the information.

Do they have a 401? If they do is it an option
A 401 and company match is first, a lifestrategy fund is not good for taxable, they work best is if they only have ira.Mixing balanced funds is hard to keep AA you want.To give good advice you need all information
viewtopic.php?t=6212
Pick best 401 funds first
Pick tax efficient for taxable
Pick ira funds that you need to fill out your AA
John
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Re: Lifestrategy funds

Postby maj » Fri May 03, 2013 10:33 am

Banana,

I am a great fan of the LS funds.
I use the Growth Fund (80-20) as core holding in taxable account. I am different from some folks who post here in that I believe the benefits I receive justify paying regular tax rate on the income from the 20% in bonds.

The benefits for me are the following:
1. Cheap.
2. Total Market Index Funds only.
3. Fixed allocations which means that the froth of an exuberant allocation (stock or bond, domestic or international) is remedied daily by perpetual rebalancing among fixed allocations which are:
56% Total US Stock Market
24% Total International Stock Market
16% Total US Bond Market
4% Total International Bond Market
4. The rebalancing is achieved, for the most part, by reinvested dividends and new cash flows, which means that only rarely are capital gains realized.
5. I can make my portfolio more conservative by investing in CDs or a bond fund (taxable or tax exempt) as I may desire.

In my Roth I invest 50% in Wellington Fund and 50% in LS Growth Fund. I cannot justify the Wellington except to say I like quality value stocks and corporate bonds in a balanced fund and there are few better than Wellington for a moderate long-term investor

In my IRA, from which I am taking minimum mandatory withdrawals, I keep small allocations in Wellington and Wellesley
and large allocations in the Investment Quality Short Term Bond Fund (managed) and GNMA Fund (managed)--and I take my withdrawals equally from the Short Term Bond Fund and the GNMA Fund, leaving Wellington and Wellesley to growth a bit.

Best wishes and peace
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Re: Lifestrategy funds

Postby Toons » Fri May 03, 2013 8:21 pm

joe8d wrote:
Banana wrote:I did a search on the forum to try and find a discussion on the merits of these funds, and was only able to find some information on the funds back when they use to have a portion allocated to discretionary picks. Now that they have changed to a more BH 3-fund approach what do you all think of these funds? Do they have merit for a new investor looking for an 80/20 allocation lets say for a ROTH IRA? Thoughts? Pro/Cons? Thanks!

I don't currently use these funds I use a three fund portfolio, but I have found them to be helpful when talking to new investors, and wanted to make sure I gave them all the information.


LS Growth (80/20) would be an excellent choice for your Roth. BTW, My Roth is 100% invested in that fund.


+1 Vasgx LS Growth ,been invested for 14 years in the fund ,no complaints ,nice growth of capital :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: Lifestrategy funds

Postby Murdoch » Fri May 03, 2013 9:08 pm

Here in Australia the Lifestrategy options are pretty tax efficient, in that their dividends are 'franked' to a certain degree. Basically it means the dividends have already been taxed at company level, and you can claim this as a tax break depending on you're personal circumstances. I think this may only apply to the Australian shares portion though.

I am planning to use it as my only taxable investment fund.
I like the fact it rebalances itself, requires no further input other than fortnightly drip feeds of ongoing savings, and fits in with he philosophy of low cost investing (even if our ER are much higher thn in the US, it's still attractive relative to other options here in Aus).
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Re: Lifestrategy funds

Postby 5jay » Fri May 03, 2013 10:44 pm

I wish I had discovered indexing sooner but finally I am now sold on indexing. At the age of 79 and after much reading on indexing, my IRA is invested in two Vanguard Funds----Target Retirement Income Fund and Wellesley. I probably don't need Wellesley and will shift to the single fund. Here are the questions I wish to present to wiser investors than me. Does a retiree really need a Five Fund Portfolio such as TRF Income will soon become? I am ok with 30 to 40% in equities and is LifeStrategy a preferable single fund choice? I am prompted to ask these questions since neither Mr. Bogle or Mr. Solin seem to feel the need to own Inflation Protection Funds. It may ok either way but your thoughts will be helpful to me. Thanks.
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Re: Lifestrategy funds

Postby Mel Lindauer » Sat May 04, 2013 12:12 am

5jay wrote:I wish I had discovered indexing sooner but finally I am now sold on indexing. At the age of 79 and after much reading on indexing, my IRA is invested in two Vanguard Funds----Target Retirement Income Fund and Wellesley. I probably don't need Wellesley and will shift to the single fund. Here are the questions I wish to present to wiser investors than me. Does a retiree really need a Five Fund Portfolio such as TRF Income will soon become? I am ok with 30 to 40% in equities and is LifeStrategy a preferable single fund choice? I am prompted to ask these questions since neither Mr. Bogle or Mr. Solin seem to feel the need to own Inflation Protection Funds. It may ok either way but your thoughts will be helpful to me. Thanks.


Inflation protection is especially important for retirees, since they no longer get wage increases which help offset the effects of inflation. So I agree with Vanguard's inclusion in VIPSX in the later-life TR funds and am a big fan of the TR Income Fund for retirees.
Best Regards - Mel | | Semper Fi
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Re: Lifestrategy funds

Postby Munir » Sat May 04, 2013 1:02 am

It looks like performance has disappeared as one of the parameters to be used when comparing funds of similar holdings. Under the guise of "the past is no guarantee of the future", all performance numbers are being ignored. I think performance should remain as one of the guidelines but not necessarily the only one since asset allocation, diversification, and risk (among other factors) need to be included too.
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