1/4 of FI for rebalance: Tot bond vs stable value/short term

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1/4 of FI for rebalance: Tot bond vs stable value/short term

Post by retireearly » Mon Feb 19, 2018 2:57 pm

I have approx 50% of my FI in Tiaa Traditional RA (guarantee 3%, current 4% yield - 9 year lock in). The other half in a total bond index (standard BB aggregate) with an Op Expense of two basis points (.02%).

I plan on moving my FI around to get to the point where Tiaa Trad is approx 70-75% of my FI. My question is for the 25-30% that I keep liquid, with the goal to rebalance at significant drops in stocks, should I keep that in a stable value fund (though ? I have a few options for Stable Value funds, one yielding 2% but about 37 basis points for the OE, so I'm not a big fan of that. I also have access to a VOYA Core Plus Trust fund that has a reasonable Op Ex of 26 basis points for the potential "reward." The objective of the fund is to outperform the total bond by 1.25-1.75 and from what I can tell, it has done a good job doing so. From the prospectus, it looks to have done so by having some high yield, EM, mortgage backed securities, etc, to go along with what we'd normally see in a total bond.

https://investments.voya.com/idc/groups ... plusfi.pdf

Since it's a good chance that this portion of my FI might not make it 5 or 6 years(with a future rebalance) for some of those intermediate duration yields to make up for potential PAR/NAV loss, I wonder if this Voya fund makes more sense. Thoughts?
Age:45, about to be single for first time since 1995. Kids 8/13. Current AA 70/30, Desired stock AA 50/50, overweight EM, Int SC and US SCV.

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Re: 1/4 of FI for rebalance: Tot bond vs stable value/short term

Post by Rom1b » Wed Feb 21, 2018 8:01 am


FI = Fixed Income ?
Im not a specialist of the topic but wanted to give a reply.

How much fixed income do you have in percent of your total if you dont mind ?

How much costs per year this fund you wrote about ? if its actively managed you probably know what most people think about that here.. doesnt mean its always wrong though, but in many a case
Dr Bernstein - If You Can / free PDF, google it | 3Fund Portfolio www.bogleheads.org/forum/viewtopic.php?f=10&t=88005 | CollectiveThought www.bogleheads.org/forum/viewtopic.php?f=10&t=7353

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Tyler Aspect
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Re: 1/4 of FI for rebalance: Tot bond vs stable value/short term

Post by Tyler Aspect » Wed Feb 28, 2018 7:04 pm

Why not continue to add bond exposure? It seemed the amount of bond you have is under your target. Moving away from total bond market into a stable value fund will probably reduce your potential return over the long run, since a stable value fund usually hold shorter term bonds.
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