JHOXX or RGVGX or JTBMX

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peke9898
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JHOXX or RGVGX or JTBMX

Post by peke9898 » Wed Mar 25, 2020 6:54 am

Currently, I am using JHOXX, Money Market Fund (Exp Ratio: .82) for conservative portion of my portfolio in employer sponsored 401K account. The fund invests mainly in JHVIT - MM Trust (class 1).

I am considering using RGVGX, US Govt Securities or JTBMX, Total Bond Market. The below are other option available to me. I am planning to do in-service distribution in July, 20; so most of the money I will be transferring to R/O IRA at Fidelity. However, I will use this fund going forward as a placeholder until I do another in-service distribution in July, 21 (annual). I am still working and another 6-7 yrs left in retirement, so I have to continue using this employer sponsored 401K account.

RCWGX Capital World Bond Fund (1.27) American Funds
FEPIX Fidelity Advisor Total Bond (1.00) Fidelity
JIGDX Global Bond Fund (1.11) PIMCO
PRTNX PIMCO Real Return (1.73) PIMCO
JESNX Strategic Income Opp Fund (.99) John Hancock
JTBMX Total Market Bond Fund (.83) John Hancock
RGVGX US Govt Securities (1.0) American Funds
JHOXX Money Market Fund (.82) JHOXX

mega317
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Re: JHOXX or RGVGX or JTBMX

Post by mega317 » Wed Mar 25, 2020 8:26 am

It's not clear to me what you're trying to do. Placeholder for what?
https://www.bogleheads.org/forum/viewtopic.php?t=6212

Topic Author
peke9898
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Re: JHOXX or RGVGX or JTBMX

Post by peke9898 » Wed Mar 25, 2020 9:00 am

In my current 401K account, I want to select a fund for conservative portion (e.g. MM, Bond) of my portfolio. When I will be 59 1/2 in July, 20; I will do in-service distribution from my current 401K to R/O IRA in Fidelity. Even after in-service distribution, my 401K contribution will still go into the current 401K account where I will keep money for about an year. Every year I will move money from 401K to R/O IRA. In short, I want to select a fund in my 401K from the listed options.

mega317
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Re: JHOXX or RGVGX or JTBMX

Post by mega317 » Wed Mar 25, 2020 9:38 am

Ok let me ask a step further. What will you invest in once it's in the IRA?
https://www.bogleheads.org/forum/viewtopic.php?t=6212

Topic Author
peke9898
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Re: JHOXX or RGVGX or JTBMX

Post by peke9898 » Wed Mar 25, 2020 9:51 am

Bond or high yield MM - something conservative. My AA are 60 stock - 40 Bond. I need a fund for 40% of the total portfolio. I am not sure Bond is a right choice or not?

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grabiner
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Re: JHOXX or RGVGX or JTBMX

Post by grabiner » Wed Mar 25, 2020 10:02 am

I would prefer a bond fund over a money-market fund for money you are not expecting to spend immediately. Bond funds have a small amount of risk, but the risk of a 60/40 portfolio is still almost all the result of the stock risk. As compensation for that risk, they have higher expected returns. (This is true even if money-market yields are temporarily higher; the higher yields on short-term bonds imply that investors expect rates to fall.)

And your lowest-cost bond fund, the total-market fund, has the same expense ratio as your money-market fund.
Wiki David Grabiner

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peke9898
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Re: JHOXX or RGVGX or JTBMX

Post by peke9898 » Wed Mar 25, 2020 10:09 am

grabiner wrote:
Wed Mar 25, 2020 10:02 am
I would prefer a bond fund over a money-market fund for money you are not expecting to spend immediately. Bond funds have a small amount of risk, but the risk of a 60/40 portfolio is still almost all the result of the stock risk. As compensation for that risk, they have higher expected returns. (This is true even if money-market yields are temporarily higher; the higher yields on short-term bonds imply that investors expect rates to fall.)

And your lowest-cost bond fund, the total-market fund, has the same expense ratio as your money-market fund.
Is it OK to invest in Bond now? Right now, I use MM.

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grabiner
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Re: JHOXX or RGVGX or JTBMX

Post by grabiner » Wed Mar 25, 2020 12:12 pm

peke9898 wrote:
Wed Mar 25, 2020 10:09 am
grabiner wrote:
Wed Mar 25, 2020 10:02 am
I would prefer a bond fund over a money-market fund for money you are not expecting to spend immediately. Bond funds have a small amount of risk, but the risk of a 60/40 portfolio is still almost all the result of the stock risk. As compensation for that risk, they have higher expected returns. (This is true even if money-market yields are temporarily higher; the higher yields on short-term bonds imply that investors expect rates to fall.)

And your lowest-cost bond fund, the total-market fund, has the same expense ratio as your money-market fund.
Is it OK to invest in Bond now? Right now, I use MM.
It's fine to invest in a bond fund now, as long as the bond fund's properties meet your needs. A total bond market fund is a natural choice to reduce the risk of a retirement portfolio; you don't care much if bonds lose or gain value in the next year, because you are holding for a longer term. It is the wrong fund to hold money you need to spend in the next year; that should be in bank accounts or money-market funds.
Wiki David Grabiner

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