why so few 50/50 balanced funds?

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montanagirl
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why so few 50/50 balanced funds?

Post by montanagirl »

My RMDs start next year and I'd like to consolidate total stock, total bond and Wellesley into one fund and just set it on automatic. This is in case I lose the ability to manage the payouts. As long as I'm able, I'll probably take the RMD manually and reinvest part of it, then put it back on automatic.

My AA is about 50/50 now and I'd like to match that.

I think I found only one fund, managed payout, and it didn't seem to be doing very well. Is that because of International? I don't have anything in International right now.
rgs92
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Re: why so few 50/50 balanced funds?

Post by rgs92 »

There is Fidelity freedom index 2015 (FLIFX). I have a chunk of that.
rkhusky
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Re: why so few 50/50 balanced funds?

Post by rkhusky »

Vanguard seems to prefer 60/40 or 40/60 funds. You could choose two of those to get to 50/50 (Wellington/Wellesley or LifeStrategy Moderate/Conservative).
stan1
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Re: why so few 50/50 balanced funds?

Post by stan1 »

Managed Payout is a unique fund intended to support a long term 4% withdrawal rate as an alternative to an annuity. It may hold commodities and use hedging strategies (long/short). It may return capital as well as dividends. It has a high expense ratio of 0.34% by Vanguard standards but for this type of fund it is low cost. It is a specialized fund that many people are not interested in. It only has $2B invested in it so I think the market has spoken.

I'd pick Life Strategy Conservative Growth (40/60) or Moderate Growth (60/40) if I wanted a single fund. I realize neither is exactly 50/50 but the difference will not be significant. Since inception in 1994 Conservative Growth has returned 6.69% annualized and Moderate Growth 7.41%. If there was a 50/50 offering it would be around 7.05%. Or you could choose half Conservative Growth and half Moderate Growth.

Wellesley is 40/60 right now if you are a longtime Wellington investor and want to keep their management approach.

There is also Tax Managed Balanced which is 50/50 but it invests in municipal bonds not total bond market since it is intended for a taxable account.
Trism
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Re: why so few 50/50 balanced funds?

Post by Trism »

rkhusky wrote: Mon Nov 12, 2018 9:56 am Vanguard seems to prefer 60/40 or 40/60 funds. You could choose two of those to get to 50/50 (Wellington/Wellesley or LifeStrategy Moderate/Conservative).
+1
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montanagirl
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Re: why so few 50/50 balanced funds?

Post by montanagirl »

Trism wrote: Mon Nov 12, 2018 10:01 am
rkhusky wrote: Mon Nov 12, 2018 9:56 am Vanguard seems to prefer 60/40 or 40/60 funds. You could choose two of those to get to 50/50 (Wellington/Wellesley or LifeStrategy Moderate/Conservative).
+1
My aim was to set up continuous RMDs without intervention. Just in case. I would be nice if I could chain them together in desired withdrawal order. I realize I can take from all at once too.
retiredjg
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Re: why so few 50/50 balanced funds?

Post by retiredjg »

Since you like Wellesley, another way to do this is to combine Wellesley Income (just a little less than 40% stock) with LifeStrategy Moderate Growth (60% stocks). This would also mean less international.
inbox788
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Re: why so few 50/50 balanced funds?

Post by inbox788 »

It isn't so hard to manage only 2 funds, especially if the most difficult thing you have to do is divide by 2. Figuring out 60/40 is a little bit more difficult.

Seriously, during accumulation, don't you just add to the lesser performing fund, and with withdrawal phase, take from the better performing? Depending on tax situation, you have either automatic reinvestment or not. And once in a while you rebalance or have to invest dividends. Am I missing something big?
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beyou
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Re: why so few 50/50 balanced funds?

Post by beyou »

Note this can't be completely automated no matter what you do, since you must re-establish the RMD amount and therefore automated withdrawals each year anyway. If you want a monthly cashflow it would last for 12 months and stop until you sign up again.

So you can keep the portfolio you have, or go with a 60/40 + 40/60, does not matter.
Either setup each year to take from a different fund, as necessary, or manually withdraw maybe quarterly from the fund that
is overweighted. Logging in 4 times/year to and withdrawing 1/4 of your RMD does not seem like a huge burden.

Alternatively go with Vanguard Target Retirement 2020 Fund (VTWNX) which is close to 50/50 (53/47 from website now).
But you will still have to login annually to restart the automated RMD.
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montanagirl
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Re: why so few 50/50 balanced funds?

Post by montanagirl »

I didn't know that. Gonna love dealing with that at 85.
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Re: why so few 50/50 balanced funds?

Post by Dottie57 »

rkhusky wrote: Mon Nov 12, 2018 9:56 am Vanguard seems to prefer 60/40 or 40/60 funds. You could choose two of those to get to 50/50 (Wellington/Wellesley or LifeStrategy Moderate/Conservative).
This is what I would do. Although I might go with the 80/20 And 20/80 blend.
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beyou
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Re: why so few 50/50 balanced funds?

Post by beyou »

montanagirl wrote: Mon Nov 12, 2018 2:21 pm I didn't know that. Gonna love dealing with that at 85.
At some point we all need help, if we live long enough.
If you can't logon to your brokerage once/year to setup RMD, how would you pay your many monthly bills ?
mountainsoft
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Re: why so few 50/50 balanced funds?

Post by mountainsoft »

montanagirl wrote: Mon Nov 12, 2018 9:36 am My RMDs start next year and I'd like to consolidate total stock, total bond and Wellesley into one fund and just set it on automatic. This is in case I lose the ability to manage the payouts. As long as I'm able, I'll probably take the RMD manually and reinvest part of it, then put it back on automatic.
My AA is about 50/50 now and I'd like to match that.
I have the Vanguard Tax-Managed Balanced Fund (VTMFX) in my taxable account which is really close to 50/50 (48 stocks, 53 bonds I think).
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stemikger
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Re: why so few 50/50 balanced funds?

Post by stemikger »

The difference between 60/40 and 50/50 doesn't amount to a hill of beans
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28fe6
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Re: why so few 50/50 balanced funds?

Post by 28fe6 »

I also prefer 50/50 but 60/40 is practically the same thing. In my opinion small differences in AA aren't significant, but staying the course definitely is. So even though I would prefer an AA of 50/50, a 60/40 balanced fund is still good for me.
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bertilak
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Re: why so few 50/50 balanced funds?

Post by bertilak »

stemikger wrote: Tue Nov 13, 2018 12:15 am The difference between 60/40 and 50/50 doesn't amount to a hill of beans
Not in this crazy world.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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montanagirl
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Re: why so few 50/50 balanced funds?

Post by montanagirl »

28fe6 wrote: Tue Nov 13, 2018 7:33 am I also prefer 50/50 but 60/40 is practically the same thing. In my opinion small differences in AA aren't significant, but staying the course definitely is. So even though I would prefer an AA of 50/50, a 60/40 balanced fund is still good for me.
I may as well just put it into Balanced then.
UpperNwGuy
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Re: why so few 50/50 balanced funds?

Post by UpperNwGuy »

montanagirl wrote: Tue Nov 13, 2018 8:28 am
28fe6 wrote: Tue Nov 13, 2018 7:33 am I also prefer 50/50 but 60/40 is practically the same thing. In my opinion small differences in AA aren't significant, but staying the course definitely is. So even though I would prefer an AA of 50/50, a 60/40 balanced fund is still good for me.
I may as well just put it into Balanced then.
Good decision!
retiredjg
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Re: why so few 50/50 balanced funds?

Post by retiredjg »

montanagirl wrote: Tue Nov 13, 2018 8:28 am
28fe6 wrote: Tue Nov 13, 2018 7:33 am I also prefer 50/50 but 60/40 is practically the same thing. In my opinion small differences in AA aren't significant, but staying the course definitely is. So even though I would prefer an AA of 50/50, a 60/40 balanced fund is still good for me.
I may as well just put it into Balanced then.
If you want 50/50 you should have 50/50. But it could be easy enough to just have Balanced and a bond fund or CDs on the side to achieve 50/50.

I agree that 50/50 is not significantly different from 60/40 when looking at numbers. But it could be very different to you emotionally. It is for me.

I'm happy at 50/50. But even though I KNOW that 60/40 is not a hill of beans different....I was not comfortable there so I migrated on down til I found my comfort zone.

There are numerical factors to investing and emotional factors to investing. Paying attention to both is smart in my opinion.
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stemikger
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Re: why so few 50/50 balanced funds?

Post by stemikger »

bertilak wrote: Tue Nov 13, 2018 7:44 am
stemikger wrote: Tue Nov 13, 2018 12:15 am The difference between 60/40 and 50/50 doesn't amount to a hill of beans
Not in this crazy world.
It may be a huge psychological difference, but having 10% more in stocks in your portfolio will not make a difference in returns if you are a long term investor. Now if you said you want to hold 90/10 your statement would make more sense.
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bertilak
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Re: why so few 50/50 balanced funds?

Post by bertilak »

stemikger wrote: Wed Nov 14, 2018 5:38 pm
bertilak wrote: Tue Nov 13, 2018 7:44 am
stemikger wrote: Tue Nov 13, 2018 12:15 am The difference between 60/40 and 50/50 doesn't amount to a hill of beans
Not in this crazy world.
It may be a huge psychological difference, but having 10% more in stocks in your portfolio will not make a difference in returns if you are a long term investor. Now if you said you want to hold 90/10 your statement would make more sense.
You were (perhaps unintentionally) quoting Rick (Humphrey Bogart) in Casablanca (1942). I just supplied a few more words of the quote. Full quote, Bogart to Ingrid Bergman:

"Ilsa, I'm no good at being noble, but it doesn't take much to see that the problems of three little people don't amount to a hill of beans in this crazy world."
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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stemikger
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Re: why so few 50/50 balanced funds?

Post by stemikger »

bertilak wrote: Wed Nov 14, 2018 6:06 pm
stemikger wrote: Wed Nov 14, 2018 5:38 pm
bertilak wrote: Tue Nov 13, 2018 7:44 am
stemikger wrote: Tue Nov 13, 2018 12:15 am The difference between 60/40 and 50/50 doesn't amount to a hill of beans
Not in this crazy world.
It may be a huge psychological difference, but having 10% more in stocks in your portfolio will not make a difference in returns if you are a long term investor. Now if you said you want to hold 90/10 your statement would make more sense.
You were (perhaps unintentionally) quoting Rick (Humphrey Bogart) in Casablanca (1942). I just supplied a few more words of the quote. Full quote, Bogart to Ingrid Bergman:

"Ilsa, I'm no good at being noble, but it doesn't take much to see that the problems of three little people don't amount to a hill of beans in this crazy world."
LOL. Oh sorry for being slow on the uptake. I was scratching my head trying to figure out how 50/50 could be so different from 60/40. LOL. Thanks for clarifying.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
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