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Subject:  Re: Wellesley Income Fund Date:  3/10/2003  12:42 PM
Author:  yobria Number:  35867 of 88758

A lot of good questions, and as mentioned you're on the right track to successful retirement investing.

The Wellesley fund is a great choice for someone of retirement age. If you're going to be drawing down the principal from this investment to live on, however, you may want to ladder (as mentioned) part of the fixed income in bonds or CDs. Then you know exactly how much you'll have to cover next year's living expenses, and when you're going to get it. Also, the Wellesley doesn't provide international diversification, which you must have. I'd put 25% of your stock investment in international equities.

>>if the market comes back I can roll it into the Wellington 60/40
What your saying is, "Stocks are cheap now, but when they become expensive again I'll overweight them in my portfolio". I wouldn't do this- you won't have much luck trying to time the market.

>>What about placing everything with one company?
I recommend this. The securities industry is so regulated that you're not at risk of losing your investment due to fraud or bankruptcy by a major fund provider. Also, the more money you have with a single institution, the more perks you get. If you make Admiral at Vanguard, for example, your expenses are sharply reduced.

I don't agree with Paul that you should slowly drip the stock portion of your investment into the market. (I also think dollar cost averaging is an obnoxious myth, but maybe I just don't understand it). Decide the % you wish to allocate to stocks, invest the whole thing now, and remain fully invested.


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