UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76079  
Subject: Re: Need Help with Allocation Date: 8/25/2005 3:18 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
If you are only going to be pulling 3-4% from this as a source of income, more equity would be very appropriate. Heck, there are some Stock div funds (100% stock) that pay 4% in dividends that are capped at 15% tax due to capital gains that would work for you; and they still grow much like the S&P (though with a bit less volatility due to the high div).

I would not have more than 20% in fixed income, as long as you plan to stay at or below 4% withdrawals. If you go to 5%, I would then consider going to 60/40.

As far as how much in managed, there is no real consensus on that but 50% of what you have in index would not be bad (e.g of 100K total, 66K in index, 33K in managed, of same asset classes). Having it as a hedge is the important part. I am of the camp that believes you can beat index funds with well managed mix of mutual funds. Looking at some of the best 1,5,10, and 20 year funds proves this. Take at look at the Fidelity Contrafund compared to S&P over the last 20 years.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Berkshire Hathaway

IBM: Is Buffett Wrong, or Brilliant?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement