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Author: dealing One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 169  
Subject: "Done" Date: 7/31/1999 2:34 PM
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My hubby and I have been retired for 2 yrs. and this is the board for us. Thanks for starting it. I have been consolidating our investments for almost a year now, feels like pruning a bush grown wild. I am new to the Fool site and love it. I am currently considering which of the "Dow" portfolios to use for a portion of our investments and would like to hear your ideas. We each have a Waterhouse IRA in addition to Vanguard funds for him and Janus for me.
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Author: GrayWulff Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17 of 169
Subject: Re: "Done" Date: 7/31/1999 4:54 PM
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dealing,

Here a few things to think about:

1. The Foolish Four in all the variations have good years and bad years. You might want to try it with a small percentage of your net worth until you get comfortable.

2. Do consider the RP4 version. It is not so heavily biased against high price per share companies as the older or "small dogs" approach.

3. FF works much better in tax sheltered accounts. Otherwise you generate capital gains every year. Personally, I wouldn't use it at all except in a tax sheltered account.

4. Consider some low turnover index funds for your taxable accounts. Or, go buy and hold with some large cap growth stocks (rule makers.)

5. Waterhouse accounts work better with "spiders" than with no-load funds like Waterhouse. Spiders cost $12 per transaction, NLF's cost $25 (or is it $24.)

Cheers,
GW

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Author: GrayWulff Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18 of 169
Subject: Re: "Done" Date: 7/31/1999 4:55 PM
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P.S.

Congratulations on retiring! I'm green with envy.

609 days to go!
GW

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Author: GrayWulff Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19 of 169
Subject: Re: "Done" Date: 7/31/1999 5:01 PM
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Oops!

5. Waterhouse accounts work better with "spiders" than with no-load funds like Waterhouse. Spiders cost $12 per transaction, NLF's cost $25 (or is it $24.)

I mean they work better with no-load funds like Vanguard.

Gonna fire my proof reader. :^)

GW

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Author: dealing One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20 of 169
Subject: Re: "Done" Date: 7/31/1999 9:08 PM
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Thanks for the info. I do currently have Rule Makers in DRIPS. My Waterhouse IRA and has both Rule Makers and Rule Breakers in it. I was considering the FF for my husband's Waterhouse IRA account. I use the web for my transactions which entails a $12. fee and agree with you that the frequent trading is best done in a tax deferred vehicle. I will look further into the RP4.
The Waterhouse accounts are used only for individual stocks, as we don't want to incur transaction fees when making exchanges in our no-load mutual funds. OK, so now tell me what "spiders" are, and don't say they are arachnids or some such thing.LOL

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Author: GrayWulff Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21 of 169
Subject: Re: "Done" Date: 8/1/1999 10:40 AM
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dealing,

I do currently have Rule Makers in DRIPS. My Waterhouse IRA and has both Rule Makers and Rule Breakers in it. I was considering the FF for my husband's Waterhouse IRA account.

Sounds like you've got it together.

Waterhouse is where we have our accounts too. They're pretty good, the S&P reports and the Zack's reports are very useful. Their Webbroker does seem to freeze up occasionally, but since I'm never in that much of a hurry, it doesn't bother me.

OK, so now tell me what "spiders" are, and don't say they are arachnids or some such thing.LOL

No, they are not creepy crawlies! Nasdaq-Amex has gone into competition with Vanguard. Strictly speaking "Spiders" refer to a type of depositary receipt that gives you ownership in the S&P500 stocks. Loosely, the term is also used to refer to depositary receipts that track other indexes (the Dow Jones Industrials, The Nasdaq 100, tecnology sector stocks, and others.)

They trade on the AMEX and are treated just like stocks. You pay a commission of $12 at Waterhouse. You can trade throughout the day, buy at the market, buy at limit prices, set stop loss orders, sell short, etc. Expense ratios are very similar to VFINX. Turnover is zero. Very convenient to hold in a Waterhouse account.

Here are a few of the common ones:


SPY S&P 500
DIA Dow Jones Industrials (30)
QQQ Nasdaq 100
XLK Technology Sector


There are discussion boards for all of these symbols. You might also drop by the INDEX FUNDS board. You can get a prospectus and lots of info from the Nasdaq-Amex web site:
http://options.nasdaq-amex.com/indexshares/index_shares_over.stm

Cheers!
GW

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Author: dealing One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22 of 169
Subject: Re: "Done" Date: 8/1/1999 12:50 PM
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Super! Learned something new with my very first question, and that is what I am here to do...learn.
Next question: Is there ever a need for bond mutual funds if you do not need the "somewhat steady income" they provide. Folks keep talking about diversification being the primary factor of bonds in a portfolio.

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23 of 169
Subject: Re: "Done" Date: 8/1/1999 3:08 PM
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I prefer bank CDs or US Treasury notes purchased from Treasury Direct to bond mutual funds for the fixed income portion of my portfolio. Even the expense ratio from a low-fee provider like Vanguard (0.28%) represents a good portion of today's yields, so keeping expenses low (or non-existent) is very important.

Also, if you hold a CD or US Treasury security to maturity, you're guaranteed to get your principal back. There is no such gauranty with a bond mutual fund. It is possible to lose money with even a US Treasury bond fund. (Even if bond prices remain the same, you'll be out the fund's expense ratio.)

intercst

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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24 of 169
Subject: Re: "Done" Date: 8/2/1999 8:48 AM
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Next question: Is there ever a need for bond mutual funds if you do not need the
"somewhat steady income" they provide. Folks keep talking about diversification
being the primary factor of bonds in a portfolio.


The bonds (any fixed income investment) are also for safty. If the market drops and your fixed income does not (or maybe drops less)you should feel better and hopefully ride out the stock market drop.

You might think of fixed income investments as the money you will spend in the next few years and that it will be replenished from the sale of stocks when stocks are up. A mutual fund is not well suited for this. You want securiteis that are maturing at face value. I think your "income" should come mostly from selling stocks. The fixed income investments just hold the proceeds (maybe for several years) from the stock sale until you need to spend the money. By the way, a money market is a fixed income investment.

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Author: dealing One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25 of 169
Subject: Re: "Done" Date: 8/2/1999 6:29 PM
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Thank you for quick and thoughtful responses to my questions.

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Author: FoolishProf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38 of 169
Subject: Re: "Done" Date: 8/8/1999 7:47 PM
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Concerning Waterhouse, one may also wish to consider their own fund (WDOWX) designed to track the DOW 30 as well as their list of "NTF" funds. No fee is charged on any of these.

FoolishProf

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