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Author: Alpha1918 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 21  
Subject: Rebalancing to increase Index Funds Date: 5/17/2001 2:45 PM
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I am 49 years old, and still a long term investor.
I currently have a mutual fund portfolio as follows: IRA (growth and income), 403b (consisting of 3 funds of large growth, international, and Europe).
I also have nine taxable growth funds of: 1 large cap, 1 mid cap, 1 small cap, 1 financial sector, 1 technology sector, 1 "Personal Strategy Growth, 1 "Spectrum Growth, 1 Total Stock Market Index Fund, and 1 Total International Stock Market Index Fund.
Index funds have been very appealing to me and they have been my most recent purchases and I intend to keep them. I like the relatively low cost, low turnover, and tax advantages. As far as my other taxable accounts are concerned I would like to keep my sector funds (and even add a few others such as health care, utilities, or reits that may hopefully offset the periodic "bearish downturns" in the market). Therefore, I am considering maintaining my IRA and 403b as it is, keeping (and possibly adding to) my sector funds, but selling the rest of my taxable funds and placing that money into my Total Stock Market Index Fund and Total International Stock Market Fund.
Please give me your opinion of that strategy, and any suggestions you may have.

Thank you for your assistance,
alpha1918

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Author: crh310 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14 of 21
Subject: Re: Rebalancing to increase Index Funds Date: 7/12/2002 1:27 AM
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I currently have a mutual fund portfolio as follows: IRA (growth and income), 403b (consisting of 3 funds of large growth, international, and Europe).
I also have nine taxable growth funds of: 1 large cap, 1 mid cap, 1 small cap, 1 financial sector, 1 technology sector, 1 "Personal Strategy Growth, 1 "Spectrum Growth, 1 Total Stock Market Index Fund, and 1 Total International Stock Market Index Fund.
...
Therefore, I am considering maintaining my IRA and 403b as it is, keeping (and possibly adding to) my sector funds, but selling the rest of my taxable funds and placing that money into my Total Stock Market Index Fund and Total International Stock Market Fund.

Sounds as if you are what is called a "closet indexer". Your portfolio covers the waterfront. This is not necessarily a bad thing. You don't say if you are satisfied with the performance of your present mix. By implication, you may not be, but if you are, why change?

My feeling is that the Toatl Stock Market Index fund is dominated by the S&P500 portion, and that it will perform more or less like the S&P. The Extended Market Index Fund is like the Total, but without the S&P part, You can tailor how much large cap stuff you want by mixing the extended market with the S&P. Do you have any income producing funds at all? At your age it may not feel necessary. Vanguard has a REIT indexer which I use as a surrogate for bonds.

cliff

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