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In January I took out most of my money (5/6th) and put it in a fixed account with TIAA/CREF. It's currently making 7.25%. I moved this money because I took early retirement, and I plan to live off the interest--which is doable. I still have the remainder of my money in 3 stocks which I plan to keep. However, prior to increasing my allocation to the above fixed account, I was 50% invested in the stock market.

My question is this? My guess is that the interest in my fixed income account will probably continue to go up as Greenspan increases interest rates (probably to 8%), and I would be happy with these returns. However, although I don't want to move my money out of the fixed account prematurely, I do at some point want to buy some of the depressed blue chip stocks. What is the best way to go back to my 50/50 allocation (Fixed Account/Stock Market)? Dollar cost averaging? If yes, would it be best to start rolling over some of my money out of the fixed account and into my Broker's (Fidelity) Money Market Account now, or should I wait and see which way the wind is blowing? I don't have to buy at the extreme bottom, but I do want to get some good prices. There must be a Foolishly strategic way to do this right.

Because the rollover process is time consuming,I feel I should have some money sitting in the broker's Money Market account (at 5%). This way I could buy when the time is right. But I wouldn't want my money sitting in a money market (losing all that additional interest from the "fixed-income" account) waiting for the right time to buy stocks. Am I being penny wise and dollar foolish? I do tend to be a penny pincher.

I'm conflicted but not complaining. Can someone with investment experience point me in the right direction?

Thanks in advance, Sandy



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