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<< (re: post-retirement allocation of investments)

1) What do you think of the overall plan?

2) Is it wise rather than foolish to have $400 of the $600 in mutual funds?

3) Is it wise or foolish to even consider the Montag and Caldwell fund?

4) Should the $400 currently planned for the money market be better placed,

like a bond fund? If so, which one or ones?




Peter Lynch wrote an article (I got it from the WEB, but don't have the URL handy--maybe off of the Vanguard or Magellan site) discussing just this.

They did a lot of number crunching, and decided that if you invest in something like S&P500, and withdraw no more than 8% a year, you'll never run out of money. If you withdraw 10%, there is a very small chance that you'll eventually run out. He also said that being fully invested (diversified index) is better than being split between stocks & bonds.

As far a funds: From what I see, the O'Shaughnessey Cornerstone funds would be a better place than S&P500. (See "What Works on Wall Street".) I don't know anything about Montag and Caldwell. O'sh is back-tested, and has very mechanical screens, much like the Foolish UV and UG portfolios. With exactly 100 stocks selected, and all rebalanced once per year, you are getting pretty good diversity. Average return, standard deviation, and Sharpe ratio are all quite good.

MoneyMarketFund vs. Bond Fund: If the purpose if this is to keep some money in cash (or near-cash), then a Money Market qualifies, but a bond fund does not.

If you want, you can invest some of your money with the "First National Bank of Ray"


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