Trying to decide where to put some money (move, state, retired)

[Wanderer0101]

Now that I've retired, I have to move some money around, a pretty substantial amount, and I'm trying to decide where to put it. I've always been an advocate of Couch Potato investing and follow Scot Burns advice for the most part. The essential idea being that you put the money into low cost index funds and re-balance once a year. The Coffee House approach is new to me but seems to perform well. It kind of comes down to do you prefer Vanguard or Fidelity, do you think an international bond fond should be part of a balanced portfolio, do you think it makes more sense to have 40% in bonds rather than an equal balance? I'm a big believer in the idea that lower cost drives better returns over time but I also believe in diversity. I'm down to four possibilities and I'd be interested in any input on which way you would go. I might mention that my basic cost of living is covered by other stuff so I don't have to have the return from this to live on.

Six Ways from Sunday – Vanguard Funds
• 1/6—Vanguard Inflation-Protected Securities (VIPSX) .1% VAIPX
• 1/6—Vanguard Total Stock Market Index (VTSMX) .05% Admiral Shares VTSAX
• 1/6—Vanguard Total Intl Stock Index (VGTSX) .14% VTIAX
• 1/6—SPDR Lehman International Treasury Index (BWX) * .19 VTABX
• 1/6—Vanguard REIT Index (VGSIX) .12% VGSLX
• 1/6—Vanguard Energy (VGENX) .12 VENAX .12 Average

Six Ways from Sunday – Vanguard Funds – Replace Int. Bond Fund with Vanguard Value Index
• 1/6—Vanguard Inflation-Protected Securities (VIPSX) .1% VAIPX
• 1/6—Vanguard Total Stock Market Index (VTSMX) .05% Admiral Shares VTSAX
• 1/6—Vanguard Total Intl Stock Index (VGTSX) .14% VTIAX
• 1/6—Vanguard Value Index Fund Admiral Shares .09 VVIAX
• 1/6—Vanguard REIT Index (VGSIX) .12% VGSLX
• 1/6—Vanguard Energy (VGENX) .12 VENAX .103 Average

Six Ways From Sunday Portfolio (Using only Fidelity funds):
• Fidelity Inflation-Protected Bond Fund (FINPX) .1% FSIYX
• Fidelity Spartan Total Market Index Fund (FSTMX) .07% FSTVX
• Fidelity Total International Equity Fund (FTIEX) .17% FSIVX
• Fidelity New Markets Income Fund (FNMIX) .9%
• Fidelity Real Estate Investment Portfolio (FRESX) .19% FSRVX
• Fidelity Select Energy Portfolio (FSENX) .79% .185 Average

Coffee House Fund
40% in Bond Fund, 60% split equally among others.
US large cap VFNIX 0.17% VFAIX 0.05% V00 0.05%
US large value VIVAX 0.24% VVIAX 0.10% VTV 0.10%
US small cap NAESX 0.24% VSMAX 0.10% VB 0.10%
US small value VISVX 0.24% VSIAX 0.10% VBR 0.10%
REITs VGSIX 0.24% VGSLX 0.10% VNQ 0.10%
International VGTSX 0.22% VTIAX 0.14% VXUS 0.14%
Intermediate bond VBMFX 0.20% VBTLX 0.10% BND 0.10%

[FiveLoaves]

I'm all for the simplicity of these approaches, especially keeping everything under one roof. I've been with Fidelity for 25 years and it's been a mutually good relationship. Their fees may be a tad higher.....but the performance is there. Seeing most of my holdings on a single statement is heartwarming to me.

Can I ask a question.......you seem to follow these Funds very closely. How have the Bond segments performed ?? Did they provide any "cushion" during the turmoil last summer ?? What has been the gain over the past 6 months ??

[TuborgP]

I fully understand your question and your fund choices. I would say that I believe in diversification not just within a portfolio but also with investment houses. I have money with three different companies with multiple portfolios in some. They are Roth, Taxable and retirement funds. I also have some diversification in similar portfolios between myself and my wife. Index funds are pretty much the same but active funds can be different and they all offer different investment options when I put money in. My retirement accounts are basically done with new money since we are retired and we have three taxable portfolios one with two funds, another with three and one basic five index fund portfolio with two active funds. It sounds cumbersome but it isn't. When small caps tank I will be more likely to put money in New Horizons etc. Bond funds are mostly in retirement accounts and all of the portfolios have a cash component. I can bury a portfolio for awhile and just invest in one or both of the other two. They each have a purpose now and in the future. Reality is I am investing as if we were three different couples.

[rjm1cc]

I would lean toward Vanguard but as mentioned I would use more than one vendor. What happens if your account is subject to fraud etc. Diversification of vendors is a good idea. Fidelity will sell you Vanguard funds so no problem there.

Bonds are a problem. I know what the guide lines are but for my money I would not buy a bond fund or ETF (ok short duration bond funds can be ok if you pay attention). These funds are going to lose money as interest rates go up. I would buy individual bonds with the idea of holding to maturity. But again I would probably want a 3 to 5 year maturity.

Be sure you have an emergency fund and a bucket of cash to meet day to day expenses for several years so you do not have to sell stocks in a down market.

[FiveLoaves]

That's why I was hoping that the Wanderer would come back and tell us what he saw from those Bond Funds over the past 2 quarters. I wanted his first hand view of those Bond Funds on his list.