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It's kind of been talked around in several posts lately, but I thought I would ask specifically. A well-balanced portfolio has to have x-amount of fixed income no matter where you are in the journey. In the current environment where are you investing or are you just keeping that portion in cash?
As May approaches I have been selling equities down along the way since the first of the year as I have been keeping my equity allocation in check during the recent seasonal equity run and raising both cash and fixed income along the way.
Today, I ran an Instant Xray report to see how my current allocation bubbled. By doing this, I can determine what I have to do to get to my target allocation to better weather the traditional equity slow period which usually runs form May through October. I have set my target allocation at about 15% cash, 35% income, 40% equity and 10% other. To reach this I’ll need to reduce equities by about 3% and raise my allocation to short term fixed by a like amount. I will most likely maintain this allocation until fall unless there is a substantial pull back in equities during the traditional slow period in which I’ll reduce my income and cash allocations and buy some more equity exposure.
I have been buying short term fixed through the most part of April with my prior equity sell proceeds while keeping cash at about 15%.
I have increased my income sleeve by adding some short term income fund positions. My Income Sleeve currently consists of the following funds … CSDAX, ITAAX, LIGRX, LALDX, LBNDX, NEFZX, SDUAX, THIFX, and TPINX.
Of my 35% slug of fixed income are OSTIX, PTRAX, LSBRX, PONDX, OIBYX, TGINX, BERIX, and MAINX.
Now, if you are familiar with the bucketing model, I also have a separate sleeve of funds for which I am accumulating 5 years worth of expense dollars in advance of a hopeful near-term retirement (currently I have 3). In theory, these should be as safe as cash. As you can see, I push that envelope a bit.
The funds in this sleeve are PIFZX, SUBFX, VWITX, and PAUDX.
My accomodation to "this current environment" is that I have been steering dollars to funds which give the managers additional flexibility in their allocations, and specifically ones shortening up on duration.
Talk about the best of times for bond investors here, there, and everywhere ........ Hope the Fed says nothing Wednesday afternoon to upset the party. I am getting repetitive here but in bondland I am 70% with 28% PGDIX (yes, I know not considered a bond fund besides anyone but me) 26% PONDX and 16% NFRIX. I had held a small amount in WHIYX which I have rotated into PGDIX and PONDX. Even though NFRIX is about as good a sleep well fund as they come, were it not for its 2% redemption fee before three months ( I have two weeks left) I would have rotated out of there into the more performance enhanced PGDIX and PONDX. Now I may just stay there after it's free of the fee.
I have not change much but I think staying very passive maybe good in long term - I did buy several individual bonds recently but 401Ks still 80% stocks 20% bonds. About Munis, probably stay medium to long term also, especially if you hold good muni individaul high graded BBB+ or greater bonds.
I can't imagine tracking such very specific allocations by single percentage points. My bonds are held in MAINX, PREMX and DLFNX: -International/Asia -EM worldwide -domestic corporate and gov't ALSO, some bonds in the balanced fund, MAPOX. I own a zero-coupon thing that has almost matured now, (July 1st, Canada Day) after 10 years, too. But I count that as cash. It's been earning me 5.68% over these past 10 years and compounding.
So, I'm about 50/50, bonds/equities. Most is in Trad. IRAs, and the picture is by no means neat and trim. Two of my funds hold approx. 75% of my stuff: PREMX and MAPIX.
38% in fixed income. Certainly not a bad idea in a mature bull market that is now over four years old. I have 8% in PIMIX (Pimco Income Instit.) with the rest evenly divided between ADBLX, MWCRX, MWTRX, RNSIX, and SUBYX. As with several other posters in this thread, my emphasis is on multi-sector (do anything, go anywhere) bond funds while avoiding U.S. Treasuries.
We have not changed our fixed-income sleeve. Our overall bond allocation target for most client accounts is about 50% domestic and 50% foreign. Included in the mix are OSTIX, LSBDX, BSIIX, GSZIX, TGBAX, GSDIX, and GIMDX. For cash substitutes we use NEARX, LTMIX or LLDYX.
about 23% of the total in PTLDX, and various state-specific muni fund (open and closed-end); about 14% is in credit -- high yield, loans, mortgages, asset-backs, EMD, etc); i also have the CPI+ bucket, which (at 10% of the total) contains TIPs among other so called 'real assets'. some would include TIPs in their fixed income bucket.
Comments
As May approaches I have been selling equities down along the way since the first of the year as I have been keeping my equity allocation in check during the recent seasonal equity run and raising both cash and fixed income along the way.
Today, I ran an Instant Xray report to see how my current allocation bubbled. By doing this, I can determine what I have to do to get to my target allocation to better weather the traditional equity slow period which usually runs form May through October. I have set my target allocation at about 15% cash, 35% income, 40% equity and 10% other. To reach this I’ll need to reduce equities by about 3% and raise my allocation to short term fixed by a like amount. I will most likely maintain this allocation until fall unless there is a substantial pull back in equities during the traditional slow period in which I’ll reduce my income and cash allocations and buy some more equity exposure.
I have been buying short term fixed through the most part of April with my prior equity sell proceeds while keeping cash at about 15%.
I have increased my income sleeve by adding some short term income fund positions. My Income Sleeve currently consists of the following funds … CSDAX, ITAAX, LIGRX, LALDX, LBNDX, NEFZX, SDUAX, THIFX, and TPINX.
Good Investing,
Skeeter
Now, if you are familiar with the bucketing model, I also have a separate sleeve of funds for which I am accumulating 5 years worth of expense dollars in advance of a hopeful near-term retirement (currently I have 3). In theory, these should be as safe as cash. As you can see, I push that envelope a bit.
The funds in this sleeve are PIFZX, SUBFX, VWITX, and PAUDX.
My accomodation to "this current environment" is that I have been steering dollars to funds which give the managers additional flexibility in their allocations, and specifically ones shortening up on duration.
I have not change much but I think staying very passive maybe good in long term -
I did buy several individual bonds recently but 401Ks still 80% stocks 20% bonds.
About Munis, probably stay medium to long term also, especially if you hold good muni individaul high graded BBB+ or greater bonds.
http://individual.troweprice.com/public/Retail/Planning-&-Research/T.-Rowe-Price-Insights/Market-Analysis/Rising-Rates-Bring-Risks-and-Opportunities?placementGUID=em_id_COR&creativeGUID=EMBDHT&v_sd=201304
-International/Asia
-EM worldwide
-domestic corporate and gov't
ALSO, some bonds in the balanced fund, MAPOX. I own a zero-coupon thing that has almost matured now, (July 1st, Canada Day) after 10 years, too. But I count that as cash. It's been earning me 5.68% over these past 10 years and compounding.
So, I'm about 50/50, bonds/equities. Most is in Trad. IRAs, and the picture is by no means neat and trim. Two of my funds hold approx. 75% of my stuff: PREMX and MAPIX.