Topic: Retirement Investing Ideas (Read 25694 times)

« **on:** June 01, 2004, 12:24:32 AM »

Howdy Al--Just wondering if the advice from your friend and mine CLAYT..is good concerning buying into some ginny maes at vanguard when the price comes down. or should I leave my monies in the xerox income fund??? need to kinow, not long to go. Big O

allancoleman · « **Reply #1 on:** June 01, 2004, 01:14:05 AM »

owen ,

it's true clayton is one of my best friends in alaska , along with dick , and he and i , along with dick are considering the vanguard gnma fund as a possible investment . clayton has owned them before and did so well on them that i am taking a serious look at them myself as their n.a.v. has dropped lately .

most fixed income mutual funds have a n.a.v. that moves up and down depending on the bond market . the range on the vanguard gnma fund ( VFIIX ) is between $ 9.50 a share and $ 10.50 a share with occassional prices below and above that range . http://finance.yahoo.com/q/bc?s=VFIIX&t=my...&1=on&z=m&q=1c=[/url] . i am looking at putting a large sum of money in my roth into that asset class at a n.a.v. BELOW $ 10.00 a share . i expect clayton's return from outside shortly and will get together with him at that time and discuss our buy point . this investment would only be suitable for your long term fixed income asset allocation . and like all fixed income mutual funds with a n.a.v. is subject to a principal loss in the event of a decrease of that n.a.v. the xerox income fund is presently paying about the same dividend so i don't know that you would make much more money in gnma's than we are presently making in the xerox 401(k) income fund . my attraction to them is in my roth ( tax free ) account outside my xerox 401(k) . and of course all investments i discuss are not meant to be advice from myself or xertech and you should consult a investment advisor of your own . afterall , it's your money .

clayton and i will let you know when we make our purchase and at what price . clayton will / may buy before i do as i'm waiting for something below $ 10.00 a share . and clayton purchased them before at about $ 10.10 or $ 10.15 a share . they are presently at $ 10.24 a share but were at $ 10.14 a share just a few weeks ago . i would like to buy all my shares at $ 9.50 a share but not sure they'll get that low and i'll probably dollar cost adverage my way into them at any price below $ 9.80 / $ 9.90 a share .

nice to hear from a friend of clayton's . if there is anything i can do to make your stay on our forums more pleasant , let me know . please feel free to add to or start any topics on your own . see ya later .

allancoleman · « **Reply #2 on:** June 09, 2004, 03:25:08 AM »

owen ,

you might like to know that clayton arrived in the great white north safe and sound . had a smashed window shield enroute , but i'm sure he'll tell ya the story better than i can .

p . s . the vanguard gnma fund that clayton and i have been watching has not dropped lately so that investment is on the back burner for now . sometimes investing requires patience . i'll have breaksfast with clayton tomorrow morning and loan him my copy of John Mauldin's latest book , " Bull's Eye Investing - targeting real returns in a smoke and mirrows market " , that i just finished .

allancoleman · « **Reply #3 on:** June 15, 2004, 01:35:26 AM »

owen ,

the vanguard gnma fund clayton and i were discussing has set a new 52 week low today ( $ 10.13 a share ) . clayton left this morning to go fishing on the kenai so i'll have to wait for him to return to see what he's thinking for a buy point . he took my Mauldin book with him to read . it's mostly about " secular " markets , value investing , and hedge funds .

if the fed raises interest rates as often as some say they will , the n.a.v. of this fund could get to be a " no brainer " value .

« **Reply #4 on:** June 17, 2004, 03:46:42 AM »

Quote from: owen wellbrock

Howdy Al--Just wondering if the advice from your friend and mine CLAYT..is good concerning buying into some ginny maes at vanguard when the price comes down. or should I leave my monies in the xerox income fund??? need to kinow, not long to go. Big O

The advise regarding Vanguard is good. I left Xerox in 94, took the very first VRIF after 28 years. I have had Vanguard, or similar funds since then.
Vanguard has one of the least volatile funds, and some of the lowest fees, and you can reinvest div with no commisions or extra fees. A word of caution, no matter how good anything is, don't put everything in one investment. There are some very good Utility preferred notes that pay in the 7% range, and they always will return face value as long as you hold them to maturity, or until they are called. As an example, you can buy Miss Power notes now for $23 or so. The pay 6.3% , and have a face value of $25.
So even if they were to go down to $20 a share, they still pay the same interest, and return $25 to you when they mature. A similar investment is Gov't agency bonds. They trade up and down, but always return your principal when they mature. Federal National Mort Assoc issues bonds on a regular basis. Collect the interest for years, and get all of your principal back at maturity, or when the are called. The up and down daily quotes are of no concern. If they trade down to a dollar each, you still get face value at maturity.

allancoleman · « **Reply #5 on:** June 17, 2004, 04:38:32 AM »

jb ,

you're correct about " date certain " maturities . these are the fixed income issues that change every day in their price but as you said , don't effect the long term investor . you collect your dividend and get your principal in the end .

vanguard is not only inexpensive but , to my knowledge , they are the least expensive mutual fund provider . i always use vanguard as a comparison against other mutual funds cause i know vanguard is the " low cost " provider .

and you're right about not putting all your eggs in one basket . diversification is the name of the game .

i just put together a calculation for my own decision process on what n.a.v. to buy the vanguard gnma fund . if i buy that fund at $ 10.00 a share n.a.v. and the n.a.v. drops to $ 9.50 then that is a loss of 50 cents or 5 % of it's principal value . gnma's are presently paying about that yield every month so my REAL return would be zero . and because the vanguard gnma fund has fallen from it's 52 week high of $ 10.75 a share , the year to date return is negative .

if i bought that same fund at $ 9.90 and it fell to the same $ 9.50 , my loss would be 40 cents or 4.04 % and with the yield being slightly higher , my REAL return would be positive but small .

if i bought that fund at $ 9.80 a share and it fell to $ 9.50 then my loss would be 30 cents on a decline to $ 9.50 and my loss would be 3.06 % of my principal but i would have gotten a yield of 5 % durning that period and my REAL return would be about 2 % .

if i bought that fund at $ 9.70 a share and it fell to $ 9,50 then my n.a.v. loss would be 20 cents or 2.06 % and with a yield of 5 % , i would be ahead of my n.a.v. loss .

and lastly if i purchased that fund at $ 9.60 a share and it fell to $ 9.50 , i would have lost ten cents , or 1.05 % and with a yield of 5 % , i would be ahead of the game with a REAL return of 4 % .

this is the exercise one has to do when you are considering weither to purchase a fixed income mutual fund investment with a n.a.v.

of course when the n.a.v. of this same gnma is raising you not only get the yield but also principal appreciation . and for purposes of comparison , the gnma fund usually pays between 4 % and 6 % . i picked 5 % in my calculation cause it was a happy medium .

for MY money a purchase at $ 9.80 or below is a value and between $ 9.80 and $ 10.00 a share is a personal call . and those that purchased at the 52 week high of $ 10.75 are underwater at this point and likely to suffer more .

and of course this entire post is not meant to be investment advise from me or xertech but just my thoughts . you should consult your own investment advisor for specific advice .

allancoleman · « **Reply #6 on:** June 17, 2004, 07:16:52 PM »

here is a link for other thoughts on gnma investments and others .

http://www.suite101.com/print_message.cfm/...g/100507/976020[/url]

PLEASE read the disclaimer on his post and this also IS NOT my specific recommendation or xertech's . remember WHOSE money you're investing .

« **Reply #7 on:** June 24, 2004, 02:41:54 AM »

Hi Al--I see some of you ramblings from clayt about the nav price of the income fund. From a green horn to you, why is that something you watch closely. And what is wrong with leaving a chuck of $$ in that fund. It seams to me, that over the long haul, that fund does fairly well. I am gald to see some intrest in this form. say howdy to clayt. later---owen

allancoleman · « **Reply #8 on:** June 25, 2004, 12:33:59 AM »

ow ,

the income fund is your best bet INSIDE the 401(k) for now for " safe " money . i was just interested in the gnma fund for my other deferred accounts like my I.R.A. and ROTH I.R.A. which is OUTSIDE the xerox 401(k) . the gnma fund also has the possibility of generating double digit returns with not only from the monthly dividend yield but also the appreciation of the n.a.v. and of course the xerox 401(k) income fund probably will never provide double ( more than 10% ) digit returns .

the other side of that coin is that the xerox 401(k) income fund will probably never suffer principal loss and the gnma 's can definitely lose principal while still providing monthly dividends and actually are capable of generating a yearly total negative real return in spite of paying you a dividend every month .

that's why , in this enviroment of raising interest rates , you must be very careful of putting your hard earned retirement dollars in a fixed income mutual fund with a n.a.v. after all it's your money

i'll say hi to clayton for ya .

allancoleman · « **Reply #9 on:** June 25, 2004, 12:44:29 AM »

received a personal e - mail from KT6135 regarding the Northwest Mutual family of mutual funds . i asked for specific TICKER SYMBOLS in order to do a through analysis of each fund he was looking at .

and i agreed with his thoughts that even though his relative works for them and said , " they were free " doesn't mean they are .

once again , any of you that send me personal e - mails , i will respond on that particular forum also . helps to educate everyone . if you want me to keep your e - mail private , just say so .

allancoleman · « **Reply #10 on:** June 25, 2004, 11:45:45 AM »

just received a follow up e - mail from KT6135 asking about vanguard and i responded that by going with the vanguard family of mutual funds you are not only certain of getting only no load mutual funds but also vanguard is the lowest cost provider in the mutual fund industry .

KT also complained about his year to date performance of 2.3 % and i reminded him we are in a secular bear market that began in 2000 and have had a setback in the cyclical bull market rally that began march of 2003 .

KT said he would ask for the ticker symbol for the mutual fund he was looking at investing in at Northwest Mutual .

allancoleman · « **Reply #11 on:** July 03, 2004, 03:53:01 PM »

there are alot of books on how to invest your money in order to have enough to retire . there are very few on strategies of how to withdraw your money after you retire :

http://socialize.morningstar.com/NewSocialize/asp/FullConv.asp?forumId=F100000001&convId=116018' target='_blank'>http://socialize.morningstar.com/NewSocial...1&convId=116018

allancoleman · « **Reply #12 on:** July 09, 2004, 04:18:29 AM »

just replied to a personal e - mail i received from KT6135 regarding his investment in NorthWest Mutual . the ticker symbol he gave me ( NPFN ) didn't compute in my investment quote systems ( yahoo finance - morningstar.com - compuserve - etc ) so i suggested that it might be a privately held company .

google gave me several hits for NorthWest Mutual from insurance campanies to a mutual fund family in canada .

most mutual funds have five letters and end with a " X " . so i asked KT6135 to get me some more data in order to research this investment . in ending , i said i wouldn't put any of my money in a investment i couldn't track .

also told KT6135 that i was sorry for the delay in responding to him , but that i was out of town for a few days .

allancoleman · « **Reply #13 on:** September 04, 2004, 04:47:54 PM »

below is a link that explains what xerox's current income fund returns are now based on . note that in the body of the questions section , the article explains the problems in the past with Executive Life and those of you may remember xerox's problems with their old " guaranteed fund " . and , of course , the income fund is no longer called the guaranteed fund for this very good reason .

http://www.stablevalue.org/help/faq_main.asp[/url]

« **Reply #14 on:** September 24, 2004, 09:33:00 PM »

Hey Al--Do you see anything wrong a retired x-oid leaving thier monies in the balanced funds and income fund to produce liviable income. While ture, that you will not set the world on fire, but at least it would be steady growth, provided you do not draw down the principle. Do you think this sort of rational will keep up with inflation.

Author Topic: Retirement Investing Ideas (Read 25694 times)