I have just retired and I am trying to rebalance my portfolio for income as
well as growth. I am basically looking for ideas on a mixture of funds that
will accomplish this goal.
------------------------------------------------------------ --------------------
Are you looking for specific mutual fund recommendations? Or
ideas for allocating your portfolio according to
big-medium-small cap, domestic v. international, bond
percentage, emerging markets, dividend growth stocks, etc.?
If the first, then for income and growth, give a lot of
consideration to a nice mix of (1) high grade bonds and CDs;
(2) ETFs dedicated to non-REIT, high dividend paying, blue
chip stocks that emphasize dividend /growth/ but will also
see the principal grow, too; (3) some REIT funds.
I am not so far impressed with the mutual funds I've seen
that are like 2 above.
"W. Wells" <> wrote
> I have just retired and I am trying to rebalance my
portfolio for income as
> well as growth. I am basically looking for ideas on a
mixture of funds that
> will accomplish this goal.
W. Wells wrote:
> I have just retired and I am trying to rebalance my portfolio for income as
> well as growth. I am basically looking for ideas on a mixture of funds that
> will accomplish this goal.
To start with, you need to calculate how much income you will need for
the lifestyle you want. Make a budget for your estimated yearly
expenses, figure out how much Social Security will cover, and then
figure out your needed income. Then you can calculate how much of your
portfolio needs to be allocated to income investments to generate the
income you need.
In the past, I've often suggested that a retiree look into a laddered
portfolio of individual quality bonds (Treasuries or highly rated
corporate bonds), rather than a bond fund. Bond funds fluctuate in
value and have no significant hope of appreciation in value. At least
with individual quality bonds, there is very little principal risk and
you can expect to get your principal back in full at maturity.
For the growth component of your portfolio, your time horizon may be a
lot longer than what the older books say. At least I hope that's the
case for you! It's common for a healthy 65 year old retiree these days
to expect to live to 85 at least. So to keep ahead of inflation, you
may need to invest more aggressively than a retiree 30 years ago would
have. If you have a heavy income component in your portfolio, then your
growth portfolio should try to meet the S&P 500 benchmark. Of course,
with index funds, you'll meet it no sweat.
--
Steven D. Litvintchouk
Email:
Remove the NOSPAM before replying to me.