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Transfer Stocks into Bonds?

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jbcentral
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Transfer Stocks into Bonds?  Reply with quote  

Hello,

My wife and I are each 52 yrs. of age and we currently have 100% of our retirement savings (~ $1,000,000) invested in stock mutual funds via our 401Ks, IRAs, etc... While I realize my equity position is aggressive, I believe I am still very prudent in my selections of domestic and international stocks and I certainly have not had any issues sleeping at night.
That said, however, given we are 15 or so years from potential retirement, is now a good time to start diversify our asset allocation and invest in bond mutual funds, such as Vanguard's Total Bond Market Index Fund? If so, am I correct in thinking I should use the dollar-cost-averaging method and transfer just over 6% of my stocks into bonds each year over the next 8 years in order to have an approximate 50%/50% stocks-to-bonds allocation by age 60?

Any advice would be greatly appreciated, as I am definitely a novice.

Thank you!
Post Sat Mar 19, 2016 11:14 pm
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oldguy
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quote:
Any advice would be greatly appreciated


IMO, you have it right, move $5000/yr or $6000/yr until you have about 50/50. That bond fund has about a 5.6 year duration - you might consider a shorter fund, I'm using a 3.5 year duration. (I like to keep my 50% 'safe' money safe so that the principal is barely affected by market activity - and let my 50% stock do all of my inflation offsetting.)
Post Sun Mar 20, 2016 3:43 am
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jbcentral
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Thank you! Could you recommend a high-quality shorter, 3.5 yr. duration bond fund?

Thanks again!
Post Sun Mar 20, 2016 8:29 pm
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oldguy
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Fidelity has the FSITX fund, I can recommend it cuz that's the one that I use.
But I'm sure that Vanguard has one too, the two companies nearly mirror each other, they almost have to, they are the two giants and they are direct competitors, if one couldn't meet the competition they would lose LOTS of business.[/quote]
Post Sun Mar 20, 2016 8:45 pm
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