American Funds - EDJones

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Sep 3, 2008 12:40 pm

I never thought I would do this, but it is what it is.

 
I am setting up a Simple IRA for a client's wife.  She is in her mid 30's.  I am using American Funds...ugh.
 
How would you Jones guys allocate an American Funds portfolio by percentages?
 
Thanks.
Sep 3, 2008 1:13 pm

Snags, I'm not a Jones guy. 

 
If I'm setting up any account that has small dollars, I want it to be easy and with as little maintenance as possible.  For an account like this, it would probably mean 100% of the money going into a target date retirement fund like the 2040 fund.
Sep 3, 2008 1:57 pm

I'm not Jones either, but I agree with Anon on the easy & little maintenance.  100% to a world allocation fund, Capital Income Builder.

Sep 3, 2008 7:27 pm

CAIBX is a good idea for someone young, and using just one fund. Not many allocation funds do as well over the long-term.



Not sure, but I don't think you can use American's Target-date funds in a SIMPLE. I think you can only use them in American 401K's.

Sep 3, 2008 9:25 pm
B24:

CAIBX is a good idea for someone young, and using just one fund. Not many allocation funds do as well over the long-term.

Not sure, but I don't think you can use American's Target-date funds in a SIMPLE. I think you can only use them in American 401K's.

I think that only applies at Jones.......
Sep 4, 2008 12:43 am

What does it matter if you only use one of them or 4 of them, they all hold the same stocks and are all correlated at .80 or higher. 

Sep 4, 2008 9:01 am
BullBroker:

What does it matter if you only use one of them or 4 of them, they all hold the same stocks and are all correlated at .80 or higher. 

 
That is the case if you don't know WTF you are doing. 
Sep 4, 2008 11:52 pm
iceco1d:
B24:


Not sure, but I don't think you can use American's Target-date funds in a SIMPLE. I think you can only use them in American 401K's.

 
Can anyone confirm/deny this for sure?  Is this an EDJ thing, or a AMF thing?
 
I just sent the paperwork to the client.  You can definitely do Target-date funds in a SIMPLE, but they have to be A shares.  It's an EDJ thing.
Sep 5, 2008 6:53 am

I'll also confirm that it's not an American Fund things.  Target date funds must be "A" shares and must be in retirement accounts.

Sep 5, 2008 2:38 pm

Not a jones thing - it just has to be held at the fund company or least it did a few months ago.

Sep 7, 2008 11:34 am
B24:
BullBroker:

What does it matter if you only use one of them or 4 of them, they all hold the same stocks and are all correlated at .80 or higher. 

 
That is the case if you don't know WTF you are doing. 
 
Why would you say that I don't know WTF I am doing?  If you need I am more than happy to show you how correlating investments add nothing to your returns. 
Sep 7, 2008 9:53 pm

I didn't say YOU don't know what you're doing. I meant that if someone DOESN'T know WTF they're doing, you can easily build an overlapping portfolio at AMF. But if you DO know what you're doing, you can also build a good portfolio that does not have significant overlap/correlation. I meant "you" in general terms.

Sep 7, 2008 10:27 pm
B24:

I didn't say YOU don't know what you're doing. I meant that if someone DOESN'T know WTF they're doing, you can easily build an overlapping portfolio at AMF. But if you DO know what you're doing, you can also build a good portfolio that does not have significant overlap/correlation. I meant "you" in general terms.




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