Is This Dangerous?

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Is This Dangerous?

Post by Felipe » Fri Feb 24, 2017 5:48 am

I run a 401k for my family business.

I am offering the Wellesley fund in the 401k in a few months and I'm considering moving my parents retirement funds to Wellesley. They started their 401k within the last few years so the amount is not massive.

They already have about 5-10% of their assets in Wellesley. Would they be too exposed to management or some other risk by also moving their retirement assets to Wellesley?

They are currently in a nearly equal mix of total bond, domestic/international equity, and short term government bonds since they will retire in 5-10 years.

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Re: Is This Dangerous?

Post by DutchGirl » Sun Feb 26, 2017 3:22 pm

The Vanguard Wellesley fund? It has 60% bonds (both US government and corporate), 40% stocks. It's actively managed.

As for the stock portion, the description says: "Using fundamental research, the advisor typically invests in fewer than 100 stocks".
If I assume "fewer than 100 stocks" doesn't mean that they have just 1 or 2 stocks, but let's say at least 50, then it's a reasonable diversification for the stock portion.

Or do you mean a different Wellesley fund?

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Re: Is This Dangerous?

Post by jacob » Sun Feb 26, 2017 3:27 pm

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Re: Is This Dangerous?

Post by Felipe » Sun Feb 26, 2017 3:57 pm

That's the correct Wellesley Fund.

For the "Investing for Parents" thread, that was for a taxable account and a smaller amount of money. I'm more worried because this is a retirement account so I was treating it even more conservatively.

It will be more tax-efficient in a retirement account but I'm worried about putting too many eggs in one basket. If I do this switch, then 100% of their equity and bond exposure will be in one fund. Forgive me if this was redundant- I wanted to be thorough and thought this was a sufficiently different context to use another thread. I really don't want to lose their money.

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Re: Is This Dangerous?

Post by jennypenny » Wed Mar 01, 2017 4:51 am ... d-possible

I'm very comfortable with Wellington managed funds. In the event of my demise, I've instructed DH to move our money into a Wellington/Wellesley split.

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