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J.D. Welch  

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  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    Jacques: Not sure what FTFs are. I'm limited to investing in mutual funds and ETFs in my 401(k), and I'm investing in Dividend Growth stocks of various flavors and asset classes in my IRA...
    Aug 10, 2012. 03:38 PM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    MBehr55: When I roll over my 401(k), I'm not going to be investing in ETFs any more, I'll be investing in Dividend Champions, Contenders and Challengers, and whatever stocks are currently yielding the best within a reasonable risk profile then...
    Aug 10, 2012. 03:15 PM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    Thank you for your concern, webapalooza. Please bear in mind that this is just my 401(k) in its current state, which I didn't start contributing to until last December (2011). I also have an IRA in which, I feel, I am very well diversified. If you go to the following article, which was my mid-year recap, and scroll down to the "Summary" section, you'll see what my portfolio looked like at the end of June. It's changed somewhat since then, the changes documented in subsequent "My Mad Method..." articles after this one:

    That's the last article in which I list my entire portolio (I think), but since then I've added things like AGNC, AFL, ARLP, BBL, KO and more to JNJ.

    As for bonds or bond funds, I don't feel that bonds are the place to be at this point in time, given the historically low interest rates. I know that Modern Portfolio Theory [MPT] emphasizes diversity that includes bonds and precious metals, but I've embraced Dividend Growth Investing [DGI], which takes a very different approach to building one's portfolio. In DGI, the goal is to build a portfolio of solid, stable companies that pay dividends and grow their dividends at a rate that excedes inflation, so that when you retire you have a steady and reliable (and growing) income stream that replaces your former paycheck. As such, I don't want or need (I feel) to have bonds or bond funds in my portfolio, at this time, to "balance" the portfolio.

    Hope that makes sense, and thanks for the comment!
    Aug 10, 2012. 12:06 PM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    Thanks, I just looked up HTD, and while it's got a 5 star Morningstar rating, which is great, I'm not sure I can invest in CEFs in my particlular 401(k). I will check with Fidelity about our plan, but in general I'm not enamored of CEFs, and would prefer to stick with YAFFX and the ETFs.

    Thanks for the suggestion, and the links!
    Aug 10, 2012. 10:33 AM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    I just looked at KBWD, and it has a lot of the same mREITs in it that REM has, but with a much worse Marco Polo rating (6.5 vs 10) and yield (9.52% vs 11.93%) than REM. I wouldn't be comfortable holding both REM and KBWD at the same time, as I'd just be duplicating exposure to a lot of the same stocks across the two ETFs.

    Thanks for the suggestion, though! :-)
    Aug 10, 2012. 10:28 AM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    "Are you saying you're trying to make up for lack of sufficient retirement savings by taking on more risk? ;-)"

    - Absolutely! :-)

    "25% exposure to REM seems high for me. I'd be more comfortable with it at 5%."

    - Keep in mind that I don't have much capital to work with at the moment. It may seem like a high percentage, but in order to avoid spending too much money on commissions, I've decided on a 1/4 split of the money I've accumulated so far (which isn't much)between these four position for the time being. Once I've accumulated a decent position, I will most likely add one or more additional ETFs to the mix, and distribute funds into it along with the others, thereby reducing the amount of new money that goes into these initial ETFs. Also, I don't expect to hold REM forever, just as long as interest rates are at their historic lows and mREITs are throwing off the yields that they are. When interest rates start going up, I will have something on the watchlist to transfer some, most or all of the money out of REM and into the other, new ETF. Also, this isn't my primary retirement savings account at this time, but a small piece of the overall puzzle that includes my IRA, my wife's IRA, company stock, and a "pension"-like retirement fund that my company is funding on an annual basis on my behalf, and which I receive when I retire, or, optionally, when I hit the "Rule of 75".

    "What about exposure to other asset classes like emerging markets, small caps, real estate,etc. "

    As I said above, this isn't my only retirement vehicle. I have small and mid cap stocks in my IRA. I had some exposure to emerging markets in my old IRA, but decided to trim those down; now I've got two Australian stocks and one Singapore stock left in that old IRA, which are doing very well. So I feel that, between my IRAs and my 401(k), I've got a pretty good exposure to a variety of asset classes.

    Thanks for your comments! Hope this helps... :-)
    Aug 10, 2012. 10:23 AM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    Hey, Skyler.
    Yeah, I'd read that article before, in fact I think I bookmarked it. I read it when I was looking at adding more MLPs to my IRA. I have a couple of MLPs in my IRA now, and this is the first year for that, so next year will be my first experience (experiment) with working with K-1s at tax time. But from what I've read from other commenters, there's a lot of folks who've invested in MLPs for a long time and have never had a problem with UBTI or entering the K-1 data into TurboTax, which is what I use.

    I'd love to hold all my MLPs in a taxable account, but I just don't have the resources at the moment to open a taxable account (wait until you have a mortgage and kids in college, my young friend!). Once I'm maxed out on my 401(k) contribution, which will be in about 4 and 1/2 years (and maybe I'll have to wait until my youngest is out of college, too, which will be in about 7 years) I should be able to open a taxable account and take up positions in MLPs, assuming they're still in vogue at that point and yielding their amazing yields still (which I figure they will), and then I can sell all the MLPs that are in my IRA and use those funds to flesh out the CCCs I want to have in that account. But in the meantime, it's hard to find companies that yield as much as the MLPs do. I don't have many, but may add one more, VNR, before the year is out. If I find that I get totally screwed at tax time next year, I'll have to decide what to do and where to put my money so that I can get similar yields. But in the meantime, I'm content to collect their distributions and see what happens come next tax time...

    Thanks for the heads-up, I appreciate it!
    Aug 9, 2012. 07:07 PM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    Tahoe: Those are all stocks (equities), which I can't invest in from my 401(k). I've looked into KMR and KMI, and I think it was chowder who said, "Anything with Kinder's name on it, I'm in." KMR is nice because it tracks pretty closely to KMP, but instead of distributions in cash they give you stock, so, yes, no K-1. I've plugged all three into my My Mad Method spreadsheet for evaluating stocks to possibly purchase, and they didn't wow me vis-a-vis other options. I've left KMP on my watchlist knowing that KMR is a bit cheaper and pays in shares, so if KMP ever gets to the point where it looks good to add to my IRA, I might consider KMR and just let the shares accumulate. However, at the moment I need cash from dividends and distributions to fund purchase of other stocks (as well as re-investing in the companies that paid the dividends / distributions, but I don't DRIP at the moment), as I prefer to get the cash and use it where I see fit.

    EEQ I don't think I've ever heard of, so thanks for the heads-up, and thanks for the comment!
    Aug 9, 2012. 06:57 PM | Likes Like |Link to Comment
  • My 401(k) - Exchanging A Mutual Fund For ETFs, Part 4 [View article]
    Actually, I'm not putting it into the MLP index, but YAFFX. I wouldn't say that I'm chasing yield, in the sense that it has come to be known, with XLU or HDV. With REM, yes, guilty as charged. Gotta juice my returns so I can catch up in the time remaining before I retire and make up for 25 years of not putting money away in a 401k or anywhere. But XLU and HDV's yields fall within the "acceptable" 2%-4% range, so technically that's not "chasing" yield. Of course, yield is the primary objective, but...

    Thanks for your comment... :-)
    Aug 9, 2012. 05:32 PM | Likes Like |Link to Comment
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