Comments on: The 50-50 Mutual Fund Rule

By: Eric N.

Eric N. — Tue, 16 Dec 2008 19:47:49 +0000

Sorry for the late reply Jim…I was looking at a specific target retirement fund in my sibling’s 401K. The fund is SSgA Target Retirement 2045 Fund. For some reason, Google doesn’t show much so I’m not sure the fund is available outside of specific 401K plans. I got the prospectus from my sibling’s company 401K website.

By: TStrump

TStrump — Fri, 12 Dec 2008 19:27:40 +0000

I am embarassed to say, I own one mutual fund right now, and I don’t even know what the MER is!?
I also never considered the turnover rate before and will now rush off to the website and go through the prospectus.
Great tips!

By: Gates VP

Gates VP — Fri, 12 Dec 2008 16:52:44 +0000

Yeah, Malkiel basically founded the Vanguard-style index fund with the first printing of Random Walk in like 1980 or something.

By: jim

jim — Fri, 12 Dec 2008 15:23:03 +0000

Eric – Which fund were you looking at?

By: Eric N.

Eric N. — Fri, 12 Dec 2008 15:12:04 +0000

Thanks for the post Jim. I knew about expense ratios but turnover was something new. I tried looking at a fund’s prospectus but couldn’t find anything specifically on turnover. Where the P/E ratio is listed, it’s just a table of stats without any word explanations to them.

By: Cap

Cap — Fri, 12 Dec 2008 04:43:09 +0000

Miss M: the same probably applies for funds with high turnover rate too, which is something I dont see mentioned too often (or either that I’m not reading at the right places)

By: Miss M

Miss M — Thu, 11 Dec 2008 18:40:06 +0000

No surprise they would tout this in Vanguard’s newsletter, as home of the index fund they automatically meet this criteria. I don’t think there are many (if any) actively managed funds with an expense ratio below 0.5%.

By: katy

katy — Thu, 11 Dec 2008 16:49:24 +0000

he’s great!

In the random walk investing guide, he suggests buying stocks; bonds; real estate and having cash.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Thu, 11 Dec 2008 15:18:45 +0000

Typically the easiest way to hit the 50-50 rule is to invest strictly in index funds. They will have low turnover (except perhaps in 2008 when there are so many redemptions by scared investors.)