Author Topic: Investing Across Accounts and Bond Allocation  (Read 1078 times)

FRT15

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Investing Across Accounts and Bond Allocation
« on: July 13, 2016, 10:59:44 AM »
Hi Everyone, I am wanting to put together a simple 60/40 portfolio that spans my 401k, Roth IRA, and Taxable account.   Basically I would like total stock, total intl stock, and bond components. In my 401k I can can use a bond fund that is supposed to follow the AGG index with an expense ratio of .24%.  I also have access to PCRA at Schwab and could use bond funds/etf’s there.  If I am planning to invest the equity pieces in the roth ira and taxable account does it make sense to use the bond fund in the 401k or use the PCRA to buy a different bond fund/etf?   Would it make any sense to buy a riskier bond fund like PONDX through the PCRA and use it as my only bond fund?   The overall portfolio across all accounts is about 300k.  Thanks for the insights.

weather55

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Re: Investing Across Accounts and Bond Allocation
« Reply #1 on: July 14, 2016, 08:28:56 AM »
I have also wondered about using pimix/pondx for my fixed income allocation makes sense over a basic find like total bond market. I know there are additional risks but over the long term does this make sense in a tax deferred account?

MustacheAndaHalf

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Re: Investing Across Accounts and Bond Allocation
« Reply #2 on: July 14, 2016, 12:04:18 PM »
Bonds income would be taxed at ordinary income rates in taxable, so you first want to avoid that.

Over decades, stocks have tended to outgrow bonds.  So putting more stocks in the Roth IRA places more expected stock growth in the "never taxed again" account.

AdrianC

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Re: Investing Across Accounts and Bond Allocation
« Reply #3 on: July 14, 2016, 01:40:14 PM »
Would it make any sense to buy a riskier bond fund like PONDX through the PCRA and use it as my only bond fund?

Bonds are for safety. A "riskier bond fund" doesn't sound safe. An actively managed bond fund even more so.