AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Question Mr. Boroson,
I'm 76 and retired. I currently have 60% of my retirement funds invested with Vanguard in the following allocation. Wellesley Income fund 18%
GNMA fund 45%, Star fund 31% and Growth and Income fund 6%. My other 40% retirement funds are in C/D's which until the year 2005 are returning 7.5%. The vanguard funds and the C/D's are IRA dollars. This year for the four Vanguard funds the interest received was 3.6%. My question is as my sole source of income is as detailed above plus social security, is there a suggestion you could make that would enable me to derive more income.
Thank you,
Dave
Answer Dear Dave--
Your portfolio seems to be 40-45% in stocks, which is reasonable--STAR gives you your biggest exposure to the stock market--
But you have too much in mortgages--and not enough in junk bonds or foreign bonds--even STAR has mortgages in it--
Yes, junk bonds are risky, but Vanguard's High-Yield Fund is among the safer ones--and recently it was paying 7.5%--it just reopened--but don't put much money in it--maybe 5% of your portfolio--
Other funds you might consider, for more diversification: Harbor Bond and T. Rowe Price Spectrum Income. The second has up to 20% in high-paying stocks.
