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Yeah I read that. Now Wells is really going Go Far with their naughtiness.I think that you folks must all be way out of line, because Trump's Mick Mulvaney, current head of the Consumer Financial Protection Bureau, just announced that there's no need to maintain a public record of complaints regarding bankers. Maybe Maurice can weigh in on this one.
This is very helpful and much appreciated. Bonds are new to me, and really want something I don't want to worry too much about. PONAX seems diverse, and has a positive track record for a good 10 years, and as the other poster mentioned, has not gotten as bad a hit as of late compared to other bond funds.I know a few people who are paying 1% - some are getting a good amount of help with their financial situations (i.e. are getting reasonable value for their money), some are getting investment help and some long term planning (IMHO not in itself worth the 1%, but these people also seem to derive value from the personal handholding).
If, as it sounds here, all you're looking for is investment selection and management, I agree with Lewis that something like Vanguard Personal Advisors (a hybrid robo/human offering) or a pure robo advisor would fit the bill.
Regarding PONAX and other bond funds: PONAX is NTF (no fee, no load) at many brokerages now. If you're investing at least $25K, it's worth paying a transaction fee to buy the cheaper PINIX shares, especially if you're looking to buy-and-hold. Vanguard has a $25K min, most other places require at least $100K.
Most people here seem to be enthusiastic about the fund. I'll be the wet blanket. The manager is excellent and I doubt over any long period of time the fund would be a poor choice. But it's focused on asset backed securities(ABS) - a few years ago on mortgages (a form of ABS), more recently on non-mortgage ABS. These have their own risks and rewards; the fact that they have done well does not mean they will continue to do so. See these columns:
http://www.morningstar.com/articles/834221/is-pimco-income-the-new-total-return.html (how PONAX did well with mortgages, but that market's risk/reward has worsened), and
https://www.housingwire.com/articles/39045-morningstar-heres-the-impact-of-rising-interest-rates-on-mortgage-backed-securities (unique risks in mortgage backed securities that may manifest with rising interest rates)
Non-mortgage ABS are yet again different from vanilla bonds. (See investment characteristics in this page.) So again, the behavior may not be what one expects.
Thus I agree again (at least partially) with Lewis that you might benefit from adding a more vanilla bond fund, something like a short to intermediate term corporate. (IMHO index funds are too heavily weighted toward lower yielding, though higher quality, Treasuries.)
Thanks @crash! You guys are awesome!@Starchild: what LewisBraham said! No need to pay 1%. That advisor will not like it if you pull out, but you are correct: that 1% adds up! Steel yourself toward his reaction, and get out from under that 1% arrangement. Do your own homework. You can do this yourself, as long as you don't do anything radical and "screw the pooch."
https://www.urbandictionary.com/define.php?term=screw the pooch
You've told us that you can let this money work for you for a long time. So a long-term view of things will be appropriate. Don't let day-to-day ups and downs concern you. Most of your stuff ought to be in well-performing stock funds, and if you want to do it, a smaller portion in bonds. Be aware that bonds are facing headwinds, but it's not the end of the world. All this stuff is cyclical. If you want to "set it and forget it," buy into a "balanced" fund which holds both stocks AND bonds. But they all hold a different AMOUNT of each. No two are the same. I'm most familiar with T Rowe Price, so I'd have you look at RPBAX. But there are dozens and dozens of others, too. RPBAX includes some offshore holdings, too. That's another piece worth thinking about. But don't go "whole hog" into foreign stuff.... I found that it's very helpful simply to get familiar with a lot of the professional financial jargon. ("What do you MEAN, 5 basis points???" Why don't you just say, 5 percent?!) A link: Investopedia. https://www.investopedia.com/
A basic book for you:
https://en.wikipedia.org/wiki/The_Intelligent_Investor
Graham taught Warren Buffett and Charlie Munger, by the way.
Thanks Lewis! Unfortunately, those classes are unavailable at either bank (SAMBX as well), although PIMIX is used under the managed account. I could ask the manager if it can be changed, but then he would haunt be to make it a managed account, which he's been doing. In fact, that's another topic I'm curious about, and might search here, using the financial advisor. He's managing the smaller account, but charges 1%. That can add up.@Starchild PONAX has been a strong performer, but it normally carries a 3.75% load/commission to make purchases and has a higher expense ratio 0.90% than other share classes of the same mutual fund. So at the least I would recommend buying a different share class if you can get it--PIMIX if the transaction cost is low. At TD Ameritrade you can also buy PIINX--the administrative share class--without paying a transaction fee and with a $0 minimum investment-- and a lower expense ratio of 0.75% as opposed to 0.90% for PONAX. PIMIX has the lowest expense ratio of 0.50% of the three but the transaction fee as it usually isn't on NTF platforms can be high, so if you buy that it is better to buy one big chunk all at once and not to be buying small amounts over time so you only pay one transaction fee.
Regarding diversification, PONAX/PIMIX/PIINX is pretty well diversified so I'm not sure you need much else if you like this fund. But some diversification that might be worthwhile are a small amount in a floating rate fund such as SAMBX or a small amount of an international bond fund with some emerging market exposure. Bear in mind that interest rates are rising so some argue that bonds in general are unattractive right now as bonds tend to move inversely with rates. That's why a higher quality floating rate fund might be worthwhile as its yields rise with rates. That said, there is increased credit risk with such funds that could be punishing if we enter a recession. Another alternative that could be safer than PONAX or floating rate funds is a short-term corporate bond fund as short-term funds are less sensitive to rising rates than long. Hope this helps.
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