[Edy]

Hello all. It seems the only quality choice available to me now is CalSTRS Pension2 for my 403b contribution.

Do others agree that this is a good choice? Of course I am looking for the lowest fees with no loads, etc. with which I do not need to pay an advisor.

Thanks for any input on this option.

I am a public school teacher in CA in San Bernardino County.

Edy

[sschullo]

Hi Edy,
Yes, its an excellant choice. check for yourself
Let us know what you think.
Good luck,
Steve

[apteacher]

Edy,

My wife recently started an account with Pension 2. So far, so good. It is by far the best offering for her Orange County district. I would like to see an intermediate-term bond fund added to the lineup of funds, though. Right, Scotty? :)

[Scottyd]

Edy,

My wife recently started an account with Pension 2. So far, so good. It is by far the best offering for her Orange County district. I would like to see an intermediate-term bond fund added to the lineup of funds, though. Right, Scotty? :)

AP,

I wouldn't expect an Int-Term bond fund anytime soon, the Traditional account in some ways fills that void. I see risk in the Int-Term bonds as people are searching for yield without a proper understanding of interest rate risk. If we do in fact have inflation (from the printing of so much money) we will eventually see a rise in interest rates, this will really hurt Int-Term bonds.

The SDBA has some Int-Term options available without charges if people are really wanting that. I don't see a good risk-reward ratio long term with them.

That doesn't mean that a Total Bond Market Index wouldn't be added at some point - which is basically intermediate term, but not right now. They are trying to keep things simple.

The TIPS fund is Intermediate and in my opinion offers some value today.

ScottyD

[sschullo]

Edy,

My wife recently started an account with Pension 2. So far, so good. It is by far the best offering for her Orange County district. I would like to see an intermediate-term bond fund added to the lineup of funds, though. Right, Scotty? :)

AP,

I wouldn't expect an Int-Term bond fund anytime soon, the Traditional account in some ways fills that void. I see risk in the Int-Term bonds as people are searching for yield without a proper understanding of interest rate risk. If we do in fact have inflation (from the printing of so much money) we will eventually see a rise in interest rates, this will really hurt Int-Term bonds.

The SDBA has some Int-Term options available without charges if people are really wanting that. I don't see a good risk-reward ratio long term with them.

That doesn't mean that a Total Bond Market Index wouldn't be added at some point - which is basically intermediate term, but not right now. They are trying to keep things simple.

The TIPS fund is Intermediate and in my opinion offers some value today.

ScottyD

Scotty,
I used some of my cash to purchase VG intermediate bonds knowing full well that when interest rates go up the NAV will plummet. For traders, a falling bond's NAV will lose money. I am not a trader. What difference does it make to a retiree who is to living off the dividend monthly payouts? Its awash, sure the value goes down but the payout goes up. Obviously, it’s a little more complicated as I am investing in a bond mutual fund rather than individual bonds and for other reasons.

But for my purposes, if you are saying to purchase only short term treasuries because interest rate risk doesn't effect these bonds as much. But the month dividend is crap and some say are in a bubble now. I don't see very many options except the total bond market which I also own as well as GNMA, TIPS, but no short term.

TIAA Annuity is an option but its paying 3%, and this rate will not change for another year (I called them) the advantage is that your principle is guarenteed.
Bond investing is a tough balancing act.

Thanks,
Steve

[Edy]

Edy,

My wife recently started an account with Pension 2. So far, so good. It is by far the best offering for her Orange County district. I would like to see an intermediate-term bond fund added to the lineup of funds, though. Right, Scotty? :)

AP,

I wouldn't expect an Int-Term bond fund anytime soon, the Traditional account in some ways fills that void. I see risk in the Int-Term bonds as people are searching for yield without a proper understanding of interest rate risk. If we do in fact have inflation (from the printing of so much money) we will eventually see a rise in interest rates, this will really hurt Int-Term bonds.

The SDBA has some Int-Term options available without charges if people are really wanting that. I don't see a good risk-reward ratio long term with them.

That doesn't mean that a Total Bond Market Index wouldn't be added at some point - which is basically intermediate term, but not right now. They are trying to keep things simple.

The TIPS fund is Intermediate and in my opinion offers some value today.

ScottyD

Scotty,
I used some of my cash to purchase VG intermediate bonds knowing full well that when interest rates go up the NAV will plummet. For traders, a falling bond's NAV will lose money. I am not a trader. What difference does it make to a retiree who is to living off the dividend monthly payouts? Its awash, sure the value goes down but the payout goes up. Obviously, it’s a little more complicated as I am investing in a bond mutual fund rather than individual bonds and for other reasons.

But for my purposes, if you are saying to purchase only short term treasuries because interest rate risk doesn't effect these bonds as much. But the month dividend is crap and some say are in a bubble now. I don't see very many options except the total bond market which I also own as well as GNMA, TIPS, but no short term.

TIAA Annuity is an option but its paying 3%, and this rate will not change for another year (I called them) the advantage is that your principle is guarenteed.
Bond investing is a tough balancing act.

Thanks,
Steve

Thank you for the input. From what I have seen, this is the only good option available to us. I suggested to the Pension2 folks that they add the Vanguard REIT Index and a small value fund such as TRP Small Value.

I told them, in my opinion, those funds would round out the diversification much better.

Edy