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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (15229)	8/16/2002 5:35:49 PM
From: Dave	Respond to of 78615

In "The Intelligent Investor", Graham proposed that ever investor should have a combination of equities and debt in their portfolio. The ratio of Debt to Equities should be in the range of 25% Debt/75 % Equities up to 75% Debt/25% Equities. Now, regarding fund picking, what I would do is go to your local library and find the Morningstar mutual fund report. Make sure that if the fund has done well, that the fund hasn't changed managers, etc. I wouldn't get too worried about index funds holding Enron or Worldcom.

To: Jurgis Bekepuris who wrote (15229)	8/16/2002 6:27:15 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78615

Jurgis Bekepuris, re: 401. Both funds are rated highly by Morningstar. One has a "small-blend" focus, and the other is Dreman's large cap. which is also more concentrated. I assume you're limited to these two "value stocks" by your administrator. I'm familiar with Dreman's work; I know Neuberger is supposed to have a good reputation, but I know nothing of this particular fund or its manager. Making the choice really requires having some knowledge of your goals, how long you plan to be in the 401K, your risk tolerance etc. Without having this, I rely on my own preferences. Since I like diversification and sticking with funds for long periods, I would put money in both funds above as well as the index fund. But if I could only select one of the three, for myself, I'd pick Dreman. I'm not a fan of indexes. I'd like to risk more to make more. And I like to spend the time to study and reflect on stocks and investing. I suspect I should've been an indexer though, based on the results I've gotten for myself over the past decades. Looking back, I would like to believe that had I a 401k plan that allowed me to buy this index fund, I would be at least making some allocation to it. For you I'll guess maybe the S&P Index fund would work. Here you have a set-and-forget fund (Who succeeds Dreman when he leaves?) that you might be able to stick with (low transaction costs, some peace of mind, etc.) for 10 or 15 or more years. You have money outside of the 401 that you invest in other ways, so you can use the S&P Index as a bogey to see how well you're doing with your picks. If you're not a fan of Dreman or Neuberger's D'Alelio or their picks, then I'd say don't invest in their funds. Or else if you find some stocks they own that you'd like, you can buy those outside the fund (i.e. outside the IRA.) jmo, and as you know, not only am I not qualified to give advice, I'm wrong many, many times Paul.