ABALX
American Balanced Fund Class A Sh
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Should I keep my account or roll it into Vanguard?
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The "hedge funds do worse than the S&P" stat is misleading for exactly this reason. The hedge fund shouldn't be compared to the S&P, it should be compared to an 80/20 portfolio, or a 60/40 portfolio, or whatever. That's not to defend hedge funds, but they should really be compared to [stuff with bonds in the mix](https://totalrealreturns.com/n/USSTOCKS,VASGX,BAAPX,AOA,BIGPX,PRWCX,ABALX). (In particular, go look at the "Worst Drawdown" section.)
Search for "Balanced" in the fund name. Everybody and their dog has an S&P 500 fund, everybody and their dog has a total market fund, and everybody and their dog has *some* kind of a Balanced Fund. Sometimes they're called Equity-Income funds, too. Fidelity has FBALX. Janus has JABAX. Vanguard has VBIAX. TRP has PRWCX (I think). AmFunds has ABALX and AFMBX. And so on, and so forth...
Many years ago, when I had less of a clue than I do now, I bought these mutual funds from LPL: * ABALX: Maximum front-end sales=5.75% / Net expense ratio=0.57% * AGTHX: 5.75% / 0.63% * CWGIX: 5.75% / 0.75% * NEWFX: 5.75% / 0.99% I recently transferred them to my brand new Fidelity non-retirement account. My question is, should I sell them, taking the capital gains hit, then put the money into my lower cost ETF portfolio? Or should I just hold on to them as is? Some details: * I plan to retire in 10 years. * I've maxed out my retirement accounts. * I'll have a pretty decent pension. * I have no debt. * I will likely not touch these funds for at least 10 years, probably more.
* How old are you? What country do you live in? **53. USA**. * What are your objectives with this money? (Buy a house? Retirement savings?) **Retirement.** * What is your time horizon? **10-15 years.** * What is your risk tolerance? **Moderate risk.** * What are your current holdings? **Maxed out 403b and Roth 403b. I'll also have a pension that pays 70% of my salary. So this is on top of all that.** * Any big debts (include interest rate) or expenses? **No other debt. Mortgage will be paid off in 5 years.** I invested $50,000 into mutual funds about 15 years ago when I had very little knowledge about the subject. It's now $150,000, but some newfound knowledge has me questioning whether I should switch up the funds, because they may be too expensive. They are: * ABALX: Maximum front-end sales=5.75% / Net expense ratio=0.57% * AGTHX: 5.75% / 0.63% * CWGIX: 5.75% / 0.75% * NEWFX: 5.75% / 0.99% I'm in the middle of moving the funds from LPL to my personal standard Fidelity account. Once there, would it be worth the tax hit to sell them and purchase cheaper funds such as VOO/VTI? Also, I have no records as to how much I put into the funds in the first place. I know the first chunk was $50,000. And I vaguely remember adding another $10,000 at some point. How would I go about obtaining such old records? How would I determine the taxable amount if I sold everything?
Oh yeah I should’ve clarified those are just my funds of choice im not looking for an equivalent allocation I’ll look into FBALX though! Can’t deal with the crazy fees of ABALX
It's your decision. ABALX is a balanced allocation fund. If you want to switch to another balanced fund from Fidelity - that would be FBALX - not FXAIX. If you want to change your allocation to be US large cap equities - they are lots of options like FNILX, FXAIX, VOO, etc. VTI is not a US large cap equity fund.
The exchange function just simplifies the transaction, it does not do anything special. When an exchange includes a non-Fidelity fund, there is a sale, a day of settlement, and a buy. So if you exchanged ABALX for FXAIX on Monday, ABALX would be sold at Monday's closing price. The proceeds would settle on Tuesday morning. Finally, FXAIX would be purchased at Tuesday's closing price. You could do the same thing with separate sell and buy orders. Exchange doesn't work at all with ETFs like VTI. Exchange really helps when both mutual funds are native to Fidelity. In that case, the settlement period is waived and the sale and purchase occur on the same day. Make sure you understand the tax consequences of selling 500 shares of ABALX (about $17,685 proceeds at most recent NAV).
I personally use the below funds: got into them via a financial advisor family member, but for the most part done well. I'm sure I'm over paying in some ways, but haven't changed anything yet. ANWPX - 62k AMCPX - 66k AMECX - 68k CWGIX - 21k ABALX - 72k
Most funds don’t outperform because they’re not trying to. Do you think ABALX is trying to outperform the market?
ABALX is a balanced fund that’s averaged 10% a year since 1973. Only a couple points behind SPX
rebalancing can cause a broad effect because you're dealing with huge amounts of money let's say Will Danoff at the Fidelity Contrafund FCNTX makes a major change to the portfolio. hypothetically he decides to sell half his Nvidia shares, that's over 1% of the portfolio. at $107 billion, he's selling over $1 billion of Nvidia. and he's a legend in the industry, doesn't have a lot of turnover in the fund, so everyone in the industry starts paying attention... the American Funds Balanced Fund ABALX is team-managed but with $196 billion. Vanguard Wellington VWELX is $110 billion. those are just 3 large funds. there are dozens if not hundreds of active funds in the tens of billions of dollars of assets or more. and the indexes rebalancing is an even bigger deal. everyone tracking the S&P 500 *has* to buy/sell when the underlying index changes.
rebalancing can cause a broad effect because you're dealing with huge amounts of money in the markets. let's say Will Danoff at the Fidelity Contrafund FCNTX makes a major change to the portfolio. hypothetically he decides to sell half his Nvidia shares, that's over 1% of the portfolio. at $107 billion, he's selling over $1 billion of Nvidia. and he's a legend in the industry, doesn't have a lot of turnover in the fund, so everyone in the industry starts paying attention... the American Funds Balanced Fund ABALX is team-managed but with $196 billion. Vanguard Wellington VWELX is $110 billion. those are just 3 large funds. there are dozens if not hundreds of active funds in the tens of billions of dollars of assets or more. and the indexes rebalancing is an even bigger deal. everyone tracking the S&P 500 *has* to buy/sell when the underlying index changes.
I recently inherited a low six figure beneficiary IRA. It was split roughly 50/50 with cash and muni's. The muni's are: ABALX, AMECX, ANCFX, CAIBX, ABNDX. I looked at them and I suppose they are okay performance wise but they do seem to be pretty conservative. Since I have to have this fully disbursed in 10 years I decided to divide it up into 10% increments which means those muni's and a lot of cash is going to be sitting there for quite a while. So I was thinking of selling the muni's and reinvesting their proceeds and the cash in something else less conservative while it all waits for the annual disbursements that will be reinvested. Any suggestions much appreciated