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Firms offer simplified investing plans


A portfolio is a terrible thing to waste.

Americans with goals of retirement or paying for their children's education often muck up everything with fistfuls of investments difficult to keep straight and perhaps even inappropriate.

Doing your own homework or relying on the advice of a good broker or planner can get the job done nicely.

However, some investment firms seeking to attract baby boomer dollars have lately introduced goal-oriented mutual fund products that require little decision-making. They talk up "lifepaths" or "countdowns," "counselor" programs or "lifestages," all concepts designed to simplify investing.

"These funds appeal to baby boomers starting to panic about retirement, who don't want responsibility for how much to invest in stocks and bonds," said Alicia Curry, managing editor of New York-based Fund Decoder, a newsletter that tracks new mutual funds.

"They simply look at an investor's age and time until retirement and invest accordingly, and you can expect this trend to grow."

Some examples of this new spin:

* Wells Fargo Bank of San Francisco this year introduced five Lifepath Funds, each with a date ranging from 2000 to 2040 in 10-year increments. If you need to withdraw money for a child's college education in the year 2010, you choose the Lifepath fund with that designation. The further away the goal, the more aggressive the mix of stocks, bonds and cash through 14 different indexes, though it will gradually become conservative by the end point.

"We use global asset allocation models that make strategic adjustments over time, something the majority of investors don't want to do themselves," said Dudley Nigg, executive vice president of Wells Fargo Bank, pointing out they're "no-load" (no initial sales charge) funds with a $1,000 initial purchase requirement.

* Countdown Management Corp. of Naperville recently offered the Retire 2010 and Retire 2020 funds. These two no-load funds begin with a portfolio of 80 percent equities and 20 percent bonds, but decrease equities while increasing bonds as retirement nears.

"There are 4,000 mutual funds, and investors are unrealistically expected to blend and adjust eight to 10 funds to come up with an appropriate portfolio over time, keeping fee structures in mind," said Gregory Bruno, president of Countdown Management, which requires a $2,000 minimum. "We want to attract people who control their retirement money directly, then become a 401(k) choice in major plans."

* The no-load SteinRoe Mutual Funds of Chicago has its Counselor program, a non-fee guidance service to help investors structure, monitor and adjust a portfolio of SteinRoe funds suited to their needs. A $50,000 minimum is required. Investors speak to the same non-commission representative each time they call, and recommendations are monitored.

"One woman with 70 different mutual fund holdings came to us beaten down by the chaos of her monthly statements, and we were able to make her life simpler," said Tim Armour, president of SteinRoe, which includes 15 of the company's funds in the Counselor program.

* Initially to be called the "Lifestages" funds but now labeled Putnam Asset Allocation Funds, recent offerings from Boston-based Putnam Investments provide growth, balanced and conservative portfolios designed for investors at various points in their lives.

They're sold through brokers, who advise the individual on when to switch to the next fund stage.

"The growth stage is for someone 40 years of age or less and RTC may have as much as 80 percent stocks, while the conservative portfolio with 35 percent stocks is for someone closer to retirement," said Stephen Gibson, Putnam managing director for retail marketing, whose product has a $500 minimum with 5.75 percent load or 5 percent back-end fee declining over seven years.

Once again, remember you can do it yourself without such help. And Robert Barry of Succasunna, a board member of the International Association for Financial Planning, adds another caveat: "There can be risk in an individual allocating 100 percent of any pool of money to one family of funds, for there should really be diversity among several families."

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