AMECX vs. CAIBX vs. combo of the two

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KCallie 04-16-2008, 10:42 AM | Post #2508838 | 20 Replies

I am deciding whether to place $25k that is coming due from a CD soon in either AMECX, CAIBX or a combo of the two. I currently have $25k in each of AMECX and CAIBX.

The shares would be held in my IRA. I am in retirement currently (68) and will use the dividends as income and reinvest any capital gains distributions. I am in fairly good health (expect to live to 80 but probably won't make it to 90).

If I invested the entire $25k in AMECX at current price (17.96) that would give me 1392 shares. Their last dividend was 19.5c per share for a dividend of $271. If I invested the entire $25k in CAIBX at current price (58.1) that would give me 430 shares. Their last dividend was 52c per share for a dividend of $224.

I have other investments in American Funds and will pay a 1.5% load if I invest in these funds. I am not concerned about the load so much as current and future income stream and long term capital preservation in light of inflation.

I would like to hear other's thoughts on these two funds compared to each other given that I already have $25k in each fund. I have other investments but don't want to get into those right now because I have made the decision to go with either all $25k in one of the funds or a combo of the two. Thanks for any input!

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Re: AMECX vs. CAIBX vs. combo of the two justin 04-16-2008, 12:50 PM | Post #2508876

Here is a comparison table of CAIBX & AMECX for the historical distribution of dividends and capital gains for the last 20 years. Assuming one received and spent all dividends but reinvested all capital gains. They both look very similar but, if you notice, CAIBX tries harder to grow dividends each year.

Initial Investment = $10,000 each

	CAIBX	CAIBX CGs	AMECX	AMECX CG
	Dividends $$	Reinves($$)	Dividends $$	Reinves($$)
1988	546.48	0.00	746.28	0.00
1989	586.18	0.00	820.90	345.15
1990	630.54	0.00	844.84	67.20
1991	667.91	0.00	821.02	77.27
1992	705.28	0.00	816.36	213.81
1993	742.64	56.05	819.63	345.63
1994	782.73	46.87	839.50	60.69
1995	822.86	235.10	843.32	182.89
1996	872.22	347.94	924.88	832.38
1997	917.15	781.27	903.95	1595.29
1998	979.10	1410.90	1028.85	1391.30
1999	1038.63	820.25	1087.63	1012.62
2000	1108.94	518.61	1052.48	631.49
2001	1175.46	660.18	1085.60	211.69
2002	1181.64	300.04	1062.21	28.78
2003	1152.58	101.47	960.84	0.00
2004	1068.55	529.86	899.05	182.56
2005	1269.83	413.29	981.55	500.44
2006	1353.13	709.94	1254.84	654.20
2007	1583.28	1484.32	1312.46	1223.05
2008	334.13		293.51

Total Div
Spent ($)	$19,519.26		$19,399.70

CG Reinvested		$8,416.09		$9,556.44


Current Value As of 4-15-2008

CAIBX	$37,859.64
AMECX	$27,033.25

In summary, I would choose CAIBX.

Justin

Related Topics CAIBX

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Reply: AMECX vs. CAIBX Lucas_McCain08 04-16-2008, 5:40 PM | Post #2508936

Another Justin chart! :-)

Thanks, Justin. I have AMECX (Income Fund of America) available in my 401K. It's the one and only balanced fund in the plan. I also have CWGIX? (Capital World Growth & Income Fund)

It's either that, or a bunch of index funds! I pulled out of the index funds, and I now invest in a combo of the American funds, and the Pimco Total Return fund.

Lucas

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Re: AMECX vs. CAIBX vs. combo of the two KCallie 04-16-2008, 6:06 PM | Post #2508941

Thanks, Justin. How did you generate that data? Is there a tool on Morningstar.com to do that?

My concern about using past performance to make this decision is that I think we are in a very unique situation right now with the financial institutions and because I think the recession will spread globally soon if not already. I am trying to decide if the current market presents a better buying opportunity for one over the other based on the unique situation at hand. If not, I may just split the $25k between the two.

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Re: AMECX vs. CAIBX vs. combo of the two justin 04-16-2008, 6:57 PM | Post #2508951

Hi Lucas,

You have CWGIX in your 401(k)? VWELX, VWINX, DODBX & CWGIX. What a nice portfolio!!!!!!!!!!!!!!

KCallie,

You are absolutely right. I shouldn't drive looking through the rear view mirror. :-)

As I hand calculated these numbers from each fund (data from American Funds website), I tried to "live through" with each one of these funds and I merely meant to say that I would have been more comfortable living through with CAIBX than AMECX. I was not trying to predict which fund would do better in the future. I think you have to decide which one or a combo of both.

Justin

Related Topics CAIBX American Funds CWGIX

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Re: AMECX vs. CAIBX vs. combo of the two KCallie 04-16-2008, 7:02 PM | Post #2508953

justin:

As I hand calculated these numbers from each fund (data from American Funds website),

Thank you so much for going to the trouble of hand calculating that information! It is very helpful!