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Re: Leeraar's Three-Holding Portfolio

In general, simplicity is a good thing. The trade off is that a simple 3 fund portfolio or a portfolio of 2 balanced funds may not have all the products or the allocation to them that you desire or have some you don't desire . e.g. the 3 fund portfolio doesn't include TIPS, most balance funds aren't...
by Dandy
Mon Sep 22, 2014 4:48 pm
 
Forum: Investing - Theory, News & General
Topic: Leeraar's Three-Holding Portfolio
Replies: 27
Views: 1933

Re: rebalancing at age 55

I'm not in the individual stock game. You might want to compare your sectors to the S&P 500 to see where you are over or under weight the market. Trying to re balance such a large number and small % holdings seems to be a nightmare and may create a lot of taxable transactions. My advice is to gr...
by Dandy
Mon Sep 22, 2014 4:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: rebalancing at age 55
Replies: 7
Views: 686

Re: Left tail portfolio - 70% bonds. Good idea?

I am in early retirement and have about 57% fixed income moving to 60% in a few years. I decided to temper volatility on the fixed income side by allocating 1/3 to intermediate bond funds (incl TIPS), 1/3 in short term bond funds and 1/3 in "safe" e.g. CDs, other FDIC products, legacy HH a...
by Dandy
Sun Sep 21, 2014 11:06 am
 
Forum: Investing - Theory, News & General
Topic: Left tail portfolio - 70% bonds. Good idea?
Replies: 38
Views: 3156

Re: So what the benckmark SWR for a 25 year retirement?

Don't think of safe withdrawal rate - think reasonable starting point. So much can happen over 25 to 30 years you really do have to keep an eye on your health, expenses and portfolio in most cases as I believe you know.
by Dandy
Sun Sep 21, 2014 10:21 am
 
Forum: Investing - Help with Personal Investments
Topic: So what the benckmark SWR for a 25 year retirement?
Replies: 14
Views: 930

Re: $500,000 to invest long-term at age 30 - Where? How?

When the dividends are arranged to go to Prime, when do you then reinvest them Since Prime pays almost nothing I would not let much money sit there for long. Either have divs and cap gains reinvested or use Prime $ to rebalance when the money builds up. In taxable accounts it is better to use contr...
by Dandy
Sun Sep 21, 2014 9:34 am
 
Forum: Investing - Help with Personal Investments
Topic: $500,000 to invest long-term at age 30 - Where? How?
Replies: 29
Views: 4926

Re: $500,000 to invest long-term at age 30 - Where? How?

I am biased toward Vanguard. you can invest on your own, with very low costs. Assuming the $500 k is in taxable accounts I also like the Total Stock Market 50%, Total International 25%, and Intermediate Tax Free at 25%. Most studies show if you have a long time horizon to just invest the whole lump ...
by Dandy
Sun Sep 21, 2014 9:16 am
 
Forum: Investing - Help with Personal Investments
Topic: $500,000 to invest long-term at age 30 - Where? How?
Replies: 29
Views: 4926

Re: Trusting our advisor?

DFA funds have a decent reputation so that is a good sign. If you are afraid of too much international I would speak to your advisor. That risk should be discussed before investing. On the surface the allocation makes some sense given the size of the US markets vs the rest of the globe. Not many ret...
by Dandy
Sun Sep 21, 2014 8:44 am
 
Forum: Investing - Help with Personal Investments
Topic: Trusting our advisor?
Replies: 25
Views: 1828

Re: Total bond index or 5 yr CD?

Why would you not get the CD? Because there is a chance that the bond fund will have a better outcome, i.e. more money, after 5 years than the CD. But it could also have a worse outcome. That's the risk. True. I don't think there will be much difference whether a person buys all Total bond, all 5yr...
by Dandy
Sun Sep 21, 2014 8:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2706

Re: Total bond index or 5 yr CD?

I can recall a similar situation decades ago when interest rates soared. My in laws had whole life policies that guaranteed loans at 3 or 5% and CDs were paying 15%. There was no risk to the money and you could get a double digit better return. If interest rates dropped you could repay the loan. Soo...
by Dandy
Sun Sep 21, 2014 6:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2706

Re: I need "Ultra High Net Worth" investing advice please

Congrats. We don't often think of the stress and issues of having to wisely invest such a large sum. You do need to consult several financial planners and other professionals e.g. tax/estate lawyers. Your assets and needs are above my expertise I would add that you obviously need to take zero risk. ...
by Dandy
Sat Sep 20, 2014 7:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: I need "Ultra High Net Worth" investing advice please
Replies: 225
Views: 18562

Re: Total bond index or 5 yr CD?

Serious investors sometimes have a problem with CDs. Historically, they have not been a great deal - though they did have some good years when interest rates were much higher. Most investment professionals and authors who advise on asset allocation usually don't think of CDs, Ibonds, EE bonds and ev...
by Dandy
Sat Sep 20, 2014 6:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2706

Re: Help! Are we making a huge mistake?

If having enough money to enjoy life and retirement isn't the issue then go with what will make you happy. At some point additional money can get to be too much of a focus. enjoying life and relationships can be more satisfying. If working for 3 years will get you to have the wealth to enjoy the res...
by Dandy
Sat Sep 20, 2014 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Help! Are we making a huge mistake?
Replies: 39
Views: 5023

Re: When did you feel "Out of the Woods"?

Early stages you are mostly in the woods. House, children then their education keep you from getting into the clearing for the most part. It is a long hike to the clearing for most of us. It seems just when you are about to break through a bit you need to get a new roof, car or something else. Thing...
by Dandy
Sat Sep 20, 2014 8:16 am
 
Forum: Personal Finance (Not Investing)
Topic: When did you feel "Out of the Woods"?
Replies: 42
Views: 5144

Re: Revising AA, significant difference

Age in bonds is a place to start the thinking process. Many believe that you should reduce risk as you age -- even more believe you should reduce risk as you near or are in retirement. But not everyone. Those that plan to retire early have more years to make their portfolio last. That might make hav...
by Dandy
Fri Sep 19, 2014 10:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Revising AA, significant difference
Replies: 11
Views: 877

Re: A safe full of cash

I could see a few thousand in cash in case of a prolonged power failure. Hurricane Sandy put us out of power for 4 days (a minor problem compared to many). We were lucky that some restaurants in the next town had power so we could use our credit cards. Gas stations could pump gas so cash wouldn't he...
by Dandy
Fri Sep 19, 2014 9:40 am
 
Forum: Investing - Help with Personal Investments
Topic: A safe full of cash
Replies: 22
Views: 3035

Re: How often do YOU rebalance and when?

As part of your intermediate term bonds, do you invest in the Vanguard TIPS fund?

Abuss -Yes - TIPS fund is the highest dollar amount. Closely followed by Total Bond. Also, have allocations to Investment Grade Corporate and Intermediate Muni.
by Dandy
Thu Sep 18, 2014 5:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: How often do YOU rebalance and when?
Replies: 39
Views: 1965

Re: Why Invest in Bonds in your early 30s?

I'm in my mid 60's and never allocated more than 55% to equities. Lived below our means, saved in the mid double digits or more and retired in 2008 with more than enough to last through retirement. That was a pretty bad time to retire. I started off with heavy investments in my Stable Value Fund tha...
by Dandy
Thu Sep 18, 2014 4:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why Invest in Bonds in your early 30s?
Replies: 43
Views: 3536

Re: CalPERS Eliminates Hedge Fund Program

Hedge funds have been all the rage. High expense, wild west investing and loosely regulated --not suited for pension plans -- what a surprise. The classic hedge funds made big bets for outlandish expenses. Great performance - they get 20% of the gain?? plus 2%? -- a few good years and they have it m...
by Dandy
Thu Sep 18, 2014 8:06 am
 
Forum: Investing - Theory, News & General
Topic: CalPERS Eliminates Hedge Fund Program
Replies: 44
Views: 2850

Re: Proposed: 35% Maximum Bond Allocation, For Life

Maybe you can do it all with 35% fixed income. What is your goal? Maximum gains for heirs? Sleeping well? The highest percentage of not out living your portfolio? The history that equity investments outperform fixed income over long periods is not a guarantee and often seeps into decision making. A ...
by Dandy
Thu Sep 18, 2014 7:55 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3734

Re: How often do YOU rebalance and when?

I mainly focus on the equity vs fixed income allocation vs the sub allocations. That is where the main risk usually is. Being in retirement I have tighter bands/tolerance. So, in 2013 I made several moves out of equities but have made none this year. I am more likely to pass on moving into equities ...
by Dandy
Thu Sep 18, 2014 7:32 am
 
Forum: Investing - Help with Personal Investments
Topic: How often do YOU rebalance and when?
Replies: 39
Views: 1965

Re: Inflation Bonds - Staying the Course?

In retirement inflation is a substantial risk. I have a decent allocation to the VG TIPS fund and plan to continue. Inflation is very low now but do I think we somehow have the knowledge or ability to keep it low? No. So, a well diversified equity and fixed income portfolio makes sense to me. Especi...
by Dandy
Wed Sep 17, 2014 10:13 am
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3103

Re: How to best adjust asset allocation as years pass

For me the most important allocation is stock vs fixed income. That is where the risk management is most important. I don't think it is critical to drop your equity allocation exactly by 1% for each passing year. But you know the direction will be fewer equities as you age, at least until it hits an...
by Dandy
Wed Sep 17, 2014 10:07 am
 
Forum: Investing - Help with Personal Investments
Topic: How to best adjust asset allocation as years pass
Replies: 21
Views: 1771

Re: Pension Lump Sum Roth Converstion

I would caution you about the decision. The lump sum option tends to have "sparkle" that seems more attractive than "dull" low monthly payments. Do the math. Converting to Roth will reduce the "sparkle" a bit due to taxes. Just yesterday my friend told me about his sist...
by Dandy
Wed Sep 17, 2014 9:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Pension Lump Sum Roth Converstion
Replies: 3
Views: 300

Re: Ack! Bought a Dividend!

Be especially aware of making large purchases (or rebalancing) for taxable accounts in December. The distributions tend to be large. Most fund companies post the estimated div/cap gains around mid December and should give the x dividend date (when purchases can be made and won't get the dividend).
by Dandy
Wed Sep 17, 2014 9:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Ack! Bought a Dividend!
Replies: 26
Views: 2449

Re: Roth conversion

I am at the same age and looking to convert a larger amount to Roth to reduce future RMDs. Also, I will do my wife's TIRA first so that there will be only one IRA with RMD requirements. I was surprised at how much the RMD would be later in retirement. I am in the 25% tax bracket now. I may do some R...
by Dandy
Tue Sep 16, 2014 5:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth conversion
Replies: 5
Views: 301

Re: The Annuity Puzzlement

It seems that this board generally maligns annuities as a component strategy for retirement Gee - I don't remember most annuity comments I've read on this board malign annuities that are immediate annuities . Lots of maligning of most other annuities. I feel that you have laid out a nice case for w...
by Dandy
Tue Sep 16, 2014 5:09 pm
 
Forum: Investing - Theory, News & General
Topic: The Annuity Puzzlement
Replies: 95
Views: 5910

Re: Rollover of maturing CDs from bank to brokerage

Here is my philosophy re DCA. With a large lump sum to invest I would advise putting some lump and some DCA over a relatively short time period e.g. 6-9 months up to 2 years. If the market is at or close to a historic high - do less lump sum and more DCA. If the market has been down for awhile do mo...
by Dandy
Tue Sep 16, 2014 10:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Rollover of maturing CDs from bank to brokerage
Replies: 15
Views: 1069

Re: Why Invest in Bonds in your early 30s?

Now having 100% "right before retirement" likely isn't the wisest. But we are talking "early 30s". For your retiring coworkers, and for the BHs, would you not feel totally devastated if your portfolio was down 24% (i.e., holding 40% bonds)? Perhaps not as much as a 100/0 positio...
by Dandy
Tue Sep 16, 2014 10:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Invest in Bonds in your early 30s?
Replies: 43
Views: 3536

Re: Talk Me Off The Edge

It depends on why you want to keep it simple. There seems to be a bias toward simplicity especially on the fixed income side. On the equity side The Total Stock and Int'l Stock funds go a great job. Total Bond is very good but there are a number of fixed income products that it doesn't cover. So it ...
by Dandy
Tue Sep 16, 2014 8:24 am
 
Forum: Investing - Help with Personal Investments
Topic: Talk Me Off The Edge
Replies: 8
Views: 1694

Re: Why Invest in Bonds in your early 30s?

Alas, I can't cite studies that show a 20% or so allocation to bonds can/have outperformed 100% stock portfolio. I'm sure some others can. Given some long stretches where bonds outperformed stocks it is quite possible. There is nothing wrong with a 100% equity portfolio per se. It is most suitable f...
by Dandy
Tue Sep 16, 2014 8:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Invest in Bonds in your early 30s?
Replies: 43
Views: 3536

Re: The Annuity Puzzlement

Basically, people don't understand annuities and even when they do don't want to part with substantial assets. They have saved/invested for decades and have $1 million and then are asked to pony up $400k for an annuity. Quite a decision. Many believe they can do better investing. Assets that are not...
by Dandy
Mon Sep 15, 2014 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: The Annuity Puzzlement
Replies: 95
Views: 5910

Re: Why Invest in Bonds in your early 30s?

First don't buy into the SS won't be here when I retire. Lots of politics involved. Many, but not all, of the respected investment gurus feel that bonds (I prefer the term fixed income) should be at least 20 to 25% of your portfolio. Some studies show that having a 20% allocation to bonds may actual...
by Dandy
Mon Sep 15, 2014 5:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why Invest in Bonds in your early 30s?
Replies: 43
Views: 3536

Re: Am I in over my head?

Your allocation seems fine, even conservative for a 19 year old. You don't need much financial advice but financial knowledge is critical. Please read some or all of the suggested readings to keep your head on straight and above water.
by Dandy
Mon Sep 15, 2014 5:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Am I in over my head?
Replies: 51
Views: 4628

Re: Time + Savings Rate > Asset Allocation

Generally agree. Start early and save as much as you can. Compounding is a beautiful thing! Not a fan of set it and forget it for decades etc. To me that is the opposite problem of constant tinkering. Have a plan and make it part of yiour plan to every X years take stock of your situation to make su...
by Dandy
Sun Sep 14, 2014 9:08 am
 
Forum: Investing - Theory, News & General
Topic: Time + Savings Rate > Asset Allocation
Replies: 17
Views: 1662

Re: Bond Allocation

I tend to agree that TIPS allocation is too high and having two intermediate bond funds is not needed. Why not consider 1/3 TIPS, !/3 total bond and 1/3 "safe" (CDs/CD ladder, short term bond funds, Stable Value funds etc.). That gives you some inflation protection, some higher interest an...
by Dandy
Sun Sep 14, 2014 8:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation
Replies: 10
Views: 1685

Re: Should I break my CD at Ally and get a new one's ?

I don't think the difference in interest rates now are really worth the effort/expense. There probably will be higher rates in the near future (ok we have heard that for years) but I'm guessing the recovering economy and Fed likely to act that 2015 is likely to be a better rate environment for saver...
by Dandy
Sun Sep 14, 2014 8:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I break my CD at Ally and get a new one's ?
Replies: 14
Views: 1832

Re: The dangerous practice of rebalancing...

Once your portfolio approaches the amount you need to fund the rest of your retirement rebalancing "risk" becomes a bit or a lot different. Knee jerk full rebalancing is putting your secure retirement at much more risk. Sure in most cases the equity market will rebound in a relatively shor...
by Dandy
Sat Sep 13, 2014 4:57 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 188
Views: 12877

Re: The dangerous practice of rebalancing...

Basically the author overstates the issue. If you have enough to secure your retirement funding and some extra it makes sense to do that with safe or almost safe investments/savings. That is basically what WM Bernstein recommended. If you do this calculation first you can then decide how to allocate...
by Dandy
Sat Sep 13, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 188
Views: 12877

Re: Buying CDs

CDs are not quite like any other investment/savings product. They don't seem to react to a national market and are usually ignored by large investors, investment companies. There are lots of good deals and bad deals. You can find vast differences in rates for essentially the same term and guarantee....
by Dandy
Sat Sep 13, 2014 11:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Buying CDs
Replies: 30
Views: 3494

Re: Do i need to invest in bonds?

as noted the equity index does not appear to be well diversified. Also, think fixed income vs bonds. Almost everyone in every situation should have money allocated to fixed income. Age in bonds might be a good place to start or use another guideline of having 20 -25% in fixed income. I would suggest...
by Dandy
Sat Sep 13, 2014 10:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Do i need to invest in bonds?
Replies: 11
Views: 1104

Re: "A Boring Investor's Gambling Portfolio" -Allan Roth

I'm not much of a gambler but I like how Mr. Roth has set up his plan. He "wins" if his gamble loses because he gets to take some relief to offset other income/gains, he wins if the gamble pays off because he can take a charitable deduction and the charity wins. Nice framework - get the th...
by Dandy
Sat Sep 13, 2014 10:53 am
 
Forum: Investing - Help with Personal Investments
Topic: "A Boring Investor's Gambling Portfolio" -Allan Roth
Replies: 8
Views: 1562

Re: IRA to Roth conversion after retirement ?

I wish I had converted some earlier in retirement when income was a bit less. I am currently withdrawing less than 2% of my total portfolio which is about 2/3 in TIRA. It was quite surprising how the projected RMD amount grows with even modest estimates of TIRA portfolio growth. Taking SS at age 70 ...
by Dandy
Sat Sep 13, 2014 10:49 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth conversion after retirement ?
Replies: 14
Views: 1364

Re: Fidelity: Successful investors forget they have an acco

forgetting means the investors didn't panic during bad times (or re balance). Sounds reasonable since most tampering with your investments tend to be closet market timing or just basic fear/greed. Of course if someone hacked into your account and took some of your assets you would have liked to have...
by Dandy
Thu Sep 11, 2014 8:57 am
 
Forum: Investing - Theory, News & General
Topic: Fidelity: Successful investors forget they have an account
Replies: 25
Views: 3718

Re: bogleheads - can I scale it back?

If you can afford to scale back then go for it. High stress, long hours do damage to health and relationships. No way to live if you don't have to. After a period of recharging you might be ready for a bit more work -- or not.
by Dandy
Thu Sep 11, 2014 8:51 am
 
Forum: Investing - Theory, News & General
Topic: bogleheads - can I scale it back?
Replies: 34
Views: 4140

Re: Should anyone invest in short-term bonds at this point?

Short term bonds/funds have pros and cons just like other fixed income products. The shorter duration of short term bond funds offer less interest rate risk than longer duration bond funds and they are more liquid than a CD (due to the penalty). At these low interest rates they don't offer much shor...
by Dandy
Thu Sep 11, 2014 7:50 am
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3777

Re: Do I need bonds?

Think fixed income not just bonds. Yes you need some fixed income - bonds, CDs, Savings accounts, etc. They provide stability and liquidity - especially in bad times when stocks are down and real estate becomes difficult to sell. Each fixed income product has pros and cons. Some avoid taxes, some ke...
by Dandy
Wed Sep 03, 2014 6:20 am
 
Forum: Investing - Help with Personal Investments
Topic: Do I need bonds?
Replies: 43
Views: 2730

Re: Age in Stocks: Should you have a Reverse Glidepath?

Of course a lot depends on the sequence of future equity returns, your financial position at the start of retirement, your retirement drawdown needs, your medical expense/insurance coverage etc. Over the long run equities should return more than a balanced portfolio. That fact tends to creep into &q...
by Dandy
Mon Sep 01, 2014 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: Age in Stocks: Should you have a Reverse Glidepath?
Replies: 21
Views: 1351

Re: struggling to understand "bond crash"

crash is a relative term much more applicable to equities than most bonds. When interest rates rise people want the higher yielding Treasuries not the ones your fund holds. So the market value of the lower yielding Treasuries drops a bit. Fund have to reflect the lower value in their Net Asset Value...
by Dandy
Mon Sep 01, 2014 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: struggling to understand "bond crash"
Replies: 13
Views: 2035

Re: Poor Janus, a look at this once high flying fund family

In my dumb old days I had a bit on money in Janus Venture (small cap). Luckily I got out way before they had management fall out and other problems and saw the index fund light. :happy
by Dandy
Mon Sep 01, 2014 7:53 am
 
Forum: Investing - Theory, News & General
Topic: Poor Janus, a look at this once high flying fund family
Replies: 72
Views: 7297

Re: Thoughts on California Municipal Bond Funds

I would not put all my muni eggs in my state muni basket. Most times states muddle through but California has its challenges, drought being the latest and a .25 extra yield doesn't seem worth it to me. Having some in same state fund is ok but I'd be wary of 100% if the assets involved are large.
by Dandy
Mon Sep 01, 2014 7:49 am
 
Forum: Investing - Theory, News & General
Topic: Thoughts on California Municipal Bond Funds
Replies: 32
Views: 2554
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