Bogleheads.org

I would guess that if on line banks like Ally decided to prevent customers from redeeming early (and paying the interest penalty) on a CD that they would likely go out of business. Not saying it couldn't happen - a run on CD withdrawals might make this occur. Ally has pitched itself as different fro...

There are a lot of smart/wise people that on on both sides of the issue. Some jump right in according to their target allocation others decide to temper risk a bit even if 75% of the time they may be giving up a bit of performance. Comfort with your investment approach is important- as long as you a...

When the you know what hits the fan - Treasuries will rise in value as many investors flee to safety. That has been a major factor why Treasury funds have such a low yield - people are buying them for safety. They also avoid state taxes on income - a minor reason people hold them. Bank CDs will hold...

Emergency funds are always a problem. large amounts of money we probably won't need or won't need all of and keeping it safe and liquid mandates low returns. Early in the accumulation stage it also is a large portion of your investable assets. A typical bad case scenario is loss of the sole bread wi...

Studies show that lump summing it usually results in a better long term return. But that doesn't mean it sits well mentally. If you are concerned then a combinaton of a chunk lump summed and the rest DCA over 6 - 9 months is a good middle ground.

I realize that the fixed income market is a mess. Vanguard is a responsible mutual fund company to close their High Yield Fund. I assume that they are concerned that they could not wisely invest the incoming money in the High Yield market. As people try to find some decent yield many have put money ...

Investing future house money is a gamble. How much are you willing to lose? Most would recommend not investing but saving the money in CDs etc. Personally I would not but any money at risk that I was saving for a house. If I did I might go for 80% in a 5yr Ally bank CD (only 60 days interest penalty...

you are wise to consider reducing your equity exposure as you get closer to retirement age and your portfolio gets large. The tough part is where to put you fixed oncome dollars - such low yields and rising risks. You are lucky if you have access to a stable value fund. You can rebalance by changing...

In general I would avoid "wealth management" sales ideas. bond yields are so low and firms usually want a decent commission that I find it hard to believe that their help will be mutually profitable. Also with every retiree looking for yield lots of people are staying up late trying to fig...

In general Stay the Course makes sense. So does age in bonds and other words of wisdom. But Jack himself seems to make changes that stray from staying the course - the most recent being talking about more corporate bond exposure in general and in the Total Bond fund. Didn't he also talk about tactic...

Wm Bernsteins' 4 Pillars of Investing. Was in the mutal fund industry on a business trip. Picked up his book at the library for reading on the flight. Wow - not only outlined an approach but the rationale -- hit home. Read it again 6 months later. Also the Boglehead's guide to investing. But the lit...

If you have a decent understanding of investing you probably don't need to talk to an advisor. If you are unsure and aren't an impluse buyer then talking to a Fidelity Advisor might be ok. If you know generally the allocation you want he/she might be able to help you choose the correct Fidelity inde...

Ugh! The rates are so low and penalties so high. Can you really feel good about not having to redeem early? 15 months penalty is quite excessive in my view. I look at rate, penalty and how to split (e.g. don't buy one CD for the whole amount but split it into pieces that prevent you from having to p...

8 x salary seems a reasonable target but more like a minimum. Keeping expenses in line and focusing on increasing savings should be the short term focus. If you are thinking about a less aggressive portfolio then it probably means the current one is a bit more than your real risk tolerance.

Trying to find a "safe" withdrawal scheme that will be a set it and forget it approach seem to me to be a fool's errand. The best advice I have heard is it may be an ok starting point but you need to review your withdrawal and your portfolio frequently and adjust your approach when/if extr...

I think your fund choices are very good. I would consider 80% allocation to equities very aggressive not moderately aggressive. I would increase your bond allocation by 10% or so by adding short term investment grade or short term index. I would basically ignore the buzz/ratings of the funds you cit...

I used to manage mutual fund customer service and also invested in Fidelity. They always were a leader in service. It is very tough to educate, motivate and retain top notch customer service people. A lot depends on how management views the importance of service and what they use to measure service....

Assuming "cash" includes CDs, I bonds, EE bonds, Stable value funds, Bank Money market deposit or savings accounts - then a decent allocation of your fixed income to these vehicles makes sense to me. I would avoid money market mutual funds like VG's Prime with it's almost no yield. Cash or...

I have reduced the duration of my bond fund allocation and slightly shifted to investment grade (corporate) vs just the Total Bond or Short Term Bond. Also maintained non bond investments e.g. CDS, FDIC Savings etc. Have about 1/3 intermediate bond, 1/3 short term bond and 1/3 "no loss" e....

While your allocation to equities is too aggressive for my taste I like your fixed income allocation. Since you are just starting out at a tender age, you may wish to make sure you have decent liquidity ouside of your investmets-- there are a lot of expenses and bumps ahead in your non investment li...

My main point is to look at the full array of fixed income choices. I know Vanguard offers CDs etc as do other large mutual fund/brokerage firms. It is smart to keep assets, even if they are not very profitable, inside the firm rather than try to recapture them later. CD interest usually goes to a m...

We really should stop talking about bonds and use the term fixed income. Vanguard is a great company that mostly sells mutual funds and ETFs. They offer CDs (usually with not very competitive yields). The fixed income landscape has changed dramatically due to historically low interest rates yet the ...

Surely the current interest rate on fixed income vs Total Stock market yield would make you think of bonds in taxable. But, for the long term investor - do we expect this unusual difference to last? Or is this a short term strategy to buy bonds/bond funds in taxable, get higher yields (but maybe not...

didn't change my lifestyle much, do somethings myself now e.g. lawn and saved on commuting expenses. Dine out a bit more, health care expenses may be more since I reached 65 and my company's revised plan and medicare probalby doesn't cover as much and no dental.

By holding expense and portfolio growth at 2% you are essentially dividing the 2 million by 120,000. Others can suggest better tools to project. My opinion projecting for 30 years out is not worthwhile. Studies have indicated that an initial 4% withdrawal dollars, in your case $80,000, the dollar am...

This is not a bad allocation especially if you are in the accumulation stage. If you are late in the accumulation stage or early in the retirement stage then maybe you want to have a decent fixed income allocation to "safer" investments such as short term bonds/funds, CDs etc. This assumes...

One lesson learned was that a black swan was more risk than I expected. The fact that it occured during the year I retired just made it a bigger impact. I was prepared, during the accumulation stage, for the "normal" 20% or so "correction" and had not batted an eye for prior plun...

I like the idea of high level expense tracking each month. I've done it since I retired in 2008. I also footnote large expenses, keep an average ytd monthly expense to compare with prior years. I don't spend much energy trying to project the future income or asset growth.

From what I see you either love a travel job or hate it and often those who love it grow to hate it. Some business travel is nice to break the routine. When you talk 50%, and east coast to west coast travel (taking the red eye back from LA can wear on you) that is a whole different ballgame. If you ...

I understand your shock. You are in a very good financial position but are a moderate to conservative investor. The advisor sees your financial position and your modest withdrawal needs and feels you can afford to be very aggressive -- and you probably can. But it comes back to just because you may ...

The easy answer is you don't need an advisor. Before you jump ship you might want to make sure you understand your risk tolerance. When the market plunges will you have the exerience/fortitutde to rebalance? Do you understand the investment basics e.g. when interest rates rise bonds lose value - but...

To me the best way is to do something - even if it is small. e.g. if you know you are going to allocate money to the Total Stock Market but don't know how much. Put $5,000 or $10,000 in. (I'm assuming when you figure out your allocation you will want to have much more than that.) The point is you do...

I have a plan. e.g. allocation now and what I want at age 70 (5 yrs). I have a spreadsheet that I update a few times a year which shows the target allocation for each type of investment and I compare it to my actual. I am keen on diversification, low cost and don't take excessive risk. I don't have ...

You might find that your actual retirement expenses are less than you think. I am in a somewhat similar situation i.e. waiting to take SS at age 70 and funding the time between 65 and 70 with drawdowns from my retirement portfolio and expect to have to withdraw little or nothing at age 70 (but will ...

A lot depends on their other financial situation. But in general I would suggest the lower amount that provides the beneficiary with lifetime income not just 10 years. I agree that the lure of the lump sum is not the way to go.

I'm pretty frugal but having a nice family vacation each year was a must. It really served the higher purpose of a vacation i.e. to enjoy things as a family. My children are adults now and they have fond memories of our vacations. While children of all ages enjoy vacations if you want them to really...

28% is great. Stop worring and keep it up. I started early in my career with 6% (incl match) and raised the % often as my salary increased. I ended up with maybe high teens low 20's. The equal challenge is to control expenses being frugal not cheap. You do need to have a nice life while saving for r...

Seem like a decent EF. It would be unusual for both to lose jobs and the same time in most cases. You can't have the EF cover the most dramatic situations and/or ones that last for several years.

You will get a lot of debate on this but I think your allocation is a much better one for your age. Agreed that over time equities have a better return and at a young age you can usually take high risk. There are also some respected experts that feel you should always have at least 25% in fixed inco...

Not a bad idea since you haven't increased your risk or made a major shift in your equity allocation. I'm all for looking at all fixed income alternatives and not limiting the choices to bonds funds because they will likely return their value over the course of their duration or a too strict interpr...

In general, when younger, putting too much emphasis on price and not enough on quality. How often was the purchase price great but the buy was a mistake. So I saved a few dollars on a suit but it didn't last. Almost bought our first house because the price was reasonalble but a more experienced fath...

It depends on what you use your fixed income allocation for. Some expect it to provide growth, some just high income and some just to add stability to the overall portfolio so more risk can be taken on the equity portion of the allocation. I have always wanted to have a decent portion of my investme...

As you are relatively new to investing I would say go with a Target Date Fund. I would suggest that the far dated Target Date funds are much more aggressive for a new investor that hasn't had their risk tolerence tested. I would suggest more like a 60% equity allocation to start and then as you gain...

My guess is if your residual expenses were $100k per year Mr. Berstein would probably suggest filling some of that need with an immediate annuity. That would lower the presssure and risk of your portfolio having to cover a large residual expense.

I like your portfolio. I also like someone who has sufficient assets not to take a lot of risk. Your cash allocation is fine with me except that it is in Vanguard Prime. While I don't like taking more risk than needed I really hate leaving money on the table. Either bite the bullet on taxes and go f...

I own a small amount of Wellesley and like it's performance history. My concern about holding it or adding more is it is an active mangaged fund and as noted has a limited number of equities - how can they keep it up? vs my normal Boglehead low cost index funds owning the whole market. Eventually, I...

Historically, I believe jumping in all at once works out better in most cases. I understand the fear of doing it all at once. If that is the case I would suggest doing a moderate lump investment now and dollar cost averaging in over 6-9 months. It is good to get started and depending on your investm...

Mr Bernstein should be the one to explain the math and rationale not me. I would welcome more information on this too. Here is what I have taken from it right or wrong. 1. A mixture of short term bonds and other safe investments such as CDs etc will likely offset much if not all of modest inflation ...

I would pay off the taxes and mortgage and with the extra monthly income invest according to your target allocation. The result is no debt? and extra monthly income. This assumes you have other liquid assets set aside for emergencies.

In theory yes. Small plans are easy to sell hard to administer. Small companies have little leverage and the investment company handling the employee contributions often finds these plans very expensive to administer. I've been close to the process from the investment company. Small companies often ...