Bogleheads.org

Jack, Thank you for all you've done to educate small investors and all the money you've saved us and will continue to save us because of the Vanguard structure. I appreciate that what you have saved my family came out of the pocket of investment managers and that you could have made much more money ...

Everyday or Never, I'm not sure how you'd want to define it so take your pick. I use LifeCycle 2030, it rebalances with new contributions to maintain a static asset allocation that once a quarter is rolled to a less agressive allocation.

Livesoft described the reason for what I'm doing perfectly. We've got what I call 8 separate accounts between TSP, IRAs, and a joint taxable account. Each of the 7 tax-free/tax-deferred accounts has a balanced fund in it. 6 contain only one balanced fund. 3xTSP in LifeCycle 2030, 1xTraditional IRA i...

The recommendations above are the only options that Vanguard has with that AA. With the amount of money you have available, a one fund solution is what you need for now. If you want Vanguard to manage the allocation and decrease it as you age, go with the Target Retirement Funds. If you want a stati...

I don't see the big advantage over a LifeStrategy or Target Retirement account.

I think I'll just stay here, read Rick and Larry and let Taylor remind me that a simple portfolio construction is easier to manage and allows time for other stuff.

Good Luck.

Harry

Larry,

Thanks. Informative as always.

Harry

Both.

They started out the same size but I've moved some money out of US REITs and have been reluctant to rebalance some of the International REIT to a balanced fund because of the fee. So international is 55-60%.

Rick,

I appreciate the analysis. Your posts are always helpful.

Harry

Taylor,

Thank you. Interesting as always.

Harry

To be fair, Warren Buffett was one of the outstanding money managers before he bought Berkshire and before he had enough money to take major stakes in companies and before he had access to all the float from his insurance companies. He was identified by Adam Smith as one the leading money manager of...

A Peanut Butter and Honey sandwich makes a good lunch.

For what it is worth there are people like Jack Bogle, who don't think there is a need for international diversification and investment advisors like Tweedy Browne that believe the best course for international stock diversification is to have the currency risk hedged. If we can't come to an agreeme...

Generally states that don't tax pension income (there are a number in the South), still tax withdrawals from defined contribution plans and treat the TSP like a 401(k). For instance in Alabama, all state and federal pension income to include SS is tax exempt but withdrawals from the TSP would not be...

hoppy08520,

Thanks, I stand corrected. I still find it quirky that

That will be helpful. I think I will leave the traditional balances in the TSP for the lower expenses but want to get the Roth funds over to Vanguard so I can postpone withdrawal.

Harry

There are some quirks with the new Roth option. :annoyed But overall, I'm happy with the TSP. 1. You have one TSP account with both Roth and Traditional contributions. Contributions and allocations are the same for both components. You've also got to do a little math on page 2 of the website to sepe...

Larry,

Very well put and a timely reminder.

Thanks

Harry

I'll let people that are smarter than me address whether you're wrong or not. You are right that there is a currency risk. The reason that most international bond funds are hedged is to allow investors to focus their risky assets on the equity side and limit the risk on the bond side. That currency ...

Eric, Most people who tilt do so because they expect positive outcomes, at least I do. The issue I see with many of the posters on this forum is that they don't acknowledge the risk that the premium doesn't show up over their investing time horizon and many don't acknowledge the risk inherent in lev...

I'm not a doctor either and have never been in Boston. I'd pay off the house. Set aside whatever you think for an emergency fund, and invest the taxable money in either TSM and TISM or the Total World Stock Index. I'd wait a year or two on a building to see how health care reform shakes out. It may ...

A combination of skill/talent, risk/leverage/OPM (to juice returns), and luck (when/where born, family, etc.).

EDN » Sat Feb 23, 2013 1:13 pm Instead, "positive expected" means you add up all outcomes in a probability distribution, and the average of all those outcomes (including the really bad ones) is still positive. So the positive, and especially the "significantly and much more frequentl...

It is never irrational to be debt free. It lowers your monthly cash flow requirement and lowers your overall risk. While it is true that you can lose money on a paid off house, you won't have the risk of a negative equity position that makes it harder to move. There were any number of articles the l...

Congratulations. 1. Initially and for the first several years, contributions will overwhelm asset allocation. 2. The L2050 fund is a fine place to start. 3. As you learn more, you might want to branch out from that or you might not. 4. For most federal employees, the Roth TSP option is available. Th...

I'm uncomfortabel with any type of floating rate debt, so I'd pay it off at the end of the term. Things can go wrong and when things do go wrong, they tend to go wrong in bunches. Banks because they can spread the risk over multiple loans and multiple durations are better able to manage the risk. Th...

I think you can retire whenever you want to. $4M will be enough under most circumstances where the country doesn't collaspe. You are well under a 4% withdrawal rate. I would recommend two things: 1. Pay off the mortgage (lowers the fixed expenses and risk) 2. Reduce the stock bond ratio to no more t...

Gordon, You need 5% to get the maximum matching contribution. The information on catch-up contributions is available at TSP.gov. If you want more exact that what you're getting here, you should contact them. The requirement for making catch-up contributions is that you be on track to maiximize your ...

Portfolio Watch lists all of Precious Metals and Mining as domestic stock when 85%+ of the stocks in the fund are international.

As the other thread shows there are significant issues with the data.

Correlations between asset classes like returns are highly variable over time. Correlations tend to increase when people start using the asset class to diversify thier portfolios. Returns also tend to converge in a crisis when everything goes down. Gold is a great diversifier but you have to be will...

Thanks Taylor and Larry.

by staythecourse » Thu Feb 07, 2013 10:02 am Nothing wrong at all with being heavy on equities. Period. The data supports it. Anyone saying anything else is suffering from recency bias. I crunched the numbers of a heavy equity investor (80/20) vs. a defensive investor (50/50) over every 10, 15, 20 ...

I don't do the math: 10% of civilian job to Roth TSP 15% of Army Reserve salary to TSP (Roth option not available yet) ~2.5% of take-home to taxable Max 2xRoth IRAs 90% of my mortgage is principal 50 And that doesn't include the 2 defined benefit pensions or the 5% match on the Civilian TSP My wife ...

nisiprius: Actually I started in the USAA Cornerstone Fund in 1988 which had 20% Bonds, 20% Basic Value Stocks, 20% REITs, 20% Gold Stocks, and 20% International. I stayed until they raised their expense ratio and banded their allocations to allow tactical asset allocation (go figure). Regardless yo...

Harold » Fri Feb 01, 2013 9:43 am Really up to personal preference whether to treat your mortgage as a "negative exposure" to bonds – but in reality it is that way. A very clear explanation, thanks. I came to the same end result without quantifying the changes to my financial situation. L...

I understand the fact that the on-line tool doesn't fine-tune things as much as most of us would like. What bothered me when I played with it was that all the recommendations came out like below even if the % and amount for each fund was multiples of the Admiral threshold. :annoyed Your fund recomme...

It seems that the biggest risk/return effect is in the very smallest end of the pool and most value tilted side. DFA slices much thinner than Vanguard which splits into value or growth depending on how you relate to the middle. If they divided the market into three segments and didn't put the middle...

I'm in favor of drawing down in a balanced approach. I'm not retired, but my plan is to simplify. (Frankly if Vanguard offered Admiral shares of Target Retirement or LifeStrategy Funds, I'd be better off doing it NOW): 1. Bring everything into Vanguard and we can get it into 5 or fewer accounts. His...

momar, I personally would rather have a paid off house. We're not anywhere close to maxed out on house payments based on current salary, but required monthly income drops alot without that payment. We don't have car loans and don't carry a credit card balance. The intent is to pay cash for everythin...

I never really think about the mortgage as 'negative exposure' to bonds. I think of a mortgage as just like any other kind of debt (clearly there are tax differences). It is a fixed expense that has to be paid regardless of cash flow. It adds risk and stress to finances. With no debt, you can surviv...

Rick,

Thanks as always for the article. I read many more than I respond to.

Harry

Congratulations. I'm always happier debt free. Moved with the job after we'd paid off the house and had to take out a new mortgage in 2010. It should be paid off this year. 1/3 of the payment is mine to increase my contribution to the retirement plan/invest. 2/3 goes to the wife for 'household expen...

Yes
We've got some Wellington, Value Index, Small Cap Value Index, MidCap Value Index, and REIT. In my TSP, I've also got a larger allocation to the S fund than would replicate the total Market.

How is this different in application from either a Target Retirement or LifeStrategy Fund? For a small account, you're not going to get more attention that that. Set or adjusting asset allocations with built in rebalancing. Wtih those to sets of funds at least you get low expenses. Even a cheap advi...

Warren Buffett has made good money investing and has made money for long term investors. He made a great deal of money on his fees from managing other people's money. Buffett has said that most people should be invested in index funds. That most people should be invested in indexes was also an idea ...

I own a little in my Roth IRA. I started out the year about equal to my US REITs Admiral Shares. Now International is ahead by a statistically significant margin. I should sell a little but have re-allocated the distributions instead. I don't have enough to move the needle but enjoy the REIT, PM&...

Doc, My earlier post about taxes was in response to a comment by grabiner (And it could be even better, as you might not pay that tax at all, if you donate the stock to charity or leave it to your heirs.) If a consideration of not paying taxes if the account is passed to heirs is on topic, then a co...

You may not pay the tax if you pass a tax-deferred account to your heirs but rest assured that your heirs will. Tax-Deferred Accounts don't get a stepped up basis when passed to heirs. The accounts may be subject to inheritance tax upon death and will be subject to income tax upon withdrawal. It's a...

Mel,

Thanks. Great interview.

Harry

If the market is calculating an accurate price with a Present Value Analysis of the expected cash flows from the investment. The timing of the sale in relation to the duration of the investment shouldn't make any difference.

Harry

I'd go the other way and get rid of C and S and subsitute a TSM fund. I would like to modify the I fund to be more total international.

Of course the RMD strategy dominates. 1. There is no RMD until age 70.5 so withdrawals are delayed.The initial RMDs are less than 4% rising to larger %s based on your changing life expectancy as you age. 2. Since the RMD is based on a percentage of the value of the account, simple math says that you...