Bogleheads.org

I guess I have to realize I can dump on presentations and interpretations in uncomfortable ways, always to the benefit of the readers.

Good luck to all, and if that means me learning a lesson or two so be it.

Are you still with me?

A bit too tilted toward capital assets for my comfort.

The portfolio return is the sum of the weighted returns of the individual classes. The returns of the individual classes are determined at the end of the period, after each class SD has been accounted for (rolled up into the class return)...and consequently rolled up into the portfolio return. IOW, ...

Doing a full backward-looking mean-variance optimization the only inputs are the returns and the weights for each investment. The interaction among the classes/investments is derived from the returns. In a roundabout way you can see why backward-looking analyses have significant limitations. That's ...

The ideal is to build a portfolio which will deliver, say, 8% per year with zero volatility. Then your planning is straightforward. In the real world the portfolio SD is going to cause the portfolio return to fall below 8%, so we try to minimize deviations from 8% in order to keep our plan on track....

I agree with GrayFox.

I voted approximately zero.

I have doubts about rebalancing back to a DIY AA. Is there any reason to believe an initially arbitrary AA is efficient or will be efficient over the long run?

Why not Wellington or Wellesley? I think either of them is preferable to the funds you're considering.

Another good option would be the 60/40 distribution fund, although management of the distributions could be a problem.

Once transferred you should qualify for a free Vanguard Brokerage Account, you could then gain access to PAUIX which would be a great complement to Wellesley Income (Admiral shares). An even split between VWIAX and PAUIX would be great, although I'd probably tilt a bit toward PAUIX.

I hope to have my target AA (still have some cash to invest) until I retire, which I hope will be in 16 years.

The change I anticipate will likely come with an increase in income and an increase in diversification.

My bonds are actively managed, they're also highly diversified. I think my PIMCO fund holds bond funds managed by Gross and I have no problem with that. I think multi-sector and strategic income funds are good options for those looking for a highly diversified bond fund, they're the all-encompassing...

This question is just one of many which convinced me to dump them in my managers' laps.

If I were doing it myself I'd buy stocks based on fundamentals or buy a global stock fund.

The responses are all over the place, not surprising.

You may be limited in your TSP choices, nothing you can do about that so I'd say you're likely doing pretty well in there.

I think you're under-diversified in your Roth, where you likely have endless choices. Specifically, your exposure to alternative classes is zero.

I'm not sure HFs are necessary. I referred to the growth vs inflation model when I built my portfolio, I referred to many other things as well. While asset classes don't quite fit as neatly into that macro model as the diagrams show at minimum the model provides the rationale behind asset classes in...

If I had to invest under such a limitation I'd pick one of the multi-sector or strategic income funds, they're largely global TAA bond funds.

Boy am I glad I invest at the business level.

The ending was great, especially when George intimates his next hot tip...a business making robot butchers.

Last night they showed the episode of Seinfeld in which George convinces Jerry to go in on a stock with him, Cendrex. After several days of losses Jerry bails and locks in a $1,500 loss, George decides to stick it out. A few days later, out of curiosity, Jerry and his girlfriend check the stock in t...

In the long run don't the returns on stocks reflect earnings?

With 45 years to go you are contemplating exactly the opposite approach I would take if I were in your situation. I would adopt a highly diversified conservative or moderate portfolio to reduce risk and take advantage of compounding over so many years to grow my portfolio, rather than relying too he...

I don't like reaching into the past for comparisons, the past is the past. But as a result of some simplistic research I did a year ago... Between 73 and 82 Wellesley just missed keeping pace with inflation, Wellington didn't fare so well. Recall, Wellesley runs about 33/67 (stocks/bonds) and Wellin...

After years of investing and my own research I've come to the conclusion the rule-of-thumb recommending large stock allocations for young investors is just the opposite of what I would do if I had the chance to do it all over again. The long horizon translates to assuming less risk, not more. If one...

I think 100% bonds is under-diversified too, although if you were intent upon such a portfolio you might consider multisector and strategic income funds. A healthy dose of alternative classes would also be wise. I share your concern over stock volatility and whenever this comes up I always mention t...

I get your points. I'm not sure a lot of securities means better diversification. I think I could have picked a better word than static for the TR funds, slowly changing might have been more appropriate. In any event TR funds make big bets on when the stock and bond markets should be heavily weighted.

Using the low ER index approach can lead to one of two problems: 1) If you adopt the fund-of-funds approach you end up with limited diversification within a static AA. 2) If you choose to go with a number of targeted index funds you assume responsibility for portfolio management. There may be other ...

Dr. Grantham could be a source.

Your data is backward-looking and of course period-dependent, for me those are major drawbacks.

At this stage in my life I wouldn't be able to adopt a fixed AA based on past performance, I'm not investing for the past.

I have a small amount of HY, my fund managers see value (for now) and I don't second guess them. I personally wouldn't own HY if I managed my portfolio because the misleading long term correlations don't hold during crises. I've come to the conclusion downside protection is paramount, as opposed to ...

It's not all about reducing drag, it's about a sound/reasonable financial plan and making it succeed.

My objective is not to realize the highest return possible, my objectives are to meet my portfolio value target at the time I retire and then make that money last through my retirement. So while I may pay somewhere between 15 and 20% over an extended time period for management it's worth it to me. W...

Sorry, invesco balanced risk.

Isn't the NAV of Wellesley relatively stable?

I don't think you'll get the level of diversification of IBR from the VG/TRP funds.

I care more about after-cost performance.

I don't think Wellesley and IBR are similar.

Wellesley uses a static AA and is geared for low/moderate inflation environments, IBR has a dynamic AA and should be able to handle higher inflation too.

Just asking...how's economic growth been over that period...one way to suppress inflation is to stifle growth, to the point few want to take risk.

The fund is an attempt to distribute volatility evenly, so your stocks don't drive the whole portfolio into the ground. The volatility-spreading is coupled with macro risk considerations, like growth and inflation. The main mechanism for volatility reduction is the big bond allocation, with leveragi...

I think many investors need to be brilliant, realizing they should detach themselves from the investment process as much as possible.

I invest to meet my future retirement needs. Bogle's restricting himself to capital markets, which I think is generally a mistake. I'm not sure how a dollar gained in precious metals or foodstuffs is different than a dollar earned in capital markets. Prices are determined differently in each of thes...

Option 1, although if I were limiting myself to VG funds I'd go with Wellesley.

IMO PIMCO's All Asset is good single fund solution.

I would stay broadly diversified, going 100% real assets doesn't seem like a balanced approach from an asset allocation perspective. I don't see Arnott as prone to wild speculation or scare tactics, he's a smart guy and a good manager. I have about 25% of my retirement assets in his All Asset All Au...

I'm not seeing any decline in the fear factor to justify the decline in gold.

I'm a little more cautious on GDP growth and stocks.

While I think Swensen is a great manager I doubt he's the only one who knows the ins and outs of alternative investments, many of them are accessible to investors. I'm not buying your claim about higher return translating to higher risk. While there aren't any guarantees with asset allocation manage...

I'm not sure what the problem is with holding alternative classes, conventional stock and bond portfolios like Wellington, Wellesley, etc. didn't keep pace with inflation between 73 and 82 although Wellesley came close. Wellington lost about 33% from its peak in late 2007 between 2007 and 2009. Alte...

While I appreciate the idea of investors getting to the party too late I disagree with much of what's been posted so far. I haven't conducted comprehensive research but from what I have seen some institutions have done well using actively managed portfolios which contain alternatives. I realize aver...

My only problem with either fund is inflation.

Both can go shorter in bonds and load up on inflation-sensitive stock sectors, but that's about it.