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Re: Retirement portfolio review - low taxes; tight budget

4% is fine. My point about the AA is, 1) you don't have an emergency fund--I agree. As you have correctly concluded, you have what you have. Any emergency must come from the assets no matter how they are labeled. 2) is about AA. Your overall AA is not 40/60. I think if you are really 30/70 or better...
by pkcrafter
Thu Nov 27, 2014 3:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement portfolio review - low taxes; tight budget
Replies: 7
Views: 1277

Re: best performer - very similar index funds

selftalk wrote:Thank you Barry. I`ll call Vanguard tomorrow and check that out . If that`s the case then I`ll use VFIAX and VTSAX in equal weighting in the IRA. Thank you all for your responses to my question.

Holding both VFIAX, S&P500, and VTSAX, Total Stock Market, makes no sense.

Paul
by pkcrafter
Thu Nov 27, 2014 1:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: best performer - very similar index funds
Replies: 16
Views: 1177

Re: "Two Key Lessons You Can Learn From Academic Research"

Taylor, thanks for providing the video, and best wishes for a happy thanksgiving. The key take away from this video is do a few things properly and the rest will turn out fine. Maybe we should strive for simplicity. :shock: At first striving for simplicity sounds like an oxymoron, but it really is t...
by pkcrafter
Thu Nov 27, 2014 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: "Two Key Lessons You Can Learn From Academic Research"
Replies: 9
Views: 1347

Re: Retirement portfolio review - low taxes; tight budget

Desired Asset allocation: 30-40% stocks /rest in cash & bonds

OK, your AA without the cash holdings is now 40/60, but you have to count the cash. What is the AA including the stashed cash? What is your current withdrawal rate?

Paul
by pkcrafter
Wed Nov 26, 2014 8:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement portfolio review - low taxes; tight budget
Replies: 7
Views: 1277

Re: POLL: Attitude Towards Risk

(A), the $240, is a sure thing. When this test was conducted, the majority (84%) chose A over B. Option A involves no risk. They were not willing to risk the loss of the $240 they didn't yet have for a chance of gaining something more and not getting the $240. When C and D were presented, the majori...
by pkcrafter
Wed Nov 26, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Attitude Towards Risk
Replies: 57
Views: 2067

Re: POLL: Attitude Towards Risk

I think you have to require players to opt for one from each group, but since you didn't I'll just opt for B--I don't like C or D.

Oh, yeah, Livesoft won't go for $240, but will for $250. :D

Paul
by pkcrafter
Wed Nov 26, 2014 6:22 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Attitude Towards Risk
Replies: 57
Views: 2067

Re: Been out of market since 2008 and can't get back in

I guess it could be argued that you have a huge amount of assets in a single investment, plus you are directly tied to it. That means the risk is extremely concentrated and extremely high, so should you also invest everything else (retirement savings via a 401k pension/profit sharing plan) in the sa...
by pkcrafter
Wed Nov 26, 2014 1:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Been out of market since 2008 and can't get back in
Replies: 50
Views: 4453

Re: Why it's important to understand risks and have discipli

Good reminder, Larry. For the next 20-year period, 1980-1999, small value stocks returned 16.6 percent a year, underperforming the total market portfolio by 0.9 percentage points a year. Would you have had the discipline to stay the course? The answer is almost no one did. It's also worth noting tha...
by pkcrafter
Wed Nov 26, 2014 1:35 pm
 
Forum: Investing - Theory, News & General
Topic: Why it's important to understand risks and have discipline
Replies: 11
Views: 1231

Re: 60/40 edging my 95/5!

Good example demonstrating that risk to reward is not constant, and slice/dice is best in long term portfolios.

Paul
by pkcrafter
Wed Nov 26, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: 60/40 edging my 95/5!
Replies: 8
Views: 2015

Re: "Folklore of Finance" article and indices

Comments in the linked article by Ms. Duncan prompted a reply from M*s John Rekenthaler. As for the Morningstar star ratings (to which Duncan presumably referred), the statement that they contain both truth and untruth is superficially wrong. The star ratings are a straightforward math exercise that...
by pkcrafter
Tue Nov 25, 2014 7:54 am
 
Forum: Investing - Theory, News & General
Topic: "Folklore of Finance" article and indices
Replies: 4
Views: 919

Re: Index Funds, REIT's, Real Estate, Swing Trading, Forex

Do I understand correctly this isn't so much your idea, as it is the idea of some people you know who don't [ have enough | want to risk enough ] to make as much money flipping houses as they'd like? This is my question too, Whose Idea is it for you to get in on this? Where you invited by friends? ...
by pkcrafter
Mon Nov 24, 2014 5:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Index Funds, REIT's, Real Estate, Swing Trading, Forex
Replies: 28
Views: 2221

Re: What would be the investing strategy for a coming crash?

There are always going to be extreme pessimists and optimists foretelling doom or utopia in the stock market. OP, That is incorrect. I don't know any extreme optimists. I have seen a few. I think there are many realists and then an unjustified number of extreme pessimists. L. I wonder if posters ca...
by pkcrafter
Mon Nov 24, 2014 2:58 pm
 
Forum: Investing - Theory, News & General
Topic: What would be the investing strategy for a coming crash?
Replies: 81
Views: 6656

Re: Trustee-Broker Disagree over Allocation/Investments

You're doing the right thing, just be sure to fulfill the wishes of the decedent, not the beneficiaries. Is the money supposed to be held in trust for a long time?

Paul
by pkcrafter
Sun Nov 23, 2014 8:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trustee-Broker Disagree over Allocation/Investments
Replies: 18
Views: 1460

Re: Will stocks beat bonds over next 30 years?

PJW, thanks for the explanation, and I agree. gordoni, I wasn't thinking of long term bonds, I was thinking shorter term--the risk-free rate because that is what is used to calculate the risk premium. I do realize the risk-free rate can mean several things, but usually not that far out. Bobcat, poin...
by pkcrafter
Sat Nov 22, 2014 8:25 pm
 
Forum: Investing - Theory, News & General
Topic: Will stocks beat bonds over next 30 years?
Replies: 64
Views: 5182

Re: Why I will fund retirement with TIPs ladder no matter wh

MPT, Erwin, my first reaction was a surprise that you were not familiar with this issue. John Norstad's article on risk and time has been posted many times. On the issue of volatility vs uncertainty, I do think uncertainty is a risk, however, there are some very knowledgeable posters who would argue...
by pkcrafter
Sat Nov 22, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: Why I will fund retirement with TIPs ladder no matter what
Replies: 55
Views: 4578

Re: Will stocks beat bonds over next 30 years?

... The parameter values I used were intended to be reasonable forward looking estimates over the next 30 years for US stocks and the US investment grade bond universe. ... Computers have enabled fewer people to make more mistakes in less time than has ever before been the case in human history. PJ...
by pkcrafter
Fri Nov 21, 2014 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: Will stocks beat bonds over next 30 years?
Replies: 64
Views: 5182

Re: % of REITs in VG Funds

I don't know for sure, but I would think percentage of REITs in large cap funds is pretty close to the numbers listed. REITS tend to be small and value, so funds that are targeted at these classes will hold more REIT. You can also get data from M* that is pretty close to that listed in the Wiki. For...
by pkcrafter
Fri Nov 21, 2014 2:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: % of REITs in VG Funds
Replies: 3
Views: 988

Re: "Are your bonds doing what they're supposed to do?"

Thanks for the post, it's on the money. Funny that there are over 400 views and no comments. We know by the number of posts on bond selection that many investors are either using riskier bonds to get yield or just flat out going to equities.

Paul
by pkcrafter
Fri Nov 21, 2014 12:05 pm
 
Forum: Investing - Theory, News & General
Topic: "Are your bonds doing what they're supposed to do?"
Replies: 5
Views: 1144

Re: Is investing more risky today today than before the inte

I wonder. Back in the 60s in order to get people to invest in stocks, companies had to offer enough to make it worthwhile, and dividends of 5% were not uncommon. People were willing to take the risk for the good reliable income. Today, investors are willing to take the risk for much less in dividend...
by pkcrafter
Wed Nov 19, 2014 5:32 pm
 
Forum: Investing - Theory, News & General
Topic: Is investing more risky today today than before the internet
Replies: 30
Views: 2833

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

No. 10 on that list is the reason the other nine are listed, but they are a contrived pitch for an advisor. TSM is the default selection and there is nothing wrong with it.

Paul
by pkcrafter
Wed Nov 19, 2014 1:24 pm
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8228

Re: Glidepath (target date) investments distort asset alloca

Now that I've attempted to justify my comment, :happy I will say that if I could create a line of TD funds, none would be higher than 75% stock because one fund for a wide range of investors should be a Goldilocks portfolio --not to much risk and not to little. Finally, I don't think target retirem...
by pkcrafter
Wed Nov 19, 2014 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: Glidepath (target date) investments distort asset allocation
Replies: 20
Views: 2852

Re: Effect of market dip midstream

I'm discussing retirement investing theory with a friend and need some assistance in demonstrating the effect of a market dip relative to a constant increase in the market. Consider a scenario where, after 20 years, the market increase is 10% overall. Also, you did NOT make any contributions or wit...
by pkcrafter
Wed Nov 19, 2014 11:08 am
 
Forum: Investing - Theory, News & General
Topic: Effect of market dip midstream
Replies: 6
Views: 950

Re: Glidepath (target date) investments distort asset alloca

conventional wisdom ignores empirical evidence that younger workers with less secure employment and scant savings are far likelier to raid their retirement accounts to meet basic living expenses. Since they’re also more likely to lose their jobs in a recession, which in turn is likelier to occur fo...
by pkcrafter
Wed Nov 19, 2014 9:50 am
 
Forum: Investing - Theory, News & General
Topic: Glidepath (target date) investments distort asset allocation
Replies: 20
Views: 2852

Re: Target Retirement Glidepath Timing

Target date funds don't hit the income level of 30% until 7 years after the date. TR2020, in 2020 will still be 50% stock. In 2015 it will be close to 60%. For this reason, you may have to select by allocations instead of date. Here's the glide path... https://advisors.vanguard.com/VGApp/iip/site/ad...
by pkcrafter
Wed Nov 19, 2014 9:11 am
 
Forum: Investing - Theory, News & General
Topic: Target Retirement Glidepath Timing
Replies: 3
Views: 916

Re: how to make money like a billionaire

how to make money like a billionaire

Step 1. Become a Billionaire.

Tony Robbins has a new book out and he's popping up everywhere promoting it.

Paul
by pkcrafter
Tue Nov 18, 2014 11:31 pm
 
Forum: Investing - Theory, News & General
Topic: how to make money like a billionaire
Replies: 116
Views: 9564

Re: American Funds

Agree with Steve, we need to know the class of funds, A, C? Do you have any ticker symbols?

Paul
by pkcrafter
Tue Nov 18, 2014 1:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: American Funds
Replies: 14
Views: 1942

Re: Ray Dalio's All-Weather Portfolio

Thanks, interesting portfolio. This from the linked article...

Ray said, we need 30% in Stocks (for instance, the S&P 500 or other indexes for further diversification in this basket).


Paul
by pkcrafter
Tue Nov 18, 2014 1:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ray Dalio's All-Weather Portfolio
Replies: 14
Views: 2452

Re: 403(b) Difficulties - please advise!

Tibbles, quite a first post. Your wife is part of a retirement committee, that's good, but as Professor Emeritus hints at, this plan may not be subject to ERISA rules. That's the first thing that needs to be clarified. Along the same line, is your wife certain that the advisor is working as a fiduci...
by pkcrafter
Tue Nov 18, 2014 10:10 am
 
Forum: Investing - Help with Personal Investments
Topic: 403(b) Difficulties - please advise!
Replies: 9
Views: 827

Re: Seeking Historical returns for Core Indexes

Try this, Bob. The S&P500 is a fair representation of the market. http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html stock/bond returns http://qvmgroup.com/invest/2013/07/30/historical-returns-for-us-stock_bond-allocations-and-choosing-your-allocation/ Paul
by pkcrafter
Mon Nov 17, 2014 4:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Seeking Historical returns for Core Indexes
Replies: 10
Views: 885

Re: restarting overwhelmed

Her (47) 401K: 100k Just rolled over to Fidelity IRA MMF, waiting on funds to transfer, needs to work another ten years to get SS-$1442 month at 67 Do you mean your wife was able to do an in service rollover? Did she get a match? Why did she rollover? Be aware that you need to have a comprehensive ...
by pkcrafter
Mon Nov 17, 2014 2:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: restarting overwhelmed
Replies: 24
Views: 3795

Re: Investing in Chocolate? New to all of this.. need help.

There are professionals in the financial field who spend all their time looking for good deals. If there is money to be made on chocolate, they are way ahead of you. Don't speculate, learn to invest. There is a big difference.

Paul
by pkcrafter
Mon Nov 17, 2014 2:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing in Chocolate? New to all of this.. need help.
Replies: 23
Views: 2416

Re: Is my Tommy Lee Jones Approved Portfolio a disaster?

Welcome, you know it's pretty bad when your CPA suggests you review your expenses. What jumps out first is a 0.9% management fee on mid 7 figure portfolio. Yes, he lowered it when questioned because he knew he was seriously overcharging you. Vanguard and Rick Ferri will manage at 0.3% You have some ...
by pkcrafter
Mon Nov 17, 2014 1:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is my Tommy Lee Jones approved Portfolio a disaster?
Replies: 17
Views: 2191

Re: Overwhelmed with Asset Allocation

Hi Guys, Welcome to the forum, Just starting out right now with my wife. Thanks for any feedback and help. It is much appreciated! -PD Emergency funds: Currently have 1.5 months of salary saved in our Capital One Savings Account Emergency fund may be too low right now. You might think about increas...
by pkcrafter
Mon Nov 17, 2014 12:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Overwhelmed with Asset Allocation
Replies: 20
Views: 2269

Re: restarting overwhelmed

Review and questions. First question--Are you now retiring? If not, when do you plan to retire? Been on the sidelines way too long and need to start making a return on our $ but very overwhelmed. ETF's? Mutual Funds? Talking with Fidelity today and opened an account they said they could manage the ...
by pkcrafter
Mon Nov 17, 2014 9:02 am
 
Forum: Investing - Help with Personal Investments
Topic: restarting overwhelmed
Replies: 24
Views: 3795

Re: Expenses are ??

OK, so it's not that the lower ER outperforms the more expensive funds, it's that with the lower ER, you get to keep more of the return so in theory the lower ER fund is actually a better returning fund? My head hurts now! OK, I understand now. Q I think you're getting it. Consider two S&P500 f...
by pkcrafter
Sat Nov 15, 2014 9:14 pm
 
Forum: Investing - Theory, News & General
Topic: Expenses are ??
Replies: 11
Views: 1664

Re: Glidepath (target date) investments distort asset alloca

conventional wisdom ignores empirical evidence that younger workers with less secure employment and scant savings are far likelier to raid their retirement accounts to meet basic living expenses. Since they’re also more likely to lose their jobs in a recession, which in turn is likelier to occur fo...
by pkcrafter
Sat Nov 15, 2014 8:29 pm
 
Forum: Investing - Theory, News & General
Topic: Glidepath (target date) investments distort asset allocation
Replies: 20
Views: 2852

Re: "Three Simple Rules of Investing"

Thanks Taylor. It doesn't get any clearer than that.

Paul
by pkcrafter
Sat Nov 15, 2014 7:25 pm
 
Forum: Investing - Theory, News & General
Topic: "Three Simple Rules of Investing"
Replies: 14
Views: 4044

Re: Can active funds reliably beat the index? Actually, Yes

*Regarding Petijisto, he and Cremers did their original study in 2010, I believe. I asked Petijisto if he would mind providing his data and he said he would as soon as the study was peer reviewed. I'm still waiting for that. Another similar study was done recently and it came to pretty much the same...
by pkcrafter
Sat Nov 15, 2014 3:48 pm
 
Forum: Investing - Theory, News & General
Topic: Can active funds reliably beat the index? Actually, Yes.
Replies: 37
Views: 4757

Re: Made a huge mistake, need help

Stillwater wrote: Then the company split into 2 different companies that in 2013 had the greatest returns probably in their history. I am talking that we have missed out on probably an extra $250,000 that would have accumulated in that 401k had we not rolled it over. Not staying 100% stock and losin...
by pkcrafter
Sat Nov 15, 2014 10:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Made a huge mistake, need help
Replies: 50
Views: 9581

Re: Help Understanding My Employer's 401(k) Options

Welcome, I think from the suggestions above you can see a pattern--we recommend low cost broadly diversified investments while minimizing overlap and duplication. You are a new investor, so one other question that is important now is your attitude about risk and loss, even if temporary. It makes sen...
by pkcrafter
Sat Nov 15, 2014 9:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Help Understanding My Employer's 401(k) Options
Replies: 11
Views: 901

Re: Well Read But New Investor Now Retired Needs Advice

Paul, My thank you wound up in your signature line the same color font so you may not see it. I'm a little slow at the technical stuff on the site. You are the first person to specifically reply to my question about Wellesley. Makes sense. I'm curious why either you or Paul would think that. I've c...
by pkcrafter
Fri Nov 14, 2014 2:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Well Read But New Investor Now Retired Needs Advice
Replies: 22
Views: 1763

Re: Well Read But New Investor Now Retired Needs Advice

discreet wrote: My only reservation is substituting a bond portfolio for treasuries/cd/gov't bonds since I have looked at the portfolios of these funds and understand the statistics involve manager "discretion" as to duration, etc. Perhaps I need to get over my skepticism. I don't really s...
by pkcrafter
Fri Nov 14, 2014 2:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Well Read But New Investor Now Retired Needs Advice
Replies: 22
Views: 1763

Re: Well Read But New Investor Now Retired Needs Advice

Comments in blue... Please accept my apologies in advance if I stumble in this posting since I have never posted to any forum or blog and I am not very computer literate. Facts: $50,000 cash for emergencies $2m cash in taxable account $.5m cash in 401k, no future contributions, no withdrawals yet $...
by pkcrafter
Fri Nov 14, 2014 11:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Well Read But New Investor Now Retired Needs Advice
Replies: 22
Views: 1763

Re: A/A including Social Security?

Social security is an income stream. There is no lump of assets for you to adjust or withdraw from, so don't consider it some kind of bond income when you don't have the assets. Doing so increases your allocation to stocks and that will create higher losses which may bring it's own set of problems. ...
by pkcrafter
Fri Nov 14, 2014 10:10 am
 
Forum: Investing - Help with Personal Investments
Topic: A/A including Social Security?
Replies: 5
Views: 349

Re: IRA move happend at the worst time - now what?

YB, you did not make a blunder, you did everything right and just ran into back luck. I assume this was a custodian to custodian transfer, which was the right way to do it. Now that the transfer is complete, proceed with you plan. Buy your funds, get back to your target AA and move on.

Paul
by pkcrafter
Fri Nov 14, 2014 9:55 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA move happend at the worst time - now what?
Replies: 15
Views: 1291

Re: Kitces Sequence of Returns, Bucket Rebalancing

And here's another one from Kitces, which was written before the article posted above. This one goes a step further and changes AA based on Shiller P/E10. The shifts are 15% from a starting 45/55 portfolio. What's most interesting about this study is stocks/bills outperformed stocks/bonds. http://ww...
by pkcrafter
Thu Nov 13, 2014 7:02 pm
 
Forum: Investing - Theory, News & General
Topic: Kitces Sequence of Returns, Bucket Rebalancing
Replies: 10
Views: 1526

Re: Individual stocks in retirement portfolio?

The behavioral aspects of investing are challenging enough without adding individual stocks.

Paul
by pkcrafter
Thu Nov 13, 2014 12:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Individual stocks in retirement portfolio?
Replies: 14
Views: 643

Re: Strategies to protect retirement from depressn or long b

It is interesting to see that this is one of the very few discussions that acknowledges the possibility of such an event. What becomes of the 100%er in such an environment?

Paul
by pkcrafter
Thu Nov 13, 2014 11:52 am
 
Forum: Investing - Theory, News & General
Topic: Strategies to protect retirement from depressn or long bear?
Replies: 33
Views: 3742

Re: Plan

Yes, you made a mistake, but now you are still not at your target AA, so you have not corrected it. You need to get back on target. You may have to use a different fund for now, but waiting for recovery is a behavioral pitfall. See if you can identify which one. Vanguard, Behavioral Finance Ok, it's...
by pkcrafter
Wed Nov 12, 2014 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Plan
Replies: 6
Views: 557
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