Current Thoughts On Investing [Help with Portfolio]

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Current Thoughts On Investing [Help with Portfolio]

Postby Munchkin Man » Tue Mar 19, 2013 7:57 am

Greetings To All:

Since the Munchkin Man's return to the Bogleheads Forums three weeks ago, the Munchkin Man has received several requests from a number of fellow Bogleheads for the Munchkin Man to share the Munchkin Man's current thoughts on investing.

The Munchkin Man will gladly oblige and begin to do so now.

Let not your heart be troubled.

The Munchkin Man is not going to go into a long discussion about penny stocks and Uranium stocks.

That is what the Munchkin Man used to do.

For the record:

The Munchkin Man does not own any Uranium stocks at the present time.

The Munchkin Man is feeling fearful of investing in Uranium at the present time.

The Munchkin Man may invest in Uranium at some future point in time.

But the Munchkin Man does not feel comfortable in doing so at the present time.

The Munchkin Man does still own one penny stock.

Just one.

The Munchkin Man won't mention its name.

Its value only takes up about 2% of the Munchkin Man's total portfolio value at the present time.

The Munchkin Man is not planning to add any more money to it.

The Munchkin Man is stil holding on to it for the clear and simple reason that the Munchkin Man just wants to see what it is going to do.

If it tanks, the Munchkin Man may never buy another penny stock again.

Moving on..............

The Munchkin Man allocates 50% of the Munchkin Man's monthly available savings and investing money into a money market savings account.

The Munchkin Man allocates the other 50% into a total of three mutual funds, divided equally, through their monthly automatic investing plans.

One of these mutual funds is classified as a "Moderate Allocation" fund.

The other two mutual funds are classified as "Conservative Allocation" funds.

All three of these funds are actively managed funds.

For the sake of brevity, the Munchkin Man will not mention their names.

The Munchkin Man is 63 years old.

The Munchkin Man had to "start over" by saving and investing again from "ground zero" three years ago.

If the Munchkin Man was 23 years old, knowing everything the Munchkin Man knows now, including the consequences of the Munchkin Man's many past investing mistakes, the Munchkin Man would probably embrace and practice a passive inexing strategy.

The Munchkin Man would probably be investing in the "Three Fund Portfolio" or something similar.

But the Munchkin Man is fearful of switching to a passive indexing strategy at the Munchkin Man's age.

The Munchkin Man would not be so fearful if the Munchkin Man was 23 years old again with an investing time horizon of at least 50 years.

But at 63 years of age, the Munchkin Man does not have 50 years to invest.

The Munchkin Man does not feel comfortable being defenseless in a bear market with the limited time horizon the Munchkin Man has left availbable to invest.

At the Munchkin Man's current age, the Munchkin Man feels more comfortable investing in a small cluster of actively managed moderate and conservative allocation funds, so that the fund managers will theoretically and hopefully be able to steer their respective funds out of the troubled waters of a bear market.

Does any of this make sense?

Do any of you think it is not too late in life for the Munchkin Man to switch to a passive indexing investing strategy?

The Munchkin Man wants to keep an open mind on this issue.

Maybe the Munchkin Man would be willing to sell the Munchkin Man's "Moderate Allocation" fund and invest the money into one solid index fund.

The Munchkin Man would welcome any thoughts and opinions you would like to share on this issue.

Thanks in advance.

Good luck to all.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing

Postby dickenjb » Tue Mar 19, 2013 8:27 am

Hi MM

Glad you are back.

I, for one, do not feel ot is too late to switch to a passive approach.

Consider this - the old "4% rule" says if you have a million dollar portfolio, you can take out $40,000 a year to live on, increase it by the inflation rate, and if past history is a guide, not run out of money for 30 years.

That has to be reduced by expenses.

So if you are in the Three Fund Portfolio, as I am, and paying 9 basis points in expenses, I get to live on $39,964 a year.

Whereas if the Munchkin Man is in an actively managed fund paying 1% in expenses, he gets to live on $30,000 a year.

I do not want fully 25% of my retirement income going to fund managers.

This does not even consider the hidden costs of active management, such as trading impacts, tax inefficiency, etc.

Perhaps instead of hoping your active fund managers will presciently move to cash before a bear market (they never do), the Munchkin Man would be well served by a passive portfolio with a suitably low equity allocation matched to the Munchkin Man's risk tolerance.
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Re: Current Thoughts On Investing

Postby nisiprius » Tue Mar 19, 2013 8:39 am

Munchkin Man wrote:....The Munchkin Man allocates 50% of the Munchkin Man's monthly available savings and investing money into a money market savings account... [he] allocates the other 50% into a total of three mutual funds, divided equally, through their monthly automatic investing plans... One ... is classified as a "Moderate Allocation" fund... the other two mutual funds are classified as "Conservative Allocation" funds. All three of these funds are actively managed funds....

The Munchkin Man is 63 years old... [he] had to "start over" by saving and investing again from "ground zero" three years ago... [He] is fearful of switching to a passive indexing strategy at the Munchkin Man's age.
Without the names of the funds it's hard to see a clear picture, but I'm going to respect your reticence. Morningstar's "Moderate Allocation" means 50% to 70% stocks, and "Conservative Allocation" means 20% to 50% stocks. So I'm going to guess that overall your mutual fund holdings are perhaps 40% stocks. If you include your savings account, then 20% stocks.

Overall, your description of your situation makes me think that this is not a large investment holding and does not generate much living income, and that you might need to tap it at any time. If so, a conservative allocation seems prudent.

Samuel Butler wrote, "It is only on having actually lost money that one realises what an awful thing the loss of it is, and finds out how easily it is lost by those who venture out of the middle of the most beaten path." What worries me a little is your descriptions of previous investments--penny stocks, uranium, VICEX. All of these are way out of the most beaten path.

Munchkin Man, are your mutual funds nice, plain, bland, ordinary, general-purpose funds, with names like XYZ Balanced Fund or QRS Growth & Income Fund... and expense ratios that are under 1.00%? Or are they clever, interesting funds that express colorful ideas and are focussed on particular concepts, or market segments, or parts of the world?

I would not put too much weight on whether the funds are indexed or actively managed. John C. Bogle has said that the best course is often "Don't do something, just stand there." Bogle is not doctrinaire about indexing himself, and you would be hard-put to find him saying anything bad about the Wellington Fund for example (except for one period in its history).

If there's nothing offbeat about the funds you are holding right now, and if you are fearful of switching, don't do anything in a hurry.
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Re: Current Thoughts On Investing

Postby RadAudit » Tue Mar 19, 2013 9:28 am

Welcome back, Munchkin Man

I understand that starting over at any age can be daunting. Starting over past middle age can be especially difficult.

I'd suggest that you run your portfolio through Morningstar's Instant X-Ray to see what asset allocation you really have. You may be able to roughly duplicate the asset allocation using a three (or four) low cost index fund portfolio, reduce expenses, and either maintain or increase portfolio income when comparing passive to active investing approaches. Might be worth a look.

However, going with what you are comfortable with is probably the best approach.

Good luck.
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Re: Current Thoughts On Investing

Postby YDNAL » Tue Mar 19, 2013 10:32 am

Munchkin Man wrote:But the Munchkin Man is fearful of switching to a passive indexing strategy at the Munchkin Man's age.

The Munchkin Man would not be so fearful if the Munchkin Man was 23 years old again with an investing time horizon of at least 50 years.

But at 63 years of age, the Munchkin Man does not have 50 years to invest.

The Munchkin Man does not feel comfortable being defenseless in a bear market with the limited time horizon the Munchkin Man has left availbable to invest.

At the Munchkin Man's current age, the Munchkin Man feels more comfortable investing in a small cluster of actively managed moderate and conservative allocation funds, so that the fund managers will theoretically and hopefully be able to steer their respective funds out of the troubled waters of a bear market.

Does any of this make sense?

It only makes sense if Munchkin Man feels at ease and sleeps better at night by having active managers help the Munchkin Man in this regard; so then, it is what the Munchkin Man should do.

The Munchkin Man's active funds (for discussion purposes, Wellington - moderate, Wellesley - conservative :D ) seem to provide the peace of mind the Munchkin Man is looking for. That said, Munchkin Man is relying on fund managers to do right by him, but the Munchkin Man should know - and I'm pretty sure the Munchkin Man knows - that managers can lay an egg at any time. For instance, in case the Munchkin Man didn't know, even legendary Bond King Bill Gross (and his possy including Mohamed A. El-Erian) laid one recently and others may do the same in the troubled waters of a bear market.

Good luck Munchkin Man!
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Re: Current Thoughts On Investing

Postby bottlecap » Tue Mar 19, 2013 1:31 pm

I don't think the Munchkin Man's strategy to avoid index funds makes sense because active funds aren't better at avoiding bear markets.

However, if MM feels safer having someone else do the investing for him and this will prevent him from selling in a panic, then perhaps that alone is reason enough to stick with an active strategy.

Good luck, Munchkin Man.

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Re: Current Thoughts On Investing

Postby jeffyscott » Tue Mar 19, 2013 6:09 pm

Munchkin Man wrote:At the Munchkin Man's current age, the Munchkin Man feels more comfortable investing in a small cluster of actively managed moderate and conservative allocation funds, so that the fund managers will theoretically and hopefully be able to steer their respective funds out of the troubled waters of a bear market.

Does any of this make sense?


Is this what the fund managers would strive to do or would they just maintain their set allocations? If you have a fund that will always be 60% stocks and 40% bonds, how is that going to protect you from a bear market?

I also use a few such funds, with the hope that some strategic allocation decisions by the fund manager might add to returns, but also with the idea that they will fearlessly buy stocks when/if they crash even if I am too fearful to do it myself with our other assets.

Do any of you think it is not too late in life for the Munchkin Man to switch to a passive indexing investing strategy?


I don't, but I think keeping your investing costs low and ensuring you are not risking too much on stocks is far more important than active vs. passive.
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Re: Current Thoughts On Investing

Postby Random Musings » Wed Mar 20, 2013 9:23 am

Perhaps MM is so risk adverse why the 20/80.

But at the least, some of that money going to the money market fund should be going into I-bonds (as long as you have fully funded your emergency account). At least you get some inflation protection. If the MM fund is paying greater rate than CD's in the 2 to 3 year duration right now, I can live with that. If it's a very low money market rate, should set up some CD ladder which gives you a better rate.

However, I would go passive with the investing strategy. Plus, you don't need one moderate and two conservative portfolio's - just find the one target date fund that gives you the asset allocation you want. Simplify that end and reduce your cost structure.

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Re: Current Thoughts On Investing

Postby HomerJ » Wed Mar 20, 2013 10:25 am

Munchkin Man wrote:If the Munchkin Man was 23 years old, knowing everything the Munchkin Man knows now, including the consequences of the Munchkin Man's many past investing mistakes, the Munchkin Man would probably embrace and practice a passive inexing strategy.

The Munchkin Man would probably be investing in the "Three Fund Portfolio" or something similar.

But the Munchkin Man is fearful of switching to a passive indexing strategy at the Munchkin Man's age.

The Munchkin Man would not be so fearful if the Munchkin Man was 23 years old again with an investing time horizon of at least 50 years.

But at 63 years of age, the Munchkin Man does not have 50 years to invest.

The Munchkin Man does not feel comfortable being defenseless in a bear market with the limited time horizon the Munchkin Man has left availbable to invest.

At the Munchkin Man's current age, the Munchkin Man feels more comfortable investing in a small cluster of actively managed moderate and conservative allocation funds, so that the fund managers will theoretically and hopefully be able to steer their respective funds out of the troubled waters of a bear market.


We just had a bear market, and most active funds didn't do any better than the index funds... You're paying extra fees each year, and you're very likely not getting any benefit of protection from a bear market.

And at 63, wasting money on fees matters just as much as it does at 23.
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Re: Current Thoughts On Investing

Postby magneto » Wed Mar 20, 2013 11:22 am

Welcome back MM.

We hold a mixture of active and indexed funds resulting from a slow adoption of the boglehead philosophy. The active funds when selected were on the basis of liking the investment style rather than chasing the previous year hot funds. At year end we compare the performances of all funds and find surprisingly that the active in most cases outperformed the passive. Of course this may well change, but providing charges are not too heavy, then moving only slowly to passive does not seem unreasonable. More important to save and watch AA.

Best Wishes
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Re: Current Thoughts On Investing

Postby Munchkin Man » Wed Mar 20, 2013 8:06 pm

nisiprius wrote:
Munchkin Man wrote:....The Munchkin Man allocates 50% of the Munchkin Man's monthly available savings and investing money into a money market savings account... [he] allocates the other 50% into a total of three mutual funds, divided equally, through their monthly automatic investing plans... One ... is classified as a "Moderate Allocation" fund... the other two mutual funds are classified as "Conservative Allocation" funds. All three of these funds are actively managed funds....

The Munchkin Man is 63 years old... [he] had to "start over" by saving and investing again from "ground zero" three years ago... [He] is fearful of switching to a passive indexing strategy at the Munchkin Man's age.
Without the names of the funds it's hard to see a clear picture, but I'm going to respect your reticence. Morningstar's "Moderate Allocation" means 50% to 70% stocks, and "Conservative Allocation" means 20% to 50% stocks. So I'm going to guess that overall your mutual fund holdings are perhaps 40% stocks. If you include your savings account, then 20% stocks.

Overall, your description of your situation makes me think that this is not a large investment holding and does not generate much living income, and that you might need to tap it at any time. If so, a conservative allocation seems prudent.

Samuel Butler wrote, "It is only on having actually lost money that one realises what an awful thing the loss of it is, and finds out how easily it is lost by those who venture out of the middle of the most beaten path." What worries me a little is your descriptions of previous investments--penny stocks, uranium, VICEX. All of these are way out of the most beaten path.

Munchkin Man, are your mutual funds nice, plain, bland, ordinary, general-purpose funds, with names like XYZ Balanced Fund or QRS Growth & Income Fund... and expense ratios that are under 1.00%? Or are they clever, interesting funds that express colorful ideas and are focussed on particular concepts, or market segments, or parts of the world?

I would not put too much weight on whether the funds are indexed or actively managed. John C. Bogle has said that the best course is often "Don't do something, just stand there." Bogle is not doctrinaire about indexing himself, and you would be hard-put to find him saying anything bad about the Wellington Fund for example (except for one period in its history).

If there's nothing offbeat about the funds you are holding right now, and if you are fearful of switching, don't do anything in a hurry.


Greetings nisiprius:

The Munchkin Man would like to thank you for the detailed comments and insights you have shared in regard to the Munchkin Man's current overall investing strategy.

One reason why the Munchkin Man did not originally list the Munchkin Man's mutual fund holdings at first is that the Munchkin Man did not want to come across as "pumping" them.

Since you have expressed a curiousity about the Munchkin Man's mutual fund holdings, the Munchkin Man will gladly list them below:

1) FPA Crescent Fund (FPACX)

2) The Permanent Portfolio Fund (PRPFX)

3) Vanguard Wellesley Income Fund (VWINX)

The Munchkin Man's lone "Moderate Allocation" Fund is the FPA Crescent Fund (FPACX).

The Munchkin Man likes the premise behind its "go anywhere" strategy.

On the other hand, the Munchkin Man is also aware that a "go anywhere" strategy can wind up ending up "anywhere" and not in a place where the Munchkin Man would like it to be.

It also got hammered pretty hard in 2008.

The Munchkin Man is also aware of its high expense ratio and its relatively high position in cash.

This is the fund that the Munchkin Man is most likely to "ditch" in favor of a more conservative fund with a lower expense ratio.

The Munchkin Man has no current reservations about owning and continuing to invest in the other two funds (PRPFX and VWINX) at this time.

The Munchkin Man would like to thank you for the comments and insights you have shared.

The Munchkin Man would also like to thank you for advising the Munchkin Man to not make any immediate changes in a hurry.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing

Postby Munchkin Man » Wed Mar 20, 2013 8:19 pm

RadAudit wrote:Welcome back, Munchkin Man

I understand that starting over at any age can be daunting. Starting over past middle age can be especially difficult.

I'd suggest that you run your portfolio through Morningstar's Instant X-Ray to see what asset allocation you really have. You may be able to roughly duplicate the asset allocation using a three (or four) low cost index fund portfolio, reduce expenses, and either maintain or increase portfolio income when comparing passive to active investing approaches. Might be worth a look.

However, going with what you are comfortable with is probably the best approach.

Good luck.


Greetings RadAudit:

The Munchkin Man would like to thank you for your very helpful and understanding comments.

The Munchkin Man will be sure to take your advice and examine the Munchkin Man's mutual fund portfolio through Morningstar's Instant X-Ray feature.

The Munchkin Man also agrees that adhering to a fund portfolio that is comfortable with the Munchkin Man's comfort level is probably the best approach.

For example:

The Vanguard Total Stock Market Index Fund (VTSMX) endured three consecutive years of losing returns from 2000 to 2002, inclusive.

This is the kind of thing that frightens the Munchkin Man.

This would not frighten the Munchkin Man so much if the Munchkin Man was beginning to invest in this fund at the age of 23.

But the Munchkin Man does not feel comfortable in starting to invest in this fund at the age of 63.

Thanks again for your comments.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing

Postby Munchkin Man » Wed Mar 20, 2013 8:35 pm

Random Musings wrote:Perhaps MM is so risk adverse why the 20/80.

But at the least, some of that money going to the money market fund should be going into I-bonds (as long as you have fully funded your emergency account). At least you get some inflation protection. If the MM fund is paying greater rate than CD's in the 2 to 3 year duration right now, I can live with that. If it's a very low money market rate, should set up some CD ladder which gives you a better rate.

However, I would go passive with the investing strategy. Plus, you don't need one moderate and two conservative portfolio's - just find the one target date fund that gives you the asset allocation you want. Simplify that end and reduce your cost structure.

RM


Greetings Random Musings:

The Munchkin Man would like to thank you for your comments and suggestions.

The Munchkin Man was about to transfer some of the Munchkin Man's "cash" money into I-Bonds about two years ago.

Did the Munchkin Man read correctly that the paper I-Bonds are no more and that they can only now be purchased electronically?

If this is true, then this is what dissuaded and discouraged the Munchkin Man from buying some I-Bonds.

The Munchkin Man was looking forward to owning some paper I-Bonds and was very disappointed to learn that they were no longer available.

Perhaps, the Munchkin Man's concerns about owning some electronic I-Bonds are unfounded.

The Munchkin Man has had some difficulty in adjusting to and feeling fully comfortable with the electronic age.

The Munchkin Man will also take your advice and look into starting a CD ladder.

You also suggested that the Munchkin Man consider a target date fund.

The Munchkin Man has considered this idea before.

However, the Munchkin Man has read mixed reviews on target date funds.

As a result, the Munchkin Man decided not to consider them any further.

However, the Munchkin Man will gladly look into target date mutual funds again with an open mind.

Based upon everything the Munchkin Man has disclosed so far, is there a particular target date mutual fund which you would recommend for the Munchkin Man?

In closing, the Munchkin Man would like to thank you once again for your comments and suggestions.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby LadyGeek » Wed Mar 20, 2013 8:38 pm

This thread is now in the Investing - Help with Personal Investments forum, as the OP is asking about his portfolio.

I also retitled the thread for more focus. The OP can change the thread title by editing the Subject line in Post #1.
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Re: Current Thoughts On Investing

Postby Munchkin Man » Wed Mar 20, 2013 8:51 pm

YDNAL wrote:
Munchkin Man wrote:But the Munchkin Man is fearful of switching to a passive indexing strategy at the Munchkin Man's age.

The Munchkin Man would not be so fearful if the Munchkin Man was 23 years old again with an investing time horizon of at least 50 years.

But at 63 years of age, the Munchkin Man does not have 50 years to invest.

The Munchkin Man does not feel comfortable being defenseless in a bear market with the limited time horizon the Munchkin Man has left availbable to invest.

At the Munchkin Man's current age, the Munchkin Man feels more comfortable investing in a small cluster of actively managed moderate and conservative allocation funds, so that the fund managers will theoretically and hopefully be able to steer their respective funds out of the troubled waters of a bear market.

Does any of this make sense?

It only makes sense if Munchkin Man feels at ease and sleeps better at night by having active managers help the Munchkin Man in this regard; so then, it is what the Munchkin Man should do.

The Munchkin Man's active funds (for discussion purposes, Wellington - moderate, Wellesley - conservative :D ) seem to provide the peace of mind the Munchkin Man is looking for. That said, Munchkin Man is relying on fund managers to do right by him, but the Munchkin Man should know - and I'm pretty sure the Munchkin Man knows - that managers can lay an egg at any time. For instance, in case the Munchkin Man didn't know, even legendary Bond King Bill Gross (and his possy including Mohamed A. El-Erian) laid one recently and others may do the same in the troubled waters of a bear market.

Good luck Munchkin Man!


Greetings YDNAL:

The Munchkin Man would like to thank you for your comments and good luck wishes.

You are correct when you say that the Munchkin Man would sleep better at night with active fund managers in charge of the Munchkin Man's moderate and conservative allocation funds, at least at this point in time.

The Munchkin Man is also well aware that a fund manager can "leg an egg" at any time.

For example, the fund manager of the Munchkin Man's FPA Crescent Fund (FPACX) led its investors to a loss of (-20.55%) in 2008.

The Munchkin Man believes this is more than a moderate allocation should lose during a single year, even during the bear market of 2008.

On the other hand, the Munchkin Man is impressed with the fund manager's long term returns with this fund.

A total of 17 "up" years and 2 "down" years looks good to the Munchkin Man, in spite of its high expense ratio.

But as the Munchkin Man has stated before, this is the fund that the Munchkin Man is most likely to "ditch", in the event that the Munchkin Man decides to replace it with a more conservative and less expensive fund.

The Munchkin Man would like to thank you once again for your understanding comments.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing

Postby Munchkin Man » Wed Mar 20, 2013 8:58 pm

magneto wrote:Welcome back MM.

We hold a mixture of active and indexed funds resulting from a slow adoption of the boglehead philosophy. The active funds when selected were on the basis of liking the investment style rather than chasing the previous year hot funds. At year end we compare the performances of all funds and find surprisingly that the active in most cases outperformed the passive. Of course this may well change, but providing charges are not too heavy, then moving only slowly to passive does not seem unreasonable. More important to save and watch AA.

Best Wishes


Greetings magneto:

The Munchkin Man would like to thank you for your comments.

Chasing "hot funds", and too many of them at the same time, was one of the investing mistakes the Munchkin Man made years ago.

If the Munchkin Man does eventually move to a predominantly passive indexing strategy, it will be a gradual change that the Munchkin Man will make slowly and after some further study.

The Munchkin Man will definitely follow your advice and pay close attention to a strong emphasis upon saving and asset allocation.

Thanks again for your comments.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing

Postby Munchkin Man » Wed Mar 20, 2013 9:10 pm

bottlecap wrote:I don't think the Munchkin Man's strategy to avoid index funds makes sense because active funds aren't better at avoiding bear markets.

However, if MM feels safer having someone else do the investing for him and this will prevent him from selling in a panic, then perhaps that alone is reason enough to stick with an active strategy.

Good luck, Munchkin Man.

JT


Greetings bottlecap:

The Munchkin Man would like to thank you for your comments and good luck wishes.

The Munchkin Man has read enough research to be convinced that the aggregate long term returns of index funds fare better than the aggregate long term returns of actively managed funds.

What the Munchkin Man is unsure about is whether the same thing holds true for a short term investing horizon of 10 to 20 years at the Munchkin Man's "old age."

This is why the Munchkin Man feels more comfortable with actively managed conservative allocation funds at this time, especially those with a decent and proven performance track record.

The Munchkin Man believes that the Munchkin Man's personal comfort level is probably more important at this time than making decisions based solely upon the active vs. passive issue.

Thanks again for your comments and well wishes.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby Munchkin Man » Sat Mar 23, 2013 6:23 am

Greetings To All:

The Munchkin Man would like to thank each and every one of you who have shared their thoughts, ideas, and suggestions with the Munchkin Man and the Munchkin Man's portfolio and current investing strategy.

The Munchkin Man will be devoting a lot of personal thought and research on the ideas and suggestions you have suggested.

This will take time.

The following will describe what the Munchkin Man has decided to do in the "here and now."

In regard to the "three fund portfolio" the Munchkin Man described, the Munchkin Man has decided to "stay the course" for the time being.

The Munchkin Man regards PRPFX and VWINX as "keepers" for the time being.

The fund the Munchkin Man feels that the Munchkin Man is most likely to sell is FPACX.

If the Munchkin Man sells this fund, the Munchkin Man's current thought is to replace it with one of Vanguard's target retirement funds.

But unless the Munchkin Man is persuaded and convinced to do otherwise, the Munchkin Man will probably continue to invest equal amounts of money on a monthly basis into each of the funds for at least until the end of the year.

This should give the Munchkin Man plenty of time to research and finally decide what to do with the "equity" portion of the Munchkin Man's portfolio

In regard to the "cash" portion of the Munchkin Man's portfolio, the Munchkin Man has decided to start investigating the following:

1) Using part of this money to start purchasing some electronic I-Bonds.

2) Using part of this money to start a CD ladder.

The Munchkin Man deeply regrets that paper I-Bonds are no longer available for purchase.

The Munchkin Man would much rather own an I-Bond that the Munchkin Man can hold in the Munchkin Man's hand.

The Munchkin Man has not yet developed a feeling of trust with the ownership of an electronic I-Bond.

Obviously, the Munchkin Man needs to work through this.

If this is the only way the Munchkin Man will ever be able to own an I-Bond, then this is what the Munchkin Man will have to do.

With the exception of the Munchkin Man's one and only penny stock, the Munchkin Man believes that the Munchkin Man's current portfolio and investing strategy has taken of a decisively conservative tilt during the past few years, much more so than ever before in the Munchkin Man's investing life.

In closing, the Munchkin Man would like to thank you all for the thoughts, ideas, and suggestions you have shared with the Munchkin Man.

Good luck to all.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby jeffyscott » Sat Mar 23, 2013 8:41 am

Munchkin Man wrote:The Munchkin Man would much rather own an I-Bond that the Munchkin Man can hold in the Munchkin Man's hand.

The Munchkin Man has not yet developed a feeling of trust with the ownership of an electronic I-Bond.

Obviously, the Munchkin Man needs to work through this.

If this is the only way the Munchkin Man will ever be able to own an I-Bond, then this is what the Munchkin Man will have to do.


Think about your mutual fund holdings, none of them are in the form of paper certificates, your holdings are in electronic form (the only paper is an occasional statement). Then at the next level the fund itself has all its holdings in electronic form with no paper certificates.

(I do think the government should at least provide the option to get an annual paper statement for TD accounts)

If you truly have VWINX, you should see if you can arrange things such that you would have at least $50,000 in the fund and qualify for admiral shares, VWIAX.
press on, regardless - John C. Bogle
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby Default User BR » Sat Mar 23, 2013 9:02 pm

The Munchkin Man deeply regrets that paper I-Bonds are no longer available for purchase.

They are still available by way of tax refund. If you haven't filed your taxes yet this year, you could get some that way. I don't recall if that program will be active for 2013.


Brian
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby Munchkin Man » Mon Mar 25, 2013 7:14 am

jeffyscott wrote:
Munchkin Man wrote:The Munchkin Man would much rather own an I-Bond that the Munchkin Man can hold in the Munchkin Man's hand.

The Munchkin Man has not yet developed a feeling of trust with the ownership of an electronic I-Bond.

Obviously, the Munchkin Man needs to work through this.

If this is the only way the Munchkin Man will ever be able to own an I-Bond, then this is what the Munchkin Man will have to do.


Think about your mutual fund holdings, none of them are in the form of paper certificates, your holdings are in electronic form (the only paper is an occasional statement). Then at the next level the fund itself has all its holdings in electronic form with no paper certificates.

(I do think the government should at least provide the option to get an annual paper statement for TD accounts)

If you truly have VWINX, you should see if you can arrange things such that you would have at least $50,000 in the fund and qualify for admiral shares, VWIAX.


Greetings jeffyscott:

The Munchkin Man would like to thank you for your comments and insights in regard to the Munchkin Man's electronic certificates for the Munchkin Man's mutual fund holdings.

The Munchkin Man had never really thought of the Munchkin Man's mutual fund holdings this way before.

This is probably because the Munchkin Man receives a paper statement in the mail each month for each of the Munchkin Man's mutual funds.

The Munchkin Man also agrees that Treasury Direct should provide annual paper statements for their account holders.

The Munchkin Man would also like to thank you for your tip about qualifying for the admiralty shares of VWIAX.

The Munchkin Man's account with VWINX is not quite up to the $50,000 mark yet.

The Munchkin Man will be sure to consider VWIAX when it reaches this level.

Thanks again for your comments and insights.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby Munchkin Man » Mon Mar 25, 2013 7:22 am

Default User BR wrote:
The Munchkin Man deeply regrets that paper I-Bonds are no longer available for purchase.

They are still available by way of tax refund. If you haven't filed your taxes yet this year, you could get some that way. I don't recall if that program will be active for 2013.


Brian


Greetings Brian:

The Munchkin Man would like to thank you for your comments above and your very helpful suggestion.

Unfortunately, the Munchkin Man has already filed the Munchkin Man's tax returns this year.

The Munchkin Man will not receive a refund.

Instead, the Munchkin Man owed money this year.

This is because the Munchkin Man made a very stupid mistake with the Munchkin Man's stock trading last year.

The Munchkin Man forgot all about the wash sale rule.

This is a mistake that the Munchkin Man will never make again.

One lesson is sufficient.

Maybe the Munchkin Man will qualify for the purchase of an I-Bond with a tax refund next year if this program is still active next year.

Thanks again for your very helpful suggestion.

Good luck to you.

Best Wishes,

Munchkin Man
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Re: Current Thoughts On Investing [Help with Portfolio]

Postby Default User BR » Mon Mar 25, 2013 1:30 pm

Munchkin Man wrote:Maybe the Munchkin Man will qualify for the purchase of an I-Bond with a tax refund next year if this program is still active next year.

Some people who have participated in this in the past have made estimated tax payments large enough to ensure the maximum I-bond refund. Something to keep in mind.


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