Gone fishin portfolio/ reinvesting or not divs & cap gai

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Gone fishin portfolio/ reinvesting or not divs & cap gai

Postby 1johanna » Thu Jul 23, 2009 11:07 am

This is a double question:

Is anyone familiar with Alex Green's Gone Fishin Portfolio and, if so, what do you think of it?

I can't seem to get clear on whether or not to reinvest dividends and capital gains?

All opinions gratefully appreciated.

1Johanna
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Postby SteveB3005 » Thu Jul 23, 2009 11:26 am

The Gone Fishin’ Portfolio

Vanguard Total Stock Market Index (VTSMX) - 15%
Vanguard Small-Cap Index (NAESX) - 15%
Vanguard European Stock Index (VEURX) - 10%
Vanguard Pacific Stock Index (VPACX) - 10%
Vanguard Emerging Markets Index (VEIEX) - 10%
Vanguard Short-term Bond Index (VFSTX) - 10%
Vanguard High-Yield Corporates Fund (VWEHX) - 10%
Vanguard Inflation-Protected Securities Fund (VIPSX) - 10%
Vanguard REIT Index (VGSIX) - 5%
Vanguard Precious Metals Fund (VGPMX) - 5%


Yeah it will work, but so will hundreds of other combinations far less complex, no new ground here. Keep costs low, globally diversify, and choose a fixed income to equity ratio you will not bail out of in a downturn.

Save the 20 bucks on the book, better or as good advice can be had here.
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Postby dbr » Thu Jul 23, 2009 11:32 am

The asset allocation is about 20% in less risky and 80% in risky instruments. What guidance was given regarding for whom this would be appropriate?
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Gone fishin portfolio/ reinvesting or not divs & cap gai

Postby YDNAL » Thu Jul 23, 2009 11:42 am

1johanna wrote:Is anyone familiar with Alex Green's Gone Fishin Portfolio and, if so, what do you think of it?
15% VTSMX
15% NAESX
10% VEIEX
10% VEURX
10% VPACX
10% VWEHX
10% VFSTX
10% VIPSX
5% VGSIX
5% VGPMX

No rocket science - just pick the allocation. Allocates to various asset classes with overweights in Small Caps (from TSM), even-split of Foreign Large (including Emerging), High-Yield+Short Corporates+Tips for Fixed, REITs, and Precious Metals & Mining.

1johanna wrote:I can't seem to get clear on whether or not to reinvest dividends and capital gains?
This depends on your individual circumstances.
- types of accounts (taxable vs. tax-advantaged)
- are you retired and withdrawing.
- etc. etc.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
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Re: Gone fishin portfolio/ reinvesting or not divs & cap

Postby gw » Thu Jul 23, 2009 12:18 pm

1johanna wrote:I can't seem to get clear on whether or not to reinvest dividends and capital gains?


Shouldn't you be fishing?
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Postby Ziggy75 » Fri Jul 24, 2009 11:01 am

Reinvest dividends & capital gains...question.

If it was me.

I would reinvest if it is a tax-advantaged account.

I also reinvest with taxable, because I am lazy and just use the "average share".

If your investments are large and your tax bracket is high then I would consider using the tax lot type system; and not reinvest the dividends and cap. gains. You can send the disbursements to your "high-yield" savings account.
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Re: Gone fishin portfolio/ reinvesting or not divs & cap

Postby retiredjg » Fri Jul 24, 2009 11:45 am

1johanna wrote:Is anyone familiar with Alex Green's Gone Fishin Portfolio and, if so, what do you think of it?

Well, it has all the right stuff, but seems unnecessarily complicated to me. And there is no indication of the location (taxable or tax-advantaged) of these funds. So it could be a pretty good portfolio or a terrible one.

I can't seem to get clear on whether or not to reinvest dividends and capital gains?

It depends on where things are located, whether you are accumulating or using the portfolio, your personal preferences, etc.
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Re: Gone fishin portfolio/ reinvesting or not divs & cap

Postby dbr » Fri Jul 24, 2009 12:00 pm

1johanna wrote:I can't seem to get clear on whether or not to reinvest dividends and capital gains?

1Johanna


There isn't any "whether or not" in the sense of clear guidance that you or anyone else in general should or should not do. There are lots and lots of little tiny differences about what will happen in your investments depending on one choice or another in one place or another in your accounts.

Can you frame a specific question regarding something specific that is unclear?
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My previous question

Postby 1johanna » Fri Jul 24, 2009 2:18 pm

Thank you very much, everybody.

To clarify: I am retired.

I reinvest all distributions in my tax-advantaged accounts, but my question referred to my taxable accounts. So far, I've been reinvesting everywhere because, after selling my Vanguard Energy fund position when it starting going down, I had a lot of cash and had been using that for living expenses over the past 18 months and not touching anything else. I now feel that I don't need all that cash and have been slowly investing it as per the "gone fishin portfolio" (in his book he does clarify which positions go where). I guess I've answered my own question: use distributions from taxable accounts for living expenses (as far as they will go) rather than selling regular amounts from my Vanguard funds as I had been doing before the meltdown began.

Am I missing anything? Again, all opinions gratefully accepted.

Johanna
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Re: My previous question

Postby YDNAL » Fri Jul 24, 2009 2:51 pm

1johanna wrote:Thank you very much, everybody.

To clarify: I am retired.

I reinvest all distributions in my tax-advantaged accounts, but my question referred to my taxable accounts.
1johanna,

Well, with the above details, I'd say NO reinvestment in taxable to avoid one million tiny tax-lots. You are likely to hear that it is no big deal to track using this/that software..... not for YDNAL. :)
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Postby bnw2001 » Fri Jul 24, 2009 2:55 pm

If you are retired then this portfolio looks MUCH too risky for you. I would radically shift the allocations towards fixed income.
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Re: My previous question

Postby retiredjg » Fri Jul 24, 2009 2:57 pm

1johanna wrote:...use distributions from taxable accounts for living expenses (as far as they will go) rather than selling regular amounts from my Vanguard funds as I had been doing before the meltdown began.

Makes sense to me. You are going to pay taxes on them, so you might as well be spending them.

On the other hand, if you held only tax-efficient index funds in your taxable accounts, you wouldn't have much in the way of distributions....right?
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Postby retiredjg » Fri Jul 24, 2009 3:00 pm

bnw2001 wrote:If you are retired then this portfolio looks MUCH too risky for you. I would radically shift the allocations towards fixed income.

Yeah, there is that part. I counted up 70% stocks/30% bonds. Too risky for retirement in my opinion too.
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Postby DriftingDudeSC » Fri Jul 24, 2009 6:55 pm

IMHO for retirement, it should be reverse......30% stocks and 70% bonds.
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