Bogleheads.org

Gauntlet

Since we are currently in a bull market that has lasted for 9 years, I suppose we will have more and more threads and posts of people that are 100% stocks. I think it is a bad idea. As an aside, I work with several people that have never lived through a bear market market and are bragging about thei...

Gauntlet

nisiprius, Thank you for the amazing clarity and detailed explanation of the hidden facts! Always a pleasure to lean from your posts! Happy New Year to you, and all! With the stock market rise, the allocations made couple of years ago are now out-of-whack. I wonder whether members are now making re...

Gauntlet

Now the question, do you account for taxes at all in the relative valuation of your taxable and tax-favored locations? That is to say, if you are systematically locating one asset (stocks) in taxable and another (bonds) in tax-favored, is your AA really what you think it is? This is the reason I ha...

Gauntlet

OP, in my opinion, if you did not experience the bear of 2009, which I believe you are alluding to, then I don't believe that you should be 100% stocks. We have had a 9-year-bull market which makes it easy to think that the party will last forever. I am about 20 years from retirement and I have 65% ...

Gauntlet

Larry, I would like to add another huge thank you. The academic approach to investing you brought to this forum was always informative. You changed the way I thought about fixed-income for the better. You will be missed but fortunately for me, I read your books.

Gauntlet

I guess I'm going against the grain a little here but after the 8-year-bull market, it turns out I'm making great progress on my retirement number. The result is that I don't need to take as much risk to reach my retirement goal and I will therefore increase my bond allocation this year. I have a pl...

Gauntlet

In my opinion, you have to really love savings bonds to stick with them. I had a treasury direct account years ago and it just couldn't keep up with my other accounts (TSP etc.) and became a smaller and smaller percentage of my overall portfolio. When my savings bonds holding became less than 3% of ...

Gauntlet

One more opinion here. I agree that it doesn't matter much. Personally, I like VBILX. Mainly, because I don't want to own Mortgage-backed or long-term bonds. I like to keep my fixed-income as simple as possible and I don't completely understand how asset-backed bonds work. How they are pooled togeth...

Gauntlet

I think you are over thinking it. Personally, if I wanted my TSP allocation to be 15% I fund, 15% S fund, 25% G fund, and 45% C fund than I would contribute (add new money) using the same percentages: 15% I fund, 15% S fund, 25% G fund, and 45% C fund. This would result in less need to re balance.

Gauntlet

The G fund is a bond fund and in my opinion should be considered a bond in a portfolio. According to TSP.gov, the G Fund invests exclusively in a nonmarketable short-term U.S. Treasury security that is specially issued to the TSP. The earnings consist entirely of interest income on the security. Sho...

Gauntlet

Well, if the stock market keeps going up, I'll be purchasing bonds this year to get my AA back on track

Gauntlet

Just one guy's opinion, but if you really don't plan to work anymore by age 40, I would consider going even more conservative until you reach an age where you can draw on SS. At 50/50, if your portfolio is your only source of income, and If the stock market goes down 50% while you are in your 40s, I...

Gauntlet

I have about a 1/3 of my portfolio in fixed income; split 50/50 in 2 bond funds.I own these funds because I want my fixed income to provide safety. Vanguard Total Bond: Like others have said, it does the job. I don't like the mortgage back securities in it but in the 15 years I have owned the fund i...

Gauntlet

When I started investing I made well under 100k (I now make more). My approach to getting to the infamous $1 million mark was extremely boring but it can work for almost anyone. 1) Get a college degree. 2) Marry someone with a college degree 3) Work very hard to get pay raises 4) Save as much as pos...

Gauntlet

Here is why I decided not to tilt. If you don't go all in on the tilt, it doesn't make much difference to your overall portfolio's return. For example, take a 60% stocks/40% bond portfolio. Say an investor tilts 1/3 of her stock allocation to value. That means a total of 20% of her portfolio is tilt...

Gauntlet

Do passive emerging markets bond funds beat the actively managed ones? For example, VWOB (Passive) vs EMCB (Active). Thank you. ajacobs6: I believe that Nobel Laureate, William Sharpe's arithmetic, applies to bond funds as well as stock funds. He wrote: Properly measured, the average actively manag...

Gauntlet

Timboktoo, I have had a similar debate with myself over the last 5 years or so. My main concern with the TBM is the large amount of mortgage-backed securities (MBS) in the fund/index. For this reason, each year, I think about moving to the Vanguard intermediate-term index fund. However, each year I ...

Gauntlet

And btw I would never buy TBM either!!! why would I want to own bonds with the optionality of mortgages, that always works in wrong direction at wrong time? And I also personally don't want in general corporate credit risks with their optionality as well (as well as credit risk which has been poorl...

Gauntlet

I think I'll stick with my current allocation of 1/3 international and 2/3 domestic. With zero international bonds. Having said that, I do think increasing the international bonds allocation makes sense. It always seemed like a waste of time having such a small percentage of the target retirement fu...

Gauntlet

OP, I'm not sure about your life situation but here is some food for thought. I have a 4-fund portfolio. 6-7 years ago, I wanted it to be more complicated because I read more and thought about it more. Now, I have 2 kids, and I am very happy with my simple 4-fund portfolio because I have almost no t...

Gauntlet

I rebalance once per year. I have stuck with this strategy for 15 years. I'm anal. And for one day a year at least, my allocation perfectly matches my AA:)

Gauntlet

Stonebr wrote:No. I don't fuss with this stuff until December.

+1

Gauntlet

I think international diversification makes sense for several reasons but my opinion is not nearly as important as the numerous experts the bogleheads look up to that believe international diversification is important. The experts include Swedroe, Bernstein, Ferri, the Vanguard Group, among others. ...

Gauntlet

I like Savings Bonds but I sold all of my Savings Bonds last year and don't plan on buying anymore. For me they kept becoming a smaller and smaller portion of my portfolio. Once they got down to 3% of my portfolio, I made the decision to get rid of them. Maybe a lame reason? It also had the added be...

Gauntlet

OP, more opinions for you. 1) you need to look at your TSP in combination with the rest of your portfolio. 2) I too think that everyone should hold some bonds and the G fund is a great option. It has just about zero interest rate and default risk. I have been investing in the TSP for 15 years and I ...

Gauntlet

I like the Vanguard moderate-age based fund. When my children are 16 it turns very conservative. You probably can't go wrong with any of Vanguard's age-based options.

Gauntlet

I use a savings account and some CDs. In my opinion, if you want to have some safe money that you can get quickly for an emergency, keep things simple. In the long run it probably won't make much difference to your overall portfolio because your emergency fund will become a smaller and smaller part ...

Gauntlet

The rational solution, for me, is to admit that I can't guess future returns and tax law changes. My solution simplifies rebalancing and doesn't require any calculation to tax-adjust my asset allocation. I use a mirrored asset allocation across accounts. It is NOT a behavioral mistake; it is a logi...

Gauntlet

OP, whether you put your emergency fund money in an intermediate fund, Savings Bonds, or in a Savings account it is not going to create much wealth or make much difference to your portfolio long term. If you are the type of person that likes the idea of a rainy day fund, I say put it in a very safe ...

Gauntlet

I have seen a couple threads on this. I can't see why someone using prime and paying $80 a year would instantly drop it for and extra 20 or 40 bucks a year. I mean this equals a couple trips to Starbucks. I consider myself to be pretty cheap but I can't for the life of me see what the fuss is about.

Gauntlet

1) List the bond funds, individual bonds, CD's, etc. that you invest in Total Bond and G Fund 2) In which account TSP, 401k, IRA, 529 3) Allocation as a percentage of Fixed Income about 50/50 4) Allocation to bonds overall (i.e. age in bonds, etc.) about 30% 5) Any other plans such as adding more bo...

Gauntlet

I'm not sure which is better. For years I have thought about changing my total bond to Vanguard's intermediate-term bond index fund. Mainly because my plan calls for intermediate-term bonds and the intermediate-term bond index fund "feels" like the more accurate choice. I still have not made the cha...

Gauntlet

All the reasons given so far to hold bonds are great but here is another reason to hold bonds that I think is very practical. It is important to hold some bonds, even at a young age, if for no other reason than to learn how they work. There is no better way to learn how an asset works than to own it...

Gauntlet

2019.12

Gauntlet

Personally, I think the short answer is yes. It is not tied to inflation but here is the objective of the fund from TSP.gov: "The G Fund's investment objective is to produce a rate of return that is higher than inflation while avoiding exposure to credit (default) risk and market price fluctuations....

Gauntlet

Julieta wrote:It seems that cash is a safer investment these days than a bond index fund.

Also, a good argument could be made that cash as an asset class is always "safer" (less risk) than bonds as an asset class. These days are no different.

Gauntlet

Wow. This is an emotional thread. I'll make my opinion short and sweet. Kids are amazing. If you are fortunate enough to have the opportunity to have some, you should.

Gauntlet

OP, I am in a similar situation. I decided to put most if the taxable money towards our mortgage and a small amount in the taxable account. No real good reason except I enjoy investing but also love the idea of being debt free. Also, it is nice to have some liquid assets outside the retirement accou...

Gauntlet

I'm in the game! Sitting pretty at 21 with less than a 1% chance of winning

Gauntlet

Note: longer term rates have already gone up, short term rates have yet to go up. Beware market timing. +1 To jump on this market timing point, bond funds have already gone down. Some long-term funds are down double digits YTD. Granted, they could easily go down further but much of the damage could...

Gauntlet

At the end of the day, for us bonds are for safety and income. The Intermediate Term TIPS fund is paying next to nothing and has dropped over 9% this year. We just can not pull the trigger on this fund and get back into it. There is more than one road to Rome. This is true but also a little mislead...

Gauntlet

More food for thought. If an investor's human capital and house are both in her home country, it might make some sense to diversify some net worth outside the home country. One way to do this is through international stocks. In other words, it helps avoid having one's entire net worth (human capital...

Gauntlet

Similar to other responses, its means that I plan to hold stocks and bonds for the rest of my life. I started investing at 22, so I it could mean 60-70 years.

Gauntlet

I just wanted to add how quickly and to what extent things have already changed in the bond market. For example, the yield on the 10yr Treasury is starting to push 3%. I believe it has already increased over 150 basis points (doubled!) in the last 12 months. In other words, if you have not changed y...

Gauntlet

I Bonds are about 6% of my bonds but only 2% of my entire portfolio which is why I have decided to stop buying them. Over the years, my percentage of savings bonds as it relates to my total portfolio has gotten smaller and smaller. I think they are a fine investment but the more money I put into my ...

Gauntlet

I don't know what was/is in your taxable but why not total stock market or total international market and get even more diversification. It sounds like you don't know what BRK is even comprised of. I don't want to come off mean but I would not recommend investing over 300k in a company that you don'...

Gauntlet

I think the best way to calm your nerves is to go to vanguard.com and check out the YTD performance of the total bond fund. After all the "panic" and "craziness" the fund is down 2.3% YTD. Yes, that is it, -2.3%.

Gauntlet

+1 for shooting for the low-end expected cost of college in the 529s. While 529s are nice, they do have many rules and penalties if not spent on allowable college expenses. I have decided to use a combination of 529s and taxable to pay for my kids' college. This way I'll make sure to drain the 529 a...

Gauntlet

+1 for paying of the debt (unless Roth is an option than I would do that). It is a risk free rate of return and a good habit to get into. In my opinion, limiting your debt simplifies your finances and if you ever have a time in your life when you are under financial stress (loss of job), the less ma...

Gauntlet

I actually think that the majority of citizens would be better off putting all of their savings in CDs and Savings Bonds rather than stocks and other bonds. And I'm not saying this because I think people are not smart enough to learn how to invest but I think most don't take the time and end up maki...

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