Roll call Warren Buffet 90/10 portfolio

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rattlenap
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Roll call Warren Buffet 90/10 portfolio

Postby rattlenap » Wed May 25, 2016 6:26 pm

Just curios if any of you are doing the Warren Buffet 90/10 S&P 500 & Short-term Government Bond portfolio or at least something equivalent. For myself, I do the Vanguard 500 for the stock section, but for the other part I just do High Yield Savings Account/iBonds/No Penalty CD's. What about yourselves?
Last edited by rattlenap on Wed May 25, 2016 11:03 pm, edited 1 time in total.

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joe8d
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Re: Role call Warren Buffet 90/10 portfolio

Postby joe8d » Wed May 25, 2016 7:41 pm

You wouldn't go wrong with that setup.
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JoMoney
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Re: Role call Warren Buffet 90/10 portfolio

Postby JoMoney » Wed May 25, 2016 7:53 pm

Count me in since 2008.
Not really 90/10 though, more like roughly 18 months of living expenses in short-term bonds (which currently represents a lot less than 10% of my portfolio). I also have other insurance, pension, severance, and some other fixed income like security that I don't count as my investment portfolio but I do count when it comes to how much i want to keep in cash and still sleep well at night. I imagine as I get older, or start thinking about doing something other than working for a paycheck I'll probably move more towards 90/10 or even a bit more conservative then that. I prefer to think of it more along terms of how much I have in living expenses covered than in percentages of bonds in the investment portfolio though.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

boglephreak
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Re: Role call Warren Buffet 90/10 portfolio

Postby boglephreak » Wed May 25, 2016 8:32 pm

buffet's net worth is 63.3B according to Forbes in 2015. 10% of that is 6.3B--something most people could easily live off of if the 90% disappears. i dont think you should consider using it without considering that context.

that being said, i have a 90/10 split, but i have added int'l for more diversification; i am young and make good money so can stand the loss of most of my retirement; and my wife also makes good money. if those factors didnt exist, i would think hard about my AA. i dont think the int'l is necessary, but i speculate it will work best for me in the long run given the low int'l, highish S&P.

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Re: Role call Warren Buffet 90/10 portfolio

Postby APB » Wed May 25, 2016 8:39 pm

I don't, as I feel that I can structure a portfolio with better expected risk / return with international stocks included. I more closely follow Burton Malkiel's present recommendations for very aggressive investors.

But, consider that Buffett's target audience is the entire investment public, not just BHs who are already "sold" on indexing. Functionally, the Buffett portfolio is totally sufficient. It is also incredibly simple for complete newcomers to understand, which is a huge benefit. It is also still good enough to outperform the vast majority of active managers over the long term, net of fees.

Buffett's goal is for everyone to realize:

"Wow, I could have just bought the S&P 500 (plus a little bonds) and done so much better! :oops: Now I'll do that in the future and not be swindled by 'advisors' and active managers. :moneybag"

That goal is dramatically diminished as portfolio complexity increases beyond "2nd grader" simplicity. I'm positive Buffett knows that a little international diversification helps, and that Vanguard Total Stock Market is an ever so slightly more optimal holding than the S&P 500.
My posts represent my own opinion and do not constitute financial advice. I am simply a hobbyist. :)

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Re: Role call Warren Buffet 90/10 portfolio

Postby stemikger » Wed May 25, 2016 9:42 pm

I'm not, but I have do have a two fund portfolio which includes the Vanguard Institutional Index (S&P) and the Blackrock Total Bond Index. However, I'm a little too chicken to be 90/10 at 51, so I decided to go 65/35. If I was younger, I would probably have done it.
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whodidntante
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Re: Role call Warren Buffet 90/10 portfolio

Postby whodidntante » Wed May 25, 2016 9:49 pm

Why would you want that much in bonds? :mrgreen:

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Re: Role call Warren Buffet 90/10 portfolio

Postby Alchemist » Wed May 25, 2016 9:51 pm

You can count me in as well.

Roth IRA: 100% FUSVX (Fidelity S&P 500 Fund)

Roth TSP: 100% C Fund (S&P 500 equivalent)

Taxable: 100% VTSAX (TSM)

Emergency fund: 12 months expenses in a high yield savings account, currently about 12% of my portfolio.


I'm 29 and the only changes I have in mind is to add to the G fund in my TSP as the rest of my portfolio grows to keep 10% "safe". The simplicity of this approach is the key, my 12 month emergency fund is my SWAN factor. A big cash security blanket to snuggle under. Everything else is one account, one fund. No tinkering, no rebalancing. Simplicity at its finest.

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Re: Role call Warren Buffet 90/10 portfolio

Postby Dandy » Wed May 25, 2016 9:56 pm

I believe that was Warren's instructions on how his wife's portfolio should be constructed upon his death. Don't know that he recommends the 90/10 for others and if he does he shouldn't give that advice so casually. I'm sure he will leave his wife a nice amount and she can afford that level of risk at her age --don't see her selling pencils on the corner if the market plunges. Not likely to be the case for most others.

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Re: Role call Warren Buffet 90/10 portfolio

Postby rattlenap » Wed May 25, 2016 9:59 pm

JoMoney wrote:Count me in since 2008.
Not really 90/10 though, more like roughly 18 months of living expenses in short-term bonds (which currently represents a lot less than 10% of my portfolio). I also have other insurance, pension, severance, and some other fixed income like security that I don't count as my investment portfolio but I do count when it comes to how much i want to keep in cash and still sleep well at night. I imagine as I get older, or start thinking about doing something other than working for a paycheck I'll probably move more towards 90/10 or even a bit more conservative then that. I prefer to think of it more along terms of how much I have in living expenses covered than in percentages of bonds in the investment portfolio though.


What short-term bond fund(s) do you use?

rattlenap
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Re: Role call Warren Buffet 90/10 portfolio

Postby rattlenap » Wed May 25, 2016 10:01 pm

Alchemist wrote:You can count me in as well.

Roth IRA: 100% FUSVX (Fidelity S&P 500 Fund)

Roth TSP: 100% C Fund (S&P 500 equivalent)

Taxable: 100% VTSAX (TSM)

Emergency fund: 12 months expenses in a high yield savings account, currently about 12% of my portfolio.


I'm 29 and the only changes I have in mind is to add to the G fund in my TSP as the rest of my portfolio grows to keep 10% "safe". The simplicity of this approach is the key, my 12 month emergency fund is my SWAN factor. A big cash security blanket to snuggle under. Everything else is one account, one fund. No tinkering, no rebalancing. Simplicity at its finest.


Why do you use the TSM for your Taxable? Is it more tax efficient than the Vanguard 500?

rattlenap
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Re: Role call Warren Buffet 90/10 portfolio

Postby rattlenap » Wed May 25, 2016 10:04 pm

stemikger wrote:I'm not, but I have do have a two fund portfolio which includes the Vanguard Institutional Index (S&P) and the Blackrock Total Bond Index. However, I'm a little too chicken to be 90/10 at 51, so I decided to go 65/35. If I was younger, I would probably have done it.

I hear you! I am 40 and will be 90% in the S&P 500 until I turn 45 at which point I will switch that 90% to a 75/25 S&P/TBM and then switch 5% more every 5 years thereafter until I am 50/50 when I retire at 65. That is of course if the markets don't crash by that point.

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Taylor Larimore
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Warren Buffet 90/10 portfolio not for most of us

Postby Taylor Larimore » Wed May 25, 2016 10:05 pm

Rattlenap:

Welcome to the Bogleheads Forum!
rattlenap wrote:Just curious if any of you are doing the Warren Buffet 90/10 S&P 500 & Short-term Government Bond portfolio or at least something equivalent. For myself, I do the Vanguard 500 for the stock section, but for the other part I just do High Yield Savings Account/iBonds/No Penalty CD's. What about yourselves?

A 90/10 stock/bond allocation might be right for Mrs. Buffet's retirement, but it would likely be wrong for most of us.

Our stock/fixed-income allocation depends on our goals, time-frame, risk-tolerance and personal financial situation. Vanguard has this Investor Questionnaire to help us make this important decision:

https://personal.vanguard.com/us/FundsI ... unds/tools

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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JoMoney
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Re: Role call Warren Buffet 90/10 portfolio

Postby JoMoney » Wed May 25, 2016 10:10 pm

rattlenap wrote:
JoMoney wrote:Count me in since 2008.
Not really 90/10 though, more like roughly 18 months of living expenses in short-term bonds (which currently represents a lot less than 10% of my portfolio). I also have other insurance, pension, severance, and some other fixed income like security that I don't count as my investment portfolio but I do count when it comes to how much i want to keep in cash and still sleep well at night. I imagine as I get older, or start thinking about doing something other than working for a paycheck I'll probably move more towards 90/10 or even a bit more conservative then that. I prefer to think of it more along terms of how much I have in living expenses covered than in percentages of bonds in the investment portfolio though.


What short-term bond fund(s) do you use?

I had been using Vanguard's Short-Term Bond index, but I've mostly transitioned over to using Series I Savings Bonds, I expect to primarily use those along with high-yield bank bank/money market account.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Nicolas
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Re: Role call Warren Buffet 90/10 portfolio

Postby Nicolas » Wed May 25, 2016 10:50 pm

boglephreak wrote:buffet's net worth is 63.3B according to Forbes in 2015. 10% of that is 6.3B--something most people could easily live off of if the 90% disappears. i dont think you should consider using it without considering that context.

that being said, i have a 90/10 split, but i have added int'l for more diversification; i am young and make good money so can stand the loss of most of my retirement; and my wife also makes good money. if those factors didnt exist, i would think hard about my AA. i dont think the int'l is necessary, but i speculate it will work best for me in the long run given the low int'l, highish S&P.


Yes but Mr. Buffett said he's going to give most of his wealth away, so his wife will only get a fraction of that 63.3B. Then the 10% in treasuries won't be near 6.3B. I'm sure she'll be well taken care of, regardless.

And consider that if the 90% invested in the S&P 500 goes to zero, the treasuries would likely also be worthless as the government will have collapsed.
Last edited by Nicolas on Thu May 26, 2016 4:50 am, edited 3 times in total.

rattlenap
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Re: Warren Buffet 90/10 portfolio not for most of us

Postby rattlenap » Wed May 25, 2016 11:02 pm

Taylor Larimore wrote:Rattlenap:

Welcome to the Bogleheads Forum!
rattlenap wrote:Just curious if any of you are doing the Warren Buffet 90/10 S&P 500 & Short-term Government Bond portfolio or at least something equivalent. For myself, I do the Vanguard 500 for the stock section, but for the other part I just do High Yield Savings Account/iBonds/No Penalty CD's. What about yourselves?

A 90/10 stock/bond allocation might be right for Mrs. Buffet's retirement, but it would likely be wrong for most of us.

Our stock/fixed-income allocation depends on our goals, time-frame, risk-tolerance and personal financial situation. Vanguard has this Investor Questionnaire to help us make this important decision:

https://personal.vanguard.com/us/FundsI ... unds/tools

Best wishes.
Taylor


Thanks Taylor,

But funnily enough when I do the questionnaire it always shows a recommended 100% stock allocation for me.

rattlenap
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Re: Role call Warren Buffet 90/10 portfolio

Postby rattlenap » Wed May 25, 2016 11:08 pm

JoMoney wrote:
rattlenap wrote:
JoMoney wrote:Count me in since 2008.
Not really 90/10 though, more like roughly 18 months of living expenses in short-term bonds (which currently represents a lot less than 10% of my portfolio). I also have other insurance, pension, severance, and some other fixed income like security that I don't count as my investment portfolio but I do count when it comes to how much i want to keep in cash and still sleep well at night. I imagine as I get older, or start thinking about doing something other than working for a paycheck I'll probably move more towards 90/10 or even a bit more conservative then that. I prefer to think of it more along terms of how much I have in living expenses covered than in percentages of bonds in the investment portfolio though.


What short-term bond fund(s) do you use?

I had been using Vanguard's Short-Term Bond index, but I've mostly transitioned over to using Series I Savings Bonds, I expect to primarily use those along with high-yield bank bank/money market account.

Yeah, I like iBonds as well. If it weren't for there iliquidity, I'd be 100% in then. Would be nice though if there was such a thing as an iBond fund.

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whodidntante
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Re: Warren Buffet 90/10 portfolio not for most of us

Postby whodidntante » Wed May 25, 2016 11:11 pm

rattlenap wrote:
Thanks Taylor,

But funnily enough when I do the questionnaire it always shows a recommended 100% stock allocation for me.


Me too.

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Re: Roll call Warren Buffet 90/10 portfolio

Postby NMJack » Wed May 25, 2016 11:40 pm

I like the 90/10 better than about 90% of the AA models advocated in the financial press. Much better than the often recommended "age in bonds." That one-size-fits-all "theory" has been used so much that I think some FAs just stick with it because it's what "everybody" uses. More about alleviating nervousness and calming fears in down markets than maximizing benefit for the lifelong investor.

I like 100/0 for anybody between birth and retirement, then age in stocks as soon as a person decides to retire. Kind of a combo of "max altitude" for the journey followed by "rising equity glide path" for the destination. :sharebeer

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Re: Roll call Warren Buffet 90/10 portfolio

Postby hawkfan55 » Wed May 25, 2016 11:47 pm

Me, 60, DW, 57, we are 50/50 as we will be retiring in 2-3 years. It's fine to be 90/10 if you have a long time before retirement and are able to withstand market drops of 50 percent or more. Just don't bail and the market should return to move higher, eventually. If you don't sell in a downturn, you have not lost anything. Many people get scared and sell... then get whipsawed. Don't get whipsawed!

It's a whole different ballgame for most people when nearing retirement. Warren Buffet has considerably more net worth than we do! We want to have a secure retirement and keep enough in bonds to last at least ten years so we don't have to sell equities if/when they decline. We can sleep at night. :happy

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Re: Roll call Warren Buffet 90/10 portfolio

Postby Ari » Thu May 26, 2016 12:35 am

Portfolio-wise I'm 100% stocks, though as a Swede, I've got a pension that I'm unable to opt out of, but since I can't so much with that, I don't put any energy in it.

I'm also not doing S&P500 for the stocks, again since I'm a Swede. I'm 40% Sweden, 40% International and 20% Emerging Markets. The Buffet portfolio seems like a fine choice for many American investors, though.
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Re: Roll call Warren Buffet 90/10 portfolio

Postby RyeWhiskey » Thu May 26, 2016 12:52 am

I'm in, for the most part. 30 yrs old, 100% Total World Stock Index spread between taxable, Roth, and HSA. I also have a large emergency fund which, if counted towards the overall allocation, will make about 10%. As I find myself thinking about home purchases, etc, I will increase this cash buffer while the equities do their thing. Keep it simple. :beer
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Re: Roll call Warren Buffet 90/10 portfolio

Postby MathWizard » Thu May 26, 2016 3:11 am

I'm 90/10 not counting my EF.

I rebalanced into stocks during the 2008/9 recession.

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stemikger
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Re: Role call Warren Buffet 90/10 portfolio

Postby stemikger » Thu May 26, 2016 5:53 am

whodidntante wrote:Why would you want that much in bonds? :mrgreen:


For someone who is 51 soon to be 52, I think it is about right. The typical balanced fund is around 60/40.

It also protects me from myself and gives me a little more stability in my account.

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Re: Roll call Warren Buffet 90/10 portfolio

Postby dbp7777 » Thu May 26, 2016 6:47 am

Question for Taylor.....

Would you be willing to share your asset allocation at this point in your investing life?

Thank you

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Taylor Larimore
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The Three-Fund Portfolio

Postby Taylor Larimore » Thu May 26, 2016 8:25 am

dbp7777 wrote:Question for Taylor.....

Would you be willing to share your asset allocation at this point in your investing life?

Thank you

dbp7777:

I am reluctant to share my asset allocation for two primary reasons:

1. Each of us should have our asset allocation based on our own goals, our own risk-tolerance, our own time-frame and our own personal financial situation (including income-tax bracket).

2. When I started investing in the 50s there were no IRAs, 401ks and similar tax-advantaged accounts. There were no index funds. I am locked into several taxable funds I would not buy today but which I cannot sell without triggering capital-gain taxes. Capital-gain taxes are cancelled at death (I'm 92).

Anyone who copies my asset-allocation plan could be making a big mistake. For this reason, I feel that sharing my portfolio will do more harm than good.

If I could start over, I would own The Three-Fund Portfolio.

Best wishes
Taylor
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TheTimeLord
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Re: The Three-Fund Portfolio

Postby TheTimeLord » Thu May 26, 2016 8:31 am

Taylor Larimore wrote:(capital-gain taxes are cancelled at death).


I did not know that. I thought they would be paid by the estate when the final year's income taxes were filed after death and then the cost basis rest for whoever receives the stock.
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Re: The Three-Fund Portfolio

Postby dbr » Thu May 26, 2016 8:54 am

TheTimeLord wrote:
Taylor Larimore wrote:(capital-gain taxes are cancelled at death).


I did not know that. I thought they would be paid by the estate when the final year's income taxes were filed after death and then the cost basis rest for whoever receives the stock.


I think the statement means to refer to the basis reset. If the deceased had sold something in the year of death there would be a capital gain (or loss) to report and be taxed on the deceased' tax return.

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TheTimeLord
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Re: The Three-Fund Portfolio

Postby TheTimeLord » Thu May 26, 2016 9:13 am

dbr wrote:
TheTimeLord wrote:
Taylor Larimore wrote:(capital-gain taxes are cancelled at death).


I did not know that. I thought they would be paid by the estate when the final year's income taxes were filed after death and then the cost basis rest for whoever receives the stock.


I think the statement means to refer to the basis reset. If the deceased had sold something in the year of death there would be a capital gain (or loss) to report and be taxed on the deceased' tax return.


Thanks that had been my understanding.
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Re: Roll call Warren Buffet 90/10 portfolio

Postby hulburt1 » Thu May 26, 2016 9:25 am

I'm 63 and have been at 90/10 total market/cash but that cash will cover me for 3 years if I lost everything. I will still have a pension and I will take SS if I need too. Its not what you have its what you spend. I can live on SS and pension. I still have 2m that is in IRA/Roth
I'm not Buffet was just a truck driver who got excited when his money grow. I'm still that way...I have not worked for 8 years will pick up a little money when I'm board.

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Re: Roll call Warren Buffet 90/10 portfolio

Postby razeus » Thu May 26, 2016 9:42 am

You have to remember that Buffet has so much money that the 10% in the bonds is literally billions. Even if the stock market got cut in have, he still has billions. That doesn't work for us little guys.

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TheTimeLord
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Re: Roll call Warren Buffet 90/10 portfolio

Postby TheTimeLord » Thu May 26, 2016 9:59 am

FWIW, Buffet is giving away about $37 billion dollars, which is about 85% of his wealth.
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Re: Roll call Warren Buffet 90/10 portfolio

Postby Fclevz » Thu May 26, 2016 10:53 am

razeus wrote:You have to remember that Buffet has so much money that the 10% in the bonds is literally billions. Even if the stock market got cut in have, he still has billions. That doesn't work for us little guys.


It's not the portfolio size that matters, but rather how much of it you are spending. Buffett actually clarified his position in a CNBC interview with Becky Quick. and mentioned spending 3 or 4%. That's in line with what we always talk about here, regardless of portfolio size.

The full quote in context:
Well, I didn’t lay out my whole will. . . . I did explain, because I laid out what I thought the average person who is not an expert on stocks should do. And my widow will not be an expert on stocks. And I wanna be sure she gets a decent result. She isn’t gonna get a sensational result, you know? And since all my Berkshire shares are going to philanthropy, the question becomes what does she do with the cash that’s left to her? Part of it goes outright, part of it goes to a trustee. But I’ve told the trustee to put 90% of it in an S&P 500 index fund and 10% in short-term governments. And the reason for the 10% in short-term governments is that if there’s a terrible period in the market and she’s withdrawing 3% or 4% a year you take it out of that instead of selling stocks at the wrong time. She’ll do fine with that. And anybody will do fine with that. It’s low-cost, it’s in a bunch of wonderful businesses, and it takes care of itself.

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Re: Roll call Warren Buffet 90/10 portfolio

Postby telemark » Thu May 26, 2016 11:23 am

Nicolas wrote:And consider that if the 90% invested in the S&P 500 goes to zero, the treasuries would likely also be worthless as the government will have collapsed.

Going to zero isn't really the thing I worry about. With a 90% allocation, even going to 70% would be a disaster for me.

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danwhite77
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Re: Roll call Warren Buffet 90/10 portfolio

Postby danwhite77 » Thu May 26, 2016 4:41 pm

Basically, yes, among our investable assets. We're a little heavier on cash though, more like 15% cash / 85% equities (virtually all of which are index funds).
"While some mutual fund founders chose to make billions, he chose to make a difference." - Dedication to Jack Bogle in 'The Bogleheads' Guide to Investing'.

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Re: Roll call Warren Buffet 90/10 portfolio

Postby Blueskies123 » Thu May 26, 2016 4:54 pm

Since I retired 8 months ago I am 50/50. I plan to slowly increase my allocation back into stocks over the next 3-4 years.
FIRE July 2015

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timboktoo
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Re: Roll call Warren Buffet 90/10 portfolio

Postby timboktoo » Fri May 27, 2016 2:52 pm

I would like to try it, but I can't handle it. I wouldn't be able to sleep at night.

- Tim

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Taylor Larimore
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With increasing age: Increase or decrease stocks?

Postby Taylor Larimore » Fri May 27, 2016 3:02 pm

Blueskies123 wrote:Since I retired 8 months ago I am 50/50. I plan to slowly increase my allocation back into stocks over the next 3-4 years.

Blueskies123:

Why would you increase your allocation to stocks? Most retirees, and most target funds (including Vanguard) decrease their stock allocation as we grow older.

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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stemikger
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Re: With increasing age: Increase or decrease stocks?

Postby stemikger » Fri May 27, 2016 6:58 pm

Taylor Larimore wrote:
Blueskies123 wrote:Since I retired 8 months ago I am 50/50. I plan to slowly increase my allocation back into stocks over the next 3-4 years.

Blueskies123:

Why would you increase your allocation to stocks? Most retirees, and most target funds (including Vanguard) decrease their stock allocation as we grow older.

Thank you and best wishes.
Taylor


Hi Taylor,

I don't want to speak for Blueskies123, but I have a feeling he is following Wade Pfau and Michael Kitces's inverse glide path idea.
Stay the Course!! ~ Press on Regardless!!!

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Taylor Larimore
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Re: With increasing age: Increase or decrease stocks?

Postby Taylor Larimore » Fri May 27, 2016 9:51 pm

stemikger wrote:
Taylor Larimore wrote:
Blueskies123 wrote:Since I retired 8 months ago I am 50/50. I plan to slowly increase my allocation back into stocks over the next 3-4 years.

Blueskies123:

Why would you increase your allocation to stocks? Most retirees, and most target funds (including Vanguard) decrease their stock allocation as we grow older.

Thank you and best wishes.
Taylor


Hi Taylor,

I don't want to speak for Blueskies123, but I have a feeling he is following Wade Pfau and Michael Kitces's inverse glide path idea.

stemikger:

Rule #1 for retirees: "Don't risk losing what you may need."

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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stemikger
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Re: With increasing age: Increase or decrease stocks?

Postby stemikger » Fri May 27, 2016 10:48 pm

Taylor Larimore wrote:
stemikger wrote:
Taylor Larimore wrote:
Blueskies123 wrote:Since I retired 8 months ago I am 50/50. I plan to slowly increase my allocation back into stocks over the next 3-4 years.

Blueskies123:

Why would you increase your allocation to stocks? Most retirees, and most target funds (including Vanguard) decrease their stock allocation as we grow older.

Thank you and best wishes.
Taylor


Hi Taylor,

I don't want to speak for Blueskies123, but I have a feeling he is following Wade Pfau and Michael Kitces's inverse glide path idea.

stemikger:

Rule #1 for retirees: "Don't risk losing what you may need."

Best wishes.
Taylor



Taylor,

I wholeheartedly agree. Every time I think I want to get more aggressive with my portfolio, I replay the story you shared with us about your Grandfather. Would you mind posting that in this thread, I can't seem to find it.

Thank you!
Stay the Course!! ~ Press on Regardless!!!

goldendad
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Re: Roll call Warren Buffet 90/10 portfolio

Postby goldendad » Fri May 27, 2016 10:53 pm

I am 60 years old and have about 20% in cash and Vanguard's short term bond ETF (VCSH). The other 80% is in the S&P500 (SPY) and long term positions in individual blue chip stocks. I do hedge a bit by selling Covered Calls on the SPY and the individual stocks.

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Taylor Larimore
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What a bear market is like

Postby Taylor Larimore » Sat May 28, 2016 7:24 am

Taylor wrote:Rule #1 for retirees: "Don't risk losing what you may need."

Best wishes.
Taylor

stemiker wrote:I wholeheartedly agree. Every time I think I want to get more aggressive with my portfolio, I replay the story you shared with us about your Grandfather. Would you mind posting that in this thread, I can't seem to find it.

Here it is:

Our family owned "Larimore's Diner" in Foxboro, Mass. in 1929 (I was 5 years old at that time). When the depression hit, we lost the Diner and moved into my grandfather's home in Miami. Grandfather, who was a millionaire investor and chief executive of an investment trust company, lost everything--including the Miami home we lived in.

BEAR MARKET OF 1929-1937 (Dow plunged 89%)
-1929--1930--1931--1932
(-31%)(-25%)(-43%)(-08%) Large Cap Stocks
(-34%)(-35%)(-47%)(-06%) Mid/Small Cap Stocks
(-47%)(-38%)(-50%)(-05%) Micro Cap Stocks

(+04%)(+07%)(-02%)(+09%) 5-Year Treasury Bonds

BEAR MARKET OF 1973-1976 (S&P fell 43%)
-1973--1974
(-15%)(-26%) Large Caps
(-39%)(-29%) Micro Caps

---(-70%) Coca-Cola
---(-82%) Intel
---(-73%) McDonald's
---(-86%) Merrill Lynch
---(-86%) Walt Disney
---(-71%) Xerox

Figures cannot convey the horrifying and debilitating effects of a bear market. You watch in agony as month after month your life savings evaporate before your eyes. Gloom and doom talk is everywhere. Nearly everyone else is selling. You have no idea when, or if, your portfolio will stop losing money.

Your friends and relatives urge you to sell. Nearly all financial experts recommend "sell". You are ridiculed for trying to hold on. You begin to have self-doubt. Despair sets in. Buying stocks is unthinkable. Suicides increase. That's a REAL bear market.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

Alchemist
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Re: Role call Warren Buffet 90/10 portfolio

Postby Alchemist » Mon May 30, 2016 4:43 pm

rattlenap wrote:
Why do you use the TSM for your Taxable? Is it more tax efficient than the Vanguard 500?


Exactly. Slightly lower dividend yield and no adding/subtracting companies from the index.

selftalk
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Re: Roll call Warren Buffet 90/10 portfolio

Postby selftalk » Mon May 30, 2016 5:26 pm

Taylor,from reading what you just wrote above, DON`T PEEK is definitely a requirement to increase your stock and bond investments long term and keep you stable emotionally. The thing that bothers me is that suppose I retired in 1930, with the bear market and had my net worth in investments in stocks and bonds. I would feel pretty bad to have the stock portion drop 89% over the next few years. It`s best not to have an all stock portfolio.
Last edited by selftalk on Mon May 30, 2016 6:35 pm, edited 1 time in total.

livesoft
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Re: Roll call Warren Buffett 90/10 portfolio

Postby livesoft » Mon May 30, 2016 5:37 pm

Suppose that Mr Buffett had said something different such as "Just put 100% into US Treasuries and have fun." That would have caused his net worth to drop as it would have been a vote of no confidence in the things he is invested in.

Or suppose he said "Just sell it all except for Apple and use the money to buy more Apple stock." What do you think would have happened? :) :)

So I don't think it was any great words of wisdom that he gave for when he passed on. He is trapped in his current investments and must support them.

Or maybe I am completely wrong since y'all may be talking about some bloke named Buffet who had a lunch line named after him and not the Berkshire Hathaway guy.
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Nicolas
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Re: Roll call Warren Buffett 90/10 portfolio

Postby Nicolas » Mon May 30, 2016 6:29 pm

livesoft wrote:
Or maybe I am completely wrong since y'all may be talking about some bloke named Buffet who had a lunch line named after him and not the Berkshire Hathaway guy.


It might've been Jimmy Buffett. They're cousins you know -- really!

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Re: Roll call Warren Buffett 90/10 portfolio

Postby livesoft » Mon May 30, 2016 6:36 pm

Nicolas wrote:It might've been Jimmy Buffett. They're cousins you know -- really!

A trivial internet search shows they are clearly not related.
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Re: Roll call Warren Buffett 90/10 portfolio

Postby Nicolas » Mon May 30, 2016 6:48 pm

livesoft wrote:
Nicolas wrote:It might've been Jimmy Buffett. They're cousins you know -- really!

A trivial internet search shows they are clearly not related.


I stand corrected. I just did a trivial search and found this, "Warren and Jimmy only share a common ancestor from 10,000 years ago". Anyway, they're friends, that much has been established.

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Re: Roll call Warren Buffet 90/10 portfolio

Postby knpstr » Mon May 30, 2016 7:09 pm

rattlenap wrote:Just curios if any of you are doing the Warren Buffet 90/10 S&P 500 & Short-term Government Bond portfolio or at least something equivalent. For myself, I do the Vanguard 500 for the stock section, but for the other part I just do High Yield Savings Account/iBonds/No Penalty CD's. What about yourselves?


I'm at 100% total stock market (other than my emergency fund in a savings account, but hold no bonds)
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius


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