Throwing In The Towel on Portfolio Management

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dallasguru
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Re: Throwing In The Towel on Portfolio Management

Post by dallasguru »

great thread for one fund solutions:

I am too fed up with frequent tweaks to my IRA accounts so looking for extremely conservative target retirement fund, any comments on following funds please:


JRFSX - John Hancock Funds Multi-Index Income Preservation Portfolio Class R6 (This has only 13% in equities)

next comes in the line is:
Fidelity Freedom Index Income Fund (only 20% equities)
matthewmon
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Re: Throwing In The Towel on Portfolio Management

Post by matthewmon »

Is there a VT equivalent that has a lower expense ratio?
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FelixTheCat
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Re: Throwing In The Towel on Portfolio Management

Post by FelixTheCat »

I have Total Bond in a tax deferred account and Total Stock in a taxable account. I have automatic investments into my mutual funds. I've never had to do anything with my portfolio since it was established decades ago.

What difficulties are you encountering?
Felix is a wonderful, wonderful cat.
reln
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Re: Throwing In The Towel on Portfolio Management

Post by reln »

investor.saver1 wrote: Tue Sep 15, 2020 5:24 pm I've come to a fork in the road with respect to managing my investment portfolio. DW isn't interested at all in managing the portfolio and I'm tiring of it. Even the 3-fund portfolio is too much work. I can get someone to manage it for me (for a cost) or I can establish a passive portfolio that takes very little energy to manage.

My current thought is to liquidate our current investments (all index ETFs) in our IRAs and gradually and prudently liquidate (minimizing Capital gains) our after-tax brokerage account and use the proceeds to buy two target funds: SWYAX (Schwab 2010 Index Target Fund [Exp Ratio .08%]) and VTINX (Vanguard Target Retirement Income Fund [Exp Ratio .12%]). I plan to invest 50% of our retirement investment portfolio in each. As our CDs mature, we'll simply increase our positions in the two funds. And yes, we'll continue will maintain a substantial emergency fund at a local financial institution.

I can hear the gasps....I know there are better places for the money and better tactics to attain a passive portfolio but this simple low cost solution fits us well.

Why these funds? They are funds of low cost diversified index funds with allocations similar to our current portfolio with the lowest expense ratios on the planet. The funds were designed by way smarter people than me and I'd expect them to perform just fine with the level of risk appropriate for DW and myself. I can buy them and sell them at no cost at Schwab (I've got a special deal at Schwab to buy Vanguard funds for free). No rebalancing is required meeting my main objective of simplicity and being nearly effort free. My DW can manage easily if I should move on the heaven. The return will easily be sufficient to supplement our spending needs.

I'd welcome your learned thoughts. If this plan is folly I'd like to know before I implement it. Thanks in advance!
Looks good to me.
reln
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Re: Throwing In The Towel on Portfolio Management

Post by reln »

matthewmon wrote: Mon Sep 21, 2020 1:18 pm Is there a VT equivalent that has a lower expense ratio?
Lower than 8bp?
AnonJohn
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Re: Throwing In The Towel on Portfolio Management

Post by AnonJohn »

Some elements of the OP's quandary resonate, but other's don't. I'll begin by saying: simplicity is good, and if going to maximum simplicity works for you, do it! The time invested in micromanagement won't pay well.

For me, I followed similar track, but not as deeply. I built spreadsheets and dashboards and python scripts to keep on top of what is going on and tell me what to do. It took time, I obsessed. I found it less interesting over time. When that happened, I just used my dashboard. It has good boglehead principles built it. For instance, it implements my IPS and lets me know when to rebalance. Which is ... almost never. It shows me where various fixed income options come in, so I can see if it's worth the effort to make changes. It's not.

So I open up the spreadsheet, and except for one or two times a year, I just do nothing and close it again. A waste of 5 minutes, but that's OK. Or I do what it says and allocate new investment money. But except for once or twice a year I basically do nothing beyond updating contribution numbers.

Perhaps this offers another way out? Perhaps some the problem is that you need an IPS that dictates when you act and when you "don't just do something ... stand there!"
matthewmon
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Re: Throwing In The Towel on Portfolio Management

Post by matthewmon »

LilyFleur wrote: Wed Sep 16, 2020 7:14 pm About two years ago, I thought it would be a brilliant, streamlined move to put a lot of money in a balanced index fund in my 401k. It drove me crazy. I like to be able to see the moving parts and what they are doing. Now I have the money in a bond index fund, an S&P 500 fund and a stable value fund. I can look at it every day or every year. I just cannot make myself give up the option of taking money to pay my bills out of the bond fund in a year that equities are down, and taking money out of equities when they are doing quite well.

Have you considered having a total bond index fund at one institution, and some sort of index stock fund at the other institution? No hands-on management would be required. You could look at it if you wanted, or not look at it.
I have also thought that in retirement I would try to take yearly income from mostly from the asset (bonds or stocks) that had performed the best for the year but isn't that market timing and over the long haul I am likely to do no better than just taking a certain percentage from a lifestrategy fund every year? Or take 1/12 of my yearly income from the lifestrategy fund each month?
matthewmon
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Re: Throwing In The Towel on Portfolio Management

Post by matthewmon »

I have also thought that in retirement I would try to take yearly income from mostly from the asset (bonds or stocks/BND or VT) that had performed the best for the year but isn't that market timing and over the long haul I am likely to do no better than just taking a certain percentage from a lifestrategy fund every year? Or take 1/12 of my yearly income from the lifestrategy fund each month?


can someone answer this for me or should I start a new thread? thanks!
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LilyFleur
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Re: Throwing In The Towel on Portfolio Management

Post by LilyFleur »

matthewmon wrote: Wed Sep 23, 2020 5:32 am I have also thought that in retirement I would try to take yearly income from mostly from the asset (bonds or stocks/BND or VT) that had performed the best for the year but isn't that market timing and over the long haul I am likely to do no better than just taking a certain percentage from a lifestrategy fund every year? Or take 1/12 of my yearly income from the lifestrategy fund each month?


can someone answer this for me or should I start a new thread? thanks!
I think it's considered rebalancing.
matthewmon
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Re: Throwing In The Towel on Portfolio Management

Post by matthewmon »

wouldn't your asset allocation get off target? Isn't that "market timing" that wouldn't beat just taking income out in proportion to your asset allocation each month or year?
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LilyFleur
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Re: Throwing In The Towel on Portfolio Management

Post by LilyFleur »

matthewmon wrote: Wed Sep 23, 2020 1:03 pm wouldn't your asset allocation get off target? Isn't that "market timing" that wouldn't beat just taking income out in proportion to your asset allocation each month or year?
There are people currently doing this on the forum, so hopefully they will chip in to explain.

I think you do it year by year (I think some on this forum may do it more frequently).

So, if you desire a 50% stock/50% bond/cash asset allocation, and one year your stocks are way up, you would take your withdrawal for the next year out of stocks. Depending on how strict you are about maintaining your 50/50 asset allocation, you might also sell some stocks and buy bonds.

On another year when stocks are way down, you would take your withdrawal from bonds/cash. Some on this forum would also buy stocks to keep their desired asset allocation, and some would not.

I guess I don't really understand how a balanced index fund works (which is partly why, at my current age, I won't invest in one. I like to see the moving parts, and they really aren't all that complicated in a simple portfolio.) But it seems to me that you are selling both stocks and bonds if you withdraw from a balanced index fund.
inbox788
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Re: Throwing In The Towel on Portfolio Management

Post by inbox788 »

investor.saver1 wrote: Tue Sep 15, 2020 5:24 pmMy current thought is to liquidate our current investments (all index ETFs) in our IRAs and gradually and prudently liquidate (minimizing Capital gains) our after-tax brokerage account and use the proceeds to buy two target funds: SWYAX (Schwab 2010 Index Target Fund [Exp Ratio .08%]) and VTINX (Vanguard Target Retirement Income Fund [Exp Ratio .12%]). I plan to invest 50% of our retirement investment portfolio in each. As our CDs mature, we'll simply increase our positions in the two funds. And yes, we'll continue will maintain a substantial emergency fund at a local financial institution.


and myself. I can buy them and sell them at no cost at Schwab (I've got a special deal at Schwab to buy Vanguard funds for free). No rebalancing is required meeting my main objective of simplicity and being nearly effort free. My DW can manage easily if I should move on the heaven. The return will easily be sufficient to supplement our spending needs.
The amount of different among all the funds and allocations appears to be fairly negligible. We're talking about 35/65 vs 30/70 vs 25/75 or some average of them all, which for all intents and purposes will be right around 30/70. Did I miss a more significant change?

Going from CDs to 30/70 is a small risk increase, but I assume a small portion of the portfolio, so overall not a big deal, and there are proponents of increasing equities AA as sequence risk subsides.

Sounds like you're all set and can afford a more aggressive AA, which may leave behind a larger estate in good times, but have not need to, and it that makes you sleep more soundly, no worries.

https://www.schwab.com/resource-center/ ... -date-fund
https://www.schwab.com/mutual-funds/mut ... rget-funds

OT,
reln wrote: Mon Sep 21, 2020 1:31 pm
matthewmon wrote: Mon Sep 21, 2020 1:18 pm Is there a VT equivalent that has a lower expense ratio?
Lower than 8bp?
LOL, that's more than 500% the fees of VTSAX! But they're infinitely more than the Fidelity Zero funds. Were's whispering below the noise level here.

The hidden cost of Fidelity’s ZERO funds
viewtopic.php?t=294370
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