What are you buying now and why?

260chrisb · Post by **260chrisb** » Sun May 01, 2011 8:23 pm

I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

Noobvestor · Post by **Noobvestor** » Sun May 01, 2011 8:28 pm

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

What does your investment policy *say* to buy right now? (That was kind of a trick question - I'm guessing you don't have one from your question).

I'm buying bonds because that's what my IP tells me to do - and I'm pretty happy about it, because they haven't really been going up and should provide some safety if equities take a tumble (because, as you say, equities are up).

http://quote.morningstar.com/fund/chart ... %2C0%22%7D

texas_archer · Post by **texas_archer** » Sun May 01, 2011 8:30 pm

Noobvestor wrote:
260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?
What does your investment policy *say* to buy right now? (That was kind of a trick question - I'm guessing you don't have one from your question).

I'm buying bonds because that's what my IP tells me to do - and I'm pretty happy about it, because they haven't really been going up and should provide some safety if equities take a tumble (because, as you say, equities are up).

Same, buying bonds, increaseing my emergency fund, and paying more on my house note.

DA · Post by DA » Sun May 01, 2011 8:30 pm

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

We're buying whatever our Investment Policy Statement (IPS) tells us it's time to buy. Do you have an IPS?

http://www.bogleheads.org/wiki/IPS

260chrisb · Post by **260chrisb** » Sun May 01, 2011 8:42 pm

Okay, I'm busted! I don't have an IPS. At least one that is written down, guess I need to work on it.

Taylor Larimore · Post by **Taylor Larimore** » Sun May 01, 2011 8:48 pm

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

Hi Chris:

Bogleheads structure a personal and simple, tax-efficient, low-cost, long-term asset allocation plan. They then ignore the media and stay-the-course.

If some of your funds are substantially above your asset allocation plan, it may be time to rebalance back to your plan.

namaste · Post by **namaste** » Sun May 01, 2011 8:50 pm

I'm also following my IPS, so buying bonds and working on building up the emergency fund.

There's some great info on the wiki including an example of an IPS in terms of how to create one.

Spades · Post by **Spades** » Sun May 01, 2011 9:05 pm

I've been buying T-bonds, Ginnie Mae Bonds, and blue chip stock. Like the majority of posters in this thread I think overall the stock market is over valued.

Like Taylor is saying, if you're unhappy with the equity market, you might want to change your asset allocation plan. I know I have. I changed to 85% bonds, 15% equities.

sage1166 · Post by **sage1166** » Sun May 01, 2011 9:16 pm

VTHRX--just like I've been doing the last 2 years (when I started). Oh and the C, S, I, and F funds in TSP.

sparta · Post by **sparta** » Sun May 01, 2011 9:19 pm

Treasuries

GammaPoint · Post by **GammaPoint** » Sun May 01, 2011 9:20 pm

If you have an AA you never need to ask what to buy. All new money has a well-defined place to go.

yakers · Post by **yakers** » Sun May 01, 2011 9:26 pm

sage1166 wrote:VTHRX--just like I've been doing the last 2 years (when I started). Oh and the C, S, I, and F funds in TSP.

None of the famed G Fund?

I am retired so not buying much. I just rebalanced, my G fund had crept down to 35% from its target of 40% of my TSP.

JasonR · Post by **JasonR** » Sun May 01, 2011 10:18 pm

GammaPoint wrote:If you have an AA you never need to ask what to buy. All new money has a well-defined place to go.

Well, I don't agree. I've got all the bonds I need, according to my IPS and AA. I've got all the emergency fund I need, or so I think. It's not so easy to decide what to do now. Stocks ain't exactly cheap. Don't try to pretend it's easy.

My solution: buy equities and TLH if the market drops. Still, that's not an easy thing to do.

jh · Post by jh » Sun May 01, 2011 10:41 pm

Scott S · Post by **Scott S** » Sun May 01, 2011 10:53 pm

VBMFX, because I'm underweight in bonds.

- Scott

White Coat Investor · Sun May 01, 2011 10:54 pm

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

Total stock market mostly. If things keep going up I'll end up needing to sell stocks and buy bonds.

rcshouldis · Post by **rcshouldis** » Sun May 01, 2011 11:28 pm

Not buying anything right now. I have 20% in cash just sitting there waiting for the right opportunity.

masteraleph · Post by **masteraleph** » Sun May 01, 2011 11:35 pm

A little in intermediate bonds and a little in S&P 500, mostly because that's what my 401k has available at acceptable ERs. When one of those passes out of its band, I'll presumably rebalance everything, with buying and selling all over.

GammaPoint · Post by **GammaPoint** » Sun May 01, 2011 11:36 pm

JasonR wrote:
GammaPoint wrote:If you have an AA you never need to ask what to buy. All new money has a well-defined place to go.
Well, I don't agree. I've got all the bonds I need, according to my IPS and AA. I've got all the emergency fund I need, or so I think. It's not so easy to decide what to do now. Stocks ain't exactly cheap. Don't try to pretend it's easy.

My solution: buy equities and TLH if the market drops. Still, that's not an easy thing to do.

Stocks are more expensive than they were last year but less expensive than they were a couple years back. How are we supposed to know what will happen in the future? My stocks are for the long-term anyway, so if it drops the day after I invest oh well, it'll probably come back up.

Nathan Drake · Post by **Nathan Drake** » Sun May 01, 2011 11:41 pm

Stocks trend up over time far more than they trend down.

You cannot time markets.

Invest in the market when you have the available money, based upon your asset allocation plan.

Even if you purchased stocks at their all time highs back in 2007, this will look cheap in retrospect 20 years from now.

I am still buying and staying the course.

By waiting for dips, you lose out on dividends, and research shows that you could miss huge momentum swings. Which is why the best time to invest is always NOW.

555 · Post by **555** » Mon May 02, 2011 12:08 am

rcshouldis wrote:"Not buying anything right now. I have 20% in cash just sitting there waiting for the right opportunity."

Stocks may never be this cheap again.

LH · Post by LH » Mon May 02, 2011 1:51 am

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

I buy the same things I have for the past 4 years. Whatever is out of balance, gets the new money.
15 US TSM
15 US SCV
15 US REIT
15 Europe
15 AustraliaAsia
15 Emerging
5 TIPS
5 Bonds

just staying the course.

tadamsmar · Post by **tadamsmar** » Mon May 02, 2011 7:11 am

The money going into my 401K is buying bonds right now.

Grt2bOutdoors · Post by **Grt2bOutdoors** » Mon May 02, 2011 7:51 am

What am I buying, hmmm.....

Total Stk Market
All World - ex US
a sprinkling of Emerging Markets - DFA
Pimco Total Return - a bit more of this due to reallocating recently
Total Bond Market

Paying down house note
Saving for a rainy day in I-bonds come three weeks from now

wts · Post by **wts** » Tue May 03, 2011 12:58 am

S&P 500 and because my IPS wants more international
All World ex-US SCap and TMI

Paying down mortgage.

Spades · Post by **Spades** » Tue May 03, 2011 1:17 am

JasonR wrote:
GammaPoint wrote:If you have an AA you never need to ask what to buy. All new money has a well-defined place to go.
Well, I don't agree. I've got all the bonds I need, according to my IPS and AA. I've got all the emergency fund I need, or so I think. It's not so easy to decide what to do now. Stocks ain't exactly cheap. Don't try to pretend it's easy.

My solution: buy equities and TLH if the market drops. Still, that's not an easy thing to do.

JasonR, what do you mean by TLH?

555 · Post by **555** » Tue May 03, 2011 1:29 am

Spades wrote:"JasonR, what do you mean by TLH?"

Tax Loss Harvesting
http://www.bogleheads.org/wiki/Tax_Loss_Harvesting

Daffy · Post by **Daffy** » Tue May 03, 2011 1:30 am

Spades wrote:JasonR, what do you mean by TLH?

TLH = Tax Loss Harvesting

http://www.bogleheads.org/wiki/Tax_Loss_Harvesting

Dang 555....beat me by 1 minute....

MWCA · Post by **MWCA** » Tue May 03, 2011 3:56 am

DCAing into TSM index fund.

The why is because its the best fund out of 403B. Rest are actively managed junk.

lambdapro · Post by **lambdapro** » Tue May 03, 2011 7:41 am

DCAing into Schwab Fundamental Indexes. Since I am a buyer, I would not mind a bit of retrenchment of the market.

yobria · Post by **yobria** » Tue May 03, 2011 8:47 am

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

I'd recommend building a position in these valuable commodities:

http://www.bogleheads.org/readbooks.htm

Nick

empb · Post by **empb** » Tue May 03, 2011 8:56 am

Spades wrote:Like Taylor is saying, if you're unhappy with the equity market, you might want to change your asset allocation plan. I know I have. I changed to 85% bonds, 15% equities.

I don't want to speak for him but I strongly suspect that's the opposite of what Taylor's saying.

empb · Post by **empb** » Tue May 03, 2011 8:58 am

JasonR wrote:
GammaPoint wrote:If you have an AA you never need to ask what to buy. All new money has a well-defined place to go.
Well, I don't agree. I've got all the bonds I need, according to my IPS and AA. I've got all the emergency fund I need, or so I think. It's not so easy to decide what to do now. Stocks ain't exactly cheap. Don't try to pretend it's easy.

My solution: buy equities and TLH if the market drops. Still, that's not an easy thing to do.

That is the point of an IPS and AA. It is easy. It only becomes difficult when you convince yourself that you know something like "stocks ain't exactly cheap".

Either way, it sounds like you're sticking with your plan, even if it's a bit of a struggle. Kudos to you.

EDIT: For the sake fo answering the OP, I'm buying the same stuff I always buy: small-value stocks and short-term treasuries.

Taylor Larimore · Post by **Taylor Larimore** » Tue May 03, 2011 9:23 am

empb wrote:
Spades wrote:Like Taylor is saying, if you're unhappy with the equity market, you might want to change your asset allocation plan. I know I have. I changed to 85% bonds, 15% equities.
I don't want to speak for him but I strongly suspect that's the opposite of what Taylor's saying.

Hi empb and Spades:

In my opinion, and I think in Mr. Bogle's opinion also, we structure a personal long-term asset-allocation plan and then stay-the-course.

It's OK to change our asset-allocation plan when our personal situation changes. We don't change our plan based on market forecasts.

Jacobkg · Post by **Jacobkg** » Tue May 03, 2011 10:52 am

Most Vanguard bond funds are not at 52 week highs.

chaz · Post by **chaz** » Tue May 03, 2011 11:32 am

Just watching the compounding.

Van · Post by **Van** » Tue May 03, 2011 11:36 am

I'm dollar cost averaging into:

Wellesley Income Fund
Inflation-Protected Securities
Limited-Term Tax Exempt Municipal Bonds
Intermediate-Term Tax Exempt Municipal Bonds
Total Bond Market Index

I've read some of the arguments against dollar cost averaging, but I'm not gutsy enough to go the lump sum route!

Spades · Post by **Spades** » Tue May 03, 2011 12:57 pm

Hey Taylor, I missed that word about rebalancing back to the AA plan. I thought you were recommending to change the AA plan. Thanks to all for letting me know about TLH. I think I need to spend some time trolling through the "boglewiki."

BostonBoy · Post by **BostonBoy** » Tue May 03, 2011 3:15 pm

Right now I'm paying down my mortgage.

Guest422 · Post by **Guest422** » Tue May 03, 2011 4:04 pm

rcshouldis wrote:Not buying anything right now. I have 20% in cash just sitting there waiting for the right opportunity.

Same here waiting for stocks to go down to buy, or if interest rates go up a lot buy bonds, but mostly just letting my emergency fund grow.

NYCPete · Post by **NYCPete** » Tue May 03, 2011 4:21 pm

IPS has me buying more bonds of late, TIPS specifically getting the bulk of it.

Best,
Peter

lazyday · Post by **lazyday** » Wed May 04, 2011 10:28 am

260chrisb wrote:I hate this; many VG funds are at their 52 week highs!

Spades wrote:Like the majority of posters in this thread I think overall the stock market is over valued.

Do you think the stock market is so high that it won't provide noticeably better returns than bonds in the long run?

If so, with good evidence, then I could understand doing something about it. I think it makes sense to step back for a moment when stocks seem very expensive, and make sure we are doing the right thing by putting so much of our money into them.

But I don't see evidence that stocks are priced for such poor long term returns. Maybe less than average, but I think stocks seem priced for significantly better returns than bonds in the long run. I don't think there's been many times in history where stocks did have the same expected returns as bonds. Early 2000 may have been one of the few.
You can use simple tools like Gordon Equation and/or Earnings Yield to estimate future long term returns from stocks, maybe with help from a book or some old thread(s) here.

The proper Boglehead thing to do clearly is to Stay The Course, and stick to the Asset Allocation, stick to the IPS. Much evidence has shown that investors have destroyed their own wealth by buying and selling, instead of buying and holding, with rebalancing.

novastepp · Post by **novastepp** » Wed May 04, 2011 10:53 am

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

If you truly do want to invest in the Boglehead style, but feel emotional at times like these, it may help to invest your money with direct deposits or automatic transfers. This should help you abide by your IPS, and helps you maintain your AA.

Oh, and ignore the media.

magneto · Post by **magneto** » Wed May 04, 2011 11:00 am

Building up cash reserves and buying some IL Gilts (UK investment similar to TIPS)

Nominal Bonds still look way off sensible buying levels and may even have started a gentle bear market. Have been a forced seller of Stocks to rebalance AA, however Stocks are showing signs of losing upwards thrust

flowerbuyer · Post by **flowerbuyer** » Wed May 04, 2011 12:11 pm

VWITX through automatic monthly investing to reach my AA.

Swamproot · Post by **Swamproot** » Wed May 04, 2011 1:07 pm

I'm buying patience. My IPS says I need some large cap value in my Roth, and at 416.66 a month it will take 8 months to get the minimum to open it.

I also put some low limit orders in my taxable account that are having the effect of building up some cash with my monthly contributions. If stocks dive, I can still pick it up closer to the cost basis of my previous buys, and if they don't, I need to build up some cash anyway. The dang dentist says I need a bridge. ;-(

retcaveman · Post by **retcaveman** » Wed May 04, 2011 1:09 pm

I've been selling some stock. Plan on buying some I Bonds the end of the month. Otherwise, not buying anything.

Aptenodytes · Post by **Aptenodytes** » Wed May 04, 2011 1:14 pm

After several months implementing a major overhaul and streamlining I finally, as of this morning, have the AA where I want it.

So my bi-weekly contributions are going across the board.

YoungLion · Post by **YoungLion** » Wed May 04, 2011 1:37 pm

99% is being invested according to my IPS.

My 1% 'take a flyer' money is in cash right now. I am looking at companies that process or make products used in processing waste water from natural gas fracking. That extraction method is increasing and is likely to continue to do so. In many parts of the country, the waste water is stored underground in impermeable rock, but in the natural gas rich Marcellus formation in the northeast, the rock is permeable and the waste water has to be treated. Seems like there is money to be made there.

rustymutt · Post by **rustymutt** » Wed May 04, 2011 1:46 pm

260chrisb wrote:I hate this; many VG funds are at their 52 week highs! While I certainly loved buying strong in early 2009 when stuff was cheap it's killing me to buy now! I own about 10 different funds and ETFs in my account currently. So, what are you buying now and why?

Are you reinvesting your dividends back into these funds, or is this new money your worried about putting into these fund now the valuation is higher than in 09? I'm glad I don't have lots of cash to do something with right now. I would be in the same fix your in. I would be leaning towards large cap value funds here in the the USA. Only because they have low P/E ratios that seem to be priced correctly based on historic levels. I also like short term AAA industrial bonds right now. Outside of those 2 choices, I wouldn't have a good feeling about EM at all, and maybe some small cap value Developed markets. Keep in mind this is only my opinion. I don't give advise for a living like Rick, and Larry do.

Bogleheads.org

What are you buying now and why?

What are you buying now and why?

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The Boglehead philosophy for successful investing

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Stay the course or make changes?

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