Your asset allocation, and why?

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Momus
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Your asset allocation, and why?

Post by Momus » Tue Mar 20, 2012 4:48 am

I just want to know the minds of boglehead in general. It's easy to point someone read this book that book, but there is a difference between reading and doing it yourself. I am one of those people who read a lot of books but then being stupid and doing completely different thing thinking "I could do better" and it screwed me at the end... so... I am starting over and want to find comfortable asset allocation where I can have conviction in ups and downs

What is your asset allocation and how do you justify it? How often do you rebalance?

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corner559
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Re: Your asset allocation, and why?

Post by corner559 » Tue Mar 20, 2012 4:54 am

My allocation is as follows:

50% VG Total Market Index Fund
30% VG Total International Index Fund
10% VG REIT Index Fund
5% VG Small Cap Index Fund
5% VG Total Bond Index Fund

I have a lot of years until I retire, so I'm comfortable with a low fixed income allocation. I'm slightly weighted in Small Cap since I think in the long run Small Caps outperform the rest of the market. When I hit 40 I will increase my fixed income allocation to 10%.

Johm221122
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Re: Your asset allocation, and why?

Post by Johm221122 » Tue Mar 20, 2012 5:18 am

35% 500 index best fund in my 401(exp .79)25% and vanguard 10%in taxable
10 % spectrum income(I just believe it will out perform total bond marketuntill rates rise)
5% realestate (to diversify) in 401
10% stable value (best bond in 401)
10% vanguard extended market
5% trprice small value(401 small value tilt)will put in stable at 500,000
9% international explorer(risk hopefully reward will put in total international at 500,000 total portfolio mark)
9% spectrum international (will change and take less risk at500,000 in total international)
7% savings bonds(ef,safety,sleep at night money)
Rebalance every quarter if new money will not do it
Last edited by Johm221122 on Tue Mar 20, 2012 6:13 am, edited 6 times in total.

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Aptenodytes
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Re: Your asset allocation, and why?

Post by Aptenodytes » Tue Mar 20, 2012 5:25 am

70% equities / 23% bonds / 7% REITs (Why? Intuitive assessment of need and tolerance for risk). Equities are on a glide path.

Within equities:
----------------------

25% small (Why? expected premium)
40% value (Why? expected premium)

50% international (Why? approximate market cap with some home bias)

All my equity funds have holdings across a wide range of asset categories, so I report by category, not fund (REITs are sort of an exception).

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stemikger
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Re: Your asset allocation, and why?

Post by stemikger » Tue Mar 20, 2012 5:45 am

I'm 47 and in my 401K I have 60% in the Vanguard Institutional Index Fund and 40% in Barclays aggregate Bond Fund (my 401K dosen't have Vanguard Total Bond Index).

In my Traditional IRA I have everyting in the Vanguard Balanced Index Fund.

I read Peter Bernsteins article entitled the 60/40 solution and it made too much sense to ignore it.

I also don't feel I need anything but these two funds because I don't need to complicate a good thing.

(On a side note, I will be paying off the mortgage to my home at the end of 2012).

The enemy of a good plan is a perfect plan.

Stay the Course.
Last edited by stemikger on Tue Mar 20, 2012 7:40 am, edited 1 time in total.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

TRC
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Re: Your asset allocation, and why?

Post by TRC » Tue Mar 20, 2012 6:00 am

Age 34.

34% bonds and 66% stocks.

Bonds are a mix of TIPS (in roth IRAs) and total bond fund (in 401k).
Stocks are 70% US total stock fund and 30% total international index

I rebalance when stuff gets out of balance by 3%, and increase bonds by 1% as I age.

I chose this because other pros (mainy Bogle) and other REALLY smart people advise that this is a good allocation for managing risk and seeing growth. It's also really simple to manage and the costs are dirt cheap.

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DaleMaley
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Re: Your asset allocation, and why?

Post by DaleMaley » Tue Mar 20, 2012 6:14 am

I was 100:0 from age 22 until age 45. Why? Because I was young and could afford to take risk.

At age 45, I switched to 90:10. Why? The general guidelines I had read said to gradually shift to bonds as you age.

At age 53, I switched to 60:40. Why? I believe in Larry Swedroe's need, ability, and willingness to take risk. After saving and investing at least 15% of gross income for 31 years.......I know longer needed to take as much risk.

I plan on staying at 60:40 during retirement as well. In my case, this AA suits my needs.

Using data from 5 different studies, many people reduce their stock holdings as they age:

Image

The best fit regression line result was...... % stocks = 114 - age.
Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett

The Wizard
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Re: Your asset allocation, and why?

Post by The Wizard » Tue Mar 20, 2012 6:16 am

I'm 62 and have a target AA of 52% stocks and 48% non-stocks. I say non-stocks because I'm in TIAA-CREF (mostly) and have options other than bonds.
I have a 2% tolerance band on stocks that triggers a 1% rebalancing from time to time.
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Austex1
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Re: Your asset allocation, and why?

Post by Austex1 » Tue Mar 20, 2012 6:32 am

I'm not sure how helpful this is without more information about the people whose AAs you now know. Without their age (which some have provided), amount of time till retirement, general financial picture, i.e. received big inheritance, pension, etc. the AA doesn't mean much, if anything, does it? I'm curious as well, but find that I can't really conclude anything from the numbers being posted.

YDNAL
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Re: Your asset allocation, and why?

Post by YDNAL » Tue Mar 20, 2012 7:08 am

Momus wrote:I just want to know the minds of boglehead in general. It's easy to point someone read this book that book, but there is a difference between reading and doing it yourself. I am one of those people who read a lot of books but then being stupid and doing completely different thing thinking "I could do better" and it screwed me at the end... so... I am starting over and want to find comfortable asset allocation where I can have conviction in ups and downs

What is your asset allocation and how do you justify it? How often do you rebalance?
My allocation is unimportant.

Why?... because YOU should justify your AA based on personal circumstances - to include ability and need to take risk. The assets you project to accumulate, other sources of income/asssets, and your expected need from the portfolio are driving forces.

I rebalance when the AA is off from established rebalancing Bands.
https://institutional.vanguard.com/iwe/pdf/FAIPRTP.pdf
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

HongKonger
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Re: Your asset allocation, and why?

Post by HongKonger » Tue Mar 20, 2012 7:12 am

Age 39. All ETFs.

70% equities
15% Bonds (10% Hong Kong Govt, 5% European TIPS)
15% REITS

Within Equities (roughly):

50% total market
25% Small Value
25% Large Growth

40% US
30% Asia & EM
30% Europe

Rebalance/add/tinker quite a lot. Spreadsheets are set at 5/20 but it depends on my mood. Sometimes I'll skim some off at 10-15%.

bigred77
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Re: Your asset allocation, and why?

Post by bigred77 » Tue Mar 20, 2012 7:47 am

Age: 27

80/20 - Stocks:Fixed Income

15% - FXSIX - Spartan 500 Institutional Index (due too 401k limitations, but hey .03 ER).
15% - FSTMX - Spartan Total Market Index (US TSM)
20% - FSGUX - Spartan Global ex-US index
10% - IWN - Russel 2000 value index
10% - RWO - DJ Wilshire Global Real Estate Index
5% - EEM - Emerging Markets Index
5% - SCZ - International Small Cap Index (EAFE only, no EM)

10% - FBIDX - Spartan US Bond Index
10% - TIP - Barclays TIPs Bond Fund

No transaction costs of any kind with Fidelity (except for RWO, I only rebalance into that fund once a year for $7.95 trade commision)
Reasonable (to me at least) Small and Value Tilt.
Reasonable (to me at least) US home country bias when compared to global market weights.
Reasonable (to me at least) International tilt to Emerging markets and Small Caps.

Significant exposure to REITs. I've contemplated that this may be too high since I get exposure with IWN and FSTMX in addition to RWO. I'm comfortable with it as I view REITs as a seperate asset class with some unique diversification benefits.

I rebalance to underweighted asset classes with new contributions and do a larger, full rebalance every year on my birthday if need be.
Currently all of my money (for purposes of my long-term, retirement portfolio) is in tax advantaged accounts. Additional taxable savings are earmarked for other, more immediate goals and are invested accordingly (CDs, Short term Muni index.)

The plan is to hold tight with this AA untill age 38, at which point I will move to 70:30 mix. I will hold at 70:30 untill age 50 when I move to a 60:40 split until retirement. I hope to be 50:50 through my retirement period. This is all of course subject to material changes in my life and/or financial position which may change my need or willingness to take risk.

Total portfolio ER is 0.29 per Morningstar.

sscritic
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Re: Your asset allocation, and why?

Post by sscritic » Tue Mar 20, 2012 7:53 am

YDNAL wrote: My allocation is unimportant.

Why?... because YOU should justify your AA based on personal circumstances - to include ability and need to take risk. The assets you project to accumulate, other sources of income/asssets, and your expected need from the portfolio are driving forces.
I agree with Landy. I am old and my pension and social security bring in twice what I need to live a basic life of minimal expense. I have four young grandchildren. These are the determining factors in my asset allocation. If your circumstances are similar to mine, knowing my AA might help you. Let me know if your circumstances match mine.

The Wizard
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Re: Your asset allocation, and why?

Post by The Wizard » Tue Mar 20, 2012 8:31 am

YDNAL wrote: My allocation is unimportant.

Why?... because YOU should justify your AA based on personal circumstances - to include ability and need to take risk. The assets you project to accumulate, other sources of income/asssets, and your expected need from the portfolio are driving forces....
This is true, of course.
But what mildly concerns me is that there is no one "Boglehead Way" of investing properly. There's likely quite a diversity here amongst folks of roughly the same age and wealth. But I don't see any simple way (or reason) to determine that...
Attempted new signature...

PaddyWhack
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Re: Your asset allocation, and why?

Post by PaddyWhack » Tue Mar 20, 2012 8:49 am

Age 42

40% VG Total Market Index Fund
25% VG Total International Index Fund
10% VG REIT Index Fund
25% VG Total Bond Index Fund

After requesting a portfolio review last year on Bogleheads and based on the feedback I decided that I needed to simplify my portfolio and figured this was a good solution. I could probably do with increasing my bonds and international allocations.
Last edited by PaddyWhack on Wed Mar 21, 2012 10:51 am, edited 2 times in total.

mikegerard
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Re: Your asset allocation, and why?

Post by mikegerard » Tue Mar 20, 2012 8:58 am

Age 44

Large Cap 47%
Small Stocks 17%
International 13%
Emerging Mks 13%
Cash/Bonds 10%

About 95% fidelity and vanguard index funds. I'm very aggressive in small caps and emerging markets. But I've gone from 0 to 1.5m in 15 years so aggressive seems to work for me. I am slowing adding bonds and dropping small caps.

Mike

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englishgirl
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Re: Your asset allocation, and why?

Post by englishgirl » Tue Mar 20, 2012 9:09 am

Age: 43.

TSM: 30
International: 30
TBM: 20
TIPs: 20

Stock/bond: 60:40 - why? Because at everything more risky than that I was worried. Once I hit 60:40 I quit worrying for some reason, so there I have stayed.
US/international: 50:50 - why? Because I had a legacy UK pension account that is hard for me to move, and it is in the FTSE UK index. It seemed easier to work around it, and add TISM to balance it out with more countries. And 50:50 is a nice round number, even though if I was going totally for market weight it'd be more like 40:60 - I overweight the US because I live here now and am paid in dollars.
TBM/TIPs: 50:50 - why? Because Taylor said so.

Rebalancing - once or twice a year. My 401k is set to rebalance automatically twice a year, plus actually my TSM and TBM are held as Balanced Index so they are rebalanced daily by VG. I have a spreadsheet where I track my portfolio, and I'll rebalance the Roth or 401k if I see anything >5% out of whack. That doesn't happen too often though - mostly I rebalance by adjusting where new contributions go.
Sarah

therub
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Re: Your asset allocation, and why?

Post by therub » Tue Mar 20, 2012 9:49 am

Age: 31

10% BND (Total Bond) / VBTIX (Total Bond in 401k)
50% VT (All World Stock)
15% VB (Small Cap US)
15% VSS (Small Cap International)
10% VNQ (REIT)

The idea behind my equity portfolio is first, capturing the whole worldwide market in its entirety. VT was the widest exposure I could find. Then, I added in asset classes that it didn't include, or that I wanted to overweight.

My portfolio was reviewed by bogleheads here: http://www.bogleheads.org/forum/viewtop ... =1&t=55476
Fees are the rub.

Littlerhody
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Re: Your asset allocation, and why?

Post by Littlerhody » Tue Mar 20, 2012 10:10 am

Age 52:

Individual taxable account:

80% Bond funds with Vanguard. Mostly intermediate bond funds, some short, some long. Also 70% of that tax exempt. REason is I do not work and need the income.

20% tax managed funds

IRA:

80% Stock/specialty funds

20% Bond funds

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ofcmetz
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Re: Your asset allocation, and why?

Post by ofcmetz » Tue Mar 20, 2012 10:27 am

The Wizard wrote:
YDNAL wrote: My allocation is unimportant.

Why?... because YOU should justify your AA based on personal circumstances - to include ability and need to take risk. The assets you project to accumulate, other sources of income/asssets, and your expected need from the portfolio are driving forces....
This is true, of course.
But what mildly concerns me is that there is no one "Boglehead Way" of investing properly. There's likely quite a diversity here amongst folks of roughly the same age and wealth. But I don't see any simple way (or reason) to determine that...

Boglehead way to me is low cost indexing with both stocks and bonds (aka fixed income) included in a portfolio. I do agree that knowing how someone else invests is of little value unless you share very similar circumstances. I'm 32 and 70/30 along with being vested in a pension.
Never underestimate the power of the force of low cost index funds.

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tc101
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Re: Your asset allocation, and why?

Post by tc101 » Tue Mar 20, 2012 11:00 am

Age 62 and recently retired

45% of what I have is tied up in real estate.

15% house I live in
30% other real estate investments
55% liquid assets at vanguard an other institutions

Break down of liquid assets at vanguard an other institutions

55% fixed income, 45% equity
Break down of equity - 55% USA, 45% international

Why that mix? I thought it out several years ago and it seemed about right. I then decided it was more important to pick something and stick with it rather than continuously fine tuning it.
. | The most important thing you should know about me is that I am not an expert.

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BolderBoy
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Re: Your asset allocation, and why?

Post by BolderBoy » Tue Mar 20, 2012 11:10 am

Age: 61 (retired).

All Vanguard mutuals.

60/40 Bonds/Stocks

TSM: 30
International: 10
TBM: 45
TIPs: 15

recently rebalanced.

scrabbler1
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Re: Your asset allocation, and why?

Post by scrabbler1 » Tue Mar 20, 2012 11:24 am

Littlerhody wrote:Age 52:

Individual taxable account:

80% Bond funds with Vanguard. Mostly intermediate bond funds, some short, some long. Also 70% of that tax exempt. REason is I do not work and need the income.

20% tax managed funds

IRA:

80% Stock/specialty funds

20% Bond funds
Ah, finally someone who has an AA kinda like mine. :)

I have two different AAs, one for my taxable accounts (I am an early retiree at age 48) and the other for my IRA, something I will not be accessing for at least 12 years. For my taxable accounts, I am at about 70/30 in favor of bonds (bond funds) to generate monthly dividends to more than cover my monthly expenses. There is a stock fund portion in there for future growth but that fund also generates some dividends (currently taxed at 0% federally) which for now are reinvested. Most of the bond funds are taxable but some are tax-exempt, a holdover from my working days.

In my IRA, I am at 55/45 in favor of stocks (stock mutual fund) which reflects a recent rebalancing to get me back to that desired level. I anticipate lowering the stock portion gradually over time but for now I will keep it there.

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grap0013
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Re: Your asset allocation, and why?

Post by grap0013 » Tue Mar 20, 2012 11:42 am

50% domestic SCV (ideally PXSV)
25% developed international SCV (ideally SFILX)
25% emerging SCV (ideally DGS)

100% equities since mid 2007 when I started investing. Plan to keep this until age 40 (now 31 yo) then add 3%/year treasury bonds then ride 50:50 allocation til I die. I'm looking at least semi retirement at 45-50 with full retirement at 55-60 depending on market conditions. This strategy historically has produced some pretty sweet returns. If you believe in the equity premium then you should believe in the SCV premium because the data are just as strong. I have 0% chance of capitulation in a down market. I have a lot of discipline in other areas of my life and I expect this to be no different. I know the data and logic rules my decisions rather than emotion with regards to money. Spouse and I have very stable jobs (she has X2 doctorate degrees that could get her 2 very different jobs if she had to).
There are no guarantees, only probabilities.

Doc7
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Re: Your asset allocation, and why?

Post by Doc7 » Tue Mar 20, 2012 12:17 pm

Age 27

Income just under 6 figures
Retirement portfolio just under 6 figures (after accounting for tax bite out of my 401K in future retirement withdrawal years)

Investments are in Roth IRA and Trad 401K for the most part (I have some roth 401K money from my lower-income first couple of years with the company)

AA for unified portfolio

70% Equities
- 65% US TSM
- 20% Total International
- 15% REIT

30% Total Bond Market


I was 60 / 40 thru the 07/08 decline (my first 2 years of investing). I never once was worried about losses, so after introspection etc I switched at Age 25 to a 70/30. After my 27th bday a few weeks ago I added in the REIT allocation. Maybe in 5-6 years I'll think about SCV and other bond options, for now I think this will be pretty good.

Hopefully for several years I can do this with my Vanguard ira and work 401k offered funds. Eventually I'll need to move some funds to my 401K brokerage account where I can use free ETF trades on Schwab offerings, because Reit and Total int isn't a fund offered in my 401K. For now though I can maintain this AA with just the two current accounts.

As part of my new IPS, which was updated to add in REIT (after a couple of years of considering Swedroe etc), I also switched from quarterly rebalance to a Band Trigger style. +/- 5% bands, or 25% of the portfolio AA of smaller subclasses.

jvini
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Re: Your asset allocation, and why?

Post by jvini » Tue Mar 20, 2012 2:05 pm

I'm 45. I use the formula 112-age to get equity and bond mixture. 100 minus age is too conservative for me. 120 is too aggressive. I believe in averages and skew a small bit aggressive. I will eventually get to a 55-45 equity mix and stay there, although if I do very well, I will shift to more bonds, as you only have to get rich once. I know inflation can really devalue cash, though, and it's important to remember that.

I use Fidelity which is commission free and dollar cost average monthly. I rebalance once a year around the same date.

IJR, IJH, IVV make up my domestic equities. Rather than use a total U.S stock market index that skews larger cap, I invest in each of them equally per month. 34% total of monthly investment (Approx 11% each). I'm over weigted slightly in domestic stocks.

VXUS- 24% This is a broad Vanguard world index ex U.S. it has large, med. and small cap international stocks including emerging markets.

BND-32% Intermediate term bond fund index.

I also have 5% in a reit index and 5% in a global materials index along with a cash emergency fund. MXI and VNQ aren't necessary in my opinion but occasionally these do move radically different to my equities and I like being slightly more diversified.

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Jake46
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Re: Your asset allocation, and why?

Post by Jake46 » Tue Mar 20, 2012 2:32 pm

Age 65, retired.

65% bonds/35% equities

Comfortable with age in bonds approach.

Momus
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Re: Your asset allocation, and why?

Post by Momus » Wed Mar 21, 2012 7:36 am

After reading posters asset allocation, I see the general trend of 80/20 - 50/50 depending on age. I am 28 yo. I might go with 70/30 since it provides me with some cushion if stocks go haywire. The problem with me is the emotion sometimes get the best of me even though I know it will bounce back lol. This way at least I know I can stick with my strategy through ups and downs. I was 100% in stocks before but I can't sleep well having portfolio -20% in Oct...

It's interesting NONE of the portfolio mentions gold/precious metal as their major holding... Maybe gold does not really have a place in the long term/valuation to frothy too hold?

staustin
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Re: Your asset allocation, and why?

Post by staustin » Wed Mar 21, 2012 8:44 am

I'm 43:

45% bonds
21% cash
13% TSM
5% Emerging markets
9% gold/commodities
7% reits

I'm working my bond exposure down. My long term goal is to get to a 4 X 25 construction of cash, total bond market, stocks, commodities/reits. I'm increasing commodities/hard assets as the fed repression continues. In a good enough position today to have income stream sufficient to save a good amount thus I don't need to take excessive risks in the market.

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ObliviousInvestor
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Re: Your asset allocation, and why?

Post by ObliviousInvestor » Wed Mar 21, 2012 9:14 am

Age 27.

56% Vanguard Total Stock Market Index Fund
24% Vanguard Total International Stock Index Fund
20% Vanguard Total Bond Market II Index Fund

(via 100% Vanguard LifeStrategy Growth)

The reasoning in brief is that I realized I'm often tempted to fiddle with my allocation based on something I've read that made a convincing-sounding argument. While I'd be equally happy with any of a hundred other similar allocations, I like that I now have something that allows me to be hands-off, preventing such temptations.
Mike Piper, author/blogger

DVMResident
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Re: Your asset allocation, and why?

Post by DVMResident » Wed Mar 21, 2012 10:38 am

Age 29, pseudo-signal (not married), no kids, no debt, free rent probably for the next 3-5 years

AA

70 (35 Domestic /35 Int )/30

Domestic
20% VG S&P 500 (core fund)
5% VG REIT
10% VG SCV

Inq
20% VG Total International (core funds)
7.5% VG Emerging Markets
7.5% VG International Small Cap (only ETF)

Bonds
20% VG Total Bond
10% VG High Yield

I don't plan on changing the AA for years, maybe age 45-50.
I think there will be a performance premium of SCV over the long term, but the risk (aka volatility) needs to mitigated with S&P which will experience periods of low correlation. Ditto on the REIT, though there is quite a bit of overlap with the SCV.

Similar arguments on the emerging markets and international small cap (and ETF for low fees).

Total bond will hopefully add stability to the overall portfolio. High Yield (unpopular here, I know) bonds behavior differently then S&P. I hold them because I expect them to have periods of low correlation with the core funds and I think Ferri did a good job showing that they have.

Overall, I've focused on asset classes I hope behavior differently, but over the next couple decades will revert to the mean. In reality, my geometric annual return will probably be -0.5-+0.5% 3 core funds portfolio :wink: In the mean time, I'm focused on keeping my expenses low and investing as much as possible (currently ~75% of gross) while my obligations are minimal.
Last edited by DVMResident on Wed Mar 21, 2012 11:11 am, edited 1 time in total.

Dave C.
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Re: Your asset allocation, and why?

Post by Dave C. » Wed Mar 21, 2012 10:40 am

stemikger wrote:I'm 47 and in my 401K I have 60% in the Vanguard Institutional Index Fund and 40% in Barclays aggregate Bond Fund (my 401K dosen't have Vanguard Total Bond Index).

In my Traditional IRA I have everyting in the Vanguard Balanced Index Fund.

I read Peter Bernsteins article entitled the 60/40 solution and it made too much sense to ignore it.

I also don't feel I need anything but these two funds because I don't need to complicate a good thing.

(On a side note, I will be paying off the mortgage to my home at the end of 2012).

The enemy of a good plan is a perfect plan.

Stay the Course.

The Bernstein article you referenced was very informative, I tried to find it again for a refresher....but I can't find it anywhere. Does anyone know of a link or site? Thank you in advance. :shock:
Easy does it/Live & Let Live/One day at a time. Thanks Bill.

Dandy
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Re: Your asset allocation, and why?

Post by Dandy » Wed Mar 21, 2012 11:27 am

44% equities - 24% Total Stock Mkt, 12% Total Int'l/FTSE ex us, 4% Smal Cap, 4% REIT
56% fixed income - 21% "safe" (CDs, EE Bonds, etc), 17% Short Term bond funds, 18% Intermediate bond funds (tot bond/inflation pro/GNMA)

Age 64 retired, current withdrawal rate ,<2%, moderate risk taker, concerned about historic low interest rates - no need to take excessive interest
rate risks, Plan to glide to 40% equities by age 70 by eliminating Small Cap, hoping to delay SS until age 70, drawing down "safe" assets for now. Ideally, would like to have 1/3 safe, 1/3 Inflation Pro, 1/3 Total Bond.

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FlyHi
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Re: Your asset allocation, and why?

Post by FlyHi » Wed Mar 21, 2012 12:20 pm

Age 73, retired, want capital preservation and only interested in total return.

Cash 12% (CD Ladder)
Bonds 53% (I Bonds/Wellesley/TCW Core Fixed Income/VG Short Term Bond Indx Adm/Weitz/Short-Interm. Inc)
Stocks 35% (Wellesley/Yacktman/Oakmark Int'l)
“If you want to feel rich, just count the things you have that money can't buy”

manuvns
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Re: Your asset allocation, and why?

Post by manuvns » Wed Mar 21, 2012 1:42 pm

i keep age-10 in bonds . Just to be little aggressive

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TheDan666
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Re: Your asset allocation, and why?

Post by TheDan666 » Wed Mar 21, 2012 2:00 pm

Age: 37

Basic Plan: Age-10 in bonds

Equities:
70% TSM
30% Combo of FTSE-All World-ex us(have taxable capital gain I don't want to pay) and Total International. Any additional international goes to Total International

Bonds:
50% TBM
50% TIPS

Simple, easy to manage.

--The Dan

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Clearly_Irrational
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Re: Your asset allocation, and why?

Post by Clearly_Irrational » Wed Mar 21, 2012 2:19 pm

Age 39

Portfolio objective: Consistent 8% real returns

30% VBR (Small cap value)
20% VWO (Emerging market)
30% TLT (Long US treasuries)
20% GLD (Gold, rotated with cash based on real interest rates)

Reason: I prefer lower beta, higher skew and lower kurtosis than is normal.

Concerns: I can handle tracking error just fine, but I'm not fond of big drawdowns. Historical drawdown for this portfolio is about 12.5% annually rebalanced or about double that for point in time measurements. Livable but higher than I'd like.

Currently I'm doing some research to see if I can move to 40/60 instead of 50/50 with the right asset mix, but I haven't worked out all the details yet.

Notes: I don't keep all of my wealth in financial securities

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rgb73
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Re: Your asset allocation, and why?

Post by rgb73 » Thu Mar 22, 2012 2:32 am

stemikger wrote:
I'm 47 and in my 401K I have 60% in the Vanguard Institutional Index Fund and 40% in Barclays aggregate Bond Fund (my 401K dosen't have Vanguard Total Bond Index).

In my Traditional IRA I have everyting in the Vanguard Balanced Index Fund.

I read Peter Bernsteins article entitled the 60/40 solution and it made too much sense to ignore it.

I also don't feel I need anything but these two funds because I don't need to complicate a good thing.

(On a side note, I will be paying off the mortgage to my home at the end of 2012).

The enemy of a good plan is a perfect plan.

Stay the Course.



The Bernstein article you referenced was very informative, I tried to find it again for a refresher....but I can't find it anywhere. Does anyone know of a link or site? Thank you in advance.
Think this is it:

http://web.archive.org/web/200612140619 ... in6040.pdf

Dave C.
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Location: Mesa, AZ

Re: Your asset allocation, and why?

Post by Dave C. » Thu Mar 22, 2012 8:16 am

rgb73 wrote:
stemikger wrote:
I'm 47 and in my 401K I have 60% in the Vanguard Institutional Index Fund and 40% in Barclays aggregate Bond Fund (my 401K dosen't have Vanguard Total Bond Index).

In my Traditional IRA I have everyting in the Vanguard Balanced Index Fund.

I read Peter Bernsteins article entitled the 60/40 solution and it made too much sense to ignore it.

I also don't feel I need anything but these two funds because I don't need to complicate a good thing.

(On a side note, I will be paying off the mortgage to my home at the end of 2012).

The enemy of a good plan is a perfect plan.

Stay the Course.



The Bernstein article you referenced was very informative, I tried to find it again for a refresher....but I can't find it anywhere. Does anyone know of a link or site? Thank you in advance.
Think this is it:

http://web.archive.org/web/200612140619 ... in6040.pdf

Thank you rgb73, the link you sent was correct for the Bernstein 60/40 article. Good reading from a master.
Easy does it/Live & Let Live/One day at a time. Thanks Bill.

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czeckers
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Location: Upstate NY

Re: Your asset allocation, and why?

Post by czeckers » Thu Mar 22, 2012 7:17 pm

So many different portfolios -- goes to show there indeed are many roads to Dublin.

Age 38, all Vanguard funds in tax-deferred retirement account.

Stock allocation is roughly 115-age. I update the actual allocation every 5 years to keep the numbers simple.

16% Large cap index
16% Small cap value index
16% Developed international index
16% emerging markets index
16% US REIT index

On the bond side I have
10% intermediate US treasury bond fund
10% TIPS fund


My theory is that I'd like to have multiple assets which have a somewhat low correlation with each other. Since I don't know which asset class is going to be the best or worst going forward, I keep equal percentages of each. If you exclude the REITS, I have a 50:50 domestic/international mix within the stock portion. If you include them, the mix is 60:40. I figure anywhere between 30%-50% international percentage is reasonable.

This portfolio should have pretty large tracking error when compated to a total market approach. However, it makes me happy to always have an asset class that is down relative to the others to put new money into. It makes me feel that I really am buying low.

-K
The Espresso portfolio: | | 16% LCV, 16% SCV, 16% EM, 8% Int'l Value, 8% Int'l Sm, 8% US REIT, 8% Int'l REIT, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."

hazlitt777
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Location: Wisconsin

Re: Your asset allocation, and why?

Post by hazlitt777 » Thu Mar 22, 2012 7:35 pm

Momus wrote:What is your asset allocation and how do you justify it? How often do you rebalance?
my target is:
33% World stock marketfunds/total stock market funds
33% intermediate bond index/cash
33% gold bullion

I've been buying just bonds and stocks to "rebalance."

I "justify it" by its simplicity and broad diversification. I want to protect what I have as much as try to grow it. It is a modified permanent portfolio and I like its stability and what I believe (controversial) to be a conservative growth portfolio.

Momus
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Re: Your asset allocation, and why?

Post by Momus » Fri Mar 23, 2012 10:15 am

33%X3 without long term treasuries (bond), is it better than 25%X4?

hazlitt777
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Location: Wisconsin

Re: Your asset allocation, and why?

Post by hazlitt777 » Fri Mar 23, 2012 10:45 am

Momus wrote:33%X3 without long term treasuries (bond), is it better than 25%X4?
I don't know.

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Clearly_Irrational
Posts: 3087
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Re: Your asset allocation, and why?

Post by Clearly_Irrational » Fri Mar 23, 2012 11:01 am

hazlitt777 wrote:
Momus wrote:33%X3 without long term treasuries (bond), is it better than 25%X4?
I don't know.
Probably not if we experience another high interest rate environment. Of course that hasn't been the case for quite a while now.

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kenyan
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Re: Your asset allocation, and why?

Post by kenyan » Fri Mar 23, 2012 11:14 am

Likely more complicated than it needs to be, but it's working for me so far.

Inspired by the TrevH 4-slice portfolio, but with minor modifications for preference and available fund choice - added in a bit of REITs and only 40% international rather than 50%, as that has been slightly more efficient over measurable history.

50% small, 50% large
50% value, 50% blend
60/40 domestic/international
5% REIT (considered as part of domestic, not considered in style boxes)

Age - 10 in bonds, which are 60/40 TBM/TIPS
Retirement investing is a marathon.

peppers
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Re: Your asset allocation, and why?

Post by peppers » Fri Mar 23, 2012 6:00 pm

Total Bond Market 50%
Total Stock Market 50%
Age 58
Keeps the rebalancing simple.
"..the cavalry ain't comin' kid, you're on your own..."

benway
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Re: Your asset allocation, and why?

Post by benway » Fri Mar 23, 2012 6:16 pm

I have a 50/50 portfolio. I was 70/30 and found I didn't have the stomach for it. When I got back to pre-crash levels, I dialed back the risk but will still meet my goal. That was before stumbling on Bogleheads and thinking about true need to take risk. Coincidentally, I just found an article on the Vanguard site a few minutes ago about a 50/50 portfolio.
From the "Roaring Twenties" through the "Great Recession," a hypothetical portfolio with a 50/50 stock/bond balance was, on average, likely to enjoy remarkably similar real returns regardless of prevailing economic conditions:
https://personal.vanguard.com/us/insigh ... e-10182011

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