How Scalabale is the 3/4 Fund portfolio?

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bligh
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How Scalabale is the 3/4 Fund portfolio?

Post by bligh » Wed Apr 04, 2018 4:25 pm

So I was wondering recently, how far could you scale (in terms of portfolio size) the 3 or 4 fund portfolio before you felt it was no longer the most sensible option?

Let's imagine the standard 3 or 4 fund portfolio. Pick a sensible Asset allocation.. say 60/40 :
40% US Total Stock Market
20% Total International Ex-US Stock Market
30% US Total Bond
10% US International Ex-US Bond.

A pretty standard and conservative portfolio according to most right? I think most would feel comfortable holding $5million in a portfolio of this type. .. Even $20 million.

But how about $200 million? or $2 Billion?

Is there a point at which you believe that a portfolio could get too big to be held solely in the 3 or 4 fund portfolio? If so, what is that point and why? What do you think you would need to do differently past that point?
Last edited by bligh on Wed Apr 04, 2018 4:32 pm, edited 1 time in total.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by RadAudit » Wed Apr 04, 2018 4:29 pm

bligh wrote:
Wed Apr 04, 2018 4:25 pm
Is there a point at which you believe that your portfolio is could be too big to be held solely in the 3 or 4 fund portfolio?
Not any point I'm likely to get to.
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by Darth Xanadu » Wed Apr 04, 2018 4:33 pm

If I had $200m, I'm not sure I would be invested in stocks at all, I would just stick to the safest 1%-2% returns I could find.
My friends said stick to your guns, but instead I just got stuck.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by kosomoto » Wed Apr 04, 2018 4:36 pm

You could invest in private equity or alternatives too but I don’t see why it wouldn’t work. As long as the economy doesn’t collapse you should have a positive return over time.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by Doc » Wed Apr 04, 2018 4:37 pm

You are not going to like this answer but it is $15,000.

That's because since Vanguard's typical minimum to buy a mutual fund is $3k so $15k lets me buy 5 different funds instead of only 4.
bligh wrote:
Wed Apr 04, 2018 4:25 pm
A pretty standard and conservative portfolio according to most right?
No not right and that's why you won't like my first statement. There is no agreement that a 3 or 4 fund portfolio is "standard", it's just easy.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by inittowinit » Wed Apr 04, 2018 4:39 pm

One's goals would likely shift once such portfolio sizes are reached, such that alternative investment approaches might become preferable. It all depends on one's goals though.

For individuals trying to generate a certain annual income amount for a given, finite period of time, I can't foresee many situations where some combination of the 3/4 fund portfolio wouldn't be considered adequate to meet their needs (notwithstanding a variety of caveats including tax efficiency, estate planning, etc.).
Last edited by inittowinit on Wed Apr 04, 2018 4:41 pm, edited 4 times in total.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by ThriftyPhD » Wed Apr 04, 2018 4:39 pm

The only thing I can think of would be the expense ratio. At some point even a 1 or 2 bps difference is a lot of $$$. Obviously not anymore relative to the size of the portfolio, but once you get into the $billion range it might make sense to buy and hold individual stocks yourself. However, with that much AUM you would probably qualify for institution shares with even lower ER. :confused
Last edited by ThriftyPhD on Wed Apr 04, 2018 4:40 pm, edited 1 time in total.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by alex_686 » Wed Apr 04, 2018 4:39 pm

It can scale up very far. However, somewhere north of 5 million other alternatives open up.

Building a bond portfolio that more closely matches you goals and risk tolerances.

Replicating the S&P 500 in taxable with individual stocks to take advantages of certain tax loss harvesting / tax alpha strategies.

Investing in alternative assets, such as direct holding of real estate, hedge funds, etc.

Now, just because you can do these things does not mean you should.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by retiredjg » Wed Apr 04, 2018 4:45 pm

In my mind, the stock portion of the 3/4 fund portfolio is scalable to essentially any conceivable number. The bond choices might need to change depending on one's tax bracket because a very large portfolio will not be able to be held all in tax-advantaged accounts.

In a case where the owner is in a high tax bracket, tax-exempt bonds are usually suggested for the bonds that are held in the taxable account.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by MotoTrojan » Wed Apr 04, 2018 4:46 pm

Darth Xanadu wrote:
Wed Apr 04, 2018 4:33 pm
If I had $200m, I'm not sure I would be invested in stocks at all, I would just stick to the safest 1%-2% returns I could find.
This is borderline reckless.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by Darth Xanadu » Wed Apr 04, 2018 4:48 pm

MotoTrojan wrote:
Wed Apr 04, 2018 4:46 pm
Darth Xanadu wrote:
Wed Apr 04, 2018 4:33 pm
If I had $200m, I'm not sure I would be invested in stocks at all, I would just stick to the safest 1%-2% returns I could find.
This is borderline reckless.
I know. How do you think I got to $200m in the first place?
My friends said stick to your guns, but instead I just got stuck.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by arcticpineapplecorp. » Wed Apr 04, 2018 4:55 pm

Just pulled up the latest report for my pension fund. http://sers.pa.gov/pdf/Press_Releases/2 ... elease.pdf

They say the pension fund earned 15.1% net of fees for 2017. It is currently 80/20 to my knowledge. Yes that's risky for a pension fund. But they've got lousy returns from the great recession and high fees to overcome, remember?

The Vanguard life strategy growth fund earned 11.92% for 2017 (according to morningstar).

So the pension fund won that one over a one-year time period (2017).

The report also says the pension fund earned 9.8% from 4/1/09-12/31/17.

Not sure if this is entirely accurate because there were contributions and withdrawls and I don't have those exact amounts (so feel free to correct me) but I did the following (used 105 months for 4/1/09-12/31/17):

=FV(.098/12,105, 0, -10000) and got $23,490.65

While morningstar shows the lifestrategy growth fund from 4/1/09-12/31/17 did:

$29,527.28

That's a 12.5% return over the same time period (4/1/09-12/31/17) isn't it?

=FV(.125/12,105,0,-10000)

Vanguard lifestrategy (same 80/20 but just 4 funds) beat the pants off the pension fund from 4/1/09-12/31/17. Don't take my word for it. See for yourself:

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

I'm only using these cherry picked numbers because they're the ones the pension fund used to make their returns look so good. Were they? Not over the long term they weren't. They would have done better putting it all in vanguard's life strategy fund. But they can now gloat the pension fund's fees were down to 0.47% per year (down from almost 1% in 2011).

The pension fund manages "over" $29.1 billion, so I say, sure why not use 4 funds (lifestrategy growth) instead of what they're doing (using hedge funds :oops: ). It would have been far superior returns and much less cost. What's size got to do with it? Invest in the market to get the market's return regardless of how much or how little you have.

What do you think now?
Last edited by arcticpineapplecorp. on Wed Apr 04, 2018 6:34 pm, edited 2 times in total.
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by InvestorThom » Wed Apr 04, 2018 5:33 pm

alex_686 wrote:
Wed Apr 04, 2018 4:39 pm
It can scale up very far. However, somewhere north of 5 million other alternatives open up.

Building a bond portfolio that more closely matches you goals and risk tolerances.

Replicating the S&P 500 in taxable with individual stocks to take advantages of certain tax loss harvesting / tax alpha strategies.

Investing in alternative assets, such as direct holding of real estate, hedge funds, etc.

Now, just because you can do these things does not mean you should.
Is $5M the threshold for this strategy? I would have thought $10M.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by ThrustVectoring » Wed Apr 04, 2018 5:34 pm

At a truly enormous amount of wealth, you're likely better off paying someone to replicate the S&P 500 index with individual stocks, tax-loss harvesting losers, and donating appreciated stocks to donor-advised funds.

Eg, if your $10k of GM stock doubles and your $10k of Ford stock gets wiped out, and they were weighted the same in the S&P 500 to start, you'd get little tax benefit from holding the index. If you held the stocks, though, you could donate the $20k of GM stock in-kind, repurchase it immediately with new funds, and take both the $10k capital loss from Ford and the $20k deduction for charitable contribution.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by oldcomputerguy » Wed Apr 04, 2018 6:00 pm

MotoTrojan wrote:
Wed Apr 04, 2018 4:46 pm
Darth Xanadu wrote:
Wed Apr 04, 2018 4:33 pm
If I had $200m, I'm not sure I would be invested in stocks at all, I would just stick to the safest 1%-2% returns I could find.
This is borderline reckless.
Why? At 1%, the return on $200M would be $2M per year. I could live quite nicely for the rest of my life on $2M per year.
:mrgreen:
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by randomguy » Wed Apr 04, 2018 7:46 pm

InvestorThom wrote:
Wed Apr 04, 2018 5:33 pm
alex_686 wrote:
Wed Apr 04, 2018 4:39 pm
It can scale up very far. However, somewhere north of 5 million other alternatives open up.

Building a bond portfolio that more closely matches you goals and risk tolerances.

Replicating the S&P 500 in taxable with individual stocks to take advantages of certain tax loss harvesting / tax alpha strategies.

Investing in alternative assets, such as direct holding of real estate, hedge funds, etc.

Now, just because you can do these things does not mean you should.
Is $5M the threshold for this strategy? I would have thought $10M.
Wealthfront does it with 100k. It depends on how much tracking error you are willing to accept. The minimum sort of depends on if anyone is providing this service at a reasonable fee. Other than wealthfront, most of the companies that I know of charge quite a bit for the service.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by pkcrafter » Wed Apr 04, 2018 8:53 pm

retiredjg wrote:
Wed Apr 04, 2018 4:45 pm
In my mind, the stock portion of the 3/4 fund portfolio is scalable to essentially any conceivable number. The bond choices might need to change depending on one's tax bracket because a very large portfolio will not be able to be held all in tax-advantaged accounts.

In a case where the owner is in a high tax bracket, tax-exempt bonds are usually suggested for the bonds that are held in the taxable account.
+1 and done. The 3/4 fund portfolio is scalable.

Paul
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by golfCaddy » Wed Apr 04, 2018 10:58 pm

As low as $30 million and you might start to get access to various exotic investments: hedge funds, private equity, and venture capital. With DB pensions becoming a relic of another age, alternative funds are looking to UHNW individuals and family offices to fill the gap. That's not to say those are wise investments, and personally, with no need to take risk, I might put it all into TIPS and be done with it.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by GibsonL6s » Thu Apr 05, 2018 12:01 am

Bridgewater has billions in various ETFs so you could scale a 3 or 4 fund portfolio up to a very large number. Just because more wealth gives you access to more exotic investments doesn’t mean you have to invest there.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by CurlyDave » Thu Apr 05, 2018 12:58 am

oldcomputerguy wrote:
Wed Apr 04, 2018 6:00 pm
...Why? At 1%, the return on $200M would be $2M per year. I could live quite nicely for the rest of my life on $2M per year.
:mrgreen:
To me the "safest" returns are actually very dangerous. They do not account for inflation.

If inflation is 3%, over 50 years (1.03)^50 = 4.38 . Are you willing to have your real income decline to less than 1/4 of its present value over the rest of your life?

With a lot less than that DW and I have diversified into real estate, which is not perfectly correlated with stocks. And, I can put a substantial percentage of our portfolio into more aggressive assets, such as QQQ, which had a 32% return in 2017.

To me, once a portfolio reaches a point where even the worst historic bear market would still provide for the rest of our lives, it is reasonable to invest in higher risk/higher volatility funds. Obviously not for everyone.

Some people say "once you have won, stop playing the game." I keep thinking "once you have won, set aside a reserve--then run up the score."

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by msk » Thu Apr 05, 2018 3:21 am

Really a lot depends on what is the essential annual cash withdrawal below which you become uncomfortable. E.g. a couple needs say, $100k annually to spend. That is easily catered for by a $2m stock portfolio. To allow for sustained market falls, say, 50%, and still stay at less than 5% p.a. withdrawal, a 100% stocks portfolio of $4+ million will not require any bonds for smoothing out volatility. Consequently, I see no reason, provided the individual's temperament can stand the volatility, to use anything other than 100% stocks if the portfolio amounts to 40x or more the anticipated annual cash needs. Pension funds are different in the sense that they wish to keep the portfolio size to the minimum. Organisations will cease contributing to a pension fund that is already at 40+x annual cash needs. Hence they need smoothing of volatility. An individual wishing to leave a legacy will probably like to maximise his legacy way beyond 40x annual cash needs. IMHO the individual can be much more aggressive (towards 100% stocks, hedge funds, etc.) the richer he is. IMHO bonds are for poorer investors, pension funds, governments. Speculators? If I had a billion $ as an individual I would still put 100% of it into Global Stocks. Too weary to hussle through hedge funds...

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by oldcomputerguy » Thu Apr 05, 2018 5:07 am

CurlyDave wrote:
Thu Apr 05, 2018 12:58 am
If inflation is 3%, over 50 years (1.03)^50 = 4.38 . Are you willing to have your real income decline to less than 1/4 of its present value over the rest of your life?
I'm 63 years old. I probably won't last another 50 years.
:wink:
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by msk » Thu Apr 05, 2018 5:23 am

Inflation averaged 4% p.a. compounded between 1966 and 2016. Just because it has been lower recently, it's dangerous to get complacent. I have been retired now for 18 years, and a fixed pension of $20k in 2000 is now worth only $13.7k. May the Force continue to keep my pension COLA :greedy

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by ivk5 » Thu Apr 05, 2018 6:01 am

I see no reason the basic concept of low-cost indexing with appropriate allocation (domestic equities / int'l equities / bonds) would not scale without limit. Expense and tax tweaking opportunities become a bigger deal at scale, as noted by others. I would expect some minor adjustments to address these factors and take advantage of opportunities. Nothing exotic, at least as passive investments.[FN1]
  1. Appropriate allocation: still function of need, willingness, and ability to take risk. Ability obviously much greater than for small fry investor. Need may remain high due to goals (philanthropy/etc), not to mention the continued importance of inflation risk as noted above.
  2. Bonds: no greater than intermediate duration, investment-grade corporate or highly rated government-issued debt, probably a bit more caution on exposure to things like asset-backed securities (ABSs), collateralized debt obligations (CDOs), agency vs general obligation debt, etc.
  3. Expenses: Institutional share classes with lower expenses address this up to a point. Beyond some level I would be inclined to try to negotiate directly with fund mgr for lower expenses. I am doubtful that self-indexing is advantageous at any level - haven't dug for data to support, but suspect a large/mega investor actually does better with fund that can faithfully track index reconstitutions/rebalancing without generating taxable gains due to inflows, in-kind redemptions, etc. Would probably avoid ETFs due to bid/ask spreads, NAV premium/discount, liquidity/execution issues, even the modest SEC Section 31 fees, etc.
  4. Taxes: Maintaining unassailable tax residency in state with no tax on investment income probably a must. Part of bond allocation in high quality munis (with caution toward state/local concentration risk - should not be issue if domiciled in tax-free state). Rest is probably a balance against things like tracking error in equities (tax-managed funds may have 100% qualified dividends vs 95-98% for TSM, but former may underweight small caps); credit risk of munis vs treasuries; etc. No free lunch.
---
FN1. Excluding special situations like full-time career investment professional where some amount of co-investment may be expected/required (but would still want to minimize due to tracking error / lower expected risk-adjusted return).

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by CurlyDave » Thu Apr 05, 2018 1:59 pm

msk wrote:
Thu Apr 05, 2018 5:23 am
Inflation averaged 4% p.a. compounded between 1966 and 2016. Just because it has been lower recently, it's dangerous to get complacent. I have been retired now for 18 years, and a fixed pension of $20k in 2000 is now worth only $13.7k. May the Force continue to keep my pension COLA :greedy
+1

If inflation is 4%, (1.04) ^ 50 = 7.11. A lifetime reduction to 1/7 of real purchasing power can really pinch.

IMHO inflation is a very under appreciated risk.

And, TIPS really should be called FIPS (Fraudulently Inflation Protected Securities) because the inflation adjustment is taxable.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by bloom2708 » Thu Apr 05, 2018 2:09 pm

Is there a cap on tax-exempt income from a fund like Int-Term Tax-Exempt from Vanguard?

If I had $30 million in a taxable account, 60/40 with Total US, Total International (30% of stocks ) and 40% Int-Term Tax-Exempt, would that not work?

I know I could buy individual tax-exempt bonds, but if you didn't want that complexity. I'd be fine up a large amount. :wink:
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by ivk5 » Thu Apr 05, 2018 2:14 pm

bloom2708 wrote:
Thu Apr 05, 2018 2:09 pm
If I had $30 million in a taxable account, 60/40 with Total US, Total International (30% of stocks ) and 40% Int-Term Tax-Exempt, would that not work?

I know I could buy individual tax-exempt bonds, but if you didn't want that complexity. I'd be fine up a large amount. :wink:
Think it's the right idea but see my comments above re bonds. Don't think I'd want my whole bond allocation in munis, even a national muni fund. Would probably want some amount in treasuries. Balance of taxes vs credit risk. I would consider myself a bond novice though.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by Meaty » Thu Apr 05, 2018 2:41 pm

bligh wrote:
Wed Apr 04, 2018 4:25 pm
So I was wondering recently, how far could you scale (in terms of portfolio size) the 3 or 4 fund portfolio before you felt it was no longer the most sensible option?

Let's imagine the standard 3 or 4 fund portfolio. Pick a sensible Asset allocation.. say 60/40 :
40% US Total Stock Market
20% Total International Ex-US Stock Market
30% US Total Bond
10% US International Ex-US Bond.

A pretty standard and conservative portfolio according to most right? I think most would feel comfortable holding $5million in a portfolio of this type. .. Even $20 million.

But how about $200 million? or $2 Billion?

Is there a point at which you believe that a portfolio could get too big to be held solely in the 3 or 4 fund portfolio? If so, what is that point and why? What do you think you would need to do differently past that point?
Considering Buffet is putting 10% in fixed income and 90% in S&P 500 for his estate, there’s no limit
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by wolf359 » Thu Apr 05, 2018 3:25 pm

Meaty wrote:
Thu Apr 05, 2018 2:41 pm
Considering Buffet is putting 10% in fixed income and 90% in S&P 500 for his estate, there’s no limit
I was going to cite this as well. While he's giving most of his assets to charity, the amount he's leaving for his wife is probably still over $100 million.

Index funds do scale. At some point you're going to qualify for institutional shares.

Practically, what I'd do with $100 million is buy municipal bonds for the amount of income I'd need to live on, and put the rest in index funds. I think that's also how Ross Perot described his strategy in the 1990's (although he had some individual stocks as well, something about EDS and Perot Systems.)

Not something I'm probably ever going to have to worry about.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by Texanbybirth » Thu Apr 05, 2018 3:49 pm

Darth Xanadu wrote:
Wed Apr 04, 2018 4:48 pm
MotoTrojan wrote:
Wed Apr 04, 2018 4:46 pm
Darth Xanadu wrote:
Wed Apr 04, 2018 4:33 pm
If I had $200m, I'm not sure I would be invested in stocks at all, I would just stick to the safest 1%-2% returns I could find.
This is borderline reckless.
I know. How do you think I got to $200m in the first place?
Lol! I have to cheers a solid retort when I see one. :beer

OP, it's scalable as far as you want to go. I don't think anyone who has made $2B would be satisfied with a boring 3/4-fund portfolio, but that doesn't mean it wouldn't work.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by willthrill81 » Thu Apr 05, 2018 4:03 pm

CurlyDave wrote:
Thu Apr 05, 2018 12:58 am
Some people say "once you have won, stop playing the game." I keep thinking "once you have won, set aside a reserve--then run up the score."
:thumbsup

When you "stop playing the game," you might start losing it.
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by Independent George » Thu Apr 05, 2018 4:14 pm

If anything, I'd make it more conservative as the total portfolio value went up while sticking to 3/4 funds. Beyond a certain point, I'd probably care more about wealth preservation than growth.

Theoretically, anyway. I'm not anywhere close to being worth that much, but if I were to win the lottery, I'd probably put anything beyond $10M into bonds. Maybe t-bills.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by bligh » Thu Apr 05, 2018 4:22 pm

willthrill81 wrote:
Thu Apr 05, 2018 4:03 pm
CurlyDave wrote:
Thu Apr 05, 2018 12:58 am
Some people say "once you have won, stop playing the game." I keep thinking "once you have won, set aside a reserve--then run up the score."
:thumbsup

When you "stop playing the game," you might start losing it.
+1

Our game only stops when we're dead.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by deltaneutral83 » Thu Apr 05, 2018 4:24 pm

I don't anticipate ever being lower than the moderate balanced 60/40, regardless of $200k/$2M/$20M/$200M in retirement, of course life happens along the way though and adjustments need to be made. 60/40 from Oct 2007 to March 2009 lost I believe 28%. I never quite understand locking in losses to inflation with CD's, money markets, etc just because you have "enough." Wouldn't 40/60 be a small amount of risk while still giving you odds of greatly outpacing inflation?

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by SeeMoe » Thu Apr 05, 2018 5:55 pm

Anything over, say, $1.5 million dollars in assets should be administered by a professional money manager in my opinion.

SeeMoe.. :dollar
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Re: How Scalabale is the 3/4 Fund portfolio?

Post by CurlyDave » Thu Apr 05, 2018 7:50 pm

That amount is not on the road ahead, it is in the rear view mirror, and it didn't get there by letting a "professional money manager" have anything to do with it.

Professional fleecer is a better description.

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Re: How Scalabale is the 3/4 Fund portfolio?

Post by wanderer » Fri Apr 06, 2018 11:04 am

Does $38B in the Nevada PERS count as "scalable"?

Their IPS
https://www.nvpers.org/public/investmen ... licies.pdf

A WSJ article:
https://www.wsj.com/articles/what-does- ... 1476887420

alfaspider
Posts: 1333
Joined: Wed Sep 09, 2015 4:44 pm

Re: How Scalabale is the 3/4 Fund portfolio?

Post by alfaspider » Fri Apr 06, 2018 11:33 am

SeeMoe wrote:
Thu Apr 05, 2018 5:55 pm
Anything over, say, $1.5 million dollars in assets should be administered by a professional money manager in my opinion.

SeeMoe.. :dollar
Did you accidentally replace a "b" with an "m"?

To answer the original question, I don't think there's any hard limit except that truly enormous fortunes are usually made from illiquid investments. Mark Zuckerberg, for example, couldn't just liquidate all his Facebook shares and buy Vanguard funds.

lack_ey
Posts: 6561
Joined: Wed Nov 19, 2014 11:55 pm

Re: How Scalabale is the 3/4 Fund portfolio?

Post by lack_ey » Fri Apr 06, 2018 12:13 pm

3/4 fund portfolio by design is one of the most scalable, to trillions of dollars.

Most appropriate or optimal in some sense at that level? No, but for various different reasons you might argue that for much smaller amounts too.

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