Set it and forget it

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Rick Ferri
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Set it and forget it

Post by Rick Ferri » Fri Oct 19, 2018 8:53 am

"Nobody buys a farm based on whether they think it's going to rain next year; they buy it because they think it's a good investment over 10 or 20 years." Warren Buffett
"Don't just do something, stand there!" Jack Bogle
You'll be a better investor when you forget about your investments, providing you pick decent ones from the start.

Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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SevenBridgesRoad
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Re: Set it and forget it

Post by SevenBridgesRoad » Fri Oct 19, 2018 9:05 am

Rick Ferri wrote:
Fri Oct 19, 2018 8:53 am
"Nobody buys a farm based on whether they think it's going to rain next year; they buy it because they think it's a good investment over 10 or 20 years." Warren Buffett
"Don't just do something, stand there!" Jack Bogle
You'll be a better investor when you forget about your investments, providing you pick decent ones from the start.

Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.

Rick Ferri
Rick, this gets printed and posted on the refrigerator door. Excellent. Thanks.
There are stars in the Southern sky | And if ever you decide | You should go | There is a taste of time sweetened honey | Down the Seven Bridges Road

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goingup
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Re: Set it and forget it

Post by goingup » Fri Oct 19, 2018 9:38 am

Rick-
I so appreciate your consistent message over the years. A few years ago you posted 6 Rules to Disciplined Investing:

Discipline is the key that allows and investment plan to work for you. I’ve put together six rules to disciplined investing. They will help you make better long-term decisions:

1) Have a long-term investment philosophy.
2) Form a prudent asset allocation based on this philosophy.
3) Select low-cost funds to represent asset classes in the allocation.
4) Maintain this portfolio through all market conditions.
5) Don’t change the asset allocation due to recent market activity.
6) Don’t hold back on new investments while waiting for market clarity.


It's the Boglehead core message. It's the theme of Jack Bogle's entire investing philosophy. I've tried to embrace it over the last 20+ and it's worked out pretty well!

I enjoy following you on Twitter, along with Jason Zweig and Jonathan Clements.

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Taylor Larimore
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"Boglehead Treasure"

Post by Taylor Larimore » Fri Oct 19, 2018 9:53 am

Rick Ferri wrote:Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.
Sounds like The Three-Fund Portfolio.

Rick Ferri, is a Boglehead Treasure.

Best wishes.
Taylor
Last edited by Taylor Larimore on Fri Oct 19, 2018 10:15 am, edited 1 time in total.
"Simplicity is the master key to financial success." -- Jack Bogle

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Rick Ferri
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Re: A "Boglehead Treasure"

Post by Rick Ferri » Fri Oct 19, 2018 9:59 am

Taylor Larimore wrote:
Fri Oct 19, 2018 9:53 am
Rick Ferri wrote:Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.
Sounds like The Three-Fund Portfolio.

Best wishes.
Taylor
Or a Core-4 portfolio! :sharebeer
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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randomizer
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Re: Set it and forget it

Post by randomizer » Fri Oct 19, 2018 10:13 am

Totally agreed. Three funds held indefinitely. I don't have online account access and only monthly statements. It is pretty good to not even think about it.
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B. Wellington
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Re: Set it and forget it

Post by B. Wellington » Fri Oct 19, 2018 10:28 am

Thanks again Rick for the timely reminder.

Wish I had heard this 30 years ago. However, back then I did find out about this little company named Vanguard. :beer

2015
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Re: Set it and forget it

Post by 2015 » Fri Oct 19, 2018 12:06 pm

It's terminology I know, but I tend to think of it in terms of Maximizers versus Optimizers. In my mind (and I'm influenced by something I read by someone much smarter than I am), optizimizers attempt to do the best they can and no more in relation to their own temperament, investing philosophy, personal microeconomics and finance. They know that how they play their own strategy at the poker table is vastly more important than always nervously looking around the room for a better table. They are the epitome of confidence because they know that a strong investing process (like all processes) which they have spent a great deal of time thinking through matters more than outcome by a factor of 6.

Maximizers, OTOH, have an almost pathological fear of missing out. They are the overconfident as well as the underconfident. As such, they are always chasing yield, desperately tuned into the cacophony from the financial industry, the so-called "good guys", the "well-respecteds", the pundits, the authors, academics, the bloggers, etc.. In short, everyone with an interest opposed to their own. They spend 3 or 4 pages in threads debating a strategy, pushing their own agenda based on ego, overconfidence, and consistency bias, all the while blind to the frailty inherent in human decision-making, blind to the fact that humans, investing, and life are housed contextually in a complex adaptive system, where false precision and prediction are impossible.

Lately I've come to think of the overconfident and underconfident as simply two sides of the same coin. The overconfident chase their tails in the very same manner the underconfident do. In so doing, they ignore every warning Nassim Taleb (and many, many others) have issued regarding the danger of consuming too much information which leads to anti-fragility. Human blindness and bias in investing are immensely more important than concocting the most clever yet tenuous portfolio or investment strategy.

Thank you for this timely reminder, Rick. I agree with Taylor it sounds exactly like the 3 fund portfolio. Simplicity is the anecdote to the natural propensity for human error.

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Rick Ferri
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Re: Set it and forget it

Post by Rick Ferri » Fri Oct 19, 2018 2:04 pm

Optimizers verse Maximizers

Good commentary. Thanks!

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

MandyT
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Re: Set it and forget it

Post by MandyT » Fri Oct 19, 2018 3:39 pm

2015 wrote:
Fri Oct 19, 2018 12:06 pm
Lately I've come to think of the overconfident and underconfident as simply two sides of the same coin. The overconfident chase their tails in the very same manner the underconfident do. In so doing, they ignore every warning Nassim Taleb (and many, many others) have issued regarding the danger of consuming too much information which leads to anti-fragility.
You mean fragility, right?

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Re: Set it and forget it

Post by Lax67 » Fri Oct 19, 2018 4:10 pm

Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.

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Re: Set it and forget it

Post by tennisplyr » Sat Oct 20, 2018 7:34 am

I would venture to say that even if you picked a semi-crappy equity fund, in 20 or 30 years you'd probably be fine...time heals all wounds.
Those who move forward with a happy spirit will find that things always work out.

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Re: Set it and forget it

Post by rkhusky » Sat Oct 20, 2018 7:51 am

Lax67 wrote:
Fri Oct 19, 2018 4:10 pm
Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.
+1

cutterinnj
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Re: Set it and forget it

Post by cutterinnj » Sat Oct 20, 2018 8:43 am

I do this, too, in my tax deferred account

I always feel a little guilty that I should be buying the individual funds instead, and rebalancing regularly.
Then I remind myself that the premium is small, and that the truly important thing is what Rick said- just contribute to something simple and don’t change a thing regardless what happens.

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Re: Set it and forget it

Post by UpperNwGuy » Sat Oct 20, 2018 8:56 am

I am totally a buy-and-hold investor, so I completely agree with Rick. I rebalance over the course of time by adjusting which funds I buy each month rather than by selling one and buying another. I'm not even tempted to do tax loss harvesting because that would involve selling something,

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Re: Set it and forget it

Post by 3wood » Sat Oct 20, 2018 9:22 am

rkhusky wrote:
Sat Oct 20, 2018 7:51 am
Lax67 wrote:
Fri Oct 19, 2018 4:10 pm
Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.
+1
+1000
Vanguard 2035 fund for me. Been there for at least 15 yrs. I am an avid personal finance reader and every time I learn some new thing and I have the urge to tinker my gut stops me. Nice to hear Rick Ferri confirm my instincts.

billthecat
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Re: Set it and forget it

Post by billthecat » Sat Oct 20, 2018 10:40 am

Instead of a fear of missing out, I have a fear of screwing up again (FOSUA).

2000, real estate, commodities...

We’ll see how my bonds (muni) in taxable work out ...

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Re: Set it and forget it

Post by garlandwhizzer » Sat Oct 20, 2018 11:03 am

Great comments and great advice for long term investors, Rick, thanks for posting. Many of us agonize over getting the perfect portfolio and constantly tweak it as new data shows the old version is not quite perfect. Simplicity is better sought than avoided IMO. Selecting a widely diversified portfolio of solid broadly based low cost index funds suited to your risk tolerance and investing new dollars in them on a regular basis--that is a sure path to long term success as an investor.

Garland Whizzer

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Re: Set it and forget it

Post by Fallible » Sat Oct 20, 2018 6:20 pm

Rick Ferri wrote:
Fri Oct 19, 2018 8:53 am
"Nobody buys a farm based on whether they think it's going to rain next year; they buy it because they think it's a good investment over 10 or 20 years." Warren Buffett
"Don't just do something, stand there!" Jack Bogle
You'll be a better investor when you forget about your investments, providing you pick decent ones from the start.

Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.
Rick
This is a reminder that is needed on the forum, along with Taylor's reminders to keep it simple. Thanks to you both. :thumbsup :thumbsup
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

StacktheBricksRic
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Re: Set it and forget it

Post by StacktheBricksRic » Sun Oct 21, 2018 1:58 pm

First time poster and just registered

As a Set It and Forget It class investor, being in a position to reap the benefits of such a basic concept, is amazing. The continuation of buying and holding is as simple as it gets.

The only thing that gets blurry, for some like myself, is shaving that foam when that beer pitcher gets full and allocating into the foam fund (Total Bond Fund).

Having the courage to stick with it when times get rough is the ultimate investor character revealer.

A simpleton, such as myself, coupled with time and steady paycheck deductions, can build a legacy.

I concur with the OP.

:sharebeer

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Re: Set it and forget it

Post by lostdog » Sun Oct 21, 2018 2:29 pm

Rick,

Thanks for the reminder. My wife and I pile our extra money into Vanguard Total World Equity Index. When we get close to retirement, we'll add a decent bond fund. It took us awhile to land at this simple portfolio. Indeed we were enlightened and found simplicity.

HEDGEFUNDIE
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Re: Set it and forget it

Post by HEDGEFUNDIE » Sun Oct 21, 2018 2:37 pm

Unanimous praise for the long term mindset, and yet most folks here eschew long term bonds... :confused

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Re: Set it and forget it

Post by Rowan Oak » Sun Oct 21, 2018 3:07 pm

Rick Ferri wrote:
Fri Oct 19, 2018 8:53 am
"Nobody buys a farm based on whether they think it's going to rain next year; they buy it because they think it's a good investment over 10 or 20 years." Warren Buffett
"Don't just do something, stand there!" Jack Bogle
You'll be a better investor when you forget about your investments, providing you pick decent ones from the start.

Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.

Rick Ferri
Yes. This.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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Re: Set it and forget it

Post by rockonhumblepie » Sun Oct 21, 2018 3:33 pm

I am retired at 62 but not drawing on investments.

tIRA= Target Income + small amount in short term bond

Roth IRA= Vanguard Balanced Fund + small amount in short term bond

Taxable= Not much

Was a Three Funder for many years and might go back to it at 70.5yo

Have been so happy to play it simple and smart.I call it the Boglehead Commonsense Approach. BCA to state it simply.

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Re: Set it and forget it

Post by pierremonfrere » Sun Oct 21, 2018 3:46 pm

My mouth was watering because I thought we were going to discuss rotisserie chicken

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Re: Set it and forget it

Post by GoldenFinch » Sun Oct 21, 2018 4:29 pm

HEDGEFUNDIE wrote:
Sun Oct 21, 2018 2:37 pm
Unanimous praise for the long term mindset, and yet most folks here eschew long term bonds... :confused
I have some for diversification. Whether it is smart or not, I will find out in 18 years and let you know what I think. :happy

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Re: Set it and forget it

Post by Ron Scott » Mon Oct 22, 2018 7:40 am

StacktheBricksRic wrote:
Sun Oct 21, 2018 1:58 pm

The only thing that gets blurry, for some like myself, is shaving that foam when that beer pitcher gets full and allocating into the foam fund (Total Bond Fund).

:sharebeer
A tip:

If you truly set-and-forget, i,e, you never shave the foam, you are rewarded; the foam turns to beer!
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Re: Set it and forget it

Post by BogleMelon » Mon Oct 22, 2018 8:10 am

Lax67 wrote:
Fri Oct 19, 2018 4:10 pm
Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.
What would you do if you don't have a TD fund in your 401K and most of your funds are crappy except may be one SP500 index fund? How would you maintain your AA across all your accounts when your 401K best choice is 100% stocks?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Set it and forget it

Post by pkcrafter » Mon Oct 22, 2018 9:37 am

Rick Ferri wrote:
Fri Oct 19, 2018 8:53 am
"Nobody buys a farm based on whether they think it's going to rain next year; they buy it because they think it's a good investment over 10 or 20 years." Warren Buffett
"Don't just do something, stand there!" Jack Bogle
You'll be a better investor when you forget about your investments, providing you pick decent ones from the start.

Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.

Rick Ferri
Thank you, Rick. This, of course, is simply the Boglehead philosophy in a nut shell. :sharebeer

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: Set it and forget it

Post by pkcrafter » Mon Oct 22, 2018 9:38 am

BogleMelon wrote:
Mon Oct 22, 2018 8:10 am
Lax67 wrote:
Fri Oct 19, 2018 4:10 pm
Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.
What would you do if you don't have a TD fund in your 401K and most of your funds are crappy except may be one SP500 index fund? How would you maintain your AA across all your accounts when your 401K best choice is 100% stocks?
No bond funds? What bond funds are offered?

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Taylor Larimore
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Re: Set it and forget it

Post by Taylor Larimore » Mon Oct 22, 2018 12:53 pm

Rick Ferri wrote:
Fri Oct 19, 2018 8:53 am

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.

Rick Ferri
Bogleheads:

Truer words were never spoken.

I began investing in 1950 when the S&P stocks were under 20. Today they are over 2,700 (not including dividends). "Keep it simple and let it work."

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

BogleMelon
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Re: Set it and forget it

Post by BogleMelon » Mon Oct 22, 2018 1:37 pm

pkcrafter wrote:
Mon Oct 22, 2018 9:38 am
BogleMelon wrote:
Mon Oct 22, 2018 8:10 am
Lax67 wrote:
Fri Oct 19, 2018 4:10 pm
Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.
What would you do if you don't have a TD fund in your 401K and most of your funds are crappy except may be one SP500 index fund? How would you maintain your AA across all your accounts when your 401K best choice is 100% stocks?
No bond funds? What bond funds are offered?

Paul
Here is a list of available funds with their ER's:
- Guaranteed Income Fund (they dont tell how much is guaranteed in the prospectus!!) 0.85%
- Core Plus Bond / PGIM Fund 0.97%
- Government Securities Enhanced Index / PGIM Fund 0.97%
That's it!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Set it and forget it

Post by pkcrafter » Mon Oct 22, 2018 2:24 pm

BogleMelon wrote:
Mon Oct 22, 2018 1:37 pm
pkcrafter wrote:
Mon Oct 22, 2018 9:38 am
BogleMelon wrote:
Mon Oct 22, 2018 8:10 am
Lax67 wrote:
Fri Oct 19, 2018 4:10 pm
Target Date Fund. All I do is check my balance periodically, feed it, and watch it grow. Simplicity at its best.
What would you do if you don't have a TD fund in your 401K and most of your funds are crappy except may be one SP500 index fund? How would you maintain your AA across all your accounts when your 401K best choice is 100% stocks?
No bond funds? What bond funds are offered?

Paul
Here is a list of available funds with their ER's:
- Guaranteed Income Fund (they dont tell how much is guaranteed in the prospectus!!) 0.85%
- Core Plus Bond / PGIM Fund 0.97%
- Government Securities Enhanced Index / PGIM Fund 0.97%
That's it!
Groan. :confused

This says the GIF (stable value) has an expense ratio of 0.10%. You're right, terrible. I can't even find info on the Core Plus Bond fund. What are they showing for returns on the GIF?

https://www.standard.com/rpdex/PRU38.pdf

You can put bonds in a IRA if you have one, or use taxable with tax-efficient bonds.
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: Set it and forget it

Post by BogleMelon » Mon Oct 22, 2018 2:54 pm

pkcrafter wrote:
Mon Oct 22, 2018 2:24 pm
What are they showing for returns on the GIF?
Prior Month: 0.09%
Prior Quarter: 0.28%
1 YR: 1.03%
5 YR: 1.13%
10 YR {or since inception}: 1.69%
pkcrafter wrote:
Mon Oct 22, 2018 2:24 pm
You can put bonds in a IRA if you have one, or use taxable with tax-efficient bonds.
That is exactly what I am doing. I am using IRA's and spouse state retirement plan for bonds. I meant by my initial reply to LAx67 that some of us are not that lucky to stick with simplicity and TD funds. Some of us have to juggle funds across accounts to maintain a desired AA
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Set it and forget it

Post by catdude » Mon Oct 22, 2018 3:02 pm

Rick - excellent synopsis of Boglehead-style investing. I just cut & pasted your post into an email I sent to a friend of mine. She's eager for investing advice...
catdude | | All generalizations are false, including this one.

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marklearnsbogle
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Set it and forget it

Post by marklearnsbogle » Mon Oct 22, 2018 3:35 pm

"
Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work."

Rick Ferri
+1. I was introduced to Jack Bogle (and subsequently Vanguard) in a Frontline documentary, The Retirement Gamble. I watched and felt my eyes widening and my head nodding as Jack spoke because I got it. I mean, I GOT IT. This idea of setting, forgetting, and doing nothing is not only wealth producing, it gives me so much calm and confidence while things go up, down, and all around. I just sit there, very content. Thanks for the wonderful words.
"Nothing is simpler than owning the stock market and holding it forever, and that’s essentially the idea behind the index fund.” - Bogle.

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Re: "Boglehead Treasure"

Post by sschullo » Mon Oct 22, 2018 3:39 pm

Taylor Larimore wrote:
Fri Oct 19, 2018 9:53 am
Rick Ferri wrote:Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.
Sounds like The Three-Fund Portfolio.

Rick Ferri, is a Boglehead Treasure.

Best wishes.
Taylor
+1001
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tman9940
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Joined: Tue Aug 11, 2015 11:44 pm

Re: Set it and forget it

Post by tman9940 » Mon Oct 22, 2018 3:57 pm

This is great. A lot of times I think to myself that I am not doing something that I should. Thanks for the reminder!

gregwils
Posts: 23
Joined: Mon Oct 03, 2016 12:17 pm

Re: Set it and forget it

Post by gregwils » Mon Oct 22, 2018 4:07 pm

I assisted my 23 year old daughter in opening a Roth IRA with a single investment - a 2060 Vanguard Target Date Fund. She is pretty compliant with instruction, but has no interest in popping the hood to tinker. She will thank me someday after there is a mound of dirt on top of me. This is the perfect fund for her.

Ranking by percentage
Vanguard Total Stock Market Index Fund Investor Shares 54.10%
Vanguard Total International Stock Index Fund Investor Shares 35.90%
Vanguard Total Bond Market II Index Fund Investor Shares** 7.10%
Vanguard Total International Bond Index Fund Investor Shares 2.90%

User avatar
Taylor Larimore
Advisory Board
Posts: 27512
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Set it and forget it

Post by Taylor Larimore » Mon Oct 22, 2018 6:15 pm

gregwils wrote:
Mon Oct 22, 2018 4:07 pm
I assisted my 23 year old daughter in opening a Roth IRA with a single investment - a 2060 Vanguard Target Date Fund. She is pretty compliant with instruction, but has no interest in popping the hood to tinker. She will thank me someday after there is a mound of dirt on top of me. This is the perfect fund for her.

Ranking by percentage
Vanguard Total Stock Market Index Fund Investor Shares 54.10%
Vanguard Total International Stock Index Fund Investor Shares 35.90%
Vanguard Total Bond Market II Index Fund Investor Shares** 7.10%
Vanguard Total International Bond Index Fund Investor Shares 2.90%
gregwils:

I cannot think of a more perfect gift that will last her lifetime.

Your daughter is fortunate to have a knowledgeable and loving dad.

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

Chaconne
Posts: 137
Joined: Sat Dec 15, 2007 4:18 pm

Re: Set it and forget it

Post by Chaconne » Tue Oct 23, 2018 3:11 pm

Rick: Great advice that cannot be reiterated enough.

When I started investing, I was young, stupid and ignorant. But I WAS smart enough to pretty much do what Rick said. Today, I'm about to retire to what, as far as I can see, will be a pretty decent life.

mptfan
Posts: 4715
Joined: Mon Mar 05, 2007 9:58 am

Re: Set it and forget it

Post by mptfan » Tue Oct 23, 2018 3:23 pm


StacktheBricksRic
Posts: 2
Joined: Sun Oct 21, 2018 11:52 am

Re: Set it and forget it

Post by StacktheBricksRic » Wed Oct 24, 2018 4:51 am

Ron Scott wrote:
Mon Oct 22, 2018 7:40 am
StacktheBricksRic wrote:
Sun Oct 21, 2018 1:58 pm

The only thing that gets blurry, for some like myself, is shaving that foam when that beer pitcher gets full and allocating into the foam fund (Total Bond Fund).

:sharebeer
A tip:

If you truly set-and-forget, i,e, you never shave the foam, you are rewarded; the foam turns to beer!
Always appreciate tips. Basically, your tip is what I have done since '90 using 2 funds. Equities only. Filling the pitcher with beer was my target using age. Shaving the foam and moving it into vehicles that haven't been running well is something new to me in comparison to the dragsters I have been running in. DUI can get expensive, so I just downloaded my Uber App.

:sharebeer

Ron Scott
Posts: 1090
Joined: Tue Apr 05, 2016 5:38 am

Re: Set it and forget it

Post by Ron Scott » Wed Oct 24, 2018 7:50 am

StacktheBricksRic wrote:
Wed Oct 24, 2018 4:51 am
DUI can get expensive, so I just downloaded my Uber App.
:sharebeer
Some of the best investment returns are invisible and virtually guaranteed, their value is what they prevent. The wise know this instinctively; fools see no gains.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

bondsr4me
Posts: 927
Joined: Fri Oct 18, 2013 7:08 am

Re: Set it and forget it

Post by bondsr4me » Wed Oct 24, 2018 8:15 am

Fallible wrote:
Sat Oct 20, 2018 6:20 pm
Rick Ferri wrote:
Fri Oct 19, 2018 8:53 am
"Nobody buys a farm based on whether they think it's going to rain next year; they buy it because they think it's a good investment over 10 or 20 years." Warren Buffett
"Don't just do something, stand there!" Jack Bogle
You'll be a better investor when you forget about your investments, providing you pick decent ones from the start.

Once you have become enlightened to low-cost investing, and in particular broadly diversified index funds, select a stock and bond allocation for your needs, choose a few index funds to represent those broad asset classes (or a balanced fund that does it for you), implement the portfolio and go do something else for a few years.

Do not agonize over finding an optimal asset allocation, or picking the optimal fund in each asset class, or thinking you're missing something by not including complicated investment strategies promoted by others (usually for their benefit). That's all a waste of time and money.

The best investors I've met in my 30 years in the business are those who did nothing after picking a few low-cost index funds, except continuing to feed money into them. These people are much better off today than all other investors who thought the approach was too simple and continue to this day searching for a better way.

Keep it simple and let it work.
Rick
This is a reminder that is needed on the forum, along with Taylor's reminders to keep it simple. Thanks to you both. :thumbsup :thumbsup
+1000...I agree wholeheartedly.

investrc
Posts: 11
Joined: Wed Jul 18, 2018 12:37 pm

Re: Set it and forget it

Post by investrc » Wed Oct 24, 2018 2:26 pm

For my taxable account. If I am interested in selling majority of my stocks to start putting into a fund say Vanguard Target Retirement 2055 Fund (VFFVX) or VTI. What advice would you all say on how to proceed?

For Selling
Should I start by selling any stocks I have a loss? Or sell all my losses + LT gains?

For Buying
Say I sell $20k to $40k worth of stocks. Should I buy the funds by dollar cost averaging (over months / over quarters)? Or just throw it all in now near all time highs and uncertainty in the market.

I've only started investing the past 4 years I don't have a lot of unrealized gains. Most of which were from Apple (30% of my taxable portfolio)

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Taylor Larimore
Advisory Board
Posts: 27512
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Set it and forget it

Post by Taylor Larimore » Wed Oct 24, 2018 6:09 pm

investrc wrote:
Wed Oct 24, 2018 2:26 pm
For my taxable account. If I am interested in selling majority of my stocks to start putting into a fund say Vanguard Target Retirement 2055 Fund (VFFVX) or VTI. What advice would you all say on how to proceed?

For Selling
Should I start by selling any stocks I have a loss? Or sell all my losses + LT gains?

Sell all securities with a loss. Sell securities with an equal amount of gains (preferably long-term gains). The result will be no tax. You must decide whether it is worthwhile to sell any of your remaining unwanted securities and pay the tax. In any event, stop reinvesting dividends and stop making contributions into unwanted securities.

For Buying
Say I sell $20k to $40k worth of stocks. Should I buy the funds by dollar cost averaging (over months / over quarters)? Or just throw it all in now near all time highs and uncertainty in the market.

Decide on your long-term, overall, asset-allocation and then "throw it all in now" (stocks are on sale).
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

2015
Posts: 2090
Joined: Mon Feb 10, 2014 2:32 pm

Re: Set it and forget it

Post by 2015 » Wed Oct 24, 2018 11:35 pm

MandyT wrote:
Fri Oct 19, 2018 3:39 pm
2015 wrote:
Fri Oct 19, 2018 12:06 pm
Lately I've come to think of the overconfident and underconfident as simply two sides of the same coin. The overconfident chase their tails in the very same manner the underconfident do. In so doing, they ignore every warning Nassim Taleb (and many, many others) have issued regarding the danger of consuming too much information which leads to anti-fragility.
You mean fragility, right?
Exactly. Thanks for catching that.

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