POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Mel Lindauer » Sun Jul 07, 2019 6:19 am

Hello Everyone:

Whether you'll be attending the upcoming Bogleheads Conference in October or not, you still have an opportunity to have your questions answered at the Conference by the Experts Panel.

The Panel includes:
*Christine Benz, author and Morningstar's Director of Personal Finance;
*Dr. Bill Bernstein, author and financial advisor;
*Jonathan Clements, author and former Wall Street Journal columnist'
*Rick Ferri, author and financial advisor;
*Allan Roth, author, columnist and financial advisor.

You can ask general questions to be answered by the entire Panel, or you can address your question to a specific Panel member. Multiple questions are allowed.

FIRE AWAY!
Best Regards - Mel | | Semper Fi

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by JoeRetire » Sun Jul 07, 2019 6:41 am

Question 1: Why does Allan Roth's name not have a star in front of it, like all the others?

:happy

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Sconie » Sun Jul 07, 2019 7:08 am

Mel, a few topics I'd like to see discussed-----(granted, they've already been discussed ad nauseam on the BH forum).....

-Role/necessity of International bonds in a portfolio. Bernstein, Ferri and Clements all seem to indicate that they (i.e., Int'l bonds) are not necessary, while Benz (or at least Morningstar, through their suggested allocation models) would seem to intimate that they are essential.

-Given the historically low rate environment, any portfolio recommendations for the "fixed side" of one's portfolio, other than sticking with the likes of TBM?

Thank you.....
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Mel Lindauer » Sun Jul 07, 2019 7:15 am

JoeRetire wrote:
Sun Jul 07, 2019 6:41 am
Question 1: Why does Allan Roth's name not have a star in front of it, like all the others?

:happy
Thanks for catching that. Now it does! Don't want to give Allan an inferiority complex. He'd never forgive me for that (unintentional) omission. 😊
Best Regards - Mel | | Semper Fi

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Nowizard » Sun Jul 07, 2019 8:18 am

Classic question of whether International is needed or TSM is sufficient. Discussed, ad nauseum, of course but aids with individual decision making rather than simply following or rejecting Bogle, Three-fund, etc.

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by typical.investor » Sun Jul 07, 2019 8:27 am

Does factor investing diversify a portfolio, or is it concentrating into selected stocks (which are riskier but have higher return)?

If a factor diversified portfolio can have equal equal returns for less risk (by using more bonds and less equity) compared to holding total market, why doesn't the factor diversified portfolio become the market portfolio? Who doesn't want the same returns for less risk, or higher returns for the same risk (as measured by volatility)?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by nisiprius » Sun Jul 07, 2019 9:13 am

My perception is that over the last fifty years, mainstream consensus recommendations have always evolved in one direction: more risk.

Retirement savings portfolios, including Vanguard LifeStrategy funds, used to include stocks, bonds and cash (or short-term reserves). Nowadays, only stocks and bonds. For a 30-year-old, 70/30 would have been suggested; nowadays, Target Retirement 2055 puts a 30-year-old into 90% stocks. Burton Malkiel used to recommend that 1/6th of stocks be international, now he recommends 1/2. Small-cap value is riskier than the total market, but (with rare exceptions) people suggesting small-cap value tilts do not suggest cutting overall stock allocation down to compensate.

Do you have the same perception?
Last edited by nisiprius on Sun Jul 07, 2019 11:11 am, edited 2 times in total.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by steve roy » Sun Jul 07, 2019 9:21 am

What's the experts' consensus on a retirement portfolio's asset allocation at 70? 75? 85?

(Some experts think the equity allocation should rise over time ... so I wonder ...)

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Post by nisiprius » Sun Jul 07, 2019 9:25 am

Let's distinguish between "I'm convinced about X and I do it myself" and "Generally, almost everyone should do X."

Over the last twenty years, are there new things you think generally almost everyone should do, that you wouldn't have recommended twenty years ago?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Luckywon » Sun Jul 07, 2019 10:05 am

What is each panelist's guess for average annual real return on domestic equities over the next 10 years?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by treypar » Sun Jul 07, 2019 11:38 am

Under what conditions should a retiree consider buying an immediate annuity?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by JoeRetire » Sun Jul 07, 2019 12:50 pm

Mel Lindauer wrote:
Sun Jul 07, 2019 7:15 am
JoeRetire wrote:
Sun Jul 07, 2019 6:41 am
Question 1: Why does Allan Roth's name not have a star in front of it, like all the others?

:happy
Thanks for catching that. Now it does! Don't want to give Allan an inferiority complex. He'd never forgive me for that (unintentional) omission. 😊
Good - they are all stars!

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by JoeRetire » Sun Jul 07, 2019 12:52 pm

For the panel to answer:

- Under what conditions does it make sense to pay off a mortgage early? Under what conditions does it not?

- How should one determine the optimal age to claim social security benefits? What are the considerations you would use? Is there a tool you would use?

- For how long of a retirement should the typical individual plan? How should we think about longevity these days?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by livesoft » Sun Jul 07, 2019 1:19 pm

How do you save people from themselves when it comes to investing and personal finance?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Wind_Reaver » Sun Jul 07, 2019 1:31 pm

Open question for the panel.
  • How should investors respond to an increasing rate of deprecation among financial products, services, and providers?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by stan1 » Sun Jul 07, 2019 1:35 pm

How should a healthy, hopefully long-lived 60 year old couple with a $1M portfolio evaluate risk? What techniques should they employ in portfolio construction to manage risk during draw down? Let's assume SS and Medicare are unchanged and this couple does not have employer pensions.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by CoastalWinds » Sun Jul 07, 2019 1:43 pm

1. In this new normal low-interest environment, how should we view value vs growth investing?

2. Does VG want people to migrate from mutual funds to their ETF counterparts?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Fallible » Sun Jul 07, 2019 2:35 pm

This question is about financial literacy courses and what they should include. Some financial experts suggest not only adding Behavioral Finance to financial literacy classes, but making it the main part of them (in addition to the mechanics of personal finance and investing). The idea is to show people how and why they make financial decisions, how emotions play out when it comes to money, how emotions can be positive and negative, and why it's important to know themselves to achieve emotional control.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by steve roy » Sun Jul 07, 2019 7:50 pm

Re private equity: it keeps coming up in msm that Vanguard is looking to get into private equity, maybe develop a mutual fund that indexes PE. A recent example:

https://www.cnbc.com/2019/07/05/investo ... arket.html

So my question: Will Vanguard be building a private equity mutual fund? And if so, when?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Swampy » Sun Jul 07, 2019 8:17 pm

For the risk averse:
Minimum (versus 'ideal)' recommended allocation to equities vs bonds in a retirement portfolio that is being drawn upon 2.5-3.5% annually to allow the portfolio to keep up with inflation adjustments in annual spending and leave a legacy vs depletion of the portfolio over 3-4 decades.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by student5 » Sun Jul 07, 2019 8:43 pm

For the Panel:

Taxpayers in the 24% Federal Tax bracket and above - should the bond allocation portion be 100% municipal bonds?
Any comments on municipal default risk for Vanguard Long Term Tax Exempt (VWLTX)?

Thanks

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Sandtrap » Sun Jul 07, 2019 8:47 pm

Sconie wrote:
Sun Jul 07, 2019 7:08 am
Mel, a few topics I'd like to see discussed-----(granted, they've already been discussed ad nauseam on the BH forum).....

-Role/necessity of International bonds in a portfolio. Bernstein, Ferri and Clements all seem to indicate that they (i.e., Int'l bonds) are not necessary, while Benz (or at least Morningstar, through their suggested allocation models) would seem to intimate that they are essential.

-Given the historically low rate environment, any portfolio recommendations for the "fixed side" of one's portfolio, other than sticking with the likes of TBM?

Thank you.....
Same question here as well.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Eagle33 » Mon Jul 08, 2019 1:59 am

Luckywon wrote:
Sun Jul 07, 2019 10:05 am
What is each panelist's guess for average annual real return on domestic equities over the next 10 years?
A slight variation:
What average annual real return for equities/bonds/cash does each panelist use in their personal financial plans - next 10 years? What returns beyond 10 years?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Elena » Mon Jul 08, 2019 4:06 am

I read a lot of posts beginning with "I am 30something/40something/60something" and just found this site".

Question:

* How could a small financial curriculum be implemented in high schools, so that investment venues/philosophies/strategies are taught instead of being "discovered" by chance, sometimes 30 years into life?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Stinky » Mon Jul 08, 2019 8:30 am

Elena wrote:
Mon Jul 08, 2019 4:06 am
I read a lot of posts beginning with "I am 30something/40something/60something" and just found this site".

Question:

* How could a small financial curriculum be implemented in high schools, so that investment venues/philosophies/strategies are taught instead of being "discovered" by chance, sometimes 30 years into life?
+1

I think about this a lot. So many of my co-workers, even the "well-educated" ones, were totally clueless about some pretty basic money management skills.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Silence Dogood » Mon Jul 08, 2019 4:06 pm

Do you think that the Vanguard Target Retirement funds have an appropriate glide path? If not, why not?

Which would you recommend for most investors, a glide path or a fixed allocation?

What is your opinion of all-in-one funds like Vanguard's Target Retirement and LifeStrategy funds?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by dogagility » Wed Jul 10, 2019 5:46 am

In the investing world, risk is often equated with volatility. However, short-term volatility may not be a good measure of risk for many investors. Some people bring "black swan" events into the risk discussion. How would you define risk for the long-term investor, and how should the long-term investor adjust their portfolio to mitigate this risk?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by nisiprius » Wed Jul 10, 2019 6:02 am

Some Morningstar category averages, for categories like "managed futures," "multialternative," and "commodities broad basket," stunningly underperform expectations set by advocates.

Are Morningstar category averages a fair way to judge what real-world investors have experienced in a category, or are they systematically pessimistic and hopelessly flawed?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by rai » Wed Jul 10, 2019 6:07 am

Are high quality corporate bond funds more worthwhile in low rate environment we are in?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Zen Panda » Wed Jul 10, 2019 10:50 am

I just listened to an interview of Perth Tolle about her freedom index and would like panel to discuss the trend in moral value investing as in climate change, political freedoms, human rights. Do they see this as a growing trend? What evidence is there that it is a good/bad investment strategy.

If the SECURE act passes and the stretch IRA for non spouse beneficiaries goes away what impact do they think it will have? For those of us who planned on leaving large IRA’s to children and already put as much as we could in Tax deferred accounts what is the best strategy for estate planning going forward if it passes?

Thanks,

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60 Years old just starting to invest

Post by PinkPonies777 » Thu Jul 11, 2019 12:19 am

Income 150K net in passive rental income (all mobile homes). No debt therefore easy to save 120k/year. Spouse has earned income of 60k. Other spouse approx. 20k in commissions. We are healthy 60 years old. We will stay managing rentals for 10 years then sell (current retail value 1.2 million) or hire manager. Roth IRA 30k. Employer 401 - 25k. HSA - 5k & 200k in savings. Best advice to Save money on yearly taxes and invest for retirement?

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Re: 60 Years old just starting to invest

Post by Mel Lindauer » Thu Jul 11, 2019 7:02 pm

PinkPonies777 wrote:
Thu Jul 11, 2019 12:19 am
Income 150K net in passive rental income (all mobile homes). No debt therefore easy to save 120k/year. Spouse has earned income of 60k. Other spouse approx. 20k in commissions. We are healthy 60 years old. We will stay managing rentals for 10 years then sell (current retail value 1.2 million) or hire manager. Roth IRA 30k. Employer 401 - 25k. HSA - 5k & 200k in savings. Best advice to Save money on yearly taxes and invest for retirement?
Sorry, but personal advice questions will not be addressed.

We're looking for general investing questions that apply to a broad number of investors, not one individual.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by sixtyforty » Thu Jul 11, 2019 7:34 pm

For retirement.... What withdrawal strategy is recommended ? How does the withdrawal strategy work in a bear market ? Any changes to the portfolio allocation ?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by grabiner » Mon Jul 15, 2019 8:00 pm

Now that it is possible to invest in commodities at a low cost (with Vanguard's commodity fund at 0.20% expenses, and several ETFs at 0.25%), who should invest in them?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by CoastalWinds » Mon Jul 15, 2019 11:14 pm

What is your long-term prognosis for VG’s energy fund (VGENX)? It has significantly underperformed the broader market in the 9 years since fracking took off. Is that (or something else) a permanent game-changer for the industry and the fund, or do you expect reversion to the mean over a long time horizon?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by CoastalWinds » Mon Jul 15, 2019 11:18 pm

Do any of the panelists advise to (or personally do) adjust balances of different accounts (pre-tax, Roth, taxable with LTCGs) to “like tax status” for the purpose of calculating AA?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by packer16 » Tue Jul 16, 2019 7:08 am

In most cases, estimates of equity & bond returns from the early 2000s were substantially off. They all appeared to be off in the direction of assuming mean reversion in returns. For example, In B. Bernstein's book in 2002 he had real returns of corp bonds at 3.5% as well as large cap stocks. The subsequent returns were 2% real return for bonds and 7% for LC stocks. His SCV forecast was closer 7% real versus 9% actual. What did the forecasters miss? It appears historical norms of differences between asset class returns (differences between bonds & stocks) held but estimates of deviations from these norms did not. Has that changed they way the estimate expected returns today?

Given low interest rates, what are the panels thoughts on more illiquid credit instruments that provide higher yields like private debt, infrastructure financing & triple net lease real estate.

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by kupuna » Fri Jul 19, 2019 9:29 am

There are some great questions for the panel. I'll sort through every question and I hope yours makes it in the Q&A discussion.

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Dinosaur Dad » Fri Jul 19, 2019 9:42 am

Many new retirees plan to delay social security until age 70, and take RMDs at 70.5 to allow more tax-free growth. In the interim, the challenge is to create income from the after tax part of your portfolio (and maybe do some Roth conversions at the same time). In a low interest rate environment, what are the experts recommending as optimal strategies to invest your after-tax portfolio to create needed income while still providing the opportunity for longer-term growth and manage sequence
risk?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by JimmyJammy » Tue Jul 23, 2019 11:44 pm

Where and when will the Q&A be posted?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by megabad » Wed Jul 24, 2019 3:07 pm

JimmyJammy wrote:
Tue Jul 23, 2019 11:44 pm
Where and when will the Q&A be posted?
I have always thought the wiki is usually a good source for reviewing conference happenings. Typically videos and notes are aggregated here for each year's conference after it takes place.

https://www.bogleheads.org/wiki/Boglehe ... onferences

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Mel Lindauer » Wed Jul 24, 2019 4:05 pm

megabad wrote:
Wed Jul 24, 2019 3:07 pm
JimmyJammy wrote:
Tue Jul 23, 2019 11:44 pm
Where and when will the Q&A be posted?
I have always thought the wiki is usually a good source for reviewing conference happenings. Typically videos and notes are aggregated here for each year's conference after it takes place.

https://www.bogleheads.org/wiki/Boglehe ... onferences
Yep, that's the way it works. And since our volunteer Bogleheads videographer is also a heart surgeon, his work obviously takes priority over getting the videos up on the wiki. They do eventually get there, though, but some years it's just faster than others.
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by KBREAMK » Wed Jul 24, 2019 4:18 pm

What % of stocks should be in US vs International index funds?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by nisiprius » Sun Jul 28, 2019 10:48 am

Fama and French divided the universe of stocks into a 3 x 2 matrix, with "blend" in between "growth" and "value," but only two size categories, "big" and "small." Does anyone know why Morningstar chose to create a 3 x 3 style box matrix, rather than following Fama and French?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by JimmyJammy » Mon Jul 29, 2019 9:38 am

Isn't there a case to be made to construct a portfolio that has a higher yield than what index funds pay?

VTSAX pays only 1.84%.

If I wanted an annual income of $80,000 I'd need $4.2 million in a portfolio yielding 1.9%. But you'd only need $842,105 from a portfolio yielding 9.5%.

Of course, you'd need to load up on high-yielding stocks and other high-yield assets that are reasonably safe/reliable. Don't a lot of retirees or near-retirees do that kind of thing?

What are the pros and cons?

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by SGM » Mon Jul 29, 2019 9:45 am

How do you suggest long time investors who still own individual stock with high capital gains sell these off to become more diversified. Selling them all at once would mean bearing a large amount of taxes. Should they sell those stocks with lower capital gains first or last? What factors lean towards not selling stocks with high capital gains? I think this is a problem for those who started investing before low cost index funds were available.

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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by GrowthSeeker » Mon Jul 29, 2019 10:37 am

When comparing different Roth Conversion scenarios, one typically looks at the expected effect on portfolio value for some future point (or points) in time.
When making a portfolio valuation, what relative weight would you give a dollar in Tax Deferred vs After tax vs Roth accounts? If this varies from client to client, how do you make the decision?
For what time periods would you look at the resulting portfolio values? (e.g. the person's life expectancy, or 10 year intervals, and/or the effect on their estate and heirs?)
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by Rexindex » Mon Jul 29, 2019 10:43 am

What would you advise clients under the age of 55 to expect as a percentage of current Social Security benefits to be on the safe side?
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by stephenspapa » Mon Jul 29, 2019 12:12 pm

Rexindex wrote:
Mon Jul 29, 2019 10:43 am
What would you advise clients under the age of 55 to expect as a percentage of current Social Security benefits to be on the safe side?
I have the same question but for those over 55. Should I plan, when I hit 70, that I'll have 100% benefits? When I hit 80? Should I plan for COLA increases?

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nisiprius
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Re: POST YOUR QUESTIONS FOR THE EXPERTS PANEL Q&A HERE

Post by nisiprius » Tue Jul 30, 2019 5:57 pm

How Many Stocks Diversify Unsystematic Risk? That's the title of an article in Morningstar Classroom that says
Frank Reilly and Keith Brown reported that in one set of studies for randomly selected stocks, "…about 90% of the maximum benefit of diversification was derived from portfolios of 12 to 18 stocks." In other words, if you own about 12 to 18 stocks, you have obtained more than 90% of the benefits of diversification, assuming you own an equally weighted portfolio.
That of course brought to mind Dr. Bernstein's article year 2000 article, The 15-Stock Diversification Myth:
Fifteen stocks is not enough. Thirty is not enough. Even 200 is not enough. The only way to truly minimize the risks of stock ownership is by owning the whole market.
I'd like to hear Dr. Bernstein's comments, and anybody else's, on current thinking.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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