How America Invests: Vanguard data

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Seasonal
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How America Invests: Vanguard data

Post by Seasonal »

Vanguard published data on how their investors invest, including such things as holdings, asset allocation, etc. For example, the median retail investor is 54 with $60,900 invested and investors tend to hold around 65% equities (asset weighted asset allocation).

https://investornews.vanguard/introduci ... a-invests/ See the linked pdfs.
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Re: How America Invests: Vanguard data

Post by NateH »

Vanguard households trade infrequently
Fewer than one-quarter of Vanguard households
trade in any given year, and those that do typically
only trade twice. Most traders’ behavior is consistent
with rebalancing or is professionally advised.
Compared with nontraders, traders tend to have
multiple account types and significantly greater
assets. They're also slightly older and longer-tenured.
Bogle might be proud of this household turnover rate.
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Re: How America Invests: Vanguard data

Post by Croissant »

love me some vanguard reports - but it doesn't paint a good picture. don't forget vanguard is only a subset of brokerage or retirement accounts - its hard to project whatever conclusion they draw as 'Americans' behavior'
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Re: How America Invests: Vanguard data

Post by Tib »

What I found most striking was the huge difference between the 30% allocated to stock by Vanguard's Target Date Retirement Income Fund and the 60%+ allocated by the median Vanguard investor at every age from 65 to 90. Should we heed the judgment of experts or the "wisdom of the crowd"?
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Re: How America Invests: Vanguard data

Post by rkhusky »

My 401k is not at Vanguard and holds most of my bonds. My Roth IRA and taxable at Vanguard have mostly stocks.
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Re: How America Invests: Vanguard data

Post by deserat »

55 with $~61k invested...ouch!

I wonder if we will require forever some type of federal quasi pension support like SS due to what seems to be a lack of discipline and/or desire on large parts of the citizenry to save/invest. I've heard anecdotally some other countries like Chile have better/more solvent wider reaching systems that combine governmental and private means for 'retirement' income. We in the USA have been transitioning from defined benefit to defined contribution plans for retirement for over 20 years now, but it seems to not be as successful as it needs to be to lower the burden on society for those costs, ie SS or other pension obligations. A sister post talks about 15-20% savings in a 401K over a career to match what defined benefit pensions used to provide.

The above is not meant as a political comment, just an observation that we are 20 years into a transition and it seems it may not work as well as hoped. I am personally on the cusp of that transition as I was born in 1964 and have had to bridge and/or adjust to the transition/change in
pension/self funded retirement/SS expectationss during my career.

Bottom line-the median person in the report will either need to severely increase their savings or severely decrease their expectations for their funding in retirement.
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Re: How America Invests: Vanguard data

Post by Broken Man 1999 »

Millions and millions of retirees exist on little more than their SS benefit.

It certainly can be done.

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Re: How America Invests: Vanguard data

Post by GCD »

deserat wrote: Thu Dec 03, 2020 6:34 pm 55 with $~61k invested...ouch!
...at Vanguard.

Vanguard only has a small window into anyone's finances. I have about 10% of my liquid net worth at Vanguard. Because it's all in a couple 529s for kids starting college in 2021 and 2022 it's invested in an allocation that would make no sense for the rest of my assets.
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Re: How America Invests: Vanguard data

Post by 1210sda »

deserat wrote: Thu Dec 03, 2020 6:34 pm 55 with $~61k invested...ouch!
another ouch..... 13% in cash!! At age 55.
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Re: How America Invests: Vanguard data

Post by ua99 »

I don't see the point of a target date fund when you are less than ~7 years from retirement. I have a blend of T.D.F. 2040 and 2045, Vanguard has it at 36% international, that is higher then the average of 19% in the listed report. I hope this will work out. I also like using T.D.F. because its a mutual fund and price adjusts only once a day where as ETFs can bounce everywhere. What I dislike about the mutual fund is how they don't state my average cost on the days I subsequently buy, instead they use the first price you ever purchased it at. To me mutual funds feel like how investing is suppose to be -- the price moves once a day and you place your order the day prior. If the market is up 3% in a day, the price will adjust the next day. Its more calming then an ETF which can be down 4% intraday and then close up 1% or some scenario similar.
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Re: How America Invests: Vanguard data

Post by JS-Elcano »

deserat wrote: Thu Dec 03, 2020 6:34 pm 55 with $~61k invested...ouch!

I wonder if we will require forever some type of federal quasi pension support like SS due to what seems to be a lack of discipline and/or desire on large parts of the citizenry to save/invest. I've heard anecdotally some other countries like Chile have better/more solvent wider reaching systems that combine governmental and private means for 'retirement' income. We in the USA have been transitioning from defined benefit to defined contribution plans for retirement for over 20 years now, but it seems to not be as successful as it needs to be to lower the burden on society for those costs, ie SS or other pension obligations. A sister post talks about 15-20% savings in a 401K over a career to match what defined benefit pensions used to provide.

The above is not meant as a political comment, just an observation that we are 20 years into a transition and it seems it may not work as well as hoped. I am personally on the cusp of that transition as I was born in 1964 and have had to bridge and/or adjust to the transition/change in
pension/self funded retirement/SS expectationss during my career.

Bottom line-the median person in the report will either need to severely increase their savings or severely decrease their expectations for their funding in retirement.
But these are only VG accounts. I have the vast majority of my retirement funds with TIAA and only use VG for my brokerage where I only invest after everything else is maxed. So, having only a small fund at VG doesn't mean poor preparation for retirement.
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Vanguard Investor Action Guide [How America Invests]

Post by MaxRN »

[Thread merged into here, see below. --admin LadyGeek]

I received an email from Vanguard with their investor analysis. It boiled down to median investor info, kind of useless, culminating in an investor action guide. The guide recommends that increased use of active funds will outperform index funds. Do these guys even remember Jack Bogle?
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Re: Vanguard Investor Action Guide

Post by stan1 »

A reminder that Vanguard is a for profit business not a charity. They advertise their money making products like any other for profit company would do. Fidelity advertises their active funds also.
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Re: Vanguard Investor Action Guide

Post by JoMoney »

Vanguard is owned by/run for the benefit of it's mutual funds, to provide marketing and other administrative services to the funds.
Those funds include active funds, that's always been the case.

In principal, the mutual fund owners own the funds which own Vanguard, but there are layers of principal-agent problems in there, and the agents running things might have interests that conflict with your own.

For people who want to own active mutual funds, Vanguard might be a very good low-cost choice.
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Re: Vanguard Investor Action Guide

Post by Tamales »

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Re: Vanguard Investor Action Guide

Post by Cheez-It Guy »

Something was going on with thread combination while this was posted. It's now irrelevant in current context.
Last edited by Cheez-It Guy on Fri Dec 04, 2020 7:45 pm, edited 1 time in total.
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Re: Vanguard Investor Action Guide

Post by grabiner »

MaxRN wrote: Fri Dec 04, 2020 10:09 am I received an email from Vanguard with their investor analysis. It boiled down to median investor info, kind of useless, culminating in an investor action guide. The guide recommends that increased use of active funds will outperform index funds. Do these guys even remember Jack Bogle?
The actual quote is more reasonable: "Consider complementing index holdings with low-cost active strategies to further diversify your portfolio. They may even offer the potential for outperformance." The potential for outperformance is certainly there, and "low-cost" is an important part of the recommendation; many Bogleheads own funds such as Wellington and Wellesley in IRAs.

However, "further diversify" is not correct, or only technically correct. I believe that the only asset class in which Vanguard offers an active fund but no index fund is high-yield corporate bonds. You can diversify your portfolio into everything else with your choice between index and active funds: a Vanguard indexer can index US stocks, international stocks, REITs, Treasury bonds, corporate bonds, GNMAs, and municipal bonds.

My own non-index holdings are factor funds, which are passive but not indexed. I hold Vanguard Factor Value ETF (VFVA) and iShares MSCI Factor Value ETF (IVLU), not for diversification, but because they give me better exposure to value than the available value indexes.
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Re: Vanguard Investor Action Guide

Post by grabiner »

Another interesting note from the article is the relationship between age and asset allocation. The median Vanguard investor under 40 is 90% stock, decreasing only to 60% at age 67 and staying constant beyond that point.

However, this is a misleading median for the older investors, because some retired investors are investing for themselves, and others are investing for their heirs or charity. 25% of investors 70 and older are more than 80% stock, which only makes sense if they expect to spend half the money or less.

Another possible distortion is that the numbers are only based on Vanguard holdings. Vanguard thinks my investments have been 100% stock since 2000, but they haven't; I have always held bonds in my non-Vanguard employer plans. I don't expect a significant bias towards more or less stock in Vanguard versus non-Vanguard accounts (although it depends on the alternative; TIAA and TSP investors are more likely to have all their fixed income there), but this increases the variance of Vanguard's reported stock holdings.
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Re: Vanguard Investor Action Guide

Post by Namashkar »

It could be an institutional investor like a large pension fund not liking the inclusion of Tesla in the S&P 500 index. Just a guess!! :oops:
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Re: Vanguard Investor Action Guide

Post by stan1 »

Or could be an S&P 500 institutional investor who was buying the ETF to stay fully invested and now needs to liquidate some S&P 500 to be able to buy TSLA.
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Re: How America Invests: Vanguard data

Post by grabiner »

NateH wrote: Thu Dec 03, 2020 12:38 pm
Vanguard households trade infrequently
Fewer than one-quarter of Vanguard households
trade in any given year, and those that do typically
only trade twice. Most traders’ behavior is consistent
with rebalancing or is professionally advised.
Compared with nontraders, traders tend to have
multiple account types and significantly greater
assets. They're also slightly older and longer-tenured.
Bogle might be proud of this household turnover rate.
Particularly given their definition of trading, "We define 'trading' as the act of moving money from one investment option to another within an account." Thus, if you don't reinvest dividends, and then use them to buy a fund, ETF, or stock, that is a trade. If you move money from your bank account to the settlement fund in your brokerage account, and then buy a fund, ETF, or stock with that cash, that is a trade. (However, I wonder whether Vanguard actually counts this. If they did, I would expect more trading in January, as many investors contribute cash to an IRA in January and then immediately invest it.)

And making zero trades is also wrong. Unless you are 0% or 100% stock, you need to rebalance when the market is way up or down. Most investors need to trade to do this, although some can rebalance entirely by adding new money to underweighted funds, or withdrawing from overweighted funds.
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Re: How America Invests: Vanguard data

Post by LadyGeek »

I merged MaxRN's thread into the on-going discussion.
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Re: How America Invests: Vanguard data

Post by David Jay »

Tib wrote: Thu Dec 03, 2020 5:48 pm What I found most striking was the huge difference between the 30% allocated to stock by Vanguard's Target Date Retirement Income Fund and the 60%+ allocated by the median Vanguard investor at every age from 65 to 90. Should we heed the judgment of experts or the "wisdom of the crowd"?
Neither. Asset allocation is intensely personal, you need to find your own.

I like to say that Asset Allocation is a negotiation between your head and your gut. I recommend the highest level of equities (your head says this will likely result in the best outcome) one can hold while answering "Yes" to these two questions (which evaluate your gut reactions):
1. Will I "stay the course" through a 50% stock market downturn?
2. Can I sleep well at night?

(but specifically with regard to Target Date funds, these funds are designed for individuals who don't want to think about AA, so by design they need to be conservative to prevent behavioral mistakes by less sophisticated investors)
Last edited by David Jay on Fri Dec 04, 2020 5:30 pm, edited 1 time in total.
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Re: How America Invests: Vanguard data

Post by luckyducky99 »

grabiner wrote: Fri Dec 04, 2020 3:37 pm And making zero trades is also wrong. Unless you are 0% or 100% stock, you need to rebalance when the market is way up or down.
Also unless you just have self-balancing funds, which there are a number of: target date, balanced index, life strategy, wellington and wellesley funds.
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Re: How America Invests: Vanguard data

Post by grabiner »

luckyducky99 wrote: Fri Dec 04, 2020 5:11 pm
grabiner wrote: Fri Dec 04, 2020 3:37 pm And making zero trades is also wrong. Unless you are 0% or 100% stock, you need to rebalance when the market is way up or down.
Also unless you just have self-balancing funds, which there are a number of: target date, balanced index, life strategy, wellington and wellesley funds.
And investors who held target-date funds, or conventional mutual funds (which could be balanced funds such as Wellington and Wellesley) were less likely to trade. It is a fine investment strategy to put your entire IRA in a balanced fund appropriate for your risk level, and never touch it except to make your annual contribution (while still working) or withdrawal (in retirement).
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Re: How America Invests: Vanguard data

Post by whodidntante »

I like that they titled it "HOW AMERICA INVESTS 2020" and then droned on about what people did in Vanguard retail accounts for 58 pages. If I'm being generous, 4% of Americans live in a household where someone has a Vanguard retail account.
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Re: Vanguard Investor Action Guide

Post by centrifuge41 »

grabiner wrote: Fri Dec 04, 2020 3:09 pm However, "further diversify" is not correct, or only technically correct. I believe that the only asset class in which Vanguard offers an active fund but no index fund is high-yield corporate bonds. You can diversify your portfolio into everything else with your choice between index and active funds: a Vanguard indexer can index US stocks, international stocks, REITs, Treasury bonds, corporate bonds, GNMAs, and municipal bonds.
I think I read before that technically, VAIPX (Inflation Protected Securities Fund) is an active fund, not an index fund? Nonetheless, it performs very similarly to index funds like Fidelity's FIPDX (inflation protected bond index).
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Re: How America Invests: Vanguard data

Post by BolderBoy »

I was surprised to see that the individual # of investors is so small. In one place they say 5 million and in another 8 million. Elsewhere it has been reported that VG has 20 million customers. Does that mean 12-15 million of their customers are institutions?
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Re: How America Invests: Vanguard data

Post by palanzo »

BolderBoy wrote: Fri Dec 04, 2020 11:29 pm I was surprised to see that the individual # of investors is so small. In one place they say 5 million and in another 8 million. Elsewhere it has been reported that VG has 20 million customers. Does that mean 12-15 million of their customers are institutions?
And of the 5 million investors if I read things correctly 80% invest in mutual finds and 20% in ETFs. We also saw trading is low. So why the huge push towards brokerage accounts? Maybe I have misread the numbers.
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Re: How America Invests: Vanguard data

Post by deserat »

1210sda wrote: Thu Dec 03, 2020 8:29 pm
deserat wrote: Thu Dec 03, 2020 6:34 pm 55 with $~61k invested...ouch!
another ouch..... 13% in cash!! At age 55.
Oh - just got that personalized zinger - very cute.

I will probably be buying a house with most of that cash in a year or two.....have not found a good place to put it so it isn't at risk. Witness all of the threads regarding where to park short-term cash.
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How America Invests

Post by Greenman72 »

[Thread merged into here, see below. --admin LadyGeek]

Here's some interesting insights into how the affluent invest, written by Vanguard.

https://advisors.vanguard.com/iwe/pdf/FASHAIFR.pdf

(Note - I didn't see anything to make me think this was secret or otherwise unshareable information. If I'm wrong, please nuke the thread and slap my wrist.)
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Re: How America Invests

Post by David Jay »

I found this graph very interesting:

Image

Basically flat (or even slightly up) after age 70.
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Re: How America Invests

Post by Stinky »

David Jay wrote: Thu Dec 10, 2020 10:23 pm I found this graph very interesting:

Image

Basically flat (or even slightly up) after age 70.
Clearly, self-directed investors above age 60 or so have a lot more in equities than if they were invested in target date funds.

Who’s right? Self directed investors or those who set the glide path for target date funds?
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Re: How America Invests

Post by DSBH »

David Jay wrote: Thu Dec 10, 2020 10:23 pm I found this graph very interesting:
...
Basically flat (or even slightly up) after age 70.
Looks like VG Life Strategy Moderate Growth fund would work for 1-fund portfolio investors in the Social Security age group.
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Re: How America Invests

Post by protagonist »

Stinky wrote: Thu Dec 10, 2020 10:46 pm
David Jay wrote: Thu Dec 10, 2020 10:23 pm I found this graph very interesting:

Image

Basically flat (or even slightly up) after age 70.
Clearly, self-directed investors above age 60 or so have a lot more in equities than if they were invested in target date funds.

Who’s right? Self directed investors or those who set the glide path for target date funds?
There is no "right or wrong" here....it depends how aggressive investors are. The more one has, the more aggressive one can afford to be. Maybe those who are self-directed tend to be more affluent, and/or tend to be willing to take larger risks, than those who invest in target date funds? Just a guess.
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Re: How America Invests

Post by 123 »

This was a very interestig report. It was based on Vanguard accounts held by about one million households with balances of $500,000 or more per household. Many Bogleheads will likely be able to identify with the trends and characteristics chronicled in the report.
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Re: How America Invests

Post by rossington »

Can we agree the 60/40 portfolio is the portfolio of choice for self directed retirees? I will wager this data will concur with Fidelity, Schwab, etc.
Experience matters in investing and these retirees have gained that experience and it certainly shows that a higher equity allocation percentage is favorable for most retirees and they are maintaining this AA.
**One caveat that may slightly skew the data is that many clients do not hold all of their investments at one brokerage firm.**
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Re: How America Invests

Post by minimalistmarc »

rossington wrote: Fri Dec 11, 2020 4:04 am Can we agree the 60/40 portfolio is the portfolio of choice for self directed retirees? I will wager this data will concur with Fidelity, Schwab, etc.
Experience matters in investing and these retirees have gained that experience and it certainly shows that a higher equity allocation percentage is favorable for most retirees and they are maintaining this AA.
**One caveat that may slightly skew the data is that many clients do not hold all of their investments at one brokerage firm.**
I don’t think we can agree that. There are too many variables. People may have a pension/annuity or other income that covers all their costs. If you have won the game, any equity allocation between 30 - 100% is reasonable depending on your desired goals.
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Re: How America Invests

Post by SchruteB&B »

rossington wrote: Fri Dec 11, 2020 4:04 am
**One caveat that may slightly skew the data is that many clients do not hold all of their investments at one brokerage firm.**
Unfortunately I fear that this does not just “slightly” skew the data. My accounts at Vanguard are 100% equity but that is not my overall portfolio allocation.
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Re: How America Invests: Vanguard data

Post by LadyGeek »

I merged Greenman72's thread into the ongoing discussion.
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Re: How America Invests: Vanguard data

Post by Valuethinker »

deserat wrote: Thu Dec 03, 2020 6:34 pm 55 with $~61k invested...ouch!

I wonder if we will require forever some type of federal quasi pension support like SS due to what seems to be a lack of discipline and/or desire on large parts of the citizenry to save/invest. I've heard anecdotally some other countries like Chile have better/more solvent wider reaching systems that combine governmental and private means for 'retirement' income.
Actually the Chilean system has been a bit of a disaster and has become a major political issue. System design (costs, funds etc) is as important as actually having a system in place.

We in the USA have been transitioning from defined benefit to defined contribution plans for retirement for over 20 years now, but it seems to not be as successful as it needs to be to lower the burden on society for those costs, ie SS or other pension obligations. A sister post talks about 15-20% savings in a 401K over a career to match what defined benefit pensions used to provide.
The burden doesn't change whether it is a state-supported system (like SS) collected through taxation or a "tax expenditure" system where private contributions go gross into tax deferred accounts (and the burden is paid for out of dividends and interest). It's still the same burden on people working by people not working in economic terms.

The reason generous state pension systems like Italy are in trouble is the birthrate (among the lowest in the western world, with no toleration of mass immigration), not the savings rate (habitually, Italians use far less consumer debt and save far more than people in Anglo Saxon countries).
The above is not meant as a political comment, just an observation that we are 20 years into a transition and it seems it may not work as well as hoped. I am personally on the cusp of that transition as I was born in 1964 and have had to bridge and/or adjust to the transition/change in
pension/self funded retirement/SS expectationss during my career.

Bottom line-the median person in the report will either need to severely increase their savings or severely decrease their expectations for their funding in retirement.
I agree it has not worked due to high costs, the lack of compulsory contributions, and poor fund choices**. The UK, starting much later, has enforced a very low overall cost for funds (this is for the compulsory contribution) . I think 30 basis points (0.3%). Although private pensions generally in the UK are in the range of 0.8-1.0% pa if you use passive funds.

** some very interesting research, which has been put into practice, found that you could increase participation rate in the pension fund by 30-something to 60-something per cent by requiring employees to opt *out* rather than opt *in*. The power of inertia.

Another successful innovation is allow employees to "buy" additional percentages out of pay raises, especially early in their career. So I get a 5% pay rise and I put 1% of it into my pension contribution.
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Re: How America Invests: Vanguard data

Post by deserat »

whodidntante wrote: Fri Dec 04, 2020 6:20 pm I like that they titled it "HOW AMERICA INVESTS 2020" and then droned on about what people did in Vanguard retail accounts for 58 pages. If I'm being generous, 4% of Americans live in a household where someone has a Vanguard retail account.
You have a good point - is VG a good sample size and/or if not, how is it skewed? I would hazard a guess that it would be skewed high versus low for computing an average "American" datapoint.

I just got off a phone call with my boss who is my age and she admitted she and her husband have not paid attention to financial management. They earn well enough, but have focused on that and not necessarily the 'husbandry' aspect of their resources. I can retire now and live off my portfolio, pensions and SS spending twice what I spend now....I don't think that is a norm in the USA. This site and few others (early retirement forum, Money Mustache, etc) represent a small percentage of the population. I have to remind myself that this forum and those others are out on the extra sigma sections of the normal distribution curve and that comparisons with all under the curve versus in my little area of the curve is what is important in the long run, i.e., I am fine, more than fine and need to be grateful for that.
Valuethinker wrote: Fri Dec 11, 2020 7:45 am ** some very interesting research, which has been put into practice, found that you could increase participation rate in the pension fund by 30-something to 60-something per cent by requiring employees to opt *out* rather than opt *in*. The power of inertia.

Another successful innovation is allow employees to "buy" additional percentages out of pay raises, especially early in their career. So I get a 5% pay rise and I put 1% of it into my pension contribution.
First, thank you for your thoughtful reply to my musings. Second, your point about opt-in versus opt-out is spot on - I deal with that in a different industry with regard to privacy; in the EU, you must opt-in to share data whereas in the US you must opt-out - it makes a big difference when you are engaging digitally....and it is the same with healthcare (my industry - digital health/medical devices/etc). I currently live/work in Europe but am American and see the differences very clearly as I am given different options based on my location....
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Re: How America Invests: Vanguard data

Post by Jeff Albertson »

from nineteen years ago -
The defined-contribution system is broken; we just haven't realized it yet. While it may be possible to fix it by providing participants with much closer attention to expenses ... it makes more sense to improve the defined-benefit system with equitable vesting, portability and liability protection. These plans operate at a much higher level of efficiency and competence, with correspondingly higher and more uniform returns, than the ever-growing hodgepodge of expensive employee-run accounts.

Such a paternalistic approach may offend those who make a philosophy out of self-reliance. But most people don't build their own cars or remove their neighbors' kidney stones. We should treat retirement investing the same way. If an employee wants to manage his own retirement account, he should at least be able to show competence in the basic principles of investing, such as the differences between stocks and bonds, the fundamentals of prudent diversification, and the impact of expenses on returns.

The self-managed defined-contribution concept is fatally flawed. While Wall Street pros may (or may not) be getting it right, the overwhelming majority of employees are floundering, bewildered by a subject they only dimly comprehend. The time has come to throw workers a lifeline, in the form of meaningful pension reform, before we all drown.
http://www.efficientfrontier.com/ef/102/barrons.htm
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Helo80
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Re: How America Invests: Vanguard data

Post by Helo80 »

Keep in mind that not everybody uses vanguard and not everyone that uses vanguard keeps all of their money at vanguard.
Thank God for Wall Street Bets.
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grabiner
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Re: How America Invests

Post by grabiner »

rossington wrote: Fri Dec 11, 2020 4:04 am Can we agree the 60/40 portfolio is the portfolio of choice for self directed retirees? I will wager this data will concur with Fidelity, Schwab, etc.
Experience matters in investing and these retirees have gained that experience and it certainly shows that a higher equity allocation percentage is favorable for most retirees and they are maintaining this AA.
No, because 60% stock is only the average; there is a wide range. A quarter of retirees hold over 80% stock, and another quarter hold less than 40% stock. The right allocation varies with their financial situation.
**One caveat that may slightly skew the data is that many clients do not hold all of their investments at one brokerage firm.**
And this is another factor which widens the range, which affects both conclusions. A US government retiree might hold 100% stock in a Vanguard Roth IRA, with all the bonds in the TSP G fund, to get an overall allocation of 60% stock. Conversely, a US government retiree with 60% stock in a Vanguard account could well have less than 60% stock including a TSP which is all in the G fund.
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Seasonal
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Re: How America Invests: Vanguard data

Post by Seasonal »

Vanguard trivia, as of 2017: "Flagship clients ... need to have $1 million or more invested in Vanguard funds. The company has around 60,000 flagship clients among its 25 million individual account holders." https://www.inquirer.com/philly/blogs/i ... ients.html
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Re: How America Invests: Vanguard data

Post by deserat »

Seasonal wrote: Fri Dec 11, 2020 9:08 am Vanguard trivia, as of 2017: "Flagship clients ... need to have $1 million or more invested in Vanguard funds. The company has around 60,000 flagship clients among its 25 million individual account holders." https://www.inquirer.com/philly/blogs/i ... ients.html
Thanks for that - as I thought - that's 0.2%....

Trivia - I decided to go to the Vanguard 'annual shareholder meeting' in Scottsdale a few years ago. Very interesting .... they definitely were frugal in where they hosted the meeting, what was offered as refreshments and the minimal schmoozing being done. There were quite a few questions regarding activist agendas, but the most interesting comment/question made was made by a guy who reminded me of a southern California aged 'artist' who stood up and said "Aren't we all millionaires here due to VG's approach?' The VG board member who answered said that most account holders were not....I suspect many who were there with me were, but were a very small subset of the VG account holder representative. I had never been to a 'shareholder meeting' before, so did appreciate that particular experience.
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Re: How America Invests

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DSBH wrote: Thu Dec 10, 2020 10:51 pm
David Jay wrote: Thu Dec 10, 2020 10:23 pm I found this graph very interesting:
...
Basically flat (or even slightly up) after age 70.
Looks like VG Life Strategy Moderate Growth fund would work for 1-fund portfolio investors in the Social Security age group.
We are one-fund retirees using LS Moderate. One fund portfolio thread here: viewtopic.php?t=287967
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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David Jay
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Re: How America Invests

Post by David Jay »

Stinky wrote: Thu Dec 10, 2020 10:46 pm Clearly, self-directed investors above age 60 or so have a lot more in equities than if they were invested in target date funds.

Who’s right? Self directed investors or those who set the glide path for target date funds?
I would suggest: Both.

Long term, experienced DIY investors have come to understand the markets and diversification. They know their personal limits. If you read the entire paper you saw that there were retirement age investors with >98% equities and 0% equities.

Typical employees who have taken no interest in investing and just let their TD fund grow may not have gained the experience necessary to be equipped for 30% portfolio volatility.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: How America Invests

Post by EHEngineer »

David Jay wrote: Thu Dec 10, 2020 10:23 pm I found this graph very interesting:

Image

Basically flat (or even slightly up) after age 70.
The brackets for the age groups are wrong. A person born in 1980 would be 39, not 36. similar errors in other age groups. if they cant get that right, I question the data.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius
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