What is the "Quit when you won the game" portfolio?

[Register44]

[HalfMillionaire]

Something like the Windsor fund - 1/3 stocks, 2/3 bonds. You get reasonable stability with returns.

[KlangFool]

100% cash just seems diversified to me.

1) What do you do if we hit hyperinflation?


2) Putting all your eggs in one basket is never a good idea.


3) 60/40, Stock, bond. A few years of expense in CASH. And, some physical Gold and Silver make a lot more sense.

KlangFool

[rockstar]

100% cash just seems diversified to me.

1) What do you do if we hit hyperinflation?

Then, we're all screwed and buying bonds like crazy.

[firebirdparts]

Permanent Portfolio has "Permanent" right there in the name.

[Register44]

[Buddtholomew]

100% cash just seems diversified to me.

1) What do you do if we hit hyperinflation?


2) Putting all your eggs in one basket is never a good idea.


3) 60/40, Stock, bond. A few years of expense in CASH. And, some physical Gold and Silver make a lot more sense.

KlangFool

That’s me.
Diversification is the one and only free lunch as they say.

[goodenyou]

The correct answer, of course, is it depends on by how much have you won your game.

It will determine your portfolio withdrawal rate. You could be 100% cash and hyperinflation AND outlive your money, if you have enough of it.

[mhc]

3 fund portfolio

equities between 25-75% depending on willingness and need to take risk. a lot more information is needed to make a more specific recommendation.

no more than a month or two of cash. cash is a real drag on returns. holding cash means you have to have a larger portfolio to declare that you have won the game.

Personally, I will be somewhere from 50/50 to 75/25 AA when I retire (equities/bonds).

[jebmke]

Depends on a lot of factors, including how close to the edge you are.

I have no idea when we "won the game" because we really didn't pay much attention through the accumulation years.

[mptfan]

30/70 stocks/bonds.

https://www.forbes.com/sites/rickferri/ ... 9a2b425dae

[retiredjg]

What is the "Quit when you won the game" portfolio?

Could be almost anything. Depends on the individuals involved and their circumstances.

[BlueCable]

Liability matching portfolio of inflation protected securities, then the rest in stocks.

[Forester]

Permanent Portfolio 25 stocks 25 bonds 25 gold 25 cash... a 30/70 portfolio gets crushed in the 1970s.

[Greenman72]

Something like the Windsor fund - 1/3 stocks, 2/3 bonds. You get reasonable stability with returns.

+1 to this.
Alternatively, you could buy an annuity in the amount you need to fund your lifestyle, then invest the rest in 100% equity.
EG - you need $100k annually to live, and there's an annuity which pays a guaranteed 4.5% - you purchase $2.2m worth of annuity, and put the rest in equities.

(Whether you should buy a SPIA or a variable annuity is a different question, and one that I have a strong opinion on that differs from most others on this site. I'm a big fan of VA's when used correctly.)

[LiveSimple]

50% / 50% portfolio, 50% equities, 50% bonds

[Ragman]

50/50 equities and bonds. 25% of equities in international. All broad based, low cost index funds.

[CABob]

Some investors will want to continue to play even after they have won. I suspect that most will still want some exposure to stocks but the answer to . the question will be varied. I would suggest that perhaps the Life Strategy Income or Target Retirement Income funds might be appropriate.

[freyj6]

If I'd "won the game" right now I'd probably be in something like this:

33% TIPS
33% Short Term Bonds
33% Stocks

[Afty]

What do you mean by "won the game"? Do you mean you have 25-33x expenses? If so, note that the 3-4% Safe Withdrawal Rates we hear about are predicated on taking a fair amount of equity risk, at least 50%. If you have less equity, the failure rate is much higher.

For example, let's say you wanted to be ultra safe and hold a portfolio of 100% 5-year treasuries. Over a 30 year retirement withdrawing 4%, you would run out of money 55% of the time. If you held a 50/50 portfolio, you'd fail only 5% of the time.

[Brianmcg321]

Permanent Portfolio 25 stocks 25 bonds 25 gold 25 cash... a 30/70 portfolio gets crushed in the 1970s.

This

[Call_Me_Op]

It means putting 25X in safe investments and doing what you want with any additional.

[HootingSloth]

Sharing more about your personal circumstances would allow more tailored answers.

I would think something like: (a) a liability matching portfolio consisting of a combination of pensions, social security, single premium immediate annuities, and/or a ladder of TIPS to cover expenses that you want to be most certain to have, plus (b) a few years of expenses in cash and perhaps some gold if you are so inclined, plus (c) the remainder in a risk portfolio made up of somewhere between 40% and 100% global stocks, based on your risk tolerance, with the rest mostly in bonds, perhaps with some other things like REITs, multifactor tilts, etc. if you are so inclined.

[spanky123]

All weather portfolio or 50/50 (equity/Fixed-income)
https://www.iwillteachyoutoberich.com/b ... portfolio/

[sport]

I am reminded about a story I heard about Groucho Marx.

Friend: Groucho, how have you invested your money?
Groucho: 100% Government Bonds.
Friend: Groucho, you can't make any money in government bonds.
Groucho: You can if you have enough of them.

[spanky123]

Some investors will want to continue to play even after they have won. I suspect that most will still want some exposure to stocks but the answer to . the question will be varied. I would suggest that perhaps the Life Strategy Income or Target Retirement Income funds might be appropriate.

Not a recommendation - some people still like to play with potential high return assets, e.g., disruptive tech, biotechnology, AI, cryptocurrency. It is quite tempting in light of recent returns.

[jakehefty17]

30/70 stocks/bonds.

https://www.forbes.com/sites/rickferri/ ... 9a2b425dae

+1

I'd make a minor adjustment to say 30% stock and 70% fixed income. Hedge against inflation risk within your fixed income with whatever you desire. Permanent Portfolio is ultra-conservative in my mind, but I can understand if that's what helps you sleep at night.

If you've won the game, to me that means you don't care about returns anymore. You don't need returns. You care about risk & volatility.

In practice, I don't think I could be this conservative with my investments. For me to adopt this kind of allocation, I'd need to earn/grow more money than I ever anticipate being able to. I don't dare dream of that. I plan to retire with closer to 50/50 allocation. Hopefully early

Depending on how much money you're talking about... and your adversity to risk... I'd say ballpark 25-50% stock and 50-75% fixed income.

[vineviz]

100% cash just seems diversified to me.

edit: Major Whoops. I meant to say *undiversified.

There is no useful interpretation of “won the game”.

It’s not a game, and even if it was you wouldn’t know if you “won” until the end (e.g. you’re dead). If retirement is a “game” then you’re still in the pre-game warmup period.

[Soon2BXProgrammer]

you need to define how much you have won the game by.... if you say have 100x+... i would put 25x in bonds and the rest in all world equities.

[bargainhuntingking]

Keep it simple:

Vanguard LifeStrategy Growth Fund (80% total world stock / 20% total world bond)

[SaintExupery]

Keep it simple:

Vanguard LifeStrategy Growth Fund (80% total world stock / 20% total word bond)

Same. That's my choice for a one-fund portfolio, that I plan to maintain life-long during both the accumulation and withdrawal phases.

[FIREchief]

Liability matching portfolio of inflation protected securities, then the rest in stocks.

+1. You beat me to it.

100% of money you will need or may need in TIPS.
Remainder in 100% equities (or otherwise appropriate AA for your heirs financial timelines)*.


*Actually, the best place for your heirs' eventual inheritance is in their own fully funded, asset protected qualified retirement accounts (i.e. enabled by current gifts versus future inheritance).

[FIREchief]

It’s not a game, and even if it was you wouldn’t know if you “won” until the end (e.g. you’re dead). If retirement is a “game” then you’re still in the pre-game warmup period.

Unless you're currently retired. Then you might be in the first quarter, perhaps the fourth quarter, or anywhere in between.

ETA: some think they're in the first quarter while God knows that they're at the 2 minute warning.

[FIREchief]

I am reminded about a story I heard about Groucho Marx.

Friend: Groucho, how have you invested your money?
Groucho: 100% Government Bonds.
Friend: Groucho, you can't make any money in government bonds.
Groucho: You can if you have enough of them.

Nice one!!

[59Gibson]

35% in total world equities, 30%bonds, 4%cash, 15%reit, 15%commodities, 1% crypto????

[willthrill81]

You don't know for a fact that you've 'won the game' until you're dead. I'm serious.

Also, many of us are 'playing the game' for our heirs and charity too, so the 'game' never ends for us.

But for those who want a portfolio that has been very stable, relatively speaking, and which has also produced respectable returns, the Permanent Portfolio is a reasonable choice. Since 1978 (all available data in Portfolio Visualizer), it's worst nominal loss in a single calendar year was just -5.20%.

[Register44]

[utvolfan]

For those of you who advocate for a portfolio with Gold, is this through a fund that can be purchased in a Vanguard Account?

[willthrill81]

For those of you who advocate for a portfolio with Gold, is this through a fund that can be purchased in a Vanguard Account?

You can purchase a gold ETF like IAU with Vanguard.

[Woodshark]

50/50 equities and bonds. 25% of equities in international. All broad based, low cost index funds.

This is the diversified portfolio I'm counting on.

[invest2bfree]

90% VT and 10% BND for simplicity.



Myself personally 30% VTI, 30% EFG, 30% XSOE, 10% bonds.

Hyperinflation is protected with stocks.

Deflation you have some bonds and international.

[1TheGame]

Age 61 and retired 3 years. House paid off. 60% equities (split 80/20 domestic/intl) / 20% bonds /20% cash-like. The bulk of "cash-like" is in a stable value fund. Portfolio is up a good amount since I retired. DW (lower earner) will start SS at 62 and I plan to start at 70. To me "won the game" is not just accumulating a large enough portfolio, but also not needlessly working longer than required just to have an even bigger portfolio. I had a great career with a benevolent employer, but I was more than ready to have my time under my own control (i.e. retire). I see many of my former (and older) colleagues continuing to work because I don't think they know what else to do.

[vineviz]

Thank you for the responses. I am happy to see consistently that no one advocates all cash. When I heard the "game quote" in bogleheads threads I thought that people were referring to all cash. To me that always seemed incredibly risky even for a billionaires.

I also agree that to me not even factoring in returns, but simply for the "safest" portfolio. PP is the best I have found.

You should never take more risk than you need to take, and you should never take less risk than can afford to take. In between those boundaries is the realm of risk preference.

[000]

Something like the Windsor fund - 1/3 stocks, 2/3 bonds. You get reasonable stability with returns.

Windsor is 100% stocks. Perhaps you mean Wellesley. BTW, I don't think either Wellesley or Wellington is diversified enough to be one's only fund.

[000]

For those of you who advocate for a portfolio with Gold, is this through a fund that can be purchased in a Vanguard Account?

Sure, SGOL is such an ETF. It (and other bullion funds) will generate a K-1 if that matters to you.

[000]

.

You've never won the game. I'd probably keep my current AA and just tweak the risk knob.

[7eight9]

Treasuries and defeased bonds.

[willthrill81]

Liability matching portfolio of inflation protected securities, then the rest in stocks.

+1. You beat me to it.

100% of money you will need or may need in TIPS.

Of course, the rub there is that a TIPS ladder still leaves longevity risk wide open unless you have set it to last until well past your life expectancy. Considering that a healthy 65 year old with a lot of resources may live to 100, that requires a little over 35x right now since TIPS' yields are negative. That's equivalent to under a 3% withdrawal rate, which has historically been incredibly safe for diversified, balanced portfolios and had tremendous upside potential that is mostly lost with the TIPS ladder.

This doesn't make the LMP approach bad at all, but it does mean that it's sacrificing quite a lot for a period certain guarantee. In the context of an investor who is far ahead of what's been remotely necessary though (e.g. someone with 50x or more), it may make perfect sense.

It's too bad that you can't buy a deferred annuity that's linked to CPI, because that would at least address the longevity risk issue while still removing inflation from the equation.

[AerialWombat]

For me, the glide path ends at 1/3 rentals, 1/3 US stock index, 1/3 cash. YPPMV.

[Pandemic Bangs]

Depends on how you got there.

Dead-relative "won the game," sold-your-company "won the game," or eeked into seven figures in late life with decades of careful saving "won the game"...?

Different answers...