First Post [New to forum, using two-fund portfolio]

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ParamedicProf
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First Post [New to forum, using two-fund portfolio]

Post by ParamedicProf » Fri Jul 06, 2018 9:20 am

Just thought I would finally make a post after skulking around for a year or two. I am 48 and live way down in the nice cool deep south (heat index of 35,000 degrees). I already have a few favorite posters I usually read on here. I guess my all time fave is Toons. Second would be stemiker (spelling). Both are no nonsense and always positive. Anyway my retirement account is all pretax and split between a whopping two funds, Wellington and Balanced index. I was constantly fiddling with everything so I threw up my hands and said these two are good enough.
CK

retiredjg
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Re: First Post

Post by retiredjg » Fri Jul 06, 2018 5:39 pm

Nothing wrong with those choices if they suit your temperament.

Are you using a plan at work? If not, that might be a good thing to consider, especially if there is an employer contribution or match.

ParamedicProf
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Re: First Post

Post by ParamedicProf » Fri Jul 06, 2018 6:08 pm

I am a college professor in MS and I am in the PERS retirement system.

retiredjg
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Re: First Post

Post by retiredjg » Fri Jul 06, 2018 6:15 pm

What kinds of accounts do you have your Wellington and Balanced Index in?

ParamedicProf
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Re: First Post

Post by ParamedicProf » Fri Jul 06, 2018 6:28 pm

They are in my traditional IRA at Vanguard. Been with VG about 6 years. Old 401k's all rolled into it.

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Re: First Post

Post by ParamedicProf » Fri Jul 06, 2018 9:42 pm

Could I realistically keep this for life? That is my plan anyway.

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digarei
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Re: First Post

Post by digarei » Fri Jul 06, 2018 9:49 pm

ParamedicProf wrote:
Fri Jul 06, 2018 9:42 pm
Could I realistically keep this for life? That is my plan anyway.
Good plan. You could even rebalance between the two if desired. A little more Wellington for more stock. A little more Balanced Fund for more fixed income.

I like to have more in international stock but if you’re a good saver, that will likely make up the difference in any return.
Connect with Bogleheads in Northern California! Click the link under my user info/avatar.

ParamedicProf
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Re: First Post

Post by ParamedicProf » Fri Jul 06, 2018 10:03 pm

As of right now I just plan to keep them at 50/50. I do like your ideas though. I just don't want to think about it very much as I tend to be a little obsessive and can't leave it alone. I was that way for the past year or so, constantly looking for the best portfolio. I would read this site and get more and more confused about what I "had to do." I finally just went back to two funds that I think are simple and great.

mhalley
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Re: First Post [New to forum, using two-fund portfolio]

Post by mhalley » Sat Jul 07, 2018 6:48 pm

The enemy of a good plan is the search for the perfect plan. You could do much worse. A couple of similar quotes:
“We lose perspective on the quality of our creations the moment we create them. And the more we pore back over them in pursuit of a fresh perspective, the farther it moves away from us. Combine this with the need for perfection and the result is often paralysis.”
"The quest for perfection also leads to dithering"
https://www.psychologytoday.com/us/blog ... enemy-good

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digarei
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Re: First Post [New to forum, using two-fund portfolio]

Post by digarei » Sat Jul 07, 2018 7:45 pm

mhalley wrote:
Sat Jul 07, 2018 6:48 pm
The enemy of a good plan is the search for the perfect plan. You could do much worse. A couple of similar quotes:
“We lose perspective on the quality of our creations the moment we create them. And the more we pore back over them in pursuit of a fresh perspective, the farther it moves away from us. Combine this with the need for perfection and the result is often paralysis.”
"The quest for perfection also leads to dithering"
https://www.psychologytoday.com/us/blog ... enemy-good
I like this. Very sound.

I would only add that though it’s apparently true that

“the more we pore back over [our creations] in pursuit of a fresh perspective, the farther it moves away from us...”

a re-evaluation undertaken after the passage of time can lead to an improvement of the original work.

I’m thinking how true this is in writing yet I imagine that this could also be applied to a financial plan and other output. Constant revision can lead to a lot of frustration and in the end prove to be a waste of time. However, put some time between that first expression or elucidation of your goals and a re-reading, and sometimes new insights occur.

If a re-sorting of one’s objectives or financial plan fits with my experience with writing, it’s good to let several months pass before taking it up again.
Connect with Bogleheads in Northern California! Click the link under my user info/avatar.

ParamedicProf
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Re: First Post [New to forum, using two-fund portfolio]

Post by ParamedicProf » Sat Jul 07, 2018 8:11 pm

I appreciate all comments. I have indeed suffered from analysis paralysis. I have just thrown up my hands and said Wellington has been around forever and made many folks a ton of money. I also looked at Balanced and said here is a fund that will do fine when the economy is booming and not be wiped out when it isn't.
:mrgreen:

retiredjg
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Re: First Post [New to forum, using two-fund portfolio]

Post by retiredjg » Sun Jul 08, 2018 6:53 am

"The quest for perfection also leads to dithering"
https://www.psychologytoday.com/us/blog ... enemy-good
This is a great quote and describes something we see here A LOT!

ParamedicProf, you have already realized that you have a tendency toward "analysis paralysis". I think the portfolio you have chosen is probably perfect for you - for most of your life anyway. After you retire, you might consider moving the Wellington into Wellesley Income just to lower your stock allocation.

You have not mentioned that you are saving more than whatever is going into your state retirement. I think putting some money into Roth IRA might be a good idea for you.

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dwickenh
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Re: First Post [New to forum, using two-fund portfolio]

Post by dwickenh » Sun Jul 08, 2018 8:42 am

ParamedicProf wrote:
Fri Jul 06, 2018 9:20 am
Just thought I would finally make a post after skulking around for a year or two. I am 48 and live way down in the nice cool deep south (heat index of 35,000 degrees). I already have a few favorite posters I usually read on here. I guess my all time fave is Toons. Second would be stemiker (spelling). Both are no nonsense and always positive. Anyway my retirement account is all pretax and split between a whopping two funds, Wellington and Balanced index. I was constantly fiddling with everything so I threw up my hands and said these two are good enough.
CK
I think your plan is the best for your temperament and you are very wise to realize that less(less fiddling) is better.

Best wishes for your future retirement,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

ParamedicProf
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Re: First Post [New to forum, using two-fund portfolio]

Post by ParamedicProf » Sun Jul 08, 2018 9:08 am

I have found knowing one's temperament may be the most important aspect of investing. At least for me.

I am going to continue feeding my IRA above and beyond state retirement. My plan is to teach until I am around 60 and then I would like to do some type of full time ministry for the rest of my life. So in that regard I don't technically plan to ever retire. I could see myself eventually converting my traditional IRA to Roth and having tax free money towards the end of this life.

retiredjg
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Re: First Post [New to forum, using two-fund portfolio]

Post by retiredjg » Sun Jul 08, 2018 10:06 am

For a person with a pension, Roth IRA might be a better choice, especially if your second career may be bringing in income. We don't really know enough to suggest one over the other though.

averagedude
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Re: First Post [New to forum, using two-fund portfolio]

Post by averagedude » Sun Jul 08, 2018 10:20 am

Seems reasonable to me as long as you are comfortable having less than 10% internationally. Me personally, if i was going to "give up", i would buy a life strategy fund that suits my asset allocation, and be comfortable with getting lower returns, but having more diversification.

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Sandtrap
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Re: First Post [New to forum, using two-fund portfolio]

Post by Sandtrap » Sun Jul 08, 2018 10:34 am

Your simple approach seems to fit your well.
That said, take into account the flexibility of individual funds, IE: 3-4 fund portfolio as far as placement for best tax advantage.
Read:
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
OTOH
Between the 2 "balanced" funds you have, you can vary the allocation between them to give you a set ratio going forward or increase the fixed allocation as time passes.
Read:
Outstanding write up on the 64/40 allocation by Bernstein.
http://web.archive.org/web/20061214061 ... in6040.pdf
R. Ferri on Bernstein's 60/40
http://www.etf.com/sections/index-inve ... nopaging=1

I have both of these funds in a "sub trust", but also tilt with a "3 fund" in a larger separate trust that includes international. There's no "perfect" way. You have a good one.

aloha,
jim

ParamedicProf
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Re: First Post [New to forum, using two-fund portfolio]

Post by ParamedicProf » Sun Jul 08, 2018 3:44 pm

I decided I don't need or care much for international. I read so many of these posts and see folks foaming at the mouth over international vs. not international. I have a simplistic view of it all.
1. If the US stock market crashes, everything will crash.
2. If the stock market crashes, it probably won't matter where money is at.
3. I grew up on a farm on a dirt road in MS. I can hunt, fish and farm. I will figure it out at that point haha.

Thanks for all the comments

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