Anyone feel like ripping this asset allocation to shreds?

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seekinganswers
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Joined: Mon Sep 19, 2016 5:29 pm

Re: Anyone feel like ripping this asset allocation to shreds?

Post by seekinganswers » Thu Sep 29, 2016 4:15 pm

FillorKill wrote:
seekinganswers wrote:Purchasing power preservation for about 40 years with an ever decreasing need to purchase...

...PROCESS: Move cash into these allocations at rate of 30K/quarter, rebalancing by adding rather than selling. Do this for 8-10 years - roughly 2017 - 2027.

Your plan is to spend 20-25% of your investment horizon getting to your stated AA? You'd probably be better off with a more conservative AA implemented in a much shorter period. Your actual AA across the 40 year period is already much more conservative than your target as you take (up to) a decade to get there.


Good point! Will need to factor in that concept ... just fearful of allocating larger lumps only to see it disappear. Bed bugs would eat cash under a mattress more slowly than market distortions as they revert.

Seriously good point you make though!

boglephreak
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Re: Anyone feel like ripping this asset allocation to shreds?

Post by boglephreak » Thu Sep 29, 2016 4:15 pm

FillorKill wrote:
seekinganswers wrote:Purchasing power preservation for about 40 years with an ever decreasing need to purchase...

...PROCESS: Move cash into these allocations at rate of 30K/quarter, rebalancing by adding rather than selling. Do this for 8-10 years - roughly 2017 - 2027.

Your plan is to spend 20-25% of your investment horizon getting to your stated AA? You'd probably be better off with a more conservative AA implemented in a much shorter period. Your actual AA across the 40 year period is already much more conservative than your target as you take (up to) a decade to get there.

^ this. its fine if you are concerned about lump summing it all in now, but keeping it out of the market for years seems foolish. when i have seen advice on DCA'ing it into the market, it was always in less than a year or two, never over a decade. i personally think lumpsum and forget is the best policy, but if you want to DCA, shorten the time.

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seekinganswers
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Re: Anyone feel like ripping this asset allocation to shreds?

Post by seekinganswers » Fri Sep 30, 2016 12:59 pm

Thanks for your feedback.

Here's an update. Thoughts?

------------------------------------------
---------UPDATED AA---------

PROCESS: Allocation rate of 20K/month, rebalancing by adding rather than selling. Do this for 4 years - 2017 - 2020.

---------

STOCKS 50% ($10K per 20K)
>> VT Vanguard total/global
---- Put this in taxable acct << turn on div reinvest

BONDS 40% ($8K per 20K)
>> BND Vanguard Total Bond Index (almost all US)
---- Put in non-tax accounts w/div reinvest on

GOLD 10%
>> IAU 10% ($2K per 20K)
---- Change from GLD to IAU for lower expense ratio
---- Put in non-tax accounts due to tax issues for "collectibles"


------------------------------------------
------------------------------------------

boglephreak wrote:

FillorKill wrote:

soboggled wrote:

boglephreak
Posts: 441
Joined: Fri Apr 22, 2016 5:16 pm

Re: Anyone feel like ripping this asset allocation to shreds?

Post by boglephreak » Fri Sep 30, 2016 1:21 pm

only additional comment that pop up is: is BND really the best bond fund for you; would a muni fund be better given you seem affluent, or would an short/intermediate bond fund be better because of low interest rates currently (I am not an expert, or even amateur on bond funds, so i would defer to others). i know BND is recommended as part of the three-fund portfolio, but i rarely see people talking about actually using it.

edit: just saw BND is going in non-tax, so ignore the muni fund bit.

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seekinganswers
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Re: Anyone feel like ripping this asset allocation to shreds?

Post by seekinganswers » Fri Sep 30, 2016 1:28 pm

boglephreak wrote:you seem affluent ..


Affluent ... no ... this is just an exercise in futility - unfortunately.

That said, I'm trying to figure out if a more global bond fund would be less risky with similar returns. Have been looking at TOTL. Any thoughts?

boglephreak
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Re: Anyone feel like ripping this asset allocation to shreds?

Post by boglephreak » Fri Sep 30, 2016 1:38 pm

seekinganswers wrote:
boglephreak wrote:you seem affluent ..


Affluent ... no ... this is just an exercise in futility - unfortunately.

That said, I'm trying to figure out if a more global bond fund would be less risky with similar returns. Have been looking at TOTL. Any thoughts?

personally, i question whether holding int'l equity is necessary and have only allocated 20% of my portfolio to it. smarter people than me convinced me to get some, so i did, but at the very minimum. i see bonds as safety only and am perfectly fine with trusting the US gov't to provide that safety without the need to go to other countries, so i do not want or see the need to get int'l bond. smarter people than me are convinced and argue that they may provide diversification, etc., but i dont agree. (note, i only have a 10% bond allocation, so even if 50% of that was int'l bond, it wouldnt make any difference. when i go to 30, 40 or 50% bonds, i may change my mind, but currently i dont give it much thought.)

halfnine
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Re: Anyone feel like ripping this asset allocation to shreds?

Post by halfnine » Fri Sep 30, 2016 3:17 pm

seekinganswers wrote:.....
GOLD 10%
>> IAU 10% ($2K per 20K)
---- Change from GLD to IAU for lower expense ratio
---- Put in non-tax accounts due to tax issues for "collectibles"
.....


Collectible taxation is rarely as big of a deal as most people make out. Gold can also be tax loss harvested which can avoid collectible taxation as well.

I'd be inclined to hold 3-5% as physical. Use the IAU to rebalance, etc.

halfnine
Posts: 707
Joined: Tue Dec 21, 2010 1:48 pm

Re: Anyone feel like ripping this asset allocation to shreds?

Post by halfnine » Fri Sep 30, 2016 3:27 pm

seekinganswers wrote:Thanks for your feedback.

Here's an update.
---------

STOCKS 50% ($10K per 20K)
>> VT Vanguard total/global
---- Put this in taxable acct << turn on div reinvest

BONDS 40% ($8K per 20K)
>> BND Vanguard Total Bond Index (almost all US)
---- Put in non-tax accounts w/div reinvest on

GOLD 10%
>> IAU 10% ($2K per 20K)
---- Change from GLD to IAU for lower expense ratio
---- Put in non-tax accounts due to tax issues for "collectibles"

-----


If I owned property I don't think that would be an unreasonable portfolio. Without property ownership I'd be more inclined to

Stocks 40%
Bonds 30%
REITs 20%
Gold 10%

FillorKill
Posts: 1007
Joined: Sat Aug 06, 2011 7:01 am

Re: Anyone feel like ripping this asset allocation to shreds?

Post by FillorKill » Fri Sep 30, 2016 4:07 pm

seekinganswers wrote:Here's an update. Thoughts?

------------------------------------------
---------UPDATED AA---------

PROCESS: Allocation rate of 20K/month, rebalancing by adding rather than selling. Do this for 4 years - 2017 - 2020.

---------

Big step in the right direction - you've done yourself a favor.

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