What's your asset allocation and why?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
heyyou
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Joined: Tue Feb 20, 2007 4:58 pm

Re: What's your asset allocation and why?

Post by heyyou » Mon Jul 11, 2016 7:05 am

Age 66, retired ten years with no-COLA pension and spending from taxable account, delaying SS, making tIRA to RIRA conversions
Equity Portfolio, 65%: 1/N, domestic LG, LV, Sm, SmV, REITs, International L, LV, S, SmV, EM
Bonds: 30%
Commodities Futures fund & Gold: 5%, formerly more but haven't rebalanced

In the last century, the Callan Periodic Table with its equal equity slices appealed to me. These days, I would start with Trev H's 4x25 Ultimate Buy and Hold with its domestic L & SmV plus International LV & Sm components.

longinvest
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Re: What's your asset allocation and why?

Post by longinvest » Mon Jul 11, 2016 7:39 am

My asset allocation is 50/50 stocks/bonds.

My stocks are divided 50/50 between domestic/international stocks.
My bonds are 100% domestic, as I do not want to include derivative products in my portfolio (which would be necessary to hedge currency for including international bonds).
I only use low-cost total-market index funds (or ETFs).

Reasons for this choice:

I used to be invested 100% in stocks, because I thought (at the time) that the objective was to maximize returns and I believed that stocks always beat bonds and cash, so I saw no point in putting any money into bonds or keeping any more cash around than strictly necessary to pay for upcoming short-term expenses.

I have changed, now. The goal of my portfolio is not to maximize returns; it is to protect me in case I am wrong in my assumptions. It took me a very long time to appreciate to this. With my current portfolio, I'll never be worse than 50% wrong (nor better than 50% right).

I am not only trying to protect myself against the uncertainty in future portfolio returns (yes, I do believe that stocks have a potential for much higher returns than bonds, but I might be wrong), but also against the uncertainty in my own future life (my own circumstances could change in a totally unanticipated manner, breaking assumptions about time horizon for taking money out of the portfolio).

In other words: I know almost nothing for sure about the future. I invest accordingly.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VAB/ZRR

leo383
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Location: Durham, NC

Re: What's your asset allocation and why?

Post by leo383 » Mon Jul 11, 2016 8:35 am

80/20, and I'd eventually like to glide path down to something like 60/40 in my golden years. Not yet though.

We were 100/0 until about five years ago. I slept well then, and I do now.

jay22
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Location: Sacramento, CA

Re: What's your asset allocation and why?

Post by jay22 » Mon Jul 11, 2016 12:03 pm

I am 90/10 stocks/bonds. My stocks allocation is 70/30 US/International. I plan to take it to 75/25 by not buying any more international funds.

Hiwatter
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Joined: Tue Aug 16, 2016 3:43 pm

Re: What's your asset allocation and why?

Post by Hiwatter » Wed Oct 11, 2017 10:05 am

Age: 40

80% US Stock
10% International Stock
10% US Bond

I keep toying with the idea of adding REIT (5%) but can't quite make the leap.

itstoomuch
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Location: midValley OR

Re: What's your asset allocation and why?

Post by itstoomuch » Wed Oct 11, 2017 11:14 am

itstoomuch wrote:
Fri Jul 08, 2016 4:14 pm
In our Discretionary, We do a lot of stuff and strategy. Currently, fairly conservative @60% cash with speculative stocks and Indexes @ 40%. Holdings can vary weekly.
see below notes
It's changed. Bought retirement home which is temporarily a rental. Echanged cash yielding $0.00 for downplay equity.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

hulburt1
Posts: 231
Joined: Tue Jul 15, 2014 9:17 pm

Re: What's your asset allocation and why?

Post by hulburt1 » Wed Oct 11, 2017 11:53 am

I'm 97% in stocks-S&P, total, Health, Prim cape. I also own 4000 shares of Facebook bought at $50. Have 2.3m and only live on $60000.
Could lose 50% and be doing ok. Cash will cover about 2+years. Will take SS at 70 a long with wife. If something happened we would still get about $44000 from SS. Have a fun part time job but work only 2hr a day for 6month a year. I have all dividends go to cash and at the end of the year take 10% of my profit for the year put in with my cash. I take out about $30000 a year from the cash to live on. I've been doing this for about 10year and have double my money not working. I'm 64, w62. I also move about $1000 a month to Roth. My plan is to take out about $1000 a month when I hit 70 tax free.

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czeckers
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Location: Upstate NY

Re: What's your asset allocation and why?

Post by czeckers » Wed Oct 11, 2017 3:41 pm

AA is in my signature line.

80/20 stocks/bonds. 50/50 US/international with small/value tilt. Only high quality bonds to offset higher portfolio risk.

At this point, my contributions still exceed portfolio growth so I can be fairly aggressive.
The Espresso portfolio: | | 16% LCV, 16% SCV, 16% EM, 8% Int'l Value, 8% Int'l Sm, 8% US REIT, 8% Int'l REIT, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."

pollifax
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Joined: Tue Sep 12, 2017 4:05 pm

Re: What's your asset allocation and why?

Post by pollifax » Wed Oct 11, 2017 5:51 pm

Ages 49/48

Allocation 60/40 Equities/Fixed Income

We think we will stay at this allocation for quite a while -- perhaps floating down to 50/50 in retirement. We don't have a huge appetite for risk at this point in our lives/careers -- we feel we are right where we want to be to sleep well at night.

GoldenFinch
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Re: What's your asset allocation and why?

Post by GoldenFinch » Wed Oct 11, 2017 6:08 pm

seersucker wrote:
Sat Jul 09, 2016 8:21 am
I'm a dual momentum guy, currently 100% in VOO. It just makes sense to me.
Seems like singular momentum to me. If I were way younger, it would make sense to me too.

freyj6
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Re: What's your asset allocation and why?

Post by freyj6 » Wed Oct 11, 2017 6:24 pm

GoldenFinch wrote:
Wed Oct 11, 2017 6:08 pm
seersucker wrote:
Sat Jul 09, 2016 8:21 am
I'm a dual momentum guy, currently 100% in VOO. It just makes sense to me.
Seems like singular momentum to me. If I were way younger, it would make sense to me too.
He's referencing the strategy from the book, Dual Momentum, which alternates between VOO, VXUS and BND (if you use Vanguard funds). The "Dual" part is that it uses relative and absolute momentum, meaning it allocates to the relatively higher momentum between US and international, and goes 100% bond when the 12-month momentum of both is low.

bhough
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Joined: Wed Feb 15, 2017 6:53 pm

Re: What's your asset allocation and why?

Post by bhough » Wed Oct 11, 2017 7:34 pm

Stocks 42% (US 98%, Int'l 2%)
Bonds 7%
Private Real estate 25%
Cash 26%

Pretax 53%
Posttax 47%

Why? In my 20s and 30s I did alot of sweat equity in single family houses. I bought, fixed and rent and I still have most of them. I read a few books and thought that was a good way to build financial independence. I'm probably too far into RE and too far into individual property, but I don't want to get out of it and there are high taxes and transaction costs to doing it at my current marginal tax rate.

Most of my pretax accounts are stock index funds. Most of my bonds are after tax EE and I bonds. (these are tax deferred by their nature)

Some of my post-tax stuff is in direct stock purchase plans. (~5%) It is automated and forced savings. Maybe not logical, mathematically correct, or the most tax efficient, but there is something I like about it.

I'm holding cash because I think valuations are high and at my age (45) a 50% loss would make it hard for me to sleep at night. I'm probably too conservative and could take on my risk, but I am what I am,...

incognito_man
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Location: Madison, WI

Re: What's your asset allocation and why?

Post by incognito_man » Wed Oct 11, 2017 7:51 pm

Age 32 (wife 31).

She is a state employee and in line for a pension.

I am 100% equities. I have different options in my 401(k)'s and Roth IRA, but it all comes out to 50% US and 50% International. All index funds.
Also have a chunk in cash right now for some significant home remodeling projects on the near horizon.

FedGuy
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Re: What's your asset allocation and why?

Post by FedGuy » Wed Oct 11, 2017 8:52 pm

I'm targeting 40/40/20 (US equities; fixed income; international equities). I'm single and in my early 40s, so that's fairly close to the "age in bonds" rule, and in the general range of the various rules of thumb usually given for international equities. Also, the numbers are round and easy to work with.

In actuality, my US equities are significantly higher than my target and my fixed income is significantly lower. That's because my fixed income exposure is entirely in the TSP's G Fund. My TSP is 100% G, and I'm contributing as much as I can every paycheck, but equities keep running up. At some point I might look into switching a portion of one of my brokerage accounts to a fixed income fund, but it's hard to settle on a substitute when I'm already so committed to the G Fund.

itstoomuch
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Location: midValley OR

Re: What's your asset allocation and why?

Post by itstoomuch » Wed Oct 11, 2017 9:54 pm

itstoomuch wrote:
Wed Oct 11, 2017 11:14 am
itstoomuch wrote:
Fri Jul 08, 2016 4:14 pm
In our Discretionary, We do a lot of stuff and strategy. Currently, fairly conservative @60% cash with speculative stocks and Indexes @ 40%. Holdings can vary weekly.
see below notes
It's changed. Bought retirement home which is temporarily a rental. Echanged cash yielding $0.00 for downplay equity.
Just to be clear: We are in retirement mode. I focus our retirement for Income and Income Security and not necessarily for assets or allocation.
Current Income$ is approximately, 55% rental, 37% SS and small pension, and 8% GLWB annuity. We have more future income assets that we have not accessed.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

rg422
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Joined: Wed Jan 18, 2017 4:35 pm

Re: What's your asset allocation and why?

Post by rg422 » Thu Oct 12, 2017 10:13 am

100% equities between our 401K, 403B, ROTH, HSA and taxable accounts, though we're about 30% international, overall. I'm 33 wife is 32. We
are at the beginning of the accumulation phase and have a lot of time to go before retirement.

dcabler
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Re: What's your asset allocation and why?

Post by dcabler » Thu Oct 12, 2017 10:36 am

pre retirement (2-3 years from now, fingers crossed)
My age: 56
Her age: 57

For informational purposes only - I'm not looking for validation. :D

50% Stock primarily in Midcap Blend/Value. A little bit of small cap value and a little bit of TSM mostly due to what's available in individual accounts. Around 5% EM or Total international (depends on what's available in particular accounts)

48% Bond primarily with about 2/3 intermediate treasury and about 1/3 intermediate TIPs. For some accounts instead of intermediate treasuries, it's total bond because that's what's available. Over time, I'm moving from TIPs funds to Ibonds, but of course that's limited by the max one can purchase per year.

2% Cash-like either with short term treasuries or stable value, depending on account.

Except for Ibonds, where possible, all low-cost index mutual funds and one ETF.

Total net E/R works out to about 0.18%

I don't include what's in the checking account since I'm not yet retired and that's for daily life at this point.

Accounts include:
My rollover IRA
Her rollover IRA
Our taxable account at Fido
Our taxable account at Vanguard
My HSA at HealthEquity
Our Ibonds at treasurydirect
My 401K at Vanguard

trueson1
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Re: What's your asset allocation and why?

Post by trueson1 » Thu Oct 12, 2017 11:23 am

62 - 3 years from retirement

60% - stocks (70% US, 30% Int); Total stock index, Int stock Index; Reit Index (1%); Utilities ETF (1%)
35% - bonds (90% US, 10% Int); Total Bond Index, Total Int Bond Index
5% - cash

Seems about right all things considered.

Hukedonfonix4me
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Re: What's your asset allocation and why?

Post by Hukedonfonix4me » Thu Oct 12, 2017 1:31 pm

early thirties couple:


--------------------Actual------------ Target------------</> bands
LARGE------------51.28--------------50---------------- 45/55
MID----------------9.37--------------10------------------8.5/12.5
SMALL------------18.09--------------20-----------------15/25
INTL--------------21.26--------------20-----------------15/25

In addition, We are accumulating a cash position in order to fund short term goals– house down payment/emergency fund…this amount Is highly variable as we just purchased car for MIL, etc. but is ~7% of our total portfolio, diluting our true allocation to: 93/7 equity vs. fixed income

also not included above is <2% in VTI within HSA. (I'm not smart enough to incorporate in with the above)

We chose 20% international since we hold for the diversification benefit and this captures the majority of that benefit (https://personal.vanguard.com/pdf/icriecr.pdf).
"While some mutual fund founders chose to make billions, he chose to make a difference." | -The Bogleheads' Guide to Investing

EvanRude
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Re: What's your asset allocation and why?

Post by EvanRude » Thu Oct 12, 2017 1:51 pm

On the way from 70/30 to 60/40 - currently at 65/35.

70/30 US/Intl for the Equity and Bond portion. Within the US Equity I use Vanguard Portfolio Watch/Stock Analysis as a guide for Large, Mid, and Small allocation. (Don't use Total Stock Market or Total International Stock Market because still have 4 individual equity positions with high capital gains and good dividends.)

chuppi
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Re: What's your asset allocation and why?

Post by chuppi » Thu Oct 12, 2017 2:02 pm

Age 41/38
Stocks/Bonds/Cash(emergency) - 65/30/5
I want to be at higher stock but I got a windfall last year and I increased my bond allocation. I will stay this way and I am okay with it for now. I will consider rebalancing to 75/25 in the future. I don't need to dip into this for the next 20 years.

Coato
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Re: What's your asset allocation and why?

Post by Coato » Thu Oct 12, 2017 3:07 pm

Really interesting to read all these ideas.

Us: 44 and 42

25% Vanguard S&P
25% Vanguard Small Cap Value
15% DFA International Small Company
10% Schwab Fundamental Emerging Markets
15% 2.7% CD with a 6 month EWP
10% Short Term Treasuries

Reasoning:
Based on Bernstein "No Brainer". US is large and small with a very small factor loading to size and value. International has one size loading and one value loading. (These are what is available in 403b and 457b funds too). STT are there for rebalancing. If there is a meltdown I can liquidate the CD and pay 6 months penalty.

JW-Retired
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Joined: Sun Dec 16, 2007 12:25 pm

Re: What's your asset allocation and why?

Post by JW-Retired » Fri Oct 13, 2017 9:03 am

60/40 because that's always been our target. We had been drifting up from that for a long time but just yesterday I really shocked myself! Actually sold SP-500 equities in the 401k to re-balance back close to 60/40. :shock:

I don't really know what came over me?
JW
PS: age 73
Retired at Last

The Casualty
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Joined: Sun Oct 24, 2010 9:09 pm

Re: What's your asset allocation and why?

Post by The Casualty » Fri Oct 13, 2017 10:19 am

61 and 66 y/o retired.

50/50 current A/A. (50% equity / 40% Bonds / 10% Cash)

I intend to rebalance down to 30-40 % equity over the next 3 years.

No need to take risk since we have more than enough to last to 100 + age.

blarg
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Re: What's your asset allocation and why?

Post by blarg » Fri Oct 13, 2017 10:56 am

I'm 36 and at 60/40 equities/bonds. 40% US Stocks, 20% International.

That's as much risk as I'm willing to take after panicking during 2008 (was 100% equities then) and selling everything. If I can get through the next bear market - whenever that is - without too much trouble I'll consider ratcheting up to 65% or 70% equities, but may just stay with this AA for life, too.

boglefannyc
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Re: What's your asset allocation and why?

Post by boglefannyc » Fri Oct 13, 2017 2:23 pm

Ages: 57 Retired Feb 2017/48 still working

Our current allocation: 60/20/20 (stocks/bonds/stable value)

I could not decide between bonds and stable value so I split it evenly for now. A 60/40 allocation would not devastate us in the event of a crash so early in my retirement. If the market does not drop, I will let the stock portion drift up with any new contributions. All holdings are in low E/R index funds except for the stable value.

Edit: Stocks are 16% foreign and I plan to increase to 20%
Last edited by boglefannyc on Fri Oct 13, 2017 2:30 pm, edited 1 time in total.

Accrual
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Location: Durham, NC.

Re: What's your asset allocation and why?

Post by Accrual » Fri Oct 13, 2017 2:28 pm

70/30 - 26 years old. Why? My AA has not been tested as I have only been investing for a few years. I did not want to go too risky or too conservative. May reassess at a later date. As a CPA and naturally risk averse, I like the idea of 60/40. Yes, my investment horizon is long, but I am not thoroughly convinced on expected equity returns.

theplayer11
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Re: What's your asset allocation and why?

Post by theplayer11 » Fri Oct 13, 2017 2:56 pm

52/50 yrs old
65/35
never held bonds until this year, bogleheads taught me well.

Hoglebed
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Re: What's your asset allocation and why?

Post by Hoglebed » Fri Oct 13, 2017 3:24 pm

Total Assets

29% Total US bond - SSFEX (in 401k)
10% US SCV - VSIAX (in Roth IRA)
19% Total US - VTSAX (taxable)
19% Total Int - VTIAX (taxable)
16% 2-Yr CD (house down payment)
7% Cash (emergency fund)

About 50/50 stock/bonds+cash right now, 57/43 not including the home down payment. Current AA is pretty conservative relative to my age (late 20's), but it's for a couple reasons. I've never been through a down market, so I don't know my true risk tolerance. I was fine during the turbulence over the last couple year's, but I haven't seen a true bear market. I'd like to think I will stay the course, but I'd rather be more conservative now and then assess my risk tolerance after my first down market. The second reason, relating to the first, is current market valuations. I'm not trying to time the market or pretend like I know when the next bear will be, but if history is any indication, it will most likely be sooner rather than later.

Case59
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Re: What's your asset allocation and why?

Post by Case59 » Fri Oct 13, 2017 3:45 pm

Approximately 70/30 stocks (including approximately 10% REITs) to bonds, while keeping roughly one year's expenses in cash/cash equivalents. Withdrawal rate approximately 3 to 3.5%. I'm 65, retired five years,with a family history of long lives (my parents, still living, are 96 and 94, and my grandparents were similarly long-lived). Investments are our only source of income other than SS. I follow the 70/30 principally because historical calculators like Firecalc and Early Retirement show that, with a withdrawal rate of <4%, it is something of a sweet spot for long-horizon investing. We're fortunate in that our assets are somewhat in excess of our needs, so we can handle downturns as they arise (which I've weathered in the past without panic selling) or if the future doesn't at least somewhat mirror the past.
"Most quotations on the internet are incorrect."-Mark Twain

Case59
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Joined: Fri Dec 30, 2011 12:31 pm

Re: What's your asset allocation and why?

Post by Case59 » Fri Oct 13, 2017 3:45 pm

{Apologies--accidental double post. :oops: }
"Most quotations on the internet are incorrect."-Mark Twain

snarlyjack
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Location: Montana

Re: What's your asset allocation and why?

Post by snarlyjack » Fri Oct 13, 2017 3:55 pm

As of today (I just tweaked my portfolio) I' am
100% in the stock market.

But, I' am 23 years old (77 years to go).
Long term buy & hold. Very efficient,
low ER. I don't need the money in the short term...
Buy & hold through anything & dca each payday.
Actually, I would like to see the market come down
from these levels...

DanMahowny
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Joined: Sun Aug 06, 2017 8:25 pm

Re: What's your asset allocation and why?

Post by DanMahowny » Fri Oct 13, 2017 4:26 pm

70%
35% short-term treasuries
21% TIPs
14% Gold

30%
18% US equities
7.2% int'l developed
4.8% emerging markets

Retired.

staythecourse
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Joined: Mon Jan 03, 2011 9:40 am

Re: What's your asset allocation and why?

Post by staythecourse » Fri Oct 13, 2017 5:29 pm

snarlyjack wrote:
Fri Oct 13, 2017 3:55 pm
I don't need the money in the short term...
There is a saying which I am sure you are familiar with which goes (paraphrasing), "The worst is not knowing, but not knowing what you don't know". At 23 there is NO WAY to know when you may need money in the "short term". I'm 41 married with 2 kids and both of us are doctors and can still say the only thing I am positive is there will be a surprise that throws a curve ball into my perfect plan. Hasn't happened yet, but am sure it will eventually. I just hope it is not my wife saying we are expecting a third! :D

Point is never assume you have figured everything out as the only guarantee is that life never works in a straight line. The point of being a responsible investor is not having to change plans, but having a plan in place AHEAD of the time when the unexpected occurs. Funny thing about risk is it ALWAYS shows up when folks least expect it.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Fruition15
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Re: What's your asset allocation and why?

Post by Fruition15 » Fri Oct 13, 2017 5:45 pm

Age = 40

Stocks = 60%
Bonds = 30%
Gold = 10%

Because of valuations, US equities = 26%, international equities = 34%.

LCB (IVV) = 10%
SCV (VBR) = 10%
REITs (VNQ) = 6%
DM (IEFA) = 14%
Global value (GVAL) = 10%
EM (VWO) = 10%
TIPS (VIPIX) = 15%
5 year treasures (IEI) = 15%
Gold (IAU) = 10%

SimplicityNow
Posts: 210
Joined: Fri Aug 05, 2016 10:31 am

Re: What's your asset allocation and why?

Post by SimplicityNow » Fri Oct 13, 2017 6:36 pm

staythecourse wrote:
Fri Oct 13, 2017 5:29 pm
snarlyjack wrote:
Fri Oct 13, 2017 3:55 pm
I don't need the money in the short term...
There is a saying which I am sure you are familiar with which goes (paraphrasing), "The worst is not knowing, but not knowing what you don't know". At 23 there is NO WAY to know when you may need money in the "short term". I'm 41 married with 2 kids and both of us are doctors and can still say the only thing I am positive is there will be a surprise that throws a curve ball into my perfect plan. Hasn't happened yet, but am sure it will eventually. I just hope it is not my wife saying we are expecting a third! :D

Point is never assume you have figured everything out as the only guarantee is that life never works in a straight line. The point of being a responsible investor is not having to change plans, but having a plan in place AHEAD of the time when the unexpected occurs. Funny thing about risk is it ALWAYS shows up when folks least expect it.

Good luck.
+1

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stemikger
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Re: What's your asset allocation and why?

Post by stemikger » Fri Oct 13, 2017 6:54 pm

Age 53 - 60/40 stocks/bonds all U.S.

401K
60/40 two fund portfolio
Vanguard Institutional Index Fund =60%
Blackrock U.S. Debt Index Fund = 40%

Thanks to Jack Bogle, I find 60/40 is my goldilocks portfolio and helps me sleep like a baby.

TIRA
One Fund
Vanguard Balanced Index Fund
Upon retirement which will be around 10 years from now, I move my entire 401K into the Balanced Index Fund.
I will probably keep it there for life.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

TheHouse7
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Re: What's your asset allocation and why?

Post by TheHouse7 » Fri Oct 13, 2017 10:48 pm

80/20, 60% TSM 20% TISM 20% TBM

Age 30, because of this site... general not invested through a bear market, most recommend between 0-50% stocks be international(so why not 25%).

I don't know nothing.
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

Tal-
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Joined: Fri Apr 22, 2016 10:41 pm

Re: What's your asset allocation and why?

Post by Tal- » Fri Oct 13, 2017 11:54 pm

Age: Late 30's.
Retiring in 13 years.
We have roughly 1/2 of our investments in real estate (rentals). The rest:

US: 50% (2/3 of that large cap)
International: 26%
Bonds: 24%

My natural inclination would be to go heavier into stocks, but our risk due to real estate makes some bond exposure a good idea. With that said, if stocks decrease by ~30% within the next few years, I'll shift this allocation to be more aggressive.
Debt is to personal finance as a knife is to cooking.

WanderingDoc
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Re: What's your asset allocation and why?

Post by WanderingDoc » Sat Oct 14, 2017 2:06 am

Great thread. I would be grateful for recommended source(s) for a newer mutual fund investor to be able to better pin down "need, ability, willingness" to take risk.
One day it suddenly dawned on me that I had won the real estate lottery.

Johm221122
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Re: What's your asset allocation and why?

Post by Johm221122 » Sat Oct 14, 2017 2:11 am

Age 48
60% stocks/40 % fixed income
30% S&P 500
15% extended market index
8 % total international index
7% international explorer
25% stable value
15 % savings bonds

Why 60/40 asset allocation?my plan is over half way to goal 60/40 under half way 70/30(so if market drops my portfolio to under half way I'll go back to 70/30)

WanderingDoc
Posts: 229
Joined: Sat Aug 05, 2017 8:21 pm

Re: What's your asset allocation and why?

Post by WanderingDoc » Sat Oct 14, 2017 2:15 am

grabiner wrote:
Fri Jul 08, 2016 9:58 pm
Age 48

96% net equities (decreasing by 2% per year, started from 100% two years ago)

43% US stock (1/8 LG, 3/8 LV, 1/8 SG, 1/8 SV)
43% foreign stock (3/8 developed large, 1/4 developed small, 1/4 emerging large, 1/8 emerging small; would be equal if expenses were equal)
10% REITs (1/2 US, 1/2 foreign)
4% net bonds (16% bonds, -12% mortgage)

I count the mortgage as a negative bond. If I decide to pay off the mortgage, I will pay it off with bonds (selling taxable stock, and moving from bonds to stock in the retirement account). If you don't count the mortgage as a negative bond, I have 85% stock.

Yes, I have one of the most aggressive portfolios on the Bogleheads, but I have a very high risk tolerance. I have had close to this portfolio since 2004, although I was only 100% net stock just after buying a home in 2013 (which increased my risk tolerance even further, since it will decrease my housing costs in retirement).
Interesting bit on the mortgage.

I rent where I live (no mortgage). I do have 4 investment properties with mortgages. Since the tenants pay all of the mortgages, expenses, reserves, and then some, I treat this as simply business loans.

I would assume you count that 'negative bond' since having a mortgage in a place you live is a liability (as opposed to an asset). Interested to hear your thoughts.
One day it suddenly dawned on me that I had won the real estate lottery.

WanderingDoc
Posts: 229
Joined: Sat Aug 05, 2017 8:21 pm

Re: What's your asset allocation and why?

Post by WanderingDoc » Sat Oct 14, 2017 2:43 am

Age 32.

79.29% Real estate equity
1.63% TSP
5.91% VTSAX
1.83% traditional and Roth IRA, both VFFVX
11.34% cash

Took a while to crunch the numbers. I have always held $50-200K cash in a savings account (earning 0.1% APR) to be able to invest in real estate deals as they come along. I have only recently found out about Ally and other >1.0% savings account, still haven't moved funds (lazy I guess).

I am guessing my stock:bond split is roughly 92-95% stocks across the mutual fund portfolio. I need a little help figuring out if this is just a stab in the dark or actually represents my risk tolerance.
One day it suddenly dawned on me that I had won the real estate lottery.

munemaker
Posts: 2003
Joined: Sat Jan 18, 2014 6:14 pm

Re: What's your asset allocation and why?

Post by munemaker » Sat Oct 14, 2017 3:58 am

I went to 50-50 earlier this year when I retired. That seems right for me.

gquogue
Posts: 5
Joined: Thu Aug 24, 2017 8:05 pm

Re: What's your asset allocation and why?

Post by gquogue » Sat Oct 14, 2017 7:06 am

Just overhauled everything within the last month and BH was a big help.

Age 37/38

88% Equity/8% Bond/4% Gold

Most all equity is indexed etf's

10% US TSM
10% US LCV
10% US SC
10% US SCV
4% US REIT
24% Intl SC (80/20 Developed&Emerging)
8% Intl LCV Developed
8% Intl LCV Emerging
4% Intl REIT
8% US TBM
4% Gold

User avatar
Garco
Posts: 637
Joined: Wed Jan 23, 2013 2:04 am

Re: What's your asset allocation and why?

Post by Garco » Sat Oct 14, 2017 10:54 am

I'm retired, drawing Social Security and Required Minimum Distributions (RMD's). In my main tax-deferred retirement account, I currently have 45% equities, 10% in real estate, and the rest in bonds and multi-asset funds (VBTIX, PAAIX, PTTRX) and cash. I am limiting my exposure to market risk but still taking real risk, with a lean toward growth funds in this account.

In my other tax deferred and brokerage accounts, I have more aggressive allocations, ranging from about 65% equities in my brokerage account to about 85% equities in my tax deferred accounts. The AA for the last group of accounts is mainly geared to the ages of my adult children.

MnD
Posts: 3055
Joined: Mon Jan 14, 2008 12:41 pm

Re: What's your asset allocation and why?

Post by MnD » Sat Oct 14, 2017 11:05 am

IPS: AA 70/30, global market cap on US/ex-US equity, small cap tilt for US, rebalance when FI goes outside 27.5%-32.5% range.
Current:
37.1% US Stock (small cap tilt)
33.6% Ex-US Stock (no tilt)
29.3% Fixed Income (75% stable value, 25% active global bond)
12 funds, 2 stocks, Weighted ER: 0.12%

Why?
Both age 55, 2 to 14 months from retirement depending on separation incentives or not, investing for 32 years.
Except for the first couple years when we were 50:50, have had close to this AA for 3 decades.
Fine with the risk/reward of 70/30 for life and we will have plenty of safe non-portfolio related income in retirement and low mandatory expenses. No debt, no mortgage, adult kids are on their own, both sets of parents have passed, low tax state.
Plan a % of annual portfolio balance SWR approach versus inflation-adjusted. We can handle the variability.
Last edited by MnD on Sat Oct 14, 2017 11:15 am, edited 2 times in total.

SQRT
Posts: 547
Joined: Sat Feb 05, 2011 9:44 am

Re: What's your asset allocation and why?

Post by SQRT » Sat Oct 14, 2017 11:07 am

WanderingDoc wrote:
Sat Oct 14, 2017 2:15 am
grabiner wrote:
Fri Jul 08, 2016 9:58 pm
Age 48

96% net equities (decreasing by 2% per year, started from 100% two years ago)

43% US stock (1/8 LG, 3/8 LV, 1/8 SG, 1/8 SV)
43% foreign stock (3/8 developed large, 1/4 developed small, 1/4 emerging large, 1/8 emerging small; would be equal if expenses were equal)
10% REITs (1/2 US, 1/2 foreign)
4% net bonds (16% bonds, -12% mortgage)

I count the mortgage as a negative bond. If I decide to pay off the mortgage, I will pay it off with bonds (selling taxable stock, and moving from bonds to stock in the retirement account). If you don't count the mortgage as a negative bond, I have 85% stock.

Yes, I have one of the most aggressive portfolios on the Bogleheads, but I have a very high risk tolerance. I have had close to this portfolio since 2004, although I was only 100% net stock just after buying a home in 2013 (which increased my risk tolerance even further, since it will decrease my housing costs in retirement).
Interesting bit on the mortgage.

I rent where I live (no mortgage). I do have 4 investment properties with mortgages. Since the tenants pay all of the mortgages, expenses, reserves, and then some, I treat this as simply business loans.

I would assume you count that 'negative bond' since having a mortgage in a place you live is a liability (as opposed to an asset). Interested to hear your thoughts.
Agree it makes sense to treat the mortgage as a “negative bond”. Should also treat the NPV of any pension as a bond substitute. By doing this your AA percentages will be more comparable to others. Most people do not do this though.

In my case, 67 retired 11 years with a very large pension. Portfolio is 100% equities but if I include my pension it’s about 60% equities 40% fixed income. This brings up the old question of whether you take more risk because you can afford to, or less risk because you don’t need to. The answer will depend on your personality, risk appetite, and any legacy objectives.

David Scubadiver
Posts: 393
Joined: Thu Mar 24, 2016 8:40 am

Re: What's your asset allocation and why?

Post by David Scubadiver » Sat Oct 14, 2017 6:33 pm

I like to keep things simple, so I am allocated as follows:

Cash 2.52%
Guaranteed Return 5.65% (TRS fund)
Intl Bonds 1.19%
U.S. Bonds 11.51%
Intl Stocks 31.72%
U.S. Stocks 42.42%
Alternatives 4.98%

Believe me when I tell you, that you do not want to look behind this curtain.

JW-Retired
Posts: 6365
Joined: Sun Dec 16, 2007 12:25 pm

Re: What's your asset allocation and why?

Post by JW-Retired » Sat Oct 14, 2017 7:46 pm

Before Bogleheads banned polls there were "what's your AA polls". Old ones showing AA versus age are still available.

See here for example: http://www.bogleheads.org/forum/viewtop ... 2#p1224012

I doubt if new polls would be much different.
JW
Retired at Last

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