Core-4 Investing is LIVE! It really is this time!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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Rick Ferri
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Re: Core-4 Investing is LIVE! It really is this time!

Post by Rick Ferri » Thu Nov 08, 2018 2:14 pm

psteinx wrote:
Thu Nov 08, 2018 2:09 pm
I think Ferri has the wrong approach, or at least a muddled one. Simplicity can be good, especially for addressing some of the behavioral aspects of investing. But to take a basic idea of simplicity, then muddle it like this defeats the purpose.

Don't read so much into it and you'll see what Core-4 Investing actually is - simple portfolio choices for people who like choices and like to keep things simple.

Also, I applied for the Core-4 trademark because I've been using it for 10 years and wanted to make sure I was able to continue using it. I did not want someone else taking it and then saying I could not use it anymore.

Last, the Core-4 Adviser Alliance firms are a list of companies that I have vetted. As an adviser, I have an obligation to conduct due diligence on firms I refer people to even though I receive no compensation for referrals. The small amount of advertising dollars these firms will pay beginning in 2019 will help defray the cost of maintaining the site and providing you with free information.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by psteinx » Thu Nov 08, 2018 2:38 pm

Rick, a hypothetical...

A client (or, if you're not professionally advising, a friend, relative, or poster on an internet forum you like :) ) approaches you with these parameters:

Age 45. Married, kids almost out of the nest, and education provided for separately from the following.
Dual incomes $125K total, relatively secure
Home value $300K, remaining mortgage $100K
$400K to invest now ($300K tax-deferred, $100K taxable), plus $50K emergency fund
Want a simple, durable investment strategy (i.e. something they won't need to fuss with much over time)
Risk tolerance about typical for the above characteristics

What do you recommend?

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Re: Core-4 Investing is LIVE! It really is this time!

Post by Rick Ferri » Thu Nov 08, 2018 2:49 pm

I don't do what you're asking me to do - make a hypothetical public investment recommendation based on a few fictitious facts with ambiguous terms like the hypothetical client has "risk tolerance about typical".

My conversations with people about their actual lives and financial situation go much deeper. Anyone who has ever personally spoken with me knows this.

Rick Ferri
Last edited by Rick Ferri on Thu Nov 08, 2018 2:57 pm, edited 1 time in total.
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Re: Core-4 Investing is LIVE! It really is this time!

Post by psteinx » Thu Nov 08, 2018 2:54 pm

Well, what I'm trying to get at is what portfolio you would recommend for basically an "average" investor. Average in this sense being, presumably, well above average in comparison with the US median, but a lot of the lower part of the bell curve (wealth and income-wise) is saving little if anything and not really engaging with even lightly sophisticated investing websites and resources.

I realize, of course, that every investor is different. But if the goal of Core-4 (TM) is that an "average" investor, with a little bit of financial knowledge but not too much, can and perhaps should choose their own portfolio, then I'm trying to understand which portfolio you and/or your site is trying to steer them towards.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by Rick Ferri » Thu Nov 08, 2018 2:58 pm

I don't "recommend" any particular portfolio for anyone until I've spoken with them. Many investors can figure this out by themselves. Some cannot. For those people, I'm trying to create a place where you can find a trusted adviser. Not much more to it than that.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by vineviz » Thu Nov 08, 2018 3:01 pm

psteinx wrote:
Thu Nov 08, 2018 2:54 pm
I realize, of course, that every investor is different. But if the goal of Core-4 (TM) is that an "average" investor, with a little bit of financial knowledge but not too much, can and perhaps should choose their own portfolio, then I'm trying to understand which portfolio you and/or your site is trying to steer them towards.
Rick would never say this, but IMO his model portfolios are so well presented that an investor who can’t figure out which ones are suitable should probably hire an adviser before choosing one in any case.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Core-4 Investing is LIVE! It really is this time!

Post by psteinx » Thu Nov 08, 2018 3:02 pm

Rick Ferri wrote:
Thu Nov 08, 2018 2:58 pm
I don't "recommend" any particular portfolio for anyone until I've spoken with them. Many investors can figure this out by themselves. Some cannot. For those people, I'm trying to create a place where you can find a trusted adviser. Not much more to it than that.

Rick Ferri
So the new site is not really for self-driven investors, but rather, for investors to find a human adviser they can talk to?

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Re: Core-4 Investing is LIVE! It really is this time!

Post by vineviz » Thu Nov 08, 2018 3:05 pm

psteinx wrote:
Thu Nov 08, 2018 3:02 pm
Rick Ferri wrote:
Thu Nov 08, 2018 2:58 pm
I don't "recommend" any particular portfolio for anyone until I've spoken with them. Many investors can figure this out by themselves. Some cannot. For those people, I'm trying to create a place where you can find a trusted adviser. Not much more to it than that.

Rick Ferri
So the new site is not really for self-driven investors, but rather, for investors to find a human adviser they can talk to?
I’m pretty sure it’s for both groups.

Self-driven investors can find lots of model portfolios.

Investors uncomfortable being self-driven can find an advisor.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Core-4 Investing is LIVE! It really is this time!

Post by Silk McCue » Thu Nov 08, 2018 3:06 pm

psteinx wrote:
Thu Nov 08, 2018 3:02 pm
Rick Ferri wrote:
Thu Nov 08, 2018 2:58 pm
I don't "recommend" any particular portfolio for anyone until I've spoken with them. Many investors can figure this out by themselves. Some cannot. For those people, I'm trying to create a place where you can find a trusted adviser. Not much more to it than that.

Rick Ferri
So the new site is not really for self-driven investors, but rather, for investors to find a human adviser they can talk to?
At this point you appear to be trolling Rick and it isn't pretty.

Cheer

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Re: Core-4 Investing is LIVE! It really is this time!

Post by Rick Ferri » Thu Nov 08, 2018 3:07 pm

psteinx wrote:
Thu Nov 08, 2018 3:02 pm
Rick Ferri wrote:
Thu Nov 08, 2018 2:58 pm
I don't "recommend" any particular portfolio for anyone until I've spoken with them. Many investors can figure this out by themselves. Some cannot. For those people, I'm trying to create a place where you can find a trusted adviser. Not much more to it than that.

Rick Ferri
So the new site is not really for self-driven investors, but rather, for investors to find a human adviser they can talk to?
No. It's for do-it-yourself investors. If someone needs help or wants help, there are recommendations to advisers and asset managers whom I know and have vetted.

You seem determined to find some evil-minded motive here. There is none.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by columbia » Thu Nov 08, 2018 3:11 pm

One thing I do know is that Mr. Ferri could be doing many things with his life, but he takes the time to provide solid wisdom and experience for us DIYers.

It’s greatly appreciated. :beer

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Re: Core-4 Investing is LIVE! It really is this time!

Post by psteinx » Thu Nov 08, 2018 3:14 pm

Rick Ferri wrote:
Thu Nov 08, 2018 3:07 pm
No. It's for do-it-yourself investors. If someone needs help or wants help, there are recommendations to advisers and asset managers who I know and have vetted.
OK, so again, for a SELF-DRIVEN investor, relatively typical for the type who might stumble across your site (as my constructed example tried to be - if you think more details are needed, feel free to fill them in yourself, with relatively typical values), what portfolio do you personally think is most likely correct and/or hope that they stumble into?
Rick Ferri wrote:
Thu Nov 08, 2018 3:07 pm
You seem determined to find some evil-minded motive here. There is none.

Rick Ferri
I know this forum tends to draw a sharp distinction between criticism of for-profit(ish) investment advice from those generally off-site (i.e. standard Ed Jones type advisors, or Dave Ramsey's investment advice, or whatever) and those professionals who post on-site (cutting, IMO, a LOT of slack to such advisors, especially to a different professional adviser who Ferri himself has done battle with in the past). IMO, the advice of both amateurs and pros (and among the latter, both those who do and don't post on BH) should be subject to discussion, and, yes, criticism.

If you think any specific questions, comments, or criticisms by me are out of bounds, feel free to let me know, publicly or by private PM.

EDIT - clarified my first category of for-profit(ish) off-site advice.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by MJW » Thu Nov 08, 2018 3:30 pm

psteinx wrote:
Thu Nov 08, 2018 3:14 pm

OK, so again, for a SELF-DRIVEN investor, relatively typical for the type who might stumble across your site (as my constructed example tried to be - if you think more details are needed, feel free to fill them in yourself, with relatively typical values), what portfolio do you personally think is most likely correct and/or hope that they stumble into?
I’m not sure what you are trying to achieve here. A self-driven investor is also a self-educated one. Is your point that Rick’s model portfolios do not make it any easier for a self-driven investor to choose the “best” portfolio for his/her situation? How would a person decide this in any other scenario?

Also, Rick giving you generic, arbitrary advice based on the parameters you gave him would help no one – not you, not him nor anyone following along. Why would he want to do that? A self-driven investor needs to either a) know his/her self well enough to make an educated choice, or b) place trust in someone else’s judgment in the form of an all-in-one type of fund. It’s going to be imperfect either way.

If you want to work with an adviser my assumption is that they are going to want to get to know you and will have several questions. Rick does not provide that service on the BH forum.The moment he does something like that there will be a hundred other people wanting the same kind of feedback. He gives general advice on the forum, which is the appropriate approach for someone in his position. The fact that he does it at all is pretty generous considering how many people seem to go out their way to try to play “gotcha” games with him.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by MJW » Thu Nov 08, 2018 3:45 pm

vineviz wrote:
Thu Nov 08, 2018 3:01 pm
Rick would never say this, but IMO his model portfolios are so well presented that an investor who can’t figure out which ones are suitable should probably hire an adviser before choosing one in any case.
Agree. This thread is starting to get out of hand.

The options Rick provides are still relatively simple and can be made even simpler if one's mind is blown by the thought of using four funds. For crying out loud, the assets in his “Global Markets” portfolio can be found in Vanguard’s LifeStrategy and target retirement finds. You can subscribe to that particular philosophy by using ONE fund if you don’t want to deal with the trouble of four. You could limit it to two funds by tacking on a REIT or SCV fund if you deem it important. You could eschew the Total US/Total Intl combo in his classic core-4 and use Total World instead, giving you three funds instead of four. People get too hung up on the examples and forget about the philosophy driving it.
Last edited by MJW on Fri Nov 09, 2018 11:37 am, edited 1 time in total.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by azanon » Thu Nov 08, 2018 4:07 pm

Thanks for your contributions here Rick, and congratulations on your new Core-4 Investing site.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by LadyGeek » Thu Nov 08, 2018 4:26 pm

psteinx wrote:
Thu Nov 08, 2018 3:14 pm
If you think any specific questions, comments, or criticisms by me are out of bounds, feel free to let me know, publicly or by private PM.
We certainly want to encourage opposing points of view, but let's try and keep focused on the investing aspects. Concerns about Rick's website are getting a bit personal, which can only get contentious from this point forward.

The points have been made on both sides regarding Rick's website. Let's move on.

If anyone has any further concerns, please PM me directly. Continuing the discussion here is not recommended.
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Re: Core-4 Investing is LIVE! It really is this time!

Post by Random Musings » Thu Nov 08, 2018 10:31 pm

Rick,

Congrats on this new endeavor and, as always, all the help you provide to members on this board. However, with these new portfolio choices, it may be helpful if you would provide Madsinger at least a couple of new high end processors so that he can continue to generate his monthly Madsinger report. I am fearful that his current configuration will not suffice.

RM
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Re: Core-4 Investing is LIVE! It really is this time!

Post by LadyGeek » Thu Nov 08, 2018 11:11 pm

^^^ See the wiki: Madsinger monthly reports
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Re: Core-4 Investing is LIVE!

Post by kadibex1 » Thu Nov 08, 2018 11:26 pm

Explorer wrote:
Wed Oct 31, 2018 7:31 pm
Me too.. just a coming soon page.. :D

For what it is worth, I use 6 funds:
- Total US Stock
- Total Intl Stock
- US Agg Bond
- Intl Agg Bond (BNDX)
- LT Treasuries
- Short Term TIPS
What % do you have allocated to each one and what funds do you use?

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Re: Core-4 Investing is LIVE! It really is this time!

Post by CyclingDuo » Fri Nov 09, 2018 9:07 am

psteinx wrote:
Thu Nov 08, 2018 2:38 pm
Rick, a hypothetical...

A client (or, if you're not professionally advising, a friend, relative, or poster on an internet forum you like :) ) approaches you with these parameters:

Age 45. Married, kids almost out of the nest, and education provided for separately from the following.
Dual incomes $125K total, relatively secure
Home value $300K, remaining mortgage $100K
$400K to invest now ($300K tax-deferred, $100K taxable), plus $50K emergency fund
Want a simple, durable investment strategy (i.e. something they won't need to fuss with much over time)
Risk tolerance about typical for the above characteristics

What do you recommend?
We would all like to think that since you have been a BH member since 2007 and posted 2900+ times you would have been able to play along and pony up your own DIY recommendation for the couple in your hypothetical whiz quiz game.

Rick cannot, for obvious reasons, go out on a limb with a public recommendation for a non-client. Everyone that is a member of the BH DIY club can go out on a limb, though, because none of us have anything professionally to gain or lose in terms of accountability or legal matters with any recommendation here on the web.

Armchair investing gurus unite! :beer

It appears to me your scenario is a rather simple one to recommend as the couple is in good standing from an income to debt ratio, and the amount of savings they have amassed thus far along with their human capital/dual income household places them in an excellent position to build their nest egg in the coming years.

Classic Four with the investor choosing at age 45 to begin with 70/30 and over the next 15 years slowly migrate toward -----> 60/40 while they continue to sock away 20% of their gross income* on automatic pilot through thick and thin for the next 20-22 years from their dual income careers.

*Sock away even more than 20% once the nest is totally empty and all of the college education expenses are finished.

Bonus recommendation - or extra free sauce advice - for the couple: enjoy life, family, friends, vacations, exercise, entertainment, food & wine along the way as they - like all of us - get this journey only once.

There you go. The couple can now profit from this armchair advice that was free and easy to dispense - especially since their savings rate will take care of any mistakes made in this non-professional, DIY web based recommendation. :wink:

We've enjoyed Rick's commentary here on the forums as well as appearances at the BH conferences (which we have seen via the video archives). The new website looks clean and easy to navigate, with excellent suggestions. Well done, Rick!
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Re: Core-4 Investing is LIVE! It really is this time!

Post by donaldfair71 » Fri Nov 09, 2018 9:29 am

Rick Ferri wrote:
Thu Nov 01, 2018 5:16 am
vss wrote:
Wed Oct 31, 2018 11:04 pm
After carefully reading all of the 6 portfolios. I came up with this for my Traditional IRA (old 401K rollover):

ITOT (48%)
VXUS (24%)
PSCH (20%)
FAHDX (8%)

I really don't want to deviate from Rick's excellent choices but wanted to try eliminating REIT and added FAHDX for the bond.

Any thoughts?

Please advise.
If it works for you, it works for me. The best portfolio for you is the one you'll stick with through thick and thin.

Rick Ferri
I think, of all the points that the several hundred-thousand topics of this board, of the tilts, of the asset allocations, of the foreign/domestic ratios, this point is the least-discussed and the most important.

If you deviate, even once, from a plan, and engage in performance-chasing, it probably dooms you worse than the wrong or right anything else. We have all seen, I am sure, the vast canyons between fund returns and investor returns. None of these plans are right for all, and if you do not want to use one, do not. But the spirit is there to help the average investor, the motivation is in the right place from Rick.

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Re: Core-4 Investing is LIVE! It really is this time!

Post by Rick Ferri » Fri Nov 09, 2018 10:54 am

Let's step back for a minute and look at the three elements of successful Boglehead investing:

1. Philosophy
2. Strategy
3. Discipline

Philosophy: We all have the same beliefs - fees matter, don't try to time market, etc. The list is on the Bogleheads Wiki

Strategy: This is personal. Unique to you. It's the mix of investments tailored to your needs and tolerance for risk. This strategy has to keep you invested during good times and bad. What works for you isn't the same portfolio that works for someone else.

Discipline: The rules you create and the processes you take to maintain Boglehead philosophy and your strategy no matter what. Stay the course!

Core-4 is strategy and it's personal. It's about creating a viable portfolio that you'll maintain through everything. It doesn't have to be 4 funds. It can be 1, 2, 3, 5, 10 or any number of funds as long as you maintain that portfolio for the long-term and don't keep changing it.

In conclusion, intense discussions about the perfect portfolio or the right Core-4 etc are useless unless the discussion comes to the epiphany that no know can say what's optimal - except you - and your optimal is different than everyone else.

I created a separate conversation on this topic HERE

Rick Ferri
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Re: Core-4 Investing is LIVE! It really is this time!

Post by fortyofforty » Fri Nov 09, 2018 4:46 pm

Rick,

Thanks for the website and for continuing your educational efforts here. Your books were enlightening, as well, and it's awesome we're able to join you on what might be your personal journey of financial discovery. (I'd guess that where you were philosophically, say, ten or fifteen years ago is not precisely where you are today.)
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

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