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.

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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.

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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.

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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.

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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

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

Post by Rick Ferri » Wed Nov 14, 2018 9:09 pm

A couple of new upgrades to Core-4.com this week:

Core-4 Investing is now now linked to Portfolio Visualizer. The Backtest Portfolio tool allows you to observe prior Core-4 results on one or more portfolios based on the selected mutual funds, ETFs and stocks to analyze and backtest portfolio returns, risk characteristics, standard deviation, annual returns and rolling returns. The results include a visualization of the portfolio growth chart and rolling returns, CAGR, standard deviation, Sharpe ratio, Sortino ratio, annual returns and inflation adjusted returns. A periodic contribution or withdrawal can also be specified together with the preferred portfolio rebalancing strategy. Simply enter the funds you choose using the asset allocation you decide.

The Core-4 Bookstore has now been stocked. You'll find the usually suspects; the classic Boglehead authors and financial journalists along with a few surprises. The reading range is beginner to intermediate investor level. Please let me know if I'm missing anything.

Rick Ferri
Last edited by Rick Ferri on Thu Nov 15, 2018 7:14 am, edited 1 time in total.
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Re: Core-4 Investing is LIVE! It really is this time!

Post by fortyofforty » Thu Nov 15, 2018 7:05 am

Rick Ferri wrote:
Wed Nov 14, 2018 9:09 pm
A couple of new upgrades to Core-4.com this week:

Core-4 Investing is now now linked to Portfolio Visualizer. The Backtest Portfolio tool allows you to observe prior Core-4 results on one or more portfolios based on the selected mutual funds, ETFs and stocks to analyze and backtest portfolio returns, risk characteristics, standard deviation, annual returns and rolling returns. The results include a visualization of the portfolio growth chart and rolling returns, CAGR, standard deviation, Sharpe ratio, Sortino ratio, annual returns and inflation adjusted returns. A periodic contribution or withdrawal can also be specified together with the preferred portfolio rebalancing strategy. Simply enter the funds you choose using the asset allocation you decide.

The Core-4 Bookstore has now been stocked. You'll find the usually suspects; the classic Boglehead authors and a financial journalists along with a few surprises. The reading range is beginner to intermediate investor level. Please let me know if I'm missing anything.

Rick Ferri
Thanks, Rick. Very informative.
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Build America Bonds in ESG Core-4?

Post by nisiprius » Thu Nov 15, 2018 8:20 am

Image

The ESG Core-4 portfolio calls for a 20% allocation to "Build America Bonds & US Government Securities."

Being listed first suggests that Build America Bonds are the preferred asset for implementing this portion of the portfolio.

Build America Bonds are no longer being issued; Wikipedia says "they were signed into law on February 17, 2009; the program expired December 31, 2010." The PortfolioVisualizer link uses this suggested implementation:

DSI iShares MSCI KLD 400 Social ETF 42.00%
TSORX TIAA-CREF Social Choice Intl Eq Retail 18.00%
VGIT Vanguard Intmdt-Term Trs ETF 20.00%
VFIIX Vanguard GNMA Inv 20.00%

Since BABs are private (not Treasuries) and not GNMAs, I assume that neither VGIT or VFIIX includes BABs and thus the portfolio contains no BABs at all.

An article from 2013 I found in a web search mentions five ETFs that invest in BABs, Three of them--NBB, BBN, and GBAB are closed-end funds that use leverage, so never mind. These are the other two:

PowerShares Build America Bond (BAB), 0.28% ER, $1.03 billion assets
PIMCO Build America Bond ETF (BABZ), 0.45% ER, $37 million-with-an-m assets.

BAB is now the Invesco Taxable Municipal Bond ETF, 0.28% ER, $855 million in assets. I don't know how to identify which of the bonds in the BAB holdings list are actually BABs, and I don't see any place where Invesco shows us what percentage of the fund is in BABs. I assume from the fund name and company change that it's not much, if any.

BABZ was liquidated on or about October 1st, 2014 and no longer exists.
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Re: Build America Bonds in ESG Core-4?

Post by vineviz » Thu Nov 15, 2018 9:20 am

nisiprius wrote:
Thu Nov 15, 2018 8:20 am

BAB is now the Invesco Taxable Municipal Bond ETF, 0.28% ER, $855 million in assets. I don't know how to identify which of the bonds in the BAB holdings list are actually BABs, and I don't see any place where Invesco shows us what percentage of the fund is in BABs. I assume from the fund name and company change that it's not much, if any.
I looked up the top 10 bonds in BAB and the vast majority are Build America Bonds. If I can do a mass lookup of CUSIPS I’ll report back with stats.

Even without the designation, though, I suspect a case can be made that most taxable munis could be considered ESG if you squint hard enough.
"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: Build America Bonds in ESG Core-4?

Post by naha66 » Thu Nov 15, 2018 11:31 am

nisiprius wrote:
Thu Nov 15, 2018 8:20 am
Image

The ESG Core-4 portfolio calls for a 20% allocation to "Build America Bonds & US Government Securities."

Being listed first suggests that Build America Bonds are the preferred asset for implementing this portion of the portfolio.

Build America Bonds are no longer being issued; Wikipedia says "they were signed into law on February 17, 2009; the program expired December 31, 2010." The PortfolioVisualizer link uses this suggested implementation:

DSI iShares MSCI KLD 400 Social ETF 42.00%
TSORX TIAA-CREF Social Choice Intl Eq Retail 18.00%
VGIT Vanguard Intmdt-Term Trs ETF 20.00%
VFIIX Vanguard GNMA Inv 20.00%

Since BABs are private (not Treasuries) and not GNMAs, I assume that neither VGIT or VFIIX includes BABs and thus the portfolio contains no BABs at all.

An article from 2013 I found in a web search mentions five ETFs that invest in BABs, Three of them--NBB, BBN, and GBAB are closed-end funds that use leverage, so never mind. These are the other two:

PowerShares Build America Bond (BAB), 0.28% ER, $1.03 billion assets
PIMCO Build America Bond ETF (BABZ), 0.45% ER, $37 million-with-an-m assets.

BAB is now the Invesco Taxable Municipal Bond ETF, 0.28% ER, $855 million in assets. I don't know how to identify which of the bonds in the BAB holdings list are actually BABs, and I don't see any place where Invesco shows us what percentage of the fund is in BABs. I assume from the fund name and company change that it's not much, if any.

BABZ was liquidated on or about October 1st, 2014 and no longer exists.
Maybe you should read the complete website before commenting. It doesn't suggest anything.
Last edited by naha66 on Thu Nov 15, 2018 11:32 am, edited 1 time in total.

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Re: Build America Bonds in ESG Core-4?

Post by nisiprius » Thu Nov 15, 2018 11:31 am

vineviz wrote:
Thu Nov 15, 2018 9:20 am
...I looked up the top 10 bonds in BAB and the vast majority are Build America Bonds. If I can do a mass lookup of CUSIPS I’ll report back with stats...
Thanks. How do you recognize them?
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Re: Build America Bonds in ESG Core-4?

Post by naha66 » Thu Nov 15, 2018 11:41 am

nisiprius wrote:
Thu Nov 15, 2018 11:31 am
vineviz wrote:
Thu Nov 15, 2018 9:20 am
...I looked up the top 10 bonds in BAB and the vast majority are Build America Bonds. If I can do a mass lookup of CUSIPS I’ll report back with stats...
Thanks. How do you recognize them?
On invesco website under holding instead off ticker symbol they have the cusip #, DuckDuckGo is your friend.

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Re: Build America Bonds in ESG Core-4?

Post by vineviz » Thu Nov 15, 2018 1:34 pm

nisiprius wrote:
Thu Nov 15, 2018 11:31 am
vineviz wrote:
Thu Nov 15, 2018 9:20 am
...I looked up the top 10 bonds in BAB and the vast majority are Build America Bonds. If I can do a mass lookup of CUSIPS I’ll report back with stats...
Thanks. How do you recognize them?
As naha66 mentioned, the CUSIP gets you a lot of the way there. Many Build America Bonds don't have "Build America" in their name, though, and digging through hundreds of individual listings by hand is inefficient.

I found a couple Build America Bond UITS (about 75 of them) that listed the CUSIP of their holdings, plus a Piper Jaffray bond guide, and downloaded them to see how much overlap there was with BAB.

In addition, because the Build America Bonds were only issued (I'm pretty sure) in 2009 and 2010, it's reasonable to assume that most of these bonds will mature in a year ending in 9 or 0 (callable bonds would be the exception, since the call date is listed I think. Indeed the BAB ETF has 53% of its holdings ending in one of those years, far more than the 20% you'd see with random selection.

With some extrapolation, I estimate about 75-80% of the holdings of BAB are probably "true" Build America Bonds, with the remainder being similar bonds issued before or after the program's operational dates.
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Re: Core-4 Investing is LIVE! It really is this time!

Post by Rick Ferri » Thu Nov 15, 2018 4:07 pm

ESG bond funds are few and far between. There is one decent one and I identify it. The alternative is to use Treasury bonds, GNMAs, and taxable municipal bonds including BAB or some combination of these.

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

Post by JasonF » Fri Nov 16, 2018 12:26 pm

As someone who is in "this business" (I'm a CFP/JD and work with a few families on multi-generational wealth transfer) I applaud Rick not only for launching Core-4, but for all the work he does in this industry. For the record, I'm not affiliated with this product but appreciate the concept.

The folks on this board are a unique bunch, the majority of whom have taken the time (and experienced the growing pains) of learning how to be a successful DIY investor and manage the hardest aspect of all: controlling behavior.

The majority of people outside this community have no investment philosophy, no strategy and definitely no discipline (using Rick's 3 parameters). So they bounce around from adviser to adviser, never make appreciable progress toward their goals (if they even have any) and wind up just paying excessive fees along the way. Blame is usually placed at the feet of unscrupulous advisers, but it's not that straightforward.

So this concept/product, if someone partners with a vetted adviser, may help a non-Boglehead get all three facets (strategy, philosophy, discipline) aligned in their favor. God knows it's better than the garbage I've seen peddled through the years. And even if they don't partner with an adviser, they're at least going down a much better path than most of the alternatives out there.

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

Post by cody69 » Fri Nov 16, 2018 6:59 pm

Rick,

I spent time on the website today and I like it.

I have most if not all your books and have learned much from your writing.
Was attracted to the Core-4 line-up when you first introduced it.
The simplification over time is positive... eg., now recommending a single international fund vs Europe/Asia/EM as in early books.

You've inspired my AA, which is a variant of the traditional Core-4 recommendation... has served me well... many thanks!

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

Post by rotorhead » Sat Nov 17, 2018 11:30 am

Rick,

I have very much enjoyed reading your contributions to the Bogleheads forum over the years; and have learned a lot. The simple approach is really the best for most of us. But the importance of knowing one's risk tolerance is key to the whole exercise. Determine risk tolerance, pick a portfolio & re-balancing strategy, and stick to it.

I have read through this entire thread; and looked over your new website. It appears to me that you have taken an approach much like Scott Burns did with his "Couch Potato" portfolios in years past. Burns is retired now; but I believe his "AssetBuilder" website goes on under some of his protégés. If there are newer Bogleheads out there who don't know what I'm talking about, take a look:
https://assetbuilder.com/our-model-portfolios

It's a good approach; very simple and easy to do. If one is not comfortable doing it yourself, then seek professional help (at a reasonable fee of course).

In my own case, I have evolved over the years to a 2-fund portfolio - Total Stock & Total Bond. Works very well for me.

Thank you.

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