Rick Ferri Fixed Income Portfolio Funds

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Boxtrap
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Rick Ferri Fixed Income Portfolio Funds

Post by Boxtrap » Thu Feb 22, 2018 4:38 pm

I've just finished Rick Ferri's All About Asset Allocation. What a terrific and insightful read. Lots to think about.

I see that for mid-life accumulators (that's me), he recommends a fixed-income portfolio consisting of Total Bond Market, TIPS and High Yield/junk bond. If I'm not mistaken, I believe his fixed income allocation was something like 50% Total Bond, and then 25% apiece of TIPS and Junk.

Rick suggests that adding in slices of TIPS and Junk will increase fixed income performance over time beyond strictly holding Total Bond, and for minimal additional risk and expense. Has anyone employed this trio of fixed income funds, and if so, how has it fared for you?

dbr
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by dbr » Thu Feb 22, 2018 7:11 pm

I have a 50% intermediate bond and 50% TIPS allocation in fixed income. How it has done is that it has/will moderate the volatility of the overall portfolio at the cost of reduced expected return. I have no idea what the comparison would have been to not having TIPS or adding junk bonds. Estimates of how my portfolio will fare with withdrawals over time would probably show that no difference can be discerned for a wide range of choices of bonds and even of asset allocation relative to the uncertainty in making those estimates.

A person can calculate estimates of the mean return and standard deviation of return from estimates of those properties of the input components together with an estimate of the correlations.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by livesoft » Thu Feb 22, 2018 7:20 pm

Mr Ferri's book was published years ago. I would never blindly follow the advice found in an old book. I might follow it after checking it out.

You might put some of the recommended bond allocations into a tool like PortfolioVisualizer.com and see how they turned out after the book was published. And compare them to some other bond allocations such as 100% Total US Bond Market Index fund.

At least PortfolioVisualizer would give you concrete factual numbers rather than opinions from people who often can't remember anything anyways.
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by anil686 » Thu Feb 22, 2018 7:28 pm

I also loved Rick’s book and have read it a couple of times - most recently a couple of years ago. I also agree with Livesoft’s assessment especially after Rick’s interview with Christine Benz a couple of years ago at a conference. He pretty much stated that a simple 3 fund portfolio is all that is needed. I still think there is value researching and understanding the points of his book, but I happen to agree with Rick in that interview - 3 funds are probably all that is required - sure tilting or overweighting REITs or splitting your bond allocations may help and probably won’t hurt - but they are probably not going to make a substantial difference one way or the other - JMO though and hope it helps....

http://www.morningstar.com/videos/61557 ... eturn.html

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by 3funder » Thu Feb 22, 2018 9:01 pm

I use total bond, but a 50/50 intermediate-term treasury/corporate allocation should do the trick. If it doesn't, then I'll be the first one scratching my head.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by stlutz » Thu Feb 22, 2018 10:34 pm

Looks like those recommendations would have given you a little more return and a little more volatility vs. just using total bond.

https://www.portfoliovisualizer.com/bac ... tion5_2=10

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by mjb49 » Fri Feb 23, 2018 7:43 am

stlutz wrote:
Thu Feb 22, 2018 10:34 pm
Looks like those recommendations would have given you a little more return and a little more volatility vs. just using total bond.

https://www.portfoliovisualizer.com/bac ... tion5_2=10
50% ITT and 50% Tips gives you 24 BP reduced return with 40% less risk.
Last edited by mjb49 on Fri Feb 23, 2018 9:14 am, edited 1 time in total.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by dbr » Fri Feb 23, 2018 8:56 am

livesoft wrote:
Thu Feb 22, 2018 7:20 pm


At least PortfolioVisualizer would give you concrete factual numbers rather than opinions from people who often can't remember anything anyways.
Actually not because those calculations don't come with a margin of error with respect to estimating future behavior. The same is of course true of Mr. Ferri's recommendations. I am firmly convinced that beyond a very general correlation of expected return with risk (conventional definition of) there is no game to be played with bonds.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by livesoft » Fri Feb 23, 2018 9:16 am

Yes, I agree. Many people have no way of knowing what the Signal is and what the Noise is. They don't even want to find that out in the first place.

But if one does, then I would recommend things like Nate Silver's book "The Signal and the Noise" and others like it.
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by cfs » Fri Feb 23, 2018 9:34 am

Then the question should be asked directly to Mister Ferri, what is in your wallet, better, what is in your fixed income portfolio, and some will be surprised by the answer. My signature applies, y gracias por leer / cfs
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Sandtrap » Fri Feb 23, 2018 9:53 am

Fund strategies evolve and change to meet the needs of past and present financial conditions. Now that you have the start of a good foundation in Rick Ferri's strategies, it would be prudent to study other approaches up to present date with no attachment to any particular method.

https://www.bogleheads.org/wiki/Category:Portfolios

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Boxtrap » Fri Feb 23, 2018 9:58 am

Thanks, all.

I certainly would never blindly make my investment decisions based precisely on any book (let alone an older one), without first doing research on my own, coming to my own informed decision and being confident that my choices are my own and not someone else's. So this is all good food for thought.

Right now I am utilizing a simple 3 fund portfolio - Vanguard US 500 Index and Vanguard Total International for the equity side, and Vanguard Total Bond for the fixed income side. I very well may just stick with this effective simplicity, continue saving/investing as much as I possibly can, and just let it be what it is with annual check ins for rebalancing. Interesting to see that Mr. Ferri has very recently advocated this approach. In his book, his more advanced portfolios contain as many as 12 funds, sliced and diced. Even if it did provide a few bps of additional return over the long term, one needs to ask if the additional expense ratio negated those marginally higher returns. There really is something to be said for simplicity, especially when it works well.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by livesoft » Fri Feb 23, 2018 10:00 am

Boxtrap wrote:
Fri Feb 23, 2018 9:58 am
In his book, his more advanced portfolios contain as many as 12 funds, sliced and diced.
When the book was published, many of the current Vanguard products recommended on this forum did not exist in their current forms. In particular, the Total International Stock Market Index fund that you own did not exist in the form that you own.
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by dbr » Fri Feb 23, 2018 10:04 am

Boxtrap wrote:
Fri Feb 23, 2018 9:58 am
Thanks, all.

I certainly would never blindly make my investment decisions based precisely on any book (let alone an older one), without first doing research on my own, coming to my own informed decision and being confident that my choices are my own and not someone else's. So this is all good food for thought.

Right now I am utilizing a simple 3 fund portfolio - Vanguard US 500 Index and Vanguard Total International for the equity side, and Vanguard Total Bond for the fixed income side. I very well may just stick with this effective simplicity, continue saving/investing as much as I possibly can, and just let it be what it is with annual check ins for rebalancing. Interesting to see that Mr. Ferri has very recently advocated this approach. In his book, his more advanced portfolios contain as many as 12 funds, sliced and diced. Even if it did provide a few bps of additional return over the long term, one needs to ask if the additional expense ratio negated those marginally higher returns. There really is something to be said for simplicity, especially when it works well.
I have always been uncomfortable with books that present these hierarchies of more and more complex portfolios. That does not indicate any negativity toward Mr. Ferri and other authors who have done much to educate investors. The problem is that these presentations seem to imply that "smarter" or "more advanced" investors can pursue complexity in the interest of better advantage in investing, and I think that is a dubious proposition presented for the wrong reasons. I also worry that unfortunately this presentation exists because without it there is not enough material to justify a book. It can be true that these various portfolios are useful to illustrate certain concepts, but it is not helpful to turn investing into an exercise in ordering from a menu.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Boxtrap » Sat Feb 24, 2018 10:18 am

Was doing some exploration of Portfolio Visualizer yesterday. What an outstanding tool. Learning all it can do will be a great education in and of itself.

I did some brief portfolio backtesting yesterday of a comparison betweeen my current 3 fund portfolio, which is 60% VFIAX / 30% VGTSX / 10% VBTLX, and an even simpler 2 fund portfolio of 90% VFIAX / 10% VBTLX. Backtested as far as those funds would allow. Unless I did something wrong, what I found in that comparison was that there was essentially no higher return in the portfolio that had the international exposure. That surprised me a lot especially given what a lot of people, including many folks here, say about international exposure warranting a place in one’s equity allocation. Can anyone lend some thoughts on why that might be the case? Again, I recognize that being a Portfolio Visualizer novice, maybe I wasn’t looking at this comparison in the most effective way.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by dbr » Sat Feb 24, 2018 10:24 am

Boxtrap wrote:
Sat Feb 24, 2018 10:18 am
Was doing some exploration of Portfolio Visualizer yesterday. What an outstanding tool. Learning all it can do will be a great education in and of itself.

I did some brief portfolio backtesting yesterday of a comparison betweeen my current 3 fund portfolio, which is 60% VFIAX / 30% VGTSX / 10% VBTLX, and an even simpler 2 fund portfolio of 90% VFIAX / 10% VBTLX. Backtested as far as those funds would allow. Unless I did something wrong, what I found in that comparison was that there was essentially no higher return in the portfolio that had the international exposure. That surprised me a lot especially given what a lot of people, including many folks here, say about international exposure warranting a place in one’s equity allocation. Can anyone lend some thoughts on why that might be the case? Again, I recognize that being a Portfolio Visualizer novice, maybe I wasn’t looking at this comparison in the most effective way.
Diversification is expected to reduce risk rather than to increase return though with reduced risk compounded return may be increased for the same expected return. Did you observe any reduction in risk compared to the individual SDs of the assets?

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Boxtrap » Sat Feb 24, 2018 10:51 am

Thanks, DBR. Point taken another the risk reduction. I’d have to check again to answer your question accurately, but I thought I only saw very minimal risk reduction too, leading me to scratch my head over this even more. I’ll double check though.

I suppose the same argument can be made for adding REIT’s, yes? Seems to be the primary benefit of REIT’s is also risk reduction via further diversification as opposed to increased expected return.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by goingup » Sat Feb 24, 2018 11:10 am

Boxtrap-
Have you seen the forum wiki's list of various portfolios? https://www.bogleheads.org/wiki/Lazy_portfolios
The portfolio that Rick is best known for is called Core Four.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by mhalley » Sat Feb 24, 2018 3:32 pm

There were many lively discussions in the past between Rick and others over the value of adding high yield. There were also many discussions about commodities. High yield continues to come up, but commodities not so much. International has underperformed quite a bit lately, we will see if it makes up for this with some outperformance in the future.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Boxtrap » Sat Feb 24, 2018 5:39 pm

mhalley wrote:
Sat Feb 24, 2018 3:32 pm
There were many lively discussions in the past between Rick and others over the value of adding high yield. There were also many discussions about commodities. High yield continues to come up, but commodities not so much. International has underperformed quite a bit lately, we will see if it makes up for this with some outperformance in the future.
When I did a Portfolio Visualizer back test comparison between a bond portfolio of 100% VBTLX and one of 50% VBTLX and 50% high yield, there was roughly 1-1.5% increased performance. There was also some additional risk, of course. It’s food for thought on adding a little high yield into the fixed income mix.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by tibbitts » Sat Feb 24, 2018 6:11 pm

Boxtrap wrote:
Sat Feb 24, 2018 10:18 am
Was doing some exploration of Portfolio Visualizer yesterday. What an outstanding tool. Learning all it can do will be a great education in and of itself.

I did some brief portfolio backtesting yesterday of a comparison betweeen my current 3 fund portfolio, which is 60% VFIAX / 30% VGTSX / 10% VBTLX, and an even simpler 2 fund portfolio of 90% VFIAX / 10% VBTLX. Backtested as far as those funds would allow. Unless I did something wrong, what I found in that comparison was that there was essentially no higher return in the portfolio that had the international exposure. That surprised me a lot especially given what a lot of people, including many folks here, say about international exposure warranting a place in one’s equity allocation. Can anyone lend some thoughts on why that might be the case? Again, I recognize that being a Portfolio Visualizer novice, maybe I wasn’t looking at this comparison in the most effective way.
Offhand I don't know how long a time those funds have existed for, but I'd say that in general portfolio recommendations are based on a very long investing horizon, generally longer than one person's lifetime. Also "warranting a place" doesn't necessarily mean "result in higher returns." Part of the idea is to diversify against risks that might only show up once in many investing generations.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by fennewaldaj » Sat Feb 24, 2018 10:57 pm

dbr wrote:
Fri Feb 23, 2018 10:04 am
Boxtrap wrote:
Fri Feb 23, 2018 9:58 am
Thanks, all.

I certainly would never blindly make my investment decisions based precisely on any book (let alone an older one), without first doing research on my own, coming to my own informed decision and being confident that my choices are my own and not someone else's. So this is all good food for thought.

Right now I am utilizing a simple 3 fund portfolio - Vanguard US 500 Index and Vanguard Total International for the equity side, and Vanguard Total Bond for the fixed income side. I very well may just stick with this effective simplicity, continue saving/investing as much as I possibly can, and just let it be what it is with annual check ins for rebalancing. Interesting to see that Mr. Ferri has very recently advocated this approach. In his book, his more advanced portfolios contain as many as 12 funds, sliced and diced. Even if it did provide a few bps of additional return over the long term, one needs to ask if the additional expense ratio negated those marginally higher returns. There really is something to be said for simplicity, especially when it works well.
I have always been uncomfortable with books that present these hierarchies of more and more complex portfolios. That does not indicate any negativity toward Mr. Ferri and other authors who have done much to educate investors. The problem is that these presentations seem to imply that "smarter" or "more advanced" investors can pursue complexity in the interest of better advantage in investing, and I think that is a dubious proposition presented for the wrong reasons. I also worry that unfortunately this presentation exists because without it there is not enough material to justify a book. It can be true that these various portfolios are useful to illustrate certain concepts, but it is not helpful to turn investing into an exercise in ordering from a menu.
Having read mister Ferri's book recently and others that do similar things I always got the impression that they usually present a simplified portfolio for those that don't want to mess with 7-10 fund portfolios. The simplified portfolio is designed to capture the most important part of their message while the more complicated on reflects what they suggest if you don't mind a little complexity. Really most people reading mid level books like Ferri's are capable of running the more complex portfolios but not everyone wants to.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Sebas » Fri Mar 09, 2018 11:33 am

I just read Ferri's book, together with How a Second Grader...., and a couple more books related to Asset Allocation. I am agnostic (I'd rather say ignorant) as to what is best but looking at the hard data from the book (if I recall correctly, there are series of 4/5 decades), correlation, diversification and the like seem to support a more diverse portfolio if we want a few extra % bps. Increased taxes and fees might have a negative impact which needs to be analyzed in each case (e.g., I am an Argentine resident that for tax reasons invests in accumulating Irish-law ETFs, and this brings a different cost pic).

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by tj » Thu Jun 06, 2019 8:08 pm

Just heard Rick on the White Coast Investor podcast. He currently has two years of spending in a short term bond index. The rest of his fixed income is in the PFFD ETF!

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by unclescrooge » Thu Jun 06, 2019 9:33 pm

My bond exposure is split between 50% total bond, high yield and emerging market bonds.

The high yield fund is the best performing fund in my portfolio, up 20% YTD. It is also the most expensive with an expense ratio of 2%.

The higher reward comes with higher risk. Whether it not it will continue can only be determined in hindsight.

I've owned the fund for 5 years and am quite happy with it. But I have bought in to the slice and dice philosophy and am comfortable with the added complexity.

Do what you feel you can stick with. All strategies may underperform for many years.

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by bikechuck » Thu Jun 06, 2019 9:42 pm

tj wrote:
Thu Jun 06, 2019 8:08 pm
Just heard Rick on the White Coast Investor podcast. He currently has two years of spending in a short term bond index. The rest of his fixed income is in the PFFD ETF!
What is the PFFD ETF?

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by tj » Thu Jun 06, 2019 10:14 pm

bikechuck wrote:
Thu Jun 06, 2019 9:42 pm
tj wrote:
Thu Jun 06, 2019 8:08 pm
Just heard Rick on the White Coast Investor podcast. He currently has two years of spending in a short term bond index. The rest of his fixed income is in the PFFD ETF!
What is the PFFD ETF?
It's a low cost Preferred Stocks ETF. It sounded like the rationale was that the dividends are qualified?

https://www.globalxfunds.com/funds/pffd/

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by nix4me » Thu Jun 06, 2019 10:17 pm

All those books that recommend bonds were written when bonds were good....

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Re: Rick Ferri Fixed Income Portfolio Funds/ PFFD ETF

Post by CAA » Sat Jun 29, 2019 5:42 pm

I just listened to the White Coat Investor podcast with Rick Ferri and thought it was excellent. However was somewhat confused with his comments regard the PFFD ETF. He said,

"The fixed income portion of his portfolio, only a small portion of it, basically two years worth of living expenses are in a short-term bond index fund. The other portion of his fixed income is in a preferred stock index fund, PFFD. The reason for that is because this is taxable money and preferred stocks pay a dividend, which is actually a tax efficient dividend, and it’s at a relatively high rate relative to corporate bonds. It is really a unique asset class."

Please clarify, if the PFFD EFT portion is in fixed income my thinking this position would be in a tax deferred account such as a IRA or Roth IRA so why is it considered taxable money and why would a tax efficient dividend matter? Or is he using this ETF as a position in a taxable account as a better option than a money market or muni bond fund to get a better dividend? Appreciate if someone could provide a thorough explanation.

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Re: Rick Ferri Fixed Income Portfolio Funds/ PFFD ETF

Post by FBN2014 » Sat Jun 29, 2019 7:18 pm

carolappel wrote:
Sat Jun 29, 2019 5:42 pm
I just listened to the White Coat Investor podcast with Rick Ferri and thought it was excellent. However was somewhat confused with his comments regard the PFFD ETF. He said,

"The fixed income portion of his portfolio, only a small portion of it, basically two years worth of living expenses are in a short-term bond index fund. The other portion of his fixed income is in a preferred stock index fund, PFFD. The reason for that is because this is taxable money and preferred stocks pay a dividend, which is actually a tax efficient dividend, and it’s at a relatively high rate relative to corporate bonds. It is really a unique asset class."

Please clarify, if the PFFD EFT portion is in fixed income my thinking this position would be in a tax deferred account such as a IRA or Roth IRA so why is it considered taxable money and why would a tax efficient dividend matter? Or is he using this ETF as a position in a taxable account as a better option than a money market or muni bond fund to get a better dividend? Appreciate if someone could provide a thorough explanation.
Send Rick a private message and ask if he would answer on this thread.
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Re: Rick Ferri Fixed Income Portfolio Funds/ PFFD ETF

Post by friar1610 » Sat Jun 29, 2019 8:01 pm

carolappel wrote:
Sat Jun 29, 2019 5:42 pm
I just listened to the White Coat Investor podcast with Rick Ferri and thought it was excellent. However was somewhat confused with his comments regard the PFFD ETF. He said,

"The fixed income portion of his portfolio, only a small portion of it, basically two years worth of living expenses are in a short-term bond index fund. The other portion of his fixed income is in a preferred stock index fund, PFFD. The reason for that is because this is taxable money and preferred stocks pay a dividend, which is actually a tax efficient dividend, and it’s at a relatively high rate relative to corporate bonds. It is really a unique asset class."

Please clarify, if the PFFD EFT portion is in fixed income my thinking this position would be in a tax deferred account such as a IRA or Roth IRA so why is it considered taxable money and why would a tax efficient dividend matter? Or is he using this ETF as a position in a taxable account as a better option than a money market or muni bond fund to get a better dividend? Appreciate if someone could provide a thorough explanation.
I am not Rick andvI haven't yet listened to the podcast. From reading what's above, here is what I think he meant. That by using the PFFD ETF in lieu of a traditional bond fund in his taxable account, he is getting a higher rate of "interest" than he would from a bond fund and paying taxes only at the dividends tax rate rather than the ordinary tax rate (which would be the case for interest from a bond fund). Of course, the "interest" from PFFD isn't really interest; it's a qualified dividend since the ETF holds stocks, not bonds. As I understand things, this is a bit riskier than holding a pure bond fund but with that risk goes more reward. Rick knows a thing or two about investing, so I'm sure he knows what he is doing.

I presume he has used his tax-advantaged space in some smart and clever way, so that's why PFFD is in taxable, not tax-advantaged.

All of this is, of course, just my take on what I think he's doing.
Friar1610

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by CAA » Sat Jun 29, 2019 10:05 pm

Thank you and appreciate your response as totally makes sense!
CAA

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by tj » Sat Jun 29, 2019 10:37 pm

I wonder if Rick advises clients to use pffd. Seems like it has a bigger risk of capital loss than a Treasury bond fund....

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Rick Ferri » Sun Jun 30, 2019 8:22 am

Clearly, there is more risk with PFFD than Treasury bonds. Preferred stocks are issued mainly by banks to capitalize their operations without exceeding debt limits or creating shareholder dilution. They will have more risk than bonds issued by the federal government. About 60% of PFFD dividends qualify for the lower dividend tax rate, currently placing the after-tax yield of the fund over 4%.

In full disclosure, I personally own this fund.

Rick Ferri
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by abuss368 » Sun Jun 30, 2019 9:30 am

Rick Ferri wrote:
Sun Jun 30, 2019 8:22 am
Clearly, there is more risk with PFFD than Treasury bonds. Preferred stocks are issued mainly by banks to capitalize their operations without exceeding debt limits or creating shareholder dilution. They will have more risk than bonds issued by the federal government. About 60% of PFFD dividends qualify for the lower dividend tax rate, currently placing the after-tax yield of the fund over 4%.

In full disclosure, I personally own this fund.

Rick Ferri
Thanks Rick. Do you still recommend the three Bond funds of Total Bond, tips, and high yield? Have you moved to a Total Bond only for clients?
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by willthrill81 » Sun Jun 30, 2019 9:43 am

I personally find a 50/50 allocation to Treasuries and TIPS to be appealing.
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Rick Ferri » Sun Jun 30, 2019 6:03 pm

abuss368 wrote:
Sun Jun 30, 2019 9:30 am
Rick Ferri wrote:
Sun Jun 30, 2019 8:22 am
Clearly, there is more risk with PFFD than Treasury bonds. Preferred stocks are issued mainly by banks to capitalize their operations without exceeding debt limits or creating shareholder dilution. They will have more risk than bonds issued by the federal government. About 60% of PFFD dividends qualify for the lower dividend tax rate, currently placing the after-tax yield of the fund over 4%.

In full disclosure, I personally own this fund.

Rick Ferri
Thanks Rick. Do you still recommend the three Bond funds of Total Bond, tips, and high yield? Have you moved to a Total Bond only for clients?
It depends entirely on each person's individual needs.

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

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by tj » Sun Jun 30, 2019 7:21 pm

Rick Ferri wrote:
Sun Jun 30, 2019 6:03 pm
abuss368 wrote:
Sun Jun 30, 2019 9:30 am
Rick Ferri wrote:
Sun Jun 30, 2019 8:22 am
Clearly, there is more risk with PFFD than Treasury bonds. Preferred stocks are issued mainly by banks to capitalize their operations without exceeding debt limits or creating shareholder dilution. They will have more risk than bonds issued by the federal government. About 60% of PFFD dividends qualify for the lower dividend tax rate, currently placing the after-tax yield of the fund over 4%.

In full disclosure, I personally own this fund.

Rick Ferri
Thanks Rick. Do you still recommend the three Bond funds of Total Bond, tips, and high yield? Have you moved to a Total Bond only for clients?
It depends entirely on each person's individual needs.

Rick Ferri
Has it been added to any of the Core Four portfolios?

elainet7
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by elainet7 » Tue Sep 17, 2019 9:05 am

We are investing periodically in PFFD

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Rick Ferri
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by Rick Ferri » Tue Sep 17, 2019 1:31 pm

tj wrote:
Sun Jun 30, 2019 7:21 pm
Rick Ferri wrote:
Sun Jun 30, 2019 6:03 pm
abuss368 wrote:
Sun Jun 30, 2019 9:30 am
Rick Ferri wrote:
Sun Jun 30, 2019 8:22 am
Clearly, there is more risk with PFFD than Treasury bonds. Preferred stocks are issued mainly by banks to capitalize their operations without exceeding debt limits or creating shareholder dilution. They will have more risk than bonds issued by the federal government. About 60% of PFFD dividends qualify for the lower dividend tax rate, currently placing the after-tax yield of the fund over 4%.

In full disclosure, I personally own this fund.

Rick Ferri
Thanks Rick. Do you still recommend the three Bond funds of Total Bond, tips, and high yield? Have you moved to a Total Bond only for clients?
It depends entirely on each person's individual needs.

Rick Ferri
Has it been added to any of the Core Four portfolios?
Yes. It's in the Income Seeker Core-4 Portfolio.

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

elainet7
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by elainet7 » Thu Sep 19, 2019 4:17 pm

Ric Ferri Cor 4 Income is Hi Dividends US and Intl, Preferreds, and Corporates
I am in three, not int'l bonds or intl dividends

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abuss368
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by abuss368 » Thu Sep 19, 2019 4:35 pm

Rick has a variety of portfolios based on investor strategy. Essentially portfolios to let an investor sleep well at night.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

elainet7
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by elainet7 » Fri Sep 20, 2019 8:32 am

Vanguards td funds all include some intl bond fund

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Re: Rick Ferri Fixed Income Portfolio Funds

Post by elainet7 » Fri Sep 20, 2019 10:45 am

We have had some cds called recently and not sure where to go
10yr cds paying 2.4 and the MM not much less
Any ideas???

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abuss368
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by abuss368 » Sat Sep 21, 2019 10:36 am

elainet7 wrote:
Fri Sep 20, 2019 10:45 am
We have had some cds called recently and not sure where to go
10yr cds paying 2.4 and the MM not much less
Any ideas???
I prefer the cash and flexibility of a money market. The funds are there and accessible if needed. We simply use Vanguard Prime. I’m not even sure of the interest rate but I am sure it is competitive.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

FBN2014
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by FBN2014 » Sat Sep 21, 2019 10:52 am

Rick Ferri wrote:
Tue Sep 17, 2019 1:31 pm
tj wrote:
Sun Jun 30, 2019 7:21 pm
Rick Ferri wrote:
Sun Jun 30, 2019 6:03 pm
abuss368 wrote:
Sun Jun 30, 2019 9:30 am
Rick Ferri wrote:
Sun Jun 30, 2019 8:22 am
Clearly, there is more risk with PFFD than Treasury bonds. Preferred stocks are issued mainly by banks to capitalize their operations without exceeding debt limits or creating shareholder dilution. They will have more risk than bonds issued by the federal government. About 60% of PFFD dividends qualify for the lower dividend tax rate, currently placing the after-tax yield of the fund over 4%.

In full disclosure, I personally own this fund.

Rick Ferri
Thanks Rick. Do you still recommend the three Bond funds of Total Bond, tips, and high yield? Have you moved to a Total Bond only for clients?
It depends entirely on each person's individual needs.

Rick Ferri
Has it been added to any of the Core Four portfolios?
Yes. It's in the Income Seeker Core-4 Portfolio.

Rick Ferri
What is he current yield for the Income Seeker Core 4 for conservative, moderate, and aggressive allocations?
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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abuss368
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Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Rick Ferri Fixed Income Portfolio Funds

Post by abuss368 » Sat Sep 21, 2019 10:56 am

FBN2014 wrote:
Sat Sep 21, 2019 10:52 am
Rick Ferri wrote:
Tue Sep 17, 2019 1:31 pm
tj wrote:
Sun Jun 30, 2019 7:21 pm
Rick Ferri wrote:
Sun Jun 30, 2019 6:03 pm
abuss368 wrote:
Sun Jun 30, 2019 9:30 am


Thanks Rick. Do you still recommend the three Bond funds of Total Bond, tips, and high yield? Have you moved to a Total Bond only for clients?
It depends entirely on each person's individual needs.

Rick Ferri
Has it been added to any of the Core Four portfolios?
Yes. It's in the Income Seeker Core-4 Portfolio.

Rick Ferri
What is he current yield for the Income Seeker Core 4 for conservative, moderate, and aggressive allocations?
Not sure but I did see there is a website Rick launched that can be reviewed or probably calculated.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

FBN2014
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by FBN2014 » Mon Sep 23, 2019 1:24 pm

I looked up the yields for the funds that Rick suggests. Here are the highest ones, all iShares funds:

High Dividend Yield US Stock Fund DVY 3.43%
High Dividend Yield International Stock Fund IDV 6.31%
US Investment Grade Corporate Bond Fund IGIB 3.61%
US Preferred Stock Fund PFF 5.59%

Using Rick's suggested asset allocation models here are the overall yields:

Low Risk 20/80 4.13%
Conservative 40/60 4.18%
Moderate 60/40 4.22%
Aggressive 80/20 4.25%

Since the yields for the models are essentially the same, your choice of allocation depends on your tolerance for drawdown when the bear arrives.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

elainet7
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Re: Rick Ferri Fixed Income Portfolio Funds

Post by elainet7 » Tue Sep 24, 2019 12:19 pm

Have some considerable assets in long term bond funds, Vanguard of course, with YTD gains nearing 25%!!!!
If I sell where to put the money?
what say you

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