New job, trying to simplify to something coherent

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Atarax1a
Posts: 5
Joined: Tue Nov 14, 2017 9:02 pm

New job, trying to simplify to something coherent

Post by Atarax1a » Sat Dec 08, 2018 3:03 pm

Longtime lurker, first-time poster (well, fourth, technically... :P ). Jumping into the details:

Emergency funds: Rebuilding, approximately 3 months worth presently, target of 1 yr's worth
Debt: $0 student loans, housing, or car; some credit card (paid in full monthly - collecting cashback bonus)
Tax Filing Status: Single
Tax Rate: 22% Federal, 2% State
State of Residence: ND
Age: 32
Desired Asset allocation: (see questions)

Current retirement assets:
Portfolio size: mid 5-figures

Current employer 401k with Fidelity
55% Blackrock LifePath Index 2050 N (no ticker) (0.06% ER)
--> 2% of this is in the Roth 401k after an after-tax contribution was made

Previous 401k at Merrill Edge / PAi
6% iShares S&P 500 Index Inst (BSPIX) (0.11% ER)

T-IRA at Vanguard
30% Wellington (VWELX) (0.25% ER)

Roth IRA at Thrivent
9% Thrivent Aggressive Allocation Fund-S (TAAIX) (0.93% ER)


Contributions

New annual contributions:
$IRS max to T-401k (employer matches 50% of contributions up to IRS deduction max)
$IRS max to Roth IRA
$IRS max to HSA

Available funds

Funds available in 401(k) at Fidelity:
-> Most of these are trusts, not mutual funds, so there are no tickers. there is also a BrokerageLink option I've not explored
-> Included everything I would consider (i.e. anything with a higher ER than those international options are out):
Blackrock LifePath Index 2050 N (0.06% ER)
Vanguard Institutional S&P500 Index TR (0.01% ER)
DFA Small/Mid-cap Value (0.26% ER)
PIMCO Total Return [intermediate-term bonds] (0.27% ER)
Vanguard Short term Bond Index Institutional (VBIPX) (0.04% ER)
Blackrock Short-Term Investment Account [money market / cash] (0.04% ER)
Fidelity Contrafund commingled pool Class 3 [large-cap] (0.35% ER)
Fidelity Growth company commingled pool Class 3 [large-cap growth] (0.35% ER)
Vanguard Russel 1000 Growth TR [large-cap growth] (0.02% ER)
Vanguard Russel 1000 Value TR [large-cap value] (0.02% ER)
Vanguard Russel 2000 Growth TR [small-cap growth] (0.03% ER)
International Growth (0.52% ER)
International Value (0.53% ER)

Current situation:
Recently changed jobs, have completed one rollover of previous company's 401k into the new 401k. Correlating with this is a pay bump that no longer makes me eligible for T-IRA contributions. 2019 will be starting Roth contributions to an account I have at Vanguard that is currently unused. There is also an ESPP that I am participating in for the discount, but at present that is being sold once it is available in order to fill the emergency fund.

Obvious moves:
- Ditch the Thrivent account and move it into my otherwise currently empty Roth IRA at Vanguard. I will give it credit for getting me started investing, but I stopped contributing there once I learned more.
- Roll the other 401k into the new 401k

Questions:
1. My current intention with the existing T-IRA at Vanguard is to let Wellington do its thing and zombie along without any further contributions, partly as a nod of 'just in case' hedging if indexing ends up wrong for some reason. It was previously Global Wellington, but thought I would remove the international risks (currency fluctuations + tax drag of them paying intl taxes). Long term intent here is to have this account be the rollover target if/when rolling to the next-company's new 401k is a worse option. Is this line of thinking valid, or am I playing mental-math games?
2. I don't know what to do for fixed income in the current 401k. The LifePath fund I was defaulted into is 5% fixed income, and the majority of that is cash. It's otherwise about a 55/45 split on domestic/intl stocks with the remainder. The PIMCO fund is leveraged. The other two options appear to be different flavors of short-term bonds, with the Vanguard one performing worse in the last year or so (which is a 'just noise' timeline anyway). Should I be covering this with the part of the Roth IRA contributions, taking up the BrokerageLink option, or ignoring it for now and let the glidepath do its thing?
2a. I've read Bernstein and Graham, Harry Browne's and Craig Rowland's Permanent Portfolio stuff, JLCollins, ERE, and MMM, as well as lurked here for the last few years before signing up. The lowest stock allocation most of those agree with is 25%, highest generally accepted is 75%, some suggest as high as 100%. International varies from 'no way' to global cap weight. I don't have an IPS yet, because looking at the wiki has provided some examples that I've rewritten with some of my own details, but it's never really 'fit', or explained the thinking behind how you'd create one to begin with. Forgive the two-year-old asking 'why?' here, but: what are the questions I should be asking myself to evaluate the "willingness, need, and ability" parts for defining asset allocation for money that is ~30 yrs away from being touched (ideally)?
3. With all of these essentially untrackable options in the 401k (Personal Capital, Mint, etc. don't know what to do with them), is it wrong of me to want to simply dunk things into the S&P 500 and a short-term fixed income option for the low costs, and get a dash of international via the roth IRA? Or, how should I be going about tracking their performance instead? Tired of signing into so many websites just to see account details...

P.S. Yes I like to tinker and optimize things, but I also know how much of a trap that can be from tinkering with cars and computers. I'm trying to determine where 'good enough' is with this, after obsessing over this into the analysis paralysis stage. :oops:

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ruralavalon
Posts: 14236
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New job, trying to simplify to something coherent

Post by ruralavalon » Sat Dec 08, 2018 8:12 pm

welcome to the forum :) .

It is great to see that you have an emergency fund, and are debt free. That is an excellent employer match in your 401k, and several good funds are offered in your 401k. You are fortunate.


Asset allocation.
Atarax1a wrote:
Sat Dec 08, 2018 3:03 pm
Age: 32
Desired Asset allocation: (see questions)
. . . . .
a. I've read Bernstein and Graham, Harry Browne's and Craig Rowland's Permanent Portfolio stuff, JLCollins, ERE, and MMM, as well as lurked here for the last few years before signing up. The lowest stock allocation most of those agree with is 25%, highest generally accepted is 75%, some suggest as high as 100%. International varies from 'no way' to global cap weight. I don't have an IPS yet, because looking at the wiki has provided some examples that I've rewritten with some of my own details, but it's never really 'fit', or explained the thinking behind how you'd create one to begin with. Forgive the two-year-old asking 'why?' here, but: what are the questions I should be asking myself to evaluate the "willingness, need, and ability" parts for defining asset allocation [emphasis added] for money that is ~30 yrs away from being touched (ideally)?
Some of the questions you have already touched on -- your age, years to retirement, debt, dependents. Other questions are your own opinion of your risk tolerance, and any prior experience in investing during a market crash.

At age 32, 30 years from retirement, debt free, single, I suggest about 20% in bonds or other fixed income investments (like CDs). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see the wiki articles Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk", and "Asset allocation".

I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box (upper right, this page).

That works out to about 20%, bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.


Fund selection.
In selecting funds strive for a combination of broad diversification (to reduce risk) and low expense ratios (to increase your net gain). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Wiki article "Three-fund portfolio". Forum discussion, "The Three-Fund Portfolio".

Atarax1a wrote:
Sat Dec 08, 2018 3:03 pm
Funds available in 401(k) at Fidelity:
-> Most of these are trusts, not mutual funds, so there are no tickers. there is also a BrokerageLink option I've not explored
-> Included everything I would consider (i.e. anything with a higher ER than those international options are out):
Blackrock LifePath Index 2050 N (0.06% ER)
Vanguard Institutional S&P500 Index TR (0.01% ER)
DFA Small/Mid-cap Value (0.26% ER)
PIMCO Total Return [intermediate-term bonds] (0.27% ER)
Vanguard Short term Bond Index Institutional (VBIPX) (0.04% ER)

Blackrock Short-Term Investment Account [money market / cash] (0.04% ER)
Fidelity Contrafund commingled pool Class 3 [large-cap] (0.35% ER)
Fidelity Growth company commingled pool Class 3 [large-cap growth] (0.35% ER)
Vanguard Russel 1000 Growth TR [large-cap growth] (0.02% ER)
Vanguard Russel 1000 Value TR [large-cap value] (0.02% ER)
Vanguard Russel 2000 Growth TR [small-cap growth] (0.03% ER)
International Growth (0.52% ER)
International Value (0.53% ER)
Are there fees charged charged for using the BrokerageLink? Often there are per transaction fees, annual fees, or sometimes both.

I don't believe that it will be necessary to use the BrokerageLink, given the funds that are offered in your 401k.

In my opinion the funds to consider using in your new 401k include:
1) Vanguard Institutional S&P 500 Index TR (0.01% ER)
2) International Value (0.53%) ER; and
3) PIMCO Total Return [intermediate-term bonds] (0.27% ER)
OR
Vanguard Short term Bond Index Institutional (VBIPX) (0.04% ER)


1) Domestic stocks.
For domestic stocks I suggest using a total stock market index fund where available; otherwise an S&P 500 index fund (like Vanguard Institutional S&P500 Index Trust in your 401k) is good enough by itself for domestic stocks. "In a 401(k) plan with limited choices one might very well opt for an S&P 500 index fund to serve as the domestic stock component of a three-fund portfolio." Wiki article, Three-fund portfolio, "Other considerations".

An S&P 500 index fund covers 81% of the U.S. stock market investing in stocks of selected large-cap and mid-cap U.S. companies, and in the 26 years since the creation of the first total stock market index fund the total return of the two types of funds has been almost identical. Morningstar, "growth of $10k" graph, VTSAX vs VFIAX. In the first 10 years the S&P 500 fund did better, in the last 10 years the total market fund did better, and over the 26 years the total market fund gave a little more return (0.11% per year), but at the cost of a little more volatility (risk): nisiprius post, in the forum discussion "Exchanging the S&P 500 for the TSM". See also Allan Roth, CBS Moneywatch, "John C. Bogle on the S&P 500 vs. the Total Stock Market". So it seems that adding a little in mid/small cap stocks trying to mimic the holdings of a total stock market fund has historically made little difference in performance.


2) International stocks.
if forced to choose between a "growth" or "value" fund, I would choose value. In your 401k that means International Value (0.53% ER) for international stocks. Please check the fact sheet for this trust. What is the name of the company (Like BlackRock, State Street, Northern Trust, Vanguard, etc.) managing this investment? What benchmark do they say they use? How many companies does distrust invest in? Can you post a link to the fact sheet for this trust?

Instead of using International Value (0.53% ER) in your 401k, you could use Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11% in your Vanguard IRAs or a taxable account.


3) Bonds.
Just about any good credit quality, diversified, intermediate-term or short-term bond fund with a low expense ratio will do the job.

In my opinion PIMCO Total Return offered in your 401k is a good choice for a bond fund. Although actively managed it is a well diversified intermediate-term bond fund with a low expense ratio, and compares well to a total bond market index fund. nisiprius post in forum discussion "Bond Fund for Three-Fund Portfolio", Total Bond Market vs PTTRX?

Morningstar, “Growth of 10k”, "PTTRX vs VBTLX".

Of course Vanguard Short term Bond Index Institutional (VBIPX) (0.04% ER) is also good bond fund to use in your 401k.

Instead you could use Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05% in your Vanguard traditional IRA.


Example portfolio.
Atarax1a wrote:
Sat Dec 08, 2018 3:03 pm
Obvious moves:
- Ditch the Thrivent account and move it into my otherwise currently empty Roth IRA at Vanguard. I will give it credit for getting me started investing, but I stopped contributing there once I learned more.
- Roll the other 401k into the new 401k
I agree, those are good ideas.

It is often better coordinate investments across all accounts, in other words treat all accounts together as a single unified portfolio, rather than view each account separately. Select just one or two of the better funds (most diversified + lower expense ratio) in the work-based account (401k, 403b, 457, SIMPLE IRA, TSP etc.), where the choices offered are limited. Then complete the rest of the asset allocation using the nearly unlimited choices available in a taxable account or any IRAs. This approach lets you avoid having to use sub-par funds often found in work-based plans. Do not try to put all components of the asset allocation in every account. Wiki article, "Asset allocation in multiple accounts".

To make portfolio management and rebalancing easy it is often better to have at least one large tax-advantaged account which contains all three basic asset types (bonds, international stocks, and domestic stocks). Don’t try to put all components of the asset allocation in every account.

Here is an example portfolio that you could consider. This is a three-fund type portfolio, modified as necessary to accommodate the fund offerings in your 401k. Current portfolio size = "mid 5-figures". New annual contributions = about $34.5k. The asset allocation is: 20% bonds; 20% international stocks; and 60% domestic stocks. The percentages given are percentages of the total portfolio, not of a given account. The suggestion is to switch both the existing balances and the new contributions to the funds indicated. All percentages are rounded off, so may not add up exactly. Sometimes I state 00% to indicate funds you might want to add in the future.

Current 401k with Fidelity, including old Merrill Edge account (61% of total; adds $19k per year plus $9.5k employer match = $28.5k total annually = 83% of new annual contributions)
60%, Vanguard Institutional S&P500 Index TR (0.01% ER)
00%, International Value (0.53% ER); and
01%, PIMCO Total Return [intermediate-term bonds] (0.27% ER)

Traditional IRA @ Vanguard (30% of total)
19%, Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05%
11%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%

Roth IRA @ Vanguard, ex-Thrivent (09% of total; adds $6k per year = 17% of new annual contributions)
09%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%



Rebalancing.
Because the funds will grow at different and unpredictable rates, it may be necessary every few years to rebalance in order to maintain the desired asset allocation. Wiki article, "Rebalancing". You can easily adjust the asset allocation by exchanging between funds inside the current 401k.


Atarax1a wrote:
Sat Dec 08, 2018 3:03 pm
Questions:
1. My current intention with the existing T-IRA at Vanguard is to let Wellington do its thing and zombie along without any further contributions, partly as a nod of 'just in case' hedging if indexing ends up wrong for some reason. It was previously Global Wellington, but thought I would remove the international risks (currency fluctuations + tax drag of them paying intl taxes). Long term intent here is to have this account be the rollover target if/when rolling to the next-company's new 401k is a worse option. Is this line of thinking valid, or am I playing mental-math games?
I suggest instead using the traditional IRA for an excellent intermediate-term bond fund (Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05% ) to avoid having to choose one of the bond funds in your 401k.

This is also so you can use the traditional IRA (and the Roth IRA) for a better, more diversified, lower expense, international stock fund, being Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%.

Atarax1a wrote:
Sat Dec 08, 2018 3:03 pm
2. I don't know what to do for fixed income in the current 401k. The LifePath fund I was defaulted into is 5% fixed income, and the majority of that is cash. It's otherwise about a 55/45 split on domestic/intl stocks with the remainder. The PIMCO fund is leveraged. The other two options appear to be different flavors of short-term bonds, with the Vanguard one performing worse in the last year or so (which is a 'just noise' timeline anyway). Should I be covering this with the part of the Roth IRA contributions, taking up the BrokerageLink option, or ignoring it for now and let the glidepath do its thing?
See above. There are two possibilities for fixed income in your 401k, but instead I suggest Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05% in your Vanguard traditional IRA.


Atarax1a wrote:
Sat Dec 08, 2018 3:03 pm
3. With all of these essentially untrackable options in the 401k (Personal Capital, Mint, etc. don't know what to do with them), is it wrong of me to want to simply dunk things into the S&P 500 and a short-term fixed income option for the low costs, and get a dash of international via the roth IRA? Or, how should I be going about tracking their performance instead? Tired of signing into so many websites just to see account details...
To track your portfolio you can use Morningstar's free Portfolio Manger tool, manually enter tickers and number of shares for the funds with tickers, using VIIIX as proxy for the S&P 500 trust in your 401k.

You don't need to do this very often.

. . . . .

I suggest that you read one or two books on general investing. Wiki article, "Books: recommendations and reviews". When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics. Morningstar, "Investing Classroom". Also take a look at the Boglehead’s wiki, the "getting started" link I give below.

If you have any questions just ask.

I hope that this helps.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Atarax1a
Posts: 5
Joined: Tue Nov 14, 2017 9:02 pm

Re: New job, trying to simplify to something coherent

Post by Atarax1a » Sun Dec 09, 2018 10:19 pm

Thanks for the welcome, and the help so far!

Completely acknowledge I'm spoiled rotten by this one, compared to previous employer's plans. Previous employer was also the first place I was at that had plans at all. 2008's burst for me was a thing in the news that people talked about, and trying to find 'the first real job' and failing for reasons that only make sense now in hindsight. So, trying to not screw it up with the usual rookie mistakes (new car, new house, etc.) and get caught up a bit. :sharebeer
ruralavalon wrote:
Sat Dec 08, 2018 8:12 pm

Are there fees charged charged for using the BrokerageLink? Often there are per transaction fees, annual fees, or sometimes both.

I don't believe that it will be necessary to use the BrokerageLink, given the funds that are offered in your 401k.

In my opinion the funds to consider using in your new 401k include:
1) Vanguard Institutional S&P 500 Index TR (0.01% ER)
2) International Value (0.53%) ER; and
3) PIMCO Total Return [intermediate-term bonds] (0.27% ER)
OR
Vanguard Short term Bond Index Institutional (VBIPX) (0.04% ER)
There appear to be transaction fees if not using funds on the BrokerageLink list (which isn't available until signed up, near as I can find - Fidelity funds are mentioned as no transaction fee, other providers would maybe have them unless they're on an approved list), or if getting into individual bonds, options, etc.

I do agree on those four funds being the main ones of interest, maybe the DFA small/mid value one as well. At one point, briefly, I had a 4x25% split of S&P 500, DFA small/mid, int'l value, and the Blackrock short term fund, but the rollover I did stuck everything from the rollover into the LifePath fund so I simplified it all down to that while I do my homework again. The extent of the thought with that strategy was a blind 'defaults bad, this covers most asset types while keeping costs relatively low'. Previous company plan's target retirement funds (the defaults there as well) were near as makes no difference 1.00% ER... :annoyed
ruralavalon wrote:
Sat Dec 08, 2018 8:12 pm

2) International stocks.
if forced to choose between a "growth" or "value" fund, I would choose value. In your 401k that means International Value (0.53% ER) for international stocks. Please check the fact sheet for this trust. What is the name of the company (Like BlackRock, State Street, Northern Trust, Vanguard, etc.) managing this investment? What benchmark do they say they use? How many companies does distrust invest in? Can you post a link to the fact sheet for this trust?

Instead of using International Value (0.53% ER) in your 401k, you could use Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11% in your Vanguard IRAs or a taxable account.
No link that I can provide, sadly. From looking at the splash pages in the 401k site, the way the International Value thing appears to be structured is that Russell Investment Management Company manages the trust, but delegated the actual investing strategy to a number of different manager firms with no mention of who at these firms is responsible. It also started in 2009, so there's no big bubble burst behavior to look at. Otherwise, the benchmark they use is the MSCI All Country World (excluding US) Value index -- https://www.msci.com/documents/10199/02 ... af56df1bdb. Don't see any mutual fund or ETF that runs this index to use with Portfolio Visualizer. It has previously had moments of outperformance during some run ups (2013, 2017), but otherwise zigs and zags along with the index. It's currently fallen more than the index has this year, though, so no magic there.

I'm still kind of stuck on the 'don't know who's running it' problem, and the relatively higher expense ratio vs. all the other options in the 401k. It's more or less weighted large value, so in my mind it's a competitor for Vanguard's International Value fund (VTRIX), with Vanguard's option coming in about a tenth of a percent lower on the ER. They did at least compare it against Morningstar's Foreign Large Value index as well, and from looking VTRIX does trail it a little bit on a growth of 10k chart. Can't put them both on the same chart, though - no ticker for the 401k option, and the 401k option's graph doesn't let me add any other benchmarks or funds. Going back to the initial problem mentioned about not really being able to track any of these... :(

ruralavalon wrote:
Sat Dec 08, 2018 8:12 pm

3) Bonds.
Just about any good credit quality, diversified, intermediate-term or short-term bond fund with a low expense ratio will do the job.

In my opinion PIMCO Total Return offered in your 401k is a good choice for a bond fund. Although actively managed it is a well diversified intermediate-term bond fund with a low expense ratio, and compares well to a total bond market index fund. nisiprius post in forum discussion "Bond Fund for Three-Fund Portfolio", Total Bond Market vs PTTRX?

Morningstar, “Growth of 10k”, "PTTRX vs VBTLX".

Of course Vanguard Short term Bond Index Institutional (VBIPX) (0.04% ER) is also good bond fund to use in your 401k.

Instead you could use Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) ER 0.05% in your Vanguard traditional IRA.
I looked at the PIMCO option again, and it's not actually the Total Return Fund. It's holdings are a mix of PIMCO's institutional funds. While some of the numbers aren't exactly the same (sharpe ratio and std. dev. are different), the performance has roughly ended up the same. Emphasis on has, as it's not managed by the same people at PIMCO that PTTRX is managed by.

ruralavalon wrote:
Sat Dec 08, 2018 8:12 pm
I suggest that you read one or two books on general investing. Wiki article, "Books: recommendations and reviews". When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics. Morningstar, "Investing Classroom". Also take a look at the Boglehead’s wiki, the "getting started" link I give below.
Have read list, in no particular order:
- If You Can
- The Intelligent Investor
- The Intelligent Asset Allocator
- The Millionaire Next Door
- A Random Walk Down Wall Street
- Fail-Safe Investing
- The Permanent Portfolio (the one by Craig Rowland)
- William Bernstein's 4-part series: The Ages of the Investor, Rational Expectations, Skating Where the Puck Was, Deep Risk. (I'm sure I've listed them in the wrong order here)
- Bogle's "Enough"

Problem right now is more that I've read too much, and am trying to sort through all the conflicting info. As Taylor said, (I'm paraphrasing here) when experts disagree, look towards the middle ground.

To rewind a bit back to asset allocation:
The problem is I have read a lot of compelling, well-reasoned arguments for home-country-biased investing (performance drag from funds having to pay foreign taxes even in a US-tax sheltered account, removes currency exchange rate risks, removes needing to keep tabs on economic cycles of other countries - if going with a PP-esque risk parity approach, anyway). Arguments for owning international are also somewhat compelling, but usually fall into 'buy the haystack' or 'when the dollar collapses' buckets. The Vanguard PDF you linked mentions adding international to reduce the total volatility of the portfolio and 'diversification benefits' (which near as I can tell simply translates to 'own all the things', since uncorrelated assets is covered under the volatility reduction), not for return. For the sake of argument (and this is, naturally, eyes fully in the rearview mirror and not looking down the road ahead), I put in a 50% US / 30% international / 20% total bond against 50% US / 50% total bond - Wellington is included only as a benchmark: LINK

In summary though - 50/50 and 50/30/20 ended up being a wash, with international actually having worse volatility ('risk'). Makes me wonder about the advice in one of the books (Grahams? I don't remember which), suggesting to sit 50/50 stocks/bonds until your first market panic. Could always pull that 'variable portfolio' concept out from the permanent portfolio books for the international exposure (somewhat similar to the core-satellite concept), but that leads to more tinkering and is more or less back to mental buckets and not an overarching plan.

When it comes to fixed income (cash, notes, bills, bonds, 'bond' funds, etc.), I do agree with some of the points in the thread on PTTRX you linked (thanks for that, btw). It certainly does seem to have been one of the good ones. Even the SPIVA scorecard (which is where the dreams of active funds outperformance tend to show up dead) seems to suggest there's potential for a good manager to do well with fixed income. I can sit here and idly wonder why that is (value of the item is actually known, somewhat?), but... horses for courses, probably.

But, this is what I'm trying to shy away from. The incessant need to keep tinkering. Going to give another crack at writing an IPS or at least a plan. Will bump the thread if I have more questions, but thanks again -- given me new things to think about. :beer

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