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Unormal posted:Here's some reading recommendations: Can you fix these links to not be the random walk book
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Dec 18, 2008 18:16
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And that's the beauty of owning the entire world capitalization weighted market, the entire aggregate lending market, and a broad basket of commodities. I don't see an optimization that doesn't rely on backtesting bias that is intuitively better than that. Another caveat being, you are risking quite a bit of money on a 4% real return rate when you could be going on trips and seeing strange new worlds instead of dying of cancer at 62 and having a horde of cash to leave to either no one or retarded irresponsible step children
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Jan 31, 2009 01:56
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I cannot honestly think of a better investment allocation than half in an aggregate weighting of bonds and half in all world capitalization weighted equities. Anything else relies on assumptions on equity vs. fixed income returns as well as "domestic stock" bias.
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Feb 6, 2009 23:23
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What is the feasibility of substituting a junk bond etf for the equity portion of my portfolio? Paging 80k to threadid 2892928 (or anyone else really) =)
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Feb 8, 2009 18:30
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It would be in a taxable account. I consider myself below average at analyzing securities at the moment (and this is being fair, I typically low-ball my aptitude but it's served me well so far) Thanks for the advice
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Feb 8, 2009 20:37
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PIPBoy 2000 posted:Have REITs now fallen so far that it would actually make sense to add them to your portfolio? Vanguards REIT (VGSIX) is yielding over 10% right now. Does that really reflect junk-bond levels of risk? In my opinion, absolutely (to adding them). They are nicely non-correlating and are now priced at a level that pays you for its risk
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Mar 28, 2009 21:24
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Well, I can't give you a ton of math and probabilities to make the decision, but I can say that my rule of thumb is: If I have debt, I focus 100% on that, because without that, how can I justify having savings?
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Apr 21, 2009 00:57
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Are they getting rid of your 401k's or something, or the employer match? Just keep it there. Your earnings will accrue and only get taxed upon withdrawal. This compounding action is a very powerful thing
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May 2, 2009 07:16
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Bob Cthulhu posted:But wouldn't it need to be moved? Or does that just depend on where it's at now? Oh yeah. Since the company isn't paying anyone to sevice the accounts, it'll probably be liquidated and (should be) put it into a rollover ira
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May 2, 2009 17:16
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Father Boddingtons posted:Hey guys, I'd like some opinions on my distributions. When I first started making contributions 4 years ago I didn't really have a clue and just picked some funds. I have since started learning and tried to make some smarter choices. I'd really like your opinions and suggestions for improvement. I'm in my mid 20s so I still have some ways to go until retirement. I use Fidelity since my company has their system set up with them. I don't have the foggiest what all those funds represent, but my guess is that you could reduce your portfolio to 4 or less without any noticeable difference in return
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Jun 12, 2009 15:47
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Personally, I feel that the idea that you should own more stocks at an early age is a byproduct of the 1980-2008 bull market making everyone gush about equity. I keep a 50/50 split in my retirement accounts between VT/BND and then forget about it.
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Jun 22, 2009 14:36
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Diseased Yak posted:So the place I've worked for the last 10+ years is facing hard times, and instead of firing people they've given across-the-board pay cuts, and also completely killed off 401k employer matching. You're limited in nominal 09 dollars to 15.5k a year, so your wife would need to gross around 50k a year to be able to use that contribution without going over. I'm guessing that's the case, but I just want to make sure you guys didn't make a mistake there. Is your company publicly traded? If not, can you easily get a price on it's stock? Company stock is risk-laden and a poor investment without a form of hedge that is beyond most people's interest in money. Does your company allow the sale of the stock at any time? Is there any vested interest system? If you can sell the stock and buy another vehicle, I would immediately do it (as in, like now-now) Are you and your wife's contributions nominally equal in dollar size? If not, considering spreading the burden out equally to avoid any hardship that may result in the case of an unfortunate circumstance (*cough* divorce) On your IRA choice: VTI is a US domestic equity index, so you're exposing yourself to some non-systemic risk by not diversifying beyond the United States. I do this with VT, but it's somewhat thinly traded and a relatively new vehicle. The Noble Nobbler fucked around with this message at 17:29 on Jun 28, 2009 |
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Jun 28, 2009 17:26
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Don Wrigley posted:Likewise, I feel that the idea you shouldn't own more stocks at an early age is a byproduct of the 1998 - 2009 bear market making everyone gush about safety. I can't tell if you disagree with me or not! I'm just challenging the conventional wisdom of stock returns. A book called "Unexpected Returns" contains a nice equity matrix heat map that shows the reality of the past returns given a realistic (ie. human) timeframe for investing. I'm guessing the 0% real return of equity for as much as 30 years at points would be enough to consider diversification beyond any one asset class. The same probably goes for intermediate bonds, I'm sure. I don't see asset allocation as a useful thing beyond it's use to build up reasonably reliable correlations (and that's actually an amazingly powerful thing if you make sure you're not extrapolating too much from the data). My personal portfolio is Gold (GLD), a broad, worldwide, developed and "emerging" equity index (vt), an aggregate of the total bond market (BND), a broader commodity index with tax advantages (DJP), and the real estate market (VNQ) in a ratio of 10%, 30%, 30%, 15%, 15%
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Jul 8, 2009 17:20
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Captain von Trapp posted:Quick question: how did corporate bond funds do in the high-inflation period of the 70s? I'm a little worried about stagflation and am looking into bonds as a lower-risk way to keep up with (and hopefully do a little better than) inflation even if stocks decide to tank again. Hobologist is right about what he said, but to elaborate a bit more, your longer term bonds will be the most affected by the scenario you're describing, so what you really want is something that is more coincident (in a good way) with inflationary conditions. variety is also correct in that you have too many funds. I'd personally ditch USO and get a broader commodity index that represents a larger portion of your portfolio. 5% in OIL is just a novelty and won't have any real affect on performance besides frustrating you during rebalancing
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Jul 11, 2009 16:34
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Happydayz posted:Here's my situation: OK, so we have around 105k here, 25% cash, 55% money market, and 20% equity. This is a really good conservative savings allocation, honestly, and I can see nothing wrong with it other than a lack of a very mild commodity exposure. I always advocate a little exposure to commodities, but it won't make or break you. Some people disagree with even touching commodities. It can be contentious. Happydayz posted:Tax-advantaged accounts: This equity allocation is essentially 40k split into 92% U.S. and 8% international which, to be honest, is pretty bad and exposes you to some unnecessary sovereign risk. I may love this country that I live in, but I don't want to have my retirement resting solely on it's business' performance during the next 30 years. You also don't have any sort of asset allocation in your advantaged accounts, so you're relying on your savings accounts to offset the risk you're taking on here. Because you plan on using that savings for a large purchase in the future, I wouldn't consider it part of your retirement, so I can only suggest you start blending in fixed income to your IRA's and 401k. You'll get various suggestions on mix, risk, and whatnot. My recommendation is at least 25% in fixed income and at most 75%. Personally, I'm 50/50. If I could (ie. if Vanguard would actually offer good commodity exposure), I'd be 40/40/20. Maxed out your IRA contributions yet? You have a lot in savings in proportion to your tax advantaged savings. Something to consider. I hope you found some of this advice useful
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Jul 16, 2009 14:50
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80k posted:-- Hi 80k, I was wondering if you (or anyone else) had input on my asset allocation (taxable account): 30% BND 30% VT 20% DJP 10% GLD 10% VNQ
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Jan 30, 2012 16:24
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bam thwok posted:The important thing to remember is that asset allocation is all about maximizing your risk-adjusted return. It's a negligibly difficult math puzzle where you mix and match investments for their historic returns and standard deviations in different combinations to ensure that, for a given target rate of return, the volatility is as low as possible, increasing the likelihood that you can accurately predict the value of your investments on some future date. I don't really believe in the value of speculation. The impetus behind the choices I made is that the bond/equity situation is such that neither outperforms the other (so I chose equal portions) and the remainder of the portfolio is a value-retaining portion / hedge made up of gold / broad commodities, and REITS.
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Jan 31, 2012 01:02
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