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Post by steadyeddy on Dec 14, 2021 23:20:16 GMT
Is there any interest in this close-knit team to come up with an asset allocation using any stocks/OEFs/ETFs/CEFs of your choice? If YES, we can utilize this thread to capture our discussions. Basic proposal is as follows: 1. This is not a contest 2. You propose a portfolio with your rationale - based on market conditions. 3. It does not need to be a buy & hold portfolio for many years - nor is it a trading portfolio. It needs to be relatively stable for 1 year {we will be lucky if it is good enough for 2022 } 3. You can use as many widgets as you deem fit. 4. No need to track buys/sells etc since this is just a proposal of an asset allocation. 5. It does not need to resemble anything you actually own. It is primarily to capture the thought process we each use in coming up with a brand new AA for 2022. If there is sufficient interest on the forum we can continue this thread. Let me know. SteadyEddy
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Post by Deleted on Dec 14, 2021 23:40:16 GMT
I'll do it if others do.
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Post by alvinthechipmunk on Dec 15, 2021 0:16:29 GMT
AA in early retirement, at age 67: PRIORITIES: limit volatility and with downside protection, while still owning sufficient equities to catch a decent portion of market gains. Also, wanting to generate income to a useful amount. We face routine monthly bills, so I prefer bond funds which pay monthly, though I do not INSIST on it--- as with DODIX, below.
THEREFORE: 40 stocks 55 bonds of various sorts 5 cash, to provide dry powder for buying opportunities.
The FED's taper will be in force. In the not too distant future, rates will be raised--- but gradually, even gently. Spending will not let-up. Supply-chain issues will continue. (My local Safeway's deli didn't even have any Genoa Salami for me, yesterday.)
Inflation will remain elevated. Available tools to fight it will---as ever--- be only halfway effective. The pandemic will remain, both because of vaccination shortages, particularly in the shit-hole countries, worldwide; and because stoopid people refuse the vaccination even when it is available. We will be dealing with Covid for years because of inefficiencies and human stubbornness. And of course, corrupt leaders in many places.
SELECTIONS: Equities -sticking with PRWCX, through thick and thin. (Yes, this is a "balanced" fund, not exclusively stocks. And it's still closed to new investors.) -single stock: Glencore GLNCY (ADR.) -single stock WFG. West Fraser Timber (NYSE, not Toronto.) -AFDVX small-cap value.
Bonds: -PRSNX Global, dollar-hedged. -PRFRX bank loans, junk. -TUHYX Junk. -DODIX core-plus.
* I already do own SOME of this; I intend to move into some of it soon; and some of it is wishful thinking on my part. But I've tracked this stuff for quite a while. So, I'm not just pulling stuff out of my ass.
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Post by Fearchar on Dec 15, 2021 0:44:43 GMT
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Post by rhythmmethod on Dec 15, 2021 0:56:17 GMT
I'm in. It would give me an opportunity to create a simpler version of my port that I might track on M*. Good idea!
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Post by Fearchar on Dec 15, 2021 1:23:40 GMT
Here are the JP Morgan tactical ETF models: Sector | Conservative | Moderate Conservative | Moderate | Growth | Aggressive | US Equity | 16.11% | 31.01% | 43.42% | 51.87% | 61.28% | Non-US Equity | 8.27% | 15.75% | 24.24% | 30.22% | 36.23% | US Bonds | 64.27% | 44.35% | 26.35% | 13.54% |
| Non-US Bonds | 6.10% | 4.26% | 2.38% | 1.21% |
| Cash+ | 5.25% | 4.63% | 3.61% | 3.16% | 2.49% |
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Post by steadyeddy on Dec 15, 2021 1:39:17 GMT
@slooow , rhythmmethod , Fearchar , thanks for joining in this exercise. Fearchar , the portfolios you posted from JPM - would those be your suggestion for 2022? I am hoping you would come up with your own cocktail for this exercise. 😁
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Post by Mustang on Dec 15, 2021 2:45:01 GMT
I think it might be difficult to come up with a single asset allocation because of different investment phases, goals and strategies. But I can explain my reasoning. We are currently transitioning from the accumulation phase to the withdrawal phase. Accumulation and withdrawal are night and day different. During the accumulation phase a market downturn is an opportunity to buy. In the withdrawal phase it can greatly increase the probability of failure. A portfolio should be goal oriented. My primary goal is a somewhat stable, sustainable income for approximately 30 years. Secondary goal is to leave a little something for the kids. Simplicity is important because it is highly likely my wife will have to manage it sometime in the future. Numerous studies support Modern Portfolio Theory (Harry Markowitz, 1952). It basically says the portfolio should be diversified with assets that move opposite of one another. That's stocks and bonds. Commodities, gold and other alternatives correlate to closely to stocks for adequate diversification. Other research (starting with Bengen, 1994) show that the asset allocation should be between 50% and 75% stock. Optimum risk research says it should be 60% stock and the rest bonds although parity between risk and returns is achieved with a 50/50 portfolio. For simplicity's sake I have whittled down our portfolio to three funds. Our investment are half IRA and half taxable. A moderate-allocation fund (ABALX) in our IRAs and a moderate-allocation fund (VWENX) pared with a conservative allocation fund (VWIAX) in our taxable accounts. We will be using two withdrawal methods: MRDs (a dynamic method) from our IRAs and a modified version of the 4% Rule from our taxable accounts. The asset allocation in our IRA will be approximately 65/35 stock to bond. Wellington and Wellesley combined make for a 50/50 asset allocation. Why the pairing? Wellington lost 22.2% in 2008 and Wellesley only lost 9.8%. Withdrawals do not come from Wellington in a down market. The IRAs can have a little more risk because of the dynamic withdrawal method. If the fund drops 30% so does the withdrawal. The modified 4% Rule provides a stable income when added to a pension and social security. How we withdraw is as important as the asset allocation. We will take the withdrawal from Wellington or Wellesley based on the highest end of year balance. That is a simplified way of pruning back profits of the best performing fund and it re-balances the portfolio automatically every two to three years. Here is the planned overall asset allocation: stocks 57.8% and bonds 42.2% but it will change depending on what the fund managers do. Historically this portfolio has an 11% 10-year return, an 11%, 5-year return and a 14% 3-year return. Although I think the future will be more like its 8% 15-year return. ABALX (50%) VWENX (25%) VWIAX (25%) OVERALL US Equity 54% 58% 35% 50.3% Non-US Equity 10% 7% 3% 7.5% Fixed Income 28% 32% 58% 36.5% Other 8% 3% 4% 5.7%
Here are what others think of those three funds.: In 2017 Balanced made Morningstar’s fantastic 43 (of 8,000) list. In 2019 US News & World Report ranked it fourth of 715 moderate-allocation funds. In September 2020 they ranked it as one of the “7 Best Balanced Funds to Pick Right Now.” Wellington and Wellesley were both part of Morningstar’s fantastic 43 out of 8,000 funds (2017). Kiplinger (2019) ranked Wellington as one of their 25 favorite funds. U.S. News and World Report (2019) ranked Wellington third out of 715 moderate-allocation funds. In September 2020 they rated both as one of the “7 Best Balanced Funds to Pick Right Now.” In July 2021, The Balance rated both as the best funds for long-term investors.
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Post by Fearchar on Dec 15, 2021 4:42:49 GMT
Here is my spin on the JP Morgan tactical models at differing risk and return levels: Component | Conservative | Moderate Conservative | Moderate | Growth | Aggressive | Sector | Name | VTI | 8% | 16% | 22% | 26% | 31% | US Equity | Vanguard Total Stock Market ETF | VIG | 2% | 4% | 6% | 7% | 9% | US Equity | Vanguard Dividend Appreciation ETF | VFMF | 2% | 4% | 5% | 7% | 8% | US Equity | Vanguard U.S. Multifactor Fund | PRGTX | 2% | 3% | 5% | 7% | 8% | US Equity | T. Rowe Price Global Technology Fund | BRK | 2% | 3% | 5% | 5% | 5% | US Equity | Berkshire Hathaway Inc. | IXUS | 4% | 10% | 12% | 12% | 17% | Non-US Equity | iShares MSCI Total International Stock ETF | DXJ | 2% | 3% | 6% | 10% | 10% | Non-US Equity | Wisdom Tree Japan Hedged Equity ETF | IDV | 2% | 3% | 6% | 8% | 10% | Non-US Equity | iShares International Select Dividend ETF | PIMIX | 22% | 20% | 9% | 4% |
| US Bonds | PIMCO Income Institutional Class | RPHIX | 18% | 6% | 2% | 1% |
| US Bonds | Riverpark Short Term High Yield | MMHAX | 9% | 8% | 7% | 3% |
| US Bonds | Mainstay High Yield Municipal | AGG | 7% | 3% | 1% | 1% |
| US Bonds | iShares US Aggregate Bonds | PDI | 6% | 4% | 5% | 3% |
| US Bonds | PIMCO Dynamic Income Fund | PTY | 3% | 4% | 2% | 2% |
| US Bonds | PIMCO Corporate & Income Ops | BNDX | 6% | 4% | 2% | 1% |
| Non-US Bonds | Vanguard Total International Bond Index Fund ETF | BSV | 4% | 3% | 2% |
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| Cash | Vanguard Short-Term Bond Index Fund ETF | BIV | 2% | 2% | 3% | 3% | 2% | Cash+ | Vanguard Intermediate-Term Bond Index Fund ETF |
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Post by oldskeet on Dec 15, 2021 12:22:01 GMT
My "All Weather Asset Allocation" of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being retired and in the distribution phase of investing. The benefit of this asset allocation is that it provides me sufficient income, maximizes my diversification, minimizes my volatility, and provides me long-term returns. My protfolio is comprised of multiple accounts with the total number of funds held being around fifty.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide me the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback or to take advantage of seasonal investment trends. In addition, cash helps stabilize a portfolio during stock market volatility. Example of investments held in this area are currency, money market mutual funds, FDIC bank deposits and CD's. Generally, this area benefits from rising interest rates.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are AZNAX, BAICX & PONAX .
The 40% held in the equity area provides me dividend income along with some growth, that equities generally provide, which, over time, helps to offset the effects of inflation. Some examples of investments held in this area are AMECX, IDIVX & SPECX.
From their neutral weightings, 40% each for my stock and bond areas, overweights (underweights) are allowed at + (or -) 5% with rebalance thresholds set at + (or -) 2% from desired weightings while cash is allowed to float. Thus the maximum weighting for both stocks and bonds could be as high as 47% each with their minimum weightings being as low as 33% while cash is allowed to float with a weighting range of 6% to 34%. So what seemed, at first glance, to be a very conservative asset allocation does allow for positioning based upon market reads along with some other influencing factors.
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way, I have found, principal grows over time as well as the size of my disbursements. My objective is to continue to grow my principal along with increasing my income stream.
Going into 2022 I will be cash heavy and light in both my stock and bond allocations because of mutual fund capital gains distributions being taken in cash. Currently, within fixed income I am about 50% investment grade and 50% high yield. Within equities I am about 65% value and 35% growth with 70% being in domestics and 30% in foreign. I will adjust from there bsed upon market conditions. Most likely, I'll target my 2022 asset allocation somewhere around 20% cash, 15% fixed income, 25% hybrid income, 25% growth & income, and 15% growth. On the income side of my portfolio because of anticipated rising interest rates I am light in fixed income by 5% and overweight in hybrid income by 5% as there is more flexability for fund mangers to position. On the equity side because of equity valuations I am light 5% in growth and overweight 5% in value.
This above is what Old_Skeet is doing ... and, with this, I am not saying that it is right for others to follow me in what I am doing as we all have different circumstances, goals, needs, desires and tolerance for risk.
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Post by steelpony10 on Dec 15, 2021 12:25:12 GMT
steadyeddy ,@slooow , alvinthechipmunk , Fearchar , rhythmmethod , Mustang , I was in that contest for about two months over at Morningstar before I got kicked out because I apparently didn’t follow the strict monthly reporting rules. To much work. I’m a problem solver investing is not a pastime. VUG, PTY 40% each, VWAHX, 20%. Representative of growth, income and safety. A microcosm of our real holdings that has evolved since the late 70’s to be an all weather portfolio which it has been to date. Thanks mom, uncle Ralph, Mr. Wells and Better Investing for the alternative to spend down and a great retirement except for the masking part which couldn’t be helped. Lol.
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Post by chang on Dec 15, 2021 13:01:42 GMT
I was in that contest for about two months over at Morningstar before I got kicked out because I apparently didn’t follow the strict monthly reporting rules. LOL same here. Couple years ago I picked two stocks on 12/31 and said I would hold them for 365 days — no trades. About halfway through the year they were up 300% and I happened to mention it … next thing I knew, they tossed me out of the contest. Hilarious.
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Post by steadyeddy on Dec 15, 2021 13:11:58 GMT
I was in that contest for about two months over at Morningstar before I got kicked out because I apparently didn’t follow the strict monthly reporting rules. LOL same here. Couple years ago I picked two stocks on 12/31 and said I would hold them for 365 days — no trades. About halfway through the year they were up 300% and I happened to mention it … next thing I knew, they tossed me out of the contest. Hilarious. chang, you are the group owner here. No tossing you or anyone out. As said in the OP, this is not a contest.
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Post by rhythmmethod on Dec 15, 2021 15:34:59 GMT
Spit-balling here. I own all these funds and this is somewhat a microcosm of my port, W/O the individual stock holdings (MSFT, APPL, AMZN, O) that skew my real port more toward growth. Similar to my music influences I'm borrowing from some different approaches, including steelpony10 , and Mustang . Unlike them however, I'm skewing a bit more towards international equities via VGWAX and PRGSX. • Vanguard Global Wellington Admiral 14.78% • Vanguard Wellesley® Income Admiral™ 13.09% • Schwab US Dividend Equity ETF™ 12.69% • T. Rowe Price All-Cap Opportunities Fund 12.07% • Vanguard High-Yield Tax-Exempt Adm 10.92% • Fidelity® Multi-Asset Income 10.63% • T. Rowe Price Global Stock 10.18% • PIMCO Income Instl 7.51% • PIMCO Dynamic Income 5.49% • Artisan Small Cap Investor 2.65%
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Post by steadyeddy on Dec 15, 2021 15:48:05 GMT
Good participation so far. Let us keep it going.
Thanks.
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Post by steadyeddy on Dec 15, 2021 16:01:50 GMT
I will chime in with my asset allocation proposal for 2022 - along with reasoning:
20% US total stock market ETF (example: ITOT; P/E 32) - why: need participation in the US stock market but since valuations are too high/tech heavy index I am limiting to 20% 20% US dividend stocks ETF (example: HDV; P/E 25) - why: need to drive some income along with low valuation stocks to cushion any market downturns 20% xUS Developed stocks ETF (example: IEFA P/E 20) - why: 2021 performance is about half that of US total stock market, and clearly a diversifier 20% Emerg Mkt stocks ETF (example: IEMG P/E 18) - why: 2021 performance is abysmal and most investors are bearish and I believe in mean reversion 20% Select taxable income CEFs (example: PDI) - why: there is optimism due to recent merger of 3 CEFs - this is my least conviction choice, will quickly bail if shif hits the tan
I did not include any vanilla bond funds since I believe 2022 will be an "adjustment year" for interest rates and Fed actions.
I have started a Fidelity Taxable account today with this allocation - date 12/15/2021 - and want to experiment for all of 2022. I will probably keep adding new money here and there.
Let me know your thoughts.
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Post by fred495 on Dec 16, 2021 2:41:37 GMT
As a retired investor, here is my preliminary conservative portfolio model for 2022. It will be finalized in January:
FMSDX......20% JHQAX......30 NVHAX.....10 PDI..........10 RCTIX......30
Portfolio Visualizer's 3-year backtest provides the following results:
CAGR..........10.2% Worst Year....-1.6% SD................7.3% Sharpe..........1.2 Sortino..........1.9
In setting up this portfolio, I kept in mind something that chang posted some time ago: "I don't really need a lot more money - but I certainly don't want to lose a lot. I need to remind myself to err on the side of caution."
Good luck,
Fred
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Post by chang on Dec 16, 2021 4:30:38 GMT
In setting up this portfolio, I kept in mind something that chang posted some time ago: "I don't really need a lot more money - but I certainly don't want to lose a lot. I need to remind myself to err on the side of caution." I thought about that when I rang the cash register on my biotechs earlier this week. I don't mind at all your repeating that ... I need to be reminded of it all the time!
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Post by acksurf on Dec 16, 2021 15:35:07 GMT
I'll play along with what is similar to my retirement porfolio:
VTI - 30% SCHD - 15% JENSX - 10% IHI - 5% QQQ - 5% FMSDX - 10% FPURX/ABALX - 10% VTFMX - 10% Other - 5% (Utilities, Foreign, etc.)
I am reducing FPURX/ABALX, FMSDX but will retain the Vanguard Tax Managed fund. Looking to place the bond allocation as I sell the balanced funds into other diversifiers for 2022. As I am still a ways off from retirement I don't need income. In my taxable, I do have healthy allocations to munis and cash. I hold PIMCO CEFs (PDI, PTY, PDO) in a relatively small Health Savings account.
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Post by racqueteer on Dec 16, 2021 15:54:46 GMT
I'll put in my two cents, but I move around quite a bit; so don't hold me to this for the next year! I also have a pension and SS; so that affects my thinking as well.
I'm currently 30.5 % cash, 22.7% FBALX, 21% PRWCX, 16.2% QQQ, 5.2% VOO, 2.3% FBCGX, bits and pieces of other stuff in tax deferred accounts. I also will have the equivalent of about 10% of that portfolio's value in those 7+% bonds Yogi pointed out to us in taxable. My thesis is that those bonds count toward my cash/bond holdings. I don't want to go out on the risk curve in BOTH bonds and equities; hence my MA funds and cash. I'm low-ish on my allocation level at the moment, and holding tech and communications primarily; hoping for a place to load up. At the moment, I'm content where I am.
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Post by Chahta on Dec 16, 2021 16:13:24 GMT
15% SCHX or VTI 15% SCHD 5% AKREX 5% SCHY 5% VEU 10% RPHIX 10% PIMIX/PTIAX 5% MWFLX 10% MMHAX/NHMAX 5% PTY 5% OSTIX 10% Cash/short term equity trade/muni funds
45% equities for growth. 55% bonds for stability and income to reinvest.
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Post by Deleted on Dec 16, 2021 18:00:05 GMT
MSFT 10% AAPL 10% FB 10% AMZN 10% Googl 10% Vanguard Wellington 20% American Funds New Perspective 15% PRBLX/SCHD 15%
(American Funds new perspective gives me some INTL and Wellington gives me Bonds.)
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Post by saratoga on Dec 17, 2021 2:06:21 GMT
I present a simplified version of my portfolio. Taxable (40%) VOO 15% AVUS 10% SCHD 3% VGT 3% VTV 3% BIAWX 3% VWILX 3% TAX DEFERRED (35%) PRWCX 15% TIAA real estate 10% TIAA traditional 5% FDGRX 5% Roth (25%) PRILX 13% DODGX 7% PRNHX 5% Comments 1. I would prefer to have FDGRX in Roth but for me, it is available only in tax-deferred. 2. I try to invest in broadly diversified stock ETFs for taxable. 3. TREA, TRAD, PRWCX in tax-deferred stabilize the portfolio. RMD from these sources, together with pension and SS provide stable and adequate income. With RMD and its tax implication in mind, these relatively slow growing funds are chosen for tax-deferred. 4. Roth has relatively fast growing stock funds. Roth conversion is effectively accomplished over time without actually doing the conversion.
5. In 2022, I would like to make my portfolio somewhat more conservative than presented here (closer to 70% equity rather than 78% equity here. I have not decided how).
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Post by Fearchar on Dec 17, 2021 3:14:52 GMT
Wow!
There are some very well thought out portfolios here. Thank-you for sharing.
Since it is not a contest, I have gone back and adjusted and edited my earlier post.
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Post by fritzo489 on Dec 17, 2021 3:46:43 GMT
Mustang " Why the pairing? Wellington lost 22.2% in 2008 and Wellesley only lost 9.8%. Withdrawals do not come from Wellington in a down market. With that said , I see returns in 2018 as Wellesley - 2.57 % & Wellington -3.42 % . Not that much difference. Just maybe things have changed ?!
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Post by Mustang on Dec 17, 2021 10:39:08 GMT
Mustang " Why the pairing? Wellington lost 22.2% in 2008 and Wellesley only lost 9.8%. Withdrawals do not come from Wellington in a down market. With that said , I see returns in 2018 as Wellesley - 2.57 % & Wellington -3.42 % . Not that much difference. Just maybe things have changed ?!
This is just one sleeve of our investments. Half are in our IRAs but income from IRAs is erratic, going up and down with market performance. This is the half that is to provide a stable income using the 4% Rule (30-year payout). Stable incomes covers needs. Variable incomes can cover wants.
Optimum asset allocation for withdrawals using the 4% Rule is 50-75% stock. The normal diversification is stocks and bonds because they have a negative correlation and typically move in opposite directions. But bonds aren't returning much right now. Real returns (return less inflation) are actually negative. I have read articles from several experts that have suggested Wellesley Income is a good substitute for bonds. Since Wellesley and Wellington are mirror images of each other paired together they give an over all asset allocation of 50% stock. It's not a perfect diversification but it will work most of the time.
They have upon occasion both lost money in the same year: 2018, 2008, 1974, and 1973. But most of the time one will lose money and not the other: Wellington 2002, 1990, 1977 and Wellesley 1999, 1994, 1987. All of Wellesley's losses were single digits. The worst being 2008. In this time frame Wellington has had three double digit losses. The worst is 2008. The only time that both funds lost money two years in a row was 1973 and 1974.
Wellington is clearly more volatile than Wellesley. Those that seek minimum volatility often invest only in Wellesley or similar funds. But Wellesley's returns have been significantly lower than Wellington's. As of today, Wellington's 10 year return is 11.5% and Wellesley's is 7.8%. The last 10 years have been very good for stocks. For the last 15 years the difference has not been as much: Wellington 8.7% and Wellesley 7.1%. The reason I have paired the two together is Wellington for growth and Wellesley for stability.
Volatility matters. The above returns does not mean that Wellington will always outperform Wellesley. I tested the 4% withdrawal rule (30-yr payout) on both starting in 1971 (Wellesley's first year.). Withdrawals were exactly the same but Wellesley's ending balance was $2.99 million while Wellington's was $1.43 million. The same test using 1990 as the starting date had Wellingon's ending balance at $3.75 million and Wellesley's at $2.61 million. Since I can't see the future pairing them together seems better than picking just one.
We didn't lose in money in 2018 or 2008. You don't lose unless you sell. To counter longevity risk (the risk of running out of money) how you withdraw money is as important as the asset allocation. Darrow Kirkpatrick did a study that showed taking withdrawals from a portfolio that re-balances back to its original asset allocation every year is the worst way to withdraw money. The best way was more complicated than I wanted but one of the good ways was to withdraw from the most profitable fund. I have simplified this in my procedures to withdraw from the fund that has the highest previous year ending balance. This allows the under performing fund to recover. Tests in both the 1971 and 1990 retirement simulations have shown that the portfolio automatically re-balances in two to three years.
No withdrawals will be made in years where both funds lose money. People mistakenly assume withdrawals and spending are the same thing. They are not. We didn't accumulate our investments by spending every penny we earned. It the same in retirement. Like in the bucket strategy we have a cash bucket. That bucket is two to three years of withdrawals. Since withdrawals are planned for the beginning of the year then most likely it will be three years at the beginning of the year and two at the end. Why two years - 1973 and 1974.
Excess withdrawals are stored in cash. If both funds lose money that years withdrawal comes from cash. If by chance three years of withdrawals are in cash (or cash equivalents) at the beginning of the year. No withdrawals will be made from investment anyway. It's not needed.
Yes, three bad years close together can deplete cash. Then it would be necessary to withdraw from the fund that lost the least the year before. I have always been reluctant to keep large amounts of cash. Cash basically has zero return. But in the withdrawal phase it makes sense. It keeps the retiree from locking in losses by being forced to sell during a down market and two years covers the historic worst case.
Getting a stable income from a chaotic income source is a problem. A withdrawal plan needs to mitigate a variety risks (sequence-of-return, longevity, etc.) as best it can. There are more complicated and perhaps better ways of doing this but my wife is likely to end up managing our withdrawals and she has no interested in investment theory at all. That is why I have chosen the most simple approach I can think of.
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Post by fred495 on Dec 27, 2021 3:55:46 GMT
Good participation so far. Let us keep it going. Thanks.
Besides discussing the thought process we each use in coming up with an AA for 2022, will we also be periodically reporting, maybe on a monthly or a quarterly basis, for example, the current composition of our portfolio, the reasons for the changes we have made, and the total returns of our portfolios measured against our needs and expectations? Sharing this kind of information with the group throughout the year would be quite helpful and educational for some of us to become more successful investors. Or, is that not the purpose of this exercise?
Help, looks like I am a bit confused.
Thanks,
Fred
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Post by steadyeddy on Dec 27, 2021 13:02:55 GMT
Good participation so far. Let us keep it going. Thanks.
Besides discussing the thought process we each use in coming up with an AA for 2022, will we also be periodically reporting, maybe on a monthly or a quarterly basis, for example, the current composition of our portfolio, the reasons for the changes we have made, and the total returns of our portfolios measured against our needs and expectations? Sharing this kind of information with the group throughout the year would be quite helpful and educational for some of us to become more successful investors. Or, is that not the purpose of this exercise?
Help, looks like I am a bit confused.
Thanks,
Fred
fred495, what you are proposing makes a lot of sense. The primary purpose of this thread is to share investment philosophies and selections for 2022 given the economic cycle we are in. No hard and fast rules but the more folks participate the better the thread would become.
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Post by fred495 on Jan 4, 2022 20:09:09 GMT
From the perspective of a retired investor, here is my final conservative KISS portfolio for 2022:
FMSDX......20% JHQAX......30% RCTIX.......30% SVARX......20%
Portfolio Visualizer's 3-year backtest came up with the following results:
CAGR..........12.6% Worst Year.....9.6% SD...............5.8% Sharpe.........1.9 Sortino.........3.8
However, since there "are no hard and fast rules", according to steadyeddy, I am still confused as to what the next step will be. In the meantime, I will track my portfolio with M*'s Portfolio Manager and await further developments.
Good luck,
Fred
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Post by steadyeddy on Jan 4, 2022 20:36:54 GMT
I will chime in with my asset allocation proposal for 2022 - along with reasoning: 20% US total stock market ETF (example: ITOT; P/E 32) - why: need participation in the US stock market but since valuations are too high/tech heavy index I am limiting to 20% 20% US dividend stocks ETF (example: HDV; P/E 25) - why: need to drive some income along with low valuation stocks to cushion any market downturns 20% xUS Developed stocks ETF (example: IEFA P/E 20) - why: 2021 performance is about half that of US total stock market, and clearly a diversifier 20% Emerg Mkt stocks ETF (example: IEMG P/E 18) - why: 2021 performance is abysmal and most investors are bearish and I believe in mean reversion 20% Select taxable income CEFs (example: PDI) - why: there is optimism due to recent merger of 3 CEFs - this is my least conviction choice, will quickly bail if shi f hits the tan I did not include any vanilla bond funds since I believe 2022 will be an "adjustment year" for interest rates and Fed actions. I have started a Fidelity Taxable account today with this allocation - date 12/15/2021 - and want to experiment for all of 2022. I will probably keep adding new money here and there. Let me know your thoughts. fred495, I have started an actual portfolio with the above allocation @ Fidelity, and I will periodically post in this thread throughout 2022 the progress I make, including any tweaks to the portfolio.
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