|
Post by retiredat48 on Nov 4, 2023 14:26:48 GMT
retiredat48 , You Said: " FD1000,(my bold added above). Are you kidding. I was the lonesome poster on M* being negative on bonds and balanced funds with high fixed income percentages...such as VWINX Wellesley Fund. I took a lot of heat for this position. I was a little early, but those who exited saved a bundle of money. And if one exited and bought growth stock funds, you are way ahead!" How did they save a bundle of money by exiting? Since your call in late 2011 IIRC, VWIAX has a CAGR of 5.38 and an SD of 6.55. Not so bad in my book for a very conservative balanced fund. Of course one could always make more in any number of funds, but generally at a much higher SD than 6.5. ?? You saved money by REDUCING YOUR BOND EXPOSURE , when returns were pitifully low and the subsequent selloff in bonds due to rising rates occurred. And you didn't put this in MM Funds earning zero. You bought OTHER stock funds and other higher yielding fixed income assets. And if you wanted to reduce the bond side, you did not have to ALSO sell off your stock side, like happens with selling balanced funds. I have posted often that I encourage others to SEPARATE their bond side from the stock side investing in their asset allocation makeup. To me, balanced funds have outlived their usefulness; but I am OK with those who grew up investing this way keeping doing so. Just like on fido forum the vast majority of investors posting there are above age 65 and grew up picking individual stocks to invest in. IMO this is the "old fashioned way" and younger folks should now be focusing on buying funds and ETFs. No need to pick individual stocks. But am OK if one did this their whole life and wants to continue (Of course we tend to hear only of their winning stock picks!) R48
|
|
|
Post by retiredat48 on Nov 4, 2023 14:33:12 GMT
again, since you say this is your largest holding, it only makes sense to also say what % of your total pie that amount is. another thing: your underlined use of the word 'unless' suggests, perhaps, that you're one of the few to have owned FSPTX since inception. if that's the case, lucky (and/or smart) you! flipperxxx,...Hi It's not bragging...it's what happened. I know of no other person who has owned FSPTX since inception; but I'm sure they exist. Please post if so. It is not important what percent of pie my holding of FSPTX is. Just like I still hold VWELX Wellington Fund owned since 1953!! But do note my youngest daughter, who had an IRA started for her at age 12, for a decade, about 38 years ago, has owned FSPTX and it is 85% of this approx $350,000 portfolio size. We continue to "hold." She has her own other IRAs and 401.Ks as well to balance this out. R48
|
|
|
Post by FD1000 on Nov 4, 2023 16:25:26 GMT
Of course size matters. I used to own SGIIX but when it stopped working I sold it years ago and left 1+ shares. Do you know how much it's worth now? about $100
So, what % is it out of my millions? 0.00
On the other hand if tech was 30% of your stocks (=SPY), it mattered.
I used to own over 20 funds with min shares just in case. In the last couple of years only several are left.
|
|
|
Post by habsui on Nov 4, 2023 18:50:44 GMT
Please continue the discussion about whether 2 or 15 funds are better. So helpful.
Some people only trade bonds funds and control risk by trading. Others use different assets such tech stocks, treasuries, with less trading.
So even just owning 10% tech stocks that are up about 50% YTD will meaningfully impact overall return (especially when compared to a bonds only portfolio).
Good investing..
|
|
|
Post by rhythmmethod on Nov 4, 2023 21:05:53 GMT
Okay - I'll play a round. VTI 40%, PIMIX 50%, PDI 10%. PIMIX +PDI give a better chance of not having to spend down during a flat, or worse, market due to increased income. Don't watch the TR of your 10% in PDI. Just spend the $. The portfolio is to serve you, not win a race. Good luck.
|
|
|
Post by FD1000 on Nov 6, 2023 0:26:59 GMT
Please continue the discussion about whether 2 or 15 funds are better. So helpful.
Some people only trade bonds funds and control risk by trading. Others use different assets such tech stocks, treasuries, with less trading.
So even just owning 10% tech stocks that are up about 50% YTD will meaningfully impact overall return (especially when compared to a bonds only portfolio).
Good investing..
Some investors discuss a lot funds that are only 1-3% of their portfolio.🫣🫢
|
|
|
Post by habsui on Nov 6, 2023 1:54:17 GMT
Please continue the discussion about whether 2 or 15 funds are better. So helpful.
Some people only trade bonds funds and control risk by trading. Others use different assets such tech stocks, treasuries, with less trading.
So even just owning 10% tech stocks that are up about 50% YTD will meaningfully impact overall return (especially when compared to a bonds only portfolio).
Good investing..
Some investors discuss a lot funds that are only 1-3% of their portfolio.🫣🫢 Exactly. There is no evidence that multiple funds necessarily decrease performance. Many investors have a baseline asset allocation that they adjust based on whatever criteria. This can be done with few/many funds.
|
|
|
Post by catdog on Nov 6, 2023 2:44:36 GMT
Wasn't it Retired Limo Driver who called it "diworseification"
catdog
|
|
|
Post by roi2020 on Nov 6, 2023 5:46:17 GMT
It's generally preferable to have fewer funds. This approach will often decrease overlap and reduce portfolio maintenance. There is no "right" number of funds for everyone since this will depend on an investor's circumstances. Investors with several different account types (taxable, 401k, Roth, HSA, 529) may select the best funds available in each account which could potentially increase the total number of funds in a portfolio.
|
|
|
Post by mozart522 on Nov 6, 2023 14:32:36 GMT
retiredat48 , You Said: " FD1000,(my bold added above). Are you kidding. I was the lonesome poster on M* being negative on bonds and balanced funds with high fixed income percentages...such as VWINX Wellesley Fund. I took a lot of heat for this position. I was a little early, but those who exited saved a bundle of money. And if one exited and bought growth stock funds, you are way ahead!" How did they save a bundle of money by exiting? Since your call in late 2011 IIRC, VWIAX has a CAGR of 5.38 and an SD of 6.55. Not so bad in my book for a very conservative balanced fund. Of course one could always make more in any number of funds, but generally at a much higher SD than 6.5. ?? You saved money by REDUCING YOUR BOND EXPOSURE , when returns were pitifully low and the subsequent selloff in bonds due to rising rates occurred. And you didn't put this in MM Funds earning zero. You bought OTHER stock funds and other higher yielding fixed income assets. And if you wanted to reduce the bond side, you did not have to ALSO sell off your stock side, like happens with selling balanced funds. I have posted often that I encourage others to SEPARATE their bond side from the stock side investing in their asset allocation makeup. To me, balanced funds have outlived their usefulness; but I am OK with those who grew up investing this way keeping doing so. Just like on fido forum the vast majority of investors posting there are above age 65 and grew up picking individual stocks to invest in. IMO this is the "old fashioned way" and younger folks should now be focusing on buying funds and ETFs. No need to pick individual stocks. But am OK if one did this their whole life and wants to continue (Of course we tend to hear only of their winning stock picks!) R48 Your assumptions are based on what YOU would do. But what you would do entails more risk based on SD. Some retirees who have "won the game" may not need or want more risk based on speculating when and where interest rates may go. You seem to be always on full throttle, but some of us are comfortable taking what Mr. Market gives us in our chosen Stock/bond allocation. So from where I sit, VWINX will do very well when rates begin to fall on both the bond side and the high dividend equity side. And someone starting with 100K in 2012 would have had 13.8K income available in 2022. Full disclosure: I do not own VWINX but I respect what it has provided for investors over the years and believe it will again, probably right about the time a stock heavy portfolio crashes. Finally, our old friend El Lobo is doing quite well with his 100% bond Vanguard high yield fund. Different strokes.
|
|
|
Post by retiredat48 on Nov 6, 2023 14:55:22 GMT
Hi @ mozart522, Fair enough, but to be clear: --I am not a trader. My exiting the standard issue , vanilla bond funds, was once in 55 years of investing; of course the USA and world got to the lowest in rates in 4000 years, with zero percent and negative rates, for a long time, once in 55 years. --You stated: " But what you would do entails more risk based on SD". How did/does going into Money Market Funds and very short term bond funds, provide a larger standard deviation, SD?? SD to me was reduced. --You discuss a crash with a stock-heavy portfolio. I am approx 60/40, and with highest cash position in my investing life in MM Funds and short term bond funds. I would not call this a stock-heavy portfolio. --I try to provide guidance to a broad base of investors. I discussed what I did in a post because you commented on my situation and personal strategy. R48
|
|
|
Post by FD1000 on Nov 6, 2023 15:34:41 GMT
Some investors discuss a lot funds that are only 1-3% of their portfolio.🫣🫢 Exactly. There is no evidence that multiple funds necessarily decrease performance. Many investors have a baseline asset allocation that they adjust based on whatever criteria. This can be done with few/many funds. Research proves that. In most cases, more funds = more trades and more trades = more underperformance. It's a known fact that buy and hold of simple indexes + maybe a few managed beat trading. What is the right number of funds? when you go over 10 it's too many. Sure, some can do well with 20, but most will not. There is no reason to have many funds and I will stop commenting on that. We agree to disagree.
|
|
|
Post by retiredat48 on Nov 6, 2023 15:58:23 GMT
FD...What is the right number of funds? when you go over 10 it's too many.
I had a link to a graph of a study Vanguard did, showing that one achieves about 98% diversification with 10 funds. Vgd stopped linking to it so can't show the chart. Takeaway is no need to own more than ten funds. I am guilty of owning more.
R48
|
|
|
Post by mozart522 on Nov 6, 2023 20:27:14 GMT
Hi @ mozart522 , Fair enough, but to be clear: --I am not a trader. My exiting the standard issue , vanilla bond funds, was once in 55 years of investing; of course the USA and world got to the lowest in rates in 4000 years, with zero percent and negative rates, for a long time, once in 55 years. --You stated: " But what you would do entails more risk based on SD". How did/does going into Money Market Funds and very short term bond funds, provide a larger standard deviation, SD?? SD to me was reduced. Moz in bold: I was discussing someone who was 100% VWINX. Someone with 10% or so doesn't lose much or make much in that scenario. Unless you went 100% to ST bonds and MM which I'm sure you didn't. Remember, the story of the two sons who were told to go 100% VWINX?--You discuss a crash with a stock-heavy portfolio. I am approx 60/40, and with highest cash position in my investing life in MM Funds and short term bond funds. I would not call this a stock-heavy portfolio. But you would agree it is heavier than a 100% VWINX, more risk, and higher SD?--I try to provide guidance to a broad base of investors. I discussed what I did in a post because you commented on my situation and personal strategy. OKR48
|
|
|
Post by retiredat48 on Nov 7, 2023 0:39:58 GMT
mozart522 , posted: Remember, the story of the two sons who were told to go 100% VWINX?--------------------------------- Ah, I sure do remember! Send me a PM...what was your posting name on Morningstar? BTW Moz, I don't view volatility as a big issue for the stock side of retiree allocations. Volatility comes with better longer term returns. One primary reason to hold stock funds is to beat inflation if it becomes large. Volatility comes with the territory. And if one is concerned about volatility, then lower your stock side allocation percentage. As retirees, I just view it as, having been thru so many bear markets, I am vaccinated against the fear. MY AGE FIFTIES THREE DAUGHTERS ARE GOING THRU THIS. As their portfolios get larger and larger, they realize they have up/down days of plus or minus a couple thousand dollars. This takes some getting used to. R48
|
|
|
Post by FD1000 on Nov 8, 2023 0:05:27 GMT
Lowering stock % lowers volatility in most cases, but for over 20 years I have been switching funds and/or finding great risk/reward funds. Example PRWCX,SGIIX,OAKBX,FAIRX beat the SP500 by a lot during 2000-2010. And since 2010, if your portfolio was diversified with EM, and Value it did worse than just the SP500.
|
|