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Post by Bobpa on May 24, 2021 12:45:37 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery?
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Post by retiredat48 on May 24, 2021 17:02:04 GMT
Hi Bobpa..
I don't understand your logic?
If you "have enough", why is the goal to dampen volatility. Volatility is built into retirement Safe Withdrawal Rate" portfolio longevity. If you can't meet SWR safe takeouts annually, you do not yet have enough.
Rather...how about HEDGING YOUR PORTFOLIO STRATEGICALLY, against adverse outcomes...such as high inflation; or diminished dollar; or high interest rates adversely affecting bonds/fixed income. You invest for mitigating these. IOW after you have the second million, do not invest to double to 4 million. Rather, hedge the first 2 million.
Another is to INVEST FOR YOUR HEIRS. That is, have a stock/bond allocation that your heirs (children) currently have. And no children, invest as heirs such as Colleges do...higher percent equity.
Lastly...dance with who brung ya. That is, keep your same investing profile/allocations that got you to the excellent place of having enough.
I try to accomplish ALL OF THE ABOVE.
Good luck...
R48
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Post by rhythmmethod on May 24, 2021 17:14:12 GMT
Bobpa, I might and do, put more in balanced funds, VWIAX, VTMFX, VGWAX, FMSDX as a core and use explore for your stock choices. Not a recommendation, just my comfort level.
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Post by steadyeddy on May 24, 2021 23:59:15 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery? Bobpa, I am moving more into shorter-term bond funds and TIPS funds. Also reducing equity stake. The higher the market goes the lower I make my equity %. This is a topic near and dear to me so would be interested to learn more about your thoughts/experience.
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Post by fred495 on May 25, 2021 4:24:17 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery? As a retired and somewhat conservative investor, I am in the camp of chang/Admin who once said that "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". Here are some excellent low volatility funds you may want to check out: ARBIX (SD=3.06), CTFAX (SD=6.98), FMSDX (10.55), JHQAX (SD=7.88) and VWINX (SD=7.56). Good luck, Fred
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Post by Mustang on May 25, 2021 12:31:00 GMT
Bobpa , I might and do, put more in balanced funds, VWIAX, VTMFX, VGWAX, FMSDX as a core and use explore for your stock choices. Not a recommendation, just my comfort level. This is what I did as I approached retirement. I got rid of separate stock and bond funds and moved more into balanced funds. I also believe an investors withdrawal strategy will influence the choice of investment. Wanting to live off of only interest and dividends requires different investments than dynamic or fixed income withdrawal strategies. Unless the retiree has a lot of discretionary spending that can be cut when the market falls then volatility is a concern. If you don't have a lot of discretionary spending its a little difficult living off $25,000 per year when your expenses is $50,000. This is just an example but research has shown that some dynamic withdrawal strategies will provide less than planned income almost half the time.
I am also a believer in simplification. We went from 8 funds to one moderate-allocation balanced fund (American Funds Balanced Fund) in our traditional IRAs. Since MRDs are a dynamic withdrawal method income from it will vary from year to year. We went with two funds in our brokerage accounts: Vanguard Wellesley to reduce volatility and Vanguard Wellington to provide a little growth. We are going with a fixed withdrawal method (4% Rule) to ensure we can pay our bills. The money will be withdrawn each year from the fund that performs the best. Research has shown that this method is one of the best for longevity and growth.
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galeno
Commander
KISS & STC
Posts: 221
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Post by galeno on May 25, 2021 13:29:53 GMT
We KISS and STC. 2 fund port. 4.0% AWR. 50% TWSM + 45% TWBM + 5% CASH.
We hold the same equities / FI allocation as the 2020 Vanguard Target Retirement fund.
Our port has a net yield of 2.0%. The other 2.0% comes from selling shares.
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Deleted
Deleted Member
Posts: 0
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Post by Deleted on May 25, 2021 13:59:31 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery? Pension+SS covers my expenses and then some, so I am am holding OEF munis in taxable along with about a dozen CEFs of various types. The CEFs are volatile but the OEFs not so much. In RIRA, there are two bond funds and an international equity fund. I've picked what I believe to be well managed funds and avoid reacting to price fluctuations. With so much printed and now mined assets with eager buyers, I doubt any downturn will last long.
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Post by Bobpa on May 27, 2021 13:41:41 GMT
I keep retuning to these words of wisdom. "The whole point of investing is achieving your financial goals, not beating the market."
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Post by xray on May 27, 2021 18:48:57 GMT
Bobpa, Ditto Live Long and Prosper....
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Post by Chahta on May 27, 2021 19:31:49 GMT
I am in the position that the OP states. But I cannot stand by and figure out how to stay safe. I am actively trying to increase risk as the market allows during corrections and other buying opportunities. About the best one can do is have an AA that suits you and work the plan for a SWR.
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Post by steelpony10 on Jul 12, 2021 21:48:45 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery? Once we reached our investment goals, assured income beyond our needs and growth if Mr. Market cooperates as a backup plan that projects to last to age 90+, we stopped investing. As of the last few years we cleaned up our portfolio leaving us with 3 index funds, 10 CEF’s and our largest holding, a national muni fund. Our only single stocks remaining are MSFT, AAPL and AMZN. I’ve always looked at volatility as a buying opportunity or a perfect time to make changes. So I learned to like downturns. Now with CEF income assured and everything else on reinvestment I now have to learn to back off such opportunities. Volatility is a psychological problem then. You back off to what doesn’t bother you too much. What did you feel during 2020 and what do you need to do to make adjustments? Our indexes decreased 30+%, CEF’s decreased about 25%, muni about 10% overall portfolio value about 25%. That was a major downturn to me. The mother of long recoveries was 1999-2010. You have to have a plan B. Ours is a 40+ year old muni and CEF income even if they cut payouts. Depending on equities can be hazardous. You’re putting your financial well being under someone else’s control.
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Post by xray on Jul 12, 2021 23:53:53 GMT
Welcome aboard steelpony10, Your: That was a major downturn to me. The mother of long recoveries was 1999-2010. You have to have a plan B. Depending on equities can be hazardous. You’re putting your financial well being under someone else’s control. Most of us went to Plan "A" during the 2008/2009 crisis but we still believed that in disaster there is " OPPORTUNITY". Many of us did very well in buying back into the market after the crash [2009] when we were all cash [from 2008]. All investments can have their dividends cut in a continuing down market. However, always however's, we all should know when to get back in based on "analysis" methodology developed by all of us. Many of us always plan on a 2% cut in current portfolio dividends for any down market [short term always expected]. We are a financial nation and our existence is dependent on the market itself to survive [IMHO]. Any crash cannot prevail even if it takes many years to return to profitability [similar to 1929-1941].... Someone else's control is really [in effect] our control through proper analysis and following our investments. The old adage for investments prevails: "For every 5 investments in our portfolio's, 2 will perform beyond our expectations, 1 will be to our expectations, 1 will be below our expectations, and 1 will probably be traded/sold in a [forward ending] 6 month period.... One single opinion of the many I am sure... Live Long and Prosper....
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Post by jongaltiii on Jul 13, 2021 0:24:02 GMT
I keep retuning to these words of wisdom. "The whole point of investing is achieving your financial goals, not beating the market." Unless your investing goal is to beat the market or SPY for financial reasons. Cheers. PS: I understand what you meant. . .
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Post by FD1000 on Jul 15, 2021 4:11:13 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery? You might want to quantify your goals a bit more. You are not alone in your search and the task isn't easy. You can forget about buy and hold. You can use core and explore. You already got several good funds: VWIAX/VWINX=easy core fund and maybe your highest % CTFAX + FMSDX=2 other good choices WBIAX/WBALX+EXBAX=2 more choices 40% VWINX + 30% in each (CTFAX + FMSDX) OR 30% VWINX + 20% each (CTFAX + FMSDX) + 15% each (WBALX+EXBAX)
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Post by oldskeet on Jul 15, 2021 14:00:44 GMT
Hi bobpa,
In answer to your question. "What funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery?"
As I age I am moving more money into hybrid type funds which now account for about 45% of my overall portfolio. For me, I have capital limits as to how much money I will put into any one fund which is currently threshold at $50k for each hybrid type fund with there being two exceptions for my two oldest funds owned (FKINX & AMECX). I have owned FKINX since the age of 12 (1960) and AMECX which I have owned since the mid 70's.
In my hybird income sleeve I hold twelve funds. They are AZNAX, BAICX, BCSAX, CFIAX, DIFAX, FISCX, FKINX, FRINX, INPAX, ISFAX, JNBAX & PFANX.
In my domestic hybrid sleeve I hold four funds. They are ABALX, AMECX, FBLAX & LABFX.
In my global hybrid sleeve I hold three funds. They are CAIBX, GAOAX & TIBAX.
Through the years, I have trimmed my position in both FKINX & AMECX electing to do nav transfers into other funds within the same family of funds and I also used some of the income generation coming from these sleeves to expand the footprint of other sleeves and funds while I was in the accumulation phase of investing. In addition, I have received gifts and inherited assets through the years which have now grown through time to a sizeable multi account portfolio.
Now being in the distribution phase of investing at age 73, going on 74, with about 65% of my invested assets being held in taxable accounts I have to be tax wise on how much taxable income I have for if I sell to much due to realized capital gains I get pushed into a higher tax bracket and also wife and I could be subject to higher medicare premiums.
So, while you question seems simple in nature it can become complex for some to make wholesale changes to their portfolios, which is the case for me, to accomplish what you seek and your question suggest.
With this, I plan to continue to move forward with my portfolio configured much as it is and increasing its footprint through capital appreciation and reinvesting excess income generation back into the portfolio tweaking around the edges. In addition, I keep about 15% to 20% in cash and can buy during the downturns and dips so I don't fear the downdrafts as much as some. As a matter of fact, I welcome them for they present, from my perspective, good buying opportunities.
Wish all ... "Good Investing."
Old_Skeet
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Post by rhythmmethod on Jul 15, 2021 14:31:45 GMT
As you move up in age and you have what for you seems to be an adeqaute amount of resources, what funds are you inclined to move into to dampen volatility and insure yourself from any major downturn and forgo having to wait for a long recovery? Once we reached our investment goals, assured income beyond our needs and growth if Mr. Market cooperates as a backup plan that projects to last to age 90+, we stopped investing. As of the last few years we cleaned up our portfolio leaving us with 3 index funds, 10 CEF’s and our largest holding, a national muni fund. Our only single stocks remaining are MSFT, AAPL and AMZN. I’ve always looked at volatility as a buying opportunity or a perfect time to make changes. So I learned to like downturns. Now with CEF income assured and everything else on reinvestment I now have to learn to back off such opportunities. Volatility is a psychological problem then. You back off to what doesn’t bother you too much. What did you feel during 2020 and what do you need to do to make adjustments? Our indexes decreased 30+%, CEF’s decreased about 25%, muni about 10% overall portfolio value about 25%. That was a major downturn to me. The mother of long recoveries was 1999-2010. You have to have a plan B. Ours is a 40+ year old muni and CEF income even if they cut payouts. Depending on equities can be hazardous. You’re putting your financial well being under someone else’s control. Just noticed your post steelpony10. Good too see you here, and welcome. I enjoy your posts.
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Post by steelpony10 on Jul 15, 2021 18:02:58 GMT
Commodore Chahta , Captain rhythmmethod . Don’t take me too seriously, I’m just a lowly street wise ensign. Pick the low fruit and move on, don’t dally. Survival School 101.* *edited per the Commodores request below. You’re going hate me your excellency but PONAX didn’t make the most recent cut. It all got rolled into VTI (VTSAX) last year with some into CEF’s. It became hard to justify a 3.6% yield while stocks and CEF’s were taking such a hit. Seems to have worked so far.
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Post by Chahta on Jul 15, 2021 18:09:04 GMT
Good to see steelpony here too. Not indenting paragraphs now? Any one that likes PONAX/PIMIX is OK with me.
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Post by oldskeet on Jul 15, 2021 18:15:10 GMT
Good to see steelpony here too. Not indenting paragraphs now? Any one that likes PONAX/PIMIX belongs here. Old_Skeet holds PONAX in his income sleeve with about an 8% weighting. As the old saying goes ... "If you have a key then the door is yours."
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Post by Capital on Jul 15, 2021 22:01:11 GMT
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Post by steelpony10 on Jul 15, 2021 22:40:31 GMT
Capital, It’s always good to be seen especially by a commander in case I need an alibi.
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Post by chang on Jul 15, 2021 22:43:53 GMT
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Post by steelpony10 on Jul 15, 2021 22:52:55 GMT
chang , Well most senior of members there is some nuance to being seen when used strategically. Like telling my wife where I was, being greeted, then slipping out leaving no one to answer how long I was there. Tipping risk in your favor so to speak. Of course sometimes you get wounded. Those people could have waved from behind cover. Lol.
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Post by jongaltiii on Jul 15, 2021 23:32:45 GMT
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Post by Chahta on Jul 21, 2021 22:47:45 GMT
Commodore Chahta , Captain rhythmmethod . Don’t take me too seriously, I’m just a lowly street wise ensign. Pick the low fruit and move on, don’t dally. Survival School 101.* *edited per the Commodores request below. You’re going hate me your excellency but PONAX didn’t make the most recent cut. It all got rolled into VTI (VTSAX) last year with some into CEF’s. It became hard to justify a 3.6% yield while stocks and CEF’s were taking such a hit. Seems to have worked so far. So you are just taking income straight from the CEFs? It used to be CEFs ---> PONAX ----> income out.
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Post by steelpony10 on Jul 22, 2021 0:04:53 GMT
Commodore Chahta , Captain rhythmmethod . Don’t take me too seriously, I’m just a lowly street wise ensign. Pick the low fruit and move on, don’t dally. Survival School 101.* *edited per the Commodores request below. You’re going hate me your excellency but PONAX didn’t make the most recent cut. It all got rolled into VTI (VTSAX) last year with some into CEF’s. It became hard to justify a 3.6% yield while stocks and CEF’s were taking such a hit. Seems to have worked so far. So you are just taking income straight from the CEFs? It used to be CEFs ---> PONAX ----> income out. Chahta , Yep you’re correct. At the moment I’m still in the simplification stage. I’m back to just CEF’s for monthly income in excess to needs with that excess going to VTSAX(VTI) which is auto invested monthly. So rolling the dice instead of using PONAX. A compound calculator still projects our needs to be covered until age 90 as a couple with CEF income only without any spend down. Everything else keeps rolling on reinvestment except for an occasional large purchase to supplement cash We’re both showing some mental deterioration at this point so I’m trying to stay ahead of that and future investing mistakes. So no more trading here. I forgot how you have your portfolio set up if you have tried to dampen volatility yet.
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Post by rhythmmethod on Jul 22, 2021 17:29:29 GMT
So you are just taking income straight from the CEFs? It used to be CEFs ---> PONAX ----> income out. Chahta , Yep you’re correct. At the moment I’m still in the simplification stage. I’m back to just CEF’s for monthly income in excess to needs with that excess going to VTSAX(VTI) which is auto invested monthly. So rolling the dice instead of using PONAX. A compound calculator still projects our needs to be covered until age 90 as a couple with CEF income only without any spend down. Everything else keeps rolling on reinvestment except for an occasional large purchase to supplement cash We’re both showing some mental deterioration at this point so I’m trying to stay ahead of that and future investing mistakes. So no more trading here. I forgot how you have your portfolio set up if you have tried to dampen volatility yet. steelpony10 , I like your posts and basic no - nonsense approach. I especially like having an income sleeve and a growth sleeve. I do wonder about the highlighted above, however. I view CEFs as rather high maintenance. Am I wrong in your view? I've seen those things unwind faster than a high speed yoyo. Do you worry in a time of less mental capacity than currently (you seem pretty sharp to me) that just when your CEFs need attention you are incapable of it. Or do you just take the $ and not worry about price. Distributions can be cut, by a lot, perhaps. As I start to prepare my geezer port I wonder about these questions. Stay well...and sharp!
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Post by Chahta on Jul 22, 2021 20:37:57 GMT
So you are just taking income straight from the CEFs? It used to be CEFs ---> PONAX ----> income out. Chahta , Yep you’re correct. At the moment I’m still in the simplification stage. I’m back to just CEF’s for monthly income in excess to needs with that excess going to VTSAX(VTI) which is auto invested monthly. So rolling the dice instead of using PONAX. A compound calculator still projects our needs to be covered until age 90 as a couple with CEF income only without any spend down. Everything else keeps rolling on reinvestment except for an occasional large purchase to supplement cash We’re both showing some mental deterioration at this point so I’m trying to stay ahead of that and future investing mistakes. So no more trading here. I forgot how you have your portfolio set up if you have tried to dampen volatility yet. My approach has been to go to 45% equities last year. I have UST, ST bond funds not doing much. But they offset equities and the somewhat "black boxes" of PIMIX and PTIAX. I am very much still in growth mode though. No need to use the IRAs until I am forced by RMDs in 3 years. Also using munis in the taxable account and a HY muni (FD1000 made me do it ) for fun in the IRA. Not sure if all this adds up to lower volatility, but I am gaining ground.
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Post by steelpony10 on Jul 22, 2021 21:18:12 GMT
rhythmmethod , We took all available greatly depreciated 30 yr old dividend stocks in a TIRA, about 40% of our PV, and invested the proceeds in greater depreciated, 30%+, CEF’s during the bank crisis. So in times like these we’re in the black. About 12% after 12 years. Perfect for a TIRA to control RMD’s. Now all growth is in a taxable account making cap gains discretionary. A 40% investment was set up yielding around 8-9% (in normal times) calculated out to cover our theoretical income needs to age 90 based on a 3.5% inflation rate (for slop). We banked all the excess income from there, the last 12 years into PONAX at that time. So we have about as much stashed as we’ve spent up to now. Recently I switched PONAX to VWAHX so I could auto invest there for possible greater return instead of PONAX which delays taking HY CEF’s as RMD’s for years which helps further delay adding to taxes permanently. As buy and hold investors we just tweak now and then. The payouts can vary but we have a reserve by now as mentioned and have invested in some managed CEF’s. In 2020 equities plunged 30%+ and CEF’s 20-25%+. That was the last time I added all available cash. You never get used to that but that’s how it’s been since I started. Investors come back at some point. Investing isn’t a hobby or interest just a problem to solve for us. As of now everything is on reinvestment or auto invested so I’ve set up a portfolio for someone who isn’t too sharp already. Lol.
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