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  • The New Vanguard Portfolio

    Vanguard's marketing is pushing a new portfolio, TSM, TISM, TBM, TIBM. What do you think?
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    Helping those who wear the white coat get a fair shake on Wall Street since 2011

  • #2
    One could do far worse.

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    • #3
      They have been using a mix of the equivalent mutual funds in the Target Retirement portfolios for several years now. The diversity has been good for risk management and the performance has been good, though of course the percentage allocations vary. All in all it seems a reasonable approach.

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      • #4
        I think the primary beneficiary will be the International Bond Market Fund. I am skeptical that volatility will be enhanced by including that as a separate category. AA is a risk management choice. Good luck with the percentages. International Bonds are a different flavor, more risk but not sure if the diversification is actually increasing risk rather than reducing it.

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        • #5
          New how?
          But better than easily what 90% of the population could throw together.

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          • #6
            Too complicated.

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            • #7
              they increased Intl equities and Intl bonds in their funds of funds in 2015

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              • #8
                what is the rationale for having international bonds? Just more diversification? Isnt BND less volatile with a better yield?

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                • #9
                  Read their white paper. I wasn't convinced.

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                  • #10
                    Yep, it looks like international bond fund is something to be sold rather than something to be bought. That said, you could do far worse.

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                    • #11
                      I have some of the international bond fund but have no plans to add to it. I also do not have as much foreign (VTIAX) as vanguard recommends.

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                      • #12
                        This post is timely for me. I have a moderate windfall coming in a week or so. I am thinking about my asset allocation and how to invest the money, as usual with my favorite company, Vanguard. So these funds are as good as any.

                        I find myself with current assets at 30x my annual plush spend. I continue to work, but on my own terms with lots of time for fun spread throughout the year. I conservatively project net worth at 55x spend if I keep working for 7 more years.

                        Current written investment plan is 67/33 asset allocation. Since the market has done so well for so many years, and since I have “won the game”, I am thinking I should adjust my AA to a bit more conservative 60/40 (and of each of these percentages, perhaps 75/25 domestic to foreign. Then when I have assets above 40x spend, I might slowly increase the stock allocation as the asset to spend ratio increases.

                        This would lead me to rebalance now to:
                        45% US stock
                        15% international stock
                        30% US bond
                        10% international bond

                        Then I think this is all perhaps an unimportant intellectual exercise because we already have “more than enough”. Just the same, I need to calculate my asset allocation to invest my windfall. Decision paralysis is not a good option.

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                        • Tim
                          Tim commented
                          Editing a comment
                          Surprised you are recalculating anything because of a moderate windfall or this year’s returns. 67 to 60 isn’t going to move the needle. Merry Christmas, it was a very good year.

                        • Larry Ragman
                          Larry Ragman commented
                          Editing a comment
                          Interesting way to look at it though; that is, what would you really do. In my retirement accounts it would be a no brainer— the TDF. But my wife settled her mom’s estate this year and we looked rebalance our taxable equity funds with Vanguard intermediate term tax exempt. Never really even considered international.

                        • White.Beard.Doc
                          White.Beard.Doc commented
                          Editing a comment
                          I’m not that certain what I will actually do as far as asset allocation in the coming days. Though I definitely do appreciate the discussion. Maybe I should rethink the international bond investment. I currently only have about 1% international bonds.

                          I prefer single asset class funds to target date in the taxable account as it makes it easier to maintain asset allocation without triggering a taxable event. In tax deferred, it doesn’t make a difference because moving assets around is not a taxable event.

                      • #13
                        I'm unsure how one makes money on negative interest rates in Europe. Does the international bond fund include China? Does anyone trust their accounting?

                        I guess I'll do some reading...

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                        • #14
                          It has a low ER but it is still almost triple bnd

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                          • #15
                            Not a huge fan. Within an asset allocation, the bond portion of an allocation is designed to act as a risk and return volatility dampener to the equity portion of a portfolio. Though the cost of international bond is relatively low, I would question if the risk/return metrics provide sufficient value compared to VBTLX (US Total Bond Index - Admiral). At this point, I don't find it compelling to hold international bond index as part of a retirement savings asset allocation.

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