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  • #16
    Originally posted by xraygoggles View Post

    Ur against all bonds in ur portfolio until 5 yrs to retirement? What about cushion, rebalancing during crashes, munis, etc?
    1. Why do you need cushion if you don’t need the funds within 5 years? All that does is dampen returns unless you are psychologically incapable of handling market swings.
    2. Yes, we rebalance during crashes
      • I prefer the terms corrections and bears - which are temporary, don’t care for the connotation of “crashes”.
    3. What about muni’s? Tax tail wagging?
    I prefer to be more disciplined in my use of bonds rather than using a formula. I.e. we use bonds, but only within the context of a plan so that we (client and advisors) will use bonds for their intended purpose - liquidity - rather than as a false sense of security i.e. “investment”. You are a loaner not an owner when you put $$ in bonds.

    No offense intended, but where have you been all this time to ask that question ?
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #17
      Originally posted by jfoxcpacfp View Post
      1. Why do you need cushion if you don’t need the funds within 5 years? All that does is dampen returns unless you are psychologically incapable of handling market swings.
      2. Yes, we rebalance during crashes
        • I prefer the terms corrections and bears - which are temporary, don’t care for the connotation of “crashes”.
      3. What about muni’s? Tax tail wagging?
      I prefer to be more disciplined in my use of bonds rather than using a formula. I.e. we use bonds, but only within the context of a plan so that we (client and advisors) will use bonds for their intended purpose - liquidity - rather than as a false sense of security i.e. “investment”. You are a loaner not an owner when you put $$ in bonds.

      No offense intended, but where have you been all this time to ask that question ?
      Oh I was just curious since that seems unlike the 120-age rule or whatever the number is. Also William Bernstein recs bonds in most stages of life as well.

      I like to muni & chill in taxable personally. Liquidity & safety. Not for income.

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      • #18
        Originally posted by xraygoggles View Post

        Oh I was just curious since that seems unlike the 120-age rule or whatever the number is. Also William Bernstein recs bonds in most stages of life as well.

        I like to muni & chill in taxable personally. Liquidity & safety. Not for income.
        My personal preference when investing is logic. I don't use ROT's unless they make a lot of sense. Or follow Dr. Bernstein, not that I don't think he is very savvy. But that shouldn't be a surprise .
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #19
          1. Yes, we rebalance during crashes
            • I prefer the terms corrections and bears - which are temporary, don’t care for the connotation of “crashes”.

          If you have all your assets in equities, does a "correction" where do you pull money from to re-allocate or buy on a dip. Because most of the time when the market goes down, it typically does across all equities. Domestic and foreign equities are more corelated now then ever before. It only leaves you limited options of riding it out and make no changes. If you have money on a bond or fund , it gives you the option of taking advantages of the drops. Last march was a great time to sell some bonds and buy some stocks.

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          • #20
            Originally posted by Random1 View Post
            1. Yes, we rebalance during crashes
              • I prefer the terms corrections and bears - which are temporary, don’t care for the connotation of “crashes”.

            If you have all your assets in equities, does a "correction" where do you pull money from to re-allocate or buy on a dip. Because most of the time when the market goes down, it typically does across all equities. Domestic and foreign equities are more corelated now then ever before. It only leaves you limited options of riding it out and make no changes. If you have money on a bond or fund , it gives you the option of taking advantages of the drops. Last march was a great time to sell some bonds and buy some stocks.
            We rebalance once a year, same general time. This practice is not market-driven.

            ”Domestic and foreign equities are more corelated now then ever before.” Kind of a random broad generalization, don’cha think? Almost sounds like your opinion. That said, assuming you’re right, you’re also buying low if you want to rebalance during a correction. People seem to forget that.

            Having money in a bond or fund just for the h3ll of it and with no solid plan is not a good IP, impo. Our clients who have bonds and cash have planned that allocation for a specific purpose. We have a client who had just sold a piece of RE in 3/20 and asked if he should buy equities. You can guess what I said (except to add that it might be a couple of yrs before they returned to long-term growth). That’s one of my prouder moments lol.

            To veer off course a bit, it has been very distressing to me this tax season to review multiple CPA clients’ 2020 taxes and see huge sales in 3/20. Honestly, some of them c/h paid for financial planning and advice for the rest of their lives with what they lost. Sickening.
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #21
              Originally posted by jfoxcpacfp View Post
              To veer off course a bit, it has been very distressing to me this tax season to review multiple CPA clients’ 2020 taxes and see huge sales in 3/20. Honestly, some of them c/h paid for financial planning and advice for the rest of their lives with what they lost. Sickening.
              But since the market is again at ATH, can't they sell equities now & offset all those huge capital losses with the huge gains from this past year? No harm, no foul.

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              • #22
                admittedly we're waiting for the tax draw hitting this week for our rebalance last year. House planned in '20 and was significantly overdue for a rebalance in taxable - good chunk went to Munis and paid that price of the run up for rest of '20 AND tax bill now for that safety/security move.

                Yet, it was worth it with large draws upcoming in '20-'21 wouldn't sleep with the volatility of funds needed. It just hurts to see the run up. Offset by the fact the housing market on fire and locked our new house in Sept last year while still owned current - paper gains are tremendous.

                Bulk rebalancing sucks, but it's a good tax to see I suppose.

                Yes, - bonds for safety for <5 year burn buffer plan and cost flow.

                jfoxcpacfp - what's your take on dividend index funds? We've transitioned to a 50/50 dividend/total market for more balanced taxable and using anything thrown off as cash to play with since in FI mode and conservative mode until retirement.

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                • #23
                  Originally posted by jfoxcpacfp View Post

                  We rebalance once a year, same general time. This practice is not market-driven.



                  To veer off course a bit, it has been very distressing to me this tax season to review multiple CPA clients’ 2020 taxes and see huge sales in 3/20. Honestly, some of them c/h paid for financial planning and advice for the rest of their lives with what they lost. Sickening.
                  Was some of it TLH at least? My 3/23/20 sales were really exchanges that saved me in taxes.

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                  • #24
                    Originally posted by billy View Post

                    Was some of it TLH at least? My 3/23/20 sales were really exchanges that saved me in taxes.
                    We TLH only when there is a significant impact or unless the client requests. Otherwise, we follow the process; it works. As I've stated before here, I believe far too much time is spend on annual TLH and portfolio disruptions. But, like RE, it's a popular topic for bloggers.
                    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                    Comment


                    • #25
                      Originally posted by StarTrekDoc View Post

                      jfoxcpacfp - what's your take on dividend index funds? We've transitioned to a 50/50 dividend/total market for more balanced taxable and using anything thrown off as cash to play with since in FI mode and conservative mode until retirement.
                      We focus on the sector, not the style, and follow the plan. Nothing wrong with dividend funds, just not the way we do it. Most important is to implement a plan that works for you and stick to it w/o emotion. If dividend funds are your cup of tea, I'm not going to argue, probably no meaningful long-term impact compared to what we do. I would prolly be a little nervous about 2 funds only, however. Just keep an eye on drift and change to a new fund if one or both veer from the stated goals.
                      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                      Comment


                      • #26
                        Originally posted by jfoxcpacfp View Post

                        We focus on the sector, not the style, and follow the plan. Nothing wrong with dividend funds, just not the way we do it. Most important is to implement a plan that works for you and stick to it w/o emotion. If dividend funds are your cup of tea, I'm not going to argue, probably no meaningful long-term impact compared to what we do. I would prolly be a little nervous about 2 funds only, however. Just keep an eye on drift and change to a new fund if one or both veer from the stated goals.

                        Luckily we are well diversified across pensions, direct real estate and equities
                        Yeah this is just taxable. Our post-FI plan has been a bit of flux trying to find the right landing between spending rampup and balance of retirement/ generational transfer efficiency . Having a fund throwing off cash keeps us on regular spending instead of hoarding

                        ​​​

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                        • #27
                          Originally posted by xraygoggles View Post

                          Ur against all bonds in ur portfolio until 5 yrs to retirement? What about cushion, rebalancing during crashes, munis, etc?
                          Bonds have a purpose. Investment is not one of them. Safety and liquidity only. In essence, you have a planned need for cash and a time frame.

                          Comment


                          • #28
                            Originally posted by jfoxcpacfp View Post

                            We TLH only when there is a significant impact or unless the client requests. Otherwise, we follow the process; it works. As I've stated before here, I believe far too much time is spend on annual TLH and portfolio disruptions. But, like RE, it's a popular topic for bloggers.
                            IM not for the betterment/wealthfront daily TLH styles, my current threshold is at least 1k in losses. But that one day gave me a 4 figure tax loss harvest paper loss that only required vtsax turning into vfiax (total stock into 500 fund for those who dont know the symbols). I'd think being able to carry over the losses for a few years/writing off 3k per year of income was worth logging on for a few minutes that day and basically owning the same stocks. I wouldn't consider the type of TLH POF and some of us on here promote to be disruptive of a portfolio. I do consider the daily ones like how roboadvisors do it to be disruptive though.

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                            • #29
                              Originally posted by xraygoggles View Post

                              But since the market is again at ATH, can't they sell equities now & offset all those huge capital losses with the huge gains from this past year? No harm, no foul.
                              That’s not a disciplined approach. We have chosen to use discipline rather than random techniques at at random times for our clients. It gives the sense of control and the ability to shut out the noise, also important when investing your hard-earned dollars. There are exceptions, such as market correction or bear, but we have chosen those very carefully. Works for us and our clients. And when you are serving many, many clients rather than simply yourself, it allows us to focus on the multiple other areas of planning that require our attention. We can’t be all things to all people and we’ve chosen a path and will stick to it until we find a better way that works.

                              I think it’s important to emphasize that this does not mean that our way is the only way.
                              Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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