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  • What is your asset allocation?

    I am currently 100% equities - mainly domestic LCV and SCV.  Looking to add about 60% Intl SCV and some EM.

    Majority of my assets are in tax deferred. My rationale is to at least reach our annual salary earnings in investments and then dial back to 80/20. Reasonable?

     

     

  • #2
    What will you use to buy equities when the market drops?

    Comment


    • #3




      What will you use to buy equities when the market drops?
      Click to expand...


      There is no guarantee bonds will rally in a market drop as there have been periods of positive correlation and conditions were similar to today, ie both asset classes being expensive. Though they likely would, the degree is not likely to be what it was in the past and almost guaranteed to not be of equal magnitude.

      Everyone has to deal with draw downs. Better to accept a certain level or have another plan of attack.

      As for me I am far more tactical than likely anyone on this forum so my specific allocation can change next week, as it did last week.

      Retirement: Current 60/40 stocks (alt etfs)/bonds. Will likely put bond portion to work somewhere, but didnt have a specific place for it at the time so thats where it went.

      Taxable: 100% equities/options

      I forgot about our rental, though I currently hate it due to a some what nightmare tenant.

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      • #4
        I am roughly 60:30:10 (equity:bond:cash), across multiple taxable and non-taxable accounts, with tilts to small cap and value. My equity piece is roughly 70:30, US:Intl, and the international is about 70:30 developed:emerging. Some of the assets are not easily categorized, but they are relatively small percentages and track most closely with bonds.

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        • #5
          Roughly 70% equities 15% rental investment real estate, 15% bonds/CDs.

          Taxable 70/30. Retirement accounts 90/10.

          If I sell the rentals, I'll probably maintain 80/20 until about 5 years to retirement, then build a bond tent of up to 40-50% in the years surrounding retirement to protect against sequence of returns risk, then follow a rising equity glidepath into (hopefully) old age.

          I think if an accumulator goes with bonds it is helpful to hold both long term bond indexes to diversify in times of less than expected inflation and short term treasuries to rebalance during downturns rather than just a single total bond or intermediate index bond fund.

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          • #6
            100% equities except for cash.

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            • #7
               

              70% equities (75% US total market 25% total international)

              30% bonds (25% total bond in tax deferred, 75% int term tax exempt in taxable)

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              • #8
                60 / 20 / 10 / 10

                US Stocks / International Stocks / REIT / Bond

                So 90 / 10, essentially. Full details including which funds I use and asset location here.

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                • #9
                  33% us stocks

                  33% international

                  33% bonds (mostly intermediate term munis)

                  Yes it's probably overly conservative compared to what everyone else seems to be doing. But we plan on working full careers into (hopefully) our late 60s. We supersave (40 to 50% of gross) and don't spend a lot relatively speaking (<$100k annually)

                   

                  Given all that, we do expect that asset allocation to bring us to the finish line

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                  • #10




                    100% equities except for cash.
                    Click to expand...


                    How old are you? How fund(s) do you hold in equities?

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                    • #11







                      100% equities except for cash.
                      Click to expand…


                      How old are you? How fund(s) do you hold in equities?
                      Click to expand...


                      i know the internet is somewhat anonymous, but i feel like age is a personal question.  however in the spirit of sharing and since money is probably even more personal than age, my wife and i are closing hard on 50.  i'm not sure what the second question means.

                       

                      i literally learned what a boglehead was this week.  i'm not an advanced investor like you guys.  i do what makes sense to me, and a lot of that isn't what i think most of the board would choose to pursue.  possibly for good reason.   :P

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                      • #12










                        100% equities except for cash.
                        Click to expand…


                        How old are you? How fund(s) do you hold in equities?
                        Click to expand…


                        i know the internet is somewhat anonymous, but i feel like age is a personal question.  however in the spirit of sharing and since money is probably even more personal than age, my wife and i are closing hard on 50.  i’m not sure what the second question means.

                         

                        i literally learned what a boglehead was this week.  i’m not an advanced investor like you guys.  i do what makes sense to me, and a lot of that isn’t what i think most of the board would choose to pursue.  possibly for good reason.   ?
                        Click to expand...


                         

                        Sorry, I meant "what funds" not "how" funds, i.e. do you own a Total Stock Market index fund? etc. I was just curious about age since a 100% equity portfolio is aggressive, especially for someone around age 50, in my opinion. I didn't mean any offense. I'm learning more every day myself!

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                        • #13
                          no offense taken about age.  

                          I read that you are a resident.  As time passes, you will see lots of divergence of opinions and have lots of opportunities to decide for yourself what you think is optimal.  if you are like me, you will find that stuff you thought was 100% for sure will turn out not to be, and miss out on lots of opportunities.   I could write a book about stupid decisions, but I at least try and learn from them.  It is lucky that WCI exists now, because over the years as I have pondered trying to learn about high net worth management opportunities, most of the books I read I realized didn't really apply to physicians who have almost permanent high earning potential and were by nature extremely risk averse.  What I determined was that as long as you saved a lot, mistakes could be overcome.  As long as you had your health and could work, your family would be financially secure.

                          When I was a resident I really didn't want to spend time on this stuff.  I wanted to devote my energy to patient management.  at those times, you had to walk to the library to photocopy articles and a lot of time was spent doing useless crap before residency hour rules applied.

                          I started with a lot of index funds.  Never once looked at the expense ratio.  No idea about small cap or international.  They didn't have target funds when I started.  Saved a lot.  Didn't get divorced.  Lived through stock market crashes without sweating them.  We had low rate student loans, so we did not rush to pay them off.   In fact we still have one left, interest rate 0.9%.  Kept saving a lot.

                          As the years passed, we accrued sizable accounts--without any bonds or real estate or exotic investments--index funds.  Once my nest egg was set, I moved on to try and pick individual stocks--with the idea that index funds would not let me hit home runs.  I don't think it is that easy to pick stocks, so I decided to try my own strategy.  I looked at a ton of fortune 500 stocks.  This was before iPhones and even internet was not that prevalent (and I was at the library already-see above).  I decided that I would invest money that didn't have any time frame where I would need to sell for other emergencies.  So some stocks I noticed would cycle low and then presumably either the company or some big funds would scoop them up.  I waited and bought and held and would sell later when they went high enough (hard to define).  Most of the time the holds are for years or longer.  I'm in the highest tax bracket, and i'm investing taxable accounts, so the first few years I stupidly sold too quickly.  Tax laws and rates were different then too.  Anyhow, I've been lucky as the 2008 offered a chance to pick up many stocks at a discount and lots of opportunities to sell at a profit.  I've never taken any money out of the account, so sometimes my biggest problem is paying the taxes from my other disposable income.  That's what they call a good problem to have.

                          By way of full-ish disclosure, my wife and I make and save a ton (although it seems like most of the people on the board make crazy ****************** money and maybe i'm deluding myself), we have state pensions that guarantee income more than we are likely to need in retirement (some would argue state pensions are effectively a bond), we have large 403 and 457 which will have RMD, both have max social security, we have roths that we created in residency (starting salary was under 30k then and we both had significant educational loans but we saved) in roth anyway (this was the first year roth was created i think), we early on set aside money for annuity which currently would pay us 4k per month until we die if we took it now, and saved for 529s as a personal priority.

                          So this stock investing was just extra money that I couldn't figure out what to do with.  it grew so quickly there was never any time to get into bonds.  i hate headaches so i would never own rental property myself, and REIT don't know enough about to feel comfortable. Anyways thee plan has worked out very well for us.

                          as far as I can tell, the collective wisdom of the site says reit bad for taxable account, bonds bad for taxable account.  i guess i can get some for my roth accounts, but the stocks have been doing fine and for me (and only me possibly) i don't think i need to balance the risk.  my investment horizon hopefully is still decades and there is plenty of life insurance for the kids should something else happen.  how much do those 529 plans need anyways?  we have almost 400k in for two kids age 11 and 6 and my wife's job offers half tuition waiver for both at any instate public school.

                          i just this week learned what bogle head was because i was trying to figure out how to get better interest rate on my cash.

                          the theme of this week:why i hate/love the internet

                          question: what savings account should i use

                          course of events:  internet research

                          I will use ally savings.  no capital 360 will give me $200 plus essentially the same rate.  no, stop ally has 11mo CD with better cd rate with no penalty for early withdrawal.  that's probably better since it seems everyone loves ally customer service (i hate headaches).  no wait, there's a post from some dude name white coat investor which says high tax bracket people should use some money market muni vanguard fund.  okay, i'm about to send vanguard a check, but wait, he says he found a new fund which is better.  all this for a savings account.  

                          I'm clearly a minority on this board.   I am willing to sell stocks if they start crashing again.  I've got a lot of paper profit.  Certainly there has been a rising stock market the last several years and it is easy to be overconfident.  However, I feel comfortable being the odd sock in the drawer and that I can make adjustments as needed.  I will read the boglehead forum and am contemplating investing some money but i'm not sure what the goal is--i would be trying to limit downsides in a stock market crash.  Therefore I guess I would be focusing on bonds and REIT rather than more index funds???  But if there is a crash, I feel like cash is a good thing to have.  For me it would likely be perceived as a buying opportunity.

                          Also I have no real interest in retiring early.  I might be too old to be considered an early retiree for all I know.  I still love seeing patients and working full time--about 2200 hours per year from another thread, although like many others, I also contend that my specialty call hours should be counted.  I make more money than I ever thought I would make, more in one month than dad made in a year, so I feel blessed about my opportunities.    We donate to charities and I give a fair amount to local students who work hard, although not in an organized fashion like WCI.  We live in a college town and we have a medical school and residents, so plenty of poor but bright minds for whom $1000 means a lot.   Biggest risk for me and wife is health.

                          Maybe I could make more by doing smarter or better investing.  But I'm happy and feel like I have a clear direction in my head.  At least I did until I started looking at savings accounts.  

                          I'm sure this is more than you wanted to know.  I hope life smiles on you as it has on me.

                           

                           

                           

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                          • #14
                            Hey hoping to get some advice/critique of my current asset allocation. 31y, married, finishing fellowship. Really can't answer, "how much do you need to retire?" or "when do you want to retire?". At this point I only know I don't want to work forever and I don't need an expensive lifestyle.


                            REIT: 10
                            Bonds/cash: 10
                            Ttl International equity index:30
                            Large cap index: 10
                            Mid cap index: 10
                            Small cap ind:10
                            Value index: 20

                            Is this reasonable going forward?

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                            • #15


                              Is this reasonable going forward?
                              Click to expand...


                              Yes.

                              It's basically a four fund portfolio with the US stock market broken down for a small value tilt, which is pretty much what I've got.

                              Rebalance occasionally and let it ride.

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