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Author: zorba777 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Rip Van Winkle Portfolio Date: 3/22/2004 12:22 AM
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The March 2004 issue of "Money" had an interesting article... setting up an investment plan to be effective for the next twenty years, that would need only minimal maintenance and stress cost as well as tax efficiency.... [sounds like the themes i read on these message boards ;-)]

The following portfolios were proposed (only dollar cost averaging and annual rebalancing would be required for maintenance)

TAX-SHELTERED ACCOUNTS
(John Bogle, Founder of Vanguard)

40% Vanguard Total Stock Market Index
30% Vanguard Intermediate-Term Bond Index
10% Vanguard Total International Stock Index
10% Vanguard Inflation-Protected Securities
10% Pimco Foreign Bond D


TAXABLE ACCOUNTS
(William Bernstein, Efficient Frontier Advisors)

30% Vanguard Tax-Managed Growth & Income
20% Vanguard Intermediate-Term Tax-Exempt
20% Vanguard Limited-Term Tax-Exempt
15% Vanguard Tax-Managed Small-Cap
15% Vanguard Tax-Managed International

Other than the well known names, I have very little knowlegde about the other funds... any takers to critique these portfolios?? good or bad...

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39929 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 1:19 AM
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Why is Jack Bogle recommending a Pimco bond fund? I'll bet it has an expense ratio about 4 or 5 times higher than a Vanguard bond fund.

intercst

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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39933 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 10:14 AM
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Asset allocation depends drastically on one's age and years to retirement. With almost half its assets in bonds, this portfolio would be appropriate for a retiree, but not a 40 year old (assuming this is retirement money) who has 20 years of new money to contribute before retirement.

Further, you'd want to move the bonds in the taxable account to the IRA, and the IRA stocks to the taxable account. Stocks lose their preferential cap gains treatment if left in an IRA. At that point you'd no longer need tax exempt bonds.

I'd also mix a CD ladder in with the bond funds, since CDs have more favorable risk/return characteristics at the moment.

I like the fund families, and choice of funds.

Nick

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39936 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 11:34 AM
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I ditto a previous post. Portfolio asset allocation depends on age, years to retirement, expected years in retirement, and desired retirement income.

As far as individual picks, too many funds. Personally don't do bond funds. If I'm wanting fixed income, I'll do a CD ladder. Not too fond of international funds either, go to bigcharts and plot a few graphs, the S&P 500 and international funds almost have a correlation of 1. So, to be the simplest, Vanguard Total Market and CD ladder.

JLC

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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39940 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 11:56 AM
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Nick: Asset allocation depends drastically on one's age and years to retirement. With almost half its assets in bonds, this portfolio would be appropriate for a retiree, but not a 40 year old (assuming this is retirement money) who has 20 years of new money to contribute before retirement.

Ah, but if you are smart, you'll retire at 50.

Actually, the 50/50 Couch Potato portfolio, 50% in Vanguard Total Stock Market Index, 50% in Vanguard Int. Bond fund, has done very well, with little volatility.

The 'bond fund' went up 30-40% to offset the 30-40% in the stock index fund...giving you essentially very little loss during the 2001 drop.

You might wish to stay 60/40 or 70/30 at age 40, if you plan to work another 20 years. or 38 years to age 68 or 69 when you'll get SS, maybe.

Further, you'd want to move the bonds in the taxable account to the IRA, and the IRA stocks to the taxable account. Stocks lose their preferential cap gains treatment if left in an IRA. At that point you'd no longer need tax exempt bonds.

I think the original post was EITHER taxable or tax deferred, not a combination of both.....

Some folks arrived at age 40 with no company 401K, and only a small ability to stash funds in an IRA (maybe only $1000/year for 15 years). So maybe they have a lot of taxable money from selling a house, or inherited $300,000 and need to invest it for retirement.

He put the right kind of bond funds in the right places.

You can mix/match if you have both, holding tax efficient items outside the 401K/IRA, and not worrying so much about it inside the 401K/IRA.


I'd also mix a CD ladder in with the bond funds, since CDs have more favorable risk/return characteristics at the moment.

That is your call. If taxable, you pay up to 36% (?) plus state tax on CD yields, maybe 10% state tax too, taking 46% of your income. You can have CDs inside your 401K/IRA if you want, if allowed.

I got some of both.

What you worry about in the 401K is diversification and long term growth. It matters not about cap gains rate, because you have no idea whether it will still be 15% or 28% in ten or 20 years from now....or even next year if Kerry gets elected.....

t.




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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39942 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 1:32 PM
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The 'bond fund' went up 30-40% to offset the 30-40% in the stock index fund...giving you essentially very little loss during the 2001 drop.

Yes, but what if you look at a longer time period, say 10 years?

I don't know why people use short-term results to justify long-term investment decisions.

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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39946 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 3:01 PM
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Yes, but what if you look at a longer time period, say 10 years?


try 1929 to 1939, or 1937 to 1954......

a balanced portfolio would have saved your buns during the depression.

And may in the future.

There is no guaranteed 'up' to the market.

t.

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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39948 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 3:34 PM
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try 1929 to 1939, or 1937 to 1954......

Actually, had the 40 year old in my example been investing new money in the 20 years after any major stock market crash, he would have done quite well.

Nick


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Author: mjcalab Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39951 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 4:23 PM
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Actually, had the 40 year old in my example been investing new money in the 20 years after any major stock market crash, he would have done quite well.

Sorry but the actual facts are:

1929 to 1949 Return was -3%
1937 to 1957 Return was 3%

Both are after expenses, taxes and inflation.


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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39952 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 4:32 PM
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Sorry but the actual facts are:

1929 to 1949 Return was -3%
1937 to 1957 Return was 3%


Since I specified (twice) that the 40 year old in my example was investing new money in the 20 years after each crash, what assumptions did you make about this new money to arrive at your results? After the crash, how much was he investing each month?

Nick


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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39955 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 5:10 PM
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Nick:
Actually, had the 40 year old in my example been investing new money in the 20 years after any major stock market crash, he would have done quite well.


AH, but if he had been investing 50/50 from 1920 up to 1929, and then hit 1929, and rebalanced his portfolio to 50/50 in 1930, he would be way ahead of someone who had just bought stock along the way.....

IT took until 1954 to recover from the 'bubble of 1929'.......Meanwhile, bonds were chugging along fine, and if you had rebalanced in 1929, you would have made a killing over the next 30 years.

Now what if this person had started in 1920 saving, and then had to retire in 1939 with all stock? too bad....out of money real quick.....if he had put 30-40% in bonds along the way, and rebalanced each year as stocks climbed, come 1930, he would have been VERY happy, and very happy for the next 30 years in retirement after 1940.....

you have no idea if the next ten plus years will resemble 1930-1940, 1937 to 1957 (not good), or even worse 1966-1988......

t.


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Author: mjcalab Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39957 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 5:25 PM
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Since I specified (twice) that the 40 year old in my example was investing new money in the 20 years after each crash, what assumptions did you make about this new money to arrive at your results? After the crash, how much was he investing each month?

My source of data was Crestmont Holdings ( http://www.crestmontresearch.com/content/Matrix%20Options.htm ) I assumed what you meant was he/she invested new money (lump sum)at or around the time of the crash. Obviously my mistake. I gather you mean he/she was dollar cost averaging his/her savings into the market over that twenty year period. Do you know where to look to see monthly data supporting your conclusion?

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39958 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 5:59 PM
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mjcalab asks,

<<Since I specified (twice) that the 40 year old in my example was investing new money in the 20 years after each crash, what assumptions did you make about this new money to arrive at your results? After the crash, how much was he investing each month?>>

My source of data was Crestmont Holdings ( http://www.crestmontresearch.com/content/Matrix%20Options.htm ) I assumed what you meant was he/she invested new money (lump sum)at or around the time of the crash. Obviously my mistake. I gather you mean he/she was dollar cost averaging his/her savings into the market over that twenty year period. Do you know where to look to see monthly data supporting your conclusion?


You'll find monthly data for the S&P500 going back over 130 years to 1871 at this site.

http://www.econ.yale.edu/~shiller/data.htm

intercst


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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39959 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 9:03 PM
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Not too fond of international funds either, go to bigcharts and plot a few graphs, the S&P 500 and international funds almost have a correlation of 1

I'm a big believer in international funds, since if you own just US stocks, you're only getting half the diversification the world has to offer.

I don't own mutual funds, but a year ago I applied this philosophy when investing a large sum of money my Mother had run into. I could have gone 100% with Vanguard's Total Stock Market, but but a good bit in the International Total Stock Market Index as well.

In the past year, the Domestic index is up 42%, the international up 56%. The two funds are not exactly correlated.

Nick



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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39962 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 10:56 PM
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you have no idea if the next ten plus years will resemble

That's true. In fact I have no idea if I'll get hit by a bus tomorrow. But I have to make decisions based on history and my own conclusions.

Recalling a statistic from "Stocks For The Long Run", domestic stocks have outperformed bonds historically over 80% of all 10 year periods, 90% of all 20 year periods, and 100% of all 30 year periods.

Another fact is current interest rates: five year treasuries are yielding 2.7%, actually a negative yield when you adjust for taxes and inflation. And while rates could go lower, it seems more likely to me that they'll rise over the next few years.

So I have these two facts, and I have money to invest that I won't need for 30 years. My conclusion is that stocks are the best investment.

Nick



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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39963 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 11:11 PM
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Recalling a statistic from "Stocks For The Long Run", domestic stocks have outperformed bonds historically over 80% of all 10 year periods, 90% of all 20 year periods, and 100% of all 30 year periods.

Fine, but your premise was you would retire in 20 years, and thus start withdrawals from your nest egg. You got a 1 in 10 chance of being in that 10%. Certainly not 'foolproof'. Your portfolio value on the day you retire sets your 30 year period for SWR.

I wouldn't buy into something with a 10% chance of failure in 20 years.....would you? not when I could cut it down to a lot less by diversification.

And the above statement doesn't tell you how BADLY the could underperform, does it?

Intercst has shown the SWR from all stock is 2.3% for 30 year survival from that point (you live to 90 if you are 40 now, and retire in 20 years).

Another fact is current interest rates: five year treasuries are yielding 2.7%, actually a negative yield when you adjust for taxes and inflation. And while rates could go lower, it seems more likely to me that they'll rise over the next few years.

GOod, so you buy 5 or 10 year bonds, that mature every year in a ladder....or invest new money every year into a 5 or 10 year bond, or buy AAA rated corporates, some GNMA, or some TIPS that protect you against inflation.

And you can get 4.3% on CDs today (ING direct), or 5% or more on corporate bonds. And if they are in a tax deferred account, there is not annual income tax....the compound.....

And who knows, bond yields might outperform stocks. Stocks could be minus 10 percent this year. Yes? And next year too..and the year after.......

So I have these two facts, and I have money to invest that I won't need for 30 years. My conclusion is that stocks are the best investment.<?i>

This voilated your first premise of retirement in 20 years, and that is the point you set your SWR, not 30 years out, unless you have a seperate 10 year bond/CD ladder set aside with a lot of money in it for the 'first ten years' after you retire so you don't touch your all stock
until the 30 year from now point (age 70). In which case, if in a 401K or IRA, you will be forced to take mandatory withdrawals in excess of the SWR to satisfy uncle sam, paying lots of taxes along the way.

SO you want to try again, making withdrawals in 20 years?

And what happens if you have one of the 10 year periods for the next 10 years that is in the 20% underperforming set? And you have no bonds, and your stock holdings come out worse after the next ten years? Where are you then? And then you have another 10 year bad period...then you retire?????


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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39964 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/22/2004 11:36 PM
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Fine, but your premise was you would retire in 20 years, and thus start withdrawals from your nest egg. You got a 1 in 10 chance of being in that 10%.

You are not going to spend all your money in the 20th year, so it would be appropriate to think in terms of longer time periods.

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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39966 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 12:00 AM
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Fine, but your premise was you would retire in 20 years, and thus start withdrawals from your nest egg

Exactly, I start withdrawal in 20 years. I do not take the full amount out in 20 years. Since I am not drawing down my original principal at retirement, just a part of the gains, the money could stay invested for 40 or more years.

I wouldn't buy into something with a 10% chance of failure in 20 years

Nothing's failing in 20 years. There's a 10% chance (if one history is any guide) than one investment will outperform the other in 20 years. Using your reasoning, the bond investment has a 90% chance of "failure" vs the stock.

And you can get 4.3% on CDs today (ING direct), or 5% or more on corporate bonds

And after inflation and taxes (even in an traditional IRA, you have to pay taxes upon withdrawal) my return is zero. My goal isn't a 4% return. It's 30%, and I can only get that with stocks. I want to put my investments to work so I won't have to.

And what happens if you have one of the 10 year periods for the next 10 years that is in the 20% underperforming set

I continue to invest new money. The lower stocks go, the more shares I can get for my dollar. Now, I could be wrong, and stocks could never rise, eventually approaching zero. No one can predict the future. All we can do is guess.

Nick

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Author: mjcalab Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39969 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 1:06 AM
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There's a 10% chance (if one history is any guide) than one investment will outperform the other in 20 years. Using your reasoning, the bond investment has a 90% chance of "failure" vs the stock.

"stock market returns are not actuarial tables" (Investing Today: Look Forward, Not Back http://www.vanguard.com/bogle_site/sp20021022.html) Historically interest rates are very low and P/Es are very high. We have sever social and economic problems locally and internationally. Our government is trying to solve these problems by stealing our savings and we quietly go along as sheep. This is not a prescription for optimism regarding future returns over the next twenty years to say the least.

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39970 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 2:35 AM
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telegraph writes,

Intercst has shown the SWR from all stock is 2.3% for 30 year survival from that point (you live to 90 if you are 40 now, and retire in 20 years).


Actually, that's not true. The 30-year inflation adjusted SWR for a 100% cash portfolio is 2.31%.

Even if you started your 30-year period in Sept 1929, at the market high just before the Crash, the SWR for a 100% S&P500 portfolio is 3.25%.

intercst

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Author: MissouriGup Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39971 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 6:19 AM
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Our government is trying to solve these problems by stealing our savings and we quietly go along as sheep. This is not a prescription for optimism regarding future returns over the next twenty years to say the least.

Man do I agree with this statement! These deficits are crazy and absolutely need to be pared down IMHO. I don't hear either one of the presidential candidates really hammering on this issue either.

Gup

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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39972 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 7:50 AM
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Man do I agree with this statement! These deficits are crazy and absolutely need to be pared down IMHO. I don't hear either one of the presidential candidates really hammering on this issue either.

While these deficits may seem crazy, they still aren't the biggest they have been in relative terms (i.e. relative to GDP). Absolute figures don't have much meaning. I think it is interesting that we *always* seem to be going to hell in a handbasket, and our economy keeps marching forward. You could have always found reasons to back up your pessimism in the past, and you would have always been wrong. The American economy is flexible and incredibly resilient. As long as the economy maintains its flexibility, it should be able to adapt, and we should be okay.

That said, I am still concerned with what our "leaders" are doing. There is plenty of rhetoric coming from both sides about how they want to reduce the flexibility of our economy (although they don't word it like that). They want to raise taxes (except for Bush and some Republicans), increase regulation, and increase protectionism. This will reduce the ability of our economy to absorb the financial mess that the government is creating, and it will make our economy less competitive globally.

Neither the Republicans nor the Democrats are showing anything resembling financial discipline. The current deficits aren't even the big problem. I would expect deficits during a recession and during a war (although Bush is using that as a excuse). However, what really concerns me is the incredibly massive liabilities for Social Security and Medicare that are accumulating. Congress supposedly knows about the difficulty we will face when Baby Boomers begin to retire, so they took the "logical" step of "strengthening" Mediscare, which just means that they added a few trillion in liabilities. That's just great, isn't it?

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39973 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 9:59 AM
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In the past year, the Domestic index is up 42%, the international up 56%. The two funds are not exactly correlated

Go to www.bigcharts.com and plot out the returns of the two indexs. The correlation is not 1 but is close. Not worth the extra fees, IMHO, no matter how small.

FWIW, just about any company is international now. Pick any one from the S&P 500 and chances are it has sales outside the U.S.A.

JLC

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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39974 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 11:45 AM
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Author: yobria | Date: 3/22/04 10:14 AM | Number: 39933
Asset allocation depends drastically on one's age and years to retirement. With almost half its assets in bonds, this portfolio would be appropriate for a retiree, but not a 40 year old (assuming this is retirement money) who has 20 years of new money to contribute before retirement.

If I were the 40 year-old in your example, I would dollar cost average into only an S&P500 Index fund like VBINX until five years before retirement. Then, I would begin to add an intermediate bond fund and a Large Cap REIT fund.

Here is how I would adjust my portfolio as I approached retirement (R):

R-6: 100% S&P500
R-5: 90% S&P500 Index, 5% Bonds, 5% REITs
R-4: 80% S&P500 Index, 10% Bonds, 10% REITs
R-3: 75% S&P500 Index, 12.5% Bonds, 12.5% REITs
R-2: 70% S&P500 Index, 15% Bonds, 15% REITs
R-1: 65% S&P500 Index, 20% Bonds, 15% REITs
R-0: 60% S&P500 Index, 25% Bonds, 15% REITs

The changes as you approach retirement serve to reduce the volatility of the portfolio while retaining as much growth potential as possible, so you arrive at retirement with a portfolio that is capable of supporting the highest safe withdrawal rate. The thing you must guard against when approaching retirement is a portfolio that is highly correlated with the total stock market which, as we all know, can plunge 50% or more in a single year and stay there for decades. If this were to happen to your retirement portfolio right before retirement, it would greatly reduce the safe withdrawal rate. So, you must stabilize it prior to retirement.

The reason that I have added REITs to the picture is that they are only slightly correlated with the S&P500 and nearly totally uncorrelated with the Intermediate Bond market (see William Bernstein's book 'The Intelligent Asset Allocator'). In addition, they have an historical growth rate (too short to be statistically conclusive, however) of about the same as the S&P500. Thus (IMHO) they provide an excellent stabilizing characteristic, and increase the long term safe withdrawal rate. There is not enough historical data to provide statistically conclusive evidence for the 30 year max safe withdrawal rate for this portfolio. However, I believe it to be around 4.5%.

Russ

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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39977 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 3:56 PM
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Go to www.bigcharts.com and plot out the returns of the two indexs. The correlation is not 1 but is close.

Here's a chart of the two funds over the past year:

http://finance.yahoo.com/q/bc?t=1y&s=VTSMX&l=on&z=m&q=l&c=vgtsx

They do look closely correlated at a glance, but look at the y axis- the international fund beat the domestic one by 50%! That is a sigificant difference.

Not worth the extra fees, IMHO, no matter how small

You wouldn't have paid an extra .1% in fees to have increased performance by 20% in the past year?

Also, it's a myth that you get plenty of diversification from multinational US firms. Only a small fraction of US earnings come from exports. There are just so many industries where you're going to lose if you refuse to own non-US companies. Look at digital cameras- if you only own US stocks, you get Kodak. Buy abroad and you get Sony, Canon, Nikon, etc. Same with cars- do you want only Ford, or BMW and Toyota as well?

If the US goes into a steady decline over the next few years, you may lose your job, your home value may decline, bonds may yield 1%, and stocks may crash....and your foreign holdings may be the only thing that performs well.

Nick





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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39980 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 5:56 PM
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Look at this over 10 years. Couldn't find the fund symbols you were using, but close enough for a point. Bottom line, to each his own.

JLC

http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=ADR+sp500&time=&freq=


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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39989 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/23/2004 9:35 PM
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Yep. FYI, the fund symbols (which were in the link I posted) are:

VTSMX- Vanguard's Total Stock Market Index, which covers half the world's equities, and

VGTSX- Vanguard's Global Total Stock Market Index, which covers the other half.

Nick



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Author: jamesmw Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40005 of 76418
Subject: Re: Rip Van Winkle Portfolio Date: 3/24/2004 2:11 PM
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Actually, the 50/50 Couch Potato portfolio, 50% in Vanguard Total Stock Market Index, 50% in Vanguard Int. Bond fund, has done very well, with little volatility.


I thought the 50/50 couch potato portfolio uses Vanguard total bond market index fund for the bond portion of the portfolio.

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