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No. of Recommendations: 13
From the report:

The first important limitation is that we observe only
client assets held in Vanguard retail accounts. This
rarely corresponds to a household’s entire financial
account wealth. Households in our sample may have
financial assets in banks, in workplace retirement
plans, and with other investment providers...


So someone with 98% stock at Vanguard is not in as risky a situation as it appears, if he also has a pension and/or a healthy sum in cash in banks.

Such as my father, who at age 95 has 100% of his Morgan Stanley account in stocks, but has 2 pensions, Social Security, and enough cash in his checking accounts that he won't need to tap his M.S. assets for another 2 to 3 years.
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No. of Recommendations: 13
From the report:

The first important limitation is that we observe only
client assets held in Vanguard retail accounts. This
rarely corresponds to a household’s entire financial
account wealth. Households in our sample may have
financial assets in banks, in workplace retirement
plans, and with other investment providers...


So someone with 98% stock at Vanguard is not in as risky a situation as it appears, if he also has a pension and/or a healthy sum in cash in banks.

Such as my father, who at age 95 has 100% of his Morgan Stanley account in stocks, but has 2 pensions, Social Security, and enough cash in his checking accounts that he won't need to tap his M.S. assets for another 2 to 3 years.
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No. of Recommendations: 1
That assumes that Vanguard has 100% of investors assets.

I my case, I have a separate stock account elsewhere, and have had CDs (mostly redeemed now) at various banks around the country for a five year ladder of living expenses.

Plus of course, now, SS and a teeny weeny pension from company way back.

Vanguard has half my assets.....

plus, of course, it doesn't show it by age category - a 30 year old is likely to have high stock percent. An 80 year old? Who knows but maybe not so likely.



t.
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No. of Recommendations: 0
with a rocketing stock market - percentage of stocks likely keeps climbing - as folks just sit back and watch things grow.

That's pretty much my plan.....while some non-stock assets have gone up due to drop in interest rates - not as much as stocks have gone up!

Heck, I'm getting to the point I should be spending 5% or 6% of port value a year - and have no clue (in current climate ) how to spend anywhere near that - too many years of LBYM .....

Now, of course, Vanguard does offer brokerage services - which it didn't do five years ago..... if I recall right.

t.
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No. of Recommendations: 1
Now, of course, Vanguard does offer brokerage services - which it didn't do five years ago..... if I recall right.

t.


---------------------

I closed my Ameritrade account and consolidated stocks into Vanguard as another step towards simplifying my investment accounts in retirement. I am far from a frequent trader but if I was, AMT probably was a better place to be. But from what I read recently, AMT has gone down hill, but I was quite satisfied when I had my individual stocks with them.

One thing I got surprised with at Vanguard is worth mentioning. I never have been in a dividend re-investment program with individual stocks. I always let the dividends accumulate into a sweep account and then at some point I would buy some stock, either more of something I already own or something new. OTOH, with mutual funds I always had divs and cap gains re-invested in more shares of the fund.

So when I moved my stocks into the account that previously held only mutual funds, they were automatically enrolled in dividend re-investment. I didn't discover this until after the first cycle of dividend payments did not show up as more cash in my sweep account.

I protested vehemently with Vanguard investor services. They explained that dividend re-investment is a default at the account level in their system. They refused to undo what I think was a error. I could and did make a "no dividend re-investment election" on each individual stock going forward. But now, instead of nice round lots, I have all these fractional shares that irritate me every time I look at my account. Grrrr.
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My asset allocation is way more cash/bond heavy than most 61 year olds. Planning to retire at 61, I actually pulled the trigger a year early, and had prepared for "sequence of returns risk" by increasing cash/bonds to reduce volatility between 60/61 ER and the start of Social Security at age 67 (or later).

That "bond tent" idea came from this board in fact. It's a trade-off between increased average/expected returns and reduced volatility for my own sample size of one.

If I were planning to work until 67, I might be more willing to go stock-heavy. However, I'm glad I was positioned to be able to retire at 60 and take a severance package because the next round of layoffs may not offer as much severance (or any). Planning to work for X years isn't the same as being able to work for that time at the expected salary (due to layoffs) or at all (due to health or disability).
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70% full market index, 20% international index, 10% bonds index. 56 years old. Retirement is very very soon.

Vanguard.
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70% full market index, 20% international index, 10% bonds index. 56 years old. Retirement is very very soon.

Several decades ago I bought equal positions in Vanguard's Extended Market indexer (Total NYSE less the S&P), their REIT indexer, the International indexer, and the short term bond indexer. Last October I closed both the bonds and the International parts - both had vastly under-performed the other two. The bond fund was essentially at my purchase point - didn't even keep up with inflation. I kept the other two.*

In the interim (over a period of decades), I bought some actively managed funds from American Funds. In particular, their New Perspectives and SmallCao World. These two have made us multi-millionaires. I use their Income Fund of America as my "safe" part of the portfolio.

At this point in my declining years, I will be putting more and more into the Income Fund of America - my equivalent of a "safe haven" portfolio.

I have (so far) used the proceeds from the two dud Vanguard funds as "Play Money" to buy a handful of High growth stocks (The first time I have bought individual stocks in several decades). I feel like the guy who fell off the observation tower of the Empire state building. As he passed the 50th floor he was heard to say, "So far so good!" But I am getting tired of that game. Will likely put the money back into the Income Fund of America for safe keeping.

CNC
*The Extended Market and the REIT Indexer have become six- and four-baggers over the decades, but the New Perspectives has out-performed by a lot.

... yes, I sleep like a baby.
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...a 30 year old is likely to have high stock percent. An 80 year old? Who knows but maybe not so likely.

I didn't get around to retiring until the month after I turned 68. I'm 76 now and my allocation is still 88% equities, 9% fixed income, and 3% cash in my brokerage accounts. With two small pensions, Social Security, and VA Disability Compensation; I don't envision major allocation changes over the next four years. However, I might consider expanding my holdings of tax-exempt municipal bonds to reduce income taxes.
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No. of Recommendations: 1
Page 17 -- Extreme asset allocations -- about 15% of account holders over age 65 are running with 98%+ stock

Very misleading and a useless data point because they are assuming all assets at Vanguard.

FWIW, if they looked at DW & my accounts, we would be extreme. But in reality, probably 60% stocks, 35% real estate/side businesses, and 5% cash. Totally different picture.

JLC
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No. of Recommendations: 3
The Extended Market and the REIT Indexer have become six- and four-baggers over the decades,

Interesting. There is virtually no difference between the S&P500 and the Extended Market indexer.
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&a...

and New Perspective Fund® (ANWPX), neither
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&a...
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No. of Recommendations: 10
Now, of course, Vanguard does offer brokerage services - which it didn't do five years ago..... if I recall right.

Sorry, you don't remember correctly. Vanguard has offered brokerage services for much longer than 5 years. It's just that they had brokerage assets in a different account than the mutual fund assets. A few years ago they started consolidating them by account type.

For the longest time, I had an individual 'brokerage' account and an individual 'mutual fund' account for each type of account I owned with them - taxable, T-IRA (rollover) and Roth IRA - so 6 accounts total. Now I only have 3 accounts - taxable, T-IRA (rollover) and Roth IRA, and the accounts hold both individual stocks/ETFs and mutual funds.

AJ
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No. of Recommendations: 1
I found three things interesting.

Page 10 -- the chart showing actual "asset allocation by age" and what Vanguard's Target Date Funds recommend for someone of that age. Actual assets allocations for those age 60+ have up to 30% more stock than the target date portfolios.

Page 17 -- Extreme asset allocations -- about 15% of account holders over age 65 are running with 98%+ stock

Page 50 -- Extreme Allocations and COVID. During the March 2020 28% market drop on COVID fears, people with extreme allocations "stayed the course" and maintained their asset allocation. That has certainly been my behavior over the past 30 years


Not sure what this all shows? Why are they interesting to you?

nag
obviously missing something
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Aw crap. Even Vanguard knows that I'm just average.--tsimi
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Thanks for the link. I ran some numbers

Initial Final CAGR Std. Dev Sharpe Ratio
VFNIX $10,000 $139,963 9.98% 14.78% 0.82
ANWPX $10,000 $164,797 10.63% 14.11% 0.92
CWGIX $10,000 $201,142 11.42% 15.04% 0.97


CNC
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Try that again

Initial Final CAGR Std. Dev Sharpe Ratio
VFNIX $10,000 $139,963 9.98% 14.78% 0.82
ANWPX $10,000 $164,797 10.63% 14.11% 0.92
CWGIX $10,000 $201,142 11.42% 15.04% 0.97


CNC
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No. of Recommendations: 3
CWGIX: "Max Front End Sales Load 5.75%"

Wow, I didn't realize that there were still load funds around.
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No. of Recommendations: 2

Now, of course, Vanguard does offer brokerage services - which it didn't do five years ago..... if I recall right.


Vanguard Brokerage started in 1983. (I looked it up because I knew I had a brokerage account with them in the 90’s).

https://www.investopedia.com/vanguard-review-4587932
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CWGIX: "Max Front End Sales Load 5.75%"

Wow, I didn't realize that there were still load funds around.


Yup. All of American Funds' stuff has a load. The load drops down significantly and quickly as you accumulate a stash. They also allow one to sign a "Letter of intent" (You agree to buy XXX amount over the next year or so for a reduced load.) We haven't paid a load in so long I had forgotten about it. I think I may have paid 3.25% on my first purchase of $50K. But a) it was a long time ago, and b) my memory is faulty.

CNC
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CWGIX: "Max Front End Sales Load 5.75%"
Wow, I didn't realize that there were still load funds around.
-----------------------
Yup. All of American Funds' stuff has a load. The load drops down significantly and quickly as you accumulate a stash. They also allow one to sign a "Letter of intent" (You agree to buy XXX amount over the next year or so for a reduced load.)

-----------------------
Same with MFS Funds. And with Class A shares it's the same 5.75%. I had some Mass Investors Growth Stock Fund (MIGFX) shares for 50 years or so. A $100 gift from my grandmother that grew to over $9,000 in that 50 years. And I never put any more new money in it. I thought about it, but that big a front-end load talked me out of it. I sold it a couple of years ago when it was the 2nd-to-last thing I had that wasn't in a brokerage account. (The last thing is shares in a local bank in a nearby city, but that's a family connection.)

Bill
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A lot of the load funds tend to be found in small companies' 401K plans. I guess to minimize costs they avoid Fidelity/Vanguard/Schwab and instead go with places like Empower/SmartRetire/Mass Mutual which seem to have costly funds for the employees.

I've been looking at a job offer and that is one annoyance with them. Although since I don't plan to stay more than 2-3 years I can try to ignore those fees and hope to find a fund or two not too painful.
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A lot of the load funds tend to be found in small companies' 401K plans. I guess to minimize costs they avoid Fidelity/Vanguard/Schwab and instead go with places like Empower/SmartRetire/Mass Mutual which seem to have costly funds for the employees.

When I was at Boeing the IRA included the Fidelity Low Priced Stock Fund and Contrafund. I had both (and very satisfied). When I left Boeing those funds were closed to new investors (Which I was, as I had to change from my company IRA), so I had to find some other place for my money. That's how I would up with American Funds.
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No. of Recommendations: 2
CWGIX: "Max Front End Sales Load 5.75%"
Wow, I didn't realize that there were still load funds around.


That, plus US stock funds with an annual fee of greater than one percent. What do people think that they're getting for that load or that annual fee?

I know Dave Ramsey gets a lot of knocks around here because this is a select group of money-conscious people, although I think he's helpful to most average in-debt people. But, one of the dumbest things I hear from him is to plan on 10% to 12% returns from "good growth stock mutual funds," which you can find by looking at the prospectuses and finding ones that returned that much in the past.
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That, plus US stock funds with an annual fee of greater than one percent. What do people think that they're getting for that load or that annual fee?

If memory serves, the management fee for New Perspectives is ¼%.

CNC
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From what I see American Funds tend to have a variety of classes of shares and fees.
https://www.capitalgroup.com/individual/what-we-offer/share-...


New Perspectives:

Annual Management Fees 0.37%
Other Expenses 0.14%
Service 12b-1 0.25%

So that is a total of 0.76%

I didn't see a buying fee for this one but didn't look long. Morningstar does have it rated highly.
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I agree & have used VG's brokerage services that have been around for longer than 5 years (1983 courtesy of MEK).

Maybe t is thinking about VG's Personal Advisory Services that basically turns your account over to VG's advisors for active portfolio management. That service did start about 5/6 six years ago. Their yearly mgmt fee is .3% of AUM: (cheap, cheep! for active mgmt). Somewhere, a bit ago, I remember reading they don't do too bad vs passive indexing (maybe M*).


<snip> *Charges up to 0.3% of your balance annually (around $150 a year for a $50,000 portfolio), with no other fees.</snip>

https://investor.vanguard.com/advice/financial-advisor/
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