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Old 07-12-2009, 08:22 PM   #1
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All Fixed Income Portfolio

Interesting commentary. Got me thinking that maybe this would be a good time to have about a 100% fixed income portfolio, at least for the next year or two. I am now retired at 75.

Time for Income: Time for Bonds? -- Seeking Alpha?

What do you think? If you agree, what would you hold?
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Old 07-12-2009, 08:38 PM   #2
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I think it is interesting commentary. And it might be dead on. Or not. That's why I (retired, age 62) choose to not fully believe any financial prognosticator and keep a mix of investments. I figure it's better to be half right than 100% wrong.
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Old 07-12-2009, 08:45 PM   #3
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Agreed. I'm near 50/50 and expect to stay that way indefinitely. I don't know what's going to happen, nor do I think anybody else does. I like the probability for a "half right" outcome. I also like good yield on my equities, so I get some income in case we wait 10 years for growth again.
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Old 07-12-2009, 08:47 PM   #4
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The half wrong can be devastating, even with a diversified portfolio. There was little uncorrelated last 2 years except treasuries. Also, I am 13 years older than you so I might have looked at it differently at your age. We are in for some tough times and looking for ways to maneuver the minefield of investing.
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Old 07-12-2009, 08:51 PM   #5
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What about all those financial gurus who are predicting hyperinflation? What if they are right instead of this guy? Are you ready to step up to the roulette wheel and let it all ride on red or black?
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Old 07-12-2009, 08:59 PM   #6
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Maybe this is more in line where to be.

Two thirds fixed-income panacea for retirement security? - The Wealthy Boomer

"research from Russell Investments Canada Ltd. that concludes an adjusted portfolio mix of 65% fixed income to 35% equities can best protect against investment "sequence risk" and "help retirees from outliving their wealth."
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Old 07-12-2009, 09:00 PM   #7
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I would likely increase my TIP's to 20% of my fixed income portfolio.
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Old 07-12-2009, 09:07 PM   #8
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"research from Russell Investments Canada Ltd. that concludes an adjusted portfolio mix of 65% fixed income to 35% equities can best protect against investment "sequence risk" and "help retirees from outliving their wealth."
Looks reasonable to me for age 75. I'm not too far from there myself - both the age and the allocation.
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Old 07-12-2009, 10:43 PM   #9
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Originally Posted by oldman View Post

Interesting commentary. Got me thinking that maybe this would be a good time to have about a 100% fixed income portfolio, at least for the next year or two. I am now retired at 75.

Time for Income: Time for Bonds? -- Seeking Alpha?

What do you think? If you agree, what would you hold?

I too think deflation will be with us for quite awhile....
and am 100% out of debt and in fixed investments.


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Old 07-13-2009, 12:01 AM   #10
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I am reminded of Joe Dominguez, may he RIP.

I will always be too young to end up living in a commune with other men, "washing off tin foil and Saran Wrap".

"At the time of his death, Mr. Dominguez was living on about $6,000 a year."
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Old 07-13-2009, 09:58 AM   #11
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Looks reasonable to me for age 75. I'm not too far from there myself - both the age and the allocation.
God....you are old.

If I make it to 75, I'm sure I will be 100% fixed. I'm roughly 45/55 now and hoping for a rebound one day. Then I will start trimming equities back. In full thumb sucking mode at the moment.
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Old 07-13-2009, 10:42 AM   #12
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I am reminded of Joe Dominguez, may he RIP.

I will always be too young to end up living in a commune with other men, "washing off tin foil and Saran Wrap".

"At the time of his death, Mr. Dominguez was living on about $6,000 a year."
I take the implication here is that if you have an all fixed income portfolio you will end up living on a small amount similar to Joe Dominguez. He chose to live on that amount of money as a lifestyle choice not from being forced by finances and gave away as charitable donations the overwhelming majority of his money.

Quote:
Michael Toms writes, in New Dimensions,
I recall asking him during a "New Dimensions" program, "Joe, how can you live on so little?" He replied without missing a beat, "How can you live on so much?" I can still remember the mischievous twinkle in his eyes as he said it...
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Old 07-13-2009, 11:01 AM   #13
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I did/do the ancient thing from the early days on this forum:

Pension/early SS times 25 lumped with my portfolio gives me 65/35 fixed income/stock at age 66.

Now the blood letting here is the drop in SEC yield in my Target 2015 and Nowegian widow stocks - which have dropped under 4% SEC yield.

Not going to rush into anything but expect to slowly shift a few deck chairs on the Titanic to shore up my -17% dividend drop.

Probably will grit my teeth and let Target do it's thing while I cut what I can control - expenses 15 to 25%.

Gonna get my cheap bastard groove on and be frugal for a while.

heh heh heh -
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Old 07-13-2009, 07:40 PM   #14
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I'm with REWahoo. Diversification is the only free lunch in finance.

10-yr treasury bonds are yielding 3.3%. The S&P 500 is yielding 3.0% (according to my Bloomberg terminal). Not much of a yield pick up in treasuries. And principal protection? The current 10-yr treasury would lose more than 40% of its current market value if interest rates spiked to 10% (which some folks are calling for). So they ain't exactly riskless, either.
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Old 07-13-2009, 08:11 PM   #15
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About Joe Dominguez...

Quote:
He chose to live on that amount of money as a lifestyle choice not from being forced by finances and gave away as charitable donations the overwhelming majority of his money.
What I had heard, was that as inflation wittled away his real income, he was forced into a lower and lower, and lower, standard of living.

If you or anyone else can find a link to info on his personal finances, I'd be interested to read it. What I had found on him on internet was the same-old same-old of book reviews, "we love Joe's message", etc. etc., but nothing about the other side.

Now, if he really did give away any $ he earned above and beyond the income from his "portfolio", if you could call it that, and willingly subjected himself to ever-more dire circumstances just to prove his original "plan", then I would say "What a guy... a true believer in his convictions".
But I would cringe at the thought of someone following his lead.
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Old 07-13-2009, 08:14 PM   #16
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......Probably will grit my teeth and let Target do it's thing while I cut what I can control - expenses 15 to 25%.

Gonna get my cheap bastard groove on and be frugal for a while.

heh heh heh -
Any chance of establishing a Fish Camp #2 in present state? Ya got a big river to work with, unclemick
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Old 07-14-2009, 01:10 AM   #17
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Many of you have figured out my take on the chances of a generalized, deep and lasting price deflation in the USA. In short, not gonna happen.

Here's someone who agrees.

Beware of Rotting Money - Barrons -- GuruFocus.com
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Old 07-14-2009, 09:37 AM   #18
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Any chance of establishing a Fish Camp #2 in present state? Ya got a big river to work with, unclemick
Nope - in my 'old age' I'm on a hill a big hill a couple miles from the wide Missouri.

Post Katrina - I looked at the flat Kansas side and the hilly Missouri side and opted for Missouri.

heh heh heh -
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Old 07-14-2009, 11:52 AM   #19
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Nope - in my 'old age' I'm on a hill a big hill a couple miles from the wide Missouri.

Post Katrina - I looked at the flat Kansas side and the hilly Missouri side and opted for Missouri.

heh heh heh -
Some things teach such powerful lessons that we aren't ever likely to forget them.

Ha
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Old 07-14-2009, 12:00 PM   #20
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Many of you have figured out my take on the chances of a generalized, deep and lasting price deflation in the USA. In short, not gonna happen.

Here's someone who agrees.
Our economy is based on a mindset where the best way to build wealth is to be a saver among a vast sea of spenders.
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