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Re: Another Asset Allocation OUTING
Old 02-14-2007, 08:49 AM   #41
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Re: Another Asset Allocation OUTING

Round 3:

Goal: at least slightly outperform the market long term, moderate value/small tilt, moderate risk tolerance, broadly diversified for periodic rebalancing, with fairly low correlation of the classes:


Vgd Total Stk Idx 45%
Vgd Ext Mkt Idx 10% (or maybe Small Val, though I like boosting midcap, too)
Vgd Value Idx 10%
Vgd Tot Intl 25%
Vgd REIT 10% (DCA in)


(I catch a little large value in Wellesley, which is in my bucket 2, so that piece is actually little higher than shown here.)

I tried to capture the great suggestions made above, though could go a little higher on international. Does it seem to fit my stated goals reasonably well?

Rich
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 09:22 AM   #42
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Re: Another Asset Allocation OUTING

Quote:
Vgd Ext Mkt Idx 10% (or maybe Small Val, though I like boosting midcap, too)
Vanguard's small value index fund (VISVX) holds a fair amount of mid-cap, too, while avoiding the black hole of small-growth.

But generally you look like you are meeting your goals.
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 09:28 AM   #43
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by Rich_in_Tampa
Round 3:

Goal: at least slightly outperform the market long term, moderate value/small tilt, moderate risk tolerance, broadly diversified for periodic rebalancing, with fairly low correlation of the classes:


Vgd Total Stk Idx 45%
Vgd Ext Mkt Idx 10% (or maybe Small Val, though I like boosting midcap, too)
Vgd Value Idx 10%
Vgd Tot Intl 25%
Vgd REIT 10% (DCA in)


(I catch a little large value in Wellesley, which is in my bucket 2, so that piece is actually little higher than shown here.)

I tried to capture the great suggestions made above, though could go a little higher on international. Does it seem to fit my stated goals reasonably well?

Rich
Looks good to me, but what do I know, I only do this for a living...........
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 10:02 AM   #44
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by FinanceDude
Looks good to me, but what do I know, I only do this for a living...........
Hi FD
Run some simulations, and present some ideas to help the man. You are not being paid to laugh man :-) Oh I forgot none of us are etting paid...

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Re: Another Asset Allocation OUTING
Old 02-14-2007, 10:09 AM   #45
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Re: Another Asset Allocation OUTING

Rich:

Could you post the overall numbers? I.e what % this bucket involves; % in bucket 2 and how composed; % in bucket 1 and how composed?
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 10:20 AM   #46
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by donheff
Could you post the overall numbers? I.e what % this bucket involves; % in bucket 2 and how composed; % in bucket 1 and how composed?
Sure. For the uninitiated or otherwise interested, this is a Ray Lucia Buckets of Money format but modified for my particulars, with a healthy dose of early-retirement.org wisdom built in. Don't want this great discussion to digress into a bucket thread, but for the record:

Bucket 1 will hold about 3 yrs of expenses while I am part time, building to 6 when I fully retire well down the road. Mostly short-term federal bonds, MMF.

Bucket 2 will be essentially Wellesley or Wellesley-like, maybe with a dollop of TIPS, and contain about 6 yrs of expenses. Wellesley is roughly 35% dividend stocks and 65% diverse bonds.

Using a 4.25% SWR, that leaves anywhere from 62% (part time FIRE) to 50% (full time FIRE) for stocks in bucket 3. Bucket 3 holdings is what this thread was about.
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 10:30 AM   #47
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by lswswein
Hi FD
Run some simulations, and present some ideas to help the man. You are not being paid to laugh man :-) Oh I forgot none of us are etting paid...

-h
My advice is usually not well-received here, so I generally stay away from these type of topics. However, Rich used to live in Wisconsin, so we have that connection................
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 10:32 AM   #48
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Re: Another Asset Allocation OUTING

Rich:

I've been following this thread from the sidelines. Very good stuff. Your allocation approach is very close to what I'm thinking about. Are you distinguishing between pre tax and tax-deferred in your allocations or are you lumping them all together?

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Re: Another Asset Allocation OUTING
Old 02-14-2007, 11:12 AM   #49
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by FinanceDude
My advice is usually not well-received here, so I generally stay away from these type of topics. However, Rich used to live in Wisconsin, so we have that connection................
dude,

Turn-about is fair play. .

Your thoughts appreciated, though I understand if you just want to stay on the sidelines.

Rich
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Re: Another Asset Allocation OUTING
Old 02-14-2007, 11:13 AM   #50
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by tomz
Rich:

I've been following this thread from the sidelines. Very good stuff. Your allocation approach is very close to what I'm thinking about. Are you distinguishing between pre tax and tax-deferred in your allocations or are you lumping them all together?
Almost all pretax dollars.
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Re: Another Asset Allocation OUTING
Old 03-11-2007, 11:28 AM   #51
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Re: Another Asset Allocation OUTING

I just thought I'd post an epilogue as to where I ended up:

Vgd REIT 10%
Vgd Total Stk Idx 45%
Small mkt idx 20%
Vgd Tot Intl 25%

My philosophy was to basically mirror the market, tilt toward small, use REIT as ballast. I didn't tilt much toward value because my Wellesley adds another absolute 4% big value stocks to the mix (currently residing in my bond-income bucket).

I'll get back to you in 15-20 years.
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Re: Another Asset Allocation OUTING
Old 03-11-2007, 01:46 PM   #52
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Re: Another Asset Allocation OUTING

Hi Rich
While you are at it I would suggest you think and write down the ranges you are comfortable holding these assets, ie are you going to rebalance yearly or will you rebalance only when one of the assets is completely out of whack. You could come up with a model which says you will rebalance REITS +-5% Intl +-10% etc and as long as those are not met you don;t rebalance; Or you could just go on a yearly schedule and bring everything back to targets yearly; I recommend looking into what ranges you are comfortable holding the various asset classes

-h
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Re: Another Asset Allocation OUTING
Old 03-11-2007, 01:56 PM   #53
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Re: Another Asset Allocation OUTING

Quote:
Originally Posted by lswswein
While you are at it I would suggest you think and write down the ranges you are comfortable holding these assets, ie are you going to rebalance yearly or will you rebalance only when one of the assets is completely out of whack. You could come up with a model which says you will rebalance REITS +-5% Intl +-10% etc and as long as those are not met you don;t rebalance; Or you could just go on a yearly schedule and bring everything back to targets yearly; I recommend looking into what ranges you are comfortable holding the various asset classes
Still working and still buying in for now, so I'll rebalance every year or so. I imagine when I finally FIRE (or stop contributing), I'll do a final tweak or two to the allocation. Always open to suggestions, of course.

I am not inclined to rebalance very often, unless something gets way out of whack.
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