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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 06:49 AM   #21
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Re: Another perspective on a high-equity portfolio

Heres Triumph of the optimists in short form -

http://faculty.fuqua.duke.edu/~charv...l_optimism.pdf
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 07:06 AM   #22
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Re: Another perspective on a high-equity portfolio

being the only person at work with an interest in reading about retirement planning , heres what I usually suggest when asked-

Portfolio 1/3 real estate, u.s. stock, international stock + pension and social security
or 1/4 real estate, u.s. stock, international stock, u.s. medium bonds + social security
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 07:17 AM   #23
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Re: Another perspective on a high-equity portfolio

Not bad.

I once made the mistake of posting a topic back when I first found this forum on 'The Perfect Retirement Spot' - living in New Orleans at the time - I had Jimmy Buffett in the back of my brain. Needless to say - I was enlightened by the variety of responses.

Similarly - if you read this forum long enough - the broad spectrum of investments/methods that produced successful ER's may surprise you. It sure did me.

More than one way to skin a cat.

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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 08:01 AM   #24
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Re: Another perspective on a high-equity portfolio

Large portion of retirment in realestate - not including our home. Would you treat this as an equity or a bond?
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 08:16 AM   #25
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Re: Another perspective on a high-equity portfolio

Great topic. I believe in the 100% minus your age theory. I do that with the Vanguard Index Funds (60 bonds, 40 equities). I was 100% equities while I was working. My SS and military pension both are cola'd; mega-corp's is not. I buy I-bonds and assume that in a crunch they would be spent first. When I reach 70, I will probably change the allocation to 70% bonds. For now, let it ride. If this is too conversative, so be it. Sleeping is good.
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 08:34 AM   #26
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Re: Another perspective on a high-equity portfolio

Interesting. I was 100% stocks for a while. My current target is 60/40, but I can't seem to get bonds above 25%...mostly because I'm buying more stock/reit. I can definitely handle the volatility, and going heavier into bonds just doesn't feel right even though with my limited analysis I decided 40% bonds was right.

I don't think you need a decent-paying job, just a job to reduce or eliminate withdrawals to give the portfolio a chance to recover.

This high-equity thread is making me think...
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 08:52 AM   #27
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Re: Another perspective on a high-equity portfolio

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Originally Posted by BigMoneyJim
Interesting. I was 100% stocks for a while. My current target is 60/40, but I can't seem to get bonds above 25%...mostly because I'm buying more stock/reit. I can definitely handle the volatility, and going heavier into bonds just doesn't feel right even though with my limited analysis I decided 40% bonds was right.
BMJ, IIRC you are single and in your 30's. If that's the case, 60/40 seems way too conservative to me.

I have a "roller coaster" theory of asset allocation: The younger you are the more thrill you get from riding the ups and downs of a highly equity weighted portfolio. The older you are, the less you enjoy it and the greater the chance a steep dip will result in heart failure.

I see no reason you would want to have more than 20-25% in bonds, if that much.

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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 09:05 AM   #28
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Re: Another perspective on a high-equity portfolio

The mathematical arguments for a very high stock portfolio are persuasive, BUT...I gotta sleep at night. I'm retired, DH semi-retired, mid-50s, I get no pension, DH will get somewhere between 0 and 1000/month...closer to zero is more likely. So I set up our AA to provide minimum required living expenses--$3k/month at the moment, $1k each from cash, bond interest, and dividends. The additional nice-to-have $2-3k/month will come from Social Security, and SS plus capital gains plus laddered CDs and bonds (and maybe some lifestyle adjustments!) will cover inflation--more or less.
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 09:37 AM   #29
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Re: Another perspective on a high-equity portfolio

Quote:
Originally Posted by Nords

Find your own comfort level on the risk/reward curve, but my parents-in-law have been extremely unhappy these last five-six years with their 100%-bond portfolio.
Nords: *Hope you're not contributing to your parents-in-law unhappiness, by telling them what your all-stock portfolio has been doing.

Hell, at your age with two cola'd pensions, you have the entire spectrum of investing wide open to you, and I have no doubt given your obvious
talent and inclination to devote a lot of psychic energy in this area, you are going to be a very wealthy guy in the years to come. *

I don't know whether your father-in-law has a pension or not, but I do recall he is about my age, *(give or take a few years).

I have noted a lot of young investors, (working)
that claim they have a high tolerence for risk.

Trust me, on this point, that tolerence is ratched down a few notches, if you are in the withdrawel stage, and counting on your funds to last you a lifetime. *(A 40% drop will definantly get your attention).

In any case, for me personally, I can't afford to go completely without equities, but if your father-in-law has a large enough base, and doesn't need equities to allow him to live the way he wants to more power to him.

After close to 20 years of withdrawels, I'm still able to afford green fees. *(The other insignificant things like food, housing, etc., I'm not so sure of).

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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 09:59 AM   #30
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Re: Another perspective on a high-equity portfolio

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Originally Posted by Jarhead*
Trust me, on this point, that tolerence is ratched down a few notches, if you are in the withdrawel stage, and counting on your funds to last you a lifetime. (A 40% drop will definantly get your attention).
I'll bet you don't get on any roller coasters either...

http://early-retirement.org/forums/i...3534#msg103534
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 10:09 AM   #31
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Re: Another perspective on a high-equity portfolio

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Originally Posted by astromeria
The additional nice-to-have $2-3k/month will come from Social Security
I should've said "from SS and/or withdrawals, depending on the year." For now, DH makes enough as a college instructor to keep us near the top of the nice-to-have range, so we aren't hitting on the stash yet.

If we had $2k+ in reliable govt pensions coming to us, I would invest more aggressively. On the other hand, when DH stops working, I may get even more skittish :
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 10:54 AM   #32
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Re: Another perspective on a high-equity portfolio

Quote:
Originally Posted by Jarhead*
Nords: *Hope you're not contributing to your parents-in-law unhappiness, by telling them what your all-stock portfolio has been doing.

Hell, at your age with two cola'd pensions, you have the entire spectrum of investing wide open to you, and I have no doubt given your obvious
talent and inclination to devote a lot of psychic energy in this area, you are going to be a very wealthy guy in the years to come. *

I don't know whether your father-in-law has a pension or not, but I do recall he is about my age, *(give or take a few years).

I have noted a lot of young investors, (working)
that claim they have a high tolerence for risk.

Trust me, on this point, that tolerence is ratched down a few notches, if you are in the withdrawel stage, and counting on your funds to last you a lifetime. *(A 40% drop will definantly get your attention).

In any case, for me personally, I can't afford to go completely without equities, but if your father-in-law has a large enough base, and doesn't need equities to allow him to live the way he wants to more power to him.

After close to 20 years of withdrawels, I'm still able to afford green fees. *(The other insignificant things like food, housing, etc., I'm not so sure of).
Uhm, I've learned to filter our conversational topics.

FIL is turning 72 this month and has a lump-sum pension from a CBS buyout in the early '90s. The irony is that they're doing fine with a well-funded bond/CD portfolio and their Depression-era spending habits, but they just can't stand to watch the effect of declining interest rates on their income. For example they sold their home and banked the profits in CDs. When their five-year 7% CD rolled over at 3% he was down in the dumps for months. I grow tomatoes & tangerines partly so that he doesn't harangue his wife about spending for store-bought. I've learned not to buy ornamental plants anymore but rather to ask him to grow them from seeds or cuttings. He enjoys the gardening (he's VERY good at it) and it saves us having to listen to his perpetual comments on buying retail plants.

Although I look forward to my spouse's plans to redo the yard, the back lanai, & our treacherous stone steps, I dread having to engage in the discussion of sod vs the virtues of propagating 1000 sq ft from a single runner of El Toro zoysia.

I guess that they're only happy when they're kvetching, but geez. A few hours with them usually produces a "Life is good" high in us that lasts a couple hours. At least he's thrilled with our solar array-- he immediately grasped those economics.

Sometimes I wonder if our aggressive investing strategy is fueled as much by their example as by our faith in the math.

At one point he seemed fascinated by the idea of shorting stocks so we went through all my books and my experience. (I felt that if I didn't engage him in these discussions that he'd focus them on his spouse...) At the time I'd shorted KMart at $77/share shortly before the new owner decided to merge it with Sears. When he saw that it blew through my buy stop to $120/share and nailed me for $8000, I thought he was going to have a cardiac incident. It doesn't matter how much money I've made shorting stocks before that incident or since it, the fact that I could lose $8000 on that one investment has firmly branded me as an idiot who's messing with his daughter's financial security. In another decade or so I should regain my credibility but I'm certainly not discussing anything more exotic than Berkshire Hathaway.

Typical family I guess. I love the guy and he certainly loves his granddaughter, but there are times when a little goes a long way!

On a completely different topic, Jarhead, a Kaneohe Marine was just awarded the Silver Star from his Afghanistan tour. Here's the article.
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:01 AM   #33
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Re: Another perspective on a high-equity portfolio

Quote:
Originally Posted by REWahoo!
I'll bet you don't get on any roller coasters either...

http://early-retirement.org/forums/i...3534#msg103534
Amen to that brother ReWahoo.!

Beings my wife was a stay-at-home mom, and
has no intentions of changing, and I'd never work at this point, for anybody that would have me as an employee, we better be able to stretch it out.

Having no pension, the Cavalry (Soc. Sec.), showed up trumpets blaring, in the knick of time.

By the way, speaking of my wife, it's our 43rd. Anniversary today. *(Yes, we were married on Groundhogs Day).

Couldn't decide whether to take the shuttle to Paris, or 3 or 4 days in LaPaz. *We decided that sounded like too much of a hastle, so we're just going to get off the "hill" and have dinner and a couple of "shooters" locally.

Jarhead











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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:05 AM   #34
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Re: Another perspective on a high-equity portfolio

Quote:
Originally Posted by Jarhead*
Amen to that brother ReWahoo.!

Beings my wife was a stay-at-home mom, and
has no intentions of changing, and I'd never work at this point, for anybody that would have me as an employee, we better be able to stretch it out.

Having no pension, the Cavalry (Soc. Sec.), showed up trumpets blaring, in the knick of time.

By the way, speaking of my wife, it's our 43rd. Anniversary today. *(Yes, we were married on Groundhogs Day).

Couldn't decide whether to take the shuttle to Paris, or 3 or 4 days in LaPaz. *We decided that sounded like too much of a hastle, so we're just going to get off the "hill" and have dinner and a couple of "shooters" locally.

Jarhead


Take her out for a round of golf!*
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:06 AM   #35
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Re: Another perspective on a high-equity portfolio

Quote:
Originally Posted by Jarhead*
By the way, speaking of my wife, it's our 43rd. Anniversary today. (Yes, we were married on Groundhogs Day).
Congratulations to you Jarhead and my deepest condolences to your wife.

My parents made to 59 and here's hoping your DW can put up with you for several years beyond that...
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:07 AM   #36
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Re: Another perspective on a high-equity portfolio

Happy anniversary,
happy anniversary,
happy anniversary,
haaaaaapy aniversarrrrryyyyy...
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:48 AM   #37
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Re: Another perspective on a high-equity portfolio

Quote:
Originally Posted by Nords



Typical family I guess.* I love the guy and he certainly loves his granddaughter, but there are times when a little goes a long way!

On a completely different topic, Jarhead, a Kaneohe Marine was just awarded the Silver Star from his Afghanistan tour.* Here's the article.
Nords: Funny stuff with your FIL. (Being a PIA at his and my age goes with the territory).

Thanks for the article on that young Lt. He'll have a lifetime of being able to keep things in perspective after his experience.

Jarhead
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:53 AM   #38
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Re: Another perspective on a high-equity portfolio

Whats the age threshold for becoming a PIA? I want to start a countdown...
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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 11:58 AM   #39
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Re: Another perspective on a high-equity portfolio

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Originally Posted by (Cute Fuzzy Bunny)
Whats the age threshold for becoming a PIA? I want to start a countdown...
Anybody want to take a swing at this high fast ball?

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Re: Another perspective on a high-equity portfolio
Old 02-02-2006, 12:03 PM   #40
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Re: Another perspective on a high-equity portfolio

Well come on, you guys dont seem to be able to take the knuckles or the curves...
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