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Another tidbit from Bernstein's Book
Old 08-31-2014, 09:03 AM   #1
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Another tidbit from Bernstein's Book

One of the pieces of advice in Bernstein's new book is keeping a simple investment allocation. He mentions a couple of times that he has no problem with someone who wants to hold Vang. Total Stock and Vang. Total Int'l. Stock funds as their portfolio. Isn't that really like a target date fund? Does anyone have this simple portfolio and do you rebalance it at the end of each year or so?
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Old 08-31-2014, 09:29 AM   #2
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I think there are lots of us with very simple portfolios. But many of us would add a third fund that contains bonds.
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Old 08-31-2014, 09:54 AM   #3
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I'm in the process of designing my ER portfolio that will be put into action in 3 months. I have most of my first 5 years money in a retirement trust because it is paying a guaranteed 2% for now. I'm thinking more along the lines of a hybrid of Bernstein's "coward's porfolio" and Armstrong's "ideal index" portfolio but I want to keep the rebalancing part very simple. Are there any computer programs that will show a personalized graph of the purchase price of each fund I will have and how much it has grown or declined at year's end?
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Old 08-31-2014, 12:03 PM   #4
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I think there are lots of us with very simple portfolios. But many of us would add a third fund that contains bonds.
I'm in Canada but this is pretty much me. VTI, VXUS, a Canadian stock ETF (actually three XIU, XIC and VCE depending on when they were bought) and a bond fund (ok a couple). I also have a little small-value slant, the ETF escapes me at the moment. Try to keep it pretty simple. The main pain is keep track across different accounts.
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Old 08-31-2014, 12:16 PM   #5
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The main pain is keep track across different accounts.
Yep. I need to take the time to roll my old 401k out, and consolidate my IRAs. But there would still be taxable, Roth, and IRA - so still 3 accounts to keep track of. Right now I have about 8 or 9 between Hubby and me.
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Old 08-31-2014, 12:32 PM   #6
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All you need is three..Vanguard Total Stock, Total International and Total Bond. But I think some of us were able to take advantage of PenFed 5 year CD at 3% and made that a large portion of the fixed portion.
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Old 08-31-2014, 12:33 PM   #7
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Quicken Deluxe automatically downloads holdings and updates daily, for most fund companies. DW and I have about 12 different accounts, due to job changes and different IRAs, so it's a big time saver.
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Old 08-31-2014, 01:10 PM   #8
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....Isn't that really like a target date fund? Does anyone have this simple portfolio and do you rebalance it at the end of each year or so?
With respect to your first question, Vanguard's target date portfolios are generally various percentages of four funds; Total Stock, Total International Stock, Total Bond and Total International Bond with TIPs added for those closer to retiring. See https://advisors.vanguard.com/VGApp/...ls?fundId=0682

I think a 3 ticker portfolio can be quite sensible if you want simple, adding Vanguard Total Bond to the two equity funds you mention.

I personally add international bonds and emerging market equities and bonds, but even then could live with 6 tickers.

I actually have many more than that for various reasons, but if you want simple, I think a 3 or 6 ticker portfolio is very sensible.
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Old 08-31-2014, 01:49 PM   #9
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A downside to using the Vanguard Target Date funds is that they use investor shares of the underlying funds rather than admiral shares, so a DIY portfolio with admiral shares will lower your expense ratio. You also lose some ability to hold different asset classes most tax efficiently (e.g. bond index in tax deferred and stock index in taxable).
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Old 08-31-2014, 03:12 PM   #10
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Does anyone have this simple portfolio and do you rebalance it at the end of each year or so?
I am currently reallocating my portfolio in order to simplify it as I will turn 70 in a few months and I think that my 60/40 AA should be 50/50. My core funds are all Vanguard Index funds ~ TSM, Total International, ST TIPS and Intermediate bond Idx. I occasionally rebalance whenever my allocation gets off by about 5% or so.
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Old 08-31-2014, 04:28 PM   #11
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I'm thinking about the Vang. Short Term Bond Index for that allocation or simply keep my Wellington fund since it has bonds in it. I've got a pension starting when I retire and that is what I'm really counting as income from a bond type investment. SS will not start for another 6 years but that will be another type of bond annuity. Maybe putting 20% or so in the bond portion.
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