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Old 08-29-2017, 08:30 PM   #21
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Utility stocks can be a good choice for a conservative investor. They generally keep up with inflation plus pay a nice dividend. They also weather tough markets nicely. A utility-heavy portfolio barely noticed the 2008-2009 downturn.
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Old 08-29-2017, 08:47 PM   #22
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Utility stocks are were I've got my mom. Well, I should say that's mostly where my dad left my mom. She had 3 positions and when I showed her the 2008 2009 graphs, she picked the only non-utility to sell for spending. I see utility stocks are the best middle ground on ones way to bonds.
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Old 08-30-2017, 12:17 PM   #23
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Dash Man I'm not hedged against Armageddon. I doubt your going to get anything close to the "value" of your bullion in a government melt down despite what William DeVane says. A better choice in that scenario is a safe full of Glocks and boxes of 9mm bullets, or .22 or .223 cal equivalent systems

My goal is to be hedged to some extent against inflation which is one very real threat to a passive retirement. I went with the LTIPS fund based on some research I read by some people I consider to be very smart, that TIPS were felt to be the best hedge against inflation for the "cash like" part of a portfolio. Inflation will eat this part of your portfolio. Stagflation will eat this part AND the capital appreciation part. I have other parts of my portfolio (bonds stocks etc) which provide appreciation, and other parts (pre-tax funds, post tax funds, muni bonds, long term cap loss, manipulation of the basis) that provides tax efficiency, and a means to estimate diversity.

I am a believer in modern portfolio theory. I believe diversity correctly applied is the only free lunch when it comes to portfolios. If you have a portfolio that drops 50% it takes 100% to get back to zero, If you drop 33% you only need 66% to get back to zero. In the accumulation phase of a portfolio (when you're trying to make the most return) you may be able to stand that kind of volatility, but I read a paper that suggest you should transition over 10 years from a pre-retirement accumulation phase to a post retirement distribution phase. 5 years into this 10 year period is actual retirement. As you enter you want things to be getting conservative, peaking in conservatism at retirement and then gradually liberalizing as you reach 5 years into retirement, so there is a shift between accumulation to preservation, to distribution over a 10 year period. I'm presently in the preservation phase so TIPS fit my phase. 5 years from now I'll re-evaluate my risk profile vs the economy. This scheme is supposed to give the best protection against early portfolio failure. The problem is your bad choices today tends to play out as failure 20 years after the fact.

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Old 08-30-2017, 01:10 PM   #24
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My AA is 40/60, up from 30/70 a few years ago. Mostly index funds. I am 67. So far, so good--"keep it simple" works for me.
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Old 08-30-2017, 04:13 PM   #25
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Dash Man I'm not hedged against Armageddon.

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Knowing what I know now, Not only would I have left work 5 years earlier, I now realize It was stupid of me trying to worry about most what ifs. I dont know anyone personally, that said "omg inflation was 2 % last year Im really needing 2 % more income or Ill starve". This whole keeping pace with inflation thing is overblown. I didnt know that at the time. I thought I would always buy Clorox bleach at 2.99 when I can get a gallon for a buck from Joe blows store. You just adapt. This might not apply to the folks that are already about to eat cat food, but the majority of the members here are too excess to worry about this stuff.
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Old 08-30-2017, 04:54 PM   #26
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Armageddon is by definition not hedgeable.

It is tough enough to hedge against something like Hurricane Harvey for people on the east and gulf coast. Or people in the midwest and their tornadoes.

Have not heard recently about people along the west coast and their earthquakes, but they have been busy with the drought and a sudden deluge.

I have been busy thinking about doing something to hedge against the summer here in the SW. I need to put up that solar pergola to harvest some electricity to run a supplemental AC.
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