Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Basic asset allocation questions
Old 06-23-2008, 04:15 AM   #1
Recycles dryer sheets
Join Date: Jun 2008
Posts: 55
Basic asset allocation questions

I am currently allocated in a typical "money magazine" type way (divided among large cap growth, large cap value, short and int. term bonds, small cap growth, etc.) based on our planner's recommendations which matches most target asset allocation models I've seen. Our target date is when our assets reach 2 Million (1 right now) OR when I'm 40 years old (42 now).

I am curious though, my "innner voice" keeps suggesting making things simpler and simply assembling a diversified "income" portfolio of preferred stocks, high quality corporate bonds, reits, lps, etc. and allowing that interest/dividend to stockpile then live off 3/4 of it when we FIRE. It just seems like so much more "sure" than relying on the long term results of the S and P, etc. which can be miserable some years!! (2000-2002 not to mention the past 6 months).

Any thoughts on this strategy?? Thanks!

hotwired is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-23-2008, 04:28 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 7,664
An income strategy is shown to be inferior to a total return strategy:
You have to be mindful of taxes.

Also small cap growth is one of the worst asset classes, while small cap value is one of the best. You can keep things simple, but I think you would want the highest risk-adjusted return (highest efficiency) and lowest taxes on that return.

See also: Asset allocation tutorial? and all the useful links in that thread.

PS: Your inner voice is often wrong. See the behavioral finance book: Why Smart People Make Big Money Mistakes.
LOL! is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Best Asset Allocation for an ER RockOn FIRE and Money 21 02-11-2008 12:18 PM
Basic Social Security questions fmhealth FIRE and Money 5 10-07-2007 09:08 AM
Asset Allocation help dm FIRE and Money 13 08-13-2007 01:24 PM
Asset Allocation Help TedMunson FIRE and Money 13 08-03-2007 07:31 AM
Basic tax questions Gearhead Jim FIRE and Money 4 04-06-2007 10:55 AM


All times are GMT -6. The time now is 03:49 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.