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Old 09-18-2013, 06:20 AM   #21
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Originally Posted by daylatedollarshort View Post
I want a portfolio and retirement income that will work no matter what the stock market does or the future holds - inflation, deflation or anything in between.

Investment advisers that change their tune dramatically with every economic cycle change are just influenced by recency bias.
You will never eliminate risk. You can only move where that risk is.

The problem with "100% safety" is that it drives the needed savings/retirement income streams to infinity (or very close to it). That in itself delays when an individual can retire. Ultimately, it is necessary to decide where the risk/retirement date balance point is.
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Old 09-18-2013, 07:14 AM   #22
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Does this mean that I don't have to finish reading his Four Pillars book?
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You can still use it to help you sleep. Unless you want to slog through the immense amount of detail, you can get a better grasp by reading his Inverstors' Manifesto. It's much more readable and doesn't really have any significant differences in his recommendations. Since it's newer than Four Pillars, it has more up-to-date investment options in his discussions.
If you want a fish, read Investors Manifesto. If you want to learn how to fish, read The Four Pillars of Investing. I found The Four Pillars highly worthwhile, but it's not for everyone.

And if you want to know how to breed fish to catch and eat, read The Intelligent Asset Allocator...
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Old 09-18-2013, 07:51 AM   #23
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If you want a fish, read Investors Manifesto. If you want to learn how to fish, read The Four Pillars of Investing. I found The Four Pillars highly worthwhile, but it's not for everyone.

And if you want to know how to breed fish to catch and eat, read The Kntelligent Asset Allocator...
I have yet to read The Intelligent Asset Allocator. Overall I'm pretty happy with my AA after reading quite a few well respected authors and feedback from members on this site. But my main focus now are my 2 kids who may not earn as much as I did and who may not get the few lucky breaks that I did in investing. My son is a saver but very risk averse and a low earner( only 24). He is the reason i am focusing on needs based investing using safe securities, specifically TIPS. Eventually i hope to get him to take some risk. My daughter (27) couldn't tell you how much is in her 401k and has difficulty saving but has a decent income. If i can influence her saving rate, setting up a suitable portfolio will be easy. My goal is to come up with a fairly simple investment philosophy for each child that they can implement and follow after I'm gone.
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Old 09-18-2013, 08:16 AM   #24
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I have yet to read The Intelligent Asset Allocator. Overall I'm pretty happy with my AA after reading quite a few well respected authors and feedback from members on this site. But my main focus now are my 2 kids who may not earn as much as I did and who may not get the few lucky breaks that I did in investing. My son is a saver but very risk averse and a low earner( only 24). He is the reason i am focusing on needs based investing using safe securities, specifically TIPS. Eventually i hope to get him to take some risk. My daughter (27) couldn't tell you how much is in her 401k and has difficulty saving but has a decent income. If i can influence her saving rate, setting up a suitable portfolio will be easy. My goal is to come up with a fairly simple investment philosophy for each child that they can implement and follow after I'm gone.
You're a good Dad, seriously. My (surgeon) father never taught us anything about investing, fortunately my interest was piqued early so I taught myself. My 65 yo sister still has no clue, and hasn't saved much of anything...
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Old 09-18-2013, 09:45 AM   #25
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My goal is to come up with a fairly simple investment philosophy for each child that they can implement and follow after I'm gone.
Buy a balanced fund with low expenses. make regular monthly purchases. Go to sleep for 20 years.

That is really all they need to know.
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Old 09-18-2013, 10:14 AM   #26
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Hmmm - circa 1970 I got the impression that 'traditional pension fund' was 60/40. Sooo 1970 to 2010 pretty much 60/40 while I read Ben (Graham), Bogle and Berstein and tap danced around the edges ala REIT's, individual Dividend stocks, high yield corp and few other brain pharts over the decades.

Although the ride was a tad chewy at times - turns out index funds and the old 60/40 was the lead sled dog. The other stuff amounted to more like shifting deck chairs on the Titanic.

I still like/follow what Bogle, Bernstein have to say and manage my male hormone condition with football and a few good stocks.

Nowadays mainly VG Target Ret. 2015 for 'real money and "hurry up just stand there".

heh heh heh - at age 70 slightly lower than 60/40.

P.S. 53/46 and cash - I just checked.
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Old 09-18-2013, 10:45 AM   #27
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You will never eliminate risk. You can only move where that risk is.

The problem with "100% safety" is that it drives the needed savings/retirement income streams to infinity (or very close to it). That in itself delays when an individual can retire. Ultimately, it is necessary to decide where the risk/retirement date balance point is.
It depends a lot on your ratio of nest egg + SS + pensions + other income to expenses. If a retiree household has enough cushion, they wouldn't necessarily have to even keep up with inflation and could still have more than enough money in retirement. But most households can probably at least keep up with inflation, more or less, if they have a paid for house or fixed rate mortgage, and can live on their inflation indexed income like SS, COLA pensions and annuities, and TIPS and I bonds interest.
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Old 09-18-2013, 03:15 PM   #28
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If my reading comprehension is in tact, Bernstein is disagreeing with the authors in advocating Tips as a core holding. He seems to be holding to his original philosophy of stocks still being the best protection against inflation.

He also points out the fear of investors behaving the same with Tips during bear markets (for
Tips, such as now) and getting out at the worst possible time. Maybe I read it wrong and need to re-read it.
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Old 09-18-2013, 04:32 PM   #29
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Although the ride was a tad chewy at times - turns out index funds and the old 60/40 was the lead sled dog. The other stuff amounted to more like shifting deck chairs on the Titanic.
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Old 09-18-2013, 04:36 PM   #30
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The other stuff amounted to more like shifting deck chairs on the Titanic.
Hey, that is what my day job consists of.
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