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Old 01-22-2010, 09:20 AM   #41
Recycles dryer sheets
Join Date: Nov 2003
Location: Charlotte
Posts: 360
Am curious how folks break down their fixed income allocation. Aside from duration, credit quality, etc. I think about these other "buckets":
1) within balanced funds; allows some overall portfolio balancing to be done by professionals
2) bond mutual funds or etfs of various flavors; professional management and probably better returns over time, but loss of principal stability
3) directly owned securities including CDs, treasuries, etc; stable principal but illiquid (assuming you hold to maturity)
4) true cash; e.g., money market funds; stable principal and liquid

I am currently wrestling with how much to allocate between buckets 2 and 3.

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Old 01-22-2010, 08:44 PM   #42
Recycles dryer sheets
Join Date: Oct 2008
Posts: 295
1st. I put into Bonds what I figure I will need that a 4% income from it will pay..( past 10 yrs it's ave. 7.2% apy and 4.3% ylds)
2nd. That left me over 50% of my $ to invest into more aggressive investments such as Balanced Funds..( past 10 yrs a 9.8% apy ) to build an estae for heirs and charities..

Both have made more than enough $ , reinvested in same to double our needed amts to fund our retirment..

I sincerely doubt ( or hope) neither will loose 50%....but if it does, we will still have plenty to take care of things.

Wether the next 10 yrs will do the same for others remains to be seen..

I'd like to see another early 80's/Carter yrs of Very high LT treasuries , like it did for my parents -Perfect timing for them, just retiring and locking in all their $ into them and getting those 10+% rates..

and if A Paul Volker gets incahrge, it might happen again..

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Old 07-20-2010, 10:24 PM   #43
Confused about dryer sheets
Join Date: Nov 2007
Posts: 7
Originally Posted by bosco View Post
I use a variation of

SSRN-A Quantitative Approach to Tactical Asset Allocation by Mebane T. Faber

The paper is well worth downloading and reading even if you don't have any inclination to use the method.

The variation is that I slice the portfolio up into a few more pieces, and tweak the asset allocation a bit.
Hello, I believe I found a free copy of that paper.

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