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Old 06-06-2008, 09:35 PM   #161
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Just for perspective here are some year-to-date results for some Vanguard Lifecycle Retirement funds which are fairly well diversified:
Code:
 
retire_date    YTD   stock/bond allocation
 
2005          -1.00   42/58
2010          -1.95   54/46
2015          -2.68   63/37
My own portfolio is down slightly and compares favorably to the 2010 results (I have the same AA) although I've been FIRE'd for 5 years. So far this has been a pretty mild bear market but no predictions for what's coming next. I could imagine a vicious set of declines or that we will be up and partying at the end of this year.
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Old 06-06-2008, 09:35 PM   #162
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Can't argue with that. I always enjoy your bits of wisdom. I haven't been around long but it always sounds like you actually walk the talk.
That's exactly my plan - - to live on my substantial chunk of Wellesley (which doesn't do too much of the rollercoaster, being primarily bonds) and to rely on my equity funds to combat inflation. So why would that view not be shared by many on this forum?
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Old 06-06-2008, 09:39 PM   #163
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That's exactly my plan - - to live on my substantial chunk of Wellesley (which doesn't do too much of the rollercoaster) and to rely on my equity funds to combat inflation. So why would that view not be shared by many on this forum?
It seems to me many think they will be living on their 10% returns (sure thing) from stocks. You said you only hold stocks to combat inflation, I might not have read you correctly.
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Old 06-06-2008, 09:40 PM   #164
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That's exactly my plan - - to live on my substantial chunk of Wellesley (which doesn't do too much of the rollercoaster) and to rely on my equity funds to combat inflation. So why would that view not be shared by many on this forum?
Well golly gee, who would know?

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Old 06-06-2008, 09:41 PM   #165
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It seems to me many think they will be living on their 10% returns (sure thing) from stocks. You said you only hold stocks to combat inflation, I might not have read you correctly.
Ive never seen a single person here claim they will be living on 10% returns.
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Old 06-06-2008, 09:44 PM   #166
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Ive never seen a single person here claim they will be living on 10% returns.
Come on now, awhile ago I asked what return would be an acceptable return to give up on stocks. Only a few said anything less than 8%, many said 10-12%, some even more.
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Old 06-06-2008, 09:45 PM   #167
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It seems to me many think they will be living on their 10% returns (sure thing) from stocks. You said you only hold stocks to combat inflation, I might not have read you correctly.
Right - - what I wrote was:
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It's not like they're going to be down FOREVER, y'know.... and besides, the main function of stocks (for me, anyway) is just to combat the effects of inflation on my portfolio, not to live on.
to which you replied
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Now that's an interesting view, I appreciate the concept. I doubt that view is shared by many on this Forum though.
And no, I don't think so many of us will be relying on 10% returns from their stocks to live on. Bonds (such as the majority of Wellesley) have a big function in the portfolios of many here.
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Old 06-06-2008, 09:48 PM   #168
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Right - - what I wrote was:

And no, I don't think so many of us will be relying on 10% returns from their stocks to live on. Bonds (such as the majority of Wellesley) have a big function in the portfolios of many here.
I stand corrected. Sorry.
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Old 06-06-2008, 09:52 PM   #169
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Stocks are going to do great in the future -- just don't ask me when . I tried to get you guys to look at Primecap last year and its up +1.19% YTD: http://www.early-retirement.org/foru...wth-31631.html

P.S. Don't take this too seriously, it's just money.
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Old 06-06-2008, 09:52 PM   #170
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I stand corrected. Sorry.
Well, you haven't been around long yet but I found it humorous that you apparently thought that what I was saying was in such contradiction with what UncleMick was saying.
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Old 06-06-2008, 09:56 PM   #171
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Stocks are going to do great in the future -- just don't ask me when .
They always seem to turn around, don't they!
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Old 06-06-2008, 09:56 PM   #172
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Two peas in a pod, huh?
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Old 06-06-2008, 10:00 PM   #173
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Two peas in a pod, huh?
Wellesley is Wellesley and I guess I should have specified (though most here know I have a big chunk of it).
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Old 06-06-2008, 10:07 PM   #174
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I do think the 4% plus yield is great. I wouldn't argue with your approach, it has a reasonably good chance of working out well over the long run.
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Old 06-06-2008, 10:17 PM   #175
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I do think the 4% plus yield is great. I wouldn't argue with your approach, it has a reasonably good chance of working out well over the long run.
That was my opinion as well... it's a very common approach. Many combine Wellesley with Wellington, for example.
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Old 06-06-2008, 10:22 PM   #176
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I wish you nothing but good luck with it.
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Old 06-06-2008, 10:53 PM   #177
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it's a very common approach. Many combine Wellesley with Wellington, for example.
That's exactly what I plan to do. I am shooting for an overall dividend yield close to 3.5% and a 50% stocks / 50% bonds AA. A core mixture of 50% Wellesley and 50% Wellington should get me there. The plan is to rely solely on the dividends generated by my portfolio to pay for my living expenses. The stock portion should allow the portfolio (and the income it generates) to grow overtime (hopefully keeping pace with inflation). Kind of a Norwegian widow approach I guess...
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Old 06-06-2008, 10:54 PM   #178
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I tried to get you guys to look at Primecap last year and its up +1.19% YTD: http://www.early-retirement.org/foru...wth-31631.html
Damn! We shoulda jumped all over that one.

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Old 06-07-2008, 08:30 AM   #179
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Pssst - Wellesley = current yield 4.24% or a tad higher than the mighty mighty 4% rule.

heh heh heh - just thought I'd mention it. And I can still get by on my Target retirement 2015 at 3.05% in a hard times mode.

And and those Vanguard computers rebalance away - whether I laugh or cry. . Carry on!
What does that mean, the dividend distributions from that fund is 4.24% of the current price?

But they only do distributions at certain times of the year so the yield could be different right?
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Old 06-07-2008, 08:35 AM   #180
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That's exactly what I plan to do. I am shooting for an overall dividend yield close to 3.5% and a 50% stocks / 50% bonds AA. A core mixture of 50% Wellesley and 50% Wellington should get me there. The plan is to rely solely on the dividends generated by my portfolio to pay for my living expenses. The stock portion should allow the portfolio (and the income it generates) to grow overtime (hopefully keeping pace with inflation). Kind of a Norwegian widow approach I guess...
Are you referring to the admiral shares or whichever ones require $100k minimums?

Lump-sump purchase or average into it over a period of time?

I guess if 100k minimum, you'd have to buy a chunk at once and then could add to it.

So no DRIP, you'd take dividends into your cash account and spend it?
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