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Re: Pimp my ride!
Old 06-22-2005, 11:49 AM   #41
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Re: Pimp my ride!

Now heres another question. Do I stick with large cap value or slice to mid cap value? I have a bunch of small cap value in my IRA thats being fed with the dividends from my REIT fund.

Charlie - thanks for the info. Looks like 20-25% high yield to 75-80% total bond market was what the guy found optimal. I was very interested in the comment that perhaps in this analysis the hunk of high yield was simply acting as an equity in disguise much like the 20/80 ports (equity/bond) show better than 0/100 ports do. High yields are supposed to have high correlations to equities. That doesnt bother me much, nor does a little volatility. I'm working with up to a 10 year horizon and will keep plenty of cash buffer plus the wifes income between us and the port between now and then, and perhaps a larger cash buffer after she retires...if she even does.
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Re: Pimp my ride!
Old 06-22-2005, 11:57 AM   #42
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Re: Pimp my ride!

Swedroe, Bernstein and the Coffeehouse guy think that midcap is not
necessary.* if you S&D just buy the 4 corners plus international
and REIT.*

Cheers,

Charlie*

Edit:* They substitute "blend" for the "growth" corners to give a value
tilt.
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Re: Pimp my ride!
Old 06-22-2005, 11:59 AM   #43
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Re: Pimp my ride!

I keep my holdings divided between small value and large value. *I don't really see the advantage of holding another size + value fund. *
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Re: Pimp my ride!
Old 06-22-2005, 11:59 AM   #44
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Re: Pimp my ride!

Pssst! - Windsor and Windsor II.
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Re: Pimp my ride!
Old 06-22-2005, 12:16 PM   #45
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Re: Pimp my ride!

Quote:
Originally Posted by charlie
Hey TH(not),

Here is a good link on the Diehard Forum that shows the optimum
combination of Total Bond Market plus High Yield.

http://socialize.morningstar.com/New...mrr=1119452160

Cheers,

Charlie

Fantastic link, Charlie. Thank you. You wouldn't happen to know offhand (very roughly) the average maturities of the hi-yield and total bond funds, would you?
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Re: Pimp my ride!
Old 06-22-2005, 12:23 PM   #46
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Re: Pimp my ride!

Quote:
Originally Posted by unclemick2
Pssst! - Windsor and Windsor II.
Yeah I looked at them vs the equity income fund. Slightly higher total returns, slightly higher expense ratios, somewhat lower dividends.

Doesnt hurt that bogle and the guys running vanguard own a lot of them though. Of course not selling them and moving to index funds because they dont want to generate taxable events.
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Re: Pimp my ride!
Old 06-22-2005, 04:18 PM   #47
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Re: Pimp my ride!

Hi Art,

The average maturity of the Total Bond Market is 6.9 years with
an average duration of 4.2 years. the High Yield fund has 7.6 years
and 4.4 years respectively.

Cheers,

Charlie
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Re: Pimp my ride!
Old 06-22-2005, 04:31 PM   #48
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Re: Pimp my ride!

Not bad at all. Thanks very much, Charles. Tremendous posts.

Art
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Re: Pimp my ride!
Old 06-23-2005, 06:42 PM   #49
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Re: Pimp my ride!

Ok so heres my plan, after careful review of all the input.

I've more or less decided to drop bonds altogether from my portfolio. I'm going to keep a small bit of HY, a small bit of GNMA, and little dollop of california intermediate munis but those munis are going to be in a lot of danger the minute I find an equity fund with a decent value, possibly after a correction.

I'm just not getting paid enough to keep the bonds. And I dont want to chase yield into the high yield arena. Yet.

My current arrangement. Dont mind the small potato investments, they're probably something I wanted but didnt really need, so to stop wanting them I bought a little and moved on. Unclemicks hormone theory. Numbers were pushed a little lower in % when I added a quarter million in cash from selling my wifes old house.

Taxable

29% Wellesley admiral
10.6% Wellington admiral
10% California IT muni admiral
10% California Tax Ex Money Mkt
5% High yield corp admiral
3.6% Energy
3% Pacific Index
3% Europe Index
1.5% GNMA
1.5% Precious Metals

IRA
10.5% REIT admiral, dividends buy small cap value
3.7% Emerging Market
3% Healthcare
2.7% Small cap value
1.6% International Explorer

%'s are total portfolio, I treat IRA and taxable as a unit.

Proposed new "ride"

39% Equity Income admiral Fund (From Wellesley and Cal MM)
10.6% Windsor II admiral (From Wellington)

Everything else stays the same.

Moves me from a 50/40/10 (%equity/bond/cash) to ~80/16.5/3.5 mix.

We'd have ~ 2 years expenses in cash, plus my wifes pay that more than covers the regular expenses.

Heavy in large cap value US dividend payers, a little light in foreign (I'm ok with that, a lot of the US large cap players are globals), very slim tax profile as most of the money thrown off are qualified stock dividends and tax free bonds.

Should Energy come down a little, I might buy more of that with some of the IT Muni money, and I may pare off some of the REIT and buy more small cap value. If my taxes look good I may also move some of the IT muni to the GNMA to pick up a little more yield.

Cash is currently in nearly expired 11 month cd's paying 3.25%, will be rolled over into 5 year 4.61% cd's next month. I know I can get 5% on a 3 year at penfed, but I'd have to open an account, transfer the money, yada yada...couldnt be bothered for such a small amount...these will be held at my regular credit union with fast solvency, six months interest forfeit if I pull the plug early.

Anyone have a klaxon going off or shaking their head muttering "the fool..."?
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Re: Pimp my ride!
Old 06-23-2005, 06:47 PM   #50
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Re: Pimp my ride!

Yes, I hope you didn't do it today.
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Re: Pimp my ride!
Old 06-23-2005, 06:52 PM   #51
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Re: Pimp my ride!

Nope...not until after the quarter ends.

By the way, the current port above dropped 3/10ths of 1% today, and is averaging 8.5% per year over the past 3 years...
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: Pimp my ride!
Old 06-23-2005, 07:03 PM   #52
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Re: Pimp my ride!

No klaxon, but I would be inclined to split Equity Income and
Windsor II equally. You will only loose a little yield and gain
a lot more diversification including the 7.6% foreign in WII.

Cheers,

Charlie
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Re: Pimp my ride!
Old 06-23-2005, 07:54 PM   #53
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Re: Pimp my ride!

No klaxon here either,

BUT!!! - if those pesky hormones are still bothering ya:

Do a little nosing around a raddr's website and perhaps a little independant research into PCRIX and that ilk.

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Re: Pimp my ride!
Old 06-23-2005, 08:06 PM   #54
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Re: Pimp my ride!

Thought about some pcrix or tips. Pcrix bounces like a ball and should be good primarily in the event of unexpected inflation. I'm not expecting any unexpected inflation over the next 5 years. Go figure THAT statement out. The TIPS fund also throws off a lot of capital gains every year, which wouldnt be too horrible as I have a lot of old capital losses I just cant seem to use up.

Charlie...I'll think about increasing the windsor II. So far your advice has been spot on.
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Re: Pimp my ride!
Old 06-23-2005, 09:18 PM   #55
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Re: Pimp my ride!

th; great portfolio. Nothing to add otherwise that has not already been covered by you or others. Cheers!
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Re: Pimp my ride!
Old 06-23-2005, 09:22 PM   #56
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Re: Pimp my ride!

Yeah

I like Charlie's advice too. Never owned Windsor/or II - but I've caught myself looking many a time.
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Re: Pimp my ride!
Old 06-23-2005, 09:32 PM   #57
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Re: Pimp my ride!

So I'm going to cheat on wellesley and you're guilty of coveting another fund? Oh the humanity...
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Re: Pimp my ride!
Old 06-23-2005, 10:06 PM   #58
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Re: Pimp my ride!

I changed my mind. I forgot about your circumstances--you young rascal you.

hypothetical: What if the market dropped, oh say 5-10% each year, for an extended period. You might do some mild rebalancing from those funds that lost the least to those that lost the most during that time. When would you bail and restrategize? Where's your new 'portfolio' stop- loss, percentagewise? What if the country moves to high inflation mode (15-20%/yr for a few years)?
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Re: Pimp my ride!
Old 06-24-2005, 12:06 PM   #59
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Re: Pimp my ride!

Well clearly that would suck, but I wouldnt change anything, sell anything, etc. If one or more funds lost significantly, I would rebalance from other funds that held their ground into it. I'm not afflicted with that disease that says you run from the market when its on sale or sell low and buy high.

I'm unexcited about valuations in equities, but the stuff I'm buying (while expensive by long term historic value stock valuations) is not as expensive as other sectors. I think I've come to believe that the market is more likely to go sideways a while than experience a drop. People just arent going to sell, they're going to slide sideways with it. Unless we get another 9/11 or similar event that makes people go hoo-hoo. So old school managed value equity funds with dividends is where I'm headed.

If the country moves to high inflation mode, we're all gonna get killed unless you're holding a lot of tips or ibonds. I dont see high inflation as being terribly probable in the next 5 years. I dont think most banks and financial institutions do either. Even if inflation does run high, I have a funny feeling CPI will tell us it isnt that bad. By the way, I think if you hold a lot of tips and ibonds in the fear of inflation, that lousy 1-2% 'supposed real yield' will kill you as well...its just going to take 10-20 years.

I'm still considering a hunk of the tips fund, because its liquid and will pay about the same total output every year as the gnma fund (~4.5%) if you include the capital gains, and I have a good dollop of capital losses I'm still using up leftover from 2000, so 3/4 of the gains will be "free" for at least a few years.
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Re: Pimp my ride!
Old 06-24-2005, 12:07 PM   #60
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Re: Pimp my ride!

By the way Off Topic, I didnt figure out you were marthas husband renamed until just now. I was wondering who the #$^%$ this guy and his 'depends' comments was.
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