Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: *All right, go%$!#@it, mea culpa & caveat.
Old 03-07-2004, 01:09 PM   #21
Full time employment: Posting here.
 
Join Date: Sep 2003
Posts: 902
Re: *All right, go%$!#@it, mea culpa & caveat.

Quote:
But I still don't think you can buy your own TIPS for your own IRA. *I think your custodian has to do that for you, of course with a fee. *That one-time fee is lower than paying annual expense ratios, but the fee is still higher than doing it via Treasury Direct.
Yes, you can buy TIPS for your IRA - not just on the secondary market, but you can also buy new issues at auction if you are concerned about the spread. The brokerage acts as agent, but at Vanguard, for example, the one-time fee for TIPS purchased at auction is only $25. That is so small that it is essentially a non-issue for those who prefer to buy and hold a large dose of TIPS in a tax-deferred account.
__________________

__________________
Bob_Smith 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 Early-Retirement.org 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!

Re: Please Help Me Form a Portfolio for ER
Old 03-07-2004, 01:27 PM   #22
Thinks s/he gets paid by the post
charlie's Avatar
 
Join Date: Mar 2004
Location: Dallas
Posts: 1,211
Re: Please Help Me Form a Portfolio for ER

Buns,

Since you will not draw on your IRA for 27 years, it
makes good sense to me to be agressive in your
IRA and more conservative in your taxable stuff that
you will need to start using in 10 years. You need
to do the math, but at your age it still makes sense
to achieve a 70/30 overall asset mix if you can handle
the volatility and faithfully rebalance. If it were me,
I would concentrate on I-bonds and/or EE/E savings
bonds and 5 yr CD's from Penfed (as suggested by
others) for the bond part of your taxable fund.
The I-bonds will track inflation and EE/E nearly so and
you owe no tax until you redeem them. You can cash
in CD's with a small penalty if inflation takes off.

I really don't think you should treat your house as a
bond asset. If you are lucky and live in a good area
that is growing the house might track inflation. We
don't know enough about your personal situation to
comment much further.

cheers,

Charlie
__________________

__________________
charlie is offline   Reply With Quote
Re: Please Help Me Form a Portfolio for ER
Old 03-07-2004, 01:32 PM   #23
Full time employment: Posting here.
 
Join Date: Sep 2003
Posts: 902
Re: Please Help Me Form a Portfolio for ER

Quote:
Yes, the financial planner who works for my credit union told me that all of my assets should be treated as one portfolio. I heard this about 6 years ago back when I had no idea that ER is even a possiblity, but now that I have two different retirement horizons, one at 42, and one at 60, doesn't it make sense to treat the taxable and tax-deferred as two portfolios?
I agree with Charlie, BOV. Determine one overall asset allocation and distribute the assets between taxable and tax deferred in whatever way makes sense for tax purposes. Ultimately three things will determine whether you will be able to retire at 42, 60, or somewhere in between:

1. the size of your portfolio
2. your level of spending
3. your tolerance for work (which in my case dramatically accelerated #1 and greatly reduced #2)

In reality you have only one portfolio that should be as tax efficient as you can make it. I don't see how you can add any value by allocating separately. It will just muddy the waters.
__________________
Bob_Smith is offline   Reply With Quote
Re: Please Help Me Form a Portfolio for ER
Old 03-07-2004, 02:20 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Please Help Me Form a Portfolio for ER

I tend to agree with the previous two posts - work both ends of the stick.

We lump everything together 401k, trad IRA, rollover IRAs, taxable mutual funds and 'hobby stocks', some cash to look at overall diversification and asset classes etc. The long end.

Then look at how to extract an income stream in the most tax efficient manner. The short end.

In your case since the house is expendible - a SWAG as to what you might net today in cash ? should probably be estimated when looking at diversification of assets.

Our house is a 'fish camp' in hurricane alley so expendible as in uninsured makes it an expense item for us. Also check equivalent rentals every year or so along with a back-up plan to cover the added spending.

__________________
unclemick is offline   Reply With Quote
Re: Please Help Me Form a Portfolio for ER
Old 03-07-2004, 02:23 PM   #25
 
Posts: n/a
Re: Please Help Me Form a Portfolio for ER

Quote:
It's been proven that predicting rate changes is just as difficult as predicting stock market changes. Even fed moves are impossible to predict - and if you think you can benefit, think again.
I'm not sure who said it but, - "There are two groups of people in regard to judging interest rates -

Those who don't know how to predict interest rates and those that don't know that they don't know how to predict interest rates.
__________________
  Reply With Quote
Re: Please Help Me Form a Portfolio for ER
Old 03-07-2004, 07:37 PM   #26
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Please Help Me Form a Portfolio for ER

Quote:
Why is everyone expecting interest rates to rise?
I guess there are at least a couple of answers to that. * You can tell when the market is expecting interest rates to rise. * The smart economist types will tell you that the best predictor of future interest rates comes from the current yield curve. *Right now, the curve is steep, indicating that short-term rates are expected to rise relatively quickly. *Long-term rates are fairly low, indicating that they aren't expected to rise very high.

The current thinking is that our growing debt will drive the supply side of treasuries higher. * This would normally cause rates to rise, but Japan and China are currently keeping the demand side high. * Greenspan (last week, I think) mentioned the obvious -- that this demand cannot be sustained, and that spooked the market enough to cause rates to start rising (right up until the bad jobs numbers came out).

The low fed funds rate is also a factor -- both in terms of expectations that the fed will raise and that the loose monetary policy will drive inflation higher.
__________________
wabmester is offline   Reply With Quote
Re: Please Help Me Form a Portfolio for ER
Old 03-08-2004, 07:28 AM   #27
 
Posts: n/a
Re: Please Help Me Form a Portfolio for ER

I predict interest rates will not change much in 2004.
But, I predicted Martha's trial would end in a hung jury,
so what do I know?

John Galt
__________________
  Reply With Quote
Reply


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
SWR - Amortize your portfolio RgrGd FIRE and Money 5 03-28-2007 11:29 AM
High Dividend Portfolio vs Portfolio Diversified Across Asset Classes ScaredtoQuit FIRE and Money 36 01-12-2007 01:24 PM
How do you calculate your portfolio performance? Surfdaddy FIRE and Money 13 04-13-2006 08:32 AM
Conservative distribution phase portfolio peteyperson FIRE and Money 13 03-22-2005 07:48 AM
Volatility in your Portfolio ESRBob FIRE and Money 5 03-03-2005 10:09 AM

 

 
All times are GMT -6. The time now is 08:01 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.