Transitioning to a Portfolio Appropriate for Age 80 and Older

[Lsbcal]

...
So I'm just thinking about what kinds of eventual transitions I might like to make and how to go about them. And when (at what age) to start the transition.

I figure people here will have lots of thoughts on this topic.

One word -- benchmarking.

I've started doing this more seriously. It helps to establish what one might want to transition to. I think it's important for me to have several portfolio possibilities and then see how my actual one performs against them. Also why one might have done better then others.

For instance, a Wellington/Wellesley based portfolio has very low international, US mid cap, and US small cap exposure. That might have helped over the last 5 years against a simple indexed portfolio.

Also I think it's important to add in any legacy investments into a benchmark. For instance, if one has old high yield Ibonds (they are not selling) then that should be a component of each benchmark portfolio. Same for cash or stocks that are not to be sold because of tax constraints. Helps to make the portfolio comparisons realistic.

I'm trying to step back from complexity but it's hard. Tend to be attracted to complexity like a moth to a flame. But yes, someday old age will get me.

 

[audreyh1]

I actually have two benchmarks - both balanced funds. Some years they outperform my AA portfolio, other years my AA beats. It's been beating more often since 2008. I hold 10% of the portfolio in these, so I'm doing real comparisons.

What's obvious is that large cap performance is what drives the balanced funds. So years when large cap are in favor, the benchmarks beat.

 

[hnzw_rui]

#1 would be my pick for a taxable account; put the bonds in tax-deferred, and go from there. Best of luck!

Lol, that's the thing. Both tax-deferred and Roth are 100% VFORX because I don't want to have to deal with rebalancing (I tinker with slice and dice if given the chance). The only bonds I'll have will be the ones in VFORX. If I go with #1, I'm pretty much just going to allow VTSMX to become overweight.

 

[unclemick]

Two comments.

I still sometimes wistfully look at the wellsley/wellington type portfolio because of my fondness for divy's and the 'value premium.

And there was never a year (1966 - 2006) when I couldn't look back and find a portfolio that did better than the one I held.

heh heh heh - I also was a Saint's fan for 30 years.

 

[W2R]

Two comments.

I still sometimes wistfully look at the wellsley/wellington type portfolio because of my fondness for divy's and the 'value premium.

And there was never a year (1966 - 2006) when I couldn't look back and find a portfolio that did better than the one I held.

heh heh heh - I also was a Saint's fan for 30 years.

They're back to their old ways.

Sean Payton announced yesterday that he will stay with the Saints as long as they want him, and will never coach another team.

As for comparing portfolios, someone on another forum quoted Roosevelt as saying, "Comparison is the thief of joy".