What is your portfolio asset allocation?

[bizlady]

45 stocks/45 bonds/10 cash-CD's

We will retire spring 2011 at 55. Need cash to pull until 59.5 plus emergencies and health insurance. Should probably be higher in stocks, but feel more comfortable with this mix. Will have a pension that will cover approx 25% of expenses (with ins and taxes as expenses).

 

[LOL!]

Well, there you go: The entire spectrum of asset allocation has been reported in this thread from 0% stocks to 100% stocks to lots silver & gold.

@Contrarian, how does all this knowledge help you now?

 

[Spanky]

Our AA is 35/45/20 (equity/fixed-income/cash). The rule of thumb is to allocate fixed income to age, e.g., age 40 = 40% fixed income.

 

[afntrn56]

Thank you Helen. Less then 3 months ago we were in more than 25 funds thanks to our financial advisor. He's been let go and we now self-manage.

Learned everything I know (which isn't much yet!) from this forum, Bogleheads and recommended readings from same.

Indeed this is a simple one to handle. I just wonder though if there is less risk if you have more diversity in selecting more funds in the stock and bond categories. In other words if you have all the eggs in one or 2 baskets is there more chance of losing all the eggs instead of just a few bad ones?

 

[REWahoo]

Indeed this is a simple one to handle. I just wonder though if there is less risk if you have more diversity in selecting more funds in the stock and bond categories. In other words if you have all the eggs in one or 2 baskets is there more chance of losing all the eggs instead of just a few bad ones?

Looking at the index funds Lisa chose in those "one or 2 baskets", I'd say she's reasonably well diversified. Unless she adds entirely different asset classes such as REITs or precious metals (not everyone's cup of tea), I'm not sure adding other funds would accomplish anything regarding risk reduction and would likely increase her costs.

There is much to be said for elegant simplicity...

 

[Ed_The_Gypsy]

I am 81% equities/9% bond funds and a little cash. Not thinking about increasing bond exposure.

AA target for equities is 50/50 US/international. Same with bond funds.

Mostly index funds, but a few individual stocks. I buy what I know on weakness (mine and theirs) and only small amounts.

Have not rebalanced in a year or so. Maybe soon.

Focusing on small cap, value and yield these days. I think capital gains are purely gambling, but by going for value and small cap you stack the deck a little in your favor.

All in IRAs at Vanguard.

Vanguard says that the average return from 1926-2009 for a portfolio like this one was 9.7%. They say the best year was +50% (1933)and the worst was -39% (1931). Losing years were 25 out of 84. We are still down 19% from our peak 2.5 years ago, but are up 45% from March '09 (even after some hefty withdrawals when out of work). Yes, it is volatile, but it seems to be working OK.

DW tells me we will retire in 3 years.

 

[Alan]

DW tells me we will retire in 3 years.

Those Financial Advisors can be really bossy

 

[teejayevans]

7 yrs of expenses in cash/STB, another 7 yrs in balance funds, rest in equities (REITs,EM,LC,MC,SC,Intl, etc)
TJ

 

[teejayevans]

Vanguard says that the average return from 1926-2009 for a portfolio like this one was 9.7%. They say the best year was +50% (1933)and the worst was -39% (1931). Losing years were 25 out of 84. We are still down 19% from our peak 2.5 years ago, but are up 45% from March '09 (even after some hefty withdrawals when out of work). Yes, it is volatile, but it seems to be working OK.

Did you get this info via web site or did one of the VG advisors gives you this info?
TJ

 

[Lisa99]

Indeed this is a simple one to handle. I just wonder though if there is less risk if you have more diversity in selecting more funds in the stock and bond categories. In other words if you have all the eggs in one or 2 baskets is there more chance of losing all the eggs instead of just a few bad ones?

We also have three rental properties that I don't include in our current AA because they're being sold next year.

Once sold, we'll consider buying a REIT index so that real estate can continue to be part of our portfolio.

Having said that, when Vanguard did our investment plan in September the planner advised against REITs based on our goal of retiring in 2016. He said the asset was too volatile for our goals. We'll see when the time comes to make the investment decision. I will have done a lot more reading by then and expect to understand the pros and cons of the asset class.

 

[Nords]

Well, there you go: The entire spectrum of asset allocation has been reported in this thread from 0% stocks to 100% stocks to lots silver & gold.

In just 26 posts, too!

 

[tuixiu]

60/40

Equity - vanguard total stock market, total intl stock market, small cap index
Bond - vanguard total bond index

6-7 years from retirement

Funny, we're exact same except 25x4.

 

[tuixiu]

Not only is it nice and simple, also think of the savings on advisor fees

And expenses, with the 10k floor for most admiral shares it doesn't take much of a portfolio to be running extremely lean.

 

[REWahoo]

Well, there you go: The entire spectrum of asset allocation has been reported in this thread from 0% stocks to 100% stocks to lots silver & gold.

@Contrarian, how does all this knowledge help you now?

I think he just sent the mods a PM asking if he could change his forum name to "WTF"...

 

[Jake46]

36% equities/64% bonds
%Bonds = Age

 

[REWahoo]

36% equities/64% bonds
%Bonds = Age

My allocation mirror's Jake. Just a coincidence I'm sure...

 

[Retire2013]

60/40 stocks/bonds.

 

[WilliamG]

Ages 65 and 62, retired since 2000.

8% International Stock
32% US Stock
55% Bond
5% Cash

 

[GregLee]

87% stocks, 13% cash, all for emergencies/LTC. I don't see why I would want to hold bonds, though I see that most everyone has some.

 

[Animorph]

Nominally 98% equities, 2% cash. Up to about 7% cash now due to the last market rise. Asset allocation for me is among various equity categories, where I'm heavily diversified.

Obviously there are many ways to do it.

 

[cardude]

45, retired, DW still works

65% Equities
5% commercial real estate
30% Cash/Bonds/CD's

About a 2% WR currently

My target AA is 55% equities, 5% RE and 40% cash/bonds, so I'm a little off. Bought some "cheap" stocks with cash recently............

 

[HFWR]

Roughly 50% stocks, 40% bonds, and 5% ea. REIT and CCF.

 

[rescueme]

Retired since 2007; DW is to join me May 2011. Both age 62 (don't intend to start SS till 70 - for me, 66 for DW).

Our joint retirement portfoio (e.g. my TIRA, Roll-over IRA, Roth, along with my DW's 401(k), TIRA, and Roth Ira's) are at a 50/50 target AA mix (50% equity/50% bonds-cash). As of today? We're at 49/51. I do not adjust until we are at least 5% +/- from target.

DW's holdings are vastly more conserative than mine (DW at 38% equity; me at 56% equity) but since we have different investments options - due to her 401(k) and different risk assessments, that's just the way it turned out.

 

[Gone4Good]

Curious as to others' portfolio asset allocations and reasoning. I am new poster here so forgive if this topic has come up before. Thanks.

Bob

My original target was 65% stocks, 35% bonds for my investment portfolio. And the plan was to have an initial withdrawal rate capped at 3%, with the intention of spending less (ignoring rental income and any employment income for the purposes of this calculation). But as the portfolio has grown relative to expected withdrawals, I've decided I don't need to maintain the same allocation to equities, so my current stock allocation is down to 55% (and really could be closer to 50%).

Here's a hypothetical to illustrate. Assume we start with $1MM and determine that a 4% WR and a 60/40 AA is "safe" for our expected 30 year lifespan. If the portfolio grows in real terms to $1.5MM, I shouldn't need to increase my equity allocation from $600K to $900k (60%) to retain the same "safety" I started with. I should be able to maintain the same $600K/$400K equity allocation on the first $1MM and move the $500MM balance to 30yr TIPS. I now have a $1MM portfolio allocated 60/40 which should "safely" service my $40K annual withdrawals, AND I have an additional $500K tucked away in inflation protected securities as an insurance policy. As a result my equity allocation declines from 60% to 40%.

So I'm ratcheting down my equity allocation loosely based on the formula:

Equity Allocation = (Withdrawal Amount / Starting WR) * Initial Equity Allocation / Portfolio Balance

In the hypothetical above, that would work out to be (40,000/.04)*.6/1,500,000 = 40%

 

[Onward]

55/30/15 baseball cards/beanie babies/tulip bulbs.

For safety I am gradually moving $$ into CDs from Stanford Intl Bank of Antigua.