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no TBM?
Old 01-06-2014, 09:46 PM   #41
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no TBM?

I'm surprised not many people are listing a Total Bond fund among their holdings in this thread. It may not be optimal, especially in today's interest rate environment, but as a long term holding on autopilot it seems fine. My non-equity portion is 50% TBM and 50% TIPs fund. Their purpose is for diversification/non-correlation with equities - it's ok if they have some losses. I've held them for years and plan to just rebalance as necessary. Anyone see issues with this?
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Old 01-07-2014, 09:46 AM   #42
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I'm at about 39% TBM and 13% Money Market.
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Old 01-07-2014, 10:50 AM   #43
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Originally Posted by Spanky View Post
No Equity at all? CD is considered as fixed-income.
Sorry, I was assuming the OP was just interested in the FI portion. Overall I'm 62/38. I'm not the most aggressive one out there, but not quite that conservative...
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Old 01-07-2014, 11:18 AM   #44
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Originally Posted by Ken11 View Post
Im thinking about some MLP's as an alternative to bonds.
Interesting that that many advisers are uncomfortable with them cause of tax complications. Complexity is not an issue for me if the return/rationale is there.
This might mean they are undervalued.
My father in law became rich on them over the past two decades.
Pipeline MLP's seem very low risk. ( regulation risk is perhaps the biggest concern).

Anyone into these? Do you consider them to be like bonds?

OTOH reading the WSJ article this weekend on bond investing as rates rise- Im not sure I'm smart enough to out-fox the vanilla 60/40 AA.

Currently my non equities are 13% cash and 32% the bonds in the vanguard AA managed fund.


I had a basket of separate MLP's, but sold them all and went with just one http://www.alerianmlp.com/amlp/amlp-index.php
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Old 01-07-2014, 01:41 PM   #45
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Fixed income is 30% of our portfolio.

TBM: 69%
bank loan fund: 16
CDs: 7
IBonds: 5
short term muni fund: 3
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Old 01-07-2014, 02:00 PM   #46
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Originally Posted by figner View Post
My non-equity portion is 50% TBM and 50% TIPs fund.
Is the TIPs fund short-term? I heard that short-term is more appropriate if the prospect for higher inflation is likely. Futher, short-term is lower risk despite possible lower return than the longer-term TIPS in the long run.
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Old 01-07-2014, 03:45 PM   #47
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55% in various short term bond funds
19% cash
14% TIPS mainly actual bonds
12% Misc including some individual corp and muni bonds, a little bit of high yield, a CA Muni Bond MF

Am not including a piece of a Mort on a commercial building that DW inherited.
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Old 01-07-2014, 04:43 PM   #48
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Quote:
Originally Posted by figner View Post
I'm surprised not many people are listing a Total Bond fund among their holdings in this thread. It may not be optimal, especially in today's interest rate environment, but as a long term holding on autopilot it seems fine. My non-equity portion is 50% TBM and 50% TIPs fund. Their purpose is for diversification/non-correlation with equities - it's ok if they have some losses. I've held them for years and plan to just rebalance as necessary. Anyone see issues with this?

To me one of the problem of TBM is that it is composition has really changed since 2008 when the Fed went on it is buying spree. It is only 23% corporate and the rest is government (90% US) or agency debt. Fully 30% of the assets are in long bonds 20-30+ year issues. Anyway given the low current interest rates and the prospect of rising interest none of these seem like great assets to own.

The BND current yield is 2.5% and the average duration is 5.5 years so even a 50 basis point rise in interest rates will result in small loss. I think PenFed CD, stable value funds etc. all seem like better investments.
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Old 01-07-2014, 08:59 PM   #49
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I think PenFed CD, stable value funds etc. all seem like better investments.
The stable value fund in our 401K returns only 1.68% for the past 3 years. I heard that other SV funds are doing a lot better (e.g., 3+%). Is that true?
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Old 01-07-2014, 09:24 PM   #50
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The stable value fund in our 401K returns only 1.68% for the past 3 years. I heard that other SV funds are doing a lot better (e.g., 3+%). Is that true?
The SV fund in our 401K has returned 2.03% for 1YR and 2.67% for 5YR but i do not use it.
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Old 01-07-2014, 10:55 PM   #51
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Non-equity = 36% of my portfolio.

32% Vanguard Total Bond Market Index Fund Admiral Shares
4% Cash (savings account)

Looking at some of the other entries here I wonder if I'm oversimplifying, but I really want to keep it as simple as possible. The long-term target is for a 60/35/5 allocation. I plan to re-balance if anything gets much more than 5% out of whack, but not more than once a year.
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Old 01-08-2014, 06:55 AM   #52
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The stable value fund in our 401K returns only 1.68% for the past 3 years. I heard that other SV funds are doing a lot better (e.g., 3+%). Is that true?
This is the closest our 401k offers:
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Old 01-08-2014, 07:51 AM   #53
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Old 01-08-2014, 08:03 AM   #54
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Here's mine. I also have some private equity and REITS, some don't categorize them as equity but I left them out anyway.

Also, I have an extra large cash allocation temporarily because it includes a special tax reserve of ~200k or so (cap gains windfall, i know, first world problems). It wouldn't normally be so large.


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Old 01-08-2014, 08:13 AM   #55
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05.0% Cash
57.5% 5yr CD ladder
25.0% PIMCO Total Income fund
12.5% Schwab equity dividend ETF

To

10% Cash
40% 4yr CD ladder
25% i-Shares intermediate term TBM ETF
25% i-Shares intermediate term corp bond ETF

As CDs mature eventually

12.5% Cash
37.5% i-Shares intermediate term TBM ETF
37.5% i-Shares intermediate term corp bond ETF
12.5% i-Shares global TIPS ETF
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AA = 60/35/5. Expected CAGR = 5.7%. GSD (5y) = 7.8%. USD inflation (10 y) = 1.8%. AWR = 3.0%. TER = 0.5%. Net Port Yield = 1.7%. Term = 36 yr. FI Duration = 4.9 yr. Portfolio survival probability = 86%.
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Old 01-08-2014, 09:46 AM   #56
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OK, I'll bite:

12% cash (Ally)
67% tbm (tax deferred)
21% Vng intermediate term tax exempt (taxable)

Bond/fi is 43% of my liquid portfolio (excluding rental RE)

Duration on both of the bond funds is 5 years(ish). I'm eyes wide open on what could happen if we have a quick rise in interest rates, but I'm still working, so I'm ok with the risk.

Edit to add: I'm planning on building up the cash portion this year as I have to cash in an inherited annuity this year after 5 years of deferral. My plan is to build up a cash buffer large enough to pay off my principle residence, and hopefully at the end of the year, there will be a safe investment to stick this money into that pays about what my mortgage rate is (3.125%). Yes, I am aware of the penfed 5 year CDs.
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Old 01-08-2014, 12:36 PM   #57
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For non-equity, I own various REITs, vanguard's junk bond fund, and in my 401k vanguard's target retirement income fund, which has total us and foreign bond market index funds in it.

My 2014 Roth IRA contribution went into vanguard's junk bond fund. The rest of my Roth IRA is split between vanguard's us and foreign REIT indexes. Next year I may add vanguard's emerging market bond fund to my Roth IRA.

I felt like I had put as much into REITs as I wanted to for right now. So I wanted to put the 2014 Roth contribution into something that takes advantage of the tax protection and was decently priced. I'm not seeing any exceptionally good deals on anything. The junk bond fund seems descent enough. The bonds in the portfolio are not very junky and the duration is low. So I don't expect any interest rise to hit it too hard, and I don't think there will be many if any defaults on the loans.

I think the emerging markets bond fund is also a descent buy right now for my Roth. I may pick that one up next year.

My 401k is 100% vanguard's target retirement income fund and will probably stay that way. It was 100% total bond market index for a few years.

In my taxable account I have thought about adding MLPs but the tax complexity has kept me away so far. I'll probably buy some eventually. I don't think it would be that hard to deal with, I use turbotax.

I've also got a lot of cash in my taxable account. That's where all of my money has been going, except for 2014 Roth contribution, for the last 6 months or so. I plan to keep adding to cash until after taxes are done this year. I'm going to have a large tax bill this year.

All of my equity investments, outside the small allocation in the 401k target retirement income fund, are in my taxable account.
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Old 01-08-2014, 02:26 PM   #58
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Our non-equity portion consists of:
Total bond market 72.1%
Short term investment grade 18.4%
Money market 6.1%
Bank savings account 3.4%
We don't plan on using any of our Total Bond Market holdings anytime soon. Should be longer than the duration of the fund (5.5 yrs). Hopefully time & dividend reinvestment will pay off for us.
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Old 01-08-2014, 03:05 PM   #59
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My total portfolio Asset Allocation is 50/50 Equity/Fixed Income

The 50% FI portion has the following breakdown (in % of FI portion, not total portfolio)

TSP G Fund 38%
Fidelity Floating Rate High Income Fund (FFRHX) 25%
Doubleline Low Duration Bond Fund (DLSNX) 15%
Fidelity Investment Grade Bond Fund (FBNDX) 10%
TSP F Fund 10%
Cash 2%
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Old 01-08-2014, 05:06 PM   #60
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Originally Posted by aja8888 View Post
I can't comment on whether they are currently undervalued as some have had nice runs in the last few years. Personally, I would look at companies that have pipeline operations in the Eagle Ford development in south Texas as the regulatory climate there is vary good.
I also have NSH, since the lows in 2008. If it's good enough for Mr. Greehey, it's good enough for me.

I agree, these are totally different from bonds. I consider them high dividend equity, with exposure to refinancing problems when money is hard to get. I do like it that a GP like NSH benefits from NS selling more shares, since we can be sure that NS will go on selling shares until doomsday.

I just hope that Eagle Ford wells don't deplete too rapidly.

Ha
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