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WilliamG · 11-19-2003, 09:18 AM

Thanks Ted and Alec for taking the time to reply.

Yes, Alec, I was fortunate enuf to get a wad of I Bonds at 3.4 and 3.6 rates. These comprise 7% of the 8% I noted as allocated to Treasuries. The other 1% is a 5 year note I also bought in the same time period that will be maturing in 2005. It will mature when we will probably be needing to buy a new car. I try to incorporate a 3-5 year cash flow into my allocation planning as well as general diversification goals.

Both of you seem to think my "cash equivalent" or short bond allocation is too high. I have been influenced by Frank Armstrong and others who say longer maturities do not adequately compensate for higher risk. Also, a major purpose of this allocation is to have for liquidation in down market. Frank says to have enuf for 5-7 years, so that is how I came up with the allocation targets for cash, Treasury Direct and Short Term Corporate. Guess you guys don't agree with this approach? If not, weren't the years 2000 thru 2002 a challenge for raising spending money from a retiree's portfolio?

Thanks again for your feedback... William

11-19-2003, 09:18 AM	#6
WilliamG Recycles dryer sheets Join Date: Nov 2003 Location: Charlotte Posts: 254	Thanks Ted and Alec for taking the time to reply. Yes, Alec, I was fortunate enuf to get a wad of I Bonds at 3.4 and 3.6 rates. These comprise 7% of the 8% I noted as allocated to Treasuries. The other 1% is a 5 year note I also bought in the same time period that will be maturing in 2005. It will mature when we will probably be needing to buy a new car. I try to incorporate a 3-5 year cash flow into my allocation planning as well as general diversification goals. Both of you seem to think my "cash equivalent" or short bond allocation is too high. I have been influenced by Frank Armstrong and others who say longer maturities do not adequately compensate for higher risk. Also, a major purpose of this allocation is to have for liquidation in down market. Frank says to have enuf for 5-7 years, so that is how I came up with the allocation targets for cash, Treasury Direct and Short Term Corporate. Guess you guys don't agree with this approach? If not, weren't the years 2000 thru 2002 a challenge for raising spending money from a retiree's portfolio? Thanks again for your feedback... William