New beginnings

[MooreBonds]

Due to a previous lax approach to internet anonymity, as well as a hyperspace jump to FIRE status from a healthy year income-wise, I will be moving on to a new ID on the ER board:

MooreBonds

A play on both my favorite Bond character (Roger Moore) and an inclination to more fixed-income allocations as I start the prep work to FIRE myself in the next 5 years.

the poster formerly known as Peter76

[yakers]

So what % of your AA and what type of bonds/fixed assets do you have?

[MooreBonds]

Quote:

Originally Posted by yakers So what % of your AA and what type of bonds/fixed assets do you have?

I've gone through various adjustments in my speadsheets to determine just what categories to track, given that you can argue that things like utilities/REITs could be in a quasi-fixed income (part equity, part inflation hedge, part 'relatively' fixed-income), and just how funds like Wellesly would be categorized. However, given that I'm currently 29, I'm trying to keep myself from going too conservative at the present:
% of Net Worth / Current pre-tax yield
1.07% Utilities, 4.6% (will be increasing to about 2%)
8.81% REITs, 7.2%
8.38% Commodities, 5.2%
9.18% Municipal ETFs, 5.6%
18.72% Preferred stock, 8.4%
3.38% Closed-end bond funds, 7.7%
2.47% Individual Corporate Bonds, 9.2%
9.51% I-Bonds/Treasury Inflation Indexed Bond, 4.40% (avg 3.38% fixed + CPI)
61.5% Total, 6.7%...or, for argument's sake,
43.26% "Traditional" Bond fixed-income holdings, 5.3%

Hmmm..now that I update my AA and look at the above numbers...I'm starting to wonder if I should go for a name change to include some more equity exposure?

Why do I include commodities/REITs/Utilities in my quasi-fixed income? If you include inflation-indexed bonds as "fixed income", their ultimate yield will depend on the movement of commodities. While equities of oil and coal producers will not perfectly mimic the movement of commodities (and while there are many other components to your CPI than just oil), and although utilities and Real Estate are likewise imperfectly correlated to inflation, I figured it was worth a shot.

[yakers]

That looks like top honors for fixed income management around here. Quite elaborate, diverse and pretty good return. Way over my head. Because of time, lack of substantial amounts to invest, and just not that much ability, I mostly stick to market wide index funds. My main deferred comp fund is a target retirement type fund. I do have some DRIP stocks and a few ibonds. My wife's 403b is in Wellesley, just where it should be for her.

I'm not sure I read the post correctly, is this the fixed income portion of your portfolio or all of it? I can't imagine being 29 and not holding 50%+ equities, although I'm not knocking that return at a fairly low risk level, but if stocks were to shoot up some gain would be missed.

[MooreBonds]

Quote:

Originally Posted by yakers That looks like top honors for fixed income management around here. Quite elaborate, diverse and pretty good return. Way over my head. Because of time, lack of substantial amounts to invest, and just not that much ability, I mostly stick to market wide index funds. My main deferred comp fund is a target retirement type fund. I do have some DRIP stocks and a few ibonds. My wife's 403b is in Wellesley, just where it should be for her.

In 2000, I grew sick and tired of losing my ass(ets) over the previous 7 years as I started my experience in investing at the ripe young age of 16, and seeing my net worth rise and fall in almost perfect damped oscilliation sinusoidal movement (start at breakeven, drop 50%, rise to breakeven, drop 45%, rise to break even, drop 40 %, rise to break even), so I thought the relatively 'consistent' 6-8% returns of Munis, bond funds and REITS looked pretty damn good. Over the past 2 years, I pretty much put about 90% of my new money into equities (DRIPs, foreign ETFs, and even admitted that Wellesley and Wellington would be good additions). Perhaps if I admitted that I knew less than I did and didn't have time for it, I would have followed your path in my youth and would be at an even better position now than I am. But, such is life.

Quote:

Originally Posted by yakers I'm not sure I read the post correctly, is this the fixed income portion of your portfolio or all of it? I can't imagine being 29 and not holding 50%+ equities, although I'm not knocking that return at a fairly low risk level, but if stocks were to shoot up some gain would be missed.

The %ages on the left are the % of my total net worth. The %ages on the right are the yields (pre-tax). Yes, I hold 56.74% in "equities", although you could argue that some funds (like the ETFs that write covered calls on indexes and throw off about 7%-8%/year in dividends/cap gains/return of capital) are starting to blur the lines between equity, index, blend, hybrid, etc..