2008 portfolio changes

[AltaRed]

Maintain current AA, but gradually increase my exposure to index ETFs, buy a few beaten down stocks (financials) at the right time and gradually decrease my exposure to legacy managed (somewhat) high MER mutual funds.

 

[Surfdaddy]

Less international, dialing back REIT's to no more than 5% of the portfolio, reallocating to growth and small cap value

Isn't dialing back REITs just when they're down sort of like selling at the bottom of the market? Are you market timing?

 

[audreyh1]

It looks like I need to rebalance.

Gosh - I'm getting killed with distributions again! One fund paid out 7%! Another even more, I think. Taxes on the portfolio are going to be expensive again this year.

I took some steps earlier this year to increase the tax efficiency of my portfolio, but there is only so much you can do without changing the risk profile of your portfolio or incurring other tax consequences. Oh well.

No changes in basic investment strategy.

Audrey

 

[audreyh1]

Isn't dialing back REITs just when they're down sort of like selling at the bottom of the market? Are you market timing?

Yeah - better to hang to on what you already paid for.

I'll be adding to my REITs for the first time in many, many years since they've been beaten up so badly this past year.

Audrey

 

[BigBob]

I will be bumping up my bond exposure. I am headed down the 8 year home-stretch and will be tapering off my equity purchases.

 

[Retire Soon]

I'm presently 50%stock and 50%bonds/cash and plan no changes this year.

 

[growing_older]

My work is changing 401k providers in January, so I will probably need to rework the entire portfolio around whatever is the best (least-bad) option available there. Luckily I'm heavy on tax advantaged accounts, so can adjust most holdings without tax consequences. I'm going to be making lots of changes early 2008 but really trying to get AA back to what I wanted before the 401k switch. I'm thinking my goal is only rebalance every other year or so, but with all the fiddling, I may as well rebalance now. My AA was planned for long term investing, so I'll try to keep it the same.

 

[In-control]

Annual re-balancing of funds which have run up ~10% above my target allocation. I try to move $ as little as possible to reduce cap. gains tax's. I have all of the interest/div./cap gain distributions sent to my MM. I use that to build my budget 4 years from now - then create a 3 yr CD from it. This yearly harvesting not only locks in 4 years of living expenses but I get 5-6% interest on the $ - keeping the budget inline with inflation.

Since I am ER'ing on 12/31/07 I will be moving my 401k plan from Fidelity to Vanguard. The costs are significantly lower.

 

[walkinwood]

I plan to add REITs finally.

I've also been looking at adding international small cap to my portfolio, but haven't decided on it yet. I also don't have any emerging market targeted fund, so that's a possibility too. If I do this, I'll trim my international equity holding to to accommodate these additions.

Since we are ERing next year, and expecting significant inflow in early 08, I'll rebalance equity/bond to 65-35. We're in our mid-late 40s, so can go back to working if the market is too volatile.

I haven't changed my allocations for 5 years, but am convinced now that REITs have a place in my portfolio. Probably 5%.

Oh' and I've turned off automatic re-investment. That was the first preparing for ER step. Sent shivers down my spine.

 

[AltaRed]

Oh' and I've turned off automatic re-investment. That was the first preparing for ER step. Sent shivers down my spine.

I did that as well upon retirement and feel a lot better about it. I now control my cash flow decisions.... not some arbitrary reinvestment scheme. There was nothing more frustrating than having a big distribution get re-invested back into that stock fund which may have needed re-balancing anyway.

 

[mountaintosea]

Basically I'm selling some loser stocks. With the cash outs this year from left over vacation and holiday time, I'm going to be paying Uncle Sam and the state a little more this year.

 

[youbet]

, buy a few beaten down stocks (financials) at the right time .

Please, please let us know when the right time is!! Not knowing what the right time is has cost me big bux over the past few decades!

 

[poyet]

2008 adjustments

I've sold off today 90% of my small & mid european caps, guess the ride which started in July 2003 is over. The CAC40 has also already started to take the dive, though still the first to do so as DAX30, FTSE 100 are not yet bear, so I'll wait a bit on large caps to see what's next...
I'll add some US REITs & REITs based income funds (e.g. RIT, IGR, JRS) when they'll turn bull (obviously not yet) and some US regional bank stocks and ETFs when they'll turn bull (obviously not yet) and will add some div paying ETFs as I think we will have in 2008 a good opportunity to add good beaten stocks with significant yields when all this subprime mess will be over.
We'll have to keep an eye on US small and mid caps as the RUT is a bit worrying right now but I have a different perspective as I buy with euros at a bargain !

Some ideas to share with you and wish the best to you.

 

[Nords]

I've sold off today 90% of my small & mid european caps, guess the ride which started in July 2003 is over.

Good to hear from you, poyet, it's been a while!

But enough about your trading-- how's your software been doing?

 

[poyet]

Things are fine Nords

Good to hear from you, poyet, it's been a while!

But enough about your trading-- how's your software been doing?

Everything's fine Nords, good to spend some time with you again. Things have been pretty hectic, my elder daughter has left France and works in DC after earning her MBA @ URI, I'm building a new 26 inches cassegrain scope, I've observed double stars and computed new orbits, thinking of another scope on top of the Oukaimeden (2750m) Marocco, soon will go skiing, etc...

Trading, and the software manages 10% of my portfolio (which itself is just 13-14% of my assets the remaining being RE). So, even if it is a project I'm very committed to its impact on my NAV is limited though ! The software has performed rather well, though we've missed a stronger trend. Did not succeed to get any "customer" to start a fund, frustrating...

The thread was more on global portfolio reallocation, i.e. investment, kind of positions you do not change very often. And that's what I'm focused on at the moment, as momentum is waining out of the market right now (at least in europe). Every month I run a Metastock explorer of mine to sort 187 ETFs in "Bull", "Bear", "Neutral" to get a feel of what's going on (it takes less than 5 minutes) and tend to maintain my cash level to the "bear" ratio, i.e. if 10% are bear I am 10% in cash. I'm currently raising my cash level to match the increase observed in the bear ratio which stands at 32% (e.g. european small & mid caps, Japan, US REITS, financials, banks, high yield & dividend stocks, consumer discretionary, small Value, Midcap Value, etc..).

Selling european small caps funds which I had in portfolio for more than 4 years and on which I doubled is not an easy decision. But that's done. Selling Japan was more frustrating as gains have been offset by the erosion of the Yen against the euro, so I'm not even sure to make gains on all positions in the end... etc.

I want to raise cash to buy REITs, US banks & financials & high yield dividend equity funds (as I'm getting older and want to secure more cash streams) when it will be time to do so, next year ? the year after ? we'll see but to keep things simple when the ROC(MM200) > 0 and Close > MM200 ! From what I see, it will not be next month for sure

I like lurking a bit the boards as I get ideas from you. I was a bit annoyed to have missed the start of the shipping stuff, but I'll keep an eye on it.

So, here are some news. Hope everything was fine with you all.

Cheers

 

[Nords]

Trading, and the software manages 10% of my portfolio (which itself is just 13-14% of my assets the remaining being RE). So, even if it is a project I'm very committed to its impact on my NAV is limited though ! The software has performed rather well, though we've missed a stronger trend. Did not succeed to get any "customer" to start a fund, frustrating...

It'll be interesting to see how that performs over the long term.

As for small-caps' recent drop, I think more long-term performance is still there and this is a buying opportunity for asset allocations...

 

[poyet]

It'll be interesting to see how that performs over the long term.

As for small-caps' recent drop, I think more long-term performance is still there and this is a buying opportunity for asset allocations...

Nords, you talk of US small-caps I guess ? I mentioned european small & mid caps. So far I've kept my US small and mid caps.

 

[jblack]

1. ramp up international (prob thru taxable VFWIX or VGTSX) from ~10% to 20%
2. add onto an older REIT position to move it back up to 5%
3. begin to look more closely at total household AA for my and DW's multiple savings/retirement accounts - only basics covered so far

 

[kat]

I'm moving some bond fund $ to a traditional IRA, out of taxable. Most of it will still be in taxable, which is okay since I'm spending the distributions but I wanted to lower the tax bite a bit.

Along with that, I am re-purchasing a tax managed small cap fund in taxable, moving that allocation out of tax deferred.

I had made changes in my port this year when I decided to purchase a tiny cottage on three acres in the mountains I love. Got it at a great price. Plan to sell it in 35 years. I look at it as a way to turn my "virtual money" at Vanguard into money I could enjoy.

After making changes to take out funds to buy the cottage, I found myself focusing too much on distributions instead of total return. That Vanguard paper on total return made sense to me, and I read it at just the right time. So I'm finishing off this cottage buying period by putting small cap back in taxable and putting some bonds in deferred.

85% of my assets are in taxable accounts, so I've had to be thoughtful about what I put in deferred.

 

[calmloki]

In a move toward greater free time and less responsibility i hope to sell a couple smaller multiple units out at the fringes of our rental perimeter. Current theory has us doing a 1031 exchange into one nice single family rental unit down in the warm-but-property-value-crashing country called SoCal and renting it out for some period of time over a year. Maybe sometime after a year or so has gone by we might end up living there.... Maybe another 1031 into a bit of country property up here - looked at 15 acres on a paved road with a bunch of trees and sky 2 miles out of town. Has a couple crummy mobiles on it that could be rented for a while and maybe down the road a couple or three years we might take up residence there - maybe do some house building in the meantime. Thinking that snowbirding might not be such a bad thing... It's bad - wanting to sell off the income producing rentals, but attracted by the scent of property bargains.
Oh. maybe buy an index stock if i can bring myself to believe that the buying opportunities are as good there as in real estate.

 

[Eagle43]

Well, we hit the big 65 next year. No changes; about 40% equity/50% bonds/10% cash.

 

[Nords]

Nords, you talk of US small-caps I guess ? I mentioned european small & mid caps. So far I've kept my US small and mid caps.

Yep, sorry, we're keeping the U.S. ones. Haven't chased down any European ones.

If I remember right Tweedy, Browne Global Value has been doing a lot of selling in Europe this year (10% of the share price will be distributed as cap gains). They sell when a share price hits "fair value" but they don't select for a particular market cap.