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Old 03-24-2017, 02:18 PM   #41
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bonds are the same thing as CDs in your scenario - loans that will be paid back some day. At least with CDs you don't have to worry about getting paid back if they are FDIC insured.

Many people choose to diversifying using both equities and fixed income (bonds, CDs, cash).


I would concur most reasonable people consider CD's a low risk investment....Even the Wall Street Journal calls them an investment. Anything thing else degenerates into an academic nerd fest food fight.
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Old 03-24-2017, 02:23 PM   #42
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I certainly don't think about any "moving parts". I simply take all distributions in cash, withdraw my annual income, and rebalance the portfolio. Those are the basic mechanics.
@audreyh1...

When you say "all distributions", are you referring to dividends *only*? No cap gains?

Thanks.
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Old 03-24-2017, 02:46 PM   #43
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My last 6% CD I signed up for was 2007. Give me that yield and the inflation rate of today or 2007 and you would quickly be hearing about at least one forum member who is 100% invested in CDs.
I'd take that with even the 2007 inflation rate..
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Old 03-24-2017, 02:59 PM   #44
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@audreyh1...

When you say "all distributions", are you referring to dividends *only*? No cap gains?

Thanks.
No - in my case I really mean all distributions - dividend and cap gains distributions - are left in cash until I do my annual withdrawal and rebalance in Jan. Once I rebalance, the AA is back to where it is supposed to be.

This is simply a tax efficient way of handling distributions. I need to draw income from my portfolio in Jan, and almost all of my cap gains distributions are paid in December. So I don't worry about reinvesting them until I rebalance, and I don't rebalance until after I take my annual withdrawal.

I'm a total return investor, not an income investor. I don't care whether a distribution is interest/bond dividend, stock dividend, or cap gains distribution. I only care how much the total portfolio has increased or decreased over the year. I withdraw a fixed % or the portfolio each Jan based on the Dec 31 value.
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Old 03-24-2017, 03:40 PM   #45
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I've been wondering what happened to obgyn. I remember being frustrated with him, because he was talking about his fixed income instruments as if they would yield the same growth as a portfolio containing equities. I finally got him to concede that his plan was based on being able to save a particularly large sum of money, being satisfied with a conservative WR, and not expecting his portfolio value to keep pace with inflation over the long term.

I have no problem with anyone being in all fixed income, provided the long-term expectations are realistic...
Yes, obgyn has been absent for a while.

People can invest money their way. It's their money to do as they wish. As long as they do not say theirs is the right and only way, who am I to say that mine is better.
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Old 03-24-2017, 03:53 PM   #46
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He is still active on Bogleheads, effectively retired, and working on his medical philanthropy.

Prodigious saver.

E.T.A.--his last Bhead post was Nov. 2016. He works part-time, still extremely conservative investments.


Thanks for the update. I've wondered how he's been --and whether he still has his pppppssssssst Wellesley.

I do!
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