marko
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Pretty much just moving from some life funds that were slowing down due to their drift to bonds and going to some funds with more equities
Portfolio Tinkering
- Thread starter Ed B
- Start date
Texas Proud
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Then why be in life funds? Might as well go for fixed allocation funds so you do not have to tinker...
marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Moved FROM life funds.
RetireBy90
Thinks s/he gets paid by the post
I have the same issue. My "fix" was to stick to the AA in the retirement funds and set aside some after tax savings in my "tinker" account. I have done very well sometimes and really poor others. Some really stoopid mistakes and lucked into some good calls. I enjoy listening to business news and watch CNBC most days (I work from home so CNBC keeps me company in an otherwise quiet home.) I can jump online with the latest news and react if I want or even try out new AA ideas in my "tinker" account. Doing this allowed me to leave the retirement savings alone and let them grow.
FWIW
To me, there are two types of tinkering.
1. To fix something that was just a plain bad idea. It's in the eye of the beholder, but it could be anything from changing your stock/bond allocation (it turned out my risk tolerance wasn't what I thought it was) to what was I thinking by investing in candlesticks? It could be what I did a year ago to rearrange what I have in my tax advantaged accounts vs. my taxable accounts in order to minimize taxes.
2. To tweak around the edges. I have my AA, I'm happy with it, but I still like to fiddle. So, either set aside a small account purely for playing around with or within your main account. Maybe no more than 5% of your total holdings. Satisfies the need to tweak without the possibility of doing too terribly much damage.
1. To fix something that was just a plain bad idea. It's in the eye of the beholder, but it could be anything from changing your stock/bond allocation (it turned out my risk tolerance wasn't what I thought it was) to what was I thinking by investing in candlesticks? It could be what I did a year ago to rearrange what I have in my tax advantaged accounts vs. my taxable accounts in order to minimize taxes.
2. To tweak around the edges. I have my AA, I'm happy with it, but I still like to fiddle. So, either set aside a small account purely for playing around with or within your main account. Maybe no more than 5% of your total holdings. Satisfies the need to tweak without the possibility of doing too terribly much damage.
KevinC
Dryer sheet wannabe
Admit it ! You are powerless over tinkering ! And your life WILL become unmanageable !!!
Ed B
Recycles dryer sheets
I am ready to do this. Now I need to trust in a power greater than myself, the long term providence of Mr. Market, to restore me to sanity.
I invest 20% in stocks. And it's been the same stocks over the past five years or so. But before that I was trying to "tinker" bought TASR, CAT, XOM. All three taught me the same valuable lesson, but I needed to know what I thought I didn't know..that I cannot beat the market, and I can't pick winners for snot.
But the tinkering DID teach me some valuable lessons early. I sort of view it like this... If I am willing to take 20% of my assets and tinker, than I better be willing to take a 20% cut in my Quality of Life when said tinkering fails me.
Kinda goes back to risk tolerance for me. I can tolerate risk, but I don't know where the risk is so I've just stuck to MMM, AAPL and CASY stock. Only one has outperformed the market since I bought it and you can probably guess which one.
But the tinkering DID teach me some valuable lessons early. I sort of view it like this... If I am willing to take 20% of my assets and tinker, than I better be willing to take a 20% cut in my Quality of Life when said tinkering fails me.
Kinda goes back to risk tolerance for me. I can tolerate risk, but I don't know where the risk is so I've just stuck to MMM, AAPL and CASY stock. Only one has outperformed the market since I bought it and you can probably guess which one.
SumDay
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I too suffered from this disease. My fee-only planner has shown me enough examples of the error of my ways to FINALLY make me knock it off.
I'm retiring tomorrow, and I'm hoping I don't continue to think about my portfolio as much as I do now. I want it to go to the back of my brain and just sit there until my annual rebalance.
You can do it! Admitting you have a problem is the first step.
I'm retiring tomorrow, and I'm hoping I don't continue to think about my portfolio as much as I do now. I want it to go to the back of my brain and just sit there until my annual rebalance.
You can do it! Admitting you have a problem is the first step.
mpeirce
Thinks s/he gets paid by the post
I do this too. I designated one of my IRAs and have a few individual stocks in there that I "trade" - actually I only trade every couple of years. The IRA is nice because I can ignore taxes.
The best part of this is that it sets a floor for your losses. That's important if you are living off of your investments!
I pay an expert to tinker with mine. He is worth it -
Curious if you use a RIA or one of the Wall Street firms? Also, do you mind mentioning what you pay all in?
I don't really have a set AA at this time as the majority of our assets are rental properties. What we do have in the market at this time (about 20% of our total nw) is 84% equities/16% cash. Of the portion in equities, about 42% is in individual stocks (only 7 stocks). I may take a good portion of that and move it into the newer factor ETFs that Vanguard has. However, if I do this, I'm not sure I want to leave myself with even fewer stocks, and I don't really want to sell Apple...
Once we sell the rental portfolio, I'll probably have an AA of 60/40 or 65/35 and keep some of the equities out to play with. Or, I may keep a percentage in alternative assets as well. Hmmm...
Once we sell the rental portfolio, I'll probably have an AA of 60/40 or 65/35 and keep some of the equities out to play with. Or, I may keep a percentage in alternative assets as well. Hmmm...
The article in the link does not say that 90% of investment return is attributed to AA, it says that 90% of variability is due to AA. I assume by AA, you mean rebalancing to a specific AA.
The benefit of rebalancing to a fixed AA has been debated a lot but I think most people believe the effect on returns to rebalance is minimal. You can test this yourself using Portfolio Visualizer. I ran a simple test and found that with rebalancing to a 60/40 AA the portfolio ended up about 1% higher after 40 years than the same portfolio that is not rebalanced.
COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Rebalancing does not add to return. It keeps you aligned with your desired risk.
As far as AA, what asset class you are in matters far more than what investments within that class you are invested in. So in that sense your AA does matter and will effect your overall return
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
+1
Sometimes the rebalancing discussion concentrates on return only, but agree with you the desired risk or effectively how much loss is one comfortable in a downturn market drives me more for the rebalancing to one's stated AA.
No tinkering here, I'm too lazy. My investments are aptly named: Couch Potato Portfolio.
