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09-27-2019, 08:45 AM
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#61
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,337
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Quote:
Originally Posted by Markola
OP, I guess it worries me that you have let go your Vanguard PAS advisor in order to DIY. To state the obvious but important caveat, for the projected very long term returns above of any given AA to materialize, the AA needs to remain fixed that long, not fiddled with. 20 - 30 years + are required to allow for some bulls and some bear cycles to happen within each asset class, rebalancing regularly. Some posters here have veins of ice water and DIY successfully but they seem pretty rare in my reading of the forum. Most seem to fiddle every now and then in the attempt to “optimize”, me included, i.e. we end up market timing and, therefore, failing to receive the long term returns. I finally admitted that I tend to fiddle “just one more time to get this right”, plus DW has no interest in DIY investing and wants third party help. So, we hired Vanguard PAS to keep our chosen AA locked in long-term and to advise us through the tricky process of spending it sustainably as we age.
Can you say more about why you ditched your Vanguard PAS advisor and why you are setting out to handle your finances solo?
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@Markola makes a good point here. I'm not advocating for or against, but rather for considering multiple points of view on this important tradeoff. We run our own money, but one concern I have is that we have no plan for the possibility that both of us will become incompetent to do so. Not quite @Markola's point, but close.
Along the lines of @Markola's point I was talking to an FA one time and he said: "Look, I can't beat the market for my customers but if I can keep them from panic selling just once or twice, I will have earned every dime they have ever paid me and every future dime they will pay."
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09-27-2019, 08:59 AM
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#62
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Dryer sheet aficionado
Join Date: May 2019
Location: Harrison Township
Posts: 36
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Quote:
Originally Posted by Markola
OP, I guess it worries me that you have let go your Vanguard PAS advisor in order to DIY. To state the obvious but important caveat, for the projected very long term returns above of any given AA to materialize, the AA needs to remain fixed that long, not fiddled with. 20 - 30 years + are required to allow for some bulls and some bear cycles to happen within each asset class, rebalancing regularly. Some posters here have veins of ice water and DIY successfully but they seem pretty rare in my reading of the forum. Most seem to fiddle every now and then in the attempt to “optimize”, me included, i.e. we end up market timing and, therefore, failing to receive the long term returns. I finally admitted that I tend to fiddle “just one more time to get this right”, plus DW has no interest in DIY investing and wants third party help. So, we hired Vanguard PAS to keep our chosen AA locked in long-term and to advise us through the tricky process of spending it sustainably as we age.
Can you say more about why you ditched your Vanguard PAS advisor and why you are setting out to handle your finances solo?
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Strictly as a cost save. I have no intention of changing any of my investments for the next 4 yrs, so I didnt see the need to pay the advisory fee for those 4 yrs.
I may pick the service back up as I get closer to my planned retirement date. I have many worries about withdrawal strategies, Roth conversions, Tax implications, ACA concerns, SS timing, etc.
I may learn enough over the next 3 yrs to feel comfortable on my own, but if not, I will work with an advisor. Either the PAS or a fee only advisor
I just hope that I am not missing anything that I should be doing right now.
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09-27-2019, 09:05 AM
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#63
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
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In my youth I did not include Cash in my AA as I had a tendency to raid savings for fun and purchasing stuff. Also it was a smaller dollar amount. Today I am retired and my cash position is much larger than in my youth and I don't need to raid it so often. Today it's used mainly for large purchases (car, CCRC entrance fee, cruise etc.).
The nature of Cash seems to change as we age and get more investable assets.
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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09-27-2019, 10:06 AM
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#64
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,927
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Quote:
Originally Posted by downrod
Strictly as a cost save. I have no intention of changing any of my investments for the next 4 yrs, so I didnt see the need to pay the advisory fee for those 4 yrs.
I may pick the service back up as I get closer to my planned retirement date. I have many worries about withdrawal strategies, Roth conversions, Tax implications, ACA concerns, SS timing, etc.
I may learn enough over the next 3 yrs to feel comfortable on my own, but if not, I will work with an advisor. Either the PAS or a fee only advisor
I just hope that I am not missing anything that I should be doing right now.
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Good luck to you. I decided 30 basis points to have all the services is well worth it. One simple way for you to have AA continuity is to pick the Vanguard Target Date or LifeStrategy fund with the AA closest to what you want, put all of your $1.3M in it and don’t touch it for anything. This is what we’ve done with our non-PAS portfolio, e.g. VG Target 2020. When the next bear happens, that fund will quickly rebalance before I can get my paws on it. Also, related to your initial question, that fund’s current cash position is 1.42%.
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09-27-2019, 10:10 AM
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#65
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,232
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I guess it comes down to having ice in your veins when you need to.
I didn't sell in 2000 or 2008, but wasn't retired then.
Dec 2018 was still calm for me. We will see on the next bear market. I have trust in the historical patterns.
__________________
TGIM
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09-27-2019, 10:20 AM
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#66
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Moderator
Join Date: Oct 2010
Posts: 10,656
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Ice in the veins gets you most of the way there. IOW setting and sticking to one set of allocation targets is what really matters. Will 60/40 return less than 80/20 over some spans? Probably. But if you don't go too extreme in your allocation targets, and you rebalance to target occasionally, I really do think that you're getting most of what's available.
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