Quick Asset Allocation Question

[Souschef]

I have most of my stash in equities, and have done OK. I am blessed with having more than we need.

I have been upping my donating to charity, to help the less fortunate: Homeless shelter, local food bank, etc. There is a feeling of satisfaction for helping others, not an ego thing, but just a nice feeling.
I just got a newsletter from the homeless shelter with a picture of the handicapped shower my donation bought being loaded into the shelter. Admittedly, they acknowledged my donation, but nobody knew how much it was.

 

[Koolau]

I have most of my stash in equities, and have done OK. I am blessed with having more than we need.

I have been upping my donating to charity, to help the less fortunate: Homeless shelter, local food bank, etc. There is a feeling of satisfaction for helping others, not an ego thing, but just a nice feeling.
I just got a newsletter from the homeless shelter with a picture of the handicapped shower my donation bought being loaded into the shelter. Admittedly, they acknowledged my donation, but nobody knew how much it was.

It's a good feeling indeed. Hard to find any better way to spend (or is that 'invest') money than to help others.

 

[RetireBy90]

To op question, I look at the AA as a function of what is the investment timeframe. Most would suggest saving for retirement in 20s and 30s should be heavy on equities due to 30-40 year timeframe. Then as the timeframe shortens in your 50s start moving to more fixed income and less equities.
My timeframe is long term as most of stash is for after we pass. If you don’t plan to get anywhere near using your stash then i would ask what is the timeframe for your investments.
DM had about 1/2 of her stash in a Fidelity account I managed and the other half with a FA at Wells Fargo. She had income to meet her needs so I tried to get the FA to do a 60/40 AA but they said no, she is too old for that. My point was that her investment timeframe was about 30 years.
Just one way to think about your AA, but works for me

 

[ZachTB]

The other thing to understand is that volatility is NOT risk. Risk is a stock that goes down in price and stays down, producing losses for the owner.

The place volatility and risk intersect is "Sequence of Returns Risk," fondly known around here as SORR.

Bingo.

 

[gayl]

Don't you just hate it when their computers stick out some algorithm that states someone is invested too aggressively! My Schwab Advisor stopped trying to discuss that with me (87/13 moving to 85/15). I'm really just trying to do 3 things: (1) build legacy estate (2) keep kids in their homes instead of mine throughout pandemic (3) start each GCs Roth when they get their 1st real job. Pension covers everything but travels / SSA will cover trips.

 

[OldShooter]

Don't you just hate it when their computers stick out some algorithm that states someone is invested too aggressively! ...

I agree, though I think some of it can be blamed on the majority of investors in Schwab's book, very few of whom are at the investing intelligence level of this group. The cardinal sin would be a rep who pressed the point when dealing with an investor like you.

They mean well. A few years ago I ran an experiment with Schwabs new (at that time) robot. I had to game the investor questionnaire for quite a while before I found the set of answers that maximized equities and minimized cash and fixed income. A few months later I got a call from an actual Schwab person who was planning to counsel me on risk, the computer noticing that I am an old fart and assuming this $100K was my entire stash. That was totally appropriate IMO, but when I told him this was a single digit percentage of the portfolio and that I really did know what I was doing, we had a nice conversation and that was the end of it.

 

[gayl]

I'm on my 3rd new guy. Until he is promoted (which usually means a different office) The mgr continually tried to stick me with someone 'upstairs' until I got him to understand that newbies listen and others ass-u-me that I'm too aggressive and need to retreat to 60/40. I've excused myself and walked out of a few upstairs appointments

I really just need someone to help me run the Monte Carlo to see if 6 grandkids' inheritance is on track

 

[ZachTB]

Don't you just hate it when their computers stick out some algorithm that states someone is invested too aggressively!

Don't blame the algorithm; it was doing what it was designed to do. Blame the people who a) treat the results with insufficient nuance, or b) decided on the assumptions in the first place.

The algorithm is just an inanimate tool. Ultimately, it's the people who are involved with the project, and/or the personal advisors, who are using it incorrectly. (Or the programmers who took some liberties, but that's doubtful.)

 

[gayl]

Don't blame the algorithm; it was doing what it was designed to do. Blame the people who a) treat the results with insufficient nuance, or b) decided on the assumptions in the first place.

The algorithm is just an inanimate tool. Ultimately, it's the people who are involved with the project, and/or the personal advisors, who are using it incorrectly. (Or the programmers who took some liberties, but that's doubtful.)

[emoji106]