@Derf - Not a bad idea, except mortgage interest rates have rocketed up over past couple years. I actually have a small 3% refi mortgage taken out 5-6 years ago for some remodeling. Hell can freeze over before I’d pay it off. Today you’re probably looking at around 7-8% 6% on any kind of mortgage refinance.* Not an attractive risk / reward proposition IMHO.
* One source I checked shows 15 year fixed refi loans (national average) currently at around 6%.
Umm … maybe. Proceed at own risk! :)

So the cash bucket certainly needs to be adequate to cover 3 to 5 years of those normal expenses.

@Old_Joe - Nice detailed job outlining conventional wisdom. But ISTM that’s exactly the notion the author is arguing against. If I’m reading him right, he thinks the risk of losing out on potential market gains while sitting on that bucket of cash is greater than the risk of having to pull that money out on a “as needed” basis when markets are lower. (That’s because markets usually go up)
It should be noted,
(1) the article is from 2020 when cash yielded 1-2%, much lower than today’s near 5%.
(2) His recommended “investment” portfolio is quite conservative with up to 50% sitting in intermediate-term Treasuries / TIPS.
Enjoying all the thoughts folks!

One thing I noticed. When I retired I planned for about 55k/yr expenses. Now retired 17 years I found I'm averaging 73k+/yr. Some of that is inflation but what adds up is the new cars, new roof, new boat, some large xmas gifts to the kids. i.e. those big expense items spread out over the years add several $k per year to your budget. ADD: I guess some of that additional spending is because I feel comfortable with my results so far.

While the Treasury yield-curve is weird. It has an unusual dip in the belly. It seems that an inverted yield-curve is trying to normalize (to up-sloping), but the Fed has literally fixed the short end.
https://www.ustreasuryyieldcurve.com/

This doesn't exactly align with the belly, but I found it interesting that most yields are still significantly above where they were at the start of 2023 except for 1 - 7 year maturities where they are the same as 2023 (at the low end of that range) to 1/4% higher at 7 years.
In other parts of the curve, the current yields are around 1% higher now at the short end (1.5% higher at 1 mo.) than Jan 2023 and around 1/2% higher at the long end. If one squints just right, that seems to follow the same contour as the yield curve itself.
This might just be another way of saying that the yield curve is flattening, or as you put it, on its way to transitioning from an inverted curve to a normal curve.
ov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2024

Catch22, I believe you’re half right regarding FZDXX (FZEXX-muni sister). Yes, you have to purchase like a MF but you do not have to sell to buy. I’ve been using one or both of these MM funds for several years. And never did I have to sell to buy anything. It first checks your core account for sufficient funds, then pulls from FZDXX / FZEXX if necessary.

Yep, and that's a nice advantage over VG NOT searching for and pulling money from any
other MMkt a/c's other than your Settlement a/c, making VGBUYs a 2-step process at times.
On FZDXX Minimums: We have owned FZDXX in EVERY taxable and IRA a/c that we either own or manage for friends and relatives for as long as we can remember. NEVER has Fidelity held us to the stated minimum for FZDXX in the respective a/c's. In some a/c's we have as little as $25 in FZDXX, and have had that piddly amount for over a year!
Note that some of those a/c's are for persons NOT regarded by Fido as Preferred Customers.
VG conversely does routine sweeps related to MMkt and Admiral shares Mins, and adjusts your holdings accordingly.

FWIW to the naysayers of CDs, my CD ladder has outperformed gem fund RPHIX for the past 3, 5 and 10 years with no market risk and guaranteed, FDIC'd interest payments.

The author disagrees with the often recommended notion of stashing away 3, 5 or 10 years spending in cash or short term treasuries to ride out potential market downturns. It’s a popular notion often recommended here and across the financial press.
His investment portfolio: ”Beyond cash, all a retiree needs is one ‘bucket’ for investments. The portfolio would hold between 50 and 75% in equities for those following the 4% rule or similar retirement spending strategies. The remaining 25 to 50% would be held in intermediate term Treasuries and TIPS.”
I’m pretty much in agreement with @Crash. I generally don’t bother to maintain a bucket at all, but sell / withdraw from investments “across the board” two or three times during the year for basic needs or major expenses. If the markets get a little “crazy” on the upside, I may pull out an entire year’s spending ahead of time to lock in that extra return. During withdrawals I also rebalance, taking a higher percentage from those assets that have appreciated the most. (I am aware that some here refute the notion of rebalancing at all. )
But your position is probably different. My pension (with some limited cola) and SS (inflation adjusted) could probably cover basic necessities (but not infrastructure maintenance, travel, new vehicles). So I can’t put myself in the position of those who live entirely off investments. It’s a huge difference and so “buckets galore” might well be the preferred route for them.
FWIW - I only started keeping accurate year-by-year records in 2007 (but have some generalized averages from before). Beginning with 2007 (the past 17 years) I’ve had three “down” years. Two resulted in single-digit losses. But ‘08 was nasty with a loss of over 20%. That suggests to me, anyway, that a large cash stash isn’t warranted. To wit - this simplistic analysis overlooks both the magnitude and the duration the market downturn that began in 1929. A multi-year downdraft in equities of that magnitude would inflict greater pain. (But there’d be other more serious issues to worry about.) Recent downturns have been much shorter and may have given some of us a false sense of security. Also, the Japanese experience in the 90s and afterwards should sober any who look at it.

Well... If I required of myself (and spouse) that we set aside and grow a segregated bucket full of money sufficient to cover 3 to 5 years' of expenses, I'd never be able to invest, period. So that whole bucket-stuff matters not to me, one iota. The best plan for us is to invest, prudently, for the long haul. We certainly are better off than if we were struggling to fill a pail carrying 5 years' worth of money to cover what we need for that time-period.
Each of us is dealt whatever hand we are dealt. From there, we make choices, and make the best of things. I'm feeling rather fortunate these days--- with zero buckets in the mix. Yes, this stuff in general is indeed very personal, after all is said and done. Using buckets in my case would be like attempting to make a Scientist out of me. I'm not cut out for it.

We're in danger of getting into a semantic swamp here with respect to the cash bucket. What exactly is a "normal" expense vs an "unexpected" expense?
To me, a "normal" expense is something that is predictable: a new roof, other major homeowner maintenance, typical major vehicle maintenance, and obviously the normal household operating expenses, including taxes, insurance, food, etc.
So the cash bucket certainly needs to be adequate to cover 3 to 5 years of those normal expenses. We knew well what those normal expenses were because at an early accumulation stage we kept good records of our ongoing expenses, sorted by category, so that we could separate the necessary from the optional. Optional? Things like vacations, restaurants, wine and liquor. Keep records like that and after 3 or 4 years you pretty well know what's necessary and what's optional.
An "unexpected" expense could certainly be a major medical liability or other tragedy not covered by insurance. Since something like that is unanticipated and unpredictable, frankly I don't really know how to protect against that in advance. Worst scenario it might be necessary to partially draw down both buckets for something like that.
All of this depends of course on what the normal expected income is. If the income is greater than the normal expenses, then there is, to an extent, a cushion there in case of disaster.

Thanks Yogi. Way back from 2010. Seems in that interview, Evansky was a proponent of 2 buckets. I think he said 2 years cash and the standard 60:40 portfolio. I could hear Christine late in the interview almost edging him on for the idea that more buckets may be better. Maybe I was reading into her intentions. My opinion, stick with KISS.

That's a good article and video @hank. He seems to be a proponent of 5 years cash and then a portfolio of 50%-60% equity. Well, that seems to me to be a 2 bucket system. Maybe it's just semantics. But his ideas are in line with mine, a cash buffer bucket and then a moderate portfolio bucket. I don't think you need anything fancier unless you are more comfortable separating bonds/income from your equity bucket. Everyone's brain categorizes differently.

In term of cash flow, the cash bucket is secured based on your annual living expense minus social security and pension $ for say 3-5 years. Emergency house/car repair can be factored into that cash bucket and back fill that over several years.
Some people have a second bucket in between consisting of bonds and balanced funds to dampen the market volatility and the possibility of prolong drawdown. Dividend growth funds can be part of this strategy. You can decide the % that you feel comfortable to fill the cash bucket every year. Personally, I use both balanced funds and dividend growth funds.
The third bucket is consisting of stocks/stock funds for capital growth.

I started buying brokered CDs at Fidelity because the yields are higher, they are easy to purchase, and it’s a convenient way to build and maintain a ladder. My credit union used to offer very competitive rates but has not kept pace over the past couple of years. They are finally offering one-year CDs yielding 5.1%, but their longer term issues are running 1-2% lower than Fidelity’s offerings. Their money market account is still paying a pitiful 1.5%, so I moved nearly all of our cash holdings to Fidelity.

Excellent suggestion. The cash bucket can cover yearly withdrawal for several years without worry the ups and downs of the equity bucket. And there are good options with T bill ladder, CDs, and high yield money market as the cash equivalent.

Australian Mcquarie Asset Management acquired Dalaware, Ivy/Waddell & Reed, etc several years ago. It also offers a few ETFs.
Now comes its unified branding.
https://mim.fgsfulfillment.com/download.aspx?sku=PRESS-FORWARD
https://en.wikipedia.org/wiki/Macquarie_Group

I can appreciate the simplicity of having all T-IRAs in one place if one is of a "certain age" :-) I'm not, but I have likewise moved my T-IRA to one house.
Though that's largely because after having done Roth conversions for 15 years (income restrictions were lifted in 2010), there's not so much left in the T-IRA.

One way, popularized by AAII is to hold x number of years expenses in cash ( you pick the number… at least 5)
In years where SP500 or Wiltshire or ur index of choice is within 5% of all time high, withdraw living expenses from equities. When index below 5% take money out of cash. Refill cash bucket over 2 to 3 years. This way u never sell equities at bottom

Thanks @Derf. That helps.
However, I get the sense this goes beyond the simple question in your referenced quotation: (“Does anyone remember why …?”)
Here’s a couple excerpts from Morningstar’s analysis of RSIVX:
“David K. Sherman brings over 13 years of portfolio management experience to the table. It is encouraging to see that the strategies managed by Sherman have outperformed on a risk-adjusted basis, with an average Morningstar Rating of 4.7. Isolating the analysis to the fund at hand, David Sherman has delivered a mixed track record, leading the average category peer but lagging the category benchmark for the past 10-year period ….
“Undergoing some change … Co-founder and co-chief investment officer Mitch Rubin departed the firm in November 2022 on the heels of weak performance across the firm’s equity strategies. Meanwhile, RiverPark’s assets under management has declined 35% since December 2020 as outflows across most of its products have been persistent in recent years.”
-
Since Mr. Sherman ( @davidsherman ) sometimes posts here, I’m assuming @BaluBalu’s question is intended for him. ISTM an informal / mostly anonymous / lightly moderated forum like this may not be the appropriate setting for an extended dialogue with a fund manager. Likely, the reasons the fund did not meet @BaluBalu’s expectations are complex. I suspect they may have already been addressed in the fund’s Annual / Semi-Annual reports from that period. In the absence of such, than it would seem appropriate for past or current clients to contact Mr. Sherman or one of his subordinates directly.
Link to M* https://www.morningstar.com/funds/xnas/rsivx/quote

@Sven Yes. Current Income Sources: defined benefit pensions = 45%, taxable investment account = 30%, social security = 25%. (Also have two smaller Roths that are not being tapped.) Taxable investment account has grown substantially since retirement. Exhausting it is not a significant concern (wife and I also have good long term care policies taken out during pre-retirement planning phase). Just don't appreciate fluctuations in account balance in years account balance does not end at new high. Restricting annual withdrawals to some or all of the dividend income already sitting in the account at end of year helps keep those fluctuations in perspective. It also simplifies the year end review.

We haven't heard much from JohnN in quite a while.

@JohnN was among the kind folks who weighed in on my “burning” question - What’s the most you’d ever invest in a single stock?” last August.
Here’s the thread
Sounds like he had 15% in TSLA then. Hope it’s working for him.
I continue to struggle with the same question. Recently I sold off two stocks, leaving just one that I believe is a good long term hold. Hours of backward looking research (covering more than 15 years). Anyhow … it’s at 5% and “diluted” with a like amount in a short term bond fund (playing name games here). So that combined they comprise a 10% portfolio sleeve. Intend to keep them in relative balance over time as a risk mitigation measure.