Hi @Dex and @hank
Dex, you noted: "Cash flow ... think about it. It isn't sexy but it is overlooked and needed for financial longevity"
>>>I will presume, because of the nature of this web site; that cash in an investment portfolio would also have a money market component available.
Any MM that I can directly access at Fidelity as a parking area for money is at a negative value. This circumstance is from the .01 or .02% yield and expenses for many of these at various investment houses to be at about .46%. Fidelity Cash Reserves indicates an e.r. range of .27-.37. If one looks through returns for these type of "investments", the returns will be negative.
If this is what is being discussed regarding "cash" within an investment portfolio, then I still have no need for such an item. The exception would be another market melt.
If one has 5 major areas for investment as has been noted in this thread, what is the value of the cash portion.......no yield, e.r.'s that eat the principal and top this off with inflation destroying more principal.
Being that "income" is one of the 5 areas noted previous; why not keep the monies in this and move monies from this area into another, if needed?
hank, you noted: "I understand where Ted is coming from. But in more volatile markets than we've witnessed recently, cash can also be leverage.
>>>I fully agree that cash can have its place during nasty periods, but I don't call this leverage.
I'm trying to understand the need to keep any cash inside of an investment portfolio, with the exceptions that I noted previously. When we think we have a more valuable investment, we sell all or part of something else that isn't doing as well and move the money, period. We sold quite a bunch of bonds last year and moved the monies elsewhere, but not to cash.
I surely don't knock anyone's plans; as I know we all travel different money paths.
Fidelity Cash Reserves values
Okay, time for a large bowl of ice cream with fresh Michigan strawberries.
Take care,
Catch

Cash flow ... think about it. It isn't sexy but it is overlooked and needed for financial longevity.

This is a very thorough article, written by Michael Kitces, about donor-advised funds: rules re. contributions, tax deductions, strategies for deployment, distribution of the "fruits of their labors." The target of the articles is financial advisors, but individual investors have direct access to them as well (I know that T Rowe Price has them, and I think Fidelity also).
https://www.kitces.com/blog/rules-strategies-and-tactics-when-using-donor-advised-funds-for-charitable-giving/

I agree with BobC on the broad points, but have nits to pick with the details.
Broad points:
1. Period-by-period "consistency", a la Bill Miller/Legg Mason Value, doesn't matter. What matters is long term performance.
2. Many (dare I say most, whatever that means :-) ) financial writers are either poor writers, don't understand their subject well, or both.
On that second point, the writer strategically omits mention of bond funds (also included in the S&P report), perhaps because they would undercut her thesis - no persistence of performance.
"Performance persistence levels have tended to be higher among the top-quartile fixed income funds over the past three years ending March 2015." (From the S&P report.) Not surprising, since for bond funds, cost is a huge determinant of performance, much more so than for equity funds.
Details:
1. The source of the material was stated in the second paragraph - S&P Dow Jones Indices’ Persistence Scorecard. (I've linked to the S&P Scorecard.) The research was S&P internal research. Raw data came from CRSP.
2. "Most", unless otherwise stated, may be taken to mean over half. If you look at Exhibit 2, under 1/3 of top quartile domestic funds in 2011 repeated in 2012. Exhibit 1 looks at top quartile funds from 2013; 1/4 or less repeated in 2014.
3. The consistency sought by S&P was for yearly, not quarterly performance. They just started their years in March.
4. The only consistency that one may reasonably expect is that index funds will consistently underperform their benchmarkts. Not by much, but that's the only consistent performance I expect to find anywhere.
5. All classification systems have their limitations; we've been over this ground many times. However, Morningstar and Lipper are irrelevant here, as this is an S&P report, and S&P uses its own classification system.
From S&P's Mutual Fund Guide: "Standard & Poor’s ... analyz[es] fund behavior, then classif[ies] funds into 67 different styles". This is a different methodology from M* and Lipper, in that S&P classifies based more on behaviour than on portfolio.

Great call, Scott, when GILD was below 100. I own THQ also. If you are looking for froth, FBIO (formerly CNDO) and NVAX are Jim McCamant's picks from a while ago that I still have. No dividends, of course.

Thanks! :)
Gilead ultimately didn't make sense to me from a valuation standpoint - basically the valuation had priced in a lot of bad news and basically ignored the pipeline, not to mention management's track record. While it's been frustrating it's finally taken off in the last month.
Additionally, in terms of health care, I think it's just the place to be. As I've said previously, I like to focus on "needs over wants" and healthcare is really a core of that. I think lifestyles unfortunately aren't going to change and as a result, the obesity situation (and all of the conditions that come along with that) are only going to continue to be a large theme. There's also demographics and a number of other tailwinds. I definitely own a lot of healthcare, but I sleep well at night, given that. I said in another thread, I do worry about healthcare costs (which will probably be something like 20% of GDP within 4-5 years) becoming unsustainable, but what are we going to do about it? Probably nothing, given the government's inability to really make progress in just about any important area. So, healthcare spending will continue to crowd out other things.
You also have had a great deal of innovation in biotech in recent years. While I do think some of the binary (has one medicine, does it work yes/no) biotech stocks are expensive, a lot of the larger companies are not.
I've also talked about other companies lately, including CVS (which, given the Target deal, will quickly add another 1660+ locations without having to build them) and Abbott (nutritional products, considerable exposure to EM.) I still like Celgene, which has a ton of collaborations with other various companies.

Celgene is risky and a tad volatile, but I like their considerable focus on collaborations and hopefully they can meet their longer-term projections:
"For adjusted earnings, Celgene raised 2015 guidance to the range of $4.60 to $4.75 per share, although that's below current consensus of $4.84 per share.
In his presentation, Hugin said Celgene expects to meet or exceed previous 2017 guidance, although the company is not raising that forecast at this time. The company still expected net product sales in the $13-14 billion range and adjusted earnings per share of $7.50.
New on Monday morning was financial guidance for 2020. Celgene expects net product sales to reach $20 billion and adjusted earnings per share of $12.50. Both forecasts top current consensus estimates, although the accurancy of estimates five years into the future is always a bit murky."
http://www.thestreet.com/story/13007744/1/celgene-has-2020-vision-for-long-term-growth-but-plays-safe-for-2017.html
Shire, Roche (although I hate the European one div a year instead of quarterly), Abbvie, Teva, Amgen, McKesson, Pfizer and Illumina are other things I've considered, although Illumina would be a tiny, "find it fascinating, just want to have some exposure to it" longer-term play.
In 2012, BOA/ML said: "The fight against obesity will be a major investment trend for the next 25-50 years, a report by Bank of America/Merrill Lynch said on Tuesday, listing 50 companies in areas from healthcare and pharmaceuticals to food and sports that could benefit."
If that's really the case, that's pretty dismaying. I'd like to hope we can be able to change en masse before 25+ years.
As for THQ, I own THQ and HQL. I'll be happy to collect the monthly dividend from THQ which has generally traded with around a 5-6% discount. The company announced a buyback program not that long ago. Not sure where they are with that, but with THQ where it is....

Hi Guys,
I believe Hank is spot on-target when he recommends that a broadly defined two category portfolio would be more precisely classified equities/fixed income over the equities/bonds designation.
After my initial postings here, I recognized that the “Bonds” descriptor should be expanded to the more comprehensive “Fixed Income” descriptor. To avoid subsequent exchange confusion, I elected not to make that adjustment. That was a mistake; sorry about that.
Portfolio asset allocation is a very nuanced, personal decision. Not only is it personal, it changes over time. One size definitely does not fit all. And, in the investment universe, getting it right is an elusive goal. It is hard to find experts who consistently get it right more often than a fair coin toss.
The CXO Advisory Group tested the accuracy of 68 experts over an extended timeframe. Results were less than impressive. Here is the Link to CXO’s final Guru Grades report:
http://www.cxoadvisory.com/gurus/
The cumulative expert accuracy hovered around the uninspired 47% level for most of the study. Very few of the experts were able to score correct predictions two-thirds of the forecasts. In general, experts are overrated.
Experts continue to disappoint in terms of their financial insights. I recently read a book titled “Wrong” by David H. Freedman. You guys might find it useful. The subtitle of the book is “Why experts keep failing us-And how to know not to trust them”. You might want to give it a try.
H. L. Menchen said: “There is always a well known solution to every human problem-neat, plausible, and wrong”. Far too often, the Gurus tout this wrong pathway.
These days, I prefer investment solutions that feature simple mutual fund portfolios that are Index product heavy. Leonardo da Vinci said it best: “Simplicity is the ultimate sophistication”.
MFOer Hank observed that John Bogle has recently recommended adding Social Security benefits to the fixed income segment of a portfolio’s asset allocation. I agree. I’ve been doing that for many years. I also consider both my and my wife’s corporate retirement benefits as an integral part of our fixed income asset allocation. Given that philosophy, these are substantial additions to our Fixed Income holdings.
Well, the Merriman article triggered some stimulating exchanges from the MFO Board. It was fun and illuminating. Thank you all for participating. I’ve said all I want to say on this matter.
Best Regards.

Hi MJG,
Thanks for the compliment and the inquiry.
The person that I learned the most from regarding special investment strategies was my late father. I have commented on some of these in prior post. A few I most often use are noted below.
One that has been a family favorite, for a good number years, is a seasonal strategy often referred to as “Sell in May and Stay Away to St. Leger’s Day. Seems to work more times than not. Naturally, I don’t sell out of the markets; but, I do reduce my allocation to equities during the summer months and then scale back upwards towards fall, through the winter months and usually through spring. If things began to fall apart I exit the special position(s).
Another one is to make sure I have a good weighting towards oversold sectors. I strive to maintain at least a five percent weighting in minor sectors of materials, real estate, communication services and utilities. And, in the major sectors of consumer cyclical, financial services, energy, industrials, technology, consumer defensive and healthcare, I strive to maintain at least a nine percent weighting in these (even if they are out of favor). In doing the math this adds up to 83%. This leaves 17% that can be move to sectors where opportunity is perceived to knock. I start with an asset compass to track the assets that I have chosen to follow and invest in. In addition, I use some simple technical analysis indicators such as money flow, relative strength, MACD, slow stochastic and simple moving averages (50 & 200) plus the price action itself along with P/E Ratios and a couple of other things.
Nothing really fancy to write about just some old fashion down home research and deployment of capital when deemed warranted. Think back to my writings as to how I use to bet the dogs many years ago. It was a simple system that worked more times than not. That was to bet three dogs in each race to win, place or show and especially if they were running in lanes two through seven. Often times the dog running in lane one gets pinched into the rail. After doing statistical analysis on which lanes win more often than the others and betting strong dogs when running in them … Well it develops into a clever system type approach.
And, last but not least I feel my investment sleeve system that I have written about in the past has been most beneficial along with selecting quality funds to invest in that have a history of good performance has also played a part to this success.
This is probably not the response you were seeking … but, it is what it is. And, that is a good number of times it comes down to nothing more than “A Scientific Wild Ass Guess.”
Respectfully,
Old_Skeet

@kevindow- I can see your point, but I have to wonder about the general landscape now out there. When my wife and I were young, we were predisposed to be savers, which is probably one of the most important factors in the whole puzzle. But there was a great dearth of resources from which to "continuously increase ... knowledge of everything financial." Lou Rukeyser's Wall Street Week was one of the few resources available, but even they could not cover the entire financial landscape, nor did they attempt to.
After a few abortive attempts to try stuff on our own, we came across an adviser who, of course, steered us into front loaded American funds. I made it quite clear to the adviser that I didn't like that load, but he justified it on the grounds that he was providing a service, would be available for help and consultation, and also needed to make a living.
He also pointed out that the ongoing American Fund ERs were significantly lower than competing products, and over time, would thus amortize the load. I grudgingly agreed, and used the American Funds exposure to ask lots and lots of questions, and the adviser was very good at explaining the realities of various financial products. An important part of my discussion here is that there were not nearly as many such products available at that time, so things were a lot simpler.
In summary, with a dearth of educational opportunity, an adviser turned out to be a good thing for us. Using that as a stepping stone, we eventually buttressed our American Funds exposure with lots of other no-load stuff from different sources.
Now, of course, it's a completely different situation, as you observe: "Watch WSW, On the Money and NBR on TV. Read Money, Kiplinger, and the WSJ. Take advantage of the M* Classroom." Certainly good advice there (although you might also have mentioned MFO!). But I do wonder if with the huge number of different types of investment vehicles now available it might not still be advisable to have an initial setup with a financial adviser just to get started, and begin the learning process from there. As we discuss here on a regular basis, there are so many financial products out there which are of questionable merit that it might well be difficult for a young person to avoid some of those traps on their own, especially as they are getting started. Once they get their feet wet with something reasonable, and are able to see how that performs (or doesn't), they will have a good platform to begin their own education, as you have noted. Of course a problem with this approach would be finding an appropriate financial adviser, but then that issue is forever with us.

Nice article except I'm not crazy about this part: "Get help. Don’t try to do it on your own." Young folks need to be engaged in their wealth creation, and continuously increase their knowledge of everything financial. Watch WSW, On the Money and NBR on TV. Read Money, Kiplinger, and the WSJ. Take advantage of the M* Classroom. The more one becomes educated, the more likely one will know if a financial advisor is primarily focused on the customer's or advisor's wealth creation, and one will be better able to ask intelligent questions and to monitor the performance of the advisor. So I would say that investors should become engaged and educated, and seek assistance as needed.
OJ, Crash and linter, I assume that you all were distracted by her intellect, right ?
Kevin

Hi @Junkster
I looked through the charts/graphs in Ted's linked article.
If I were to "bite" into these, I would want/use a version of these that maintains a survivourship / beneficiary for the monies. I am not willing to gamble upon my death date from natural or other causes and let the money revert back to the insurance company.
I do understand their (insurance company) risk. Hell, if I offered such a deal to 10 people I know, I would have enough fees and protections in place so that I knew I would not go broke doing this.
Not that this will happen again........but, there is not a guarantee that one would get their monies back in any form, if there was another "market melt". Lincoln National (one of the insurance companies mentioned in the charts) had to purchase, at the very last hour, a small financial organization in Indiana in order to qualify for TARP monies from the Treasury. The insurance company was on the edge of crashing; as were other insurance companies during this period.
My immediate family has instructions that if and when it is apparent that my brain cells do not function properly and perhaps affecting investing decisions; to move monies into more conservative allocations of mutual funds available at our Fidelity accounts..... like FPURX , FBALX or just to a MM account to allow time for any issues to settle.
Not much with investing changes as we become older, eh? Still crucial decisions to be made.
Hoping your area is not under water with the recent storms.
Take care,
Catch

I have given annuities a lot of thought recently in my retirement planning. The only that ones that make half way sense are deferred annuities. And there especially the ones where the recent Treasury rule allows you to exempt up to $125,000 in your IRAs from the RMD rule. Still, I just can't see the financial allure of annuities of any stripe or color. Piece of mind and psychological allure I can understand and peace of mind in old age is a powerful motivator. The bottom line with annuities are they seem more of a return of principal gimmick for x amount of years and then after that you better hope you live a long life (real long) to reap some real benefits. But I am always open to differing opinions.
Edit: If anything, maybe suited for a small, very small portion of your retirement nest egg.

FYI: The way financial advisers charge for their advice often makes no sense, and it needs to change.
The typical adviser charges absurdly high fees to manage your money, often with mediocre results—but next to nothing to provide financial-planning expertise, which can be hugely valuable.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2015/06/19/why-youre-paying-too-much-in-fees/tab/print/

Hi Davidrmoran
You asked if the risk-reward curve has a distinctive character such that it attracts special financial attention. The simple answer is No.
The marketplace risk-reward curve rises in a continuous well-behaved manner as the equity fraction increases; higher risk, higher rewards. There are no outstanding features.
Note that I did not answer the title question in the original post; “How Much Of Your Retirement Portfolio Belongs In Bonds?” One size does not fit all; there is no single overarching reply. Each investor has a logical different answer to that question for very disparate logical reasons. The answers lead to the complete spectrum of the equity-bond tradeoff.
One historical standing rule is that younger folks should have a portfolio that heavily favors equity positions, while older folks should be more conservative with a portfolio weighted towards bond products.
Today, some industry experts are challenging that wisdom. In the end, it depends on the individual investor, his wealth, his plans, his risk aversion. One size definitely does not fit all.
To help answer your question, I input the annual returns (AR) data and the cumulative annual growth rate (CAGR) data into a curve fitting program available on the Internet. The program automatically “best fits” the data sets to Linear, Exponential, Power, and Logarithmic equation formats.
This statistical curve fitting was done on the following mathematical website:
http://www.had2know.com/academics/regression-calculator-statistics-best-fit.html
Goodness of fit values (correlation coefficients) were high for all the tested equations. The Logarithmic form was slightly superior for all cases examined. However, the Linear modeling did an excellent job also. For simplicity, I’ll report the Linear modeling. Here are the equations:
AR = 0.452 X SD +6.41 Correlation Coefficient = 0.972
CAGR = 0.369 X SD + 6.71 Correlation Coefficient = 0.950
The percentage signs were just ignored in these correlations (use 5 for 5%). You get to choose whatever volatility (Standard Deviation) you find comfortable, and the equations provide an estimate of returns using the historical data sets.
For every unit that you move up the risk curve, estimated AR increases by 0.452 units and the CAGR increases by 0.369 units. If the more complex Logarithmic formulation were deployed, a slightly more refined estimate would be predicted that is not constant over the entire range of Standard Deviations.
This submittal might be a little more than folks wanted, but it puts the trends and relationships into a rigorous statistical framework that uses historical data. I hope you find this first-order analysis of some utility.
Best Wishes.

Actually , as I recall from the period (1990s), AC encountered numerous legal challenges to their stipulation that the money couldn't be touched for a set number of years. In other words, certain investors tried to take the $$ out early (for a myriad of different reasons) and than went to court and fought AC after they declined. I believe some of the plaintiffs were successful. Whether from exhaustion over fighting these challenges, or perhaps based on their own legal research, they threw in the towel.
A great idea in concept. Leave the money alone and let the managers run the fund for the long term. Go fishing or whatever - and stop reading or viewing the financial press for 10-20 years. (The "Rip Vanwinkle" approach to investing). For whatever reason, the public's attitudes changed. It's possible, too, that AC screwed up in their execution of the fund's investment mandate. But my guess is the downfall was more related to changing investor behaviors and the legal challenges mentioned.
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Here AC discusses a (new) 2005 Missouri law (their home state) that affected/altered the status of gift-trust accounts: https://www.americancentury.com/content/americancentury/direct/en/investment-products/mutual-funds/giftrust/trust-law-information.html
Here owners and former owners vent their frustrations with the fund - particularly their difficulties withdrawing money. While I can't vouch for the accuracy of any of these complaints, they do provide a sense of some of the issues that arose: http://www.consumeraffairs.com/finance/american_century.html

Hi Guys,
Paul Merriman is predictable with his workmanlike analyses of the marketplace. The current article is no exception.
The red meat in the article is the reference he makes to his “fine-tuning table”. The table provides equity/bond mix returns data starting in 1970. The second part of his table shows several summary Bear market drawdown measures to help assess market risk.
Here is a direct Link to this useful data presentation:
http://paulmerriman.com/fine-tuning-asset-allocation-2015/
The Merriman tables are very comprehensive. They even degrade annual returns by subtracting an assumed 1% management fee. However, I find one major shortcoming in the presentations that is easily rectified.
The summary data shows annual returns and standard deviations, but does not include Compound (geometric) returns. Compound Annual Growth Rate (CAGR) measures actual integrated investment returns over the long haul.
Volatility (standard deviation) subtracts from average annual returns in terms of determining end wealth. Given equal average annual returns, the portfolio that accomplishes this with lower volatility rewards the portfolio holder with a higher end wealth.
If annual returns and standard deviations are accessible, it is an easy task to calculate CAGR. Here is the equation:
CAGR + 1 equals the square root of the entire two terms (1 + AR) squared minus SD squared.
The AR is the average annual return and the SD is the annual standard deviation. The Merriman data presentation permits the calculation to be made.
If you don’t like using the full 45 years of data incorporated into the Merriman summary stats, the tables are sufficiently complete that a user can select his favored timeframe, and do his own summary statistics.
I calculated the CAGR for the Merriman equity/bond mix tables. Not surprisingly, the portfolio CAGR end wealth rewards are not quite so bushytailed, but they still monotonically increase as the equity percentage increases. The Wall Street axiom that ties reward and risk together remains intact.
The simple equation that couples the more pertinent CAGR to annual returns and its standard deviation is a useful addition to your toolkit. I hope you are or become familiar with it. It will make you a better informed investor and/or better able to challenge your financial advisor.
Best Wishes.

Re JohnChisum's "I have been eyeing multi-asset income funds for near cash investing ... The TRowe Price Spectrum Fund. RPSIX, falls into this category as well."
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I don't know what type of risk profile ron (original poster) is looking for in his cash alternative. Possibly, RPSIX would fit the bill. I love the fund. In fact, it's grown to be my largest single holding.
But, just to put things here into perspective, let's take a closer look at RPSIX. It's hard for me to see how a fund with the following risk characteristics could in any way shape or form be considered an acceptable substitute for cash - or even "near cash" for that matter.
Per Price's most recent fund Prospectus, Spectrum Income may invest in the following assets (among others) up to the allowable percentages listed.
Emerging Market Bonds ......... 30%
High Yield Debt (junk bonds)... 25%
Stocks ..................................... 25%
International Bonds ................. 20%
Long Term Treasury Bonds .....15%
Now, compare that to Price's Prime Reserve money market fund which invests only in debt rated AA or higher and typically limits average maturity to 90 days or less. Compare the two - RPSIX and the money market fund. Notice the difference in risk profiles.
Don't just take my word for it. Here's what T. Rowe Price says in their own words about the risks of investing in the Spectrum Income Fund (from the fund's Prospectus):
-
"Principal Risks ...
"Asset allocation risk The fund’s risks will directly correspond to the risks of the underlying funds in which it invests. By investing in many underlying funds, the fund has partial exposure to the risks of many different areas of the market .....
"Interest rate risk A rise in interest rates could cause the price of a bond fund in which the fund invests to fall. Generally, securities with longer maturities and funds with longer weighted average maturities carry greater interest rate risk.
"Credit risk An issuer of a debt security held by an underlying bond fund could be downgraded or default, thereby negatively affecting the fund’s price or yield. The fund is exposed to greater credit risk to the extent it invests in underlying funds that hold high yield bonds. Issuers of high yield bonds are usually not as strong financially and the securities they issue carry a higher risk of default and should be considered speculative.
"Liquidity risk This is the risk that the fund may not be able to sell a holding in a timely manner at a desired price.
"International investing risk Investing in the securities of non-U.S. issuers involves special risks not typically associated with investing in U.S. issuers. International securities tend to be more volatile and less liquid than investments in U.S. securities and may lose value because of adverse political, social, or economic developments overseas, or due to changes in the exchange rates between foreign currencies and the U.S. dollar. In addition, international investments are subject to settlement practices and regulatory and financial reporting standards that differ from those of the U.S.
"Emerging markets risk The risks of international investing are heightened for securities of issuers in emerging market countries. Emerging market countries tend to have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries. In addition to all of the risks of investing in international developed markets, emerging markets are more susceptible to governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less liquid and less efficient trading markets.
"Dividend-paying stock risk To the extent the fund invests in an underlying fund that focuses on stocks, it is exposed to greater volatility and the risk of stock market declines that could cause the fund to underperform bond funds with similar objectives. Stocks of established companies paying high dividends may not participate in a broad market advance to the same degree as most other stocks, and a sharp rise in interest rates could cause a company to reduce or eliminate its dividend."
Link to Prospectus: http://individual.troweprice.com/staticFiles/gcFiles/pdf/trspi.pdf
(See pages 7-12 for referenced/excerpted content.)

I don't think you're missing anything - you're recognizing that one value of a guaranteed income stream in the future (whether that be a deferred annuity, deferred income annuity aka longevity insurance, or Social Security) is greater flexibility in the here and now with your assets. You don't have to worry about being conservative in case you live a long life.
But many people don't perceive that value, nor do many investment writers. Rather, they look at the possibility that you'll lose money by dying. (Personally, I think the dying early part is the bigger loss :-)) That's the nature of insurance - you pay something for shifting risk, in this case the risk of running out of money.
That's not to say that many, if not most, annuities are not overpriced. They're designed to make money for the insurance company that does deserve a fair payment for providing the product and spreading the risk among a large pool of policy holders. But they're also designed to pay for salespeople, who have a real hurdle in explaining what these policies can and can't do for you. Unfortunately, the high commissions, aside from compensating for this effort, also serve as incentive to oversell.
My preference is to stick to as close a vanilla plan as one can - avoiding extra costs that IMHO are for features designed more to make the product attractive to the naive customer than to add value. Also, stick with first rate insurers - they're going to have to be around to pay off that annuity decades from now (hoping you live that long). NYLife is a great company in that respect.
My one paragraph summary: I think many (if not most) annuities are overpriced, and overladen with features. That doesn't mean the product is intrinsically bad, just that you need to be careful, and understand what your objectives are. I also think that longevity insurance is one of the few really useful innovations in annuities. I'm still thinking through the idea of incorporating a longevity policy inside an IRA; I think it can help deal with RMDs (in your 70s) that would otherwise be too high, but haven't worked those numbers yet.
Side note: I've gotten a couple of emails asking/suggesting that I might be somewhere in the financial industry. I'm not. I'm just very fortunate to have had wonderful supportive parents (with a scientific/mathematical bent), some good teachers (and some awful ones), and a personal inclination toward numbers and rational thinking.

Sounds like you and I are in about the se place nearing retirement and thinking what to do investment wise going forward. I can tell you what I did.
I was downsized a couple years ago but was able to pick up with another company at the same pay. This allowed me to move my 401k to an IRA with Schwab. I picked Schwab because they have a local office here that gave me access to a financial advisor - for free. Also chose them because of all the products they have to offer.
To make a long story shorter, I split money 3 ways. A 3rd in their robo syst, Intelligent Portfolio, a 3rd in their managed Windhaven portfolio and the remaining 3rd, for the same fun reasons you gave, self manage.
Hech, we are all different, but this is what was most comfortable for me leading into retirement. I'm happy with my choice.

Another reason why I don't often care if a fund beats its benchmark or not. I use my own financial goals and assessment of the markets as a viable target for absolute returns.
Chasing benchmarks, in my view, only sustains a herd mentality, creates the potential for bad (er desperate) decisions to 'catch up' with the benchmark, and above all, gives fund marketing teams PR fodder for their materials.

Hi guys!
My thought was maybe a lot mis-stated, let's say. I should've said mid long-term....my use of the word "buckets" was not well chosen. The funds I chose are funds I own now. In three (3) years, I will retire.....soooooo, what I'm looking for is what to do after that mid- and long-term. A poor way to start the conversation, and I humbly apologize for that. Many of my friends are seeing financial advisors. I'm not sure that's what I want to do. So, I'm trying to get ideas for down the road. Funds for the long haul....I am waiting now for a friend who will see an advisor---one that many from work use. I want to see what he says. All my life, I've been investing for short- or mid-term......cars, houses, college, etc., --- so when I retire, there will be no paycheck to offset losses.....no pay raises every year or overtime to help out. It's kind of scarey to think this way. Also, if I gave all my money to somebody to invest, what would I do? No reason to check the market or to slide that buy or sell order in as you sit there with a smile 'cause you're all that and a bag of chips today. I saw what Ted said about cashing out.....I'm not sure that's what I want to do. Maybe split the money.....
the Pudd