Why Risk-Profile Questionnaires Don’t Work Years back when I was in the accumulation phase of investing I rolled with equity allocations, at times, upwards towards the 60% to 70% range along with holding about 10% in cash so when stock market pullbacks came I had some cash that I could put to work to take advantage of the pullback. Then as the stock market recovered I'd trim my equity allocation booking some of the gains made during and after the recovery.
Interestingly, the Vanguard risk questionaire, contained in the article, suggested, for me, a portfolio of 40% bonds and 60% stocks. And, I'm retired.
Now being retired, for the past five years, here is how I now roll with a description of my all weather asset allocation detailed below.
Old_Skeet's All Weather Asset Allocation.
My all weather asset allocation of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being in the distribution phase of investing. The benefit of this asset allocation is that it provides sufficient income, maximizes diversification, minimizes volatility, and provides long-term returns.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback. In addition, cash helps stabelize a portfolio during stock market volatility. Example of investments held in this area are cash savings, money market mutual funds and CD's.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are ISFAX, LBNDX & PONAX.
The 40% held in the equity area provides me some dividend income along with some growth, that equities generally provide, that offsets the effects of inflation over time. Some examples of investments held in this area are NEWFX, SVAAX & SPECX
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way principal grows over time.
I'm thinking that all investors should write out their investment plan which should include how they plan to invest during stock market declines along with both short term and long term goals. Then monitor their results and make adjustments as warranted including rebalancing their portfolio form time to time to maintain their established asset allocation.
Crashes coming?! Well, nearly two flat years and the media needs something for clicks.
This Dividend Stock Strategy Is for Investors Who Want An Attractive Monthly Income Stream Over five years total return is almost identical to VWINX which has been a lot less volatile
With only 9 % turnover a year, the mangers are not doing much for their 0.7% fee.
This Dividend Stock Strategy Is for Investors Who Want An Attractive Monthly Income Stream @Soupkitchen, I appreciate where you are coming from on IVFIX concerning making money. It consist of mostly foreign holdings and over the past "recent"
years foreign stocks have not done as well as domestics. For me, I've been in SVAAX for more than ten
years and my average annual returns have been better than ten percent per year. Not too shabby for a dividend fund! I'm now favoring GVDSX because it is 60% foreign and 40% domestic equity allocation plus it has better than a 4% yield. And, for the next few
years it just might have a hard time keeping its head above water as other funds might as well. Perhaps, not. But, over the next ten
years I'm thinking since it can mix foreign with domestic stocks there is a fit for it within my portfolio as the managers can adjust the equity mix based upon their read on the markets plus I collect a nice monthly dividend.
It is just hard to say with great conviction (since stocks and bonds are currently richly priced) where the best place is to position new money. However, in past
years value has worked better, for me, than growth (although I have some growth positions as well). And, do you really want to buy fixed income at the moment due to the little yield bonds now offer investors? With this, I'm thinking that the equity dividend payers are the better place to be.
Currently, GVDSX is looking pretty good to me. I expect by year end it will become a member of my global equity sleeve found in the growth & income area of my portfolio (due to its yield) as I continue to focus on income investing and position new money towards income generating securities.
This Dividend Stock Strategy Is for Investors Who Want An Attractive Monthly Income Stream Old skeet, I invested in IVFIX which had the same managers as SVAAX a few years ago and lost money. Bob C.had recommended this fund, but changed his tune as the fund slowly began to lose money. I wouldn'tinvest with those same managers again.
Convertible Securities mutual fund and or etfs Fidelity Convertible Securities FCVSX Is the only one I'm vaguely familiar with but I haven't invested in it for
years. Vanguard had a similar offering but liquidated it earlier this year.
And just now I found this list from US News.
Best Convertible Security FundsFrom ETFdb.com:
This is a list of all Convertible ETFs traded in the USA which are currently tagged by ETF Database. Please note that the list may not contain newly issued ETFs. If you’re looking for a more simplified way to browse and compare ETFs, you may want to visit our ETFdb.com Categories, which categorize every ETF in a single “best fit” category.
Convertible Security ETF's
Chuck Jaffe's Money Life Show: Guest: Andrew Foster, Manager, Seafarer Funds Yes, I was patient, but finally decided to leave SFGIX. With the China trade-war, and its knock-on effects toward other Asian countries, MAPIX is up by just a tiny fraction, this year, so far. I track both MAPIX and the bond fund, MAINX. The latter is performing quite well, indeed. It's up 8.29% YTD. It's lost a star or two at Morningstar. And M* has changed its peer category once or twice. And I notice that MAINX paid nothing at year-end in 2018. I'd be unhappy with THAT, if I owned the fund. The same thing happened re: an expected dividend a few years ago, with MAPIX.
Chuck Jaffe's Money Life Show: Guest: Andrew Foster, Manager, Seafarer Funds Andrew Foster is another manager who went out on his own, with a lot of hype, and failed to match the performance of the fund he left. MAPIX is up 56% since March 2012; SFGIX is up 35%. For the last five years, MAPIX is up 18.43 %; SFGIX is up 6.51%. The fund family ,and its resources, may be more important than its famed managers.
Why Isn't Your Mutual Fund Sticking Up For You ? Since even in 2019 the Economist never uses author bylines, I am forced to take their commentaries with a grain of salt, interesting (and sometimes accurate) as they are... and is also part of why I cancelled my subscription
years ago. Journalistic accountability and all that.
Stipulation:
I do realize that the information referenced above is meaningless, fake, and total propaganda, inasmuch as The Economist is certainly part of the free press and main-stream media.
Vanguard Supervisor Sentenced To Four Years For Fraud Looks like he is a winner - 3 hots a cot and $1.45 mil for 4 years of his time at some white collar country club all expenses paid.
Vanguard Supervisor Sentenced To Four Years For Fraud
How To Prepare Your Portfolio For The Worst When The Worst Is A Real Possibility FYI: Doomsday scenarios don’t have to come with the hype, speed, and spectacle of a Hollywood blockbuster. The biggest threats today are slower-moving and decidedly less visual: The U.S.-China trade war could become an all-out conflict that plunges the world into recession and undoes globalization; a Japan-like deflationary funk could spread through the U.S. and Europe; or state-sponsored hackers could paralyze critical infrastructure, undermining confidence and sparking a cyberwar.
A relatively healthy U.S. economy, along with global central banks’ willingness to cut interest rates, have allowed some measure of optimism, despite alarming headlines. In fact, investors’ equity holdings as a share of their financial assets hovered around 30% earlier this year; the last time it was higher was in the late 1990s.
But that’s exactly why some strategists, fund managers, and financial advisors are beginning to consider the investment versions of survivalists’ supplies, including Spam, gas masks, and gold. “It’s really the first time in seven or eight
years that we are starting to meaningfully derisk across portfolios,” says David Carter, chief investment officer at Lenox Wealth Advisors, which oversees $2 billion. “Whether the tariff war escalates or lingers, the downside is a no-growth world where risk sentiment evaporates. And central banks around the world are trying to provide a safety net, but it’s a small net with a lot of holes.”
Regards,
Ted
https://www.barrons.com/articles/how-to-prepare-your-portfolio-for-the-worst-when-the-worst-is-a-real-possibility-51566603417?mod=past_editions
GMO Says Emerging Markets Stocks Will Trounce U.S. Equities GMO has been saying the same thing for at least four years, you can look it up. One day they'll be right!
