I would think the odds of loss in any of these worthy funds over the next 5y to be nontrivial, no matter what they do, even, you know, BERIX and FPA. So I would stick a hundred thou, or even more, into SC 4% bonds, and make a few thou against inflation. I mean, I like very much PONDX, FSICX, DODIX, FTBFX, BOND, PDI, and a few others, but have had trouble breaking even with all of them over selected short recent periods, when I was overmonitoring.

Are you seriously suggesting that this poor fellow put $100,000 into a single bond offering issued by this company? I took a quick look at the prospectus for this bond. It's unrated, unsecured, and the protective covenants for the investor are practically nonexistent. I did a bit more research and found that S&P had rated a secured bond issue from SolarCity that matures in 2022 at BBB+, and an unsecured bond from them maturing in 2022 at BB. BB is not investment grade. Other than some posters here dropping dead from the shock, what happens if somebody like Ted Cruz or Rand Paul gets elected president in 2016 and the investment tax credit and other subsidies for solar power gets dropped? It's questionable whether there will be a secondary market for these securities (that's from the prospectus), and SolarCity isn't obligated to redeem them early under any circumstances.
I strongly suggest that the original poster take a good look at these risk factors if he's considering this SolarCity offering.

Thank you for doing some research on this matter. Personally, I would never drop $100,000 in any single offering, whether it be a bond or fund/stock. I'm a very cautious, conservative investor.

I should have mentioned that you can buy these bonds in $1000 increments if you should wish. If I read that prospectus correctly, you are also signing away any bankruptcy rights and in that unfortunate circumstance would be receiving 25% of your investment back. If you want to support solar energy and like SolarCity this would seem to be a way to do it, but it doesn't seem to be any equivalent for a savings account.

@Dex - thanks for being diligent and forthright with the numbers. ACA often does cost some people more money (though not as much as they may think, because health care/insurance rates were rising so fast anyway that part of the increase was inevitable).

The subsidy could influence me on when I take SS. For years 61 and 62, I may be able to get the subsidy. If, I took SS on the earliest date June of my 62nd year I probably would lose the subsidy for years 62, 63, 64. So in year 62 it might make some sense to delay taking SS so that I still get a subsidy. Based upon what I know now the subsidy is in the area of $3,000 per year of non taxable money. My income would need to be less then 4X of the poverty base for the year.
Now, considering my net worth - my getting a subsidy doesn't make much sense.
Also, after seeing how his subsidy thing works, I don't think OC will be repealed. Too many people are getting something out of it.

Hi Catch22 and other posters,
My portfolio's holdings, according to M*, are collectively off their fifty two week highs by about five percent. I am not doing much of anything as I have been expecting a pull back for sometime now and with this I have been carrying a good allocation to cash since my recent sell off of my equity spiff position the first part of April and, as I write, I have a ytd gain (portfolio) of about 3.7%
I am planning on a limited watch as we move through the summer and most likely start buying around the edges as we approach fall. By then, corporate earnings should start to improve. Not in a hurry though because fall ... September & October ... where I usually ramp up my equity allocation is now about five to six months away. And, I have got a lot of things planned to do this summer.
Currently, my portfolio's asset allocation, rounded, is about 20% cash, 20% bonds,
50% stocks and 10% other. Within stocks I am about 65% domestic and 35% foreign.
If stocks as measured by the S&P 500 Index dip by about 10% down towards the low 1900's then I start to perk up and do some strong looking. But, we are now only about a mere two percent off the Index's recent high. The Index will have to get down to about the 2010's range before I reduce summer activities and start spending more time watching the markets. Currently, I don't plan to do any selling ... but, I might.
Should my portfolio's assets reach a decline of ten percent off their fifty two week highs ... Well, I am still covered with my twenty percent cash position. Now, if it should go beyond a ten percent decline, then I'll need to start raising my cash position through an asset sell down process to rebalance and raise my cash position.
Signing out ... and, now 'hopefully' gone for the summer to enjoy some R&R.
Old_Skeet

.........well, not much in happy land in many places during the recent days........the last week or so with softness in equity and bonds. 'Course, such a broad statement does imply that there are not areas that are somewhat happy; but not unlike a young person or an adult who sometimes states that they are going to run away from home.........likely from having a bad day, etc. :)..........even "investors" have periods when they want to "run away from investments", yes?
Well, your house (investments) is also likely getting its "clock cleaned" from recent market actions.
Some equity market areas during the past month had about 8% down moves and then flattened for a short period of time. But, this has reversed again. India being an example of a big run in the last 12 months +, then down about 8%, but further down May 6 dropping another 2.5% or so. Aussieland also found a large drop (>2%), reportedly due in part to poor earnings in the banking sector.
All investor returns will be different, of course; but the consideration is in place for this house to reduce equity holdings today (May 6) to protect very pleasing returns so far this year from investments in particular in HEDJ. Some healthcare may also be reduced; although the gains from these holdings has been from a period of years and not months.
Ya, I know; don't be a trader or time the markets. I'll have to name this as intuition.
Broad drawdowns will likely not be more than 10%, yes? Or you best guess.
At times, I recall a portion of information displayed upon the "old" hometown movie theatre screen before the main movie............."Preview of coming attractions". Attempting to determine the "coming attractions related to investments".
Well, just some early morning (1 cup of coffee) jabber.
NOTE: this write was started and planned to be posted on May 5, but other schedules changed this.
Regards,
Catch

Nothing wrong with 529 plans, but in the priority of savings they fall far lower on the savings ladder. I would first fully fund an employer's retirement match through a workplace / self directed retirement account. Second on the savings wrung would be to fully fund a Roth IRA. Third would be funding an emergency fund in a (taxable account) equal to 3-6-9-12 months of one's salary. As important, would be to have a plan to pay off high interest loans (revolving credit).
As a "good" parent we think saving for college is a requirement. My opinion is that the fewer dollars specifically ear marked for funding college the more dollars will be offered to your college student in financial aid (grants, loans, internships, work study, etc) as they are mostly all needs based.
Your college student should strive to be a good candidate to get into college (good academics, athletic, and civic minded), but they should also be a good candidate for financial help.
Nothing wrong with 529 plans other than you are short changing your kid the opportunity to receive financial aid and sticking them with the burden and guilt of your financial insecurity.
Let your kid be needy...they'll thank you for it.

FYI: A “robo” adviser has added college savings to the online investing services it offers. But FutureAdvisor’s new offering is limited by the nature of state-sponsored 529 plans.
The San Francisco online-advice firm has rolled out a website feature that helps parents figure out how much to save for a child’s education and makes suggestions among 529-plan accounts, Coverdell education savings accounts and custodial brokerage accounts. Parents who set up accounts through FutureAdvisor can get the firm’s investment-management assistance at no charge.
Regards,
Ted
http://blogs.wsj.com/totalreturn/2015/05/05/robo-adviser-tackles-college-savings/tab/print/?mg=blogs-wsj&url=http%3A%2F%2Fblogs.wsj.com%2Ftotalreturn%2F2015%2F05%2F05%2Frobo-adviser-tackles-college-savings%2Ftab%2Fprint

FYI: After more than two years in pilot and $17B in assets, Personal Advisor Services ready to take on the expanding field.
Regards,
Ted
http://www.investmentnews.com/article/20150505/FREE/150509967?template=printart

Re msf's question:
JohnC is correct that "funds-of-funds" should be viewed differently and might warrant a higher allocation. One of these, RPSIX, currently comprises my largest holding at just over 14%.
1. I prefer to view money management decisions in terms of percentages (not in dollar sums).
2. I don't have set limits. However, I become uncomfortable when any one fund exceeds about 20% of total assets. With equity funds, 10% in any single fund is enough.
3. I believe it's wise to diversify (fairly evenly) among at least 3 different fund houses or other custodians.
-
Added: The above reflects the thinking of a 70+ year-old, 15-20 years into retirement, already in the distribution stage. Were I younger, I'd have a higher risk tolerance and would be much more concentrated in a few good growth funds.

I can say that VWENX is my largest holding at just under $100,000, but that's because I've reinvested dividends for several years. As a result, the fund has grown to that amount coupled with capital gains of course. But I would never just drop $100,000 on one fund at this time. As I said, I'm a bit apprehensive given the current market valuations.

Personally, I would never drop $100,000 in any single offering, whether it be a bond or fund/stock. I'm a very cautious, conservative investor.

This raises an interesting question. You wrote that your portfolio is around $1M, so (quickly doing the long division :-)) that means that you would not put more than 10% in a single fund.
That rules out "couch potato" portfolios. What do people feel is a maximum percentage to allocate to a holding, or should it be a dollar amount (so a $5M portfolio might hold 50+ funds)?

@msf and @Junkster, Thanks to both of you for those clear and informative answers. The statistics show we are living longer but as with any statistical study, there is a mean average. So 50% don't make it to that certain age and 50% go beyond it. On which side am I or anyone else here? Well, that is the million dollar question. Family history and physical shape are good determinating factors but they are not 100%. In my case, my family has a history of long life well into the 80's and beyond. Then again, there is also a family history of cardiovascular disease, diabetes, and cancer. I already have the diabetes. So for me, taking it while the taking is good seems to be the prudent choice.

I would think the odds of loss in any of these worthy funds over the next 5y to be nontrivial, no matter what they do, even, you know, BERIX and FPA. So I would stick a hundred thou, or even more, into SC 4% bonds, and make a few thou against inflation. I mean, I like very much PONDX, FSICX, DODIX, FTBFX, BOND, PDI, and a few others, but have had trouble breaking even with all of them over selected short recent periods, when I was overmonitoring.

Are you seriously suggesting that this poor fellow put $100,000 into a single bond offering issued by this company? I took a quick look at the prospectus for this bond. It's unrated, unsecured, and the protective covenants for the investor are practically nonexistent. I did a bit more research and found that S&P had rated a secured bond issue from SolarCity that matures in 2022 at BBB+, and an unsecured bond from them maturing in 2022 at BB. BB is not investment grade. Other than some posters here dropping dead from the shock, what happens if somebody like Ted Cruz or Rand Paul gets elected president in 2016 and the investment tax credit and other subsidies for solar power gets dropped? It's questionable whether there will be a secondary market for these securities (that's from the prospectus), and SolarCity isn't obligated to redeem them early under any circumstances.
I strongly suggest that the original poster take a good look at these risk factors if he's considering this SolarCity offering.

Thank you for doing some research on this matter. Personally, I would never drop $100,000 in any single offering, whether it be a bond or fund/stock. I'm a very cautious, conservative investor.

"They are not reduced if you start them at age 62. Of course, if you take them earlier, you're spreading them over more years, so the rate at which you receive your benefits is reduced."
The cynical side of me begins to wonder if all these media spots that tell you to wait on SS is being run by the govt in hopes that there will be less payout? I cannot be the only one that has noticed we are inundated with this idea.

The calculation I'm familiar with views SS as an annuity. Suppose you start SS at age 62. The question asked is: If you bought a private annuity with the checks you receive from age 62 to age 70, would that annuity be able to make up the difference between the checks you're getting and the checks you would have gotten by deferring until age 70? If not, then deferring benefits gives you "extra value".
For example, if you'd get $900/mo at age 62, and $1600/mo starting at age 70, would you be able to replace that extra $700 with a private annuity for the cost of the $900 checks that you received for eight years? The answer is no.
But as this FA Magazine page points out, "the reason that SS annuities are a better deal than those in the private markets is that SS can offer a product that is actuarially fair - the y are based on the life expectancy of the average person ... and SS does not have to worry about marketing costs or profits." Sort of like Vanguard, except Vanguard pays marketing costs.
Another reason aside from profits that private annuities cost more is adverse selection. People who buy annuities tend to have longer life expectancies, so the insurers have to charge more simply to cover that cost.
With SS, those people should be deferring benefits. But with 3/4 of people not only not deferring, but actually taking benefits before FRA, it's clear that many people are making the "wrong" decision - lots of people with personally long life expectancies are going for the earlier checks. (They often have other reasons, such as cash flow, for taking early benefits.)
Thus rather than costing SSA money, its seems that so many people starting benefits early actually saves the government money, statistically speaking. Thank you very much.

So, it looks like I may be wrong about next year's OC cost.
I may be able to get plans at $240/month with the subsidy.
this is because my income is 345% of the poverty line, over 400% and you don't get one.
you are eligible for an estimated subsidy of:
$2,737.2annually
$228.1 monthly

I would think the odds of loss in any of these worthy funds over the next 5y to be nontrivial, no matter what they do, even, you know, BERIX and FPA. So I would stick a hundred thou, or even more, into SC 4% bonds, and make a few thou against inflation. I mean, I like very much PONDX, FSICX, DODIX, FTBFX, BOND, PDI, and a few others, but have had trouble breaking even with all of them over selected short recent periods, when I was overmonitoring.

Are you seriously suggesting that this poor fellow put $100,000 into a single bond offering issued by this company? I took a quick look at the prospectus for this bond. It's unrated, unsecured, and the protective covenants for the investor are practically nonexistent. I did a bit more research and found that S&P had rated a secured bond issue from SolarCity that matures in 2022 at BBB+, and an unsecured bond from them maturing in 2022 at BB. BB is not investment grade. Other than some posters here dropping dead from the shock, what happens if somebody like Ted Cruz or Rand Paul gets elected president in 2016 and the investment tax credit and other subsidies for solar power gets dropped? It's questionable whether there will be a secondary market for these securities (that's from the prospectus), and SolarCity isn't obligated to redeem them early under any circumstances.
I strongly suggest that the original poster take a good look at these risk factors if he's considering this SolarCity offering.

FYI: The reversal in, well, everything continued on Tuesday. Stocks across the globe finished sharply lower and so did bond prices. Recent market action continues to be dominated by the sell off in the Treasury and Bund markets. You might never pin down a specific trigger, but it seems that amorphous concerns about the eventuality of a Federal Reserve rate hike have manifested like an F4-power tornado. It’s spilling into growth-focused stocks, including small caps. The sickness also is spreading to yield-oriented defensive stocks. Much is riding on Friday’s April jobs report from the Labor Department. Markets are skittish for the first time in a while, and a red-hot reading on jobs growth might cause a full-blown case of Fed-related jitters.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2015/05/05/etf-market-vital-signs-cinco-de-mayo-the-sea-was-angry-that-day/tab/print/

Retiring on June 1 at age 59....getting COBRA for about $1K a month and will figure out what the ACA has in store for me at the end of the year since I am not insurable otherwise.
The week after I retire, I'm headed to Italy for 3 weeks.
There are perks for living below your means during your working career.

>> If OC was the law before my retiring I may have had second thoughts.
Dex, when you were running the numbers at 51 for healthcare costs until Medicare, what did you plug in and what did you base them on? Was your nonjob private insurance inexpensive somehow?

In 2008, I paid $205.83/month from BC/BS I was able to keep it in the 240 range until OC. Then it went to 335 same BC/BS policy but OC adds increased it. Next year they are canceling the policy so I have to go full OC. Which will be close to $600/mo the last time l looked.
I'm still very OK financially. Part of this is because I'll get Medicaid in 5 years and Georgia does not tax retires' dividends/interest/SS/Pensions after 62(?). However, I am feeling less flush due to OC. I won't be changing my spending habits.
However, if I knew about the OC costs, I may have not stopped working or delayed it for a couple of years. It is just too much of an unknown for 14 years. Spending $2,400 Vs $7,200 and an unknown future is disconcerting.
This is just another reason why I don't think many will be able to do what I did in the future.

“The REIT market is very volatile, down 75% between 2007 and 2009 — which was terrific if you were in a re-balancing situation — and then up 400% from that bottom,”
I wanted to create a picture of the above quote using a personal investment ( I experienced this with VGSIX). I wanted to highlight the recover time (shown in the form of a triangle).
It is this the period of time (recovery from maximum Draw Down or MAXDD) an investor wants to shorten if possible. Six years was a long time to wait in my opinion.

I think a 50/50 split makes a lot of sense. I think so for a couple of reasons:
1) The USD has probably made a good portion of its move already so from a tactical perspective, it makes sense to take some of this bet off the table.
2) Longer-term, I like the 50/50 split because it removes (at least most of) the emotion when it comes to what will happen in the shorter-term. If USD continues to rise, you won't have to go back and think "man, I wish I had hedged" because you did (50% of it) and vice versa.