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Taxes will have to be paid on this portfolio as required minimum distributions take effect so I want to be more conservative in this portfolio, and more aggressive in a Roth IRA.
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In November's Commentary said: I believe @davidmoran linked this portfolio planning tool that does a pretty good job of allowing the inputs (your numbers) to be iterated for optimization...tax optimization being one output. Might be helpful.
You mentioned utilizing a Roth conversion strategy.
I like to remind myself that the best time to execute Roth conversions might be during times of market pull backs. During times of market pull backs equities are temporarily undervalued, especially aggressive equities. So don't hesitate to convert TIRA shares (especially those that are conservatively positioned) as a result of a down market since you may actually have the opportunity to buy more Roth shares while markets have pulled back.
This makes Roth conversions not only a great option when your income is low from a tax perspective, but also a great option when markets are under performing from a valuation perspective.
I think the Standpoint Multi Asset fund is worth a look. That combination of "bonds priced to return zero, stocks priced to return zero, both susceptible to a sharp correction" has me wondering about options that generate some combination of safe, simple and sensible.
Too, you might enjoy Robert Gardiner's October letter. He covers a range of issues, comes across as smart and principled, and is pretty honest about his firm's struggles to attract talent beyond that white/male/Utah base. I appreciate both his efforts and his openness about them. (Also hints about a growth correction and China risks.)
Voted today. For myself, among others. When we got to the polls, no one was standing for election to the board of trustees for the local community college. That seemed sad, so I wrote myself in. Chip (allegedly) did so too. It's the nature of these things that if I'd talked to 10 people about it in advance, I might well have won in a landslide.
Take great care,
Brings to mind “If a tree falls in the forest ...”
Better keep and buy more bonds. They do have positive returns, even into the negative yield zone; as with German Bunds.
Would be nice to be so prescient and and confident as the folks who are able to see into the future of 10 years, or whatever.
I don’t know whether @Catch22 is being sarcastic or not. But I’m beginning to tilt ever so slightly more toward investment grade fixed income in the event of a large equity selloff. Of course, age / individual circumstances all tie in to the decision.
I looked again at what I wrote, and the expression of my language is pretty crappy.
I was picking on the folks who seem to think they are able to see the future so far away. The big kids have had too many forecast misses for interest rates since the 2008 melt; at least based upon their salary and access to data.
My IG bond thoughts are more directed to gov't. issue, vs corp.
a state of perplexity or uncertainty over what to do in a difficult situation.
The quandary being: Fed. taper.........well, if the Treasury stills needs to sell bills, notes and bonds to run the house of America; who will buy these if the Fed. tapers too much and doesn't want more Treasury paper?
Lots of folks still need and want U.S. debt.
The question becomes, as usual, supply and demand.
'Course the potential problem today is that rates beyond the control of the Treasury or the Fed. are already low and less swing room than in years past.
I still feel the big kids still don't really know what direction for yields, cause we're still in the "this time is different mode"; and more warped from Covid and all of the affects.
To a point, if there remains enough buyers; yields will go down; and the prices will increase, which is where the money is made.
This write likely didn't help one bit to express much of anything.
I'm attempting to have a decent thought path too late at night for me today.
Any affinity I may hold for bonds today relates only to relative value near term when compared to equities. I do find it intriguing that a lot of “hedged-equity” funds are actually parked 90% in Treasuries currently. (SWAN for example).
But - if / when short rates are raised by the Fed, the economy may slow thereby causing the longer end of the yield curve to fall (and bond prices to rise). Not saying go long. Just saying that’s a possibility.
Don't overlook I-Bonds although limited in amounts - but $30k/yr possible for an average US family of 3.15.