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Morningstar Digest July 17 top story is about politics and the markets,,,, Is that OK to talk about
“Will Trump Really Fire Powell? Markets Whipsaw with Fed Independence Online ” Article directly connects politics and our investments. Has M* become part of the lunatic left,,,, does M* have TDS? I think not. When, if ever, will this fine forum accept that these are not normal times and the Orange Revolution will sooner or later impact markets,,,,, its not a question of if,,, it’s a question of market timing.
Let us suppose an American investor has chosen to invest in U.S. centered holdings, due to the stability of the country. 40% equity, 20% investment grade bonds and 40% in MMKT's. Oh, wait; that is our house.
As international investors, both retail and large houses continue to watch the machinations in this country. Many will have second thoughts about U.S. holdings, as they watch the 'rule of law' disappear, as well as the unstable and ever changing monetary policies change at an hourly rate..........well, yes this affects our investments.
As the deterioration continues in this area, one finds the dollar whacks downward, and more future unwillingness to participate in Treasury holdings.
Our country's place in the world of admiration and respect is going bye-bye.
And, yes; the instability originates from the current administration, and its operatives.
Assuming a great mistrust of the U.S. government (evident in Larry’s OP), how would you or I benefit by positioning our U.S. domiciled dollars, possibly held inside a U.S. IRS sanctioned and regulated IRA / 401K, into some “foreign” fund nonetheless regulated by the U.S. Securities and Exchange Commission at a U.S. based brokerage house (Fidelity, Schwab, etc,) which operates according to rules and regulations of the U.S. Financial Industry Regulatory Authority where it would still be subject to U.S. IRS Tax Codes and enforcement with the knowledge that any alleged illegal harmful encroachment against your investment at that brokerage would be heard and settled in a U.S, based Court of Law?
What are you really gaining here other than perhaps feeling better?
@hank - I am of the opinion(s) that US based rules, regulations and laws mean nothing to the current administration and only exist to be bent, broken or ignored whenever they see them fit to their advantage with the mostly full backing of the current SCOTUS. I don't necessarily invest that way but it does add a layer of tempering to my decision making.
For years and years I was near always invested in nothing but equities, primarily those inhabiting the momentum space. Not no more.
@Mark. Thanks. Your views are always respected. I’ve occasionally opined on these political issues over the years in OT.
Maybe I read too much into Larry’s and Catch’s posts. But if anyone sees buying foreign funds or other holdings as a “work around” to threats posed by current U.S. political chaos it’s not as easy as buying a Swiss ADR or a fund investing in Europe, Asia or Brazil. Yes - You might benefit if the other nations’ markets outperform the U.S. But by and large your investment is still being “safeguarded” by U.S. agencies and courts.
If Larry or someone else wants to make a case for buying a European fund, Latin American fund or something like PRPFX which holds gold, silver and Swiss Francs as hedges against declines in U.S. assets, I’d love to hear the case. I think he or Catch could make a convincing argument. But let’s not assume those holdings will be better protected against lax enforcement or outright theft / seizure by the U.S. government. (Perhaps worth remembering)
There are, I suppose, ways to actually move one’s assets abroad. But ISTM if you are doing so as a U.S. citizen they still are subject to many U.S. laws including those of the IRS. I did read in either Barron’s or the WSJ a couple months ago that an unusually large number of very wealthy U.S. investors have recently taken out dual citizenship (in the U.S. and another country) for the purpose of moving their U.S. based assets abroad. That makes sense, but who here is so planning?
Maybe @LarrtB would clarify exactly what investment steps he’s considering or taking to deal with the problem he’s identified. I assume he wants to approach this as an investing topic. Perhaps he could link the M* article he references as well.
At Hank. I have been building positions in PRPFX and TRIGX. I am not adding to CGDV. Also a small position in DODLX for global bonds. I am long past being an accumulator and have no great insights. My key motivation in not to lose capital,,, As I have often opined, the orange revolution is historically significant and will impact all aspects of American’s daily and investing life. Ignore at your own peril.
There are, I suppose, ways to actually move one’s assets abroad. Beyond my scope. But ISTM if you are doing so as a U.S. citizen they still are subject to many U.S. laws including those of the IRS. I did read in either Barron’s or the WSJ a couple months ago that an unusually large number of U.S. investors have taken out dual citizenship in both the U.S. and a foreign country for the purpose of moving U.S. based assets abroad.
Yes, it's patently clear that the current Orange regime will bend, spindle, mutilate, fold and ignore at will--- whichever works best for their own aims in each case, regardless of the needs of the country, or stability, trustworthiness or the rule of law.
Dual citizenship? Ding! I would have to create an address in Ireland. I'd surely need to sign-up for their version of S.S. and become ipsofacto eligible for their national health plan, which is income-based. Then, I could easily create an account, online or otherwise, to invest in companies directly, and intentionally avoid dealing with USA authorities and the IRS. Our erstwhile "friend" Chang is doing it already, living in ..... Andorra. Those with parents or grandparents who came from Ireland, Poland, Italy, Sweden and some other places may apply for dual citizenship. Of course, that's subject to change; and spouses may or may not qualify--- though the spouse of an EU citizen does hold some citizen-like privileges, medical plan inclusion among them.
Sorry, I thought you didn’t trust the current government to safeguard your best interests. If you have no increased fear of your assets being purloined due to lax enforcement (think DOJ) or of outright seizure then we’ll avoid the issue of trust and just deal with relative valuations. Stability / integrity of government does affect relative valuations. China and Russia wouldn’t be my choices. Some European countries might be OK. Be selective. Germany has taken a hard turn to the right. I wouldn’t trust the Saudis either. And Latin America? Mexico? Dunno. I hope your 3 mentioned funds work for you.
PRPFX should do well if the precious metals continue to shine. I sold it several months ago.
I'll provide this for now; as we have a 9 yo nephew bday party that can not be missed.
A new French mural. There is an arrow on the right edge to step through the images. OR select the red arrow at the left bottom for audio/video and wait for a short AD to play.
Maybe Canada for that dual citizenship, but they don't easily accept US applications. And we might try to "annex" them at some point in this administration anyway.
Thanks @catch22.. Important party. Sounds like the nephew will become a teenager in another year! Many different feeling s are best expressed through art.
Thanks @Mark for the M* link. It delves into the financial ramifications that might stem from a less independent Federal Reserve. A lot on that question has already been addressed here in other threads by several seasoned investors. M* might have gone a step farther and contrasted our Central Bank’s functionality with some others. How good is it or how bad relatively speaking? I wonder if their Fund Analysis will in the future include references to governmental stability in the way they rate a fund’s stewardship? Might some now “gold” rated funds fall to “silver” or “neutral” as a consequence of being based in the U.S. or holding U.S. assets? Too early to say. I think their intent was to serve notice what could happen rather than making an immediate dire forecast.
Below are a few key excerpts from the M* article Larry linked mentioned. I’ve chopped it up quite a bit trying to hit the highlights. It’s quite redundant really. They start by rehashing the Trump / Powell ongoing conflict. They note that Wednesday’s market took a hit on reports Trump was about to fire Powell and later recovered when that proved not to be the case. Several quoted economists / money managers support the concept of Fed independence. The most persistent theme is that if a less restrictive policy (lower short term rates) were effected by a Fed Chair replacement for Powell, the yield curve would steepen. Shorter rates would fall. Longer rates would rise.
- Markets seesawed on reports that President Trump was getting ready to fire Fed Chair Jerome Powell”
- Trump removing Powell could dent confidence in the central bank and put upward pressure on longer-term inflation.
- Stocks fell as investors digested yet another threat to the Fed’s independence, with the Morningstar US Market Index declining as much as 1.16% on Wednesday morning before making up lost ground after Trump’s denial. Meanwhile, longer-dated bonds sold off, sending yields higher, amid worries about higher inflation over the long term.
- These concerns are evident in the bond market. Yields on the 2-year Treasury note fell from 3.97% to 3.87% during Wednesday trading. Meanwhile, yields on the 30-year Treasury bill spiked from 4.97% to 5.08%.
- That’s not too surprising, according to Thierry Wizman, global FX and rates strategist at Macquarie Group. “You would expect the curve to steepen if Powell got bashed or fired.”
- Shorter-term yields jumped because markets view Powell’s eventual replacement as more likely to lower interest rates. But over the longer term, Wizman says this means “the Fed will pay less attention to its price stability mandate, and there might be more inflation.” More inflation means longer-dated bonds are potentially riskier and may offer less yield in the future. That leads to falling prices as investors demand a higher premium to compensate for that risk.
(The italics indicate that I copied from article.)
Hank. Did you read my post or did the word politics trigger you ? The point was not to micro analyze an article or imagine words like theft and seizure ….. THE POINT WAS THAT MAINSTREAM ,,, not the lunatic left commentary recognize the connection between political actors and the markets. Have a great day Hank.
“Will Trump Really Fire Powell? Markets Whipsaw with Fed Independence Online ” Article directly connects politics and our investments. Has M* become part of the lunatic left,,,, does M* have TDS? I think not. When, if ever, will this fine forum accept that these are not normal times and the Orange Revolution will sooner or later impact markets,,,,, its not a question of if,,, it’s a question of market timing.
Larry, I’m happy to re-post your original comment (OP) above. I’m fine with your feelings. You express them well. @Mark supplied the link to the M* article you apparently referenced. I see nothing wrong with my reading the actual article referenced by you and sharing my own reactions. If I’m missing some substance in the article or if @Mark linked an incorrect article please point that out.
It’s not for “this forum” to take a stance on the political climate and tell you or me how to invest accordingly. We should welcome all points of view here. As I’ve said before, Republicans as well as Democrats know how to make money. I’m happy to acquire investment wisdom from both.
Maybe Canada for that dual citizenship, but they don't easily accept US applications. And we might try to "annex" them at some point in this administration anyway.
Some Caribbean islands are virtually SELLING citizenships and passports. But It's not cheap. Vanuatu, too. And Nauru. But the EU and US have begun to throw up roadblocks in such cases. Some of those programs are not very accountable nor reliable. And it's been shown that in some cases, you'd be getting a 2nd-class citizenship; or much of the money ends up in officials' pockets. https://en.wikipedia.org/wiki/Immigrant_investor_programs
Hi @hank et al A portion from my initial write above --- As international investors, both retail and large houses continue to watch the machinations in this country. Many will have second thoughts about U.S. holdings, as they watch the 'rule of law' disappear, as well as the unstable and ever changing monetary policies change at an hourly rate..........well, yes this affects our investments.
As the deterioration continues in this area, one finds the dollar whacks downward, and more future unwillingness to participate in Treasury holdings.---
I was not discussing moving accounts out of the U.S.; I'm attempting to determine how far the pendulum may swing away from some U.S. sectors. I won't chase international at this point, although this may be in error, not to. I watch momentum, but too much of the monetary crazies are place; emanating from this country. We haven't changed anything in the portfolio this year...yet. But, the healthcare section is damaged way beyond normal from the legislative changes. We'll stay for now. We won't abandon tech. IG bonds are still in place, as well as the MMKT's.
But, capital preservation is the highest priority.
The investing world is 'torn' and searching. And we can't and won't play the high risk, as in the earlier years.
”But, the healthcare section is damaged way beyond normal from the legislative changes. We'll stay for now.”
Yeah. I’ve only fiddled with H/C recently and in a minimal amount. BME is one of my 10 CEFs. It it drops much farther I’ll shovel a bit more into it. I was overweight international equities past couple years. Sold a lot of that off a month or so back. Guessing nearer to 50/50 international / domestic now.
Honestly, adjusting portfolio to age is the biggest challenge these days. Ask yourself: If a friend, relative or neighbor of your age asked how to invest their life savings now, what would you advise them? How about 2-3 years from now?
At Hank. “Adjusting portfolio to age” would be a great thread. As always it’s very personal. I have a close friend who has a chronic illness, is in an assisted living facility , is running out of money and claims to be 95% equity. Cognitive decline? Anyway that would be a very interesting discussion with lots of opinions.
But I do think standing back and considering what you would tell a 75+ year old neighbor (based on your own supposedly superior knowledge) is a good way to look at and appreciate the degree of risk you’re taking yourself.
I hedge with 12.5% slugs of BAMBX and CPLSX. Neither will win any races. Also recently raised cash to 12.5%. I would not recommend GDL to others, but I also hold 12.5% in that one and consider it a proxy for short term bonds - but only over multi-year periods. I’ve looked at many age related recommendations. They’re all over the place. One on Schwab’s site is more conservative than one on TRP’s. If I can find either I’ll post it.
Bottom line - Age for some of us is the most important consideration in portfolio construction. Other considerations, like political climate, valuations, Morningstar / MFO ratings and past performance are important too - but not as critically important IMHO as is age. That changes, however, if your primary purpose is to invest for those who will succeed you and you do not need the invested money to meet your own needs.
@LarryB - I don’t wish to start a thread on the age topic. But feel free to use the materials I linked if you decide to start such a thread.
The Schwab recommendation is pretty close to what we have done, although we didn't rely on Schwab or any other specific input for our decisions.
Now in our 80s, at the moment our "reserve savings" are 57% MMKT and 43% fixed income. The fixed is divided into 53% short & medium term Treasury, and 47% CDs. All of the reserve savings are for income, and all will be held to maturity, so the daily valuation gyrations are not really a factor for us.
We are able to forgo the stock exposure because our SS & pension income is sufficient to cover our normal expenses, with a bit left over to increase the reserve savings and help offset inflation. I guess that you could call our category "Ultra Conservative".
Being in our 80s we do wake up a number of times from sleep, but it's not because of financial worry.
At Old_Joe. We are also Ultra Conservative as well. No real need to take much risk. We also have a Reserve Savings like you , similarly allocated. I often think about just having one pile,, I call it the single metric instead of two buckets plus checking. The Reserve Savings is reassuring.
As we all know, as has been stated here many times, there are a lot of variables affecting a portfolio mix. I offer this 19 year old real world example for a 529 for a view over time. This is a self-directed account started at 50/50 equity/bond with a mandatory rebalance every September. The funds currently used are VITPX and VBMPX. These institutional tickers have changed a few time over the years, but still remain as TOTAL U.S. for holdings for each fund.
The included GFC period is: 2006-2009 (4 years). VITPX was -3% for the period (max drawdown was about -43% for a brief period) VBMPX was +23% for the period ---A blended annualized of +5% for this period.
For the full period, 7.65%. Definitely acceptable.
A true LAZY portfolio. But, this was fashioned for capital protection; as portfolio changes were limited to 1 per year initially, and now 2 per year. This was not an account we wanted to play 'cowboy' with.
2022 & 2008 only lasted a year so neither is representative of a long term horizon. But sometimes a year can feel like an eternity. A look at how that combination worked.
VITPX -19.5%
VBMPX -13.14%
Combined 2022 loss = -16.45%
(gain deeded to “break even” = +20%)
For 2008 I substituted VITBX for VBMPX which does not appear to have existed then
VITPX -36.9%
VBTIX +5.2
Combined 2008 loss = -21%
(gain needed to “break even” = +27%)
Speaking for only myself, I would not want to contemplate having a year like either of the above at age 80 and beyond. Lose a little (5-7%) in a bad year? Sure, I’ll gamble to that extent. Lose more than 15% in a single year? Not for me. Nor would I recommend the 83 year old widow next door put all her savings into a 50/50 stock/bond mix.
BTW - I don’t know where people get the idea bonds are safe. Some like TIPS probably are if held individually. But a long-term higher rated Treasury or Corporate makes a nice deflation hedge. Such bonds tend to lose value in periods of rising inflation. So one might ask himself what it is they’re trying to protect against before buying a long term high quality bond or a fund that owns such.
Hi @hank Thanks for you work, too. The early period starting in 2006, for several years was the main contribution period into the account. With the equity market melt in 2008 and not really getting back to 'even' for about 4 years is when we continued to make contributions; and buying 'low' pricing. A benefit of dollar cost averaging. And, yes; a few periods were 'hang on'. But, for the full period, 7.65% is definitely acceptable. 'Course the intention of a 529 being for education, the monies are tax sheltered; and with the new regs from Secure Act 2.0; if guidelines are met, up to $35,000 of the open 529 may be transferred ($7,000 max/year) to a Roth IRA of the beneficiary 'without' any tax implications. State tax deductions from taxable income are also available to whom contributes to the account. Taxation is in place if the account balance is liquidated in total; but the account may be transferred to another beneficiary without taxation. Taxation is only on the earning of the account, and not upon the contributions. A pretty sweet deal for the most part Take care of you and yours, Catch
“Will Trump Really Fire Powell? Markets Whipsaw with Fed Independence Online ” Article directly connects politics and our investments. Has M* become part of the lunatic left,,,, does M* have TDS? I think not. When, if ever, will this fine forum accept that these are not normal times and the Orange Revolution will sooner or later impact markets,,,,, its not a question of if,,, it’s a question of market timing.
Several posters have been TDSing this site for months. They have been posting political takes nearly every day, and it’s clear they dislike Trump. That’s their right—but this isn’t a political forum.
If the goal is to connect politics to markets, then back it up with data that helps people make smarter investment decisions.
So far, in 2025, the S&P 500 is hitting highs, and bonds are performing well. If the political views don’t match that reality, maybe it’s time to refocus on investments instead.
Yelling that the world is on fire and spreading despair doesn't help anyone make money.
We're here to share strategies, data, and ideas that help us navigate the markets—not to get caught up in doom-and-gloom narratives that don’t align with current performance.
If you think the sky is falling, fine—but show us how that translates into smart investment decisions. Otherwise, it's just noise.
@FD. If you would read the comments and the linked Morningstar article you will see that the thread is about investing. “Other Investing” vs. “Fund Discussions”? You might have a point. However I count 10 or more specific funds mentioned in the discussion including 3 by Larry and 4 by myself.
PS - I do understand that the OP’s title sounds a little political. Please look beyond it. If you have thoughts on the age issue / portfolio construction kindly share your ideas. If you find things in the linked M* article you take exception to please share your thoughts.
Comments
Let us suppose an American investor has chosen to invest in U.S. centered holdings, due to the stability of the country. 40% equity, 20% investment grade bonds and 40% in MMKT's. Oh, wait; that is our house.
As international investors, both retail and large houses continue to watch the machinations in this country. Many will have second thoughts about U.S. holdings,
as they watch the 'rule of law' disappear, as well as the unstable and ever changing monetary policies change at an hourly rate..........well, yes this affects our investments.
As the deterioration continues in this area, one finds the dollar whacks downward, and more future unwillingness to participate in Treasury holdings.
Our country's place in the world of admiration and respect is going bye-bye.
And, yes; the instability originates from the current administration, and its operatives.
Assuming a great mistrust of the U.S. government (evident in Larry’s OP), how would you or I benefit by positioning our U.S. domiciled dollars, possibly held inside a U.S. IRS sanctioned and regulated IRA / 401K, into some “foreign” fund nonetheless regulated by the U.S. Securities and Exchange Commission at a U.S. based brokerage house (Fidelity, Schwab, etc,) which operates according to rules and regulations of the U.S. Financial Industry Regulatory Authority where it would still be subject to U.S. IRS Tax Codes and enforcement with the knowledge that any alleged illegal harmful encroachment against your investment at that brokerage would be heard and settled in a U.S, based Court of Law?
What are you really gaining here other than perhaps feeling better?
For years and years I was near always invested in nothing but equities, primarily those inhabiting the momentum space. Not no more.
Maybe I read too much into Larry’s and Catch’s posts. But if anyone sees buying foreign funds or other holdings as a “work around” to threats posed by current U.S. political chaos it’s not as easy as buying a Swiss ADR or a fund investing in Europe, Asia or Brazil. Yes - You might benefit if the other nations’ markets outperform the U.S. But by and large your investment is still being “safeguarded” by U.S. agencies and courts.
If Larry or someone else wants to make a case for buying a European fund, Latin American fund or something like PRPFX which holds gold, silver and Swiss Francs as hedges against declines in U.S. assets, I’d love to hear the case. I think he or Catch could make a convincing argument. But let’s not assume those holdings will be better protected against lax enforcement or outright theft / seizure by the U.S. government. (Perhaps worth remembering)
There are, I suppose, ways to actually move one’s assets abroad. But ISTM if you are doing so as a U.S. citizen they still are subject to many U.S. laws including those of the IRS. I did read in either Barron’s or the WSJ a couple months ago that an unusually large number of very wealthy U.S. investors have recently taken out dual citizenship (in the U.S. and another country) for the purpose of moving their U.S. based assets abroad. That makes sense, but who here is so planning?
Maybe @LarrtB would clarify exactly what investment steps he’s considering or taking to deal with the problem he’s identified. I assume he wants to approach this as an investing topic. Perhaps he could link the M* article he references as well.
Yes, it's patently clear that the current Orange regime will bend, spindle, mutilate, fold and ignore at will--- whichever works best for their own aims in each case, regardless of the needs of the country, or stability, trustworthiness or the rule of law.
Dual citizenship? Ding! I would have to create an address in Ireland. I'd surely need to sign-up for their version of S.S. and become ipso facto eligible for their national health plan, which is income-based. Then, I could easily create an account, online or otherwise, to invest in companies directly, and intentionally avoid dealing with USA authorities and the IRS. Our erstwhile "friend" Chang is doing it already, living in ..... Andorra. Those with parents or grandparents who came from Ireland, Poland, Italy, Sweden and some other places may apply for dual citizenship. Of course, that's subject to change; and spouses may or may not qualify--- though the spouse of an EU citizen does hold some citizen-like privileges, medical plan inclusion among them.
I haven't read it yet nor have I ever considered the angle of moving my investments/holdings outside the US. Thanks for pointing out that aspect.
PRPFX should do well if the precious metals continue to shine. I sold it several months ago.
A new French mural. There is an arrow on the right edge to step through the images. OR select the red arrow at the left bottom for audio/video and wait for a short AD to play.
Below are a few key excerpts from the M* article Larry
linkedmentioned. I’ve chopped it up quite a bit trying to hit the highlights. It’s quite redundant really. They start by rehashing the Trump / Powell ongoing conflict. They note that Wednesday’s market took a hit on reports Trump was about to fire Powell and later recovered when that proved not to be the case. Several quoted economists / money managers support the concept of Fed independence. The most persistent theme is that if a less restrictive policy (lower short term rates) were effected by a Fed Chair replacement for Powell, the yield curve would steepen. Shorter rates would fall. Longer rates would rise.- From: https://www.morningstar.com/markets/will-trump-really-fire-powell-markets-whipsaw-with-fed-independence-line
- Markets seesawed on reports that President Trump was getting ready to fire Fed Chair Jerome Powell”
- Trump removing Powell could dent confidence in the central bank and put upward pressure on longer-term inflation.
- Stocks fell as investors digested yet another threat to the Fed’s independence, with the Morningstar US Market Index declining as much as 1.16% on Wednesday morning before making up lost ground after Trump’s denial. Meanwhile, longer-dated bonds sold off, sending yields higher, amid worries about higher inflation over the long term.
- These concerns are evident in the bond market. Yields on the 2-year Treasury note fell from 3.97% to 3.87% during Wednesday trading. Meanwhile, yields on the 30-year Treasury bill spiked from 4.97% to 5.08%.
- That’s not too surprising, according to Thierry Wizman, global FX and rates strategist at Macquarie Group. “You would expect the curve to steepen if Powell got bashed or fired.”
- Shorter-term yields jumped because markets view Powell’s eventual replacement as more likely to lower interest rates. But over the longer term, Wizman says this means “the Fed will pay less attention to its price stability mandate, and there might be more inflation.” More inflation means longer-dated bonds are potentially riskier and may offer less yield in the future. That leads to falling prices as investors demand a higher premium to compensate for that risk.
(The italics indicate that I copied from article.)
It’s not for “this forum” to take a stance on the political climate and tell you or me how to invest accordingly. We should welcome all points of view here. As I’ve said before, Republicans as well as Democrats know how to make money. I’m happy to acquire investment wisdom from both.
https://en.wikipedia.org/wiki/Immigrant_investor_programs
A portion from my initial write above
--- As international investors, both retail and large houses continue to watch the machinations in this country. Many will have second thoughts about U.S. holdings,
as they watch the 'rule of law' disappear, as well as the unstable and ever changing monetary policies change at an hourly rate..........well, yes this affects our investments.
As the deterioration continues in this area, one finds the dollar whacks downward, and more future unwillingness to participate in Treasury holdings.---
I was not discussing moving accounts out of the U.S.; I'm attempting to determine how far the pendulum may swing away from some U.S. sectors. I won't chase international at this point, although this may be in error, not to.
I watch momentum, but too much of the monetary crazies are place; emanating from this country.
We haven't changed anything in the portfolio this year...yet. But, the healthcare section is damaged way beyond normal from the legislative changes. We'll stay for now. We won't abandon tech. IG bonds are still in place, as well as the MMKT's.
But, capital preservation is the highest priority.
The investing world is 'torn' and searching. And we can't and won't play the high risk, as in the earlier years.
”But, the healthcare section is damaged way beyond normal from the legislative changes. We'll stay for now.”
Yeah. I’ve only fiddled with H/C recently and in a minimal amount. BME is one of my 10 CEFs. It it drops much farther I’ll shovel a bit more into it. I was overweight international equities past couple years. Sold a lot of that off a month or so back. Guessing nearer to 50/50 international / domestic now.
Honestly, adjusting portfolio to age is the biggest challenge these days. Ask yourself: If a friend, relative or neighbor of your age asked how to invest their life savings now, what would you advise them? How about 2-3 years from now?
Nice to be 9 again like that nephew …
But I do think standing back and considering what you would tell a 75+ year old neighbor (based on your own supposedly superior knowledge) is a good way to look at and appreciate the degree of risk you’re taking yourself.
I hedge with 12.5% slugs of BAMBX and CPLSX. Neither will win any races. Also recently raised cash to 12.5%. I would not recommend GDL to others, but I also hold 12.5% in that one and consider it a proxy for short term bonds - but only over multi-year periods. I’ve looked at many age related recommendations. They’re all over the place. One on Schwab’s site is more conservative than one on TRP’s. If I can find either I’ll post it.
From T Rowe Price
From Charles Schwab
Bottom line - Age for some of us is the most important consideration in portfolio construction. Other considerations, like political climate, valuations, Morningstar / MFO ratings and past performance are important too - but not as critically important IMHO as is age. That changes, however, if your primary purpose is to invest for those who will succeed you and you do not need the invested money to meet your own needs.
@LarryB - I don’t wish to start a thread on the age topic. But feel free to use the materials I linked if you decide to start such a thread.
Now in our 80s, at the moment our "reserve savings" are 57% MMKT and 43% fixed income. The fixed is divided into 53% short & medium term Treasury, and 47% CDs. All of the reserve savings are for income, and all will be held to maturity, so the daily valuation gyrations are not really a factor for us.
We are able to forgo the stock exposure because our SS & pension income is sufficient to cover our normal expenses, with a bit left over to increase the reserve savings and help offset inflation. I guess that you could call our category "Ultra Conservative".
Being in our 80s we do wake up a number of times from sleep, but it's not because of financial worry.
I offer this 19 year old real world example for a 529 for a view over time.
This is a self-directed account started at 50/50 equity/bond with a mandatory rebalance every September. The funds currently used are VITPX and VBMPX. These institutional tickers have changed a few time over the years, but still remain as TOTAL U.S. for holdings for each fund.
The included GFC period is: 2006-2009 (4 years).
VITPX was -3% for the period (max drawdown was about -43% for a brief period)
VBMPX was +23% for the period
---A blended annualized of +5% for this period. For the full period, 7.65%. Definitely acceptable.
A true LAZY portfolio. But, this was fashioned for capital protection; as portfolio changes were limited to 1 per year initially, and now 2 per year. This was not an account we wanted to play 'cowboy' with.
Well, anyway; have a nice evening.
Catch
2022 & 2008 only lasted a year so neither is representative of a long term horizon. But sometimes a year can feel like an eternity. A look at how that combination worked.
VITPX -19.5%
VBMPX -13.14%
Combined 2022 loss = -16.45%
(gain deeded to “break even” = +20%)
For 2008 I substituted VITBX for VBMPX which does not appear to have existed then
VITPX -36.9%
VBTIX +5.2
Combined 2008 loss = -21%
(gain needed to “break even” = +27%)
Speaking for only myself, I would not want to contemplate having a year like either of the above at age 80 and beyond. Lose a little (5-7%) in a bad year? Sure, I’ll gamble to that extent. Lose more than 15% in a single year? Not for me. Nor would I recommend the 83 year old widow next door put all her savings into a 50/50 stock/bond mix.
BTW - I don’t know where people get the idea bonds are safe. Some like TIPS probably are if held individually. But a long-term higher rated Treasury or Corporate makes a nice deflation hedge. Such bonds tend to lose value in periods of rising inflation. So one might ask himself what it is they’re trying to protect against before buying a long term high quality bond or a fund that owns such.
The early period starting in 2006, for several years was the main contribution period into the account. With the equity market melt in 2008 and not really getting back to 'even' for about 4 years is when we continued to make contributions; and buying 'low' pricing. A benefit of dollar cost averaging. And, yes; a few periods were 'hang on'. But, for the full period, 7.65% is definitely acceptable.
'Course the intention of a 529 being for education, the monies are tax sheltered; and with the new regs from Secure Act 2.0; if guidelines are met, up to $35,000 of the open 529 may be transferred ($7,000 max/year) to a Roth IRA of the beneficiary 'without' any tax implications.
State tax deductions from taxable income are also available to whom contributes to the account.
Taxation is in place if the account balance is liquidated in total; but the account may be transferred to another beneficiary without taxation. Taxation is only on the earning of the account, and not upon the contributions.
A pretty sweet deal for the most part
Take care of you and yours,
Catch
They have been posting political takes nearly every day, and it’s clear they dislike Trump. That’s their right—but this isn’t a political forum.
If the goal is to connect politics to markets, then back it up with data that helps people make smarter investment decisions.
So far, in 2025, the S&P 500 is hitting highs, and bonds are performing well. If the political views don’t match that reality, maybe it’s time to refocus on investments instead.
Yelling that the world is on fire and spreading despair doesn't help anyone make money.
We're here to share strategies, data, and ideas that help us navigate the markets—not to get caught up in doom-and-gloom narratives that don’t align with current performance.
If you think the sky is falling, fine—but show us how that translates into smart investment decisions. Otherwise, it's just noise.
The OP is under Fund Discussions. Why?
PS - I do understand that the OP’s title sounds a little political. Please look beyond it. If you have thoughts on the age issue / portfolio construction kindly share your ideas. If you find things in the linked M* article you take exception to please share your thoughts.