buddtholomew wrote:
mathjak107 wrote:
stuper1 wrote:
Mathjak107,
I would like to see your model.
so the final version i decided on is a mix of active and etf .
the version as it stands now :
fidelity growth and income fund FDGRX - had this and blue chip growth for many many years.
fidelity blue chip growth FBGRX
vanguard total market index vti
vanguard veu all world index etf
vanguard vig dividend achievers etf
that is the equity side.
the bond side uses
vanguard admiral total bond fund (now only 10% of the portfolio)
fidelity floating rate high yield
vanguard bsv short term bond
vanguard vtip short term inflation proof bond etf
10% GLD GOLD ETF
10% CASH which represents 2 years of retirement withdrawals and some emergency money.
i toyed and toyed with so many different models until i came up with a mix of what i thought would cover the areas i wanted to cover with as little interest rate sensitivity as i could which is why i left reits out of the portfolio at this stage.
if inflation picks up i will swap total bond for a real return fund like fidelity strategic real return FSRRX . that carrys to much weight in areas geared for higher inflation to be used at this stage in my opinion.
the model works out to 50% in equities , 30% bonds , 10% gold 10% cash
That's exactly my mix as well (5 additional funds in addition to the PP) - 50/40/10 with 50/50 US/INT, SCV and REIT and bonds across the yield curve (AVG 5.6 duration). It boils down to the individual's comfort with gold. which from the onset has been unkind. More equities and cash and a lower gold allocation.
i think with gold in a bear market a 10% stake is fine. but much more than that i think would be foolish unless you start to see big changes in the dollar.
even then , last time the worlds central banks dumped dollars weakening the dollar further they bought inflation proof treasuries instead as a hedge.
that is what happened a few years ago when the dollar weakened.
gold was still not the best investment to have.
in fact foreign bonds would have been much smarter.
in my own portfolio i played it by swapping funds . i switched to fidelity export and multi national which did very well. then as the dollar strengthened i switched back to more domestic funds.
that is what i mean by nudging a portfolio to fit the big picture.
folks are looking for a simple buy and die formula for investing but to do well there is none as things shift over time to major trends.
you do not have to make major bets on things , just try different funds with different weightings .
now with the 40 year bull market in bonds possibly coming to an end bonds may no longer be contributing to the party but taking away from it . that may make the old buy a stock index fund and a bond index fund and just leave it not the best way to invest going forward..
you may have to be more dynamic swapping out different types of bond funds over time to keep from being sand bagged .
just look at how even with the issues in greece the dollar has been the big winner and gold is doing nothing but falling deeper in a hole.
you have to ask yourself what price are you willing to pay for insuring the remote possibilities of things happening , that are even worse than the worst of the past ?.
eventually it can reach a point you give up so much in gains that even if you fell from a more conventional mix you may be way a a head.
there is zero point in time after 20-30 years of growth even 100% equities would have not been a winner .
i really would like to see the pp succeed going forward but i think the headwinds now will be far to strong for it to flourish .