Stock/bond allocation

What is your retirement stock/bond allocation?

  • 90%

    Votes: 8 11.8%
  • 85%

    Votes: 1 1.5%
  • 80%

    Votes: 4 5.9%
  • 70%

    Votes: 5 7.4%
  • 60%

    Votes: 5 7.4%
  • 100%

    Votes: 45 66.2%

  • Total voters
    68

SDHNTR

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I’m not going to comment on asset allocation except to say that age is but one factor, and a far less important one, than a multitude of others. There’s a better way, and surprise, surprise, it’s starts and ends with a financial plan.

Those of you investing (based on age or anything else) without a financial plan have the cart way out in front of the horse.
 

SDHNTR

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This is exactly what I tell people. The finiancial advisers get commissions and benefits by buying certain products. So whenever my FA suggests something, I always wonder what's in it for him.
This shouldn’t, and doesn’t have to be the case. And frankly, nowadays, it’s almost rare. Most of the proprietary product pushing is long gone. There are plenty of fee based advisors who do not work on commissions and are legally bound by a fiduciary standard of care. Why have that doubt in the back of your mind when working with a professional you should trust completely?
 

KsRancher

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Joined
Jun 6, 2018
Messages
703
This shouldn’t, and doesn’t have to be the case. And frankly, nowadays, it’s almost rare. Most of the proprietary product pushing is long gone. There are plenty of fee based advisors who do not work on commissions and are legally bound by a fiduciary standard of care. Why have that doubt in the back of your mind when working with a professional you should trust completely?
Not to derail the OP's thread. But I have been battling with Edward Jones for over a year trying to get my money put into what I want. It's in a 401k, they call it a "simple IRA". I wanted it to be 50/50 in the SPY and QQQ. Not allowed to do that. I am required to have at least 4 different positions. And they must have atleast 20% in each of these categories. Small cap, mid-cap, large cap and international.



Frustrating doesn't even describe this. They tell me that they have me invested for the "long haul, not get rich quick" they say "you are invested in "good, safe growth stocks". But when you have them look up a chart of the SPY and QQQ they either aren't smart enough or don't care to see how much the SPY and QQQ have out preformed thier normal crap they have me in. Thier international stock I am in has something like a 7% growth over a 5yr period. That's not 7% annually, it's over the whole 5yrs. Imagine 20% of your account being in something that has growth 7% in 5yrs🤦


They don't know it yet but they are losing my account Jan 1st
 

bow_dozer

Lil-Rokslider
Joined
Aug 16, 2016
Messages
288
Not to derail the OP's thread. But I have been battling with Edward Jones for over a year trying to get my money put into what I want. It's in a 401k, they call it a "simple IRA". I wanted it to be 50/50 in the SPY and QQQ. Not allowed to do that. I am required to have at least 4 different positions. And they must have atleast 20% in each of these categories. Small cap, mid-cap, large cap and international.



Frustrating doesn't even describe this. They tell me that they have me invested for the "long haul, not get rich quick" they say "you are invested in "good, safe growth stocks". But when you have them look up a chart of the SPY and QQQ they either aren't smart enough or don't care to see how much the SPY and QQQ have out preformed thier normal crap they have me in. Thier international stock I am in has something like a 7% growth over a 5yr period. That's not 7% annually, it's over the whole 5yrs. Imagine 20% of your account being in something that has growth 7% in 5yrs🤦


They don't know it yet but they are losing my account Jan 1st
I’m a FA, we are a RIA. We have rolled over so many assets the past couple years from these firms bc of this….
 

Crghss

Lil-Rokslider
Joined
Jun 1, 2018
Messages
285
Location
Jupiter, Florida
Always get this too, you need X amount in international investments. Why?

Apple, Amazon and Microsoft are International.

I’m in Tech, S&P 500, Dividend ETF and will remain so in retirement. Handle full of stocks all with high yield dividends for retirement.
 

2531usmc

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Joined
Apr 5, 2021
Messages
478
I don’t claim to be an expert in much of anything, just an old guy that has been investing since the 1980s. I’ve experienced multiple times when the market slid off ~40_50%. When this happens, it’s not just a number on a computer screen going down. It’s also a media in a full throat roar telling you the world is coming to an end. You’re surrounded by news (truthful or not) that is bad and getting worse. It takes a very strong constitution not to sell when you see your life savings slipping away.

As to the argument that the market will always come back….

Equities have been on an incredible run since the great financial crisis of circa 2007/8. Much of this run can be tied to the Fed artificially keeping interest rates ~1% and massive debt…$1T every 100 days. This cannot go on forever and when the merry go round stops, there will be significant pain. It’s not an unreasonable expectation for the market to tank and stay tanked for years. It’s happened before…

I never thought of my investments in terms of retiring rich or living for the moment’s pleasure. To me, it was always building a reserve of economic security when everything goes sideways.
 

KsRancher

WKR
Joined
Jun 6, 2018
Messages
703
I’m a FA, we are a RIA. We have rolled over so many assets the past couple years from these firms bc of this….
Edward Jones said if I wanted more flexibility with my account that they could move it over to a traditional IRA. The annual fee would be really cheap. But they wanted to charge me $1200 for a transaction fee to go 50/50 into SPY and QQQ. Currently looking to see where I can move it to with lower cost
 
Joined
Sep 13, 2020
Messages
761
I've been trying to loosely follow the Swensen Model which is based off of how Ivy League endowments allocate their money. I'm only 37, so I have less in bonds that he suggests. I have 5% in TIPS in a Roth IRA for me, and 7% in TIPS and 7 % in US Treasury Bonds in my wife's rollover 401k. My 401k through work, which is our largest retirement account dollar wise, is 100% equities.

Here's the Swensen Model for those that are interested. The argument is that diversification is done through TYPES of funds. Not based on owning stocks in different sectors or something like that.

AssetPercentageComments
US Stocks30%Capitalize on good economic growth
US Real Estate (REITs)20%Protection from inflationary environment. Typically low correlation with other asset classes. Payout 90% of net income.
International Stock, Developed Markets15%Capitalize on good economic growth
International Stock, Emerging Markets5%Capitalize on good economic growth
Treasury Inflation-Protected Securities15%Bear market security + inflationary environment
US Treasury Bonds15%Bear market security
 

Crghss

Lil-Rokslider
Joined
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Messages
285
Location
Jupiter, Florida
I've been trying to loosely follow the Swensen Model which is based off of how Ivy League endowments allocate their money. I'm only 37, so I have less in bonds that he suggests. I have 5% in TIPS in a Roth IRA for me, and 7% in TIPS and 7 % in US Treasury Bonds in my wife's rollover 401k. My 401k through work, which is our largest retirement account dollar wise, is 100% equities.

Here's the Swensen Model for those that are interested. The argument is that diversification is done through TYPES of funds. Not based on owning stocks in different sectors or something like that.

AssetPercentageComments
US Stocks30%Capitalize on good economic growth
US Real Estate (REITs)20%Protection from inflationary environment. Typically low correlation with other asset classes. Payout 90% of net income.
International Stock, Developed Markets15%Capitalize on good economic growth
International Stock, Emerging Markets5%Capitalize on good economic growth
Treasury Inflation-Protected Securities15%Bear market security + inflationary environment
US Treasury Bonds15%Bear market security
Do what you want with your money but show me when in investment history that idea has panned out.
 

MattB

WKR
Joined
Sep 29, 2012
Messages
5,743
I've been trying to loosely follow the Swensen Model which is based off of how Ivy League endowments allocate their money. I'm only 37, so I have less in bonds that he suggests. I have 5% in TIPS in a Roth IRA for me, and 7% in TIPS and 7 % in US Treasury Bonds in my wife's rollover 401k. My 401k through work, which is our largest retirement account dollar wise, is 100% equities.

Here's the Swensen Model for those that are interested. The argument is that diversification is done through TYPES of funds. Not based on owning stocks in different sectors or something like that.

AssetPercentageComments
US Stocks30%Capitalize on good economic growth
US Real Estate (REITs)20%Protection from inflationary environment. Typically low correlation with other asset classes. Payout 90% of net income.
International Stock, Developed Markets15%Capitalize on good economic growth
International Stock, Emerging Markets5%Capitalize on good economic growth
Treasury Inflation-Protected Securities15%Bear market security + inflationary environment
US Treasury Bonds15%Bear market security
Endowments and individuals will generally have very different financial goals, so I wouldn’t presume a strategy that is appropriate for an endowment is appropriate for an individual investor.
 
Joined
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Messages
761
From investments or people keep throwing money at them? Think it’d be the latter.

In the words of Warren Buffett “There has been no greater creator of wealth than the US economy”.

Former according to this source.

Endowments and individuals will generally have very different financial goals, so I wouldn’t presume a strategy that is appropriate for an endowment is appropriate for an individual investor.

Beating the market is anyone’s goal, right? 8-10% per year on average over the long term should be enough to retire off of.

The only potential knock on this is it was authored in 2013. Not sure if the strategy has dramatically changed in the last decade. Wouldn’t think so, though.

It also advocates highly for ETFs due to the substantially lower fees. Some of the modeling that shows how much money you save on fees over a 20-30 year period is mind boggling.

IMG_0702.jpeg
 
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Crghss

Lil-Rokslider
Joined
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Messages
285
Location
Jupiter, Florida
A
Former according to this source.



Beating the market is anyone’s goal, right? 8-10% per year on average over the long term should be enough to retire off of.

The only potential knock on this is it was authored in 2013. Not sure if the strategy has dramatically changed in the last decade. Wouldn’t think so, though.

It also advocates highly for ETFs due to the substantially lower fees. Some of the modeling that shows how much money you save on fees over a 20-30 year period is mind boggling.

View attachment 745155
Some random paragraph that has no actual data? Show me actual metrics. You can’t. Because they don’t exist. You stick with your supposed 8% (don’t think you’ll make 8%) I’ll make money.

The Vanguard Information Technology Index Fund ETF (VGT) has delivered impressive returns since its inception. As of July 26, 2024, here are the annualized returns for VGT:

Vanguard S&P 500 ETF (VOO) since its inception. Since VOO’s inception on September 7, 2010, it has delivered impressive returns. Here are the annualized returns for VOO over various time frames:

  • 1-Year Annualized Return: Approximately 21.28%
  • 3-Year Annualized Return: Approximately 18.12%
  • 5-Year Annualized Return: Approximately 17.03%
  • 10-Year Annualized Return: Approximately 16.27%


Certainly! The Vanguard Dividend Appreciation Index Fund ETF (VIG) has a strong track record of delivering consistent returns. Since its inception on April 21, 2006, here are the annualized returns for VIG:
 

Crghss

Lil-Rokslider
Joined
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Messages
285
Location
Jupiter, Florida
Former according to this source.



Beating the market is anyone’s goal, right? 8-10% per year on average over the long term should be enough to retire off of.

The only potential knock on this is it was authored in 2013. Not sure if the strategy has dramatically changed in the last decade. Wouldn’t think so, though.

It also advocates highly for ETFs due to the substantially lower fees. Some of the modeling that shows how much money you save on fees over a 20-30 year period is mind boggling.

View attachment 745155
Don’t know where you got the article but clearly it is wrong.
Vanguard 500 Index Fund (VFINX), while not exclusively focused on technology, has a solid track record. Over the past 20 years, its average annual return, including dividends, has been approximately 12.7%
Fidelity 500 Index Fund (FXAIX)
The average annual return for FXAIX over the last 20 years is approximately 14.37%12. Keep in mind that past performance doesn’t guarantee future results, but it provides insights into historical trends.
 

MattB

WKR
Joined
Sep 29, 2012
Messages
5,743
Former according to this source.



Beating the market is anyone’s goal, right? 8-10% per year on average over the long term should be enough to retire off of.

The only potential knock on this is it was authored in 2013. Not sure if the strategy has dramatically changed in the last decade. Wouldn’t think so, though.

It also advocates highly for ETFs due to the substantially lower fees. Some of the modeling that shows how much money you save on fees over a 20-30 year period is mind boggling.
Endowments usually continue to bring in donations from alumni and have a consistent annual payout % for perpetuity - both very different fact patterns from individual retirement. Not to mention tax considerations.
 
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Messages
761
Not here to argue folks. I answered the question posed in the original post regarding my personal investments, and I quoted a model that I think some people would find interesting.

Best of luck in the market to all.
 

2531usmc

WKR
Joined
Apr 5, 2021
Messages
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Not here to argue folks. I answered the question posed in the original post regarding my personal investments, and I quoted a model that I think some people would find interesting.

Best of luck in the market to all.
Like you, I found the Swensen Model interesting and I’m glad you posted it. Given the analytical expertise they have access to they have allocated 30% to downside risk. Roughly speaking, they have a 70/30 portfolio. As a non financial professional, I would say it’s a balanced or conservative portfolio. Over the up and down cycles it provides steady growth and protects their original investment. As someone mentioned, they have not forgotten the lessons of 2008.

I would also suspect that those who solely focus on the VGTs of the investing world never learned the lessons of 2008. Yeah, lots of reasons why tech is the future and those stocks will always beat the S&P so pour your money into it. That’s exactly what they said about Cisco, Intel, Wang (remember them?), Netscape, etc.

Warren Buffett just sold half of his Apple holdings. Is he calling the top in tech? And his primary (advertised) strategy is to buy great companies (wide moat) and hold on forever.
 

Crghss

Lil-Rokslider
Joined
Jun 1, 2018
Messages
285
Location
Jupiter, Florida
Like you, I found the Swensen Model interesting and I’m glad you posted it. Given the analytical expertise they have access to they have allocated 30% to downside risk. Roughly speaking, they have a 70/30 portfolio. As a non financial professional, I would say it’s a balanced or conservative portfolio. Over the up and down cycles it provides steady growth and protects their original investment. As someone mentioned, they have not forgotten the lessons of 2008.

I would also suspect that those who solely focus on the VGTs of the investing world never learned the lessons of 2008. Yeah, lots of reasons why tech is the future and those stocks will always beat the S&P so pour your money into it. That’s exactly what they said about Cisco, Intel, Wang (remember them?), Netscape, etc.

Warren Buffett just sold half of his Apple holdings. Is he calling the top in tech? And his primary (advertised) strategy is to buy great companies (wide moat) and hold on forever.
Not sure what you mean by lessons of 2008. But that was a self induced housing crisis. It created a buying opportunity for stock.

When I started investing over 30 years ago I followed Swenson model. Then watched as Treasuries and international investment did nothing. Thankfully I got out of that crap. One reason bonds did so terrible is the very low interest rates, this lasted close to 20 years. Now that rates are up some of those investments may be viable.

My point there is no fire and forget strategy. You need to look at what is happening in the world. The Swensen model was developed over 40 years ago. Pre internet, smartphone, AI etc. etc. Amazon, Tesla and Nvidia didn’t exist as companies. Think Swensen wouldn't adjust his approach if he was alive today?
 
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9.1

WKR
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May 27, 2021
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I've decided the percentage of my investments that I place in stocks will be equal to 146 - 1.84 x (my age) + 0.00417 x (my age)^2. The actual split, however, seems less important than just picking something and maintaining it by re-balancing periodically. It's a simple way to buy low/sell high without having to know anything about the market.
 
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