Comments on: How to Invest for Retirement: A Diversified Investment Portfolio http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-invest-for-retirement-a-diversified-investment-portfolio Personal Finance for Life in the Kingdom Sat, 11 Feb 2012 05:19:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Paul Williams http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15579 Paul Williams Mon, 13 Jun 2011 16:37:26 +0000 http://www.providentplan.com/?p=508#comment-15579 Hi, Aaron. I don't think it would be a bad idea to add VFSVX to the portfolio. You could take some portion of the allocation to foreign stocks and allocate it there as well. Personally, I'd like to see a lower expense ratio on the fund. Also, I'm not sure how much it will add in terms of diversification (lowering risk and increasing return). It's hard to tell what it would look like historically due to limited data. But I don't think it would hurt. Hi, Aaron. I don’t think it would be a bad idea to add VFSVX to the portfolio. You could take some portion of the allocation to foreign stocks and allocate it there as well. Personally, I’d like to see a lower expense ratio on the fund. Also, I’m not sure how much it will add in terms of diversification (lowering risk and increasing return). It’s hard to tell what it would look like historically due to limited data. But I don’t think it would hurt.

]]> By: Aaron http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15571 Aaron Thu, 09 Jun 2011 05:17:13 +0000 http://www.providentplan.com/?p=508#comment-15571 Hi Paul, What do you think of adding International Small-Cap stocks to this portfolio? Such as this for example: Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX) Thanks! Hi Paul,

What do you think of adding International Small-Cap stocks to this portfolio? Such as this for example: Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX)

Thanks!

]]> By: Paul Williams http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15516 Paul Williams Tue, 10 May 2011 19:19:23 +0000 http://www.providentplan.com/?p=508#comment-15516 Hi, Paul. Glad you like the tool and portfolio. I checked out the link you mentioned, but I'd need more data from the post you highlighted to know how big of an impact the longer term bonds really had during the recessions. The information the poster included didn't cover the impact so much as his findings of the more efficient portfolio. I would say for anyone who thinks it could be an issue, go ahead and put some in long term bonds. But I wouldn't put my entire bond portion in long term bonds. Personally, I'd split it up in thirds (short/int/long) if I were going to do that. Hi, Paul. Glad you like the tool and portfolio. I checked out the link you mentioned, but I’d need more data from the post you highlighted to know how big of an impact the longer term bonds really had during the recessions. The information the poster included didn’t cover the impact so much as his findings of the more efficient portfolio.

I would say for anyone who thinks it could be an issue, go ahead and put some in long term bonds. But I wouldn’t put my entire bond portion in long term bonds. Personally, I’d split it up in thirds (short/int/long) if I were going to do that.

]]> By: Paul C http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15513 Paul C Mon, 09 May 2011 20:29:28 +0000 http://www.providentplan.com/?p=508#comment-15513 Paul. Great Tool. And great portfolio. My one disagreement is with your bond allocation. With high portfolio equity allocations, Longer-Term Bonds dampen portfolio volatility more then short-term bonds due to negative correlations in recessions. (Reference: http://www.bogleheads.org/forum/viewtopic.php?p=338994&highlight=#338994) Paul.

Great Tool. And great portfolio.

My one disagreement is with your bond allocation. With high portfolio equity allocations, Longer-Term Bonds dampen portfolio volatility more then short-term bonds due to negative correlations in recessions. (Reference: http://www.bogleheads.org/forum/viewtopic.php?p=338994&highlight=#338994)

]]> By: Paul Williams http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15432 Paul Williams Tue, 15 Mar 2011 12:54:45 +0000 http://www.providentplan.com/?p=508#comment-15432 Hi, Mike. With the globalization of companies and the fact that the U.S. only makes up 40% of the total world stock market, I do not think it is unreasonable to have that allocation. If you're uncomfortable with it, then simply weight it more to U.S. stocks. Personally, I think you run more risk by putting more emphasis on one country (even one that's done as well as the U.S.). Hi, Mike. With the globalization of companies and the fact that the U.S. only makes up 40% of the total world stock market, I do not think it is unreasonable to have that allocation. If you’re uncomfortable with it, then simply weight it more to U.S. stocks. Personally, I think you run more risk by putting more emphasis on one country (even one that’s done as well as the U.S.).

]]> By: Mike Morrissey http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15430 Mike Morrissey Tue, 15 Mar 2011 10:58:25 +0000 http://www.providentplan.com/?p=508#comment-15430 I am retired and 64. When I plug in my age I get a 20 30 split with more intl than us stocks. Is this too risky an allocation when I am already in retirement. I am currently a Vanguard acct holder. thanks, Mike I am retired and 64. When I plug in my age I get a 20 30 split with more intl than us stocks. Is this too risky an allocation when I am already in retirement. I am currently a Vanguard acct holder.

thanks,
Mike

]]> By: Paul Williams http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15416 Paul Williams Mon, 07 Mar 2011 17:40:21 +0000 http://www.providentplan.com/?p=508#comment-15416 Hi, BK! Sure I can comment on that. The Vanguard Target Retirement Date funds are actually a great choice for most people - especially if they don't want to deal with managing their own allocation. However, I prefer to do it myself for a few reasons. First, I prefer a different allocation among U.S. and Int'l stocks than what Vanguard uses in their target funds. Second, I also like to tilt my portfolio to the value side of things. Third, there may be reasons that their glide path won't suit a person's particular situation so they'd be better off doing it themselves. And fourth, if your investments are in a taxable account you'll have better options for managing taxes if you use your own allocation. (That last one won't apply to too many people though.) The target date funds are certainly the easiest solution but they're not always the best solution. Honestly, it doesn't take a lot of work to manage your own asset allocation. I'd say less than an hour a year once you know how. Hi, BK! Sure I can comment on that. The Vanguard Target Retirement Date funds are actually a great choice for most people – especially if they don’t want to deal with managing their own allocation. However, I prefer to do it myself for a few reasons. First, I prefer a different allocation among U.S. and Int’l stocks than what Vanguard uses in their target funds. Second, I also like to tilt my portfolio to the value side of things. Third, there may be reasons that their glide path won’t suit a person’s particular situation so they’d be better off doing it themselves. And fourth, if your investments are in a taxable account you’ll have better options for managing taxes if you use your own allocation. (That last one won’t apply to too many people though.)

The target date funds are certainly the easiest solution but they’re not always the best solution. Honestly, it doesn’t take a lot of work to manage your own asset allocation. I’d say less than an hour a year once you know how.

]]> By: BK http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-15413 BK Mon, 07 Mar 2011 06:34:54 +0000 http://www.providentplan.com/?p=508#comment-15413 Hi Paul, Can you please comment about choosing a Vanguard Target Retirement Date fund versus personally managing one's own allocation over time? thanks! Hi Paul,

Can you please comment about choosing a Vanguard Target Retirement Date fund versus personally managing one’s own allocation over time?

thanks!

]]> By: Session 6: Investments « Nicolas Picard's aidha blog http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-11090 Session 6: Investments « Nicolas Picard's aidha blog Mon, 01 Nov 2010 04:54:59 +0000 http://www.providentplan.com/?p=508#comment-11090 [...] 4.http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/ [...] [...] 4.http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/ [...]

]]> By: Money Hacks Carnival – 84th Edition http://www.providentplan.com/508/how-to-invest-for-retirement-a-diversified-investment-portfolio/#comment-3452 Money Hacks Carnival – 84th Edition Wed, 30 Sep 2009 11:46:59 +0000 http://www.providentplan.com/?p=508#comment-3452 [...] Williams presents How to Invest for Retirement: A Diversified Investment Portfolio posted at Provident Planning, saying, “Use this free portfolio allocation calculator to [...] [...] Williams presents How to Invest for Retirement: A Diversified Investment Portfolio posted at Provident Planning, saying, “Use this free portfolio allocation calculator to [...]

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