BreadWithSpam[at]fractious.net wrote:
- quote -

I've captured quite a bit of that recently.
-- Doug

"ps56k" <pschuman_no_spam_me[at]interserv.com> writes:

- quote -

Ya - a couple of differences. Even if you go 60/40 same as
the balanced fund, you can do something the balanced fund
doesn't - rebalance with longer periods. That lets you capture a
little more of the buy-high-sell-low. You can also manage
your tax effects better - if it's a taxable account, for
example, you could use muni bonds instead of the Agg.

However, by going with an index-fund based portfolio where
you build it out of various single-asset-class funds, you
can overweight or underweight certain asset classes, take
advantage or putting some of them into IRAs and others in
taxable accounts, and get broader exposure (ie. the global
markets) if you like, too. Moreover, there may be reason
to look at other kinds of fixed income besides just the
Agg even in IRAs. A nice chunk of TIPS might be a very
good thing, for example.


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"Douglas Johnson" <post[at]classtech.com> wrote in message
news:q7hcv4tnffafgr2sf0nusargkb19rm0c5e[at]4ax.com...
- quote -

any difference between putting $ into the separate VBMFX & VTSMX
vs just the single VBINX ?

or - I guess, the single VBINX vs the 3 or 6 "lazy portfolio" funds.

"ps56k" <pschuman_no_spam_me[at]interserv.com> writes:
- quote -

VBINX is a 60/40 blend of a total stock market index (the
MSCI US Broad Index which represents 99.5% of the total
market capitalization of all the US common stocks regularly
traded on the NYSE, AMEX and Nasdaq - ie. a much broader
index than the S&P 500, and includes mid and small caps),
and a total investment-grade bond index (the Lehman Agg,
which includes treasuries, agencies and investment-grade
corporates).


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"HW "Skip" Weldon" <skip5700removethis[at]yahoo.com> wrote in message
news:2khcv459bohj9efdpurcm4pgp1vnhh5p4e[at]4ax.com...
- quote -

which I guess you can use for comparisons,
but certainly not a growth indicator..

On 2009-04-28, honda.lioness[at]gmail.com <honda.lioness[at]gmail.com> wrote:
- quote -

This was March of this year, when fear and doom was the prevalent
emotion of the day.

Under those circumstances, I decided that junk bonds were finally
priced sufficiently attractively. (yields and discounts, also looked good
on paper).

That was the basis of my decision.

I would never accept any asset allocation advice or calculator, that
would not have current asset prices as the cornerstone of making
allocation decisions. Example of such advice that I would never
accept, would be "stock allocation should be 100-your age percents". I
feel perfectly fine not owning any stocks, if they are not priced at a
level where earnings yield compensates the risk of owning them.

i

On 2009-04-28, Douglas Johnson <post[at]classtech.com> wrote:
- quote -

Maybe he will invest when prices of those assets become expensive
again?

As Warren Buffett said, you pay a high price for a cheery consensus.

i

On Apr 28, 10:14*am, Douglas Johnson <p...[at]classtech.com> wrote:

- quote -

Mostly in cash, small GLD position.

- quote -

When I see that the government has stopped giving taxpayer
money and granting more power to people to who us into
this mess. In other words, not any time soon.

Anoop

anoop <ghanwani[at]gmail.com> wrote:

- quote -

So where are you investing in the meantime? How will you know trust has
returned?

Thanks,
Doug

anoop <ghanw...[at]gmail.com> wrote:
- quote -

ISTM non-financials woes reflect the lower demand of this somewhat
sunk economy. This is reasonable. I do not see the duplicity in non-
financials and do not think it is fair to lump them with financials
when it comes to pointing a finger at who was untrustworthy, dishonest
or inept.


So I cannot buy their stock,
- quote -

Igor Chudov <ichu...[at]algebra.com> wrote:
- quote -

You are piggybacking onto a discussion of Scott Burns's couch potato
portfolio, which proposes a large allocation to a bond fund. To be
clear, the bond fund Burns means is investment grade; no junk. Online
portfolio allocation tools also typically mean non-junk bonds.

On Mon, 27 Apr 2009 18:31:32 -0500, BreadWithSpam[at]fractious.net wrote:

- quote -

I could live with this.


-HW "Skip" Weldon
Columbia, SC

On Apr 27, 4:31*pm, BreadWithS...[at]fractious.net wrote:

[..]

- quote -

[..]

All this is good except that the element of trust is now
missing from the system. Would you buy a car from a company
you did not trust? If not, why is it any different for financial
products?

Today, I cannot trust the balance sheets of most companies
(especially the financial ones). So I cannot buy their stock,
and I cannot buy an index fund that has their stock as a part
of that index.

Maybe trust will return someday...

Anoop

I personally put $18k into Vanguard junk bond fund (high yield
corporate) this March. I have never invested into junk bonds
before.

i

BreadWithSpam[at]fractious.net wrote:

- quote -

The Original, Patented Scott Burns Couch Potato Portfolio is exactly 50/50 VBMFX
and VTSMX. See http://assetbuilder.com/couch_potato..._cookbook.aspx

- quote -

Yep.

-- Doug

anoop <ghanwani[at]gmail.com> writes:
- quote -

Maybe the /conservative/ couch potato portfolio. The traditional
one is probably more like 60/40.

For a minute there, I started to think of the "second graders's
portfolio" over at Lazy Portfolios, but that one has three funds
and only 10% in bonds:

<http://www.marketwatch.com/lazyportfolio
Some very instructive reading there, btw, though I do wish
that they'd be a little more apples-to-apples -- the various
portfolios cover a wide range of asset allocations and they
always compare to the S&P500, rather than a broader index or
an appropriately balanced index.

I believe that if most people just put their money into exactly
that - 60/40 total stock/total bond - and rebalanced regularly -
they'd beat most active investors (who seem intent to buy high
and sell low) and have lower volatility than most funds.

Come to think of it, that's almost* precisely what the
Vanguard Balanced Index does: 60/40 total stock/total bond.
[*] - note that VBINX is continuously rebalanced, so its
performance will be very slightly different from a portfolio
made up of the two indices and rebalanced periodically.

VBINX has a trailing 3-yr std. dev of 11.51 vs. 18 or so for
the total stock market, a loss of only 22% last year vs. 37%
for the total stock market, and a trailing 10 yr annualized
return which is actually positive (1.25%) vs. the total stock
market's negative (-2.13%). Over the nearly 13 year life of
that balanced fund, the annualized total return's been about
5.25%. Versus just under 4% for the total stock market over
that same exact period.

Call it "couch potato" or "no-brainer" or whatever you like,
but I think that a 60/40 index portfolio is sheer genius.

That all said, I think Skip's idea for an inexpensive
education in investing is a good one. My prescription would
probably be more like: create emergency fund; buy VBINX;
read some books and try to resist the urge to screw with
VBINX until you are damned well sure you know what you're
doing and why. We periodically have a roundup of book
suggestions here and it may be time for another one soon.

I saw an interesting piece today in the weekend's WSJ,
by Jason Zweig. It was about group decisions and bad
decisions, but it was mainly advice about the missteps
of investment committees. At the end, he included the
following note:

Define the default position. Max Bazerman, an expert
on decision-making at Harvard Business School, suggests
that investors start with the assumption that the ideal
portfolio is a diversified basket of low-cost index
funds. Any deviation from that strategy should require
extraordinarily compelling evidence.

I like that.


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On Apr 24, 10:04*am, "HW \"Skip\" Weldon"
<skip5700removet...[at]yahoo.com> wrote:

- quote -

That would be the couch potato portfolio. :-)

Anoop

On Thu, 23 Apr 2009 04:07:34 -0500, nonsense[at]mynonsense.net wrote:


- quote -

Here's another alternative (not what you asked for) idea:

Assuming you are a young investor (under 45), I suggest it may be more
important to learn about investing than to earn another percent or two
in the short-term. If you agree, to proceed:

1. Pay off all debts except mortgage and set aside $10,000 ($5,000 if
single) in a bank savings account as emergency reserve.
2. Read about Vanguard's Total Bond Market Index (VBMFX) and
Vanguard's Total Stock Market Index VTSMX) at www.vanguard.com . Then
send each $10,000.
3. Leave them alone - no rebalancing, nada - for 3 years.
4. Weekly note the changes in each. Send each a few hundred monthly
through ups and downs. Read business news, posts here, etc. to
uncover reasons for the changes in fund values.

After 3 years you'll be a pretty good investor. At least for the
basics you will - the Ph.D. in investing comes after going through a
full economic cycle (usually about 20-30 years.)

It's just an idea. Try it or not.


-HW "Skip" Weldon
Columbia, SC

Gil Faver wrote:
- quote -

Agreed, thought that's what I said. Op asked for higher risk/return Skip
mentioned the next point on that curve but in other direction. No big deal.

"JoeTaxpayer" <JoeTaxpayer[at]comcast.net> wrote in message
news:gsprqu$m1m$1[at]news.motzarella.org...
- quote -


he was asking for higher return, albeit with greater risk. It was already
stated T-bills pay very little. Now he was directed to T-bills, for a lower
return and lesser risk. Not where he wanted to go.