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Where to invest my money?

Discussion in 'Anesthesiology' started by castafari, Sep 4, 2017.

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  1. 68PGunner

    68PGunner 5+ Year Member

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    Short term prices are created by emotion and momentum. Long term prices are created by actual fundamentals. The rest of the world doesn't value stocks based on actual fundamentals. That's very obvious. If not, value investors wouldn't make money in the end. Let's revisit this thread in 2-3 years.

    I made a similar call about Chevron 2 years ago when it was at $67-70 on sdn: Fidelity
     
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  3. urge

    urge 10+ Year Member

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    You make money when the majority of people are pricing a stock wrong. He is banking on earnings per share of 15 like it was before. In that case a $300 price is pretty good. If he is right he will double his money or more. If he is wrong he will loose half his money, or less since the stock has already taken the hit. The math works out in his favor in the long run.
     
  4. pgg

    pgg Laugh at me, will they? SDN Moderator 10+ Year Member

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    This is how traders and gamblers "make money" ... in a high risk fashion.

    Market returns are there for the taking. It's totally possible (and easy ... and IMO wise) to make money simply by taking market returns. You don't have to pick anything. It's not a zero sum game. There doesn't have to be a loser for there to be winners. By picking individual stocks and making them a large part of your portfolio you're dramatically increasing your odds of losing.

    Increase your expected return (and risk) by choosing a higher % equity vs fixed income assets. Then go take a nap or drink a beer.
     
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  5. sevoflurane

    sevoflurane Ride 10+ Year Member

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    Yup.

    Nothing wrong with play money... so long as it is exactly that... play money.
     
  6. sevoflurane

    sevoflurane Ride 10+ Year Member

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    Bought Transocean a long time ago... had a great run up to $40 something...
    Now it's worth $8 and change. Play money.

    Bought CRUS when it was $8. This year it hit $71 and then got hit hard to $55. Play money.

    Bought 35k worth of Admiral shares total stock market back in 2008. Kicked some serious ass without even looking at it. Retirement money and not play money. Outperformed nearly everything I own.
     
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  7. sevoflurane

    sevoflurane Ride 10+ Year Member

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    A better question for this thread would be what is your current age, what is your retirement age and what is your current asset alocation... not what is your favorite stock... unless we are talking play money.
     
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  8. urge

    urge 10+ Year Member

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    What's the ticker for Admiral? I'm not sure I'm looking at the proper one.
     
  9. sevoflurane

    sevoflurane Ride 10+ Year Member

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    Lower operating cost for investing 10k or more (i think it's 10K... don't remember).
     
  10. okayplayer

    okayplayer Senior Member 10+ Year Member

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    Age 33. 2 physician household. Retirement age 52-53 (whenever last child leaves house).

    70% VTSAX
    10% RERGX
    10% DFCEX
    10% VGSLX

    I have a long time horizon, high risk tolerance and a lot of stable income between my wife and I - hence 100% equities.
     
    Last edited: Sep 11, 2017
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  11. urge

    urge 10+ Year Member

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    Meant the ticker symbol.

    Is it vtsmx?
     
  12. WisNeuro

    WisNeuro Board Certified Neuropsychologist 7+ Year Member

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    VTSAX is the admiral version of VTSMX
     
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  13. dmk5n

    dmk5n 2+ Year Member

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    Pure Cojones
     
  14. Psai

    Psai Account on Hold 2+ Year Member

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    Is it really? I am also 100% equities
     
  15. dmk5n

    dmk5n 2+ Year Member

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    Not judging...admiration rather than admonishment. I can only sleep soundly at 70/30. I wish I could be at 100% equities...
     
  16. Shimmy8

    Shimmy8 ASA Member 5+ Year Member

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    I'm a new attending and at 90/10.

    65 total stock market
    25 total international
    10 total US bond

    Lot of debt to pay off, but current goal/planning I'll be able to make my 18k/year contribution, $3400 HSA, and pay off loans within 5 years. 3.5 if I really bust ass and pick up extra. Employer also kicks in 32k/year so if I have to cut down my own contribution shouldn't be an issue.
     
  17. btbam

    btbam 5+ Year Member

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    100% equities at 33 is not pure cojones, 100% at 65 is.
     
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  18. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    It's not bad. I would have more exposure to small/mid cap domestic as well as foreign equities. There is more "growth" potential in the small cap foreign equities as well as the emerging markets.
     
  19. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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  20. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    I typically hold a balanced portfolio with a tilt to foreign/emerging market equities. My allocations are more complex than a typical portfolio as I hold multiple fund managers for foreign equity, emerging market bonds, foreign bonds,etc. They have outperformed their indices as a group. Domestic equities are primarily ETFs as I do not believe out-performance is likely from active management over a long period of time.

    [​IMG]
     
  21. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    I hold exposure to Foreign mid/small cap sector as well in my portfolio along with developed international and emerging markets.

    [​IMG]
     
  22. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    The Bottom Line
    Asset allocation is a fundamental investing principle because it helps investors maximize profits while minimizing risk. The different asset allocation strategies described above cover a wide range of investment styles, accommodating varying risk tolerance, time frames and goals.

    Once you've chosen an appropriate asset allocation strategy, remember to conduct periodic reviews of your portfolio to ensure you're maintaining your intended allocation and are still on track to your long-term investment goals.



    Read more: Achieving Optimal Asset Allocation Achieving Optimal Asset Allocation
    Follow us: Investopedia on Facebook
     
  23. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    One study suggests that more than 91.5% of a portfolio’s return is attributable to its mix of asset classes. In this study, individual stock selection and market timing accounted for less than 7% of a diversified portfolio’s return.

    A widely cited study of pension plan managers said that 91.5% of the difference between one portfolio’s performance and another’s are explained by asset allocation.

    https://blogs.cfainstitute.org/investor/2012/02/16/setting-the-record-straight-on-asset-allocation/

    I would add a low cost, tax-efficient, diversified portfolio offers one the best chance to achieve realistic financial goals over the long run.

    Asset Allocation Calculator | SmartAsset.com
     
    Last edited: Sep 12, 2017
  24. dr doze

    dr doze To be able to forget means to sanity Lifetime Donor Classifieds Approved 10+ Year Member

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    60/40 stock bond. age 56. All passive - Not necessarily cap weighted. Uncertain when I will retire.

    DFA, Vanguard, iShares, Research affiliates strategies.

    small cap 4.8%
    small value 7.5%
    Large 5.4%
    Large Value 7.8%
    Int small cap 4.5%
    Int small cap value 5.4%
    Int Large cap 4.5%
    Int Large Value 5.4%
    REIT 5%
    Int REIT 5%
    Emerging markets 4.2%
    Bonds/cash 40% All very high quality. CDs, Treasurys, TIPs, I Bonds, EE Bonds. Vanguard muni bond funds. Zero junk or foreign or emerging market bonds.
     
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  25. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    Doze has that "tilt" towards Foreign/Emerging equities discussed in this thread. Even though Doze is a truly informed investor I've done well with my Foreign Bond Funds.
    https://money.usnews.com/funds/mutu...y-series-emerg-mkts-debt-fd/fedcx/performance

    PFORX - PIMCO Foreign Bond (U.S. Dollar-Hedged) Fund Institutional Class Mutual Fund Quote - CNNMoney.com

    I hold these funds in my retirement portfolio so tax efficiency isn't an issue. I also chose active management for many of my foreign investments as I believe they added value.
     
    Last edited: Sep 12, 2017
  26. facted

    facted ASA Member 7+ Year Member

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    This is pretty conservative on the front end (20% bonds at 35!?!?!), but horribly agressive on the back-end. You'd be ok with 50% in stocks at retirement?! That's pretty much why a lot of the older guys in anesthesia (at least that I know) are still working...that 2008 drop hit them like a ton of bricks as they were getting close to getting out. At that point, you need to be almost out of stocks (10-20%) and more into fixed income.
     
  27. dr doze

    dr doze To be able to forget means to sanity Lifetime Donor Classifieds Approved 10+ Year Member

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    The Center of Gravity for Retirees | Portfolio Solutions

    This respected financial writer recommends a 30/70 allocation for the retiree as a reasonable starting point.
     
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  28. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    My plan is for 30-40% equities until the day I die. 40% if stocks are undervalued like 2009 or 30% if fully valued like today.

    "I propose the center of gravity for those who have accumulated enough for retirement to be 30% stocks and 70% bonds. This is a conservative mix that has enough equity to growth with inflation and enough fixed income to keep portfolio volatility at bay. Historically, a 30/70 allocation has earned the highest Sharpe ratio. This is the point on the efficient frontier that has earned the best risk-adjusted return"

    • Figure 2: Efficient Frontier, 5-year Treasury notes and US stocks, 1926-2013, rebalanced annually
      [​IMG]
     
  29. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    I do think the chart is conservative at the front end. age 35-40, where I would want a 90/10 allocation. That said, I could see 80/20 at these market valuations.

    At age 45 maybe scale back to 75/25 and again at age 50-55 to 60/40. At age 60 I would likely be no more than 50/50 but that's just me. After age 60 it just depends on one's "nest egg" vs "risk tolerance" whether the allocation remains at 50% or gets scaled back over time. With a life expectancy of 8o or so some people will need exposure to equities in the 40% range to avoid running out of money.
     
  30. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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  31. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    [​IMG]
     
  32. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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  33. dmk5n

    dmk5n 2+ Year Member

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    Blade,
    I can't find this chart in Boglehead books,
    Looks more aggressive than from Bogle's "Guide to Investing" e.g. Age in Bonds
    Is this from the Boglehead's forum? Thanks



    upload_2017-9-13_6-8-11.png
     

    Attached Files:

  34. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    The chart I posted was from the Boglehead's forum. It is more agressive than the Bogle recommendation:


    John C. Bogle elaborates his position, in the 2010 edition of Common Sense on Mutual Funds, pp.87-88:
    "Long before the crash, I had fine-tuned my rule-of-thumb asset allocation model, centered at 50/50 for older investors in the distributions phase of their investment plan. Rather, I recommended -- as a crude starting point -- that an investor's bond position should be equal to his or her age. An investor age 65, then, would consider the propriety of a 65/35 bond/stock allocation. Clearly, such a rule must be adjusted to reflect an investor's objectives, risk tolerance, and overall financial position. (For example, pension and Social Security payments would be considered bondlike investments.) But the point is that as we age, we usually have (1) more wealth to protect, (2) less time to recoup severe losses, (3) greater need for income, and (4) perhaps an increased nervousness as markets jump around. All four of these factors suggest more bonds as we age

    The enemy of a good plan is the dream of a perfect plan." -- John Bogle



    Portfolio allocation models
     
    Last edited: Sep 13, 2017
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  35. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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  36. sethco

    sethco Senior Member 10+ Year Member

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    Blade,

    As I get older and move towards financial independence (I.e. Maybe Early retirement), I don't think my asset allocation will drop below 70% stock, even after I stop working. If you look at the Trinity study, the 75/25 mix has better chances of lasting long term than the 50/50 mix at a higher withdraw rate

    Trinity study - Wikipedia

    Just a little food for thought for those that don't believe in the aggressive asset allocation, especially if you want a 5% or higher withdraw rate.
     
    Last edited: Sep 13, 2017
  37. dr doze

    dr doze To be able to forget means to sanity Lifetime Donor Classifieds Approved 10+ Year Member

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    The problem with that strategy is a bad draw of returns early in retirement with a stock heavy portfolio is not recoverable except by returning to work or by lowering future withdrawals. See Pascal's Wager.
    Pascal's Wager and the Making of Prudent Decisions

    Put another way, "do you feel lucky?"
     
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  38. sethco

    sethco Senior Member 10+ Year Member

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    Completely agree. Sequence of returns can be scary. The key is having the flexibility to lower your withdraw rates during down years. If your assuming a 30+ year retirement, you have to realize that the market will have corrections and downturns. However, in long term, it goes up quite consistently. If you notice the Trinity study figure, a lower stock ratio actually has a higher success rate in the short term for those planning a shorter retirement
     
  39. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    Doze, we agree here. My plan is a 2.5% withdrawal rate so I'll keep my equity position less than 50% and likely under 40% as I get into my early 70's.
     
  40. dr doze

    dr doze To be able to forget means to sanity Lifetime Donor Classifieds Approved 10+ Year Member

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    Lots easier said than done. Wouldn't it be more prudent and predictable to lower equity allocation? Or set up your required living expenses in a 30 year TIPs ladder or long term annuity(s) with an insurance company(s) and invest money above that level in stocks for luxuries (or heirs)? Seems a lot less uncertain.
     
  41. Shimmy8

    Shimmy8 ASA Member 5+ Year Member

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    Thoughts from doze and blade on Fidelity 500 Index fund vs Extended Market? I can be pretty aggressive just trying to keep 3-4 fund plan.
     
  42. dr doze

    dr doze To be able to forget means to sanity Lifetime Donor Classifieds Approved 10+ Year Member

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    Why not a total stock market fund or ETF?
     
  43. Shimmy8

    Shimmy8 ASA Member 5+ Year Member

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    TSM wasn't available.
     
  44. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    You will need to combine the Vanguard S and P 500 fund with the Extended Market Fund to cover 99%+ of the total stock market. Are you also going with a Vanguard Fund for international exposure? Emerging markets?
     
  45. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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  46. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    So, I would add REITS (maybe 5-6%). I would also think about adding International Small/Mid Caps like DLS to get you more of an international tilt (maybe 5%).

    [​IMG]
     
  47. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    This is a good portfolio; it's simple. You could cut the bonds back to 10% because of your age and risk tolerance.

    [​IMG]
     
  48. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    Another good portfolio for Equities and Reits:

    [​IMG]
     
  49. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    I own one of the Vanguard Funds (ETF version). Since I own VWO and other emerging market funds I chose the one with less exposure to emerging markets. But, someone without another Emerging markets fund should choose the one with greater exposure to emerging markets.

    [​IMG]
     
  50. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    The portfolio below is a good one. You could include REITS (domestic and international) by reducing the Bond Fund exposure to 10%. Maybe skip the long term bond fund in favor of an intermediate bond fund (5%) and a short term bond fund (5%) but if you think the 10 year yield on US debt isn't going any higher then the long term bond may be a better investment for you.

    Vanguard S&P 500 ETF (NYSEARCA:VOO) or Vanguard Admiral Shares (MUTF:VFIAX) - This Vanguard 500 Index Fund buys the 500 stocks selected by S&P to represent the U.S. large cap stock universe. It has the advantage of being an index that is recognized and purchased around the world. A limited number of stocks with growing global demand and an incredibly low 0.05% expense ratio make this Vanguard S&P 500 index fund a good core holding for your portfolio.

    Vanguard Extended Markets ETF (NYSEARCA:VXF) or Vanguard Admiral Shares (MUTF:VEXAX) - This fund contains all of the U.S. common stocks regularly traded on the New York Stock Exchange and the Nasdaq over-the-counter market, except those stocks included in the S&P 500 Index. This fund fills in the blanks that are missing from the S&P 500 Index. It holds a total of 3,078 US stocks, mostly mid and small caps, which gives you fantastic coverage of the U.S. stock market.

    Vanguard Total International Stock ETF (NASDAQ:VXUS) or Vanguard Admiral Shares (MUTF:VTIAX) - This fund tracks the market-cap weighted FTSE Global All Cap ex US Index, which covers 99% of the world's global market capitalization outside the US. The ETF holds 5,512 stocks from 46 developed and emerging markets.

    Vanguard FTSE Emerging Markets ETF (NYSEARCA:VWO) or Vanguard Admiral Shares (MUTF:VEMAX) - This fund offers investors a low-cost way to gain equity exposure to emerging markets. The fund invests in stocks of companies located in emerging markets around the world, such as Brazil, Russia, India, Taiwan, and China. The Vanguard Total International Stock fund listed above already includes these same Emerging Markets stocks but because it is market-cap weighted they do not have nearly as much influence as the larger companies in the fund. Due to the high volatility, I only add this Emerging Markets fund to my higher risk portfolios.

    Vanguard Long Term Bond ETF (NYSEARCA:BLV) or Vanguard Investor Shares (MUTF:VBLTX) - This Vanguard bond fund tracks the Barclays U.S. Long Government/Credit Float Adjusted Index. This Index includes all publicly issued medium and larger issues of U.S. government, investment-grade corporate, and investment-grade international dollar denominated bonds that have maturities of greater than 10 years. This ETF uses a sampling method to replicate this index and currently holds 1,658 bonds.


    Incredible diversification - Just five Vanguard investments and you will own 9,090 stocks and 1,658 bonds. This is a total of 10,748 holdings that you can buy for the cost of five Vanguard ETFs or Vanguard Index Funds, which are free to purchase if you use a Vanguard Brokerage account.


    Vanguard ETF Portfolio For The Growth Investor | Seeking Alpha
     
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  51. BLADEMDA

    BLADEMDA ASA Member 10+ Year Member

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    The graph below shows the merits of diversification. The 5 Vanguard funds (or 5 ETF versions) clearly has out-performance vs the S and P 500.

    [​IMG]
     

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