(The) Boring Investor

I will be starting to create another blog to share my journey about Entrepreneurship and I am thinking to have the title ” Negosyo Ni Juan” though, I am not sure yet if it is still available. You’ve got to start thinking in those terms. If you don’t have enough assets to invest in both, however, I’d most definitely start with the Total Bond Market fund. One might argue that the Total Bond Market (VBMFX) is enough diversification, but I personally believe TIPS (VIPSX) are also an important component of one’s portfolio. If somebody’s bond portfolio was 50% Vanguard Intermediate-Term Treasury Fund (VFITX) and 50% Vanguard Inflation Protected Securities (VIPSX), I’d give that the go ahead most likely depending on their personal circumstances. Vanguard LifeStrategy Growth (VASGX) is the most aggressive fund, currently allocating 81% to stocks and 12% to bonds, while Vanguard LifeStrategy Income (VASIX) is the most conservative fund, allocating 22% to stocks and 65% to bonds.

Do some retail investors really NEED stock dividends as INCOME? Further complicating this matter is the fact that REITS are incredible tax-inefficient and pay out 90% of their income in the form of dividends taxed at the normal income rate (i.e. not the 15% long-term capital gains tax rate). As your dividends grow, the no. of months you need to work will correspondingly reduce, keeping all other things constant. I think people need less money than they think they do, even though a lot of people are going through hard times right now. Why would you want a 20% stock/10% bond/70% cash allocation for a quarter of the year (assuming you’re DCA four times over the course of a year)? Others say a 50/50 allocation makes more sense. For argument’s sake, let’s say you chose to dedicate 10% of your portfolio to REITs. 100 and still devote some of your money to REITs. Consider a statistical break down of where your money was “invested” here in the US.

Since bonds are inefficient from a tax perspective, it does not make sense to hold a fund heavily invested in bonds in a taxable account. This is certainly not a set number for everybody and you should take your own personal circumstances into account, but it is a starting point at which I think diversifying with REITs will truly make a significant impact. In that case, though, transaction costs would be prohibitively expense and ETFs make little sense for small purchases. ETFs can be shorted, however. Cryptocurrency trading can lead to large and immediate financial losses. Behavioural finance relies on good evidence about how large numbers of people behave under well-defined circumstances. Unfortunately, financial intelligence is not taught in schools because such a large portion of the population, including teachers and politicians do not have a very high financial IQ. Another argument for LS investing is that if you have set up an asset allocation plan of stocks/bonds that matches your risk profile and time horizon, why not follow it immediately?

Many people encourage 2/3 of the bond allocation going towards Total Bond, while the remaining 1/3 goes to TIPS. Here are a few factors that you need to remember while purchasing one. Two economic stats were released yesterday: weekly jobless claims were much lower than anticipated while pending home sales were discouraging. It was cheap and simple and easy to build and Americans flocked to it because it had a lower price. In late 2009, insiders offered to take the company for private and shareholders accepted it at a really low price. The most common cause of low prices is pessimism – sometimes pervasive, sometimes specific to a company or industry. With a small amount of assets, I would recommend diversified REIT index funds as opposed to a single company. Thus, if you have no tax-advantaged accounts at all and a small amount of assets, I personally don’t think the increased diversification is significant enough to overcome the tax burden and would just increase my allocation devoted to equities. A: I encourage the purchasing and allocation of funds to both.