ok, now that i've cleared some specific (read: nitty?) replies, let me take a step back.

- i agree with almost everything else in the last twenty-ish posts. market timing is dumb and doesn't work, there's no free lunch in fixed income and portions are lean right now, high variance games like stock picking + the schadenfreude of human cognitive biases = tragic results in the long run (unless you're a stock salesman). good posts by brian, mickey, unfrgvn, jb.

- being well-diversified means that *something* in your portfolio is going to be "underperforming" all the time. you don't hold bonds for the times when the stock market is returning 25%. it's impossible to know when we're in one of those years where it's returning -25% instead, so we just hold bonds all the time.[1]

- meanwhile, i've been reading "omg bonds!!1" posts on bogleheads for two years now and the sky still hasn't fallen. i made a plan based on the long term and i'm sticking to it while ignoring the noise.

- that said, bonds definitely have risk! let me say that louder: BONDS DEFINITELY HAVE RISK! this is why i recommend that folks keep short-term needs not in bonds, but in "no-risk" vehicles like high-yield savings, CDs, and I Bonds.[2]



[1] from s1 of _the west wing_:

we're all charlie sometimes.

[2] yes I Bonds have "bond" right there in the name, but they have different mechanics concerning interest rate risk.

He did the calculations using a duration of 5.5 years. That would approximate IEI (or AGG if we are willing to take on credit risk). Currently yielding 0.71% (or 2.2%).

What he indirectly demonstrated was that you could wait up to 6 years with your money under the mattress for yields to get to 5% and be almost exactly even with the person who started with yields at 2% (or 4 years for yields to go from 3% to 5%).

That being said, bonds are important to protect against deflation and there is no guaranty that rates are going to rise (just that they can't drop too far from here). There is an article on it in here that you will enjoy: https://publications.credit-suisse.c...555B7A27900DAC

or vmbfx (duration 5.45 years, sec yield 2.11%)
or fsitx (duration 5.15, sec yield 2.12%)

market timing works great when you know it's going to reach x% in Y years, sure. for the rest of us, there is diversification.

**This became longer than I expected, but thanks for reading.**

I probably asked this before, but I've been thinking about it and would like to get it out there again.

Right now I have these accounts:

[1] - Fidelity Roth IRA (fully funded for 2013 and will be fully funded for 2014).
[2] - American Fund Mutual Funds - Holds 6 funds of multiple types.
[3] - A second Retirement Account that was optional through my employer, but is third-party managed.
[4] - Employee Pension that I contribute 5% every paycheck and I believe is matched.
[5] - 2 bank (checking) accounts that both have separate savings accounts linked to them.

So here is the deal:

[*] I have had my Roth IRA since 2004, but haven't always funded it every year. 2013 was pretty good to me, but I'm not sure what my return was. I currently have quite a bit sitting in cash because I don't know what to do with it -- and will have more once I fund 2014.

[*] The American Funds came through my mom's workplace, which gave me free access to a financial adviser. The adviser has since left and it has flipped about 3 times to different advisers, but I haven't contributed anything new since I opened it. I got it because it was a convenient place to put money that I had laying around.

The funds I currently hold are:

- American Balanced Fund (ABALX)
- American High-Income Trust (AHITX)
- Capital World Growth and Income Fund (CWGIX)
- Europacific Growth Fund (AEPGX)
- The Growth Fund of America (AGTHX)
- New World Fund (NEWFX)

[*] The savings accounts hold a lot of cash that is only gaining about .25% interest at the most.

[*] My real issue is the secondary Retirement Account. I started the account by automatically putting in 10% of my paychecks (I like to always pay myself first). It also comes out before taxes, which effectively lowers my income taxes each paycheck. As of right now it is showing an 18.4% return for the year (opened in March).

10% is a good chunk of money that is getting locked in. It's doing 'well', but do I really want to leave it locked up in there? I'm not even sure if I can get it out any time, but if I can, I'm sure there is a major penalty. I can reduce the contribution amount at any time.

I really enjoy managing my own money so I 1. want to put my cash to use, and 2. want to make sure I'm maximizing my returns optimally.

I was thinking that I should probably start transitioning my Roth IRA to a more defensive, income producing account with dividends or ETFs. I'm considering using a mid-sized portion of my cash and putting it into either a Target Retirement Fund or Total Stock Market Fund to get started. Which is the better option? I can't say as of right now how I did in comparison to the entire market this year. I should get a statement from Fidelity showing my beginning and ending account balances.

I'm also considering opening a second investing account that I can manage myself since I really do enjoy managing my own money. I can buy individual businesses in that account once and if I find companies I want to buy. It'll open me up to taxes, but I also get the benefit of write-offs if I take losses.

Half of my brain is telling me to learn about buying bonds and options and to learn more about the financial markets in ways I've never really explored before, but that would come with the expectation that I would be opening up to a lot more risk.

As a musician, its hard for me to not take timing into consideration.

In life, to me, timing is everything.

We are talking about long holding periods. Chance of you losing 50% over ten years is pretty darn small.

Volatility is not risk. Except for that this sort of volatility:

And this sort of thinking:

Leads to people chasing returns in stocks or chasing yield in bonds. That is the only real risk of volatility over long periods - it makes people do exactly the opposite of what they should do. Not many people are capable of putting 20% more in equities because equities have dropped by 10%.

Depending on time frame, that isn't terrifying at all (if they have nerves of steel).

Agreed. (He isn't looking to put his emergency fund money in something. This is brokerage account money.)

Both broadly equivalent. I just happen to like ETFs and the ones I mentioned can be bought commission free on TD Ameritrade.

You wouldn't change your asset allocation if 10 year treasuries were yielding 10% (or even 6%)? I certainly would. Same as if stocks tank massively next year. A diversified portfolio can include cash holdings with the intent to throw it at assets that have massively underperformed, and taken out of assets that have massively overperformed.

That is awesome!

Thanks for the response.....

I never got bonds simply because me and my wife will both get pensions and I just figured those pensions could kind of replace the safety of bonds and we could risk more in equities because of that. Maybe that's a bad idea but it was my thinking.

That isn't a bad idea. Your portfolio is just multiple streams of future spending power.

I'm bored at work and typing on my phone so I'm going to ask this question here.

I'm a shareholder in BRK-B shares. The 2014 shareholder meeting is on May 3, which luckily I'm off that weekend and would love to go.

How do I go about getting a pass?

I briefly checked airline prices and they are pretty steep at $530 round trip not including hotel or rental car. But it's probably a once in a lifetime opportunity so it's worth it.

some people calculate a pension (or SS) as fixed income in the future so you're not totally off base. i haven't thought about it much since my industry does not provide pensions and i plan on getting $0 from SS.

here's the rub: are those pensions run by a govenment entity? an insurance company? how confident are you that they will exist at retirement time? is the payout inflation-adjusted?

How To Get Your AnnualMeeting Credentials
 You must be a Berkshire Hathaway Shareholder
 Shareholders are entitled to a maximum of 4 meeting credentials
 The 2012 Annual Report will be mailed to shareholders of record and beneficial-butnot-
of-record shareholders beginning in mid-March. Included in the mailing will be
the Proxy Statement. A perforated postcard will be attached to the Proxy Statement.
Fill out and return the postcard to order meeting credentials.

http://www.berkshirehathaway.com/mee...eetinginfo.pdf

The above was for the 2013 meeting, I would expect it would be the same for 2014. I've never been but I think a hotel room will be really hard to come by. I would certainly start checking now.

I feel like a politcian who has a quote taken out of context. Agreed that it was my own fault for not typing a complete thought.

Brian is better at arguing than I am, so I will leave it as is. I will say I am holding bonds and even moving more money into them as my AA dictates. I believe my response was to someone that had a fairly short time frame for the investment.

Federal employee so it's pretty safe

i know very little about investing but have about $15k just sitting in a non-interest bearing account. thinking of putting about $12k of it into some sort of account. i am planning to buy my next home in probably 12-18 months so i would need use of it then. what would be my best option to allow me access to it within that time period?

high-yield savings account is your only meaningful option for this timeframe

ty for the response

So I decided to ask a Rep where my IRA is held to see if they could help me. I was curious because even at Berkshire's site it doesn't say anything about attendance.

The person I talked to said holders of the B class shares don't have voting rights so they aren't eligible to attend.

Is that true? You can only attend if you had the Class A shares? I looked up the distinction on google and a response I found from a third-party source says it doesn't matter. I have held the B shares since 2010, but I have never received an annual report in the mail. It could have been from having online only, but I switched it last year to paper copies.

I can only ever remember one time that I did a proxy vote for another company and was able to do it online.

Voting rights are diluted though the still exist. You are still able to attend with Class B shares. comparison

Hey guys, was looking to invest in some retirement fund in my own country in a local division of AIG (metropolitan).
What i was offered was some sort of fund where they have a monthly tax of 2$ plus 2% of the total value of the account over 9 years, then 0.3% each year after year 9, both debited monthly. This seems pretty high to me or am i wrong? Thanks.
Also the investments are set to a high degree of risk or whatever the term for that is .

Yeah I thought so. I wanted to correct the person because I was pretty sure what they were telling me was wrong, but I tried to just end the conversation and move on.

So, "Both Class A & B shareholders are entitled to attend the Berkshire Hathaway Annual Meeting which is held the first Saturday in May."

I'd like to attend, but with thousands of people flooding Omaha I feel like this is more difficult than I want to think about, even though it's an opportunity I should probably take advantage of.

Sounds really high, IVV has a 0.07% expense ratio while 0.25% is pretty common.

Looking for an answer on this, should be pretty easy to answer for anyone who's investigated. Potentially I could reward someone for private discussion/coaching if this is feasible:

I'd like to implement a dividend capture trading system.
Brief description: Buying an equity before the ex-dividend date, qualifying for the dividend, then selling it afterwards (within a day or two). Rinse and repeat. I'd feel comfotable doing this with a roll of around $75k up to $100k to start.

The main reason why I strongly like this idea is that I'm currently unemployed (seeking family investment/job opportunity right now) and showing no income, outside of brick and mortar poker play which is uN-r3-p0-r-t3d. This would start me out in the lowest income tax bracket for any dividend income.

Is it accurate information that dividends are already priced in and out of the stock price during the window of opportunity to do this, or do other market forces overwhelm this enough where there could be proven positive results? I am aware that I could take the time to research data myself to discover this, but would rather fast track doing this successfully if there is anyone who would know that it works and could help.

Probably a troll but you can't make money doing this

If your dividend strategy worked everyone else would buy and sell those equites a day before you implement your strategy which would make your strategy worthless.

The price of the stock goes down by the dividend amount on the ex-dividend date.