Asset Allocation Recommendations - Revision history

Dlk: /* Schwab Funds */

2019-12-31T20:35:49Z

Schwab Funds

Dlk: /* Schwab Funds */

2019-12-31T20:35:25Z

Schwab Funds

Dlk at 20:34, 31 December 2019

2019-12-31T20:34:21Z

Dlk at 20:32, 31 December 2019

2019-12-31T20:32:28Z

Dlk: Created page with "## Warren Buffet - 2015 Chairman\'s Letter 2017 letter, pg 11: Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption..."

2019-12-31T20:25:22Z

Created page with "## Warren Buffet - 2015 Chairman\'s Letter **2017 letter, pg 11:** Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption..."

New page

## Warren Buffet - 2015 Chairman\'s Letter

**2017 letter, pg 11:**

Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. “Risk” is the possibility that this objective won’t be attained.

By that standard, purportedly “risk-free” long-term bonds in 2012 were a far riskier investment than a long-term investment in common stocks. At that time, even a 1% annual rate of inflation between 2012 and 2017 would have decreased the purchasing-power of the government bond that Protégé and I sold.

I want to quickly acknowledge that in any upcoming day, week or even year, stocks will be riskier – far riskier – than short-term U.S. bonds. As an investor’s investment horizon lengthens, however, a diversified portfolio of U.S. equities becomes progressively less risky than bonds, assuming that the stocks are purchased at a sensible multiple of earnings relative to then-prevailing interest rates.

It is a terrible mistake for investors with long-term horizons – among them, pension funds, college endowments and savings-minded individuals – to measure their investment “risk” by their portfolio’s ratio of bonds to stocks. Often, high-grade bonds in an investment portfolio increase its risk.

**2013 letter, pg 20:**

90% in S&P 500 index fund (VFIAX)
10% in short-term US Treasury bond fund (VSBSX)

## Schwab Funds

Using Vanguard Recommended Allocation: Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund

Schwab Bond Funds:
Total bond market index mutual fund: SWAGX (.04%)
No international bond funds from Schwab, 3rd parties all have high fees (1% or higher)
TIPS Index mutual fund: SWRSX (.05%)

Schwab stock funds:
S&P 500 Fund: SWPPX (.03%)
Small-Cap Index Fund: SWSSX (.05%)
International Index Fund: SWISX (.06%)

Age 54-58
35.8 Bonds 25.1, 10.7, 0
64.2 Stocks
Age 59-63
44.4 Bonds: 28.6, 12.2, 3.6
55.6 Stocks
Age 64-68
56.3 Bonds: 31.9, 13.6, 10.8
43.7 Stocks

Vanguard Recommendation
Recommendation: Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund
Bond Funds:
Total Bond Market II Index Fund: VBTLX (.05%)
Total International Bond Index Fund: VTABX (.12%)
Short-Term Inflation-Protected Securities Index Fund: VTAPX (.07%)
Stock Funds:
500 Index Fund: VFIAX (04%)
Small Cap Growth: VSGAX (.07%)
Total International: VTIAX (.11%) (Foreign Large Blend, developed and emerging)
Age 54-58
35.8 Bonds 25.1, 10.7, 0
64.2 Stocks
Age 59-63
44.4 Bonds: 28.6, 12.2, 3.6
55.6 Stocks
Age 64-68
56.3 Bonds: 31.9, 13.6, 10.8
43.7 Stocks

Financial Samurai Recommendation
Bond Funds: Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund
Age 50-65
30% Bonds 20, 10, 0
70% Stocks
Age 65-75
40% Bonds: 26, 11, 3
60% Stocks
Age 75+
50% Bonds 26, 17, 7
50% Stocks

Fidelity Retirement Funds Asset Allocation
Bond Funds: Inflation Protected Bond Fund, Total Bond Market Fund, High Yield & Emerging Market Bond Fund
Age 55-59
42% Bonds 15.3%, 22.7%, 3.6%
58% Stocks
$2m: 306K, 454K, 72K - reallocation to Bond funds in IBM 401K account
Age 60-64
54% Bonds 22.3%, 27.4%, 4.2%
46% Stock
Age 65-69
66% Bonds 39.8%, 31.9%, 5.6%
34% Stocks
Age 70+
75% Bonds - 35%, 35%, 5%
25% Stocks

@@ Line 36: / Line 36: @@
 :: 44.4 Bonds: 28.6, 12.2, 3.6
 :: 55.6 Stocks
-Ag: 64-68
+:Age 64-68
 :: 56.3 Bonds: 31.9, 13.6, 10.8
 :: 43.7 Stocks

@@ Line 18: / Line 18: @@
 ===Schwab Funds===
-Using Vanguard Recommended Allocation:  Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund
+: Using Vanguard Recommended Allocation:  Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund
-Schwab Bond Funds:
+: Schwab Bond Funds:
-: Total bond market index mutual fund: SWAGX (.04%)
+:: Total bond market index mutual fund: SWAGX (.04%)
-: No international bond funds from Schwab, 3rd parties all have high fees (1% or higher)
+:: No international bond funds from Schwab, 3rd parties all have high fees (1% or higher)
-: TIPS Index mutual fund: SWRSX (.05%)
+:: TIPS Index mutual fund: SWRSX (.05%)
-Schwab stock funds:
+:Schwab stock funds:
-: S&P 500 Fund: SWPPX (.03%)
+:: S&P 500 Fund: SWPPX (.03%)
-: Small-Cap Index Fund: SWSSX (.05%)
+:: Small-Cap Index Fund: SWSSX (.05%)
-: International Index Fund: SWISX (.06%)
+:: International Index Fund: SWISX (.06%)
-Age 54-58
+:Age 54-58
-: 35.8 Bonds 25.1, 10.7, 0
+:: 35.8 Bonds 25.1, 10.7, 0
-: 64.2 Stocks
+:: 64.2 Stocks
-Age 59-63
+:Age 59-63
-: 44.4 Bonds: 28.6, 12.2, 3.6
+:: 44.4 Bonds: 28.6, 12.2, 3.6
-: 55.6 Stocks
+:: 55.6 Stocks
-Age 64-68
+Ag: 64-68
-: 56.3 Bonds: 31.9, 13.6, 10.8
+:: 56.3 Bonds: 31.9, 13.6, 10.8
-: 43.7 Stocks
+:: 43.7 Stocks
 ===Vanguard Recommendation===

@@ Line 40: / Line 40: @@
 : 43.7 Stocks
-Vanguard Recommendation
+===Vanguard Recommendation===
 : Recommendation:  Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund
 : Bond Funds:
@@ Line 60: / Line 60: @@
 :: 43.7 Stocks
-Financial Samurai Recommendation
+===Financial Samurai Recommendation===
 : Bond Funds: Total Bond Market II Index Fund, Total International Bond Index Fund, Short-Term Inflation-Protected Securities Index Fund
 : Age 50-65
@@ Line 72: / Line 72: @@
 :: 50% Stocks
-Fidelity Retirement Funds Asset Allocation
+===Fidelity Retirement Funds Asset Allocation===
 : Bond Funds: Inflation Protected Bond Fund, Total Bond Market Fund, High Yield & Emerging Market Bond Fund
 : Age 55-59

Asset Allocation Recommendations - Revision history

Dlk: /* Schwab Funds */

Dlk: /* Schwab Funds */

Dlk at 20:34, 31 December 2019

Dlk at 20:32, 31 December 2019

Dlk: Created page with "## Warren Buffet - 2015 Chairman\'s Letter **2017 letter, pg 11:** Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption..."

Dlk: Created page with "## Warren Buffet - 2015 Chairman\'s Letter 2017 letter, pg 11: Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption..."