Meeting with financial advisor this week

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Liza1948

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I have an annual meeting with my financial advisor this week. I'm a retired librarian and a widow, but prior to becoming a librarian I worked for an investment firm focusing on fixed income (I left in the late 1980s, my late 40s, to focus on my family and my true love which is reading).

Anyway, I have a 7 figure investment portfolio that is currently invested 55 percent fixed income (largely Treasuries, but also a small amount of highly rated corporates and some municipals) with the remainder largely in equities. Because equity markets have increased double digits for the last three years in a row, I am thinking there is a a strong possibility for correction and as it is I'm over balanced on equities anyway given my age.

The problem I have is if I were to sell off like 1/3 of my exposure to equities, fixed income is so expensive these days it may not make sense, and in cimbination with a potential (if not certain) increase in interest rates this year I am concerned about over paying for fixed income right now. On the other hand, since I am largely a HTM investor for FI then it shouldn't really matter. The alternative is I could put the proceeds in cash-like investments but then I'm exposed to inflation which in US dollars was 6 percent last year.

For the record, I don't have any debt, I own my house outright, my income is from my pension and my late-hudband's pension, and SS.

So, I'm a little hesitant about maintaining such relatively high level to equities but am nervous about taking gains. Any advice is welcome.
 

I like a simple fund like wellesly income coupled with maybe 5% in gold and 5% in a commodities etf for inflation
how do you reconcile gold as an inflation hedge when it has been flat over the last year and USD inflation has been six percent? And a commodity ETF only provides price increase (or decrease) coverage for the commodities in the fund. If you were really interested in hedging your inflation risk you'd be invested in TIPS so I don't follow your logic.
 

how do you reconcile gold as an inflation hedge when it has been flat over the last year and USD inflation has been six percent? And a commodity ETF only provides price increase (or decrease) coverage for the commodities in the fund. If you were really interested in hedging your inflation risk you'd be invested in TIPS so I don't follow your logic.
Gold has actually beaten stocks the last 20 years . Few realize that .

stocks and gold have beaten stocks and bonds over almost all time frames .

why ? Because , gold becomes a very different animal when in a portfolio..

YEP , the asset everyone thinks does nothing , when combined with equities has beaten the favored child the balanced portfolio of equities and bonds just about all time frames the last 20 years since gold became easily accessible through etfs and a main stream investment .

lots of portfolios are designed today with gold as a a holding .

98% of the market falls gold has had a positive real return allowing one to rebalance into equities and buy more than bonds or cash would have .

gold does not respond to normal inflation when other assets stand up well …it responds when real returns on cash grow worse and worse and other assets drop the ball .

so gold should not respond much as long as other assets are doing the job which they are , commodities and stocks are running with the ball .

that is why there are very few time frames where stocks and bonds beat stocks and gold .

a broad based commodities fund like dbc holds all the major Commodities..

as far as tips go they are not a good choice ,I will explain why in a minute
 
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So here is my take on tips


they are not terrible but i would never count on them to keep up with my lifestyle costs .

they may not even keep up with actual inflation .



Numbers in a spreadsheet do not tell you about political risk that often comes with high inflation. You have to use some intuition and historical extrapolation to guess what results from high inflation and why you don't want to use TIPS.

1) High inflation is a political problem in almost every case. The people causing the inflation know they are doing it.
2) Because high inflation is unpopular with the masses, the people in charge are always going to lie about it as long as possible to deflect blame.
3) Then when lying doesn't work, they will implement policies like price controls to make it look like they are doing something. This always makes it worse.
4) Along the way, they will manipulate economic numbers to try to trick the markets. However the markets are much smarter than the typical politician, who is usually an idiot based on my experience.

But these things are not going to show up in Excel. There is no ("IDIOT POLITICIAN ) function you can call. There is no way for you to anticipate what actions they will take to lie about the situation. And, there is no way for you to know how the markets are going to react to the mess.

I will only suggest that the markets will figure out the right thing to do and that right thing usually is not relying on government numbers about inflation.

so tips are like buying fire insurance from an arsonist

Or you can simply go back and read Nixon's, Ford's and Carter's speeches about inflation in the 1970s. It was lie after lie after lie. A decade of lies.

TIPS may be OK for the cash portion of the portfolio. But I wouldn't rely on them in the slightest for protection against high inflation. For lower inflation the bonds and stocks are all you need.
 
interesting look at wellesly and gold

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AS far as my own retirement portfolio , i am in a conservative model of my own design with an emphasis on inflation .

for my inflation assets i have currently

GBTC BITCOIN 7%

GLD GOLD 7%

STRATEGIC REAL RETURN FUND 11%

i sold dbc commodities and took profits friday but i will rebuy on a dip .

so 25% are in inflation hedges .

the real return fund is for low to moderate inflation like now and bitcoin , gold for higher inflation .


the rest of the portfolio is a conservative income model

TLT LONG TERM BONDS RECESSION HEDGE 7%

VGSH SHORT TERM BONDS 8%

FTBFX TOTAL BOND FUND 9%

HYG HIGH YIELD BOND FUND WHICH ACTS AS A LESS VOLATILE PROXY FOR STOCKS 9%

STOCKS , FIDELITY CONTRA , BLUE CHIP GROWTH AND VOO INDEX 17%

CASH 20%

if we have a nice size dip i will deploy more to stocks .. I took profits in our taxable account selling equities Friday because I had a large carry over to use so equities are low right now in my portfolio
 
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I would agree if we were on the FIREcalc forum.

Here it feels more like an opportunity for a humble brag.

It’s not right or wrong it just feels odd to me.
Well few really know how to evaluate a mediocre , good or great advisor since having an advisor should be a lot more than buy an s&p 500 fund and a total bond fund and have a nice life ….there are loads of other factors .

but as humans we only know what we know and we know nothing about what we do know .

i happen to think that researchers like kitces , milevsky and blanchette are at the forefront of retirement research.

what they say moves the financial planning world .

so I always found brushing up on some of their thoughts and then trying to get a planners
response .

if they are not aware of this stuff you can bet they are behind the times
 
There are some interesting facts here, and some questions. WHO would choose artwork by John Wayne Gacy as their avatar, and why?

Yes, odd stuff going on, @Aunt Bea.
If you must know, I've been listening to heavy metal since the late 60s. That's the cover of an album I like. Good catch though, most people wouldnt have done so. If it offends people I can change it.
 
interesting look at wellesly and gold

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i-G6MzpVs-L.jpg







i-nXs93wQ-L.jpg


i-r3hFVxX-XL.jpg
this is just disorganized charts and surrounding a poorly worded, almost incomprehensible argument. Tell me, have you ever even studied anything approactiing portfolio theory? Are you at all familiar with processes for portfolio benchmarking and returns? Do you know what an investment policy is? Do you understand the idea of risk limits or hedging products? Or, the more likely scenario, did you learn all this useless information from some bogus online course run by the same loonies that think we should return to the gold standard?
 
this is just disorganized charts and surrounding a poorly worded, almost incomprehensible argument. Tell me, have you ever even studied anything approactiing portfolio theory? Are you at all familiar with processes for portfolio benchmarking and returns? Do you know what an investment policy is? Do you understand the idea of risk limits or hedging products? Or, the more likely scenario, did you learn all this useless information from some bogus online course run by the same loonies that think we should return to the gold standard?
What a post full of nonsense ….and you are questioning me ?

do you even understand that using Wellsley in retirement is not just about returns .

go back to 101 of retirement investI got and then maybe we can discuss it .

you may want to learn to interpret those charts while you are at it
 
For those who want the facts let’s take a typical 60/40 portfolio.

portfolio one is a 60% total stock market fund and 40% gld gold

portfolio 2 is 60% total market fund and 40% total bond fund .

since 2005 is when gold etfs came to be lets compare 10k in each

Starting 2005 To today. Portfolio one 53,875. Portfolio 2 ,40,341

starting 2010 portfolio one 35,096 portfolio 2 ,is 34787


starting 2015. Portfolio one is 21088. Portfolio 2 ,19,967

starting 2018. Portfolio one 16,826 portfolio 2 ,15,855

so stocks and gold have beaten stocks and bonds in a benchmark 60/40 portfolio

and thems the facts
 
For those who want the facts let’s take a typical 60/40 portfolio.

portfolio one is a 60% total stock market fund and 40% gld gold

portfolio 2 is 60% total market fund and 40% total bond fund .

since 2005 is when gold etfs came to be lets compare 10k in each

Starting 2005 To today. Portfolio one 53,875. Portfolio 2 ,40,341

starting 2010 portfolio one 35,096 portfolio 2 ,is 34787


starting 2015. Portfolio one is 21088. Portfolio 2 ,19,967

starting 2018. Portfolio one 16,826 portfolio 2 ,15,855

so stocks and gold have beaten stocks and bonds in a benchmark 60/40 portfolio

and thems the facts
W=oh wait. I get it now. You're that pillow guy who shouts nonsense ad nauseum and uses stranely sourced, unverifiable information until people either believe your nonsense or give up trying. My apologies, I didn't know I was in the presence of an investment genius.
 
Dear Lisa,
I am at a loss as to why you are posting this here. You should br posting on either/and early-retirement.org or the boggleheads site. As someone said, if you have a financial advisor (which is a topic for another site) why ask advice here?
I'm new to the forum.
 
W=oh wait. I get it now. You're that pillow guy who shouts nonsense ad nauseum and uses stranely sourced, unverifiable information until people either believe your nonsense or give up trying. My apologies, I didn't know I was in the presence of an investment genius.
Not a genius, but it seems I have a much better grasp then you do as to what many retirees want or use …

sure you got some retirees that still are swinging for the fences or want high equity .

but most retirees are in the 35-60% range and use balanced portfolios or balanced funds.

wellesly is one of the most popular funds with retirees ….but it lacks high inflation protection or protection from increasing negative real returns on cash instruments which is where gold tends to shine when other assets drop the ball

I already proved gold did a better job than bonds when mated to equities .

thanks for playing
 

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