Desert, yes you did say that a 100% TSM portfolio is volatile. But you also implied that the 11% return is guaranteed with a "long enough timeline". You needed to make clear that the length of said timeline had better be at least 25 years, during which time you must guarantee that said person will not have any need to touch those retirement funds. I gave an example of an 18 year period in my post in which annual CAGR was only 6%.
It's just the difference between theory and real life. In theory, a 100% TSM investment sounds great. Unfortunately real life is a bit messy and unpredictable.
Age tilted PP
Moderator: Global Moderator
Re: Age tilted PP
Hello Sophie et al
Just to clear up any misunderstanding.
Initially I was considering a PP on the edge of the rebalance bands, so
Option 1. (15% Gold, 15% Cash) =30% "Store of value ie savings" plus "35% Shares, 35% Bonds" =70% "Investments"
or
Option 2. (35% Gold, 35% Cash) = 70% "Store of value" plus "15% Shares, 15% Bonds" = 30% "Investments"
however, thanks to everyones useful input, I personally would stay with a standard 4 x 25 PP and make any additional weighting via a variable portfolio.
Now that being said, my "reality check" is this......
If I did not have a large equity exposure when I was young (which was due to dumb luck, not great financial insight) there would be NO way I could look forward to retirement in a few years.
Reality check No 2. My elderly mother currently has a PP where half the allocation (2x25%) is in overvalued Shares (near 2008 peak) and overvalued bonds (at historic high price). If we did not have a large cash allocation outside the PP, we would have no meaningful buffer in case of unforseen expenses due to the small total amount of her assets.
So to summarize my thoughts:
1. Core position in standard 4x25PP, "BUT"
2. A variable portfolio may be prudent depending on your personal situation. Eg: Age, health, unusually high or low equity valuations, job security etc. While a variable portfolio can be thought of as a way to make outsized returns, it can also be used as a "safety net".
Now I would especially like to thank everyone because of their open mindset and not just saying "Insert Portfolio Name Here" is the one and only option to consider.
(A now enlightened)
Hal
Just to clear up any misunderstanding.
Initially I was considering a PP on the edge of the rebalance bands, so
Option 1. (15% Gold, 15% Cash) =30% "Store of value ie savings" plus "35% Shares, 35% Bonds" =70% "Investments"
or
Option 2. (35% Gold, 35% Cash) = 70% "Store of value" plus "15% Shares, 15% Bonds" = 30% "Investments"
however, thanks to everyones useful input, I personally would stay with a standard 4 x 25 PP and make any additional weighting via a variable portfolio.
Now that being said, my "reality check" is this......
If I did not have a large equity exposure when I was young (which was due to dumb luck, not great financial insight) there would be NO way I could look forward to retirement in a few years.
Reality check No 2. My elderly mother currently has a PP where half the allocation (2x25%) is in overvalued Shares (near 2008 peak) and overvalued bonds (at historic high price). If we did not have a large cash allocation outside the PP, we would have no meaningful buffer in case of unforseen expenses due to the small total amount of her assets.
So to summarize my thoughts:
1. Core position in standard 4x25PP, "BUT"
2. A variable portfolio may be prudent depending on your personal situation. Eg: Age, health, unusually high or low equity valuations, job security etc. While a variable portfolio can be thought of as a way to make outsized returns, it can also be used as a "safety net".
Now I would especially like to thank everyone because of their open mindset and not just saying "Insert Portfolio Name Here" is the one and only option to consider.
(A now enlightened)
Hal