Post
by LittleDinghy » Mon Jun 17, 2019 11:31 pm
My apologies for my probably poor way of writing the following. This is all so new to me that everything is not clear enough yet for me to be able to write about it well.
Our in-service 401k, SSP (Employer supplementary savings plan), 403b, 401a, and 457b do not contain treasury funds, or even good equivalents; the best choices for these accounts are the equities. We have most of our 25-30 year T-bonds and our cash (1-3 year T-notes and T-bills) in rollover IRAs that I've created by rolling over a 401k from a previous employer as well as by rolling over what I didn't need for equities in the current 401k (which latter allows partial in-service rollovers). We had some money in 2 Roths (his and hers). There is no way to get more money into her Roth, but in 2018 I started adding money to my Roth by rolling over both after tax deposits, as well as pre-tax deposits (up to my marginal tax rate ceiling), into my Roth, and I plan to continue such Roth conversions each year until I retire at the end of 2022. One of the Roth accounts is partially in equities (to make up the rest of the equity position for the whole Portfolio). The rest of that Roth and all of the second Roth are presently in long term Treasuries to make up the remainder of the whole Portfolio's long term treasuries position. So, all of that makes up the equity position, the 25-30 year treasury position, and most of the cash position. I made the conversion to all of the above in the last 2-3 weeks. What is left and not yet invested is the brokerage account. I was intending to cash out enough of the brokerage account to buy the full gold position in physical gold. The remainder left in the brokerage account would be in T-bills, rounding out the full cash position. I should also mention that I'm doing a nearly pure GB, rather than the PP, so the equity position is 40%, with the bonds 20%, cash 20% and gold 20%.
Now, with the advice I'm seeing here, it seems I should instead have, 20-40% in physical gold and 60-80% in funds (sounds like AAAU is preferred over Schwab's and Fidelity's commission-free gold fund options, despite the relatively small overall holdings in AAAU implying less liquidity than the others if selling of shares for rebalancing were required). So it seems to me that I need to decide whether to prioritize the portion of our Roth accounts after equities for gold (AAAU or other funds), long term treasury bonds, or cash (1-3 year treasury notes). Remember from the above that it seems we have no choice but to place our equities in our active 401k, SSP, 403b, 401a, and 457b.
Your thoughts on what to put in our Roths, given the limitation for where we can put our equities, would be much appreciated!
Also, one other concern. Despite mentioning in several spots that it might be a good idea to hold some of one's gold in funds for ease of rebalancing, the book, "The Permanent Portfolio" really seems to emphasize that gold should primarily be held in physical. Yet, thinking about three consecutive gold rebalancings leads one to primarily hold gold in funds. What is the reasoning that one can use to resolve this dichotomy one way or the other?