Fidelity Bond and Bill Direct Purchase ?'s

Discussion of the Bond portion of the Permanent Portfolio

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flyingpylon
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by flyingpylon » Sat Feb 08, 2020 6:36 am

vnatale wrote:
Fri Feb 07, 2020 6:40 pm
jhogue wrote:
Sun Mar 10, 2019 11:24 am

You may want to investigate your 401k plan provider to see if they offer a brokerage window. If so, it would give you more options that would bring you closer to a pure STT/LTT barbell.
For those whose access to retirement plans is through your employer, does your employer offer or not offer a brokerage window?

Vinny
My employer does. Contributions go into a primary 401k account and we have to manually transfer funds to a brokerage account with another provider, which I do about 3-4 times a year.
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by InsuranceGuy » Sat Feb 08, 2020 7:40 pm

flyingpylon wrote:
Sat Feb 08, 2020 6:36 am
vnatale wrote:
Fri Feb 07, 2020 6:40 pm
For those whose access to retirement plans is through your employer, does your employer offer or not offer a brokerage window?

Vinny
My employer does. Contributions go into a primary 401k account and we have to manually transfer funds to a brokerage account with another provider, which I do about 3-4 times a year.
My employer also offers a brokerage window all through Fidelity. Funds are automatically transferred to the brokerage account every paycheck.
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by vnatale » Mon Feb 17, 2020 2:37 pm

pmward wrote:
Fri Mar 08, 2019 2:22 pm
Yeah I think I'm going to work on building a monthly ladder of 1 year bills, but start off with 12k (4k per week) in 4 week bills on auto-roll while I'm building the 1 year bill ladder out. It will be a few years I'm sure before I have accumulated enough in 1 year bills laddered out every month. Once I get there I'll likely kill the 4 week bills and roll those to 1 year bills as well. In the meantime, it is probably better safe than sorry as far as keeping enough liquidity for the common run of the mill "emergencies" like car or home issues in 4 week bills. Also, once I've reached that point, that would probably be a good time to see what the yield curve is like and maybe extending maturity out on fresh accumulations. Probably at least a couple years before I get there though.

I also did decide I'm going to incorporate my 401k into my golden butterfly even though I have no access to LTT's or gold. I'm just going to have to do 25% TSM, 25% small cap, 50% total bond market (substituted for the bond barbell) in my 401k automatically rebalanced annually and then hold enough gold taxable to cover 20% of my total portfolio between all accounts combined. And outside my 401k I'm doing the proper LTT/STT barbell. So with that I've already got a bit more risk on the bond side of things because of the corporate bonds in TBM, so having all T-Bills in my non-401k accounts for the STT portion is probably a good tradeoff for the next few years at least. I've really grown quite fond of my golden butterfly after watching the way it has behaved day to day over the last couple of months, between both a melt up in the stock market over the last couple months, and now into a nice little sell off. It has been a nice little short term sampling of bull and bear environments in the short time I've held the portfolio. It handled both rather well and seems to fit my personality quite well. It is definitely true that you get a better feel for a portfolio once you've actually got some money on the line. I've also done a lot more research and all that has strengthened my convictions in the GB. So I think it's time to go all in! TBM in the 401k isn't optimal, but it works well enough in the grand scheme. At least since I've only been at this job for a year my 401k is smaller than my IRA's/taxable accounts, so it's never going to be the anywhere near the majority of my bond allocation.
Read everything that you (and everyone else) wrote regarding your initial questions.

What did you actually end up doing subsequent to the above?

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by pmward » Tue Feb 25, 2020 1:42 pm

vnatale wrote:
Mon Feb 17, 2020 2:37 pm
pmward wrote:
Fri Mar 08, 2019 2:22 pm
Yeah I think I'm going to work on building a monthly ladder of 1 year bills, but start off with 12k (4k per week) in 4 week bills on auto-roll while I'm building the 1 year bill ladder out. It will be a few years I'm sure before I have accumulated enough in 1 year bills laddered out every month. Once I get there I'll likely kill the 4 week bills and roll those to 1 year bills as well. In the meantime, it is probably better safe than sorry as far as keeping enough liquidity for the common run of the mill "emergencies" like car or home issues in 4 week bills. Also, once I've reached that point, that would probably be a good time to see what the yield curve is like and maybe extending maturity out on fresh accumulations. Probably at least a couple years before I get there though.

I also did decide I'm going to incorporate my 401k into my golden butterfly even though I have no access to LTT's or gold. I'm just going to have to do 25% TSM, 25% small cap, 50% total bond market (substituted for the bond barbell) in my 401k automatically rebalanced annually and then hold enough gold taxable to cover 20% of my total portfolio between all accounts combined. And outside my 401k I'm doing the proper LTT/STT barbell. So with that I've already got a bit more risk on the bond side of things because of the corporate bonds in TBM, so having all T-Bills in my non-401k accounts for the STT portion is probably a good tradeoff for the next few years at least. I've really grown quite fond of my golden butterfly after watching the way it has behaved day to day over the last couple of months, between both a melt up in the stock market over the last couple months, and now into a nice little sell off. It has been a nice little short term sampling of bull and bear environments in the short time I've held the portfolio. It handled both rather well and seems to fit my personality quite well. It is definitely true that you get a better feel for a portfolio once you've actually got some money on the line. I've also done a lot more research and all that has strengthened my convictions in the GB. So I think it's time to go all in! TBM in the 401k isn't optimal, but it works well enough in the grand scheme. At least since I've only been at this job for a year my 401k is smaller than my IRA's/taxable accounts, so it's never going to be the anywhere near the majority of my bond allocation.
Read everything that you (and everyone else) wrote regarding your initial questions.

What did you actually end up doing subsequent to the above?

Vinny
Hey Vinny, I'm actually pretty close to the above allocation still. I'm currently basically in a GB, only I traded 5% of the cash and substituted a 5% allocation to REIT's in it's place. I also am doing the same as mentioned with bonds in my 401k. I cannot keep all bonds in IRA so I had to do some TBM as a substitute. So far things are working out well. I've become a believer. While I do still have a small allocation separate to that I actively manage, I'm finding myself growing bored with it and may just roll it into my GB, particularly if stocks continue to sell off.
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by vnatale » Mon Mar 02, 2020 8:56 pm

pmward wrote:
Tue Feb 25, 2020 1:42 pm
vnatale wrote:
Mon Feb 17, 2020 2:37 pm
pmward wrote:
Fri Mar 08, 2019 2:22 pm
Yeah I think I'm going to work on building a monthly ladder of 1 year bills, but start off with 12k (4k per week) in 4 week bills on auto-roll while I'm building the 1 year bill ladder out. It will be a few years I'm sure before I have accumulated enough in 1 year bills laddered out every month. Once I get there I'll likely kill the 4 week bills and roll those to 1 year bills as well. In the meantime, it is probably better safe than sorry as far as keeping enough liquidity for the common run of the mill "emergencies" like car or home issues in 4 week bills. Also, once I've reached that point, that would probably be a good time to see what the yield curve is like and maybe extending maturity out on fresh accumulations. Probably at least a couple years before I get there though.

I also did decide I'm going to incorporate my 401k into my golden butterfly even though I have no access to LTT's or gold. I'm just going to have to do 25% TSM, 25% small cap, 50% total bond market (substituted for the bond barbell) in my 401k automatically rebalanced annually and then hold enough gold taxable to cover 20% of my total portfolio between all accounts combined. And outside my 401k I'm doing the proper LTT/STT barbell. So with that I've already got a bit more risk on the bond side of things because of the corporate bonds in TBM, so having all T-Bills in my non-401k accounts for the STT portion is probably a good tradeoff for the next few years at least. I've really grown quite fond of my golden butterfly after watching the way it has behaved day to day over the last couple of months, between both a melt up in the stock market over the last couple months, and now into a nice little sell off. It has been a nice little short term sampling of bull and bear environments in the short time I've held the portfolio. It handled both rather well and seems to fit my personality quite well. It is definitely true that you get a better feel for a portfolio once you've actually got some money on the line. I've also done a lot more research and all that has strengthened my convictions in the GB. So I think it's time to go all in! TBM in the 401k isn't optimal, but it works well enough in the grand scheme. At least since I've only been at this job for a year my 401k is smaller than my IRA's/taxable accounts, so it's never going to be the anywhere near the majority of my bond allocation.
Read everything that you (and everyone else) wrote regarding your initial questions.

What did you actually end up doing subsequent to the above?

Vinny
Hey Vinny, I'm actually pretty close to the above allocation still. I'm currently basically in a GB, only I traded 5% of the cash and substituted a 5% allocation to REIT's in it's place. I also am doing the same as mentioned with bonds in my 401k. I cannot keep all bonds in IRA so I had to do some TBM as a substitute. So far things are working out well. I've become a believer. While I do still have a small allocation separate to that I actively manage, I'm finding myself growing bored with it and may just roll it into my GB, particularly if stocks continue to sell off.
And, in regards to the portion I highlighted above, almost exactly one year in, how closely did you follow your bond laddering plans and where do you currently stand with your bond ladder?

And, NOTE to Dualstow, this is exactly the type of thing I want to think about and plan ahead of time so that when I finally go Permanent Portfolio I'm just executing the plan in all its myriad of steps with no pauses for further thought or decisions.

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by pmward » Tue Mar 03, 2020 9:31 am

vnatale wrote:
Mon Mar 02, 2020 8:56 pm
pmward wrote:
Tue Feb 25, 2020 1:42 pm
vnatale wrote:
Mon Feb 17, 2020 2:37 pm
pmward wrote:
Fri Mar 08, 2019 2:22 pm
Yeah I think I'm going to work on building a monthly ladder of 1 year bills, but start off with 12k (4k per week) in 4 week bills on auto-roll while I'm building the 1 year bill ladder out. It will be a few years I'm sure before I have accumulated enough in 1 year bills laddered out every month. Once I get there I'll likely kill the 4 week bills and roll those to 1 year bills as well. In the meantime, it is probably better safe than sorry as far as keeping enough liquidity for the common run of the mill "emergencies" like car or home issues in 4 week bills. Also, once I've reached that point, that would probably be a good time to see what the yield curve is like and maybe extending maturity out on fresh accumulations. Probably at least a couple years before I get there though.

I also did decide I'm going to incorporate my 401k into my golden butterfly even though I have no access to LTT's or gold. I'm just going to have to do 25% TSM, 25% small cap, 50% total bond market (substituted for the bond barbell) in my 401k automatically rebalanced annually and then hold enough gold taxable to cover 20% of my total portfolio between all accounts combined. And outside my 401k I'm doing the proper LTT/STT barbell. So with that I've already got a bit more risk on the bond side of things because of the corporate bonds in TBM, so having all T-Bills in my non-401k accounts for the STT portion is probably a good tradeoff for the next few years at least. I've really grown quite fond of my golden butterfly after watching the way it has behaved day to day over the last couple of months, between both a melt up in the stock market over the last couple months, and now into a nice little sell off. It has been a nice little short term sampling of bull and bear environments in the short time I've held the portfolio. It handled both rather well and seems to fit my personality quite well. It is definitely true that you get a better feel for a portfolio once you've actually got some money on the line. I've also done a lot more research and all that has strengthened my convictions in the GB. So I think it's time to go all in! TBM in the 401k isn't optimal, but it works well enough in the grand scheme. At least since I've only been at this job for a year my 401k is smaller than my IRA's/taxable accounts, so it's never going to be the anywhere near the majority of my bond allocation.
Read everything that you (and everyone else) wrote regarding your initial questions.

What did you actually end up doing subsequent to the above?

Vinny
Hey Vinny, I'm actually pretty close to the above allocation still. I'm currently basically in a GB, only I traded 5% of the cash and substituted a 5% allocation to REIT's in it's place. I also am doing the same as mentioned with bonds in my 401k. I cannot keep all bonds in IRA so I had to do some TBM as a substitute. So far things are working out well. I've become a believer. While I do still have a small allocation separate to that I actively manage, I'm finding myself growing bored with it and may just roll it into my GB, particularly if stocks continue to sell off.
And, in regards to the portion I highlighted above, almost exactly one year in, how closely did you follow your bond laddering plans and where do you currently stand with your bond ladder?

And, NOTE to Dualstow, this is exactly the type of thing I want to think about and plan ahead of time so that when I finally go Permanent Portfolio I'm just executing the plan in all its myriad of steps with no pauses for further thought or decisions.

Vinny
I got impatient and just dumped it all in on the March and April auctions last year instead of laddering. In hindsight, it was nice random luck as I had ~2.5% locked in all year through all these cuts and that is rolling off this month and next. Given that rates after todays cut are now down to 1% I'm probably going to tighten up, instead of 1 year bills I'll probably just cancel the auto roll and start a new auto roll with some 3 month bills. There's no reason to lock up money for a year for these puny interest rates, I would rather stay very short with my short term treasury portion when yields are below inflation like this. Also, of note is that if I didn't have a big purchase coming down the pipe next year I would likely take another 5% away and move that towards REIT's (for a total of 10% REIT and 10% short term, which I believe is the same Tyler is in these days) to keep my fixed expense holdings in check. 10% cash would give me more than enough liquidity, if I didn't have that big expense next year.

So yeah, it is worth putting some thought into how you want to handle negative real, or even potentially future negative nominal rates. Do you want to bury your head in the sand, or are there some rules you can put in place that make sense, like my going to 3 month with negative real rates. I've put some thought into maybe going from 30 year to 10 year long treasuries if long bonds start getting close to 0, because at that point the risks start to make me nervous, even accounting for convexity. This bond bubble is bound to burst at some point, and while it certainly can get a lot more crazy than it currently is, at a certain point I at least would want to manage my risk exposure a bit. I'm not sure at what point yet I would start moving down the curve, but given where we are now I probably should put some thought and cement some rules in place of how and when I average down. This is no longer a long off future thing that can be decided another day, it could potentially happen soon.
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Re: Fidelity Bond and Bill Direct Purchase ?'s

Post by pmward » Tue Mar 03, 2020 10:25 am

And another thing to think about... thus far all my long term bonds have been tax sheltered. At what point does it make sense to start shuffling bonds into taxable and stocks into tax sheltered? I suspect the dynamic of stocks out yielding bonds may last for awhile. It will take a bit for the index funds to catch up, but for those like me that have been going direct bonds the effects are immediate. Does that warrant any adjustment and if so with fresh contributions and/or actually shuffling current holdings?
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