Day 3 of 100% PP and LOVING IT!

[MiniB]

I finally decided to pull the trigger on 100% PP with 0% VP as of Monday.  Partly due to a speaker I heard in a private small group setting, who made me fear the stock market and economy.  Partly due to CraigRs first podcast.

I pulled the trigger 3 days ago and am sooo happy.  Now I dont even look at CNBC throughout the day.  Because nothing on there is going to make one bit of damn difference to what I will do in my portfolio.  I used to check CNBC every 30 minutes, every business day.  I rarely made day trading, but still I wanted to see how my sector weightings were doing that I speculated on.

For logistical reasons and personal preference, my PP is:

5% Prime MMF
10% HSA
5% Tax Sheltered Annuity
5% "High Yield" credit union NCUA Insured CD

12.5% IAU
12.5% SGOL

25% VUSTX - VG "Long" Term Treasury bond fund

12.5% TSM
12.5% Total International Stock Fund

All new money is going into the Prime MMF.  All distributions will come out of the Prime MMF.  When the treasury MMF re-opens, that will be my new Go-To.  In theory, I will not contribute further to the annuity and the HSA will grow modestly compared to new contributions.  Over time the 20% that is annuity and HSA will drop down to a much smaller percentage of the overall.

When I have enough money to allow me to maintain the $50k VG minimum for free brokerage, I will shift the VUSTX into actual 30 year treasuries I will buy at auction.  Right now I need that entire portion in VUSTX to maintain the $50k in VG Funds/ETFs rule for the free brokerage.

[craigr]

Good to hear. You'll probably find that CNBC becomes more of a comedy channel than a source of news after you run the portfolio for a while.

[MiniB]

Good to hear. You'll probably find that CNBC becomes more of a comedy channel than a source of news after you run the portfolio for a while.

To be clear I never used CNBC for "news" just to check tickers of things like VGK - the VG European ETF.  CNBC offers free real time non-delayed quotes.

Also, I would sometimes get ideas on contrarian speculations based on CNBC, but I NEVER speculated on something that CNBC recommended.

[craigr]

Good to hear. You'll probably find that CNBC becomes more of a comedy channel than a source of news after you run the portfolio for a while.

To be clear I never used CNBC for "news" just to check tickers of things like VGK - the VG European ETF.  CNBC offers free real time non-delayed quotes.

Also, I would sometimes get ideas on contrarian speculations based on CNBC, but I NEVER speculated on something that CNBC recommended.

I see. I haven't watched CNBC for years. I saw a Jim Cramer show once but I had a hard time taking investing tips from someone that hit buttons constantly for sound effects as part of the dialogue.

[Storm]

Kind of off topic, but does VG really offer free trades for $50K or higher account values?  I have been with Fidelity for both my 401k (no choice) and my individual brokerage due to the fact that my ESPP purchases company stock through them and I can buy up to $25K a year company stock at a 15% discount.

What I've been doing is purchasing the max 15% in company stock every quarter, then selling the stocks that are more than 1 year old from 4 quarters ago - to get long term capital gains, then letting it become cash in the PP.

VG having that feature might give me another reason to diversify a little bit - besides not wanting my entire retirement at a single institution.

[Lone Wolf]

Congratulations!  Glad to hear you have enjoyed the change.  It's a great feeling, isn't it?  I loved making the change from "I really need to look at my investments but I'm afraid to" mode into "I need to get out of the habit of staring at my portfolio every single day".

I sort of feel like I have a bit of a "healthier relationship" with the investing world as a whole now.  It's nice to not be filled with fear every time I hear some talking head's thoughts on the market and think, "Oh God, what if they are right?"

[KevinW]

Kind of off topic, but does VG really offer free trades for $50K or higher account values?

Vanguard brokerage accounts have free trades in and out of Vanguard-sponsored ETFs, with a $20 annual fee.  That fee is waived for "Voyager" accounts which have at least $50k in Vanguard-sponsored ETFs and mutual funds.

It's nice that Vanguard offers that discount but it doesn't amount to much for PP investors.  An orthodox PP will need to pay commissions for non-Vanguard funds for the gold and bond allocations, which combined with the annual fee costs about as much as paying commissions on all four assets at a discount broker.  Also holding half the portfolio in non-Vanguard funds effectively increases the "Voyager" threshold to 100k.

[moda0306]

I'm not in it yet, as I don't have the savings to dive into it, but I can totally understand what you are saying.  It's crazy to see the gains of the PP, and it makes so much sense it's hard to believe all the financial used car salesman out there peddling 60/40 stocks & corp. bonds.

Also, it is almost a constant lesson or microcosm or what have you in macroeconomics.  These things don't play on tech bubbles, housing markets, balance sheets or P/E ratios... it's all about macroeconomics and as crazily complicated as it is, certain rules hold true and keep pushing the PP up because people have an inherant fear of a few of its sectors.  It's such a well-oiled machine.

I'm amazed at how people can worry so much about certain risks, but when it comes to their portfolio, they design it like a car with 50 air bags and no brakes or a 500 hp engine and no handling capabilities.

[MiniB]

I checked my portfolio again today just for fun.  I'm up 1% for the week in PP.  Very happy with that 

Also I noticed that VG is perfect for the PP because it shows a breakdown of assets by class, on the main accounts page.

What I did was add external accounts, of my Annuity and HSA.  So VG knows how much money I have all together.

VG knows that the Annuity and HSA are "short term reserves."  VG classifies my Gold ETFs as "Other"

So when I logged in today I noticed VG shows 25% Stocks, 25% Short Term Reserves, 25% Bonds, 25% Other

So this means I dont even need an excel spreadsheet!  I can visually see this just by logging onto VG.  Then when I see 35% or 15% in anything I can do a rebalance.

[travelingheelfan]

Congratulations.  As craigr mentioned, I think you'll find CNBC to be of comical value now.  One other good thing that you'll notice is that you will have much more time to do things that are more important.  To be honest, that's why I transitioned to the PP.