Gyroscopic Investing

Here's a list of all my holdings.

My worry is that if I consolidate to 4 holdings, TLT, VTI, IAU, and SHY I will have to sell quite a lot and take those losses (many of them currently in equities).

I was thinking of obviously keeping VTI, and VXUS.
Might also keep IWO, but curious what your thoughts are.

THE LIST:

(At Fidelity)
ISHARES BARCLAYS U S AGGREGATE BD FD (AGG)
ISHARES TR MSCI EAFE INDEX FD (EFA)
ISHARES TR RUSSELL 2000 GROWTH INDEX FD (IWO) - Salvageable?
ISHARES TR MSCI ACWI EX US INDEX FD (ACWX)
FIDELITY FOUR-IN-ONE INDEX (FFNOX)
ISHARES TR DOW JONES U S REAL ESTATE INDEX FD (IYR)

(At Vanguard)
VANGUARD DIVIDEND APPRECIATION ETF (VIG)
VANGUARD TOTAL INTL STOCK INDEX FUND ETF (VXUS) - WILL KEEP (5% stocks)
VANGUARD S&P SMALL CAP 600 GROWTH ETF (VIOG)
VANGUARD S&P 400 MID CAP GROWTH ETF (IVOG)
VANGUARD TOTAL BOND MARKET ETF (BND)
VANGUARD SMALL CAP VALUE ETF (VBR)
VANGUARD VALUE ETF (VTV)
VANGUARD TOTAL STOCK MARKET ETF (VTI) - WILL KEEP

What are your thoughts on this? I'm not afraid of selling all, but like I said, if I don't have to lock in those losses and can get by with a solid PP for now based on keeping some of the following then that'd be ideal.

Thank you!

Why wouldn't you want to lock in losses?  Usually, people try to lock in losses for the tax advantages.

Well I'd rather not lose $1000 due to selling, compared to selling, losing the $1000 lets say and getting the tax advantages.

The figures an example obviously, but ya.

I would assume most people are like me, but who knows...

You've lost the $1000 either way.  The question is whether you'll get the tax advantages.

Right, but daily fluctuations can possibly add to totals prior to selling all positions.

Either way, going back to the original question, what would be acceptable to keep there in the PP approach.

VTI, VXUS, anything else?

It's a sunk cost. You lost the money. It's gone. If you're so sure the stock funds you are holding will "recover" then why switch to the PP at all?

What if equities continue to take a dump for the next year? Wouldn't you look back at today and think "ah crap, I should have switched into the PP then, but now I can't because I'd really be 'locking in my losses' at 30% drops more than then."

I'm also not sure why you have so many different equity funds. I think you will find the simplicity of the PP very relaxing.

TripleB wrote: It's a sunk cost. You lost the money. It's gone. If you're so sure the stock funds you are holding will "recover" then why switch to the PP at all?

What if equities continue to take a dump for the next year? Wouldn't you look back at today and think "ah crap, I should have switched into the PP then, but now I can't because I'd really be 'locking in my losses' at 30% drops more than then."

I'm also not sure why you have so many different equity funds. I think you will find the simplicity of the PP very relaxing.

Exactly what he said. 
I recently told my Dad to switch over to the PP, but explained to him, it might be rough for the first several month.  Switching over is sorta like hopping on a moving treadmill.  You may trip up at first, but your portfolio will adjust.  Keep in mind that gold and long term bonds are priced realtively high right now, so there is a chance that you will buying both of these assets at a peak, but this is a long term strategy, and you can never really know what direction asset prices are going to go.  If Greece defaults and a domino effect occurs, you may see the DJIA down at 6000 again like it was 2 years ago, gold could rally to $2500 per ounce and interest rates on 30 year tresuries could drop to 3%. 

The best strategy is to just go all in at once.  You will eventually see growth as long as you stick with the strategy and don't meddle too much.

rmtzlr wrote:
The best strategy is to just go all in at once.  You will eventually see growth as long as you stick with the strategy and don't meddle too much.

Some people say to DCA in -- not for real benefit but for peace of mind.  I say go all in at once, but then stick your head in the sand for a month.

dragoncar wrote:

rmtzlr wrote:
The best strategy is to just go all in at once.  You will eventually see growth as long as you stick with the strategy and don't meddle too much.

Some people say to DCA in -- not for real benefit but for peace of mind.  I say go all in at once, but then stick your head in the sand for a month.

For people who like to feel in control, the PP can be very hard at first.  With practice, though, it gets MUCH easier.

It's what it might be like for a control freak from 1850 to be transported to the present and asked to take a ride on a modern commercial jet airplane.  At first, he would probably be totally freaked out at the unlikely balancing of so many conflicting forces of nature that modern aviation does so flawlessly, but after he found his seat and had a couple of drinks, he might find himself enjoying the surprisingly smooth ride.

MediumTex wrote:
For people who like to feel in control, the PP can be very hard at first.  With practice, though, it gets MUCH easier.

It's what it might be like for a control freak from 1850 to be transported to the present and asked to take a ride on a modern commercial jet airplane.  At first, he would probably be totally freaked out at the unlikely balancing of so many conflicting forces of nature that modern aviation does so flawlessly, but after he found his seat and had a couple of drinks, he might find himself enjoying the surprisingly smooth ride.

Yes, another valid method would be to drink during the first few days :-)

dragoncar wrote:

MediumTex wrote:
For people who like to feel in control, the PP can be very hard at first.  With practice, though, it gets MUCH easier.

It's what it might be like for a control freak from 1850 to be transported to the present and asked to take a ride on a modern commercial jet airplane.  At first, he would probably be totally freaked out at the unlikely balancing of so many conflicting forces of nature that modern aviation does so flawlessly, but after he found his seat and had a couple of drinks, he might find himself enjoying the surprisingly smooth ride.

Yes, another valid method would be to drink during the first few days :-)

I hadn't thought of that.

That is actually a pretty good idea.

To update everyone, I just went all in 2 days ago and now have a portfolio of just TLT, IAU, VTI (which I kept most of and bought a lot more), and SHY (high-yield savings).

Feels better, even though TLT has taken a bit of a tumble past couple days. It's all good.

Thanks!

timerscraw wrote: To update everyone, I just went all in 2 days ago and now have a portfolio of just TLT, IAU, VTI (which I kept most of and bought a lot more), and SHY (high-yield savings).

Feels better, even though TLT has taken a bit of a tumble past couple days. It's all good.

Thanks!

Congrats!!!

Adam1226 wrote:

timerscraw wrote: To update everyone, I just went all in 2 days ago and now have a portfolio of just TLT, IAU, VTI (which I kept most of and bought a lot more), and SHY (high-yield savings).

Feels better, even though TLT has taken a bit of a tumble past couple days. It's all good.

Thanks!

Congrats!!!

+1

Now just leave it alone and stop worrying and I think you will grow to really enjoy it.  Over time, the moves in some of the PP assets are likely to really surprise you.

For me, I would have NEVER believed in the spring of 2009 that stocks were poised to almost double over the next two years.