Page 1 of 1
Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 1:23 pm
by Ariadne22
Came into about 25k. Should I set up PP now, or stash it for a few months, and/or incrementally buy PP components and, if so, when.
Planning to use:
VTI
TLT
GTU
SHY or SWIIX (hate to have $$ earning zero)
Not locked into any of the above choices. Acct is at Schwab, if that matters.
Intellectually, I know this is 25-yr money. But, with summer doldrums upon us - and me liking the idea of possibly waiting until August or Sept, or the 1st of the year - can't quite pull the trigger.
Your thoughts are appreciated. Thx.
Re: Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 1:41 pm
by Tyler
I personally went all-in and am glad I did. But as long you're sitting on cash (and not some risky investment) then if phasing in over time helps you sleep better then I wouldn't have a big problem with that. My only non-professional recommendation is to buy the stocks/bonds/gold in equal chunks and avoid trying to predict the "right" time to buy each.
Incidentally, if you're with Schwab then SCHO is very similar to SHY and has no transaction fees.
Re: Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 1:47 pm
by l82start
keep reading and studying and pull the trigger when you are comfortable... over a lifetime of investing the differences between all now, all a few months from now, and DCA will probably not amount to much, there will be different answers to the question depending on personal preference, comfort and personal situation. your choices look like a good basic PP, i would recommend buying some gold bullion coin at some point, and possibly buying individual treasury's eventually as well, but it looks like you have picked a good starting permanent portfolio...
Re: Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 3:34 pm
by cabronjames
if using GTU, buy it at a discount, or a small premium. Maybe check the daily premium/discount history & make sure that when you buy GTU, it's in the lower 20% or at least lower 50% of the historical premium/discount data.
Also assuming if it's taxable, understand the extra tax paperwork that is required, which others have described in other posts.
--
I agree with the notion the others said, that in 2037 ("25 yrs money"), it won't matter much if you bought all the assets in May 2012, Nov 2012, or any permutation of DCA across those months, etc
Re: Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 5:25 pm
by Ariadne22
Appreciate the input, guys. Thank you.
Interestingly enough I'm most comfortable with gold - seems the floor for about a year has been $1500. Although, fwiw, I just heard on CNBC risk to gold could be the central banks dumping. Worst case it goes back to $300 (unlikely). Least comfortable with TLT because of the huge runup, and neutral on VTI as stock market seems to be in a trading range, on the high side right now.
But, of course, the whole theory behind PP is to avoid market timing.
I will do a little more research on GTU. Have been thinking about buying physical gold, so may do that as well. Owned it once way back in the 80s. Had quite a stash bought cheap over a number of years before the runup in early 80s - not smart enough then to know enough to unload when it was $900 oz. Sold later at $300. And there it stayed at that price until about three or four years ago when I didn't own any and wouldn't buy it, either, because I remembered how it fell out of bed in the 80s.
PP clearly would have saved me from myself.
C'est la vie. Thank you, again.
Re: Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 8:14 pm
by BearBones
Ariadne22 wrote:
Interestingly enough I'm most comfortable with gold - seems the floor for about a year has been $1500. Although, fwiw, I just heard on CNBC risk to gold could be the central banks dumping. Worst case it goes back to $300 (unlikely). Least comfortable with TLT because of the huge runup, and neutral on VTI as stock market seems to be in a trading range, on the high side right now.
But, of course, the whole theory behind PP is to avoid market timing.
I have exactly the same sentiments. So I have been moving from a large cash position into PP gradually (every 6 mos over 2 yrs). The result? LTTs bought at increasingly ridiculous prices. And no crash in stock or gold prices like I have been secretly hoping for. Should have gone all in, I guess, but I did sleep better.
Re: Set up PP Now, or a Few Months from Now?
Posted: Tue May 29, 2012 9:22 pm
by Ariadne22
BearBones wrote:
I have exactly the same sentiments. So I have been moving from a large cash position into PP gradually (every 6 mos over 2 yrs). The result? LTTs bought at increasingly ridiculous prices. And no crash in stock or gold prices like I have been secretly hoping for. Should have gone all in, I guess, but I did sleep better.
I'm in the same boat with 5% CDs which, as they mature next year and the year after, will go into the PP. I am forced to DCA, it appears. I would prefer to have it one and done, but not feasible. Penalties on early wd of CDs would wipe out even 10% gains in PP, so I guess I'll just wait.
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 3:58 am
by Gfourmoney
Ariadne22 wrote:
Appreciate the input, guys. Thank you.
Interestingly enough I'm most comfortable with gold - seems the floor for about a year has been $1500. Although, fwiw, I just heard on CNBC risk to gold could be the central banks dumping. Worst case it goes back to $300 (unlikely). Least comfortable with TLT because of the huge runup, and neutral on VTI as stock market seems to be in a trading range, on the high side right now.
But, of course, the whole theory behind PP is to avoid market timing.
I think you have really hit the main point of the PP here. If Gold goes back to $300 then great because something good will have happened to the economy and something else will be in boom times!!
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 10:24 am
by Alanw
Ariadne22 wrote:
Appreciate the input, guys. Thank you.
Interestingly enough I'm most comfortable with gold - seems the floor for about a year has been $1500. Although, fwiw, I just heard on CNBC risk to gold could be the central banks dumping. Worst case it goes back to $300 (unlikely). Least comfortable with TLT because of the huge runup, and neutral on VTI as stock market seems to be in a trading range, on the high side right now.
But, of course, the whole theory behind PP is to avoid market timing.
I will do a little more research on GTU. Have been thinking about buying physical gold, so may do that as well. Owned it once way back in the 80s. Had quite a stash bought cheap over a number of years before the runup in early 80s - not smart enough then to know enough to unload when it was $900 oz. Sold later at $300. And there it stayed at that price until about three or four years ago when I didn't own any and wouldn't buy it, either, because I remembered how it fell out of bed in the 80s.
PP clearly would have saved me from myself.
C'est la vie. Thank you, again.
Ariadne22
First: Turn off CNBC.
Second: I had the same apprehensions about LTT's but they have literally saved my portfolio the past 18 months.
Third: Gold still seems high at $1,500. but hindsight is always 20/20.
The PP takes out the guessing (market timing) and allows you to get on with your life without worrying about investment decisions.
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 4:38 pm
by Ariadne22
Alanw wrote:
First: Turn off CNBC.
Second: I had the same apprehensions about LTT's but they have literally saved my portfolio the past 18 months.
Third: Gold still seems high at $1,500. but hindsight is always 20/20.
The PP takes out the guessing (market timing) and allows you to get on with your life without worrying about investment decisions.
LOL - thank you for the kick in the you know what. Needed that, really.
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 4:52 pm
by MediumTex
CNBC is to investing what a newspaper is to reality.
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 5:00 pm
by moda0306
MT,
A newspaper, or The National Inquirer?
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 5:24 pm
by MediumTex
moda0306 wrote:
MT,
A newspaper, or The National Inquirer?
The National Enquirer is to entertainment what a newspaper is to reality.
It's all just stories, glittery narratives generated by smart people who want to make a living making stuff up that is loosely based on reality.
When you tell them they are all liars they just look at you like "Duh, what did you think we were doing? People come to us because they
want to be lied to. They
want to believe certain things, and we just help them do that."
Re: Set up PP Now, or a Few Months from Now?
Posted: Wed May 30, 2012 9:47 pm
by Ad Orientem
If your not sold on the PP then wait until you are, or have become comfortable with how you want to invest your money. If you are comfortable with the PP then what is the rational for delay?
Re: Set up PP Now, or a Few Months from Now?
Posted: Thu May 31, 2012 1:11 pm
by dualstow
Ariadne22 wrote:
...
SHY or SWIIX (hate to have $$ earning zero)
...
But isn't it lovely to own an asset class that doesn't drop $30 or $100 per unit in a day?
Re: Set up PP Now, or a Few Months from Now?
Posted: Thu May 31, 2012 3:09 pm
by MachineGhost
MediumTex wrote:
The National Enquirer is to entertainment what a newspaper is to reality.
Poo on
The National Enquirer! Gentlemen prefer the
Weekly World News...
[align=center]
[/align]
[align=center]
[/align]
[align=center]
[/align]
[align=center]
[/align]
[align=center]
[/align]
Re: Set up PP Now, or a Few Months from Now?
Posted: Fri Jun 01, 2012 11:21 am
by Ariadne22
LOL - well, I bit the bullet yesterday - and my account is up about $130 as of now. GTU and TLT carrying the day. Oy vey.
Re: Set up PP Now, or a Few Months from Now?
Posted: Sun Jun 03, 2012 2:28 am
by Bongleur
>make sure that when you buy GTU, it's in the lower 20% or at least lower 50% of the historical premium/discount data.
>
How do you find it? Is there a site with that type of data?
Re: Set up PP Now, or a Few Months from Now?
Posted: Sun Jun 03, 2012 12:06 pm
by rickb
Bongleur wrote:
>make sure that when you buy GTU, it's in the lower 20% or at least lower 50% of the historical premium/discount data.
>
How do you find it? Is there a site with that type of data?
http://www.cefconnect.com/Details/Summa ... ticker=GTU (the "Pricing History" tab)
Re: Set up PP Now, or a Few Months from Now?
Posted: Sun Jun 03, 2012 12:18 pm
by AdamA
MachineGhost wrote:
Poo on The National Enquirer! Gentlemen prefer the Weekly World News...
Here's one of my favorites.
Re: Set up PP Now, or a Few Months from Now?
Posted: Sun Jun 03, 2012 12:31 pm
by Bongleur
rickb wrote:
Bongleur wrote:
>make sure that when you buy GTU, it's in the lower 20% or at least lower 50% of the historical premium/discount data.
>
How do you find it? Is there a site with that type of data?
http://www.cefconnect.com/Details/Summa ... ticker=GTU (the "Pricing History" tab)
No, I mean is there a site that will tell me what percentile the current discount/premium is at -- for lots of ETFs in general.
Re: Set up PP Now, or a Few Months from Now?
Posted: Sun Jun 03, 2012 2:06 pm
by rickb
Bongleur wrote:
rickb wrote:
Bongleur wrote:
>make sure that when you buy GTU, it's in the lower 20% or at least lower 50% of the historical premium/discount data.
>
How do you find it? Is there a site with that type of data?
http://www.cefconnect.com/Details/Summa ... ticker=GTU (the "Pricing History" tab)
No, I mean is there a site that will tell me what percentile the current discount/premium is at -- for lots of ETFs in general.
ETFs in general have very small discounts/premiums. The cefconnect site has data for most (all?) closed end funds available in the US. Like I said, the discount/premium is shown on the "Pricing history" tab.