Sheldon Cooper?
(Sorry, I couldn't resist)
Mine's in a tab of my AA spreadsheet on google docs. Not the best for formatting, but keeps the decisions and the AA target percentages in the same place.
It's not as long as other people's, no call out to how *much* we should be investing, but my wife and I are both frugal MMM-types, so we save a lot and all excess funds past the EF or anything goal-based (none right now, but probably a car in the medium future) go into investments governed by the policy.
(https://i.imgur.com/UhNYDaL.png)
Sheldon Cooper?
(Sorry, I couldn't resist)
Sorry, I didn't mean for it to come off that way.
It was a comprise between my misgivings about needing international at all, conventional wisdom, and my wife's input. After reading JL Collins's article on international in addition the comments by Bogle and Buffet that are often thrown about, I had convinced myself to ditch international completely. Then I thought back to diversification and The Intelligent Asset Allocator and how all the big firms' balanced funds have a large int'l chunk. So I swung back to thinking about weighting it by market-cap. When discussing with my wife (who generally takes a hands-off approach to our investments leaving it to me, but I give her the broad strokes), she fell more on the side of my original thoughts (no international). So we compromised and ended up where we are now :).Mine's in a tab of my AA spreadsheet on google docs. Not the best for formatting, but keeps the decisions and the AA target percentages in the same place.
It's not as long as other people's, no call out to how *much* we should be investing, but my wife and I are both frugal MMM-types, so we save a lot and all excess funds past the EF or anything goal-based (none right now, but probably a car in the medium future) go into investments governed by the policy.
(https://i.imgur.com/UhNYDaL.png)
I like that. Simple, and it meets your goals.
Out of curiosity, how did you decide on the 75%/25% split for international?
INVESTMENT ORDER OF FUNDINGThat $5,500 is impressive. Typo? I ask because there are income limits to funding IRAs with the TSP and if you're below those and still contributing $66K per year to an after-tax account, that's got to be like an 85% savings rate.
1. Fully fund traditional TSP = $18,500
2. Fund traditional IRA up to tax exemption limit ~$2,000
3. Fund Roth IRA with remainder ~$3,500
4. $5,500 per month to Vanguard after tax account ~$41,250
INVESTMENT ORDER OF FUNDINGThat $5,500 is impressive. Typo? I ask because there are income limits to funding IRAs with the TSP and if you're below those and still contributing $66K per year to an after-tax account, that's got to be like an 85% savings rate.
1. Fully fund traditional TSP = $18,500
2. Fund traditional IRA up to tax exemption limit ~$2,000
3. Fund Roth IRA with remainder ~$3,500
4. $5,500 per month to Vanguard after tax account ~$41,250
I am 100% equities and don't see that changing anytime soon. I'll hold through the upcoming down cycle(s), though there are some interesting articles about the CAPE index and q index that tempt me to convert large portions of my holdings to cash.
Well, I wouldn't touch that stuff -- you were going for the big money with those picks? Look at what Costco, Visa, and Toro did during that time period. Dropped and recovered in tandem with the SP500 though on a higher upswing. So my value went down and then came back. That's going to recur in my lifetime, and I know I'm not savvy enough to time it. I am, however, patient enough to wait it out.I am 100% equities and don't see that changing anytime soon. I'll hold through the upcoming down cycle(s), though there are some interesting articles about the CAPE index and q index that tempt me to convert large portions of my holdings to cash.Peruvian copper mines and Aircraft Leasing stocks lost ~70% of its value, I learned my risk tolerance wasn't really what I thought it was. While I didn't sell at the bottom, it wasn't far from it.
<..snip..>As a young investor, this is my main concern. It's also why I'm hoping there's a downturn soon, so I can learn more about myself. (The damage is limited, even if I were to sell at the lowest of low... then the impact relative to future earnings is quite minor. That's not my plan, I plan to keep forever, but I've heard of enough people selling low despite such a plan so I'm going to wait and see what happens in an actual downturn.)
I learned that risk tolerance is always lower than you think it is. If you think you might re-assess risk tolerance, it's a good idea to do it when the markets are doing well.
I fill the TSP and IRA buckets first, which takes about 3.5 months. After that, I switch to the after tax account for the remainder of the year. So it's 'only' about $40k into Vanguard.You should check me on this (and it may be different for uniformed folks), but the federal gov't matching program for civilians (5% of your salary) is split among the 26 pay periods and most of it happens only when you actually contribute, so if you max out of the TSP in the first 4 months, you lose out on the government's 4% matching (and get only the auto 1% matching) -- whereas you'd continue to get the entire 5% matching if you contributed throughout the 26 pay periods.
ETA: I'm uniformed, so a big chunk of my income is also exempt fro AGI. That helps too ;)
As a young investor, this is my main concern. It's also why I'm hoping there's a downturn soon, so I can learn more about myself. (The damage is limited, even if I were to sell at the lowest of low... then the impact relative to future earnings is quite minor. That's not my plan, I plan to keep forever, but I've heard of enough people selling low despite such a plan so I'm going to wait and see what happens in an actual downturn.)This is why I stay heavy in equities and just hold:
<..snip..>As a young investor, this is my main concern. It's also why I'm hoping there's a downturn soon, so I can learn more about myself. (The damage is limited, even if I were to sell at the lowest of low... then the impact relative to future earnings is quite minor. That's not my plan, I plan to keep forever, but I've heard of enough people selling low despite such a plan so I'm going to wait and see what happens in an actual downturn.)
I learned that risk tolerance is always lower than you think it is. If you think you might re-assess risk tolerance, it's a good idea to do it when the markets are doing well.
I fill the TSP and IRA buckets first, which takes about 3.5 months. After that, I switch to the after tax account for the remainder of the year. So it's 'only' about $40k into Vanguard.You should check me on this (and it may be different for uniformed folks), but the federal gov't matching program for civilians (5% of your salary) is split among the 26 pay periods and most of it happens only when you actually contribute, so if you max out of the TSP in the first 4 months, you lose out on the government's 4% matching (and get only the auto 1% matching) -- whereas you'd continue to get the entire 5% matching if you contributed throughout the 26 pay periods.
ETA: I'm uniformed, so a big chunk of my income is also exempt fro AGI. That helps too ;)
Regardless, nice job saving.
I'll hold through the upcoming down cycle(s), though there are some interesting articles about the CAPE index and q index that tempt me to convert large portions of my holdings to cash.care to share a cliff notes version of your findings?
care to share a cliff notes version of your findings?Not "findings," but here's the Shiller PE index:
Quote from: kenmoremmmcare to share a cliff notes version of your findings?Not "findings," but here's the Shiller PE index:
http://www.multpl.com/shiller-pe/
Here's the q ratio info:
https://www.advisorperspectives.com/dshort/updates/2018/09/05/the-q-ratio-and-market-valuation-august-update
They both tell us that the market is over-valued. But I think everyone knows that. However, no one knows (some may be better at predicting) whether this means the market is going to provide lower but still positive returns over the next 2-4 years (say 1-5%), crash within the next 3 years, or break historical trends and continue to rise at exceptionally good rates.
Am I tempted to sell all and sit patiently on the sidelines for a while? Of course. Will I hold the course and just wait it out, including any downturn? Most likely.
This is why I chose to split my excess cash flow 50/50 between mortgage paydown and market investing. I don't know what the stock market returns will be, but I'm fairly confident the 10 year returns from here will be less than 7%, particularly on a post-tax basis. Will they be greater than the 3.875% rate on my mortgage? I don't know, but the mortgage paydown is risk-free.