Hi everyone,
I have been reading the forum and thinking about a number of things, including aiming for simplicity and making a part of the portfolio inflation-protected using TIPS.
I realize my bond portion is way too complicated and I would like to work on restructuring it while also introducing a TIPS component.
Currently I have:
BIV 70.37%
PONAX 9.63%
VCIT 11.17%
TLT 4.32%
TMF 2.83%
SCYB 1.67%
(note: these percentages are % of just the bond portion, not the entire portfolio)
There are reasons behind why this happened. To make a long story short, I started with just BIV and PONAX but then added others for various reasons but mostly frustration with low returns. In 2022 I started buying VCIT in an effort to reduce overall treasuries exposure and boost returns.
SCYB is miniscule as I stopped buying it after getting valuable advice and an explanation of how it works here on the forum.
I would like to revamp this and structure the bond portion as follows:
50% Corporate investment-grade / 25% Treasuries / 25% TIPS.
It's going to take some math 'cause BIV is 55/45 Gov't/corporate and PONAX is also a mix (still trying to figure how much gov't vs corp this one has) so I would have to calculate the amount to be directed towards TIPS and VCIT.
I did not have any inflation protection before, so basically this will introduce inflation protection for 25% of the bond portion. I am still learning about TIPS and trying to figure out which ones to buy (getting familiar with tipsladder.com) but I'll target the first year I *think* I'll start drawing from the portfolio, so perhaps a TIPS ladder starting about 15 years from now and all the way to 2054.
This post is not about that though, but rather the idea of revamping the bond portion to 50% Corporate investment-grade / 25% Treasuries / 25% TIPS.
I know there is the issue with potential volatility of VCIT but I think I am ok with it 'cause I don't really plan to sell it, just live off the interest someday. And those investment-grade bonds almost never default.
I am pretty conservative, overall allocation right now is 59/41 stock/bond with the bond portion increasing by 1% every year.
Any advice (or even a confirmation that this is a sound plan) would be greatly appreciated.
Thanks!
I have been reading the forum and thinking about a number of things, including aiming for simplicity and making a part of the portfolio inflation-protected using TIPS.
I realize my bond portion is way too complicated and I would like to work on restructuring it while also introducing a TIPS component.
Currently I have:
BIV 70.37%
PONAX 9.63%
VCIT 11.17%
TLT 4.32%
TMF 2.83%
SCYB 1.67%
(note: these percentages are % of just the bond portion, not the entire portfolio)
There are reasons behind why this happened. To make a long story short, I started with just BIV and PONAX but then added others for various reasons but mostly frustration with low returns. In 2022 I started buying VCIT in an effort to reduce overall treasuries exposure and boost returns.
SCYB is miniscule as I stopped buying it after getting valuable advice and an explanation of how it works here on the forum.
I would like to revamp this and structure the bond portion as follows:
50% Corporate investment-grade / 25% Treasuries / 25% TIPS.
It's going to take some math 'cause BIV is 55/45 Gov't/corporate and PONAX is also a mix (still trying to figure how much gov't vs corp this one has) so I would have to calculate the amount to be directed towards TIPS and VCIT.
I did not have any inflation protection before, so basically this will introduce inflation protection for 25% of the bond portion. I am still learning about TIPS and trying to figure out which ones to buy (getting familiar with tipsladder.com) but I'll target the first year I *think* I'll start drawing from the portfolio, so perhaps a TIPS ladder starting about 15 years from now and all the way to 2054.
This post is not about that though, but rather the idea of revamping the bond portion to 50% Corporate investment-grade / 25% Treasuries / 25% TIPS.
I know there is the issue with potential volatility of VCIT but I think I am ok with it 'cause I don't really plan to sell it, just live off the interest someday. And those investment-grade bonds almost never default.
I am pretty conservative, overall allocation right now is 59/41 stock/bond with the bond portion increasing by 1% every year.
Any advice (or even a confirmation that this is a sound plan) would be greatly appreciated.
Thanks!
Statistics: Posted by Alex GR — Mon Sep 09, 2024 1:14 pm — Replies 1 — Views 203