Post New

I have been using 4 VL screens from the VL Rankings posted on the Board for last few years. The screens have done reasonably well but I have not been able to consistently beat the S&P500. I am now reaching retirement age and with the possibility that something catastrophic may happen to me, my wife who only understands Index funds, should be able to manage the accounts. With the above facts, the conclusion I have reached is that slowly over next couple of months I need to move all the funds invested in screens to RSP.

What would be a good strategy to transition from the screens to RSP. With the markets so exuberant, is this a good time to liquidate my screens and move the money to RSP? Or do it stepwise with a fixed amount every 2 weeks or monthly?
Would appreciate any advice and help.
Thanks,
AG

If you’ve already decided on your strategy, don’t fret over the implementation details. Whether you sell now or wait two months or create some complicated strategy will make no difference in the long run.

If this is a taxable account and you have significant realized gains coming, you’ll want to think about the tax consequences. Maybe wait with all or part of it until January.

Otherwise, I would just rip the bandaid. Do it now and you’ll have a much more relaxed holiday season.

Elan

Yup, if you haven't been heavily weighted to the top handful of S&P500 stocks in the last few years you have not beat the SPY.


That's really a couple of questions.

Q1) What directions to give to a spouse that is not particularly interested in doing active investing.
Or just do it now, before need.

Q2) How to transition from current holdings to a fund.


1: Look closely at the Vanguard LifeStrategy Funds.
Perhaps VSMGX (LifeStrategy Moderate Growth Fund) or
VASGX (LifeStrategy Growth Fund)

Totally hands off, and much easier to justify than RSP.

FWIW, this was the after-me directions I printed out for my wife. VASGX, so she would not have to try to decide.




2: Money in tax-advantaged account: Just move it right away.
Money in taxable accounts:
Holdings with short-term gains: keep until the gains will be long term.
Holdings with a loss: move right away.
Holdings with long-term capital gains, move right away.

Most here agree that due to the high valuations, the central expectation for index returns over the next long period is low.
I have to say that this gives me hesitation on parking lots of $ into an index at the moment.
But the trouble is, one needs some alternative that might do better and that's a tall order.

A question would be whether BRK is a better choice over longer periods like 10 years or more.


Mark

Given that the motive is family, I'm not sure I'd do anything especially protracted. There will almost certainly be better "buying opportunities" in the future, but good buying opportunities are usually attended by lots of pessimism, so if you're not sure you'd be willing to pull the trigger when everybody is telling you not to, I'd just go ahead and get it over with. I wouldn't bother with spreading out purchases from here. There's no reason to think the average price you pay will be especially better.

I will put in a plug, though, for a fund that I chose some years ago as a long-term holding, in lieu of RSP: Invesco's "growth at a reasonable price" [GARP} ETF, SPGP.

"The Invesco S&P 500 GARP ETF tracks an index that targets growth at a reasonable price. The index selects the 75 growth stocks within the S&P 500 that exhibit quality characteristics and have attractive valuations. Growth is measured as three year earnings per share, sales per share. Quality and value are assessed by looking at leverage, return on equity, and earnings to price."

https://www.invesco.com/us/en/financial-products/e...

Good luck,

Baltassar

Well, well, well, now I have another take.

Backtest of these 5:
SPGP
BRK-B
RSP
FCNTX
VASGX

https://testfol.io/?s=4iqCmoln6M3 (check the Logarithmic scale box)

Limited by SPGP inception 6/16/2011
RSP not so hot. Lower return but same volatility.
SPGP about the same as BRK, but worse Max DrawDown.

Remove SPGP so limited by RSP inception 4/30/2003.
RSP & BRK about the same.

Sadly, the only thing which recommends VASGX is the slightly lower volatility.

Remove RSP, we can go back to 5/9/1996.
Y'know, I'd still go with FCNTX.
Or BRK. But I'm concerned that BRK may be too big these days.

EVERYTHING got clobbered in the 2008/2009 crunch. All lost 50%.
RSP lost 60%. Ugh.

Backtest of these 5:
SPGP
BRK-B
RSP
FCNTX
VASGX

First time anyone suggested a mutual fund on this board.

That said my long term retirement holding since 2005 was 40% SP500 plus 60% Contra fund and the contra fund had/has the better return.

https://fundresearch.fidelity.com/mutual-funds/sum...

GD_

FCNTX Fidelity’s Contra fund has indeed done well. Very few funds have outperformed the SP500.
Have you noticed their top holdings? Almost looks like they are running the mungo’s ROE screen
with the exception of BRK which he probably wouldn't argue with.

Meta Platforms Inc Class A	12.1%
NVIDIA Corp			9.50%
Berkshire Hathaway Inc Class A	6.30%
Amazon.com Inc			6.10%
Microsoft Corp			4.30%
Alphabet Inc Class A		4.10%
Apple Inc			2.60%
Alphabet Inc Class C		2.60%
Amphenol Corp Class A		2.50%
Eli Lilly & Co			2.10%
  

IMO, Beating the S&P is overrated. You hear about returns but NEVER the level of risk.

Just look at the top holdings. Until you get to AVGO, it's the M7.

* NVDA
* AAPL
* GOOG
* GOOGL
* MSFT
* AMZN
* META
* TSLA
* AVGO
* BRK.B

https://stockanalysis.com/list/sp-500-stocks/

The next holdings aren't as tech-heavy, but is THAT a portfolio someone retired should be having? Or, rather, how many more years of expected lifespan -- and medical costs -- are we looking at? I do advocate owning higher-risk tech stocks even at retirement, but not if they're their only stocks. I'm also fine with owning these stocks if you can draw on other members of your family in case of an emergency or have a big wad of cash set aside for emergencies. Myself, I'm 60 and have been buying ROE_Cash, which overlaps with the top 8 of these stocks, and a dividend screen, principally based on cash payout ratios.

Offhand, indexing plus something more conservative (eg. laddered treasury bonds) would be simple and conservative. Returns would not be as high as the S&P, but neither would be the risk. You could always consult your broker if they can refer you to an expert in health costs. :/

I do advocate owning higher-risk tech stocks ...

Returns would not be as high as the S&P, but neither would be the risk.
...

Volatility is not risk.

Many people think a highly volatile stock or screen is high risk, but it is not.

For an extreme example, look at TQQQ. Volatile as all get out.

$10,000 at inception grew to $2,400,000 today.

$10,000 in SPY at the same time grew to $83,000.

https://testfol.io/?s=2IKrLHISibP

Not that I would recommend putting all your money into TQQQ.

Post New

Mechanical Investing FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.