Home RetireMentors Investing 6 steps to the ultimate retirement portfolio - step one

Here is the article.

To be described as "ultimate," a retirement portfolio strategy had better be mighty good. This one is. It has a long historical record of "beating the market" by outperforming the Standard & Poor's 500 Index SPX, +1.05%  — with less risk the 15.5% standard deviation of the index.

Here's the shortest description I can give you: In a nutshell, 60% of this portfolio is a sophisticated combination of equity funds with massive world-wide diversification that includes value stocks, small-company stocks and real-estate funds added to a traditional large-cap growth stock portfolio. The other 40% is made up of short-term to intermediate-term government bonds.

Step One: The basics

The first chart has only two slices, 60% in for stocks (S&P 500 500 index) and 40% in bonds (Barclay's Government Credit Index). This is a traditional industry standard, approximating the way that pension funds, insurance companies and other large institutional investors allocate their assets. The stocks provide long-term growth, while the bonds add stability and income.

Let's use this as our benchmark. For 44 years, from January 1970 through December 2013, this portfolio would have produced a compound annual return of 8.8%. Not bad, especially considering this period included four of the most severe bear markets of the past 100 years.

Allocated this way, an initial investment of $100,000 in 1970 grew to over $4 million by the end of 2013.

Most of the details of this strategy involve the 60% stock side of the pie, and that's the main focus of this article. But the bond part is very important.

Actionable Items

It is challenge part to prepare $100,000 dollars to start a portfolio. I am working on my Canada portfolio Victoria using three ETFs, $37,000 dollars portfolio, using equity 60%, bond 40%, similar idea. 

Deviation is something I have to learn more carefully. When I make decision, I have to learn deviation is normal, and bear market is normal as well. 

Opinion: A half a percent that can change your retirement

Here is the link.

Richo takes on Ash Barty

Here is the video I like to watch a few times.

Being a tennis fan - French open Roland Garros Champion Ashleigh Barty

June 8, 2019

Introduction

It is my small task to post one thing on Facebook.com. I like to show how good I am as a tennis fan of French open champion Ashleigh Barty. I was busy and I did not post anything, last two posts one of them is being a fan of Miami Open March 2019 - Ashleigh Barty.

Being a tennis fan

It is tough to be a tennis fan, since I have to spend time to learn new champion each time. I look up height, how to train, where those coaches help her.

Here is the video I like to watch.

Ashleigh Barty | My Story

Here is 10 minutes interview.

2:00

No matter how good you are, you always can get up to level...?

Looking for action? Try large-cap value stocks

Here is the link.

10 Things You Should Know About Large Cap Value

Here is the podcast link page.

Is one of Wall Street's biggest bulls getting bearish on market?

Here is the link.

Case study: I missed the work today since I thought it is Saturday

June 7, 2019

Introduction

It is the first time I mistakely think that today is Saturday, I did not call the office since I thought that it is Saturday. Until 5:00 PM, my roommate came home and told me that I came home early. She told me it is Friday.

Case study

I like to write down how many facts contributes this mistake in my judgement on this Friday not Saturday instance.

It was too busy a day yesterday. I was too busy to handle and then the mistake happened.

Time line:

Thursday
1. 7:00 AM - 8:00 PM place orders on Questrade.com, and then place two more orders on Ameritrade.com
2. 9:00 AM - 6:30 PM go to work at 9:00 AM, get home around 6:20
3. 6:20 PM - 6:40 PM surf internet and read news on facebook.com
7. 7:00 PM - 7:40 PM Scotia bank appointment with mutual fund manager
8. 8:00 PM - 8:40 PM Tennis court on Burnaby central park
9. 9:00 PM - 9:50 PM Talked to ex-landlord Chinese, a mother about her son and math tutor
10. 10:00 PM - 11:00 PM mock interview on interviewing.io
11. Donate money on GoFundMe.com, share the update on wechat.com sibling group

Friday
1. 7:00 PM - get up, reply wechat message,  at least 20 minutes
2. It is Saturday, somehow I made wrong judgement

1. Get up 7:00 am Thursday

Before I went to work yesterday, I chose the market price and bought $30,000 Canada dollar for my portfolio on questrade.com, and also purchased over $10,000 for my IRA portfolio on Ameritrade.com.

2. I had an appointment with Scotia bank mutual fund manager yesterday, 7:00 PM. I left office around 5:20 PM. I planned to purchase Scotia Canada dollar index fund, $3,000 dollars, every month $120 dollars;

3. I saw goFundMe on facebook.com, my friend in Florida and her husband's heart surgery and diabetic disease before 7:00 PM;

4. I went to play tennis after Scotia bank appointment. I talked to friends on the court in central park about investing and health;

5. I talked to my friend over the phone over 30 minutes from 9:10 PM to 9:50 PM;

6. I had a mock interview from 10:00 PM - 11:00 PM;

7. After 11:00 PM, I was busy with donation to the friend on GoFundMe.com; I shared the story on wechat sibling wechat group;

8. I got up too early around 7:00 AM, I saw two responses from wechat sibling groups. I spend more than 20 minutes to respond.

Actionable Item

I decided to quit my Sibling wechat group, so that I can stay away from relatives, and focus on the life and work in Vancouver area.

One top strategist warns a correction could be coming if no US-China trade deal is reached

Here is the link.

Here are the big losers traders are still buying after earnings

Here is the link.

Leetcode 687: longest univalue path - C# various topics covered in practice from 2018 to 2019

Here is my post on leetcode.com.

June 2019

It is an easy level tree algorithm. I got advice to work on easy level algorithm on Leetcode.com first in June 2018. So I started to work on all easy level tree algorithms on Leetcode.com in August 2018, I found out that my first practice was hard, and my idea did not lead to a working solution. After that, I asked the algorithm on interviewing.io as an interviewer, I continued to learn from every interviewee, and I like to put together a list of topics I learn through the experience. Here are the blogs I wrote based on my mock interview experience using this algorithm from August 2018 to June 2019. I will add some of practices here for me to master the tree algorithm.

August, 2018

My failed first practice, here is the link.

Recursive function design: return longest path from root to leaf instead
My first recursive solution, here is the link.

Case study two examples
Sept. 2018
Longest path cross the root, two case studies on example trees, the link is here.

Recursive function design: return cross root longest univalue path directly
Nov., 2018
One recursive function to solve the problem, here is the link.

Feb. 2019

check with parent node's value instead of check child's node - inverse check
C# post order - check with parent value with step by step illustration, here is the link.

Count nodes instead of edges
C# post order and count nodes instead of edges

Common mistakes in mock interviews:

1. Make sure that every node is traversed, bottom up, post order traversal is most commonly used;
2. Common mistake - visit left or right only if the root value equals to its left(right) child's value
   So the whole tree will not be traversed properly.
3. Make sure that there is a place to increment one, otherwise the value will always be zero; explain to the interviewer, that one is related to which edge or node in example tree.

An experienced interviewer will check you a few things:

1. post order traversal or preorder, bottom up or top down, what is your choice?
2. How do you design recursive function, return directly asked or return indirectly?
3. Count node or count edge?
4. Do you check children node with two cases to discuss, or compare to parent node only one case?
5. Argue the code will be correct.
   A. Increment one check, relate to example tree edge or node clearly.
   B. Make sure that all nodes will be traversed. Do not put conditional check for left or right child node's value to apply traverse;
6. Can you explain the algorithm very well? At least you warm up the traversal with an example, and then explain every node what will happen. Do not jump to coding for only solution you memorize. Click here to see how I explain the algorithm in case study.

Show case

I like to share my experience how I master a tree algorithm to work with over 50 most talent people in the world, every time 45 minutes discussion, and a lot of follow-up practice after mock interview as an interviewer. I do believe that it is possible for me to master a tree algorithm. I took time from August 2018 to June 2019 after my first failure practice dated on August 11, 2018.

Right now, I move on another tree algorithm called lowest common ancestor and ask the algorithm in mock interview on interviewing.io almost every time.

Savita Subramanian

I like to watch all videos and watch the presentation by Savita Subramanian.

Here is Google search result.

10 things every investor should know about asset classes

Here is the link.

Case study: First portfolio in questrade.com - Victoria

June 4, 2019

Introduction

It is time for me to set up a portfolio on questrade.com. I have to push myself to learn and also take some risk to build my own portfolio.

Case study

The portfolio I like to set up is the following:

In Canadian dollars
1. $5000 VBAL - ETF, balanced fund, 0.22% MER

$39000 Canadian dollars, 30% VFV, 30% VDU, 40% VAB
2. VFV   $11700, 30%
3. VDU  $11700, 30%
4. VAB   $15600, 40%

I also need to set up orders, and I like to get into the market as soon as possible.

Here are snapshot of two order I placed tonight.

Next order is here:

I like to name this portfolio a beautiful name using one of Vancouver island names. I like to call it Victoria portfolio.

Follow up 

June 6, 2019

I had to pay extra amount in order to get into the market, 600 share pay extra 0.50 cents each share, 140 share pay extra 1 dollar each share. Those two I paid extra few hundred dollars to get into market.

Here are my purchases.

I need to purchase VDU ETF in short future. So I can build a portfolio balanced 60% stock, 40% bond.

Scotia Canadian Index Fund - Series A

Here is the link.

I like to make a purchase plan for my RRSP, initial deposit $3000 dollars, and then $100 every month.

I like to contribute Canada economy. I also notice that MER fee is also lower compared to other Scotia mutual fund.

Scotia Canadian Equity Fund - Series A

Here is the link.

Why Rebalancing Could Be a Huge Mistake

Here is the article to read. Here is the link of podcast.

This lets you set an overall risk profile for your portfolio—for example 60% equities and 40% bonds—and maintain that profile through the ups and downs of the stock market. You know the drill: After a big decline in stocks, buy more (by selling bonds) at low prices; after a big run-up in prices, sell some stocks (when prices are high) and buy bonds.

This is a good strategy. If you didn’t do this, over time you would most likely wind up with a portfolio that’s increasingly heavy on stocks—perhaps 70% when you wanted 60%. That would leave you with a higher risk profile.

So here’s my advice, in three parts.

First, all investors should continue to rebalance between stocks and bonds. This is a legitimate tactic for controlling risk.

Second, young investors probably will do better over the long haul if they don’t rebalance among equity asset classes. Remember the $6.6 million (no rebalancing) versus $4.2 million (annual rebalancing) over the past 50 calendar years.

Third, older investors, certainly including retirees, should be more conservative and not let any single asset class get too far away from its target percentage. For these investors, rebalancing is probably a good idea. It doesn’t have to happen every year, but it should happen at least every four or five years.

50 Facts Every Investor Should Know

Here is the link.

by Paul Merriman

Support information to accompany Video and Audio-Only recordings of “50 Facts Every Investor Should Know”

#1 – American Funds graph for the long-term addition of .5% and 1%: http://cdn.source-media-micro.psdops.com/20/bb/948ea1ca45b3a48841a02d763d14/why-active-investing-matters.pdf

This article discusses the impact of adding .5% a year over the lifetime of saving, investing and living off the money  https://paulmerriman.com/opinion-a-half-percent-can-change-retirement/

#2 – 10 can’t-fail lessons of diversification https://paulmerriman.com/10-cant-fail-lessons-diversification/

#3 – 10 things every investor should know about asset classes  https://paulmerriman.com/10-things-every-investor-should-know-about-asset-classes/

#5 – Understanding performance: The S&P 500 Index https://paulmerriman.com/understanding-performance-sp-500-index/

#6 – Looking for action? Try large cap value stocks

https://paulmerriman.com/looking-action-try-large-cap-value-stocks/

#7 – How to make money with small cap stocks https://paulmerriman.com/make-money-small-cap-stocks/

#8 – Three articles on investing in small cap value

This four-fund combo wallops the S&P 500
https://paulmerriman.com/?s=4+fund+wallops

When it pays to go all-in on small cap value

https://paulmerriman.com/pays-go-small-cap-value/

Small-cap value is the gold ring of investing

https://paulmerriman.com/small-cap-value-gold-ring-investing/

#9 – Why REITs belong in your retirement portfolio  https://paulmerriman.com/reits-belong-retirement-portfolio/

10 things you need to know about REITs

https://paulmerriman.com/10-things-need-know-reits/

#10 – 6 reasons you should invest internationally

 https://paulmerriman.com/six-reasons-invest-internationally/

It’s a small world after all: International small cap value

https://paulmerriman.com/small-world-international-small-cap-value/

Own the best companies in the world

https://paulmerriman.com/best-companies-world/

Foreign big cap big cap value stocks outshine U.S. counterparts

https://paulmerriman.com/foreign-big-cap-value-stocks-outshine-u-s-counterparts/

How international small-caps spice up a retirement portfolio

https://paulmerriman.com/international-small-caps-spice-retirement-portfolio/

#11 – Tap into emerging profits from emerging markets https://paulmerriman.com/tap-emerging-profits-emerging-markets/

#12 – The ultimate buy and hold strategy

https://paulmerriman.com/ultimate-buy-hold-strategy-2016/

#13 – Why you should consider an all-value portfolio http://www.marketwatch.com/story/why-you-should-consider-an-all-value-portfolio-2017-03-29

Fine tuning your asset allocation 2017

https://paulmerriman.com/fine-tuning-tables-2017/

#15 – 22 things you should know about bear markets https://paulmerriman.com/22-things-know-bear-markets/

#16 –30 reasons to fall in love with index funds

https://paulmerriman.com/30-reasons-fall-love-index-funds/

#20 – 4 things you might know about index funds

https://paulmerriman.com/4-things-might-not-know-index-funds/

10 ways index funds can save your retirement

https://paulmerriman.com/10-ways-index-funds-can-save-retirement/?pfstyle=wp

13 ways index mutual funds and ETFs rule

https://paulmerriman.com/13-reasons-index-mutual-funds-etfs-rule/

#25 – How to double your target date funds return in a single move 

https://paulmerriman.com/double-target-date-retirement-funds-return-single-move/

#29 – Inflation turns every investor into a loser

https://paulmerriman.com/inflation-turns-every-investor-loser/

#30 – Get smart or get screwed:  How to select the best and get the most out of your financial advisor. This free e-book includes 80 reasons not to do business with a commission-based advisor

https://paulmerriman.com/2014-new-site/wp-content/uploads/2013/03/get-smart-or-get-screwed-how-to-select-the-best-and-get-the-most-from-your-financial-advisor1.pdf

#31 – Who should retirement investors trust?

 https://paulmerriman.com/who-retirement-investors-trust/

Should investors trust Wall Steet, Main Street or University Street?

http://www.marketwatch.com/story/should-investors-trust-wall-street-main-street-or-university-street-2016-03-16

#33 – 6 things you should know about rebalancing

https://paulmerriman.com/6-things-you-should-know-about-rebalancing/

Why rebalancing could be a huge mistake

https://paulmerriman.com/why-rebalancing-huge-mistake/

#34 – How retirement investors hurt themselves

http://www.marketwatch.com/story/how-retirement-investors-hurt-themselves-2014-05-07

#36 – The social and psychological risks of investing

https://paulmerriman.com/emotional-psychological-risks-investing/

#43 – Dieters can teach investors

https://paulmerriman.com/dieters-can-teach-investors/

#45 – Sample of work by recommended writers:

Larry Swedroe 

http://www.etf.com/contributors/larry-swedroe

Allan Roth

http://blog.aarp.org/2015/11/09/play-the-odds-when-investing/

Jason Zweig

http://jasonzweig.com/and-now-for-something-on-index-funds/

Mark Hebener

https://www.ifa.com/articles/

#46 – Don’t discount the impact of luck on your portfolio

https://paulmerriman.com/dont-discount-impact-luck-portfolio/

#50 – The best investment advice ever

https://paulmerriman.com/the-best-investment-advice-ever/

Investing Myths

Here is the link. 

Paul  discusses 15 investment myths that can cost investors a lot of money, with Ken Roberts, host of ‘Ken’s Bulls and Bears’,  The myths include:

1.  Investing is just another form of gambling.
2.  You don’t lose money if you don’t sell.
3.  You should sell your losers and let your winners run.
4.  Almost nobody beats the S&P 500.
5.  Morningstar 5-star funds are the best in the industry.
6.  I’ll have plenty of time to save for retirement if I start by the time I’m 40.
7.  A million dollars is enough to retire.
8.  You don’t need international funds.
9.  Market timing is more risky than buy and hold.
10.  Market timing keeps investors from losing money in a bear market.
11.  Ten years of performance is a meaningful track record.
12.  A mutual fund manager will take steps to protect against a bear market.
13.  Stock brokers recommend the best investments they know.
14.  Brokers and investment advisors are a big waste of money.

Moving to action: Twelve numbers to change your life excerpted from "Financial Fitness Forever"

Here is the link.


It has taken a lot of work to get to that number. But now we can see that you have a shot at meeting your goal if you invest prudently and keep your expenses under control.

Nobody can tell you what investment returns will be over the next 10 years, so there is no guarantee of anything. You’ll find a table of long-term returns in Appendix B, part of an article that looks at levels of risk and return going back to 1970 for portfolios with various combinations of stocks and bonds. Though this table is only a very approximate guide to the future, I think it encouraging in your situation.

From 1970 through 2010, a relatively low-risk portfolio with 60 percent in properly diversified stock funds and 40 percent in bond funds achieved an annualized return of 10.6 percent – definitely higher than the 8.1 percent you need

Even if we assume that over the next 12 years such a portfolio would achieve two full percentage points less than that, or 8.6 percent, that would still be above what you need. Having 60 percent of your portfolio in stock funds unquestionably subjects you to some risk, and you should carefully consider this. In the 41 years we just examined, that 60 percent equity portfolio had a worst-12-months loss of 33.5 percent. That would be a significant setback for you, and if it occurred just before or just after you retired, you would have to modify your expectations.

Over the last four decades, if you had invested 40 percent of your money in a welldiversified group of stock funds and the other 60 percent in bond funds, your greatest 12-month loss would have been 23.1 percent. A 40 percent equity portfolio represents a much more conservative approach than you are now taking. And the good news is that, over that same period, your annualized return in such a portfolio would have been 9.4 percent – higher than you need.

Is this the beginning of the end for big tech as we know it?

Here is the link.

Habits and Attitudes of Successful Investors

Here is the link.

How To Invest In Today’s Market

Here is the link.

Paul Merriman Sound Investing For Every Stage of Life

Here is the website.

I like the pod cast, and the speech is slow and easy for me to follow.

Paul Merriman

Paul A. Merriman is committed to educating people of all ages to get the most from their retirement investments. Founder of Merriman LLC, an investment advisory firm in Seattle, WA. he is author of numerous books on investing for retirement: “Financial Fitness Forever,” “Live It Up Without Outliving Your Money,” and the 2012 “How To Invest” series: “First Time Investor: Grow and Protect Your Money” “Get Smart or Get Screwed: How to Select the Best and Get the Most from Your Financial Advisor” and “101 Investment Decisions Guaranteed to Change Your Financial Future“. The series is available for free immediate download at his website. Paul’s weekly podcast, “Sound Investing,” was recognized by Money magazine as the best Money Podcast in 2008. He also writes, with Rich Buck, weekly articles for MarketWatch‘s “Retirementor” column. His mutual fund and ETF portfolio and 401(k) plan recommendations are also available free at paulmerriman.com.

10 more things you need to know about the Ultimate Buy and Hold Strategy

Here is the podcast web page.

Case study: Last IRA CD transfer from New York community bank to Ameritrade.com

June 2, 2019

Introduction

It is time for me to file an external transfer from NYCB bank to Ameritrade.com. I got the statement back in 2007 and then I found my account number. Last month Ameritrade tried to transfer the account but the number was not correct, I got the statement from NYCB, somehow one of the account numbers is not correct.

Case study

I need to push myself to get organized, and also push myself to learn more about correction and volatility.

I like to close another account and say good bye to NYCB. I still remembered that I had so many memory with Amtrust bank branch in the city of Boca Raton, later the bank is changed to NYCB.

Vanguard's economic and investment outlook - 2016

I like to spend 30 minutes to read the outlook - 2016 in next week. Here is the link.