🪴 PAR Brain

Investment Policy Statement Portfolio

Mar 29, 20254 min read

Accounts:

IRA, Roth IRA, Inherited IRA and taxable brokerage account are at Schwab. A taxable brokerage account is at Vanguard. My HSA is at Fidelity. Savings account is at USAA.

Transfers/exchanges

We use Wise and Spartan FX to transfer dollars to euros from USAA to Millennium.

Invest in passively managed index funds for US stocks, U.S. Treasury bonds, and gold. Do not buy assets outside of these classes, including but not limited to actively managed funds, derivatives, derivatives-based funds, REITs, individual real estate investment properties, broad commodities funds, and individual stocks. Do not use leverage. Aim for lowest fees whenever possible.

Asset location

Try to allocate based on relative tax efficiency whenever possible. Do not hold gold in taxable space.

Asset allocation

Asset allocation should follow the simple formula of [age minus 20] for fixed income allocation. 5-10% of the portfolio should be allocated to gold at all times, via an index ETF tracking the spot price of gold bullion.

Current portfolio at age 58 is: VTI - global stock market - 30% VIOV - US small cap value - 30% VGLT - US government bond long term - 20% GLDM - gold - 10% DBMF - managed futures - 5% Cash - cash and/or short term US treasure - 5%

Any change to these assets or allocations will require a 3 month waiting period unless a fund is liquidated by the fund provider and requires immediate replacement.

Automate new contributions wherever possible. Invest all investable cash as soon as it becomes available. No Dollar Cost Averaging. No market timing.

Reinvest dividends ???

Rebalance strategy

Rebalance based on a threshold of 20% from desired check quarterly.

Rebalance visual

Buy Low, Sell High

Withdrawal strategy

Withdrawal rate of 4 - 4.5% done quarterly

Here is a video of how to adjust our withdrawal rate https://youtu.be/kPc8ng3sYB0?si=VsxC5tdNtM9fioXe

Using this sheet https://docs.google.com/spreadsheets/d/1eKInmsjjIEmYB59LWf15W90y6tOy6Hp-gwG28_Va6W4/edit

Use the CAPE as a long term adjustment for the

Ignore short-term noise. Don’t pay attention to headlines. Stay the course. Keep the long-term view.

Any change to this investment policy statement will require a 6 month waiting period.

Notes:

Boglehead New retirement IPS

Portfolio

Large Cap Growth 30% Small Cap Value 30% Long Term Government Bonds 20% Gold 15% Cash 5%

Future shift some portion of the gold to Managed Futures DBMF , kmlm

Withdrawal strategy

Base 4 -4.5% Annual adjusting CPI for eu

Rebalance strategy

Quarterly or is it % ?

https://www.kitces.com/blog/best-opportunistic-rebalancing-frequency-time-horizons-vs-tolerance-band-thresholds/

https://www.portfoliovisualizer.com/monte-carlo-simulation

Rebalance threshold: https://monevator.com/threshold-rebalancing/

27.5 % total stock 27.5% small cap value 30% mid to long is gov bonds 15% gold withdrawal rate, duration 5% safe , Over 30 years 4.6% , over 40 years 4.3. % , over 50 years

https://podcasts.apple.com/pt/podcast/risk-parity-radio/id1525099266?i=1000629810836

Advice from Hal: Thanks for sharing your detailed investment policy statement. I’d recommend considering visuals that illustrate your diversified portfolio, perhaps using symbols or icons representing each asset class. A visual breakdown of your asset allocation and transfer/exchange process could also be effective. Let me know if you have any specific imagery in mind or if you’d like me to come up with ideas based on these suggestions.

  1. Visual Breakdown:

    • Medium: Infographic
    • Subject: Colorful icons representing each asset class (VTI, VIOV, VGLT, GLDM, DBMF).
    • Colors: Reflect the characteristics of each class.
    • Background: Financial charts and graphs to convey the investment landscape.

  2. Asset Allocation Snapshot:

    • Medium: Digital Art
    • Subject: A pie chart divided into segments, each labeled with the corresponding asset and percentage.
    • Colors: Use a color scheme that resonates with financial stability.
    • Background: A subtle blend of market-related elements.

  3. Investment Journey:

    • Medium: Photo Collage
    • Subject: Images representing the journey of your investments (e.g., a globe for global market, vault for gold).
    • Colors: Harmonious tones conveying growth and stability.
    • Background: Blurred financial newspaper headlines to represent the long-term perspective.

  4. Rebalancing Act:

    • Medium: Graphical Representation
    • Subject: A seesaw with asset class symbols, depicting the rebalancing act.
    • Colors: Balanced tones to reflect the equilibrium.
    • Background: Gradual shifts in market landscapes.

Feel free to let me know if you’d like adjustments or if any of these concepts resonate with you!

Principles:

The three basic principles are (1) the Holy Grail Principle; (2) the Macro-Allocation Principle; and (3) the Simplicity Principle.

Risk parity podcast ep 7 principles

Macro-allocation principle

  1. Holy Grail Principle - find and combine the least correlated asset classes we can find
  2. Macro-allocation principle - 90% of your portfolio performance can be attributed to macro asset allocation
  3. Simplicity Principle - better off using the least number of assets. ”complexity is a cost, simplicity is an alpha.”

Graph View

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