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Brinker - Bob Brinker's Asset Allocation Advice from May
6, 2012 Moneytalk Show
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Moneytalk Show Review Bob Brinker's Stock Market Update for 2012 May 6, 2012 |
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| May
6, 2012 Newsletter Excerpts - Editorial
Comment ("EC") by David Korn: Bob Brinker Fan Club Home Page - Bob Brinker's Asset Allocation History |
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STOCK MARKET ALLOCATION Caller: This caller and his spouse are 75 years old and their asset allocation has only 14% in stocks, the remainder in bonds and cash. Bob suggested to the caller that 14% was a little “light” and was a very small number. At age 75, you are going to be a balanced investor (meaning generally splitting your portfolio between stocks and bonds). In a balanced portfolio, Bob said he would use a bottom number of 30% in the equity market. Bob specifically said that as of May 2012, if he were in their shoes, he would have 30% of their portfolio in the equity market and you could easily do that by including a balanced fund. Kirk Here: This is a HUGE change for Brinker. I remember a caller to his show near the 2007 bull market highs before the last two bear markets was in Brinker's "Balanced" Model Portfolio #3 which was 2/3rds in equities. The caller asked Bob if they should re-balance this portfolio back to 50% equities and 50% fixed and Brinker was adamant that this was not his advice. This could be a good "contrarian indicator" that permabull Brinker is now far less bullish on stocks then he was at the peak in 2007. For more, read Bob noted that Vanguard has a fund called the Vanguard Balanced Fund that is a simple and low cost way to include that kind of thing in your portfolio. EC (David Korn): : A couple of things here. First, when Bob is bullish on the market (as he clearly is these days), he is much more comfortable recommending higher percentages of equities in a portfolio. Recently, Bob referenced a range of 30% to 70% stocks for someone in the “balanced” phase of their investment years. The fact that Bob recommended to a 75-year old couple that they increase their equity position by over 50% (from 14% to 30%), reflects his confidence in the stock market at his point in my opinion. He has also recently said he was comfortable with a person a little younger, but still in their retirement years, having 65% of their portfolio in stocks at this time. |
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EC: The Vanguard Balanced Index Fund (Ticker: VBINX) invests about 60% in stocks and 40% in bonds with an expense ratio of 0.24%. As far as I know, Bob doesn’t currently recommend this fund in his Model Portfolios. I was a little surprised that he recommended it to this caller, as if the caller wanted to increase his stock holdings, he could simply add some of the Vanguard Total Stock Market Index Fund or the S&P 500 Fund. Nothing wrong with the Vanguard Balanced Index Fund though. It is pretty straightforward way to create a balanced portfolio without getting fancy. Kirk Here: There is a cheaper
and easier way to add equities to your portfolio.
Without moving money to Vanguard or paying a broker to
buy Vanguard funds, you can simply use the money in
fixed income you wish to allocate to equities to buy VTI
which is Vanguard's Total Stock Market ETF.
The annual expense ratio is ONLY 0.06%! If
you are happy with your fixed income in CDs and other
fixed investments with NO annual expenses, then why pay
Vanguard or anyone else a fee to manage fixed
income? Pay them only for the money in VTI which
is an industry low. You can buy VTI at any
discount broker, usually for a small commission.
If you move enough money to some brokers, such as
Fidelity, then they give you free trades so you can
actually buy the fund for commission free!
Overview from Vanguard:
"Product Summary: Invests in more than 3,000 stocks
representative of the whole U.S. market. Goal is
to keep pace with U.S. stock market returns. Offers high
potential for investment growth; share value typically
rises and falls more sharply than that of funds holding
bonds. More appropriate for long-term goals where
your money’s growth is essential."
VTI - Vanguard Total Stock Market ETF
Top of page
Kirk Here: My explore
portfolio is off to a great start! With 2/3rds
in equities and 1/3 in fixed income it is Up 11.3%
YTD as of 3/31/12!!! The DJIA is up
8.1%! What a great start to 2012!!!
Long Term Results that Speak for
Themselves
Since 9/30/98 inception, "Kirk's Newsletter Explore Portfolio" is UP 390% vs. the S&P500 UP only 51% vs. NASDAQ UP only 57% (All through 12/31/11) Subscribe NOW and get the May 2012 Issue for FREE! ! (Your 1 year, 12 issue subscription will start with next month's issue.) (More Info, Testimonials & Portfolio Returns) Kirk Here: David and I are very proud of our performance for "The Retirement Advisor:" Note how our "most conservative portfolio, with zero stock market exposure, made money every year. The Brinkers can's say that about ANY of their "income portfolios" in either of their two newsletters. The Retirement Advisor
Portfolio Performance By Year Through December 31,
2011
CLICK HERE to download a FREE issue of "The Retirement Advisor."
Website for more information and annual Performance Data If you would like a free sample of David's complete Newsletter and his "Retirement Advisor" newsletter, then click this link to send an email request and please tell us a bit about yourself too. Return to: Bob Brinker Fan Club Home Page - Top of Page If you want updates
on what Brinker is saying on Moneytalk delivered
to your email box, often within 24 hours after
Sunday's show, then send us a note at TalkAboutMoney@gmail.com
and ask to get on our mailing list.
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