Anyone else thinking of dumping their BNDX holdings?

[Deep Blue]

I’ve changed my asset allocation once in the past ten years. I introduced an allocation to UK gilts (via an index tracker) about a year ago.

This seems about the right frequency to make changes to me. Once or twice every few years if needed.

[ChapInTokyo]

...

I'll call BS. You don't have an asset allocation grid, and you haven't made your choices. You're just letting yourself be blown around by whatever the wind (the daily news) might be. Good luck with that, esp with this new US administration.

Choose an allocation, and stick with it for a year, or three.

Then re-evaluate and re-allocate. Don't be speculating three times a week on what you might or might not do based on fluff news articles.

As I've noted elsewhere on the forum when musing about my draw down phase portfolio allocation, my asset allocation was a clone of the Saison Vanguard Global Balance Fund until I ended my accumulation phase and entered my retirement.

[ChapInTokyo]

I’ve changed my asset allocation once in the past ten years. I introduced an allocation to UK gilts (via an index tracker) about a year ago.

This seems about the right frequency to make changes to me. Once or twice every few years if needed.

I kept my Saison Vanguard Global Balance Fund inspired allocation pretty much unchanged for over ten years, apart from making a change of 50:50 stocks bonds to 70:30 stocks bonds some years ago.

However, now I am no longer accumulating, and prefer to have an allocation with less currency risk and less downside risk, I am making big changes inspired by the Vanguard Target Retirement Fund. With regard to the international bonds allocation, both the US and UK Vanguard's fund managers opt for USD and GBP hedged international bond index funds for their retirement portfolios. In that respect, BNDX is not ideal.

- 40% JPY hedged International Bonds
- 20% Japan bonds (2/3 of which in inflation-linked JGBi funds)
- 30% International stocks
- 10% Japan stocks

[captainspoke]

At least compared to me. you are waaayyy overthinking this.

So make your choice. Choose something and go with it--that likely will be little different than the other options you're considering.



You seem to be paralyzed by choice--giving yourself too many options to consider and getting stuck there.

So again, "Choose something and go with it--that likely will be little different than the other options you're considering. "

[ChapInTokyo]

At least compared to me. you are waaayyy overthinking this.

So make your choice. Choose something and go with it--that likely will be little different than the other options you're considering.



You seem to be paralyzed by choice--giving yourself too many options to consider and getting stuck there.

So again, "Choose something and go with it--that likely will be little different than the other options you're considering. "

I think that a 100% equity portfolio allocated 33% to domestic and 67% to International stocks as recommended by Anakulova, Cederburg and O'Doherty will produce quite different results to the 39% equity to 61% bonds portfolio that you'd get from UK Vanguard's Target Retirement Fund, which will again be quite different from the 25% domestic stocks, 25% international stocks, 25% domestic bonds, 25% international bonds portfolio used by GPIF.

I mention GPIF here because they use unhedged international bonds whereas UK Vanguard's retirement fund uses GBP hedged international bonds (just as US Vanguard's retirement fund uses USD hedged international bonds, essentially, BNDX). My takeaway from that is that if you have a 100 year time horizon like GPIF, having a large holding of unhedged international bonds is ok whereas if you have only a 20 to 30 year time horizon as in a retirement fund, paying the extra cost of currency hedging is worthwhile.

Even among the various bucket strategy options, the outcomes vary substantially as outlined in Morningstar's article Should Investors Use a Bucket Strategy for Retirement Income?

As I am inclined to reallocate my holdings to mimic Vanguard's retirement fund allocation, I do think that I will be divesting myself of BNDX since I'd prefer a JPY hedged international fund. However, because BOJ is still in the process of increasing their short term rate, while the Fed has paused their rate cuts, I think I will wait until the rate gap closes some more before switching to a JPY hedged international bond fund. Thanks to everyone on the board whose thundering silence made me rethink the timing for selling off my BNDX holdings!

[goodandbadjapan]

Sometimes I am glad that my understanding of investing is quite limited and basic. Stops me worrying too much about what to do or messing about too much!

[RetireJapan]

Sometimes I am glad that my understanding of investing is quite limited and basic. Stops me worrying too much about what to do or messing about too much!

Pretty sure that is an advantage. My direction of travel with investing has been to simplify, simplify, simplify. Much less work, decent results, no stress.

[adamu]

I think it's also personality. ChapInTokyo is clearly a thinker and a tinkerer. A hand-off approach probably won't work for him. Reminds me a bit of Ermine from the Simple Living in Somerset blog https://simplelivingsomerset.wordpress.com/

Although I think finding some balance or maybe restraint would be good in case you stumble on a footgun...

[ChapInTokyo]

I think it's also personality. ChapInTokyo is clearly a thinker and a tinkerer. A hand-off approach probably won't work for him. Reminds me a bit of Ermine from the Simple Living in Somerset blog https://simplelivingsomerset.wordpress.com/

Although I think finding some balance or maybe restraint would be good in case you stumble on a footgun...

Thanks for the link! Ermine writes so well!

His writing reminded me of how John Peel used to write in his weekly Sounds columns... (before your time of course!).

[ToushiTime]

I’ve changed my asset allocation once in the past ten years. I introduced an allocation to UK gilts (via an index tracker) about a year ago.

This seems about the right frequency to make changes to me. Once or twice every few years if needed.

Which UK Gilts tracker?
And why?
Because you might retire in Britain?