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Tom Madell Newsletter: More About Model Portfolios

TedTed
edited January 2019 in Fund Discussions
FYI: First, thanks to those readers who responded to my request for feedback on the Jan. Newsletter in which I discussed the phasing out of my forward-looking Model Portfolios, along with their allocation percentages to each recommended fund.

Among those who responded, most seemed happy enough with the changes discussed. However, several readers expressed regrets that Model Portfolios, as formerly defined, will no longer appear. And several stated they would particularly miss the suggested allocations.

In reality, these recommendations typically didn't change much from Quarter to Quarter. Therefore, if I had published new Model Portfolios in January, they would have been quite similar to the one published in Oct. '18. Since Model Portfolios, especially for stocks, were envisioned as remaining valid for up to five years, there is no reason to believe that a new Model Portfolio would be significantly different than one three months earlier.
Regards,
Ted
http://funds-newsletter.com/feb19-newsletter/feb19.htm

Comments

  • Old_Skeet
    edited January 2019
    Thanks @Ted for posting.

    For what it is worth.

    I have always found good value in reading Dr. Madell's Newsletter. I am sorry to learn that he is going to stop publishing his asset allocation models along with how much of each fund to hold (if I read this newsletter correctly). For me, I feel my asset allocation has been a big part of my investing success as well if not more so than just making good fund selections although that is important too.

    I always like to see how much cash, bonds and stocks each model held. By taking the average of all three of his models (conserative, moderate & aggressive) when combined and averaged pretty much matched that of my own asset allocation until recently I changed to my all weather asset allocation of 20/40/40. So his discontinuning of the asset model allocations are something that I will indeed miss seeing. Plus, Dr. Madell matained some good fund selections within his model portfolio's along with pointing out sectors he felt beneficial to overweight.

    It will be interesting to see what he writes about now concerning investing in the coming months or if this is a first step he is taking in winding down and closing a prior well written newsletter.

    Thank you Dr. Madell for your helping the average retail investor find their way through the investing maze by writting and publishing your newsletter (for free) to anyone who wanted to read it. Your thoughts have been most appreciated, by me, through the years.

    Old_Skeet

  • tmadell
    Thank you, Old_Skeet, for saying positive things about my Newsletters.

    I am not planning to stop writing my Newsletters although I might not be able to spend as much time doing them as I have in the past. I hope some readers on MFO have gotten something out of them too. Best wishes, Tom Madell
  • Old_Skeet
    edited January 2019
    @tmadell: Dr. Madell, thank you for writting such a fine newsletter. I would encourge you to publish a newsletter model asset allocation (conserative, moderate and agressive) along with perhaps one for income generation with their anticipated returns. I'm thinking some investors might find this of interest. At one time I ran a 70/20/10 (stock/bond/cash) allocation while I was in the building phase of my portfolio. Holding some cash offered me the opportunity to buy pullbacks and/or engage some spiffs (special investment positions) form time-to-time. Then as I approached retirement I began to reduce my stock allocation and began to hold more bonds and cash. Recently, I have switched towads an all weather (20% cash/40% bonds/40% stock) asset allocation model. I'm not quite there yet but well on my way. I'm thinking that this all weather model will provide me ample cash, ample income and ample growth to offset inflation plus a little more. By my math I'm thinking my all weather model should generate an average annual return of somewhere between 4.5% to 6%, on average, possibly a little more, at times. With these anticipated returns I should be able to withdraw up to 4% annually and still maintain and perhaps even grow my principal. Currently, my withdrawal philosophy is to take no more than one half of what my five year average rolling returns have been. In this way, I have over the past five years, since I retired, been able to grow my principal while providing a reliable and steady income stream. Currently, my portfolio yields about 3.4% plus any capital gain distributions and when combined have averaged better than a 5% income stream.

    Perhaps, my above comment concerning income generation might provide a topic to write about in an upcoming issue.

    Thanks again ... Dr. Madell ... for publishing such a fine newsletter. I have enjoyed reading it.

    Old_Skeet

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