John Bogle Late Sixties and Beyond
0.30%June 04 | MyPlanIQ portfolio symbol P_78968

Overview of the "Late Sixties and Beyond" Lazy Portfolio

1. Background and Philosophy

The "Late Sixties and Beyond" portfolio appears to be designed for investors in or nearing retirement, emphasizing a balanced approach to asset allocation with a focus on income generation and capital preservation. While the specific author of this portfolio is not widely documented, its structure aligns with the principles of lazy portfolios---simple, low-maintenance, and diversified investment strategies that minimize fees and turnover. Lazy portfolios are often inspired by the Bogleheads philosophy, which advocates for passive investing using low-cost index funds or ETFs.

2. Asset Allocation, Diversification, and Risk Analysis

Asset Allocation:
The portfolio is diversified across multiple asset classes:

• 20% VTI (Vanguard Total Stock Market ETF): Provides broad exposure to the U.S. equity market.
• 16% VIG (Vanguard Dividend Appreciation ETF): Focuses on high-quality U.S. dividend-paying stocks, offering stability and income.
• 15% VNQ (Vanguard Real Estate ETF): Adds real estate exposure for diversification and income.
• 10% EEM (iShares MSCI Emerging Markets ETF): Allocates to emerging markets for growth potential.
• 10% EFA (iShares MSCI EAFE ETF): Covers developed international markets outside North America.
• 10% BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): Provides ultra-short-term Treasury exposure for liquidity and safety.
• 9.5% EMB (iShares J.P. Morgan USD Emerging Markets Bond ETF): Adds emerging market debt for higher yield.
• 9.5% LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF): Invests in high-quality corporate bonds for income.

Diversification and Risk:
This portfolio is well-diversified across geographies (U.S., international, emerging markets) and asset classes (stocks, bonds, real estate). The inclusion of dividend stocks (VIG) and bonds (LQD, EMB, BIL) reduces overall volatility, making it suitable for conservative to moderate-risk investors. However, the 10% allocation to emerging markets (EEM) and emerging market bonds (EMB) introduces higher volatility and currency risk. The portfolio leans toward income generation, which is ideal for retirees but may lag in growth during bull markets.

Pros:

• Broad diversification reduces concentration risk.
• Income-focused with dividends and bonds.
• Low-cost ETFs align with passive investing principles.

Cons:

• Emerging market exposure may be too aggressive for some retirees.
• Limited inflation protection (no TIPS or commodities).
• Moderate equity exposure (46%) may not keep pace with inflation over long periods.

3. Application for Retirement Accounts (401(k) and IRA)

This portfolio can be adapted for retirement accounts like 401(k)s and IRAs. Here's how:

For 401(k) Plans:
Many 401(k) plans do not offer the exact ETFs listed, but investors can approximate the allocation using available funds:

• VTI: Use a U.S. total stock market index fund or S&P 500 fund.
• VIG: Substitute with a dividend growth fund or large-cap value fund.
• VNQ: Replace with a real estate investment trust (REIT) fund if available.
• EEM/EFA: Use an international stock fund (developed + emerging markets) or separate funds if offered.
• BIL/EMB/LQD: Allocate to a short-term bond fund, corporate bond fund, or total bond market fund. If emerging market bonds are unavailable, shift to U.S. or global bonds.

Note: If a specific asset class (e.g., emerging market bonds) is unavailable, allocate that portion to the next closest category (e.g., U.S. or international bonds). Avoid overcomplicating; simplicity is key in lazy portfolios.

For IRAs:
IRAs typically offer more flexibility, allowing investors to directly purchase the ETFs listed. Investors can replicate the portfolio exactly or adjust based on personal risk tolerance (e.g., reducing emerging market exposure if too volatile).

Final Tip: Rebalance annually to maintain the target allocation, and consider adding Treasury Inflation-Protected Securities (TIPS) or commodities (if available) for inflation hedging, especially in a high-inflation environment.