Bogleheads® 2022 Conference – Bogleheads University – Q&A with the Five Faculty Members
00:00:00.000 | (audience applauding)
00:00:03.160 | Okay, we're gonna do a Q&A panel here,
00:00:07.280 | and we have saved 37 minutes.
00:00:09.300 | We gained seven minutes in there somewhere.
00:00:11.240 | We're gonna use the whole thing.
00:00:12.340 | We're gonna go all the way to four o'clock.
00:00:14.260 | Let's have our four other faculty members come up here.
00:00:16.760 | Let's put two chairs on each side of me.
00:00:18.860 | - Yeah, but this question's gonna allow you
00:00:21.800 | to stay in the course.
00:00:22.720 | I'm approaching retirement, 50/50 allocation.
00:00:25.800 | Don't do individual bonds.
00:00:27.600 | So most of my bond allocation would be in the Vanguard
00:00:30.240 | Total Bond and International Bond Market funds.
00:00:34.040 | Saw a CFP off the Garrett Network this summer
00:00:37.400 | who recommend taking all that bond money,
00:00:40.360 | liquidating it, and making a five-year CD ladder,
00:00:44.280 | as well as put the rest in a short-term bond market fund.
00:00:48.720 | So I didn't do that.
00:00:50.360 | I've ridden my bonds down.
00:00:51.640 | Am I doing the right thing staying in the course,
00:00:53.720 | especially in light of what Burton Malkiel said
00:00:56.020 | about us being in a time of financial repression
00:00:58.600 | where bonds going forward may not be
00:01:00.720 | what they've been in the past?
00:01:02.920 | - That sounds like a Rick question.
00:01:04.920 | (audience laughing)
00:01:07.080 | - Okay, thank you for that.
00:01:08.560 | Good question.
00:01:09.520 | And I understand the change in what's going on in your life
00:01:12.360 | because you are going through the most stressful
00:01:15.960 | financial part of your life right now,
00:01:18.080 | which, aside from paying off college loans, is retirement,
00:01:22.040 | the year before retirement to the year after retirement.
00:01:25.780 | I don't know what's going to happen
00:01:28.180 | to the bond market going forward.
00:01:30.100 | I believe that where we are right now
00:01:32.600 | is good for retirees in the long term.
00:01:36.580 | Interest rates have gone back up.
00:01:38.860 | Now we can get, finally, 4%.
00:01:41.740 | So is now a good time to make that move
00:01:44.660 | of selling out of the thing that you watched go way up
00:01:48.380 | over the last couple of years
00:01:49.620 | because interest rates dropped below 1%
00:01:52.100 | and now have gone back to more normal levels.
00:01:55.920 | I would not do that.
00:02:00.460 | I understand the idea of a CD ladder.
00:02:05.100 | I just don't think that I would do something like that.
00:02:09.940 | I mean, I would just take the dividends and interest
00:02:12.020 | from the portfolio and sell off the asset class
00:02:15.240 | that gets me back to my 50/50 every year
00:02:18.300 | and I'd just stay the course.
00:02:19.740 | That would be my answer.
00:02:21.380 | - Darwin.
00:02:22.200 | - In my book, there was a chapter called Better Than Bonds
00:02:27.740 | that didn't work all that well for a long period of time
00:02:30.580 | and it was CDs that had easy early withdrawal penalties.
00:02:33.960 | Now I still earned more than total bond,
00:02:36.540 | but I never exercised that put,
00:02:39.240 | the right to sell it back to the bank at a very low penalty.
00:02:43.540 | And guess what happened this year?
00:02:44.980 | It worked like magic.
00:02:47.140 | Now banks and credit unions typically lag market rates.
00:02:50.420 | So during the 40-year bull market when rates were falling,
00:02:53.660 | the banks and credit unions had great rates.
00:02:57.660 | Now it's the other way around.
00:02:59.060 | They're lagging.
00:03:00.100 | So I would argue treasury bills,
00:03:02.740 | treasury bonds are playing incredible rates.
00:03:05.300 | And I just did a back of the envelope calculation
00:03:08.620 | that I shared with Christine and Mike
00:03:11.260 | that you could build something close to a tips ladder
00:03:15.340 | that would give a guarantee,
00:03:17.180 | virtually guarantee 4.23% real
00:03:21.620 | after inflation withdrawal rate over 30 years.
00:03:25.380 | So indexing for stocks, incredibly important.
00:03:29.680 | And I own a lot of the total bond index fund,
00:03:32.800 | but fixed income, high credit quality,
00:03:36.140 | there are some better alternatives out there.
00:03:38.820 | - Yeah.
00:03:41.220 | Okay, I just want to talk about one thing
00:03:44.640 | and that's the difference between philosophy and strategy.
00:03:47.340 | And those of you who have heard some of my lectures
00:03:49.600 | before have heard this.
00:03:51.780 | We are all bogleheads.
00:03:52.940 | We all have the philosophy of low fee,
00:03:54.940 | stay the course, be diversified,
00:03:57.060 | all the things you've heard today.
00:03:59.380 | And so we all believe that, we're all here.
00:04:00.900 | If I was gonna ask you how many of you believe that,
00:04:02.920 | everybody in this room would raise their hand.
00:04:04.800 | If I then said, how many of you are implementing that
00:04:08.060 | in your portfolio, you'd all raise your hands.
00:04:10.420 | If I said, how many of you in this room
00:04:12.700 | have the exact same portfolio as another person,
00:04:15.660 | no one would raise their hand
00:04:16.900 | because what works for you, works for you.
00:04:20.340 | It could be a CD ladder.
00:04:21.940 | It could be the total bond market.
00:04:23.260 | It could be a couple of different bond funds.
00:04:25.020 | So what we're gonna be discussing up here
00:04:26.740 | and make it very clear,
00:04:28.860 | this is not, you should do it this way.
00:04:31.820 | You should have a CD ladder.
00:04:33.260 | You shouldn't have a CD ladder.
00:04:34.460 | You should have treasuries.
00:04:35.660 | You shouldn't have treasuries.
00:04:37.260 | It is, that is individual to you.
00:04:40.820 | It is a strategy that you're using
00:04:42.700 | and it's all good because it works for you.
00:04:44.800 | So whatever works for you is good.
00:04:47.460 | It's all under the same philosophy.
00:04:48.900 | So I wanted to just separate the philosophy discussions
00:04:52.760 | from the strategy discussions.
00:04:54.340 | - All right, we're gonna spend all our time
00:04:58.540 | on this question.
00:04:59.380 | (audience laughing)
00:05:01.100 | - Just wanna make a quick comment
00:05:02.420 | to kind of generalize my thoughts
00:05:05.340 | on retirement decumulation, which I work on a lot.
00:05:09.020 | I like the idea of using portfolio withdrawals.
00:05:12.060 | So my cash flow needs from my portfolio
00:05:14.140 | is kind of the yardstick to determine
00:05:16.860 | how much I would drop into each asset class.
00:05:20.060 | So in my kind of model bucket portfolios,
00:05:23.140 | and I know Alan doesn't love this bucket strategy,
00:05:25.280 | but I hear from a lot of retirees
00:05:27.060 | who say that it really works for them
00:05:30.020 | and mentally works for them.
00:05:31.700 | The idea is that you use your portfolio withdrawals
00:05:34.360 | as the measuring stick.
00:05:35.860 | So I think about like two years worth of portfolio
00:05:40.780 | withdrawals in liquidity, like cash,
00:05:43.380 | not messing around, CDs, whatever, guaranteed.
00:05:46.660 | And then another, say, five to eight years
00:05:49.500 | in fixed income, short term, intermediate term,
00:05:52.660 | and some tips, and then anything beyond that
00:05:56.180 | going into a globally diversified equity portfolio.
00:05:59.260 | That's how I do it.
00:06:00.540 | I'm not retired, but that's how I think
00:06:02.280 | about retirement decumulation.
00:06:05.780 | - Mike, you wanna go after this one?
00:06:08.100 | You know, who owns a TSPG fund?
00:06:09.820 | Raise your hand.
00:06:11.140 | Yeah, 16 years I've owned it,
00:06:13.020 | and finally this year is its day in the sun.
00:06:15.220 | All right, next question.
00:06:17.060 | - Yeah, my question really is buckets of money.
00:06:19.660 | I'm retired, I have a cash fund that's getting depleted,
00:06:23.500 | right, and most of the market is down
00:06:25.140 | and most of the asset classes.
00:06:26.660 | At what point do you start replenishing your cash fund
00:06:31.660 | and in what priority order?
00:06:34.940 | You know, so you can have the cash.
00:06:37.000 | - Great question.
00:06:40.500 | So the way I think about it is
00:06:42.540 | that you build kind of next line reserves.
00:06:46.180 | So you have maybe a couple of years' worth
00:06:48.200 | of portfolio withdrawals and true cash investments,
00:06:51.060 | and then within that fixed income portion,
00:06:53.380 | which I was talking about accounting
00:06:55.460 | for roughly five to eight years' worth
00:06:57.300 | of portfolio withdrawals, you kind of stair-step
00:07:00.580 | that portion of the portfolio by risk level.
00:07:03.500 | So next in line would be short-term bonds,
00:07:06.060 | which have had losses this year,
00:07:08.580 | but certainly not in line with intermediate-term bonds.
00:07:13.180 | They've held up much better.
00:07:14.700 | So if I needed additional funds,
00:07:17.340 | my cash reserves were depleted,
00:07:20.140 | that's where I would turn.
00:07:21.460 | I don't think I would preemptively
00:07:23.260 | start rating short-term bonds.
00:07:27.620 | I would wait and see what happens there.
00:07:30.020 | I would only shift more funds into cash at this point
00:07:34.100 | if those liquid reserves were already gone or almost gone.
00:07:38.580 | - Yeah, the whole point of having that cash
00:07:42.900 | is to be able to write out years like this.
00:07:44.500 | You knew it was possible that stocks and bonds
00:07:46.900 | could both go down at the same time.
00:07:48.220 | That's why you have cash in your portfolio,
00:07:50.260 | 'cause that's what you're gonna take it out of this year
00:07:52.060 | and maybe next year, and hopefully by then,
00:07:54.820 | one of those asset classes has recovered somewhat.
00:07:57.740 | All right, let's take our next question.
00:07:59.540 | - Thanks for being here.
00:08:00.860 | I had the opportunity to sell a condo last year at a profit.
00:08:03.540 | I don't have any housing expenses
00:08:05.340 | probably for the next 30 years,
00:08:06.540 | 'cause my spouse is a clergy person,
00:08:08.180 | so we live in a parsonage.
00:08:09.620 | So I'm curious to know,
00:08:10.500 | we talked about lump kind of investment.
00:08:12.860 | What are some recommendations
00:08:14.100 | or things I should keep in mind to use that profit
00:08:16.780 | if I'm not looking to tap into it
00:08:18.580 | for a retirement home for 30 years?
00:08:21.460 | - You're not planning on using the money for 30 years?
00:08:23.940 | - Yeah.
00:08:25.140 | - And it's money you got from selling your house recently?
00:08:27.740 | - Yeah.
00:08:28.580 | - Mike, you wanna take that?
00:08:29.940 | (audience laughing)
00:08:33.460 | - To me, this just feels like it's any other chunk
00:08:35.340 | of the retirement portfolio.
00:08:36.740 | The money doesn't quite care where it came from, right?
00:08:40.340 | And so now all we know
00:08:42.140 | is we're gonna be spending it 30 years from now.
00:08:43.940 | So base it on that and the other things
00:08:46.940 | that determine your personal risk tolerance.
00:08:48.820 | That's what it feels like to me.
00:08:50.420 | - And the single lump, what we were talking about earlier,
00:08:53.700 | that's like better than trying to put it in
00:08:56.140 | over several different months?
00:08:57.700 | - Ah, sounds like your question's more lump sum
00:08:59.820 | versus dollar cost average.
00:09:01.140 | Is that right?
00:09:01.980 | All right.
00:09:02.820 | - Thank you.
00:09:06.460 | I have a comment about lump sum versus dollar cost average.
00:09:09.500 | Okay.
00:09:10.340 | Lump sum, you rip the Band-Aid off all at once.
00:09:15.340 | It's painful.
00:09:16.740 | And you know you're gonna be wrong.
00:09:18.300 | Doesn't matter what day you pick,
00:09:19.500 | the next day the market's going down.
00:09:20.780 | You know that.
00:09:21.620 | (audience laughing)
00:09:23.740 | Could spend your life trying to figure it out.
00:09:25.300 | But lump sum hurts really bad one time.
00:09:30.020 | Dollar cost averaging hurts really bad
00:09:33.220 | many, many, many times.
00:09:35.780 | And here's the problem with it.
00:09:37.180 | I find, okay, unless it's an automated thing
00:09:39.300 | as Christine was talking about,
00:09:40.460 | where it's automated, you don't think about it,
00:09:42.260 | it comes out of your paycheck.
00:09:43.180 | That's great.
00:09:44.020 | That's great dollar cost averaging.
00:09:45.100 | But when you have to physically go in
00:09:47.940 | and make a trade every month or every quarter
00:09:51.300 | to do your dollar cost averaging,
00:09:53.260 | a lot of times it never gets done.
00:09:55.700 | 'Cause you gotta rip the Band-Aid off every single time.
00:10:00.580 | And it hurts.
00:10:01.780 | And it's hard to do dollar cost averaging
00:10:04.580 | when you have to do it yourself.
00:10:06.100 | So another reason to do lump sum
00:10:08.420 | besides the data that Christine,
00:10:10.460 | just jump off into the cold water,
00:10:15.300 | take your shock, and then it's in there.
00:10:18.620 | And you don't have to worry about it after that.
00:10:20.220 | I try to get people to do that.
00:10:21.340 | It's very hard to do it.
00:10:22.580 | But I think that's really the best way to do it.
00:10:25.420 | - Thank you.
00:10:26.260 | - Lump sum, mathematically superior.
00:10:30.100 | Dollar cost averaging, emotionally superior.
00:10:33.180 | If you're going to dollar cost average,
00:10:35.220 | you can only do this with mutual funds, not ETFs.
00:10:38.700 | But do it on an automated basis.
00:10:40.580 | You can have Vanguard invest $10,000
00:10:45.260 | in Vanguard Total Stock Index Fund, VTSAX, not VTI,
00:10:49.540 | for 18 months and then stop.
00:10:51.740 | Because when people have to do it,
00:10:54.060 | either life gets in the way,
00:10:55.940 | or North Korea launches a nuke,
00:10:57.740 | or there's a tweet, we always come up with excuses.
00:11:01.260 | - Yeah, lump sum investing
00:11:04.700 | is definitely my favorite way of doing it as well.
00:11:08.120 | I've said dollar cost averaging is for wimps.
00:11:10.580 | And there's a lot of truth to that.
00:11:12.840 | But the truth is I lump sum invest every month.
00:11:15.420 | I have a certain amount of money to invest.
00:11:16.980 | Some months it's more, some months it's less.
00:11:18.780 | 'Cause I have variable income.
00:11:20.180 | But you know what?
00:11:22.060 | Over the 20 or 30 years that I'm accumulating,
00:11:24.820 | it works out because sometimes you're buying high
00:11:27.140 | and sometimes you're buying low.
00:11:28.140 | But I'm always lump sum investing
00:11:30.100 | 'cause I invest the entire amount I have to invest
00:11:32.820 | at that particular time.
00:11:34.140 | And that includes the times when I sell a house
00:11:36.020 | and get a lump sum of money.
00:11:37.580 | Next question.
00:11:38.420 | - Hi, I have a friend who's been in a long-term relationship
00:11:44.500 | with her financial advisor.
00:11:46.780 | And he's been unfaithful to her.
00:11:49.380 | He's been cheating on her with a woman,
00:11:52.220 | with another woman named Ms. Profit.
00:11:55.020 | How can I convince, or how can my friend rather?
00:12:01.080 | (laughing)
00:12:04.720 | How can my friend break up with her unfaithful advisor?
00:12:12.140 | - Okay, all right.
00:12:13.620 | How to fire a financial advisor.
00:12:16.840 | Christine, you wanna start with that one?
00:12:18.920 | - You know, how to fire an advisor.
00:12:25.840 | I think, you know, it is, I will say,
00:12:29.280 | I've worked with friends about different business models
00:12:32.680 | for financial advice.
00:12:33.880 | It's very hard to get people away from that all-in-one,
00:12:38.880 | mainly the invisible hand that comes into their account
00:12:42.880 | and takes a percentage of their assets every year.
00:12:46.680 | It's just sort of this mental game
00:12:51.680 | that makes it very easy for people to put up with
00:12:55.720 | kind of a bad relationship.
00:12:57.760 | And so I do think, you know, it's a learning process.
00:13:00.680 | I've worked with friends.
00:13:02.160 | In fact, I had a friend who I spent a lot of time
00:13:05.400 | talking to about how to find a financial advisor.
00:13:08.280 | I said, I think you wanna go hourly, blah, blah, blah.
00:13:10.800 | And he went with some other business model.
00:13:14.400 | I think it was actually a commission-based broker.
00:13:17.440 | And then a couple of years later,
00:13:19.000 | we're having the same conversation.
00:13:21.060 | He wasn't happy with the way things were working.
00:13:23.520 | So I just feel like it's an educational process.
00:13:26.800 | You can walk them through the numbers
00:13:28.740 | about how much that advisor is subtracting
00:13:32.580 | from their portfolio and not adding value,
00:13:35.480 | and talk about, well, if you do need advice,
00:13:38.400 | maybe kind of a surgical business model
00:13:41.480 | where you're paying for hourly advice
00:13:44.320 | is the better way to go.
00:13:46.300 | - Yeah, I have the worst client retention in the business
00:13:52.280 | in that I do a one-time plan with the goal of being fired.
00:13:55.520 | But the client has to fire their advisor.
00:14:00.600 | And if they're enjoying it, I'm a little worried about them
00:14:03.480 | because they're real people.
00:14:05.440 | So, you know, what I tell clients,
00:14:08.200 | you don't try to convince your advisor
00:14:10.320 | that they're doing the wrong thing.
00:14:11.540 | Just say, I've decided to go a different direction.
00:14:14.160 | Thank you for all the help you've given me,
00:14:16.360 | and leave it at that.
00:14:17.520 | - Yeah, that's exactly, 100% agree with Alan.
00:14:21.440 | The key words are, you know,
00:14:22.960 | I appreciate everything you did for me.
00:14:24.200 | I've decided to go a different direction.
00:14:26.320 | Those key words.
00:14:27.680 | And I've been an advisor for 35 years.
00:14:31.360 | I've heard these words.
00:14:32.900 | (audience laughing)
00:14:34.880 | But that's when I was a broker, not anymore.
00:14:37.080 | - Okay, but yeah, but here's, are you asking about,
00:14:41.320 | you're trying to convince your friend to fire their advisor?
00:14:46.320 | Is that what this question is?
00:14:47.920 | - Yeah, basically.
00:14:50.280 | - Okay, but they're not ready yet to do it, correct?
00:14:53.400 | Is that what you're saying?
00:14:54.840 | - Yes.
00:14:55.680 | - Okay, so here's the problem.
00:14:57.080 | They haven't heard it enough times.
00:14:59.520 | This needs to be repeated.
00:15:00.880 | This message needs to be repeated over,
00:15:03.240 | and over, and over again.
00:15:05.600 | At least 100 times
00:15:08.720 | before they understand what you're saying.
00:15:11.520 | And if they're not ready to fire their advisor yet,
00:15:14.120 | then they haven't heard it 100 times yet.
00:15:17.100 | Now, they're not gonna hear it 100 times from you,
00:15:19.480 | but different places out there.
00:15:21.280 | In the media, they hear about it.
00:15:23.080 | They hear, they read something about it.
00:15:24.840 | They see it somewhere else.
00:15:25.900 | Somebody else tells them.
00:15:27.460 | You don't become a bogal head,
00:15:28.960 | well, most people don't become a bogal head overnight.
00:15:31.740 | The light bulb goes on.
00:15:34.680 | Well, you would be amazed how many times
00:15:36.600 | it's been sitting in front of you,
00:15:38.680 | and for how long it's been sitting in front of you
00:15:42.320 | before you realize,
00:15:43.600 | where have I been?
00:15:46.340 | Okay, but it took about 100 different impressions on you
00:15:50.820 | from various places before you finally did it.
00:15:53.160 | And that's what's going on with your friend,
00:15:55.400 | is that it's not that you're doing anything wrong
00:15:58.000 | 'cause you're not.
00:15:58.920 | They just haven't been exposed long enough
00:16:01.960 | by enough people.
00:16:03.040 | And eventually, at some point, they're gonna take notice.
00:16:05.360 | They're actually gonna look at it and say,
00:16:09.040 | what are you actually talking about?
00:16:10.520 | And look at it.
00:16:11.480 | But she or he is just not there yet.
00:16:13.800 | - I think I've helped literally thousands of doctors
00:16:18.020 | fire their financial advisors.
00:16:19.780 | The course I put together is called
00:16:22.420 | How to Fire Your Financial Advisor.
00:16:23.760 | But the point I make to them, though,
00:16:28.000 | is it's way easier to fire them
00:16:29.920 | once you have a plan of what's gonna happen
00:16:32.320 | after you fire them.
00:16:34.040 | So whether you are moving to a better advisor
00:16:36.720 | that gives better advice at a better price,
00:16:39.280 | or whether you are moving to a do-it-yourself model,
00:16:41.440 | there's no rush to fire that advisor.
00:16:44.320 | You're gonna pay a little bit more in fees
00:16:45.800 | over the next two or three months
00:16:46.960 | while you educate yourself and put a plan together.
00:16:49.760 | But get that all in place so you know what you're moving to.
00:16:53.480 | And then it's really easy.
00:16:54.360 | It's just a formality of, oh yeah, I gotta let 'em know
00:16:56.600 | I'm not gonna use 'em anymore.
00:16:58.300 | I've already got the plan and what I'm going to do
00:17:00.040 | is I move from one place to another.
00:17:03.340 | So I think that's the key, is know where you're going.
00:17:05.960 | The actual conversation's pretty short
00:17:07.680 | as they've eliminated-- - Like, oh,
00:17:08.720 | it's not you, it's me, Piper.
00:17:10.720 | - Exactly, exactly. (audience laughing)
00:17:12.600 | - Thank you, thank you.
00:17:13.440 | - You seem to have some experience
00:17:14.720 | with conversations in this regard.
00:17:16.160 | (audience laughing)
00:17:18.200 | - Thank you. - All right, next question.
00:17:20.160 | - This question is for Mike Piper.
00:17:26.360 | And he hasn't been getting questions or speaking much.
00:17:29.400 | So, and this is always what I intended
00:17:32.600 | from the time I got in line,
00:17:34.440 | was to ask Mike Piper a question.
00:17:37.520 | And I've read at least one of your books
00:17:39.800 | about social security.
00:17:41.920 | And seems like the claiming strategy, still for me,
00:17:46.920 | maybe I just didn't get it, is a little complicated.
00:17:50.540 | I've used your calculator as well,
00:17:53.440 | depending on if you're single versus if you have a spouse
00:17:58.440 | and then what the other thing is,
00:18:00.880 | is for the lower-income person,
00:18:04.680 | what age should they claim at.
00:18:07.520 | I realize that there's a lot to it,
00:18:09.320 | that's why you wrote a book.
00:18:10.720 | But if you could kind of give an overview of this,
00:18:13.440 | I'd appreciate it.
00:18:14.880 | - Sure, that's one of the primary topics
00:18:17.840 | of my talk tomorrow.
00:18:19.080 | So, we've got 15 minutes on just that, so.
00:18:23.120 | - Do you have another question for him?
00:18:24.920 | - No, I'll be back.
00:18:26.520 | (audience laughing)
00:18:29.440 | - I think Mike's trying to get out of answering questions,
00:18:31.400 | that's what I think.
00:18:32.400 | - Hello, my question is for Christine.
00:18:36.080 | You had mentioned, in retirement,
00:18:38.400 | Ms. Ben said to add some cash to the three-fund portfolio.
00:18:41.760 | Ms. Ben said that in retirement,
00:18:44.920 | add some cash to the three-fund portfolio.
00:18:47.920 | How much cash, two to three years
00:18:49.840 | of discretionary income, question mark.
00:18:52.360 | And just one thing for Mike.
00:18:54.160 | Mike, I never have to answer or consider
00:18:57.320 | that question that he asked again.
00:19:00.080 | I waited until 70, it's done.
00:19:03.040 | (audience laughing)
00:19:06.720 | - Thanks for that question.
00:19:07.840 | So, I like the idea of using your,
00:19:12.360 | well, as a starting point, looking at all in spending,
00:19:17.360 | including portfolio income, social security,
00:19:22.600 | income from every source.
00:19:23.880 | Look at how much you need.
00:19:25.160 | Subtract out non-portfolio income sources
00:19:28.080 | like social security, pension if you're lucky enough
00:19:30.480 | to have one, real estate income, that kind of stuff.
00:19:33.840 | The amount that's left over with is the portfolio withdrawal
00:19:37.360 | and then I use that as kind of the measuring stick
00:19:40.760 | to determine how much to hold in cash.
00:19:43.280 | So I think one to two years worth of portfolio withdrawals
00:19:47.640 | in cash is a good starting point.
00:19:49.400 | I think most retirees probably would rather
00:19:53.000 | they had two years this year,
00:19:55.160 | given how bad the bond market has been.
00:19:57.960 | But I would use that as kind of the measuring stick
00:20:01.880 | that I in turn would use to determine
00:20:04.120 | how much to invest in the other asset classes.
00:20:06.880 | - I forgot to tell you, the reason I asked the question
00:20:09.360 | is I'm planning today to retire next June 30th.
00:20:14.360 | Hopefully, between now and then,
00:20:17.680 | but I'm willing to wait another year if I have to
00:20:20.040 | because of the market coming back.
00:20:21.880 | But I've never really been able to figure out
00:20:24.200 | exactly how much cash do you wanna have.
00:20:26.280 | So thank you.
00:20:27.120 | - Sure, thank you.
00:20:27.960 | Thanks for coming.
00:20:28.800 | - Hi, my question is for everyone basically
00:20:35.080 | or whoever's familiar with this topic.
00:20:37.400 | I was wondering if you've done any studies
00:20:39.000 | on the bond 10 glide path approach
00:20:41.480 | versus the traditional glide path.
00:20:44.080 | Maybe for simplicity, I think this is a newer thing
00:20:45.960 | that I discovered recently.
00:20:47.400 | Instead of using your agent bonds,
00:20:48.960 | the bond 10 glide path suggests that
00:20:51.800 | you should hit your maximum bond around retirement.
00:20:55.160 | And then you should, quote unquote, die with 100% stocks.
00:20:59.200 | I find it very counterintuitive,
00:21:00.640 | but I like the idea because it claims to minimize
00:21:03.360 | the, I think, sequence of return risk.
00:21:06.480 | Basically, it's like regardless of when you retire,
00:21:09.040 | you're gonna be more okay using this approach
00:21:10.720 | versus the traditional approach.
00:21:11.880 | And I was wondering if you have any analysis
00:21:13.600 | or pros and cons of these two approaches.
00:21:15.880 | - Okay, you know I'm gonna talk about bond 10s.
00:21:18.240 | Mike?
00:21:19.280 | Oh, Alan.
00:21:20.120 | (audience laughing)
00:21:23.120 | For those who don't know what a bond 10 is,
00:21:28.480 | the idea is that you go down in stocks
00:21:31.200 | until you get really close to retirement,
00:21:32.720 | maybe five years before.
00:21:34.640 | And that's when you're at your most conservative
00:21:37.680 | asset allocation.
00:21:38.840 | And then for about five years after your retirement date,
00:21:42.980 | you're still in that conservative allocation.
00:21:45.000 | And then you actually start increasing
00:21:46.800 | your stock-to-bond percentage,
00:21:48.720 | the idea being to reduce your sequence of returns risk.
00:21:51.720 | Good idea, bad idea, Mike?
00:21:53.280 | - I think it's entirely reasonable.
00:21:56.400 | Frankly, you're gonna have a hard time
00:21:58.600 | getting a strong opinion from me
00:21:59.760 | about any asset allocation topic.
00:22:01.440 | Sorry, to share one analogy that I use a lot of the time.
00:22:06.040 | My mom is a dietician.
00:22:07.960 | My wife's mom is also a dietician.
00:22:09.880 | And if you ask them what makes a healthy meal
00:22:12.000 | or what is a healthy meal,
00:22:13.400 | they don't tell you grilled zucchini and something.
00:22:16.720 | What they tell you is it needs to have
00:22:19.640 | a reasonable number of calories,
00:22:20.880 | it should probably include a vegetable,
00:22:22.160 | limited amount of sugar.
00:22:23.280 | They give you characteristics.
00:22:25.360 | And there's a zillion meals
00:22:27.680 | that meet those characteristics.
00:22:29.800 | And it's the same thing with the portfolio.
00:22:31.440 | There's characteristics.
00:22:32.960 | It needs to be diversified, it should have low cost,
00:22:35.160 | it should have an allocation
00:22:37.200 | that's roughly in keeping with your risk tolerance.
00:22:40.520 | And then there's a million and one ways
00:22:42.640 | you can design a portfolio
00:22:44.160 | that meets all of those requirements.
00:22:46.240 | So, on the topic specifically of a bond tent,
00:22:48.920 | yeah, I think that's one reasonable way to do it.
00:22:50.760 | I think it's also fine to just keep a static allocation.
00:22:54.000 | If you're interested in studies, though,
00:22:56.280 | so it came from Wade Fowle and Michael Kitsis,
00:22:58.480 | I'm pretty sure.
00:23:00.200 | As far as follow-up research
00:23:02.520 | that's been done in the years since,
00:23:03.680 | I'm not super sure if they're,
00:23:06.280 | oh, Christine, great.
00:23:07.480 | - That was a good punt.
00:23:12.520 | So, my former colleague, David Blanchett,
00:23:16.000 | did some research on this
00:23:17.560 | and concluded that he liked a more traditional glide path.
00:23:21.600 | He found that actually it made very little difference
00:23:24.240 | over most market time periods of retirement.
00:23:28.520 | And just behaviorally, he felt that it was more attractive
00:23:33.520 | to use a traditional trending glide path,
00:23:35.840 | which would either stay static
00:23:37.520 | or get a little bit more conservative
00:23:39.720 | as the person gets further on into retirement.
00:23:43.640 | Because the net effect of this idea of starting retirement
00:23:47.760 | with a really conservative portfolio
00:23:50.480 | is that at some point after Armageddon occurs
00:23:54.240 | in the equity market,
00:23:55.920 | you're supposed to be adding to equity exposure.
00:23:58.680 | Does that work behaviorally?
00:24:00.080 | I think that's a big question mark.
00:24:02.240 | And I think that's kind of what David's research flagged.
00:24:05.080 | - This is historic because it might be the first time
00:24:08.960 | that I've ever sort of disagreed with Mike Piper.
00:24:11.920 | I can't get into the details of it,
00:24:17.440 | but there was a flaw in the assumption of that glide path
00:24:22.440 | or increasing stock study.
00:24:25.840 | But even more important, as Christine just mentioned,
00:24:28.520 | from a behavioral aspect,
00:24:30.520 | it is really, really hard to get people
00:24:32.800 | to rebalance in down markets,
00:24:34.880 | to get them to take more equity risk in down markets,
00:24:38.800 | very, very unlikely.
00:24:40.280 | I disagree with that.
00:24:41.800 | - And then there's this side.
00:24:45.120 | I do agree with Mike.
00:24:46.480 | (audience laughing)
00:24:49.080 | We're talking about what's called a reverse glide path,
00:24:51.280 | which means that when you retire,
00:24:52.760 | you're at the most conservative you're going to be.
00:24:54.960 | And then over time, you actually increase your allocation
00:24:57.760 | because it's more of a liability matching.
00:25:00.000 | Your future liabilities are better matched
00:25:02.720 | to the long-term liability assets of the portfolio
00:25:06.720 | if there's an increasing asset.
00:25:08.120 | But there's something else that goes on
00:25:09.240 | and depends on how much money you have.
00:25:11.280 | Depends on whether Social Security
00:25:12.680 | is covering all of your expenses or not,
00:25:14.840 | or you've got a pension, or you've got other income,
00:25:17.000 | or maybe you're gonna get an inheritance,
00:25:18.760 | or maybe your kids didn't spend their 529
00:25:20.800 | and it's time for you to take
00:25:21.720 | that round-the-world jet tour, right?
00:25:24.600 | But the point is that it depends on each individual person
00:25:28.920 | which works for you.
00:25:30.320 | I mean, clients I work with,
00:25:32.640 | we do reverse glide paths all the time.
00:25:34.600 | I just say, at some point, stop rebalancing.
00:25:37.640 | Just let it go.
00:25:38.480 | Especially if you're gonna put your bonds
00:25:41.200 | in your IRA account
00:25:43.040 | and you're gonna do these Roth conversions
00:25:44.640 | and then when the money goes over to the Roth,
00:25:46.400 | you want it to be an equity because it's tax-free.
00:25:48.760 | In the meantime, you're not gonna be selling stocks
00:25:50.560 | in your taxable account
00:25:51.560 | because that would just generate taxes.
00:25:53.680 | And then eventually, you're gonna make RMDs
00:25:55.840 | from your IRA or 401(k).
00:25:57.800 | So you're gonna have this natural increase
00:26:01.080 | in equities anyway.
00:26:02.120 | And if you're okay with that
00:26:03.120 | because you're just living off the income
00:26:04.640 | from your Social Security
00:26:07.280 | and maybe dividends and interest income
00:26:08.960 | and maybe eventually the RMD, why not?
00:26:11.720 | It's better for the kids.
00:26:12.960 | - I always think these questions are kind of funny
00:26:16.280 | because they apply to such a small percentage of people.
00:26:19.000 | Most of us either have well more than we need
00:26:21.680 | and we don't really have to play around
00:26:23.240 | with all this safe withdrawal rate stuff.
00:26:25.240 | We spend what we wanna spend
00:26:26.360 | and we'll leave the rest to our heirs or charity or whatever.
00:26:28.880 | And then there's lots of people
00:26:29.840 | that don't have anywhere near what they need
00:26:31.840 | and are trying to maximize it
00:26:33.240 | and buying SPIAs and trying to delay Social Security
00:26:36.080 | if they can and living on Social Security eventually.
00:26:38.760 | Only actually a very small percentage of people
00:26:40.640 | have just barely enough when they retire.
00:26:43.440 | And those are the ones who got to pay a lot of attention
00:26:45.200 | to these sorts of studies.
00:26:46.200 | If you just work another year or two,
00:26:47.480 | you might not have to pay any attention to them at all.
00:26:50.000 | - Sorry, that's why rules of thumb don't work.
00:26:53.240 | You know, your age in bonds minus 10, all this.
00:26:54.960 | It doesn't work.
00:26:55.800 | If it only applies to a very small number of people, okay?
00:26:58.680 | What works for you?
00:26:59.520 | What strategy works for you is what works for you.
00:27:01.840 | Okay, it's all the same philosophy.
00:27:03.400 | Do it low cost, do it, you know, stay the course
00:27:05.920 | and everything we talked about today.
00:27:06.920 | But the strategy that you're gonna implement,
00:27:09.160 | whether it's a bond tent,
00:27:10.120 | whether it's a decreasing allocation to equity,
00:27:12.120 | whether it's an increasing allocation to equity,
00:27:13.800 | whatever is going to be unique to you.
00:27:16.480 | And you have to figure out what that is.
00:27:18.040 | And hopefully that's what this whole conference is about,
00:27:19.960 | helping you figure out what that is.
00:27:21.760 | - All right, let's take our next question.
00:27:25.520 | - Hi, good afternoon.
00:27:26.520 | Edward Chow from Westport, Connecticut.
00:27:28.800 | As I've learned about more about index investing,
00:27:30.960 | the new money has gone into broadly diversified
00:27:33.080 | low cost index funds.
00:27:34.360 | I still have a chunk of my retirement accounts
00:27:37.080 | in kind of systematic value type of products,
00:27:41.600 | which for which I've held
00:27:42.880 | and enjoyed 10 years of underperformance.
00:27:45.080 | Stay the course or time to quit cold turkey?
00:27:49.200 | - Can you tell us what your investing plan
00:27:50.840 | says you're supposed to do?
00:27:52.200 | - It's I think what we've heard today,
00:27:55.920 | broadly diversified low cost.
00:27:58.000 | - Okay, anyone wanna take a stab at that one?
00:28:00.880 | - Absolutely stay the course.
00:28:02.080 | I mean, if you've made a value tilt 10 years ago,
00:28:05.080 | now's not the time to change that.
00:28:06.880 | I mean, you gotta stay the course.
00:28:08.640 | - Anybody have a different opinion?
00:28:12.160 | Should you bail on a value tilt
00:28:13.440 | if you've had it for many years
00:28:14.560 | and suffered through it like those of us who have one?
00:28:17.840 | You're not alone, I can tell you that.
00:28:20.200 | Next question.
00:28:21.040 | - That's because Larry Swedville was here 10 years ago.
00:28:25.440 | - Yeah, exactly.
00:28:26.480 | - Mark Day in Boulder, Colorado.
00:28:31.160 | - Right.
00:28:32.000 | So a shameless plug for The Economist magazine
00:28:36.080 | is just reading the recent issue.
00:28:39.760 | And it said that the Fed may never return to 2%
00:28:44.560 | as far as a target rate, maybe it'll be 4%.
00:28:48.080 | In light of that, what do you guys think about the bond,
00:28:52.040 | maybe the stock, but I'm most interested in the fixed asset,
00:28:55.760 | treasury tips, that part.
00:28:57.920 | - You're talking about a 2% target for inflation?
00:29:01.080 | - Correct.
00:29:02.120 | That after whatever's gonna happen.
00:29:05.080 | - So is your question,
00:29:06.280 | how do you think we should invest in bonds today?
00:29:08.760 | Is that your question?
00:29:09.600 | - Yes, that's correct.
00:29:11.240 | Given something other than a 2%,
00:29:13.360 | probably a higher target rate.
00:29:15.280 | - Okay.
00:29:16.120 | - I think Jason Zweig is in here.
00:29:19.880 | I think the last I looked,
00:29:21.160 | there was a study that showed that the top economists
00:29:23.760 | have called the direction up or down
00:29:26.160 | of the 10-year treasury bond correct
00:29:28.880 | about 35% of the time, less than a coin flips.
00:29:31.720 | Which is tied to inflation.
00:29:34.520 | And none of us knows what inflation,
00:29:36.800 | including those economists.
00:29:38.480 | In fact, if anything, I would probably bet the opposite.
00:29:42.080 | And again, tips, you know, I wrote a piece on I-bonds
00:29:47.080 | several months ago, the best thing since sliced bread.
00:29:50.200 | I-bonds are giving a zero real return,
00:29:52.240 | tips are giving a 1.7 real return.
00:29:56.160 | - You know, I've been talking about inflation
00:29:58.520 | for years and years and years and years,
00:30:00.240 | and nobody ever wants to listen to me.
00:30:01.720 | And finally it shows up this year.
00:30:03.240 | And so it's kind of exciting that way.
00:30:05.720 | But you know, in a lot of ways you've tilted your,
00:30:09.520 | you should have considered inflation all along.
00:30:12.240 | It is the great enemy of your portfolio.
00:30:15.400 | I think I saw Bill Bernstein sneak in back there,
00:30:17.680 | but he's talked about deep risks, right?
00:30:20.120 | Inflation and deflation and confiscation and devastation.
00:30:23.720 | But if you look at how likely each of those are,
00:30:25.840 | inflation is far more likely than any of the other
00:30:28.280 | deep risks that your portfolio faces.
00:30:31.600 | And so your whole portfolio ought to be geared
00:30:34.080 | to deal with this risk.
00:30:35.720 | And so actually half of my bonds
00:30:37.840 | are in inflation index bonds,
00:30:39.400 | whether they're in tips or whether they're in I-bonds.
00:30:42.040 | And you know, I feel like that's actually
00:30:44.520 | not paying off great this year.
00:30:46.000 | We're going to talk about that more later in the conference,
00:30:48.040 | but you know, I think you got to think about inflation
00:30:51.320 | anytime you're designing a portfolio,
00:30:52.840 | 'cause I think it's maybe the number one consideration.
00:30:56.080 | - But specifically if the target rate went up,
00:30:59.000 | let's just say it never returned to 2%,
00:31:00.800 | would that change our strategy?
00:31:02.560 | Would that change the suggested strategy?
00:31:04.200 | - So the economist article that you read speculated
00:31:08.800 | that the Fed is now gonna change their target rate.
00:31:12.560 | - That they'll never get back to 2%.
00:31:14.320 | - That's the difference between changing their target rate.
00:31:16.400 | I mean, if the target rate is 2%, that's the target.
00:31:19.120 | - That they'll change it and it'll never go up.
00:31:21.120 | - Well, in the short term, it won't come back to 2%.
00:31:23.560 | - I don't know.
00:31:24.400 | They're having a Volcker moment right now,
00:31:26.440 | and they're pretty determined
00:31:30.600 | to at least get the inflation going the other way
00:31:32.840 | in a rapid way.
00:31:34.400 | And I know that the timing of it
00:31:37.160 | on a presidential cycle thing is right.
00:31:43.080 | In other words, it's right when they should be doing this.
00:31:46.000 | I don't know the answer whether or not it's gonna go.
00:31:47.480 | I don't know what The Economist magazine said,
00:31:49.120 | but I have some eye bonds in my portfolio as well.
00:31:54.120 | I mean, I like them even at a 0% return, but.
00:31:57.720 | - Alan has mentioned this a couple of times,
00:32:02.440 | kind of just snuck it in.
00:32:04.720 | But TIPS right now, 1.7%.
00:32:09.000 | That's higher than we've seen in a long time,
00:32:13.040 | like considerably higher.
00:32:15.000 | So, I mean, I don't necessarily have anything brilliant
00:32:19.120 | to say about exactly where inflation is going
00:32:22.120 | or any predictions you can make
00:32:24.400 | that are useful in that regard.
00:32:25.920 | But as far as bond investing,
00:32:27.720 | there's better opportunities available right now
00:32:32.080 | than there have been in a long time.
00:32:34.000 | - And I don't know if their target did change
00:32:37.480 | if I would invest any differently than I invest now, right?
00:32:40.280 | I mean, I would expect the markets
00:32:41.400 | to adjust to that information.
00:32:43.880 | - Okay, thank you.
00:32:45.360 | - Next question?
00:32:46.480 | I think probably our last question.
00:32:48.520 | - My question is around what I perceive
00:32:54.320 | as perhaps conflicting advice,
00:32:57.760 | even in the boggleheads community.
00:33:00.520 | And I'll give you two instances
00:33:02.440 | that sometimes confound me personally.
00:33:05.280 | So there's, I don't know if this person
00:33:09.280 | is a bogglehead or not,
00:33:10.160 | but he's written a book where he says,
00:33:12.040 | "Don't worry about international stocks.
00:33:14.040 | "If you invest in VTSAX, Vanguard Total Stock Market,
00:33:19.040 | "you also get international,
00:33:21.240 | "so don't need to worry about that.
00:33:22.680 | "Simplify even further."
00:33:24.040 | So that's one instance.
00:33:26.120 | And today we heard the three portfolio strategy.
00:33:30.480 | The other one is where I've heard that,
00:33:33.840 | "Oh, you should tilt towards small cap
00:33:36.440 | "because there is statistical evidence
00:33:40.240 | "that shows over the long run, 20, 30 years,
00:33:43.640 | "there is a small gain compared to a three-fund portfolio."
00:33:46.680 | I don't know how much it is, 0.5%,
00:33:48.760 | which does equate to maybe a million or two extra
00:33:51.800 | in your retirement portfolio.
00:33:54.000 | So there's all these nuances
00:33:55.560 | and sometimes it gets confusing.
00:33:57.240 | So if you would elaborate.
00:33:58.360 | - Okay, let's do lightning round.
00:33:59.840 | We'll go across the stage from this side to this side.
00:34:02.200 | Your thoughts on international
00:34:03.720 | and your thoughts on a small value tilt.
00:34:05.720 | - Sure.
00:34:07.560 | So international is one area
00:34:09.080 | where I did disagree with Jack Bogle.
00:34:11.120 | He thought that the US market,
00:34:13.000 | because most of the US large caps, or many,
00:34:16.960 | are very globally diversified,
00:34:19.600 | that it was fine to hold just US market.
00:34:21.560 | I like the idea of young investors
00:34:23.600 | using the global market cap as a starting point.
00:34:25.920 | I don't understand why you would say no
00:34:28.880 | to that free diversification.
00:34:30.520 | And yes, it absolutely has not delivered for investors.
00:34:33.880 | We've seen a long stretch of underperformance
00:34:35.880 | of non-US stocks.
00:34:37.160 | But there have been periods in my recent memory
00:34:40.520 | where international stocks have outperformed.
00:34:43.240 | And I believe that will be the case again.
00:34:45.240 | So younger investors go with a global market cap.
00:34:48.480 | Older adults who are beginning
00:34:50.320 | to spend from their portfolios,
00:34:51.800 | I would be a little bit more conservative,
00:34:53.800 | maybe holding 20, 25% of equity exposure in non-US.
00:34:58.560 | I don't feel strongly about the international tilt.
00:35:02.000 | There's certainly some data that shows
00:35:03.840 | the outperformance of small cap stocks.
00:35:06.680 | But I don't feel strongly that investors
00:35:08.720 | embed that into their portfolios on an ongoing basis.
00:35:11.880 | - I'm from Colorado.
00:35:14.560 | I wouldn't only buy companies based in Colorado.
00:35:17.200 | Same sort of diversification strategy.
00:35:21.080 | If you had enough international
00:35:23.360 | with the total stock index fund,
00:35:24.960 | you wouldn't see such huge differences in performance.
00:35:28.640 | With that said, Jack Bogle has been right,
00:35:31.120 | even since his passing.
00:35:33.720 | Regarding small cap, I beg to differ.
00:35:36.760 | The evidence showed that for a long period of time,
00:35:39.880 | small cap had outperformed large cap.
00:35:43.720 | We don't know what's gonna happen going forward.
00:35:46.120 | - I have both a small cap
00:35:48.560 | and an international tilt in my portfolio.
00:35:50.600 | I'm 2/3 US, 1/3 international,
00:35:53.200 | and a pretty good small value tilt.
00:35:55.680 | That has been wrong for my entire investing career.
00:35:58.080 | (audience laughs)
00:35:59.640 | I'm expecting it to pay off at some point.
00:36:02.720 | I think international is a screaming deal right now.
00:36:05.760 | And part of that story is a small value story.
00:36:08.240 | International companies are smaller
00:36:10.160 | and more value-y than US companies.
00:36:12.800 | And so when I think, when the pendulum swings,
00:36:15.600 | I think both of those are gonna do a whole lot better
00:36:17.680 | than they have in the recent past.
00:36:19.600 | - So the international market has made up
00:36:24.000 | of very different industry groups than the US stock market,
00:36:27.560 | which is dominated in the US market
00:36:29.280 | by technology and healthcare.
00:36:31.400 | Internationally, you've got a lot of material stocks,
00:36:33.760 | industrial stocks, oil, so forth, commodity-type things.
00:36:37.760 | In a falling interest rate environment,
00:36:40.200 | those stocks do not outperform the growth stocks.
00:36:42.840 | The growth stocks take advantage of that,
00:36:44.280 | which is what happened in the US market for many years,
00:36:47.480 | and the US market has outperformed.
00:36:49.160 | But that is over, okay, or at least I think it's over.
00:36:52.640 | We're now gonna get back to something more neutral.
00:36:55.160 | So if that's the case, this year,
00:36:58.840 | international stocks have outperformed
00:37:01.440 | the US market by 10%.
00:37:04.400 | Problem is, the dollar has increased by 10%.
00:37:08.120 | So net-net, they were about equal.
00:37:10.480 | But it is actually happening.
00:37:12.040 | These industry groups that are international
00:37:13.560 | are outperforming.
00:37:15.080 | All right, so where do I fall on this?
00:37:17.040 | I don't know what the future's gonna be.
00:37:19.560 | So I'm, like Jim, about 2/3 US, 1/3 international.
00:37:24.560 | And if I was 40% international and 60% US,
00:37:28.520 | which is the global equity market, VT,
00:37:30.560 | the Vanguard World Equity Fund,
00:37:32.200 | I'd be fine with that too.
00:37:33.640 | As far as small cap, I'm not a big believer in small cap,
00:37:38.000 | but I am a believer in if you're going to do
00:37:41.000 | factor investing, which is small cap,
00:37:43.400 | you might as well just put all these factors together
00:37:46.000 | and do a multi-factor small cap value fund
00:37:48.920 | and a very, very intensive one.
00:37:51.080 | And Vanguard doesn't have a very intensive
00:37:52.960 | small cap value fund, but you would use an Advantis
00:37:55.320 | or a DFAETF or something like that,
00:37:58.640 | so you get the really intensive small cap value.
00:38:00.520 | So I do have some of that in my portfolio.
00:38:02.680 | - On the topic of small cap value tilting,
00:38:07.160 | I would enthusiastically decline to have an opinion.
00:38:09.560 | On the topic of international holdings,
00:38:13.240 | I think one thing that often gets left out
00:38:16.240 | is that in just the original idea of diversification,
00:38:21.960 | not the asset class correlations stuff,
00:38:25.560 | but the don't have all your eggs in one basket,
00:38:28.320 | by including an international fund,
00:38:31.480 | you get to keep the same stock exposure
00:38:34.560 | and reduce the exposure to any one individual company.
00:38:38.000 | I think that by itself has some degree of value.
00:38:40.880 | Might international also provide
00:38:44.660 | some sort of rebalancing benefit, maybe.
00:38:47.160 | But for me, honestly, a significant part of the reason
00:38:49.600 | is simply it reduces my exposure
00:38:51.360 | to the individual risks related
00:38:53.120 | to any one individual company.
00:38:54.620 | - All right, our time is now gone.
00:38:58.280 | Two housekeeping items I want you to be aware of.
00:39:00.600 | One at 5.30 in this room is the reception.
00:39:03.680 | So you come back here at 5.30 for the reception.
00:39:06.080 | Do not come back here tomorrow morning.
00:39:07.760 | This is not where the main conference is going to be.
00:39:09.640 | That's gonna be one floor higher,
00:39:11.200 | and that way, I don't remember what the room's called,
00:39:12.980 | but it's not here, so keep that in mind.
00:39:15.180 | Let's give a big round of applause to our panel.
00:39:17.260 | (audience applauds)
00:39:20.420 | Thank you.
00:39:21.260 | And we're looking forward to a great three days
00:39:26.580 | with all of you.
00:39:27.420 | We'll be around to answer questions and chat with you.
00:39:29.140 | I think we'll all stay in the whole conference,
00:39:30.780 | and I look forward to meeting each of you.
00:39:33.620 | (audience mumbling)
00:39:37.340 | What?
00:39:38.180 | What'd you say?
00:39:39.020 | You guys want breakfast?
00:39:39.840 | Can we give them breakfast?