Ken B. from OK posted over 8 years ago:

Wow, this is a big change so soon after the launch of the Level3 book which I have read. Questions: 1)how much overlap is there between the EQAL and VOE? Does the difference in weighting strategies (cap vs equal)provide a favorable separation? 2) will the book be revised? I had been planning to buy one for each of my grown sons but would want the latest allocation to be current in it. thanks, Ken

Michael from MA posted over 8 years ago:

I agree with Ken, I JUST set up the original portfolio! I had the same question about the overlap of EQAL and VOE. Found EQAL to take some time to buy...is it that thinly traded? Thanks to Ken and to Mr. Cloona. Michael

Connie from TN posted over 8 years ago:

Question: What if you are in withdrawal mode? Would you still add the 20% in iShares 1-3 Year Treasure Bond ETF (SHY) or other short term and then how would your percentages change? RSP -24%, EQAL - 24%, VOE - 24%, VNG - 8%, SHY - 20%?

Roxane from LA posted over 8 years ago:

Connie, pg 192 in book answers your question.

Michael Murray from VA posted over 8 years ago:

Suppose your young and have no real estate? How much REIT is showing up in the other indexes, 1%, 5% etc.

Michael Murray from VA posted over 8 years ago:

Probably answered my own question. The other ETFs have on average 5.2% real estate today, thus I like 16% VNQ, and 28% other 3.

Garry from VA posted over 8 years ago:

I've just read the book for the 2nd time and ready to invest in these 4 funds. I am a year into retirement but don't need any immediate income from the amount I will invest in these funds. My biggest concern is investing now with the current market highs. I know Mr. Cloonan says not to time the market but wonder if now is the best time to jump in at my age. With the runup that has taken place over such as short period of time, it's a little scary at this stage in life. If I was still in my working years, I wouldn't be concerned.

Ken Sovern from OH posted over 8 years ago:

I have the same concern as Gary. However, I will retire in two years.

Garry from VA posted over 8 years ago:

Hi Ken, It gets here quick. I bought Jim's book around the time it first came out. Even since then there has been such a runup that I wonder if one should wait but that is what I have been doing for nearly 5 years now and look at the returns I have missed. The funds I've had waiting for the right time have earned nothing waiting for a correction that never happened during that time. Do you know of anyone who has tried Joel Greenblatt's Magic Formula method?

DK from VA posted over 8 years ago:

The ETF approach needs more tech exposure from FDN, QQQ, and/or XLK.

John Lambert from NJ posted over 8 years ago:

Human nature makes it difficult to avoid heat chasing. I believe all categories of stock investments will have similar returns over the long term. And resisting the urge to re-allocate either to hot recent past performance or away from recent cold past performance will lead to better long term performance.

Mike Lawrence from IL posted over 8 years ago:

As a long term investor, market timing should not be a factor. There are always pullbacks, but the markets always return and continue to rise. Time and compounding are a long term investor biggest benefits. As the book suggests, keep enough liquidity to ride out the pullbacks, and just rebalance. If you are really concerned about the resent market climb, you can alway use dollar cost averaging. Move an equal amount each month into the four ETF's. And it doesn't hurt to add a little QQQ or SPY to the mix. There are even some good performing (low cost) mutual fund out there. Check out FNCMX

Ted from CA posted over 8 years ago:

Hey Garry. 10 months ago I created a portfolio of qty 30, 66+ million market cap stocks screened at magicformula.com. More than half of the choices are losers and the overall performance is about +2% factoring in short term gains/losses from the numerous major corporate transactions like mergers, etc. Over the next few months I'll be migrating the actively managed portion of my Level3 retirement account from Magic Formula to the AAII managed SSR and VMQ portfolios.

Ted from CA posted over 8 years ago:

Hey Garry. 10 months ago I created a portfolio of qty 30, 66+ million market cap stocks screened at magicformula.com. More than half of the choices are losers and the overall performance is about +2% factoring in short term gains/losses from the numerous major corporate transactions like mergers, etc. Over the next few months I'll be migrating the actively managed portion of my Level3 retirement account from Magic Formula to the AAII managed SSR and VMQ portfolios.

John Hallquist from TN posted over 8 years ago:

Since there is proxy vote on moving Guggenheim to Invesco, what effect on these recommendations does the movement of shares from RSP to Powershares Equal weight S&P 500?

Joseph Amatuzzi from NJ posted over 8 years ago:

I have the same question as John From TN.

Charles Rotblut from IL posted over 8 years ago:

John and Joseph, There shouldn't be a significant change in the how the S&P equal-weight ETF is managed. Dan Draper, Invesco's global head of ETFs, described his company as having been "very interested in getting this S&P 500 Equal Weight exposure really for quite sometime, but additional licenses were not available. Therefore, this is going to be we think very, very complementary." -Charles

Rex from WISCONSIN posted over 8 years ago:

I am currently 90% invested in AAII's SSR, DI and Shadow Stocks portfolios. Having read Level 3 Investing, I plan to migrate toward an intermediate approach to a Level 3 portfolio that will keep and expand my Shadow Stock portfolio. The transition is somewhat complex as existing investments are scattered in Roths, IRAs and taxable accounts and, are all in individual stocks, of course. I am also in the withdrawal stage, so some of my withdrawals come from minimum required distributions. Only 10 % of my combined portfolio is required to cover 4 years of living expenses, so I have actively invested half that portion. My question arises from a concern over optimization. While I will wish to simplify my involvement over time, how much am I probably lowering my line of reasonable expectation by shifting out of SSR and DI stocks (or VMQ stocks) and moving to Level 3 ETFs given that I will keep a substantial investment in Shadow Micro Stocks? Also, I am attracted to the comfort of maintaining my DI portfolio because of the extra cash flow it creates to augment my safety fund should more than 4 years be required. Could DI and/or SSR reasonably replace RSP, EQAL, VNQ or VOE at least during the transition? In general, how can these pre-existing AAII portfolios best be integrated with the newer Level 3 strategy? Thank you for your comments.

Garry from VA posted over 8 years ago:

Hi Ted, I believe Joel recommended using Magic Formula for a minimum of 3 years but adds that even then, there is no guarantee one will see the desired results. I thought it was interesting that Jim mentioned this system in the book as a resource for finding value stocks in addition to MSSP. I would like to hear from anyone who has used it long term to see what results that person had. I'm ready to start with L3P but may wait for the transition from Guggenheim to Invesco.

Randy from OK posted over 8 years ago:

This has nothing directly to do with these specific investments, but I believe is worth mentioning. As I read all these ideas and strategies (and compare them to my own), I think that in most cases the person that is heavily involved in investing has a significant other whose interest ranges from "not much" to "avoids investing discussions like the plague". My advice is to do one of two things before you die. Either make your portfolio so simple that a novice can understand and handle it or leave a detailed.....read "detailed" again.....letter of instruction to your loved one for after you're gone. The complexities of what we are discussing are a nightmare for someone who hates "investing speak". For my novice wife and family I have set up our locking, four drawer file cabinet to contain everything financial. The top drawer contains assets and nothing else. The second drawer contains important files of non-assets, such as homeowner and auto insurance policies, auto tags, home repair files, etc. Since life insurance is an asset, as is Long Term Care insurance, they are in the top drawer. The other two drawers obtain copies of living trusts, check records, extra checks, Information on assets, etc. And most important, in a brightly colored folder in the front of the top asset drawer, is a file labeled "Start Here". In this file is a handwritten, very detailed letter telling what is to be done to manage these assets, policies, etc and a list of account numbers and locations of accounts. Finally, I have provided a list of trusted advisors, by name and with an explanation of why they are trusted. Equally as important is a list of advisors that are not to be trusted and why. Note: the specifics of asset distribution are given in the trusts. The bank box contains the original trust, and all brokerage/bank passwords. It is important when you "bump yourself off" like this, to play through all the "what if" scenarios, because remember, you're gone now and can't be asked any more questions. Ask your spouse/significant other to contribute their questions too.....better now while you can actually answer them. And if you're squeamish about death or talking about it, get over it. None of us are get out of this life alive, so make it as easy on your surviving loved ones as you can. RC

John from MI posted over 8 years ago:

Randy has a great thought process. I had similar concerns so I used NOLO Willmaker to organize my records and created an Estate Book--a physical three ring binder. I highly recommend this, as opposed to a file cabinet, because it's indexed, and you can use it as a master file to lead heirs to everything they need to find, plus cover details like organ donations and other things you wouldn't think about. And it's portable for those with two homes. I have shown everyone in my family a copy of the book and have taken them through the organization of it. I have told them where it is located and that, in the event of my death, to immediately find the book. I have also discussed with them, my financial situation. I update this book quarterly. I am currently in the process of making a similar book for my spouse, in the event we both die or are otherwise incapacitated at the same time. You will save your love ones a lot of frustration--and money--if you do something like this. We learned the hard way from my wife's parents' estate.

Michael Fish from IL posted over 8 years ago:

Hello, I am unclear how I purchase these ETFs. Should I use a limit order, stop limit order, a stop loss, or a trailing stop loss $/%, or trailing stop limit $/%??? Please help. I have asked on the forum but no one has replied. I would like to invest but I don't know how to set the order time (limit? stop limit? stop loss??).

Rex Peterson from WI posted over 8 years ago:

Michael: How to aquire ETFs is not as complicated as it might at first seem. But you should not act before you understand how to do so. I assume you have an investment account with a brokerage company. They will help you with questions like this. Contact their local office or online services for help.

Richard Mangel from CO posted over 8 years ago:

I too have been interested in investing with this passive portfolio but have been waiting for the right time. I've decided that now might be the time since the market has peaked and is now about 10 % off it's highs. However, I'm considering using the Vanguard Total Market ETF (VTI) instead of the Guggenheim, Power Shares and the Vanguard Mid Cap ETFs recommended. The one drawback is that the Guggenheim ETF (RSP) has a better recovery time than VTI. (Probably because of the weighting?) I haven't tried to get a LRE for the recent market drops but the peak to peak 2008 market drop recovery times are about 5 years for VTI and about 4 years for RSP. For the 2015 market drop, the peak to peak recovery times are about the same (1 1/2 years for VTI ad 2 years for RSP.) The two benefits I see for using VTI vs RSP are 1) a lower expense ratio (.04% vs .20%) and 2.) higher returns for 1 year (21.17% vs 18.51% ) as well as the 3 year (11.09% vs 9.72%.) The 5 year returns are about the same. however, the 10 year returns favor RSP ( 8.74% vs 9.60%.) It also appears that using the total market approach would provide plenty of diversification and adding the Power Shares as well as the Vanguard Mid Cap ETFs would only lower the overall returns without adding diversification. I wonder if the recent return rates of VTI could possibly offset the recovery time disadvantage. I would appreciate any comments you out there might have.

Gary Kolb from AL posted over 8 years ago:

Are GSEW, EUSA and IVV close enough to RSP to substitude in view of there lower expense ratios?

Richard from CO posted over 8 years ago:

IVV has similar results as VTI with the peak to peak recoveries in 2008 and 2015 but neither are equal weighted. GSEW is quite new with little track record. In my opinion, of the 3 EUSA comes closest to RSP and has a slightly lower Expense Ratio.

Richard from CO posted over 8 years ago:

I've tried to determine if there are any redemption fees for either the RSP or the EQAL ETFs. When I look at the perspectives of each, I can't find an absolute answer. Any comments?

John from SC posted over 7 years ago:

Any thoughts on how to best include funds in retirement accounts with limited fund options in the overall strategy? My funds (25% of my overall portfolio) are currently in a Fidelity S&P500 fund in my 401k. My 401k also has a mid cap and small cap fund option, but not the ETFs in the Level3 strategy. Should I just leave those funds in the SP500 option and include this allocation in my overall 30% RSP bucket; split up the funds into options which most closely match RSP/EQAL/VOE/VNQ; or let the 401k S&P500 allocation ride solo and do a 30/30/30/10 allocation for the invested funds outside of the 401k? I am leaning toward option 1 but would appreciate a discussion as I am sure others have to grapple with this same issue.