Cohousing-L Mailing List: Re: Reserve Fund suggestions

[Mac Thomson (macthomson]

At Heartwood Cohousing, we have about $250K of cash and investment holdings 
allocated as follows:
25% cash (in local bank and Vanguard MMF)
50% bonds (Vanguard tax-exempt bond fund: VTEAX)
25% stocks & REIT (Vanguard: VGSLX, VTIAX, VTSAX)

Our overriding strategy is to maintain relatively safe investments while 
earning a decent return. Our average return for the past 8 years has been 3.8%.

While I can understand the desire to be extremely conservative and not have to 
explain to homeowners why the finance team lost some of the community’s money 
last year through poorly preforming investments. In my opinion, being too 
conservative is likely to be worse for community finances because of lost 
opportunity cost. Even though lost opportunity cost doesn’t show up on the P&L, 
it’s a real cost nonetheless. Of our $250K of reserves, over $100K of that is 
from investment income over the past 20 years. 

-- 
Mac Thomson

Heartwood Cohousing
Southwest Colorado
http://www.heartwoodcohousing.com


"Endless years of wasted effort have made me the failure I am today.  And Thank 
God.  From what I've seen of so-called success, I want no part of it."
        - Murl Emery
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> On May 6, 2022, at 1:41 PM, Bruce Koloseike <koloseik [at] bellsouth.net> 
> wrote:
> 
> Hi All
> Given the present uncertainties in the economy, what suggestions are there to 
> be made relative to investments for our Reserve Funds?  At Westwood 
> Co-housing, we have been relatively conservative in our holdings and some are 
> coming due presently .  A general discussion would be appreciated
> 
> Thanks,
> Bruce Koloseike
> Westwood Cohousing in Asheville, NC
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