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Re: Proposed: 35% Maximum Bond Allocation, For Life

I'm curious. Do you people who abbreviate million as MM abbreviate thousand as M?
by Aptenodytes
Thu Sep 18, 2014 8:11 pm
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 30
Views: 2722

Re: Immediate payable annuity is a bad investment?

That quote is one of the dumbest things I've read in a long time.
by Aptenodytes
Thu Sep 18, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 11
Views: 671

Re: Invest in Betterment or Bank for 4 years.

A lower-minimum fund directly at Vanguard makes more sense. Maybe ID your dream fund and people can offer next-best alternatives. How much do you have to deposit right now? Will you be adding regularly?
by Aptenodytes
Thu Sep 18, 2014 3:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Invest in Betterment or Bank for 4 years.
Replies: 9
Views: 448

Re: Question about popularity of HSAs

Re Fidelity, it seems odd to speculate when the information can be looked up easily. Here's what White Coat Investor reports. It is consistent with what people have said so far but more complete and precise: Fidelity is also in the HSA game, offering their usual assortment of brokerage options and m...
by Aptenodytes
Thu Sep 18, 2014 1:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about popularity of HSAs
Replies: 23
Views: 1290

Re: Revising AA, significant difference

30% bonds is not drastic. I agree with the others not to worry about the sub-categories. If you have access to a total stock market fund as opposed to the S&P 500 I would recommend moving there, but if not it is no big deal. Rather than worry about sub-categories, I would suggest rethinking your...
by Aptenodytes
Thu Sep 18, 2014 1:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Revising AA, significant difference
Replies: 6
Views: 442

Re: Home/Auto insurance: Amica or Travelers?

Amica does not compete seriously in the auto market where I live, ceding the territory to Geico. However, they are competitive in homeowners insurance and I've been with them for something like 6 years. I've had to file a few claims and the experience was super easy -- prompt, courteous and fair. I ...
by Aptenodytes
Thu Sep 18, 2014 12:45 pm
 
Forum: Personal Consumer Issues
Topic: Home/Auto insurance: Amica or Travelers?
Replies: 15
Views: 733

Re: Should I buy another fridge or freezer? Or neither?

Freezers aren't that expensive to buy and are fairly cheap to run. I've lived with an extra fridge before and have a stand-alone freezer now. I find the extra freezer to be far more useful. An unexpected benefit has proven to be storing large volumes of ice in the lead-up to major storms. Such ice c...
by Aptenodytes
Thu Sep 18, 2014 12:30 pm
 
Forum: Personal Consumer Issues
Topic: Should I buy another fridge or freezer? Or neither?
Replies: 7
Views: 473

Re: Proposed: 35% Maximum Bond Allocation, For Life

I'm not getting the premise. I can see setting bond percentage to 35% for all time. But that doesn't seem consistent with having the bond total be sufficient to meet all withdrawal needs under any scenarios. If stocks fall by half, then you will need to sell a lot of bonds to keep your 35% bond perc...
by Aptenodytes
Thu Sep 18, 2014 8:07 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 30
Views: 2722

Re: Proposed: 35% Maximum Bond Allocation, For Life

Would "minimal downside risk" be considered to also mean 1/3 of your assets? I know you said that question was rhetorical, but I'd like to amend that phrase to say "minimal long-term downside risk." The past 30 years (never mind 15 years) should be irrelevant in looking at histo...
by Aptenodytes
Thu Sep 18, 2014 7:27 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 30
Views: 2722

Re: Question about popularity of HSAs

Aptenodytes, who is your HSA through? Those are good points. My deductible is 5k so I feel like an HSA would be good for me. I'd like one that lets me invest in Vanguard funds like the one you mentioned. And this may be an ignorant question but if my spouse doesn't work and I'm head of household, c...
by Aptenodytes
Wed Sep 17, 2014 5:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about popularity of HSAs
Replies: 23
Views: 1290

Re: Question about popularity of HSAs

HSAs are limited by a list of eligible/ineligible expenses. 401K/IRA withdrawals are mostly limited by your age. I think most here would prefer to fill the 401K & IRA first because of the flexibility down the road. Also, IRAs and 401Ks, on average, have better investment choices than do HSAs. T...
by Aptenodytes
Wed Sep 17, 2014 4:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about popularity of HSAs
Replies: 23
Views: 1290

Re: Do you plan trips on your own or use a [travel agent]?

Good travel agents used to be indispensable. Now they are practically non-existent. Sadly, the on-line tools have not yet caught up to what the good agents used to be able to do.
by Aptenodytes
Wed Sep 17, 2014 4:19 pm
 
Forum: Personal Consumer Issues
Topic: Do you plan trips on your own or use a [travel agent]?
Replies: 36
Views: 1437

Re: Most cost effective means of protecting physical assets

Add "Getting to know your neighbors very well to the list." The things you list are generic; they protect across broad classes of threats. But you may be at more risk from a specific threat, and having good options to deal with them may end up making a lot more difference than the generic ...
by Aptenodytes
Wed Sep 17, 2014 11:43 am
 
Forum: Personal Consumer Issues
Topic: Most cost effective means of protecting physical assets
Replies: 47
Views: 3444

Re: What evidence would prove the Boglehead mentality wrong?

We don't have to scan the entire universe of beliefs and truisms that have some affinity with Bogleheads. I think the OP is asking a genuine question about the hard core. So my response would be that these two things would prove the approach wrong: 1) Alternatives to indexing can be identified which...
by Aptenodytes
Wed Sep 17, 2014 11:18 am
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 76
Views: 4307

Re: Betterment Explanation on Investment Returns

If you have this kind of interest and understanding of your investments, why not invest yourself with Vanguard instead of paying Betterment a portion of your investments? I agree. I have been puzzled by the recent discussion of Betterment experience on this forum. I guess it is case of distribution...
by Aptenodytes
Wed Sep 17, 2014 10:42 am
 
Forum: Investing - Theory, News & General
Topic: Betterment Explanation on Investment Returns
Replies: 11
Views: 674

Re: Randomly-weighted stock portfolios beat the index

The other interesting note in this paper to show that the value weighted portfolio is nowhere close to "optimal". On that point I'd beg to differ. Premiums for small-cap stocks have been known for quite a long time. The notion that one can improve one's Sharpe ratio by deviating from a si...
by Aptenodytes
Mon Sep 15, 2014 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1935

Re: Randomly-weighted stock portfolios beat the index

It is scary to me how dogmatic this forum is. All of the initial responses immediately shoot down this essay on the basis of arguments that are explicitly addressed and refuted within the essay. Does anyone here who has actually read the essay, have a rigorous rebuttal? Would love to hear grabiner'...
by Aptenodytes
Mon Sep 15, 2014 1:24 pm
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1935

Re: Randomly-weighted stock portfolios beat the index

If I were reviewing this for a journal I would insist on a running two additional tests: 1) Test the market-cap weight portfolio against a set of random- weight portfolios that are centered around market-cap weights , and 2) Test the random-weight portfolios in the current draft against a pure equa...
by Aptenodytes
Mon Sep 15, 2014 11:54 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1935

Re: Jack Bogle on "Advisers"

Bogleheads: It is instructive to read what Mr. Bogle wrote about advisers in Common Sense on Mutual Funds. This is a portion: Consider Carefully the Added Costs of Advice: Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do ...
by Aptenodytes
Mon Sep 15, 2014 9:34 am
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4350

Re: Randomly-weighted stock portfolios beat the index

Tantalizing abstract. Read it through very quickly. My first thought is that this is simply a rehash of the finding that equal weights beats market-cap weights, because equal weights is a form of small-cap tilt. He has a slight twist by, instead of assigning literally equal weights, he assigns weigh...
by Aptenodytes
Mon Sep 15, 2014 9:29 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1935

Re: Help Me Pick an HSA Investment

@Auream, that's a good point about moving money over more frequently than my example. I treat my paycheck-linked HSA as an emergency fund of sorts, so like having around $10K there, but if all it does in the stinko account is sit there waiting to be moved, moving more often makes sense.
by Aptenodytes
Sun Sep 14, 2014 9:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help Me Pick an HSA Investment
Replies: 6
Views: 581

Re: Time + Savings Rate > Asset Allocation

Thank you for starting this thread. This topic has a been a BIG pet peeve of mine. There are way TOO many "Should I do 2% in emerging small cap" vs. "How do I save more money" or "How do I get a higher paying job". Er, this is an investing forum. I don't mind the posts...
by Aptenodytes
Sun Sep 14, 2014 5:37 pm
 
Forum: Investing - Theory, News & General
Topic: Time + Savings Rate > Asset Allocation
Replies: 17
Views: 1576

Re: Help Me Pick an HSA Investment

This HSA with UMB was offered through my work. They make the payroll deductions and that money gets deposited into the account. I'm already maxing my Roth IRA and 401k (well almost - 16k of 17.5k possible) and was hoping to use the HSA as extra savings space. My understanding of Auream's comment is...
by Aptenodytes
Sun Sep 14, 2014 5:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help Me Pick an HSA Investment
Replies: 6
Views: 581

Re: How much value can an advisor add for the average invest

Catch 22. To know your advisor is adding value, you have to be able to judge the merits of their advice. And if you can do that you don't need the advisor. This sad truth nurtures a large parasitic industry.
by Aptenodytes
Sun Sep 14, 2014 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4350

Re: Car Advice: When to Replace?

... What I've been pleasantly surprised to discover is that the advances in short-term vehicle rental have made it quite easy to rent a cargo van or pick-up truck when such needs emerge. I can get a large cargo van for 90 minutes, at $24, taxes and fees included, with very fast transactions. I'm un...
by Aptenodytes
Sun Sep 14, 2014 1:10 pm
 
Forum: Personal Consumer Issues
Topic: Car Advice: When to Replace?
Replies: 37
Views: 2626

Re: Car Advice: When to Replace?

Minor observation. We recently went from being a minivan family to a 2-sedan family. We also run into the how-do-you-lug-large-things quandary. What I've been pleasantly surprised to discover is that the advances in short-term vehicle rental have made it quite easy to rent a cargo van or pick-up tru...
by Aptenodytes
Sun Sep 14, 2014 10:36 am
 
Forum: Personal Consumer Issues
Topic: Car Advice: When to Replace?
Replies: 37
Views: 2626

Re: Time + Savings Rate > Asset Allocation

The effects are multiplicative, so the risk of getting any one of them seriously wrong is devastating. It would be a mistake to be overly rigid with your generalization. A young person saving a lot could make horrible mistakes on the AA side -- for such a person the marginal impact of AA is gigantic...
by Aptenodytes
Sun Sep 14, 2014 10:30 am
 
Forum: Investing - Theory, News & General
Topic: Time + Savings Rate > Asset Allocation
Replies: 17
Views: 1576

Re: Help Me Pick an HSA Investment

Start looking up basic information on the funds at Morningstar. I looked up the global fund out of curiosity and it seemed horrible. You want to look at the expense ratio and the investment approach -- does it passively track a benchmark or actively seek out winners. You also want to look at the &qu...
by Aptenodytes
Sun Sep 14, 2014 8:31 am
 
Forum: Investing - Help with Personal Investments
Topic: Help Me Pick an HSA Investment
Replies: 6
Views: 581

Re: Feeling smug until 10 year ROR from Vanguard

Is "ROR" a legit acronym? Oy. Isn't "return" easier to say, read, hear, understand? I have no problem with "CAGR." That refers to a precise formulation of return that helps distinguish from alternatives. But "rate of return" and "return" are equally ...
by Aptenodytes
Sat Sep 13, 2014 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: Feeling smug until 10 year ROR from Vanguard
Replies: 78
Views: 6913

Re: The Annuity Puzzlement

Also, I have never understood - and will never understand - why people are willing to take market risk for decades to build up a portfolio. Then, give a big chunk of it away at the end in form of a risk premium payment to an insurance company. I don't understand what changes so drastically in someo...
by Aptenodytes
Sat Sep 13, 2014 3:28 pm
 
Forum: Investing - Theory, News & General
Topic: The Annuity Puzzlement
Replies: 88
Views: 4965

Re: Inherited tIRA-benefits to liquidating?

You are correct that because the inherited IRA has none of the immediate tax-deduction benefits one gets from a personal IRA, the calculus is different. I believe, based on admittedly slender evidence, that most people here keep their inherited IRAs and respond to the marginal incentives by concentr...
by Aptenodytes
Sat Sep 13, 2014 12:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited tIRA-benefits to liquidating?
Replies: 14
Views: 856

Re: The Annuity Puzzlement

I think you've made a basic case for an SPIA. But there are numerous other considerations. Here are two that I think most people are likely to be concerned about. 1) If you have any bequest motive, then you may be reluctant to give up 40% of your wealth to an SPIA. Your calculation only talks about...
by Aptenodytes
Sat Sep 13, 2014 9:52 am
 
Forum: Investing - Theory, News & General
Topic: The Annuity Puzzlement
Replies: 88
Views: 4965

Re: Newbie: Is my 10 year plan going to work?

Delay SS til age 70, and your long-term success rate will go up quite a bit. To understand it, run some scenarios under different assumptions. If you are borderline with a desired success rate you are a good candidate for purchasing a SPIA. That can nudge you over the edge. Try running some scenario...
by Aptenodytes
Sat Sep 13, 2014 9:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Newbie: Is my 10 year plan going to work?
Replies: 35
Views: 3133

Re: Three shares of stock, what to do with them?

You might be able to give them away at no cost if you have the paper certificates; get the charitable deduction and help someone out. You could just keep them indefinitely -- I don't see why you are worried about undiversified risk at the $75 level. I ended up with an orphan set of shares that came ...
by Aptenodytes
Fri Sep 12, 2014 5:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Three shares of stock, what to do with them?
Replies: 10
Views: 739

Re: Does it work for me-- HSA as a retirement savings vehicl

I don't know about the retirement savings, but I would really think twice about the HDHP as a health plan. The cost savings seems tiny for the reduction in benefits. My HDHP costs about a third of the regular health plan ($130 per month rather than $360). Yours seems to be a much bigger fraction. Ma...
by Aptenodytes
Fri Sep 12, 2014 4:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does it work for me-- HSA as a retirement savings vehicle
Replies: 3
Views: 488

Re: What's your take on this article about annuities vs 10/9

My take is that it is loony. If I'm reading the numbers right they are saying that It is better to invest in a 90%-safe-bond portfolio that returns around 10% annually than to buy a single-premium annuity that pays out 6.5% per year annually. Well, OK. But I can top that. Even better to invest in a...
by Aptenodytes
Fri Sep 12, 2014 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: What's your take on this article about annuities vs 10/90?
Replies: 9
Views: 912

Re: What's your take on this article about annuities vs 10/9

My take is that it is loony. If I'm reading the numbers right they are saying that It is better to invest in a 90%-safe-bond portfolio that returns around 10% annually than to buy a single-premium annuity that pays out 6.5% per year annually. Well, OK. But I can top that. Even better to invest in a ...
by Aptenodytes
Thu Sep 11, 2014 9:47 pm
 
Forum: Investing - Theory, News & General
Topic: What's your take on this article about annuities vs 10/90?
Replies: 9
Views: 912

Re: 100% Small and Value Tilting

40 is too short a period in my view for such a portfolio. Someone age 45 or so should have some bonds. And with a100% small value tilt the bond % should ramp up a bit high by the time of retirement.
by Aptenodytes
Thu Sep 11, 2014 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: 100% Small and Value Tilting
Replies: 70
Views: 3909

Re: I need a personal scheduler

You have discovered the calendar. It is built in to your IPhone and IPad already. Steve Jobs anticipated your need 7 years ago.
by Aptenodytes
Thu Sep 11, 2014 1:52 pm
 
Forum: Personal Consumer Issues
Topic: I need a personal scheduler
Replies: 24
Views: 1730

Re: What risk-return really means

The graph has no units or precisely specified mathematical function. It is an info-graphic, meant to convey a line of thought to people who don't understand the terms or concepts. The only point it makes is this: if you take on more risk in search of higher returns, the range of likely returns widen...
by Aptenodytes
Thu Sep 11, 2014 10:08 am
 
Forum: Investing - Theory, News & General
Topic: What risk-return really means
Replies: 41
Views: 2328

Re: Rather macabre but necessary question

Best wishes to you for a long and healthy life. I would suggest that you start collecting social security retirement benefits as soon as you are eligible (age 62). Contrariwise, one could delay SS to 70 as part of the black-swan protection strategy. Spend what you have aggressively, and if you end ...
by Aptenodytes
Tue Sep 09, 2014 2:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rather macabre but necessary question
Replies: 72
Views: 5344

Re: Should anyone invest in short-term bonds at this point?

Half my liquid bond money is in short-term investment grade corporates. The spread between short-term corporates and short-term treasuries widened last month. Most of my bond money remains illiquid, but I keep enough liquid to have on hand for rebalancing. Things would have to get much worse in the ...
by Aptenodytes
Tue Sep 09, 2014 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3742

Re: Do you keep paper copies of your investment statements?

I avoid paper wherever I can -- e.g. no paper statements from any of my retirement accounts. But my wife really likes getting things on paper, so for the things she's in charge of the paper comes in and gets scanned, curates for a year, then gets shredded.
by Aptenodytes
Tue Sep 09, 2014 11:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you keep paper copies of your investment statements?
Replies: 33
Views: 1890

Re: Do you keep paper copies of your investment statements?

I couldn't vote. I keep them for a year, then shred them. So I both keep and don't keep. I keep scanned copies indefinitely
by Aptenodytes
Tue Sep 09, 2014 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you keep paper copies of your investment statements?
Replies: 33
Views: 1890

Re: Prioritizing: Dream Home vs. Retirement Savings

Don't rely on HGTV for realistic information about second homes. You are mixing up different things here. How to spend vacations during your working years, and where to retire. If there is a Boglehead view on this matter, it is probably to separate those things. Your brain has all kinds of powers to...
by Aptenodytes
Tue Sep 09, 2014 10:34 am
 
Forum: Personal Consumer Issues
Topic: Prioritizing: Dream Home vs. Retirement Savings
Replies: 33
Views: 2049

Re: Philip Morris International and asset allocation

It doesn't matter. You have no basis for predicting if it will be more highly correlated with the US market or the non-US market, because it is such a narrow slice of the equity universe. When I'm stuck with things like this in my accounts I simply allocate them fractionally to multiple categories. ...
by Aptenodytes
Mon Sep 08, 2014 10:36 am
 
Forum: Investing - Theory, News & General
Topic: Philip Morris International and asset allocation
Replies: 8
Views: 654

Re: Looking for Bank in Haiti accepting US $ deposits

Normally you would just wire money to a bank account in Port au Prince. Mailing a cashier's check is not going to work unless you have someone on the ground willing to do the leg work for you. If you can't wire money you may be stuck paying the hefty fees associated with Western Union. Normally a ch...
by Aptenodytes
Sun Sep 07, 2014 4:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Looking for Bank in Haiti accepting US $ deposits
Replies: 1
Views: 254

Re: Question about Jonathan Clements's article on rebalancin

In these parts rebalancing means restoring your portfolio to its target asset allocation. If your target AA has one bond category and one stock category and nothing else, then rebalancing means selling or buying stocks, and selling or buying bonds. If your target AA has multiple categories of stocks...
by Aptenodytes
Sun Sep 07, 2014 4:16 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Jonathan Clements's article on rebalancing
Replies: 8
Views: 966

Re: Three portfolios: Which one?

There are two separate questions:

1) US or Global stocks
2) US or British bonds

All we know is you live outside the US. That means that the answer to (1) is Global.
The answer to 2 depends on whether you live in the UK or not. If yes, then go with British; if no, then go with US.
by Aptenodytes
Sat Sep 06, 2014 9:31 pm
 
Forum: Investing - Theory, News & General
Topic: Three portfolios: Which one?
Replies: 4
Views: 714

Re: Are there any real total bond funds?

Unless you want to take the position that the popularity of the Total Bund Fund should be leveraged to nudge more unsuspecting investors to increase their junk bond holdings. If that's the case then you are just wrong. This is in fact the position. What's so bad about holding junk bonds at market w...
by Aptenodytes
Sat Sep 06, 2014 9:25 pm
 
Forum: Investing - Theory, News & General
Topic: Are there any real total bond funds?
Replies: 65
Views: 2935
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