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Re: Buying more when markets are down

The Wizard wrote:Good thread.
Should I start putting $$ in my Extended Market fund NOW, or wait for it to go lower?
(How LOW can you GO???)


You're retired and don't need the small change. Go big or go home.
I say wait for the "Death Cross".
by Bustoff
Wed Oct 01, 2014 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: Buying more when markets are down
Replies: 35
Views: 1256

Re: Buying more when markets are down

Why limit the opportunity to a RBD (really bad day) when you can take advantage of a RBY (really bad year)?


http://chart.finance.yahoo.com/z?s=%5eGSPC&t=1y&q=l&l=on&z=l&c=GLD&a=v&p=s&lang=en-US&region=US
by Bustoff
Wed Oct 01, 2014 4:25 pm
 
Forum: Investing - Theory, News & General
Topic: Buying more when markets are down
Replies: 35
Views: 1256

Re: I picked up a penny today...

... The copper in the pre-1982 pennies is worth about 2 cents depending on the commodity value of the copper, so they hope to double their money once the penny is abolished (since it is illegal to melt down pennies now). In the early part of his book Boomerang, Michael Lewis interviews Texas hedge ...
by Bustoff
Tue Sep 30, 2014 6:07 pm
 
Forum: Personal Consumer Issues
Topic: I picked up a penny today...
Replies: 20
Views: 1810

I picked up a penny today...

... and thus earned more money than $10,000 earns in VMMXX over two days. :)
by Bustoff
Tue Sep 30, 2014 1:24 pm
 
Forum: Personal Consumer Issues
Topic: I picked up a penny today...
Replies: 20
Views: 1810

Re: Why not 100% CD's?

If you want to reduce your risk, first examine whether your portfolio w/ 0% real return can support your expected expenses. If it can, go for it! That sums up all you ever need to know about investing. Risk is the intentional interaction with uncertainty. More risk = more uncertainty Less risk = le...
by Bustoff
Sun Sep 28, 2014 11:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

That's interesting. Thanks for that information.
I recall Larry Swedoe recommending that one should gain 20 extra basis points in yield for each additional year.
No idea if that rule of thumb works for CD's.
by Bustoff
Sun Sep 28, 2014 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

If you want to reduce your risk, first examine whether your portfolio w/ 0% real return can support your expected expenses. If it can, go for it! That sums up all you ever need to know about investing. Risk is the intentional interaction with uncertainty. More risk = more uncertainty Less risk = le...
by Bustoff
Sun Sep 28, 2014 9:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

My current AA is 30/70. OK, so same as mine. Have you evaluated your risk tolerance in terms of ability, willingness and need to take risk? Using that framework, your posts make it sound like like your willingness to take risk may be decreasing. It also seems that perhaps you don't have the need to...
by Bustoff
Sat Sep 27, 2014 1:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

The cumulative rate of inflation from 1970-1979 was 87.1 % (US Inflation Calculator using Gov't CPI figures) If you're convinced that comparing equity volatility risk to inflation risk is specious for your situation I certainly hope you're right. Guess we'll find out. :happy Well let's be fair. Tak...
by Bustoff
Sat Sep 27, 2014 11:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

deleted
by Bustoff
Sat Sep 27, 2014 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

What is your current AA? My preference is to make AA changes gradually. Although I now have about 50% of my portfolio in direct CDs, I got here by gradually selling bond funds as rates dropped and prices rose, and using the proceeds to buy CDs. I also have been buying CDs when rebalancing out of st...
by Bustoff
Fri Sep 26, 2014 6:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

I truly appreciate the comments and suggestions. I am really questioning my entire IPS lately. Eliminating as much risk as possible has been the dominating thought. Some of you have pointed out that inflation erodes purchasing power. I think equating inflation risk to equity risk is a specious propo...
by Bustoff
Fri Sep 26, 2014 6:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

If there is a hyperinflation or a lengthy period of high inflation, it is unlikely that you will be compensated for your loss of purchasing power by rising interest rates, especially after tax effects. A reasonable proportion of your assets in gold would probably help in that situation, which is no...
by Bustoff
Fri Sep 26, 2014 4:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

staythecourse wrote:Either one chooses volatility on one side (100% equity) or inflation risk (100% fixed income) on the other side or some point in between.

Good luck.


I agree. Which choice poses more risk in distribution portfolio?
by Bustoff
Fri Sep 26, 2014 4:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

If you have a low risk tolerance your AA should reflect that. Staying away from equities 100% though will just be trading one risk (volatility) for another (inflation risk). Sbashore - I appreciate the thought, but would you not agree that at a low enough withdrawal rate, allocation matters little?
by Bustoff
Fri Sep 26, 2014 3:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

chaz wrote:Diversification?

In a distribution portfolio, diversification offers little protection against sequence of return loss.
by Bustoff
Fri Sep 26, 2014 3:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

John3754 wrote:The risk of being in 100% CDs with a current real return of 0% is if unexpected inflation shows up your purchasing power will be crushed.

These kind of broad statements might be more convincing if there were numbers directly correlated to the assertions.
by Bustoff
Fri Sep 26, 2014 3:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

It is still also a question what drives you to prefer CDs when TIPS explicitly insure against inflation at comparable real return I do not understand TIPS sufficiently (not for a lack of trying) to invest in them. I do not understand the meaning or the measurement "unexpected inflation". ...
by Bustoff
Fri Sep 26, 2014 3:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: Why not 100% CD's?

The risk of being in 100% CDs with a current real return of 0% is if unexpected inflation shows up your purchasing power will be crushed. Thanks John. But let me ask you this, if inflation became an issue, wouldn't CD rates be rising as well. Stocks are no guarantee against inflation. Rising rates ...
by Bustoff
Fri Sep 26, 2014 11:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Why not 100% CD's?

I'm beginning to believe that CD's may offer the best risk-adjusted reward for myself. Not sure if my risk tolerance is getting lower or it's just a transitional period, but I wanted get some feedback from the forum and make sure I'm not having a senior moment. If you believe Vanguard's latest forec...
by Bustoff
Fri Sep 26, 2014 10:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 4959

Re: The Villages Retirement Community Near Orlando

Not being retired yet can't speak to that, I am worn out from work by day end. But if Pickleball and Bingo and Pumpkin Carving and other items in crowded calendar sound like your thing then go for it. LOL - I wondered where you came up with that list of activities. Then I looked at the calender pos...
by Bustoff
Fri Sep 26, 2014 9:49 am
 
Forum: Personal Consumer Issues
Topic: The Villages Retirement Community Near Orlando
Replies: 72
Views: 7559

Re: The Villages Retirement Community Near Orlando

... my idea of a nice evening is a small glass of wine and a good book. Each to his own. And I'm just the opposite. I hate sitting around and get bored easily. I couldn't wait to retire. The repetitiveness of work began to wear me down. However, having been retired a few years now, I would say the ...
by Bustoff
Fri Sep 26, 2014 9:23 am
 
Forum: Personal Consumer Issues
Topic: The Villages Retirement Community Near Orlando
Replies: 72
Views: 7559

Re: The Villages Retirement Community Near Orlando

placeholder wrote:They just had a bit on Inside Edition about the sometimes wild "activities" there.


Really? I was concerned it might be too dorky.
by Bustoff
Thu Sep 25, 2014 7:48 pm
 
Forum: Personal Consumer Issues
Topic: The Villages Retirement Community Near Orlando
Replies: 72
Views: 7559

Re: The Villages Retirement Community Near Orlando

Came across this older thread while looking for feedback from people who have lived in The Villages Retirement Community in Florida. Unfortunately, the previous discussion veered off into a "buy vs. rent" debate and stopped there. Attempting to resurrect the thread for more opinions. Anywa...
by Bustoff
Thu Sep 25, 2014 3:26 pm
 
Forum: Personal Consumer Issues
Topic: The Villages Retirement Community Near Orlando
Replies: 72
Views: 7559

Re: We're all going to die!!!

technovelist wrote:The S&P 500 is down 1.3%!!!! :greedy


Since friday, VTI down 3% and VXUS down 3.5%

Maybe time for some opportunistic re-balancing.
by Bustoff
Thu Sep 25, 2014 2:19 pm
 
Forum: Investing - Theory, News & General
Topic: [S&P is down 1.3%, thus] We're all going to die!!!
Replies: 58
Views: 4726

Re: It's pretty freaky watching your stocks go up & down all

To all the posters who worry about deploying capital at lofty levels, please let us know if you're buying today.
by Bustoff
Thu Sep 25, 2014 1:06 pm
 
Forum: Investing - Theory, News & General
Topic: It's pretty freaky watching your stocks go up & down all day
Replies: 60
Views: 5420

Re: It's pretty freaky watching your stocks go up & down all

It's a sickness. A guy at work constantly had is portfolio displayed on his computer screen.
by Bustoff
Thu Sep 25, 2014 10:46 am
 
Forum: Investing - Theory, News & General
Topic: It's pretty freaky watching your stocks go up & down all day
Replies: 60
Views: 5420

Re: Treadmills

Running outside during winter doesn't hold the same allure as it used to. I need to find one before the prices go up.
by Bustoff
Thu Sep 25, 2014 10:11 am
 
Forum: Personal Consumer Issues
Topic: Treadmills [vs. Ellipticals]
Replies: 54
Views: 3305

Re: What's Your Takeaway from 2014 High Valuation

Like any other product or service.
If I already have enough, then I have the luxury of waiting for them to go on sale. And there are always sales.
by Bustoff
Thu Sep 25, 2014 9:30 am
 
Forum: Investing - Theory, News & General
Topic: What's Your Takeaway from 2014 High Valuation
Replies: 52
Views: 4054

Re: Cliff Notes (new post from Asness) IMO very well worth r

What would a practical example of this? In other words, how would an individual investor put this into practice?
by Bustoff
Thu Sep 25, 2014 2:56 am
 
Forum: Investing - Theory, News & General
Topic: Cliff Notes (new post from Asness) IMO very well worth readi
Replies: 20
Views: 2412

Re: Take Social Security at FRA, or Early, or Delayed?

In addition to calculating the payout differences for early v. FRA v delayed benefits, I think you have to account for the potential of a significantly reduced quality of life in later years. In other words, if I wait to 70 to collect, and live to 80, how much will I be able to enjoy the higher pay...
by Bustoff
Wed Sep 24, 2014 10:12 am
 
Forum: Personal Finance (Not Investing)
Topic: Take Social Security at FRA, or Early, or Delayed?
Replies: 49
Views: 2690

Take Social Security at FRA, or Early, or Delayed?

From a recent Motely Fool article: Why Taking Benefits at 62 Is Smarter Than You Think If you expect to live past 77, then you should wait until full retirement age to begin collecting benefits, as it's at this point when the gain from waiting overtakes the cumulative cost -- see "A" in th...
by Bustoff
Wed Sep 24, 2014 9:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Take Social Security at FRA, or Early, or Delayed?
Replies: 49
Views: 2690

Re: Biggest discretionary expense in retirement?

For us it has been travel and a bigger boat.
by Bustoff
Wed Sep 24, 2014 3:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Biggest discretionary expense in retirement?
Replies: 29
Views: 2920

Re: What did you always wish for but never got?

What was it you wanted? Always wanted a puppy. Why did you want it so bad? I was a lonely child. Did you get it when you wanted? Never. If not, did you get it yourself when you became an adult? Yes. When I was in college, I traded a bag of weed for a blind dog. He would sound locate by looking up an...
by Bustoff
Wed Sep 24, 2014 3:38 am
 
Forum: Personal Consumer Issues
Topic: What did you always wish for but never got?
Replies: 87
Views: 5067

Re: Total Stock Market Dividends

deleted
by Bustoff
Tue Sep 23, 2014 11:58 am
 
Forum: Investing - Theory, News & General
Topic: Total Stock Market Dividends
Replies: 18
Views: 1161

Re: Total Stock Market Dividends

livesoft wrote:
Bustoff wrote:I guess you didn't notice I also left out the "risk" associated with a stock and bond portfolio, just to be fair.

… and any differences in taxation of dividends from TSM versus dividends from CDs.

I was simply noting the yields. But thanks for alerting us.
by Bustoff
Tue Sep 23, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: Total Stock Market Dividends
Replies: 18
Views: 1161

Re: Total Stock Market Dividends

True, each has different risks. SPIAs are certainly a good option for those who need the insurance aspect of the product. CDs and SPIAs have more risk of inflation and may be less tax efficient. SPIAs also box you in if you have lumpy spending patterns or wish to leave money to heirs or charities. ...
by Bustoff
Tue Sep 23, 2014 11:21 am
 
Forum: Investing - Theory, News & General
Topic: Total Stock Market Dividends
Replies: 18
Views: 1161

Re: Total Stock Market Dividends

So lets say retiree has a one has a million dollar portfolio with a 50/50 allocation. 50% Vanguard Total Stock Market is yielding 1.80% or $9,000 per year. 50% Vanguard Total Bond Market is yielding 2.13% or $10,650 per year. So the 50/50 portfolio pays $19,650 per year. But $1 million in five-year...
by Bustoff
Tue Sep 23, 2014 11:11 am
 
Forum: Investing - Theory, News & General
Topic: Total Stock Market Dividends
Replies: 18
Views: 1161

Re: Total Stock Market Dividends

So lets say retiree has a one has a million dollar portfolio with a 50/50 allocation. 50% Vanguard Total Stock Market is yielding 1.80% or $9,000 per year. 50% Vanguard Total Bond Market is yielding 2.13% or $10,650 per year. So the 50/50 portfolio pays $19,650 per year. But $1 million in five-year ...
by Bustoff
Tue Sep 23, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Total Stock Market Dividends
Replies: 18
Views: 1161

Re: Risk and the Trinity Study

It's the withdrawal rate that is crucial ... OTAR is talking about the risk that your distribution portfolio retains a permanent loss. Whereas, the Trinity Study risk the the risk of having to curtail spending to avoid running out of money. These are different outcomes, apples vs oranges. I'm confu...
by Bustoff
Tue Sep 23, 2014 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Why I sold my gold, and would sell commodities too

Browser - Thanks for sharing both your experience and analysis.
by Bustoff
Tue Sep 23, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Why I sold my gold, and would sell commodities too
Replies: 56
Views: 4020

Re: Risk and the Trinity Study

It's the withdrawal rate that is crucial rather than percentage of equity according to Otar. And he does not believe time mitigates equity risk. The concept of “long–term” exists only in accumulation portfolios. There is no such thing as “long term” in a distribution portfolio. As soon as your perio...
by Bustoff
Tue Sep 23, 2014 9:50 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Does Equity Risk Decrease over Time?

Does Equity Risk Decrease over Time? The concept of “long–term” exists only in accumulation portfolios. There is no such thing as “long term” in a distribution portfolio. As soon as your periodic withdrawals start, “long–term” ceases to exist, and the “luck factor” takes control of the outcome. Disr...
by Bustoff
Tue Sep 23, 2014 9:46 am
 
Forum: Investing - Theory, News & General
Topic: Does Equity Risk Decrease over Time?
Replies: 51
Views: 2617

Re: Vanguard Quarterly Dividends in September

You all sound like you're teetering on the edge of subsistence. :D


Image
Free soup available for panicked Vanguard clients who didn't get their dividend checks.
by Bustoff
Tue Sep 23, 2014 8:28 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Quarterly Dividends in September
Replies: 40
Views: 5019

Re: How to build a Vanguard portfolio

Why don't you pose this question to your financial adviser ?

https://personal.vanguard.com/us/funds/tools/recommendation
by Bustoff
Tue Sep 23, 2014 8:08 am
 
Forum: Investing - Help with Personal Investments
Topic: How to build a Vanguard portfolio
Replies: 10
Views: 969

Re: Biggest discretionary expense in retirement?

26 years ago it was travel. Now it's home health care for my spouse; some of it to help stabilize his condition, some to relieve the burden on me. None of it is paid for by Medicare or our former employer supplementary insurance. More will be needed eventually. We are fortunate enough that we can m...
by Bustoff
Mon Sep 22, 2014 6:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Biggest discretionary expense in retirement?
Replies: 29
Views: 2920

Re: Southwest Airlines Engulfing, Reversal Candle Signals Do

avalpert wrote:Did someone take a wrong turn on the internet superhighway?


good one :D
by Bustoff
Mon Sep 22, 2014 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: Southwest Airlines Engulfing, Reversal Candle Signals Downsi
Replies: 55
Views: 3250

Biggest discretionary expense in retirement?

When the market underperforms, discretionary spending may need to be reduced for some of those in retirement.

What is your biggest discretionary expense in retirement ?
by Bustoff
Mon Sep 22, 2014 2:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Biggest discretionary expense in retirement?
Replies: 29
Views: 2920
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