Bogleheads.org

BetaBreaker wrote:OK, probably over thinking this ... is a very short period to compare. Appreciate your views.

No, you are underthinking this. A + B does not necessarily equal C.

My brother recently came to me and asked if I could help him straighten-out his IRA, which was invested in a random hodge-podge of expensive funds. I recommended a 3-fund index portfolio, split evenly. He implemented it, and after a couple of weeks (after the recent stock-market run-up), he called m...

Is there a correlation between rising interest rates and capital return in bond funds? jb Of course - is this a trick question? No. Bond funds have capital return and income return. When added together they become the total return. Just wondering if they are both effected the same by rising interes...

Epsilon Delta wrote:So who gets the advantage of this "bid offer spread"?

Let's see - real estate agents, mortgage companies/banks, moving companies, furniture companies, drapery companies, cleaning services,....shall I go on?

jb1934 wrote:Is there a correlation between rising interest rates and capital return in bond funds?
jb

Of course - is this a trick question?

Classic case of market timing. It doesn't work.

I like to allocate without consideration to Social Security. If it comes to fruition, it will be treated as found money. That is the conservative approach.

In my view, thinking in terms of bonds versus no bonds is flawed. Really, assets should be dichotomized into risky and safe categories. In the risky category, we have equities and perhaps real estate. The safe category can include high-quality short-term bonds and even high-quality intermediate bond...

Basing broad asset-class conclusions on observation of the past 10 years is a flawed approach.

Most of those pretty colored boxes have positive return numbers because rates have been falling over that time period. How will you feel about the pretty little boxes when all of the return numbers have minus signs in front of them?

Curly, Sounds like you put in a reasonable effort to make things work. I have always had a problem with the concept of a vow that can be broken. Maybe the vow should be removed from the ceremony, so that it is clear to everyone involved the marriage is really a legal contract subject to various term...

I suggest simple things like marriage counseling, church counseling or a self-help course from landmark education. I have seen all three save a marriage. Why in the name of God would she want to save this marriage? The man is bringing her down. Without him changing how could this be salvaged? I gue...

I am in a balanced fund so really don't have to worry about rebalancing. When the market tanks as it did in 2008, those who are in individual stock and bond funds and maintain their AA actually seem to have an advantage because they can buy more of the decreasing asset and sell more of the increasi...

I'd sell half.

My reasoning is that if interest rates rise, which they are almost certain to do at some point , my principal is protected. I am also considering dividend paying stocks but for an entirely different reason. My thought there us that if the stock declines in value I still have the dividends. Until th...

Jack,

Happy Birthday, and continue to stand on principle...even if (in some situations it seems that) you stand alone.

Rising rates are good for long-term holders of intermediate bond funds.

I don’t keep a budget, just track my expenses and understand where money goes. - No car – live in Boston and public transportation is decent - Property tax with residential exemption comes under 2000 per year, though do have a non-trivial condo fee (which includes all major maintenance and utility)...

I am surprised that you can keep your expenses to 16K. Taxes on the house are probably 4k. If you spend 200 bucks per week on food (modest), that's another 10.5k. Then gas at 12k miles per year, 20 mpg is 2.1k. Right there you are over 16k. No car repairs, cable, homeowner's insurance, telephone, e...

I am surprised that you can keep your expenses to 16K. Taxes on the house are probably 4k. If you spend 200 bucks per week on food (modest), that's another 10.5k. Then gas at 12k miles per year, 20 mpg is 2.1k. Right there you are over 16k. No car repairs, cable, homeowner's insurance, telephone, en...

frugalhen wrote:
Am I wrong to think there is an advantage to keeping my non stock portion in a money market and rebalance when the stocks dip rather than holding bonds?.

No way to know ahead of time - can be a good or bad decision depending upon future interest rates.

One would really need to know his expenses to give any kind of meaningful advice.

Sbashore wrote:I agree. 3% without interest rate risk is a real deal these days.

I assume the pun was unintended.

lostInFinance wrote:

connya wrote:If investors shouldn't hold company stock of their employer (due to risk of losing job AND investments), why is it a good idea for investors to overweight their home country?

Short answer: international currency risk

You must mean currency diversification.

Instead of listening to this or any advisor, I recommend that you educate yourself on investing.

Currently about 32% equities, with various tilts.

Nothing to do with finding a wife or having children. If that happens, you can move to a bigger place.

I see no justification to deviate from global market capitalization if one believes in broad diversification. The cost of international investing is comparable (now) to US investing, and the currency risk can be thought-of as currency diversification. The US is now only about 30% of world market cap.

Why are you comparing gold's best decade ever with one of small-cap's worst? Look what happened during the next decade.

This article may not be asking the real question on most Boglehead's minds. It is not "should I dump bonds in favor of riskier assets", but "should I hold SAFE investments without interest rate risk instead of intermediate bonds (I-Bonds, bank CD's, cash, etc)." That is a much ha...

I'm wondering whether the Permanent Portfolio would be more appropriate than an 80/20 stock/bond allocation. Incredibly, it seems to have done just as well as even a 100% stock portfolio over the past 30 years or so, despite the fact that it only holds 25% stocks... and yet it has done so with sign...

Were there any? Most investors suffered in the last stock market crash. After the downturn, Bogleheads who stayed the course did quite well. We could have another panic. Or maybe not. My question for the Bogleheads: Did the crash change your investment strategy in any way whatsoever? Good question....

Random Musings wrote: Fails to neglect that treasuries are typically the place to be when flight to quality situations occur.

The IPS is intended to capture not just the what, but also the why. To each his own, but my IPS is fairly detailed - and then I have an IPS summary to capture it all on (essentially) an index card.

I believe that is Jack Bogle's line.

jon-nyc wrote:Because they can get an even lower rate on them with minimal risk, I suppose.

Sure, but not sure why I would bother buying them.

I'd much rather own the S&P 500 - although even that shouldn't comprise too much of your portfolio.

I know conventional wisdom says one should not own long-term treasuries because of interest rate risk. However, they seem to be inversely correlated with stocks. When stocks are doing well, long-term treasuries are doing poorly and vic- versa. It seems like this would provide rebalancing opportunit...

This is a misunderstood statement, Stocks are only 'safer" in terms of the probability you will lose money compared to the value on the day you invested. The probability of losing money (or however else you choose to define risk) relative to any present time t is theoretically a constant.

Calm Man wrote:[Rude comments removed by admin LadyGeek]

I disagree. He knows exactly what he's doing. I agree wholeheartedly with him on this topic and I am invested accordingly.

Lots of people are talking about shortening the duration of their bond holdings to protect against intereast rate risk should rates start to rise. If I'm a long term, buy and hold investor though, then why should I shorten the duration of my bond holdings? It is only a good idea if you believe that...

The vast majority of my retirement savings ($1,200,000) is sitting in cash. I have been afraid to invest for the last couple years (and I was always a pretty aggressive investor) thinking that the market was going to take a dive. Well, of course the market has gone up and up and now I am REALLY thi...

Owning Berkshire is no different fundamentally from owning any other single stock. That's why I don't bother.

I am surprised that they will have a maturity of only 2 years. The interest rate risk on a 2 year nominal note is pretty small to begin with.

I use a short-duration brokerage CD ladder.

gerrym51 wrote:barclay bank 60 month cd 1.75 . 90 day penalty but the interest rate is higher

Just make sure you read the fine print.

Whatever happened to "past performance does not guarantee..."

This is hard to explain. I do try to time the market a little by using weekly charts, but I have been invested almost all of the time since I started in 2010. For some reason, I moved all of my money out of the market except for a 10% position in EDV (bought at $110, today hurt a little), and now I...

zed wrote:
For me having reached my goal, it's time to take some, not all, some of the chips off the table.

Zed

Maybe. It should be specified in your IPS.

IMO, if you had to hire an advisor in the first place, you are not capable (or ready) of doing it on your own - and shouldn't fire him or her.