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Re: Michael Spence: Are Equities Overvalued?

How do we even know what the appropriate valuation should be? It's all supply-demand in the equities market. Demand is high right now (the average investor is holding lots of equities) and for all we know it could remain constant, or increase further. Check out this chart: http://www.philosophicale...
by Noobvestor
Sun Mar 29, 2015 5:11 am
 
Forum: Investing - Theory, News & General
Topic: Michael Spence: Are Equities Overvalued?
Replies: 13
Views: 1497

Re: Risk Questionnaires: How they work?

1. No. Was not-of-investing-age in '08. 2. As a percent: 25% of invested assets, retirement and taxable accounts. 3. 85/10/5 stock/bonds/REIT fund. #3 contradicts #2. If you can only stomach 25% losses, you should be no more than 50% in stocks and REITs, because they could drop 50%+ in a downturn. ...
by Noobvestor
Sun Mar 29, 2015 4:32 am
 
Forum: Investing - Theory, News & General
Topic: Risk Questionnaires: How they work?
Replies: 18
Views: 1113

Re: "TIPS. Love them or leave them?"

And the very risk that they purport to defend against--an unexpected uptick in inflation--is nowhere on the horizon. Fancy that! You'd think the least an unexpected threat could do would be to let us have a bit of warning. You have to cut her a bit of a break. She had a 200-word article that an edi...
by Noobvestor
Fri Mar 27, 2015 4:20 am
 
Forum: Investing - Theory, News & General
Topic: "TIPS. Love them or leave them?"
Replies: 16
Views: 1956

Re: How important is an international allocation?

So true. I thought I tried to make that point earlier about it not mattering too much what one does if one is extremely wealthy. It is important to remember the biases , however innocuous they may seem. And the low equity allocation of older investors does give them room to be a bit more cavalier a...
by Noobvestor
Thu Mar 26, 2015 12:55 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

It's graphs like that that keep me from making a decision. All the [past] data (let's not forget the fact that it is in the past) shows international essentially bringing down a portfolio. But diversification should indicate that owning all the total world stock market is better than only owning th...
by Noobvestor
Wed Mar 25, 2015 4:02 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

...When one asset class zigs a bit while the other one zags a bit, you get a bit smoother ride in your portfolio... Vanguard Total World Stock Index Fund, VTWSX, is globally cap-weighted and thus about 50/50 US/International and ought to show that "smoother ride." Since inception, has the...
by Noobvestor
Wed Mar 25, 2015 3:59 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

A position I am [obviously?] tempted to take myself. I feel like an international allocation is essentially a bet against the US economy. I am hard pressed to find data to strongly support betting against the US economy over the long term. I think you're looking at this the wrong way. If you index ...
by Noobvestor
Wed Mar 25, 2015 3:51 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

Just out of curiosity, would you happen to have the source for that quote? I would love to read the context. Sure thing - he said it at Bogleheads 11 (Reunion): http://www.bogleheads.org/forum/viewtopic.php?f=10&t=104781&newpost=1521456 You'll notice some of my other notes, like: ) Predicti...
by Noobvestor
Wed Mar 25, 2015 3:48 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

Like so many things in investing, the performance of international stocks relative to U.S. stocks has periods of outperformance and underperformance that last for periods of, let's say, a decade or so. During the "lost decade" of 2000-2009 a lot of people liked to point out that it wasn't...
by Noobvestor
Sun Mar 22, 2015 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

I am entirely contrarian on this topic. I have 0% international, my entire equity holding is in the U.S. total stock market. Why? Because all the advice about moving to international is based as far as I can tell, 100%, on backtesting . I wouldn't call that contratian at all. You are sticking with ...
by Noobvestor
Sun Mar 22, 2015 2:14 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

RevYoung wrote: " What I'm trying to figure out is whether or not to bother with an international allocation for my emergency fund." You are going to have to go a long way to find a more thoughtful response (and framework for analysis) than that provided by Nisiprius. Increasing exposure ...
by Noobvestor
Sun Mar 22, 2015 2:13 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: How important is an international allocation?

Check this out: http://www.bogleheads.org/forum/viewtopic.php?f=10&t=104781&newpost=1521456 My personal favorite Jack Bogle quote out of the mix: "If there's one place I don't want people to take my advice, it's international. I want you to think it through for yourself." I am not ...
by Noobvestor
Sun Mar 22, 2015 3:52 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4553

Re: Three fund portfolio in tax-advantaged account

So, in a three fund portfolio in a tax-advantaged account, which fund or combination of funds would you put in your Roth (versus traditional) IRA? Thank you. The general rule of thumb is to put highest earning potential in Roth (emerging markets and small caps for a larger tilted portfolio, or dome...
by Noobvestor
Wed Mar 18, 2015 4:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Three fund portfolio in tax-advantaged account
Replies: 2
Views: 358

Re: Bonds in Taxable when you expect tax bracket to change

First, bond fund navs don't change that much over time since most of the gains ultimately come from payouts, so generally if you want to switch bond funds in taxable it's not a huge tax hit: http://quotes.morningstar.com/chart/fund/chart.action?t=VBMFX&region=usa&culture=en-US&dataParams...
by Noobvestor
Wed Mar 18, 2015 3:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable when you expect tax bracket to change
Replies: 1
Views: 283

Re: Definition of financial independence?

ShiftF5 wrote:I like William Bernstein's reference (paraphrased) --

Expenses - Passive Income = RLE (Residual Living Expenses)

25 x RLE (Age 60)
20 x RLE (Age 65)
17 x RLE (Age 70)

= Financial Independence

ZERO DEBT w/ a Paid Off Home & Car Set the Stage for Low Expenses.


But what if I'm only 35?!
by Noobvestor
Tue Mar 17, 2015 12:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Definition of financial independence?
Replies: 52
Views: 4835

Re: Definition of financial independence?

That seems like a much more reasonable definition than the wishy-washy versions I see being peddled by personal finance bloggers.
by Noobvestor
Mon Mar 16, 2015 5:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Definition of financial independence?
Replies: 52
Views: 4835

Re: International is disappointing

Here's a new wrinkle to this thread. VITPX in our 401K has a really low ER of .02%. VANG TOT INTL STK IS (VTSNX) 04/29/1996 Stock Investments Foreign has an ER of 0.12%, or 6x as much. Just a mathematical quibble. The 6x ratio you cite isn't really an important or significant number and it's distra...
by Noobvestor
Mon Mar 16, 2015 4:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: International is disappointing
Replies: 84
Views: 7166

Re: Starting a New Business with a Partner - Setup Questions

Stake -- Need more information about the business (product, service, etc.), assets, time commitments, capital needs, value/contributions of each participant, etc. to determine what may be appropriate. Good questions one and all. 1) product/service is complicated because we may ultimately pursue mul...
by Noobvestor
Mon Mar 16, 2015 4:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Starting a New Business with a Partner - Setup Questions
Replies: 11
Views: 717

Re: How much international is too much?

Just to play Devil's Advocate: 1/3 exposure to just one country is a pretty big bet on that country, all else aside. Imagine if we were talking about an index fund that held 1/3 just one stock. I don't think it's entirely irrational to suggest someone could look at that and still want to tilt furth...
by Noobvestor
Mon Mar 16, 2015 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9131

Re: Starting a New Business with a Partner - Setup Questions

Great suggestions and resources so far - thanks! @Harbormaster: Interesting thoughts re:join venture vs. partnership. Some of the issues raised by Dave are definitely concerns I want to address in advance, like variable inputs depending on time/passion of contributing parties, as well as separation ...
by Noobvestor
Mon Mar 16, 2015 3:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Starting a New Business with a Partner - Setup Questions
Replies: 11
Views: 717

Re: Should tilters recommend tilting to beginners?

I see a lot of Bogleheads say 20% in international is good enough - some even say 0% is fine. Dramatic tilts toward US stocks. Personally I don't recommend tilting that severely, particularly for beginners.
by Noobvestor
Mon Mar 16, 2015 5:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Should tilters recommend tilting to beginners?
Replies: 49
Views: 2743

Starting a New Business with a Partner - Setup Questions

Context: I have run a series of (small) businesses for close to a decade now. Each has (in general) had its own pass-through LLC and I have had various contractors do various work over the years as needed. One of those contractors has been particularly vital but historically has wanted to be paid h...
by Noobvestor
Sun Mar 15, 2015 9:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Starting a New Business with a Partner - Setup Questions
Replies: 11
Views: 717

Re: How much international is too much?

How much international is too much? More than you personally are comfortable with but in no case to exceed international cap weight in global indexes. Have to strongly agree with GW here. Once your international allocation reaches the cap-weights in the global stock index (about 50% U.S./50% Intern...
by Noobvestor
Sun Mar 15, 2015 9:22 pm
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9131

Re: How much international is too much?

A few ways to look at this. 1) 50/50 is neutral, so as with any tilt you have to decide your own comfort level with tracking error relative to that point. Personally I could imagine a world in which I would tilt up to 75% international, but the valuation situation would have to be much more extreme...
by Noobvestor
Sun Mar 15, 2015 5:33 am
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9131

Re: How much international is too much?

I did not read the other replies yet, but according to John Bogle international is not necessary so if you feel the need to do it, no more than 20%. He has never held it and for the last 20 years neither have I. Warren Buffett also agrees on this. I think I'm in good company. In other words, don't ...
by Noobvestor
Sun Mar 15, 2015 5:30 am
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9131

Re: POLL: Do you use your HSA funds to pay for medical expen

It increases our Roth IRA space by more than 50% per year. Not going to waste that on medical expenses if I don't have to. I'm confused - does an HSA have both the best properties of a tax-deferred and a post-tax account? I.e. You don't pay taxes on the money you put in and you don't pay taxes when...
by Noobvestor
Sat Mar 14, 2015 5:12 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Do you use your HSA funds to pay for medical expenses?
Replies: 84
Views: 5950

Re: How much international is too much?

A few ways to look at this. 1) 50/50 is neutral, so as with any tilt you have to decide your own comfort level with tracking error relative to that point. Personally I could imagine a world in which I would tilt up to 75% international, but the valuation situation would have to be much more extreme ...
by Noobvestor
Sat Mar 14, 2015 3:18 am
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9131

Re: Stock Market going south what's next?

allna wrote:I'm mostly a lurker/newbie around here, but it seems silly to pretend that there's not something happening in the markets when there obviously is.


I'm not seeing it ... when I chart it out, all I see is tiny blips in the grand scheme of things.
by Noobvestor
Thu Mar 12, 2015 4:30 am
 
Forum: Personal Finance (Not Investing)
Topic: Stock Market going south what's next?
Replies: 31
Views: 4021

Re: Time to buy up EUR?

Why do you think the pendulum will swing back anytime soon? What if it never does?
by Noobvestor
Thu Mar 12, 2015 4:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Time to buy up EUR?
Replies: 30
Views: 2373

Re: Using EE and/or I Bonds Instead of Bond Funds

I have been maxing out on i-bonds for several years now to move my emergency funds into that space from the miserable money market accounts. For some unknown reason, I ignored EE bonds until this year, when I came to the realization that doubling value in 20 years yields 3.5%.... which is much high...
by Noobvestor
Wed Mar 11, 2015 12:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Using EE and/or I Bonds Instead of Bond Funds
Replies: 50
Views: 5038

Re: Convince me to buy international funds

http://i.imgur.com/pFWhA0q.jpg Healthcare sector has beaten the US total market for the last 20 years, too - and by a much larger margin than US stocks beat international stocks. Should you avoid other US sectors and assume the same will be true going forward, therefore just investing in healthcare...
by Noobvestor
Sun Mar 08, 2015 5:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Convince me to buy international funds
Replies: 34
Views: 2521

Re: Mr. Money Mustache: Hero or Foolish?

Dave's "thing" is getting out of debt. MMM's "thing" is spend less, save more, realize you can retire earlier with less money. Then perhaps both of them should stick to their "thing" and stop talking nonsense when it comes to investing for retirement based on bad data,...
by Noobvestor
Sun Mar 08, 2015 4:12 am
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71393

Re: International increase in Target Retirement & LifeStrate

@Johno: I agree that the issue becomes tricky when it comes to foreign bonds - it is easy for me to say that in the current environment foreign bonds can just be left out, but of course if at some point they are yielding significantly more than US bonds that argument could be contested. That said, I...
by Noobvestor
Mon Mar 02, 2015 8:54 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 219
Views: 17467

Re: Retirement planning - Too soon for TIPS?

The one caveat about I bonds is that interest payment will stop and tax come due after thirty years. This may not be a big deal but for some investors could be awkward if the timing falls in years of highest earnings before retirement. I bond tax can be paid as you go, but one of the appeals of I b...
by Noobvestor
Sun Mar 01, 2015 2:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement planning - Too soon for TIPS?
Replies: 25
Views: 2377

Re: Dividends and Market Slides

I came across this 40 point dividend info sheet on Dividend.com: http://www.dividend.com/dividend-education/40-things-every-dividend-investor-should-know/ Item #35 has a chart showing volatility of dividend paying S&P stocks vs. non-dividend paying S&P stocks (1972-2013), followed by this c...
by Noobvestor
Sun Mar 01, 2015 1:59 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 55
Views: 3392

Re: Dividends and Market Slides

So growth stocks and value stocks behave exactly the same in down markets? Interesting. And I am not asking about living off dividends. Perhaps my questions weren't clear. I am asking about the value of dividends to overall returns, especially in down markets, and the stock-price implications of di...
by Noobvestor
Sun Mar 01, 2015 3:28 am
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 55
Views: 3392

Re: Retirement planning - Too soon for TIPS?

Lots of great points about about benefits of I Bonds. I'll just add a reminder that Vanguard's TIPS funds has a negative real yield right now, so aside from less flexibility about selling and taxation down the line (and the interest rate risk) they also don't have any higher returns. My advice remai...
by Noobvestor
Sun Mar 01, 2015 3:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement planning - Too soon for TIPS?
Replies: 25
Views: 2377

Re: What is the BH consensus on international bonds?

Total International Bond has a current yield of less than 1% and a duration of over 7 years. I can see no good reason to hold it over CDs or other bonds. Surprised there is even discussion around this. I know I'm normally the international advocate, but in this case ... I just don't see the point. I...
by Noobvestor
Sun Mar 01, 2015 1:42 am
 
Forum: Investing - Theory, News & General
Topic: What is the BH consensus on international bonds?
Replies: 54
Views: 4029

Re: Retirement planning - Too soon for TIPS?

Thanks, Jim! I'll look for the threads you mentioned. My options for purchase currently include: I Bonds in taxable A longer-duration VG TIPS fund in a tax-deferred retirement account (.07 expense ratio) Any TIPS ETF and maybe after-market bonds in ROTH IRAs Since I don't want to use ROTH space, I ...
by Noobvestor
Sat Feb 28, 2015 4:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement planning - Too soon for TIPS?
Replies: 25
Views: 2377

Re: International increase in Target Retirement & LifeStrate

I couldn't agree more, Durzo. Global is the starting point - tilts are always an option, but it' is a question of strategically subtracting international, not adding it. I agree with this. I think they want to move towards global weighting, but the fact that international investing is still more exp...
by Noobvestor
Sat Feb 28, 2015 4:19 am
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 219
Views: 17467

Re: International increase in Target Retirement & LifeStrate

This is to me a byproduct of not having a natural or neutral exposure to international - for stocks, at least, they should simply go with global market weights, which would forever stop them from fidgeting on that front. For stocks/bonds they should pick a rule of thumb (e.g. age minus ten in bonds)...
by Noobvestor
Fri Feb 27, 2015 4:38 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 219
Views: 17467

Re: International is disappointing

The best thing a (passive index) investor can do is cultivate the attitude that what is underperforming is 'cheap' and what is outperforming is 'expensive'. I get a positive feeling each time I contribute to the parts of my portfolio that are not doing so well. On the one hand, I feel good about buy...
by Noobvestor
Fri Feb 27, 2015 4:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: International is disappointing
Replies: 84
Views: 7166

Re: Mr. Money Mustache: Hero or Foolish?

boroc7 wrote:So MMM, you must really be having a good laugh reading this thread.


He clearly likes the attention, and drums up traffic via the controversy. I have to hand it to him: playing up neologisms that spark debate on both sides is great marketing.
by Noobvestor
Fri Feb 27, 2015 4:23 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71393

Re: Retirement planning - Too soon for TIPS?

* Starting this year, I could purchase 20-30K in I Bonds, and continue that for the next 10 years. Since I Bonds can only be bought in a taxable account they are pretty much guaranteed to lose purchasing power when you eventually cash them and are taxed on the inflation gain. They sometimes have th...
by Noobvestor
Thu Feb 26, 2015 6:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement planning - Too soon for TIPS?
Replies: 25
Views: 2377

Re: 401(k) Rollover/Rollout Options During Merger/Acquisitio

There might be a different answer for different situations, but my company held by VC was sold to a different VC and then my company was folded into a larger company that was held by the new VC and ceased to be a distinct company anymore. The employees of the old company were allowed to roll out th...
by Noobvestor
Thu Feb 26, 2015 5:01 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) Rollover/Rollout Options During Merger/Acquisition?
Replies: 6
Views: 444

Re: 401(k) Rollover/Rollout Options During Merger/Acquisitio

Nobody huh? No worries - I did a bit more research and it looks like maybe it's too late even if there had been something to do (or that there may have been nothing to do in the first place).
by Noobvestor
Wed Feb 25, 2015 3:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) Rollover/Rollout Options During Merger/Acquisition?
Replies: 6
Views: 444

Re: Retirement planning - Too soon for TIPS?

I'm a lot further from retirement age and am already 50/50 nominal/inflation-adjusted bonds as a target - I think it's reasonable/wise at any age. I would suggest maxing out I Bonds and filling in the rest with TIPS - I Bonds have no duration risk and are paying as well as TIPS more or less, plus th...
by Noobvestor
Wed Feb 25, 2015 3:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement planning - Too soon for TIPS?
Replies: 25
Views: 2377

Re: Mr. Money Mustache: Hero or Foolish?

I think it's great he has gotten some people to save more. I worry, though, that he has contributed to this 'financial independence' and 'early retirement' movement that seems to chronically overestimate portfolio returns and underestimate how much you really need to retire, thus causing some to *no...
by Noobvestor
Tue Feb 24, 2015 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71393

401(k) Rollover/Rollout Options During Merger/Acquisition?

A relative of mine asked me if I knew anything about this - I confessed I didn't but said I would ask here on their behalf (also suggested a few other starting points). Basically they were working for a company that got bought (or merged - not entirely clear to me). They transitioned to the new comp...
by Noobvestor
Tue Feb 24, 2015 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) Rollover/Rollout Options During Merger/Acquisition?
Replies: 6
Views: 444

Re: John Bogle on International Investing

The view seems to be that global investing provides better diversification, since you have a stake around the world across various foreign markets. From this view, being invested solely in the US is riskier. I think what's hidden in this argument is the notion that the US economy has grown to the p...
by Noobvestor
Mon Feb 23, 2015 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 15765
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