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Re: Renting vs owning

If we're arguing over whether houses or apartments are better let's at least be explicit about the fact Compared to other such threads I'm not seeing "argue". Also all I see is people giving the specific of their own experience for contex, which in some cases is with apartments, townhouse...
by Rodc
Fri Oct 24, 2014 4:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Renting vs owning
Replies: 14
Views: 1174

Re: More funds = more "efficient" rebalancing?

What is this "automatic adjustment" that occurs in a market cap fund? I am not aware of any adjustment (at least in a total market fund, some have size cutoffs for example). Indeed I thought one of the great attributes of cap weight funds is the fact they have no such adjustment which is ...
by Rodc
Fri Oct 24, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 23
Views: 1023

Re: Do you regret buying your home?

I have been in my house for over 20 years. I like it fine. Actually I like it a lot. Almost nothing in life is perfect. So in almost all areas of life one might wish for some changes. If you want perfect you are going to be disappointed. We did a major renovation and expansion of the house right bef...
by Rodc
Fri Oct 24, 2014 10:50 am
 
Forum: Personal Consumer Issues
Topic: Do you regret buying your home?
Replies: 58
Views: 3552

Re: Renting vs owning

Why not buy a townhouse? I mean, if it's financially beneficial Without knowing the current price and rent of the townhouse in question how on earth can you know that? It could be financially detrimental just as easily as it can be beneficial. Well, tj is responding to someone who said, "In my...
by Rodc
Fri Oct 24, 2014 8:36 am
 
Forum: Personal Finance (Not Investing)
Topic: Renting vs owning
Replies: 14
Views: 1174

Re: Can you outperform [an index by rebalancing]?

Thanks all, some interesting posts and viewpoints above Looking at an example of say the below which is an ASX200 fund (Vanguards Australian Index fund is an ASX300 fund) and compared to Vanguards Bond Index (VGB - the red line) the ASX200 fund is nearly back to where it started over 12 months ago,...
by Rodc
Fri Oct 24, 2014 8:34 am
 
Forum: Investing - Theory, News & General
Topic: Can you outperform [an index by rebalancing]?
Replies: 12
Views: 1017

Re: More funds = more "efficient" rebalancing?

Tfb, Chan_va or others: Can you expend a bit further what it means that total funds continuously rebalance? If, for instance, "total international" simply reflects the whole international market, and if "emerging" performs better than the rest of the fund, wouldn't its share of ...
by Rodc
Fri Oct 24, 2014 8:30 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 23
Views: 1023

Re: More funds = more "efficient" rebalancing?

The logical extreme of this would be something like an "equal weight" index fund that attempts to own every stock and maintain them at equal weights by constantly rebalancing every stock. I imagine a trading strategy that follows something like that works well when there is a lot of dispe...
by Rodc
Fri Oct 24, 2014 8:28 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 23
Views: 1023

Re: How often do you change your car's oil?

cheese_breath wrote:Every 4,000-5,000 miles. This is less than the manufacturer's recommendations, but after a couple bad experiences following their recommendations I figure being a little on the safe side is worth a few extra bucks per year.


About the same for us.

More often than the cars get washed. :happy
by Rodc
Fri Oct 24, 2014 7:18 am
 
Forum: Personal Consumer Issues
Topic: How often do you change your car's oil?
Replies: 53
Views: 1752

Re: More funds = more "efficient" rebalancing?

Tfb, Chan_va or others: Can you expend a bit further what it means that total funds continuously rebalance? If, for instance, "total international" simply reflects the whole international market, and if "emerging" performs better than the rest of the fund, wouldn't its share of ...
by Rodc
Fri Oct 24, 2014 7:09 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 23
Views: 1023

Re: Can you outperform?

Might you? Yes. Will you? Maybe not. Basically you are asking about a rebalance bonus. You might do a search on that term on this site. It all hinges on whether returns are totally random or if they mean revert. Historically sometimes they do and some times they don't. At any rate, the effect if you...
by Rodc
Thu Oct 23, 2014 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: Can you outperform [an index by rebalancing]?
Replies: 12
Views: 1017

Re: Renting vs owning

There are many pros and cons, which is a better financial deal in the long run is highly location dependent, or even highly specific property dependent. And as noted above it is also a lifestyle choice, some would even say mostly a lifestyle choice. There is nothing generically wrong or right with r...
by Rodc
Thu Oct 23, 2014 5:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Renting vs owning
Replies: 14
Views: 1174

Re: Three Possible Outcomes for Future Investment Returns

So, don't rush out of your bonds just yet. Yes, the takeaway from low expected asset returns is NOT to give up on safe, lower-yielding bonds or to reach for more yield and return in riskier asset classes. Rather, investors should just expect that investment returns are likely to be lower than histo...
by Rodc
Thu Oct 23, 2014 3:48 pm
 
Forum: Investing - Theory, News & General
Topic: Three Possible Outcomes for Future Investment Returns
Replies: 32
Views: 2197

Re: Long term return forecast

Thanks for the link. Interesting to see that Research Affiliates' forecast of real returns for U.S. Large Cap stocks is less than 1% real over the next 10 years (1.8% yield + 1.3% growth - 2.4% valuation = 0.7% total return). This is where their estimate fits into the current range of other forecas...
by Rodc
Thu Oct 23, 2014 1:49 pm
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2238

Re: Just wondering how you personally calculate net worth

I discount my tax deferred holdings by 25%. An arbitrary number I pulled out of a hat. I don't discount taxable holdings by the cap gains rate on the gains, although for consistency I should. An interesting consideration - to discount a tax deferred holding. But if I did that, let's say I have 50K ...
by Rodc
Thu Oct 23, 2014 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Just wondering how you personally calculate net worth
Replies: 53
Views: 3050

Re: More funds = more "efficient" rebalancing?

Every rebalancing study I have ever read says the benefits are at best tiny.

More "total" the fund the cheaper to run it including trading costs so in that sense fewer is likely better on that side of things.

Don't let this tail wag your dog.
by Rodc
Thu Oct 23, 2014 10:10 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 23
Views: 1023

Re: Three Possible Outcomes for Future Investment Returns

I am somewhat pessimistic over the intermediate term, notionally say 10 years. Much longer than that and almost anything could happen. Another stock crash could reset stocks even sooner, 10 year yields on ten year bonds not so much. Your results are really, as you note, saying things now are all exp...
by Rodc
Wed Oct 22, 2014 9:49 pm
 
Forum: Investing - Theory, News & General
Topic: Three Possible Outcomes for Future Investment Returns
Replies: 32
Views: 2197

Re: Just wondering how you personally calculate net worth

Why do you need this number to be accurate? If a large number makes you feel good, then multiply the taxable account by your tax rate. You can make it even bigger by adding pension and social security that you have earned. Some people would even add their unused vacation days. :) And maybe their wa...
by Rodc
Wed Oct 22, 2014 9:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Just wondering how you personally calculate net worth
Replies: 53
Views: 3050

Re: More in equities as you age ?

Second, it totally ignores the stomach acid test or willingness to take risk. Even if the math were to show Kitces is correct, which we don't agree with, the analysis totally ignores human behavior. I agree. This is a huge issue. A computer algorithm has nerves of steel. Or silicon. People not so m...
by Rodc
Wed Oct 22, 2014 9:07 pm
 
Forum: Investing - Theory, News & General
Topic: More in equities as you age ?
Replies: 11
Views: 968

Re: More in equities as you age ?

My analysis as posted in another thread: (3) A rising equity glide path in retirement helps portfolio longevity. Is this one just a special case of #2? False. He makes that claim but the paper itself actually says there is no measurable difference between a constant and a raising glide path. Others ...
by Rodc
Wed Oct 22, 2014 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: More in equities as you age ?
Replies: 11
Views: 968

Re: lost 8606 from years ago - am I in trouble?

I am afraid you will have to move to Canada.
by Rodc
Wed Oct 22, 2014 7:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: lost 8606 from years ago - am I in trouble?
Replies: 16
Views: 1671

Re: Just wondering how you personally calculate net worth

I calculate mine aperiodically. After tax would be better, even though the future tax rate I or heirs will pay is unknown, but I don't bother. I don't count pension, social security, etc that I do not own and can get as a lump sum. I suppose if I had a pension I knew I could take as a lump sum at an...
by Rodc
Wed Oct 22, 2014 7:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Just wondering how you personally calculate net worth
Replies: 53
Views: 3050

Re: Kids & Sports

I have a son who had some sensory and motor control issues. Not the same as your son but in the process of understanding my son I did a lot of reading including about kids like your son may be. For a kid like my son or perhaps yours specialized activities (occupational or physical therapy) are likel...
by Rodc
Wed Oct 22, 2014 7:19 pm
 
Forum: Personal Consumer Issues
Topic: Kids & Sports
Replies: 26
Views: 2260

Re: How to think about expected returns--continuing discussi

Rod, I was only pointing out that people with very high levels of skills in the field come to a different conclusion than you do. Doesn't make you wrong and them right, but that there is another viewpoint than yours with people who have the skills to make an informed decision. Nothing more was impl...
by Rodc
Wed Oct 22, 2014 2:46 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to think about expected returns--continuing discussi

Larry, Yes, typo 2000. The argument of simply saying well we have world class mathematicians is about as weak an argument as one can make. I have a PhD in math. I work with world class mathematicians, computer scientists, etc and have for decades. The Monte Carlo simulation tools we design, implemen...
by Rodc
Wed Oct 22, 2014 10:38 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: POLL: How fulfilling is your retirement?

E.g. do you really expect a spouse whom you insisted sign a prenup will spoon feed you or change Depends?


Now that is an interesting question.

Agree health can turn on a dime. I have seen it happen and plans and dreams all change.

Good luck to you.
by Rodc
Tue Oct 21, 2014 6:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: How fulfilling is your retirement?
Replies: 34
Views: 2989

Re: Benefits to a larger than necessary house (as children g

Some thoughts: The oldest two (8 and 5) keep each other up for HOURS after their bedtime EVERY. SINGLE. NIGHT. We've gotten to the point where we put one to sleep in her room and the other to sleep in our bed until the first is asleep. Then we move the one from our bed to her bed. EVERY. SINGLE. NIG...
by Rodc
Tue Oct 21, 2014 2:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Benefits to a larger than necessary house (as children grow)
Replies: 31
Views: 3301

Re: Can I stop saving for a retirement 30 years in the futur

I agree with your back of the envelop estimate, but it is only an estimate. May do better and may do worse. Lifestyle desires tend to creep up over the years, but may not. So you are off to a really good start. But not really ready to dedicate all your savings to other goals. But really you don't ha...
by Rodc
Tue Oct 21, 2014 1:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can I stop saving for a retirement 30 years in the future?
Replies: 11
Views: 2542

Re: How to think about expected returns--continuing discussi

Rod Very much disagree about its usefulness. Example, if you see reducing your spending rate by 5% increases your odds of success by 10% that is helpful. If decreasing your equity allocation by 10% increases your odds of not running out of money by 10% but decreases your odds of leaving an estate o...
by Rodc
Mon Oct 20, 2014 9:24 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to think about expected returns--continuing discussi

As to MCS, one of the biggest benefits is that it allows you to do MARGINAL analysis very easily --seeing how small changes or large ones in terms of the AA or spending/saving and withdrawal rates impact the odds of success. Yes, as already noted it is useful in making illustrations, IF all sorts o...
by Rodc
Mon Oct 20, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How do you wash your car?

Poll does not fit me. Summer: rarely wash, but occasionally shoo the kids outside to wash car. Winter: We have heavily salted roads and use automated wash with under-body wash moderately frequently. This is partly maintenance (reduce rust) and partly usability as otherwise you tend to get a lot of s...
by Rodc
Mon Oct 20, 2014 11:02 am
 
Forum: Personal Consumer Issues
Topic: How do you wash your car?
Replies: 132
Views: 5545

Re: How to think about expected returns--continuing discussi

I continue to doubt MC simulations do any better than applying wide error bands to returns estimates. There's more than enough slop in the system to drown any differences between the approaches (as there is to drown any differences between p/e, CAPE and Gordon - e/p has the advantage of not having ...
by Rodc
Mon Oct 20, 2014 8:33 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to think about expected returns--continuing discussi

Here is a more intuitive non-math explanation of the problem. A Monte Carlo simulation is a statistical model of the stock and bond markets. It is only useful to the extent it is a reasonably decent representation of how markets behave. If valuations are truly important to real investors in the real...
by Rodc
Sat Oct 18, 2014 8:13 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to think about expected returns--continuing discussi

And yes it makes sense to use one estimated return-- Only if you have a one year or less horizon. After that the valuation has changed and your simulation had better have changed as well. Well, it depends what you use the expected returns (and the variations around it) for. Say this is for a form o...
by Rodc
Sat Oct 18, 2014 8:01 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to think about expected returns--continuing discussi

And yes it makes sense to use one estimated return--


Only if you have a one year or less horizon. After that the valuation has changed and your simulation had better have changed as well.
by Rodc
Fri Oct 17, 2014 10:27 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to think about expected returns--continuing discussi

In order for this to be very useful the mean assumed in the simulation has to adjust over time as valuations adjust. For example if there is a strong period of returns the valuations might then be high and thus returns assumption going forward must of course use a lower mean, or perhaps the earning ...
by Rodc
Fri Oct 17, 2014 9:29 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 73
Views: 5448

Re: How to wrap my head around downsizing my home?

Another reason to be in the city is easier access for care providers and services. Suppose that, at some point, shopping becomes difficult. You want to be somewhere where groceries and ready made food (for those days you don't want to cook) can be delivered. Perhaps, you'll want someone to come in ...
by Rodc
Fri Oct 17, 2014 8:01 am
 
Forum: Personal Consumer Issues
Topic: How to wrap my head around downsizing my home?
Replies: 47
Views: 3554

Re: How to wrap my head around downsizing my home?

A couple of thoughts. If this is overwhelming you might benefit from hiring someone who works in this area to provide ideas and/or run down information. I have some contacts in the Boston area in this business. If you have any interest drop me a PM. Just seconding some ideas above: It might be possi...
by Rodc
Fri Oct 17, 2014 7:56 am
 
Forum: Personal Consumer Issues
Topic: How to wrap my head around downsizing my home?
Replies: 47
Views: 3554

Re: Monty Carlo Simulation

Just remember: compound growth is a near miracle in how your money left to grow for a few decades becomes enough to live on for the rest of your life. In the exact same way, using the same exact math, errors in the assumptions put into a Monte Carlo simulator compound and grow huge over the same sor...
by Rodc
Thu Oct 16, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Monte Carlo Simulation
Replies: 9
Views: 783

Re: Should I share financial info with potential guardian?

How much of our financial info should we share with her in the event something happens to both of us ? I am a little unclear on the question. In the event something happens to both of you, she should have full information. Before that she only needs to know there will be enough. Who should be in ch...
by Rodc
Wed Oct 15, 2014 8:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I share financial info with potential guardian?
Replies: 5
Views: 742

Re: What happened to the audiophile?

They all got old and they lost their ability to hear anything over 10KHz so it no longer matters. :P I think I object. In point of fact I no longer hear anything over about 10KHz, but that doesn't interfere with hearing wow, flutter, rumble, hiss, ticks, pops, scratches, bass, and--above all--disto...
by Rodc
Wed Oct 15, 2014 7:24 pm
 
Forum: Personal Consumer Issues
Topic: What happened to the audiophile?[High quality music sources]
Replies: 71
Views: 3696

Re: The SWR on Real Estate Investments

In the long term wages also track inflation, so a paid-off property gets a real rate of return equal to the inflation rate. This is roughly equal to the rate of return of stocks.


The long term real rate of return for stocks is roughly 0%?
by Rodc
Wed Oct 15, 2014 4:15 pm
 
Forum: Investing - Theory, News & General
Topic: The SWR on Real Estate Investments
Replies: 61
Views: 2428

Re: US Education system investments

The opening post is so full of assumptions that often don't hold that I don't know where to begin.
by Rodc
Wed Oct 15, 2014 4:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: US Education system investments
Replies: 9
Views: 510

Re: US Education system investments

Pre-K and Kindergarten can be the most "formative" years of a kid's education. They set the kid on the right track for the rest of his/her life. It very well should be a priority. What does this really mean? Is there peer reviewed research that cites longitudinal studies proving this? I f...
by Rodc
Wed Oct 15, 2014 4:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: US Education system investments
Replies: 9
Views: 510

Re: Is semi-retirement a bad idea?

I'm in late, but just wanted to note the OP is not looking at "semi-retirement" by any normal definition. The OP is simply asking about downsizing employment. This can work or can backfire, but people do this all the time. They have kids and scale back, get tired and scale back, whatever....
by Rodc
Wed Oct 15, 2014 2:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is semi-retirement a bad idea?
Replies: 106
Views: 7111

Re: Recent statistics of college majors

bhsince87: good for you, many don't have that level of dedication, so my hat is off to you. Well done. MathWizard: that is all well and good. I certainly do that with my kids. But having taught math at the university level and having had three kids, while good teaching can certainly help, being real...
by Rodc
Wed Oct 15, 2014 1:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Recent statistics of college majors
Replies: 35
Views: 2654

Re: Why Are Expected Investment Returns So Low?

Since 1980, global investment rates have been declining (chart below) — due mainly to aging populations in the advanced economies, the worldwide shift toward (less capital intensive) service economies and the overall slowing of global GDP growth. In the future, the rapid growth of investment rates ...
by Rodc
Wed Oct 15, 2014 1:01 pm
 
Forum: Investing - Theory, News & General
Topic: Why Are Expected Investment Returns So Low?
Replies: 13
Views: 1664

Re: Recent statistics of college majors

Very interesting and timely – it’s the college application season for our son. They should show the first couple of charts to parents of first graders. Maybe a few more parents would spend more time helping their kids with their math homework. Thanks for sharing. Unfortunately if your child needs h...
by Rodc
Wed Oct 15, 2014 12:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Recent statistics of college majors
Replies: 35
Views: 2654

Re: Indoor rowing machine - worth it?

The problem with this is that you reach a threshold where it can't really get any harder...you are rowing at such a speed that the the fan does not have enough resistance to keep up.


That can certainly happen. Kind of like riding down hill on your bike in first gear. :)
by Rodc
Wed Oct 15, 2014 12:50 pm
 
Forum: Personal Consumer Issues
Topic: Indoor rowing machine - worth it?
Replies: 73
Views: 3578

Re: Is semi-retirement a bad idea?

I'm in late, but just wanted to note the OP is not looking at "semi-retirement" by any normal definition. The OP is simply asking about downsizing employment. This can work or can backfire, but people do this all the time. They have kids and scale back, get tired and scale back, whatever. ...
by Rodc
Wed Oct 15, 2014 12:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is semi-retirement a bad idea?
Replies: 106
Views: 7111

Re: Recent statistics of college majors

This presentation seems to be heavily in favor of STEM and specific pro-engineering. Did I just miss the health care fields of premed, dentistry, physical therapy, etc...?


See graphic #4
by Rodc
Wed Oct 15, 2014 11:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Recent statistics of college majors
Replies: 35
Views: 2654
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