Search found 11158 matches

by Rodc
Fri Aug 28, 2015 8:22 pm
Forum: Investing - Theory, News & General
Topic: Why doesn't the 3 fund portfolio have TIPS?
Replies: 24
Views: 990

Re: Why doesn't the 3 fund portfolio have TIPS?

I think I get it. I just think the language is confusing when people keep saying "unexpected inflation" when referring to high-sigma inflation outcomes. Do not confuse this with Gaussian statistics. That only exists in simple textbooks. And at any rate misses the point. The language for w...
by Rodc
Fri Aug 28, 2015 8:19 pm
Forum: Personal Finance (Not Investing)
Topic: Dear In-Laws: Less toys, more 529
Replies: 26
Views: 1829

Re: Dear In-Laws: Less toys, more 529

I think in many cases you could have ONE conversation about this subject. Most people in my experience are fairly reasonable if approached with some sensitivity and kindness. Let your wife bring it up. Don't demand, just let them know that the kids have more than they need, you are running out of ro...
by Rodc
Fri Aug 28, 2015 8:05 pm
Forum: Investing - Theory, News & General
Topic: Do "valuations" affect your asset allocation?
Replies: 35
Views: 991

Re: Do "valuations" affect your asset allocation?

I rebalance. When stocks are running up a lot you end up selling stocks to buy bonds. This tends to happen when valuations are high (though if E goes up with price it may not be). The reverse is also true. So valuations play a subtle implicit role. Another factor is how close I am to my retirement g...
by Rodc
Fri Aug 28, 2015 7:50 pm
Forum: Investing - Theory, News & General
Topic: Why doesn't the 3 fund portfolio have TIPS?
Replies: 24
Views: 990

Re: Why doesn't the 3 fund portfolio have TIPS?

@Rodc What is unexpected inflation? Do you mean variance in inflation outcomes? So basically investors pay a premium for TIPS to avoid variance in their real returns. Since nominal bonds have higher expected returns they will outperform TIPS in the long run What I mean is the following. Market part...
by Rodc
Fri Aug 28, 2015 7:34 pm
Forum: Investing - Theory, News & General
Topic: The Oft-Ignored Fact: Real stock returns were only 2.2% since 1870.
Replies: 22
Views: 2213

Re: The Oft-Ignored Fact: Real stock returns were only 2.2% since 1870.

knpstr wrote:enormous difference between stocks and bonds using your numbers.

compound at 4.6% on $10,000 for 145 years is $6.8 million
compound at 8.6% on $10,000 for 145 years is $1.5 billion

Bonds? No thank you.


You must have really good genes.
by Rodc
Fri Aug 28, 2015 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: Joint finances and cash management
Replies: 33
Views: 1798

Re: Joint finances and cash management

Joint checking and savings. Of course retirement accounts are separate. My wife nominally has her own credit card, but she put me on it so I have a card on the same account that I keep stashed so if on travel and I lose the main household card I have a back up. But she uses it sometimes for personal...
by Rodc
Fri Aug 28, 2015 7:03 pm
Forum: Personal Finance (Not Investing)
Topic: Budgeting infrequent expenses (refrigerator, new tires, paint house, etc)
Replies: 2
Views: 237

Re: Budgeting infrequent expenses (refrigerator, new tires, paint house, etc)

Many of those are not so hard to predict when they will be needed. Also, maybe more to the point, easy to predict when the odds go up. If you put 20-year shingles on your roof you can plan to have the funds in hand by year 15 and then whenever they need replacing you are good to go. You know about h...
by Rodc
Fri Aug 28, 2015 5:56 pm
Forum: Investing - Theory, News & General
Topic: Why doesn't the 3 fund portfolio have TIPS?
Replies: 24
Views: 990

Re: Why doesn't the 3 fund portfolio have TIPS?

Historically short or intermediate treasuries have done ok inflation-wise over the long haul and so did ok for the long term buy and hold investor. Not necessarily. For instance, from the end of 1940 to the end of 1981, in real terms: 10-year treasuries lost 55% 3-month treasuries lost 34% Data is ...
by Rodc
Fri Aug 28, 2015 3:58 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency fund or debt?
Replies: 15
Views: 764

Re: Emergency fund or debt?

Sounds like a tough spot.

I would try hard to get some sort of minimal emergency fund in place.

I would think about trying to hold on until the teens are out of high school and sell the house. (any equity?)

Best of luck.
by Rodc
Fri Aug 28, 2015 3:54 pm
Forum: Investing - Theory, News & General
Topic: Why doesn't the 3 fund portfolio have TIPS?
Replies: 24
Views: 990

Re: Why doesn't the 3 fund portfolio have TIPS?

In general TIPS have lower expected return vs nominal treasury - just the cost of having inflation insurance if you will. TIPS are not for expected inflation - they are for unexpected inflation (you may know that). Historically short or intermediate treasuries have done ok inflation-wise over the lo...
by Rodc
Fri Aug 28, 2015 2:34 pm
Forum: Investing - Theory, News & General
Topic: Why no diversification benefit for international in this week's crash?
Replies: 83
Views: 4394

Re: Why no diversification benefit for international in this week's crash?

I care about short run results for rebalancing. If there's a flash crash in one asset I want to be able to sell my other assets to rebalance into it and restore my AA and get better returns by buying low and selling high. But when all assets fall at the same time, no rebalancing bonus can be gained...
by Rodc
Fri Aug 28, 2015 2:24 pm
Forum: Personal Consumer Issues
Topic: Power Switch & Camera - Remotely Triggered
Replies: 7
Views: 244

Re: Power Switch & Camera - Remotely Triggered

Could you simply call your next door neighbor and say "Hey, I was wondering, is there any ice hanging off my roof?" Funny guy , ha ha - actually our electrician who would install the heating wires proposed a manual timer that our neighbor could turn on from inside the house but remote con...
by Rodc
Fri Aug 28, 2015 2:06 pm
Forum: Personal Consumer Issues
Topic: Power Switch & Camera - Remotely Triggered
Replies: 7
Views: 244

Re: Power Switch & Camera - Remotely Triggered

Could you simply call your next door neighbor and say "Hey, I was wondering, is there any ice hanging off my roof?"
by Rodc
Fri Aug 28, 2015 12:15 pm
Forum: Investing - Theory, News & General
Topic: Cash is king over short-term bonds
Replies: 30
Views: 1969

Re: Cash is king over short-term bonds

Depending on what you want to do CDs can certainly make sense for some people. On the other hand how much cash are you talking about? A difference in a small fraction of a percent against a modest cash/FI allocation is not going to make much of a difference. Might be enough for you to care, but not ...
by Rodc
Fri Aug 28, 2015 11:28 am
Forum: Personal Consumer Issues
Topic: Cheap Single Security Camera
Replies: 3
Views: 297

Re: Cheap Single Security Camera

Make sure that this is not going to get her in big trouble.

Non-authorized video taping might be a big privacy policy no-no or otherwise run afoul of company rules.
by Rodc
Fri Aug 28, 2015 10:02 am
Forum: Investing - Theory, News & General
Topic: The Oft-Ignored Fact: Real stock returns were only 2.2% since 1870.
Replies: 22
Views: 2213

Re: The Oft-Ignored Fact: Real stock returns were only 2.2% since 1870.

Worth remembering too that data back very far is only an estimate. Take a look at how few companies are used by Fama and French for example to estimate returns back in the 1920s. Back to 1870 is even more shaky. Then consider that even if we had good measures of past returns that does not imply we h...
by Rodc
Fri Aug 28, 2015 8:19 am
Forum: Investing - Theory, News & General
Topic: [Original Research] [Theory] The Optimal Portolio
Replies: 40
Views: 2580

Re: [Original Research] [Theory] The Optimal Portolio

Theoretically, if you have large enough representative random samples of past performance, one could get reasonable estimates if future expected return and risk, and use them to find optimal expected risk-adjusted return. Only if the underlying market forces never change (ie there is only one never...
by Rodc
Fri Aug 28, 2015 8:17 am
Forum: Investing - Help with Personal Investments
Topic: Was about to change from 100% equity to 80%. Now what?
Replies: 69
Views: 4780

Re: Was about to change from 100% equity to 80%. Now what?

First of all I would appreciate if you don't look at my post history but instead treat each thing I say in isolation. My ideas are constantly evolving so whatever I said last week or month may be completely irrelevant. If we have to throw away on Tuesday what you said on Monday, and throw away on W...
by Rodc
Tue Aug 25, 2015 6:33 am
Forum: Investing - Theory, News & General
Topic: How are you being GREEDY when others are fearful?
Replies: 84
Views: 8795

Re: How are you being GREEDY when others are fearful?

Rebalance per IPS as needed.

It is way too early to be worked up. If this stops here it is a minor blip.

If it does not stop for a while, it is way too early to be in the "Be greedy when others are fearful" mode.
by Rodc
Tue Aug 25, 2015 6:31 am
Forum: Personal Consumer Issues
Topic: time for a new car?
Replies: 26
Views: 2169

Re: time for a new car?

Even with a make like Honda which is considered to have lower-than-average depreciation, they do continue to lose value and at some point in time are regarded in the marketplace as "just another old car." It is not fair but this is the way our auto marketplace works, the mindset of planne...
by Rodc
Mon Aug 24, 2015 8:12 pm
Forum: Investing - Theory, News & General
Topic: The Bogleheads' Silent Majority
Replies: 180
Views: 12604

Re: The Bogleheads' Silent Majority

livesoft wrote:It's funny, but markets have recovered enough that things are no longer in RBD territory.


That is why we need ETFs!
by Rodc
Mon Aug 24, 2015 6:05 pm
Forum: Investing - Theory, News & General
Topic: [Original Research] [Theory] The Optimal Portolio
Replies: 40
Views: 2580

Re: [Original Research] [Theory] The Optimal Portolio

Agree with those above who are essentially pointing out that is very difficult, if not impossible to get a representative random sample. Don't take the results too seriously, but a fun exercise would be to look at the frontier curve for a mix of US stocks and treasuries with the bond duration set t...
by Rodc
Mon Aug 24, 2015 4:13 pm
Forum: Investing - Theory, News & General
Topic: Who's selling now?
Replies: 63
Views: 6441

Re: Who's selling now?

I am in no hurry to sell.

If this keeps up for a while I will.

I will sell bonds to buy stocks.
by Rodc
Mon Aug 24, 2015 3:10 pm
Forum: Investing - Theory, News & General
Topic: 5% of portfolio in Natural Resources
Replies: 1
Views: 218

Re: 5% of portfolio in Natural Resources

A 5% allocations is hardly enough to move the needle. An ER of 0.4% vs 0.15% against the weight of 5% is not enough to worry about (that is $125 on a million dollar portfolio, tacking error is likely larger) unless your own time is worth very little. You are playing way down in the noise. This (addi...
by Rodc
Mon Aug 24, 2015 3:06 pm
Forum: Personal Finance (Not Investing)
Topic: I got a raise! Now what?
Replies: 18
Views: 3092

Re: I got a raise! Now what?

Very good. Thanks for the clarification.

Hope you heal up quickly!
by Rodc
Mon Aug 24, 2015 12:54 pm
Forum: Investing - Theory, News & General
Topic: [Original Research] [Theory] The Optimal Portolio
Replies: 40
Views: 2580

Re: [Original Research] [Theory] The Optimal Portolio

Tell me which parameters you would prefer to see. I am sorry, but I don't think that path is constructive as the premise is unsound. I have studied this at some length and have made similar mistakes along the way. I understand your desire. I have traveled this path as well. I do not believe you wil...
by Rodc
Mon Aug 24, 2015 12:41 pm
Forum: Investing - Theory, News & General
Topic: [Original Research] [Theory] The Optimal Portolio
Replies: 40
Views: 2580

Re: [Original Research] [Theory] The Optimal Portolio

Thats how math works. Assumptions --> Conclusions Also known as garbage in --> garbage out. Look, how well do we know the mean return for US stocks in the past? If I flip a coin 10 times I can measure with great precision that I saw 6 heads and 4 tails. But that is not the actual (hidden) distribut...
by Rodc
Sun Aug 23, 2015 7:51 pm
Forum: Investing - Theory, News & General
Topic: [Original Research] [Theory] The Optimal Portolio
Replies: 40
Views: 2580

Re: [Original Research] [Theory] The Optimal Portolio

Precisely I consider that a feature not a bug. The model is flexible enough to accomodate most real decisions by real people merely by varying the parameters. Cool. So in other words you pick what you want and fiddle the numbers to make it look like a good decision. What could go wrong? (Unfortunat...
by Rodc
Sun Aug 23, 2015 7:47 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

Many expect a traditional 60/40 portfolio will produce no greater than 2% - 3% real returns over the next decade or more, I don't thing that is the same issue. That is driven far as I can tell simply by current high P/E10 and/or low current dividends. That is simply based on current conditions. Tha...
by Rodc
Sun Aug 23, 2015 5:41 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

Sometime in the past I posted a graph that was published by some Scandinavian bank showing that, since the year 1200 or 1300 or something like that, essentially housing has just kept up with inflation. How they came up with something like that is beyond me, and don't ask me to confirm its validity....
by Rodc
Sun Aug 23, 2015 2:49 pm
Forum: Personal Consumer Issues
Topic: Ways to reduce basement humidity
Replies: 20
Views: 1677

Re: Ways to reduce basement humidity

Another could be installing an exhaust fan, like in a bathroom. I read a handyman column in the paper that suggested this. I had a nice strong window fan so put it in a basement window. Condensation everywhere as hot humid outside air hit cool walls and floor. I mean running water down the walls an...
by Rodc
Sun Aug 23, 2015 12:51 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

So, for the sake of argument, what is the action? This might put a long term damper on returns. When does that start? Is it reasonable to hold a historical portfolio and expect more or less historical behavior for the next 10 years? 20 years? Do I simply adjust my return expectations down and simply...
by Rodc
Sun Aug 23, 2015 12:43 pm
Forum: Investing - Theory, News & General
Topic: Getting out of your comfort zone
Replies: 21
Views: 2182

Re: Getting out of your comfort zone

Not sure that applies to investing if one buys into low cost index funds, buy and hold, stay the course. I am not actually uncomfortable at the moment but if market continue downward for a while I will be. And then like in 2001 and 2008 I will grow my stay the course muscles a little more. That said...
by Rodc
Sun Aug 23, 2015 11:55 am
Forum: Investing - Theory, News & General
Topic: Rebalancing bands revisited, a proposal
Replies: 37
Views: 2709

Re: Rebalancing bands revisited, a proposal

While looking for the paper linked to a couple of posts up I ran into this one: […] So, if they were intellectually honest, and unbiased (I presume here it is merely unintentional blindness where one sees what one wants to see)) they would trumpet the headline: How you rebalance does not matter! Or...
by Rodc
Sun Aug 23, 2015 11:12 am
Forum: Investing - Theory, News & General
Topic: Rebalancing bands revisited, a proposal
Replies: 37
Views: 2709

Re: Rebalancing bands revisited, a proposal

While looking for the paper linked to a couple of posts up I ran into this one: http://ssg.mit.edu/group/fan/papers/SSRN_opt_rebal.pdf I have only glanced at this paper, but it looks interesting if for no other reason it looks like yet one more paper where the academics have lost sight of the forest...
by Rodc
Sun Aug 23, 2015 10:47 am
Forum: Investing - Theory, News & General
Topic: Rebalancing
Replies: 2
Views: 245

Re: Rebalancing

^^

This. Is just doesn't matter. The amount of money in play one way or the other is too small a fraction of a portfolio to move the needle.

Do whichever is easiest for you.
by Rodc
Sun Aug 23, 2015 9:56 am
Forum: Investing - Theory, News & General
Topic: Rebalancing bands revisited, a proposal
Replies: 37
Views: 2709

Re: Rebalancing bands revisited, a proposal

As for rebalancing bands, we know the 5/25 seems to be popular, but where did these numbers come from? It is popular here, if memory serves first promulgated by Larry. Not sure how widely it is popular. He likely had some data. Later there was a paper, wish I could remember which journal, that look...
by Rodc
Sun Aug 23, 2015 6:41 am
Forum: Investing - Theory, News & General
Topic: Rebalancing bands revisited, a proposal
Replies: 37
Views: 2709

Re: Rebalancing bands revisited, a proposal

I do like the idea of asymmetric bands. Intellectually may be of interest. However, if you look at many papers/studies of rebalancing and moreover get some data and dig in, what you find is the details just don't matter. Of course in any study something comes out best, but what you notice after a w...
by Rodc
Sat Aug 22, 2015 7:38 pm
Forum: Investing - Theory, News & General
Topic: "Stocks for the Long Run? Really?
Replies: 29
Views: 4496

Re: "Stocks for the Long Run? Really?

I think these types of analyses can be appropriately termed as: -Shenanigans in statistics: how to fudge the numbers to fit your desired hypothesis. I don't understand all the hate. He is only showing that sometimes bonds win over fairly long periods of time. Do you disagree? And he freely admitted...
by Rodc
Sat Aug 22, 2015 6:41 pm
Forum: Personal Consumer Issues
Topic: Objectionable Manufacturing Country
Replies: 13
Views: 861

Re: Objectionable Manufacturing Country

Buy the product that works and make a charitable donation that helps people in country X.
by Rodc
Sat Aug 22, 2015 6:40 pm
Forum: Personal Consumer Issues
Topic: Objectionable Manufacturing Country
Replies: 13
Views: 861

Re: Objectionable Manufacturing Country

I don't think I'd buy either one. Seems like a rational answer given how the choice is laid out. I would need more information. How objectionable is objectionable? Since I want to have this item, and the objectionable country is highly objectionable to me, I am leaning toward buying the lower quali...
by Rodc
Sat Aug 22, 2015 6:38 pm
Forum: Investing - Theory, News & General
Topic: Shiller PE10 nearing nosebleed territory?
Replies: 322
Views: 35745

Re: Shiller PE10 nearing nosebleed territory?

Your second graph is interesting in that it show there was essentially no value (pun intended! :) ) in using CAPE to time the US market over that time period. I don't think the idea is entirely crazy, but there are some challenges. First, any 8th grader with 30 minutes of training in Excel can find...
by Rodc
Sat Aug 22, 2015 6:20 pm
Forum: Personal Consumer Issues
Topic: Objectionable Manufacturing Country
Replies: 13
Views: 861

Re: Objectionable Manufacturing Country

I don't think I'd buy either one. Seems like a rational answer given how the choice is laid out. I would need more information. How objectionable is objectionable? Since I want to have this item, and the objectionable country is highly objectionable to me, I am leaning toward buying the lower quali...
by Rodc
Sat Aug 22, 2015 6:19 pm
Forum: Investing - Theory, News & General
Topic: Shiller PE10 nearing nosebleed territory?
Replies: 322
Views: 35745

Re: Shiller PE10 nearing nosebleed territory?

You've always had contrarian investors, like Jim Rogers and Mark Yusko, who buy what's on sale, with very long investing horizons, but it's not the kind of product most retail investors would want And don't forget Bill Miller. Many retail investors thought he was the bomb, until well, he blew up. :...
by Rodc
Sat Aug 22, 2015 6:17 pm
Forum: Investing - Theory, News & General
Topic: Shiller PE10 nearing nosebleed territory?
Replies: 322
Views: 35745

Re: Shiller PE10 nearing nosebleed territory?

after having lost money for years by believing in a discredited valuation measure You mean if they'd moved into long-term treasuries as soon as the US market looked overvalued? https://pbs.twimg.com/media/CMjsAoNWIAAhvTG.jpg:large Or they'd just bought-and-held cheap regions instead of expensive on...
by Rodc
Sat Aug 22, 2015 5:00 pm
Forum: Personal Consumer Issues
Topic: Objectionable Manufacturing Country
Replies: 13
Views: 861

Re: Objectionable Manufacturing Country

cheese_breath wrote:I don't think I'd buy either one.


Seems like a rational answer given how the choice is laid out.

I would need more information. How objectionable is objectionable?
by Rodc
Sat Aug 22, 2015 4:58 pm
Forum: Personal Finance (Not Investing)
Topic: Selling house dad to son
Replies: 19
Views: 1393

Re: Selling house dad to son

Thank you for your response. Don't use any pricing offered by a real estate agent. They have different priorities than an appraiser. RM A good RE agent will tell you what similar houses are selling for. Depending on the market houses often sell for higher then appraised value with the buyers coveri...
by Rodc
Sat Aug 22, 2015 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: Selling house dad to son
Replies: 19
Views: 1393

Re: Selling house dad to son

I suggest you talk to a lawyer.

Things get complicated if you want this to be legal and above board and you pay less than full value for the house.
by Rodc
Sat Aug 22, 2015 3:30 pm
Forum: Personal Finance (Not Investing)
Topic: Selling house dad to son
Replies: 19
Views: 1393

Re: Selling house dad to son

If you want this to be honest and fair to all parties get three appraisals and use the middle one.

Or put it on the market for three months and meet the highest offer.
by Rodc
Sat Aug 22, 2015 2:05 pm
Forum: Investing - Theory, News & General
Topic: What to do w/450K in cash?
Replies: 32
Views: 3864

Re: What to do w/450K in cash?

What does the rest of your portfolio look like? And what do you want it to look like? If you want 50% stocks and 50% bonds and have 50% stocks, 40% bonds and 10% cash you are close to target (cash is simply very short bonds more or less). If you want 50% stocks and are at 40%, then use it to buy sto...

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