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Re: Should I include this in my net worth?

Why are you computing networth and how are you going to use it? How does a yes or no answer help or hurt your ability to use it for whatever it is you are using it for? You can't sell it or spend it really. It means if you otherwise could retire at age 65 you can actually retire at age 64.75. Not a ...
by Rodc
Wed Oct 01, 2014 2:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I include this in my net worth?
Replies: 26
Views: 1459

Re: Google's "definition of "risk."

Taylor Larimore wrote:Bogleheads:

Don't dispair.

When I put "DEFINITION OF RISK" into Google, it shows 496,000,000 hits.

Best wishes.
Taylor


483,241 from Bogleheads! :)
by Rodc
Wed Oct 01, 2014 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: Lower risk & return if equity allocation is below 30-40%

For an understand of this from a "fundamental" point of view Google "Weighted Least Squares", or "Gauss Markov Theorem". Basically it is a matter that if bonds zig when stocks zag, the sum has less sigging and zagging than either piece and you get a little boost from th...
by Rodc
Wed Oct 01, 2014 10:38 am
 
Forum: Investing - Theory, News & General
Topic: Lower risk & return if equity allocation is below 30-40%?
Replies: 13
Views: 753

Re: What SWR/expense multiple to use for early retirement pl

It seems the in-retirement withdrawal rate strategy debate comes up often enough, e.g. VPW or fixed withdrawal rate, etc. But I think my question actually comes first: before we worry about how to spend from the portfolio, how big does that portfolio need to be? Seems to me those are only one quest...
by Rodc
Wed Oct 01, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: What SWR/expense multiple to use for early retirement plan?
Replies: 31
Views: 1298

Re: What SWR/expense multiple to use for early retirement pl

What is your ability to rejoin the work force and earn enough to live comfortably on?

This should factor hugely in the amount of risk you would be willing to take.
by Rodc
Wed Oct 01, 2014 8:41 am
 
Forum: Investing - Theory, News & General
Topic: What SWR/expense multiple to use for early retirement plan?
Replies: 31
Views: 1298

Re: what is risk?

Kevin,

"Too strong": we've all been there, myself many times. :)

Rod
by Rodc
Wed Oct 01, 2014 8:32 am
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: what is risk?

skeptic88 stated: I am having a hard time understanding why volatility is considered the determining factor of risk. skeptic88, I would modify that statement a little and replace "the" with something like "the major" or "a major". It is not the only measure in fairly wi...
by Rodc
Wed Oct 01, 2014 8:31 am
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: what is risk?

I guess we'll have to agree to disagree because I don't think you have answered the question at all, nor offered up any data to show anything, nor offered up any measure anyone else could even investigate.
by Rodc
Tue Sep 30, 2014 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: CNN: 5 investing secrets of the wealthy.

A half-truth is the most dangerous lie, because part of it is irrefutable truth.


You mean its irrefutable "truthyness"! :)
by Rodc
Tue Sep 30, 2014 5:20 pm
 
Forum: Investing - Theory, News & General
Topic: CNN: 5 investing secrets of the wealthy.
Replies: 19
Views: 3113

Re: what is risk?

Grayfox, Kevin, I thought I would try to be more clear. It is easy to give reasons why democracy is a lousy form of government. But I don't know a better one. For a simple straight forward good enough for most purposes risk measure it seems to me that annual standard deviation is kind of like that. ...
by Rodc
Tue Sep 30, 2014 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: Should I pay off my sisters student loans?

No. I say this from my own experience with being the "sister" in a similar situation. Many moons ago my brother made his millions while I struggled to get on my own feet after fleeing an abusive relationship with very little money. He offered help, and I refused to take it. Looking back I...
by Rodc
Tue Sep 30, 2014 4:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my sisters student loans?
Replies: 49
Views: 3350

Re: what is risk?

Kevin, Actually, the OP didn't mention funds. Right, that was my question not to the OP but to your claim: The academic definition of investment risk is uncertainty of expected return over the investor's holding period. If your holding period is 20 years, then risk is the variance of of your expecte...
by Rodc
Tue Sep 30, 2014 4:13 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: what is risk?

My brother is my twin in every way but instead only has the historical 20-year returns and 20-year std and correlations. He does his best to build an asset allocation. Do we come up with pretty much the same allocation? I think we will. Do you have any evidence we will come to significantly differe...
by Rodc
Tue Sep 30, 2014 4:08 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: Should I pay off my sisters student loans?

I presume you mean you would pay off the loans after the windfall lands in your bank account.

If so, then I would do this too.

But if you mean pay it off now, I would caution not to count eggs before they hatch (though perhaps you have reason think there is truly 0 chance of this falling through).
by Rodc
Tue Sep 30, 2014 11:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my sisters student loans?
Replies: 49
Views: 3350

Re: what is risk?

If I have a normal distribution, independent annual data, then the 20 year standard deviation is the one year standard deviation divided by sqrt(20). If the data are not 100% independent or not 100% Normal this will not be an exact equality. It's been a long time since Box & Hunter but I believ...
by Rodc
Tue Sep 30, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: need for a backup credit card?

For me, yes.

You never know when you might need to cancel one, or "fraud protection" shuts one down. Or you are on travel and lose one (so on travel don't keep the back up card in the same wallet or purse as you main one!)
by Rodc
Tue Sep 30, 2014 9:51 am
 
Forum: Personal Finance (Not Investing)
Topic: need for a backup credit card?
Replies: 37
Views: 1521

Re: rebalancing conundrum/paradox/irony

So, if I am 60/40, is it best to just invest all new contributions at 60/40, and just rebalance once a year? Or is it better to rebalance with every contribution by buying the asset that goes down in allocation every time I have $$? As a practical matter it has never made enough difference for one ...
by Rodc
Tue Sep 30, 2014 8:05 am
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 82
Views: 4548

Re: Replacing Some, not all, Windows in House

In most places there is a window problem solver. If you call a local quality window dealer, ask them who is the "fixer" in your area and have them take a look before you do anything. Where I live the fixer charges by hour for consultation and has helped me find obscure parts, create a sol...
by Rodc
Tue Sep 30, 2014 7:54 am
 
Forum: Personal Consumer Issues
Topic: Replacing Some, not all, Windows in House
Replies: 15
Views: 1099

Re: Will you invest in Bill Gross's new bond fund?

Gross starting a new fund has no more interest to me than Hollywood gossip and has about the same impact on my investing.
by Rodc
Tue Sep 30, 2014 7:48 am
 
Forum: Investing - Theory, News & General
Topic: Will you invest in Bill Gross's new bond fund?
Replies: 49
Views: 2321

Re: Future equities 2% real rhetoric is hogwash

http://home.comcast.net/~rodec/finance/papers/AgeInBonds.pdf The short write up above has some US historical data near the end. 2% real (or worse) is not unprecedented even over 30-year periods for stocks or even for 60/40 stocks/bonds. But it is pretty unusual. That said, over such time periods we ...
by Rodc
Tue Sep 30, 2014 7:46 am
 
Forum: Investing - Theory, News & General
Topic: Future equities 2% real rhetoric is hogwash
Replies: 45
Views: 3546

Re: what is risk?

Do you have an example where A has higher annual variance than B, but the reverse is true at 20 years? Or the 20 year variance can't be reasonably estimated from the annual variance? You want one example? I will give you a link to hundreds of such securities. But first, this important important mes...
by Rodc
Tue Sep 30, 2014 7:26 am
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: Replacing Some, not all, Windows in House

Mismatched windows might not be helpful when you sell. Personally I would do at least all in a room to match.

Second the idea to see if the existing windows can be repaired first.
by Rodc
Tue Sep 30, 2014 6:56 am
 
Forum: Personal Consumer Issues
Topic: Replacing Some, not all, Windows in House
Replies: 15
Views: 1099

Re: what is risk?

Grayfox explained an important point. I'd like to elaborate on that point a bit. The academic definition of investment risk is uncertainty of expected return over the investor's holding period. If your holding period is 20 years, then risk is the variance of of your expected investment return at th...
by Rodc
Mon Sep 29, 2014 8:55 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: Does market cap weighted indexing logically follow from

This paper might be relevant: Three Proofs that TSM is efficient This makes some common mistakes. First, US TSM is very clear far from being the market portfolio. Bonds are not risk free and are commonly and cheaply available. The bond market is enormous. The US market share is order of magnitude h...
by Rodc
Mon Sep 29, 2014 6:59 am
 
Forum: Investing - Theory, News & General
Topic: Does market cap weighted indexing logically follow from EMH?
Replies: 17
Views: 942

Re: what is risk?

I understand that bogleheads are not necessarily in complete agreement with the efficient market hypothesis, however, I believe it is safe to say that we for the most part, accept it. However, I am having a hard time understanding why volatility is considered the determining factor of risk. Almost ...
by Rodc
Sun Sep 28, 2014 5:12 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: rebalancing conundrum/paradox/irony

You are right that I don't like losing money. I agree I am not at peace with that idea. However, through a process called radical acceptance, I understand that it must and will happen. But this isn't just about predicting the future or regretting the past. It's about investing in the probabilistica...
by Rodc
Sun Sep 28, 2014 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 82
Views: 4548

Re: Paid off mortgage today

Congratulations on the milestone!
by Rodc
Sun Sep 28, 2014 12:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paid off mortgage today
Replies: 26
Views: 2960

Re: rebalancing conundrum/paradox/irony

livesoft wrote:One also has to make peace with losing money. Once you know you are going to lose money and accept that fact, then as an investor you are liberated and have reached freedom.


Agreed. This is very important.
by Rodc
Sun Sep 28, 2014 9:29 am
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 82
Views: 4548

Re: A few minutes search online, saved me $800...

Apparently works for watches too. :happy

Good job. The web is a wonderful thing.
by Rodc
Sun Sep 28, 2014 4:05 am
 
Forum: Personal Consumer Issues
Topic: A few minutes search online, saved me $800...
Replies: 3
Views: 1951

Re: rebalancing conundrum/paradox/irony

You can't always buy low. You'd love to but without a crystal ball you won't. The point of Bogleheadism is to make peace with this. You win some, you lose some, over time you'll be about average (but, at very low cost so you will likely come out a little bit ahead). Just like holding a diversified p...
by Rodc
Sun Sep 28, 2014 3:48 am
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 82
Views: 4548

Re: what is risk?

[OT post removed by admin LadyGeek] No need to be insulting. I used to have some similar ideas, but later came to realize that academics don't own definitions and that while highly specific definitions have an important place in rigorous science (which frankly may leave out economics) being overly ...
by Rodc
Sun Sep 28, 2014 3:32 am
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 116
Views: 4074

Re: Treadmills [vs. Ellipticals]

Interesting read.

Strikes me as an awful lot of money for a one dimensional machine, but it seems they are popular.

How about a descent riding machine. Are they any less expensive?

I would guess that an elliptical would be more reliable than a treadmill, is that true?
by Rodc
Sat Sep 27, 2014 5:36 pm
 
Forum: Personal Consumer Issues
Topic: Treadmills [vs. Ellipticals]
Replies: 54
Views: 3306

Re: POLL: Would you rather work half as long or half as ofte

Which ever option allows me more extended time in the back country with my Gregory. :D Amen to that. Love my Gregory. Option one has its appeal, but I think option two is more balanced and I don't really need/desire every day off for thousands of days in a row. Plus with option one if you die young...
by Rodc
Thu Sep 25, 2014 4:39 pm
 
Forum: Personal Consumer Issues
Topic: POLL: Would you rather work half as long or half as often?
Replies: 68
Views: 3906

Re: Hamilton watches, worth the money?

Timing an automatic watch is easier with what's called a 'hacking' movement - usually considered superior. Which means the second hand stops when you pull the crown out to set the time. Right. That is what I was describing. Have the watch set right on a future minute, winding stem out (ie pull on t...
by Rodc
Thu Sep 25, 2014 4:17 pm
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 236
Views: 9765

Re: New kitchen cabinets or new doors?

Quality of the basic boxes and shelves matter. I have a house built in the 1950s. Kitchen cabinets were built of very high quality birch plywood. Much better than almost all modern cabinets where the box and shelves are low quality fiberboard and all but the best are covered in vinyl of some sort (f...
by Rodc
Thu Sep 25, 2014 4:06 pm
 
Forum: Personal Consumer Issues
Topic: New kitchen cabinets or new doors?
Replies: 28
Views: 1749

Re: Indoor rowing machine - worth it?

If I could choose only one activity for health and longevity on the most efficient basis, it would hands down be running. Weight bearing, coordination, and an activity our bodies are uniquely adapted to do (our cerebellum/spinal cord will find the optimal technique for ability, no training needed -...
by Rodc
Thu Sep 25, 2014 9:32 am
 
Forum: Personal Consumer Issues
Topic: Indoor rowing machine - worth it?
Replies: 48
Views: 1913

Re: Indoor rowing machine - worth it?

I really like the Concept rowing machine of which we have a few in the gym at work. I like the stairmaster a bit more, the treadmill and bike machines less and the elliptical least of all. But if there were only one machine I might just take the rowing machine as it is by far the most total body wor...
by Rodc
Thu Sep 25, 2014 9:14 am
 
Forum: Personal Consumer Issues
Topic: Indoor rowing machine - worth it?
Replies: 48
Views: 1913

Re: Jack and Jill Bathroom a problem?

OP, I just responded to your other post, and was wondering - is this house A or B? Anyway, we have one of these, my wife loved it when we bought it and kids were little (boy and girl). She made a comment that once they become teenagers, they will not want to share the bathroom. Well, that's exactly...
by Rodc
Thu Sep 25, 2014 8:05 am
 
Forum: Personal Consumer Issues
Topic: Jack and Jill Bathroom a problem?
Replies: 18
Views: 1794

Re: Jack and Jill Bathroom a problem?

I've had two places like that, sort of. One was a two bedroom rental town house, rented as a couple. There was a door from the master bedroom and hall and it was fine. The second is in a three bedroom two story family house. We put on the second story and to make the master as large as possible we p...
by Rodc
Thu Sep 25, 2014 7:53 am
 
Forum: Personal Consumer Issues
Topic: Jack and Jill Bathroom a problem?
Replies: 18
Views: 1794

Re: Calculating Rolling Returns

I would caution that rolling periods make more points but do not really make more information and in fact can distort information, so be careful.

http://home.comcast.net/~rodec/finance/ ... eriods.pdf
by Rodc
Wed Sep 24, 2014 7:36 pm
 
Forum: Investing - Theory, News & General
Topic: Calculating Rolling Returns
Replies: 14
Views: 839

Re: Does Equity Risk Decrease over Time?

Just because something was true three times it does not follow that it is extremely likely to continue to be true with extreme regularity. Your point is well taken, Rodc, and technically correct. But if Mike had used the Dimson, Marsh and Staunton database (23 countries over 112 years from 1900-201...
by Rodc
Wed Sep 24, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: Does Equity Risk Decrease over Time?
Replies: 51
Views: 2617

Re: Hamilton watches, worth the money?

yeah, fit is something to get used to and as the weather gets colder here I am sure the wrist will not expand as much during the day. The watch works well, and hopefully it will continue working. I don't notice it being fast or slow so far, keeps time well, of course one seconds this or that way wo...
by Rodc
Wed Sep 24, 2014 11:12 am
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 236
Views: 9765

Re: Why don't you do Financial Planning?

You can be a fine woodworker, seamstress, artist, or landscaper. But you need a steady stream of customers to turn it into a business. You can be a great craftsman and a mediocre salesman/businessman (or woman) and you will go broke. But if you are a mediocre craftsman and a great salesman you are ...
by Rodc
Wed Sep 24, 2014 10:07 am
 
Forum: Personal Consumer Issues
Topic: Why don't you do Financial Planning?
Replies: 41
Views: 3218

Re: Does Equity Risk Decrease over Time?

The simple point is the range of returns will be greater (S.D.), but the lowest return will have a better chance of besting an all bond portfolio when time is given for stocks to produce returns closer to their historical geo. mean as occurs the longer the stocks are held. For us visual types, Mike...
by Rodc
Tue Sep 23, 2014 8:00 pm
 
Forum: Investing - Theory, News & General
Topic: Does Equity Risk Decrease over Time?
Replies: 51
Views: 2617

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

If you are young you might try looking only every few years...
by Rodc
Tue Sep 23, 2014 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: It's pretty freaky watching your stocks go up & down all day
Replies: 60
Views: 5424

Re: How to achieve a balance between "saving" and "living"?!

As for really wanting something that would cut years off of my retirement, I had kids. :happy Kids can do that. Sorry. :| Not necessarily. I had kids kind of late so the deal is wife and I will never get used to having a full salary to live on so we won't need much income to keep our discretionary ...
by Rodc
Tue Sep 23, 2014 5:13 pm
 
Forum: Personal Consumer Issues
Topic: How to achieve a balance between "saving" and "living"?!
Replies: 64
Views: 6544

Re: Why don't you do Financial Planning?

Big difference between having a hobby and doing the same thing professionally. For one thing, to turn any hobby into a profession you have to become a salesman, big time. You can be a fine woodworker, seamstress, artist, or landscaper. But you need a steady stream of customers to turn it into a busi...
by Rodc
Tue Sep 23, 2014 5:04 pm
 
Forum: Personal Consumer Issues
Topic: Why don't you do Financial Planning?
Replies: 41
Views: 3218

Re: International allocation

Taken from Rick Ferri off of a google search for "efficiency frontier - US stock/Int Stock" http://i61.tinypic.com/bev8e1.png Be careful there...depends on what time period you're looking at doesn't it? http://i.imgur.com/oP9dy.jpg http://i.imgur.com/oP9dy.jpg These graphs would be far mo...
by Rodc
Tue Sep 23, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: International allocation
Replies: 81
Views: 4923
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