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Re: Which is King: Income Stream or $ Invested

Income stream up to my minimal acceptable lifestyle then dollars invested after that. That is an interesting answer. That or something similar seems like a good answer. I was think it depends on the goal, retirement lifestyle, inheritance for the kids, etc. That kind of rolls them into an integrate...
by Rodc
Tue Jul 29, 2014 8:28 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 17
Views: 1549

Re: Stocks: losing money for 20-30 years not uncommon

Day9 wrote:It's almost as if investing involves risk, including the risk of loss of principal. :oops:


Somehow (many) people are always trying to find a way for this to not be true.
by Rodc
Tue Jul 29, 2014 8:26 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: losing money for 20-30 years not uncommon
Replies: 14
Views: 1515

Re: Stocks: losing money for 20-30 years not uncommon

patrick wrote:Note that you can't necessarily seek safety from this possibility in bonds. US bonds, for instance, have had more than 40 year periods of negative returns.


And worse, US has had a simultaneous horrible 30-year period in stocks and bonds! They both stank at the same time.
by Rodc
Tue Jul 29, 2014 8:25 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: losing money for 20-30 years not uncommon
Replies: 14
Views: 1515

Re: Should retirement investors own small/value stocks at al

This is a lot of the reason that I did away with my S/D portfolio with tilts a while ago. When you tilt sometimes it takes a while, if ever for the advantage to show up. I'm not getting any younger. Now I am more simplified, but still tilt a bit towards REITs. Can't seem to let that go. :happy It c...
by Rodc
Tue Jul 29, 2014 8:23 pm
 
Forum: Investing - Theory, News & General
Topic: Should retirement investors own small/value stocks at all?
Replies: 21
Views: 1284

Re: How to fix door handle?

Why spend money at Lowe's or HD if all you have to do is tighten a screw? I don't get it. Why post a message on an internet forum if all you have to do is tighten a screw? As others have mentioned, it's really hard to know what he has got going on. It sounds to some of us as if it is just loose. At...
by Rodc
Mon Jul 28, 2014 3:00 pm
 
Forum: Personal Consumer Issues
Topic: How to fix door handle?
Replies: 17
Views: 947

Re: Do Bogleheads Feel Wealthier?

The question is simply too ill posed for me to answer.

I do however feel wealthy enough.

And that is enough for me.
by Rodc
Mon Jul 28, 2014 2:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do Bogleheads Feel Wealthier?
Replies: 57
Views: 4251

Re: Difference between leasing a car and renting a home

I think staying in a home for many years favors buying. And only staying a few years favors renting. In fact if that were not true rental real estate would mostly be a losing proposition for the owner who rents out the property, and that is mostly not the case. The issue is mostly the effect of the ...
by Rodc
Mon Jul 28, 2014 2:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Difference between leasing a car and renting a home
Replies: 7
Views: 930

Re: Public Speaking-help

A couple of follow up thoughts. Humor: it depends on the audience. If you are briefing a casual audience of sales people maybe fine. Briefing your boss's boss or an Army General, not so much. Which brings up an issue: know your audience. Give some thought to what they want to get out of your talk, n...
by Rodc
Mon Jul 28, 2014 10:00 am
 
Forum: Personal Consumer Issues
Topic: Public Speaking-help
Replies: 62
Views: 2908

Re: POLL: My home is worth less/more in 2014 than in 2007?

Zillow does not know condition of the house or remodel work. It depends largely on numerical data like sq footage. In our area it is often confused by tear-down-small-house-and-build-mansion. It will list the old house details like year built and sqft with recent sales price of the new house (say 1...
by Rodc
Mon Jul 28, 2014 9:43 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: My home is worth less/more in 2014 than in 2007?
Replies: 82
Views: 4013

Re: POLL: My home is worth less/more in 2014 than in 2007?

I voted don't know and don't care. But I do care a little, and that was not an option. I don't expect to sell for 8 years or so, though sometimes things come up. I have some idea of what the house is worth, but I have not tried to carefully estimate based on comps, talking to real estate agents and ...
by Rodc
Sun Jul 27, 2014 6:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: My home is worth less/more in 2014 than in 2007?
Replies: 82
Views: 4013

Re: One of the simplest rational reasons why some should til

I'm not sure what you are getting at. The main argument in my reply to steve was that some investors are not just mean-variance investors. They also care about other things. That is the crux of the matter. I think variance is a fair approximation, good enough for many purposes. As is beta. But it i...
by Rodc
Sun Jul 27, 2014 6:28 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 42
Views: 3696

Re: Public Speaking-help

Do not cancel. This can be a very career limiting limitation. Higher level people need to be able to address groups of people. They need to be able to rally support for action among other things. You can learn to do this and your future self will thank you for not giving up. In the near term get a f...
by Rodc
Sat Jul 26, 2014 10:21 am
 
Forum: Personal Consumer Issues
Topic: Public Speaking-help
Replies: 62
Views: 2908

Re: 2015 Subaru Forester, which trim/options?

I have two Outbacks and they are base models. They come with many nice features standard. The price really jumps on these cars when you start adding options. More stuff = more stuff to go wrong. Electronic doo-dads become obsolete very quickly nowadays. I'm with you but I think we are a distinct mi...
by Rodc
Fri Jul 25, 2014 11:56 pm
 
Forum: Personal Consumer Issues
Topic: 2015 Subaru Forester, which trim/options?
Replies: 16
Views: 1638

Re: Should market valuations be completely disregarded?

Most Bogleheads seem to use the expression 'Market Timing' to mean anything other than fixed Strategic Asset Allocation. Would it more correct to apply the term only to Tactical Asset Allocation? Like "active" in describing a fund covers a range of territory so does "market timing&qu...
by Rodc
Fri Jul 25, 2014 7:00 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3788

Re: One of the simplest rational reasons why some should til

It seems your assumption is that SCV offers more reward for more risk. Couldn't your hypothetical wealthy and retired investor simply increase the equity portion of their portfolio if they want to take on more risk? This could be done at a lower cost and with less complexity than adding a SCV tilt ...
by Rodc
Fri Jul 25, 2014 6:57 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 42
Views: 3696

Re: "What Has Time Taught Bill Bernstein?"

nedsaid: I also liked that he discussed the limitations of a quantitative approach to investing. Numbers are important but they aren't the whole thing with investing, there is a whole lot more. And a whole lot less. :happy What I mean is I believe IF average investors simply follows the basic Bogle...
by Rodc
Thu Jul 24, 2014 10:22 pm
 
Forum: Investing - Theory, News & General
Topic: "What Has Time Taught Bill Bernstein?"
Replies: 19
Views: 3873

Re: Should market valuations be completely disregarded?

Rod We are not as a firm engaged in market timing at all (what I do for myself in terms of this issue can be different--as in 1998 we simply rebalanced for clients while I sold all but value funds). We only as firm use the valuation metrics to estimate odds of success in MCS. That helps determine t...
by Rodc
Thu Jul 24, 2014 9:34 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3788

Re: 2015 Subaru Forester, which trim/options?

I bought the base model. Works fine for us with two kids. Did not have a problem with cloth seats in previous cars even with 6 and 11years of use. Near as I can tell the markup on add ons is huge (seems to be where they make their profits), and unless really important something of a waste of money, ...
by Rodc
Thu Jul 24, 2014 6:32 pm
 
Forum: Personal Consumer Issues
Topic: 2015 Subaru Forester, which trim/options?
Replies: 16
Views: 1638

Re: Should market valuations be completely disregarded?

Larry, when you carefully analyze your client performance against an appropriate benchmark what has the benefit to your clients from this valuation driven market timing been? What benefit in returns, risk, or Sharpe Ratio?

Thanks.
by Rodc
Thu Jul 24, 2014 6:23 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3788

Re: The ultimate Boglehead exercise

How about rock climbing, takes a lot of discipline to keep the right form by not overgripping, lunging for holds that look good, etc. Its good to go up but after awhile you don't care if you fall because you know the system works. If you want to trad lead you have a large front end load. Sport lead...
by Rodc
Wed Jul 23, 2014 8:58 pm
 
Forum: Personal Consumer Issues
Topic: The ultimate Boglehead exercise
Replies: 30
Views: 3769

Re: The ultimate Boglehead exercise

pennstater2005 wrote:My exercise is chasing my kids. It's bogleheadish because it's free.


Kids are a huge up front entry cost.

Like saying climbing is free (after you buy $1000 of equipment)

:)
by Rodc
Wed Jul 23, 2014 4:34 pm
 
Forum: Personal Consumer Issues
Topic: The ultimate Boglehead exercise
Replies: 30
Views: 3769

Re: Best Used Recreational Bicycles for New Riders

I'm beginning to think that this kind of comparison is more misleading than helpful, mostly because people mentally map "Honda Civic" to the department store bike, and the BMW to a decent, but reasonably priced bike shop bike. I was not clear. Bike recommended to beginners or non serious ...
by Rodc
Wed Jul 23, 2014 4:24 pm
 
Forum: Personal Consumer Issues
Topic: Best Used Recreational Bicycles for New Riders
Replies: 24
Views: 1737

Re: Should market valuations be completely disregarded?

Most Bogleheads seem to use the expression 'Market Timing' to mean anything other than fixed Strategic Asset Allocation. Would it more correct to apply the term only to Tactical Asset Allocation? Like "active" in describing a fund covers a range of territory so does "market timing&qu...
by Rodc
Wed Jul 23, 2014 3:13 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3788

Re: Should market valuations be completely disregarded?

Few thoughts First only fools IMO ignore valuations. They matter a great deal. But it's how you use them that matters. The most important way to use them is not for timing, but to estimate future returns. Valuation metrics are the best, if far from perfect, metrics we have for estimating returns, e...
by Rodc
Tue Jul 22, 2014 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3788

Re: Should market valuations be completely disregarded?

What good is looking at the graph of relative stock valuation over long periods (including eg. late 19th century, of dubious relevance to today IMO) if you don't know how bonds were valued? I never understood why so many who advocate P/E10 (Q whatever) timings do so with no context of the valuation...
by Rodc
Tue Jul 22, 2014 7:16 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3788

Re: Thoughts on [not] rebalancing

I was 100% in US stocks. I was less aggressive than most but more aggressive than I would have been if I had read Boglehead's Guide to Investing. :confused 100% Stocks is more aggressive than most; not sure how you figure less than most. Rebalancing within stocks is not worth very much, one type of...
by Rodc
Tue Jul 22, 2014 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: Thoughts on [not] rebalancing
Replies: 12
Views: 669

Re: What to do in a market correction

Maybe it is time to resubmit history: From John Merrill, "Outperforming the Market". Mr. Merrill's excellent book has a table showing that a diversifed portfolio of stocks, bonds, and cash, and held for approximately five years, would have enabled an investor to survive and eventually pro...
by Rodc
Tue Jul 22, 2014 12:58 pm
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 3072

Re: P/E Ratio: How do YOU interpret/use it?

In retirement it might have some value in that when something like P/E10 is high be careful about how much you sell to generate income because the size of your portfolio just might be artificially high. So you think buying low and selling high is a bad idea? I think selling and spending too much ba...
by Rodc
Tue Jul 22, 2014 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: P/E Ratio: How do YOU interpret/use it?
Replies: 26
Views: 1350

Re: Can it be wrong to be too risk averse?

MCS can help you make such decisions as you see the consequences of your choices. For those highly risk averse investors would suggest they read Reducing the Risk of Black Swans which shows how at least historically you could have kept returns up while cutting left tail risk dramatically. I would a...
by Rodc
Tue Jul 22, 2014 11:48 am
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2320

Re: Can it be wrong to be too risk averse?

He is not very risk averse, he just doesn't know that 100% bonds are more riskier than 75% stocks and 25% bonds. If he is saving for retirement, and if he has a long investment horizon, why would he worry about temporary paper losses of the principal? http://www.youngresearch.com/wp-content/uploads...
by Rodc
Tue Jul 22, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2320

Re: Reduce / Eliminate Emerging Market in Retirement?

Portfolio theory says that if emerging market (EM) stocks are part of the tangent portfolio, the ratio of EM stocks to developed market stocks should not be a function of the risk aversion of the investor. If you want to reduce risk in retirement, reduce allocations to risky assets across the board...
by Rodc
Tue Jul 22, 2014 10:23 am
 
Forum: Investing - Theory, News & General
Topic: Reduce / Eliminate Emerging Market in Retirement?
Replies: 11
Views: 1162

Re: P/E Ratio: How do YOU interpret/use it?

I don't think it has much or any value for folks in the accumulation phase as far as adjusting how you invest. You might consider the likelihood of low returns for a while and increase your savings rate so you stay on track. In retirement it might have some value in that when something like P/E10 is...
by Rodc
Tue Jul 22, 2014 9:30 am
 
Forum: Investing - Theory, News & General
Topic: P/E Ratio: How do YOU interpret/use it?
Replies: 26
Views: 1350

Re: Can it be wrong to be too risk averse?

The real issue I think is are you are willing to save enough to do ok with very small returns*. If so, munis should be a reasonably safe strategy. If you have your entire portfolio in munis you should be able to be well diversified, so I disagree with the poster above who said you really should use ...
by Rodc
Tue Jul 22, 2014 9:14 am
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2320

Re: Best Used Recreational Bicycles for New Riders

Note: I am not at all a bike expert, though I do ride from time to time (maybe average two or three times a months when the weather is nice, varies some year to year, mostly easy dirt trails, an hour or so, on a 15 year old bottom end Specialized mountain bike). Did about a half day or so a month ag...
by Rodc
Mon Jul 21, 2014 1:33 pm
 
Forum: Personal Consumer Issues
Topic: Best Used Recreational Bicycles for New Riders
Replies: 24
Views: 1737

Re: Value Overvalued

I assume sarcasm.... if not, Total Stock Index fund.


nisi has nearly 25,000 posts.

What do you think the odds are he does not know about TSM funds?
by Rodc
Mon Jul 21, 2014 9:22 am
 
Forum: Investing - Theory, News & General
Topic: Value Overvalued
Replies: 23
Views: 2275

Re: Poll: Has your AA changed in the last 18 months

I picked the top option, but I don't know if you really meant it the way it applies to me. I'm on a predetermined slide towards a 20% "risk-free" asset allocation as I approach retirement. Strictly speaking, it's because I consider my ability to take risk to be lower the closer I get to r...
by Rodc
Sun Jul 20, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Has your AA changed in the last 18 months
Replies: 58
Views: 3479

Re: Who else hates choosing a car?

Fortunately I only desire a mid level car that is reasonably cost effective, safe and comfortable and goes from point A to point B. Family wants one that is largish, 4WD, for hauling camping gear, yard waste, ski trips, etc. Other can be a mid sized car. I am more comfortable buying Japanese brands....
by Rodc
Fri Jul 18, 2014 4:27 pm
 
Forum: Personal Consumer Issues
Topic: Who else hates choosing a car?
Replies: 75
Views: 6400

Re: Options/guidance for a lazy person to be fit

So let's assume that people know how to exercise and know how to eat right, but just cannot get motivated? A dog doesn't do it, so what does? A heart attack? What is the epiphany that leads to real action? Is a shrink called for? Paste an unattractive picture of yourself in very little clothes on t...
by Rodc
Fri Jul 18, 2014 3:07 pm
 
Forum: Personal Consumer Issues
Topic: Options/guidance for a lazy person to be fit
Replies: 79
Views: 5507

Re: Options/guidance for a lazy person to be fit

If you want to be fit, as opposed to simply lose weight, you have to exercise. Over decades (I'm older than you) and I have really come to appreciate the need to mix things up. I simply can't do the same thing day after day without getting hurt (other than maybe something really easy like going for...
by Rodc
Fri Jul 18, 2014 1:21 pm
 
Forum: Personal Consumer Issues
Topic: Options/guidance for a lazy person to be fit
Replies: 79
Views: 5507

Re: Options/guidance for a lazy person to be fit

If you want to be fit, as opposed to simply lose weight, you have to exercise. Over decades (I'm older than you) and I have really come to appreciate the need to mix things up. I simply can't do the same thing day after day without getting hurt (other than maybe something really easy like going for ...
by Rodc
Fri Jul 18, 2014 12:01 pm
 
Forum: Personal Consumer Issues
Topic: Options/guidance for a lazy person to be fit
Replies: 79
Views: 5507

Re: Tobins Q as market valuation metric

If you are starting today with something like an inheritance and do not expect to add new funds over time this would be more of a concern. I don't think this is quite right. I think "more of a concern" can apply to anyone with a large stash, regardless do where and when it came from. The ...
by Rodc
Fri Jul 18, 2014 9:31 am
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2098

Re: If interest rates would ever reach double digits again

Appreciate the history lessons and context.
by Rodc
Fri Jul 18, 2014 9:08 am
 
Forum: Investing - Theory, News & General
Topic: If interest rates would ever reach double digits again
Replies: 36
Views: 3016

Re: If interest rates would ever reach double digits again

If interest is 15% and you buy some long bonds to lock in that wonderful rate, what is to stop the interest rate of rising to 20% and you get killed? If I hold the long bond to maturity I should not get killed, right? My thinking was that even if inflation is high at purchase as some suggest it cer...
by Rodc
Fri Jul 18, 2014 8:13 am
 
Forum: Investing - Theory, News & General
Topic: If interest rates would ever reach double digits again
Replies: 36
Views: 3016

Re: POLL: Do you have a dedicated REIT allocation?

I have had a slice of REITS since reading Random Walk Down Wall Street about 10 years ago. Seems to have worked fine, though I confess I have not done a careful analysis. It of course has not been life changing either for good or bad. Never expected it to be life changing. :) Any asset you have will...
by Rodc
Thu Jul 17, 2014 3:59 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6972

Re: If interest rates would ever reach double digits again

If interest is 15% and you buy some long bonds to lock in that wonderful rate, what is to stop the interest rate of rising to 20% and you get killed? If I hold the long bond to maturity I should not get killed, right? My thinking was that even if inflation is high at purchase as some suggest it cer...
by Rodc
Thu Jul 17, 2014 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: If interest rates would ever reach double digits again
Replies: 36
Views: 3016

Re: If interest rates would ever reach double digits again

If interest is 15% and you buy some long bonds to lock in that wonderful rate, what is to stop the interest rate of rising to 20% and you get killed?
by Rodc
Thu Jul 17, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: If interest rates would ever reach double digits again
Replies: 36
Views: 3016

Re: Tobins Q as market valuation metric

Certainly 50 years investing isn't too far a stretch is it? And every day we see new investors in their 20's starting on their investing journey, so even 60 years is conceivable. I just wanted to get the Bogleheads take on the Tobins Q and should we be worried that it's value is 3rd highest in hist...
by Rodc
Thu Jul 17, 2014 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2098

Re: Tobins Q as market valuation metric

Your numbers are scewed, did you look what % of 25 years old people actually save? Further more you might have an account for 60 years but your contribution value of assets etc... varies grately, My question is for hypothetical investor who right now has assets of 100 to 500k and about 20 to 30 yea...
by Rodc
Thu Jul 17, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2098

Re: Tobins Q as market valuation metric

60 years investment lifetime? Am I reading this right? Who invests for 60 years some ppeople don't live that long never mind investing Certainly true some people die young. Not a good plan though. :) However, if you do die young likely you won't run out of money. Not sure that is good though. If yo...
by Rodc
Thu Jul 17, 2014 11:33 am
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2098
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