Bogleheads.org

This diagram should clear things up. Two stocks, A and B. A pays no dividend. B pays 100% dividend. Assume P/B = 1. Both stock A and B start with book value and market value of $10. After $1 of earnings, A has book value of $11. After $1 earnings and paying %1 dividend B still has $10 book value + ...

Jfet wrote: Maybe bitcoins will be the one that survives the next 5000 years because it has a fixed upper limit...

Until someone hacks the algorithm...

The illusion of safety is such an intoxicating elixir.

[Personal attack removed by admin LadyGeek] I almost flagged this as inappropriate because of the condescending and insulting tone. Perhaps you might wish to rewrite or redact it before someone else does. Brushing aside your Strawman fallacious example, consider this: 1) No fiat currency has ever l...

If I did own Yen, I think that as a US resident the only relevant thing to me would be the value of JPY vs. the USD. Why is the price of gold in JPY at all important? Keith It is because people all over the world buy gold based upon their own currency. I am answering the OP's question. Looking at t...

bertilak Re Wellington, that of course is fine--mutual funds of course invest in individual stocks. And Wellington certainly has a great track record and is relatively low cost. As to matters, that is exactly the point--the research makes clear is that the exposure to those factors explains almost ...

Good article, Larry. I have a question regarding the following quote: That means not only avoiding concentrating risk in single companies (especially the stock of your employer), but also concentrating in sectors and countries. Would that caution apply to REIT's, (which I have never owned outside o...

My thoughts involve SPIAs, options, and dividends; dividends because they are a way of "locking in" return. SIPA - you are too young and yields are too low to make this attractive for you for quite some time Options - really bad idea. if you are doing covered calls, you are cutting off th...

This thread is close to being about nothing, and may thus be locked. However, I have been contemplating the chart, and it scares me. There is no way I would rebalance into gold if I owned any. If the chart were for two other classes, like small stocks vs foreign bonds, I'd have no problem. Rebalanc...

momar wrote:I don't care. I still wish I had bought gold back in 2000.

I wish I had purchased credit default swaps on MBS's with interest only, no-documentation, loans in 2008. But then again it's easy to invest if you had a time machine,

Doesn't the chart suggest you should be rebalancing stocks into gold, since they have diverged about 20% in the last few months? Keith Only for the PP folks. The chasers are bidding up gold based on their unique understanding of global economies and monetary policy... Of course, I view the paraboli...

They are just sitting back and collecting their dividends... er, wait... :beer I literally LOL'ed. The PP crowd I have no issue with. I don't agree with their approach, but get their point and strategy... So meh. But it is rather funny that we haven't seen the chasers posting for a long while. I gu...

Was gold just performance chasing? Seems to me that 6 months ago every third thread was about gold. Now, nothing?

Wondering why I am not on the list...

Hi folks. About 8% of my portfolio is a REIT. Question - when computing the ratio of US to international stocks, should I include the REIT as part of US stocks? Thanks. I have the same US/Intl split in REIT's as I do in other equities (50/50). I use VNQ and VNQI. I manage them separately from the r...

PTTRX is my only holding for intermediate term bonds. I have short term corporate, short term muni, and IBonds as well. It is also the only actively managed fund I own. The long track-record and the agility to react to artificially low interest rates is reason enough for me to "gamble"

C4NT wrote: with 4-5% of that bond allocation in REIT. .

REIT's are equities. NOT NOT NOT NOT NOT Bonds

Freefall? LOL This doesnt even count as a correction. Its ~6.5% drop. Need a 10% drop before its a correction. You might well get your wish . . . IWN is already down 10% from the top -11.5% (as I write), SPY down 8.2%. I would write something political, but it would only make me chagrined. Perhaps ...

What about putting half of that in a short term bond fund like VFSTX and the other half in CDs or cash? Or would that to be too risky? VFSTX has a standard deviation of 3.31 over 5 years, and a 3.87% annualized return over that time period. If you were to incur a loss, it would be minimal (1-3% in ...

150-175 So you need $150 - $175 You have $125 You can save $48 Total: $173 Delta: +$23 - -$2 Now run assume a 40% decline in equities over the next two years (worst case). You do nothing You have $75 You can save $48 Total: $123 You cut your equities to 1/2 You have $100 You can save $48 Total: $14...

3CheersforLkyJack wrote:All gains would be long term. My hope is to put down at least half of the total cost, if not more.

And how much is that...?

Are your gains long term? And how much do you need for downpayment?

Conceptually, does the inclusion of IBonds change your "blended duration" within your FI portfolio? And if so, do you adjust your holdings to compensate? Do you think of IBonds as having 0 duration, because there is no interest rate risk? For example: Target duration: 5 years IBonds as a %...

Conceptually , does the inclusion of IBonds change your "blended duration" within your FI portfolio? And if so, do you adjust your holdings to compensate? Do you think of IBonds as having 0 duration, because there is no interest rate risk? For example: Target duration: 5 years IBonds as a...

If you are young enough, hide in IBonds as much as possible. I also have shortened my bond duration. I consider it prudent.

I ask because I think I should be, but I'm not sure. I'm maxing my 401k and my wife contributes 11% to her pension fund. Additionally, we both max out backdoor roths. We own a home with 20% equity and a 3.75% mortgage. I have an emergency fund greater than 6 months. So my question is when did you s...

I actually don't think we disagree at all. Your number is your number. And reguardless of the differences in our respective numbers, the point remains the same. Enjoy what you do, while you work towards making progress on your number. The information you had shared up until the last post indicated a...

So your point is noted, but I respectfully decline to take up your negative outlook on life. :) edit: I feel like I should also point out that based on your savings rate and your income, you will want/need a lot more money than I will in retirement, so your $500k in savings so far is not particular...

You can check out the post above to see how much you might have in 18 years. It is probably not enough even under optimistic real return scenarios. You should be thinking 2% withdrawal as a margin of safety. Check out http://www.firecalc.com/ 2%, really? Pretty much any literature I've read on the ...

Larry - for those of us who are too lazy to pick individual Muni bonds, would SHM (iShares Short term national Muni) be a good alternative?

Started it on Jan 1 this year. I forget how long it took for funds to clear then roll-over into the Roth. But definitely was done by Jan 10th for both me and my wife. Good luck!

Process
Fund Trad IRA > Wait for funds to clear > Roll over to rIRA > Purchase investment

It's yet another example of a valuation metric being "interesting," not "definitive" - which you have said many times. It's amazing to me to see the psychology at work here. While the Shiller PE10 is interesting, and may be informative in many situations, in other situations it i...

Larry - The issue I take with the PE 10 is the significant decline in earnings due to the great recession. If you were to remove that major dip from the PE 10 calculation, where are we valued? Is it fair to allow outlier data points to skew the analysis of todays PE 10, vs the historical baseline yo...

Our Roths hold DGS emerging small cap VNQ US REIT VCSH corporate short-term bond I consider our small Roth IRAs to be precious future tax-free space. Sure, I want to have them grow huge and tax-free, but I also don't want to lose lots of money so I have to start over. The amounts that one can contr...

You will also never see the high's of these correlation ranges as long as we are not in a global crisis. Further, periods of 5 years is not enough of a sample to draw any conclusion from - except that we likely have experienced the height of global correlations during that period. A 0.64 correlatio...

Correlations during a global economic crisis only prove correlations during a global economic crisis. Those are rolling 120-day correlation since about the start of the funds. It depends on the fund. For example, correlation VTI-VWO is from Aug 23, 2005 to Mar 18 2013. So the chart is from severals...

I’ve got a 4-funder right now and it’s the usual TSM/TISM/BND/REIT. I want to add just one different stock fund at 10% of portfolio. I have enough room in tax sheltered so tax efficiency of the new fund isn’t important. The horizon is at least 30 years. Right now I’m 30/30/30/10 TSM/TISM/BND/REIT. ...

I'm in a market timing mood, so since small-cap value has been doing great and emerging markets has not been, I would say add some small-cap emerging markets in the form of EWX or DGS. Full disclosure: I own these and everything else, too. I have been adding to EWX and VSS, from IJS and VTI over th...

I add all of the above + EM small cap. For me - that's a bridge too far. :shock: Fine. Although I disagree. :) Then IF you TISM contains Emerging Markets, your most-likely best diversifier (by correlations) will be International Small Caps. Valuations also favor intl. small caps. VSS is what I use....

I add all of the above + EM small cap.

Personally, I would put 50/50 in VBR/VSS. A lifetime is a long horizon...

A 1% premium may not cover your costs. There may be no volume at the strike price you want. These are just the usual caveats with this strategy. I noticed that with: VV IJS VSS However, plenty of volume with EEM. And yes, I know VWO is a better emerging markets etf then EEM. I TLH'ed last year away...

I am quite familiar with general opinions about covered calls, but I am thinking that I may be in a unique situation that makes it make sense during the course of this year. My wife and I are buying a house this time next year. Most of the money for our 22% down payment is in bonds and will come fro...

The remodel is an increase in consumption. I would be happy with new cabinets, a new fridge & a new floor, the last 2 I can do myself. But this is something my wife has been talking about for more than a few years. Hard to put a price on that. So its the intangibles that tip the scale for a go ...

Some points: 1: your current portfolio is likely to have a negative real return for the next several years - if that's ok, ok. If not, then you will need to move out on the risk curve 2: efficient frontier models almost always see both better returns and lower risk when some equities are added So, g...

That "if the timing works out" is a biggie. 1: anyone carrying forward losses cannot do this 2: to produce both a $3k gain and a $3k loss you would likely have to own investments that are volatile and negatively correlated - like extended duration bonds and equities - or have a lot of mone...

A home is not an asset, it is a liability masquerading as an asset. A home is not an asset, it is a liability masquerading as an asset. A home is not an asset, it is a liability masquerading as an asset. Ok, I'll repeat it daily as I'm here to learn. Straying slightly off topic: the home is not an ...

With 20% down she can avoid PMI with most conventional mortgages. If she wanted to go FHA and avoid PMI, she would need to do 22% down and a 15y mortgage. The FHA route would give here a fantastic rate, if she can do a 15y mortgage. So I would: 1: Make sure she avoids PMI 2: Evaluate the ability to ...

How much can she put down as a percentage of purchase price? Are you looking to help with funds, or trying to get her a better rate via guarantee?

What ever became of that school of thought: "if you can't pay cash for it, you can't afford it."? +1. If you're six years out from retirement and can't comfortably afford this with room to spare, I would think hard about a $45,000 remodeling. Streamline expenses and work on building up re...

What ever became of that school of thought: "if you can't pay cash for it, you can't afford it."? That's been outmoded since at least 1407 when Banco di San Giorgio was established, but possibly as early as 2000 BC with grain loans . The same stuff has been going on forever, and it's ridi...