Search found 308 matches

Return to advanced search

Re: Looking at top 1% for actionable insight

My take on smart vs lucky, and wealth. Wage and salary earners that work hard, and are smart, disciplined and prudent can make it to the top with a reasonably narrow variance of expected outcomes, depending on their field of endeavour (= the work hard * smart paradigm). They are unlikely to be bankr...
by Tonen
Sat Apr 19, 2014 7:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Looking at top 1% for actionable insight
Replies: 73
Views: 7496

Re: Sustainable wage increases over the long term?

2% for 35 years sounds like pie in the sky to me. Australia has had one of the world's best economies over the last few decades, with no recession for I think 3 decades now. Even for the Goldilocks performance, it has only managed ~1.5% annual wage growth vs CPI. I imagine this is at least in the to...
by Tonen
Wed Mar 26, 2014 9:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Sustainable wage increases over the long term?
Replies: 20
Views: 1174

How to convince family & friends to use Boglehead Method?

The situation is a little easier in Australia Most workers have a portion of their salary directed to a retirement account by law. Those moneys tend to end up in "default" investments - typically around 60/40 stock/ bonds at around 0.7% MER. Not perfect, but mostly there. The conversation ...
by Tonen
Sun Feb 23, 2014 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: How to convince family & friends to use Boglehead Method?
Replies: 61
Views: 4214

Re: Advice for Australian Couple

Hi illmaster, and welcome. Contributions New annual Contributions $12160 his superannuation $6525 her superannuation $90000 taxable (for retirement, not short term goals) The "90k taxable" - do you mean you plan to save $90k/ year outside super? If so, consider upping total Super to $25k/ ...
by Tonen
Wed Jan 22, 2014 9:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice for Australian Couple
Replies: 7
Views: 605

Re: Aussie Cash vs Govt Bonds

Thanks guys - most helpful.

Watty - they are taxed the same

At the moment then for Aussies it seems a CD ladder/ cash are a very reasonable alternative to government bonds.
by Tonen
Thu Jan 09, 2014 11:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Aussie Cash vs Govt Bonds
Replies: 9
Views: 466

Re: Aussie Cash vs Govt Bonds

So yes bonds have more risk, but in the long run, on average, they have higher returns. If you think the Australian Central Bank might cut rates in the future, then you will be stuck with an asset making you low or no return (or negative real return). Maybe I can try to be clearer by comparing CD v...
by Tonen
Thu Jan 09, 2014 9:17 am
 
Forum: Investing - Help with Personal Investments
Topic: Aussie Cash vs Govt Bonds
Replies: 9
Views: 466

Aussie Cash vs Govt Bonds

Cash for an Australian investor can yield around 3.8% - about the same as a 7 year Treasury bond, with zero risk/ same government guarantee. Given the general view is to keep coupon bond duration in the short to middling range anyway, is there any particular reason an Aussie should buy RBA coupon bo...
by Tonen
Thu Jan 09, 2014 4:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Aussie Cash vs Govt Bonds
Replies: 9
Views: 466

Re: Home maintenance costs: Does 1% hold true?

What figure does USA tax department allow as depreciation for investors? That's likely to be close to a realistic number both for investors and home-owners. They don't give deductions away. In Australia it's 4%/ annum - that pretty much reflects what I spend per year on average to maintain our home....
by Tonen
Fri Jan 03, 2014 9:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Home maintenance costs: Does 1% hold true?
Replies: 32
Views: 2609

Re: Asset Allocation for Middle Age

When its time is indeed a mystery - for me it was about age 45 - once the kids started leaving school it dawned on me that I really may well stop working in 15-20 years. Before that age, having a young family meant retirement felt a pretty abstract concept! I try to avoid the "getting fooled&qu...
by Tonen
Tue Dec 31, 2013 8:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation for Middle Age
Replies: 32
Views: 3973

Re: Lots of ? market timing on bonds

(Australia) CD's here are a no-brainer over government bonds irrespective of whether you want short or intermediate duration. Individual investors have it all over the institutions - CD's (at least as online accounts) are Government Guaranteed up to $250k/account, and generally yield around the same...
by Tonen
Sun Dec 29, 2013 10:51 pm
 
Forum: Investing - Theory, News & General
Topic: Lots of ? market timing on bonds
Replies: 20
Views: 1363

Re: slowly moving to 3 fund... role of REITs?

Residential real estate in Australia is estimated to be 3.5 times the value of our stock market - add in unlisted commercial property I guess may push that to over 4 times. Presumably the situation in the USA is similar. I don't have the time or interest to invest directly in real estate beyond owni...
by Tonen
Wed Dec 25, 2013 7:09 am
 
Forum: Investing - Help with Personal Investments
Topic: slowly moving to 3 fund... role of REITs?
Replies: 29
Views: 2196

Re: Commodities Funds: A Decade of Disaster

These things were originally flogged to the market mainly on the basis of "normal backwardation"/positive roll return claims, with less mention of diversification/ inflation protection. Essentially, roll returns + the collateralised returns were supposed to give similar returns to that of ...
by Tonen
Sun Dec 22, 2013 8:53 am
 
Forum: Investing - Theory, News & General
Topic: Commodities Funds: A Decade of Disaster
Replies: 196
Views: 11548

Re: misguided interest in div strategies

I personally agree high dividends are no advantage. Having said that, there are two things that do niggle, despite the evidence to the contrary. Firstly, agency risk - investors have arguably more interest in putting free cash flow (dividends) to good use than managers might with retained earnings. ...
by Tonen
Tue Dec 17, 2013 8:47 am
 
Forum: Investing - Theory, News & General
Topic: misguided interest in div strategies
Replies: 200
Views: 12945

Re: Resist temtatiion of leverage

Just a thought bubble Larry ... stocks also have embedded leverage by virtue of company borrowings. Though obviously different to what you are referring to here, do highly leveraged companies suffer similarly to what you describe? Have company leverage ratios been investigated in terms of factor inv...
by Tonen
Mon Dec 16, 2013 6:10 pm
 
Forum: Investing - Theory, News & General
Topic: Resist temptation of leverage
Replies: 7
Views: 811

Re: Where do Bogleheads call home?

Australia Low cost investing is getting easier and easier. Though the overall penetration of passive investing is less than in USA, there are better and better options becoming available. As a generalisation, for those willing to look, broad market products e.g. from Vanguard and DFA run at about 0....
by Tonen
Thu Dec 12, 2013 6:23 pm
 
Forum: Personal Consumer Issues
Topic: Where do Bogleheads call home?
Replies: 17
Views: 3029

Re: Tips and deflation

I realise that in times of deflation, that conventional bonds tend to outperform Tips. However, if a Tip is issued and guarantees that the capital will be preserved along with the interest payments, then theoretically it would seem that it would be of some benefit in deflationary periods. This is h...
by Tonen
Sun Dec 01, 2013 5:39 pm
 
Forum: Investing - Theory, News & General
Topic: Tips and deflation
Replies: 4
Views: 557

Re: How do you measure up to the super-rich?

It's an unpublished study unlikely to be statistically significant. "The data came from a research file" = immediate selection bias "the portfolios of 115 wealthy US households" = low numbers " the 10 per cent of families with the most wealth" = post-hoc subset analysis...
by Tonen
Thu Nov 21, 2013 3:36 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you measure up to the super-rich?
Replies: 26
Views: 2705

Re: Putting Active Management to the Test

Two thoughts You can't assume outperformance and underperformance will be equal. "7/10" is irrelevant - what is relevant is overall portfolio return. No point having 7 winners if one of the other 3 is a complete stinker. In any case, you have a 17% chance of randomly having 7 or more funds...
by Tonen
Tue Nov 05, 2013 4:06 am
 
Forum: Investing - Theory, News & General
Topic: Putting Active Management to the Test
Replies: 90
Views: 8151

Re: The new safe withdrawal rate

Another slant on the SWR is to adjust it by age. In Australia, superannuation pensions are mandated to take the following minimum amounts out each year. The intent is to minimise forming large estates in a tax free environment. Of course you aren't required to spend it - just take this minimum out o...
by Tonen
Sun Oct 06, 2013 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: The new safe withdrawal rate
Replies: 285
Views: 17626

Re: The new safe withdrawal rate

A 30 year TIPS ladder has a guaranteed safe withdrawal rate of 3.65%, albeit with no residual value. (at 0% CD interest vs 2.5% CPI for the missing years in the ladder - SWR is 3.75% if CD = CPI) If valuations are that the new SWR is 3%, anything but 100% TIPS is a tradeoff between a worse retiremen...
by Tonen
Sat Oct 05, 2013 10:17 pm
 
Forum: Investing - Theory, News & General
Topic: The new safe withdrawal rate
Replies: 285
Views: 17626

Re: The new safe withdrawal rate

I think it would would be helpful to calculate what is the base-case, i.e. a 100% guaranteed safe withdrawal rate using an inflation bond ladder. Is not the 30 year safe withdrawal rate for a hypothetical ladder of 0% Inflation Bonds 3.3%? The correct math to work out the 30-year guaranteed safe wit...
by Tonen
Fri Oct 04, 2013 8:45 pm
 
Forum: Investing - Theory, News & General
Topic: The new safe withdrawal rate
Replies: 285
Views: 17626

Re: Rebalancing Bands - Inflation vs Nominal Bonds

... you are rebalancing to reduce inflation risk. ... Thanks Chan va - that very nicely encapsulates the issue I failed to clarify in my original post. I carry a borderline paranoia about inflation (which I note seems the most relevant one of Bernstein's recently described "deep risks"). ...
by Tonen
Mon Sep 23, 2013 5:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing Bands - Inflation vs Nominal Bonds
Replies: 8
Views: 710

Rebalancing Bands - Inflation vs Nominal Bonds

Accepting that there is no exact science to this, for those who run 50/50 inflation vs nominal bonds/cash, what rebalancing bands are a fair thing? I don't recall ever seeing this specifically addressed in rebalancing discussions here. Given the relatively low price volatility for bonds compared to ...
by Tonen
Sun Sep 22, 2013 9:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing Bands - Inflation vs Nominal Bonds
Replies: 8
Views: 710

Re: Retail Aussie Treasuries at wholesale rates

I agree this isn't actionable for most Bogleheads due to country of origin. Very few Aussies who could benefit from it have picked up on it either - daily volumes are minuscule - some days zero. It's a little surreal to see this seemingly perfect arrangement between Government and institutional mark...
by Tonen
Thu Sep 05, 2013 8:47 am
 
Forum: Investing - Theory, News & General
Topic: Retail Aussie Treasuries at wholesale rates
Replies: 4
Views: 561

Retail Aussie Treasuries at wholesale rates

This may be of interest to readers here as an example of a low-cost, very investor-friendly development. Retail investors now buy Australian Reserve Bank bonds on the share market, with Government appointed market makers providing liquidity, at prices and spreads that mirror the wholesale market. Th...
by Tonen
Wed Sep 04, 2013 10:15 pm
 
Forum: Investing - Theory, News & General
Topic: Retail Aussie Treasuries at wholesale rates
Replies: 4
Views: 561

Re: Jason Zweig Article on Shallow & Deep Risk

Hi All: 4) If your time horizon is much less than 20-30 years, you should still be more concerned with shallow than deep risk. Bill , This is a ightbulb moment for me. Bill are you implying its a fair thing to consider gradually decreasing deep risk (especially inflation) protection with advancing ...
by Tonen
Sat Aug 31, 2013 7:03 pm
 
Forum: Investing - Theory, News & General
Topic: Jason Zweig Article on Shallow & Deep Risk
Replies: 45
Views: 6857

Re: Next step: the no-index index fund

"A company for carrying on an undertaking of great advantage, but nobody to know what it is" was good enough to make a buck in 1720. Doesn't sound like things have changed much.
by Tonen
Fri Aug 09, 2013 8:36 am
 
Forum: Investing - Theory, News & General
Topic: Next step: the no-index index fund
Replies: 38
Views: 2920

Re: [Australia] Creating $200k income p/a [(per annum)]

Simplest and smartest thing I recall ever reading about leverage is that it multiplies potential risk more than it multiplies potential return. Whether the underlaying investment halves or doubles, with gearing/ leverage the eventual result has to be less than that, i.e., half or double, but always ...
by Tonen
Tue Jun 11, 2013 9:58 am
 
Forum: Investing - Help with Personal Investments
Topic: [Australia] Creating $200k income p/a [(per annum)]
Replies: 40
Views: 6290

Re: [Australia] Creating $200k income p/a [(per annum)]

Stick 450k of your 2M into super (as the 3-year non-concessional cap allows), using a cheap industry fund like SunSuper. What's the reason for putting taxed money into a super? Is that because gains are taxed at 15% in the super vs at the marginal tax rate outside a super? Yes, its tax advantaged. ...
by Tonen
Sun Jun 09, 2013 9:05 am
 
Forum: Investing - Help with Personal Investments
Topic: [Australia] Creating $200k income p/a [(per annum)]
Replies: 40
Views: 6290

Re: [Australia] Creating $200k income p/a [(per annum)]

I'm an Aussie The "get 5M first" comment posted above really nails the answer to your question. There is simply no way you can reliably aim to earn 10% a year income without draw-down on your capital, let alone maintaining your capital in real terms. Anybody that tells you different is jus...
by Tonen
Sat Jun 08, 2013 1:05 am
 
Forum: Investing - Help with Personal Investments
Topic: [Australia] Creating $200k income p/a [(per annum)]
Replies: 40
Views: 6290

Re: Are "Dark Pools" putting efficient markets at risk?

By regulation, trades in dark pools must be traded at prices between the national bid and ask on public exchanges. They cannot drift away from exchange prices. So dark pools could also offer efficiencies in lessening market impact costs by allowing parties to exchange huge chunks of stock off marke...
by Tonen
Tue Apr 02, 2013 11:11 am
 
Forum: Investing - Theory, News & General
Topic: Are "Dark Pools" putting efficient markets at risk?
Replies: 32
Views: 1762

Re: Are "Dark Pools" putting efficient markets at risk?

I bet ALL trades in dark pools are inside the buy/sell spreads of the open market. Who would trade with anyone outside that range knowing that the other party can move the stock on in less than a millisecond for an instant gain.
by Tonen
Tue Apr 02, 2013 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Are "Dark Pools" putting efficient markets at risk?
Replies: 32
Views: 1762

Re: Mom and Pop Trampled by the Bulls

At some point one has to wonder if the majority of accounts shouldn't be on automatic rebalance and asset allocation. Just like automated payments. The majority of people can't seem to do it properly, so for their own good a program or possibly a fiduciary advisor should put their portfolio on auto...
by Tonen
Tue Apr 02, 2013 10:24 am
 
Forum: Investing - Theory, News & General
Topic: Mom and Pop Trampled by the Bulls
Replies: 76
Views: 7792

Re: Mom and Pop Trampled by the Bulls

deleted duplicate post
by Tonen
Tue Apr 02, 2013 10:24 am
 
Forum: Investing - Theory, News & General
Topic: Mom and Pop Trampled by the Bulls
Replies: 76
Views: 7792

Re: Are "Dark Pools" putting efficient markets at risk?

Isn't disintermediation/ cutting out the middle man a perfectly rational way to reduce costs when there exists an efficient market to set the "correct" price to protect both parties' interests in a transaction? It seems to me that rather than being a threat, "dark pools" only ex...
by Tonen
Tue Apr 02, 2013 6:58 am
 
Forum: Investing - Theory, News & General
Topic: Are "Dark Pools" putting efficient markets at risk?
Replies: 32
Views: 1762

Re: Are "Dark Pools" putting efficient markets at risk?

Isn't disintermediation/ cutting out the middle man a perfectly rational way to reduce costs when there exists an efficient market to set the "correct" price to protect both parties' interests in a transaction? It seems to me that rather than being a threat, "dark pools" only exi...
by Tonen
Tue Apr 02, 2013 6:40 am
 
Forum: Investing - Theory, News & General
Topic: Are "Dark Pools" putting efficient markets at risk?
Replies: 32
Views: 1762

Re: "Think, Act, and Invest Like Warren Buffett" -- A Gem

"Remember that while good advice doesn't have to be expensive, bad advice almost always will cost you dearly, no matter how little you pay for it." I wonder if that may be better put as "no matter how much you pay for it"? I think it likely more people are sucked into Wall Street...
by Tonen
Fri Feb 08, 2013 7:57 am
 
Forum: Investing - Theory, News & General
Topic: "Think, Act, and Invest Like Warren Buffett" -- A Gem
Replies: 41
Views: 4655

Re: Asymmetric Rebalancing: What and Why?

For an accumulator this tends to happen in practice as you add new moneys. When stocks fall, new moneys tend to defray the need to rebalance out of bonds.
by Tonen
Fri Feb 01, 2013 11:09 pm
 
Forum: Investing - Theory, News & General
Topic: Asymmetric Rebalancing: What and Why?
Replies: 102
Views: 4722

Re: Treat your mortgage as a "negative exposure" to bonds?

In Australia at least this is simply answered, as the situation shouldn't arise for a prudent investor. Mortgage interest costs receive no tax relief, so return on investment has to be quite a bit higher than mortgage interest rates to break even. Even in these unusual times of low interest, the pru...
by Tonen
Fri Feb 01, 2013 10:32 pm
 
Forum: Investing - Theory, News & General
Topic: Treat your mortgage as a "negative exposure" to bonds?
Replies: 188
Views: 8515

Re: What is your current Asset Allocation Policy and why?

Naive diversification, with an eye to tax efficiency, and minimising number of funds (4). 50/50 stock/bond; 50% domestic/international stock; 50% tilt to small/ value Bonds 50% inflation linked, 50% cash/coupon Gradually increasing bonds changing till reach 50% bonds, 50% stock at retirement. Bonds ...
by Tonen
Wed Dec 26, 2012 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: What is your current Asset Allocation Policy and why?
Replies: 83
Views: 8643

Re: Dangers of a high div strategy

In other words, the high-div strategy does NOT reduce downside risk significantly (left tail). In a bad market for equities, high-div stocks can lose as much as stocks in general. What it does reduce, however, is the possible magnitude of upside gains (right tail). Maybe I'm off track here by compa...
by Tonen
Thu Dec 06, 2012 4:40 am
 
Forum: Investing - Theory, News & General
Topic: Dangers of a high div strategy
Replies: 114
Views: 8011

Re: The anti-Taleb reviews Antifragile

Surely the antonym of fragile is resilient? Arguably, resilient businesses (or people) are considered valuable after withstanding "mishandling"
by Tonen
Thu Nov 29, 2012 12:20 am
 
Forum: Investing - Theory, News & General
Topic: The anti-Taleb reviews Antifragile
Replies: 197
Views: 19322

Re: Your philosophy on buying big ticket items...

"Your philosophy on buying big ticket items..." is to defer buying them for a year or two. By then, some items don't seem to be so important anymore, those that survive can be funded out of cash.
by Tonen
Thu Nov 15, 2012 8:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Your philosophy on buying big ticket items...
Replies: 40
Views: 3018

Re: How to invest in Australia?

I'm 50% Aussie equity, but I live here. boglerocks, I don't know where you get the "increasingly rosy" from. "Decreasingly rosy" would be a better description of local economic data and prospects, and that is already priced into the market with the ASX still about 35% off it's 20...
by Tonen
Tue Nov 13, 2012 8:03 am
 
Forum: Personal Finance (Not Investing)
Topic: How to invest in Australia?
Replies: 29
Views: 1599

Re: The Flight Path Approach to Age-Based Asset Allocation

Can I repeat I think "benign neglect" is a great model, combined with an automatic gradual reduction from high to low equity allocation. Insomuch as Rick's advise is good for the particular sample of young investors who see him, for us non-financial advisors who's target group is different...
by Tonen
Mon Nov 05, 2012 5:03 am
 
Forum: Investing - Theory, News & General
Topic: The Flight Path Approach to Age-Based Asset Allocation
Replies: 74
Views: 6483

Re: The Flight Path Approach to Age-Based Asset Allocation

I'd like to defend a simple glide path/ high initial equity percentage approach for young investors, provided it can be combined with "benign neglect". My kids (early 20's) didn't bat an eye during the latest crash - their monies are tied up in superannuation (Australia, monies only access...
by Tonen
Sat Nov 03, 2012 5:52 pm
 
Forum: Investing - Theory, News & General
Topic: The Flight Path Approach to Age-Based Asset Allocation
Replies: 74
Views: 6483

Re: Merriman's advice for adding bonds over time

It takes heavy-duty coaching from someone who understands what’s going to keep a young person high in equity during their first bear market. Rick Ferri I was going to protest that it is OK for young investors to be 100% stocks as all four of mine didn't blink in the last turndown. In our case it wa...
by Tonen
Sun Oct 28, 2012 6:00 pm
 
Forum: Investing - Theory, News & General
Topic: Merriman's advice for adding bonds over time
Replies: 65
Views: 6167

Re: Justification for US Equity Bias?

50/50 Domestic/ International for me. As an Aussie, that's way overweight domestic, however all company tax paid on domestic dividends are credited to the shareholder. This sweet opposite-to-a-friction (there needs to be a nifty economic word for that) makes it easy to justify holding plenty of loca...
by Tonen
Sun Oct 28, 2012 9:32 am
 
Forum: Investing - Theory, News & General
Topic: Justification for US Equity Bias?
Replies: 53
Views: 2261

Re: POLL: Which is more diversified?

To complicate matters a little further, total futures markets relate to how many people want to write contracts. Case in point - plenty of pork bellies still, but no futures. The question is really asking which maximally diversifies buyer/seller match ups. As I understand it, total outstanding contr...
by Tonen
Tue Oct 16, 2012 8:22 am
 
Forum: Investing - Theory, News & General
Topic: POLL: Which is more diversified?
Replies: 31
Views: 2226
Next

Return to advanced search