Bogleheads.org

What sense does it make to diversify out of an asset class that’s returning 30%?... investors don’t experience upside volatility as risky at all - investors aren’t risk-averse per-se, they’re loss-averse. I don't understand what you mean here?? Yes investors are loss aversive that is why if you are...

It seems to me this must be true, that the stock price drops by the amount of the dividend. Otherwise, buy before the dividend, and sell after. http://www.investopedia.com/articles/02/110802.asp Thanks for the link. Do we actually see this in the real world? Does the stock price decrease a commensu...

Again - it just seems like a HUGE dichotomy. I answered as someone between 50 and 55. - where age = Bonds would suggest ~1/2 bonds. Yet the same guy I now hear is recommending 20% bonds for someone in the same situation. Big difference. Even If we were assuming a 45yr old and Age-10%, that is still...

So, for fun I tried Vanguard's online tool at: https://personal.vanguard.com/us/funds/tools/recommendation Told em I was 11-15yrs from retirement, would need the money for 15 more years after that answered the other questions implying that I was fine with risk, but had only a moderately stable inco...

I personally moved to a 60% US / 40% International allocation recently after using 70% US / 30% International for many years. I am really on the fence either way regarding these two allcoations. What's the difference, in your opinion ? ⋅ These market weights move/change all the time..... ...

As for "researches show that dividend stocks have lower volatility and higher returns than TSM," I tend to doubt that as well..... If we plot price per share rather than growth, it is clear that there is a dramatic difference in the composition of the two funds, and that indeed Vanguard E...

For example, say an investor has: Roth 401K: $150,000 Roth IRA: $50,000 Taxable Account: $30,000 It seems that you would lose out on compound interest if all your bonds were held in the 401k. I would think I want my 401k to have a high return in order to compound but that wouldn't work if it's main...

I spoke with financial planner Jim Ludwick about bonds yesterday. Rick, If an investor put $10K in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) - since last Summer as discussed at the start of your conversation - a -4.1% drop in NAV is not going positive from interest alone by the e...

Is anyone here dabbling with Harry Markowitz's Modern Portfolio Theory for portfolio optimization/design? Thanks, Nathan Here is what I think in a couple of quick observations: 1. MPT's central tenet - that diversification mitigates portfolio risk - collapsed in 2008 when all asset classes were mau...

Quidnam wrote:

YDNAL wrote:FWIW, I'm fully-aware that currently, per FTSE Global All Cap Index, the split sits at 53/47 US/non-US.

You flipped it -- it's 47 US / 53 non-US.

Yes, thank you!

Realistically, how much investable assets do you have or expect to have when you reach your retirement? A $1M+ goal is open-ended - thus the responses to your poll. By the way, here is a $2M poll from September 2012. Link: http://www.bogleheads.org/forum/viewtopic.php?f=2&t=103036 Here is one o...

I was listening to a podcast by Jim Langue (the Roth IRA Guru based here in Pittsburgh) who had on a guest, Todd Tressider. It's podcast #85 here: http://www.retiresecure.com/story.php?page=3 What am I missing here, if anything? Yes, I get it that this is sort of like the other thread "Is 3% t...

Since SS + pension offer steady, dependable, lifetime income, indexed for inflation, it makes sense to me to regard them as "bondlike" (Bogle), even though they are not literally, technically "bonds." Why wouldn't you regard them "as steady, dependable, lifetime income, ind...

In closing, I see no further need to keep this back & forth. That I wholeheartedly agree with. Best wishes. Perhaps not "wholeheartedly," but hopefully you also agree to see that "100% saved in retirement plan strictly in equities" = 100% equities. Even if you don't see, my ...

Your "interpretation" is constructed as an imperative, as if Bogle is mandating investors to put all of their money in equities if they might get SS someday. There is no such imperative in the quote. IlliniDave, 1. Bottom line, the "example" is that of "if 100% saved in a r...

It's worth noting that bonds in 2003 were a completely different prospect than they are now and no one could have forseen 1.6% yield from TBM. So it's understandable a thinking person's advice would change. Is it understandable ?... Fixed Income in a portfolio of investable Assets as opposed to NO ...

Is there a need to assume additional risk? If not, why take it? "Ability" to take on additional risk isn't an argument in its favor absent a need to do so, imho. Agree... I discussed that previously. MORE Ability typically translates to LESS Need to take risk. We should manage risk. Back ...

$300,000 of equity + $300,000 of fixed Social Security is a 50/50 allocation. Your comfort or discomfort does not change the allocation. It's still 50/50. No, ⋅ $300,000 in equities = $300,000 in equities. ⋅ Present Value of an "Income" stream is not an "investabl...

I personally moved to a 60% US / 40% International allocation recently after using 70% US / 30% International for many years. I am really on the fence either way regarding these two allcoations. What's the difference, in your opinion ? ⋅ These market weights move/change all the time. &sdo...

Mr. Bogle sums things up very well in his 10th Anniversary Edition of "Common Sense on Mutual Funds" pages 87-88: " . . . stock market crash of 2007-2009 . . . Long before the crash, I had fine-tuned my rule-of-thumb asset allocation module, centered at 50/50 for older investors in t...

1. If someone wants to willfully misconstrue Bogle's words (disregarding both his grammar and diction) then sure, that someone might make an error in their AA. All Bogle can do is state what he believes as clearly and precisely as he can. In the end individuals are responsible for their own decisio...

But above on the panicking sell it all investor side you're arguing that the guy won't do what Bogle says (stay the course), that even Bogle won't do what Bogle says, but down here your argument is that people do what Bogle says because he says it. The riddle is very interesting... although apples/...

YDNAL wrote: When the Equity Market drops 50% and this investor sees $150,000 in savings - then decides to sell: 1. Mr. Bogle wouldn't feel very good about his suggestion. Mr. Bogle wouldn't sell after a 50% drop in the market. I don't know what Bogle may (or not) do - neither do you. People with B...

adlerps wrote:Just finished reading the Wiki on bonds and have a question.
Can someone please explain to me what factors causes the yield to change every day for the Ten-Year Treasury note? Thanks

This is a nice synopsis.
Link: http://useconomy.about.com/od/economici ... suries.htm

From CNBC online: In a longer piece titled "Retirement System Headed for 3 Train Wrecks: Bogle", "Using the example of having $300,000 saved in a retirement plan and $300,000 in capital from Social Security, Bogle said if an investor has a retirement plan entirely in equities, the to...

using 1000 at 62 and 1760 at 70. ps i separated columns on my post but they seem to merge closer when i submit-sorry Gerry, NO CPI annually: 62 66 70 62 1000 1333 1760 63 1000 1333 1760 64 1000 1333 1760 65 1000 1333 1760 66 1000 1333 1760 67 1000 1333 1760 68 1000 1333 1760 69 1000 1333 1760 Save ...

There have been numerous spreadsheets/charts posted in this thread showing the actual bank balances that occur with claiming SocSec at 62 and 70. I for one would __really__ like to see a spreadsheet/chart posted showing the EFFECTIVE bank balance (however that is defined). I mean a year-by-year bre...

The total of your first column is 148-149 k. However, you have not adjusted your age 70 payout (column 2) for the 3% cola that you applied to column 1. That applies to your deferred benefits as well. Billy, $27,036 in benefits (age 70) is not COLAd adjusted back to age 62 as you indicate. This woul...

Yes Landy, I did give an answer. Age 82 assuming 0% real returns. Age 85 using 3% real returns. Take the time to work this trough step by step with Mike. I think it would be very helpful for everyone. Billy, I also believe it is useful, and helps dispel misconception, or I wouldn't participate. I w...

We're using nominal terms, assuming 3% COLA (and that's what the figures in that column are) and assuming 3% return (and that's where we get the "savings" figure)? If this is the case, then the "savings" figure I get (i.e., the head-start of the person who claimed at 62) is $148...

Hi Landy. I'm working to understand your spreadsheet ( in this post ). Please be patient with me. :) The figures in your column under "Age 62" represent annual benefit received, in nominal terms, assuming 3% COLA, and 0% rate of return on early-taken money, yes? No, the first year ($14,83...

Hi Landy. I'm working to understand your spreadsheet ( in this post ). Please be patient with me. :) The figures in your column under "Age 62" represent annual benefit received, in nominal terms, assuming 3% COLA, and 0% rate of return on early-taken money, yes? No, the first year ($14,83...

I don't know how to say this any more clearly. All that counts is the difference in income streams. I don't know how to say this more clearly, it doesn't. Please answer my question: 1. Save income stream from 62-70. 2. Use savings (#1) for shortfall in income streams after 70. 3. How long before th...

Landy: To calculate the break even you compare the totals from the income streams for claiming at 62 or 70. What you do with the money after you get it (save or spend) is not relevant. As Mike has pointed out, there is an opportunity cost associated with deferring, which scales with real interest r...

This is the same double counting nonsense all over again. To get the break even just look at the amount received from Social Security. If you wait to collect until 70, you collect zero at 62, not some negative number. Yes, this is correct. The Age 70 column should be 0 until 70, not some negative n...

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[edit] Deleted to consolidate - see below.

and then there is this cheerier take on the status of US retirements http://www.fool.com/investing/general/2013/05/02/the-biggest-retirement-myth-ever-told.aspx And, then (then), there is a back-tracking article supposedly since the link in the original post was "intended to be provocative.&qu...

It addresses among other things the point made in the current thread by bogleheaders that most don't have a million or perhaps need it http://bucks.blogs.nytimes.com/2013/06/10/the-1-million-nest-egg/?src=me This guy must have been prompted to read the Bogleheads Forum. He is also a great tap dance...

I am waiting till 70--but collecting SS now with my spousal benefit---so add that to your calculations. I provided food for thought for everyone (not anyone specifically). 1. From what I've read before, more than 30 million Americans age 55 and older were single by end-2010. Link: http://money.usne...

Larry's [Kotlikoff] reply is thorough enough to explain why waiting is better. But, for me he summed it up in one paragraph: If waiting to collect leads to higher benefits, which is often, but not always, the case, you'll be thanking yourself when you are 100 for having done so. You don't want to o...

umfundi wrote:Look, the goal is to emulate the French man with the renowned wine cellar.

He died, and his heirs were dismayed to find only one bottle left in the cellar.

LOL!
<-- vino

... parents leaving IRAs to their children cannot take much comfort in the latest news: <snip> What do you care? The law (if it is ever passed) will only affect you if you're dead. Keith Keith, -- Please refrain from discussing ANY sort of legislation -- Estate Planning IS intended for when a perso...

The Trinity study was predicated on 30-year portfolio survival, so most people discount the 4% for people retiring in their 50s, say. Good observation, NightOwl, one that goes unsaid many times. Personal circumstances (not generalizations) should dictate what a person does. This is what the OP said...

How many times have you called Vanguard in the past 10 years ? (I've done it twice) Seriously, I've been lucky and never had a problem where I had to get Vanguard on the phone, so I can't say for sure So maybe digit8 is using Landy's method. Don't ever call and you never have a problem. I've never ...

YDNAL, That was very helpful. I'm probably still 22-27 years from retirement (I know I know, LONG ways to go), which tells me that 85/15 really isn't a bad place to be. I was definitely hung up in "age in bonds" but agree that years from retirement is probably more appropriate. Glad you f...

nisiprius wrote:But when I signed up they told me taxes would be deferred! Now you tell me that taxes on tax-deferred savings are only deferred?

Boy, you just can't trust 'em...

LOL!... great point.

The real trick is to defer when you would pay MORE taxes and pay LESS taxes later.

First off, a few years back we were blessed with twins, and overnight we went from DINKs to SILOKs (Single Income Lots Of Kids). Congratulations! Secondly, I’m getting older, have accumulated some wealth through maxing out 401k’s, IRA’s, etc, but I have not adjusted the aggressiveness of my asset a...

A 30-yr Treasury yield may not be used by everyone, but then, why do we invest in Stocks (rhetorical)?.... supposedly for expected return (dividend yield + dividend/earnings growth + speculative return). Otherwise, we would invest in something else. I believe it is reasonable to expect a 50/50 Equi...

Why? Well for starters I find those who answer the phones at Fidelity and T.Rowe Price are often more helpfu on non-trivial questions . Also certainly Fidelity's web site is better. Of course its always possible Vanguard would raise the ER but things would not get better and that would not be good....

A million bucks plus Social Security is not life in hell. Put it in perpective. 1. The median household income in the U.S. for 2011 is $50,054. Link (CNN): http://money.cnn.com/2012/09/12/news/economy/median-income-poverty/index.html Link (Census): http://www.census.gov/compendia/statab/2012/tables...