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Re: More funds = more "efficient" rebalancing?

Tfb, Chan_va or others: Can you expend a bit further what it means that total funds continuously rebalance? If, for instance, "total international" simply reflects the whole international market, and if "emerging" performs better than the rest of the fund, wouldn't its share of ...
by YDNAL
Fri Oct 24, 2014 7:51 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 26
Views: 1243

Re: More funds = more "efficient" rebalancing?

Tfb, Chan_va or others: Can you expend a bit further what it means that total funds continuously rebalance? If, for instance, "total international" simply reflects the whole international market, and if "emerging" performs better than the rest of the fund, wouldn't its share of ...
by YDNAL
Fri Oct 24, 2014 7:30 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 26
Views: 1243

Re: Why include International Index in AA?

I have been wondering about why to invest part of my AA in International stocks (VGTSX). I was reading up on the three fund portfolio and this was one thing I couldn't quite get my head around. It seems to me that most of the holdings in a broad US based index fund (VTSMX) contain companies that ha...
by YDNAL
Thu Oct 23, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Why include International Index in AA?
Replies: 39
Views: 2545

Re: More funds = more "efficient" rebalancing?

More funds = more "efficient" rebalancing I was browsing the "lazy portfolios" page when I was wondering if portfolios there with more funds haven't an intrinsic advantage over the minimalist 2- or 3-fund portfolios. Let's say that bonds are split between shorter terms and longe...
by YDNAL
Thu Oct 23, 2014 10:49 am
 
Forum: Investing - Theory, News & General
Topic: More funds = more "efficient" rebalancing?
Replies: 26
Views: 1243

Re: Dry Powder

I do have questions: How do you know when is the *best time* to deploy cash?.... 5% dip, 10% dip, 15% dip....? What if your goal is not reached.... 3% dip instead, 8% dip instead, 13% dip instead....? I do not have a scientific method, what I did was to wait for the price to get in in the mid point...
by YDNAL
Sat Oct 18, 2014 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3520

Re: Are Vanguard's target-retirement funds too aggressive?

Would you consider 90/10 too be too aggressive an asset allocation for someone in their early 30s? 1. A 30-yo multi-millionaire does not have the same financial profile as the 30-yo entry level manager at XYZ company that just started saving for retirement. 2. Age shouldn't drive asset allocations,...
by YDNAL
Fri Oct 17, 2014 4:23 pm
 
Forum: Investing - Theory, News & General
Topic: Are Vanguard's target-retirement funds too aggressive?
Replies: 24
Views: 1716

Re: Retired, my viewpoint has changed again.

I found some peace buy using Wm Bernstein's approach of having 20 -25 years of retirement expenses in "safe" products. This. ↑ Malloc, congratulations on your journey. Retirement doesn't mean the journey ends, just that a *different* journey begins. I have found it most interesting to obs...
by YDNAL
Thu Oct 16, 2014 8:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Retired, my viewpoint has changed again.
Replies: 22
Views: 3151

Re: Dry Powder

I'd stick with bonds. It's not like anyone doesn't know that the market will flicuate,... Is *flicuate* when you watch consecutive flicks on TV? :) Seriously, other than stated in OP (emergency, ST need in withdrawal, etc.), the only reason to hold cash at 0% return is to market time. The taboo reg...
by YDNAL
Thu Oct 16, 2014 8:32 am
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3520

Re: How will we know if value-tilting has stopped working?

Bill Sharpe has often expressed skepticism about portfolio "tilting,"..... http://www.advisorperspectives.com/newsletters14/41-sharpe-retire4.php Here's my question. What if Sharpe is right and the edge for value-tilting does go away, or even has already gone away. In that case, in the fu...
by YDNAL
Thu Oct 16, 2014 7:53 am
 
Forum: Investing - Theory, News & General
Topic: How will we know if value-tilting has stopped working?
Replies: 44
Views: 3050

Re: Why not 100% Stocks?

Maybe a better way to phrase my question is as such. If you had capital that you did not need for 15-30 years, what would your allocation be on THAT capital? If corporations (particularly US) have demonstrated, historically, to be a superior investment over long stretches AND if you believed that c...
by YDNAL
Mon Oct 13, 2014 5:36 pm
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 20513

Re: POLL : SP500 next : 1900 or 2200?

VictoriaF wrote:The results of this poll would be different if it were launched not on 6 Sep but on 13 Oct.

Victoria

Except the low option wouldn't be 1,900. :)

ps. And, the high is quite likely not 2,200.
by YDNAL
Mon Oct 13, 2014 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: POLL : SP500 next : 1900 or 2200?
Replies: 31
Views: 2992

Re: POLL : SP500 next : 1900 or 2200?

villars wrote: POLL : SP500 next : 1900 or 2200?

I omitted the correct answer ("I don't know " ) on purpose , to keep things interesting.

Easy..... 1,900. LOL
by YDNAL
Mon Oct 13, 2014 4:56 pm
 
Forum: Investing - Theory, News & General
Topic: POLL : SP500 next : 1900 or 2200?
Replies: 31
Views: 2992

Re: U.S. stocks in freefall

This thread maybe getting bumped a little more often:) S%P down about 1.6% thus far today. How much has the S & P fallen since last Monday morning in % and true numbers? S&P 500 closed Friday, 10/3/2014 at 1,968 (last Monday morning opening) and closed today at 1,875... a drop of -4.7% (and...
by YDNAL
Mon Oct 13, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 941
Views: 156891

Re: Market corrections and rebalancing band

Let me try to restate this idea with an example and with a slight twist. I have $50k in bonds and $50k in stocks. Included in the $50k bonds I have allocated $20k as safe assets so I have $30k available to rebalance. Is this your idea for "safe floor"? Yes, IF current $20K satisfies the u...
by YDNAL
Mon Oct 13, 2014 11:31 am
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: ETF's instead of index funds?

Does anybody strictly use ETF's instead of index funds? It seems so logical to use them instead of Index funds since there are no minimums. skeptic, As you can see, "logical" depends on the individual applying the logic and the circumstances that are best-suited and most comfortable to th...
by YDNAL
Mon Oct 13, 2014 10:24 am
 
Forum: Investing - Theory, News & General
Topic: ETF's instead of index funds?
Replies: 24
Views: 1340

Re: Market corrections and rebalancing band

Doc, you should consider a couple of things to incorporate in your plan (IPS). 1. Floor in safe assets. That limits the dollar amount of safer assets to stop rebalancing during steep and sudden market drops. 2. Tighter bands. The one potential cost here may be clipping the benefit from momentum in ...
by YDNAL
Mon Oct 13, 2014 10:03 am
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: ETF's instead of index funds?

Does anybody strictly use ETF's instead of index funds? It seems so logical to use them instead of Index funds since there are no minimums. True, but you may be overemphasizing the "minimums." Anyone can buy Vanguard TSM with $3,000. Expense ratios may look lower on the surface, but trans...
by YDNAL
Mon Oct 13, 2014 9:26 am
 
Forum: Investing - Theory, News & General
Topic: ETF's instead of index funds?
Replies: 24
Views: 1340

Re: Market corrections and rebalancing band

I don't know why this bothers you so much, Doc. If you don't like the correction magnitude requirement that results from 5% rebalancing bands, just change it so it's based on the high watermark, or tighten the band. It's your portfolio and you can do anything you want with it. Tightening the band h...
by YDNAL
Mon Oct 13, 2014 8:42 am
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: Avoid logging into brokerage account

....do you generally avoid logging into your brokerage accounts especially during periods of correction? I find myself doing this in order to avoid any temptation. Mainly just ignore the noise and let my automatic investments continue on as normal. Any opinions on this? How would you know when to t...
by YDNAL
Mon Oct 13, 2014 8:07 am
 
Forum: Investing - Theory, News & General
Topic: Avoid logging into brokerage account
Replies: 17
Views: 1696

Re: Bond Index Conundrum

I agree that a bond index does not make as much sense as a stock index. You should choose individual bond funds for your own situation. I think you meant to say an *aggregate* index fund. TBM is indexed to Barclays US Aggregate Float Adj Index . For example, I buy long-term bonds since I have a lon...
by YDNAL
Mon Oct 13, 2014 7:54 am
 
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 16
Views: 1973

Re: Draw down taxable saving first?

I plan to retire in 2 years. I will have to start using savings to fund retirement. Does it make sense to draw down taxable savings first? Most of mine in in TSM and Vanguard International. Not in 2016 (2 years), but 2014: Personal exemption: $3,950 (twice for married filing jointly) Standard deduc...
by YDNAL
Sun Oct 12, 2014 8:16 am
 
Forum: Investing - Theory, News & General
Topic: Draw down taxable saving first?
Replies: 38
Views: 2437

Re: Current market volatility

No offense *cfs*, but this is a [sort-of] funny post. "Buying low" must have a benchmark. Is your benchmark yesterday, last week, month? Compared to the previous bi-weekly purchase !!!! Got it. "Buying low" at 12% higher than last year, but ~3% lower than 2 weeks ago. The reason...
by YDNAL
Sat Oct 11, 2014 3:54 pm
 
Forum: Investing - Theory, News & General
Topic: Current market volatility
Replies: 21
Views: 1634

Re: Current market volatility

Finally. Finally, buying LOW for a change (done bi-weekly via one tax advantaged deferred-compensation retirement plan and a taxable account), yesterday was one of those buying days in our plan. No offense *cfs*, but this is a [sort-of] funny post. "Buying low" must have a benchmark. Is y...
by YDNAL
Sat Oct 11, 2014 3:40 pm
 
Forum: Investing - Theory, News & General
Topic: Current market volatility
Replies: 21
Views: 1634

Re: Gains and Losses from Periodic Investments

grayfox wrote:I thought someone might be interested in this chart I created.

Yes, interesting visual representation of the old Boglehead philosophy item #2.... invest early and often. It is only preceded by: #1 develop a workable plan.
by YDNAL
Sat Oct 11, 2014 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: Gains and Losses from Periodic Investments
Replies: 13
Views: 1315

Re: Why not 100% Stocks?

One thing I don't quite understand is why not weight the portfolio almost exclusively in stocks. Their return over the long haul seems to greatly trump Bonds, CDs, etc. What role do bonds play in a portfolio, except perhaps access to liquidity. If my short term cash needs are not large, shouldn't I...
by YDNAL
Sat Oct 11, 2014 10:07 am
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 20513

Re: Rebalancing Bands

Just playing around with a spreadsheet Is 10% as a Rebalancing band okay or too loose? Is 5% as a Rebalancing band too tight? I am adding new money each quarter to Re-Balance, so the bands would be breached between those periods if the markets are volatile If you rebalance with new contributions ea...
by YDNAL
Sat Oct 11, 2014 8:07 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing Bands
Replies: 15
Views: 1143

Re: Market corrections and rebalancing band

Again, it takes only an 18% correction (not 30%) for the market to adjust a 54.9/45.1 portfolio to 50/50 portfolio. Yes but under a 5% below target "rule" I don't start buying until I reach 45/55 not 50/50. I only have to buy ~17% but the market had to drop by ~34% before I started buying...
by YDNAL
Fri Oct 10, 2014 3:31 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: Market corrections and rebalancing band

Lot's of people jumped in here. I originally used "out of the air" numbers and Landy used a different starting assumption. Doc, "out of the air" numbers are simply incorrect. Here is the correction "if you are just under the upper limit." -18% Stocks 54.9 45.0 50.0% Bo...
by YDNAL
Fri Oct 10, 2014 2:04 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: Market corrections and rebalancing band

A common band application is to rebalance only when your AA is off by +/- 5%. So if you have a 50/50 AA and it is in balance it requires a market correction of about ~10% to hit the lower band. I don't see it that way (absolute terms). A +22% and -19% *stock* market correction is what triggers reba...
by YDNAL
Fri Oct 10, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: Market corrections and rebalancing band

I don't see it that way (absolute terms). A +22% and -19% *stock* market correction is what triggers rebalance of a 50/50 AA. +22% -19% Stocks 50 61 55.0% 41 45.1% Bonds 50 50 45.0% 50 54.9% Total 100 111 100.0% 91 100.0% I think your -19% is based on the total value of the portfolio (from 111 to 9...
by YDNAL
Fri Oct 10, 2014 1:11 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: Market corrections and rebalancing band

A common band application is to rebalance only when your AA is off by +/- 5%. So if you have a 50/50 AA and it is in balance it requires a market correction of about ~10% to hit the lower band. But if you are just under the upper limit - say 54.9/45.1 - it requires nearly a 30% correction to reach ...
by YDNAL
Fri Oct 10, 2014 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4069

Re: Bond Index Conundrum

My understanding is the Total Bond Index fund holds only investment grade bonds. "Investment grade" is a generic classification that can also be misinterpreted to mean what it isn't (like highest quality, for instance). Vanguard VBMFX holds 27% assets currently with A or Baa credit qualit...
by YDNAL
Fri Oct 10, 2014 11:59 am
 
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 16
Views: 1973

Re: Is a fall in portfolio value "only on paper"?

If you own an index fund and the index goes down 20% you lost 20%, for now. Paper, shmaper, no different. And that's a fact, not a matter of choice as to how to think of things. The real issue is that long-term investors don't buy "the index for now." All else should be either secondary o...
by YDNAL
Fri Oct 10, 2014 11:40 am
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3626

Re: Is a fall in portfolio value "only on paper"?

Ummm. Dollars : Bonds : Equities - it's all fungible. I'll admit that the dollar valuation of my portfolio is more closely correlated to the cost of my next pint of beer than the number of shares I have in VPMAX, or LSBDX - but I really don't give a rip. Absolutely untrue. The "dollar valuatio...
by YDNAL
Fri Oct 10, 2014 8:23 am
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3626

Re: It's a good day to be Heavy in Bonds ---- 10-09-2014....

It's about how much you didn't lose! :beer Are you trying to publish a children's book: "It's a good day......."? See all the little wiggles, and the BIG wiggles, it's all part of investing in the stock the market. I said "part" and didn't imply or say anything else. http://uplo...
by YDNAL
Fri Oct 10, 2014 8:11 am
 
Forum: Investing - Theory, News & General
Topic: It's a good day to be Heavy in Bonds ---- 10-09-2014.......
Replies: 13
Views: 1684

Re: Retirees only, what was you average investment return?

I am going to voice my modest opinion here. For those who say that historical earnings are not a tool for in making a decision as to whether one should invest in something or not are taking a huge risk. No one can predict the future but one would try and make an educated guess. The term "educa...
by YDNAL
Fri Oct 10, 2014 7:46 am
 
Forum: Investing - Theory, News & General
Topic: Retirees only, what was you average investment return?
Replies: 49
Views: 3347

Re: Is a fall in portfolio value "only on paper"?

Looking at the number of shares you have is irrelevant at this point. I feel that's the equivalent to saying the loss is "only on paper". The loss is real. It happened. Your shares are worth less today then they were yesterday. Unless your daily expenses can be paid for in shares, the num...
by YDNAL
Thu Oct 09, 2014 1:34 pm
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3626

Re: Is a fall in portfolio value "only on paper"?

While the market value of whatever "security" you own may be down 10%, you still own the same number of shares. So, from this perspective, the price fluctuation doesn't matter unless: 1. You need to sell your shares today. 2. You have no confidence in the ability of the companies to incre...
by YDNAL
Thu Oct 09, 2014 10:45 am
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3626

Re: Is a fall in portfolio value "only on paper"?

I've seen some on this forum take the attitude that when their portfolio goes down in value, that the loss is "only on paper" and only really counts if you sell out and "lock in the loss". While recognizing that benefit, is it technically accurate? My understanding is that the o...
by YDNAL
Thu Oct 09, 2014 8:52 am
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3626

Re: Retirees only, what was you average investment return?

Just doing a quick survey as to what was your annualized rate of return over those 10 to 30 past years you were saving in your retirement funds? I was looking at some studies in the market and looks like the consensus is 7.5% (CalPERS uses that as an expected rate of return) Your original post is s...
by YDNAL
Thu Oct 09, 2014 8:29 am
 
Forum: Investing - Theory, News & General
Topic: Retirees only, what was you average investment return?
Replies: 49
Views: 3347

Re: Mid and small cap exposure?

With that preamble, my take on the U.S. side would be 40% Large, 10% Mid and 50% Small and call it day -- with a glass of good red wine. https://personal.vanguard.com/us/funds/snapshot?FundId=0307&FundIntExt=INT#tab=2 https://personal.vanguard.com/us/funds/snapshot?FundId=0859&FundIntExt=IN...
by YDNAL
Thu Oct 09, 2014 7:52 am
 
Forum: Investing - Theory, News & General
Topic: Mid and small cap exposure?
Replies: 23
Views: 2280

Re: Mid and small cap exposure?

Do you guys recommend having some exposure to mid and small cap funds in an aggressive portfolio? If so what ratio for a large, mid and small would you recommend? thanks It depends what you are *hoping* to accomplish, and what do you mean by "an aggressive portfolio." 1. Centainly, if you...
by YDNAL
Wed Oct 08, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Mid and small cap exposure?
Replies: 23
Views: 2280

Re: Why Hold Cash in Retirement Account

I'm in a business of about a hundred people, half of the group are owners, with the other half employees. It seems that the default portfolio recommendation from Fidelity, whether it be an owner or employee, is one of around 20-30 actively managed funds with varying degree of size with the majority...
by YDNAL
Wed Oct 08, 2014 3:23 pm
 
Forum: Investing - Theory, News & General
Topic: Why Hold Cash in Retirement Account
Replies: 21
Views: 1650

Re: Why Wouldn't You Tilt To Small Value?

Why not tilt? Well, now it looks like any outperformance from small is mostly due to microcaps.... http://www.bogleheads.org/forum/viewtopic.php?f=10&t=148464 LOL Factors du jour. What is tomorrow's flavor - the lowest 10% of 1,379 micros ? You know, Paul, it is unfortunate that many posters ar...
by YDNAL
Wed Oct 08, 2014 1:17 pm
 
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 2916

Re: Why Wouldn't You Tilt To Small Value?

.... Something like a Larry Portfolio that is mostly small value with a higher bond allocation performs historically performed similarly to a three fund portfolio with less volatility. < snip > To tilt or not to tilt? That is the question! :sharebeer A tilt is a bet - and "something like a Lar...
by YDNAL
Wed Oct 08, 2014 12:58 pm
 
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 2916

Re: Why Wouldn't You Tilt To Small Value?

.... Something like a Larry Portfolio that is mostly small value with a higher bond allocation performs historically performed similarly to a three fund portfolio with less volatility. < snip > To tilt or not to tilt? That is the question! :sharebeer A tilt is a bet - and "something like a Lar...
by YDNAL
Wed Oct 08, 2014 12:35 pm
 
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 2916

Re: Glide path strategy

Thanks for your input, RodC and YDNAL. Aptenodytes, How is it working out for you and how are you doing it? I can't say how it is working out -- I'm making the choice based on what I see as the merits that unfold over multiple decades. The approach is simple -- I am currently at about 55% stocks, b...
by YDNAL
Wed Oct 08, 2014 11:08 am
 
Forum: Investing - Theory, News & General
Topic: Glide path strategy
Replies: 7
Views: 942

Re: Retirees only, what was you average investment return?

Wow! I am surprised that not too many have tracked their returns. I track employee/employer contributions religiously by date. I also track my taxable accounts contributions and withdrawals. It is essential for me to do this to measure the performance of my retirement plan and how good my projectio...
by YDNAL
Wed Oct 08, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Retirees only, what was you average investment return?
Replies: 49
Views: 3347

Re: "Stock Exposure: Grow or Shrink Throughout Retirement?"

I am planning on increasing my stock exposure throughout retirement. For investors with barely enough (unable to bear much risk) this may not be a good strategy. But for retirees who have enough savings to bear a little more risk it makes good sense. There is no general strategy to fit everyone and...
by YDNAL
Wed Oct 08, 2014 10:25 am
 
Forum: Investing - Theory, News & General
Topic: "Stock Exposure: Grow or Shrink Throughout Retirement?"
Replies: 35
Views: 2724

Re: A good day to be in heavy in Bonds --- 10-7-2014....

I apologize but I may have asked the question below in a different thread but now I see this thread is more relevant. I am 41 years old with a planned retirement at age 60. Why do I need to be invested in bonds? Why can't I just be in a Total Stock Market fund and five years before retirement, I be...
by YDNAL
Wed Oct 08, 2014 7:02 am
 
Forum: Investing - Theory, News & General
Topic: A good day to be in heavy in Bonds --- 10-7-2014....
Replies: 28
Views: 3391
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