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Re: What's wrong with volatility if buy&hold

A Lo strategy for an individual investor would look something like this. If the market falls at least 15% and the VIX is high (say 28 or more) sell some percent of your equity holdings (perhaps 10% or 15%). If the market continues to drop and has fallen say more than 25% and the VIX remains high, o...
by asset_chaos
Mon Jan 26, 2015 10:56 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 39
Views: 2209

Re: Do any young investors use Only fixed income?

If a person has $100,000 to invest today and can invest $30,000 every year for the next 35 years. This person needs to only average a 4.5% rate on their investment to break the $3M mark in 35 years. Aside from the fact that your $3 million is nominal, where are these municipal bonds yielding 4.5%? ...
by asset_chaos
Mon Jan 26, 2015 10:37 pm
 
Forum: Investing - Theory, News & General
Topic: Do any young investors use Only fixed income?
Replies: 34
Views: 2914

Re: What's wrong with volatility if buy&hold

azumz wrote:What's wrong with volatility if buy&hold

Nothing. Dial up the expected volitility for your portfolio of stocks and bonds that you can live with, and by definition you live with it and accept the returns of stocks and bonds that the markets give.
by asset_chaos
Mon Jan 26, 2015 6:05 am
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 39
Views: 2209

Re: Market cap weighting flawed?

Why would you invest in a cap weighted global market index but only GDP weight Germany (or some select group of countries)? For that matter why would GDP weighting of a global stock index make sense? You first put all companies into boxes by virtue of where they say they're headquartered. Then the b...
by asset_chaos
Sun Jan 25, 2015 9:15 pm
 
Forum: Investing - Theory, News & General
Topic: Market cap weighting flawed?
Replies: 10
Views: 722

Re: Real 3% (CPI plus 3% guaranteed)

I'd dig deeply into the question of who conjures this guarentee and how they do it.
by asset_chaos
Thu Jan 22, 2015 4:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Real 3% (CPI plus 3% guaranteed)
Replies: 21
Views: 1806

Re: Let's Celebrate! Which funds are you buying in 2015?

About 90% of my buying will be bonds, intermediate tax exempt, and 10% will be non-US small value. I don't think I'd call it celebrating. It's just planned maintenence.
by asset_chaos
Mon Jan 19, 2015 7:54 pm
 
Forum: Investing - Theory, News & General
Topic: Let's Celebrate! Which funds are you buying in 2015?
Replies: 48
Views: 3591

Re: Return of the Stockpickers

Every year ought to be a good year for stock pickers. The dispersion of returns---the return difference between the best and worst performing stocks---just in the S&P 500 is always large, greater than ~20% annually. If stock pickers were skilled, the opportunity is there for them every year to d...
by asset_chaos
Mon Jan 19, 2015 6:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Return of the Stockpickers
Replies: 8
Views: 702

Re: Expense Ratios Comparison Total Stock 2008 vs. 2013

The headline expense ratios went down, which is good but not the whole story. The fraction of investor dollars in lower cost share classes also went up significantly: admiral plus signal plus institutional plus etf went from half of assets to 2/3.
by asset_chaos
Wed Jan 14, 2015 8:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Expense Ratios Comparison Total Stock 2008 vs. 2013
Replies: 9
Views: 805

Re: European investors - Hedging U.S. dollar position

The question of your foreign currency exposure is not as straight forward as it seems. First, the question should be considered in the context of one's entire portfolio. Do you have some bonds? You should, and they should be denominated in euros. Second---and this is a more speculative idea on my pa...
by asset_chaos
Tue Jan 13, 2015 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: European investors - Hedging U.S. dollar position
Replies: 9
Views: 685

Re: Risk Efficiency of Thrift Savings Plan Portfolio

Will you explain please what you mean by "risk efficient"? I, at least, am not familiar with that term. Otherwise, a 40/60 stock/bond portfolio for retirement is in the range of reasonable.
by asset_chaos
Tue Jan 13, 2015 6:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Risk Efficiency of Thrift Savings Plan Portfolio
Replies: 14
Views: 1125

Re: Best way to Follow Mr. Bogle appearances

Mr Bogle's website is http://johncbogle.com. That page may have his speaking schedule, or a contact for his assistant to ask when/if he'll make an appearance in your area.
by asset_chaos
Sun Jan 11, 2015 7:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best way to Follow Mr. Bogle appearances
Replies: 2
Views: 418

Re: Marketcap vs. FACTOR indexing

Assuming fees are the SAME, would FACTOR indexing such as VALUE and MIN. Volatility be superior? My take is that it is a better way to index vs. marketcap. Superior, what does superior mean? I think you're forgetting about risk. To earn a factor premium means bearing a factor risk. I've seen some s...
by asset_chaos
Wed Jan 07, 2015 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Marketcap vs. FACTOR indexing
Replies: 15
Views: 1631

Re: Bilingual households

My thought was wouldn't it be nice to teach each other and the kids each other's language. This may be a good time to do it when they are pre-Kindergarten. For Bilingual or even Trilingual households, how do you teach your kids multiple languages without causing confusion. How do you teach your kid...
by asset_chaos
Mon Jan 05, 2015 8:47 pm
 
Forum: Personal Consumer Issues
Topic: Bilingual households
Replies: 39
Views: 5119

Re: Poll: How long have you been with your current AA?

As I glide (soar?) towards retirement, I increased the bond allocation target by 1 percentage point on January 1st.
by asset_chaos
Sat Jan 03, 2015 7:18 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: How long have you been with your current AA?
Replies: 44
Views: 2472

Re: [Poll] Why do you use indexing? (select multiple)

Among other reasons, I ticked the box for portfolio theory, but what I really mean by that is that indexing is the only investment management thesis where I understand why it works. I distincly remember reading through the Investment Company's book describing every mutual fund in America---in the 80...
by asset_chaos
Fri Jan 02, 2015 4:03 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Why do you use indexing? (select multiple)
Replies: 26
Views: 1612

Re: Boglehead Recommended Vanguard Fund doing Poorly

Both of those have seem to be going up and down with very dramatic changes. ... Does this mean I chose a bad fund? The funds are not bad, but you may have chosen the funds poorly. The fluctuations that I see on the Morningstar chart for LifeStrategy Growth for periods of 1, 3, 5 and 10 years show e...
by asset_chaos
Fri Jan 02, 2015 1:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Boglehead Recommended Vanguard Fund doing Poorly
Replies: 32
Views: 5684

Re: [Poll] If no capital gains tax, will you change investin

My investment strategy would not change. But cost-free transactions would put my rebalancing bands to zero. Instead of having a rebalancing event every couple of years, I might rebalance a couple of times a year. Although, I could not say with certainty that I'd be better off.
by asset_chaos
Thu Jan 01, 2015 5:20 pm
 
Forum: Investing - Theory, News & General
Topic: If no capital gains tax, will you change investing?
Replies: 12
Views: 1084

Re: Are 1041 trust tax returns difficult to prepare?

I suspect the trust tax paperwork burden is not much dfferent to that for an individual. If the trust's affairs are complex, then the trust's tax filing could be complex and time-consuming. If the trust's affairs are simple, then filling out the 1041 should be simple too. I prepare the 1041 and K-1s...
by asset_chaos
Wed Dec 31, 2014 8:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Are 1041 trust tax returns difficult to prepare?
Replies: 6
Views: 750

Re: [Foreign exchange risk (example: Russian mortgages)]

The Russians aren't the first people to be seduced by cheap, risky foreign currency loans, and they probably won't be the last. But your conclusion that this means international investing is a mistake is, I think, not correct. It does, however, illustrate the difference between international bond an...
by asset_chaos
Mon Dec 29, 2014 12:08 am
 
Forum: Investing - Theory, News & General
Topic: [Foreign exchange risk (example: Russian mortgages)]
Replies: 5
Views: 1007

Re: Feedback on lazy porfolio (EU version)

Emerging markets are currently around 10% of global market cap. In round terms, an initial stock allocation for you of 65:10 developed:EM would be much closer to your goal of investing in EM at global market weight. I'm not familiar with your bond choices, but, as you have all corporate bonds, you m...
by asset_chaos
Sun Dec 28, 2014 2:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Feedback on lazy porfolio (EU version)
Replies: 12
Views: 941

Re: Equal Weighted Funds - Better?

Is [equal weighting] really better than a regular cap weighted index fund? Should I switch over and dump my Vanguards? Equal-weighted is different, not better. It may have a higher expected return, but if it does, it would come with the assumption of higher risk, as Nisiprius has already shown. If ...
by asset_chaos
Sun Dec 28, 2014 3:00 am
 
Forum: Investing - Theory, News & General
Topic: Equal Weighted Funds - Better?
Replies: 31
Views: 2582

Re: POLL: How do you make important investment decisions?

I try to keep learning new things, testing ideas where feasible, and perhaps most importantly for me continuing to engage in some self-examination. Especially for asset allocation where finding one's own risk tolerance is so important, I find that last item to be key. I think I've improved my invest...
by asset_chaos
Sat Dec 27, 2014 6:15 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How do you make important investment decisions?
Replies: 27
Views: 2805

Re: Factor return premiums: academic theory vs. what you'll

Yep, there's more to a reasonable investment than a good story from data over one time period. Factors, I think, need three attributes before they become potentionally reasonable investments that I would consider committing money to. 1) They have to make economic sense and have real reasons why the ...
by asset_chaos
Tue Dec 23, 2014 9:08 pm
 
Forum: Investing - Theory, News & General
Topic: Factor return premiums: academic theory vs. what you'll get
Replies: 9
Views: 1230

Re: POLL: What are your monthly food expenses?

Last time I calculated this for our family it was around $10 per day per person, grocery store expenses only.
by asset_chaos
Tue Dec 23, 2014 8:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: What are your monthly food expenses?
Replies: 67
Views: 4879

Re: Which vanguard life strategy fund?Growth always outperfo

Risk is the answer to your question. 15 year returns for the LS Growth and Mod Growth from M* volatility return Sharpe ratio VASGX (80/20) 13.44 4.87 0.28 VSMGX (60/40) 10.26 5.18 0.35 Stocks over this 15 year period haven't repaid their greater volatility over bonds, hence the lower Sharpe ratio (m...
by asset_chaos
Sun Dec 21, 2014 8:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which vanguard life strategy fund?Growth always outperform?
Replies: 5
Views: 694

Re: Good, Brief Articles on the Boglehead Way?

The Bogleheads Wiki pages, perhaps; link labeled Wiki top right of this page. Also http://johncbogle.com/wordpress/ is Mr Bogle's webpage. That has lots of Bogle's papers and texts of his many speeches.
by asset_chaos
Fri Dec 19, 2014 6:29 pm
 
Forum: Investing - Theory, News & General
Topic: Good, Brief Articles on the Boglehead Way?
Replies: 11
Views: 1540

Re: [Australia] New Vanguard ETF's

Sure, take a look at them. To me it looks like the World ex-Aus fund (sort of) replaces the combination of World ex-US and US total market. The new fund would give an Australian investor the simpler two fund solution to index global equity markets and use VAS to have their precise preferred weightin...
by asset_chaos
Fri Dec 19, 2014 6:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: [Australia] New Vanguard ETF's
Replies: 2
Views: 384

Re: Outperforming vs Underperforming Investors in 2014

If one is a more or less globally indexed investor, then every year one owns the best and worst performing assets. It's part and parcel of index investing. And until I can tell beforehand which market sectors will under- and over-perform (a fool's erand), owning the entire market at low cost is, I b...
by asset_chaos
Fri Dec 19, 2014 5:37 am
 
Forum: Investing - Theory, News & General
Topic: Outperforming vs Underperforming Investors in 2014
Replies: 14
Views: 2390

Re: Better inflation-indexed guaranteed options?

What you're seeing, I believe, is just the cost of getting someone else to bear a risk for you. As (unexpected) inflation is a huge risk for a retired person, so the cost of sloughing that risk off to someone else is also huge. Even though the government now bears inflation risk for social security ...
by asset_chaos
Sun Dec 14, 2014 3:12 am
 
Forum: Investing - Theory, News & General
Topic: Better inflation-indexed guaranteed options?
Replies: 31
Views: 2558

Re: (Poll) Did you tap into emergency fund in the past 10 ye

I haven't used our emergency funds in the last 10 years, but I've certainly used it several times in the past when cash flows were more hand to mouth. And darn glad I was to have cash on hand at those times.
by asset_chaos
Sat Dec 13, 2014 4:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: (Poll) Did you tap into emergency fund in the past 10 years?
Replies: 64
Views: 5768

Re: Does 80/20 have more risk or volatility than 60/40?

You can go to the Morningstar pages for VAnguard's lifestrategy funds and look up the returns and volatilities for the 80/20 and 60/40 funds. The data is conveniently summarized in the ratings and risk tab; look for the volatility measures table. The 15 year numbers are volatility return Sharpe rati...
by asset_chaos
Fri Dec 12, 2014 9:32 pm
 
Forum: Investing - Theory, News & General
Topic: Does 80/20 have more risk or volatility than 60/40?
Replies: 25
Views: 2733

Re: Poll: International Equity Portfolio Changes

My core stock investment is through the total world fund. So, yes, I will stay the course, but no, I won't rebalance between foreign and domestic stocks because I will stay the course with whatever the total global stock market does. In fact, what I think I'll be doing---but I won't know until mid-J...
by asset_chaos
Thu Dec 11, 2014 6:50 am
 
Forum: Investing - Theory, News & General
Topic: Poll: International Equity Portfolio Changes
Replies: 6
Views: 667

Re: Reducing Sequence of Returns Risk

When you want to borrow during times of distress in the financial markets, how do you know that anyone will lend to you at that time? I recall in 2008 banks not lending and credit card companies arbitrarily slashing credit limits because they were conserving their own cash. An additional risk of a s...
by asset_chaos
Sat Dec 06, 2014 4:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Reducing Sequence of Returns Risk
Replies: 15
Views: 2420

Re: 529 asset allocation for small windfall

This thread https://www.bogleheads.org/forum/viewtopic.php?f=1&t=138742 discusses asset allocation when putting a lump sum into a 529. I'll give you my view and quote myself from that thread: Your 529 investment results will, I believe, have a high degree of period dependency, aka luck, .... As ...
by asset_chaos
Tue Dec 02, 2014 11:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: 529 asset allocation for small windfall
Replies: 17
Views: 1720

Re: World Stock Returns & GDP Growth, 1988-2013

Is the intercept of the world stock return, GWP growth correlation saying there was 2.4% a year of dilution in aggregate over the world and averaged over the time period? If so, that seems remarkably close to the 2% a year dilution Arnott and Bernstein estimated some years ago for US stocks. Or does...
by asset_chaos
Sat Nov 29, 2014 6:50 pm
 
Forum: Investing - Theory, News & General
Topic: World Stock Returns & GDP Growth, 1988-2013
Replies: 10
Views: 1435

Re: non US bonds - a new asset class?

Non-US bonds are in no way a new asset class. Non-US bonds have existed for centuries and are currently more than a quarter of total global financial assets (stocks and bonds). Just as one example the British government bond market is older than the US. What's relatively new is that now small invest...
by asset_chaos
Wed Nov 26, 2014 11:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: non US bonds - a new asset class?
Replies: 11
Views: 848

Re: How did you handle the 2008 bear market ?

Welcome. You're grappling with one of the hard problems: how to really understand your own personal risk tolerance. I think it's difficult to get right early in your investing life because it does feel different to watch your hard-earned money seemingly disappear than it is to think about how you wo...
by asset_chaos
Tue Nov 25, 2014 3:53 pm
 
Forum: Investing - Theory, News & General
Topic: How did you handle the 2008 bear market ?
Replies: 79
Views: 7400

Re: Experiences using VRBO, Airbnb internationally

I've used Airbnb once in the US and once in Australia. (As I'm an American living in Australia, I'll let you unravel the question of which one was international.) I found both experiences positive. One was a family vacation house in the country, the other was a room in someone's house in a city in w...
by asset_chaos
Sun Nov 23, 2014 8:31 pm
 
Forum: Personal Consumer Issues
Topic: Experiences using VRBO, Airbnb internationally
Replies: 26
Views: 2723

Re: What to prepare for first baby due next month?

Line up a breast pump. For us having even one bottle prepared meant mom could sleep solidly from around 11pm to 6am, while dad did the overnight feed. We were able to rent a breast pump from a volunteer organization promoting breast feeding, so we could use a nicer pump with an electric motor withou...
by asset_chaos
Wed Nov 19, 2014 3:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: What to prepare for first baby due next month?
Replies: 55
Views: 6871

Re: One Source to follow world markets ?

How much granularity do you want? If you just want broad stock and bond markets, set up a Morningstar portfolio with one share of each of the institutional share class of Vanguard funds total world stock market, total bond market and total international bond market. Then look at that portfolio and t...
by asset_chaos
Sun Nov 16, 2014 8:45 pm
 
Forum: Investing - Theory, News & General
Topic: One Source to follow world markets ?
Replies: 26
Views: 1936

Re: 30% In International Stocks?

Is 30% in International stocks too much? Really, the question is, is it too much for you? If that's your plan and you can stick with it and rebalance to it no matter how well or poorly foreign does in relation to domestic, then it's the right amount for you. If you're worried that you won't be able...
by asset_chaos
Wed Nov 12, 2014 9:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: 30% In International Stocks?
Replies: 59
Views: 6938

Re: astonishing performance of US markets vs others

Would like to hear others viewpoint on whether such out-performance has happened in the past. Yes, of course it has. The last time I remember distinctly was the late 90s when US stocks, specifically US growth stocks, spent 5 years beating the pants off every other investment, foreign or domestic. T...
by asset_chaos
Tue Nov 11, 2014 7:54 pm
 
Forum: Investing - Theory, News & General
Topic: astonishing performance of US markets vs others
Replies: 50
Views: 5399

Re: If your networth is over $3 million, how did you do it?

I'm more curious as to why you picked the precise value of $3 million.
by asset_chaos
Tue Nov 11, 2014 2:56 am
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 301
Views: 46117

Re: Christine Benz Interviews Bill Bernstein

Hi asset chaos Is there data to say this past "golden age" where everyone had a defined benefit retirement plan actually existed? . An excellent overview of the history of this and the evolution of retirement plans and social security would be the book " the predictable surprise"...
by asset_chaos
Thu Nov 06, 2014 6:09 am
 
Forum: Investing - Theory, News & General
Topic: Christine Benz Interviews Bill Bernstein
Replies: 33
Views: 3992

Re: Christine Benz Interviews Bill Bernstein

Is there data to say this past "golden age" where everyone had a defined benefit retirement plan actually existed? From anecdotal evidence, I believe most Americans throughout most of the 20th century had no retirement plans beyond what they could save at the bank, with defined benefit pla...
by asset_chaos
Tue Nov 04, 2014 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: Christine Benz Interviews Bill Bernstein
Replies: 33
Views: 3992

Re: Equal weight vs. capitalization weight between world reg

But when more than half the value of the global index fund is placed in US equities it seems that I’m more vulnerable to US markets and politics than I would like to be. (And, perhaps more importantly, more vulnerable to the dollar currency than desirable for a European.) These are two different co...
by asset_chaos
Sun Nov 02, 2014 9:04 pm
 
Forum: Investing - Theory, News & General
Topic: Equal weight vs. capitalization weight between world regions
Replies: 18
Views: 1377

Re: Equal weight vs. capitalization weight between world reg

Lots of investment ideas are reasonable and will work for you if you can stick with your reasonable plan. The two stock plans you suggest are both reasonable. However, I see no reason to believe that either will be lower risk than the market stock portfolio. I suggest that if you are worried about s...
by asset_chaos
Sun Nov 02, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: Equal weight vs. capitalization weight between world regions
Replies: 18
Views: 1377

Re: Being laid off soon: Thinking of changing my AA

What does your investment plan that you prepared earlier say? Mine specifies a target allocation for my anticipated retirement year and a glide path to get to that allocation. However, even if it's my plan, I know that I'm not in control of all life's inputs. The plan has to be flexible to accomodat...
by asset_chaos
Sat Nov 01, 2014 4:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Being laid off soon: Thinking of changing my AA
Replies: 11
Views: 1382

Re: Total World Fund - Under appreciated?

Non-US investors ought to benefit the most from a total world stock investment, but non-US investors, by-and-large, least appreciate indexing, so by extension are under appreciating a total world stock index fund. If your domestic market is 10% of the global stock market, which is the next largest a...
by asset_chaos
Thu Oct 30, 2014 7:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total World Fund - Under appreciated?
Replies: 26
Views: 3092

Re: If holding cash, do you want a Great Depression?

If you're projecting or hoping for a new Depression, wouldn't long term treasury bonds be the investment of choice, to take advantage of the monumental deflation?
by asset_chaos
Mon Oct 27, 2014 6:54 pm
 
Forum: Investing - Theory, News & General
Topic: If holding cash, do you want a Great Depression?
Replies: 50
Views: 4362
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