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Re: AliBaba

All of you guys talk and talk but ultimately whether you have an individual stock holding or whether those stocks end up in your balanced allocation of index funds you own the stock, now it is your choice to appreciate it or not, in the case of Alibaba I choose to hold a bit more of it and apprecia...
by avalpert
Mon Sep 29, 2014 10:44 pm
 
Forum: Investing - Theory, News & General
Topic: AliBaba
Replies: 128
Views: 8060

Re: In theory, market timing = index investing

techcrium wrote:Thoughts?

Honestly, my initial thought is you should take an introductory course on logic.

It seems you are defining 'market timing' as the time spent in the market - certainly a novel definition but not one that seems to be of much use nor would it align with how anyone else is using the term.
by avalpert
Mon Sep 29, 2014 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: In theory, market timing = index investing
Replies: 10
Views: 583

Re: How is real estate rental income taxed?

Is income taxed at capital gains rates (considered a return on investment) These are not synonyms - rental income is income, net gains from the sale of capital are capital gains both provide aspects of your return on the investment. Is there anything that can be done to minimize the taxes? Charge l...
by avalpert
Mon Sep 29, 2014 2:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: How is real estate rental income taxed?
Replies: 8
Views: 813

Re: Future equities 2% real rhetoric is hogwash

Why wouldn't they? What alternative investment do they have that is expected to earn them more? Entrepreneurs will go where the money is. There will always be new and unique opportunities to make money. If I knew what they were I wouldn't tell you and invest in those opportunities myself. And the s...
by avalpert
Mon Sep 29, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: Future equities 2% real rhetoric is hogwash
Replies: 41
Views: 2661

Re: Future equities 2% real rhetoric is hogwash

I have been reading lately quite a few people discussing future 2% real returns on equities and I just don't understand how that is possible. Corporations are out there to make a profit. When a corporation makes money it has 2 choices with it. One is to invest back in the corporation thereby increa...
by avalpert
Mon Sep 29, 2014 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Future equities 2% real rhetoric is hogwash
Replies: 41
Views: 2661

Re: rebalancing conundrum/paradox/irony

Jan, I don't think I've lost my mind but you be the judge. Imagine someone's goal is to retire with $1M real in 10 years, and he has $400k now split 60/40 ($240k in stocks, $160k in bonds) and he plans to stay 60/40 til retirement. That implies he'll retire with $600k in stocks and $400k in bonds. ...
by avalpert
Mon Sep 29, 2014 10:28 am
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 69
Views: 3607

Re: Can Active Fund Strategy Beat Vanilla Index Fund?

I'm got $10,000, and wanting to buy more T Rowe Price Blue Chip Growth (TRBCX). The fund has been managed by Larry Puglia, since 1993. It has consistently outperformed every comparable single Vanguard in last 21 years , including after considering expenses (ER 0.76) and turnover. We know past perfo...
by avalpert
Wed Sep 24, 2014 9:57 am
 
Forum: Investing - Theory, News & General
Topic: Can Active Fund Strategy Beat Vanilla Index Fund?
Replies: 25
Views: 1491

Re: Why I sold my gold, and would sell commodities too

I agree this sounds like market timing, as gold is near its lowest point in the last 4 years. But I don't mind if everyone who doesn't think gold has value sells their holdings, because then it will have nowhere to go but up. As long as it is above zero it has somewhere else to go. You would need s...
by avalpert
Tue Sep 23, 2014 9:33 pm
 
Forum: Investing - Theory, News & General
Topic: Why I sold my gold, and would sell commodities too
Replies: 56
Views: 4008

Re: Are you using a Martingale strategy and don't know it?

So a catastrophic loss in this example would be a company that you hold stock in going bankrupt. When you only hold 10 stocks, the chances of any one of them going bankrupt that year is pretty low. But the impact on your portfolio would be huge. When you hold 1000 stocks, the chances of at least on...
by avalpert
Tue Sep 23, 2014 9:25 pm
 
Forum: Investing - Theory, News & General
Topic: Are you using a Martingale strategy and don't know it?
Replies: 28
Views: 2156

Re: Are you using a Martingale strategy and don't know it?

And regarding the individual stock analogy, the point still stands. There may be a meaningful point in there somewhere but your analogy is a poor one - what you describe isn't a martingale strategy at all and the reason why a less diversified selection of equities have longer tails (on both sides) ...
by avalpert
Tue Sep 23, 2014 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: Are you using a Martingale strategy and don't know it?
Replies: 28
Views: 2156

Re: Are you using a Martingale strategy and don't know it?

And regarding the individual stock analogy, the point still stands. There may be a meaningful point in there somewhere but your analogy is a poor one - what you describe isn't a martingale strategy at all and the reason why a less diversified selection of equities have longer tails (on both sides) ...
by avalpert
Mon Sep 22, 2014 11:07 pm
 
Forum: Investing - Theory, News & General
Topic: Are you using a Martingale strategy and don't know it?
Replies: 28
Views: 2156

Re: Are you using a Martingale strategy and don't know it?

And regarding the individual stock analogy, the point still stands. There may be a meaningful point in there somewhere but your analogy is a poor one - what you describe isn't a martingale strategy at all and the reason why a less diversified selection of equities have longer tails (on both sides) ...
by avalpert
Mon Sep 22, 2014 10:36 pm
 
Forum: Investing - Theory, News & General
Topic: Are you using a Martingale strategy and don't know it?
Replies: 28
Views: 2156

Re: Novaform Mattresses at Costco

I can't imagine buying a mattress without being able to try it out first. Maybe you are less particular than me, but even after giving a mattress a test drive in the store there's only about a 50-50 chance that it's going to work well for me for a full night's sleep. The saving grace with Costco is...
by avalpert
Mon Sep 22, 2014 5:48 pm
 
Forum: Personal Consumer Issues
Topic: Novaform Mattresses at Costco
Replies: 14
Views: 1652

Re: Southwest Airlines Engulfing, Reversal Candle Signals Do

Did someone take a wrong turn on the internet superhighway?
by avalpert
Mon Sep 22, 2014 1:02 pm
 
Forum: Investing - Theory, News & General
Topic: Southwest Airlines Engulfing, Reversal Candle Signals Downsi
Replies: 55
Views: 3212

Re: Tax implication of backdoor Roth IRA conversio

You said you haven't taken a deduction for any of your IRA contributions (do you have any additional IRAs including any 401k rollovers?) so your current IRA basis is $13,500 and your current balance is $13,871 - so the taxable amount of the conversion is only $371. You might as well convert it all. ...
by avalpert
Mon Sep 22, 2014 12:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax implication of backdoor Roth IRA conversio
Replies: 7
Views: 436

Re: How stocks perform in recessions

You buried the lede on the second page:
One reason for the above results is that the stock market is a leading indicator of economic activity
by avalpert
Mon Sep 22, 2014 11:38 am
 
Forum: Investing - Theory, News & General
Topic: How stocks perform in recessions
Replies: 13
Views: 1362

Re: Anyone know anything about diamond rings?

The people on the diamond forum on are right - you will get better value for your money buying loose and getting it set. The hardest of the 4 c's for a layman to judge is cut - and that is typically where the mall store diamonds fail you and is also, in my experience, the biggest factor in terms of ...
by avalpert
Mon Sep 22, 2014 10:52 am
 
Forum: Personal Consumer Issues
Topic: Anyone know anything about diamond rings?
Replies: 49
Views: 1867

Re: How to achieve a balance between "saving" and "living"?!

*comments like they don't see why one would get more enjoyment out of spending $X at 25 than 65...seriously? First, nobody made that comment. Second, seriously it is not obviously true that one will get more happiness from the same amount of money at 25 than at 65. Physical health is only one compo...
by avalpert
Sun Sep 21, 2014 7:59 pm
 
Forum: Personal Consumer Issues
Topic: How to achieve a balance between "saving" and "living"?!
Replies: 64
Views: 6530

Re: Do I Really Need a Million Bucks?

The average boglehead does not make 6 figures According to the Net Worth Survey done on this site (and recognizing potential selection bias) the average boglehead does make 6 figures and does have 7 figure net worth. Can you please post the link to that thread? In any case, people who chose to resp...
by avalpert
Sat Sep 20, 2014 7:46 pm
 
Forum: Personal Consumer Issues
Topic: Do I Really Need a Million Bucks?
Replies: 50
Views: 3554

Re: Do I Really Need a Million Bucks?

Toons wrote:these days million dollars is peanuts, unless you make very little... but I think average boglehead makes six figures...

Then I am not nor ever was an average Boglehead :happy

Nope, and I'm not nor ever will be average height - that's life.
by avalpert
Sat Sep 20, 2014 6:38 pm
 
Forum: Personal Consumer Issues
Topic: Do I Really Need a Million Bucks?
Replies: 50
Views: 3554

Re: Do I Really Need a Million Bucks?

The average boglehead does not make 6 figures According to the Net Worth Survey done on this site (and recognizing potential selection bias) the average boglehead does make 6 figures and does have 7 figure net worth. That doesn't mean that those who earn less and live off less don't benefit equally...
by avalpert
Sat Sep 20, 2014 6:37 pm
 
Forum: Personal Consumer Issues
Topic: Do I Really Need a Million Bucks?
Replies: 50
Views: 3554

Re: How to achieve a balance between "saving" and "living"?!

At your age your income is likely to rise faster than the return from your investments. As such, for "optimal happiness" it would make sense to spend more money now and save more money later when your income is higher. At his age he may also get more utility from less spending than he wil...
by avalpert
Sat Sep 20, 2014 6:13 pm
 
Forum: Personal Consumer Issues
Topic: How to achieve a balance between "saving" and "living"?!
Replies: 64
Views: 6530

Re: Active management and expected return

I'm having trouble with the following notion: Actively managed funds are the only way to meaningfully beat the market (and conversely lag the market of course, if we exclude human emotion for this thought experiment), but on average they don't and can't. So this to me begs the question(s): 1) Do ac...
by avalpert
Sat Sep 20, 2014 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: Active management and expected return
Replies: 5
Views: 362

Re: Active management and expected return

I'm having trouble with the following notion: Actively managed funds are the only way to meaningfully beat the market (and conversely lag the market of course, if we exclude human emotion for this thought experiment), but on average they don't and can't. So this to me begs the question(s): 1) Do ac...
by avalpert
Sat Sep 20, 2014 5:44 pm
 
Forum: Investing - Theory, News & General
Topic: Active management and expected return
Replies: 5
Views: 362

Re: cost of raising a child by age group

just had our first child a month ago :D so wanted to get an idea of whats to come financially. obviously raising a child is very expensive but I was looking to see which age group is generally the most expensive and which is the least (if there is such a thing). so based on your experience, how wou...
by avalpert
Fri Sep 19, 2014 9:51 am
 
Forum: Personal Consumer Issues
Topic: cost of raising a child by age group
Replies: 27
Views: 2381

Re: How to create a new 401k Plan

You can check out the wiki: http://www.bogleheads.org/wiki/Setting_up_a_401(k)_plan I agree, if they aren't going to go the safe harbor route it may be more of a pain than a benefit. For what it is worth, we ended up choosing Employee Fiduciary for our ~50 person firm due to costs, fund availability...
by avalpert
Fri Sep 19, 2014 9:22 am
 
Forum: Investing - Theory, News & General
Topic: How to create a new 401k Plan
Replies: 4
Views: 483

Re: 401K experts : safe harbor and mega-back door roth

Yes, after-tax contributions would be subject to an Average Contribution Percentage test though it doesn't mean it would necessarily fail nor does it invalidate the safe-harbor provisions with regard to the pre-tax contributions.
by avalpert
Thu Sep 18, 2014 9:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: 401K experts : safe harbor and mega-back door roth
Replies: 4
Views: 438

Re: Retiree Next Door

We have been retired a few years and we have more now than when we first retired. It's certainly not because of any investment skill on my part. In fact every investment instinct or decision I have ever made has been wrong. Probably not because of skill but definitely because of timing - if you ret...
by avalpert
Thu Sep 18, 2014 4:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retiree Next Door
Replies: 26
Views: 4399

Re: FutureAdvisor suggested asset allocation

I wouldn't take their specific prescriptions to seriously. I tried out their product for a laugh and their recommendations for me, someone who has a tilted portfolio complicated by it being spread over distinct accounts with different options and tax implications, where a hodgepodge of sideways move...
by avalpert
Thu Sep 18, 2014 4:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: FutureAdvisor suggested asset allocation
Replies: 8
Views: 870

Re: Any success stories of ppl who never made >$50,000?

I think that's because we value financial planning to such a high degree that we know that for one to have the best chance of financial success usually means a STEM or advanced degree in one form or another. A lot here look highly upon prudent planning from a young age such as choice of major. So f...
by avalpert
Thu Sep 18, 2014 11:28 am
 
Forum: Personal Finance (Not Investing)
Topic: Any success stories of ppl who never made >$50,000?
Replies: 149
Views: 10001

Re: Any success stories of ppl who never made >$50,000?

This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post. You mean working class? Middle class is a wide range of inc...
by avalpert
Thu Sep 18, 2014 10:49 am
 
Forum: Personal Finance (Not Investing)
Topic: Any success stories of ppl who never made >$50,000?
Replies: 149
Views: 10001

Re: Financial Psychology - Mind Over Money

So I tend to think the emphasis on Kahneman/Ariely may be interesting from an academic standpoint, but without any specific examples in the investing domain, Anchoring bias - not selling when you have a loss happens all the time, even among professionals, regardless of its financial merit. Overconf...
by avalpert
Tue Sep 16, 2014 10:21 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

A couple of things related to 401(k) plans probably came out of behavioral finance stuff: 1. Automatic opt-in so that employees were automatically enrolled. 2. Default choice of 401(k) plans is now a target retirement type fund instead of the money market fund. In the past the MM fund was so that o...
by avalpert
Tue Sep 16, 2014 9:40 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

So I tend to think the emphasis on Kahneman/Ariely may be interesting from an academic standpoint, but without any specific examples in the investing domain, Anchoring bias - not selling when you have a loss happens all the time, even among professionals, regardless of its financial merit. Overconf...
by avalpert
Tue Sep 16, 2014 9:31 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

Kahneman, Ariely, and other prominent BE researchers freely admit that the knowledge of cognitive biases has not protected them from making every mistake in the book. I always thought that their editors forced them to put that in their books. No, there have been some real interesting experiments th...
by avalpert
Tue Sep 16, 2014 9:21 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

Kahneman, Ariely, and other prominent BE researchers freely admit that the knowledge of cognitive biases has not protected them from making every mistake in the book. I always thought that their editors forced them to put that in their books. No, there have been some real interesting experiments th...
by avalpert
Tue Sep 16, 2014 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

But isn't that the whole point of cognitive biases - you need an external force to overcome them. The force needed to combat behavioral biases can be internally derived. Successful people reflect on their mistakes and make changes. That's invernally motivated change. It isn't anythng different in i...
by avalpert
Tue Sep 16, 2014 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Why do so many think their home is a foolproof investmen

But alas those decisions are co-mingled all the time in real life housing decisions. I agree, they are distinct in principal if not in practice. Fine, so the next time there is a thread comparing index funds to active funds, let's make sure we use a disproportionate mix of large growth funds in tha...
by avalpert
Tue Sep 16, 2014 5:41 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6446

Re: Why do so many think their home is a foolproof investmen

What really blows my mind is the inanity of the repeated posts on this topic. Forget about whether a house can be considered an investment. Any further thoughts I could possibly provide here would be the equivalent of shooting a toy water pistol at a forest fire. I think the far more interesting qu...
by avalpert
Tue Sep 16, 2014 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6446

Re: Why do so many think their home is a foolproof investmen

What really blows my mind is the inanity of the repeated posts on this topic. Forget about whether a house can be considered an investment. Any further thoughts I could possibly provide here would be the equivalent of shooting a toy water pistol at a forest fire. I think the far more interesting qu...
by avalpert
Tue Sep 16, 2014 5:05 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6446

Re: Financial Psychology - Mind Over Money

Kahneman, Ariely, and other prominent BE researchers freely admit that the knowledge of cognitive biases has not protected them from making every mistake in the book. I always thought that their editors forced them to put that in their books. No, there have been some real interesting experiments th...
by avalpert
Tue Sep 16, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

On the other hand, the straight index-fund-only Boglehead approach has always seemed "coercive" to me. Like the only way the investor can get comfortable holding straight equity index funds during a downturn is to have somebody whispering in their ear to "Stay the course". That'...
by avalpert
Tue Sep 16, 2014 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Why do so many think their home is a foolproof investmen

What really blows my mind is the inanity of the repeated posts on this topic. Forget about whether a house can be considered an investment. Any further thoughts I could possibly provide here would be the equivalent of shooting a toy water pistol at a forest fire. I think the far more interesting qu...
by avalpert
Tue Sep 16, 2014 4:34 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6446

Re: Any success stories of ppl who never made >$50,000?

This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post. You mean working class? Middle class is a wide range of inc...
by avalpert
Tue Sep 16, 2014 3:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Any success stories of ppl who never made >$50,000?
Replies: 149
Views: 10001

Re: Financial Psychology - Mind Over Money

... Loss aversion (whose existence has been questioned by some recent studies) is not fear of a market crash but the asymmetrical value between losses and gains of equal value - passive indexing would do nothing to help with loss aversion per se. Handing over management of your money to someone els...
by avalpert
Tue Sep 16, 2014 2:42 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

For example anchoring and hindsight bias are not related at all and true examples of anchoring are very informative into investor behavior - for example anchoring on the price you bought a house for when deciding whether it makes sense to sell it, or anchoring on MSRP when evaluating if the current...
by avalpert
Tue Sep 16, 2014 2:38 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

... Loss aversion (whose existence has been questioned by some recent studies) is not fear of a market crash but the asymmetrical value between losses and gains of equal value - passive indexing would do nothing to help with loss aversion per se. Handing over management of your money to someone els...
by avalpert
Tue Sep 16, 2014 2:17 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Financial Psychology - Mind Over Money

Cognitive biases are indeed extremely important to understanding how people behave and why - and they are not easily overcome even by knowledge of them. That said, what you have produced here has a lot of mistakes in it that suggest you may need to spend more time studying the subject. For example a...
by avalpert
Tue Sep 16, 2014 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 77
Views: 3601

Re: Why do so many think their home is a foolproof investmen

In high cost of living areas such as New York - people just don't have much choice, they will need to buy a home that takes all of their money - they need to convince themselves its a good investment. That's ridiculous, the New York City area is quite large with plenty of affordable communities - t...
by avalpert
Tue Sep 16, 2014 11:32 am
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6446

Re: Most cost effective means of protecting physical assets

bnes wrote:0. Put up an alarm sign (some claim this is more effective than the actual alarm).

This is what I do. It is difficult to impossible to make your house burglarproof but that isn't really the goal - you just have to make it slightly more difficult/risky than the neighbors house.
by avalpert
Tue Sep 16, 2014 10:44 am
 
Forum: Personal Consumer Issues
Topic: Most cost effective means of protecting physical assets
Replies: 50
Views: 3988
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