Search found 4322 matches

by bobcat2
Tue Jul 28, 2015 2:16 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 45
Views: 2471

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

It's easy to cherry pick single decades there bonds beat stocks, but most people have a horizon longer than 10 years. Once you go out to 20-30 years there isn't a single period where bonds beat equities. Bonds are purely for short term savings goals (a 3-6 month emergency fund; saving up enough for...
by bobcat2
Tue Jul 28, 2015 12:12 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 45
Views: 2471

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

Delay your Social Security benefits. Ideally to age 70, but shorter delay if portfolio withdrawals to make up the difference in SS income lost until age 70 are simply too onerous. Replace the SS benefit you would have got until age 70 with a TIPS ladder. Boglehead Whiffish Boffin has done this. The ...
by bobcat2
Sun Jul 26, 2015 1:01 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns – Don’t quit your day job.
Replies: 101
Views: 9909

Re: Scott Burns – Don’t quit your day job.

Someone who postponed retirement 1-3 years in 2010 would be financially much better off than the person who didn't. We will have to agree to disagree.

BobK
by bobcat2
Sun Jul 26, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns – Don’t quit your day job.
Replies: 101
Views: 9909

Re: Scott Burns – Don’t quit your day job.

So, concretely, for people recently retired or about to retire, there is not much actionable other than the basic Bogleheads approach of selecting an appropriate AA and not try to time the market. A retiree can build a predictable base income using delayed Social Security (and a CD ladder to bridge...
by bobcat2
Sun Jul 26, 2015 11:04 am
Forum: Investing - Theory, News & General
Topic: Scott Burns – Don’t quit your day job.
Replies: 101
Views: 9909

Re: Scott Burns – Don’t quit your day job.

Hi longinvest, It's true, as you note, that inflation is much lower today than it was in the 1980s and is also lower than it was in the 1990s. Inflation in the 80s averaged over 5% per year, but is currently averaging about 2% a year. Despite the high inflation rate of about 4% from 1980-2000 the re...
by bobcat2
Sun Jul 26, 2015 10:40 am
Forum: Investing - Theory, News & General
Topic: Scott Burns – Don’t quit your day job.
Replies: 101
Views: 9909

Re: Scott Burns – Don’t quit your day job.

I don't know of anyone here that bases their retirement on the 'historical average returns going back to 1900'......It is always a worst case historical number. I know of nothing worst case about going back to 1900. We go back to 1900 because it's the longest historical period we have for fairly re...
by bobcat2
Sun Jul 26, 2015 10:17 am
Forum: Investing - Theory, News & General
Topic: Scott Burns – Don’t quit your day job.
Replies: 101
Views: 9909

Re: Scott Burns – Don’t quit your day job.

From the article. The returns on stocks and bonds are expected to be lower in the future than they have been in the past. This expectation of lower returns doesn’t come from a worrywart oracle. It comes from simple arithmetic . In the past, stocks provided a good deal of their return as dividends. M...
by bobcat2
Sat Jul 25, 2015 12:38 pm
Forum: Investing - Theory, News & General
Topic: Merton - DC Pension Plans Need to Simplify
Replies: 5
Views: 746

A touch of realism

I agree with this concept with a caution. The balances in your retirement accounts are still very important. The more $$ you have, the more income you can buy in retirement. The statement can state your balances in terms of income all you want but the market risk is still there. It would be helpful...
by bobcat2
Thu Jul 23, 2015 10:44 pm
Forum: Investing - Theory, News & General
Topic: Merton - DC Pension Plans Need to Simplify
Replies: 5
Views: 746

Merton - DC Pension Plans Need to Simplify

Robert Merton speaking in Cape Town. ”What is a good retirement? My definition is that it’s when you can sustain the standard of living you enjoyed in the latter part of your work life. ... (Merton's) first concern is that, universally, pension funds provide statements that show how much capital mem...
by bobcat2
Wed Jul 22, 2015 10:26 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security Finances: Findings of the 2015 Trustees Report
Replies: 4
Views: 591

Social Security Finances: Findings of the 2015 Trustees Report

Findings of this year's Social Security Trustees Report were just released. Here are some highlights. Social Security is fully funded until 2034, but faces a long-term shortfall thereafter. In 2014, Social Security revenue plus interest income exceeded outgo by $25 billion, leaving a surplus. Reserv...
by bobcat2
Sat Jul 18, 2015 10:16 pm
Forum: Local Chapters and Bogleheads Community
Topic: DC Bogleheads next meeting is this Sunday, July 19
Replies: 1
Views: 347

DC Bogleheads next meeting is this Sunday, July 19

Michael LeBoeuf and his wife Elke will be attending our meeting this coming Sunday, July 19 from 3:00-5:00. Michael is an author and speaker who wrote "The Millionaire in You" and co-authored the original "Bogleheads Guide to Investing" with Mel Lindauer and Taylor Larimore. Mich...
by bobcat2
Tue Jul 14, 2015 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: [CNBC article: Social Security Denying Delayed Benefits]
Replies: 30
Views: 4429

Re: [CNBC article: Social Security Denying Delayed Benefits]

Hi Nisi, If you apply online, how do address the problem discussed in this thread? Is there a line on the form that says I don't want retroactive payments for 6 months? Or is there a place where you would simply write this request out? In researching this a little bit online, I see that Kotlikoff re...
by bobcat2
Tue Jul 14, 2015 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: [CNBC article: Social Security Denying Delayed Benefits]
Replies: 30
Views: 4429

Re: [CNBC article: Social Security Denying Delayed Benefits]

In general, considering this and other problems when applying for Social Security benefits, is it better to apply online, by phone, or in person for starting SS benefits?

BobK :?: :?
by bobcat2
Mon Jul 13, 2015 9:43 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 42
Views: 7217

Michael LeBoeuf will give a short talk this Sunday

Michael LeBoeuf and his wife Elke will be attending our meeting this coming Sunday, July 19 from 3:00-5:00 at the Liberty Center complex in Arlington. They will be in town attending a Speakers Convention and Michael contacted Ed Rager to see if they could attend our meeting. Michael is an author and...
by bobcat2
Sun Jul 05, 2015 5:42 pm
Forum: Investing - Theory, News & General
Topic: The next Lehman - this week? [Greek default]
Replies: 237
Views: 25907

Re: The next Lehman - this week? [Greek default]

I doubt very much if the full repercussions of today's Greekerendum result on global finance and economics, as well as European politics, will be felt in a day, a week, a month, or even the next year. Stay tuned.

BobK
by bobcat2
Sun Jul 05, 2015 8:35 am
Forum: Investing - Theory, News & General
Topic: Chinese Move to Stabilize Stock Market
Replies: 29
Views: 3534

Chinese Move to Stabilize Stock Market

On June 12 the Shanghai stock market peaked, up almost 150% from a year earlier. Since June 12 the market has fallen nearly 30%. Yesterday the country’s biggest brokerage firms unveiled a government-endorsed plan to buy shares starting on Monday, and all further initial public offerings of stock are...
by bobcat2
Fri Jul 03, 2015 8:53 pm
Forum: Investing - Theory, News & General
Topic: excellent summary of the Greek crisis by U of Chicago Professor
Replies: 45
Views: 8471

Re: excellent summary of the Greek crisis by U of Chicago Professor

Krugman says the Euro, at least for Greece, was a mistake from day 1. Krugman argues that if you're not going to have fiscal integration and labor mobility throughout the Eurozone, then a country needs the ability to devalue its currency. Now several posters on this thread have apparently taken voc...
by bobcat2
Sun Jun 28, 2015 11:57 pm
Forum: Investing - Theory, News & General
Topic: Puerto Rico Governor Says Island’s Debts Are ‘Not Payable’
Replies: 37
Views: 3467

Puerto Rico Governor Says Island’s Debts Are ‘Not Payable’

[Thread merged into here, see below. --admin LadyGeek] The governor of Puerto Rico has decided that the island cannot pay back more than $70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments acr...
by bobcat2
Sun Jun 28, 2015 7:29 pm
Forum: Investing - Theory, News & General
Topic: Understanding debt markets
Replies: 5
Views: 699

Re: Understanding debt markets

Hat tip to veteran economics journalist [url]David Warsh[/url] for calling Holmstrom's article to my attention. In a similar vein, Warsh also recommends Yale professor Gary Gorton's Misunderstanding Financial Crises: Why we don't see them coming , a book I am planning to read as soon as summer hour...
by bobcat2
Sun Jun 28, 2015 6:30 pm
Forum: Investing - Theory, News & General
Topic: The next Lehman - this week? [Greek default]
Replies: 237
Views: 25907

Re: The next Lehman - this week? [Greek default]

One thing slightly unsettling about the current European crisis is that 101 years ago on this date Archduke Ferdinand and his wife were shot dead in Bosnia, a small relatively unimportant country in southern Europe. It is now said (see, for example, some of the above posts made today in this thread)...
by bobcat2
Sun Jun 28, 2015 7:50 am
Forum: Investing - Theory, News & General
Topic: The next Lehman - this week? [Greek default]
Replies: 237
Views: 25907

Re: The next Lehman - this week? [Greek default]

One of the best places to keep up on the Eurozone crisis is the special report section on the crisis in the Guardian . Here is a link. http://www.theguardian.com/business/debt-crisis Pay special attention to the Eurozone Crisis Live subsection of the report. Here is a link for the subsection. http:/...
by bobcat2
Fri Jun 26, 2015 9:23 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads are more aggressive...
Replies: 57
Views: 6611

Re: Bogleheads are more aggressive...

With sufficient pension and SS income some BHs could afford to take more risk or could be investing for their heirs. With sufficient pension and SS income some BHs can take less risk to reach retirement income goals and invest safely for bequests to heirs. :) I suspect Bogleheads invest more aggres...
by bobcat2
Tue Jun 16, 2015 9:31 am
Forum: Personal Consumer Issues
Topic: LastPass.com Breach
Replies: 155
Views: 13980

Re: LastPass.com Breach

I use LastPass with YubiKey Authentication. That seems fairly secure to me.

BobK
by bobcat2
Wed Jun 10, 2015 10:57 pm
Forum: Investing - Theory, News & General
Topic: Insightful paper on Risk- highly recommend for new investors
Replies: 21
Views: 3132

Re: Insightful paper on Risk- highly recommend for new investors

Yes, it awfully tempting to assume a normal or log-normal (or some other) distribution, for then you can measure the standard deviation and make all sorts of pronouncements on probable outcomes. Unfortunately, for financial markets, the distribution is unknown, and you cannot connect volatility (no...
by bobcat2
Wed Jun 10, 2015 10:14 pm
Forum: Investing - Theory, News & General
Topic: Insightful paper on Risk- highly recommend for new investors
Replies: 21
Views: 3132

Re: Insightful paper on Risk- highly recommend for new investors

Paul, The measurement of something is not the same as the thing itself. A sphygmometer reading measures high blood pressure. But a sphygmometer reading is not the meaning or definition of high blood pressure. Standard deviation (volatility) measures investing risk, but it is not the meaning or defin...
by bobcat2
Wed Jun 10, 2015 8:43 pm
Forum: Investing - Theory, News & General
Topic: Insightful paper on Risk- highly recommend for new investors
Replies: 21
Views: 3132

Re: Insightful paper on Risk- highly recommend for new investors

I wrote. It is true that volatility ( standard deviation) is a favored metric for measuring investment risk. pkcrafter thinks he is disagreeing with me by writing. As to Marks using volatility as a measure of risk, it has been, and still is, quite common. Maybe it's now judged to be incorrect, but i...
by bobcat2
Wed Jun 10, 2015 11:35 am
Forum: Investing - Theory, News & General
Topic: Insightful paper on Risk- highly recommend for new investors
Replies: 21
Views: 3132

Re: Insightful paper on Risk- highly recommend for new investors

According to Howard Marks, “Volatility is the academic’s choice for defining and measuring risk.” This is not true. Given that this is Marks’ central thesis in his memo, it makes the entire memo suspect. It is true that volatility ( standard deviation) is a favored metric for measuring investment ri...
by bobcat2
Sat May 30, 2015 10:27 am
Forum: Personal Finance (Not Investing)
Topic: Jeff Brown on retirement planning
Replies: 1
Views: 630

Jeff Brown on retirement planning

Wharton finance professor Kent Smetters interviews retirement expert Jeff Brown on planning for retirement. Jeff Brown is Professor of Finance and Director of the Center for Business and Public Policy at the University of Illinois’ College of Business. He is a Research Associate of the National Bure...
by bobcat2
Fri May 29, 2015 4:12 pm
Forum: Investing - Theory, News & General
Topic: Will Single Premium Immediate Annuities be better with higher interest rates?
Replies: 17
Views: 1925

Re: Will Single Premium Immediate Annuities be better with higher interest rates?

learning_head wrote:What about CPI-adjusted ones? Would they be affected one way or another with higher (nominal) interest rates?

Real life annuities (CPI-adjusted ones) will be affected by changes in real interest rates rather than changes in nominal interest rates.

BobK
by bobcat2
Fri May 29, 2015 4:09 pm
Forum: Investing - Theory, News & General
Topic: Will Single Premium Immediate Annuities be better with higher interest rates?
Replies: 17
Views: 1925

Re: Will Single Premium Immediate Annuities be better with higher interest rates?

Roughly, the payout rate on a fixed payout life annuity is 1/remaining-life-expectancy + 10-year-Treasure-rate. I don't believe that's quite right. The rough & ready formula for a life annuity payout is instead, payout = 1/remaining-life-expectancy + (10-year-Treasure-rate)/2 In words, it's hal...
by bobcat2
Sun May 24, 2015 10:09 am
Forum: Investing - Theory, News & General
Topic: John Nash killed in car crash
Replies: 11
Views: 3522

John Nash killed in car crash

One of the great minds in economic and mathematics theory, John Nash, died in a car crash Saturday on the New Jersey Turnpike. Both he and his wife were killed in the crash involving the taxi they were riding in. Nash received a Nobel Prize in economics for his seminal work in game theory. Just this...
by bobcat2
Fri May 22, 2015 6:30 am
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 3132

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

Please, that is like being asked what to invest in for growth and talking about REITS, but leaving out equities, and then explaining that over sights happen when one only has 26 minutes. :D BobK Disagree, "most" commentators/pundits just refer to bonds generally and don't make the distinc...
by bobcat2
Thu May 21, 2015 2:42 pm
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 3132

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

In response to what to do about a surge of inflation Asness said only that one should invest in commodities. He left out real bonds. In fairness to Mr. Asness, it was a 26 minute interview and he was asked several questions. He can't be faulted for omitting something because of the limited time he h...
by bobcat2
Thu May 21, 2015 1:36 pm
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 3132

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

Perhaps because TIPS didn't exist during most inflation shocks. We know what they should do, but reality is sometimes different. That said, if anything one might imagine people piling into TIPS and bidding down the yields, giving you returns above inflation in the short term. Real bonds existed in ...
by bobcat2
Thu May 21, 2015 1:15 pm
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 3132

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

Hi nedsaid, With regard to inflation shocks Asness notes that is really bad for bonds and not good for stocks at least in the SR. He then claims that commodities are the only good asset class, if there is an inflation shock. Apparently, Asness has never heard of real bonds such as TIPS. :) BobK This...
by bobcat2
Thu May 21, 2015 12:37 pm
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 3132

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

With regard to inflation shocks Asness notes that is really bad for bonds and not good for stocks at least in the SR. He then claims that commodities are the only good asset class, if there is an inflation shock. Apparently, Asness has never heard of real bonds such as TIPS. :)

BobK
by bobcat2
Wed May 20, 2015 3:31 pm
Forum: Investing - Theory, News & General
Topic: Your thoughts about Peter Schiff's doomsday prediction
Replies: 39
Views: 7148

Re: Your thoughts about Peter Schiff's doomsday prediction

Here are several predictions Schiff has made in the last several years. The accuracy of these predictions has been dismal. 1) Dec 2006: Peter Schiff on Fox News said inflation and interest rates would go up in 2007, 2008, and 2009. This didn't happen. 2) Jan 2009: Peter Schiff said in US News that t...
by bobcat2
Mon May 18, 2015 9:16 am
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 3132

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

Mr Asness has been in the news a lot lately expressing his views on several subjects. Here are two of my favorite recent articles about Cliff and his opinions on subjects that have at least a substantial financial component. The last sentence of this first article is classic. [OT link removed by adm...
by bobcat2
Tue May 12, 2015 9:08 am
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 42
Views: 7217

Re: Master thread for Washington DC Area Bogleheads

Here is additional information about Sunday's meeting location. The Liberty Center high rise condo/apartment complex at 888 North Quincy Street, Arlington, on the west side of the street, is located two blocks south of the Ballston library also on North Quincy. (The library is on the east side of No...
by bobcat2
Mon May 11, 2015 7:13 am
Forum: Investing - Theory, News & General
Topic: Where can I find total returns for Japan?
Replies: 15
Views: 875

Re: Where can I find total returns for Japan?

What is the global equity since 1990? Going all the way back to 1900 doesn't make sense, not only because the world is incredibly different, but also because only 3 people in the world today were alive then. We go back to 1900 because that's the longest period for which we have reliable data from m...
by bobcat2
Sun May 10, 2015 10:42 pm
Forum: Investing - Theory, News & General
Topic: Where can I find total returns for Japan?
Replies: 15
Views: 875

Re: Where can I find total returns for Japan?

Had the person invested solely in bonds, or simply heavily in bonds, they would have done quite well. :D I wouldn't exactly call a 4-5% annual return doing quite well. It's rather depressing actually. From Credit Suisse Yearbook of global equity returns. real annual global equity returns 1900-2014 ...
by bobcat2
Sun May 10, 2015 9:35 pm
Forum: Investing - Theory, News & General
Topic: Where can I find total returns for Japan?
Replies: 15
Views: 875

Re: Where can I find total returns for Japan?

I was really curious about this, so I calculated it. Here is the setup: Someone invested 75400.50¥ at the beginning of 1990. I chose this number because it's the equivalent of $1000 USD at the end of 2014. The reference to USD is purely to give you an idea of how much the amount is. All my calculat...
by bobcat2
Sun May 10, 2015 1:29 pm
Forum: Investing - Theory, News & General
Topic: Where can I find total returns for Japan?
Replies: 15
Views: 875

Re: Where can I find total returns for Japan?

From Triumph of the Optimists here are the equity and bond real returns for Japan for the eleven year period from 1990-2000. stocks annual geometric real return -7.1% bonds annual geometric real return 5.4% From latest Credit Suisse Yearbook update of Triumph of the Optimists here are the equity and...
by bobcat2
Sun May 10, 2015 12:31 pm
Forum: Investing - Theory, News & General
Topic: Bogle possible mistake? Discussion [on age-based portfolios]
Replies: 67
Views: 7591

Re: Bogle possible mistake? Discussion [on age-based portfolios]

BTW investors in some countries have had very long periods of negative returns had they held the global portfolio. I couldn't seem to find anything on this. Maybe you could post some links? See the paper, Irrational Optimism , by the authors of Triumph of the Optimists . From the Abstract . We addr...
by bobcat2
Sun May 10, 2015 9:50 am
Forum: Investing - Theory, News & General
Topic: Bogle possible mistake? Discussion [on age-based portfolios]
Replies: 67
Views: 7591

Re: Bogle possible mistake? Discussion [on age-based portfolios]

backpacker wrote. So why think the stock returns of the defeated axis powers tell us anything about the safety of our stocks? If you hold a global portfolio, there probably is some chance that some country in which you own stocks will lose a war and be occupied. But that's what diversification is f...
by bobcat2
Sat May 09, 2015 6:27 pm
Forum: Investing - Theory, News & General
Topic: Bogle possible mistake? Discussion [on age-based portfolios]
Replies: 67
Views: 7591

Re: Bogle possible mistake? Discussion [on age-based portfolios]

backpacker wrote. I was responding to a particular argument that tries to use short-term options to argue that owning stocks for decades is risky. Bodie was arguing using standard option theory that stocks are risky when held for a long time. Option theory is option theory, regardless of the time p...
by bobcat2
Sat May 09, 2015 11:23 am
Forum: Investing - Theory, News & General
Topic: Bogle possible mistake? Discussion [on age-based portfolios]
Replies: 67
Views: 7591

Re: John Bogle possible mistake? Discussion

It is true that if we compare a one week put to a 24 month put, the price of the puts will tell us that risk over 24 months is greater than the risk over a week. That makes sense. Economic crises usually take time to develop. The 2008 crash unfolded over months. It didn't happen in a week. But from...
by bobcat2
Thu Apr 30, 2015 7:23 am
Forum: Investing - Theory, News & General
Topic: Reverse Mortgages-now better, but harder to get
Replies: 18
Views: 1991

Re: Reverse Mortgages-now better, but harder to get

Whenever I see financial institutions pushing hard on reverse mortgages I know in my mind that it's not because it's good for me, but they do so because it's good for THEM. Same with annuities... good for the salesman but not necessarily good for you. There's no free lunch, is there ? ? It would se...
by bobcat2
Thu Apr 30, 2015 12:00 am
Forum: Investing - Theory, News & General
Topic: Reverse Mortgages-now better, but harder to get
Replies: 18
Views: 1991

Reverse Mortgages-now better, but harder to get

New federal rules that kicked in on April 27, 2015 may make it harder for some people to qualify for reverse mortgages. But they’ll also make it more likely that those who do receive reverse mortgages will have fewer worries about them. “I think these changes are positive overall,” says Phil Stevens...
by bobcat2
Tue Apr 28, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: NPV of Pension in the Retirement Portfolio
Replies: 16
Views: 1194

Re: NPV of Pension in the Retirement Portfolio

It never occurred to me to count our pension as part of our retirement portfolio. So I calculated its NPV and played with firecalc adding in our pension as social security. I like what I see. The NPV of our pension = 10% of our 60/35/5/0 retirement portfolio. Adding the pension would make it 55/30/...

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