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by dbr
Thu May 28, 2015 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: "Retiring" and Age Discrimination
Replies: 24
Views: 2432

Re: "Retiring" and Age Discrimination

How does age discrimination fit in here? Employees in their 20s and 30s probably won't be offered incentives to leave, yes. My former employer had a situation like this over a decade ago: employees whose age + years of service added up to XX or more were offered a cash incentive to retire early. Ma...
by dbr
Thu May 28, 2015 9:05 am
Forum: Investing - Help with Personal Investments
Topic: What am I doing wrong ?
Replies: 38
Views: 3653

Re: What am I doing wrong ?

Why do you think you are doing something wrong?
With that much SS coming on line in years 8 and 11 and the spending you specified, this is what you would expect. Actually I am a little surprised that there was even one year that failed.
by dbr
Mon May 25, 2015 9:03 am
Forum: Investing - Theory, News & General
Topic: another look at dividend paying stocks and valuations
Replies: 63
Views: 4445

Re: another look at dividend paying stocks and valuations

The goal of any investment is to convert it to spendable assets. Cash is the final resting place for all investments, before it gets spent on something needed or desired. Don't dividend paying stocks simply start on the road of converting our investments into cash? I still am not convinced that it'...
by dbr
Sun May 24, 2015 4:51 pm
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 100
Views: 5310

Re: Stemikger "Volatility is far from synonymous with risk."

"Suppose the price of a stock goes up 10 percent in one month, 5 percent the next, and 15 percent in the third month. The standard deviation would be five with a return of 32.8 percent. Compare this to a stock that declines 15 percent three months in a row. The standard deviation would be zero...
by dbr
Sun May 24, 2015 2:51 pm
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 100
Views: 5310

Re: Stemikger "Volatility is far from synonymous with risk."

Volatility being called risk is just an example of making a definition. "Let's define risk as volatility." If you like maybe the textbooks can say "let's define (insert random set of characters here) as volatility." But then the remainder of the text will be annoying to follow. ...
by dbr
Sun May 24, 2015 1:49 pm
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 100
Views: 5310

Re: Stemikger "Volatility is far from synonymous with risk."

I can't speak for Stemikger but I will take a stab at it. Dr. Bernstein talks about "deep risk" and "shallow risk." Shallow risk is the risk that comes from market volatility. Markets in most cases recover and losses from market volatility are most often temporary. Deep risk rel...
by dbr
Sun May 24, 2015 1:37 pm
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 100
Views: 5310

Re: Stemikger "Volatility is far from synonymous with risk."

I wonder whether your risk is diferent from my risk vs. Fred's risk vs. Sally's risk, etc., etc. Perhaps risk is like beauty, it is in the eye of the beholder. Por ejemplo , I care only about long-term total financial return, not about the vacillations and vicissitudes of daily stock trading. That ...
by dbr
Sun May 24, 2015 12:43 pm
Forum: Personal Finance (Not Investing)
Topic: A different way of calculating when to retire
Replies: 26
Views: 2589

Re: A different way of calculating when to retire

Instead of having 25x or 33x or ?x annual expenses, what is your annual savings $ as % of previous year's net worth that would definitively tell you that your time is better spent enjoying your wealth rather than continuing to increase it? Your rate of savings as a fraction of current net worth wil...
by dbr
Sun May 24, 2015 12:04 pm
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 100
Views: 5310

Re: Stemikger "Volatility is far from synonymous with risk."

A better suggestion is to stop worrying about how to define some word or another and just be explicit about what we might not want to have happen. In Buffet's case the observation that if you invest in something that doesn't have much return then you can't meet an objective that needs a higher retur...
by dbr
Sun May 24, 2015 9:26 am
Forum: Investing - Theory, News & General
Topic: Advice from John Bogle and Warren Buffett
Replies: 35
Views: 2698

Re: Advice from John Bogle and Warren Buffett

Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier investments – far riskier investments – than widely-diversified stock portfolios that are bought over time and that are owned in a manner invoking o...
by dbr
Sat May 23, 2015 4:54 pm
Forum: Investing - Help with Personal Investments
Topic: Drawdown thought
Replies: 2
Views: 349

Re: Drawdown though

I always here about investment average returns on each fund. example you in invest $10000 dollars and with a 7 % average return your money will just about double to $20,000 in 10 years. But this is not true because it does not take into consideration of drawdowns like 2008 and 2011. So your $10,000...
by dbr
Sat May 23, 2015 2:23 pm
Forum: Investing - Theory, News & General
Topic: Advice from John Bogle and Warren Buffett
Replies: 35
Views: 2698

Re: advice from John Bogle and Warren Buffett

[quote="livesoft"]I applaud selftalk for spelling Mr Buffett's name correctly.[/quote

Which is better than some of us can manage.
by dbr
Sat May 23, 2015 2:14 pm
Forum: Investing - Theory, News & General
Topic: Advice from John Bogle and Warren Buffett
Replies: 35
Views: 2698

Re: advice from John Bogle and Warren Buffett

I don't follow their advice because I am not a billionaire. My asset allocation is not their asset allocation. My age is not their age. My cost of living is not their cost of living.... I totally agree. Not so fast. To the extent the OP is at all accurate (another question, of course), it seems to ...
by dbr
Sat May 23, 2015 1:44 pm
Forum: Investing - Theory, News & General
Topic: Advice from John Bogle and Warren Buffett
Replies: 35
Views: 2698

Re: advice from John Bogle and Warren Buffett

One thing to notice is that Buffet and Bogle do not make the same recommendations. Which of the two are we to follow without turning our back on the other? It seems the position is impossible. NB An error to correct is that Mr. Buffet's recommendation for the 10% is in short term government securiti...
by dbr
Sat May 23, 2015 9:54 am
Forum: Investing - Theory, News & General
Topic: Why government bonds at all?
Replies: 55
Views: 3975

Re: Why government bonds at all?

Once I get closer to retirement, I understand it makes sense to take "chips off the table" and start putting money into economically non-productive products like government bonds because I can't necessarily withstand the volatility that corporate bonds entail. But when I'm younger and am ...
by dbr
Sat May 23, 2015 9:26 am
Forum: Investing - Theory, News & General
Topic: Why government bonds at all?
Replies: 55
Views: 3975

Re: Why government bonds at all?

If you believe that no government, including the U.S. government, can actually be creditworthy, because you believe governments are not economically productive--that is to say, you disagree with the ratings agencies--then obviously you would not buy government bonds. Usually, the assumption is that...
by dbr
Sat May 23, 2015 9:15 am
Forum: Personal Finance (Not Investing)
Topic: Friends/Family that don't invest!
Replies: 87
Views: 8714

Re: Friends/Family that don't invest!

staythecourse wrote:My MO: If the topic comes up I just tell people it is really EASY to learn the basics of investing.


The hardest part is that 99% of what people think you have to do to invest you don't do at all.
by dbr
Sat May 23, 2015 8:27 am
Forum: Investing - Help with Personal Investments
Topic: No bonds?? All Equity portfolio in 20s
Replies: 19
Views: 1135

Re: No bonds?? All Equity portfolio in 20s

The reasons this is suggested for 20-somethings are: 1.) They typically have very few assets. 2.) They typically have a long time to recover any losses, which are likely to be small anyway. So I agree with this advice unless you have a lot of assets and don't need to take all that risk. For example...
by dbr
Sat May 23, 2015 8:11 am
Forum: Personal Consumer Issues
Topic: Teaching maths to a 4 year old
Replies: 31
Views: 2380

Re: Teaching maths to a 4 year old

At four I'm not sure what the best methods are, but it seems harmless to do what is described. By the time you get to 4th or 5th grade, I think its critical to be able to quickly answer what's four nines, or eight sevens. The methods used in schools today don't impress me greatly, and leave far too...
by dbr
Fri May 22, 2015 9:02 pm
Forum: Investing - Help with Personal Investments
Topic: Confused about Bond returns
Replies: 3
Views: 489

Re: Confused about Bond returns

If you are saving for a home in a year or two, those savings should be in a savings account or CDs. Forget mutual funds of any kind.
by dbr
Fri May 22, 2015 8:02 am
Forum: Personal Finance (Not Investing)
Topic: The end of the nest egg
Replies: 30
Views: 7071

Re: The end of the nest egg

It is certainly a factor that a lot of retirees don't live on savings that they never had anyway. There are some people that have so much money that spending all of it never happens. That might be more typical of those that retired with significant wealth. It is actually a rare trick to be able to s...
by dbr
Thu May 21, 2015 10:28 pm
Forum: Personal Finance (Not Investing)
Topic: The end of the nest egg
Replies: 30
Views: 7071

Re: The end of the nest egg

There are any number of retirement calculators online that will provide a simulation of how long an investor's nest egg will last. Enter your total principal, your desired monthly or yearly withdrawals, your rate of return and by what percentage you want to increase your withdrawals to account for ...
by dbr
Thu May 21, 2015 10:16 pm
Forum: Investing - Help with Personal Investments
Topic: Medicare supplemental insurance
Replies: 71
Views: 4703

Re: Medicare supplemental insurance

My annual physicals are covered by Medicare/Medigap that I carry. Are you sure about this?
by dbr
Thu May 21, 2015 6:10 pm
Forum: Investing - Help with Personal Investments
Topic: Article on Drawdowns (the real returns)
Replies: 17
Views: 1106

Re: Article on Drawdowns (the real returns)

My question : Is there a formula for calculating the drag on the CAGR brought about by the sequence of returns? (ex ante) 1210 Sequence of returns matters when there are contributions to and withdrawals from the investment. The return to calculate in that case is the internal rate of return. This c...
by dbr
Thu May 21, 2015 6:00 pm
Forum: Personal Consumer Issues
Topic: Teaching maths to a 4 year old
Replies: 31
Views: 2380

Re: Teaching maths to a 4 year old

My son is almost 4 and a half and I'm starting to teach him some basic math concepts (mostly addition, with some subtraction). I have him work with a set of colored marbles (some red, some blue, green and yellow). At first I was doing things like "if i have one marble and put one more marble h...
by dbr
Thu May 21, 2015 5:43 pm
Forum: Investing - Help with Personal Investments
Topic: Confused [about bonds]
Replies: 15
Views: 1735

Re: Confused

Generally the advice is to hold bonds in tax deferred space and only hold munis when there is not enough tax deferred space. Holding balanced funds muddies the situation. Muni's are not exactly the same sort of bonds as other types, so investing in munis is a bit of a shift if it is done at all. The...
by dbr
Thu May 21, 2015 4:27 pm
Forum: Investing - Theory, News & General
Topic: suitability of Vanguard Target retirement funds
Replies: 16
Views: 2267

Re: suitability of Vanguard Target retirement funds

I'm not sure what MN specific muni bond funds are out there. Vanguard doesn't offer any. Worst case you can use the Vanguard Intermediate (or Limited for shorter duration) Term Tax Exempt, which is a national muni bond fund. You'd get dividends that are federal tax free but subject to state taxes. ...
by dbr
Thu May 21, 2015 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: Article on Drawdowns (the real returns)
Replies: 17
Views: 1106

Re: Article on Drawdowns (the real returns)

My question : Is there a formula for calculating the drag on the CAGR brought about by the sequence of returns? (ex ante) 1210 Sequence of returns matters when there are contributions to and withdrawals from the investment. The return to calculate in that case is the internal rate of return. This c...
by dbr
Thu May 21, 2015 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Age 56, Need Asset Allocation Advice
Replies: 16
Views: 1047

Re: Age 56, Need Asset Allocation Advice

BL and Tiko and everyone--what is considered a really good (Low) ER on a Bond Index Fund? (I think Tiko answered this with the graphic--THANKS!) And I don't think I have access to a separate brokerage account on my 401K, but I'll ask. Lost Vanguard bond funds run about 0.10% for Admiral shares. I g...
by dbr
Thu May 21, 2015 9:21 am
Forum: Investing - Help with Personal Investments
Topic: Article on Drawdowns (the real returns)
Replies: 17
Views: 1106

Re: Article on Drawdowns (the real returns)

Here is a link to the original article, as I'm sure the mods will clip the cut and paste above. http://www.ingenuitystreet.com/the-big-deal-about/the-math-of-money/ Thanks. That is a good example of how the volatility of investment returns can have a large effect on longer term outcome for an inves...
by dbr
Thu May 21, 2015 8:47 am
Forum: Investing - Help with Personal Investments
Topic: Need Income-Wellesley & Wellington or just Wellesley
Replies: 38
Views: 6945

Re: Need Income-Wellesley & Wellington or just Wellesley

I think that OP needs to find a financial adviser and not take suggestions from a message board. My only motivation for posting was to provide some insights about blending the two funds (with cash treated as an asset class) to convey a sense of total returns and risks that history has experienced. ...
by dbr
Thu May 21, 2015 8:44 am
Forum: Investing - Help with Personal Investments
Topic: Need Income-Wellesley & Wellington or just Wellesley
Replies: 38
Views: 6945

Re: Need Income-Wellesley & Wellington or just Wellesley

Not the original respondent, but investments performance means total return as measured by Compound Annual Growth Rate (CAGR). This includes all increases in fund value due to market performance with all distributions reinvested. It is probably possible to obtain a history of distributions such as f...
by dbr
Thu May 21, 2015 8:35 am
Forum: Investing - Help with Personal Investments
Topic: Article on Drawdowns (the real returns)
Replies: 17
Views: 1106

Re: Article on Drawdowns (the real returns)

( It should be well known that the average market return will not equal the growth rate of the market. It is not well known though. Keep it in mind whenever you hear or read about average returns. Volatility takes a bite out of the average market return. Roughly speaking, volatility will take away ...
by dbr
Thu May 21, 2015 8:25 am
Forum: Investing - Help with Personal Investments
Topic: Article on Drawdowns (the real returns)
Replies: 17
Views: 1106

Re: Article on Drawdowns (the real returns)

I like the idea when a mutual fund state with 7 percent average returns my money should double in 7 years. Is that really true when you have recent years like 2008, 2011. Just a topic for thought that I would like more information on. Indeed. You are making an observation about one of the first and...
by dbr
Wed May 20, 2015 2:25 pm
Forum: Investing - Help with Personal Investments
Topic: Would a nervous self investor be better off with Wellington Fund?
Replies: 17
Views: 1953

Re: Would a nervous self investor be better off with Wellington Fund?

Neither the stocks nor the bonds in Wellington are similar to your index portfolio. That is neither right nor wrong, but electing Wellington would be a shift in investment style.
by dbr
Wed May 20, 2015 1:52 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Managed Payout Fund
Replies: 16
Views: 1913

Re: Vanguard Managed Payout Fund

I believe Vanguard does offer an option to automatically withdraw a fixed monthly dollar amount from any investment. There is no reason the mechanism to withdraw money from a portfolio needs to involve selecting investments according the interest, dividends, or capital distributions any particular i...
by dbr
Wed May 20, 2015 12:03 pm
Forum: Investing - Theory, News & General
Topic: Silver lining for bond fund NAV declines?
Replies: 33
Views: 2846

Re: Silver lining for bond fund NAV declines?

Given that bond prices and yields move inversely, are those of us who own (and plan to continue owning) a given bond fund entitled to smile through the current decline in value? I know the fund buys new bonds with higher yields, but does every dollar lost today (in NAV) become a dollar gained tomor...
by dbr
Wed May 20, 2015 8:03 am
Forum: Personal Consumer Issues
Topic: Aren't we overdoing electronic auto safety features?
Replies: 162
Views: 7777

Re: Aren't we overdoing electronic auto safety features?

I'm glad you posted the curves above. Note that the analysis measures crash severity as vehicle velocity change in the accident. This is also the point at which the effect of different masses of vehicles enters the equation as physics shows how mass differences affect the vehicle velocity change giv...
by dbr
Tue May 19, 2015 3:14 pm
Forum: Personal Finance (Not Investing)
Topic: Living on last months income.
Replies: 33
Views: 3308

Re: Living on last months income.

closetoreality wrote:Who follows this? Comments on it?


Can you explain what this means? Just guessing, I don't think that has much to do with what I do.
by dbr
Tue May 19, 2015 7:43 am
Forum: Investing - Help with Personal Investments
Topic: Estimating Portfolio Return
Replies: 13
Views: 1088

Re: Estimating Portfolio Return

If "John Doe" is contributing "X" to his portfolio monthly, would the appropriate math be to divide the historical annual return by 12 which would then give you the monthly return and allow you to see how much the growth is [approximately] going to be month to month as you contr...
by dbr
Mon May 18, 2015 5:22 pm
Forum: Personal Consumer Issues
Topic: How fast should I ride my bicycle?
Replies: 64
Views: 4390

Re: How fast should I ride my bicycle?

Strangely someone just posted this:

http://www.bikeforums.net/road-cycling/ ... 4-mph.html

PS The commentary so far is less than enlightening.
by dbr
Mon May 18, 2015 5:19 pm
Forum: Personal Consumer Issues
Topic: Aren't we overdoing electronic auto safety features?
Replies: 162
Views: 7777

Re: Aren't we overdoing electronic auto safety features?

My wife was dismayed as she listened to the car salesman describe all the electronic features and realized she was being replaced by a bunch of sensors and a computer -- at least as far as helping drive the car is concerned.
by dbr
Mon May 18, 2015 5:16 pm
Forum: Personal Consumer Issues
Topic: How fast should I ride my bicycle?
Replies: 64
Views: 4390

Re: How fast should I ride my bicycle?

Get off the greenway and get on the road. You have a road bike not a sidewalk bike. I kind of understand what you are saying. I bought a true road bike and I don't like riding on the road and I know that sounds somewhat silly. However, I just don't like dealing with cars when biking - I just don't ...
by dbr
Mon May 18, 2015 11:09 am
Forum: Investing - Theory, News & General
Topic: Best Asset Allocation if you've "won the game"
Replies: 86
Views: 8539

Re: Best Asset Allocation if you've "won the game"

For me, as hiker and skier, the more relevant lesson from your map, if interpreted as contour lines on a landscape, is that "downhill" is predominantly in the vertical (withdrawal rate) rather than in the horizontal (return) direction. The lesson there is that no asset allocation bails you...
by dbr
Mon May 18, 2015 10:53 am
Forum: Investing - Help with Personal Investments
Topic: Expense ratio question
Replies: 5
Views: 646

Re: Expense ratio question

I spoke to a Fidelity Rep today and he said it could take 6 weeks for this to happen but he would move mine tomorrow. That seemed strange. He also said low expense ratios should not be that much of an issue for me since they only charge this fee when buying or selling a fund. :shock: Tell me he is ...
by dbr
Mon May 18, 2015 10:12 am
Forum: Investing - Theory, News & General
Topic: Best Asset Allocation if you've "won the game"
Replies: 86
Views: 8539

Re: Best Asset Allocation if you've "won the game"

Magellan, thanks for producing that. It is a pretty comprehensive display of how the trade-offs work. Sensitivity analysis is the great missing piece to a lot of this discussion. There are a lot of moving parts. You are correct that what it means to have won the game is not necessarily a simple ques...
by dbr
Mon May 18, 2015 9:57 am
Forum: Investing - Help with Personal Investments
Topic: What do I do with my muni bond fund interest?
Replies: 9
Views: 833

Re: What do I do with my muni bond fund interest?

In general when you accumulate dividends the useful thing to do with them is to invest in whatever assets are currently below target asset allocation.
by dbr
Sun May 17, 2015 6:11 pm
Forum: Personal Finance (Not Investing)
Topic: Executor of Will ignores instructions in will!
Replies: 21
Views: 4389

Re: Executor of Will ignores instructions in will!

Hey, I did not say what you quoted me as saying :) I never said " Lafder wrote: But the OP does not say the house ever was in the brother's name." Reading skills include quoting skills I guess. Anyway, you are right the brother has been playing games with the house; it isn't about the wil...
by dbr
Sun May 17, 2015 5:47 pm
Forum: Investing - Help with Personal Investments
Topic: How bad is Wellesley for taxable?
Replies: 37
Views: 2833

Re: How bad is Wellesley for taxable?

In your example, all the returns are going into taxable dividends. So in the end, whatever you have will have already been taxed and no more taxes will have to come out. You net $30,175. The $42,219, on the other hand has not yet been taxed - well, $32,219 of it has not been taxed. I made a mistake...
by dbr
Sun May 17, 2015 1:02 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement and wealth management fees
Replies: 28
Views: 2601

Re: Retirement and wealth management fees

If tax issues seem to be overwhelming you could consider consulting a tax professional who charges by the hour for expertise, as any real professional does, rather than getting taxed willy-nilly year-in and year-out at an exorbitant rate. How much tax advice do you imagine a couple of tens of thousa...

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