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Re: Any other investors with 70/30 portfolio?

I am scheduled to turn 49 this year and plan to maintain a 75/25 AA for the next decade.
by k66
Fri Jan 30, 2015 9:47 am
 
Forum: Investing - Theory, News & General
Topic: Any other investors with 70/30 portfolio?
Replies: 37
Views: 2323

Re: How is risk described in newspaper?

I suspect that the news articles measure return by past performance. I wonder how they measure risk or whether they mention risk at all. Have you seen articles mentioned stdev, beta, VaR, skewness, or kurtosis? I haven't seen any of those types of discussions related to risk in the media. If they e...
by k66
Wed Jan 21, 2015 7:54 pm
 
Forum: Investing - Theory, News & General
Topic: How is risk described in newspaper?
Replies: 3
Views: 260

Re: Trying to understand index funds

There will always be differences between "The Index" and "The Fund That Tracks The Index", but they are small, if not miniscule. This does give rise to "Tracking Error".
by k66
Tue Jan 20, 2015 3:21 pm
 
Forum: Investing - Theory, News & General
Topic: Trying to understand index funds
Replies: 14
Views: 1203

Re: Bored when market is closed

To hell with boring old equity markets and their silly irreverent hours and days of operation… Get into the “real game” of FX trading: it does go 24/7/365 from from time zone to the next. Go-Go-Go! I recall reading one of Schwager’s “Market Wizards” books in which one of his interviewees traded FX a...
by k66
Mon Jan 19, 2015 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: Bored when market is closed
Replies: 28
Views: 2097

Re: US/foreign allocation under massive relative US drop

Suppose for simplicity that right now the US market is 50% of the world market cap, and foreign markets are 50%. Two ways to get exposure are : (1) 100% Vanguard Total World Stock ETF (VT), (2) 50% Vanguard Total Stock Market ETF (VTI) + 50% Vanguard Total International Stock ETF (VXUS). Let's supp...
by k66
Sun Jan 18, 2015 12:59 pm
 
Forum: Investing - Theory, News & General
Topic: US/foreign allocation under massive relative US drop
Replies: 21
Views: 1428

Re: Poll: Your Max. REIT Allocation

nisiprius wrote:...and not a moment's regret. I had been playing with fire and hadn't known it, and was happy to get out of it without being singed.


What your concern in particular? Was it with an appropriate level of diversification or rooted in any way with the structure of a REIT itself?
by k66
Sat Jan 17, 2015 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Your Max. REIT Allocation
Replies: 54
Views: 4050

Re: Is $50 oil really the norm?

I read an article this morning (Financial Post) where market analysts were suggesting that Saudi Arabia has deliberately abandoned their traditional role as the swing producer (as opposed to it being some type of accidental or unintentional move), but could not give any evidence or motive for this i...
by k66
Sat Jan 17, 2015 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Is $50 oil really the norm?
Replies: 41
Views: 3510

Re: Poll: Your Max. REIT Allocation

goalie wrote:Not sure how to answer, but I hold 8% Vanguard domestic REIT fund and 8% Vanguard int'l Real Estate fund. Do I say 8% or 16% ? Chip :confused


I was looking for "total" allocation, so in your case, that would be 16%.
by k66
Sat Jan 17, 2015 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Your Max. REIT Allocation
Replies: 54
Views: 4050

Re: Poll: Your Max. REIT Allocation

I'm not familiar with TREA, but I suppose we could just reference the Wikipedia definition and let you decide how it fits: A real estate investment trust (REIT) /ˈriːt/ is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, r...
by k66
Sat Jan 17, 2015 10:55 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Your Max. REIT Allocation
Replies: 54
Views: 4050

Poll: Your Max. REIT Allocation

I am just trying to get a sense of the level that people see REITs playing in their portfolios. And I am considering REITs only--not personal/owned real estate.

Feel free to elaborate on which fund(s) you own and why.
by k66
Sat Jan 17, 2015 10:26 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Your Max. REIT Allocation
Replies: 54
Views: 4050

Re: Help this dummy get back on track

If you are looking for the conviction to maintain a consistent investing strategy (BH or otherwise), then that has to come from you alone. You have to want to do it because you truly believe that it is the right thing to do. We cant give you that directly. We can tell you that we do have those convi...
by k66
Wed Jan 14, 2015 3:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help this dummy get back on track
Replies: 12
Views: 1267

Re: Bogleheads 2015 Hedge Fund Contest

Thanks Norbert - we appreciate your effort in doing this!
by k66
Sat Jan 10, 2015 11:30 am
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2015 Hedge Fund Contest
Replies: 112
Views: 9793

Re: U.S. stocks in freefall

VictoriaF wrote:The stocks are in a free sine wave-like pattern: they freely sin but do not fall.
(A new spin on a financial porn.)

Victoria


Can someone please "cosine" Victoria's hypothesis? I need validation before making any new lines in a market this "tricker-numeratry"...
by k66
Fri Jan 09, 2015 4:54 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 221571

Year of the Goat (Best for Stocks)

I think the only actionable item(s) from this article would be the prospect for creating new comical references to Astrologers and/or Animals as used in financial planning:

http://business.financialpost.com/2015/01/05/year-of-the-goat-best-for-stocks/?__lsa=c00d-94cf
by k66
Wed Jan 07, 2015 10:12 am
 
Forum: Investing - Theory, News & General
Topic: Year of the Goat (Best for Stocks)
Replies: 1
Views: 446

Re: rebalance at 3% change ok?

Rock the Whim, John, Rock the Whim!

Quick: check and see if you can get the personalized plates too 8-)
by k66
Tue Jan 06, 2015 10:50 pm
 
Forum: Investing - Theory, News & General
Topic: rebalance at 3% change ok?
Replies: 24
Views: 1831

Re: rebalance at 3% change ok?

AA is 70/30 70 stocks 30 bonds , now at 73 / 27 73 % stocks , 27 % bonds, I'm 3% off, and want to transfer 3% from stocks to bonds Do I need to wait to 5% off is what I am asking I have gained over the time with the stocks, and it looks like stocks may be in for a long volatile period, and drop I f...
by k66
Tue Jan 06, 2015 2:37 pm
 
Forum: Investing - Theory, News & General
Topic: rebalance at 3% change ok?
Replies: 24
Views: 1831

Re: 2015 Predictions: Most Popular Topics

I am going to CCA (Comment/Complain Average) into this thread... Let's add: X% is the new 4% to the roster--followed by a list all the reasons why it could never possibly work in the future, irrespective of the fact that it has worked quite well under duress in the past... We will then also dutifull...
by k66
Mon Jan 05, 2015 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: 2015 Predictions: Most Popular Topics
Replies: 38
Views: 2409

Re: Is "stay the course" a commandment or a suggestion?

For myself, "Stay the course" means stay on the path you are on (as laid out in your plan) until such a time that change is required. This would be a major change like a birth, death, marriage, divorce, employment status, etc. It does not mean wandering just because the market winds are bl...
by k66
Mon Jan 05, 2015 2:14 pm
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4087

Re: 2015 Predictions: Most Popular Topics

Black Swan of the week... Slightly off this topic base, but it always seems to have popular use in the conventional financial media is the term "increasing volatility" to try and goad readers into believing that today's volatility is somehow better, worse, different or otherwise special in...
by k66
Sat Jan 03, 2015 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: 2015 Predictions: Most Popular Topics
Replies: 38
Views: 2409

Re: Bogleheads 2015 Hedge Fund Contest

"Mad Stacks o' Cash - Yo!" is quietly being dismembered at the end of the 2014 season in anticipation of a new, better fund: "Trixter". Although MSoCY had only the best of intentions through out its short life, ultimately it succumbed to the one thing that no fund should ever do,...
by k66
Thu Jan 01, 2015 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2015 Hedge Fund Contest
Replies: 112
Views: 9793

Re: 2015 BOGLEHEAD CONTEST REGISTRATION

Continuing with my past practice of simply re-arranging the digits of the previous year's close to compose the new estimate, I offer:

0982.05
by k66
Thu Jan 01, 2015 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: 2015 BOGLEHEAD CONTEST REGISTRATION
Replies: 556
Views: 19743

Re: 2014 Portfolio Returns

Don't we usually wait until the end of the year to post end-of-the-year results? I think the end of the year is still another week or so away.
by k66
Sat Dec 20, 2014 10:16 am
 
Forum: Investing - Theory, News & General
Topic: 2014 Portfolio Returns
Replies: 25
Views: 2720

Individual Investors Churn & Burn Themselves

Along the same lines as "active management, in aggregate, doesn't outperform a representative index" because of the implicit cost of the active management itself, individual investors apparently are also no strangers to churning their own accounts with no gain (on average) to show for it. ...
by k66
Thu Nov 20, 2014 10:04 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Investors Churn & Burn Themselves
Replies: 3
Views: 1206

Re: a look at technical indicators

A friend of mine teaches a community college course on investing. He teaches a simple technical analysis "method" to sidestep bear markets and re-enter after they have passed. His simple method of sidestepping a bear market is this: At the end of each month you look at a graph showing the...
by k66
Sat Oct 04, 2014 9:16 am
 
Forum: Investing - Theory, News & General
Topic: a look at technical indicators
Replies: 19
Views: 1918

Re: Kitces: Sequence of returns risk and 10yr real returns

Yes - this is a good piece. I never thought that SOR risk was particularly sensitive to the first year or any single year and just loosely considered it to be something like the first 3 to 5 years of sub-par market returns. So if the 10 year (real return) track record is the better predictor and is ...
by k66
Thu Oct 02, 2014 8:53 am
 
Forum: Investing - Theory, News & General
Topic: Kitces: Sequence of returns risk and 10yr real returns
Replies: 14
Views: 1459

Re: "How Retirement Fees Cost You"

It is an interesting presentation if only a bit too slow to present each new piece. I wonder though how many Joe and Jane Average Investors believe that their fund is only charging a percentage-based fee against their return and not the total value invested in the given fund? So barring that issue, ...
by k66
Tue Sep 30, 2014 8:43 am
 
Forum: Investing - Theory, News & General
Topic: "How Retirement Fees Cost You"
Replies: 28
Views: 3009

Re: Future equities 2% real rhetoric is hogwash

Right. But the punchline is "the future is unknowable", so even if real returns do remain very low for an indeterminate period of time, its only a matter of time before they aren't low again. I'm with the OP and willing to remain optimistic, but in the end we can only get what we get regar...
by k66
Mon Sep 29, 2014 8:45 am
 
Forum: Investing - Theory, News & General
Topic: Future equities 2% real rhetoric is hogwash
Replies: 45
Views: 4028

Re: Perfect Investment Portfolio on MarketWatch

By the author's own admission it is a rearward looking assessment, so one immediately wonders if the "All Weather" can be as durable in the unknown future as well. That aside, there is no discussion from the author as to what makes it more weather-proof than the comparison 60/40 (albeit a ...
by k66
Wed Sep 17, 2014 9:06 am
 
Forum: Investing - Theory, News & General
Topic: Perfect Investment Portfolio on MarketWatch
Replies: 3
Views: 603

Re: Help with Monte Carlo and Shiller data

I would offer just a few comments. ... Then for 1902 I should have: stock_amount[1902] = stock_amount[1901] * (1 + 0.165) Am I correct that this is the “real” rate of return, and also include dividends, so no need to involve inflation? That would be my interpretation as well: that it is inflation ad...
by k66
Sun Sep 07, 2014 11:39 am
 
Forum: Investing - Theory, News & General
Topic: Help with Monte Carlo and Shiller data
Replies: 3
Views: 406

Re: What is the expected return of this portfolio over 50 yr

The only way to increase probability of success at the future point, is to increase your time horizon (and it sounds like that may be hard to do) or increase contributions now (and make compounding do the heavy lifting). The OP could also increase the equity allocation from 63% currently to 70%-75%...
by k66
Sat Sep 06, 2014 10:29 am
 
Forum: Investing - Theory, News & General
Topic: What is the expected return of this portfolio over 50 yrs
Replies: 21
Views: 1223

Re: What is the expected return of this portfolio over 50 yr

It is very important to get this correct 2 places after decimal - in my calculations a 0.05% difference in expected return compounded over 50yrs will determine whether I go the poorhouse or retire successfully. Any help will be much appreciated. If your margin of safety is that razor-thin, then you...
by k66
Sat Sep 06, 2014 9:46 am
 
Forum: Investing - Theory, News & General
Topic: What is the expected return of this portfolio over 50 yrs
Replies: 21
Views: 1223

Re: Cash to draw on - Safe Withdrawal Rate

Unfortunately, when dealing with markets, there are no absolutely safe withdrawal rates. As midareff points out, even a 0% withdrawal will eventually corrode a portfolio into nothngness given enough time. There are however, what we think might be intrinsically safe rates for a given set of circumsta...
by k66
Sat Sep 06, 2014 9:35 am
 
Forum: Investing - Theory, News & General
Topic: Cash to draw on - Safe Withdrawal Rate
Replies: 10
Views: 1105

Re: World Economic Center of Gravity, AD 1 to 2003

So now Fund Companies can devise specialized "Longitude" funds: each one corresponding to a different Economic Centre of Gravity Longitude value. Dealers could sell a whole new paradigm by extolling the advantages of being in a 45 degree East fund versus a 15 degree West fund...
by k66
Wed Sep 03, 2014 10:08 pm
 
Forum: Investing - Theory, News & General
Topic: World's Economic Center of Gravity, AD 1 to 2003
Replies: 4
Views: 761

Re: Does anyone have 'Lazy Portfolios'?

I have a lazy-ish 6-fund portfolio, but am too lazy perhaps to make it any lazier. Now that VG-Canada offers more consolidated ETFs, I could consolidate into a 3-fund portfolio... just haven't done so given that it will actually cost me an additional 2 bp + commissions...
by k66
Wed Sep 03, 2014 9:46 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone have 'Lazy Portfolios'?
Replies: 85
Views: 6991

Re: Age in Stocks: Should you have a Reverse Glidepath?

The problem with many such studies is that they go at it backwards. They start from some arbitrarily chosen withdrawal rate first. They should start with risk tolerance first. One should begin by exploring carefully what "failure rate" is really acceptable to retirees, without anchoring t...
by k66
Mon Sep 01, 2014 5:00 pm
 
Forum: Investing - Theory, News & General
Topic: Age in Stocks: Should you have a Reverse Glidepath?
Replies: 21
Views: 1517

Re: Age in Stocks: Should you have a Reverse Glidepath?

There is also a cousin to this approach which, I think, also has some rational traction. In recent papers and articles, M.Kitces, W.Pfau et al have demonstrated that a rising glide path during retirement would ultimately be better for retireees. One would implement this approach by selling down bond...
by k66
Mon Sep 01, 2014 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Age in Stocks: Should you have a Reverse Glidepath?
Replies: 21
Views: 1517

Re: In a crash, will you re-balance to maintain your target

Assuming that it is an equities crash, of significant proportion (>20% from peak), then I plan to liquidate bonds and utilize cash to temporarily readjust proportion of equities according to the magnitude of loss in equities market(s). New_%Bonds = Target_%Bonds x (Current_Equity_Index / Peak_Equity...
by k66
Mon Jul 14, 2014 9:10 am
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4346

Re: [Poll] Are you more risk averse than average?

It's and interesting question, but I'm not sure that I am more risk avers or tolerant than any other investor group. I will say that I think, in comparing my own "investing risk history", that I am more risk-intelligent today than I was 5 or 10 years ago. That is to say, I know more now ab...
by k66
Mon Jul 14, 2014 9:02 am
 
Forum: Investing - Theory, News & General
Topic: [Poll] Are you more risk averse than average?
Replies: 36
Views: 2902

Re: BOGLEHEAD CONTEST: Mid-Year Report

It looks like I actually joined the "S&P500 Birthyear Club" shortly after opening bell this morning. :beer
by k66
Tue Jul 01, 2014 11:28 pm
 
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST: Mid-Year Report
Replies: 22
Views: 1913

Re: Suggestions for teaching new MDs about finance?

Aside from the actual content that will be eventually chosen, and there are many good suggestions within this thread, I might also suggest that the way the material is presented can improve the impact on the recipients. For example, either overtly or indirectly, present the material as a patient fil...
by k66
Sun Jun 29, 2014 10:29 am
 
Forum: Investing - Theory, News & General
Topic: Suggestions for teaching new MDs about finance?
Replies: 39
Views: 2834

Re: Time Dependednt SD: will it decrease over time?

I see. :oops:

The key is recognizing that although the SD, expressed as a percentage of the return, of the multi-year return is decreasing over longer periods, the portfolio value to which it is applied is increasing at a faster rate. Portfolio growth outpaces diminishing varience.
by k66
Sat Jun 28, 2014 10:58 pm
 
Forum: Investing - Theory, News & General
Topic: Time Dependednt SD: will it decrease over time?
Replies: 3
Views: 365

Time Dependednt SD: will it decrease over time?

Borrowing a snippet from Robert T's stickied article "Collective Thoughts [investing mini-reference]" http://www.bogleheads.org/forum/viewtopic.php?f=10&t=7353 specifically this plot, something occurred to me. . Likely performance dispersion of the sample ETF portfolio and acutal perfo...
by k66
Sat Jun 28, 2014 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: Time Dependednt SD: will it decrease over time?
Replies: 3
Views: 365

Re: Home Country Bias

Also as a Canadian investor, I recognize that true country market weightings in my portfolio are going to be highly impractical as well. I have no scientific rationale for selecting the eventual distributions that I used, but they are "comfortable" for me. I have, all in ETFs on the TSX; 2...
by k66
Tue Jun 24, 2014 8:48 pm
 
Forum: Investing - Theory, News & General
Topic: Home Country Bias
Replies: 47
Views: 2884

Re: Do you see profit or ponzi?

I started taking an interest in controlling my own investments in the spring of 2008 and one of the first contacts that I had (I found her via web search as a local investment manager) began steering me toward highly illiquid and concentrated investments - real estate in Texas and Nevada, etc. Print...
by k66
Thu Jun 19, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Do you see profit or ponzi?
Replies: 109
Views: 11573

Re: Technical Analysis Drags Down Performance

Perhaps, if we are wanting to see if TA has any merit in predicting (reliably) the future condition based on the previous condition, would be to generate a "full" random series, but only provide the first half of the sequence to the Analyst. Comparison of their concusion to the unseen seco...
by k66
Mon Jun 02, 2014 9:21 pm
 
Forum: Investing - Theory, News & General
Topic: Technical Analysis Drags Down Performance
Replies: 52
Views: 2524

Re: We won best paper from S&P SPIVA worldwide!

A very interesting read, thanks to you Rick and Alex for producing this work and making it available. Your PPM #1 (increased probability as a portfolio) is a really big deal! As you show, not only are individual index funds the better bet (as we already know), but as a collectively diversified group...
by k66
Sun May 25, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: We won best paper from S&P SPIVA worldwide!
Replies: 39
Views: 3549

Re: sequence of returns risk

Has anyone ever tried to model the potential risk? For example, if we have a cummulative distribution function for a given history of returns--either individual security, index, portfolio--we would be able to assign a probability of failure (not achieving a minimum return in any given period). In lo...
by k66
Sun May 18, 2014 10:18 am
 
Forum: Investing - Theory, News & General
Topic: sequence of returns risk
Replies: 9
Views: 977

Re: My Unexpected Findings on Backtesting Vanguard ETFs

Hi FundyInvestor, I'm guessing by your name that you might also be interested in Vanguard Canada's small selection of ETFs (but really you wouldn't need anymore that what they do provide): https://www.vanguardcanada.ca/individual/etfs/etfs.htm and all can be DRIP'ed if that is of use to you as well....
by k66
Sun Apr 13, 2014 9:29 am
 
Forum: Investing - Theory, News & General
Topic: My Unexpected Findings on Backtesting Vanguard ETFs
Replies: 8
Views: 1417

Re: Getting a sense of scale of returns during bull/bear

The terms bull and bear can be somewhat subjective. Are we in a bull market right now? Sure - year-over-year returns looks positively fantastic. Or, not really if you measure over longer time frames. For example, how has the SP500 (or most other indices) fared for the past 10 to 15 years? Some might...
by k66
Sun Apr 06, 2014 9:20 am
 
Forum: Investing - Theory, News & General
Topic: Getting a sense of scale of returns during bull/bear
Replies: 4
Views: 390

Re: The Arithmetic of Investment Expenses

That is a nice piece of work. Thanks for the link.

I guess one could debate the conciseness of the "active" model return as r(h) = r(l) + epsilon, but in the end its probably moot and one might similar distributions regardless.

+1 CH too!
by k66
Sun Mar 16, 2014 11:15 am
 
Forum: Investing - Theory, News & General
Topic: The Arithmetic of Investment Expenses
Replies: 3
Views: 656
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