Search found 1368 matches

by longinvest
Sat Aug 22, 2015 3:43 pm
Forum: Investing - Theory, News & General
Topic: A warning on RBDs [Really Bad Days]
Replies: 46
Views: 6286

Re: A warning on RBDs [Really Bad Days]

I do not subscribe to the RBD approach. I think that it can be a source of behavioral mistakes for some investors. I much prefer a good old couch potato approach: ⋅  Invest new contributions into assets below their target allocation. (Before retirement). ⋅  Take withdrawals from ...
by longinvest
Sat Aug 22, 2015 3:18 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

No, it's the average duration that is used in this estimation, and it's 5.7, so in your examples, losses would be a 11.4% and 22.8%. Thanks for correcting me on the use of average duration. I will correct the post. Nonetheless, I agree that's unlikely to see a spike in rates, my point is if you do,...
by longinvest
Sat Aug 22, 2015 2:25 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

However, I think people are overlooking the fact how much an increase in rates will damage the bond side of your portfolio. https://personal.vanguard.com/us/funds/snapshot?FundId=0084&FundIntExt=INT#tab=2 The average effective maturity on the Total Bond Market is 7.9 percent. An increase of 2 p...
by longinvest
Sat Aug 22, 2015 7:44 am
Forum: Personal Finance (Not Investing)
Topic: What is Your Plan B if Quicken dies? [Intuit selling Quicken unit]
Replies: 48
Views: 3947

Re: What is Your Plan B if Quicken dies?

I switched from Quicken to GnuCash years ago.
by longinvest
Sat Aug 22, 2015 7:11 am
Forum: Investing - Theory, News & General
Topic: Buy and Hold
Replies: 10
Views: 1345

Re: Buy and Hold

While it might not really make sense for a U.S. investor, given the availability of really low-costs funds, it's probably the best approach for an investor a country where no suitable low-cost index funds or ETFs are available. Wait a minute... We already have a wiki page about it! wiki:Passively ma...
by longinvest
Sat Aug 22, 2015 6:57 am
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 519
Views: 74736

Re: What are you up YTD? [Year To Date]

The entry for August 2015 is not active in my copy of the Bogleheads return spreadsheet. It's too soon to look. If you are worried, your asset allocation is probably wrong. You should consider changing it before a major drop happens, but if you do so, consider that the major drop might never happen,...
by longinvest
Fri Aug 21, 2015 4:54 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

Larry, longinvest First, by investing in stocks you are making a "bet" that they will outperform, otherwise you'd be very foolish to take the much greater risks of stocks. There must be an EX-ANTE risk premium to compensate investors for taking the greater risk. Whether the risks show up o...
by longinvest
Fri Aug 21, 2015 4:19 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

And btw, rebalancing doesn't control volatility. If you rebalance and buy stocks you are increasing the volatility of the portfolio, not controlling it. What you have done by rebalancing is restoring the asset allocation you desired, not allowing the market to determine it for you. I agree with you...
by longinvest
Fri Aug 21, 2015 4:08 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

Larry, There are many definitions for the word bet; the most common is numbered 1 in The Free Dictionary : http://www.thefreedictionary.com/bet 1. An agreement usually between two parties that the one who has made an incorrect prediction about an uncertain outcome will forfeit something stipulated t...
by longinvest
Fri Aug 21, 2015 2:32 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

Larry, Longinvest Just simple question. The evidence on the equity premium is persistent and pervasive. If I remember correctly, in the U.S. stock and bond markets of the 1800s there were very long stretches when bonds had higher returns than stocks. Doesn't this mean that there was no equity premiu...
by longinvest
Fri Aug 21, 2015 11:16 am
Forum: Investing - Theory, News & General
Topic: Buy and Hold
Replies: 10
Views: 1345

Re: Buy and Hold

Good one, Clive! You stated the seventh principle, but skipped the previous principle (#6): Use index funds when possible . :wink: For the record, here are the expense ratios: VTSAX (0.05%), VTIAX (0.14%), and VBTLX (0.07%). A 15/15/70 allocation would cost 0.0775% per year. Also, VPW* would reduce ...
by longinvest
Fri Aug 21, 2015 9:36 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

Each of the factors is not only persistent and pervasive but is implementable after costs and his supported by logical risk or behavioral explanations in the literature (where behavioral explanations there are logical explanations for why arbitrage limits another issues prevent the mispricing from ...
by longinvest
Fri Aug 21, 2015 8:45 am
Forum: Investing - Theory, News & General
Topic: Buy and Hold
Replies: 10
Views: 1345

Re: Buy and Hold

A Three Fund Portfolio along with Variable Percentage Withdrawal is simply superior for a retiree who wishes to enjoy spending his money with family and loved ones instead of dying as the richest person in the graveyard or giving it to an insurance company.
by longinvest
Thu Aug 20, 2015 2:37 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

Kevin, Nedsaid, I found that in the worst case , for a Total Bond Market index fund and a 2% yield increase across the curve, there would be an immediate loss of 11% and that within one year the loss would be reduced to 6.7% . Yep! That's how a "bond bubble" bursts!!! BOOOOOOOONDDDDD BUBB...
by longinvest
Thu Aug 20, 2015 7:09 am
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

Kevin, Nedsaid, That's why I provided detailed calculations above. First, I provided a humorous and gross overestimate of immediate loss, then I provided a finer estimate of immediate loss and one-year loss. The selected scenario was an end-of-the-world one: a significant yield increase across the e...
by longinvest
Wed Aug 19, 2015 4:57 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

There's a huge difference between going from 0% to 1% and 4.25-5.25% Where the risk free rate is absolutely affects the "stability" of the principal. 0-1% is an infinite increase. 4.25-5.25 is a 25% increase in the rate. My point is simply about the risk/reward. The potential principal lo...
by longinvest
Wed Aug 19, 2015 4:00 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

Total = 16.27% So, BND would immediately loose at most 16%, but, and that's the thing, all of its bonds would also immediately start yielding an additional 2%! Can you imagine! Yay! Devil's advocate, but right now the SEC yield on Vanguard Interm Bond is 2.57 percent. Say it goes up to 4 percent, y...
by longinvest
Wed Aug 19, 2015 12:22 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

Just in case anybody cares about my gross estimate of durations in my previous post, if you take the time to calculate the average duration of BND using my simplistic approach, you get 8.09 years, overestimating BND's average duration by more than 2 years. So, the immediate loss has to be even small...
by longinvest
Wed Aug 19, 2015 12:14 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: we've got a bond bubble, Houston
Replies: 71
Views: 5903

Re: Greenspan: we've got a bond bubble, Houston

Ha! ha! ha! ha!...! HA! HA! HA! HA! HA! HAHHHHHHHHHH! Ha! Bond Bubble! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! BUBBLE! BOOOOOND BUBBLE! HA! HA! HA! HA! HA! HA! OK, guys. A little mathematics lesson. The current make up of Vanguard's Total Bond Market index ETF (BND) is as follows: Maturity / Per...
by longinvest
Wed Aug 19, 2015 9:37 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1924
Views: 338055

Re: U.S. stocks in freefall

cfs wrote:Not yet . . .

No freefall = No MOABO.

Not yet . . .

MOABO = Mother Of All Buying Opportunities

It's in the wiki: Abbreviations and Acronyms page.
by longinvest
Wed Aug 19, 2015 9:03 am
Forum: Investing - Theory, News & General
Topic: How many here follow Bogle's "no international" theory?
Replies: 82
Views: 4976

Re: How many here follow Bogle's "no international" theory?

There's no way I'll invest 0% in international, which would mean 100% in Canada! :twisted:
by longinvest
Tue Aug 18, 2015 6:23 am
Forum: Investing - Theory, News & General
Topic: Why does Bogle disparage ETFs in his book?
Replies: 35
Views: 2487

Re: Why does Bogle disparage ETFs in his book?

I think that Mr. Bogle is looking at the wider picture. In The Clash of the Cultures , he explained that ETFs have allowed the emergence of speculation at the index level. Think of day traders who used to buy and sell stocks. They now can buy and sell index ETFs all day long; they couldn't do that w...
by longinvest
Mon Aug 17, 2015 10:38 pm
Forum: Investing - Theory, News & General
Topic: Why does Bogle disparage ETFs in his book?
Replies: 35
Views: 2487

Re: Why does Bogle disparage ETFs in his book?

In The Clash of the Cultures , Mr. Bogle wrote: Rarely are my views on ETFs aptly characterized. So let me be clear: I remain positive on the concept, but only when the right kinds of ETFs are (a) used properly and (b) used for investment and not speculation. He prefers traditional index funds, but ...
by longinvest
Mon Aug 17, 2015 8:07 am
Forum: Investing - Help with Personal Investments
Topic: Advice please [Irish citizen, working in Australia]
Replies: 29
Views: 1761

Re: The Three Fund Portfolio

As a Canadian, I have adapted Taylor's Three Fund Portfolio to my own situation. In other words, I see the Three Fund Portfolio as a portfolio composed of three total-market index funds: domestic stocks, international stocks, and domestic bonds. (For me, "domestic" means "Canadian&qu...
by longinvest
Sun Aug 16, 2015 8:46 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

Do not make the very common error of looking at things in isolation, especially when the purpose of adding the fund is to add a non correlating asset--. Larry, Shouldn't I also avoid the common mistake of reading your alternative investment * recommendations in isolation? * I don't know if that is ...
by longinvest
Sun Aug 16, 2015 3:07 pm
Forum: Investing - Theory, News & General
Topic: Does higher volatility make long-term bonds + stocks better than intermediate-term bonds + stocks?
Replies: 54
Views: 3622

Re: Does higher volatility make long-term bonds + stocks better than intermediate-term bonds + stocks?

Taking this a step further, as a retail investor, I can beat the pants off of the yields of the short-to-intermediate-term government bonds held in TBM with CDs, and with direct CDs, I also reduce risk due to the early withdrawal option. So I convert the 1-5-year range of government bonds into some...
by longinvest
Sun Aug 16, 2015 11:44 am
Forum: Investing - Theory, News & General
Topic: Vanguard CFP Annual Portfolio Review - Key Points
Replies: 6
Views: 1172

Re: Vanguard CFP Annual Portfolio Review - Key Points

I don't believe any future return prediction when it is not accompanied with a proper error range: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=170335#p2567570 For instance, error ranges for stocks have no choice to be so wide as to be mostly useless. In other words, nobody can predict ...
by longinvest
Sun Aug 16, 2015 11:36 am
Forum: Investing - Theory, News & General
Topic: A Returns Spreadsheet for Bogleheads
Replies: 106
Views: 17522

Re: A Returns Spreadsheet for Bogleheads

beermike wrote:Excellent spreadsheet, thanks for the great effort!
Do you think there would be any value in having a summary/breakdown of contributions vs investment gains?

You're welcome.

There are both contributions and withdrawals. How would you summarize this? What would be the use of this information?
by longinvest
Sun Aug 16, 2015 11:20 am
Forum: Investing - Theory, News & General
Topic: Does the Three Fund Portfolio need a roboadviser?
Replies: 65
Views: 5166

Re: Does the Three Fund Portfolio need a roboadviser?

Bogleheads: Thank you for your replies. This is my count: ... Taylor, I didn't know that you were counting. You can add my vote to the "no" side. I think that, in general, a simple pen and a sheet of paper (and maybe a calculator) are sufficient for rebalancing a Three Fund Portfolio once...
by longinvest
Sun Aug 16, 2015 11:04 am
Forum: Local Chapters and Bogleheads Community
Topic: Suggested change to Roth as emergency fund wiki page
Replies: 5
Views: 570

Re: Suggested change to Roth as emergency fund wiki page

You should click on the "Help improve this page" link. Wiki editors will then take notice.
by longinvest
Sun Aug 16, 2015 9:51 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

As to comparing to equity benchmarks, maybe I missed something but in Larry's article about QSPIX it clearly states that the expected return is equity-like (http://www.advisorperspectives.com/articles/2014/11/18/how-aqr-s-new-fund-adds-value-an-alternative-approach-to-alternatives-investing-with-st...
by longinvest
Sun Aug 16, 2015 8:23 am
Forum: Investing - Theory, News & General
Topic: Dave Ramsey - Help Me Understand His Investing Strategy
Replies: 73
Views: 7863

Re: Dave Ramsey - Help Me Understand His Investing Strategy

I used to be invested 100% in stocks. I simply was not affected, emotionally, by price volatility because I never considered the stock market as a casino. I knew that I was invested in productive companies in a diversified manner across the entire world. The reason I added bonds to my portfolio is t...
by longinvest
Sun Aug 16, 2015 7:13 am
Forum: Investing - Theory, News & General
Topic: Balanced Portfolio Vulnerable to Inflation?
Replies: 46
Views: 3080

Re: Balanced Portfolio Vulnerable to Inflation?

@longinvest, your logic is wrong. By that logic, the absolute best hedge against inflation would be cash. Obviously this is not the case. That's because inflation can be unexpected. Bonds do a better job at protecting you from expected inflation, because you get higher interest rates for investing ...
by longinvest
Sat Aug 15, 2015 7:25 pm
Forum: Local Chapters and Bogleheads Community
Topic: favorite bogleheads posts?
Replies: 72
Views: 9274

Re: favorite bogleheads posts?

Here's an awesome post by Nisiprius that had a deep and lasting impact on me*. Stocks vs Bonds??? It helped me to start understanding the relation between total return, distributions, and NAV variations of a high-quality aggregate bond fund. * I discovered it a little more than two years ago when se...
by longinvest
Sat Aug 15, 2015 6:45 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

Dodecahedron, thank you for the clarification. I agree with you that CDs can be very interesting for peace of mind.
by longinvest
Sat Aug 15, 2015 3:45 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

My expectation for the Total Bond Market Index over the next 10 years is 2% to 2 1/2% a year. This is also the current yield on the fund. Depending on what inflation does, this might or might not be a good return. Direct CDs at Synchrony (5 year @ 2.25% with 6 month early withdrawal penalty) look l...
by longinvest
Sat Aug 15, 2015 3:38 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

Trying to predict future returns by looking at charts of past data is not helpful and is not recommended for Bogleheads. Isn't that what members of this board commonly do? Recommending index funds, lazy portfolios, etc are all based on past data and backtesting. I see posts all the time that give l...
by longinvest
Sat Aug 15, 2015 3:20 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

coachz wrote:If my math is correct, you get 0.878% doing
(1.02^10 X 1.05^10 X 1.10^10 X 1.15^5)^(1/35) - 1
Which looks close to zero to me.


Your calculator is broken. :wink: I get 6.91%.

Details (rounded): (1.22 X 1.63 X 2.59 X 2.01)^(1/35) - 1 = (10.35)^(1/35) - 1 = 1.0691 - 1 = 6.91%
by longinvest
Sat Aug 15, 2015 3:13 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

Of course bonds have posted long stretches of negative real returns before ... Which coincides with interest rates climbing up - then steadily falling, regularly increasing the value of yesterday's bond ... Or is the real risk to returns rising inflation? Maynard, Did you consider that the gold sta...
by longinvest
Sat Aug 15, 2015 3:09 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

If everyone was clairvoyant, everyone would be rich. The last chart I've got says interest rates will rise thru 2020. Then it stops. The short term rate set by the Federal Reserve should be 4% at that time. Should I stay in short term bonds maturing in 2020 ? Probably. Should I take the majority of...
by longinvest
Sat Aug 15, 2015 2:40 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

So if you future Bond returns are expected to be 0 percent real then why not just put the money into TIPs which are inflation protected and at least get a little bit? I just dont get the point of investing if you are not making crap. I agree with Taylor, you should worry more about stocks. Stocks c...
by longinvest
Sat Aug 15, 2015 2:22 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

So if you future Bond returns are expected to be 0 percent real then why not just put the money into TIPs which are inflation protected and at least get a little bit? Why would a less risky asset be guaranteed to return more than a riskier one? We simply don't know which of nominal or inflation-adj...
by longinvest
Sat Aug 15, 2015 2:08 pm
Forum: Investing - Theory, News & General
Topic: End of 30 yr. Bull run on bonds, what now
Replies: 51
Views: 3579

Re: End of 30 yr. Bull run on bonds, what now

So if this is the end of a 30 yr. Bull run on bonds, how is the Total Bond Index Fund expected to fare for the next 10 or 20 yrs? As rates rise won't they necessarily drop or is it more nuanced ? Coachz, Bonds are not stocks. Bond returns have been good because yields were high 30 years ago. Had in...
by longinvest
Sat Aug 15, 2015 1:10 pm
Forum: Investing - Theory, News & General
Topic: Balanced Portfolio Vulnerable to Inflation?
Replies: 46
Views: 3080

Re: Balanced Portfolio Vulnerable to Inflation?

An aggregate investment-grade nominal bond market index fund is composed of bonds of all maturities over 1 year. As long as investors react to inflation by demanding higher yields, short-term bonds nearing maturity will be replaced with longer ones with a higher yield taking into account the higher ...
by longinvest
Sat Aug 15, 2015 12:54 pm
Forum: Investing - Theory, News & General
Topic: "Weighing the concerns about bond market liquidity."
Replies: 22
Views: 1446

Re: "Weighing the concerns about bond market liquidity."

Perhaps the one fundamental we might debate is whether the potential MF losses are anywhere close to what we see in ETF discounts. My gut feeling is that they're perhaps 10x smaller, if even that, e.g. I'd be very surprised if my muni MFs in 2013 leaked even the 0.5% annualized that I mentioned abo...
by longinvest
Sat Aug 15, 2015 11:34 am
Forum: Investing - Theory, News & General
Topic: Dave Ramsey - Help Me Understand His Investing Strategy
Replies: 73
Views: 7863

Re: Dave Ramsey - Help Me Understand His Investing Strategy

I'll get this out of the way: I am a fan of DR. Generally speaking, his baby steps work...period. Having said that, Dave and I part ways on his investing strategy. As has been repeated discussed on this forum, Dave recommends 25% in each of the "fund types": growth, growth & income, a...
by longinvest
Sat Aug 15, 2015 9:07 am
Forum: Personal Finance (Not Investing)
Topic: What does "LBYM" refer to? Beyond or Below your means?
Replies: 33
Views: 2140

Re: What does "LBYM" refer to? Beyond or Below your means?

OK, it's "Live within your means" as the definition is intended. I changed "Live below your means" to "Live within your means" in the wiki: - Financial planning (Analyze and evaluate your financial status) - Household budgeting (Live within your means) I disagree with ...
by longinvest
Sat Aug 15, 2015 9:01 am
Forum: Personal Finance (Not Investing)
Topic: What does "LBYM" refer to? Beyond or Below your means?
Replies: 33
Views: 2140

Re: What does "LBYM" refer to? Beyond or Below your means?

LadyGeek wrote:How's that look? Can anyone find "LBYM" elsewhere in the wiki that needs to be changed?


LadyGeek, how did you miss this? You'll have to update the videos, too. :wink:
by longinvest
Thu Aug 13, 2015 10:54 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

I don't understand how, regardless of whatever promise this fund's promoters make, one would just go ahead and give 1.5% of his portfolio to AQR every year! The compound costs are just incredible: Let's assume a compound growth, before fees, of 5% per year over 30 years. Without fees, $10,000 would ...
by longinvest
Thu Aug 13, 2015 4:00 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 58372

Re: QSPIX - thoughts on interesting fund

I wish this thread were more about the nuts of bolts of this fund's strategy rather than the constant barrage of negativity and skepticism without any productive input or attempt at trying to understanding this fund. If a 1.5% ER tears at your soul and you dislike factors please save your comments ...

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