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Oh well

I guess I have to realize I can dump on presentations and interpretations in uncomfortable ways, always to the benefit of the readers.

Good luck to all, and if that means me learning a lesson or two so be it.
by maddyken
Sun Dec 23, 2012 9:18 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How much re-balancing bonus do you expect?
Replies: 47
Views: 3508

Dave

Are you still with me?
by maddyken
Sun Dec 23, 2012 8:56 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How much re-balancing bonus do you expect?
Replies: 47
Views: 3508

^

A bit too tilted toward capital assets for my comfort.
by maddyken
Sun Dec 23, 2012 8:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: portfolio feedback, please
Replies: 8
Views: 613

Art

[Off-topic comment removed by admin LadyGeek]
by maddyken
Sun Dec 23, 2012 8:01 pm
 
Forum: Investing - Theory, News & General
Topic: Very specific question on international allocation
Replies: 12
Views: 974

Art

[off-topic comment removed by admin LadyGeek]
by maddyken
Sun Dec 23, 2012 7:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Your International vs. U.S. Stock Allocation?
Replies: 73
Views: 6069

Dave

The portfolio return is the sum of the weighted returns of the individual classes. The returns of the individual classes are determined at the end of the period, after each class SD has been accounted for (rolled up into the class return)...and consequently rolled up into the portfolio return. IOW, ...
by maddyken
Sun Dec 23, 2012 7:06 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How much re-balancing bonus do you expect?
Replies: 47
Views: 3508

Re: POLL: How much re-balancing bonus do you expect?

Doing a full backward-looking mean-variance optimization the only inputs are the returns and the weights for each investment. The interaction among the classes/investments is derived from the returns. In a roundabout way you can see why backward-looking analyses have significant limitations. That's ...
by maddyken
Sun Dec 23, 2012 6:39 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How much re-balancing bonus do you expect?
Replies: 47
Views: 3508

Re: POLL: How much re-balancing bonus do you expect?

The ideal is to build a portfolio which will deliver, say, 8% per year with zero volatility. Then your planning is straightforward. In the real world the portfolio SD is going to cause the portfolio return to fall below 8%, so we try to minimize deviations from 8% in order to keep our plan on track....
by maddyken
Sun Dec 23, 2012 5:58 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How much re-balancing bonus do you expect?
Replies: 47
Views: 3508

Re: POLL: How much re-balancing bonus do you expect?

I voted approximately zero.

I have doubts about rebalancing back to a DIY AA. Is there any reason to believe an initially arbitrary AA is efficient or will be efficient over the long run?
by maddyken
Sun Dec 23, 2012 3:33 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: How much re-balancing bonus do you expect?
Replies: 47
Views: 3508

Re: Single Fund Selection for IRA

Why not Wellington or Wellesley? I think either of them is preferable to the funds you're considering.

Another good option would be the 60/40 distribution fund, although management of the distributions could be a problem.
by maddyken
Sun Dec 23, 2012 3:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Single Fund Selection for IRA
Replies: 11
Views: 823

Re: Recent Retiree - Target Retirement Income or Wellesley F

Once transferred you should qualify for a free Vanguard Brokerage Account, you could then gain access to PAUIX which would be a great complement to Wellesley Income (Admiral shares). An even split between VWIAX and PAUIX would be great, although I'd probably tilt a bit toward PAUIX.
by maddyken
Sun Dec 23, 2012 2:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Recent Retiree - Target Retirement Income or Wellesley Fund?
Replies: 31
Views: 4082

Re: when do you plan to change AA

I hope to have my target AA (still have some cash to invest) until I retire, which I hope will be in 16 years.

The change I anticipate will likely come with an increase in income and an increase in diversification.
by maddyken
Sun Dec 23, 2012 2:20 pm
 
Forum: Investing - Theory, News & General
Topic: when do you plan to change AA
Replies: 29
Views: 1861

Re: BND combined with PIMCO Total Return (PTTRX)

My bonds are actively managed, they're also highly diversified. I think my PIMCO fund holds bond funds managed by Gross and I have no problem with that. I think multi-sector and strategic income funds are good options for those looking for a highly diversified bond fund, they're the all-encompassing...
by maddyken
Sun Dec 23, 2012 2:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND combined with PIMCO Total Return (PTTRX)
Replies: 32
Views: 2108

Re: Your International vs. U.S. Stock Allocation?

This question is just one of many which convinced me to dump them in my managers' laps.

If I were doing it myself I'd buy stocks based on fundamentals or buy a global stock fund.

The responses are all over the place, not surprising.
by maddyken
Sun Dec 23, 2012 1:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Your International vs. U.S. Stock Allocation?
Replies: 73
Views: 6069

Re: Portfolio: Smart or Stupid?

You may be limited in your TSP choices, nothing you can do about that so I'd say you're likely doing pretty well in there.

I think you're under-diversified in your Roth, where you likely have endless choices. Specifically, your exposure to alternative classes is zero.
by maddyken
Sun Dec 23, 2012 12:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio: Smart or Stupid?
Replies: 13
Views: 1538

Re: Bernstein: How to Build Your Own Hedge Fund

I'm not sure HFs are necessary. I referred to the growth vs inflation model when I built my portfolio, I referred to many other things as well. While asset classes don't quite fit as neatly into that macro model as the diagrams show at minimum the model provides the rationale behind asset classes in...
by maddyken
Sun Dec 23, 2012 12:41 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: How to Build Your Own Hedge Fund
Replies: 17
Views: 2966

MS/SI

If I had to invest under such a limitation I'd pick one of the multi-sector or strategic income funds, they're largely global TAA bond funds.
by maddyken
Fri Dec 21, 2012 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why even invest in equities
Replies: 31
Views: 4074

!

Boy am I glad I invest at the business level.
by maddyken
Fri Dec 21, 2012 10:00 pm
 
Forum: Investing - Theory, News & General
Topic: Are U.S. Stocks Diverging from the U.S. Economy?
Replies: 7
Views: 1372

Re: Why not a larger small cap allocation?

The ending was great, especially when George intimates his next hot tip...a business making robot butchers.
by maddyken
Fri Dec 21, 2012 9:10 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a larger small cap allocation?
Replies: 21
Views: 1895

Yuck Yuck

Last night they showed the episode of Seinfeld in which George convinces Jerry to go in on a stock with him, Cendrex. After several days of losses Jerry bails and locks in a $1,500 loss, George decides to stick it out. A few days later, out of curiosity, Jerry and his girlfriend check the stock in t...
by maddyken
Fri Dec 21, 2012 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a larger small cap allocation?
Replies: 21
Views: 1895

Re: Why not a larger small cap allocation?

In the long run don't the returns on stocks reflect earnings?
by maddyken
Fri Dec 21, 2012 7:52 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a larger small cap allocation?
Replies: 21
Views: 1895

Re: Why not a larger small cap allocation?

With 45 years to go you are contemplating exactly the opposite approach I would take if I were in your situation. I would adopt a highly diversified conservative or moderate portfolio to reduce risk and take advantage of compounding over so many years to grow my portfolio, rather than relying too he...
by maddyken
Fri Dec 21, 2012 4:25 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a larger small cap allocation?
Replies: 21
Views: 1895

Re: Why even invest in equities

I don't like reaching into the past for comparisons, the past is the past. But as a result of some simplistic research I did a year ago... Between 73 and 82 Wellesley just missed keeping pace with inflation, Wellington didn't fare so well. Recall, Wellesley runs about 33/67 (stocks/bonds) and Wellin...
by maddyken
Fri Dec 21, 2012 2:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why even invest in equities
Replies: 31
Views: 4074

Re: Why even invest in equities

After years of investing and my own research I've come to the conclusion the rule-of-thumb recommending large stock allocations for young investors is just the opposite of what I would do if I had the chance to do it all over again. The long horizon translates to assuming less risk, not more. If one...
by maddyken
Fri Dec 21, 2012 1:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why even invest in equities
Replies: 31
Views: 4074

Re: Why even invest in equities

I think 100% bonds is under-diversified too, although if you were intent upon such a portfolio you might consider multisector and strategic income funds. A healthy dose of alternative classes would also be wise. I share your concern over stock volatility and whenever this comes up I always mention t...
by maddyken
Fri Dec 21, 2012 1:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why even invest in equities
Replies: 31
Views: 4074

T

I get your points. I'm not sure a lot of securities means better diversification. I think I could have picked a better word than static for the TR funds, slowly changing might have been more appropriate. In any event TR funds make big bets on when the stock and bond markets should be heavily weighted.
by maddyken
Thu Dec 20, 2012 7:44 pm
 
Forum: Investing - Theory, News & General
Topic: Why doesn't the general public care about expense ratios?
Replies: 101
Views: 7304

Re: Why doesn't the general public care about expense ratios

Using the low ER index approach can lead to one of two problems: 1) If you adopt the fund-of-funds approach you end up with limited diversification within a static AA. 2) If you choose to go with a number of targeted index funds you assume responsibility for portfolio management. There may be other ...
by maddyken
Thu Dec 20, 2012 5:49 pm
 
Forum: Investing - Theory, News & General
Topic: Why doesn't the general public care about expense ratios?
Replies: 101
Views: 7304

Re: balanced risk allocation fund Invesco

Dr. Grantham could be a source.
by maddyken
Wed Dec 19, 2012 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: balanced risk allocation fund Invesco
Replies: 23
Views: 1274

Re: balanced risk allocation fund Invesco

Your data is backward-looking and of course period-dependent, for me those are major drawbacks.

At this stage in my life I wouldn't be able to adopt a fixed AA based on past performance, I'm not investing for the past.
by maddyken
Wed Dec 19, 2012 8:08 pm
 
Forum: Investing - Theory, News & General
Topic: balanced risk allocation fund Invesco
Replies: 23
Views: 1274

L

I have a small amount of HY, my fund managers see value (for now) and I don't second guess them. I personally wouldn't own HY if I managed my portfolio because the misleading long term correlations don't hold during crises. I've come to the conclusion downside protection is paramount, as opposed to ...
by maddyken
Wed Dec 19, 2012 7:57 pm
 
Forum: Investing - Theory, News & General
Topic: hidden risk in high yield bonds
Replies: 62
Views: 4913

Re: Why doesn't the general public care about expense ratios

It's not all about reducing drag, it's about a sound/reasonable financial plan and making it succeed.
by maddyken
Wed Dec 19, 2012 7:31 pm
 
Forum: Investing - Theory, News & General
Topic: Why doesn't the general public care about expense ratios?
Replies: 101
Views: 7304

Re: Why doesn't the general public care about expense ratios

My objective is not to realize the highest return possible, my objectives are to meet my portfolio value target at the time I retire and then make that money last through my retirement. So while I may pay somewhere between 15 and 20% over an extended time period for management it's worth it to me. W...
by maddyken
Wed Dec 19, 2012 7:28 pm
 
Forum: Investing - Theory, News & General
Topic: Why doesn't the general public care about expense ratios?
Replies: 101
Views: 7304

Re: balanced risk allocation fund Invesco

Sorry, invesco balanced risk.
by maddyken
Wed Dec 19, 2012 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: balanced risk allocation fund Invesco
Replies: 23
Views: 1274

Re: Wellesley distribution....buy now?

Isn't the NAV of Wellesley relatively stable?
by maddyken
Tue Dec 18, 2012 8:13 pm
 
Forum: Investing - Theory, News & General
Topic: Wellesley distribution....buy now?
Replies: 18
Views: 997

Z

I don't think you'll get the level of diversification of IBR from the VG/TRP funds.
by maddyken
Tue Dec 18, 2012 8:10 pm
 
Forum: Investing - Theory, News & General
Topic: balanced risk allocation fund Invesco
Replies: 23
Views: 1274

Re: Why doesn't the general public care about expense ratios

I care more about after-cost performance.
by maddyken
Tue Dec 18, 2012 8:03 pm
 
Forum: Investing - Theory, News & General
Topic: Why doesn't the general public care about expense ratios?
Replies: 101
Views: 7304

Re: balanced risk allocation fund Invesco

I don't think Wellesley and IBR are similar.

Wellesley uses a static AA and is geared for low/moderate inflation environments, IBR has a dynamic AA and should be able to handle higher inflation too.
by maddyken
Mon Dec 17, 2012 5:41 pm
 
Forum: Investing - Theory, News & General
Topic: balanced risk allocation fund Invesco
Replies: 23
Views: 1274

Re: How can I invest almost entirely in real assets?

Just asking...how's economic growth been over that period...one way to suppress inflation is to stifle growth, to the point few want to take risk.
by maddyken
Sun Dec 16, 2012 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: How can I invest almost entirely in real assets?
Replies: 30
Views: 2536

Z

The fund is an attempt to distribute volatility evenly, so your stocks don't drive the whole portfolio into the ground. The volatility-spreading is coupled with macro risk considerations, like growth and inflation. The main mechanism for volatility reduction is the big bond allocation, with leveragi...
by maddyken
Sun Dec 16, 2012 3:05 pm
 
Forum: Investing - Theory, News & General
Topic: balanced risk allocation fund Invesco
Replies: 23
Views: 1274

Re: "Are You Brilliant, or Lucky?"

I think many investors need to be brilliant, realizing they should detach themselves from the investment process as much as possible.
by maddyken
Sun Dec 16, 2012 2:38 pm
 
Forum: Investing - Theory, News & General
Topic: "Are You Brilliant, or Lucky?"
Replies: 48
Views: 4402

Re: Investment vs Speculation

I invest to meet my future retirement needs. Bogle's restricting himself to capital markets, which I think is generally a mistake. I'm not sure how a dollar gained in precious metals or foodstuffs is different than a dollar earned in capital markets. Prices are determined differently in each of thes...
by maddyken
Sun Dec 16, 2012 1:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investment vs Speculation
Replies: 14
Views: 1256

Re: Which would you choose??

Option 1, although if I were limiting myself to VG funds I'd go with Wellesley.

IMO PIMCO's All Asset is good single fund solution.
by maddyken
Sun Dec 16, 2012 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: Which would you choose??
Replies: 16
Views: 1100

Browser

I would stay broadly diversified, going 100% real assets doesn't seem like a balanced approach from an asset allocation perspective. I don't see Arnott as prone to wild speculation or scare tactics, he's a smart guy and a good manager. I have about 25% of my retirement assets in his All Asset All Au...
by maddyken
Sun Dec 16, 2012 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: How can I invest almost entirely in real assets?
Replies: 30
Views: 2536

Re: Gold continues to fall

I'm not seeing any decline in the fear factor to justify the decline in gold.
by maddyken
Fri Dec 14, 2012 9:57 pm
 
Forum: Investing - Theory, News & General
Topic: Gold continues to fall
Replies: 178
Views: 14520

Re: "Skating Where the Puck Was"

I'm a little more cautious on GDP growth and stocks.
by maddyken
Fri Dec 14, 2012 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 12933

ziszew

While I think Swensen is a great manager I doubt he's the only one who knows the ins and outs of alternative investments, many of them are accessible to investors. I'm not buying your claim about higher return translating to higher risk. While there aren't any guarantees with asset allocation manage...
by maddyken
Fri Dec 14, 2012 8:08 pm
 
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 12933

Re: "Skating Where the Puck Was"

I'm not sure what the problem is with holding alternative classes, conventional stock and bond portfolios like Wellington, Wellesley, etc. didn't keep pace with inflation between 73 and 82 although Wellesley came close. Wellington lost about 33% from its peak in late 2007 between 2007 and 2009. Alte...
by maddyken
Wed Dec 12, 2012 5:50 pm
 
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 12933

Re: "Skating Where the Puck Was"

While I appreciate the idea of investors getting to the party too late I disagree with much of what's been posted so far. I haven't conducted comprehensive research but from what I have seen some institutions have done well using actively managed portfolios which contain alternatives. I realize aver...
by maddyken
Tue Dec 11, 2012 7:51 pm
 
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 12933

Re: Wellsley Fund

My only problem with either fund is inflation.

Both can go shorter in bonds and load up on inflation-sensitive stock sectors, but that's about it.
by maddyken
Mon Dec 10, 2012 7:44 pm
 
Forum: Investing - Theory, News & General
Topic: Wellsley Fund
Replies: 20
Views: 2201
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