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Re: Why would you invest in a bond fund?

The choice really is between bonds and cash, not adding further to stocks. Then the key question would be what is the real (after inflation) bond yield. Depending on the investor's view of expected inflation, should the real yield calculate negative, then in real terms the investor is paying the gov...
by magneto
Wed Dec 17, 2014 11:55 am
 
Forum: Investing - Theory, News & General
Topic: Why would you invest in a bond fund?
Replies: 25
Views: 1909

Re: How to best use upcoming windfall?

We stand to receive over $600,000 after taxes and fees. We owe about $90,000 on a HELOC (prime+0.25%) and $450,000 on a first mortgage at 3.8%, fixed for 30 years. We have no other outstanding debt, cars and paid off, etc. My question is how to best use this windfall. I know that many would suggest...
by magneto
Mon Dec 15, 2014 11:56 am
 
Forum: Investing - Help with Personal Investments
Topic: How to best use upcoming windfall?
Replies: 9
Views: 1292

Re: Investing more when the market is down.

I have a hard time wrapping my head around this. When the market is down everyone agrees it's a good time to invest. "I'm buying stocks at a bargain price". ..... But I can't see how this isn't "timing the market" and thus should be against Boglehead principles. If you strongly ...
by magneto
Sun Dec 14, 2014 11:33 am
 
Forum: Investing - Theory, News & General
Topic: Investing more when the market is down.
Replies: 22
Views: 2270

Re: Harvey paper says re-balancing adds risk

Find the theory around rebalancing confusing, and this thread enlightening in the conflict between value and momentum. Presumably the momentum investor will be buying as asset class rises, while the value investor will be selling? Definitely raises a dilemma about rebalancing? Long ago in pre BH day...
by magneto
Wed Dec 10, 2014 11:44 am
 
Forum: Investing - Theory, News & General
Topic: Harvey paper says re-balancing adds risk
Replies: 72
Views: 4346

Re: What to do with VGPMX?

If I sell VGPMX at a loss, I will have taken the risk without getting the reward. The long term return of gold tends to be zero, when adjusted for inflation. That's why I invested in a fund of miners, which pay dividends, instead of physical gold or a gold ETF. As only 5% invested in the fund, hope...
by magneto
Tue Dec 09, 2014 11:23 am
 
Forum: Investing - Help with Personal Investments
Topic: What to do with VGPMX (Vanguard Precious Metals and Mining)?
Replies: 32
Views: 2235

Re: How do you rebalance?

I am not 'special' :happy ; but do rebalance differently from the main options listed. Not happy with bands or time in isolation. Prefer using both deviation and time! Why ignore one or the other? Approach the stock target at a controlled rate say 10% or 20% of deviation from target per quarter. Thi...
by magneto
Wed Dec 03, 2014 5:57 am
 
Forum: Investing - Theory, News & General
Topic: How do you rebalance?
Replies: 40
Views: 3141

Re: Helping adult child understand investing

We have a similar problem. Some possible avenues we are mulling over :- 1. Set up an account in their name, and deposit some funds. Then make investment decisions together. 2. Show own IPS (and annual reports if done), and ask for comments/suggestions. This almost certainly won't get off the ground ...
by magneto
Mon Dec 01, 2014 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Helping adult child understand investing
Replies: 23
Views: 1854

Re: I'm getting Slaughtered in stocks

The other little secret of individual stock investing is that the more stocks you pick assuming that one diversifies across industry sectors, the less likely you will outperform the broad indexes. That is because your sample gets to bigger and bigger and statistically that means your sample gets to...
by magneto
Sat Nov 29, 2014 2:42 pm
 
Forum: Investing - Theory, News & General
Topic: I'm getting Slaughtered in stocks
Replies: 43
Views: 5830

Re: Need for Int'l Investing

Some information re iShares global fund allocations :-

Nov 2014 (Dec 2009)
--------------------------------
USA 56.66% (47.77%)
Japan 8.23% (9.72%)
UK 6.99% (10.30%)
Canada 3.86% (4.83%)
France 3.65% (5.24%)
Australia 3.15% (3.97%)
by magneto
Wed Nov 26, 2014 11:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Need for Int'l Investing
Replies: 12
Views: 1075

Re: Shiller CAPE 10 — Why So High These Days?

G Whizz, This is a commonly repeated misconception (dare I say straw man) about those who take serious note of market valuations :- "Those who have stayed in cash waiting on the sidelines for PE10 to correct to historically attractive levels before entering the market have in the last 5 years m...
by magneto
Wed Nov 26, 2014 10:48 am
 
Forum: Investing - Theory, News & General
Topic: Shiller CAPE 10 — Why So High These Days?
Replies: 38
Views: 2953

Re: Shiller CAPE 10 — Why So High These Days?

Good thoughtful thread SG. Following link which adds q to the chart, seems to corroborate CAPE. http://www.smithers.co.uk/page.php?id=34 The periods of low valuations in original post seem to be ascribed to 'unusual times'. Are we now clear of 'unusual times'? The thirties depression it is argued wa...
by magneto
Wed Nov 26, 2014 6:12 am
 
Forum: Investing - Theory, News & General
Topic: Shiller CAPE 10 — Why So High These Days?
Replies: 38
Views: 2953

Re: Been out of market since 2008 and can't get back in

There are two problems here :- 1. You think the market is expensive. 2. In spite of being expensive you want to buy some stocks. Nisi recommends gradualism. Concur. If in addition you are going to take note of market valuations, then the following may assist :- 1. Set a target stock % proportional t...
by magneto
Tue Nov 25, 2014 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Been out of market since 2008 and can't get back in
Replies: 52
Views: 5267

Re: Using Bond Funds for market pullbacks

That's not the worst. The worst is that the market drops down much further and stays there, meaning that your eagerness cost you a significant chunk of the portfolio, either money you have to tap into or money you could have used to buy equities much cheaper. +1 If you are going to do this sort of ...
by magneto
Sat Nov 22, 2014 2:16 pm
 
Forum: Investing - Theory, News & General
Topic: Using Bond Funds for market pullbacks
Replies: 19
Views: 832

Re: portfolio suggestions for the truly aged.

I would look at this from the point of view that she might need cash in the near future if she loses her independence. Also, funds needed within 5 years should not be in the market. I would be inclined to keep not more than 25% in mutual funds in the IRA. Knowing her taxable holdings would potentia...
by magneto
Sat Nov 22, 2014 5:57 am
 
Forum: Investing - Help with Personal Investments
Topic: portfolio suggestions for the truly aged.
Replies: 20
Views: 2269

Re: I may not make my retirement goals! What to do?

Picking up on posts above; herewith recent comments from Jeremy Grantham, with which we would not choose to differ :- "Given his bearish outlook, it is unsurprising that Grantham urges investors to think very carefully about how they build their portfolios in the current environment. “As always...
by magneto
Wed Nov 19, 2014 11:36 am
 
Forum: Investing - Help with Personal Investments
Topic: I may not make my retirement goals! What to do?
Replies: 49
Views: 3595

Re: I may not make my retirement goals! What to do?

It appears that the issue revolves around my stock allocation (all in a world stock ETF), which seems too low, 27%. Further, it also seems that when I increase it to about 35% things look much better. I am willing to change my original plans (25 to 30% in stocks) and increase the stock allocation s...
by magneto
Wed Nov 19, 2014 6:28 am
 
Forum: Investing - Help with Personal Investments
Topic: I may not make my retirement goals! What to do?
Replies: 49
Views: 3595

Re: One Source to follow world markets ?

Try Marketwatch if you can resist over-trading. "If you can keep your head when all about you Are losing theirs and blaming it on you, If you can trust yourself when all men doubt you," "If you can make one heap of all your winnings And risk it on one turn of pitch-and-toss, And lose,...
by magneto
Mon Nov 17, 2014 5:49 am
 
Forum: Investing - Theory, News & General
Topic: One Source to follow world markets ?
Replies: 26
Views: 1872

Re: Strategies to protect retirement from depressn or long b

In 'The Great Depression (A Diary)', Benjamin Roth gives his thoughts on just such a scenario. Those with Gov't Bonds seemed to be sitting pretty, but probably (haven't checked) yields were better in 1929. In view of 2014 yields, Rental Real Estate (RRE) of durable construction ( without debt ) is a...
by magneto
Thu Nov 13, 2014 11:23 am
 
Forum: Investing - Theory, News & General
Topic: Strategies to protect retirement from depressn or long bear?
Replies: 33
Views: 4105

Re: Investing Advice on the Radio - Wish they would go away

Last night my wife told me that we needed a financial adviser because she heard someone on the radio talking about a tax free account where you could sock away a bunch of money post tax and be a gazillionaire at retirement. Because I listen to this station a lot more than she does I have a pretty g...
by magneto
Thu Nov 13, 2014 10:58 am
 
Forum: Personal Finance (Not Investing)
Topic: Investing Advice on the Radio - Wish they would go away
Replies: 22
Views: 2494

Re: Why would a European bother holding bonds in this climat

The only risk free bonds are the German ones. If the Euro breaks up we have to presume that the German government would pay, and the new DM would be a strong currency. The US has the largest and most liquid government bond market in the world (? Japan?). And for all intents and purposes it is defau...
by magneto
Thu Nov 13, 2014 5:35 am
 
Forum: Investing - Theory, News & General
Topic: Why would a European bother holding bonds in this climate?
Replies: 18
Views: 1608

Re: How can I convince my wife to accept investing??

I am having trouble with my wife who doesn't want me to invest. She wants to just save money in savings accounts. When I try to explain her this is not enough, she blocks her ears. Are there others having the same problems? What should I do?? Hi there and welcome, Most here tend towards deciding an...
by magneto
Wed Nov 12, 2014 11:52 am
 
Forum: Investing - Help with Personal Investments
Topic: How can I convince my wife to accept investing??
Replies: 54
Views: 5326

Re: Sunday morning musing - dividend stocks

Dividend stocks can be a tempting trap for the unwary, but you seem to be doing just fine. Some ETFs offering high yield don't seem to carry out any sort of checks to determine the sustainability of the dividends! Just picking the highest yielders! Others, that use computer screening for dividend su...
by magneto
Sun Nov 09, 2014 2:24 pm
 
Forum: Investing - Theory, News & General
Topic: Sunday morning musing - dividend stocks
Replies: 11
Views: 1241

Re: Why are people so down on bonds?

For the last few decades bonds- defined as short-intermediate term high quality fixed income, did two things for one's portfolio: 1. They dampened the volatility of a portfolio and provided a store of value to buy stocks when they went on sale. 2. They could reasonably be counted on to provide a po...
by magneto
Sun Nov 09, 2014 11:09 am
 
Forum: Investing - Theory, News & General
Topic: Why are people so down on bonds?
Replies: 39
Views: 6313

Re: Cash - Throw it on the table!

I look at cash not for a return anymore as a result of interest rates (unfortunately), but rather peace of mind, a mental form of insurance, liquidity, etc. This is an open ended thread with a request to elaborate and expand on the topic of cash. So please, any and all thoughts, perspectives, are w...
by magneto
Wed Nov 05, 2014 11:39 am
 
Forum: Personal Finance (Not Investing)
Topic: Cash - Throw it all on the table!!!
Replies: 51
Views: 3812

Re: "Should You Be a Dividend Stock Investor?"

First ; Very much in favor of total return investing. If the retiree needs a steady flow of dividends, this is one of those rare occasions where some human intervention, to think carefully and assess forward dividend sustainability, can add value. Some ETFs claim to do this, but remain dubious. Is ...
by magneto
Mon Nov 03, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: "Should You Be a Dividend Stock Investor?"
Replies: 33
Views: 3379

Re: "Should You Be a Dividend Stock Investor?"

First ; Very much in favor of total return investing. However would point out that for a retiree in a prolonged market downturn, it is painful to be forced to sell stocks at distressed prices, merely to satisfy current income needs. Some slight, repeat slight, tilt to yield could augment the necessa...
by magneto
Sat Nov 01, 2014 2:43 pm
 
Forum: Investing - Theory, News & General
Topic: "Should You Be a Dividend Stock Investor?"
Replies: 33
Views: 3379

Re: Total World Fund - Under appreciated?

Generally Total World fine. Good portfolio core, esp for non US investors. There are however situations where caution is needed, e.g. holding high weighting Japan 1989 See one point of view from UK :- http://www.irateinvestment.com/2014/04/04/dark-side-of-index-trackers/ "But the risk is not ju...
by magneto
Fri Oct 31, 2014 11:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Total World Fund - Under appreciated?
Replies: 26
Views: 3037

Re: "Schwab Intelligent Portfolios"

"Schwab’s computer algorithm is going to suggest and manage a portfolio of ETFs for you."

Hmmm.

Where does 'intelligent' come in?
by magneto
Thu Oct 30, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 6682

Re: Shiller CAPE Ratio

Another poster was kind enough to share this link.

http://www.starcapital.de/research/stoc ... Shiller_PE
by magneto
Wed Oct 29, 2014 5:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Shiller CAPE Ratio
Replies: 3
Views: 513

Re: Would You Sell Or Continue Renting Out My Condo?

If we separate out the debt from the property and apply it to the whole portfolio, then portfolio looks something like :- Stocks/Bonds 26% (RealYields 2.00% / and 2.21% - infl = -0.35% respectively) Cash 14% (Real Yield est 2.00% - infl = -0.5%) Property 60% (Real Yield 4-5%) Leverage 43% (Real Cost...
by magneto
Tue Oct 28, 2014 5:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Would You Sell Or Continue Renting Out My Condo?
Replies: 27
Views: 3418

Re: Would You Sell Or Continue Renting Out My Condo?

The answer hinges on what the rest of your portfolio looks like.
by magneto
Mon Oct 27, 2014 5:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Would You Sell Or Continue Renting Out My Condo?
Replies: 27
Views: 3418

Re: Rebalancing question [Currency exchange rate differences

The reason I ask is because to account for exchange rate fluctuations would mean far too much activity, and we all like to keep transaction costs at a minimum. But to ignore the exchange rate, often means that I don't take advantage of the price changes which are the cornerstone of asset allocation...
by magneto
Mon Oct 27, 2014 5:20 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing question [Currency exchange rate differences]
Replies: 12
Views: 800

Re: Rebalancing question [Currency exchange rate differences

Not sure fully grasp the question. When the investor reviews their portfolio, all the portfolio components to make any sense will need to be shown in his/her domestic currency. So if some components happen to be in a foreign (non-domestic) currency , they need to be converted back to the domestic cu...
by magneto
Sun Oct 26, 2014 11:21 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing question [Currency exchange rate differences]
Replies: 12
Views: 800

Re: So you think you're a Risk-taker?

The sentence that leapt out was :- "The best insurance against a drop in stocks is plenty of cash and investment-grade bonds; make sure you have it now ." My underline. Reading in conjunction with :- http://www.smithers.co.uk/page.php?id=34 Wondering if may be reading too much into the ext...
by magneto
Sat Oct 25, 2014 1:11 pm
 
Forum: Investing - Theory, News & General
Topic: So you think you're a Risk-taker?
Replies: 36
Views: 4459

Re: VWRL a great buy right now?

The math from nisi is interesting, but as noted over 40 years. Over two, three, four years who knows? Suppose 40 years investing is simply 10 periods of 4 years investing? If it is any help we are buying back into VWRL, after some sales earlier this year, and will keep steadily buying as/if the pric...
by magneto
Mon Oct 20, 2014 10:43 am
 
Forum: Investing - Theory, News & General
Topic: VWRL a great buy right now? [Vanguard FTSE All-World ETF]
Replies: 6
Views: 715

Re: Dry Powder

Re debate of bonds v cash see :-

http://research.stlouisfed.org/fred2/series/DGS10

and set time scale to max

Tells us where we have been but not I regret where we are going !
by magneto
Sun Oct 19, 2014 1:56 pm
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3578

Re: Dry Powder

Extract here from a notoriously cautious UK fund manager :- ‘Cash is the most criticised of all investments. Wealth managers and private client stockbrokers are reluctant to hold any cash for clients, particularly in a zero interest rate world. But the virtue of cash is seriously underrated at prese...
by magneto
Sun Oct 19, 2014 10:44 am
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3578

Re: Siren song of increased stock allocation

The recent pullback has not reduced valuations to anywhere near levels at which significant buying of stocks is called for, whether using fixed stock % or even DAA (which is rebalancing plus). The reported Warren Buffet buying of stocks could prove not to be substantial in terms of total assets. You...
by magneto
Fri Oct 17, 2014 4:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Siren song of increased stock allocation
Replies: 38
Views: 2994

Re: Market corrections and rebalancing band

Hi Doc Something perhaps different, as noted in earlier post on this subject :- Find neither bands nor time period rebalancing entirely satisfactory. Have settled on, and written into our IPS, what might be called 'Equal Percentage' (of deviation) Rebalancing, an idea borrowed from Process Control (...
by magneto
Mon Oct 13, 2014 10:37 am
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4289

Re: Japan, 1989

From 'Devil take the Hindmost' Chancellor. By 1990, the total (Japanese) property market was valued at four times the real estate of the entire United States. The grounds of the Imperial Palace in Tokyo were estimated to be worth more than the entire real estate value of California (or Canada if you...
by magneto
Sun Oct 12, 2014 4:12 am
 
Forum: Investing - Theory, News & General
Topic: Japan, 1989
Replies: 118
Views: 26508

Re: Assett allocation market timing strategy inspired by Joh

Those who use such methods don't like to call this Market Timing, rather Dynamic Asset Allocation! Time does not enter the equation but valuations do. In one fell swoop, you just eliminated the cocept of Market Ttiming. Off the planet! Seriously, I don't think I've ever heard of a "market timi...
by magneto
Thu Oct 09, 2014 10:44 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3505

Re: Asset allocation market timing strategy inspired by John

Re the question of valuations in retirement, thought one of the comments in response to the kitces paper link http://www.kitces.com/blog/valuation-based-tactical-asset-allocation-in-retirement-and-the-impact-of-market-valuation-on-declining-and-rising-equity-glidepaths/ was interesting :- "If a...
by magneto
Sun Oct 05, 2014 4:52 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3505

Re: Asset allocation market timing strategy inspired by John

Using valuations to time the market is just a way to try to reduce volatility, but a better way is just to invest an amount in stocks that will have tolerable volatility. You really can't improve your returns by using valuations, discounting dumb luck, and no credible source I know of claims this. ...
by magneto
Sat Oct 04, 2014 1:18 pm
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3505

Re: Asset allocation market timing strategy inspired by John

I sure wouldn't put mechanical rules in my Investment Policy Statement saying, "if the market does X, I will do Y." The reason being is that each market situation needs to be judged on its merits because each is different. Don't lock yourself into mechanical strategies because each market...
by magneto
Thu Oct 02, 2014 10:38 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3505

Re: Assett allocation market timing strategy inspired by Joh

Those who use such methods don't like to call this Market Timing, rather Dynamic Asset Allocation! Time does not enter the equation but valuations do. For most investors in accumulation static AA is fine, riding out the market cycle waves rebalancing. For those approaching or in retirement, the poss...
by magneto
Tue Sep 30, 2014 10:13 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3505

Re: rebalancing conundrum/paradox/irony

Also, a constant asset allocation does not necessarily maintain a constant level of risk. The relative risk and stocks and bonds can change and the absolute level of risk of both can change. Was wondering also on this point about absolute risk. With say a 60/40 portfolio constant allocation, does p...
by magneto
Mon Sep 29, 2014 10:43 am
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 83
Views: 5531

Re: What's Your Takeaway from 2014 High Valuation

I regard Dr. Jeremy Siegel as a cheerleader for stocks who tends to put optimistic spin on things, but I also regard him as an intellectually honest academic whose numbers can be trusted. He has an interesting chart in Stocks for the Long Run , the gist of which is that even if you only buy stocks ...
by magneto
Fri Sep 26, 2014 10:55 am
 
Forum: Investing - Theory, News & General
Topic: What's Your Takeaway from 2014 High Valuation
Replies: 52
Views: 4399

Re: My IPS and rebalancing

Find neither bands nor time period rebalancing entirely satisfactory. So here is a repeat of earlier post on this subject :- We have settled on, and written into our IPS, what might be called 'Equal Percentage' (of deviation) Rebalancing, an idea borrowed from Process Control (Integral/Reset Action)...
by magneto
Thu Sep 25, 2014 10:40 am
 
Forum: Investing - Help with Personal Investments
Topic: My IPS and rebalancing
Replies: 12
Views: 1154

Re: Holding Cash because Tried to time Market

Sorry to hear of your past difficulties OP. Hope all is now going to be fine. This is a copy of post in a similar thread, where like your goodself, doubts re investing at present market valuations were creeping in. Most here will correctly say (based on past experience) that lump sum buying of stock...
by magneto
Thu Sep 18, 2014 10:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 6735

Re: help! where to invest about 500k

It has been all cash for a while. Yes, I missed the rally of the last 5 years due to fear. I kick myself for that everyday. If I decide to go the DCA route, for how many years do you usually extend the deposits to? Most here will correctly say (based on past experience) that lump sum buying of stoc...
by magneto
Tue Sep 16, 2014 10:55 am
 
Forum: Investing - Help with Personal Investments
Topic: help! where to invest about 500k
Replies: 16
Views: 1368
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