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Re: Best way to reach initial allocation in a bull market?

I think the article I posted answered a lot of my questions. The big one is still this though: even though it seems to make sense to keep contributing to stocks in this bullish market (never know of course), is there any reason to overweight certain assets relative to your desired final allocation....
by magneto
Fri Jul 25, 2014 11:56 am
 
Forum: Investing - Theory, News & General
Topic: Best way to reach initial allocation in a bull market?
Replies: 28
Views: 2475

Re: Best way to reach initial allocation in a bull market?

Not quite sure frey where you are starting from, and where you are heading. Apart from lump sum and linear DCA, there is also the option of moving a set percentage of deviation from target(s), per month/quarter. This means shifting more funds at the start of the process and gradually tapering down (...
by magneto
Fri Jul 25, 2014 7:48 am
 
Forum: Investing - Theory, News & General
Topic: Best way to reach initial allocation in a bull market?
Replies: 28
Views: 2475

Re: New investor [UK portfolio help]

Just to add to what Ted has said, there is one short gilt tracker IGLS (0-5year gilts), with a modified duration of 2.38 years. However in my opinion it compares poorly with cash, since the distribution yield is currently 0.65%, and the total expense ratio 0.2%. I suppose it might conceivably produc...
by magneto
Fri Jul 25, 2014 4:48 am
 
Forum: Investing - Help with Personal Investments
Topic: New investor [UK portfolio help]
Replies: 7
Views: 466

Re: New investor [UK portfolio help]

The money I have made on my life is stuck on the bank, where it makes very little as you can imagine. Not clear about this as you list some investments I read some books and came up to the conclusion that I should try to do it for myself instead of looking for a “professional” to look after my buss...
by magneto
Thu Jul 24, 2014 11:14 am
 
Forum: Investing - Help with Personal Investments
Topic: New investor [UK portfolio help]
Replies: 7
Views: 466

Re: Should market valuations be completely disregarded?

I am a stumbling amateur, so no expert like Larry, but I have used valuations to set Dynamic Asset Allocations since 1990s. Also used controlled rate of approach to target, to gain momentum benefits, etc. So far it has worked out well, far better than even a 100% stock portfolio, as I fully register...
by magneto
Wed Jul 23, 2014 11:59 am
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3797

Re: What to do in a market correction

AA: As equities have gone up so much in the past few years, I have been putting dividends, distributions, and new investments into bonds to maintain my AA. But I am not really happy with bonds either, so I have allowed my cash to drift up to about 1% of my portfolio. Rebalancing: I allow about 3% l...
by magneto
Tue Jul 22, 2014 11:21 am
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 3072

Re: What to do in a market correction

Don, couple of questions :-

How comfortable do you feel about your present AA targets?
What does your IPS say about rebalancing?

All Best
by magneto
Mon Jul 21, 2014 11:24 am
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 3072

Re: Ways to lose money and destroy personal wealth by invest

Has anyone mentioned yet?
failing to diversify
by magneto
Mon Jul 21, 2014 11:06 am
 
Forum: Investing - Theory, News & General
Topic: Ways to lose money and destroy personal wealth by investing
Replies: 81
Views: 9251

Re: Tobins Q as market valuation metric

Part of the original question was should we be worried that Q is showing stocks fully valued/expensive? We have already beaten to death PE10, to little avail. In a world of low interest rates what are the investment alternatives? Seems we are forced by the central banks, despite our reservations, i...
by magneto
Sat Jul 19, 2014 2:28 pm
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2098

Re: Tobins Q as market valuation metric

Part of the original question was should we be worried that Q is showing stocks fully valued/expensive? We have already beaten to death PE10, to little avail. In a world of low interest rates what are the investment alternatives? Seems we are forced by the central banks, despite our reservations, in...
by magneto
Sat Jul 19, 2014 6:00 am
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2098

Re: Market Timing vs. Market Opportunity

This is the paragraph that comes to mind when this subject turns up :- Benjamin Graham has this to say in The Intelligent Investor. ‘Since common stocks, even of investment grade, are subject to recurrent and wide fluctuations in their prices, the intelligent investor should be interested in the pos...
by magneto
Fri Jul 18, 2014 11:19 am
 
Forum: Investing - Theory, News & General
Topic: Market Timing vs. Market Opportunity
Replies: 46
Views: 2958

Re: "Stocks and shares," different things? "Peter Pan"

As a UKian have been puzzled and irritated for years when financial journalists and other commentators use the expression 'stocks and shares' with monotonous regularity. If shares (of a company), are not stocks, then what the heck are they? Looking in current FT, UK stock prices are on a page headed...
by magneto
Tue Jul 15, 2014 11:19 am
 
Forum: Investing - Theory, News & General
Topic: "Stocks and shares," different things? "Peter Pan"
Replies: 39
Views: 2825

Re: Adding Corporates to Total Bond Market Index

Great post Valuethinker
Just when also thinking in desperation about adding Corporates in violation of IPS, because of low yield on Gov't/Treasuries, along comes a blast of common sense.
Thanks
by magneto
Tue Jul 15, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6600

Re: Moving From Bonds Into Stocks

I am doing a 60/40 stock and bond allocation via my 401(K) and plan on staying the course. But hypothetically speaking, let's say that tomorrow we had a 40-50% correction in equities. Would it be foolish to move that 40% I have sitting in a bond fund into the stock portion and buying all of those e...
by magneto
Tue Jul 15, 2014 5:57 am
 
Forum: Investing - Help with Personal Investments
Topic: What To Do During A Correction In Stocks?
Replies: 31
Views: 3682

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

Would rebalance progressively. Currently we move towards targets at 10% of deviation per quarter. The investor is then moving cautiously in the right direction, if seldom reaching the target. Gives system and investor stability in an uncertain world. Pick you own percentage for rate of approach.
by magneto
Mon Jul 14, 2014 11:05 am
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4151

The Company Men

Recently caught up with this film about redundancies. Struck us that the characters were the very opposite of Bogleheads, spending up to their generous incomes and maybe well beyond. When redundancy strikes all seem financially unprepared. Has discussion about this film come up in earlier threads? C...
by magneto
Sun Jul 13, 2014 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: The Company Men
Replies: 1
Views: 692

Re: UK Foundation Portfolio

One quick additional question. A number of people have mentioned IWRD (iShares Global ETF) (inc), which has been going for a number of years with TER 0.5%. I am struggling to see the difference between IWRD and iShares other Global ETF, SWDA (acc) other than in SWDA dividends are re-invested. Is th...
by magneto
Wed Jul 09, 2014 10:51 am
 
Forum: Investing - Help with Personal Investments
Topic: UK Foundation Portfolio
Replies: 16
Views: 1359

Re: Why not include gold?

Have held gold in our portfolio, but it was scary as there was no rational way of determining whether it was cheap or expensive. With other assets bonds,stocks, cash and even real estate, valuations can be determined by measures such as earnings or yield. What to use for gold? As said above by other...
by magneto
Wed Jul 09, 2014 10:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not include gold?
Replies: 48
Views: 3795

Re: Rent Out House or Sell House?

Lot of money tied up in one fairly illiquid asset. The gross yield 4.2%? before expenses and tax is borderline acceptable. I would be looking for 10% plus for any new RRE investments, possible when housing market low. If you like the idea of Residential Real Estate as an asset class, maybe sell the ...
by magneto
Wed Jul 09, 2014 4:44 am
 
Forum: Personal Finance (Not Investing)
Topic: Rent Out House or Sell House?
Replies: 9
Views: 1332

Re: Want international exposure? You already have it.

Browser wrote:There's a reason that returns from U.S. large cap stocks and EAFE are so highly correlated


Split apart Europe and FE and a different picture emerges, one ripe with diversification opportunities.
by magneto
Tue Jul 08, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: Want international exposure? You already have it.
Replies: 65
Views: 6351

Re: Cash allocation in a portfolio

Cash Target 50%, so not able to directly answer poll. Why 50%? In retirement in the UK and reducing risk. At present Gov't Bonds (Gilts) have a low allocation in the portfolio as mostly offering negative real yields, and in spite of recent rally seem to be in a bear market since May 2013, since when...
by magneto
Tue Jul 08, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: Cash allocation in a portfolio
Replies: 42
Views: 3725

Re: UK Foundation Portfolio

1. I've looked briefly at the "High Yield" ETFs, but have not yet been tempted as I thought they might be new and unproven. I could swap the iShares SWDA for the Vanguard VHYL - any other opinions on this approach? 2. Regarding Europe, I could potentially go for a Europe-wide ETF and then...
by magneto
Tue Jul 08, 2014 10:53 am
 
Forum: Investing - Help with Personal Investments
Topic: UK Foundation Portfolio
Replies: 16
Views: 1359

Re: UK Foundation Portfolio

If I had no beliefs about relative valuation then I'd like the elegance of an world tracker. If I had to buy some sort of world tracker now I'd buy the Vanguard High Yield ETF, which invests in the half of the world index capitalisation that has higher dividends. It has less exposure to the USA, so...
by magneto
Tue Jul 08, 2014 5:38 am
 
Forum: Investing - Help with Personal Investments
Topic: UK Foundation Portfolio
Replies: 16
Views: 1359

Re: How do I stop worrying about money?

If we have money we worry about how to protect and grow it.
If we don't have money there are a different set of worries.
We can't win.
Carry on worrying, that's life!
by magneto
Mon Jul 07, 2014 11:39 am
 
Forum: Personal Finance (Not Investing)
Topic: How do I stop worrying about money?
Replies: 71
Views: 7486

Re: UK Foundation Portfolio

As UK Investors we use ETFs for tracking to avoid platform fees and to make dealing (with limit orders) more transparent. We also use Investment Trusts which are outside of this discussion. For Domestic (UK) FTSE100 VUKE or ISF Mid 250 MIDD For Global VWRL or IWRD Note : last time I checked VWRL see...
by magneto
Mon Jul 07, 2014 5:44 am
 
Forum: Investing - Help with Personal Investments
Topic: UK Foundation Portfolio
Replies: 16
Views: 1359

Re: Investing from new zealand

Voltage wrote:Another way is to see how pension funds allocate to different regions


Yes that would be interesting. Keep us posted.
by magneto
Tue Jul 01, 2014 5:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Investing from new zealand
Replies: 28
Views: 1706

Re: Investing from new zealand

Voltage wrote:Ok how does the following allocation sound
NZ. 35%
Australia 20%
US 20%
Global 20%
Emerging 5%


What happened to Europe and Asia? OK Global covers.
by magneto
Mon Jun 30, 2014 11:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Investing from new zealand
Replies: 28
Views: 1706

Re: How to get father on board with index funds

Rather than an all or nothing change, perhaps suggest he add one or two passive funds to his portfolio, and watch them to see how they perform in comparison with his other investments. Could lead to an interesting debate in the future, without the discussion becoming too polarised.
by magneto
Mon Jun 30, 2014 11:24 am
 
Forum: Investing - Help with Personal Investments
Topic: How to get father on board with index funds
Replies: 34
Views: 2083

Re: Investing from new zealand

Have seen the advice that in theory one global stock fund should suffice balanced with domestic bonds. However as noted above currency issues could affect the stock decision. For what it may be worth from a UK perspective, we aim for 1/3rd domestic UK with balance global. So if this appeals maybe up...
by magneto
Fri Jun 27, 2014 5:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Investing from new zealand
Replies: 28
Views: 1706

Re: Rental property in asset allocation

Thanks so much for the help. I would have thought the real estate would be included in total portfolio. I do not include my personal home as I have to live somewhere. I do not own any REITS. I thought I should include in my asset allocation so I would not be too heavy in stocks. Thanks. Would echo ...
by magneto
Thu Jun 26, 2014 11:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Rental property in asset allocation
Replies: 18
Views: 852

Re: Would you change stock allocation based on market condit

When goods are on offer or expensive it is worth noting and making changes to a purchasing policy. The difficulty with stocks is finding a reliable valuation measure and then 'staying the course' with that valuation measure. Can get lonely for a long time with irrational markets as followers of John...
by magneto
Mon Jun 23, 2014 5:57 am
 
Forum: Investing - Theory, News & General
Topic: Would you change stock allocation based on market conditions
Replies: 37
Views: 1769

Re: Pros and Cons of Dollar-Cost Averaging

You can skip all that with a simple thought experiment: imagine that your cat walked on your keyboard and sold all the stocks/funds/ETFs in your IRA (so we can ignore taxes here). Do you immediately undo the transaction, or do you take your "lump sum" of money and DCA it into the market? ...
by magneto
Wed Jun 18, 2014 3:45 am
 
Forum: Investing - Theory, News & General
Topic: Pros and Cons of Dollar-Cost Averaging
Replies: 12
Views: 1739

Re: Pros and Cons of Dollar-Cost Averaging

Good thread. Debate more nuanced than this topic usually creates. However to fly off at a tangent, find interesting a third way of approaching the target, between the all or nothing lump sum and DCA, which is 'equal percentage', moving the investor more evenly in percentage terms towards her target....
by magneto
Tue Jun 17, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: Pros and Cons of Dollar-Cost Averaging
Replies: 12
Views: 1739

Re: Why is VWRL underperforming it's benchmark so significan

Had noticed that VWRL price had underformed IWRD, but assumed this was because IWRD excluded Emerging Markets which as we know had a pretty bad ride over the last year or so. This thread has me now wondering if more is going on than first supposed.
by magneto
Tue Jun 10, 2014 4:53 am
 
Forum: Investing - Theory, News & General
Topic: Why is VWRL underperforming it's benchmark so significantly?
Replies: 10
Views: 1470

Re: Real estate and asset allocation

We regard Residential Real Estate (RRE) as long term investments (held forever unless valuations get seriously out of line) and the income that RRE produces as simply another income stream, rather like a pension. We then concentrate on the remaining assets (stocks/bonds/cash) for AA decisions. This ...
by magneto
Sun Jun 08, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: Real estate and asset allocation
Replies: 6
Views: 573

Re: Some discussion from the UK

Re let property we find this a very useful diversifier, bought late 90s when prices were lower and gross yields were in excess of 10%. Gross yields now about 4%-5%. While I would be ready to sell if stocks or bonds were offering more value, my wife loves them because she can see them as tangible as...
by magneto
Fri Jun 06, 2014 11:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Some discussion from the UK [Retirement withdrawal strategy]
Replies: 113
Views: 7345

Re: tenant advice?

So the tenant does not want to move out, even though they were given notice! From my reading of the OP post it seems the notification was given a month in advance of the lease termination. That may be too little time to find a new apartment, hence the tenant irritation. So before things get real na...
by magneto
Thu Jun 05, 2014 11:27 am
 
Forum: Personal Finance (Not Investing)
Topic: tenant advice?
Replies: 46
Views: 2765

Re: Some discussion from the UK

Magneto Whether investing lump sums or rebalancing we only ever move 10% of deviation from target per quarter. Would it not take 10 times 3 months or two and a half years to complete rebalance doing it that way? In my case 50% of my portfolio needs to be moved if I am to go to a 40 equity/60 bond a...
by magneto
Thu Jun 05, 2014 6:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Some discussion from the UK [Retirement withdrawal strategy]
Replies: 113
Views: 7345

Re: When to asset allocate

My own preference is to move 10% of deviation from target(s) per quarter. Could be upped to 15% if preferred. This will be recognised as a modified version of DCA. The idea is borrowed from control theory and has a number of benefits (some psychological). Hopefully trading costs can be kept to a min...
by magneto
Thu Jun 05, 2014 5:17 am
 
Forum: Investing - Help with Personal Investments
Topic: When to asset allocate
Replies: 4
Views: 362

Re: Some discussion from the UK

kcfin

Couple of after thoughts :-

With HICL please be aware of the political risk as future governments may move the goalposts on infrastructure.

Whether investing lump sums or rebalancing we only ever move 10% of deviation from target per quarter. There are a number of reasons for this.
by magneto
Wed Jun 04, 2014 5:12 am
 
Forum: Personal Finance (Not Investing)
Topic: Some discussion from the UK [Retirement withdrawal strategy]
Replies: 113
Views: 7345

Re: Some discussion from the UK

Helford Pirate

Thanks for that insight into the structure of INXG. Never could make head nor tail of the distribution history. Most useful information.

Thanks again
by magneto
Wed Jun 04, 2014 5:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Some discussion from the UK [Retirement withdrawal strategy]
Replies: 113
Views: 7345

Re: Some discussion from the UK

I am interested in your use of UK Gilts and Indexed UK Gilts and whether you thought they will yield 4% in the next 5 years. I still have time to change my mind! We also are retired, still digesting your last post, but to clarify re gilts, we are reluctant bond investors and say the following in ou...
by magneto
Tue Jun 03, 2014 3:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Some discussion from the UK [Retirement withdrawal strategy]
Replies: 113
Views: 7345

Re: Getting there.

Once again I thought hard about how to allocate. I calculated my State and occupational defined benefits equivalent asset and put it in the inflation linked bond class. The Xray analysis across my pensions, SIPP, and ISAs was then consolidated into the following asset classes. Then I redistributed ...
by magneto
Tue Jun 03, 2014 11:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Some discussion from the UK [Retirement withdrawal strategy]
Replies: 113
Views: 7345

Re: Keeping up with the neighbors and Balance

Not neighbors but noticed colleagues who had fine cars, etc, up to their necks in debt. We lived frugally and wondered like you about whether we had the balance right. However when the well paid job came to a crunching end, we were able to retire early, (unlike those free spending colleagues) live c...
by magneto
Mon Jun 02, 2014 10:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Keeping up with the neighbors and Balance
Replies: 95
Views: 9782

Re: Is it okay to think of my stocks as bonds?

OP understand the dilemma. However because stocks have risen, is that a reason to now increase the stock % in the AA?

All Best
by magneto
Thu May 29, 2014 11:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Is it okay to think of my stocks as bonds?
Replies: 22
Views: 1980

Re: POLL: QB Aaron Rodgers disproves the EMH

Have voted other . My view is that while markets are generally efficient, they can and do swing to extremes. Think :- tulip bulbs south sea bubble florida real estate nifty fifty dot-coms sub-prime housing bubble 2008/9 stock collapse However most of the time when psychological balance and common se...
by magneto
Wed May 28, 2014 5:56 am
 
Forum: Investing - Theory, News & General
Topic: POLL: QB Aaron Rodgers disproves the EMH
Replies: 39
Views: 3535

Re: Real Estate Advice

It's listed for $94k but could rent for $1500 per month? Do those numbers sound a bit unrealistic to anybody else? I Yes. With those figures allowing for voids and some exceptionals would gross about 16% without debt. With debt say 11% before tax. It's either a bargain or we are missing some vital ...
by magneto
Sun May 25, 2014 11:05 am
 
Forum: Personal Finance (Not Investing)
Topic: Real Estate Advice
Replies: 26
Views: 2544

Re: Is it wise to keep rental property for hope of appreciat

We are very keen on Rental Real Estate (RRE) as a further asset class into which we diversify. However your situation OP does not sound good. RRE should IMHO produce a yield substantially better (in view of the hassle) than the real yield on other assets, e.g. 1.98% on stocks (S&P 500). Hanging ...
by magneto
Fri May 23, 2014 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Is it wise to keep rental property for hope of appreciation?
Replies: 12
Views: 1001
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