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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: 778

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: 18
Views: 1501

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: 3343

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: 3343

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: 1805

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: 3619

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: 19
Views: 1705

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: 1497

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: 4416

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: 1205

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: 6004

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: 3742

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: 3343

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: 3343

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: 2871

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: 5928

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: 498

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: 3324

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: 3324

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: 765

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: 765

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: 4024

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: 704

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: 3549

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: 3549

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: 2950

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: 4204

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: 26216

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: 3398

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: 3398

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: 3398

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: 3398

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: 3398

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: 5355

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: 4338

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: 1127

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: 6669

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: 1328

Re: The dangerous practice of rebalancing...

The key sentence in the article is perhaps :- "However, if you think through the strategic ramifications of portfolio rebalancing for middle and upper-middle income families approaching retirement, it just doesn't make a lot of sense." That narrows down the field somewhat as to which inves...
by magneto
Sat Sep 13, 2014 4:31 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 191
Views: 14775

Re: Nikkei index 20+ years later.

-I know we are not heavily invested in Japan but if something similar happened in US what would re-balancing into a falling market accomplish? OP Something similar tho not so protracted did happen in US. 1929 et al. Taylor sometimes comments here on his family's experience, which is instructive. If ...
by magneto
Fri Sep 12, 2014 10:32 am
 
Forum: Investing - Theory, News & General
Topic: Nikkei index 20+ years later.
Replies: 4
Views: 888

Re: ETF Proliferation leads to market inefficiencies?

A gold stock can have a significant price move based not on changes to its fundamentals or a corporate event but rather shifts in sentiment toward gold that is compounded by fund flows. Fundamentals and Sentiment both drive asset prices. With gold are there any fundamentals? The ETF is just another...
by magneto
Tue Sep 09, 2014 10:03 am
 
Forum: Investing - Theory, News & General
Topic: ETF Proliferation leads to market inefficiencies?
Replies: 22
Views: 1365

Re: John Hussman, smart guy, should you listen to his foreca

magneto Of course the market can be irrational at times. The problem is knowing when that occurs. To me only time we KNEW that was in late 90s when the PEs of Tech stocks got to levels that were possible to justify for single stocks but not entire sectors. And the E/P of market was below real yield...
by magneto
Tue Sep 09, 2014 4:59 am
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 76
Views: 8420

Re: John Hussman, smart guy, should you listen to his foreca

I don't have any knock against Hussman at all. In fact, I think he is one of very few credible commentators out there who actually know something. He's probably even right about the market being screamingly overvalued because of all the bogus financial engineering that's been going on since 2009. A...
by magneto
Mon Sep 08, 2014 10:23 am
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 76
Views: 8420

Re: Own individual stocks? Advisor recommends 20% in blue ch

I have an advisor who is recommending keeping 15%-20% of our portfolio in quality blue chip individual stocks. Here is his reasoning: Index investing is great for accumulating wealth; however, you are fully invested at all times. Years when the market is overpriced or declining, no adjustment is ma...
by magneto
Fri Sep 05, 2014 5:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Own individual stocks? Advisor recommends 20% in blue chips?
Replies: 38
Views: 2884

Re: 78 year old retired father

His goals are: - Invest as much as he can with the 180k windfall to ensure a higher rate of return than he's getting in cash. - Make improvements to his home which he will gift to his predecessor (me). - Gift (after death) as much wealth as he can to his only child (me) and grand-child. I'd like to...
by magneto
Wed Sep 03, 2014 10:54 am
 
Forum: Personal Finance (Not Investing)
Topic: 78 year old retired father
Replies: 11
Views: 893

E

If you believe in warning signs, the dot-com crash had those warning signs blaring starting in 1995 or so. The entire chart you posted is therefore meaningless, since you were mostly in bonds for that period. The truth is that there are always warning signs; it's only in retrospect that we know whi...
by magneto
Tue Sep 02, 2014 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 6773

Re: Study: poor 5-yr U.S. returns -- overweight foreign?

Comparing CAPE for different counties is not the full story. As previous poster pointed out prospective CAPE/PE would be more useful. We need to know the growth contribution to the future total return. US may seem expensive, but superior growth may justify. This is not a prediction. The expression M...
by magneto
Fri Aug 29, 2014 10:50 am
 
Forum: Investing - Theory, News & General
Topic: Study: poor 5-yr U.S. returns -- overweight foreign?
Replies: 47
Views: 3412

Re: Sick Building Syndrome (Electrical Pollution)

Very dubious about electrical sensitivity. Other possible options :- Unkind lighting New furniture and fittings 'gassing off'. Solution keep windows open as much as possible. Can't see any obvious financial solution, other than replace all new furniture with old! but if the building itself is 'gassi...
by magneto
Thu Aug 28, 2014 4:45 am
 
Forum: Personal Consumer Issues
Topic: Sick Building Syndrome (Electrical Pollution)
Replies: 17
Views: 1402

Re: Shiller P/E nearly guaranteed to be lower in 5 years

Fact is, even if the CAPE is really high nowadays, the earnings yield (1/PE10) remains significantly higher than the (inflation-adjusted) 10-years treasury rate, which is a good yardstick of corresponding bonds yield. Here we are, with two renowned metrics (CAPE, equity/bonds premium) providing a v...
by magneto
Wed Aug 27, 2014 5:10 am
 
Forum: Investing - Theory, News & General
Topic: Shiller P/E nearly guaranteed to be lower in 5 years
Replies: 19
Views: 3615

Re: Saving for a house down payment in 5-7 years...

Cash gets my vote. Take a look at charts for stocks and bonds over the last 15 years, and ask which is the more likely looking ahead over 5-7 years, a surge in value or a loss in value? Valuations are stretched and far from historically attractive for stocks and bonds. The best case could be zero ga...
by magneto
Wed Aug 27, 2014 4:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Saving for a house down payment in 5-7 years...
Replies: 13
Views: 978
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