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Re: Wise move to move some $ to cash before bear market?

Seems OP you could certainly be a candidate for having at least some cash allocation in the AA at all times, if volatility averse. Valuation-wise Bonds do seem to be in a bubble, Stocks expensive but nowhere near the levels of say 1999, so a dollop of cash would stabilise the portfolio if bonds and ...
by magneto
Thu Mar 26, 2015 2:00 pm
 
Forum: Investing - Theory, News & General
Topic: Wise move to move some $ to cash before bear market?
Replies: 62
Views: 4509

Re: Lump sum - how to invest it now and sleep at night?

There is a school of thought that stocks may dip, but will then, regardless of valuations, always recover and head on steadily North East, so you will see the oft quoted expression 'time in the market is more important than timing the market', whatever the observer may mean by the latter. This appro...
by magneto
Wed Mar 25, 2015 12:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lump sum - how to invest it now and sleep at night?
Replies: 27
Views: 3143

Re: Foreign stocks/bonds may be less beneficial for retirees

Yes : Two good points ; difficult to argue against. However we often point out the sorry history of the investor in Japan, had they been 100% domestic stocks from 1989. Maybe the two points are good reasons to keep international lower than market caps by tilting to domestic in retirement , rather th...
by magneto
Sun Mar 22, 2015 2:02 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign stocks/bonds may be less beneficial for retirees
Replies: 26
Views: 2288

Re: Rental property vs. REIT

1. The best feature of a publicly traded REIT fund or security - you can push a button and SELL or BUY when the market is open - you eliminate the onerous transaction costs associated with real estate brokers, cities, towns, attorneys, title insurance. All of that nonsense goes away. 2. Buy a diver...
by magneto
Wed Mar 18, 2015 7:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Rental property vs. REIT
Replies: 38
Views: 3109

Re: Best investment in a deflationary scenario

CASH. No volatility, increasing purchasing power.
If they had not been bid up so far to present levels, then conventional bonds might also have suited.
by magneto
Tue Mar 17, 2015 6:45 am
 
Forum: Investing - Theory, News & General
Topic: Best investment in a deflationary scenario
Replies: 11
Views: 1294

Re: How to invest a large amount of cash?

I plan on using the funds in 6-8 years for a house , so I want to invest them mostly in stocks for the next 2-4 years, then start swapping over to CDs or something more safe. The timeline is also somewhat flexible, so I'm willing to take on some risk. All in all, though, it's definitely terrifying ...
by magneto
Sun Mar 15, 2015 2:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to invest a large amount of cash?
Replies: 10
Views: 1385

Re: "6 Lessons From the 6-Year-Old Bull Market"

Certainly we should add to our stocks on low valuations (and reduce on high). However before congratulating ourselves on how shrewd we were; a little humility perhaps to remember that without central banks' intervention the picture could have worked out oh so very differently. In the worst scenario ...
by magneto
Sun Mar 15, 2015 11:11 am
 
Forum: Investing - Theory, News & General
Topic: "6 Lessons From the 6-Year-Old Bull Market"
Replies: 11
Views: 2739

Re: Buffett and Bogle almost on the same page

Prefer to look at risk, as downside risk. Therefore in my simple view; the higher the valuation, the higher the risk. Maybe a naive view? Volatility is symmetric, equal up-side and down-side? High valuations' risk can be decidedly asymmetric. Such views of Warren Buffett's seem pragmatic, rather tha...
by magneto
Sat Mar 14, 2015 11:53 am
 
Forum: Investing - Theory, News & General
Topic: Buffett and Bogle almost on the same page
Replies: 19
Views: 2050

Re: LifeStrategy Moderate Growth vs Separate funds

That being said, VG has looked at this and found no significant advantage or disadvantage to rebalancing quarterly versus annually... Daily rebalancing rang alarm bells recently, so ran a spreadsheet on basis of 60/40 portfolio and stocks falling 50% (=% daily) over 12 months, then comparing daily ...
by magneto
Fri Mar 13, 2015 2:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: LifeStrategy Moderate Growth vs Separate funds
Replies: 38
Views: 2960

Re: U.S. Stock Valuations — Making History?

We had massively overpriced equities in 2000 and massively overpriced and over leveraged real estate in 2008. I see no such severe fundamental imbalances and vulnerabilities to our economy at this point, ones that would presage a significant recession. I'm not bailing out of equity now because of t...
by magneto
Fri Mar 13, 2015 11:39 am
 
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4509

Re: The Permanent Portfolio as an accumulation portfolio

Good post Browser.
Now let's see how the PP fans respond.
by magneto
Fri Mar 13, 2015 11:32 am
 
Forum: Investing - Theory, News & General
Topic: The Permanent Portfolio as an accumulation portfolio
Replies: 16
Views: 2031

Re: U.S. Stock Valuations — Making History?

Or we could be witnessing the demise of CAPE as a reputable measure. I never quite understood why incorporating a past [deep] earnings crash into the current price is supposed to be a good thing. 3-5 years from now, the CAPE will decline naturally even without a big adjustment of prices. I would gu...
by magneto
Thu Mar 12, 2015 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4509

Re: combo plan - pay down mortgage and invest

Sometimes overlooked is that debt/mortgage is repaid in future inflation eroded currency. The key question is what will inflation be over the repayment period. Don't ask me! If the present -0.1% is an outlier, and inflation returns to say 2%, then the figures in real terms might (looking purely at r...
by magneto
Thu Mar 12, 2015 2:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: combo plan - pay down mortgage and invest
Replies: 13
Views: 1023

Re: Thinking of buying electric shaver

Another Braun fan here. Currently using triple foil Series 3 for main shave. The snag with the triple foil is that while it removes all the longer hair, some stubble tends to remain around say mouth. To finish the job I use a cheapo Series 1 single foil which shaves much more closely and thoroughly....
by magneto
Mon Mar 09, 2015 2:10 pm
 
Forum: Personal Consumer Issues
Topic: Thinking of buying electric shaver
Replies: 29
Views: 1743

Re: How does Real Estate count in Asset Allocation

Why does he own the houses if he is not renting them out? Just find that nonsensical unless I am missing something. Real estate in illiquid, high transaction costs, and can not be rebalanced so they are hard to add to one's concept of portfolio construction and management. +1 One way of looking at ...
by magneto
Mon Mar 09, 2015 11:31 am
 
Forum: Investing - Help with Personal Investments
Topic: How does Real Estate count in Asset Allocation
Replies: 8
Views: 779

Re: What is your commodities stocks/indexes allocation?

Do you own any stocks or indexes that are specifically categorized as commodities? Yes income producing commodities fund What percentage of your goal allocation are made up of commodities? 8% of stocks Has their poor performance caused you to modify this percentage? No Does the current world situat...
by magneto
Fri Jan 23, 2015 11:16 am
 
Forum: Investing - Theory, News & General
Topic: What is your commodities stocks/indexes allocation?
Replies: 20
Views: 1073

Re: Rental investment: Cash or Mortgage?

As suggested above, buy one property (with cash), and see how it goes. When comfortable with managing property (say after twelve months) consider adding further, with or without leverage. Let us assume cost of mortgage is 4% and inflation going forward 2%. Real (after inflation) mortgage cost = 4% -...
by magneto
Wed Jan 21, 2015 6:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Rental investment: Cash or Mortgage?
Replies: 9
Views: 1111

Re: Currency hedged ETFs, worth extra expense?

For bonds; would raise a whole separate range of issues, but if we are talking purely stocks :- If volatility is your friend, providing rebalancing opportunities, then why not welcome the additional volatility provided by currency variations? EDIT : Assuming here that non-core holdings are in specif...
by magneto
Mon Jan 19, 2015 6:03 am
 
Forum: Investing - Theory, News & General
Topic: Currency hedged ETFs, worth extra expense?
Replies: 5
Views: 483

Re: Year-end financial statements?

Before I knew what an IPS was, put together at the end of each a year a Review of Investments. Contents + Asset Class Allocations; with their real yields and thoughts on possible changes in the light of the real yields noted and other factors. Also background financial information and comments on th...
by magneto
Sun Jan 18, 2015 2:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Year-end financial statements?
Replies: 5
Views: 577

Re: Anti- Market Timers still seem to endorse market-timing?

It's interesting that the consensus and evidence seems to support momentum rather than contrarianism. That's the opposite of what I would have expected. One thing missing from this discussion so far : VALUATIONS . When a momentum investor is selling, a value investor may be buying. Remember also :-...
by magneto
Fri Jan 16, 2015 5:53 am
 
Forum: Investing - Theory, News & General
Topic: Anti- Market Timers still seem to endorse market-timing??
Replies: 22
Views: 2780

Re: I see rental properties as bonds. Am I completely off b

Interesting thinking OP. As I see it, with real estate included, you have a porfolio that is part illiquid and part liquid. The liquid part IMHO is the part where stock/bonds/cash decisions arise. Cash becomes more important as an asset if holding residential real estate, as sudden calls for money c...
by magneto
Fri Jan 09, 2015 6:55 am
 
Forum: Investing - Theory, News & General
Topic: I see rental properties as bonds. Am I completely off base?
Replies: 28
Views: 2438

Re: Should you buy foreign stocks because they're cheaper?

Not sure foreign stocks are cheaper. Here are world market caps % and PEs (PE1) as of late Dec 2014, [with mkt cap% Dec 2009] :- Dec 2014 (PE) [Dec 2009] USA 58.34% (18.21) [47.77%] Japan 7.90% (21.35) [9.72%] UK 7.87% (15.70) [10.30%] Canada 3.93% [4.83%] Eurofirst 300 (20.02) France 3.63% (25.66) ...
by magneto
Wed Jan 07, 2015 11:21 am
 
Forum: Investing - Theory, News & General
Topic: Should you buy foreign stocks because they're cheaper?
Replies: 4
Views: 1077

Re: Preparing your assets for your inheritors, simplify?

When preparing IPS suggest it be split in two :- 1. Current portfolio philosopy : as simple or as complex as wished, with explanatory notes. 2. Simple 2 or 3 fund portfolio : to be used by heirs should they not wish, or not be capable of handling option 1. Option 1 could be aimed at handing over the...
by magneto
Tue Jan 06, 2015 11:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Preparing your assets for your inheritors, simplify?
Replies: 9
Views: 1533

Re: "The Most Successful Investors Leave Their Money Alone"

Some thoughts :- "SigFig finds that investors who trade frequently — defined as " investors who have a turnover amount equal to or greater than their portfolio value in a year " — actually see lower returns than their peers who are more hands-off." 1. Surely a select bunch of idi...
by magneto
Mon Jan 05, 2015 11:37 am
 
Forum: Investing - Theory, News & General
Topic: "The Most Successful Investors Leave Their Money Alone"
Replies: 30
Views: 5405

Re: Rick Ferri looking to internationalize his portfolio

Very much regret that the thread has moved into the blind alley of trying to define 'market timing'. More useful and actionable when they appear are the diverse opinions, from the many learned and talented posters here on BH, as to how portfolios might be constructed and why, esp with regard to geog...
by magneto
Sat Jan 03, 2015 5:55 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37242

Re: Rick Ferri looking to internationalize his portfolio

Some numbers re world market cap, etc :- Dec 2014 (PE) [Dec 2009] USA 58.34% (18.21) [47.77%] Japan 7.90% (21.35) [9.72%] UK 7.87% (15.70) [10.30%] Canada 3.93% [4.83%] Eurofirst 300 (20.02) France 3.63% (25.66) [5.24%] Switzerland 3.52% [3.70%] Germany 3.45% (17.34) [3.86%] Australia 2.75% (19.82) ...
by magneto
Fri Jan 02, 2015 11:48 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37242

Re: Doesn't the US already have a wealth tax in effect?

Quote from Guardian newspaper :- “According to the Credit Suisse global wealth report, a person needs just $3,650 – including the value of equity in their home – to be among the wealthiest half of world citizens. However, more than $77,000 is required to be a member of the top 10% of global wealth h...
by magneto
Fri Jan 02, 2015 6:13 am
 
Forum: Investing - Theory, News & General
Topic: Doesn't the US already have a wealth tax in effect?
Replies: 21
Views: 1636

Re: Why Does The 60/40 Work So Well?

Warren Buffet is suggesting for his heirs if recollected correctly :- 10% short term bonds 90% US Stocks (S&P500) uncertain about his rebalancing We use Dynamic Asset Allocation at present, varying stock percentage dependent on valuations, with progressive part rebalancing each month/quarter. Ho...
by magneto
Tue Dec 30, 2014 6:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Does The 60/40 Work So Well?
Replies: 31
Views: 4881

Re: Dividend Growth Investing Vs. 3F portfolio

Where is the evidence that humans are better at selecting dividend appreciation stocks (or any other kind for that matter) than computers are? You are saying that humans can somehow intervene to prevent underperformance? If so, why can't humans program a computer to perform that same intervention?[...
by magneto
Wed Dec 24, 2014 6:13 pm
 
Forum: Investing - Theory, News & General
Topic: Dividend Growth Investing Vs. 3F portfolio
Replies: 25
Views: 3145

Re: Dividend Growth Investing Vs. 3F portfolio

Dividend Aristocrat type funds suffer from the drawback that a computer is making choices with little or no human input, and the tilt to yield can as noted be accompanied by TR underperformance. No, the real "drawback" is that dividend funds have an audited record and have to suffer from ...
by magneto
Wed Dec 24, 2014 12:05 pm
 
Forum: Investing - Theory, News & General
Topic: Dividend Growth Investing Vs. 3F portfolio
Replies: 25
Views: 3145

Re: Dividend Growth Investing Vs. 3F portfolio

Picking up on some well made points :- Don't think there is a clear correct answer to this one. Stock prices are driven by sentiment perhaps as much as by fundamentals. There are times when sentiment drives stocks to fully priced (think 1999) and selling stocks makes sense. The reverse can be true a...
by magneto
Wed Dec 24, 2014 11:50 am
 
Forum: Investing - Theory, News & General
Topic: Dividend Growth Investing Vs. 3F portfolio
Replies: 25
Views: 3145

Re: Dividend Growth Investing Vs. 3F portfolio

Don't think there is a clear correct answer to this one. Stock prices are driven by sentiment perhaps as much as by fundamentals. There are times when sentiment drives stocks to fully priced (think 1999) and selling stocks makes sense. The reverse can be true at other times (think 2008/9). The inves...
by magneto
Tue Dec 23, 2014 11:36 am
 
Forum: Investing - Theory, News & General
Topic: Dividend Growth Investing Vs. 3F portfolio
Replies: 25
Views: 3145

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: 2362

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: 1371

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: 2350

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: 73
Views: 5297

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: 40
Views: 4065

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: 3333

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: 38
Views: 3450

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: 6113

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: 1092

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: 3620

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: 3620

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: 5490

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: 844

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: 2956

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: 4203

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: 4203

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: 1972

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: 4346
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