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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 12:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total World Fund - Under appreciated?
Replies: 20
Views: 2153

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 12:34 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 40
Views: 2730

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 6:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Shiller CAPE Ratio
Replies: 3
Views: 467

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 6:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Would You Sell Or Continue Renting Out My Condo?
Replies: 27
Views: 2891

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 6:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Would You Sell Or Continue Renting Out My Condo?
Replies: 27
Views: 2891

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 6:20 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing question [Currency exchange rate differences]
Replies: 12
Views: 730

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 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing question [Currency exchange rate differences]
Replies: 12
Views: 730

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 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: So you think you're a Risk-taker?
Replies: 36
Views: 3798

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 11:43 am
 
Forum: Investing - Theory, News & General
Topic: VWRL a great buy right now? [Vanguard FTSE All-World ETF]
Replies: 6
Views: 696

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 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3528

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 11:44 am
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3528

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 5:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Siren song of increased stock allocation
Replies: 38
Views: 2903

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 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4098

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 5:12 am
 
Forum: Investing - Theory, News & General
Topic: Japan, 1989
Replies: 118
Views: 26011

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 11:44 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3251

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 5:52 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3251

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 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3251

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 11:38 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3251

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 11:13 am
 
Forum: Investing - Theory, News & General
Topic: Asset allocation market timing strategy inspired by John B
Replies: 43
Views: 3251

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 11:43 am
 
Forum: Investing - Theory, News & General
Topic: rebalancing conundrum/paradox/irony
Replies: 83
Views: 5183

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 11:55 am
 
Forum: Investing - Theory, News & General
Topic: What's Your Takeaway from 2014 High Valuation
Replies: 52
Views: 4257

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 11:40 am
 
Forum: Investing - Help with Personal Investments
Topic: My IPS and rebalancing
Replies: 12
Views: 1104

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 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 6597

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 11:55 am
 
Forum: Investing - Help with Personal Investments
Topic: help! where to invest about 500k
Replies: 16
Views: 1296

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 5:31 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 191
Views: 14469

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 11:32 am
 
Forum: Investing - Theory, News & General
Topic: Nikkei index 20+ years later.
Replies: 4
Views: 877

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 11:03 am
 
Forum: Investing - Theory, News & General
Topic: ETF Proliferation leads to market inefficiencies?
Replies: 22
Views: 1302

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 5:59 am
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 76
Views: 8256

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 11:23 am
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 76
Views: 8256

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 6:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Own individual stocks? Advisor recommends 20% in blue chips?
Replies: 38
Views: 2771

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 11:54 am
 
Forum: Personal Finance (Not Investing)
Topic: 78 year old retired father
Replies: 11
Views: 886

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 11:40 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 6607

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 11:50 am
 
Forum: Investing - Theory, News & General
Topic: Study: poor 5-yr U.S. returns -- overweight foreign?
Replies: 47
Views: 3321

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 5:45 am
 
Forum: Personal Consumer Issues
Topic: Sick Building Syndrome (Electrical Pollution)
Replies: 17
Views: 1389

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 6:10 am
 
Forum: Investing - Theory, News & General
Topic: Shiller P/E nearly guaranteed to be lower in 5 years
Replies: 19
Views: 3570

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 5:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Saving for a house down payment in 5-7 years...
Replies: 13
Views: 972

Re: No room on your Windows hard drive? Cleanup Update files

Many thanks for all the good information.
by magneto
Mon Aug 25, 2014 5:47 am
 
Forum: Personal Consumer Issues
Topic: No room on your Windows hard drive? Cleanup Update files
Replies: 60
Views: 4856

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

For more information on where we are with Tobin's Q (and also CAPE) see :- http://www.smithers.co.uk/page.php?id=34 Key quote :- 'Although the overvaluation of the stock market is well short of the extremes reached at the year ends of 1929 and 1999, the chart shows that it has reached the other prev...
by magneto
Sun Aug 24, 2014 11:25 am
 
Forum: Investing - Theory, News & General
Topic: Shiller P/E nearly guaranteed to be lower in 5 years
Replies: 19
Views: 3570

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

My question is, what are the other useful measuring sticks out there, and where does Shiller's eponymous tool fit in? Is it even useful at all? I'm sure some will say that I'm beating a dead horse on this forum, but respectfully, I'm trying to shine a somewhat different light on things by presentin...
by magneto
Fri Aug 22, 2014 5:22 am
 
Forum: Investing - Theory, News & General
Topic: Shiller P/E nearly guaranteed to be lower in 5 years
Replies: 19
Views: 3570

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

Thanks Larry, good article.
Hussman's views will one day be right, but nobody knows when!
Meantime we have to get on with sensible allocations.
Regards
by magneto
Wed Aug 20, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 76
Views: 8256

Re: Convincing fears on investing for now?

I tried pulling the trigger today (greater stock allocation) but I really can't stomach a 50% drop from here. I went through the 2008 stock market debacle. My stomach turned upside down and inside out, and I still get nauseated thinking back on it. I remember how long and painful the whole experien...
by magneto
Tue Aug 19, 2014 10:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Convincing fears on investing for now?
Replies: 33
Views: 3434

Re: Do you hold cash/money market outside of your emergency

Some thoughts :- The Permanent Portfolio investors employ 25% cash. The term Fixed Income covers both bonds and cash. I Bonds and EE Bonds IMHO are really cash instruments and can be regarded as cash after the first year, even if they are called 'Bonds'. It is possible in the right/wrong circumstanc...
by magneto
Thu Aug 14, 2014 11:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Do you hold cash/money market outside of your emergency fund
Replies: 31
Views: 2085

Re: Changing Asset Allocation in a bear market

So , to finally ask my question: How many people here agree with this statement: " in a severe bear market, if my portfolio goes below X dollars, I would change my desired asset allocation to be more conservative". A minority here (~10% in a recent poll) use Dynamic Asset Allocation and c...
by magneto
Fri Aug 08, 2014 6:07 am
 
Forum: Investing - Theory, News & General
Topic: Changing Asset Allocation in a bear market
Replies: 23
Views: 1684

Re: Rebalancing question

Every 3 or 4 months I would log on, see where I was at versus my targets, and adjust the percentages without ever looking at the balances. Since I hate sellling anything at a loss, I started thinking about what I would do. I figure if the market continues to drop I will hit a rebalancing band on ei...
by magneto
Wed Aug 06, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing question
Replies: 30
Views: 966

Re: What actions to take in a stock market crash?

Hi OP. Good question. One that bothered us equally. For some years now have settled on what might be called 'Equal Percentage' (of deviation) Rebalancing. With a shift in market levels, we rebalance quarterly a set percentage of the deviation from the target, in our case 10% of deviation. This means...
by magneto
Tue Aug 05, 2014 11:30 am
 
Forum: Investing - Theory, News & General
Topic: What actions to take in a stock market crash?
Replies: 85
Views: 5753

Re: global diversification works in long term

Exchange Rate Risk as noted earlier can influence the investor's decision on international weighting. This is touched on in the Vanguard paper, which is worth re -reading on the currency fluctuation issue and in similar vein, Siegel in 'Stocks for the Long Run', states :- 'It is very important to no...
by magneto
Wed Jul 30, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: global diversification works in long term
Replies: 21
Views: 1967

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: 2785

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: 2785

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: 502

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: 502
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