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by magneto
Thu May 28, 2015 5:11 pm
Forum: Investing - Help with Personal Investments
Topic: All cash now ($1M) - need advice on entering this lofty market
Replies: 75
Views: 6057

Re: All cash now ($1M) - need advice on entering this lofty market

I've read a lot on VG and here and know the philosophy, but we are really struggling with the market being so high right now. (Of course, that's what we were thinking when we cashed out in 2013!) Any ideas appreciated! Ed Monthly q data may be of interest :- http://www.advisorperspectives.com/dshor...
by magneto
Wed May 27, 2015 10:47 am
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 93
Views: 4962

Re: Stemikger "Volatility is far from synonymous with risk."

Trying to think of an analogy for volatility or risk. Suppose a tight-rope walker is crossing a chasm on an elastic rope. The elasticity of the rope may determine the volatility (rise and fall of the acrobat). The risk however could be the worst case fall scenario determined by the height of the rop...
by magneto
Sun May 24, 2015 4:37 pm
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 93
Views: 4962

Re: Stemikger "Volatility is far from synonymous with risk."

Interesting thread, esp the Warren Buffett quote and the thoughts from dbr. Have been continually uneasy about the risk = volatility definitions approach. Risk in this investor's book is downside risk, which is asymmetric. Volatility however is symmetric, with the upside maybe perhaps not truly risk...
by magneto
Sat May 23, 2015 1:22 pm
Forum: Investing - Help with Personal Investments
Topic: No bonds?? All Equity portfolio in 20s
Replies: 19
Views: 1129

Re: No bonds?? All Equity portfolio in 20s

Take a look at the following link :- http://www.advisorperspectives.com/dshort/updates/Q-Ratio-and-Market-Valuation.php Would this same question be asked in 2009? Has anything changed? As noted above: whether non-equities are held as bonds or cash, in the event of a stock downturn, would the portfol...
by magneto
Fri May 22, 2015 2:08 pm
Forum: Investing - Theory, News & General
Topic: Bill Gross Thinks the End Is Near
Replies: 54
Views: 6847

Re: Bill Gross Thinks the End Is Near

To say the 35 year bull market in stocks is ending now is nonsense. It didn't end when the S/P dropped to 800 in 2002 or 700 in 2009? I guess you could say we've been in a bull market since the Great Depression by that rationale. The fact is no one has any idea where the market will go in the futur...
by magneto
Mon May 18, 2015 10:39 am
Forum: Investing - Theory, News & General
Topic: Bonds - Picking up Nickels in Front of a Steamroller?
Replies: 50
Views: 5010

Re: Bonds - Picking up Nickels in Front of a Steamroller?

Had to check the date this thread started, as bond yields have been improving recently! For trend (momentum) followers bonds may, repeat may, have started the long awaited bear market, so now would not be a good time to buy. For value investors, every time bond prices fall the more interesting they ...
by magneto
Fri May 15, 2015 5:45 am
Forum: Investing - Theory, News & General
Topic: Vanguard's email "The case for a global portfolio"
Replies: 46
Views: 4126

Re: Vanguard's email "The case for a global portfolio"

To me the best argument for an increased International presence in the stock portion of the portfolios is that the United States has a shrinking share of the world stock market. If you want a truly global portfolio, your allocation to International Stocks should reflect that. One would suppose so, ...
by magneto
Mon May 11, 2015 11:03 am
Forum: Investing - Theory, News & General
Topic: Skeptical of consistent dividend growth
Replies: 18
Views: 1631

Re: Skeptical of consistent dividend growth

As retirees we do tilt very slighly to yield, adding to the portfolio for this purpose active closed end funds with very slightly above market(s) yield . These are in addition to our core trackers. Main purpose of this exercise is to provide a steady retirement income floor regardless of market(s) v...
by magneto
Thu May 07, 2015 12:59 pm
Forum: Investing - Help with Personal Investments
Topic: Bad time to buy bonds?
Replies: 14
Views: 1717

Re: Bad time to buy bonds?

Many of the soothing words about the currrent bond bubble? look at total return, rather than the capital value and yield separately as we might with stocks. Ingesting the yield back into total capital over time, if the investor is taking the income out, might be misleading? In the UK one of the most...
by magneto
Wed Apr 29, 2015 11:06 am
Forum: Investing - Help with Personal Investments
Topic: Manager consistently crushing the market [calculation error]
Replies: 27
Views: 3687

Re: Manager consistently crushing the market

The FTSE100 is in any event a curious collection of companies, unbalanced sectorially, not an ideal index to follow passively. The FTSE100 has been grim. It is up around only 38% since December 1997 compared to my mothers investment of 460% (after costs). Do you know what would be a good benchmark ...
by magneto
Wed Apr 29, 2015 10:50 am
Forum: Investing - Theory, News & General
Topic: Retirees - What would you have done differently?
Replies: 48
Views: 6575

Re: Retirees - What would you have done differently?

The biggest pay-off for us was to reduce stocks substantially as valuations soared in the late 90s and to use the proceeds to invest in a few small residential rental properties. At the time the real yields on property were 10% plus while stocks real yields 1%/2% depending on the market. It saved ou...
by magneto
Tue Apr 28, 2015 10:35 am
Forum: Investing - Help with Personal Investments
Topic: Manager consistently crushing the market [calculation error]
Replies: 27
Views: 3687

Re: Manager consistently crushing the market

There are two fund managers in the UK who deserve respect, and are widely followed :- Neil Woodford (as mentioned above) and to a lesser extent Terry Smith No doubt they will make a mistake someday, but for now seem to be steadily outperforming. The UK market may be one in which it is better to avoi...
by magneto
Mon Apr 27, 2015 10:50 am
Forum: Investing - Theory, News & General
Topic: Who's holding cash?
Replies: 86
Views: 6512

Re: Who's holding cash?

I've liquidated my retirement accounts of all the higher fee active funds my old FA had me in...so I'm sitting on 30% cash. My portfolio is at an all time high and I'm little worried about at least a small correction. I know it's not a Boglehead thing to do...to time the market. But who else out th...
by magneto
Thu Apr 23, 2015 10:52 am
Forum: Personal Consumer Issues
Topic: cleaning plastic eyeglass lenses
Replies: 30
Views: 1748

Re: cleaning plastic eyeglass lenses

Have tried all sorts of methods over years like many mentioned above. For those that have not used them, try Zeiss lens wipes as mentioned by cheese_breath above. They are quick and easy to use, and result in superbly clean lenses. Each cloth comes solvent dampened in a sealed sachet. No messing abo...
by magneto
Tue Apr 07, 2015 11:11 am
Forum: Investing - Theory, News & General
Topic: Mohamed El-Erian Has Most of His Money in Cash
Replies: 69
Views: 7950

Re: Mohamed El-Erian Has Most of His Money in Cash

Re the Japan issue, remember that PE1 in Japan (from memory) reached 80 ish? That was the irrational moment, so the subsequent Japan poor stock performance is hardly a surprise. However the point is well made about the dangers of domestic bias. While belonging to the 'valuations matter' clique, S&am...
by magneto
Sat Apr 04, 2015 5:43 am
Forum: Investing - Theory, News & General
Topic: The Detriments of Rebalancing
Replies: 67
Views: 5971

Re: The Detriments of Rebalancing

Firstly as stated frequently above, rebalancing is primarily about risk control, but if we move on to the rebalancing bonus or detriment :- Some funds using daily rebalancing rang alarm bells recently, so ran a spreadsheet on basis of 60/40 portfolio and stocks falling 50% (=% daily) over 12 months,...
by magneto
Fri Apr 03, 2015 10:58 am
Forum: Investing - Theory, News & General
Topic: Have P/E Ratios Affected Your Asset Allocation?
Replies: 52
Views: 2848

Re: Have P/E Ratios Affected Your Asset Allocation?

1. Perhaps a person will look at the past 5 years, current valuations, future expected returns, and take a more definitive step towards their well thought out retirement AA. 2. We all believe that markets are efficient and can't be timed. Dave 1. Fine. 2. "Efficient markets should be considere...
by magneto
Thu Apr 02, 2015 10:15 am
Forum: Investing - Theory, News & General
Topic: Wise move to move some $ to cash before bear market?
Replies: 116
Views: 12470

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

Without even looking at a backtest, I think a rule of thumb like expecting your stocks to drop by 50% or more at some point, remembering that worst case since 1928 in US it was much worse at about 90%, is all you need. Maybe also keeping in mind examples like Japan, when you don't see a recovery fo...
by magneto
Wed Apr 01, 2015 5:47 am
Forum: Investing - Theory, News & General
Topic: Would Robo Advisor replace index fund and passive investment
Replies: 17
Views: 1697

Re: Would Robo Advisor replace index fund and passive invest

"powerful enough to calculate everything you need to know in investment including profit impact of your tax rate, the negative impact of the frequent trading, the growth prospect and profit margin of the companies, the economic growth prospect of each countries, the political stability of each ...
by magneto
Mon Mar 30, 2015 9:54 am
Forum: Investing - Theory, News & General
Topic: Wise move to move some $ to cash before bear market?
Replies: 116
Views: 12470

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

I'm a youngish investor and the recent recession was the first one I went through. I remember in 2011ish when the market jumped up from the lows I was positive it would have to come down. I mean it just went up 50% (made up #), we had to be in for a bit of a crash. I left my paltry 401k where it wa...
by magneto
Sat Mar 28, 2015 12:00 pm
Forum: Investing - Help with Personal Investments
Topic: If you had 1 [investing] book to recommend...
Replies: 51
Views: 5211

Re: If you had 1 book to recommend...

One book stumbled across recently 'Millionaire Teacher' by Andrew Hallam. Subtitle 'The Nine Rules of Wealth You Should Have Learned in School'. Don't remember seeing it mentioned here before, could be wrong about that. Don't let the title put anyone off. This is BH mainstream 3 fund passive portfol...
by magneto
Sat Mar 28, 2015 6:03 am
Forum: Personal Finance (Not Investing)
Topic: Landlord/Tenant Credit Checks
Replies: 18
Views: 1021

Re: Landlord/Tenant Credit Checks

We had a situation recently where the wife was a high earner, but the husband had no income being still in education.
No two situations will be the same, so a little common sense may be needed.
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: 116
Views: 12470

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
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: 3546

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
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: 2492

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
Wed Mar 18, 2015 7:04 am
Forum: Personal Finance (Not Investing)
Topic: Rental property vs. REIT
Replies: 38
Views: 3367

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
Tue Mar 17, 2015 6:45 am
Forum: Investing - Theory, News & General
Topic: Best investment in a deflationary scenario
Replies: 11
Views: 1399

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
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: 1484

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 11:11 am
Forum: Investing - Theory, News & General
Topic: "6 Lessons From the 6-Year-Old Bull Market"
Replies: 11
Views: 2863

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
Sat Mar 14, 2015 11:53 am
Forum: Investing - Theory, News & General
Topic: Buffett and Bogle almost on the same page
Replies: 19
Views: 2191

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
Fri Mar 13, 2015 2:01 pm
Forum: Investing - Help with Personal Investments
Topic: LifeStrategy Moderate Growth vs Separate funds
Replies: 51
Views: 5697

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 11:39 am
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4906

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 11:32 am
Forum: Investing - Theory, News & General
Topic: The Permanent Portfolio as an accumulation portfolio
Replies: 24
Views: 3433

Re: The Permanent Portfolio as an accumulation portfolio

Good post Browser.
Now let's see how the PP fans respond.
by magneto
Thu Mar 12, 2015 2:39 pm
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4906

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 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: combo plan - pay down mortgage and invest
Replies: 13
Views: 1139

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
Mon Mar 09, 2015 2:10 pm
Forum: Personal Consumer Issues
Topic: Thinking of buying electric shaver
Replies: 29
Views: 1949

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 11:31 am
Forum: Investing - Help with Personal Investments
Topic: How does Real Estate count in Asset Allocation
Replies: 8
Views: 831

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
Fri Jan 23, 2015 11:16 am
Forum: Investing - Theory, News & General
Topic: What is your commodities stocks/indexes allocation?
Replies: 20
Views: 1126

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
Wed Jan 21, 2015 6:10 am
Forum: Investing - Help with Personal Investments
Topic: Rental investment: Cash or Mortgage?
Replies: 9
Views: 1137

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
Mon Jan 19, 2015 6:03 am
Forum: Investing - Theory, News & General
Topic: Currency hedged ETFs, worth extra expense?
Replies: 5
Views: 528

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
Sun Jan 18, 2015 2:12 pm
Forum: Investing - Help with Personal Investments
Topic: Year-end financial statements?
Replies: 5
Views: 590

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
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: 2810

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 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: 2520

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
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: 1095

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
Tue Jan 06, 2015 11:45 am
Forum: Investing - Help with Personal Investments
Topic: Preparing your assets for your inheritors, simplify?
Replies: 9
Views: 1549

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
Mon Jan 05, 2015 11:37 am
Forum: Investing - Theory, News & General
Topic: "The Most Successful Investors Leave Their Money Alone"
Replies: 30
Views: 5496

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
Sat Jan 03, 2015 5:55 am
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 357
Views: 49775

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
Fri Jan 02, 2015 11:48 am
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 357
Views: 49775

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 6:13 am
Forum: Investing - Theory, News & General
Topic: Doesn't the US already have a wealth tax in effect?
Replies: 21
Views: 1664

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
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: 4916

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...

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