Search found 467 matches

by magneto
Fri Aug 28, 2015 4:36 pm
Forum: Investing - Help with Personal Investments
Topic: If stocks dropped 30% next Monday, would you rebalance?
Replies: 19
Views: 406

Re: If stocks dropped 30% next Monday, would you rebalance?

If stocks dropped 30% next Monday and closed there, would you rebalance? Would you look to see if your rebalancing bands had been triggered? Would you follow your Investing Policy Statement? Or would you not stay-the-course and do nothing about it? Question a little cloudy. However if it helps, as ...
by magneto
Fri Aug 28, 2015 10:58 am
Forum: Investing - Theory, News & General
Topic: Do "valuations" affect your asset allocation?
Replies: 25
Views: 683

Re: Do "valuations" affect your asset allocation?

So I think the key difference is that the supply of stocks and bonds are relatively fixed. Thus their price is a simple function of demand. Why should demand change? Demand should only be a function of preferences, specifically risk aversion. Why would risk aversion change over time? I don't think ...
by magneto
Fri Aug 28, 2015 10:42 am
Forum: Investing - Theory, News & General
Topic: Do "valuations" affect your asset allocation?
Replies: 25
Views: 683

Re: Do "valuations" affect your asset allocation?

In a poll about 10% of posters confirmed they adjust AA in response to valuations. If Brussel Sprouts are in short supply, but cabbages plentiful and cheap; then the value aware forego the sprouts and load up on cabbages. Why should stocks be different in regard to supply and demand pricing. If the ...
by magneto
Thu Aug 27, 2015 6:01 am
Forum: Investing - Help with Personal Investments
Topic: Was about to change from 100% equity to 80%. Now what?
Replies: 69
Views: 4735

Re: Was about to change from 100% equity to 80%. Now what?

My model was wrong. Even if earnings are stable now the future stream of earnings themselves can have deep risk. I've switched to a simpler model of looking at annual returns and standard deviations and computing the optimal portfolio given a range of utility functions. Turns out it rarely pays to ...
by magneto
Fri Aug 21, 2015 4:57 pm
Forum: Personal Finance (Not Investing)
Topic: With Stock Market heading south
Replies: 95
Views: 10763

Re: With Stock Market heading south

I designed my financial plan and portfolio for my personal situation, incorporating its great uncertainties, and assuming stocks may go down 50%+ as soon as tomorrow (well, Monday anyway). If due to market movements my stock/bond ratio gets more than 5% off target, I'll rebalance. Barring that, I'l...
by magneto
Fri Aug 21, 2015 10:41 am
Forum: Investing - Theory, News & General
Topic: anyone treating this as an RBD (really bad day)
Replies: 95
Views: 9683

Re: anyone treating this as an RBD (really bad day)

More a RBW than RBD.
Adding to Asia/Pacific and Commodities Income.
US and Developed International watching.
This could be a long haul, but what do I know. :happy

http://www.smithers.co.uk/page.php?id=34
by magneto
Wed Aug 19, 2015 11:02 am
Forum: Investing - Theory, News & General
Topic: Bogle: retirees should focus on dividends
Replies: 137
Views: 11455

Re: Bogle: retirees should focus on dividends

JB's comment unexpected. Sure we will here much more on these comments. :shock: Just to remind readers that for us retirees :- 1. Dividends come along almost regularly, but the other half of total return, the capital gains do not arrive on a regular calendar basis. This is unfortunate in retirement....
by magneto
Tue Aug 18, 2015 10:52 am
Forum: Investing - Theory, News & General
Topic: The folly of the dividend yield
Replies: 73
Views: 6269

Re: The folly of the dividend yield

While Hussman is probably not a popular source here, his comments this week impact on our discussions re dividends versus buy-backs :- http://hussmanfunds.com/wmc/wmc150817.htm As mentioned previously, those who prefer buy-backs to dividends will need to keep an eye on how changes in debt is impact...
by magneto
Tue Aug 18, 2015 5:10 am
Forum: Investing - Theory, News & General
Topic: The folly of the dividend yield
Replies: 73
Views: 6269

Re: The folly of the dividend yield

While Hussman is probably not a popular source here, his comments this week impact on our discussions re dividends versus buy-backs :- http://hussmanfunds.com/wmc/wmc150817.htm As mentioned previously, those who prefer buy-backs to dividends will need to keep an eye on how changes in debt is impacti...
by magneto
Sat Aug 15, 2015 2:04 pm
Forum: Investing - Theory, News & General
Topic: Short-Term Investment Grade Corporate Bond Funds
Replies: 10
Views: 1434

Short-Term Investment Grade Corporate Bond Funds

Cannot find any mention of this asset class in first BH search. Found Grog's Tip #14 'Avoid Long-Term Corporate Bonds' and subsequent discussion some help. A quote from Grok :- but I am not really in agreement with investing in a "total corporate bond" fund. I basically agree with jginseat...
by magneto
Fri Aug 14, 2015 5:48 am
Forum: Investing - Theory, News & General
Topic: Getting over the hurdle - Two statements conflict
Replies: 30
Views: 1840

Re: Getting over the hurdle - Two statements conflict

The present bull market is certainly long in the tooth. To try to guess when and how the next bear market will emerge is unlikely to be successful. What we do know are the valuations :- http://www.smithers.co.uk/page.php?id=34 As investors it may be worth remembering that we have perhaps three choic...
by magneto
Wed Aug 12, 2015 10:45 am
Forum: Investing - Theory, News & General
Topic: What is going on out there?
Replies: 43
Views: 6261

Re: What is going on out there?

The stock market should reflect the performance of the corporations it represents instead of rumors and manipulations. Since when? Markets are mostly populated by human-beings with emotions. Fortunately most here would be moving in the opposite direction to those day to day gyrations and then only ...
by magneto
Fri Aug 07, 2015 11:13 am
Forum: Investing - Theory, News & General
Topic: So do the uber wealthy invest money the same way we do?
Replies: 95
Views: 9350

Re: So do the uber wealthy invest money the same way we do?

The super wealthy can be 100% cash and still not be able to spend it all in their lifetime. If you still want some ROI and are willing to take some risk... 25% stocks/25% bonds/25% real estate/25% cash would seem reasonable. +1 The simple 'don't know portfolio', which would be a good starting place...
by magneto
Thu Aug 06, 2015 1:11 pm
Forum: Investing - Theory, News & General
Topic: The folly of the dividend yield
Replies: 73
Views: 6269

Re: The folly of the dividend yield

Not "the end". Some companies choose to share those earnings with the company owners and pay a dividend. Some companies choose to share those earnings with the company owners and repurchase shares. Mathematically the two are identical. That narrows the discussion to simply buy-backs v div...
by magneto
Thu Aug 06, 2015 5:14 am
Forum: Investing - Theory, News & General
Topic: The folly of the dividend yield
Replies: 73
Views: 6269

Re: The folly of the dividend yield

Let's imagine an idealized company that consists of $100million in cash. There are zero company expenses, and the company has no activity it partakes in. It simply holds $100million in cash at the bank . Suggest this is an unusual example! The example is more akin to a bank account either paying in...
by magneto
Wed Aug 05, 2015 10:47 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Solutions [Return volatility - how long to decide on long-term results?]
Replies: 17
Views: 1003

Re: Portfolio Solutions [Return volatility - how long to decide on long-term results?]

I am now retired and transferred my Retirement Funds to Portfolio Solutions to manage. My plans were to reduce my risk while getting lower returns and allowing me the freedom to not worry about retirement income. I debated between Portfolio Solutions vs Vanguard. ...... This is my only Nest Egg to ...
by magneto
Mon Aug 03, 2015 11:03 am
Forum: Investing - Theory, News & General
Topic: [How often do you check on your investments?]
Replies: 43
Views: 1928

Re: [How often do you check on your investments?]

Dependant on how the overall markets are moving.
Big changes awake interest and investigation.
Small changes inspire inactivity.
by magneto
Sun Aug 02, 2015 5:57 am
Forum: Personal Finance (Not Investing)
Topic: Majority of units in my condo assoc are owned by investors. Is this bad?
Replies: 21
Views: 2149

Re: Majority of units in my condo assoc are owned by investors. Is this bad?

As a real estate investor with many units, two of which are in condominiums, this thread is almost offensive. I love how the assumption is that renters will quickly turn a condo into a roach infested crack house, yet owner-occupied units will remain perfect little Utopias. Yes, some banks may balk ...
by magneto
Sat Aug 01, 2015 1:07 pm
Forum: Investing - Theory, News & General
Topic: Dickens: "a mere United States security..."
Replies: 5
Views: 848

Re: Dickens: "a mere United States security..."

In other words, in 1843, the United States was regarded as so shaky that the way to say something was worthless was to call it "a United States' security!"

Enron? :)

plus ca change
by magneto
Sat Aug 01, 2015 11:05 am
Forum: Investing - Theory, News & General
Topic: Ready to Give Up on Emerging Market Stocks?
Replies: 47
Views: 4844

Re: Ready to Give Up on Emerging Market Stocks?

Emerging markets may \ do not have the economic governance needed to support the investors interests. At some valuation or safety margin, this will be factored into price. As some have observed EM covers a very wide band of differing countries, some with less than scrupulous governance some not. US...
by magneto
Fri Jul 31, 2015 2:32 am
Forum: Investing - Theory, News & General
Topic: Are equities really as risky as anyone thinks?
Replies: 271
Views: 14059

Re: Are equities really as risky as anyone thinks?

We have talked about US post 1929, Japan post 1989, as outliers when considering 100% stocks. However another well known stock market index (UK FTSE100) has yet to surpass and hold above it's Dec 1999 peak. For an investor with 100% stocks in that market (spending the dividends) his capital would no...
by magneto
Wed Jul 29, 2015 10:13 am
Forum: Investing - Theory, News & General
Topic: Are equities really as risky as anyone thinks?
Replies: 271
Views: 14059

Re: Are equities really as risky as anyone thinks?

Backtesting whole periods from history shows that 100% TSM always beats any portfolio with any TBM if you wait long enough (generally 25 years).

Suggest premise is wide of mark.

Try using following link using a PE10 method :-

http://www.portfoliovisualizer.com/test ... ming-model
by magneto
Tue Jul 28, 2015 11:02 am
Forum: Investing - Help with Personal Investments
Topic: Do I dump the Vanguard energy Fund in my 401k
Replies: 32
Views: 2973

Re: Do I dump the Vanguard energy Fund in my 401k

Have had similar experiences. As others have pointed out price anchoring can prevent an investor taking his mistakes on the chin, and this was an unduly heavy bet; and means the following should be taken with a heavy pinch of salt. Here is the alternative approach. 1. Let's say a holding starts out ...
by magneto
Mon Jul 27, 2015 10:24 am
Forum: Personal Consumer Issues
Topic: Durability of consumer goods
Replies: 44
Views: 2562

Re: Durability of consumer goods

I agree furniture can last forever. At least in the UK antique (Victorian) furniture has fallen out of fashion. Things that would have cost you £1000 20 years ago can now be had for £200 at an auction house. +1 Has there been a BH thread re antique furniture? Worthwhile money saving/preservation id...
by magneto
Sat Jul 25, 2015 1:25 pm
Forum: Investing - Theory, News & General
Topic: [Original Research] The Failure of PE Market Timing Models
Replies: 50
Views: 3671

Re: [Original Research] The Failure of PE Market Timing Models

What I'm suggesting is, rather than declaring failure and giving up after two days, try to understand why you system is not working and see if you can fix it. The first guy who invented the wheel probably made a square wheel and it didn't work. If he had given up, we'd still be dragging things arou...
by magneto
Sat Jul 25, 2015 1:10 pm
Forum: Investing - Help with Personal Investments
Topic: Rental with heavy appreciation and decent cash-flow – sell or keep?
Replies: 14
Views: 1415

Re: Rental with heavy appreciation and decent cash-flow – sell or keep?

The answer may depend to some extent on what the rest of the OPs portfolio looks like.
by magneto
Fri Jul 24, 2015 9:36 am
Forum: Investing - Theory, News & General
Topic: Boglehead portfolio in a negative interest rate environment
Replies: 18
Views: 2071

Re: Boglehead portfolio in a negative interest rate environment

Do you mean nominal or real interest rates? PJW Nominal. $100,000 in physical cash, in a fireproof safe, after one year, will still be $100,000. But less inflation in purchasing power, if we determine real yield as the critical measure for investors. So we have been there, done that. Leaning toward...
by magneto
Fri Jul 24, 2015 2:46 am
Forum: Investing - Theory, News & General
Topic: [Original Research] The Failure of PE Market Timing Models
Replies: 50
Views: 3671

Re: [Original Research] The Failure of PE Market Timing Models

Can you give me your allocation then? Because I haven't seen a winning tactical allocation yet. People talk about how they use valuations to "time the market" but my series of experiments failed. The only "winners" I have seen tend to cook the data and come up with too many infl...
by magneto
Thu Jul 23, 2015 12:45 pm
Forum: Investing - Theory, News & General
Topic: [Original Research] The Failure of PE Market Timing Models
Replies: 50
Views: 3671

Re: [Original Research] The Failure of PE Market Timing Models

I think the difference between monthly/annual rebalancing is slight and just an artifact of data. Annual rebalancing I guess accidentally captures a "momentum" factor which I am not really interested in. Think we have to profoundly differ on this one. Don't dismiss bands from the calculat...
by magneto
Thu Jul 23, 2015 10:58 am
Forum: Investing - Theory, News & General
Topic: [Original Research] The Failure of PE Market Timing Models
Replies: 50
Views: 3671

Re: [Original Research] The Failure of PE Market Timing Models

Monthly rebalancing, matching the frequency of the data. Maybe over frenetic. Momentum benefits will probably be lost. Wm Bernstein has suggested for an investor using time; rebalancing every two to three years!!! Bands are perhaps a better compromise, likely to give a more thoughtful comparison of...
by magneto
Thu Jul 23, 2015 1:56 am
Forum: Investing - Theory, News & General
Topic: [Original Research] The Failure of PE Market Timing Models
Replies: 50
Views: 3671

Re: [Original Research] The Failure of PE Market Timing Models

Without wading through the spreadsheeet, what are the rebalancing/reallocation techniques employed ? Monthly rebalancing, matching the frequency of the data. Maybe over frenetic. Momentum benefits will probably be lost. Wm Bernstein has suggested for an investor using time; rebalancing every two to...
by magneto
Thu Jul 23, 2015 1:48 am
Forum: Investing - Theory, News & General
Topic: Does how often you check your portfolio correlate with returns
Replies: 35
Views: 2709

Re: Does how often you check your portfolio correlate with returns

This fits in my usual "who cares" category. This is very similar to my disdain of the "how are your returns this year" threads. Both make me wonder if folks, even on this site, really understand passive investing. +1 "Based on the historical evidence for the S&P 500 Ind...
by magneto
Wed Jul 22, 2015 10:08 am
Forum: Investing - Theory, News & General
Topic: [Original Research] The Failure of PE Market Timing Models
Replies: 50
Views: 3671

Re: [Original Research] The Failure of PE Market Timing Models

Without wading through the spreadsheeet, what are the rebalancing/reallocation techniques employed ?

The success of Constant Ratio v Variable Ratio will to some degree hinge on the technique chosen. Our old friends momentum and mean reversion coming into play.
by magneto
Mon Jul 20, 2015 10:50 am
Forum: Investing - Help with Personal Investments
Topic: How to Hedge Currency Risk When Planning to Retire Abroad?
Replies: 10
Views: 825

Re: How to Hedge Currency Risk When Planning to Retire Abroad?

I live and work in the US and all my assets are denominated in USD. I plan to retire abroad in New Zealand in 26 years. Personal circumstances and ambitions can change a lot in 26 years. Only suggestion; use an unhedged global fund as the portfolio core stock, to cover for the eventuality of a seri...
by magneto
Mon Jul 20, 2015 9:46 am
Forum: Investing - Theory, News & General
Topic: The "No Bonds" portfolio
Replies: 80
Views: 11406

Re: The "No Bonds" portfolio

Some are recommending that investors consider getting rid of bond funds/etfs completely in their portfolios. About the only reason to hold bond funds these days is as a possible hedge against a significant stock market selloff, but that's an insurance argument and not an investment return argument ...
by magneto
Wed Jul 15, 2015 5:28 pm
Forum: Investing - Theory, News & General
Topic: Dividend stock investing or Total Return?
Replies: 41
Views: 2749

Re: Dividend stock investing or Total Return?

The argument mostly put forward is that you shouldn’t go for income per se at all, but rather you should go for total return from broad market cap index funds and sell down your holdings to generate income as required. Nothing new to add here, but to remind readers that dividends come along almost ...
by magneto
Tue Jul 14, 2015 2:29 pm
Forum: Investing - Theory, News & General
Topic: Dividend stock investing or Total Return?
Replies: 41
Views: 2749

Re: Dividend stock investing or Total Return?

The argument mostly put forward is that you shouldn’t go for income per se at all, but rather you should go for total return from broad market cap index funds and sell down your holdings to generate income as required. Nothing new to add here, but to remind readers that dividends come along almost r...
by magneto
Mon Jul 13, 2015 6:18 am
Forum: Investing - Theory, News & General
Topic: Wade Pfau on Asset Allocation Using PE10
Replies: 83
Views: 6146

Re: Wade Pfau on Asset Allocation Using PE10

Great thread. Well done all contributors. 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 o...
by magneto
Fri Jul 03, 2015 1:42 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based asset allocation (as of 7-3-15)
Replies: 11
Views: 1305

Re: Valuation-based asset allocation (as of 7-3-15)

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
Fri Jul 03, 2015 1:08 pm
Forum: Investing - Theory, News & General
Topic: Risk of Rebalancing
Replies: 69
Views: 5910

Re: Risk of Rebalancing

This rebalancing thing is quite simple really. :) To maximise a rebalancing bonus (ignore risk for a moment), the investor needs to buy an asset class at the bottom and sell at the top. :) A half wave length!!! Frequent rebalancing works splendidly in rippling sideways markets (short half wave lengt...
by magneto
Fri Jul 03, 2015 5:36 am
Forum: Investing - Help with Personal Investments
Topic: Is a large emergency fund needed after 59 1/2
Replies: 25
Views: 3459

Re: Is a large emergency fund needed after 59 1/2

Just to add to the above when considering cash versus bonds, saw this today :- http://www.trustnet.com/News/613577/burvill-this-bond-market-is-as-sinister-as-ever/ The author is as uncertain as are all the rest of us, but IMHO the bond market is an accident waiting to happen, but have no idea how or...
by magneto
Thu Jul 02, 2015 5:25 am
Forum: Investing - Help with Personal Investments
Topic: Is a large emergency fund needed after 59 1/2
Replies: 25
Views: 3459

Re: Is a large emergency fund needed after 59 1/2

I am in a similar situation but the taxable account in my portfolio includes a cash position. I think of that as a combination emergency fund and "dry powder." I should have used past tense because since last fall I had some big unexpected expenses that ate up most of that dry powder. I g...
by magneto
Fri Jun 26, 2015 10:58 am
Forum: Investing - Theory, News & General
Topic: Decumulation Phase and BH principles
Replies: 49
Views: 6175

Re: Decumulation Phase and BH principles

Haven't noticed sequence of returns risk mentioned yet; which may be the #1 problem for a retiree. Seem to recall Wade Pfau has published papers on this issue. We retired in 92, and for us key elements in our investment philosophy from then on were/are :- 1. Natural Real Yields on competing asset cl...
by magneto
Tue Jun 23, 2015 7:32 am
Forum: Personal Finance (Not Investing)
Topic: Landlording Tips
Replies: 33
Views: 4992

Re: Landlording Tips

(4) Pricing: I like to price the units at $100 below what I think is market value. I realize I may be leaving "money on the table" but I rather get a fair number of applications and minimize vacancies. More importantly, I want to get my pick of the tenant pool. I rather have a great tenan...
by magneto
Sun Jun 14, 2015 2:41 am
Forum: Investing - Theory, News & General
Topic: Rebalancing
Replies: 41
Views: 4090

Re: Rebalancing

It's quite simple really. To maximise a rebalancing bonus (ignore risk for a moment), the investor needs to buy an asset class at the bottom and sell at the top. :happy A half wave length. Daily rebalancing works splendidly in rippling sideways markets (short half wave lengths) but can be a problem ...
by magneto
Sun Jun 14, 2015 2:23 am
Forum: Investing - Theory, News & General
Topic: Set It and Forget It Works!
Replies: 37
Views: 8017

Re: Set It and Forget It Works!

This intrigues me, for as far as I can establish Rick has always fallen into the camp of never looking at valuations when deciding on asset allocations? Unlike Graham, Larry, Shiller, Bernstein, who will at least to some degree under certain circumstances. "By 1999, we had all the money we need...
by magneto
Mon Jun 08, 2015 5:54 am
Forum: Investing - Theory, News & General
Topic: Increasing risk during a market crash/correction.
Replies: 37
Views: 3571

Re: Increasing risk during a market crash/correction.

An argument could be made that when the market tanks risk is actually lower, not higher. If you simply rebalance you will be buying stocks at lower prices. Paul +1 When markets tank risk may be lower in absolute if not in volatility terms, and the expected return a little higher. Rebalancing to a f...
by magneto
Wed Jun 03, 2015 12:53 pm
Forum: Investing - Theory, News & General
Topic: "How to React When the Bear's Hibernation Ends"
Replies: 48
Views: 7674

Re: Sleep like a baby.

Taylor Larimore wrote:Bogleheads:

My asset allocation is simple: Money I cannot afford to lose is in bonds and cash. The rest is in stocks.

I sleep like a baby.

Best wishes.
Taylor


+1
Happy dreams :happy

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