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Re: Millennial Inheritance Bloomberg

Man, I am only 55 and now the Baby Boom is on death watch by those eagerly wanting to inherit our money. The oldest boomers were born in 1946 and now are 69 years old. It is a little early to be talking about the big wealth transfer. The last big wealth transfer was from the WWII (the greatest gener...
by nedsaid
Tue Mar 03, 2015 8:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Millennial Inheritance Bloomberg
Replies: 3
Views: 541

Re: Yale Endowment Report 2014

How can they get 36.1% annualized returns over a 20-year period on private equity!? Wow that is impressive! :greedy With Warren Buffett reporting somewhere around 23% or so annualized, it would be interesting to see how they achieve 36.1% annualized over a 20 year period. Hmmm. Could it be that Yal...
by nedsaid
Tue Mar 03, 2015 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: Yale Endowment Report 2014
Replies: 42
Views: 3349

Re: 401k Loan - Bump it up, lump it, or ignore it?

If you have a 401k loan, you want to check with your HR Department. I suppose there are exceptions but the general rule is that your loan will be deemed a distribution when you leave the company. I have done taxes for years and have seen this happen. Most employers do not want the bother of servicin...
by nedsaid
Tue Mar 03, 2015 10:20 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k Loan - Bump it up, lump it, or ignore it?
Replies: 18
Views: 880

Re: 401k Loan - Bump it up, lump it, or ignore it?

Keep in mind that if you get laid off, a 401k loan is then deemed paid and you will get stuck with a tax bill that you don't want. Tax plus 10% penalty if you are under age 59 1/2. I am not a big fan of 401k loans for this reason.
by nedsaid
Mon Mar 02, 2015 1:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k Loan - Bump it up, lump it, or ignore it?
Replies: 18
Views: 880

Re: "Lessons Learned With Stocks Up 60% From the Precrash Hi

Yes, it is time in the market and not timing of the market that is the key to investors' success. I have heard this before and it is true.
by nedsaid
Mon Mar 02, 2015 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: "Lessons Learned With Stocks Up 60% From the Precrash High"
Replies: 10
Views: 2412

Re: Charley Ellis Guesting on Bob Brinker today

I have to stick up for Bob Brinker here. I was an avid listener to his program from the mid 1980's into the 2000's. He taught me about no-load mutual funds and index funds. He taught me about looking after my own interests and appointing myself as my own financial advisor. He was a big champion of d...
by nedsaid
Sun Mar 01, 2015 10:16 pm
 
Forum: Investing - Theory, News & General
Topic: Charley Ellis Guesting on Bob Brinker today
Replies: 10
Views: 1071

Re: "The Mutual Fund Observer"

Thanks Taylor. This is an excellent resource. I learned some things about my favorite mutual fund company.
by nedsaid
Sun Mar 01, 2015 7:58 pm
 
Forum: Investing - Theory, News & General
Topic: "The Mutual Fund Observer"
Replies: 4
Views: 632

Re: You and Your Dumb Money

At all times it is possible to find some idiot somewhere claiming that the "dumb money" is doing the opposite of the "smart money," where the "smart money" is defined as the money following whatever strategy said idiot has been prattling about most recently. Financial ...
by nedsaid
Sun Mar 01, 2015 7:36 pm
 
Forum: Investing - Theory, News & General
Topic: You and Your Dumb Money
Replies: 17
Views: 3181

Re: Dividends and Market Slides

linenfort wrote:
nedsaid wrote:People have to realize that the 2008-2009 financial crisis was a once in a lifetime event

Are you sure?


Well, I am 55 years old and I hadn't seen anything like it before. I don't know about anyone else but I was really, really scared.
by nedsaid
Sun Mar 01, 2015 7:23 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 51
Views: 2591

Re: Likely impact on equities of interest rate increase

This is where investors need to put their thinking caps on. Market conditions really do change. We have seen approximately 30 years of both decreasing interest rates and decreasing inflation. I am becoming very much aware of this as the EE Bonds that I bought then are coming due and I am having to c...
by nedsaid
Sun Mar 01, 2015 7:20 pm
 
Forum: Investing - Theory, News & General
Topic: Likely impact on equities of interest rate increase
Replies: 7
Views: 734

Re: You and Your Dumb Money

"Dumb money" reflects sentiment more than fundamentals. When sentiment swings in either direction to extreme levels, it has a negative correlation with future returns. Excessive optimism precedes crashes, excessive pessimism precedes secular bull markets. Most sentiment indicators now sho...
by nedsaid
Sun Mar 01, 2015 7:07 pm
 
Forum: Investing - Theory, News & General
Topic: You and Your Dumb Money
Replies: 17
Views: 3181

Re: Likely impact on equities of interest rate increase

I would expect the bond alternatives like high dividend stocks and Real Estate Investment Trusts to be hit by higher interest rates. As bond yields increase, investors would rather own the real thing than the alternative. At some point, if yields got to be high enough then bonds would be competition...
by nedsaid
Sun Mar 01, 2015 11:51 am
 
Forum: Investing - Theory, News & General
Topic: Likely impact on equities of interest rate increase
Replies: 7
Views: 734

Re: Does More Indexing Mean Less Stock Trading?

One also has to factor the effect of people trading the indexes in ETF form. For me, I buy and hold the indexes in both index fund and in ETF form. I do not trade these. So the amount of stock trading in my portfolio has decreased as I have indexed more. For the market as a whole, more indexing migh...
by nedsaid
Sun Mar 01, 2015 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Does More Indexing Mean Less Stock Trading?
Replies: 8
Views: 722

Re: Dividends and Market Slides

People have to realize that the 2008-2009 financial crisis was a once in a lifetime event and there wasn't much that worked in that environment. A lot of dividend and value stocks tend to be financial stocks and this sector was hit particularly hard. No strategy works all the time. The perception ha...
by nedsaid
Sun Mar 01, 2015 11:42 am
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 51
Views: 2591

Re: You and Your Dumb Money

Paul, I did a few things. In the second half of 2013 and in the first half of 2014, I did a program of mild rebalancing from stocks to bonds. Over time, this was about 2% of my portfolio and it kept my asset allocation about the same. In 2014, I did a bit of mild trimming of my REITs. Late in 2014, ...
by nedsaid
Sun Mar 01, 2015 11:35 am
 
Forum: Investing - Theory, News & General
Topic: You and Your Dumb Money
Replies: 17
Views: 3181

Re: active funds are beating the passive index funds

Give it about 10 years and see how those "index beating" funds have done against their benchmarks. My prediction is that 75-80% of these funds will trail their benchmark indexes after all that time. The reasons? Incorrect buy/sell decisions, transaction costs, and management fees. As Mr. B...
by nedsaid
Sun Mar 01, 2015 11:25 am
 
Forum: Investing - Theory, News & General
Topic: [Vanguard] active funds are beating the passive index funds
Replies: 13
Views: 2700

Re: Recovering Your Investment after a Loss

Thanks for post. No calculation is flawless especially when trying to predict anything and the original portfolios from thousands of investors are as varied as the number of grains of sand in the universe. In my own situation, in the run up to the tech bubble crash, I did not have a diversified por...
by nedsaid
Sun Mar 01, 2015 11:21 am
 
Forum: Investing - Theory, News & General
Topic: Recovering Your Investment after a Loss
Replies: 12
Views: 1282

Re: Illiquid Assets

I have always valued liquidity. The ability to move assets to another firm or to convert them into cash is foremost in my mind. It seems that the more illiquid investments like certain limited partnerships, non-traded REITs, Whole Life Insurance, Variable Annuities and the like were not only fee tra...
by nedsaid
Sun Mar 01, 2015 11:14 am
 
Forum: Investing - Theory, News & General
Topic: Illiquid Assets
Replies: 37
Views: 2644

Re: "2015 Annual Letter by Scott Burns and Kennon Grose"

This is a good annual letter. I also was taken very much by surprise by the strong performance of REITs in 2014. After reading many dire warnings about how overvalued REITs were way back in 2013, I trimmed a bit off the top but otherwise did nothing. It goes to show that you want to stick with asset...
by nedsaid
Sun Mar 01, 2015 11:03 am
 
Forum: Investing - Theory, News & General
Topic: "2015 Annual Letter by Scott Burns and Kennon Grose"
Replies: 8
Views: 1145

Re: International PE10 Update

In what sense are US stocks expensive and international stocks cheap? You might think we could compare PE10s for different countries directly, but down that road lies madness. We all know accounting standards vary from one country to the next, so otherwise identical companies in different countries...
by nedsaid
Sat Feb 28, 2015 8:59 pm
 
Forum: Investing - Theory, News & General
Topic: International PE10 Update
Replies: 28
Views: 2530

Re: Not "Staying the Course"

To ask a dumb question: Is it necessarily either "stay the course" or "you are a market timing wannabe-psychic who will lose in the long run"? Is there no middle ground anywhere, or caveats / exceptions? Are there ever instances in which you shouldn't stay the course? This is no...
by nedsaid
Sat Feb 28, 2015 8:38 pm
 
Forum: Investing - Theory, News & General
Topic: Not "Staying the Course"
Replies: 40
Views: 4639

Re: International increase in Target Retirement & LifeStrate

Shrug. I guess I'm just as glad I don't use these funds as that's starting to get outside my personal comfort zone. I do tend to think that Vanguard should be embarrassed to present these as funds you are expected to plan on using for a lifetime (there's no point in the glide slope if you aren't pl...
by nedsaid
Thu Feb 26, 2015 11:42 am
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 130
Views: 8921

Re: Help! Ive been put on a performance improvement plan!

Personally if it were me, I would resign my position. I was in a similar situation about 22 years ago and I didn't want to go through the humiliation. My performance improvement plan would have lasted six months and I did not like the people I worked for. So I cut my losses and resigned. If they hav...
by nedsaid
Thu Feb 26, 2015 11:33 am
 
Forum: Personal Finance (Not Investing)
Topic: Help! Ive been put on a performance improvement plan!
Replies: 66
Views: 8403

Re: Commodity investing via Energy mutual fund?

I could think of a lot dumber thinks for investors to do than buy asset classes that are depressed in price. Energy stocks and precious metal mining stocks are both depressed in price. It might be time to nibble at these and build a position over time. Energy stocks offer good prospects for real ret...
by nedsaid
Thu Feb 26, 2015 11:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Commodity investing via Energy mutual fund?
Replies: 1
Views: 176

Re: REITs

Not unusual for REITS to lose or gain 2% or more on a daily basis. They are volatile but I invest 10% of my total retired portfolio in REITS and have done so for 12 years. I think the VG REIT fund was up about 32% last year (2014) overall. This is why you don't want to go absolutely crazy on REITs....
by nedsaid
Thu Feb 26, 2015 11:03 am
 
Forum: Investing - Theory, News & General
Topic: REITs [Why did Vanguard's REIT lose 2% today?]
Replies: 33
Views: 3308

Re: Buy and Hold Forever Stocks

I do own up to being a GE shareholder. It is one of the "Four Horsemen of Underperformance" in my individual stock portfolio. The "Four Horsemen" are GE, Pfizer, Microsoft, and AIG. And yes, I kept my AIG stock after the spectacular crash and burn. Microsoft has actually been pe...
by nedsaid
Tue Feb 24, 2015 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: Buy and Hold Forever Stocks
Replies: 101
Views: 7533

Re: Variable Annunity ??

A co-worker of mine recently transfered her 401K acccount to Ameriprise Financial. The first thing the broker did was buy the RiverSource RAVA 5 Advantage variable annuity. The principal amount was $200,000.00. Is anyone familiar with this product and how it works? I'm just trying to figure out if ...
by nedsaid
Tue Feb 24, 2015 8:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Variable Annunity ??
Replies: 20
Views: 1237

Re: Buy and Hold Forever Stocks

There is nothing wrong with owning individual stocks. I still do after having purchased my first stock in 1987 or 1988. My individual issues are about 15% of my retirement portfolio. Having said that, buying and holding an index fund would be the better choice. The problem is that nothing is foreve...
by nedsaid
Tue Feb 24, 2015 7:59 pm
 
Forum: Investing - Theory, News & General
Topic: Buy and Hold Forever Stocks
Replies: 101
Views: 7533

Re: Buy and Hold Forever Stocks

There is nothing wrong with owning individual stocks. I still do after having purchased my first stock in 1987 or 1988. My individual issues are about 15% of my retirement portfolio. Having said that, buying and holding an index fund would be the better choice. The problem is that nothing is forever...
by nedsaid
Mon Feb 23, 2015 9:02 pm
 
Forum: Investing - Theory, News & General
Topic: Buy and Hold Forever Stocks
Replies: 101
Views: 7533

Re: Problems with Internet Explorer

I am coming to the conclusion that Internet Explorer is a real turkey. It has been my primary browser for many years. There are certain web pages that seem to freeze the browser for a couple of minutes while the hard drive runs like crazy. There is too much junk being imbedded into web pages and IE ...
by nedsaid
Sun Feb 22, 2015 5:30 pm
 
Forum: Personal Consumer Issues
Topic: Problems with Internet Explorer
Replies: 24
Views: 1587

Re: 21 lottery winners who blew it all-Business Insider

It goes to show a couple of things. First, money doesn't fix everything. Second, wealth is a state of mind and a set of values. I have also said that if you want to find out what people are really like to give them power and give them money. Power and money tend to bring out the best and the worst o...
by nedsaid
Sun Feb 22, 2015 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: 21 lottery winners who blew it all-Business Insider
Replies: 7
Views: 1241

Re: Sequence of Returns Risk

Leerar, when you have finished the Wiki entry on the sequence of returns issue, could you start up a thread and let us know. This is an issue that all of us will need to address at some point.
by nedsaid
Sun Feb 22, 2015 5:16 pm
 
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk
Replies: 9
Views: 734

Re: The QQQ fund?

...Sort of like a gas additive to add octane... Except that over the life of the ETF, since inception, it would have subtracted octane. Don't forget that detail. I'm not sure I can think of a good analogy. Again, this depends on the timing. If you bought QQQ at its peak in early 2000, I am not sure...
by nedsaid
Sun Feb 22, 2015 5:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: The QQQ fund?
Replies: 21
Views: 1657

Re: The QQQ fund?

My girlfriend's grandfather (who is retired and well off, owned his own law practice) and I got to talking about personal finance and we pretty much shared the same views on passive investing. However, all that being said, he did say two things on top of this: 1. Hold the QQQ fund 2. If you have to...
by nedsaid
Sun Feb 22, 2015 12:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: The QQQ fund?
Replies: 21
Views: 1657

Re: Sequence of Returns Risk

The sequence of returns risk is a difficult problem for recent retirees and near retirees to fix. Prudential insurance has introduced an excellent concept called the "Retirement Red Zone." The idea is that investors are most vulnerable to bear markets between the five years or so before re...
by nedsaid
Sun Feb 22, 2015 12:12 pm
 
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk
Replies: 9
Views: 734

Re: [What to do at] Market Top

With DOW and S&P making new highs wondering what are the visitors to this forum doing. Cash out play money ? Sell individual stock positions and reinvest in index funds ? If you are getting nervous, this is a good opportunity to rebalance your portfolio from stocks to bonds. If you have been st...
by nedsaid
Sun Feb 22, 2015 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: [What to do at] Market Top
Replies: 57
Views: 4933

Re: Ray Dalio's All-Weather Portfolio

As someone who is at the 'approaching retirement / protecting what I've earned' phase of my investing life, Ray Dalio's comments have been among the more influential. At the end of last year I shifted from `60/40 equities to my current allocation of '25% equities + 10% REITs + 7.5% gold + 2.5% high...
by nedsaid
Sun Feb 22, 2015 11:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Ray Dalio's All-Weather Portfolio
Replies: 24
Views: 7414

Re: Dave Ramsey Lashes Out at His Financial Critics

It is pretty clear to me that Dave Ramsey is pretty thin-skinned. A person with a national radio program should expect to get comments and criticism. Most of it has been fairly mild. His class was offered at my church a few years ago, I went to an introductory course. I decided not to take the full ...
by nedsaid
Thu Feb 19, 2015 11:02 am
 
Forum: Investing - Theory, News & General
Topic: Dave Ramsey Lashes Out at His Financial Critics
Replies: 89
Views: 9663

Re: The Non-Millionaire Next Door

I have gotten to where I am focused on my own financial affairs and try not to get involved in the financial affairs of others. In other words, I mind my own business. Fortunately, my close family members seem to have a good handle on their financial affairs and have done their best to secure their ...
by nedsaid
Tue Feb 17, 2015 10:41 am
 
Forum: Investing - Theory, News & General
Topic: The Non-Millionaire Next Door
Replies: 43
Views: 6237

Re: Pfau: Four Risks of Retirement Income

It really boils down to the effect of very low interest rates, these low rates are very hard on savers and retirees. The 4% withdrawal rate in retirement is hard to sustain at 2% interest rates. This also means that retirees will need to rely on a "total return" or capital gains strategy. ...
by nedsaid
Mon Feb 16, 2015 11:28 am
 
Forum: Investing - Theory, News & General
Topic: Pfau: Four Risks of Retirement Income
Replies: 31
Views: 4332

Re: Foreign Exposure or No?

I would vote strongly for foreign stock exposure in your portfolio. For one thing, you would be leaving some of the finest companies in the world out of your portfolio. Think of companies like Nestle, Toyota, Siemens, Daimler-Benz, etc. It also gives you some diversification away from the US economy...
by nedsaid
Mon Feb 16, 2015 11:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Foreign Exposure or No?
Replies: 8
Views: 417

Re: No "Value Premium" in real mutual funds

JoMoney, you are correct. None of us knows as much as we think we know and I think that includes Mr. Buffett. This is why successful investing takes a certain amount of courage. You never fully know what you think you know and even if you know a lot, you realize there are things out there you don't ...
by nedsaid
Sun Feb 15, 2015 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: No "Value Premium" in real mutual funds

It is highly likely there are types of risk that are not measured by standard deviation. For example: I will wrap up my argument with this example of GE Commercial Paper. What could be safer than AAA short term paper issued by the bluest of blue chip companies? When the financial crisis hit in 2008...
by nedsaid
Fri Feb 13, 2015 8:46 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: No "Value Premium" in real mutual funds

But when I read the actual article, the standard deviation of large value was less than large growth and small value was less than small growth. The actual statistics didn't bear out the argument. So it appeared to me you got higher return for less risk. nedsaid, thanks for all your responses. I'm ...
by nedsaid
Fri Feb 13, 2015 8:34 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: Risk vs Uncertainty

I have thought about risk in different ways. Having grown up in an era of higher inflation, I have seen risk as potential loss of purchasing power over time or what Dr. Bernstein calls "deep risk". I also see portfolio volatility as a secondary risk, something that can be waited out if giv...
by nedsaid
Thu Feb 12, 2015 1:33 pm
 
Forum: Investing - Theory, News & General
Topic: Risk vs Uncertainty
Replies: 19
Views: 1365

Re: No "Value Premium" in real mutual funds

Big John, In answer to your question, I think the small and value premiums are likely to go away for a while. The reason being is that small/value tilting is becoming more popular and as you mentioned there are more low cost vehicles being developed to capitalize on this. It is like the Yogi Berra q...
by nedsaid
Thu Feb 12, 2015 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: No "Value Premium" in real mutual funds

I found a post of mine, a "Nedsaid greatest hit", that addresses your question. Here is a link to the article that I refer to below: http://www.efficientfrontier.com/ef/999/risk.htm Dbr, I did read the efficient frontier article on the "riskiness" of value stocks compared to thei...
by nedsaid
Thu Feb 12, 2015 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: No "Value Premium" in real mutual funds

Value works great and works mainly for behavioral reasons. nedsaid, I thought from what I've read from Larry and others that small and/or value tilting was more of a risk story than a behavioral story. I'm not a fan of tilting but I can at least see the logic for tilting if its a higher risk with h...
by nedsaid
Thu Feb 12, 2015 12:40 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: SIGN PETITION FOR Jack Bogle's Presidential Medal of Fre

I just signed the petition. I was number 246. It looks like there is lots of work to do.
by nedsaid
Thu Feb 12, 2015 1:20 am
 
Forum: Local Chapters and Bogleheads Community
Topic: SIGN PETITION FOR Jack Bogle's Presidential Medal of Freedom
Replies: 168
Views: 9414

Re: No "Value Premium" in real mutual funds

Whoa. stlutz... have I got this right... Theoretically small growth stocks are supposed to be the "black hole of investing," but in real life, small growth mutual funds fail to capture the "black hole" darkness, because the worst of the small growth stocks, the holey of holeys, ...
by nedsaid
Thu Feb 12, 2015 1:10 am
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027
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