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Re: What to do in a market correction

10%+ sell offs average one every 1.5 years with lots of variation:

http://www.businessinsider.com/history- ... ns-2013-12

I like it best when I don't even notice these events.
by tadamsmar
Tue Jul 22, 2014 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 2943

Re: Can it be wrong to be too risk averse?

I am not sure it's proper to say that someone is too risk averse in the sense that they are leaving too much money on the table. It is possible to be to averse to the risk of stock fluctuations and not sufficiently averse to the specter of ending up with too little savings for retirement. That could...
by tadamsmar
Tue Jul 22, 2014 10:37 am
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 48
Views: 1999

Re: What to do in a market correction

What, exactly, is a market correction? The traditional definition is a drop > 10% but <20% (which would be a "bear market"). The drop in 2011 was interesting because it was a "bear market" if you look at intraday prices but only a "correction" if you went by close pric...
by tadamsmar
Mon Jul 21, 2014 8:29 pm
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 2943

Re: New Edition of Random Walk in January 2015

What is the Boglehead way to buy dividend growth stocks, EM bonds and tax-exempt bonds?
by tadamsmar
Mon Jul 21, 2014 1:17 pm
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: New Edition of Random Walk in January 2015

I found a November 2013 interview where he suggests an update in the AA for those in their 50s. From recent editions of Random Walk: Cash: 5 percent Bonds: 27.5 percent REITs: 12.5 percent Stocks: 55 percent To: Cash: 5 percent Dividend growth stocks, emerging market bonds and tax-exempt bonds: 27.5...
by tadamsmar
Mon Jul 21, 2014 1:11 pm
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: Honda Fit, Civic

I suspect the Fit is significantly better in the snow merely in virtue of the law that requires all cars beginning in 2012 to have stability control, traction control, and ABS brakes. However, the most important addition to any new car is WINTER TIRES. I cannot stress this enough. Get winter tires ...
by tadamsmar
Fri Jul 18, 2014 3:26 pm
 
Forum: Personal Consumer Issues
Topic: Honda Fit, Civic
Replies: 32
Views: 2944

Re: Who else hates choosing a car?

It would be a mistake to buy a 2005 Honda Pilot without ESC. Vehicles without ESC have a 50% higher fatality rate, worse for an SUV. ESC is optional on the 2005 Honda Pilot

See this on getting a used car with ESC:

http://epicurusgarden.blogspot.com/2011 ... h-esc.html
by tadamsmar
Fri Jul 18, 2014 11:58 am
 
Forum: Personal Consumer Issues
Topic: Who else hates choosing a car?
Replies: 75
Views: 6264

Re: Options/guidance for a lazy person to be fit

You might want to try the Tiny Habits concept to help you get going:

http://www.success.com/article/tiny-habits
by tadamsmar
Fri Jul 18, 2014 11:21 am
 
Forum: Personal Consumer Issues
Topic: Options/guidance for a lazy person to be fit
Replies: 71
Views: 4470

Re: TSP G as treasury holding

I try use the TSP L funds for guidance. Portfolios on the efficient frontier hold some F, but a relatively small amount: You can use the slider buttons here to see the allocation for a range of risk levels: https://www.tsp.gov/investmentfunds/lfundsheet/fundPerformance_L2050.shtml But, I don't know ...
by tadamsmar
Fri Jul 18, 2014 10:22 am
 
Forum: Investing - Help with Personal Investments
Topic: TSP G as treasury holding
Replies: 10
Views: 747

Re: Is this a Vanguard quirk? [Adding beneficiaries to accou

In terms of this being a Vanguard quirk, The Federal TSP is even more restrictive in that I customize beneficiaries with my Vanguard account in ways that I cannot with the TSP. With the TSP I really think it's a matter of the fact that have a captive audience and are not competing with other options...
by tadamsmar
Fri Jul 18, 2014 8:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Is this a Vanguard quirk? [Adding beneficiaries to account]
Replies: 20
Views: 2310

Re: New Edition of Random Walk in January 2015

... but let's not forget what a bolt from the blue the original book was. Yes, I agree, the first edition was an epiphany. That is why I felt so betrayed when Malkiel backed-off his random walk stance in later editions. agree. but follow the money i guess. i'm sure he's been well-paid for his touti...
by tadamsmar
Thu Jul 17, 2014 10:48 am
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: New Edition of Random Walk in January 2015

... but let's not forget what a bolt from the blue the original book was. Yes, I agree, the first edition was an epiphany. That is why I felt so betrayed when Malkiel backed-off his random walk stance in later editions. Did he have the stuff about how he was investing in closed-end funds that were ...
by tadamsmar
Thu Jul 17, 2014 10:41 am
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: New Edition of Random Walk in January 2015

Sometime in the 1990's he introduced the Life-Cycle where is gave pretty detailed AA schedule advice. When I became a Boglehead in 2000, I figured that I would pick an AA from a respected source and stick with it. Never occurred to me that the source would keep changing the AA schedule. But is kind ...
by tadamsmar
Thu Jul 17, 2014 9:11 am
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: New Edition of Random Walk in January 2015

Malkiel meant and said 50% Developed Market Index, 50% EM, IIRC (be kind of sad if I don't recall correctly, since I am doing it!). But I do it more like you say, nisiprius, using Total International instead of Developed and adjusting for the EM in Total International, because the overall ER is a bi...
by tadamsmar
Thu Jul 17, 2014 8:04 am
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: New Edition of Random Walk in January 2015

The last one I bought was in 2007, I guess it's probably time to buy this one. Here are my predictions. Mark my words. Let's try to remember to revisit them when the book is out and see how well I did. If I'm unlucky, someone with the 2012 edition may be able to tell me that I am ALREADY wrong. a) ...
by tadamsmar
Wed Jul 16, 2014 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: Is this a Vanguard quirk?

I know that Vanguard tends to limit the options for beneficiaries. My guess is that it keeps costs down by avoiding complex cases. But I don't know about this case. That would be my guess, too. It's very rare that both owners die at the same exact time. While certain legal documents can spell out w...
by tadamsmar
Wed Jul 16, 2014 3:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this a Vanguard quirk? [Adding beneficiaries to account]
Replies: 20
Views: 2310

Re: Is this a Vanguard quirk?

So my questions for the forum: (1) What might be Vanguard's rationale for this? (2) Has anyone else encountered this situation (either with Vanguard or another mutual fund firm)? (3) Other than going the "will"-route, is there an easy and quick workaround? (Estate planning will take some ...
by tadamsmar
Wed Jul 16, 2014 3:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this a Vanguard quirk? [Adding beneficiaries to account]
Replies: 20
Views: 2310

Re: Is this a Vanguard quirk?

I know that Vanguard tends to limit the options for beneficiaries. My guess is that it keeps costs down by avoiding complex cases.

But I don't know about this case.
by tadamsmar
Wed Jul 16, 2014 2:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this a Vanguard quirk? [Adding beneficiaries to account]
Replies: 20
Views: 2310

Re: New Edition of Random Walk in January 2015

Maybe he will fuss around with bonds this time, that seems to be the AA change de jure. But we have access to the TSP G Fund, so my bond allocation does not exactly follow the book's anyway.
by tadamsmar
Wed Jul 16, 2014 2:37 pm
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

New Edition of Random Walk in January 2015

New edition is coming: http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393246116%3FSubscriptionId%3D1E2MCMDX6VVV67W7T882%26tag%3Dabs-bookdetailsapi-20%26linkCode%3Dxm2%26camp%3D2025%26creative%3D165953%26creativeASIN%3D0393246116 I wonder if he will change his recommended AA schedule again. I...
by tadamsmar
Wed Jul 16, 2014 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2301

Re: POLL: Do you have a dedicated REIT allocation?

Show me a guy with a 5% or 10% REIT allocation, and I'll show you someone who's read a couple of dated investing books, [OT comment removed by admin LadyGeek] . Not only will such a small allocation make no expected difference to your returns, the experts who did suggest such a bet were doing so wh...
by tadamsmar
Wed Jul 16, 2014 2:15 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6839

Re: POLL: Do you have a dedicated REIT allocation?

I have about 12.5% in the Vg REIT fund, influenced by the Life Cycle AA schedule in Random Walk Down Wall Street. Interesting that more than half of those polled hold REIT. Probably not similar to a cross-section of all investors. What is the capitalization of the REIT index small compared with the ...
by tadamsmar
Wed Jul 16, 2014 2:07 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6839

Re: Does anyone expect tilts to *under*perform?

One reason for why value is not a risk factor is there no theoretical basis for it. It is emperically derived. One theory is distressed firms. Eastman Kodak during the decline of film for instance. Washington Post after the suicide of the owner, until his wife proved to be a good manager and Buffet...
by tadamsmar
Tue Jul 15, 2014 9:08 am
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Does anyone expect tilts to *under*perform?

This does not surprise me. Virtually all discussions of any asset class here are on a risk adjusted basis. Since I can dial in virtually any level of risk adjusted performance without going outside cheap TSM, cheap TBM, perhaps cheap MM, I do not rc even need to ask how an asset does nominally. Dit...
by tadamsmar
Mon Jul 14, 2014 12:36 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Does anyone expect tilts to *under*perform?

stlutz wrote:I take that back—it was done with volatility and beta, and those failed to show that riskier stocks outperform.


Some people get so excited about small and value that they completely forget about the other factor in the 3-factor model and start trashing it.
by tadamsmar
Mon Jul 14, 2014 12:32 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Does anyone expect tilts to *under*perform?

I invest in stocks because of their long-term historical track record. If stocks had only equaled the performance to CDs over the past 100 years, I for one wouldn't be interested. The explanations, whether they be risk or behavioral-based, simply exist to create confidence—to make the factor seem l...
by tadamsmar
Mon Jul 14, 2014 9:05 am
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Does anyone expect tilts to *under*perform?

Okay, so I'll expose my agenda now. :happy I thought about making my point in the ongoing value/momentum thread, but didn't want to do a thread hijack. There really isn't anyone here who expects various tilts to under-perform on a longer term basis (taking fees out of the equation at the moment). A...
by tadamsmar
Mon Jul 14, 2014 8:33 am
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Does anyone expect tilts to *under*perform?

Just to clarify what I was originally asking. My focus is on whether anyone expects various tilts (smalll/value/momentum/profitability etc) to underperform over the long haul. I read a paper once on the DFA site where Fama stated that over any 15 year period, tilting to value gives you an 85% chanc...
by tadamsmar
Sun Jul 13, 2014 6:21 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Investing is starting to get boring

For some excitement, trade on this play money future exchange:

http://www.ideosphere.com/

Or find a tread where gold, tilts, or dollar-cost averaging vs lump sum investing of a windfall is being hotly debated :twisted:
by tadamsmar
Sun Jul 13, 2014 5:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing is starting to get boring
Replies: 39
Views: 3839

Re: Does anyone expect tilts to *under*perform?

In the incessant back and forth over various tilts/smart beta/active bets (pick your favorite phrase), we have people who: a) Say that they expect such strategies to outperform, some going so far as to say that there are no circumstances in which they shouldn't be expected to do so; b) That free lu...
by tadamsmar
Sun Jul 13, 2014 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5232

Re: Ditch car and commute to work in 250cc scooter in Raleig

Have you looked into buses, vanpools, and ride-sharing at Triangle Transit website? Even if you have to drive a good bit due to an sometimes irregular schedule it's still possible to save, so check out the savings from even partial use. The mass transit situation in Raleigh is not as good as Boston,...
by tadamsmar
Sun Jul 13, 2014 6:40 am
 
Forum: Personal Consumer Issues
Topic: Ditch car and commute to work in 250cc scooter in Raleigh?
Replies: 68
Views: 4278

Re: Who will be the Vanguard of the annuity world?

Thanks, tadasmar. It may in fact be true that there is 'enough competition to prevent over charging' - if so, that means that one should feel comfortable buying DIAs at an earlier age to begin creating a retirement annuity stream. In the past, on this forum, insightful commentators such as Larry Sw...
by tadamsmar
Fri Jul 04, 2014 8:24 pm
 
Forum: Investing - Theory, News & General
Topic: Who will be the Vanguard of the annuity world?
Replies: 27
Views: 3634

Re: Who will be the Vanguard of the annuity world?

I've been following this forum for a couple years, and there seems to be increased interest in 'liability-managed portfolios', and especially 'inflation-protected annuities', all related to the decline in availability of defined benefit pension plans - on the other hand there is concern about the e...
by tadamsmar
Fri Jul 04, 2014 8:56 am
 
Forum: Investing - Theory, News & General
Topic: Who will be the Vanguard of the annuity world?
Replies: 27
Views: 3634

Re: Modeling the Worst Case for Stocks

I don't think modeling worst case (asteroid wipes out the human race) is of much value. But I think this Shiller paper is relevant to modeling a global stock portfolio. He used 1900-2000 data from 15 countries: http://www.nber.org/papers/w11300 He avoided using the trailing returns of the US market ...
by tadamsmar
Thu Jun 26, 2014 9:26 am
 
Forum: Investing - Theory, News & General
Topic: Modeling the Worst Case for Stocks
Replies: 41
Views: 3059

Re: After death, is an HSA still an HSA?

If funds are left in an HSA after death, the basis is stepped up. What are the required distributions for the heirs? At that point is it still an 'HSA' or is it really a closet IRA? If the heir is the spouse, it's the spouse's HSA. Otherwise, all the assets are reported as someone's income during t...
by tadamsmar
Wed Jun 25, 2014 3:35 am
 
Forum: Personal Finance (Not Investing)
Topic: After death, is an HSA still an HSA?
Replies: 9
Views: 1162

Re: Moving back to the U.S. - Any ideas on a hatchback car?

For a safe car, make stability control a must-have feature. A car without stability control has a 50% higher fatality rate. Given your parameters, it's easy to get but also easy to end up with a used car without it. It was mandated for the 2012 model year, but some small hatchbacks don't have it in ...
by tadamsmar
Tue Jun 24, 2014 8:07 am
 
Forum: Personal Consumer Issues
Topic: Moving back to the U.S. - Any ideas on a hatchback car?
Replies: 33
Views: 1951

Re: Any other retirees moving money out of Vanguard?

Although all my equity portfolio (25%) is in passive ETFs, I have opted to go active on bonds. I feel that we are going through transition times which may command some active intervention, and with the other 75% I have built a fixed income portfolio of about 15% in ultra short bonds (which along wi...
by tadamsmar
Fri Jun 20, 2014 11:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Any other retirees moving money out of Vanguard?
Replies: 54
Views: 6081

Re: Any other retirees moving money out of Vanguard?

Retired a few years ago and being very risk averse settled on a 30/70 bond/equity allocation. Vanguard recommended the entire bond allocation go into the Total Bond Index Fund. I was never comfortable with the thought of having 70% of my assets in the Total Bond Fund. I've been drifting ever since....
by tadamsmar
Fri Jun 20, 2014 11:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Any other retirees moving money out of Vanguard?
Replies: 54
Views: 6081

Re: Cost of car compared to Gross Income

It's better to think in terms of yearly total cost to own (TCO) The only thing that Financial Samurai mentioned is depreciation. For a 2013 Civic, depreciation drops to $1000 after 5 years: http://www.edmunds.com/honda/civic/2013/tco.html And, estimated repair and maintenance costs are going up, eat...
by tadamsmar
Fri Jun 20, 2014 10:17 am
 
Forum: Personal Consumer Issues
Topic: Cost of car compared to Gross Income
Replies: 82
Views: 4590

Re: Dollar Cost Averaging vs. Lump Sum

DCA reduces risk, but most of the time also reduces returns. Zombie thread. DCA does not reduce risk. See "DCA By The Numbers". http://www.bogleheads.org/forum/viewtopic.php?p=1953783#p1953783 L. Actually, the bottom line from that thread is: Dollar-Cost Averaging is often proposed as a r...
by tadamsmar
Fri Jun 20, 2014 8:44 am
 
Forum: Investing - Theory, News & General
Topic: Dollar Cost Averaging vs. Lump Sum
Replies: 25
Views: 2356

Re: Dollar Cost Averaging vs. Lump Sum

The moderators want us the lump sum our comments on this topic into this 11 page (and counting) thread:

viewtopic.php?f=10&t=83767

instead of averaging them out in lots of other threads.
by tadamsmar
Thu Jun 19, 2014 12:49 pm
 
Forum: Investing - Theory, News & General
Topic: Dollar Cost Averaging vs. Lump Sum
Replies: 25
Views: 2356

Re: Book Suggestions - A Methodical Approach

Hello, I recently finished reading The Bogleheads Guide To Investing which was a great primer for a newbie such as myself. I'm looking for suggestions on the next book for my financial education. I've seen the list of Suggested Books on the Wiki page and searched the forum, but would love some dire...
by tadamsmar
Wed Jun 18, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: Book Suggestions - A Methodical Approach
Replies: 15
Views: 834

Re: If chasing market performance is bad...

Another conclusion that might be reached is that financial advisors and their ilk extract 2.5% on average from all investors each year, so individual investors have no chance no matter what their timing is. The average does not matter relative to the claims in the OP, since an individual investor c...
by tadamsmar
Wed Jun 18, 2014 8:50 am
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: If chasing market performance is bad...

Then isn't doing the opposite good? We know that market chasing leads to underperformance. All studies of real-world mutual fund investors show underperformance relative to the benchmark indexes but also to the underlying mutual funds. Presumably this is because of some reversion to the mean, that ...
by tadamsmar
Tue Jun 17, 2014 1:06 pm
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: If chasing market performance is bad...

Eh, forget the wolf and sheep thing. I can't see how the sheep can get excess losses from random walking stocks. Consider this proof that your assumptions contradict each other. 1. Performance chasing causes RTM 2. If there is no RTM, then there is no performance chasing. 3. Therefore your assumpti...
by tadamsmar
Fri Jun 13, 2014 2:28 pm
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: If chasing market performance is bad...

Eh, forget the wolf and sheep thing. I can't see how the sheep can get excess losses from random walking stocks. Consider this proof that your assumptions contradict each other. 1. Performance chasing causes RTM 2. If there is no RTM, then there is no performance chasing. 3. Therefore your assumptio...
by tadamsmar
Fri Jun 13, 2014 2:04 pm
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: If chasing market performance is bad...

Then isn't doing the opposite good? We know that market chasing leads to underperformance. All studies of real-world mutual fund investors show underperformance relative to the benchmark indexes but also to the underlying mutual funds. Presumably this is because of some reversion to the mean, that ...
by tadamsmar
Fri Jun 13, 2014 1:42 pm
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: If chasing market performance is bad...

Then isn't doing the opposite good? We know that market chasing leads to underperformance. All studies of real-world mutual fund investors show underperformance relative to the benchmark indexes but also to the underlying mutual funds. Presumably this is because of some reversion to the mean, that ...
by tadamsmar
Fri Jun 13, 2014 10:02 am
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: If chasing market performance is bad...

People on this forum consistently misinterpret what reversion to the mean is. Let's take flipping a coin. Say you flip four heads in a row. What reversion to the mean says, is that if you do this 1000 more times, you will probably go from a heads flip rate of 100% to 50%. However, this does not mea...
by tadamsmar
Fri Jun 13, 2014 9:33 am
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4692

Re: New vs. Used Honda CRV

I feel a need to chime in on this old CR-V lovefest. I have an 2000 CR-V. I think of it as a death-trap relatively speaking. It's our second car, and I drive a vanpool to work so I only drive it 300 miles or so per year. The lower trims did not have ABS till 2005. All the 2005 models have ABS, Stabi...
by tadamsmar
Thu Jun 12, 2014 12:03 pm
 
Forum: Personal Consumer Issues
Topic: New vs. Used Honda CRV
Replies: 43
Views: 2801
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