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Re: When should someone "not stay the course"?

Right now I just want to throw as much money as I can at the market, in the hopes that it will grow to become a small fortune by retirement. As the saying goes, I ain't getting any younger. Sounds like you don't have a long-term plan. I think one should have an asset allocation (AA) schedule, not j...
by tadamsmar
Wed Oct 01, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: When should someone "not stay the course"?
Replies: 43
Views: 2328

Re: Question about Govt. TSP: G vs. F Funds

I was able to find a chart on bogleheads that showed the last 10 years of tsp and it clearly shows the F fund outperforms the G fund. The G fund return is pitiful. For further TSP analysis, see: http://www.flickr.com/photos/ghost_of_a ... 479558116/ Mercer Consulting creates the allocation for the ...
by tadamsmar
Wed Oct 01, 2014 3:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about Govt. TSP: G vs. F Funds
Replies: 59
Views: 5655

Re: When should someone "not stay the course"?

This nearly 6-year old thread comes to mind: "Maximum Tolerable Loss" -- Not just a fear factor - DDB Of course, with hindsight, that was posted at a bad time to sell, near the bottom. This might be a good time if you don't need the risk, but you probably will not see a thread on that top...
by tadamsmar
Wed Oct 01, 2014 4:37 am
 
Forum: Investing - Theory, News & General
Topic: When should someone "not stay the course"?
Replies: 43
Views: 2328

Re: IRA Beneficiary - Should a Trust ever be the beneficiary

Yes - I had it as "my will" :D The lawyer who drew up my will was quite competent but he did not know what I was going to do with my 401K and Vanguard funds beneficiaries. I thought I was doing the correct thing. Give me a break - I grew up in South Africa, got all of my degrees there :D ...
by tadamsmar
Tue Sep 30, 2014 6:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA Beneficiary - Should a Trust ever be the beneficiary?
Replies: 23
Views: 1598

Re: When should someone "not stay the course"?

On August 28, 2006, Vanguard's Total International Stock index was priced at $16.42 per share. On September 30, 2014, it was priced at $16.41 per share. That's almost 10 years of stagnation (or 8 years, 1 month, and 2 days to be exact). . . . I know that I'm cherry picking the dates here, but if I ...
by tadamsmar
Tue Sep 30, 2014 4:04 pm
 
Forum: Investing - Theory, News & General
Topic: When should someone "not stay the course"?
Replies: 43
Views: 2328

Re: IRA Beneficiary - Should a Trust ever be the beneficiary

...I had "my will" designated as my beneficiaries and on advice from this site, I am making my brothers beneficiaries on the Roth IRA and 401K.... You can't leave assets to a Will. A Will is just sheets of paper. Sheets of paper can't own property. Even if they could, since they're not in...
by tadamsmar
Tue Sep 30, 2014 11:08 am
 
Forum: Personal Finance (Not Investing)
Topic: IRA Beneficiary - Should a Trust ever be the beneficiary?
Replies: 23
Views: 1598

Re: IRA Beneficiary - Should a Trust ever be the beneficiary

So, assuming one doesn't have a great future need for the money in an IRA, is there a way to make one's spouse AND children co-beneficiaries? IE 50% goes to spouse and 25% to each kid, distributed according to their ages. When the beneficiary spouse dies, the remainder of what's left in the benefic...
by tadamsmar
Tue Sep 30, 2014 11:03 am
 
Forum: Personal Finance (Not Investing)
Topic: IRA Beneficiary - Should a Trust ever be the beneficiary?
Replies: 23
Views: 1598

Re: Oatmeal suggestions

Oatmeal is an important "security" in the Portfolio Diet:

http://www.health.harvard.edu/newslette ... folio-diet

I use Quaker 1-minute.
by tadamsmar
Tue Sep 30, 2014 10:01 am
 
Forum: Personal Consumer Issues
Topic: Oatmeal suggestions
Replies: 96
Views: 3149

Re: The Roosevelts, PBS special

According to the book A Man called Intrepid Roosevelt leaked a fake war plan to the isolationist newspaper Chicago Tribune to goad the Hitler into declaring war on us, since he had no hope of getting Congress to declare war on Germany. The leak resulted in these headlines: http://www.freerepublic.co...
by tadamsmar
Mon Sep 29, 2014 8:37 pm
 
Forum: Personal Consumer Issues
Topic: The Roosevelts, PBS special
Replies: 99
Views: 7804

Re: what is risk?

The academic definition of risk you've chosen to highlight does not correspond to normal usage, which is better reflected in the dictionary definition, "a situation involving exposure to danger". I'm with Rodc, tadamsmar and pkcrafter (and any similar). Funny thing about this view of risk...
by tadamsmar
Mon Sep 29, 2014 2:06 pm
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 115
Views: 3984

Re: Read too many books... help untangle

So help me untangle all these concepts from folks we all know and love around these parts that are seemingly contradictory. I feel like I am having to choose a religion when I may simply be missing a simple point that would tie of this all together. Maybe I should just go back to school. My view on...
by tadamsmar
Mon Sep 29, 2014 10:45 am
 
Forum: Investing - Theory, News & General
Topic: Read too many books... help untangle
Replies: 35
Views: 2415

Re: How Long Should I Keep My Car?

I suspect that the standard Boglehead answer to this is as long as possible, and buy used preferably. However, I commute 58 miles every day, and the only way to get to and from work is by car. If my car breaks down, it will cause a major problem at work. The links below would suggest getting a new ...
by tadamsmar
Mon Sep 29, 2014 10:25 am
 
Forum: Personal Consumer Issues
Topic: How Long Should I Keep My Car?
Replies: 39
Views: 2534

Re: Does market cap weighted indexing logically follow from

lee1026 wrote:The CAPM is not stronger than the EMH - if the EMH is true, then the CAPM is true. It does not have to work in reverse.


I thought it was the other way around. The EMH can be true when the CAPM is false. Fama showed that CAPM was not the only pricing model that was consistent with the EMH.
by tadamsmar
Mon Sep 29, 2014 8:46 am
 
Forum: Investing - Theory, News & General
Topic: Does market cap weighted indexing logically follow from EMH?
Replies: 17
Views: 942

Re: Car (new OR old) for mother & baby

Do you have a second car? If you have to switch the baby seat, then you might want to get more that one set of the extension straps for your baby seat) that hook into the LATCH system. It's tends to be a bear to move the straps. PS: The second car situation of many is interesting these days. It's no...
by tadamsmar
Mon Sep 29, 2014 8:20 am
 
Forum: Personal Consumer Issues
Topic: Car (new OR old) for mother & baby
Replies: 19
Views: 1070

Re: what is risk?

I think this is a much better definition: Risk is the chance that the money you have saved for something won't be there when you need it. I think the better definition is: Risk is the chance you will not have the money you need. Under your definition, it's not risk if you all the money you saved is...
by tadamsmar
Sun Sep 28, 2014 8:58 am
 
Forum: Investing - Theory, News & General
Topic: what is risk?
Replies: 115
Views: 3984

Re: The Roosevelts, PBS special

Here's a dissenting view on the Josephus Daniels thing:

http://www.newsobserver.com/2014/09/27/ ... t-fdr.html

I personally don't know the facts, but as a resident of NC, it was a bit jarring to hear one of our most accomplished favorite son's get the ax from Ken Burns.
by tadamsmar
Sun Sep 28, 2014 8:14 am
 
Forum: Personal Consumer Issues
Topic: The Roosevelts, PBS special
Replies: 99
Views: 7804

Re: Car (new OR old) for mother & baby

Side air bags are estimated to save 1000 lives per year, but they can pose some risks to children. It think you can avoid the risks by putting the child car seat in the middle of the back seat. Seems to be a complicated topic, more here: http://www.safercar.gov/Vehicle+Shoppers/Air+Bags/Side-Impact+...
by tadamsmar
Sun Sep 28, 2014 3:46 am
 
Forum: Personal Consumer Issues
Topic: Car (new OR old) for mother & baby
Replies: 19
Views: 1070

Re: Car (new OR old) for mother & baby

#1 What do you mean by NHTSA 2014 "must have" safety features. I googled it and I find zip on that. As far as I know all the new 2014 stuff is relatively unimportant, not to say they are nothing. This --> Note: Electronic Stability Control (ESC) is now a required safety feature on vehicle...
by tadamsmar
Sun Sep 28, 2014 3:38 am
 
Forum: Personal Consumer Issues
Topic: Car (new OR old) for mother & baby
Replies: 19
Views: 1070

Re: Bill Gross moving from PIMCO to Janus, Monday

Here's the new bond king, a former punk rocker:

http://finance.yahoo.com/news/official- ... 00004.html

I will stick with my index fund, thank you.
by tadamsmar
Sat Sep 27, 2014 4:17 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross moving from PIMCO to Janus, Monday
Replies: 106
Views: 8131

Re: Car (new OR old) for mother & baby

Questions #1 Should we go with new or old cars ? We noticed that the NHTSA significantly updated their "must have" safety technologies for all 2014 models and onwards #2 Should we look outside of the Japanese models ? We're not exactly car connoisseurs and haven't kept up with what the re...
by tadamsmar
Sat Sep 27, 2014 4:02 pm
 
Forum: Personal Consumer Issues
Topic: Car (new OR old) for mother & baby
Replies: 19
Views: 1070

Re: Car (new OR old) for mother & baby

Stability control is the most important safety feature that might be optional on a used car. More important than any other optional safety feature by a factor of 10 or more. It was mandated starting with the 2012 model year. A used car without stability control has a 50% higher fatality rate. More h...
by tadamsmar
Sat Sep 27, 2014 3:38 pm
 
Forum: Personal Consumer Issues
Topic: Car (new OR old) for mother & baby
Replies: 19
Views: 1070

Re: Will Bill Gross beat the Total Bond Market Index?

I looked up the fund he apparently will be taking over at Janus, JUCDX, and it has almost 2% Expenses so that will make beating total bond challenging. http://finance.yahoo.com/q/pr?s=JUCDX+Profile If I recall correctly, 2% is pretty close the the expected real return of a bond fund based on histor...
by tadamsmar
Sat Sep 27, 2014 3:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Will Bill Gross beat the Total Bond Market Index?
Replies: 57
Views: 5727

Re: Bill Gross moving from PIMCO to Janus, Monday

Janus stock went up 43%
by tadamsmar
Sat Sep 27, 2014 8:25 am
 
Forum: Investing - Theory, News & General
Topic: Bill Gross moving from PIMCO to Janus, Monday
Replies: 106
Views: 8131

Re: Bill Gross moving from PIMCO to Janus, Monday

Who can forget his May 2014 market outlook advice?:

Bill Gross wrote:A sneeze is, to be candid, sort of half erotic, a release of pressure that feels oh so good either before or just after the Achoo!
by tadamsmar
Sat Sep 27, 2014 7:40 am
 
Forum: Investing - Theory, News & General
Topic: Bill Gross moving from PIMCO to Janus, Monday
Replies: 106
Views: 8131

Re: What's wrong with leverage?

Thorpe shows that 17% leverage is the optimal point for the SP500. But he assumed the cost of leverage was the T-bill rate and it's higher so that cuts into the modest leverage rate. Plus he assumed that SP500 future returns would have the past mean and variance and be year-wise independent. If you ...
by tadamsmar
Sat Sep 27, 2014 6:56 am
 
Forum: Investing - Theory, News & General
Topic: What's wrong with leverage?
Replies: 15
Views: 1093

Re: What's wrong with leverage?

There is nothing wrong with leverage. There is something wrong with taking reckless risks as measured by the Kelly Criteria: this practice underperforms optimal strategies. It's perhaps possible to use leverage without taking a reckless risks, but leverage may be a reliable indicator of overconfiden...
by tadamsmar
Sat Sep 27, 2014 6:34 am
 
Forum: Investing - Theory, News & General
Topic: What's wrong with leverage?
Replies: 15
Views: 1093

Re: Stubbornly Non-Boglehead Husband. What To Do?

I wanted to address the many questions about the use of leverage. In the past, he has used options and leverage and been burned badly, and so his current use of leverage is MUCH reduced. He does learn. :happy Good that he learns. But there is really nothing wrong with using leverage and options rel...
by tadamsmar
Fri Sep 26, 2014 9:19 am
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7534

Re: We're all going to die!!!

Jobless claims were lower than expected, according to the media.

By that logic, if more are not fired then the market is going to have a correction.
by tadamsmar
Thu Sep 25, 2014 4:06 pm
 
Forum: Investing - Theory, News & General
Topic: [S&P is down 1.3%, thus] We're all going to die!!!
Replies: 58
Views: 4726

Re: Advice for student buying cheap used car

Mileage trumps years. A 10 year old car with 50k will generally outlast a 3 year old car with 175k. There is a sweet spot in the middle there. I don't think that is true for a car that was not in a mild climate like Florida. The book Drive it Forever points out that the number of cold starts is mor...
by tadamsmar
Thu Sep 25, 2014 10:04 am
 
Forum: Personal Consumer Issues
Topic: Advice for student buying cheap used car
Replies: 54
Views: 3135

Re: Can Active Fund Strategy Beat Vanilla Index Fund?

It has consistently outperformed every comparable single Vanguard in last 21 years If you pick the proper benchmark (comparable, single, Vanguard) it's probably possible to make anything look spectacular. It's pretty average against the benchmark CNN uses: http://money.cnn.com/quote/mutualfund/mutu...
by tadamsmar
Thu Sep 25, 2014 8:49 am
 
Forum: Investing - Theory, News & General
Topic: Can Active Fund Strategy Beat Vanilla Index Fund?
Replies: 25
Views: 1496

Re: Can Active Fund Strategy Beat Vanilla Index Fund?

pennstater2005 wrote:If you believe he has found a winning strategy why not more than 5%? Why not 50%?


Sometimes, "Put your money where your mouth is" is a bad policy.
by tadamsmar
Thu Sep 25, 2014 8:42 am
 
Forum: Investing - Theory, News & General
Topic: Can Active Fund Strategy Beat Vanilla Index Fund?
Replies: 25
Views: 1496

Re: Risk and the Trinity Study

An asset with 0% real return would beat all 4 Trinity Study allocations by a large margin for the 5% X 20 years cells in Table 3, 100% vs 88% at least. Implies that if you really only needed the cash flow for 20 years then a 0% real return asset would be your safest bet. Kind of surprising. The Trin...
by tadamsmar
Wed Sep 24, 2014 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Stubbornly Non-Boglehead Husband. What To Do?

Give him the book Fortune's Formula . It won't make him a Boglehead. But it might make him a better stock market gambler, he might gain an understanding of the limits of risk taking. Hopefully, the book will make it clear that to beat the market you must have a specific numerical edge (that is, favo...
by tadamsmar
Wed Sep 24, 2014 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7534

Re: Stubbornly Non-Boglehead Husband. What To Do?

A lot of posters have recommended having a contest with him. I think that is a bad idea. There is a hundred million times more performance data than would be represented by such a contest. If finding convincing performance data was the solution then the problem would be gone already. More importantl...
by tadamsmar
Wed Sep 24, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7534

Re: Can Active Fund Strategy Beat Vanilla Index Fund?

It has consistently outperformed every comparable single Vanguard in last 21 years, including after considering expenses (ER 0.76) and turnover . We know past performance can't guarantee future results We apparently don't know that claims of past performance can't guarantee past performance. ...it ...
by tadamsmar
Wed Sep 24, 2014 11:12 am
 
Forum: Investing - Theory, News & General
Topic: Can Active Fund Strategy Beat Vanilla Index Fund?
Replies: 25
Views: 1496

Re: Stubbornly Non-Boglehead Husband. What To Do?

Bogleheads should stop implying that Bogleheads don't beat the market.

Bogleheads beat the market after fees and costs. Over a lifetime of compounding, they beat the market by a considerable percentage margin.
by tadamsmar
Wed Sep 24, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7534

Re: Stubbornly Non-Boglehead Husband. What To Do?

I assume you are getting 50% of the new savings to keep and invest (rather than 50% of the nest which would allow him to pull from your investments when he loses.) I think that is a fair arrangement given your difference of opinion about invewsting. I think it might be counter-productive to try to c...
by tadamsmar
Wed Sep 24, 2014 10:04 am
 
Forum: Investing - Theory, News & General
Topic: Stubbornly Non-Boglehead Husband. What To Do?
Replies: 122
Views: 7534

Re: Risk and the Trinity Study

The Trinity Study may have weighed all market conditions based on history, but it only looked at 70 years of history for one country. I wonder what the results would look like for the 1926-1995 period for Germany, Italy or Japan? I know, I know the U.S. Is different , but....... Shiller made an adj...
by tadamsmar
Wed Sep 24, 2014 9:10 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Do I need umbrella insurance?

I have a policy with RLI. Based on my experience, I'd say just the education I have gotten is well worth the $100/year or so it costs to get 1M of coverage. I co-signed a auto loan for my adult daughter and got a cancellation notice from RLI within a few weeks. I think RLI's computers detected it. I...
by tadamsmar
Wed Sep 24, 2014 8:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Do I need umbrella insurance?
Replies: 35
Views: 4562

Re: Risk and the Trinity Study

The Trinity Study casts doubt on the idea that lowering your stock allocation lowers risks in any meaningful sense. If it works, it only works because the expected risk and return of your stock allocation is inferior to the past of the SP500. You have to have confidence that you can predict that. N...
by tadamsmar
Tue Sep 23, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

If the Trinity Study is correct, then 100/0 or 75/25 stocks/bonds is best or ties for best in all 30-year scenarios: http://www.bogleheads.org/wiki/File:TrinityTable3.jpg Except the next 30 years are unknown. So, the best allocation for next "30-year scenarios" is that which: • We can kee...
by tadamsmar
Tue Sep 23, 2014 1:33 pm
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

The Trinity Study casts doubt on the idea that lowering your stock allocation lowers risks in any meaningful sense. If it works, it only works because the expected risk and return of your stock allocation is inferior to the past of the SP500. You have to have confidence that you can predict that. Ni...
by tadamsmar
Tue Sep 23, 2014 11:57 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

If the Trinity Study is correct, then 100/0 or 75/25 stocks/bonds is best or ties for best in all 30-year scenarios: http://www.bogleheads.org/wiki/File:TrinityTable3.jpg This means that a lower stock allocation is either riskier or has the same risk. So, why do we think of lower stock allocations ...
by tadamsmar
Tue Sep 23, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

If you use a conservative withdrawal rate and choose demand that the plan have a low failure rate at least as planned, then the curve flattens out and allocation becomes almost irrelevant. This is the weird thing about the stock/bond question. For conservative withdrawal rate, the outcome curve is ...
by tadamsmar
Tue Sep 23, 2014 11:19 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

It's the withdrawal rate that is crucial ... OTAR is talking about the risk that your distribution portfolio retains a permanent loss. Whereas, the Trinity Study risk the the risk of having to curtail spending to avoid running out of money. These are different outcomes, apples vs oranges. I'm confu...
by tadamsmar
Tue Sep 23, 2014 11:01 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

1) Because the higher your stock allocation, the greater your uncertainty about how closely the future period of your own retirement, say 20-40 years, will resemble the 70-year 1926-1995 period used by the Trinity study. I will coin a phrase, "reliability risk of past data." My aging brai...
by tadamsmar
Tue Sep 23, 2014 10:49 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: Risk and the Trinity Study

this is why The concept of “long–term” exists only in accumulation portfolios. There is no such thing as “long term” in a distribution portfolio. As soon as your periodic withdrawals start, “long–term” ceases to exist, and the “luck factor” takes control of the outcome. Disregard any financial rese...
by tadamsmar
Tue Sep 23, 2014 9:58 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Risk and the Trinity Study

If the Trinity Study is correct, then 100/0 or 75/25 stocks/bonds is best or ties for best in all 30-year scenarios: http://www.bogleheads.org/wiki/File:TrinityTable3.jpg This means that a lower stock allocation is either riskier or has the same risk. So, why do we think of lower stock allocations a...
by tadamsmar
Tue Sep 23, 2014 9:42 am
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1769

Re: The only risk of leverage is selling at the bottom

Imagine if he was leveraged 1.5:1 or 1.25 to 1 and what position he would be today. Ed Thorp showed that 1.5:1 is recklessly risky for the SP500 and any other stock portfolio of comparable risk. Now, it could be that least a theoretically acceptable risk over the long, long, run if you invested in ...
by tadamsmar
Tue Sep 23, 2014 8:47 am
 
Forum: Investing - Theory, News & General
Topic: The only risk of leverage is selling at the bottom
Replies: 46
Views: 1529

Re: The only risk of leverage is selling at the bottom

Ed Thorpe did a study using the Kelly Criterion that showed that ~140% exposure to the SP500 is the point where a investment becomes so risky that failure is certain in the long run. ~140% maximized growth for an infinite holding period. Given that it was based on Kelly, it defines the theoretical l...
by tadamsmar
Tue Sep 23, 2014 2:44 am
 
Forum: Investing - Theory, News & General
Topic: The only risk of leverage is selling at the bottom
Replies: 46
Views: 1529
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