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Re: Why Own Bonds at All?

You are right when you consider 6x to 6.7x. But is that against inflation or before? When you add in inflation and MER you find that those little 0.x% matter a lot in the long run. Just changing the MER from the .18 default on firecalc to my actual .3 is quite something over many decades. Vanguard ...
by wellmoneyed
Mon Feb 17, 2014 12:49 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

The summary is not a long read. "starting around 2x leverage, loses $210K of borrowed money, and is forced is to sell what's left of his portfolio at S&P 821 in November 2008" That isn't the journey I was talking about. The journey was from 100% confidence to 0% confidence. There is a...
by wellmoneyed
Mon Feb 17, 2014 12:17 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

Claver, Here is a list of books that this site's community recommends: http://www.bogleheads.org/wiki/Books:_Recommendations_and_Reviews Have you read most of them? If not, I would suggest doing so. Anyone considering 100% stocks owes it to them self to read at least 3 or 4 of those books. From goog...
by wellmoneyed
Mon Feb 17, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Bogle and optimal portfolios for the long run

You seem to be saying that it is a given that the correct "utility function" is to maximize the minimum rate of return. I'll just say, not knowing much about financial markets but as someone that has some experience with optimization of random systems, min-max strategies tend to be overwh...
by wellmoneyed
Sat Feb 15, 2014 3:14 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

Whatever, wellmoneyed. Good luck with that. Does anybody besides you depend on the money? :P Good luck with what? I am trying to help you understand what you appear to be missing. Bonds can be less "safe" than stocks while a mix of stocks and bonds can be safer than both. I believe this i...
by wellmoneyed
Sat Feb 15, 2014 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Bogle and optimal portfolios for the long run

http://corporate.morningstar.com/ib/documents/MethodologyDocuments/ResearchPapers/Optimal%20Portfolios%20for%20the%20Long%20Run.pdf Claver, I don't think you understand the conclusion of this paper. Consider the following two investments: Investment 1 Max Return: 7.32% Min Return: 0.63% Investment ...
by wellmoneyed
Sat Feb 15, 2014 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Bogle and optimal portfolios for the long run

Here is a link to Blanchett's paper: http://corporate.morningstar.com/ib/documents/MethodologyDocuments/ResearchPapers/Optimal%20Portfolios%20for%20the%20Long%20Run.pdf Wow, I am guessing I am not reading the chart right. It looks like one of the 20 countries (austria) has bonds returning 4% and st...
by wellmoneyed
Sat Feb 15, 2014 11:43 am
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

If stocks return 10% over the next 10 years, and bonds return 4%, your 75/25 portfolio will return 8.5%... 8.5% is still a pretty good return, so if stocks do what is expected, you're still pretty happy... But snake-eyes comes up, and you lose your job, and stocks crash for an extended period, you'...
by wellmoneyed
Fri Feb 14, 2014 11:50 am
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Asset protection strategy

How about your taxable accounts? How do you protect them from potential creditors? 1. I would get lots of insurance (high limits) 2. I would get a transmutation agreement if you are married: http://en.wikipedia.org/wiki/Transmutation_agreement 3. I would read and seriously think about liability of ...
by wellmoneyed
Fri Feb 14, 2014 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Asset protection strategy
Replies: 50
Views: 3847

Re: Why Own Bonds at All?

:beer Siegel notes that for the period January 1, 1982 through the end of 2011--the period wellmoneyed cites--long term government bonds beat stocks by 11.03 to 10.98 or 0.05% ( wellmoneyed's figures claim a slightly larger difference. Please note I didn't cite a specific time period or claim any fi...
by wellmoneyed
Thu Feb 13, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

http://www.evansonasset.com/index.cfm?Page=13

Lot's of facts and figures undermining Siegle's case. Worth a read. Plus it includes the words "cherry picked" which is a big plus.
by wellmoneyed
Thu Feb 13, 2014 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

The point of my post of Triumph of the Optimists was to address the absurd cherry-picking in a prior post. I was only going to post once, but this is just to good. You are addressing the absurd cherry-picking by cherry-picking from the Triumph of the Optimist? :oops: BTW, I believe I found the pape...
by wellmoneyed
Wed Feb 12, 2014 12:22 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Why Own Bonds at All?

Oh, for goodness sake--you are totally cherry-picking, 10 years here and 10 years there. Your question "Why own bonds at all?" Was just very clearly answered with actual data. Why did you start this thread? It appears to be to promote your view point rather than get input. Since you are v...
by wellmoneyed
Wed Feb 12, 2014 12:08 pm
 
Forum: Investing - Theory, News & General
Topic: Why Own Bonds at All?
Replies: 492
Views: 30306

Re: Feeling less than Successful lately

I am a successful serial entrepreneur. If you really want to do something, let me know what type of engineer you are and I can give you suggestions on how to get started. If you do what I tell you, eventually you will be successful. Start ups can be constructed like an engineering problem as oppose...
by wellmoneyed
Tue Nov 12, 2013 11:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Feeling less than Successful lately
Replies: 58
Views: 6172

Re: Feeling less than Successful lately

I am a successful serial entrepreneur. If you really want to do something, let me know what type of engineer you are and I can give you suggestions on how to get started. If you do what I tell you, eventually you will be successful. Start ups can be constructed like an engineering problem as opposed...
by wellmoneyed
Mon Nov 11, 2013 9:19 am
 
Forum: Personal Finance (Not Investing)
Topic: Feeling less than Successful lately
Replies: 58
Views: 6172

Re: Those of you with alot of money, how did you do it?

There is A LOT Of luck involved with those approaches. There are many, many. many real estate folks, mechanics, etc... who bet on themselves who came up bust. That is life. The higher the possible return the higher the risk. Sound familiar?? Just because many people try and fail doesn't mean it is ...
by wellmoneyed
Thu Apr 11, 2013 10:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Those of you with alot of money, how did you do it?
Replies: 81
Views: 9237

Re: Those of you with alot of money, how did you do it?

If you manage to accumulate a net worth of $1M by 40 (completely achievable, especially for high level professionals) I simply said, "If you accumulate $1M by 40." The scenario and the math is true wheter it's 1900 or 2100. That is not simply what you said. How many "high level profe...
by wellmoneyed
Thu Apr 11, 2013 9:53 am
 
Forum: Personal Finance (Not Investing)
Topic: Those of you with alot of money, how did you do it?
Replies: 81
Views: 9237

Re: Those of you with alot of money, how did you do it?

i would define a lot of money as $10 million plus. that figure cannot usually be attained by high level professionals such as doctors or lawyers. Typically one would have had to started a business that was successful or inherited it. I couldn't disagree with you more. If you manage to accumulate a ...
by wellmoneyed
Wed Apr 10, 2013 3:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Those of you with alot of money, how did you do it?
Replies: 81
Views: 9237

Re: Inheritance as an endowment?

I’ve come to the conclusion that inheritances should be used like an endowment fund. Absolutely. This has partially been influenced by watching Downton Abbey and learning about the way estates were held and passed along in that time/place. I believe that the beneficiary has the responsibility to ma...
by wellmoneyed
Mon Mar 25, 2013 3:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance as an endowment?
Replies: 9
Views: 863

Holding Accounts Requiring Two Signatures

Are there any mainstream providers that will allow for transactions to be approved by a third party? I want to setup an account and I don't want a single person to be able to take all the money or make crazy trades. I know I can have managed accounts, but I am hoping to avoid the fees. I would be fi...
by wellmoneyed
Mon Mar 25, 2013 1:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Holding Accounts Requiring Two Signatures
Replies: 0
Views: 107

Re: How do I build wealth?

I never got into the reasons for wanting to be wealthy or philanthropy. Im interested in how does an average person like myself do better than the average retirement account. I want to excel and learn about different strategies whether it be real estate, stocks, business, a combination of all of th...
by wellmoneyed
Fri Mar 22, 2013 5:19 pm
 
Forum: Investing - Theory, News & General
Topic: How do I build wealth?
Replies: 87
Views: 7636

Re: How do I build wealth?

Remember that studies show that money doesn't make you happier after about $75K a year. Having made less than that and more than that, I'd have to say that number is about right. That is just a feel good quote for people that only make 80k :D http://www.cnbc.com/id/100497407 New research is coming ...
by wellmoneyed
Fri Mar 22, 2013 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: How do I build wealth?
Replies: 87
Views: 7636

Re: How do I build wealth?

If you are looking for higher scaling exponents, recognize the risk. And realize the extreme survivor ship bias in the data you see around you. You see business owners making $1M, but you don't see the 1000 that failed for every one that made it. Do thousands fail for every one that makes it? That ...
by wellmoneyed
Fri Mar 22, 2013 10:05 am
 
Forum: Investing - Theory, News & General
Topic: How do I build wealth?
Replies: 87
Views: 7636

Re: How do I build wealth?

Im already making some money, its the invest wisely that I am trying to figure out. I currently throw everything extra into my AA but I am wondering whether or not to pursue a mix of index funds, stocks, real estate, etc to create the most wealth since I can afford to have more risk right now. You ...
by wellmoneyed
Thu Mar 21, 2013 2:05 pm
 
Forum: Investing - Theory, News & General
Topic: How do I build wealth?
Replies: 87
Views: 7636

Re: The Permanent Portfolio is the Best Portfolio

Most telling if you lived in Iceland it would have preserved your wealth when that currency collpased. A classic 60/40 portfolio would have been wiped out. I don't believe that is true. Stocks hold companies with actual property. If you look at what happened in Germany during their currency collaps...
by wellmoneyed
Mon Dec 31, 2012 12:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: The Permanent Portfolio is the Best Portfolio
Replies: 73
Views: 7947

Re: Seperating business and personal assets

What did you mean "after you know about a liability"? Does this mean once a negligent act, lien, or judgement has or is about to occur or simply signing on as a general partner? Again everything I write is fiction blah blah blah... My understanding is once you are aware of an act that may...
by wellmoneyed
Mon Dec 31, 2012 12:42 am
 
Forum: Personal Finance (Not Investing)
Topic: Seperating business and personal assets
Replies: 3
Views: 453

Re: Seperating business and personal assets

My spouse has entered a general partnership with several other family members. I am aware a General Partnership is one of the worst mechanisms for seperating business and personal assets for liability/risk management purposes. This is my understanding of things I might be wrong etc. etc. There are ...
by wellmoneyed
Sun Dec 30, 2012 12:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Seperating business and personal assets
Replies: 3
Views: 453

Re: Help Understanding Bond Fund Yields

Many bonds these days are selling at a premium to par. When they mature, you receive par, not the premium. This decrease is captured by SEC yield, but not distribution yield. That's why distribution yield is a larger number. Both bonds and bond funds are subject to this, so it's not a reason to pre...
by wellmoneyed
Thu Oct 25, 2012 1:45 pm
 
Forum: Investing - Theory, News & General
Topic: Help Understanding Bond Fund Yields
Replies: 2
Views: 256

Help Understanding Bond Fund Yields

I am looking at VWIUX. It has an SEC yield of 1.62%. If I look at distributions, I see the distribution yield is about 3%. Based on the above and assuming no major changes, I would expect to continue to see a roughly 3% payout. The maturity/duration are around 5 years. If I look at composite bond yi...
by wellmoneyed
Thu Oct 25, 2012 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Help Understanding Bond Fund Yields
Replies: 2
Views: 256

Re: Cash from Sale of Company

Put 50% in the Vanguard Total Market Index fund and 30% in the total international fund. I am curious about the idea of 80/20 for a 50 year old couple with 5M. If we go with any version of age in bonds, it would be in the neighborhood of 50/50. Why the recommendation for more stock? Is it a combina...
by wellmoneyed
Mon Sep 24, 2012 10:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Cash from Sale of Company
Replies: 68
Views: 2428

Re: Fidelity Investment Advisors

Selling an appreciated asset creates a capital gain. All interest income from the asset is still taxed as ordinary income. Selling an asset for, tax purposes only, often does not make sense. Your reinvested capital is reduced by the tax bite, producing less income. If interest rates don't rise for ...
by wellmoneyed
Sat Sep 22, 2012 9:37 am
 
Forum: Investing - Theory, News & General
Topic: Fidelity Investment Advisors
Replies: 28
Views: 3785

Re: Asset protection, high net worth in Maryland specific.

I would look at a transmutation (post-nuptial) agreement. This is very cheap (no annual cost) and as I understand is 100% bullet proof to protect 50% of your assets as long as both you and your spouse are not liable for an action. This has been discussed on this board before. Also, you can setup a 5...
by wellmoneyed
Sun Sep 16, 2012 3:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset protection, high net worth in Maryland specific.
Replies: 3
Views: 488

International Allocation

I recently received a PM from someone that got me thinking. I have done some research and I am left with a question about international allocation. I am currently 60% US 40% international. I am struggling with possibly changing to 40% US 60% international. It seems to me the case against global cap ...
by wellmoneyed
Thu Sep 13, 2012 11:49 am
 
Forum: Investing - Theory, News & General
Topic: International Allocation
Replies: 12
Views: 1044

Re: hijacker (PWM) - READ THIS

I haven't looked at a typical response to this type of behavior on forums, but I suspect filing a lawsuit is not likely the best way to handle this unless you "know" who it is before you start. What if they are not in the US? You will spend all the legal and investigative money for nothing...
by wellmoneyed
Tue Sep 04, 2012 3:59 pm
 
Forum: Forum Issues and Administration
Topic: hijacker (PWM) - READ THIS
Replies: 130
Views: 11225

Re: Mindset/Asset Allocation Problem

It seems like you are: 48% bonds/cash 50% stocks 2% commodities I am basically your same age and I am 60 stocks/40% bonds. Right now many smart people are saying go short or shorter on the bonds (cash). From my perspective your cash/bond % is just fine - granted on the conservative side. I might pic...
by wellmoneyed
Sat Jun 16, 2012 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Mindset/Asset Allocation Problem
Replies: 11
Views: 959

Re: Copying Swensen's portfolio in taxable account

As Warren Buffet noted on CNBC a couple of months ago, taxes are only one part of the decision, and if you are paying taxes, come on folks, you are making money! Depends on whether you include inflation in the equation. Consider a bond paying 3%, inflation at 2.5%, and a tax rate of 50%. Your payin...
by wellmoneyed
Sat Jun 16, 2012 12:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Copying Swensen's portfolio in taxable account
Replies: 18
Views: 2157

Re: How many Bogleheads self-insure?

I have raised my home owners deductible to 20k-50K (I can't remember exactly). The savings was substantial. I would do the math on the car insurance and if it works out and if you can handle the new liability, I would go for it.
by wellmoneyed
Sun May 13, 2012 9:57 am
 
Forum: Personal Consumer Issues
Topic: How many Bogleheads self-insure?
Replies: 30
Views: 2723

Re: Investing 10k for a 1% stake in a company

Of course, if the 1% investor knew the value was zero... There is no KNOWN value of a start up, and no one involved in a start up would value it at zero. There are valuation methods to try to deal with start ups, but they are pretty poor. For example lets us use a valuation method of 500K/founder. ...
by wellmoneyed
Sat May 12, 2012 12:16 pm
 
Forum: Investing - Theory, News & General
Topic: Investing 10k for a 1% stake in a company
Replies: 25
Views: 1648

Re: Investing 10k for a 1% stake in a company

1. Think of a somewhat "extreme" case (but not impossible), where (by some objective measure) the company is 'worth' zero. You are offered 1% ownership for 10,000 cash. You buy. Immediately, the company is "worth" $10,000 and you now "own" 1% of 10,000 - $100. . In thi...
by wellmoneyed
Fri May 11, 2012 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: Investing 10k for a 1% stake in a company
Replies: 25
Views: 1648

Re: Investing 10k for a 1% stake in a company

It looks like "high growth" in this case means "employee growth" and not revenue or profit growth. Not particularly relevant to this situation, since revenue and/or profit growth is what's going to drive higher valuations. Also, the 10-employees-to-start thing excludes the types...
by wellmoneyed
Fri May 11, 2012 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Investing 10k for a 1% stake in a company
Replies: 25
Views: 1648

Re: Investing 10k for a 1% stake in a company

Out of curiosity, why couldn't the value of the company have increased 40 times in a couple of years? That isn't all that unusual. LOL, why are you investing in the stock market? Just invest in the usual run of the mill 40x in a few years investment. BTW, I wouldn't mind two or three of those. :D I...
by wellmoneyed
Fri May 11, 2012 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: Investing 10k for a 1% stake in a company
Replies: 25
Views: 1648

Re: Investing 10k for a 1% stake in a company

Out of curiosity, why couldn't the value of the company have increased 40 times in a couple of years? That isn't all that unusual. LOL, why are you investing in the stock market? Just invest in the usual run of the mill 40x in a few years investment. BTW, I wouldn't mind two or three of those. :D
by wellmoneyed
Fri May 11, 2012 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Investing 10k for a 1% stake in a company
Replies: 25
Views: 1648

Re: Two Questions: MPT, Portfolio Managment

But markets are efficient - the tilt-toward assets offer no better prospects than the tilt-away assets. Do you mean to say by "no better prospects", no better risk adjusted return? EDIT:Assuming you did mean that, for the sake of the OP: Tilting may very well increase your expected return...
by wellmoneyed
Wed May 02, 2012 5:48 pm
 
Forum: Investing - Theory, News & General
Topic: Two Questions: MPT, Portfolio Managment
Replies: 23
Views: 1298

Re: TEXAS transmutation agreement

My understanding is not specific to Texas, but I would guess it is applicable. 1. If you split assets in an arrangement of something other than 50/50 A. You leave yourself open to the transfer being challenged. B. The party with less than 50% looses out in a divorce 2. As this is a split, there real...
by wellmoneyed
Tue Apr 24, 2012 1:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: TEXAS transmutation agreement
Replies: 3
Views: 568

Re: Gold Coins for FUN, I mean.... investing

I've inherited a Krugerrand from a dying great uncle, which I certainly appreciate to this day. I'd like to buy more Gold Coins, and keep till I possibly hand down to my children, etc. I assume the US Mint has a markup and is certainly not the cheapest, but probably the safest? Any advice on coins ...
by wellmoneyed
Sat Apr 07, 2012 9:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Gold Coins for FUN, I mean.... investing
Replies: 30
Views: 2833

Re: Your Business as 'a Stock' - How to Evaluate Equity Prof

I would place your business into one of the following 4 categories: 1. Makes less than 200K/year - total owner compensation - this company is worth zero or virtually zero 80% of the time. 2. Makes more than 200K/year you are the sole management team - depending on the margins this maybe worth someth...
by wellmoneyed
Sat Apr 07, 2012 9:15 am
 
Forum: Investing - Theory, News & General
Topic: Your Business as 'a Stock' - How to Evaluate Equity Profile?
Replies: 12
Views: 596

Re: How would a Boglehead respond to this?

During my time fidgeting with indexing and passive investing, I have had fits of I am special. In my I am special moments, I think I have way more money that 99% of the people on this board and therefore their advice doesn't apply to me. They don't QUALIFY for the types of accounts I can. Why would ...
by wellmoneyed
Wed Apr 04, 2012 6:16 pm
 
Forum: Investing - Theory, News & General
Topic: How would a Boglehead respond to this?
Replies: 135
Views: 5454

Re: Why does anyone use American Express?

1. No card comes close to the centurion - status on airlines and upgrades at time of booking 2. SPG card is one of the best cards if you travel Check out http://www.flyertalk.com if you want to learn more. AMEX is generally thought of as the best network for points. Roughly 90% of my charging is don...
by wellmoneyed
Sun Mar 25, 2012 5:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why does anyone use American Express?
Replies: 146
Views: 21973

Re: from nisiprius, a 'greatest post' in case you missed it

They must plan and save for the "worst-case" returns in the range of 1-2% real regardless of the estimated mean returns of their AA. Why? This seems to be a premise of running through this thread. Why can't I plan for the likely return? Why is 1% the worst case scenario? Have you no imagi...
by wellmoneyed
Fri Mar 23, 2012 11:57 am
 
Forum: Investing - Theory, News & General
Topic: from nisiprius, a 'greatest post' in case you missed it
Replies: 147
Views: 10910

Re: from nisiprius, a 'greatest post' in case you missed it

2) The amount you need to save is the same no matter what your asset allocation is. To say "it's very hard to save enough to retire just using Treasury bonds and TIPs" is just to say that it's very hard to save enough. If you aren't saving enough to retire just using Treasury bonds and TI...
by wellmoneyed
Fri Mar 23, 2012 11:49 am
 
Forum: Investing - Theory, News & General
Topic: from nisiprius, a 'greatest post' in case you missed it
Replies: 147
Views: 10910
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