Search found 14 matches

by Soren Aabye
Mon Feb 03, 2014 3:21 pm
Forum: Investing - Theory, News & General
Topic: Poll--especially for newbies--financial calc skills?
Replies: 44
Views: 3509

Re: Poll--especially for newbies--financial calc skills?

My trusty old HP-12C (financial calculator) got me to .9563%. That calculator has been going since about 1990. I have only changed the batteries once, or maybe twice.
by Soren Aabye
Sat Apr 07, 2012 11:53 pm
Forum: Investing - Theory, News & General
Topic: How to rebalance during market crashes?
Replies: 54
Views: 7264

Re: How to rebalance during market crashes?

Len33 --

You said "Let's say my personal rule would be to rebalance when TSM Index gets up to 63% or down to 57%." That's a 5% rebalancing band. The Daryanani article suggests that a much wider band is optimal. If you used a 20% rebalancing band you wouldn't be doing any rapid fire rebalancing. If bonds stayed constant, you would rebalance twice on a 50% drop (with a 60/40 equity/bond AA). The second rebalancing would occur just before the market started to recover.
by Soren Aabye
Fri Mar 16, 2012 1:08 am
Forum: Investing - Theory, News & General
Topic: How can you bear Morningstar?
Replies: 28
Views: 5436

Re: How can you bear Morningstar?

I use Morningstar's website for one reason: to create custom charts for a quick comparison of stocks, funds, indexes, etc. It's free and easy. It never occurred to me to think that I was bearing anything.
by Soren Aabye
Wed Feb 29, 2012 6:16 pm
Forum: Investing - Theory, News & General
Topic: Deleted
Replies: 50
Views: 5096

Re: Do you have a portfolio "floor"?

I do not have a portfolio floor. But if I did, this is how I would do it.

I would work myself into a state of anxiety, and while in that state I would pick a number to be my floor. Then I would catch a movie, or have a good meal, or take the dog for a long walk—ditching my anxious self along the way. Now, keeping it secret from my anxious self, I would write into my investment policy that should I ever reach that number I would do everything I could to buy up equities. My anxious self is never allowed to interfere with the execution of my investment policies.

So that's how I would do it. :beer
by Soren Aabye
Sun Feb 26, 2012 11:16 pm
Forum: Personal Investments
Topic: What is your rebalance trigger?
Replies: 40
Views: 3405

Re: What is your rebalance trigger?

http://www.tdainstitutional.com/pdf/Opportunistic_Rebalancing_JFP2007_Daryanani.pdf In short, 20% bands, checked every 10 market days is about optimal. I didn't read the pdf file but 20% bands are way excessive. Not doing anything would be about the same. If I had a 50/50 AA, I would not want to get close to 30% or 70% stocks, but that is just me... It's 20% of each asset class allocation not of the portfolio. So you do don't go over 60/40 and you test every 10 market days. the point is to let winners run and the sell closer to the bottom. In empirical testing, this has been the best approach. I found the cited article very convincing. I use 20% rebalancing bands and 5% tolerance bands. I check every 10 market days, or more often if I feel...
by Soren Aabye
Mon Jan 23, 2012 4:51 am
Forum: Personal Investments
Topic: Do You use a Vanguard Advantage Account?
Replies: 26
Views: 12329

Re: Do You use a Vanguard Advantage Account?

asset_chaos wrote:
momar wrote:You can deposit checks in VAA by printing out a purchase form and mailing them the check; I don't mean a check you write, I mean any check that anyone writes to you.
Have you done this? The last time I looked at a Vanguard deposit slip, admittedly not too recently, it said no third party checks. And I can't find anywhere at vanguard.com that says they'll accept a check made out to me for deposit to my account. (They'll accept recurring electronic payments, and they'll accept electronic direct deposit of tax refunds.)
asset_chaos:

A check that is written to you is not a third party check. A third party check is a check that is written to someone else who then endorses it over to you.
by Soren Aabye
Mon Jan 02, 2012 3:11 pm
Forum: Investing - Theory, News & General
Topic: So, what's your screen name mean? (And why'd you choose it?)
Replies: 81
Views: 7880

Re: So, what's your screen name mean? (And why'd you choose

Mine is an homage to one of my favorite thinkers: Kierkegaard, the grandfather of existentialism.
by Soren Aabye
Wed Dec 14, 2011 3:07 pm
Forum: Investing - Theory, News & General
Topic: excellent summary Euro Crisis in layman's language
Replies: 5
Views: 1668

Re: excellent summary Euro Crisis in layman's language

There is of course a debate and a 'german view'. [I agree.] But Germany runs a current account surplus with the Euro Zone almost exactly equal to the deficit of the countries which are in trouble. [I agree with everything except the "But". (Meaning, I dont' think this fact about current account balances runs counter to anything in either the article you quoted or my post.)] That is straight evidence that the German currency is pegged too low against the other European currencies via the Euro. Otherwise the Dmark would appreciate, and the CA deficit would close. [Absolutely right.] In addition Germany did not have the major bank failures of the Anglo Saxon countries in the crisis, but neither did any Euro country but Ireland. And,...
by Soren Aabye
Tue Dec 13, 2011 11:51 pm
Forum: Investing - Theory, News & General
Topic: excellent summary Euro Crisis in layman's language
Replies: 5
Views: 1668

Re: excellent summary Euro Crisis in layman's language

The article you link to in the New Yorker strikes me as seriously misleading on a couple of important points. It’s claim that “[w]hat’s roiling the markets is the fact that the governments of the richer European nations, especially that of Chancellor Angela Merkel, in Germany, have been putting the domestic unpopularity of bailouts ahead of their evident economic necessity” is a view that is based on a false understanding of the way that treaties limit the actions of the European Central Bank. For a good (and brief) analysis of this see http://doug-huggins.blogspot.com/2011/11/legal-issues-involving-ecb-as-sovereign.html The idea that Germany has only benefitted from the Euro and thus should feel obligated to bail out the peripheral countri...
by Soren Aabye
Mon Dec 12, 2011 4:22 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684295

Re: U.S. stocks in freefall

I love the way this thread pops up whenever the market hiccups. But, @NisiPrius, your post about the dreaded Johnny-Johnny-whoops-Johnny was really priceless.
by Soren Aabye
Sun Sep 04, 2011 10:09 pm
Forum: Personal Investments
Topic: allocating trust fund money
Replies: 12
Views: 1775

Get a copy of the trust document and read it. If the trustee won't give it to you talk to a lawyer (without making a fuss). Pay special attention to the provisions on removing the trustee. If the trustee ever starts seriously messing up, or failing to report to you (as required by the trust document read against state trust law), or charging exorbitant fees, you want to know what your options are. You may have a say in choosing the successor trustee. The trustee has a fiduciary obligation to you that gives you a substantial set of rights. Know what your rights are, but do everything you can to stay on reasonable and friendly terms with the trustee. The trustee would be a fool to not be interested in your (reasonable) views about investment ...
by Soren Aabye
Tue Aug 30, 2011 10:42 am
Forum: Investing - Theory, News & General
Topic: Ideas on timing major shifts in asset allocation?
Replies: 20
Views: 3427

Thanks for the thoughtful responses. I appreciate the reminder to keep taxes in mind, but that part of the equation is transparent to me. What I wanted to puzzle over was this very narrow question about timing, and I am grateful for the ideas that came up in the thread.
by Soren Aabye
Sat Aug 20, 2011 12:31 pm
Forum: Investing - Theory, News & General
Topic: Ideas on timing major shifts in asset allocation?
Replies: 20
Views: 3427

Retiredjg said: If the current portfolio is making you crazy, you should switch now (assuming no tax consequences) and get your life back to normal. If you are not uncomfortable and just wanting to head that direction but are not comfortable with doing it all at once, I'd say do a lump sum now (1/4? 1/3? maybe 1/2?) and put the rest on a strict weekly (bi-weekly?) schedule and have it done in 6 or 9 or 12 months. If there is a week when stock prices are particularly high, you could sell twice that week if you want. Assume that I am not at all uncomfortable with gyrating markets, and that I do not need to take out any income. I wanted to focus on the question of timing the transition. Imagine that I am invested in a total market index fund i...
by Soren Aabye
Fri Aug 19, 2011 5:29 pm
Forum: Investing - Theory, News & General
Topic: Ideas on timing major shifts in asset allocation?
Replies: 20
Views: 3427

Ideas on timing major shifts in asset allocation?

Say you have inherited a portfolio that is 100% stocks, well diversified, performing very much like a Total US Stock Market Index. Say you want to transition to a portfolio of index funds that is 60/40 stocks/bonds. The 100% portfolio has just come down 14% from recent highs. The target portfolio has come down only 7% during the same time.

How do you time the transition? All at once, locking in the recent losses? 10% a week over 10 weeks? 10% a month over 10 months? Wait (however long it takes) for the portfolio to recover some part of the loss before transitioning?