Bogleheads

would it be possible to include value averaging as a comparison?
I should. I've modeled it before with more limited data sets and it looked good. One problem with VA is that it has two choices buil ...

No I made a bunch of 100K investments which each lasted 10 years. Maybe the pseudo code would be:
For years 1991 to 1999
for months 1 to 12
start investment
calculated 10 year returns
...

I've got a loop that varies LS or DCA period, stock vs bond allocation, and rebalancing frequency. My program seems to tell me that (in recent history) if you want to look for fewest losers, go with ...

According to my crazy simulations something like 30 months has been good, for the period since 1995. I don't mean to imply 30 is right, but that I'm coming up with longer numbers, as other have done.

I don't really believe in backtesting ... in a way I'm doing it to test my disbelief, to see what it can show me, if anything.

What's my point? My point is that lump sum now, or DCA over time matters a whole lot depending on how long the time horizon is.

None of us ever knows the future. All market moments are not the same ...

I'd say DCA (and importantly Value Averaging, VA) represent a step away from Boglehead orthodoxy, but not really too far. If you believe in buy and hold and index investing, but worry that not all ...

Oh, the reason for this post with maybe-obvious data, is that it is just really striking to me how much the market has changed since 1995.

.. and how entry point matters more than method.

So I finally got some data together. I'm java programmer, so I used netbeans and mysql on ubuntu. I pulled SP500 numbers from shiller's spreadsheet and historic (monthly) prices on a few vanguard fu ...

So they have techniques to get consumers to take on more debt, aren't they just like any other company who try to get customers to buy more of their product? I don't understand the immoral behavior h ...

BTW, Google Docs spreadsheets work pretty good for portfolio tracking. Another reason to use the iGoogle / Google Reader / Google Docs set ... single login. I actually use a "scratch account&qu ...

I use iGoogle, largely because I use GoogleReader (48 feeds, pretty crazy), but I can have a couple boxes there for SP500 and a few Vanguard bond funds.

This thing I'm thinking about, large population effects, might be related to Cumulative Advantage or what is amusingly called the Justin Timberlake Effect:

http://www.nytimes.com/2007/04/15/magazin ...

I think there is something going on with three big numbers:

- human population
- global gdp
- global savings rate

Those generate trillions in investment, and I think it is a little more possib ...

The answer is easy on the surface, the important "inflation" is change in dollar-price of my future purchases. That will vary, depending on whether I plan on buying a house, or to use a sma ...

Note that the problem with many stock market measures is that they collapse information to a single number. That might be reducing the information too far.

I've just started the book "Does me ...

How about a distribution (bar graph) of 10 year returns?

(Yes, I know that using every 1 year starting point produces results which are interrelated, but it also gives me a picture of how the same ...

It will be interesting to see what follow-on research shows, and how it applies say to investors' daily processing of X gigabytes of financial "news."

I found this interesting, and related to market expectations:
Computer scientists have spent decades developing techniques for answering a single question: How long does a given calculation take to p ...

Really weird. For the time being Dell seems to be using Win7 as an up-sell on that model. I might wait them out.

My meta-advice is to watch the site called www.techbargains.com for a month, and you'll be an expert.

If I were shopping right now, I might see if I could be happy with this (from that site), IF I ...

If you are a AAA member, call the AAA office and ask for a telephone number for the manufacturer's local fleet agent. The AAA price you get that way will be a lower starting point than "man off ...

Suicide probably depends on a few things (the unhappy "tail" of the distribution, and social mores about self-injury), but I'd guess it doesn't actually depend on the mean happiness.

A sa ...

Think of a distribution of errors. Unpredictable economic outcomes generate price changes. The distribution is around a mean—the expected return that people require to hold stocks. Now that distribu ...

Markets which "overreact and underreact but only in a random manner" would not mean-revert. I think they do.

BTW, we can throw things like Hyman Minsky's Financial Instability Hypothesis into the mix.

You guys are absolutely correct. I cannot favor Keynes, only use him as a foil, as an example.

What this is really about is theory agnosticism. We can observe that markets are difficult-to-imposs ...

The causality is based on traders evaluating stocks with the available information and making offers to sell and buy. These trades determine the price. The traders have a motivation to use the avail ...

Love the analogy. Likewise, think of EMH as a theory similar to "There is no God". You may not be able to prove the theory in a direct manner (you cannot conclusively observe that God does ...

Right hafis50, I might have just rediscovered the "dual hypothesis problem."

Not "aliens don't visit because they all exhausted their energy resources(*)"?

I've heard that one, it offers a hypothesis for observed behavior with unprovable causality. Aliens don't v ...

Thanks Rod, I skimmed your interesting paper. It looks like q-believers were penalized in the last long rally because overvaluations continued for so long. Perhaps it's an example of Keynes' market ...

Could you explain how the EMH and the EMMH (the Efficient Market Myth Hypothesis) represent two different paths that both lead to the same conclusion, the conclusion that investors should invest as if ...

Perhaps now he has all his money in his funds?

He may not recommend that his clients have "all" their money in his funds either.

Unless I am mistaken, the mutual funds that Thaler and his colleagues run have underperformed the market. Lots of people "think" securities are mispriced. We are still waiting for people t ...

I do have Regnault somewhere in the back of my mind. Someone, perhaps you, mentioned him here before. He might also have been mentioned in Fox's book, though his history is very US-centric.

For m ...

If they tend to do better than the "market" it would challenge EMH.

I may be stating the obvious ... but I've got 5 minutes and a computer keyboard:

This is true. Successful predictio ...

BTW, I finished Fox's book, skimming the last couple chapters. It was good, but a bit of a drudge, just because it was such a thorough history of theories and models and their authors.

From my rea ...

It wouldn't surprise me if most professional managers were conflicted, using VaR models based on random walk models based on efficient market models, while at the same time not believing in efficient ...

Raddle, I think some people say "time the market" and others say "valuations matter." They talk past each other, to some degree.

I was just reading that the year-over-year CPI is still negative. That takes some sting off money market interest rates.

Please, do not keep us in suspense. What are the highlights as you recall?

For me it was the linkage between bubbles and "looting." Shiller might actually be on the same page as Bogle th ...

At times, Animal Spirits is an uncomfortable read. But you know, sometimes that's good mental exercise. I have to admit that some of those stories that make me uncomfortable are factually correct, e ...

I'm reading Akerlof & Shiller's Animal Spirits right now. My quick comment would be that it's quite compatible with buy and hold index investing. I read Zweig Your Money and Your Brain, and foun ...

Thank you for that explanation. That is pretty much what I understood. I certainly wasn't trying to favor a more monolithic rule of thumb (70%) over this study.

We agree that mileage can vary ... ...

"We assume a household derives utility U(c) from period-by-period consumption in equivalent units"

Well there you go, park-walker is always getting less utility than a golfer, no matter w ...

superlight wrote.I expect that this paper is discovering more of the unlucky ... This paper wasn't doing that. This paper used a lifecycle model to analyze the best data set in the world of household ...

There are two ways to get to a less than 65% replacement rate: planning or circumstance.

If you are lucky, you did it by planning, keeping a simple lifestyle and high savings rate. It's easy then ...

The secret to this discussion is to know how it ties to Boglehead philosophy. A true Boglehead believes that all moments in the market are equal, and so at any point a lump sum investment has the sam ...

Shorter: Be aware that "always lump sum" is bound to EMH.

Not sure about that. I'd say that "always lump sum" is bound to the target portfolio having an expected return greater ...