Search found 1826 matches

by Clive
Thu Aug 18, 2016 5:48 pm
Forum: Investing - Theory, News & General
Topic: Warren Buffett recommends putting 90% in S&P500 index fund, 10% in Bond index
Replies: 36
Views: 4339

Re: Warren Buffett recommends putting 90% in S&P500 index fund, 10% in Bond index

If you want to follow Buffett's advice to his own trustees, and putting figures rather than percentages on it, its simple .... once you have enough in safe treasury bills - then the rest can be invested in stocks. Where in his case enough in safe, as per oldzey's posting is $66 million.
by Clive
Mon Aug 08, 2016 8:11 pm
Forum: Investing - Theory, News & General
Topic: Equal weight index funds
Replies: 75
Views: 5574

Re: Equal weight index funds

Reading that possibly equal weight beats cap weighted. Any opinions? Does vanguard offer them? The idea is to equal $ weight the initial purchases of individual holdings ... and then let it ride. So no fund provider provides such a option that I know of. History indicates that allocating equal prob...
by Clive
Fri Jul 29, 2016 5:39 pm
Forum: Investing - Theory, News & General
Topic: Gold. OUNZ, PHYS, IAU, GLD, SGOL?
Replies: 11
Views: 879

Re: Gold. OUNZ, PHYS, IAU, GLD, SGOL?

Consider gold as one half of a barbell, with stocks at the other end, as a form of 'bond' bullet. For example instead of 50/50 TSM/TBM hold 75/25 stock/gold (that is set to 1975 onwards i.e. when it became legal to hold investment grade gold in the US). Half of gold in physical (long term buy and ho...
by Clive
Tue Jul 26, 2016 4:23 am
Forum: Investing - Theory, News & General
Topic: Diversification! A must read article
Replies: 9
Views: 2598

Re: Diversification! A must read article

The Golden Butterfly is 80% 4x4 Harry Browne Permanent Portfolio combined with 20% Small Cap Value i.e. data mined. For instance gold 1972 to 1974 saw yearly gains close to 50%, 70%, 70% respectively. Just one problem .... it was illegal to hold investment gold during those years, not becoming legal...
by Clive
Fri Jul 08, 2016 1:57 pm
Forum: Investing - Theory, News & General
Topic: Fixed 60/40 AA in retirement
Replies: 105
Views: 9251

Re: Fixed 60/40 AA in retirement

Buffett does advocate 'averaging in over time' - typically over at least a decade+. 90/10 straight off from day 1 bears massive single time point risk. But in years 11 on you are lump summing investing. The past is immaterial. Once you are retired you are no different from someone who got an inheri...
by Clive
Fri Jul 08, 2016 6:12 am
Forum: Investing - Theory, News & General
Topic: Fixed 60/40 AA in retirement
Replies: 105
Views: 9251

Re: Everyone is different

That's news to me as well, and seems like a pretty big thing to leave out (pensions etc.) . I try to remember that we have some newer investors here, so I wouldn't want to make a suggestion that would essentially put them in a 90/10 retirement portfolio, without explaining why that might be appropr...
by Clive
Fri Jul 08, 2016 5:50 am
Forum: Investing - Theory, News & General
Topic: Fixed 60/40 AA in retirement
Replies: 105
Views: 9251

Re: Fixed 60/40 AA in retirement

...I'd suspect the biggest difference in retirement is behavioral. Those going in 80/20 may have a hard time staying the course if their entire life savings drop 40% and they have no ability to replenish with new money. For those who have solid pensions and SS covering most of their essential needs...
by Clive
Thu Jul 07, 2016 4:47 am
Forum: Investing - Theory, News & General
Topic: Fixed 60/40 AA in retirement
Replies: 105
Views: 9251

Re: Fixed 60/40 AA in retirement

Rick Ferri makes a compelling case for 30/70 in retirement: https://portfoliosolutions.com/latest-learnings/blog/center-gravity-retirees To me what's important is having at least 25x spending in "safe assets" and the rest in equities. That equates to 40/60 in retirement. Nice sleep AA. Th...
by Clive
Thu Jul 07, 2016 4:16 am
Forum: Investing - Theory, News & General
Topic: "Why most retirees will never spend down their portfolio" by Michael Kitces
Replies: 89
Views: 10867

Re: "Why most retirees will never spend down their portfolio" by Michael Kitces

But assume, instead, one defines "principal" in terms of real dollars of constant purchasing power. One then gets a different portrayal of the change in principal over the 30-year period. In the table below the "Nominal" columns show the figures behind the article's graph above ...
by Clive
Wed Jul 06, 2016 9:00 am
Forum: Investing - Theory, News & General
Topic: "Age in bonds" or "110 minus age = equities"?
Replies: 28
Views: 3109

Re: "Age in bonds" or "110 minus age = equities"?

recent work by Wade Pfau suggests that a "rising equity glide path" may be preferable in retirement. Whilst you might fear higher stock amounts in retirement, if those shares have been held for 20+ years then even if share prices halve likely the gains over the prior 20+ years would have ...
by Clive
Mon Jul 04, 2016 2:44 pm
Forum: Investing - Theory, News & General
Topic: Fixed 60/40 AA in retirement
Replies: 105
Views: 9251

Re: Fixed 60/40 AA in retirement

Assuming a 33 year horizon, you might construct a 33 rung ladder loading 3% into each rung for spending each year. Ideally each rung would pace (or better still exceed) inflation so as to maintain purchase power. Given that stocks over 20+ years tend to do well, typically providing inflation or bett...
by Clive
Sat Jul 02, 2016 7:18 am
Forum: Investing - Theory, News & General
Topic: Dr. Bernstein and the Buffet Premium
Replies: 18
Views: 1579

Re: Dr. Bernstein and the Buffet Premium

BRK looks to have become a closet sampled based index fund since 1990. Share price more or less tracked the average of its four largest holdings of AXP, KO, WFC, IBM https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1990&firstMonth=1&endYear=2016&l...
by Clive
Thu Jun 30, 2016 2:53 am
Forum: Investing - Theory, News & General
Topic: What's the deal with Japan?
Replies: 62
Views: 6720

Re: What's the deal with Japan?

Using data from Kenneth French's library http://investorshub.advfn.com/uimage/uploads/2016/6/29/fluco2016-06-29-191938_509x333_scrot.png A lost decade (1990's) after massive gains in earlier years for high book to price based stocks. This paints a very different picture, and it's in local currency....
by Clive
Thu Jun 30, 2016 2:35 am
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2144

Re: Assumption

The problem I have with BH, accumulation, and withdrawal is that the assumption is that they are done in a near absence of SS and pensions and purchased annuities. With 2 buckets, enough in bonds for 30 years of drawdown, stocks left to grow/accumulate (reinvested dividends), bond weighting relativ...
by Clive
Wed Jun 29, 2016 4:48 pm
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2144

Re: Strategies for Refilling Cash Holdings (Bucket 1) Over Time

Interesting chart posted by surfer1 in this thread https://www.bogleheads.org/forum/viewtopic.php?p=2958554#p2958554 https://raw.githubusercontent.com/zonination/investing/master/snippets/short-probability.png If bucket1 is a 30 year drawdown bucket then as stocks tend to >0% over 20 years a 30 year...
by Clive
Wed Jun 29, 2016 1:24 pm
Forum: Investing - Theory, News & General
Topic: What's the deal with Japan?
Replies: 62
Views: 6720

Re: What's the deal with Japan?

Using data from Kenneth French's library

Image

A lost decade (1990's) after massive gains in earlier years for high book to price based stocks.
by Clive
Wed Jun 29, 2016 11:58 am
Forum: Investing - Theory, News & General
Topic: What's the deal with Japan?
Replies: 62
Views: 6720

Re: What's the deal with Japan?

Japan mid/smaller caps, less concentration in relatively few big caps that shot the lights out and then gave back much, progressed more 'normally'. Japan went from single digit world weight to around 50% ... and then back down again. By contrast US dropped from 66% to 33% world weighting and rose ba...
by Clive
Wed Jun 29, 2016 11:31 am
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2144

Re: Strategies for Refilling Cash Holdings (Bucket 1) Over Time

Start with $2M in drawdown (bucket1) 30 year horizon, $66.6K/year that drawsdown to zero Start with $1M in stocks/growth/accumulation (bucket2), 30 year horizon. if bucket2 grows at 3.7% annualised real, then after 30 years = $3M, same as at the start. Averaged 33% stocks at the start, 100% at the e...
by Clive
Wed Jun 29, 2016 9:53 am
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2144

Re: Strategies for Refilling Cash Holdings (Bucket 1) Over Time

Now, I employ an approach I think is even simpler. I hold a "safe" bucket and a "risky" bucket. The safe bucket includes at least 2 years of cash - but is mostly bonds. I rebalance between SAFE and RISKY as I see fit. If you compare from January 1975 when it became legal for US ...
by Clive
Tue Jun 28, 2016 5:23 am
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2144

Re: Strategies for Refilling Cash Holdings (Bucket 1) Over Time

Spitzer and Singh (2007) looked at refilling cash holdings through 5 different rules. (All of this assumes a single, yearly withdrawal.) - Traditional rebalancing. (In which case it doesn't matter where you withdraw from (other than taxes and transaction costs) because you immediately rebalance.) -...
by Clive
Sun Jun 26, 2016 2:44 pm
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2144

Re: Strategies for Refilling Cash Holdings (Bucket 1) Over Time

I've recently switched to a 30 year bucket, from prior 20 year buckets. Enough in safe bucket 1 for a fixed inflation adjusted income each year for 30 years, stocks/accumulation in bucket 2. I'm using a perpetual approach, striving for bucket 2 to have grown sufficiently over the 30 years of bucket ...
by Clive
Sat Jun 25, 2016 8:21 am
Forum: Investing - Theory, News & General
Topic: Stocks and relative currency value
Replies: 12
Views: 660

Re: Stocks and relative currency value

i.e. currencies that relatively lost more gold purchase power (gold price rose) saw relatively good stock gains to compensate, whilst those whose currency more maintained gold purchase power tended to see relatively poor stock rewards. The chart doesn't show stock rewards, I'm just basing that obse...
by Clive
Sat Jun 25, 2016 7:40 am
Forum: Investing - Theory, News & General
Topic: Why You Shouldn't Do International Stocks?
Replies: 60
Views: 7769

Re: Why You Shouldn't Do International Stocks?

Asset diversification provides a means to more assuredly preserve wealth/reduce risk Asset location should also be diversified. More inclined to endure relatively more frequent small sustainable hits. Concentration of assets and/or location is more inclined to a less frequent but large potentially c...
by Clive
Sat Jun 25, 2016 7:33 am
Forum: Investing - Theory, News & General
Topic: An Alternative to Being Long the S&P 500
Replies: 18
Views: 2349

Re: An Alternative to Being Long the S&P 500

...Permanent Portfolio are both great portfolios if you know why you have them as opposed to say, a simple 3-fund... Historically taxes/costs on bonds and gold have been high. Consider for instance 1933 all investment grade gold being compulsory purchased to then see the price of gold ramped up 75%...
by Clive
Fri Jun 24, 2016 8:40 pm
Forum: Investing - Theory, News & General
Topic: Stocks and relative currency value
Replies: 12
Views: 660

Stocks and relative currency value

Just finished building this chart and thought I'd post it for possible interest Rebasing gold price changes for direct comparison for a range of currencies, log scaled with reverse ordered Y-axis http://investorshub.advfn.com/uimage/uploads/2016/6/24/fedtrgold_multiple_currencies.png and that provid...
by Clive
Thu Jun 23, 2016 10:40 am
Forum: Investing - Theory, News & General
Topic: Are you prepared for a high-inflation environment?
Replies: 12
Views: 1323

Re: Are you prepared for a high-inflation environment?

we see 1% inflation but without printing we'd see -3% deflation. I am starting to subscribe to this view. Housing is the exception and seems to be where much more absolute inflation has been showing up, in desirable areas at least. Money is so cheap you have to pay to lend it to the state. With mon...
by Clive
Thu Jun 23, 2016 10:37 am
Forum: Investing - Theory, News & General
Topic: Are you prepared for a high-inflation environment?
Replies: 12
Views: 1323

Re: Are you prepared for a high-inflation environment?

From Holman Jenkins, "How the Malaise Will End," WSJ, 7/21/16: ...it will make interest payments on government debts unsupportable.... Much of debt is fixed rate, fixed term. Costs the same highly predictable amount no matter where interest rates subsequently move. Rising interest rates i...
by Clive
Sat Jun 18, 2016 7:09 am
Forum: Investing - Theory, News & General
Topic: For long-term investing, why is diversification a good thing?
Replies: 24
Views: 2174

Re: For long-term investing, why is diversification a good thing?

Cap weighting allocates equal percentages, equal weighting allocates equal amounts. Consider a simple case of just two firms, one valued at $100, the other valued at £10. Buying $10 of the first, $1 of the second has you owning 10% of both firms. Weighting by percentage is more generic. If everyone ...
by Clive
Fri Jun 17, 2016 3:52 am
Forum: Investing - Theory, News & General
Topic: Bogle says "You don't need bonds ?"
Replies: 68
Views: 8545

Re: Bogle says "You don't need bonds ?"

My opinion: A stock investor needs to stay the course during market down turns, including not selling stocks with depressed prices. Bonds are just a tool that serve that purpose Borrowing from a broker is not available within tax-privileged accounts where I live. 2 birds. 50/50 2x stock/bonds yearl...
by Clive
Wed Jun 15, 2016 7:47 pm
Forum: Investing - Theory, News & General
Topic: Actionable advice in a Brexit scenario
Replies: 162
Views: 16670

Re: Actionable advice in a Brexit scenario

In reality, we don't know because the withdrawal procedure is relatively new and it has never been tested in practice (One point no one really noticed is the potential for lawsuits at the Court of Justice of the European Union in Luxembourg; these lawsuits are very likely because there are many par...
by Clive
Wed Jun 15, 2016 6:03 pm
Forum: Investing - Theory, News & General
Topic: What to do if bonds have negative returns?
Replies: 68
Views: 7993

Re: What to do if bonds have negative returns?

The lawyers looked into it, it's illegal to have a negative interest rate on a debt in the UK (or it may be that a debt is presumed to have a zero or positive rate, or it's not a debt). Surely a debt with a negative interest rate becomes a asset :) You gain a benefit from someone that would have se...
by Clive
Mon Jun 13, 2016 6:52 am
Forum: Investing - Theory, News & General
Topic: Actionable advice in a Brexit scenario
Replies: 162
Views: 16670

Re: Actionable advice in a Brexit scenario

I never felt particularly comfortable with international equities, but had about 25% because prevailing theory called for it. I did what I thought was my due diligence...tried to learn everything I could about Brexit...long story short I'm more confused than ever! So, I went with my what was right ...
by Clive
Sun Jun 12, 2016 2:01 pm
Forum: Investing - Theory, News & General
Topic: Actionable advice in a Brexit scenario
Replies: 162
Views: 16670

Re: Actionable advice in a Brexit scenario

However the UK Trade Deficit with Continental Europe is £65bn a year . It is Continental Europe that may need to do the begging! For access to the "Free Market" the UK net contributes $12Bn/year. So a $100Bn/year UK trade deficit with the EU comes with a additional $12Bn fee. Trade tariff...
by Clive
Sun Jun 12, 2016 8:59 am
Forum: Personal Finance (Not Investing)
Topic: Question concerning safe withdraw rate
Replies: 23
Views: 1819

Re: question concerning safe withdraw rate

If you could buy a 35 ladder of inflation bonds that provided inflation pacing reward, then 100% / 35 years = 2.85% SWR. Invest each/any/all of those rungs in other choices and they might yield more and uplift that 2.85% ... or less and detract. Do ya feel lucky! :) The longer the investment horizon...
by Clive
Sat Jun 11, 2016 1:30 pm
Forum: Investing - Theory, News & General
Topic: Stock and Bond Performance in a Low Inflation Period
Replies: 5
Views: 1244

Re: Stock and Bond Performance in a Low Inflation Period

The Trinity Study inflation adjusted figures (Table 3) indicate that a 4% SWR from a 100% stock portfolio had a 100% success rate for all 20 year periods since 1926 (to 1995) https://www.bogleheads.org/wiki/Safe_withdrawal_rates - which is for US data/investors. Table 3 https://www.bogleheads.org/w/...
by Clive
Sat Jun 11, 2016 6:25 am
Forum: Investing - Theory, News & General
Topic: Time horizons and investor discipline i
Replies: 7
Views: 806

Re: Time horizons and investor discipline i

Thanks Larry. individuals believe 3 years is a long time, 5 years is a very long time and 10 years is an eternity. And then they make the mistake of thinking "but I don't have 20 years to wait" Invest like you're investing for 100 years and diversify, even if you might only live for a smal...
by Clive
Fri Jun 10, 2016 7:41 pm
Forum: Investing - Theory, News & General
Topic: US Bonds are not highest rated in the world?
Replies: 57
Views: 4515

Re: US Bonds are not highest rated in the world?

Over the next few decades I'm sure a lot of the world's outstanding debt, especially in Europe, will have to be deleted in some way or another. The UK's quantitative easing program had the Bank of England (central bank) 'print' around GBP350Bn ... and bought up most of the then GBP500Bn outstanding...
by Clive
Thu Jun 09, 2016 6:17 pm
Forum: Investing - Theory, News & General
Topic: US Bonds are not highest rated in the world?
Replies: 57
Views: 4515

Re: US Bonds are not highest rated in the world?

S&P downgraded US debt to AA+ in 2011. I believe the other rating agencies still have it at AAA. This is the same S&P that rated packages of subprime mortgages as AAA and then defended itself by arguing that no one believes them anyway. I'm UK so may be wrong, but seem to remember that when...
by Clive
Thu Jun 09, 2016 5:36 am
Forum: Investing - Theory, News & General
Topic: Unnecessary risk for the sake of unnecessary diversification
Replies: 54
Views: 3980

Re: Several good roads to Dublin

Dealing with real returns is the proper way to view things IMO, and of course that goes for stocks too. And taxes. You also have to consider what the bonds value will ultimately be spent on. Most assets in effect lock in at a yield at the time of purchase. If broadly interest rates have declined fr...
by Clive
Wed Jun 08, 2016 3:08 pm
Forum: Investing - Theory, News & General
Topic: M Faber: "Institutional Investors are Delusional"
Replies: 16
Views: 1739

Re: M Faber: "Institutional Investors are Delusional"

RNJ wrote:5% say 18% or more"

$100M private funds available, set up a hedge fund and sell $500M, charging 4% fees relative to 1% costs, and there's 15% alone :)
by Clive
Wed Jun 08, 2016 1:10 pm
Forum: Investing - Theory, News & General
Topic: Unnecessary risk for the sake of unnecessary diversification
Replies: 54
Views: 3980

Re: Unnecessary risk for the sake of unnecessary diversification

Bonds are not risk-free, ask UK debt holders after WWII, when the government inflated away it's public debt. TIPS also return approximately 0% real, so you would not be able to guarantee a 1% real return with existing bond options. ... And also WW1 (in effect the financial collapse of the British E...
by Clive
Mon Jun 06, 2016 3:34 am
Forum: Investing - Theory, News & General
Topic: Annual Returns on Stock, T.Bonds and T.Bills: 1928 - Current
Replies: 18
Views: 1970

Re: Annual Returns on Stock, T.Bonds and T.Bills: 1928 - Current

why do we still keep looking at the past data and perhaps use it to justify the future course of action? Or does this question answer itself by saying - no, we do not look at past data alone but we look at it because there is nothing else to look at otherwise? As a nothing else guide. Bonds might b...
by Clive
Sun Jun 05, 2016 6:52 pm
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 348
Views: 37381

Re: Prime Harvesting anyone?

2. The bond allocation is based on a percentage of the total portfolio, as opposed to setting aside a fixed number of years of income. I prefer Dr Bernstein's idea of having 20-25 years worth of drawdown dollars in "Safe" assets as the primary goal of the fixed income portfolio rather tha...
by Clive
Sun Jun 05, 2016 5:42 pm
Forum: Investing - Theory, News & General
Topic: Annual Returns on Stock, T.Bonds and T.Bills: 1928 - Current
Replies: 18
Views: 1970

Re: Annual Returns on Stock, T.Bonds and T.Bills: 1928 - Current

If you invested equal amounts in each country in 1900, buy and hold with dividends reinvested (excluding costs and taxes), no rebalancing between countries - just pure buy and hold then .... 5.7% annualised real Source: Credit Suisse Global Investment Returns Yearbook 2014 1900 – 2013 US$/inflation ...
by Clive
Sat Jun 04, 2016 9:40 pm
Forum: Investing - Theory, News & General
Topic: Annual Returns on Stock, T.Bonds and T.Bills: 1928 - Current
Replies: 18
Views: 1970

Re: Annual Returns on Stock, T.Bonds and T.Bills: 1928 - Current

Robert's data indicates 10% annualised i.e. a higher figure of $100 grew to $451,553. Whilst one year treasury rose from $100 to $3852 (4.2% annualised). 50/50 of both produced $63,696 (7.6% annualised). Versus 3% annualised for inflation. Whilst not as rewarding as 100% stock, 50/50 has the option ...
by Clive
Fri Jun 03, 2016 11:53 am
Forum: Investing - Theory, News & General
Topic: International stocks underperformed for the last 20 years.
Replies: 135
Views: 10268

Re: International stocks underperformed for the last 20 years.

This is what a growth chart looks like from Portfolio Visualizer for someone who invested $10,000 each year over the past 20 years http://i64.tinypic.com/ofyja.png Portfolio 1 100% Total Stock Market VTSMX Portfolio 2 80% / 20% Total International VGTSX Portfolio 3 50%/50% Thanks for the visual - t...
by Clive
Fri Jun 03, 2016 1:03 am
Forum: Investing - Theory, News & General
Topic: Argument for and against holding international fund
Replies: 18
Views: 1937

Re: Argument for and against holding international fund

- International will always have higher volatility, and higher risk, than one's country of domicile (the US, for many of us here) due to currency exchange rates. I'd disagree with always having higher volatility/risk. Foreign has stock change +/- FX change. Sometimes the two move in the same direct...
by Clive
Fri Jun 03, 2016 12:32 am
Forum: Investing - Theory, News & General
Topic: International stocks underperformed for the last 20 years.
Replies: 135
Views: 10268

Re: International stocks underperformed for the last 20 years.

From a UK investors perspective (GB Pound adjusted percent), 1996 to 2015 20 calendar years total returns : UK large cap (FTSE100) 7.9% annualised UK mid cap (FTSE250 (small cap in US scale)) 10.7% US 8.1% Australia 7.4% Shift to the last 15 years and respectively 6.2% 9.8% 4.7% 8% 1970 to 1990 and ...
by Clive
Thu Jun 02, 2016 4:12 pm
Forum: Investing - Theory, News & General
Topic: Constant Percentage
Replies: 8
Views: 1432

Re: Constant Percentage

shows the importance of international diversification This is UK data i.e. UK stocks total return, UK inflation adjusted (excluding costs/taxes) http://investorshub.advfn.com/uimage/uploads/2016/6/2/svdscuk_20_30_yr_real.jpg log scaled showing the final real (after inflation) gain factor after both...
by Clive
Thu Jun 02, 2016 3:01 pm
Forum: Investing - Theory, News & General
Topic: Dividends Useless?
Replies: 154
Views: 8029

Re: Dividends Useless?

My question comes down to basically why would anyone even invest in dividend stocks and dividend funds (low-growth companies) when it's really the growth that counts? Its total return that counts. A large established firm might not be able to grow the business further but still make good profits. B...

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