Search found 1772 matches

by Clive
Mon May 30, 2016 9:00 am
Forum: Investing - Theory, News & General
Topic: JD Mellberg 8% Lifetime Return Claim - Legitimate?
Replies: 43
Views: 17576

Re: JD Mellberg 8% Lifetime Return Claim - Legitimate?

I've gotten a bunch of emails from J Melberg - on special type of hybrid annuities, annuities paying 8%. When I checked immediate annuities, the rate of 8% is shown (actually 7.67%), but only if your 70 years old ( with no death benefit or co beneficiary ). Perhaps they're a umbrella firm of WAAA (...
by Clive
Sun May 29, 2016 5:41 pm
Forum: Investing - Theory, News & General
Topic: How much do costs matter?
Replies: 24
Views: 1486

Re: How much do costs matter?

I've heard some partake in stocks for fun and the benefit of others.

8% nominal, 2% in costs and taxes, 4% inflation, 2% from buying high/selling low. 100% thrill (risk) for zip.
by Clive
Thu May 26, 2016 12:08 pm
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 43
Views: 5943

Re: Jack Bogle - Two Fund Portfolio

Standard advice is to focus on total return, not yield. Standard advice is also to rebalance. Rebalancing to 90/10 is not easy if stocks halve in value. After five years of selling bonds in order to avoid selling stocks, you'd have no bonds left. 100% equities is rather aggressive. If a downturn co...
by Clive
Wed May 25, 2016 4:17 am
Forum: Investing - Theory, News & General
Topic: The Nominal Price Illusion
Replies: 6
Views: 902

Re: The Nominal Price Illusion

Wildebeest wrote:I wonder what it is about investing in stock market you want to buy when the market is up and sell when it is down.

... and transition to the complete opposite when they go to the grocery market!
by Clive
Mon May 23, 2016 7:13 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing in Retirement.
Replies: 35
Views: 3111

Re: Rebalancing in Retirement.

The Trinity Study data suggests that historically taking 4% the first year, adjusting for inflation each year, taken from a 50/50 stock/bond portfolio had a 100% success rate for 25 year periods across years 1926 to 1995 https://www.bogleheads.org/wiki/Safe_withdrawal_rates. Enough to see a 65 year ...
by Clive
Mon May 23, 2016 6:48 pm
Forum: Investing - Theory, News & General
Topic: Only 1/4 of stock held in taxable accounts
Replies: 13
Views: 1716

Re: Only 1/4 of stock held in taxable accounts

Could it in part be a consequence of tax harvesting. Core long term (forever) buy and hold outside of tax efficient (capital gain step up upon death), and profitable 'trades' inside tax efficient. Holding half of stock outside of tax efficient, half inside tax efficient, and if 50/50 stock/bonds and...
by Clive
Sun May 22, 2016 4:32 pm
Forum: Investing - Help with Personal Investments
Topic: When to sell Berkshire?
Replies: 24
Views: 2553

Re: When to sell Berkshire?

BRK-A's 4 largest holdings are WFC, AXP, IBM and KO. Not sure of the weightings, but if you equal weight all four and compare (total returns) to BRK-A since 1990

Image
by Clive
Sat May 21, 2016 6:10 pm
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 28
Views: 1927

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

For US data : Using Robert Shiller's yearly data http://www.econ.yale.edu/~shiller/data.htm, stock total return, inflation and bonds formed as the simple rolling average of 10 years x 10 year Treasury yields (10 year Treasury Ladder) http://investorshub.advfn.com/uimage/uploads/2016/5/21/kkgykt.png ...
by Clive
Sat May 21, 2016 4:30 pm
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 28
Views: 1927

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

Thanks, Clive - can you please share the source for that table? Also, I was interested in your demonstration of the value of gold in a(n historic) UK portfolio, and wonder if you have similar data from other nations? At the end of the day, gold is a currency, and it will naturally have performed be...
by Clive
Sat May 21, 2016 12:06 pm
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 28
Views: 1927

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

Clive, thanks for the very helpful post. This site and academic research tend to be US-centric for obvious reasons, but basing one's investment decisions purely on US results will lead to suboptimal results if the US behaves more like the UK in the next century. I would be interested to read other ...
by Clive
Sat May 21, 2016 11:56 am
Forum: Investing - Theory, News & General
Topic: Carl Icahn Is Betting Big on a Stock Market Crash
Replies: 32
Views: 7115

Re: Carl Icahn Is Betting Big on a Stock Market Crash

To put this short position in context, finance blog Zero Hedge compared Icahn Enterprises’ portfolio to what it had considered to be the most bearish hedge fund, Horseman Global, which has profitably run a short book for four years. Horseman’s net short position is just 98%, far less than Icahn’s 1...
by Clive
Sat May 21, 2016 11:36 am
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 28
Views: 1927

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

Personally, I will be holding an equity portfolio of global stocks (not just my home country USA) I believe something like 50% of the S&P500 sales/earnings/profits are sourced from foreign business activity. Pretty much a relatively low cost/tax efficient 'global' already. Our UK FTSE100 index ...
by Clive
Sat May 21, 2016 11:20 am
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 28
Views: 1927

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

are the majority of UK investors holding such a portfolio? Broadly buying a home and having a inflation linked pension were the dominant UK investments. The rest being invested either in cash deposits (building society accounts where the 'bank' lends mortgages and depositors receive interest) or Gi...
by Clive
Sat May 21, 2016 8:36 am
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)
Replies: 28
Views: 1927

Re: Stocks, Bonds, and "Real Assets" (TIPS, REITs, Commodities)

Commodities and Gold have exceedingly low long-term returns and I am not convinced they are worth investing in over a long term. Sure, they will add some pop if you have the right economic situation but I cannot see them adding value over the long term. From a UK investors perspective (i.e. GB Poun...
by Clive
Fri May 20, 2016 6:38 am
Forum: Investing - Theory, News & General
Topic: safe alternative to stock market
Replies: 61
Views: 5740

Re: safe alternative to stock market

Bridgewater 'safe' is 10% gold, 20% notes (short term), 30% bills, 40% TIPS. Dial up the risk a little to 10% gold, 20% stock, 30% short term treasury, 40% TIPS and ... https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=1972&endYear=2015&initialA...
by Clive
Fri May 20, 2016 6:19 am
Forum: Investing - Theory, News & General
Topic: Q: 1981, flawed small cap data
Replies: 2
Views: 400

Re: Q: 1981, flawed small cap data

Berkshire Hathaway has large investments in four stocks, can't recall the exact weightings/proportions but a equal amount of each of those four compared to BRK-A stock since 1990 and ... http://tinyurl.com/zfa6tto more or less the same. Cap weighted indexes tend to be similar to that, heavy in relat...
by Clive
Wed May 04, 2016 7:22 pm
Forum: Investing - Theory, News & General
Topic: Predicting the future
Replies: 10
Views: 1264

Re: Predicting the future

Assuming the past performance of funds is not a good predictor of future performance, isn't it reasonable too to conclude that the past performance of the larger market is not a good predictor of its own future, long term? The past 200 years of stock market performance have been dominated by yester...
by Clive
Wed May 04, 2016 6:00 pm
Forum: Investing - Theory, News & General
Topic: Why not a 2 fund portfolio like Bogle suggests
Replies: 45
Views: 6451

Re: Why not a 2 fund portfolio like Bogle suggests

blevine wrote:but I have often said "invest in the US, live in Europe".

I'm living the dream :)

Clive (from London)
by Clive
Wed May 04, 2016 5:57 pm
Forum: Investing - Theory, News & General
Topic: Why not a 2 fund portfolio like Bogle suggests
Replies: 45
Views: 6451

Re: Why not a 2 fund portfolio like Bogle suggests

Why not just S&P500 and a treasury barbell, 25 year initial, roll when down to 15 years remaining into another 25 year (20 year average), coupled with a 5 year ladder at the short dated end (cash deposits). http://ei.marketwatch.com//Multimedia/2015/08/19/Photos/ZH/MW-DS526_sp_reg_20150819104334...
by Clive
Wed May 04, 2016 3:37 pm
Forum: Investing - Theory, News & General
Topic: Longer Re-Balancing Periods?
Replies: 18
Views: 1513

Re: Longer Re-Balancing Periods?

50/50 TSM/TBM since 1972 Non rebalanced https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&TotalBond1=50&portfolio3=Custom&portfolio2=Custom&portfolio1=Custom&annualOperation=0&TotalStockMarket1=50&initialAmount=10000&endYear=2015&mode=2&i...
by Clive
Sat Apr 30, 2016 2:42 pm
Forum: Investing - Theory, News & General
Topic: “Markets Have ‘Borrowed’ Returns from the Future”
Replies: 17
Views: 2668

Re: “Markets Have ‘Borrowed’ Returns from the Future”

That's probably accurate. To some extent that's the Fed's job, to smooth out the boom and bust cycle. The only problem is they create far more boom and bust cycles than they smooth out. I agree with the premise of this article. Expected returns are; 1. Cash = 0% 2. Bonds = 2% 3. Stocks = 4% (nomina...
by Clive
Sat Apr 30, 2016 2:24 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 175
Views: 9679

Re: dividend stocks

Dividends are mostly enforced (paid) across the board, and not desired by all. It would be nice to have a more balanced choice across the spectrum rather than non dividend stocks tending to be in one/few sectors (tech). If something is thrust upon you, you have to suspect that its in someone's best ...
by Clive
Fri Apr 29, 2016 4:56 pm
Forum: Investing - Theory, News & General
Topic: Revisit ETF taxation for Europeans (and other NRA)
Replies: 17
Views: 1512

Re: Revisit ETF taxation for Europeans (and other NRA)

A big issue with US-domiciled ETFs in my opinion is that in case of death the US will levy up to 40% estate tax on assets over the value of $60,000 USD. ... except if you are domiciled in one of the countries with which the US has an estate tax treaty . The most common rule for non-resident aliens ...
by Clive
Fri Apr 29, 2016 4:44 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 175
Views: 9679

Re: dividend stocks

I am not disputing the fact that a stock price drops when a company pays a dividend. All I am saying is that I prefer to take part of my return as dividends because it works best for my situation. And I just have Vanguard send $3,000 a month to my bank account from VSMGX. How are we different? L. B...
by Clive
Fri Apr 29, 2016 2:53 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 175
Views: 9679

Re: dividend stocks

I am not disputing the fact that a stock price drops when a company pays a dividend. All I am saying is that I prefer to take part of my return as dividends because it works best for my situation. For many others it may be more tax efficient to extract a return via capital gains (selling some share...
by Clive
Fri Apr 29, 2016 12:30 pm
Forum: Investing - Theory, News & General
Topic: Revisit ETF taxation for Europeans (and other NRA)
Replies: 17
Views: 1512

Re: Revisit ETF taxation for Europeans (and other NRA)

Fabio wrote:I may be wrong here, but from what I can tell this tax is UK specific.

Certainly looks so (UK specific) http://download.pwc.com/ie/pubs/2015-eu ... orting.pdf
by Clive
Fri Apr 29, 2016 11:14 am
Forum: Investing - Theory, News & General
Topic: Revisit ETF taxation for Europeans (and other NRA)
Replies: 17
Views: 1512

Re: Revisit ETF taxation for Europeans (and other NRA)

Its not a tax that the fund applies, its a tax that you yourself have to pay/declare. TD suggest that excess reportable 'can' apply to accumulation (dividend reinvestment). Its my understanding it 'does' apply, but I guess they're much more knowledgeable than me. https://www.tddirectinvesting.co.uk/...
by Clive
Fri Apr 29, 2016 7:13 am
Forum: Investing - Theory, News & General
Topic: Selling in May and Walking Away?
Replies: 105
Views: 8169

Re: Selling in May and Walking Away?

In the UK we have a "sell in May and come back on St. Leger Day" saying http://www.telegraph.co.uk/finance/personalfinance/investing/10780036/Does-it-really-pay-to-sell-in-May-and-came-back-on-St.-Leger-Day.html We also have a yearly capital gains tax allowance, around $15,000 of capital g...
by Clive
Fri Apr 29, 2016 4:06 am
Forum: Investing - Theory, News & General
Topic: Revisit ETF taxation for Europeans (and other NRA)
Replies: 17
Views: 1512

Re: Revisit ETF taxation for Europeans (and other NRA)

..As Ireland does not withhold any taxes on capital gain or dividends paid by Ireland-domiciled UCITS ETFs, in our country is much more tax efficient to use only accumulating Ireland-domiciled ETFs (so Vanguard is excluded): this way you do not have to pay any taxes on dividends, neither the 15% di...
by Clive
Wed Apr 27, 2016 9:21 am
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 87
Views: 8605

Re: Why Are Real Interest Rates So Low Worldwide?

So if a Central Bank is "credible" markets believe, eventually, that it will reign in this inflation creating money out there . And so they act as if any rise in money supply and inflation is only temporary . Taking a simplified UK case in 2007 we had around £500B of debt, QE after 2008 r...
by Clive
Wed Apr 27, 2016 6:37 am
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 87
Views: 8605

Re: Why Are Real Interest Rates So Low Worldwide?

Because money as a medium for exchange is worth little. ECB (Euro) printing 1 trillion/year more euros for instance. Backed by nothing other than a promise. Prices of real assets are highly priced in money terms, and higher prices means lower yields. Dow/Gold ratio is around 14 versus a longer term ...
by Clive
Mon Apr 25, 2016 4:47 pm
Forum: Investing - Theory, News & General
Topic: What's a good number to use to approximate money market returns
Replies: 7
Views: 903

Re: What's a good number to use to approximate money market returns

Depending upon the liquidity you require, a 5 year treasury ladder has 20% rolling into cash each year, and when each rung is held to maturity provides a reward comparable to the rolling average of the last 5 years 5-year yield. from yahoo Month, 5 year yield, rolling average of last 5 years 5-year ...
by Clive
Mon Apr 25, 2016 9:58 am
Forum: Investing - Theory, News & General
Topic: Dow 100,000
Replies: 33
Views: 5257

Re: Dow 100,000

Warren Buffett thinks the average person (no matter what age) should hold enough in cash to feel secure and put the rest in an index fund that buys America. . . I think if you have a solid pension that you can live on for life and you want to leave money behind, a 100% stock portfolio is not someth...
by Clive
Mon Apr 25, 2016 5:53 am
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 175
Views: 9679

Re: dividend stocks

Buffett suggests you synthesise a dividend - by selling some shares. If I sell $10,000 of stock that I paid $9,000 for then I have a tax liability on the $1,000 capital gain to have raised $10,000 (gross) cash in hand. A $10,000 dividend in hand is liable to more tax. With synthetic dividends you ge...
by Clive
Sat Apr 23, 2016 7:58 am
Forum: Investing - Theory, News & General
Topic: Explaining a Total Return Withdrawal Strategy to Clients
Replies: 24
Views: 2668

Re: Explaining a Total Return Withdrawal Strategy to Clients

Clive, there are brokers where with at least $200k invested, maybe even $100k, you can sell a complete list of stocks or ETF's for zero transaction costs. I did see one such account option some years back but sadly it was for US residents only (I'm UK) at that time. Can't recall the name of the com...
by Clive
Sat Apr 23, 2016 7:42 am
Forum: Investing - Theory, News & General
Topic: Did TIPS Really work?
Replies: 41
Views: 3678

Re: Did TIPS Really work?

TIPS, by eliminating inflation risk Eliminate consumption price inflation rate risk (subject to costs/taxes). Of house price, stock price, consumer price, gold price inflation rates in the UK, consumer price inflation lagged the most, perhaps as a consequence of technology (robotics). If the ultima...
by Clive
Fri Apr 22, 2016 3:48 pm
Forum: Investing - Theory, News & General
Topic: Explaining a Total Return Withdrawal Strategy to Clients
Replies: 24
Views: 2668

Re: Explaining a Total Return Withdrawal Strategy to Clients

Ignoring Taxes, and market movements for now. Seems like this discussion is missing out about transaction fees. If dividend from fund distribution is left uninvested, then its cash and could be withdraw without transaction costs (assuming no administration fees involve). In addition, the dividend w...
by Clive
Fri Apr 22, 2016 3:52 am
Forum: Investing - Theory, News & General
Topic: The Rarely Noted "Real Returns"
Replies: 45
Views: 5148

Re: The Rarely Noted "Real Returns"

From a UK investors perspective, the rates of price inflation of : consumer prices, house prices excluding imputed rent, UK stock prices excluding dividends, US stocks GB£ adjusted price only (excluding dividends), gold (£) and UK T-Bills http://investorshub.advfn.com/uimage/uploads/2016/4/22/xbmopi...
by Clive
Thu Apr 21, 2016 5:59 pm
Forum: Investing - Theory, News & General
Topic: If past performance doesn't indicate future performance, why buy stocks?
Replies: 43
Views: 4278

Re: If past performance doesn't indicate future performance, why buy stocks?

What makes us think stocks will have a greater than zero return? For 100+ years for a UK top rate taxpayer, stocks yielded 0% real. And that assumes a degree of survivorship bias. Dow for instance devised three indexes, Utility, Transport and Industrial averages, the best of which has evolved to be...
by Clive
Thu Apr 21, 2016 10:38 am
Forum: Investing - Theory, News & General
Topic: Should you follow the 4% rule?
Replies: 23
Views: 2955

Re: Should you follow the 4% rule?

Tyler9000 wrote:Image
Image

Beware of the 'does not include taxes and fees' footnotes. Can make a significant difference, more so if taxes tend to rise as inflation/interest rates rise.
by Clive
Wed Apr 20, 2016 4:40 pm
Forum: Investing - Theory, News & General
Topic: The Rarely Noted "Real Returns"
Replies: 45
Views: 5148

Re: The Rarely Noted "Real Returns"

US Inflation rates since 1890 Asset, Gain Factor, Annualised % rate House Prices 49.3 3.17% Stocks 377.0 4.86% Gold 51.3 3.20% CPI 30.7 2.78% Average 127.1 3.95% If you intend to spend on consumption then using CPI is fine. Spending on anything else and you may need to revise the 'inflation' figure ...
by Clive
Sun Apr 17, 2016 6:02 pm
Forum: Investing - Theory, News & General
Topic: dividends: what am I missing?
Replies: 16
Views: 1680

Re: dividends: what am I missing?

Consider two retirees that have 25 years to spend their (taxable) nest egg. They pay nonzero amounts of tax on dividends and capital gains.. A has a fund that distributes 3% in dividends every year, which he spends. B has a fund that generates the same total return but pays no dividend. She sells 3...
by Clive
Sun Apr 17, 2016 3:23 pm
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

A difference is perhaps we've had gold as legal tender for much longer in the UK. Actually, I was wondering about the history of the price of gold in the UK against the historical equity & bonds returns, all quantities expressed in local currency (GBP). I have the equity & bonds side of thi...
by Clive
Sun Apr 17, 2016 10:59 am
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

Not sure I truly followed the reasoning, but it seems a rather contorted way to describe a (possible) rebalancing bonus due to negative correlation. Why not call a duck a duck? What bugs me with gold is that: a) there is no meaningful history before 1972 (cf. parity) b) the 1972+ history is totally...
by Clive
Sun Apr 17, 2016 10:39 am
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

The problem with the gold strategy is that gold has a very high risk of its own. You could follow the same strategy with long-term TIPS, rather than gold, with less risk; TIPS are guaranteed to track inflation, and you can rebalance between stock and TIPS. TIPS are guaranteed to track inflation - g...
by Clive
Sun Apr 17, 2016 10:34 am
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

I chose 1975-2015: 50% TSM/50% TBM vs. 50% TSM/50% gold https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&TotalBond1=50&portfolio3=Custom&portfolio2=Custom&portfolio1=Custom&annualOperation=0&TotalStockMarket2=50&TotalStockMarket1=50&initialAmou...
by Clive
Sun Apr 17, 2016 4:05 am
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

After its peak there was inflation in Roman - and where whilst Legionnaires pay doubled, prices trebled. Silver coins were also debased (less silver). Copper nose Henry VIII debased coins in England by mixing copper into coins (1544–47) so as to only be one-third silver and two-thirds copper, such t...
by Clive
Sun Apr 17, 2016 3:36 am
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

Too complex for my old brain. But just at a glance it appears clive is a gold bug looking for a rational to justify it. Comparing 66/34 stock/gold with 50/50 stock/bond and historically since 1972 they've achieved similar reward . Taxflation risk with stock/gold historically was considerably lower ...
by Clive
Sun Apr 17, 2016 2:46 am
Forum: Investing - Theory, News & General
Topic: Gold 2% dividend
Replies: 22
Views: 2714

Re: Gold 2% dividend

Simplifying, assuming a 5% real rate from equity, 0% real from gold, a initial 66.6/33.3 equity/gold weighting bought and held for 30 years results in ((( 1.05^30 ) x 0.666 ) + 0.333 )^(1/30) annualised gain factor = 1.04 (4%); And proportioned = ( 0.666 x 5 ) + ( 0.333 x 2 ) = 4 i.e. gold virtual ...

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