Search found 8684 matches

by HomerJ
Sat Jul 30, 2016 3:28 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

[url]This has already happened once before... In 1996, markets were insanely overvalued. CAPE was above 25 for the first time since right before the Great Depression.[/url] This misstates the case. With a CAPE 10 of 25 you get an expected return in real terms of about 4.4. So that is highly valued,...
by HomerJ
Sat Jul 30, 2016 11:34 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

We do know if the markets are highly valued. US markets, both stock and bond markets are very highly valued. Especially the bond market. What we don't know is are they TOO HIGHLY valued and we don't know the direction of the next move. Larry Larry, You are making predictions that are yet in evidenc...
by HomerJ
Sat Jul 30, 2016 9:21 am
Forum: Personal Consumer Issues
Topic: Timeshares, again
Replies: 23
Views: 1508

Re: Timeshares, again

Resales should be purchased for pennies on the dollar, not quarters. The more expensive of our two resales cost us $2400, and I think we overpaid, but I specifically wanted that property due to the low Maintenance fees , and got almost a full year of MF prepaid as part of the deal. List price for t...
by HomerJ
Fri Jul 29, 2016 12:53 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Rahulk You are correct to look at the REAL return but not correct in your conclusion Historically stocks got 7% real, now best estimates are around 4% real, so 3% lower. And bonds got 2%+ real and now say 0 or more likely negative So if 4% worked in past and both stock and bond returns are both 2% ...
by HomerJ
Thu Jul 28, 2016 9:27 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Or isn't it that exact of a science. None of this is an exact science... If you take nothing else away from this thread, understand that. "Expected" returns of 4% really mean 4% plus or minus 5%. Or maybe plus or minus 10%... I don't know. Note they will never tell you the plus or minus.
by HomerJ
Thu Jul 28, 2016 8:58 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

This is simple math and simple common sense. It was simple math and simple common sense in 2011 when Wade Pfau starting spouting this nonsense. And so far markets have returned far better than 4%... Look, I don't want to fight with you, but you cannot ignore the 1% fee assumption in that paper. Do ...
by HomerJ
Thu Jul 28, 2016 3:10 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

You realize that the 4% withdrawal rate is an assumption about expected returns? How can it not be? When you cite the 4% withdrawal rate you are assuming that returns going forward will not be worse than historical worse case scenarios, which is clearly an assumption about expected returns. You are...
by HomerJ
Thu Jul 28, 2016 12:11 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

I dug this supporting evidence up. It's from a Morningstar study back in 2013 when valuations were lower and bond yields higher, so would look worse today. Their findings fully support the idea that 4% is not conservative by a long shot. 50% odds of failure is not conservative. I would want to see ...
by HomerJ
Thu Jul 28, 2016 11:17 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Homer, you are completely misunderstanding the issues here, perhaps my inability to explain it well but will try. disagree completely. Why do I need to estimate returns? I'm taking 4% the first few years of retirement regardless of valuations. I will be 50/50 regardless of valuations. Those are alr...
by HomerJ
Thu Jul 28, 2016 10:06 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Valuations matter and matter a whole lot. my guess is that my allocation to stocks would be 73% to 74% now if I had done nothing as compared to the 66% or so that it is now. That doesn't seem like much of a change if valuations really matter a whole lot. Besides, expected returns have been low for ...
by HomerJ
Thu Jul 28, 2016 9:55 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Who here changes their AA every year based on "estimated" returns?

Age to retirement is a FAR FAR larger component of determining AA than valuations or estimated returns.

You sound like a bunch of market timers.
by HomerJ
Thu Jul 28, 2016 9:48 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

But saying valuations don't matter is by definition incorrect. Without them you cannot estimate returns in any reasonable way. And without estimating returns you cannot reasonably determine an appropriate AA. I disagree completely. Why do I need to estimate returns? I'm taking 4% the first few year...
by HomerJ
Thu Jul 28, 2016 1:02 am
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

In order to define "enough" you must have an assumption about expected returns Nope, because we advocate a 4% withdrawal rate or lower around here. So you don't care what the "expected returns" are because you are already planning for worst-case. If valuations were low, I would ...
by HomerJ
Wed Jul 27, 2016 9:00 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Forget to add that this quote is also very wrong, without question IMO There is ALWAYS a risk of a stock market crash. It doesn't matter if the chance of it occurring is higher or lower; the risk is always there. Yes the risks of a crash are always there no matter what valuations are. But the risks...
by HomerJ
Wed Jul 27, 2016 4:55 pm
Forum: Personal Finance (Not Investing)
Topic: How many folks choose to give inheritance to their children in unequal portions?
Replies: 185
Views: 14536

Re: How many folks choose to give inheritance to their children in unequal portions?

Might be a moot point because my wife is a lot younger than I am (17 years) and unless something unexpected happens she should outlive me by quite a few years, in which case she legally gets it all any way and will be the one to divide it up. This is a bad idea. How are your other kids going to fee...
by HomerJ
Wed Jul 27, 2016 4:35 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

However, a a person or couple near retirement or in early retirement could be devastated by a large market correction occurring -- much more so than say a 30, 40 or 50 year old. My point is that this near retirement group may wish to look at the possibility that the high PE or high CAPE may mean th...
by HomerJ
Wed Jul 27, 2016 4:21 pm
Forum: Personal Finance (Not Investing)
Topic: Quit work and become SAHM - advice? regrets?
Replies: 55
Views: 5306

Re: Quit work and become SAHM - advice? regrets?

Advice: life rewards those who are willing to take a chance. There are many different variables between your story and the OP. By definition, a chance means it can go both ways. Some people get rewarded, some do not. Good news is we can usually try again. But every roll of the dice is not automatic...
by HomerJ
Wed Jul 27, 2016 3:06 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

jay22 wrote:Nobody knows nothing when it comes to the markets.


I like the phrase "nobody knows enough".
by HomerJ
Wed Jul 27, 2016 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Seeking wisdom on a career crossroad
Replies: 26
Views: 1906

Re: Seeking wisdom on a career crossroad

I am currently in a crossroad where I have to make a decision regarding a job change. Many here are much older and wiser than myself so I thought it to be prudent to get some opinions. I currently work for Company A in sales. I've been with Company A for 6 years and have developed relationships wit...
by HomerJ
Wed Jul 27, 2016 2:31 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

lack_ey wrote:If you're saying that CAPE is completely meaningless and has zero predictive power, this is also a fairly extreme point of view.


You are correct. My apologies.

But CAPE is not predictive enough for anyone to change their investments based on it.
by HomerJ
Wed Jul 27, 2016 12:59 pm
Forum: Investing - Theory, News & General
Topic: John Bogle's home
Replies: 36
Views: 6407

Re: John Bogle's home

Honestly, I'm from a different generation than my parents. Heh, that's basically the definition of "generation" isn't it? the one thing I really dislike is dealing with trees.. they get really big, and are really expensive to trim or fell.. and in a big city they are a huge handicap, if n...
by HomerJ
Wed Jul 27, 2016 12:29 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 133
Views: 6727

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

CAPE is meaningless. It was built using data from 1900 (or so) through 1988. 1988-2016 looks very different from the data up to 1988. Since 1992, CAPE has been above 20 for nearly 24 straight years (dropped below briefly in 2009). Shiller tried to use his Nobel-prize winning system to predict return...
by HomerJ
Wed Jul 27, 2016 12:06 pm
Forum: Investing - Theory, News & General
Topic: How can markets keep going up ?
Replies: 85
Views: 5121

Re: How can markets keep going up ?

Human capital.

Every day, billions of people do work that adds to the wealth of the world.
by HomerJ
Tue Jul 26, 2016 4:41 pm
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

What strawman? Well, the one you're going lay out in the rest of the message. Let me explain my reasoning for my comment. He says "I have 500x current expenses, but I don't know if I can retire." We all say "What?" He says "Oh, well, I'm not sure how much my retirement expe...
by HomerJ
Tue Jul 26, 2016 4:02 pm
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

MP1233 wrote: However, I was happy with my job and I worked with great people. Retirement for me did not mean leaving the "prison" or "getting my life back."


So why did you quit? You must have gained something in return for all that money.
by HomerJ
Tue Jul 26, 2016 2:29 pm
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

His numbers are ridiculous. His "scenarios" include 90% of his $10 million dollars (or whatever he has, but it has to be millions and millions) being spent on health care. One can come up with better estimates than "somewhere between one dollar and 9 million dollars" And that's ...
by HomerJ
Tue Jul 26, 2016 12:49 pm
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

You can control the maturity duration . Rising interest rates isn't really a problem. I welcome rising interest rates... I'd take the short-term hit, followed by years of higher yields. Inflation is the problem. But you can semi-control that too with short maturities duration , or inflation-adjuste...
by HomerJ
Tue Jul 26, 2016 12:46 pm
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

So what you are saying is that you don't have 500x expenses. Because you don't know what your expenses will be. That's not what was said, so it doesn't make sense to refute something that wasn't said. With assets now at ~500X my current yearly (very frugal) expenses (excluding taxes) Nothing was sa...
by HomerJ
Tue Jul 26, 2016 12:33 pm
Forum: Personal Consumer Issues
Topic: What is your plan if you lose job tomorrow ??
Replies: 71
Views: 5261

Re: What is your plan if you loose job tomorrow ??

In this age of uncertain economy/jobs what will you do if you loose job tomorrow? Assuming you have survival money for next 6 months and reasonable accumulation in stocks/retirement funds etc. the options are 1. look for another job : but uncertainity looms related to creepy boss, mean coworkers an...
by HomerJ
Tue Jul 26, 2016 8:44 am
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

There isn't much room for bond prices to go up from here because interest rates are already near zero. Let's clear up something, here. Bonds have a lot of room for much higher future total returns , which is what we care about! Yes, that is the relevant issue, so long as: 1. We can wait until matur...
by HomerJ
Tue Jul 26, 2016 8:39 am
Forum: Investing - Help with Personal Investments
Topic: Planning for the "new normal": how?
Replies: 42
Views: 3507

Re: Planning for the "new normal": how?

One thing that I struggle with when figuring out how much I'll need for retirement is the uncertainty about what the circumstances will be like when I retire. A rule like "25x annual expenses" is unlikely to cut it when I can't even know what those expenses will be, because I don't know w...
by HomerJ
Tue Jul 26, 2016 12:27 am
Forum: Investing - Help with Personal Investments
Topic: Planning for the "new normal": how?
Replies: 42
Views: 3507

Re: Planning for the "new normal": how?

A rule like "25x annual expenses" is unlikely to cut it when I can't even know what those expenses will be, because I don't know what the world will be . Live below your means. Try to save half your raises. Get that savings rate up to 15%+ by your 30s. Keep saving half your raises and get...
by HomerJ
Tue Jul 26, 2016 12:00 am
Forum: Investing - Help with Personal Investments
Topic: 4% rule - Asset Allocation
Replies: 66
Views: 5823

Re: 4% rule - Asset Allocation

I heard somewhere that with the 4% rule, along with the inflation added to withdrawal, a 1% mgmt fee was figured in also. Is this right? Wade Pfau wrote another paper in 2010-2011 about how 4% doesn't work anymore, but one of his assumptions that was people were paying 1% mgmt fees. Since we Bogleh...
by HomerJ
Mon Jul 25, 2016 9:12 pm
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

No I was looking for the point in people lives where the pull of money was no longer strong enough to keep them in the workforce. TimeLord, I think this is only half of the question. The need for a bigger nest egg can certainly pull you back from retirement and give you an incentive to keep working...
by HomerJ
Mon Jul 25, 2016 5:24 pm
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

LOL, you "think" the margin of safety is there?? Time will tell if that margin is sufficient? You actually ran a firecalc simulation. You weren't sure if 500 years of expenses was enough? Sorry Homer, don't want to take this thread OT. No, I was not being flippant and I am not stupid. The...
by HomerJ
Mon Jul 25, 2016 3:30 pm
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

With assets now at ~500X my current yearly (very frugal) expenses (excluding taxes), I think the margin of safety is there. A 50% decline in stocks would still have me at 250X my yearly expenses which seems to pass every firecalc simulation. Such a 50% loss would remove bulk of my taxes with TLH. T...
by HomerJ
Mon Jul 25, 2016 2:52 pm
Forum: Investing - Help with Personal Investments
Topic: 4% rule - Asset Allocation
Replies: 66
Views: 5823

Re: 4% rule - Asset Allocation

I read the tables as presented to say that historically, if you had withdrawn 4% on a 70/30 portfolio (I assume adjusted for inflation), you would have run out of money only 2% of the time (i.e., 98% success rate). The good news is that a 50/50 portfolio is actually safer (100% success rate). But I...
by HomerJ
Mon Jul 25, 2016 10:30 am
Forum: Investing - Theory, News & General
Topic: Are you feeling uncomfortable? [with your investments]
Replies: 42
Views: 4210

Re: Are you feeling uncomfortable? [with your investments]

I've been uncomfortable for the last 20+ years but that's been part of the plan. My 401k (which is a significant portion of my portfolio) is currently at 93% index mutual funds at age 49 (next week) and I just keep in mind I hopefully have another 40 years to ride out any tugs at my emotion watchin...
by HomerJ
Mon Jul 25, 2016 1:11 am
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

One should always have a solid emergency fund in case you lose your job at the same time stocks are crashing (and losing your job is more likely during a recession, so these two things are not necessarily independent incidents). You don't want to be forced to sell stocks after they've dropped 50% to...
by HomerJ
Mon Jul 25, 2016 1:04 am
Forum: Investing - Theory, News & General
Topic: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?
Replies: 178
Views: 9014

Re: Help Me Understand: Why Shouldn't AA Be 100% Stocks During Accumulation Phase?

You were probably involved in the market around 2008, no? I wasn't. I entered the market at 45 yrs of age, only 10 months ago... What were you invested in before now? If you avoided the stock market for your entire life, why are you now wanting to put everything in it? You should definitely questio...
by HomerJ
Mon Jul 25, 2016 12:42 am
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

For me today was a quiet day with family and pets and a nap, it was a good day that would have not been made any better by not going to work tomorrow. I spent the last week at the lake with family and friends... I have to go to work tomorrow... Every day last week was a better day than today, becau...
by HomerJ
Mon Jul 25, 2016 12:36 am
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

I worry far more about ending up in a Medicaid facility than dropping dead tomorrow because that will be the day I will no longer worry about anything. You say this a lot. You seem to think that dying at your desk is no mistake because when you're dead you can't feel regret. There's a small nugget ...
by HomerJ
Sun Jul 24, 2016 9:41 pm
Forum: Personal Finance (Not Investing)
Topic: Quit work and become SAHM - advice? regrets?
Replies: 55
Views: 5306

Re: Quit work and become SAHM - advice? regrets?

How old are your kids?
by HomerJ
Sun Jul 24, 2016 8:26 pm
Forum: Investing - Theory, News & General
Topic: Reliving the Nightmare of the Crisis
Replies: 119
Views: 8422

Re: Reliving the Nightmare of the Crisis

Yep, I feel really stupid every time I check my balances. :? Do not confuse outcome with strategy. The guy who wins at roulette can show off a large wad of cash. Doesn't mean one should follow his system. What about the guy who has won at roulette several times? Besides, history and math is against...
by HomerJ
Sun Jul 24, 2016 8:19 pm
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

If you tell me you retired at 55 knowing that you could double your portfolio or more by working until 62 then I would conclude you must have felt very sure and passionate about your decision and the path you were taking in life. Do you have zero friends that died at 62? My wife's best friend... a ...
by HomerJ
Sun Jul 24, 2016 8:12 pm
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

After reading posts about SWR, need for "risk" in rising equity portfolios in retirement, negative bond yields and rising equity valuations, I wonder how many people delay retirement as a path of least resistance. In other words, working longer (being older) and amassing more is perceived...
by HomerJ
Sun Jul 24, 2016 8:08 pm
Forum: Investing - Theory, News & General
Topic: Reliving the Nightmare of the Crisis
Replies: 119
Views: 8422

Re: Reliving the Nightmare of the Crisis

NMJack wrote:Yep, I feel really stupid every time I check my balances. :?


Do not confuse outcome with strategy.

The guy who wins at roulette can show off a large wad of cash. Doesn't mean one should follow his system.
by HomerJ
Sun Jul 24, 2016 10:47 am
Forum: Investing - Theory, News & General
Topic: Reliving the Nightmare of the Crisis
Replies: 119
Views: 8422

Re: Reliving the Nightmare of the Crisis

TheTimeLord wrote:
HomerJ wrote: Don't tell me it's impossible that you'll lose your job and won't be able to find a comparable one for years.


This happens everyday, less in a good economy more in a bad one but people can fall down and never get back up. And it has been happening for decades.


Exactly.
by HomerJ
Sun Jul 24, 2016 9:19 am
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

Say your doctor tells you that you have cancer, and you only have 6 months to live. Now say he can give you 10 more years to live if you give him half your money. How much is time worth to you? Sure you do it and then you delay retirement while you earn it back. No doubt health trumps money, that d...
by HomerJ
Sun Jul 24, 2016 12:05 am
Forum: Investing - Help with Personal Investments
Topic: Early retirees, how much did you leave on the table?
Replies: 184
Views: 11789

Re: Early retirees, how much did you leave on the table?

Say your doctor tells you that you have cancer, and you only have 6 months to live.

Now say he can give you 10 more years to live if you give him half your money.

How much is time worth to you?

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