Search found 8121 matches

by HomerJ
Sat Feb 13, 2016 5:34 pm
Forum: Investing - Theory, News & General
Topic: "Duration" of S & P 500 (as of 2-12-16)
Replies: 32
Views: 2057

Re: "Duration" of S & P 500 (as of 2-12-16)

Trueblueky wrote: "I guess what struck me most was the chart that has someone six years from retirement at 6/43 = 14% stocks at age 60. Following that logic, gives 1/43 = 2% one year from retirement and 0/43 the next year. My personal AA is driven by DW still being under 60. She may have 40 mo...
by HomerJ
Sat Feb 13, 2016 5:32 pm
Forum: Investing - Theory, News & General
Topic: "Duration" of S & P 500 (as of 2-12-16)
Replies: 32
Views: 2057

Re: "Duration" of S & P 500 (as of 2-12-16)

Homer J, you are an “expert”. Models beat experts. Here’s Wes Gray quoting Paul Meehl on “experts” vs models: “There is no controversy in social science that shows such a large body of qualitatively diverse studies coming out so uniformly in the same direction as this one [models outperform experts...
by HomerJ
Sat Feb 13, 2016 12:52 pm
Forum: Investing - Theory, News & General
Topic: "Duration" of S & P 500 (as of 2-12-16)
Replies: 32
Views: 2057

Re: "Duration" of S & P 500 (as of 2-12-16)

I am 58 years old with a goal of retiring around 66. The runway for me has now come into closer view. Based on the current "modified duration" of the US stock market, personalized time horizons for my three buckets, family history, and risk tolerance , I backed into a 30% stock allocation...
by HomerJ
Sat Feb 13, 2016 12:40 pm
Forum: Investing - Theory, News & General
Topic: "Duration" of S & P 500 (as of 2-12-16)
Replies: 32
Views: 2057

Re: "Duration" of S & P 500 (as of 2-12-16)

I have been incorporating the idea of equity duration into my planning as well. I think using equity duration as a planning tool reinforces two common sense investing ideas 1) long term stock stock investors should ignore short term movements similarly to how a long term bond holder should ignore s...
by HomerJ
Sat Feb 13, 2016 12:26 pm
Forum: Investing - Theory, News & General
Topic: "Duration" of S & P 500 (as of 2-12-16)
Replies: 32
Views: 2057

Re: "Duration" of S & P 500 (as of 12-04-15)

Of course, if your current portfolio management philosophy doesn't have a method to understand when “trends” have changed, how will you know when it is time to step away from the poker table? "[/i] It's extremely hard to know when "trends" have changed. There is no good method. The S...
by HomerJ
Fri Feb 12, 2016 7:25 pm
Forum: Investing - Help with Personal Investments
Topic: Is all that "rebalancing band trigger" stuff really any better than this?
Replies: 19
Views: 975

Re: Is all that "rebalancing band trigger" stuff really any better than this?

Poster wrote:If VTSAX is down more than other things, I plow more money into it for a while rather than other holdings.


That is rebalancing.

Your way is the best way actually, for taxable accounts.

Rebalancing is just about sticking close to your target AA.
by HomerJ
Fri Feb 12, 2016 4:47 pm
Forum: Personal Finance (Not Investing)
Topic: How much do you know about your extended families financial picture?
Replies: 27
Views: 2287

Re: How much do you know about your extended families financial picture?

I know my parents somewhat.... Their pensions and SS cover all of their expenses. They have some savings, but my impression is that it is mostly in CDs earning very little interest. My wife has no idea what her father has. He never talks about money. Really none of our business, so we don't ask eith...
by HomerJ
Fri Feb 12, 2016 2:52 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2754
Views: 547054

Re: U.S. stocks in freefall

Now, what happens when there is a real crisis of some sort? Inevitably there will be one at some point. It feels like markets could easily shed 50% or even more under such circumstances. It's an unpleasant reminder of just how stomach churning this game is. You should absolutely expect a 50% crash ...
by HomerJ
Fri Feb 12, 2016 2:46 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2754
Views: 547054

Re: U.S. stocks in freefall

visualguy wrote:I find it very disturbing that world markets react so radically even when there's nothing to panic about.


This is normal human behavior. This is not new.
by HomerJ
Fri Feb 12, 2016 2:45 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2754
Views: 547054

Re: U.S. stocks in freefall

I wasn't a member of this forum back in 2011, the last time a decline like this occurred (the 2011 decline was actually much worse than this one...so far). Where there a bunch of Broadstones and Visualguys around then too? Umm... read this thread you are posting in . It was started by a Broadstone ...
by HomerJ
Thu Feb 11, 2016 10:42 am
Forum: Personal Finance (Not Investing)
Topic: Vacation Homes
Replies: 59
Views: 5844

Re: Vacation Homes

They say money can't buy happiness, but money CAN buy a jetski, and I've never seen anyone looking sad while driving a jetski.

:)
by HomerJ
Wed Feb 10, 2016 10:30 am
Forum: Personal Finance (Not Investing)
Topic: Vacation Homes
Replies: 59
Views: 5844

Re: Vacation Homes

But I also saw them having to deal with home ownership stuff year after year, different neighbors come in with different ideas of what a "peaceful" lake is supposed to be like, disputes over property lines, pipes freezing, roof replacement and on and on. We'd go up some weekends and my da...
by HomerJ
Wed Feb 10, 2016 10:23 am
Forum: Investing - Help with Personal Investments
Topic: -24% Return over 2 years
Replies: 50
Views: 3927

Re: -24% Return over 2 years

A curious question here, what would one do in a situation like this when it is time to retire? Two years ago, you're killing it. High returns, all is well. Then all of a sudden your returns start dropping and you lose significant money as you're portfolio is very high dollar. For those of you who a...
by HomerJ
Tue Feb 09, 2016 10:56 am
Forum: Investing - Theory, News & General
Topic: What would you do differently, if you get twice the money in paycheck AND/OR twice in your portfolio ?
Replies: 13
Views: 763

Re: What would you do differently, if you get twice the money in paycheck AND/OR twice in your portfolio ?

Twice the paycheck is probably VERY different from twice the portfolio... Especially depending on how far along you are towards retirement. My wife and I did double our combined salary 5-10 years after we got married.. I would suggest doing what we did, and use half your raises to increase savings. ...
by HomerJ
Tue Feb 09, 2016 12:42 am
Forum: Personal Finance (Not Investing)
Topic: Vacation Homes
Replies: 59
Views: 5844

Re: Vacation Homes

I have several friends who own vacation homes 3 or so hours away. Every single one of them spend the vast majority of their time while at the vacation home maintaining them, doing construction or being there for outside workers to be able to get access and a big check at the end. The rest of us at ...
by HomerJ
Mon Feb 08, 2016 11:35 am
Forum: Investing - Theory, News & General
Topic: Are US Stocks Overvalued?
Replies: 18
Views: 1893

Re: Are US Stocks Overvalued?

You can't really make a case that 23.3 now is definitely not overvalued. Maybe it is, maybe it isn't. Stocks may indeed be overvalued at 23.3. I would however point out that in 1996, CAPE was above 25, and even though anyone who believed in Shiller's model thought stocks were EXTREMELY over-valued ...
by HomerJ
Mon Feb 08, 2016 11:27 am
Forum: Investing - Theory, News & General
Topic: Are US Stocks Overvalued?
Replies: 18
Views: 1893

Re: Are US Stocks Overvalued?

Taking a long view, it is hard to accept that the market would be overvalued given that the CAGR since 2000 (16 years) has only been about 4.4%. It's just as valid to say that the return since 1996 (20 years) has been 7.6% a year. Or the return since 1986 (30 years) has been 9.9% a year. Or the ret...
by HomerJ
Sun Feb 07, 2016 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Vacation Homes
Replies: 59
Views: 5844

Re: Vacation Homes

We bought a lake condo 3 years ago. Financially, we spend $250,000 on the condo, furnishing it, a boat lift, a boat, and a jetski. The on-going costs (HOA fees, property taxes, insurance, utilities) run us about $6000 a year. However, we rent it out for about $700 for 3 nights, 5 weekends a year... ...
by HomerJ
Sat Feb 06, 2016 12:38 am
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4434

Re: If SS covers expenses why invest?

Why do people always assume its so much cheaper to live in the rural south? My parents live on 110 acres in small but nice house with an amazing view of the Ozark foothills. The land and the house cost them $80,000 20 years ago... Might be worth $200k today... Not sure. Property taxes are $500 a ye...
by HomerJ
Sat Feb 06, 2016 12:33 am
Forum: Investing - Theory, News & General
Topic: Bogleheads investment philosophy at huge risk?
Replies: 29
Views: 3318

Re: Bogleheads investment philosophy at huge risk?

Hi, I read this article that brings up the point that by blindly just buying index funds and holding without considering whether they are overpriced etc (i.e. bogleheads investment philosophy) is recipe for long term disaster. Curious to see what others think. Here's the link: http://jessefelder.tu...
by HomerJ
Fri Feb 05, 2016 2:58 pm
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4434

Re: If SS covers expenses why invest?

most people who are living solely on SS benefits are living below the poverty line. Do you really think SS is going to cover ALL of your expenses? maybe only if you live extremely frugally in rural Alabama or Mississippi. A married couple who had very good jobs can pull down $5000-$6000 a month in ...
by HomerJ
Fri Feb 05, 2016 1:40 am
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4434

Re: If SS covers expenses why invest?

Most people don't need millions. If you have been living on 80k/yr (imagine a couple making like 130k/yr who have been paying income and payroll taxes, saving 10-20%,.... ), you might only need 30k or so of income to go along with SS to be back in the same spot as when you were working. It is the e...
by HomerJ
Fri Feb 05, 2016 1:36 am
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4434

Re: If SS covers expenses why invest?

most people who are living solely on SS benefits are living below the poverty line. Do you really think SS is going to cover ALL of your expenses? maybe only if you live extremely frugally in rural Alabama or Mississippi. A married couple who had very good jobs can pull down $5000-$6000 a month in ...
by HomerJ
Thu Feb 04, 2016 11:36 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2706

Re: Prosper.com Update Total Return

I think it is extremely difficult to evaluate p2p lending as an investment until it is seen how it performs during an economic downturn. My intuition is that the currently available returns don't justify the downside risk. Haven't run any numbers to back this up, but I'd imagine default rates would...
by HomerJ
Thu Feb 04, 2016 11:09 am
Forum: Personal Finance (Not Investing)
Topic: How to get a 200k+/year job?
Replies: 107
Views: 10098

Re: How to get a 200k+/year job?

Finally, I want to point out that your real goal should not be to make the maximum salary, compared to salaries nationwide. Instead, it should be to maximize the spread between your salary and the cost of living. The key here is to look for cities with reasonable cost-of-living that are homes to Fo...
by HomerJ
Thu Feb 04, 2016 9:55 am
Forum: Personal Finance (Not Investing)
Topic: How to get a 200k+/year job?
Replies: 107
Views: 10098

Re: How to get a 200k+/year job?

Get a spouse that makes $100k, and it's much easier to hit $200k a year. :)

It's a lot easier for two people to find $100k jobs, than one person to get a $200k job.
by HomerJ
Thu Feb 04, 2016 1:43 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2706

Re: Prosper.com Update Total Return

How do they rate borrowers As and Bs? It would seem anyone who paid back their loans enough to get a good history would get themselves out of the hole of having to use Peer-to-Peer lending. *** For example, if you have a Prosper Rating of B and take a loan for $5,000, then you will be charged a $247...
by HomerJ
Thu Feb 04, 2016 12:45 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2706

Re: Prosper.com Update Total Return

all of the loans are less than $50. Who is borrowing less than $50? It's Peer to Peer. You borrow $25 a piece from 1000 people. Ah, I see... Never understood how it worked... So, if I can't get a car loan from a bank, I can borrow $4000 from 1000 people (all matched up by software). What happens to...
by HomerJ
Thu Feb 04, 2016 12:40 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2706

Re: Prosper.com Update Total Return

mevans154 wrote:all of the loans are less than $50.


Who is borrowing less than $50?
by HomerJ
Wed Feb 03, 2016 12:28 am
Forum: Personal Finance (Not Investing)
Topic: Physician buying an 850k vs 1.25m house
Replies: 54
Views: 5117

Re: Physician buying an 850k vs 1.25m house

Is paying 45% of your post tax income in a mortgage too much (1.125 million mortgage = aprox 7k per month) This is doable at your high salary, but it IS expensive, plus don't forget heating and cooling a larger house, and furnishing a more expensive house, and landscaping more land, and keeping wit...
by HomerJ
Mon Feb 01, 2016 2:37 pm
Forum: Personal Finance (Not Investing)
Topic: Public school or private school (with school data)
Replies: 90
Views: 4911

Re: Public school or private school (with school data)

The lack of difference in AP scores is very strange to me. Number of test by graduate is roughly the same and passing rate is roughly the same. I double checked the school profile documents, the AP numbers are correct. Yes, it is strange that there is almost no difference between the public and pri...
by HomerJ
Mon Feb 01, 2016 2:09 pm
Forum: Investing - Theory, News & General
Topic: Why didn't bond funds go down?
Replies: 27
Views: 3442

Re: Why didn't bond funds go down?

The Fed raised interest rates from 1% to 5% from 2004-2006. Here's what bond funds did... http://s30.postimg.org/fvm4cofmp/Bond_Bear_Market2004_2006.png The Fed raising rates, contrary to popular belief, doesn't always equal ALL interest rates going up, and doesn't always equal bond funds crashing a...
by HomerJ
Mon Feb 01, 2016 11:57 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

Ignoring valuations and interest rates is foolish IMO. And can be very dangerous. I don't know if that's true. I wouldn't consider it foolish or dangerous to buy and hold a 60/40 stocks/bonds through 30-40 years, ignoring valuations and interest rates (which are usually short-term). On other hand i...
by HomerJ
Mon Feb 01, 2016 9:56 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

Also, one last point... The 10% historical return INCLUDES bad decades... So I don't understand why you think one should change their investing plan just because the "experts" are predicting a 7% expected return in the short-term. If you are very close to retirement, you should have a cons...
by HomerJ
Mon Feb 01, 2016 9:51 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

And on final note -there is a very big difference in forecasting a 10% (based on historical returns) vs. 7% based on current valuations because that leads to very different conclusions on AA or other decisions. And given current valuations IMO an investor is significantly more likely to get closer ...
by HomerJ
Sun Jan 31, 2016 9:44 pm
Forum: Personal Finance (Not Investing)
Topic: Public school or private school (with school data)
Replies: 90
Views: 4911

Re: Public school or private school (with school data)

Thought experiment: let's say that the private school would give the kids a 5% "improvement" in outcome (however you decide to measure outcome). If the tuition was not particularly painful to you (i.e., it will either be spent on tuition or added to the kids' inheritance), would you spend...
by HomerJ
Sun Jan 31, 2016 4:04 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

And a huge company like Amazon is going to have an outsize effect on Schiller P/E and CAPE which are supposedly telling us if the "market" is historically overpriced. That's a pretty good point... 474 P/E from one very large company is a pretty big effect... If 98% of the other companies ...
by HomerJ
Sun Jan 31, 2016 12:17 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

The other main point people seem to be missing is that no valuation model could explain future returns in the way people seem to think (predicting them accurately) I agree... It would be helpful if writers would state expected returns are 4% plus or minus 8%, instead of stating expected returns are...
by HomerJ
Sun Jan 31, 2016 11:56 am
Forum: Investing - Help with Personal Investments
Topic: Downward trend over?
Replies: 46
Views: 4062

Re: Downward trend over?

KyleAAA wrote:On the other hand...
On the other hand...
On the other hand...
On the other hand...


Heh... This sums up trying to predict the future of the market very well.... :)

"Nobody knows enough"
by HomerJ
Sat Jan 30, 2016 10:07 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10457

Re: The last 15 years

Cliff Asness had a good quote, along the lines of "The best way to look thin is to stand next to a fat guy" Look at historical CAPE ratios, and just imagine that the irrational exuberance of the 90s Tech Boom didn't happen .. Draw a line connecting 1995 to 2005 and imagine we're still whe...
by HomerJ
Sat Jan 30, 2016 11:41 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

Alchemist wrote:That is not the same as saying "nobody know's nothing", but rather that Nobody Knows enough to matter.


Well said...

"Nobody knows enough".

I will start using that... It's a much better way to state the problem.
by HomerJ
Sat Jan 30, 2016 11:38 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7733

Re: The failure of valuation predictions

"Nobody knows nothing" is both grammatically and philosophically anti-thought .. It's this fatalistic, binary thinking that's only good for the lottery industry and people selling you extended warranties While clearly not correct, I think the main benefit is behavioral. The vast majority ...
by HomerJ
Sat Jan 30, 2016 11:33 am
Forum: Investing - Theory, News & General
Topic: Who else is holding in cash? [For future investing]
Replies: 66
Views: 4443

Re: Who else is holding in cash?

Oh, there you go: (not suggesting anyone follow, but El-Erian is a smart guy .. I'm 26% cash) Time to put 30% of your assets in cash: El-Erian Investment guru Mohamed El-Erian calls cash the best way to navigate what is turning out to be a volatile year for investors. He points out that cash is the...
by HomerJ
Sat Jan 30, 2016 2:50 am
Forum: Investing - Theory, News & General
Topic: Who else is holding in cash? [For future investing]
Replies: 66
Views: 4443

Re: Who else is holding in cash?

I know market timing is a bad idea So why are you doing it? but lets face it we are long overdue for a significant drop and I think it could happen right before the election. Even if it happens next year I want to have cash ready to invest since I missed out on the big buying opportunity of 2008. W...
by HomerJ
Sat Jan 30, 2016 2:36 am
Forum: Investing - Theory, News & General
Topic: Who else is holding in cash? [For future investing]
Replies: 66
Views: 4443

Re: Who else is holding in cash?

Kelli, About 10% of my portfolio is cash. I've been waiting about 3 years now for the big drop. It will be here some day. . . or another opportunity will present itself. The market is up 34% since 3 years ago.... I don't worry if I don't fund at the bottom exactly. As long as I get a better price t...
by HomerJ
Fri Jan 29, 2016 3:04 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10457

Re: The last 15 years

Mean reversion is a long-term tendency - not a 10-year tendency Also, people in 1996 certainly assumed mean reversion to happen in the short-term... Up to that point, mean reversion occurred within a few years of hitting such high valuations. Mean reversion being a "long-term tendency" is...
by HomerJ
Fri Jan 29, 2016 2:49 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10457

Re: The last 15 years

... But even at 2.5%, this is well within normal standard deviation ... It's 5.5% off... Predicts 2.5% nominal, actual was 8% nominal. If you mean 5.5% difference is one standard deviation, then there's no point in estimating returns at all with that large of a spread. We do lots of things to corre...
by HomerJ
Fri Jan 29, 2016 1:29 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10457

Re: The last 15 years

But anyway, 8.2% nominal is a lot better than what was predicted by CAPE. At the time, in 1996, CAPE was at record highs not seen since 1929, right before the Great Depression. Anyone who followed CAPE was pretty sure doom was coming. Shiller himself predicted 0% real returns. I don't understand ho...
by HomerJ
Fri Jan 29, 2016 11:01 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10457

Re: The last 15 years

... especially considering how good the US markets have been in the past 20 years. Odd to put "especially" before the second half of your sentence when it contradicts the first half. Also especially odd given history. The past 20 year period (from 1/1/1996 - 12/31/2015) for the S&P500...
by HomerJ
Thu Jan 28, 2016 4:49 pm
Forum: Investing - Theory, News & General
Topic: Hedge Funds blame Index funds: Bogleheads referenced
Replies: 80
Views: 6742

Re: Hedge Funds blame Index funds: Bogleheads reference

On George Soros, for example: "Four hundred seventy-three million to one. Those are the odds against George Soros compiling the investment record he did as manager of the Quantum Fund from 1968 through 1993 ..." - Paul Tudor Jones' intro to The Alchemy of Finance Yeah, those odds are so e...

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