Search found 4483 matches

by bobcat2
Thu Feb 11, 2016 6:20 pm
Forum: Investing - Theory, News & General
Topic: Credit Suisse Yearbook 2015 [2016 version is out]
Replies: 8
Views: 1381

Re: Credit Suisse Yearbook 2015 [2016 version is out]

US annual real returns Global annual real returns Stocks Bonds Stocks Bonds 2000-2015 (latest 16 yrs) 2.3% 5.4% 1.6% 4.9% In other words, you lost a lot of money over the last sixteen years, if you were heavily invested in stocks and lightly invested in bonds. But if you invest in the long-term you...
by bobcat2
Sat Jan 30, 2016 2:56 pm
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Cynically, I'm wondering if--like some of the MSCI indexes, created in partnership with Vanguard circa 2000--perhaps the Dimensional tail wagged the S&P Dow Jones dog, and they asked S&P to design an index that matched their fund so that they could call their retirement funds "index fu...
by bobcat2
Sat Jan 30, 2016 1:29 pm
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Hi Nisi, I can't find tickers either, but these things are brand new. There launch dates are about two weeks ago. We may have to wait a while before they are actually available for purchase. The more I snoop around this product the more I am not sure what it is. The original article called them fund...
by bobcat2
Sat Jan 30, 2016 12:32 pm
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Looks like these are just indices looking for someone to turn into mutual funds. Is the thread title wrong/misleading then? Judging from the URL in the OP: benefitspro.com/2016/01/26/new-target-date- indices -built-on-tips?slreturn=1453948736 What do we have here? Indices or funds? These are Target...
by bobcat2
Sat Jan 30, 2016 12:22 pm
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Thanks, Bobcat, for the update. These duration matching structures are one of the most interesting innovations in financial products. I hope the indices are picked up into sucesful products...however, I am uncertain how well these will be marketed. I expect that their performance will deviate quite...
by bobcat2
Sat Jan 30, 2016 9:05 am
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Hi bobcat, if we believe all the surveys and articles , a majority of people will not have enough to retire on, even if they leave "risk on" through age 70. Here is a recent high quality study of retirement preparedness. - August 2015 Conference paper - Are Retirees Falling Short? Link - ...
by bobcat2
Fri Jan 29, 2016 7:44 pm
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Hi Tamales, You wrote - Hi bobcat, Could you elaborate on the arguments for how these (new TDFs) would be appropriate for the average joe whose only chance for stable retirement would seem to be to remain heavily weighted in equities very late in life, as well as possibly delaying their retirement d...
by bobcat2
Fri Jan 29, 2016 8:57 am
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

Here is a booklet from S&P explaining the retirement strategies they use in conjunction with their S&P STRIDE Index Series TDFs.
Link - http://www.spindices.com/documents/research/research-introducing-the-sp-stride-index-series.pdf

BobK
by bobcat2
Fri Jan 29, 2016 8:35 am
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

A DFA team, led by Robert Merton, is the designer of this strategy. These TDFs are based on the life-cycle economics approach to personal finance, which is the only approach to personal finance consistent with economic theory. Merton is one of the fathers of life cycle economics. His path breaking t...
by bobcat2
Thu Jan 28, 2016 4:37 am
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

Re: New S&P Target Date funds built on TIPS

I didn't read the article (registration required) but does that fund have any similarity to these SMART FUNDS(TM) Target date funds from targetdatesolutions.com? ... It says it uses primarily passive indexes, and around 15 years til retirement, "assets begin to shift into a safer asset pool (“...
by bobcat2
Wed Jan 27, 2016 9:56 pm
Forum: Investing - Theory, News & General
Topic: New S&P Target Date funds built on TIPS
Replies: 18
Views: 2353

New S&P Target Date funds built on TIPS

Standard & Poor’s Dow Jones Indices has rolled out a series of target-date index funds designed to create retirement income for plan participants. Unlike traditional target-date approaches, the new products start reallocating assets to U.S. Treasury Inflation Protected Securities, or TIPS, as ea...
by bobcat2
Sun Jan 17, 2016 1:16 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 61
Views: 10918

Re: Master thread for Washington DC Area Bogleheads

Something unexpected has come up at home this morning and I won't be attending the BH's meeting today.

BobK
by bobcat2
Sat Jan 16, 2016 11:28 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 61
Views: 10918

Re: Master thread for Washington DC Area Bogleheads

Our next meeting will be Sunday, January 17, 3:00-5:00, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. The second floor meeting room is on the south side of the library, just to the left of the glass enclosed quiet reading room. The...
by bobcat2
Sat Jan 09, 2016 1:01 pm
Forum: Personal Consumer Issues
Topic: The Big Short
Replies: 137
Views: 13824

Re: The Big Short

I think would be good idea if movie was added to curricula of high school senior or first year college economics and history classes. Though for high school would probably need to cut the interview with exotic dancer who owns five homes. Actually she owned five houses AND A CONDO . :D Link - https:...
by bobcat2
Sun Dec 27, 2015 10:55 pm
Forum: Personal Consumer Issues
Topic: The Big Short
Replies: 137
Views: 13824

Re: The Big Short

I saw the flick on Christmas Eve. I recommend Bogleheads go long on The Big Short. :wink:

BobK

PS - Richard Thaler was excellent. He was one star that I didn't know was in the movie until he showed up bigger than life on the silver screen. :)
by bobcat2
Sun Dec 27, 2015 11:48 am
Forum: Investing - Theory, News & General
Topic: Why do we call it "investing"?
Replies: 35
Views: 3167

Re: Why do we call it "investing"?

To me, it's pretty simple. --"savings" is money you didn't spend , and --"investing" is wherever you put that money. :thumbsup :thumbsup Way Way Up :!: Let me take a stab at it. Investing means deciding how to allocate your assets along the spectrum from safe to risky. But an as...
by bobcat2
Wed Dec 16, 2015 11:31 pm
Forum: Investing - Theory, News & General
Topic: Fed raises FFR [Federal Funds Rate] 0.25% as expected
Replies: 60
Views: 5480

Re: Fed raises FFR 0.25% as expected

Do I understand Summers to be saying that interest rates are now so low that the Fed can't goose the economy out of a recession by lowering rates, therefore they can't risk anything that might cause a recession, therefore they must not ever raise rates? Once interest rates are lowered close to zero...
by bobcat2
Sat Dec 05, 2015 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: Delaying Social Security: What's the goal?
Replies: 47
Views: 3495

Re: Delaying Social Security: What's the goal?

For an individual with no further SS earnings after age 62, it does not much matter when you claim SS, if you are concerned about total received. Whether you claim at age 62, 66, or 70, by age 83 (your life expectancy) you will have received roughly the same amount. That's not true. If LT interest ...
by bobcat2
Wed Dec 02, 2015 1:46 pm
Forum: Investing - Theory, News & General
Topic: Rick Ferri Morningstar Interview RE: Interest Rate Increase
Replies: 2
Views: 692

Re: Rick Ferri Morningstar Interview RE: Interest Rate Increase

Two opposing views as to why the Fed should not raise the Federal Funds target interest rate. First, Larry Summers http://larrysummers.com/2015/10/07/pre-emptive-war-on-inflation-is-error/ Then Andrew Levin, a monetary expert who teaches at Dartmouth College, weighs in at the WSJ. http://blogs.wsj.c...
by bobcat2
Mon Nov 30, 2015 1:00 pm
Forum: Investing - Theory, News & General
Topic: Demographics and Real Interest rates
Replies: 6
Views: 609

The Decline in Long-Term Interest Rates

The Decline in Long-Term Interest Rates Report by the Council of Economic Advisers surveys the latest thinking on the many drivers of interest rates, both in recent decades and into the future. - Maurice Obstfeld and Linda Tesar (July, 2015) Obstfeld was a member of the President’s Council of Econo...
by bobcat2
Sat Nov 28, 2015 10:09 am
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

What I'd like to see is a comparison of the present value of expected future lifetime benefits of those in the 1943 Cohort who claim at 62 compared to those who from the same Cohort claimed at 70 , using some conservative interest rate and the current and projected mortality of that group - I wonde...
by bobcat2
Thu Nov 26, 2015 9:41 pm
Forum: Forum Issues and Administration
Topic: Bogleheads Website - Security Cert Expired
Replies: 51
Views: 5108

Re: Forum software upgrade bug reports and change requests

As of this evening I have to add a security certificate exception to access Bogleheads in Firefox. I think it is the browser (it could be something else) that is reporting that the Bogleheads security certificate as of tonight is out of date.

BobK
by bobcat2
Mon Nov 23, 2015 3:45 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

ubermax wrote - The authors of my earlier referenced paper do use 1% and the results don't show a significant benefit , if any, from delaying - you may want to go back and review Table 3 again. As I have explained previously that paper is irrelevant to people retiring today. Let us yet again review ...
by bobcat2
Mon Nov 23, 2015 1:05 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

ubermax, What the Heiland & Yin 2014 paper you cite shows is that the system as a whole is close to be actuarially neutral if LT real interest rates are close to the LT average of almost 3%. Currently, 20 year real interest rates are 1%, which is far below the LT average. That makes it actuarial...
by bobcat2
Sun Nov 22, 2015 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

I know how actuarially equivalent is defined and so I'll assume actuarially neutral means the same thing - the current early and late factors under SS do not convert the FRA benefit to the respective early/late actuarially equivalent benefit over all interest rates - This Paper!! especially Table 3...
by bobcat2
Sat Nov 21, 2015 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: The future for TIPS (VIPSX)
Replies: 22
Views: 2551

Re: The future for TIPS (VIPSX)

It is impossible to match liabilities using only the Vanguard ST TIPS fund. To match liabilities with TIPS, or any other bonds for that matter, you have to match the duration of the liability with the duration of the TIPS assets you hold. When holding the TIPS as mutual funds or ETFs you need to ho...
by bobcat2
Sat Nov 21, 2015 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

Overall life expectancy in the US is not increasing rapidly*, in fact some recent bad statistics on death rate in certain age/racial groups might even call into question whether it's still rising. However death rates at given ages vary a lot depending on things like exercise and eating habits... Bu...
by bobcat2
Fri Nov 20, 2015 11:34 am
Forum: Investing - Help with Personal Investments
Topic: The future for TIPS (VIPSX)
Replies: 22
Views: 2551

Re: The future for TIPS (VIPSX)

Also, VG's ST Tips fund, with a duration of 1-2 years, lost money the last few years. 2 years ago, if I'd have made the mistake of seeking safety in liability matching my needs for the next few years using this fund, I'd be out of luck today. It is impossible to match liabilities using only the Van...
by bobcat2
Thu Nov 19, 2015 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: The future for TIPS (VIPSX)
Replies: 22
Views: 2551

Re: The future for TIPS (VIPSX)

Hi Kenmore Bob, The safest way to use TIPS bond funds is to use two TIPS funds to emulate a TIPS bond ladder by matching the average duration of the two TIPS funds to the duration of the liability, i.e. the number of years in the ladder. In this way you have very safe retirement income that is prote...
by bobcat2
Wed Nov 18, 2015 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

Overall life expectancy in the US is not increasing rapidly*, in fact some recent bad statistics on death rate in certain age/racial groups might even call into question whether it's still rising. Yes - I have read multiple articles recently that, probably for "lifestyle" reasons (includi...
by bobcat2
Tue Nov 17, 2015 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

I do not believe it is actuarially neutral. Women live longer than men. Different ethnic groups have different life spans. What might have been actuarially neutral for the population as a whole 50 years ago is not neutral for today's more diverse population. One might want to look at average life s...
by bobcat2
Sat Nov 14, 2015 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

If interest rates are high then inflation tends to be low and so current recipients would be relatively better off than if rates are low and inflation high but seems to me you're talking about much larger absolute benefits when rates are high ?? That is simply not true. For example, over the last s...
by bobcat2
Sat Nov 14, 2015 2:40 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

The discount rate is lower when interest rates are lower. The discount rate has to be consistent with prevailing interest rates. This makes the PV of delay worth more. If this weren't true, then delay would not be more advantageous when prevailing real interest rates are low.

BobK
by bobcat2
Sat Nov 14, 2015 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

Those fortunate enough to retire when real interest rates are high would receive much larger benefits than those unlucky enough to retire when real interest rates are low. Not sure I understand this Bob , are you saying that when rates are high the SS formula is different than when rates are low ??...
by bobcat2
Sat Nov 14, 2015 12:02 pm
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

The Social Security program as a whole is not as skewed away from being actuarially neutral as it is for individuals, but it too is not actuarially neutral. For the program to be actuarially neutral, benefits would have to be continually adjusted for changes in real interest rates and changes in lon...
by bobcat2
Sat Nov 14, 2015 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Do you believe that Social Security [is actuarially neutral]
Replies: 130
Views: 12554

Re: Do you believe that Social Security [is actuarially neutral]

Social Security is not actuarially neutral. It doesn't matter whether some people believe it is actuarially neutral any more than it matters that some people believe the sun orbits the earth. The sun doesn't orbit the earth and SS is not actuarially neutral. If SS were actuarially neutral claiming a...
by bobcat2
Thu Nov 12, 2015 11:29 am
Forum: Investing - Theory, News & General
Topic: DFA Has Introduced Target Date Funds - LifeCycle Based?
Replies: 60
Views: 5627

Re: DFA Has Introduced Target Date Funds - LifeCycle Based?

Hi again Nisi, Merton is talking about the DC plan DFA is initiating with TIAA-CREF. That is a general strategy that includes more help tailored to the individual including taking current income and gender into account and also offering life annuities at retirement. These TDF funds are a stripped do...
by bobcat2
Thu Nov 12, 2015 11:09 am
Forum: Investing - Theory, News & General
Topic: DFA Has Introduced Target Date Funds - LifeCycle Based?
Replies: 60
Views: 5627

Re: DFA Has Introduced Target Date Funds - LifeCycle Based?

Hi Nisi, The average duration of the TIPS funds in the TDF is adjusted to match the duration of a TIPS ladder in retirement. I am not sure exactly how many years of retirement income are covered in these DFA TDFs, but it's probably for the first 15-20 years after retirement. My matching the duration...
by bobcat2
Thu Nov 12, 2015 10:53 am
Forum: Investing - Theory, News & General
Topic: DFA Has Introduced Target Date Funds - LifeCycle Based?
Replies: 60
Views: 5627

Re: DFA Has Introduced Target Date Funds - LifeCycle Based?

According to the darned prospectus, Over time, the 2020 Target Date Portfolio’s allocation to the Underlying Funds is expected to change based on the asset allocation strategy from generally being less conservative (having a higher allocation to equity Underlying Funds) to becoming increasingly more...
by bobcat2
Thu Nov 12, 2015 10:02 am
Forum: Investing - Theory, News & General
Topic: DFA Has Introduced Target Date Funds - LifeCycle Based?
Replies: 60
Views: 5627

Re: DFA Has Introduced Target Date Funds - LifeCycle Based?

Article in Investment News about the DFA TDF funds. Similar to other TDFs on the market, the DFA Target Date Retirement Funds — the firm's first TDFs — allocate heavily to asset-growth producing securities such as global equities, for young retirement savers, but then shifts to a liability-driven in...
by bobcat2
Thu Nov 12, 2015 9:55 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard or Dimensional Target Date Funds for 401K
Replies: 23
Views: 1801

Re: Vanguard or Dimensional Target Date Funds for 401K

nisiprius wrote: This is exactly "lowering stock exposure and raising fixed income exposure," and nothing else . Compare that with this article in Investment News about the DFA TDF funds. Similar to other TDFs on the market, the DFA Target Date Retirement Funds — the firm's first TDFs — al...
by bobcat2
Thu Nov 12, 2015 9:52 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard or Dimensional Target Date Funds for 401K
Replies: 23
Views: 1801

Re: Vanguard or Dimensional Target Date Funds for 401K

Here is Boglehead author Bill Bernstein on another thread here at Bogleheads writing about the DFA target date funds. Count me in the camp that sees the DFA TDR funds as at least a moderate step forward in retirement planning. You can safely ignore the stock part; it's so weakly tilted towards small...
by bobcat2
Wed Nov 11, 2015 9:13 pm
Forum: Investing - Theory, News & General
Topic: DFA Has Introduced Target Date Funds - LifeCycle Based?
Replies: 60
Views: 5627

Re: DFA Has Introduced Target Date Funds - LifeCycle Based?

I think nominal annuities are fine, but I would only use them for income above my targeted floor retirement income. I find it hard to believe that for most people, who are not poor or near poor, SS provides all of their targeted floor income. To me this means that some of the annuitized retirement i...
by bobcat2
Tue Nov 10, 2015 8:09 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard or Dimensional Target Date Funds for 401K
Replies: 23
Views: 1801

Re: Vanguard or Dimensional Target Date Funds for 401K

an asset allocation strategy designed for investors planning to retire in or within a few years of 2015 (the target date) and are planning to withdraw the value of the investment in the Portfolio over many years after the target date . Over time, the 2015 Target Date Portfolio’s allocation to the U...
by bobcat2
Tue Nov 10, 2015 7:29 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard or Dimensional Target Date Funds for 401K
Replies: 23
Views: 1801

Re: Vanguard or Dimensional Target Date Funds for 401K

See the following linked news story from September of 2014 about DFA's target date products to be rolled out this year. Note that the main product is called the "Target Retirement Solution". This is the full product that DFA is apparently rolling out in conjunction with TIAA-CREF. For DC p...
by bobcat2
Tue Nov 10, 2015 7:12 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard or Dimensional Target Date Funds for 401K
Replies: 23
Views: 1801

Re: Vanguard or Dimensional Target Date Funds for 401K

When I go to DFA to see their target date funds this is what I see. When budgeting for expenses, most people start with income, matching up what they expect to earn with what they would like to spend. Having a good estimate of future income makes planning much easier. But what about planning for ret...
by bobcat2
Tue Nov 10, 2015 4:36 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard or Dimensional Target Date Funds for 401K
Replies: 23
Views: 1801

Re: Vanguard or Dimensional Target Date Funds for 401K

If you want the DFA TDFs because you want equity tilt toward small/value the DFA way, these funds are going to disappoint. That's not an important element in the design of these funds. Instead, the DFA TDFs, unlike traditional TDFs, are focused on providing safe retirement income, supposedly the goa...
by bobcat2
Tue Nov 10, 2015 3:28 pm
Forum: Investing - Theory, News & General
Topic: DFA Has Introduced Target Date Funds - LifeCycle Based?
Replies: 60
Views: 5627

Re: DFA Has Introduced Target Date Funds - LifeCycle Based?

IMO some posters are missing important aspects of these DFA funds. First, these TDFs have as a goal providing safe income in retirement. They are not simply lowering the exposure to equities and raising the exposure to fixed income as the participant nears retirement. Additionally, it’s important to...

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