Search found 4215 matches

by grayfox
Mon Jan 11, 2016 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: How Am I Doing? 18 Years of Data
Replies: 47
Views: 5122

Re: How Am I Doing? 18 Years of Data

OK, how am I doing? Here is my sequence of returns: 1998 8.26% 1999 10.41% 2000 3.16% 2001 -1.73% 2002 -3.67% 2003 20.75% 2004 11.10% 2005 6.45% 2006 12.96% 2007 5.35% 2008 -22.94% 2009 20.62% 2010 11.20% 2011 1.36% 2012 10.67% 2013 13.87% 2014 6.27% 2015 0.46% Thanks for posting that. That represe...
by grayfox
Sun Oct 04, 2015 1:48 am
Forum: Investing - Theory, News & General
Topic: Common Misconceptions about Safe Floor Retirement Planning
Replies: 93
Views: 10992

Re: Common Misconceptions about Safe Floor Retirement Planning

However, I came across the above quote in the thread, which I believe deserves its own thread. I’m not including the name of the poster, who is usually quite astute, but instead only the statement, which is a viewpoint that is widely held but wrongheaded. ... BobK Good topic and good explanation. I...
by grayfox
Sun Oct 04, 2015 1:30 am
Forum: Investing - Theory, News & General
Topic: Dividend Mantra Sells Out
Replies: 28
Views: 6215

Re: Dividend Mantra Sells Out

You say that investing in S&P 500 index had higher return than dividend Mantra's portfolio of dividend stocks.

Well, did you do that, invest in S&P 500 and have better return than Dividend Mantra? If so congratulations! If not, why didn't you?
by grayfox
Sat Oct 03, 2015 12:44 pm
Forum: Investing - Theory, News & General
Topic: Dividend Mantra Sells Out
Replies: 28
Views: 6215

Re: Dividend Mantra Sells Out

Those who fail to beat their benchmarks invent excuses why total return doesn't matter. The sad part is that Dividend Mantra probably spends 500 - 1000 hours/year managing his portfolio, which has failed to beat a simple S&P 500 index fund. So after wasting 5000 hours on his portfolio, he is no...
by grayfox
Sat Oct 03, 2015 12:32 pm
Forum: Investing - Theory, News & General
Topic: Dividend Mantra Sells Out
Replies: 28
Views: 6215

Re: Dividend Mantra Sells Out

Warren Buffett does not grade himself on Book to Value -- he uses that measure to pick stocks that will have higher returns. Can you imagine him coming to a shareholder meeting and announcing proudly "I know our returns have been terrible for 10 years, but that doesn't matter -- our Book to Va...
by grayfox
Fri Oct 02, 2015 3:40 am
Forum: Investing - Theory, News & General
Topic: Treasury Market’s Inflation Expectations Tumble
Replies: 38
Views: 3567

Re: Treasury Market’s Inflation Expectations Tumble

I'm not sure we can understand much from a single daily move. Looking at the trend of TIPS yields, yields have been generally increasing for the last six months, so TIPS prices have been falling. Looking at 10-year TIPS yield for last six months: https://research.stlouisfed.org/fred2/graph/fredgrap...
by grayfox
Wed Sep 30, 2015 2:17 am
Forum: Investing - Help with Personal Investments
Topic: A Rant about Ticker Speak
Replies: 44
Views: 3097

Re: A Rant about Ticker Speak

Please forgive the rant friendly reminder. :happy The amount of ticker speak has increased a lot recently. Every time tax loss harvesting threads start popping up, so do the instances of ticker speaking. Example - "I want to harvest losses in AAAAX. Can I use BBBBX as a partner?" And for ...
by grayfox
Wed Sep 30, 2015 1:42 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

What about self-insuring for long-term care? Do you consider that part of retirement? I do; it's a significant portion of my assets and limits the amount that I am willing to annuitize. What is the cost of long-term care? Suppose you require $3000 per month for ordinary monthly retirement living ex...
by grayfox
Wed Sep 30, 2015 1:36 am
Forum: Investing - Theory, News & General
Topic: Dividend Mantra Sells Out
Replies: 28
Views: 6215

Re: Dividend Mantra Sells Out

I stopped following their advice after I realized that he has failed to beat a simple S&P 500 index funds, and he pays a ton in taxes by refusing to invest through 401 (k) or IRA's. Picking stocks is a waste of time - this is why I index. Is this really true that he failed to beat the S&P 5...
by grayfox
Tue Sep 29, 2015 2:12 pm
Forum: Investing - Theory, News & General
Topic: Dividend Mantra Sells Out
Replies: 28
Views: 6215

Re: Dividend Mantra Sells Out

Wow, that is a great blog! The blogger shows the progress of a dividend growth investor month by month starting back in 2011. I read some of his articles/ He seems like a real honest guy just telling it like it is. Hopefully he keeps making the monthly updates for the next couple of decades. His blo...
by grayfox
Tue Sep 29, 2015 8:49 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

Why do you insist on an absolute floor using withdrawals from a risky portfolio? As I wrote in my follow-up post, one should combine VPW with Social Security (SS) and a TIPS ladder to replace missing payments between retirement and Social Security. OK, I will take your answer that VPW is not a good...
by grayfox
Tue Sep 29, 2015 3:26 am
Forum: Investing - Theory, News & General
Topic: Harvard Endowment's New Approach
Replies: 4
Views: 1409

Re: Harvard Endowment's New Approach

So after setting desired factor exposures and a bunch of calculations, they come up with the following range of asset allocations: Fiscal Year 2016 Asset Class Ranges Asset Class Range US Equity 6% 16% Foreign Equity 6% 11% Emerging Market Equity 4% 17% Private Equity 13% 23% Absolute Return 11% 21%...
by grayfox
Tue Sep 29, 2015 1:51 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

I am trying to understand how you take Pfau's excessively conservative 2.1% and assign a 10% chance of failure ? On another thread here: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=174569&p=2638157&hilit=Pfau#p2638157 We see that Pfau's assumptions are not at all Bogle-ish, he...
by grayfox
Tue Sep 29, 2015 1:40 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

Agree with above posts: should not ignore residual value or similarly the likelihood of increasing income while still alive due to possible strong returns. Or put another way - if these things have no value to you, right, don't hold a stock and bond fund. Just because the potential upside has no va...
by grayfox
Tue Sep 29, 2015 1:21 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

As you can see, you would have been better in all cases using a VPW withdrawal strategy than using "the current cost of" a TIPS ladder, if you had some flexibility in your budget, as the median withdrawal was higher than $25,000 even in the worst historical case, including the 1937 recess...
by grayfox
Tue Sep 29, 2015 1:07 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

Rank Strategy Cost Guaranteed? Odds of Failure Comments 1. Deferred Annuity* $275,330 YES bought at age 50, for life, not inflation-adjused 2. Immediate Annuity* $412,541 YES bought at age 60, for life, not inflation-adjused 3. TIPS Ladder $645,000 YES from #Cruncher's TIPS Builder spreadsheet 9/26...
by grayfox
Tue Sep 29, 2015 12:54 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

$25,000 x 30 = $750,000 Initially drop 20 years of income into inflation pacing bonds/ladder = $500,000 and the remainder $250,000 invest in a stock/accumulation (growth) index/fund. 2 baskets that run independently thereafter, bond basket drawn down, stock basket grows. 20 years of inflation adjus...
by grayfox
Mon Sep 28, 2015 6:00 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

Another difference is in regard to inflation. The annuities as you pointed out are not inflation adjusted. TIPS by definition have inflation protection. The dividend paying stocks generally will provide some. Most the SWR plans account for increasing the percent payout by the amount of inflation. U...
by grayfox
Mon Sep 28, 2015 5:43 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

Why would you pay almost double the price for something not guaranteed, when you can buy it guaranteed for less? That makes no sense. By my interpretation, the stock/bond allocation would not be "eligible" for the floor portion of a portfolio under this approach specifically because it is...
by grayfox
Mon Sep 28, 2015 5:40 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Re: Cost to Fund Retirement

Residual value is not part of your retirement. E.g., when you die, a DB pension stops, there is no residual value left for theirs. If you want to leave money to heirs or charity, that is a separate problem. I think that retirees should first solve the retirement funding problem. Once that is taken c...
by grayfox
Mon Sep 28, 2015 4:45 am
Forum: Investing - Theory, News & General
Topic: Cost to Fund Retirement
Replies: 26
Views: 3218

Cost to Fund Retirement

The problem is how much will it cost to fully fund your retirement. Back in 1998, we got the original Trinity study that gave us the 4% Safe Withdrawal Rate, or 25x. Some retired investors believe in living off your dividends. Academics like Zvie Bodie recommend TIPS ladders. William Berstein has wr...
by grayfox
Mon Sep 28, 2015 2:52 am
Forum: Investing - Help with Personal Investments
Topic: Skill level to replace Tips fund with individual tips?
Replies: 48
Views: 3779

Re: Skill level to replace Tips fund with individual tips?

OK, then I will go with #Cruncher's analysis of both the TIPS fund and TIPS ladder. First, instead of just multiplying $25,000 by 30 years, I computed the required investment assuming a constant annual return. VAIPX currently has an SEC yield of 0.48%. Assuming a constant 0.5% return over 30 years, ...
by grayfox
Mon Sep 28, 2015 1:47 am
Forum: Investing - Theory, News & General
Topic: Harvard Endowment's New Approach
Replies: 4
Views: 1409

Re: Harvard Endowment's New Approach

Thanks for posting. This report is of interest. I am reading on page 7 of their process: Flexible Indeterminate Factor-based Asset Allocation (FIFAA) The core of our proposal is an assumption that our strategic asset allocation, as expressed through asset classes, can be conceived of as a combinatio...
by grayfox
Sun Sep 27, 2015 3:01 am
Forum: Investing - Help with Personal Investments
Topic: Skill level to replace Tips fund with individual tips?
Replies: 48
Views: 3779

Re: Skill level to replace Tips fund with individual tips?

It looks like stlutz and #Cruncher, together, have come up with a final answer to the TIPS ladder vs. TIPS fund question. I got interested in simply probing the question: What happens to someone who just puts 25 years of expenses (lets say $25,000/yr. * 25 years = $625,000) into the regular plain ol...
by grayfox
Sat Sep 26, 2015 6:15 am
Forum: Investing - Help with Personal Investments
Topic: Skill level to replace Tips fund with individual tips?
Replies: 48
Views: 3779

Re: Skill level to replace Tips fund with individual tips?

I got interested in simply probing the question: What happens to someone who just puts 25 years of expenses (lets say $25,000/yr. * 25 years = $625,000) into the regular plain old boring Vanguard TIPS fund and then just withdraws $25,000 (inflation adjusted) every year. What horrors or disasters mi...
by grayfox
Thu Sep 24, 2015 2:50 am
Forum: Investing - Help with Personal Investments
Topic: Skill level to replace Tips fund with individual tips?
Replies: 48
Views: 3779

Re: Skill level to replace Tips fund with individual tips?

I would never buy Tips in a taxable account. Also, I don't try to replicate the fund. I pick one or two maturities and buy those exclusively. There is no diversification benefit so the only issue is term. Even a fairly simple ladder could be build with 4-5 maturities. Precisely! :thumbsup It depend...
by grayfox
Wed Sep 23, 2015 4:32 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

I google "forecasting interest rates" and found a set of powerpoint slides for a course Forecasting Interest Rates: Structural Models. One slide: Forecasting Nominal Interest Rates Any interest rate equations could potentially have the following variables: --Income Growth --Proxies for pro...
by grayfox
Tue Sep 22, 2015 6:11 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

Year 2001 Forecast In the 2001 ERP, the Council of Economic Advisors was feeling pretty cocky and decide to make a forecast for the next ten years, all the day out to 2011. They also adjusted up the forecasts for 2000-2006 from the year 2000 ERP. How did the 2001 ERP forecasts turn out? YEAR NGDPgr...
by grayfox
Tue Sep 22, 2015 5:31 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

OK, so the theory is that the forecast of Nominal GDP is also a forecast of the 10-year Treasury rate. Let's see how well that has worked in recent years. Actual Results (1990-2014) First, I got actual Nominal GDP growth from multpl.com, the same source siamond used in a previous post. See US GDP Gr...
by grayfox
Sat Sep 19, 2015 12:41 pm
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

So, according to this theory, what is the prediction for the 10-year Treasury one year from now? You seem to be missing the point of this thread. It's about decades-long trends, not one-year predictions. If global GDP growth is expected to be lower in the coming years, it's unlikely that interest r...
by grayfox
Sat Sep 19, 2015 12:10 pm
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

https://lh3.googleusercontent.com/-tVSz_H5kI8c/Vf2BP_T4kAI/AAAAAAAANdI/yVJ4O79UI24/s640-Ic42/GDP%252520Interest%252520Rate%252520Compare%2525201950%25252B.jpg So you are saying that the rate on the nominal 10-year Treasury is supposed to equal U.S. Nominal GDP growth? And also the rate on a 10-year...
by grayfox
Sat Sep 19, 2015 4:37 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

Well if I read "Liquidity Preference Theory" my bids would probably all be rejected as the yield req'd would be too high. If fewer bids thru supply/demand the order at my price might be accepted. Yes, I think if you read the textbook explanation, each lender would decide what his "Re...
by grayfox
Sat Sep 19, 2015 3:57 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

BTW, I am updating my Ten-Year Treasury Rate Short-Term Prediction Model (TYTRSTPM). If interest rates are very low, it doesn't make sense for them to fall below zero. Why would you give the government $101 today and get back only $100 in one year? You might as well keep the money in cash in a shoeb...
by grayfox
Sat Sep 19, 2015 3:49 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

The big day of the Fed meeting came and went (9/17/2015). The fed chose not to raise rates by 25 basis points. Let's see what happened with my Ten-Year Treasury Rate Short-Term Prediction Model . (TYTRSTPM for short.) The data: Date 1 Mo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr 08/17/15 ...
by grayfox
Sat Sep 19, 2015 3:23 am
Forum: Investing - Theory, News & General
Topic: Convince me on Small-Value Premium
Replies: 54
Views: 2912

Re: Convince me on Small-Value Premium

... if you were lending money, would you charge the same interest rate to Exxon as you would Fred's Gas Station? Intuitively, I think a person would charge more for the loan to the riskier small business. Therefore, it's expected return as an investment should be greater as well. Dave This is a goo...
by grayfox
Wed Sep 16, 2015 9:57 am
Forum: Investing - Theory, News & General
Topic: There's only one person who knows where the market is going
Replies: 15
Views: 2447

Re: There's only one person who knows where the market is going

Only one person who knows where the market is going…and the first thing that shows up is a picture of Fed Reserve Chairman Janet Yellen.
by grayfox
Wed Sep 16, 2015 9:17 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

I was thinking more about what determines interest rates. I've read that interest is like rent on money. Just like a renter pays monthly rent to borrow an apartment for a year, borrowers pay rent to borrow a sum of money for a year. Suppose that a 1-bedroom apartment in some small college town rents...
by grayfox
Wed Sep 16, 2015 6:10 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

:?: Can anyone suggest a more accurate way to predict what 10-year Treasury rate will be tomorrow, in a week, in a month, in a year, in five years, in 10 years? Can the large rate changes, like 100 bps in one week, be forecasted ahead of time? Well your short term prediction is pretty accurate. I'm...
by grayfox
Tue Sep 15, 2015 2:43 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

10-Year Treasury will finish tomorrow (Monday 9/14/2015) at 2.20% +/- 10 bps. SUCCESS! The 10-year finished at 2.18% which was within the prediction interval. I am batting 1.000 in interest rate forecasting. "Now, you may be wondering how I am able to make correct interest rate forecasts. Is i...
by grayfox
Sun Sep 13, 2015 2:55 pm
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

Put the theory to the test. Let's see some predictions! Based on info from the Fed website, assuming they will do what they say, which is what any financial investor would expect, and barring a recession or other economic altering which would adversely affect a positive yield curve.... My predictio...
by grayfox
Sun Sep 13, 2015 5:30 am
Forum: Investing - Theory, News & General
Topic: Have Interest Rates Become Easier To Predict?
Replies: 47
Views: 4011

Re: Have Interest Rates Become Easier To Predict?

The common wisdom has been that "the future direction of interest rates is impossible to predict," so investors should not even bother to think about it. While true historically, a few developments in recent years may be challenging this accepted wisdom. In this post, we'll briefly look a...
by grayfox
Sat Sep 12, 2015 5:15 am
Forum: Investing - Theory, News & General
Topic: GMO WhitePaper: Sequence Risk and Drag on Retirement Wealth
Replies: 34
Views: 2913

Re: GMO WhitePaper: Sequence Risk and Drag on Retirement Wealth

Who ate almost $300,000 of Joe’s retirement money? Oh what a tangled web we weave When first we practice to deceive. ** In the GMO paper, they write about investing for 40 years starting at age 25. Two people, Joe and Jane, make identical investments for identical length of time and have identical ...
by grayfox
Thu Sep 10, 2015 1:36 pm
Forum: Investing - Theory, News & General
Topic: How do you decide your asset allocation?
Replies: 175
Views: 8927

Re: How do you decide your asset allocation?

Let's keep it simple and assume there are 4 assets: stocks, bonds, cash, and TIPS. No crazy stuff like factor investing. Even if there were just 2 asset: stocks, and bonds, the problem doesn't go away. How do you determine your asset allocation? Isn't this essentially the question that Harry Markow...
by grayfox
Fri Sep 04, 2015 1:40 pm
Forum: Investing - Theory, News & General
Topic: Bill Gross: cash is your best investment right now
Replies: 63
Views: 8814

Re: Bill Gross: cash is your best investment right now

Bill Gross in his latest Investment Outlook thinks that the risks are now much greater than the rewards for most investment assets: Cash or better yet “near cash” such as 1-2 year corporate bonds are my best idea of appropriate risks/reward investments. The reward is not much, but as Will Rogers on...
by grayfox
Fri Sep 04, 2015 2:59 am
Forum: Investing - Theory, News & General
Topic: Understanding the link between earnings yield and future returns
Replies: 31
Views: 1638

Re: Understanding the link between earnings yield and future returns

Dear Grayfox, Thanks for that analysis. Bogle has said numerous times he likes to "think in decades." When he justified his switch from 75/25 to 25/75 right before the dot-com bubble burst (market timing!) he justified it because earnings yield was 1% and the 10y treasury yield was 7%. So...
by grayfox
Thu Sep 03, 2015 4:11 pm
Forum: Investing - Theory, News & General
Topic: Understanding the link between earnings yield and future returns
Replies: 31
Views: 1638

Re: Understanding the link between earnings yield and future returns

I looked up Vanguard 500 Index Fund Investor Shares ( VFINX ) ROE = 18.8% P/B = 2.8 With the simple model of the fictitious company in my previous post: P/B CAGR=E/P at N Years 1.0 18.80% for all years 1.5 12.53% at 7-8 years 2.0 9.40% at 8-9 years 2.5 7.52% at 9-10 years 2.8 6.71% at 9-10 years 3.0...
by grayfox
Thu Sep 03, 2015 2:19 pm
Forum: Investing - Theory, News & General
Topic: Understanding the link between earnings yield and future returns
Replies: 31
Views: 1638

Re: Understanding the link between earnings yield and future returns

Understanding the link between earnings yield and future returns Interesting question. I've looked at this sort of thing. Specifically, I tried to answer the question: "Why does earnings yield forecast returns?" :?: Suppose there was a fictional company with Book Value = 100 and constant ...
by grayfox
Thu Sep 03, 2015 4:38 am
Forum: Investing - Help with Personal Investments
Topic: Help with windfall - how to invest $1M wisely at 32?
Replies: 22
Views: 3916

Re: Help with windfall - how to invest $1M wisely at 32?

Goals: - design a tax-efficient and moderately simple portfolio for wealth preservation - some room for growth (I still plan to work for many years) - Plan to purchase a home in the next 5 years (not necessarily in CA) First you need goals . Then you need a strategy to meet those goals. Goals are t...
by grayfox
Wed Sep 02, 2015 2:58 am
Forum: Investing - Theory, News & General
Topic: 100% Equities?
Replies: 86
Views: 6610

Re: 100% Equities?

What I'm having trouble understanding is how you can take each month's contribution in isolation if you are rebalancing with each contribution. The problem I have with analyzing rebalancing case is I don't know what is meant by "rebalancing". There are 1001 rebalancing algorithms: --Annua...

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