Search found 4332 matches

by grayfox
Sat Sep 24, 2016 9:46 am
Forum: Investing - Theory, News & General
Topic: The Trouble with "Buy and Hold"
Replies: 103
Views: 6385

Re: The Trouble with "Buy and Hold"

Here's the Trouble with 10-month Simple-Moving Average (SMA) Market Timing: Suppose you have $100,000. Some stock fund is trading at $100 per share so you buy 1,000 shares. For simplicity, assume no dividend is paid. Let's say after 1 year the stock has gone to 120. Now you have stock worth $120,000...
by grayfox
Sat Sep 24, 2016 5:23 am
Forum: Investing - Theory, News & General
Topic: The Trouble with "Buy and Hold"
Replies: 103
Views: 6385

Re: The Trouble with "Buy and Hold"

Another interesting note... In years where the S&P 500 had positive returns, the Faber model returned an average of 11.78% while Buy and Hold returned 18.40% . In years where the S&P 500 had negative returns, the Faber model returned an average of 4.8% while Buy and Hold returned -15.22% . ...
by grayfox
Tue Sep 20, 2016 3:58 am
Forum: Investing - Help with Personal Investments
Topic: Why is QSPIX steadily declining?
Replies: 26
Views: 2961

Re: Why is QSPIX steadily declining?

There are quarterly reviews on the fund website showing the performance of each substrategy of the fund, but they're past the login. Some previous ones have been posted before. The annual report gives a less detailed account and only for the whole year. Don't invest in something you don't understan...
by grayfox
Mon Sep 19, 2016 5:12 am
Forum: Investing - Theory, News & General
Topic: [NY Times article: 100% Stock Allocation in Retirement]
Replies: 127
Views: 12539

Re: [NY Times article: 100% Stock Allocation in Retirement]

Here is a link to a New York Times article: http://www.nytimes.com/2016/02/06/your-money/why-your-portfolio-needs-plenty-of-stocks-whatever-your-age.html?src=me&_r=0 I wonder what other Bogleheads think about the author's opinion. Now that I am 81, I lowered my stock allocation from 25 percent ...
by grayfox
Mon Sep 19, 2016 2:42 am
Forum: Investing - Help with Personal Investments
Topic: 24 year old new dividend portfolio
Replies: 151
Views: 6945

Re: 24 year old new dividend portfolio

Really, there are a number of investment approaches that work and work pretty well if the investor has the courage of his/her convictions and will stick with the plan. Building a portfolio of individual stocks and buying and holding for the long term, despite all the warnings issued here, can work ...
by grayfox
Sun Sep 18, 2016 2:59 am
Forum: Investing - Theory, News & General
Topic: "Factor investing"
Replies: 192
Views: 12119

Re: "Factor investing"

. Here are some valuation ratios from the Bridgeway website - comparing a portfolio of blue chip companies (higher credit ratings), and small/micro companies [tracking CRSP10], with (lower credit ratings). Bridgeway Blue Chip 35 Index [BRLIX] / Bridgeway Ultra-Small Company Market [BRSIX] $214bn / ...
by grayfox
Sun Sep 18, 2016 2:57 am
Forum: Investing - Theory, News & General
Topic: "Factor investing"
Replies: 192
Views: 12119

Re: "Factor investing"

grayfox What you have identified is the small growth anomaly, the overvaluation of small stocks that have lottery like distributions, especially ones that have low profitability and high investment. The research shows they have had exceptionally poor returns and this has been known for decades, yet...
by grayfox
Sat Sep 17, 2016 4:20 am
Forum: Investing - Theory, News & General
Topic: "Factor investing"
Replies: 192
Views: 12119

Re: "Factor investing"

OK, lets go with the bond analogy. Here are Composite Bond Rates from Yahoo. From the section on Corporate Bonds: 10yr AAA 2.31% 10yr AA 2.40% 10yr A 2.53% The lower quality bonds offer a higher yield. I'm sure B and C grade bonds offer even higher yields, but they are not shown on that page. How do...
by grayfox
Fri Sep 16, 2016 3:03 am
Forum: Investing - Help with Personal Investments
Topic: 24 year old new dividend portfolio
Replies: 151
Views: 6945

Re: 24 year old new dividend portfolio

Hey all, Below is my data, which is followed by the question. Emergency funds: 5,000 Debt: 95,000 student loan debt, interest rate averages 4.5% Tax Filing Status: Single Tax Rate: 25% State of Residence: Texas Age: 24 Desired Asset allocation: 100% stocks I am looking to build a dividend portfolio...
by grayfox
Thu Sep 15, 2016 5:40 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

^^^^
Alright! Now we're talking. So there is advice from a respected academic, dating from May 2001 that shows solid evidence in favor of tilting in the out-of-sample test.
by grayfox
Thu Sep 15, 2016 2:40 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

Here is an example from an actual book: Random Walk Down Wall Street (2001). I don't have the book in hand, but I found a summary online. From Chap 14. A Life-Cycle Guide to Investing: Total Annual Returns for Basic Asset Classes, 1926-2001 Average Annual Return Risk Index (year-to-year volatility o...
by grayfox
Thu Sep 15, 2016 1:48 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

To the contrary, it is very easy to fail to find evidence for the equity premium. Using the same time period as the original post and a similar comparison style, we can find no equity premium, or perhaps a negative equity premium. Portfolio 1: 100% total bond market (the non-equity portfolio) Portf...
by grayfox
Thu Sep 15, 2016 1:31 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

grayfox What I understand is that researchers, using computers and datasets going back to 1926, are able to find all kinds of evidence for factor premiums. Yet when an ordinary investor tries to find these premiums using available mutual funds and easy-to-use tools like Portfolio Visualizer, the ev...
by grayfox
Wed Sep 14, 2016 2:34 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

Here is my personal take on this: ⋅ The really important thing is in the time since the portfolios were published, there was virtually no difference . Not between the total-market Portfolio 1 and the factor-aware Vanguard Portfolio 2. Not between the plebian Vanguard Portfolio 2 and the c...
by grayfox
Wed Sep 14, 2016 2:12 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of the SirHorace "8% Solution" portfolio
Replies: 16
Views: 1489

Re: An "out of sample" test of the SirHorace "8% Solution" portfolio

AlohaJoe wrote:
You might also enjoy a recent paper, "Stock Portfolio Design and Backtest Overfitting": http://papers.ssrn.com/sol3/papers.cfm? ... id=2739335



Thanks for that paper. At least now I know what this phenomenon is called: Backtest Overfitting.
by grayfox
Mon Sep 12, 2016 12:41 pm
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of the SirHorace "8% Solution" portfolio
Replies: 16
Views: 1489

Re: An "out of sample" test of the SirHorace "8% Solution" portfolio

Portfolio 1, SirHorace "8% Solution" VFITX Vanguard Intermediate-Term Treasury Fund 48.00% VGHCX Vanguard Specialized Portfolios Health Care Fund 3.00% VGPMX Vanguard Precious Metals and Mining Fund 10.00% VHCOX Vanguard Capital Opportunity Fund 1.00% VIGRX Vanguard Growth Index Fund 2.00...
by grayfox
Mon Sep 12, 2016 5:29 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

Ok, I was just joking :D around on the last post about finding another book. All kidding aside, I can explain exactly what happened. Back in 2007 you could have invested in one of three portfolios, 1, 2, or 3. In 2007, nobody knew what the outcome would be in 2016 because the future was unknown. The...
by grayfox
Mon Sep 12, 2016 1:49 am
Forum: Investing - Theory, News & General
Topic: An "out of sample" test of two specific factor-based portfolios published pre-2008
Replies: 76
Views: 4912

Re: An "out of sample" test of two specific factor-based portfolios published pre-2008

b) The book in question is one I bought in good faith when I was planning retirement, not in order to challenge anything. It is Retire Early Sleep Well: A Practical Guide to Modern Portfolio Theory, Asset Allocation and Retirement Planning in Plain English , by Steven R. Davis. I bought it in Augus...
by grayfox
Sat Sep 10, 2016 1:44 pm
Forum: Personal Consumer Issues
Topic: So being 40 is "old" in the high tech business?
Replies: 129
Views: 9078

Re: So being 40 is "old" in the high tech business?

On the outside looking in (I'm not in a tech field, just overall business field), but I have to ask - why aren't more people in the tech sector, contractors? In today's era where mutual loyalty has been tossed aside, there are no longer any pensions and healthcare can be obtained independently - wh...
by grayfox
Sat Sep 10, 2016 5:18 am
Forum: Personal Consumer Issues
Topic: So being 40 is "old" in the high tech business?
Replies: 129
Views: 9078

Re: So being 40 is "old" in the high tech business?

Anyone here eat at Taco Bell? Taco Bell came up with this idea called the K-Minus program. It means Kitchen-Minus. What it means is that there is no kitchen, and no need for skilled chefs or cooks preparing the food. Everything is prepared elsewhere. That allows Taco Bell to hire unskilled, low-wage...
by grayfox
Sat Sep 10, 2016 4:27 am
Forum: Investing - Help with Personal Investments
Topic: Hmm...how would you tweak this portfolio? Can I consider early retirement?
Replies: 57
Views: 4575

Re: Hmm...how would you tweak this portfolio? Can I consider early retirement?

So you need a Bridge to Social Security. Social Security is guaranteed income that is inflation-adjusted. Suppose you wanted to bridge to SS with guaranteed income that is inflation adjusted. You could do this with a TIPS ladder. Just buy TIPS for each year from 2016 to 2035 to cover the shortage. T...
by grayfox
Sat Sep 10, 2016 4:04 am
Forum: Investing - Help with Personal Investments
Topic: Hmm...how would you tweak this portfolio? Can I consider early retirement?
Replies: 57
Views: 4575

Re: Hmm...how would you tweak this portfolio? Can I consider early retirement?

I took a quick look at your situation. Assuming you delayed taking SS until age 70, I showed your guaranteed income sources and spending year by year. I showed income on a yearly basis. You could also show monthly income and expenses. Assume that all the numbers are in 2016 dollars, i.e. inflation a...
by grayfox
Sat Sep 10, 2016 2:16 am
Forum: Personal Consumer Issues
Topic: So being 40 is "old" in the high tech business?
Replies: 129
Views: 9078

Re: So being 40 is "old" in the high tech business?

BTW, is this thread actionable? I will answer yes. Normal Retirement Age (NRA) has been 65 for a long time, but is increasing. Age 66 for those born 1943-54, and 67 for those born after 1960. The age when you will start collecting Social Security is going up. But it seems to me that the real age whe...
by grayfox
Sat Sep 10, 2016 2:00 am
Forum: Personal Consumer Issues
Topic: So being 40 is "old" in the high tech business?
Replies: 129
Views: 9078

Re: So being 40 is "old" in the high tech business?

Put yourself in the shoes of a CEO of a big corporation that employs thousands of engineers. Your shareholders want to see the stock price go up. Analysts want to see earnings increase. The hard way to grow earnings is by increasing market share or creating new products and markets, like iPhone or i...
by grayfox
Fri Sep 09, 2016 3:05 am
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 51
Views: 2517

Re: Do you think about volatility drag on your portfolio?

Kolea, Volatility drag is not a red herring at all! You're talking about individual fund statistics. I'm talking about how funds act as components of a portfolio. How they mix in the portfolio determines how close the CAGR is to the weighted average return of the components. Dave That is fine to de...
by grayfox
Thu Sep 08, 2016 3:02 am
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 51
Views: 2517

Re: Do you think about volatility drag on your portfolio?

On the other hand, if you feel annual volatility is important (say you are withdrawing 4% of value of the fund at the end of each year), why not minimize annual volatility with Vanguard Global Minimum Volatility Fund Admiral Shares ( VMNVX ). That tries to find the portfolio on the very tip of the M...
by grayfox
Thu Sep 08, 2016 2:49 am
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 51
Views: 2517

Re: Do you think about volatility drag on your portfolio?

When it came to me diving into the world of tilting / diversifying across risk factors, a big reason for me was volatility drag. The geometric mean (annualized) return of a portfolio is always less than the average annual return. This gap is caused by volatility, and the greater the volatility the ...
by grayfox
Wed Sep 07, 2016 3:20 am
Forum: Investing - Theory, News & General
Topic: Anyone else experiencing number drift
Replies: 51
Views: 5906

Re: Anyone else experiencing number drift

The problem is that to get to that 3.3% number you have to go 100% TIPS. As soon as you make the choice to take a risk of getting a higher number (remember the average SWR is something like 6%), you run the risk of underperforming that 3.3% number. If you invest say 30/70 and don't rebalance, and t...
by grayfox
Tue Sep 06, 2016 11:34 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

BTW, I admit that I overstated the case that there is no one over 40 in tech offices. That observation was based on my own anecdotal information. Maybe I will change it to over 50. I'm googling images of offices for Google, Apple, Facebook. OMG, it looks like the local university student center. All...
by grayfox
Tue Sep 06, 2016 10:43 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

As always, I'll be the Odd ball. We took the approach, "What will bridge us to where our entire retirement portfolio will recover, Fall 2008, ages 58/61?; "What Strategy? "What risks? "What can I control, What is out of my control? "Does the order of taking Income matter? '...
by grayfox
Tue Sep 06, 2016 9:23 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

Unless you are self-employed, or own a business, or maybe work for the government, you probably work for a big corporation. This is not true. http://www.businessnewsdaily.com/5280-majority-small-businesses-infographic.html https://www.smallbusinessmajority.org/economic-agenda That may be true. I al...
by grayfox
Tue Sep 06, 2016 9:17 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

If you visit almost any tech company, you will find that there is no one there over 40. For whatever reasons, companies don't like older workers. They are going to push you out the door long before age 67. Your lucky to make it past 50. The next layoff that comes, anyone over 50 will be the first t...
by grayfox
Tue Sep 06, 2016 9:10 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

Unless you are self-employed, or own a business, or maybe work for the government, you probably work for a big corporation. If you visit almost any tech company, you will find that there is no one there over 40. This is simply not true. The last job I had in the semiconductor business, every engine...
by grayfox
Tue Sep 06, 2016 8:23 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

In case anyone missed it, I must point out that I made an error that overstated the cost of the TIPS Ladder. The cost was not $500,266, but $448,924.

So the TIPS Ladder looks even better than I originally presented. I added corrections in RED to the original post.
by grayfox
Tue Sep 06, 2016 8:01 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

I don't see how you get $500K, grayfox. If I blank out the rows for 2046 through 2032 in the "Multiplier" column of the "Ladder" sheet, it shows a cost of only $448,924 for a 15-year $30,000 per year TIPS ladder. [3] (Pasting in WSJ TIPS Quotes 9/2/2016 and the 241.02497 Ref CPI...
by grayfox
Tue Sep 06, 2016 7:47 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

Or you could keep it invested in a portfolio and withdraw from it via dividends and selling. Some would say you needed $750k at 4% which gives you $30k per year to SS and beyond. But you do not need beyond. You could take 5-6% and reduces expenses/withdrawals in case of a downturn. So you'd need $5...
by grayfox
Tue Sep 06, 2016 4:29 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Re: Bridge to Social Security

Did you think about it? Like I said, maybe you can drive for Uber or rent a room in your house on Airbnb. But if you saved and invested according to Bogleheads principles, you should have a nest egg. You should have money in a Traditional IRA or ROTH, and also taxable accounts. What you need is to b...
by grayfox
Tue Sep 06, 2016 4:14 am
Forum: Investing - Theory, News & General
Topic: Bridge to Social Security
Replies: 33
Views: 2319

Bridge to Social Security

Anyone in the U.S that has worked for a living, so that's most people, will have contributed to Social Security. So at some point, they can expect to start collecting social security income. The amount you collect depends on your earnings while you were working, so it will vary from person to person...
by grayfox
Tue Sep 06, 2016 1:31 am
Forum: Investing - Theory, News & General
Topic: Anyone else experiencing number drift
Replies: 51
Views: 5906

Re: Anyone else experiencing number drift

After reading over and over again in threads this weekend how returns over the next 10 years will be somewhere between minuscule and negative. Apparently 2.5% is the new 4%. We need to stop with this 2.5% nonsense. SWR shouldn't ever have to go below 3.33% on a 30 year retirement because you can la...
by grayfox
Tue Sep 06, 2016 1:16 am
Forum: Investing - Theory, News & General
Topic: Anyone else experiencing number drift
Replies: 51
Views: 5906

Re: Anyone else experiencing number drift

After reading over and over again in threads this weekend how returns over the next 10 years will be somewhere between minuscule and negative. Apparently 2.5% is the new 4%. We need to stop with this 2.5% nonsense. SWR shouldn't ever have to go below 3.33% on a 30 year retirement because you can la...
by grayfox
Mon Sep 05, 2016 11:06 am
Forum: Investing - Theory, News & General
Topic: Anyone else experiencing number drift
Replies: 51
Views: 5906

Re: Anyone else experiencing number drift

After reading over and over again in threads this weekend how returns over the next 10 years will be somewhere between minuscule and negative. Apparently 2.5% is the new 4%. It has got me thinking I need to bump my original number by 78.57%. I was wondering if BH are experiencing number drift. Anyo...
by grayfox
Mon Sep 05, 2016 2:41 am
Forum: Personal Finance (Not Investing)
Topic: Should a Sustainable Withdrawal Rate be linked to inflation?
Replies: 16
Views: 1451

Re: Should a Sustainable Withdrawal Rate be linked to inflation?

What about the current situation? 10-Year TIPS has real yield = 0.13% :( 10-Year Treasury is yielding 1.60% :( Breakeven inflation rate is 1.47% The Cleveland Fed reported that 10-year Inflation Expectations are 1.64% :!: The 10-Year Treasury is yielding less than what people expect inflation to be!...
by grayfox
Mon Sep 05, 2016 2:13 am
Forum: Personal Finance (Not Investing)
Topic: Should a Sustainable Withdrawal Rate be linked to inflation?
Replies: 16
Views: 1451

Re: Should a Sustainable Withdrawal Rate be linked to inflation?

Their is chatter that the SWR should not be 4% because interest rates are so low. But since interest rates are linked to inflation rates, doesn't it make more sense for a Sustainable Withdrawal Rate to be just a little more than inflation, say one percent more? That would be about 2.5% today. Of co...
by grayfox
Mon Sep 05, 2016 1:37 am
Forum: Personal Finance (Not Investing)
Topic: Should a Sustainable Withdrawal Rate be linked to inflation?
Replies: 16
Views: 1451

Re: Should a Sustainable Withdrawal Rate be linked to inflation?

I am skeptical of the 4% rule. Its not a natural constant like the speed of light after all. Read just about any article by Wade Pfau for a good discussion on why 4% maybe shouldn't even be a rule of thumb. Here's some of the recent "chatter": Are Safe Withdrawal Rates Really Safe? . Good...
by grayfox
Sun Sep 04, 2016 2:39 pm
Forum: Investing - Help with Personal Investments
Topic: Is there an investment with a FIXED rate of 3.5% or higher?
Replies: 32
Views: 4274

Re: Is there an investment with a FIXED rate of 3.5% or higher?

I am wondering if there is an instrument out there that yields 3.5% or more? I am asking about this because I can pay off my 30 mortgage which currently have a rate of 3.5% and maturity of 29 years. Instead of paying it off, is there anything that I can buy with a guaranteed rate of return of 3.5% ...
by grayfox
Sun Sep 04, 2016 5:39 am
Forum: Personal Finance (Not Investing)
Topic: retirement readiness = residual living expenses + funding the gap?
Replies: 45
Views: 3947

Re: retirement readiness = residual living expenses + funding the gap?

I'm thinking of setting a target payout rate , like 6% for fixed SPIA, or 4% for inflation-adjusted SPIA, and when it hits that target by either aging or interest rate rise, pull the trigger. 1. By "setting a target payout rate", do you mean you'll monitor SPIA's payouts rates constantly ...
by grayfox
Sun Sep 04, 2016 3:16 am
Forum: Personal Finance (Not Investing)
Topic: retirement readiness = residual living expenses + funding the gap?
Replies: 45
Views: 3947

Re: retirement readiness = residual living expenses + funding the gap?

But my original question was much simpler, let me try to rephrase it: if we take Dr. Bernstein's rule of thumb of needing to have at least 17x residual living expenses to reasonably safely retire at age 70 as a given, then what's the simplest way to model what you need to retire with the same level...
by grayfox
Sun Sep 04, 2016 2:53 am
Forum: Personal Finance (Not Investing)
Topic: retirement readiness = residual living expenses + funding the gap?
Replies: 45
Views: 3947

Re: retirement readiness = residual living expenses + funding the gap?

Personally, I consider nominal SPIAs as extremely risky when used to cover essential expenses because they are vulnerable to significant loss of power purchase after a long period of time. One of the primary goals of using a SPIA in a retirement plan is specifically to reduce the risk of not having...
by grayfox
Sun Sep 04, 2016 2:46 am
Forum: Personal Finance (Not Investing)
Topic: retirement readiness = residual living expenses + funding the gap?
Replies: 45
Views: 3947

Re: retirement readiness = residual living expenses + funding the gap?

I wonder why so many people recommend waiting until age 75 or 80? One reason to wait would be to benefit from possibly higher interest rates in the future which would make annuities cheaper. Another reason is that one might die in the next five years before buying an annuity. This wouldn't benefit ...
by grayfox
Sat Sep 03, 2016 3:36 am
Forum: Personal Finance (Not Investing)
Topic: retirement readiness = residual living expenses + funding the gap?
Replies: 45
Views: 3947

Re: retirement readiness = residual living expenses + funding the gap?

B. But to simply subtract the annuity's cost in five years from the cost today doesn't tell the whole story. If I buy an immediate annuity today, I begin collecting it today . If I wait five years, I need to get that income stream from elsewhere. A better comparison would be against the amount I'd ...

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