Search found 1832 matches

by longinvest
Thu Apr 28, 2016 11:23 pm
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 65
Views: 5077

Re: Why Are Real Interest Rates So Low Worldwide?

AlohaJoe, Any definition I want??? :D Right, I should have constrained this a little. More seriously, I think a 30-year retirement horizon is increasingly too short (there's already a 15% that one member of a couple will live past the 30th year of retirement). Since you can't buy TIPS more than 30-y...
by longinvest
Thu Apr 28, 2016 10:27 pm
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 65
Views: 5077

Re: Why Are Real Interest Rates So Low Worldwide?

Siamond, You should look for #Cruncher's TIPS ladder spreadsheet. It's an awesome construction of a ladder, such that one receives a specific inflation-adjusted amount every year (principal of maturing TIPS + all coupons of TIPS still in the ladder). Funding a 30-year retirement using TIPS was not s...
by longinvest
Thu Apr 28, 2016 10:16 pm
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 65
Views: 5077

Re: Why Are Real Interest Rates So Low Worldwide?

Siamond, Even if I consider TIPS less risky, I don't invest in Real Return Bonds (the Canadian equivalent of TIPS). I am willing to assume the additional risks of stocks and nominal bonds, in the hope of a higher reward that I know might not come if I am unlucky . But, I don't delude myself into bel...
by longinvest
Thu Apr 28, 2016 10:03 pm
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 65
Views: 5077

Re: Why Are Real Interest Rates So Low Worldwide?

Now, of course, if one's portfolio is large enough that next to no growth is required to sustain sizable withdrawals, then this isn't an issue, but very few people are fortunate enough to get to such situation. Siamond, Your last sentence is an indication, even if you didn't realize it when you wro...
by longinvest
Thu Apr 28, 2016 9:05 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 1422
Views: 732220

Re: The Three-Fund Portfolio

Thank you for the post. You are obviously way ahead of me in financial analysis! You're going to have to dumb this down for me. What is the chart telling me as regards whether to hold Int. funds in retirement? One viewpoint I heard is that if you have the Total Stock fund, you already have exposure...
by longinvest
Thu Apr 28, 2016 6:41 pm
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

BahamaMan wrote:Since there is nothing actionable on these 'conclusions', why should you pay any attention to them? -- Ignore the 'Noise' and soldier on.

+1
by longinvest
Thu Apr 28, 2016 3:47 pm
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

So how do you determine when you can retire? Will you convert everything to fixed income and/or annuities when that happens? If not, what do you think or do about the stocks? Lack_ey, Let me add this to my earlier answer. Actually, any Canadian could "retire" today, if he/she wanted, and ...
by longinvest
Thu Apr 28, 2016 3:29 pm
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

So how do you determine when you can retire? Will you convert everything to fixed income when that happens? I'll have lifelong non-portfolio base income in the form of OAS (federal program), QPP (provincial program), and a pension. I might consider buying an inflation-indexed SPIA if I feel the nee...
by longinvest
Thu Apr 28, 2016 3:17 pm
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

How do you know returns aren't -50% a year, or 300%? You must have some idea. No, I don't. That does not prevent me from having some common sense and put aside money for the future, instead of spending it all today. :happy Actually, I have a healthy allocation to bonds, in my portfolio. I know that...
by longinvest
Thu Apr 28, 2016 3:13 pm
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

I get what your saying. The savings component is more important than the expected returns component...but, you have to at least have some thought about returns. QuietWealth, BahamaMan and Rodc have explained in earlier posts, on this thread, how one does not need to have "some thought about re...
by longinvest
Thu Apr 28, 2016 1:51 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 1422
Views: 732220

Re: The Three-Fund Portfolio

Would retired people still need International stock exposure? Risk/reward? Norske, You're asking a very good question. Here's a question I propose to ask yourself, instead: If you were a Japanese investor, would you be asking this question? Here's some material to reflect about it. Extracted from h...
by longinvest
Thu Apr 28, 2016 1:36 pm
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

"saved as much as I could"? Presumably that means save as much as you could consistent with some lifestyle, rather than living on the street, etc. If so, how did you decide how much you could spend (so that you were comfortable you were saving enough)? I agree with BahamaMan's approach. M...
by longinvest
Thu Apr 28, 2016 12:55 pm
Forum: Investing - Theory, News & General
Topic: [favorite] Boglehead quotes
Replies: 60
Views: 5963

Re: [favorite] Boglehead quotes

Mickeyd,

It would be nice if you provided the source posts of your quotes.

LadyGeek,

It would be nice if you provided the actual quote you'd like to highlight in the linked post, along with the forum name of its author.

Thanks in advance to both of you. :wink:
by longinvest
Thu Apr 28, 2016 9:28 am
Forum: Investing - Theory, News & General
Topic: [favorite] Boglehead quotes
Replies: 60
Views: 5963

Re: [favorite] Boglehead quotes

Here's another gem written lately in a post by forum member and author Rick Ferri:

"[W]hen strategies are touted as producing a free lunch it's what you don't see that gets you." -- Rick Ferri

Reference: viewtopic.php?f=10&t=189264
by longinvest
Thu Apr 28, 2016 9:19 am
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 65
Views: 5077

Re: Why Are Real Interest Rates So Low Worldwide?

From the BRK annual letter of 2011, page 17. I recommend to everyone to read the entire section. I think its fair to note that Buffett's observations are more relevant to the younger members of bogleheads than they are to those in their late 60s and above, but they are not irrelevant to any of us. ...
by longinvest
Thu Apr 28, 2016 8:30 am
Forum: Investing - Theory, News & General
Topic: McKinsey report on diminishing returns
Replies: 55
Views: 3220

Re: McKinsey report on diminishing returns

Whenever I have seen predictions about the markets over my investing life of over 30 years, they are most often completely wrong and usually follow this path. 1.) Prediction is made with almost 100% certainty. 2.) Book usually accompanies prediction written by the same author. 3.) the time period e...
by longinvest
Thu Apr 28, 2016 6:57 am
Forum: Personal Finance (Not Investing)
Topic: Retirement Analysis Spreadsheet
Replies: 3
Views: 665

Re: Retirement Analysis Spreadsheet

You could start with this spreadsheet (from our wiki), and modify it to model and backtest your particular retirement plan.
by longinvest
Thu Apr 28, 2016 6:52 am
Forum: Investing - Theory, News & General
Topic: Why not ETFs?
Replies: 52
Views: 2972

Re: Why not ETFs?

6miths wrote:In Canada it's easy. No mutual funds come close to ETFs on cost.

So true!
by longinvest
Thu Apr 28, 2016 6:26 am
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 65
Views: 5077

Re: Why Are Real Interest Rates So Low Worldwide?

If you are banking on Growth of your portfolio, you may be 'denial about the very real deep risks of stocks' We definitely hear a lot about the deep risks of bonds but very little about the deep risks of stocks . Thanks for reminding us about it. I'm still waiting for somebody to convince me that i...
by longinvest
Thu Apr 28, 2016 6:11 am
Forum: Investing - Help with Personal Investments
Topic: AA. Now 70/30. Thinking of 80/20.
Replies: 48
Views: 4671

Re: AA. Now 70/30. Thinking of 80/20.

Btw, I didn't notice the price vs growth chart, and it does slightly change the numbers. I don't understand when Morningstar chooses price or growth, as I assumed it was always growth. Might have been ETFs vs mutual fund used. Here's the secret: How to use Morningstar growth charts - Bogleheads wik...
by longinvest
Wed Apr 27, 2016 8:19 pm
Forum: Investing - Help with Personal Investments
Topic: AA. Now 70/30. Thinking of 80/20.
Replies: 48
Views: 4671

Re: This thread is nearly 3 years old.

Just in case anyone missed it, this is a a nearly 3 year old thread. Hindsight is 20/20. By my estimation, last 3 years, US stocks are up 30%, World down 5% and Bonds down 2%. Net/net, I think there was about a 2% improvement over the 3 years. No statement of what it means going forward. Now, tilti...
by longinvest
Wed Apr 27, 2016 7:01 pm
Forum: Personal Consumer Issues
Topic: Should I accept this offer on my house?
Replies: 52
Views: 2841

Re: Should I accept this offer on my house?

Hayden wrote:Thanks for the advice, everyone! i just told my realtor to accept the $420.
I'm ready to start the next phase of my life (retirement)!

Congratulations!
by longinvest
Wed Apr 27, 2016 2:45 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

for smaller amounts (<=$100K), it just doesn't make a big difference. All is relative, but I will agree with you on this. Overall, my expectations, when somebody claims that beating the total bond market (TBM) with a few treasuries and CDs is easy , is that if I was to invest in these few treasurie...
by longinvest
Wed Apr 27, 2016 2:06 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

The Feb 15 2046 Stripped Principle Treasury Bond YTM 2.88. Put all $500,000 in one issue and buy it immediately after the Fed press conference. Text me in 20 years to congratulate me. :D Doc, So, now we're changing the argument to one about a single bond against a fund? This is not what it was all ...
by longinvest
Wed Apr 27, 2016 1:38 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

The conclusion we can draw is that if an investor limits herself to bonds of the highest quality and has a portfolio of perhaps $500,000, she could consider building her own portfolio, saving the cost of a mutual fund. <snip> ... and she could diversify the credit risk across perhaps as many as ten...
by longinvest
Wed Apr 27, 2016 12:19 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

Larry specified government bonds or gov't agencies - not Total Bond Market. Doc, The main reasons to Larry says to avoid corporates are (1) risk when investing in individual bonds and (2) that they don't compensate enough for their risk. As it is supposedly easy to adjust risk/returns with "ju...
by longinvest
Wed Apr 27, 2016 12:14 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

This is simple and IMO not even debatable issue as one can reproduce easily the risk/returns with just a few bonds but better yet easily beat it with CDs . (Underline mine) I am simply challenging this, as I think that it is misleading . Longinvest: while I would not call it easy , here's how I wou...
by longinvest
Wed Apr 27, 2016 11:44 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

I'm a bit baffled by your challenges to people, and why you think they would choose respond or engage, and why you choose to taunt them when they fail to choose to do so. Da5id, Here's what Larry wrote earlier in this thread : Longinvest Diversifying across maturities can just as easily be done wit...
by longinvest
Wed Apr 27, 2016 11:05 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

jebmke wrote: But for $100K, I'd probably just dump it in an online savings account at this point.

Jebmke,

So, are you up to the challenge with your savings account against VBTLX?

Best regards,

longinvest
by longinvest
Wed Apr 27, 2016 11:02 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

Also, I don't think anyone would suggest individual bonds with corporates -- TBM includes them, right? The "individual bonds" investor would not invest in corporates, of course, only in Treasuries at auction and hold them to maturity, I guess, as to avoid commissions and spreads on the se...
by longinvest
Wed Apr 27, 2016 10:50 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

Doc, For $60 per year (0.06% ER), I can put my $100,000 in VBTLX and forget about it. You're telling me that I could do better and save this $60 ($5 per month). So, are you willing to take the challenged I offered Larry? I want full documentation, in advance, of a real-life scenario starting today a...
by longinvest
Wed Apr 27, 2016 9:54 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

Larry,

I understand that you're not willing to take the challenge to prove that you can easily beat the market.

Thanks! That was very instructive, indeed.

Best regards,

longinvest
by longinvest
Wed Apr 27, 2016 8:13 am
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

Larry, Can you tell me which collection of bonds and CDs I could buy today with $100,000, and then report on this thread every transaction before it must be made (on future dates) so as to outperform Vanguard's Total Bond Market index fund (VBTLX) between today and a date of your choosing (which you...
by longinvest
Wed Apr 27, 2016 7:53 am
Forum: Investing - Help with Personal Investments
Topic: Percent International Bonds
Replies: 4
Views: 396

Re: Percent International Bonds

If 66 yrs. old, married, retired and fortunately to be living comfortably, 40% Equities and 60% Fixed Income, of the 60% Fixed what % should be International Bonds? I see the Target Retirement Income Funds VTINX and VTENX have about 15%. Is that about where I should set my allocation? Thank You Ves...
by longinvest
Wed Apr 27, 2016 7:42 am
Forum: Investing - Help with Personal Investments
Topic: Percent International Bonds
Replies: 4
Views: 396

Re: Percent International Bonds

So your gains from diversification are limited, and in fact you are buying into bonds which, on average yield less than US Treasury bonds (due to the very low YTMs in Japan and the Eurozone) and so your long run returns will be less . (underline mine) Valuethinker, Are you saying that you know with...
by longinvest
Tue Apr 26, 2016 4:31 pm
Forum: Investing - Help with Personal Investments
Topic: How do bond funds REALLY work?
Replies: 16
Views: 1727

Re: How do bond funds REALLY work?

Bonds are so confusing!!! But, stocks are even more confusing! " Apple earnings miss across the board, stock falls " How could all these analysts get their predictions wrong? And now the stock falls! Because stocks are so confusing, I don't take chances anymore. I stopped looking for the ...
by longinvest
Mon Apr 25, 2016 4:46 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 88
Views: 7182

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

buy an inflation-indexed Single Premium Immediate Annuity. In absence of CPI-indexing, one can ask for fixed rate indexing (such as 2% or 3% per year). I think you overestimate how common these annuities are. A 2008 OECD survey found that only about a dozen countries on Earth have them. The global ...
by longinvest
Sun Apr 24, 2016 8:14 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Allan Roth on why bond funds are better than individual bonds

Afan, XGB contains 320 different government bonds of various maturities; that means 640 coupon payments per year. I don't see myself managing such a huge portfolio. (Actually, in Canada, retail investors can only buy government bonds on the secondary market , paying commissions in the process, makin...
by longinvest
Sun Apr 24, 2016 7:13 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Alan Roth on why bond funds are better than individual bonds

NO benefit of diversification with government bonds, or gov"t agencies. This is simple and IMO not even debatable issue as one can reproduce easily the risk/returns with just a few bonds but better yet easily beat it with CDs. Larry, As of March 31, 2016, the 5-year return of the iShares Canad...
by longinvest
Sun Apr 24, 2016 6:47 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4623

Re: Alan Roth on why bond funds are better than individual bonds

Re diversification, that's the main benefit of funds. But it's not needed at all where there is no credit risk, as there isn't in Treasuries or government agencies, and when you stick with the highest quality munis, as we do, there is a greatly reduced need for diversification (AAA/AA and ONLY GOs ...
by longinvest
Sun Apr 24, 2016 12:41 pm
Forum: Investing - Help with Personal Investments
Topic: Paying off mortgage instead of buying bonds
Replies: 33
Views: 2975

Re: Paying off mortgage instead of buying bonds

In the US, there is a limit to how much you can invest each calendar year. If you only use a portion of your allotted space then you can't make it up in subsequent years. In Canada, one gets $5,500 TFSA (equivalent of Roth IRA) contribution space every year, and 18% of earned income (up to a maximu...
by longinvest
Sun Apr 24, 2016 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Paying off mortgage instead of buying bonds
Replies: 33
Views: 2975

Re: Paying off mortgage instead of buying bonds

Don't confuse results (i.e., luck) with strategy. IMO only contributing up to the match while paying down the mortgage aggressively to zero is a bad strategy because you are giving away the unused tax advantaged space - which can never be recovered. Paying down the mortgage vs. investing after-tax ...
by longinvest
Sun Apr 24, 2016 10:58 am
Forum: Investing - Theory, News & General
Topic: Determine risk tolerance
Replies: 19
Views: 1079

Re: Determine risk tolerance

First of all thank you fellow Boggleheads for the wealth of information on this forum. I am new to investing and 29 years old. I Have around 30K saved in an emergency fund and now my savings can finally start going into an investment account. Although a 90/10 Stock/Bond split is recommended for my ...
by longinvest
Sun Apr 24, 2016 10:37 am
Forum: Investing - Help with Personal Investments
Topic: Paying off mortgage instead of buying bonds
Replies: 33
Views: 2975

Re: Paying off mortgage instead of buying bonds

Hi Musicman, Let me be a contrarian. My desired AA is 80/20. This is very aggressive; too aggressive in my opinion. Mathematically, an exposure lower than 25% to an asset class does not move the needle. In other words, you might as well be 100% in stocks. If you really want a diversified portfolio, ...
by longinvest
Sat Apr 23, 2016 10:36 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 88
Views: 7182

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

AlohaJoe, I noted that you seem to have selected an agressive portfolio, for retirement. Why don't you try backtesting a 50/50 portfolio, even for such a long period as 50 years. You might discover that not everything you hear about bonds is true. By the way, a 40-years old person should plan for at...
by longinvest
Sat Apr 23, 2016 10:11 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 88
Views: 7182

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

Notice the green line which shows the difference between what my expenses are and what VPW tells me to withdraw. Starting in 1974 (eight years into my retirement), VPW tells me I can't withdraw enough to cover my expenses. That's the start of a 16-year sequence where VPW won't let me withdraw enoug...
by longinvest
Wed Apr 20, 2016 3:17 pm
Forum: Investing - Theory, News & General
Topic: If past performance doesn't indicate future performance, why buy stocks?
Replies: 43
Views: 3896

Re: If past performance doesn't indicate future performance, why buy stocks?

My point is only that your illustration of stocks in relation to fixed income might not follow because some of the underlying assumptions (some are implicit) aren't necessarily true, and there may be some factors that you ignored. You have provided no proof of this statement. Tell me, which assumpt...
by longinvest
Wed Apr 20, 2016 2:43 pm
Forum: Investing - Theory, News & General
Topic: If past performance doesn't indicate future performance, why buy stocks?
Replies: 43
Views: 3896

Re: If past performance doesn't indicate future performance, why buy stocks?

[...] All the above is based on pure mathematics and logic. No historical stock or bond returns are required to justify investing in stocks. This is one of many good economic justifications, but without history we wouldn't be as sure that people actually think and invest approximately in this manne...
by longinvest
Wed Apr 20, 2016 2:15 pm
Forum: Investing - Theory, News & General
Topic: If past performance doesn't indicate future performance, why buy stocks?
Replies: 43
Views: 3896

Re: If past performance doesn't indicate future performance, why buy stocks?

I'd like to address the logical leap of not buying stocks based on past performance. Are we not all buying stocks based on their past performance and planning our retirements around it? What makes us think stocks will have a greater than zero return? You could talk about the fundamental reasons why...
by longinvest
Sun Apr 17, 2016 2:14 pm
Forum: Investing - Theory, News & General
Topic: dividends: what am I missing?
Replies: 16
Views: 1547

Re: dividends: what am I missing?

Look at our wiki's VPW.

Using VPW with a rebalanced Three-Fund Portfolio combined with lifelong guaranteed income streams (Social Security, pension if any, inflation-adjusted SPIA if necessary) is simple and protects against premature portfolio depletion during retirement.

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