Search found 2782 matches

by longinvest
Sun May 27, 2018 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW) for Advanced Users
Replies: 3
Views: 356

Re: Variable Percentage Withdrawal (VPW) for Advanced Users

AlohaJoe, Thanks for the feedback! Personally, I'm not a fan of deferred annuities, fixed annuities, laddering annuities, or reverse mortgages. I'll keep my money and buy the immediate annuity if and when I need it, assuming I'm still alive. I'll pay whatever it costs within the limits of what I can...
by longinvest
Sun May 27, 2018 8:51 pm
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW) for Advanced Users
Replies: 3
Views: 356

Variable Percentage Withdrawal (VPW) for Advanced Users

I have developed a spreadsheet for advanced users of the variable-percentage withdrawal (VPW) method. Online access: Read the following instructions before clicking on the link! Click on the link below. Sign into your Google account (if not already signed in). Make a copy of the file as follows: Fil...
by longinvest
Sun May 27, 2018 8:29 am
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 758
Views: 243009

Re: Variable Percentage Withdrawal (VPW)

I have uploaded a new version of the VPW backtesting spreadsheet. As usual, you can find the download links on the Bogleheads wiki Variable percentage withdrawal page. Changes: Added 2016 return data. Added 2017 return data. Started directly collecting US historical returns and inflation data (for 2...
by longinvest
Fri May 25, 2018 8:00 am
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 758
Views: 243009

Re: Variable Percentage Withdrawal (VPW)

I'll be posting an updated spreadsheet soon, hopefully this weekend. VPW's backtesting spreadsheet already uses real-fund (after-fee) returns for year when such information is available (e.g. for data extracted from the Simba spreadsheet including VTSMX, VBMFX, and VGTSX actual returns). All data so...
by longinvest
Thu May 24, 2018 10:04 am
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 98
Views: 9994

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

It is this difficulty of predicting future expenses that gives me pause for spending too much when times are good I have difficulty predicting future expenses, too. I also have difficulty predicting future income. Should I spend less because I might lose my job next year due to an unanticipated dee...
by longinvest
Wed May 23, 2018 6:54 pm
Forum: Local Chapters and Bogleheads Community
Topic: [Virtual online chapter - Master thread]
Replies: 98
Views: 14438

Re: [Virtual online chapter - Master thread]

Lazylarry, I did make a blog website for the virtualbogleheads information, and wanted to give that because it may be a little bit before I continue working on the website. At the website, there are links for presentations. Let me know if you have any questions. ... Website below: https://virtualbog...
by longinvest
Wed May 23, 2018 5:07 pm
Forum: Personal Finance (Not Investing)
Topic: Financial and retirement issues associated w/ moving to Canada
Replies: 11
Views: 828

Re: Financial and retirement issues associated w/ moving to Canada

Greeting fellow Bogleheads, I have a question that stems from a complete lack of understanding issues associated with moving from the US to Canada. If you are kind enough to reply, please share the most obviously issues (assume you are explaining it to a Golden Retriever). I have a significant othe...
by longinvest
Tue May 22, 2018 10:03 am
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

[*] The total bond market is less volatile than the total stock market because it contains a significant amount of short-term bonds (giving it an overall intermediate duration) and, therefore, can't fluctuate as much in value as stocks, thanks to mathematics. Even if it didn't contain short term bo...
by longinvest
Mon May 21, 2018 9:05 am
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 437
Views: 83486

Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

Dear AlohaJoe, I've written a few blogs comparing them. Here are two: https://medium.com/@justusjp/harvesting-rate-efficiency-metric-be61f323a5fc https://medium.com/@justusjp/wer-inputs-outputs-6e6e3bb72e78 I like that the withdrawal methods were applied on various asset allocations, including a bal...
by longinvest
Mon May 21, 2018 7:01 am
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 758
Views: 243009

Re: Variable Percentage Withdrawal (VPW)

In another topic, I explained (yet again) that it would be a bad idea to use valuations to determine VPW's withdrawal rates: There is no reason VPW can't use valuation metrics to determine initial withdrawal rates. Returns are a variable that can be defined in the VPW model. There's a good reason no...
by longinvest
Mon May 21, 2018 6:54 am
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 437
Views: 83486

Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

Dear AtlasShrugged?, VPW assumes that future stock returns will be 5% real and bonds will return 1.8% real, so of course it will pull a lot more. If you think stocks will return 2% and bonds will return 0% then go to the "Table" tab, change "Override" from "No" to "Yes" in the VPW Parameters for Lon...
by longinvest
Mon May 21, 2018 12:25 am
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 437
Views: 83486

Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

The best time to sell stocks is when they are in a bubble, and the worst time is just after they've crashed. Trying to smooth withdrawals by selling less (lower percentage) when stocks are expensive during a bubble is equivalent to invest the non-withdrawn money into bubbly stocks. After the crash, ...
by longinvest
Sun May 20, 2018 11:53 pm
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 437
Views: 83486

Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

Dear AlohaJoe, VPW assumes that future stock returns will be 5% real and bonds will return 1.8% real, so of course it will pull a lot more. This is false . VPW doesn't assume that future stocks returns will be 5% real and future bonds returns will be 1.8% real. VPW needs fixed internal growth trends...
by longinvest
Sun May 20, 2018 8:09 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

Before considering the opinion of an author, I look at his track record. The track record of Larry Swedroe is awful: Collateralized commodity futures: Review with Me - Larry Swedroe's new book Matching the S&P 500 using the Larry Portfolio: What ever happened to the Larry portfolio? (and follow up )...
by longinvest
Sun May 20, 2018 7:23 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

Dbr, If people are talking about the growth of SD with time the answer is that it increases as SQRT(N) and the annualized SD decreases as 1/SQRT(N). These results are used to confuse people by claiming that over time risk decreases because the annulized SD shrinks when in fact that shrinking annuali...
by longinvest
Sun May 20, 2018 7:00 pm
Forum: Investing - Theory, News & General
Topic: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]
Replies: 437
Views: 83486

Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

Dear DaufuskieNate, I don't believe VPW uses valuation metrics to determine initial withdrawal rates. Prime harvesting both lowers the initial withdrawal rates and the range of the initial rates in "tilts" are compressed at higher initial valuations. I assume today we are at the higher end of valuat...
by longinvest
Sun May 20, 2018 2:26 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

Dear Anil686, As the original poster of this topic, let me try to summarize what I've learned, so far: One should never think in terms of average arithmetic returns. One should think in terms of compound returns (CAGR) instead when looking at past returns. Future returns are unknown . The total bond...
by longinvest
Sun May 20, 2018 2:04 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

As the original poster of this topic, let me try to summarize what I've learned, so far: One should never think in terms of average arithmetic returns. One should think in terms of compound returns (CAGR) instead when looking at past returns. Future returns are unknown . The total bond market is les...
by longinvest
Sun May 20, 2018 1:53 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

MIretired, Looking forward, if two portfolios have the same arithmetic mean return but different standard deviations, the compounded return of the less volatile portfolio will be greater. I would kind of like to know what the point of this(bolded) is, and if it's really true. It is true, but it is p...
by longinvest
Sun May 20, 2018 1:15 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

Dear Random Walker, Yeah, with the proliferation of articles covering valuations and expected returns I've noticed a trend of authors switching back to arithmetic averages even for their historical analyses. For example, In his book "Your complete guide to factor-based investing" Larry Swedroe exclu...
by longinvest
Sun May 20, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

Rick, I read all of this and a few of things come to mind: 1) Fees matter. There's no ambiguity in that equation. A penny saved is a penny earned. 2) The expected return of a total stock market index fund is the market less a negligible fee. There's no ambiguity there either. 3) Any fund or strategy...
by longinvest
Sun May 20, 2018 11:47 am
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 8989

Re: Three-fund portfolio returns and variance drain

Dear Random Walker, I believe this is a very important topic. Thank you for reviving this old topic. I think that my second post, in this topic, summarized it best: " Your expected return is not what you expect. " In other words, Bogleheads should beware the writings of authors who promote active in...
by longinvest
Fri May 18, 2018 5:02 pm
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 98
Views: 9994

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

Willthrill81, Livesoft, The ERN piece does look at Bogleheads VPW in those worst-case years. I read it a while ago, but I think that even VPW required one to spend 75% less than the starting amount in order for the portfolio to survive. Who can cut spending by 75%? Answer: Somebody who doesn't need ...
by longinvest
Fri May 18, 2018 1:06 pm
Forum: Investing - Theory, News & General
Topic: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality
Replies: 98
Views: 9994

Re: Withdrawal Rates – Part 24: Flexibility Myths vs. Reality

Livesoft, The ERN piece does look at Bogleheads VPW in those worst-case years. I read it a while ago, but I think that even VPW required one to spend 75% less than the starting amount in order for the portfolio to survive. Who can cut spending by 75%? Answer: Somebody who doesn't need to worry about...
by longinvest
Sun May 06, 2018 10:45 am
Forum: Investing - Theory, News & General
Topic: Lower expected stock returns means lower expected volatility?
Replies: 28
Views: 2068

Re: Lower expected stock returns means lower expected volatility?

UnderstandingJH, I think the answer to this question is no , but wondered if someone else has thought about this more than me. Historically stocks earned about 7% real, but the latest long term forecasts now put future US stock returns at 3% real ( Forbe's 30 year forecast ). I know others have rece...
by longinvest
Fri May 04, 2018 5:03 pm
Forum: Investing - Theory, News & General
Topic: LMP vs 3-Fund SWR
Replies: 7
Views: 515

Re: LMP vs 3-Fund SWR

bikechuck wrote:
Fri May 04, 2018 4:56 pm
What in heaven's name is LMP?
I guess that it means "Liability Matching Portfolio".
by longinvest
Fri May 04, 2018 5:03 pm
Forum: Investing - Theory, News & General
Topic: LMP vs 3-Fund SWR
Replies: 7
Views: 515

Re: LMP vs 3-Fund SWR

Safe Withdrawal Rate (SWR) is not meant as a withdrawal method, but as a tool to answer the question "How much do I need to retire at age 65?" For actual portfolio withdrawal, during retirement, there exist flexible methods such as variable-percentage withdrawal (VPW) or constant-percentage withdraw...
by longinvest
Sun Apr 29, 2018 8:52 am
Forum: Investing - Theory, News & General
Topic: What's wrong with this critique of indexing?
Replies: 110
Views: 6398

Re: What's wrong with this critique of indexing?

Dear Maynard, I've been reading this discussion to try to understand the argument that non-cap is active , but I'm having a hard time seeing it, as I see the distinction in the context of S&P as largely tautological. Here are the precise definitions for "active" and "passive" management on which the...
by longinvest
Sat Apr 28, 2018 11:56 am
Forum: Investing - Theory, News & General
Topic: What's wrong with this critique of indexing?
Replies: 110
Views: 6398

Re: What's wrong with this critique of indexing?

Lauretta, 3) If both stocks (Apple and News Corporation) have all information baked into their price, and have the same risk adjusted returns, the rational thing for me to do is to make the same bet on each of them. The only reason why I should bet more on one stock than on the other, is if I had re...
by longinvest
Fri Apr 27, 2018 3:16 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Liquidity Risk Not Worth It
Replies: 35
Views: 4949

Re: Larry Swedroe: Liquidity Risk Not Worth It

Let's try an out-of-sample test. Let's pick a Canadian investor willing to invest hist portfolio 50/50 into Canadian stocks and bonds. That's not an out-of-sample test. That's just making different observations altogether. Let's say that it would have been more appropriate to call it a counterexamp...
by longinvest
Fri Apr 27, 2018 1:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Liquidity Risk Not Worth It
Replies: 35
Views: 4949

Re: Larry Swedroe: Liquidity Risk Not Worth It

But let's look a real life example of the difference in returns between Treasuries and Corporates. The Vanguard Intermediate Term Treasury Admiral (VFIUX) has a 10 year growth of $10,000 of $13,687. The Vanguard Intermediate Term Investment Grade Admiral (VFIDX) consists of 68% corporates and has a...
by longinvest
Fri Apr 27, 2018 8:34 am
Forum: Investing - Theory, News & General
Topic: Currency Risk for ETFs [Canada]
Replies: 37
Views: 1725

Re: Currency Risk for ETFs [Canada]

Even if PPP held in the long term, this wouldn't change the fundamental fact that the returns and risks of the same investment would remain different for two investors, a domestic and a foreign one. The possibility that one return could match, over one specific long-term time frame, doesn't change ...
by longinvest
Fri Apr 27, 2018 7:39 am
Forum: Investing - Theory, News & General
Topic: Currency Risk for ETFs [Canada]
Replies: 37
Views: 1725

Re: Currency Risk for ETFs [Canada]

Dear Chatbotte, (...) This is fundamental and can't be changed. (...) longinvest, Some people might argue that long-run PPP holds, which would make your proposition untrue, at least in the long term. By cutting the text I wrote, in the quote, the comment projects a different meaning on my text. Here...
by longinvest
Fri Apr 27, 2018 7:19 am
Forum: Investing - Theory, News & General
Topic: Currency Risk for ETFs [Canada]
Replies: 37
Views: 1725

Re: Currency Risk for ETFs [Canada]

I've presented my main argument against a cap-weighted allocation between domestic and international investments, which is that the same exact investment doesn't carry the same returns nor the same risks for two investors, a domestic and a foreign one. This is fundamental and can't be changed. As I ...
by longinvest
Fri Apr 27, 2018 7:08 am
Forum: Investing - Theory, News & General
Topic: Currency Risk for ETFs [Canada]
Replies: 37
Views: 1725

Re: Currency Risk for ETFs [Canada]

longinvest, I said that it was enlightening because it shed light on the significant impact of currency exchange on returns. Not exactly. You didn't say anything about real returns, because you didn't say anything about inflation rates. Under PPP, the ex post return on your unhedged foreign equity ...
by longinvest
Fri Apr 27, 2018 6:57 am
Forum: Investing - Theory, News & General
Topic: Currency Risk for ETFs [Canada]
Replies: 37
Views: 1725

Re: Currency Risk for ETFs [Canada]

I just commented on longinvest citing an "enlightening" case for not hedging equities, which actually is a case for hedging equities by that same logic, from a U.S. perspective, but investors are advised not to hedge currency risk "in equities" on this forum. I said that it was enlightening because...
by longinvest
Thu Apr 26, 2018 11:18 am
Forum: Investing - Theory, News & General
Topic: Another Warren Buffett S&P 500 Recommendation
Replies: 76
Views: 7331

Re: Another Warren Buffett S&P 500 Recommendation

... (that's one of the reasons why buying value stocks beats investing in growth stocks)... Yes, that's likely the reason for what I said regarding, " people here seem to accept it as a given that lower valuations mean higher expected returns " ... People here buy into the idea of there being a 'va...
by longinvest
Thu Apr 26, 2018 8:53 am
Forum: Investing - Theory, News & General
Topic: Stocks for the Long Run by Jeremy Siegel
Replies: 33
Views: 4341

Re: Stocks for the Long Run by Jeremy Siegel

It was worth buying the fifth edition just to read: Perhaps more importantly, they did so with considerably less risk. Perhaps it's just how the actual experience was, but having seen inflation devastate bonds in the 1970s, it didn't feel like less risk. Inflation didn't devastate bonds in the 1970...
by longinvest
Thu Apr 26, 2018 8:14 am
Forum: Investing - Theory, News & General
Topic: Stocks for the Long Run by Jeremy Siegel
Replies: 33
Views: 4341

Re: Stocks for the Long Run by Jeremy Siegel

It was worth buying the fifth edition just to read: In the first four editions of Stocks for the Long Run , I noted that the last 30-year period when the return on long-term bonds beat stocks ended in 1861, at the onset of the Civil War. That is no longer true. Because of the large drop in governme...
by longinvest
Thu Apr 26, 2018 7:46 am
Forum: Investing - Help with Personal Investments
Topic: Allocation Debate - consider all accounts as one?
Replies: 22
Views: 1398

Re: Allocation Debate - consider all accounts as one?

I consider all my accounts as a single portfolio. I have 3 accounts (tax-deferred, tax-free, and taxable) and my AA contains 4 distinct assets (domestic and international stocks, nominal and inflation-indexed domestic bonds). If I had used a "mirror allocation" in all 3 accounts, my portfolio would ...
by longinvest
Thu Apr 26, 2018 7:12 am
Forum: Investing - Theory, News & General
Topic: Another Warren Buffett S&P 500 Recommendation
Replies: 76
Views: 7331

Re: Another Warren Buffett S&P 500 Recommendation

I would never use SWR ( constant-dollar withdrawal ), a withdrawal method which lets most of its adopters die with an unspent fortune while bankrupting most of the others, as a retirement model to set my asset allocation! Most retirees adapt their withdrawals to the reality of the moment. Retirement...
by longinvest
Wed Apr 25, 2018 9:21 pm
Forum: Investing - Help with Personal Investments
Topic: Managed Beating Index?
Replies: 35
Views: 2607

Re: Managed Beating Index?

There's our wiki's easy-to-use personal return spreadsheet. It calculates portfolio time-weighted returns which are easily comparable to published returns. Well that's even better for my managed account but it doesn't seem accurate . Anybody who finds a calculation error in the spreadsheet can repo...
by longinvest
Wed Apr 25, 2018 9:06 pm
Forum: Investing - Help with Personal Investments
Topic: Managed Beating Index?
Replies: 35
Views: 2607

Re: Managed Beating Index?

There's our wiki's easy-to-use personal return spreadsheet. It calculates portfolio time-weighted returns which are easily comparable to published returns. Well that's even better for my managed account but it doesn't seem accurate . Anybody who finds a calculation error in the spreadsheet can repo...
by longinvest
Wed Apr 25, 2018 7:51 pm
Forum: Investing - Help with Personal Investments
Topic: Managed Beating Index?
Replies: 35
Views: 2607

Re: Managed Beating Index?

There's our wiki's easy-to-use personal return spreadsheet. It calculates portfolio time-weighted returns which are easily comparable to published returns.
by longinvest
Sun Apr 22, 2018 5:18 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13500

Re: I’m still not a fan of international bond funds

Here's my take. None of what I've read so far, in the current topic, had prepared me to this outcome. I don't see US bonds magically transformed into Canadian bonds. I don't see a magical hedge return. And, I do see a mostly-unfavorable tracking error between VBU and BND . Markets don't care about o...
by longinvest
Sun Apr 22, 2018 5:00 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13500

Re: I’m still not a fan of international bond funds

Let's try to get Portfolio Visualizer to the rescue. In 2014, Vanguard Canada introduced the U.S. Aggregate Bond Index (CAD-hedged) ETF ( VBU ), a wrapper around the U.S.-based Vanguard Total Bond Market ETF ( BND ). Vanguard Canada's argument in favor of VBU is its diversification benefit relative ...
by longinvest
Sun Apr 22, 2018 4:03 pm
Forum: Investing - Help with Personal Investments
Topic: Easy way to compare funds, indexes, stock
Replies: 16
Views: 1198

Re: Easy way to compare funds, indexes, stock

MrJones, There's Portfolio Visualizer https://www.portfoliovisualizer.com/backtest-portfolio, but its granularity is monthly (when "Time Period" is set to "Month-to-Month") and it won't do taxes. It calculates total returns and shows charts of growth including reinvested dividends. Thank you, I see ...
by longinvest
Sun Apr 22, 2018 3:53 pm
Forum: Investing - Theory, News & General
Topic: How can Bond Funds perform better than yield
Replies: 35
Views: 4002

Re: How can Bond Funds perform better than yield

Kevin, Again, I just want to caution against examples of returns being way higher than initial yields as representative of what is likely to happen--I see this here often as well, with posters referring to "roll yield" as if it's some forordained positive component of return, which it is not. OK. I...
by longinvest
Sun Apr 22, 2018 3:50 pm
Forum: Investing - Theory, News & General
Topic: How can Bond Funds perform better than yield
Replies: 35
Views: 4002

Re: How can Bond Funds perform better than yield

Dear Lack_ey, I think if we look at cumulative returns, we should probably look at the ratio of end values. That's a typical argument used by high-cost mutual fund managers who don't like investors to see the ravaging impact of investment fees on their returns. I'm quite surprised to see such a sugg...
by longinvest
Sun Apr 22, 2018 3:22 pm
Forum: Investing - Theory, News & General
Topic: How can Bond Funds perform better than yield
Replies: 35
Views: 4002

Re: How can Bond Funds perform better than yield

Kevin, Just for fun, let's look at SEC yield of VICSX on 12/31/2014, since post was made about this fund on 12/24/2014 (and I want to use PV to just look at full month returns). SEC yield on 12/31/2014 was 3.17%, and return for Jan 2015 through March 2018 was 2.78%. So over about 3.25 years, about 4...