Search found 2324 matches

by patrick013
Sat Sep 22, 2018 1:58 pm
Forum: Investing - Help with Personal Investments
Topic: CD Ladder
Replies: 8
Views: 1002

Re: CD Ladder

... or is there more complexity to it that I’m missing? Bond ladders result in diversification that can eliminate interest rate risk, provide periodic liquidity, and predictable cash flows. Laddering CD's or bonds provides a hedge against interest rate risk. As interest rates rise redemption procee...
by patrick013
Fri Sep 21, 2018 4:28 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 45
Views: 2393

Re: Why should bond duration = investment horizon?

I looked at 5-year treasury bonds rather than 10-year bonds (as in the WSJ article), primarily because the Ibbotson total return data I have is for 5-year bonds. I could extrapolate a 10-year total return by blending 5-year and 20-year numbers, but I don't think that'd be entirely accurate due to s...
by patrick013
Thu Sep 20, 2018 9:09 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 45
Views: 2393

Re: Why should bond duration = investment horizon?

vineviz wrote:
Thu Sep 20, 2018 8:50 pm
patrick013 wrote:
Thu Sep 20, 2018 7:59 pm
Well the YTM calc does the same thing so duration isn't absolutely needed.
This isn’t even a little bit true.
Relatively easy actually, to derive the bond price change percentage
related to a 1% change in yield using a YTM calculator.
by patrick013
Thu Sep 20, 2018 7:59 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 45
Views: 2393

Re: Why should bond duration = investment horizon?

Sorry, but I can't see any practical use for it. Please keep in mind not all textbooks are written with your investment strategy in mind. I can assure you as someone who helps manage institutional fixed income portfolios that have been structured to back very specific types of liabilities, duration...
by patrick013
Wed Sep 19, 2018 8:00 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 45
Views: 2393

Re: Why should bond duration = investment horizon?

And when bonds have done poorly, the return of a diversified portfolio with LT bonds wasn't *that* much worse than one with ST bonds. As such, why would you skip the chance to earn that premium? Is bond volatility really that bad? I think the numbers that portray that are based on prior coupons tha...
by patrick013
Wed Sep 19, 2018 6:04 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 45
Views: 2393

Re: Why should bond duration = investment horizon?

I think duration is just journalistic verbiage it can be such a joke. I think that bond investors, most of the time, have good reason to treat duration as the single most important descriptive measure of a bond or bond portfolio. Why even bother with it. Textbook writers must need something to fill...
by patrick013
Wed Sep 19, 2018 3:45 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 45
Views: 2393

Re: Why should bond duration = investment horizon?

I wouldn't use duration or investment horizon for any decisions regarding bond investments. I still refer to maturity, YTM, and target dating expected rate or yield curve changes. Doing just fine doing just that. I'd learn some bond strategies or buy TBM. Duration isn't accurate enough for me especi...
by patrick013
Mon Sep 17, 2018 2:20 pm
Forum: Investing - Theory, News & General
Topic: Statistical Significance within 30 year projections
Replies: 2
Views: 303

Re: Statistical Significance within 30 year projections

Monte Carlo should give the most descriptive probabilities. Straight line contributions, compounding, and then withdrawals are a good starting point. But then put the results into Monte and see what it says. Reasonable averages are all we have for long term estimates based on our incomes, balance at...
by patrick013
Sun Sep 16, 2018 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: Large, Mid, Small Cap Recommendations for Roth IRA
Replies: 10
Views: 631

Re: Large, Mid, Small Cap Recommendations for Roth IRA

Also, what about including dividend payers in the large cap since it's non-taxable? A Roth is the best place for equity no doubt. Tilting and causing some more volatility with LC general index, MC general index, and SC general index equally allocated is an aggressive tilt and has provided excellent...
by patrick013
Sat Sep 15, 2018 4:03 pm
Forum: Investing - Theory, News & General
Topic: Lawyers vs. Advisors
Replies: 2
Views: 729

Re: Lawyers vs. Advisors

Wm_o_o_o wrote:
Thu Sep 13, 2018 4:46 am
Just in case this was intended as humerous, if you litigate, you'll be benefiting one side more than the other and taking sides isn't fair :)
I think the higher the fee the more possibility the Advisor(s) get sued.
by patrick013
Fri Sep 14, 2018 11:30 am
Forum: Investing - Theory, News & General
Topic: Age in Bonds - Still Recommended?
Replies: 142
Views: 10176

Re: Age in Bonds - Still Recommended?

I'm thinking age-in-bonds stop at 50. But the only time I would rebalance is when PE's are very high, like 25 to 30ish, and just let the market have it's momentum most of the time otherwise. It really depends on personal risk, aggressive AA or not. Graham said to have 25% in stocks or 25% in bonds a...
by patrick013
Wed Sep 12, 2018 12:10 pm
Forum: Investing - Theory, News & General
Topic: Lawyers vs. Advisors
Replies: 2
Views: 729

Lawyers vs. Advisors

Litigation Tsunami Against Advisors

The lawyers want some active management regarding AA before
or in contemplation of a major market correction. The advisors
in many cases are buy-and-holders. Can we litigate here ?
by patrick013
Sat Sep 08, 2018 9:59 pm
Forum: Investing - Theory, News & General
Topic: Why Bull Markets Are Dangerous
Replies: 152
Views: 16819

Re: Why Bull Markets Are Dangerous

Well if I rebalance when PE's are over 25 what to do when PE's
are over 30 ? I hope they don't have that much optimism and
confidence.
by patrick013
Sat Sep 08, 2018 5:50 pm
Forum: Investing - Theory, News & General
Topic: Best argument to tilt retirement portfolio
Replies: 2
Views: 593

Re: Best argument to tilt retirement portfolio

What is the best argument/data/study/post you have seen in favor of tilting your portfolio rather than buying a three-fund portfolio? Backtest Portfolio Asset Allocation Bonds can be anything, doesn't have to be TBM or whatever. Gains held in a CD ladder look fine going forward several years. The t...
by patrick013
Sat Sep 08, 2018 12:23 pm
Forum: Investing - Theory, News & General
Topic: Is individual Bonds better than Bond Fund?
Replies: 58
Views: 5145

Re: Is individual Bonds better than Bond Fund?

rgs92 wrote:
Sat Sep 08, 2018 12:14 pm
I don't think I ever heard Suze mention the kind of individual bonds she would use in an IRA. (Like short term treasuries? What good is that?)
Zero-coupon bonds. May yield higher than coupon bonds. Plus
you could target date withdrawals if needed to do so. So some
recommend zero's.
by patrick013
Sat Sep 08, 2018 12:06 pm
Forum: Investing - Theory, News & General
Topic: Is individual Bonds better than Bond Fund?
Replies: 58
Views: 5145

Re: Is individual Bonds better than Bond Fund?

I can change some of my bond AA to long from short term or from short term to long term to take advantage of changes in the secular trend in interest rates. Otherwise a bond fund has the diversification benefit when investing in muni's or corp bonds which should in an investment graded bond fund any...
by patrick013
Fri Sep 07, 2018 1:35 pm
Forum: Investing - Theory, News & General
Topic: Are the stock market movements really random?
Replies: 37
Views: 2812

Re: Are the stock market movements really random?

I used to think GNP, CPI, and Growth explained the market while observing Consumption holding quite steady when market's crashed, leading to future optimism. Why not buy and hold. Looking at Earnings, Dividends, and PE's the future has a tighter and responsive explanation but all that does is tempe...
by patrick013
Thu Sep 06, 2018 6:06 pm
Forum: Investing - Theory, News & General
Topic: Are the stock market movements really random?
Replies: 37
Views: 2812

Re: Are the stock market movements really random?

I used to think GNP, CPI, and Growth explained the market while observing Consumption holding quite steady when market's crashed, leading to future optimism. Why not buy and hold. Looking at Earnings, Dividends, and PE's the future has a tighter and responsive explanation but all that does is temper...
by patrick013
Sun Sep 02, 2018 12:06 pm
Forum: Investing - Help with Personal Investments
Topic: What are your goals when you change your bond funds?
Replies: 36
Views: 2339

Re: What are your goals when you change your bond funds?

Phase out the 5 year CD ladder which did get 10 year TRSY yield levels out of a 5 year CD ladder. Switch to a 2 year CD ladder to target date FFR rate increases expected or even a MM fund. When the FFR peaks or is expected to fall again going into a LT bond fund. Hope- fully 4% and higher if a LT bo...
by patrick013
Sat Sep 01, 2018 7:20 pm
Forum: Investing - Help with Personal Investments
Topic: Is it time to go shorter in bonds ?
Replies: 100
Views: 7411

Re: Is it time to go shorter in bonds ?

July 2016 would have been an excellent time to deploy the go shorter strategy. Right, I was a little later that that but not too much so. So that brings the question: what is the signal to go back to intermediate term? Just to note I do make a half hearted attempt to market time fixed income yields...
by patrick013
Fri Aug 31, 2018 7:39 pm
Forum: Investing - Theory, News & General
Topic: Investment Books
Replies: 42
Views: 2824

Re: Investment Books

The Boglehead Guide should be on the shelf as it handles general investing and the market portfolio quite well. Others you just have to shop around for. Old finance textbooks usually have good chapters on tax shelters, bond strategy, a few hedges, financial planning or whatever the author is good at...
by patrick013
Fri Aug 31, 2018 2:07 pm
Forum: Investing - Theory, News & General
Topic: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com
Replies: 69
Views: 5545

Re: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com

Advisors that have begun to use Monte Carlo simulation are still applying the same advice they applied in the past but with access to the information Monte Carlo reports can provide. They ask the client how much they are currently saving, what their assets are, their risk, age of retirement and with...
by patrick013
Thu Aug 30, 2018 4:02 pm
Forum: Investing - Theory, News & General
Topic: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com
Replies: 69
Views: 5545

Re: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com

So.....with a 50-50 portfolio you should have yearly returns of 6% overall foreseeable with lower SD of 12-14% approximately. Even if that's true, you're still back to 3% real (if inflation runs at 3%). So I'm not sure things are any better under this scenario, but tell me if I'm missing something....
by patrick013
Wed Aug 29, 2018 5:46 pm
Forum: Investing - Theory, News & General
Topic: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com
Replies: 69
Views: 5545

Re: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com

Well you can't spend real dollars yet. I think it's better to adjust future budgets for inflation but let things like average returns and Monte's still use nominal dollars for their calculations. If you can't get a TRSY10 that pays 4% you should be able to get a Farm Credit GSE for 4% for 10 years a...
by patrick013
Mon Aug 27, 2018 12:12 pm
Forum: Investing - Theory, News & General
Topic: Any metrics that say US Stocks are *NOT* expensive?
Replies: 70
Views: 4691

Re: Any metrics that say US Stocks are *NOT* expensive?

It can usually be observed that the PE of the 500 is directly related to a Corporate A or BBB rated medium long bond yield although the movement to that point may be slow if the market has been trending overbought or oversold. Below the 10 year TRSY is used, the correlation could be higher, but the ...
by patrick013
Fri Aug 24, 2018 6:32 pm
Forum: Investing - Help with Personal Investments
Topic: Good bond duration for low risk, younger investor
Replies: 16
Views: 1224

Re: Good bond duration for low risk, younger investor

It is not worth being clever. I couldn't agree more. It just seems to be pretty common advice for bond duration to somewhat match investment horizon . I have a very long horizon and thought it was worth considering whether my bond portfolio needed some adjustment. But not for 20-30 years...that's r...
by patrick013
Thu Aug 23, 2018 12:41 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19952

Re: Treasury Bonds are the Only Bonds You Need

Nobody addresses the limitations of duration they just say it does this or that, but only under prescribed conditions. The Advisor Manual doesn't recommend it at all but does mention Monte Carlo as useful to portfolio managers. Using a zero-coupon treasury isn't exactly req'd as with maturity matchi...
by patrick013
Wed Aug 22, 2018 4:05 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19952

Re: Treasury Bonds are the Only Bonds You Need

As you say, though, the idea that duration and maturity should reflect the investment horizon is neither complicated nor controversial. I hate to speculate about WHY so many investors resist this aspect of portfolio construction, but it does strike me as peculiar and perhaps reminiscent of some com...
by patrick013
Tue Aug 21, 2018 6:58 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19952

Re: Treasury Bonds are the Only Bonds You Need

Let's also say (and this is within the realm of possibility) that interest rates spike upwards at 4 years and 11 months. That will cause a large drop in your bond fund, and you may be unable to meet your liability. If the same spike were to happen in the case of the individual bond, you would not c...
by patrick013
Mon Aug 20, 2018 8:44 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19952

Re: Treasury Bonds are the Only Bonds You Need

More window dressing. Returns don't increase after a certain point
but inflation certainly keeps going slowly upward.

So.......
by patrick013
Mon Aug 20, 2018 7:22 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19952

Re: Treasury Bonds are the Only Bonds You Need

As a rule, the duration of your bonds should match your investment horizon. If you are more 10 years from retirement, the bulk of your bonds should be intermediate or long-term bonds, not a cash-like pseudo-insurance product like a GIC. This statement seems to be a major sub-current within this thr...
by patrick013
Mon Aug 20, 2018 11:32 am
Forum: Investing - Theory, News & General
Topic: Which is more diversified? TSM or TSM+value?
Replies: 18
Views: 1464

Re: Which is more diversified? TSM or TSM+value?

value stocks = under-priced stocks? Yes but not always. Also low growth but stable market share revenue-wise. Also quality of earnings is desirable when estimates are close to reality and higher Sharpe Ratio is observed. Value stocks could be "value traps" where lower price ratios foresee decreasin...
by patrick013
Sun Aug 19, 2018 8:23 pm
Forum: Investing - Theory, News & General
Topic: Which is more diversified? TSM or TSM+value?
Replies: 18
Views: 1464

Re: Which is more diversified? TSM or TSM+value?

The following is my main question on value investing. (I'm not against value investing. Just want to know what your objective is.) I invest in value (or any other factor such as size, momentum, profitability, investment) because 1) to achieve a higher expected return + lower stdev than TSM (which i...
by patrick013
Fri Aug 17, 2018 7:06 pm
Forum: Investing - Theory, News & General
Topic: Massive small cap tilt with low equity AA - anybody do this?
Replies: 33
Views: 2982

Re: Massive small cap tilt with low equity AA - anybody do this?

I'm not asking for my own scenario, just from a theoretical point of view. Do any of you have an equity allocation less than 50%, but put that equity position disproportionately into the smalls? Yes, but into a small cap general index or blend index. Why ? Decades go by where growth beats value the...
by patrick013
Thu Aug 16, 2018 11:52 am
Forum: Investing - Theory, News & General
Topic: The Case for Multifactor Funds
Replies: 17
Views: 1285

Re: The Case for Multifactor Funds

But how many factors are there ? A few or 8 or ten ? I think
more history is needed for some of them. Small seems to be
the most reliable with the most history and positive results
past and current. The others might revert into a bunch of
chaotic market timing. More history needed then.
by patrick013
Thu Aug 16, 2018 11:16 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Betting Against Beta
Replies: 12
Views: 1522

Re: Larry Swedroe: Betting Against Beta

Beta is the largest driver of expected return for most stocks under CAPM and multi-factor models. I’m trying to understand how one can simultaneously believe those models are correct and believe that low beta stocks have a higher expected return than high beta stocks. Another point is that many low...
by patrick013
Wed Aug 15, 2018 6:38 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Betting Against Beta
Replies: 12
Views: 1522

Re: Larry Swedroe: Betting Against Beta

Volatility is just something we have to live with. It can describe market uncertainty, growth, or just plain pricing chaos. High beta does produce higher returns but some low beta areas can have even higher returns as their movement tho lower is generally upward compared to the market. Utility and s...
by patrick013
Wed Aug 15, 2018 1:08 pm
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1051
Views: 82314

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

Bendee wrote:
Wed Aug 15, 2018 6:36 am
What if the next 5-10 years show Int'l beating US?
I wouldn't have any faith in it if it doesn't. I need the money too much.
by patrick013
Tue Aug 14, 2018 5:53 pm
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1051
Views: 82314

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2010&firstMonth=1&endYear=2018&lastMonth=12&endDate=02%2F13%2F2017&initialAmount=100000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&showYield=true&reinve...
by patrick013
Tue Aug 14, 2018 2:27 pm
Forum: Investing - Help with Personal Investments
Topic: Another Roth vs Traditional Debate
Replies: 21
Views: 1887

Re: Another Roth vs Traditional Debate

Up until this point I've been maxing out my pre-tax 401k, Roth IRA, and HSA. I will soon open a spousal IRA for my wife. Distributions: $10-25k/yr (qualified dividends) It's not very common but it is possible to put the stocks into a Roth IRA. This would further reduce your taxable income. Ask your...
by patrick013
Sat Aug 11, 2018 12:33 pm
Forum: Investing - Theory, News & General
Topic: Evaluating Munis beyond rating
Replies: 11
Views: 948

Re: Evaluating Munis beyond rating

https://image.ibb.co/j46B39/staterankings2017.jpg The above list is already a year old. Also, some states have pensions that are greatly underfunded and that is a cause for concern when bond payments need to be made by whatever govt. unit has that type of deficit. Generally a AAA short term muni is ...
by patrick013
Thu Aug 09, 2018 6:38 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional 401k and Roth 401k?
Replies: 14
Views: 663

Re: Traditional 401k and Roth 401k?

What if immediately after after-tax contributions, I convert it to a Roth IRA. Then, there would be minimal to no earnings. This seems to take care of the issue? I don't think you can do that every month. Once a year probably, so some tax may be payable as balances increase. But then you can pick y...
by patrick013
Thu Aug 09, 2018 12:41 pm
Forum: Investing - Help with Personal Investments
Topic: Question about investing in bonds
Replies: 17
Views: 1555

Re: Question about investing in bonds

Is there any further material I can read on bonds? (besides the link above of course). Tax-efficient Fund Placement The above basically says first, put your bonds in a tax-advantaged (retirement) account preferably t401k and/or tIRA. Put your international equities in a taxable account when you hav...
by patrick013
Wed Aug 08, 2018 12:33 pm
Forum: Investing - Theory, News & General
Topic: "Age in Bonds" fails almost everyone
Replies: 217
Views: 13720

Re: "Age in Bonds" fails almost everyone

For an investor who is saving for retirement, the changes we are discussing in AA can increase or reduce retirement income by anywhere from 10% to 50%: I wouldn't say that such a difference "isn't important" to most people. Changes ? That's nothing new. People have known that for decades around her...
by patrick013
Tue Aug 07, 2018 4:06 pm
Forum: Investing - Theory, News & General
Topic: True Risk-Adjuted Returns
Replies: 17
Views: 1219

Re: True Risk-Adjuted Returns

To take the simplest example I can think of, if the risk of getting wiped out in EM's was twice that of the S&P500, the EM's risk-adjusted return the way I look at risk would be 4%, not 8%. Is there a calculation for that? The least fancy financial term that could be used is the coefficient of vari...
by patrick013
Tue Aug 07, 2018 12:53 pm
Forum: Investing - Theory, News & General
Topic: "Age in Bonds" fails almost everyone
Replies: 217
Views: 13720

Re: "Age in Bonds" fails almost everyone

The failure is that people keep blindly repeating this "rule of thumb" as if it had some empirical or theoretical basis. Some bogleheads seem to take great delight in maligning the glide paths of target date retirement funds, but there has literally NEVER been period in US history when "age in bond...
by patrick013
Tue Aug 07, 2018 11:24 am
Forum: Investing - Theory, News & General
Topic: "Age in Bonds" fails almost everyone
Replies: 217
Views: 13720

Re: "Age in Bonds" fails almost everyone

If age in bonds stop at 50 isn't liked I can't help it. The market could tank for 10 or 20 years and have zero return anytime it wants to. Say there's conservative, moderate, and aggressive investors. 25% stocks, 50% stocks, and 75% stocks respectively. Now there are 9 ways to do that here: Portfoli...
by patrick013
Mon Aug 06, 2018 4:01 pm
Forum: Investing - Theory, News & General
Topic: "Age in Bonds" fails almost everyone
Replies: 217
Views: 13720

Re: "Age in Bonds" fails almost everyone

Obviously a simple rule is never going to be perfectly right for everyone. Heck, it might not be PERFECTLY right for anyone. But if we're going to dole out generalized advice, "age in bonds" has outlived its productive life and deserves to be retired. There's a variety of philosophies. Buffet is al...
by patrick013
Mon Aug 06, 2018 11:56 am
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19952

Re: Treasury Bonds are the Only Bonds You Need

While I totally agree that TIPS make more sense, if you are going to use nominals, they should match your investment horizon(s). You're recommending IT or LT bonds when rates haven't peaked ? Longer term TRSY's are not paying 6-7-8% like they did in decades past. A longer investment horizon looks l...