Search found 5379 matches

by bobcat2
Sat Aug 08, 2020 10:29 am
Forum: Personal Investments
Topic: Bond Alternatives in the time of Zero rates
Replies: 58
Views: 5750

Re: Bond Alternatives in the time of Zero rates

Some things to consider when real interest rates are zero or less. - Plan to work more years (at least plan to work 44 yrs) and save more per year. This could include working PT in retirement. - When the children leave the nest allocate that spending to retirement savings. (Same for when mortgage is...
by bobcat2
Sat Jul 25, 2020 5:00 pm
Forum: Investing - Theory, News & General
Topic: William Bernstein interview on Rational Reminder "Praying for a bear market"
Replies: 34
Views: 5867

Re: William Bernstein interview on Rational Reminder "Praying for a bear market"

Queston - Should young investors be considering using leverage?

Bernstein's answer - It looks good on paper. If you have a PhD in economics from Yale, it looks good, but for real people in the real world, it doesn't work so well.

BobK
by bobcat2
Mon Jul 20, 2020 12:14 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Performance & Flows During COVID-19 Crisis
Replies: 2
Views: 285

Mutual Fund Performance & Flows During COVID-19 Crisis

Abstract - Mutual Fund Performance & Flows During COVID-19 Crisis - by Lubos Pastor, M. Blair Vorsatz We present a comprehensive analysis of the performance and flows of U.S. actively-managed equity mutual funds during the COVID-19 crisis of 2020. We find that most active funds underperform passive ...
by bobcat2
Mon Jul 06, 2020 2:36 pm
Forum: Investing - Theory, News & General
Topic: Does it really matter when you claim Social Security
Replies: 109
Views: 9270

Re: Does it really matter when you claim Social Security

At what age did you start taking SS and does it really matter in the grand scheme of things? :confused The plan is set up in some sense to be actuarially neutral, but that does not make it actuarially neutral for participants. If for instance the plan is actuarially neutral for single men, then it ...
by bobcat2
Sun Jun 28, 2020 8:32 pm
Forum: Investing - Theory, News & General
Topic: Why is risk often defined as volatility?
Replies: 27
Views: 1813

Re: Why is risk often defined as volatility?

Why is risk defined by most on here as volatility? Investment risk, or speculative risk as it is sometimes called, isn't defined as volatility. Speculative risk is defined as uncertainty of an outcome, such as future stock returns.* Volatility, or standard deviation, is a good way to measure this r...
by bobcat2
Sun Jun 21, 2020 2:09 pm
Forum: Investing - Theory, News & General
Topic: Volatility is NOT Risk, Bogle
Replies: 39
Views: 3560

Re: Volatility is NOT Risk, Bogle

Volatility is not risk. Volatility (standard deviation) is a very good way to measure risk. To me, the biggest risk to an investor is loss of purchasing power over time not volatility. Volatility should be measured using real returns - not nominal returns. My biggest risk is that I don't have the ba...
by bobcat2
Sat Jun 20, 2020 2:28 pm
Forum: Investing - Theory, News & General
Topic: High inflation and real stock market return
Replies: 18
Views: 1715

Re: High inflation and real stock market return

The US economy experienced two calendar decades of high inflation during the 20th century. One is the much discussed 1970-79 period. The other is the decade 1910-19. The inflation during the earlier 1910-19 period is mainly associated with WWI. Inflation accelerated beginning in either late 1915 or ...
by bobcat2
Tue Jun 09, 2020 9:34 pm
Forum: Investing - Theory, News & General
Topic: US Officially Enters a Recession
Replies: 10
Views: 1919

Re: US Officially Enters a Recession

I was under the mistaken impression that the NBER does not call a recession until they have determined that it is over, but evidently I misunderstood something. From the WSJ - The U.S. economy entered a recession in February, the group that dates business cycles said Monday, ending the longest Amer...
by bobcat2
Mon Jun 08, 2020 1:33 pm
Forum: Investing - Theory, News & General
Topic: Chances of no recession in 2020
Replies: 17
Views: 2656

Re: Chances of no recession in 2020

Jason Furman tweets today on recession. The *longest* economic expansion in American history is officially over—with the economy expanding for 128 months from its trough in June 2010 to its peak in February 2020 according to the NBER Business Cycle Dating Committee. and If the committee follows past...
by bobcat2
Mon Jun 08, 2020 1:20 pm
Forum: Investing - Theory, News & General
Topic: Chances of no recession in 2020
Replies: 17
Views: 2656

Re: Chances of no recession in 2020

Zero is the chance of no recession in 2020. The NBER Business Cycle Dating Committee, the official arbiter of recessions, today called February as the beginning of the 2020 recession. From today's WSJ - The U.S. economy entered a recession in February, the group that dates business cycles said Mond...
by bobcat2
Sat Jun 06, 2020 9:15 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 5659
Views: 1369058

Re: What Movie Have You Recently Watched?

Two weeks ago on DVD I watched Medium Cool , and it’s still as white hot as when I saw it over 50 years ago. In the intervening two weeks it is as if we are reliving Medium Cool . Haskell Wexler was a brilliant cinematographer and even today the film looks great – like a film shot this year about th...
by bobcat2
Mon May 25, 2020 10:30 am
Forum: Investing - Theory, News & General
Topic: Will the US become like Japan?
Replies: 68
Views: 5367

Re: Will the US become like Japan?

Economically the US already looks a lot like Japan. US annual real GDP growth for the first 20.25 years of the 21st century (4th quarter 1999 thru 1st quarter 2020) is only 1.9%. US population grew at an annual rate of 0.8% from 1999 thru 2019. So that per capita US GDP growth has only been 1.1% sin...
by bobcat2
Tue May 19, 2020 10:50 am
Forum: Investing - Theory, News & General
Topic: Social Security is an asset....yet again
Replies: 129
Views: 5853

Re: Social Security is an asset....yet again

Do we control our SS or SPIA payments? Of course we do. For example, when we buy a lifetime annuity (SPIA or deferred) we control how much monthly income we will receive. The fact that it's a one time decision doesn't mean we don't control it. The fact that it's a one time decision is why many peop...
by bobcat2
Tue May 19, 2020 8:26 am
Forum: Investing - Theory, News & General
Topic: Social Security is an asset....yet again
Replies: 129
Views: 5853

Re: Social Security is an asset....yet again

personally i am assuming an 88% payout- i.e. instead of a 24% haircut i am assuming half of that or a 12% haircut. It depends on your way of thinking. Under current law, and assuming reality comes in as per projections, the payout will be 76% starting in 2034. It could be better, but it also could ...
by bobcat2
Mon May 18, 2020 6:01 pm
Forum: Investing - Theory, News & General
Topic: Social Security is an asset....yet again
Replies: 129
Views: 5853

Re: Social Security is an asset....yet again

Suddenly, everyone is now a millionaire. No. Many Americans approaching retirement have been millionaires; they just didn't know it. :wink: Here are the list of assets in order of descending magnitude for most Americans nearing retirement. 1) Social Security benefits 2) Medicare benefits (often a c...
by bobcat2
Mon May 18, 2020 3:56 pm
Forum: Investing - Theory, News & General
Topic: Social Security is an asset....yet again
Replies: 129
Views: 5853

Re: Social Security is an asset....yet again

Of course Social Security is an asset, but I'm tired of restating the obvious for the Xth time. So instead I will quote from Mike Piper's blog where he answers this question for the Xth time. Here Piper answers an email from someone who got into a heated argument about this at a local Bogleheads mee...
by bobcat2
Sun May 10, 2020 11:36 am
Forum: Investing - Theory, News & General
Topic: The Goal based Asset Allocation Ratio (non-age based)
Replies: 35
Views: 2242

Re: The Goal based Asset Allocation Ratio (non-age based)

The goal, whether explicitly or implicitly stated, of any age-based or goal-based glide path rule is not to maximize wealth at retirement. If that were the goal, an accumulation allocation of 100% stocks would likely be the recommendation. Instead, the goal of a glide path is to control the probabi...
by bobcat2
Sun May 10, 2020 10:34 am
Forum: Investing - Theory, News & General
Topic: The Goal based Asset Allocation Ratio (non-age based)
Replies: 35
Views: 2242

Re: The Goal based Asset Allocation Ratio (non-age based)

Unless someone just pulled the target number out of thin air, aren't they already considering target income? For example, they estimate annual spending at $50k/yr, assume a 4% SWR, and get $1.25MM for a target. Most people here use something like 3-3.5% SWR for estimating, and I believe ERN's calcu...
by bobcat2
Sat May 09, 2020 5:11 pm
Forum: Investing - Theory, News & General
Topic: The Goal based Asset Allocation Ratio (non-age based)
Replies: 35
Views: 2242

Re: The Goal based Asset Allocation Ratio (non-age based)

A fundamental problem with the analysis in this thread is the OP and others have picked the wrong goal. The goal in this analysis is a wealth target at retirement. But what is required for retirement is reliable income throughout retirement. So what we have here is a solution for the wrong goal - we...
by bobcat2
Mon Apr 20, 2020 2:13 pm
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 15088

Re: Deflation is everywhere. Get used to it.

Somewhat surprisingly Japanification is not inconsistent with low unemployment rates. Here are the annual unemployment rates in Japan from 2013 thru 2018. Unemployment rate in Japan 2013 4.0% 2014 3.6% 2015 3.4% 2016 3.1% 2017 2.8% 2018 2.4% Link to source data - https://www.macrotrends.net/countrie...
by bobcat2
Mon Apr 20, 2020 1:50 pm
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 15088

Re: Deflation is everywhere. Get used to it.

Japan has had deflation for most of the last 30 years. Japanification describes an economy with low inflation, low real interest rates, and slow to moderate growth. Japan has been like that for about 30 years. We have been like that for at least ten years. Contrary to popular opinion Japan has not ...
by bobcat2
Sat Apr 18, 2020 6:36 pm
Forum: Investing - Theory, News & General
Topic: Negative interest rates and Present Value
Replies: 19
Views: 990

Re: Negative interest rates and Present Value

From Investopedia - The time value of money (TVM) is the concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that provided money can earn interest , any amount of money is worth more the sooner...
by bobcat2
Sat Apr 18, 2020 3:49 pm
Forum: Investing - Theory, News & General
Topic: Negative interest rates and Present Value
Replies: 19
Views: 990

Re: Negative interest rates and Present Value

In the same way that people sometimes speak of positive news for equities being discounted in despite an increase in prices, I think it is reasonable to continue to use terms like discount rate or discounted back to a PV. Discounting back to a present value is the inverse operation to compounding o...
by bobcat2
Sat Apr 18, 2020 3:45 pm
Forum: Investing - Theory, News & General
Topic: Negative interest rates and Present Value
Replies: 19
Views: 990

Re: Negative interest rates and Present Value

Are real interest rates negative? What are the numbers being used for inflation? When I use the CPI calculator looking at the difference between Feb 2020 and March 2020, it's been deflationary... and I suspect when the April numbers are out it will be the same, potentially even beyond that. Yes - r...
by bobcat2
Sat Apr 18, 2020 3:33 pm
Forum: Investing - Theory, News & General
Topic: Negative interest rates and Present Value
Replies: 19
Views: 990

Re: Negative interest rates and Present Value

scout1 wrote:
Sat Apr 18, 2020 3:28 pm
You should still use the negative interest rate. The math doesn’t change.
Of course the math doesn't change, but now the PV of a FV is bigger, not smaller, than the FV. What's the sense in calling such a PV discounted?

BobK
by bobcat2
Sat Apr 18, 2020 3:23 pm
Forum: Investing - Theory, News & General
Topic: Negative interest rates and Present Value
Replies: 19
Views: 990

Negative interest rates and Present Value

Real interest rates are currently negative. So I ask the following question only half facetiously. When calculating the present value (PV) of a single future value (FV) or a stream of FVs, when the appropriate interest rate to be used in the calculation is negative, is that PV discounted or somethin...
by bobcat2
Tue Apr 14, 2020 4:18 pm
Forum: Investing - Theory, News & General
Topic: BOOK: Fully Grown, Why a Stagnant Economy is a Sign of Success
Replies: 55
Views: 3458

Re: BOOK: Fully Grown, Why a Stagnant Economy is a Sign of Success

This thread starts with the following statement. Every now and then a book comes along that challenges the way we think about economic growth ( much like Robert Gordon's, The Rise and Fall of American Growth [/i]). Here is the link to the thread about Robert Gordon's book referenced above - https://...
by bobcat2
Sat Apr 11, 2020 2:56 pm
Forum: Investing - Theory, News & General
Topic: Grok's LMP-5: Retiree Portfolio ala David Swensen
Replies: 64
Views: 3894

Re: Grok's LMP-5: Retiree Portfolio ala David Swensen

What should the new retiree do in this world of low yields? It's hard to believe the equity risk premium of stocks over bonds will not be in the range of 2% to 4.5%. So we have bonds with negative yields and stocks returning 1% to 4%. What to do? Besides delaying Social Security benefits, try to go...
by bobcat2
Fri Apr 10, 2020 1:56 pm
Forum: Investing - Theory, News & General
Topic: Investor says Stock Market Gains will only be 2% a year next 20 years
Replies: 110
Views: 10098

Re: Investor says Stock Market Gains will only be 2% a year next 20 years

Anyone else think this is true? Man, there goes my retirement and pension lump sum I received. Is China/Emerging Markets a better place to be the next 20 years? Here's data over the last twenty years from (4/3/2000) thru (4/3/2020) annual real return with dividends reinvested for the Wilshire 5000....
by bobcat2
Tue Apr 07, 2020 11:51 pm
Forum: Personal Finance (Not Investing)
Topic: What have you learned from this situation that you will take action on?
Replies: 158
Views: 14831

Re: What have you learned from this situation that you will take action on?

This situation has reinforced my opinion that The Fifth Risk by Michael Lewis is one of the most important works of non-fiction written in the last ten years. The fifth risk may seem relatively benign but it is extremely dangerous and I intend to do my level best to minimize its effects going forwar...
by bobcat2
Sun Apr 05, 2020 10:01 am
Forum: Investing - Theory, News & General
Topic: Was 1970s inflation a one-time thing?
Replies: 57
Views: 4178

Re: Was 1970s inflation a one-time thing?

... what happened to inflation during the pandemic of 1918-19? I.e. what was inflation for those 3 years to 1920? This will surely be the most interesting comparison to today? Annual CPI Inflation (Dec/Dec) 1915 2.0% 1916 12.6% 1917 18.1% 1918 20.4% 1919 14.5% 1920 2.6% 1921 -10.8% There was inflat...
by bobcat2
Sat Apr 04, 2020 11:09 pm
Forum: Investing - Theory, News & General
Topic: Was 1970s inflation a one-time thing?
Replies: 57
Views: 4178

Re: Was 1970s inflation a one-time thing?

I'm wondering if the 1970s era inflation was a one-time event ... Annual inflation as measured by the CPI 1970-79 7.4% 1910-19 7.3% So there were two decades of high inflation of the seven decades beginning in 1910 and ending in 1979. The decade of the 70s was definitely not a one time event during...
by bobcat2
Sat Apr 04, 2020 4:51 pm
Forum: Investing - Theory, News & General
Topic: Was 1970s inflation a one-time thing?
Replies: 57
Views: 4178

Re: Was 1970s inflation a one-time thing?

The U.S. consumer price index dates from 1914. The reason the CPI was started in the year 1914 is that by 1916 the US government was worried by the extremely high inflation rates that they knew existed, but couldn't measure accurately, in the major ship building metro areas along the east coast, as...
by bobcat2
Sat Apr 04, 2020 4:33 pm
Forum: Investing - Theory, News & General
Topic: Was 1970s inflation a one-time thing?
Replies: 57
Views: 4178

Re: Was 1970s inflation a one-time thing?

I'm wondering if the 1970s era inflation was a one-time event ... Annual inflation as measured by the CPI 1970-79 7.4% 1910-19 7.3% So there were two decades of high inflation of the seven decades beginning in 1910 and ending in 1979. The decade of the 70s was definitely not a one time event during...
by bobcat2
Fri Apr 03, 2020 8:10 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: Will negative yields lead to increased risk-taking?
Replies: 23
Views: 1549

Re: Swedroe: Will negative yields lead to increased risk-taking?

I'd be interested to hear what the ERP specifically was from 1970-1980 as that might be one anomalous period, although it doesn't seem like on its own it could cause average ERP to decline so much 1970-present, so calculation differences probably drive it. The ERP for stocks over bonds from 1970-79...
by bobcat2
Fri Apr 03, 2020 8:02 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: Will negative yields lead to increased risk-taking?
Replies: 23
Views: 1549

Re: Swedroe: Will negative yields lead to increased risk-taking?

Stock valuations always move with bond yields, although it may take a long time for this to happen. That's why the implied equity risk premium -- which is relative to bonds -- almost always hovers around 4-6% historically , except during bubbles such as US 1999 or Japan 1989. That is simply not tru...
by bobcat2
Fri Apr 03, 2020 7:42 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: Will negative yields lead to increased risk-taking?
Replies: 23
Views: 1549

Re: Swedroe: Will negative yields lead to increased risk-taking?

Stock valuations always move with bond yields, although it may take a long time for this to happen. That's why the implied equity risk premium -- which is relative to bonds -- almost always hovers around 4-6% historically , except during bubbles such as US 1999 or Japan 1989. That is simply not tru...
by bobcat2
Fri Apr 03, 2020 9:54 am
Forum: Investing - Theory, News & General
Topic: Looking for book on Risk
Replies: 33
Views: 1491

Re: Looking for book on Risk

An Economist Walks into a Brothel: And Other Unexpected Places to Understand Risk by Allison Schrager I've read numerous books on financial risk and IMO this is the best introductory book on financial risk. Schrager interviews people who work in very risky professions from sex workers to profession...
by bobcat2
Tue Mar 24, 2020 9:11 am
Forum: Investing - Theory, News & General
Topic: What is the point of stocks?
Replies: 101
Views: 6680

Re: What is the point of stocks?

[ So I typed 'about 6%' and you said I was incorrect, did a lot of math and came up with ... 6.6%, minus a bit. I'd say I was in the ballpark. :) Anyway, I was just pointing out that the last 20 years stocks > 1%/year CDs, real or nominal. Here are the values of the Wilshire 5000 Total Stock Index ...
by bobcat2
Mon Mar 23, 2020 10:06 pm
Forum: Investing - Theory, News & General
Topic: What is the point of stocks?
Replies: 101
Views: 6680

Re: What is the point of stocks?

Just quick-checked and it looks like US stocks have had annualized returns of around 6%/year over the past 20 years. The point of stocks is to own shares in income-producing companies, and build long-term wealth. A diversified portfolio of stocks/bonds has delivered on that for a long time. If you'...
by bobcat2
Mon Mar 23, 2020 9:22 am
Forum: Personal Investments
Topic: For those timing the market right now, what are your criteria for getting back in?
Replies: 30
Views: 2370

Re: For those timing the market right now, what are your criteria for getting back in?

Asset Allocation Changes On the Way Up from the bottom Up 15% from the trough (then increase by following percentages depending on VIX value) VIX> 50 nothing 40 >VIX< 50 15% 30 >VIX< 40 20% 20 >VIX< 30 30% VIX< 20 50% Up 25% VIX> 50 nothing 40 >VIX< 50 20% 30 >VIX< 40 30% 20 >VIX< 30 40% VIX< 20 all...
by bobcat2
Sun Mar 22, 2020 10:56 pm
Forum: Investing - Theory, News & General
Topic: People who are selling - please post in this thread around the time of your sale (or when you are contemplating selling)
Replies: 17
Views: 1926

Re: People who are selling - please post in this thread around the time of your sale (or when you are contemplating sell

Hi annu, I started seriously thinking about such a plan to de-risk my portfolio when a bear market occurs a few of years after the great recession. At that time I wondered whether a plan like this was too – out there. I didn’t see anything like it anywhere. Then in December, 2014, I read the short a...
by bobcat2
Sun Mar 22, 2020 4:05 pm
Forum: Investing - Theory, News & General
Topic: People who are selling - please post in this thread around the time of your sale (or when you are contemplating selling)
Replies: 17
Views: 1926

Re: People who are selling - please post in this thread around the time of your sale (or when you are contemplating sell

After sitting like a dumb duck or a deer in the headlights, pick your metaphor, during the market crashes of 2000-02 and 2007-09, I decided I needed a plan to partially mitigate large market losses during the next market meltdown. This was done for both financial and psychological reasons in my case...
by bobcat2
Thu Mar 19, 2020 2:54 pm
Forum: Investing - Theory, News & General
Topic: 2020 COVID Crash Lessons
Replies: 157
Views: 13206

Re: Sage forum people what are the right lessons to draw from this crash?

You need to realize that there will be times when the stock market will drop significantly, at least 30% and possibly much more than 30%, and that drop could occur quickly. The recovery from the drop could be quick or very slow over many years. Before the drop you need a plan on what you are going t...
by bobcat2
Mon Mar 16, 2020 10:45 am
Forum: Investing - Theory, News & General
Topic: March "Bogleheads on Investing" podcast with guest Dr. Jim Dahle
Replies: 44
Views: 3925

Re: March "Bogleheads on Investing" podcast with guest Dr. Jim Dahle

Many of us are going to get it within the next couple of years. I'd guess 1/3. Some of us will die from it, probably around 1%, but heavily skewed toward the elderly and sick. Do I understand you correctly on this. If 1/3 of Americans are going to get this in the next two years that is about 110 mi...
by bobcat2
Sat Mar 14, 2020 9:59 pm
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Still the Right Strategy
Replies: 82
Views: 4356

Re: Lifecycle Investing - Still the Right Strategy

Quoting bobcat2: "Ayres and Nalebuff have added nothing to life-cycle investing except for their emphasis on leveraged investing." For what it's worth, I apologize for the shorthand of referring to the 2008 paper as "lifecycle" (as we've previously discussed it on this forum), which is normally a t...
by bobcat2
Sat Mar 14, 2020 9:04 pm
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Still the Right Strategy
Replies: 82
Views: 4356

Re: Lifecycle Investing - Still the Right Strategy

Ayres and Nalebuff have added nothing to life-cycle investing except for their emphasis on leveraged investing. For at least the last 40 years financial economists have approached personal investing from the life-cycle investing POV. Most financial advisors and investment enthusiasts approach person...
by bobcat2
Sat Mar 14, 2020 3:49 pm
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Still the Right Strategy
Replies: 82
Views: 4356

Re: Lifecycle Investing - Still the Right Strategy

Hi vineviz, The conventional advice to hold no more than about 90% of your total financial assets flows from a young investor having access to some safe liquid funds in case they are needed for a significant contingency such as involuntary unemployment or unanticipated out of pocket health expenditu...