Search found 5153 matches

by bobcat2
Mon Jul 16, 2018 9:51 pm
Forum: Investing - Theory, News & General
Topic: Steve Dubner interviews Richard Thaler
Replies: 3
Views: 666

Steve Dubner interviews Richard Thaler

This interview of Nobel prize winning behavioral economist Richard Thaler, titled, People Aren’t Dumb. The World Is Hard, is both insightful and funny. Enjoy. :D

Link - http://freakonomics.com/podcast/richard-thaler/

BobK :wink:
by bobcat2
Sat Jul 14, 2018 11:25 am
Forum: Investing - Theory, News & General
Topic: Implementing Life-Cycle Financial Planning
Replies: 5
Views: 647

Implementing Life-Cycle Financial Planning

Joe Tomlinson interviews financial planner Rick Miller about how he implements life-cycle economics in his financial planning practice. Lots of advice on several topics including risk assessment, projecting investment returns, annual spending adjustments, life insurance, disability insurance, life a...
by bobcat2
Fri Jul 13, 2018 9:43 pm
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

It simply shifts the risk profile. If the bear market recovers in 5 years or less you are better off using buckets, but in the really bad case of a bear market lasting 9 years or more, the bucket approach makes a very bad situation worse. If you want less risk, you have to do some form of liability...
by bobcat2
Thu Jul 12, 2018 10:52 am
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

Bobcat2.... I have the impression that you are a real skeptic of the bucket approach... Got that right :!: :D Links to articles about the bucket approach. Can Buckets Bail-Out a Poor Sequence of Investment Returns? https://web.archive.org/web/20150320005214/http://www.ifid.ca:80/pdf_newsletters/PFA...
by bobcat2
Thu Jul 12, 2018 8:29 am
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

In 2010 I had $181K in stocks and $119k in bonds left in the scenario. So $300k after ten years. Had increased my withdrawals by 3% every year. So with at least 50 percent in stocks, what would do better than that? In real terms you are left with about $223k, not $300k. In other words in ten years ...
by bobcat2
Wed Jul 11, 2018 9:36 pm
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

Take an unfortunate soul who retired in 2000 with a $500k portfolio using a 2-bucket strategy ($350k in stocks, $150k bonds). Use the Wilshire 5000 for the stock index return, and since I'm a Fed, I'll use the average of the G Fund (last ten years 4.27%) as my bond fund. Withdrawal of 4% with infla...
by bobcat2
Wed Jul 11, 2018 1:23 pm
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

Two investors have the same asset allocation. The one who has a bucket strategy is mitigating the risk of a ST bear market by amplifying the risk of a LT bear market relative to the other investor using a standard portfolio strategy.

BobK
by bobcat2
Wed Jul 11, 2018 1:16 pm
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

The return of the S&P 500 with dividends reinvested for the time period December 1999 through December 2007 was 17.666% then things dropped off the cliff ... . The real return of the Wilshire 5000 with dividends reinvested from December 1999 to December 2007 was -2.3%, a negative return not a posit...
by bobcat2
Wed Jul 11, 2018 11:27 am
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

The point is that if stocks have a bad period of 10 years or more the buckets approach is a terrible strategy. If stocks have a bad period of 5 years or less, then the bucket approach is better. Between 5-10 years doesn't make much difference. But the worst situation is an equity market decline that...
by bobcat2
Wed Jul 11, 2018 10:56 am
Forum: Investing - Theory, News & General
Topic: Bucket Portfolio article by Christine Benz
Replies: 85
Views: 6320

Re: Bucket Portfolio article by Christine Benz

The logic is that 1-2 years of cash from your portfolio allows you to sleep well and hopefully not sell in a panic. Stocks are volatile, but will typically grow if given enough time. Such as 10 years. You are simply trading off one set of risks for another. If stocks don't recover within 10 years y...
by bobcat2
Mon Jul 09, 2018 1:37 pm
Forum: Investing - Theory, News & General
Topic: Great investment books that are less well known?
Replies: 15
Views: 1307

Re: Great investment books that are less well known?

Investors and Markets by William Sharpe This book's intended audience is most likely finance MBA's who want a fairly simple introduction to PhD level finance. The book takes Arrow's more general state-preference approach to investing and treats Markowitz's mean-variance (MPT) approach as a special ...
by bobcat2
Sun Jul 08, 2018 9:59 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

I'd wager that had you become disabled some years ago, you would prefer the present system to one of retirement bonds. These retirement bonds are not meant to be in lieu of Social Security, but in addition to Social Security. They would simply be a new type of federal government bond - much like wh...
by bobcat2
Sat Jul 07, 2018 12:26 pm
Forum: Personal Finance (Not Investing)
Topic: Ratings of free online retirement income calculators
Replies: 8
Views: 974

Re: Ratings of free online retirement income calculators

Am I missing something, or is there no detail on how the individual scores were derived? E.g., what specifically leads to a score of 1 for accuracy for Vanguard and Fidelity? Here are the reviews in more depth - https://www.thebalance.com/retirement-calculator-reviews-4061796 And here is the report...
by bobcat2
Sat Jul 07, 2018 9:34 am
Forum: Personal Finance (Not Investing)
Topic: Ratings of free online retirement income calculators
Replies: 8
Views: 974

Ratings of free online retirement income calculators

Financial planner Dana Anspach rates nine free retirement income calculators. The two best rated free calculators were ESPlanner Basic and New Retirement. ESPlanner Basic scored a perfect 9 and New Retirement came close with 8 out of 9. The Vanguard calculator scored poorly coming in next to last ah...
by bobcat2
Fri Jul 06, 2018 3:05 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 3604
Views: 1028934

Re: What Movie Have You Recently Watched?

I saw 2001: A Space Odyssey last night at the AFI Silver Theater ... Yes, a great and unique movie. There are a couple of scenes that I especially appreciated. These each deserve an award of their own. The whole opening with the apes, topped by the bone-to-spaceship transition . That was cinematic ...
by bobcat2
Fri Jul 06, 2018 2:13 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 3604
Views: 1028934

Re: What Movie Have You Recently Watched?

I saw 2001: A Space Odyssey last night at the AFI Silver Theater for my 6th time seeing it in a theater. I'm pretty sure it was the 6th time. :confused A woman standing next to my in line asked me how many times I had seen it and after some reflection I came up with the previous 5 times. I've also s...
by bobcat2
Fri Jul 06, 2018 8:57 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Arun Muralidhar will be making a presentation at DC Bogleheads on Sunday July 29 on these BFFS retirement bonds and the MMM flex model of retirement planning. See this link for more information about the meeting. Link - https://www.bogleheads.org/forum/viewtopic.php?f=9&t=139752&p=4004533&hilit=arun...
by bobcat2
Wed Jul 04, 2018 10:31 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 139
Views: 38328

Re: Master thread for Washington DC Area Bogleheads

Our next meeting will be Sunday July 29 from 2:30-5:00 at the Arlington central library in Ballston. Note that we will meet in the first floor auditorium - not in the 2nd floor meeting room where we usually meet. Our guest speaker will be Arun Muralidhar. Arun’s presentation will cover his new book,...
by bobcat2
Mon Jul 02, 2018 1:52 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Robert Merton writing about SeLFIES retirement bonds in IPE (Investments & Pensions Europe). These innovations ensure even the most financially illiterate individual can be self-reliant with respect to retirement planning (without requiring a forecast of expected returns, optimisers/retirement calcu...
by bobcat2
Sun Jul 01, 2018 6:22 pm
Forum: Investing - Theory, News & General
Topic: Robert Merton on NewRetirement Podcast
Replies: 44
Views: 4558

Re: Robert Merton on NewRetirement Podcast

I don't understand why Merton makes so little of a $500,000 nest egg. Put that amount in TIPS at age 60. If you live to be 100, that's at least $12,500/yr in real dollars. Added to Soc Security for someone who worked for 35-40 years, that's a significant retirement income. Hardly posh, but there ar...
by bobcat2
Sat Jun 30, 2018 9:40 pm
Forum: Investing - Theory, News & General
Topic: Robert Merton on NewRetirement Podcast
Replies: 44
Views: 4558

Re: Robert Merton on NewRetirement Podcast

A bit of history. ... Another bit of history. This time Robert Shiller writing in the Washington Post during the height of the Great Recession in late September, 2008. Ideas matter . Maybe next time, we will listen more closely to financial theorists who think in abstract, general terms. Consider t...
by bobcat2
Sat Jun 30, 2018 8:10 am
Forum: Investing - Theory, News & General
Topic: Robert Merton on NewRetirement Podcast
Replies: 44
Views: 4558

Re: Robert Merton on NewRetirement Podcast

The part of the interview that stuck out to me was near the end when Chen attempted to summarize Merton's position on prudent retirement planning. Chen then asked Merton if he had it right. Merton responded that the summary was mostly right, but Chen's including Target Date Funds as part of sound re...
by bobcat2
Wed Jun 27, 2018 9:11 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

this quote from the article is interesting What's more, TIPS only give you protection against inflation. "It doesn't give you protection against standard of living changes," he said. "And so that's where we were arguing that if people are trying to create a particular cash flow profile, why have th...
by bobcat2
Wed Jun 27, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Robert Powell writing about retirement bonds for financial security in TheStreet . Arun Muralidhar is on a mission to solve the retirement crisis. In his just-published book, 50 States of Gray , Muralidhar discusses what Nobel prize winner and MIT professor Robert Merton describes as "innovative pro...
by bobcat2
Sun Jun 24, 2018 9:45 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Arun Muralidhar on goals-based investing and the use of financial instruments, such as retirement bonds, that match cash flows. The growing trend of goals-based investing recognizes that investors hold assets to satisfy key goals — planning for retirement (individual or institutional), saving for a ...
by bobcat2
Sun Jun 10, 2018 9:40 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

I'd be more enthusiastic if this were a means to replace (or at least supplement) the current 401K/IRA system, which strikes me as too Wall Street-dominated, by a privately managed annuity program, which would, hopefully, be better suited to the needs of future retirees. However, to the extent this...
by bobcat2
Sat Jun 09, 2018 4:13 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

An interesting article in the Financial Times about "retirement bonds". An odd thing about this article is in discussing the bonds it fails to mention Arun Muralidhar, the person who originated the idea of these bonds and has since been championing the idea along with Merton. From the article - Mr M...
by bobcat2
Tue Jun 05, 2018 12:10 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 139
Views: 38328

Re: Master thread for Washington DC Area Bogleheads

As of today we have 300 registered DC Bogleheads :!: :D Our next meeting will be Sunday, July 29, from 2:30-5:00 at the Arlington central library in Ballston. Note that we will meet in the first floor auditorium - not in the 2nd floor meeting room where we usually meet. We will have a special guest ...
by bobcat2
Mon Jun 04, 2018 6:07 pm
Forum: Investing - Theory, News & General
Topic: The Power of Working Longer
Replies: 185
Views: 18738

Re: NYT Story on Importance of Working Just a Little Longer

This doesn’t mean you shouldn’t save more, but rather working even slightly longer has a very powerful effect on retirement security. Thank you for your helpful post Bobcat :happy Your blue conclusion is very important, but seems to me the "working longer" has to be hopeful thinking not set plannin...
by bobcat2
Mon Jun 04, 2018 5:38 pm
Forum: Investing - Theory, News & General
Topic: The Power of Working Longer
Replies: 185
Views: 18738

Re: NYT Story on Importance of Working Just a Little Longer

Additionally, you have to subtract the $27,000/2 = $13,500 that the earlybirds already collected from the $17,736.87, leaving a PV of NET added SS benefit of only $4,236.87. Any significant gain would have to come, as some posters above alluded to, from the wages during those 6 months making a mate...
by bobcat2
Mon Jun 04, 2018 11:51 am
Forum: Investing - Theory, News & General
Topic: The Power of Working Longer
Replies: 185
Views: 18738

Re: NYT Story on Importance of Working Just a Little Longer

Let’s take a couple whose annual income is close to the national median of roughly $60,000. On average they have saved 10% of their income or $6,000/year (in 2018 dollars). They have been saving since their early 20s and have earned an average real return of 4%. At age 65 their portfolio is worth $5...
by bobcat2
Sat Jun 02, 2018 5:43 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 139
Views: 38328

Re: Master thread for Washington DC Area Bogleheads

Our next meeting is tomorrow, June 3, from 2:30-4:30 at the Silver Spring library. If you have topics you would like to discuss, post them here. See preceding post for more info.

BobK
by bobcat2
Thu May 31, 2018 1:37 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 139
Views: 38328

Re: Master thread for Washington DC Area Bogleheads

Our next meeting is this coming Sunday, June 3, from 2:30-4:30 at the Silver Spring library. Here are some suggested topics for discussion at the meeting. Can some actively managed stock mutual funds be expected to beat the indexes? If they exist, what are the properties of such funds? What should a...
by bobcat2
Mon May 28, 2018 10:54 am
Forum: Investing - Theory, News & General
Topic: Newton MA library program - Zvi Bodie on Managing Your Portfolio
Replies: 9
Views: 1680

Re: Newton MA library program - Zvi Bodie on Managing Your Portfolio

If any of the panelists use slides in their presentation, a Boglehead should ask if he could email the slides so that the slide deck can be posted at Bogleheads. It's been my experience that presenters are usually more than happy to share their slides. :) BobK We don't post anything in the forum or...
by bobcat2
Mon May 28, 2018 9:15 am
Forum: Investing - Theory, News & General
Topic: Newton MA library program - Zvi Bodie on Managing Your Portfolio
Replies: 9
Views: 1680

Re: Newton MA library program - Zvi Bodie on Managing Your Portfolio

Bodie's presentation tomorrow at this event deals with reducing risk to achieve your financial goals. It will probably be similar in content to an interview he gave with Shaun Wurzbach of S&P Dow Jones earlier this month. Link to interview - https://assettvus.getmediamanager.com/video/5af49fd28a7156...
by bobcat2
Sat May 26, 2018 11:29 am
Forum: Investing - Theory, News & General
Topic: Three fund portfolio - Which bond fund?
Replies: 20
Views: 2781

Re: Three fund portfolio - Which bond fund?

Once an investor is within about 20 years of their targeted retirement year, the three fund portfolio become substantially different. At that point the nominal bond fund in the portfolio following a LDI strategy is replaced with a long-term Treasury Inflation Protected (TIPS) bond fund and a short-...
by bobcat2
Thu May 24, 2018 7:37 pm
Forum: Investing - Theory, News & General
Topic: Newton MA library program - Zvi Bodie on Managing Your Portfolio
Replies: 9
Views: 1680

Re: Newton MA library program - Zvi Bodie on Managing Your Portfolio

If any Bogleheads go, perhaps they could post a summary here. In addition, if any of the panelists use slides in their presentation, a Boglehead should ask if he could email the slides so that the slide deck can be posted at Bogleheads. It's been my experience that presenters are usually more than ...
by bobcat2
Wed May 23, 2018 8:12 am
Forum: Investing - Theory, News & General
Topic: Newton MA library program - Zvi Bodie on Managing Your Portfolio
Replies: 9
Views: 1680

Re: Newton MA library program - Zvi Bodie on Managing Your Portfolio

One of the panelists on the program is Aaron Stevens, who is a Senior Lecturer in the Department of Finance at Boston University. Aaron is the lead author of the textbook, Life-Cycle Economics and Personal Finance , and has taught a course in personal finance at Boston University for several years. ...
by bobcat2
Tue May 22, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: Newton MA library program - Zvi Bodie on Managing Your Portfolio
Replies: 9
Views: 1680

Newton MA library program - Zvi Bodie on Managing Your Portfolio

Something to check out if you are a Boglehead in the Boston area. Free program at Newton MA Free Library on Tuesday May 29 @ 6:30 PM. YOU AND YOUR FINANCIAL FUTURE: DIVERSIFICATION AND MANAGING YOUR PORTFOLIO Panelists discuss a variety of money-related topics. In this session: David Griswold , pres...
by bobcat2
Fri May 18, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

With these real bonds people can plan at least a portion of their retirement finances without having to make complicated calculations, such as forecasting portfolio expected returns, or resorting to using a retirement calculator, or hiring a financial advisor. Here's an example. If an investor wants...
by bobcat2
Wed May 16, 2018 10:14 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 7050

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Here's Zvi Bodie earlier this month talking about retirement planning. While he doesn't explicitly mention the separation property, it is definitely the framework he is using in planning for retirement. For the surrogate for the risk-free asset he discusses duration matching with ST & LT TIPS funds...
by bobcat2
Wed May 16, 2018 3:04 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 7050

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Here's Zvi Bodie earlier this month talking about retirement planning. While he doesn't explicitly mention the separation property, it is definitely the framework he is using in planning for retirement. For the surrogate for the risk-free asset he discusses duration matching with ST & LT TIPS funds....
by bobcat2
Sun May 13, 2018 8:30 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Hi willthrill81, I'm assuming you are partnered, and probably married, so why aren't you including your partner's SS benefit in your retirement calculations? Kitces calculations are for people retiring presently. In 2045 or 2050 Social Security benefits overall will be higher. For example, the prese...
by bobcat2
Sat May 12, 2018 10:34 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Being provided by the government, these would be default-free. Annuities are not default-free and we often see fear of insurance company default as a factor for why people are wary of them. Merton & Muralidhar expect these to be liquid, easy traded, and low-cost . All that is different from an annu...
by bobcat2
Sat May 12, 2018 10:24 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

SS & Medicare benefits are very valuable for retirees. Current combined benefits are about $1 million for many couples. By 2050 the value of of SS & Medicare benefits in 2015 dollars will be about $2 million for many couples. To ignore these benefits or value them at about $400,000 is wildly inaccur...
by bobcat2
Sat May 12, 2018 6:26 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Hi willthrill81, $1.8 million is what you are short in lifetime benefits at retirement. So if want to know how much you need at retirement - the answer is an additional $1.8 million if you don't count SS & Medicare. These are discounted costs. The actual costs spread over average life expectancies a...
by bobcat2
Sat May 12, 2018 2:58 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Per my above analysis, ignoring SS adds at most $600k to my needed portfolio at my planned retirement age, probably more like $400k. ... I don't see how you're getting $900k needed to ignore Medicare. Social Security & Medicare Lifetime Benefits & Taxes TABLE 15 Expected Present Value of Lifetime S...
by bobcat2
Sat May 12, 2018 11:16 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

Hi willthrill81, So, just to be clear, you add about $900,000 to what you need for retirement compared to what people retiring within the last 10 years have needed for health care. Have I got that right? And you also add about another $1,000,000 for the absence of Social Security income that people ...
by bobcat2
Sat May 12, 2018 10:31 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

As you note, we're probably talking about a maximum 'reasonable' range of $1.8M to $2.4M. The $600k is a chunk of money, but historically that's an average of only a few years of additional growth. Considering the uncertainty surrounding SS benefits according to the SS Administration (they say that...
by bobcat2
Wed May 09, 2018 11:59 am
Forum: Investing - Theory, News & General
Topic: Retirement bonds
Replies: 67
Views: 7754

Re: Retirement bonds

One of the very nice aspects of these bonds is that because of their low price, median income households and households of the working near poor can purchase them at regular two week intervals in their DC retirement savings plans. These same households could not possibly purchase zero coupon TIPS on...