Search found 274 matches

by ignition
Mon Nov 18, 2019 4:33 am
Forum: Personal Finance (Not Investing)
Topic: Asset allocation for 50 year retirement?
Replies: 21
Views: 2440

Re: Asset allocation for 50 year retirement?

I suggest you study 'Sequence of Returns Risk'. The premise is that the riskiest period of retirement is the first 5 years. If disaster doesn't hit in the first 5 years (of course, it usually doesn't) then your portfolio will grow further (and you have 5 fewer years to live) so you are especially b...
by ignition
Sun Oct 27, 2019 3:42 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3607

Re: Stock market index investing - problem of induction?

Those numbers are misleading. The S&P 500 Stocks were worth about the same in 1982 as they had been in 1956. Yes, there were higher values in the middle period, but those gains disappeared. Had you been able to buy a S&P 500 index fund in '68 (which you couldn't) it didn't get back to even until 19...
by ignition
Sat Oct 26, 2019 5:25 am
Forum: Investing - Theory, News & General
Topic: Stock market index investing - problem of induction?
Replies: 41
Views: 3607

Re: Stock market index investing - problem of induction?

Musings on a Friday afternoon as I prepare to make my monthly allocation to SWTSX. If our complete view on the market is based on only our observation of prior performance, why is investing in low cost market index trackers touted as the best way to invest? Why would our complete view of the market...
by ignition
Wed Oct 23, 2019 1:16 pm
Forum: Non-US Investing
Topic: BUY and HOLD individual Stocks vs iShares MSCI ACWI
Replies: 22
Views: 1420

Re: BUY and HOLD individual Stocks vs iShares MSCI ACWI

Don't forget dividend withholding taxes. ETF's domiciled in Ireland usually have better tax treaties at their disposal than individual investors.

For example IWDA has a 0,2% TER but actually slightly outperformed its index over the last years.
by ignition
Sun Oct 13, 2019 3:53 am
Forum: Investing - Theory, News & General
Topic: Vanguard: the case for global equity investing
Replies: 160
Views: 12320

Re: Vanguard: the case for global equity investing

As for the Vanguard paper, I'm looking his reasons. I saw two. 1) That a 60/40 portfolio would have yielded the same performance with lower standard deviation. This is an interesting argument, it's worth looking more closely at, in particular for other time periods as well. Other bogleheads have no...
by ignition
Sat Sep 28, 2019 4:07 am
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5991

Re: Bonds returns are on par with Stocks?

Bond and equity returns were equal in the 1800's. Why? Because there was no inflation. Your nominal return was equal to your real return. This is false (and extremely false at that) and easily disproved by looking at the easily available evidence. In 1879, just to cherry pick one year, inflation wa...
by ignition
Sat Sep 28, 2019 3:37 am
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5991

Re: Bonds returns are on par with Stocks?

Bond and equity returns were equal in the 1800's. Why? Because there was no inflation. Your nominal return was equal to your real return.

In the more inflationary 1900's bonds were owned by stocks as stocks are better suited to hedge against inflation.
by ignition
Fri Sep 27, 2019 5:33 am
Forum: Non-US Investing
Topic: BELGIUM - Renting vs Owning
Replies: 23
Views: 2239

Re: BELGIUM - Renting vs Owning

There is a rule of thumb: if the price to rent ratio is higher than 20, it's better to rent.

So in this case, the price to rent ratio is 33 so renting would be better by a pretty wide margin.
by ignition
Tue Sep 10, 2019 9:59 am
Forum: Investing - Theory, News & General
Topic: Index Funds Bubble? [Michael Burry article]
Replies: 242
Views: 28162

Re: Index Funds Bubble? [Michael Burry article]

I still don't understand: 1) Does this "index fund bubble" apply to bond indices like BND as well? There is no index fund bubble. 2) So now that indexing has become "overcrowded" and mainstream, what alternatives as there? What do we do? It's not overcrowded. Only 15% of the US stock market is inde...
by ignition
Tue Sep 03, 2019 3:29 pm
Forum: Non-US Investing
Topic: Four year review - Way forward or am I doing something wrong?
Replies: 19
Views: 2518

Re: Four year review - Way forward or am I doing something wrong?

Strange, I have also started investing in 2015 in the same ETF as you and I have an 8.5% annual return. How come? Did you put everything in a single shot? I started in 2015 by investing $10,000 (buy price $43.65)and than added the rest in 2016-2017 but at that time price was higher ($54.12). So bas...
by ignition
Mon Sep 02, 2019 3:16 pm
Forum: Non-US Investing
Topic: Four year review - Way forward or am I doing something wrong?
Replies: 19
Views: 2518

Re: Four year review - Way forward or am I doing something wrong?

Strange, I have also started investing in 2015 in the same ETF as you and I have an 8.5% annual return.
by ignition
Sat Aug 31, 2019 10:07 am
Forum: Non-US Investing
Topic: [EU|BE] Please review my investment policy
Replies: 22
Views: 1448

Re: [EU|BE] Please review my investment policy

I agree with others: - It would help to increase your stock allocation in my view as high as possible. If you can tolerate 60/40, I would go for 60/40. High grade euro bonds currently have a negative expected return, even before inflation. For example the Yield To Maturity of IEAG (ishare euro aggre...
by ignition
Tue Aug 20, 2019 12:03 pm
Forum: Non-US Investing
Topic: [EU | Belgium] Specific bond taxation and general bond mechanics questions
Replies: 12
Views: 552

Re: [EU | Belgium] Specific bond taxation and general bond mechanics questions

. But consider the bond tax in exactly this context. I know inflation will float around 2% per annum. And I know nominal bonds with 5-7yr durations will return around 4.4% per annum. Then a 30% tax on 4.4% takes 1.32% away from total return. And inflation subtracts another 2%. Resulting in a 1.08% ...
by ignition
Sun Aug 18, 2019 9:20 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7837

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

Follow-up question: for folks who do promote investing in 100% equities when you're younger, is there a recommended age at which you start to diversify into bonds? 25 years before retirement? 10 years? Or is this also a function of risk tolerance and it varies for everyone? Even in retirement, high...
by ignition
Sat Aug 17, 2019 3:56 pm
Forum: Personal Finance (Not Investing)
Topic: Taking a break in your 50s: Is it the kiss of death?
Replies: 86
Views: 8896

Re: Taking a break in your 50s: Is it the kiss of death?

By the way, I'm surprised that a few on this thread (including the OP) seem to think that 35X is not quite enough to retire in your early 50s. I'm actually also one of those who wouldn't feel safe-enough with that. I would shoot for something like 33X plus a reserve of maybe $1M (but I would take i...
by ignition
Fri Aug 16, 2019 1:38 pm
Forum: Non-US Investing
Topic: Why should I buy anything outside of the US market?
Replies: 23
Views: 2048

Re: Why should I buy anything outside of the US market?

I understand that you want to diversify and not miss other markets. But my question is then, why isn't the Boglehead recommendation even for US investors to buy and hold VT or VTI + VXUS? I understand what we agree with Jack Bogle's strategies, and he seems to be "ignoring" the rest of the world on...
by ignition
Fri Aug 16, 2019 12:57 pm
Forum: Non-US Investing
Topic: Why should I buy anything outside of the US market?
Replies: 23
Views: 2048

Re: Why should I buy anything outside of the US market?

Hey everyone, I've been browsing the forums and it seems very common for non-US investors to hold international portfolios such as VWRL/VWRD/IWDA. Given that these alternatives are more expensive than let's say VUSD/VUSA/CSPX or anything else tracking S&P 500, and the fact that Bogle himself consid...
by ignition
Fri Aug 16, 2019 9:30 am
Forum: Investing - Theory, News & General
Topic: Any retired person have stocks and cash I was thinking about a 70/30
Replies: 61
Views: 4949

Re: Any retired person have stocks and cash I was thinking about a 70/30

A 70/30 allocation would have worked just fine during the great depression withdrawing 3% per year and a globally diversified 70/30 portfolio would have worked for a Japanese investor. The point was not about survivability, but how well the overall portfolio would do. The OP has already won the gam...
by ignition
Fri Aug 16, 2019 8:54 am
Forum: Investing - Theory, News & General
Topic: Any retired person have stocks and cash I was thinking about a 70/30
Replies: 61
Views: 4949

Re: Any retired person have stocks and cash I was thinking about a 70/30

I know the market can be down 5-10 years. If I am frugal I can hold out 10 years. I will need this to cover 75% of the bills. 5-10 years is your "worst case"? IT took over 20 years after great depression. Japan still hasn't recovered after 30 years. As others stated at current rates having cash vs ...
by ignition
Fri Aug 16, 2019 8:46 am
Forum: Non-US Investing
Topic: [EU-Belgium] Optimal portfolio to FIRE?
Replies: 14
Views: 1252

Re: [EU-Belgium] Optimal portfolio to FIRE?

It seems like a lot of funds. Makes it harder to manage. Your "cash" is really a fixed income equivalent. That's fine (the returns are higher) but worth remembering it's in that box. Genuine cash is what you have to 1). fund emergency needs 2). rebalance. Be sure and stay within the 100k EUR insura...
by ignition
Fri Aug 16, 2019 7:44 am
Forum: Investing - Theory, News & General
Topic: Any retired person have stocks and cash I was thinking about a 70/30
Replies: 61
Views: 4949

Re: Any retired person have stocks and cash I was thinking about a 70/30

Indeed, I don't think cash or bonds will make a big difference.

On the other hand, I'm not that spooked by the 70% equity allocation as others seem to be. 70/30 with a 3% withdrawal rate should be fine if you can stay the course.
by ignition
Fri Aug 16, 2019 6:29 am
Forum: Non-US Investing
Topic: [EU-Belgium] Optimal portfolio to FIRE?
Replies: 14
Views: 1252

Re: [EU-Belgium] Optimal portfolio to FIRE?

After giving it some more thought, I think I'm going for: -10% cash: upped the cash a bit. A good savings account should yield more than a bond fund and is taxed more favorably. -5% EUNA - ishares global aggregate bond - eur hedged: not sure why I keep this. Maybe a small diversification benefit if ...
by ignition
Fri Aug 16, 2019 3:38 am
Forum: Non-US Investing
Topic: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?
Replies: 29
Views: 1499

Re: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?

Have you read the paper by Vanguard mentioned in this topic: https://www.bogleheads.org/forum/viewtopic.php?t=258721 I have not read that... until now. This goes a long way to changing my opinion, thank you for sharing. At this point, I'm happy to concede I'm mistaken on the points about returns (i...
by ignition
Thu Aug 15, 2019 4:07 am
Forum: Non-US Investing
Topic: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?
Replies: 29
Views: 1499

Re: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?

2) Practice - Returns. How many global hedged equity funds have worked out for the investor? Especially for EU, I'd wager none With the euro and sterling falling against the dollar it is logical currency hedged funds have underperformed funds that didn't currency hedge. If you look from the point o...
by ignition
Thu Aug 15, 2019 3:40 am
Forum: Investing - Theory, News & General
Topic: Why is market timing bad in this case?
Replies: 52
Views: 3464

Re: Why is market timing bad in this case?

If a recession happens the next 3 years of at least 20%, the market returns less than 10% per year and you have the guts to go all in after a 20% drop from all time highs, it's a great idea. Unfortunately I have no clue whether this will be true.
by ignition
Tue Aug 13, 2019 10:02 am
Forum: Non-US Investing
Topic: My Portfolio / Retirement Plan - Please Review & Comment
Replies: 18
Views: 2043

Re: 80% VWRA / 20% bond index - which bond index to choose?

michoco911 wrote:
Tue Aug 13, 2019 9:30 am
Because they aren't hedged and you'll have currency risk.
Yes but in my case i am not european and not american and my currency is USD so which would be a better option for my case?
Maybe iShares Global Aggregate Bond UCITS ETF USD Hedged (Acc)|AGGU?
by ignition
Tue Aug 13, 2019 9:03 am
Forum: Non-US Investing
Topic: My Portfolio / Retirement Plan - Please Review & Comment
Replies: 18
Views: 2043

Re: 80% VWRA / 20% bond index - which bond index to choose?

michoco911 wrote:
Tue Aug 13, 2019 8:21 am
Any reason why nobody recommended CBU0 (iShares Treasury Bonds7-10Y ETF) Ireland domicile?
Don’t you think US treasury bonds can be a good and safe option?
Would appreciate your comments/advise.
Because they aren't hedged and you'll have currency risk.
by ignition
Tue Aug 13, 2019 8:41 am
Forum: Non-US Investing
Topic: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?
Replies: 29
Views: 1499

Re: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?

If the euro strengthens relative to other currencies, your assets denominated in USD, yen etc. will decrease in value. Yeah, but I don't know if EUR will strengthen or weaken, so....what difference does it make? You say I should hold 50/50 USD and EUR assets? But how to achieve that? Hold bonds in ...
by ignition
Mon Aug 12, 2019 3:06 pm
Forum: Non-US Investing
Topic: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?
Replies: 29
Views: 1499

Re: Can someone explain to me "currency risk" in case of EU investor? Does it apply to VWRA?

EU investor, Lithuania. Planning to in accumulating VWRA fund for equity portion of my portfolio. It is Ireland based. What could be potential issues long term with currency risk? If the euro strengthens relative to other currencies, your assets denominated in USD, yen etc. will decrease in value. ...
by ignition
Sun Aug 11, 2019 12:22 pm
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 204
Views: 12656

Re: Why do dividends still exist?

That's not at all the assumption, it doesn't matter if the company is overvalued or not. The math remains the same. After all, you would be reinvesting your dividend in an overvalued company. Now we're making some progress. Maybe I choose to spend my dividend money some other way. Maybe I'm WB and ...
by ignition
Sun Aug 11, 2019 9:39 am
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 204
Views: 12656

Re: Why do dividends still exist?

You are confusing “worth” (or academic valuation) with market price. In scenario 1 you are assuming market price does not change (it stays at $10 per share). In scenario 2 you are assuming MARKET PRICE INCREASES to $10.5 per share. I'm only assuming the value of the company remains the same after t...
by ignition
Sun Aug 11, 2019 8:05 am
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 204
Views: 12656

Re: Why do dividends still exist?

Outside of tax consequences (which make dividends look even worse), if one has a different opinion of buybacks than he/she does dividends, then the person doesn't really understand one or the other (perhaps both). This isn't to say that either is good or bad. They just have the same impact. No more...
by ignition
Sun Aug 11, 2019 7:33 am
Forum: Investing - Theory, News & General
Topic: Ed Yardeni on market slide
Replies: 19
Views: 3956

Re: Ed Yardeni on market slide

Likewise in from 1982 to 1999, the US economy grew rapidly and consistently and this produced the greatest bull market in history, the opposite or what would be expected if economic growth decreased market returns. I think the increase in valuation of a cape of 7 in 1982 to a cape of 45 in 2000 als...
by ignition
Sun Aug 11, 2019 6:43 am
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 204
Views: 12656

Re: Why do dividends still exist?

Outside of tax consequences (which make dividends look even worse), if one has a different opinion of buybacks than he/she does dividends, then the person doesn't really understand one or the other (perhaps both). This isn't to say that either is good or bad. They just have the same impact. No more...
by ignition
Sun Aug 11, 2019 6:10 am
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 204
Views: 12656

Re: Why do dividends still exist?

If a company does buybacks consistently eventually the company will be private or the shares will become too expensive to buy. Why will the shares become too expensive to buy? Buybacks don't increase the PE of a stock. In what way is a dividend “guaranteed”? Because it actually wound up in your ban...
by ignition
Tue Aug 06, 2019 12:39 pm
Forum: Investing - Theory, News & General
Topic: Ed Yardeni on market slide
Replies: 19
Views: 3956

Re: Ed Yardeni on market slide

Well, the correlation between GDP growth and equity returns is negative apparently so maybe it's good news that economic growth is slowing :P
by ignition
Sun Aug 04, 2019 3:48 am
Forum: Non-US Investing
Topic: So what's the consensus on bond ETFs for EU investor?
Replies: 22
Views: 1746

Re: So what's the consensus on bond ETFs for EU investor?

Questions I'm totally at loss here and not sure if I am not missing anything. What are your thoughts? I don't think you're missing anything: European bonds won't make you any money over the coming years and after inflation you'll probably lose money (unless interest rates go up again). After the re...
by ignition
Thu Aug 01, 2019 2:18 am
Forum: Non-US Investing
Topic: [EU-Belgium] Optimal portfolio to FIRE?
Replies: 14
Views: 1252

Re: [EU-Belgium] Optimal portfolio to FIRE?

I hope that with increasing ETF adoption and competition, TERs in general will come down. As you're brooding about the costs - have you seen this thread about a cheaper alternative to IWDA? Yes, I have seen it. I still have a significant amount of IWDA and don't feel like changing to SWRD because o...
by ignition
Wed Jul 31, 2019 2:26 pm
Forum: Non-US Investing
Topic: [EU-Belgium] Optimal portfolio to FIRE?
Replies: 14
Views: 1252

Re: [EU-Belgium] Optimal portfolio to FIRE?

Hi, For a few years now I've been interested in financial independence and retiring early. Not quite there yet but my current plan is to retire in my 30's and spend about 3% of my portfolio yearly. I live in Belgium (Europe). Even in the context of Europe's Social Security & healthcare systems, I d...
by ignition
Wed Jul 31, 2019 12:44 pm
Forum: Non-US Investing
Topic: [EU-Belgium] Optimal portfolio to FIRE?
Replies: 14
Views: 1252

Re: [EU-Belgium] Optimal portfolio to FIRE?

You have 85% of your portfolio in equities and then worry about currency risk? I don't have numbers at hand, but my impression is that the volatility of equities far outweighs currency volatility. Well, according to the article of Siamond, currency risk can be a problem exacerbating the normal port...
by ignition
Wed Jul 31, 2019 10:07 am
Forum: Non-US Investing
Topic: [EU-Belgium] Optimal portfolio to FIRE?
Replies: 14
Views: 1252

[EU-Belgium] Optimal portfolio to FIRE?

Hi, For a few years now I've been interested in financial independence and retiring early. Not quite there yet but my current plan is to retire in my 30's and spend about 3% of my portfolio yearly. I live in Belgium (Europe). My portfolio will probably look as follows: - 5% cash - 10% EUNA - iShares...
by ignition
Sun May 05, 2019 9:43 am
Forum: Investing - Theory, News & General
Topic: Dollar cost buying into 30+ CAPE markets
Replies: 44
Views: 2821

Re: Dollar cost buying into 30+ CAPE markets

I don't think we're in a bubble yet. CAPE for USA is about 30, maybe 25 after correcting for buybacks, accounting changes etc. I might start worrying when cape is over 50 :P . At the high of the dot com bubble it was about 45.
by ignition
Wed May 01, 2019 5:58 am
Forum: Investing - Theory, News & General
Topic: When do you notice the compounding at work?
Replies: 137
Views: 28863

Re: When do you notice the compounding at work?

Yes, but you have a bigger percentage claim on the output of the company after reinvesting the dividends (unless the company issues more shares). Reinvesting dividends is similar to stock buybacks, only less tax efficient. If the company makes the same profit year after year and issues the same div...
by ignition
Wed May 01, 2019 4:29 am
Forum: Non-US Investing
Topic: I received a one-time payment that needs to last me the rest of my life [EU]
Replies: 53
Views: 9847

Re: I received a one-time payment that needs to last me the rest of my life [EU]

You've been getting a lot of great financial advice in this thread, but I think that's just a small part of the picture. You're only 29, and you only live once. Your settlement doesn't sound like enough money to live comfortably and enjoy all the experiences that you might want to for the next 50 y...
by ignition
Wed May 01, 2019 4:11 am
Forum: Non-US Investing
Topic: I received a one-time payment that needs to last me the rest of my life [EU]
Replies: 53
Views: 9847

Re: I received a one-time payment that needs to last me the rest of my life

My NW to spending ratio seems very high, which makes me wonder: Am I rich enough to not have to take the risk with stocks? No Or am I rich enough where stock volatility does not matter, and I should be 100% stocks? No A half-half approach seems like the worst of both worlds, so I would prefer being...
by ignition
Wed May 01, 2019 3:21 am
Forum: Investing - Theory, News & General
Topic: When do you notice the compounding at work?
Replies: 137
Views: 28863

Re: When do you notice the compounding at work?

Dividends increase your shares, which over time, increase your wealth. Am I wrong? I don't think you're wrong. Anyone who has owned a mutual fund for many years and reinvests dividends believes in compounding. One very small example. A mutual fund I bought with $51,500 (900 shares) in mid-2012 is n...
by ignition
Tue Apr 16, 2019 6:07 am
Forum: Investing - Theory, News & General
Topic: That's enough for me in 2019
Replies: 817
Views: 100929

Re: That's enough for me in 2019

I hear you. My comments about valuation are directed primarily at folks who think that stocks are minimally risky if you have a long enough time frame. That is simply not true. The only time stocks are not risky is when you have enough safe assets to never have to worry about what happens to stocks...
by ignition
Mon Apr 15, 2019 3:19 pm
Forum: Investing - Theory, News & General
Topic: That's enough for me in 2019
Replies: 817
Views: 100929

Re: That's enough for me in 2019

I hear you. My comments about valuation are directed primarily at folks who think that stocks are minimally risky if you have a long enough time frame. That is simply not true. The only time stocks are not risky is when you have enough safe assets to never have to worry about what happens to stocks...
by ignition
Tue Apr 09, 2019 12:12 pm
Forum: Investing - Theory, News & General
Topic: That's enough for me in 2019
Replies: 817
Views: 100929

Re: That's enough for me in 2019

Now, did the CAPE really fail in 1996? Wasn't it overvalued and then even more overvalued throughout the tech bubble? What was the real return to the bottom of the market in 2009? If stocks didn't outperform other MUCH SAFER investments, why do you insist that they weren't "overvalued." Because at ...