Search found 276 matches

by Seasonal
Wed Jun 26, 2019 4:58 pm
Forum: Personal Finance (Not Investing)
Topic: Compound interest for 10% interest rate?
Replies: 29
Views: 3550

Re: Compound interest for 10% interest rate?

Chart of Turkish Lira v US Dollar. It's not a pretty picture

https://www.xe.com/currencycharts/?from ... D&view=10Y
by Seasonal
Wed Jun 26, 2019 12:59 pm
Forum: Investing - Theory, News & General
Topic: 10 Year Treasury Under 2%
Replies: 23
Views: 1544

Re: 10 Year Treasury Under 2%

Investors are thinking the economy is less strong than you appear to believe. Whether stock or bond investors are better at judging the future is a perpetual question. It's possible stocks are high because low rates overcome concerns about the economy (lower rates increase the present value of futur...
by Seasonal
Tue Jun 25, 2019 2:12 pm
Forum: Personal Consumer Issues
Topic: Am I falling into the trap of judging everything through cost lens?
Replies: 44
Views: 3132

Re: Am I falling into the trap of judging everything through cost lens?

Cost does not necessarily correspond to value to you. Consider where you'll get the most value by spending more. Which will give you more pleasure, an extra $3,000 on a flight or an extra $500/night on a hotel or an extra $500 on a dinner? Would you be better off flying economy, staying at a moderat...
by Seasonal
Tue Jun 25, 2019 12:14 pm
Forum: Investing - Theory, News & General
Topic: Firecalc why/when can you adjust your spending?
Replies: 12
Views: 868

Re: Firecalc why/when can you adjust your spending?

My vague sense is that setting a SWR works in part because there will be up years and down years and the up years provide a cushion for the down years. If you ratchet up spending in up years and don't make changes in down years, you would seem to be changing the conditions under which SWRs (such as ...
by Seasonal
Mon Jun 24, 2019 4:46 pm
Forum: Investing - Theory, News & General
Topic: FT article: "Pension funds raise concern over index manager stewardship"
Replies: 21
Views: 1736

Re: FT article: "Pension funds raise concern over index manager stewardship"

What competitive advantage the index manager with "better atewardship" would have? As an individual investor, I get combined result of everyone's stewardship (similar to market price. "market stewardship" ?), but I go get to choose whose fees to pay. Tradagies of the Commons. Rational actions of th...
by Seasonal
Thu Jun 20, 2019 7:26 pm
Forum: Investing - Theory, News & General
Topic: Against the Clock - Robert Merton & the Economist's Buttonwood
Replies: 11
Views: 1471

Re: Against the Clock - Robert Merton & the Economist's Buttonwood

Dear BobK, That's not the only possible scenario. For example, one could have a high paying job until 40 or 50, believe it will continue until retirement, then become disabled or otherwise have greatly reduced human capital. There are likely many possible scenarios that have different implications f...
by Seasonal
Thu Jun 20, 2019 7:23 pm
Forum: Investing - Theory, News & General
Topic: Against the Clock - Robert Merton & the Economist's Buttonwood
Replies: 11
Views: 1471

Re: Against the Clock - Robert Merton & the Economist's Buttonwood

Dear BobK, That's not the only possible scenario. For example, one could have a high paying job until 40 or 50, believe it will continue until retirement, then become disabled or otherwise have greatly reduced human capital. There are likely many possible scenarios that have different implications f...
by Seasonal
Thu Jun 20, 2019 5:57 pm
Forum: Investing - Theory, News & General
Topic: Against the Clock - Robert Merton & the Economist's Buttonwood
Replies: 11
Views: 1471

Re: Against the Clock - Robert Merton & the Economist's Buttonwood

...the stock market has always recovered. A year of earnings lost to unemployment is gone forever. The US stock market has always recovered in the modern era. That doesn't mean the stock market will always recover. A year of lost earnings is less than 2.5% of lifetime earnings for a 42 year working...
by Seasonal
Wed Jun 19, 2019 11:59 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 111
Views: 5832

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

Survivorship bias would seem to help SCV. Tiny sample size continues to be a problem - almost by definition SCV is a tiny percentage of the market. Not in this case, I think. As I mentioned, the SCV funds that did well in the 1970s grew enough to be large cap funds today: that reclassification remo...
by Seasonal
Wed Jun 19, 2019 11:52 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 111
Views: 5832

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

Rebalancing bands (5% absolute, 25% relative for example) are perhaps arbitrary but significantly less arbitrary than time-based rebalancing. Perhaps a way to make it even less arbitrary would be rebalancing bands based on a factor of the volatility of each asset. It all seems equally arbitrary to ...
by Seasonal
Wed Jun 19, 2019 11:46 am
Forum: Investing - Theory, News & General
Topic: Against the Clock - Robert Merton & the Economist's Buttonwood
Replies: 11
Views: 1471

Re: Against the Clock - Robert Merton & the Economist's Buttonwood

"Human capital is low-risk." I wonder about this. It's quite possible to lose one's job and have a hard time finding one which pays the same or something close. It's not clear to me whether human capital is more or less risky than stocks. Interesting article and I certainly agree that the problem is...
by Seasonal
Wed Jun 19, 2019 11:22 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 111
Views: 5832

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

Thanks for this analysis, but here is what I think of the following: My calculations assumed annual rebalancing at the end of every December. One should use a different kind of rebalancing. What kind? Why? Something less arbitrary that is rules based will better capture any rebalancing bonus betwee...
by Seasonal
Wed Jun 19, 2019 11:20 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 111
Views: 5832

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

Let me make one long disclaimer up front. There are many obvious issues with what I'm about to do. There are so many issues that I know I wouldn't even try to do what you did. So one thing we know is that there are NO existing small cap value funds with inception dates before 1972. So whatever fund...
by Seasonal
Wed Jun 19, 2019 11:09 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 111
Views: 5832

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

livesoft wrote:
Wed Jun 19, 2019 10:35 am
Thanks for this analysis, but here is what I think of the following:
nisiprius wrote:
Wed Jun 19, 2019 9:52 am
My calculations assumed annual rebalancing at the end of every December.
One should use a different kind of rebalancing.
What kind?

Why?
by Seasonal
Wed Jun 19, 2019 10:23 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 111
Views: 5832

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

I agree with your conclusion. I believe the usual objections of the SCV advocates to studies similar to yours concern categorization (funds labelled SCV are not necessarily SCV) and time periods (whatever time periods chosen are not appropriate), as you suggest. If I recall correctly, SCV advocates ...
by Seasonal
Wed Jun 19, 2019 8:57 am
Forum: Personal Finance (Not Investing)
Topic: How to estimate taxes during retirement?
Replies: 39
Views: 2630

Re: How to estimate taxes during retirement?

OP, It is dependent on whether your annual retirement expense is A) around 50K per year or B) the 100K per year range. or higher. Folks in (A) can assume that the taxes will be closed to zero. KlangFool Actually it has nothing to do with expenses in retirement. It does have to do with whether you m...
by Seasonal
Sat Jun 15, 2019 2:21 pm
Forum: Personal Investments
Topic: Monte Carlo Simulation
Replies: 44
Views: 3591

Re: Monte Carlo Simulation

Please explain what you mean by the emphasized language. An example of intelligent and thoughtful input for financial planning would be helpful. Sure. I would recommend looking at the range of outcomes for the the things that are driving your decisions. One of my goals is early retirement. I had a ...
by Seasonal
Fri Jun 14, 2019 12:13 pm
Forum: Personal Investments
Topic: Monte Carlo Simulation
Replies: 44
Views: 3591

Re: Monte Carlo Simulation

Monte Carlo can tell you the probability of having $1 million at age 80, the probability of retiring by age 60, etc. The output is only as good as the input, but the quality of the input is based on the intelligence and thoughtfulness of the user . Monte Carlo may not be the best casual tool, but i...
by Seasonal
Fri Jun 14, 2019 9:20 am
Forum: Personal Investments
Topic: Why asset allocation should match market capitalization
Replies: 16
Views: 2356

Re: Why asset allocation should match market capitalization

Cocorota, one justification for market cap weighting comes from some results in financial economics regarding "the market portfolio." The market portfolio is the grand total of all of the shares of stocks that are available for trading in a market. The results depend on many assumptions. The assump...
by Seasonal
Fri Jun 14, 2019 9:05 am
Forum: Personal Investments
Topic: Why asset allocation should match market capitalization
Replies: 16
Views: 2356

Re: Why asset allocation should match market capitalization

"The global market portfolio might be a good choice for a truly international investor, who lives in hotels and on airlines, pays taxes everywhere, consumes goods from all over the world, is of average age and risk tolerance, and so on. Of course this is not likely to describe anyone in this room. ...
by Seasonal
Tue Jun 11, 2019 6:26 am
Forum: Personal Investments
Topic: Monte Carlo Simulation
Replies: 44
Views: 3591

Re: Monte Carlo Simulation

I recognize that a Monte Carlo simulation looks backward, and that can be no guarantee of future results. However, if I have entered in all the correct information regarding my assets and my intended withdrawals, is this a reasonably accurate tool to use for planning. Any other vehicles that people...
by Seasonal
Sun Jun 09, 2019 8:58 am
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 12058

Re: Insights from Vanguard

I wonder if PAS recommendations differ from those of their CFPs Thanks so much for sharing these. I spoke with Vanguard recently too and here's what I learned: - Don't do less than 30% stocks bec you need to hedge against inflation (not sure why 30% was the number) Ben Graham recommended no less tha...
by Seasonal
Sat Jun 08, 2019 7:06 pm
Forum: Investing - Theory, News & General
Topic: What percentage of time does 100% stocks win?
Replies: 52
Views: 6558

Re: What percentage of time does 100% stocks win?

Over a 20 year interval according to historical markers (from 1930s and onward) what percentage of the time did 100% stocks win as compared to other asset allocations? (If my memory hasn't betrayed me) I remember reading in Jeremy Siegel's most recent edition of "Stocks for the Long Run" (2014) tha...
by Seasonal
Sat Jun 08, 2019 6:08 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 137
Views: 10333

Re: are TIPS expensive? or are they cheap?

There is an old saying “don’t fight the fed”. I tend to believe the fed will, in the long run, deliver on their inflation target. Perhaps, but the evidence is that the Fed regards its inflation target mostly as a ceiling and is much more willing to undershoot than overshoot. The ECB is even more fi...
by Seasonal
Fri Jun 07, 2019 5:36 pm
Forum: Investing - Theory, News & General
Topic: Market up because of rate cut expectation - why ?
Replies: 21
Views: 2793

Re: Market up because of rate cut expectation - why ?

But lower rates are coming in just because there is a probability of a slow down or recession . How is that positive for stocks ? The Fed cutting, and signaling that it will act to combat a slow down or recession, should stimulate the economy. The signaling function (aka expectations) is likely mor...
by Seasonal
Fri Jun 07, 2019 2:58 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15479

Re: The logical fallacy behind "Bonds Are For Safety"

Simply put, Bonds are safe, they pay interest, they mature and you get your investment back! Enough said! Unless they default. Or you need to sell before they mature. Or you need a higher rate of return than they offer. Or . . . Default? Debt issued by a G7 country, e.g., US treasuries, are highly ...
by Seasonal
Thu Jun 06, 2019 9:40 am
Forum: Investing - Theory, News & General
Topic: Rational that ret portfolios should grow more conservative?
Replies: 19
Views: 1370

Re: Rational that ret portfolios should grow more conservative?

I believe the three categories are: Emotional tolerance - how comfortable you are with the volatility often seen in stocks and how likely you are to sell if your portfolio falls. Economic tolerance - how much of an economic problem it would be for you if your portfolio fell. Economic "need" - how mu...
by Seasonal
Sat Jun 01, 2019 6:20 pm
Forum: Personal Consumer Issues
Topic: Should I buy Euros from local bank or use ATM in Europe
Replies: 37
Views: 2141

Re: Should I buy Euros from local bank or use ATM in Europe

livesoft wrote:
Sat Jun 01, 2019 6:13 pm
Or don't use cash in Europe at all.

I try to go cashless, but if I need cash overseas, I just use my ATM card to get the minimal amount in-country. But my bank doesn't charge any extra and gives an excellent exchange rate last few times I've done that.
Which bank?
by Seasonal
Sat Jun 01, 2019 10:35 am
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 17707

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

Seasonal, while it is obviously true that not everyone can tilt to factors, that doesn't mean that those who CAN and are willing to should not. And everyone can add unique sources of risk and return that meet the criteria of persistence and pervasiveness and robustness, implementability and intuiti...
by Seasonal
Fri May 31, 2019 4:12 pm
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 17707

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

Seasonal, to be helpful re this comment "To the extent that implies something other than cap weighting, that has never made any sense to me. " Here is the simple logic that many even legendary investors like Bridgeway's Ray Dalio have adopted in one form or another (like the permanent portfolio or ...
by Seasonal
Fri May 31, 2019 1:02 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 11014
Views: 1924506

Re: U.S. stocks in free fall

U.S. equities on sale - yes, please! :beer There are two types of sales. A good image is something I read here: hamburger may be on sale because the seller has decided to lower the price or it may be on sale because it's spoiled and no longer good quality. The first type of sale is great. The secon...
by Seasonal
Fri May 31, 2019 7:00 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 11014
Views: 1924506

Re: U.S. stocks in free fall

My crystal ball predicts that tomorrow will be glorious for those of us cheering for a crash. Geo-political risk is increasing. Not completely "priced-in" it appears. Parts of the yield curve continue to invert. Looks like increased volatility ahead. Unexpected government actions are not likely to ...
by Seasonal
Fri May 31, 2019 6:55 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 11014
Views: 1924506

Re: U.S. stocks in free fall

I'd rather have a crash due to irrationally pessimistic investors than a crash due to things which harm the economy, especially things that can have long-term negative consequences.
by Seasonal
Fri May 31, 2019 5:01 am
Forum: Investing - Theory, News & General
Topic: Global Inflation - Targeted into Submission?
Replies: 22
Views: 1836

Re: Global Inflation - Targeted into Submission?

DISCUSSION: Inflation is arguably the financial variable with the single greatest impact upon our portfolios, affecting bond term premiums, equity factor returns and stock-bond correlations — and is increasingly being determined by forces beyond our borders. Today, we can think in terms of global i...
by Seasonal
Wed May 29, 2019 10:41 am
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 17707

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

In a multi-factor world, SD is far from an adequate metric for risk. Even more reason to diversify as broadly as possible across factors and other sources of risk/return. Dave To the extent that implies something other than cap weighting, that has never made any sense to me. Just because there are ...
by Seasonal
Wed May 29, 2019 10:08 am
Forum: Personal Investments
Topic: Buying treasuries other than ultra short term?
Replies: 45
Views: 2976

Re: Buying treasuries other than ultra short term?

Reinvestment risk. That means the risk that when the term is up and you reinvest interest rates will have dropped across the yield curve. Whether or not one thinks that risk amounts to much is a question. Long term rates are still pretty low, so it doesn't look like one is taking much risk to avoid...
by Seasonal
Wed May 29, 2019 9:45 am
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 17707

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

Every investment adviser thinks they're above average. Every investment adviser charges what they believe is a bargain for their astute advice and services. Every investment adviser says they add-value to a client's financial well-being. Very few advisers do. Absolutely. For those who do add value,...
by Seasonal
Wed May 29, 2019 9:45 am
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 17707

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

Most people don’t appreciate that a typical 60/40 portfolio has 85-90% of its risk wrapped up in a single factor. And a 30/70 stocks/bonds portfolio has like 95% of its risk wrapped up in a single factor. So your method of determining risk makes it sound like the 30/70 portfolio is even riskier tha...
by Seasonal
Wed May 29, 2019 9:44 am
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 17707

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

If markets are more or less efficient, all a factor based portfolio and the market portfolio would be expected to have the same risk-adjusted return.There's no free lunch in this case. Furthermore, in this case, the market chooses the optimal portfolio for the representative investor, which is the c...
by Seasonal
Tue May 28, 2019 3:09 pm
Forum: Investing - Theory, News & General
Topic: How can I check my portfolio as little as possible?
Replies: 69
Views: 3194

Re: How can I check my portfolio as little as possible?

I agree that my portfolio is very risky in the short run. However, I have a 15-year time horizon, which means that the risk of my portfolio is substantially lower than it may seem to be over a matter of a few years. Commonly known as the fallacy of time diversification. Random thread on the subject...
by Seasonal
Tue May 28, 2019 6:32 am
Forum: Personal Investments
Topic: Estimating "largest loss since 1926" and "# years with loss"
Replies: 24
Views: 2429

Re: Estimating "largest loss since 1926" and "# years with loss"

A problem with this type of analysis is that it's based on the implicit assumption that the years since 1926 are a good guide to the future. They may or they may not be. Further, you know that US markets have always recovered, which could easily lead you to overestimate your appetite for risk. I dou...
by Seasonal
Mon May 27, 2019 5:01 am
Forum: Personal Consumer Issues
Topic: London / UK Summer Trip
Replies: 57
Views: 3195

Re: London / UK Summer Trip

If you plan to visit National Trust sites, the US affliate is having a spring sale on memberships, which provide free admissions & sometimes free parking. https://www.royal-oak.org/special-discount-spring2019/ In addition to saving money if you visit a bunch of sites, a major benefit of being a Roy...
by Seasonal
Mon May 27, 2019 4:54 am
Forum: Investing - Theory, News & General
Topic: 4% withdrawal failed in 1960s. Is that correct?
Replies: 34
Views: 4114

Re: 4% withdrawal failed in 1960s. Is that correct?

4% is a rule of thumb, not a guarantee. Even if it never failed in the past does not mean it will never fail in the future. One reason for not putting too much weight on these studies is that there have not been many independent 30 year periods in the modern era. Using overlapping periods gives the ...
by Seasonal
Fri May 24, 2019 11:30 am
Forum: Investing - Theory, News & General
Topic: Vanguard issues 10-year forecast for stock, bond market returns
Replies: 79
Views: 8482

Re: Vanguard issues 10-year forecast for stock, bond market returns

US equity return forecasts seem way too low. The buyback + dividend yield is over 5%. What sort of stagnation and/or deflation are they forecasting? Yet the expect 2% real GDP growth. AND assume 2% inflation which implicitly means 4% nominal GDP growth. What high valuations do they mean? Forward PE...
by Seasonal
Wed May 22, 2019 7:40 pm
Forum: Investing - Theory, News & General
Topic: Will a financial pro be WILLING to run your SWR plan after cognitive decline?
Replies: 67
Views: 4369

Re: Will a financial pro be WILLING to run your SWR plan after cognitive decline?

Is there likely to be a point when you aren't able to run a SWR plan, but are able to pay bills and make other necessary financial and tax decisions? Obviously it will depend on the complexity of your SWR plan, but how much complexity do you really need? If you don't have anyone you trust, how will ...
by Seasonal
Wed May 22, 2019 10:11 am
Forum: Investing - Theory, News & General
Topic: Is the Global Portfolio the Least Risky? Lowest risk adjusted return?
Replies: 22
Views: 1856

Re: Is the Global Portfolio the Least Risky? Lowest risk adjusted return?

If markets are more or less efficient, everything should have the same risk adjusted expected return. If something had a higher risk-adjusted return, then investors would buy more, increasing price and decreasing risk-adjusted return, until equilibrium would be reached.
by Seasonal
Wed May 22, 2019 7:17 am
Forum: Personal Consumer Issues
Topic: Can I change int'l flight with connection to non-stop
Replies: 10
Views: 997

Re: Can I change int'l flight with connection to non-stop

I agree with the prior posters, including to try the delta forum on flyertalk. Typically, if an airline makes a major schedule change, they will allow you to change flights without paying any fees or fare changes, presuming all legs are part of the same ticket. I'd try calling and asking another Del...
by Seasonal
Sat May 18, 2019 2:35 am
Forum: Personal Consumer Issues
Topic: Why do plumbers get paid so well?
Replies: 84
Views: 6248

Re: Why do plumbers get paid so well?

finfire wrote:
Fri May 17, 2019 3:12 pm
have you tried living without water? Doesn't last long....
Yet water is incredibly inexpensive. You can buy large quantities of water for very little money. Compare the cost of, for example, a diamond, which is not necessary for survival. Perhaps importance is not the key to pricing.