Search found 1198 matches

by Thesaints
Wed Jan 10, 2018 7:54 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4473

Re: Corporate bonds vs. Treasuries

Why not cash, instead of LT treasuries, and a little more stocks to make up for the lost yield ? In theory, adding LT treasuries reduces overall volatility, which is appealing to me. I'm not a big fan of cash but I could be convinced. LT treasuries have higher volatility than cash. Depending on the...
by Thesaints
Wed Jan 10, 2018 6:35 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4473

Re: Corporate bonds vs. Treasuries

Why not cash, instead of LT treasuries, and a little more stocks to make up for the lost yield ?
by Thesaints
Wed Jan 10, 2018 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Buffett on bonds
Replies: 34
Views: 5102

Re: Buffett on bonds

Bonds have actually been very good performers in recent years. That's the reason behind our present expectation of them being not too good in the future. Yet, one does not have to confuse expected return with expected volatility. Bonds will arguably still have lower volatility than stocks. The issue...
by Thesaints
Wed Jan 10, 2018 6:25 pm
Forum: Investing - Help with Personal Investments
Topic: 25 Year Old Retiring Extremely Early-Domestic Wellesley or Half Global, Half Domestic Wellesley Better for my Bonds?
Replies: 55
Views: 6816

Re: 25 Year Old Retiring Extremely Early-Domestic Wellesley or Half Global, Half Domestic Wellesley Better for my Bonds?

The logic of working another year or two to build up a safety margin never ends. Sure, if OP worked another year or two they could possibly spend 30-40k per year safely. However, another year or two would add another 10-15k of annual spending. My desired yearly spending is personally higher than 25...
by Thesaints
Wed Jan 10, 2018 3:39 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

I never said you had to buy and sell and buy and sell. I said you could buy and sell at any time. The implementation of DCA I see (buy once and hold) denies this fact. Everyone is always able to potentially buy or sell, at any time markets are open. When they choose to exercise their ability repeat...
by Thesaints
Wed Jan 10, 2018 3:34 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

One thing is estimating statistical properties of markets, which drives one's asset allocation, etc. Another thing entirely is guessing actual time evolution (i.e. the particular realization of the stochastic process), which is what you need to successfully buy and sell and buy and sell. The first i...
by Thesaints
Wed Jan 10, 2018 3:29 pm
Forum: Personal Finance (Not Investing)
Topic: Underwater 4-5k in vehicle.
Replies: 29
Views: 1784

Re: Underwater 4-5k in vehicle.

Isn't everybody (with a car loan) underwater the moment they leave the dealership parking lot ?
by Thesaints
Wed Jan 10, 2018 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: Buy I and EE bonds now, or wait
Replies: 7
Views: 521

Re: Buy I and EE bonds now, or wait

EE there is no way they will reach 3.50% any time soon (or even later), so the only reason to buy them would be to hold them for 20 years and therefore it doesn't matter whether you buy now or in May. I Series, there are the two last weeks in April and in October, when one knows their yield for the ...
by Thesaints
Wed Jan 10, 2018 3:08 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

^Yes. The expected return should be positive. Otherwise you should not invest, lump sum or DCA. Yes. You would have to "disinvest." Which you can do. That's the point. You don't have to wait indefinitely to see if things change because you can buy/sell at any time. Again, that's the point. So the p...
by Thesaints
Wed Jan 10, 2018 3:05 pm
Forum: Investing - Help with Personal Investments
Topic: 25 Year Old Retiring Extremely Early-Domestic Wellesley or Half Global, Half Domestic Wellesley Better for my Bonds?
Replies: 55
Views: 6816

Re: 25 Year Old Retiring Extremely Early-Domestic Wellesley or Half Global, Half Domestic Wellesley Better for my Bonds?

According to http://www.globalrichlist.com/ an annual income of 25,000 dollars makes you one of the top 2% richest individuals in the world by income. With a $1,000 a month one is king in South Sudan, but I don't want to live in South Sudan. Being able to choose, I'll work a few more years and be a...
by Thesaints
Wed Jan 10, 2018 2:57 pm
Forum: Investing - Theory, News & General
Topic: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?
Replies: 16
Views: 889

Re: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?

OkieIndexer wrote:
Wed Jan 10, 2018 2:53 pm
I'm not sure why high yield corporate bonds did so much better than stocks during the 1940s. Seems like most of the outperformance happened between 1940-42. Any ideas?
Companies were not allowed to fail back then.
by Thesaints
Wed Jan 10, 2018 2:52 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

Whether you do it all at once or gradually is up to you, but I think all at once is the more "predictionless" approach. Well, it actually rests on the principle that on average markets go up. Otherwise there would be no advantage at all in investing earlier. Otherwise, you think you will be better ...
by Thesaints
Wed Jan 10, 2018 2:47 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

But what did you get for that reduction in return? I got that my cost basis is lower than the average of 24 prices, rather than equal to a single price. It is true that "chances are that single price will be lower than the 24 prices average", but it is "chances are", not "for sure" and there is a n...
by Thesaints
Wed Jan 10, 2018 2:41 pm
Forum: Investing - Help with Personal Investments
Topic: Help -- Confusion about difference between fund performance/cost-basis gains-losses
Replies: 5
Views: 259

Re: Help -- Confusion about difference between fund performance/cost-basis gains-losses

I mean in the sense that:

Buy $100 of bonds fund. Cash in and reinvest $10 of dividends. Total value at today's market price is $109.

You have made $9 of gains, but cost basis (which takes into account your reinvested dividends) will show a $1 loss.
by Thesaints
Wed Jan 10, 2018 2:30 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

Of course you don't. Consider rebalancing. You can rebalance because you have the ability to buy and sell at any time. Yet this requires no price prediction. Or, if you don't like that example since I also am not fond of rebalancing, consider the need to sell securities to purchase real estate, an ...
by Thesaints
Wed Jan 10, 2018 2:23 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

Sure! If I can guess right market prices I don't need DCA; I can simply buy the winning lottery ticket. This is a false dilemma. You don't need to guess correctly on what market prices will be just because you don't DCA. You sure do to take advantage of "the ability to buy/sell at any time".
by Thesaints
Wed Jan 10, 2018 2:20 pm
Forum: Investing - Theory, News & General
Topic: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?
Replies: 16
Views: 889

Re: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?

The OP's is a good question, although IG corporate bonds are a lot closer to treasuries than to the halfway point between treasuries and stocks. It is linked to the validity of barbell risk strategies. With corporate bonds instead of treasuries my expected return increases a little, but my risk also...
by Thesaints
Wed Jan 10, 2018 2:11 pm
Forum: Personal Consumer Issues
Topic: Noise in my attic
Replies: 307
Views: 78054

Re: Noise in my attic

We didn’t hear any boom, but the other day we found a box with a few 8mm movie reels and a projector we had never noticed before. They probably belong to the family living here before us. Should I watch them ? Feels like intruding in their lives. Perhaps you should first watch the movie "The Ring."...
by Thesaints
Wed Jan 10, 2018 2:10 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 354
Views: 34966

Re: Year 2000 retirees using the '4% rule' - Where are they now?

Not only one has likely to work longer years in order to achieve a 50x expenses capital. They also have to resist the temptation of increasing their expenses. After all, the whole retirement riddle is exactly this: What is the maximum (not the minimum !) amount I can withdraw consistently from my in...
by Thesaints
Wed Jan 10, 2018 2:05 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4512

Re: Sequence of Return Risk impact on Retirement

Yes, but as you only sell bonds your risk progressively increases. That's why you recover so much more at the end, except that you are not guaranteed such a positive outcome. The only thing you are guaranteed is a higher volatility.
by Thesaints
Wed Jan 10, 2018 2:02 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

The key to avoiding the mental trap of DCA is to first avoid the mental trap of buy and hold. You have the ability to buy/sell at any time, within the constraints of the market system, liquidity, etc. Once you forget the idea of being a "buy and hold" investor, DCA will no longer seem relevant. The...
by Thesaints
Wed Jan 10, 2018 2:01 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

Even if true, you could accomplish reduced returns and reduced volatility just by holding more fixed income. I don't really buy your explanation for the change in volatility. I think it's the asset allocation. But I don't want reduced returns for all the eternity! My target is to enjoy the returns ...
by Thesaints
Wed Jan 10, 2018 1:54 pm
Forum: Investing - Help with Personal Investments
Topic: 25 Year Old Retiring Extremely Early-Domestic Wellesley or Half Global, Half Domestic Wellesley Better for my Bonds?
Replies: 55
Views: 6816

Re: 25 Year Old Retiring Extremely Early-Domestic Wellesley or Half Global, Half Domestic Wellesley Better for my Bonds?

Why retire at age 25, only to "survive" with 25k/year, instead of working a few more years and retire to a more comfortable lifestyle ?
I'm pretty sure everyone on BH would be able to retire right now if only they moved to Somalia, yet it would not be an advisable solution.
by Thesaints
Wed Jan 10, 2018 12:24 pm
Forum: Investing - Help with Personal Investments
Topic: Help -- Confusion about difference between fund performance/cost-basis gains-losses
Replies: 5
Views: 259

Re: Help -- Confusion about difference between fund performance/cost-basis gains-losses

Performance does not take into account reinvested dividends. It is typical of bond funds to show a negative cost basis, since their changes in price are snall compared to dividend payouts.
Cost basis is what you use for tax purposes, instead.
by Thesaints
Wed Jan 10, 2018 12:22 pm
Forum: Personal Consumer Issues
Topic: Sell Sports Car and Invest or Keep for Fun Factor
Replies: 25
Views: 1232

Re: Sell Sports Car and Invest or Keep for Fun Factor

Why do you want money ? To support your lifestyle, I guess.
Is the honda part of your lifestyle ? If it is why sell it ?
by Thesaints
Wed Jan 10, 2018 12:20 pm
Forum: Investing - Theory, News & General
Topic: dividend date
Replies: 9
Views: 609

Re: dividend date

It stands to reason that today, when fractional shares can be sold at little or no cost, dividends are less than useless.
When I entrust company X’s management with my money, the last thing I want is for them to return some to me, when I have not requested them and in a taxable event.
by Thesaints
Wed Jan 10, 2018 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

So one should be constantly selling parts of the portfolio to DCA back in? Isn't the reduction in volatility due mainly to a higher cash allocation, and lower stock? No, it is because you invest at many different prices, instead of picking a single one. So that would be a good strategy all the time...
by Thesaints
Wed Jan 10, 2018 4:16 am
Forum: Investing - Help with Personal Investments
Topic: Options on World Stocks similar to Options on SPY?
Replies: 8
Views: 338

Re: Options on World Stocks similar to Options on SPY?

Try ACWI, but please post here as soon as you think a major fall took place.
by Thesaints
Wed Jan 10, 2018 4:07 am
Forum: Investing - Theory, News & General
Topic: The dot-com/blockchain bubble of the 1920s: Utility stocks
Replies: 15
Views: 1688

Re: The dot-com/blockchain bubble of the 1920s: Utility stocks

.It's the underlying argument that the pace of technological innovation has slowed dramatically since then (I think the airplane, the motor car and the tv are included in the past period).. Who says so ??? http://faculty.chicagobooth.edu/chad.syverson/research/ITrevolution.pdf https://www.vox.com/a...
by Thesaints
Wed Jan 10, 2018 2:55 am
Forum: Investing - Theory, News & General
Topic: The dot-com/blockchain bubble of the 1920s: Utility stocks
Replies: 15
Views: 1688

Re: The dot-com/blockchain bubble of the 1920s: Utility stocks

Valuethinker wrote:
Wed Jan 10, 2018 2:46 am
.It's the underlying argument that the pace of technological innovation has slowed dramatically since then (I think the airplane, the motor car and the tv are included in the past period)..
Who says so ???
by Thesaints
Wed Jan 10, 2018 2:48 am
Forum: Investing - Theory, News & General
Topic: dividend date
Replies: 9
Views: 609

Re: dividend date

ketanco wrote:
Wed Jan 10, 2018 2:45 am
will i get paid a dividend in 2018 from GE, even if i sold my GE stock now?
It is only the last owner of record before the ex-div who gets the bird.

Sorry, I just realized I wrote sell before the ex-div, I meant after.
by Thesaints
Wed Jan 10, 2018 2:46 am
Forum: Personal Consumer Issues
Topic: Noise in my attic
Replies: 307
Views: 78054

Re: Noise in my attic

We didn’t hear any boom, but the other day we found a box with a few 8mm movie reels and a projector we had never noticed before. They probably belong to the family living here before us. Should I watch them ? Feels like intruding in their lives.
by Thesaints
Wed Jan 10, 2018 2:42 am
Forum: Investing - Theory, News & General
Topic: The dot-com/blockchain bubble of the 1920s: Utility stocks
Replies: 15
Views: 1688

Re: The dot-com/blockchain bubble of the 1920s: Utility stocks

What’s the P/E of the blockchain ? How do we calculate its CAPE ?
by Thesaints
Wed Jan 10, 2018 2:37 am
Forum: Investing - Theory, News & General
Topic: dividend date
Replies: 9
Views: 609

Re: dividend date

The ex-div date is the date at which the stock begins to trade with the dividend subtracted. If you sell before after the ex-div date you get the dividend paid to you (it makes sense, doesn’t it ?). Dividend is paid in the dividend payout date, which comes later. Usually by just a few days, but for ...
by Thesaints
Wed Jan 10, 2018 2:20 am
Forum: Personal Finance (Not Investing)
Topic: Forget Customer Service--Vanguard has lousy Computers
Replies: 22
Views: 3197

Re: Forget Customer Service--Vanguard has lousy Computers

looks like the brokerage account allowed the OP to short stocks. Did he have margin enabled ? Is it at all possible to go short in IRA accounts ?
by Thesaints
Wed Jan 10, 2018 2:08 am
Forum: Investing - Help with Personal Investments
Topic: Please help my backdoor Roth IRA process better next year
Replies: 15
Views: 970

Re: Please help my backdoor Roth IRA process better next year

So that WCI article linked above suggests to keep the pennies in the traditional IRA all year long, then use it to fund the Roth IRA for next year. Any difference in converting now vs. leaving it in the account all year? :dollar In one case you’ll pay taxes on a $1.27 conversion this year, in the o...
by Thesaints
Wed Jan 10, 2018 1:51 am
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4512

Re: Sequence of Return Risk impact on Retirement

Don't forget sequence of returns has an effect while contributing as well. It is just that premature reduction of the portfolio to zero is not one of the consequences. It is only when a single sum is held without contributions or withdrawals that the sequence of returns has no effect at all. Well, ...
by Thesaints
Wed Jan 10, 2018 1:42 am
Forum: Investing - Theory, News & General
Topic: How diversified are you really with cap weighted foreign markets?
Replies: 37
Views: 2087

Re: How diversified are you really with cap weighted foreign markets?

A cap weighted portfolio is maximally diversified. Any non cap weighted portfolio can be seen as the sum of a cap weighted portfolio (valued less than the total capital), plus a number of bets in individual companies. A simple example can clarify the concept. Let’s take the simplest possible index, ...
by Thesaints
Tue Jan 09, 2018 10:08 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4512

Re: Sequence of Return Risk impact on Retirement

Thesaints, In summary, A) It is bad to have a bear market while withdrawing. B) While accumulating, it may not matter whether it is a bear or bull market. Is that what you are saying? KlangFool Yes, with minor adjustments A) it is worst to have a bear market while withdrawing than while contributin...
by Thesaints
Tue Jan 09, 2018 10:00 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

Earl Lemongrab wrote:
Tue Jan 09, 2018 9:22 pm
So one should be constantly selling parts of the portfolio to DCA back in? Isn't the reduction in volatility due mainly to a higher cash allocation, and lower stock?
No, it is because you invest at many different prices, instead of picking a single one.
by Thesaints
Tue Jan 09, 2018 9:57 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4512

Re: Sequence of Return Risk impact on Retirement

Thesaints, 1) I do not have that option. So, please answer my question. Then naturally a bear market before you retire is worse, everything else being equal , because it will force you to enter retirement with a smaller capital. Don't commit the error to think that because there was a bear market b...
by Thesaints
Tue Jan 09, 2018 9:37 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4512

Re: Sequence of Return Risk impact on Retirement

But, this is neither (A) or (B). Is (A) or (B) worse? KlangFool What happens before and what happens after retirement is a false problem. If market drops before retirement, you simply keep working (hopefully you have this option), because you haven't reached sufficient capital for retiring safely w...
by Thesaints
Tue Jan 09, 2018 9:24 pm
Forum: Investing - Help with Personal Investments
Topic: Help with unique situation [stayed out of market since 2008]
Replies: 34
Views: 3928

Re: Help with unique situation [stayed out of market since 2008]

You don't know (in the sense that you "can't know") whether the market is expensive, or cheap. Therefore you can't tell when to be 100% in stocks and when 50/50, if it is only future market return that drives your choice . Your best option at this point is to formulate financial targets (how much mo...
by Thesaints
Tue Jan 09, 2018 9:17 pm
Forum: Investing - Theory, News & General
Topic: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data
Replies: 44
Views: 3105

Re: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data

pezblanco wrote:
Tue Jan 09, 2018 7:14 pm
Well, yes I suppose. Though a -50% spike on a 50% leveraged portfolio would not wipe you out, right?
That depends on how fast the drop is. If it is gradual enough that you manage to keep your margin at 50%, then you only lose 75%.
If it is much faster, loss could be even higher.
by Thesaints
Tue Jan 09, 2018 8:53 pm
Forum: Investing - Help with Personal Investments
Topic: Sequence of Return Risk impact on Retirement
Replies: 103
Views: 4512

Re: Sequence of Return Risk impact on Retirement

-10%, -20%, -10%, -20%, -30%, +25%, +25%, +25%, +25%, +25% +25%, -10%, +25%, -20%, +25%, -10%, +25%, -20%, +25%, -30% average return is obviously the same as well as the volatility distribution (not just its value !). If you withdraw 5% of initial amount every year in the first case you end up with ...
by Thesaints
Tue Jan 09, 2018 6:49 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

He is analyzing a 1 year long investment executed in a single act at the beginning, or through equal amounts every month. He assumes that once someone is fully invested at years end future results are the same, regardless of the execution method. Then the author makes his observations about the roul...
by Thesaints
Tue Jan 09, 2018 6:39 pm
Forum: Investing - Theory, News & General
Topic: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data
Replies: 44
Views: 3105

Re: Maximizing Portfolio Growth Rate - Kelly Criterion - Empirical Market Data

You are correct in principle, but real cost of leveraging is to be accounted for, as well as the outcome of a -50% spike (
NASDAQ 2000, for instance) and the possibility of remaining leveraged.
I think your model assumes infinite credit on the investor's part.
by Thesaints
Tue Jan 09, 2018 6:20 pm
Forum: Investing - Help with Personal Investments
Topic: An economist dismisses the idea of dollar cost averaging
Replies: 71
Views: 5532

Re: An economist dismisses the idea of dollar cost averaging

What's the equivalent allocation to investing 100% in stocks for 20 years, but purchasing assets during the initial 24 months in equal installments ?
It is "equivalent" in what ? Expected return ? Volatility ? Volatility tails ?