Bogleheads.org

I created a plan to float my asset allocation by placing a fixed amount of assets in equity, never buying more, and selling if the market does well. I use this formula as a "guide" to do basic harvesting similar to what you are doing. (CPI-U of current / CPI-U initial date) * initial stock price = inflation adjust initial stock value (inflation adjust initial stock value) X 1.20 (20%) = harvest trigger I rebalance to "inflation adjust initial stock value" In short, I try to capture some percentage [20%] of REAL returns and drop then in the bond bucket. I go here to get my CPI date every so often: https://www.bls.gov/news.release/cpi.nr0.htm I wonder if I should use CPI-U as a gauge of inflation though. I might be drifti...

If ENR 3 bucket approach is this:

https://www.theretirementmanifesto.com/ ... -paycheck/

It seems to have 17 components categorized in 3 different buckets. Each bucket being a different harvest model, I think. I didn't read that far. I am not sure how it might backtest during stress periods nor if I would trust the testing because of all the moving parts and there complexities anyway.

I am not saying its a bad strategy but from my personal stand point this retirement strategy is just too difficult to maintain for me and explain to my wife and kids at the same time. It becomes mute.

Huh? It’s been awhile since I read the book but, McClung’s preferred approach is far from the BH recommendation of simply spending and rebalancing from a portfolio. Of important note, there is NO TARGET AA . It’s a great read but it’s not an approach I can execute with conviction. WoodSpinner HUH? McClung address "Target AA" at length. It address at length, again, traditional annual rebalancing as well as other harvesting methods. It reviews 50/50 through 90/10 with supporting MSWR for each based on his backtesting. It reviews 6 or so basic portfolios, including sp500/bond, with MSWR with various harvesting methods as well. I have had to reread this book several times over the years. It is a heavy read for me. It is not a book of...

Do you need an advisor? Assuming you know what you are doing, no. BH is a very boring portfolio. Not much to it so you and your wife might want to develop some interests or something.

Have a broker execute directed trades for you. Its safer I think.

If you are not an active trader you might want to turn off online trading.

You might want to split your funds with different brokers.

My suggestions revolve around security mainly. Just make sure someone can not runoff with what you got.

Schwab by far. If you travel overseas you will love it!

Rule # 1 ... Research matters
Rule # 2 ... Timing is everything
Rule # 3 ... Just forget all rules and become a BH

I think the Bucket Strategies being referred to here are those of Ray Lucia 3 bucket and its variant as well as the 2 bucket Grangaard strategy and it variants. Both of these strategies are reviewed in McClung's book. Both are considered to underperform in backtest when placed under periods of stress. Both have very elaborate methods of rebalancing and in the case of Lucia he is a little unsure if he understands it correctly or has an accurate guide. I agree from these readings that these strategies are not desirable however to lump all bond/stock portfolios that do not use traditional rebalancing as bucket portfolios is not accurate in my option. I believe most ppl use tradition rebalancing with some sort of stock/bond ratio. It is the def...

Living out of my bond portfolio in retirement is smart rather than my equity portfolio. I will not embrace SORR. Protect my income machine when possible. Rebalance equality portfolio on rules to grow with inflation there by allowing your bond portfolio % to free float. Bank my real profits from equity by de-risking. Review methodology every so often. Add or remove risk if needed. Correct my mistakes. In the long run I think this will beat the 50/50 with rebalancing but not by any great amount for retirement portfolios. The review does add an element of unknown risk. I added it because I do not trust any mythology with my life..... Yes, behavior. The 50/50 with rebalancing and no withdrawal rate would win probably. In any case its a fine por...

I think that inflation as far as retirement is concerned might be best expressed as a personal thing. You may wish to track your personal rate of inflation ... keep a budget or ledger if you will. You might want to use that data to deduce an adjustment to the CPI. A personal core rate if you will. I have been thinking about this myself too. It strikes me that a personal rate might be more useful that THE CPI. My retirement investments are centric to my needs and inflation is a component of it. Maybe a personal rate makes sense for retirement, for me that is.

60/40 (timing) vs 100% invested (no timing)

I found this book to be invaluable. Its very technical and a heavy read for me. It covers most ways to handle decumulation, not a beginners guide.

"Living Off Your Money: The Modern Mechanics of Investing During Retirement with Stock and Bonds"

I use YubiKeys a lot. It is by far superior to my memory. TOTP or OTP from Yubico are very good implementations. All digital keys are stored on YubiKey and can not be read. I have backups keys and I only use it with sites that allow for bkup keys.

I am not too sure what the bucket method really is however I use 1 bucket for extremely low volatile assets and another for risk assets. I live out of my LowVol bucket. I keep my SWR under 2.5%. I started a with five yr bucket. I rebalance my equity bucket after a 20% increase in constant $ from the start date. Basically a 4% ERP X 4-5yrs = 20%. In short my Equity bucket grows with inflation based on the CPI, at most. My LowVol bucket hopefully grows beyond my SWR in time. It is automatic in this sense and it try's to remove some risk from the portfolio over time which would include SORR (Sequence of Returns Risk). The quality and stability of the Portfolios in both buckets becomes import, obviously. This is a distribution portfolio and not...

The breach from LP was extensive and far reaching. I imagine a lot of ppl in this community use LP. Your pw will not protect you from the meta data and unencrypted fields that were lost. This data alone might/will show patterns/practices that can/will be used against you in the future. These vaults that were stolen are in the wild, will be traded and analyzed for years to come. As AI increases with the breakdown of algo's they will get opened up in time. Encryption is a moving upgrade target. Those ppl involve, will they change their patterns and practices or just their PW's? To the extent of the quality of the encryption, that is unknown. It is closed code you have no choice but to trust them. Given their behavior over the past 6 months wi...

After the recent LassPass hack that basically stole everyone's password vaults I am changing a bit on this. 1) Deleted lassPass account for Bitwarden. 2) No more closed source pw mgrs be them local or online. 3) Physical security, a safe place for your most sensitive pw's only. Learn to except the inconvenience and work this involves. I was reading today that insurance companies are stating that hacking insurance is just uninsurable now. That to me this is a loud statement given they usually will make book on just about anything in the past. My point though is that you are not safe with online or even local pw mgrs. Use these products for pw's of little importance and convenience. Additionally, and for me mainly due to this resent LassPass ...

To me the 60/40 portfolio is a market timing investment due to rebalancing. A non-emotional timing tool. It just works overtime, but it might not be perfect. What is? I guess it does not work too well with rates near zero and the equity market highly overvalued and then high inflation strikes. Kinda a perfect storm as bond values drops with stock prices while the market adjusts to the new reality [political comment removed - moderator Claycord JCA] . No real wooosh moment with deep price swings between stocks vs bonds to trigger a good rebalancing. In this case, the portfolio might have a down draft for a number of years until things settle out. It might be a few years during and after this time for the portfolio to repair itself for inflat...

This is the advice I give my children and what I try to practice. Yes, a pw mrg is very good however you need to be careful still. LastPass and Bitwarden are great choices. Avoid SMS authentication always. Avoid phone recovery settings always. Use OTW apps, lasspass authenticator, but not with phone recovery. Use touch keys like Yubico, if you can afford them. Use several for backup if allowed. The best method. Get the backup recovery keys for your pw mgr and store it in your safe. Periodically backup all your passwords and put store in your safe. Think though how to recover when you lose/destroy your phone ... and you will one day. Always keep a low profile online. No need to become a target. Finally understand you will never be completely...

Well at least it's not some crazy virtual vaporware crypto based investment run by a greek God or a bearded druid...... arrr wait a minute

NUE was a core holding for years for me. It was a nice ride to. A quick peek at the scrap futures leads me to believe it may have been peeking since summer. I wonder if their production capacity has returned to normal. They used to have great management. NUE with a PE <5 is not health just too cheap for me. Hoping it is still recovering from a covid economy and not fundamentally broken.

firebirdparts wrote: ↑Thu Feb 03, 2022 5:54 am

Muffin Master wrote: ↑Thu Feb 03, 2022 3:31 am
On a side note. Does NUE really have a PE <5?

It’s not just them. All the steel companies do. There was a big spike in steel price, and nobody thinks it’s spiking again in the future.

I agree, the smart money is cash out as the various economies are waking up from covid hindrances. A lot (understatement) of money has been spent foolishly. It is being redeployed, I think. Well I hope.

On a side note. Does NUE really have a PE <5?

Ed 2 wrote: ↑Thu Feb 03, 2022 3:07 am

Muffin Master wrote: ↑Thu Feb 03, 2022 2:59 am "coach trading" I not too sure what you mean? People sitting around at home with nothing better to do than watching ytube and playing around on Robinhood?

That’s exactly what I mean.

"coach trading" I not too sure what you mean? People sitting around at home with nothing better to do than watching ytube and playing around on Robinhood?

Crypto's are tanking too. Maybe we get a special on CNBC tonight ... "The FAANG Market Crash" with Jim Crammer

Yah baby!!

SilverSmurfer wrote: ↑Thu Feb 03, 2022 12:38 am

peskypesky wrote: ↑Thu Feb 03, 2022 12:32 am

SilverSmurfer wrote: ↑Wed Feb 02, 2022 2:17 pm
So now what?

Now what? Well, we all go to the free fall thread and watch the market sink. That's what!

Woohoo! Party in the free fall thread tomorrow.
FAANG?
More like DAANG it.

Crypto is choking. It seems to have a coloration with Nas. Not sure why though.

I think your question revolves around timing the market with a portfolio and what do you rebalance in particular. Fear of selling off future Apple, Google or other great stock picks. A portfolio constructed on those stocks would be a "Will Rodger's" portfolio. You might need to be a genius of sorts to build one. If you figure that out it is truly the secret sauce, however if you think about it, that's the stuff of Ponze scams and hedge funds. Personally, I have very little faith in my IQ or my superhuman investment skills. A boring 60/40 (or any other combinations) is a market timing system that has worked for generations. Good portfolio diversification and rebalancing annually works well in the long run. It has proven to offer a ...

To me dollar cost averaging gets me around the timing and fear problems I have at times ... like now.

IDK

How long can an economy suddenly shutdown everything but essential services with no lasting effects? Not just a temporary slowdown with recession/depression like numbers that will reverse quickly but a genuine induced depression. An economic collapse that could take years to decade to overcome and countless amounts of treasure.

IDK

....IDK....

"consider Mr. Bogle's often-stated opinion that a total market index fund, holding all types of funds (including small-cap value funds), is a better way to invest."

Agreed following this advise puts you in the exclusive club of the top 30% of all managers.

The divide is very sharp but I think it has narrowed over the past decade. I have noticed this the most in a manage funds than passive funds. The past decade the language of the definition of passive value funds do not always reflect the philosophy of value investing to me. It strikes me that some language would allow for buying growth if it corrects, even briefly, if it meets some value criteria during that correction. In short, buying growth on corrections or a good growth buying philosophy albeit limited. I wonder if these stocks were removed from the value funds what the returns would have looked look like over time. Would they have gone down as the turn over rate of there managers went up along with redemption's. Value investing if you...

My point was not so much the amount of holding but that the holdings of stocks themselves. For example, Google, is it a growth or value stock? I would call it a growth stock yet I can find it in various value funds. There are many other example and better. I think you will find that most holdings of value and growth funds have a lot of similar holdings. To me growth and value is like ying yang. It is not to say one can not become the other but if it does then the fund should reflect that. I do not think value funds are really doing that but rather like the tilt or shade they get from growth.

I have noticed over the years the holdings of my value and growth fund are remarkably similar. This difference seemed to me be when they bought the holdings. I guess the definitions have become blurred a little when it comes to funds.

Personal, I feel managers of value funds feel the need to turn in better numbers and were adding growth holds.

My reasons to buying growth vs value has not change but rather greatly reinforced.

Risky growth is being supported by QE. Liquidity, just unlimited liquidity. Who needs value, we just throw that away. Its like salt in a ham. Maybe it makes a good bond proxy if it drops a little more.

Value will take back its throne one day but not till a murderous slaughter of growth and its henchmen.

Till then value will be stalked by liquidity, QE and the gang!

ARRRRRRRRRRRRR ! I'm just fine thank you! <serious facial twitch>

No problems here.

1) Start studying farming -- down turn
2) Start acting like a farmer
3) Sell all your stocks --> bottom
4) Start buying farm equipment
5) Start trading agricultural futures, easier than planting.
6) Start studying stocks, because trading futures is really scary and planting is for the birds ---> recovery

Well. if cruise ships aren't your thing how about the Navy.

If nobody can not measure the risk what makes you think there is any? LOL Does the crowd theory still apply absent of all data or ,dare I say , fake data in mass? Its priced in right. LOL If you live in China and can gamble on a little hope are you really going to complain. Can you even buy or want to be seen buying some foreign shares in China? I wonder if social scoring has an effect here in this command and control surveillance economy. Confucius might have said "When a communist can meet a capitalist and schools him on finance then maybe the capitalist might have an identity crisis" I might be straying a little from topic, exaggerating a little bit maybe but if I used what little common sense I have left in my old age I would ...

Personally speaking, I see no reason to have bonds for a distribution portfolio other than to protect against sequencing of returns. This is basically the a bucket approach were your bond portfolio is large enough to cover your withdrawals for an extended down turn, like a recession. This way you would not be FORCED to sell equities at a loss. Think of compounding but in reverse when sequencing of returns moves against you. I believe there is a delicate balance between your withdrawal rate and your final AA for this model. Some models don't use an estimated time of downturn per say but rather an average of return estimates, dynamic withdrawal rates with a some sort of sequence of return bond buffer. A cottage industry revolves around this. ...

Ray Dalio is good or at least his track record is IMOP but ,,,

the SP500 went sideways 13 yrs from 2000 and and NAS was longer 16 yrs. A lot of ups and downs but net sideways. A channel. Long term consolidation I think some called it. I did very well during this time.

If he is calling for a slow consistent grinding down slope for the next 10 to 20 yrs with low volatility and negative total returns yr over yr. ... ARRR

That's a very big call. The retiree that could be devastating but for my kids it will be great until I show up on their doorstep!

Always have a plan B LOL

I think SWR is kinda an unknown.

It starts with how long you think you are going to live divided into how much money you have on hand when you start.

Plus or minus divine intervention (LOL) ,,, A good or bad market over that period. TIP ladder might be more stable but ,,,,

it asssumes o'course you die when you planned on it.

I prefer to think of the SWR as the Suicide Withdrawal Rate.

I think the US gov. 30 yr reached 3.46% last year around this time. I hope it will mean reverts one day.

At least you would get your principal back after 30yrs on the off chance you survive your bond.


LOL

So it seems to me that a negative yielding fixed income "investment" no longer belongs in my fixed income portfolio. Buying a negative yielding bond is not investing, it is speculation with a time horizon. Guaranteed loss unless the bond becomes more risky. It has no place in a retirement portfolio. The topic isn't really about buying negative yielding bonds. It is about staying the course. So, buying stocks (or an index) when many companies aren't making money is speculation? At what PE or what metric is that? Sounds very speculative. Buying stocks and buying bonds is really not the same thing for me. Buying a market with current negative earning assumes mean reversion or growth on the whole. If I did not believe this I would no...

Scooter57 wrote: ↑Wed Sep 18, 2019 3:42 pm So it seems to me that a negative yielding fixed income "investment" no longer belongs in my fixed income portfolio.

Buying a negative yielding bond is not investing, it is speculation with a time horizon. Guaranteed loss unless the bond becomes more risky. It has no place in a retirement portfolio.

Vanguard's LifeStrategy funds did that for a long time; the allocations of the funds were merely "neutral points" and they would adjust stock allocation up and down according to a "proprietary quantitative model." I think you misunderstood me a bit. I am not suggesting setting the AA to some formula. MF might of tried to guess at timing in that way. In fact I do not care at all about it other then at the beginning. I let the AA float so to speak. Maintain the original equity $ amount and prune it and build the bond side. To be clear this is only for a dispersement portfolio not an accumulation portfolio. I do make a distinction here. Harvesting to secure future income rather than maintain a fix AA to protect the growth....

I am more inclined to a dynamic

I believe the "lower for longer" returns that most of the major investment firms are subscribing to now do come from some form of mean revision of the CAPE index. The last I saw from Vanguard was somewhere around 4-4.5% on a moderate risk and 5-5.5% on hi-risk for total return. Vanguard uses a private model of the CAPE though. I have see some predictions even lower from other companies. The mantra is "lower for long" across the board though.

For me, it comes down to if I believe strongly in its predictive power in CAPE in a QE, NIRP or ZIRP world.

I don't well at least not the "longer" part.

My unqualified 2 cents worth: I have always considered John Maudlin a perma bear due mainly to massive unsustainable sovereign debt issues. "The sword of Damocles" investment strategy might be a better description he is proposing. Most of the major developed world has a 10 yr rate at or below 0 with all (I think) have effect rates near 0 or less. I think that is common knowledge now. At this point a bond investment is looking a lot like the greater fool philosophy of trading. I think the fool philosophy has one big problem, eventually you run out of buyers/fools ("A fool and his money ..."). So what do you do to counter equity risk ... go down the curve and buy your favorite dictators, Frontier or EM sovereign debt. Mayb...