Search found 531 matches

by abc132
Thu Jan 07, 2021 8:20 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

1. Direct statement in thread from Boglehead: "I invest in them to beat the market" 2. abc132 - "People invest in factors to beat the market" The phrase “I invest in them to beat the market" appears nowhere in this thread. And if it HAD, wouldn’t that make my explanation ev...
by abc132
Thu Jan 07, 2021 6:47 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

Instead of trolling me, why not engage with the content of the posts to which you are replying? Conversation is two-way, and you share responsibility here. The entire derail was a response to your statements and inability to combine two simple things: 1. Direct statement in thread from Boglehead: &...
by abc132
Thu Jan 07, 2021 6:32 pm
Forum: Investing - Theory, News & General
Topic: What is the "Quit when you won the game" portfolio?
Replies: 177
Views: 18084

Re: What is the "Quit when you won the game" portfolio?

70% Stocks/bonds: Anything 30/70 to 70/30
20% Other stuff: cash, gold, crypto, collectibles, etc
10% Moonshot: individual companies, private company, etc
by abc132
Thu Jan 07, 2021 5:06 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

To be clear, I'm not interested or engaged in your definition <of beating the market>. That's not at all clear, given how many times you've responded to my comments in this thread. It should be based on my multiple comments of simply repeating a direct quote. It looks like you still don't get it - ...
by abc132
Thu Jan 07, 2021 3:09 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

Whether there are some investors who say that they can "beat the market" is irrelevant to my argument. My argument is that investors can't ACTUALLY expect to beat the market, on average over the long run, using any reasonable definition of the phrase "beat the market" but that i...
by abc132
Thu Jan 07, 2021 2:05 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

Many people are also immune to reason. There is direct proof of that in this thread. You might be confusing lack of reasoning with knowing to what degree that reasoning matters. People disagreeing with your reasoning is not the same thing as being immune to reason. While we can try to construct a b...
by abc132
Thu Jan 07, 2021 1:16 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

Nowhere in the prospectus for Vanguard S&P Small-Cap 600 Value ETF (VIOV) is there any mention of "beating the market". In fact, the prospectus explicitly states that this ETF (as an index fund) " attempts to track—rather than outperform—a specified market benchmark, or “index&qu...
by abc132
Thu Jan 07, 2021 1:06 pm
Forum: Investing - Theory, News & General
Topic: If we cannot predict future and if past results are not a reliable predictor of future...
Replies: 68
Views: 4555

Re: If we cannot predict future and if past results are not a reliable predictor of future...

And how will you know which asset is better for you if you don't look at their past? One thing you can look do is look at what each asset guarantees and how much it can grow. You will get a much different answer for stocks and bonds. A better way to frame this is the future will look something like...
by abc132
Wed Jan 06, 2021 2:04 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

So much semantics in this thread on past performance. Quite simply, Taylor can guarantee a certain performance every year with his portfolio, based on past performance: that it will exactly track the market as a whole, perfectly correlating to a chosen asset allocation. No other investment strategy...
by abc132
Wed Jan 06, 2021 1:38 pm
Forum: Investing - Theory, News & General
Topic: Why 5-10% rebalancing bands?
Replies: 15
Views: 1035

Re: Why 5-10% rebalancing bands?

I like to think of what triggers a particular portfolio to rebalance. How a given rebalancing band behaves actually depend on the asset allocation, meaning one portfolio might rebalance with a 20% stock drop, and one might not using the exact same rebalancing rule. Because the commonly used 5/25 etc...
by abc132
Tue Jan 05, 2021 3:17 pm
Forum: Personal Investments
Topic: RMD @ 72 seems quite high according to calculator
Replies: 182
Views: 10907

Re: RMD @ 72 seems quite high according to calculator

Prior to this thread, I was under the assumption that I would be pulling money from Roth, taxable, and tax deferred in various amounts to control each years tax bracket. (Age 59.5 - 70) This thread has helped me think more long term not just about the potential for RMD's from current actions, but al...
by abc132
Tue Jan 05, 2021 3:03 pm
Forum: Personal Investments
Topic: RMD @ 72 seems quite high according to calculator
Replies: 182
Views: 10907

Re: RMD @ 72 seems quite high according to calculator

Yeah, I posted a number 6), but endured a great beating for it (some folks just didn't understand the intent). Rather than take on more personal risk, I'll refer you to my earlier posts in the thread. :D I moved you up to #5 as one of the options. In my opinion, that is certainly worth considering....
by abc132
Tue Jan 05, 2021 2:04 am
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

@OP: I can extend your line of argument to Bitcoin too. BTC seems to have done well. To borrow your words, since 2009 BTC “beat the favorite benchmarks of gurus like Jack Bogle and Warren Buffet as well as Buffet's own Berkshire Hathaway”. It also beat SCV and International. So why not BTC then? :s...
by abc132
Mon Jan 04, 2021 9:16 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: "Lies, Damn Lies and Statistics"

Communication is what is received, not what you intended. Yes, and? You think we should avoid posting interesting information because a predictable number of people will misinterpret and/or misrepresent it? I don't think that. I would recommend 1. Go ahead and take on that tone, but don't blame oth...
by abc132
Mon Jan 04, 2021 7:53 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: "Lies, Damn Lies and Statistics"

Bogleheads: This thread is a reminder of this quote popularized by Mark Twain: There are three kinds of lies: Lies, damned lies, and statistics. Running tally..... Confirmation Bias: 5 Actual point of OP: 3 Communication is what is received, not what you intended. The result is indeed predictable, ...
by abc132
Mon Jan 04, 2021 7:52 pm
Forum: Investing - Theory, News & General
Topic: Guess what beat Bogle and Buffet since 2001? SCV and International
Replies: 119
Views: 8967

Re: Guess what beat Bogle and Buffet since 2001? SCV and International

This post reminds me of some of the worst click bate articles.

It would have been much better framed as - diversification - the only free lunch, with an actual message.
by abc132
Mon Jan 04, 2021 4:46 pm
Forum: Personal Investments
Topic: RMD @ 72 seems quite high according to calculator
Replies: 182
Views: 10907

Re: RMD @ 72 seems quite high according to calculator

Is this Schwab calculator is off by one year? When I put my MIL's DOB and 2020 ending IRA balance in, it calculates the RMD as if she were born one year later (i.e. one year younger). To confirm, I used the Fidelity calculator for her account to calculate the RMD she needs to take before the end of...
by abc132
Sun Jan 03, 2021 11:11 pm
Forum: Personal Investments
Topic: Negative real return for BND?
Replies: 157
Views: 11333

Re: Negative real return for BND?

For those providing the long detailed explanations about bonds, do you mind sharing what you are actually doing based on your extensive research and knowledge, and whether you are near retirement or not? Thanks! I am 40+ and starting to pursue assets other than stocks, so I'm adding I-Bonds and EE-...
by abc132
Sun Jan 03, 2021 10:52 pm
Forum: Personal Investments
Topic: RMD @ 72 seems quite high according to calculator
Replies: 182
Views: 10907

Re: RMD @ 72 seems quite high according to calculator

This has been a helpful thread. Thanks to everyone that contributed. 1) Convert tax-deferred money to Roth (fill tax bracket or retire early) 2) Spend down tax-deferred accounts before age 72 3) Invest tax-deferred money in lower returning assets (FI, etc) to slow it's growth, and higher returning a...
by abc132
Sun Jan 03, 2021 7:34 pm
Forum: Personal Investments
Topic: Negative real return for BND?
Replies: 157
Views: 11333

Re: Negative real return for BND?

I'm just bummed that the current market gives me a 2.8% withdrawal rate. (62 years, about 75/25 alloc). 75 bonds/25 stocks? Or, other way around? Other way around. 75% stocks / 25% bonds. See math below (my numbers were slightly different for reasons not relevant to the question). Stock Return = 1/...
by abc132
Sun Jan 03, 2021 7:18 pm
Forum: Personal Investments
Topic: Negative real return for BND?
Replies: 157
Views: 11333

Re: Negative real return for BND?

Jack Bogle once or twice mentioned selecting an AA and staying the course. Have we forgotten that? Despite what some seem to have inferred from my posts indicating that the bond market is clearly expecting real losses for bonds over the next decade, I'm not recommending that anyone change their AA ...
by abc132
Sun Jan 03, 2021 6:11 pm
Forum: Personal Investments
Topic: Negative real return for BND?
Replies: 157
Views: 11333

Re: Negative real return for BND?

Jack Bogle once or twice mentioned selecting an AA and staying the course. Have we forgotten that? Yes, I think some people get stuck at negative real returns, and while Bogleheads are practiced at telling people to stay in the market, I don't think Bogleheads have had the same level of advice and ...
by abc132
Sun Jan 03, 2021 5:42 pm
Forum: Personal Investments
Topic: Negative real return for BND?
Replies: 157
Views: 11333

Re: Negative real return for BND?

Has anyone considered looking at what bonds do to a portfolio as a whole instead of just looking at expected bond real returns in a vacuum? Assuming 3% real returns for stocks (1/CAPE10 of 33.4) and 18% standard deviation for stocks: Stocks have a 3/4 chance of going below their current real value s...
by abc132
Sat Jan 02, 2021 3:11 pm
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

Random has multiple definitions. Here is the first one, most common usage, specifically applied to statistics. STATISTICS governed by or involving equal chances for each item. "a random sample of 100 households". I understand what random means and that it can be used to mean multiple thin...
by abc132
Sat Jan 02, 2021 3:02 pm
Forum: Personal Investments
Topic: Tried to Time - lol
Replies: 85
Views: 9525

Re: Tried to Time - lol

The problem with jumping in and out of the market is that stocks have had a positive overall return, meaning the probability of going up is higher than going down. This is complicated by the fact that markets are influenced by government actions, and that the short term market is people's reaction t...
by abc132
Fri Jan 01, 2021 12:46 am
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

Random has multiple definitions. Here is the first one, most common usage, specifically applied to statistics. STATISTICS governed by or involving equal chances for each item. "a random sample of 100 households". I understand what random means and that it can be used to mean multiple thin...
by abc132
Thu Dec 31, 2020 9:41 pm
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

Check out the original link showing the graph of 1 year returns vs 10 year returns. The word lumpy refers to the fact that the 10 year returns do not fit on the curve that would be expected if year to year returns were independent of each other. The third graph shows this. In the example I referenc...
by abc132
Thu Dec 31, 2020 9:32 pm
Forum: Investing - Theory, News & General
Topic: I have a question about this article on rebalancing.
Replies: 14
Views: 804

Re: I have a question about this article on rebalancing.

Selling 8000 stocks and buying 8000 bonds gets you back to 60% stocks and 40% bonds, 60000*1.38 + 40000*0.98 = 118,400 balance at the end of the year. 79200 stocks + 39200 bonds = 118,400 After selling $8000 in stocks and buying $8000 in bonds: 71200 /118400 = 0.60 = 60% stocks 47200 /118400 = 0.40 ...
by abc132
Thu Dec 31, 2020 3:40 pm
Forum: Investing - Theory, News & General
Topic: 2020 - The year of the active fund?
Replies: 9
Views: 827

Re: 2020 - The year of the active fund?

I'm guessing that the reality is the big funds are stuck in their positions due to their prospectus, and have trouble quickly changing positions without large consequences, such as selling at the bottom. I would be interested in how smaller, closed funds with more investment flexibility performed. I...
by abc132
Thu Dec 31, 2020 3:13 pm
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

I would use the word probabilistic instead of random, so that is the source of my confusion. Sure but in the random process literature "random" and "stochastic" are often used interchangeably. In other words, random process is the same as stochastic process. Probabilistic implie...
by abc132
Thu Dec 31, 2020 2:47 pm
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

HasHas wrote: Thu Dec 31, 2020 9:51 am I think your confusion is between randomness and independence (and not randomness and uniformity). Don't equate randomness to independence.
Thanks!

I would use the word probabilistic instead of random, so that is the source of my confusion.
by abc132
Thu Dec 31, 2020 3:45 am
Forum: Investing - Theory, News & General
Topic: A bond rule of thumb better than "age in bonds"
Replies: 160
Views: 12684

Re: A bond rule of thumb better than "age in bonds"

I read the OP and some posts after but not the entire thread, so sorry if I'm repeating anything. The issue I have with this, from a life cycle perspective, is you are buying only stocks for 10-20 years, depending when you start working and saving, and then after 40 you on average are buying mostly...
by abc132
Thu Dec 31, 2020 3:08 am
Forum: Investing - Theory, News & General
Topic: A bond rule of thumb better than "age in bonds"
Replies: 160
Views: 12684

Re: A bond rule of thumb better than "age in bonds"

These results are very close to what I have gotten in my own simulations. Well done! I really like the graph with the optimal path. I'm at 70/25/5 stock/bond/cash at 35x needed/current expenses, but 23x desired retirement expenses, which puts me right in the 23% to 35% range you would suggest. I'm y...
by abc132
Thu Dec 31, 2020 2:08 am
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

The fact that 10 year returns are very "lumpy" implies that stock returns are not completely random. Be careful not to equate "random" with having a uniform distribution. If I have an unfair coin that when tossed has a 99% chance of coming up heads and a 1% chance of coming up t...
by abc132
Thu Dec 31, 2020 12:06 am
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

I am sorry but there appears to be a misconception about what we mean by random (or random process in this context). Note that a random process can very well have patterns. Think of a sine function and then add some random noise to it. It will give you a noisy sine function (modeling boom and bust ...
by abc132
Wed Dec 30, 2020 3:57 pm
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

The visual impression is strong. The problem is that annualized average return are not what we experience when we hold for periods of many years. Compounding happens. If we are interested in numbers of dollars, the chart needs to be recalculated this way: https://imgur.com/w955FMz.png I'd be really...
by abc132
Wed Dec 30, 2020 2:22 pm
Forum: Investing - Theory, News & General
Topic: What are the biggest mistakes new investors should avoid?
Replies: 24
Views: 1169

Re: What are the biggest mistakes new investors should avoid?

Trying to come up with a perfect plan, leading potentially to lifelong investing mistakes.

Humans often get paralysis in the face of too many decisions.

Pick something simple, make it automatic, and stick with it.

Don't look back.
by abc132
Wed Dec 30, 2020 2:10 pm
Forum: Investing - Theory, News & General
Topic: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process
Replies: 146
Views: 6063

Re: Economists/Statisticians: Justifying Two Assumptions on the Stock Market Random Process

If you look at one year returns, stock prices seem to be normally distributed. If you look at ten year returns, stock prices are not normally distributed. Check out the third chart for ten year distributions. https://klementoninvesting.substack.com/p/the-distribution-of-stock-market The market is no...
by abc132
Wed Dec 30, 2020 1:44 pm
Forum: Investing - Theory, News & General
Topic: Market Timing Failure
Replies: 45
Views: 4177

Re: Market Timing Failure

The good news is that this mistake won't matter in the long run, as long as you can figure out how to stay in the market in the future. Your additions over time will determine most of your success if you develop a better plan. The two main strategies are 1. Take yourself completely out of the equati...
by abc132
Wed Dec 30, 2020 1:27 pm
Forum: Investing - Theory, News & General
Topic: 2020 Rebalancing with 5/25 Rule
Replies: 4
Views: 786

Re: 2020 Rebalancing with 5/25 Rule

Plenty of articles out there on the elusive "rebalancing bonus". Sometimes you get it, sometimes you don't, but most studies have shown that over long periods of time there is very little difference between rebalancing bands of most any type and simple calendar based rebalancing. That sai...
by abc132
Wed Dec 30, 2020 1:14 pm
Forum: Investing - Theory, News & General
Topic: 2020 Rebalancing with 5/25 Rule
Replies: 4
Views: 786

Re: 2020 Rebalancing with 5/25 Rule

2020 was a great year for rebalancing because, well, it was a great year for everything. Both stocks and bonds had bull markets bigly (little cost to reducing allocation to the larger) and the bear was extremely short lived (little cost to buy in "too soon" to the bear). I fully agree wit...
by abc132
Wed Dec 30, 2020 2:56 am
Forum: Investing - Theory, News & General
Topic: 2020 Rebalancing with 5/25 Rule
Replies: 4
Views: 786

2020 Rebalancing with 5/25 Rule

Rebalancing and buying on the dip have been topics for 2020. I wanted to take a look at rebalancing. I used the 5/25 rebalancing rule, which states that we want to rebalance when an asset as a percentage of our portfolio changes by 5%, or when the relative value of an assets changes by 25% (whicheve...
by abc132
Mon Dec 28, 2020 3:51 pm
Forum: Personal Investments
Topic: Simple Inheritance questions
Replies: 18
Views: 2211

Re: Simple Inheritance questions

https://www.nerdwallet.com/blog/taxes/inheritance-tax/ I don't think you generally have to pay taxes on the initial inheritance. I believe your tax basis would be the amount you inherit, regardless of the gains it had, so it's only taxes from growth after the inheritance that an inherited IRA help w...
by abc132
Sun Dec 27, 2020 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Pay Off Our Mortgage or Invest Heavily?
Replies: 51
Views: 5456

Re: Pay Off Our Mortgage or Invest Heavily?

I would open up an investment account and pay extra on the monthly mortgage payment (assuming you can actually pay it off early without penalty), with at least as much money going to the investment account as paying extra on the mortgage. When you end up with enough to pay the house off completely, ...
by abc132
Sun Dec 27, 2020 6:19 pm
Forum: Personal Finance (Not Investing)
Topic: 2020: Lessons learned
Replies: 237
Views: 15666

Re: 2020: Lessons learned

I Bond & EE Bond for the win!

Funny enough, I found some pamphlets on them from 1994 while trying to find my Roth contributions over the years.
by abc132
Sun Dec 27, 2020 4:39 pm
Forum: Investing - Theory, News & General
Topic: Is it better to invest more after a dip?
Replies: 196
Views: 10826

Re: Is it better to invest more after a dip?

Interesting thread. Most of the benefit of buying on the dip seems to be psychological. We had a pretty stable bull run (dips in 2018 and 2020 come to mind), and some of the people that benefitted a bit from rebalancing in 2020 keep talking about a rebalancing bonus - without going through the math ...
by abc132
Thu Dec 24, 2020 9:20 pm
Forum: Investing - Theory, News & General
Topic: 7% return in the markets
Replies: 120
Views: 13635

Re: 7% return in the markets

I would encourage you to look at how stock returns are distributed. Check out the 3rd graph showing 10 year returns in the link below. You don't get the average over each 10 year period, you get sequences of good returns, sequences of bad returns, and mixed return periods. You don't need to worry ab...
by abc132
Thu Dec 24, 2020 5:47 pm
Forum: Personal Investments
Topic: Where to park short term (< under 5 years) cash?
Replies: 9
Views: 844

Re: Where right now, to park < 5 year cash?

I would look into either I-bond, or the Ally raise a rate 2 year CD at 0.6%.

I think your Capital-One is at 0.3%.
by abc132
Thu Dec 24, 2020 5:06 pm
Forum: Investing - Theory, News & General
Topic: Shorten Bond Duration Now/Reduce Interest Rate Risk?
Replies: 47
Views: 3166

Re: Shorten Bond Duration Now/Reduce Interest Rate Risk?

I'm not a bond guru, but I would think the main issue is that the bonds with a 5 year duration are likely still getting better coupon rates. I personally wouldn't be too worried about 5 year vs 2 year duration. The coupon rate on the short term treasury is 1.2% vs intermediate coupon rate of 1.8%. ...
by abc132
Thu Dec 24, 2020 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: Too much in house and retirement. Worried about skew
Replies: 90
Views: 7341

Re: Too much in house and retirement. Worried about skew

I would make a 5 year plan, and figure out where you want to allocate resources over the next 5 years. I wouldn't make any major life changes, as you aren't that far from FIRE'ing. I would be shooting for something around 1 million in taxable and home paid off before FIRE, in additional to continuin...