Search found 310 matches

by abc132
Mon Dec 02, 2019 1:48 am
Forum: Personal Investments
Topic: Isn't it a bad idea to have everything in equity I thought?
Replies: 58
Views: 5138

Re: Isn't it a bad idea to have everything in equity I thought?

I invested in 100% stocks through both the 2000 and 2008 crashes. The result of taking on that risk is going to be early retirement, and/or doing things I would not have been able to do with a more conservative portfolio. The reality is that the 2000 crash had almost no effect on my long term result...
by abc132
Mon Oct 14, 2019 10:36 am
Forum: Investing - Theory, News & General
Topic: Vanguard: the case for global equity investing
Replies: 160
Views: 13207

Re: Vanguard: the case for global equity investing

A portfolio of 100% stocks may benefit more from international than a portfolio of 50% stocks and 50% bonds. Similarly, if you are invested in gold and/or fine art and/or alternatives, the additional diversification may have less benefit. The additional diversification benefit diminishes the more di...
by abc132
Mon Oct 14, 2019 10:16 am
Forum: Investing - Theory, News & General
Topic: Vanguard: the case for global equity investing
Replies: 160
Views: 13207

Re: Vanguard: the case for global equity investing

The case for international is the expected gain of diversification, along with the hope of short term out performance. The case against international is the additional costs, along with the past under performance. The starting point is to develop a "good enough" portfolio. US Perspective: Starting w...
by abc132
Thu Aug 22, 2019 10:13 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Minimization of maximum regret is not an investing goal. Of course it is. Emotions and being able to sleep at night are part of investing. I am operating under the idea that minimizing regret will not be a requirement for sleeping at night and recognizing emotions, especially if doing so doesn't me...
by abc132
Thu Aug 22, 2019 9:43 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

An example of how you could combine Monte Carlo as a forecasting tool with some quantitative decision tools: We're evaluating five AA options ranging from 100% stocks to 100% bonds. We'll start with the Monte Carlo Simulation (MCS) tool at Portfolio Visualizer and enter the following to examine for...
by abc132
Thu Aug 22, 2019 2:06 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Minimization of maximum regret is not an investing goal. Emotional investing should not be encouraged. Emotions should be recognized, but they should be discouraged from dominating our investing decisions. Well said. The most successful investors can block out any emotions. I'm glad someone found v...
by abc132
Wed Aug 21, 2019 2:49 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

How is "minimization of maximum regret" different than "income preservation"? Once you get to a certain stage of accumulation, preserving what you have becomes more important than seeking additional gains. Am I missing something, or is this a different way of talking about the same thing? Personall...
by abc132
Wed Aug 21, 2019 2:43 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Again the “rational” investor should ignore both “volatility” and “regret”. Understanding both is still useful. Know thy enemy and all that. That is consistent with what I have recommended, other than a correction that the rational investor should be concerned about volatility during withdrawals, b...
by abc132
Wed Aug 21, 2019 2:29 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

I think in the terms of “regret” optimization it is also very important to consider the opposite extreme. If the thread was about regret optimization, there would be far more agreement from me. It was about minimization of regret as a way to pick AA, not regret optimization. Optimization of (succes...
by abc132
Wed Aug 21, 2019 2:15 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Please everyone stop being sloppy with terms. - “Minimax/Maxmini” is a completely separate term from “regret”. “Minimax/maxmini” is an optimization method that can be applied to a variety of parameters. “Regret” is a particularly defined parameter that can be optimized a variety of ways. - In fact ...
by abc132
Wed Aug 21, 2019 11:59 am
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Immediately, the theories assumptions fail on me. The definition of regret, although mathematically defined here, does attempt to capture or reflect a more common and prevailing subjective sentiment. I acknowledge its true for many. But it's certain fails for individuals like myself. That makes com...
by abc132
Wed Aug 21, 2019 10:39 am
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

It's important to note the rubric assumes bonds have to go up 6% when stocks go down 20%, and the result is only as good as the assumptions about the future. 1931 Stocks -43.84% Bonds -2.56% 1941 Stocks -12.77% Bonds -2.02% 1969 Stocks -8.24% Bonds -5.01% Can anyone put in real numbers that give an...
by abc132
Tue Aug 20, 2019 1:19 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Excellent demonstration. It's important to note as well that while an investor could use backtested data, as you have done and I did in the OP, to determine which AA satisfies the minimax heuristic, this is not necessary. The only purpose of such backtesting would be for an investor to form a notio...
by abc132
Tue Aug 20, 2019 9:31 am
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

That's illustrative, but we still need to employ that information to make an allocation decision. Three of the most common 1 methodologies are: MaxiMax : Pick whichever allocation has the highest final value under any of the scenarios. Downside risk doesn't matter, so S++ wins. MaxiMin : Each alloc...
by abc132
Mon Aug 19, 2019 9:39 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

This I believe is why I have stayed the course with my admittedly not optimized or fully diversified portfolio allocation of the S&P 500 and enough cash to sleep at night (AKA the Warren Buffett portfolio). It’s not so much a home bias or anti international stance or even recency bias as many would...
by abc132
Mon Aug 19, 2019 9:28 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

I don't believe that I've ever seen a serious post on this forum advising people to just do what makes them feel good. However, I do see many posts by many seasoned investing veterans regularly cautioning people to not overestimate their risk tolerance. And neither volatility nor maximum drawdown h...
by abc132
Mon Aug 19, 2019 3:07 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

It can be a factor, but it should not be the factor in coming up with a plan. High probability of reaching goals should certainly trump minimizing regret. Because most investors are not robots, for some people minimizing regret may play an integral role in increasing the probability of them reachin...
by abc132
Mon Aug 19, 2019 1:33 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Minimization of maximum regret is not an investing goal. Emotional investing should not be encouraged. Emotions should be recognized, but they should be discouraged from dominating our investing decisions. I was referred to the book "Passions within Reason: The Strategic Role of the Emotions", by R...
by abc132
Mon Aug 19, 2019 1:25 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

I'm not espousing that investors should seek to minimize their maximum regret, rather, that some investors do . And research seems to indicate that some do. If that's the case, whats the purpose of the thread? You just asked and answered your own question. Also, when you come up with what is action...
by abc132
Mon Aug 19, 2019 1:21 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

It would seem to me and many others to be very reasonable not to put 100% of one's equity exposure into SCV. Even Paul Merriman, lauded as one of the big SCV proponents, typically recommends portfolios that it only comprise 25% of one's domestic equity exposure, although he has argued that it may b...
by abc132
Sat Aug 17, 2019 11:53 pm
Forum: Personal Investments
Topic: Don’t put new money in market right now??
Replies: 59
Views: 7977

Re: Don’t put new money in market right now??

If you have doubts, I would make sure you have a big enough emergency fund, make sure your current portfolio still meets your long term goals, and then continue investing. Another option would be to take a look at your budget and think about how you can trim some fat to cut expenses. Lastly, if you ...
by abc132
Sat Aug 17, 2019 2:56 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

The big problem with this analysis is that the time periods I looked at all had relatively high real interest rates. That tailwind to the bond-heavier portfolio doesn't exist today forward. The big problem is we don't know in advance what portfolio will do what, so back testing for what have been o...
by abc132
Sat Aug 17, 2019 2:27 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

I'm not espousing that investors should seek to minimize their maximum regret, rather, that some investors do . And research seems to indicate that some do. If that's the case, whats the purpose of the thread? You just asked and answered your own question. Also, when you come up with what is action...
by abc132
Sat Aug 17, 2019 2:01 pm
Forum: Investing - Theory, News & General
Topic: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?
Replies: 129
Views: 7662

Re: Minimization of maximum regret: Supportive of balanced AAs for some long-term investors?

Minimization of maximum regret is not an investing goal.

Emotional investing should not be encouraged.

Emotions should be recognized, but they should be discouraged from dominating our investing decisions.
by abc132
Sat Aug 17, 2019 1:34 am
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

Far too often, some of Bogle's statements are treated like dogma by many. I think you are inventing problems here. People blindly following Bogle's advice is hardly a problem - they could do much worse on their own, or even with a paid adviser. Understanding the wisdom of the Boglehead philosophy s...
by abc132
Fri Aug 16, 2019 12:12 am
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

I’m just pointing out the inconsistency that is so common among factor skeptics—they are not skeptical at all about the equity premium. That certainly appears to be inconsistent to me as well. Do they believe that theory supports the equity premium but no other premia? Is it because we have a longe...
by abc132
Thu Aug 15, 2019 9:19 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

I’m just pointing out the inconsistency that is so common among factor skeptics—they are not skeptical at all about the equity premium. I think they hold bonds for that very reason. If anything they are too skeptical of this premium, and tend towards too many bonds. Where exactly did you get this i...
by abc132
Thu Aug 15, 2019 11:59 am
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

Cherry picking what factor and what market will almost always show out performance. Some of you are doing a disservice to the actual reasons for picking SCV by doing what could be done for any asset - cherry picking a time period and or country where returns look good. I feel bad for Dave, who has m...
by abc132
Wed Aug 14, 2019 11:53 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

I like Bogleheads. But with all due respect their continued infatuation with Total Stock Market Index after 30 years of underperformance relative to long term treasuries from 1982-2012 reminds me of the description of people getting married for third or fourth time, a triumph of hope over experienc...
by abc132
Wed Aug 14, 2019 11:38 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

To those who appear to believe that I said Warren Buffett endorsed SCV, please re-read what I actually wrote. Risk is a multi-faceted issue, and it certainly goes much farther than just volatility; that's why Warren Buffett has said that he views bonds as riskier than stocks. Volatility is primaril...
by abc132
Wed Aug 14, 2019 9:49 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

abuss368 wrote:
Wed Aug 14, 2019 9:32 pm
Warren Buffett has said it best a couple of index funds is all that is needed. S&P 500 and Treasuries. Other asset classes flow in and out of favor.
Buffett reference was an odd choice for arguing for small caps, which Buffett didn't think you needed.
by abc132
Wed Aug 14, 2019 9:20 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

If we view risk in terms of either at least matching inflation over a given period or providing investors with the returns needed to achieve their goals, then over the history of our data on SCV, it's been significantly less risky than TSM. For instance, TSM had negative real returns in the 1970s a...
by abc132
Wed Aug 14, 2019 8:48 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

If we view risk in terms of either at least matching inflation over a given period or providing investors with the returns needed to achieve their goals, then over the history of our data on SCV, it's been significantly less risky than TSM. For instance, TSM had negative real returns in the 1970s a...
by abc132
Wed Aug 14, 2019 7:33 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

If we view risk in terms of either at least matching inflation over a given period or providing investors with the returns needed to achieve their goals, then over the history of our data on SCV, it's been significantly less risky than TSM. For instance, TSM had negative real returns in the 1970s a...
by abc132
Wed Aug 14, 2019 3:28 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

willthrill81 wrote:
Wed Aug 14, 2019 3:18 pm
My statement is based on Portfolio Visualizer's asset class [url=https://www.portfoliovisualizer.com/bac ... allocation?
You missed a very important word, average, in your original statement.
by abc132
Wed Aug 14, 2019 1:34 pm
Forum: Investing - Theory, News & General
Topic: Confused, bummed, and concerned
Replies: 74
Views: 10996

Re: Confused, bummed, and concerned

Lower expected returns means you can buy stocks for cheaper over an extended period - this is good for you, even if the market drops 30%. If you can learn to invest when the market is down, or doing poorly, you will be very likely to be successful in the long term. What better option do you have tha...
by abc132
Wed Aug 14, 2019 12:51 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29458

Re: Larry Swedroe: Small Value Stocks are Cheap

Total Market funds are an excellent strategy. Taylor has previously provided links for academic studies that were beneficial and educational. The future could look very different from the past, but SCV has had better rolling returns than TSM over the last 47+ years in 1, 3, 5, 7, 10, and 15 year pe...
by abc132
Mon Aug 12, 2019 12:53 am
Forum: Investing - Theory, News & General
Topic: Warren Buffett and Bonds
Replies: 18
Views: 2159

Re: Warren Buffett and Bonds

I was reading Warren Buffett’s 2018 letter to shareholders, and he made the comment below. Is Buffett opposed to bonds? How should an investor in the Three-Fund Portfolio interpret this? Bonds can be risky too "It is a terrible mistake for investors with long-term horizons – among them, pension fun...
by abc132
Thu Aug 08, 2019 1:29 am
Forum: Investing - Theory, News & General
Topic: Why Mr. Bogle prefers U.S stocks
Replies: 241
Views: 20000

Re: Why Mr. Bogle prefers U.S stocks

There seems to be way too much analysis as if you are comparing two single things, instead of what they do to a portfolio. A well designed portfolio looks at the effect to the portfolio as a whole. Is there some link to send people to when they fall to this error of discussing A vs B when a mix of A...
by abc132
Mon Aug 05, 2019 12:40 pm
Forum: Personal Finance (Not Investing)
Topic: Financial anxiety and next steps in relationship
Replies: 102
Views: 8089

Re: Financial anxiety and next steps in relationship

Hello – I have a rather complex situation and would appreciate any comments from the BH community that might ease (or validate) my financial anxiety: My gf and I have been together three years, and it’s time to take the next steps in our relationship (i.e. marriage). Our financial situations are cu...
by abc132
Sun Aug 04, 2019 10:28 pm
Forum: Investing - Theory, News & General
Topic: Why Mr. Bogle prefers U.S stocks
Replies: 241
Views: 20000

Re: Why Mr. Bogle prefers U.S stocks

Finally I want to make clear that I understand the reasonable arguments put forward by those who invest in international stocks. The reason these debates often get animated is due to the international investing crowd often characterizing U.S. only as simply a 'bias' or short sighed viewpoint. There...
by abc132
Sun Aug 04, 2019 1:17 am
Forum: Investing - Theory, News & General
Topic: Why Mr. Bogle prefers U.S stocks
Replies: 241
Views: 20000

Re: Why Mr. Bogle prefers U.S stocks

Here's an interview with Bogle just last year where he explained how the US is a global economy and why he didn't think the added risk of international investing is worth it: https://www.youtube.com/watch?v=P54trh0Rre8 Bogle was a very humble person and, when discussing his aversion to non-US stock...
by abc132
Sat Aug 03, 2019 5:34 pm
Forum: Investing - Theory, News & General
Topic: Why Mr. Bogle prefers U.S stocks
Replies: 241
Views: 20000

Re: Why Mr. Bogle prefers U.S stocks

The starting point should be that none of us know which asset class will outperform in the next 5, 10, or 20 years. If we have seen a history that has 20 years of international outperformance, we can't casually use a recent period of US outperformance to neglect what could happen for the next 20 yea...
by abc132
Thu Aug 01, 2019 7:13 pm
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 436
Views: 62552

Re: Why go with an 80% stock / 20% bond portfolio?

Having accumulated with 100% stocks in the longest bull market in history, I would consider being able to take those returns and going to 80/20 a bonus. The reason why is that those past returns are already captured and no longer carry any risk, and that the 20% bonds may provide more of what the i...
by abc132
Thu Aug 01, 2019 7:01 pm
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 436
Views: 62552

Re: Why go with an 80% stock / 20% bond portfolio?

Having accumulated with 100% stocks in the longest bull market in history, I would consider being able to take those returns and going to 80/20 a bonus. The reason why is that those past returns are already captured and no longer carry any risk, and that the 20% bonds may provide more of what the i...
by abc132
Thu Aug 01, 2019 11:12 am
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 436
Views: 62552

Re: Why go with an 80% stock / 20% bond portfolio?

Having accumulated with 100% stocks in the longest bull market in history, I would consider being able to take those returns and going to 80/20 a bonus. The reason why is that those past returns are already captured and no longer carry any risk, and that the 20% bonds may provide more of what the in...
by abc132
Wed Jul 31, 2019 10:54 pm
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 436
Views: 62552

Re: Why go with an 80% stock / 20% bond portfolio?

If you believe that somehow a person who is interested in investing does not appreciate the risk-return trade-off, then I can't help you. If you think everyone interested in investing makes appropriate risk vs reward decisions, I can't help you. I never made such a claim. I think you need to clarif...
by abc132
Wed Jul 31, 2019 10:38 pm
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 436
Views: 62552

Re: Why go with an 80% stock / 20% bond portfolio?

If you believe that somehow a person who is interested in investing does not appreciate the risk-return trade-off, then I can't help you. If you think everyone interested in investing makes appropriate risk vs reward decisions, I can't help you. I never made such a claim. I think you need to clarif...
by abc132
Wed Jul 31, 2019 10:26 pm
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 436
Views: 62552

Re: Why go with an 80% stock / 20% bond portfolio?

If you believe that somehow a person who is interested in investing does not appreciate the risk-return trade-off, then I can't help you. If you think everyone interested in investing makes appropriate risk vs reward decisions, I can't help you. I never made such a claim. I think you need to clarif...