Bogleheads.org

The word "any" is too strong and it's wrong. The truth is, some demonstrations of investment behavior are very very convincing. But your point (if you had known where to stop) is fundamental for everybody to understand, without question.

I'm reminded of the many many times here, in this forum, that people will quote some platitude but change one word so that it becomes absurd.

Vulcan wrote: ↑Wed Mar 29, 2023 9:05 pm As is easy to see from this graph, bonds and t-bills have experienced multidecade periods of negative real returns in the past century.

Unfortunately those bills seem to be forming a nice consistent weather pattern in the immediate past.

I suppose, though, that does make some sense, as the US was gold standard and then became the world's reserve currency during that. That's just telling us that, maybe.

It is what it is.

If you put a dollar in and it triples and you pay 10% later, it's the same as:
You pay 10% now and then what's left triples and you never pay on capital gains.

$1 x 3 = $3 x 0.9 = $2.70
$1 x 0.9 = $.9 x 3 = $2.70

So the difference between the tax-deferred and roth is this 10% thing. These numbers are not going to be the same. If they are, great. Some people can't understand tax brackets, but if you do understand them, just know that the contributions are coming off the TOP and the redemptions are income starting at the BOTTOM.

In taxable, you have less in our super simple examples.
$1 x 0.9 = $.9 x 3 = $2.70, minus capital gains taxes $1.80 x 0.1 = $0.18, $2.70 - .18 = $2.52

Best not to make it too complicated.

People who advocate a "dividend strategy" are usually talking about having a basket of companies with a stock price set by traders at maybe 20X or 25X the dividend. That's not really what you're talking about. You're talking about where to find "measures of quality" or maybe more specifically measures of the absence of 'bad actor' risk. I'm not really very expert on quality, so my opinion on this as a measure of quality is probably not worth much.

The Prius is very very durable, and it might be a little safer than the next size down Fit and Yaris and Versa. The Fit and Yaris will be cheaper than a Prius, I think. They will last pretty much forever, so mileage is not a concern, really. I mean, within reason. If it breaks, you'll need to fix it.

You can buy a Nissan Versa brand new for a little over the price you are looking at. These are probably not quite as good as the Fit and Yaris, but I'm not sure even of that.

It's all about total cost of ownership, and I'm sure you know that, so there's a lot to consider about trading off gasoline cost and purchase cost.

"with all my worldly goods I thee endow". Boom, end of story. In a millisecond you both own it all. The paperwork takes longer, but it's generally pretty uninteresting. There are a variety of ways to list spouses on titles and deeds which might be convenient, and you may need to do some of that. In my state, on car titles we can be HIM OR HER and then either one of us can sign the title. That's a very minor thing. You may not quite be ready for that day that you realize that the two of you want to spend some money on different things, and you can't both spend it. If you're married to a person of good will, you can dispassionately discuss how these purchases would make you feel, and you can acknowledge that all conflict between peo...

2 years is nothing to a car; there's certainly some benefit to the universe of giving a kid a worthless car to learn on. The hive mind here is certainly going to tell you that kids should have a car with extreme safety features, preferably brand new. There are many very risk averse people. There's some benefit to that, for sure, but there's a cost to it as well.

As a practical car matter, it's fine. It's also fine to get rid of it and look for something else later on. Both fine.

I'm not, but the fact that I'm not sort of started with a whim.

Originally, when I became aware of these funds, I bought some "Absolute Return" PSPTX and some small cap PCKAX. But later I reconsidered and sold off these two. They all might outperform the S&P500 over some reasonable date range, but PSLDX is the only one that is distinct from the S&P500 in an interesting way.

lthenderson wrote: ↑Mon Mar 27, 2023 1:09 pm
I suspect it isn't so much a shortage of handyman rather than a shortage of what people are willing to pay a handyman more or the same as what they could earn doing something else.

This could be an issue, but I sure never have thought it was. Never ever. Rather, I thought that people who are capable of holding down a job just do that. It's just easier. Remember the old joke about the surgeon and the plumber who says "yeah, I didn't make that kind of money when I was a surgeon either."

It also makes me think of the steady drumbeat of investors advocating dividend investing, who are then frequently corrected that it makes zero difference whether a company pays a dividend or not. However, if there's some form of an effective quality screen that a dividend paying company passes, it could be that a dividend strategy is a back pocket way of running a quality approach. I don't think so. I think this idea that dividends "don't make any difference" is not useful. The companies paying dividends don't feel that they have a right to not pay them, due to the growth picture and the company's history of A)actual return on invested capital, and B)believing its own hype or not. To them it's a huge difference . They're giving a...

I don't see how you can talk about asset bubbles and "bad actors" in the same conversation. These are two very different problems. if they're not, you have to narrow the definition of "actors" so that you're not just talking about the wind and the sky and the universe. If you have a way to avoid something, it can't be "everything". It's just not an interesting conversation. Avoiding "everything" is obviously something that we talk about all the time; everybody wants to do it, and many people make it the main focus of their equity investing. Experience has shown that it's not really possible to outgain the market, but if you run some sort of simple moving average strategy on something like SPY, you can...

I see IHG hotels for less than 20,000 points a night occasionally, so they can be worth over a half cent. Maybe 1 cent in the most outrageous case.

I don't care anything about IHG, but they've become the company's first choice. I took the credit card some years ago. The one night per year is worth more than the fee.

That's a really good question. If you are already invested when the asset bubble gets chased, then that becomes a reward rather than a risk. If you have some sort of a floating asset allocation you could compensate for that . It's not wrong. Everybody got soured on that because of the way the last 30 years have gone, when "stocks price have reached a permanently high plateau". It's not wrong to ask how a person *might* compensate. You'll recall I'm sure that there were lots of people on there that had ideas about how to own all the large caps except Tesla, back in 2020 I had mentioned earlier that "value" investing applies here, but there's also such a thing as "quality investing" that gets more to the point. P...

Aisin is primo good. Belts you'll sometimes see are Mitsuboshi (not mitsubish) and they're very good. i wouldn't (and don't) hesitate with a kit including those two.

I don't know how I feel about ageing out a timing belt. I'd probably do it. I'm not above inspecting one and making a call.

For some reason you need "enough" fat in a hamburger. I'm not sure how much that is, but it's not 6%. I am partial to garlic powder on a hamburger. that is something they did at Mike's Grille in Blacksburg VA and I decided that was the best hamburger I ever had. Very simple. We grille with propane but I don't know that it's a good idea. It's just the easiest, really. When I lived in Taiwan, there was a little joint in a little town there that had an extraordinarily good condiment on their burgers, and I think it was mayo and probably tobasco sauce mixed together. I should have asked. It was so good that I have marveled that they didn't do it everywhere. I am a mayo-lettuce-onions-tomato-pickles kind of guy. most places that wrap a...

I've read the wiki page on risk . To keep it simple, I'll focus on one passage: " The amount by which a risky asset is expected to provide a higher rate of return than the risk-free rate is the asset's risk premium (the risk-free rate is the rate of return on a risk-free asset, such as a T-bill). If the risk premium of stocks were zero, then a rational, risk-averse investor would have no incentive to invest in them ." The crux of my question comes down to this. Does the risk premium that an investor in a U.S. Total Market Index Fund purchase by investing in the fund include ALL the risk of holding that fund, including the actions, and the downstream consequences, of unrelated, or even malicious, or negligent, market bad actors an...

A husqvarna is really cheaply made, but you can certainly mow with it. They made the green Craftsman mowers as well. I have had two and just bought a third this afternoon. The second one is fabulously worn out after 777 hours and 10 years. It’s on its third transaxle in that short time, but of course husqvarna doesn’t make that, they just buy it. I have welded on the deck quite a lot. They had a few ugly design problems with the size mower I have, but they sold millions of them and they do address those sometimes. I would have been horribly disappointed if I paid somebody to fix it. Bad enough buying transaxle. You sorta get what you pay for, really. With the “good” brands selling cheapie box store mowers, you don’t have much to go on but p...

stocknoob4111 wrote: ↑Fri Mar 24, 2023 7:59 am I think the $1M figure isn't by itself relevant without considering expenses, current age and other streams like Social Security. Having $500K being 75 with 90% of your expenses covered by SS is very different than $1M retiring at 60 and spending $100K/yr.

Absolutely. without putting it on some sort of years and expenses basis, it's kinda pointless.

I guess I shouldn't be surprised at people seeing "very risky" in section 8 housing, but that seems like that's a great strategy to me.

If the stuff I hold quadrupled overnight, and by some magic there wasn't any related inflation, I might stop investing in stocks.

There's also broad market selling, esp. in international stocks, where quality/defensive businesses sell-off sharply, when they probably shouldn't.. In the UK, with a lot of illiquid Investment Trusts in the indexes, we had things going to 80-90% discounts during the covid panic.. It's obviously hard to prove that isn't the pricing in of legitimate risk – but when liquidity dries up, and people want their money, I wouldn't bank on things being particularly efficient. I don't know why you'd try to argue that. Much better and safer to argue that people are pricing legitimate risk the best they can. Bankruptcy is really a pretty common event. It seems like that should be way more common than, say, a 90% discount caused by inefficiency. That s...

The big hazard is the high cost of having something to buy something with. If you had invested it already, you'd be way ahead. That's the normal outcome.

If you have some reason that you're not 100% equities, then it's pretty easy to come up with a set of rules to shift toward equities based on how far they fall. But again, you need a reason to not be 100% equities that ISN'T "so I can do this". And then you also need to have a reason why that doesn't apply anymore when the market falls a certain amount.

Yes it did. Beautifully timed.

I'll just add too, that people have strange ideas about "risk". When you have a certain loss, it's no longer a risk, and so they think that's okay.

So, for instance: Old motorhome, depreciates $10k while you own it, "risky"
New motorhome, depreciates $100k while you own it, "not risky"

That's a lot of money, but it's certain you're going to lose it, so it's not risky. I like money too much to lose it that way. I'd rather lose it another way.

The primary advantage of a motorhome is that on the road, you're in it. You're not sitting in the truck. That really doesn't help the driver, it just helps everybody else. they are fun on the road. They are ever so slightly easier to park. In every other way, they're disadvantaged vs. other forms of glamping. More expensive, less useful, harder to take care of. FWIW. I love them but I also am glad I don't have one. You should be handy. You need to take care of a medium duty truck and a flimsily built (but with limited accessibility) propane-fired house while you're on the road with a bunch of uninterruptible plans. That's what I think. Of course if the house breaks, you can ignore some of that. If the truck breaks, you're stopped. If you're...

I don't have those arrestors, but I sure don't see how you could go wrong.

I built one and then we bought a Jacuzzi brand. I have not experienced disappointment, and in fact I think merely surviving for more than about 45 minutes at 150 is a concern for me. Both were designed to run on an ordinary 120 volt circuit which would be limited to 15 amps. The jacuzzi It takes about 30 minutes to get over 130 and it'll heat up to the setpoint max of 158 given an hour (don't hold me to this). We have two friends that bought them after we did, and one of them mentioned that he put a piece of foam insulation on the top of his. I think he got the idea from some forum, so there must be such a thing somewhere discussing IR saunas. They leak air and the front is glass. You could make some improvements there if you wanted to. set...

Stef wrote: ↑Wed Mar 22, 2023 1:52 am How do you manage this? Do you even consider this being a real risk?

I can't go where your mind is at all. Not ever.

There are so many real problems to work on, and they're so much more interesting. Plus I waste money all the time. i went into a store that sold candy by the pound and bought a big bag of zots. How lame is that? pretty lame.

I gotta tell you, I don't recall ever seeing an "article" about PSLDX. I can certainly understand that people don't read the prospectus. I don't blame them.

I've run into an interesting (frustrating) issue with my employer's 401k provider, which is Fidelity. Basically, the investment options available to employees have no associated ticker symbols, making it impossible to do any research, track, etc. outside of the Fidelity site. I called Fidelity to ask about this, and got a bit of runaround about how they just administer the plan, don't make decisions, etc... Has anyone else run into this problem or found a workaround? These investments, funds, etc. must have some way to mark them to market and value them. Thanks. Using Fidelity, we have some funds (not many) that the fund managers created, so they don't have tickers and they shouldn't have them. We also have at least one that is "not a...

See part I bolded above. It seems you made a risk assessment and determined job loss was not a risk for you, or at least not a risk you felt the need to insure against. I'm glad this worked out for you, but just because it worked for you doesn't mean it will for someone else. More to the point, in my case, I'd never even heard of it. I claim no process and no success. I never heard anybody use the phrase "emergency fund" until Dave Ramsey, and if I had been thinking I was planning for an emergency, it would never have occurred to me that the emergency in question is a period of unemployment (duration of which obviously I have to predict). I suppose, and I have for a long time, that everybody has to choose his own emergency. I don...

I often hear having an Emergency Fund discussed here and I maintained one my entire working career but now that I am "retired" I didn't think I had one anymore. Then I started thinking about some of the assets I was holding and it seems like a distinction without a difference. So is an emergency fund just an acceptable mental accounting device to allow you to group or allocate short term accessible liquid assets or is it something else? So please tell me what counts as an emergency fund and is a rose by any other name just as sweet? Well, I thought it was for people to get a transmission rebuilt. Then Dave Ramsey started talking about maybe the emergency should be you lost your job, which is probably 10X more money. Clearly, this...

haddock wrote: ↑Mon Mar 20, 2023 12:49 am 1) Vanguard ETF investors "moving" to another non-Vanguard ETF: Is this a risk for the remaining Vanguard ETF investors? In my limited understanding, when someone sells an ETF, someone else buys it.

Not really. It's a mutual fund; the idea being to invest people's money, however many people come. There are vast, enormous inflows and outflows of money to and from mutual funds all the time. To make a fund tradeable during the day, you create a person authorized to create and destroy shares of the fund all day. It's a non event.

Is there a way to calculate the max (or average or total) amperage used by looking at my meter or bill? The bill is the total and obviously also the average, but you really need the max for the thinking in the original thread. That's pretty hard. I think it would fun to get a data logging ammeter and measure it (you can buy these for people that want to figure out where their money is going), but i wouldn't like to size a service based on that. If I was going to size a service, I would probably assume all the water heaters were on simultaneously and the dryer and the oven, and any electric furnaces. The dryer and the oven are under human control, but there's no reason you'd avoid using the oven when the dryer is on. we have a hot tub, so t...

notoriousMG wrote: ↑Sun Mar 19, 2023 11:34 am
Well...this comment has not aged well but then again nobody can really predict the future all that well or none of us would be here

Well, really, they just lost enough money and it took until now. When you lose money, eventually you can lose enough of it that adults make you stop. It takes as long as it takes.

If you're not a bank, there comes a point that the adults won't give you any more money. If you're a bank, it's kinda the opposite.

Good answers. The bonds are tradeable and they're not trading at face value. So the "yield" is just calculated to help people understand it without having to look at what the actual price is. I tried to make that totally jargon-free but I admit "face value" is also jargon.

One of the curiosities of i-bonds is that they aren't tradeable. They're always at face value.

These banks should consider just giving all their assets to the executive team, like FTX did. This whole pretending-to-be-in-business thing is just a yawner.

Right. We would have to predict so much in this case to choose between these two. You could backtest, but option price history is a little bit painful to get. I'm sure somebody has a big pile of data somewhere. Just a basic look at it, let's say today that SPY is about 390 and so a 3X leverage would be a strike price of 260. Time value of that option today, expiring March 15 2024, is $10 a share. So we know for sure we're losing that in a year. This is an inferior position because the leap is price only, where UPRO is based on total return. In a down market, the LEAP leverage is increasing, and in an up market, it's decreasing, so you don't have a very stable situation. In a 33% downturn, you would lose all the equity portion, but in HFEA t...

RANkiDEr wrote: ↑Thu Mar 16, 2023 8:44 am

muffins14 wrote: ↑Thu Mar 16, 2023 8:19 am

RANkiDEr wrote: ↑Thu Mar 16, 2023 8:16 am Hi,

This headline caught my attention this morning.

Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’
https://www.cnbc.com/2023/03/14/moodys- ... nment.html

Do you have a question related to the article and how it may or may not impact your decisions?

All this news has triggered some questions for me.

1.) How does one assess a bank for safety?
2.) Is there a rating agency or company that ranks banks based on safety and other attributes?
3.) Which banks don't put deposits into risky assets?

I just assess whether or not I've got $251,000 dollars in it. That's all I do.

I think this is more of a "net worth" decision than a "net pay" decision. Timing the market is great if you could do it, but obviously we're talking here about timing two markets. In this case I'd want to be ready to buy a house because of offsetting the rent. That tends to make it a bit of a bargain in my way of looking at it.

So the good news is there's no reason to hurry in either market as far as we know. By taking your time, you may not get a better deal, but you can certainly look for a house where you like the intangibles better. I don't know if house prices came down where you are, I hope so. They will certainly go back up eventually. Where I am, they haven't gone down.

I'm sorry, I'm not trying to confuse anybody. I thought everybody in HFEA had lost half their money from the peak, but that's not what I intended to flag as important. Just ignore that comment.

The important thing is that with LEAPS you aren't adjusting leverage every day, so there's no volatility decay at all. Instead, you have theta decay. So once a year, let's say, you have a decision to make about how much volatility decay you're going to accept.

Again, 'what about' is a really open-ended question and I was just throwing out the most interesting thing I could think of.

I think the biggie would be being underinvested during the falling interest rates. Lost opportunity.

I think this 'index bubble' idea comes from a basic misunderstanding of how asset pricing works. Maybe a brief explanation being that the number of shares owned by investors never changes (unless buybacks, issuances, etc. etc.), and asset pricing is just the price things trade at on a particular day.. So it doesn't matter how much of the market has stock market exposure through index funds. They're not 'propping the market up'. And effectively what an index tracker is is a small copy of the whole market. Like a mirror or a hologram. And we hold it, and it just does what the market does. The only thing index investors *may* influence is the relative value of stocks to other asset classes, like bonds. And only then, if institutional investor...

I think so too and I think it's pretty easy for competent people to navigate that. A solvent bank may still have to close if there's a run on deposits. The Fed can always hold to maturity, so they don't mind dealing with that.

Hyperchicken wrote: ↑Tue Mar 14, 2023 10:18 am This is equivalent to the fund having paid out 50% of tax-free dividends which were immediately reinvested.

You win the internet today!

Are these two banks the proverbial canary in the mine and there are lot more mid-size banks ready to fail on account of following similar strategy. Which may explain why the feds quickly bailed them out. Maybe time to fasten our seat belts and watch the upcoming fireworks :shock: I'm very anti making-up-the-answers. Just put "mortgages" in your head and think of it that way. All banks are leveraged. The more sane banks have some mortgages and MBS's and they're not paying as much interest as the bank needs to pay on deposits, I'd say. In a sense they're all in about the same place, no matter how boring they are. There's no need for them to fail, but any of them will fail is there's a run on it. The Feds will have no problem bailin...

They don't know anything about cars; they know about people. That's their business. Converting people into customers.

hiddenpower wrote: ↑Mon Mar 06, 2023 1:51 pm
However UPRO is such bang for your buck compared to going heavier with SSO.

What about buying LEAPS at a fixed strike in the event you need to roll and it wasn't breached? That way you're only paying for time interest.

"What about" is a pretty open-ended question. It's sort of traditional to look at January, so if you did this (and I did) January of 2023 was an interesting moment where you lost half your money and the leverage is now 5 or 6 instead of 3. So you have to decide whether or not to stay at a leverage of 5 or 6 or go back to 3. You can do either one.

I don't expect to see a day like that one again. Instead of "finally" I was thinking "never again"

Northern Flicker wrote: ↑Sat Mar 11, 2023 12:07 am
So the fallout could be significant.

I figure none of these companies produce anything that meets a human need (by definition, if they're burning VC). If they stop operating, the fallout is really that somebody lost his job, and then too, out there in the future a year or three, there's a product, or maybe just a competitor, that we would have had that'll never be there. Companies that do meet a human need at a profit will obviously continue to operate. They can get new owners.

But for my money, I think we're getting way ahead of ourselves thinking that these companies face significant losses. They might. Depends on who wants to buy SIVB in a sweetheart deal.

Correct, no dividend for 03/09/2023. This has happened twice previously, on 03/20/2014 and 12/28/2011. I decided to buy $7,500 worth of PSLDX on 3/9/23 - I was buying the dividend. Understandably, I was a little bit peeved to find out that wasn't the case. Then a RBD happened today. I threw up my hands in frustration! VTI skidded 1.68% today. DCA'ing in $7,500 on the day before a RBD grinds my gears. :x But, PSLDX gained .87% today! What the heck happened? I see that BND went up today (1.2%). I don't think the good performance of BND would outweigh the lousy stock performance... In a way, I timed my purchase of PSLDX quite nicely. I think I'll leave market timing to the professionals. :beer Long bonds were up about 2% yesterday. I don't re...