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Indeed. As a conservative investor, I am pleased that real rates are finally improving.

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There is something Larry said that I do not understand. can someone explain. he wrote: "We ended 1981 with the CAPE 10 at 7.8 (an earnings yield of 12.8%). But, as I wrote this, the CAPE 10 stood at 33.4 (an earnings yield of just 3%). Clearly, stock returns have benefited greatly from an expansion ...

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This question is so basic you will laugh, but I can't find the answer and Schwab lines are busy. Several months ago I purchased CD's through my Schwab brokerage account with yields around 2.5%. When I check my accounts online, the balance shows a significant loss over the purchase price. For exampl...

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I have had one for many years and I like it. Aside from the fact that the internal clock drifts a lot, I like to be awakened by gradually-increasing light rather than a sudden noise.

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Why do you need recommendations from academics. It's really quite simple. Bonds have two types of risk - duration and credit. If you want to avoid credit risk, treasuries are your only option (in the strict bond space). At any duration, they are the safest bonds. P.S. For the sticklers, I am lumping...

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Hi, I'd like to have $$ put aside for yearly vacations. Something that I wouldn't touch for a year but it grows, would a CD make the most sense? I see that Vanguard has 1 year CD at 2.1% (https://personal.vanguard.com/us/FixedIncomeHome). Are there any other options? Thanks Kathy Hi Kathy, A CD or ...

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No statistician here - but association is not causation. Maybe, for example, health problems and/or risks cause sudden asset loss (could be many reasons of the health problems) Is it not obvious that one's life savings losing a great deal of its value is very stressful? Is it not also obvious that ...

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Dodec,

We are on the same page. I have long maintained that folks tend to underestimate the importance of the emotional aspect of investing. It is not so much a matter of dollars and sense. It is quality of life, and perhaps also length of life.

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I think I remember reading that the least volatile asset allocation historically has been 20/80 stocks/bonds. Can someone back this up? Of course you may not like bond funds but a laddered 5 year CD portfolio would have about the same risk as a 2 year duration treasury bond fund. I don't buy "if yo...

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Your assumption on 5 year rates seems high. How do you come up with that?

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I think Dr. Bernstein means put your living expenses (your spending floor) into a TIPS ladder and you can do what you want with the rest - but he should say that explicitly if that's what he means. What about buying a SPIA or a ladder of SPIA (single premium immediate lifetime annuity) in place of ...

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I am curious when other people, particularly that retired early with no SS or pension, felt it was safe to spend more. Or maybe used a SWR that was more dynamic. I retired early (<50) more than 15 years ago (no SS or pension) and initially loosely "targeted" a 3.5% withdrawal rate. I say loosely be...

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I am talking about the people that have all their money in T bills, not a diversified stock portfolio. Historically speaking if you saved enough you were able to preserve your wealth and beat inflation with essentially no risk of losing money, in the most basic of big bank savings accounts. In the ...

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I think Dr. Bernstein means put your living expenses (your spending floor) into a TIPS ladder and you can do what you want with the rest - but he should say that explicitly if that's what he means.

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Look at what happened to upper/middle class savers (using MMA’s, CD’s, T bills) since 2008, they have been slaughtered. T bills historically have beat inflation, so what happened? There is a bit of hyperbole here, given that inflation has been very low and most middle-upper income savers have at le...

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When I look at the brokered CD offerings at Vanguard, I note that there is a range of yields for any given maturity. My question is: Why would anyone want any of the lower yielding offers when higher yields are available? The only good reason I can think of would be if they already have more than 2...

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Sure, but now convince me that banks and brokerages don't have similar language themselves. For example, Ally Bank says: Authorized Transactions: You agree to safeguard your username, password, other security devices or credentials and your Account number(s). If you give someone your Online Banking...

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JoeRetire wrote: ↑
Sat Mar 31, 2018 7:25 am
It doesn't bother me at all.

Because you think it can never happen or because you are OK losing money intended to be safe?

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Money Market wrote: ↑
Sat Mar 31, 2018 7:09 am
what are the reasons you initially signed up for PAS, and are they still valid now?

This is my question too. If all you wanted was to know what AA you should hold, I could have suggested this for free.

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I notice that Fidelity has eliminated cash bonuses for new money deposited into brokerage accounts. Does anyone have ideas as to why?

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Does the "fact" (not sure it's a fact, but it has been reported here) that the Treasury doesn't reimburse you in the case of stolen (i.e., think identity theft) electronic Savings Bonds bother you at all - or affect your willingness to buy them?

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Keeping funds that you plan to deploy in the near future in T-bills is a fine idea - there is nothing safer and more liquid. The easiest way to buy them is to open a brokerage account - such as at Fidelity. You can let them mature into a money market account and then use them to buy other investment...

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I would definitely rebalance between equity asset classes. Based upon the stated reason for your equities, I would let them otherwise ride.

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To inject a factoid into this discussion, it has been reported (by experienced lawyers, in past threads) that they have never seen a case where the payout went beyond liability limits of insurance policy. I do not know why this would be the case, but this has been said.

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Whenever backtesting is brought up people remind us that the past performance isn't indicative of future results. One needs to be careful in interpreting that statement. Of course it is not useless - but it can be misused. If backtesting is done over a sufficiently long time period - particularly i...

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I like "free riding" at Fidelity because as a Boglehead investor I can use any of their no transaction fee index funds, or Blackrocks commission free iShares ETF's, and create Vanguard like products and costs or better. If I do need something Fidelity's customer service is good (meaning they pick u...

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My only concern with IBonds is that (as I understand it) Treasury Direct offers no reimbursement if your bonds are stolen. In contrast, federal law protects bank accounts as long as the fraud is reported within 60 days.

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I am simply pointing-out that based upon long-term historical performance of the US stock market, we have under-performed over the past 20 years. You can place zero weight on that fact - but it is still a fact. I agree it is a fact, and you are correct, I place zero weight on that fact in making in...

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I am simply pointing-out that based upon long-term historical performance of the US stock market, we have under-performed over the past 20 years. You can place zero weight on that fact - but it is still a fact. I agree it is a fact, and you are correct, I place zero weight on that fact in making in...

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I tried the Planning calculator on Fidelity and for where I'm trending the "substantially below average" return would yield $850K where the average return would yield $2.5M in 30 years. They don't disclose what the annual interest is in these cases (but can figure out). Also, it assumes I contribut...

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Is this a direct CD or brokered?

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The example he used (3 brothers) was based upon a very high withdrawal rate that nobody should use (6%), and 100% equities (no cushion). It was IMO designed for impact, and not realistic. Nevertheless, I enjoy watching her show.

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If one were to forget about the CAPE Ratio and most other tools for predicting future equity returns and look at the US stock market performance over the past 20 years compared to the longer-term (say since 1972) they will find that the CAGR from 1972-2018 was 10.4%, but the CAGR from 1998-2018 (la...

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When I first read the title of the thread, I thought is was related to OCD.

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What's nice about that figure is you can see that we are below the trend line. And you can see that the latest bull market is simply digging us out of a hole produced by the last couple of bear markets. As of Jan 2018 we were (quite a bit) above the historic trend line. The Feb/Mar pullback has sim...

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What's nice about that figure is you can see that we are below the trend line. We were below the trendline in 2012 (date of figure). Figure updated would show that we are significantly ABOVE trendline I assume. I make an error in time - how fallible of me. - The Lonely Squire of Gothos (From the or...

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I am also very conservative. But I adjust my equity allocation down to a level where I am comfortable. That has never been at zero, but I don't fault you for doing what you did.

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What's nice about that figure is you can see that we are below the trend line. And you can see that the latest bull market is simply digging us out of a hole produced by the last couple of bear markets.

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jackhensy wrote: ↑
Sat Mar 24, 2018 11:13 pm
I invested $6500 on 3-20-18. Then the next day Jerome Powell raises interest rates. The stock market tanks on 3-23-18 and I lose $3,500.

Non-sequitur - your facts are uncoordinated.

-Nomad

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Dollar cost averaging never makes sense and is purely an emotional reaction. Since when is emotion unimportant? I think it makes a lot of sense - for that very reason. It is also not correct to say it "never makes sense" financially. It does about 40% of the time. Would you cash out and DCA your $1...

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A house should not be viewed in terms of its investment potential; it is a lifestyle choice. Having a paid-off house, where you have a great deal of control over your environment and can never be evicted is a great feeling. If (like me) you like to not be bothered when at home and you like to feel s...

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If one were to forget about the CAPE Ratio and most other tools for predicting future equity returns and look at the US stock market performance over the past 20 years compared to the longer-term (say since 1972) they will find that the CAGR from 1972-2018 was 10.4%, but the CAGR from 1998-2018 (las...

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However, the coming rate increases are already priced in. If pricing was efficient the yield on the 10 year TRSY would be way over 3%. I don't think the market believes the rate increases will actually happen. That doesn't imply inefficiency. An efficient market is one where information is widely d...

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The word "effect" seems to be the general term.

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"Nobody knows nuthin'."

-Jack Bogle

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I am in my late 30's and have experiencing some hostility from friends/family due to what I perceive as jealousy. I drive modest vehicles and live in a small home. My job pays well working for the government, but does not appear to have such perception of high status. For most of my adult life, me ...

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MotoTrojan wrote: ↑
Thu Mar 22, 2018 5:05 pm
Dollar cost averaging never makes sense and is purely an emotional reaction.

Since when is emotion unimportant? I think it makes a lot of sense - for that very reason. It is also not correct to say it "never makes sense" financially. It does about 40% of the time.

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I loosely track my budget but do not "stick" one religiously. I have noticed that it keeps getting bigger - my personal inflation.

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For non-brokered CDs, return of principal prior to maturity typically involves a penalty of some amount of interest. Those conditions are known at purchase time and are not dependent on interest rates. People that want that kind of behavior use CDs. It's a good point that when people refer to "CDs"...

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A CD would not have lost any principle for sure. Bonds do not lose principal either. They lose market value when rates increase - not principal. A rolling CD ladder would also lose market value. There is no difference. Market value is meaningless if you hold to maturity. Its like saying you lose mo...

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