Search found 21 matches

by BH+
Mon Nov 04, 2019 1:17 am
Forum: Investing - Theory, News & General
Topic: When DID the stock market recover from 1929?
Replies: 52
Views: 5154

Re: When DID the stock market recover from 1929?

For the investor who retired in 1929 the run up in the 20's did not matter. They looked at their portfolio value in 1929 to make that decision, not at their cost basis. If anything, they may have thought that the 30's would be a repeat of the 20's. For the investor who retired in 1929 at 100% stock...
by BH+
Sun Nov 03, 2019 10:36 pm
Forum: Investing - Theory, News & General
Topic: When DID the stock market recover from 1929?
Replies: 52
Views: 5154

Re: When DID the stock market recover from 1929?

For the investor who retired in 1929 the run up in the 20's did not matter. They looked at their portfolio value in 1929 to make that decision, not at their cost basis. If anything, they may have thought that the 30's would be a repeat of the 20's.
by BH+
Sun Nov 03, 2019 12:55 pm
Forum: Investing - Theory, News & General
Topic: How do you explain individual stock risk (idiosyncratic) vs. stock market risk (systematic) in a simple, intuitive way?
Replies: 21
Views: 1205

Re: How do you explain individual stock risk (idiosyncratic) vs. stock market risk (systematic) in a simple, intuitive w

You can tell them that you prefer not to waste your time finding the needle in the haystack. Instead, you just go ahead and buy the haystack.
by BH+
Sat Nov 02, 2019 8:19 pm
Forum: Investing - Theory, News & General
Topic: How do you explain individual stock risk (idiosyncratic) vs. stock market risk (systematic) in a simple, intuitive way?
Replies: 21
Views: 1205

Re: How do you explain individual stock risk (idiosyncratic) vs. stock market risk (systematic) in a simple, intuitive w

Investing in individual stocks is like putting all your eggs in one or a few baskets. Investing in the market is like putting your eggs in many baskets.
by BH+
Sat Nov 02, 2019 2:40 pm
Forum: Personal Finance (Not Investing)
Topic: Does leasing make sense in this case?
Replies: 45
Views: 2732

Re: Does leasing make sense in this case?

I think leasing makes the most sense in this scenario.

Make sure you bargain hard (with the dealership that is).
by BH+
Wed Oct 16, 2019 12:37 am
Forum: Personal Investments
Topic: 3-Fund Portfolio (Adding a “Dividend Stocks” bucket)
Replies: 39
Views: 3147

Re: 3-Fund Portfolio (Adding a “Dividend Stocks” bucket)

Dividend stocks will go into the stock bucket. I can't think of any special advantage they would offer over a total stock market fund.
by BH+
Sun Oct 13, 2019 11:52 pm
Forum: Investing - Theory, News & General
Topic: If Charles Schwab et al. drop commissions to zero, can we build our own index funds?
Replies: 68
Views: 7287

Re: If Charles Schwab et al. drop commissions to zero, can we build our own index funds?

You could probably get similar results by buying the top 30 stocks of the S&P500 and holding them in market cap weight. Then take the dividends each year and add the 31st stock, and so on. You could also equal weight those stocks or control your sector allocation, if you prefer to do so. This is wha...
by BH+
Fri Oct 11, 2019 9:45 pm
Forum: Investing - Theory, News & General
Topic: Vanguard: the case for global equity investing
Replies: 160
Views: 12304

Re: Vanguard: the case for global equity investing

The globally diversified equity portfolio produced the highest risk-adjusted return over the full analysis period
This sums it up very nicely.
by BH+
Sun Oct 06, 2019 9:02 pm
Forum: Investing - Theory, News & General
Topic: Michael Kitces investment strategy -- opinions?
Replies: 48
Views: 4332

Re: Michael Kitces investment strategy -- opinions?

At a very basic level, Kitces strategy is very appealing. One withdraws safe and sure assets for near term liabilities, and lets the magic of compounding do its work on stocks over longer time horizons. But even though there is less dispersion of returns for stocks over longer time horizons, there i...
by BH+
Sun Oct 06, 2019 11:24 am
Forum: Personal Investments
Topic: Preferred Stock Index Fund
Replies: 49
Views: 5542

Re: Preferred Stock Index Fund

The risk and return profile of preferred shares is closest to long term corporate bonds in terms of credit and duration risks. The CAGRs of PFF and LQD since 2008 have been almost equal, but PFF had a draw down of about 55% versus 15% for LQD in the financial crisis. Preferred shares do not seem to ...
by BH+
Sun Sep 29, 2019 4:23 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

The "expected" returns of stocks is always greater than bonds. However, the "realized" return of stocks has not always been greater than bonds. This is what the paper is alluding to. I haven't heard anyone suggest otherwise in or out of this thread. I certainly haven't. I agree you haven't. But upt...
by BH+
Sun Sep 29, 2019 3:20 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

CULater wrote:
Sun Sep 29, 2019 3:13 pm
As my Pappy used to say :wink: - Mr. Market doesn't care if you're taking risk or what investment return you would like to get for that. Thanks Pappy
Well said!
by BH+
Sun Sep 29, 2019 3:17 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

But if they persistently take a risk that they are not rewarded for, then they are seemingly either masochistic or just plain foolish. They are neither masochistic nor foolish. Most of the time investors do get rewarded, in the sense that stock returns are positive and better than bonds. The articl...
by BH+
Sun Sep 29, 2019 3:05 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

Why do we invest in index funds? Why do we buy the haystack? Because no one can beat the market in the long run. We invest in index funds because we are unlikely to beat the market by choosing individual stocks. One could beat the market through other means (e.g. leverage or tilting to factors or s...
by BH+
Sat Sep 28, 2019 9:41 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

From the McQuarrie study: It is the conjunction of normal stock returns and abnormal bond returns that makes the 1942 to 1982 period so deviant. This combination gave stock investors returns that were 26X greater than bond returns. Without the bond abyss of 1942 -1982 there would be no case of "sto...
by BH+
Sat Sep 28, 2019 8:17 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

Of course, but if they do not get rewarded for taking on the risk of stocks over the long-term, they would have no reason to do so. So anyone (not necessarily saying you) using this argument to claim that bonds should have the same or better return as stocks basically requires very large numbers of...
by BH+
Sat Sep 28, 2019 5:42 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

One common argument for stocks is that they will outperform bonds because investors are taking "risk" and naturally "demand" a premium in returns. Often forgotten here is the "risk" component, i.e. the possibility that stocks will not perform as expected, at least in an investor's time frame. Just ...
by BH+
Sat Sep 28, 2019 3:34 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

One common argument for stocks is that they will outperform bonds because investors are taking "risk" and naturally "demand" a premium in returns. Often forgotten here is the "risk" component, i.e. the possibility that stocks will not perform as expected, at least in an investor's time frame. Just ...
by BH+
Fri Sep 27, 2019 10:51 pm
Forum: Investing - Theory, News & General
Topic: Bonds returns are on par with Stocks?
Replies: 98
Views: 5981

Re: Bonds returns are on par with Stocks?

One common argument for stocks is that they will outperform bonds because investors are taking "risk" and naturally "demand" a premium in returns. Often forgotten here is the "risk" component, i.e. the possibility that stocks will not perform as expected, at least in an investor's time frame. Just b...
by BH+
Sat Aug 31, 2019 5:53 pm
Forum: Personal Finance (Not Investing)
Topic: How Have You Planned for Sequence of Return Risk (SOR)?
Replies: 178
Views: 11773

Re: How Have You Planned for Sequence of Return Risk (SOR)?

My understanding is that the SWR studies include periods when sequence of return risk actually materialized (such as those who retired in the mid 60's). So a retiree sticking to the 3-4% retirement withdrawal plan just needs to pick a reasonable asset allocation.