Search found 162 matches

by Johnathon Livingston
Fri Jul 07, 2023 9:03 pm
Forum: Investing - Theory, News & General
Topic: What allocation did you or are you going into retirement with and why
Replies: 87
Views: 8809

Re: What allocation did you or are you going into retirement with and why

I’ll be at 60/40 when I retire. 100% equities for now. 60/40 does well with 4% annual draw downs. Bond allocation is high enough to coast on in a bear market while stocks recover. Also has a good chance of growth.
by Johnathon Livingston
Wed Jun 28, 2023 10:16 am
Forum: Investing - Theory, News & General
Topic: What am I missing here?? international
Replies: 199
Views: 10199

Re: What am I missing here?? international

Here’s a good blog piece on the concept of dispersion vs correlation. https://blogs.cfainstitute.org/investor/2019/02/07/diversification-high-dispersion-beats-low-correlation/ Those that are US only may point to high correlation of domestic and international equities since globalization took effect in the 2000s. Correlations are at around .85ish. Who knows if or how long that will continue. But correlation doesn’t capture dispersion of returns—how much returns go up or down. In other words, US and Ex-US move up and down together usually, but not to the same degree. Typical investment lifespans are around 40 years with most people having only about 20 of the years where they are financially able to invest a lot of money. US and Ex-US may swa...
by Johnathon Livingston
Mon Jun 26, 2023 7:57 pm
Forum: Investing - Theory, News & General
Topic: What active funds do you like (and why)?
Replies: 54
Views: 7412

Re: What active funds do you like (and why)?

Wellington and Wellesley. Too conservative for me right now, but great for someone wanting a moderate or conservative allocation in a tax advantaged account.
by Johnathon Livingston
Mon Jun 26, 2023 12:22 pm
Forum: Investing - Theory, News & General
Topic: What am I missing here?? international
Replies: 199
Views: 10199

Re: What am I missing here?? international

https://tinypic.host/images/2023/06/26/Screen-Shot-2023-06-25-at-6.22.26-PM.png Portfolio 1 is 60/40: US total / Developed ex us. The returns are less, the worst year / max draw down is worse. I am new and not well versed so what am I missing? People invest internationally because of FOMO- fear of missing out. International equities generally do not provide downside risk protection for times when the U.S. market crashes. They are highly correlated with US equities. Allocating 20-40% to o International equities can provide some volatility reduction but it’s so small that most people don’t do it for that reason. So why include them? Because market cycles can last a long time. US and international equities tend to swap out performance for rel...
by Johnathon Livingston
Mon Jun 12, 2023 6:01 pm
Forum: Investing - Theory, News & General
Topic: 100/0, 90/10, 80/20…. Does it really matter?
Replies: 66
Views: 14648

Re: 100/0, 90/10, 80/20…. Does it really matter?

It makes a significant difference if there’s a bear market. About 3/4 of the time treasuries are negatively correlated with a down turn in the stock market. The recent bear market was one of the 1/4 times stocks and bonds have been correlated. But even 10-20% bonds can boost returns in the short term when the market draws down assuming negative correlation. But in the long term you’d make more money being 100% equities. But, that’s long term, meaning at least over 10 years.
by Johnathon Livingston
Fri May 19, 2023 4:55 pm
Forum: Investing - Theory, News & General
Topic: International allocation analytical framework
Replies: 6
Views: 822

International allocation analytical framework

Sharing a blog post from 2019 about the framework for determining allocation to international equities. Do you invest in international equities in hopes to boost returns, lower risk, boost risk adjusted returns? Or maybe global market cap sets your allocations. In any case, the effect of different allocations on volatility (how risk is often measured) is a worthy endeavor. And an endeavor that can be informed with data (objectivity?!?)

Anyway, I think it’s a good article. Enjoy

https://blogs.cfainstitute.org/investor ... scontents/
by Johnathon Livingston
Thu Apr 27, 2023 7:06 pm
Forum: Investing - Theory, News & General
Topic: The One-Fund Portfolio as a default suggestion
Replies: 904
Views: 242055

Re: The One-Fund Portfolio as a default suggestion

Total US stock market or S&P 500 index for the risk tolerant. Vanguard balanced fund (60/40 all US) or Wellington for a more moderate approach.
by Johnathon Livingston
Fri Sep 23, 2022 8:05 am
Forum: Investing - Theory, News & General
Topic: Foreign stocks are cheaper
Replies: 94
Views: 11167

Re: Foreign stocks are cheaper

BitTooAggressive wrote: Sat Sep 17, 2022 7:34 am
Johnathon Livingston wrote: Sat Sep 17, 2022 7:01 am You get what you pay for.
Do you sell mutual funds with loads and high expense ratios? Sometimes you get what you don’t pay for. Context is important.
Or is it sometimes you don’t get what you pay for? Thanks. Next time I offer up a tongue in cheek pithy cliche to add levity to a conversation I’ll add a footnote with a disclaimer and context. Great point man.
by Johnathon Livingston
Sat Sep 17, 2022 7:01 am
Forum: Investing - Theory, News & General
Topic: Foreign stocks are cheaper
Replies: 94
Views: 11167

Re: Foreign stocks are cheaper

You get what you pay for.
by Johnathon Livingston
Thu Jul 21, 2022 8:48 pm
Forum: Investing - Theory, News & General
Topic: Who should overweight international equities?
Replies: 47
Views: 4658

Re: Who should overweight international equities?

I think people who are overweight in international believe international are undervalued and will outperform US eventually.
by Johnathon Livingston
Fri Jul 15, 2022 5:09 am
Forum: Investing - Theory, News & General
Topic: How many "Japans" have there been?
Replies: 262
Views: 23752

Re: How many "Japans" have there been?

The NASDAQ was kinda a “Japan.” It took 14 years to recover from the .com bubble bursting in 2000.
by Johnathon Livingston
Mon Jul 11, 2022 8:02 pm
Forum: Investing - Theory, News & General
Topic: How to mitigate interest rate risk of a bond fund?
Replies: 54
Views: 4885

Re: How to mitigate interest rate risk of a bond fund?

This is a somewhat academic question because rates don’t rise in a vacuum apart from the stock market. For example, if rising rates are followed by a market drop, treasury prices might rapidly swell while rates drop. The bond fund returns would rapidly accelerate in that scenario.
by Johnathon Livingston
Mon Jul 11, 2022 6:37 pm
Forum: Investing - Theory, News & General
Topic: Do you expect stock market returns to remain at ~10% per year into perpetuity?
Replies: 49
Views: 6418

Re: Do you expect stock market returns to remain at ~10% per year into perpetuity?

I expect about 10% market returns on average over a long period of time, such as 20+ years. But the market is volatile and can swing up or down 17% in a year in the ordinary course Of business, not to mention bear markets, drawdowns, and bull runs. Because of this volatility the returns can average well above or below 10% for long periods of time, such as 5-10 years. This is why people diversify their portfolios.
by Johnathon Livingston
Mon Jul 11, 2022 6:29 pm
Forum: Investing - Theory, News & General
Topic: Is International underperformance mainly due to strengthening dollar?
Replies: 42
Views: 5294

Re: Is International underperformance mainly due to strengthening dollar?

Ex-US underperformance is mostly explained by valuation of the stock. Between 2010-2020 valuation change accounted for 5.4 percentage points of the nearly 8 percentage point difference between US annual returns of 13% for that decade vs 5.1% for Ex-US. Currency exchange accounted for 2.1 percentage points of the 8 point difference.

Source: https://corporate.vanguard.com/content/ ... ne-003.pdf

So, I’d say currency exchange is significant but in theory should balance out over time.
by Johnathon Livingston
Mon Jul 11, 2022 7:51 am
Forum: Investing - Theory, News & General
Topic: US vs Int stock allocation
Replies: 462
Views: 39347

Re: US vs Int stock allocation

You’ll get about 80% of the diversification benefit by allocating 20% to international. 40% allocation to international gives you up to the maximum diversification benefit. That’s where the typical suggested range of 20-40% comes from. 20% is often seen as the minimum amount to offer meaningful diversification benefit. I recommend reading vanguard’s research on the topic. The diversification benefit is a topic of heated debate, but I’d say all major brokerage firms suggest global equity diversification. But there have been notable experts that recommend no international, such as Jack Bogle. Here is a link to a Vanguard paper on this topic: https://corporate.vanguard.com/content/dam/corp/research/pdf/Global-equity-investing-The-benefits-of-d...
by Johnathon Livingston
Wed Jul 06, 2022 9:07 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

I think all investors should consider investing globally. If I lived in Australia, which historically has the highest return of any country, I wouldn’t only invest in Australia simply because of that fact. Nor if I lived in a country that had poor historical returns, I wouldn’t invest only in all other countries in the world. And if after considering global investing a person concludes that they’d rather not accept risks they’ve identified with international investing (eg currency, legal, war, government, stability etc) in light of the nearly 90% correlation international equities have with US equities, then you’d support that I take it. How did that work out for ex-US investors who avoided the US the last 10 years because of high correlat...
by Johnathon Livingston
Wed Jul 06, 2022 7:57 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

US vs ex-US returns 1970-2012, about even. So you must be equally supportive of US investors and global investors. I think all investors should consider investing globally. If I lived in Australia, which historically has the highest return of any country, I wouldn’t only invest in Australia simply because of that fact. Nor if I lived in a country that had poor historical returns, I wouldn’t invest only in all other countries in the world. And if after considering global investing a person concludes that they’d rather not accept risks they’ve identified with international investing (eg currency, legal, war, government, stability etc) in light of the nearly 90% correlation international equities have with US equities, then you’d support that...
by Johnathon Livingston
Wed Jul 06, 2022 6:42 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

it did in 2001 to 2008? A few comments about the lost decade of 2000-2010. The US market wasn’t down for 10 years. It crashed twice. There’s a difference. Annual returns for that period: US -.27% ExUS 2.29%, not a great hedge. That time period also doesn’t take into account the run up to the crash in 2000 to capture the market cycle. Unless you dropped a big investment into the market at the beginning of 2000, you might have done just fine. Here are the annual returns for the period 1995-2010, which captures the bull run preceding the crashes: US 8.05% ExUS 4.85%. And just for fun, annual returns 1995-2020 US 10.12% ExUS 4.93% US Bonds 5.36%, yeah that’s speaks volumes US vs ex-US returns 1970-2012, about even. So you must be equally suppo...
by Johnathon Livingston
Wed Jul 06, 2022 5:47 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

Japan has had a 30-year drought. It isn’t Mad Max in Japan as a result - hitting the open road scrounging for gas and food while avoiding mauraders. We aren’t Japan. When the US sneezes the world catches a cold. it did in 2001 to 2008? A few comments about the lost decade of 2000-2010. The US market wasn’t down for 10 years. It crashed twice. There’s a difference. Annual returns for that period: US -.27% ExUS 2.29%, not a great hedge. That time period also doesn’t take into account the run up to the crash in 2000 to capture the market cycle. Unless you dropped a big investment into the market at the beginning of 2000, you might have done just fine. Here are the annual returns for the period 1995-2010, which captures the bull run preceding ...
by Johnathon Livingston
Wed Jul 06, 2022 5:21 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

What will you do if the US index lags the ex-US index for 5 years or more? which has happened... All these so called bogleheads bailing on ex-US, what will you do when it reverts? If and when my saga with ex-US ends I’m not ever looking back. To answer your question I will not add ex-US back. I have about 20 years until retirement and that’s enough time to ride out a US down cycle. If the S&P 500 is so broken that it stops working then we have much bigger problems than debating whether to buy ex-US. Japan has had a 30-year drought. It isn’t Mad Max in Japan as a result - hitting the open road scrounging for gas and food while avoiding mauraders. We aren’t Japan. When the US sneezes the world catches a cold. it did in 2001 to 2008? A fe...
by Johnathon Livingston
Wed Jul 06, 2022 3:25 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

What will you do if the US index lags the ex-US index for 5 years or more? which has happened... All these so called bogleheads bailing on ex-US, what will you do when it reverts? If and when my saga with ex-US ends I’m not ever looking back. To answer your question I will not add ex-US back. I have about 20 years until retirement and that’s enough time to ride out a US down cycle. If the S&P 500 is so broken that it stops working then we have much bigger problems than debating whether to buy ex-US. Japan has had a 30-year drought. It isn’t Mad Max in Japan as a result - hitting the open road scrounging for gas and food while avoiding mauraders. We aren’t Japan. When the US sneezes the world catches a cold. Which is how Japan would hav...
by Johnathon Livingston
Wed Jul 06, 2022 12:32 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

No. If anything, I’m considering rebalancing out of ex-US completely into US. I’m at 80/20 US/ex-US now. That gives me about 80% of the diversification benefit that ex-US has to offer. However, I don’t have confidence in ex-US investments with all the uncertainty and turmoil in the world. So, ex-US might not pass the “ability to stay the course” test for me. To each their own. I have complete confidence in US. What will you do if the US index lags the ex-US index for 5 years or more? which has happened... All these so called bogleheads bailing on ex-US, what will you do when it reverts? If and when my saga with ex-US ends I’m not ever looking back. To answer your question I will not add ex-US back. I have about 20 years until retirement an...
by Johnathon Livingston
Wed Jul 06, 2022 11:28 am
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

No. If anything, I’m considering rebalancing out of ex-US completely into US. I’m at 80/20 US/ex-US now. That gives me about 80% of the diversification benefit that ex-US has to offer. However, I don’t have confidence in ex-US investments with all the uncertainty and turmoil in the world. So, ex-US might not pass the “ability to stay the course” test for me. To each their own. I have complete confidence in US. What will you do if the US index lags the ex-US index for 5 years or more? which has happened... All these so called bogleheads bailing on ex-US, what will you do when it reverts? If and when my saga with ex-US ends I’m not ever looking back. To answer your question I will not add ex-US back. I have about 20 years until retirement an...
by Johnathon Livingston
Tue Jul 05, 2022 7:15 pm
Forum: Investing - Theory, News & General
Topic: anyone else considering moving to market cap weight with international?
Replies: 193
Views: 16121

Re: anyone else considering moving to market cap weight with international?

No. If anything, I’m considering rebalancing out of ex-US completely into US. I’m at 80/20 US/ex-US now. That gives me about 80% of the diversification benefit that ex-US has to offer. However, I don’t have confidence in ex-US investments with all the uncertainty and turmoil in the world. So, ex-US might not pass the “ability to stay the course” test for me. To each their own. I have complete confidence in US.
by Johnathon Livingston
Thu Mar 24, 2022 3:06 pm
Forum: Investing - Theory, News & General
Topic: Is Anyone Rethinking International AA?
Replies: 375
Views: 32294

Re: Is Anyone Rethinking International AA?

Yes, I reduced my international equity allocation to 20% from 40% last year and dropped emerging markets entirely (ie. My international equities are only developed markets). I don’t have as much confidence in investing in international companies, especially those in emerging markets. Once the US market recovers from its current pull back, I may further reduce my international exposure. I think 20% international gives me most of the diversification benefit of global diversification, which I view as having fairly limited value.
by Johnathon Livingston
Sat Nov 27, 2021 8:48 am
Forum: Investing - Theory, News & General
Topic: Bonds protect against stock market downtimes
Replies: 42
Views: 4738

Re: Bonds protect against stock market downtimes

Treasuries provide downside risk protection but at the cost of increasing upside risk. The upside risk wasn’t as big if a deal when you could expect an average 6% return on treasuries, but now it’s a significant consideration.
by Johnathon Livingston
Mon Nov 08, 2021 4:54 pm
Forum: Personal Investments
Topic: Help with asset allocation
Replies: 7
Views: 979

Re: Help with asset allocation

Delete
by Johnathon Livingston
Mon Oct 25, 2021 5:58 pm
Forum: Investing - Theory, News & General
Topic: Active Funds : 100% vwelx Wellington VS 65% VDIGX (Dividend Growth)\35% VBTLX(Total Bond)
Replies: 31
Views: 3573

Re: Active Funds : 100% vwelx Wellington VS 65% VDIGX (Dividend Growth)\35% VBTLX(Total Bond)

Wellington. The less I have to touch it (e.g. rebalancing), the better. Plus, with a name like Wellington…
by Johnathon Livingston
Mon Oct 18, 2021 6:48 pm
Forum: Investing - Theory, News & General
Topic: Can somebody convince me to feel comfortable investing in international funds?
Replies: 98
Views: 11479

Re: Can somebody convince me to feel comfortable investing in international funds?

Globally diversify equities for managing upside risk—failing to diversify across markets can cause you to miss out on out performing markets or become concentrated in under performing markets. Diversify into fixed income to manage downside risk.
by Johnathon Livingston
Wed Oct 06, 2021 3:10 pm
Forum: Investing - Theory, News & General
Topic: Is the S&P 500 Still a Diversified Portfolio?
Replies: 84
Views: 12406

Re: Is the S&P 500 Still a Diversified Portfolio?

This is perhaps another way of asking whether a sell off of technology stock (which is the sector I assume you think may be heavy in the S&P 500) can be offset by a rotation into other sectors to keep the market or fund up overall. I think the answer is “it depends.” Under some scenarios, yes stocks rotate or there are corrections within the market but the fund stays up overall. Under other scenarios the market or the S&P 500 in particular go down by an event that triggers a sell off within a sector.

All they being said, I personally view the S&P 500 or the US total stock market to pose sector concentration risk in technology. I diversify across markets globally, in part, to spread and therefore reduce risk.
by Johnathon Livingston
Wed Sep 29, 2021 1:20 pm
Forum: Investing - Theory, News & General
Topic: Adjust Asset Allocation When Markets Are Over Valued
Replies: 48
Views: 5188

Re: Adjust Asset Allocation When Markets Are Over Valued

I don’t adjust my allocations based on valuation. I don’t trust traditional valuation models with the Fed’s monetary policy in place. It’s logical to assume equity P/E ratios will be higher than the past since bonds are so unattractive now. So, I don’t know if equities are overvalued or undervalued.
by Johnathon Livingston
Sat Sep 11, 2021 7:55 am
Forum: Investing - Theory, News & General
Topic: Is anyone tempted by value investing right now?
Replies: 125
Views: 15733

Re: Is anyone tempted by value investing right now?

I’m fine with capturing the market return. I don’t have the patience to wait for a tilt to maybe payoff some day.
by Johnathon Livingston
Wed Sep 01, 2021 9:53 am
Forum: Investing - Theory, News & General
Topic: Tilt towards International?
Replies: 25
Views: 3613

Re: Tilt towards International?

5% is negligible. You’d need about 20% to see a substantial amount of the diversification benefit. The value of the diversification benefit of equities that are 80-90% correlated with the US market is a topic of ongoing debate. But that’s another thread altogether.
by Johnathon Livingston
Tue Aug 31, 2021 7:52 am
Forum: Investing - Theory, News & General
Topic: Are 3 Funds Better Than 1? VTSAX vs 3 Tickers
Replies: 25
Views: 2039

Re: Are 3 Funds Better Than 1? VTSAX vs 3 Tickers

VTSAX and chill! Tilts require faith and patience. I reserve those qualities for other things in life.
by Johnathon Livingston
Sun Aug 29, 2021 7:58 pm
Forum: Investing - Theory, News & General
Topic: Bonds, what are they good for?
Replies: 69
Views: 8375

Re: Bonds, what are they good for?

1. Locking in returns
2. Reducing volatility
3. Diversification / downside risk protection
4. Dry powder for buying the dip, correction, crash

What they aren’t is a growth asset.
by Johnathon Livingston
Sat Aug 28, 2021 12:07 pm
Forum: Investing - Theory, News & General
Topic: How to catch a falling knife
Replies: 52
Views: 9289

Re: How to catch a falling knife

Rebalance to 100% stocks and ride the rebound back up.
by Johnathon Livingston
Sat Aug 14, 2021 9:01 am
Forum: Investing - Theory, News & General
Topic: How do you square all the daily negative news with record market highs ?
Replies: 148
Views: 16167

Re: How do you square all the daily negative news with record market highs ?

Remember what you’re investing in—businesses. Businesses make money when the news is bad, good, or otherwise.

Remember that the economy and the stock market are connected, but that connection is stretchy. It’s more like a stretchy bungee cord than a rope. One can deviate from the other for some time before the market gets slung into a different direction.

Diversify and allocate assets such that the news makes no difference to your investment strategy.
by Johnathon Livingston
Fri Aug 13, 2021 4:26 pm
Forum: Investing - Theory, News & General
Topic: Does the Covid crash count as a crash
Replies: 59
Views: 5912

Re: Does the Covid cash count as a crash

It was more like a sling shot.

Imagine the comfort people felt after the 2000 crash knowing they got one behind them and were in for smooth sailing…
by Johnathon Livingston
Wed Aug 11, 2021 7:21 pm
Forum: Investing - Theory, News & General
Topic: Is the free lunch of diversification in jeopardy?
Replies: 88
Views: 11578

Re: Is the free lunch of diversification in jeopardy?

I’m not concerned. Diversification is a must. These times have their own unique challenges, as did all the times before. Stay the course. Don’t get distracted.
by Johnathon Livingston
Wed Aug 11, 2021 7:17 pm
Forum: Investing - Theory, News & General
Topic: How do you think Vanguard Wellesley Income Fund will do over the next ten years?
Replies: 74
Views: 16072

Re: How do you think Vanguard Wellesley Income Fund will do over the next ten years?

From 2016 to present you’d have been better off with index funds: VWINX - 8.28% CAGR VTSAX 40% / VBTLX 60% - 9.21% CAGR If you’re a 3 fund type of person: VTSAX 30% / VTIAX 10% / VBTLX 60% - 8.50% CAGR The standard deviations were comparable among the funds, but the index fund portfolios drew down less. Interesting choice of time period. Why'd you pick 2016 to present? 1993 to present (as far back as I could go with total stock market investor shares): VWINX - 8.27% CAGR VTSMX 40% / VBMFX 60% - 7.69% CAGR I just picked recent performance- last five years or so. I’m sure there is variation from time to time though. Sometimes active outperforms. Sometimes it underperforms. With the index approach you’re mathematically certain to be average a...
by Johnathon Livingston
Wed Aug 11, 2021 7:00 pm
Forum: Investing - Theory, News & General
Topic: How do you think Vanguard Wellesley Income Fund will do over the next ten years?
Replies: 74
Views: 16072

Re: How do you think Vanguard Wellesley Income Fund will do over the next ten years?

From 2016 to present you’d have been better off with index funds:

VWINX - 8.28% CAGR
VTSAX 40% / VBTLX 60% - 9.21% CAGR

If you’re a 3 fund type of person:

VTSAX 30% / VTIAX 10% / VBTLX 60% - 8.50% CAGR

The standard deviations were comparable among the funds, but the index fund portfolios drew down less.
by Johnathon Livingston
Sun Aug 08, 2021 5:31 pm
Forum: Investing - Theory, News & General
Topic: The S&P500 Price to Sales ratio is at its highest in 20 years. Is this justified?
Replies: 46
Views: 5444

Re: The S&P500 Price to Sales ratio is at its highest in 20 years. Is this justified?

I think the US market is stretched, exhausted, and begging for a correction like a tired kid needs a nap to recharge. The Fed has crowded everybody into equities while it hollowed out the marrow from the bond market for over a decade. Reversion to the mean is more powerful than the Fed’s vision and fundamentals will take over just like they always have. I’m moving some equities into Wellington for its quality blue chip equities and bond management as I raise my bond allocation. Call me a market timer but I’m sleeping better. Your comment makes me think the market has more room to run. Still some wall of worry left to climb! But I know nothing. Best of luck! I think it does have room to move. And I have plenty of equity exposure to reap the...
by Johnathon Livingston
Sun Aug 08, 2021 12:42 pm
Forum: Investing - Theory, News & General
Topic: The S&P500 Price to Sales ratio is at its highest in 20 years. Is this justified?
Replies: 46
Views: 5444

Re: The S&P500 Price to Sales ratio is at its highest in 20 years. Is this justified?

I think the US market is stretched, exhausted, and begging for a correction like a tired kid needs a nap to recharge. The Fed has crowded everybody into equities while it hollowed out the marrow from the bond market for over a decade. Reversion to the mean is more powerful than the Fed’s vision and fundamentals will take over just like they always have. I’m moving some equities into Wellington for its quality blue chip equities and bond management as I raise my bond allocation. Call me a market timer but I’m sleeping better.
by Johnathon Livingston
Thu Aug 05, 2021 6:40 pm
Forum: Investing - Theory, News & General
Topic: Is it safe to say bonds cannot recover?
Replies: 83
Views: 12620

Re: Is it safe to say bonds cannot recover?

I don’t see the Fed’s low interest rate monetary policy changing for the foreseeable future. Technology growth is deflationary. Low rates help offset that. The Fed has been propping up the US stock market and economy since the ‘08 financial crisis. There will be little rate hikes here and there, but that’s about it.

What this means for you: make your money on stocks. Preserve your money with bonds. Don’t worry about making money with bonds. Or buy a conservative balanced fund like Wellesley and pretend it’s a bond fund that draws down some when the market crashes.
by Johnathon Livingston
Wed Aug 04, 2021 3:49 pm
Forum: Investing - Theory, News & General
Topic: Wellington fund
Replies: 66
Views: 20397

Re: Wellington fund

There was a rotation into value during the 2000 dot com bubble burst. I don’t know why Wellington did so well. It’s like they had a crystal ball. But my bet is that Wellington’s blue chip portfolio with a value tilt was the magic formula.
by Johnathon Livingston
Wed Aug 04, 2021 3:37 pm
Forum: Investing - Theory, News & General
Topic: Is the collective wisdom of the market all knowing?
Replies: 111
Views: 9908

Re: Is the collective wisdom of the market all knowing?

Yes, the collective wisdom of the market is all knowing. But, it’s also drunk.
by Johnathon Livingston
Tue Aug 03, 2021 3:18 pm
Forum: Personal Investments
Topic: Controlling Allocation Glide Path
Replies: 9
Views: 1137

Re: Controlling Allocation Glide Path

On the IRA you could put some in equities and the rest into LS 60/40 to achieve your 75/25 allocation. Then you could chip equities into the 60/40 each year or every few years to glide gradually or step down to the 60/40 allocation. I personally think making 1% changes will be a challenge vs stepping down 5 or 10 percent every so many years.