Search found 395 matches

by jmk
Sun Jan 13, 2019 3:27 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities- TSM's worst rolling averages

Following Siamond's idea to study more portfolio ideas, I have a tool that generates a similar chart for any asset allocation you like (although it doesn't extend as far as your data). Of course at that point it's more of a portfolio yield curve, but I've often used that minimum line for a lot of t...
by jmk
Sun Jan 13, 2019 3:15 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities- TSM's worst rolling averages

Another, of course, is not including international data. I get why (the criticism of the data set not being accurate), but believe other papers I have read quoted the Great Depression trough would have been reduced to -60% or something or so if added in international equity returns (60/40 or someth...
by jmk
Sat Jan 12, 2019 12:52 pm
Forum: Investing - Theory, News & General
Topic: Simba's backtesting spreadsheet [a Bogleheads community project]
Replies: 1133
Views: 640739

Re: Spreadsheet for backtesting (includes TrevH's data)

For actual backtesting, Chromebook and other non-Excel (or Excel-clone) users are best served by Portfolio Visualizer . Maybe PV will incorporate the pre-1972 data someday. You can upload your own data sets into PV going earlier than its defaults. There is some limit on first year though (1900?), b...
by jmk
Sat Jan 12, 2019 12:39 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities- TSM's worst rolling averages

I like the fact that you didn't solely focus on the worst case, but also showed the 5% percentile (I would have gone further and used a higher low percentile, actually). The worst case is one data point, one singularity in the past, it really doesn't mean much. The "worst case" is the whole point o...
by jmk
Sat Jan 12, 2019 12:06 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities- TSM's worst rolling averages

I wish I had the quotation, but Nassim Nicholas Taleb has pointed out that the worst case that has ever occurred is always , by definition worse than what had been thought to be the "worst case" up to then. Well, yes. And I too shared this concern in the second post in the thread above. ("there is ...
by jmk
Sat Jan 12, 2019 11:49 am
Forum: Investing - Help with Personal Investments
Topic: Biggest Investment Mistake
Replies: 164
Views: 11158

Re: Biggest Investment Mistake

Not taking advantage of space in the 0% bracket when I was between jobs.
by jmk
Fri Jan 11, 2019 7:55 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities- TSM's worst rolling averages

Remember that plotting annual average (CAGR) over longer and longer time periods is misleading. The actual outcome at the end of a long period of time results from compounding the annual average over that time. While CAGR variation shrinks with extending time by roughly the square root of time, the...
by jmk
Wed Jan 09, 2019 2:17 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities- TSM's worst rolling averages

Does Huxley and Burns research suggest that one should have around 20 years of "safe "assets for essential expenses and not utilize the probability based theory of AA , rebalancing etc? No Antiqueman, Huxley and Burns don't use a 20x or probability based AA. They advocate for a more precise liabili...
by jmk
Tue Jan 08, 2019 5:27 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Re: Using TSM for Essential Liabilities

Some cautions about the above analysis and Huxley and Burns' maximin idea in general : there is no law of nature that says the worst case over the historical time period 1871-2018 can't get even worse in the future (cf Taleb) even extending back to 1871, there are relatively few independent 40 and 5...
by jmk
Sun Jan 06, 2019 10:59 pm
Forum: Investing - Theory, News & General
Topic: Using TSM for Essential Liabilities- TSM's worst rolling averages
Replies: 18
Views: 1630

Using TSM for Essential Liabilities- TSM's worst rolling averages

In their 2004 book Asset Dedication: How to Grow Wealthy with the Next Generation of Asset Allocation , Stephen Huxley and Brent Burns introduce an intriguing idea of the "equity yield curve". For the purpose of funding essential liabilities, the authors suggest that rather than comparing means betw...
by jmk
Sat Jan 05, 2019 12:19 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA traditional and asset allocation conundrum
Replies: 7
Views: 528

Re: TIAA traditional and asset allocation conundrum

Since you are struggling with how to integrate an income stream (the annuity) with your asset allocation, maybe you should switch to a liability matching framework? You seem to have a good grasp on your year by year expense needs going forward, and you have some solid sources of income with the TIAA...
by jmk
Wed Dec 19, 2018 10:56 pm
Forum: Investing - Theory, News & General
Topic: Why did you decide to change your asset allocation?
Replies: 45
Views: 1981

Re: Why did you decide to change your asset allocation?

I originally started with 50/50 for long term monies and 30/70 for short term monies. The 50/50 came from William Sharpe's comment that he did 50/50 since he didn't know which would do better. But I solidified the 50/50 by doing an imagination exercise on what I emotionally could handle in a crash. ...
by jmk
Mon Dec 17, 2018 3:20 pm
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

My main "wiggle room" is my 403b, which due to its 1% fees only gets the minimum to stay within the 12%/0 CG bracket. Since you are close to retirement, you should max this out. When you retire, you can get rid of the 1% fees by rolling the 403(b) into in IRA, and the tax savings will be much more ...
by jmk
Mon Dec 17, 2018 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

I am planning on doing extensive DAF once I am secure in my retirement, .... A couple of things: 1. If you are low income, then you are in the 0% LT capital gains tax bracket like me. With both our salaries I'm currently over the 12% line unless I use 403bs/HSAs. With those I stay just within. In 2...
by jmk
Mon Dec 17, 2018 2:50 pm
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

Are you looking at your AA over all of your accounts put together? If you have too much money in taxable stocks then rebalancing away from stocks would mean shifting tax advantaged money away from stocks. If you have no way of moving away from stocks without a tax hit then you should have $0 in sto...
by jmk
Mon Dec 17, 2018 12:30 pm
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

As I'm approaching 3 years from early retirement with just enough to last me 48 years, I'm having the daunting realization that I'm quite vulnerable to sequence of return risk. If you are 50/50 with 48 years expenses saved, it seems unlikely you would have to sell stocks to fund retirement anytime ...
by jmk
Mon Dec 17, 2018 11:56 am
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

Am I missing anything? Have you heard about The Grinch? With enough to last 48 years, you can give away equities held longer than a year to your Donor-Advised Fund then to charities. You will not pay capital gains taxes on the gift and you will be able to itemize on Schedule A because you will be g...
by jmk
Mon Dec 17, 2018 11:49 am
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

We just reallocate using our 401(k) assets. For example, if we needed to decrease our overall equity allocation and didn’t want to incur long-term capital gains, we would not touch the taxable equities and instead reduce equities in the 401(k). As I stated in my original post, my 403b/roth/IRA is a...
by jmk
Mon Dec 17, 2018 11:47 am
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

Re: How to decrease stock AA when it's in taxable

In 3 years after I stop working I can sell off with zero CG, but that's then and this is now. Perhaps the 25% capital gains of a sale now wouldn't be the end of the world compared with needing to work years longer after a crash in the next few years. Am I missing anything? Make sure you understand ...
by jmk
Sun Dec 16, 2018 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 24
Views: 1550

How to decrease stock AA when it's in taxable

Hoping for some help with a AA/taxation quandary. What do you do when your AA needs to change suddenly, but you don't want to trigger a lot of capital gains? Longer version: My AA has been 50/50 for a long time, with the vast majority of the CD/TBM portion in Tax sheltered vehicles (Roth,tax-deferre...
by jmk
Wed Dec 05, 2018 5:37 pm
Forum: Personal Consumer Issues
Topic: Best values at Costco? Honestly, a little disappointed...
Replies: 188
Views: 21000

Re: Best values at Costco? Honestly, a little disappointed...

Costco has good prices on name brand items. If you're a non-name-brand person, you can often get a better deal at e.g. Trader Joe's.
However, there are plenty of exceptions where the name brand on sale at costco is cheaper than generic, or you prefer name brand,
by jmk
Thu Nov 29, 2018 5:44 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market Index Fund vs. CDs?
Replies: 39
Views: 9457

Re: Total Bond Market Index Fund vs. CDs?

Which of the two do you prefer as an investment, and why? Given the rates now are higher for CDs then bond funds of equivalent risk, I prefer CDs. Especially for meeting liabilities: the amount at maturity won't be less than expected. Bonds funds don't always make their yield, even at their duration.
by jmk
Thu Nov 29, 2018 12:37 pm
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc
Replies: 290
Views: 27326

Re: "Open Social Security" calculator: feature requests, bug reports, etc

It might just be me, but is anyone else confused by the figures in the generated "Year-by-Year Benefit Amounts" table? For ease of understanding, the table simply reports current year dollars -- not discounted and not probability-weighted. Otherwise, for example, a person's retirement benefit would...
by jmk
Wed Nov 28, 2018 11:24 pm
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc
Replies: 290
Views: 27326

Re: "Open Social Security" calculator: feature requests, bug reports, etc

It might just be me, but is anyone else confused by the figures in the generated "Year-by-Year Benefit Amounts" table? After reading the background info carefully I'm thinking these figures represent future real dollars anchored the year you'd turn 62, or perhaps the year you start getting benefits....
by jmk
Wed Nov 28, 2018 11:17 pm
Forum: Investing - Theory, News & General
Topic: Monte Carlo failure tolerance?
Replies: 54
Views: 3812

Re: Monte Carlo failure tolerance?

Getting back to original question, for me it depends on context. For instance, I recently set up a bootstrap monte carlo to compare safe withdrawal rates for 50/50 vs 20/80 vs 90/10 allocations. I used 75% here since the exact answer didn't matter much, but I wanted to capture the "down side" not ju...
by jmk
Fri Nov 23, 2018 9:58 am
Forum: Investing - Theory, News & General
Topic: Small Value: 15 years of underperforming
Replies: 143
Views: 11675

Re: Small Value: 15 years of underperforming

Robert T wrote:
Fri Nov 23, 2018 8:36 am

"What matters over the long-haul is factor exposure and expense" - not fund names. Focus on factor exposure not on what a fund is named (the latter confuses the discussion IMO).
I’m assuming then that Vanguard’s factor funds are the cheapest way to go then?
by jmk
Wed Nov 14, 2018 6:26 pm
Forum: Personal Finance (Not Investing)
Topic: Time Value of Money vs. Variable Percentage Withdrawal (VPW)
Replies: 114
Views: 7279

Re: Variable Percentage Withdrawal (VPW)

Then let's continue the discussion in that vein. Why could a TVM (i.e. annuitization) approach work or not work to model a full retirement plan? Given that it's a generalized form of the VPW approach, I see no reason why not beyond the aforementioned 'hands on' aspect, which is frankly a feature mo...
by jmk
Sun Nov 11, 2018 2:28 am
Forum: Investing - Theory, News & General
Topic: What's Your Fixed Income Strategy?
Replies: 89
Views: 8912

Re: What's Your Fixed Income Strategy?

Years to retirement or already in retirement?(how many years in?) Hope to retire early in 2 years, age 57. Fixed income allocation as part of total allocation (Equity/Fixed Income) 50% of long term bucket. 30% of short term bucket. But... worried about sequence of returns risk to retire. If market ...
by jmk
Thu Nov 08, 2018 8:27 pm
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 794
Views: 264944

Re: Variable Percentage Withdrawal (VPW)

Ok Legit source, but I find it interesting that they're expecting such a massive increase in the number of people that will reach/exceed age 100, vs. what we have actually seen so far. The article I linked discussed the fact that what we've seen so far, didn't come close to what we expected. With r...
by jmk
Mon Nov 05, 2018 11:37 am
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 794
Views: 264944

Re: Variable Percentage Withdrawal (VPW)

Looking at longevityillustrator for instance, I see that there is a 50% chance at 55 that either my wife and I will live to 100. So if I were to retire today this would be a reasonable number to use in the vpw equations for my first years of withdrawals. (100-55=45). I'd find another actuarial webs...
by jmk
Mon Nov 05, 2018 12:00 am
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 794
Views: 264944

Re: Variable Percentage Withdrawal (VPW)

What are the negatives to adapting VPW by using a dynamic lifespan in the pmt equation rather than a fixed figure? I'm thinking of (a) the odds of living longer and longer extend out as one actually gets older, (b) it matters more to "get it right" as one approaches higher probabilities of the end. ...
by jmk
Sat Nov 03, 2018 10:37 am
Forum: Investing - Theory, News & General
Topic: FRED inflation--breakeven vs forward expectation estimate?
Replies: 5
Views: 412

FRED inflation--breakeven vs forward expectation estimate?

The FRED has figures for "breakeven" 5, 10, 20, 30 year inflation rates, based on the difference between inflation adjusted and nominal treasuries. https://fred.stlouisfed.org/categories/33446 The 5 year "breakeven" inflation is currently 1.88%. The breakeven inflation rate represents a measure of e...
by jmk
Sun Oct 28, 2018 2:41 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market Fund - interest rates rising!
Replies: 147
Views: 16866

Re: Total Bond Market Fund - interest rates rising!

Kevin, those threads about two times duration to earn the initial yield in times of rising rates would be an interesting read and would also be something more people should understand. Can you provide the links? Advocates for 2 x duration minus 1: https://www.etf.com/sections/etf-strategist-corner/...
by jmk
Fri Oct 19, 2018 10:28 am
Forum: Personal Finance (Not Investing)
Topic: Downloadable Social Security Benefit Estimator (repost)
Replies: 100
Views: 13050

Re: Downloadable Social Security Benefit Estimator (repost)

That must be it. My wife’s birthday is late in December. Mine is early February but not first couple days.

It sounds like your spreadsheet should assume 62+1 month for 93% of cases. :)

Btw thank you for sharing this spreadsheet.
by jmk
Fri Oct 19, 2018 12:44 am
Forum: Personal Finance (Not Investing)
Topic: Downloadable Social Security Benefit Estimator (repost)
Replies: 100
Views: 13050

Re: Downloadable Social Security Benefit Estimator (repost)

When I compare this spreadsheet to the Anypia, the two agree for age 67 and age 70. But not early age 62+1 month. Weird how only different in that one scenario. Any ideas? For both me and my wife, top line is Anypia with "none" for CPI increase and "none" for Avg Wage increase, bottom line is neuros...
by jmk
Sat Sep 29, 2018 8:12 pm
Forum: Personal Finance (Not Investing)
Topic: Downloadable Social Security Benefit Estimator (repost)
Replies: 100
Views: 13050

Re: Downloadable Social Security Benefit Estimator (repost)

The interesting thing is if I leave things at "0" in both your calculator and Anypia, the results are identical for retiring at age 67. But your results are lower for age 62 and higher for 70. Yet Anypia produces the same results for ages 62, 67, 70, unless I'm doing something wrong in entry. For i...
by jmk
Sat Sep 29, 2018 6:18 pm
Forum: Personal Finance (Not Investing)
Topic: Downloadable Social Security Benefit Estimator (repost)
Replies: 100
Views: 13050

Re: Downloadable Social Security Benefit Estimator (repost)

My calculator is defaulted to "zero" for both future CPI increase and future wage growth. These are the defaults used in all the SS calculators online and the mailed benefit statements/estimates. But anypia allows you to set your own defaults. In your screenshot, you see you can choose any of the 3...
by jmk
Sat Sep 29, 2018 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Downloadable Social Security Benefit Estimator (repost)
Replies: 100
Views: 13050

Re: Downloadable Social Security Benefit Estimator (repost)

I'm getting vastly different results from neurosphere's spreadsheet than ANYPIA. My calculator is defaulted to "zero" for both future CPI increase and future wage growth. These are the defaults used in all the SS calculators online and the mailed benefit statements/estimates. But anypia allows you ...
by jmk
Sat Sep 29, 2018 9:29 am
Forum: Personal Finance (Not Investing)
Topic: Downloadable Social Security Benefit Estimator (repost)
Replies: 100
Views: 13050

Re: Downloadable Social Security Benefit Estimator (repost)

I'm getting vastly different results from neurosphere's spreadsheet than ANYPIA. Neurosphere is about 27% lower. With ANYPIA I use the most pessimistic assumptions option from the 2018 Trustee Report (alternative III) for both benefit increase and average wage increase. https://i.imgur.com/8rOSYky.p...
by jmk
Sun Sep 23, 2018 12:25 pm
Forum: Personal Consumer Issues
Topic: Minimalist Lifestyle
Replies: 92
Views: 11847

Re: Minimalist Lifestyle

My version of minimalism is more mild: don't buy anything to youthat doesn't add real "value" to your life. So if you can keep your tortillas warm with two places don't buy a special tortilla holder. If you have one good knife that does 80% of everything you don't buy twelves knives. Etc.
by jmk
Thu Sep 13, 2018 10:57 pm
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 484
Views: 75460

Re: 2-year CDs at Vanguard and Fidelity Today

I checked and saw that the top rate now is 2.90%. Which comes to about a 2.85% APY (if you store coupon payments in Prime Money market), higher than the current 2y bank CDs by about 0.1%. Actually, assuming semi-annual coupons are reinvested at the current Prime MM yield of 2.09%, I come up with an...
by jmk
Wed Sep 12, 2018 10:25 pm
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 484
Views: 75460

Re: 2-year CDs at Vanguard and Fidelity Today

Kevin M wrote:
Wed Sep 12, 2018 8:04 pm
I checked and saw that the top rate now is 2.90%.
Which comes to about a 2.85% APY (if you store coupon payments in Prime Money market), higher than the current 2y bank CDs by about 0.1%.
by jmk
Mon Sep 10, 2018 8:21 pm
Forum: Investing - Theory, News & General
Topic: 3 fund portfolio with Money Market instead of Bonds
Replies: 26
Views: 3022

Re: 3 fund portfolio with Money Market instead of Bonds

Portfolio 1, blue, 100% "US Stock Market" Portfolio 2, red, 60% "US Stock Market," 40% "Intermediate-term Treasuries" In portfolio 2 we replaced 40% of the portfolio with a less volatile asset. What happened? Source https://imgur.com/h7Y58ro.png The standard deviation was reduced from 15.32% to 9.6...
by jmk
Mon Sep 10, 2018 7:51 pm
Forum: Investing - Theory, News & General
Topic: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com
Replies: 69
Views: 5905

Re: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com

R2D2's analysis is purely mathematical and not historical. It produces a well known and documented problem in that it does not incorporate mean reversion, which can make a very big difference in the outcome. You can set Portfolio Visualizer to use blocks of n years in doing the bootstrapping. This ...
by jmk
Sun Sep 09, 2018 2:20 pm
Forum: Investing - Help with Personal Investments
Topic: Non V Alternative funds through VBS?
Replies: 3
Views: 375

Re: Non V Alternative funds through VBS?

Can anyone give me some guidance in finding alternative funds through Vanguard for purposes of factor diversification added to standard TSM 60/TBM 40? . . . Before adding expensive alternative funds which depend on manager skill/luck, you might want to consider diversifying through asset classes su...
by jmk
Sat Sep 08, 2018 6:57 pm
Forum: Investing - Help with Personal Investments
Topic: Non V Alternative funds through VBS?
Replies: 3
Views: 375

Non V Alternative funds through VBS?

Can anyone give me some guidance in finding alternative funds through Vanguard for purposes of factor diversification added to standard TSM 60/TBM 40 (with intl)? The 133 or so alternative class ETFs from other companies seem to involves Transaction fees (not be included in the NTF lineup). Filterin...
by jmk
Fri Sep 07, 2018 11:54 pm
Forum: Investing - Theory, News & General
Topic: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com
Replies: 69
Views: 5905

Re: Historical SWR vs. Monte Carlo on PortfolioVisualizer.com

Now that I think about it, there really are three methodologies one could use: 1. Look at past history and keep everything "in order", 2. Use bootstrapping from historical returns (in other words, do Monte Carlo on historical returns and allow things to get out of order), and 3. Use Monte Carlo wit...
by jmk
Sat Aug 25, 2018 3:58 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: TIPS Versus Nominal Bonds
Replies: 47
Views: 4659

Re: Larry Swedroe: TIPS Versus Nominal Bonds

b. Why do CDs yield more than Treasuries? If the market is efficient and they are both basically riskless, why does one yield more than the other? Possible factors: While CDs have FDIC protection, they are still less safe than Treasuries. (FDIC might fail, there is a delay in getting money when ban...