Search found 642 matches

by Day9
Mon Feb 18, 2019 2:20 am
Forum: Investing - Theory, News & General
Topic: Why is higher deficit not leading to higher interest rates?
Replies: 70
Views: 3135

Re: Why is higher deficit not leading to higher interest rates?

Could it simply mean there is high and growing investor demand for US Treasuries, perhaps because of how they were the only investment to do well in the 2008 crisis? They say generals always prepare for the last war.
by Day9
Mon Feb 18, 2019 1:54 am
Forum: Investing - Theory, News & General
Topic: Today I learned the 4% rule has been around for hundreds of years.
Replies: 26
Views: 4098

Re: Today I learned the 4% rule has been around for hundreds of years.

Pretty cool. By the same token a version of Harry Brown's permanent portfolio or three-asset allocation has been around for at least 2,500 years: “A person should always divide his money into three: one third in land, one third in commerce, and one third at hand’.” Would be curious to see a curated...
by Day9
Fri Feb 15, 2019 3:36 pm
Forum: Investing - Theory, News & General
Topic: Why is 401k maxing preferred over taxable?
Replies: 79
Views: 6111

Re: Why is 401k maxing preferred over taxable?

It may be easier to demonstrate how traditional 401k and Roth 401k come out equally if the effective tax rates are the same before and after retirement, because it is trivially obvious to see how a Roth 401k is better than a taxable account.
by Day9
Mon Feb 11, 2019 2:06 pm
Forum: Investing - Theory, News & General
Topic: "Don’t Compare Your Investment Returns With Others (Especially On The Internet)"
Replies: 34
Views: 3414

Re: "Don’t Compare Your Investment Returns With Others (Especially On The Internet)"

I feel this way about stories from real estate investors. Real estate is leveraged and undiversified so there are bound to be a lot of big winners and big losers in that space, but the big winners are louder.
by Day9
Wed Feb 06, 2019 11:06 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]
Replies: 572
Views: 29298

Re: HEDGEFUNDIE's excellent adventure [3x leveraged ETF strategy]

hohum wrote:
Wed Feb 06, 2019 8:50 pm
If you are in UPRO 100%, you will go down 90% in 2008. How many years of 24% returns does it take to recover from that?

You need an uncorrelated asset, and you need a lot of it.
I did the math. 10.7 years. 1.24^10.7 = 10
by Day9
Wed Feb 06, 2019 12:40 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]
Replies: 572
Views: 29298

Re: HEDGEFUNDIE's excellent adventure [3x leveraged ETF strategy]

I see OP has the most recent reply on user Rob Bertram's thread Should I use margin to buy a balanced fund? . OP: To answer your question about when these two assets will fall at the same time, I believe this happens more often when you look at real numbers, not nominal. During stagflation stocks go...
by Day9
Tue Feb 05, 2019 1:11 pm
Forum: Investing - Theory, News & General
Topic: If you are old, why bother with rebalancing!!?
Replies: 114
Views: 7613

Re: If you are old, why bother with rebalancing!!?

First you have to answer the question "Why rebalance at all?" then you can answer the more specific question "Why rebalance if you are old". If we disagree about the answer of the first question then we are just spinning our wheels trying to discuss the second.
by Day9
Sun Feb 03, 2019 11:38 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 3% is the new 4%
Replies: 302
Views: 21390

Re: Larry Swedroe: 3% is the new 4%

...They looked at all the 30-year periods in the past for a 60/40 portfolio. Many supported 5% or 6% a year withdrawals. Some supported 7% or 8% a year withdrawals. The worst ones only supported 4% a year withdrawals. Therefore, they said, "Hey, every 30-year period in the past supported between 4%...
by Day9
Sun Feb 03, 2019 4:00 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 3% is the new 4%
Replies: 302
Views: 21390

Re: Larry Swedroe: 3% is the new 4%

Thank you Mr Swedroe for your comments. One large group of people who do not have a "Plan B" are the "FIRE" Early Retirement group. The people who have an extremely large savings rate and retire extremely early (for example they save over 50% of their income and plan to retire at 40). These people a...
by Day9
Sat Feb 02, 2019 11:33 pm
Forum: Investing - Theory, News & General
Topic: investing in short term treasury vs CDs
Replies: 17
Views: 1550

Re: investing in short term treasury vs CDs

I've read FDIC insurance only covers the return of principal with CDs, whereas with Treasuries both your principal and the interest coupons are guaranteed. Could someone confirm this? It's probably not a big deal either way though.

EDIT: Thanks RickBoglehead, please see his response below.
by Day9
Wed Jan 16, 2019 9:50 pm
Forum: Investing - Theory, News & General
Topic: John Bogle has died at age 89
Replies: 856
Views: 49247

Re: John Bogle is dead at 89

Thank you Mr. Bogle. RIP.
by Day9
Tue Jan 15, 2019 3:05 pm
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 90
Views: 8980

Re: I Bond fixed rate = 0.5%

Can anyone comment on the idea of having a bond barbell using I Bonds as the low duration end? I suggested this idea earlier in this thread. For example, if your bond portfolio is all CDs and intermediate duration treasuries, then you can improve risk-adjusted returns by buying I-bonds and extending...
by Day9
Mon Jan 07, 2019 3:14 pm
Forum: Investing - Theory, News & General
Topic: Safe withdrawal rate at 38 years old
Replies: 95
Views: 7533

Re: Safe withdrawal rate at 38 years old

In the classic Trinity Study where the 4% rule was first coined, the 4% rule worked in 95% of historical 30-year retirement scenarios. It failed in scenarios like retiring just before the great depression or just before the stagflation of the 60s and 70s. If you changed this to a 3% rule, and extend...
by Day9
Fri Jan 04, 2019 12:35 pm
Forum: Investing - Theory, News & General
Topic: Just what is long-term investing?
Replies: 13
Views: 802

Re: Just what is long-term investing?

Mr Larry Swedroe has made this kind of comment many times over the years: In my more than 20 years as the director of research for Buckingham Strategic Wealth and The BAM Alliance, I’ve learned that, while financial economists understand that even 10 or 20 years of investment performance can be noth...
by Day9
Sun Dec 23, 2018 1:31 am
Forum: Investing - Theory, News & General
Topic: TIPS yield curve inverted at short end
Replies: 158
Views: 10791

Re: TIPS yield curve inverted at short end

4.836% real yield on TIPS maturing on April 15, 2019!? Isn't that really, really good?
by Day9
Sat Dec 22, 2018 8:28 pm
Forum: US Chapters
Topic: My Christmas Present To You
Replies: 108
Views: 11356

Re: My Christmas Present To You

Thank you Mr Larimore. I have learned a lot from you.
by Day9
Sat Dec 22, 2018 8:23 pm
Forum: Investing - Theory, News & General
Topic: Just how good is I-bonds' nominal guarantee during deflation?
Replies: 29
Views: 2976

Re: Just how good is I-bonds' nominal guarantee during deflation?

Thanks everyone. I updated the original post with another relevant section from the Bogleheads wiki. I would be thankful if someone could answer my original question: Just how good of a benefit is this? Is this a negligible benefit that will rarely happen and even when it does, provide a negligible ...
by Day9
Thu Dec 20, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Why contribute to retirement funds?
Replies: 43
Views: 3289

Re: Why contribute to retirement funds?

You only need 5 years of expenses in taxable. This is because of the technique called "Roth Conversion Ladder". You can convert some money from a traditional IRA to a Roth IRA. Then after 5 years you can withdraw that money penalty free. So each year in retirement you convert one year's worth of liv...
by Day9
Sun Dec 16, 2018 11:20 pm
Forum: Investing - Theory, News & General
Topic: Just how good is I-bonds' nominal guarantee during deflation?
Replies: 29
Views: 2976

Just how good is I-bonds' nominal guarantee during deflation?

From the bogleheads wiki: "if the real interest rate goes up, I-Bonds can be redeemed at accrued value anytime after you've held them for at least 12 months (you'd lose the last three months' interest if redeemed prior to five years), while TIPS go down in value. Advantage: I-Bonds." ( link ) How go...
by Day9
Wed Dec 12, 2018 2:41 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Best Behavioral Finance Books
Replies: 6
Views: 728

Re: Larry Swedroe: Best Behavioral Finance Books

In this article Mr Swedroe mentions his 2011 book Investment Mistakes Even Smart Investors Make and How to Avoid Them

Here is the Bogleheads forum "Investment Gems" thread by Mr Taylor Larimore on that book:
viewtopic.php?t=86277
by Day9
Fri Dec 07, 2018 9:38 pm
Forum: Investing - Theory, News & General
Topic: Buy I-bonds Jan 1 or May 1?
Replies: 6
Views: 803

Re: Buy I-bonds Jan 1 or May 1?

willthrill81 wrote:
Fri Dec 07, 2018 9:31 pm
Why not TIPS? Depending on the term, yields are around 1% right now.
Just because I-bonds can never go below par value no matter how high interest rates rise, and my plan is to make a bond barbell with I-bonds on the low end.

Thanks to everyone who replied.
by Day9
Fri Dec 07, 2018 7:46 pm
Forum: Investing - Theory, News & General
Topic: Buy I-bonds Jan 1 or May 1?
Replies: 6
Views: 803

Buy I-bonds Jan 1 or May 1?

The I-bonds fixed rate is currently 0.50%. Would it be better to buy I-bonds on January 1 or wait until the next announced rate, which is May 1? The current 0.5% rate is the highest it has been since Nov 2008 when it was 0.7% https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ir...
by Day9
Fri Dec 07, 2018 1:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Understanding TIPS
Replies: 36
Views: 3554

Re: Larry Swedroe: Understanding TIPS

I do a bond barbell with I-bonds as my short duration bonds, and longer term treasuries as my longer duration bonds. It works for me. But I think that any of the Boglehead-endorsed fixed-income strategies are almost nearly as good as each other. Total Bond, Intermediate high quality bonds, Intermedi...
by Day9
Sat Nov 10, 2018 1:17 pm
Forum: Investing - Theory, News & General
Topic: SWAN ETF - 10% Leaps / 90% Treasuries
Replies: 24
Views: 2120

Re: SWAN ETF - 10% Leaps / 90% Treasuries

The old Should I use margin to buy a balanced fund? thread has lots of discussion on leveraging up a high bond, low stock portfolio. Though I believe the person who started that thread uses futures, not Leaps. The book Lifecycle Investing by Nalebuff and Ayres discusses using Leaps but it leverages ...
by Day9
Thu Nov 01, 2018 10:35 pm
Forum: Investing - Theory, News & General
Topic: I Bond fixed rate = 0.5%
Replies: 90
Views: 8980

Re: I Bond fixed rate = 0.5%

My modest bond portfolio is just in treasuries and CDs at the moment. I don't have any TIPS or I-Bonds. I suspect that it would be a good idea to buy my $10,000 of I-Bonds, while simultaneously extending the duration of the rest of my bond portfolio a bit. I suspect I can improve my risk-adjusted re...
by Day9
Wed Oct 31, 2018 11:46 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Ignore Politics In Investing
Replies: 7
Views: 912

Re: Larry Swedroe: Ignore Politics In Investing

Thank you forum admins for enforcing the "No politics" rule. This article supports the argument that it is a good rule to have on an investment forum.
by Day9
Mon Oct 15, 2018 2:33 pm
Forum: Investing - Theory, News & General
Topic: Correlation between the FIRE movement and one of the greatest bull markets
Replies: 158
Views: 14351

Re: Correlation between the FIRE movement and one of the greatest bull markets

Unfortunately I believe FIRE is only for people who can afford an "above-modest" lifestyle, and are willing to downgrade to merely "modest" in case investments do poorly in critical years. It does not work for people who have barely enough to live a modest lifestyle because you cannot downgrade to b...
by Day9
Mon Oct 15, 2018 1:22 pm
Forum: Investing - Theory, News & General
Topic: Treasuries in higher tax state
Replies: 12
Views: 1284

Re: Treasuries in higher tax state

... Over the course of years, legally skirting the obligation to forfeit 9%, 10% or more of earnings annually to the state really adds up. Remember, people on this forum hyperventilate and break out into hives over fund expense ratios of far less than 1%—never mind 10%. I agree with your post in ge...
by Day9
Wed Oct 10, 2018 11:26 am
Forum: Investing - Theory, News & General
Topic: Vanguard website problems [Transactions won't go through, 500 error...]
Replies: 101
Views: 5105

Re: Anyone else having problems logging into Vanguard?

Lately I have been unable to access the "Balances & Holdings" page from both Google Chrome and Firefox browsers, and I have to use Internet Explorer to see this page. But I don't get any error message, the page just looks blank.
by Day9
Sat Sep 29, 2018 1:48 pm
Forum: Investing - Theory, News & General
Topic: Rich, Broke or Dead: Visualizing probabilities of outcomes in early retirement
Replies: 145
Views: 20107

Re: Rich, Broke or Dead: Visualizing probabilities of outcomes in early retirement

Could we estimate lower expected future returns by simply increasing the "Investment Fees" field by the amount that expected returns will be lower going forward? Plugged in OP's numbers: https://i.imgur.com/880Vcsc.png Again but with 2% investment fees, adjusting for 2 percentage point decrease in e...
by Day9
Fri Sep 21, 2018 11:00 pm
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1247
Views: 108682

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

If you can reliably answer both of those questions with any asset class, you should become a very successful investor indeed. My opinion is that return from commodities shouldn't exceed inflation by a lot and their risk is substantially higher than TIPS. In other words they are to be avoided. Possi...
by Day9
Sun Sep 09, 2018 10:31 pm
Forum: Investing - Theory, News & General
Topic: Commodities have never been cheaper - time to buy?
Replies: 46
Views: 5344

Re: Commodities have never been cheaper - time to buy?

The thing to do is add a splash of commodities while also increasing the duration of your bond portfolio. Commoidty and duration risk are complementary as one does well in unexpected inflation and the other in unexpected deflation. This lets you have a more efficient portfolio.
by Day9
Thu Sep 06, 2018 3:00 pm
Forum: Investing - Theory, News & General
Topic: Impact of early retirement on previously set glide path
Replies: 17
Views: 2382

Re: Impact of early retirement on previously set glide path

Mr Larry Swedroe gives the advice to have a "Plan B". That means if markets tank soon after you declare early retirement, you need to be able to take actions like go back to work, sell a second home, go on overseas trips once every 3 years instead of your planned every year. But you must plan this i...
by Day9
Tue Aug 21, 2018 1:41 pm
Forum: Investing - Theory, News & General
Topic: Oversimplifying expected return on rental properties
Replies: 12
Views: 1213

Oversimplifying expected return on rental properties

Two huge assumptions 1. Your rental income will equal the combined costs of the mortgage, property tax, maintenance, property manager (if any), and any other cost. In other words zero net cash flow. 2. The price of the property can be expected to keep up with inflation over the long term. With those...
by Day9
Mon Aug 20, 2018 7:56 pm
Forum: Investing - Theory, News & General
Topic: What has been the best returning major asset class since 2000?
Replies: 12
Views: 1578

Re: What has been the best returning major asset class since 2000?

Long-term treasuries have been a heck of a diversifier for TSM for quite some time. For the most part they have stepped in exactly when you would have needed them to, with few exceptions over the past 30 years. Whether this will continue to be the case obviously remains to be seen. My theory is tha...
by Day9
Mon May 21, 2018 3:41 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans To Launch Total World Bond ETF
Replies: 30
Views: 4559

Re: Vanguard Announces Plans To Launch Total World Bond ETF

And Vanguard continues to empower the average joe to get his fair share of the bounty of global capitalism. Thanks Mr Bogle!
by Day9
Mon May 14, 2018 7:11 pm
Forum: Investing - Theory, News & General
Topic: Good idea investing now in long term funds?
Replies: 57
Views: 5268

Re: Good idea investing now in long term funds?

I have heard two arguments, both from Larry Swedroe. One is extend duration when you can get 20bps/year duration. That is not even remotely the case now. The other is that a good bond for a high equity allocation is long bonds. If you mean to move from 100/0 to 90/10, that might make sense, but not...
by Day9
Wed May 09, 2018 11:55 pm
Forum: Investing - Theory, News & General
Topic: Stock & Bond Market Forecast
Replies: 18
Views: 2966

Re: Stock & Bond Market Forecast

Here is a page from the boglehead wiki:

Historical and expected returns - Expected future returns
https://www.bogleheads.org/wiki/Histori ... re_returns
by Day9
Mon May 07, 2018 3:23 pm
Forum: Investing - Theory, News & General
Topic: Retirement bonds, aka SeLFIES
Replies: 77
Views: 10153

Re: Retirement bonds

Any man who dies with more than $10,000 to his name has miscalculated. - Errol Flynn Adjusting for inflation since the year Flynn passed away (1959) amounts to $86,000. I'm in favor of any program to encourage people to save for retirement. Hopefully this French program has more success than the re...
by Day9
Tue May 01, 2018 3:04 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 10240
Views: 1806782

Re: U.S. stocks in freefall

. . . We must be getting accustomed to seeing the market drop . . . Thank you Mister Will, good point. The USA investors are at ease because they know that "markets always come back up." The same thing happened in Japan a couple of decades ago, for the Japanese investors a regular market drop was n...
by Day9
Tue May 01, 2018 2:27 pm
Forum: Investing - Theory, News & General
Topic: 401k Stable Value Fund Rates?
Replies: 35
Views: 3447

Re: 401k Stable Value Fund Rates?

I just reread the section on Stable Value Funds in Larry Swedroe's book The Only Guide You'll Ever Need for the Right Financial Plan and he says "Generally not recommended" though sometimes it is the best choice in a 401k where your only other fixed income choices are high fee actively managed funds...
by Day9
Fri Apr 27, 2018 1:07 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Liquidity Risk Not Worth It
Replies: 35
Views: 6008

Re: Larry Swedroe: Liquidity Risk Not Worth It

This contradicts what economic theory would predict and contradicts some previous literature. For me this essay was simply a reminder to take risk on the equity side. I agree but to clarify Mr Swedroe would say to just take only term or duration risk on the bond side -- and not even that much (5 ye...
by Day9
Thu Apr 26, 2018 1:12 pm
Forum: Investing - Theory, News & General
Topic: Wells Fargo (again!) - DOL: "WF pushing 401k's to IRA's"?
Replies: 20
Views: 2874

Re: Wells Fargo (again!) - DOL: "WF pushing 401k's to IRA's"?

I'm curious if a 401k has stronger legal protections than IRAs. Like if someone slips and falls on your property and sues you, or you rack up huge medical bills, if they can go after your IRA money but not your 401k money. I hear a rumor that this is true and depends on your local state laws but I c...
by Day9
Wed Apr 25, 2018 10:46 pm
Forum: Investing - Theory, News & General
Topic: Jeremy Siegel's 1/3, 1/3, 1/3 diversification
Replies: 28
Views: 5522

Re: Jeremy Siegel's 1/3, 1/3, 1/3 diversification

A few years ago Mr Swedroe recommended on this board for someone who wanted to tilt more toward international and emerging markets due to higher expected returns due to valuations: So with global market cap at 50% international (1/4 of that being EM) might go to say 60% and 1/3 of that EM. But be su...
by Day9
Mon Apr 16, 2018 4:11 pm
Forum: Investing - Theory, News & General
Topic: Cash instead of bonds?
Replies: 59
Views: 10343

Re: Cash instead of bonds?

Very similar to Buffet's advice to his heirs or wife. Something like 90% in low cost S&P 500 fund, rest in T-Bills. "Simplicity is the master key to financial success. When there are multiple solutions to a problem, choose the simplest one." — Investing With Simplicity, John Bogle ( http://www.vangu...
by Day9
Wed Apr 11, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets tilt
Replies: 37
Views: 5101

Re: Emerging markets tilt

A few years ago Mr Swedroe recommended on this board for someone who wanted to tilt more toward international and emerging markets due to higher expected returns due to valuations: So with global market cap at 50% international (1/4 of that being EM) might go to say 60% and 1/3 of that EM. But be su...
by Day9
Mon Apr 09, 2018 7:42 pm
Forum: Investing - Theory, News & General
Topic: Why not annuitize most of portfolio?
Replies: 104
Views: 9951

Re: Why not annuitize most of portfolio?

Annuities are a great hedge against longevity risk (outliving your money) If you intend to leave a big legacy or inheritance then you can't do that with a normal annuity (except for survivor benefits which you can't do with a charity for example). If you don't care about leaving a legacy or inherita...
by Day9
Mon Apr 09, 2018 12:03 pm
Forum: Investing - Theory, News & General
Topic: Any value investor buying a Russia fund?
Replies: 92
Views: 7862

Re: A good time [price wise] to buy Russian Stocks?

VWO, Vanguard Emerging Market Stock Index by country:

Image
by Day9
Thu Mar 15, 2018 8:06 pm
Forum: Investing - Theory, News & General
Topic: Vanguard fund for Long Term Goverment Funds VLGSX or VUSUX?
Replies: 3
Views: 610

Re: Vanguard fund for Long Term Goverment Funds VLGSX or VUSUX?

Just buy individual treasury bonds at vanguard's bond desk. 0 expense ratio and you can customize the duration and convexity of your bond portfolio.
by Day9
Mon Mar 12, 2018 1:16 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Count Out Commodities
Replies: 51
Views: 7442

Re: Larry Swedroe: Don’t Count Out Commodities

Random....Agreed, a good article. Just because I like to 'stir the pot' every once in awhile ....why not hold physical gold/silver/platinum, as opposed to a CCF? I have gold (1 oz bars, American Eagles - not too much), and silver. Is that 'wrong'? Physical metals and CCFs perform different roles in...