Search found 730 matches

by jdilla1107
Thu Sep 19, 2019 9:49 am
Forum: Investing - Theory, News & General
Topic: Is the 60/40 portfolio allocation strategy being killed?
Replies: 116
Views: 9952

Re: Is the 60/40 portfolio allocation strategy being killed?

I am 70/30 which allows me to ignore all of the debates and articles about 60/40. :twisted:
by jdilla1107
Wed Sep 11, 2019 8:55 pm
Forum: Investing - Theory, News & General
Topic: How and where to invest for a 92-year-old?
Replies: 20
Views: 1537

Re: How and where to invest for a 92-year-old?

A single payment immediate annuity (SPIA) looks like it would pay around $7,000 a month on $400k for a 90 year old male. He’s 92 and I don’t think any company will write such an annuity. Gill I used the google. This page lists 95 as the max age: https://www.fidelity.com/annuities/immediate-fixed-in...
by jdilla1107
Wed Sep 11, 2019 8:42 pm
Forum: Investing - Theory, News & General
Topic: How and where to invest for a 92-year-old?
Replies: 20
Views: 1537

Re: How and where to invest for a 92-year-old?

A single payment immediate annuity (SPIA) looks like it would pay around $7,000 a month on $400k for a 90 year old male.
by jdilla1107
Wed Sep 11, 2019 7:21 pm
Forum: Investing - Theory, News & General
Topic: How to compare Bond fund vs CD?
Replies: 7
Views: 1179

Re: How to compare Bond fund vs CD?

The SEC yield is actually 2.02% on BIV. You want to compare with the SEC yield, not the distribution yield. The SEC yield can be seen here: https://investor.vanguard.com/etf/profile/BIV So, the CD rate is better than you are thinking. The CD could under perform BIV in the future for the following re...
by jdilla1107
Tue Sep 10, 2019 10:31 pm
Forum: Investing - Theory, News & General
Topic: Explaining the Demise of Value Investing
Replies: 318
Views: 16598

Re: Explaining the Demise of Value Investing

. And even here I cited simple explanations, that they have much higher SD of earnings, tend to have more irreversible capital (cannot cut expenses in recessions), and more leverage, and fewer sources of capital and first to get cut off in flights to quality, and of course more volatile over time a...
by jdilla1107
Tue Sep 10, 2019 6:35 pm
Forum: Investing - Theory, News & General
Topic: Explaining the Demise of Value Investing
Replies: 318
Views: 16598

Re: Explaining the Demise of Value Investing

The limitations of backtesting have been discussed in detail on this forum. We all know about cognitive bias, data mining, and the like but just want to point out that nearly every investing argument refers to market history. We also make reasonable assumptions from history and project them into th...
by jdilla1107
Mon Sep 09, 2019 7:54 pm
Forum: Investing - Theory, News & General
Topic: My trend following strategy and experience
Replies: 921
Views: 62562

Re: My trend following strategy and experience

I wonder if the "cultural memory" of Dotcom & GFC will mean we'll have to wait a long time for trend following profits. We certainly might. Almost any trend following system would have lagged buy-and-hold significantly from about 1981-1999. From 1990-1999, a 10 month moving average strategy, using ...
by jdilla1107
Mon Sep 09, 2019 6:01 pm
Forum: Investing - Theory, News & General
Topic: 5% Withdrawal Rate Recommended by US News Columnist
Replies: 141
Views: 11396

Re: 5% Withdrawal Rate Recommended by US News Columnist

The way the article is written, he is talking about a 5% withdrawal of each year’s portfolio value. Not an inflation-adjusted 5% of the initial value. The problem with this interpretation is that the article starts with: Established in 1994 by financial advisor William Bengen, the rule stipulates t...
by jdilla1107
Sun Sep 08, 2019 2:26 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Does The 4% Rule Work In Today’s Markets?
Replies: 144
Views: 10295

Re: Wade Pfau: Does The 4% Rule Work In Today’s Markets?

I always like to compare these claims vs. the cost of a CPI-adjusted annuity as well as an annuity that adjusts at 3%/yr. (which is cheaper than the CPI option and are available from higher-quality insurers) Inflation adjusted: 65 year old couple: 3.34% 65 year old male: 4.20% 3% COLA 65 year old c...
by jdilla1107
Sun Sep 08, 2019 8:10 am
Forum: Personal Finance (Not Investing)
Topic: Actually considering Roth 401k
Replies: 22
Views: 1831

Re: Actually considering Roth 401k

Several people seem to be thinking that $17.6% will be your marginal rate. I don't think so, but maybe you can clarify that. You probably say that because there's no 17.6% bracket, but given that the OP is discussing a solo 401(k) there actually is a 17.6% bracket for those in the 22% bracket for w...
by jdilla1107
Sat Sep 07, 2019 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: Actually considering Roth 401k
Replies: 22
Views: 1831

Re: Actually considering Roth 401k

What is your projected retirement marginal tax bracket? Will you have the ability to do Roth conversions in the future in the 12/15% brackets? I think in retirement I will be near the border of today's 12/22% line. I also already have $400k of tax deferred that I will need to convert/spend. Althoug...
by jdilla1107
Sat Sep 07, 2019 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: Actually considering Roth 401k
Replies: 22
Views: 1831

Actually considering Roth 401k

I have been in high tax brackets for a long time. A traditional 401k always made the most sense to me. This year I will be in a much lower tax bracket and I have a Solo 401k. I have always been someone who would recommend that most people make a deductible contribution. However, after running tax so...
by jdilla1107
Fri Sep 06, 2019 6:57 pm
Forum: Investing - Theory, News & General
Topic: Explaining the Demise of Value Investing
Replies: 318
Views: 16598

Re: Explaining the Demise of Value Investing

Jags4186 wrote:
Fri Sep 06, 2019 5:54 pm
Where’s the article on the demise of international investing?
Does anyone claim that international equities expose a premium which can lead to sustained long term outperformance?
by jdilla1107
Thu Sep 05, 2019 3:15 pm
Forum: Investing - Theory, News & General
Topic: Where to put excess College savings once 529 Goals are met.
Replies: 17
Views: 1427

Re: Where to put excess College savings once 529 Goals are met.

Consider still putting it in a 529. The penalty for non-qualified withdrawals is only 10% of earnings . Since you are so close to college, just stick it in a 529 bond fund and you will pay a small amount in penalty in 5 years, if you don't use it. You could even come out ahead if your marginal tax r...
by jdilla1107
Thu Sep 05, 2019 12:31 pm
Forum: Investing - Theory, News & General
Topic: In an (imaginary!) 5X leveraged ETF what would happen if the base index fell more than 20% in a single day?
Replies: 26
Views: 1998

Re: In an (imaginary!) 5X leveraged ETF what would happen if the base index fell more than 20% in a single day?

Note that equity exchanges have circuit breakers now that would not allow a drop larger than 20% in one day. Here are the different circuit breakers. https://personal.vanguard.com/us/content/Funds/FundsToolsCircuitBreakersJSP.jsp So, you would just lose all your equity at the end of the day. Whoever...
by jdilla1107
Thu Sep 05, 2019 12:01 pm
Forum: Investing - Theory, News & General
Topic: Index Funds Bubble? [Michael Burry article]
Replies: 216
Views: 20934

Re: Everyone here has misunderstood the Michael Burry article

But I don't think anyone is claiming there's a dangerous bubble in inverse and leveraged ETFs that's going to bring down the financial system. I'm guessing the Proshares 2X S&P ETF, SSO might be one of the bigger ones, total assets $2.2 billion. UBT, the 2X Treasury ETF, which might have been menti...
by jdilla1107
Thu Sep 05, 2019 11:51 am
Forum: Investing - Theory, News & General
Topic: Index Funds Bubble? [Michael Burry article]
Replies: 216
Views: 20934

Re: Everyone here has misunderstood the Michael Burry article

What do index futures have to do with passive investing though? The indexes existed long before index funds did. And index futures can exist even if index funds didn’t exist. Exactly. What did CDOs have to do with passive investing? Nothing. They were only responsible for one the most massive liqui...
by jdilla1107
Thu Sep 05, 2019 11:33 am
Forum: Investing - Theory, News & General
Topic: Index Funds Bubble? [Michael Burry article]
Replies: 216
Views: 20934

Re: Everyone here has misunderstood the Michael Burry article

If I intentionally choose a ridiculously narrow ETF from a non-Vanguard company, ESPO, the VanEck Vectors Video Gaming and eSports ETF, I see this. (These are dollars, not thousands!) Here is an image pulled from the Direxion Prospectus with is a large provider of leveraged ETFs: https://i.imgur.co...
by jdilla1107
Thu Sep 05, 2019 9:48 am
Forum: Investing - Theory, News & General
Topic: Index Funds Bubble? [Michael Burry article]
Replies: 216
Views: 20934

Re: Everyone here has misunderstood the Michael Burry article

With the CME, I think it's a zero sum game and everybody playing knows that. I might be wrong about that, though. But, the zero sum game only works if the losers are willing and able to keep paying the winners. If you jolt the system hard enough and the losers go out of business, you are in liquidi...
by jdilla1107
Thu Sep 05, 2019 9:20 am
Forum: Investing - Theory, News & General
Topic: Index Funds Bubble? [Michael Burry article]
Replies: 216
Views: 20934

Everyone here has misunderstood the Michael Burry article

[Merged here -- moderator oldcomputerguy] There is a long thread here: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=289284 about Michael Burry's statements with regards to an index fund bubble and comparing index funds to CDOs. I think almost everyone here has entirely missed his point. I ...
by jdilla1107
Thu Sep 05, 2019 7:55 am
Forum: Investing - Theory, News & General
Topic: Conceptual Q - Bonds vs Bond Funds
Replies: 19
Views: 943

Re: Conceptual Q - Bonds vs Bond Funds

Individual bonds fluctuate in price on a daily basis too. You could choose to not look at those price fluctuations and just tell yourself that you are earning a constant yield for the length of the bond. But, you could also do this with a bond fund. Just don't look at the price. I think this is whe...
by jdilla1107
Wed Sep 04, 2019 8:09 pm
Forum: Investing - Theory, News & General
Topic: Conceptual Q - Bonds vs Bond Funds
Replies: 19
Views: 943

Re: Conceptual Q - Bonds vs Bond Funds

Individual bonds fluctuate in price on a daily basis too. You could choose to not look at those price fluctuations and just tell yourself that you are earning a constant yield for the length of the bond. But, you could also do this with a bond fund. Just don't look at the price. Another thought expe...
by jdilla1107
Fri Aug 30, 2019 12:01 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing with EE Bonds
Replies: 23
Views: 1274

Re: Rebalancing with EE Bonds

I don't pretend to be an expert on this. But you can get 3% from several institutions with only a 5 year commitment and relatively small EWPs, and just a little less than that with a 2 year commitment. Even my Fidelity money market account, which I use as a bank account with ATM access, gets better...
by jdilla1107
Thu Aug 29, 2019 10:57 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Factor Investing Works (Despite What Some May Say)

willthrill81 wrote:
Thu Aug 29, 2019 10:51 pm
By spreading risk across the equity, small, and value premia, it has helped to diversify the risk in one's portfolio.
The risk of what?
by jdilla1107
Thu Aug 29, 2019 10:42 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing with EE Bonds
Replies: 23
Views: 1274

Re: Rebalancing with EE Bonds

This is what I do. The warning on EE bonds rebalancing is more about making sure they don't become too much of a percentage of your bond allocation. If EE bonds were 100% of your bond allocation, you could have a liquidity issue.
by jdilla1107
Thu Aug 29, 2019 10:10 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Factor Investing Works (Despite What Some May Say)

But why should holding all the revenue streams in an economy necessarily help an investor achieve his or her goals? Because it most closely aligns your personal success with the success of the overall economy. It's comforting in times of stress to know that you have not made a bet. What goal does a...
by jdilla1107
Thu Aug 29, 2019 7:54 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Factor Investing Works (Despite What Some May Say)

If yes, how can SCV use market beta factor, since it is only a portion of the TSM? I can understand it using small and value just confused with market beta. Imagine you run a store in a town that usually has great weather and you carry only cold drinks and ice cream. When the weather is warm and su...
by jdilla1107
Thu Aug 29, 2019 6:10 pm
Forum: Investing - Theory, News & General
Topic: Series EE savings bonds attractive now?
Replies: 13
Views: 1120

Re: Series EE savings bonds attractive now?

On the other hand, if I am forced to not cash out for 20 years, wouldn't stocks be the better investment? Almost surely stocks will return more than 3.5% nominal over 20 years, no? I would love to see analysis for the percent chance stocks will return lower than this over a 20 year period. Comparin...
by jdilla1107
Thu Aug 29, 2019 6:06 pm
Forum: Investing - Theory, News & General
Topic: Series EE savings bonds attractive now?
Replies: 13
Views: 1120

Re: Series EE savings bonds attractive now?

I have been maxing my EE bonds for the last 10 years. They are a fantastic deal. They are an even more fantastic deal right now that they have been in the recent past. But, you have to hold them for exactly 20 years. - They have a free put option if interest rates go up. (You can always redeem for y...
by jdilla1107
Thu Aug 29, 2019 6:01 pm
Forum: Investing - Theory, News & General
Topic: Series EE savings bonds attractive now?
Replies: 13
Views: 1120

Re: Series EE savings bonds attractive now?

I am torn between buying: 1. EE bonds that pay 3.5% but are illiquid for 20 years, or 2. Putting that money in my 401k stable value fund paying a guaranteed 3% For just .5% difference I would go with the stable value fund, no question. No way the EE bond premium of .5% is enough compensation for th...
by jdilla1107
Wed Aug 28, 2019 3:42 pm
Forum: Investing - Theory, News & General
Topic: Practical difference: negative interest vs inflation?
Replies: 8
Views: 895

Re: Practical difference: negative interest vs inflation?

If QE erodes the value of cash, than (as demonstrated) money goes in to all sorts of (not-liquid) assets. I can't imagine this going on forever :? QE only erodes the value of cash if it causes inflation. Consider that without QE, inflation might be -10% and QE could cause inflation to end up being ...
by jdilla1107
Wed Aug 28, 2019 3:35 pm
Forum: Investing - Theory, News & General
Topic: Practical difference: negative interest vs inflation?
Replies: 8
Views: 895

Re: Practical difference: negative interest vs inflation?

There's been a lot of misunderstanding of QE. There is no money printing. Correctly understood, QE is the Federal Reserve implementing a change in the composition of private sector assets, effectively reducing the duration of liabilities (swapping short-term Treasuries with the overnight reserve de...
by jdilla1107
Fri Aug 23, 2019 8:50 am
Forum: Investing - Theory, News & General
Topic: Investing in Multiple Streams of Income? (NOT get rich quick)
Replies: 129
Views: 12419

Re: Investing in Multiple Streams of Income? (NOT get rich quick)

One of the key ingredients to wealth building which I see pop up, again and again, is having multiple sources of income. FWIW, this is a complete myth. No one ever provides anything remotely close to actual evidence. Just a lot of talk. Go look at the list of the Top 100 richest people in the world...
by jdilla1107
Thu Aug 22, 2019 10:43 pm
Forum: Investing - Theory, News & General
Topic: Investing in Multiple Streams of Income? (NOT get rich quick)
Replies: 129
Views: 12419

Re: Investing in Multiple Streams of Income? (NOT get rich quick)

One of the key ingredients to wealth building which I see pop up, again and again, is having multiple sources of income. FWIW, this is a complete myth. No one ever provides anything remotely close to actual evidence. Just a lot of talk. Go look at the list of the Top 100 richest people in the world...
by jdilla1107
Fri Aug 16, 2019 2:34 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Small Value Stocks are Cheap

But even for a buy-and-hold investor, I don't find TSM to be a compelling default choice. I don't see it as inherently more likely to provide higher absolute returns or even risk-adjusted returns than other asset classes/conceptualizations. Yes, TSM holds more stocks, but the 858 stocks held in Van...
by jdilla1107
Wed Aug 14, 2019 5:46 pm
Forum: Investing - Theory, News & General
Topic: Switch AA 10-year to 2-year Treasuries?
Replies: 61
Views: 3979

Re: Switch AA 10-year to 2-year Treasuries?

Going shorter duration because of the yield curve is completely silly. You could make an equally viable argument that you should go longer duration. (The yield curve is "telling you" that short term rates are going to drop.) The correct answer is to not pay any attention to it and make no moves bas...
by jdilla1107
Wed Aug 14, 2019 3:31 pm
Forum: Investing - Theory, News & General
Topic: Should long-term investors ignore interim bond fund value changes when calculating asset allocations?
Replies: 10
Views: 799

Re: Should long-term investors ignore interim bond fund value changes when calculating asset allocations?

I don't think bonds going up quickly is any different than stocks going up quickly. Stocks produce only so much earnings in a year. Some times people are willing to pay more or less for these earnings based on future beliefs. This is just like bonds. To say that it "understates risk" is to assume th...
by jdilla1107
Wed Aug 14, 2019 3:04 pm
Forum: Investing - Theory, News & General
Topic: Switch AA 10-year to 2-year Treasuries?
Replies: 61
Views: 3979

Re: Switch AA 10-year to 2-year Treasuries?

Going shorter duration because of the yield curve is completely silly. You could make an equally viable argument that you should go longer duration. (The yield curve is "telling you" that short term rates are going to drop.) The correct answer is to not pay any attention to it and make no moves base...
by jdilla1107
Tue Aug 13, 2019 10:24 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Small Value Stocks are Cheap

That's not what Larry did. He compared the 20 year average P/E ratio of SCV and TSM, and TSM is basically equal to its average, but SCV is well below its average. So what? You are torturing the data through backtesting. What difference does this make? Then to what extent are you comfortable with us...
by jdilla1107
Tue Aug 13, 2019 9:54 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Small Value Stocks are Cheap

I don't think it makes any sense to determine something is cheap by comparing its relative performance over 10 years to something else. That's not what Larry did. He compared the 20 year average P/E ratio of SCV and TSM, and TSM is basically equal to its average, but SCV is well below its average. ...
by jdilla1107
Tue Aug 13, 2019 9:46 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Small Value Stocks are Cheap

I don't think it makes any sense to determine something is cheap by comparing its relative performance over 10 years to something else. That's not what Larry did. He compared the 20 year average P/E ratio of SCV and TSM, and TSM is basically equal to its average, but SCV is well below its average. ...
by jdilla1107
Tue Aug 13, 2019 9:39 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Small Value Stocks are Cheap

Owning some small cap separately results in a better diversified portfolio. I disagree completely. Let's say I have 50 businesses all making money and let's say I have two options: 1) Create a single large cap corporation to run all 50 businesses under one umbrella. 2) Create 50 separate small cap ...
by jdilla1107
Tue Aug 13, 2019 9:24 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 26857

Re: Larry Swedroe: Small Value Stocks are Cheap

I don't think it makes any sense to determine something is cheap by comparing its relative performance over 10 years to something else. By this reasoning, baseball cards are really due for some outperformance. I genuinely don't understand how smart people can use backtesting to derive conclusions on...
by jdilla1107
Tue Aug 13, 2019 1:56 pm
Forum: Investing - Theory, News & General
Topic: Domestic returns next 10 years
Replies: 45
Views: 3044

Re: Domestic returns next 10 years

This is exactly what some people said on this forum 10 years ago. Go search on the google history at the top right. It's quite entertaining to read how people thought 10 years ago.
by jdilla1107
Wed Aug 07, 2019 11:52 am
Forum: Investing - Theory, News & General
Topic: 10 year treasury yield
Replies: 34
Views: 2774

Re: 10 year treasury yield

Although the obvious thought was "interest rates can't get lower" that thought has been around for years (10?) and I admit to having that thought until recently. There isn't anything economically that I think leads to higher rates because the economy is not that strong and the deficit is mind boggl...
by jdilla1107
Wed Aug 07, 2019 9:08 am
Forum: Investing - Theory, News & General
Topic: New and Improved CAPE is Higher!
Replies: 33
Views: 3040

Re: New and Improved CAPE is Higher!

Sure I am. The earnings yield of stocks is related to the real expected return as follows: The price of a stock S=Div/(r-g) S the stock price, r the return, and g the dividend growth rate, or IOW r=S/Div+g, the return the perpetual payout of the dividend plus dividend growth. But dividend growth co...
by jdilla1107
Wed Aug 07, 2019 8:21 am
Forum: Investing - Theory, News & General
Topic: 10 year treasury yield
Replies: 34
Views: 2774

Re: 10 year treasury yield

Here is a historical graph of the 10 year treasury rate from 1870 to today:

https://www.multpl.com/10-year-treasury-rate
by jdilla1107
Tue Aug 06, 2019 6:52 pm
Forum: Investing - Theory, News & General
Topic: New and Improved CAPE is Higher!
Replies: 33
Views: 3040

Re: New and Improved CAPE is Higher!

But then had Shiller not come up with his new methodology, you would have expected return of 3% real. (not that this is much of a difference) Yes. (Edit: though I actually get my data from Star Capital web site rather than Shiller, as they give data for all countries. Don't know which method they u...
by jdilla1107
Tue Aug 06, 2019 6:14 pm
Forum: Investing - Theory, News & General
Topic: EE bonds over munis?
Replies: 4
Views: 490

Re: EE bonds over munis?

I love EE Bonds and have been maxing them for 10 years. They continue to be a great deal. The main "downside" is that EE bonds are clearly bad for rebalancing. So, just make sure you have enough in other bonds to rebalance from if stocks drop significantly. I agree they are better than munis, assumi...
by jdilla1107
Tue Aug 06, 2019 2:11 pm
Forum: Investing - Theory, News & General
Topic: Increase stocks during bear market?
Replies: 14
Views: 1470

Re: Increase stocks during bear market?

The flaw is that it would have been "better" (following your definition of better) to just have been 90% equities the whole time. Let's say 2 years pass from when you shift from 70/30 to 90/10. Are you really going to say to yourself: "That day two years ago was a really special day that I need to a...