Search found 3100 matches

by longinvest
Sun Dec 16, 2018 9:16 pm
Forum: Investing - Theory, News & General
Topic: When cash is riskier than bonds
Replies: 41
Views: 3709

Re: When cash is riskier than bonds

Note that CASHX was used as proxy for cash. It's quite likely that a rolling 5-year CD ladder, where each CD was carefully selected, would have provided higher returns than CASHX. A 5-year rolling CD ladder is not a zero duration portfolio. But my original point was that, while cash is less risky t...
by longinvest
Sun Dec 16, 2018 8:43 pm
Forum: Investing - Theory, News & General
Topic: When cash is riskier than bonds
Replies: 41
Views: 3709

Re: When cash is riskier than bonds

Saving enough for retirement was way more important than the exact choice of intermediate-term bond fund in their balanced portfolio. On average, holding all fixed-income as cash would be a significant detriment, which was my main point, also noted in the title of the thread. Over a 26 year period ...
by longinvest
Sun Dec 16, 2018 7:58 pm
Forum: Investing - Theory, News & General
Topic: When cash is riskier than bonds
Replies: 41
Views: 3709

Re: When cash is riskier than bonds

We could play the backtesting game all day, finding counterexamples to all kind of claims and counting angels on the head of a pin. As I said, the best is that the investor chooses according to his preferences and stays the course with his choice . Some intermediate-term bond investors don't want to...
by longinvest
Sun Dec 16, 2018 7:17 pm
Forum: Investing - Theory, News & General
Topic: When cash is riskier than bonds
Replies: 41
Views: 3709

Re: When cash is riskier than bonds

The following backtest is interesting. Portfolio 1 is a 60/40 balanced portfolio of a total US stock index fund vtsmx and a total bond market index fund, vbmfx. Portfolio 2 substitutes intermediate treasuries (vfitx) for the bond index fund and adjust allocation weights to achieve the same volatili...
by longinvest
Tue Dec 11, 2018 8:37 am
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

Of course, STRIPS aren't speculation for a pension fund with nominal liabilities! You're changing the context of my statement. I have yet to hear a retail investor tell me of a nominal liability of his in 20 to 30 years that would be best covered by investing the money into an ETF of "equal-weighte...
by longinvest
Sun Dec 09, 2018 11:45 pm
Forum: Investing - Theory, News & General
Topic: does the 4% withdrawal guideline include dividends?
Replies: 43
Views: 2992

Re: does the 4% withdrawal guideline include dividends?

Has much analysis been done of the chance for success of preservation of portfolios using a 4% annual withdrawal but recalculating the 4% for each year's ending portfolio value-that is,if the portfolio went down,so does the 4%( :( ),but if the portfolio went up ( :D ) so does the 4%! (Each year) of...
by longinvest
Sun Dec 09, 2018 9:55 pm
Forum: Investing - Theory, News & General
Topic: does the 4% withdrawal guideline include dividends?
Replies: 43
Views: 2992

Re: does the 4% withdrawal guideline include dividends?

Has much analysis been done of the chance for success of preservation of portfolios using a 4% annual withdrawal but recalculating the 4% for each year's ending portfolio value-that is,if the portfolio went down,so does the 4%( :( ),but if the portfolio went up ( :D ) so does the 4%! (Each year) of...
by longinvest
Sun Dec 09, 2018 5:59 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

If anything this form has has "distance bias"--the view that any day now Treasury rates are going to shoot up to 7% like they was back in the 80s and holders of long term bonds will all get massacred. Long-term bonds would severely drop in value, but would immediately start yielding 7%. More import...
by longinvest
Sun Dec 09, 2018 12:01 pm
Forum: Investing - Help with Personal Investments
Topic: What am I not getting about the value of TIPS funds?
Replies: 23
Views: 2205

Re: What am I not getting about the value of TIPS funds?

To be honest I've never understood why retired folks should load up on TIPS funds/etfs. Not much inflation right now, short-term one year CDs paying close to 3 percent, TIPS seem to be hit by interest rate hikes just as badly as bonds, and such wimpy returns! Average annual returns VAIPX Inflation-...
by longinvest
Sat Dec 08, 2018 8:01 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

aristotelian wrote:
Sat Dec 08, 2018 7:46 pm
By the way, BND has 12% long bonds (20+ years).
Vanguard Total Bond Market ETF (BND) has 19.1% long-term bonds (maturity of 10 years or more). See my previous post for Vanguard's definition of short-term, intermediate-term, and long-term bonds.
by longinvest
Sat Dec 08, 2018 7:05 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

Good caveats, possibly except for the implication that the number of bonds is a reasonable measure of diversification in a Treasury index fund. These aren't normal bonds. They're Separate Trading of Registered Interest and Principal of Securities (STRIPS). They aren't sold by the Federal Reserve or...
by longinvest
Sat Dec 08, 2018 6:56 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

It must be noted that Vanguard's Extended-Duration Treasury ETF (EDV) isn't a typical long-term bond ETF. It seeks to to track the performance of the Bloomberg Barclays U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index. It's not a capitalization weighted index ETF. In other words, it invests int...
by longinvest
Sat Dec 08, 2018 6:36 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

It must be noted that Vanguard's Extended-Duration Treasury ETF (EDV) isn't a typical long-term bond ETF. It seeks to to track the performance of the Bloomberg Barclays U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index. It's not a capitalization weighted index ETF. In other words, it invests int...
by longinvest
Sat Dec 08, 2018 6:05 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

It must be noted that Vanguard's Extended-Duration Treasury ETF (EDV) isn't a typical long-term bond ETF. It seeks to to track the performance of the Bloomberg Barclays U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index. It's not a capitalization weighted index ETF. In other words, it invests into...
by longinvest
Sat Dec 08, 2018 4:14 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

It might be relevant to this thread to provide the opinion of our mentor, Jack Bogle: http://www.aaii.com/journal/article/achieving-greater-long-term-wealth-through-index-funds.touch [Jack Bogle]: I don’t look at bond funds as a unity. You can hold a short-term bond fund if you’re willing to sacrifi...
by longinvest
Sat Dec 08, 2018 3:54 pm
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 792
Views: 262834

Re: Variable Percentage Withdrawal (VPW)

Indianrock wrote:
Sat Dec 08, 2018 2:36 pm
I see. The row "Domestic Bonds" is actually calculated from your Domestic/International stock entries so no need to enter anything in there. If not stock, it's bond, which would include money market and other fixed income components.
Exactly.
by longinvest
Sat Dec 08, 2018 2:32 pm
Forum: Personal Finance (Not Investing)
Topic: Variable Percentage Withdrawal (VPW)
Replies: 792
Views: 262834

Re: Variable Percentage Withdrawal (VPW)

Sorry I haven't read all the posts. Is there a way or need to account for international bond funds in my portfolio ( via VTTVX ) ?? It's the overall stock/bond allocation that is used along with age to lookup a percentage in the VPW Table . In the VPW spreadsheet, the sub-allocations to domestic an...
by longinvest
Sat Dec 08, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: Vanguard launching robo-avisor in Canada
Replies: 1
Views: 216

Re: Vanguard launching robo-avisor in Canada

Thanks Barry! More competition in the Canadian market is a good thing. We have to thank Vanguard for causing a significant drop in the cost of investing since it started its ETF offering in Canada in 2011. Here is a link to a post of the same news, Robo-advisors , by dual forum member Peculiar_Inves...
by longinvest
Sat Dec 08, 2018 12:42 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

Can someone definite short, intermediate and long bonds? Vanguard defines them as: Short-term bonds (VBISX): Bonds with a maturity ranging from 1 to 5 years. Intermediate-term bonds (VBIIX): Bonds with a maturity ranging from 5 to 10 years. Long-term bonds (VBLTX): Bonds with maturities of 10 years...
by longinvest
Sat Dec 08, 2018 12:16 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

Given my previous post where I argued that a total bond market investment is less risky than a specific bond market segment investment, why am I concentrating my own portfolio's bond investments into long-term nominal and inflation-indexed bonds? It's simple. Bonds have a maturity date. As a result,...
by longinvest
Sat Dec 08, 2018 10:54 am
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 162
Views: 8258

Re: Do long-term bonds belong in one's portfolio?

This is what doesn't make sense to me. If you have short, intermediate, and long the aggregate duration is intermediate-like. So why not just hold intermediate? When you look at past returns, there isn't much difference between the s, i, l split and all i. I more or less agree with this. Vanguard T...
by longinvest
Fri Dec 07, 2018 7:47 pm
Forum: Investing - Theory, News & General
Topic: Help finding chart concerning diversification and Japanese stock market crash
Replies: 4
Views: 279

Re: Help finding chart concerning diversification and Japanese stock market crash

There's this thread: viewtopic.php?f=10&t=23036&start=100#p2379273

The chart's link is broken. Here it is fixed (by replacing postimg.org with postimg.cc in the link):
Image
by longinvest
Thu Dec 06, 2018 11:30 pm
Forum: Investing - Help with Personal Investments
Topic: Question on Variable Percentage Withdrawal (VPW) Method
Replies: 3
Views: 628

Re: Question on Variable Percentage Withdrawal (VPW) Method

I have a question on this statement: " Missing payments , between retirement and the start of Social Security pension, can be provided by using a simple CD ladder or short-term bond fund. For the purposes of VPW calculations, the money set aside in this CD ladder or short-term bond fund should not ...
by longinvest
Tue Dec 04, 2018 1:51 pm
Forum: Investing - Theory, News & General
Topic: Re-balancing multiple accounts
Replies: 6
Views: 671

Re: Re-balancing multiple accounts

I know this might sound like heresy around true Boglehead diehards but I have to ask to the question: Why rebalance at all? From what I just learned from "3 Simple Rules of Investing" , rebalancing does not always do what it is supposed to do. If you have constructed an allocation to bonds to provi...
by longinvest
Mon Dec 03, 2018 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

"Employer contributions are not usually counted as total gross, it is above the employee gross and not used for employee tax calculations. The exact amount of employer contributions varies and have to be figured into total contributions without including in salary + taxes." FWIW - we consider any e...
by longinvest
Mon Dec 03, 2018 11:52 am
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

"Employer contributions are not usually counted as total gross, it is above the employee gross and not used for employee tax calculations. The exact amount of employer contributions varies and have to be figured into total contributions without including in salary + taxes." FWIW - we consider any e...
by longinvest
Mon Dec 03, 2018 8:59 am
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

I'll assume that the spouse is allowed to stash $40,000 in tax-deferred accounts. How did you make that assumption, what tax deferred account(s) is allowing $40k in employee contributions per year? It could be employee and employer total contributions (counting employer contribution as part of tota...
by longinvest
Sun Dec 02, 2018 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

If you can't save $260K into tax-sheltered accounts, you'll have to think about how to handle taxes on non-sheltered savings. Here's a suggestion for that. In general, I suggest doing variable savings rate calculations separately for each spouse, then add the results to determine household numbers....
by longinvest
Sun Dec 02, 2018 7:11 pm
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

Longinvest, your calculations are fascinating and give me comfort that 80/20 is the way to go. There is no way we will need 190k to spend once we leave the Bay Area, not to mention the replacement income we will generate in the Midwest. Please do update this thread when your spreadsheet is ready fo...
by longinvest
Sun Dec 02, 2018 6:45 pm
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

Currently my AA is 80/20. My question is, given that we will be socking away a significant amount of money, has my need to take risk decreased? Should I move to a 60/40 allocation? If you enjoyed these calculations, you could consider adopting a variable savings rate which adapts spending and savin...
by longinvest
Sun Dec 02, 2018 12:01 am
Forum: Local Chapters and Bogleheads Community
Topic: Post your Financial Milestone Announcements Here
Replies: 551
Views: 64732

Re: Post your Financial Milestone Announcements Here

LadyGeek wrote:
Sat Dec 01, 2018 5:19 pm
I have just received my very first pension payment.
...
This is my safety net. If anything happens with my current employer, I won't have to worry about finding a job that pays the same salary.
Congratulations! :beer
by longinvest
Sat Dec 01, 2018 11:14 pm
Forum: Investing - Help with Personal Investments
Topic: How to track my portfolio performance
Replies: 7
Views: 1052

Re: How to track my portfolio performance

I perfectly accept market returns for what they are, but I've been unable, so far, to get to Taylor's level of detachment. I still calculate the returns of my portfolio once per month to confirm that my portfolio is closely tracking its benchmark. Knowing that my portfolio's tracking error is small ...
by longinvest
Sat Dec 01, 2018 10:42 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks Don't Increase Share Prices
Replies: 33
Views: 2763

Re: Stock Buybacks Don't Increase Share Prices

Let's look at the mathematics of stock buybacks. [...] Now that we understand the underlying mathematics, we can look at the title of this thread, " Stock Buybacks Don't Increase Share Prices ", and confidently state that it is misleading see that it is ambiguous . If it means that the share price ...
by longinvest
Sat Dec 01, 2018 7:02 pm
Forum: Investing - Help with Personal Investments
Topic: Should I move to a more conservative AA? 80/20 to 60/40?
Replies: 67
Views: 4469

Re: Should I move to a more conservative AA? 80/20 to 60/40?

DW & I both recently started new jobs, bumping up our household income to an all-time high of $450k. I estimate we will be able to save 1/3 of this in tax-deferred and taxable accounts. We are 32 and 33 with a four month old infant, living in SF Bay Area. We have $600k in tax-deferred accounts plus...
by longinvest
Sat Dec 01, 2018 11:25 am
Forum: Investing - Theory, News & General
Topic: Stock Buybacks Don't Increase Share Prices
Replies: 33
Views: 2763

Re: Stock Buybacks Don't Increase Share Prices

At least when done properly, stock buybacks do not increase share prices. The market cap goes down by the amount spent on the buyback, and the float gets decreased by the same amount. So the value per share is the same after the buyback. This is true when all investors agree on the value of the com...
by longinvest
Sat Dec 01, 2018 10:16 am
Forum: Investing - Theory, News & General
Topic: Stock Buybacks Don't Increase Share Prices
Replies: 33
Views: 2763

Re: Stock Buybacks Don't Increase Share Prices

At least when done properly, stock buybacks do not increase share prices. The market cap goes down by the amount spent on the buyback, and the float gets decreased by the same amount. So the value per share is the same after the buyback. This is true when all investors agree on the value of the com...
by longinvest
Sat Dec 01, 2018 9:39 am
Forum: Investing - Theory, News & General
Topic: Stock Buybacks Don't Increase Share Prices
Replies: 33
Views: 2763

Re: Stock Buybacks Don't Increase Share Prices

Let's look at the mathematics of stock buybacks. As a side topic, I'll also illustrate why cap-weighted indexing makes me indifferent about stock buybacks. We have three similar companies A, B, and C priced at book value. They don't produce anything; they just hold $1,000,000 each in a bank account ...
by longinvest
Fri Nov 30, 2018 10:56 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 59
Views: 4987

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

I don't think that anyone is trying to disprove your example. However, most people don't invest solely in long term bonds, so it's not applicable on a practical level. It is amazing to see how often we are bombarded with anecdotes about the past to incite us to believe statements which are otherwis...
by longinvest
Fri Nov 30, 2018 7:51 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 59
Views: 4987

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

It is amazing to see how often we are bombarded with anecdotes about the past to incite us to believe statements which are otherwise unsupported, as if past returns and correlations predicted future returns and correlations. https://www.bogleheads.org/forum/viewtopic.php?f=10&t=264980#p4234210 Here ...
by longinvest
Thu Nov 29, 2018 11:16 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 59
Views: 4987

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

...Here is a counterexample to the claim that " replacing corporate bonds with Treasuries and adding more stocks provides a better performance for similar volatility ". In other words, I'm providing a proof that the statement is false ... Alas, I don't see anywhere in Random Walker's original post,...
by longinvest
Thu Nov 29, 2018 10:11 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 59
Views: 4987

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

Here is a counterexample to the claim that " replacing corporate bonds with Treasuries and adding more stocks provides a better performance for similar volatility ". In other words, I'm providing a proof that the statement is false . When I look in Portfolio Visualizer at the historical returns of a...
by longinvest
Wed Nov 28, 2018 8:21 pm
Forum: Investing - Help with Personal Investments
Topic: Help me understand secondary market for treasuries
Replies: 10
Views: 883

Re: Help me understand secondary market for treasuries

So, then is there a reason _not_ to buy treasuries on the secondary market to take advantage of the better yields (provided one can meet the minimums)? Are there any "gotchas" that explain the higher yields you get versus buying direct? Besides trading costs, you may need to check whether the Treas...
by longinvest
Mon Nov 26, 2018 5:29 pm
Forum: Investing - Help with Personal Investments
Topic: I can't take this anymore=) I'm selling stocks and buying bonds!
Replies: 129
Views: 19779

Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Longinvest, This post has truly been a great help. I literally spent hours trying to visualize various outcomes in an attempt to figure out what scenario I could live with and whether I would prominently rebalance under various scenarios. I have arrived at a conclusion that the max. drawdown I can ...
by longinvest
Mon Nov 26, 2018 9:42 am
Forum: Investing - Theory, News & General
Topic: What do bogleheads think of small cap value?
Replies: 37
Views: 3216

Re: What do bogleheads think of small cap value?

I would be cautious before adopting the Larry portfolio . There was an interesting follow up post: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=235586&p=3686869#p3687146 I will add that most of Larry Swedroe's recent writings are in direct contradiction with the advice of our mentor Jack Bo...
by longinvest
Sun Nov 25, 2018 7:19 pm
Forum: Investing - Help with Personal Investments
Topic: I can't take this anymore=) I'm selling stocks and buying bonds!
Replies: 129
Views: 19779

Re: I can't take this anymore=) I'm selling stocks and buying bonds!

Alex, If it can help, here are two posts I've written about asset allocation and rebalancing: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=262077&p=4182112#p4179086 https://www.bogleheads.org/forum/viewtopic.php?f=10&t=262077&p=4182112#p4181007 The main conclusion of the analysis is this: A...
by longinvest
Sun Nov 25, 2018 5:55 pm
Forum: Investing - Theory, News & General
Topic: How much international stock? A suggestion.
Replies: 754
Views: 99086

Re: How much international stock? A suggestion.

Even if everything is priced in... https://www.bogleheads.org/forum/viewtopic.php?p=4221190#p4221190 ... In summary, the exact same investment doesn't carry the same risks, nor the same returns, when held by two investors: a domestic one and a foreign one. I think that this alone justifies discardin...
by longinvest
Sun Nov 25, 2018 10:36 am
Forum: Investing - Theory, News & General
Topic: How much international stock? A suggestion.
Replies: 754
Views: 99086

Re: International Stock Allocation

It seems that buying a Total World Stock fund is more in line with index investing than trying to pick a ratio of US to International. Wouldn't any percentage mix of US to international be more like trying to pick the winners rather than going for the average? No one knows what the market is going ...
by longinvest
Sun Nov 25, 2018 10:24 am
Forum: Investing - Theory, News & General
Topic: How much international stock? A suggestion.
Replies: 754
Views: 99086

Re: How much international stock? A suggestion.

All we have is past performance on which to base some decisions This statement is false . Here is the proof of my statement: I, longinvest, do not base my asset allocation on past asset performance, but on fundamental asset properties, demonstrable with mathematics or logic, while fully accepting u...
by longinvest
Sat Nov 24, 2018 10:33 am
Forum: Investing - Help with Personal Investments
Topic: Understanding Portfolio Return
Replies: 8
Views: 1040

Re: Understanding Portfolio Return

Thanks for replying, PFInterest and longinvest. PFInterest, I'm referring to the portfolio return (aka time-weighted return or comparable return) mentioned on the wiki page I linked to earlier. Yes, good point about flows, longinvest. Also, agreed about the time period, longinvest. I put daily date...