Search found 2506 matches

by longinvest
Tue Jan 02, 2018 9:28 am
Forum: Investing - Help with Personal Investments
Topic: SWR, different perspective.
Replies: 38
Views: 3018

Re: SWR, different perspective.

Dbr, Well, withdrawal does not apply in the accumulation state, does it? The calculations are useful for getting estimates for how much to accumulate. <Off topic> Actually, the principles of it can actually be useful in the accumulation phase. Here's a thread about it, on our Canadian sister forum: ...
by longinvest
Tue Jan 02, 2018 9:15 am
Forum: Investing - Help with Personal Investments
Topic: SWR, different perspective.
Replies: 38
Views: 3018

Re: SWR, different perspective.

That is certainly a great defense of the VPW longinvest, however I don't see any of it addressing the original questions perspective. Which was how to reconcile a withdrawal scheme with the actual need for money to spend which follows a different dynamic entirely. I don't know... How do I do it, to...
by longinvest
Mon Jan 01, 2018 7:19 pm
Forum: Investing - Help with Personal Investments
Topic: SWR, different perspective.
Replies: 38
Views: 3018

Re: SWR, different perspective.

Hi Midareff, Happy new 2018 year! We have VPW, an excellent tool but with an actuarial based... What do you mean by VPW being actuarial based? It's not. VPW is a portfolio depleting method which targets, by default, its last withdrawal at age 99. The last withdrawal age can be increased to a higher...
by longinvest
Mon Jan 01, 2018 11:13 am
Forum: Investing - Help with Personal Investments
Topic: SWR, different perspective.
Replies: 38
Views: 3018

Re: SWR, different perspective.

Tibbitts, I was addressing the "today's retiree, at least the retiree we might find on this .org" part. I think the number of people here or elsewhere with cola'd pensions is already small and is shrinking. It won't go to zero for a while (military, etc.) but probably will eventually. For practical ...
by longinvest
Mon Jan 01, 2018 11:03 am
Forum: Investing - Theory, News & General
Topic: Is Beta a distinct factor or a summation of other factors
Replies: 42
Views: 1952

Re: Is Beta a distinct factor or a summation of other factors

Packer, I think that you're onto something, here. So how is factor investing any different from any other active strategy with non-professionals competing against the pros? Based on the mathematical definition of active and passive , before "passive" was redefined by active firms to mean something e...
by longinvest
Mon Jan 01, 2018 9:51 am
Forum: Investing - Help with Personal Investments
Topic: SWR, different perspective.
Replies: 38
Views: 3018

Re: SWR, different perspective.

Hi Midareff, Happy new 2018 year! We have VPW, an excellent tool but with an actuarial based... What do you mean by VPW being actuarial based? It's not. VPW is a portfolio depleting method which targets, by default, its last withdrawal at age 99. The last withdrawal age can be increased to a higher ...
by longinvest
Thu Dec 28, 2017 1:33 pm
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 114
Views: 10501

Re: What ever happened to the Larry portfolio?

Dear QuietProsperity, I still think that 100% US Stocks is an awful benchmark to compare the Larry Portfolio against, even if he (maybe) suggested it in the NYT article. I just found that Larry Swedroe actually expressed his opinion about the New York Times article on our forums! First, here's the i...
by longinvest
Thu Dec 28, 2017 11:34 am
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 114
Views: 10501

Re: What ever happened to the Larry portfolio?

CULater, On December 23, 2011, Ron Lieber made the Larry Portfolio known to the wide public with his " Taking a Chance on the Larry Portfolio " article in The New York Times. Here's an illustration that the article gave of one version of this portfolio along with a benchmark: For illustration purpos...
by longinvest
Wed Dec 27, 2017 11:09 am
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 114
Views: 10501

Re: What ever happened to the Larry portfolio?

Triceratop, ...all you would have needed to do was put 32 percent of your money in a fund mimicking the United States stock index of small and value companies that Mr. Fama and Mr. French developed... Larry Portfolio (red): Vanguard Small Cap Value Index (VISVX) - 32% / Vanguard Short-Term Treasury ...
by longinvest
Wed Dec 27, 2017 10:52 am
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 114
Views: 10501

Re: What ever happened to the Larry portfolio?

CULater,
CULater wrote:
Wed Dec 27, 2017 10:16 am
Don't think Larry ever specifically recommended 1-year.
What about the citation from The New York Times I provided in the post just above yours?
by longinvest
Wed Dec 27, 2017 10:12 am
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 114
Views: 10501

Re: What ever happened to the Larry portfolio?

On December 23, 2011, Ron Lieber made the Larry Portfolio known to the wide public with his " Taking a Chance on the Larry Portfolio " article in The New York Times. Here's an illustration that the article gave of one version of this portfolio along with a benchmark: For illustration purposes, [Larr...
by longinvest
Tue Dec 26, 2017 11:34 am
Forum: Investing - Theory, News & General
Topic: Inflation can cream bonds VBTLX vs VSCSX
Replies: 42
Views: 3480

Re: Inflation can cream bonds VBTLX vs VSCSX

I would appreciate to see my posts properly quoted as to not misrepresent what I wrote. It's common etiquette to omit images in quotes to shorten posts. I didn't misrepresent anything. You posted a chart showing nominal returns. Your discussion was all about nominal returns. In this particular case...
by longinvest
Tue Dec 26, 2017 11:29 am
Forum: Investing - Theory, News & General
Topic: Inflation can cream bonds VBTLX vs VSCSX
Replies: 42
Views: 3480

Re: Inflation can cream bonds VBTLX vs VSCSX

Saltycaper, Examining a nominal return chart (which, incidentally, are usually the types of charts I see), is not really helpful in understanding the risks inflation poses to bonds, which is the subject of the thread. That the investors opening their statements may be comforted by their natural tend...
by longinvest
Tue Dec 26, 2017 11:15 am
Forum: Investing - Theory, News & General
Topic: Inflation can cream bonds VBTLX vs VSCSX
Replies: 42
Views: 3480

Re: Inflation can cream bonds VBTLX vs VSCSX

Let's put things into perspective. Let's look at bonds vs stocks in the 1970s: Just for reference, here's a total-return chart I made, on another thread, to show the comparative growth of an intermediate -duration ladder-like bond fund and the S&P 500 in the worst high-inflation part of the 1970s to...
by longinvest
Fri Dec 22, 2017 8:28 pm
Forum: Investing - Theory, News & General
Topic: Saving for the crash
Replies: 58
Views: 7344

Re: Saving for the crash

or is it absolutely anti-Bogle? This should answer your question. Bogleheads® investment philosophy: Never try to time the market There is a large amount of research showing that typical mutual fund investors actually perform far worse than the mutual funds they invest in because they tend to buy a...
by longinvest
Wed Dec 20, 2017 5:32 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 4834

Re: Geometric Average vs. Arithmetic Average

Maybe I spoke too soon. What is the difference between IRR and CAGR? IRR is a compound average growth rate that takes into account that there may be money added to or withdrawn from the investment at different points in time. Technically CAGR assumes an amount initially invested with nothing added ...
by longinvest
Wed Dec 20, 2017 9:10 am
Forum: Investing - Help with Personal Investments
Topic: TIPS and / or Total Bond Fund in AA?
Replies: 26
Views: 1662

Re: TIPS and / or Total Bond Fund in AA?

BigJohn, If you don't mind, I'd appreciate your perspective on the following. For reasons I won't go into, I really don't want to construct and manage a non-rolling ladder of individual bonds. I also agree with your comments about the irreversible nature of SPIAs and have concluded that now is not t...
by longinvest
Tue Dec 19, 2017 12:13 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS and / or Total Bond Fund in AA?
Replies: 26
Views: 1662

Re: TIPS and / or Total Bond Fund in AA?

Dbr and BigJohn, dbr, I'm not trying to be difficult and I understand the use of a TIPS ladder in an LMP. I also understand that if held to maturity, the the long bond interest rate risk is neutralized. What I'm trying to understand is this comment A TIPS fund does insure against inflation but not a...
by longinvest
Sun Dec 17, 2017 12:35 pm
Forum: Investing - Theory, News & General
Topic: VPW Spreadsheet Question
Replies: 1
Views: 285

Re: VPW Spreadsheet Question

Sixtyforty, I've been playing around with the VPW spreadsheet and have a question. Under the "Backtesting" tab. I entered 48 as the retirement age and set SS to 10K, Start Year 2000. Under the backtesting table, the total income is $10K higher than the withdrawal in year 2000 (age 48). It looks like...
by longinvest
Sat Dec 16, 2017 2:45 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

Thesaints wrote:
Sat Dec 16, 2017 2:44 pm
Whoever finds the philosopher's stone will be a billionaire.
Good luck. :moneybag :moneybag :moneybag
by longinvest
Sat Dec 16, 2017 2:41 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

By constant , I meant that the 1-year yield doesn't change over time, the 2-year yield doesn't change over time, the 3-year yield doesn't change over time, etc. By not flat I meant that the 1-year, 2-year, 3-year, are not all equal. If you know with certainty that interest rates are constant then t...
by longinvest
Sat Dec 16, 2017 2:36 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

2. The fund yield is a good estimator for the expected real return over a time period whose length matches the duration, not a cherry-picked shorter timeframe. No, it isn't. The mathematics are simple and clear: How can Bond Funds perform better than yield . That might apply to a newer fund, but I ...
by longinvest
Sat Dec 16, 2017 2:31 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

Thesaints, For a flat, constant, yield curve, this risk goes away. ... Let's pick a constant , but not flat yield curve. Let's also assume that each rung is bought at par. Obviously, the ladder's return, over any period, will be determined by its distribution yield, not its YTM, as its initial and f...
by longinvest
Sat Dec 16, 2017 1:24 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

#Cruncher, In other words, unlike what one would be intuitively lead to think, it doesn't really represent the effective collective guess of investors about future inflation over the next 30 years. Techinally you're correct, longinvest. The BE rate includes more than just the market's estimate of fu...
by longinvest
Sat Dec 16, 2017 12:51 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

For a flat, constant, yield curve, this risk goes away. ... Let's pick a constant , but not flat yield curve. Let's also assume that each rung is bought at par. Obviously, the ladder's return, over any period, will be determined by its distribution yield, not its YTM, as its initial and final price...
by longinvest
Sat Dec 16, 2017 12:31 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

The vast majority of these values are unknown. It isn't a good estimator. Isn’t it a good estimator for each individual bond in the ladder ? This is a different question. I'll refer, again, to the linked thread . A bond fund isn't similar to an individual bond. In particular, it doesn't distribute ...
by longinvest
Sat Dec 16, 2017 11:25 am
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

No, it isn't. The mathematics are simple and clear: How can Bond Funds perform better than yield . Or worse. That’s why the yield is a good estimator. Please read the linked thread. Future returns will be determined by the average of the initial yield (1 measurement) and future reinvestment yields ...
by longinvest
Sat Dec 16, 2017 11:23 am
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

* Here is the Breakeven inflation rate that the market was expecting 12/14/2012 according to the daily Treasury constant maturity rates for TIPS and nominal Treasuries : I would be careful about the concept of "breakeven inflation rate", which is only a simple difference between approximated yields...
by longinvest
Sat Dec 16, 2017 10:49 am
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

Dbr, Here are some facts about TIPS. What one calls those facts is up to them. 0. TIPS interest rates are real interest rates. Some people make a big mistake comparing this with nominal interest rates of nominal bonds. The difference is the rate of inflation. 1. All TIPS, whether in a fund or held i...
by longinvest
Sat Dec 16, 2017 10:47 am
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 42
Views: 1556

Re: Question About TIPs and TIP Funds

jalbert wrote:
Sat Dec 16, 2017 1:57 am
2. The fund yield is a good estimator for the expected real return over a time period whose length matches the duration, not a cherry-picked shorter timeframe.
No, it isn't. The mathematics are simple and clear: How can Bond Funds perform better than yield.
by longinvest
Sat Dec 16, 2017 10:30 am
Forum: Investing - Help with Personal Investments
Topic: Bonds-Is the "coupon" what we should expect for return??
Replies: 14
Views: 959

Re: Bonds-Is the "coupon" what we should expect for return??

Retireearly, Since I'm still newish to Fixed Income, I'm frequently trying to internalize bonds - mainly what we can expect going forward. Do I, and many others, over-analyze, or over-scrutinize bonds in a rising rate market? Essentially, should we expect the return of a bond to be the bond's coupon...
by longinvest
Mon Dec 11, 2017 5:29 pm
Forum: Investing - Theory, News & General
Topic: After a 2- or 3-fund solution, the rest is withdrawals and world events
Replies: 17
Views: 1850

Re: After a 2- or 3-fund solution, the rest is withdrawals and world events

I'll repeat what I wrote on another thread: If you want my opinion, it's this: forget about SWR during retirement; it's a rough planning tool to help answer: how much do I approximately need to retire. If you want a stable income stream, just go and buy one. For lifelong income, SPIAs do exist and c...
by longinvest
Mon Dec 11, 2017 8:37 am
Forum: Investing - Theory, News & General
Topic: After a 2- or 3-fund solution, the rest is withdrawals and world events
Replies: 17
Views: 1850

Re: After a 2- or 3-fund solution, the rest is withdrawals and world events

Having to guess about future world events could cause anxiety. I would only consider 4% as a rough planning number to answer the question "how much do I approximately need to retire?"; I would never use it as an actual withdrawal method. Instead, I would plan to use a flexible portfolio withdrawal m...
by longinvest
Sun Dec 10, 2017 9:23 am
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3263

Re: 2000-09 worst decade for large cap stocks in 109 years

I am amazed at the fear of TIPS (and why not I-Bonds?) displayed here. Personally, I can't put on the same level of risk a security which promises CPI-adjusted payments (coupons and principal) on specific dates and another which only gives me a minority vote and a right to my share of unknown future...
by longinvest
Sat Dec 09, 2017 8:11 pm
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3263

Re: 2000-09 worst decade for large cap stocks in 109 years

Are bond prices free today ? Is there a law that prohibits me from selling a Treasury bond or another bond, in my possession, at the price I want to sell it to another investor? Was there in 1951 ? Here's a reply posted by Barry Barnitz in another thread: Hi: Please note that interest rates in the ...
by longinvest
Sat Dec 09, 2017 8:02 pm
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3263

Re: 2000-09 worst decade for large cap stocks in 109 years

Thesaints wrote:
Sat Dec 09, 2017 8:00 pm
Are bond prices free today ?
Is there a law that prohibits me from selling a Treasury bond or another bond, in my possession, at the price I want to sell it to another investor?
by longinvest
Sat Dec 09, 2017 7:39 pm
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3263

Re: 2000-09 worst decade for large cap stocks in 109 years

Nedsaid, First, for investors really worried about inflation, there now exist inflation-indexed bonds (TIPS) and inflation-indexed cash investments (I-Bonds). Second, I think it's important to deconstruct an investment myth: that nominal bonds are vulnerable to inflation. Things are not as simple as...
by longinvest
Thu Dec 07, 2017 5:55 pm
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate from SPIA???
Replies: 41
Views: 2558

Re: Safe Withdrawal Rate from SPIA???

Pezblanco, The point of the exercise is to determine how many real dollars can you spend from an SPIA or a non-COLA adjusted pension during the time of your retirement. I.e. what constant dollar stream can be extracted from a GIVEN SPIA or non-COLA adjusted pension? The SPIA has already been bought...
by longinvest
Thu Dec 07, 2017 12:43 pm
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate from SPIA???
Replies: 41
Views: 2558

Re: Safe Withdrawal Rate from SPIA???

Pezblanco, The point of the exercise is to determine how many real dollars can you spend from an SPIA or a non-COLA adjusted pension during the time of your retirement. I.e. what constant dollar stream can be extracted from a GIVEN SPIA or non-COLA adjusted pension? The SPIA has already been bought ...
by longinvest
Tue Dec 05, 2017 11:15 am
Forum: Investing - Theory, News & General
Topic: Why isn't a bond fund's predicted future return "simply" the predicted interest rate? Or is it?
Replies: 2
Views: 642

Re: Why isn't a bond fund's predicted future return "simply" the predicted interest rate? Or is it?

Nisiprius, The implication would seem to be that (assuming no credit risk, no defaults, no calls, and--biggy, a perfectly flat yield curve) if the interest rate is X% for all loan terms and remains level at 6% X% , then any bond fund whatsoever must produce a total annual return of X% per year. Ques...
by longinvest
Tue Nov 28, 2017 10:22 pm
Forum: Investing - Theory, News & General
Topic: The impact of expenses - a call for creativity
Replies: 19
Views: 1370

Re: The impact of expenses - a call for creativity

I would express expenses as a percent of returns, instead of percent of assets (as commonly done). For example, a nominal return of 7% represents an inflation-adjusted return of 5%. A 2% expense ratio sends 2%/5% = 40% of the real return into the pockets of the fund provider and financial adviser! A...
by longinvest
Sun Nov 26, 2017 7:04 pm
Forum: Investing - Theory, News & General
Topic: Bonds Are Riskier Than People Think
Replies: 142
Views: 13730

Re: Bonds Are Riskier Than People Think

  1. The longer one holds an inflation-indexed bond, like a Treasury Inflation Protected Securities (TIPS), the less risky it becomes.
  2. An inflation-indexed bond fund is just a collection of inflation-indexed bonds.
by longinvest
Sun Nov 19, 2017 4:48 pm
Forum: Personal Finance (Not Investing)
Topic: What we don't know
Replies: 42
Views: 3004

Re: What we don't know

So exactly what do we we definitely know? We do know the following for sure: ... If "active" and "passive" management styles are defined in sensible ways, it must be the case that before costs, the return on the average actively managed dollar will equal the return on the average passively managed ...
by longinvest
Sat Nov 18, 2017 4:41 pm
Forum: Investing - Theory, News & General
Topic: Is holding bonds now dangerous?
Replies: 162
Views: 17048

Re: Is holding bonds now dangerous?

Dangerous but not as dangerous? :confused (As all stock) Over periods less than around 20 years, bonds have been less volatile in terms of real returns. Over longer periods, bonds have been more volatile than stocks. See Siegel's fantastic book Stocks for the Long Run for analysis on this issue. Di...
by longinvest
Thu Nov 16, 2017 6:09 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15656

Re: The 4% rule DOES fail but still makes sense!

There was no need to cut spending in 1972 despite the market crash. You could have taken out 4.5% and been fine. VPW cutting spending was an over reaction.That is the whole flaw in the system. It is easy to go conservative and never run out of money. But that isn't a free choice. You give up spendi...
by longinvest
Thu Nov 16, 2017 5:03 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15656

Re: The 4% rule DOES fail but still makes sense!

Randomguy, The main difference between the 1946 25/75 and the spreadsheet default 1972 50/50 backtest withdrawal stream shapes is the ending. 1946 ends up low while 1972 ends up high. I call this "the luck of the draw". Knowing in advance how the portfolio will fare over the next 35 years requires a...
by longinvest
Thu Nov 16, 2017 3:32 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15656

Re: The 4% rule DOES fail but still makes sense!

Grok, I'm curious what folks think about this article. https://www.manning-napier.com/Corporate/Insights/ResearchLibrary/Article/tabid/308/Article/97/Endowments-and-Foundations-A-Closer-Look-at-Spending-Rules.aspx It's more geared to endowments. But it shows that the standard 4% rule (the article us...
by longinvest
Thu Nov 16, 2017 2:30 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15656

Re: The 4% rule DOES fail but still makes sense!

VPW is far too aggressive at cutting spending as a result of market conditions which is why you tend to end up with huge sums at the end . (I'll comment the underlined statement later in this post) I don't share this opinion. If I look again at the 1946 25/75 stocks/bonds bactest, I have trouble se...
by longinvest
Thu Nov 16, 2017 9:02 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15656

Re: The 4% rule DOES fail but still makes sense!

Willthrill81, My biggest problem with the variable percentage withdrawal (VPW) plan espoused by many is that it increases your spending as you age. This is simply an artefact of looking at some (but not all) backtests. In other words, someone might get this impression of increasing withdrawals when ...