Search found 95 matches

by QBoy
Sat Jan 23, 2021 1:59 pm
Forum: Investing - Theory, News & General
Topic: How to profit from irrational behavior?
Replies: 40
Views: 2438

Re: How to profit from irrational behavior?

There is a theory in economics called "rational bubbles." In it, prices deviate from fundamentals, but the bubble component of the price rises in expectation at the required rate of return, so there are no profits to be had from shorting the asset. Even if not exactly true, this theory mig...
by QBoy
Tue Jan 19, 2021 11:12 pm
Forum: Personal Consumer Issues
Topic: Engagement Ring
Replies: 128
Views: 6102

Re: Engagement Ring

My story: Many years ago, I gave my future wife a small family heirloom ring when we were engaged and I was a student. Fast forward. On our 25th anniversary, we shopped together for a new ring at Tiffany's when our financial circumstances had much improved. About 4 carats. Overpriced, to be sure. Bu...
by QBoy
Mon Jan 18, 2021 10:51 pm
Forum: Investing - Theory, News & General
Topic: Do you believe in the Efficient Market Hypothesis?
Replies: 118
Views: 5592

Re: Do you believe in the Efficient Market Hypothesis?

My view: There are a few very smart investors who can beat the market. But there are many, many investors who claim they are smart and can beat the market. And it takes many years to distinguish the former from the latter. So while the EMH may be false in a strict sense, it is true for all practical...
by QBoy
Fri Jan 15, 2021 7:32 am
Forum: Investing - Theory, News & General
Topic: Good Commodity ETF/REIT Options?
Replies: 7
Views: 475

Re: Good Commodity ETF/REIT Options?

I would prefer BTC over this gamble if one wants diversification. There is a difference. Reasonable theory and evidence indicates that real estate and commodities offer similar Sharpe ratios to equities. That is why adding some to a largely equity portfolio for purposes of diversification makes sen...
by QBoy
Fri Jan 15, 2021 4:45 am
Forum: Investing - Theory, News & General
Topic: Good Commodity ETF/REIT Options?
Replies: 7
Views: 475

Re: Good Commodity ETF/REIT Options?

I use GSG for commodities and VNQ for REITS.
by QBoy
Fri Jan 08, 2021 9:03 pm
Forum: Personal Consumer Issues
Topic: How much to give kid for living expense?
Replies: 129
Views: 5619

Re: How much to give kid for living expense?

Here is the budget Harvard Medical School suggests for its students:

https://meded.hms.harvard.edu/md-cost-attendance

Living expenses are projected to be about $32,000 per year, half of which is for rent.
by QBoy
Tue Jan 05, 2021 2:50 pm
Forum: Personal Investments
Topic: Can I create generational wealth?
Replies: 193
Views: 18838

Re: Can I create generational wealth?

You can set up a dynasty trust, invested by an independent trust like Vanguard. The rules of the trust determine how the benefits are paid out to your descendants. Assuming a 5 percent long-term real return and a doubling of number of descendants every generation, you should pay out only about 2.5 p...
by QBoy
Fri Jan 01, 2021 1:39 pm
Forum: Personal Investments
Topic: Critic my Asset Allocation from Economist
Replies: 6
Views: 498

Re: Critic my Asset Allocation from Economist

You seem to have too much in emerging markets, certainly compared with market weights. I would not take much assurance from the historical simulation because the time frame is very short.

Also, with no bonds, it is aggressive. Are you very risk tolerant?
by QBoy
Mon Dec 21, 2020 2:00 pm
Forum: Investing - Theory, News & General
Topic: What long-term real return do you now expect?
Replies: 86
Views: 7843

What long-term real return do you now expect?

When planning ahead for several decades of retirement, it is useful to have an expected real return in mind. Historically, a balanced portfolio of about half stock and half bonds has produced a real return that averages about 5 percent per year. But bond yields are now very low, and stock valuations...
by QBoy
Sat Nov 28, 2020 11:03 pm
Forum: Personal Finance (Not Investing)
Topic: Net Worth, high home equity, SWR and investment risk tolerance in retirement - how do others approach this?
Replies: 29
Views: 2704

Re: Net Worth, high home equity, SWR and investment risk tolerance in retirement - how do others approach this?

You are in great shape. However, your calculation of 47x is misleading. If you were to sell your house, you would have to rent, and your expenses would rise, so your net worth would be less than 47x expenses. Home equity is tricky, because it is not very liquid. In a perfect world, reverse mortgages...
by QBoy
Fri Nov 27, 2020 4:15 pm
Forum: Personal Investments
Topic: What to invest in ?
Replies: 6
Views: 709

Re: What to invest in ?

VTI or VT
by QBoy
Fri Nov 27, 2020 3:10 pm
Forum: Personal Finance (Not Investing)
Topic: Putting Assets into a Revocable Living Trust
Replies: 9
Views: 787

Re: Putting Assets into a Revocable Living Trust

I cannot answer all your questions, but a key question to ask yourself: If you both die, do you want your kids to have full access to your estate at age 18? For my kids, I answered no. Age 18 is very young, and they could easily make decisions that they would later regret. Even age 21 is young if th...
by QBoy
Fri Nov 27, 2020 2:59 pm
Forum: Investing - Theory, News & General
Topic: rebalancing question
Replies: 8
Views: 375

Re: rebalancing question

Sounds good. However, I would consider adding some international diversification to your equity holdings.
by QBoy
Wed Nov 25, 2020 2:56 pm
Forum: Investing - Theory, News & General
Topic: Dow 36k ?
Replies: 22
Views: 2064

Re: Dow 36k ?

Dow 36K is a 20 percent return. The mean return is about 5 (excluding dividends) and the standard deviation is about 15. So this change is a z value of (20-5)/15=1. The distribution tables for the normal distribution put the probability at 16 percent.
by QBoy
Sun Nov 22, 2020 9:27 am
Forum: Personal Finance (Not Investing)
Topic: How much would you give your kids if you were UHNW?
Replies: 67
Views: 4671

How much would you give your kids if you were UHNW?

This issue arose in the middle of another thread, but I thought it should have its own discussion. Suppose that you are ultra high net worth ($30 million or more), and suppose that this amount is much more than you will spend during your life. You want to give some to each of your kids, either while...
by QBoy
Thu Nov 19, 2020 10:53 pm
Forum: Personal Consumer Issues
Topic: Should I buy a new BMW X3?
Replies: 37
Views: 3452

Re: Should I buy a new BMW X3?

My wife loves hers.
by QBoy
Sat Nov 14, 2020 3:07 pm
Forum: Personal Finance (Not Investing)
Topic: Gifts to children under $15,000
Replies: 69
Views: 4719

Re: Gifts to children under $15,000

Yes, you have to keep track of all gifts during the year. If you exceed $15k, you need to file a gift tax return. No tax is due. You just use up some of your gift/estate tax exemption. My guess is that if you exceed $15k by a small amount, the IRS won't ever notice. Their goal is to avoid people wri...
by QBoy
Tue Oct 13, 2020 2:25 pm
Forum: Personal Consumer Issues
Topic: Building a new house - Successes and regrets?
Replies: 53
Views: 5197

Re: Building a new house - Successes and regrets?

My wife and I built a vacation house and are glad we did. The best decision we made was finding a great architect. Expensive but worth every penny. The architect in turn introduced us to several contractors that she had worked with. We chose one of those based on previous work of his that we saw and...
by QBoy
Sun Oct 11, 2020 5:34 am
Forum: Personal Finance (Not Investing)
Topic: What would your retirement number be if?
Replies: 30
Views: 6677

Re: What would your retirement number be if?

My rough calculation suggests $2 million.
by QBoy
Thu Oct 08, 2020 4:48 am
Forum: Personal Investments
Topic: When to start investing
Replies: 13
Views: 1009

Re: When to start investing

My view: Given that no one can time the market, going immediately to your target asset allocation is optimal. Emotions, however, are an important caveat. You might feel regret if you went immediately to your target and the market soon fell. Would you then get cold feet and reverse course? If yes, th...
by QBoy
Mon Oct 05, 2020 2:58 am
Forum: Personal Finance (Not Investing)
Topic: What is my magic number?
Replies: 33
Views: 5270

Re: What is my magic number?

In light of your young age and the very low level of current interest rates, I might use a 2 percent payout rather than 2.5. That would put your "magic number" around $9 million.
by QBoy
Sun Sep 13, 2020 5:13 am
Forum: Personal Finance (Not Investing)
Topic: To architect or not to architect?
Replies: 21
Views: 2175

Re: To architect or not to architect?

Based upon your previous threads, I would strongly recommend you retain an architect, both for the design of the home as well as the construction administration. You don't know what you don't know and relying on fellow Bogleheads for advice to guide your interactions with your general contractor an...
by QBoy
Fri Sep 11, 2020 8:03 am
Forum: Personal Investments
Topic: OK to change old SEP-IRA funds?
Replies: 3
Views: 199

Re: OK to change old SEP-IRA funds?

retiredjg wrote: Fri Sep 11, 2020 7:55 am No problem.
+1
by QBoy
Tue Sep 01, 2020 9:01 pm
Forum: Personal Investments
Topic: Annuitizing vs. 4% withdrawls
Replies: 45
Views: 2677

Re: Annuitizing vs. 4% withdrawls

The case for the annuity is that it provides insurance against outliving her assets. I am skeptical about the value of the ten-year certain. Without that, she could get a better income from the annuity.
by QBoy
Tue Sep 01, 2020 12:36 pm
Forum: Personal Investments
Topic: Considering switching to unhedged international bonds
Replies: 26
Views: 1818

Re: Considering switching to unhedged international bonds

The case for hedging is that historically it has given a better risk/return profile for a US investor. That is why Vanguard recommends hedging. However, from a theoretical standpoint, I have never understood the case. The efficient market hypothesis says the typical investor should hold the market p...
by QBoy
Mon Aug 31, 2020 12:18 pm
Forum: Personal Investments
Topic: Asset allocation drifting but can't rebalance without removing stock from Roth, would you fix or ignore?
Replies: 6
Views: 396

Re: Asset allocation drifting but can't rebalance without removing stock from Roth, would you fix or ignore?

I would ignore. The main thing that determines the level of risk is the stock/bond ratio, which I gather is on target. The ratio within the bond category seems secondary.
by QBoy
Mon Aug 31, 2020 12:09 pm
Forum: Investing - Theory, News & General
Topic: Tips hyperinflation?
Replies: 46
Views: 3157

Re: Tips hyperinflation?

I believe that TIPS would protect the real value of the bond under hyperinflation in principle. In practice is another story. Governments that produce hyperinflation are highly dysfunctional, so I would not be surprised to see them change the rules of the game under that circumstance. An example of ...
by QBoy
Fri Aug 21, 2020 10:12 am
Forum: Investing - Theory, News & General
Topic: Interesting take on 60/40 from ex-Fed staffers
Replies: 15
Views: 2689

Re: Interesting take on 60/40 from ex-Fed staffers

The article suggests reduced stock exposure and more exposure in long-term bonds. It sounds a bit like a risk-parity portfolio. People look at the 1.4 percent yield on 30-year Treasuries in different ways. Some say the yield is at historic lows and so is likely to rise. Some say, not so fast: Look a...
by QBoy
Sat Aug 15, 2020 2:07 pm
Forum: Personal Finance (Not Investing)
Topic: Did any inheritance make positive effect on your life?
Replies: 229
Views: 19547

Re: Did any inheritance make positive effect on your life?

Inheriting about $250K (in today's dollars) while in college allowed me to pursue four years of graduate studies without thinking much about money. That investment in human capital has earned the highest return of any investment I have ever made.
by QBoy
Tue Aug 04, 2020 2:48 pm
Forum: Investing - Theory, News & General
Topic: Why are gold and long-term treasuries simultaneously rising?
Replies: 10
Views: 531

Re: Why are gold and long-term treasuries simultaneously rising?

Here is an hypothesis: Saving is up because people cannot leave their homes to spend. The saving goes into all investment classes, pushing their prices higher, other things being equal. This hypothesis also explains why the stock market is relatively strong given the deep recession we are experienci...
by QBoy
Thu Jul 30, 2020 7:09 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a Universal Basic Income(UBI)
Replies: 42
Views: 3588

Re: Setting up a Universal Basic Income(UBI)

You can accomplish this via a trust fund with a third-party trustee, such as Vanguard trust services. The trust document determines how much is paid out, to whom, and under what circumstances. Many states now allow "dynasty trusts," which can go on forever and provide your "UBI" ...
by QBoy
Mon Jul 27, 2020 5:33 am
Forum: Personal Finance (Not Investing)
Topic: Charitable Annuity for Home
Replies: 2
Views: 308

Charitable Annuity for Home

Has anyone had any experience with funding a charitable annuity with the remainder value of real estate? This arrangement is sometimes called "charitable annuity for home." It seem like it might be an alternative to a reverse mortgage. In particular, I was wondering (1) Has anyone here don...
by QBoy
Mon Jun 04, 2018 1:26 pm
Forum: Investing - Theory, News & General
Topic: 19 years maturity, and only a FOUR year duration?
Replies: 4
Views: 733

Re: 19 years maturity, and only a FOUR year duration?

I am not sure, but I would guess it is floating rate notes. For example, if the principal is repaid after 20 years, but the interest rate adjusts ever six months (based on some benchmark), I believe the bond's maturity is long but its duration is short.
by QBoy
Wed Jul 08, 2015 8:21 am
Forum: Personal Finance (Not Investing)
Topic: Help friend decide whether to trade up
Replies: 9
Views: 1513

Re: Help friend decide whether to trade up

Thank you, all, for the input. On the vacation home: It is important to their family lifestyle and may be a retirement home down the line, so they are not interested in selling or renting now, but that could change in the future. On the value of the business: They are not planning to sell, as they e...
by QBoy
Tue Jul 07, 2015 5:37 pm
Forum: Personal Finance (Not Investing)
Topic: Help friend decide whether to trade up
Replies: 9
Views: 1513

Help friend decide whether to trade up

A friend of mine, who reads this forum but doesn’t contribute, is interested in Bogleheads’ view of the following personal decision he faces. Here is his situation in round numbers: He and his wife are in their mid-50s with grown kids. They run their own business that now makes $700,000 a year (befo...
by QBoy
Thu Apr 09, 2015 7:25 am
Forum: Personal Finance (Not Investing)
Topic: How do I calculate mortgage interest phaseout?
Replies: 2
Views: 606

Re: How do I calculate mortgage interest phaseout?

I believe the best way to view the Pease phase-out is as surcharge on high incomes. It is unlikely to affect the marginal value of the mortgage deduction. This is because the limitation on deductions is a function only of income, not of the amount being deducted. Any additional deduction reduces tax...
by QBoy
Tue Apr 07, 2015 5:56 am
Forum: Personal Finance (Not Investing)
Topic: When to give adult children their inheritance?
Replies: 57
Views: 13121

Re: When to give adult children their inheritance?

If the sum is large, you might consider a trust that pays the money out gradually over your children's lifetimes. One advantage if properly set up is that the principal will not enter your children's estate when they die and leave the money to your grandchildren.
by QBoy
Sun Mar 01, 2015 4:17 pm
Forum: Personal Consumer Issues
Topic: Wife turning 50, Ideas for gift?
Replies: 25
Views: 4571

Re: Wife turning 50, Ideas for gift?

My wife is the type who hates surprise parties thrown for her. I learned that fact when my sister threw her a surprise wedding shower 30+ years ago, with my collaboration. Never made that mistake again. If you want a surprise, how about a surprise trip for the weekend for the two of you to, say, a c...
by QBoy
Sun Feb 15, 2015 6:09 am
Forum: Personal Investments
Topic: Paying life insurance term premiums with immediate annuity
Replies: 7
Views: 684

Re: Paying life insurance term premiums with immediate annui

Buying term while you need insurance is fine, but the annuity part is harder to justify, in my view. Insurance is for when you are worried about dying too early. Annuities are for when you are worried about living too long.
by QBoy
Sun Feb 15, 2015 5:20 am
Forum: Personal Investments
Topic: Paying life insurance term premiums with immediate annuity
Replies: 7
Views: 684

Re: Paying life insurance term premiums with immediate annui

This does not sound like a good idea to me. In a sense, you are proposing two opposite transactions. An annuity turns a lump-sum into a string of payments until you die, while life insurance turns a string of payments until you die into a lump-sum. By doing both, you a turning a lump-sum into a stri...
by QBoy
Sun Feb 01, 2015 4:15 pm
Forum: Personal Consumer Issues
Topic: Timing of small ship cruise to Nantucket
Replies: 6
Views: 1040

Re: Timing of small ship cruise to Nantucket

We are regulars on Nantucket and would recommend early September. By then, the crowds are smaller, but the weather is still great. Many say September is the best month on the island.
by QBoy
Mon Jan 12, 2015 2:02 pm
Forum: Personal Consumer Issues
Topic: Recommendations for Family Trip to San Diego
Replies: 16
Views: 2281

Re: Recommendations for Family Trip to San Diego

Hypersion wrote:Wild Animal Park (Safari Park)
I second the Wild Animal Park. Even better than the more famous zoo.
by QBoy
Mon Jan 05, 2015 4:17 pm
Forum: Investing - Theory, News & General
Topic: Oil price goes down,any investment opportunities?
Replies: 9
Views: 1954

Re: Oil price goes down,any investment opportunities?

A case can be made for a SMALL percentage of your asset allocation in commodities. If one follows this strategy, then when prices fall (as they have recently), you should perhaps buy more to rebalance. If you want to read more on the reason for owning commodities, I suggest this as a starting point:...
by QBoy
Thu Jul 24, 2014 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: How does gift/estate tax indexation work?
Replies: 6
Views: 668

Re: How does gift/estate tax indexation work?

Thank you, bsteiner. That is very helpful. I think it means that a person gets a much larger benefit from the exemption by acting early. sscritic: Yes, there are individual returns. I did not mean to suggest otherwise. It is just that estate planning is often done as a couple, and the IRS via portab...
by QBoy
Thu Jul 24, 2014 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: How does gift/estate tax indexation work?
Replies: 6
Views: 668

Re: How does gift/estate tax indexation work?

Try this. Fill out a gift tax return. Pretend you gave the limit of $3.5 million in 2009. Give a gift of $1.75 million in 2013. What do you see? I haven't done it, but that is what I would do if I wanted an answer to your question. P.S. Gift taxes are individual, not joint. Yes, two people can give...
by QBoy
Thu Jul 24, 2014 1:09 pm
Forum: Personal Finance (Not Investing)
Topic: How does gift/estate tax indexation work?
Replies: 6
Views: 668

How does gift/estate tax indexation work?

The lifetime exemption for the gift/estate tax is now $10.68 million (for a couple) and is indexed to inflation. I am not sure how this works. Suppose that, while living, a couple funds a trust for their descendants with $10.68 million and thus fully uses up their lifetime exemption. Then some years...
by QBoy
Fri Feb 07, 2014 10:07 pm
Forum: Personal Consumer Issues
Topic: I'm feeling old today
Replies: 97
Views: 9862

Re: I'm feeling old today

Is this topic actionable? If not, why aren't the moderators locking it? :wink:
by QBoy
Tue Jan 21, 2014 5:03 pm
Forum: Investing - Theory, News & General
Topic: Why shouldn't REIT's be a large % of your portfolio?
Replies: 67
Views: 13859

Re: Why shouldn't REIT's be a large % of your portfolio?

Because REITs are volatile (higher standard deviation than the overall stock market) and are correlated with the stock market (which limits the diversification value).
by QBoy
Mon Jan 20, 2014 8:35 am
Forum: Personal Finance (Not Investing)
Topic: Family member's pension was invested into a Ponzi scheme
Replies: 14
Views: 2924

Re: Family member's pension was invested into a Ponzi scheme

If you live near a law school, you might find help there. Sometimes there are pro bono organizations on campus, where students are guided by professors. Your case might well interest them.