Search found 752 matches

by rbaldini
Sun Dec 03, 2017 11:35 am
Forum: Investing - Theory, News & General
Topic: Bonds Are Riskier Than People Think
Replies: 137
Views: 11775

Re: Bonds Are Riskier Than People Think

The Vanguard Total Bond Fund is often mentioned. This fund is down 4% over the past 5 years and currently yields 2.4%. Many people are happy with this performance and consider it "safe". The only way that this is "safe" to me is if you have so much money that it doesn't actually matter how your inv...
by rbaldini
Fri Dec 01, 2017 2:00 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

Yes, but what about: if the stock prices go down, you have to wait until they go back up. With a house, you still get consistent cash flow during the period that you can actually use to invest in other things during that time? Doesn't this beat out stocks any time? Any time? I mean, yes, in periods...
by rbaldini
Fri Dec 01, 2017 1:44 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

do not think in terms of 'cash flow' vs 'capital gains' - just focus on total returns of the investment. That's a good point, so let's maybe try to simplify things. You have a large chunk of cash. What do you do with it? Consider 2 options: (1) put it in a stock index fund (or mixed with bonds), an...
by rbaldini
Fri Dec 01, 2017 1:24 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

alex_686 wrote:
Fri Dec 01, 2017 1:10 pm
No - because one does not invest for appreciation for either a home or stock. The value of any investment is the discounted cash flow to equity.
That seems like more of an academic statement than an empirical observation. Plenty of people have bought Tesla and Netflix stock for appreciation.
by rbaldini
Fri Dec 01, 2017 1:21 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

In both cases, the investor is trying to hold on to the investment and ideally sell when they are ready to retire (and hoping it is at a greater value than what they bought the shares for)? I think it is easier though to time the market and buy low and sell high for houses than to do this in the st...
by rbaldini
Fri Dec 01, 2017 1:06 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

Hard to give a comprehensive answer. Historically, houses tend to increase in value. So do stocks. Both capital gains are taxed, though if you live in the house for some 2 years or so, a lot of the gain is untaxed - that's nice, given you have to live *somewhere*. Stocks also pay dividends (usually)...
by rbaldini
Wed Nov 29, 2017 5:04 pm
Forum: Personal Finance (Not Investing)
Topic: A good friend has nearly $1M in BitCoin what do I tell him?
Replies: 142
Views: 14094

Re: A good friend has nearly $1M in BitCoin what do I tell him?

Tell him you have space on your couch if he ever needs a place to sleep in the future.
by rbaldini
Wed Nov 29, 2017 4:54 pm
Forum: Investing - Help with Personal Investments
Topic: Another House Affordability Question
Replies: 18
Views: 1454

Re: Another House Affordability Question

What's the alternative? What are you currently paying for living expenses?

Also I noticed that you sneaked in an extra $40k for 2 cars. Why? I'm guessing you're currently living in an area that doesn't require cars? $40k on top of a house is a lot of money. (Also, they need to be new?)
by rbaldini
Wed Nov 29, 2017 4:39 pm
Forum: Investing - Help with Personal Investments
Topic: When to open Vanguard account?
Replies: 14
Views: 920

Re: When to open Vanguard account?

Invest now. One doesn't "have" to rebalance at any particular time, including January. If you buy now, you will not have to rebalance in Jan, unless the markets move in a big way.
by rbaldini
Tue Nov 28, 2017 10:06 am
Forum: Investing - Help with Personal Investments
Topic: Didn't buy Bitcoin at $4600
Replies: 138
Views: 10601

Re: Didn't buy Bitcoin at $4600

alwayshedge wrote:
Tue Nov 28, 2017 12:23 am
If you understand coding and network effect, the bubble calls don't make a whole ton of sense.
Enlighten us.
by rbaldini
Fri Nov 10, 2017 12:19 pm
Forum: Investing - Theory, News & General
Topic: When is a good time to rebalance?
Replies: 30
Views: 2367

Re: When is a good time to rebalance?

When do gymnasts on a balance beam rebalance?

When they're off balance.

Pick a range and rebalance when you're outside of it.
by rbaldini
Fri Nov 10, 2017 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Any red flags all stocks no bonds...
Replies: 64
Views: 2844

Re: Any red flags all stocks no bonds...

OP, consider doing a bit of math. Say something like 2008-2009 happens again. Take all your investments right now and reduce them by 45%, under the assumption that they're all in stocks (minus any emergency funds you hold in cash, or whatever). And let's say you lose your job for a year - so no inco...
by rbaldini
Fri Nov 10, 2017 11:41 am
Forum: Investing - Help with Personal Investments
Topic: Any red flags all stocks no bonds...
Replies: 64
Views: 2844

Re: Any red flags all stocks no bonds...

In my opinion 100% stocks is a very bad idea for darc427 , the original poster. Yeah, I personally wouldn't go 100% if I had 3 kids to support. I guess it would depend on my net worth: if I had so much money that I believed I could easily survive through a big recession without pay, then maybe I'd ...
by rbaldini
Fri Nov 10, 2017 11:37 am
Forum: Investing - Help with Personal Investments
Topic: Any red flags all stocks no bonds...
Replies: 64
Views: 2844

Re: Any red flags all stocks no bonds...

How likely for a person to be lucky over 25 years and not affected financially by multiple recessions? It is more likely for a person to take a hit every few years. This is in line with my statement. A person has to be lucky for at least 10+ years. That means a person has to survive at least one re...
by rbaldini
Fri Nov 10, 2017 11:32 am
Forum: Investing - Help with Personal Investments
Topic: Any red flags all stocks no bonds...
Replies: 64
Views: 2844

Re: Any red flags all stocks no bonds...

Volatility does not matter if you do not need to use that money for 20 to 30 years. A person has to be very lucky in order for this to be true. Most of us cannot count on that. I agree - which is why I repeated that I do not suggest that most people do 100%. I don't. But suppose you were a 30 year ...
by rbaldini
Fri Nov 10, 2017 11:18 am
Forum: Investing - Help with Personal Investments
Topic: Any red flags all stocks no bonds...
Replies: 64
Views: 2844

Re: Any red flags all stocks no bonds...

Counting on being lucky for 20 to 30 years is a lousy strategy. Why do that? This is misleading. You don't have to be lucky 20 or 30 years straight to get the long-term benefit of 100% stock allocation. You will almost certainly get it. But you will also experience greater volatility along the way ...
by rbaldini
Fri Nov 10, 2017 10:46 am
Forum: Investing - Help with Personal Investments
Topic: Any red flags all stocks no bonds...
Replies: 64
Views: 2844

Re: Any red flags all stocks no bonds...

100/0 versus 80/20. To get 0.7% more average return, the person takes the risk of losing 8.2% more. A person has to be lucky for 10+ years in order to break even for this bet. This is a lousy bet. I'm not convinced this is the right way to look at it. 10.2% vs. 9.5% means 21% more money in 30 years...
by rbaldini
Fri Nov 10, 2017 10:03 am
Forum: Investing - Theory, News & General
Topic: How much does diligent rebalancing add to a portfolio?
Replies: 35
Views: 2398

Re: How much does diligent rebalancing add to a portfolio?

Let's say you've used rebalancing diligently for 40 years, throughout the course of your investing life. I on the other hand put half my contributions to savings in stocks and half in bonds, without considering the effect of market volatility on my underlying portfolio, for the same 40 years. You s...
by rbaldini
Wed Oct 04, 2017 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: How much should an 18 year old keep in bonds?
Replies: 28
Views: 1531

Re: How much should an 18 year old keep in bonds?

"should" is a tricky word. But as another data point, I'm 30 and I have about 10% in bonds. Ultimately the question is: how bad would it be for you if we hit a big recession at some point in the next few years, and you were only invested in stock? If this would be a very bad thing for you, then own ...
by rbaldini
Mon Oct 02, 2017 4:07 pm
Forum: Investing - Theory, News & General
Topic: How do you avoid bad market timing for lump sum investments?
Replies: 67
Views: 7099

Re: How do you avoid bad market timing for lump sum investments?

It seems to me that if I do just a single large purchase, at an unlucky moment, I could end up doing worse than the market. If you're invested in the market from time A to time B, and you're using a (perfect) index, then you can't "end up doing worse than the market" even if it's right before a big...
by rbaldini
Mon Oct 02, 2017 10:13 am
Forum: Investing - Theory, News & General
Topic: Marketing be damned: I am a speculator!
Replies: 6
Views: 1297

Re: Marketing be damned: I am a speculator!

I've never heard anyone define "speculation" or "investment" in a way that made them mutually exclusive. For example, Investopedia says: Investing: "Investing is the act of committing money or capital to an endeavor (a business, project, real estate, etc.) with the expectation of obtaining an additi...
by rbaldini
Wed Sep 27, 2017 2:23 pm
Forum: Investing - Help with Personal Investments
Topic: Help?! My 70 year old father is 100% invested in equities
Replies: 79
Views: 7769

Re: Help?! My 70 year old father is 100% invested in equities

From what I've read on this board and in books, a 100% AA for a 70-year old is crazy. I don't know a ton else, but my sense is that my dad relies on his investment portfolio for about 50% of his annual income (he also has a pension and Social Security) and utilizes a 3% withdrawal rate from the por...
by rbaldini
Tue Sep 26, 2017 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Bay Area Real Estate
Replies: 154
Views: 15349

Re: Bay Area Real Estate

Any recommendations on making it out here in this crazy market? I'm doing various buy vs. rent analyses and can't seem to make sense of buying (am I missing something obvious?) No, you are probably not missing anything. I left silicon valley partly because I wanted to be able to buy a house (also s...
by rbaldini
Tue Sep 26, 2017 2:24 pm
Forum: Personal Consumer Issues
Topic: The Rolex and The Boglehead
Replies: 274
Views: 11973

Re: The Rolex and The Boglehead

How many Bogleheads out there own and wear a Rolex (or similar)? Those that do, any regrets? I'd like to one day own a nice watch but for right now I just admire them all. DW might not ever sign off on a watch that expensive but still I'm curious what other Bogleheads have to say. What will a Rolex...
by rbaldini
Tue Sep 26, 2017 2:22 pm
Forum: Personal Consumer Issues
Topic: The Rolex and The Boglehead
Replies: 274
Views: 11973

Re: The Rolex and The Boglehead

I figure the purpose of paying lots of money for a show piece is that other people will notice, thereby increasing your prestige in their eyes. But only very particular people would actually notice your watch and be able to distinguish it from cheaper ones, and care about it. I'm not one of those pe...
by rbaldini
Mon Sep 25, 2017 7:24 pm
Forum: Personal Consumer Issues
Topic: Tipping question....Applebees
Replies: 87
Views: 7107

Re: Tipping question....Applebees

TomatoTomahto wrote:
Sun Sep 24, 2017 8:19 pm
Sure, they’re computing a tip on tax.
And thereby increasing the total cost of your meal by about 1%, or about 50 cents in this case.
by rbaldini
Mon Sep 25, 2017 12:06 pm
Forum: Investing - Theory, News & General
Topic: Research Affiliated Model Portfolios: ZERO % US stocks
Replies: 46
Views: 4988

Re: Research Affiliated Model Portfolios: ZERO % US stocks

I'm no expert, but here's my take: there's no way they're accounting for full uncertainty in the estimates. The predictive power of PE10 isn't good enough to recommend all-or-nothing kind of predictions.
by rbaldini
Mon Sep 25, 2017 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: I don't understand investing beyond retirement
Replies: 11
Views: 1217

Re: I don't understand investing beyond retirement

Are you asking something like this: "Okay - I've done all the Boglehead checklist items: I'm contributing my preferred amount to tax-advantaged retirement accounts, I have an emergency account, my debt is either 0 or under control. But I still have all this cash lying around. What do I do with it?" ...
by rbaldini
Mon Sep 25, 2017 9:35 am
Forum: Personal Finance (Not Investing)
Topic: Is it a stupid financial decision to rent for another year?
Replies: 13
Views: 930

Re: Is it a stupid financial decision to rent for another year?

The NY Times calculator thinks we would basically break even financially either way. The NY Times calculator (https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html) is what I usually recommend, so you're ahead of the curve. I assume you played with the numbers to best fit your in...
by rbaldini
Mon Sep 25, 2017 9:03 am
Forum: Investing - Theory, News & General
Topic: What is the main purpose of rebalancing?
Replies: 59
Views: 5023

Re: What is the main purpose of rebalancing?

Note: If you believe the stock and bond markets are an independent random walk (with positive drift), then rebalancing is *not* a method for buying low and selling high. It is not a method for boosting risk-adjusted return. It is simply a way of maintaining your preferred asset allocation. I have t...
by rbaldini
Mon Sep 25, 2017 8:56 am
Forum: Investing - Help with Personal Investments
Topic: Are all investments compound interest?
Replies: 50
Views: 3168

Re: Are all investments compound interest?

Are all investments compound interest? Most boglehead-type investments are thought of as compounding: stocks, bonds, savings accounts, real estate property value. What wouldn't be? I think the rent income from investing in real estate would not count as compounding, because you get some fixed amoun...
by rbaldini
Tue Sep 19, 2017 2:50 pm
Forum: Investing - Theory, News & General
Topic: What is the main purpose of rebalancing?
Replies: 59
Views: 5023

Re: What is the main purpose of rebalancing?

Note: If you believe the stock and bond markets are an independent random walk (with positive drift), then rebalancing is *not* a method for buying low and selling high. It is not a method for boosting risk-adjusted return. It is simply a way of maintaining your preferred asset allocation.
by rbaldini
Tue Sep 19, 2017 10:51 am
Forum: Investing - Theory, News & General
Topic: Data-driven individual stock approach
Replies: 28
Views: 1664

Re: Data-driven individual stock approach

As a (I think) similarly skilled data scientist, I'd wonder if its worth the time. Could you spend those hours coding up something else that might advance your career and earning potential? Or working harder on your day job? If you do a good job, it's totally possible that you could beat the market ...
by rbaldini
Tue Sep 19, 2017 8:40 am
Forum: Investing - Theory, News & General
Topic: What is the main purpose of rebalancing?
Replies: 59
Views: 5023

Re: What is the main purpose of rebalancing?

You decided at some point that your preferred stock/bond allocation is X/Y. You decided this was the best risk/reward tradeoff for you. Market forces have moved your actual allocation to (X+d)/(Y-d). You are now taking on either too much risk or gaining too little reward. The purpose of rebalancing ...
by rbaldini
Mon Sep 18, 2017 3:32 pm
Forum: Personal Consumer Issues
Topic: Getting (young) kids interested in coding
Replies: 81
Views: 5469

Re: Getting (young) kids interested in coding

I doubt it matters much at age 6, to be honest. Unless they're *very* bright for their age, they're not going to learn anything at the age of 6 that they can't catch up on *much* faster in their teenage years (or later, like myself). And if they don't have a natural knack for it, IMO they won't have...
by rbaldini
Mon Sep 18, 2017 3:25 pm
Forum: Investing - Theory, News & General
Topic: International Equity: Are managed funds better than Index funds?
Replies: 35
Views: 2418

Re: International Equity: Are managed funds better than Index funds?

The formulation leads to the useful intuition that the passive part of the market owns the market return (minus very small costs), and the active part of the market collectively owns the market return (minus higher costs), among other things. But it is not exact in reality. Just close enough for ma...
by rbaldini
Mon Sep 18, 2017 1:49 pm
Forum: Investing - Theory, News & General
Topic: International Equity: Are managed funds better than Index funds?
Replies: 35
Views: 2418

Re: International Equity: Are managed funds better than Index funds?

Right, but I think the point is it's not possible to define active and passive simultaneously in the same investment universe. Due to the issues lack_ey describes, active managers have more flexibility than passive managers. I think you can define them just fine. E.g. passive = "the total amount in...
by rbaldini
Mon Sep 18, 2017 1:42 pm
Forum: Investing - Theory, News & General
Topic: International Equity: Are managed funds better than Index funds?
Replies: 35
Views: 2418

Re: International Equity: Are managed funds better than Index funds?

If investing skill or some other attributes give certain groups an edge over others, then actively managed funds as a group could easily be better than index funds, even the best-in-breed index funds. It just requires a group of losers who are underperforming, i.e. the active funds taking alpha fro...
by rbaldini
Mon Sep 18, 2017 1:39 pm
Forum: Personal Finance (Not Investing)
Topic: Worth buying an excessive priced house?
Replies: 43
Views: 4209

Re: Worth buying an excessive priced house?

Mortgage of 2-3x annual income sounds totally fine. I wouldn't call that excessive, especially given your apparently good financial standing. Unless you're expecting a dip in income, or you can think of something you'd much rather do with the money (more savings and investing? family vacations? earl...
by rbaldini
Mon Sep 18, 2017 1:32 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Vanguard Debunks Dividend Myth
Replies: 112
Views: 12368

Re: Larry Swedroe: Vanguard Debunks Dividend Myth

I guess I continue to misunderstand this whole topic. IMO, I didn't need a historical study of data to know this. All I need to know is that (1) when a dividend occurs, the stock price drops by about the same amount, so my total wealth stays the same, and (2) dividends are taxed higher than (long-te...
by rbaldini
Mon Sep 18, 2017 1:22 pm
Forum: Investing - Help with Personal Investments
Topic: math on determining rebalancing bands?
Replies: 6
Views: 514

Re: math on determining rebalancing bands?

Presumably there's a tradeoff between setting too small and too large a band. If the former, you're constantly rebalancing, which means selling and buying stock, which means paying more short-term capital gains taxes (let me know if I'm getting that wrong). If the latter, you're letting your AA get ...
by rbaldini
Mon Sep 18, 2017 12:51 pm
Forum: Investing - Theory, News & General
Topic: Are long-term market returns reliable?
Replies: 38
Views: 4256

Re: Are long-term market returns reliable?

But it is the people in the latter stage of their investing horizon who have accumulated a substantial nestegg at this point who really need to be paying attention. For instance, check out the 1978-2007 period, during which a monthly investment in the S&P 500 of $100 would have grown to $330,842 ov...
by rbaldini
Mon Sep 18, 2017 12:47 pm
Forum: Investing - Theory, News & General
Topic: International Equity: Are managed funds better than Index funds?
Replies: 35
Views: 2418

Re: International Equity: Are managed funds better than Index funds?

nisiprius wrote:
Sat Sep 16, 2017 6:29 pm
I take that to mean "across the board." Generally better. By and large, are you better off picking a managed fund over an index fund?
Isn't the answer to this question *necessarily* no? No data needed? https://web.stanford.edu/~wfsharpe/art/ ... active.htm
by rbaldini
Sun Sep 17, 2017 7:32 pm
Forum: Investing - Theory, News & General
Topic: Are long-term market returns reliable?
Replies: 38
Views: 4256

Re: Are long-term market returns reliable?

So, when fishing around for comparative data, make sure you are comparing apples-to-apples. The most realistic data are represented in the article because it is real returns that count, and just about everybody invests periodically not with a single lump sum, and just about everybody loses some of ...
by rbaldini
Sat Sep 16, 2017 11:03 pm
Forum: Investing - Theory, News & General
Topic: Are long-term market returns reliable?
Replies: 38
Views: 4256

Re: The myth about long-run stock returns

Two thoughts. 1. Folks have suggested this is misleading, so I've checked the numbers myself. See S&P 500 numbers here from 1928: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html Of all the contiguous 30-year periods shown here, the smallest total return is a factor of 9.98...
by rbaldini
Thu Sep 14, 2017 11:05 am
Forum: Investing - Theory, News & General
Topic: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg
Replies: 94
Views: 12681

Re: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg

It's safe to say that Ted Seides is no Warren Buffett. True, but it's not like Buffett used his oracle magic to pick the winners here. He just picked the S&P 500. Easy. Any Boglehead would have won this bet ... had they the money to put down. The lesson isn't "Buffett is amazing!" It's "indexing wo...
by rbaldini
Tue Sep 12, 2017 11:19 am
Forum: Personal Consumer Issues
Topic: Is it really Worth it to brown bag your lunch at work?
Replies: 313
Views: 19673

Re: Is it really Worth it to brown bag your lunch at work?

I'm suspicious that saving a few bucks per day in meals might subconsciously encourage me to spend a few extra bucks per day on something else. That being said, on the whole I think it can't hurt. I try to bring lunch at least half the time. Save money, and have greater control over your diet. On th...
by rbaldini
Mon Sep 11, 2017 1:49 pm
Forum: Investing - Help with Personal Investments
Topic: What index funds that will benefit from resent disasters
Replies: 21
Views: 1901

Re: What index funds that will benefit from resent disasters

But on the whole, lots of property has just been destroyed. That's a bad thing. If anything, shouldn't we expect economic productivity and therefore returns to decrease, if only by a small amount? Or am I fundamentally missing something here? That property mostly in private hands wasn't doing too m...