Search found 1076 matches

by rbaldini
Wed Feb 19, 2020 1:11 pm
Forum: Investing - Theory, News & General
Topic: Odd Lots: Why Passive Investing Might Be Distorting The Market (Podcast)
Replies: 29
Views: 2346

Re: Odd Lots: Why Passive Investing Might Be Distorting The Market (Podcast)

Not sure how indexes that purchase stock *in proportion to their market cap* could "distort" the market...
by rbaldini
Wed Feb 12, 2020 4:24 pm
Forum: Investing - Theory, News & General
Topic: At what point is this a bubble?
Replies: 157
Views: 13617

Re: At what point is this a bubble?

Bubbles, by their very nature, are elusive. If everyone knew we were in a bubble, we wouldn't be in a bubble. You don't know until after it has popped. You have basically two choices. You can go with your gut / analysis / whatever, and pull some money out of the market. Or you can stick to an asset ...
by rbaldini
Sat Feb 08, 2020 12:24 am
Forum: Investing - Theory, News & General
Topic: It's all about accumulating shares?
Replies: 71
Views: 6245

Re: It's all about accumulating shares?

Don’t overthink it. It’s about money.
by rbaldini
Wed Feb 05, 2020 5:34 pm
Forum: Investing - Theory, News & General
Topic: Why are you holding bonds
Replies: 161
Views: 10845

Re: Why are you holding bonds

I ask myself this from time to time. 32 years old, dink household, good jobs, save aggressively. I hold 10% bonds, and probably will not increase for a long time. I often think "we could easily go to 100%", and maybe I'll make the switch one day. Something about having almost all of my net worth in ...
by rbaldini
Wed Jan 29, 2020 6:18 pm
Forum: Personal Investments
Topic: I know we dont buy individual stocks....
Replies: 31
Views: 2972

Re: I know we dont buy individual stocks....

I feel like 90% of the time, the reason given by an amateur investor (of which I am one) for "why I'm buying this stock" is either "because it has gone up" or "because it has gone down". I don't buy individual stock.
by rbaldini
Mon Jan 27, 2020 5:49 pm
Forum: Investing - Theory, News & General
Topic: What do you know that the market does not? (CoronaVirus)
Replies: 21
Views: 2579

Re: What do you know that the market does not? (CoronaVirus)

If your life's work, your particular peculiar set of life circumstances, has situated you in a position with information that a hotshot wall street analyst cannot simply acquire within a few days worth of work by talking to a few experts, you probably know more than what the market has priced in. A...
by rbaldini
Sat Jan 18, 2020 10:15 am
Forum: Personal Finance (Not Investing)
Topic: Realized we made a major mistake and feeling really sick.
Replies: 162
Views: 14013

Re: Realized we made a major mistake and feeling really sick.

You made the right decision given what you knew at the time.

It is always possible to look back and find a stock that would have vastly outperformed whatever strategy we went with. But it is impossible to determine which stock it will be ahead of time. It's a waste of energy to agonize over this.
by rbaldini
Fri Jan 17, 2020 9:39 am
Forum: Investing - Theory, News & General
Topic: Is it wise to only to rebalance on the drops and not the ups
Replies: 22
Views: 1906

Re: Is it wise to only to rebalance on the drops and not the ups

The goal of rebalancing is to maintain an AA that you have decided is ideal for your needs. Whenever it gets too far off, you rebalance to the ideal again. It doesn’t matter whether this is due to an up or a down.
by rbaldini
Tue Jan 14, 2020 12:03 pm
Forum: Investing - Theory, News & General
Topic: Why not go all aggressive? The risk seems about the same....
Replies: 51
Views: 4369

Re: Why not go all aggressive? The risk seems about the same....

During a crash, all funds crash almost the same... tech fund or the "safe" 500 funds all crash hard, tech virtually just a litte more then the "safer" funds . So it seems virtually unnecessary to try to play it "safe" and one should diversify but not be afraid to go tech heavy expecting the ultimat...
by rbaldini
Tue Jan 14, 2020 10:28 am
Forum: Investing - Theory, News & General
Topic: Fallacy of time diversification
Replies: 105
Views: 6619

Re: Fallacy of time diversification

I decided to do some simulating to hopefully shed light here. Suppose you took $1 and invested it into a random walk fund that has an expected log normal return of 0.1 and standard deviation of 0.3. I simulate out a million such cases and show the 10th and 90th percentile of total value and annualiz...
by rbaldini
Tue Jan 14, 2020 9:53 am
Forum: Investing - Theory, News & General
Topic: Fallacy of time diversification
Replies: 105
Views: 6619

Re: Fallacy of time diversification

I had to look up the fallacy of time diversification because I had not seen the term before. It’s a strange term, I think. The fallacy as stated seems to be based on confusing mean annualized return in percent with total return in absolute dollars. When investing in a random walk, the longer one hol...
by rbaldini
Tue Jan 14, 2020 12:43 am
Forum: Investing - Theory, News & General
Topic: Fallacy of time diversification
Replies: 105
Views: 6619

Re: Fallacy of time diversification

Flip three coins. What is the probability that they all come up tails? How about thirty coins? Three hundred coins?
by rbaldini
Mon Jan 13, 2020 7:57 pm
Forum: Personal Finance (Not Investing)
Topic: Critique My 2019 Spending
Replies: 48
Views: 4421

Re: Critique My 2019 Spending

Saving $80k on $194k salary is great.

Now listen closely: if you meet your savings goals, it doesn’t matter what you spend your money on. Disregard anyone telling you to spend more/less on x. It is irrelevant.
by rbaldini
Mon Jan 13, 2020 5:23 pm
Forum: Personal Finance (Not Investing)
Topic: How much car can i afford
Replies: 128
Views: 7854

Re: How much car can i afford

Ask not "how much can I spend on x"? Ask "how much do I need/want to save?" Save that amount. Then spend the rest of your money on literally whatever you want. It doesn't matter. This is the answer to any question about expenditure on this forum. Bogleheads don't (or shouldn't) care how you spend, j...
by rbaldini
Fri Jan 10, 2020 6:28 pm
Forum: Personal Investments
Topic: Is putting money in a 401k a bad idea?
Replies: 31
Views: 5143

Re: Is putting money in a 401k a bad idea?

With a 401k, you put money in without paying tax on it. It grows for many years. Then you pay income tax when you withdraw. If the initial amount invested is x, then you get x*G*(1-t_r) Where G is the growth factor (exponential compounding, basically), and t_r is the tax rate in retirement. Let's sa...
by rbaldini
Fri Jan 10, 2020 10:20 am
Forum: Investing - Theory, News & General
Topic: Value of Active and Ongoing Reading of the Bogleheads Forums
Replies: 104
Views: 8933

Re: Value of Active and Ongoing Reading of the Bogleheads Forums

95% of the discussion on the forum is endless repetition of old arguments. Check in from time to time for the other 5%.
by rbaldini
Fri Jan 10, 2020 10:12 am
Forum: Personal Investments
Topic: Where do you keep your Emergency Funds? How is it invested?
Replies: 139
Views: 11321

Re: Where do you keep your Emergency Funds? How is it invested?

I don’t have an emergency fund. I manage my investments such that I can always access enough cash for a large expense even if there were a big market drop. Basically, once you have enough money in a taxable account, the emergency account is not necessary.
by rbaldini
Fri Jan 10, 2020 9:47 am
Forum: Investing - Theory, News & General
Topic: Net Worth ??
Replies: 129
Views: 12292

Re: Net Worth ??

Evidently “net worth” is a vague term because there is substantial disagreement here as to how it should be calculated. When I calculate net worth, I don’t account for any taxes on 401k, etc On the other hand, when I calculate asset allocation, I do discount my 401k holdings by an approximate tax ra...
by rbaldini
Wed Jan 08, 2020 4:46 pm
Forum: Personal Investments
Topic: I don't want to save too much.
Replies: 96
Views: 8028

Re: I don't want to save too much.

Set a concrete savings goal, and meet it. Revise every year. I don't care if you save 5% or 50% - just set a number that allows you to retire whenever you want to.

Do whatever you want with the rest of the money. If you want to spend it, spend it. It literally doesn't matter.
by rbaldini
Tue Jan 07, 2020 11:36 am
Forum: Investing - Theory, News & General
Topic: Can we time the market on housing price?
Replies: 30
Views: 2235

Re: Can we time the market on housing price?

I think the argument is cogent, though I don't know if it's correct. The stock market is unpredictable because people can quickly buy and sell at low cost, and thereby rapidly erase any easily predictable changes. That is, if everyone "knows" (or strongly believes) that stock A is going up this week...
by rbaldini
Sun Jan 05, 2020 10:06 am
Forum: Personal Finance (Not Investing)
Topic: Advice for the Bay Area high income software engineer
Replies: 51
Views: 5492

Re: Advice for the Bay Area high income software engineer

My advice is to put money in a taxable account and invest it in some mix of stocks and bonds, as opposed to holding cash. You don’t want to miss out on the potential market returns by holding cash for 5+ years.
by rbaldini
Thu Jan 02, 2020 7:04 pm
Forum: Personal Investments
Topic: Asset Allocation - Recession?
Replies: 23
Views: 2251

Re: Asset Allocation - Recession?

I keep invested in the stock market and bond market because, in the long run, it is much superior to holding cash, and timing the market is extremely difficult. As a person in his late 20's, you should definitely be taking more risk. Perhaps you could learn to stomach 70% stock?
by rbaldini
Tue Dec 31, 2019 5:29 pm
Forum: Personal Finance (Not Investing)
Topic: To what do you owe your ability to forego spending now and save for your future?
Replies: 116
Views: 4880

Re: To what do you owe your ability to forego spending now and save for your future?

I suspect a lot of it is innate. It just comes naturally to some, hard to others. Often two siblings raised in the same household will vary a lot in their spending habits.

I don't know why I'm a pretty good saver.
by rbaldini
Tue Dec 31, 2019 5:24 pm
Forum: Investing - Theory, News & General
Topic: Most 2019 S&P 500 forecasts were too low
Replies: 58
Views: 3697

Re: Most 2019 S&P 500 forecasts were too low

If it were me, I'd always guess the average historical market return of about 10%. That means I'll usually be pretty far off, but it's probably still a better estimate, on average, than many others. When the signal:noise ratio is very high, usually the simplest methods do the best.
by rbaldini
Sun Dec 29, 2019 2:19 pm
Forum: Personal Finance (Not Investing)
Topic: Prefer spending money on investing rather than "things"? Is this weird?
Replies: 37
Views: 2698

Re: Prefer spending money on investing rather than "things"? Is this weird?

Sounds like thriftiness comes naturally to you, and is not interfering with your happiness. Just make sure it does not interfere with your spouse's and kids' happiness, and you'll be fine.
by rbaldini
Thu Dec 19, 2019 7:09 pm
Forum: Investing - Theory, News & General
Topic: You’re never going to make enough money if you have 40% of your money in bonds
Replies: 186
Views: 16988

Re: You’re never going to make enough money if you have 40% of your money in bonds

This is a good example of what I call the "salesperson's syllogism." Those who've studied logic in their math courses know that a statement does not imply its inverse. Consider: a) If a U.S. bill says "Three dollars" on it, it's a fake. b) This $20 bill does not say "Three dollars" on it. c) Theref...
by rbaldini
Wed Dec 18, 2019 2:49 pm
Forum: Personal Investments
Topic: Any Reason to Not Use Roth IRA for House Down Payment Money?
Replies: 32
Views: 3030

Re: Any Reason to Not Use Roth IRA for House Down Payment Money?

What makes this difficult is I'm saving about $500/month toward the down payment, so not using the 12,000 from ROTH may delay buying a house by 2 years in which time home prices will continue to rise. *Might* continue to rise. I'd say front-load contributions as much as possible. I'd also be wary a...
by rbaldini
Wed Dec 18, 2019 11:32 am
Forum: Personal Investments
Topic: Value of dividends?
Replies: 33
Views: 3502

Re: Value of dividends?

My impression of this dead-horse-beaten topic is that there are two levels of inquiry here. The first is basically "am I any richer after a dividend has been paid to me?" No, because the fund generally drops by the same amount. The end. This is the question you were asking, and you got the right ans...
by rbaldini
Wed Dec 18, 2019 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Is any one uncomfortable with their wealth?
Replies: 152
Views: 11876

Re: Is any one uncomfortable with their wealth?

There does sometimes seem to be something amiss about the fact that I can sit back and do nothing and nevertheless make a considerable amount of money. It almost seems to violate some life principle about how nothing comes for free. Of course the money that allows you to make money by doing nothing ...
by rbaldini
Mon Dec 16, 2019 5:16 pm
Forum: Investing - Theory, News & General
Topic: WSJ "Economists got the decade all wrong"
Replies: 40
Views: 5496

Re: WSJ "Economists got the decade all wrong"

Sometimes a "regress to the mean" type prediction is the best you can do. That doesn't mean it's particularly good, though. It's just that there's too much noise. The best you can do is a sort of historical average. If you ask a strict random walker who doesn't believe in predictable market trends s...
by rbaldini
Thu Dec 12, 2019 6:00 pm
Forum: Personal Finance (Not Investing)
Topic: Sell company stock and pay off home mortgage?
Replies: 46
Views: 2100

Re: Sell company stock and pay off home mortgage?

Irrelevant? Net worth is what ultimately matters, and should drive the decision. The point is that, to answer the question "should I pay this debt now or later?", one needs to consider the cost and benefit of each decision. The car/house will depreciate/appreciate the same amount in each case, so i...
by rbaldini
Thu Dec 12, 2019 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Sell company stock and pay off home mortgage?
Replies: 46
Views: 2100

Re: Sell company stock and pay off home mortgage?

drawpoker wrote:
Thu Dec 12, 2019 5:44 pm
A car is considered a depreciating asset, a home is not.
The extent to which a car depreciates or a house appreciates is not affected by how quickly one pays down a loan, so that is irrelevant. Prices will do what they do. The interest rate is the only thing that matters.
by rbaldini
Thu Dec 12, 2019 3:21 pm
Forum: Personal Finance (Not Investing)
Topic: Sell company stock and pay off home mortgage?
Replies: 46
Views: 2100

Re: Sell company stock and pay off home mortgage?

The general agreement here seems to be "sell company stock." What you do with that money is a separate question. You can look up a bunch of threads about paying off mortgage vs. investing in the market if you want more advice on that question. Generally it comes down to "would you prefer to take the...
by rbaldini
Thu Dec 12, 2019 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: Sell company stock and pay off home mortgage?
Replies: 46
Views: 2100

Re: Sell company stock and pay off home mortgage?

I would assume there is some kind of vesting period before selling, which is a bit more risk. A 15%+ drop is a big deal for the market, for a single stock its less rare. Sure. If it's a long vesting period, the added volatility might be too much. But usually there is some limit on how much you can ...
by rbaldini
Thu Dec 12, 2019 1:46 pm
Forum: Personal Finance (Not Investing)
Topic: Sell company stock and pay off home mortgage?
Replies: 46
Views: 2100

Re: Sell company stock and pay off home mortgage?

rj342 wrote:
Thu Dec 12, 2019 12:52 pm
def stop buying more [company stock] (while high)
Unless you're getting it at a good discount.

EDIT: just read that you are buying at 15% discount. So yes: buy as much as you can, and sell it for some broader index fund as soon as you can (without penalties, etc).
by rbaldini
Thu Dec 12, 2019 12:35 pm
Forum: Personal Finance (Not Investing)
Topic: Sell company stock and pay off home mortgage?
Replies: 46
Views: 2100

Re: Sell company stock and pay off home mortgage?

Assuming there is no substantial cost to doing so, I'd recommend selling all the company stock and putting it in an index fund - simply because I believe an index fund is a better investment (knowing nothing about your company). Personally I wouldn't use it to pay off mortgage because I believe the ...
by rbaldini
Mon Dec 09, 2019 1:11 pm
Forum: Personal Investments
Topic: Invest in bonds vs. prepay mortgage
Replies: 168
Views: 7135

Re: Invest in bonds vs. prepay mortgage

Correct, although I also made the same point that Admiral just repeated, which is that paying off the mortgage is very different from paying down the mortgage. The former reduces your cashflow requirements, thereby reducing your risk, while the latter reduces your liquidity while leaving the cashfl...
by rbaldini
Mon Dec 09, 2019 1:04 pm
Forum: Personal Investments
Topic: Invest in bonds vs. prepay mortgage
Replies: 168
Views: 7135

Re: Invest in bonds vs. prepay mortgage

If you look at your portfolio more broadly and include all your assets, including CD's, home equity, etc..., then paying off your mortgage significantly dampens the volatility of your overall portfolio. This discussion is about paying DOWN a mortgage, not paying OFF a mortgage. Yes, paying off a de...
by rbaldini
Mon Dec 09, 2019 12:16 pm
Forum: Personal Investments
Topic: Invest in bonds vs. prepay mortgage
Replies: 168
Views: 7135

Re: Invest in bonds vs. prepay mortgage

Methodological question: suppose someone wants to implement the equivalent of, say, 90/10 AA, but with mortgage payments instead of bonds. How would they do this? What does that even mean? I can easily figure out what it means to hold 90% of my investments in stocks and 10% in bonds. But there is no...
by rbaldini
Mon Dec 09, 2019 11:52 am
Forum: Personal Investments
Topic: Invest in bonds vs. prepay mortgage
Replies: 168
Views: 7135

Re: Invest in bonds vs. prepay mortgage

Is there any logical reason for us to invest in bonds vs. prepaying a mortgage? The argument seems to be that "I can get a better long-term return by reducing my bond allocation, increasing stock allocation, and paying down my mortgage more aggressively." But actually, if your goal is simply to inc...
by rbaldini
Mon Dec 09, 2019 11:25 am
Forum: Investing - Theory, News & General
Topic: So is everyone just ignoring the yield curve inversion and upcoming recession?
Replies: 56
Views: 3946

Re: So is everyone just ignoring the yield curve inversion and upcoming recession?

I love concrete predictions because there is always a concrete answer in the end: either it was right or wrong. I'm going to set an alarm for Nov 2020 (18 months after the inversion - I figure that's a reasonable amount of time) to remind me that a recession was predicted to begin by now. If it come...
by rbaldini
Thu Dec 05, 2019 3:50 pm
Forum: Personal Investments
Topic: "The Wealthy Renter" by Alex Avery.
Replies: 192
Views: 20780

Re: "The Wealthy Renter" by Alex Avery.

"Is it financially better to rent or buy a home? Is renting actually better for building wealth?" There's a lot of useless debate about this. I suggest you almost entirely ignore what people tell you, and just go use a rent vs. buy calculator and come to your own conclusions. Try to find one that ac...
by rbaldini
Thu Dec 05, 2019 11:38 am
Forum: Investing - Theory, News & General
Topic: I don’t think I am a good Boglehead
Replies: 80
Views: 5953

Re: I don’t think I am a good Boglehead

If Bogleheads just got together and agreed all day, it would be a useless forum. Stick around.
by rbaldini
Wed Dec 04, 2019 3:17 pm
Forum: Investing - Theory, News & General
Topic: My 3 buckets: 1 yr cash + 2 yr bond + stocks
Replies: 114
Views: 10237

Re: My 3 buckets: 1 yr cash + 2 yr bond + stocks

I'd recommend thinking of your whole portfolio as a single bucket. Preferably with as few funds and accounts as possible, for simplicity. Now ask yourself: under my current portfolio, will we be okay under the "perfect storm" worst-case scenario? If not, make your portfolio more conservative. For mo...
by rbaldini
Tue Dec 03, 2019 3:15 pm
Forum: Personal Finance (Not Investing)
Topic: I passed on making $3
Replies: 42
Views: 4791

Re: I passed on making $3

You missed April Fool's Day by a few months.
by rbaldini
Mon Nov 25, 2019 5:37 pm
Forum: Investing - Theory, News & General
Topic: A friend tried market prediction with machine learning
Replies: 13
Views: 2352

Re: A friend tried market prediction with machine learning

The usual result: any patterns or findings that could have been easily discovered by amateur AI analysis have certainly already been found and exploited by extremely well-funded quants. No doubt some very advanced neutral networks and other machine learning algorithms are running around the clock fo...
by rbaldini
Mon Nov 25, 2019 5:06 pm
Forum: Investing - Theory, News & General
Topic: Is there a better measurement than CAGR to use to compare two investments’ performance over time?
Replies: 7
Views: 420

Re: Is there a better measurement than CAGR to use to compare two investments’ performance over time?

CAGR is the annualized growth rate of a stock observed over a time period. If you want the monthly growth rate of a stock, that would be CAGR^(1/12). If weekly, CAGR^(1/52), and so on. Of course what this means is that if stock A's annual growth rate is higher than B's *over some given time period*,...
by rbaldini
Fri Nov 22, 2019 8:30 pm
Forum: Investing - Theory, News & General
Topic: Where does the money come from?
Replies: 54
Views: 7148

Re: Where does the money come from?

I’m pretty bad at the more abstract economic theory, but I often try to run through some logic in my head using good old desert island economics. Suppose we live on a fairly small desert island in a simple subsistence economy. We have some currency; that currency might be fixed in quantity, or we mi...