Search found 901 matches

by rbaldini
Tue Oct 30, 2018 10:51 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 8673
Views: 1683904

Re: U.S. stocks in freefall

Why does this thread still exist? Has it not run its course?
by rbaldini
Fri Oct 26, 2018 10:09 am
Forum: Investing - Theory, News & General
Topic: Market irrationality
Replies: 35
Views: 4093

Re: Market irrationality

Basic but I think important question: how does one distinguish a rational market from an irrational one, except perhaps post hoc? I ask because I suspect the answer is “one cannot.” But it seems to me that the question of market rationality is completely irrelevant. A waste of time for the practical...
by rbaldini
Fri Oct 26, 2018 9:53 am
Forum: Investing - Help with Personal Investments
Topic: Reaction to Market
Replies: 71
Views: 7716

Re: Reaction to Market

As others have pointed out, you lost a lot because you have a lot. That’s a good thing.

But if losing $100k in a day really bothers you, I have a simple solution: donate 90% of your worth to some charitable cause. Then you’d have only lost $10k!
by rbaldini
Sun Oct 14, 2018 3:48 pm
Forum: Investing - Theory, News & General
Topic: Is EMH a tautology?
Replies: 108
Views: 4953

Re: Is EMH a tautology?

Lauretta wrote:
Sat Oct 13, 2018 4:12 pm
Robert Shiller, who showed that EMH is nonsense...
How can one show that EMH is nonsense except by showing that its implications are false in the real world? If this is what he did, then it shows that the hypothesis is testable: the hypothesis makes false implications.
by rbaldini
Mon Sep 24, 2018 8:35 am
Forum: Investing - Help with Personal Investments
Topic: Emotional Investor - I'm a mess and need help!
Replies: 83
Views: 6477

Re: Emotional Investor - I'm a mess and need help!

OP, I think it’s important to ask how you will deal with future down times. Suppose, like a good little Boglehead, you totally clean up and put all your money into some 3 fund portfolio. You are proud of yourself for doing this, and you are able to stay passive. But then, the market dips. You tell y...
by rbaldini
Mon Jul 02, 2018 12:58 pm
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9579

Re: "homemade dividends" from Total Stock Market fund

Scenario 1: Stock fund pays dividends; you use them for living expenses. You own $v of stock fund. The fund pays a dividend of x% of stock's value. You do not reinvest. You own the same number of shares, but the stock price drops by an expected x% due to the dividend payout. So, you now have $v*(1-...
by rbaldini
Sat Jun 23, 2018 4:45 pm
Forum: Investing - Help with Personal Investments
Topic: Is this all investing is?
Replies: 38
Views: 4047

Re: Is this all investing is?

What do you do after you are 40 and you have the car? Do you have any more longterm goals or aspirations? It sort of seems like you're giving up on life now to achieve a rather (in my view) short-sighted goal only halfway through life. Of course, you shouldn't care what *I* think about your goal - I...
by rbaldini
Sun Jun 10, 2018 9:51 am
Forum: Investing - Theory, News & General
Topic: John C. Bogle explains his interpretation of RTM (reversion to mean)
Replies: 11
Views: 2541

Re: John C. Bogle explains his interpretation of RTM (reversion to mean)

My understanding of regression to the mean is that outlier data points can be extreme due to random measurement error, and upon remeasurement will likely fall closer to the true mean. I don't see how that could explain trends unless the measurement process gradually improves. Mean reversion I'm sti...
by rbaldini
Sun Jun 10, 2018 9:46 am
Forum: Investing - Theory, News & General
Topic: John C. Bogle explains his interpretation of RTM (reversion to mean)
Replies: 11
Views: 2541

Re: John C. Bogle explains his interpretation of RTM (reversion to mean)

In other fields, "reversion to the mean" (RTM) is just an artifact of the result that there is noise or measurement error in populations. There is no "force" pushing back toward the mean; it's a statistical effect. https://en.wikipedia.org/wiki/Regression_toward_the_mean Give a bunch of equally inte...
by rbaldini
Sun Jun 03, 2018 9:54 pm
Forum: Investing - Help with Personal Investments
Topic: Should I put some money aside in money market for market correction
Replies: 94
Views: 7791

Re: Should I put some money aside in money market for market correction

Anyway, January saw a 10% correction that was easy to anticipate How about this: put up a post next time you easily foresee an upcoming dip in the market. Tell us exactly when to sell, and then when to buy again. If it's so easy, you should come out ahead of the market, no problem. Just went and lo...
by rbaldini
Sun Jun 03, 2018 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Can a Retired 60 yo MD, MBA Start a Law Career?
Replies: 276
Views: 15470

Re: Can a Retired 60 yo MD, MBA Start a Law Career?

I have not seen any postings asking why you want to go into law. Is there a specific aspect of law you want to work in? We're still waiting on an answer. Why do you want to become a law professor? Also, how long have you had this idea? And when do you plan to retire? What does your spouse think abo...
by rbaldini
Sun Jun 03, 2018 9:25 pm
Forum: Personal Finance (Not Investing)
Topic: Can a Retired 60 yo MD, MBA Start a Law Career?
Replies: 276
Views: 15470

Re: Can a Retired 60 yo MD, MBA Start a Law Career?

I'm fairly sure that a law degree is necessary to become a law professor. :D I only mentioned that my MBA and MD were from top-tier schools to support my expectation that I might be accepted to a top-tier law school. That is important because the overwhelming majority of law professors are selected...
by rbaldini
Sun Jun 03, 2018 9:06 pm
Forum: Personal Finance (Not Investing)
Topic: Can a Retired 60 yo MD, MBA Start a Law Career?
Replies: 276
Views: 15470

Re: Can a Retired 60 yo MD, MBA Start a Law Career?

This all sounds pretty crazy. Obviously the idea makes no sense financially, so I won't even mention it. Presumably that should factor in, though, since you are not the only person affected by your financial decisions (you used the term "our".) If the goal is to learn, then guess what: there is a th...
by rbaldini
Sun Jun 03, 2018 8:41 pm
Forum: Investing - Help with Personal Investments
Topic: Should I put some money aside in money market for market correction
Replies: 94
Views: 7791

Re: Should I put some money aside in money market for market correction

md&pharmacist wrote:
Sun Jun 03, 2018 8:37 pm
Anyway, January saw a 10% correction that was easy to anticipate
How about this: put up a post next time you easily foresee an upcoming dip in the market. Tell us exactly when to sell, and then when to buy again. If it's so easy, you should come out ahead of the market, no problem.
by rbaldini
Sun Jun 03, 2018 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Helping son buy a house
Replies: 33
Views: 3279

Re: Helping son buy a house

Agreed with many others. Do not get involved in a complicated financial relationship. Gift some down payment money and let him get a loan like everyone else.

Or do nothing and let him find his own way.
by rbaldini
Sun Jun 03, 2018 8:20 pm
Forum: Investing - Theory, News & General
Topic: positive corrections?
Replies: 5
Views: 603

Re: positive corrections?

There are no "corrections" one way or another. The only way the stock market (or any free market) can be "incorrect" is if the price a buyer is willing to pay and the price a seller is willing to accept are somehow miscommunicated. A free market doesn't require intelligent, rational buyers and sell...
by rbaldini
Sun Jun 03, 2018 8:12 pm
Forum: Investing - Help with Personal Investments
Topic: What are you doing with cash?
Replies: 82
Views: 11164

Re: What are you doing with cash?

If you are young and looking to be aggressive, why not use that cash to buy more stock or bond index funds? These should provide greater long term return than a cash-like asset, with more risk. In other words, why hold onto much cash at all, beyond your immediate needs? Open up an account and invest.
by rbaldini
Sun Jun 03, 2018 8:09 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1862

Re: Bonds in Roth IRA

You are not understanding. If I hold bonds in 401k, I expect 0. If I hold stocks, the expected return is higher, my RMDs end up being twice as big, and my tax rate may be 22%. You want gains to occur in Roth tax free or taxable at 15% instead of 401k at your marginal rate. Ok, I think I follow now....
by rbaldini
Sun Jun 03, 2018 7:38 pm
Forum: Investing - Theory, News & General
Topic: positive corrections?
Replies: 5
Views: 603

positive corrections?

It seems that I only see the word "correction" used to mean "a dip in stock prices such that prices now better reflect their 'true' value," or something like that. (1) Why don't we ever talk about positive corrections? A market can just as easily be undervalued, and then experience a quick surge in ...
by rbaldini
Sun Jun 03, 2018 7:32 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1862

Re: Bonds in Roth IRA

I think you are assuming a 25% tax rate. My point is that many of us are hoping for close to 0% on the 401k. Holding stocks in Roth can help you achieve that. Holding stocks in 401k more than necessary can cause you to increase the tax rate on your 401k. I have no doubt that if the tax rate is cons...
by rbaldini
Sun Jun 03, 2018 5:56 pm
Forum: Investing - Help with Personal Investments
Topic: Cash windfall investing
Replies: 23
Views: 2106

Re: Cash windfall investing

Why all the agreement about paying off the car loan? It is the lowest interest rate on here, no? If anything, putting it toward the mortgage would be more profitable, right? My opinion: if you don't have trouble making payments and you're okay to survive through a bad year, then just invest it as y...
by rbaldini
Sun Jun 03, 2018 5:53 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1862

Re: Bonds in Roth IRA

Consider this example. You have $50k in a 401k, $50k in a Roth. You want a 80/20 stock/bond allocation. To make things easy, let's assume you're going to withdraw all the money next year, and you believe (or know) that you'll have a 25% tax rate. You predict a 9% growth to stocks and 4% growth to bo...
by rbaldini
Sun Jun 03, 2018 5:24 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1862

Re: Bonds in Roth IRA

Ok, but thats kind of like saying Roth and Traditional are same except for their differences. Allocating between them is all about taking advantage of each one to get the optimal allocation overall. It's not. If you account properly, there is no optimization to be done, with regard to "where to put...
by rbaldini
Sun Jun 03, 2018 5:09 pm
Forum: Investing - Help with Personal Investments
Topic: What are you doing with cash?
Replies: 82
Views: 11164

Re: What are you doing with cash?

About $10k in checking for monthly things and an occasional large expense. Mostly paying off credit card expenses. Otherwise it's all invested. Can sell stocks / bonds if I ever need more. That's where I am at currently after just putting a large pile of cash in the vanguard prime money market. I a...
by rbaldini
Sun Jun 03, 2018 5:02 pm
Forum: Investing - Help with Personal Investments
Topic: What are you doing with cash?
Replies: 82
Views: 11164

Re: What are you doing with cash?

About $10k in checking for monthly things and an occasional large expense. Mostly paying off credit card expenses. Otherwise it's all invested. Can sell stocks / bonds if I ever need more.
by rbaldini
Sun Jun 03, 2018 4:54 pm
Forum: Investing - Help with Personal Investments
Topic: Should I put some money aside in money market for market correction
Replies: 94
Views: 7791

Re: Should I put some money aside in money market for market correction

If you feel that your portfolio is taking too much risk, adjust by increasing your allocation toward bonds, away from stocks. But no, I would not suggest selling money and putting it on the sidelines just because you "feel" something is coming.
by rbaldini
Sun Jun 03, 2018 12:16 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1862

Re: Bonds in Roth IRA

Disagree. It only "doesn't matter" if you plan to be in the same tax bracket now and in retirement. If you end up with most of your funds in 401k because you invested conservative in Roth, that could make it much harder to optimize your taxes in retirement. We really need more info from OP about th...
by rbaldini
Sun Jun 03, 2018 12:14 pm
Forum: Investing - Theory, News & General
Topic: Bonds in 401k or Roth? Doesn't matter
Replies: 11
Views: 976

Re: Bonds in 401k or Roth? Doesn't matter

No, by allocation across accounts (what our wiki calls a spread asset allocation ), I mean minimizing the number of holdings. For example, my portfolio contains 4 ETFs spread across 3 accounts, resulting into 6 holdings as 2 ETFs are spread across two accounts. I don't tax adjust. A mirrored asset ...
by rbaldini
Sun Jun 03, 2018 11:30 am
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

2) You win with (2) if and only if you never need to use the money for 40%/3% = 13 years. Is the person that lucky? False. You win if the average return to stocks is greater than the average return to a savings account (or something like it) over the length of the investment. Over 30 years, that is...
by rbaldini
Sun Jun 03, 2018 11:25 am
Forum: Investing - Theory, News & General
Topic: Bonds in 401k or Roth? Doesn't matter
Replies: 11
Views: 976

Re: Bonds in 401k or Roth? Doesn't matter

Why not mirror the allocation in all accounts, instead? Or simply allocate across accounts but ignore tax adjustments, because it won't make a foreseeable significant difference? If by "allocating across all accounts" you mean "apply your asset allocation equally to all funds (401k, roth, etc)", th...
by rbaldini
Sun Jun 03, 2018 10:56 am
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

possibly taking on additional expenses in the form of creating a taxable event at an inopportune time or selling an asset while it is down in value and permanently losing the opportunity to recoup that money. Faulty logic. The money has already been lost during a downturn. Your selling it for cash ...
by rbaldini
Sun Jun 03, 2018 10:36 am
Forum: Investing - Theory, News & General
Topic: Bonds in 401k or Roth? Doesn't matter
Replies: 11
Views: 976

Re: Bonds in 401k or Roth? Doesn't matter

Kevin M wrote:
Sun Jun 03, 2018 10:32 am
Yes, this is covered in this Wiki article: https://www.bogleheads.org/wiki/Tax-adj ... allocation.

Kevin
Ah, thanks:
"Once you adjust for the after-tax value, it does not matter which assets you put in a traditional IRA or 401(k) and which you put in a Roth."
I guess we're done here.
by rbaldini
Sun Jun 03, 2018 10:34 am
Forum: Investing - Theory, News & General
Topic: Bonds in 401k or Roth? Doesn't matter
Replies: 11
Views: 976

Re: Bonds in 401k or Roth? Doesn't matter

Of course, you don't actually know what your retirement income tax is going to be - but it won't be 0 . We don't know this! In a private discussion with former forum member Cut-Throat (author of the famous Delay Social Security to age 70 and Spend more money at 62 post) he wrote: I have heard the c...
by rbaldini
Sun Jun 03, 2018 10:32 am
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

rbaldini, <<even if those stocks had been earning well more than the savings account for x years perior, and y years after.>> 1) Unless you can see the future, you would not know what is x. 2) Or, the stock had been losing money for X years before you need to sell. Please note that stock is doing w...
by rbaldini
Sun Jun 03, 2018 10:20 am
Forum: Investing - Help with Personal Investments
Topic: Cash windfall investing
Replies: 23
Views: 2106

Re: Cash windfall investing

Why all the agreement about paying off the car loan? It is the lowest interest rate on here, no? If anything, putting it toward the mortgage would be more profitable, right? My opinion: if you don't have trouble making payments and you're okay to survive through a bad year, then just invest it as yo...
by rbaldini
Sun Jun 03, 2018 10:12 am
Forum: Investing - Theory, News & General
Topic: Bonds in 401k or Roth? Doesn't matter
Replies: 11
Views: 976

Bonds in 401k or Roth? Doesn't matter

I think I have seen discussion about this point in the past, but wanted to clarify for myself. There's also a currently active post about this topic, but in a real life situation. Asset allocation is frequently discussed here; there is a Boglehead wiki post about tax-efficient versions of it. It is ...
by rbaldini
Sun Jun 03, 2018 9:55 am
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

Long-term return of the stock can only be achieved if someone can held the stock for the long-term. If someone needs to sell the stock and lock in the loss due to recession, he wouldn't get the long-term return. The likelihood of someone needs to sell stock increases when the person has no emergenc...
by rbaldini
Sun Jun 03, 2018 9:47 am
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1862

Re: Bonds in Roth IRA

Go with choice A. If you do the accounting right*, then there is actually no difference between the two, before accounting for expense ratio. So it makes sense to choose the route that minimizes expenses, which is choice A. *That is, account for the fact that you don't own some proportion of your 40...
by rbaldini
Sat Jun 02, 2018 10:30 pm
Forum: Personal Finance (Not Investing)
Topic: Career Move: Please convince me why I should not work in tech
Replies: 74
Views: 8971

Re: Career Move: Please convince me why I should not work in tech

You won't get any discouragement from me: I did the same thing a few years ago, left a postdoc early for a data science job. Haven't looked back. Machine Learning and Deep Learning and AI might be a bit buzzy at the moment (as in, buzz words), but the technology is not a fad, as I'm sure you know. I...
by rbaldini
Sat Jun 02, 2018 10:07 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

1) 25K represents how many months of the emergency fund? That's my business. As I said, I adjudged it to be good enough for me. No debt, no kids, dual income household, modest expenses. 3) After you sell 15K of the bond, you would sell 10K of stock and lose 10K in the process. This is fallacious th...
by rbaldini
Sat Jun 02, 2018 9:22 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

Since we seem to be going in circles, I'll summarize my position. In my current circumstances, I figure that I need to be able to access about $25k for emergencies, recessions, etc. That is, if I had an EF, it would contain about $25k. I have a taxable account that contains about $150k. With 90% sto...
by rbaldini
Sat Jun 02, 2018 8:29 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

Over a lifetime of working/savings, say 40 years, how much do you think the difference between keeping 6 months expenses in a stock fund vs. a saving/MM account would amount to for the average Boglehead? I did some math earlier. Depends on the details, of course, but over a 30 year period, the diff...
by rbaldini
Sat Jun 02, 2018 6:55 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

Over a lifetime of working/savings, say 40 years, how much do you think the difference between keeping 6 months expenses in a stock fund vs. a saving/MM account would amount to for the average Boglehead? I did some math earlier. Depends on the details, of course, but over a 30 year period, the diff...
by rbaldini
Fri Jun 01, 2018 5:34 pm
Forum: Investing - Help with Personal Investments
Topic: Roast this profile
Replies: 17
Views: 2497

Re: Roast this profile

Plan Details There are no brokerage fees and pays any administrative fees 10% discount off the market value. You can elect to have 1-15% of your base pay withheld each pay period to use toward the purchase of Cummins stock. Once your enrollment is processed, payroll deductions in the amount specifi...
by rbaldini
Fri Jun 01, 2018 5:05 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

As per your current opinion. Which may not be shared by others. And, you may change your mind in the future when your portfolio is much larger. I showed my work, did the math. I thought it was reasonable. Given that I am 30+ years from retirement, it is relevant to me. I don't see anyone doing a ca...
by rbaldini
Fri Jun 01, 2018 4:54 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

Will you feel the same if you are a few years from FI? That was my question. If I am going to withdraw all that money in a just a few years, then of course the effect will be much smaller than what I calculated. If someone in that position (like yourself, presumably) doesn't see the value, that's f...
by rbaldini
Fri Jun 01, 2018 4:46 pm
Forum: Investing - Theory, News & General
Topic: Really bad days (RBDs) and porfolio performance
Replies: 67
Views: 10419

Re: Really bad days (RBDs) and porfolio performance

But is portfolio risk proportional to percentage in equities? For instance, did a portfolio of 70% equities in October 2007 have the same risk as a portfolio of 70% equities on March 15, 2009? I believe the answer to that is no, the two portfolios did not have the same risk. I don't mind if others ...
by rbaldini
Fri Jun 01, 2018 4:39 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

In my context, "large enough" means that the person can FI in a few years. For me, "large enough" means that it is no longer necessary to have a separate bucket of cash to ensure that you can access some necessary amount at any time. If you have $200k saved in a taxable account, you almost certainl...
by rbaldini
Fri Jun 01, 2018 3:45 pm
Forum: Investing - Help with Personal Investments
Topic: Why have a savings account at all?
Replies: 153
Views: 12115

Re: Why have a savings account at all?

rbaldini, It is a general response to your comment too. When someone's portfolio is big enough, he/she will not be 30 years from retirement/FI. KlangFool In my estimation, my taxable account is large enough to render a savings account unnecessary for me. I am 31 years old. It depends on the person.
by rbaldini
Fri Jun 01, 2018 3:42 pm
Forum: Investing - Theory, News & General
Topic: Really bad days (RBDs) and porfolio performance
Replies: 67
Views: 10419

Re: Really bad days (RBDs) and porfolio performance

Even if we assume random, we need to put in some upward long term trend. Correct. What I wrote assumes that already. If we could magically buy at "local minimums" that would beat buying "on average" Buying after an RBD is not equivalent to buying at a local minimum (feel free to replace "buying" wi...