Search found 14846 matches

by HomerJ
Mon Sep 28, 2020 10:22 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 8932
Views: 709621

Re: U.S. stocks continue to soar!

tmcc wrote: Mon Sep 28, 2020 8:39 pm for not-yet-retirees, to not be 100% stocks is irresponsible.
What a silly choice of words. Irresponsible? Really? Think about that for a little while.

There are other descriptions that could have worked okay in that sentence. But irresponsible?
by HomerJ
Mon Sep 28, 2020 3:54 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

I think you miss my other point. People rarely optimize. Many go by a rule of thumb they like or which became their hard to change habit. If to stay thin you need to eat cake one day, then feel guilty and cut a meal out the next, it is normal, but not optimal. No amount of telling someone it is opt...
by HomerJ
Mon Sep 28, 2020 1:56 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

if stocks gained 15% and bonds went up 2%, I'd sell from stocks, and rebalance back to 50/50. This brings path dependence and market timing again. Imagine you start with $1M at 50/50: 1) Stocks go up 15%, bonds up 2%, you rebalance. So you end up at 575K/510K, rebalanced to 50/50 (so 542.5k/542.k)....
by HomerJ
Mon Sep 28, 2020 1:51 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

vineviz wrote: Mon Sep 28, 2020 1:28 pmThe technicians seem to be limited by a faulty framework of human behavior even as the other side seems to have a limited grasp of the statistical and economic tools.
Heh, this is fair... :)
by HomerJ
Mon Sep 28, 2020 10:34 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

if stocks gained 15% and bonds went up 2%, I'd sell from stocks, and rebalance back to 50/50. This brings path dependence and market timing again. Imagine you start with $1M at 50/50: 1) Stocks go up 15%, bonds up 2%, you rebalance. So you end up at 575K/510K, rebalanced to 50/50 (so 542.5k/542.k)....
by HomerJ
Mon Sep 28, 2020 10:29 am
Forum: Personal Consumer Issues
Topic: Talk me into buying a Tesla Model Y
Replies: 63
Views: 3795

Re: Talk me into buying a Tesla Model Y

lightheir wrote: Mon Sep 28, 2020 8:35 amI also know for a fact that a lot of Tesla-haters are deeply wedded to oil companies, particularly in their town's industry and employment, so that dominates all reasonable discussion of pros/cons of Tesla and electrics.
Oh, come on... You don't really know that for a fact... :)
by HomerJ
Mon Sep 28, 2020 10:25 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Slightly less joking, the strategy on this figure ( source ) has the lowest probability of running out of money for any number of years , assuming constant spending and modeling assumptions detailed in the source link. The color scale indicates the percentage allocation to stocks, contour lines ind...
by HomerJ
Mon Sep 28, 2020 10:16 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

What would you do if stocks drop 15% and bonds go up 2%? My system isn't complicated. Each year I get the dividends from both stocks and bonds. In your case above, I'd sell the rest of the year's living expenses from bonds, not touch stocks, and not rebalance. if stocks gained 15% and bonds went up...
by HomerJ
Mon Sep 28, 2020 9:56 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Rather, this has everything to do with market timing. If you start with a 50/50 asset allocation, stocks go up 20% and bonds go down 20%, then you end up with 60/40 asset allocation without a change in net worth. If you do not rebalance, this asset allocation can only be rationalized if the investo...
by HomerJ
Mon Sep 28, 2020 9:47 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

What HomerJ and others are referring to is basically a form of liability matching. I don't know why you do not see that. I see that. The strategy "rational" from McClung is basically liability matching. According to McClung, that strategy is one of the worst performers in terms of SWR, survival pro...
by HomerJ
Mon Sep 28, 2020 9:20 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Rather, this has everything to do with market timing. If you start with a 50/50 asset allocation, stocks go up 20% and bonds go down 20%, then you end up with 60/40 asset allocation without a change in net worth. If you do not rebalance, this asset allocation can only be rationalized if the investo...
by HomerJ
Sun Sep 27, 2020 10:38 pm
Forum: Personal Consumer Issues
Topic: Talk me into buying a Tesla Model Y
Replies: 63
Views: 3795

Re: Talk me into buying a Tesla Model Y

Talk you into it? OK, I'll give it my best shot. You will save so much money not buying petroleum products and never having to do any routine maintenance at all that you will quickly recoup the entire purchase price and so it will be like getting a cool car with built in video games and flatus soun...
by HomerJ
Sun Sep 27, 2020 7:23 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

the absolutely safest portfolio, in face of the possibility of a total collapse of entire markets, is a global portfolio of all stocks and bonds rebalanced to market capitalization weights, as suggested by William Sharpe (see The Market Portfolio ). Rebalancing to market caps would let the portfoli...
by HomerJ
Sat Sep 26, 2020 10:06 pm
Forum: Personal Consumer Issues
Topic: Talk me into buying a Tesla Model Y
Replies: 63
Views: 3795

Re: Talk me into buying a Tesla Model Y

Figured I'd check to see what Consumer Reports says about this: "The Tesla's ride is too stiff and very choppy. Bumps and ruts hit hard, making passengers feel every road imperfection, and the ride motions are short and quick, which makes the car feel nervous." This hits it on the head. That won't ...
by HomerJ
Sat Sep 26, 2020 6:48 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Suppose a 60/40 portfolio is the goal based on risk, resulting in $1.2M in FI, with a personal requirement to maintain at least $1.0M in FI. It seems like your strategy is a combination of the two approaches? If the market tanked, you would withdraw from FI to cover expenses, and might rebalance in...
by HomerJ
Sat Sep 26, 2020 10:24 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Another one. The user specifies a max drawdown of 50% and picks a 50/50 position. The portfolio drop by 40%. What should the user do? He should pick a much more conservative asset allocation, since that minimizes the probability of further drawdowns. Despite the many users insisting that they care ...
by HomerJ
Fri Sep 25, 2020 4:02 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Appreciate the math/economics lessons I agree with those that say that that buckets are basically mental accounting, because it all adds up to a certain AA at any given time, no matter what you call it. Setting that aside, I don't understand the Bellman business. It sounds like it is saying their i...
by HomerJ
Thu Sep 24, 2020 3:02 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

The thing is to have a rational plan that works for you and stick to it. (Review and change it as your age and total investment balance dictate.) Don't abandon your plan simply because the market tanks. This I agree with. My plan always included not rebalancing to stocks when stocks fell. I rebalan...
by HomerJ
Thu Sep 24, 2020 2:57 pm
Forum: Personal Investments
Topic: Flexible Premium Deferred Annuity - can they do that?
Replies: 27
Views: 830

Re: Flexible Premium Deferred Annuity - can they do that?

The 3% "guaranteed" rate is just one number. It just for growth on your account balance. It's NOT what you'll get when you annuitize. If you can cash out that money next year, then yes, you got 3% a year. If you have to annuitize, then maybe not. That's how most insurance companies trick their custo...
by HomerJ
Thu Sep 24, 2020 1:53 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

I think the problem is that most models think of only one spending level. I have two different levels. I can drop down to the second level if needed and be perfectly happy. So as long as I can cover the second level, my retirement won't "fail". Odds are good that I'll stay at higher level if I don't...
by HomerJ
Thu Sep 24, 2020 1:48 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

As I mentioned earlier, it is easy to prove that bucket or one-way rebalance approaches are always suboptimal. You only have to understand bellman's principle of optimality to see why. I'm all about preservation in retirement. Don't care about optimization, or increasing my odds of having a larger ...
by HomerJ
Thu Sep 24, 2020 1:38 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

I do not have to take money from my investment accounts to meet routine expenses. Our income from SS and pensions meet our normal expenses Then none of this pertains to you. You have zero risk no matter what you do. Congrats. I am in different situation. I understand you don't like having "never ev...
by HomerJ
Thu Sep 24, 2020 1:30 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

As I mentioned earlier, it is easy to prove that bucket or one-way rebalance approaches are always suboptimal. You only have to understand bellman's principle of optimality to see why. I'm all about preservation in retirement. Don't care about optimization, or increasing my odds of having a larger ...
by HomerJ
Thu Sep 24, 2020 11:46 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

As I mentioned earlier, it is easy to prove that bucket or one-way rebalance approaches are always suboptimal. You only have to understand bellman's principle of optimality to see why. Many of us doing it this way do not care about finding the "optimal" approach. If you've made the decision to reti...
by HomerJ
Thu Sep 24, 2020 8:10 am
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Regarding rebalancing after a crash... if you were comfortable with a 55/45 allocation before a market crash, why would the same allocation become more risky after the crash? The downside risk was obviously much greater before the crash. I was comfortable with $1 million in bonds, not 45%... If I r...
by HomerJ
Wed Sep 23, 2020 8:37 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

To me, this question so much depends on whether you are in the accumulation stage of life (working) and have human work capital that will continue to be added to your portfolio (and thus allowing you to follow your asset allocation and rebalance as needed with either stocks or bonds) or spending do...
by HomerJ
Wed Sep 23, 2020 8:33 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Regarding rebalancing after a crash... if you were comfortable with a 55/45 allocation before a market crash, why would the same allocation become more risky after the crash? The downside risk was obviously much greater before the crash. Because to get back to 55/45 after a crash, you have to conve...
by HomerJ
Wed Sep 23, 2020 8:27 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Regarding rebalancing after a crash... if you were comfortable with a 55/45 allocation before a market crash, why would the same allocation become more risky after the crash? The downside risk was obviously much greater before the crash. I was comfortable with $1 million in bonds, not 45%... If I r...
by HomerJ
Wed Sep 23, 2020 2:40 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

I don't understand this whole thread. I had always thought that we rebalanced to control risk not to influence return. Imagine being 60 years old and having portfolio of 60/40 of $1,000,000. So that’s $600,000 in equity and $400,000 in bonds. Now the following scenario occurs: 2030: Equity drops 50...
by HomerJ
Wed Sep 23, 2020 2:40 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

Once you get close to retirement, controlling risk is about dollar amounts, not percentages. You just change your AA as you age. Some people use an "age in bonds" metric to define their AA so as they age their AA goes down. But if you have more than you are going to ever spend your AA might as well...
by HomerJ
Wed Sep 23, 2020 1:48 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

I don't understand this whole thread. I had always thought that we rebalanced to control risk not to influence return. Many posters have referred to matching retirement needs. Fine. We set our asset allocation to meet that objective. We then rebalance to keep the risk of that AA constant. If you do...
by HomerJ
Wed Sep 23, 2020 1:36 pm
Forum: Investing - Theory, News & General
Topic: Never Ever Rebalance Bonds into Stocks?
Replies: 240
Views: 15366

Re: Never Ever Rebalance Bonds into Stocks?

During 2008-9, I came to the realization that in a Japan-type scenario, rebalancing a mature portfolio (I was age 49 then; I'm 60 now) from bonds into stocks might be a "Pascal's Wager". If you're wrong and stocks keeping going down for a long time, you effectively "flush" good money into bad money...
by HomerJ
Wed Sep 23, 2020 9:07 am
Forum: Investing - Theory, News & General
Topic: 'Wealth Calculator' in Millionaire Next Door
Replies: 33
Views: 3844

Re: 'Wealth Calculator' in Millionaire Next Door

What HomerJ and Jack FFR1486 and others said: it’s stupid, idiotic, and not useful. It is one reason that I haven’t read the book, and thus don’t recommend it to others. I hear that otherwise it’s a good book, and perhaps I should overlook this one piece of idiocy, but there are other good books th...
by HomerJ
Wed Sep 23, 2020 12:47 am
Forum: Investing - Theory, News & General
Topic: 'Wealth Calculator' in Millionaire Next Door
Replies: 33
Views: 3844

Re: 'Wealth Calculator' in Millionaire Next Door

Just starting reading 'The Millionaire Next Door' and the wealth calculator struck me as stupid: It is indeed very stupid. Income is a terrible metric. Expenses is what matters. Any metric of "how am I doing" should be using expenses, not income. If I have 20x expenses, I'm doing well. If I used in...
by HomerJ
Tue Sep 22, 2020 9:58 am
Forum: Personal Finance (Not Investing)
Topic: The Magic Number; Rule of 25; 4%; etc.
Replies: 46
Views: 3027

Re: The Magic Number; Rule of 25; 4%; etc.

The categories aren't the issue, it is how much you put in each category. This. 4% of the smallest 8 figure retirement portfolio ($10,000,000) is $400,000 Exactly what kind of cars are you buying that bump you up to $400,000 a year? What are your expected annual expenses if you ignore the cars and ...
by HomerJ
Mon Sep 21, 2020 3:40 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 20234
Views: 2762208

Re: U.S. stocks in free fall

flyingaway wrote: Mon Sep 21, 2020 12:37 pm What is the main reason for today's market drop?
No one knows. It's a million people trading and more wanted to sell than buy, so the sellers had to lower their prices until the buyers were willing to buy.

It's a question that cannot be answered definitely.

(Check my sig)
by HomerJ
Mon Sep 21, 2020 10:35 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 20234
Views: 2762208

Re: U.S. stocks in free fall

AerialWombat wrote: Mon Sep 21, 2020 10:21 am
bling wrote: Mon Sep 21, 2020 9:58 am after all the 10% ups and downs in a single day back in feb/mar i'm totally numb to what's happening today.
To quote Pink Floyd: “I have become comfortably numb.”
Money, it's a gas
Grab that cash with both hands and make a stash
by HomerJ
Mon Sep 21, 2020 9:21 am
Forum: Personal Consumer Issues
Topic: Anyone REGRET retiring too soon?
Replies: 67
Views: 13058

Re: Anyone REGRET retiring too soon?

I have a few friends whose families we usually play cards with and sometimes go out vacationing with. We have been talking about doing some retirement things together. I am 56 and one of them is 55. The other people are around 63~65 years old. Most of us are professors or professionals, and all men...
by HomerJ
Sun Sep 20, 2020 11:13 pm
Forum: Personal Finance (Not Investing)
Topic: Any retirees thought about cutting spending in March 2020?
Replies: 53
Views: 3747

Re: Any retirees thought about cutting spending in March 2020?

One of the strategies suggested to deal with sequence of withdrawal risks (SWR) is to cut spending when the market is in serious trouble. I think we had one of those moments in March this year for a short period of time. However, cutting spending in retirement is not a fun thing as it requires sacr...
by HomerJ
Sun Sep 20, 2020 10:54 pm
Forum: Personal Finance (Not Investing)
Topic: Any retirees thought about cutting spending in March 2020?
Replies: 53
Views: 3747

Re: Any retirees thought about cutting spending in March 2020?

We never thought of cutting our spending. So I guess no travel or eating out in your budget? We haven't traveled during the pandemic. That had nothing at all to do with cutting spending - we have no need to do that. We have plenty of money such that a down market doesn't worry us. We have eaten out...
by HomerJ
Sun Sep 20, 2020 9:23 pm
Forum: Personal Finance (Not Investing)
Topic: Any retirees thought about cutting spending in March 2020?
Replies: 53
Views: 3747

Re: Any retirees thought about cutting spending in March 2020?

We never thought of cutting our spending. So I guess no travel or eating out in your budget? We haven't traveled during the pandemic. That had nothing at all to do with cutting spending - we have no need to do that. We have plenty of money such that a down market doesn't worry us. We have eaten out...
by HomerJ
Sun Sep 20, 2020 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: Any retirees thought about cutting spending in March 2020?
Replies: 53
Views: 3747

Re: Any retirees thought about cutting spending in March 2020?

One of the strategies suggested to deal with sequence of withdrawal risks (SWR) is to cut spending when the market is in serious trouble. I think we had one of those moments in March this year for a short period of time. However, cutting spending in retirement is not a fun thing as it requires sacr...
by HomerJ
Sun Sep 20, 2020 5:01 pm
Forum: Personal Consumer Issues
Topic: Subscription to watch live sports
Replies: 6
Views: 464

Re: Subscription to watch live sports

Fubo is probably the way to go. Seems like it has everything you need...

At least it covers every network that has football.
by HomerJ
Sun Sep 20, 2020 4:59 pm
Forum: Personal Consumer Issues
Topic: Subscription to watch live sports
Replies: 6
Views: 464

Re: Subscription to watch live sports

runner3081 wrote: Sun Sep 20, 2020 4:46 pm Since I dropped cable I have so much more time to be productive on the weekends. Keeps me off the couch all Sunday :)
What kind of sick individual wants to be productive on Sunday?

Even God rested on Sunday. :)
by HomerJ
Sat Sep 19, 2020 11:50 pm
Forum: Investing - Theory, News & General
Topic: AQR still singing the same song
Replies: 114
Views: 8786

Re: AQR still singing the same song

Cliff is a huge believer in staying the course, that’s why Bogle and him agreed so much in that one interview they had together. What does change, probably frequently, is exactly how strategies are implemented. Whether they use risk-parity, or how they define their proprietary value measures. Wheth...
by HomerJ
Sat Sep 19, 2020 10:10 pm
Forum: Personal Investments
Topic: Losing Money with Index Funds
Replies: 149
Views: 13690

Re: Losing Money with Index Funds

I already read some of the links here but I haven't found any direct info on the right time when to sell or cash out. I just don't want to die at 80 or 90 and just hoarded millions of $$$ , where is that going to go when i don't have kids :confused Well, that's the problem isn't it? Same problem fo...
by HomerJ
Sat Sep 19, 2020 9:12 pm
Forum: Investing - Theory, News & General
Topic: AQR still singing the same song
Replies: 114
Views: 8786

Re: AQR still singing the same song

AQR will definitely change its stance and refine its models as they continue to research and learn more. They probably do that constantly . More variables will almost certainly pop up in the future, which will change their investment strategy. They're called Applied Quantitative Research after all....
by HomerJ
Sat Sep 19, 2020 8:53 pm
Forum: Personal Investments
Topic: Losing Money with Index Funds
Replies: 149
Views: 13690

Re: Losing Money with Index Funds

So is there NEVER a good time to cash out?? What if you are 85 yrs old and you don't have any kids or anybody to give your inheritance to? My husband and I do NOT plan on having kids and we want to enjoy our money before we croak. :shock: When is a good time to cash out? Well as I get older (say st...
by HomerJ
Sat Sep 19, 2020 8:52 pm
Forum: Personal Investments
Topic: Losing Money with Index Funds
Replies: 149
Views: 13690

Re: Losing Money with Index Funds

As long as an investor has the correct temperament, the only thing that they need to know is that the US market always recovers. Always. It’s never different this time This could be false. It always HAS recovered. Past tense. You cannot say with certainty what will happen in the future. Also, even ...
by HomerJ
Sat Sep 19, 2020 6:00 pm
Forum: Personal Consumer Issues
Topic: Coping with Megacorp rat race
Replies: 168
Views: 16047

Re: Coping with Megacorp rat race

In my experience most managers do the best they can with the resources they have and the goals that are given to them. People who hate their MegaCorp bosses: please describe a concrete example or two of their shortcomings, and how you would have handled it differently if you were in their shoes. Ge...