Search found 11229 matches

by HomerJ
Sun Aug 19, 2018 12:03 am
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 49
Views: 4507

Re: Vanguard predicts 10 year equity returns

so if all experts agree that US will do worse than Int'l over the next 10 years, https://www.morningstar.com/articles/842900/experts-forecast-longterm-stock-and-bond-returns-2.html why are there people here who say you don't need Int'l? (based on last 10 years results I guess) Here's a fun story fr...
by HomerJ
Sat Aug 18, 2018 10:59 pm
Forum: Investing - Theory, News & General
Topic: Remind me (again) how real estate isn't a GREAT investment?
Replies: 74
Views: 5447

Re: Remind me (again) how real estate isn't a GREAT investment?

In a taxable account you have to pay 15-38% taxes. It's a mediocre investment for tax consideration purposes. It's 0%-20% for long-term capital gains (money held for more than 1 year). If your income is below $38,000 (single) or $77,000 (married), it's 0%. And that's AFTER the standard deduction of...
by HomerJ
Sat Aug 18, 2018 1:16 pm
Forum: Investing - Theory, News & General
Topic: Remind me (again) how real estate isn't a GREAT investment?
Replies: 74
Views: 5447

Re: Remind me (again) how real estate isn't a GREAT investment?

But when it comes down to it, being free in several years - not several decades - is the crux of the matter. Yes, yes, WanderingDoc... you invested in the hottest real estate on the planet at exactly the right time before it exploded upwards and right when mortgage interest rates were the lowest th...
by HomerJ
Sat Aug 18, 2018 1:08 pm
Forum: Investing - Theory, News & General
Topic: Remind me (again) how real estate isn't a GREAT investment?
Replies: 74
Views: 5447

Re: Remind me (again) how real estate isn't a GREAT investment?

My life can't really spare time or effort right now, so I'd have to hire a maintenance company for a cost. If I was a tenant in my own little 1600sq ft. house that I was renting from you, I would have called your maintenance company about seventeen times so far this year, wiping out the entire amou...
by HomerJ
Fri Aug 17, 2018 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: How Best to Utilize Permanent Life Insurance Upon Retirement
Replies: 22
Views: 1524

Re: How Best to Utilize Permanent Life Insurance Upon Retirement

I purchased permanent life insurance because it is permanent, not because it is a good investment. I want something to leave behind no matter when I pass on that is tax-free to my estate. You would have passed on far more if you had bought term life for 30 years, and invested the difference in Tota...
by HomerJ
Thu Aug 16, 2018 9:24 pm
Forum: Investing - Help with Personal Investments
Topic: How Best to Utilize Permanent Life Insurance Upon Retirement
Replies: 22
Views: 1524

Re: How Best to Utilize Permanent Life Insurance Upon Retirement

I purchased permanent life insurance because it is permanent, not because it is a good investment. I want something to leave behind no matter when I pass on that is tax-free to my estate. You would have passed on far more if you had bought term life for 30 years, and invested the difference in Tota...
by HomerJ
Thu Aug 16, 2018 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: How Best to Utilize Permanent Life Insurance Upon Retirement
Replies: 22
Views: 1524

Re: How Best to Utilize Permanent Life Insurance Upon Retirement

I purchased permanent life insurance because it is permanent, not because it is a good investment. I want something to leave behind no matter when I pass on that is tax-free to my estate. You would have passed on far more if you had bought term life for 30 years, and invested the difference in Tota...
by HomerJ
Thu Aug 16, 2018 1:30 pm
Forum: Personal Consumer Issues
Topic: Retire in Florida or Alabama?
Replies: 107
Views: 7078

Re: Retire in Florida or Alabama?

Meanwhile, any time you're considering living at sea level in an area prone to flooding and storms, it's prudent to account for it in your planning. Most ocean front property is going to get hit by a storm sooner or later with corresponding high water levels. Every time I'm watching HGTV Beachfront...
by HomerJ
Thu Aug 16, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: The Case for Multifactor Funds
Replies: 17
Views: 1121

Re: The Case for Multifactor Funds

One problem is that if you look at the correlations between the 5 major factors, there are a lot of minus signs. As value factor exposure increases, for example, momentum becomes more negative, as does quality and low volatility. In the end factors can cancel each other out to zero. This has always...
by HomerJ
Wed Aug 15, 2018 3:46 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 6752
Views: 1468528

Re: U.S. stocks in freefall

Interesting fact: VIX just went from under 10.50 to over 16.50 within 4 trading sessions for only the 3rd time in history. Here are the other 2 times (and today). Both came 6 months before a massive drop. Yes, n=2 is just silly but these events clearly weren't short term bearish. If you recall the ...
by HomerJ
Wed Aug 15, 2018 10:51 am
Forum: Personal Consumer Issues
Topic: As an American, where are some great places in the world to retire?
Replies: 93
Views: 8164

Re: As an American, where are some great places in the world to retire?

Yes, cheap is to live like locals, which is substantially below the U.S. living standards. If you want to live in a Southeastern Asia country with the U.S. standards, it will be much more expensive than living in a low-cost area in the U.S. This. If money is a driving factor, there are plenty of ch...
by HomerJ
Wed Aug 15, 2018 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Take auto loan 0.9% if I can afford cash?
Replies: 107
Views: 5207

Re: Take auto loan 0.9% if I can afford cash?

I took the loan because the math said take the loan. Then when the paperwork showed up, I paid it in full. My reflexive brain couldn't handle the additional liability on the balance sheet even though my reflective brain said I was stupid to do that. My mind is not beautiful. This is me too. The mat...
by HomerJ
Tue Aug 14, 2018 10:12 pm
Forum: Personal Consumer Issues
Topic: Retire in Florida or Alabama?
Replies: 107
Views: 7078

Re: Retire in Florida or Alabama?

Florida is a great place. Fantastic beaches. My mother lives there. I have only been in northern and middle Alabama (wife's parents), so for all I know there may be some great beaches there, too. Other than that, from a retirement prospective: Florida: Higher property taxes Higher home insurance ra...
by HomerJ
Tue Aug 14, 2018 6:30 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

It's also possible we have a very painful 26 year mean reversion. I'm not saying I think that will happen, but it's another possibility. Just because something has been above the mean for a very long time does not mean it can't still mean revert. All that said, in retirement I'm thinking about wors...
by HomerJ
Tue Aug 14, 2018 6:03 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

My suspicion is that a lot of those variables were analyzed at the time, and CAPE as we know it today is what provided the best (most publishable) results at that time. It did not just fall out of the air. It is only after the fact that people are imbuing it with all sorts of fundamental properties...
by HomerJ
Tue Aug 14, 2018 5:40 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

Marcopolo, I think there is more to CAPE than historical data. It’s logical that the more expensive it is to purchase a dollar of earnings, the more likely the price is to move down rather than up. I agree with that. Completely agree that a model can be wrong. And I really agree that my understandi...
by HomerJ
Tue Aug 14, 2018 5:39 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

This is why the CAPE model appears to be broken. It's been above its mean 98% of the time for the past 26 years. And it's not like it didn't have chances to revert. We had two stock crashes in that time period, one of which was nearly a full-out financial panic. Even during that, it barely crossed ...
by HomerJ
Tue Aug 14, 2018 4:01 pm
Forum: Personal Consumer Issues
Topic: Retire in Florida or Alabama?
Replies: 107
Views: 7078

Re: Retire in Florida or Alabama?

UniversityEmployee9 wrote:
Tue Aug 14, 2018 3:58 pm
Seawalls are obviously just one form of technology, you just listed a few others that are also effective and that can also be implemented incrementally.
Well none of it is free. Expect taxes to go up.

And if the OP's parents are retiring for the beaches, they will not protected with pumps.
by HomerJ
Tue Aug 14, 2018 3:59 pm
Forum: Personal Consumer Issues
Topic: Retire in Florida or Alabama?
Replies: 107
Views: 7078

Re: Retire in Florida or Alabama?

A valid point. However, without getting into the science of climate change, or if it is man made or not, everywhere is getting hotter. This is a concern of mine because we are considering moving from the central coast of California to South Carolina or Georgia. How hot will it be in those locations...
by HomerJ
Tue Aug 14, 2018 3:56 pm
Forum: Personal Consumer Issues
Topic: Retire in Florida or Alabama?
Replies: 107
Views: 7078

Re: Retire in Florida or Alabama?

My personal opinion is that due to climate change buying beach-front or beach-adjacent property anywhere in the southern half (and possibly even the northern half) of the United States is a risk not worth taking. In 20 years many of those areas will be unrecognizable. At the bare minimum the disrup...
by HomerJ
Tue Aug 14, 2018 3:25 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

And why wouldn’t Markets spend some time below the Mean PE? It is a mean after all. This is why the CAPE model appears to be broken. It's been above its mean 98% of the time for the past 26 years. And it's not like it didn't have chances to revert. We had two stock crashes in that time period, one ...
by HomerJ
Tue Aug 14, 2018 11:12 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

The crazy thing about this thread... Did any of you actually read Larry's article? He basically says Valuations are NOT too high right now. The preceding reasons help explain why the long-term median of the CAPE 10 has drifted upward. While the CAPE 10’s mean has been 16.9 over the entire period sin...
by HomerJ
Tue Aug 14, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

But why does it make sense to believe that the 4% rule is still carved in stone? 4% rule was *never* carved in stone. It was a single study that drove *down* the general rule of thumb for retiree withdrawals. That's not entirely accurate. Yes, Bengen's study was seminal, but it was a study that has...
by HomerJ
Tue Aug 14, 2018 10:37 am
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

Perhaps CAPE is no longer a useful measure of valuations and expected 10-year returns from stocks. This time is different. The backtesting data are not relevant. Maybe that's the case. But why does it make sense to believe that the 4% rule is still carved in stone? This time is the same. The backte...
by HomerJ
Mon Aug 13, 2018 11:27 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

But I doubt that anyone here would say "CAPE is at 10! I can have 6% withdrawals for the next 30 years without ever checking up on my portfolio's performance!" Along these lines, go back to 2009 when CAPE was actually below its mean & median and see if you can find a single post/blog/article from a...
by HomerJ
Mon Aug 13, 2018 10:50 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

No, you're getting caught in a mental trap by the way you framed your question. If valuations were not currently at their second highest levels in history, I'd happily sign up for a 30 year retirement plan, 50-50 stocks/bonds and a 4% SWR. But I don't consider it excessively conservative to not wan...
by HomerJ
Mon Aug 13, 2018 10:43 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

I think it’s Bernstein or maybe Zwecher who refers to “Murphy’s Law Of Retirement”. An investor profits from a long bull market. As valuations rise, his portfolio swells. Seeing the larger than expected portfolio, the investor decides to retire. But he is retiring into a period of high valuations a...
by HomerJ
Mon Aug 13, 2018 10:26 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

No, you're getting caught in a mental trap by the way you framed your question. If valuations were not currently at their second highest levels in history, I'd happily sign up for a 30 year retirement plan, 50-50 stocks/bonds and a 4% SWR. But I don't consider it excessively conservative to not wan...
by HomerJ
Mon Aug 13, 2018 10:23 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

All we really "know" is that PE10 is presently at its second highest level in history. And whenever we've reached these types of levels before, long term returns have been abysmal. This is false. 1996 was the second highest level in history at the time, and long term returns have been 9% nominal, v...
by HomerJ
Mon Aug 13, 2018 9:30 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

For those who don't believe valuation matters, I suppose this excellent article can just be discarded. But for those who are a little bit more philosophical about how recency bias from this 10 year bull market might cloud ones thinking, the chart comparing SWR vs CAEP, is outstanding. CAEP = about ...
by HomerJ
Mon Aug 13, 2018 5:07 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3644

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

Strongly recommend William Bernstein’s short e-book on lifecycle investing. He addresses this issue at the very end. If the markets have been generous, then it’s prudent for the investor getting close to retirement to take some definitive action. Dave I suggest an investor getting close to retireme...
by HomerJ
Mon Aug 13, 2018 3:26 pm
Forum: Personal Consumer Issues
Topic: Can I buy a Tesla?
Replies: 103
Views: 7173

Re: Can I buy a Tesla?

Congrats. Where are you charging it? Trying to understand the background behind the question. Is it that he cannot afford power at home to charge the car or that he lives in a remote part of the country (and be a doctor with no patients) where he needs to drive tens of miles without a charging netw...
by HomerJ
Sun Aug 12, 2018 10:52 pm
Forum: Personal Consumer Issues
Topic: Can I buy a Tesla?
Replies: 103
Views: 7173

Re: Can I buy a Tesla?

Cramerica wrote:
Sat Aug 11, 2018 7:00 pm
Just wanted to update here since I got so many useful replies.

I bought the fully loaded model 3 :sharebeer
Congrats. Where are you charging it?
by HomerJ
Sun Aug 12, 2018 10:51 pm
Forum: Personal Consumer Issues
Topic: Can I buy a Tesla?
Replies: 103
Views: 7173

Re: Can I buy a Tesla?

OP, yes, you can buy a Tesla if you want. Nothing much else to add. As a much more common man, I find this thread ridiculously funny.... no... absolutely not... get FI first... only on Bogleheads is someone about to make hundreds of thousands of dollars a year told they need to get their financial ...
by HomerJ
Sun Aug 12, 2018 5:07 pm
Forum: Personal Finance (Not Investing)
Topic: how much car can we afford?
Replies: 128
Views: 5627

Re: how much car can we afford?

randomguy wrote:
Sun Aug 12, 2018 3:56 pm
Bah it is easy to blow through 50 billion or so. Between buying the yankees, giants
Ugh... why would one spend money on NY teams??

Oh wait, I get it. Buy them, then disband them! Brilliant!
by HomerJ
Sun Aug 12, 2018 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: how much car can we afford?
Replies: 128
Views: 5627

Re: how much car can we afford?

You almost never should buy all the way up to what you can afford. You should get that phrase out of your head. Salesmen LOVE to use that phrase, to get you starting at the top when making a purchase. Start at the bottom of what you need, and maybe ease up a bit as you get older and richer. OP, what...
by HomerJ
Sat Aug 11, 2018 1:42 pm
Forum: Investing - Theory, News & General
Topic: Jamie Dimon: Higher rates are coming
Replies: 42
Views: 6565

Re: Jamie Dimon: Higher rates are coming

Stormbringer wrote:
Sat Aug 11, 2018 6:12 am
Kevin M wrote:
Fri Aug 10, 2018 8:12 pm
If you're really worried about inflation, consider TIPS and I Bonds.
Aren't I-Bonds currently returning negative real returns when you factor in taxes?
You can choose to tax-defer I-Bonds
by HomerJ
Fri Aug 10, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

As the whole thing shifts left due to valuations, the extra alpha we may get in stocks may not be worth it any longer. Of course - the dispersion of returns even thought shifted left are still too great to truly now. If it were as small as 2-4%, I could likely run some numbers to determine my perso...
by HomerJ
Fri Aug 10, 2018 10:15 am
Forum: Investing - Theory, News & General
Topic: Invest in Tesla?
Replies: 350
Views: 22776

Re: Invest in Tesla?

If one is using options, and one is bearish on Tesla, isn't the right thing to do to buy Puts? Preferrably Out of The Money Puts? Surely that’s the case if one is convinced that Tesla is going to $0 shortly. Market Timer says he is writing in of the money calls. I am not sure why? In principle that...
by HomerJ
Fri Aug 10, 2018 10:05 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

I guess the worst thing you can say to another poster on this forum is to accuse them of market timing. So we have to come up with euphemisms like aggressive rebalancing or opportunistic reallocation. Most all of us have done some form of market timing, though probably in its very mildest forms. Pr...
by HomerJ
Fri Aug 10, 2018 9:00 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

Thus, there is a big difference if expected returns are 7% than 5%. The difference is that at 7% investors have a choice they can make. They can increase their withdrawal rate (that's what the assets are for, to spend and enjoy life, and spending now is more valuable than spending later, so want to...
by HomerJ
Thu Aug 09, 2018 11:59 pm
Forum: Personal Finance (Not Investing)
Topic: Biggest Threats to Financial Well-Being
Replies: 99
Views: 8942

Re: Biggest Threats to Financial Well-Being

deltaneutral83 wrote:
Thu Aug 09, 2018 10:40 am
College choice- Spending $150k on a degree that can be had for $40k will teach you compounding interest in reverse real quick.
“You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.”

-Good Will Hunting.

:)
by HomerJ
Thu Aug 09, 2018 11:33 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

Need to incorporate current valuations and expected returns into the estimates of how much risk to take. Okay, so this is what you and Larry are talking about. How does this work in practice? How different is my retirement plan if expected returns are 5% (really -1% - 11%) or 6% (0%-12%) or 7% (1%-...
by HomerJ
Thu Aug 09, 2018 10:44 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

I have basically said that for 24 years. And it should have been perfectly clear from my posts as it was all about the NEED to take risk, not valuations. How Homer or anyone else could draw any other conclusion is beyond my ken. As it was very clear in my writing---have not gotten one question abou...
by HomerJ
Thu Aug 09, 2018 5:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

This is a bit of a runaway train and I can see this spiraling. When you actually sit down to decide your investment plan, you're going to need to come up with an asset allocation. How do you decide which asset allocation works best for you? I don't think you actually make a decision by saying to yo...
by HomerJ
Thu Aug 09, 2018 4:46 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

First, market timing is based on belief that market is either under or overvalued. And you can add value by changing your AA. My suggestsion have literally nothing to do with market timing. This is EXACTLY what you are doing. You are stating that the U.S. has higher valuations and less expected ret...
by HomerJ
Thu Aug 09, 2018 1:31 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

No I don’t believe at all that Larry is calling for market timing. He is talking about long term committed changes to the asset allocation. He appreciates that most US individual investors substantially underweight international relative to world market cap weighting. Since a good starting point fo...
by HomerJ
Thu Aug 09, 2018 10:45 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

If you take a look at Larry's summary, he's basically saying that if you've anticipated a relatively high return (historical?) on your investments in an attempt to figure out how much to save, you might perhaps want to dial back those expectations and save more, or cut back on expenses. He also say...
by HomerJ
Thu Aug 09, 2018 10:29 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 207
Views: 11262

Re: Larry Swedroe: Valuations Too High?

james22 wrote:
Thu Aug 09, 2018 9:58 am
Are you arguing beta is persistent, pervasive, robust, and has a logical, risk-based and/or behavioral-based explanation?
I think billions of hours of human work is turned into productivity and profit every day. It's not a closed system.
by HomerJ
Wed Aug 08, 2018 11:39 pm
Forum: Investing - Theory, News & General
Topic: If it were March, 2000, would you still allocate 50% to Stocks?
Replies: 94
Views: 4283

Re: If it were March, 2000, would you still allocate 50% to Stocks?

Despite assurances that markets always recover sooner-or-later, following these crashes they had to wait 13, 14, 19 and 20 years just to break-even with their previous purchasing power levels. (Note: Assumes 100% of dividends were immediately reinvested). This is false. Where did you get this incor...