Search found 445 matches

by Ari
Thu Nov 16, 2017 4:04 am
Forum: Investing - Theory, News & General
Topic: Fixed percentage withdrawal of maximum portfolio value?
Replies: 14
Views: 1159

Fixed percentage withdrawal of maximum portfolio value?

I enjoy thinking about withdrawal methods. It's fun. I'm some way away from starting to withdraw, but when I do, I'm hoping I'll find a method that will allow my portfolio to grow over time even as I withdraw. I will probably have a long retirement and want my withdrawals to increase over time, maki...
by Ari
Tue Nov 14, 2017 2:07 am
Forum: Investing - Theory, News & General
Topic: "A Case Against Over Weighting International Equity"
Replies: 11
Views: 1436

Re: "A Case Against Over Weighting International Equity"

When valuations are discussed, it seems people are always talking about them returning or not returning to the mean/historical average. This might be relevant if you're talking about a single market over time, but I find it less important when comparing different markets. All else being equal, a mar...
by Ari
Tue Nov 14, 2017 1:31 am
Forum: Investing - Theory, News & General
Topic: Buffett 90/10 Portfolio vs Target Retirement
Replies: 29
Views: 3240

Re: Buffett 90/10 Portfolio vs Target Retirement

Total World seems like a good fund to hold for the OP. It adheres to Boglehead principles better than Bogle and Buffet do, and it's still massively overweighted in the US (USA is less than a quarter of the world economy, but is 50% of publicly traded companies). US-only funds and non-US funds diverg...
by Ari
Thu Nov 09, 2017 7:20 am
Forum: Investing - Theory, News & General
Topic: "The small-cap effect really has failed to materialize"
Replies: 37
Views: 5097

Re: "The small-cap effect really has failed to materialize"

In the case of small-caps, a big problem is that basically any time period that includes 1975-1983 supports the effect... and any time period that omits it, doesn't. I learned that from Siegel's "Stocks for the Long Run," which has an interesting chart: http://i62.tinypic.com/bhj14n.png Eyeballing ...
by Ari
Wed Oct 25, 2017 2:30 am
Forum: Investing - Theory, News & General
Topic: Theoretical — Lump Sum Investing Your Lifetime Earnings
Replies: 11
Views: 1401

Re: Theoretical — Lump Sum Investing Your Lifetime Earnings

Of course! Giving them a lot more time to compound should mean I get a lot more money in the end. I'd also have a lot more security, seeing as I'd probably be more or less financially independent.
by Ari
Fri Oct 20, 2017 5:25 am
Forum: Investing - Theory, News & General
Topic: "Investment Lessons From The 21st Century"
Replies: 16
Views: 2111

Re: "Investing: What We've Learned This Century"

An arguable point. Perhaps it would be more useful; but if not lump sum, what algorithm would you use to increase utility for the “average investor” while making comparisons possible? One dollar (or a hundred euros, or whatever) invested at the end of each month during the period examined, for exam...
by Ari
Fri Oct 20, 2017 2:48 am
Forum: Investing - Theory, News & General
Topic: "Investment Lessons From The 21st Century"
Replies: 16
Views: 2111

Re: "Investing: What We've Learned This Century"

However, that’s not what the author has concluded (see below). I suggest a re-read. Conclusions from Allan Roth • Understand that stocks are risky and invest accordingly. • Understand how long your long run is. • Don't invest based on the recent past. • High-quality bonds act as a shock absorber an...
by Ari
Thu Oct 19, 2017 3:26 am
Forum: Investing - Theory, News & General
Topic: "Investment Lessons From The 21st Century"
Replies: 16
Views: 2111

Re: "Investing: What We've Learned This Century"

Start measuring from the peak of one of the biggest runups of the last 100 years and just before the crash. Not very suprising that stocks don't do well. Fortunately, most investors will not suddenly invest all of their savings in a lump sum at one specific point (and even if they do, chances are sl...
by Ari
Wed Oct 18, 2017 7:43 am
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 5044

Re: The overselling of international diversification

I imagine the "efficient market theory" that BH depends on doesn't apply internationally, especially to developing countries where transparency, rule of law, and minimal corruption is an issue. Why is that? Do other investors not know about these issues, or do they systematically misprice them in a...
by Ari
Mon Oct 09, 2017 6:11 am
Forum: Investing - Theory, News & General
Topic: Has your "risk tolerance" been tested?
Replies: 105
Views: 6822

Re: Has your "risk tolerance" been tested?

I am at 100% stocks and I have not been tested. There are a few reasons why I am still comfortable with this: 1: I know myself. This is of course hardly bulletproof. Lots of people are surprised at their own reactions in situations they have not been in before, so it's possible I would panic sell. B...
by Ari
Fri Sep 29, 2017 6:52 am
Forum: Investing - Theory, News & General
Topic: Why do you LBYM? Why do you save and invest?
Replies: 204
Views: 15450

Re: Why do you LBYM? Why do you save and invest?

I'm still a bit angry that nobody told me that it's possible to retire early until I was almost 30. It's not something I'd heard about, and I didn't know you could get continuous income from stocks. I remember thinking about it when I was younger, but I assumed I'd have to be able to live on the int...
by Ari
Mon Sep 25, 2017 5:49 am
Forum: Investing - Theory, News & General
Topic: How an asset with a NEGATIVE return can INCREASE your portfolio's return
Replies: 31
Views: 3273

Re: How an asset with a NEGATIVE return can INCREASE your portfolio's return

Thanks to Nisiprius' graphs, it seems clear what's going on: Bitcoin has a large dip followed by a large recovery. Continuously rebalancing during this time amounts to dollar-cost averaging in a recession. You get to buy more and more as the market is tanking, then get an extra boost as the market r...
by Ari
Fri Sep 22, 2017 8:25 am
Forum: Investing - Theory, News & General
Topic: Which is better a Cryptocurrency or Gold?
Replies: 99
Views: 6583

Re: Which is better a Cryptocurrency or Gold?

Interesting question. I own neither, but for the purposes you mention (and assuming I can't do some of both), I think I'd still choose gold, perhaps stored in a country like New Zealand. Cryptocurrencies could conceivably fill this role in the future, but at the moment it's a bit too unsure as to ho...
by Ari
Fri Sep 22, 2017 1:00 am
Forum: Investing - Theory, News & General
Topic: No More Saving???
Replies: 114
Views: 10959

Re: No More Saving???

I could stop saving now and likely have more than enough to retire at 65, and I'd probably have the same income in retirement as in employment. But since I plan to retire well before that time, I keep saving.
by Ari
Thu Sep 21, 2017 8:23 am
Forum: Investing - Theory, News & General
Topic: AA if you were just starting out again
Replies: 49
Views: 3874

Re: AA if you were just starting out again

climber2020 wrote:
Thu Sep 21, 2017 5:54 am
What are local funds? I haven't heard about that before.
Swedish funds. I live in Sweden. Fewer tax complications, fewer currency exchange fees, less hassle than American funds.
by Ari
Thu Sep 21, 2017 3:28 am
Forum: Investing - Theory, News & General
Topic: AA if you were just starting out again
Replies: 49
Views: 3874

Re: AA if you were just starting out again

In the very beginning, I just had an account with some randomly chosen funds with fancy names that I knew nothing about. Pretty much no money there, and "saving for retirent" wasn't a thing people did that I heard about. I didn't really know you could get a steady income from investments. I didn't c...
by Ari
Fri Sep 15, 2017 12:48 am
Forum: Investing - Theory, News & General
Topic: Hedge Your Currency Risk When Investing Abroad ?
Replies: 17
Views: 1167

Re: Hedge Your Currency Risk When Investing Abroad ?

Putting all of your assets in a single currency seems to me to be the opposite of diversification. I do not hedge my foreign holdings (I'm not an American, though).
by Ari
Thu Sep 14, 2017 12:24 am
Forum: Investing - Theory, News & General
Topic: What If U.S. Stocks Stay Expensive For Years?
Replies: 50
Views: 7792

Re: What If U.S. Stocks Stay Expensive For Years?

Seems pretty straight-forward to me, really. Higher P/E means lower earnings per invested dollar. Of course returns are going to be low. I don't think the predictive power of CAPE when it comes to future earnings has much if anything to do with mean reversion. You simply have to pay more for the sam...
by Ari
Tue Sep 12, 2017 1:35 am
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate -> 2% or lower
Replies: 72
Views: 8373

Re: Safe Withdrawal Rate -> 2% or lower

Which means you may end up with a 20 year retirement because you worked 10 years longer to fund the 50+ years that there is no real actuarial basis for expecting that you will live for. That's a decision you are free to make, of course. But it would seem like a horrible shame to have worked an extr...
by Ari
Wed Sep 06, 2017 12:22 am
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate -> 2% or lower
Replies: 72
Views: 8373

Re: Safe Withdrawal Rate -> 2% or lower

Another big variable is of course life expectancy. Only recently has serious study begun on life extension, and scientific breakthroughs are unpredictable. Aubrey De Grey has claimed that the first person to live to 1,000 has already been born. Of course, if we live that long, the economy will likel...
by Ari
Wed Aug 16, 2017 12:46 am
Forum: Investing - Theory, News & General
Topic: Two nice charts on default and duration risk
Replies: 11
Views: 1231

Re: Two nice charts on default and duration risk

Am I wrong if I interpret these charts as "credit risk gives more return for the same amount of risk than does term risk"? Or even "corporate bonds give more return for the same amount of risk than does government bonds"? Point 1 on the second graph seems clearly superior to point 3 on the first. Bu...
by Ari
Wed Aug 09, 2017 12:06 am
Forum: Investing - Theory, News & General
Topic: Still Buying As planned Regardless Of The World Situation
Replies: 72
Views: 8571

Re: Still Buying As planned Regardless Of The World Situation

Whenever the market is high, people tell you "You can't buy now; it's overvalued and about to crash!". Whenever the market is low, people tell you "You can't buy now; we're in a bear market and tanking!". If you listened to what people are saying, you'd stay out of investing altogether.
by Ari
Sun Jul 16, 2017 6:05 am
Forum: Investing - Theory, News & General
Topic: 90:10 AA - what don't you believe about it?
Replies: 101
Views: 7787

Re: 90:10 AA - what don't you believe about it?

I'm pretty sure Bogle is wealthy, too. Better ignore his advice as well. Poor people know more about managing money than the wealthy? :shock: That seems to be the consensus, no? I see a lot of people in this thread saying "Buffet's wife can stand to lose her 90% in stocks. If you can't, don't follo...
by Ari
Sat Jul 15, 2017 2:20 pm
Forum: Investing - Theory, News & General
Topic: 90:10 AA - what don't you believe about it?
Replies: 101
Views: 7787

Re: 90:10 AA - what don't you believe about it?

I'm pretty sure Bogle is wealthy, too. Better ignore his advice as well.
by Ari
Fri Jul 14, 2017 1:27 am
Forum: Investing - Theory, News & General
Topic: 90:10 AA - what don't you believe about it?
Replies: 101
Views: 7787

Re: 90:10 AA - what don't you believe about it?

Some of the 90/10 people will sell out during a downturn and be in cash for a long time. Anyone know of any studies on this? It's often touted around as an established fact on these forums, but have anyone seen numbers on how many people sell off during downturns, preferrably with data for differen...
by Ari
Sun Jun 25, 2017 1:22 am
Forum: Investing - Theory, News & General
Topic: Good Article on Bubbles and Staying the Course
Replies: 27
Views: 3622

Re: Good Article on Bubbles and Staying the Course

If, as the article suggests, there is no "one true price", because investors of different time horizons have different price preferences, doesn't this imply that it should be possible to beat the market? If a stock is bid up high by short term investors, it should be avoided by long-term investors, ...
by Ari
Sat Jun 24, 2017 4:24 am
Forum: Investing - Theory, News & General
Topic: Anything wrong with 100% US Stocks?
Replies: 35
Views: 3054

Re: Anything wrong with 100% US Stocks?

It's probably fine, and possibly terrible. Putting all your stocks in a single country is concentrating your risks unnecessarily. The US is also a teach-heavy stock market so it's a sector bet as well. That's probably fine. But if the US and/or the tech industry goes into a long slump while other co...
by Ari
Fri Jun 23, 2017 8:20 am
Forum: Investing - Theory, News & General
Topic: Why bonds when one's investment horizon is long?
Replies: 59
Views: 4923

Re: Why bonds when one's investment horizon is long?

I think it is better to acknowledge this and think about it consciously, than to make intuitive and unexpressed decisions, as is done by people who go to 100% Total Stock Market but won't use leverage, or won't go to 100% small-cap value. Leverage costs money, and it adds a risk of losing more than...
by Ari
Thu Jun 22, 2017 12:17 pm
Forum: Investing - Theory, News & General
Topic: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the day."
Replies: 52
Views: 5067

Re: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the da

Isn't currency risk one of the better reasons to invest in international markets? Why would you want to hedge that away? If your currency tanks and prices rise, it's nice to know your international investments are going up. Your currency is likely to go up and down with the economy, so putting all y...
by Ari
Wed Jun 21, 2017 3:31 am
Forum: Investing - Theory, News & General
Topic: Vanguard risk tolerance survey blunder.
Replies: 41
Views: 4812

Re: Vanguard risk tolerance survey blunder.

I agree that the question is obviously flawed. If I don't assume equal likelihood or make some other simple assumption, how could I possibly provide an answer? Perhaps option B has an expected return of -1000 USD? Without expected return, it's impossible to answer the question. Is Vanguard thinking ...
by Ari
Fri Jun 02, 2017 12:16 pm
Forum: Investing - Theory, News & General
Topic: Dealing with Impatience reaching financial goals
Replies: 30
Views: 3643

Re: Dealing with Impatience reaching financial goals

I, too, am impatient, but I've managed to make the savings slog into a challenge. I constantly work to keep my savings rate up (except for rare occasions where I allow myself to relax), cutting corners and optimising processes. Can I get a place with cheaper rent? How much did I spend on food this m...
by Ari
Sat May 20, 2017 3:10 am
Forum: Investing - Theory, News & General
Topic: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel
Replies: 65
Views: 6533

Re: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel

These long-term graphs are indeed enlightening. Thank you, Taylor, for sharing! I especially find the 50-year bear market in bills from 1931-1981 sobering. In bonds, negative real return 1941-1981. Bonds may be good for volatility reduction, but don't count on them for income! So does he use global ...
by Ari
Sat May 13, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: "The long run is only longer than the short run, not safer"
Replies: 37
Views: 3920

Re: "The long run is only longer than the short run, not safer"

What's the actionable advice of this realization? Don't hold more stocks when you're young and less when you're closer to retirement?
by Ari
Sat May 13, 2017 1:36 am
Forum: Investing - Theory, News & General
Topic: "The long run is only longer than the short run, not safer"
Replies: 37
Views: 3920

Re: "The long run is only longer than the short run, not safer"

Random Walker wrote:Certainly the longer the holding period, the more likely a positive outcome, but also the wider dispersion of potential returns.
I must say that "likelihood of a positive outcome" is a lot more relevant to my definition of "risky" than is "dispersion of returns".
by Ari
Fri May 12, 2017 2:03 pm
Forum: Investing - Theory, News & General
Topic: Do You Think Behavioral Anomalies Will Persist?
Replies: 40
Views: 3882

Re: Do You Think Behavioral Anomalies Will Persist?

In other words, it is relatively easy to program an AI to avoid your mistakes in Chess and Go because they are just computational limitations of your own, a little bit more difficult in poker and vastly more complex and possibly unsolvable in investing. I think you underestimate the challenges face...
by Ari
Fri May 12, 2017 12:51 pm
Forum: Investing - Theory, News & General
Topic: Do You Think Behavioral Anomalies Will Persist?
Replies: 40
Views: 3882

Re: Do You Think Behavioral Anomalies Will Persist?

On the contrary, I would think that there would be every reason to think that programmers will program their bots with their own behavioral errors. I don't see how it couldn't be the case. Do you think the programmers behind Deep Blue programmed their own chess strategies into it? Were they better ...
by Ari
Fri May 12, 2017 12:28 am
Forum: Investing - Theory, News & General
Topic: Do You Think Behavioral Anomalies Will Persist?
Replies: 40
Views: 3882

Re: Do You Think Behavioral Anomalies Will Persist?

Exactly. Great strides are being made in artificial intelligence, such as in deep learning. If a significant enough number of dollars are managed by AI systems, human-induced anomalies will be eaten in microseconds. Exactly how will they be "eaten in microseconds"? If you've got a market full of se...
by Ari
Thu May 11, 2017 7:29 am
Forum: Investing - Theory, News & General
Topic: Do You Think Behavioral Anomalies Will Persist?
Replies: 40
Views: 3882

Re: Do You Think Behavioral Anomalies Will Persist?

selftalk wrote:Human nature in aggregate hasn`t changed since the beginning of time. Why would it change now ?
A better question might be: Will human nature be less involved in pricing the market in the future?
by Ari
Thu May 11, 2017 7:28 am
Forum: Investing - Theory, News & General
Topic: Do You Think Behavioral Anomalies Will Persist?
Replies: 40
Views: 3882

Re: Do You Think Behavioral Anomalies Will Persist?

I don't know enough to take a stand on that particular paper's methods, but I would tend to agree that until a result has been thoroughly tested out of sample and replicated, one should be skeptical. I think the well-known factors such as small, value, momentum etc. have all been replicated out of ...
by Ari
Sat May 06, 2017 11:27 am
Forum: Investing - Theory, News & General
Topic: Why should this chart not scare me from investing?
Replies: 20
Views: 1844

Re: Why should this chart not scare me from investing?

1: You can't predict the market.
2: Looking at a price chart without taking dividends into account is highly misleading.
by Ari
Thu May 04, 2017 10:08 am
Forum: Investing - Theory, News & General
Topic: Increasing correlation between US and international equities
Replies: 66
Views: 5269

Re: Increasing correlation between US and international equities

Seems completely inconsequential. Why would this matter to a long-term investor? US returns and returns from the rest of the world have been very different for the last few decades. Sometimes the US has been going strong, other times the rest of the world. Why does the correlation matter when one ca...
by Ari
Tue May 02, 2017 2:42 am
Forum: Investing - Theory, News & General
Topic: Another "Why Bonds?" / Buffett 90/10 thread..
Replies: 66
Views: 9020

Re: Another "Why Bonds?" / Buffett 90/10 thread..

I know that you weren't advocating this, but I always shake my head when people starting talking about 'safe withdrawal rates' under 3%. A portfolio could be self-amortized over 30 years and provide a guaranteed 3.33% SWR (money invested in TIPS so as not to fall behind inflation) and likely a bit ...
by Ari
Tue May 02, 2017 2:34 am
Forum: Investing - Theory, News & General
Topic: Another "Why Bonds?" / Buffett 90/10 thread..
Replies: 66
Views: 9020

Re: Another "Why Bonds?" / Buffett 90/10 thread..

To help clear up some of the misgivings or confusion I think it is important to point out that there are two separate ways of viewing the role of bonds in a portfolio. I'd add a third, which is as a sort of "emergency contribution" fund (to be available to make purchases of risky assets in the even...
by Ari
Tue May 02, 2017 12:59 am
Forum: Investing - Theory, News & General
Topic: "The Road Less Traveled" by John Bogle
Replies: 31
Views: 4577

Re: "The Road Less Traveled" by John Bogle

Obligatory comment about how the Frost poem is actually about how it doesn't matter which road you take, but it's easy to imagine it did, after the fact.
by Ari
Fri Apr 28, 2017 12:26 pm
Forum: Investing - Theory, News & General
Topic: Shiller: Europe's low CAPE "reflects psychology"
Replies: 17
Views: 2379

Re: Shiller: Europe's low CAPE "reflects psychology"

A low CAPE always means higher expected returns. It's one of the few indicators that have any statistical rigor as predictors. Of course, it's far, far from a guarantee, and those expected returns might not realize. But if I were to bet on whether US or Europe will have higher returns in the next te...
by Ari
Fri Apr 28, 2017 11:59 am
Forum: Investing - Theory, News & General
Topic: Should we treat investors' tolerance for volatility as fixed?
Replies: 121
Views: 5215

Re: Should we treat investors' tolerance for volatility as fixed?

Remember, life expectancies worldwide were around 30 years in 1900, and around 50 in 1950. In the US and developed countries it was higher, obviously, but even then, life expectancies weren't much over 65 in the 1950s. So most of human history has been more worried about day-to-day or month-to-mont...
by Ari
Sat Apr 22, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: Weight loss and investing
Replies: 35
Views: 4622

Re: Weight loss and investing

It's all about numbers in minus numbers out. Simple rules of humble arithmetic.
by Ari
Sat Apr 22, 2017 7:05 am
Forum: Investing - Theory, News & General
Topic: What are the global market cap weights today?
Replies: 16
Views: 2891

Re: What are the global market cap weights today?

Ari, How do you go about diversifying your market exposure across the Globe? Thanks. Well, I'm not an American, so I'm not sure it is applicable to a lot of the Bogleheads, but I divide my holdings in three funds, which are: Swedish stocks 40% World stocks 40% Emerging market stocks 20% I have far ...
by Ari
Fri Apr 21, 2017 12:02 pm
Forum: Investing - Theory, News & General
Topic: What are the global market cap weights today?
Replies: 16
Views: 2891

Re: What are the global market cap weights today?

I'd say the market cap-weighted portfolio is heavily tilted towards the US already. 50% in a single country. That's not very good diversification.
by Ari
Thu Apr 20, 2017 2:22 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe says "Goodbye."
Replies: 336
Views: 43306

Re: Larry Swedroe says "Goodby."

I can only add in the praise. I've learned a lot from Mr. Swedroe and I'm sad to see him leave. I wish him the best.