knpstr wrote: ↑
Fri Aug 31, 2018 7:55 pm
JBTX wrote: ↑
Fri Aug 31, 2018 7:25 pm
He's been doing a lot of that in this thread. He is clearly trolling.
No not trolling. Pointing out contradictions being made.
My only position is that stocks are likely better investments than I-bonds for the very long term 30+ years. I'm just engaging with people who disagree with that. I'm very interested to see why they think that is "terrible advice" for essentially "legacy money".
Listen, if you want to put all of your money in stocks, and are very risk tolerant, that is fine. However, most people have some level of risk aversion, implicitly have a risk and return tradeoff curve, and believe in the benefits of diversification.
Nobody has specifically said that ibonds are better than stocks long term. Nobody has even said 3% ibonds are better than stocks long term. But you choose to keep quoting people as saying that. Please stop distorting what we are trying to say. Misquoting people and/ or quoting them out of context intentionally is trolling
Fact is nobody knows. A 3% plus inflation return actually could beat stocks over the next 20 years. That is a fairly rare occurrence (less than 10%), but at high CAPE10's, the probability of it happening is greater than normal
https://www.crestmontresearch.com/docs/ ... eturns.pdf
In the graph above, the starting average PE10 was over 18 only 20% of the time. For those two deciles where the average starting point was over 18, the 20 year returns were 5.2% and 7.8%. The current PE 10 is in 33.3. Make of that what you will.
Fact is, most people prefer some level of diversification using bonds, and given that, ibonds that pay 3% above current market rates are relatively attractive.
If you really don't value asset class diversification over the long term, and instead prefer to be 100% in assets that tend to give the highest long term return, seems to me you should be 100% in small cap value.