Keep calm and Boglehead on!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Keep calm and Boglehead on!

Post by grok87 » Thu Jun 28, 2018 7:46 am

Keep calm and boglehead on!

Just a reminder to all of us, and particularly to those who may be new to investing to “keep cAlm and boglehead on.”

There is a lot of angst out there these days. According to this article in the last year or two Americans anxiety level has risen dramatically:

https://www.google.com/amp/s/www.scienc ... crease/amp

“New survey results show Americans' anxiety levels experienced a sharp increase in the past year, with almost 40 percent of respondents saying they felt more anxious than they did a year That's a pretty big spike – following on the heels of a 36 percent jump between 2016 and 2017 – and it means this year's national, averaged 'anxiety score' has tipped over halfway on a 100-point scale: it's now sitting at 51, with a five-point increase since 2017.“

In my opinion there is almost nothing in the news that should cause one to change ones investing approach.

Stick to your asset allocation.
Trade and act infrequently.
Be patient.

As Warren Buffet says “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.”

Keep calm and boglehead on!
(KCBO)

Cheers,
Grok
Last edited by grok87 on Thu Jun 28, 2018 8:39 am, edited 1 time in total.
Keep calm and Boglehead on. KCBO.

User avatar
Tamarind
Posts: 1185
Joined: Mon Nov 02, 2015 2:38 pm

Re: Keep calm and Boglehead on!

Post by Tamarind » Thu Jun 28, 2018 8:13 am

Many things in life can cause fear, stress, and anxiety: work, family, politics, the inevitable heat death of the universe. I'm having some of that high anxiety myself today, but glad that investment worries are not contributing to it at all.

guyesmith
Posts: 201
Joined: Fri Mar 23, 2018 11:16 am

Re: Keep calm and Boglehead on!

Post by guyesmith » Thu Jun 28, 2018 8:20 am

Head down, plow ahead. The stock market always goes up.

livesoft
Posts: 63084
Joined: Thu Mar 01, 2007 8:00 pm

Re: Keep calm and Boglehead on!

Post by livesoft » Thu Jun 28, 2018 8:23 am

The anxiety levels have really nothing to do with investing and what happens on this bogleheads.org forum. I don't see any reason to keep calm and I am very glad that folks are not keeping calm.
Wiki This signature message sponsored by sscritic: Learn to fish.

guyesmith
Posts: 201
Joined: Fri Mar 23, 2018 11:16 am

Re: Keep calm and Boglehead on!

Post by guyesmith » Thu Jun 28, 2018 8:23 am

So much anxiety when a person listens to the media and the president. It's amazing how much impact a president can have on short-term markets. If you're only investing in the Total US Market it can be scary because you hear the noise. If you're diversified across the world though your diversification is spread across 48 countries (if VT/VTWSX Total World) and you have no idea the noise in each of those countries. Which is scarier? I say keep going yes. The only one who gets hurt on a roller coaster is the one who jumps off.

Accrual
Posts: 78
Joined: Tue Feb 07, 2017 3:22 pm

Re: Keep calm and Boglehead on!

Post by Accrual » Thu Jun 28, 2018 8:24 am

Tamarind wrote:
Thu Jun 28, 2018 8:13 am
Many things in life can cause fear, stress, and anxiety: work, family, politics, the inevitable heat death of the universe. I'm having some of that high anxiety myself today, but glad that investment worries are not contributing to it at all.
Tamarind,

This too shall pass.

lostdog
Posts: 1297
Joined: Thu Feb 04, 2016 2:15 pm

Re: Keep calm and Boglehead on!

Post by lostdog » Thu Jun 28, 2018 9:07 am

guyesmith wrote:
Thu Jun 28, 2018 8:23 am
So much anxiety when a person listens to the media and the president. It's amazing how much impact a president can have on short-term markets. If you're only investing in the Total US Market it can be scary because you hear the noise. If you're diversified across the world though your diversification is spread across 48 countries (if VT/VTWSX Total World) and you have no idea the noise in each of those countries. Which is scarier? I say keep going yes. The only one who gets hurt on a roller coaster is the one who jumps off.
Just noise no matter how diverse you are. Diversify your investments and tune out the noise. The threads complaining about international investing are just noise. They were non existent in 2017. Now we see the performance chasers coming out of the wood work when international goes on sale. All noise. The US only investors are just noise to me.
Last edited by lostdog on Thu Jun 28, 2018 10:56 am, edited 1 time in total.

User avatar
ReformedSpender
Posts: 228
Joined: Fri Mar 16, 2018 1:24 pm
Location: Stone's Throw from Vanguard

Re: Keep calm and Boglehead on!

Post by ReformedSpender » Thu Jun 28, 2018 10:23 am

guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

User avatar
siamond
Posts: 4326
Joined: Mon May 28, 2012 5:50 am

Re: Keep calm and Boglehead on!

Post by siamond » Thu Jun 28, 2018 10:59 am

grok87 wrote:
Thu Jun 28, 2018 7:46 am
As Warren Buffet says “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.”
That is a wonderful quote I didn't know. Some people really have a way with words. So true!

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Thu Jun 28, 2018 11:33 am

ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
I think it is prudent to construct one’s retirement portfolio with those sort of scenarios in mind.

Personally I am using a “3-legged stool” approach: social security, pension/tips-ladder, Risk-portfolio.

As outlined here:

viewtopic.php?f=10&t=245377

Cheers,
Grok
Keep calm and Boglehead on. KCBO.

mhalley
Posts: 6351
Joined: Tue Nov 20, 2007 6:02 am

Re: Keep calm and Boglehead on!

Post by mhalley » Thu Jun 28, 2018 11:45 am

Wait, WHAT, the UNIVERSE is DYING??? Nooooooo :oops:

Rupert
Posts: 3821
Joined: Fri Aug 17, 2012 12:01 pm

Re: Keep calm and Boglehead on!

Post by Rupert » Thu Jun 28, 2018 11:51 am

I've always found thinking about the inevitable heat death of the universe to be oddly soothing. It's a reminder to me that nothing I do or that happens to me in my life is terribly important really. Helps keep things in perspective.

dcabler
Posts: 696
Joined: Wed Feb 19, 2014 11:30 am

Re: Keep calm and Boglehead on!

Post by dcabler » Thu Jun 28, 2018 11:54 am

Rupert wrote:
Thu Jun 28, 2018 11:51 am
I've always found thinking about the inevitable heat death of the universe to be oddly soothing. It's a reminder to me that nothing I do or that happens to me in my life is terribly important really. Helps keep things in perspective.
.. which leads one inevitably to Monte Python: https://www.youtube.com/watch?v=buqtdpuZxvk

Austintatious
Posts: 802
Joined: Thu Sep 13, 2012 7:01 pm

Re: Keep calm and Boglehead on!

Post by Austintatious » Thu Jun 28, 2018 12:14 pm

livesoft wrote:
Thu Jun 28, 2018 8:23 am
The anxiety levels have really nothing to do with investing and what happens on this bogleheads.org forum. I don't see any reason to keep calm and I am very glad that folks are not keeping calm.
Exactly so!! That anxiety is there for very real reasons, and they're plenty enough reason and motivation to not keep calm. And whether or not it affects bogleheads' investing perspectives and practices , it very likely is affecting and will continue to affect the large majority of Americans as investors.

2015
Posts: 2187
Joined: Mon Feb 10, 2014 2:32 pm

Re: Keep calm and Boglehead on!

Post by 2015 » Thu Jun 28, 2018 12:15 pm

Of course anxiety abounds. Much of what actually works in life is hidden and must be sought out. Conversely, virtually everything that does not work in life is in plain view. If you fail to be effective in actively parceling out your attention you will be over the cliff long before you realize you were headed for it.

We are in the age of Attention (the battle for yours), Emotion (false), and Experience (style without substance). Choose your inputs wisely.

guyesmith
Posts: 201
Joined: Fri Mar 23, 2018 11:16 am

Re: Keep calm and Boglehead on!

Post by guyesmith » Thu Jun 28, 2018 12:22 pm

grok87 wrote:
Thu Jun 28, 2018 11:33 am
ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
I think it is prudent to construct one’s retirement portfolio with those sort of scenarios in mind.

Personally I am using a “3-legged stool” approach: social security, pension/tips-ladder, Risk-portfolio.

As outlined here:

viewtopic.php?f=10&t=245377

Cheers,
Grok
I suppose because this is about our retirement funds, not our whole life. Investing is one of many smart decisions you'll make in life. Invest in the market because my 2018 spending power will be tiny in 2050. Stock pile some food in case the grocery stores run dry. Pay off your house. Keep cash on hand. Keep working. Live for more than this world. I guess if all else fails my hope is in more than the stock market. I invest in the stock market [in hope] that when my wife and I can't work we can still eat.

User avatar
Psyayeayeduck
Posts: 110
Joined: Mon Mar 07, 2016 7:46 am

Re: Keep calm and Boglehead on!

Post by Psyayeayeduck » Thu Jun 28, 2018 12:24 pm

I'm convinced that I'm was an old sea captain searching for the white whale in my previous life since I run towards the chaos when markets take a tumble and buy as much as I can afford to. Arg, me mateys!!! :beer

Forzamilano10
Posts: 3
Joined: Thu Dec 21, 2017 9:04 am

Re: Keep calm and Boglehead on!

Post by Forzamilano10 » Thu Jun 28, 2018 12:47 pm

I'm still early in my career and I've only been accumulating for 7 years. At 7 years old I cried when I lost my $7 allowance savings, so I can only imagine how I'll react if I lose 50%. I feel comfortable with my AA, but this climate still makes me nervous.

Thank you for all the inspiring words and information. I'm trying to keep calm.

User avatar
baconavocado
Posts: 197
Joined: Fri Oct 13, 2017 3:03 pm

Re: Keep calm and Boglehead on!

Post by baconavocado » Thu Jun 28, 2018 12:51 pm

I agree that there's plenty to be concerned about. The pace of change seems to be accelerating and has been especially noticeable to me for the past 10 years or so. Some changes are good, some I find are profoundly good. Others I find are profoundly bad. The weather used to be something you could count on - cold in winter, warm in summer, mild in between - but now even the weather is changing.

How all of this affects the economy is a big question in my mind. For example, it can't be good when wealth and spending power is concentrated in the hands of fewer citizens.

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Thu Jun 28, 2018 1:25 pm

baconavocado wrote:
Thu Jun 28, 2018 12:51 pm
I agree that there's plenty to be concerned about. The pace of change seems to be accelerating and has been especially noticeable to me for the past 10 years or so. Some changes are good, some I find are profoundly good. Others I find are profoundly bad. The weather used to be something you could count on - cold in winter, warm in summer, mild in between - but now even the weather is changing.

How all of this affects the economy is a big question in my mind. For example, it can't be good when wealth and spending power is concentrated in the hands of fewer citizens.
I’d recommend this book by George cooper.
https://www.amazon.com/Money-Blood-Revo ... 0857193821

Money, blood and revolution. Probably the best economics book I have ever read...
https://www.amazon.com/Money-Blood-Revo ... 0857193821
Keep calm and Boglehead on. KCBO.

User avatar
knpstr
Posts: 2168
Joined: Thu Nov 20, 2014 8:57 pm
Location: Michigan

Re: Keep calm and Boglehead on!

Post by knpstr » Thu Jun 28, 2018 1:29 pm

ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
Or returns much better than those in the past. What if we hit technological breakthroughs that allow third world countries to rapidly develop triggering the largest standard of living increase in human history?

Food for thought

:beer
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Thu Jun 28, 2018 4:12 pm

2015 wrote:
Thu Jun 28, 2018 12:15 pm
Of course anxiety abounds. Much of what actually works in life is hidden and must be sought out. Conversely, virtually everything that does not work in life is in plain view. If you fail to be effective in actively parceling out your attention you will be over the cliff long before you realize you were headed for it.

We are in the age of Attention (the battle for yours), Emotion (false), and Experience (style without substance). Choose your inputs wisely.
Nice post.
I think patience is something that many of us may struggle with in this internet age of hyper short attention spans. Cf the Warren buffet quote.
Keep calm and Boglehead on. KCBO.

Tamalak
Posts: 569
Joined: Fri May 06, 2016 2:29 pm

Re: Keep calm and Boglehead on!

Post by Tamalak » Thu Jun 28, 2018 4:16 pm

guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
No guarantee for this. I think "keep calm and carry on" is great advice but calm should NOT be contingent on a certainty of a positive future. There isn't any such certainty. Stocks could go down for the next 50 years.

Learn the skill of embracing uncertainty. Don't try to rationalize it away. Rationalization can fail - hugs never miss!

Foredeck
Posts: 11
Joined: Mon Jun 25, 2018 9:13 am

Re: Keep calm and Boglehead on!

Post by Foredeck » Thu Jun 28, 2018 4:42 pm

Couple recommendations with regards to our current situation.

I would recommend taking a look at books written about Stoicism. One of the key tenets is understanding what's under your control and what is not.

Book Recommendations:

* Unshakable Freedom: Ancient Stoic Secrets Applied to Modern Life
* Meditations by Marcus Aurelius
*How to Be a Stoic: Using Ancient Philosophy to Live a Modern Life by Massimo Pigliucci

Amor Fati, Latin for Love of Fate. https://en.wikipedia.org/wiki/Amor_fati

Next I'd recommend doing mindfulness meditation. Carve out a 20 minutes a day and sit quietly. Try and calm your mind from all the noise of the day. Find your inner peace. As the world around us gets crazier you'll hopefully be able to be more centered.


Another book. Just finished this on Audible. Book is called "Why Buddhism is True: The Science and Philosophy of Meditation and Enlightenment" By Robert Wright. https://www.amazon.com/Why-Buddhism-Tru ... 1439195455
Last edited by Foredeck on Thu Jun 28, 2018 4:48 pm, edited 3 times in total.

RadAudit
Posts: 3095
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: Keep calm and Boglehead on!

Post by RadAudit » Thu Jun 28, 2018 4:43 pm

mhalley wrote:
Thu Jun 28, 2018 11:45 am
Wait, WHAT, the UNIVERSE is DYING??? Nooooooo :oops:
Not to worry!! Our part of the solar system will be long gone before that happens.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The calvary isn't coming, kids. You are on your own.

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Thu Jun 28, 2018 4:54 pm

Tamalak wrote:
Thu Jun 28, 2018 4:16 pm
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
No guarantee for this. I think "keep calm and carry on" is great advice but calm should NOT be contingent on a certainty of a positive future. There isn't any such certainty. Stocks could go down for the next 50 years.

Learn the skill of embracing uncertainty. Don't try to rationalize it away. Rationalization can fail - hugs never miss!
Agree.
I personally am making a limited bet on the stock market with my retirement portfolio. It’s a 3 legged stool approach as outlined here:

viewtopic.php?f=10&t=245377

The scenario I plan for is stocks dropping by half and staying down for say 10 years. To me that is an extreme enough scenario to contemplate. If that happens in the run up to my retirement then my retirement income would be cut by about 10%.

That’s because Two thirds of my income would be from inflation-indexed social-security, pensions, bonds. The other third would be from my Risk portfolio of which stocks make up about 60%.

Cheers,
Grok
Keep calm and Boglehead on. KCBO.

indexonlyplease
Posts: 1298
Joined: Thu Apr 30, 2015 12:30 pm
Location: Florida

Re: Keep calm and Boglehead on!

Post by indexonlyplease » Thu Jun 28, 2018 5:33 pm

ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
Then you just keep working and saving.

SavageAmusement
Posts: 50
Joined: Tue Dec 29, 2015 8:02 pm

Re: Keep calm and Boglehead on!

Post by SavageAmusement » Thu Jun 28, 2018 6:00 pm

siamond wrote:
Thu Jun 28, 2018 10:59 am
grok87 wrote:
Thu Jun 28, 2018 7:46 am
As Warren Buffet says “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.”
That is a wonderful quote I didn't know. Some people really have a way with words. So true!
Here’s another Buffett classic quote that addresses the same issue:

“calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”

WanderingDoc
Posts: 1288
Joined: Sat Aug 05, 2017 8:21 pm

Re: Keep calm and Boglehead on!

Post by WanderingDoc » Thu Jun 28, 2018 6:08 pm

If people are anxious about paper assets this year, oh boy they haven't seen anything yet. So far it's been daisies and rainbows imo.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

WanderingDoc
Posts: 1288
Joined: Sat Aug 05, 2017 8:21 pm

Re: Keep calm and Boglehead on!

Post by WanderingDoc » Thu Jun 28, 2018 6:10 pm

indexonlyplease wrote:
Thu Jun 28, 2018 5:33 pm
ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
Then you just keep working and saving.
Really? What if you're 55 or 65 and are ready to retire? That's why I recommend investing in real assets which produce INCOME, from the first month on.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

User avatar
Sandtrap
Posts: 5500
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Keep calm and Boglehead on!

Post by Sandtrap » Thu Jun 28, 2018 6:34 pm

Anxiety levels were rising in the 50's when "Rock and Roll" entered and young folks were doing wild things.
In the 60's when 4 English fellows with funky haircuts stepped off the plane, Vietnam, and a funny herb odor filled the air.
In the 70's when folks endured a decade of unrest from Nixon to Carter to the "disco duck", uncomfortable platform shoes, and way too tight polyester.
In the 80's when some young girl singer started wearing her underwear on the "outside" of her clothes. :shock:
etc
etc

There will always be "anxiety". . . . especially about "anxiety".. . .

j :D

User avatar
Sandtrap
Posts: 5500
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Keep calm and Boglehead on!

Post by Sandtrap » Thu Jun 28, 2018 6:44 pm

WanderingDoc wrote:
Thu Jun 28, 2018 6:10 pm
indexonlyplease wrote:
Thu Jun 28, 2018 5:33 pm
ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
Then you just keep working and saving.
Really? What if you're 55 or 65 and are ready to retire? That's why I recommend investing in real assets which produce INCOME, from the first month on.
Yes.
See. . . ."Grok's" 3 - Legged Stool" (interesting link to thread).
Diversification of income streams which include the Bogle 3-4 Fund Portfolio
Variations include:
R/E investment > income stream> etc.
Annuities > SPIA's
Pensions for those that have them.
SS
ad infinitum depending on each person's unique financial and life circumstance. :D

All things in moderation. . .including moderation. . :shock:
j

User avatar
Sandtrap
Posts: 5500
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Keep calm and Boglehead on!

Post by Sandtrap » Thu Jun 28, 2018 6:47 pm

grok87 wrote:
Thu Jun 28, 2018 7:46 am
Keep calm and boglehead on!

Just a reminder to all of us, and particularly to those who may be new to investing to “keep cAlm and boglehead on.”

There is a lot of angst out there these days. According to this article in the last year or two Americans anxiety level has risen dramatically:

https://www.google.com/amp/s/www.scienc ... crease/amp

“New survey results show Americans' anxiety levels experienced a sharp increase in the past year, with almost 40 percent of respondents saying they felt more anxious than they did a year That's a pretty big spike – following on the heels of a 36 percent jump between 2016 and 2017 – and it means this year's national, averaged 'anxiety score' has tipped over halfway on a 100-point scale: it's now sitting at 51, with a five-point increase since 2017.“

In my opinion there is almost nothing in the news that should cause one to change ones investing approach.

Stick to your asset allocation.
Trade and act infrequently.
Be patient.

As Warren Buffet says “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.”

Keep calm and boglehead on!
(KCBO)

Cheers,
Grok
Interesting article.
Thanks, "Grok" (interesting name) for posting it.

Perhaps. . . Forum members keep calm by sharing our anxieties. . . .

Mahalo Nui Loa
J :D

User avatar
Tycoon
Posts: 1290
Joined: Wed Mar 28, 2012 7:06 pm

Re: Keep calm and Boglehead on!

Post by Tycoon » Thu Jun 28, 2018 6:52 pm

Sandtrap wrote:
Thu Jun 28, 2018 6:34 pm
Anxiety levels were rising in the 50's when "Rock and Roll" entered and young folks were doing wild things.
In the 60's when 4 English fellows with funky haircuts stepped off the plane, Vietnam, and a funny herb odor filled the air.
In the 70's when folks endured a decade of unrest from Nixon to Carter to the "disco duck", uncomfortable platform shoes, and way too tight polyester.
In the 80's when some young girl singer started wearing her underwear on the "outside" of her clothes. :shock:
etc
etc

There will always be "anxiety". . . . especially about "anxiety".. . .

j :D
Exactly! There's always something to worry about. If one needs an excuse to worry one can find it. I worry that people will discover that markets are driven by behavior and emotion.
Appeal to Pity:When pity is envoked to support a statement | Appeal to Popular Sentiment:Appealing to unrelated prejudices and attitudes | Hasty Generalization:Too little evidence to support the conclusion

2015
Posts: 2187
Joined: Mon Feb 10, 2014 2:32 pm

Re: Keep calm and Boglehead on!

Post by 2015 » Thu Jun 28, 2018 9:00 pm

Tycoon wrote:
Thu Jun 28, 2018 6:52 pm
Sandtrap wrote:
Thu Jun 28, 2018 6:34 pm
Anxiety levels were rising in the 50's when "Rock and Roll" entered and young folks were doing wild things.
In the 60's when 4 English fellows with funky haircuts stepped off the plane, Vietnam, and a funny herb odor filled the air.
In the 70's when folks endured a decade of unrest from Nixon to Carter to the "disco duck", uncomfortable platform shoes, and way too tight polyester.
In the 80's when some young girl singer started wearing her underwear on the "outside" of her clothes. :shock:
etc
etc

There will always be "anxiety". . . . especially about "anxiety".. . .

j :D
Exactly! There's always something to worry about. If one needs an excuse to worry one can find it. I worry that people will discover that markets are driven by behavior and emotion.
It's not angst derived from macro conditions one should be concerned with as a study of history demonstrates human concerns haven't changed much over time. It's micro angst that's most important, as this demonstrates some key grounding ingredient is missing (almost always information of some sort). This lack will be the first thing to work against an individual when any misfortune strikes, financial or otherwise. It's only when the tsunami comes in that we learn who shouldn't have been in the water to begin with.

Again, choose your inputs wisely. Most of what is in plain view is not at all what counts. There are so many books out now about how to increase the effectiveness of one's thinking all you have to do is visit Amazon or some other book retailer to find them.

rgs92
Posts: 2284
Joined: Mon Mar 02, 2009 8:00 pm

Re: Keep calm and Boglehead on!

Post by rgs92 » Thu Jun 28, 2018 9:44 pm

It seems that grok has a 33/67 asset allocation (stocks/bonds). It's not that far off from a conservative investor's 40/60 allocation.
So I'm not sure whether this difference would be extremely significant in the long run no matter what happens.

The only thing I see is that, if a possible deflationary scenario developed, the excess of inflation-linked fixed income instruments could lag behind an ordinary total-bond-index investment.

(And there is some sign of deflationary activity from the stubbornly flat yield curve and the refusal of long-bonds to follow along with the Fed's hike in short term rates. Even the 10 year rate has lagged recently since the latest Fed rate hikes, from 3.2% to 2.8% roughly. So is arranging things to protect your portfolio inflation the best thing? Maybe, maybe not.)

But still, since fixed income investments have relatively little volatility, the 33/67 asset allocation should perform in line with a typical 2-fund portfolio with this allocation (appropriate for someone age 67 I suppose).

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Fri Jun 29, 2018 6:22 am

rgs92 wrote:
Thu Jun 28, 2018 9:44 pm
It seems that grok has a 33/67 asset allocation (stocks/bonds). It's not that far off from a conservative investor's 40/60 allocation.
So I'm not sure whether this difference would be extremely significant in the long run no matter what happens.

The only thing I see is that, if a possible deflationary scenario developed, the excess of inflation-linked fixed income instruments could lag behind an ordinary total-bond-index investment.

(And there is some sign of deflationary activity from the stubbornly flat yield curve and the refusal of long-bonds to follow along with the Fed's hike in short term rates. Even the 10 year rate has lagged recently since the latest Fed rate hikes, from 3.2% to 2.8% roughly. So is arranging things to protect your portfolio inflation the best thing? Maybe, maybe not.)

But still, since fixed income investments have relatively little volatility, the 33/67 asset allocation should perform in line with a typical 2-fund portfolio with this allocation (appropriate for someone age 67 I suppose).
Thanks for your the feedback. I think you are right to call out deflationary Risk as one of the things to think about with my 3 legged stool approach. Some thoughts:

1) social security: no deflationary Risk here. Social security will not be indexed down because of deflation. So arguably those on social security love deflation.

2) employee pension/tips-ladder. My employer pension is very small so for me it is about the tips ladder. Some ibonds are also part of the ladder. These would be insulated from deflation risk to principal.

Yes there is deflation risk here, no getting around it. But that’s only if you compare yourself to nominal bonds. As far as matching my spending needs there is no risk I don’t think.

3) Risk portfolio: for this I follow Swensen and am basically: 50% stocks, 20% real estate, 5% alts, 12.5% treasuries, 12.5% tips.

For the stocks I stick to total world index. Don’t want small or value tilts as those get crushed in deflation.

For real estate half is tiaa real estate and half reits. The reits could be hurt by deflation as they are leveraged.

Treasuries: should benefit from deflation
Tips: i’m Using laddered 5 year tips here which hopefully are relatively insulated due to their deflation put.

Cheers
Grok
Last edited by grok87 on Fri Jun 29, 2018 7:22 am, edited 1 time in total.
Keep calm and Boglehead on. KCBO.

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Fri Jun 29, 2018 6:30 am

2015 wrote:
Thu Jun 28, 2018 9:00 pm
Tycoon wrote:
Thu Jun 28, 2018 6:52 pm
Sandtrap wrote:
Thu Jun 28, 2018 6:34 pm
Anxiety levels were rising in the 50's when "Rock and Roll" entered and young folks were doing wild things.
In the 60's when 4 English fellows with funky haircuts stepped off the plane, Vietnam, and a funny herb odor filled the air.
In the 70's when folks endured a decade of unrest from Nixon to Carter to the "disco duck", uncomfortable platform shoes, and way too tight polyester.
In the 80's when some young girl singer started wearing her underwear on the "outside" of her clothes. :shock:
etc
etc

There will always be "anxiety". . . . especially about "anxiety".. . .

j :D
Exactly! There's always something to worry about. If one needs an excuse to worry one can find it. I worry that people will discover that markets are driven by behavior and emotion.
It's not angst derived from macro conditions one should be concerned with as a study of history demonstrates human concerns haven't changed much over time. It's micro angst that's most important, as this demonstrates some key grounding ingredient is missing (almost always information of some sort). This lack will be the first thing to work against an individual when any misfortune strikes, financial or otherwise. It's only when the tsunami comes in that we learn who shouldn't have been in the water to begin with.

Again, choose your inputs wisely. Most of what is in plain view is not at all what counts. There are so many books out now about how to increase the effectiveness of one's thinking all you have to do is visit Amazon or some other book retailer to find them.
Thanks 2015.
Again good post. Can you maybe recommend one or two of those books? Are you thinking of books like Kahneman’s thinking fast and slow for example?

Cheers,
Grok
Keep calm and Boglehead on. KCBO.

Dandy
Posts: 5483
Joined: Sun Apr 25, 2010 7:42 pm

Re: Keep calm and Boglehead on!

Post by Dandy » Fri Jun 29, 2018 8:53 am

I'm reasonably ok as far as being calm about our investments.

But it is hard for many investors to know if their allocation really matches their risk tolerance or not. It is often said if you are too worried about your investments you should consider adjusting your allocation. Yet, a lot of advice is to stay the course/keep calm etc. And both statement have validity depending on individual circumstances.

So, there is a fine point that inexperienced investors and even experienced investors to consider -- is my fear/anxiety because my allocation is too risky or am I falling for media hype and somewhat irrational fear. A 30 year old with a 50/50 allocation and a $100k portfolio might be better/easier to stay the course than a new retiree with a 70/30 allocation and a million dollar portfolio.

So, not particular to this post, but generally, I think we should always strive to get details before offering stay the course though it is often the right suggestion.

User avatar
nedsaid
Posts: 10712
Joined: Fri Nov 23, 2012 12:33 pm

Re: Keep calm and Boglehead on!

Post by nedsaid » Fri Jun 29, 2018 9:09 am

grok87 wrote:
Fri Jun 29, 2018 6:22 am
rgs92 wrote:
Thu Jun 28, 2018 9:44 pm
It seems that grok has a 33/67 asset allocation (stocks/bonds). It's not that far off from a conservative investor's 40/60 allocation.
So I'm not sure whether this difference would be extremely significant in the long run no matter what happens.

The only thing I see is that, if a possible deflationary scenario developed, the excess of inflation-linked fixed income instruments could lag behind an ordinary total-bond-index investment.

(And there is some sign of deflationary activity from the stubbornly flat yield curve and the refusal of long-bonds to follow along with the Fed's hike in short term rates. Even the 10 year rate has lagged recently since the latest Fed rate hikes, from 3.2% to 2.8% roughly. So is arranging things to protect your portfolio inflation the best thing? Maybe, maybe not.)

But still, since fixed income investments have relatively little volatility, the 33/67 asset allocation should perform in line with a typical 2-fund portfolio with this allocation (appropriate for someone age 67 I suppose).
Thanks for your the feedback. I think you are right to call out deflationary Risk as one of the things to think about with my 3 legged stool approach. Some thoughts:

1) social security: no deflationary Risk here. Social security will not be indexed down because of deflation. So arguably those on social security love deflation.

2) employee pension/tips-ladder. My employer pension is very small so for me it is about the tips ladder. Some ibonds are also part of the ladder. These would be insulated from deflation risk to principal.

Yes there is deflation risk here, no getting around it. But that’s only if you compare yourself to nominal bonds. As far as matching my spending needs there is no risk I don’t think.

3) Risk portfolio: for this I follow Swensen and am basically: 50% stocks, 20% real estate, 5% alts, 12.5% treasuries, 12.5% tips.

For the stocks I stick to total world index. Don’t want small or value tilts as those get crushed in deflation.

For real estate half is tiaa real estate and half reits. The reits could be hurt by deflation as they are leveraged.

Treasuries: should benefit from deflation
Tips: i’m Using laddered 5 year tips here which hopefully are relatively insulated due to their deflation put.

Cheers
Grok
Grok, deflation risk is the least of my worries right now. I posted a lot about deflation in the past, whiffs of deflation and all of that, but the markets and the economy have changed since the "new normal" from the aftermath of the 2008-2009 financial crisis. It isn't that we are "making inflation great again," it is that we are seeing both interest rates and inflation tick up. We are past the days where we were concerned about deflation, it isn't that inflation is a big problem now, but we are seeing signs that it could be a problem in the future.

Energy prices, particularly at the pump, are up. Medical insurance costs have spiked. Rents in certain areas of the country have spiked, housing in general is less affordable. Even free trade is somewhat in doubt as we are seeing the start of tariff wars. Cheaper goods from overseas helped greatly to keep inflation down.

Not gloom and doom, it looks like economic growth is ticking up so and uptick in inflation isn't unexpected. A stronger economy means more demand, more demand means more inflation pressures. Not saying we are going to see a return to 1970's inflation but the days of the "new normal" of tepid economic growth, very low interest rates, and whiffs of deflation seem to be over. Pretty much, we are seeing more normal times.
A fool and his money are good for business.

grok87
Posts: 8511
Joined: Tue Feb 27, 2007 9:00 pm

Re: Keep calm and Boglehead on!

Post by grok87 » Fri Jun 29, 2018 10:38 am

nedsaid wrote:
Fri Jun 29, 2018 9:09 am
grok87 wrote:
Fri Jun 29, 2018 6:22 am
rgs92 wrote:
Thu Jun 28, 2018 9:44 pm
It seems that grok has a 33/67 asset allocation (stocks/bonds). It's not that far off from a conservative investor's 40/60 allocation.
So I'm not sure whether this difference would be extremely significant in the long run no matter what happens.

The only thing I see is that, if a possible deflationary scenario developed, the excess of inflation-linked fixed income instruments could lag behind an ordinary total-bond-index investment.

(And there is some sign of deflationary activity from the stubbornly flat yield curve and the refusal of long-bonds to follow along with the Fed's hike in short term rates. Even the 10 year rate has lagged recently since the latest Fed rate hikes, from 3.2% to 2.8% roughly. So is arranging things to protect your portfolio inflation the best thing? Maybe, maybe not.)

But still, since fixed income investments have relatively little volatility, the 33/67 asset allocation should perform in line with a typical 2-fund portfolio with this allocation (appropriate for someone age 67 I suppose).
Thanks for your the feedback. I think you are right to call out deflationary Risk as one of the things to think about with my 3 legged stool approach. Some thoughts:

1) social security: no deflationary Risk here. Social security will not be indexed down because of deflation. So arguably those on social security love deflation.

2) employee pension/tips-ladder. My employer pension is very small so for me it is about the tips ladder. Some ibonds are also part of the ladder. These would be insulated from deflation risk to principal.

Yes there is deflation risk here, no getting around it. But that’s only if you compare yourself to nominal bonds. As far as matching my spending needs there is no risk I don’t think.

3) Risk portfolio: for this I follow Swensen and am basically: 50% stocks, 20% real estate, 5% alts, 12.5% treasuries, 12.5% tips.

For the stocks I stick to total world index. Don’t want small or value tilts as those get crushed in deflation.

For real estate half is tiaa real estate and half reits. The reits could be hurt by deflation as they are leveraged.

Treasuries: should benefit from deflation
Tips: i’m Using laddered 5 year tips here which hopefully are relatively insulated due to their deflation put.

Cheers
Grok
Pretty much, we are seeing more normal times.
I’m skeptical of that but I hope you are right. I’m preparing for a wild ride. But from your lips to God’s ears...
Cheers,
Grok
Keep calm and Boglehead on. KCBO.

KlangFool
Posts: 10743
Joined: Sat Oct 11, 2008 12:35 pm

Re: Keep calm and Boglehead on!

Post by KlangFool » Fri Jun 29, 2018 10:51 am

ReformedSpender wrote:
Thu Jun 28, 2018 10:23 am
guyesmith wrote:
Thu Jun 28, 2018 8:20 am
Head down, plow ahead. The stock market always goes up.
But what if it doesn't? Past performance is not indicative of future results. What if we hit a multi-generation 'plateau', or worse, a historic bear market/recession?

Food for thought

:beer
ReformedSpender,

So what?

A) If you are worry enough, do something to prepare for this.

B) If you are not worried enough to do something, then, it is not a problem.

I always assumed that the recession could come at any time and the market could stay down for 5 years. And, I could be permanently unemployed and under-employed. My portfolio is prepared for this.

I had been through a few recessions with quarterly and annual laid off of 5% to 50%. So, when the next one shows up, it is "business as usual" for me.

KlangFool

KlangFool
Posts: 10743
Joined: Sat Oct 11, 2008 12:35 pm

Re: Keep calm and Boglehead on!

Post by KlangFool » Fri Jun 29, 2018 11:02 am

nedsaid wrote:
Fri Jun 29, 2018 9:09 am
grok87 wrote:
Fri Jun 29, 2018 6:22 am
rgs92 wrote:
Thu Jun 28, 2018 9:44 pm
It seems that grok has a 33/67 asset allocation (stocks/bonds). It's not that far off from a conservative investor's 40/60 allocation.
So I'm not sure whether this difference would be extremely significant in the long run no matter what happens.

The only thing I see is that, if a possible deflationary scenario developed, the excess of inflation-linked fixed income instruments could lag behind an ordinary total-bond-index investment.

(And there is some sign of deflationary activity from the stubbornly flat yield curve and the refusal of long-bonds to follow along with the Fed's hike in short term rates. Even the 10 year rate has lagged recently since the latest Fed rate hikes, from 3.2% to 2.8% roughly. So is arranging things to protect your portfolio inflation the best thing? Maybe, maybe not.)

But still, since fixed income investments have relatively little volatility, the 33/67 asset allocation should perform in line with a typical 2-fund portfolio with this allocation (appropriate for someone age 67 I suppose).
Thanks for your the feedback. I think you are right to call out deflationary Risk as one of the things to think about with my 3 legged stool approach. Some thoughts:

1) social security: no deflationary Risk here. Social security will not be indexed down because of deflation. So arguably those on social security love deflation.

2) employee pension/tips-ladder. My employer pension is very small so for me it is about the tips ladder. Some ibonds are also part of the ladder. These would be insulated from deflation risk to principal.

Yes there is deflation risk here, no getting around it. But that’s only if you compare yourself to nominal bonds. As far as matching my spending needs there is no risk I don’t think.

3) Risk portfolio: for this I follow Swensen and am basically: 50% stocks, 20% real estate, 5% alts, 12.5% treasuries, 12.5% tips.

For the stocks I stick to total world index. Don’t want small or value tilts as those get crushed in deflation.

For real estate half is tiaa real estate and half reits. The reits could be hurt by deflation as they are leveraged.

Treasuries: should benefit from deflation
Tips: i’m Using laddered 5 year tips here which hopefully are relatively insulated due to their deflation put.

Cheers
Grok
Grok, deflation risk is the least of my worries right now.
nedsaid,

I know that I know nothing. Hence, I do not know whether deflation and/or hyperinflation is a real risk. I believe in preparation and spread my money around.

A) Deflation -> I keep 1 year of expense in cash or cash equivalent

B) Hyperinflation -> I keep some physical gold.

C) Inflation -> I keep my 30 years fixed rate mortgage as an inflation hedge.

KlangFool

User avatar
dwickenh
Posts: 1462
Joined: Sun Jan 04, 2015 9:45 pm
Location: Illinois

Re: Keep calm and Boglehead on!

Post by dwickenh » Fri Jun 29, 2018 11:07 am

siamond wrote:
Thu Jun 28, 2018 10:59 am
grok87 wrote:
Thu Jun 28, 2018 7:46 am
As Warren Buffet says “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.”
That is a wonderful quote I didn't know. Some people really have a way with words. So true!
See my signature!!
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

User avatar
siamond
Posts: 4326
Joined: Mon May 28, 2012 5:50 am

Re: Keep calm and Boglehead on!

Post by siamond » Fri Jun 29, 2018 11:12 am

dwickenh wrote:
Fri Jun 29, 2018 11:07 am
siamond wrote:
Thu Jun 28, 2018 10:59 am
grok87 wrote:
Thu Jun 28, 2018 7:46 am
As Warren Buffet says “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.”
That is a wonderful quote I didn't know. Some people really have a way with words. So true!
See my signature!!
:sharebeer :sharebeer :sharebeer :sharebeer

User avatar
ReformedSpender
Posts: 228
Joined: Fri Mar 16, 2018 1:24 pm
Location: Stone's Throw from Vanguard

Re: Keep calm and Boglehead on!

Post by ReformedSpender » Fri Jun 29, 2018 12:31 pm

KlangFool wrote:
Fri Jun 29, 2018 10:51 am


ReformedSpender,

So what?

A) If you are worry enough, do something to prepare for this.

B) If you are not worried enough to do something, then, it is not a problem.

I always assumed that the recession could come at any time and the market could stay down for 5 years. And, I could be permanently unemployed and under-employed. My portfolio is prepared for this.

I had been through a few recessions with quarterly and annual laid off of 5% to 50%. So, when the next one shows up, it is "business as usual" for me.

KlangFool
That is the point I am driving at Klang. Congrats on being prepared for any type of situation.

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

KlangFool
Posts: 10743
Joined: Sat Oct 11, 2008 12:35 pm

Re: Keep calm and Boglehead on!

Post by KlangFool » Fri Jun 29, 2018 1:51 pm

ReformedSpender wrote:
Fri Jun 29, 2018 12:31 pm
KlangFool wrote:
Fri Jun 29, 2018 10:51 am


ReformedSpender,

So what?

A) If you are worry enough, do something to prepare for this.

B) If you are not worried enough to do something, then, it is not a problem.

I always assumed that the recession could come at any time and the market could stay down for 5 years. And, I could be permanently unemployed and under-employed. My portfolio is prepared for this.

I had been through a few recessions with quarterly and annual laid off of 5% to 50%. So, when the next one shows up, it is "business as usual" for me.

KlangFool
That is the point I am driving at Klang. Congrats on being prepared for any type of situation.

:beer
ReformedSpender,

I had to in order to survive. My working lives across 30+ years is surviving from one recession to another.

KlangFool

new2bogle
Posts: 1359
Joined: Fri Sep 11, 2009 2:05 pm

Re: Keep calm and Boglehead on!

Post by new2bogle » Fri Jun 29, 2018 1:53 pm

livesoft wrote:
Thu Jun 28, 2018 8:23 am
The anxiety levels have really nothing to do with investing and what happens on this bogleheads.org forum. I don't see any reason to keep calm and I am very glad that folks are not keeping calm.
I am with you.

2015
Posts: 2187
Joined: Mon Feb 10, 2014 2:32 pm

Re: Keep calm and Boglehead on!

Post by 2015 » Fri Jun 29, 2018 2:29 pm

grok87 wrote:
Fri Jun 29, 2018 6:30 am
2015 wrote:
Thu Jun 28, 2018 9:00 pm
Tycoon wrote:
Thu Jun 28, 2018 6:52 pm
Sandtrap wrote:
Thu Jun 28, 2018 6:34 pm
It's not angst derived from macro conditions one should be concerned with as a study of history demonstrates human concerns haven't changed much over time. It's micro angst that's most important, as this demonstrates some key grounding ingredient is missing (almost always information of some sort). This lack will be the first thing to work against an individual when any misfortune strikes, financial or otherwise. It's only when the tsunami comes in that we learn who shouldn't have been in the water to begin with.

Again, choose your inputs wisely. Most of what is in plain view is not at all what counts. There are so many books out now about how to increase the effectiveness of one's thinking all you have to do is visit Amazon or some other book retailer to find them.
Thanks 2015.
Again good post. Can you maybe recommend one or two of those books? Are you thinking of books like Kahneman’s thinking fast and slow for example?

Cheers,
Grok
I really like the book recommendations by Shane Parrish. I also find his site an excellent resource for thinking about thinking.

https://www.google.com/search?q=shane+p ... n&ie=UTF-8

new2bogle
Posts: 1359
Joined: Fri Sep 11, 2009 2:05 pm

Re: Keep calm and Boglehead on!

Post by new2bogle » Fri Jun 29, 2018 2:50 pm

I started really investing in 2007 when I got my first job out of grad school. Before that, my portfolio was no more than $15k that I save up over years of internships (and minus a car and other expenses of 20 year-olds). By 2008 I had about $70k in my portfolio when everything turned upside down. Boy was that an eye opener - over a few weeks my portfolio was cut in half.

My one saving grace was that I did NOT sell and just kept chugging along. A year or so later I thankfully found bogleheads!

So "Keep Calm and Boglehead On!" is excellent advice for your portfolio.

Post Reply