Burton Malkiel on CNBC

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minesweep
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Burton Malkiel on CNBC

Post by minesweep » Tue May 01, 2012 1:21 pm


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SpringMan
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Re: Burton Malkiel on CNBC

Post by SpringMan » Tue May 01, 2012 1:32 pm

He does not like bonds right now. Worrisome since I have upped my bond allocation to my age in bonds. IMO, Bogle's guideline can't be all bad.
Best Wishes, SpringMan

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Taylor Larimore
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Re: Burton Malkiel on bonds

Post by Taylor Larimore » Tue May 01, 2012 1:58 pm

In his book, The Elements of Investing, written in 2010 with Charles Ellis, Professor Malkiel writes:
Burt's Allocation Ranges for Different Age Groups:

Age Group...Percent in Bonds
20-30s..............25-10
40-50s..............35-25
60s..................55-35
70s..................65-50
80s and beyond...80-60
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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SpringMan
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Re: Burton Malkiel on CNBC

Post by SpringMan » Tue May 01, 2012 2:13 pm

Thanks Taylor. I am age 65 with 65% bonds, so overweight according to him (and according to my bathroom scale too :happy ). 65% may be somewhat justifiable since we hold a slice of Vanguard's high yield fund which has equity like correlation.
Best Wishes, SpringMan

FRANK2009
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Re: Burton Malkiel on CNBC

Post by FRANK2009 » Tue May 01, 2012 2:14 pm

Sounds like Total World Index (VT) ETF deserves a place in one's portfolio. Just know that this ETF has for some, an uncomfortably large international component. Maybe the world is changing.

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Lbill
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Re: Burton Malkiel on CNBC

Post by Lbill » Tue May 01, 2012 5:12 pm

You gotta take a ticket to get in line with all the experts who hate bonds. That makes them a screaming buy, IMO.
"Life can only be understood backward; but it must be lived forward." ~ Søren Kierkegaard | | "You can't connect the dots looking forward; but only by looking backwards." ~ Steve Jobs

staythecourse
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Re: Burton Malkiel on CNBC

Post by staythecourse » Tue May 01, 2012 8:20 pm

Hate to state the obvious, but there are MANY reasons to hold bonds. Folks who scream don't do this or that don't ever describe their views in relation to a real person's portfolio as a whole. They always seem to comment as if a person owns a portfolio of 100% of the asset class they are commenting on. That is no use for a real life investor. Does make a good sound bite though.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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joe8d
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Re: Burton Malkiel on bonds

Post by joe8d » Tue May 01, 2012 8:24 pm

Taylor Larimore wrote:In his book, The Elements of Investing, written in 2010 with Charles Ellis, Professor Malkiel writes:
Burt's Allocation Ranges for Different Age Groups:

Age Group...Percent in Bonds
20-30s..............25-10
40-50s..............35-25
60s..................55-35
70s..................65-50
80s and beyond...80-60
Best wishes.
Taylor
If i recall correctly Taylor, Mr Bogle also cited that chart in one of his books as an alternative to "Age in Bonds "
All the Best, | Joe

Muchtolearn
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Re: Burton Malkiel on CNBC

Post by Muchtolearn » Wed May 02, 2012 9:49 am

I am getting more and more convinced that the fear of bonds is overblown. Every single "expert" says they are too overpriced. Except the ones who do the buying !!! One could say that the feds have bought a lot of the treasuries, but not of the munis and corporate bonds which are also very low in rates right now.

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FabLab
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Re: Burton Malkiel on CNBC

Post by FabLab » Wed May 02, 2012 11:08 am

The composition/direction of my AA doesn't turn on the daily comments of those on CNBC.
The fundamental things apply as time goes by -- Herman Hupfeld

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3CT_Paddler
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Re: Burton Malkiel on CNBC

Post by 3CT_Paddler » Wed May 02, 2012 12:17 pm

There was a figure at the 2:57 mark that can't be correct. It says
% of large cap equity funds outperformed by S&P 500
1YR: 83%
10YR: 65%
20YR: 64%
For one thing, the number should be going up. My guess is that they have their numbers reversed with the years. And I would think when you include survivorship bias and other factors it is closer to 90% or more at 20 years.

dkturner
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Re: Burton Malkiel on CNBC

Post by dkturner » Wed May 02, 2012 1:35 pm

3CT_Paddler wrote:There was a figure at the 2:57 mark that can't be correct. It says
% of large cap equity funds outperformed by S&P 500
1YR: 83%
10YR: 65%
20YR: 64%
For one thing, the number should be going up. My guess is that they have their numbers reversed with the years. And I would think when you include survivorship bias and other factors it is closer to 90% or more at 20 years.
Not sure about 20 years, but for 1,5,10 & 15 years the Vanguard institutional index fund outperformed 85, 72, 74 & 64 percent of large cap equity funds as per Morningstar. Looks like the figure was correct, in that at this particular moment in time the farther back you go the better active management did relative to the S&P 500. I agree that this isn't "supposed" to happen, but sometimes it actually does.

SteveB3005
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Re: Burton Malkiel on CNBC

Post by SteveB3005 » Wed May 02, 2012 1:44 pm

^ Many funds die along the road, may be they're just not around after 15 years to compare to.

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