Search found 2826 matches

by CULater
Wed Jun 17, 2020 7:04 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

For the longest period for which data is available using Portfolio Visualizer 1978-2020: Portfolio 1: Golden Butterfly (20% TSM, 20% SCV, 20% Long Treasuries, 20% Short Treasuries, 20% Gold) Portfolio 2: Golden Butterfly - No Gold (20% TSM, 20% SCV, 30% Long Treasuries, 30% Short Treasuries) Portfolio, CAGR, SD, Largest Drawdown, Sharpe Portfolio 1: 9.91%, 8.29%, -16.64%, 0.65 Portfolio 2: 9.96%, 7.69%, -16.49%, 0.70 As you can see, there was virtually no difference in compound return, annualized standard deviation, largest drawdown, and Sharpe Ratio if you had not held any Gold, substituting Treasuries for the 20% Gold allocation. Once again, the historical data for long term portfolio returns shows that Gold added nothing to portfolio pe...
by CULater
Tue Jun 16, 2020 12:05 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Also use the Rolling Returns chart with it set to 5 or more years of average returns. The GB was much better during the 2000s than the non-gold alternative. That was 30 years past the 1970s. Yes, that's true. If I start in 2000 then the rolling returns for 1,3,5,7,10 and 15 years, as well as the highest period returns, favor the GB over the Non-Gold GB. Gold had a run from 1972-1981 and another run from 2002-2011, both periods about a decade long. It was dead money for two decades from 1981-2001. If you were fortunate enough to invest a lump sum in a portfolio that includes a significant allocation to Gold at the start of a run, you were better off than if you had avoided Gold. But isn't this cherry-picking the periods when it would have b...
by CULater
Tue Jun 16, 2020 11:14 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

willthrill81 wrote: Tue Jun 16, 2020 10:44 am
CULater wrote: Tue Jun 16, 2020 10:24 am Once again, it would be instructive to see the Portfolio Charts data run from a starting point of 1976 to 1978.
The heat map on that site shows all starting years since 1970.
Like to see the complete suite of backtesting results.
by CULater
Tue Jun 16, 2020 10:24 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Once again, it would be instructive to see the Portfolio Charts data run from a starting point of 1976 to 1978. Clearly, the inflationary 1970s were damaging to both stocks and nominal bonds, while Gold price did well. As I pointed out, when you look at returns from 1978, Gold has been unremarkable. If you look at the period 1972-77, it would have helped a lot - but we don't know if that was just hypothetical because very few investors could have owned or traded it prior to 1975 in sufficient amounts to have benefitted and backtesting results are based on price, not net price taking into consideration costs. And it was illegal for U.S. citizens to even own Gold until 1975, had they the means and determination to invest in it. One other fact...
by CULater
Tue Jun 16, 2020 8:31 am
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

I suggested to the author of Portfolio Charts for these reasons that an option to select a starting year other than 1970 be provided on the website but he disagreed. I disagree because Portfolio Charts already studies every start date simultaneously rather than just the period starting in 1970. :wink: And for a full explanation, I address your concern about the gold data here: How to study portfolios when the data is full of bubbles . But all data aside, I would never recommend that someone invest in something they simply don't trust. There are lots of good portfolios for all types of people, and I very much appreciate your perspective. Thoughtful piece. I do admire and appreciate the great work you have done with Portfolio Charts and your...
by CULater
Mon Jun 15, 2020 7:44 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

For the longest period for which data is available using Portfolio Visualizer 1978-2020: Portfolio 1: Golden Butterfly (20% TSM, 20% SCV, 20% Long Treasuries, 20% Short Treasuries, 20% Gold) Portfolio 2: Golden Butterfly - No Gold (20% TSM, 20% SCV, 30% Long Treasuries, 30% Short Treasuries) Portfolio, CAGR, SD, Largest Drawdown, Sharpe Portfolio 1: 9.91%, 8.29%, -16.64%, 0.65 Portfolio 2: 9.96%, 7.69%, -16.49%, 0.70 As you can see, there was virtually no difference in compound return, annualized standard deviation, largest drawdown, and Sharpe Ratio if you had not held any Gold, substituting Treasuries for the 20% Gold allocation. Once again, the historical data for long term portfolio returns shows that Gold added nothing to portfolio pe...
by CULater
Mon Jun 15, 2020 5:50 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Once again, we see that over short rolling time periods (1 - 3 years) the Golden Butterfly did produce larger maximum returns in one or more of those time periods compared to the Golden Butterfly without Gold. But as the rolling time period lengthens, it did not. Also, the average returns for rolling time periods of 1,3,5,7,10 and 15 years were all lower. Golden Butterfly, Golden Butterfly - No Gold Period, Avg Return, Largest Return, Avg Return, Largest Return 1 year: 10.31%, 38.92% , 10.33%, 32.24% 3 years: 9.76%, 22.08% , 10.17%, 19.00% 5 years: 9.61%, 18.18%, 10.23%, 20.72% 7 years: 9.53%, 16.63%, 10.18%, 17.50% 10 years: 9.46%, 15.20%, 9.99%, 15.62% 15 years: 9.33%, 13.41%, 9.87%, 14.32% As in my previous post, historically the longer ...
by CULater
Mon Jun 15, 2020 5:16 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

For the longest period for which data is available using Portfolio Visualizer 1978-2020: Portfolio 1: Golden Butterfly (20% TSM, 20% SCV, 20% Long Treasuries, 20% Short Treasuries, 20% Gold) Portfolio 2: Golden Butterfly - No Gold (20% TSM, 20% SCV, 30% Long Treasuries, 30% Short Treasuries) Portfolio, CAGR, SD, Largest Drawdown, Sharpe Portfolio 1: 9.91%, 8.29%, -16.64%, 0.65 Portfolio 2: 9.96%, 7.69%, -16.49%, 0.70 As you can see, there was virtually no difference in compound return, annualized standard deviation, largest drawdown, and Sharpe Ratio if you had not held any Gold, substituting Treasuries for the 20% Gold allocation. Once again, the historical data for long term portfolio returns shows that Gold added nothing to portfolio per...
by CULater
Mon Jun 15, 2020 12:03 pm
Forum: Investing - Theory, News & General
Topic: What are your thoughts on the "Golden Butterfly" portfolio?
Replies: 383
Views: 66193

Re: What are your thoughts on the "Golden Butterfly" portfolio?

Here's the thing about Gold. The longer you have an allocation to gold, the less benefit it provides. Historically, once you go beyond 3-5 years holding period you might as well have replaced your Gold allocation with an allocation to safe Treasuries because your portfolio returns would have been better. In the data table below Portfolio 1 consists of 25% Stocks, 50% Intermediate Treasuries, and 25% Gold, while Portfolio 2 consists of 25% Stocks, 75% Intermediate Treasuries. Here are the data for 1, 3 and 5 year rolling returns since 1978. 1 Year Roll Period Portfolio, Avg Return, High Return, Low Return Portfolio 1: 8.78% 40.38% -4.48% Portfolio 2: 8.72% 28.47% -3.29% 3 Year Roll Period Portfolio 1: 8.51% 21.28% 0.82% Portfolio 2: 8.54% 16...
by CULater
Fri Jun 12, 2020 8:27 am
Forum: Personal Finance (Not Investing)
Topic: TIAA-CREF After Tax Annuity
Replies: 13
Views: 3057

Re: TIAA-CREF After Tax Annuity

Northster wrote: Fri Jun 12, 2020 7:57 am There are two other options to consider for TIAA Trad withdrawal -- taking interest earned each year, or taking a RMD. I have been doing the former and plan to switch to RMD when interest is insufficient to meet RMD requirement. The income is lower in early years but I think makes more sense in the long run.
I'm pretty sure you don't have these options available with the ATRA, at least I don't. Only ways to take withdrawals is to TPA or SPIA the total amount in Traditional. Outside the ATRA, I do have these other withdrawal options available.
by CULater
Fri Jun 12, 2020 8:24 am
Forum: Personal Finance (Not Investing)
Topic: TIAA-CREF After Tax Annuity - How to begin withdrawals?
Replies: 7
Views: 1007

Re: TIAA-CREF After Tax Annuity - How to begin withdrawals?

Unfortunately, the long discussion of ATRAs over at Morningstar is among the many deleted, in the recent purge by Morningstar. That was important, because the (original, simplest version, ATRA as the analog of RA, SRA, GSRA, RC, RCP ... ) product was originally created to segregate funds that had been contributed before the IRS required keeping only pre-tax funds in the basic RA product. In my case, without telling me, TIAA somehow (or, purportedly) tracked all of the "optional contributions", which once was a Defined Term, I had made in the 1980s when I had no retirement plan at work. These post-tax monies, along with their earnings, were removed from my RA (which has had/has no contributions since 1979) and used to create my AT...
by CULater
Fri Jun 12, 2020 7:47 am
Forum: Personal Finance (Not Investing)
Topic: TIAA-CREF After Tax Annuity - How to begin withdrawals?
Replies: 7
Views: 1007

Re: TIAA-CREF After Tax Annuity - How to begin withdrawals?

With my ATRA, you cannot make partial withdrawals from Traditional. It is all or nothing. This applies to a TPA or to a lifetime annuity.
by CULater
Fri Jun 12, 2020 7:44 am
Forum: Personal Finance (Not Investing)
Topic: TIAA-CREF After Tax Annuity
Replies: 13
Views: 3057

Re: TIAA-CREF After Tax Annuity

I have an ATRA with TIAA-CREF and withdrawal options depend on whether the funds are invested in TIAA Traditional. Funds invested in TIAA Traditional can only be withdrawn via a 10-year Transfer Payout Annuity or a Lifetime Annuity. Funds invested in TREA or CREF can be withdrawn as lump sum distributions. By the way, I fortunately had a record of the amounts of my after-tax contributions. When you withdraw, you will own tax on the earnings, but not the after-tax contributions. TIAA did not have the correct amount of my after-tax contributions and I was able to get that corrected because I had records. Otherwise, I would end up paying tax on a larger portion of my withdrawals than I should. Be sure to ask them and check against your records.
by CULater
Thu Jun 11, 2020 3:10 pm
Forum: Personal Investments
Topic: Thoughts on today's sell-off?
Replies: 194
Views: 19377

Re: Thoughts on today's sell-off?

Mrmetalpole wrote: Thu Jun 11, 2020 3:03 pm Did people really think we were going straight up and away from the March low with this crazy backdrop? The Fed is a printing press, interest rates are nothing, tech is a safe haven, money has to go somewhere, yada yada....we don’t get a new raging bull market in the middle of a raging pandemic killing thousands of Americans weekly, very high unemployment, bad earnings mostly and the most contentious election is US history coming up. The best we can “hope” for is a W recovery stock market wise.
If only Mr. Market understood this logic. However, his job is to make 90% of investors with a reasoned opinion look like fools.
~ I.M. Fool
by CULater
Thu Jun 11, 2020 1:44 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4653035

Re: U.S. stocks in free fall

Market just passed the sinking rock.
by CULater
Thu Jun 11, 2020 12:31 pm
Forum: Personal Investments
Topic: Thoughts on today's sell-off?
Replies: 194
Views: 19377

Re: Thoughts on today's sell-off?

You are all wrong. The market selloff was predictable because I just bought some more VTI two days ago. Sorry I didn't post.
by CULater
Wed Jun 10, 2020 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: CPI and the Perfect Storm for Seniors
Replies: 12
Views: 1065

CPI and the Perfect Storm for Seniors

Here's why seniors are getting screwed by the government inflation statistics. For May, core inflation is reported as -0.1%, so that means you don't earn any interest and you probably won't get a COLA for social security. And your TIPS and I-Bonds are losers too. The cost of food at home increased 1.0% in May and is up 4.8% over the last 12 months. The beef index increased 10.8% in May, its largest ever monthly increase. The cost of shelter increased 0.2%. The index for household furnishings increased 0.4%. The cost of medical care services increased 0.6%. The cost of alcoholic beverages increased 0.8%, its largest increase since January 2012. So, there's no inflation except for everything that seniors have to spend money on, including your...
by CULater
Wed Jun 03, 2020 3:10 pm
Forum: Personal Consumer Issues
Topic: Puzzling problem with outbound calls on Google Voice
Replies: 6
Views: 1365

Re: Puzzling problem with outbound calls on Google Voice

HueyLD wrote: Wed Jun 03, 2020 11:59 am You need to dial all ten digits (area code + seven digits) regardless of the number.
I do. Has always worked OK. This is a new problem.
by CULater
Wed Jun 03, 2020 11:43 am
Forum: Personal Consumer Issues
Topic: Puzzling problem with outbound calls on Google Voice
Replies: 6
Views: 1365

Puzzling problem with outbound calls on Google Voice

Anybody know Google Voice? For some reason, outgoing calls to numbers with the same area code as the GV number are getting a false busy signal but GV calls to numbers with a different area code are going through OK. Inbound calls seem to work OK. Have tried to get some info on this but not successful. Anyone else had this problem and know what it is?
by CULater
Tue Jun 02, 2020 4:16 pm
Forum: Personal Consumer Issues
Topic: When should I get a wheel alignment?
Replies: 42
Views: 3670

When should I get a wheel alignment?

I don't notice any problems with the car, such as the steering pulling, unusual tire wear, etc. Car has never had an alignment and just put new tires on it. Should I get an alignment even if there aren't any indications that it needs one? If it ain't broke, don't fix it? Or just go ahead and do it anyway?
by CULater
Sat May 30, 2020 5:52 am
Forum: Investing - Theory, News & General
Topic: “WHEN YOU'VE WON the game, stop playing with the money you really need.”
Replies: 233
Views: 23666

Re: “WHEN YOU'VE WON the game, stop playing with the money you really need.”

You'll want to read some of the writings of Robert Merton on the topic of life-cycle investing. He, in fact, is a leading authority on the matter. He is an advisor to DFA, which offers some products directed at liability matching so you'll want to research their offerings and counsel in this area. You should also look into using TIPS funds to duration-match instead of using TIPS ladders. There are some logistical problems with TIPS ladders, such as how to handle the reinvestment of interest payments. I had a TIPS ladder for awhile and this drove me nuts. Duration-matching with TIPS funds seems like a better way to go. Also, try to read Boglehead threads involving Bobk or bobcat2, who is the single most knowledgeable and articulate person ab...
by CULater
Wed May 27, 2020 8:09 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to figure out life annuity payment amount if purchased in the future
Replies: 6
Views: 553

Re: Trying to figure out life annuity payment amount if purchased in the future

I think the problem with this is that it would be based on a "deferred annuity" whereby you purchase now to start in 7 years. I don't want to purchase now; I plan to purchase in 7 years and know how much $$ I'll have as a lump sum then. I want to know what payments to expect in 2020 dollars and not 2027 dollars ("real" payments taking the present as the benchmark). I believe the best you can do is what you tried... you know the lump sum and pretend to be 7 years older, so it tells you what you'd get if you were buying it today. That exercise assumes EVERYTHING that goes into annuity pricing in 7 years is the same as today. So you can try adjusting for inflation over the next 7 years, what interest rates will be then, wh...
by CULater
Wed May 27, 2020 7:05 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to figure out life annuity payment amount if purchased in the future
Replies: 6
Views: 553

Re: Trying to figure out life annuity payment amount if purchased in the future

I want to estimate the payment amount for the purchase of a single premium immediate annuity if it is purchased 7 years from now. I'm using this tool to get an estimate. https://www.schwab.com/public/schwab/investing/accounts_products/investment/annuities/income_annuity/fixed_income_annuity_calculator In order to do this, I estimated the lump sum purchase amount I will have in 7 years and entered my birth date to make it appear that I'm 7 years older than I actually am and selected an immediate starting date. in my case I get an estimate of around $41K annually. I'm assuming this represents the payment I'd receive beginning immediately if I were 7 years older than I am now. But what I want is the payment amount I'd receive if I purchased t...
by CULater
Wed May 27, 2020 6:02 pm
Forum: Personal Finance (Not Investing)
Topic: Trying to figure out life annuity payment amount if purchased in the future
Replies: 6
Views: 553

Trying to figure out life annuity payment amount if purchased in the future

I want to estimate the payment amount for the purchase of a single premium immediate annuity if it is purchased 7 years from now. I'm using this tool to get an estimate. https://www.schwab.com/public/schwab/investing/accounts_products/investment/annuities/income_annuity/fixed_income_annuity_calculator In order to do this, I estimated the lump sum purchase amount I will have in 7 years and entered my birth date to make it appear that I'm 7 years older than I actually am and selected an immediate starting date. in my case I get an estimate of around $41K annually. I'm assuming this represents the payment I'd receive beginning immediately if I were 7 years older than I am now. But what I want is the payment amount I'd receive if I purchased th...
by CULater
Mon May 25, 2020 3:34 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

Yet another way to view bonds within a LDI framework is that the consumption (cash flow) goal is akin to a long term bond. The LDI strategy is designed to have the same interest rate sensitivity as the consumption goal. To the extent this is implemented effectively, this assures that the value of the bond portfolio moves in lockstep with the present value cost of funding the consumption goal. For example, if interest rates go up then the value of the bond portfolio goes down; but so does the present value cost of funding the projected consumption goal by a similar amount. And vice versa. That's the explanation for how "duration matching" works. Note that long bonds don't have less interest rate sensitivity (risk), per se, for inve...
by CULater
Mon May 25, 2020 2:46 pm
Forum: Investing - Theory, News & General
Topic: Why bonds may be the only thing propping up the stock market
Replies: 13
Views: 2141

Re: Why bonds may be the only thing propping up the stock market

One of the purposes IMO of FED policy since 2007 is to drive investor dollars from safe assets (bonds) into risk assets (stocks, real estate, venture capital, etc.,) in an attempt to stimulate economic growth, job creation, and support asset prices. Their actions in the GR and the COVID-19 recession have been necessary and have prevented the economic situation from getting worse. As SimpleGift and others have pointed out, this has been in general successful in supporting investment asset prices but not in producing robust economic growth. There are massive amounts of money out there looking for places to invest. Safe fixed income offers essentially zero expected real return going forward, so more of that money naturally flows toward risk a...
by CULater
Mon May 25, 2020 1:28 pm
Forum: Personal Consumer Issues
Topic: If Jeep has such poor reliability, how come they are everywhere?
Replies: 174
Views: 18198

Re: If Jeep has such poor reliability, how come they are everywhere?

The more I think about it, the more I'm coming around to the view that whatever you buy should be regarded as a disposable asset to be traded away sooner rather than later. If you do that before the warranty runs out, the the only downside is the risk of spending too much time in the Service area of the dealership (and also the annoyance of having to do so repeatedly). Every time there's some thing else the more you want to run the thing into a concrete wall. My mother hated her car so much that one time she left it overnight in a mall parking lot with the keys in hoping it would get stolen. But even the car thieves didn't want it. Harder to get away with something likethat nowadays without getting caught at it. Wonder about Jeeps?
by CULater
Mon May 25, 2020 1:17 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

Bond investment risk has different definitions and depends on investment goals. If the goal is capital preservation, then short duration bonds are less risky than long duration bonds. That's because the market value of short bonds is less affected by changes in interest rates than long bonds. For example, if I have $1,000 nominal and I want to assure that I'll still have that $1,000 predictably at my disposal at any time I should consider such investments alternatives as cash, a money market fund, or T-bills. I would not consider longer-term bonds. If the investment goal is targeted future consumption, then bonds with durations that precisely match consumption needs are less risky than short term bonds. For example, if my planned consumpti...
by CULater
Mon May 25, 2020 11:15 am
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

Bond investment risk has different definitions and depends on investment goals. If the goal is capital preservation, then short duration bonds are less risky than long duration bonds. That's because the market value of short bonds is less affected by changes in interest rates than long bonds. For example, if I have $1,000 nominal and I want to assure that I'll still have that $1,000 predictably at my disposal at any time I should consider such investments alternatives as cash, a money market fund, or T-bills. I would not consider longer-term bonds. If the investment goal is targeted future consumption, then bonds with durations that precisely match consumption needs are less risky than short term bonds. For example, if my planned consumptio...
by CULater
Sun May 24, 2020 2:30 pm
Forum: Investing - Theory, News & General
Topic: El-Erian comments on the crisis
Replies: 63
Views: 8152

Re: El-Erian comments on the crisis

He did suggest that quality--strong balances sheets with large cash reserves, reliable revenue and profit streams, moats around their business models--offers both downside protection and upside potential in this setting. This is something that most investors knew in the first place, which is why those stocks aren't cheap. For anyone considering buying some companies with good balance sheets, last month Goldman recommended the 11 largest stocks in Europe (in healthcare, consumer basics and tech) that have that characteristic: Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L'Oreal, LVMH, Astrazeneca, SAP, Sanofi. https://markets.businessinsider.com/news/stocks/goldman-sachs-investors-granolas-profit-economic-downturn-2020-4-10...
by CULater
Sun May 24, 2020 2:26 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

I've been taking a vacation from this thread for awhile and now that I'm back, I see we're still debating whether "interest rate risk" is absolute or relative. I'm in the camp that interest rate risk is an absolute characteristic of bonds and not contingent on who owns those bonds. Saying that interest rate risk is relative to different investors seems no different from saying that equity risk is relative to who owns the equities. That would seem to run contrary to how we view equity risk, and conflates the actual risk of the asset with the risk one is taking based on one's overall portfolio strategy and personal circumstances. Bonds have interest rate risk which varies with bond duration. In the world of factor investing, it's ca...
by CULater
Sun May 24, 2020 1:25 pm
Forum: Investing - Theory, News & General
Topic: El-Erian comments on the crisis
Replies: 63
Views: 8152

Re: El-Erian comments on the crisis

This is a good time to have "won the game", right Dr. Bernstein?
by CULater
Sun May 24, 2020 1:18 pm
Forum: Personal Consumer Issues
Topic: If Jeep has such poor reliability, how come they are everywhere?
Replies: 174
Views: 18198

Re: If Jeep has such poor reliability, how come they are everywhere?

So there's a Jeep cult like there is a Subaru cult?
by CULater
Sun May 24, 2020 10:13 am
Forum: Investing - Theory, News & General
Topic: El-Erian comments on the crisis
Replies: 63
Views: 8152

Re: El-Erian comments on the crisis

"You only get one whack at the cat." I observe lots of traffic at local restaurants, stores, etc. Most people not wearing masks or being careful about distancing. If cases and deaths spike up, will we just keep marching into the abyss, or will things have to shut down again? I guess it depends on how bad it gets. Sweden didn't shut down and only advised distancing and avoiding large groups. Now the worst per capita death rate in the world. Are we now on the path to being the next Sweden on steroids?
by CULater
Sun May 24, 2020 8:57 am
Forum: Investing - Theory, News & General
Topic: TIAA warns on negative yields on money market funds
Replies: 72
Views: 7526

Re: TIAA warns on negative yields on money market funds

jjustice wrote: Sat May 23, 2020 12:37 pm
livesoft wrote: Sat May 23, 2020 10:22 am TIAA needs to put a warning on their TIAA Real Estate Account as well.
https://www.sec.gov/Archives/edgar/data ... 20x10q.htm

See pp. 69-70.

John
Thanks for the link. Very concerning. I have carried about 30% of my TIAA in the TREA for years but at the beginning of this year I decided to drop that to 10% and then about a month ago to 5%. I didn't like the way it was slowly dropping. Fortunate timing it looks like. Now I wish I'd gotten out altogether. You can only transfer once per quarter, so I'd need to wait until July to transfer again. I could take some more out as a withdrawal so may just go ahead and do that.
by CULater
Sun May 24, 2020 8:05 am
Forum: Personal Consumer Issues
Topic: If Jeep has such poor reliability, how come they are everywhere?
Replies: 174
Views: 18198

If Jeep has such poor reliability, how come they are everywhere?

It seems that Jeep vehicles are nearly legendary for their poor reliability ratings, and yet I see them everywhere like dandelions. Why are they so popular when they have such a poor reputation? I'm wondering if I should consider buying one. The Grand Cherokee would be my choice. What do Bogleheads think?
by CULater
Sat May 23, 2020 10:23 pm
Forum: Investing - Theory, News & General
Topic: El-Erian comments on the crisis
Replies: 63
Views: 8152

Re: El-Erian comments on the crisis

His "Win-Win" description of the stock market explains to me why the market goes up when there is really bad news and why it goes up when there is some glimmer of hope news. If the news is lousy, that means the Fed will be popping in so that's good for stocks. If the news is hopeful that means we might get out of this so that's good for stocks. He makes it sound as if we should just hold our noses and dive into stocks - either way we'll make out. Mainstreet may not make out, but we fat capitalists are going to do OK.
by CULater
Sat May 23, 2020 9:43 pm
Forum: Investing - Theory, News & General
Topic: TIAA warns on negative yields on money market funds
Replies: 72
Views: 7526

Re: TIAA warns on negative yields on money market funds

Kinda looks like a money market fund to me:
The Fund seeks high current income consistent with maintaining liquidity and preserving capital. Generally it seeks to maintain a share value of $1.00 per share. The fund invests at least 99.5% of its total assets in cash, U.S. Government securities and/or repurchase agreements that are collateralized fully by cash or U.S. Government securities.
https://www.tiaa.org/public/investment- ... er=4530775
by CULater
Sat May 23, 2020 7:30 am
Forum: Investing - Theory, News & General
Topic: TIAA warns on negative yields on money market funds
Replies: 72
Views: 7526

Re: TIAA warns on negative yields on money market funds

packer16 wrote: Fri May 22, 2020 10:28 pm
CULater wrote: Fri May 22, 2020 9:37 pm Wonder what Vanguard is going to do? I'm not waiting to find out.
They have stopped new customers from opening new accounts in their treasury MMF.

Packer
I saw that. I wonder if it had anything to do with the fact that they saw negative yields coming.
by CULater
Fri May 22, 2020 9:37 pm
Forum: Investing - Theory, News & General
Topic: TIAA warns on negative yields on money market funds
Replies: 72
Views: 7526

Re: TIAA warns on negative yields on money market funds

Wonder what Vanguard is going to do? I'm not waiting to find out.
by CULater
Fri May 22, 2020 8:46 pm
Forum: Investing - Theory, News & General
Topic: TIAA warns on negative yields on money market funds
Replies: 72
Views: 7526

TIAA warns on negative yields on money market funds

Looks like negative rates may be coming sooner rather than later as giant TIAA warns.
TIAA has put a limited, short-term expense waiver in place to help prevent the CREF Money Market Account from having negative yields
https://www.tiaa.org/public/land/moneym ... t_18841162
by CULater
Fri May 22, 2020 2:40 pm
Forum: Personal Consumer Issues
Topic: Some possible luxury SUV choices to buy: Opinions?
Replies: 211
Views: 22937

Re: Some possible luxury SUV choices to buy: Opinions?

Are you also having issues with the infotainment system, too? From what I've read, that's where many of the owner complaints stem from. No problems with the infotainment system. Apple car play works flawlessly. I used the radar cruise control on a cross county trip with no issues. The lane keep, bird's eye camera, and other helper technology works as advertised. It's really a shame; the technology is great and the fit and finish of the exterior and interior is excellent. But mechanically, I don't know. After the fact, I read that some of the issues first cropped up in the 2019 RDX (redesign year?) and apparently were not resolved. I continue to work with the service department and have an open case with Acura. They insist that there is no ...
by CULater
Wed May 20, 2020 12:52 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

But that's not a risk-free assumption because LTT have much higher term risk than ITT.... My word, how many times can I repeat that THIS IS WRONG only for you to repeat it again? Long-term bonds do not, for long-term investors , have more interest rate risk than intermediate-term bonds. In fact, they have less. Once again, this is a highly misleading statement. Long duration bonds have more interest rate risk than shorter duration bonds. That's just a fact. What you are talking about is a strategy known as bond immunization . Bond immunization is an investment strategy used to minimize the interest rate risk of bond investments by adjusting the portfolio duration to match the investor's investment time horizon. To immunize a bond portfolio...
by CULater
Tue May 19, 2020 12:31 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

Oh, Well. One more time: Long term treasuries have had one advantage over intermediate treasuries over the last many decades. They had higher interest payments and they got a bigger boost from the trend of declining interest rates. If we broke out the partials due to these two factors, you would have explained all or nearly all of the risk-adjusted returns from long term treasuries vs. intermediate term treasuries. By the way, there wasn't much magic about re-balancing. It turns out that no matter what your rebalancing frequency was it allowed you to sidestep a couple of very large drawdowns in 2000-03 and 2007-08 that happened if you had allowed your stock allocation to drift too high by not rebalancing at all. Going forward, if you rebala...
by CULater
Tue May 19, 2020 11:09 am
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

I think you've got to be realistic about what returns to expect. The 20-year treasury now yields 1%. It's unlikely you'll ever make more than 20% off the money invested, and that will only happen if rates don't go up. If you hold that treasury for 20 years you'll make 1%/year in interest = 20%. Or if the 20-year interest rate drops to zero, you'll make 20% in capital gains if you sell them (20-year duration bond gains 20% for a 1% drop in interest rates). So, I wouldn't be hoping for high returns another decade or so. Most of the milk is gone... This is not at all true, you can make much more than that from a 1% yielding LTT bond fund, when paired with an equally volatile asset. All you need to do is re-balance on days like today when S&am...
by CULater
Tue May 19, 2020 9:42 am
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

I think you've got to be realistic about what returns to expect. The 20-year treasury now yields 1%. It's unlikely you'll ever make more than 20% off the money invested, and that will only happen if rates don't go up. If you hold that treasury for 20 years you'll make 1%/year in interest = 20%. Or if the 20-year interest rate drops to zero, you'll make 20% in capital gains if you sell them (20-year duration bond gains 20% for a 1% drop in interest rates). So, I wouldn't be hoping for high returns another decade or so. Most of the milk is gone... This is not at all true, you can make much more than that from a 1% yielding LTT bond fund, when paired with an equally volatile asset. All you need to do is re-balance on days like today when S&am...
by CULater
Tue May 19, 2020 9:13 am
Forum: Personal Consumer Issues
Topic: Some possible luxury SUV choices to buy: Opinions?
Replies: 211
Views: 22937

Re: Some possible luxury SUV choices to buy: Opinions?

UpperNwGuy wrote: Tue May 19, 2020 8:44 am
CULater wrote: Tue May 19, 2020 8:27 am Couple more to consider that will be coming out late this year or early 2021. Both the Kia Sorento and Jeep Grand Cherokee are coming out as completely new models and they both look great. I'll be waiting to look at these (Oh, I'm waiting anyway...)
I hear Honda is releasing a new generation of CRV for 2021. Do you know if that will have the same engine (and engine problems) as the current generation?
Interesting. But based on my experience I wouldn't touch any new engine they have for at least a couple of years. That's how long it took for the oil dilution issue to become known. It wasn't enough just to skip the first year of production.
by CULater
Tue May 19, 2020 8:27 am
Forum: Personal Consumer Issues
Topic: Some possible luxury SUV choices to buy: Opinions?
Replies: 211
Views: 22937

Re: Some possible luxury SUV choices to buy: Opinions?

Couple more to consider that will be coming out late this year or early 2021. Both the Kia Sorento and Jeep Grand Cherokee are coming out as completely new models and they both look great. I'll be waiting to look at these (Oh, I'm waiting anyway...)
by CULater
Mon May 18, 2020 5:19 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

Term risk is interest rate risk. EE Bonds have no term (interest rate) risk.
by CULater
Mon May 18, 2020 5:10 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 24956

Re: Rekenthaler: Long Bonds Are for Fools

Look at it this way. If I can manage to save an extra $500/month, that would be $6,000/year. In order to earn $6,000/year off long term bonds @ 1% I'd need to have $600,000 invested. Or if I could manage to set aside an extra $50/week that would match the interest payments from $260,000 in long term bonds. You see my point. The returns from long term bonds are so dismal you can pretty much beat them by saving your couch change and putting that into a money market fund, and that's a lot safer. Or, you could put that couch change into Series EE or I-Bonds -- even better. Your mistake is in thinking the money market fund is safer than long-term Treasury bonds: it’s not. And we already covered the savings bonds: they ARE long-term bonds in eff...