Search found 2521 matches

by NiceUnparticularMan
Sun Jul 25, 2021 8:47 am
Forum: Investing - Theory, News & General
Topic: Best inflation hedge besides gold, real estate, stocks, and crypto
Replies: 124
Views: 10122

Re: Best inflation hedge besides gold, real estate, stocks, and crypto

A few quick thoughts: (1) It is pretty important to distinguish expected inflation from unexpected inflation, and then short-term from long-term. Cash, for example, if by that one actually means very short-term Treasuries or such, has negative expected real returns over the short term these days. In...
by NiceUnparticularMan
Tue Jul 20, 2021 8:22 pm
Forum: Investing - Theory, News & General
Topic: Best inflation hedge besides gold, real estate, stocks, and crypto
Replies: 124
Views: 10122

Re: Best inflation hedge besides gold, real estate, stocks, and crypto

For those of us who aren't in a position to buy physical real estate anytime soon, would REITs be a decent alternative as an inflation hedge? REITs tend to converge on leveraged real estate returns in the long run (as one would expect), with more volatility in the short-to-medium term. With respect...
by NiceUnparticularMan
Tue Jul 20, 2021 1:55 pm
Forum: Investing - Theory, News & General
Topic: Best inflation hedge besides gold, real estate, stocks, and crypto
Replies: 124
Views: 10122

Re: Best inflation hedge besides gold, real estate, stocks, and crypto

Inflation hedges my wife and I use are Social Security, CPI indexed pension, TIPS (bonds and etfs), I-bonds, and a small holding in the TSP G Fund. Stocks are not an inflation hedge. The correlation between stocks and inflation is approximately zero. You cannot hedge inflation with an asset that ha...
by NiceUnparticularMan
Tue Jul 20, 2021 10:29 am
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 12672

Re: Inflation for the month and year at highest rate in 13 years

Just a really big picture observation: In a way we went through this before, as the mechanization of agriculture eliminated something like 90% of the jobs people had been working before then. But rather than that causing a permanent crisis of unemployment, it ultimately just freed up labor to do new...
by NiceUnparticularMan
Tue Jul 20, 2021 10:23 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

I disagree; the person should choose a different asset allocation. Easy example: Let's say stocks' expected return is 10% and bonds' is zero, to have round figures. A 70/30 AA has a 7% expected return. If I DCA into that AA over, let's say, 2 years, I give up one year worth of return from a 70% sto...
by NiceUnparticularMan
Tue Jul 20, 2021 10:19 am
Forum: Investing - Theory, News & General
Topic: Best inflation hedge besides gold, real estate, stocks, and crypto
Replies: 124
Views: 10122

Re: Best inflation hedge besides gold, real estate, stocks, and crypto

TIPS and eventually social security (CPI indexed). Social Security is a good one. Again it only covers itself, but you can juice that with deferring, and generally the amount of income it provides is consistent with a quite large asset allocation. Like as in if CPI-adjusted SPIAs even existed anymo...
by NiceUnparticularMan
Tue Jul 20, 2021 3:11 am
Forum: Investing - Theory, News & General
Topic: Best inflation hedge besides gold, real estate, stocks, and crypto
Replies: 124
Views: 10122

Re: Best inflation hedge besides gold, real estate, stocks, and crypto

As always I think this Vanguard white paper on unexpected inflation is well worth reading: https://advisors.vanguard.com/insights/article/IWE_InvResHwCmdtsStTIPSCmbtInfl Part of the point they make is while some sorts of assets are OK at protecting themselves from unexpected inflation, they are unli...
by NiceUnparticularMan
Tue Jul 20, 2021 2:26 am
Forum: Investing - Theory, News & General
Topic: The One-Fund Portfolio as a default suggestion
Replies: 444
Views: 100955

Re: The One-Fund Portfolio as a default suggestion

So my current plan is to simplify into a MOSTLY one-fund plan no later than retirement, but leave that portion of the taxable account that way, de facto balanced out with the TSP G Fund. The problem with "switching" to the one fund approach while hanging on to all the other funds is that ...
by NiceUnparticularMan
Tue Jul 20, 2021 1:58 am
Forum: Investing - Theory, News & General
Topic: Covid recession lasted just 2 months, shortest recession in U.S. history
Replies: 19
Views: 2465

Re: Covid recession lasted just 2 months, shortest recession in U.S. history

I think this underscores the fact that the technical definition of a recession includes only the period of decline, whereas the popular sense can include a lot of, possibly all of, the period following decline but before a return to "normal" economic conditions.
by NiceUnparticularMan
Tue Jul 20, 2021 1:55 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

I disagree; the person should choose a different asset allocation. Easy example: Let's say stocks' expected return is 10% and bonds' is zero, to have round figures. A 70/30 AA has a 7% expected return. If I DCA into that AA over, let's say, 2 years, I give up one year worth of return from a 70% sto...
by NiceUnparticularMan
Mon Jul 19, 2021 4:57 pm
Forum: Investing - Theory, News & General
Topic: The One-Fund Portfolio as a default suggestion
Replies: 444
Views: 100955

Re: The One-Fund Portfolio as a default suggestion

The idea of having an all-in-one fund in a taxable account is scary because: (1) It would be costly to change my mind in the future. You say that like it would be a bad thing! Yes. It's one thing to want to stay the course. But that doesn't mean you'd want to have no other choice, especially if it ...
by NiceUnparticularMan
Mon Jul 19, 2021 3:29 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

nigel_ht wrote: Mon Jul 19, 2021 3:22 pm Lol…DCA would have worked last week vs lump sum…
Tactical asset allocation is definitely easier with the benefit of hindsight!

But as usual, armed with that knowledge, you could have done much better than just DCA.
by NiceUnparticularMan
Mon Jul 19, 2021 3:19 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

When you sell at a single price you are actually adding volatility. I am not sure what you are claiming here. Investor A: Holds 100% stock at T0, holds it for 20 years. Investor B: Holds 100% stock at T0. Converts to 100% cash. Converts back to 100% stock three years later. Holds it for the remaini...
by NiceUnparticularMan
Sun Jul 18, 2021 12:53 pm
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3458

Re: Bond investing

So still trying to toy with the idea of a more conservative Portfolio BND total bond market 35 % or stable value fund VTI. US stocks 35% INternational stocks 15 %vsux gold 15% or should I consider I bonds Please feel free to criticize as viciously or brutally as you want Destiple, 1) Please explain...
by NiceUnparticularMan
Sun Jul 18, 2021 12:44 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Nigel, I believe that chart is from Big ERN. Isn't it illustrating a chunk put into bonds (rather than cash) and then transitioned into stocks quite gradually? For example, going from 60/40 to 100/0 at a rate of 0.3% per month (one of the more successful strategies depicted in the chart), takes ove...
by NiceUnparticularMan
Sun Jul 18, 2021 12:38 pm
Forum: Investing - Theory, News & General
Topic: Taxable Portfolio Samples for high income earners
Replies: 23
Views: 2403

Re: Taxable Portfolio Samples for high income earners

Munis? Meh. I put my fixed income in my 401k, in a stable value fund paying 1.8%. Which for those following the bouncing ball, exceeds the yield of TBM with its corporate bonds. Advantages: - Limits the growth of tax-deferred accounts and the coming doom of MRDs and future tax burden. - Higher yiel...
by NiceUnparticularMan
Sun Jul 18, 2021 12:13 pm
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3458

Re: Bond investing

Other than the difficulties of Treasury Direct and the purchase limits I don't know of many who speak poorly of I-bonds these days. So if you choose to go beyond BND they may be a good place to start. This is not necessarily a common opinion, but to me, particularly at current yield curves, holding...
by NiceUnparticularMan
Sun Jul 18, 2021 11:54 am
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3458

Re: Bond investing

So still trying to toy with the idea of a more conservative Portfolio BND total bond market 35 % or stable value fund VTI. US stocks 35% INternational stocks 15 %vsux gold 15% or should I consider I bonds Please feel free to criticize as viciously or brutally as you want Again I think you are makin...
by NiceUnparticularMan
Sun Jul 18, 2021 11:33 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Nigel, I believe that chart is from Big ERN. Isn't it illustrating a chunk put into bonds (rather than cash) and then transitioned into stocks quite gradually? For example, going from 60/40 to 100/0 at a rate of 0.3% per month (one of the more successful strategies depicted in the chart), takes ove...
by NiceUnparticularMan
Sun Jul 18, 2021 11:25 am
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3458

Re: Bond investing

So still trying to toy with the idea of a more conservative Portfolio BND total bond market 35 % or stable value fund VTI. US stocks 35% INternational stocks 15 %vsux gold 15% or should I consider I bonds Please feel free to criticize as viciously or brutally as you want Again I think you are makin...
by NiceUnparticularMan
Sun Jul 18, 2021 11:16 am
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3458

Re: Bond investing

Other than the difficulties of Treasury Direct and the purchase limits I don't know of many who speak poorly of I-bonds these days. So if you choose to go beyond BND they may be a good place to start. This is not necessarily a common opinion, but to me, particularly at current yield curves, holding...
by NiceUnparticularMan
Sun Jul 18, 2021 11:10 am
Forum: Investing - Theory, News & General
Topic: Taxable Portfolio Samples for high income earners
Replies: 23
Views: 2403

Re: Taxable Portfolio Samples for high income earners

I agree this should be done in light of the whole portfolio. However, I also believe mirroring rather than trying to guess at tax efficient allocation might be a good idea. Finally, I believe often a smaller allocation to the least risky assets might be the best risk management strategy, particularl...
by NiceUnparticularMan
Sun Jul 18, 2021 10:56 am
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3458

Re: Bond investing

My two cents is bonds are special purpose tools, and the purpose they serve is defined by the net bond posture you end up with. Meaning bonds with contradictory characteristics just offset. And in fact you should think of debt in this same context. Given that, Total Bond is basically an intermediate...
by NiceUnparticularMan
Sun Jul 18, 2021 10:36 am
Forum: Investing - Theory, News & General
Topic: Do you rebalance or not?
Replies: 64
Views: 5218

Re: Do you rebalance or not?

I don’t so much “re-balance”, but I do try to maintain balance by allocating new purchases to those sectors that are falling behind. This is tough enough to do for me as it seems one particular asset class has underperformed since I started investing, but still I try to stick to my chosen asset all...
by NiceUnparticularMan
Sun Jul 18, 2021 10:00 am
Forum: Investing - Theory, News & General
Topic: Do you rebalance or not?
Replies: 64
Views: 5218

Re: Do you rebalance or not?

I rebalance as long as I can do so without generating a tax bill. But I agree you don't need to. I purposely buy into higher volatility assets like SCV and rebalance into lower volatility assets if things get too far out of line. However, my annual contributions are a small percentage of my portfol...
by NiceUnparticularMan
Sun Jul 18, 2021 9:51 am
Forum: Investing - Theory, News & General
Topic: Do you rebalance or not?
Replies: 64
Views: 5218

Re: Do you rebalance or not?

High level observation: if you have a large enough portfolio relative to what you need to do with it, within a pretty broad range of reasonable allocation plans, very little will matter in terms of meeting those needs. Little bit lower observation but not much lower: so if you start with a large por...
by NiceUnparticularMan
Sun Jul 18, 2021 9:19 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Right, this is the same logic as behind the "bond tent" theory. And so this isn't really about what to do with a sudden increase in available funds. It is just a question of whether or not a bond tent is a good idea in general, however you got the funds you would be using for your bond te...
by NiceUnparticularMan
Sun Jul 18, 2021 9:15 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Nigel, I believe that chart is from Big ERN. Isn't it illustrating a chunk put into bonds (rather than cash) and then transitioned into stocks quite gradually? For example, going from 60/40 to 100/0 at a rate of 0.3% per month (one of the more successful strategies depicted in the chart), takes ove...
by NiceUnparticularMan
Sun Jul 18, 2021 9:07 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

The argument of DCA vs Lump Sum is very simple, but that doesn't mean its clear. Lump sum will come out ahead the majority of the time. Lump sum also has a higher risk of large losses. If the possibility of large losses would be catastrophic to your financial situation , you should consider DCA. No...
by NiceUnparticularMan
Sun Jul 18, 2021 9:00 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

What is your answer to the hypothetical? Investor A and Investor B live next door to each other. Investor A hears Investor B is going to DCA his $100K into his existing $900K Target fund over the next 2-3 years. If that is a good idea for Investor B, shouldn't Investor A take $100,000 out of his $1...
by NiceUnparticularMan
Sun Jul 18, 2021 8:54 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

DCA allows you to restrict the span of those possible return, in particular eliminating the very worst and the very best, at the price of lowering somewhat the expected value. Again, so does any scheme where you hold more cash for some period. For example, so does every three years, converting your...
by NiceUnparticularMan
Sun Jul 18, 2021 8:40 am
Forum: Investing - Theory, News & General
Topic: Do Indexers even need to pay attention to market valuation?
Replies: 166
Views: 14051

Re: Do Indexers even need to pay attention to market valuation?

So assuming a fixed savings plan (more in a moment), someone in accumulation who was wise enough to do something like just pick a low-cost Target fund from a reputable company as their savings vehicle definitely does not need to pay attention to market valuations. Or markets in general. All they nee...
by NiceUnparticularMan
Sun Jul 18, 2021 8:27 am
Forum: Investing - Theory, News & General
Topic: Gen-X Boglehead Thoughts
Replies: 110
Views: 16006

Re: Gen-X Boglehead Thoughts

At some point, though, we expect (hope?) that the taxable account will dwarf our tax-sheltered accounts, and we would run out of room in the tax-sheltered accounts to add more bonds. Curious why/how you expect your taxable account to dwarf the size of your tax-sheltered accounts. Assuming one maxes...
by NiceUnparticularMan
Sun Jul 18, 2021 7:59 am
Forum: Investing - Theory, News & General
Topic: Simple strategies for reducing inflation risk by Vanguard
Replies: 31
Views: 4617

Re: Simple strategies for reducing inflation risk by Vanguard

As a final thought--I keep thinking the really high takeaway here is on a portfolio level, you can't simultaneously protect against both unexpected disinflation/deflation and unexpected inflation. You can choose a neutral stance. You can choose to protect against one or the other. But you can't cho...
by NiceUnparticularMan
Sat Jul 17, 2021 4:06 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Does dollar cost averaging work when selling? Is the answer the opposite of dca for buying? So the basic reason DCA doesn't "work" when buying is assets with a positive expected return are more likely to increase in price over time. So, holding onto cash and waiting to buy tends to just m...
by NiceUnparticularMan
Sat Jul 17, 2021 3:58 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Or do you think lump-sum investors have a way to avoid market peaks ? No, of course not. The only point I was making is once you are done buying, whether the price you bought at was one price or the average of several prices does not matter. That is not correct. Volatility of Investor B is identica...
by NiceUnparticularMan
Sat Jul 17, 2021 3:17 am
Forum: Investing - Theory, News & General
Topic: Gen-X Boglehead Thoughts
Replies: 110
Views: 16006

Re: Gen-X Boglehead Thoughts

I'm nominal LTT and don't really believe in TIPS short, medium or longer term to beat inflation as people expect. I sure hope people don't expect TIPS to actually beat inflation at current rates! But are you suggesting an actual default on the promised inflation adjustments? Not a judgement against...
by NiceUnparticularMan
Fri Jul 16, 2021 6:08 am
Forum: Investing - Theory, News & General
Topic: When Bonds Beat Stocks, 1800-2020
Replies: 74
Views: 8140

Re: When Bonds Beat Stocks, 1800-2020

Investing in, say, bonds with a 1.3% yield is like purchasing an investment at 75x earnings, and one that unlike the "equity coupon" is fixed and knowable. Even at current rich equity valuations, I would take the bet any day that stocks will outperform an investment purchased at 75x earni...
by NiceUnparticularMan
Fri Jul 16, 2021 6:01 am
Forum: Investing - Theory, News & General
Topic: When Bonds Beat Stocks, 1800-2020
Replies: 74
Views: 8140

Re: When Bonds Beat Stocks, 1800-2020

Investing in, say, bonds with a 1.3% yield is like purchasing an investment at 75x earnings, and one that unlike the "equity coupon" is fixed and knowable. Even at current rich equity valuations, I would take the bet any day that stocks will outperform an investment purchased at 75x earni...
by NiceUnparticularMan
Fri Jul 16, 2021 5:36 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

You're just resisting the original hypothetical. You seem to think buying 50% at P1 and 50% at P2 is different from buying 100% at the average of P1 and P2. I can't figure out why you think that. If you buy 50% at P1 and 50% at P2 you are engaging in DCA. A lump-sum investor would buy 100% at P1 or...
by NiceUnparticularMan
Fri Jul 16, 2021 5:14 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

What is your answer to the hypothetical? Investor A and Investor B live next door to each other. Investor A hears Investor B is going to DCA his $100K into his existing $900K Target fund over the next 2-3 years. If that is a good idea for Investor B, shouldn't Investor A take $100,000 out of his $1...
by NiceUnparticularMan
Fri Jul 16, 2021 4:58 am
Forum: Investing - Theory, News & General
Topic: Gen-X Boglehead Thoughts
Replies: 110
Views: 16006

Re: Gen-X Boglehead Thoughts

Good point. A lot of stocks that used to be owned by pension funds will be divested to pay those pensions and will need to be purchased by individual investors whether through retirement plans or taxable accounts. Unlike the pre-2000s era, retirees no longer sit in 100% fixed income portfolios anyw...
by NiceUnparticularMan
Thu Jul 15, 2021 5:49 am
Forum: Investing - Theory, News & General
Topic: The One-Fund Portfolio as a default suggestion
Replies: 444
Views: 100955

Re: The One-Fund Portfolio as a default suggestion

etfan wrote: Thu Jul 15, 2021 12:06 am
The idea of having an all-in-one fund in a taxable account is scary because:

(1) It would be costly to change my mind in the future.
You say that like it would be a bad thing!
by NiceUnparticularMan
Thu Jul 15, 2021 5:29 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

That is not correct: Investor A does LSI at Price 1. Investor C does LSI at Price 2. Investor B does DCA at an intermediate price between Price 1 and Price 2 (and in fact a little closer to the lower of the two prices). Therefore, down the road, return for Investor A is Final Price/Price 1, return ...
by NiceUnparticularMan
Wed Jul 14, 2021 4:53 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

I'm talking about volatility of returns down the road. With DCA your entry point is, simplifying a bit, the average price during the DCA period. With LS is one particular price, which is expected to be lower than the average price, but it does not have to be. I honestly don't understand what argume...
by NiceUnparticularMan
Wed Jul 14, 2021 7:58 am
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 12672

Re: Inflation for the month and year at highest rate in 13 years

This is why the mass of bond buyers and sellers may be the best estimate of future inflation, albeit also a fuzzy estimate which could be wrong. Over the past 12 months the same mass of bond buyers has estimated 1.11% and 2.46% for the 5-year average inflation. They can't both be right ! Neither. A...
by NiceUnparticularMan
Wed Jul 14, 2021 6:35 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

I'd say DCA always works, just probably not as well as lump sum investing! :twisted: DCA's target is not to obtain a higher expected return, but a lower volatility, This simple fact seems to be ignored by most. Well, it is true that temporarily holding more cash in your portfolio will decrease expe...
by NiceUnparticularMan
Tue Jul 13, 2021 6:07 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

Thanks HootingSloth and bertilak. Yes I read the thread and the detailed study but saw the LSI advantage decreased at high valuations and of course over different time periods and starting points, etc. In the absence of knowing what the market will do going forward it goes to what approach we pysch...
by NiceUnparticularMan
Tue Jul 13, 2021 3:40 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 12672

Re: Inflation for the month and year at highest rate in 13 years

Not sure about the velocity aspect, but can't it be both more dollars and fewer goods at the same time? Anyway, it was very predictable without any understanding of economics. The unfortunate thing is it's a regressive tax that harms lower income people the most. Any harm to lower income people may...
by NiceUnparticularMan
Tue Jul 13, 2021 2:40 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14303

Re: When Does Dollar Cost Averaging Work?

So bottom line question - I have $100,000 I would like to invest to increase my stock allocation that I won't need to touch. So the forum consensus is despite the market at all time highs and all the high valuation metrics that exist I should just still simply ignore that and just LSI this full amo...