Search found 4135 matches

by Thesaints
Mon Jul 19, 2021 2:55 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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 Thesaints
Mon Jul 19, 2021 2:52 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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 Thesaints
Sat Jul 17, 2021 9:00 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

Re: When Does Dollar Cost Averaging Work?

It seems to me that selling at a single price is as risky as buying at a single price, though... If the assumption is that the market is rising 2/3rds of the time then generally selling as late as possible gives you the best outcome. The 1/3 risk doesn't change much... But the objective of DCA is p...
by Thesaints
Sat Jul 17, 2021 5:28 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

Re: When Does Dollar Cost Averaging Work?

It seems to me that selling at a single price is as risky as buying at a single price, though... If the assumption is that the market is rising 2/3rds of the time then generally selling as late as possible gives you the best outcome. The 1/3 risk doesn't change much... But the objective of DCA is p...
by Thesaints
Sat Jul 17, 2021 5:07 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

Re: When Does Dollar Cost Averaging Work?

It seems to me that selling at a single price is as risky as buying at a single price, though...
by Thesaints
Sat Jul 17, 2021 2:16 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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 Thesaints
Sat Jul 17, 2021 2:04 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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. Since your return is calculated as "present price/ac...
by Thesaints
Sat Jul 17, 2021 1:47 pm
Forum: Investing - Theory, News & General
Topic: How do you factor Rental Asset in Asset Allocation
Replies: 67
Views: 5002

Re: How do you factor Rental Asset in Asset Allocation

Question for the landlords out there. Rental assets have an estimated present value after accounting for mortgage and sales cost. Do any of you count that as a component of your diversified asset allocation and if so, does it impact your thinking w.r.t. the stock/bond ratio that you hold in traditi...
by Thesaints
Fri Jul 16, 2021 5:06 pm
Forum: Personal Investments
Topic: selling individual stocks to move to Vanguard
Replies: 5
Views: 613

Re: selling individual stocks to move to Vanguard

You could start by transferring your individual stocks to Vanguard; don't sell them yet.
by Thesaints
Fri Jul 16, 2021 11:45 am
Forum: Investing - Theory, News & General
Topic: When Bonds Beat Stocks, 1800-2020
Replies: 74
Views: 8214

Re: When Bonds Beat Stocks, 1800-2020

Indeed, the fundamental difference between something like a corporate bond and common stock in the same company is the bond holder, as a lender, is senior to the common stock holder, and therefore gets paid before the common stock holders out of any available cash. The common stock holders only get...
by Thesaints
Fri Jul 16, 2021 11:34 am
Forum: Investing - Theory, News & General
Topic: How Not to View Current Inflation
Replies: 96
Views: 11168

Re: How Not to View Current Inflation

That amounts to about 150,000 "missing people" in the future. Nothing that a tweak to immigration policies can't fix.
by Thesaints
Fri Jul 16, 2021 11:31 am
Forum: Personal Investments
Topic: 403b vs. 457b?
Replies: 29
Views: 2320

Re: 403b vs. 457b?

One can borrow from a 403b, but withdrawing from a 457b is penalty free. The catch is that you can't contribute withdrawals back in, whereas you can return the loan.
by Thesaints
Fri Jul 16, 2021 10:50 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

Re: When Does Dollar Cost Averaging Work?

Does dollar cost averaging work when selling? Is the answer the opposite of dca for buying? When buying one can take advantage of the asset volatility by investing the same amount repeatedly. His average acquisition price will be lower than the average asset price; more so the higher the asset vola...
by Thesaints
Fri Jul 16, 2021 9:45 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

Re: When Does Dollar Cost Averaging Work?

You're just changing the hypothetical. Maybe this will help. Assets are priced at $90 at Time 1. $100 at T2. $110 at T3. Investor A invests $100 at Time 1. Investor B invests $33.33 at each of T1, T2, and T3. Investor C invests $100 at T2. ...and Investor D invests $100 at T3. Or do you think lump-...
by Thesaints
Thu Jul 15, 2021 11:53 pm
Forum: Investing - Theory, News & General
Topic: When Bonds Beat Stocks, 1800-2020
Replies: 74
Views: 8214

Re: When Bonds Beat Stocks, 1800-2020

It seems to me that the data is justified by the bonds having become safer and safer assets during the XX Century. Just read the Count of Montecristo [spoiler warning] one of the plots concerns Spanish bonds tanking following a certain piece of news. Today, especially sovereign bonds, are so scrutin...
by Thesaints
Thu Jul 15, 2021 8:08 pm
Forum: Investing - Theory, News & General
Topic: AA as a function of goal balance not time/age
Replies: 30
Views: 2453

Re: AA as a function of goal balance not time/age

Let’s say one considers their retirement goal in terms of a multiple of a SWR required to meet obligations above SS or pensions. For simplicity let’s say they want 25x (4% SWR) and 40K per year or 1M total. Furthermore, let’s say the min/max AA is 50/50 and 90/10. Forgetting about personal perceive...
by Thesaints
Thu Jul 15, 2021 6:09 pm
Forum: Personal Investments
Topic: How to decide if/when to sell a position?
Replies: 51
Views: 3369

Re: How to decide if/when to sell a position?

Thesaints wonders: "Not sure I understand. Are you saying that when your individual stocks return more than the S&P over a certain period (plus maybe a fudge factor), then you sell ? Why don't you buy the S&P to begin with, then ? Or are you saying that when your stock underperform the...
by Thesaints
Thu Jul 15, 2021 6:05 pm
Forum: Personal Investments
Topic: Understanding Bond Fund Yields - Confused
Replies: 6
Views: 533

Re: Understanding Bond Fund Yields - Confused

I am trying to understand bond fund yields. I know share values will go up and down if interest rates go up and down. I also know that the share value will change based on the duration of the fund when interest rates change. When I look at the perspective for Vanguard Total Bond Fund (VBTLX) I see ...
by Thesaints
Thu Jul 15, 2021 5:48 pm
Forum: Personal Investments
Topic: How to decide if/when to sell a position?
Replies: 51
Views: 3369

Re: How to decide if/when to sell a position?

How would the S&P suggest you such a thing ? I'd see when the collective wisdom of the S&P 500 changes over some significant period of time (a year?) PLUS there are external factors which support the idea that the stock is reverting to the mean....If you have held it for, say, 5 years and i...
by Thesaints
Thu Jul 15, 2021 5:42 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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

I don't think they really know. It sounds like they're hoping isn't bad enough for them to do anything. I think, they're afraid of spooking markets. Maybe they don't know, but they are rooting for some mildly high inflation. That's the only way rates can eventually be increased without breaking the...
by Thesaints
Thu Jul 15, 2021 5:38 pm
Forum: Personal Finance (Not Investing)
Topic: How quickly did you receive your 2020 tax refund?
Replies: 282
Views: 25812

Re: How quickly did you receive your 2020 tax refund?

Mailed May 22nd. Refund due. IRS still has to acknowledge. I only hope it will be processed before Nov 1; we have 5k in Savings Bonds coming our way.
Last year we mailed on July 10th. Check was cashed within a couple of weeks, but IRS acknowledged our return only in March.
by Thesaints
Thu Jul 15, 2021 5:34 pm
Forum: Personal Investments
Topic: How to decide if/when to sell a position?
Replies: 51
Views: 3369

Re: How to decide if/when to sell a position?

Some of my positions, whether by dumb luck or not, look great (and I thank the advisor!) & significantly exceed the S&P 500 e.g. M'sft, TT, TSM, JPM and plan to hold them until the S&P 500 tells me that the collective wisdom suggests moving out of those stocks . Is using the S&P 500...
by Thesaints
Thu Jul 15, 2021 2:00 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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

Inflation, even when rampant, is inconsequential for the truly frugal BH-er !
by Thesaints
Thu Jul 15, 2021 1:57 pm
Forum: Personal Investments
Topic: How to decide if/when to sell a position?
Replies: 51
Views: 3369

Re: How to decide if/when to sell a position?

An investment advisor put me into Cisco about 6½ years ago and it has done OK. 

But since I became aware of the Bogle approach I have been reviewing my positions. Just a few days ago I compared Cisco to the S&P 500 against various time frames: - 3 months, - 6 months, - 1 year, - 3 years, - 6½ ...
by Thesaints
Thu Jul 15, 2021 1:24 pm
Forum: Personal Investments
Topic: Savings Bonds Annual Purchase Limit Enforcement
Replies: 7
Views: 753

Re: Savings Bonds Annual Purchase Limit Enforcement

I would take the US Treasury at their word that they will enforce the annual purchase limits. If you make multiple purchases and they total $10k, the system is going to prevent you from buying more than that in total. That could include barring further purchases from the repeat offender in the futu...
by Thesaints
Thu Jul 15, 2021 1:20 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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

I'm noticing a trend. 1. Inflation? What inflation? 2. Inflation is transitory. 3. Inflation is fine -- just like funemoployment! It makes your paycheck bigger. 4. It's likely transitory. 5. Next year inflation should run hotter than normal but the year after that will be lower and therefore within...
by Thesaints
Thu Jul 15, 2021 1:14 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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 Thesaints
Thu Jul 15, 2021 1:03 pm
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3497

Re: Performance of these assets /funds during inflation

Destiple wrote: Thu Jul 15, 2021 12:44 pm So long term treasuries are only useful when stock prices fall ?
Well, they are useful to match a long-term liability and, together with all other bonds, to balance a portfolio.
I don't think you can tell in advance stock prices will be falling, so that's not really a consideration to be made.
by Thesaints
Thu Jul 15, 2021 12:13 pm
Forum: Personal Investments
Topic: investment profile review
Replies: 83
Views: 3497

Re: Performance of these assets /funds during inflation

Long term treasuries are probably one of the worst purchases one can make when expecting increased, and unexpected, inflation.
Gold is pretty much uncorrelated to inflation.
by Thesaints
Thu Jul 15, 2021 12:10 pm
Forum: Personal Investments
Topic: Savings Bonds Annual Purchase Limit Enforcement
Replies: 7
Views: 753

Savings Bonds Annual Purchase Limit Enforcement

I have read reports, on this forum as well, about people who accidentally went over the 10k limit only receiving a notification from the Treasury, but otherwise being able to keep their bonds purchased in excess. Wondering if anyone on BH has any insight on the matter. Clearly, single purchase order...
by Thesaints
Wed Jul 14, 2021 9:05 pm
Forum: Personal Finance (Not Investing)
Topic: 10 years in and just going through the motions
Replies: 46
Views: 7539

Re: 10 years in and just going through the motions

That's the risk when picking a fulfilling career. If it does not fulfill anymore, there is only one way out.
Compare to making a career choice based on compensation. When motivation lacks one can always pursue more compensation.
by Thesaints
Wed Jul 14, 2021 6:49 pm
Forum: Investing - Theory, News & General
Topic: Historical Soc. Security COLA's Compared with Inflation?
Replies: 7
Views: 914

Re: Historical Soc. Security COLA's Compared with Inflation?

There is no such thing as "actual inflation". There are different indexes related to inflation and CPI-W is one of them. It is very similar to the more commonly quoted CPI-U, the small difference consisting in discounting the consumption cost of retirees and generally wealthier people.
by Thesaints
Wed Jul 14, 2021 6:16 pm
Forum: Personal Investments
Topic: 6-month emergency money idea
Replies: 19
Views: 1299

Re: 6-month emergency money idea

I'm deciding what to do with my "6-months of emergency money". I've read that normally, people use a money-market account for it. But I think if I put in a little work, I can get better interest. Here's what I'm looking at: Put 1 month of the money in a 6-month cd. Do this every month for...
by Thesaints
Wed Jul 14, 2021 6:05 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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 Thesaints
Wed Jul 14, 2021 11:21 am
Forum: Personal Investments
Topic: I need advice about the about the market timing thing
Replies: 40
Views: 2886

Re: I need advice about the about the market timing thing

gunnykiln1 wrote: Wed Jul 14, 2021 9:14 am Because I have this fear buying around a large peak would it be best to just leave it in cash for now and check it monthly for the correction that will eventually come?
Would you re-invest more lightheartedly if the market had been tanking ?
by Thesaints
Wed Jul 14, 2021 11:17 am
Forum: Personal Investments
Topic: Why take any risk when expecting a pension?
Replies: 68
Views: 8311

Re: Why take any risk when expecting a pension?

The S&P 500 returned >35% over the same fiscal year. They would have slightly beaten that 21.3% by simply holding a 60/40 portfolio.
Incidentally, CalPers target allocation is 58/42, but their ER is a lot higher than what a 60/40 institutional portfolio would cost...
by Thesaints
Wed Jul 14, 2021 10:49 am
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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. I'm talking about volatility of returns down the road. With DCA your entry point is, sim...
by Thesaints
Wed Jul 14, 2021 10:42 am
Forum: Personal Investments
Topic: Why take any risk when expecting a pension?
Replies: 68
Views: 8311

Re: Why take any risk when expecting a pension?

Many have asked, “how aggressive should I invest when I am expecting a pension when I retire?” The answer is usually something like, “you can afford to take big risk, but you ALSO can afford to take little risk, so do whatever feels right.” That makes sense to me.. but my question today is why shou...
by Thesaints
Wed Jul 14, 2021 10:35 am
Forum: Personal Investments
Topic: Dividend Stocks as Inflation Hedge?
Replies: 25
Views: 2068

Re: Dividend Stocks as Inflation Hedge?

Thank you for this insightful post. I was mainly curious to see what the arguments would be as to why dividend stocks might do well in an inflationary environment, as I couldn't think of any. These two points are exactly the kind of information I was hoping to learn. The (flawed) rationale is that ...
by Thesaints
Wed Jul 14, 2021 10:30 am
Forum: Personal Finance (Not Investing)
Topic: FIRECalc -- Question?
Replies: 7
Views: 1123

Re: FIRECalc -- Question?

I guess FireCalc considers a pension as a reduction in withdrawals, not as an asset.
by Thesaints
Tue Jul 13, 2021 10:49 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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 Thesaints
Tue Jul 13, 2021 6:48 pm
Forum: Personal Investments
Topic: Where did my sell go with Vanguard?
Replies: 10
Views: 942

Re: Where did my sell go with Vanguard?

Maybe the OP bought on margin...
by Thesaints
Tue Jul 13, 2021 6:46 pm
Forum: Investing - Theory, News & General
Topic: Writing covered calls.....free lunch?
Replies: 92
Views: 9264

Re: Writing covered calls.....free lunch?

Writing covered calls (as an investment method) is really one of the dumbest things an individual investor can do. One does not invest in stocks to make a few percent return, but to multiply their capital by a non-small factor, over a suitably long period of time. Capping the upside leaves them only...
by Thesaints
Tue Jul 13, 2021 6:40 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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

jebmke wrote: Tue Jul 13, 2021 5:43 pm 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 !
by Thesaints
Tue Jul 13, 2021 6:33 pm
Forum: Investing - Theory, News & General
Topic: When Does Dollar Cost Averaging Work?
Replies: 194
Views: 14526

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. If one's objective is shooting for the highest possible return, forget about DCA. In fac...
by Thesaints
Tue Jul 13, 2021 5:38 pm
Forum: Personal Finance (Not Investing)
Topic: Lost Wire Transfer [Money has been returned]
Replies: 64
Views: 6141

Re: Lost Wire Transfer

gobel wrote: Mon Jul 12, 2021 10:44 pm I always learned that Lincoln created the Secret Service (to address counterfeiting, not for fear of assassination). Maybe a musical is not the best source for US History.
Yeah! It appears that Wild Wild West is a more accurate source than Hamilton
by Thesaints
Tue Jul 13, 2021 4:20 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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

Obviously, none of us know if this is long or short term, but it was predicted by every person I spoke to about it over the last 18 months. Even a fifth grader knows instinctively that when you give money away for nothing, it loses value. :oops: Isn't demand pressure more a function of money veloci...
by Thesaints
Tue Jul 13, 2021 1:56 pm
Forum: Investing - Theory, News & General
Topic: Inflation for the month and year at highest rate in 13 years
Replies: 129
Views: 13016

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

By omitting the outliers one may miss actual inflation for a long time.
As things are now, we are half way to a >10% rate on Series I Savings Bonds come November 1st...
by Thesaints
Tue Jul 13, 2021 1:52 pm
Forum: Personal Finance (Not Investing)
Topic: Counteroffers [Employment]
Replies: 25
Views: 2353

Re: Counteroffers [Employment]

went to his current employer and flew the offer in their face, they countered as expected, and gave him a 30% raise and a 5% increase in bonus. I was quite surprised that this strategy worked and even that they upped his pay by such a big number. So the question - could this strategy work? Or do yo...
by Thesaints
Tue Jul 13, 2021 1:51 am
Forum: Personal Investments
Topic: Roth as EF?
Replies: 10
Views: 953

Re: Roth as EF?

What is wrong is that you would be keeping cash in a roth account; what a waste!
You want to use you roth space for the assets most likely to grow a lot, instead.