Search found 717 matches

by reln
Tue Dec 14, 2021 2:11 pm
Forum: Investing - Theory, News & General
Topic: For a 20-year time horizon do bonds make sense any more?
Replies: 100
Views: 7479

Re: For a 20-year time horizon do bonds make sense any more?

justsomeguy2018 wrote: Thu Mar 26, 2020 11:31 pm I guess this is "market timing" but with bond yields being low for the foreseeable future (and bond NAVs losing value if rates do in fact increase) and stocks being "cheap" (well, up until the last few days, possibly cheap again in a few days or weeks), would it make sense to shift into a more aggressive asset allocation (idk, 90/10) for the short-term foreseeable future until stocks reach their zenith again? Even if it takes 10-15-20 years, seems like you would come out further ahead in the long-run, assuming you held at 90/10 for a prolonged period until stocks recovered.
If very low returns are good enough for an investors purpose, yes. Otherwise, no.
by reln
Tue Dec 14, 2021 7:43 am
Forum: Investing - Theory, News & General
Topic: If you have won the game, how much risk do you take?
Replies: 188
Views: 23933

Re: If you have won the game, how much risk do you take?

After being here for over a decade I have now come to conclusion that when anybody announces their “x” as for example having 50x what they really mean is that they have 5million Reason for such assumption is that I know majority do not subtract the income stream aka social security or pension etc before coming with x. Besides they are worried that either of those streams will dry out before they reach there and just to be in safe side decide to ignore them Essentially x is a swag and settle on $100k as that number knowingly fully well they have lot of built in buffer Also it just feels little pretentious to announce I have $5millions but saying I have 50x seems much more discrete and polite way. Go ahead prove me wrong and tell me your x i...
by reln
Tue Dec 14, 2021 7:28 am
Forum: Investing - Theory, News & General
Topic: If you have won the game, how much risk do you take?
Replies: 188
Views: 23933

Re: If you have won the game, how much risk do you take?

TresBelle65 wrote: Sat Feb 29, 2020 3:41 pm A lot depends on how rich you want to try to be when you die.

What if I want to bounce the last check on the day before I die?

How should I proceed now ?
😆 put everything into a life only spia and get real good at spending each monthly payment by the end of the month?
by reln
Tue Dec 14, 2021 7:13 am
Forum: Investing - Theory, News & General
Topic: Morningstar article on Vanguard and the pressure it faces
Replies: 138
Views: 14772

Re: Morningstar article on Vanguard and the pressure it faces

Mr.BB wrote: Tue Dec 14, 2021 6:38 am https://www.morningstar.com/articles/10 ... st-its-way

Talks about Vanguards customer service issues and the costs problems it is having with competitors and index funds.
Complaining over a microscopic problem is embarrassing

MorningStar is being a typical news outlet and exaggerating to stay relevant.
by reln
Sun Dec 12, 2021 8:13 pm
Forum: Personal Investments
Topic: Should I capitulate to selling International?
Replies: 322
Views: 24152

Re: Should I capitulate to selling International?

When is it considered market timing to sell a losing fund vs smart asset allocation? In 2011 I wrote a plan to be 100% equity - 50% International (tilted toward emerging) and 50% US until I retired- at which point I would move to 90/10 Total Market. However I compared my returns to the market today and I feel really really dumb. My international has really not performed well. I would be retired by now if I had only dropped International before the 2013 runup or even in the beginning of 2020. Every year I look at the analyst opinions and they claim that international is undervalued. I kept thinking I’m investing for the long haul so in time it will average out. However after this point it would take truly stellar returns to catchup to how t...
by reln
Tue Dec 07, 2021 10:35 am
Forum: Investing - Theory, News & General
Topic: How would you evaluate the likelihood that the stock market is a good investment over a long time horizon, say 40 years?
Replies: 35
Views: 3825

Re: How would you evaluate the likelihood that the stock market is a good investment over a long time horizon, say 40 ye

How likely is it that the global stock market will be higher in 40 years than it is today? Are there fundamental reasons, other than looking to historical data, to assume this will be the case? And if not, how could or should this affect planning for retirement for young investors? Stock prices are based on earnings. If you don’t understand this relationship look up the dividend discount model. It can be hard to understand this fundamental relationship between stock price and earnings with all the noise. Suffice it to say the ratio between the stock price and earnings of public companies in aggregate has remained relatively constant for over a century. (There has been some modest growth in this ratio but it represents less than 5% of total...
by reln
Mon Dec 06, 2021 12:40 pm
Forum: Personal Investments
Topic: International Investment Alternatives -- Avantis and DFA ETFs
Replies: 17
Views: 3934

Re: International Investment Alternatives -- Avantis and DFA ETFs

UpperNwGuy wrote: Sat Sep 25, 2021 3:48 pm You are comparing apples to oranges. AVEM and VWO use different indices. AVEM includes South Korea, an economic powerhouse, as its third largest holding. VWO does not include South Korea. Vanguard puts South Korea into their developed market fund VEA rather than into VWO. Perhaps you should compare AVEM to the iShares ETF IDEV. I think they both use the same index.

I can't explain the difference between VEU and AVDE. Perhaps others know the reason.
AVEM doesn't track an index.
by reln
Fri Dec 03, 2021 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: At what net worth would you to be comfortable purchasing $3MM house? (given certain assumptions)
Replies: 230
Views: 20569

Re: At what net worth would you to be comfortable purchasing $3MM house? (given certain assumptions)

I have an informal survey that I'm hoping will help me figure out appropriate saving targets.. Given the following assumptions : - 45 years old - 22 years of high earnings - Moderate desire to quit current job, with a likelihood of never returning to anything lucrative - No pension or employer provided healthcare (after quitting) - Requirement to live in VHCOL area to be close to family - Desire to purchase a nice house on a large lot. Assume ~3-4 bedroom, 2.5 bath, 2200 sq ft. - Excluding potential housing and healthcare costs for 2 people, other expenses/travel/hobbies aren't expected to exceed $60k/year total - Net worth is accessible and invested sensibly for long term growth (60-70% in low cost equity index funds) What is the lowest t...
by reln
Fri Dec 03, 2021 7:15 pm
Forum: Investing - Theory, News & General
Topic: Why doesn’t everybody factor invest? (If it has better risk-adjusted returns, then why not?)
Replies: 152
Views: 13139

Re: Why doesn’t everybody factor invest? (If it has better risk-adjusted returns, then why not?)

larsnyborgpedersen wrote: Tue Nov 30, 2021 6:09 am Why doesn’t everybody factor invest?
Is it because it only has better risk adjusted returns under the flawed CAPM model and actually would have similar risk adjusted returns under a five factor model?
Or why?
Not every one believes in factor investing. And there are several factor models. And there are many versions of each factor.

Additionally, the factor premiums that were discovered in the Fama and French papers are at this point known to have been significantly overstated. If the analysis were reformulated with small changes in definitions, the premiums almost always decrease on average by about 40% per year.
by reln
Fri Dec 03, 2021 7:05 pm
Forum: Personal Investments
Topic: Robo-Advisors @ Schwab vs Vanguard
Replies: 36
Views: 5455

Re: Robo-Advisors @ Schwab vs Vanguard

First, I'd like to extend my thanks to all contributors to this forum for the YEARS of education I've received. I'd like to ask a questions about regarding my Managed accounts at Schwab and Vanguard. In January 2019 after many years of managing my own IRAs and Taxable accounts (which were mainly held at Vanguard) I decided to transition to Robo-Advisors, namely Vanguard's Personal Advisor Service (paying 0.30%) and Schwab Intelligent Portfolio. Shortly after I started at Schwab, their fee structure changed and it's "free". I split my assets down the middle, allowing Vanguard and Schwab to manage 50% each. AA was set at 60/40 however ... and this is the primary reason I am asking my question ... at Schwab the Intelligent has 8% si...
by reln
Wed Dec 01, 2021 8:32 pm
Forum: Personal Investments
Topic: Should I include social security in my retirement planning?
Replies: 80
Views: 7156

Re: Should I include social security in my retirement planning?

Fran K wrote: Wed Dec 01, 2021 8:16 pm I'm 38 and am wondering what your thoughts are around including social security in my retirement planning. Is it unreasonable to expect socal security to be paying at the same levels as it is now by the time I am 70?

Tangential question: what's the best way to estimate ss benefits if I'm likely to not have ss income for a full 35 years before I take ss?
The SS website has calcs that can answer that for your record.
by reln
Wed Dec 01, 2021 8:29 pm
Forum: Investing - Theory, News & General
Topic: If 30 years treasuries went to 10% would you put all your money in them? If not tell me why?
Replies: 44
Views: 4296

Re: If 30 years treasuries went to 10% would you put all your money in them? If not tell me why?

EfficientInvestor wrote: Wed Dec 01, 2021 12:26 pm No. Generally speaking, if interest rates rise, the expected return of stocks would rise along with them. Therefore, the expected return of stocks would also be 10%+ in this hypothetical situation and you would still receive benefit from diversifying among stocks and bonds.
Exactly
by reln
Mon Nov 29, 2021 5:35 pm
Forum: Investing - Theory, News & General
Topic: Vanguard China Select Stock Fund
Replies: 67
Views: 6696

Re: Vanguard China Select Stock Fund

Hi: Press release: Vanguard Announces Plans to Launch Active China Equity Fund Vanguard today filed an initial registration statement with the U.S. Securities and Exchange Commission to introduce Vanguard China Select Stock Fund. The fund will invest in both onshore and offshore Chinese equities and is intended for clients seeking actively managed, high-alpha-target equity exposure to complement a broadly diversified portfolio. Vanguard expects to launch the fund in the first quarter of 2022. Vanguard believes that exposure to China is an important part of both the equity and fixed income allocations of a globally diversified portfolio. China is a significant and growing portion of the global equity market, representing the second largest ...
by reln
Sun Nov 21, 2021 5:35 am
Forum: Investing - Theory, News & General
Topic: I Just Don’t Understand ETFs
Replies: 172
Views: 18478

Re: I Just Don’t Understand ETFs

Northern Flicker wrote: Sun Nov 21, 2021 1:55 am
rascott wrote: Sun Nov 21, 2021 1:18 am Mutual funds are an antiquated financial product. I see little reason for them to exist for index investors
401K's?
401ks could have (lower cost) ETFs instead of mutual funds.
by reln
Sun Nov 21, 2021 5:10 am
Forum: Personal Finance (Not Investing)
Topic: How much minimum balance is too high for free checking?
Replies: 19
Views: 1574

Re: How much minimum balance is too high for free checking?

cabfranc wrote: Fri Nov 19, 2021 3:51 pm If you do not have a direct deposit, most banks require a minimum balance in checking or linked accounts to get free checking, and in some cases other perks, like free non-bank ATM withdrawals. Given online banks like Ally which have no minimums for checking and pay high interest on savings, how much is too much to keep in a .01 checking or savings account to get free checking?
Any minimum balance above 0 is too high.
by reln
Sun Nov 21, 2021 5:08 am
Forum: Investing - Theory, News & General
Topic: I'm a true Boglehead, but it's time for me to be reminded... why isn't real estate better?
Replies: 178
Views: 22819

Re: I'm a true Boglehead, but it's time for me to be reminded... why isn't real estate better?

What's interesting to me is how they start selling them off as they get older, and usually get completely out of the rental business at some point. Well, you can’t eat equity. If the majority of your wealth is tied up in property, you have to either sell or refi to unlock the cash. Nursing homes are expensive, I hear — can’t cover that cost from just the cash flow from the rentals. One must also consider whether heirs will manage rentals. Most won’t. Converting to cash makes it easier. When I croak, everything left over goes to two charities that I don’t want to burden with having to sell homes spread across three states. So yes, I’ll absolutely sell a property every so often to refill the cash/securities bucket. It’s just part of my AA gl...
by reln
Sun Nov 21, 2021 5:06 am
Forum: Investing - Theory, News & General
Topic: I'm a true Boglehead, but it's time for me to be reminded... why isn't real estate better?
Replies: 178
Views: 22819

Re: I'm a true Boglehead, but it's time for me to be reminded... why isn't real estate better?

So I'm sitting here playing with the numbers. I've been investing Boglehead style for 10 years, dedicated, I can handle downturns (didn't sell during Covid panic) so take that into account as I ask this please. Let's say you are deciding whether or not to buy more index funds, or get a rental property. In my area (sadly) a rental property would be about $600k. Here are the two scenarios. In order to buy a house, all you need is a 20% down payment, which would be $120,000. That's the "lost" money if you buy a house. Let's pick a period of 15 years to see which option performs best. Option A: Buying more index funds. $120,000 invested, after 15 years at a growth rate index fund style of roughly 6.5%, would be ~$320,000 . Simple mat...
by reln
Sun Nov 21, 2021 4:51 am
Forum: Personal Finance (Not Investing)
Topic: How has inflation changed your expense/spending strategy?
Replies: 237
Views: 24090

Re: How has inflation changed your expense/spending strategy?

sents13 wrote: Mon Nov 15, 2021 10:51 pm Inflation does not seem to want to go away anytime soon. Despite what the consensus was 6mths ago, the inflation effects are not "temporary". Has that changed your expense/spending strategy?

Does it make sense to "pre-buy" stuff for the next 1 year to convert money into "real stuff"? In anticipation of supply chain disruption and shocks (either a continuation of the current situation or worsening), I'm thinking of stocking up 6-12mth of food and other daily necessities as much as I can, because these items will only be more expensive half a year down the road.
Sounds silly.
by reln
Sun Nov 21, 2021 4:48 am
Forum: Personal Consumer Issues
Topic: Cash Back and Rewards Cards - Just Say No?
Replies: 237
Views: 19754

Re: Cash Back and Rewards Cards - Just Say No?

I wasn’t going to admit this to you all, but I guess it’s time. I don’t use cash back or rewards credit cards. I use an Amex green charge card with a $55 annual fee (grandfathered) and I don’t even do membership rewards. I have some bank debit cards with a credit feature but I never incur interest. My reasoning is that I want to limit any incentives to spend. I used to have certain airline and hotel loyalty cards from when I traveled a lot and I used to have an Amex corporate card at my old job. My Amex was involved in the foreign currency transaction fee litigation and my reimbursement was FAR less than expected. One of my travel cards - to which I dutifully submitted flight and hotel receipts for years - changed its terms and my miles ex...
by reln
Fri Nov 19, 2021 6:48 am
Forum: Personal Investments
Topic: how much do you need to retire?
Replies: 63
Views: 10769

Re: how much do you need to retire?

capcase wrote: Fri Nov 19, 2021 2:00 am i feel the number is doubled after Fed printed so much money.

is there a good calculator online based on area? i know everyone's lifestyle is different.
So your inflation has been 100%?
by reln
Fri Nov 12, 2021 12:49 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Personal Advisor Services Introduces Five-Fund Active Equity Offer
Replies: 168
Views: 15078

Re: Vanguard Personal Advisor Services Introduces Five-Fund Active Equity Offer

Lastrun wrote: Tue Nov 09, 2021 8:02 pm
Nate79 wrote: Tue Nov 09, 2021 7:53 pm …….plus PAS charges you are now at >0.7% expenses?

Really rethinking any recommendations for my spouse, if I pass, to call up and use PAS……..
Same here. My thoughts exactly. Very distressing.
Very distressing is an exaggerated reaction.
by reln
Sat Nov 06, 2021 3:17 am
Forum: Personal Investments
Topic: Help me understand SWR rate
Replies: 162
Views: 11994

Re: Help me understand SWR rate

Hi All, I plan to retire end of next year and anticipate I will have about $2.95MM in tax-deferred accounts (for now, disregard SS and taxable accounts). If I assume a 4% real return, and a withdrawal period of 35 years (retire at 55, live until 90), Excel's PMT formula shows a monthly withdrawal before taxes of $13,062. I am definitely confusing myself here, but can you explain how this works vis a vis a SWR of, for example, 4%? You can educate yourself on financial planning. It might be worth studying for something like a CFP exam (no need to take it). But if you want to do this solo, get some real education. What you'll get here is watered down advice on par with a TikTok. Or it might be worth consulting with a vanguard Personal Advisor...
by reln
Thu Oct 14, 2021 12:43 pm
Forum: Investing - Theory, News & General
Topic: Why do people have financial/wealth/portfolio managers?
Replies: 103
Views: 12804

Re: Why do people have financial/wealth/portfolio managers?

Hi, So I see a few post every day asking about financial/wealth/portfolio managers, that is, people who make investments decisions for you. And it seems whenever I go to parties (not that often now) that people are very happy with their money managers. I must be missing something but in this age of ultra-cheap index funds why would you use a money manager? My understanding is that no manager could out-perform a good balanced index portfolio. Further, no one will look after your money better than you will. Even if you are ultra-busy, not too-bright etc. why not use a 3 fund portfolio. Please enlighten me why you use a money manager rather than handling your money yourself? I'm genuinely curious and eager to learn why. Your assumptions are w...
by reln
Thu Oct 14, 2021 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: How do I calculate the probably of two events both happening?
Replies: 49
Views: 3771

Re: How do I calculate the probably of two events both happening?

Gardener wrote: Thu Oct 14, 2021 11:27 am I am terrible at math. I guess you would call this an insurance type question. I looked online and still not sure if I am doing it right. How do I calculate the probability in fraction and percent of two events BOTH happening?

22% chance that event A happens

AND

1/2% chance that event B happens

Thank you
Pr(A and B) = Pr(A given B) × Pr(B)
by reln
Wed Oct 13, 2021 9:23 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement with zero stock/bond market risk
Replies: 101
Views: 9358

Re: Retirement with zero stock/bond market risk

In theory, if a person has enough saved at retirement to cover their inflation-adjusted expenses over their estimated lifetime, they would not have to take any stock market risk with their savings, and would have no sequence of returns risk since there is no reliance on market returns. That zero market risk approach always seemed appealing to me and that's what I have been aiming for. I'd like to be done with worrying about markets, especially in the early retirement years. In the most basic form (i.e. assume zero social security benefit and zero return on your cash portfolio), if you retire having $40k in annual living expenses, a 40 year retirement timeline, and assume 2.5% inflation, then I think you can use the FV() function in excel t...
by reln
Wed Oct 13, 2021 7:49 am
Forum: Personal Finance (Not Investing)
Topic: Retirement with zero stock/bond market risk
Replies: 101
Views: 9358

Re: Retirement with zero stock/bond market risk

In theory, if a person has enough saved at retirement to cover their inflation-adjusted expenses over their estimated lifetime, they would not have to take any stock market risk with their savings, and would have no sequence of returns risk since there is no reliance on market returns. That zero market risk approach always seemed appealing to me and that's what I have been aiming for. I'd like to be done with worrying about markets, especially in the early retirement years. In the most basic form (i.e. assume zero social security benefit and zero return on your cash portfolio), if you retire having $40k in annual living expenses, a 40 year retirement timeline, and assume 2.5% inflation, then I think you can use the FV() function in excel t...
by reln
Tue Oct 05, 2021 9:34 pm
Forum: Personal Finance (Not Investing)
Topic: Arguement to draw social security asap ?
Replies: 51
Views: 4801

Re: Arguement to draw social security asap ?

Silk McCue wrote: Tue Oct 05, 2021 1:36 pm
reln wrote: Tue Oct 05, 2021 12:51 pm
Your concerns are all valid.

The benefits of delaying are, in my opinion, greatly over stated. They usually ignore that utility of money declines rapidly around age 80.
Only if you have “more than enough” to meet every need. Needs that may not show up until your 80s or 90s. If you don’t have “more than enough” then you may suffer a lower standard of living and quality of life. Or worse than that; a poor decision at 62 comes to roost on your surviving spouse once you pass and they bear the brunt of that decision.

Cheers
This is the type of worst case scenario that gets people overly fearful and saving too much and enjoy too little.
by reln
Tue Oct 05, 2021 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: Arguement to draw social security asap ?
Replies: 51
Views: 4801

Re: Arguement to draw social security asap ?

I've seen the points made about SS benefit increasing fairly dramatically for each year delaying the start of benefits receipt. A very basic calculation shows that by age 78, the total of benefits received by the person who delays start of benefits until age 70 versus starting at 62 becomes the larger amount. But if I build a model showing SS benefit being invested at some modest return like 5%, the person who starts at age 62 actually has a greater future value at most final age scenarios. Whether I live off social security benefits, or other investments, its the same this right? The one I'm not living off can be invested an earn that same 5% I do have a 6 years younger wife who my income was 3 or 4 times as much as, so I understand waiti...
by reln
Tue Oct 05, 2021 10:06 am
Forum: Personal Investments
Topic: Market or Limit?
Replies: 58
Views: 6362

Re: Market or Limit?

DLAKE wrote: Tue Oct 05, 2021 9:46 am Just curious what the community does when buying VTI in taxable for a long term investment on a consistent manner. Do you typically purchase with a limit order or market order?

I ask because I had a limit order this AM and feel like I would’ve benefited more if I had just used a market order as VTI has increased quickly. Just wondering if there is a significant benefit in doing one or the other.
It's up to you.

If all you care about is execution, use market.

If you want to take the risk of not buying in exchange for potentially a lower purchase price, use 60 day limit.
by reln
Mon Oct 04, 2021 8:06 pm
Forum: Investing - Theory, News & General
Topic: Reduce Exposure to Tech Giants
Replies: 39
Views: 4671

Re: Reduce Exposure to Tech Giants

waterwell wrote: Mon Oct 04, 2021 7:46 pm I want to reduce my exposure to large tech companies as I think they are overvalued. The point of this post is not to debate that point. I realize I could be wrong, I could be right. Nobody knows nothing.

Any recommendations on how to reduce (not eliminate) exposure to large tech companies (Facebook, Google, Amazon, Tesla, etc) through investing in index funds?
Buy any non US large cap growth fund. Some examples are exUS funds, small cap and value funds, and non stock funds.
by reln
Sun Oct 03, 2021 9:17 am
Forum: Investing - Theory, News & General
Topic: Why are Bogleheads not common in the wild?
Replies: 133
Views: 15394

Re: Why are Bogleheads not common in the wild?

I found this forum a few years ago in my mid-twenties (I'm now 29) and it feels like I discovered a secret I wasn't supposed to find. After reading thousands of pages here, all I have to do is execute some very basic things and I will be set for life at an unreasonably young age. I have yet to meet anyone in my age group or career field (finance, surprisingly) who follows this style of investing, bar several girlfriends I converted. I suppose I don't understand why Bogleheads style investing isn't more common. It seems to be the most logical and base route to wealth accumulation for most people. Why is it more common for smart people (and endowments, pensions, nearly everyone) to pick stocks, pay high fees, pay hedge fund mangers, time the...
by reln
Thu Sep 30, 2021 5:33 pm
Forum: Personal Investments
Topic: Will I be in trouble retiring early?
Replies: 111
Views: 21496

Re: Will I be in trouble retiring early?

Hello, I am 43 single with no kids and intend to stay that way. My total net worth is $2.628 million however $1.12 million is my home where I live in the Bay Area(California). $74k in IRA. $207K in 401k. $1.4 million investments with 75% stock vs 25% bond split. I worked for Amazon and never sold the stock I got as RSUs and there 40% of my investment is in that stock. My expenses are not very high and I believe that with about $400/month for health insurance, $200/month for home + auto + umbrella insurance, $300/month utilities and $500/month for food should put me at about $1400. Property tax and HOA is another $1000/month. So overall that puts me at close to $2500/month. My home mortgage still has $175k left. I will have to pay $2750/mon...
by reln
Thu Sep 30, 2021 7:56 am
Forum: Personal Finance (Not Investing)
Topic: How often do you requote your [Life, Disability] insurance?
Replies: 10
Views: 1054

Re: How often do you requote your insurance?

sbruner wrote: Wed Sep 29, 2021 11:13 am I wanted to increase the life insurance for my wife and me, so I had our Life Insurance requoted. We purchased our current plan five(5) years ago, and the new quote was less money per month for more coverage.

Then I had my disability income insurance requoted, which was a savings of almost $700 a year.

I'm just curious how often Bogleheads get their insurance requoted.
For my term insurance I look up term4sale.com.

For home, auto, umbrella, etc, I quote once a year.
by reln
Thu Sep 30, 2021 7:46 am
Forum: Personal Investments
Topic: Vanguard recommends a 90% stocks/10% bonds allocation for someone 29 years old?
Replies: 41
Views: 6003

Re: Vanguard recommends a 90% stocks/10% bonds allocation for someone 29 years old?

My understanding is that asset allocation is the only way to control investment risk. Taking more risk doesn’t always lead to better returns. Vanguard recommends a 90% stock/10% bond allocation for my 29 year old son, which seems very aggressive. That works great during a bull market, but not so great during a prolonged bear market. I suppose that might be okay for the people who could stay-the-course during a sell-off like the one on March 23, 2020, but many investors don’t understand their risk tolerance and subsequent reaction until a major sell-off happens. Too often that leads to investors selling at the worst possible time and getting back in the market after stocks have had a big run-up. Am I seeing this clearly or is there somethin...
by reln
Wed Sep 29, 2021 8:20 pm
Forum: Investing - Theory, News & General
Topic: Do you rebalance in non-retirement accounts?
Replies: 22
Views: 2007

Re: Do you rebalance in non-retirement accounts?

LMK5 wrote: Wed Sep 29, 2021 12:57 pm I have found that most of my stock fund holdings are in my non-retirement accounts at this time. The obvious issue when rebalancing funds in non-retirement accounts is the tax consequences. If you find that you don't have adequate stock holdings in your retirement accounts in which to sell for rebalancing, do you refrain from rebalancing (selling stock funds) in your non-retirement accounts or do you go ahead with the needed transaction and just pay the tax?
Only when I have tax-losses to offset.
by reln
Wed Sep 29, 2021 3:51 pm
Forum: Personal Finance (Not Investing)
Topic: To be or not to be - MD vs Computer science
Replies: 358
Views: 33075

Re: To be or not to be - MD vs Computer science

vk22 wrote: Sun Sep 26, 2021 9:16 am Hi All,

I am advising a high school sophomore on deciding his career choice. He wants to go for either
(1) a BS/MD option, which is very competitive or,
(2) Computer science undergrad, then MD

Good student, smart with very strong work ethic, good social skills, entrepreneurial, motivated strongly by money in making choices. Indian American.

Will a medical degree in a strong specialty work to his motivation of making money? Or should he stick with CS and try to be an entrepreneur?
Why not focus on related subjects? Bio, chem, phys, etc?
by reln
Wed Sep 29, 2021 3:49 pm
Forum: Investing - Theory, News & General
Topic: What Vanguard fund should I put my home downpayment in?
Replies: 10
Views: 1889

Re: What Vanguard fund should I put my home downpayment in?

oxband wrote: Wed Sep 29, 2021 3:23 pm We've saved up money for a downpayment for a house. We're not buying today....but keeping it for a purchase in the next year or two. What fund in Vanguard should I put this in so I get a touch of interest while it's sitting around? My guess is a bond fund (although tell me if i'm wrong) and if a bond fund, any suggestions for which one?
None. Open a CD or an online savings.
by reln
Wed Sep 29, 2021 2:58 pm
Forum: Investing - Theory, News & General
Topic: Adjust Asset Allocation When Markets Are Over Valued
Replies: 48
Views: 5139

Re: Adjust Asset Allocation When Markets Are Over Valued

invest2bfree wrote: Tue Sep 28, 2021 8:22 am Bogle goes into how he would allocate from 65/35 to 50/50 when you have extreme over valuation-

https://youtu.be/k6ra5POdsYg

Does any one follow any rules of them on allocation?

Benjamin Graham advised to have 50/50 as your default allocation. Then go to 75/25 when markets are over sold and 25/75 when markets are over valued.

What is your Asset Adjustment strategy if you use one?
No. I stick with 100% stock all the time. What I have done is rotate between stock funds leaning towards value funds or to growth funds on the edges.
by reln
Mon Sep 27, 2021 7:53 am
Forum: Investing - Theory, News & General
Topic: Vanguard Capital Markets Model - So Wrong for So Long
Replies: 66
Views: 7830

Re: Vanguard Capital Markets Model - So Wrong for So Long

Taylor Larimore wrote: Sat Sep 25, 2021 2:18 pm happyjuice8000:

I have been a Vanguard investor for 34 years. I, too, have been surprised to see Vanguard "always predicting non-US equities to vastly outperform US equities." They should be embarrassed.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom (2018): "I'm inclined to stick by my earlier conclusion that holdings of non-U.S. stocks should be limited to no more than 20% of equities."
US outperformance is an anomaly based mostly on multiple expansion, not US companies having better fundamentals. Betting this outperformance will persist indefinitely is betting on some anomalous combination of continued multiple expansion and US companies' unexpected positive fundamental surprises.
by reln
Sun Sep 26, 2021 6:04 pm
Forum: Investing - Theory, News & General
Topic: Most people [Is TSM not the best choice for informed investors?]
Replies: 152
Views: 13547

Re: Most people

Much of the "total market" advice talks about TSM being best for "most people." Well, 51% is most. Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice? Asking for a friend. If you're smart enough to beat the market or if you're willing to take the risk of underperforming to beat the market, then you should try to beat it. For everyone else that isn't either smart enough or risk taking enough, TSM is a fine solution. Thus my question "Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice?" If not, how DO I get there? That's for the individual to decide. My hunch is no. Also, I'd say 49% is generous. Maybe more like 0.01% of people are s...
by reln
Sat Sep 25, 2021 2:35 pm
Forum: Investing - Theory, News & General
Topic: Proof that nobody knows nothing [Hamster Performs Better Than Warren Buffett And The S&P 500]
Replies: 28
Views: 5360

Re: Proof that nobody knows nothing

ApeAttack wrote: Sat Sep 25, 2021 2:30 pm Weird that it follows bitcoin so closely.
That's because it "invests" in cryptos.
by reln
Sat Sep 25, 2021 2:09 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Capital Markets Model - So Wrong for So Long
Replies: 66
Views: 7830

Re: Vanguard Capital Markets Model - So Wrong for So Long

I have been reading the Vanguard Capital Markets Model® (VCMM) white paper for many years, perhaps as long as they've been publishing them. https://vanguardinstitutionalblog.com/2021/09/17/tuning-in-to-reasonable-expectations/ Their Markets Model has been so wrong for so many years, always predicting non-US equities to vastly outperform US equities. Vanguard focuses heavily on the CAPE-ratio for these predictions, despite the fact that US-based public companies have for years been increasingly tech heavy, capital-light e.g. Googles of the world vs. the old-fashioned oil drillers and brick-and-mortar banks of non-US public companies. Vanguard finally relented and recently switched to a modified adjusted CAPE-ratio to adjust for things like ...
by reln
Fri Sep 24, 2021 2:50 pm
Forum: Investing - Theory, News & General
Topic: Most people [Is TSM not the best choice for informed investors?]
Replies: 152
Views: 13547

Re: Most people

Much of the "total market" advice talks about TSM being best for "most people." Well, 51% is most. Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice? Asking for a friend. If you're smart enough to beat the market or if you're willing to take the risk of underperforming to beat the market, then you should try to beat it. For everyone else that isn't either smart enough or risk taking enough, TSM is a fine solution. In my case atleast, better lucky than smart. :twisted: :sharebeer I've recently started to invest a small portion in active funds. Dumb luck I'm sure those active investments have outperformed the rest of my indexed portfolio so far. I have the same rough asset allocati...
by reln
Thu Sep 23, 2021 1:26 pm
Forum: Personal Investments
Topic: Can I retire now?
Replies: 13
Views: 2890

Re: Can I retire now?

Hello All, first time poster here hoping I can tap into the wisdom on this board to get a sanity check on my readiness for retirement... Emergency funds: $30k in high yield savings account Current debt (all loans will be paid off in 4 years): Car loan - $510/month; 2.9% Home equity loan - $656/month; 3.89% Mortgage - $1100/month; 2.5% Total current debt is ~$95k Tax Filing Status: MFJ Tax Rate: 24% Federal, 3% State Age: Him 60; Her 59 Desired Asset allocation: 50% stocks / 50% bonds Desired International allocation: 20% of stocks His 401k portfolio is $3M which is all 401k traditional. We have other savings but it is all earmarked for home improvement items and weddings for our daughters. Will delay social security till age 70. Estimate $...
by reln
Thu Sep 23, 2021 1:12 pm
Forum: Investing - Theory, News & General
Topic: Research Affiliates - 'Did I Miss the Value Turn?'
Replies: 6
Views: 884

Re: Research Affiliates - 'Did I Miss the Value Turn?'

Arnott and his co-authors make the case for value, https://www.researchaffiliates.com/en_us/publications/articles/842-did-i-miss-the-value-turn.html When most liquid asset classes are set to deliver a negative or near-zero real return, value stocks stand out as the only asset class likely to generate a 5%–10% real return over the coming decade. The opportunity to buy value stocks may be short-lived and we may wait decades for an opportunity of a similar scale. "5%–10% real return over the coming decade" and "the opportunity to buy value stocks may be short-lived"??? Unless they suspect it to double in a very short timeframe, I doubt the opportunity will be easily missed ( if they are correct that it will be great return...
by reln
Wed Sep 22, 2021 4:39 pm
Forum: Investing - Theory, News & General
Topic: Most people [Is TSM not the best choice for informed investors?]
Replies: 152
Views: 13547

Re: Most people

Much of the "total market" advice talks about TSM being best for "most people." Well, 51% is most. Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice? Asking for a friend. If you're smart enough to beat the market or if you're willing to take the risk of underperforming to beat the market, then you should try to beat it. For everyone else that isn't either smart enough or risk taking enough, TSM is a fine solution. Thus my question "Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice?" If not, how DO I get there? That's for the individual to decide. My hunch is no. Also, I'd say 49% is generous. Maybe more like 0.01% of people are s...
by reln
Wed Sep 22, 2021 4:37 pm
Forum: Investing - Theory, News & General
Topic: Most people [Is TSM not the best choice for informed investors?]
Replies: 152
Views: 13547

Re: Most people

Much of the "total market" advice talks about TSM being best for "most people." Well, 51% is most. Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice? Asking for a friend. If you're smart enough to beat the market or if you're willing to take the risk of underperforming to beat the market, then you should try to beat it. For everyone else that isn't either smart enough or risk taking enough, TSM is a fine solution. Beating the market is not the only reason. Sometimes, the distribution of returns best for a particular investor may not match the TSM or TBM (because their needed distribution is skewed). One has to determine what distribution of returns is acceptable to their needs. G...
by reln
Wed Sep 22, 2021 4:35 pm
Forum: Investing - Theory, News & General
Topic: Is There an Optimal Factor Allocation?
Replies: 71
Views: 6910

Re: Is There an Optimal Factor Allocation?

I have a set of questions centered around this topic. I apologize if this is well-trodden ground. 1. Should there be a hierarchy of priority within a factor-tilted portfolio? 2. Can you invest in so many factors that your portfolio becomes indistinguishable from a TSM? 3. Is there an optimal balance between the safety of TSM and the risk taken in factor tilting? Thank you all for any discussion. From my lurking this seems to be a bastion of TSM investors but I know there are factor investors here too. You won't ever get an optimal portfolio. A good enough portfolio might be pure market weight of global stocks. You might want to slice and dice to improve a few things such as currency risk management, foreign dividend tax credits, tax loss/g...
by reln
Wed Sep 22, 2021 4:23 pm
Forum: Investing - Theory, News & General
Topic: Most people [Is TSM not the best choice for informed investors?]
Replies: 152
Views: 13547

Re: Most people

bertilak wrote: Wed Sep 22, 2021 4:14 pm Much of the "total market" advice talks about TSM being best for "most people."

Well, 51% is most. Does reading all those words of wisdom put one in the 49% where TSM is NOT the best choice?

Asking for a friend.
If you're smart enough to beat the market or if you're willing to take the risk of underperforming to beat the market, then you should try to beat it. For everyone else that isn't either smart enough or risk taking enough, TSM is a fine solution.
by reln
Mon Sep 20, 2021 7:09 pm
Forum: Investing - Theory, News & General
Topic: Inverse to the 4% Rule
Replies: 57
Views: 9415

Re: Inverse to the 4% Rule

So this is a purely theoretical question that has been on my mind for the past couple of days. The way I understand the 4% rule is that it's basically the average of the market return, discounted for sequence of returns risk, high valuations, etc. Is there an inverse to the rule during accumulation? Should I assume a higher than average return because I am adding money from my paycheck rather than withdrawing it? It feels like that should be the case mathematically, but I'm not really sure how to think through the problem. In decumulation, if 4% inflation adjusted withdrawal was safe enough for you (ie, x% failure rate), based on the assets of your choice and your projection of their x-percentile worst scenario, then in accumulation you're...