Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Hi BobC,
Thank you so much for responding to MFOer Davidrmoran’s questions with regard to the whys of your near-term cash portfolio asset allocation policy. Your explanations are clearly and understandably presented.
But you did not address the q…
Hi Old Joe,
You're on target when you suggest that all retirement portfolio withdrawal requirements should be based on the amounts needed to supplement the total of all other retiree income sources.
That's exactly the way all such calculations are…
Hi Davidrmoran,
You raise important questions with regard to a retirement cash cushion requirement. How much is needed? How was that level determined? What fraction of a retirement portfolio should be protection money in the form of near-term ca…
Hi Old Joe,
For ease of scoring your survey, I’ll give a single word answer, and I’ll explain later: Nothing. I plan no immediate action.
My “just stand there, do nothing” approach is grounded in several dimensions.
For decades, both studies and…
Hi Kaspa,
I completely agree with your comments.
The reported study is flawed by design and is flawed by the reporting of its findings.
By not considering fund survivorship bias and by only including lower cost institutional shares, the study is …
Hi Davidrmoran, Hi Guys,
Thank you for the referenced article and the discussion. It adds further fuel to a fire that is likely to burn for a long time.
How a company should spend its profits is a perennial issue that couples short-term/long-term…
Hi Old Joe,
In this instance, your Internet search engine did not serve you well. Perhaps you chose the wrong search words.
Instead of directing you towards a Link with real world information and possibilities, it guided you to a bizarre fictiona…
Hi Hank, Hi Guys,
Please do not interpret my posting of Jim Stack’s Las Vegas presentations as my ringing endorsement of his advice. It is not. I like his historical research and his reliance on multiple market directional indicators. I don’t ne…
Hi Old Joe,
No assumptions are necessary. Jim Stack is directing his advice to all investors: to you, to me, to MFOers, and to his legion of loyal followers. Also when I said “our perceived positions” I meant a generic all of us investors without …
Hi Old Joe,
Yes it does matter. Not only does it matter, it matters greatly what is our perceived position within any cycle.
Let's use Stack's baseline asset allocation model to illustrate. Early in the current Bull cycle (like 2009), Stack woul…
Hi Junkster, Hi Old Joe,
Thank you for reading my reference to Jim Stack’s predictions. Of course you recognize they’re his forecasts, and not mine. I have no idea where the market is headed so I don’t make market predictions, and I generally don…
Hi Old Joe,
It’s wake-up time. It’s time for you to quit your childish nightmarish world in which I’m some sort of dictatorial ogre on MFO. Your hurtful sarcasm does not carry the day. In fact, it encourages me to post even more frequently.
You…
Hi Old Joe,
In the words of your favorite President “There you go again”.
You infrequently question the substance of my contributions; you often challenge my standards. You immediately divert your attention to a personal attack; in this instance,…
Hi LouisBraham,
These exchanges have accelerated to the point where the writing has passed the critical thinking.
Some of the exchanges have focused on the fairness of receiving dividends as a form of redistribution when they were not "earned". T…
Hi Guys,
Wow! Capitalism as a topic for an MFO discussion doesn’t get much Bigger Picture. Our postings seldom fly at that rare an atmospheric level. It’s a tough subject.
Winston Churchill, as usual, had a pity Capitalism observation: “The inh…
Hi Guys,
Thank you for some terrific postings.
From a global perspective, I agree with Old Joe’s assessment of the Social Security initiation and drawdown dilemma. It is a complex problem, with many moving and uncertain parts. It can not be perf…
Hi FundStudent,
The two highest priorities on your happiness ladder are health and wealth. I suspect these are the same highest rungs on most MFOer’s ladders. I agree.
But these goals are definitely not independent of each other. They are oppos…
Hi Jungster,
Thank you for your response.
I was not surprised. Approaching these events with a grain of salt is not enough; each presentation must be assessed with a block of salt.
Not all exhibitors are equally trustworthy - nothing new here. …
Hi Old Joe,
First, I want to thank you for your service.
Second, and perhaps foremost, I contributed to this post multiple times to reinforce Ted’s sentiments about this inspirational and emotionally charged day. It deserves special recognition. …
Hi Guys,
As Memorial Day 2015 slowly edges towards its end, it is appropriate to turn attention to the future. In keeping with the spirit of this exchange, no better way to do this than with a rousing version of the Battle Hymn of the Republic.
T…
Hi Sven,
Thank you so very much for your astute correlation dynamics observation. Correlation is a significant consideration when constructing a portfolio.
Much correlation coefficient confusion exists. One reason for the confusion is its undera…
Hi Catch22,
Surely, I did not suggest that this discussion should be closed. Perhaps it should never close. I merely wanted to make sure that a Taps reference is included among the many worthy and respectful contributions that I anticipate.
Edit…
Hi Guys,
Thank you Ted for this quiet and effective memorial celebration. I had never seen it.
I too will never forget. Memorial Day has a very special meaning for me and my family. I salute all the Armed Forces of the United States, those from…
Hi AkaFlack,
Good to hear from you.
No, my quickly analysis did not include tax considerations. My analysis was quick and dirty to just scope the problem.
Both you and Davidrmoran are perfectly right that a more refined set of simulations would …
Hi Morningstars,
Costs matter even more when portfolio expectations are lowered. Bogle has been playing this song for decades. Here' an example.
Suppose a balanced portfolio expects a market return of 7.5% with expenses at 1.5 %. Your return is…
Hi Old Joe,
Neophyte investors have notoriously misbehaved in markets forever. Remember the Tulip Bubble and the South Sea disasters of yesteryear. I agree, this is definitely not new stuff.
DALBAR had been dutifully documenting investor's unfor…
Hi Old Joe,
You are perfectly right that starting in the timeframe that you specified would have caused high anxiety for a newbie investor. The numbers I reported were averages from thousands of random Monte Carlo simulations.
I'm sure you were b…
Hi Davidrmoran,
I would not be overly worrisome if I did not have immediate access to a 4-year cash reserve. I hope you share that same feeling.
The 4-year near cash criteria was introduced as part of Dex’s specific retirement issues. It is a pu…
HInDavidrmoran,
I too do not have anywhere near 4 years of immediately available.cash.
But I do have the equivalent of 4 years cash in a very low cost short term corporate bond mutual fund with easy access. There is some small risk there, but I h…
Hi Old Joe,
I agree you can run the car without looking under the hood.
In fact, I made that exact analogy in an earlier post when I remarked that you need not be an auto mechanic to effectively drive a car, just like you need not be a mathematici…
HI JohnChisum,
It's been years since I read the Trinity study in detail. However, I believe the 75/25 equity/bond mix comes directly from the Trinity professor's study. Check the Link that I referenced in my opening post.
Thank you for your supp…
Hi Old Joe,
Do not think of Monte Carlo simulations as some eloquent higher mathematics. It is not, I repeat NOT, sophisticated higher mathematics.
The calculation sequences within a Monte Carlo code are standard Spreadsheet arithmetic. There ar…
Hi Old Joe,
The inputs to many accessible Monte Carlo codes are sufficiently flexible to allow a user to reflect the current market conditions and/or the user’s special market projections. These are typically input in the form of estimated average…
Hi Davidrmoran,
Thank you for your perceptive comment. It is spot on-target. The ordering of investment outcomes is critical to the success or failure of a retirement portfolio.
An early retirement hugely negative market outcome can ruin initial…
Hi Old Joe,
I did reply earlier about the Bay Bridge issues. My reply is further up on this page. It starts by thanking you for the update. Perhaps you missed it. I had, and do not now have, any specific insights to the Bay Bridge problem set.
…
Hi Old Joe,
To refresh your memory, your initial post that was time stamped 12:14 PM only contained three words: "Mostly Just Gas". It was that silly, childish acronym that I referred to with my "shameful" characterization. Your memory is highly …
Hi Dex,
I believe you are wrong.
The analysis is a simple money flow balance usually done on an annual basis. To oversimplify, portfolio value at the beginning of the year plus annual incomes plus/minus portfolio returns minus total expenditures e…
Hi Old Joe,
I notice that you significantly edited your original post above. I don't blame you. It was shameful.
If I am truly not a “credible threat”, I note that you invest a lot of time and energy in trying to disarm me.
Another illustration…
Hi Old Joe,
Well I guess I was wrong again with my overly optimistic hope that a Zebra would change its stripes. In your case, I suppose that will never happen.
Yes, I did send a truculent reply to a feeble response on my Broken Window submittal.…
