Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Investing
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 03-09-2019, 11:40 AM
 
106,114 posts, read 108,094,712 times
Reputation: 79677

Advertisements

bottoms are never apparent ever .. as well as those initial rally's are usually looked at as dead cat bounces
Reply With Quote Quick reply to this message

 
Old 03-09-2019, 01:33 PM
 
Location: moved
13,590 posts, read 9,627,176 times
Reputation: 23363
Quote:
Originally Posted by mathjak107 View Post
...it has been almost 9 months now that jrkliny and i have been tracking 3 different style portfolio's and the model with 25% equities , gold and long term treasuries is still a head . it has been a head since 2007 in fact .

all these downturns we have had since 1999 in fact have been the great equalizer and more equity positions has not resulted in higher balances for 20 years now as 3 major drops struck .
9 months of market-gestation are of course too brief to constitute a discernible trend, but 20 years is sufficiently long for a market-trend to mature. If an equity position (doubly so, for an internationally diversified equity position) does NOT come out ahead over 20 years, then something is freakishly awry.

Consider how outside of the financial-world, how relatively placid the past 20 years have been! We've had no world war, no Spanish Flu, no major devastation. 9/11 and Katrina killed several thousand people - but only several thousand... not millions. And despite the political acrimony, we've had nothing like Watergate, or the JFK assassination, or the 1968 riots. Culturally, socially, politically, economically - it's been a relatively placid and prosperous time... except that the stock market somehow hasn't gotten the memo. The American stock market has in aggregate performed poorly. Most foreign markets have done far worse. Why?

It bears reiterating, that what matters isn't the 20% decline of late-2018, and whether we're on the threshold of its repeat, or not. What matters is that every such bull-and-bear, every oscillation, whether strong or weak, is superimposed on a rising-trend that's none too impressive. Simply put, in historical terms, this rising trend needs to rise faster. The oscillations are unnerving, yes. I forthrightly admit that! But what's more unnerving over the long-term, is that the overall rising-trend is just too tepid.
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 02:11 PM
 
106,114 posts, read 108,094,712 times
Reputation: 79677
remember though we are talking not just market returns but portfolio construction and interaction with the world as it unfolds . that is why these risk parity portfolio's have done better than they should have based on their equity allocations being lower .

there is no question over most long periods of time that left sitting as static lumps equities beat all other asset classes .

but what if we are talking very powerful movers like say gold , not sitting static but interacting with other assets ? left static in isolation gold and long term treasury bonds had some big up moves over the decades but look how gold gave those gains back , so it looks like it did nothing .


but what if you harnessed those up moves ? rebalanced , took those profits and bought equities on the cheap ? you would be buying way more equities with those powerful gains then had you rebalanced a total bond fund or cash ...

so the portfolio interaction is very key to making the sum of the parts more powerful than they are alone .

during the lost decade for stocks , gold had some big moves with big gains that could be harnessed simply rebalancng so those gains would not slip through the cracks like they did in isolation .

in pure bull markets equities will always win , but once the cycle is complete and we have the downturn , at any given point in time we don't really know where 100% equities will fall out in comparison .

2006 saw gold pop 22.33%, a total market fund 15%
2007 up 31% for gold , total mkt 5.26%
2008 up 6% for gold---total market minus 36.78%
2009 up 24% for gold---total mkt-- 27%
2010 up 28% for gold--total mkt 16.15

so rebalancing bought quite a bit of equities those years taking profits in gold .


same thing with long treasury bonds

2007 LONG TERM TREASURIES UP 10.14% --TOT.MKT UP 5.26%
2008 LTB UP 34% , TOTAL MKT MINUS 36.78%

2011 LTB UP 34% --TOTAL MARKET 1.55%

2014 LTB UP 28% --TOT MKT UP 13%

SO you can see where these powerful asset classes working together can match equities in gains when it is their day in the sun and rebalancing those gains each year is what propels these parity portfolio's and in all but bull runs really has them holding their own with much less of a draw down .

the more down turns you have in any period the better they work .. we had 3 in 20 years in my life as an investor so that is what i allow for now .

with these machine driven sell offs this may be the new normal and the old market history may have more downward moves just because , today .

in the old days we had no foreign markets to speak of influencing what happens here . today greece sneezes and we fall thousands of points . markets sell off when china does something . so these down blasts may be far more common then they were .

Last edited by mathjak107; 03-09-2019 at 02:22 PM..
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 02:51 PM
 
Location: moved
13,590 posts, read 9,627,176 times
Reputation: 23363
Quote:
Originally Posted by mathjak107 View Post
... left static in isolation gold and long term treasury bonds had some big up moves over the decades but look how gold gave those gains back , so it looks like it did nothing .

but what if you harnessed those up moves ? rebalanced , took those profits and bought equities on the cheap ? you would be buying way more equities with those powerful gains then had you rebalanced a total bond fund or cash ...

so the portfolio interaction is very key to making the sum of the parts more powerful than they are alone .
...
And what if I bought Dell or Microsoft shortly after they IPO'd? What if indeed.

No, I'm not a rebalancer. Even if I did this correctly, I can't afford the capital-gains taxes. To the extent humanly possible, to the extent situationally and physically possible, I will make no changes to my portfolio - ever. No trades, no rebalances, and certainly no redemptions. It is a museum-piece, under heavy glass, surrounded by rotating laser-beams.
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 02:53 PM
 
106,114 posts, read 108,094,712 times
Reputation: 79677
Well if you want to be 90% equities and 90 years old I guess you don’t have to rebalance. Just let the equities go sky high .. but remember ,we don’t want to hear about your anguish Ha ha
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 03:02 PM
 
8,005 posts, read 7,159,087 times
Reputation: 18165
Quote:
Originally Posted by mathjak107 View Post
Well if you want to be 90% equities and 90 years old I guess you don’t have to rebalance. Just let the equities go sky high .. but remember ,we don’t want to hear about your anguish Ha ha

We've already heard 70 @ 70 which sounds good to me so why not 90 @ 90?
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 03:11 PM
 
106,114 posts, read 108,094,712 times
Reputation: 79677
Quote:
Originally Posted by 1insider View Post
We've already heard 70 @ 70 which sounds good to me so why not 90 @ 90?
Why not 100% equities ? Over time if you don’t rebalance while spending down to live ,the equity side will go higher and higher ..

That is the issue with bucket systems .. they get rebalanced by years left of spending money , not performance ..

If you wait until cash and then bonds are depleted to refill ,your equity level can be very very high
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 03:18 PM
 
Location: moved
13,590 posts, read 9,627,176 times
Reputation: 23363
Quote:
Originally Posted by mathjak107 View Post
Well if you want to be 90% equities and 90 years old I guess you don’t have to rebalance. Just let the equities go sky high .. but remember ,we don’t want to hear about your anguish Ha ha
Anguish is inherent in being alive, and there's only one solution to that. Until then, it's buy-and-hold.
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 03:21 PM
 
106,114 posts, read 108,094,712 times
Reputation: 79677
So are you saying you are 100% equities ? Is that why you are so stressed over the moves?
Reply With Quote Quick reply to this message
 
Old 03-09-2019, 04:20 PM
 
Location: moved
13,590 posts, read 9,627,176 times
Reputation: 23363
Quote:
Originally Posted by mathjak107 View Post
So are you saying you are 100% equities ? Is that why you are so stressed over the moves?
No. I'm about 80% equities. The rest is intermediate-term tax-free US bonds. Within the equity-bucket, the allocations fluctuate, and to be forthright, I've not checked my account since maybe the fall of 2017. But at one point, the breakdown was something like this:

S&P 500 index - 35%
Midcap-400 index - 15%
Small cap index - 25%
International index - 25%
Actively managed US mutual fund - 5%
Individual US stocks - 5%

The above numbers likely date from 2013, if not earlier. I rarely even log on to my account. My 1099s are sent in hardcopy form. To make deposits or to attend to other business, I just call my "private representative", Danielle. And I specifically instructed Danielle to never mention to me any numbers in my account, because I don't want to know.

The anguish comes from current-events. I don't watch TV, or even own one. But every time that I'm in an airport, CNN or Fox is blaring, and surely enough, there's that market-ticker in the bottom right-hand corner of the screen. Whenever it's red, I "spazz out", as the kids say.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Investing
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top