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The above video and quote is from his June 30, 2017 Blog.
I notice these guys tend to speak out of both sides of their mouth, they hedge their bet. In the internet age, to be dead wrong about the market is like a nail on a coffin. Peter Schiff is still the laughing stock for a reason.
I notice these guys tend to speak out of both sides of their mouth, they hedge their bet. In the internet age, to be dead wrong about the market is like a nail on a coffin. Peter Schiff is still the laughing stock for a reason.
We have our own opinions. Shiller and his call on real estate was spot on and enabled me to sell at 95% market peak. I listen to him often and he doesn't really claim to be a prognosticator but is a economic professor who compiles and publishes data. The answer you often hear from him is in reponse to the question he is asked and how that is phrased. It is just like when to take profits which we all hopefully are and have been having to make decisions about. It your asset allocation goal is 70% equities and you have funds you have been in a long time and you are now 74% the CAPE may be a guide that now is a good time to get your allocation back in line. Index funds especially ones tied to the broader market may be more of a threat right now. For those of us in retirement or over 70 there is also a withdrawal strategy and how do identify funds for withdrawal. Knowing you will need money either while in your current retirement or for RMD's do you want to withdraw from a declining part of your portfolio and lock in losses or from a more stable value fund. Do you keep three years of withdrawals in cash etc or just set up one year at a time. Having retired just before the great recession and having fully recovered plus I am aware of the two scenarios in retirement and how they play out very differently. Shiller and CAPE can be very important to me at this age. Yes I don't need my portfolio now and am getting back to a pace of vigorous savings/investments but how long is my time horizon really? What is reasonable for me and the wife and do I count heirs in that formula.
As we were nearing retirement and not yet there. Shiller and his real estate comments motivated me to sell when our market had started to decline or had at least stopped rising. We had some trouble selling and others told us to wait as the market would rebound we listened to Shiller. We sold at 90-95 percent of peak depending on how you decide your house compared to the highest comparable sold. Our neighbor sold a few days later for a bit less and one more house sold in our price and sq footage range the market started crashing. Those on the market at the same time of us took a big hit. Thank you Shiller.
For someone at my age and in a transition stage I am once again listening to him carefully. Transition stages require more decisions than when you are in stable life pattern. At age 70 once again decisions need to be made and suddenly my thirty year plan is ten years in and there is a age related reality. Also being a junior Boglehead I am aware of the market distortions index funds may well be creating. Each week I buy Apple and Exon without any thought to valuations and future performance.
As we were nearing retirement and not yet there. Shiller and his real estate comments motivated me to sell when our market had started to decline or had at least stopped rising. We had some trouble selling and others told us to wait as the market would rebound we listened to Shiller. We sold at 90-95 percent of peak depending on how you decide your house compared to the highest comparable sold. Our neighbor sold a few days later for a bit less and one more house sold in our price and sq footage range the market started crashing. Those on the market at the same time of us took a big hit. Thank you Shiller.
For someone at my age and in a transition stage I am once again listening to him carefully. Transition stages require more decisions than when you are in stable life pattern. At age 70 once again decisions need to be made and suddenly my thirty year plan is ten years in and there is a age related reality. Also being a junior Boglehead I am aware of the market distortions index funds may well be creating. Each week I buy Apple and Exon without any thought to valuations and future performance.
Wouldn't it better to buy a managed fund, at least you are not tied to a single stock. I have half and half in index and managed mutual funds.
Wouldn't it better to buy a managed fund, at least you are not tied to a single stock. I have half and half in index and managed mutual funds.
We are in mutual funds both index and active with several brokerage houses. Our situation has reached a planned for point and as we ease into a expanded investment pattern we have to make decisions not just about old money but new money going in. It is a sorta aged bull market long and realistically how long is our future horizon both planned and real. If currently 70% equities to I want to throw multiple thousands a month of new money into that same AA? Do I rebalance down to 70% or I target 50-65%? We are planning to probably enter a CCRC in about ten years or so. That will require some sort of cash distribution or a highly monthly fixed expense total. So what is my time horizon? How much profit to take after a great bull market run. My comment about Apple and Exon is not about buying individual funds but the reality that with index funds my fund manager is locked in to buying them in proportion to their part of the index I owned. At least with a active fund the fund manager can back off and decrease the portion of those stocks in their portfolio. With index funds no. That is part of the market distortion that could be happening as index funds are buying lock stock in portion to a ratio and not fundamentals. You are in the same boat especially with your index funds. With so much money flowing into index funds questions are being wondered.
. With index funds no. That is part of the market distortion that could be happening as index funds are buying lock stock in portion to a ratio and not fundamentals. You are in the same boat especially with your index funds. With so much money flowing into index funds questions are being wondered.
Yet those fund managers who manage based on the "fundamentals" consistently under-perform index funds. So much for fundamentals. The reason is that other market players (mostly private equity) beat the fund managers to the draw, so to speak.
The markets are fast and smart. You expect to beat the market, immediately or long term? You'd better be faster and smarter. Are you? ("you" as in y'all)
many fnds don't beat index's every year but they beat them longer term . there are tons of small funds who have managers that can easily beat index's . but the funds are so small in dollars the expenses .kill them . stock picking and expenses are two different issues .
my fidelity contra fund as an example which i have held for many many many years ..
Investors will do just fine if they have an investment strategy that matches their goals and stick to it, taking their winnings and mitigating any losses by periodically rebalancing.
many fnds don't beat index's every year but they beat them longer term . there are tons of small funds who have managers that can easily beat index's . but the funds are so small in dollars the expenses .kill them . stock picking and expenses are two different issues .
my fidelity contra fund as an example which i have held for many many many years ..
The research I've seen does not support your "observation" at all. In fact, the research shows the opposite.
Stock-picking and expenses separate issues? That's a new one. The fact is that expenses are a major reason why active trading approaches under-perform. And if by "expenses" you mean account management fees, you are spot on. Actively managed funds underperform the market by the account fee amounts, on average. It's those pesky expenses that kill the performance of these funds.
The research I've seen does not support your "observation" at all. In fact, the research shows the opposite.
Stock-picking and expenses separate issues? That's a new one. The fact is that expenses are a major reason why active trading approaches under-perform. And if by "expenses" you mean account management fees, you are spot on. Actively managed funds underperform the market by the account fee amounts, on average. It's those pesky expenses that kill the performance of these funds.
You and MJ are both right. That is why even Jack Bogle says it is ok to own active funds just pick the right ones. A lot depends on what your goal is long term or even intermediate term. For the long haul index funds and a few select active funds that are low cost can do nicely for you. The problem is that most of them are closed to new investors. The Fidelity newsletter does a good job of helping to guide folks in and out of funds at the right time and has a good track record. That along with index funds can provide you a balance. The tricky part is in picking higher beta active funds. They will lose money at times and make money at times with the big question being the aggregate return. Those need to be held a good deal of time to average things out. With age I have become more conservative and my adventures are limited to T Rowe Price New Horizons and Fidelity Growth Company. Both are closed to new investors. New Horizons is kicking the butt of similar funds like it did at one time. Those along with Wellington and Wellesley are my active fund adventures along with a small amount of a few other risky funds. Gotta have some fun and as Bernstein says playing with some money is ok. I have different fund families for different purposes and entered them at different stages of life. We are in a good spot and our situation as MJ knows is not typical of most in the forum. However it is typical of more than many posters realize.
We are part of a increasingly recognized threat to the American economy and it will just grow as more financially secure Boomers retire. That is another thread topic. I will say evidence is emerging that a discussion MJ and I had a few years ago is proving him right and it is part of the decline in retail sales.
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