This Forum & Dissenting Opinions of the HBPP

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Re: This Forum & Dissenting Opinions of the HBPP

Post by Pointedstick » Thu Dec 03, 2015 12:29 pm

Tyler wrote: Asset allocation is still very important to the extent that you're comfortable with your portfolio holdings, volatility, and longest potential drawdown and are willing to trust your decision even when times are bad.  Since everyone has different personalities, biases, and needs, no single portfolio will work for everyone.  But no single portfolio needs to work for everyone if they can just settle on one that works for them and leave it alone!
I think this is the most important thing to understand. If you choose an asset allocation that is hypothetically objectively the best one out there, but you can't stay with it because you hate it, it's worthless. A 100% anything portfolio held for 30 years and bought consistently is probably a million times better than jumping in and out of different strategies over time.

However, your emotions change over time. At one point in your life, you may feel comfortable investing very aggressively, and at another time, you may feel the need to be much more conservative, and both can be totally legitimate feelings--but doesn't this constitute jumping around? What if you turn conservative just before a huge stock boom (raises hand) orbecomey comfortable with more volatility and risk just before the market collapses?

It's one thing to Know Thyself, but when happens when Thyself changes?
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Pointedstick » Thu Dec 03, 2015 12:38 pm

sophie wrote: Yup, agree with PS.  Use the PP to build a base of money that will be the most dependable lifeline you can possibly have:  minimized risk of painful drawdowns, plenty of cash to draw on for emergencies, built-in protection against several Black Swan events, and built-in asset management.  This is more dependable than a job or any government benefits you can think of.  Perfect it is not, because there's no such thing, but it's pretty darn close.

Once you have that, you can now go out and take risks that you might otherwise not have.  You can quit your job, start your own business, put new savings into higher yielding but riskier investments, spend money on something you might have hesitated on in the past, etc.  Or just wake up in the morning and feel like you don't need to pander to your boss or take on more work than you really want to.

PS I get the idea that you're pretty close to FIRE - what will you do when you get there?  I figure I'm about 3 years away, but since I'm highly unlikely to lose my job in that 3 years I'm already enjoying some of the above benefits.  Corto - you'll get there soon enough!
Yep, I'm 3 about years away from hitting my target assuming zero investment returns during that time. I'll get there in two years if the PP goes up an average of 10% per year instead.

As for what I want to do, I plan to start businesses to pursue all the zany ideas I have kicking around in my head, and use my stock-heavy VP to provide seed money. I may work another year or two longer than necessary to build the fund up even more, putting 100% of my paycheck into it and living off the PP, and also because I kinda like my job and might wanna stay on for a bit longer. And stashing away more cash would make me feel better about the prospect of affording health care without the cushy corporate cadillac health insurance I currently have for the family. That's my biggest worry, in fact. I'm concerned that I might take so little income in retirement that we'll get kicked onto Medicaid. I don't want that at all.

I also plan to become a better cook and make dumplings and cheesecake all the friggin' time.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by bigamish » Thu Dec 03, 2015 1:01 pm

Cortopassi wrote: PS,

Your previous thread comment:

If you want to live off your investments, you just need a shitload of money.

Is 100% correct.  That was always my goal in being too risky for the first 20 years of investing, and getting absolutely freaking nowhere.  Now that I am older, with one child a couple years from college and another one 4 years after that, and at most ideally only 15 working years left, I am 180 degrees polar opposite of what you are saying about yourself become less risk averse.  As my net worth grows, I am much more risk averse. 

I see three cases --

1) Shitload of money.  Then you are right, and I would have been more than happy to have it all in a 5% money market (not possible now or in the foreseeable future)
2) Not enough money to live carefree.  Mentally I am able to deal with that, if it ends up being the case.  Live day to day and do what you can.
3) Somewhere in the middle.  This is ME right now and scares the crap out of me. I want the pendulum to swing to #1, but with things the way they are with the PP and my aversion to too high of a stock concentration, my retirement situation can go either way.  The unknown is the most scary part.
Pointedstick wrote: Yes, I agree, Corto. The stage when you have between 5 and 25x expenses is the scary one. You're working toward financial independence, but you're not there yet, and every loss or down year sets back your goal…

For me a bug focus has been on controlling costs. I think you and I have different feelings about college, but if you're going crazy trying to figure out how to spend half a million dollars to send your kids to top-tier schools, I could see how that's stressful. But there are alternatives, I promise! You can beat the system! And I think college is overrated anyway. It's over in four years and even if you have a very negative college experience like I did, you'll probably be just fine if your head is screwed on straight and you have a loving family.
sophie wrote: Yup, agree with PS.  Use the PP to build a base of money that will be the most dependable lifeline you can possibly have:  minimized risk of painful drawdowns, plenty of cash to draw on for emergencies, built-in protection against several Black Swan events, and built-in asset management.  This is more dependable than a job or any government benefits you can think of.  Perfect it is not, because there's no such thing, but it's pretty darn close.

Once you have that, you can now go out and take risks that you might otherwise not have.  You can quit your job, start your own business, put new savings into higher yielding but riskier investments, spend money on something you might have hesitated on in the past, etc.  Or just wake up in the morning and feel like you don't need to pander to your boss or take on more work than you really want to.

PS I get the idea that you're pretty close to FIRE - what will you do when you get there?  I figure I'm about 3 years away, but since I'm highly unlikely to lose my job in that 3 years I'm already enjoying some of the above benefits.  Corto - you'll get there soon enough!

And incidentally, who says the PP has "done nothing" for the past two years?  It was negative in 2013 and will be slightly negative this year, probably, but mine was up 9% in 2014.  It's definitely trailed my stock/bond retirement portfolios, but just wait for that next market crash.
This is one of the best sequences of posts I've seen in awhile.  I hope the new PPers take note.  For many of us (myself included) it really is about the long game, staying the course, saving profusely, and reaching your FIRE goals in as safe a manner as possible.  Then afterwards having the financial freedom to get fancy should one choose to do so.

I now return to my lurker hibernaculum.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 1:08 pm

jafs wrote: It seems extremely counter-intuitive that a very cash heavy portfolio would be the best way to beat inflation.
Don't confuse short term Treasury debt with zero duration currency.  I would have preferred if 1-year T-Bills were available because the ST Treasury fund actually has a duration of about 2.3 years.  Duration differences can matter a lot in tightening cycles or other sensitive climates.

In reality we would just ladder/stack the cash in individual 5-year CD's to get the best of all worlds anyway.  Bond funds are deadly.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Tyler » Thu Dec 03, 2015 1:11 pm

Pointedstick wrote: However, your emotions change over time. At one point in your life, you may feel comfortable investing very aggressively, and at another time, you may feel the need to be much more conservative, and both can be totally legitimate feelings--but doesn't this constitute jumping around? What if you turn conservative just before a huge stock boom (raises hand) orbecomey comfortable with more volatility and risk just before the market collapses?

It's one thing to Know Thyself, but when happens when Thyself changes?
IMHO, the key is to realize why optimizing your investments feels so important in the first place.

Investing often becomes especially stressful for prospective early retirees.  They have a really big goal in mind with that money (one of the few that can't be bought on credit), and want it as fast as possible.  But a retirement date can be just as negatively affected by volatility of a large portfolio as it can be positively affected by returns.  It's that unpredictable balance, interspersed with very here-and-now career pain and all kinds of other life events, that causes a lot of cognitive dissonance.  Based on where you are at any given moment, you may feel more or less risk averse.  That's perfectly normal, if not particularly helpful for your investment plan. 

I've been FIRE for over a year now.  Now that I think about it, it's kinda interesting how my perspective on money has changed.  The last few years before reaching my goal were full of a variety of emotions, so I definitely understand the conflicting goals and motivations.

I wouldn't say I'm more or less financially conservative after FIRE.  If anything, I'm simply less emotional about money.  Where I used to check my investments dozens of times a day, now I'll go weeks without thinking about them.  I sometimes think about tweaking my PP in the retirement account, but it's more of an intellectual exercise to practice good money management than a desire to make more money I don't need or dial down risk even more.  I've personally found that once a sustainable system is in place, constantly reevaluating my investment risk tolerance seems kinda unimportant in comparison. 
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 1:14 pm

sophie wrote: The way I see it, if your time horizon is truly 15-20 years, why mess around with any asset allocation portfolio?  Just put everything in stocks.  I've been figuring that once I've saved enough in the PP to cover basic living expenses, I might happily plow the rest into stocks - either bought directly or via index funds.
I hate to nitpick again as I haven't read all of Browne's relevant books to follow the evolution, but my current impression is he did all the backtesting and research in the 1970's with Coxon to come up with the PRPFX which is a very real asset heavy portfolio.  Then he simplified that down to the orthodox PP in 1987 for his new book.  If he actually did any additional research in the interim, I'd be very interested to read about it!

The PP may not get any respect, even from me, because it just seems like an oversimplified, dumbo's portfolio for the Boobus masses.  But even after three or four years of personally working to attack it, it turns out to be a set of Matryoshka dolls.  Sometimes innovative serendipity like that does happen out of sheer dumb luck and I'd like to know for sure or not.  I'm not a Browne worshipper.  I think he was politically flawed and that people overestimate his financial intelligence in coming up with the PP.  So I remain to be proven wrong.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 1:16 pm

Cortopassi wrote: I'm not planning on going that far!  But probably at least into the Golden Butterfly which is certainly more stock heavy and a bit less cash/short term.
I'm not impressed by the Golden Buttefly portfolio.  Like Swedroe's Min Fat Tail, it is just a curve fit after the fact.  With no justification for the heterodox weightings either.

If you want a higher CAGR, you are logically consistent to use a leveraged [risk parity[ PP sans cash.  If you fully believe in the PP for your core, why would you just suddenly junk it for the aggressive?
Last edited by MachineGhost on Thu Dec 03, 2015 2:27 pm, edited 1 time in total.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Greg » Thu Dec 03, 2015 1:20 pm

Pointedstick wrote: And stashing away more cash would make me feel better about the prospect of affording health care without the cushy corporate cadillac health insurance I currently have for the family. That's my biggest worry, in fact. I'm concerned that I might take so little income in retirement that we'll get kicked onto Medicaid. I don't want that at all.
I'm confused, would you expect to stay on your employer's healthcare plan after you'd quit? Or would you go onto a new non-employee based healthcare plan? What's so bad about getting put onto Medicaid?
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Re: This Forum & Dissenting Opinions of the HBPP

Post by barrett » Thu Dec 03, 2015 1:21 pm

buddtholomew wrote: Looks like it's LTT's now. Sure makes the PP look obsolete doesn't it?

So much for it being a rising dollar issue. Dollar is down 1.5% and gold is up pennies.
Hey Budd... serious question

Do you think the PP is just a bad idea all the way around or is it in your opinion just not set up to deal well with whatever market conditions we have now? No agenda here. I am just curious. Thanks.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 1:23 pm

sophie wrote: Yup, agree with PS.  Use the PP to build a base of money that will be the most dependable lifeline you can possibly have:  minimized risk of painful drawdowns, plenty of cash to draw on for emergencies, built-in protection against several Black Swan events, and built-in asset management.  This is more dependable than a job or any government benefits you can think of.  Perfect it is not, because there's no such thing, but it's pretty darn close.
I still have a problem with the PP having about a -25% maximum nominal drawdown.  Given the situation in the late 70's and early 80's that would have been incredibly painful and scary to experience, if you could manage to hold on.  The world felt like it was ending: gold was in a hyperbolic bubble, South America serially defaulted on its debt, our government was completely dysfunctional, Socialism/Communism was winning everywhere globally, union strikes were crippling entire industries, oil was at $185 a barrel in today's dollars, lots and lots and lots of social angst protests, etc.. You're right about everything else, though!
Last edited by MachineGhost on Thu Dec 03, 2015 1:25 pm, edited 1 time in total.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Pointedstick » Thu Dec 03, 2015 1:35 pm

Greg wrote:
Pointedstick wrote: And stashing away more cash would make me feel better about the prospect of affording health care without the cushy corporate cadillac health insurance I currently have for the family. That's my biggest worry, in fact. I'm concerned that I might take so little income in retirement that we'll get kicked onto Medicaid. I don't want that at all.
I'm confused, would you expect to stay on your employer's healthcare plan after you'd quit? Or would you go onto a new non-employee based healthcare plan? What's so bad about getting put onto Medicaid?
I like my current health insurance plan but it is heavily subsidized by my employer, so after I quit my job I won't have that option anymore. It'll be Obamacare or Medicaid, and and I'm not really big on Medicaid. I suspect the quality of care is lower and the wait is long. Besides, I don't really want to be relying on a welfare program. I'd rather pay my own way, but I know that's a pipe dream in this crazy US health care market we have. :(
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Cortopassi » Thu Dec 03, 2015 1:39 pm

Pointedstick wrote:
Cortopassi wrote:Our highest expenditure per year is real estate taxes of about $9500.
Whoa!!!! That's crazy high! Are you in Chicago or CU? That's a rough position to find yourself in, for sure. Any plans to retire somewhere cheaper?
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Cortopassi » Thu Dec 03, 2015 1:44 pm

sophie wrote:
And incidentally, who says the PP has "done nothing" for the past two years?  It was negative in 2013 and will be slightly negative this year, probably, but mine was up 9% in 2014.  It's definitely trailed my stock/bond retirement portfolios, but just wait for that next market crash.
Right now I am looking at a little worse than -3% for the PP this year.  Peak to Trough shows about -2.55%.  Does that fall into the slightly negative category?  Historically, for me, I guess I would say yes.

Stock market has now decided to take a dive with TLT getting killed.  Another one of those crappy days...
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Re: This Forum & Dissenting Opinions of the HBPP

Post by buddtholomew » Thu Dec 03, 2015 1:48 pm

barrett wrote:
buddtholomew wrote: Looks like it's LTT's now. Sure makes the PP look obsolete doesn't it?

So much for it being a rising dollar issue. Dollar is down 1.5% and gold is up pennies.
Hey Budd... serious question

Do you think the PP is just a bad idea all the way around or is it in your opinion just not set up to deal well with whatever market conditions we have now? No agenda here. I am just curious. Thanks.
Honestly Barrett, I don't know what to think anymore. I used to believe that diversifying into gold, bonds and cash would make my portfolio more conservative. Now it appears the inclusion of gold and treasuries has made the portfolio more aggressive as compared to a more stock heavy allocation. How else do you explain gold down 11% YTD and treasuries down 5% (including today's 3% decline)? I just don't understand what I am holding anymore. All I do know is I continue to lose money.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by barrett » Thu Dec 03, 2015 1:53 pm

MachineGhost wrote: I still have a problem with the PP having about a -25% maximum nominal drawdown.  Given the situation in the late 70's and early 80's that would have been incredibly painful and scary to experience, if you could manage to hold on.  The world felt like it was ending: gold was in a hyperbolic bubble, South America serially defaulted on its debt, our government was completely dysfunctional, Socialism/Communism was winning everywhere globally, union strikes were crippling entire industries, oil was at $185 a barrel in today's dollars, lots and lots and lots of social angst protests, etc.. You're right about everything else, though!
This is what I see on peaktotrough:

Max Drawdown 20.56% (1980-01-21 - 1980-03-27)

Add a few weeks of high inflation onto that and you're up around 22 - 23% Max DD. Yeah, that's a rough patch for sure but the PP recovered super quickly that year. An investor would have already been "made whole" again by early June. And gold certainly played a big part in that drama. At the end of January of that year the PP was off 9.7% in just five trading days. But what is one to do?
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Re: This Forum & Dissenting Opinions of the HBPP

Post by jafs » Thu Dec 03, 2015 2:02 pm

It seems to me that with any long-term investment strategy, following short-term trends too closely makes it harder to stay with your strategy.

If you understand the volatility of the portfolio you've chosen, and are ok with that, then under a wide range of "normal" conditions, you should feel ok just staying with it.

The harder question is when conditions stray outside of "normal" enough that you question whether or not the strategy is still the one you want, and aren't sure what to do instead.  And, how to decide whether the conditions at a given time are within that "normal" band or not.

And there are a lot of self-fulfilling prophecies at work too, like when everybody thinks bonds will go down, sells their bonds, and then...bonds go down.  Or when fears/expectations of inflation create inflation, or expectations of deflation create recessionary trends.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 2:31 pm

barrett wrote:
MachineGhost wrote: I still have a problem with the PP having about a -25% maximum nominal drawdown.  Given the situation in the late 70's and early 80's that would have been incredibly painful and scary to experience, if you could manage to hold on.  The world felt like it was ending: gold was in a hyperbolic bubble, South America serially defaulted on its debt, our government was completely dysfunctional, Socialism/Communism was winning everywhere globally, union strikes were crippling entire industries, oil was at $185 a barrel in today's dollars, lots and lots and lots of social angst protests, etc.. You're right about everything else, though!
This is what I see on peaktotrough:

Max Drawdown 20.56% (1980-01-21 - 1980-03-27)

Add a few weeks of high inflation onto that and you're up around 22 - 23% Max DD. Yeah, that's a rough patch for sure but the PP recovered super quickly that year. An investor would have already been "made whole" again by early June. And gold certainly played a big part in that drama. At the end of January of that year the PP was off 9.7% in just five trading days. But what is one to do?
Well if this is the best that can be done with an all weather portfolio -- and I certainly have been trying for three or four years to find something better, I guess we'll just have to live with it or deal with tactical.  I suppose its also small comfort to know you're in the Top 1% of investors during such an event.

Even the Browne Minimum Risk the MaxDD is around -10%.  That's pretty steep for basically what is just break-even on cash above inflation.

It is what it is.  There's no more rocks to turn over.

Sophie and PS hit the nail on the head.  My PP buttkicking has very little to do about asset allocation per se and everything to do with being able to stick with a ROBUST investment plan super long-term that I can pour income into without another thought.  The last thing I -- or anyone -- needs is to have the Mother of All Doubts halfway into what you thought was a "baked into the cake" investment plan.  That's even far more painful than choosing wrong at the outset and then immediately correcting as budd did.  Unlike subjective religion, you see the objective results if you choose wrong: you lose money (you likely cannot afford to lose).
Last edited by MachineGhost on Thu Dec 03, 2015 2:46 pm, edited 1 time in total.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Tyler » Thu Dec 03, 2015 2:32 pm

Pointedstick wrote: I like my current health insurance plan but it is heavily subsidized by my employer, so after I quit my job I won't have that option anymore. It'll be Obamacare or Medicaid, and and I'm not really big on Medicaid. I suspect the quality of care is lower and the wait is long. Besides, I don't really want to be relying on a welfare program. I'd rather pay my own way, but I know that's a pipe dream in this crazy US health care market we have. :(
FWIW, between smart capital gains harvesting and IRA>Roth conversions, there are ways to stay above the MAGI threshold for Medicaid even with no earned income.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 2:45 pm

Tyler wrote: FWIW, between smart capital gains harvesting and IRA>Roth conversions, there are ways to stay above the MAGI threshold for Medicaid even with no earned income.
You guys are probably far away from being eligible for Medicare, but being eligible for Medicaid is actually a bonus if you also qualify for Medicare.  You get to have access to the cadillac of all health insurance, the Dual Eligible plans.  It will be insurance where Medicare is primary payor and Medicaid secondary payor.  States offer many enhanced benefits via Medicaid that Medicare does not cover.  The benefits are all combined together in a single Dual Eligible Advantage Plan.  So below MAGI should be planned for at official retirement if you have such flexible control over your income.  I think it could actually be an interesting challenge!
Last edited by MachineGhost on Thu Dec 03, 2015 2:47 pm, edited 1 time in total.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by barrett » Thu Dec 03, 2015 2:45 pm

buddtholomew wrote:
barrett wrote:
buddtholomew wrote: Looks like it's LTT's now. Sure makes the PP look obsolete doesn't it?

So much for it being a rising dollar issue. Dollar is down 1.5% and gold is up pennies.
Hey Budd... serious question

Do you think the PP is just a bad idea all the way around or is it in your opinion just not set up to deal well with whatever market conditions we have now? No agenda here. I am just curious. Thanks.
Honestly Barrett, I don't know what to think anymore. I used to believe that diversifying into gold, bonds and cash would make my portfolio more conservative. Now it appears the inclusion of gold and treasuries has made the portfolio more aggressive as compared to a more stock heavy allocation. How else do you explain gold down 11% YTD and treasuries down 5% (including today's 3% decline)? I just don't understand what I am holding anymore. All I do know is I continue to lose money.
Well, my own opinion is that diversifying into those assets does make a portfolio less volatile. What I think might be happening with you (and believe me, I tend to be wired the same) is that you are looking at all of this through a microscope when the best thing is to probably step way back and think about how the next 40 or 50 years might play out. Lots of portfolios produce beautiful upward-sloping lines on a 40 to 50 year view, but in order to get that (and beat inflation), one has to go through lots of short-term ugliness.

Internet forums and having minute-by-minute updates are not likely to help much! Maybe we should all adjourn and come back in five years to compare notes.

Back to your last post for a second... If you look back at how the PP assets have performed historically, gold down 11% and LTTs down 5% in a year is not really unusual. There's just been nothing to really pick up the slack this year. Down years really stink when it's our money that is involved!

Edit: Also the PP gave us all that big head fake in January when both bonds and gold were way up. That's part of the current pain... that a 4X25 is well down from its earlier highs. My take is that as a whole the PP is probably just reverting to its mean performance. It got ahead of itself. That's less than ideal in the short term obviously, but ultimately these are just bonds, stocks, cash and some yellow stuff, none of which are capable of working magic. Which is why we work and save. Just thinking out loud hear. All my posts should be taken with a grain of salt.
Last edited by barrett on Thu Dec 03, 2015 2:57 pm, edited 1 time in total.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Pointedstick » Thu Dec 03, 2015 2:46 pm

MachineGhost wrote: Sophie and PS hit the nail on the head.  My PP buttkicking has very little to do about asset allocation per se and everything to do with being able to stick with a ROBUST investment plan super long-term that I can pour income into without another thought.
This is one of the reasons why I like Vanguard's platform so much. You can set up monthly transfers and auto-investments and then completely forget about the whole thing. There's something about a machine doing everything that seems to make it easier, at least for me. I can do 50% or 100% stocks there and not feel the least bit bad.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by MachineGhost » Thu Dec 03, 2015 2:52 pm

Pointedstick wrote:
MachineGhost wrote: Sophie and PS hit the nail on the head.  My PP buttkicking has very little to do about asset allocation per se and everything to do with being able to stick with a ROBUST investment plan super long-term that I can pour income into without another thought.
This is one of the reasons why I like Vanguard's platform so much. You can set up monthly transfers and auto-investments and then completely forget about the whole thing. There's something about a machine doing everything that seems to make it easier, at least for me. I can do 50% or 100% stocks there and not feel the least bit bad.
Yes, that's the next step I'm thinking about.  Unfortunately, there's no easy way to do that kind of thing with a tactical PP just yet.  Even Schwab doesn't seem to have autoinvestments in ETF's, just autodepoists.  Does Vanguard include the ETF's or just their mutual funds?

But one thing I now consider highly irresponsible -- and budd's experience is very reflective -- is this braindead idea of lump sum investing into the PP all at once.  It's that kind of braindead crap from Browne, MT and craigr (who are not acknowledged financial experts) that rolls my eyes on top of the "dumbo" portfolio idea from Browne.  As Tyler's pixel charts show, the sequence of risk returns can run as long as 2 years, probably 3 if I remember my own stats correctly (I use daily data, Tyler uses yearly).  No, you should dollar cost average over a period of time (daily, weekly, monthly, quarterly) to get rid of that last remaining sequence of returns risk the all weather PP cannot eliminate.  And then you finally have the Top 1% portfolio.  Top .5% if you can finagle tactical.  ;)

I will be doing weekly deposits of the lump sum investment amount spread out whatever is the correct time frame.  I feel this is only sensible.  This stuff is highly emotional when you cannot afford to lose your precious capital.

Also, because the Browne Minimum Risk doesn't seem all that far off from the full deal for the bother, I think it'll be better to just carve out the cash for the "savings" from its bigger brother rather than having two portfolios.  In that deep 10% (or was 15%?) portion of cash that doesn't get touched during rebalancings.  Am I correct that the cash gets eating away at to buy assets that experienced losses which the sold winning asset doesn't completely cover upon liquidation?
Last edited by MachineGhost on Thu Dec 03, 2015 3:05 pm, edited 1 time in total.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by sophie » Thu Dec 03, 2015 2:54 pm

No one is forced onto Medicaid.  The state is perfectly happy if you forget to apply.

Ironically, Medicaid patients potentially get better care than private patients do, although they're less comfortable.  They spend a lot of time in waiting rooms, see different doctors every time due to resident rotation schedules, and the clinics tend to be vomit colored and a bit smelly.  But the care standards are far, far higher than your typical private hospital.  I took my Dad to local/private hospitals initially, and the care was so awful it was shocking.  It felt like the staff were playing at being doctors and nurses, not doing it for real.

Stick to medical schools' primary teaching sites and you'll be fine.  Or, budget ungodly sums of money for private insurance into your early retirement plans, like $20K/year for a family plan & copays.

Barrett- your suggestion about adjourning for 5 years and then coming back to compare notes is great.  But we're all too prolific & noisy for that option :-)  plus this is too much fun.  (Lovin' the forum again guys!)
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Re: This Forum & Dissenting Opinions of the HBPP

Post by Pointedstick » Thu Dec 03, 2015 3:07 pm

Vanguard only allows auto-investment in their mutual funds, not the ETFs. I'll start another thread for the post-FIRE medical planning subject.

sophie wrote: Barrett- your suggestion about adjourning for 5 years and then coming back to compare notes is great.  But we're all too prolific & noisy for that option :-)  plus this is too much fun.  (Lovin' the forum again guys!)
Me too! It's so nice when the signal-to-noise ratio is high.
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Re: This Forum & Dissenting Opinions of the HBPP

Post by barrett » Thu Dec 03, 2015 3:08 pm

MachineGhost wrote: But one thing I now consider highly irresponsible -- and budd's experience is very reflective -- is this braindead idea of lump sum investing into the PP all at once.  It's that kind of braindead crap from Browne, MT and craigr (who are not acknowledged financial experts) that rolls my eyes on top of the "dumbo" portfolio idea from Browne.  As Tyler's pixel charts show, the sequence of risk returns can run as long as 2 years, probably 3 if I remember my own stats correctly (I use daily data, Tyler uses yearly).  No, you should dollar cost average over a period of time (daily, weekly, monthly, quarterly) to get rid of that last remaining sequence of returns risk the all weather PP cannot eliminate.  And then you finally have the Top 1% portfolio.  Top .5% if you can finagle tactical.  ;)
It's only costly if you have a bad entry point. I was lucky enough to have an entry point that was not bad (beginning of 2014). Of course a few years earlier would have been better! I think it's unfair to blame Craig & MT. All they did was write a book (and post prolifically on the topic for a long time). You're a thinking man, MG. You know there are good and bad entry points into any portfolio.

And most of us still have a lot of time on our sides. In 30 or 40 years your buy-in point will still matter, but not enough to put you in the poor house.... especially if you are able to add new money along the way.

Man, this PP thing was crap today! Hopefully tomorrow will be better.
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