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mobby_6kl posted:That really gonna suck if you made big lump purchases last year though You'd still be ahead of 2008 levels after a 20% drop. And I know what country that is but is that the Nikkei or some other index?
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Mar 9, 2020 21:52
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The 225 is the clue: it's the Nikkei 225 index. https://en.wikipedia.org/wiki/Nikkei_225
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Mar 9, 2020 21:59
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Oh, I didn't even see that in the corner, derp. I did guess Nikkei, though  But for a lot of reasons, Japan isn't the US. Whether or not the US is capable of 30 years of sustained stagnation is another matter entirely. But, if the US economy stagnates for the next 30 years then I'm worried more about actually having money to invest than the value of my investments. Maybe we are on the precipice of 30 years of stagnation or maybe we're right back at a mini-2008. On a 30 year horizon, I'm more inclined to ignore Japan's single data point (and the huuuuge bubble of the 80s)
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Mar 9, 2020 22:08
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Plane landed. lol.
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Mar 9, 2020 22:18
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totalnewbie posted:Oh, I didn't even see that in the corner, derp. I did guess Nikkei, though Yeah the Japanese example serves as proof that it's possible, even in a modern industrialized country, but does not tell us if that is likely, or how likely. My gut feeling is that every new crisis or depression or recession is different from previous ones, and thus impossible to predict; that the cyclical nature of modern economies seems to be more of a rule and so more predictable that it happens but not predictable in terms of when it happens including when cycles start and end; and that the right conclusion to draw from all this is to be conservative in your estimates of long-term return, save enough money that you'll be able to retire comfortably even if a more pessimistic scenario plays out, and don't worry about things that would blow up all of our assumptions because there's nothing we can do about that anyway.
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Mar 9, 2020 22:25
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Leperflesh posted:Yeah the Japanese example serves as proof that it's possible, even in a modern industrialized country, but does not tell us if that is likely, or how likely. My gut feeling is that every new crisis or depression or recession is different from previous ones, and thus impossible to predict; that the cyclical nature of modern economies seems to be more of a rule and so more predictable that it happens but not predictable in terms of when it happens including when cycles start and end; and that the right conclusion to draw from all this is to be conservative in your estimates of long-term return, save enough money that you'll be able to retire comfortably even if a more pessimistic scenario plays out, and don't worry about things that would blow up all of our assumptions because there's nothing we can do about that anyway. I mean, if we're talking about providing basic human needs and dignity even if the economy turns sour and people can't get jobs or save enough money to keep themselves safe and secure......well, you know how I feel on the matter.
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Mar 9, 2020 23:01
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Pollyanna posted:I mean, if we're talking about providing basic human needs and dignity even if the economy turns sour and people can't get jobs or save enough money to keep themselves safe and secure......well, you know how I feel on the matter. That't not what's being discussed. What you're saying is something that would hopefully happen at some point, especially in a time like that, but we're discussing investing here. If your entire plan revolves around a black swan event you aren't likely to be successful even if things go to poo poo, because it might be a purple swan instead.
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Mar 9, 2020 23:12
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Motronic posted:That't not what's being discussed. What you're saying is something that would hopefully happen at some point, especially in a time like that, but we're discussing investing here. If your entire plan revolves around a black swan event you aren't likely to be successful even if things go to poo poo, because it might be a purple swan instead. I am advocating for nothing as dire as that 
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Mar 9, 2020 23:18
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Yeah basically it's this: surprises are surprises because they're not what we were expecting, and people who think they know what is coming are usually just as surprised, even if they were being super pessimistic and gloomy in their predictions. And secondarily: it seems as though the markets regularly have downturns, and so people who predict market downturns are always right eventually; but they're almost always wrong about the timing, until they finally have the luck to get it right, at which point they crow about how right they were even though their advice was at best useless and at worst harmful all those other times.
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Mar 9, 2020 23:25
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FateFree posted:This is what I'm trying to get a clear answer on. The expense ratio for VTWAX is cheaper than VTSAX + VTIAX separately. All the answers I'm hearing seem to be because people prefer choosing this ratio themselves. But I believe in the investing demystified strategy that says the markets are well informed, and I am too dumb to know any better, so I should simply buy the vtwax. By the way, this is the video I'm referring to. I've yet to hear any convincing argument as to why this is wrong: https://www.youtube.com/watch?v=LwTHLtuToSY This video makes a similar argument with links to papers that support the idea. https://youtu.be/RR7e1Y-HJxQ
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Mar 9, 2020 23:27
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Pollyanna posted:I am advocating for nothing as dire as that I know you're not. You've been picking up on these things fast. Just explaining the intended scope of the bolded part, not accusing.
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Mar 9, 2020 23:31
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holy gently caress boys, this is the exact perfect timing for me to just have 2 giant GICs cash out and looking to enter the market. gently caress yeah.
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Mar 9, 2020 23:42
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Leperflesh posted:Yeah basically it's this: surprises are surprises because they're not what we were expecting, and people who think they know what is coming are usually just as surprised, even if they were being super pessimistic and gloomy in their predictions. This has been predicted by epidemiologists for weeks now. Here's an article from Feb 11th with the head of Harvard's center for Communicable Disease Dynamics, where he says the likely scenario is "widespread transmission in the US" and "maybe the worst-ever flu season in modern times". Saying that it could be worse than the Spanish flu is pretty loving bad, and he said it four weeks ago. https://news.harvard.edu/gazette/story/2020/02/harvard-expert-says-coronavirus-likely-just-gathering-steam/ So this wasn't an unforeseeable event, only warned of by perma-bears. Long term planning includes taking insurance when risk of collapse gets too high. Unfortunately looking at what is happening in Italy, we are still on the cusp of this poo poo.
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Mar 9, 2020 23:45
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We are talking about predicting what the markets will do and exactly when, not predicting how a disease epidemic will play out. We can all agree that a disease epidemic is bad, and that it will affect markets, but nobody can predict exactly when the bottom will happen, whether the worst-case scenario has already been priced-in or not, and maybe more importantly, exactly when the recovery will start. The risks you take by moving to cash right now include both the risk that we are already at the bottom, and the risk that you wait too long after the bottom is found to get the money back into the market. And for the record, here's my long-term "insurance" for when bad poo poo happens to stocks:  There's a reason holding some bonds in your portfolio smooths out volatility, and the last week is a good case in point.
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Mar 9, 2020 23:51
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recommending VBMFX instead of VBTLX smdh
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Mar 10, 2020 00:10
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I don't have bonds because I'm a twenty-something but I did invest a little less last month to upgrade my emergency fund to a full year
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Mar 10, 2020 00:10
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Finally put in my stock split (Fidelity): 70% FXAIX (Fidelity 500 index), .015% exp ratio 20% FSPSX (Fidelity Intl Index), .035% exp ratio 10% FUAMX (Fidity Intermediate Treasury Bond Index), .03% exp ratio Looking good? I mainly was going for low expense ratios, and this seemed to be a good mix while showing good returns in the past few years.
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Mar 10, 2020 00:14
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I've been running a 5-year experiment but given recent events I'm taking a peek at the 4-year mark, since things might really go off the rails in the next year. I had a somewhat heated disagreement with a family friend in 2016 when we were discussing how to "prepare" for the presidential election. At the time he happened to be employed by the nation's top performing, most prestigious, and most exclusive private wealth management firm. He is no longer with the firm (his luck/skill ran out and he stopped picking winners) but on March 9, 2016 he boldly claimed he could outperform my plan of only VTSAX and offered to take me on as a client despite their usual requirement of $25M initial investment. I gave him $250k, and after exactly 4 years the firm has me in the following positions:  My performance: VTSAX increased by a factor of 1.466x His performance: My initial balance increased by a factor of 1.475x Not a bad performance overall, especially since they've been shaving 1% off per year as a management fee (although I've had to pay plenty extra in income taxes due to their churning, so it might not be fair to call him a winner at this point). I am incredibly surprised that they've been nearly identical but imagine there's going to be a huge divergence in the next 12 months.
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Mar 10, 2020 00:15
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GoGoGadgetChris posted:Not a bad performance overall, especially since they've been shaving 1% off per year as a management fee (although I've had to pay plenty extra in income taxes due to their churning, so it might not be fair to call him a winner at this point). You also haven't accounted for additional risk, which.....I assume in in there. If there were many outsized risks I'd consider that performance a failure.
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Mar 10, 2020 00:24
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pmchem posted:recommending VBMFX instead of VBTLX smdh I'm actually in VBMPX but I had to look that up, for the screenshot I just typed in "vanguard total bond market" and grabbed the first result. But that's a good call there. Institutional class shares please and thank you, and if you can access them (I can with my 401(k), institutional plus. The chart's identical, of course. GoGoGadgetChris posted:Not a bad performance overall, especially since they've been shaving 1% off per year as a management fee (although I've had to pay plenty extra in income taxes due to their churning, so it might not be fair to call him a winner at this point). What's inside those dropdowns? "public equities" I think just means "stocks". Also: if his returns are the same as yours, but he's put you into much more risky investments, then he is underperforming. Ask him to calculate the Sharpe ratio for you and compare it to your baseline. (you can find sharpe ratios for VTSAX here: https://finance.yahoo.com/quote/VTSAX/risk/) Leperflesh fucked around with this message at 00:30 on Mar 10, 2020 |
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Mar 10, 2020 00:27
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Leperflesh posted:We are talking about predicting what the markets will do and exactly when, not predicting how a disease epidemic will play out. Tomorrow, Russia laughs at Saudi Arabia and Saya hey if you want to sell your non-renewable resource for pennies then go ahead. We're going to slow production, put it in storage, and wait for prices to inevitably go up. Markets go wild (which way? Who knows. Maybe even go wild by doing nothing in response to such a crazy announcement.)
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Mar 10, 2020 00:38
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I have a bunch of money in a taxable brokerage account. It's all shoveled into VFIFX (vanguard target retirement 2050) because I'm lazy and didn't want to figure out how to do be ~tax efficient~ or whatever. It generated $1000 of non-qualified dividends in 2019, which I guess counts as regular income? shits down and I'm gonna be sitting at home a lot, so it seems a good a time as any to figure this out. Does this make sense as a lazy allocation for a taxable account: * 90% Vanguard Tax-Managed Capital Appreciation Fund Admiral Shares (VTCLX): https://investor.vanguard.com/mutual-funds/profile/VTCLX * 10% Vanguard New York Long-Term Tax-Exempt Fund Investor Shares (VNYTX): https://investor.vanguard.com/mutual-funds/profile/VNYTX I live in NY so being exempt from state taxes sounds nice but idk if it's actually a good bond fund to use.
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Mar 10, 2020 00:46
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Leperflesh posted:
Well, 10% cash and almost 20% fixed income, so risk might be less. Making sure you don't get hosed up too badly in an event like this is hopefully part of what these guys are doing for all those fees.
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Mar 10, 2020 00:55
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Couldn't you just ask your friend's performance after 5 years without giving him $250k
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Mar 10, 2020 01:31
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Leperflesh posted:Yeah basically it's this: surprises are surprises because they're not what we were expecting, and people who think they know what is coming are usually just as surprised, even if they were being super pessimistic and gloomy in their predictions. 
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Mar 10, 2020 01:50
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seiferguy posted:Finally put in my stock split (Fidelity): FUAMX instead of FUMAX is a significant bummer on Fidelity’s part.
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Mar 10, 2020 02:05
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GoGoGadgetChris posted:I've been running a 5-year experiment but given recent events I'm taking a peek at the 4-year mark, since things might really go off the rails in the next year. Not that I would advocate it, but I bet 100% VFIAX did better than both of you.
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Mar 10, 2020 02:07
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doingitwrong posted:This video makes a similar argument with links to papers that support the idea. Thank you for this, this all makes perfect sense and lines up logically with the other video. I think anyone who recommends VTSAX/VTIAX over VTWAX should watch this and reconsider.
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Mar 10, 2020 02:45
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Just pick one and stick with it. I highly doubt they differ that much.
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Mar 10, 2020 02:49
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VTWAX is .11 ER and VTIAX/SAX is .14 ER, plus vtwax automatically balances itself so its just objectively better.
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Mar 10, 2020 02:58
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FateFree posted:VTWAX is .11 ER and VTIAX/SAX is .14 ER, plus vtwax automatically balances itself so its just objectively better. My guy, your enthusiasm for VTWAX is extremely good but it's sort of coming across as "I don't fully understand the investment strategy I learned from YouTube and am seeking reassurance by arguing for it on the internet" VTWAX is very good. VTSAX is also good. A split of VTSAX with anywhere from 10-60% VTIAX is fine too. You'll be in good company with many savvy investors no matter which route you go, but the proselytizing is a bit weird
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Mar 10, 2020 03:04
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Of course that's why I posted it, I'm not an expert so all I can go on is what I read on forums and videos. I can only comprehend this stuff logically so it's confusing when there seems to be an objectively correct answer but few people seem to mention it.
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Mar 10, 2020 03:12
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mobby_6kl posted:That really gonna suck if you made big lump purchases last year though Question on the Nikkei index. The growth of share prices hasn't been much, but does anyone know what does total growth looks like when dividends are included? Do Japanese companies tend to pay out significant dividends? I'm just curious because the picture isn't quite as gloomy if a theoretical stockholder is pulling out, say, 3 or 4% dividends annually.
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Mar 10, 2020 03:41
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seiferguy posted:Finally put in my stock split (Fidelity):
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Mar 10, 2020 04:40
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FateFree posted:Of course that's why I posted it, I'm not an expert so all I can go on is what I read on forums and videos. I can only comprehend this stuff logically so it's confusing when there seems to be an objectively correct answer but few people seem to mention it. It is not the right answer... It is an answer. Based on the options I have in my 401k and HSA I would be more weighted than I want in US than I want. So in my taxable I by more INT, where it is also more tax efficient.
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Mar 10, 2020 04:52
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FateFree posted:This is what I'm trying to get a clear answer on. The expense ratio for VTWAX is cheaper than VTSAX + VTIAX separately. You did the math wrong. VTSAX is .04%. VTIAX is .11%. According to my napkin math, a 50/50 split between the two would be an ER of .075%, with the expense ratio decreasing the heavier you get into VTSAX. You'd have to be ridiculously heavy into VTIAX for a blend of these two funds to be more expensive than going 100% VTWAX. International is more expensive, has lower returns, and is more risky due to not having the stable, long track record we have with the S&P 500. It's not hard to understand why people consider having less international than the market weight would determine.
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Mar 10, 2020 05:10
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Now that is helpful, thank you. Apparently it was hard for me to understand!
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Mar 10, 2020 12:13
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Leperflesh posted:
Yes, but it also brought us back to a price the S&P saw in September 2018, basically. And pretty close to January 2018. Just being blunt, I think you're cherry picking a little bit. I could just as easily say that if I had invested two years ago, I would have made roughly 3% in two years. For all the risks of taking on the market, as opposed to a safe investment, paying off debt, etc. And that really sucks. I'm not saying people shouldn't be in the market long term, that they should try to market time, etc. But sometimes the market cheerleaders go a little too far. This blows. There's no question about it. SlyFrog fucked around with this message at 15:29 on Mar 10, 2020 |
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Mar 10, 2020 15:25
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Let me preface this by saying i am not going to be withdrawing from my 401k. Someone in another thread said they would be withdrawing it due to the market crash so that they can pay off credit cards and it got me curious about the taxes involved in withdrawing, so I have a pretty simple question. I know you pay income tax on it when you withdraw, but is that based on your tax bracket when you contributed, or your tax bracket when you withdraw?
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Mar 10, 2020 15:54
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Woofer posted:Let me preface this by saying i am not going to be withdrawing from my 401k. Someone in another thread said they would be withdrawing it due to the market crash so that they can pay off credit cards and it got me curious about the taxes involved in withdrawing, so I have a pretty simple question. It's when you withdraw. It's an additional advantage of retirement accounts, as the idea is that your marginal rate will often be lower when you withdraw than it was when you were making the money.
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Mar 10, 2020 15:56
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