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16451 Surly 1%About Dbeasy

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The Dallas Stars 2024-2025 Season Thread: Win Now, Talk Later
Dbeasy replied to Longhorn_Fan68's topic in Other Sports
Damn Edmonton is fast. I hate watching them. -
Charges dropped you jump to conclusions little bitches.
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Jeez the speed at which some people on Surly pronounce the guy guilty and bang the gavel is disturbing. I hope every one of you gets violated by a Williamson County deputy.
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I know Immamac doesn't want to hear this, but I've noticed when you go back and look at old threads a ton of content is now gone, even more than in the past. I assume this is because of the changes Immamac made with Twitter and other embedded content? If so, it really sucks. If that's not the reason, then what is? Going back and looking at old content was huge, whether it was for travel tips, a laugh, or something else, it really stinks that this valuable information is gone. And now not being able to copy and share a funny Tweet with friends that was brought to our attention by a posting on the site also sucks.
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Here is a simple comparison of a 100% US Total Stock Market Portfolio Performance over 30 years with a 4.5% withdrawal rate. Note that the future expected returns on stocks for the next 10 years is well below this monte carlo simulation. Performance could be way worse. Nevertheless, the portfolio fails 16% of the time. Now, here is a 60% stock/ 40% Total Bond Market Porfolio with the same other parameters. You lose on the upside potential, but your chances of total failure drop by 9%. A 50% Trump Coin and 50% Doge Coin will produce a 100% certainty of success because we live in Idiocracy.
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Can you turn your focus to Trump and do something about that? Thanks.
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Well there's no value in you and me arguing about it. Your better bet is to go argue with the entire world's financial industry analyses. It's math.
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When people ask me how much money is enough that they don't have to worry about retirement money, I always tell them that if their spending needs in retirement are below the level of interest and dividends kicked out of the portfolio every year, then you really don't have to worry too much about retirement money. When you have to rely on a certain return from the portfolio, above interest and divideds, then you tend to worry about your portfolio performance. In living off dividends and interest, in a downturn, dividends may get cut but they don't usually get cut that bad and they recover over time. So the worry there is pretty muted. Of course, what I don't tell them is that as soon as they get comfortable living on dividends and interest, a lot of people want to ramp up their spending
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How do you think about carving out porfolio space for these two types of investments? For example, if someone has a 60/40, would you take from both groups, or one of the groups?
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@Goredho didn't describe his investment and retirement horizon. If he's at or near retirement the value as a portfolio diviersifier is exactly as I just described, so I'm not quite sure what's not clear. If he's far from retirement, I do think there are some questions about that asset allocation. However, as I said above, the current stock market has a historically high valuation, with a future expected return over the next 10 years as low as 4-5% according to several financial services providers. Will it do better than that? Hopefully. Bonds have a similar outlook for expected return. So going to 60/40 right now isn't a crazy idea for anyone. You could argue it might be a very good idea. Same returns, less risk. I wouldn't do it if I were in my 30's, but if it helps someone sleep at night, or more importantly not panic in a stock crash and sell all their stock, then moderating stock holdings can be a decent idea. I agree with you that bonds are not a perfect hedge against stocks. I specifically used the term "often" and not "always" when describing the lack of correlation with stocks. As you said, for the last few years sometimes they've been moving in a more correlated way because of the economic environment. However, over long time periods it's been shown historically that bonds can help improve portfolio performance. Are there other better ways? Sure. There are hundreds of portfolios you can find on the internet and from financial advisors all claiming superior performance to the 60/40 portfolio, with commodities, smal cap value stocks, TIPs, etc. Historically, the performance of these alternative portfoios is indisputable. It gets tricky when you talk about the future, though. Will all of these alternative portfolios still outperform? How much management is required? How much buying and selling of assets is required? What are the investment management fees? How complicated is the strategy. The beauty of 60/40 is that it's dead easy to manage, cheap, and tax efficient. As a side note, we have a whole generation of investors that have grown up with the mindset that stocks always go up forever and any pain on the downside is relatively short-lived and manageable. We may continue to see that for the next 100 years. Or, we may not.
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Sark clearly absorbed massive information from Carroll and Saban. Rodney Terry clearly absorbed nothing from Beard and Barnes.
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When you run monte carlo simulations of the potential market returns over various time periods, the fact that bonds often are not correlated with stocks helps reduce the odds of a retired investor running out of money. If a retiree takes out too much money for expenses for many years in a row while the value of stocks are highly depressed, they could run out. But what if you aren't retired or near retirement? For those that are 30+ years from retirement, I typically wouldn't have any bonds, IF you are the type of person that can watch your portfolio drop by 60% and be fine with it. That was a great strategy for the last 20 years. Right now, stock prices are at historical highs and bond rates are decent at 4-5%. So maybe having "some" bonds might make sense, but I wouldn't have much. If you are under 30 years from retirement, small and growing positions in bonds is often recommended to deal with the withdrawal scenarios I described above. For example, if someone plans to retire at 60 and are currently 55, having some bonds is a good idea because a massive market drop with a 10 year recovery period could lead to a person withdrawing at highly depressed stock prices. For me personally, I never held substantial bond positions until I had already retired and rates shot up in 2022. At that point I built my retirement bond portfolio holdings. Why? Because bond rates for the 10 years prior to 2022 sucked. I did hold substantial cash for a variety of reasons.
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Guessing the direction of the market is extremely difficult, and historically a loser's game. Time in the market always beats timing the market. With that said, we are seeing one of the first major events in a long time that has the potential to greatly shape the economic future of the US for the next decade or two. That shaping could be hugely negative, or positive, or somewhere in between. So, given the huge range of potential outcomes, and the fact that the stock market is at a historical high in valuation, moderating on the equity side is perhaps not a bad idea, if you are of an advanced age (5 years or less from retirement, or in retirement), and can afford to live with lower returns for awhile. Retirees often shoot for 60% equity and 40% fixed income in their portfolios. This provides a moderate return over time without taking on too much equity risk. Early in retirement, many people (myself included) established a bond "tent", shifting more to bonds to reduce the potentially bad scenario of major equity crashes early in retirement, raising the chance of running out of money during retirement. I moved to more bonds because bond rates aren't bad and equity is heavily over-valued right now. A typical bond tent would be 50% equity 50% fixed income, or 55/45. I'm actually down to 45% equity 55% fixed because I can afford to be that conservative and still fund retirement expenses, and because there is a decent chance Trump is destroying the economy and it may take a lot of time to recover. While Trump's objective of reducing government spending is good for America (get it from 6% of GDP to 3%), the way he and Musk are doing it (rapid, indescriminate, tariffs, disinformation, etc) will likely throw the country and the world into a recession, if he hasn't already. The Atlant GDP forecast report for 1Q 2025 already has gone negative. If I were under the age of 40, I'd just hold like the Texans at the Alamo, and would even accelerate investments if the market drops 25%+. Buckle up.
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The Cloud Engineering Thread of Dominance
Dbeasy replied to StassneyHorn's topic in Business and Markets
I have a relative looking at it. -
The Cloud Engineering Thread of Dominance
Dbeasy replied to StassneyHorn's topic in Business and Markets
Super helpful.
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