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About techboy

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  • Birthday 11/14/1973

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  1. ES Soccer Thread

    They couldn't even get the goal into the camera angle from where he took it.
  2. Tax Bill

    I didn't say you made it up. I said you needed to get better sources. There are so many awful things happening these days, it's becomes easy to believe even the most outrageous of claims, which is why we all need to make the extra effort to check ourselves, especially things that support our worldview. If you don't want to do it because it's the right thing to do, be selfish. Stuff like this just gives more ammunition to the whataboutism. So focus on that. There's plenty to complain about without going beyond the facts.
  3. Tax Bill

    I keep reading you typing something like this, and I keep thinking to myself that it doesn't make sense, because no mainstream outlet I've seen or read has been reporting that result, and it's illogical... Republicans are more than happy to cut taxes in a way that benefits corporations and the wealthy far more than the middle class, and they're more than happy to balloon the deficit, but it would be political suicide to actually RAISE taxes on the middle class immediately while doing those other things, and Paul Ryan and Mitch McConnell might be many things, but stupid isn't one of them. So I looked it up specifically. You're wrong. Please stop spreading false information, if for no other reason than it will backfire when the scared middle class potential Democratic voter realizes the calamity has not occurred. I'd also suggest getting some better sources, and as a side note, even if you WERE right, the underpayment penalty has so many provisions and waivers it's very unlikely most people would have to pay it, especially if they're just doing withholdings from a paycheck. It's designed to nail people that are intentionally underpaying, not mistakes. I actually underpaid once due to some weird circumstances and I ended up not even being close to the penalty. In any case, here's what politifact has to say on the issue: A couple of excerpts: Of course, they DO expire, so... But of course, they'll blame Democrats if that provision isn't made permanent, and use the increased deficit to justify cutting spending if it is. So there's plenty to criticize, but let's please try to stick to reality, not the liberal version of Fox.
  4. So I finally cut the cord, and to replace the channel surfing experience I'm trying out Pluto TV which is free (ad supported) and seems to just put together free streams with YouTube videos and such, which they curate into channels. They have a few traditional channels like Bloomberg, some "channels" they put together with clips (there's a wrestling channel), and even a channel that appears to be nothing but video from the front of a train in Norway. I almost spit out my drink this afternoon when I saw the Gorilla channel, though.
  5. Let's talk about investing! Stock market, ETF, etc.

    @LD0506 There is definitely a lot of truth in that meme, but I do think we get a little carried away in our opposition to Trump when we dismiss the stock market completely.The days of the pension are over, except for some government positions, so even most 99%ers have 401ks. The stock market rising benefits nearly everyone. Even Walmart associates have a 401k with 5% matching. It even benefits those teachers and cops that have pensions, because our state and local pensions rely on investment returns to have the money to pay out (often making unrealistic assumptions to avoid having to raise taxes), so either the market does well, state and local taxes increase, the feds step in and bail state and localities out, or a bunch of public servants lose their promised benefits. Obviously, that doesn't help the truly poor that are living paycheck to paycheck (or don't have a paycheck), but let's not oversell it. I don't know that I've ever read anything covering that specific issue, which is why people need to assess their need, willingness, and ability to take risk, because stocks ARE risky. In this country, things have always recovered in at most 10 to 20 years (less if you do it in real terms), but that doesn't mean they HAVE to. If you want to scare yourself, look at Japan. The Nikkei on Friday closed at 23714.53, so it STILL hasn't recovered in nominal terms. I haven't looked it up with dividends and inflation included, and I think I remember reading that they've had deflation, so it's probably not as bad as it looks, but I think that makes the point. It's been almost 30 years. You can mitigate that to some extent through diversification (it's one of the strongest arguments for including international), but if the US goes through anything close to that, we're going to be hurting. Most of us have to invest in stocks because it's the only way to meet our goals (the need part of the equation), but I don't know if it makes sense to get more aggressive than we have to. Unless, of course, you have A LOT of money and are interested in leaving a legacy. If that 20% would cover your entire retirement regardless, then whatever (that's the ability piece). An extreme case is Warren Buffett, who has said that when he dies, he's going to leave his wife instructions to put the money 90% S&P 500 index, 10% short term treasuries. He's giving most of his billions away before that happens, but I'm going to guess that she'll be okay even if the 90% tanks. And of course, you have to consider willingness. It's hard to know risk tolerance in advance, but again, there were plenty of people that panicked and sold out at the bottom in 2009, which is the absolute worst thing they could have done, so it makes sense to be conservative until you know for sure how you'd react.
  6. Let's talk about investing! Stock market, ETF, etc.

    Okay, @tshile , here's the longer version. Why those indexes: The CSRP and Bloomberg indexes are used because they are representations of the whole (U.S.) stock market and the whole (U.S.) bond market, respectively. That does not include international, but the results are the same. You want to invest in total markets because of the way risk is compensated. Basically, in the markets, people demand more return for riskier assets. This is why Greek bonds pay more than US Treasuries... if they returned the same, no rational person would buy the Greek bonds, because there is a much greater chance that they will default. The thing is, the market does not compensate for risk that can be mitigated, because someone else that can mitigate that risk away and will accept less return in order to obtain that asset. Single stock risk can be diversified away by holding many stocks. When Enron crashed, for example, it wiped out people that used to work there and had a huge chunk of Enron. People that held Enron in a total market fund, on the other hand, barely felt it. Diversification eliminated that risk. We don't want to take risk we're not compensated for, so we don't want to hold individual stocks. Individual stocks would be great if we could only pick Netflix (pre rise), but the research shows that stock picking is virtually impossible. I'd go further, but this post is already going to be long enough as it is. Anyway, diversification is often called the only free lunch in investing. So, one reason that the blog post I cited used those indexes is that the firm the CPA works for recognizes the research shows that market timing and stock selection are sucker's games, and promotes index funds. The other reason is that research is a lot easier when you take the market as a whole, rather than presenting the results for each individual sector or stock. It holds up for sectors, though. Why the theory predicts the data: To understand this, you need to understand a few terms first: Annualized Returns is pretty obvious, it's how much you make per year. Standard Deviation is a little more complicated, but as I mentioned earlier, it's the standard measure of risk in finance and economics. Basically it represents how wildly your returns vary, and obviously varying up is good, but varying down is scary. Sharpe Ratio was introduced by William F Sharpe, a Nobel Laureate in Economics. It uses the previous two ideas to come up with a risk adjusted return rating. A higher Sharpe Ratio means you are getting more return per unit of risk. Correlation Is how closely the returns of two assets follow each other. A correlation of 1 means that if you graphed the two assets, the lines would cover each other. -1 would mean they are exact inverses of each other. A low correlation means they don't act much like each other at all. Modern Portfolio Theory was introduced by Harry M Markowitz, who won a Nobel in Economics for it. The details are also way beyond the scope of this post, but the part we care about is that it postulates that by holding assets with low (or, better, negative) correlations together, and rebalancing, the total portfolio can have a higher return than the individual parts would predict. Anyway, theory predicts that bonds should have a low correlation with stocks, because they are different instruments. They are debt from a government or company, not ownership shares, and they are safer for a number of reasons, which are again beyond the scope of this post, but is why they pay less. And, of course, the data bears that out too... The information in my last post showed a correlation of .2. And that is why the data in my last post shows a fairly large increase in risk for a fairly small increase in return (a worsening sharpe ratio)... You're taking out an asset with a low correlation. Obviously, the numbers look a little different depending on what time periods you use and which indexes you look at, but the theory has held up, more or less, for 60+ years. You can read a little more about it here, with some of the math behind it: One of the interesting effects of this at the other end, is that even though stocks are more risky than bonds in isolation, a 20/80 stocks/bonds portfolio actually is SAFER than 100% bonds, not just in Sharpe Ratio but in actual standard deviation. Technically speaking, the best Sharpe Ratio is somewhere in the very low 20/80 area, but of course, you can't eat a Sharpe Ratio, so we are left with picking the lowest stock allocation that still accomplishes our goals, which is why most experts don't recommend going higher than like 80/20. The other reason is that everyone thinks they have an iron stomach, but watching the portfolio drop in a crash can be hard, and having even a small slug of bonds that aren't falling 50% or more can provide reassurance as well as a place to rebalance from.
  7. Let's talk about investing! Stock market, ETF, etc.

    I'm going to do the short and long answer thing again, but this time I'm going to do it in separate posts so @zoony can spare his eyes from glazing over again by skipping the second one. So, the short answer your first set of questions is this: You're right to be leery of cherry picking data, because it's something that shady fund managers do to try to prove you should invest with them. What I can tell you, though, is that I have done a lot of reading and research on this subject over many years now, and I chose the blog entry for two reasons: 1) The site is run by Dr. Wade Pfau, who is a CFA and professor of finance with a PhD from Princeton, and though he runs an advisory firm (which in full disclosure, that site is a way of gaining contacts for), McLean Asset Management is one of the good ones... It uses a fee only structure where they are paid for their services directly, not by putting clients in high cost funds that are not in their best interests. I trust Dr. Pfau, as do other people I trust. 2) The information presented is consistent with everything I have ever read on the subject. If you'd like to read more, I put a reading list on the first page of this thread, and if you google my username with investing at you'll find more articles and resources. So, the short answer is that the best academic research and theory predicts that 80/20 stocks/bonds will have almost the same return with less risk, and the actual data collected backs that up across many time periods. In the next post I will define terms, answer your questions more specifically, and try to explain WHY it happens. As to your other point, one year returns are basically meaningless. That's the short version (too late!)
  8. Let's talk about investing! Stock market, ETF, etc.

    The reason most experts recommend not going higher than 80/20 stocks to bonds is that you only get a little more return, but you take noticeably more risk. For example, consider the chart in this article: Annualized Returns Standard Deviation 100% Stock Portfolio 11.66% 15.18% 80% Stock / 20% Bond 11.03% 12.41% Data from 1/76 – 3/17. Stocks represented by the CRSP 1-10 Total Market Index and bonds represented by the Bloomberg Barclays US Aggregate Bond Index. Indexes not available for direct investment. Past performance may be higher or lower than future performance. Standard deviation is the usual measure of risk in investing, so you're taking roughly 25% more risk for roughly 5% more return, and a large part of that is that you're giving up the diversification benefit that allows better risk-adjusted returns according to MPT. As the article later notes: and
  9. Let's talk about investing! Stock market, ETF, etc.

    For health care, the only thing you can really do is use current numbers with perhaps some extra in case inflation in that area continues to outpace general, but there's of course no way to tell. For all anyone knows it could be single payer at that point, but currently at least you get Medicare at 65 so that's something you can use as a baseline. As to your other point, today's dollars DO tell us what they will be worth in 30 years because the estimates of return are in real terms, so they account for (expected) inflation. It'll be more, but the same purchasing power as the number it spits out today. Of course, that assumes the estimates will be right. They almost certainly won't be, but we do the best we can with the data we have and adjust as we go.
  10. Let's talk about investing! Stock market, ETF, etc.

    Short answer: It depends. Slightly longer answer: If your chosen allocation is 50/30/20, then that's aggressive but you're (relatively) young and assuming you have a relatively high need, ability, and willingness to take risk, then no need to rebalance... you're close enough. Long answer: It depends upon your desired allocation. What you need to do is sit down and figure out when you want to retire, about how much you'll need, and what you'll need to do to get there. There are various rules of thumb to figure some of this out. For example, the Trinity Study showed that a 4% (adjusted for inflation) drawdown rate would survive at least 30 years in every 30 year period they studied (including the Great Depression), so one easy way to figure out your target is to determine how much you want to pull in annually in retirement, and multiply that by 25. $40,000 a year would require a $1,000,000 balance, for example. Don't forget to account for any other income streams you may have (pension, Social Security if you want, etc.), and that some expenses will actually be lower (you're not saving or driving to work, for example), while others (health care, for example) might be higher. There are other ways to do this but they're beyond the scope of this post. Once you've done that, you need to figure out the time frame you have before you want to retire, and then how much return you need to hit that target, then set your allocation to do that. Length of time is easy, because you (hopefully) control how long you continue to work. How much you need is easy too. Just use a compound interest calculator like this one: The tricky part is figuring out your assumed rate of return to punch into said calculator. A lot of people assume things which are probably overly optimistic. I believe Dave Ramsey uses 12%. Historically, the S&P 500 returned 7% real (adjusted for inflation) for the period 1950-2009 (and you want to use real numbers so the end number is meaningful), but given valuations, most experts think that's too high to expect for the future, and it's probably a good idea to be conservative, so I don't think it's a good idea to assume that. What I do is use something like this: They have long term US Large Cap expectations at 5.9%, International at 6.5%, and Bonds at 3.1% Those numbers seem to be in real terms and are consistent with other sources I've read. That's just a forecast, but it's as decent a starting point as any. That would put your portfolio currently at (.059*50) + (.065*30) + (.031*20)= 5.52% projected real return long term. I would probably use 5% just to be safe, and because it's as good a number as any... no need for false precision with a forecast that is basically just an educated guess. You punch that into the calculator with your current portfolio value, your monthly expected savings, and your estimated years to retirement. If the number comes back at or above your goal, you're probably fine. If the number comes back less, you can either work longer, adjust to the idea of spending less in retirement, or make your allocation more risky by upping the stocks. This is where need, willingness, and ability to take risk come in. Be careful about adding risk, because it's called risk for a reason. Stocks really are risky. If they weren't, you wouldn't be paid to buy them. If you come back WAY over what you're shooting for, you can either decide to live like a king, or you can make your portfolio safer by adding bonds and reducing stocks. So, to actually answer your question, if 50/30/20 meets your goals, then no, you don't need to rebalance, because you're not that far off. If you've decided to change your allocation, then yes, you do.
  11. They also have a cultural identity that encourages egalitarianism and actively discourages standing out. The Danish, for example, have a saying that "The tall grass gets cut down' (roughly). An example of this is the restaurant NOMA, which is thought by many to be the best in the world. I saw the chef who started it on Anthony Bourdain. Now, New Nordic has swept the culture, but when he first opened, he got a lot of pushback from Danes who were upset he thought he was better than everyone else. Their system really works, and I would live there in a heartbeat, but it would require a major attitude shift from many countries to follow their example.
  12. The sad thing is I wasn't completely sure until I looked it up.
  13. Fake, according to this:
  14. Let's talk about investing! Stock market, ETF, etc.

    I usually read my posts over before hitting submit, to make sure I am conveying exactly what I intend to convey. Many a joke has been lost to the ether after I thought twice, for example. In this case, I read it over, and I thought to myself, "You know... this post where I say I am not getting on my high horse sure reads a lot like getting on my high horse." I hit submit anyway.
  15. Election 2018 Thread

    What I have read (although I can't find the article now), is that other ballots with similar problems have been counted in the past, so it's not like this is new. What's ironic is that Virginia had a bipartisan effort specifically to avoid this kind of controversy. Here's a New York Times article about it: and a relevant excerpt: I'd prefer the ballot not be counted, but I suspect most of us are going to see what we want to see, and I can see why crossing out the democrat to correct the double fill could be construed under these rules as a mark of additional support for Yancey, especially since the rest of the votes were for Republicans. As the article notes at the end: