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Old 03-02-2014, 01:49 PM   #41
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I'm wondering if there has ever been a 5 year period when bond returns have not exceeded inflation...Anyone know??
I think since you said you don't need to sell shares when they are down for 20 years, the more important question is: Has there even been a 20 year period where stocks did not out perform bonds?
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Old 03-02-2014, 03:29 PM   #42
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Originally Posted by braumeister View Post
If you have good reason for listening to the guy, I'd be interested to hear it.

But on the surface, the performance of his namesake fund has been so abysmal that I don't understand the fascination.
I have not owned his stock fund for many years but my respect for his opinion stems from the fact that my views very closely parallel his and he is able to articulate those views in a way that I can't..Market cycles are not comprised of just a few years so his lackluster performance proves little..Here is his latest commentary which consists of Letter to Shareholders..I think he is spot on...Time will tell..

"From the inception of Strategic Growth Fund on July 24, 2000 through
December 31, 2013, the Fund achieved an average annual total return of 3.94%,
compared with an average annual total return of 3.73% for the S&P 500 Index"

Not only did he outperform the S & P during that time period but he avoided most of the disaster of 2008..

http://www.hussmanfunds.com/pdf/sar1213.pdf
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Old 03-02-2014, 04:21 PM   #43
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"From the inception of Strategic Growth Fund on July 24, 2000 through
December 31, 2013, the Fund achieved an average annual total return of 3.94%,
compared with an average annual total return of 3.73% for the S&P 500 Index"

More to the point, the S&P's TR has been 7.16% for the past ten years.
Hussman's fund was -1.29% for the same period. Pretty tough to put a positive spin on that.
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Old 03-02-2014, 04:37 PM   #44
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More to the point, the S&P's TR has been 7.16% for the past ten years.
Hussman's fund was -1.29% for the same period. Pretty tough to put a positive spin on that.
I don't need to put a positive spin on it. I never touted his performance. You asked about why I was "fascinated" with him which seems to be a bit of an exaggeration of my statement. To have outperformed the S&P during that time period and avoided the catastrophe of 2008 is enough spin for me..
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Old 03-02-2014, 04:57 PM   #45
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I apologize.
I guess I was the one who was fascinated by what I thought was your reliance on the advice of an expert I would not have had much confidence in.
If you're convinced of the value of his guidance, that's all that matters.
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Old 03-02-2014, 05:01 PM   #46
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To have outperformed the S&P during that time period and avoided the catastrophe of 2008 is enough spin for me..
Yet you seem to have lingering doubt......... What's keeping you from jumping in with both feet? Or, if you feel you have made the total commitment, why do you seek consensual validation?
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Old 03-02-2014, 05:03 PM   #47
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If you're convinced of the value of his guidance, that's all that matters.
+1

lawman - Go for it! Jump in! There is no reason to hold back.
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Old 03-02-2014, 05:03 PM   #48
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IMHO capital preservation means a minimumit w of 20% equities. You focus too much on volatility risk and not enough on inflation risk.

At 57 you are looking at possibly 38 more years of retirement. With pension money coming in you have the luxury of being financially sloppy. It really doesn't matter if you go 100% equities, 100% bonds, or somewhere in between.

Yea, with pensions coming in you're all set. But I do have what I believe would be a much better idea on what to do with the rest of your gambling money. Instead of spinning the roulette wheel by market timing and playing the craps tables by reading the "financial" business press/newsletters, why don't you just throw it all my way. Everybody wins once in a great, great, great while in The Wall Street Casino, but why not blow it all on me instead?
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Old 03-02-2014, 05:18 PM   #49
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(Looking up at the guy way up on the ledge)- "Jump! Jump!"
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Old 03-02-2014, 05:22 PM   #50
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i'm wondering if there has ever been a 5 year period when bond returns have not exceeded inflation...anyone know??
1975-1980
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Old 03-02-2014, 05:29 PM   #51
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To have outperformed the S&P during that time period and avoided the catastrophe of 2008 is enough spin for me..
Avoided?
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File Type: png hussman3.png (28.8 KB, 20 views)
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Old 03-02-2014, 05:59 PM   #52
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Yea, with pensions coming in you're all set. But I do have what I believe would be a much better idea on what to do with the rest of your gambling money. Instead of spinning the roulette wheel by market timing and playing the craps tables by reading the "financial" business press/newsletters, why don't you just throw it all my way. Everybody wins once in a great, great, great while in The Wall Street Casino, but why not blow it all on me instead?
LOL....That's funny...I'll gamble on bond funds while others place their bets on the surety of the stock market..
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Old 03-02-2014, 06:22 PM   #53
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LOL....That's funny...I'll gamble on bond funds while others place their bets on the surety of the stock market..
I don't think too many here 'place their bets on the surety of the stock market.' Most keep a balanced approach, and the few with a very high weighting in equities have ways to deal with the volatility.

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Old 03-02-2014, 06:28 PM   #54
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I think since you said you don't need to sell shares when they are down for 20 years, the more important question is: Has there even been a 20 year period where stocks did not out perform bonds?
Or, since lawman says he's most worried about protecting his spending power, and he won't need to sell for 20 years, how well have stocks and bonds done against inflation?

Per this article (emphasis added)

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Stocks beat inflation during each and every overlapping 20-year period between 1950 and 2005, but bonds beat inflation only 70% of the time. Second, bonds return far less than stocks -- on average, just 2.3% a year after inflation between 1987 and 2006, compared with 7.4% for stocks. Even in bad times, stocks tend to beat bonds. Between 1967 and 1986, bonds actually lost an annualized 0.5% after inflation; stocks gained 2.1%. The tax treatment of bond income (except for municipals, which have very low yields) is unfavorable compared with that of capital gains and dividends on stocks. For tax-deferred accounts, this deficiency can be overlooked, but most of us also have taxable savings for retirement.
Now, that was a 2007 article, but as we know unless an investor entirely bailed out of the market in the aftermath of 2007-2008, he has done pretty darn well despite the "crash".

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LOL....That's funny...I'll gamble on bond funds while others place their bets on the surety of the stock market..
Laugh it up. Which approach provided more historical "surety"? You've got a long time horizon, and year-to-year volatility is not your biggest risk.
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Old 03-02-2014, 06:30 PM   #55
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Slightly switching gears here ...Without regard to the disadvantages of bond funds vs. individual bonds doesn't a bond fund offer the same advantage that bond ladders do?
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Old 03-02-2014, 06:41 PM   #56
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I'm somewhat skeptical of cherry picked data one uses to try to prove a point. As shown by using this chart CAGR of the Stock Market: Annualized Returns of the S&P 500

If one had invested in the S&P on Jan 1 2000 and remained invested through Dec. 31, 2008 he would have realized an annual rate of return of -3.7%.
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Old 03-02-2014, 06:52 PM   #57
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I'm somewhat skeptical of cherry picked data one uses to try to prove a point. As shown by using this chart CAGR of the Stock Market: Annualized Returns of the S&P 500

If one had invested in the S&P on Jan 1 2000 and remained invested through Dec. 31, 2008 he would have realized an annual rate of return of -3.7%.
Are you 9 years from needing the money? Who cherry-picked that single 9 year period? I used the 20 year window you specified earlier.

Do 20 year overlapping periods, compare the performance of stocks (with dividends re-invested) and bonds. Be surprised.
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Old 03-02-2014, 07:17 PM   #58
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Are you 9 years from needing the money? Who cherry-picked that single 9 year period? I used the 20 year window you specified earlier.

Do 20 year overlapping periods, compare the performance of stocks (with dividends re-invested) and bonds. Be surprised.

good point
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Old 03-02-2014, 07:47 PM   #59
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We seem to be beating a dead horse here.
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Old 03-02-2014, 07:50 PM   #60
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Slightly switching gears here ...Without regard to the disadvantages of bond funds vs. individual bonds doesn't a bond fund offer the same advantage that bond ladders do?
Yes. And bond funds typically have more than 1,000 bonds in them. So unless you have a very large bond portfolio, it is difficult to achieve the same level of diversification achieved by a bond fund versus building your own bond ladder.

As mentioned earlier, target date bond funds can also reduce the volatility associated with bond funds by limiting the bonds to only those with the same maturity date within the fund and not reinvesting them once they are due.
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