The Worst Retirement Investing Mistake

[cute fuzzy bunny]

Sorry.....I don't understand you comment.

Thats okay, I was intentionally oblique.

 

[nun]

Thats okay, I was intentionally oblique.

......and I'm obtuse.

 

[Lsbcal]

I read and recommended the Investor's Manifesto by Bernstein. That was written in 2009. Since then I think he has changed to a more conservative tack, maybe even super conservative. I'm a bit surprised as he is so analytical and this feels like an emotional afterthought to client trauma.

In a recent Bogleheads thread Bernstein seems to recommend going very short term in bonds whereas others (Swedroe) seem to be more steady in their bond advice.

So it just shows that one has to take investment advice with a huge grain of salt.

P.S. FWIW, I changed my investment approach as a reaction to the 2008 crash, but no advisor would approve of my approach. Feels great to be out of the pack. I still like to hear from the respected advisors though.

 

[mathjak107]

one thing ill say about all these gurus, if your going to predict ,predict ofton.

so nothings changed in the world but now bonds are good .?

William Bernstein: Don

 

[audreyh1]

one thing ill say about all these gurus, if your going to predict ,predict ofton.

so nothings changed in the world but now bonds are good .?

William Bernstein: Don

To be fair, he's still telling people to stay under 3 year duration. He isn't telling people to buy bonds (well, except for TIPs). He's essentially telling them to stay in cash and very near cash.

 

[mathjak107]

well based on all his concerns in the interview where he stated he wouldnt buy bonds all those reasons apply to the longer term tips too.

im just reading the e-book now but havent finished it yet as the math makes my hair hurt lol.

boy looking at all those negative tip rates today im not so sure i have much faith in his plan. at best you can only hope to see the inflation kicker over time and no base rate as rolling over the shorter term ones at negative rates will turn positive hopefully but you still have the longer ones at negative to zero or so .

much of the problem with all this stuff is it works until it doesnt. nothing beats a dynamic plan that changes as the big picture changes .

im going to start out with my conservative fidelity insight newsletter model and adjust it in real time as time goes on. ill adjust allocation wise and spending wise.


there have been so many plans and theorys in my lifetime that just vanished over time.

anyone remember the armadillo investing strategy by i believe richard band from the 1980's or so?

that was the one with 90% in treasury notes and 10% in gold.

i havent backtested it but i bet that died a horrible death and failed when rates plunged and the 10% in gold couldnt carry the weight of lifting everything after rates went to levels that were just never anticipated.


all these thoughts , stratagies and ideas remind me of things like milk- good or bad? eggs-good or bad?

things only hold true until they dont then its on to the next idea .

in fact many things we think are true are only true because we are measuring the wrong things or dont even know what it is we were supposed to measure.

being an old audiophile all these financial ideas remind me of when cd players first came out.

they measured so perfectly yet sounded so bad.

we all thought it was because they were really revealling everything good or bad in the recording. afterall on paper it was perfect.

well it turned out they werent perfect. the early ones had a distortion we never knew existed so they couldnt measure it.

it was caused by the brickwall filters of the day that changed the digital to analogue.

any way the point is everything looks like it will work when back tested or analyzed on paper but the real world has a way of making sure things dont hold true as soon as you adopt the plan.

 

[Lsbcal]

...(snip)...
much of the problem with all this stuff is it works until it doesnt. nothing beats a dynamic plan that changes as the big picture changes .
...

I agree to a point. Some level of adjustment should be planned for i.e. one should have a plan to adjust the plan. Having some foundation and plans for some what-if scenarios should help avoid emotion charged panicky adjustments.

One planning tool I use is a diary. It is on one tab of my liquid assets spreadsheet. The idea is to just put down the key ideas and changes I make each year and to keep those succinct with only a few lines per year. In most years there are only about 20 lines of text.