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Old 03-10-2011, 08:27 PM   #21
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It's easy you sell with the Whee and buy with Dawg's head banging but only if he is also into heavy meds . I have been using this method for six months and it works !
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Old 03-10-2011, 08:56 PM   #22
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Agree with 4out of 5. The crash didn't do much to reinforce the diversification point. Everything tanked at the same time.
Didn't treasuries do extremely well?
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Old 03-10-2011, 09:01 PM   #23
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I've learned a lot and still have a lot to learn. I started pouring money into my first Vanguard funds at the tail end of 08, and kept investing heavily until about mid 2009 (now it's monthly investments and throwing more in when I'm able on days when the funds are down). I didn't know nearly as much as I do now, and I still consider myself a novice in everything from general definitions and where they apply to investment theory, but the opportunity was so good that I felt it was worth the risk investing even without being some great sage and imminent Bogler.

I've learned I like buy low(er than it was yesterday) and hold for accumulating money through growth and reinvesting dividends is something I'm really happy with, and then shifting some of that profit into income generating bonds. At the moment, the actual strength of the market really isn't all that important to me, as long as there's some growth and dividends at better than .95% I'm getting at my bank.
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Old 03-10-2011, 09:05 PM   #24
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Didn't treasuries do extremely well?
Yes; however in the the even larger crash of 1973-74, treasuries did quite poorly so it really depends on the environment.

Ha
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Old 03-10-2011, 09:22 PM   #25
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That was well before my time, but perhaps there was another asset class that did well? gold maybe?
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Old 03-10-2011, 11:48 PM   #26
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That was well before my time, but perhaps there was another asset class that did well? gold maybe?
Gold definitely, and oil, and single family homes and commodities in general.

However, it is awfully difficult to be in the right thing all the time, especially as a retired person who would like some income and stability.

Ha
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Old 03-11-2011, 08:25 AM   #27
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Anyone care to predict the affect the Japanese earthquake will have on the market?
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Old 03-11-2011, 08:41 AM   #28
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Anyone care to predict the affect the Japanese earthquake will have on the market?
It will go down, then up...
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Old 03-11-2011, 09:04 AM   #29
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Anyone care to predict the affect the Japanese earthquake will have on the market?
It will be shaky.
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Old 03-11-2011, 09:05 AM   #30
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It will be shaky.
Now you've got me trembling.
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Old 03-11-2011, 09:25 AM   #31
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Yes; however in the the even larger crash of 1973-74, treasuries did quite poorly so it really depends on the environment.

Ha
Yep, difference between a rising interest rate environment and a falling interest rate environment. Wonder where rates are headed from here?
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Old 03-11-2011, 09:36 AM   #32
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It will be shaky.
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Old 03-11-2011, 10:28 AM   #33
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Agree with 4out of 5. The crash didn't do much to reinforce the diversification point. Everything tanked at the same time.
You've raised a very valid point. Here are the 2008 total returns for some Vanguard Funds:



S&P 500 Index -37.02

Total Stock Market Index -37.04

REIT -37.05
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Old 03-11-2011, 10:31 AM   #34
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If memory serves, only the total bond market fund was negatively correlated.
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Old 03-11-2011, 11:04 AM   #35
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If memory serves, only the total bond market fund was negatively correlated.
As well as the treasury bond funds. Swedroe is a proponent of taking your risk with equities and stick to only the highest quality bonds. In this past crash his point was well made.

DD
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Old 03-11-2011, 07:07 PM   #36
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I've been on a steady course of self-education since 2005. With some boglehead help, I simplified, and then expanded our total portfolio. However, I learned during this Great Recession that other strategies exist, and you don't have to ride things down 50%, and wait a few years to return to the previous high. Since we are accumulating, the lessons learned are different than for an early retiree. In fact, there are so many variables, such as when you started, etc., that some up control to an FA, or even a dogma.
I've seen a great deal of success applying momentum investing concepts to our retirement funds which receive new money every week. I follow moving averages on all of our funds, so that I have a very good idea of where things have been. I can't predict the future, but I have a plan for mitigating some of the downside.
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Old 03-12-2011, 04:32 PM   #37
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Agree with 4out of 5. The crash didn't do much to reinforce the diversification point. Everything tanked at the same time.
"Almost" everything tanked. Long treasury bonds rallied a ton.

But besides that, diversification still worked. Owning 100% Lehman fared far worse than 100% S&P Index. And a 50/50 allocation between the S&P Index and Total Bond Market Index fared better than just owning the SPX.

Diversification did exactly what it was supposed to do. What it didn't do was prevent any losses. But then it never was said to do that in the first place.
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Old 04-13-2011, 04:37 PM   #38
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Just reviewed a retirement overview by a Fido represenative that was done in 2007. It was very conservative portion of a Monte Carlo analysis. What struck me was that our assumption of income used for the study was high. Couple that small overestimate with the inflation assumption and it made quite a bit of difference on the portfolio survival.
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Old 04-13-2011, 06:35 PM   #39
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Target Retirement 2015 since jan 2006. After all these years finally becoming a better Boglehead - stay the course, hurry up just stand there, revision to the mean, close your eyes and let those Vanguard computers rebalance their little electrons out.

On the other hand - among 'my few good stocks' a few deck chairs on the Titanic were thrown overboard(sort of like an angry golfer) - mainly financials like BAC, Citigroup. Plus some painful dividend cuts.

Saint's didn't make the playoff's either.

Rats!

heh heh heh - so index/lifecycle funds for real money and 'a few good stocks' to cry and laugh with - for medicinal purposes to keep the hormones under control - don't you know.


P.S. My chickenheartedness theory required cutting expenses during the period of 'unpleasantness'. I really am cheap at times.
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Old 04-13-2011, 07:29 PM   #40
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We pretty much did what the article said, but have some friends who lost a ton by doing the following

One had 100% company stock in his 401K, it is now about 30% of what it was at it's height.
Did not watching Enron collapse teach them anything?
TJ
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