Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-16-2021, 09:54 AM   #81
Full time employment: Posting here.
 
Join Date: Apr 2005
Posts: 772
Good interview with William Bernstein in Barron's that's relevant to this discussion:

https://www.barrons.com/articles/hes...ks-51620420500
kevink is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-16-2021, 10:34 AM   #82
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 33,395
Quote:
Originally Posted by kevink View Post
Good interview with William Bernstein in Barron's that's relevant to this discussion:

https://www.barrons.com/articles/hes...ks-51620420500
Good no nonsense from Bernstein, as usual.

A couple of snippets:

Quote:
I can tell you stock returns are going to be lower than they’ve been for the past three decades. Annual returns are going to be in the range of 4% to 6% nominal over the next several decades.

I can’t tell you what they’ll do over the next decade. That’s too short a time. It’s entirely possible over the next 10 years, we’ll see stock returns at 10% or 15% annualized, and it’s entirely possible we’ll see 0% returns.

Regarding bonds, Bernstein said:

Quote:
There’s a risk. And the question you have to ask yourself is whether you’re being compensated for that risk. And the answer is maybe not. The only truly safe investment out there in the short term is Treasury bills.
He still thinks stock market is the place to be, even if the return is not as good as it used to be. Additionally, he thinks foreign stocks have a good chance to outperform US stocks. And small and value stocks will do better than large cap stocks.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 05-16-2021, 10:50 AM   #83
Recycles dryer sheets
 
Join Date: Apr 2005
Posts: 393
Quote:
Originally Posted by GenXguy View Post
Lower returns, but even more important, MUCH lower REAL returns (think negative) when factoring in runaway inflation, which we are already seeing skyrocketing, with the worst to come. And actually much worse than the government figures. CDs/savings/MMF are losers, bond funds will be hit when the Fed is forced to increase interest rates due to hyperinflation, and stocks are greatly overvalued and are certain to crash one of these days, like when the Fed starts to tighten things up. There's no where to hide.

If you believe that, short the market
__________________
-----------------------------------------------------
Whatever you do will be insignificant, but it is very important that you do it.
mickj is offline   Reply With Quote
Old 05-16-2021, 10:59 AM   #84
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,710
Quote:
Originally Posted by GenXguy View Post
Lower returns, but even more important, MUCH lower REAL returns (think negative) when factoring in runaway inflation, which we are already seeing skyrocketing, with the worst to come. And actually much worse than the government figures. CDs/savings/MMF are losers, bond funds will be hit when the Fed is forced to increase interest rates due to hyperinflation, and stocks are greatly overvalued and are certain to crash one of these days, like when the Fed starts to tighten things up. There's no where to hide.
I'll respond with Nassim Taleb's favorite: "Don't tell me what you think. Show me your portfolio." If you truly believe this statement then you must be out of the stock and bond markets completely.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 05-16-2021, 11:15 AM   #85
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 33,395
I believe that stocks will fluctuate. And that's why my porfolio always has a few dozens of option contracts. When a stock goes up like crazy, I sell covered calls to sell it even higher. When a stock drops for nothing bad that I perceive, I sell cash-covered puts to buy it even cheaper.

And I do think bonds ain't worth having for their risks. So, I have little, and most of it is inside some balanced funds.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 05-16-2021, 03:20 PM   #86
Full time employment: Posting here.
 
Join Date: Apr 2005
Posts: 772
Two more quotes from the Bernstein interview:

"How is your own money invested?

Very complexly. If you read my book, I believe there is an excess return over the market for value stocks and small stocks. And it’s worked out well in the long term, but not over the past decade.

What are your actual percentages in different asset classes?

I’ve always been close to 50/50 stocks and bonds, and I divide that pretty evenly between domestic and foreign stocks. I overweight small stocks and value stocks.

I think foreign stocks will outperform domestic stocks. I think that’s a 55% to 60% probability, so don’t bet the farm on it."

Just didn't want anyone to think that he didn't own bonds just because current yields are atrocious.
kevink is offline   Reply With Quote
Old 05-17-2021, 11:32 AM   #87
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,526
Thanks for the Bernstein link.

I think I get warm and fuzzy about index funds with this quote:
Quote:
You made your reputation by recommending low-cost index funds. But your latest book is called ďThe Delusion of Crowds.Ē That seems like an argument not to own index funds.

Iím not sure thatís the case. If I suppose if you want to connect the book with my investment philosophy, itís a book about why people donít do the right thing. They invest in hot mutual funds because it seems like the right thing to do, but in the end itís not.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 05-17-2021, 11:48 AM   #88
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,710
Quote:
Originally Posted by mickeyd View Post
... I think I get warm and fuzzy about index funds with this quote:
Yes. I don't know of a single scholar of stock market investing who doesn't say the same thing: Malkiel, Ellis, Buffett, Swensen, Fama, Bogle, ... The list is nearly endless.

The "who doesn't say it" list is also large, but AFIK limited to the legions whose income relies on customers believing the myth that stock picking works. As Upton Sinclair told us ďIt is difficult to get a man to understand something when his salary depends upon his not understanding it ."
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 05-17-2021, 01:13 PM   #89
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 33,395
Quote:
Originally Posted by mickeyd View Post
Thanks for the Bernstein link.

I think I get warm and fuzzy about index funds with this quote:
Well, the good gurus all say it, but they meant it for the average joe.

Buffett said the same thing, but he's an active investor. Bernstein himself has an international/small-cap/value tilt, as he said in the same article.

What they mean is that you could do a lot worse than indexing, and that is true. However, they still try to get themselves a little more than the index.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What can we expect in returns street FIRE and Money 23 03-30-2017 06:18 AM
Buffett: Don't expect returns over 7% over next century cardude FIRE and Money 84 03-07-2008 05:30 PM
Diversifying Doesn't Lower Risk, But It Does Lower Potential Gain justin FIRE and Money 44 11-05-2005 05:16 PM

» Quick Links

 
All times are GMT -6. The time now is 02:30 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.