beachbumbabs
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beachbumbabs
Joined: May 21, 2013
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April 21st, 2019 at 10:51:58 AM permalink
Netflix now a buy as it transitions from streaming service to entertainment platform...

https://www.cnbc.com/2019/04/16/what-a-1000-dollar-investment-in-netflix-in-2007-would-be-worth-now.html
If the House lost every hand, they wouldn't deal the game.
100xOdds
100xOdds
Joined: Feb 5, 2012
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April 22nd, 2019 at 11:53:11 AM permalink
Quote: beachbumbabs

Netflix now a buy as it transitions from streaming service to entertainment platform...

https://www.cnbc.com/2019/04/16/what-a-1000-dollar-investment-in-netflix-in-2007-would-be-worth-now.html


still waiting for the Trump stock market crash so I can move bonds back to stock funds
:)
Craps is paradise (Pair of dice). Lets hear it for the SpeedCount Mathletes :)
100xOdds
100xOdds
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May 10th, 2019 at 5:39:41 AM permalink
Sigh.. Even with this recent market sell off thanks to Trump bringing up more China tariffs, the total market find is still +8% over my bond fund when I switched over 2 years ago.
Craps is paradise (Pair of dice). Lets hear it for the SpeedCount Mathletes :)
AcesAndEights
AcesAndEights
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May 10th, 2019 at 11:43:00 AM permalink
Quote: 100xOdds

Sigh.. Even with this recent market sell off thanks to Trump bringing up more China tariffs, the total market find is still +8% over my bond fund when I switched over 2 years ago.


I would implore you to settle on a percentage of stocks/bonds that matches your risk tolerance and move your money into that configuration. Maybe 60/40 if you are risk averse.

Things could always be different "this time," but over the past 120 years of stock market history, stocks beat bonds for the long term. Just have to ride out the bumps. That's what the bond allocation is for, to smooth the ride a bit and still provide some return.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
billryan
billryan
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Thanks for this post from:
OnceDearodiousgambit
May 10th, 2019 at 11:56:20 AM permalink
Someone who is surprised stocks are outperforming bonds might want to let a professional handle their money.
SOOPOO
SOOPOO
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May 10th, 2019 at 3:11:01 PM permalink
Quote: billryan

Someone who is surprised stocks are outperforming bonds might want to let a professional handle their money.



But most professionals will tell a 30 year old doctor (me 28 years ago) to have x% in stocks, y% in bonds, and z% in cash. Other than small emergency cash fund I kept 100% in stocks until very recently. Outperformed BY FAR all my cohorts who used a "professional" to handle their money. And these professionals charge something approaching 1% of asset value EACH YEAR for the bad advice they were offering me.
AcesAndEights
AcesAndEights
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May 13th, 2019 at 8:34:27 AM permalink
Quote: SOOPOO

But most professionals will tell a 30 year old doctor (me 28 years ago) to have x% in stocks, y% in bonds, and z% in cash. Other than small emergency cash fund I kept 100% in stocks until very recently. Outperformed BY FAR all my cohorts who used a "professional" to handle their money. And these professionals charge something approaching 1% of asset value EACH YEAR for the bad advice they were offering me.


Kudos to you - advisors who charge a percentage of assets under management are vile thieves. Good work avoiding them. The truth is, it only takes a little bit of education to manage your own money far better than most advisors, since no one will care for your money like YOU. I'm sure there are some good financial advisors out there, but the more ethical business model is to charge a flat fee per consultation. Of course, less money in it that way...

100% stocks is very aggressive at any age - but I hear more and more young folks going that direction on the Mr. Money Moustache forums. It really tests your appetite for risk during events like 2000 and 2008. Can I ask you what your timeframe is for retirement, and what your percentage in bonds is presently? I like to compare numbers like this, feel free to not answer if you please.

I'm 34 and my wife and I are shooting for an early retirement circa 2029 based on high income, frugal living and aggressive savings/investment. (lots of factors in play here, obviously). For the past several years I have carried 10% bonds. This year I inched it up to 11%, and will be adding one percentage point per year if we stay on track - if projections change, I will pause the bond ramp. Not included in this calculation is cash for emergencies, but I don't look at that as a percentage of assets, but rather base it on current spending and keep a few months cushion.

My goal is to implement a "bond tent" - a relative new area of research. The traditional advice is to add more bonds as you get older and nearer retirement, and then KEEP adding bonds as you grow older from there (since you want to preserve your capital in your elder years and provide stable income, as the theory goes). But since stocks always (again, in recorded history) outperform bonds over the long term, your portfolio will basically stop growing in your elder years based on this strategy. If you have enough, that's fine, but personally I'm hoping to not work a day longer than I need to, so getting stock-like performance well into retirement is important.

But, the risk of a big market downturn right before or after you retire and stop contributing can lead to failure (sequence of returns risk). So the bond tent is meant to manage that risk by making your portfolio a little more resistant to these forces right at the most important times - leading up to retirement and right afterward. You increase the bonds leading up to your date, then slowly sell them off first thing in retirement, to return to whatever your desired allocation is long term. So for me, we'll go from 90/10 --> 80/20 --> 90/10 over about 20 years, centered on retirement.

Long winded article on this:
https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/
That article was written to a more standard audience with respect to retirement age, so I've adjusted the formulas a bit for early retirement (ending up with more stocks at the end to fuel higher growth up until the day I croak and leave whatever's left to my kids).
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
SOOPOO
SOOPOO
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May 13th, 2019 at 8:48:46 AM permalink
My retirement window is...... soon! Highly likely I retire before Labor Day. If I told you my net worth and said I have 20% in bonds now that might be somewhat misleading. I will be getting a 'defined benefit plan' pension from NYS of lets say $60k per year, and eventually Social Security of lets say $30k per year. So lets say my net worth is $5 million. But I would want to count the $90k per year as approximately a $2.5million dollar bond. So I have $1million in real bonds, $2.5million in make believe bond, and $4 million in stocks. (Numbers used as an example, of course)

So an advisor would tell me being only 20% in bonds is bad as I'm about to retire, but I look at it as $3.5million out of $7.5 million, or nearly 50%.
AcesAndEights
AcesAndEights
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May 13th, 2019 at 8:58:23 AM permalink
Quote: SOOPOO

My retirement window is...... soon! Highly likely I retire before Labor Day. If I told you my net worth and said I have 20% in bonds now that might be somewhat misleading. I will be getting a 'defined benefit plan' pension from NYS of lets say $60k per year, and eventually Social Security of lets say $30k per year. So lets say my net worth is $5 million. But I would want to count the $90k per year as approximately a $2.5million dollar bond. So I have $1million in real bonds, $2.5million in make believe bond, and $4 million in stocks. (Numbers used as an example, of course)

So an advisor would tell me being only 20% in bonds is bad as I'm about to retire, but I look at it as $3.5million out of $7.5 million, or nearly 50%.


Sounds good to me. Later on I may do a similar calculation with projected future SS payments, but at present I don't even account for them as I'm so young. The program will undoubtedly change...I doubt I will get *nothing*, but probably less than what they are projecting for me now. No pensions or any other defined benefit plans, just my 401(k)s and IRAs.

It's funny as my in-laws said that they expected SS payments would be means-tested by the time they retired. They are now retired, and deferring SS for now, but have lots of retirement assets saved. Basically, they don't need SS, but it's still coming to them. A generation later I'm thinking the same thing...
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
SOOPOO
SOOPOO
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May 13th, 2019 at 9:03:40 AM permalink
Quote: AcesAndEights

Sounds good to me. Later on I may do a similar calculation with projected future SS payments, but at present I don't even account for them as I'm so young. The program will undoubtedly change...I doubt I will get *nothing*, but probably less than what they are projecting for me now.

It's funny as my in-laws said that they expected SS payments would be means-tested by the time they retired. They are now retired, and deferring SS for now, but have lots of retirement assets saved. Basically, they don't need SS, but it's still coming to them. A generation later I'm thinking the same thing...



You have SMART in laws! As soon as all three (House, Senate, President) are all Democrat expect the assault on "The Rich" to be ramped up. So I plan on starting Social Security even at the reduced amount as soon as I'm old enough.

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