Gyroscopic Investing

mathjak107 wrote: well i use a 50/50 mix . intermdiate term bonds will certainly not be the lead horse over the long term , equity's will . at times i hold reits too . no reason yet to veer , never was .

Well I use a 25/25/25/25 mix.  I don't know what will be the lead horse and when.  No reason to veer yet.

well thinking the stock market is going to go to zero  isn't being the sharpest knife in the draw .

mathjak107 wrote: well i use a 50/50 mix . intermdiate term bonds will certainly not be the lead horse over th long term , equity's will

Why use 50% bonds then....go with the 'winner', the bonds are such a lag on returns.....right...? 

Xan wrote:

mathjak107 wrote: well i use a 50/50 mix . intermdiate term bonds will certainly not be the lead horse over the long term , equity's will . at times i hold reits too . no reason yet to veer , never was .

Well I use a 25/25/25/25 mix.  I don't know what will be the lead horse and when.  No reason to veer yet.

except all our parts are powerful enough to be the lead horse themselves . so you need far more in gains in something to move forward .  you are counting on  more than below average returns happening .

a mix of stocks and intermediate term nd short term bonds can do okay with below average returns , since the bonds have so little  drag.

dutchtraffic wrote:

mathjak107 wrote: well i use a 50/50 mix . intermdiate term bonds will certainly not be the lead horse over th long term , equity's will

Why use 50% bonds then....go with the 'winner', the bonds are such a lag on returns.....right...? 

i need  the income , i am retired  . i  spent 25 years with only the lead horse  and grew a lot of money . i do not need the gains anymore and i do want less volatility so i match the volatility to the income draw i need . if i had a pension and this was legacy money yep it would still be all equity.

mathjak107 wrote:

Xan wrote:

mathjak107 wrote: well i use a 50/50 mix . intermdiate term bonds will certainly not be the lead horse over the long term , equity's will . at times i hold reits too . no reason yet to veer , never was .

Well I use a 25/25/25/25 mix.  I don't know what will be the lead horse and when.  No reason to veer yet.

except all our parts are powerful enough to be the lead horse themselves . so you need far more in gains in something to move forward .  you are counting on  more than below average returns happening .

a mix of stocks and intermediate term nd short term bonds can do okay with below average returns , since the bonds have so little  drag.

Why do you need bonds, since you already know stocks beat everything else.

And how do you know bonds add "little drag" ?

mathjak107 wrote:

dutchtraffic wrote:

mathjak107 wrote: well i use a 50/50 mix . intermdiate term bonds will certainly not be the lead horse over th long term , equity's will

Why use 50% bonds then....go with the 'winner', the bonds are such a lag on returns.....right...? 

i need  the income , i am retired  . i  spent 25 years with only the lead horse  and grew a lot of money . i do not need the gains anymore and i do want less volatility so i match the volatility to the income draw i need . if i had a pension and this was legacy money yep it would still be all equity.

Since when are returns not income?

intermediate term and short term bonds have  much less interest rate sensitivity than long term bonds .

mathjak107 wrote: intermediate term and short term bonds have  much less interest rate sensitivity than long term bonds .

Go 100% stocks, dividend stocks have higher returns than bonds.
And since you know 100% that stocks beat everything else anyway.......why not...?

dutchtraffic wrote:

mathjak107 wrote:

dutchtraffic wrote: Why use 50% bonds then....go with the 'winner', the bonds are such a lag on returns.....right...? 

i need  the income , i am retired  . i  spent 25 years with only the lead horse  and grew a lot of money . i do not need the gains anymore and i do want less volatility so i match the volatility to the income draw i need . if i had a pension and this was legacy money yep it would still be all equity.

Since when are returns not income?

i already told you why , i don't need the volatility of 100% equity anymore . i accumulated all i need . i just need enough volatility to support my income draw and provide legacy money .

a 50/50 mix does that for me . the swings are comfortable and the returns  meet income goal .

you do realize you should  modify the portfolio over time to meet your varying requirements .  if i had the pp in my accumulation stage ui wouldn't have had enough to retire .

now i don't need such a high allocation  but the pp does not interest me  in retirement for many reasons so my choice is a 50/50 model .

mathjak107 wrote:

dutchtraffic wrote:

mathjak107 wrote:
i need  the income , i am retired  . i  spent 25 years with only the lead horse  and grew a lot of money . i do not need the gains anymore and i do want less volatility so i match the volatility to the income draw i need . if i had a pension and this was legacy money yep it would still be all equity.

Since when are returns not income?

i already told you why , i don't need the volatility of 100% equity anymore . i accumulated all i need . i just need enough volatility to support my income draw and provide legacy money .

a 50/50 mix does that for me . the swings are comfortable and the returns  meet income goal

Ahhh....so you add some "lagging assets" as an insurance, to dampen volatility. Now we're getting somewhere.

Did you know btw that gold is the safest asset in the world? And has been for thousands of years?
Long before we messed around with paper garbage?

Maybe it's an idea to add a slice of that as well?

anyone want to make a friendly bet that it is once again equity's that leads the charge out of this funk ?
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Long term I think you're probably right.  But I think there's also a decent chance you'll see a gigantic drop in equities first.  If you held stocks through 2008 saying they'd recover and become the winner, in the long run you were right.  But you had to stomach a 40% drop.  That's the difference between PP loyalists and others.  We'll give up gains to minimize losses.  This feels like beating a dead horse with the head of a dead horse.

that is why i use a 50/50 mix . 2008  wasn't even a problem .

mathjak107 wrote: that is why i use a 50/50 mix . 2008  wasn't even a problem .

You would have never recovered were it not for the FED and virtually every CB in the world going fullretard madman mode, which is now in a slow-collapse.

mathjak107 wrote: that is why i use a 50/50 mix . 2008  wasn't even a problem .

Don't you see that you're open to the exact criticism you're levying against us?

dutchtraffic wrote:

mathjak107 wrote:

dutchtraffic wrote: Since when are returns not income?

i already told you why , i don't need the volatility of 100% equity anymore . i accumulated all i need . i just need enough volatility to support my income draw and provide legacy money .

a 50/50 mix does that for me . the swings are comfortable and the returns  meet income goal

Ahhh....so you add some "lagging assets" as an insurance, to dampen volatility. Now we're getting somewhere.

Did you know btw that gold is the safest asset in the world? And has been for thousands of years?
Long before we messed around with paper garbage?

Maybe it's an idea to add a slice of that as well?

well did you no long term gold was the worst place to put money and a t-bill did better the last 40 years .?

sorry but i don't see financial Armageddon  in my life time , don't need to protect against the sky is falling at this stage . when i see signs i will add it but certainly i have zero use for it now .

Xan wrote:

mathjak107 wrote: that is why i use a 50/50 mix . 2008  wasn't even a problem .

Don't you see that you're open to the exact criticism you're levying against us?

not at all , i m trying o explain to you that you are betting on not having below average returns in order for the pp to  succeed . you are betting on n outcome even though you think you are not .

mathjak107 wrote:well did you no long term gold was the worst place to put money and a t-bill did better the last 40 years .?

Not a problem.  We hold T-bills too!

mathjak107 wrote:not at all , i m trying o explain to you that you are betting on not having below average returns in order for the pp to  succeed . you are betting on n outcome even though you think you are not .

Betting on not having below average returns.  Well I suppose that's the goal (and bet?) of all investors, no?

great then if you had all the gold money in t-bills you would have had a better inflation hedge the last 40 years .

mathjak107 wrote:

dutchtraffic wrote:

mathjak107 wrote:
i already told you why , i don't need the volatility of 100% equity anymore . i accumulated all i need . i just need enough volatility to support my income draw and provide legacy money .

a 50/50 mix does that for me . the swings are comfortable and the returns  meet income goal

Ahhh....so you add some "lagging assets" as an insurance, to dampen volatility. Now we're getting somewhere.

Did you know btw that gold is the safest asset in the world? And has been for thousands of years?
Long before we messed around with paper garbage?

Maybe it's an idea to add a slice of that as well?

sorry but i don't see financial Armageddon  in my life time , don't need to protect against the sky is falling at this stage . when i see signs i will add it but certainly i have zero use for it now .

If you don't see signs now, you'll never see them.

It also means you're better of not getting involved in anything related to investing, for your own safety.

mathjak107 wrote: great then if you had all the gold money in t-bills you would have had a better inflation hedge the last 40 years .

You are the one that says you cannot look at historic results.
Why look at what t-bills did....?

Xan wrote:

mathjak107 wrote:not at all , i m trying o explain to you that you are betting on not having below average returns in order for the pp to  succeed . you are betting on n outcome even though you think you are not .

Betting on not having below average returns.  Well I suppose that's the goal (and bet?) of all investors, no?

there is a double negative in that statement . the pp  can not succeed if returns are below average . it depends on strong  trends to over come the steep drops opposing assets have .  no strong trends an the pp is dead in the water if not enouh assets re able to pull in the same direction . .

mathjak107 wrote: great then if you had all the gold money in t-bills you would have had a better inflation hedge the last 40 years .

Yes, but if I could know the future, as clearly you do, then I would be 100% in whatever asset is going to lead in the coming year.  But see, that's magic.

well you are still betting on a particular outcome .  you are betting on at least average returns  in more thn one asset class or above average returns in one asset class in order to succeed .  how do you know that will happen ?  can't we have below average returns  ? 

a 50/50 mix  can produce a nice return with only 5-6% equity returns and 3% interest on bonds , the pp likely will not be able to lift it's own weight with those returns if they happen . . ,.  in either case we are both betting on something being in place that my not happen and that is my point .

just because you put equal money in to assets does not man hy have an equal chance of playing out and if they don't you need a lot more of a trend  to compensate .  you have no idea if that will happen

so it is great you own all 4 asst classes but if conditions do not allow it you have no lead horse .  think about that fact . .