Best of Discuss - All Comments

Re: If You Can't Beat It, Buy It

skarthickblog — Fri, 16 Apr 2010 07:16:49 GMT

Thanks... it is very useful

Re: Re: If You Can't Beat It, Buy It

norbertc — Fri, 16 Apr 2010 08:00:21 GMT

Taylor is a gentlemen and we share a deep admiration for Jack Bogle.

However, it should be noted that Mr. Bogle himself has owned actively-managed funds. Futhermore, he has repeatedly made pronouncements concerning market valuations. These valuations are relevant for asset allocation decision making.

For example, in 2000 he described equities as "ridiculously expensive" - and he promptly sold much of his equity holdings. In last week's FT interview, he commented that equities will likely outperform bonds over the next decade. In 2009 he commented on the reasonable equity prices.

It seems to me that some of Mr. Bogle's diciples are less flexible and imaginative than their mentor.

Norbert

Re: Risk Management in Diversified "Buy & Hold" Portfolios

lucky7 — Mon, 28 Sep 2009 21:11:27 GMT

I don't always agree with your posts but admire when one speaks out against the crowd.

Here's a quote I think you might like,

"The happiness of the times were extraordinary, when it was lawful to think what you wished and to say what you thought..." Tacitus

From Bob

Re: Risk Management in Diversified "Buy & Hold" Portfolios

DClemons — Sun, 30 Jan 2011 16:02:43 GMT

Tactical Asset Allocation is an investment style that rebalances portfolios based on market conditions and not a calendar. Technical Analysis is used to adjust the amount of money invested in a given asset class at any given moment in time based on market conditions. Tactical Asset Allocation is a way of managing market risk by raising or lowering cash positions. Tactical AA works best in a Ranging Market.

Strategic Asset Allocation rebalances investments in a portfolio based on a calendar, usually quarterly but sometimes semiannually or annually. Strategic Asset Allocation stays fully invested throughout a market cycle and is considered a buy and hold strategy for three years or longer. Strategic AA works best in a Trending market.

I don't know how you can adjust risk in a Buy and Hold portfolio without selling something. You can diversify risk away by increasing the number of holdings or you can adjust the Asset Allocation by adjusting the amount of money in various asset classes. To reduce risk, you have to Sell at market tops and Buy and market bottoms. The price you pay when you Buy will determine the amount of money you make when you Sell.

A combination of both works best for me.

Dan Clemons Certified Financial Planner and Registered Investment Advisor - Retired

manageyourownmoney.wordpress.com

Morningstar does not consider my blog as advertising.