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Fin Man V
Posted: 09 March 2025 14:54:24(UTC)
#3498

Joined: 01/01/2025(UTC)
Posts: 8

Thanks: 12 times
Was thanked: 26 time(s) in 6 post(s)
SF100;336976 wrote:
Fin Man V;336965 wrote:
Our long term plan is "our average age in equities" not "our average age in bonds".

Our average age is 52, and our equities at the end of Feb 25 were 47% of the consolidated portfolio. We are unlikely get there this year as the US looks overvalued, unless there is a more significant correction this year .....

... So in 33 years time, when your avg age is 85, you'll be 85% equities.
And let's posit that rates will have gradually, or abruptly risen back to 70s/80s/90s norms of say shy of 10%. Almost certain you'll change that plan.


The challenge is appreciated but I think it is unlikely that I would change the plan if rates rose because the long term winning asset class is always equities

To explain, my mindset is that our investments will be inherited by our kids. Our investing timeframe is their potential lifespan so the "your age in bonds" mantra just doesn't cut it.

I'm amazed this isn't talked about more to be honest.

I've also posted a fair bit on the LifeStrategy threads that over 10 year timeframes the volatility of those portfolios doesn't reduce the more bonds you add. You just get reduced returns long term.

This all assumes you can hold your nerve, that's where the real test is for me in the next few years with sequence of returns risk still a factor ........
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9 users thanked Fin Man V for this post.
Jay P on 09/03/2025(UTC), NPH on 09/03/2025(UTC), Jed Mires on 09/03/2025(UTC), Johan De Silva on 09/03/2025(UTC), Jesse M on 09/03/2025(UTC), Helen L on 09/03/2025(UTC), SF100 on 09/03/2025(UTC), Robin B on 09/03/2025(UTC), Busy doing nothing on 09/03/2025(UTC)
Johan De Silva
Posted: 09 March 2025 15:43:47(UTC)
#3511

Joined: 22/07/2019(UTC)
Posts: 4,413
MarkSp;336983 wrote:
Johan De Silva;336973 wrote:
I think we can get over our disagreements if we all be aligned on past macro events, as illustrated by this chart:



The core principle of the U.S. administration is to strike a balanced middle ground between corporate taxes and tariffs. In the long run, this approach could help reduce the deficit, lay the foundation for a future surplus, and ultimately strengthen the dollar.

That said, while achieving this balance could support economic stability and bolster U.S. markets, the actual impact remains uncertain. Factors such as global trade dynamics, corporate responses, and consumer behaviour all play a role. As a result, we don’t yet know if this strategy will unfold as intended, or more importantly how long it might take.

I felt the bull case for US markets and their outlook often get buried under a mix of political bias and, more importantly, the predominance of older posters in this forum who, understandably, take a short-term view.

Saying that, as a UK investor myself looking to trade and gain alpha, I am very underweight the U.S. choosing alpha opportunities in the UK and Europe, but looking for the right time to get back into U.S. stocks. Smaller U.S. companies should benefit from reduced legislation and tax. KKR was my only U.S. only buy recently.



I can give you a completely different narrative about the effect of tariffs. Trade is a dynamic system, past attempts at serious tariffs have all led to falling global trade which doesn't matter if you can consume stuff internally. While people might buy 20 TShirts for $20 from Shein they wont buy 20 T-Shirts for $200 from Fruit of the Loom. Global production will fall, global unemployment will rise

the world will not go back to Mechantilism. The US has much more power when it is "soft", "Hard" power doesn't work unless you back it with hard actions.

What I can see is alternative sources of supply for goods previously from the US. US companies will not be able to buy out their competition and non-US versions will be created. In the meantime the US has crapped in its own nest - they will not get back the respect they had as a reliable if bumbling friend. People except for Vance have long memories...............you are my friend and you fuck me over, I don't forget.

When people will say absolutely anything, things they obviously don't believe in order to stay in power - I have watched Rubio and Hegseth - both are talking madly in favour of ideas they have fought against for decades. they have no credibility whatsoever. like Corbyn going to TV tomorrow espousing EDL policies.

tango man and his speech about spending money on Transgender mice FFS Transgenic mice ie Mice who have had a gene adapted, swapped out/removed to support investigations into human diseases.
there are sooo many stupid people out there.

I also heard that US is trawling the world trying to get eggs. I say sell them to them with a 25% export surcharge



What are the chances of this narrative vs it all going to plan... 50/50?, 90/10?
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Jed Mires
Posted: 09 March 2025 15:52:42(UTC)
#3519

Joined: 04/04/2023(UTC)
Posts: 338

Thanks: 317 times
Was thanked: 635 time(s) in 225 post(s)
SF100;336997 wrote:
and Ruffer Total Return is another example
If you can sea through the Sea of Red Mist.
Launched sept 2000, 7.2% annualised total return
Same as, err..... FTSE All World index over same period

Feels like a good time to enter, with all the negative press

https://archive.is/1MTYy


Duncan MacInnes leaving is a pity, always gave a great interview, couldn't remember anything he said instantly forgettable but very entertaining. He will be missed I wonder where he going to appear next.
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1 user thanked Jed Mires for this post.
Helen L on 09/03/2025(UTC)
Thrugelmir
Posted: 09 March 2025 16:55:42(UTC)
#3509

Joined: 01/06/2012(UTC)
Posts: 5,317

Thanks: 3255 times
Was thanked: 7876 time(s) in 3263 post(s)
MarkSp;336983 wrote:

I also heard that US is trawling the world trying to get eggs. I say sell them to them with a 25% export surcharge



One Canadian province is mulling over levying a 25% tariff on electricity it exports across the border to the USA. Would directly impact 1.5 million households. Trade wars can be painfull once you drill into all the consequences.
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2 users thanked Thrugelmir for this post.
Jay P on 09/03/2025(UTC), ANDREW FOSTER on 09/03/2025(UTC)
SF100
Posted: 09 March 2025 17:04:58(UTC)
#3499

Joined: 08/02/2020(UTC)
Posts: 2,254
Fin Man V;337005 wrote:
SF100;336976 wrote:
Fin Man V;336965 wrote:
Our long term plan is "our average age in equities" not "our average age in bonds".

Our average age is 52, and our equities at the end of Feb 25 were 47% of the consolidated portfolio. We are unlikely get there this year as the US looks overvalued, unless there is a more significant correction this year .....

... So in 33 years time, when your avg age is 85, you'll be 85% equities.
And let's posit that rates will have gradually, or abruptly risen back to 70s/80s/90s norms of say shy of 10%. Almost certain you'll change that plan.


The challenge is appreciated but I think it is unlikely that I would change the plan if rates rose because the long term winning asset class is always equities

To explain, my mindset is that our investments will be inherited by our kids. Our investing timeframe is their potential lifespan so the "your age in bonds" mantra just doesn't cut it.

I'm amazed this isn't talked about more to be honest.

I've also posted a fair bit on the LifeStrategy threads that over 10 year timeframes the volatility of those portfolios doesn't reduce the more bonds you add. You just get reduced returns long term.

This all assumes you can hold your nerve, that's where the real test is for me in the next few years with sequence of returns risk still a factor ........


1. re Long term: assume you are looking at > 40yrs otherwise I'm not sure that's the case. I'd also just caution that assumption with ref to the GFC where I understand things could have turned out a lot worse, I think there was an element of luck that the banking system didn't totally collapse before govvies could react. Mike Tyson: “Everyone has a plan until they get punched in the face” springs to mind, as you alluded to in your last point.

2. re age in bonds: I would consider that it's aimed at folks whose own needs are first & foremost, rather than inheritance planning, which I'd think is more prevalent on the forum moreso than the jobloggs masses. It does merit challenging for those willing to think long & hard, perhaps not so for the majority of applications where the focus may be for 'damage limitation'.

3. re your 10yr timeframe. Bonds represented rather poor value in nominal & real terms, aka overpriced. Were they not being bought for prices over par??? It's not surprising that they were volatile. It'd be reasonable to look for a sense of value if -ve correlation is sought, e.g. cash.


The fascinating thing about percentages is, we only have 100 to play with, unlike pounds...
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SF100
Posted: 09 March 2025 17:06:45(UTC)
#3520

Joined: 08/02/2020(UTC)
Posts: 2,254
Jed Mires;337011 wrote:
SF100;336997 wrote:
and Ruffer Total Return is another example
If you can sea through the Sea of Red Mist.
Launched sept 2000, 7.2% annualised total return
Same as, err..... FTSE All World index over same period

Feels like a good time to enter, with all the negative press

https://archive.is/1MTYy


Duncan MacInnes leaving is a pity, always gave a great interview, couldn't remember anything he said instantly forgettable but very entertaining. He will be missed I wonder where he going to appear next.


poor dunc, mocked for leaving funds he wasn't even involved with :)
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SF100
Posted: 09 March 2025 17:11:02(UTC)
#3510

Joined: 08/02/2020(UTC)
Posts: 2,254
MarkSp;336983 wrote:
I also heard that US is trawling the world trying to get eggs
is this due to the Caviar bubble?
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1 user thanked SF100 for this post.
MarkSp on 09/03/2025(UTC)
You have to change your life
Posted: 09 March 2025 18:09:27(UTC)
#3521

Joined: 17/11/2021(UTC)
Posts: 2,194
1 and 1/4 million views!

What every financial institution knows:

Fear trumps greed for the private investor.


And hot on the heels of that truth comes a second:
those most protected against the volatility of the market are yet most anxious on the downslope. That was sometime a paradox, but time gives it proof.
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L.P.
Posted: 09 March 2025 22:39:42(UTC)
#3522

Joined: 14/07/2023(UTC)
Posts: 670
Again… ‘gradually…..and then suddenly’…. and talking of “suddenly”… the much loved JGGI has been trounced over one year by the box standard 60/40 portfolio. Even the much ridiculed CGT is ahead (although to be fair, they should be doing even better).

Now …most posters will know that I deride short term comparisons but just wanted to highlight how quickly things can change.
JGGI is off circa 12% from its recent highs but the total return over 5 years is still close to 110% so still unbelievably excellent? Well yes if you believe in the ‘everything returns to the mean mantra’ and you have taken your profits and are happy that you have been lucky to have been on the ride. It certainly isn’t excellent if you sit and watch it revert to the ‘mean’ as it trends lower and lower.

Still accumulating or/and have other assets like DB pensions etc to rely on then it might not be a problem. Just be sincere in your posts.

Reading the headlines tonight… Trump is quite happy to watch the US go into a recession. He seems oblivious to lower tax take and higher welfare that a recession produces and even more oblivious then to more gov’t borrowing and higher borrowing costs as a result,
In addition, tariffs will increase prices to consumers and therefore we have the perfect storm…’stagflation’ so there could be no interest rate cuts in this scenario, more than likely it would be increases.

The world has probably never had a clearer signal that the leader of worlds largest economy want to crash it and the stock market and he is probably going to make a personal fortune in the process.

Incredible times.
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