Lifestyle funds (Vanguard) vs. individual funds

A question about lifestyle funds, Vanguard in particular.

My wife and I are both in our early 30s and originally opened Roth IRAs
in our mid-20s. We knew nothing at all about investing at that time
and a friend of the family (a broker) helped us open the Roths.
Unfortunately, they were Putnam funds that we eventually realized were
too expensive and not very well suited for us. So we took a bath on
those. Lesson learned.

So we rolled them over to Vanguard a few years back (into the 500
Index/Inv fund) and have continued to contribute since then. I also
rolled a 401K from a previous employer to Vanguard and to the 500
Index/Inv. So we've each got a Roth worth about $6500 and I've got
a rollover IRA worth about $6700.

We're going to fully fund each Roth this year and before I do that I
want to investigate whether continuing with the 500 Index/Inv is a good
idea. I've been reading many of the previous discussions of
lifestyle funds and the prevailing thought seems to be that they're
OK, but it's better to buy individual funds and get the right mix
that way.

In our case, if we did it that way, we could get 3 index funds (meeting
the $3K minimum for each) in each Roth, but we'd be paying a
maintenance fee for each of them too since the balance wouldn't be
high enough.

I've read a lot of posts from people who see balancing your portfolio
as being as easy as lacing up your shoes in the morning. I wish I
could say it's that easy for us, between the Vanguard holdings and
our 401Ks at work-- it just doesn't come easy for me, as hard as I
study it. The Vanguard lifestyle funds (Target Retirement 2045, for
us) seem a lot easier in comparison, and seem like they'd give us a
better mix, compared to what we're doing now. Would appreciate any
thoughts.

Re: Lifestyle funds (Vanguard) vs. individual funds

If you like Vanguard consider Vanguard STAR or Vanguard Wellington.
Do you still call that broker "friend"?

<> wrote in message
news:
>A question about lifestyle funds, Vanguard in particular.
>
> My wife and I are both in our early 30s and originally opened Roth IRAs
> in our mid-20s. We knew nothing at all about investing at that time
> and a friend of the family (a broker) helped us open the Roths.
> Unfortunately, they were Putnam funds that we eventually realized were
> too expensive and not very well suited for us. So we took a bath on
> those. Lesson learned.
>
> So we rolled them over to Vanguard a few years back (into the 500
> Index/Inv fund) and have continued to contribute since then. I also
> rolled a 401K from a previous employer to Vanguard and to the 500
> Index/Inv. So we've each got a Roth worth about $6500 and I've got
> a rollover IRA worth about $6700.
>
> We're going to fully fund each Roth this year and before I do that I
> want to investigate whether continuing with the 500 Index/Inv is a good
> idea. I've been reading many of the previous discussions of
> lifestyle funds and the prevailing thought seems to be that they're
> OK, but it's better to buy individual funds and get the right mix
> that way.
>
> In our case, if we did it that way, we could get 3 index funds (meeting
> the $3K minimum for each) in each Roth, but we'd be paying a
> maintenance fee for each of them too since the balance wouldn't be
> high enough.
>
> I've read a lot of posts from people who see balancing your portfolio
> as being as easy as lacing up your shoes in the morning. I wish I
> could say it's that easy for us, between the Vanguard holdings and
> our 401Ks at work-- it just doesn't come easy for me, as hard as I
> study it. The Vanguard lifestyle funds (Target Retirement 2045, for
> us) seem a lot easier in comparison, and seem like they'd give us a
> better mix, compared to what we're doing now. Would appreciate any
> thoughts.
>
>
>

Re: Lifestyle funds (Vanguard) vs. individual funds

wrote:
> A question about lifestyle funds, Vanguard in particular.
>
> My wife and I are both in our early 30s and originally opened Roth IRAs
> in our mid-20s. We knew nothing at all about investing at that time
> and a friend of the family (a broker) helped us open the Roths.
> Unfortunately, they were Putnam funds that we eventually realized were
> too expensive and not very well suited for us. So we took a bath on
> those. Lesson learned.
>
> So we rolled them over to Vanguard a few years back (into the 500
> Index/Inv fund) and have continued to contribute since then. I also
> rolled a 401K from a previous employer to Vanguard and to the 500
> Index/Inv. So we've each got a Roth worth about $6500 and I've got
> a rollover IRA worth about $6700.
>
> We're going to fully fund each Roth this year and before I do that I
> want to investigate whether continuing with the 500 Index/Inv is a good
> idea. I've been reading many of the previous discussions of
> lifestyle funds and the prevailing thought seems to be that they're
> OK, but it's better to buy individual funds and get the right mix
> that way.
>
> In our case, if we did it that way, we could get 3 index funds (meeting
> the $3K minimum for each) in each Roth, but we'd be paying a
> maintenance fee for each of them too since the balance wouldn't be
> high enough.
>
> I've read a lot of posts from people who see balancing your portfolio
> as being as easy as lacing up your shoes in the morning. I wish I
> could say it's that easy for us, between the Vanguard holdings and
> our 401Ks at work-- it just doesn't come easy for me, as hard as I
> study it. The Vanguard lifestyle funds (Target Retirement 2045, for
> us) seem a lot easier in comparison, and seem like they'd give us a
> better mix, compared to what we're doing now. Would appreciate any
> thoughts.
>
>
>
I have never seen any evidence that rebalancing periodically has any
value. It's a nice idea but where is the proof that it works?

Try Brennan's book, "Straight talk on investing", page 61 in the
hardback, Table 6.2. He shows returns for Stocks, Corporate bonds and
cash (90-day Treasury bills) for the 25 years from 1977 to 2001.

He takes a 60% stocks, 30% bonds and 10% cash portfolio and rebalances
back to this each year from a starting portfolio of $10,000 total. He
ends up with $171,518 value at the end of 2001.

If he had just kept his original holdings in stocks, bonds and cash and
NOT rebalanced he would have had $183,241 at the end, an extra $11,723
plus any transaction costs saved.

Even better, if he had stuck to a 100% stocks portfolio he would have
had $249,436 or $77,918 or 45% more.

I know what you will say! that 25-year period was not typical, but it
never is.

The basis of rebalancing is that you can predict the future. Because
something has gone up and something else has gone down the prediction is
that this will tend to reverse in the next period, so sell a bit of the
first and buy some more of the second and you will make more. Not so.
You can't predict the future so the action has no value.

For an even better case against try rebalancing between US and Japanese
stocks from 1989 onwards.

Re: Lifestyle funds (Vanguard) vs. individual funds

Wasn't a close friend in the first place. Isn't a friend at all now!


Ed wrote:
> If you like Vanguard consider Vanguard STAR or Vanguard Wellington.
> Do you still call that broker "friend"?
>

Re: Lifestyle funds (Vanguard) vs. individual funds

> We're going to fully fund each Roth this year and before I do that I
> want to investigate whether continuing with the 500 Index/Inv is a good
> idea. I've been reading many of the previous discussions of
> lifestyle funds and the prevailing thought seems to be that they're
> OK, but it's better to buy individual funds and get the right mix
> that way.

Since you already own a lot of VFINX, pick out some other funds of
different categories. Like Mid-Caps, Small-Caps, International etc. Get
a book (e.g. Personal Finance in your 20s n 30s). After understanding
your options, structure your portfolio to be balanced.


> In our case, if we did it that way, we could get 3 index funds (meeting
> the $3K minimum for each) in each Roth, but we'd be paying a
> maintenance fee for each of them too since the balance wouldn't be
> high enough.

Vanguard has a 1000$ minimum for Roth accounts, not 3000$. The
maintenance fee is a drop in the bucket. However if you plan to make
contributions in big amounts, you could open an account with Scottrade
and buy ETFs.

> I've read a lot of posts from people who see balancing your portfolio
> as being as easy as lacing up your shoes in the morning. I wish I
> could say it's that easy for us, between the Vanguard holdings and
> our 401Ks at work-- it just doesn't come easy for me, as hard as I
> study it. The Vanguard lifestyle funds (Target Retirement 2045, for
> us) seem a lot easier in comparison, and seem like they'd give us a
> better mix, compared to what we're doing now. Would appreciate any
> thoughts.

The lifestyle funds are good only if you don't want to really manage
your funds yourself. I liked the idea when I started contributing money
two years ago but now I dislike the lack of control. I'm not personally
a fan of rebalancing my portfolio. That is like taking money from better
performers and putting it into underperformers. Sometimes I modify my
contributions based on my perception of the future but haven't fiddled
with existing funds much.

>
>

Re: Lifestyle funds (Vanguard) vs. individual funds

David Wilkinson wrote:
> I have never seen any evidence that rebalancing periodically has any
> value. It's a nice idea but where is the proof that it works?

If you come from the perspective that history is irrelevant to the
future, then you can never prove (or disprove) anything. So any
historical examples are discarded. You showed a 25-year window in which
rebalancing was the worst, no balancing was better, and 100% stocks was
the best. You could also find a 25-year window where rebalancing was
the best or 100% bonds was the best.

> The basis of rebalancing is that you can predict the future. Because
> something has gone up and something else has gone down the prediction is
> that this will tend to reverse in the next period, so sell a bit of the
> first and buy some more of the second and you will make more. Not so.
> You can't predict the future so the action has no value.

You are correct that just because something has gone up and something
else gone down, does not necessarily mean that the trend will reverse.
However, there is something that is of great value in rebalancing: risk
allocation. If you've held a portfolio for 25 years without
rebalancing, you'll probably end up with something like 65% small cap
stock, 30% large cap stock, and 5% bonds. I'm sure you wouldn't want to
hold that kind of portfolio during retirement.

Re: Lifestyle funds (Vanguard) vs. individual funds

Bucky wrote:
> David Wilkinson wrote:
>
>>I have never seen any evidence that rebalancing periodically has any
>>value. It's a nice idea but where is the proof that it works?
>
>
> If you come from the perspective that history is irrelevant to the
> future, then you can never prove (or disprove) anything. So any
> historical examples are discarded. You showed a 25-year window in which
> rebalancing was the worst, no balancing was better, and 100% stocks was
> the best. You could also find a 25-year window where rebalancing was
> the best or 100% bonds was the best.
>
I don't know where you got that first point from, that I think history
is irrelevant. Quite the reverse. I was quoting from historical returns
which are the only guide we have.

However, I don't have stock, bond and treasury note returns for many
past years except from odd quotes in books like Brennan's, so I can only
use what I have. If you have all the past returns for other years pre
1977 then you may be able to find 25-year periods where rebalancing
would have worked, or are you just making a vague point that these
probably existed. Can you name one of these periods with numbers and
would it be any more typical than the one I quoted?

For the full history summary see Siegel's "Stocks for the long run".
From 1871 to 2001, stocks gave an average annual compound return of
9.0% while bonds made only 4.9%. If you prefer more modern, post-war,
figures then for 1946-2001 the returns are 11.6% for stocks and 5.5% for
bonds.

This means that on average stocks have grown faster than bonds so the
rebalancing process will keep taking money out of the faster growing
stocks and feeding it into the slower growing bonds. Returns from a
stock/Bond portfolio will be less than from an all stock one, as
Brennan's numbers showed. This is not unique to that period but is a
general conclusion.

Of course the risk level, or standard deviation of returns, will be
higher the more stocks you hold but that is another question. Not all
retired people rely on income from investments as many have pensions as
well to live on, so they may be more interested in total return than
income or minimising risk.

>
>>The basis of rebalancing is that you can predict the future. Because
>>something has gone up and something else has gone down the prediction is
>>that this will tend to reverse in the next period, so sell a bit of the
>>first and buy some more of the second and you will make more. Not so.
>>You can't predict the future so the action has no value.
>
>
> You are correct that just because something has gone up and something
> else gone down, does not necessarily mean that the trend will reverse.
> However, there is something that is of great value in rebalancing: risk
> allocation. If you've held a portfolio for 25 years without
> rebalancing, you'll probably end up with something like 65% small cap
> stock, 30% large cap stock, and 5% bonds. I'm sure you wouldn't want to
> hold that kind of portfolio during retirement.
>
Yes I would and do. Well. not quite the one above, but a lot of stocks,
no bonds and the rest in cash. In MPT terms this is somewhere on the
straight line between the market portfolio and the risk free return.

Re: Lifestyle funds (Vanguard) vs. individual funds

David Wilkinson wrote:
> I don't know where you got that first point from, that I think history
> is irrelevant. Quite the reverse. I was quoting from historical returns
> which are the only guide we have.

I just got that feeling based on your first post, guess I was wrong.
It's good to establish that historical returns are acceptable before
crunching numbers, because some people reject the end result, saying
that historical results don't guarantee future results. Which is true,
but it doesn't mean they're worthless either.

> Can you name one of these periods with numbers?

I happen to have the Ibbotson numbers from 1926-2002. So I calculated
25-year windows in 5 year increments over that period, using a typical
75% stock/25% bond portfolio (large cap stock, intermediate govt bond
total returns).

Holding beat rebalancing during these windows:
1935-1959
1940-1964
1945-1969
1950-1974
1975-1999

Rebalancing beat holding during these windows:
1926-1950
1930-1954
1955-1979
1960-1984
1965-1989
1970-1994

I've posted my Excel file that I used to calculate the numbers here.
You can play with it more to examine more windows or change the
allocations, etc.


> would it be any more typical than the one I quoted?

Well, "typical" is pretty subjective. Between 1980-1999, the average
annual return on large cap stocks was about 18%, way higher than the
historical average. That's a huge chunk of your 1977-2001 window. So I
would say my windows are no less typical than yours.

> I have never seen any evidence that rebalancing periodically has any
> value. It's a nice idea but where is the proof that it works?

Well, now you have seen evidence. I'm not claiming it's irrefutable
proof, nor am I saying it's absolutely better than holding, but at
least there is support of rebalancing.

> This means that on average stocks have grown faster than bonds so the
> rebalancing process will keep taking money out of the faster growing
> stocks and feeding it into the slower growing bonds.

You've turned this into just about rebalancing stocks vs bonds, but the
original post was about rebalancing in general. There's also
rebalancing different types of stocks too (large vs small cap, growth
vs value, sectors, etc). Rebalancing stocks is more about selling high
and buying low.

Re: Lifestyle funds (Vanguard) vs. individual funds

Bucky wrote:
> David Wilkinson wrote:
>
>>I don't know where you got that first point from, that I think history
>>is irrelevant. Quite the reverse. I was quoting from historical returns
>>which are the only guide we have.
>
>
> I just got that feeling based on your first post, guess I was wrong.
> It's good to establish that historical returns are acceptable before
> crunching numbers, because some people reject the end result, saying
> that historical results don't guarantee future results. Which is true,
> but it doesn't mean they're worthless either.
>
>
>>Can you name one of these periods with numbers?
>
>
> I happen to have the Ibbotson numbers from 1926-2002. So I calculated
> 25-year windows in 5 year increments over that period, using a typical
> 75% stock/25% bond portfolio (large cap stock, intermediate govt bond
> total returns).
>
> Holding beat rebalancing during these windows:
> 1935-1959
> 1940-1964
> 1945-1969
> 1950-1974
> 1975-1999
>
> Rebalancing beat holding during these windows:
> 1926-1950
> 1930-1954
> 1955-1979
> 1960-1984
> 1965-1989
> 1970-1994
>
> I've posted my Excel file that I used to calculate the numbers here.
> You can play with it more to examine more windows or change the
> allocations, etc.
>
>
Hi Bucky. Thanks for the info, and for some serious discussion on an
investing topic.

OK, you have made a point, that there are slightly more 25-year periods
when rebalancing would have done better than just holding the original
investments. However!

There is a lot of overlap, since you have started every five years.
There are only really three independent 25-year periods in 1926-1999 and
rebalancing only wins in 1926-1950 with hold winning in 1950-1974 and
1975-1999.

In the periods when rebalancing wins the margin between the two methods
is quite small. When hold wins the margin is bigger. This means that
hold wins overall, see below.

Taking the whole period in your spreadsheet from 1926-2002 and starting
with $100 in a portfolio of 75% large cap stocks/25% bonds, as you do,
the final values are

with rebalancing $101,996

Hold (no rebalancing) $134,576

so Hold makes 32% more, showing Rebalancing is harmful in the long run.
As I said before, it takes money out of fast growing stocks and puts it
into slower growing bonds. "Sell your winners, buy your losers" is not a
good idea.

Rebalancing would work if prices oscillated about a constant value, and
it does win in periods when this is a good approximation. However, the
better long-term model is an oscillation about a rising curve and then
the numbers show that rebalancing is harmful overall.

Even more dramatic is to forget about bonds altogether and hold 100%
stocks. Then you get:

100% stocks $177,466

which is 74% more than the 75/25 stocks/bonds portfolio with
rebalancing. You make more if you put all your money in the fastest
growing vehicle rather than into a mixture of fast and slow growing.

This all neglects risk of course. But if you want the best return for a
given risk, which is less than the risk with 100% stocks, then MPT says
it is best to hold a mixture of risk-free cash and the market portfolio.
Of course the latter may include some fraction of bonds, but not very
much I think.

>
>>would it be any more typical than the one I quoted?
>
>
> Well, "typical" is pretty subjective. Between 1980-1999, the average
> annual return on large cap stocks was about 18%, way higher than the
> historical average. That's a huge chunk of your 1977-2001 window. So I
> would say my windows are no less typical than yours.
>
>
>>I have never seen any evidence that rebalancing periodically has any
>>value. It's a nice idea but where is the proof that it works?
>
>
> Well, now you have seen evidence. I'm not claiming it's irrefutable
> proof, nor am I saying it's absolutely better than holding, but at
> least there is support of rebalancing.
>
>
>>This means that on average stocks have grown faster than bonds so the
>>rebalancing process will keep taking money out of the faster growing
>>stocks and feeding it into the slower growing bonds.
>
>
> You've turned this into just about rebalancing stocks vs bonds, but the
> original post was about rebalancing in general. There's also
> rebalancing different types of stocks too (large vs small cap, growth
> vs value, sectors, etc). Rebalancing stocks is more about selling high
> and buying low.
>

I don't have the returns for large cap versus small, value and growth
etc. except for a good table in "J K Lasser's Pick Winning Mutual
Funds", page 57 in the 2001 paperback. For 1980 to 1999, hardly typical
as it was the bull market only, it shows the returns for 7 categories of
large and small cap, value, growth, foreign and bonds. In spite of this
being a bull market when you would perhaps think growth would win all
the time, it doesn't, honours being fairly evenly spread between the
categories.

J K's conclusion, under a sub-heading of "The Folly of Tactical Asset
Allocation" is that "..you simply can't predict what's going to happen
next." My feeling is that switching between categories on the basis of
past performance, like selling last year's hot performer, will be no
better than chance. On the other hand, as these various stock categories
all tend to have about the same long term performance it will probably
not do too much harm, provided transaction costs are small.

Re: Lifestyle funds (Vanguard) vs. individual funds

I have not followed this whole thread, but a rebalancing issue-

the results above didn't suprise me, I would be more inclined to
rebalance the 75% stocks to other stock types (small cap,
international). I generally do not see stocks to buy bonds. bond
markets follow interest rates more than stock markets (is my
impression, no data to back this up), so selling stocks to buy bonds
would only work if rates were favorable at the time the stocks were
sold.

Re: Lifestyle funds (Vanguard) vs. individual funds

David Wilkinson wrote:
> Hi Bucky. Thanks for the info, and for some serious discussion on an
> investing topic.

yes, good discussion indeed.

> There is a lot of overlap, since you have started every five years.
> There are only really three independent 25-year periods in 1926-1999 and
> rebalancing only wins in 1926-1950 with hold winning in 1950-1974 and
> 1975-1999.

I believe that when analyzing rolling windows, it is better to use all
the windows. (I would have done every year, except it would have taken
me too long.) The reason overlap is better than non-overlap is because
the non-overlap results will depend on what year you pick to start. You
can get vastly different results if you start at 1930, 1935, or 1940,
etc. If you use every window, then there is no bias.

> In the periods when rebalancing wins the margin between the two methods
> is quite small. When hold wins the margin is bigger.

That is true. Since stocks have outperformed bonds over history, that
has to be the case.

> so Hold makes 32% more, showing Rebalancing is harmful in the long run.
> As I said before, it takes money out of fast growing stocks and puts it
> into slower growing bonds. "Sell your winners, buy your losers" is not a
> good idea.

If someone holds that philosophy, then why would they start out with a
portfolio of 60/30/10? They should start with 100% stocks, since that's
what they'll end up with eventually anyways. It seems to me that if
someone decided on 60/30/10 for performance and risk factors, then they
should keep it that way.

> This all neglects risk of course. But if you want the best return for a
> given risk, which is less than the risk with 100% stocks, then MPT says
> it is best to hold a mixture of risk-free cash and the market portfolio.

Here's a question for you, let's say your portfolio is 90% stock, 10%
cash, or whatever the MPT says is the best. If you stocks became 99%,
would you sell 9% of it?

Re: Lifestyle funds (Vanguard) vs. individual funds

Bucky wrote:
> David Wilkinson wrote:
>
>
>
>>This all neglects risk of course. But if you want the best return for a
>>given risk, which is less than the risk with 100% stocks, then MPT says
>>it is best to hold a mixture of risk-free cash and the market portfolio.
>
>
> Here's a question for you, let's say your portfolio is 90% stock, 10%
> cash, or whatever the MPT says is the best. If you stocks became 99%,
> would you sell 9% of it?
>
I should be so lucky! It has never happened yet so it is rather
hypothetical. For the stock element to change from 90% to 99% while the
cash stayed the same the stock value would have to increase by a factor
of 10. This would imply a Dow of 100,000 or a FTSE100 of 53,000 compared
to their maxima so far of about 11,000 and 7,000. It will happen
eventually if you wait long enough and live long enough.

But it is a good question and is still meaningful if one started with
90/10 and the 90 increased by any significant amount as it is very
likely to as time goes by. The reason for choosing 90/10, or whatever
the initial proportions are, is because that puts the investor's
perceived risk at a level he can live with and sleep at night and still
make most of the gains of the market. If the 90 increases to 92, 95 or
even 99 then the investor would have to decide whether the risk level
was then more than he could stand and that would prompt him to sell down
to it again.

It depends on two other things, at least, how much the portfolio is
worth and the perceived investing climate. If you had only $1,000 total
you would not want $900 in the market and only $100 in the bank. I would
have $1,000 in the bank. If you had $100m then $1m in the bank for
expenses and $99m in the market would probably be OK. What does Bill
Gates do?

The other thing is what one thinks the market will do next. If the P/E
of the market is 42, dividend yields are 1% and the market has risen by
15% p.a. for 18 years, as in 2000 I would hope one would be thinking
this cannot go on and it is time to move more into cash before the
bubble bursts. Something a lot less than 90% stocks would then be
appropriate, with hindsight anyway. Then the perceived risk with 90/10
would be too high and one would, hopefully, slide along the security
market line in the CAPM to 50/50 or even 10/90, stocks to cash, to the
desired risk level. Of course these ideal worlds do not actually exist
and I can't remember doing that at the time :-)

The CAPM does not give a "Best" proportion of stocks to cash, just the
security market line where you pick your own proportion for your risk
level. If you are so confident the market will rise that 100% stocks is
not enough then you can move to the right of the market point to even
higher risk and return by borrowing money to buy even more stocks, to
120/-20, say. This would be a good move at the bottom of a crash if you
could guess it right, or a ticket to bankruptcy if you got it wrong!

Re: Lifestyle funds (Vanguard) vs. individual funds

David Wilkinson wrote:
> But it is a good question and is still meaningful if one started with
> 90/10 and the 90 increased by any significant amount as it is very
> likely to as time goes by. The reason for choosing 90/10, or whatever
> the initial proportions are, is because that puts the investor's
> perceived risk at a level he can live with and sleep at night and still
> make most of the gains of the market.

OK, how about the reverse scenario. Let's say you had 90/10 in 2000 and
by the end of 2002, the stock value halved, and you were down to 80/20.
Would you rebalance or hold?

If your answer is to rebalance, then aren't you selling your winners
(cash) and buying the losers (stocks)? I don't think you're opposed to
the concept of rebalancing itself, you're just opposed to selling stock
:)

Re: Lifestyle funds (Vanguard) vs. individual funds

Bucky wrote:
> David Wilkinson wrote:
>
>>But it is a good question and is still meaningful if one started with
>>90/10 and the 90 increased by any significant amount as it is very
>>likely to as time goes by. The reason for choosing 90/10, or whatever
>>the initial proportions are, is because that puts the investor's
>>perceived risk at a level he can live with and sleep at night and still
>>make most of the gains of the market.
>
>
> OK, how about the reverse scenario. Let's say you had 90/10 in 2000 and
> by the end of 2002, the stock value halved, and you were down to 80/20.
> Would you rebalance or hold?
>
> If your answer is to rebalance, then aren't you selling your winners
> (cash) and buying the losers (stocks)? I don't think you're opposed to
> the concept of rebalancing itself, you're just opposed to selling stock
> :)
>
Having just been through a 50% drop from 2000 to 2003 and now being
about half way up again from the trough I don't feel another major drop
is very likely. If it did happen though, there is no way I would hold my
investments and do nothing while the market dropped by 50%! I always run
with stop losses, keep above moving averages and have other sell
criteria with all investments. If any of my funds showed a serious
tendency to drop I would be out of them like a shot.

I actually did this in 2002. The FTSE100 hovered around 5,200 from Oct
2001 to May 2002. Then it started going down and I sold out, missing out
on a 20% drop to less than 4,000 by July of that year. I am not sure
what I did next in real life, but in the 2003 NG contest I stayed in
cash from Jan to April and then bought into stocks as the market started
to go up again from the low point.

The nearest I have got to rebalancing is to use AIM, which has a similar
effect but better, but it is too long term for my temperament and I
never keep it up for more than a few months. For rebalancing or AIM to
work you really need something that oscillates up and down as often as
possible in a given time. If you look at the FTSE100 it went, in round
numbers, from 5,000 in 1998 up to 7,000 in 2000, down to 3,600 in 2003
and then back up to about 5,000 now. That's only about one cycle of
oscillation in 7 years. I can't wait that long!

Similarly the Dow was 10,500 in early 1999 and is still at that level
but did go down to 8,000 in early 2003. Still only one cycle in 6 years.
This is all very slow and you can't make much out of it with
rebalancing or AIM. I would rather try to be in the market when it goes
up and out when it goes down.

As an example, I had been out of US funds for a long time as they seemed
to be going nowhere, from the UK, while UK and European funds were doing
well. A lot of this was because the dollar was falling against the
pound. The dollar is recovering now and US funds showing signs of life
again so I bought into them again recently.

Re: Lifestyle funds (Vanguard) vs. individual funds

David Wilkinson <> wrote:
> Having just been through a 50% drop from 2000 to 2003 and now being
> about half way up again from the trough I don't feel another major drop
> is very likely. If it did happen though, there is no way I would hold my
> investments and do nothing while the market dropped by 50%! I always run
> with stop losses, keep above moving averages and have other sell
> criteria with all investments. If any of my funds showed a serious
> tendency to drop I would be out of them like a shot.

It's hard to say what the future holds but I'm beginning to become more
and more pessimistic about stock market returns.

- the yield curve is flattening - a precussor to recession, some
positive trends in the last few days
- the dollar although it is rallying still seems headed downard
in the future
- twin deficits continue to grow
- the real growth has been in housing which seems to be slowing
down
- job growth is pretty much non-existent. the numbers we hit monthly
are generally not keeping up with population increases. what little
labor growth we've had has been due to housing it seems

My gut says we're gonna move slow for the next few years but I wouldn't be too
surprised if there is another correction.

Sometimes when the bubble pops, there's a rally for a few years followed by
a bigger pop.

Myself, I"m holding on to what I have. Most of it is the S&P500 in my 401k,
the rest of it is in some international stocks & muni's.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Rachel Diser" <> wrote in message
news:EXeHe.42789$
>
> Sometimes when the bubble pops, there's a rally for a few years followed
> by
> a bigger pop.
>

Sounds like you have experienced many.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Rachel Diser" <> wrote in message
news:EXeHe.42789$
> David Wilkinson <> wrote:
> > Having just been through a 50% drop from 2000 to 2003 and now being
> > about half way up again from the trough I don't feel another major drop
> > is very likely. If it did happen though, there is no way I would hold my
> > investments and do nothing while the market dropped by 50%! I always run
> > with stop losses, keep above moving averages and have other sell
> > criteria with all investments. If any of my funds showed a serious
> > tendency to drop I would be out of them like a shot.
>
> It's hard to say what the future holds but I'm beginning to become more
> and more pessimistic about stock market returns.
>
> - the yield curve is flattening - a precussor to recession, some
> positive trends in the last few days

An inverted yield curve means people expect to get higher interest rates
later. Although we all expect higher interest rates they stubbonly refuse
to rise and are still at fairly low levels historically, even for a growing
economy.

> - the dollar although it is rallying still seems headed downard
> in the future

Why? What are the alternatives? Euros? Yen? Gold (I wish)?

> - twin deficits continue to grow

Many years ago I would have agreed that this is a problem but after so many
years of it, I'm beginning to wonder. Also, isn't the budget deficit going
down?

> - the real growth has been in housing which seems to be slowing
> down

Didn't existing and new home sales do very well last month? Again, we all
assume housing is in trouble if interest rates rise but we've been waiting
for years for this rise.

> - job growth is pretty much non-existent. the numbers we hit monthly
> are generally not keeping up with population increases. what little
> labor growth we've had has been due to housing it seems

And this is bad for corporate earnings? As long as inflation is tame and
incomes are rising, I wouldn't worry too much about employment. Other
countries are doing much worse than we are.

>
> My gut says we're gonna move slow for the next few years but I wouldn't be
too
> surprised if there is another correction.

Nothing surprises me anymore but I also wouldn't be surprised if we were at
the beginning of a new bull run.

>
> Sometimes when the bubble pops, there's a rally for a few years followed
by
> a bigger pop.

And sometimes after a rally (1980's) you get another rally (1990's).

>
> Myself, I"m holding on to what I have. Most of it is the S&P500 in my
401k,
> the rest of it is in some international stocks & muni's.

Hardly a bet against US multi-nationals. I think the world economy has lots
of room to grow and I believe large cap multi-nationals can only grow their
earnings in such an environment.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

Herb <> wrote:

> An inverted yield curve means people expect to get higher interest rates
> later. Although we all expect higher interest rates they stubbonly refuse
> to rise and are still at fairly low levels historically, even for a growing
> economy.

It's been a precussor to every recession we've had recently. It's too
soon to say if it will fully invert. This happened in 1999.

> Why? What are the alternatives? Euros? Yen? Gold (I wish)?

The dollar has been declining for years now. What would stop it?

> Many years ago I would have agreed that this is a problem but after so many
> years of it, I'm beginning to wonder. Also, isn't the budget deficit going
> down?

No, it went up temporarily because a corporate tax cut that the administration
put into place expired. This was temporary though.

The CBO still projects expanding deficits into the coming years. I
know this was widely reported in the press that the deficit is going
down but it isn't the case at all.

> Didn't existing and new home sales do very well last month? Again, we all
> assume housing is in trouble if interest rates rise but we've been waiting
> for years for this rise.

But that's the problem, it still did well. We can't have an economy based
too much on housing. I know some people makign a lot of money in
real estate in the DC area, all of them plan on pulling out within
2yrs max.

> And this is bad for corporate earnings? As long as inflation is tame and
> incomes are rising, I wouldn't worry too much about employment. Other
> countries are doing much worse than we are.

Wages have actually been pretty flat for the last few years.

> Nothing surprises me anymore but I also wouldn't be surprised if we were at
> the beginning of a new bull run.

I just don't see it in the fundamentals, there needs to be strong growth
in the economy, jobs, wages & serious deficit reduction before we enter
into another bull market.

But, if I could predict the market with 100% efficiency I'd have retired
by now.

> Hardly a bet against US multi-nationals. I think the world economy has lots
> of room to grow and I believe large cap multi-nationals can only grow their
> earnings in such an environment.

I agree with you here! Wether you're bullish or bearish on US equities I
think everyone can agree on some multi-national plays.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Rachel Diser" <> wrote

> Herb <> wrote:
>
>> An inverted yield curve means people expect to get higher interest rates
>> later. Although we all expect higher interest rates they stubbonly
>> refuse
>> to rise and are still at fairly low levels historically, even for a
>> growing
>> economy.
>
> It's been a precussor to every recession we've had recently. It's too
> soon to say if it will fully invert. This happened in 1999.

No it didn't.


>> Why? What are the alternatives? Euros? Yen? Gold (I wish)?
>
> The dollar has been declining for years now. What would stop it?

Something seems to have, at least against many currencies.





> I just don't see it in the fundamentals, there needs to be strong growth
> in the economy, jobs, wages & serious deficit reduction before we enter
> into another bull market.

We are in a bull market.


So are they.

Re: Lifestyle funds (Vanguard) vs. individual funds

Ed <> wrote:

>

Look at your chart more closely. In 1992 the curve is really strong and we have a bull market.
Look at the 1999 readings, not so curved, a little bit flatter.



Do you see the inversion in 2000? My mistake, I thought rates were inverting sooner. But if you
look at your link you'll see that the curve is fairly flat in 1999.

> Something seems to have, at least against many currencies.
>
>
>

Temporary. The fundamentals are just not there to support it. Eventually China and other
will grow tired of financing our debt and the dollar will continue to fall.

>> I just don't see it in the fundamentals, there needs to be strong growth
>> in the economy, jobs, wages & serious deficit reduction before we enter
>> into another bull market.
> We are in a bull market.
>
>

We are right now. I don't think it will sustain itself very far into 2006 though.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote

> Ed <> wrote:
>
>>
>
> Look at the 1999 readings, not so curved, a little bit flatter.

Flatter but not inverted. The op's statement claimed that it was inverted
in 1999. That is false.

>

> Do you see the inversion in 2000? My mistake, I thought rates were
> inverting sooner. But if you
> look at your link you'll see that the curve is fairly flat in 1999.

It is not inverted.

>> Something seems to have, at least against many currencies.
>>
>>
>>
>
> Temporary. The fundamentals are just not there to support it. Eventually
> China and other
> will grow tired of financing our debt and the dollar will continue to
> fall.

We'll see.

>>> I just don't see it in the fundamentals, there needs to be strong growth
>>> in the economy, jobs, wages & serious deficit reduction before we enter
>>> into another bull market.
>> We are in a bull market.
>>
>>
>
> We are right now. I don't think it will sustain itself very far into
> 2006 though.

Again, we'll see. Another poster would have us in the midst of "the mother
of all bear markets" at some point between now and the last couple of years.
Didn't happen. Rates had nowhere to go but up for the last 5 years or so.
Didn't happen in any meaningful way. 'Right now' is all that counts,
predictions mean very little.

I predicted the SWB would hit $5 but sold it for less than that. It's $5.89
as I write. I should have listened to myself but predictions mean very
little.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Rachel Diser" <> wrote in message
news:G7pHe.45426$
> Herb <> wrote:
>
> > An inverted yield curve means people expect to get higher interest rates
> > later. Although we all expect higher interest rates they stubbonly
refuse
> > to rise and are still at fairly low levels historically, even for a
growing
> > economy.
>
> It's been a precussor to every recession we've had recently. It's too
> soon to say if it will fully invert. This happened in 1999.
>
> > Why? What are the alternatives? Euros? Yen? Gold (I wish)?
>
> The dollar has been declining for years now. What would stop it?

Fear that its alternatives are overvalued or a renewed desire to invest in
the US which is growing faster than Europe and Japan or a flight to
"quality" in a crisis to name a few.

>
> > Many years ago I would have agreed that this is a problem but after so
many
> > years of it, I'm beginning to wonder. Also, isn't the budget deficit
going
> > down?
>
> No, it went up temporarily because a corporate tax cut that the
administration
> put into place expired. This was temporary though.
>
> The CBO still projects expanding deficits into the coming years. I
> know this was widely reported in the press that the deficit is going
> down but it isn't the case at all.
>
> > Didn't existing and new home sales do very well last month? Again, we
all
> > assume housing is in trouble if interest rates rise but we've been
waiting
> > for years for this rise.
>
> But that's the problem, it still did well. We can't have an economy based
> too much on housing. I know some people makign a lot of money in
> real estate in the DC area, all of them plan on pulling out within
> 2yrs max.
>
> > And this is bad for corporate earnings? As long as inflation is tame
and
> > incomes are rising, I wouldn't worry too much about employment. Other
> > countries are doing much worse than we are.
>
> Wages have actually been pretty flat for the last few years.
>
> > Nothing surprises me anymore but I also wouldn't be surprised if we were
at
> > the beginning of a new bull run.
>
> I just don't see it in the fundamentals, there needs to be strong growth
> in the economy, jobs, wages & serious deficit reduction before we enter
> into another bull market.

I thought growth was strong: not a boom but a nice, sustainable rate.
Again, I would have agreed, years ago, that continuing deficits must lead to
higher interest, inflation and slower growth but that hasn't been the case
for the last 20 years or so. As long as inflation stays tame and interest
rates aren't soaring, I don't know why we can't continue growth of GDP.

>
> But, if I could predict the market with 100% efficiency I'd have retired
> by now.
>
> > Hardly a bet against US multi-nationals. I think the world economy has
lots
> > of room to grow and I believe large cap multi-nationals can only grow
their
> > earnings in such an environment.
>
> I agree with you here! Wether you're bullish or bearish on US equities I
> think everyone can agree on some multi-national plays.

I think large-cap American (S&P 500) and multi-national are almost
synonymous aren't they? Most big companies are very active overseas and
derive an increasing amount of their revenues outside the US.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

Ed <> wrote:
>> look at your link you'll see that the curve is fairly flat in 1999.
> It is not inverted.

Splitting hairs :) I agree, the OP should have stated it better.
Flatness & inversion in the yield curve generally point to bad
things ahead.

>> Temporary. The fundamentals are just not there to support it. Eventually
>> China and other
>> will grow tired of financing our debt and the dollar will continue to
>> fall.
> We'll see.

The big risk with the dollar is that these foreign banks may unload their
dollar denominated assets. Given that the account and budget deficits
continue to expand, I can see why that is a concern.

> Again, we'll see. Another poster would have us in the midst of "the mother
> of all bear markets" at some point between now and the last couple of years.
> Didn't happen. Rates had nowhere to go but up for the last 5 years or so.
> Didn't happen in any meaningful way. 'Right now' is all that counts,
> predictions mean very little.

Well, we've done a great deal to stimulate the economy: expansion of government,
deficit spending, massive tax cuts, military spending & reductions in interest rates.
I can see why the economy has rebounded since 2000-2001.

What concerns me is:

- deficits continue to expand I'm bearish about the dollar
- energy costs going up
- job growth lagging and wages being stifled
- too much of a dependence on housing for what growth we've seen

> I predicted the SWB would hit $5 but sold it for less than that. It's $5.89
> as I write. I should have listened to myself but predictions mean very
> little.

Yeah, I agree. I'm just speculating here. I can't say any of this with 100%
certainity.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote in message
news:fAtHe.45458$

>> >> Temporary. The fundamentals are just not there to support it.
Eventually
> >> China and other
> >> will grow tired of financing our debt and the dollar will continue to
> >> fall.

They can grow as tired as you like but they are still the ones holding the
bag. What is missing here is what you think our creditors will switch to
and what will happen to prices there.

Recently the South Korean central bank made some vague statement about
trimming its vast portfolio of US Treasury debt. The value of their
portfolio plunged and they had to retract much of what they had said to stem
the fall.

I will believe the dollar will plunge when someone shows me an alternative
that can absorb such huge amounts of money.

The Chinese economy is heavily dependent on export to the US. If and when
we can't afford to finance this, it is their economy that will collapse
first.

I don't know how it will all turn out but the largest holders of US dollars
have a real self interest in maintaining its value so that we can continue
to buy their goods.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote

> The big risk with the dollar is that these foreign banks may unload their
> dollar denominated assets. Given that the account and budget deficits
> continue to expand, I can see why that is a concern.

A small concern. If they don't finance us who will buy their junk?

>> Again, we'll see. Another poster would have us in the midst of "the
>> mother
>> of all bear markets" at some point between now and the last couple of
>> years.
>> Didn't happen. Rates had nowhere to go but up for the last 5 years or so.
>> Didn't happen in any meaningful way. 'Right now' is all that counts,
>> predictions mean very little.
>
> Well, we've done a great deal to stimulate the economy: expansion of
> government,
> deficit spending, massive tax cuts, military spending & reductions in
> interest rates.
> I can see why the economy has rebounded since 2000-2001.
>
> What concerns me is:
>
> - deficits continue to expand I'm bearish about the dollar
> - energy costs going up
> - job growth lagging and wages being stifled
> - too much of a dependence on housing for what growth we've seen

The refi think had a great deal to do with holding up the markets. Important
point. If rates do move up it will end refinancing and hurt those with
variable rate mortgages.

Interesting document:

Re: Lifestyle funds (Vanguard) vs. individual funds

Herb <> wrote:

> Recently the South Korean central bank made some vague statement about
> trimming its vast portfolio of US Treasury debt. The value of their
> portfolio plunged and they had to retract much of what they had said to stem
> the fall.

Ok, so the crisis is diverted and the dollar still plummets. In your scenario,
they're still buying up dollar denominated assets. Why? Because the account
deficit and budget deficit continue to expand. The dollar continues to weaken.

LSBRX - buy some and thank me later ;) I never thought a bond fund would be so
lucrative for me.

> I will believe the dollar will plunge when someone shows me an alternative
> that can absorb such huge amounts of money.

It may be rallying now but it will continue downward.

> The Chinese economy is heavily dependent on export to the US. If and when
> we can't afford to finance this, it is their economy that will collapse
> first.

And we are heavily dependant on asian banks to fund our deficits.

> I don't know how it will all turn out but the largest holders of US dollars
> have a real self interest in maintaining its value so that we can continue
> to buy their goods.

They have an interest in the US getting by, not really much of an interest in us
having a strong dollar.

And I agree, I don't know how this will all shake out. But I feel it is a very
likely possibility that we have another correction and a recession in about a
year's time.

Is that even worth predicting or discussing at this point? Not really sure. Just
offering up my opinion.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote in message
news:rbCHe.43063$
> Herb <> wrote:
>
> > Recently the South Korean central bank made some vague statement about
> > trimming its vast portfolio of US Treasury debt. The value of their
> > portfolio plunged and they had to retract much of what they had said to
stem
> > the fall.
>
> Ok, so the crisis is diverted and the dollar still plummets. In your
scenario,
> they're still buying up dollar denominated assets. Why? Because the
account
> deficit and budget deficit continue to expand. The dollar continues to
weaken.

They're buying dollar denominated assets because they are stuck with dollars
our main export it seems.

>
> LSBRX - buy some and thank me later ;) I never thought a bond fund would
be so
> lucrative for me.

I think we are all doing better in bonds than we would have predicted a few
years ago.

>
> > I will believe the dollar will plunge when someone shows me an
alternative
> > that can absorb such huge amounts of money.
>
> It may be rallying now but it will continue downward.

Hard to believe it won't continue downward but I don't think it will crash
(unless global economy collapses).

>
> > The Chinese economy is heavily dependent on export to the US. If and
when
> > we can't afford to finance this, it is their economy that will collapse
> > first.
>
> And we are heavily dependant on asian banks to fund our deficits.

Coincidence? I think not. Those economies seem built to provide
manufactured goods to North America. Since they don't buy as much from us,
they are left with lots of dollars to put to work.

In order to sell dollars you have to buy something else. Asian central
banks have no interest in buying their own currencies driving up the prices
of their exports. I don't see any currency rivaling the dollar. The only
real candidate is the Euro but look at what a mess Europe is right now.

>
> > I don't know how it will all turn out but the largest holders of US
dollars
> > have a real self interest in maintaining its value so that we can
continue
> > to buy their goods.
>
> They have an interest in the US getting by, not really much of an interest
in us
> having a strong dollar.

Stronger that it would be. Look at the games the Chinese are playing with
their exchange rate.
>
> And I agree, I don't know how this will all shake out. But I feel it is a
very
> likely possibility that we have another correction and a recession in
about a
> year's time.

I don't see why. The US dollar plays a second role as the global currency
and I think we get away with a lot of printing because the growing world
economy can absorb a lot of dollars.

>
> Is that even worth predicting or discussing at this point? Not really
sure. Just
> offering up my opinion.

Hey, it's all opinion, isn't it? Still it's always fun to speculate.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

"Ed" <> wrote in message
news:
>
> The refi think had a great deal to do with holding up the markets.
> Important point. If rates do move up it will end refinancing and hurt
> those with variable rate mortgages.
>

And just think about how many people have an "interest only" mortgage!
Why in the world would anyone do that? Yet I hear commercials to them
everyday.

Re: Lifestyle funds (Vanguard) vs. individual funds

Probably because that is all they can afford, or want to afford, and are
betting on real estate prices continuing to escalate so they can sell out at
a profit......

Or, think of it another way. If you are renting an apartment, no cheap thing
these days, so you dump that rent payment into interest instead, which is
tax deductible.. you are ahead already. Of course, there are taxes, etc.
(the etc. includes rakes and lawnmowers and snowblowers).... and a home
instead of an apartment existence.

So, while it doesn't make sense in the old pay-down-the-mortgage mentality,
it might in the new era of double digit home value increases.....

A house around here that sold for 120k 3 years ago is now fetching 200k.....
not a bad return on investment. Especially for most non-investor
investors...

Arne
..
..
"Gary C" <> wrote in message
news:QxIHe.232>>
>
> And just think about how many people have an "interest only" mortgage!
> Why in the world would anyone do that? Yet I hear commercials to them
> everyday.
>

Re: Lifestyle funds (Vanguard) vs. individual funds

Herb <> wrote:

> They're buying dollar denominated assets because they are stuck with dollars
> our main export it seems.

They're buying them to fund the deficit. We keep printing up the supply of
dollars and expanding our deficits and this devalues the dollar further.

I agree, the EU didn't pan out. But, that didn't stop Russia from increasing
their share of euro's from 30 to 35% just the other day.



> Hard to believe it won't continue downward but I don't think it will crash
> (unless global economy collapses).

Ok, then we're in agreement. It feels almost slimey to do it since we're
both Americans here but I'm still betting against the dollar.

Will there be a crisis? The end of the world? The way poster Phil Scott
predicts? I don't think so.

> In order to sell dollars you have to buy something else. Asian central
> banks have no interest in buying their own currencies driving up the prices
> of their exports. I don't see any currency rivaling the dollar. The only
> real candidate is the Euro but look at what a mess Europe is right now.

See above post regarding the euro.

Last I checked, Soros & Buffet were short the dollar.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote

> Ok, then we're in agreement. It feels almost slimey to do it since we're
> both Americans here but I'm still betting against the dollar.


Go for it!!

> Will there be a crisis? The end of the world? The way poster Phil Scott
> predicts? I don't think so.

Phil seems angry about something.

> Last I checked, Soros & Buffet were short the dollar.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Arne" <> wrote

> A house around here that sold for 120k 3 years ago is now fetching
> 200k..... not a bad return on investment. Especially for most non-investor
> investors...
>
> Arne

Can you really buy a house for $200k in CT? Wow, I never would have believed
it. $200k will get you a wooded acre around here.

Re: Lifestyle funds (Vanguard) vs. individual funds

Mike Stone wrote:
> Herb <> wrote:
>
>
>>They're buying dollar denominated assets because they are stuck with dollars
>>our main export it seems.
>
>
> They're buying them to fund the deficit. We keep printing up the supply of
> dollars and expanding our deficits and this devalues the dollar further.
>
> I agree, the EU didn't pan out. But, that didn't stop Russia from increasing
> their share of euro's from 30 to 35% just the other day.
>
Do you mean the European Union or the Euro "did not pan out"? I think
you will find the EU is expanding all the time as many other countries
join it and still others want to do so. Hundreds of millions of us would
rather live in the EU than anywhere else.

The Euro was 0.97 per dollar in 2000 but is now only 0.82 per dollar so
it would seem to have been the dollar that has devalued by 18% relative
to the Euro in that time. The Euro has proved the stronger currency.

Re: Lifestyle funds (Vanguard) vs. individual funds

"David Wilkinson" <> wrote
> Hundreds of millions of us would rather live in the EU than anywhere else.

That's only natural, whouldn't you agree?

If all of these hundreds of millions tried living in another country for 6
months or a year, only then could they make an informed decision on that
country.

Re: Lifestyle funds (Vanguard) vs. individual funds

Ed wrote:
> "David Wilkinson" <> wrote
>
>>Hundreds of millions of us would rather live in the EU than anywhere else.
>
>
> That's only natural, whouldn't you agree?
>
Yes

> If all of these hundreds of millions tried living in another country for 6
> months or a year, only then could they make an informed decision on that
> country.

I don't think we need to go that far. A lot of us have visited the USA
on holiday and business and it gets very large coverage on TV and in
films. We know what it is like. We probably know more about it than the
average American knows about the EU. Some US citizens, even in the
highest offices, had never been anywhere outside the USA until recently.

There are lots of good places to live in the USA and some bad ones as
well. Ditto the EU. Most of us could live in either happily. I was just
querying the odd statement that the EU "did not pan out". For the many
hundreds of millions living and working here in the EU, and the
apparently even greater number trying to get in, it has panned out very
well. What's the OP's beef about the EU?
>
>

Re: Lifestyle funds (Vanguard) vs. individual funds

"David Wilkinson" <> wrote in message
news:dcnu1m$jbk$
> Mike Stone wrote:
> > Herb <> wrote:
> >
> >
> >>They're buying dollar denominated assets because they are stuck with
dollars
> >>our main export it seems.
> >
> >
> > They're buying them to fund the deficit. We keep printing up the supply
of
> > dollars and expanding our deficits and this devalues the dollar further.
> >
> > I agree, the EU didn't pan out. But, that didn't stop Russia from
increasing
> > their share of euro's from 30 to 35% just the other day.
> >
> Do you mean the European Union or the Euro "did not pan out"? I think
> you will find the EU is expanding all the time as many other countries
> join it and still others want to do so. Hundreds of millions of us would
> rather live in the EU than anywhere else.
>
> The Euro was 0.97 per dollar in 2000 but is now only 0.82 per dollar so
> it would seem to have been the dollar that has devalued by 18% relative
> to the Euro in that time. The Euro has proved the stronger currency.

David:

You are overstating the case a bit. Don't forget that the Euro was
introduced at $1.17 (.854).

What I think we are talking about is the failure of Europe to come up with a
single set of policies that all members can adhere to. Many countries are
out of compliance with their agreements. The failure to ratify the new
constitution only makes resolution of this problem more remote.

What I would think would make world investors hesitate to abandon the dollar
is the chaotic patchwork of fiscal policies, the huge government sector, the
subsidies to various sectors in contravention of agreements, the aging
population, high unemployment rate and the slow growth.

No one is saying that Europe wouldn't be a nice place to live. The wine and
cheese alone are worth the trip.

I don't doubt that the average European knows more about the US than the
average American knows about the US but if your impression comes only from
show business and the corporate news industry, you would be pretty shocked
by the reality, I think.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

Herb wrote:
> "David Wilkinson" <> wrote in message
> news:dcnu1m$jbk$
>

>
> David:
>
> You are overstating the case a bit. Don't forget that the Euro was
> introduced at $1.17 (.854).
>
> What I think we are talking about is the failure of Europe to come up with a
> single set of policies that all members can adhere to. Many countries are
> out of compliance with their agreements. The failure to ratify the new
> constitution only makes resolution of this problem more remote.
>
Herb

I think we are still trying to decide what the EU ought to be. The
original founders (probably) and many enthusiasts today favour a United
States of Europe with one central government. The rest of us, the
majority, favour less unification than that, anything down to a loosely
knit free trade organisation or even to wanting to pull out altogether
and carry on as separate countries.

I don't see this as a failure. It would be so only if some higher power,
or a majority of the EU voters, had decreed at some stage what we should
be and we had failed to get there. In reality this is true democracy in
action with those involved trying to decide what they want and is
therefore a success in that we are not having an undesirable system
forced on us against the majority view.

One failure there has been is to establish what the voters actually
want. The last time the British people were consulted was in Ted Heath's
golden days, in about 1973 or 1976 or some such, when we had a
referendum on joining the Common Market as it then was, to which we said
yes. Since then it has grown and developed and mutated into a giant
red-tape machine with a life of its own, a huge gravy train of meddling
corrupt, expense fiddling officials. You can tell I am unbiased from my
neutral tone here :-)

The original countries, except Britain (not actually an original country
strictly because de Gaulle kept us out for some time) scrapped their own
currencies and adopted the Euro. They also scrapped their Central Banks
in favour of the European Central Bank. We thought this would not work
and stayed out of the Euro, preferring to manage our own economy rather
than submerge it in a one-policy-fits-all Euro system. And we were right
as our economy has done much better than the Euro zone economies in
terms of growth. Doom sayers about the pound and the City of London as a
financial centre have been proved wrong and we are still the fourth
largest economy in the world in a little offshore island with only 60
million people. No UK government or party thinks it has a chance of
getting the people to scrap the pound and adopt the Euro now. All the
polls show us about 70% against the Euro.

However there is a creeping tendency for our laws and justice system to
be replaced by the Central European court and its rulings and a document
on human rights. The softening of frontiers has proved a disaster in
that hordes of foreigners keep coming in and the government either will
not or cannot stop them. We have 2 million Asian Muslims among us, some
unknown number of whom are potential terrorists who have started letting
off bombs in buses and tube trains.

The Unite States of Europe fans are still trying to get their evil way
and their latest move was to spend two years writing up a very detailed
European constitution transferring most powers to the central government
with a President, Foreign Minister and even a combined defence force.
All the politicians agreed to this and signed it, without any of them
asking the voters, even though this was a major transfer of national
sovereignty to another form of government.

The snag for the politicians and gravy trainers was that all the
governments without a single exception had to ratify it and several of
them rashly offered to hold a referendum on it. Shock, horror! They
would ask the voters instead of the usual tinpot-dictator, we-know-best
act, which they had all followed up until then. The NON from the French
referendum was a major shock as no one had thought a founder nation
could vote against it. But no one had asked them before. It only needs
one country's NO or NON vote to block the whole thing. The Dutch voted
no as well. The British would vote no in spades if given a chance but
Blair is saying the constitution is already a dead duck and there is no
point.

The whole thing has gone into limbo with the centralisers trying to get
the constitution passed bit by bit while the rest of us hope it will
die. The fact is that unlike America we have 24 different languages,
cultures, economies and ways of doing things and there is no chance
these are ever going to merge together into one. The French voters
actually voted against the constitution because they thought it was too
Anglo-Saxon, too much like the UK and US free market capitalist systems
and not centralised enough like the French socialist model. If asked,
the British voters will say the opposite, that it is too much like the
French social market system with its state control, rule by unions, high
taxes and central control of everything by civil servants. That's the
dilemma. We don't think alike so we are not going to agree. A loose
federation of nation states looks like continuing, but what is wrong
with that?

> What I would think would make world investors hesitate to abandon the dollar
> is the chaotic patchwork of fiscal policies, the huge government sector, the
> subsidies to various sectors in contravention of agreements, the aging
> population, high unemployment rate and the slow growth.
>
Most of these are problems of the EU. One interest rate cannot be right
for the wildly different German and Italian economies, for instance. Try
and reduce the taxes and social benefits of the French and they come out
in the streets rioting. The Germans just vote their government out of
office for suggesting it. They are happy with big subsidies for French
farmers and big pensions and don't care if they are growing slowly.

> No one is saying that Europe wouldn't be a nice place to live. The wine and
> cheese alone are worth the trip.
>
> I don't doubt that the average European knows more about the US than the
> average American knows about the US but if your impression comes only from
> show business and the corporate news industry, you would be pretty shocked
> by the reality, I think.
>
> -herb
>
>
I think you meant "..knows about the EU..", not US. I did not say from
show business alone. I said from visits on business and holidays as well.

David

Re: Lifestyle funds (Vanguard) vs. individual funds

Ed <> wrote:
> If all of these hundreds of millions tried living in another country for 6
> months or a year, only then could they make an informed decision on that
> country.

Agreed. It's too much of a culture shock to deal with even if they do have
a "nicer" welfare state than ours.

Re: Lifestyle funds (Vanguard) vs. individual funds

"David Wilkinson" <> wrote in message
news:dcoi8r$rt2$
> Herb wrote:
> > "David Wilkinson" <> wrote in message
> > news:dcnu1m$jbk$
> >
>
> >
> > David:
> >
> > You are overstating the case a bit. Don't forget that the Euro was
> > introduced at $1.17 (.854).
> >
> > What I think we are talking about is the failure of Europe to come up
with a
> > single set of policies that all members can adhere to. Many countries
are
> > out of compliance with their agreements. The failure to ratify the new
> > constitution only makes resolution of this problem more remote.
> >
> Herb
>
> I think we are still trying to decide what the EU ought to be. The
> original founders (probably) and many enthusiasts today favour a United
> States of Europe with one central government. The rest of us, the
> majority, favour less unification than that, anything down to a loosely
> knit free trade organisation or even to wanting to pull out altogether
> and carry on as separate countries.
>
> I don't see this as a failure. It would be so only if some higher power,
> or a majority of the EU voters, had decreed at some stage what we should
> be and we had failed to get there. In reality this is true democracy in
> action with those involved trying to decide what they want and is
> therefore a success in that we are not having an undesirable system
> forced on us against the majority view.

David

I didn't mean some kind of moral failure. The Euro zone (if you will) has
simply failed to gel into one economy with one set of predictible economic
policies. I don't think the Euro will ever be a rival to the dollar as the
world's trade currency until that happends (right after hell freezes over
and France adopts English).

Don't forget that the United States (of America) lurched through 70 years of
crises then a civil war before federalism finally prevailed.

[snip analysis of Europe's failure to unite with which I generally agree]
>
> > What I would think would make world investors hesitate to abandon the
dollar
> > is the chaotic patchwork of fiscal policies, the huge government sector,
the
> > subsidies to various sectors in contravention of agreements, the aging
> > population, high unemployment rate and the slow growth.
> >
> Most of these are problems of the EU. One interest rate cannot be right
> for the wildly different German and Italian economies, for instance. Try
> and reduce the taxes and social benefits of the French and they come out
> in the streets rioting. The Germans just vote their government out of
> office for suggesting it. They are happy with big subsidies for French
> farmers and big pensions and don't care if they are growing slowly.
>

Exactly. All this doesn't support the currency.


> > I don't doubt that the average European knows more about the US than the
> > average American knows about the US but if your impression comes only
from
> > show business and the corporate news industry, you would be pretty
shocked
> > by the reality, I think.
> >
> > -herb
> >
> >
> I think you meant "..knows about the EU..", not US. I did not say from
> show business alone. I said from visits on business and holidays as well.

No, I meant US. Most Americans can't locate France nor Texas on a map. I
think you seriously underestimate the ignorance of the average American in
terms of what is going on in the rest of the world. Most of us simply don't
care what happens outside our own town or county, let alone state or
country. Generally the "pursuit of happiness" is a deeply personal
experience.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

I avoid the news whenever possible. Others will spend significant amounts of
time discussing what has happened (per the 'news')...... They seem to be, as
a group, on high blood pressure medication and/or high cholesterol
medication. I am on neither (at age 65, b/p is 110/70, cholesterol 175).

I'm wondering if there are medical/stress implications from worrying about
things that we can not control. From locker-room discussions I've been
within ear-shot distance of, I do think that many Americans are concerned
about many happenings around the world, at least those that involve our
country. Or sports. Sports seem to have an out-of-proportion effect on men.
They seem to get quite emotionally involved in contrived crises like
baseball and football and talk about the players like they are personal
friends on a first name basis .. and feel particularly let down when their
sports 'friends' do something by commission/omission that causes their
favorite team to lose. I think I can actually hear their blood pressure
going up in direct proportion to the volume of their voices.

Since I tend to be a participant in life, not a spectator, I'm not much of a
sports fan(atic). But you may have already guessed that. I do try to catch
news items like the farmers driving their tractors down the Champs Elysées.
Now, that is just plain entertaining.

Arne
..
..
"Herb" <
>
> Most of us simply don't
> care what happens outside our own town or county, let alone state or
> country. Generally the "pursuit of happiness" is a deeply personal
> experience.
>
> -herb
>
>

Re: Lifestyle funds (Vanguard) vs. individual funds

Mike Stone wrote:
> Ed <> wrote:
> > If all of these hundreds of millions tried living in another country for 6
> > months or a year, only then could they make an informed decision on that
> > country.
>
> Agreed. It's too much of a culture shock to deal with even if they do have
> a "nicer" welfare state than ours.

The apposite comparison for most Americans would be Canada: medical
marijuana, gay marriage, socialised healthcare, gun control, official
multiculturalism and bilingualism. To a greater or lesser extent
Canada is America run by liberals or as a common aphorism puts it
'America run by the Swiss' (actually America run by the Scots is more
like it).

The cultures in the English-speaking parts are similar (although there
are differences many Americans easily miss: eg Americans sound to
Canadians, by and large, like they are yelling as one American woman in
Toronto said 'my time here would have been a lot easier if someone had
told me that to them I am yelling' ;-). And you have to put up with
repeated chippy remarks about the USA ;-).

Re: Lifestyle funds (Vanguard) vs. individual funds

darkness39 <> wrote:
> The apposite comparison for most Americans would be Canada: medical
> marijuana, gay marriage, socialised healthcare, gun control, official
> multiculturalism and bilingualism. To a greater or lesser extent
> Canada is America run by liberals or as a common aphorism puts it
> 'America run by the Swiss' (actually America run by the Scots is more
> like it).

Not even close. Do you know why gay marriage isn't allowed in all
these states? Because Bill Clinton signed a law that preserved
state's rights in the matter.

Legalization of marijuana is pretty much non-existent but remember that
conservatives, libeterians & liberals have all supported it. And I
tend to agree, freedom doesn't mean you're protected from everything.
Let the hippies do their thing.

Take a look at the Dems party platform, support for the death penalty
and health care reforms looking nothing like european single payer.

There's a left in this country represented largely in a few universities
and by Ralph Nader. Throw in a few blogs too.

The democratic party is generally speaking to the right of most leftist
European & Canadian political parties. The Dems are definitely to the
right of Tony Blair's labor party.

America stands out among all other developed countries in it's adherance
to conservatism.

By American standards, Democrats may be "evil librulz" but on the world
stage they're not very close to the left.

No, this isn't a partisan rant. I could make the same argument that the
GOP isn't that conservative either (medicaid drug cards, nation building
etc...). I believe that the American definiton of "liberal" and "conservative" is entirely different from everyone else's.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote in message
news:lA4Ie.59936$
> darkness39 <> wrote:
> > The apposite comparison for most Americans would be Canada: medical
> > marijuana, gay marriage, socialised healthcare, gun control, official
> > multiculturalism and bilingualism. To a greater or lesser extent
> > Canada is America run by liberals or as a common aphorism puts it
> > 'America run by the Swiss' (actually America run by the Scots is more
> > like it).
>
> Not even close. Do you know why gay marriage isn't allowed in all
> these states? Because Bill Clinton signed a law that preserved
> state's rights in the matter.
>
> Legalization of marijuana is pretty much non-existent but remember that
> conservatives, libeterians & liberals have all supported it. And I
> tend to agree, freedom doesn't mean you're protected from everything.
> Let the hippies do their thing.
>
> Take a look at the Dems party platform, support for the death penalty
> and health care reforms looking nothing like european single payer.
>
> There's a left in this country represented largely in a few universities
> and by Ralph Nader. Throw in a few blogs too.
>
> The democratic party is generally speaking to the right of most leftist
> European & Canadian political parties. The Dems are definitely to the
> right of Tony Blair's labor party.
>
> America stands out among all other developed countries in it's adherance
> to conservatism.
>
> By American standards, Democrats may be "evil librulz" but on the world
> stage they're not very close to the left.
>
> No, this isn't a partisan rant. I could make the same argument that the
> GOP isn't that conservative either (medicaid drug cards, nation building
> etc...). I believe that the American definiton of "liberal" and
"conservative" is entirely different from everyone else's.

Traditionally, American political parties have been nothing like their
European counterparts. In Europe, parties are based on ideology. They
compete for seats in parliament then work out a national compromise after
the election.

American parties used to have a "big tent" mentality with room for a wide
spectrum of ideas. Each party had a liberal and a conservative wing. The
parties would get together in convention and hammer out a national
compromise that would then be presented to the voters to compete with the
other party's national compromise.

When I was a kid we had Southern conservatives among the Democrats and the
Republican party had a liberal wing (we had a black, Republican senator here
in Massachusetts). Lately, it seems, that the Republicans have purged the
liberals and the Democrat have alienated the conservatives.

I think this is a mistake. No ideology is broad enough to encompass the
broad spectrum of the American people and the House is not the type of place
to form a coalition government.

-herb

Re: Lifestyle funds (Vanguard) vs. individual funds

Mike Stone wrote:
> darkness39 <> wrote:
> > The apposite comparison for most Americans would be Canada: medical
> > marijuana, gay marriage, socialised healthcare, gun control, official
> > multiculturalism and bilingualism. To a greater or lesser extent
> > Canada is America run by liberals or as a common aphorism puts it
> > 'America run by the Swiss' (actually America run by the Scots is more
> > like it).
>
> Not even close.

I agree American politics are generally to the right of other developed
nations.

However if you went to Vermont or Oregon or other famously liberal
places you would find people
who advocate the 'Canadian cocktail'.

I think what you need to do is apply that 2X2 model:

- on one axis 'attitude to control by the state over the individual'
-- both libertarians and liberals tend to score low on this, whereas
social conservatives score high (abortion, marijuana etc.).
Libertarians tend to be Republicans, so do social conservatives. Gun
control is a very specifically American issue-- no other country has
the same degree of focus on it (Switzerland is a very special case).

- on another axis 'attitude to control by the state over the economy' -
libertarians tend to score very low on this so do many Wall Street
conservatives (support of free trade, opposed to regulation and
taxation, opposition to single payer forms of healthcare). Liberals
tend to score quite high on this. However social conservatives are not
as strongly anti. Most Republicans are pro an interventionist foreign
policy (and high military expenditures). GW Bush managed the highest
increase in government spending of any president since Lyndon Johnson,
but he is wildly popular with conservatives (but the libertarian Cato
institute continues to howl).

So it is not clear what 'conservative' and 'liberal' means in some of
these contexts-- certainly it doesn't align perfectly with 'Republican'
and 'Democrat'. By and large though you can say the 'conservative'
Republicans are *against* state intervention in the economy (but not
farm subsidies ;-) and *for* state intervention in the private lives of
individuals and the 'liberal' Democrats are the reverse.

For what it is worth, the 'Liberal' government of Canada is far more
devoted to balanced budgets than any 'conservative' government in the
US.


Do you know why gay marriage isn't allowed in all
> these states? Because Bill Clinton signed a law that preserved
> state's rights in the matter.
>
> Legalization of marijuana is pretty much non-existent

not in Oregon and California ;-). I said 'medical' marijuana.


but remember that
> conservatives, libeterians & liberals have all supported it. And I
> tend to agree, freedom doesn't mean you're protected from everything.
> Let the hippies do their thing.

Actually I was thinking people in chronic pain and the terminally ill.

>
> Take a look at the Dems party platform, support for the death penalty
> and health care reforms looking nothing like european single payer.

I'm not sure most Democrats, in terms of the party members, would
support the death penalty. Most would support a healthcare system like
that of France, if not that of Canada.

Party Platforms are tricky and not necessarily representative: the
Texas Republican one calls for a return to the Gold Standard ;-). It
also more or less seems to call for a theocracy.

>
> There's a left in this country represented largely in a few universities
> and by Ralph Nader. Throw in a few blogs too.
>
> The democratic party is generally speaking to the right of most leftist
> European & Canadian political parties.

Agreed but that is a reflection of American politics in general.

The Dems are definitely to the
> right of Tony Blair's labor party.

>
> America stands out among all other developed countries in it's adherance
> to conservatism.

Agreed. This I think has a lot to do with the degree to which religion
is still influential in American life whereas by and large in Western
Europe and Canada it is not.


>
> By American standards, Democrats may be "evil librulz" but on the world
> stage they're not very close to the left.

Yes. The old Progressives of Henry Wallace et al. are closer to the
European Social Democratic parties.
>
> No, this isn't a partisan rant. I could make the same argument that the
> GOP isn't that conservative either (medicaid drug cards, nation building
> etc...). I believe that the American definiton of "liberal" and "conservative" is entirely different from everyone else's.

See above and broadly I agree. I still say Canada is America run by
liberals, if liberals are taken to be the New York City/ Vermont/
Oregon stripe (maybe throw in Wisconsin).

Re: Lifestyle funds (Vanguard) vs. individual funds

I've seen some data that shows what has happened is the Congressional
Democrats, ideologically, have more or less stayed where they are and
the Republicans have moved well to the right over the past 25 years--
this was based on patterns of voting behaviour. The Bull Moose
progressive Northeastern faction of the Republicans is virtually
extinct in the House and going that way in the Senate -- the odds are
Snow, Chaffee et al. will be replaced by Democrats. Toomey's near
miss challenge to Arlen Specter in the Penn primary was a good example
of this process. Analagously the very conservative Democrats in places
like Texas are being replaced by Republicans -- a strong tendency in
the Senate too I believe.

Chris Caldwell of The Weekly Standard had an article series in The
Atlantic about the 'southern captivity' of the GOP. His argument 7
years ago looks prescient and completely wrong at the same time. Yes
the GOP is increasingly the party of the south, but rather than being
the weakness he identifies it has been turned, via Karl Rove's
electoral magic, into a strength not a weakness, giving them a lock on
2 (and soon 3) pillars of government.



The area that imight be up for grabs is the mountain states, where
environmental issues, a traditional Democrat strength, have resonance,
religious issues are less powerful and a migration of affluent
coast-dwellers is making the political mix less stridently
libertarian-conservative. So you see John McCain, a Republican but by
no means a doctrinaire conservative, and ? Ken Salazaar? beating his
opponent in Colorado during a Bush landslide electorally. But these
states are not, electorally, enough to tip the increasingly decisive
Republican advantage in the south and the more socially conservative
parts of the midwest like Ohio and Missouri and West Virginia.

Re: Lifestyle funds (Vanguard) vs. individual funds

Herb <> wrote:

> When I was a kid we had Southern conservatives among the Democrats and the
> Republican party had a liberal wing (we had a black, Republican senator here
> in Massachusetts). Lately, it seems, that the Republicans have purged the
> liberals and the Democrat have alienated the conservatives.

I know what you mean. Growing up in Louisiana we voted for the least
corrupt politician, and trust me, we had a lot of crooks running
that state :) I was talking to my Dad about how divided things are
nowadays and he told me "I honestly don't remember if I was voting
for a democrat or republican back then...I was just following my
conscience."

I'm down the middle. I tend to vote Republican for mayor, governor
etc...but have voted Democrat at the presidential level also.

Re: Lifestyle funds (Vanguard) vs. individual funds

darkness39 <> wrote:

> However if you went to Vermont or Oregon or other famously liberal
> places you would find people who advocate the 'Canadian cocktail'.

Ok, I've never been there but I'm taking your word for it :)

> - on another axis 'attitude to control by the state over the economy' -
> libertarians tend to score very low on this so do many Wall Street
> conservatives (support of free trade, opposed to regulation and
> taxation, opposition to single payer forms of healthcare). Liberals

Hypocrisy all around. It's all Keynesiam with either party. Supply-side
doesn't negate that. As long as the GOP stands by the Central Bank
and lets Greenspan handle the economy it's centrally planned/managed.

Perhaps this is a very simplistic approach to the matter but both parties
are very pro-state.

> So it is not clear what 'conservative' and 'liberal' means in some of
> these contexts-- certainly it doesn't align perfectly with 'Republican'
> and 'Democrat'. By and large though you can say the 'conservative'
> Republicans are *against* state intervention in the economy (but not
> farm subsidies ;-) and *for* state intervention in the private lives of
> individuals and the 'liberal' Democrats are the reverse.

I agree 100%.

> not in Oregon and California ;-). I said 'medical' marijuana.

True, but if you legalize that and let what they define to be a medical
professional sell it, anyone and everyone who wants it gets it. Wait,
anyone who wants it gets it now.

> support the death penalty. Most would support a healthcare system like
> that of France, if not that of Canada.

Yeah, I think they would but know it's not supportable. We've tried to
do universal healthcare with Truman, FDR & Clinton and each time it
was a flameout.

> Party Platforms are tricky and not necessarily representative: the
> Texas Republican one calls for a return to the Gold Standard ;-). It
> also more or less seems to call for a theocracy.

Ron Paul from Texas? I'm not an economist so I can't say squat about the
gold standard but my gut tells me that Greenspan isn't doing everything
right. I've read a lot of classic conservative texts before and it's
always refreshing to see a repulican stay true to form and ideology.

I still stand by what I was saying earlier in this thread, we're in a bull
market but the fundamentals are horrible.

> Agreed. This I think has a lot to do with the degree to which religion
> is still influential in American life whereas by and large in Western
> Europe and Canada it is not.

I read an interesting article on this. Apparently as people obtain more
affluence they lose interest in religion and have fewer and fewer kids.
Hence the secularism of Europe & the more affluent blue states in the
US.

So basically, if the red states were more prosperous they'd end up
becoming more secular. Then we'd all be Canadians.

Re: Lifestyle funds (Vanguard) vs. individual funds

"Mike Stone" <> wrote in message
news:TL8Ie.48505$
> Herb <> wrote:
>
> > When I was a kid we had Southern conservatives among the Democrats and
the
> > Republican party had a liberal wing (we had a black, Republican senator
here
> > in Massachusetts). Lately, it seems, that the Republicans have purged
the
> > liberals and the Democrat have alienated the conservatives.
>
> I know what you mean. Growing up in Louisiana we voted for the least
> corrupt politician, and trust me, we had a lot of crooks running
> that state :) I was talking to my Dad about how divided things are
> nowadays and he told me "I honestly don't remember if I was voting
> for a democrat or republican back then...I was just following my
> conscience."
>
> I'm down the middle. I tend to vote Republican for mayor, governor
> etc...but have voted Democrat at the presidential level also.

I'm quite sure your Dad was voting for Democrats if it was in Lousiana
before 1964. The South hadn't voted for a Republican since Reconstruction.
Then came Civil Rights...

When one party dominates like that, it begins to look like a multi-party
state with the primary being the real election.

-herb
>
>

Re: Lifestyle funds (Vanguard) vs. individual funds

"Herb" <> wrote

> I'm quite sure your Dad was voting for Democrats if it was in Lousiana
> before 1964.

Hmmm...no Republicans in Louisiana before 1964. Amazing. I wonder if Herb
knows how my Dad voted before 1964. I bet he's 'quite sure' he does.

> The South hadn't voted for a Republican since Reconstruction.

I'm quite sure that was before 1964. I bet Mike's dad wasn't even born yet.
He didn't vote for any democrats then.

Re: Lifestyle funds (Vanguard) vs. individual funds

i plan on doing a lifestyle fund with some family. i do it with my gov't
plan. i see it this way:

the plan balances my portfolio (or the part i put in it) for me. I have
nothing to worry aobut. i guess it is a risk issue. i'm letting the
experts run it for me. of course, it would have been nice if all of my iras
were roth iras and not traditional! but, i digress. sure, i might do
better on my own, but this way, I have the time invested in researching it
out of the equation. i'm looking at trowe price's funds too.

<> wrote in message
news:
>A question about lifestyle funds, Vanguard in particular.
>
> My wife and I are both in our early 30s and originally opened Roth IRAs
> in our mid-20s. We knew nothing at all about investing at that time
> and a friend of the family (a broker) helped us open the Roths.
> Unfortunately, they were Putnam funds that we eventually realized were
> too expensive and not very well suited for us. So we took a bath on
> those. Lesson learned.
>
> So we rolled them over to Vanguard a few years back (into the 500
> Index/Inv fund) and have continued to contribute since then. I also
> rolled a 401K from a previous employer to Vanguard and to the 500
> Index/Inv. So we've each got a Roth worth about $6500 and I've got
> a rollover IRA worth about $6700.
>
> We're going to fully fund each Roth this year and before I do that I
> want to investigate whether continuing with the 500 Index/Inv is a good
> idea. I've been reading many of the previous discussions of
> lifestyle funds and the prevailing thought seems to be that they're
> OK, but it's better to buy individual funds and get the right mix
> that way.
>
> In our case, if we did it that way, we could get 3 index funds (meeting
> the $3K minimum for each) in each Roth, but we'd be paying a
> maintenance fee for each of them too since the balance wouldn't be
> high enough.
>
> I've read a lot of posts from people who see balancing your portfolio
> as being as easy as lacing up your shoes in the morning. I wish I
> could say it's that easy for us, between the Vanguard holdings and
> our 401Ks at work-- it just doesn't come easy for me, as hard as I
> study it. The Vanguard lifestyle funds (Target Retirement 2045, for
> us) seem a lot easier in comparison, and seem like they'd give us a
> better mix, compared to what we're doing now. Would appreciate any
> thoughts.
>
>
>