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Dale Roberts  

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  • The Time Warren Buffett Got It Wrong [View article]
    The Canadian federal pension scheme is currently funded, and we are about to balance our federal budget as well.

    Dale
    Jun 11, 2014. 06:59 PM | 1 Like Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Thanks George I don't think the U.S. pension plan is even close to funded? ...
    According to the report, “Through the end of 2087, the combined funds [OASI and DI] have a present-value unfunded obligation of $9.6 trillion.” That is “$1.0 trillion more than the measured level of $8.6 trillion a year ago,” states the report, in reference to the data available for 2011.

    That $9.6 trillion shortfall equals approximately $83,894 per household based on the Census Bureau's latest estimate that there are 114,430,000 households in the country.
    Jun 11, 2014. 06:59 PM | 1 Like Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Thanks curreyr, yes that appears to be the system and it makes a lot of sense. From a standing start as per above demo, a 2-year cash posititon seems prudent. Retirement can have an active portfolio management aspect to it, though not all that complicated.

    Dale
    Jun 11, 2014. 06:55 PM | Likes Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Hi Nick, I don't think it would have been remarkably different. And there would be added price risk (if we're talking moving forward). It's likely prudent to still manage bond risk with a bond ladder or keeping it to the shorter end on a bond fund for majority. I would (and will) add some high yield as well to the mix, in addition to some Treasuries for some more direct inverse relationship potential.
    Jun 11, 2014. 06:53 PM | Likes Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Thanks Varan and all, will go have a look at that mix in more detail. Rising rates (if not too violent in regards to price hurt) can and would provide more welcome income for spending. I think most would welcome rising rates, I would like to see that.
    Jun 11, 2014. 05:41 PM | Likes Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Thanks. I would always suggest take on all the risk we can handle in the accumulation phase, and as Warren suggests "be greedy when others are fearful".

    Dale
    Jun 11, 2014. 05:36 PM | 1 Like Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Thanks Mike, though it does work most of the time, due to the fact that stocks are the best performing asset class in most periods. But again, we need to protect against the outliers.

    Dale
    Jun 11, 2014. 05:35 PM | Likes Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    He is still the best though, we should always remember that. It's about getting it right so often, never mind the mistakes. We all make them.
    Jun 11, 2014. 05:09 PM | 2 Likes Like |Link to Comment
  • The Time Warren Buffett Got It Wrong [View article]
    Hi Paul, I used 10-year to approximate a reasonable bond return, and to see what happens with more of that traditional inverse relationship. The short term paper would have delivered stable returns without the big years (inverse) but no down years either.

    Point being, neither worked very well, short or long. Not enough bonds and cash involved.

    Dale
    Jun 11, 2014. 05:09 PM | 1 Like Like |Link to Comment
  • The Danger Of Buying The Next Dip [View article]
    All we can do is invest on a regular schedule and let the markets do their thing. But we should be aware that there may be no money to be made from here, for a while. If we are not investing on a regular schedule, we may then want to protect with bonds and cash, or create dry power out of thin air with mid to long term Treasuries. Anything can happen in the stock and bond market.

    Eric, hope all is well. Great article.

    Dale
    Jun 11, 2014. 04:21 PM | 3 Likes Like |Link to Comment
  • There's No Money To Be Made From Here, Maybe [View article]
    Hi Hobie, it would all come down to time horizon. If you are long term in the accumulation stage there is certainly nothing wrong with being 25% bonds, if you are reinvesting on a regular schedule. In fact, it's probably more prudent to be in your present camp. I hope one of the main takeaways from the article is that the money is to be made in the corrections, when the markets go on sale. It is still the stock markets that will deliver that greatest opportunity.

    If you need to manage risk (emotional component) then certainly add some more price protection by the way of bonds. Many advise keeping those bonds or bond ladders to the shorter end these days.

    Dale
    Jun 9, 2014. 05:56 AM | 1 Like Like |Link to Comment
  • 5 Tips For Managing Your Own Retirement Portfolio [View article]
    Bonds are an essential part of most portfolios, even in retirement, even with low rates. Moving through the last two market corrections, they were invaluable to retireees and would allow the portfolio to float a little higher (compared to equities) and then hence return to near a full value with a 4% drawdown.

    Article to follow soon on that.

    Asset Allocation is alive and well, even in retirement. Rates could stay low for a decade or more. But their main benefit is the (often) inverse relationship to equities.

    And as my recent article stated, even all equities will work in most conditions, but we need to protect against the 2 and 3 year equity market downturns. That's where the bonds and cash come in.

    Dale
    Jun 6, 2014. 10:22 AM | 7 Likes Like |Link to Comment
  • Warren Buffett Was Right About Retirement [View article]
    Yes, "if". Many of the big dividend stalwards were financials (and GE) and on and on. Most investors would likely have had some difficulties. Even Chuck C did an article stating his charts and tools suggested he move into financials leading into recession.

    It's a big if, and a big misconception on Seeking Alpha.

    Dale
    Jun 5, 2014. 11:36 AM | Likes Like |Link to Comment
  • Warren Buffett Was Right About Retirement [View article]
    Hi conkjc, re if one is generating a dividend stream to meet their living expenses and does not need to cut into their principal that makes the investor somewhat independent from the stock price actions.

    As we found out in 2007-2009, that is not the case. Price is everything when one has to sell and find new income. Either one holds and takes an income hit, or they sell and find new income with the funds available. Then how much one has, is very important.

    That said I am a fan of higher income in retirement, it's not as bullet proof as some are led to believe.
    Jun 5, 2014. 06:09 AM | 1 Like Like |Link to Comment
  • Warren Buffett Was Right About Retirement [View article]
    Thanks Vinnie I have found most government sponsored government employee plans in Canada to be pure fantasy. Taxpayers top up the funds on a regular basis with new monies when they become under funded. They are defined benefit adjusted to inflation, with the tax payer taking up the tab at any expense.

    Taxpayers fund about 66% of the pension plans.

    Not sure if the U.S. has the same experience.
    Jun 4, 2014. 06:24 AM | Likes Like |Link to Comment
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