misc.invest.financial-plan Google Group

Re: Help a dunce with real estate

chip.a.w...@gmail.com (Chip) — Thu, 29 Jul 2010 22:06:59 UT

Those last 5 are very major parts of any house (except brand new)
maintenance budget, should have them included. Probably closer to 6-7%.
I didn't do the numbers because if I don't think about the repairs, they
will fix themselves or I will learn to live with them.
Chip

Re: Help a dunce with real estate

p...@classtech.com (Douglas Johnson) — Thu, 29 Jul 2010 21:22:00 UT

Some of those numbers impressed me as well. $200K for kitchen and bath remodel?
Just what are they doing? On the other hand, there are two ways to screw up
here. If you live with too much wear and tear or let kitchens and bathrooms get
too out of date, you seriously damage the value of your home.

Re: Black Swan Insurance?

dumbst...@gmail.com (dumbstruck) — Thu, 29 Jul 2010 21:08:26 UT

Understanding at a functional level is important, but it seems fair to
insulate yourself from knowing the gory details with packaged
products. Furthermore, if widely marketed products appear from
reputable companies, it seems fair to introduce yourself to their
offering in a naive, top down manner at first, because you are

Re: long term using index etfs or learn fundamental analysis

breadwiths...@fractious.net — Thu, 29 Jul 2010 18:56:36 UT

Which ones? And what kinds of strategies and asset allocations are
you talking about?
There's a difference between "dump all my money into an S&P500 (or
similar large-cap equity) fund" and "build a diversified portfolio
covering different asset classes to match my risk tolerance and time
horizon, reblance as necessary". Both are strategies which could be

Re: IRA that allows individual stocks

spam+lisp_dot_li...@gmail.com (Antony) — Thu, 29 Jul 2010 11:20:48 UT

Thanks for all the replies.
Procrastinating... :)
-Antony

Re: Black Swan Insurance?

george...@hotmail.com (dapperdobbs) — Thu, 29 Jul 2010 04:41:46 UT

Just in case, I'm not making light of your inquiries. Understanding
your investments is a basic principle. When one tries to hedge a thin
tail without understanding how, look at the fat tail one is exposing
oneself to. It's self-defeating. IMO, hedging gets to the point of
betting all the numbers on a roulette wheel, to be sure you "can't

Re: Help a dunce with real estate

george...@hotmail.com (dapperdobbs) — Thu, 29 Jul 2010 02:55:47 UT

On Jul 28, 8:08 am, "HW \"Skip\" Weldon"
I'm going with a 2.5% annual on average, but will try to make system-
specific estimates so I can get a schedule. I didn't buy too much
house. Instinctively, I got no more than what I needed and wanted, so
I'm not sinking, but it is disconcerting to see that dressing it up

Re: Black Swan Insurance?

george...@hotmail.com (dapperdobbs) — Thu, 29 Jul 2010 02:35:53 UT

Yes.

Re: Black Swan Insurance?

dumbst...@gmail.com (dumbstruck) — Thu, 29 Jul 2010 00:45:53 UT

By the way, this topic applies to stock fund insurance, not bond.
I find the terminology of options so confusing that I was hoping that
a fund could prepackage sort of a blackbox version of it that
implements "options for dummies". But I guess you're saying there is
no obvious killer strategy that you could expect the fund to

Re: Black Swan Insurance?

george...@hotmail.com (dapperdobbs) — Wed, 28 Jul 2010 23:58:50 UT

The basic principles = simple puts and calls on equities. All of this
is explained in detail with examples in any good options book.
Hedges cost money.The 'tail risk' is simply a fancy way of saying 'low
probability;" it will not limit your upside any more than buying a put
will, unless the cost of the put is paid by selling a covered call,

Re: Black Swan Insurance?

ichu...@algebra.com (Igor Chudov) — Wed, 28 Jul 2010 23:01:55 UT

Dumbstruck
I am assuming that you would be buying insurance on Pimco bond funds.
Paying a very small fraction of your portfolio in order to sleep
better, seems like a good idea on the surface. However, one question
lingers in my mind: if a catastrophe struck so that very safe bonds,
that you are insuring, plunge in value to such extreme extent, from

Re: Black Swan Insurance?

dumbst...@gmail.com (dumbstruck) — Wed, 28 Jul 2010 21:33:27 UT

I wonder if the tail risk hedge will make you limited on the upside as
well as the downside. I'm not so concerned with Pimco's particular
implementation, but in what new opportunities are being provided to
retail investors. Several articles suggest a wave of offerings are
imminent, like [link]

Re: Help a dunce with real estate

skip5700removet...@yahoo.com (HW Skip Weldon) — Wed, 28 Jul 2010 12:08:41 UT

On Sun, 25 Jul 2010 22:04:52 -0500, JoeTaxpayer
At the outset (see above) this thread was focused on the financial
planning aspects of home ownership. Lately it has focused on home
maintenance details.
In an attempt to swing the comments back to financial planning, I will
restate something I have maintained for years.

Re: Help a dunce with real estate

pleasenos...@microsoft.com (Wallace) — Wed, 28 Jul 2010 09:15:21 UT

the one you buy.

Re: Help a dunce with real estate

george...@hotmail.com (dapperdobbs) — Wed, 28 Jul 2010 00:59:40 UT

Appliances are not designed to last as long, these days. It's hard to
'talk house' without specifics, so I'll do one. A girlfriend in L.A.
once saw a chambers gas stove in a second-hand shop, cheap. She wanted
it, though it weighed like 400 lbs. (iron, chrome). It was built in
the 1930's and had safety valves so children couldn't activate the