If you're not profit taking on shares and piling into long bonds right now at these prices you're a coward
Young women say aestetic, they drop the th. This isn’t a conscious choice: if you ask them to pronounce it properly they struggle. They’ve lost the ability to use th properly. The mistake has even infected other words like anaesthetic and prosthetic. Not pathetic, yet.
This obviously comes from the word being used a lot on TikTok in women’s algos. Men don’t say it like this though, they can say it properly. Different pronunciation is normal between generations and ethnicities, but is this the first time drift has occurred between gender?
Posting for posterity: I have used this week's bond sell offs to rebalance from ~70;30 to ~50;50 and dived head first into long-term bonds. The morning news talking about market sell offs is a reliable buy signal.
I don't think asking people if they like things they've actually already had for 15, 20, 25 years is a useful selling point for making the case that the countryside needs to be paved with data centres and new energy generation.
This is what every new outer suburban development in Australia looks like and they’re still 90%+ detached houses. The only physical solution is politically impossible: requirement of proof of off available street parking when registering a car. Would outlaw half the cars.
A Republican candidate for the Massachusetts House shared this image on Facebook this weekend, apparently to oppose duplexes and ADUs.
Housing policy is already difficult to communicate in today’s sensationalized climate. Images perpetuating disinformation like this only serve to manufacture fear and make it harder to have honest conversations about real solutions to Massachusetts very real housing crisis.
“The Simpsons could afford this with one salary!” is a meme that totally ignores the story that they in fact could not afford it, Abe sold his house and paid the deposit for it and Homer promised he could live there with them - then he lied and stuck him in aged care.
The Simpsons debuted in 1987 and this is the type of house the shows creators thought a single-income family could afford.
According to an episode in Season 1, Homer made 25k a year(60k in 2026 dollars).
In 1987 that house would cost about 100k(which was the national average) with a mortgage of roughly $700/month(assuming 20% down and interest rates consistent with that time)
How about today? The same house would cost 450k with a mortgage of roughly $2,500/month.
This means that while Homer was spending ~30% of his income on his mortgage in 1987 he would need to spend closer to 50% of his income on his mortgage today.
And of course, this doesn't include other areas of inflation such as food, gas or etc.
All the culture war nonsense about the Odyssey will overshadow the biggest actual problem with the film; Nolan seemed incapable of keeping the camera still for more than 15 seconds at a time, there are far far too much camera cuts even in basic dialogue scenes. It's very jarring.
Me when I'm an independent (tm) classical liberal (tm) but I decide it's time to just start lying and making things up because I'm seething about being asked to pay more capital gains tax
I just watched the speech and she didn't do those things, this is dishonest framing. xitter.gq/business/status/206709…
I won't bother getting too worked up about Trump 'giving' $300 billion to Iran. The number's fake. Doesn't mean a thing. Any number that comes from a Trump announcement is always fake. Countries aren't investing 100s of billions in the US and the US isn't giving Iran money either
Intergenerational inequality doesn't exist in a vacuum; Intragenerational inequality becomes intergenerational equality over time. Wealthy seniors have wealthy kids & poor seniors have poor kids. Any reform to reduce general inequality improves intergenerational outcomes.
This graph is a useful tool to consider one of two things as being true. The poster is entirely lacking in any critical thinkings skills, or the poster is intentionally sharing useless misinfo for engagement or propaganda. In both instances it flags them as someone to ignore
Given Australia has run current account deficits for decades, any international assets these 20 million "sovereigns" own has been funded on net by Australians selling Australian assets to foreigners. Hardly sovereign, hardly important. Then there's the distributional aspect.
Every state of the union you see people turn off their brain and say nonsense like “wow .. he actually looked presidential. Proud to be American today”. Never has a population so easily convinced by someone in a suit jangling some keys and saying the right words existed.
By 2050 when most countries have all fully wound down DB in favour of DC, countries that went DC first in the late 20th century will be well on their way to reimplementing DB after accepting there are simply too many risks and complex decisions placed on HH sector through DC
I am always amazed that most people saving for retirement (or designing optimal Social Security systems) rarely take sequencing risk seriously. Simply put, sequencing risk is the risk associated with the order in which returns arrive over one’s lifetime.
Sequencing risk hits you twice: while you are working and accumulating wealth, and again while you are retired and drawing it down. Today, I will focus on the first part. The retirement phase warrants its own discussion, and I will address it in a subsequent post.
Let me walk you through an exercise I ran yesterday using actual historical U.S. stock market data from the past 80 years to illustrate how important sequencing risk is.
I took the annual total returns of the S&P 500 (including reinvested dividends) from 1945 to 2024. The source is the dataset maintained by Aswath Damodaran at NYU Stern, a standard reference for long-run U.S. equity returns. I then deflated each year’s nominal return by the CPI-U inflation rate published by the Bureau of Labor Statistics to obtain real total returns, i.e., returns in constant purchasing power.
Over this 80-year period, the S&P 500 delivered a geometric mean real total return of about 7.5% per year. That is an impressive number. But this average return masks a lot.
Imagine a worker who starts investing at age 22 and retires at age 68. That gives them 46 years of contributions. In their first year, they contribute $1. Each subsequent year, they increase their contribution by 1% (roughly keeping pace with real wage growth). Every dollar is invested in the S&P 500. They never touch the money until retirement. No panic selling, no market timing, no strategy switching (and no management fees!). Textbook investing and waiting.
I ran this exercise for every possible cohort for which the data allow. The first cohort starts investing in 1945 and retires in 1991. The second starts in 1946 and retires in 1992. And so on, all the way to the last cohort, which starts in 1978 and retires in 2024. This yields 34 cohorts, each investing for 46 years, making the same contributions and investing in the same index. The only difference among them is which 46-year slice of historical returns they happen to live through.
The most fortunate cohort, the one that started investing in 1954 and retired in 2000, had $607 on the day of retirement (remember, all in real terms), with a real annual return of 8.82%. The unluckiest cohort, the one that started in 1963 and retired in 2009, accumulated $210, with a real annual return of 4.83%. Same contributions. Same index. Same strategy. Same investment horizon. Yet the luckiest retiree ended up with 2.9 times more wealth than the unluckiest.
Why? The 1954 cohort had a spectacular final decade. The late 1990s delivered some of the best equity returns in American history, and those returns compounded on a large portfolio built over decades. They retired at the peak, at the end of 1999, before the dot-com crash. The 1963 cohort was not so fortunate. They spent their last working years running straight into the 2008 financial crisis. The S&P 500 lost over 36% in real terms in 2008 alone. That loss hit their portfolio when it was at its largest, right before retirement, with no time left to recover.
Clearly, sequencing risk is not about the average return. Both the 1954 and 1963 cohorts experienced roughly similar average returns over their 46-year periods. The difference is when the good and bad years occurred. For the 1954 cohort, the bad years came early (when the portfolio was small) and the good years came late (when the portfolio was large). For the 1963 cohort, the opposite was true.
In fact, sequencing risk is even worse because poor returns in the stock market are correlated with weak labor markets: you have a much higher probability of losing your job (or seeing your wage income fall) precisely when the market is doing poorly, preventing you from saving when prices are low and equities are most attractive. However, let me set that point aside today to simplify the exposition.
The standard response of the financial planning industry to sequencing risk is the so-called glide path. The idea is simple: when you are young, you hold mostly equities. As you age, you gradually shift toward bonds. By the time you are near retirement, most of your portfolio is in bonds. A common implementation is a linear rule: start with 90% in stocks at age 22 and reduce the equity share steadily until you reach 20% in stocks at age 68. This is roughly what target-date retirement funds do.
The logic is sound in principle. You reduce your exposure to equities precisely when a crash would hurt you most. If 2008 happens when you are 65 and 80% of your portfolio is in bonds, the equity crash barely affects you.
I applied this glide path strategy to the same 34 cohorts, using historical real returns on the S&P 500 for the equity portion and real returns on 10-year U.S. Treasury bonds (from Damodaran) for the bond portion. Each year, the portfolio is rebalanced to the glide path weights.
The glide path does what it is intended to do: it reduces dispersion. The gap between the best and worst cohorts narrows from 2.9x under pure equities ($607 vs. $210) to 1.6x under the glide path ($292 vs. $178), but so does the upside. The best equity cohort (1954–2000) earned a geometric mean real return of 8.82% per year. The best glide path cohort (1975–2021) earned 6.59%. That is a 2.2 percentage point gap. Over 46 years of compounding, a 2.2 percentage-point annual yield yields an enormous difference in terminal wealth: the best glide-path outcome ($292) is less than half the best equity outcome ($607).
In other words, the cost of this insurance is substantial. In fact, the median cohort ends up meaningfully poorer under the glide path than under 100% equities. You are not trimming a bit of upside. You are forgoing a substantial share of your expected wealth at retirement.
This should not be surprising. Over the long run, equities have outperformed bonds by a wide margin. The equity risk premium is one of the most robust facts in finance. Every year you shift a dollar from stocks to bonds, you accept a lower expected return. Do this for 25 years of your career (roughly the back half, when the glide path has you increasingly in bonds), and the cumulative cost from foregone compounding is very large.
But the part that makes me most uncomfortable with the standard glide path advice is that bonds are not safe. People hear “bonds” and think “safe.” They are not. Bonds carry two risks that are easy to forget when inflation is low and interest rates are stable.
The first is inflation risk. A conventional bond pays you a fixed nominal coupon (yes, there are TIPS and similar instruments, but they have their own problems, so let me skip them for today). If inflation rises above the market’s expectations when the bond was issued, the real value of those payments declines. The cohorts that retired through the 1970s learned this the hard way. In the data, the real return on 10-year Treasuries was negative in multiple years during the 1970s.
The second is interest rate risk. When interest rates rise, the market value of existing bonds declines. The longer the maturity of your bond, the larger the hit. In 2022, the Bloomberg U.S. Aggregate Bond Index declined by approximately 19% in real terms. If you were 65 and had just shifted most of your portfolio into bonds following the standard glide path advice, you would have lost nearly a fifth of your “safe” allocation in a single year.
And here is the real sting of 2022: equities fell, too. The S&P 500 lost about 24.5% in real terms that year. The glide path assumes bonds will be there to cushion you when stocks fall. In 2022, both fell together. The cushion was not there. This is not some once-in-a-century event. Stocks and bonds have moved in the same direction before: the 1940s, the 1970s, and in 2022. The negative correlation between stocks and bonds that many investors take for granted is a feature of the disinflationary period from roughly 1982 to 2020. It is not a law of nature.
Let me be clear: I am not saying the glide path is wrong. For many people, it is the right choice. If a 30% equity crash near retirement would force you to sell assets at the worst possible time to cover living expenses, the insurance is worth paying for.
However, you should know what you are paying. The glide path (or variations of it that I am skipping in the interest of space) is not free. It entails substantial costs in expected returns. Worse, the insurance itself can fail. Bonds can lose money in real terms for extended periods. Bonds can fall at the same time as equities. The glide path reduces sequencing risk. It does not eliminate it. It also introduces risks of its own.
The deeper lesson from this exercise is that a substantial part of your retirement outcome depends on when you are born. You can do everything right (save diligently from your first paycheck, invest consistently, stay the course through every crash, never panic sell) and still end up with vastly different results than someone who did the same thing a decade earlier or later. The 1963 cohort did nothing wrong. They just had the misfortune of turning 68 in 2009.
No allocation strategy eliminates this. Even under the glide path, the best cohort ends up with substantially more than the worst. Sequencing risk is, to a significant extent, a matter of luck.
Next time: what happens when sequencing risk hits you in retirement, when you are drawing down instead of building up. The math there is, if anything, even more unforgiving.
The Garden City movement and its consequences have not in fact been a disaster for the human race but was a predictable and inevitable pushback against things most people would prefer to avoid, that is, a lack quiet green areas within eye shot and walking distance of them.