Archives for August 2023

Get new articles by email:

Oblivious Investor offers a free newsletter providing tips on low-maintenance investing, tax planning, and retirement planning.

Join over 24,000 email subscribers:

Articles are published every Monday. You can unsubscribe at any time.

Investing Blog Roundup: Two Announcements

I have two announcements for today.

First: a new edition of my book Can I Retire is now available (print version here, Kindle version here).

As far as what’s new, it’s all the usual updates (inflation adjustments, tax changes, etc.). In addition:

  • The discussion of tax-efficient spending from a retirement portfolio has been updated.
  • There’s no longer a chapter specifically dedicated to lifetime annuities. (With no inflation-adjusted versions available anymore, I have a hard time actually recommending them.)
  • There’s a chapter (recently excerpted as an article here on the blog) about the funded ratio concept.

I hope that you find the book helpful!

Second: at this year’s Bogleheads conference (details here), I’ll be giving a breakfast session that is specifically intended for the less-involved spouse/partner in a couple (i.e., the one who is not primarily in charge of managing the household finances). Conference registration won’t be required to attend this session.

We’re hosting this session, because we know there are lots of Bogleheads couples where one partner attends the conference and the other partner comes on the trip to do assorted tourist activities. The idea here is that this less-interested partner could pop in for this one breakfast session at no additional charge and get some useful information and a (less committing, less intimidating) introduction to Bogleheads. I hope you can join us.

Other Recommended Reading

Thanks for reading!

August 28, 2023

The Cake/Fruit Salad Theory of Asset Allocation

When you make a cake, you start out with a bunch of dry powdery white stuff (flour, sugar, baking powder, salt), some eggs, and some butter. And when you’re finished, the final product doesn’t look anything like those ingredients with which you began. It’s magic. The whole is greater than the sum of its parts.

And if you mess it up even a little bit (e.g., you leave out a teaspoon of baking powder) it can be a disaster.

Many people in the investment industry will tell you that asset allocation is like baking a cake. If you get it just right, in precisely this way (and definitely not that way), you’ll have something magical.

Some people become well known by promoting their own recipe (which does of course look amazing in the backtests).

But 5, 10, or 15 years later, what you’ll typically see is that the recipe turned out not to be magic. If the person is still in the industry, they’re now promoting a different recipe. The magic ingredient that five years ago was apparently the key is now, for some reason, not included in the portfolio. The magic ingredient/asset class is now just quietly left out (in favor of something else) because it’s no longer helpful in the backtests.

The thing to understand is that asset allocation is not like baking a cake.

Asset allocation is like making a fruit salad.

If you put in more blueberries, nothing magical happens, nor is there any disaster. Your fruit salad just has more blueberries. We can’t even say whether that’s necessarily a good thing or a bad thing; it depends entirely on how you feel about blueberries.

If you add more risky stuff, okay, now your portfolio is a little riskier. If you add more safe stuff, okay, now your portfolio is a little safer. That’s it. There’s no magic (except in backtests).

And if you choose to have just 3-4 ingredients in your fruit salad instead of 7, that’s fine. It will still get the job done.

There’s no one single recipe that beats the others. There are plenty of functional recipes. And you don’t have to be super precise about it — a little more or less of something than you had intended is not a disaster.

August 21, 2023

Investing Blog Roundup: Using Fidelity as Checking/Savings

As regular readers here know, I’m a big fan of simplicity: fewer funds and fewer accounts, whenever it’s possible to do so without having to make some major tradeoff elsewhere.

Readers with a similar set of preferences may be interested in Harry Sit’s recent article, about how he uses Fidelity not only to fulfill his brokerage/retirement account needs but banking needs as well.

Other Recommended Reading

Thanks for reading!

August 7, 2023
Disclaimer: By using this site, you explicitly agree to its Terms of Use and agree not to hold Simple Subjects, LLC or any of its members liable in any way for damages arising from decisions you make based on the information made available on this site. The information on this site is for informational and entertainment purposes only and does not constitute financial advice.

Copyright 2026 Simple Subjects, LLC - All rights reserved. To be clear: This means that, aside from small quotations, the material on this site may not be republished elsewhere without my express permission. Terms of Use and Privacy Policy

My Social Security calculator: Open Social Security