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Re: The Whole Ball Game Of Equity Investing As I See It

Considering that tilting means to concentrate more in small cap than is present in the cap weighted total market, I think starting with TSM and some indeterminate fraction to TISM is sufficient for most any investor. I think doing otherwise is fine for any investor that learns enough about how all ...
by Call_Me_Op
Fri Nov 28, 2014 11:09 am
 
Forum: Investing - Theory, News & General
Topic: The Whole Ball Game Of Equity Investing As I See It
Replies: 13
Views: 1243

Re: non US bonds - a new asset class?

stlutz wrote:
Is this an asset class which should be included.


They offer higher risk and lower yield than comparable US bonds. So, I say no.


Some may see this as analyzing an asset class in isolation.
by Call_Me_Op
Thu Nov 27, 2014 8:09 am
 
Forum: Investing - Help with Personal Investments
Topic: non US bonds - a new asset class?
Replies: 11
Views: 818

Re: Critique my investment security plan

Can you hypothesize on a specific scenario that you fear? You are proposing going-through a lot of trouble, so you must have an idea of exactly what you are trying to avoid.
by Call_Me_Op
Thu Nov 27, 2014 8:06 am
 
Forum: Investing - Theory, News & General
Topic: Critique my investment security plan
Replies: 9
Views: 667

Re: Is there anything unhealthy about drinking tap water?

tc101 wrote:Is there anything unhealthy about drinking tap water? Is there any health benefit to drinking filtered water or spring water?


Depends of course on impurities picked-up in your plumbing, the most notorious being lead.
by Call_Me_Op
Wed Nov 26, 2014 2:21 pm
 
Forum: Personal Consumer Issues
Topic: Is there anything unhealthy about drinking tap water?
Replies: 17
Views: 1163

Re: "Two Key Lessons You Can Learn From Academic Research"

This is why I am slowly becoming less of a believer in factor investing, because if it truly is a risk-story which explains higher factor returns, I'm not sure I wouldn't be better of just reducing my bond allocation and adding more to an all-world stock index fund. Factor investing theoretically a...
by Call_Me_Op
Wed Nov 26, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: "Two Key Lessons You Can Learn From Academic Research"
Replies: 10
Views: 1579

Re: Why it's important to understand risks and have discipli

Larry,

Those of us who invest according to world market cap are being tested (in this way) right now. I plan to stay the course. The biggest mistake would be to notice the recent out-performance of US markets and abandon the world-cap strategy.
by Call_Me_Op
Wed Nov 26, 2014 11:36 am
 
Forum: Investing - Theory, News & General
Topic: Why it's important to understand risks and have discipline
Replies: 11
Views: 1267

Re: Where to invest end of year bonus

joe1206 wrote:It's law firm bonus season and I am expecting $40k in a couple of weeks (pre-tax). Where would you dump this money?


What does your IPS say you should do with new money?
by Call_Me_Op
Wed Nov 26, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: Where to invest end of year bonus
Replies: 16
Views: 1384

Re: TIM HORTON AND BURGER KING MERGER

This is the wrong site to get responses related to speculating in individual stocks. Most here think it is a bad idea.
by Call_Me_Op
Tue Nov 25, 2014 1:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tim Horton shareholder - what to do about Burger King Merger
Replies: 11
Views: 1496

Re: Strategically not paying medical bills for 90 days for a

Must do wonders for one's credit score.
by Call_Me_Op
Tue Nov 25, 2014 12:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Strategically not paying medical bills for 90 days for a dis
Replies: 30
Views: 2890

Re: Been out of market since 2008 and can't get back in

If I were in your shoes, I would first choose an asset allocation with no greater than 50% in stocks. The remainder would be put into short and intermediate high-quality (AA or higher) bond funds, CD's, MM, or a combination. I would document the AA in an Investment Policy Statement. Then I would put...
by Call_Me_Op
Tue Nov 25, 2014 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Been out of market since 2008 and can't get back in
Replies: 52
Views: 4836

Re: why do individual investors buy overpriced stocks

Thanks for the article, Larry. Can this idea be extended to explain, at least in part, the value premium?
by Call_Me_Op
Tue Nov 25, 2014 9:31 am
 
Forum: Investing - Theory, News & General
Topic: why do individual investors buy overpriced stocks
Replies: 5
Views: 928

Re: Small cap value premium

This all gets back to the three risks of factor investing: 1) it's always more expensive to implement than beta only 2) there can be a long delay between implementation and benefit 3) prolonged negative tracking error often leads to capitulation at the wrong time The decision to impliment a factor ...
by Call_Me_Op
Mon Nov 24, 2014 8:15 am
 
Forum: Investing - Theory, News & General
Topic: Small cap value premium
Replies: 140
Views: 9268

Re: An alternative to alternative investments [QSPIX]

This fund uses leverage - which itself gives me pause (aside from the expenses and other risks). What is the maximum possible loss? Can the investor be liable for losses that exceed his/her initial investment?
by Call_Me_Op
Mon Nov 24, 2014 7:27 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 143
Views: 9417

Re: An alternative to alternative investments [QSPIX]

Biggest issue for us ordinary DIY Bogleheads is the $5 million minimum investment.
by Call_Me_Op
Sun Nov 23, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 143
Views: 9417

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

leonard wrote:If you want to take issue with something in his philosophy - go after the whole Merriman market timing methodology.


...which he uses for half of his assets but generally does not recommend for others.
by Call_Me_Op
Sun Nov 23, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

The essence of Paul's argument, as you know, is that Vanguard consistently recommends total market index alone and discourages folks from tilting. Paul believes that does clients a disservice, and he spoke-out about that. I suppose that he could have made his point without invoking DFA, although it ...
by Call_Me_Op
Sun Nov 23, 2014 9:39 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

I think he is disingenuous because I think his beliefs are going beyond the data into practically guaranteeing that value will out perform growth and small over large. This is where we disagree, and where I think you are misinterpreting Paul. He is not "practically guaranteeing" anything,...
by Call_Me_Op
Sun Nov 23, 2014 8:43 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

He is making a big deal about small cap and value and while he says that past performance blah, blah blah, he sure wants us to believe that value everything and small cap will practically guarantee you earn 2% more. I find that disingenuous. I do not. He is stating his beliefs and assumptions. Ther...
by Call_Me_Op
Sat Nov 22, 2014 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

I just had a chance to listen to this podcast. I really think people are beating-up on Paul Merriman unfairly. He stated his beliefs honestly - and clearly identified the basis of his beliefs - which is 83 years of historical stock-market performance. He also admitted that he cannot see into the fut...
by Call_Me_Op
Sat Nov 22, 2014 8:32 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: Small cap value premium

This question of whether small-cap value is or is not an asset class is a matter of definition - meaning you will never agree. Per Wikipedia, which is not necessarily authoritative on the subject, small-cap value would be considered an asset-class category.

http://en.wikipedia.org/wiki/Asset_classes
by Call_Me_Op
Sat Nov 22, 2014 8:24 am
 
Forum: Investing - Theory, News & General
Topic: Small cap value premium
Replies: 140
Views: 9268

Re: Small cap value premium

I don't think it is a huge leap to accept that small cap stocks (in aggregate) tend to be riskier than large cap stocks (in aggregate) because of the underlying risks associated with small businesses versus large established businesses. If one doesn't accept this as at least likely to be true, he o...
by Call_Me_Op
Fri Nov 21, 2014 10:33 am
 
Forum: Investing - Theory, News & General
Topic: Small cap value premium
Replies: 140
Views: 9268

Re: Why Alpha is getting more elusive

Nice article Larry. Do you think this same phenomenon (of improving competition) is likely to reduce factor premiums in the future?
by Call_Me_Op
Fri Nov 21, 2014 9:21 am
 
Forum: Investing - Theory, News & General
Topic: Why Alpha is getting more elusive
Replies: 28
Views: 3330

Re: Small cap value premium

It confounds me that people have trouble accepting that a segment of the market can persistently beat the market (over long time periods). If we accept that some segments are riskier than the market as a whole, and if we accept that risk and expected return are inextricably linked, then it follows ...
by Call_Me_Op
Fri Nov 21, 2014 8:45 am
 
Forum: Investing - Theory, News & General
Topic: Small cap value premium
Replies: 140
Views: 9268

Re: Ray Dalio's All-Weather Portfolio

The problem with all of these portfolios is they have a lot of government bonds - which experienced a huge run-up over the past 35 years.
by Call_Me_Op
Fri Nov 21, 2014 8:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Ray Dalio's All-Weather Portfolio
Replies: 14
Views: 2462

Re: getting umbrella insurance

They will generally want to know your occupation. Some occupations are more likely to get sued than others. I wonder if Doctors might be one of those occupations. Doctors should have malpractice insurance to cover any medical related suits. anecdotally doctors actually get sued for other activities...
by Call_Me_Op
Fri Nov 21, 2014 8:22 am
 
Forum: Personal Finance (Not Investing)
Topic: getting umbrella insurance
Replies: 25
Views: 1496

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

JoMoney wrote:I find it interesting that being called a fan of DFA is considered derogatory. :D


I guess it is so among the do-it-yourself crowd.
by Call_Me_Op
Fri Nov 21, 2014 8:08 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: Small cap value premium

It confounds me that people have trouble accepting that a segment of the market can persistently beat the market in aggregate (over long time periods). If we accept that some segments are riskier than the market as a whole, and if we accept that risk and expected return are inextricably linked (alth...
by Call_Me_Op
Fri Nov 21, 2014 8:04 am
 
Forum: Investing - Theory, News & General
Topic: Small cap value premium
Replies: 140
Views: 9268

Re: Capitalization weighted or Asset weighted?

One purported minus of index funds is that since they are capitalization-weighted, they buy more of the stocks that are popular and have gone up a lot in value. In that sense, they chase winners. This does seem to be a form of running with the crowd. CAll_Me_Op: Running with the crowd or not, capit...
by Call_Me_Op
Thu Nov 20, 2014 10:18 am
 
Forum: Investing - Theory, News & General
Topic: Why I Like Index Funds
Replies: 26
Views: 3928

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

Merriman admits that his views have changed over time - as he has gained more investing experience. I believe he used to be more of a market timer. He freely admits that his approach is based upon past relative performance of asset classes. I don't see him hiding anything or having any ulterior moti...
by Call_Me_Op
Thu Nov 20, 2014 9:40 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

FWIW, I come down firmly on the side of the do-it-yourselfers. I listen to Merriman's podcasts, but when he (or anyone) starts talking about DFA funds, that's when I fast-forward. Whether or not there is a DFA + advisor advantage over Vanguard + DIY, I would always go with DIY at rock-bottom cost.
by Call_Me_Op
Thu Nov 20, 2014 8:45 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

...if I have historical evidence on one hand and my crystal ball on the other, I will let history be my guide. Does that historical guide ignore the past decade where TSM outperformed DFA's Small-Cap Value, and did so with lower standard deviation and no adviser fees? http://i58.tinypic.com/otoh3d....
by Call_Me_Op
Thu Nov 20, 2014 7:48 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

I think people are misunderstanding where Paul Merriman is coming from. He simply believes (because it is true) that a total market index fund concentrates you in US large-cap growth stocks. He is not against these, but is swayed by the historical evidence that other asset classes (as he calls them ...
by Call_Me_Op
Thu Nov 20, 2014 6:59 am
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: 10 Reasons why Merriman dislikes Total Stock Mkt

Remember, Jack set up Vanguard with the investors as the owners. And he freely advises investors to own the market and hold forever vs trying to outsmart the market, as with DFA and tilting. And, following Jack's advice vs a DFA advisor's (which Paul recommended at the end of his broadcast), there ...
by Call_Me_Op
Wed Nov 19, 2014 6:28 pm
 
Forum: Investing - Theory, News & General
Topic: 10 Reasons why Merriman dislikes Total Stock Mkt
Replies: 88
Views: 8234

Re: Diversification among Bonds?

ogd,

Well said - as usual.
by Call_Me_Op
Wed Nov 19, 2014 1:53 pm
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 32
Views: 2886

Re: Diversification among Bonds?

nspayne17,

Are you confused yet?
by Call_Me_Op
Wed Nov 19, 2014 7:38 am
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 32
Views: 2886

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

But the 7% (or so) will have a huge speculative component - so may be 30% next year, etc.
by Call_Me_Op
Tue Nov 18, 2014 10:33 am
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 6073

Re: Why I Like Index Funds

One purported minus of index funds is that since they are capitalization-weighted, they buy more of the stocks that are popular and have gone up a lot in value. In that sense, they chase winners. This does seem to be a form of running with the crowd.
by Call_Me_Op
Mon Nov 17, 2014 5:56 pm
 
Forum: Investing - Theory, News & General
Topic: Why I Like Index Funds
Replies: 26
Views: 3928

Re: How Not to Retire

Seems to me that his biggest mistake was letting someone else handle his money.
by Call_Me_Op
Mon Nov 17, 2014 9:11 am
 
Forum: Personal Finance (Not Investing)
Topic: How Not to Retire
Replies: 67
Views: 6921

Re: Joel Greenblatt: Market Cap weighted indexes not recomme

I saw the interview on Consuelo Mack yesterday. He seems like a smart guy, but nothing he said should be new to you if you follow this forum. As Larry points-out, this can all be explained in terms of factor loading.
by Call_Me_Op
Sun Nov 16, 2014 8:23 am
 
Forum: Investing - Theory, News & General
Topic: Joel Greenblatt: Market Cap weighted indexes not recommended
Replies: 15
Views: 2367

Re: Should I have even $1 in Bonds?

If your IPS calls for your AA to be 100% stocks, then avoid bonds, correct... IPS for Post-SS portfolio is 70/30 but I am considering changing it to 100/0 and was querying to find out if I was overlooking something. If you feel you really need to do something, why not 85/15? You will be thankful if...
by Call_Me_Op
Sun Nov 16, 2014 8:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I have even $1 in Bonds?
Replies: 34
Views: 4055

Re: Vanguard Brokerage or Mutual Funds?

Op, what are you worrying about? I just gave them permission and they did it. I don't see a downside, and I do use their brokerage to buy CD's.
by Call_Me_Op
Sun Nov 16, 2014 8:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Brokerage or Mutual Funds?
Replies: 16
Views: 940

Re: Can active funds reliably beat the index? Actually, Yes

Just quick thought It isn't whether a fund beats a benchmark index but whether or not it's generating alpha. It's easy to beat an index, just overweight factors with premiums. And can also screen out the jackpot stocks which indices can own, especially small and small growth indices. Larry I think ...
by Call_Me_Op
Sat Nov 15, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: Can active funds reliably beat the index? Actually, Yes.
Replies: 38
Views: 4942

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

Remember that treasuries are not risk-free. Longer-term treasuries carry duration risk. Short-term treasuries are considered risk-free, but can of course still lag behind inflation. So when people talk about taking risk on the equity side, they usually man keeping your bonds both short and high qua...
by Call_Me_Op
Sat Nov 15, 2014 8:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3731

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

Remember that treasuries are not risk-free. Longer-term treasuries carry duration risk. Short-term treasuries are considered risk-free, but can of course still lag behind inflation. So when people talk about taking risk on the equity side, they usually man keeping your bonds both short and high qual...
by Call_Me_Op
Fri Nov 14, 2014 8:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3731

Re: How Do You Use the VIX (Fear & Greed Index)?

How do you use the VIX (Fear & Greed Index) in order to make or influence your personal investment decisions? I monitor the index closely on an hourly basis - sometime skipping meals in order to track it closely. When it exceeds a pre-defined threshold, I yank all of my money out of stocks and ...
by Call_Me_Op
Thu Nov 13, 2014 10:04 am
 
Forum: Investing - Theory, News & General
Topic: How Do You Use the VIX (Fear & Greed Index)?
Replies: 15
Views: 1137

Re: Bogleheads get to hedge fund guy

Clearly written by someone highly frustrated.

I love these arguments that stock index funds are bad because they go down when the broad market goes down.
by Call_Me_Op
Thu Nov 13, 2014 7:31 am
 
Forum: Investing - Theory, News & General
Topic: Bogleheads get to hedge fund guy
Replies: 28
Views: 4463

Re: Mr Bogle - 20x p/e warning

"Using the S&P 500, 20 times estimated future operating earnings," Bogle said. "That's a good warning sign." http://finance.yahoo.com/news/vanguard-founder-jack-bogles-market-225615191.html;_ylt=AwrSyCOLdGFUz1cAN3.TmYlQ Sounds like timing to me. No, it's not timing, it's sim...
by Call_Me_Op
Tue Nov 11, 2014 7:46 am
 
Forum: Investing - Theory, News & General
Topic: Mr Bogle - 20x p/e warning
Replies: 22
Views: 3252

Re: astonishing performance of US markets vs others

When I compared veu or vwo vs spy over the past 5 years I was surprised to see how much better US markets (eg spy) have done. Have been painfully re-balancing by selling spy and buying more international markets. Would like to hear others viewpoint on whether such out-performance has happened in th...
by Call_Me_Op
Tue Nov 11, 2014 7:36 am
 
Forum: Investing - Theory, News & General
Topic: astonishing performance of US markets vs others
Replies: 50
Views: 5066

Re: Advice please [Received large commission check]

You should have an Investment Policy Statement written that defines how to invest new cash.
by Call_Me_Op
Sat Nov 08, 2014 10:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please [Received large commission check]
Replies: 20
Views: 1976

Re: What if I Never Buy a House?

I like knowing my house is mine and I can pretty much have it just the way I want it. There's a degree of control that comes with owning a house that one doesn't have in an apartment. I have never looked on buying a house as an investment. That's how I see it. The privacy and control are priceless....
by Call_Me_Op
Sat Nov 08, 2014 7:25 am
 
Forum: Personal Finance (Not Investing)
Topic: What if I Never Buy a House?
Replies: 57
Views: 7020
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