Search found 1463 matches

by Clive
Thu Sep 03, 2015 7:15 pm
Forum: Investing - Theory, News & General
Topic: Understanding the link between earnings yield and future returns
Replies: 25
Views: 959

Re: Understanding the link between earnings yield and future returns

Suppose earnings yield is 10%, dividend yield is 4%, and dividend growth is 6%. By both measures, expected returns are 10%. Now suppose valuations double. Now EY=5%, DY=2%, and DG=6%. Now the earnings yield model predicts 5% while the dividend growth model predicts 8%. I'd expect dividend growth to...
by Clive
Thu Sep 03, 2015 4:18 pm
Forum: Investing - Theory, News & General
Topic: spending in retirement?
Replies: 41
Views: 4828

Re: spending in retirement?

I ran across the following article on retirement spending this morning via a link from Mike Piper's excellent blog: http://www.financialramblings.com/archives/spending-levels-in-retirement/ In it, the author summarizes BLS data suggesting that spending decreases rather substantially in retirement. ...
by Clive
Thu Sep 03, 2015 3:53 pm
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

If you invest in 30 individual stocks and tax manage (as I recommend), then your strategy will allow you to let the big winners run while cutting off the losses on the big losers. When you have a stock has loses, you will tax loss harvest by selling the stock. You will avoid the wash sale rule by i...
by Clive
Thu Sep 03, 2015 3:32 pm
Forum: Investing - Theory, News & General
Topic: Index Investing for the Future
Replies: 13
Views: 862

Re: Index Investing for the Future

A index of 10 stocks, 9 collectively flat-line perhaps even one or more going broke. A single stock, perhaps with a competitive lead in a new thing that was previously unknown grows at 16.2% annualised for 20 years, becomes a 20 bagger. For initial equal weightings buy and hold collectively the inde...
by Clive
Thu Sep 03, 2015 6:01 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

Ah! The lights clicked. Reducing the set down to 9 units and adding in the S&P sectors year to date, which has seen around a 4% decline in the S&P500 since the other two snapshots were formed and ... http://images.investorshub.advfn.com/images/uploads/2015/9/3/rhdkba.jpg Partition by the sor...
by Clive
Thu Sep 03, 2015 4:45 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

The message I got is that the two indexes show large correlation but that the S&P stocks have greater variation. And while you'd think that having 6 times more stocks would greatly reduce risk and volatility through diversification, that's not the case using actual data. The reduction, if any, ...
by Clive
Wed Sep 02, 2015 4:50 pm
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

I dont pay attention on the dow30 because only 30 stock but sp 500 is 500 stock more important But where to stop. 60,000 global stocks is more important than the S&P500. Or what about other global assets of which stocks account for only a third or so. If 500 stocks is a form of sampled set of t...
by Clive
Wed Sep 02, 2015 4:38 pm
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

Personally, I would not support the individual stock strategy if one doesn't aggressively tax manage the portfolio. Tax management is where the more significant benefits are. The UK taxation is markedly different to the US. As I understand it the US IRS have levelled dividend (income) and capital g...
by Clive
Wed Sep 02, 2015 12:56 pm
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

Clive - we already know how this movie ends. Look at Bridgeway Blue Chip 35 index fund - it is a low-cost passive fund that owns 35 of the very largest stocks in the US. The holdings looks to be pretty evenly weighted. The fund has been in existence for 18 years and its performance has basically ma...
by Clive
Wed Sep 02, 2015 6:33 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

i.e. allocate 12.5% to each of 8 units of : stocks, stocks, gold, long dated treasury, short dated treasury, short dated treasury, short dated treasury, short dated treasury. Whatever asset pops to the upside for the year (best) when excluded leaves a remainder 7 set that are like blends of Permane...
by Clive
Wed Sep 02, 2015 6:08 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

I'm still confused..........am I slow-------or just not understanding OP's post?? Think about if you had $1,000,000 to invest and you split that in half and bought $500,000 / 30 = $16,667 invested in each of the 30 Dow stocks using one half, and $500,000 / 500 = $1000 in each of the 500 S&P500 ...
by Clive
Wed Sep 02, 2015 5:54 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

Ignoring the other factors/figures and looking at just the distribution of gains as single 'units' (bars) which would you prefer, the one with the deeper left tail, taller right tail or the one with less extreme tails/'lower volatility'? I would prefer the extreme right blue one. Can you find me a ...
by Clive
Wed Sep 02, 2015 5:30 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

Re: S&P500 vs Dow30

All 30 Dow stocks are also in the S&P 500. Did you exclude the 30 Dow members from the orange bars? Is this with dividends reinvested? No the Dow stocks are also included, just took the two lists as is and year to date price changes, so doesn't include dividends. Just a exercise to see how a sn...
by Clive
Tue Sep 01, 2015 7:02 pm
Forum: Investing - Theory, News & General
Topic: Reblancing
Replies: 17
Views: 1112

Re: Reblancing

How many folks don't rebalance, but add more to the underfunded asset until it is back to your desired AA. What are the pros and cons of rebalancing this way, if there is any. If you initialise with 50/50 in two assets and over time that's shifted to being 60/40 then the neutral stance is to target...
by Clive
Tue Sep 01, 2015 4:07 pm
Forum: Investing - Theory, News & General
Topic: S&P500 vs Dow30
Replies: 32
Views: 1885

S&P500 vs Dow30

After downloading the year to date price changes for the S&P500 and the Dow Industrial Average I sorted both sets by price change descending and partitioned the 500 S&P stocks by taking the top 10 and bottom 10 out as separate 'units' leaving 30 sets of 16 stocks. Plotting/comparing you can ...
by Clive
Mon Aug 31, 2015 1:16 pm
Forum: Investing - Theory, News & General
Topic: Investing without past performance data
Replies: 27
Views: 1336

Re: Investing without past performance data

UHCOP wrote:PS. the site has been very slow for me lately

Ditto for the last day or so (from UK).
by Clive
Mon Aug 31, 2015 1:14 pm
Forum: Investing - Theory, News & General
Topic: Investing without past performance data
Replies: 27
Views: 1336

Re: Investing without past performance data

I tend to think of the stock market as a single entity. Cash in a deposit account broadly paces inflation (0% real). Own a home and the house price broadly rises with inflation and avoids having to pay rent for a roof over your head, inflation + imputed gross rent benefit. Own a woodland and the tre...
by Clive
Mon Aug 31, 2015 9:49 am
Forum: Investing - Theory, News & General
Topic: Buffett's most underrated advice?
Replies: 44
Views: 4090

Re: Buffett's most underrated advice?

Instead you should decide how much risk/reward you want, pick an appropriate allocation, and rebalance annually to that static allocation. If you change your allocation in response to "market conditions" you are market timing. Constant allocation and rebalancing to those target levels is ...
by Clive
Mon Aug 31, 2015 8:04 am
Forum: Investing - Theory, News & General
Topic: Buffett's most underrated advice?
Replies: 44
Views: 4090

Re: Buffett's most underrated advice?

So what you're describing is tactically moving from 90/10 to all-in 100% at the "right time". I am saying you can never truly know when the "right time" is. Look at Japan. If the Nikkei dropped from its peak and you went "all-in" hoping to "buy the dip" you w...
by Clive
Mon Aug 31, 2015 4:13 am
Forum: Investing - Theory, News & General
Topic: Buffett's most underrated advice?
Replies: 44
Views: 4090

Re: Buffett's most underrated advice?

But how do you know ex-ante if it's the right time to buy? A real investor may have bought on the 73 dip, and then lost more money in 74. The only market timing works is if you overfit your model to historical data. But that doesn't prove anything about the future Its not the size of the discount t...
by Clive
Sun Aug 30, 2015 6:45 pm
Forum: Investing - Theory, News & General
Topic: Buffett's most underrated advice?
Replies: 44
Views: 4090

Re: Buffett's most underrated advice?

--Not many talk about cash anyone, except to complain that it pays little to no interest.. The overhead of carrying 10% cash is relatively light https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&portfolio3=Custom&portfolio2=Custom&portfolio1=Custom&annualOperat...
by Clive
Sun Aug 30, 2015 6:17 pm
Forum: Investing - Theory, News & General
Topic: Buffett's most underrated advice?
Replies: 44
Views: 4090

Re: Buffett's most underrated advice?

--Not many talk about cash anyone, except to complain that it pays little to no interest.. The overhead of carrying 10% cash is relatively light https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&portfolio3=Custom&portfolio2=Custom&portfolio1=Custom&annualOperat...
by Clive
Sun Aug 30, 2015 11:54 am
Forum: Investing - Theory, News & General
Topic: 100% Equities?
Replies: 76
Views: 5025

Re: 100% Equities?

Run the sharpe ratios and see if you did better on a risk adjusted basis. Were you compensated adequately for taking on more risk in a 100% equities portfolio? For some reason, these sorts of discussion always use one-year standard deviation to measure risk and one-year sharp ratios to measure risk...
by Clive
Sun Aug 30, 2015 11:47 am
Forum: Investing - Theory, News & General
Topic: 100% Equities?
Replies: 76
Views: 5025

Re: 100% Equities?

Run the sharpe ratios and see if you did better on a risk adjusted basis. Were you compensated adequately for taking on more risk in a 100% equities portfolio? For some reason, these sorts of discussion always use one-year standard deviation to measure risk and one-year sharp ratios to measure risk...
by Clive
Sun Aug 30, 2015 11:28 am
Forum: Investing - Theory, News & General
Topic: 100% Equities?
Replies: 76
Views: 5025

Re: 100% Equities?

Does anyone here do $-based AA instead of %-based AA? I don't think basing your AA on how much of your lifetime's projected earnings you've banked so far is particularly useful. What if the money never shows up? I'd argue the relevant questions are: 1) What is my 'number'? i.e., multiply spending b...
by Clive
Sun Aug 30, 2015 7:18 am
Forum: Investing - Theory, News & General
Topic: If the Fed announces rate hike Sept 16-17, then . . . .
Replies: 13
Views: 1795

Re: If the Fed announces rate hike Sept 16-17, then . . . .

Use data from http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield to enter values into a calculator such as http://www.fixedincomeinvestor.co.uk/x/yieldcalc.html http://images.investorshub.advfn.com/images/uploads/2015/8/30/dryvga.png and you'll se...
by Clive
Sun Aug 30, 2015 5:25 am
Forum: Investing - Theory, News & General
Topic: 100% Equities?
Replies: 76
Views: 5025

Re: 100% Equities?

There is a very marginal difference between 80/20 and 100 % equities. If you are 20 and believed in age in bonds, you would go 80/20. Your returns would be a bit but not much smoother than 100 equities A newly retired who initialises with 50% in stocks, 50% in safe inflation pacing bonds and draws ...
by Clive
Fri Aug 28, 2015 7:18 pm
Forum: Investing - Theory, News & General
Topic: Net total return vs. gross total return - a fallacy?
Replies: 20
Views: 10650

Re: Net total return vs. gross total return - a fallacy?

As a UK investor, if I buy into Vanguard UK's S&P500 ETF then the factsheet indicates that it benchmarks to the SPTR500N index which is the total return less 30% standard US withholding tax. The fund is domiciled in Ireland which sees that withholding tax reduced to 15%. As the fund has a 0.07% ...
by Clive
Fri Aug 28, 2015 3:23 pm
Forum: Investing - Theory, News & General
Topic: Can the market go up forever?
Replies: 80
Views: 5566

Re: Can the market go up forever?

I consider myself to simply be the sum of my past experiences/memories. A duplicate would be a separate entity with the same memories up to the initial point of replication, different thereafter. I'd be quite happy to have the option however for such a replication rather than oblivion, as even thoug...
by Clive
Fri Aug 28, 2015 2:45 pm
Forum: Investing - Theory, News & General
Topic: So Is Now The Time To Buy?
Replies: 21
Views: 862

Re: So Is Now The Time To Buy?

Warrent Buffett's 10% in T-Bills (rest into stocks) is a good choice. If share prices are 30% lower a year later then relatively you're holding 63/10, perhaps with cash also having been expanded by a little interest and 2.7 dividends 63/12.8 perhaps (nearly 17% cash), that can be used to buy more sh...
by Clive
Fri Aug 28, 2015 2:21 pm
Forum: Investing - Theory, News & General
Topic: Can the market go up forever?
Replies: 80
Views: 5566

Re: Can the market go up forever?

I do have concerns about global growth (at least prior to space mining and the technological singularity ... and have to anticipate this century could be a very slow one for stock markets - after an unusually good one) I foresee longevity and biotech advancing at a every more faster/productive rate...
by Clive
Fri Aug 28, 2015 2:05 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 782
Views: 125749

Re: Should I use margin to buy a balanced fund?

2x QQQ, BRK-B, Gold, third weighting each yearly rebalanced since 2007 14.4% annualised versus 6.9% for the S&P500 (SPY) total returns. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&allocation4_2=100&allocation2_1=33.3&symbol4=SPY&symbol1=QLD&endYear=2015&sym...
by Clive
Fri Aug 28, 2015 1:54 pm
Forum: Investing - Theory, News & General
Topic: Cash is king over short-term bonds
Replies: 61
Views: 5552

Re: Cash is king over short-term bonds

If you maintain a 5 year ladder, rolling maturing into the best yield between 5 year treasury and 5 year CD, but always keep at least one of the rungs in a treasury bond, then a maturing CD and selling some of the treasury bond would cover the rebalance. i.e. only review/look to rebalance as and wh...
by Clive
Fri Aug 28, 2015 1:47 pm
Forum: Investing - Theory, News & General
Topic: Can the market go up forever?
Replies: 80
Views: 5566

Re: Can the market go up forever?

Stock indexes/prices tend to be driven by a small proportion of the whole. Imagine a simple index comprised of ten stocks and over twenty years two go broke, 8 achieve a 3% average annualised gain and increase each $1 invested to $1.80, one does pretty well and achieves twice the average i.e. 6% th...
by Clive
Fri Aug 28, 2015 1:25 pm
Forum: Investing - Theory, News & General
Topic: Can the market go up forever?
Replies: 80
Views: 5566

Re: Can the market go up forever?

Stock indexes/prices tend to be driven by a small proportion of the whole. Imagine a simple index comprised of ten stocks and over twenty years two go broke, 8 achieve a 3% average annualised gain and increase each $1 invested to $1.80, one does pretty well and achieves twice the average i.e. 6% tha...
by Clive
Fri Aug 28, 2015 12:19 pm
Forum: Investing - Theory, News & General
Topic: Cash is king over short-term bonds
Replies: 61
Views: 5552

Re: Cash is king over short-term bonds

One reason I do not use CDs nor have any cash is that I like to use my bond funds for rebalancing my asset allocation as needed. I would hate to have to break in a CD in order to buy some equity ETFs when those equity ETFs have dropped 10% to 30% anomalously on a Monday morning. That's an important...
by Clive
Fri Aug 28, 2015 8:14 am
Forum: Investing - Theory, News & General
Topic: Bogle: retirees should focus on dividends
Replies: 157
Views: 15591

Re: Bogle: retirees should focus on dividends

In an open ended equity mutual fund that pays dividends quarterly - the dividends the fund earns from the stocks it holds are accumulated as they are accrued when they are declared. All things being equal that increases the fund's NAV. When the funds dividends are paid out, all things being equal, ...
by Clive
Fri Aug 28, 2015 5:16 am
Forum: Investing - Theory, News & General
Topic: Bogle: retirees should focus on dividends
Replies: 157
Views: 15591

Re: Bogle: retirees should focus on dividends

So here's where I get confused. I thought that where dividends get declared, the price of the stock goes down. So if you cash out the dividends you are actually drawing down your portfolio, no? Isn't it virtually the same to withdraw from your portfolio? So cogently stated. I for one, and I'm certa...
by Clive
Thu Aug 27, 2015 12:08 pm
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

Where do they get 1.5% in annual costs for index funds when the amount Vanguard charges investors is 0.05%? I suspect that in 'quoting' Bogle's idea - from his late 1990's book, that the costs back then even for index funds were much higher than we've become accustomed to in more recent times. Mark...
by Clive
Thu Aug 27, 2015 11:23 am
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

At 2015 year start the FT250 had a 5.41% earnings yield (PE 18.2), more recently its earnings yield = 5.49% Year to date earnings have grown 5.6% Total return index is up 5.75% year to date Price index is up 4%. FT250 was paying a 2.6% dividend yield at the end of 2014, and is paying a 2.6% dividend...
by Clive
Thu Aug 27, 2015 10:01 am
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

Image

The S&P500 real total return has been volatile around its trend line. Subject to choice of start/end dates you could make it look either good or bad.
by Clive
Thu Aug 27, 2015 6:29 am
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

Individual Stocks Does it Ever Make Sense? The big difference between an individual stock and an index fund is that the individual stock can go up 10x in a relatively short period, like a few years. So if you want to double, triple, quadruple your money quickly, you can only do it with individual s...
by Clive
Thu Aug 27, 2015 4:06 am
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

The issues with regard to BRK-A as I see it are that 1) Buffett's Will for his wife specifically avoids BRK-A other than what the S&P500 index holds 2) tax risks - a mountain of deferred taxes that whilst he might be able to defend during his stewardship might become a issue following his demise...
by Clive
Wed Aug 26, 2015 12:17 pm
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

If you were a Dragon in a Den would you invest in every venture in varying amounts according to the size of each venture? Or invest in every venture in equal amounts? Or pick a range of what appeared to have the better prospects, diversifying widely and equal $ weighting? The first is like a cap wei...
by Clive
Wed Aug 26, 2015 11:57 am
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

Tales from long ago (2007-2009): I owned shares of Goldman-Sachs. (Don't ask why. Has to do with an article by a financial whiz in MONEY Magazine that I'm embarrassed to recount.) Anyway, summer of '08, my Goldman-Sachs stock kept dropping, and I kept buying. And then one bright sunny morning I wok...
by Clive
Wed Aug 26, 2015 11:39 am
Forum: Investing - Theory, News & General
Topic: EWUS UK small cap ETF (iShares)
Replies: 0
Views: 233

EWUS UK small cap ETF (iShares)

Just made some notes that might be interested http://www.jfholdings.pwp.blueyonder.co.uk/us_proxy_for_uk_ft250.pdf The UK FT250 is small cap in US scale despite being UK midcap (next 250 largest stock beneath the FT100). The FT250 has a above average weighting to financials, however many of those fi...
by Clive
Wed Aug 26, 2015 11:18 am
Forum: Investing - Theory, News & General
Topic: Individual Stocks Does it Ever Make Sense?
Replies: 81
Views: 7357

Re: Individual Stocks Does it Ever Make Sense?

100 stocks initially equally weighted 1% each, selected from across sectors, bought and held forever thereafter can match or even exceed a index fund, without the yearly fund management fees. Single stocks can be tax harvested or the flat liners sold if cash is required without generating a capital ...
by Clive
Wed Aug 26, 2015 9:18 am
Forum: Investing - Theory, News & General
Topic: 100% equities - my reasoning
Replies: 105
Views: 9264

Re: 100% equities - my reasoning

I'm with you on that 100% equities thing. As a mater of fact I have committed half of my portfolio to it! Equities are generally good for growth, worthy of a 100% allocation. Fixed income is good for income, worthy of a 100% allocation. I have both, enough in bonds for years and years of income, en...
by Clive
Tue Aug 25, 2015 5:18 pm
Forum: Investing - Theory, News & General
Topic: Did anyone jump in and buy 30% cheaper ETFs yesterday?
Replies: 4
Views: 1096

Re: Did anyone jump in and buy 30% cheaper ETFs yesterday?

Robert Lichello's AIM user group had some dip catches, but not all at the full 30% http://investorshub.advfn.com/boards/read_msg.aspx?message_id=116457172 http://investorshub.advfn.com/boards/read_msg.aspx?message_id=116460121 With AIM you know (can calculate) the next trade price (buy and sell) and...
by Clive
Tue Aug 25, 2015 7:59 am
Forum: Investing - Theory, News & General
Topic: XIV - Bogleheads Approved "Risk Premium" Investing?
Replies: 42
Views: 2521

Re: XIV - Bogleheads Approved "Risk Premium" Investing?

I'm thinking about XIV/ZIV/ Short VIX Futures. In theory, thees ETNs take a net long position on the S&P 500 while selling volatility insurance. On Monday XIV fell 18%, following steep declines late last week. Any speculation on XIV should be done with money that you could afford to lose entire...

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