Search found 1338 matches

by Clive
Thu Jul 30, 2015 5:13 am
Forum: Investing - Theory, News & General
Topic: Are equities really as risky as anyone thinks?
Replies: 154
Views: 5258

Re: Are equities really as risky as anyone thinks?

Here are dispersions of Total Real Return TRR for S&P500 over various holding periods in the past: .... Do you know/have the dispersions of less right tail cases (The US was a right tail (good) case across the 20th Century, only bettered by Australia and S. Africa). Taking any good outlier outc...
by Clive
Thu Jul 30, 2015 2:54 am
Forum: Investing - Theory, News & General
Topic: Are equities really as risky as anyone thinks?
Replies: 154
Views: 5258

Re: Are equities really as risky as anyone thinks?

1900 – 2013 Annualised Stocks Real Total Return % Australia 7.4 Austria 0.7 Belgium 2.6 Canada 5.7 Denmark 5.2 Finland 5.3 France 3.2 Germany 3.2 Ireland 4.1 Italy 1.9 Japan 4.1 Netherlands 4.9 N. Zealand 6 Norway 4.3 Portugal 3.7 S. Africa 7.4 Spain 3.6 Sweden 5.8 Switzerland 4.4 U.K. 5.3 U.S.A. 6....
by Clive
Thu Jul 30, 2015 2:10 am
Forum: Investing - Theory, News & General
Topic: Are equities really as risky as anyone thinks?
Replies: 154
Views: 5258

Re: Are equities really as risky as anyone thinks?

We frequently hear the claim that "historically stocks always have beaten bonds if you wait thirty years," but it isn't so unless you carefully throw away the periods of history when they didn't. Or casually discount those stocks that did. Dow and Jones devised three indexes, Industrial, ...
by Clive
Wed Jul 29, 2015 6:25 pm
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

What I was trying to imply is that investors use dividends as a proxy for a quality/value strategy. But you are right, dividends are not a factor that adds alpha. According to Kenneth French's data dividends historically since 1927 haven't been a particularly good indicator of value. Comparing non ...
by Clive
Wed Jul 29, 2015 5:28 am
Forum: Investing - Theory, News & General
Topic: Equity Risk Premiums Around the World - July 2015
Replies: 14
Views: 1343

Re: Equity Risk Premiums Around the World - July 2015

Great post. Thanks. http://i.imgur.com/e4kFp6Z.png If I'm reading that chart correctly then the Y-axis might equate to chance of avoiding a default such that the leftmost are 'priced' to a 6% reward (premium) relative to a 80% (approx) chance of avoiding default. 6% x 0.8 = 4.8%. Whilst the rightmos...
by Clive
Tue Jul 28, 2015 4:35 pm
Forum: Investing - Theory, News & General
Topic: A bit of gold?
Replies: 45
Views: 2426

Re: A bit of gold?

If your goal is to invest in something that will still have some value of some kind in 1,000 years, gold may be a good way to go. If your time horizon is less than 1,000 years, I would avoid it. 40% of major markets/countries had negative 50 year total real gains from stocks,. So on that basis many...
by Clive
Tue Jul 28, 2015 4:28 pm
Forum: Investing - Theory, News & General
Topic: A bit of gold?
Replies: 45
Views: 2426

Re: A bit of gold?

The stock purchase power of gold and gold purchase power of stock vary enormously over time. If gold buys stocks at a 50% discount and later stocks are sold to buy gold at a 50% discount, you hold 4 times as much gold as at the start. Whilst the value of gold might have broadly inflation paced. Reba...
by Clive
Tue Jul 28, 2015 10:33 am
Forum: Investing - Theory, News & General
Topic: [parents read] Death of Money [- suggestions?]
Replies: 6
Views: 946

Re: Death of Money

Often Old School avoid stocks altogether - being perceived as too risky/speculative and not for them. Some own their own home and save in safe bonds, others add gold to that. When you own a home you don't have to pay rent (benefit from the imputed rent amount) - if you sold a home, invested the proc...
by Clive
Tue Jul 28, 2015 10:17 am
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 45
Views: 2475

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

I start with 50/50, with a view to draw down (safe) bonds over a 20 year horizon (2.5% withdrawal rate) and let stocks accumulate (reinvest dividends) for 20 years. Interim sequence of returns risk is in effect eradicated for the 20 year term and risk is shifted to longevity/heirs. Starts at 50/50, ...
by Clive
Tue Jul 28, 2015 9:43 am
Forum: Investing - Theory, News & General
Topic: [parents read] Death of Money [- suggestions?]
Replies: 6
Views: 946

Re: Death of Money

what AA would you recommend? Land, cash and gold :) https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&TotalBond2=40&portfolio3=Custom&portfolio2=Custom&portfolio1=Custom&annualOperation=0&TotalStockMarket2=60&initialAmount=10000&endYear=2014&...
by Clive
Mon Jul 27, 2015 1:10 pm
Forum: Investing - Theory, News & General
Topic: estimate future real returns ?
Replies: 16
Views: 1249

Re: estimate future real returns ?

Have you looked at the Micro-caps sector much? Lower (smaller) end of FT250 is about as small as I'd normally go (smallest recent FT250 holding is Lonmin at £360M market cap). Smaller and my perception is that typically the spreads become to wide (illiquid). Spanning up to around £4.5B at the bigge...
by Clive
Mon Jul 27, 2015 12:55 pm
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

I also find what is often glossed over is the question that is raised by individuals that if you are able to generate enough income from dividends, you don't need to sell the underlying stock to support your lifestyle whereas if you dont have that regular income from dividends or bond coupons then ...
by Clive
Mon Jul 27, 2015 10:37 am
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

Why is a strategy based on not selling any assets, or at least minimizing that, worse than a strategy in which I always have to sell assets even when they may be deeply under water? There are other cases, such as if your using 2 basket asymmetric approach. I opted for the 2 basket approach as I dee...
by Clive
Mon Jul 27, 2015 10:20 am
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

One thing to keep in mind you can improve the returns of the non div payers by simply applying some screens to kick out the lottery stocks, those penny stocks and growth stocks with low/no profitability This December 2014 article lists the S&P500 non dividend stocks as at that date http://www.d...
by Clive
Mon Jul 27, 2015 8:50 am
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

A beneficial factor for me as a non US investor (UK) is that non dividend US stocks avoids the 30% US withholding tax applied to dividends (reduced to 15% under US/UK tax treaty providing we're known to the IRS (W8BEN form)). If a fund levies a 0.1% management fee/expense ratio, but pays a 2% divide...
by Clive
Mon Jul 27, 2015 8:37 am
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

This chart of S&P500 non dividend stocks as of May 2008 that run forward to April 2013 as-is other than yearly rebalancing back to equal weightings provides a feel for how one (or a few) stocks can provide the pull-up of the whole set http://images.investorshub.advfn.com/images/uploads/2013/5/29...
by Clive
Mon Jul 27, 2015 8:14 am
Forum: Investing - Theory, News & General
Topic: Another look at dividend paying stocks
Replies: 37
Views: 3421

Re: Another look at dividend paying stocks

Kenneth French's data that spans back to 1927 suggests that the difference between high yield (Hi30 - those ranked in the top 30% by dividend yield) compared to non dividend produced similar overall rewards For US since 1927, non dividend equal weighted yearly rebalanced Arithmetic average total gai...
by Clive
Mon Jul 27, 2015 7:05 am
Forum: Investing - Theory, News & General
Topic: estimate future real returns ?
Replies: 16
Views: 1249

Re: estimate future real returns ?

And the other perspective is that most of this negative sentiment is just down to high valuations ... not down to any doom & gloom macroeconomic predictions, or anything that would really cause economists to worry And not everywhere in the world's expensive http://www.starcapital.de/research/st...
by Clive
Sun Jul 26, 2015 4:02 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns – Don’t quit your day job.
Replies: 103
Views: 10096

Re: Scott Burns – Don’t quit your day job.

I've based my retirement calculations on a 2% real return. If I get my more, great. If I get less, I'm good at belt tightening. I'm also planning on a variable percentage withdrawal rate. 2.5% myself. 50% initial in bonds that hopefully pace inflation, draw down over 20 years. Other half in stocks ...
by Clive
Sat Jul 25, 2015 7:25 pm
Forum: Investing - Theory, News & General
Topic: Any passive funds that avoid dividend-paying stocks?
Replies: 21
Views: 2841

Re: Any passive funds that avoid dividend-paying stocks?

Resurrecting a old thread, Kenneth French' data from 1927 for dividend based rankings indicates that on a Value Weighted measure higher yield indeed does outperform non-dividend. However on a equal weighted measure the two broadly provided comparable rewards. Non dividend had a higher arithmetic yea...
by Clive
Fri Jul 24, 2015 6:36 am
Forum: Investing - Theory, News & General
Topic: Cap weight maximum diversification?
Replies: 46
Views: 2359

Re: Cap weight maximum diversification?

Large, cap weighted tend to have lower beta. Equal weighted tilts towards smaller cap higher beta. Three assets that 10 year annualised 5%, 10% and 15% has a arithmetic average of 10% and initial equal weighted bought and held yields a 10.67% annualised. Three assets that 10 year annualised 0%, 10% ...
by Clive
Wed Jul 22, 2015 1:55 pm
Forum: Investing - Theory, News & General
Topic: Chart: The World's Stock Markets in the Year 2050
Replies: 31
Views: 5325

Re: Chart: The World's Stock Markets in the Year 2050

So you're saying instead of holding Total World, own 20 countries with 5% in each (or something) and rebalance. That sounds pretty complicated (what would you even purchase) and fairly tilted. That's also a fairly advanced idea for a lot of people here people who don't even own cap weight, let alon...
by Clive
Wed Jul 22, 2015 5:05 am
Forum: Investing - Theory, News & General
Topic: Correlations, eh?
Replies: 18
Views: 2735

Re: Correlations, eh?

However, one thing missing from this is the standard deviations of the correlations over time. Correlations have not always been true to form. You would take the correlations over a given period and sampling frequency and compute the standard deviation or a coefficient of variation may be more usef...
by Clive
Mon Jul 20, 2015 3:18 pm
Forum: Investing - Theory, News & General
Topic: Vanguard "Too Big to Fail?"
Replies: 11
Views: 1437

Re: Vanguard "Too Big to Fail?"

Isn't Vanguard unique in that its actually owned by the funds, and the funds are owned by the shareholders (investors). Bottom up rather than a top down 'institute' that's owned by a single group/owner. https://about.vanguard.com/what-sets-vanguard-apart/why-ownership-matters/ For Vanguard to 'fail'...
by Clive
Mon Jul 20, 2015 12:08 pm
Forum: Investing - Theory, News & General
Topic: The Danger of higher-yielding bond funds
Replies: 62
Views: 4680

Re: The Danger of higher-yielding bond funds

You are reasoning by a false premise. Some people do 'basket' their investments by risk (putting some in the 'safe' basket and others in the 'risky' basket), but some do not, and I am not aware of any evidence that people have a tendency to do the former I prefer the two basket approach. Drop perha...
by Clive
Sun Jul 19, 2015 3:12 am
Forum: Investing - Theory, News & General
Topic: The "cold hands" effect - the latest investment anomaly
Replies: 14
Views: 1968

Re: The "cold hands" effect - the latest investment anomaly

Maynard, compared to FT250 - which is less tilted than the FT100 and the multi-fund relatively lagged http://images.investorshub.advfn.com/images/uploads/2015/7/18/opsoea.jpg Oh yeah, the FTSE 250's kept up with Murray International over the long-term - outstanding run The problem as ever is knowin...
by Clive
Sun Jul 19, 2015 2:26 am
Forum: Investing - Theory, News & General
Topic: leverage and beating the market
Replies: 37
Views: 2506

Re: leverage and beating the market

... I do believe that part of Warren Buffet's success is due to the cheap leverage he has been able to obtain through his insurance companies.... Buffett has said that the float from insurance has provided them essentially cheap leverage. ... He has the insurance float, insurance premiums collected...
by Clive
Sat Jul 18, 2015 4:38 pm
Forum: Investing - Theory, News & General
Topic: The "cold hands" effect - the latest investment anomaly
Replies: 14
Views: 1968

Re: The "cold hands" effect - the latest investment anomaly

Maynard, compared to FT250 - which is less tilted than the FT100 and the multi-fund relatively lagged

Image
by Clive
Fri Jul 17, 2015 10:28 am
Forum: Investing - Theory, News & General
Topic: Chart: The World's Stock Markets in the Year 2050
Replies: 31
Views: 5325

Re: Chart: The World's Stock Markets in the Year 2050

Costs and taxes are a important factor. Berkshire Hathaway for instance doesn't pay a dividend, so no withholding taxes. Buffett also has access to a large float of free money - insurance premiums paid in lieu of claims later being paid out. Being a majority shareholder he also often benefits from m...
by Clive
Fri Jul 17, 2015 9:48 am
Forum: Investing - Theory, News & General
Topic: Chart: The World's Stock Markets in the Year 2050
Replies: 31
Views: 5325

Re: Chart: The World's Stock Markets in the Year 2050

Anyone not convinced by that to diversify internationally is certifiable in my book. You'd have had to pick one of just two possible countries over their worst period to beat the outcome of an equal-weighted approach over its worst period. I realize that's not the future, yada yada, but why would a...
by Clive
Fri Jul 10, 2015 7:40 pm
Forum: Investing - Theory, News & General
Topic: a tale of two small value funds
Replies: 30
Views: 3303

Re: a tale of two small value funds

I'm a odd character who likes to avoid crowds rather that flowing with the crowd; Thinks the universe is decaying/getting smaller at a ever faster rate rather than expanding at a faster rate; Prefers to buy when most are selling, sell when most are buying. To me Small Cap Value doesn't provide a pre...
by Clive
Fri Jul 10, 2015 6:47 pm
Forum: Investing - Theory, News & General
Topic: How do you do the Larry Portfolio?
Replies: 48
Views: 3689

Re: How do you do the Larry Portfolio?

I do have a relatively low stock allocation (30/70), and I do tilt to small and value, but I'm too chicken to go all the way with 100% small value on the stock side. Kevin, Larry Portfolio blends Small Cap Value with Emerging Markets for the stock holdings, not all pure Small Cap Value alone. Part ...
by Clive
Fri Jul 10, 2015 6:18 pm
Forum: Investing - Theory, News & General
Topic: How do you do the Larry Portfolio?
Replies: 48
Views: 3689

Re: How do you do the Larry Portfolio?

Comparing DFSVX (Portfolio 1) with VISVX (Portfolio 2) in US$ terms

Image

looks like 2003 was a outlier year in the US

Since 2004

Image
by Clive
Fri Jul 10, 2015 6:11 pm
Forum: Investing - Theory, News & General
Topic: How do you do the Larry Portfolio?
Replies: 48
Views: 3689

Re: How do you do the Larry Portfolio?

I've got it as holding equal parts SCV and Emerging Markets (at least in Portfolio Visualizer) .. A great combination, which has returned 15.2% since 1971, with very reasonable volatility compared to holding either in isolation I'd call it a 'barbelled' portfolio - that is: it balances higher risk/...
by Clive
Tue Jul 07, 2015 6:04 pm
Forum: Investing - Theory, News & General
Topic: Aren't we obsessing way too much about our portfolios?
Replies: 84
Views: 6631

Re: Aren't we obsessing way too much about our portfolios?

Let's take a look at the relationship between returns and "luck" vs. asset allocation. Here are the 15-year portfolio compound annual returns for 3 different allocations for the luckiest vs. the unluckiest periods since 1972: Period______________________________40/60...........50/50.........
by Clive
Tue Jul 07, 2015 3:24 pm
Forum: Investing - Theory, News & General
Topic: Everything is rolling over except U.S. stocks
Replies: 14
Views: 1788

Re: Everything is rolling over except U.S. stocks

IJS (US Small Cap Value) and UK Mid Cap (FT250 i.e. ranked 101 to 350 largest by market cap) continue to track each other closely (in FX adjusted terms). UK Mid Cap in US scale are the equivalent of US small cap. FT250 still hasn't rolled over (above 10m sma).
by Clive
Tue Jul 07, 2015 1:40 pm
Forum: Investing - Theory, News & General
Topic: Does An All ETF Portfolio Make Sense?
Replies: 40
Views: 3266

Re: Does An All ETF Portfolio Make Sense?

Some ETF's 'lend' stock. If another party can receive a dividend more tax/cost efficiently than the fund then a fund might lend stock to that party just prior to x-div and have the stock returned again on the x-div day, perhaps under agreement of the lending rate being the same as the (more tax effi...
by Clive
Tue Jul 07, 2015 1:32 pm
Forum: Investing - Theory, News & General
Topic: Does An All ETF Portfolio Make Sense?
Replies: 40
Views: 3266

Re: Does An All ETF Portfolio Make Sense?

Different countries apply different rates of withholding taxes. The default rate for the US for instance is 30%. Broadly however you might assume a 15% rate as a fair ballpark guide for average withholding taxes. Much of withholding taxes will depend where the fund is domiciled and what tax treatie...
by Clive
Tue Jul 07, 2015 1:13 pm
Forum: Investing - Theory, News & General
Topic: Does An All ETF Portfolio Make Sense?
Replies: 40
Views: 3266

Re: Does An All ETF Portfolio Make Sense?

I view them as basically the same (I buy and hold) but I have always had a question and hopefully it can be answered here: When looking at Vanguard MF/ETFs I noticed that the ETFs always significantly lower expense ratios. Why is that? Am I missing something? ETF's tend to benchmark to the net vers...
by Clive
Mon Jul 06, 2015 1:35 am
Forum: Investing - Theory, News & General
Topic: Chart: The World's Stock Markets in the Year 2050
Replies: 31
Views: 5325

Re: Chart: The World's Stock Markets in the Year 2050

I don't understand the concept of ZERO international exposure (and yes, I do understand that many U.S. companies maintain significant overseas operations). I also recognize that Vanguard Balanced Index has been endorsed by a number of financial heavyweights, including the great Jack Bogle. But real...
by Clive
Sun Jul 05, 2015 3:09 pm
Forum: Investing - Theory, News & General
Topic: Chart: The World's Stock Markets in the Year 2050
Replies: 31
Views: 5325

Re: Chart: The World's Stock Markets in the Year 2050

As long as the experts are predicting stuff, what do they predict for the correlation coefficient between the U.S. and the world for 2050? Depending on how globalization proceeds, even at 17.9%, the U.S. market might conceivably be a crappy but serviceable approximation to the world market. Subopti...
by Clive
Sun Jul 05, 2015 10:13 am
Forum: Investing - Theory, News & General
Topic: Chart: The World's Stock Markets in the Year 2050
Replies: 31
Views: 5325

Re: Chart: The World's Stock Markets in the Year 2050

For any data set of equity returns across any time period (fractal) you'll typically see a sorted set exhibit a left tail loser(s) and right tail winner(s), with a bunch of more average between. Equal weighting and rebalancing will typically lay more in the central to right (better) end of the scale...
by Clive
Tue Jun 30, 2015 10:57 am
Forum: Investing - Theory, News & General
Topic: Emergency Portfolio with 30% Stocks
Replies: 33
Views: 2203

Re: Emergency Portfolio with 30% Stocks

In the land of TT (Topsy-turvy) people barter using shares of which there are many denominations. One day a clever individual devised a index against which the different denominations could be associated. Generally the population are content as more often stuff costs fewer shares to buy each year, s...
by Clive
Mon Jun 29, 2015 2:44 pm
Forum: Investing - Theory, News & General
Topic: Spending from separate retirement buckets
Replies: 46
Views: 4266

Re: Spending from separate retirement buckets

Three buckets 1. Own own home - so all 'rent' paid in advance 2. Drawdown, initially 20 years of income in safe (ideally inflation pacing/exceeding/liability matched) bonds. 3. Growth. Ideally doubles in real terms in 20 years or less I established a ladder for 2. taking into account future pensions...
by Clive
Mon Jun 29, 2015 2:26 pm
Forum: Investing - Theory, News & General
Topic: International stock "dividend variability" Why?
Replies: 49
Views: 4774

Re: International stock "dividend variability" Why?

Combination of Vodaphone/Verizon massive special dividend that was paid out some time around March 2014 ... and US$ strengthening by around 20% compared to a basket of other currencies https://chart.finance.yahoo.com/z?s=UUP&t=2y&q=l&l=off&z=m&a=v&p=s&lang=en-GB&regio...
by Clive
Mon Jun 29, 2015 5:35 am
Forum: Investing - Theory, News & General
Topic: The Other Side, part 3
Replies: 16
Views: 2108

Re: The Other Side, part 3

But the fundamental concepts still apply : initial equal weight - diversifying widely, and either simply buy and hold (leave as is) or better still periodically rebalance back towards equal weighting if cost/tax efficient to do so. The latter is technically the more rewarding, subject to costs/taxes...
by Clive
Sun Jun 28, 2015 6:11 am
Forum: Investing - Theory, News & General
Topic: The Other Side, part 3
Replies: 16
Views: 2108

Re: The Other Side, part 3

There's a common fractal pattern to stock gains. Take any time period from a few months up to 100+ years, sort and plot the individual gains and you'll see a deep left tail that rises quite steeply before levelling off into a more gentle upward slope, with a steep/tall right tail. Broadly a few do p...
by Clive
Sun Jun 28, 2015 5:06 am
Forum: Investing - Theory, News & General
Topic: The Other Side, part 3
Replies: 16
Views: 2108

Re: The Other Side, part 3

Format's not good, but this is the data I've formed from a Japanese investors perspective relative to total returns (dividends reinvested) for each of Australia (AORD), US, UK and TOPIX (Japan) all adjusted to Yen based % gains. A 5 year ladder of Japanese bonds is also included that is simply the r...
by Clive
Sat Jun 27, 2015 6:38 pm
Forum: Investing - Theory, News & General
Topic: The Other Side, part 3
Replies: 16
Views: 2108

Re: The Other Side, part 3

Ideally any potential lump sum investment should be assessed on current valuations. The Wall Street Crash years were preceded by the Roaring 20's, when stocks doubled, doubled again and doubled yet again within a decade or so. Similar in the case of Japan's 1990 peak. Lumping in after such prior fas...
by Clive
Sat Jun 27, 2015 6:18 pm
Forum: Investing - Theory, News & General
Topic: The Other Side, part 3
Replies: 16
Views: 2108

Re: The Other Side, part 3

I think that DCA is a psychological smoke screen that fools investors into adopting an inappropriate asset allocation. I really think that one should listen to one's rational fear of losing a significant amount of money in little time and chose an appropriate asset allocation. I've been thinking ab...

Go to advanced search