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Re: Green day

For the past few years it seemed like stocks and (treasury) bonds have had perfect -1 correlation. The historic correlation is 0 so days like this where they both go up shouldn't be too uncommon. Oil is up but gold is flat.
by Day9
Fri Dec 19, 2014 4:25 pm
 
Forum: Investing - Theory, News & General
Topic: Green day
Replies: 8
Views: 943

Re: Credit Risk vs. Term Risk

Credit risk is affected by the same factors as equity risk and doesn't really add any diversification benefit at all. This is why people say to take your risk in your stock portfolio. They are talking about credit risk. When you look at duration risk in a vacuum you don't appear to get compensated f...
by Day9
Wed Dec 17, 2014 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: Credit Risk vs. Term Risk
Replies: 11
Views: 928

Re: Adjusting Core Four to include a slice of a single stock

I agree with mpt follower but would treat it as an independent investment in my equity portfolio and not modify my bond allocation to include it.

Maybe if it was a heavy growth stock like Amazon you could add more to your value tilt if you had one but forget about this.
by Day9
Fri Dec 12, 2014 6:34 am
 
Forum: Investing - Theory, News & General
Topic: Adjusting Core Four to include a slice of a single stock?
Replies: 12
Views: 770

Re: Is the Boglehead Consensus on Long Bonds still Negative?

Hold Long term treasuries if you have a stock dominated portfolio (like 90% stock)

Increase the duration of your bonds if you have a splash of Commodities or CCFs since these risk factors have negative correlation.
by Day9
Thu Dec 11, 2014 5:30 am
 
Forum: Investing - Theory, News & General
Topic: Is the Boglehead Consensus on Long Bonds still Negative?
Replies: 29
Views: 3187

Re: Slice And Dice Alternative Retirement Investments

Collatoralized Commodity Futures have positive expected real return but probably too high of variance to justify it when you look at it in a vacuum. But you should never look at an investment in a vacuum but in the context of a portfolio. Adding a splash of CCF allows you to take on more duration ri...
by Day9
Thu Dec 11, 2014 5:26 am
 
Forum: Investing - Theory, News & General
Topic: Slice And Dice Alternative Retirement Investments
Replies: 9
Views: 1147

Re: Leverage and P/e10

Did I miss the part where you show us your stock/bond allocation, what kinds of bonds you will be holding, and basically what your portfolio will look like as a whole? You mentioned 80/20 but that seemed to be just an example from the book. If you are 100% equities there is serious risk of margin ca...
by Day9
Wed Dec 10, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: Leverage and P/e10
Replies: 35
Views: 2397

Re: What is your opinion about "tilting?"

Vangurd's small funds aren't the smallest, and their value funds aren't the valuey-est, but you can't beat their low fees. I've got access to some DFA funds in my company retirement plan so I use both.
by Day9
Wed Dec 10, 2014 3:12 am
 
Forum: Investing - Theory, News & General
Topic: What is your opinion about "tilting?"
Replies: 116
Views: 8756

Re: Does splitting int'l markets increase returns?

Developed Europe has more in common with developed Asia than it does with Emerging Europe. Same is true when you swap Europe/Asia
by Day9
Mon Dec 08, 2014 11:45 pm
 
Forum: Investing - Theory, News & General
Topic: Does splitting int'l markets increase returns?
Replies: 21
Views: 1779

Re: Vanguard Flagship rep

Just want to say congrats to all of you millionaires on your success :greedy
by Day9
Mon Dec 08, 2014 5:34 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Flagship rep
Replies: 26
Views: 5739

Re: A question about Merriman's Buy & Hold Bonds

Treasuries at exempt from state tax but you still pay federal tax. Some states like Florida and Texas have 0% or close to 0% state income tax. California has individual state income tax as high as 12.3%

Municipal Bonds are tax free
by Day9
Wed Dec 03, 2014 4:42 pm
 
Forum: Investing - Theory, News & General
Topic: A question about Merriman's Buy & Hold Bonds
Replies: 10
Views: 825

Re: How do you rebalance?

Like Jeff said I rebalance with contributions but since I buy more investments on a regular interval I selected the option for rebalancing on a regular interval
by Day9
Wed Dec 03, 2014 2:33 am
 
Forum: Investing - Theory, News & General
Topic: How do you rebalance?
Replies: 40
Views: 3152

Re: Understanding why we market weight

Cap weighted Index funds are

1.) Low cost

2.) Low turnover

3.) Broadly diversified
by Day9
Mon Dec 01, 2014 1:36 am
 
Forum: Investing - Theory, News & General
Topic: Understanding why we market weight
Replies: 18
Views: 1629

Re: Ultimate Small Cap Value Portfolio...

This site suggests Guggenheim S&P SmallCap 600 Pure Value ETF (RZV).


http://www.altruistfa.com/USsmallcapvaluefunds.htm
by Day9
Wed Nov 19, 2014 4:41 am
 
Forum: Investing - Theory, News & General
Topic: Ultimate Small Cap Value Portfolio...
Replies: 31
Views: 4222

Re: When do your account returns dwarf your contributions?

The rule of thumb is this happens when you have double your yearly income. This assumes ~7-8% returns and 15% retirement savings rate, which is what is often recommended. Boglehesads often have higher savings rates than just 15% so they would need to save a higher multiple of their yearly salary bef...
by Day9
Sun Nov 16, 2014 11:29 pm
 
Forum: Investing - Theory, News & General
Topic: When do your account returns dwarf your contributions?
Replies: 51
Views: 6884

Re: Will the baby boomer selling effect come to fruition?

Does the baby boomer phenomenon exist in other countries? The American stock market has lots of foreign investors...
by Day9
Wed Nov 12, 2014 10:32 pm
 
Forum: Investing - Theory, News & General
Topic: Will the baby boomer selling effect come to fruition?
Replies: 14
Views: 2159

Re: Savings rate of -2% for those under 35 - WSJ

Is there no forum to post non-actionable personal-finance news? This isn't appropriate for the Investing General subforum either.
by Day9
Mon Nov 10, 2014 8:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Savings rate of -2% for those under 35 - WSJ
Replies: 69
Views: 4811

Savings rate of -2% for those under 35 - WSJ

Click the first search result to avoid paywall This Wall Street Journal article is making the rounds on social media and I thought Bogleheads would appreciate feeling ahead of the curve here. I suspect we have higher-than-average savings rates. United States Adults under age 35 have a savings rate ...
by Day9
Mon Nov 10, 2014 8:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Savings rate of -2% for those under 35 - WSJ
Replies: 69
Views: 4811

Re: Whats the best index?

Some Bogleheads only choose index investing because it achieves the following:

1.) Low cost

2.) Low turnover

3.) Broadly Diversified

Index funds just happen to be the best option when you care about these three qualities.
by Day9
Mon Nov 10, 2014 6:47 pm
 
Forum: Investing - Theory, News & General
Topic: Whats the best index?
Replies: 14
Views: 1759

Re: what is the actual value of my tax deferred accounts?

What tax bracket will you be in when you start to withdraw these funds? How much will you withdraw per year and what other sources of income, if any, will you have when you begin to withdraw? Where will you live (State and country)? Is any of it Roth?
by Day9
Mon Nov 10, 2014 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: what is the actual value of my tax deferred accounts?
Replies: 53
Views: 4230

Re: Oil and or Metals?

Adding a splash of diversified commodities allows you to increase your duration risk. Worth it if you can grasp the concept that you should not look at an investment in isolation, you should look at its role in a portfolio.
by Day9
Tue Nov 04, 2014 9:53 pm
 
Forum: Investing - Theory, News & General
Topic: Oil and or Metals?
Replies: 19
Views: 1191

Re: If I am a LT investor, should I forgo a bond allocation?

A splash of long term treasuries will go a long way in diversifying a stock-dominated portfolio and is worth the expected drag on returns. If you are very young you do not know how you will react to a bear market. Are you sure this money is in a lockbox set aside for retirement and you won't be draw...
by Day9
Wed Oct 29, 2014 3:49 pm
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2231

Re: QE Ending, how does it affect Total Bond Fund?

Duration of TBM is low enough that there won't be a wild swing in either direction.
by Day9
Wed Oct 29, 2014 3:13 pm
 
Forum: Investing - Theory, News & General
Topic: QE Ending, how does it affect Total Bond Fund?
Replies: 8
Views: 1456

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

Your point on SPX is well taken. But it's still the S&P500, and at present valuations, I don't want to lever the S&P500. ... Well, what do you want to lever? Famous poster "market timer" has the following allocation as of Oct 10 in this thread 45% Long term Treasuries (25+ year ma...
by Day9
Fri Oct 24, 2014 8:25 pm
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 510
Views: 56555

Re: IRS Announces new 401(k) contribution max for 2015 ($18,

My 401k offers index funds with expense ratios even lower than Vanguard's Admiral Shares, AND it offers some DFA funds. I don't make a ton of money, but I max it out because the fund choices are so good. I'm very happy for any increase in contributions limits. :D
by Day9
Fri Oct 24, 2014 1:06 pm
 
Forum: Investing - Theory, News & General
Topic: IRS Announces new 401(k) contribution max for 2015 ($18,000)
Replies: 50
Views: 7657

Re: Recent statistics of college majors

Does this belong in the Investing - Theory,News & General board? I think it might be more appropriate for the Personal Finance board.
by Day9
Wed Oct 15, 2014 12:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Recent statistics of college majors
Replies: 35
Views: 2743

Re: Gold: Is now the time?

I have no idea why someone would buy just gold instead of a diversified basket of commodities. Holding a small allocation to Collaterallized Commodity Futures (about 5%-10% of your equity allocation) can add diversification to a stock/bond portfolio, and will allow you to take on more duration risk...
by Day9
Mon Oct 13, 2014 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: Gold: Is now the time?
Replies: 36
Views: 2343

Re: Gold: Is now the time?

The thing that's the same with gold and CCF is that they are both dead weight as long-term investments. CCFs hold positive expected real return investments as Collateral. That's what the first C stands for. Furthermore like I said in my post it allows you to take on more duration risk which increas...
by Day9
Mon Oct 13, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: Gold: Is now the time?
Replies: 36
Views: 2343

Re: Gold: Is now the time?

I have no idea why someone would buy just gold instead of a diversified basket of commodities. Holding a small allocation to Collaterallized Commodity Futures (about 5%-10% of your equity allocation) can add diversification to a stock/bond portfolio, and will allow you to take on more duration risk ...
by Day9
Mon Oct 13, 2014 11:36 am
 
Forum: Investing - Theory, News & General
Topic: Gold: Is now the time?
Replies: 36
Views: 2343

Re: Why choose a LifeStrategy Fund?

For an all-in-one fund that is for a goal other than retirement
by Day9
Fri Oct 10, 2014 11:55 pm
 
Forum: Investing - Theory, News & General
Topic: Why choose a LifeStrategy Fund?
Replies: 41
Views: 3883

Re: is anything 'cheap' out there?

Commodities are cheap. A small allocation to Collateralized Commodity Futures (5%-10% of your equity allocation) may have a place in your portfolio. But according to this recent popular thread the people on this forum appear to sell out of asset classes after they go down instead of rebalancing back...
by Day9
Fri Oct 10, 2014 12:18 pm
 
Forum: Investing - Theory, News & General
Topic: is anything 'cheap' out there?
Replies: 54
Views: 5765

Re: Recommended book for teaching kids about saving/investin

I would suggest reading The Richest Man In Babylon to them
by Day9
Thu Oct 09, 2014 10:10 pm
 
Forum: Investing - Theory, News & General
Topic: Recommended book for teaching kids about saving/investing
Replies: 3
Views: 333

Re: Gambling versus Investing

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative." -Benjamin Graham
by Day9
Thu Oct 09, 2014 1:27 am
 
Forum: Investing - Theory, News & General
Topic: Gambling versus Investing
Replies: 20
Views: 2892

Re: Why Wouldn't You Tilt To Small Value?

Here is one person's opinion about various domestic small-value funds: http://www.altruistfa.com/USsmallcapvaluefunds.htm

Note how Vanguard's fund is quite low on the list. Other posters have already said how it is not small nor valuey enough. It also holds a lot of REITs.
by Day9
Wed Oct 08, 2014 1:06 pm
 
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 3183

Re: Why Hold Cash in Retirement Account

When investors talk about "cash" they usually mean cash equivalents like T-bills or Moneymarket funds. Something that is extremely liquid and safe (no duration or credit risk). Cash-equivalents act as a ballast to your portfolio and dilute large drops in asset prices. Bonds are supposed to...
by Day9
Wed Oct 08, 2014 1:03 pm
 
Forum: Investing - Theory, News & General
Topic: Why Hold Cash in Retirement Account
Replies: 21
Views: 1752

Re: Correlation Data for Total Bond, TIPS, & Total INTL Bond

SOMEONE TELL ME WHERE I CAN GET MY HANDS ON 30 YEAR NEW ZEALAND GILTS!
by Day9
Wed Oct 08, 2014 1:28 am
 
Forum: Investing - Theory, News & General
Topic: Correlation Data for Total Bond, TIPS, & Total INTL Bond ?
Replies: 13
Views: 1019

Re: How much is your fixed income investment earning?

Long term treasuries up something like 20% YTD. I have an extremely high stock allocation and a splash of CCF so I want to avoid credit/default risk and take on more duration risk. They yield something like 3% only though but I'm not sweeping coupons to my spending accounts anytime soon. That gets r...
by Day9
Tue Oct 07, 2014 5:29 pm
 
Forum: Investing - Theory, News & General
Topic: How much is your fixed income investment earning?
Replies: 31
Views: 2875

Re: Optimum # of Funds in a Portfolio ?

12 is the maximum? Child's play.

Large Momentum
Large Value
Small Momentum
Small Value
Intl Large Momentum
Intl Large Value
Intl Small Momentum
Intl Small Value
Emerging Markets Momentum
Emerging Markets Value
REIT
Intl REIT
Long Term Treasury
Short Term Bond
TIPS
Commodities
by Day9
Sat Oct 04, 2014 1:11 am
 
Forum: Investing - Theory, News & General
Topic: Optimum # of Funds in a Portfolio ?
Replies: 17
Views: 1588

Re: Why not a portfolio of equity index funds and CD's?

Yes CDs offer higher yields than treasuries and are FDIC insured. The only thing you sacrifice is the upside potential if rates go down. Don't tell me "rates have nowhere to go but up". 10 year treasury is about 2.5%, but similar German Bund is 1.5% and Japanese govt bond is 0.5%. Sometime...
by Day9
Fri Oct 03, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a portfolio of equity index funds and CD's?
Replies: 27
Views: 2892

Re: does anybody out there own a two fund portfolio?

Total World stock does not yet have admiral shares. It has higher fees and owns fewer stocks than TSM and Total International.
by Day9
Thu Oct 02, 2014 11:09 pm
 
Forum: Investing - Theory, News & General
Topic: does anybody out there own a two fund portfolio?
Replies: 14
Views: 2342

Re: Is there an "upper limit" on Boglehead theory?

$10 m is a lot for an individual but not a lot compared to hedge funds and institutions. The upper limit is when you have billions. People like Warren Buffet cannot simply buy as much stock as they want for the current asking price because there are not enough buyers.
by Day9
Thu Oct 02, 2014 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: Is there an "upper limit" on Boglehead theory?
Replies: 58
Views: 4674

Re: Cramer's sane moment on Gross' exit

I have heard him recommend stock index funds (for a young person's first $5,000 he invests).

I can't believe that people still believe his thesis that you can beat the market by doing "one hour of homework per week for every stock in your diversified 5-10 stock portfolio".
by Day9
Thu Oct 02, 2014 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: Cramer's sane moment on Gross' exit
Replies: 24
Views: 3400

Re: Why not 100% Stocks?

I think the moderators locked the last thread that compiled all the "100% stocks?" posts recently. Too bad. It was pretty entertaining and interesting to see when these kinds of threads crop up.
by Day9
Wed Oct 01, 2014 9:35 pm
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 21891

Re: should we all own a small cap fund?

The small premium only shows up in the very smallest stocks, like in microcap funds. Vanguard's small funds are basically midcap funds.
by Day9
Wed Oct 01, 2014 8:21 pm
 
Forum: Investing - Theory, News & General
Topic: should we all own a small cap fund?
Replies: 11
Views: 553

Re: When should someone "not stay the course"?

Mr Bogle shifted his asset allocation before the 2000 crash. He noticed stock earnings were above 40 while the bond yields were about 7%. He was having health issues with his heart and wanted to protect his legacy and loved ones. He says you should "almost never and perhaps never" make a l...
by Day9
Tue Sep 30, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: When should someone "not stay the course"?
Replies: 43
Views: 2709

Re: CNN: 5 investing secrets of the wealthy.

Nah this article seems to imply that stock picking is not a complete waste of time. For this to be 100% Boglehead it would also say "Choose a fund that is low cost, low turnover, and broadly diversified. An index fund meets these requirements perfectly."
by Day9
Tue Sep 30, 2014 12:50 pm
 
Forum: Investing - Theory, News & General
Topic: CNN: 5 investing secrets of the wealthy.
Replies: 20
Views: 3800

Re: 'Play Money' - why 5%?

The real answer is because the human has 5 fingers on each hand. That is the reason we use the base-10 number system instead of binary, hexadecimal, base-12, roman numerals, or some other alternative. The property of adding a "0" when you multiply by 10, etc are just properties of this par...
by Day9
Sun Sep 28, 2014 3:55 pm
 
Forum: Investing - Theory, News & General
Topic: 'Play Money' - why 5%?
Replies: 42
Views: 1687
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