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Re: Medium bond vs short + long bonds & rebalance

The higher convexity of the barbell portfolio enhances portfolio performance only in the presence of higher interest rate volatility. In a situation of low interest rate volatility the bullet portfolio will outperform the barbell.
by Day9
Sun Mar 22, 2015 3:34 am
 
Forum: Investing - Theory, News & General
Topic: Medium bond vs short + long bonds & rebalance
Replies: 9
Views: 1105

Re: Collective thoughts [investing mini-reference]

This is such an amazing resource I cannot even articulate it. Thanks so much Robert T. I check this quite often and I would be grateful if you continue to update it with any new insights.
by Day9
Fri Mar 20, 2015 2:15 pm
 
Forum: Investing - Theory, News & General
Topic: Collective thoughts [investing mini-reference]
Replies: 36
Views: 102979

Re: An inspiring message for Bogleheads

I too am in my twenties and discovered the Boglehead philosophy three years ago. I have been been following the principles as best I can, living well below my means and investing in broadly diversified, low cost, low turnover funds in a tax efficient manner. My family is in a much more secure place ...
by Day9
Fri Mar 20, 2015 12:42 am
 
Forum: Investing - Theory, News & General
Topic: An inspiring message for Bogleheads
Replies: 56
Views: 4168

Re: Anyone concerned about their bond holdings?

We had a recent thread about this. The consensus was that most Bogleheads have crafted an allocation that they are comfortable enough with to stay the course.

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=160412
by Day9
Thu Mar 19, 2015 4:38 pm
 
Forum: Investing - Theory, News & General
Topic: Anyone concerned about their bond holdings?
Replies: 58
Views: 5552

Re: Observations from a first time poster, long time reader.

I'd take the cute little saying of the Efficient Market Hypothesis over OP's only justification for the strategy - a cute little saying that the people on the other side of the trade are [irrational] gamblers. While there are far worse strategies I put them in the flawed category and don't like usin...
by Day9
Thu Mar 19, 2015 4:29 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15332

Re: Observations from a first time poster, long time reader.

The premium for writing a covered call 8% out of the money & 3 months away would be very small, pennies even. Gaining only 8% and incurring taxable events when the market rises 26.06% is a horrible result. The market has down days/months/years and reversion to the mean is a real phenomenon and m...
by Day9
Thu Mar 19, 2015 2:29 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15332

Dollar falls after Fed policy statement released

Tthe Fed dropped its promise to be "patient" as it weighs interest rate hikes. Yellen said "Just because we removed the word 'patient,' doesn't mean we will be impatient." This chart shows how UUP, a USD bullish ETF fell sharply while US stocks, foreign stocks, long term bonds, a...
by Day9
Wed Mar 18, 2015 1:56 pm
 
Forum: Investing - Theory, News & General
Topic: Dollar falls after Fed policy statement released
Replies: 10
Views: 1167

Re: Observations from a first time poster, long time reader.

Plugging that $1.3m into a plain old 3 Fund Portfolio, a la Bogle at the 50/50 AA returns about double that. I've never heard of "covered calls" so clearly I shouldn't get involved in them, but with the info I just posted, why is a CC better than the 3 Fund approach? You could have a 3-fu...
by Day9
Wed Mar 18, 2015 1:56 am
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15332

Re: Are long term bonds optimal for long investment horizons

This would make sense with long-term TIPS , but not with long-term nominal bonds. If you are 30 years from retirement and put $45K into 30-year zero-coupon Treasuries (which currently yield 2.71%), you would be guaranteed $100K in 30 years, but you would not have any guarantee how many years of liv...
by Day9
Tue Mar 17, 2015 10:08 pm
 
Forum: Investing - Theory, News & General
Topic: Are long term bonds optimal for long investment horizons?
Replies: 3
Views: 526

Re: Observations from a first time poster, long time reader.

Here's a chart of VFIAX (Vanguards S&P500 Fund) compared to BXM (CBOE Buy/Write index) and DIA (A DJIA ETF) compared to BXD (Another Buy/Write index based on the DJIA) http://i62.tinypic.com/30m26pj.png Adding Vanguard balanced fund http://i62.tinypic.com/2qd6913.png While there are far worse st...
by Day9
Tue Mar 17, 2015 9:46 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15332

Re: Article: The Death of The Millionaire Next Door Dream

Bogleheads don't overlap with the FIRE (Financial Independence, Retire Early) crowd that much (Many FIRE people are Bogleheads but most Bogleheads are not FIRE people). There is enough pressure in this society to be a consumer. Even if you are not aiming for early retirement it is good to be exposed...
by Day9
Mon Mar 16, 2015 11:53 pm
 
Forum: Investing - Theory, News & General
Topic: Article: The Death of The Millionaire Next Door Dream
Replies: 20
Views: 5335

Re: Is MicroCap on sale?

Micro cap funds can have very high tracking error due to the extreme illiquidity of the underlying stocks. On one hand, only big money can get exposure to microcaps by doing it themselves instead of using funds and avoid this tracking error. On the other hand, big money cannot invest too much into m...
by Day9
Mon Mar 16, 2015 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: Is MicroCap on sale?
Replies: 11
Views: 1381

Re: Poll: When to pay down debt rather than invest

Having debt in addition to stock and bond investments is like the opposite of holding cash in addition to a stock and bond portfolio. It is risky while holding cash is conservative. On the other hand you can cash out investments in a pinch but you cannot get money back that you used to pay off a debt.
by Day9
Mon Mar 16, 2015 10:57 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When to pay down debt rather than invest
Replies: 49
Views: 3879

Re: Fed: US Household Wealth rises by 1.9% hitting $83 Trill

That puts Bill Gates at about 0.1% of all total wealth in the US. Or 1/1000 out of a population of 320 million. There are 117,538,000 households in the United States. Probably better to use this figure as 320 million includes children. I presume that US household wealth is much higher than any othe...
by Day9
Fri Mar 13, 2015 3:31 pm
 
Forum: Investing - Theory, News & General
Topic: Fed: US Household Wealth rises by 1.9% hitting $83 Trillion
Replies: 4
Views: 590

Re: How much international is too much?

Is there an agreed upon upper limit of international stock exposure? One way to think about an upper limit on international stocks is to look at revenue exposure This is a good point but one thing to keep in mind for people who tilt is that small and small value US stocks tend to get more of their ...
by Day9
Thu Mar 12, 2015 6:56 pm
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9045

Re: What cash interest rate to not invest in bonds?

Schwab makes its money from its roboadviser service from the cash allocation in their customers' portfolios. The try to make a profit for themselves with your cash. So it is important to realize this conflict of interest when reading their study praising the benefits of a hefty cash allocation in in...
by Day9
Thu Mar 12, 2015 2:09 am
 
Forum: Investing - Theory, News & General
Topic: What cash interest rate to not invest in bonds?
Replies: 14
Views: 2319

Re: Should Vanguard Offer A Low Minimum Fund?

What about ETFs? You can buy a single share of a Vanguard ETF commission free at Vanguard brokerage.
by Day9
Tue Mar 10, 2015 10:43 pm
 
Forum: Investing - Theory, News & General
Topic: Should Vanguard Offer A Low Minimum Fund?
Replies: 31
Views: 2331

Re: Bond credit risk is unique from equity risk

Robert T references this paper in the "Collective Thoughts" sticky: Default Risk - most of the premium is explained by same factors that influence equity returns "We show that expected default accounts for a surprisingly small fraction of the premium in corporate rates over treasuries...
by Day9
Tue Mar 10, 2015 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: Bond credit risk is unique from equity risk
Replies: 12
Views: 1228

Re: Creating a Better Small Cap Value Fund

factor exposure and costs
by Day9
Mon Mar 09, 2015 10:15 pm
 
Forum: Investing - Theory, News & General
Topic: Creating a Better Small Cap Value Fund
Replies: 7
Views: 1007

Re: Schwab Intelligent Portfolios is live

I hear the high cash reserves is how they make their money. They take your cash allocation and lend it out themselves.
by Day9
Mon Mar 09, 2015 3:25 am
 
Forum: Investing - Theory, News & General
Topic: Schwab Intelligent Portfolios [now live]
Replies: 255
Views: 17928

Re: Please help me understand Bond ETFs...

Just to state the obvious: Read the prospectus. The whole thing, and all of its supplements.
by Day9
Fri Mar 06, 2015 5:42 pm
 
Forum: Investing - Theory, News & General
Topic: Please help me understand Bond ETFs...
Replies: 25
Views: 2511

Re: New DOW Component

This must have been the reason for the stock split. The Dow uses share price, which was easier to calculate 50 years ago but is inaccurate and obsolete today. But they couldn't have APPL with a 1000+ share price in the dow. It makes sense to replace AT&T since it is quite redundant with Verizon ...
by Day9
Fri Mar 06, 2015 5:24 pm
 
Forum: Investing - Theory, News & General
Topic: New DOW Component
Replies: 40
Views: 2575

Re: Taylor Larimore Honored

Here is the compilation of Taylor's Investment Gems -- an extremely valuable resource.

Thank you, Taylor.
by Day9
Mon Mar 02, 2015 9:12 pm
 
Forum: Investing - Theory, News & General
Topic: Taylor Larimore Honored
Replies: 59
Views: 4874

Re: ...it is madness to risk losing what you need in pursuin

According to firecalc.com a 3.7% withdrawal rate succeeded in 99% of historical scenarios with many of them leaving a a hefty legacy. Why would someone go for an annuity?
by Day9
Mon Mar 02, 2015 4:42 pm
 
Forum: Investing - Theory, News & General
Topic: ...it is madness to risk losing what you need in pursuing wh
Replies: 48
Views: 5053

Re: Yale Endowment Report 2014

Look at Page 13 of the report. Is this saying that the return of the yale portfolio returned less than the educational institution mean? Yale is more heavily invested in what we would deem risky (Real estate and PE) vs the other which has more us/foreign equity and bonds. Those are just asset alloc...
by Day9
Sun Mar 01, 2015 11:30 pm
 
Forum: Investing - Theory, News & General
Topic: Yale Endowment Report 2014
Replies: 45
Views: 4474

Re: Yale Endowment Report 2014

How can they get 36.1% annualized returns over a 20-year period on private equity!? Wow that is impressive! :greedy
by Day9
Sun Mar 01, 2015 9:59 pm
 
Forum: Investing - Theory, News & General
Topic: Yale Endowment Report 2014
Replies: 45
Views: 4474

Re: ERs cut on VT, VNQI and several others

I'm still waiting for Total World Stock to gain an Admiral Share class fund or for the ETF VT to drop expenses to VTI/VXUS levels. Furthermore I hear that Total World Stock holds far fewer securities than VTI+VXUS. I wish I could have a one-fund equity portfolio but until these two issues are addres...
by Day9
Sun Mar 01, 2015 9:57 pm
 
Forum: Investing - Theory, News & General
Topic: ERs cut on VT, VNQI and several others
Replies: 3
Views: 792

Re: Thought for the Day: Invest Logically

Live long and prosper, everybody.
by Day9
Fri Feb 27, 2015 11:03 pm
 
Forum: Investing - Theory, News & General
Topic: Thought for the Day: Invest Logically
Replies: 18
Views: 2011

Re: Not "Staying the Course"

If the PE ratios rose to extreme levels as during the tech bubble, I would probably add/transfer more to bonds. I am not sure if this is a break in "staying the course" or simple rebalancing. I cannot envision panicking because of a market drop. Did not happen in 1987, 2000, or 2008/9. IM...
by Day9
Fri Feb 27, 2015 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: Not "Staying the Course"
Replies: 40
Views: 4876

Re: Roth and REITs

by Day9
Fri Feb 27, 2015 3:54 pm
 
Forum: Investing - Theory, News & General
Topic: Roth and REITs
Replies: 5
Views: 755

Re: Why Bonds With 20 Year Horizon?

Diversifying across asset classes may provide better risk-adjusted returns. RETURN IS RETURN IS RETURN................ YOU CAN'T SPEND THE "RISK-ADJUSTMENT". By holding riskless assets in addition to your volatile investments, or leveraging up the investments, you can have higher expected...
by Day9
Fri Feb 27, 2015 4:30 am
 
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 70
Views: 4726

Re: Safe Withdrawal Rate as it relates to Size of Portfolio

Just to preempt any confusion: The 4% rule comes from a study that showed if one withdrew 4% of his portfolio in his first year of retirement, then continued to withdraw this dollar amount adjusted for inflation in subsequent years, he would not outlive his money in 95% of 30-year historical scenari...
by Day9
Thu Feb 26, 2015 2:34 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate as it relates to Size of Portfolio
Replies: 25
Views: 2783

Re: Why Bonds With 20 Year Horizon?

Diversifying across asset classes may provide better risk-adjusted returns.
by Day9
Tue Feb 24, 2015 1:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 70
Views: 4726

Re: What is Risk?

I'm curious how all these different interpretations of risk relate to expected return. Everyone knows you can't have high expected returns without high risk but what interpretation of risk does this assume? To what extent is this common sense true when applied to different interpretations of risk?
by Day9
Fri Feb 20, 2015 6:54 pm
 
Forum: Investing - Theory, News & General
Topic: What is Risk?
Replies: 27
Views: 1407

Re: Bill Gross majority shareholder in his own fund?

If the manager doesn't own enough of his fund people will complain he doesn't eat his own cooking. Gross owns a lot of his own fund and you complain that it clouds his judgment. At what point would you be satisfied? Why do you think owning a large stake in his own fund would cloud his judgment? Isn'...
by Day9
Mon Feb 09, 2015 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross majority shareholder in his own fund?
Replies: 20
Views: 1450

Re: Best Small Cap Value Funds

Here is one firm's evaluation of domestic Sm Val funds. It recommends RZV

http://www.altruistfa.com/USsmallcapvaluefunds.htm
by Day9
Fri Feb 06, 2015 2:42 pm
 
Forum: Investing - Theory, News & General
Topic: Best Small Cap Value Funds
Replies: 43
Views: 4366

Re: Bill Gross warns about bonds. Are you worried?

scone wrote:I'm not worried about interest rate increases, particularly. The thing that kills bonds is inflation. Except for TIPS, apparently.


TIPS weren't around during the high inflation period of the 70s so I would say your "apparently" is apt.
by Day9
Wed Feb 04, 2015 5:51 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross warns about bonds. Are you worried?
Replies: 38
Views: 5157

Re: Define "High tax bracket"

I don't keep up with the Municipal Bond market but how about drawing the line where a Municipal bond will have a better yield than the after-tax yield of a taxable bond with similar risks?
by Day9
Tue Feb 03, 2015 1:29 am
 
Forum: Investing - Theory, News & General
Topic: Define "High tax bracket"
Replies: 45
Views: 3808

Re: Shiller: "Become a smart beta person"

What does "smart beta" mean in this context?
by Day9
Mon Feb 02, 2015 2:50 am
 
Forum: Investing - Theory, News & General
Topic: Shiller: "Become a smart beta person"
Replies: 20
Views: 2627

Re: Why not a 2 fund portfolio like Bogle suggests

Part of me wonders if some people would benefit from a 2 or 3 fund portfolio but they have spent so many hours researching investment strategies that they will feel they wasted their time if they choose something so simple.
by Day9
Wed Jan 28, 2015 8:24 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a 2 fund portfolio like Bogle suggests
Replies: 36
Views: 4060

Re: Any reason NOT to buy treasuries individually?

roll yield https://www.bogleheads.org/forum/viewtopic.php?f=10&t=132601&hilit=riding+the+yield+curve That just means selling a bond before maturity and buying a fresh one. Like buying 10-year bonds, selling it after one year, and then buying another 10-year bond. Is this a free lunch? It lo...
by Day9
Wed Jan 28, 2015 7:36 pm
 
Forum: Investing - Theory, News & General
Topic: Any reason NOT to buy treasuries individually?
Replies: 17
Views: 1510

Re: Any reason NOT to buy treasuries individually?

Any major brokerage will allow you to buy new auction treasuries for free, so you could save some money. But, a cheap fund is just easier. By the way, David Swensen doesn't actually recommend long-term treasuries. There are several articles about him that seem to have made this error, but he recomm...
by Day9
Wed Jan 28, 2015 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: Any reason NOT to buy treasuries individually?
Replies: 17
Views: 1510

Any reason NOT to buy treasuries individually?

Is there any reason NOT to buy treasuries individually? Bond funds are great for other kinds of bonds because they allow you to diversify among issuers but this is not necessary for treasuries. Expense ratios on treasury funds are low (Vanguard Long Term Treasury Fund Investor is 0.2%, admiral has $...
by Day9
Wed Jan 28, 2015 4:38 pm
 
Forum: Investing - Theory, News & General
Topic: Any reason NOT to buy treasuries individually?
Replies: 17
Views: 1510

Re: Vanguard Treasury Funds

. Vanguard has currently reduced the GSE in its treasury funds, but since they are active funds they can hold a portion. Please see this old post: http://www.bogleheads.org/forum/viewtopic.php?f=10&t=83295 Vanguard has TREASURY Funds (Like VUSUX Long term Treasury) and GOVERNMENT BOND Funds (li...
by Day9
Wed Jan 28, 2015 1:19 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 2120

Re: What mutual fund companies do you use?

Vanguard and DFA
by Day9
Wed Jan 28, 2015 4:02 am
 
Forum: Investing - Theory, News & General
Topic: What mutual fund companies do you use?
Replies: 63
Views: 3249

Re: Vanguard's government bond index funds

I'm with pascalswager on this and I actually just buy my treasuries individually. Treasuries are more liquid and are more of a safe haven asset.
by Day9
Wed Jan 28, 2015 3:41 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 2120

Re: WHAT EXPERTS SAY ABOUT

Thank you, Taylor. Happy birthday!
by Day9
Sun Jan 25, 2015 5:40 pm
 
Forum: Investing - Theory, News & General
Topic: What Experts Say [about various investing topics]
Replies: 51
Views: 3741

Re: Factors and zero-sum investing

It's a Modern Portfolio Theory idea. Value and Momentum are shown to have relatively weak correlation with each other while both providing good returns in the past. If you diversify across asset classes and factors that don't have perfect correlation then you can get higher returns with lower risk. ...
by Day9
Fri Jan 23, 2015 6:35 pm
 
Forum: Investing - Theory, News & General
Topic: Factors and zero-sum investing
Replies: 58
Views: 3183

Re: Using TLT to hedge

Why is recent TLT doing better than VBTLX? TLT effective duration is 18 years compared to VBLTX 14 years. Having a higher duration makes you more sensitive to interest rate moves and long term rates have been going down. TLT holds exclusively treasuries while VBTLX, Vanguard Long Term Bond, holds c...
by Day9
Fri Jan 23, 2015 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using TLT to hedge
Replies: 13
Views: 1309
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