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Re: Stocks: losing money for 20-30 years not uncommon

It's almost as if investing involves risk, including the risk of loss of principal. :oops:
by Day9
Tue Jul 29, 2014 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: losing money for 20-30 years not uncommon
Replies: 14
Views: 1344

Saudi to Open Up $531 Billion Stock Market to Foreigners

http://www.businessweek.com/news/2014-07-21/saudi-to-open-up-531-billion-stock-market-to-foreigners Saudi Arabia will open up its stock market to international investors in the first half of 2015, giving foreigners access to the Arab world’s biggest stock market for the first time. The move is a “g...
by Day9
Tue Jul 22, 2014 4:59 am
 
Forum: Investing - Theory, News & General
Topic: Saudi to Open Up $531 Billion Stock Market to Foreigners
Replies: 1
Views: 631

Re: [Poll] Are you more risk averse than average?

I'm in my 20's so I am more risk tolerant than the average investor. But my impression of investors my age is that they are usually 100% stock, sometimes in only a handful of individual stocks. I am much more risk averse than that person.
by Day9
Sun Jul 13, 2014 11:56 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Are you more risk averse than average?
Replies: 36
Views: 2627

Re: Financial Advice for People Who Aren’t Rich

Daave, I thought you needed at least one reply. You may have set a record with almost OVER 700 views and no replies. Thanks for the list, I think it's useful--and post worthy :happy Paul Maybe it's because he almost just pasted a link and offered no summary and no analysis. Does this forum have a r...
by Day9
Sat Jul 12, 2014 6:39 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Advice for People Who Aren’t Rich
Replies: 9
Views: 3050

Re: WSJ article on overvalue and lower returns

Counter argument: They aren't overvalued. This is the "new normal". Obama in 2009: "We now know a financial crisis on one country can affect the whole world... Our prosperity must be shared" [among the global wealthy elite] In this new world of globalization, the foreign rich are...
by Day9
Sat Jul 12, 2014 6:37 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on overvalue and lower returns
Replies: 6
Views: 1429

Re: If you wouldn't buy (stocks), then you must sell

I own $X in stocks. You are asking me if I had $X in cash instead would I buy stocks?

My answer: I would follow my Investment Policy Statement and invest in the asset allocation it describes.
by Day9
Wed Jul 02, 2014 6:38 pm
 
Forum: Investing - Theory, News & General
Topic: If you wouldn't buy (stocks), then you must sell
Replies: 32
Views: 3013

Re: Worth it to eliminate counterparty risk with Treasuries?

P.S: I hold mine in a fund (VFIUX) and don't think twice about it. The expense ratio is 0.1% and the SEC yield 1.64%. 0.1%/1.74% means you are giving up 5%-6% of the returns. And all Bogleheads know that costs compound and over a long term the fees could eat up a large portion of your returns. In w...
by Day9
Fri Jun 27, 2014 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: Worth it to eliminate counterparty risk with Treasuries?
Replies: 17
Views: 1060

Worth it to eliminate counterparty risk with Treasuries?

Hi Bogleheads, What is the best way to own Treasuries in your portfolio? With Treasuries, there is no need to diversify among issuers which is one of the primary reasons for using a bond fund. Given this, it seems pointless to pay an expense ratio for a fund like Vanguard's Intermediate Treasury VFI...
by Day9
Fri Jun 27, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Worth it to eliminate counterparty risk with Treasuries?
Replies: 17
Views: 1060

Re: Is it impossible to buy individual foreign treasuries?

I have never investigated buying foreign government debt. But why would you want unhedged positions? Vanguard claims there is no payoff, and lots of risk. I have not been interested enough to read up on it beyond that, but the V argument seemed to make sense. If I am buying them directly then they ...
by Day9
Fri Jun 20, 2014 10:11 pm
 
Forum: Investing - Theory, News & General
Topic: Is it impossible to buy individual foreign treasuries?
Replies: 9
Views: 483

Re: The importance of starting to invest early

Good for you, Day9. Keep it up and you'll be financially independent long before your contemporaries who are just living for today. Thank you Mel I am a big fan. It was not a big sacrifice for me to save this much though. My coworkers are much older than me and my peers were not so lucky as me and ...
by Day9
Fri Jun 20, 2014 8:48 pm
 
Forum: Investing - Theory, News & General
Topic: The importance of starting to invest early
Replies: 9
Views: 1741

Re: Best Fixed Income Investment - Morningstar article

The best fixed income investment depends on its role in your portfolio. For millenials with 90% stock, 10% bond portfolios, 5-year CDs are not the best investment for them. The role of bonds for this 90/10 young accumulator is not to dilute the magnitude of a stock crash but to add meaningful divers...
by Day9
Fri Jun 20, 2014 8:39 pm
 
Forum: Investing - Theory, News & General
Topic: [Morningstar article] the best fixed income investment
Replies: 55
Views: 3761

Re: The importance of starting to invest early

I discovered Bogleheads two years ago when I was 24 with nothing in retirement accounts. Since then I have been maxing Roth IRA and 401k saving at least $22k per year :beer
by Day9
Fri Jun 20, 2014 8:34 pm
 
Forum: Investing - Theory, News & General
Topic: The importance of starting to invest early
Replies: 9
Views: 1741

Is it impossible to buy individual foreign treasuries?

Hi Bogleheads, Recently (many months ago but recent compared to the lifetime of this community) Vanguard has cosigned the idea of diversifying your bond position globally by adding International Bond Fund to their target date and life strategies funds-of-funds. This has been met with diverse opposit...
by Day9
Fri Jun 20, 2014 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: Is it impossible to buy individual foreign treasuries?
Replies: 9
Views: 483

Re: >$1MM saved -- thank you BogleHeads!

This is an occasion worthy of not only praise but also CELEBRATION!

Take your wife/family out for a nice dinner or whatever they like to do to celebrate. Congratulations! I admire you for staying disciplined for the past 16 years and beyond. I want to become like you one day (currently mid 20s)
by Day9
Sun Jun 15, 2014 11:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: >$1MM saved -- thank you BogleHeads!
Replies: 21
Views: 3408

Re: Which Vanguard Short Treasury Fund

Why not buy your treasuries directly? The expense ratio is small but so is the yield and fees are eating up a significant % of your returns. READ THE PROSPECTUS. I wanted long term treasuries so I checked out VGLT. It contains lots of agency bonds that I do not want like Israeli War Bonds. Know what...
by Day9
Wed Jun 11, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: Which Vanguard Short Treasury Fund
Replies: 34
Views: 2109

Re: Swenson question

Swenson suggests a healthy allocation to TIPS to serve the role of protecting against inflation. As others have pointed out, TIPS achieve this much better than gold for retirement portfolios. Swenson does not recommend any commodities to individuals. The closest thing he recommends to individuals is...
by Day9
Mon Jun 02, 2014 4:17 pm
 
Forum: Investing - Theory, News & General
Topic: Swenson question
Replies: 10
Views: 1073

Re: Bonds - Throw it all on the table!!!

I own VUSUX Vanguard Long Term Government Admiral TLT iShares 20+ year Treasury Bond ETF I draw inspiration from the PP crowd and ideally I would own newly issued Long Treasury Bonds directly, perhaps even on treasurydirect.gov with no counterparty risk. I would then sell them every 10 years (or wha...
by Day9
Sat May 31, 2014 6:03 pm
 
Forum: Investing - Theory, News & General
Topic: Bonds - Throw it all on the table!!!
Replies: 135
Views: 14714

Why have Treasury Bonds been such good diversifiers lately?

http://i.imgur.com/JVtzVl4.png This is a 10 year chart that compares 20+ year Treasury Bonds, Total Stock, and Total Bond. Why have Treasury Bonds been such good diversifiers to US Stocks lately? They seem to consistently zig when Total Stock zagged over this 10 year period. Total Bond on the other...
by Day9
Sat May 31, 2014 3:05 am
 
Forum: Investing - Theory, News & General
Topic: Why have Treasury Bonds been such good diversifiers lately?
Replies: 8
Views: 1012

Re: Are longer duration TIPS more sensitive to inflation?

They would likely be more sensitive to unexpected changes in the inflation rate as that could cause the inflation risk premium in their price to rise or fall. I would also add that rising inflation could increase demand for TIPS in general, pushing real yields down (falling inflation could do the r...
by Day9
Tue May 20, 2014 6:34 pm
 
Forum: Investing - Theory, News & General
Topic: Are longer duration TIPS more sensitive to inflation?
Replies: 10
Views: 531

Are longer duration TIPS more sensitive to inflation?

I know longer duration TIPS are more sensitive to interest rate changes, just like other long duration bonds. But are longer duration TIPS more sensitive to inflation than shorter duration ones? Whenever I try to google search TIPS I just find "Investing tips" :oops:

Cheers :beer
by Day9
Tue May 20, 2014 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: Are longer duration TIPS more sensitive to inflation?
Replies: 10
Views: 531

Re: investor sentiment and its role in asset pricing

On the Boglehead Wiki, we provide many sources that claim that Small cap has higher expected return than Large Cap.

http://www.bogleheads.org/wiki/Historical_and_expected_returns
by Day9
Sat May 17, 2014 4:56 pm
 
Forum: Investing - Theory, News & General
Topic: investor sentiment and its role in asset pricing
Replies: 5
Views: 480

Re: Why 25/25/25/25 in a Permanent Portfolio?

Security and insurance are not trivial costs for storing 100s of thousands to millions of dollars of cash and gold in your house. I don't think the counterparty risk of especially a physical gold ETF is worth worrying about, and they can genuinely add value by pooling security efforts, but even the...
by Day9
Wed May 14, 2014 4:17 pm
 
Forum: Investing - Theory, News & General
Topic: Why 25/25/25/25 in a Permanent Portfolio?
Replies: 31
Views: 2952

Re: Why 25/25/25/25 in a Permanent Portfolio?

Even if you don't follow the Permanent Portfolio there is an interesting technique I have learned from studying it: Hold all your Treasuries directly with the government (treasurydirect.org). A treasury bond is a treasury bond is a treasury bond so treasury funds (and their fees) make absolutely no ...
by Day9
Wed May 14, 2014 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: Why 25/25/25/25 in a Permanent Portfolio?
Replies: 31
Views: 2952

Re: "Smart Beta" ?

The "smart beta" funds that are not merely the result of cheap backtesting and survivor bias boil down to small and value tilts.
by Day9
Wed May 14, 2014 3:35 pm
 
Forum: Investing - Theory, News & General
Topic: "Smart Beta" ?
Replies: 12
Views: 1100

Re: Poll: Do you own Total Bond Market?

I do not. Total Bond Market is not the appropriate bond holding for a young accumulator in his 20's. This person's portfolio might be 90% stock. The role of bonds in this young accumulator's portfolio is different than their role in an older investor's portfolio. Income isn't as important. During st...
by Day9
Wed May 14, 2014 4:35 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Do you own Total Bond Market?
Replies: 50
Views: 4472

Re: Why is Two Fund Less Popular Than Three Fund Portfolio?

Bogleheads have voted with their dollar and value costs over simplicity . We value both, but obviously the lack of admiral shares for Total World Stock drives people away. The people who don't choose Total World Stock because they want to tinker with their asset allocation are not Bogleheads because...
by Day9
Wed May 14, 2014 12:09 am
 
Forum: Investing - Theory, News & General
Topic: Why is Two Fund Less Popular Than Three Fund Portfolio?
Replies: 145
Views: 10480

Re: What if the market doesn't recover for a long period?

It's great that OP understands that stock holders risk their principal even if they intend to hold for "the long term". Here is a relevant Paper from UC Irvine:

The Long Term Risks of Global Stock Markets
by Day9
Wed May 14, 2014 12:05 am
 
Forum: Investing - Theory, News & General
Topic: What if the market doesn't recover for a long period?
Replies: 40
Views: 5637

Re: Smid-Cap stocks

The problem is that just like returns, Correlation (or lack thereof) between 2 assets in the past does not guarantee future correlation The best approach is to choose something simple enough that you can stick with it . For example, slicing your domestic allocation like this: 25% TSM, 25% Large Valu...
by Day9
Wed May 14, 2014 12:00 am
 
Forum: Investing - Theory, News & General
Topic: Smid-Cap stocks
Replies: 17
Views: 1827

Re: Thank you, Taylor Larimore!!!

I've learned so much from this man. I did not know he served freedom and our country that way!
by Day9
Wed May 07, 2014 1:07 am
 
Forum: Investing - Theory, News & General
Topic: Thank you, Taylor Larimore!!!
Replies: 29
Views: 4005

Re: One more article questioning the role of commodities

Bonds are the best diversifier for a broadly diversified portfolio of stocks. But after that, a small allocation to commodities offers real diversification benefits. The commodity-driven firms behave like equities but a broadly diversified holding of commodities (or futures contracts) can offer real...
by Day9
Tue May 06, 2014 11:05 pm
 
Forum: Investing - Theory, News & General
Topic: One more article questioning the role of commodities
Replies: 3
Views: 517

In what ways does a retired person's portfolio differ?

In what ways does a retired person's portfolio differ from a person who has not yet retired, especially a young person? Besides a higher allocation to bonds (perhaps following "age in bonds"), in what other ways should a portfolio for someone who is taking cost-of-living distributions in r...
by Day9
Mon May 05, 2014 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: In what ways does a retired person's portfolio differ?
Replies: 88
Views: 8031

Re: Do you overweight International Small?

I'd likely opt for Vanguard FTSE All-World ex-US Small-Cap Index Fund if VG comes out with an Admiral shares and/or ditches the purchase/redemption fees. Until then, I guess I'm too much of a cheapskate. That's what VSS is for. Well except you're still pretty much paying the purchase fee because of...
by Day9
Thu May 01, 2014 11:49 pm
 
Forum: Investing - Theory, News & General
Topic: Do you overweight International Small?
Replies: 32
Views: 1684

Re: Do you overweight International Small?

What happened to the choice of owning International Explorer AND one of the other types (or both of them)? RM The poll would not allow me to have that many options. The number of combinations was too large. I figured it means the same to me if someone is doing half active, half passive in their sma...
by Day9
Thu May 01, 2014 6:53 pm
 
Forum: Investing - Theory, News & General
Topic: Do you overweight International Small?
Replies: 32
Views: 1684

Re: Do you overweight International Small?

Vanguard offers two Small-Cap international funds - actively managed International Explorer, and passively managed index fund Vanguard FTSE All-World ex-US Small-Cap, available in Investor Shares and as an ETF, ticker VSS. You are totally right. The investor shares fund VFSVX and the ETF are both i...
by Day9
Thu May 01, 2014 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: Do you overweight International Small?
Replies: 32
Views: 1684

Do you overweight International Small?

Domestic small-cap tilts are popular among Bogleheads but I wonder how often we tilt toward small caps in our international allocation? This seems to be less popular. "Smart Beta"/non-cap weighted "index" funds that claim to beat indices usually boil down to a small and/or value ...
by Day9
Thu May 01, 2014 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: Do you overweight International Small?
Replies: 32
Views: 1684

Re: Yet another SWR article - 3% is the new 4%

Whenever we discuss SWR it is assumed that the retiree withdraws 4% (or whatever) during his first year then adjusts for inflation and keeps withdrawing that each and every year. This seems too Ivory Tower and theoretical to me. I think it is more practical to see the research done on variable withd...
by Day9
Thu Feb 27, 2014 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: Yet another SWR article - 3% is the new 4%
Replies: 9
Views: 1092

Re: New Invester age 23

Target date funds are great. So are Vanguard's Total Stock Market and Total International Market index funds.

As a new accumulator, savings rate is much more important than fund selection. Focus your energy on increasing your income and reducing your expenses!
by Day9
Thu Feb 27, 2014 6:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: New Invester age 23
Replies: 19
Views: 1034

Re: MPT, Markowitz, Effective Frontier and Vanguard, NOT!

did i miss it? did OP post his portfolios? or did he just post the backtested restults?
by Day9
Sat Feb 15, 2014 3:49 am
 
Forum: Investing - Theory, News & General
Topic: MPT, Markowitz, Efficient Frontier and Vanguard, NOT!
Replies: 66
Views: 4241

Re: A Simple Portfolio

Regarding Total World Stock Index: When will admiral shares be available? I want to simplify my portfoloio but I can't justify buying this instead of lower cost admiral share Total Stock and Total International
by Day9
Thu Jan 23, 2014 4:05 pm
 
Forum: Investing - Theory, News & General
Topic: A Simple Portfolio [Equity Allocation]
Replies: 39
Views: 2898

Re: A couple thoughts for young accumulators

What do you know that the rest of us don't know? Thirty somethings I know don't bother investing in bonds. Too little return for the risk and they have at least 30 more years to invest. I am retired but don't see a need to hold a healthy amount (whatever that vague term means) in bonds (which are g...
by Day9
Thu Jan 23, 2014 3:17 pm
 
Forum: Investing - Theory, News & General
Topic: A couple thoughts for young accumulators
Replies: 10
Views: 2620

A couple thoughts for young accumulators

I am a young person (mid 20s) who is very much in the accumulation phase. I opted for a 90/10 stock/bond allocation and I've had the following thoughts. Longer term, higher quality bonds offer better diversification benefits in a stock dominated portoflio. Corporates correlate too highly with the ot...
by Day9
Tue Jan 21, 2014 4:35 pm
 
Forum: Investing - Theory, News & General
Topic: A couple thoughts for young accumulators
Replies: 10
Views: 2620

Re: Good Bogleheads Podcasts?

The issue Bogleheads have with Dave Ramsey is that he promises 10% returns by buying expensive actively managed mutual funds. It's a rite of passage for a Boglehead to prove that kind of statement wrong (or at least show convincing evidence against it) Some people have problems with Ramsey's Christi...
by Day9
Thu Jan 16, 2014 5:05 pm
 
Forum: Investing - Theory, News & General
Topic: Good Bogleheads Podcasts?
Replies: 12
Views: 1317

Re: A levered 50/50 portfolio is better than a 90/10 one?

Thanks grayfox for your thoughtful reply that was not just a thoughtless platitude.
by Day9
Sat Nov 23, 2013 11:15 am
 
Forum: Investing - Theory, News & General
Topic: A levered 50/50 portfolio is better than a 90/10 one?
Replies: 43
Views: 4263

A levered 50/50 portfolio is better than a 90/10 one?

According to Modern portfolio theory, it could be better (more reward with less risk) to have a leveraged 50/50 portfolio than a 90/10 unlevered portfolio, depending on the cost of leverage and the covariance between stocks and bonds. Would someone be able to demonstrate a sample, hypothetical cost ...
by Day9
Sat Nov 23, 2013 10:11 am
 
Forum: Investing - Theory, News & General
Topic: A levered 50/50 portfolio is better than a 90/10 one?
Replies: 43
Views: 4263

Re: "Stocks are about to plunge, Wells Fargo warns"

How much dry power cash reserves does Wells Fargo have I wonder? They might benefit from causing a sell off.
by Day9
Fri Sep 20, 2013 5:24 pm
 
Forum: Investing - Theory, News & General
Topic: "Stocks are about to plunge, Wells Fargo warns"
Replies: 33
Views: 5985

I have been a boglehead for 1 year! + Portfolio

Hi Bogleheads, I am here for a portfolio checkup. I am a young investor very much in the accumulation phase. One year ago I decided to adhere to the Boglehead investment philosophy and other ideas I learned in this community. I welcome any kind of question, comment, or suggestion. I have some questi...
by Day9
Thu Sep 19, 2013 8:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: I have been a boglehead for 1 year! + Portfolio
Replies: 3
Views: 1002

Re: Young Investor - Appropriate Weight Towards Small & Mid

^ Sounds like you might benefit from Trev H's work to breakdown LB/LV/SB/SV into the simplest arrangement with the same returns: Ultimate Buy and Hold - 8 slices vs 4 I'd also read also Rodc's work comparing the 3x33 to other configurations, including Trev H's SUBH: Updated figures and results on s...
by Day9
Mon Sep 16, 2013 7:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Young Investor - Appropriate Weight Towards Small & Mid Caps
Replies: 13
Views: 1206

Re: Young Investor - Appropriate Weight Towards Small & Mid

I'm 25. My US equity is split like this:

25% TSM

25% Large Cap Value

25% Small/Mid Cap Blend

25% Small Cap Value

In my 60/30/10, domestic/int'l/bonds portfolio this becomes 15/15/15/15 of my total portfolio. Easy to understand and rebalance.
by Day9
Mon Sep 16, 2013 1:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Young Investor - Appropriate Weight Towards Small & Mid Caps
Replies: 13
Views: 1206
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