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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 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: When should someone "not stay the course"?
Replies: 43
Views: 2330

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 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: CNN: 5 investing secrets of the wealthy.
Replies: 19
Views: 2983

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 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: 'Play Money' - why 5%?
Replies: 42
Views: 1597

Re: What's Your Takeaway from 2014 High Valuation

Bogle is a market timer and a yield chaser.:) And both of those can be legit strategies. There is no point in giving those strategies fancy names unless you need them to feel better about the actions you take. People worry too much about ideological purity. Stocks too high to let you sleep at night...
by Day9
Sun Sep 28, 2014 12:19 am
 
Forum: Investing - Theory, News & General
Topic: What's Your Takeaway from 2014 High Valuation
Replies: 52
Views: 4054

Re: Will Investment Returns Ever Revert to "Normal"?

I would cite Bill Gross' book "The New Normal" but...
by Day9
Sat Sep 27, 2014 10:20 pm
 
Forum: Investing - Theory, News & General
Topic: Will Investment Returns Ever Revert to "Normal"?
Replies: 56
Views: 4253

Re: Paul Merriman: DFA Better Than Vanguard

Here is one comparison between DFA and Vanguard

http://www.altruistfa.com/dfavanguard.htm
by Day9
Sat Sep 27, 2014 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: Paul Merriman: DFA Better Than Vanguard
Replies: 13
Views: 1929

Re: What is your best estimate of the SWR (Safe Withdrawal R

I've seen someone post here that a 4% WR succeeded in 95% of historical scenarios and a 3.74% WR succeeded in 100% of historical scenarios.
by Day9
Fri Sep 26, 2014 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: What is your best estimate of the SWR (Safe Withdrawal Rate)
Replies: 77
Views: 3765

Re: Pimco Total Return - Keep or Sell

I would like to take this moment to encourage the people out there with very high stock allocations and tilts overweighing SmVal and Emerging Markets to make all of their fixed income default-free instruments like CDs, I-bonds and especially long term Treasuries. Default/Credit Risk is affected by t...
by Day9
Fri Sep 26, 2014 1:32 pm
 
Forum: Investing - Theory, News & General
Topic: Pimco Total Return - Keep or Sell
Replies: 28
Views: 2230

Re: Buy PCRIX today?

Larry has said that if you invest in CCF you may want to take on more duration risk because these two risk factors complement each other well. While PCRIX has gone down, Long Term Bonds have done well so if you took his advice you would be in decent shape.
by Day9
Tue Sep 23, 2014 6:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Buy PCRIX today?
Replies: 31
Views: 2608

Re: Lack of liquidity in corporate bonds hits index funds

It doesn't matter to me because the only fixed income I hold is default-free securities like Treasuries and CDs. The fixed income portion of my portfolio has a 0% expense ratio.

Most of the premium of corporate bonds is explained by same factors that influence equity returns
by Day9
Tue Sep 23, 2014 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: Lack of liquidity in corporate bonds hits index funds
Replies: 12
Views: 1873

Re: Could one theoretically be 100% stocks your whole life?

Buffet is going to put his wife on 90% S&P index fund, perhaps the one at Vanguard, and 10% short-term government bond fund. Search this subreddit for 100% stocks it has been discussed before. Adding just a 10% allocation to bonds reduces a good amount of risk without affecting expected return t...
by Day9
Tue Sep 23, 2014 2:09 am
 
Forum: Investing - Theory, News & General
Topic: Could one theoretically be 100% stocks your whole life?
Replies: 43
Views: 2745

Re: The only risk of leverage is selling at the bottom

Margin rates are floating rates . Sure Interactive Brokers offers 1.58% now but they will likely raise the rates during a time when you want to ride out an unrealized loss. You have virtually 0% chance of being completely wiped out if you follow Boglehead principals. If you leverage by buying on mar...
by Day9
Tue Sep 23, 2014 1:58 am
 
Forum: Investing - Theory, News & General
Topic: The only risk of leverage is selling at the bottom
Replies: 46
Views: 1529

Re: Why I sold my gold, and would sell commodities too

OP isn't a genius for discovering that stocks have better long term returns than gold or CCFs. You should not look at an investment on its own, you should look at it in the context of a whole portfolio. This should be the Boglehead's first stop on this issue: The Great Commodity Debate - Larry Swedr...
by Day9
Mon Sep 22, 2014 8:28 pm
 
Forum: Investing - Theory, News & General
Topic: Why I sold my gold, and would sell commodities too
Replies: 56
Views: 4020

Re: Does Equity Risk Decrease over Time?

Here is a paper from UC Irvine that shows how the idea of "time diversification" in equity markets is flawed.

The Long-Term Risks of Global Stock Markets

http://merage.uci.edu/~jorion/papers/risk.pdf
by Day9
Mon Sep 22, 2014 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: Does Equity Risk Decrease over Time?
Replies: 51
Views: 2617

Re: Leeraar's Three-Holding Portfolio

If you're going to go through the trouble of using some kind of Life Strategy Tax Efficiency Barbell you may as well use the 3-fund portfolio so you can stick TBM in the tax advantaged accounts, making for more optimal tax efficiency, and making you eligible for admiral shares. In today's low intere...
by Day9
Sun Sep 21, 2014 6:41 am
 
Forum: Investing - Theory, News & General
Topic: Leeraar's Three-Holding Portfolio
Replies: 27
Views: 2131

Re: Vanguard web site now showing daily change as %

Just keep in mind that if something goes up 1% then goes down 1% it is 99.99% what it used to be. And if it goes up 5% then down 5% it is 99.75% what it used to be. When it showed dollars you didn't have this property.

Anyone remember when stock information used to be in fractions like 3/8, 1/4, etc?
by Day9
Sun Sep 21, 2014 5:20 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard web site now showing daily change as %
Replies: 2
Views: 643

Re: What evidence would prove the Boglehead mentality wrong?

The basic laws of mathematics would have to be proven incorrect? There is a non-zero possibility of this occurring though. It's not that 1+1 would cease to equal 2. But that we may discover that the mathematical construct of "1 + 1" simply doesn't reflect anything in reality as nothing is...
by Day9
Fri Sep 19, 2014 2:51 pm
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 109
Views: 7631

Vanguard Reaches $3 Trillion In Assets, matching Hedge Funds

Vanguard Reaches $3 Trillion In Assets, Matching Entire Hedge-Fund Industry

Courtesy Kirsten Grind & Wall Street Journal

http://blogs.wsj.com/moneybeat/2014/09/18/vanguard-reaches-3-trillion-in-assets-matching-entire-hedge-fund-industry/
by Day9
Fri Sep 19, 2014 1:41 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Reaches $3 Trillion In Assets, matching Hedge Funds
Replies: 12
Views: 1446

Re: Left tail portfolio - 70% bonds. Good idea?

Please, explain it to me again how individual bonds don't appreciate in price when rates lower but bond funds do. Case in point. Let's take Vanguard intermediate term treasury fund VFITX and look at 2008. The fund returned 4.2% for the year from dividends. It also returned an additional 9.13% becau...
by Day9
Thu Sep 18, 2014 11:57 pm
 
Forum: Investing - Theory, News & General
Topic: Left tail portfolio - 70% bonds. Good idea?
Replies: 38
Views: 3181

Re: Left tail portfolio - 70% bonds. Good idea?

Of course you can sell individual bonds. You are not forced to hold them to maturity. What are you trying to say with "You don't get the capital appreciation"? You do. The treasury market is extremely liquid. The hassle amounts to a few mouse clicks every year or so. There are no commissi...
by Day9
Wed Sep 17, 2014 11:14 pm
 
Forum: Investing - Theory, News & General
Topic: Left tail portfolio - 70% bonds. Good idea?
Replies: 38
Views: 3181

Re: Left tail portfolio - 70% bonds. Good idea?

I don't think the hassle of individual bonds is worth it. Plus you don't get the capital appreciation of a bond that you'll get in a financial crisis which will effectively allow you to buy more shares of depressed stocks thru rebalancing. Bond fund gives better liquidity right when liquidity is ki...
by Day9
Wed Sep 17, 2014 10:08 pm
 
Forum: Investing - Theory, News & General
Topic: Left tail portfolio - 70% bonds. Good idea?
Replies: 38
Views: 3181

Re: How often do YOU rebalance and when?

I rebalance with new contributions.


I never trigger a taxable event just to rebalance. I don't think it is ever worth it.
by Day9
Wed Sep 17, 2014 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: How often do YOU rebalance and when?
Replies: 39
Views: 1977

Re: Left tail portfolio - 70% bonds. Good idea?

I believe Larry addresses this idea thoroughly in his recent book Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns With Less Volatility
by Day9
Wed Sep 17, 2014 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: Left tail portfolio - 70% bonds. Good idea?
Replies: 38
Views: 3181

Re: Proposed: 35% Maximum Bond Allocation, For Life

65/35 is not a radical allocation and is fine if the investor can stay the course. It is basically the same as the ubiquitous 60/40 portfolio. However you are suggesting locking in this 65/35 allocation instead of the traditional approach of gliding from say 60/40 to 40/60 as one enters his twilight...
by Day9
Tue Sep 16, 2014 6:50 pm
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3765

Re: How much you need to save as multiple of salary

I work for a large company that is often called a leader in retirement packages. They have stopped matching on each paycheck and instead match in one lump sum at the end of the year. If you are no longer employed by that time you do not get the match for that year. You lose out on the time-value of ...
by Day9
Mon Sep 15, 2014 9:40 pm
 
Forum: Investing - Theory, News & General
Topic: How much you need to save as multiple of salary
Replies: 51
Views: 6311

Re: An Interesting Correlation

Why would you pay an expense ratio to hold a treasury fund? There is no diversifying among issuers with treasury funds like there is with corporates. iShares participates in security lending in their treasury funds (including TLT). They claim that this boosts returns but it is not enough to countera...
by Day9
Mon Sep 15, 2014 2:13 am
 
Forum: Investing - Theory, News & General
Topic: An Interesting Correlation
Replies: 22
Views: 2059

Re: Share your Hot-Rod Portfolio

Why max 8 funds? Is this a hot rod contest or a Boy Scouts Pinewood Derby?
by Day9
Fri Sep 12, 2014 10:59 pm
 
Forum: Investing - Theory, News & General
Topic: Share your Hot-Rod Portfolio
Replies: 55
Views: 4250

Re: Are Mid Caps the NEW Small Caps

Check out this post by Mel Lindauer with comments from Larry Swedroe:

http://socialize.morningstar.com/NewSocialize/forums/p/27802/27802.aspx#27802
by Day9
Wed Sep 10, 2014 4:15 pm
 
Forum: Investing - Theory, News & General
Topic: Are Mid Caps the NEW Small Caps
Replies: 15
Views: 1716

Re: Socially Irresponsible Fund

Philip Morris did a great benefit to humanity by definitively proving that an unrelated 3rd factor causes someone to want to smoke, and this unrelated 3rd factor causes someone to get lung cancer, debunking once and for all the myth that smoking causes lung cancer. Truly Philip Morris and Altria Gro...
by Day9
Tue Sep 09, 2014 5:19 am
 
Forum: Investing - Theory, News & General
Topic: Socially Irresponsible Fund
Replies: 16
Views: 1482

Re: Do you consider your emergency fund part of your portfol

No because my emergency fund is either a flat $X thousand dollars or a certain number of months' worth of living expenses. I do not allocate a percentage of my portfolio to "emergency fund". Like a previous poster said, my emergency fund is not touched when I rebalance my portfolio.
by Day9
Mon Sep 08, 2014 9:17 pm
 
Forum: Investing - Theory, News & General
Topic: Do you consider your emergency fund part of your portfolio?
Replies: 50
Views: 3053

Re: Why does the stock market "always go up"? Will this pers

Question for most people here with optimistic answers - the Japanese economy is still running. Large Japanese companies are still selling things all over the world. However, the Nikkei is still more than 50% below its 1990 highs. It is currently at 1986 levels. What is "long term" to you?...
by Day9
Mon Sep 08, 2014 2:44 am
 
Forum: Investing - Theory, News & General
Topic: Why does the stock market "always go up"? Will this persist?
Replies: 42
Views: 3842

Re: How is tilting any different that active value investing

Some Bogleheads only advocate passive investing instrumentally to achieve their goals and values of

1. Low Cost

2. Low Turnover

3. Broad diversification

Some tilters argue that tilting increases a portfolio's Diversification of different risk factors
by Day9
Fri Sep 05, 2014 2:00 pm
 
Forum: Investing - Theory, News & General
Topic: How is tilting any different that active value investing
Replies: 55
Views: 2571

Re: Let me get this straight about SCV & factor diversificat

Almost any small group of stocks will be more diversified in terms of the number of factors because of the way factors are defined. Factors, except for beta, are defined such that the market always has a zero loading, so it's almost a tautology. SCV might out-perform the total market. It might even...
by Day9
Thu Sep 04, 2014 10:19 pm
 
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 153
Views: 9172

Re: 100% Stock Thread Collection

Yes margin does more than merely magnify risks. It introduces new risks as well like the risk of margin call. If your creditor sells all your assets to pay back your debts and you go to 0, you cannot participate in any recovery. You are dead, Game Over. It is basically impossible scenario for your p...
by Day9
Wed Sep 03, 2014 1:12 am
 
Forum: Investing - Theory, News & General
Topic: 100% Stock Thread Collection
Replies: 93
Views: 5398

Re: "3 Investments Retirees Don't Really Need"

Good interview! It could just as well be titled, "3 Investments Investors Don't Really Need." :) I agree with you but I would also say that the role of bonds in a retiree's portfolio is quite different than that of a young accumulator's. It is more important for bonds to be denominated in...
by Day9
Tue Sep 02, 2014 11:42 pm
 
Forum: Investing - Theory, News & General
Topic: "3 Investments Retirees Don't Really Need"
Replies: 7
Views: 1726

Re: Why is REIT only sector fund recommended in slice & dice

Keep in mind that about 7 years ago a Boglehead found that funds like Vanguard Small Cap Value (VBR) was 15% REIT so depending on how deep you tilt you may be overexposing yourself to REIT if you devote a percentage of your portfolio to them. However other funds like DFA's small cap value held much ...
by Day9
Tue Sep 02, 2014 11:36 pm
 
Forum: Investing - Theory, News & General
Topic: Why is REIT only sector fund recommended in slice & dice?
Replies: 113
Views: 7894

Re: Is now a good time to buy bonds?

The 10 year treasury is about 2.5%

The 10 year German government bund is about 1.5%

The 10 year Japanese government bond is about 0.5%

Don't tell me "Rates have nowhere to go but up!"
by Day9
Tue Sep 02, 2014 11:02 pm
 
Forum: Investing - Theory, News & General
Topic: Is now a good time to buy bonds?
Replies: 18
Views: 1942

Re: International allocation

33% of my equity is international because I find the 2:1 ratio keeps my portfolio simple and easier to maintain, stay the course, and rebalance.
by Day9
Fri Aug 29, 2014 6:41 pm
 
Forum: Investing - Theory, News & General
Topic: International allocation
Replies: 81
Views: 4922

Do you need REITs if you tilt to SCV? International REITs?

The Collective Thoughts stickied post links to these two threads: real estate investment trusts don’t add much unique risk and REITs in value funds . At the time of that post (about 7 years ago) Vanguard's Small Cap Value fund was about 15% REIT but DFA's SmVal fund was only 0.5% REIT (Thanks Robert...
by Day9
Fri Aug 22, 2014 1:24 am
 
Forum: Investing - Theory, News & General
Topic: Do you need REITs if you tilt to SCV? International REITs?
Replies: 0
Views: 293

Re: an interesting chart [Asset correlation matrix]

past correlations do not guarantee future correlations.
by Day9
Wed Aug 20, 2014 3:32 am
 
Forum: Investing - Theory, News & General
Topic: an interesting chart [Asset correlation matrix]
Replies: 3
Views: 797

An Honest Stock Market Update

[Thread merged, see below. --admin LadyGeek]

[Content in excess of copyright fair use removed by admin LadyGeek]

http://www.fool.com/investing/general/2014/08/12/an-honest-stock-market-update.aspx
by Day9
Mon Aug 18, 2014 5:16 pm
 
Forum: Investing - Theory, News & General
Topic: An Honest Stock Market Update - A good laugh
Replies: 17
Views: 2935

Re: Interesting BRK tidbit

Who cares? It's a meaningless milestone. :confused
by Day9
Thu Aug 14, 2014 6:26 pm
 
Forum: Investing - Theory, News & General
Topic: Interesting BRK tidbit
Replies: 16
Views: 1952

Re: Beat The Street's Permanent Portfolio

Beat The Street wrote:
placeholder wrote:
Beat The Street wrote:Because you can keep this allocation permanently.

You can keep any allocation permanently.


You're like a broken needle, you're missing the point.


Could you spell it out for us please?
by Day9
Wed Aug 13, 2014 8:40 pm
 
Forum: Investing - Theory, News & General
Topic: Beat The Street's Permanent Portfolio
Replies: 36
Views: 3137

Re: Can a single investor influence the market?

Some famous investor tweets "AAPL announcing something big during the next earnings report". This has moved the stock price in the past.
by Day9
Wed Aug 13, 2014 6:23 pm
 
Forum: Investing - Theory, News & General
Topic: Can a single investor influence the market?
Replies: 20
Views: 1733

Re: WSJ: Who are your investment role models?

You guys, the Bogleheads, are my investment role models :sharebeer
by Day9
Tue Aug 12, 2014 7:49 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ: Who are your investment role models?
Replies: 6
Views: 671

Re: The Boglehead-prisoner’s dilemma.

If you ban us from choosing paper bonds or stock certificates, and we can't trust anybody, we don't have much else of a choice do we?

A mix of American Gold Eagles, Platinum Canadian Maple Leafs, Palladium Canadian Maple Leafs, and some $100 bills.

What else is there even?
by Day9
Thu Jul 31, 2014 1:42 am
 
Forum: Investing - Theory, News & General
Topic: The Boglehead-prisoner’s dilemma.
Replies: 33
Views: 5472

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: 43
Views: 4322

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: 661
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