Bogleheads.org

A drop in the stock market isn't the only way the P/Es could be corrected. It could be that stocks will simply return 5% annually for the next ten years, still significantly higher than bonds but low enough that the P/Es will slowly drop.

Most people here use low cost, broadly diversified index funds, because historically they have done much better than the average person playing the stock market. Check out this link: http://www.bogleheads.org/wiki/Boglehea ... philosophy

The worst feature of actively managed funds tends to be their cost. Since Wellington has a relatively low ER it should have reasonable performance relative to index funds.

technovelist wrote:I'm not too concerned about this drop, as I expect the price to continue its decade-long rise

If I held an asset class that had maintained abnormally high returns for the last decade, I would be concerned, not comforted. Mean reversion and all.

Check out this page: http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy . Everything on it is important, but in particular look at the section titled "Keep Costs Low", and you will see the massive difference an extra 1% in expenses will have over your lifetime. Also, VUL...

Since increased profitability doesn't seem like a risk I imagine it must be a behavioral phenomenon, but I don't see why people should be adverse to investing in profitable companies. Larry, do you have a feeling for why a profitability premium should persist?

On the other hand, I'm concerned about having too much of my allocation in Singapore's tiny stock market and feel a need to diversify further. I'd be concerned bout that too. The capitalization is probably similar to US microcaps. At some point that risk may outweigh currency risk, but I'm not sure...

Does my asset allocation seem appropriate given the amount of money being invested? No, not really :( Seriously, don't jump the gun with this. Behavioural mistakes like being impulsive are what lose the most money for the average investor. Anyway, you have the right general idea, but 5% bonds and i...

Do you have an IPS?

Read several of the books on the Bogleheads reading list http://www.bogleheads.org/readbooks.htm . After you've done that you will be much better prepared to convince your father. You will also look back in horror at a time when you were preparing to invest even 10% of your trust in high fee active ...

Your age is important here. Looks like you have ~10% in stocks. That's fine if you're in your 90s, but if you're in your 60s it's probably too conservative. I'd use age in bonds as a reasonably conservative upper bound for fixed income.

People who know which penny stocks will make then rich do not need to sell news letters. Speculating on penny stocks is probably always a mistake (unless it's just for fun, in which case don't gamble more than you would at a casino. Your odds are probably worse).

He says that while DFA’s funds cost 25 basis points more, on average, than Vanguard funds, “the smallest investors at Vanguard will pay 70% more for a basic market fund than they would for a comparable DFA fund.” Sooo dishonest :( ... So the "smallest investors", who don't have 10k for TS...

I don't think there is a correct answer here, rolling out is more of an emotional crutch, but perhaps an important one. Think of it this way though: if you had everything invested now, would you sell? If not, then why not put it all in now?

Currently, safe investments lose value to inflation, and thats about it. The exception might be I Bonds, but those don't really help you due to the annual contribution cap.

There may be companies that do better "tilting" funds, but when it comes to total market or large cap blend, no one beats Vanguard.

As others have said, in this case "expect" does not mean "can rely on".

The savings on commission goes into your policy as cash value right away which, in turn reduces the break-even point from 15 years down to 5 years or less. I think "break-even point" is the wrong phrase here. You are referring to the point at which the CSV is equal to the total premiums p...

The drag of an extra 1-2% cost, compounded over 50-60 years, is going to trump any tax advantage WL could possibly offer.

The problem with applying the term "bubble" to bonds is it implies bonds might "pop" like stocks to, and lose 20% in a day or 50% in six months. It seems more likely that bonds will just "deflate" over five to ten years. The difference in the emotional experience of the...

One of the most important philosophies that I associate with Bogleheadism is this: You are probably average. The average investor is best served by investing as if he or she is average. Therefore, you are probably best served by investing as if you are average. Now here's the point many people seem ...

I don't know the exact numbers, but I believe I have read the the median stock return is less than the mean stock return. This is because the downside potential of a stock is limited to 100% loss, where the upside potential is unlimited. As a result, a small fraction of stocks with stellar performan...

You are paying too much for some of your funds. At least get rid of anything with an ER > 0.5, dropping funds > 0.3 would be even better. I also second using the traditional 401(k). You avoid paying your marginal tax rate now (38%), and instead pay your average tax rate in retirement (which could ea...

If it's only $2500 and it helps you sleep at night that sounds fine. In the same way that buying $2500 worth of Beanie Babies would be reasonable, if it gave you peace of mind.

Jfet wrote:Any ripples in the muni bond market? Good time to buy, sell, ignore?

Always a good time to ignore.

cks wrote:Those with minicipal bond holdings need to pay attention.

A long term, buy-hold-and-rebalance investor with diversified mutual funds NEEDS to pay attention to current events? I'm not sure about that...

IMO, the best arguments against a cap weighted domestic/international split are 1) international is still a little more expensive,and 2) currency risk is uncompensated. I'm not saying your approach is wrong, just that there is some merit to the other side.

The usual rule of thumb is to try and assess the largest loss you would be comfortable with (easier said than done), and then hold twice that much stock (this assumes market crashes wont be much worse than a 50% loss). So, if the most you can stomach is a 20% drop in portfolio value, choose a three ...

Morningstar itself did a study using all of its data, which showed (as has been shown many times before) that the only factor that correlates with future success is cost, and that is an inverse correlation. The most likely return for ANY fund is market return for the segment it invests in, minus the...

My intuitive (and non-mathematical) view of risk compounding over time is this: The Dow closed at 14,000 on Friday. I am willing to bet a large sum of money that at close of business day on Monday it will be in the range of 14,000 +/- 200. I would never make that bet on the Dow closing value one ye...

Thank you Alan!

Hi Folks, Sorry for another TurboTax question, but I wanted to be sure before I submitted, and I didn't find what I was looking for using the site search. In 2012, I made both a non-deductible TIRA to Roth IRA conversion, and a After Tax 401(k) to Roth IRA conversion. I received two 1099-Rs, and fol...

Was anyone else surprised that this shows up on a 1040 line labeled "Pensions and annuities"? Does the IRS consider 401(k)s as pensions or annuities, or are they just so slow in updating their forms that they haven't included 401(k)s yet.

So I'm trying to apply this information to the actual value of Vanguard Small Cap Value. My logic could be wrong in a number of places, so please tell me if I'm making a mistake. First, in All About Asset Allocation, Rick gives a conservative estimate of 3% for the SCV premium going forward. However...

So I suppose the question is, what's the Boglehead-y thing to do? Is a bird in hand really worth two in the bush? What if the bird (private investor) represents a 100% chance at a middle-class lifestyle and the bush (IPO) represents a 65% chance at an upper-middle class lifestyle, 30% chance at a m...

Plus, if you look at the morningstar style boxes for the vanguard international value fund you see that there is very little value tilt.

When it comes to tax efficiency, SCV is not terrible, but its also not as good as TSM or TISM. I'd consider keeping all of your SCV in tax advantaged space.

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Will Vanguard be switching Apple from the growth index to the value index?

The crux of the boglehead philosophy is that the best investment strategy for the average investor is to assume you're average. If you're actually far, far above average, then perhaps you will do better investing in individual stocks. You would not gamble your retirement on your ability to play golf...

There is a huge amount of discussion about that here. Check out this link for a basic explanation http://www.bogleheads.org/wiki/Value_Tilting_-_Stock . You could also search for "Value Tilting" in the search box at the top right to get more information.

Both are primarily large cap. The vanguard has a little more emerging markets (14% vs 6%). The biggest difference is probably that the Vanguard fund has a slight value tilt, while the Fidelity fund has a larger growth tilt. When it comes to growth vs value, people here tend to like either balanced f...

Certainly if you had a contrarian response to all of the "how do I avoid European stocks" posts earlier this year you would have made a killing.

Granted, economist Frtiz Meyer's study of industry sector picks and pans from Barron's isn't of PhD thesis quality. I'm not talking about whether the argument is publishable, I'm talking about whether it is sound. Bad arguments are bad, and there's no getting around this. There are a lot of bad arg...

What's the best way to grow cash savings? Currently, you don't. Money that is needed in 2.5 years should be invested in something that is FDIC insured, which will return very little. That's just the price of safety in our current environment.

I can see Akiva's point, and it has nothing to do with doubting your conclusion, its more about being academically rigorous. The conclusion does not necessarily follow from the premises unless you add a premise stating that the average gain from a correct call is less than or equal to the average lo...

frizshelia wrote:*Any* comments/suggestions are very much appreciated. Thank you for your help!! Please ask any questions!

Read "The Four Pillars of Investing" . It will give you a very good holistic view of investing.

Bet it all on red! (the odds of making a good amount of money will probably be favorable relative to your chances in the market)

If you add the expense ratios for each of your funds you will get more responses. That's actually a crucial piece of information. If you could also list some of the lower cost funds available in your 457 that would be better still. Maximum diversification at minimum cost is the name of the game.

Also - if the perceived risk level of REITs is on par with the total stock market index, why do most portfolios only allocate a small percentage to them? Because REITs make up a small fraction of the market. Think of it like this: how much could a large cap index vary from the total market? Not THA...