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Re: In your opinion, who is in a riskier financial position?

Just because you are less risky than someone on the edge of catastrophe, does not mean you are not risky and should not improve your financial position to a more rational position. You also gave person B a $50k increase in Networth over person A in the scenario. Also, many people do not like the id...
by G-Money
Thu Jul 24, 2014 10:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: In your opinion, who is in a riskier financial position?
Replies: 27
Views: 1498

Re: In your opinion, who is in a riskier financial position?

Person A. Person A has MUCH less liquidity. Indeed, it appears Person A only has liquid assets of $5,000, with no ability to borrow. Person B has greater net assets, and more importantly, the assets are liquid. A $20,000 emergency would appear to be disastrous for Person A, but Person B could manage...
by G-Money
Thu Jul 24, 2014 4:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: In your opinion, who is in a riskier financial position?
Replies: 27
Views: 1498

Re: Bond funds- your percentage of intermediate vs. short-te

1. The Vanguard target Retirement Fund has an allocation to short-term TIPS. So do the 2010 and 2015 Target Retirement Funds. 2. I don't have an allocation to short-term bond funds. If you want low- or no-risk fixed income, it has been my experience that CDs and bank savings accounts offer better ra...
by G-Money
Tue Jul 22, 2014 6:24 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond funds- your percentage of intermediate vs. short-term?
Replies: 12
Views: 1113

Re: Joel Greenblatt's "magic formula"

(the web site to utilize per book, so far free) had funny piece on it in the March 07 Personal Finance edition, pg. 10. The editor basically relayed the correspondence of a reader who followed the web site and its numerous choices. The reader's actual results turned out to be quite poor esp. compar...
by G-Money
Mon Jul 21, 2014 9:00 pm
 
Forum: Investing - Theory, News & General
Topic: Joel Greenblatt's "magic formula"
Replies: 22
Views: 5290

Re: how often do you look at your account

DFrank wrote:Quarterly.

Same here. When my paper statements come in the mail.
by G-Money
Mon Jul 21, 2014 10:15 am
 
Forum: Investing - Help with Personal Investments
Topic: how often do you look at your account
Replies: 70
Views: 3554

Re: Question on Vanguard Balanced Funds

The LifeStrategy fund has international stocks and international bonds to go along with the domestic equities and bonds it holds. The Balanced Fund does not.
by G-Money
Tue Jul 08, 2014 10:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question on Vanguard Balanced Funds
Replies: 10
Views: 1204

Re: Want international exposure? You already have it.

I've never understood on what scale you measure "diversification". Is it a linear scale that is a function of the raw number of economic entities I own a piece of? How many large multinational auto companies, pharmaceutical companies, banks, and so forth do I need to own to be "diver...
by G-Money
Mon Jul 07, 2014 10:58 pm
 
Forum: Investing - Theory, News & General
Topic: Want international exposure? You already have it.
Replies: 65
Views: 6326

Re: Want international exposure? You already have it.

Diversification is a simple and practical solution for an uncertain future. If you are certain that international diversification will not provide a material benefit over a US only allocation, then obviously you don't need to diversify internationally. I am not so certain, so I diversify internation...
by G-Money
Mon Jul 07, 2014 9:09 am
 
Forum: Investing - Theory, News & General
Topic: Want international exposure? You already have it.
Replies: 65
Views: 6326

Re: Slice and dice and tilting the market

David Swensen recommends a tilt on the domestic side to REITs, not SCV, and his last recommendation was to split international 60/40 developed/emerging. So that's a slice&dice/tilt that doesn't directly incorporate FF factors. Your portfolio looks like a somewhat simplified version of the Aronso...
by G-Money
Mon Jun 23, 2014 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Slice and dice and tilting the market
Replies: 14
Views: 1051

Re: VAIPX versus VBTLX: compare theorectical expected return

Maybe someone can expound in more detail, but I think, naively, that the expected return of a bond fund is best estimated by the current SEC yield. That would be a nominal yield for total bond and a real yield for TIPS. One would have to reconcile the two by having an expectation for inflation. Yes...
by G-Money
Thu Jun 19, 2014 10:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: VAIPX versus VBTLX: compare theorectical expected return
Replies: 5
Views: 312

Re: VAIPX versus VBLTX: compare theorectical expected return

VBLTX = Vanguard Long-Term Bond Index VBTLX = Vanguard Total Bond Index Assuming OP meant VBLTX, that fund is riskier. It has a longer average duration, so greater term risk. It is about 40% corporates, so more credit risk. And VBLTX invests in nominal bonds, so it has inflation risk that VAIPX obvi...
by G-Money
Thu Jun 19, 2014 9:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: VAIPX versus VBTLX: compare theorectical expected return
Replies: 5
Views: 312

Re: Mortgages/Black Swans/Larry Portfolio/Antifragility

If you want to make A and B more similar in risk, if you assume that stocks and real estate are equally risky (which you appear to do in the OP), just do the following: Investor A has $450,000 in stocks, $200,000 in bonds, and rents. Investor B has $0 in stocks, $600,000 in bonds, a $550,000 house, ...
by G-Money
Fri Jun 13, 2014 12:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Mortgages/Black Swans/Larry Portfolio/Antifragility
Replies: 27
Views: 1779

Re: Mortgages/Black Swans/Larry Portfolio/Antifragility

Of course "B" is riskier. B is leveraged, A is not. So in up markets, A can expect to do better, and in down markets, B can expect to do better. B has higher expected returns to compensate for the increased risk.
by G-Money
Fri Jun 13, 2014 12:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Mortgages/Black Swans/Larry Portfolio/Antifragility
Replies: 27
Views: 1779

Re: Blue Line Jumps 11 Percent

We need to make this thread actionable. Should I buy more Blue? Or sell now since valuations are so high?
by G-Money
Thu Jun 12, 2014 11:15 am
 
Forum: Investing - Theory, News & General
Topic: Blue Line Jumps 11 Percent
Replies: 5
Views: 738

Re: Diversification apply to portfolios as well??

Diversifying model portfolios also could get a little cumbersome, given how many are out there: http://whitecoatinvestor.com/150-portfo ... han-yours/ :twisted:

If only they made an index fund that tracked all of the model portfolios relative to their prevalence . . . :wink:
by G-Money
Tue Jun 10, 2014 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: Diversification apply to portfolios as well??
Replies: 20
Views: 817

Re: Diversification apply to portfolios as well??

Portfolios are not assets, nor are they asset classes. Diversification at the asset level makes sense to avoid idiosyncratic risk. For example, you would not want to put all of your savings in a single stock or bond from a company because there are all sorts of risks that could be unique to that com...
by G-Money
Tue Jun 10, 2014 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: Diversification apply to portfolios as well??
Replies: 20
Views: 817

Re: VTMGX vs. VTIAX [Vanguard Developed Markets vs. Total In

If you want to keep your portfolio as simple as possible, skip the slices that are just 5% of equity. Those will barely move the needle. I vote for Total International. The only reason I'd hold Developed Markets is if I wanted to slice and dice between developed and emerging, or if I had some reason...
by G-Money
Wed Jun 04, 2014 1:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: VTMGX vs. VTIAX [Vanguard Developed Markets vs. Total Int'l]
Replies: 8
Views: 563

Re: Corp bond question (Ang's online textbook)

Why does the Sharpe ratio of an asset class in isolation matter? To the extent Sharpe ratio is at all meaningful, wouldn't it be much more important to know the Sharpe ratio of your entire portfolio? This is where the answer lies. In Four Pillars Bill Bernstein uses short term corporate bonds in hi...
by G-Money
Tue Jun 03, 2014 10:46 pm
 
Forum: Investing - Theory, News & General
Topic: Corp bond question (Ang's online textbook)
Replies: 7
Views: 572

Re: Tilting the Three-Fund Portfolio

Personally not a fan. I like LifeStrategy and Target Retirement funds as one fund solutions. Less so when it comes to mixing with other funds to tilt. Biggest problem: It would take me more than 1 second to determine how much of my portfolio was in each asset class. How much would be in internationa...
by G-Money
Tue Jun 03, 2014 7:03 pm
 
Forum: Investing - Theory, News & General
Topic: Tilting the Three-Fund Portfolio
Replies: 8
Views: 1398

Re: Corp bond question (Ang's online textbook)

Why does the Sharpe ratio of an asset class in isolation matter? To the extent Sharpe ratio is at all meaningful, wouldn't it be much more important to know the Sharpe ratio of your entire portfolio? Corporate bonds may have better risk-adjusted returns, but my understanding is they are also more hi...
by G-Money
Tue Jun 03, 2014 6:53 pm
 
Forum: Investing - Theory, News & General
Topic: Corp bond question (Ang's online textbook)
Replies: 7
Views: 572

Re: Moving 1.5 bedrooms 400 miles

Is the stuff worth the cost of moving? When I moved (admittedly, a much longer distance), I determined it was cheaper to just sell my furniture and buy new stuff in my new city. I wasn't particularly attached to any of the furniture. Perhaps the closer distance makes it worthwhile to move rather tha...
by G-Money
Thu May 29, 2014 9:20 am
 
Forum: Personal Finance (Not Investing)
Topic: Moving 1.5 bedrooms 400 miles
Replies: 19
Views: 1052

Re: Jack Bogle - International Bonds

abuss368 wrote:I would take it you have no plans to invest in this asset class? Taxable bonds and TIPS?

Not now. Total (domestic) bond in 401(k) and higher-yielding CDs in Roth for me.
by G-Money
Tue May 27, 2014 12:46 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle - International Bonds
Replies: 57
Views: 3206

Re: Jack Bogle - International Bonds

As to the question, why shouldn't I drop the global weight of non US bonds from 65% ish (last I checked US was roughly 35% of global bond market) to ZERO?.... I have to answer with questions.... what do you know that the market does not? Why do you expect the US to do well while the rest of the wor...
by G-Money
Tue May 27, 2014 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle - International Bonds
Replies: 57
Views: 3206

Re: Jack Bogle - International Bonds

I always pay attention when Jack Bogle speaks. What did he mean by "they have hedging costs"? The performance of the international bond is in a currency of a different country. Vanguard invests in currency contracts to convert that performance in foreign currency back into US Dollars. Thi...
by G-Money
Tue May 27, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle - International Bonds
Replies: 57
Views: 3206

Re: Do you need international bonds?

Thank you, Rick. I had a feeling I was missing something. If I understand your post correctly, there's very little advantage to invest in international bonds now, at least hedged funds. Foreign bonds are yielding significantly less than domestic bonds of similar duration and credit risk. As you note...
by G-Money
Mon May 26, 2014 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Do you need international bonds?
Replies: 29
Views: 2740

Re: Do you need international bonds?

Thanks Rick and Larry. I'm struggling to figure out if anyone can hedge cheaply. The Vanguard fund has over $23 billion in assets, which seems like a lot to me. So I would figure if anyone could hedge cheaply, Vanguard could. But I look at the difference in SEC yield between Total International Bond...
by G-Money
Mon May 26, 2014 2:52 pm
 
Forum: Investing - Theory, News & General
Topic: Do you need international bonds?
Replies: 29
Views: 2740

Re: Total International Bond Index Fund - does it have a pla

But while VBILX has an SEC yield (which is a close approximation of it's expected return) of 2.56%, the international bond fund has an SEC yield of 1.42%. A spread of 114 basis points for similarly risky bond funds is, IMO, huge. I think of it this way: if one FDIC-insured bank a block away from yo...
by G-Money
Mon May 26, 2014 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total International Bond Index Fund - does it have a place
Replies: 6
Views: 480

Re: Total International Bond Index Fund - does it have a pla

I'm not sure what is going on with currency risk - it was discussed and I just forgot, but someone else will know. The Vanguard fund is currency-hedged. Vanguard explains it here: https://personal.vanguard.com/us/insights/article/loxham-total-international-bond-index-062013 But the hedging has a co...
by G-Money
Mon May 26, 2014 1:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total International Bond Index Fund - does it have a place
Replies: 6
Views: 480

Re: PFCU Mortgage Rate vs APR

I wouldn't bother trying to spend too much time with APRs for ARMs. APRs are calculated over the course of the entire life of the loan, but in nearly all cases you would not want to hold onto an ARM that long. Also, for ARMs, the lenders simply assume current rates will persist over the life of the ...
by G-Money
Sat May 24, 2014 8:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: PFCU Mortgage Rate vs APR
Replies: 1
Views: 243

Re: PenFed's ARM Rate Reset Option

When I use the Mortgage Professor's calculator and just compare PenFed's 5/5 ARM intro rate (3.00%, 0 points) to Navy Federal's 5/1 ARM intro rate (2.5%, .5% discount points), and assume you keep and fully amortize the $100,000 loan over a 60 month period, the Navy Fed loan would save you about $700...
by G-Money
Sat May 24, 2014 8:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: PenFed's ARM Rate Reset Option
Replies: 10
Views: 1063

Re: PenFed's ARM Rate Reset Option

To compare the two loans, I like this calculator from Mortgage Professor. Since you're projecting the loan only for the first 5 years, you can pretend it's a fixed rate loan.

http://www.mtgprofessor.com/calculators ... or9ci.html
by G-Money
Thu May 22, 2014 10:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: PenFed's ARM Rate Reset Option
Replies: 10
Views: 1063

Re: "Is Bogle Befuddling?"

In Praise of the Ordinary The investment performance of another, less-revered gentleman has also been in the news. The press has breathlessly reported that, if forced to sell the Los Angeles Clippers, Donald Sterling could receive as much as $1 billion, thereby reaping a "massive profit" ...
by G-Money
Wed May 21, 2014 7:26 pm
 
Forum: Investing - Theory, News & General
Topic: "Is Bogle Befuddling?"
Replies: 57
Views: 7048

Re: Small Cap Tilting

pingo wrote:Isn't value cheaper than growth by definition?

I had the same thought, although I confess I had a hard time following all of Montieth's article "No Silver Bullets in Investing."
by G-Money
Wed Mar 05, 2014 1:00 am
 
Forum: Investing - Theory, News & General
Topic: Small Cap Tilting
Replies: 84
Views: 8448

Re: Can Vanguard Become Too Big?

Disappointed that the article parrots the misconception of Vanguard being a not-for-profit. This has been discussed before, and it's just not so. It has a unique corporate structure, but it is not a not-for-profit. I believe VG is considered to be " Client Owned " The two concepts are not...
by G-Money
Tue Mar 04, 2014 10:26 pm
 
Forum: Investing - Theory, News & General
Topic: Can Vanguard Become Too Big?
Replies: 24
Views: 3767

Re: international piece of asset allocation

I was never persuaded by the argument that the fact US companies do business overseas eliminates the need for international equities. Foreign companies do business in the US, too. So would international equities alone suffice? Here's Vanguard's research paper on the matter: https://personal.vanguard...
by G-Money
Tue Mar 04, 2014 9:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: international piece of asset allocation
Replies: 6
Views: 435

Re: Will global diversification improve SWR in the U.S.?

Over the longest time horizon, there isn't any return advantage to U.S. investors being globally diversified. Not "isn't." "Hasn't been." Verb tense matters, unless you can buy past performance. You simply can't expect there to be any advantage over any given time horizon, so wh...
by G-Money
Tue Mar 04, 2014 6:21 pm
 
Forum: Investing - Theory, News & General
Topic: Will global diversification improve SWR in the U.S.?
Replies: 12
Views: 506

Re: Will global diversification improve SWR in the U.S.?

So, like I said, it's period dependent. That's how diversification works. Again, isn't this obvious? Which period are you expecting to be in for the next 30 years? Over the longest time horizon, there isn't any return advantage to U.S. investors being globally diversified. You simply can't expect t...
by G-Money
Tue Mar 04, 2014 6:16 pm
 
Forum: Investing - Theory, News & General
Topic: Will global diversification improve SWR in the U.S.?
Replies: 12
Views: 506

Re: Can Vanguard Become Too Big?

Disappointed that the article parrots the misconception of Vanguard being a not-for-profit. This has been discussed before, and it's just not so. It has a unique corporate structure, but it is not a not-for-profit. Would have liked to see a specific example of a "normal accident" that coul...
by G-Money
Tue Mar 04, 2014 6:04 pm
 
Forum: Investing - Theory, News & General
Topic: Can Vanguard Become Too Big?
Replies: 24
Views: 3767

Re: Will global diversification improve SWR in the U.S.?

Seems obvious to me. The whole idea behind diversification is that you won't have the best outcome, but you'll also avoid the worst. I think that's the only reason it makes sense to globally diversify. But we keep getting poured on with misleading information that global diversification improves re...
by G-Money
Tue Mar 04, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Will global diversification improve SWR in the U.S.?
Replies: 12
Views: 506

Re: Banning +1 in Boglehead forums

VictoriaF wrote:
G-Money wrote:
LAlearning wrote:Also did you know you can only post 20 smilies? I propose increasing this to at least 200!

Hadn't known about that. Just tested it out. Interesting!


If :sharebeer counts as one smile, you can use twenty of them to double the impact.

Victoria

:sharebeer
by G-Money
Tue Mar 04, 2014 4:48 pm
 
Forum: Forum Issues and Administration
Topic: Banning +1 in Boglehead forums
Replies: 53
Views: 6111

Re: Will global diversification improve SWR in the U.S.?

Seems obvious to me. The whole idea behind diversification is that you won't have the best outcome, but you'll also avoid the worst. I think that's the only reason it makes sense to globally diversify. But we keep getting poured on with misleading information that global diversification improves re...
by G-Money
Tue Mar 04, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: Will global diversification improve SWR in the U.S.?
Replies: 12
Views: 506

Re: Banning +1 in Boglehead forums

LAlearning wrote:Also did you know you can only post 20 smilies? I propose increasing this to at least 200!

Hadn't known about that. Just tested it out. Interesting!
by G-Money
Tue Mar 04, 2014 4:40 pm
 
Forum: Forum Issues and Administration
Topic: Banning +1 in Boglehead forums
Replies: 53
Views: 6111

Re: 25 YR Old Just Starting Out-Help with 401K/Investing

Watch the fixed income allocation. You could easily live to 100. I strongly encourage you to move to 100% equity allocation ASAP. You will certainly--certainly--thank me in 50 years. Look at any DJIA chart for the last 100 years if you doubt me. And research the number of ten year periods in which ...
by G-Money
Tue Mar 04, 2014 3:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: 25 YR Old Just Starting Out-Help with 401K/Investing
Replies: 11
Views: 1629

Re: Banning +1 in Boglehead forums

1. I have seen emoticons (lowest intellectual, not actual, life forms in posts. Unfamiliar with "intellectual life forms." 2. Yes, others have brought this issue up. I find it interesting that some posters with thousands of posts indicated tend to use the +1. Perhaps +1 responses should n...
by G-Money
Tue Mar 04, 2014 2:42 pm
 
Forum: Forum Issues and Administration
Topic: Banning +1 in Boglehead forums
Replies: 53
Views: 6111

Re: Equity line of credit

Yes, you should shop around. You could get a HELOC at Prime - .5% (currently 2.75%) with no closing costs or annual fee from Hanscom Federal Credit Union. Similar standards to join as PenFed.
by G-Money
Tue Mar 04, 2014 2:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Equity line of credit
Replies: 2
Views: 207

Re: Get ready for the Dow at 6,000 by 2016: Pro

In his 2006 work, Dent predicted, “The Dow hitting 40,000 by the end of the decade, the NASDAQ['s] advancing at least ten times from its October 2001 lows to around 13,500, and potentially as high as 20,000 by 2009 … The Great Boom['s] resurging into its final and strongest stage in 2007, and even ...
by G-Money
Tue Mar 04, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: Get ready for the Dow at 6,000 by 2016: Pro
Replies: 46
Views: 5025

Re: Feedback on this Emergency Fund AA I'm thinking of

Not a fan of money market funds. They all yield essentially 0%. For less risk, you can invest in an FDIC-insured online savings account and get closer to 1%. I don't personally have a problem with having stocks as part of your emergency fund. I don't really have an emergency fund anymore, having dec...
by G-Money
Tue Mar 04, 2014 2:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Feedback on this Emergency Fund AA I'm thinking of
Replies: 4
Views: 469

Re: My Company's Retirement Seminar. . . What a sham!

It's at least possible that some of your colleagues were feigning interest so it didn't seem rude that they were collecting all the freebies for their kids to play with. I've definitely been guilty of that.
by G-Money
Tue Mar 04, 2014 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: My Company's Retirement Seminar. . . What a sham!
Replies: 15
Views: 2644

Re: Banning +1 in Boglehead forums

Peebs wrote:Emoticons are the lowest intellectual life form in any forum and the +1s are just one level up.

Didn't think that emoticons or +1s were actual life forms.
by G-Money
Tue Mar 04, 2014 2:17 pm
 
Forum: Forum Issues and Administration
Topic: Banning +1 in Boglehead forums
Replies: 53
Views: 6111
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