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Re: Cap Weighting for International

Beyond the NYSE and NASDAQ, don't forget about the CME and related futures markets that trade in large individual stock futures as well as many stock indexes. Some say these people who bet on futures (and people who arbitrage between the markets) have a pretty big impact (at least in the short-term)...
by JoMoney
Mon Apr 27, 2015 3:46 pm
 
Forum: Investing - Theory, News & General
Topic: Cap Weighting for International
Replies: 10
Views: 490

Jack Bogle at The Aspen Institute

I ran across this recent John Bogle talk at "The Aspen Institute" , I haven't had time to watch all of it yet, but it starts out with a bit of his view on the future expected returns starting where we are today. I know others like to hear what Jack has to say (even if we've heard it before...
by JoMoney
Mon Apr 27, 2015 6:24 am
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle at The Aspen Institute
Replies: 3
Views: 514

Re: 140% Stocks (or why the Kelly criterion is cool)

I'm going to point out that the above levered portfolio example may not be typical of the way some might maintain a levered portfolio unless they're using something like one of those daily updated leveraged ETF's. The way many people attempt leveraging the portfolio doesn't actually "rebalance&...
by JoMoney
Sun Apr 26, 2015 3:49 pm
 
Forum: Investing - Theory, News & General
Topic: 140% Stocks (or why the Kelly criterion is cool)
Replies: 70
Views: 2923

Re: 140% Stocks (or why the Kelly criterion is cool)

I think the OP's main point is that "Kelly criterion is cool" rather than how to apply it in the real world. That's my belief. Along with the whole Markowitz mean-variance/Modern Portfolio theory. The premises required for a lot of the math to work with the stock market are false, so whil...
by JoMoney
Sun Apr 26, 2015 3:22 pm
 
Forum: Investing - Theory, News & General
Topic: 140% Stocks (or why the Kelly criterion is cool)
Replies: 70
Views: 2923

Re: Please Try Out Test Posts Here

This font isn't big enough...
Neither is this one...
by JoMoney
Sun Apr 26, 2015 7:01 am
 
Forum: Forum Issues and Administration
Topic: Please Try Out Test Posts Here
Replies: 67
Views: 124775

Re: Anyone have an asset allocation not based on percentages

When you start to get away from the percentages and constant-mix style, I don't think people consider it " asset allocation ", although I'm not sure what you would call it. Either way, I don't like the idea of putting the money I see as "safe" into the stock market, and I don't r...
by JoMoney
Sun Apr 26, 2015 2:11 am
 
Forum: Investing - Theory, News & General
Topic: Anyone have an asset allocation not based on percentages?
Replies: 11
Views: 1195

Re: Tilting

Jo: Nice rounding, but I'll take .68 over 35 years... Think of it as the difference in ER - most Bogleheads would switch funds for less. 26.7% more after 35 years I would too, which is among the reasons I wouldn't pay any adviser fees for the privilege of buying a DFA fund. As for the out-performan...
by JoMoney
Sat Apr 25, 2015 11:31 pm
 
Forum: Investing - Theory, News & General
Topic: Tilting
Replies: 37
Views: 1994

Re: Tilting

...Small stocks are even riskier than the overall market so you should require them to produce higher returns as compensation for that additional risk. What the market "should" do according to some theories and what actually happens in the real world don't always work out. We can look at ...
by JoMoney
Sat Apr 25, 2015 11:06 pm
 
Forum: Investing - Theory, News & General
Topic: Tilting
Replies: 37
Views: 1994

Re: Tilting

Costs play a big part of it, there are lots of studies that show active managers do out-perform before costs but fail to add any benefit after expenses. There have been other reports that show the small/value Factors don't actually bring a benefit in real mutual funds and indexes http://www.boglehea...
by JoMoney
Sat Apr 25, 2015 8:51 pm
 
Forum: Investing - Theory, News & General
Topic: Tilting
Replies: 37
Views: 1994

Re: VIGIX unbalanced? [Vanguard Growth Index]

Warren Buffett, a living, breathing, on-going EMH "anomaly" poo-poos the EMH, CAPM, and most of the models from that school of thought. Yet still advocates the crux of Bogleheads : http://www.berkshirehathaway.com/letters/2014ltr.pdf ... There are a few investment managers, of course, who ...
by JoMoney
Sat Apr 25, 2015 8:24 pm
 
Forum: Investing - Theory, News & General
Topic: VIGIX unbalanced? [Vanguard Growth Index]
Replies: 20
Views: 1010

Re: VIGIX unbalanced?

Being a Boglehead is not about costs and tax-efficiency. It is the adoption of the market efficiency theory. Are Dimension / DFA funds (i.e. Fama & French) Bogleheads? There are DFA advisers and investors who happen to also be Bogleheads, but Fama's Efficient Market Hypothesis was not necessari...
by JoMoney
Sat Apr 25, 2015 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: VIGIX unbalanced? [Vanguard Growth Index]
Replies: 20
Views: 1010

Re: VIGIX unbalanced?

...Here are two places where he puts forth ideas along similar lines: http://www.ft.com/intl/cms/s/0/df6ff27e-08c5-11e3-ad07-00144feabdc0.html#axzz3YLHKCgeR http://www.vanguard.com/bogle_site/sp2004AIMRefficientMrkts.html Here's the FT article without the pay-wall: http://johncbogle.com/wordpress/w...
by JoMoney
Sat Apr 25, 2015 8:00 pm
 
Forum: Investing - Theory, News & General
Topic: VIGIX unbalanced? [Vanguard Growth Index]
Replies: 20
Views: 1010

Re: VIGIX unbalanced?

Being a Boglehead is not about costs and tax-efficiency. It is the adoption of the market efficiency theory. I suspect many Bogleheads would disagree with this. Bogle himself, for instance, has stated on a few occasions a preference for his "cost matters hypothesis" over the efficient mar...
by JoMoney
Sat Apr 25, 2015 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: VIGIX unbalanced? [Vanguard Growth Index]
Replies: 20
Views: 1010

Re: XIRR of NASDAQ over the last 15 years

Now that the NASDAQ Index has finally surpassed the maximum value it reached over 15 years ago, I figured there would be lots of "the NASDAQ returned 0% over 15 years" in the upcoming years. So, I wondered, if you invested the same amount of money (e.g. $10,000) each year on March 10 (or ...
by JoMoney
Fri Apr 24, 2015 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: XIRR of NASDAQ over the last 15 years
Replies: 14
Views: 894

Re: Great little interview with John Bogle

Call_Me_Op wrote:Japan.

Is that suppose to be an argument for, or against international investing?
by JoMoney
Tue Apr 21, 2015 6:52 am
 
Forum: Investing - Theory, News & General
Topic: Great little interview with John Bogle
Replies: 23
Views: 2194

Re: Can't Just Do Nothing

A dollar saved is a dollar earned. You can also work the spending side of the equation: Coupons, energy efficiency in your house, audit all of your monthly bills (phone, TV, internet, etc.) and look for savings. Churning your internet and TV can also produce substantial savings if you rotate betwee...
by JoMoney
Mon Apr 20, 2015 3:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Can't Just Do Nothing
Replies: 45
Views: 6129

Re: Tips on becoming an IT Security Consultant

Talk to people in the "small companies and entrepreneurs" you want to focus on, and find out what sort of IT Security they need (or think they need). One thought, maybe look into offering services specificly related to PCI Compliance http://en.wikipedia.org/wiki/Payment_Card_Industry_Data_...
by JoMoney
Mon Apr 20, 2015 3:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tips on becoming an IT Security Consultant
Replies: 6
Views: 616

Re: Does Vanguard actually own the securities in its funds?

Mutual fund owners "own" a proportional share of everything the fund owns, but the shares of businesses in the fund aren't titled to individuals directly. The shares of the mutual fund itself may be titled to the individual buying the fund. The stocks of businesses owned by a mutual fund a...
by JoMoney
Sun Apr 19, 2015 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: Does Vanguard actually own the securities in its funds?
Replies: 18
Views: 2602

Re: Taking stock at midlife financially

You're doing fine obviously. But how do you get to $1.5M saving $10k/yr? Good question. Hard to mesh that amount with ... I plan to continue working at least till my late fifties and continue saving as much as I can - hopefully at least 10k per year. ... Probably possible in real estate over the pa...
by JoMoney
Sat Apr 18, 2015 6:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taking stock at midlife financially
Replies: 20
Views: 3417

Re: System Risk

Transactions create audit-able trails. Keep good records for yourself, they may be needed for tax purposes if nothing else. Financial firms often have multiple layers of security to maintain the integrity of bookkeeping and logging that can't be manipulated after the fact. It may take some time to s...
by JoMoney
Fri Apr 17, 2015 6:22 pm
 
Forum: Investing - Theory, News & General
Topic: System Risk
Replies: 15
Views: 1373

Re: Knowledgeable investor portfolios?

...Buying individual companies is like playing in the NBA. I can't do it. Most people can't do it. Most people shouldn't even try to do it. And no one who can play in the NBA is going to play and then send me the profits. But Stephen Curry can play in the NBA and he knows it. The fact that most bas...
by JoMoney
Fri Apr 17, 2015 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle vs Jim Grant Debate
Replies: 14
Views: 2156

John Bogle vs Jim Grant Debate

For those who like to follow these things, there was a recent debate between John Bogle and Jim Grant. I didn't see it posted anywhere else on here, but here's an article about how it went: http://www.philly.com/philly/blogs/inq-phillydeals/Great-Debate-pits-regressionary-Bogle-vs-activist-Grant.htm...
by JoMoney
Fri Apr 17, 2015 7:29 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle vs Jim Grant Debate
Replies: 14
Views: 2156

Re: I and EE Bonds - What will the new rate be?

Even without expecting higher variable rates later, the current rate is better than what you can get in other short-term securities. Vanguard's Short-Term Bond index currently has a yield to maturity of about 1.10% , and you can expect the expense ratio of at least .10% to come off the top of that. ...
by JoMoney
Fri Apr 17, 2015 5:21 am
 
Forum: Investing - Theory, News & General
Topic: I and EE Bonds - What will the new rate be?
Replies: 18
Views: 2205

Re: Real Estate Crowdfunding

Can who invests in this tell me how it is superior to investing in a REIT Index? I think these compare closer to owning an individual REIT stock more than owning a REIT index fund. A fund would be diversified holding multiple different REIT businesses. I don't invest in these, and certainly wouldn'...
by JoMoney
Thu Apr 16, 2015 3:29 pm
 
Forum: Investing - Theory, News & General
Topic: Real Estate Crowdfunding
Replies: 16
Views: 1455

Re: [retired guy said] terrible crash is coming

Browser wrote:... The only thing that can go wrong is if we don't have either a huge crash or a huge gain in the stock market... I hate when that happens.
Sounds like you need a third newsletter that advertises how to make money using options in the side-ways market.
by JoMoney
Thu Apr 16, 2015 3:08 pm
 
Forum: Investing - Theory, News & General
Topic: [retired guy said] terrible crash is coming
Replies: 71
Views: 8372

Re: Real Estate Crowdfunding

To me, these just look like a "Non-Traded REIT" selling as some sort of whiz-bang internet buzz words marketing.
by JoMoney
Thu Apr 16, 2015 3:36 am
 
Forum: Investing - Theory, News & General
Topic: Real Estate Crowdfunding
Replies: 16
Views: 1455

Re: REIT Hidden Operating Costs

A publicly listed REIT is a corporation. It does not have a meaningful "expense ratio". A REIT cannot have "hidden operating costs" in the same way that wal-mart or coca cola cannot have hidden operating costs. Right. If you want to get some idea of the expenses a publicly trade...
by JoMoney
Wed Apr 15, 2015 3:59 pm
 
Forum: Investing - Theory, News & General
Topic: REIT Hidden Operating Costs
Replies: 8
Views: 862

Re: [retired guy said] terrible crash is coming

...he's a "gold bug", I don't think I've ever seen a gold bug who wasn't constantly preaching economic doom and gloom.
by JoMoney
Wed Apr 15, 2015 3:01 pm
 
Forum: Investing - Theory, News & General
Topic: [retired guy said] terrible crash is coming
Replies: 71
Views: 8372

Re: Need help understanding market cap in total market

Mid-caps are a funny breed. There's a big grey area on both ends of what's considered "mid-cap" and where the line is drawn to "small" or "large". The S&P 400 Mid-Cap index contains a few stocks around $10 Billion market cap at the top end The Russell Mid-Cap Index ...
by JoMoney
Wed Apr 15, 2015 2:44 am
 
Forum: Investing - Theory, News & General
Topic: Need help understanding market cap in total market
Replies: 12
Views: 1001

Re: When did a GO Bond last Default?

Eric.T wrote:
Novine wrote:Detroit had some unsecured GO bonds that they defaulted on in the process of going into bankruptcy.


Do you recall which year Detroit declared bankruptcy?

http://en.wikipedia.org/wiki/Detroit_bankruptcy
by JoMoney
Tue Apr 14, 2015 3:14 pm
 
Forum: Investing - Theory, News & General
Topic: When did a GO (General Obligation) Bond last Default?
Replies: 10
Views: 1249

Re: Roth IRA for Teeneagers

...The Roth itself has no minimum but a lot of the funds have buy in minimums. What did you do with the $151? Also, how old is your son? FYI - One can open a custodial Roth IRA at Charles Schwab with $100, and choose from a variety of low-cost no brokerage fee ETF's http://www.schwab.com/public/sch...
by JoMoney
Tue Apr 14, 2015 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: Roth IRA for Teeneagers
Replies: 24
Views: 1442

Re: Deferring taxation of gains with S corporation

Here's the strategy. Please tell me whether it would work. I start an S corporation and capitalize it. The business of this S corporation is to buy investments. Despite receiving dividends and realizing capital gains, this S corporation never turns a profit, because any dividends and cap gains are ...
by JoMoney
Tue Apr 14, 2015 6:51 am
 
Forum: Investing - Theory, News & General
Topic: Deferring taxation of gains with S corporation
Replies: 5
Views: 454

Re: Poll: do you own individual international stocks?

If I still owned individual stocks, I could be difficult to get precise with this. My home and "legal residence" is in Australia, but I'm a U.S. citizen. I once owned a share of Carnival cruise lines, incorporated in Panama, jointly headquartered in the U.K. and U.S. (although the share I ...
by JoMoney
Sun Apr 12, 2015 4:16 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: do you own individual international stocks?
Replies: 25
Views: 1734

Re: Interesting investment Podcasts

I enjoy Clark Howard's radio show (also available as a podcast)
http://www.podcastone.com/The-Clark-Howard-Podcast

He's more focused on consumer issues and money saving ideas, but touches on personal finances and investing quite a bit.
by JoMoney
Sun Apr 12, 2015 4:05 pm
 
Forum: Investing - Theory, News & General
Topic: Interesting investment Podcasts
Replies: 9
Views: 1230

Re: The $1 Million Goal: Source of Motivation or Discouragem

I remember stories of my grandfather passing on condo's in Newport Beach,CA for $50k. Those are now multi-million properties. To suggest that $127k was not a lot of $$ in the 60's, and that for that reason $1,000,000 is not a lot today, is probably the most out-of-touch comment from this thread! :)...
by JoMoney
Sun Apr 12, 2015 3:56 pm
 
Forum: Investing - Theory, News & General
Topic: The $1 Million Goal: Source of Motivation or Discouragement?
Replies: 172
Views: 15879

Re: The Indexer, Speculator & Efficiency

However the enduring investor shortfall of 1% on index fund returns suggests buying and selling habits could be amplifying market momentum (ensuring prices swing further out of proportion as they get further from mean) .. Probably a fairly dubious link, but the easiest markets to time (via simple m...
by JoMoney
Sun Apr 12, 2015 2:50 pm
 
Forum: Investing - Theory, News & General
Topic: The Indexer, Speculator & Efficiency
Replies: 17
Views: 1586

Re: Warren Buffett Financial Advisor

What's interesting about that is the fact that it is a guaranteed fixed asset Actually because the total future income stream is decreased with every year that is put behind you, it is a diminishing asset, and when you die, it evaporates (well, pending someone claiming survivor benefits, but that i...
by JoMoney
Sat Apr 11, 2015 7:18 pm
 
Forum: Investing - Theory, News & General
Topic: Warren Buffett Financial Advisor
Replies: 26
Views: 4315

Re: The Indexer, Speculator & Efficiency

JoMoney, That's true if all indexers invest in a fund that holds all stocks. But in the real world there is the "S&P effect" which I encourage you to google. A lot of people have access to an S&P index fund but not an extended market index fund in their 401k offerings. I think it'...
by JoMoney
Sat Apr 11, 2015 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: The Indexer, Speculator & Efficiency
Replies: 17
Views: 1586

Re: International Investing

Also, Warren Buffett (the worlds greatest investor and John Bogle one of the greatest investment minds of our time) both agree that the U.S. is all you need. In the words of Mr. Buffett, you can't bet against America and win. Heh, a nice line. But it seems out of place here. Diversifying globally, ...
by JoMoney
Sat Apr 11, 2015 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: International Investing
Replies: 65
Views: 4309

Re: The $1 Million Goal: Source of Motivation or Discouragem

Quite a few "reaching-2-commas" threads lately. I have a 2-comma goal nowadays as well: I want my portfolio to increase by $1 Million in a single year simply from investment gains. A good year in the stock market can make this possible, but it is also quite a few years away. How good of a...
by JoMoney
Sat Apr 11, 2015 4:43 pm
 
Forum: Investing - Theory, News & General
Topic: The $1 Million Goal: Source of Motivation or Discouragement?
Replies: 172
Views: 15879

Re: The Indexer, Speculator & Efficiency

Things would get really weird if the market were dominated by index funds. Index funds are price takers, not makers, since all they care about is filling a quota of stocks needed to create new units. They aren't bargain hunting. But for every unit they create, they need to have the full complement ...
by JoMoney
Sat Apr 11, 2015 3:53 pm
 
Forum: Investing - Theory, News & General
Topic: The Indexer, Speculator & Efficiency
Replies: 17
Views: 1586

Re: White Swans

If the event was unexpected, something you couldn't be prepared for, it would still be a "Black Swan" regardless of whether the impact was positive or negative.
White Swans were quite common. I don't think this is a "White Swan"...
by JoMoney
Fri Apr 10, 2015 8:55 pm
 
Forum: Investing - Theory, News & General
Topic: White Swans
Replies: 2
Views: 716

Re: Small cap premium

Small companies have lower bond ratings, indicating that the market thinks that their bonds are riskier. And the market is right. Small companies have higher default rates than larger companies. If the bonds of small companies are riskier, then their stocks should be riskier too. Not so fast. Of co...
by JoMoney
Fri Apr 10, 2015 8:50 pm
 
Forum: Investing - Theory, News & General
Topic: Small cap premium
Replies: 32
Views: 2394

Re: International Investing

I'm with Jack on the opinion of International not being necessary for U.S. investors. I'm not saying investing Internationally is a mistake, but I think there are additional risks and expenses that just aren't necessary for a U.S. investor to take, and that a lot of the arguments for it (i.e. MPT , ...
by JoMoney
Fri Apr 10, 2015 8:14 pm
 
Forum: Investing - Theory, News & General
Topic: International Investing
Replies: 65
Views: 4309

Re: My first quarter review of 2015's sure things

...Thank goodness for "Raymond", one of the old runners , who gave that bit of insightful information to Bogle. And, since this is Jack Bogle, and we are on Bogleheads, I got to learn something about "runners" and what they did exactly. You might find this old 1958 video about &...
by JoMoney
Fri Apr 10, 2015 4:49 am
 
Forum: Investing - Theory, News & General
Topic: My first quarter review of 2015's sure things
Replies: 12
Views: 2999

Re: The Indexer, Speculator & Efficiency

http://www.vanguard.com/bogle_site/sp2004AIMRefficientMrkts.html ... Whatever the form of the EMH, I know of no serious academic, professional money manager, trained security analyst, or intelligent individual investor who would disagree with the thrust of EMH: The stock market itself is a demandin...
by JoMoney
Fri Apr 10, 2015 2:29 am
 
Forum: Investing - Theory, News & General
Topic: The Indexer, Speculator & Efficiency
Replies: 17
Views: 1586

Re: Withdrawing from balanced funds when stocks are down

I've seen this discussion here a number of times (and I believe that I might have even started a thread on the topic). Were someone motivated to do so, it seems like this issue could be cleared up with a retrospective analysis of the two approaches for several major downturns. I would be interested...
by JoMoney
Wed Apr 08, 2015 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing from balanced funds when stocks are down
Replies: 30
Views: 1657

Re: The $1 Million Goal: Source of Motivation or Discouragem

Whether the number is right or wrong, I think having something to aim at helps with achieving any kind of goal. You have to know where you want to go or you'll just wonder around without direction and you'll never know when you get there... wherever "there" is.
by JoMoney
Wed Apr 08, 2015 3:28 pm
 
Forum: Investing - Theory, News & General
Topic: The $1 Million Goal: Source of Motivation or Discouragement?
Replies: 172
Views: 15879

Re: Withdrawing from balanced funds when stocks are down

I'm pretty sure there's been threads on here that discuss bucket portfolio's vs constant-mix rebalancing, the effective end result being the same. It's all just mental accounting tricks, so whatever floats your boat.
by JoMoney
Wed Apr 08, 2015 3:09 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing from balanced funds when stocks are down
Replies: 30
Views: 1657

Re: Bogle: Investors are Now Drving Ethics

Thanks for the post. I'm interested. How does Bill Sharpe get to his estimate of costs? Anyone have a link? Bill Sharpe produces this 100-basis-point total cost associated with a 6-basis-point total market index fund,. He compares it to a 112-basis-point average active equity fund and expense ratio...
by JoMoney
Wed Apr 08, 2015 3:00 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: Investors are Now Drving Ethics
Replies: 6
Views: 1202
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