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Re: International Allocation in some funds...

So again, what makes a company foreign or domestic for the purposes of Vanguard Index funds? Is it the country of domicile? That would make a growing number of US firms such as Accenture into foreign companies based on being incorporated in foreign countries for tax evasion purposes even though the...
by JoMoney
Wed Jul 23, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: International Allocation in some funds...
Replies: 17
Views: 585

Re: Poll: Which Happens First - DOW > 20,000 or DOW < 14,000

Jeremy Siegel says Dow could go to 20,000 by the end of the year:
"it could.. I'm not going to say that's the likely event..."
http://www.cnbc.com/id/101807724
by JoMoney
Wed Jul 23, 2014 4:10 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Which Happens First - DOW > 20,000 or DOW < 14,000?
Replies: 25
Views: 1599

Re: Momentum Investing ?

...So let me make sure I've got this straight. There's a value premium...but only in small, mostly illiquid stocks. There's no momentum premium, unless you pair with with the value premium. In small, illiquid stocks. But only in Japan. And, let me guess - only on rainy Thursdays? :shock: Thursdays!...
by JoMoney
Wed Jul 23, 2014 6:25 am
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 22
Views: 2101

Re: TRP Small Cap Value (PRSVX)?

Note: I intentionally avoid small-caps. But FWIW, The T.Rowe Price funds are active funds, some might see their "style drift" as a feature. The managers of their other funds like OTCFX and PRNHX have commented numerous times about the current state of small caps being overvalued . The PRNH...
by JoMoney
Tue Jul 22, 2014 4:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: TRP Small Cap Value (PRSVX)?
Replies: 3
Views: 440

Re: Will baby boomers retiring spell doom for the markets

I have bigger concerns about what baby boomers will do to the medicare/social-security systems, especially if the current job and wage growth is a new norm... but if jobs and wages start heating up I imagine inflation won't be to far behind... seems there's always something to worry about.
by JoMoney
Tue Jul 22, 2014 4:06 pm
 
Forum: Investing - Theory, News & General
Topic: Will baby boomers retiring spell doom for the markets
Replies: 38
Views: 3388

Re: P/E Ratio: How do YOU interpret/use it?

As of others have said, as a passive investor, it's generally best to ignore it. Vast amounts of time, intellect, and huge sums of money are spent analyzing and trying to decide if they can guess better then what the aggregate market determines the price will be. It's not likely you will develop an ...
by JoMoney
Tue Jul 22, 2014 8:13 am
 
Forum: Investing - Theory, News & General
Topic: P/E Ratio: How do YOU interpret/use it?
Replies: 26
Views: 1290

Re: Momentum Investing ?

bs010101, you are right, of course, but some Bogleheads, perhaps the majority, won't chase anything. Furthermore, the opposite of momentum is reversion to the mean. Paul The problem with reversion to the mean is naïvely believing that you know what the mean is. The market's mean, whatever future va...
by JoMoney
Mon Jul 21, 2014 8:15 am
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 22
Views: 2101

Re: Faber: S&P 500 an Active Fund in Drag

...The S&P 500 is 'smart beta'. :D It's certainly smart for anyone who understands " The Cost Matters Hypothesis " But calling it beta implies only one explanatory factor of returns, wherein reality it has at least 500 factors. It may only be a modest sampling of the "Total Marke...
by JoMoney
Sun Jul 20, 2014 6:09 am
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3396

Re: Faber: S&P 500 an Active Fund in Drag

I have to admit, I prefer some of the more "active" qualities of the S&P500 to a more theoretically pure "Total Market Index". I don't expect the minimal "active" screening to deliver any long-term out-performance because despite the in-efficiencies I believe are in...
by JoMoney
Sun Jul 20, 2014 1:41 am
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3396

Re: Vanguard Target retirement vs S&P500 indexing

...Please convince me why I should continue with S&P500 for next 5 years as I am 25 years away from retiring. At some point I will go into bonds but why now?n I have good career and income. I'm in a similar situation, but I don't have a date set for retiring. The return on bonds bought in today...
by JoMoney
Sat Jul 19, 2014 11:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Target retirement vs S&P500 indexing
Replies: 7
Views: 1575

Re: Three questions about how mutual fund redemptions work

[...] I believe that if I were to go into my account right now, and issue orders ten minutes apart, --One to buy 10 shares of VTSMX in my Roth account --One to sell 10 shares of VTSMX in my wife's Roth (yes, we each gave each other transaction rights) Then, after settlement, I'd see about $500 less...
by JoMoney
Sat Jul 19, 2014 9:17 pm
 
Forum: Investing - Theory, News & General
Topic: Three questions about how mutual fund redemptions work
Replies: 6
Views: 800

Re: Japan's Lost Decades in One Chart

... I would like to see a source for his assertion that different accounting standards caused Japanese P/E's to be twice as high as if they had been using American accounting standards. Here's one report by Ken French: http://www.nber.org/papers/w3290 ... The difference between reported price-earni...
by JoMoney
Sat Jul 19, 2014 8:43 pm
 
Forum: Investing - Theory, News & General
Topic: Japan's Lost Decades in One Chart
Replies: 23
Views: 2843

Re: a close look at value and momentum

Isn't betting on momentum intrinsically conflicting for people betting on mean-reversion strategies? If someone was going to speculate in both "value" style stocks and "momentum" style stocks, why not own a single low-cost low-turnover blend fund? If someone was going to try to p...
by JoMoney
Sat Jul 19, 2014 8:14 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: Corporate inversions and TSM

For some indexes (like the S&P500) it's a requirement that a company be a "U.S. Company", but there are multiple considerations that go into how that's determined, and where the company is headquartered and pays taxes is not necessarily a determining factor: http://www.spindices.com/do...
by JoMoney
Fri Jul 18, 2014 10:01 pm
 
Forum: Investing - Theory, News & General
Topic: Corporate inversions and TSM
Replies: 3
Views: 377

Re: a close look at value and momentum

...It is amazing how the industry churns out an endless stream of investment strategies with catchy names and snazzy backtests. When one stops working, they just come up with something new. For me, the problem is that it's not "new". These are the same old strategies revived with new &quo...
by JoMoney
Fri Jul 18, 2014 9:32 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: a close look at value and momentum

Trying to combine "Momentum" and "Value" seems like a re-run of what used to be called GARP . It's the holy grail - pick the stocks that are going up like a growth fund (but not the crazy over-priced ones), while avoiding the "sinking ships" of Value investing. All of t...
by JoMoney
Fri Jul 18, 2014 3:40 am
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: ETF Liquidity for the long term

ogd wrote:...If shares of the companies included in VOO aka S&P 500 become illiquid, all bets are off.

I think that's a key point - any account can become illiquid. There have been times in the past that bank holidays were declared to freeze people out of bank savings accounts.
by JoMoney
Thu Jul 17, 2014 5:22 pm
 
Forum: Investing - Theory, News & General
Topic: ETF Liquidity for the long term
Replies: 12
Views: 897

Re: a close look at value and momentum

Is there a "second derivative" or "reverse arbitrage" type effect to momentum? I mean, momentum trading itself causing more momentum effect (instead of less, as one usually imagines with 'arbitrage')? Contrarian investors who buy value think they're arbitraging momentum. Contrar...
by JoMoney
Thu Jul 17, 2014 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: VTI, VTSAX, VTSMX price difference

I hope VTI splits sometime soon :) Depending on how it affects the spread on the ETF over the funds net asset value, you may be better off with a higher price. I believe this is why they reverse-split their S&P500 ETF VOO. The higher price made the spread a smaller percentage of total value los...
by JoMoney
Tue Jul 15, 2014 4:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: VTI, VTSAX, VTSMX price difference
Replies: 27
Views: 1928

Re: a close look at value and momentum

The same statements were made 20 years ago about SV when FF published their paper and the SV premium since has been about the same. So saying it's silly to believe it will persist at that level seems to be a bit of overconfidence (and silly). I certainly believe there is a risk it will shrink. But ...
by JoMoney
Tue Jul 15, 2014 8:43 am
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: How do negative stock PEs affect index avg PE?

There is a lot of different ways PE's get reported on an index. Jeremy Siegel has commented about problems with the method S&P uses (by aggregating all the earnings together) because it distorts the fact that the losses of one group of companies (like many financial institutions in 2008/2009) ha...
by JoMoney
Tue Jul 15, 2014 7:08 am
 
Forum: Investing - Theory, News & General
Topic: How do negative stock PEs affect index avg PE?
Replies: 8
Views: 883

Re: How do negative stock PEs affect index avg PE?

...So I take it that companies with persistent negative earnings will be found predominantly in growth indexes, and not value indexes. Not really... "Growth" stocks are generally classified as companies that have been GROWING earnings, but in some indexes it will also include new companie...
by JoMoney
Tue Jul 15, 2014 5:44 am
 
Forum: Investing - Theory, News & General
Topic: How do negative stock PEs affect index avg PE?
Replies: 8
Views: 883

Re: a close look at value and momentum

When looking at the broad market and saying that a total market index fund would have performed similar over the same period it makes sense. The funds that existed across time were in aggregate a representation of the broad market. Small-Value stocks on the other hand represent maybe 5% of the marke...
by JoMoney
Mon Jul 14, 2014 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: "Stocks and shares," different things? "Peter Pan"

Maybe it was meant as a quip to mean that the price of stocks were up - so they were sold, thereby decreasing the number of shares and garnering a profit ... ?
by JoMoney
Mon Jul 14, 2014 8:01 am
 
Forum: Investing - Theory, News & General
Topic: "Stocks and shares," different things? "Peter Pan"
Replies: 39
Views: 2781

Re: But why not 100% stock index fund?

Do what you think will serve you best. While I cannot give any investor a neat formula for risk control, I am comforted to share that inadequacy with the likes of Paul Samuelson, who tells us, “ there is no way any professor of economics or any minister of the church can tell you what your risk tole...
by JoMoney
Mon Jul 14, 2014 6:54 am
 
Forum: Investing - Theory, News & General
Topic: But why not 100% stock index fund?
Replies: 76
Views: 6962

Re: a close look at value and momentum

Depending on the time period you look at, owning growth stocks has beaten the market. Can you demonstrate with some data? http://johncbogle.com/speeches/JCB_Phila_Ana_2-01.pdf Growth vs. Value It’s not just the recent era in which the tug-of-war between growth and value has materialized. It’s been ...
by JoMoney
Sun Jul 13, 2014 4:41 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: a close look at value and momentum

I really like the idea of "duration for stocks." Without knowing anything about actual returns, I would expect both extreme value stocks and extreme growth stocks to outperform the market. With bonds, you can increase expected returns by either increasing credit risk (moving from governme...
by JoMoney
Sat Jul 12, 2014 10:56 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: A Look at Current P/E Ratios

.... I'm just not sure how much past growth predicts future growth and how much more to value companies that have grown in the past. Do you have thoughts about this? I'm not opposed to incorporating growth into these sorts of comparisons. I'm just not confident that I know how to do it. No, I don't...
by JoMoney
Sat Jul 12, 2014 9:53 pm
 
Forum: Investing - Theory, News & General
Topic: A Look at Current P/E Ratios
Replies: 53
Views: 5826

Re: a close look at value and momentum

The ERP is dictated by law. Bondholders get paid first. The fact that stocks are riskier than bonds because bondholders are paid first does not necessitate an equity risk premium, because there is no "law" saying that risk will be rewarded. Considerable research has found that riskier sto...
by JoMoney
Sat Jul 12, 2014 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: A Look at Current P/E Ratios

... any reasonable portfolio held by anyone on these boards will more than do the job. Just stay the course! :beer I would have to agree. I'm a strong believer that most people will get themselves into more trouble fiddling with the portfolio, which is why a simple broadly based portfolio makes the...
by JoMoney
Sat Jul 12, 2014 8:36 pm
 
Forum: Investing - Theory, News & General
Topic: A Look at Current P/E Ratios
Replies: 53
Views: 5826

Re: A Look at Current P/E Ratios

...makes more sense given a P/B that is 60% that of the total market. But at what rate is that book value growing? BRSIX Book-Value Growth % -1.34 VTSMX Book-Value Growth % 3.94 I buy equities because I want to own productive assets that earn money and grow in value. I can put money in the bank mai...
by JoMoney
Sat Jul 12, 2014 8:27 pm
 
Forum: Investing - Theory, News & General
Topic: A Look at Current P/E Ratios
Replies: 53
Views: 5826

Re: a close look at value and momentum

Even with their quantitative "secret sauce" DFA's Small-Value (DFSVX) for the past decade hasn't achieved anything notable above what a S&P Small-Cap Value Index has done (and the index fund can be had without advisers and at a lower ER), and the whole class of these "Small-Value&...
by JoMoney
Sat Jul 12, 2014 9:02 am
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16642

Re: Dreman now recommending S&P 500 funds

I think this is the article you're discussing: http://www.forbes.com/sites/investor/2014/05/28/double-your-money-in-an-index-fund/ He seems to be comparing the ER for the VFINX fund with the ETF SPY. Vanguards S&P500 ETF: VOO also has the same low .05% expense ratio as the Admiral class fund, an...
by JoMoney
Thu Jul 10, 2014 5:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Dreman now recommending S&P 500 funds
Replies: 2
Views: 622

Re: Does corporate credit risk add value

I find it hard to see a premium at all in a diversified group of bonds. Over the most recent few years, the higher-yielding has been the better performing, but over long periods of time looking at Vanguard's "High Yield Bond" , "Intrm. Investment Grade" , and "Intrm. Treasu...
by JoMoney
Thu Jul 10, 2014 3:54 am
 
Forum: Investing - Theory, News & General
Topic: Does corporate credit risk add value
Replies: 71
Views: 4079

Re: Why not include gold?

http://www.berkshirehathaway.com/letters/2011ltr.pdf ...Investments that are denominated in a given currency include money-market funds, bonds, mortgages, bank deposits, and other instruments. Most of these currency-based investments are thought of as “safe.” In truth they are among the most danger...
by JoMoney
Wed Jul 09, 2014 4:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why not include gold?
Replies: 48
Views: 3718

Re: Why not include gold?

I have a gold crown on a tooth, I have some fancy gold-plated audio cables... Beyond that, I don't have much use for gold. Especially not in my investment portfolio. It doesn't yield anything. If I bought it, I would at least want it to be useful, even if it was just an emotional/psychological good ...
by JoMoney
Wed Jul 09, 2014 8:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Why not include gold?
Replies: 48
Views: 3718

Re: How many veteran investor have LARGE MAJORITY in three-f

I'm not sure what constitutes a "veteran / seasoned" investor. I've been down a lot of various paths trying to find what worked, and what made sense to me. Ultimately, what finely clicked was the advice I'd been reading in books by John Bogle (and others) and Warren Buffett's frequent advi...
by JoMoney
Tue Jul 08, 2014 5:05 pm
 
Forum: Investing - Theory, News & General
Topic: How many veteran investor have LARGE MAJORITY in three-fund?
Replies: 56
Views: 3787

Re: Do you deviate from the owner's manual?

I've never even thought to check an owners manual to see what octane was recommended. I've never owned a car where I thought it would make a difference. My only experience with anything other than regular 87 octane unleaded is the corvette my dad owned required higher octane (which he strictly used)...
by JoMoney
Tue Jul 08, 2014 4:22 pm
 
Forum: Personal Consumer Issues
Topic: Do you deviate from the owner's manual?
Replies: 35
Views: 3136

Re: Does corporate credit risk add value

I find it hard to see a premium at all in a diversified group of bonds. Over the most recent few years, the higher-yielding has been the better performing, but over long periods of time looking at Vanguard's "High Yield Bond" , "Intrm. Investment Grade" , and "Intrm. Treasur...
by JoMoney
Mon Jul 07, 2014 5:12 pm
 
Forum: Investing - Theory, News & General
Topic: Does corporate credit risk add value
Replies: 71
Views: 4079

Re:

...For many investors, it is my opinion that reading multiple books is more confusing (and often misleading) than helpful... I think Taylor is spot-on. I know that just about every time I've read some other book it would get me scheming up some new plan that I later regretted. But as far as alterna...
by JoMoney
Mon Jul 07, 2014 4:46 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguards Devil's Advocate
Replies: 55
Views: 7117

Re: The Risk of Short-term Bond Funds

...The high yield environment leading up to the S&L crisis was a lot more of a struggle for us old fogies. :P It is interesting that the "real" yield isn't so bad compared to some times in the past, in 1980 inflation was about 13% with 10yr Treasuries yielding around 10% In 2013 infla...
by JoMoney
Sun Jul 06, 2014 4:10 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10133

Re: US Total Stock Market Index worth in today's dollars?

Morningstar has data available for the S&P500 starting at the beginning of February 1970 up til today. If you chart an old mutual fund with data going back to that time, you can add in the S&P 500 under the benchmarks option. As long as the chart is set to chart "Growth", this is ...
by JoMoney
Sat Jul 05, 2014 8:04 am
 
Forum: Investing - Theory, News & General
Topic: US Total Stock Market Index worth in today's dollars?
Replies: 8
Views: 1366

Re: Rick Ferri's Emergency Fund

The short term bond fund has never lost money sence it was founded. So safe? Yah i believe so. This depends on how you look at it. The fund is mostly treasuries, so there is very little credit risk... but there is some. There's also some interest rate and liquidity risks, much smaller than many bon...
by JoMoney
Fri Jul 04, 2014 11:35 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri's Emergency Fund
Replies: 28
Views: 6258

Re: Rick Ferri's Emergency Fund

I use the Short-Term Bond index Fund for my "emergency" money. I prefer the fund for this rather than an ETF, I think the money is easier to access in the fund. As I understand it, with an ETF the money may be held for a settlement period of a few days. I can sell and electronic transfer m...
by JoMoney
Fri Jul 04, 2014 10:36 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri's Emergency Fund
Replies: 28
Views: 6258

Re: Does corporate credit risk add value

One doesn't have to get lucky to do better than market, just follow the (academic) research... Larry I guess all we need to do is to have someone tell us what research to follow, then we will all be rich. It is amazing that most active managers haven't figured this out yet, otherwise they would be ...
by JoMoney
Fri Jul 04, 2014 9:55 pm
 
Forum: Investing - Theory, News & General
Topic: Does corporate credit risk add value
Replies: 71
Views: 4079

Re: The Risk of Short-term Bond Funds

Long-Term Bonds promise a more stable stream of income/coupon payments at the risk of higher price volatility as interest rates change over time. Short-Term Bonds promise a more stable mark-to-market price at the risk of higher volatility in the coupon yields over time. Equities promise nothing but ...
by JoMoney
Fri Jul 04, 2014 9:36 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10133

Re: Current Stock Market Predictions

Despite our desire to somehow know the unknowable, predicting market returns is misleading. Mr.Bogle's published successful estimates might give someone the wrong idea that these things can be forseen... The success of these sorts of estimates is about as good as a coin flip. Over some periods it wo...
by JoMoney
Mon Jun 30, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Current Stock Market Predictions
Replies: 35
Views: 5356

Re: Fabulous Returns -- Low Risk?

That was great, thank you for sharing. Note: Anyone having problems accessing the full article can try doing a google search for: WSJ Huge Returns at Low Risk? Not So Fast Following the link from google allowed me to read the full article, the initial link demanded a subscription. Another issue with...
by JoMoney
Sun Jun 29, 2014 12:02 am
 
Forum: Investing - Theory, News & General
Topic: Fabulous Returns -- Low Risk?
Replies: 6
Views: 1000

Re: What is simple enough to understand, and therefore inves

What is simple enough to understand? Broad diversification. IMO, the more you concentrate in any "asset class", or stock, or bond the deeper the understanding you need of why you're focusing (or avoiding) the other options... and any decisions you make to concentrate should be taken with a...
by JoMoney
Sat Jun 28, 2014 11:22 pm
 
Forum: Investing - Theory, News & General
Topic: What is simple enough to understand, and therefore invest in
Replies: 27
Views: 1889

Re: EAFE vs. S&P Returns 1970-2013 and currencies

I'm not so sure I'd want a hedge in foreign currencies. Given the current Euro situation, the constant Yen debasement ( 1 Quadrillion! ), there's only a handful of countries with seemingly safe stable values but they're relatively small economies and they're being flooded by foreign money coming in ...
by JoMoney
Sat Jun 28, 2014 10:26 pm
 
Forum: Investing - Theory, News & General
Topic: EAFE vs. S&P Returns 1970-2013 and currencies
Replies: 2
Views: 351
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