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Re: Why is there no mutual fund that truly behaves like rent

The iShares Residential Real Estate Capped ETF focuses on residential real estate. The .48% ER seems high to me though for a fund that only has 36 stocks you could buy on your own. I don't know any names off hand, but there are lots of non-traded REITs sold as investments out there. Generally they'r...
by JoMoney
Sat Sep 20, 2014 3:23 am
 
Forum: Investing - Theory, News & General
Topic: Why is there no mutual fund that truly behaves like rental?
Replies: 26
Views: 1299

Re: Two Fund real Lazy Portfolio?

^ The benefits of diversification have been somewhat oversold IMO. Going from owning 30 companies across a range of industries to 100 companies makes a huge difference. Going from 100 companies to 500 companies a bit less but is still probably important. Once you own a diversified collection of 500...
by JoMoney
Sat Sep 20, 2014 12:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 33
Views: 3925

Re: AliBaba

... Waiting for analogies to the story of Ali Baba, whos greedy (but well-to-do) brother went to take all the riches he could grab from the secret cave but couldn't figure out how to get out and lost everything.
by JoMoney
Fri Sep 19, 2014 10:42 pm
 
Forum: Investing - Theory, News & General
Topic: AliBaba
Replies: 85
Views: 4228

Re: Alibaba is NOT coming to an index near you

Regardless of how the stock performs, as an investment it presents unique risks that someone might choose not to be exposed to for very good reasons. In my mind I'm hearing my mom's voice telling me "If everyone else jumped off a cliff would you?" ... "If everyone else is buying Aliba...
by JoMoney
Fri Sep 19, 2014 8:36 pm
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 31
Views: 3012

Re: Two Fund real Lazy Portfolio?

I don't see why investors need domestic stocks . You can build a perfectly good portfolio using only total international (VXUS) and total bond (BND). :beer I think there's a lot of worse choices you could make. :sharebeer There are probably finance pundits (e.g. Mebane Farber) that would agree with...
by JoMoney
Fri Sep 19, 2014 8:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 33
Views: 3925

Re: Two Fund real Lazy Portfolio?

... So Apple yes, but Samsung no? GM yes, but Daimler no? Pfizer definitely, until it buys Astrazeneca and then no thanks? Equity in these companies all belongs to the same asset class. You don't necessarily need to hold them all, but limiting yourself to half the market seems like an oddly concent...
by JoMoney
Fri Sep 19, 2014 5:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 33
Views: 3925

Re: Alibaba is NOT coming to an index near you

I found this blog post about the Alibaba IPO interesting, http://www.ethicssage.com/2014/09/beware-of-the-hidden-risks-in-owning-shares-in-alibabas-ipo.html Mostly it's just echoing the same sorts of cautions discussed in this thread. Regarding the regulators, it points out that in the U.S.: ...They...
by JoMoney
Fri Sep 19, 2014 9:03 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 31
Views: 3012

Re: Alibaba is NOT coming to an index near you

Well, that's all over my head, and I confess I had not even heard of Alibaba until I saw this thread, and have zero opinion on whether it is a good investment or not. But if it is a stock, and it trades on the world markets somewhere, why would it not appear in the world stock indices? I gather the...
by JoMoney
Fri Sep 19, 2014 7:12 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 31
Views: 3012

Re: Two Fund real Lazy Portfolio?

...I just read the Motley Fool interview with Mr. Bogle and also was struck by the simplicity of the VG Balanced Index. If you own it in Admiral, it's an er of 0.09%. Total Stock and Total Bond together come to an er of 0.13% in Admiral. One thought is how would it be to go with the Balanced Index ...
by JoMoney
Fri Sep 19, 2014 5:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 33
Views: 3925

Re: Australia and New Zealand

I flew from Sydney to Ayers Rock and rented a car there. The car gave me time to explore the area on my own and at my own pace instead of booking tours at specific times. I've been to Australia now 3 times and I would go again and again. Sorry.. I misunderstood the statement "Book a roundtrip ...
by JoMoney
Fri Sep 19, 2014 4:59 am
 
Forum: Personal Consumer Issues
Topic: Australia and New Zealand
Replies: 29
Views: 1957

Re: What evidence would prove the Boglehead mentality wrong?

Doing nothing is not always cheaper than doing something. If you have a leaky roof, and don't fix it to save money, eventually you will have a rotted frame. Doing no research can lead one to invest in companies that lose money. In this case that is worse than doing research, realizing the company l...
by JoMoney
Thu Sep 18, 2014 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 99
Views: 5880

Re: Australia and New Zealand

Actually Uluru is surprisingly easy to see: Book a roundtrip flight from Sydney, book a hotel there for 3 nights, rent a car, go everywhere on your own with 2 full days of hiking. Then you will understand such posts about market dips like this one on the Uluru omen: http://www.bogleheads.org/forum/...
by JoMoney
Thu Sep 18, 2014 4:45 pm
 
Forum: Personal Consumer Issues
Topic: Australia and New Zealand
Replies: 29
Views: 1957

Re: M*'s Samuel Lee on Dividend ETF and Factor Investing

iShare's calls this fund a "CORE" fund, but the fund has an explicit concentration policy and it's "non diversified". Seems a bit odd to give it a name implying suitability as the "CORE" of a portfolio.
by JoMoney
Thu Sep 18, 2014 4:56 am
 
Forum: Investing - Theory, News & General
Topic: M*'s Samuel Lee on Dividend ETF and Factor Investing
Replies: 5
Views: 585

Re: The dangerous practice of rebalancing...

...John Bogle, doesn't think rebalancing is important, but then we could analyze why Bogle is wrong about this obvious fact, if it's really obvious (not to say he couldn't possibly be). Pending the outcome, I would still go with the intuitive answer that in some market dynamics rebalancing helps an...
by JoMoney
Wed Sep 17, 2014 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: Bond Fund Duration ?

The answer is yes. Portfolio duration is a (dollar-weighted) linear combination of the fund durations (which are themselves a linear combination of constituent bond durations). If you want the duration to be 10 in year 1, 9 in year 2, 8 in year 3, etc. all you have to do is rebalance your bond fund...
by JoMoney
Wed Sep 17, 2014 5:44 am
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 852

Re: Bond Fund Duration ?

Is there some way to use bond funds and an investor be able to manage it in such a way as to expect their duration to get to zero at some certain date and expect they'll have earned a fair amount of interest AND return of principal? Or would this only be possible with individual bonds? Although it ...
by JoMoney
Wed Sep 17, 2014 3:35 am
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 852

Re: Premiums: Size, Value, Beta, Momentum

It should also be noted that the SmB (size) premium has not exited since FF published their 1993 research paper. Don't think this is quite true - if I understand what you are saying. This is what I get. 1993-2013 annualized return Vanguard 500 = 9.16% DFA US Microcap = 12.42% A 3.26% annualized ret...
by JoMoney
Wed Sep 17, 2014 3:23 am
 
Forum: Investing - Theory, News & General
Topic: Premiums: Size, Value, Beta, Momentum
Replies: 35
Views: 2331

Re: Bond Fund Duration ?

Given that a bond funds duration is perpetual, and there is no maturity date where one can expect to receive their principal back, if someone was relying/expecting to be able to spend their bond fund dividends and then sell their fund at a future date to receive their principal back, they may be unp...
by JoMoney
Tue Sep 16, 2014 5:12 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 852

Re: Ack! Bought a Dividend!

Is this "tongue in cheek"? A dividend is an "expense" because it might have a taxable portion? Darn those pesky dividends. Stop giving me money! I would actually like this question answered. I see this mentioned occasionally and just don't understand what the issue is. Someone i...
by JoMoney
Tue Sep 16, 2014 4:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ack! Bought a Dividend!
Replies: 26
Views: 2437

Re: Alibaba is NOT coming to an index near you

LazyNihilist wrote:Interesting. Would it be included in either CRSP US Total Market Index OR FTSE Global All Cap ex US Index?

Alibaba will be an ADR and will not be eligible for inclusion under CRSP's methodology for US Total Market.
by JoMoney
Tue Sep 16, 2014 7:45 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 31
Views: 3012

Re: Premiums: Size, Value, Beta, Momentum

Not really sure, just reading about what I think your talking about now... I think this "investment factor" is CMA "conservative minus aggressive" or "the accrual anomaly" http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2287202 http://papers.ssrn.com/sol3/papers.cfm?...
by JoMoney
Tue Sep 16, 2014 6:12 am
 
Forum: Investing - Theory, News & General
Topic: Premiums: Size, Value, Beta, Momentum
Replies: 35
Views: 2331

Re: Premiums: Size, Value, Beta, Momentum

There are several methods of looking at momentum investing. The Relative Strength indicator is one.
by JoMoney
Sun Sep 14, 2014 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Premiums: Size, Value, Beta, Momentum
Replies: 35
Views: 2331

Re: Time + Savings Rate > Asset Allocation

...The problem seems to be it is not as sexy as asset allocation. Asset allocation has the allure of promising higher returns, when ultimately as a group there are no "higher returns" in aggregate. All we'll ever get out of this world is the result of what we make, we'd be better off as a...
by JoMoney
Sun Sep 14, 2014 5:12 pm
 
Forum: Investing - Theory, News & General
Topic: Time + Savings Rate > Asset Allocation
Replies: 17
Views: 1644

Re: Understanding Shiller CAPE10

The CAPE focuses on data fromt he S&P 500. The remaining portion of the market that is not in the S&P500 is somewhere between 15-30% of the Total Market, the amount seems to shift over time. Generally, the S&P500 is considered as a proxy for the entire market, but if someone is looking a...
by JoMoney
Sun Sep 14, 2014 4:14 pm
 
Forum: Investing - Theory, News & General
Topic: Understanding Shiller CAPE10
Replies: 2
Views: 306

Re: The dangerous practice of rebalancing...

Wow. I'm a bit taken back by the shift in this thread. It started out being sarcastic and dismissive about anything other than constant-mix portfolio rebalancing, highlighting a few extreme points taken out of context from the article. Then we started bashing rebalancing... rebalancing isn't necessa...
by JoMoney
Sun Sep 14, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: Alibaba - how is style determined

...Ok but once there is history, what do they use. The Cayman entity's valuation metrics? Chinese Alibaba's valuation metrics? Does the book of the Cayman entity adjust as Chinese Alibaba's valuation changes? I can't see how the Cayman entity's valuation could be the same as Chinese Alibaba's. If y...
by JoMoney
Sun Sep 14, 2014 7:36 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba - how is style determined
Replies: 14
Views: 1291

Re: Alibaba - how is style determined

I'm not sure what type of active manager would be looking at Alibaba, the kind that do would probably consider themselves "growth" investors. As for a style index, that is a bit of a predicament, as there isn't much history on the stock to determine which characteristics relative to the av...
by JoMoney
Sun Sep 14, 2014 6:47 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba - how is style determined
Replies: 14
Views: 1291

Re: Two Fund real Lazy Portfolio?

The need for U.S. investors to have an international allocation is very popular advice, and has pretty much become the standard that has been established by the recognized finance authorities. Many people have bought into it, and will fervently insist that everybody else must do it as well. If you c...
by JoMoney
Sat Sep 13, 2014 11:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 33
Views: 3925

Re: The dangerous practice of rebalancing...

So, Here we are, with our Asset Allocations as prescribed in our Boglehead Investment Policy Statements. Say, 70/30 stocks/bonds. Next Tuesday, stocks drop 40%. Our AA is now 58/42. It seems to me we should rebalance, for stocks at the lower price are less risky than before. Is there an argument th...
by JoMoney
Sat Sep 13, 2014 1:21 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: The dangerous practice of rebalancing...

I haven't read the paper, but I suspect it is drawing from the well-known type of dynamic rebalancing strategy called "constant mix." Refer to the paper linked below, by some guy named Sharpe. http://www.cfapubs.org/doi/abs/10.2469/faj.v51.n1.1871 ... Thanks for the link. I like their con...
by JoMoney
Sat Sep 13, 2014 12:09 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: The dangerous practice of rebalancing...

...for the record, I'm not necessarily saying I think rebalancing and maintaining a constant-mix portfolio isn't a viable option. Just that it's not a "perfect plan", it has it's own unique risk/reward characteristics, and it may not suit everyone's risk preferences.
by JoMoney
Fri Sep 12, 2014 9:51 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: The dangerous practice of rebalancing...

Despite the dismissive tone some here put on the article, I think the author makes a good point. The idea of putting more and more of your "safe" fixed income money into a falling stock market isn't an automatic best practice and could be dangerous to your wealth. There is no guarantee's ...
by JoMoney
Fri Sep 12, 2014 9:27 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: The dangerous practice of rebalancing...

Despite the dismissive tone some here put on the article, I think the author makes a good point. The idea of putting more and more of your "safe" fixed income money into a falling stock market isn't an automatic best practice and could be dangerous to your wealth. There is no guarantee's t...
by JoMoney
Fri Sep 12, 2014 8:10 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 12009

Re: Buffett: Modern investment theory is horse-pucky

But to actually purchase it someone else must sell their shares (at least in the same way as for any other mutual fund). Just as with holding any deviation from the total market - someone is taking the other side of the trade and giving up their shares. That would seem to imply that there are a fix...
by JoMoney
Fri Sep 12, 2014 5:28 pm
 
Forum: Investing - Theory, News & General
Topic: Buffett: Modern investment theory is horse-pucky
Replies: 119
Views: 9319

Re: Buffett: Modern investment theory is horse-pucky

The benefits of owning a diverse portfolio large-leading stocks or the "Total Market" isn't dependent on MPT. Bogle has pointed out the flaws in these financial theories as well, but the benefits of low-cost indexing isn't reliant on MPT or EMH. A lot of the premises MPT relies on to creat...
by JoMoney
Thu Sep 11, 2014 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: Buffett: Modern investment theory is horse-pucky
Replies: 119
Views: 9319

Re: Future direction of U.S. stock market

For some S&G's, I used the Shiller data for the S&P, and made a chart of $1 of inflation adjusted growth in the S&P500 since the market highs of January 1973 through December of 2013. I then added a line showing what $1 of growth would look like using the "Shiller Constant" of ...
by JoMoney
Thu Sep 11, 2014 8:05 am
 
Forum: Investing - Theory, News & General
Topic: Future direction of U.S. stock market
Replies: 23
Views: 2091

Re: Future direction of U.S. stock market

http://i60.tinypic.com/29omvdu.png $10,000 in the S&P500 (Total Return, dividends reinvested) 40 years ago in 1974 grew to $931,413.44 today. That's a CAGR of 12.00% , Since $10,000 in 1974 is equivalent to $48,326.57 in 2014 dollars the "real" inflation adjusted CAGR would be 7.68% I...
by JoMoney
Thu Sep 11, 2014 6:51 am
 
Forum: Investing - Theory, News & General
Topic: Future direction of U.S. stock market
Replies: 23
Views: 2091

Re: Are Mid Caps the NEW Small Caps

No, as I said, I'm "tilted" a bit to large -caps, I'm 100% in S&P500. Hi JoMoney, The portfolio that Warren Buffett has recommended and set up for his wife - Vanguard S&P 500 index fund with treasury bonds! Best. Also chosen as the investment he put up against hedge funds to beat ...
by JoMoney
Wed Sep 10, 2014 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: Are Mid Caps the NEW Small Caps
Replies: 15
Views: 1704

Re: Are Mid Caps the NEW Small Caps

JohnnyFive wrote:...Out of curiosity, what does your portfolio look like? I'm assuming, from your response, you are slightly small cap or small value tilted?

No, as I said, I'm "tilted" a bit to large-caps, I'm 100% in S&P500.
by JoMoney
Wed Sep 10, 2014 4:47 pm
 
Forum: Investing - Theory, News & General
Topic: Are Mid Caps the NEW Small Caps
Replies: 15
Views: 1704

Re: Are Mid Caps the NEW Small Caps

Anything is possible. I'm not betting on it. I would not be surprised if the larger cap market outperformed, in fact I'm tilted in that direction (but for other reasons). Mid-caps are not "unloved", depending on how you define what a "mid-cap" is, they've outperformed most large ...
by JoMoney
Wed Sep 10, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: Are Mid Caps the NEW Small Caps
Replies: 15
Views: 1704

Re: Should anyone invest in short-term bonds at this point?

I have a chunk of savings in a short-term bond index fund. I keep telling myself the "smart" move is to just put it in an online high-yield savings account, but I'm just too lazy/stubborn to make the move. My expectation over the next few years is that the fund will net 0, with all of the ...
by JoMoney
Tue Sep 09, 2014 5:17 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3768

Re: Less than 30% of active fund managers beat their benchma

100% of index funds did not beat their benchmark. Fees matter. :wink: It seems that some do ... :twisted: Vanguard Institutional Index Fund Institutional Plus Shares Vanguard's super low fee institutional 500 funds beat the benchmark index pretty regularly even after expenses (with additional incom...
by JoMoney
Tue Sep 09, 2014 4:48 pm
 
Forum: Investing - Theory, News & General
Topic: Less than 30% of active fund managers beat their benchmarks
Replies: 18
Views: 888

Re: Simplicity vs. Complexity

...This. Seriously, altering the percentage of equities is cherry picking at best, and it is notable that the slice and dice is not along the lines of small or value. As far as the simple/ complex debate on a Boglehead website, how about using a boglehead slice and dice allocation rather than havin...
by JoMoney
Tue Sep 09, 2014 4:38 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3314

Re: Simplicity vs. Complexity

Don't confuse strategy with outcome. I realize the benefits of simplicity, but out-performing a portfolio with additional asset classes is not one of them. I think the article is showing that your assumption that other "asset classes" beat the market (or beat a "simple" portfoli...
by JoMoney
Tue Sep 09, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3314

Re: Less than 30% of active fund managers beat their benchma

...Maybe it's some bad benchmarking effect, like how active managers tilt smaller on the cap spectrum, but still stay in the same M* category, and if midcap and small cap do well, maybe they all look better than they should? I think this is what's happening, active managers are up against a headwin...
by JoMoney
Tue Sep 09, 2014 3:56 pm
 
Forum: Investing - Theory, News & General
Topic: Less than 30% of active fund managers beat their benchmarks
Replies: 18
Views: 888

Re: Less than 30% of active fund managers beat their benchma

livesoft wrote:I would not be surprised if less than 99% of index fund managers beat their benchmarks.

Looks like VTSAX get's the gold for the past one year period...
Image
by JoMoney
Tue Sep 09, 2014 7:51 am
 
Forum: Investing - Theory, News & General
Topic: Less than 30% of active fund managers beat their benchmarks
Replies: 18
Views: 888

Re: Simplicity vs. Complexity

Don't confuse strategy with outcome. I realize the benefits of simplicity, but out-performing a portfolio with additional asset classes is not one of them. I think the article is showing that your assumption that other "asset classes" beat the market (or beat a "simple" portfoli...
by JoMoney
Mon Sep 08, 2014 5:22 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3314

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

...From the articles and interview's on Vanguard's website, it appears that they acknowledge factor investing but stress a market cap total market approach to indexing. Many of their advisors have noted that anything else is a form of active management. ... I think what Vanguard argues, is that if ...
by JoMoney
Mon Sep 08, 2014 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 153
Views: 8755

Re: Peter Lynch was wrong

One could have bought high-quality long-term bonds yielding 6-7% back then as well. The claimed quote being attributed to him is a bit unclear on details as well, such as if he was considering that an inflation adjusted 6%, a fixed 6% from starting point, or a variable 6% of balance. How old / how m...
by JoMoney
Mon Sep 08, 2014 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: Peter Lynch was wrong
Replies: 64
Views: 6032

Re: market timing using moving averages /good news bad news

Data=Google daily last day of month. Only trades end of month. Yrs,BuyHold,Timing 10 0.110192402 0.097297333 20 0.078229845 0.073169158 30 0.065164741 0.061184626 40 0.072045888 0.054642882 50 0.086945962 0.057259421 60 0.071078906 0.064568171 ALL 0.074127522 0.070545126 I can't seem to get Google ...
by JoMoney
Mon Sep 08, 2014 4:10 pm
 
Forum: Investing - Theory, News & General
Topic: market timing using moving averages /good news bad news
Replies: 14
Views: 964
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