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by RNJ
Tue May 26, 2015 7:38 am
Forum: Personal Finance (Not Investing)
Topic: 2 million dollar mistake meeting with MIL's financial guy
Replies: 37
Views: 10164

Re: 2 million dollar mistake meeting with MIL's financial guy

I agree with most of what's been written. One small nit to pick: My million of life insurance would cost $16.6k annually. The cash value of that would be about 350k guaranteed at age 66 with a 1 million death benefit. If I just invested the 16.6k annually at 6.5% it would be worth 950k. How sure ar...
by RNJ
Mon May 25, 2015 7:59 pm
Forum: Personal Finance (Not Investing)
Topic: 2 million dollar mistake meeting with MIL's financial guy
Replies: 37
Views: 10164

Re: 2 million dollar mistake meeting with MIL's financial guy

I agree with most of what's been written. One small nit to pick: My million of life insurance would cost $16.6k annually. The cash value of that would be about 350k guaranteed at age 66 with a 1 million death benefit. If I just invested the 16.6k annually at 6.5% it would be worth 950k. How sure ar...
by RNJ
Mon May 25, 2015 7:17 pm
Forum: Personal Finance (Not Investing)
Topic: 2 million dollar mistake meeting with MIL's financial guy
Replies: 37
Views: 10164

Re: 2 million dollar mistake meeting with MIL's financial guy

I agree with most of what's been written. One small nit to pick: My million of life insurance would cost $16.6k annually. The cash value of that would be about 350k guaranteed at age 66 with a 1 million death benefit. If I just invested the 16.6k annually at 6.5% it would be worth 950k. How sure are...
by RNJ
Thu May 21, 2015 9:05 pm
Forum: Investing - Theory, News & General
Topic: Market Cap and Value
Replies: 46
Views: 2256

Re: Market Cap and Value

For example, portfolio visualizer reports that Vanguard large value has an HML loading about twice that of Vanguard mid value and Vanguard small value. But just eye-balling valuation ratios on Vanguard's site and at Morningstar, the ratios look about the same. Am I mistaken in thinking that factor ...
by RNJ
Tue May 19, 2015 2:06 pm
Forum: Investing - Theory, News & General
Topic: Is monthly rebalancing too frequent?
Replies: 38
Views: 2843

Re: Is monthly rebalancing too frequent?

What are you trying to achieve? There is no evidence I'm aware of that it will help your returns. Isn't the point of rebalancing to maintain a certain level of risk in a portfolio? That's certainly one rationale. But I'd suggest that if one needs to maintain a given level of "risk" (defin...
by RNJ
Tue May 19, 2015 1:21 pm
Forum: Investing - Theory, News & General
Topic: Is monthly rebalancing too frequent?
Replies: 38
Views: 2843

Re: Is monthly rebalancing too frequent?

What are you trying to achieve? There is no evidence I'm aware of that it will help your returns. Isn't the point of rebalancing to maintain a certain level of risk in a portfolio? That's certainly one rationale. But I'd suggest that if one needs to maintain a given level of "risk" (defin...
by RNJ
Sat May 16, 2015 10:31 am
Forum: Investing - Theory, News & General
Topic: Is monthly rebalancing too frequent?
Replies: 38
Views: 2843

Re: Is monthly rebalancing too frequent?

What are you trying to achieve? There is no evidence I'm aware of that it will help your returns.
by RNJ
Thu May 14, 2015 12:20 pm
Forum: Investing - Theory, News & General
Topic: One stop shopping for moderate US tilt?
Replies: 2
Views: 249

Re: One stop shopping for moderate US tilt?

Looking at it from another POV, if most of your bonds are domestic, you are already "tilted" on that side. I'm 30% equity, half international and EM. But all my bonds are domestic, so I'm overwhelmingly "tilted" domestic. Thanks for your response. I should have been more clear. ...
by RNJ
Thu May 14, 2015 10:59 am
Forum: Investing - Theory, News & General
Topic: One stop shopping for moderate US tilt?
Replies: 2
Views: 249

One stop shopping for moderate US tilt?

If I wanted to build a moderately tilted US portfolio today, from scratch (my large holding of VTI in taxable precludes this - so this is really a thought experiment), couldn't I simply buy VOE (mkt = .98; smb = .22; hml = .41 * ) and call it a day? http://www.bogleheads.org/forum/viewtopic.php?f=10...
by RNJ
Tue May 12, 2015 1:25 pm
Forum: Investing - Theory, News & General
Topic: Reducing the Black Swans
Replies: 57
Views: 5396

Re: Reducing the Black Swans

JohnFiscal wrote:Can we define "SV", please. It's not listed in the Nomenclature page (https://www.bogleheads.org/wiki/Abbrevi ... ronyms#R-T) and I can think of several variations...that change the meaning of the discussion from my naïve perspective.


SV = Small Value
by RNJ
Mon May 11, 2015 12:36 pm
Forum: Investing - Theory, News & General
Topic: International - Who really is at 40%
Replies: 93
Views: 6703

Re: International - Who really is at 40%

Currently bit over 50% international (including EM). Long term allocation target 50% with no plans to change.
by RNJ
Sun May 03, 2015 11:25 pm
Forum: Investing - Theory, News & General
Topic: Market timing using CAPE, dividends or P/E? Forgetaboutit!
Replies: 8
Views: 1289

Re: Market timing using CAPE, dividends or P/E? Forgetaboutit!

Rick, I am a longtime admirer and beneficiary of your work. I have always thought of you as one of the "good guys". However, I must take exception with a single yet critical aspect of your post. Hailing from a certain part of New Jersey, I write with certainty that the spelling you were af...
by RNJ
Sun May 03, 2015 11:12 pm
Forum: Investing - Theory, News & General
Topic: the missing value premium
Replies: 34
Views: 3347

Re: the missing value premium

Perhaps the takeaway is to first do no harm. That is to say, if one is going to tilt (and I do), keep expenses and negative alphas low.
by RNJ
Thu Apr 30, 2015 4:14 pm
Forum: Investing - Theory, News & General
Topic: MSCI Diversified Multi-Factor Index
Replies: 36
Views: 3830

Re: MSCI Diversified Multi-Factor Index

Fair enough. I played around a bit with some factor data last night. I estimated VBR has an SMB / HML/ UMD load of 0.58 / 0.58 / -.09 . On the other hand VOE has an SMB / HML load of 0.24 / 0.51 / -0.09. I think it is perfectly to combine both of these with momentum to reduce tracking error. As I r...
by RNJ
Wed Apr 29, 2015 10:14 am
Forum: Investing - Theory, News & General
Topic: Risk Aversion vs. Loss Aversion
Replies: 17
Views: 1297

Re: Risk Aversion vs. Loss Aversion

Very interesting question. At the individual level, I think the only way to really tell the difference is a through a retrospective (post hoc) analysis of one's behavior during a severe and perhaps prolonged bear market. Actions taken while watching money "disappear" might be telling.
by RNJ
Sat Mar 28, 2015 9:24 am
Forum: Investing - Help with Personal Investments
Topic: Your opinions on my portfolio
Replies: 15
Views: 1722

Re: Your opinions on my portfolio

Vanguard Lifestrategy Funds are NOT managed (as in "actively managed"). They are "all-in-one" funds made up of 4 indices: US Total Stock, Total Int Stock, US Total Bond, Int Bond. They maintain a fixed allocation, rebalancing for you with inflows. The expense ratio is .16% - very...
by RNJ
Sat Mar 28, 2015 9:13 am
Forum: Investing - Theory, News & General
Topic: Value investing doesn't even beat the S&P 500
Replies: 55
Views: 5965

Re: Value investing doesn't even beat the S&P 500

The paper was more about the "behavior gap" than it was about value investing. The paper did say that value outperformed the S&P 500 but value investors did not. This was due to the "behavior gap." The paper said that the behavior gap for value investors was less than for gr...
by RNJ
Sat Mar 28, 2015 7:21 am
Forum: Investing - Theory, News & General
Topic: Value investing doesn't even beat the S&P 500
Replies: 55
Views: 5965

Re: Value investing doesn't even beat the S&P 500

Just read the original article. One interesting piece for me is that with respect to whether the "value premium" is a product of risk or behavior, the author writes:

"
The two camps can argue endlessly. We have nothing to contribute to that disagreement."


Really? Nothing?
by RNJ
Sat Mar 28, 2015 6:47 am
Forum: Investing - Help with Personal Investments
Topic: Your opinions on my portfolio
Replies: 15
Views: 1722

Re: Your opinions on my portfolio

For a static allocation, this is what I would, and have, told family: Vanguard Lifestrategy Funds. This is a single fund solution, with the asset allocation assembled by some of the best minds in the business, and they do the rebalancing for you. Not perfect, but very, very close. Simple and elegant...
by RNJ
Thu Mar 26, 2015 5:06 pm
Forum: Investing - Theory, News & General
Topic: New all-world Small-Cap multi-factor ETF
Replies: 4
Views: 690

New all-world Small-Cap multi-factor ETF

An answer for the non-DFA slice 'n dicers? For 60bp? Heard it on Bloomberg and couldn't resist posting.

Have at it!

http://www.latticestrategies.com/strategies/LROGSX.html


http://www.latticestrategies.com/PDFs/indexes/LatticeStrategies_LROGSX_3-23-15.pdf
by RNJ
Mon Mar 23, 2015 6:29 am
Forum: Investing - Help with Personal Investments
Topic: Municiple Fund as Emergency
Replies: 8
Views: 1066

Re: Municiple Fund as Emergency

We don't have an emergency fund, per se. We do think of our muni fund as a potential source of cash in case of an emergency (after a an unsecured line of credit at an absurdly low interest rate), but there is no separate accounting - it's part of our AA. With that in mind, we use Baird Intermediate ...
by RNJ
Sat Mar 21, 2015 10:52 am
Forum: Investing - Theory, News & General
Topic: Is it time to give-up on TIPS?
Replies: 113
Views: 15346

Re: Is it time to give-up on TIPS?

Is it time to give-up on TIPS? Having money is an excellent buffer for financial problems, as is being willing to adapt. Agree with both these points. ... Is it time to give-up on TIPS? Fully owning your own home or being willing to move are both good inflation buffers. Having discretionary spendin...
by RNJ
Fri Mar 20, 2015 6:29 pm
Forum: Investing - Theory, News & General
Topic: Managing Endowment Funds in a Bogleheaded Way
Replies: 3
Views: 531

Re: Managing Endowment Funds in a Bogleheaded Way

You might try these threads. I went through a similar process this past year at a non-profit where I am on the board. After an initial decision by the finance committee to go with an advisor (1.6%, all in), I lobbied for a Vanguard all-in-one fund approach. Simplicity, diversification and cost won t...
by RNJ
Fri Mar 20, 2015 2:44 pm
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 130
Views: 11811

Re: PXSV has changed indexes

Just to clarify, it's not for lack of trust, respect, admiration or gratitude to certain forum members that I made my earlier comment. To the contrary, it is because of those feelings. I suppose I could just copy Robert T's allocation (for example). But the only rational justification I'd have to do...
by RNJ
Thu Mar 19, 2015 7:15 pm
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 130
Views: 11811

Re: PXSV has changed indexes

I have a concern that even the smartest among us (Robert T and Grap are two posters who I look to for advice, especially in the small/value tilting arena) are guilty, to some degree, of performance chasing. I say this because, if it weren't for the fact that the Schwab Russell Fund Small Company ET...
by RNJ
Sat Mar 14, 2015 12:54 am
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9943

Re: How much international is too much?

also on the fact that all of my fixed income, all of my personally held real estate, and my job, are US dollar denominated. This is usually considered to be an argument for investing in U.S. stocks--because you experience currency risk in your international stocks but not your domestic stocks. Just...
by RNJ
Sat Mar 14, 2015 12:26 am
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 130
Views: 11811

Re: PXSV has changed indexes

Lest we forget, companies such as Invesco exist to make money from investors, not for them. As such, they are marketing companies masquerading as investment companies. Most of the funds in question trade by appointment, and all failed to attract enough assets to satisfy the good people at Invesco, L...
by RNJ
Tue Mar 10, 2015 9:26 am
Forum: Investing - Theory, News & General
Topic: Poll: Increasing international equities
Replies: 70
Views: 5581

Re: Poll: Increasing international equities

Holding steady with a 50% international target.
by RNJ
Mon Mar 09, 2015 11:45 am
Forum: Investing - Theory, News & General
Topic: International value: worth the fees?
Replies: 24
Views: 2175

Re: International value: worth the fees?

PXF - Powershares RAFI Developed Mkt, ER .47
PDN - PowerShares FTSE RAFI Developed Markets ex U.S. Small Mid Portfolio, ER .5

Lots of threads on these.

Also, if you purchase value, you should plan to measure your relative returns over years/decades. Otherwise, market-cap is the way to go.
by RNJ
Mon Mar 09, 2015 11:38 am
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 24633

Re: Bernstein: 2% investment returns over next 20 years

This is a terrific, all too brief, interview - in spite of the interviewer. In my view, OP has latched onto the least important aspect of the piece.
by RNJ
Fri Mar 06, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: What's your average ER? [Expense Ratio]
Replies: 123
Views: 8125

Re: What's your average ER? [Expense Ratio]

Seattlenative wrote: So what is the average, AA-weighted ER of your portfolios?


.17% for an international, small and value tilted portfolio.
by RNJ
Sun Feb 22, 2015 1:33 am
Forum: Investing - Theory, News & General
Topic: A case for long term government bonds
Replies: 40
Views: 3449

Re: A case for long term government bonds

Two quick and unrelated questions for the guys and gals considering loading up on LT treasuries: 1) Have you not considered investing for total return (rather than income)? 2) How does the psychology of increasing or initiating, at this moment, a position in LT treasuries differ from increasing or i...
by RNJ
Sun Feb 22, 2015 1:14 am
Forum: Investing - Theory, News & General
Topic: Best Use of TIPS Fund in Retirement
Replies: 17
Views: 1761

Re: Best Use of TIPS Fund in Retirement

What, exactly, are you trying to accomplish by buying a TIPS ladder? The ladder was intended to annuitize a healthy portion of the portfolio and secure a comfortable floor of income with unexpected inflation protection for the next 30 years This can be accomplished with a ladder, not a fund. If you...
by RNJ
Sat Jan 31, 2015 12:04 pm
Forum: Investing - Help with Personal Investments
Topic: Glide Path questions
Replies: 3
Views: 2092

Re: Glide Path questions

Thanks for your responses.
by RNJ
Wed Jan 28, 2015 11:08 pm
Forum: Investing - Help with Personal Investments
Topic: Glide Path questions
Replies: 3
Views: 2092

Glide Path questions

Hi All. My wife and I have been on a 1% per year glide path beginning 3 years ago (as per our IPS). I have made only small equity sales, and only of US holdings, over the years in order to rebalance, and have managed to offset these gains with TLHs. I have kept our portfolio mostly on track with res...
by RNJ
Mon Jan 12, 2015 8:35 am
Forum: Investing - Theory, News & General
Topic: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit?
Replies: 87
Views: 6548

Re: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit

On my highway drive home I pass a number of gas stations. Yesterday, I found myself passing station after station, looking for for the lowest price. I finally came to my exit and thought,"I'll fill up tomorrow. It'll most likely be cheaper anyway." Now imagine that that kind of thinking se...
by RNJ
Thu Jan 08, 2015 2:43 pm
Forum: Investing - Theory, News & General
Topic: A mortgage prepayment puzzler
Replies: 15
Views: 1703

Re: A mortgage prepayment puzzler

Thank you all for your very thoughtful and helpful responses. These responses undid the tightening knot in my brain: Keep it simple. :happy Simple way to look at it is, if you make a $20k prepayment you never pay interest on that $20k again. Yes, the monthly payment stays the same. But as others hav...
by RNJ
Thu Jan 08, 2015 8:27 am
Forum: Investing - Theory, News & General
Topic: A mortgage prepayment puzzler
Replies: 15
Views: 1703

A mortgage prepayment puzzler

Here we go: Let's say I purchased a home one year ago with a 30 year fixed rate mortgage at 5% (the rate isn't material) for $200,000. This year I decide to prepay (let's say) $20,000. If I understand correctly, my monthly payments will remain the same until the loan is payed off in (let's say) year...
by RNJ
Thu Dec 11, 2014 8:41 am
Forum: Investing - Theory, News & General
Topic: Another Great Asness/AQR Blog Post - Perspective
Replies: 38
Views: 2918

Asness: "Efficient Frontier Theory for the Long Run"

Here is a terrific article from Cliff Asness on market theory and the time it may take to realize "expected returns." Clear language, excellent illustrations. A must read (IMHO).

https://www.aqr.com/cliffs-perspective/efficient-frontier-theory-for-the-long-run
by RNJ
Wed Dec 10, 2014 10:48 pm
Forum: Investing - Help with Personal Investments
Topic: VSS / IDV reallocation [which one to taxable?]
Replies: 10
Views: 1288

Re: VSS / IDV reallocation [which one to taxable?]

Have you considered PowerShares FTSE RAFI Dev Mkts ex-US ETF (PXF) as an alternative to IDV and/or EFV?

http://www.bogleheads.org/forum/viewtopic.php?t=44133
by RNJ
Wed Dec 03, 2014 8:32 am
Forum: Investing - Help with Personal Investments
Topic: Timing a tax-loss harvest
Replies: 5
Views: 640

Re: Timing a tax-loss harvest

Hi All. I have a loss to "harvest" (boy do I love that euphemism) in PXF (Powershares FTSE RAFI Dev Mkts ETF). In my view, the natural TLH partner is EFV (iShares MSCI EAFE Value ETF), some of which I already own. My question is this: As the yield of EFV is higher than that of PXF, should...
by RNJ
Tue Dec 02, 2014 2:20 pm
Forum: Investing - Help with Personal Investments
Topic: Timing a tax-loss harvest
Replies: 5
Views: 640

Re: Timing a tax-loss harvest

Perhaps if you do not want to worry about figuring out your personal qualified dividend story on these shares, you should do something so that you hold whatever shares give you a dividend for the 61 days minimum required time period. Or if you cannot hold for the 61 days, then make sure you are not...
by RNJ
Tue Dec 02, 2014 1:48 pm
Forum: Investing - Help with Personal Investments
Topic: Timing a tax-loss harvest
Replies: 5
Views: 640

Timing a tax-loss harvest

Hi All. I have a loss to "harvest" (boy do I love that euphemism) in PXF (Powershares FTSE RAFI Dev Mkts ETF). In my view, the natural TLH partner is EFV (iShares MSCI EAFE Value ETF), some of which I already own. My question is this: As the yield of EFV is higher than that of PXF, should ...
by RNJ
Tue Sep 09, 2014 7:46 pm
Forum: Personal Consumer Issues
Topic: A 'really good book' you did NOT enjoy
Replies: 229
Views: 13043

Re: A 'really good book' you did NOT enjoy

1) Moby Dick. Every word. Twice.

2) The Psychoanalytic Theory of Neurosis, Otto Fenichel.
by RNJ
Mon Sep 08, 2014 8:40 am
Forum: Investing - Theory, News & General
Topic: What pct of stocks is needed to offer decent inflation prote
Replies: 32
Views: 3113

Re: What pct of stocks is needed to offer decent inflation p

Zero. You could buy 100% TIPS. I think this path is too often overlooked. It addresses directly the question posed and does so in as close to a risk-free way as possible. I have read a thousand posts about needing stocks to help to keep up with inflation........my goal is preservation of capital wi...
by RNJ
Sat Aug 09, 2014 11:53 pm
Forum: Investing - Theory, News & General
Topic: "The Cost of Chasing Returns" from St Louis Fed
Replies: 6
Views: 900

"The Cost of Chasing Returns" from St Louis Fed

A few months ago, we highlighted research showing how much chasing returns in equity mutual fund investing can reduce performance, noting that this behavior had cost investors around 2 percent per year over the period 2000-2012. New research over a longer period of time shows similar results. http:...
by RNJ
Sat Jul 19, 2014 8:20 pm
Forum: Investing - Theory, News & General
Topic: Favorite portfolio tracking software
Replies: 14
Views: 2007

Re: Favorite portfolio tracking software

What specifically do you want to track? I've been using Google Docs for about a year, tracking 11 accounts across two brokerage firms. I update dividends and interest once per month and add transactions as they occur.
by RNJ
Sun Jul 13, 2014 9:50 am
Forum: Investing - Help with Personal Investments
Topic: Emerging Markets: making up 5% of your equities?
Replies: 47
Views: 3846

Re: Emerging Markets: making up 5% of your equities?

I've read that holding any amount of emerging markets less than 5% of your total equities isn't going to do very much in terms of helping soften potential falls in US equities . I believe you are referring to a potential diversification benefit in holding a dedicated EM allocation. A quick look at ...

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