Search found 7937 matches

by Rick Ferri
Fri Aug 28, 2015 9:00 pm
Forum: Investing - Theory, News & General
Topic: Having fun on CNBC Halftime Report today
Replies: 9
Views: 1381

Re: Having fun on CNBC Halftime Report today

Kalo wrote:What about the fact that a further strengthening dollar (which we would expect from a rate increase while the rest of the world is decreasing rates) hurts US exports?

Kalo


Could be. It could also be that domestic demand increases more and overshadows a small drop in foreign exports.

Rick Ferri
by Rick Ferri
Fri Aug 28, 2015 8:04 pm
Forum: Investing - Theory, News & General
Topic: Having fun on CNBC Halftime Report today
Replies: 9
Views: 1381

Having fun on CNBC Halftime Report today

I was a guest on the CNBC Halftime Report today. We talked about why a Fed rate hike isn't such a bad thing.

Here is the 5 minute video link: Embracing Rising Rates

Rick Ferri
by Rick Ferri
Wed Aug 26, 2015 5:19 pm
Forum: Investing - Theory, News & General
Topic: S & P 500's Global Sales
Replies: 13
Views: 1146

Re: S & P 500's Global Sales

More data on what this thread is about:

Should You Own Foreign Stocks?

Rick Ferri
by Rick Ferri
Wed Aug 26, 2015 5:17 pm
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 419
Views: 80157

Re: Rick Ferri looking to internationalize his portfolio

sergeant wrote:
Rick Ferri wrote:We're almost there.

Rick Ferri

Are we there yet?


Not yet. Maybe later this year. I'm in no hurry.

Rick Ferri
by Rick Ferri
Tue Aug 25, 2015 5:17 pm
Forum: Investing - Theory, News & General
Topic: Messy Fund Managers Create an Illusion of Skill
Replies: 8
Views: 896

Re: Messy Fund Managers Create an Illusion of Skill

Whether or not it is "messy" may just be an opinion based on the frame of reference for the person looking at the portfolio (who may not understand it). Academics focused on the idea that the market is "Efficient" don't have methodologies to look at a portfolio that may require ...
by Rick Ferri
Tue Aug 25, 2015 5:13 pm
Forum: Investing - Theory, News & General
Topic: What to do in this market environment
Replies: 3
Views: 1463

Re: What to do in this market environment

Only if you're sure the market isn't going down further in the next market environment.

Rick Ferri
by Rick Ferri
Tue Aug 25, 2015 2:22 pm
Forum: Investing - Theory, News & General
Topic: Messy Fund Managers Create an Illusion of Skill
Replies: 8
Views: 896

Re: Messy Fund Managers Create an Illusion of Skill

The fair way to rank managers is by using a 3- or 5-factor model. This takes out the strategy biases of manager. Unfortunately, Morningstar doesn't report 3- and 5- factor rankings (it is available at the institutional level I am told). Retail investors are stuck with style box comparisons and peer ...
by Rick Ferri
Tue Aug 25, 2015 2:17 pm
Forum: Investing - Theory, News & General
Topic: Messy Fund Managers Create an Illusion of Skill
Replies: 8
Views: 896

Re: Messy Fund Managers Create an Illusion of Skill

I would not describe a fund manager who does not stay in a particular size/value-vs-growth style box as "messy", unless the fund is mandated to do so. If you are going to hire an active manager, it is reasonable to give him discretion to buy the stocks that he thinks have the highest expe...
by Rick Ferri
Tue Aug 25, 2015 2:06 pm
Forum: Investing - Theory, News & General
Topic: What to do in this market environment
Replies: 3
Views: 1463

What to do in this market environment

"Rick, what are you doing in this market environment?” I’ve been asked this question thousands of times and still don’t know what people are asking. Are they expecting me to forecast the market, give advice on stocks or bonds, or are they asking what I'm doing this weekend? I can answer the las...
by Rick Ferri
Tue Aug 25, 2015 10:50 am
Forum: Investing - Theory, News & General
Topic: Messy Fund Managers Create an Illusion of Skill
Replies: 8
Views: 896

Messy Fund Managers Create an Illusion of Skill

Mutual fund rating services divide mutual funds into categories based on their investment style. This helps investors compare the performance of one style to another and helps them compare the performance of individual funds in a particular style. While useful in many ways, this methodology can also...
by Rick Ferri
Fri Aug 21, 2015 4:00 pm
Forum: Investing - Theory, News & General
Topic: Tips on answering the question - What Should I Do?
Replies: 163
Views: 205372

Re: Tips on answering the question - What Should I Do?

There is some equity risk in corporate bond returns at times, and if you feel uncomfortable with that, you might want to own more government backed bonds. My view is to be diversified. It's OK to accept the higher risk of corporate bonds because we're paid for it, but also have government bonds. Tha...
by Rick Ferri
Wed Aug 19, 2015 1:31 pm
Forum: Investing - Theory, News & General
Topic: A deeper look at gold. What's the "right" price?
Replies: 45
Views: 3117

Re: A deeper look at gold. What's the "right" price?

Yeah. Let it hit $500, then wait another 10 years and your timing will be good.

Rick

PS. People are now predicting oil will go down to $15-$20 per barrel - so we must be near a bottom at $40.
by Rick Ferri
Wed Aug 19, 2015 1:27 pm
Forum: Investing - Theory, News & General
Topic: A deeper look at gold. What's the "right" price?
Replies: 45
Views: 3117

Re: A deeper look at gold. What's the "right" price?

The right price for gold is around $500 per ounce, give or take $100. This is the inflation-adjusted value going back about 3,000 years. Many times in history, gold has tripled in value, only to fall back to it's inflation-adjusted price over the next decade or so.

Rick Ferri
by Rick Ferri
Tue Aug 18, 2015 4:30 pm
Forum: Investing - Theory, News & General
Topic: Should you own foreign stocks?
Replies: 67
Views: 4351

Re: Should you own foreign stocks?

There is a portfolio benefit to re-balancing currencies to a fixed US/International allocation over time.

Rick Ferri
by Rick Ferri
Tue Aug 18, 2015 4:20 pm
Forum: Investing - Theory, News & General
Topic: Should you own foreign stocks?
Replies: 67
Views: 4351

Re: Should you own foreign stocks?

I prefer un-hedged equity funds because I want the currency diversification.

Rick Ferri
by Rick Ferri
Tue Aug 18, 2015 9:14 am
Forum: Investing - Theory, News & General
Topic: Should you own foreign stocks?
Replies: 67
Views: 4351

Re: Should you own foreign stocks?

Currently, it is 30%, but I plan to increase this to 40% at some time given the greater globalization in the equity markets (The US market is currently 52% of global equity). See this post. I do not know when I'll actually make this move. Perhaps by the end of 2015, or maybe in early 2016. Taxes are...
by Rick Ferri
Tue Aug 18, 2015 9:04 am
Forum: Investing - Theory, News & General
Topic: Should you own foreign stocks?
Replies: 67
Views: 4351

Re: Should you own foreign stocks?

Global stocks become more highly correlated after the introduction of the Euro as TwoByFour noted. The Euro Zone comprises the largest portion of the international equity market, so consolidating currencies into the Euro had the affect of increasing correlations. However, this is not a reason to no ...
by Rick Ferri
Tue Aug 18, 2015 8:47 am
Forum: Investing - Theory, News & General
Topic: Should you own foreign stocks?
Replies: 67
Views: 4351

Re: Should you own foreign stocks?

Nice article. I am having trouble understanding the effect of the so called tax inversions on what is considered a foreign company. As U.S. companies relocate their tax domicile to another country...are they still domestic or are they foreign? Does the exchange a company is listed on determine whet...
by Rick Ferri
Tue Aug 18, 2015 8:25 am
Forum: Investing - Theory, News & General
Topic: Should you own foreign stocks?
Replies: 67
Views: 4351

Should you own foreign stocks?

For as long as I have followed Vanguard Group founder and former CEO John Bogle, he has never embraced investing in foreign stocks. “I wouldn’t invest outside the U.S.” he said during an interview with Carla Fried for Bloomberg Business. “If someone wants to invest 20 percent or less of their portfo...
by Rick Ferri
Fri Aug 14, 2015 6:26 pm
Forum: Investing - Theory, News & General
Topic: Tips on answering the question - What Should I Do?
Replies: 163
Views: 205372

Re: Tips on answering the question - What Should I Do?

One bond fund works just fine! The Total Bond is a good choice, or Investment Grade, or intermediate tax free, or a CD ladder.

Rick Ferri
by Rick Ferri
Thu Aug 13, 2015 9:17 pm
Forum: Investing - Theory, News & General
Topic: The Big AAPL and the S&P 500
Replies: 20
Views: 3079

Re: The Big AAPL and the S&P 500

BTW, this is a free country, and you are certainly welcome to do more research and write an article that extends on the subject. Rick If your are going to link articles from your personal website (which I don't think is kosher) then I think you should be willing to take criticism. Let's be fair abo...
by Rick Ferri
Thu Aug 13, 2015 2:58 pm
Forum: Investing - Theory, News & General
Topic: More Individual Municipal Bond Shenanigans [Edward Jones SEC overcharge settlement]
Replies: 27
Views: 2107

Re: More Individual Municipal Bond Shenanigans

Rick, Since you bring it up: What do you think of financial advisors putting their clients into individual bonds rather than funds. My company was managing over $300 mm in individual municipal bonds at one time. Now we only use low-cost municipal bond funds. You can't beat them for their diversific...
by Rick Ferri
Thu Aug 13, 2015 10:23 am
Forum: Investing - Theory, News & General
Topic: The Big AAPL and the S&P 500
Replies: 20
Views: 3079

Re: The Big AAPL and the S&P 500

Er, this article was rather disappointing. Very short, very little historical perspective, comparisons with past juggernauts is limited to IBM without any details. The most disappointing part is the complete lack of analysis on the difference between the S&P500 and the Total Market, although th...
by Rick Ferri
Thu Aug 13, 2015 10:08 am
Forum: Investing - Theory, News & General
Topic: More Individual Municipal Bond Shenanigans [Edward Jones SEC overcharge settlement]
Replies: 27
Views: 2107

More Individual Municipal Bond Shenanigans [Edward Jones SEC overcharge settlement]

Here is another reason I like municipal bond funds. Bond dealers take advantage of retail investors: Edward Jones to Pay $20 Million for Overcharging Retail Customers in Municipal Bond Underwritings "The Securities and Exchange Commission today announced that St. Louis-based brokerage firm Edwa...
by Rick Ferri
Thu Aug 13, 2015 9:05 am
Forum: Investing - Theory, News & General
Topic: The Big AAPL and the S&P 500
Replies: 20
Views: 3079

Re: The Big AAPL and the S&P 500

Apple didn't pay a div from 1996 to 8/2012. How much would that change the numbers? If Apple retained all earnings rather than pay a dividend, the price of AAPL would probably be higher today and this would have affected the price-only return of the S&P 500. But since it didn't happen, there is...
by Rick Ferri
Tue Aug 11, 2015 4:09 pm
Forum: Investing - Theory, News & General
Topic: "Vanguard Funds vs. Dimensional Funds in New IFA Index Portfolios" -- What's The Deal?
Replies: 46
Views: 3885

Re: "Vanguard Funds vs. Dimensional Funds in New IFA Index Portfolios" -- What's The Deal?

Back to Rick's paper... On page 18, under the section labeled "Scenario 5: Risk-Adjusted Performance", this is the direct quote from the 2nd paragraph... "The risk metric used was the Sharpe ratio." That single sentence loops me right back to my core question... what is the prop...
by Rick Ferri
Tue Aug 11, 2015 9:00 am
Forum: Investing - Theory, News & General
Topic: The Big AAPL and the S&P 500
Replies: 20
Views: 3079

The Big AAPL and the S&P 500

Most people still associate The Big Apple with NYC, but there may be a challenger. The challenger is Apple, Inc. (ticker: AAPL). Apple is the most valuable corporation in the world. At around $700 billion in market capitalization, AAPL’s free-float market capitalization is nearly twice the value of ...
by Rick Ferri
Mon Aug 10, 2015 11:31 am
Forum: Investing - Theory, News & General
Topic: Our Mistakes Benefit Future Generations
Replies: 27
Views: 5301

Re: Our Mistakes Benefit Future Generations

Rick, I am finishing up my final semester of a MS Finance program this fall. Most students are in their late 20's or early 30's. One of my final courses has your book " All about index funds: The easy way to get started " as a required text for the course. Just wanted to let you know you ...
by Rick Ferri
Mon Aug 10, 2015 10:46 am
Forum: Investing - Theory, News & General
Topic: "Seek Investment Love, not Lust"
Replies: 4
Views: 616

"Seek Investment Love, not Lust"

This WSJ blog I wrote isn't going to win a Pulitzer Prize for investigative journalism, but it might help convert at few lost souls:

Seek Investment Love, not Lust

Spread the love... :D

Rick Ferri
by Rick Ferri
Fri Aug 07, 2015 12:20 pm
Forum: Local Chapters and Bogleheads Community
Topic: Congrats to Laura Dogu
Replies: 61
Views: 5818

Re: Congrats to Laura Dogu

Outstanding! We have an ambassador among us!

That's great news, Ambassador Dogu.

Rick
by Rick Ferri
Wed Aug 05, 2015 9:56 am
Forum: Investing - Theory, News & General
Topic: Our Mistakes Benefit Future Generations
Replies: 27
Views: 5301

Re: Our Mistakes Benefit Future Generations

Very slow progress, but progress. Hoping by the end of the year.

Rick Ferri
by Rick Ferri
Tue Aug 04, 2015 3:48 pm
Forum: Investing - Theory, News & General
Topic: 3 Reasons to Rejoice Higher Interest Rates
Replies: 54
Views: 7253

Re: 3 Reasons to Rejoice Higher Interest Rates

I would include a comment on reinvesting interest payments and taxes. These factors determine number of years required to recover losses in the event of a rate increase. That's true. If there is higher inflation, then taxes and inflation together can actually create lower real after-tax returns. It...
by Rick Ferri
Tue Aug 04, 2015 1:14 pm
Forum: Investing - Theory, News & General
Topic: 3 Reasons to Rejoice Higher Interest Rates
Replies: 54
Views: 7253

Re: 3 Reasons to Rejoice Higher Interest Rates

Obviously. Real rates have been below average for a long time. I assume in the article that real rates go back to the average.

Rick Ferri
by Rick Ferri
Tue Aug 04, 2015 9:54 am
Forum: Investing - Theory, News & General
Topic: 3 Reasons to Rejoice Higher Interest Rates
Replies: 54
Views: 7253

3 Reasons to Rejoice Higher Interest Rates

Interest rates are going up. The Federal Reserve has essentially said so. They just haven’t said exactly when or by how much. Are you afraid of higher interest rates? If so, what you fear is probably the potential bad side. While they may have a dampening effect, there also are some silver linings t...
by Rick Ferri
Tue Aug 04, 2015 9:41 am
Forum: Investing - Theory, News & General
Topic: Financial Analyst - "Were they right" website
Replies: 4
Views: 972

Re: Financial Analyst - "Were they right" website

Financial analysts are never wrong: we're either early or late.

:wink:

Rick Ferri
CFA
by Rick Ferri
Mon Aug 03, 2015 9:35 am
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 8485

Re: Allan Roth Says to Avoid Muni Bonds

Yes, but he also recommended muni bond funds:

" Buying a low-cost muni bond fund through firms like iShares or Vanguard will avoid both the income illusion and the illiquidity issues mentioned earlier."

Rick Ferri
by Rick Ferri
Fri Jul 31, 2015 10:59 am
Forum: Investing - Theory, News & General
Topic: Factors or Fundamentals?
Replies: 38
Views: 1670

Re: Factors or Fundamentals?

What's changed is the expanding definition of this thing called an index. It used to be an index was a cap weighted representation of a market - a benchmark. Since 2003, indexing has expended to include investment strategies, many which use fundamental selection and weighting methodologies. Strategy...
by Rick Ferri
Thu Jul 30, 2015 4:49 pm
Forum: Investing - Theory, News & General
Topic: Everybody is sick of gold - Is now the time to buy??
Replies: 37
Views: 4666

Re: Everybody is sick of gold - Is now the time to buy??

Five scoop,

Doesn't matter if I'm right or wrong because I don't invest in gold...except for that gold wedding ring, which was the best investment I ever made! ;-)
by Rick Ferri
Thu Jul 30, 2015 12:09 pm
Forum: Investing - Theory, News & General
Topic: Everybody is sick of gold - Is now the time to buy??
Replies: 37
Views: 4666

Re: Everybody is sick of gold - Is now the time to buy??

I'd give it another 10 years.

Here is a 2013 blog I did on gold when it was at $1,400. My prediction then was $600. I'll stick with that.

Gold Bugs Swatted Again

Rick Ferri
by Rick Ferri
Thu Jul 30, 2015 10:45 am
Forum: Investing - Theory, News & General
Topic: Bond Prices and Anticapted FED Increae
Replies: 5
Views: 670

Re: Bond Prices and Anticapted FED Increae

Bond prices are determined by the markets, not the Federal Reserve. The Fed can only indirectly influence prices through monetary policy decisions, such as setting the overnight interest rate for bank borrowing.

Rick Ferri
by Rick Ferri
Tue Jul 28, 2015 1:24 pm
Forum: Investing - Theory, News & General
Topic: Rick’s Top Ten List of When Not To Invest
Replies: 16
Views: 4179

Rick’s Top Ten List of When Not To Invest

This is a full reprint from my recent blog . Oh, how painful it has been to learn these lessons. I’ve been around the investment industry for a long time and have made plenty of mistakes. I’ve also seen a lot of variations on the theme of investing, some of which have made the industry better and o...
by Rick Ferri
Tue Jul 28, 2015 11:39 am
Forum: Investing - Theory, News & General
Topic: A bit of gold?
Replies: 45
Views: 2640

Re: A bit of gold?

There is a benefit if you catch gold at the right time. That happens about 5 years out of every 25. The rest of the time it's dead weight in a portfolio or worse. I don't recommend it.

Rick Ferri
by Rick Ferri
Wed Jul 22, 2015 5:06 pm
Forum: Investing - Theory, News & General
Topic: Is Harry Markowitz wrong? Why Optimal Portfolios Are So Difficult To Create
Replies: 33
Views: 3253

Re: Is Harry Markowitz wrong? Why Optimal Portfolios Are So Difficult To Create

From the Article: "The weighted average method to estimating a portfolio’s overall risk and return may be a throwback in time, but it is conservative and does eliminate errors from inaccurate asset class covariance or correlation forecasts. You can read more about this method in my book, All A...
by Rick Ferri
Wed Jul 22, 2015 5:04 pm
Forum: Personal Finance (Not Investing)
Topic: Military career or Top MBA
Replies: 37
Views: 3863

Re: Military career or Top MBA

I looked at my services IRR vacancies today and I didn't see any that required less than 48 Inactive duty training units (I'm assuming 4 points = a weekend) and 14 annual training days. All in all that just looked like traditional guard/reserve. Are there other options available that I'm not seeing...
by Rick Ferri
Tue Jul 21, 2015 11:35 am
Forum: Personal Finance (Not Investing)
Topic: Military career or Top MBA
Replies: 37
Views: 3863

Re: Military career or Top MBA

Any other advice regarding MBA opportunities, Guard/Reserve life or deciding whether to stay or leave Active Duty would be much appreciated! Thanks again. You need to look into the IRR. It's a great deal for those of us who do not have a lot of time, but want to stay in the military system. All you...
by Rick Ferri
Tue Jul 21, 2015 11:21 am
Forum: Investing - Theory, News & General
Topic: Is Harry Markowitz wrong? Why Optimal Portfolios Are So Difficult To Create
Replies: 33
Views: 3253

Is Harry Markowitz wrong? Why Optimal Portfolios Are So Difficult To Create

Summary of Why Optimal Portfolios Are So Difficult To Create. Harry Markowitz won a Nobel Prize in Economics in 1990 for his work on a theory of portfolio management for individual wealth holders. Since that time, Modern Portfolio Theory (MPT) has become the bedrock for creating best-practice portfo...
by Rick Ferri
Mon Jul 20, 2015 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: Military career or Top MBA
Replies: 37
Views: 3863

Re: Military career or Top MBA

Is giving away the security of a military pension worth the risk of attending a top MBA school? No, but you can do both in the IRR (Individual Ready Reserve). Earn 50 points a year and you're one step closer to retirement benefits at age 60. Rick Ferri USMC Reserve Retired (awaiting age 60 for my r...
by Rick Ferri
Wed Jul 15, 2015 3:04 pm
Forum: Investing - Theory, News & General
Topic: "My Too-Long Journey To Becoming An Index Fund Investor"
Replies: 12
Views: 2470

Re: "My Too-Long Journey To Becoming An Index Fund Investor"

Thanks, Taylor! I'd have a lot more money today if I starting indexing at an earlier age.

Rick Ferri
by Rick Ferri
Tue Jul 14, 2015 9:09 am
Forum: Investing - Theory, News & General
Topic: So Few Generals, So Few Top Fund Managers
Replies: 5
Views: 817

So Few Generals, So Few Top Fund Managers

I see a lot of similarities between the military and the money management profession. Every new Second Lieutenant considers what it would be like to becoming a General. However, becoming General requires decades of service and commitment, impeccable personal stature and integrity, years spent away f...
by Rick Ferri
Mon Jul 13, 2015 3:15 pm
Forum: Investing - Theory, News & General
Topic: Rebalance how often? It's expensive
Replies: 34
Views: 2908

Re: Rebalance how often? It's expensive

Once every three years is adequate. The rest of the time, you can remain close by rebalancing using dividends, interest, deposits and withdrawals. Also, Schwab doesn't charge a commission to buy or sell their own ETFs.

Rick Ferri

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