Search found 1758 matches

by Simplegift
Wed Aug 26, 2015 9:05 pm
Forum: Investing - Theory, News & General
Topic: Why no diversification benefit for international in this week's crash?
Replies: 83
Views: 4413

Re: Why no diversification benefit for international in this week's crash?

Does anyone understand the cause of this week's crash and why international moved pretty much lock-step with domestic providing no diversification benefit? As mentioned, during periods of crisis and high stock volatility, correlations among stocks increase (chart below). And not just correlations a...
by Simplegift
Wed Aug 26, 2015 11:14 am
Forum: Investing - Theory, News & General
Topic: Why China Matters to the World Economy
Replies: 10
Views: 1402

Re: Why China Matters to the World Economy

If interested in the linkages between the U.S. economy and China, both direct and indirect, I found this brief, 5-page report to be particularly cogent: How Exposed is the U.S. Economy to China? The key takeaway, somewhat surprisingly, is that direct linkages are rather limited, since China only acc...
by Simplegift
Wed Aug 26, 2015 8:13 am
Forum: Investing - Theory, News & General
Topic: What cause new highs for market [over time]?
Replies: 6
Views: 532

Re: What cause new highs for market overtime?

I'm just curious on why the market reaches new highs overtime, mainly looking at the US market (up until now at least). Historically, it seems, for every a new high there was always a correction/crash that preceded. I can see that innovations and thus increased revenue can drive the market up leadi...
by Simplegift
Wed Aug 26, 2015 12:41 am
Forum: Investing - Theory, News & General
Topic: Vanguard and China A shares
Replies: 9
Views: 1038

Re: Vanguard and China A shares

I don't know how Vanguard decides to add countries to various funds, but I think the Chinese markets have not crossed the threshold of maturity to be added to indices yet. You might be right, but the immediate impact of Vanguard's decision, even when fully implemented over the next year, will be fa...
by Simplegift
Tue Aug 25, 2015 9:46 pm
Forum: Investing - Theory, News & General
Topic: Is tax loss harvesting always worth all the fuss?
Replies: 64
Views: 4521

Re: Is tax loss harvesting always worth all the fuss?

In the future, you can easily take those shares (which have just been purchased at that low price that make you TLH in the first place) and donate them to charities and/or gift them to loved ones. This is a nice point that's not often discussed. For many Bogleheads who are retired and have "mo...
by Simplegift
Tue Aug 25, 2015 9:00 pm
Forum: Investing - Theory, News & General
Topic: Why China Matters to the World Economy
Replies: 10
Views: 1402

Re: Why China Matters to the World Economy

I'm not saying China doesn't matter to the world economy, I'm just saying "things fluctuate" and we need to be careful about extrapolating recent trends. Totally agree. The reason that Japan's economic rise in the last half of the 20th century was such a relative "flash in the pan&qu...
by Simplegift
Tue Aug 25, 2015 6:25 pm
Forum: Investing - Theory, News & General
Topic: Why China Matters to the World Economy
Replies: 10
Views: 1402

Re: Why China Matters to the World Economy

What matters isn't the size of GNP but how much it TRADES with rest of world. Consider if CHINA was half of world GNP but didn't trade at all with rest of world what happened in China would have very little impact on other economies. And China IMPORTS from the developed world (with exception of com...
by Simplegift
Tue Aug 25, 2015 5:00 pm
Forum: Investing - Theory, News & General
Topic: Why China Matters to the World Economy
Replies: 10
Views: 1402

Why China Matters to the World Economy

A few weeks ago, The Economist published an interesting chart (below), showing the relative contributions to world GDP growth by various regions of the world over the past four decades. A few highlights: • In the 1980s, the United States and the rich world contributed almost twice as much to global ...
by Simplegift
Tue Aug 25, 2015 11:52 am
Forum: Investing - Theory, News & General
Topic: Can anyone help me understand China
Replies: 31
Views: 3624

Re: Can anyone help me understand China

We don't need to resort to racial stereotypes to explain the big run-up and crash of China's mainland stock markets — especially in such a diverse, complex country with 1.4 billion citizens. In fact, the Chinese government encouraged its citizens to invest in the stock market, mainly by relaxing mar...
by Simplegift
Mon Aug 24, 2015 10:41 am
Forum: Investing - Theory, News & General
Topic: Can anyone help me understand China
Replies: 31
Views: 3624

Re: Can anyone help me understand China

I have some sympathy towards China. When I look at China I see a cup half full, not half empty. Completely agree. Despite its many problems, it's hard to dispute China's growing global economic power (chart below). For the remainder of our investing lifetimes, China will undoubtedly have the larges...
by Simplegift
Mon Aug 24, 2015 9:28 am
Forum: Investing - Theory, News & General
Topic: Can anyone help me understand China
Replies: 31
Views: 3624

Re: Can anyone help me understand China

To understand the crazy run-up in Chinese stocks, this May 2015 piece in Foreign Policy may be helpful: What Happens When Everyone is a Chinese Stock Market Genius For perspective on the reforms needed in Chinese mainland markets, this WSJ article by Burton Malkiel from July 2015 is instructive (cli...
by Simplegift
Sun Aug 23, 2015 4:38 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

Here's a link to another talk Sauter gives where he discusses stock market returns and economic growth. The correlation is zero he says. No doubt that valuations are an important determinant of stock returns, especially in short run — and that there hasn't been strong historical correlations betwee...
by Simplegift
Sun Aug 23, 2015 4:06 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

The graph says nothing meaningful, other than that the past 200 or so years have been remarkable, which we already know. And that the dark ages were a lousy time to be alive in Europe. With respect, this thread isn't about debating economic growth through ancient history, but rather encouraging inv...
by Simplegift
Sun Aug 23, 2015 2:43 pm
Forum: Investing - Theory, News & General
Topic: Getting out of your comfort zone
Replies: 21
Views: 2182

Re: Getting out of your comfort zone

There's a saying "the only time you are growing is when you are uncomfortable". From an investment perspective, what decisions have you made that's made you feel uncomfortable. Without doubt, deciding to manage our own investments. In the early 1990s, we sold a business and had a substant...
by Simplegift
Sun Aug 23, 2015 1:19 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

So, for the sake of argument, what is the action? Don't think it can be expressed any better than Garland Whizzer in this post : I tend to agree … that both economic growth and stock returns are likely to decrease in the next 10 - 50 years relative to the their robust rates in the past century. Hav...
by Simplegift
Sun Aug 23, 2015 12:42 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

But I would not be surprised, if you looked at the entire course of human history since the last ice age and the birth of the first cities... The critically important difference is that through all of the historical time period that you mention, both population and productivity growth rates have be...
by Simplegift
Sun Aug 23, 2015 11:35 am
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

My concern is that everything we know about "normal" asset returns comes from a period that was apparently quite abnormal in human history ... Your thoughts? Exactly. The past 150-200 years or so (post-industrial revolution) may well have been the most remarkable period of growth in the h...
by Simplegift
Sun Aug 23, 2015 9:46 am
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

If us young people needed any more motivation to save as much as we can, here it is. Yes — however the wildcard in all this is how closely future global asset returns will be tied to future GDP growth. With bonds, it's easier to make the case that higher economic growth leads to higher real interes...
by Simplegift
Sat Aug 22, 2015 10:28 am
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

In researching this topic, I ran across a related and fascinating insight from the McKinsey Global Institute that I thought was worth adding to this thread (though it's been posted before). Since the global population and workforce growth rate is now steadily decreasing (an inexorable reality at thi...
by Simplegift
Fri Aug 21, 2015 3:58 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Re: Historical Asset Returns & Future Returns

In a PM, someone asked about emerging markets and their population and productivity growth rates — and whether these might return the world to "normal" economic growth and asset returns in the near future. However, population growth rates in emerging economies, in aggregate, also peaked ar...
by Simplegift
Fri Aug 21, 2015 12:26 pm
Forum: Investing - Theory, News & General
Topic: Historical Asset Returns & Future Returns
Replies: 35
Views: 2090

Historical Asset Returns & Future Returns

Nearly everything we know about the historical returns of stocks and bonds worldwide has been learned over the past 150 years, thanks to the Dimson, Marsh and Staunton global database (1900-2015), the Ibbotson U.S. data (1926-2015) and the Shiller U.S. database (1871-2015). This post makes the case ...
by Simplegift
Thu Aug 20, 2015 8:29 am
Forum: Investing - Theory, News & General
Topic: (Seriously) What exactly is meant by the phrase "interest rates," plural?
Replies: 9
Views: 803

Re: (Seriously) What exactly is meant by the phrase "interest rates," plural?

But if the Fed takes action that results in the fed funds rate increasing, you can bet (and the Fed very well understands) that interest rates will increase across the board. This is the theory, but it doesn't always work out that way in practice. The chart below shows the Federal funds rate (the h...
by Simplegift
Wed Aug 19, 2015 11:36 pm
Forum: Investing - Theory, News & General
Topic: How many here follow Bogle's "no international" theory?
Replies: 82
Views: 4989

Re: How many here follow Bogle's "no international" theory?

Since US companies are already deriving half their revenues from foreign countries, if you invest in foreign equities wouldn't that mean that much more than half of the revenues generated by companies in your global stock portfolio be derived from non-U.S. sources? Is that what you want? It's not q...
by Simplegift
Mon Aug 17, 2015 9:02 am
Forum: Investing - Theory, News & General
Topic: Money Mag:Why Vanguard Founder Jack Bogle Doesn’t Like Investing in Foreign Markets
Replies: 64
Views: 6596

Re: Money Mag:Why Vanguard Founder Jack Bogle Doesn’t Like Investing in Foreign Markets

The issue is, are you sufficient diversified holding the stock of US domiciled companies only? In many, if not most, sectors you probably are. There may be some sectors where you aren't as well-diversified economically as you would be with a global portfolio, but does it make much difference? There...
by Simplegift
Sun Aug 16, 2015 7:08 pm
Forum: Investing - Theory, News & General
Topic: The price of equities
Replies: 11
Views: 1143

Re: The price of equities

Either way, as long as companies are profitable, so are the investors. Which is why the only direction I can ever see the intrinsic value of the market is in an upward trajectory. That is In the long term. The definition of long term I believe is a whole separate discussion. Is my thinking off? The...
by Simplegift
Sat Aug 15, 2015 4:34 pm
Forum: Investing - Theory, News & General
Topic: The Big AAPL and the S&P 500
Replies: 20
Views: 3018

Re: The Big AAPL and the S&P 500

The way to avoid guessing the top company and being wrong is not to exclude any companies from your portfolio. This can be done through total market index funds and exchange-traded funds (ETFs) that include nearly all stock that trade regularly on the US exchanges . When being inclusive, why restri...
by Simplegift
Sat Aug 15, 2015 3:30 pm
Forum: Investing - Theory, News & General
Topic: Is this time different?
Replies: 42
Views: 3765

Re: Is this time different?

Each of those events has low probability by itself, but is there a high probability of at least one of the many low-probabilty events happening? The equity markets are constantly climbing a "wall of worry" that one of these low probability events will happen. It's what makes stocks a risk...
by Simplegift
Sat Aug 15, 2015 3:09 pm
Forum: Investing - Theory, News & General
Topic: Is this time different?
Replies: 42
Views: 3765

Re: Is this time different?

The problem for forecasters, however, is that recessions are usually markedly different from one another when viewed within their economic and market contexts — for example, the oil embargo in 1973, inflation and the double dip recessions of the 1980s, the global credit crisis of 2008, etc. Thus it...
by Simplegift
Sat Aug 15, 2015 2:28 pm
Forum: Investing - Theory, News & General
Topic: Is this time different?
Replies: 42
Views: 3765

Re: Is this time different?

For people who have lived through many bear markets, did they all feel unique, or was it basically the same atmosphere leading up to them? I've only been investing since the mid-1990s, but my sense is that bear markets don't just arrive out of thin air, but are usually caused either by, 1) tight mo...
by Simplegift
Sat Aug 15, 2015 10:46 am
Forum: Investing - Theory, News & General
Topic: Looking for a graph that shows how much of your Investment Gain is taken by different ERs
Replies: 17
Views: 894

Re: Looking for a graph that shows how much of your Investment Gain is taken by different ERs

If you don't like the available graphs it would be very easy to make your own in Excel. Right. This is the formula that Vanguard used to compile their table of expense impacts upthread: Cumulative Impact, in percent = 1 - ((1 + c) ^ (-T)) , where "c" is the expense ratio, in percent per y...
by Simplegift
Sat Aug 15, 2015 9:17 am
Forum: Investing - Theory, News & General
Topic: Looking for a graph that shows how much of your Investment Gain is taken by different ERs
Replies: 17
Views: 894

Re: Looking for a graph that shows how much of your Investment Gain is taken by different ERs

I'm looking for a chart or graph that shows how different expense ratios capture a percentage of your investment gain. For example, a 2% ER equates to losing 60% of your investment gain (I made that up, but you get the idea). Does something like this exist? Vanguard has published the table below, s...
by Simplegift
Wed Aug 05, 2015 2:42 pm
Forum: Investing - Theory, News & General
Topic: The Long-Term Decline of Interest Rates
Replies: 63
Views: 6229

Re: The Long-Term Decline of Interest Rates

Todd, this is a very reasonable comment, and I wanted to acknowledge that before responding to your "cherry picking" comment, which I'll try to show was off target. Thanks, Kevin. Just to qualify my "cherry picking" comment a bit (in advance of your reply, since we are leaving o...
by Simplegift
Wed Aug 05, 2015 8:27 am
Forum: Investing - Theory, News & General
Topic: The Case for Owning Fewer Stocks
Replies: 32
Views: 2457

Re: The Case for Owning Fewer Stocks

So a tenable argument can be made for owning fewer stocks. However, the vast majority of investors should own at least 500 stocks. Unless you're a rare investor like Mr. Greenblatt or Mr. Buffett, you're definitely better off owning the entire basket of stocks. The reason: a minority of stocks are ...
by Simplegift
Tue Aug 04, 2015 6:05 pm
Forum: Investing - Theory, News & General
Topic: The Long-Term Decline of Interest Rates
Replies: 63
Views: 6229

Re: The Long-Term Decline of Interest Rates

The purpose wasn't to find a past period that may resemble the future going forward from here (which I think is impossible), but simply to show a different slice of the data that we've looked at so far, and to demonstrate that there's no clear down-trend in real interest rates if you look at either...
by Simplegift
Mon Aug 03, 2015 2:16 pm
Forum: Investing - Theory, News & General
Topic: Asset Class Returns and Climate Change, 2015-2050
Replies: 30
Views: 1489

Re: Asset Class Returns and Climate Change, 2015-2050

It seems likely that the OP was more likely not asking an investment question at all but rather desiring to post his personal beliefs on a political issue in a way that would get responses. Just to be clear, the study in the OP reflects the findings of the Mercer Group, a global consulting firm com...
by Simplegift
Mon Aug 03, 2015 1:40 pm
Forum: Investing - Theory, News & General
Topic: Where can you get unbiased financial information? (Mike Piper)
Replies: 18
Views: 1680

Re: "Where Can You Get Unbiased Financial Information?"

As far as unbiased sources that are still knowledgable, something like the Bogleheads forum is about the closest you can get. Most people there do not work in the financial industry at all and therefore have nothing to gain from convincing you of one course of action over another. That said, even t...
by Simplegift
Mon Aug 03, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: Asset Class Returns and Climate Change, 2015-2050
Replies: 30
Views: 1489

Re: Asset Class Returns and Climate Change, 2015-2050

When insurance companies recognize that their risk profiles and monetary losses will likely change as a result of global warming, other intelligent people should take notice. Not only are the insurance companies looking to protect their investments, but the fact that this study (in the OP) was comm...
by Simplegift
Mon Aug 03, 2015 10:32 am
Forum: Investing - Theory, News & General
Topic: Asset Class Returns and Climate Change, 2015-2050
Replies: 30
Views: 1489

Re: Asset Class Returns and Climate Change, 2015-2050

There should be an option option for falling temperatures- Since this is an investing Forum, I doubt it's an appropriate place or thread in which to debate the science issues. If you'd like, perhaps it would better start a new thread, called "Asset Class Returns and Global Cooling, 2015-2050&q...
by Simplegift
Mon Aug 03, 2015 9:04 am
Forum: Investing - Theory, News & General
Topic: Asset Class Returns and Climate Change, 2015-2050
Replies: 30
Views: 1489

Re: Asset Class Returns and Climate Change, 2015-2050

Since the charts in the OP only show median return impacts across asset classes for just two scenarios, it might also be helpful to see the total variability, by asset class (chart below). Note that the variability in annual return impacts shown here for each asset class is across all four temperatu...
by Simplegift
Mon Aug 03, 2015 7:51 am
Forum: Investing - Theory, News & General
Topic: Asset Class Returns and Climate Change, 2015-2050
Replies: 30
Views: 1489

Re: Asset Class Returns and Climate Change, 2015-2050

This sounds like politically motivated "science" to me as the one of the conclusion is to contact your government to address climate change. To the extent that the International Finance Corporation (the private sector arm of the World Bank) has a political agenda, then the study could be ...
by Simplegift
Sun Aug 02, 2015 11:46 pm
Forum: Investing - Theory, News & General
Topic: Asset Class Returns and Climate Change, 2015-2050
Replies: 30
Views: 1489

Asset Class Returns and Climate Change, 2015-2050

PREFACE: Since the subject of climate change has become politically charged, kindly restrict any comments to the potential investing implications and impacts upon asset class returns. We're all aware (or should be aware) of the Forum rules against political discussion, so please don't create any un...
by Simplegift
Sun Aug 02, 2015 6:19 pm
Forum: Investing - Theory, News & General
Topic: The Long-Term Decline of Interest Rates
Replies: 63
Views: 6229

Re: The Long-Term Decline of Interest Rates

All of this macroeconomic analysis is very convincing, but I continue to be skeptical of putting much weight on macroeconomic analysis in making investment decisions. Kevin, if we are talking about investment decisions such as choosing which assets to invest in (like Mr. Buffett), or determining po...
by Simplegift
Sun Aug 02, 2015 10:01 am
Forum: Investing - Theory, News & General
Topic: The Long-Term Decline of Interest Rates
Replies: 63
Views: 6229

Re: The Long-Term Decline of Interest Rates

Why is it any less likely that future interest rates will surprise the current forecasters, despite their well-reasoned analyses? Nearly all the forecasts of interest rates over the past two decades have projected mean reversion back toward historical average yields, e.g., in the 4%-6% range for th...
by Simplegift
Sat Aug 01, 2015 6:51 pm
Forum: Investing - Theory, News & General
Topic: Ready to Give Up on Emerging Market Stocks?
Replies: 47
Views: 4844

Re: Ready to Give Up on Emerging Market Stocks?

Personally, I hold international and emerging stock. But I would be the first one to admit that it is I — not those who eschew emerging — who is irrationally biased in favor of the West. An argument can be made that the global, cap-weighted indexes themselves include an unconscious bias in favor of...
by Simplegift
Sat Aug 01, 2015 6:09 pm
Forum: Personal Finance (Not Investing)
Topic: how to chart local city nominal appreciation vs. S&P500 any ideas pleas?
Replies: 4
Views: 305

Re: how to chart local city nominal appreciation vs. S&P500 any ideas pleas?

You can find S&P 500 total returns (with dividends reinvested), from any starting month to any ending month, both nominal and real, from this site:

S&P 500 Returns Calculator
by Simplegift
Sat Aug 01, 2015 5:05 pm
Forum: Personal Finance (Not Investing)
Topic: how to chart local city nominal appreciation vs. S&P500 any ideas pleas?
Replies: 4
Views: 305

Re: how to chart local city nominal appreciation vs. S&P500 any ideas pleas?

The links below will give you Excel spreadsheets with monthly data for San Francisco house prices and the S&P 500 Index for 1987-2014. You'll need to create your own comparison chart from this raw data. San Francisco Median House Prices, Monthly, Nominal and Real Values, 1986 - 2014 S&P 500 ...
by Simplegift
Sat Aug 01, 2015 3:12 pm
Forum: Investing - Theory, News & General
Topic: Ready to Give Up on Emerging Market Stocks?
Replies: 47
Views: 4844

Re: Ready to Give Up on Emerging Market Stocks?

For the authors' prediction to come true, new companies from emerging economies must penetrate and displace existing companies in developed countries. This has certainly been true in the past, as growth by emerging market companies was mainly supported by exports to developed economies. But, lookin...
by Simplegift
Sat Aug 01, 2015 1:20 pm
Forum: Investing - Theory, News & General
Topic: Ready to Give Up on Emerging Market Stocks?
Replies: 47
Views: 4844

Re: Ready to Give Up on Emerging Market Stocks?

Personally, though I do tilt toward emerging markets, I'm skeptical that much of the growth from the 7,000 new companies that McKinsey forecasts by 2025 will actually show up in the emerging market indexes in which most of us invest. Many of these companies will be privately-held mid-caps, and much ...
by Simplegift
Sat Aug 01, 2015 11:24 am
Forum: Investing - Theory, News & General
Topic: Dickens: "a mere United States security..."
Replies: 5
Views: 848

Re: Dickens: "a mere United States security..."

In other words, in 1843, the United States was regarded as so shaky that the way to say something was worthless was to call it "a United States' security!" Looking at the 19th-century bust-boom cycles in U.S. railroad stocks (which comprised nearly all U.S. stocks in the 1840s), it's unde...
by Simplegift
Sat Aug 01, 2015 9:30 am
Forum: Investing - Theory, News & General
Topic: Ready to Give Up on Emerging Market Stocks?
Replies: 47
Views: 4844

Re: Ready to Give Up on Emerging Market Stocks?

Emerging markets may grow but the real question in some of these markets is will a non-insider investor see any of this growth or will it be expropriated by the government or other folks who get paid off with these companies. This is a major concern. I once noticed the chart below in an IMF publica...

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