Bogleheads.org

The bid/ask spread is the agent commission, not all that different than for financial assets. The price is the same for the buyer and the seller. So doesn't really make sense to add anything for this on top of the commission. There are other costs in addition to the commission, but the bid/ask spre...

And then when you buy, you have the same problem (ie you sell at the bid price, and buy at the offer/ask price, and there is probably typically a 3-4% gap between the two). Add it all up, you can lose 10% every time you move house. Huge transactions costs. But NOT so obvious with houses, where the ...

.... The long run track of securities prices looks fractal .... What does not look fractal? With enough terms, I can use a Fourier transform to model anything. Anything. Enough terms. Lots of things are not fractal. The key characteristic of a fractal is not that it is unpredictable, but that it is...

.... The long run track of securities prices looks fractal .... What does not look fractal? With enough terms, I can use a Fourier transform to model anything. Anything. Enough terms. Lots of things are not fractal. The key characteristic of a fractal is not that it is unpredictable, but that it is...

What goes down also goes back up. Take a look at the SP500 and DOW right now. Very dangerous to assume that is true. The long run track of securities prices looks fractal (in fact, Dutch housing prices since 1630 *also* look fractal, which is really an amazing result). It's not always the case that...

I was thinking that in the US, we take for granted that the market generally produces around a 2% dividend. There is a general move away from dividends toward stock buybacks in some companies. And there are a selection of companies that are known for producing dividends, that we are all familiar wi...

This may be a bit of a sales tool by MorningStar, but if it's at all true, higher dividends from international stocks may not guarantee a better overall return vs. US stocks paying a lower yield (individually or in aggregate). http://corporate.morningstar.com/us/documents/Indexes/DividendYieldFocus...

I can't speak for the whole world, but many international stock markets have higher dividends, around 4% or so, due to their domestic tax systems being more attractive for dividends. Australia is a prime example, with domestic investors getting a tax credit alongside their dividend, to ensure the i...

Is tax a significant factor here?

Is there any benefit in staggering sales?

Other than that, sell stock and pay down debt ASAP.

What goes down also goes back up. Take a look at the SP500 and DOW right now. Very dangerous to assume that is true. The long run track of securities prices looks fractal (in fact, Dutch housing prices since 1630 *also* look fractal, which is really an amazing result). It's not always the case that...

If the stock price halves, and the dividend is held constant, then the yield doubles. And our return is -50%. When you say 'other factors can change' precisely so: that's 2 (future dividends ie growth) and 3 (the demanded level of yield or PE the market requires). So the calculation is overly simpl...

Also you have to make an assumption about dividend growth Well, to be more precise, if you insist on building a model, regardless of the quality of its predictions, you have to make assumptions. As lazyday says, this is the problem with all these models. One is forced to not only make assumptions, ...

Also you have to make an assumption about dividend growth. This is the problem! --Talking about general equity, not REITS. I've always had problems with the Gordon Equation, with some analysis much better than others. Never had confidence to try my own. Corporations can use profits for dividends, s...

As I have a PhD in math and have a successful multi-decade career, so you are correct that I have a basic working knowledge of what a first derivative is. :) However that completely misses the point it seems to me. If the dividend yield doubled, back to historic levels of 6% say, then the price wou...

The issue about moving frequently is important. In the US as I understand it agents still charge 5-6%? In addition there is a 'bid offer spread' on houses that you don't see: you seldom get the 'market' price for a house, you get a slight discount representing whatever the buyer negotiates. And the...

A long term fixed rate mortgage is an inflation hedge. A variable rate mortgage is *not* because interest rates tend to catch up to inflation eventually. It is generally not worth considering house value/ total assets as a ratio-- a house is a consumption decision. And your equity portfolio is too v...

Before it was fashionable so to do, Schmitz wrote strong, believable female characters in Science Fiction. At one point many of Schmitz's works were available in the Baen Free Library in electronic form. Unfortunately, not so at this time. There's a message about reconstructing it and that some tit...

I've been going back and forth the past couple months and every day I change my mind so I thought I'd ask for some advice. Maybe someone has been in a similar situation before. Here's some personal info if it helps: 26 yo male 160k in retirement accounts 65k in cash(short-term investments) Option 1...

Vanguard's high-yield corporate bond fund is closed (VWEHX/VWEAX). What is the next best alternative for a bond fund investing in junk corporate bonds? I've already made the decision to place a particular pot of money into a high-yield corporate bond fund. Perhaps somebody on this forum knows of a ...

There are a lot of high-yield bond ETFs at expense about 0.4-0.5%, but you'll have to check the prospectus to see what they hold, and how that fits your high-yield needs. Travel carefully. An ETF where the underlying bonds are so illiquid could: - have a big bid-offer spread - have a volatile price...

I am fixing the first 2 factors for analysis, with a view to explaining the impact of the last factor, The problem is that you have simply assumed away other real-world answers as to why yield can change. In the real world those factors are rarely fixed. Which was my point. In the formula I have us...

" Nibbling through Telzey Amberdon by James H. Schmitz one chapter/story at a time. A classic although I actually prefer some of his other ones: - The Demon Breed , about a marine biologist outwitting an alien invasion -- that is also set in 'The Hub' universe (Telzey, Trigger Argee etc.) - Th...

"A Feast of Crows" by George R. R. Martin. The 4th book in the "A Song of Ice and Fire" series. I am really enjoying this series. What blows my mind is that I am an avid reader and yet I didn't know about these well written books until HBO did the TV series Game of Thrones based...

Immoderate Greatness - Why Civilizations Fail by William Ophuls This is a short book of 70 pages and the author lays out the factors that cause all civilizations to fail. It is not specific to any one civilization but makes the point that it is inevitable for all civilizations to fail due to these ...

Interesting how they will handle liquidity- most hedge funds have restrictions on redemptions.

Hedge Funds have done quite poorly of late, missing the magnitude of the market move up.

The best hedge funds are 'invitation only'.

The double layering of fees is likely to kill any benefits of this.

Lately I've been thinking a lot about "worldwide" reversion to the mean and how it might affect my investment decisions. The problem I run into is the world is historically a violent and chaotic place whose mean reversion could easily be away from universality and widespread stability. Pe...

so why were real returns for bonds in the 1950s so poor (your chart shows 0% average real return). I think the answer is "Financial repression". There was a deliberate policy to hold down interest rates at or below to the rate of inflation to help work off the enormous wartime debts. http...

SHiller made his name on that latter piece and I think it is still hotly debated. I think broadly the likely answer is 'yes' (ie too volatile to be justified by fundamentals). Complicating factor as we saw this crisis is the level and performance of the stock market directly drives the ability of th...

We have a plot of 2-1/2 acres of land that is very difficult to sell not only because there are many fewer speculators than in the past (not us, we were given the plot). While there are electric and telehone hookups, there is no water line, so a buyer would have to either drill a well or pay a neig...

Greetings, I am 44, wife is 42. We have been contributing to various retirement accounts over the last 15 years or so without much attention to Asset Allocation, except for the fact I have been trying to remain more in stocks because time was on our side. Now we are approx 20 years away from retire...

There is a lot of advertising saying you may live a long time in retirement, 30 years or more. So, you need to keep your money invested in stocks for growth and inflation protection. If it were up to me, the SEC would ban that as false advertising. Bear in mind, no matter how many people tell you t...

I need to buy some US stocks because they have been lagging behind recently, but that's just rebalancing, not tilting. Japan is up something like 66%? Of course you have 'lost' most of that on the currency, but a phenomenal performance. Stop investing, and start spending! That's what the radical li...

The Wizard wrote:

lwfitzge wrote:where's the projections of Danish tulips? I hear they may be big again

Dutch, not Danish...

Danish hogs . Lester Nessman would have been Danish.

Interesting article Larry. Thanks. For anyone who wants to invest in private equity notwithstanding Larry's case against it, there is an ETF available called Powershares Global Listed Private Equity Portfolio, ticker PSP. Its annualized return of the 5 years ending 3/30/13 is -5.5% vs. +8.5% for th...

FlyingMoose wrote:Is there a US High Quality stock index?

If you do a search on discussions of GMO and Jeremy Grantham's forecasts, lots of discussion how to proxy it.

Recency effect is precisely what we are seeing. Ex post justification of home country bias. The US is now leading the developed world out of recession, so it's easy to be more optimistic-- but the stock markets have already moved on that. Flip side of 'sell US debt and invest in (less well understoo...

People here claim assets of millions of dollars. Savings on that in terms of adviser fees would amount to 10s of thousands of dollars a year. So far, I am not aware that the site has received more than say $25k in donations during its entire history. We had a big rush after Sandy, but in the absence...

Hi. I just turned 46 today! Going to eat cake soon... I have a Vanguard 403b. In it I have Vanguard 500 Index fund with about 53k. I have a stable job and a state pension as well as a 2nd 403b. The state pension currently holds about 160k. The second 403b holds about 145K. Before I make the changes...

The district where I live recently approved a modest new school bond. I don't really know how it works, can I invest in those bonds somehow? Is there a minimum investment amount? Who actually buys this type of bond and how do they go about it? Is it just thrown into a pool of municipal bonds? I wou...

We want to keep the current option: low monthly, but the flexibility to pay off early. The cost of this flexibility is very high. Think of it as "payment flexibility insurance." To pay off $230k in 15 years at 3.5% (the 30-year rate), the monthly payment would be $1,644. To pay it off in ...

Take money off the table - and put it where? Account for taxes, costs and inflation, and there's no safe investment. Over the 1960's to 1980's period in the UK for instance, whilst inflation spiked at times to north of 15%, taxes on inflation bonds wouldn't have allowed you to keep all of the 15% '...

If you feel like it, you might want to find older EM bond data. Not sure, but some or maybe even average EM bond yield spreads to US treasuries ~1995 may have been even higher than in 1998. Maybe that was just in Latin America. One way to look is past downdraws, another is highest yield or spread. ...

Hi Nisi: From wikipedia: 1997 Asian financial crisis - Wikipedia, the free encyclopedia From SSRN: Search Asian contagion: 188 papers Search eLibrary :: SSRN regards, To summarise in 30 seconds. The Crash began with a default of a Thai property company run by (?) the nephew of the prime minister. I...

Yes, I have also been struggling with this. Retirement in the next few years is likely, and I have planned a 'bottleneck' glide path. I am about 40/60 stock/fixed now and am moving towards 30/70 at retirement. Half of the fixed is in cash/SV/CD/I-bonds. I plan to spend from the cash portion first, ...

Thanks Valuethinker for your explanation. REIT sounds just like Bonds, when interest rate rises, bond prices fall. When REIT yield rises, REIT prices fall. I never heard of this before, I should really go back and read some investment books about REIT. S&P500, reits, bonds all seems overpriced ...

If the dividend yield doubled, back to historic levels of 6% say, then the price would drop to 50. Doesn't this suppose re does not get more profitable? I am doing what in mathematics is called a first derivative. Ie the sources of return from REITs are - dividend yield (initial) - dividend growth ...

Now, all we’re left to calculate is the speculative return. Mr. Bogle, I think, would say that the historical yield should be 6%, so the doubling of the yield over the next 10 years should detract 7% pa from the return. I'm a newbie. Reading this many times, and I still don't understand the specula...

In line with what Bobcat2 said about discount rates. There are huge merits in increasing your income stream in later life with an income stream that is: - CPI protected - longevity insured That is Social Security. It makes far more sense to annuitize/ spend your own assets now if you can increase yo...

At the end of the day, my REIT allocation is exactly the 12% it has been for more than a decade. . How often do you rebalance? Given the fund volatility, you could make a case for daily rebalancing. The reason I like TIAA-RE (for the same reason Swensen does) is you get a relatively 'pure play' on ...

While obviously my thoughts can be seen spelled out in detail in the linked thread, I can summarize as follows, while also addressing some of the above content: - While there may be some similarities between a REIT's revenue stream and bonds, this by itself is not sufficient rationale to support ex...