Bogleheads.org

What a miserable existence. It sounds like these people want to work in the finance industry, but don't know enough to realize that being a stockbroker is not the route to wealth or security. Do Not Call has just about eliminated cold calls coming to me, but I had no idea either that they actually e...

I suppose they could advertise it more, but given Vanguard's business model, what is in it for them? It may be a little simpler to manage $10M in one account than in 10 accounts, but as the fees go down, it is not clear that they really make any more money of the HNW investors. Unlike a high priced ...

I realize pain management has been hot for a while, but remember that, unlike managing a patient during surgery, you don't have to be an anesthesiologist to do it. The procedures are simple, and require little training. Any doc can prescribed the drugs. As primary care folks feel ever more pressed t...

General comment: Very few academic radiologists do research. Many write up case series, or do other clinical projects, but actual research is pretty rare. Most academic radiologists would share your attitude of liking the clinical environment, trainees, more advanced and complex cases, and teaching,...

#1, for sure. I don't enjoy my work, but I am good at it and it pays well. I am not frugal to accumulate enough money to retire. I am frugal because I am frugal. I dislike spending money and I dislike most things on which people spend large amounts- expensive restaurants, travel, wine, fancy clothes...

I can understand the frustration with medicine, but you need a practical alternative. Ideally, you would use your medical background. MBA, MPP, MPH and go into management or health policy? You would still be in the medical business, but you would not be delivering care. Becoming a CFP, ChFA, etc see...

Zebrafish is right about entering a PhD program without enthusiasm for research. You are unlikely to finish and it would be a miserable experience along the way. You would certainly need to know what happens financially if you drop out, as you almost certainly would. On the other hand, for someone w...

I got 100%, but I think the questions were fair if you read carefully. Re: risk vs return. The key here is not "securities", but "investments". The principle certainly applies outside of securities. But the example of casino gambling is inappropriate. A large part of that activit...

If you do aggressive TLH, you have to factor in the time and effort in completing your tax returns. Or the cost of paying someone to do it for you. Given a single statement from one fund company, perhaps it will not affect the price from a paid preparer. For those of us who do our own taxes, the mor...

I am handling affairs for two relatives. I looked at Vanguard, but in the current low interest rate environment, even its low fees would eat up a lot of the return of a conservative portfolio. I am also finding that most of what I do requires knowing the beneficiary. The sorts of things a stranger c...

Couldn't you extract this from the data Fama and French provide? The results Larry shows include, I assume, the correlations of the asset classes. If you try to simulate variance without the data from the correlation matrix you will get the wrong results. This seems like fun, but a limited guide to ...

A better indicator of the fidelity of tracking the target index is R^2, rather than return over 3 years. Plenty of funds may have given returns similar to the AQR offerings, while not at all using momentum strategies. Even better would be a multiple correlation showing the factor loadings of the mom...

I have been on faculty at both schools, so no ax to grind. Short answer- go to Penn. Long answer- Harvard and Penn are equivalent at the top quality of US med schools. Penn has worked very hard and successfully to make the experience of being a medical student outstanding. It is remarkable how much ...

The only Vanguard ETFs to which I pay attention have near perfect correlation with their benchmarks. As noted above, that is the goal, not buying or selling the entire mix of securities everyday. It might be interesting to see how they run the fund, but hardly something to worry about.

We are mixing four questions 1 How reliable is the value premium? Studies have suggested that it is robust across markets, countries, and time periods. But only if you hold to the strategy for many years. 2 Which value metric is best? Studies have shown that the multiple metrics tend to produce simi...

[quote]Owned by investors not by 3rd party shareholders. No conflicts of interest.[/quote] This one does not apply to Fidelity, Schwab, DFA, or any other firm with which I am familiar. It is the reason Vanguard can pursue low costs for all its funds. Other companies try to match Vanguard's fees for ...

Rick, Interesting thoughts, but I am afraid I have missed what Wealthfront brings to the table. Their software does not appear to be particularly valuable. I would think any large broker dealer is already able to generate asset allocation advice, and if they wanted software help, they could hire a c...

I am still not sure about declining alpha for the hedge fund industry as a whole, or about positive alpha during some golden age. Aiken, et al, "Out of the Dark: Hedge Fund Reporting Biases and Commercial Databases" studied problems arising from the voluntary reporting of hedge fund return...

I could retire now. I hope to work as long as health and employability permit. For now, I think retiring in another 15 years would have me quitting at an age typical for people in my field.

I am too cheap to buy Bernstein's book, so I hope someone who has it can explain how they handled the data to come up with an annual alpha of 9%. The best study I have seen of the effect of reporting biases in hedge fund database returns concludes that essentially ALL of the apparent alpha was due t...

Rick, when you met with Rachleff, did he explain why he and the company had gone 180 degrees from championing active management, "Bogle did not have all the data", to a passive approach and extolling MPT? What happened to the people who had invested with the active managers Wealthfront use...

An unbiased sample of the entire hedge fund industry generated 9% three-factor alpha? That is amazing, and much higher than any other study I have seen. Where did the idea of of an alpha for the industry come from? One could estimate what the alpha may have been, but what does it mean to identify al...

Alternative explanation: for the most part, Vanguard is indexing. The theory underlying this approach says nothing about proxy voting. Forming opinions on shareholder proposals and selectively voting take time and cost money. I am not aware of suggestions that doing so increases the returns to the o...

There is nothing recent about the failure of active management. Index funds came into existence after overwhelming evidence of the underperformance of active management vs the indexes. Sharpe showed that active management must underperform the market as a whole. As long as it is possible to buy indi...

As a follow on to Bodie, you might look at Duffie's Dynamic Asset Pricing Theory. It is quite mathematical, but you seem to want that. From reading sections of Cochrane's Asset Pricing, he covers the topics, but if working on your own, people say that the large number of typos can be fatal.

The security questions are a very good system for verification as long as you do not give true answers. What is the name of your pet should not be "Fido". It could be "periodic wasteland of the immortals" or something else that is NOT the name of your pet, and not a likely pet na...

Very strange company. When I first became aware of them, they were pitching active management. They boasted about their ability to identify great managers who did not accept small client accounts. They would let investors have their accounts by these top active managers. While in that phase Ratchlef...

Avoiding political comments, but it is worth noting that physician incomes are likely to come down, and the relative incomes of different specialities may change in unpredictable ways. You mention that you could attend SUNY Downstate, and based your calculations on tuition there. But remember that m...

I suppose I am looking at it as an investment decision. Although I am perfectly healthy now, the probability of disability increases as one ages. The investment of premiums for a year returns some possibility of X years of payments. At some point this becomes a losing proposition. Although I no long...

Bumping to as a question from the other end of the career spectrum. When is it time to cancel disability insurance? I am nearing the age at which the policies would stop paying, so the length of time during which I could collect is quite limited. I current have the maximum possible coverage, combine...

Larry, [quote]our cost is about 2-4bp in yield[/quote] I think you are talking about transaction costs for a firm running a $ billion plus bond portfolio. I was talking about an individual doing with a portfolio of, say, $1M. Would that 2-4bp yield loss still apply? Hiring someone to do it: I think ...

Thanks both of you. Akiva, I agree that this does not seem to pose any interesting theoretical issues. I suppose one might wonder whether there are pricing inefficiencies somewhere, but without a clear idea of what they might be, it could be tough to get such a study published. That said, there is a...

This has been a fascinating discussion, but I am left with two questions that seem critical to me. 1. Is there any data on risk adjusted return to the bond ladder approach vs. a mutual fund of the same duration? After expenses, transaction costs, taxes on capital gains, tax loss harvesting, etc? Whe...

I have some time, and I don't know the SS rules well enough to do this, but it seems the calculations described do not properly account for the risk that one may die and forfeit future SS benefits and do not separate the "stop working" decision from the "start receiving benefits"...

I love how the active guys love analogies ("straightjacket"), but never, ever, EVER want to talk about data. The data in favor of indexing is so overwhelming that those selling active services know the only thing to do is change the subject.

You can certainly protect your personal assets from business liability by using limited liability corporations. Again, something for which you need lawyers. Professional liability insurance for your work. Umbrella for everything else. In many states titling the house as tenants by the entirety prote...

If your friend asks directly how his advisor is compensated, she will be obligated to tell him. She will also be obligated to review the commissions and fees with him. He will probably get a lot of sales talk about why he should deal with MS rather than risk going it alone. The answers can be compli...

A more interesting question is why institutions that largely index their stock holdings have large allocations to hedge funds and other such schemes. These are people who know better than to pay for stock picking, but then they turn around and pay for stock picking. I can see the logic of PRI ate eq...

For those with large portfolios there can be a logic in holding individual stocks, harvesting losses, and therefore having a brokerage account. With several dozen stocks one can get quite good replication of the market, no annual fees, and with limit orders and the right firm, no commissions. Now th...

Yep, went parliamentary while everyone was distracted by the fiscal molehill. You would definitely need lawyers, several of them. As noted, there are issues with income tax, estate tax, responsibility for decisions for children, ownership of joint property... At this income level, for estate tax rea...

you have enough assets to generate income that allows you to live an upper middle class lifestyle without having to work for the rest of your life. "Independently wealthy" I guess. Well, I would call that "independently upper middle class". To be distinguished from rich. But the...

Well, like "reasonable", "valid" is very much a matter of opinion. In the case of AGI vs other measures AGI has history on its side. When some people discuss tax rates in terms of broader income measures they compare to older AGI stats, which is all that exist for longer term eva...

Kyle,

The wonderful part about a free country is that everyone is entitled to an opinion. I walked you through my reasoning. You may be right that many people would simply pick a number, often smaller than mine. But that hardly provides a basis for what is reasonable or ridiculous.

For a nice discussion of the wealth data challenges, search for "how much money does it take to be in the top 1% of wealth".

In short, you can measure reported AGI, but you can only guesstimate wealth.

People are not required to report wealth to the IRS, with elaborate checks and enforcement. So I don't know how one gets this data. People try to estimate, but that requires a lot of guesswork about who owns what financial investments, real estate values, and such things. Interesting reading, but ta...

For me "rich" means "able to live a luxurious lifestyle without generating earned income, dipping into capital, or having any plausible risk of running out of money." I call "luxurious" spending $1M per year. This requires pretax income of $2M. Assume it is in intermedi...

The 2012 report is out. The AGI threshold for top 1% was $369,691 for 2010 returns. Threshold peaked in 2007 at 426k.

Search for "summary of latest federal individual income tax data" and "tax foundation".

The report comes out in the fall, but the last one I saw was Oct 2011, with data through 2009.

Source: I can provide the link when I get home. You can find it yourself at the tax foundation site, direct from IRS data, or, I think, from the tax policy center.

TPC is left-leaning and pushes expanded definitions of income. TF is right-leaning and uses AGI as reported by IRS.

I don't think those are thresholds. Perhaps medians or means. The last data I saw from the IRS placed the income threshold at about 380k in 2009, and 410k in 2007. I have not seen good data on wealth distribution, that would be difficult to collect. Be careful about the definition of income. Some in...