Search found 977 matches

by afan
Sat Jun 27, 2015 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: Power of attorney
Replies: 59
Views: 4986

Re: Power of attorney

Recently had to help out an elderly relative who was struggling with managing affairs. Had a durable power of attorney. It was useless. We dealt with a large number of institutions and I don't think a single one accepted the POA. Joint accounts were fine, trustee of the trust was fine, POA never did...
by afan
Wed Jun 17, 2015 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: Longtime Insurance Customers Get Ripped [overcharged]
Replies: 54
Views: 8226

Re: Longtime Insurance Customers Get Ripped [overcharged]

Interesting. Long time SF customer. Shopped our home, auto, umbrella and investment property coverage last fall. Two different independent agents. Quoted from 5 different insurance companies. Our SF rates were the best and is was not even close. But I agree we seem to be at risk to be optimized. Som...
by afan
Wed Jun 17, 2015 7:49 pm
Forum: Investing - Theory, News & General
Topic: Asset Allocation - Equity vs. FI for investors under 40
Replies: 29
Views: 2229

Re: Asset Allocation - Equity vs. FI for investors under 40

If one meets stay's 5 part test, then i could make sense to be essentially all in risky as as sets. You might not want that to be all stocks. Consider real estate, for example. But not reits and only if you can diversify and have a relatively low cost. Just be really sure you have no need for any of...
by afan
Mon Jun 15, 2015 8:46 pm
Forum: Investing - Theory, News & General
Topic: "Automatic' Gains for Target-Date Investors"
Replies: 5
Views: 1283

Re: "Automatic' Gains for Target-Date Investors"

Hardly the first to point this out, but this comparison does not tell us anything about market timing abilities of target date investors. It does tell us about the effects of purchases and redemptions, but not why. People putting money in may be in the accumulation phase, those taking out could be r...
by afan
Fri May 29, 2015 9:11 pm
Forum: Investing - Theory, News & General
Topic: Forget BND. Here's another idea...
Replies: 39
Views: 4857

Re: Forget BND. Here's another idea...

He is marketing a service that charges for investment advice. It is very hard to market a service that says "prices are set by a very efficient market. You cannot increase your expected return without increasing your anticipated risk. Buy the market portfolio at the lowest cost you can get.&quo...
by afan
Fri May 22, 2015 1:52 pm
Forum: Investing - Theory, News & General
Topic: Risk Factors: Variance Skewness Kurtosis
Replies: 9
Views: 1256

Re: Risk Factors: Variance Skewness Kurtosis

skewness/kurtosis proxies framework diminished the benefit of tilting a portfolio towards small/value/momentum. In this framework a tilt would simply mean lowering variance exposure but increasing skewness ... Exactly. Which means that the notion of "beating the market" by tilting is an i...
by afan
Tue May 12, 2015 5:35 pm
Forum: Personal Finance (Not Investing)
Topic: Should we purchase home without permits?
Replies: 70
Views: 4595

Re: Should we purchase home without permits?

If you can figure out what was done without permits, an inspector may be able to help you with the next step. That would be guessing the risk you would assume by buying the house. People skip permits because they cost money and because they involve inspection of the work. Someone who plans to do sho...
by afan
Mon May 11, 2015 8:13 am
Forum: Investing - Theory, News & General
Topic: part two of Facts and fiction on value investing bl
Replies: 70
Views: 4742

Re: part two of Facts and fiction on value investing bl

The academic got the idea of value investing from practitioners. But the practitioner approach was too ambiguous for research. Different people trying to follow Graham and Dodd would come up with different portfolios. For doing academic studies they needed rules that would generate unambiguous secur...
by afan
Sun May 10, 2015 11:14 am
Forum: Investing - Theory, News & General
Topic: part two of Facts and fiction on value investing bl
Replies: 70
Views: 4742

Re: part two of Facts and fiction on value investing bl

You might look at "Conditional Skewness in Asset Pricing Tests" by Harvey and Siddique, J of Finance, June, 2000. "Ex Ante Skewness and Expected Stock Returns" JENNIFER CONRAD, ROBERT F. DITTMAR, and ERIC GHYSELS, JOURNAL OF FINANCE • VOL. LXVIII, NO. 1 • FEBRUARY 2013 "Shar...
by afan
Sun May 10, 2015 10:30 am
Forum: Investing - Theory, News & General
Topic: part two of Facts and fiction on value investing bl
Replies: 70
Views: 4742

Re: part two of Facts and fiction on value investing bl

... It is not at all clear that the answer is yes. It is clear that the answer is yes. Value portfolios have had higher Sharpes than growth portfolios. Only if the Sharpe ratio is taken as the proxy for risk adjusted returns. But the Sharpe ratio does not work well for skewed returns. To take the S...
by afan
Fri May 08, 2015 3:36 pm
Forum: Investing - Theory, News & General
Topic: part two of Facts and fiction on value investing bl
Replies: 70
Views: 4742

Re: part two of Facts and fiction on value investing bl

Even if the value factor is a factor, the only reason to overweight value stocks would be to increase risk-adjusted return. Otherwise, why bother? But if the premium is simply efficiently priced compensation for risk, then you are not gaining anything. You need not even worry about whether value is ...
by afan
Fri May 08, 2015 1:15 pm
Forum: Investing - Theory, News & General
Topic: part two of Facts and fiction on value investing bl
Replies: 70
Views: 4742

Re: part two of Facts and fiction on value investing bl

Yes, but if it does not increase risk adjusted return, then it contributes nothing to this goal. If you invest in the total stock market, then you are invested in all the value stocks. The question is whether you increase your risk adjusted return by overweighting these stocks. If their performance ...
by afan
Fri May 08, 2015 12:34 pm
Forum: Investing - Theory, News & General
Topic: part two of Facts and fiction on value investing bl
Replies: 70
Views: 4742

Re: part two of Facts and fiction on value investing bl

I think Asness, et al, miss the point about whether the value premium is a risk story. They focus on whether this would mean one would expect it persist. That is an interesting issue, but much less interesting than whether it is worth pursuing at all. If it is a risk story in an efficient market, th...
by afan
Tue May 05, 2015 12:45 pm
Forum: Investing - Theory, News & General
Topic: the missing value premium
Replies: 34
Views: 3505

Re: the missing value premium

The value, small and small value effects have been discussed plenty here. Since interested people have chimed in, I will ask whether any are familiar with evidence that The premia, to the extent they exist at all, survive mean-variance risk adjustment. The premia, to the extent they exist at all, su...
by afan
Tue May 05, 2015 11:42 am
Forum: Investing - Theory, News & General
Topic: VG Total Bond Market Index Fund - Too Big?
Replies: 8
Views: 1391

Re: VG Total Bond Market Index Fund - Too Big?

The bond market is huge. Since this is an index fund, Vanguard could only have a problem if it were buying a.huge fraction, like half, of all the bonds in the index. As it stands, Vanguard is nowhere close a big enough buyer to face any limitations in buying bonds.
by afan
Wed Apr 22, 2015 2:23 pm
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 59
Views: 5115

Re: What rate of return do you use when planning for retirem

I start at zero real return, ignore the effect of taxes that would make a real return negative if I were really paying capital gains that made my return zero pretax. I then determine what a sustainable spending rate would be at zero real return. The difference between that and projected actual spend...
by afan
Mon Apr 20, 2015 4:27 pm
Forum: Investing - Theory, News & General
Topic: Can Shiller's PE10 (CAPE) Get Any More Discredited?
Replies: 81
Views: 6361

Re: Can Shiller's PE10 (CAPE) Get Any More Discredited?

No one can predict the movement of stocks with any reliability. Shiller is hardly alone in that failure. See Goyal's work on predicting asset returns.
by afan
Mon Apr 20, 2015 4:18 pm
Forum: Investing - Theory, News & General
Topic: Warren Buffett on equties, treasuries, and "risk"
Replies: 46
Views: 4610

Re: Warren Buffett on equties, treasuries, and "risk"

Not sure this is anything different than the usual advice. One holds low volatility investments to control the overall volatility of the portfolio. If you are one of those rare people who have no reason to be concerned about the effect of dramatic drops in their assets on their ability to retire, th...
by afan
Fri Apr 10, 2015 7:52 am
Forum: Investing - Theory, News & General
Topic: The Indexer, Speculator & Efficiency
Replies: 17
Views: 1689

Re: The Indexer, Speculator & Efficiency

The EMH was developed decades ago based on data available at that time. It arose from observations that the market was extremely efficient many years ago. I don't know of evidence that it has become more efficient since.
by afan
Wed Mar 25, 2015 7:04 am
Forum: Investing - Theory, News & General
Topic: The Only S&P 500 Index Funds You Will Ever Need
Replies: 11
Views: 3006

Re: The Only S&P 500 Index Funds You Will Ever Need

I have wondered whether Buffet referred to S&P 500 rather than total stock because he figured it would not require explanation. He could also refer to that generally without specifying a particular provider. "Total Stock Market" is a Vanguard product. As a practical matter, the differe...
by afan
Wed Mar 25, 2015 6:59 am
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 70
Views: 5171

Re: Should a BH investor never use futures/options?

For most people, "never." There are some situations where it makes sense. If you get paid in part in stock options, the alternative to accepting them would be refusing them. People who produce commodities, say farmers, may use futures to reduce the volatility of their returns from selling ...
by afan
Wed Mar 18, 2015 6:05 pm
Forum: Investing - Theory, News & General
Topic: "Assessing the Risk of Using Just One Fund Company.."
Replies: 18
Views: 2954

Re: "Assessing the Risk of Using Just One Fund Company.."

You probably can avoid potential delays in getting control of your assets should one company suffer some major hack or other problem. It would seem that much of the risk, to the extent there is any, lies at the custodian, rather than the fund company that offers your mutual fund. There are only a fe...
by afan
Sat Mar 14, 2015 4:30 pm
Forum: Investing - Theory, News & General
Topic: 86% of investment managers stunk in 2014
Replies: 22
Views: 2877

Re: 86% of investment managers stunk in 2014

yes, but people often take the universe of active mutual fund managers as representative of active investors overall and particularly of institutional active investors. So they infer the performance of active institutional managers from that of active mutual fund managers. Then it is a short step to...
by afan
Sat Mar 07, 2015 12:00 pm
Forum: Investing - Theory, News & General
Topic: Managed bond funds?
Replies: 23
Views: 1900

Re: Managed bond funds?

For the question of active vs passive investing in bonds, it does not matter what index you follow. The comparison is always the value added, or, more likely, subtracted, by the managers' activity. As long as you control for the risk characteristics of the index portfolio, you can compare to active ...
by afan
Mon Mar 02, 2015 6:18 pm
Forum: Personal Finance (Not Investing)
Topic: How to find a spouse who wants financial independence
Replies: 51
Views: 8894

Re: How to find a spouse who wants financial independence

A couple of weeks after our first date I told my wife to be that I had a coupon for the restaurant but didn't think it was prudent to use. She asked Why not? We eventually went back and used the coupon. The restaurant is no longer in business but we still are. "most everything means nothing, e...
by afan
Mon Mar 02, 2015 5:31 pm
Forum: Investing - Theory, News & General
Topic: ...it is madness to risk losing what you need in pursuing wh
Replies: 48
Views: 5638

Re: ...it is madness to risk losing what you need in pursuin

The only way I know to use firecalc, one must put in current assets, expected spending and duration of retirement. A given retirement rate may succeed or fail, depending on how much money one has and how much one plans to spend. How does one come up with a success at 3.7% that is, apparently, indepe...
by afan
Thu Feb 26, 2015 5:44 am
Forum: Investing - Theory, News & General
Topic: Illiquid Assets
Replies: 46
Views: 4772

Re: Illiquid Assets

There are few practical ways for small investors to make diversified investments in illiquid assets. Most require much larger portfolios, on the order of tens of millions. As pointed out above, there is a lot of money in these assets, even if they are available only to a small numerous of investors....
by afan
Tue Feb 24, 2015 3:33 pm
Forum: Investing - Theory, News & General
Topic: Keep brokerage account at Vanguard?
Replies: 11
Views: 1545

Re: Keep brokerage account at Vanguard?

I have never had a problem with Vanguard brokerage. I trade rarely, but everything has always been fine. Also have used Fidelity and Schwab. I cannot see any meaningful differences among them other than price.
by afan
Tue Feb 24, 2015 3:29 pm
Forum: Investing - Theory, News & General
Topic: Active managers outperform the index by 0.12% before fees?
Replies: 22
Views: 2070

Re: Active managers outperform the index by 0.12% before fee

There are a lot of empirical papers. Try the Fama and French "Luck vs Skill" paper. Its references include much of the good literature up to that point (a few years ago). Trying to answer this question with a data set contaminated by survivor bias is pointless. Doing financial research cor...
by afan
Thu Feb 12, 2015 8:34 pm
Forum: Personal Finance (Not Investing)
Topic: Advisors: should clients expect you to waive sales charges?
Replies: 10
Views: 1598

Re: Advisors: should clients expect you to waive sales charg

No informed investor would ever buy a load fund. It is just water down the drain. There are plenty of no load, low cost funds from Vanguard and companies trying to compete with V. People who want an advisor can get that service for free as noted above. If they really want someone to talk them throug...
by afan
Thu Jan 29, 2015 6:21 am
Forum: Investing - Theory, News & General
Topic: Why do brokerages give commission free-etfs
Replies: 19
Views: 1970

Re: Why do brokerages give commission free-etfs

It is not only payments from ETF sponsors. Vanguard will also give you free trades on stocks. It has to be order flow, margin lending, interest on uninvested balance... I doubt Vanguard would give free trades if it were losing money on them. Other brokers might for marketing, but that does not seem ...
by afan
Mon Jan 26, 2015 2:02 pm
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8938

Re: "Its Time To End Financial Advisers 1% Fees"

It is difficult to compare financial advice to medical advice, since the latter is based on painfully complex negotiated rates between providers and insurers. Patients are bystanders in this process. But legal and accounting advice are good comparisons.
by afan
Mon Jan 26, 2015 1:47 pm
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8938

Re: "Its Time To End Financial Advisers 1% Fees"

Yes, I get it...How hard can it be? Can I forward all my email and phone calls to you for a month? It should only take you a few minutes to get through them all... :) The point is not that, having already paid for responses, people would not expect them. The point is that they rarely actually need ...
by afan
Mon Jan 26, 2015 7:23 am
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8938

Re: "Its Time To End Financial Advisers 1% Fees"

The problem is that there is very little for an advisor to do. Once or twice a year check the asset allocation? With very simple software, the firm holding the assets will tell the advisor the allocation. Review a spreadsheet of client allocation with the ones outside the target range highlighted. T...
by afan
Fri Jan 23, 2015 8:47 pm
Forum: Investing - Theory, News & General
Topic: [Lack of] Auto-rebalancing tool at Vanguard
Replies: 68
Views: 13597

Re: Auto-rebalancing tool at Vanguard

It is not free. There is no such thing as a free transaction. Sorry, just fact. If the turnover increases without an increase in fund assets, costs go up. That is separate from the question of whether the increased costs would be worth it. For some on this thread it would clearly be worth it. For ot...
by afan
Fri Jan 23, 2015 4:37 pm
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8938

Re: "Its Time To End Financial Advisers 1% Fees"

Considering that active managers have been remarkably consistent in underperforming the index approach, as they have to considering their fees, we can would only expect they would do even worse as the market becomes more efficient. But the market is already highly efficient and I know of no evidence...
by afan
Thu Jan 22, 2015 4:39 pm
Forum: Investing - Theory, News & General
Topic: [Lack of] Auto-rebalancing tool at Vanguard
Replies: 68
Views: 13597

Re: Auto-rebalancing tool at Vanguard

When people establish this automatic rebalancing it would be expected to increase the number of transactions. There are plenty of people who rebalance only rarely left to their own devices. If it were automatic once set up, then those rebalancing transactions would take place at whatever period was ...
by afan
Wed Jan 21, 2015 8:31 pm
Forum: Investing - Theory, News & General
Topic: Vanguard too successful?
Replies: 13
Views: 2248

Re: Vanguard too successful?

One interesting question out of all that. If the portion of active investors gets small enough, then there will come a point when the market becomes less efficient, and there will be a reward to active investing. The thrust of that argument as presented in the article implies that there once was a t...
by afan
Tue Jan 20, 2015 8:12 pm
Forum: Investing - Theory, News & General
Topic: How to get things wrong - Swiss Franc (CHF)
Replies: 32
Views: 3676

Re: How to get things wrong - Swiss Franc (CHF)

I don't speculate on foreign exchange markets. Far smarter people have gone broke trying.
by afan
Sun Jan 18, 2015 10:01 am
Forum: Investing - Theory, News & General
Topic: How Can Short-Term Tax Exempt Make Sense?
Replies: 13
Views: 1758

Re: How Can Short-Term Tax Exempt Make Sense?

Not sure it makes sense to compare an Admiral class of one fund to Investor class of another, but note that Vanguard Limited-Term Tax-Exempt Fund Admiral Shares (VMLUX), still has very low interest rate risk, but it pays the same yield, federal tax free, as the Short Term taxable fund. This limited ...
by afan
Mon Jan 12, 2015 3:34 pm
Forum: Investing - Theory, News & General
Topic: Diversification... Alternate Theory?
Replies: 11
Views: 1519

Re: Diversification... Alternate Theory?

Eight pages of bloviating, but refuses to define DM, or state how it is calculated. If the author had something worthwhile to say, this would have been the first thing he did. He knows how he calculates DM, but will not say. Maybe he just makes it up.

Meaningless.
by afan
Mon Jan 12, 2015 2:13 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 11574

Re: Is a Sub-4% SWR a Boglehead Quirk?

The chart illustrates the challenges in using current valuation metrics to predict future returns. This works so poorly it is not worth the effort. See Goyal.
by afan
Mon Jan 12, 2015 2:12 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 11574

Re: Is a Sub-4% SWR a Boglehead Quirk?

Spending time with spouse, heirs, and volunteering at charities could also be considered more worthy than working until one is too sick to work anymore... I will retire at 55, and spend a ton of time with my spouse, children, and grandchildren while I'm still healthy.. Yes, they will only inherit a...
by afan
Sun Jan 11, 2015 9:19 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 11574

Re: Is a Sub-4% SWR a Boglehead Quirk?

If I knew it was my last meal, I'd eat until I couldn't eat another bite and savor every bit of it. I would not want to go to my death feeling bloated and disgusting. YMMV Dying with the highest networth of my of my life, would be a Complete Retirement Planning Failure to me. The real problem is th...
by afan
Sun Jan 11, 2015 9:05 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 11574

Re: Is a Sub-4% SWR a Boglehead Quirk?

2. Someone can as easily choose a relatively high withdrawal rate in order to retire earlier at a given modest lifestyle, not make 'frivolous expenditures'. So I think your approach is a bit confused on this, in several times equating higher withdrawal rate with 'frivolity', not necessarily the cas...
by afan
Sun Jan 11, 2015 6:36 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 11574

Re: Is a Sub-4% SWR a Boglehead Quirk?

Spouse, heirs and charities. All are more worthy than wasting money on frivolous expenditures. Saving money is a goal in itself. Like not overeating at one's last meal. As you note, annuities might address the longevity problem if one were willing to project creditworthiness of insurance companies d...
by afan
Sun Jan 11, 2015 6:18 pm
Forum: Investing - Theory, News & General
Topic: Anti- Market Timers still seem to endorse market-timing??
Replies: 22
Views: 2847

Re: Anti- Market Timers still seem to endorse market-timing?

Efficient marketers hold diversified portfolios precisely because they CANNOT predict which asset classes will do best in the future. They assume that recent performance of any class tells them nothing about expected future returns. Or to phrase it more carefully, they assume that any useful predict...
by afan
Sun Jan 11, 2015 5:45 pm
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 11574

Re: Is a Sub-4% SWR a Boglehead Quirk?

I have a different view of retirement plans. I accept that some people think this way, but I have no interest in spending up to my ability. I want to spend enough to maintain a comfortable life, which I can do at a level of consumption far lower than what I could afford. I plan to be a net saver thr...
by afan
Sat Jan 10, 2015 10:02 pm
Forum: Investing - Theory, News & General
Topic: TIAA-CREF and Vanguard funds - any extra fees ?
Replies: 8
Views: 1184

Re: TIAA-CREF and Vanguard funds - any extra fees ?

Big universities usually get good deals from Vanguard and TIAA. The documents will tell you the fees. But he has a job with a 403b while he is a PhD student? Is this his stipend, or does he do teaching for which they pay him and let him in the 403b? It is a good deal. Many grad students would not ha...

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