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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 7:04 am
 
Forum: Investing - Theory, News & General
Topic: The Only S&P 500 Index Funds You Will Ever Need
Replies: 11
Views: 2723

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 25, 2015 6:59 am
 
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 52
Views: 3061

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
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: 2763

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 14, 2015 4:30 pm
 
Forum: Investing - Theory, News & General
Topic: 86% of investment managers stunk in 2014
Replies: 22
Views: 2053

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
Sat Mar 07, 2015 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: Managed bond funds?
Replies: 23
Views: 1656

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 6:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to find a spouse who wants financial independence
Replies: 51
Views: 8098

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
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: 5075

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
Thu Feb 26, 2015 5:44 am
 
Forum: Investing - Theory, News & General
Topic: Illiquid Assets
Replies: 46
Views: 3995

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 3:33 pm
 
Forum: Investing - Theory, News & General
Topic: Keep brokerage account at Vanguard?
Replies: 11
Views: 1399

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
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: 1864

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 Feb 12, 2015 8:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Advisors: should clients expect you to waive sales charges?
Replies: 10
Views: 1498

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
Thu Jan 29, 2015 6:21 am
 
Forum: Investing - Theory, News & General
Topic: Why do brokerages give commission free-etfs
Replies: 19
Views: 1887

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 2:02 pm
 
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8376

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 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8376

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
Mon Jan 26, 2015 7:23 am
 
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8376

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 8:47 pm
 
Forum: Investing - Theory, News & General
Topic: [Lack of] Auto-rebalancing tool at Vanguard
Replies: 68
Views: 13040

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
Fri Jan 23, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: "Its Time To End Financial Advisers 1% Fees"
Replies: 102
Views: 8376

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
Thu Jan 22, 2015 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: [Lack of] Auto-rebalancing tool at Vanguard
Replies: 68
Views: 13040

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
Wed Jan 21, 2015 8:31 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard too successful?
Replies: 13
Views: 2185

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
Tue Jan 20, 2015 8:12 pm
 
Forum: Investing - Theory, News & General
Topic: How to get things wrong - Swiss Franc (CHF)
Replies: 32
Views: 3610

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
Sun Jan 18, 2015 10:01 am
 
Forum: Investing - Theory, News & General
Topic: How Can Short-Term Tax Exempt Make Sense?
Replies: 13
Views: 1651

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 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: Diversification... Alternate Theory?
Replies: 11
Views: 1471

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 2:13 pm
 
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 10974

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
Mon Jan 12, 2015 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 10974

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 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 10974

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 9:05 pm
 
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 10974

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 6:36 pm
 
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 10974

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 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: Anti- Market Timers still seem to endorse market-timing??
Replies: 22
Views: 2780

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
Sun Jan 11, 2015 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: Is a Sub-4% SWR a Boglehead Quirk?
Replies: 177
Views: 10974

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...
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: 1071

Re: Busting the "myth" of the small cap / size premium ?

Remember that the studies identifying a small stock effect were not trying to characterize an index, but the performance of small stocks overall. Creating an index was a means to this end. The problem arose, and for a long time was not recognized, that these retrospectively constructed indicies omit...
by afan
Thu Jan 08, 2015 10:15 am
 
Forum: Investing - Theory, News & General
Topic: Busting the "myth" of the small cap / size premium ?
Replies: 14
Views: 1777

Re: rebalance at 3% change ok?

inbox.

A misunderstanding, I suppose. I do not follow a policy of continuous rebalancing.
by afan
Wed Jan 07, 2015 10:19 am
 
Forum: Investing - Theory, News & General
Topic: rebalance at 3% change ok?
Replies: 24
Views: 1912

Re: rebalance at 3% change ok?

Rebalancing at 5% seems pointless to me. Remember, your asset allocation is based on some consideration of historical and projected risk and return properties of your higher and lower risk investments. These values are highly variable, and your estimates of them will be error prone at levels way hig...
by afan
Tue Jan 06, 2015 5:58 pm
 
Forum: Investing - Theory, News & General
Topic: rebalance at 3% change ok?
Replies: 24
Views: 1912

Re: New Vanguard AMT-free National Municipal Bond Fund

Vanguard had been on the verge of muni index funds a few years ago and held off due to chaos in the muni bond market. I don't remember whether this was the Meredith Whitney affair or the crash. I agree that I cannot see paying the purchase fee. Remember that Vanguard purchase fees are paid to the fu...
by afan
Tue Jan 06, 2015 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: New Vanguard AMT-free National Municipal Bond Fund
Replies: 79
Views: 7399

Re: Rick Ferri looking to internationalize his portfolio

I have previously tried to start threads on how well one can predict equity performance. I have not gotten many interested responses. So I will throw this in here; http://www.hec.unil.ch/agoyal/docs/Predictability_RFS.pdf "A Comprehensive Look at The Empirical Performance of Equity Premium Pred...
by afan
Mon Jan 05, 2015 1:41 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37312

Re: Rick Ferri looking to internationalize his portfolio

afan is one VSP,also quite humorous


Flattering. Thanks. Wish either one were true. Esp the VSP part.
by afan
Mon Jan 05, 2015 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37312

Re: Rick Ferri looking to internationalize his portfolio

When companies run index funds, they are trying to match the index. Once they have identified the index they will follow, the composition of the index is out of their hands. The adjustments they make are attempts to produce perfect correlation with the target index, not to beat the market. Perfectly...
by afan
Sun Jan 04, 2015 4:35 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37312

Re: Rick Ferri looking to internationalize his portfolio

[economic policy comments (and followup by Rick deleted by admin alex. In general it was suggesting that simplified economic analyses such as that found in Rick's original article is likely to be less than fully sufficient, which brings us to the remaining on-topic comment] Reducing home bias might...
by afan
Sun Jan 04, 2015 4:27 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37312

Re: Rick Ferri looking to internationalize his portfolio

A few observations. Rick Ferri is a Very Smart Person. The finance and economics industries employ a large number of VSPs, many of whom try to predict the directions of economies or financial markets. Perhaps several hundred thousand such people around the world. In spite of their unquestioned intel...
by afan
Sun Jan 04, 2015 10:43 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 296
Views: 37312

Re: Wealthfront Direct Indexing Platform

I am too put off by Wealthfront's aggressive marketing, dubious claims about expected returns, and frequent switches in strategy to take them seriously as an investing option. If you review their history, they were a full bore active management shop, making wild, absurd, claims about performance. Th...
by afan
Sat Jan 03, 2015 10:44 am
 
Forum: Investing - Theory, News & General
Topic: Wealthfront Direct Indexing Platform
Replies: 32
Views: 4861

Re: Medical billing: wrong procedure

Before getting upset, or accusing anyone of being unethical, medical billing is cplicated and mistakes are common. Contact the provider and point out the error. Be polite as there is an excellent chance is was an honest mistake.
by afan
Wed Dec 24, 2014 10:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Medical billing: wrong procedure
Replies: 28
Views: 2224

Re: An alternative to alternative investments [QSPIX]

Re turnover: Those securities that failed one screen but passed another and therefore were not traded would not show up in the turnover figures nor would they contribute to the tax inefficiency. Any high turnover strategy works better if tax advantaged, but could be good in taxable if it worked well...
by afan
Thu Nov 27, 2014 10:05 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: An alternative to alternative investments [QSPIX]

Larry, I suggest when you calm down you take another look at what I said. Right now you seem too upset to read it clearly. I hope whatever is bothering you resolves itself. Note that, among many other distortions, I did not say that I had no opinion about investing for market exposure. If you read m...
by afan
Thu Nov 27, 2014 9:51 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: An alternative to alternative investments [QSPIX]

Again, passion, but apparent agreement. I said, and you repeatedly agree, that one cannot use the record of long/short funds to predict the performance of this fund. WE AGREE ON THIS, RIGHT? I said, and you repeatedly agree, that if the fund can change strategy over time, then one could not use the ...
by afan
Wed Nov 26, 2014 6:14 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: An alternative to alternative investments [QSPIX]

Larry, This is very interesting. Your tone suggests that you disagree, but then you restate what I have already said. I am having trouble finding the disagreement implied by "you are off base" Your first point seems to restate exactly what I said. One cannot use the real world performance ...
by afan
Wed Nov 26, 2014 2:58 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: An alternative to alternative investments [QSPIX]

My comments about the expense ratio were based just on the math. The real question is whether one should want such a fund at all. I agree that one is unlikely to find someone offering a long only portfolio like this for 10 basis points. My point was that one can get a long only portfolio for 10 basi...
by afan
Wed Nov 26, 2014 9:39 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: An alternative to alternative investments [QSPIX]

Here you have $,1000 of long exposure and $1,000 of short giving you a loading of 1 on the factor for the 1.5% expense This, of course, presumes one would be willing to pay 1.5%, or some figure above zero, in expense ratio for the short component of the portfolio. The history of long/short funds is...
by afan
Tue Nov 25, 2014 6:55 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: An alternative to alternative investments [QSPIX]

So have we resolved whether the fund is actively managed? Larry says "no". Alex says "yes" and quotes the prospectus that not only states plainly that it is actively managed (which might settle the issue), but then proceeds to describe an active approach. Larry, in what sense do ...
by afan
Tue Nov 25, 2014 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 317
Views: 38352

Re: a look at the size premium and BtM

Interesting results, but I have to question whether the t stats mean anything at all. The t stat would make sense for pre specified comparisons, based on theory. They mean considerably less, perhaps nothing, when applied to data that has already be analyzed for a size effect, over the same periods o...
by afan
Tue Nov 25, 2014 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: a look at the size premium and BtM
Replies: 5
Views: 822
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