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Re: Can consumers assess the value of life annuities?

Not to be too smart-alecky about it, but the majority of adults are functionally innumerate. Financial ignorance is just a by-product of the general inability of being able to cope with anything that requires converting numbers into meaning or vice versa.
by asset_chaos
Wed Apr 01, 2015 5:38 am
 
Forum: Investing - Theory, News & General
Topic: Can consumers assess the value of life annuities?
Replies: 5
Views: 352

Re: When everyone "knows" the euro will fall

Sometimes "everyone" is right, and sometimes "everyone" is wrong, and sometimes "everyone" is right for a while then wrong later, or vice versa. As I find it difficult to discern in advance which time is which, I tend to ignore everyone's opinion---at least about invest...
by asset_chaos
Tue Mar 24, 2015 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: When everyone "knows" the euro will fall
Replies: 7
Views: 1314

Re: Lump sum - how to invest it now and sleep at night?

I think whether you keep the same allocation or change to a more conservative one depends on how big this lump sum is compared to your financial assets without it. If the lump sum is 10 or 20% of your financial wealth now, then invest the lump sum now. If you were ok with 80:20 yesterday, what's dif...
by asset_chaos
Sat Mar 21, 2015 5:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lump sum - how to invest it now and sleep at night?
Replies: 27
Views: 3222

Re: How much international stock for a foreigner

Why is China so under represented in the FTSE all world equity index? At first look I don't like this at all. China is the rising superpower. Isn't this an effect of free float? Most indices (FTSE, MSCI, et al) use free float weighting. The weight of a company is the total market capitalization min...
by asset_chaos
Sat Mar 21, 2015 5:20 pm
 
Forum: Investing - Theory, News & General
Topic: How much international stock for a foreigner
Replies: 23
Views: 1056

Re: How much international stock for a foreigner

I think your split of the stock allocation is reasonable for your circumstances. It overweights your home market some but not excessively. My hesitation is that your parents' retirement fund is 70:30 stocks:bonds. I'm guessing your parents are at least in their 50s. If it were me, I would want my re...
by asset_chaos
Sat Mar 21, 2015 5:07 pm
 
Forum: Investing - Theory, News & General
Topic: How much international stock for a foreigner
Replies: 23
Views: 1056

Re: Trusts taxes distributions

It's not exactly that tax rates are high. Tax rates for trusts are the same as for individuals. The difficulty is that the tax brackets are highly condensed, with a tax free threshold of only $600 and the top tax rate kicking in at around $12,000 of income. Distribution will get the money taxed at t...
by asset_chaos
Fri Mar 20, 2015 3:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trusts taxes distributions
Replies: 4
Views: 391

Re: Vanguard - The New Bond King - WSJ

Instead of a King, he's like a plumber. I think less a plumber and more like a power plant operator. In the plant you want the needles on the dials to stay at particular points, and the operator's job is to continually adjust the plant's controls so that those needles stay on those optimum numbers....
by asset_chaos
Wed Mar 18, 2015 8:03 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard - The New Bond King - WSJ
Replies: 27
Views: 4301

Re: Advice needed on proposed portfolio (Australia)

Yes, there is certainly going to be fiddling done to the super rules over the next 30 years. You're right that politicians can't help themselves, and anything that depends on a political decision to gain an investment advantage always runs the risk of having that political decision changed. But none...
by asset_chaos
Mon Mar 16, 2015 1:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice needed on proposed portfolio (Australia)
Replies: 8
Views: 698

Re: Should I change Asset Allocation to a more conservative

If it were me, I wouldn't pay capital gains tax to be more conservative, but if I wanted to reduce risk faster, I would start redirecting stock dividends and all my fresh savings to bonds. If you're much closer to the retirement nest egg you think will do, perhaps also consider changing your 1% glid...
by asset_chaos
Mon Mar 16, 2015 1:22 am
 
Forum: Personal Finance (Not Investing)
Topic: Should I change Asset Allocation to a more conservative mix
Replies: 20
Views: 1950

Re: Benefit of tilting towrds Nordic minus Norway for Norweg

According to this http://en.wikipedia.org/wiki/OBX_Index the Norwegian stock market is about 37% oil and gas and 20% finance. Those two sectors dominate the Norwegian stock market. Even with Sweden and Finland added in, the entire Nordic stock market doesn't come to 2% of the global market ( https:/...
by asset_chaos
Mon Mar 16, 2015 12:20 am
 
Forum: Investing - Help with Personal Investments
Topic: Benefit of tilting towrds Nordic minus Norway for Norwegian?
Replies: 2
Views: 355

Re: Advice needed on proposed portfolio (Australia)

You've clearly mastered the saving part of growing financially secure, and you're doing your homework on mastering the investing part. Congratulations. The plan you propose gets right all the essentials. I will make a couple of suggestions/comments that may improve things at the margin. 1) Vanguard ...
by asset_chaos
Sat Mar 14, 2015 10:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice needed on proposed portfolio (Australia)
Replies: 8
Views: 698

Re: I bought [United States Oil ETF (USO) by mistake]

I have to admit that I did not understand USO well before I bought it, and is was a mistake. Sell now and consider the loss (net of any tax loss you might be able to claim against gains or ordinary income) the cost of the knowledge gained to in the future not invest in anything you don't thoroughly...
by asset_chaos
Sat Mar 14, 2015 9:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: I bought [United States Oil ETF (USO) by mistake]
Replies: 13
Views: 1679

Re: U.S. Stock Valuations — Making History?

Are we getting hints of commentary parallels with the late 90s? I remember two prominent commentary strands in the tech run up. One group opined that owning large US growth stocks was the only reasonable strategy. The other pointed out the high valuations in that part of the market. There were rejoi...
by asset_chaos
Fri Mar 13, 2015 4:57 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4550

Re: Is High Frequency Trading a Problem For Bogleheads?

I recall an article that quoted Gus Sauter from around the time he retired from Vanguard that asked him this same question. I recall his answer was along the lines of he didn't have a problem with it and he thought it made running the index funds a little eaiser/cheaper. If someone like Sauter, who'...
by asset_chaos
Thu Mar 12, 2015 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: Is High Frequency Trading a Problem For Bogleheads?
Replies: 42
Views: 1854

Re: What do you think of Fidelity's retirement benchmarks?

If for argument's sake you take a 4% withdrawl rule in retirement, then with the 8x rule in the OP you expect to draw 0.04 x 8 = 0.32 x final working salary to have pre-tax to live on. That's probably liveable, but it's not great if that's all there is. But if pensions and/or social security replace...
by asset_chaos
Wed Mar 11, 2015 7:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: What do you think of Fidelity's retirement benchmarks?
Replies: 14
Views: 2120

Re: Bond credit risk is unique from equity risk

put to bed the false notion that credit risk and equity risk are one in the same. Live and learn. I didn't know that was a notion. Seeing as how they are separate Fama-French risk factors, I had just accepted that it was generally thought that credit risk and market risk were sufficiently distingui...
by asset_chaos
Tue Mar 10, 2015 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: Bond credit risk is unique from equity risk
Replies: 12
Views: 1240

Re: WSJ: Vanguard ETF holdings not public daily

I don't understand. Vanguard publishes a composition file on its institutional website (for example https://institutional.vanguard.com/VGApp/iip/site/institutional/investments/portfoliodetails?fundId=0970&compositionTabBox=1#hold for total stock market VTI) that lists the names and numbers of sh...
by asset_chaos
Mon Mar 09, 2015 2:59 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ - Why Vanguard is Secretive on Stock ETF's
Replies: 13
Views: 1484

Re: Poll: Increasing international equities

Definitely staying the course, but as I moved in 2008-2009 to total world as my core stock holding, I don't really know if my non-US equity fraction is increasing or decreasing. And frankly, as I hurtle towards retirement, I care more these days about making my fraction of bonds increase.
by asset_chaos
Tue Mar 03, 2015 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Increasing international equities
Replies: 58
Views: 3798

Re: WHY YOU OWE YOUR FREEDOM TO JACK BOGLE

Happy and proud to have signed the petition and backed a well deserved honor for Bogle.
by asset_chaos
Tue Mar 03, 2015 6:33 pm
 
Forum: Investing - Theory, News & General
Topic: SIGN PETITION for Jack Bogle's Presidential Medal of Freedon
Replies: 55
Views: 4481

Re: International is disappointing

Of the slices you make of the market, some will wax and some will wane---and just when you notice the relativity, they change and do it again. More seriously, maybe, to combat worry and regret, you could make market churn less visible and just invest in stocks through total world. Total World has t...
by asset_chaos
Fri Feb 27, 2015 9:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: International is disappointing
Replies: 84
Views: 7178

Re: International is disappointing

Of the slices you make of the market, some will wax and some will wane---and just when you notice the relativity, they change and do it again.

More seriously, maybe, to combat worry and regret, you could make market churn less visible and just invest in stocks through total world.
by asset_chaos
Fri Feb 27, 2015 3:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: International is disappointing
Replies: 84
Views: 7178

Re: Portfolio costs: FTSE All World vs SP500

I suspect the consensus opinion may be that this is a false choice in that relatively few Bogleheads chose purely the index 500 fund and even fewer chose to invest in stocks via the global market index fund. In fact, in this 2011 poll https://www.bogleheads.org/forum/viewtopic.php?t=70974 , of the B...
by asset_chaos
Thu Feb 26, 2015 1:17 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio costs: FTSE All World vs SP500
Replies: 6
Views: 735

Re: Vanguard's New Index Fund of Municiples

Should, one day, the dreaded bond crash occur, I may use this fund to tax loss harvest from intermediate tax exempt fund. But for now, I don't see a compelling reason to switch.
by asset_chaos
Mon Feb 23, 2015 3:10 pm
 
Forum: Investing - Theory, News & General
Topic: New Vanguard AMT-free National Municipal Bond Fund
Replies: 79
Views: 7417

Re: Contributing to Vanguard Roth IRA from Australia?

If you have income above the foreign earned income exclusion, that counts as income you could contribute to a Roth IRA. I think, but am not certain, that total income, including adding back the excluded foreign income, is what counts towards the upper income limit for Roth contributions.
by asset_chaos
Mon Feb 23, 2015 12:48 am
 
Forum: Investing - Help with Personal Investments
Topic: Contributing to Vanguard Roth IRA from Australia?
Replies: 4
Views: 286

Re: What if a trustee violates the terms of trust?

The lawyer that drafted the trust document for us suggested including the role of a trust protector. The protector is entrusted with the right to fire the trustee and appoint a new one, though not himself, in the case that the beneficiaries complain the trustee is not following the trust terms or is...
by asset_chaos
Thu Feb 19, 2015 7:17 am
 
Forum: Personal Finance (Not Investing)
Topic: What if a trustee violates the terms of trust?
Replies: 4
Views: 608

Re: Are International Stocks Classified by HQ location?

Investing via a total world type fund renders the question moot.-)
by asset_chaos
Tue Feb 17, 2015 4:19 pm
 
Forum: Investing - Theory, News & General
Topic: Are International Stocks Classified by HQ location?
Replies: 5
Views: 482

Re: Improving the Lifestrategy Funds

They're fine the way they are. The LifeStrategy funds package up all the world's investable financial assets in proportions that Vanguard has selected to be reasonable (and which are reasonable) into several flavors of low cost investments. Vanguard ought to have investments like LifeStrategy availa...
by asset_chaos
Mon Feb 16, 2015 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: Improving the Lifestrategy Funds
Replies: 63
Views: 5292

Re: The Best 60/40 Portfolio?

There is no objectively "best" portfolio because best depends on unknowable details about future market returns. But there are any number of perfectly reasonble portfolios that are likely to be sufficiently good that they will help you achieve your financial goals. LifeStrategy Moderate Go...
by asset_chaos
Thu Feb 12, 2015 12:43 am
 
Forum: Investing - Help with Personal Investments
Topic: The Best 60/40 Portfolio?
Replies: 20
Views: 2223

Re: Vanguard Australia

They have a website http://www.vanguard.com.au . He could also build a comprehensive, low-cost investment program from Vanguard exchange tranded funds through a brokerage account. It's impossible to say without knowing his circumstances, but if he doesn't already have superannuation, he could invest...
by asset_chaos
Mon Feb 09, 2015 3:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Australia
Replies: 1
Views: 176

Re: Inherited Mutual Funds: Investing advice

Inherited assets receive a step up in basis to the value on the date of death of the decedent. If you recently inherited this, the gains/losses should be minimal, so now is a good time to sell the old investments and reinvest the funds in a way that you will be happy with for the long term. If I we...
by asset_chaos
Fri Feb 06, 2015 6:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited Mutual Funds: Investing advice
Replies: 67
Views: 3374

Vanguard survey: what should they do differently?

Vanguard asked me to take a survey today. One of the open ended questions was What is the one thing you wish Vanguard would do differently? Living abroad, my answer was integrating and lowering costs of Vanguard ex-US investing, though probably not easy due to cross-border legal restrictions. But I ...
by asset_chaos
Tue Feb 03, 2015 7:52 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard survey: what should they do differently?
Replies: 72
Views: 4308

Re: Would anyone go 100% bonds if...

Fantasy, love it. At the designated level of windfall I'd invest balanced for today and for my posterity, so 50/50 global stocks and muni bonds with a pretty hefty donor advised fund on the side.
by asset_chaos
Sat Jan 31, 2015 6:50 pm
 
Forum: Investing - Theory, News & General
Topic: Would anyone go 100% bonds if...
Replies: 41
Views: 3554

Re: Vanguard Bond Portfolio

Both of the choices proposed are perfectly reasonable and both should admirably perform the safety function of bonds in a portfolio. As I value investing simplicity, if I were choosing between these two options, I would tend towards the simpler one fund solution.
by asset_chaos
Fri Jan 30, 2015 6:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Bond Portfolio
Replies: 11
Views: 1177

Re: Poll: Do you contribute max to tax-advantaged before 529

Every year---gasp, for over a decade!---I max our retirement accounts and several Coverdells but don't normally contribute every year to 529 accounts.
by asset_chaos
Thu Jan 29, 2015 6:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Do you contribute max to tax-advantaged before 529?
Replies: 38
Views: 2848

Re: Why not a 2 fund portfolio like Bogle suggests

"Why not a 2 fund portfolio?" If someone handed me a sufficiently large sum to invest in taxable accounts, total world and intermediate term municipal bond funds would suite me. Those are two fine funds.
by asset_chaos
Thu Jan 29, 2015 6:11 pm
 
Forum: Investing - Theory, News & General
Topic: Why not a 2 fund portfolio like Bogle suggests
Replies: 36
Views: 4070

Re: Mr. Bogle on CNBC today--International and Bonds

I don't think I've ever heard him mention it, but what's his advice for someone who doesn't live in the US? Although I don't have a citation handy, Bogle has said before in at least one interview that his advice is directed towards an American investor. His advice to have only domestic investments ...
by asset_chaos
Thu Jan 29, 2015 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Bogle on CNBC today--International and Bonds
Replies: 50
Views: 6616

Re: What's wrong with volatility if buy&hold

A Lo strategy for an individual investor would look something like this. If the market falls at least 15% and the VIX is high (say 28 or more) sell some percent of your equity holdings (perhaps 10% or 15%). If the market continues to drop and has fallen say more than 25% and the VIX remains high, o...
by asset_chaos
Mon Jan 26, 2015 10:56 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3628

Re: Do any young investors use Only fixed income?

If a person has $100,000 to invest today and can invest $30,000 every year for the next 35 years. This person needs to only average a 4.5% rate on their investment to break the $3M mark in 35 years. Aside from the fact that your $3 million is nominal, where are these municipal bonds yielding 4.5%? ...
by asset_chaos
Mon Jan 26, 2015 10:37 pm
 
Forum: Investing - Theory, News & General
Topic: Do any young investors use Only fixed income?
Replies: 35
Views: 3380

Re: What's wrong with volatility if buy&hold

azumz wrote:What's wrong with volatility if buy&hold

Nothing. Dial up the expected volitility for your portfolio of stocks and bonds that you can live with, and by definition you live with it and accept the returns of stocks and bonds that the markets give.
by asset_chaos
Mon Jan 26, 2015 6:05 am
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3628

Re: Market cap weighting flawed?

Why would you invest in a cap weighted global market index but only GDP weight Germany (or some select group of countries)? For that matter why would GDP weighting of a global stock index make sense? You first put all companies into boxes by virtue of where they say they're headquartered. Then the b...
by asset_chaos
Sun Jan 25, 2015 9:15 pm
 
Forum: Investing - Theory, News & General
Topic: Market cap weighting flawed?
Replies: 10
Views: 762

Re: Real 3% (CPI plus 3% guaranteed)

I'd dig deeply into the question of who conjures this guarentee and how they do it.
by asset_chaos
Thu Jan 22, 2015 4:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Real 3% (CPI plus 3% guaranteed)
Replies: 21
Views: 1862

Re: Let's Celebrate! Which funds are you buying in 2015?

About 90% of my buying will be bonds, intermediate tax exempt, and 10% will be non-US small value. I don't think I'd call it celebrating. It's just planned maintenence.
by asset_chaos
Mon Jan 19, 2015 7:54 pm
 
Forum: Investing - Theory, News & General
Topic: Let's Celebrate! Which funds are you buying in 2015?
Replies: 48
Views: 3708

Re: Return of the Stockpickers

Every year ought to be a good year for stock pickers. The dispersion of returns---the return difference between the best and worst performing stocks---just in the S&P 500 is always large, greater than ~20% annually. If stock pickers were skilled, the opportunity is there for them every year to d...
by asset_chaos
Mon Jan 19, 2015 6:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Return of the Stockpickers
Replies: 8
Views: 737

Re: Expense Ratios Comparison Total Stock 2008 vs. 2013

The headline expense ratios went down, which is good but not the whole story. The fraction of investor dollars in lower cost share classes also went up significantly: admiral plus signal plus institutional plus etf went from half of assets to 2/3.
by asset_chaos
Wed Jan 14, 2015 8:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Expense Ratios Comparison Total Stock 2008 vs. 2013
Replies: 9
Views: 820

Re: European investors - Hedging U.S. dollar position

The question of your foreign currency exposure is not as straight forward as it seems. First, the question should be considered in the context of one's entire portfolio. Do you have some bonds? You should, and they should be denominated in euros. Second---and this is a more speculative idea on my pa...
by asset_chaos
Tue Jan 13, 2015 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: European investors - Hedging U.S. dollar position
Replies: 9
Views: 766

Re: Risk Efficiency of Thrift Savings Plan Portfolio

Will you explain please what you mean by "risk efficient"? I, at least, am not familiar with that term. Otherwise, a 40/60 stock/bond portfolio for retirement is in the range of reasonable.
by asset_chaos
Tue Jan 13, 2015 6:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Risk Efficiency of Thrift Savings Plan Portfolio
Replies: 14
Views: 1190

Re: Best way to Follow Mr. Bogle appearances

Mr Bogle's website is http://johncbogle.com. That page may have his speaking schedule, or a contact for his assistant to ask when/if he'll make an appearance in your area.
by asset_chaos
Sun Jan 11, 2015 7:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best way to Follow Mr. Bogle appearances
Replies: 2
Views: 427

Re: Marketcap vs. FACTOR indexing

Assuming fees are the SAME, would FACTOR indexing such as VALUE and MIN. Volatility be superior? My take is that it is a better way to index vs. marketcap. Superior, what does superior mean? I think you're forgetting about risk. To earn a factor premium means bearing a factor risk. I've seen some s...
by asset_chaos
Wed Jan 07, 2015 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Marketcap vs. FACTOR indexing
Replies: 15
Views: 1645

Re: Bilingual households

My thought was wouldn't it be nice to teach each other and the kids each other's language. This may be a good time to do it when they are pre-Kindergarten. For Bilingual or even Trilingual households, how do you teach your kids multiple languages without causing confusion. How do you teach your kid...
by asset_chaos
Mon Jan 05, 2015 8:47 pm
 
Forum: Personal Consumer Issues
Topic: Bilingual households
Replies: 39
Views: 5205

Re: Poll: How long have you been with your current AA?

As I glide (soar?) towards retirement, I increased the bond allocation target by 1 percentage point on January 1st.
by asset_chaos
Sat Jan 03, 2015 7:18 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: How long have you been with your current AA?
Replies: 44
Views: 2524
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