Bogleheads.org

Isn't this saying that P/E should be the favored valuation metric?

1/PE = earnings/market = earnings/book * book/market = "profitability" * Fama-French value factor

Brad

Is there a reason why a "back door" Roth isn't a possibility?

Nisi, an interesting one to plot would be VUSTX (long Treasury). On Vanguard I find it had a total return of 13% in 1998, but I couldn't find more detailed data. Did it in fact experience a flight to quality during the crisis?

So, what about bonds? Let's consider the case of someone who owns a three-fund portfolio (I'm assuming this to save myself the calculations), and let's say it's a very conservative portfolio, as someone in retirement might have: 20% TSM, 10% TISM, 70% TBM. YTD through yesterday, May 17, this portfol...

I have always found the equity periodic table useless, and this one is even more so. Some of the asset classes are kind of questionable. And a direct head-to-head comparison of other misses the point: TIPS vs. nominal? Munis vs. taxable?

I agree with the recommendation above that a search of previous threads on this topic is likely to be informative. One recommendation that is often made on threads on this topic is that if you do decide to buy LTCi, that you go through an independent agent, who isn't committed to just one company's ...

They pegged at 5. Top of the scale. Vanguard says, not me, Vanguard says: ⋅ It is riskier than their high-yield bond fund, VWEHX. ⋅ IT IS RISKIER THAN THEIR S&P 500 STOCK INDEX FUND, VFINX, OR THEIR TOTAL STOCK MARKET INDEX FUND, VTSMX. ⋅  IT IS IN THE SAME RISK CA...

Grok,

On the topic of tip #7, is Vanguard's decision to include foreign bonds in TR funds justified?

Thanks,
Brad

Right now should be about the easiest time to stay the course. I mean, the market has reached a new high for the first time since 2007, and only the second time since 2000.

I'm not quite sure why the topic is coming up at present.

Any ideas?

Brad

See this recent thread: viewtopic.php?f=1&t=115796

I posted my thoughts there, and promptly killed the thread. So I won't repeat them here.

This should be a testable hypothesis. If Andreessen is correct, then risk-adjusted returns of private equity should exceed those of stocks. So, do they (to the extent we can get good numbers)? I can imagine it plausible that the hypothesis is correct. But Andreessen now works in the venture capital ...

Although value tilting tends to reduce tax efficiency by having a larger dividend yield, size tilting actually increases tax efficiency. Vanguard TSM Index: 1.97% SEC yield Vanguard Smallcap Index: 1.35% SEC yield In fact, SV isn't significantly less tax efficient than TSM: Vanguard SV Index: 2.08% ...

Billionaires reputed to be Dumping Stocks, practitioner of the "dismal science" claims to know why.
There...who likes that version better?

One doesn't need an advisor to tilt, of course, only to access DFA funds. It's quite easy to put together a tilted portfolio with publicly-available ETFs

I was going to ask whether transistors would have been developed without the inspiration of the galena crystal. (Galena crystals with point contacts were natural rectifiers used in "crystal radios." But in fact, perhaps, a galena-based transistor was developed in 1933--but overlooked. Of ...

I don't appreciate the badmouthing of Antimony and especially Bismuth. Here's a recently-discovered scientific fact: bismuth is radioactive .* So enjoy your bismuth medal now--it won't be there forever. (I do have a cool-looking piece of bismuth like the picture). *the half-life is about a million ...

The situation for a combination of S&P 500 and EAFE is actually quite similar. Here's a post from a thread a few years ago that nisi may remember, since he posted on it. Thanks Trev. Hope you don't mind if I cut your numbers down to the essentials: 0.6582 = TSM and EAFE/Intl Developed 1970-2008 ...

I have an account at E-trade, and one at Vanguard. I transferred a Vanguard mutual fund between the accounts (Emerging Market index, I transferred it so I could convert to cheaper ETF shares). It did get a bit messy, in that my cost basis information didn't survive the transfer, and then Vanguard pu...

In general, if stocks are doing well I don't really care how bonds are doing. I have a mostly equities portfolio and it would have done fine overall during the last four years even if I owned bonds that lost 5% in value every year. I only care that correlations go negative when stocks tank. Here is...

Of course if you decide to just stick to index funds and not own any individual stocks, not even BRK, WB won't take issue with that approach. Remember he bet in 2008 that Vanguard S&P 500 Index Admiral Shares would beat a fund of hedge funds over a 10 year period. He's now ahead, even though it ...

how does 100% stocks sound, should I borrow against my house to invest , etc. No! Been there, done that (in 2003, 2004, 2008). It worked out reasonably well, overall. Just don't get overextended--also, it works better if the market has just dropped 50%, not the case currently. I'm not going to do t...

james22 wrote:As a provider of liquidity, BRK is unique.

Yes, making a payday loan to Goldman Sachs was priceless.

Are you saying that the low risk borrowers in their A/B/C... scheme aren't really that low risk by conventional standards? What credit scores do their letter grades correspond to? Actually you can go to the site and browse the loans in search of funding, which lists the letter grades and a credit s...

What a great thread. I'm wondering though, of the more seasoned (veteran?) Bogleheads who have been rewarded nicely over time for owning a broadly diversified portfolio of equities and bonds, assigning an AA suitable to their risk tolerance and re-balancing accordingly, and investing for the long t...

In terms of the variance of annualized returns, of course they become safer with longer holding times! I don't expect the annualized return of TSM over a 25 year period to ever be +35% or -35%, but it has exceeded both numbers for a one-year period. But variance of annualized returns is either at b...

When did Fama and French state that dividend growth stocks capture a unique risk factor?

Slicing and dicing may yield better risk-adjusted returns. But these people's implementation of it (where's SV?) is kind of bizarre.

VictoriaF wrote:Hi Brad,

Was it a lucky escape or an ingenious strategy?

Victoria

Sometimes it's better to be lucky than good.

rkhusky wrote:I am flipping a coin and have gotten 10 heads in a row. What are the odds that I will get another heads?

I think the odds that it's not a fair coin are starting to go up. If you get 20 heads in a row it's pretty much a certainty.

In terms of the variance of annualized returns, of course they become safer with longer holding times! I don't expect the annualized return of TSM over a 25 year period to ever be +35% or -35%, but it has exceeded both numbers for a one-year period.

Since my wormhole hasn't yet spit out a copy of the 1040 Instructions for 2035, I plan to continue to contribute to my retirement accounts using a mixture of pre-tax and after-tax (i.e. Roth) money.

Brad

Perhaps economist Arnold Kling has the pithiest take on this issue. There is a popular conception that stocks are less risky in the long run than in the short run. This cannot possibly be correct. As Zvi Bodie points out, any option pricing model would break down if stocks were less risky in the lo...

VictoriaF wrote:Hi Brad,

What's done is done. Perhaps, Monday won't be all that RRRR bad,

Victoria

Actually, it was a pretty good day. For my portfolio, and for me as well. Hope your day was good also.

Brad

In general, if stocks are doing well I don't really care how bonds are doing. I have a mostly equities portfolio and it would have done fine overall during the last four years even if I owned bonds that lost 5% in value every year. I only care that correlations go negative when stocks tank.

Bonds are usually covered by Total Bond Market (VTBMX), but this is only suitable for a retirement account. I completely disagree. There are many reasons why bonds are desirable in a taxable account. 1. You do not have sufficient tax advantaged space. 2. You are retired and these are funds you will...

dbr,

I was talking from the point of view of someone in the accumulation phase, whose income is from salary and not from the portfolio.

Which Vanguard Index Fund are you invested in? There are a ton of them. I have: VFINX Any thoughts about it? Thanks. It's good, but is limited to the S&P 500, and misses the stocks of smaller companies. The total market index (VTSMX) includes the S&P 500 and the smaller companies as well. A...

In the '08 debacle there was some 25% difference in bond fund performance from top to bottom. That could have made a whole lot of difference if you were trying to rebalance into the bull market in equities. +1 I think it matters a great deal how much one has in equities. For mostly bond portfolio T...

Unfortunately I missed the TSP deadline for transactions (noon EDT). So I will be moving money to the G Fund on Monday--hopefully it won't be an RBD. ;) Hi Brad, Perhaps, you should wait until 11:30 to see if it's really-bad or just bad {smile}, Victoria Hi Victoria, Well, I did put in the transfer...

I have taken a loan from LendingClub (now paid off, was cheaper the credit card rates), but can't convince myself to invest. I just invest taxable, after max 401k and roth, with non-Boglehead Vanguard ETFs. Mike, Thanks for sharing your experience. Your situation (getting out of credit card debt) s...

I hope there are lots of good CGI special effects--maybe having Roth IRAs double in size!

This is kind of interesting. I'd heard of the concept, but had never given it serious thought before. One question for EmergDoc and anyone else who has dabbled in this: In addition to the risk grade given, do you select loans based on the stated purpose? There seem to be a lot of consolidation loans...

When Grabiner recently reached 10,000 posts, I looked through the list of members to see who else was a member of the 10K club, or about to join. It turns out that LadyGeek is within a few posts (9992 as I write this). LadyGeek is of course also the site administrator, has a really cool handle, avat...

Unfortunately I missed the TSP deadline for transactions (noon EDT). So I will be moving money to the G Fund on Monday--hopefully it won't be an RBD.

BRK is about 2-3% of my portfolio.

If we're playing the retrospective returns game, then we all should have put our entire portfolios into RZV ($13 in March 2009, $47.50 today). Or, put everything into TBM since 2000.

Bill Bernstein wrote an interesting post on this asset class several years ago. The Longest Discipline In short, putting 5-10% of your portfolio in this asset class and mechanically rebalancing has historically improved variance-adjusted returns. But only if you stay the course over decades. Too goo...

I wouldn't invest a penny with that clown. Even if you did like him, how long do you think he will be around? I think the guy is almost 85. Yep, after his commentary about how a certain gender is the key to leading the economy and country but he convienently left out the part about how he critizes ...

at the end of the day Berkshire is an insurance company, no more and no less. I can't think of any other insurance companies that own railroads. My point being that BRK is significantly less of an insurance company than it was 15 years ago. I do own some BRK stock, but not a significant part of my ...

Rick,

You mention in the column that "there are some [asset classes] that work better in an actively-managed fund." Which ones are those?

Thanks,
Brad

The only other thing I can suggest is to embrace rather than oppose your Dad's desire to live it up in retirement, but to do so while addressing both your concerns. For instance, you could encourage him to undertake activities as: motorbiking, deep sea diving perhaps possibly accompanied by photogr...