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Re: "The 15-Stock Diversification Myth"

It has been shown mathematically that only a relatively small number of representative securities together have (asymptotically) almost the same risk as the index. If you were to blindly pick say 15-20 securities across industries and market capitalizations, or maybe ca. 40 across international mar...
by bpp
Thu Dec 18, 2014 10:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 48
Views: 3882

Re: Why a Boglehead doesn't invest in individual companies?

Is there any real reason to invest in individual companies? There can be: Passively managing individual stocks Wanting to take more risk is not a good one, though, since one is mostly going to get exposure to diversifiable (and therefore uncompensated) risk by using individual stocks, unless one ho...
by bpp
Wed Dec 17, 2014 11:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 48
Views: 3882

Re: Retirement Location [US, Australia, or Elsewhere]

Some people here recommend having some home bias, for currency reasons. If you adopt this, you have two potential homes in retirement at this point, US and Australia. In your shoes, I might split 1/3 US, 1/3 Australia, 1/3 elsewhere for stocks, and either the same split for bonds, or else 1/2 US, 1/...
by bpp
Tue Dec 16, 2014 10:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Retirement Location [US, Australia, or Elsewhere]
Replies: 4
Views: 912

Re: Does your work define you?

Dictionary.com: Define means to explain or identify the nature or essential qualities of... Bogleheads, Lately I've been feeling like my work defines me. I'm not sure if this is good or bad. I have hobbies, things I love to do outside of work, but I just feel like work defines me. It's where I have...
by bpp
Mon Dec 15, 2014 7:03 pm
 
Forum: Personal Consumer Issues
Topic: Does your work define you?
Replies: 30
Views: 2709

Re: You folks think the big one is coming?

jginseattle wrote:
Michael_Fisher1 wrote:
jginseattle wrote:Here in Seattle "the big one" means someting entirely different.



ooo tell me please :)



Earthquake!


The stock market is much like earthquakes, in that The Big One has already come, and will come again.
The big question is when.
by bpp
Fri Dec 12, 2014 10:43 pm
 
Forum: Investing - Theory, News & General
Topic: You folks think [a market crash] is coming?
Replies: 64
Views: 5670

Re: Different Experience With TSA Pre-Check

My preferred entry points to Europe are Frankfurt, Paris (just because I prefer Air France), and Amsterdam (for connections to Africa on KLM / Delta. I avoid Heathrow at any cost. I agree that Heathrow sucks in general, but I hear the same from Brits. Still, no worse than most US airports. Except C...
by bpp
Fri Dec 12, 2014 10:24 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2803

Re: Different Experience With TSA Pre-Check

The abuses that Europeans endure at their airports just amaze me. Interesting. I have always found European airports much more traveler-friendly than American ones. It may be that where you are defined as a "foreigner" matters. L. I am a US citizen resident of Japan. So am a foreigner in ...
by bpp
Fri Dec 12, 2014 10:10 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2803

Re: Different Experience With TSA Pre-Check

Leeraar wrote:The abuses that Europeans endure at their airports just amaze me.


Interesting. I have always found European airports much more traveler-friendly than American ones.
by bpp
Fri Dec 12, 2014 10:01 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2803

Re: Different Experience With TSA Pre-Check

I'm not about to pay for Global Entry ($100 non-refundable application fee regardless of acceptance? Heck with that, I'm signed up for the Japanese version for free -- just call me a Boglehead cheapskate.) But last time I visited the US via Chicago, they had kiosks in the peons lane that seemed to b...
by bpp
Fri Dec 12, 2014 9:35 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2803

Re: foreign passive investment companies

In that case, some suggested reading: Passively managing individual stocks
by bpp
Thu Dec 11, 2014 7:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: foreign passive investment companies
Replies: 10
Views: 929

Re: [Investing in Japan - Help selecting broker, NISA accoun

(1) Is Matsui Securities the only online broker that offers zero transaction fee indefinitely? I heard zero transaction fee offers from other brokers such as SBI Securities, will expire this year 2014. Hopefully someone else who is more up to date on the latest brokerage deals can help you here. (2...
by bpp
Wed Dec 10, 2014 1:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: [Investing in Japan - Help selecting broker, NISA account]
Replies: 4
Views: 606

Re: foreign passive investment companies

Thanks again for the help. Would it be able to use the foreign tax credit against the gains? Yes, but the problem is with mark-to-market treatment, only the US would see a gain. Norway will not recognize a gain unless he actually sells (I assume -- but I know nothing about Norwegian taxation), so t...
by bpp
Mon Dec 08, 2014 7:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: foreign passive investment companies
Replies: 10
Views: 929

Re: foreign passive investment companies

I have experience with PFICs, and all I can say is that if he intends to keep his US citizenship, I would highly recommend staying away from them. Either find a way to invest in US-based ETFs from where he is (if possible), or stick to individual stocks and bonds. Can give more gory details if neede...
by bpp
Sun Dec 07, 2014 10:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: foreign passive investment companies
Replies: 10
Views: 929

Re: Hypothetical - Mutual Funds Don't Exist

I would buy individual stocks at random (literally picked using a random number generator), investing about $1000 per security through interactive brokerage. I would expect to get close to market returns. You'd end up with a pretty heavy small-cap tilt that way, so you'll get something approximatin...
by bpp
Fri Dec 05, 2014 8:51 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical - Mutual Funds Don't Exist
Replies: 26
Views: 1829

Re: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)

Hi bruby, First, we should be clear that your currency exposure depends on the underlying investments, not which currency you bought the fund with. Whether you buy a world stock fund in the US or Japan, for example, your currency exposure is the same. What you should consider though is US and Japane...
by bpp
Fri Dec 05, 2014 3:02 am
 
Forum: Investing - Theory, News & General
Topic: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)
Replies: 14
Views: 1445

Re: Hypothetical - Mutual Funds Don't Exist

mbk734 wrote:Also, are there any benefits of not investing in mutual funds besides the obvious 0% expense ratio of holding stocks.


Tax management is probably the big one.
Have you seen the wiki page on Passively managing individual stocks?
by bpp
Thu Dec 04, 2014 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical - Mutual Funds Don't Exist
Replies: 26
Views: 1829

Re: Hypothetical - Mutual Funds Don't Exist

If bond, REIT, and equity index/active funds didn't exist (gasp!), how would you invest your money and what rules would you follow? This is pretty much the situation I am in with respect to Japanese stocks. There are of course many funds here in Japan covering the local stock market, but they are n...
by bpp
Thu Dec 04, 2014 10:17 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical - Mutual Funds Don't Exist
Replies: 26
Views: 1829

Re: Stanley Kubrick's 2001 a space odyssey

There do seem to be some echoes of The Day the Earth Stood Still. .. I don't quite see the "echoes." Going by sensibilities alone, I don't sense any similarities between "Earth" and "2001." Most of my growing-up years were in the '50s, when I first saw "Earth,&quo...
by bpp
Thu Dec 04, 2014 6:08 pm
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 3961

Re: Stanley Kubrick's 2001 a space odyssey

Renata Adler's review in the New York Times when it opened is spot on: The whole sensibility is intellectual fifties child... And as an intellectual fifties child, I liked that. There do seem to be some echoes of The Day the Earth Stood Still, and of course The Sentinel was published in the 1950s.....
by bpp
Thu Dec 04, 2014 11:54 am
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 3961

Re: Stanley Kubrick's 2001 a space odyssey

oldzey wrote:The ending is even groovier with Pink Floyd: https://www.youtube.com/watch?v=i2uuRG9l1JA

Enjoy! :beer


Excellent!
by bpp
Thu Dec 04, 2014 10:13 am
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 3961

Re: Stanley Kubrick's 2001 a space odyssey

I happened to catch 2001 recently, after not having seen it for, I don't know, at least 30 years probably. I was really impressed at how well it held up, and how enjoyable it was. I think I appreciate now more than I did when younger the slow pacing and quietness of much of the movie. Especially in ...
by bpp
Thu Dec 04, 2014 7:54 am
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 3961

Re: Live in Japan with no plans of coming home. Should I do

sdpfoj239 is right that you should also consider the Japanese tax ramifications of a US-based account. Some threads that may be worth perusing on Japanese tax issues are here: Filing Japanese tax returns (確定申告) ETF / Mutual Fund in Japan Japan - domestic and cross-border loss harvesting The latter t...
by bpp
Tue Dec 02, 2014 11:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Live in Japan with no plans of coming home. Should I do IRA
Replies: 6
Views: 1127

Re: Foreign Stock Index: FTSE vs MSCI EAFE?

The Vanguard FTSE Developed Index Fund follows the FTSE Developed ex North America Index, so it excludes Canada, similar to any EAFE index fund. Argh, didn't realize that. So who decided that "ex-North America" was a meaningful category? My suspicion is that it was actually cobbled togeth...
by bpp
Tue Dec 02, 2014 10:34 am
 
Forum: Investing - Theory, News & General
Topic: Foreign Stock Index: FTSE vs MSCI EAFE?
Replies: 9
Views: 661

Re: Foreign Stock Index: FTSE vs MSCI EAFE?

EAFE always struck me as a strange index, though I'm sure there were good historical reasons why it made sense at the time.

In theory, FTSE would seem to be more sensible and complete.
In practice, it probably doesn't make much difference, so I'd go with retiredjg's suggestion of looking at expenses.
by bpp
Tue Dec 02, 2014 9:48 am
 
Forum: Investing - Theory, News & General
Topic: Foreign Stock Index: FTSE vs MSCI EAFE?
Replies: 9
Views: 661

Re: Software for mapping home systems?

When our house was being built, I took photos of the wiring and plumbing runs before the sheetrock went on so that I would know where I could safely drill holes if I ever needed to. Haven't ever had occasion to refer to those photos, but they are there should the need ever arise.
by bpp
Tue Dec 02, 2014 8:40 am
 
Forum: Personal Consumer Issues
Topic: Software for mapping home systems?
Replies: 11
Views: 1335

Re: Best retirement plan for foreign earned income exemption

I guess I could also fill the remainder of the standard exemption/deduction with a Roth conversion... (if I made exactly enough domestic income to make the full Roth contribution). Not familiar with the mechanics of Roth conversions myself, but in general, yes, filling up the rest of the exemption/...
by bpp
Tue Dec 02, 2014 8:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Best retirement plan for foreign earned income exemption
Replies: 8
Views: 578

Re: Best retirement plan for foreign earned income exemption

It could be for business if I want it to be. Who's to say whether I work on business-related stuff or not (to be honest, I would do some internet work while on vacation anyway, although not as much as usual, so I could probly claim it either way). Might want to have some way to document the work da...
by bpp
Mon Dec 01, 2014 10:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Best retirement plan for foreign earned income exemption
Replies: 8
Views: 578

Re: Best retirement plan for foreign earned income exemption

I would only be returning to the US for vacation, so I'm not sure if that would count. I could claim the $5,500 but I'm not sure which tax bracket it would be in, probably a high one. Vacation would not count. Only days there on business count. The tax bracket would be high (stacking rule), except ...
by bpp
Mon Dec 01, 2014 9:48 am
 
Forum: Investing - Help with Personal Investments
Topic: Best retirement plan for foreign earned income exemption
Replies: 8
Views: 578

Re: Best retirement plan for foreign earned income exemption

Would you happen to have any business trips back to the US while you are living abroad?
Income earned during such trips is not excludable under the FEIE, and could therefore be used to contribute to a Roth.

Ok, slim pickings most likely. But can't really see much else you could do at first blush.
by bpp
Mon Dec 01, 2014 9:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Best retirement plan for foreign earned income exemption
Replies: 8
Views: 578

Re: A rational allocation in individual stocks?

For what it's worth: everything bpp says here flies in the face of value investing principles. As Nisiprius points out, this is not a value investing forum. I'm not trying to promote value investing principles, and I don't think the OP was asking about value investing. I thought the OP was mainly i...
by bpp
Sun Nov 30, 2014 11:47 pm
 
Forum: Investing - Theory, News & General
Topic: A rational allocation in individual stocks?
Replies: 20
Views: 1306

Re: A rational allocation in individual stocks?

You need an absolute minimum of five stocks diversified across five industries but the optimal size of an individual stock portfolio is 15-25 names. 30 at the very most. I will disagree here, and say the optimal size is as many names as possible. 30 at the very least. More is better. The reason bei...
by bpp
Sun Nov 30, 2014 5:33 pm
 
Forum: Investing - Theory, News & General
Topic: A rational allocation in individual stocks?
Replies: 20
Views: 1306

Re: Proper use of a barbell portfolio

Hmm, my thought is that a barbell portfolio is supposed to combine a low-volatility, low-return asset with a high-volatility, high-return one that has low correlation with the first asset. Bonds are the low-volatility, low-return part. REITS are somewhere between stocks and bonds (or worse, are low-...
by bpp
Sun Nov 30, 2014 9:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Proper use of a barbell portfolio
Replies: 13
Views: 1501

Re: Real Estate Investment for a non-U.S. citizen

You are planning to become US citizens, and then leave the US indefinitely? There are some issues you should be aware of in that case: Taxation as a US person living abroad There could also be problems with access to local financial services. In general, I would only recommend taking out US citizens...
by bpp
Thu Nov 27, 2014 11:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real Estate Investment for a non-U.S. citizen
Replies: 3
Views: 713

Re: Japan-like market returns

This thread may be of interest:
Japan, 1989
by bpp
Thu Nov 27, 2014 10:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Japan-like market returns
Replies: 7
Views: 1109

Re: Transitioning from individual stock portfolio to index f

fund_in_the_sun wrote:We do have about 45 individual stocks in the $5M portfolio...Maybe 1/10 are under performing in comparison to the others, but no losers, per se.


Given your facts, I might also suggest some light holiday reading from the Bogleheads wiki: Passively managing individual stocks
by bpp
Wed Nov 26, 2014 10:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transitioning from individual stock portfolio to index funds
Replies: 23
Views: 2339

Re: Transitioning from individual stock portfolio to index f

I think it matters how many individual stocks the OP has. If they have $5 million concentrated in just, say, 5 stocks, I'd be willing to take some tax hit just to diversify. If it is spread over 50 or more stocks, then I'd call it a DIY index, and maybe even leave it alone. Somewhere in between thos...
by bpp
Wed Nov 26, 2014 5:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transitioning from individual stock portfolio to index funds
Replies: 23
Views: 2339

Re: Investing in 100 Words

Diversify and minimize costs. Word word word word word word. Word word word word word word word word word word, word word word word word word word word word word, word word word word word word word word word word, word word word word word word word word word word? Word word word word word word word ...
by bpp
Wed Nov 26, 2014 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in 100 Words
Replies: 19
Views: 1942

Re: Transitioning from individual stock portfolio to index f

How many individual stocks?

Also, do you have any losers that can be paired with winners to reduce the tax hit?
by bpp
Wed Nov 26, 2014 8:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Transitioning from individual stock portfolio to index funds
Replies: 23
Views: 2339

Re: PFIC and ETNs

My thinking is, and correct me if I'm wrong, is that because ETNs don't hold the underlying assets, like a mutual fund or ETF, they're not subject to PFIC rules. Am I wrong? Interesting idea. Never thought much about ETNs before, but searching around, I see reference to that idea in an Israeli blog...
by bpp
Sat Nov 22, 2014 12:38 am
 
Forum: Investing - Help with Personal Investments
Topic: PFIC and ETNs
Replies: 3
Views: 384

Re: Investing In Currency?

If you do buy a foreign bond fund, like the Vanguard one, it hedges the currency exposure/ risk. The Vanguard one is somewhat unusual in doing so, note. Many (most?) don't hedge. I had been given to understand that most did hedge? I don't know about regular mutual funds (being irrelevant to me), bu...
by bpp
Thu Nov 20, 2014 10:17 am
 
Forum: Investing - Theory, News & General
Topic: Investing In Currency?
Replies: 33
Views: 2449

Re: Investing In Currency?

Valuethinker wrote:If you do buy a foreign bond fund, like the Vanguard one, it hedges the currency exposure/ risk.


The Vanguard one is somewhat unusual in doing so, note. Many (most?) don't hedge.
by bpp
Thu Nov 20, 2014 6:46 am
 
Forum: Investing - Theory, News & General
Topic: Investing In Currency?
Replies: 33
Views: 2449

Re: Investing In Currency?

After reading and evaluation all of these posts, I've come to conclusion that just investing into International Stocks is the safest and best way to invest into Foreign Currency? I assume you are American. American's do not have to "invest" in currencies as everything we do is in dollars ...
by bpp
Thu Nov 20, 2014 6:45 am
 
Forum: Investing - Theory, News & General
Topic: Investing In Currency?
Replies: 33
Views: 2449

Re: Why own International at all?

Because Japan:
Image
by bpp
Fri Nov 14, 2014 8:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why own International at all?
Replies: 45
Views: 4415

Re: What individual stock?

I guess I'd just pick the largest-cap domestic stock: Toyota

Or else the largest-cap global stock: Apple
by bpp
Thu Nov 06, 2014 10:00 pm
 
Forum: Investing - Theory, News & General
Topic: What individual stock?
Replies: 20
Views: 1421

Re: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)

You are absolutely right - hard to find authoritative advice - save for yours (50% domestic/50% international). My advice is hardly authoritative! By the way, I was influenced in my thinking early on by Norbert Schlenker, a Canadian financial advisor who posts at (what is now called) Financial Wisd...
by bpp
Wed Nov 05, 2014 9:31 am
 
Forum: Investing - Theory, News & General
Topic: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)
Replies: 14
Views: 1445

Re: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)

3. outright dividend withholding tax (but this may be negated as you mentioned) Hmm, now it click that they have not paid any dividends yet. Which must mean they are reinvesting them internally. So you save on Japanese withholding tax (20%), which is greater than the lost US withholding tax (10%). ...
by bpp
Tue Nov 04, 2014 7:33 pm
 
Forum: Investing - Theory, News & General
Topic: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)
Replies: 14
Views: 1445

Re: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)

thanks bpp for your comments. I believe the funds do include the ERs of the underlying ETFs as part of the TER of the fund. (to be exact, all of them charge 0.2484% on top of the ETF ERs). Ok, if that is the case, it is not quite as bad as I thought... In my mind, what benefits to these are things ...
by bpp
Tue Nov 04, 2014 6:53 am
 
Forum: Investing - Theory, News & General
Topic: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)
Replies: 14
Views: 1445

Re: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)

Not quite sure I see what the appeal of these is. You can buy most of the underlying ETFs or equivalents directly yourself, without paying the extra expense ratio on top. (I assume the published ER does not include the the underlying ETFs' ERs?) I also believe that the funds would pay 10% withholdin...
by bpp
Tue Nov 04, 2014 2:53 am
 
Forum: Investing - Theory, News & General
Topic: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)
Replies: 14
Views: 1445

Re: Individual investors behaving badly

bpp If Japanese large stocks sure that is okay. But what about small stocks and value stocks and perhaps REITs. I have a Japanese large-cap bucket, and a small-cap one. The small-cap one has larger short-term deviations from its index than the large-cap one has from its index, but so far both bucke...
by bpp
Thu Oct 30, 2014 7:22 pm
 
Forum: Investing - Theory, News & General
Topic: Individual investors behaving badly
Replies: 18
Views: 2795

Re: Individual investors behaving badly

bpp Yes the motivation matters. The reason is selling from fear is behavioral error. Selling for tax loss harvesting is RATIONAL, the right thing, not a mistake. And with TLH you intend to buy in 30 days regardless of what market does (or swap immediately if a fund) and no such plan exists if selli...
by bpp
Thu Oct 30, 2014 5:22 pm
 
Forum: Investing - Theory, News & General
Topic: Individual investors behaving badly
Replies: 18
Views: 2795
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