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Re: Defining "Stay the Course"

I'm merely curious why it's ok to deviate from one's IPS if there is a change which impacts only the deviatee but not ok if there is some kind of change which impacts the community in general. I've never heard it discussed. No hidden agenda with me. You said why wouldn't a Boglehead go beyond rebal...
by dkturner
Thu Aug 21, 2014 7:13 pm
 
Forum: Investing - Theory, News & General
Topic: Defining "Stay the Course"
Replies: 36
Views: 2755

Re: Defining "Stay the Course"

I'm merely curious why it's ok to deviate from one's IPS if there is a change which impacts only the deviatee but not ok if there is some kind of change which impacts the community in general. I've never heard it discussed. No hidden agenda with me. Because, if you change your asset allocation (red...
by dkturner
Thu Aug 21, 2014 10:47 am
 
Forum: Investing - Theory, News & General
Topic: Defining "Stay the Course"
Replies: 36
Views: 2755

Re: Defining "Stay the Course"

... Why does a change only have to be about YOU before it's actionable? What about a change in circumstances (i.e. PE10 hits 50) which arguably effects everybody? Why does the change in circumstances have to be personal before a Boglehead gets a pass from the stay the course mantra? Just curious :c...
by dkturner
Thu Aug 21, 2014 8:06 am
 
Forum: Investing - Theory, News & General
Topic: Defining "Stay the Course"
Replies: 36
Views: 2755

Re: Defining "Stay the Course"

I am a pretty consistent Boglehead with a plan and am good at mainly sticking to it. But I just had a job-related life event that suddenly changed my risk profile. As a result, I moved my 4% allocation of High Yield bond fund to intermediate bonds. I know there has been a flow recently out of high ...
by dkturner
Wed Aug 20, 2014 8:08 am
 
Forum: Investing - Theory, News & General
Topic: Defining "Stay the Course"
Replies: 36
Views: 2755

Re: Shiller on Lofty Market Elevations

grayfox wrote:
Maybe I split the difference and go 50/50. That sounds like a good wishy-washy solution.

:?: Which would you choose?


I'd go with 50/50 too. But then my favorite color is plaid.
by dkturner
Tue Aug 19, 2014 8:06 am
 
Forum: Investing - Theory, News & General
Topic: Shiller on Lofty Market Elevations
Replies: 55
Views: 4809

Re: Market timing....Mark Hulbert

So to succeed at market timing, you need the perfect, enormous, one-time, never-to-be-repeated killing? Market timing on a smaller scale would probably be more like arbitrage, with repeated cycles of transactions. More like slowing losing your stake at the casino. :) Or, more like slowly generating...
by dkturner
Mon Aug 11, 2014 1:38 pm
 
Forum: Investing - Theory, News & General
Topic: Market timing....Mark Hulbert
Replies: 7
Views: 1231

Re: Dilbert Creator: If everyone indexed...

In a world with only passive investors, there would be much less trading than there is now, but far from zero trading. Index funds generally have turnover of at least a few percent per year. However, at least for market-cap weighted index funds, that trading is not based on perceived value of that ...
by dkturner
Thu Aug 07, 2014 3:48 pm
 
Forum: Investing - Theory, News & General
Topic: Dilbert Creator: If everyone indexed...
Replies: 28
Views: 3243

Re: Reliability of stock data prior to 1939?

One major difference with the Russell data is that the standard deviation of the returns for both large and small "value" stocks is lower than the SD for both large and small "growth" stocks. The CRSP data for 1927-1978 shows the the opposite SD result. This is undoubtedly relat...
by dkturner
Mon Aug 04, 2014 10:20 am
 
Forum: Investing - Theory, News & General
Topic: Reliability of stock data prior to 1939?
Replies: 14
Views: 855

Re: Reliability of stock data prior to 1939?

I had always been suspicious of the old data as well. My concerns were related to documenting the existence of the various "premiums", such as the "value" premium and small-cap premium. I satisfied myself that the old data was reliable in documenting the existence of both of the...
by dkturner
Mon Aug 04, 2014 7:07 am
 
Forum: Investing - Theory, News & General
Topic: Reliability of stock data prior to 1939?
Replies: 14
Views: 855

Re: Reliability of stock data prior to 1939?

I had always been suspicious of the old data as well. My concerns were related to documenting the existence of the various "premiums", such as the "value" premium and small-cap premium. I satisfied myself that the old data was reliable in documenting the existence of both of thes...
by dkturner
Sun Aug 03, 2014 12:13 pm
 
Forum: Investing - Theory, News & General
Topic: Reliability of stock data prior to 1939?
Replies: 14
Views: 855

Re: Dividend Growth Investing vs Index Funds

In a nutshell: * An index investor wouldn't pick VIG, we'd pick VTI (total stock market etf) at 0.05% fees. That's $250 not $650. * I haven't poked around enough to figure out if this is all taxable, but if so he's paying double the dividend taxes each year. That's an extra $1750. This is massively...
by dkturner
Thu Jul 24, 2014 4:52 pm
 
Forum: Investing - Theory, News & General
Topic: Dividend Growth Investing vs Index Funds
Replies: 14
Views: 1238

Re: Adding Corporates to Total Bond Market Index

Yes, but you sacrifice considerable return by insisting on wearing both a belt and suspenders. Actually you don't. Buy removing corporates and increasing treasuries you can reduce your total bond allocation and increase your equity allocation while maintaining the same "risk" in your port...
by dkturner
Thu Jul 17, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6984

Re: Adding Corporates to Total Bond Market Index

Yes, but you sacrifice considerable return by insisting on wearing both a belt and suspenders. What's wrong with tilting to corporates then increasing exposure to Treasuries when spreads widen by _____ basis points (you fill in the blank)? p.s. It's ok to keep a helmet around the house for those oc...
by dkturner
Wed Jul 16, 2014 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6984

Re: Adding Corporates to Total Bond Market Index

The counter argument to this, and it is a pretty sound one, is that rather than tilting more towards corporates instead slightly increase your stock allocation if you need more "yield" - i.e. return. Recall especially how corporates, even highly rated ones, behave in a crisis. They tank. ...
by dkturner
Wed Jul 16, 2014 8:43 am
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6984

Re: Total Market Index Fund Portfolio.

I have 19 years of very accurate performance statistics for my, mostly, Vanguard portfolio. Using Excel formula XIRR it shows that I have outperformed a comparable portfolio of Vanguard Total Market funds (the "no brainer" portfolio) by an annualized 162 basis points for the 19 year perio...
by dkturner
Tue Jul 15, 2014 7:17 pm
 
Forum: Investing - Theory, News & General
Topic: Persistence of SV performance
Replies: 71
Views: 3915

Re: Persistence of SV performance

Question for the board... if 20 years from now the DFA small cap value fund has a 20 year annual return 3 or 4% lower than the S&P 500, what would that mean for the small cap value framework? Over the next 20 years TSM (or S&P 500) mathematically cannot do worse than the aggregate market......
by dkturner
Tue Jul 15, 2014 1:35 pm
 
Forum: Investing - Theory, News & General
Topic: Persistence of SV performance
Replies: 71
Views: 3915

Re: [Poll] How often do you re-balance?

My largest account is a rollover IRA which is currently 100% invested in the Vanguard Wellesley Income Fund, so the answer is either daily or never. There was no daily rebalancing option so I voted for less often than yearly.
by dkturner
Tue Jul 15, 2014 5:51 am
 
Forum: Investing - Theory, News & General
Topic: [Poll] How often do you re-balance?
Replies: 25
Views: 2237

Re: Imputed income (rent) Owner occupied houses.

What happens when you're an owner occupant but decide to rent out a spare bedroom for what would equate to slightly > than 5% of the capital value of the home? I imagine one could either (1) increase the value of the "imputed" rent, or (2) use the newly acquired cash rent to reduce occupa...
by dkturner
Mon Jul 14, 2014 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: Imputed income (rent) Owner occupied houses.
Replies: 21
Views: 2412

Re: Imputed income (rent) Owner occupied houses.

In coastal California, with insane land values, a landlord is lucky to get 1/2% per month in rent. In northern Illinois, due to the still depressed real estate market, a landlord can easily get 2% per month for a condo rental, although 25% of that could be eaten up by condo association fees. Ralph ...
by dkturner
Sat Jul 12, 2014 11:03 am
 
Forum: Investing - Theory, News & General
Topic: Imputed income (rent) Owner occupied houses.
Replies: 21
Views: 2412

Re: Imputed income (rent) Owner occupied houses.

Playing around with bogus "asset allocation" that ignores the largest asset is simply silly. The Boglehead mind functions best when dealing with stuff which has an exact known monetary value at any given time. We don't do housing or pension values very well. It is of course the classic di...
by dkturner
Sat Jul 12, 2014 10:10 am
 
Forum: Investing - Theory, News & General
Topic: Imputed income (rent) Owner occupied houses.
Replies: 21
Views: 2412

Re: Imputed income (rent) Owner occupied houses.

Professor Emeritus wrote:Playing around with bogus "asset allocation" that ignores the largest asset is simply silly.


The Boglehead mind functions best when dealing with stuff which has an exact known monetary value at any given time. We don't do housing or pension values very well.
by dkturner
Sat Jul 12, 2014 7:11 am
 
Forum: Investing - Theory, News & General
Topic: Imputed income (rent) Owner occupied houses.
Replies: 21
Views: 2412

Re: What gives with these low returns?

Active management is why, they got to greedy more than likely. But active management earned them index beating returns over the last 20 years. Even counting the last 5 years they are way ahead of where they would be had they followed an indexing strategy over the long term. I thought indexing was a...
by dkturner
Fri Jul 04, 2014 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: What gives with these low returns?
Replies: 17
Views: 1460

Re: Do Wellesley's Equities Outperform?

With regard to the Wellesley and Wellington funds, I'm still waiting for that time to arrive when their outstanding past performance ceases to predict their future results. While you're waiting are you going to take advantage of the W&W "premium" or invest in Vanguards lower returning...
by dkturner
Thu Jul 03, 2014 2:34 pm
 
Forum: Investing - Theory, News & General
Topic: Do Wellesley's Equities Outperform?
Replies: 41
Views: 4877

Re: Buffett chooses S&P 500

In Berkshire Hathaway's recent yearly letter, Mr. Buffett stated that if he died, he would leave instructions for his wife to invest 90% of their money in a S&P 500 index. Why would he choose a S&P 500 index over a total US stock market index? Based on the numerous financial blogs I read, m...
by dkturner
Thu Jun 19, 2014 11:21 am
 
Forum: Investing - Theory, News & General
Topic: Buffett chooses S&P 500
Replies: 16
Views: 2571

Re: Would any number make you change your asset allocation?

chaz wrote:I stay the course.


I prefer valuation driven capital redeployment
by dkturner
Sun Jun 15, 2014 11:56 am
 
Forum: Investing - Theory, News & General
Topic: Would any number make you change your asset allocation?
Replies: 58
Views: 3501

Re: "Is Bogle Befuddling?"

Mr. Bogle's issues with TBM aren't based on the differences between Treasury and agency debt, they are concerned with the lower yields of "government" debt vs investment grade corporate debt.
by dkturner
Sat Jun 14, 2014 8:46 pm
 
Forum: Investing - Theory, News & General
Topic: "Is Bogle Befuddling?"
Replies: 57
Views: 7165

Re: What happened if you had used CAPE to time the market?

chaz wrote:Bogleheads avoid market timing.


But they like to talk about it endlessly - sort of like clergymen and sin.
by dkturner
Thu Jun 12, 2014 9:55 am
 
Forum: Investing - Theory, News & General
Topic: What happened if you had used CAPE to time the market?
Replies: 20
Views: 1750

Re: "Is Bogle Befuddling?"

That's why I was asking if it makes sense to buy the corporate bond index instead of rebalancing to total bond index since the comments seemed to indicate that. Is that what Bogle was saying ? Mr. Bogle was addressing the unusually low yield of U.S. Government securities. Increasing portfolio yield...
by dkturner
Mon Jun 02, 2014 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: "Is Bogle Befuddling?"
Replies: 57
Views: 7165

Re: An astonishing record – of complete failure (FT Article)

An old joke about economics professors is that the questions on their exams never change - only the
answers do.
by dkturner
Sun Jun 01, 2014 10:48 am
 
Forum: Investing - Theory, News & General
Topic: An astonishing record – of complete failure (FT Article)
Replies: 7
Views: 2543

Re: Can we defend a 4% Safe Withdrawal Rate?

An appropriate SWR is largely dependent on the relative value of your portfolio on your actual retirement date. A realistic SWR for an individual who retired in October of 2007 would be much lower than a SWR for someone who retired in March of 2009. Prudence would dictate using a conservative assump...
by dkturner
Mon May 26, 2014 7:18 am
 
Forum: Investing - Theory, News & General
Topic: Can we defend a 4% Safe Withdrawal Rate?
Replies: 62
Views: 5528

Re: What exactly is risk-adjusted return?

Does anybody here know what method John Bogle uses to get a risk-adjusted return? He alluded to it in his lecture on Telltale Charts, but he didn't elaborate. I have heard him say something to the effect that: "one extra point of total return is priceless, one extra point of standard deviation...
by dkturner
Thu May 01, 2014 3:14 pm
 
Forum: Investing - Theory, News & General
Topic: What exactly is risk-adjusted return?
Replies: 71
Views: 2605

Re: Are Historical Returns Irrelevant?

pkcrafter wrote:As time goes on, say 20 years, you have index funds outperforming about 80% of active funds


I wonder what the percentage is for Vanguard active funds? Has anyone seen any statistics?
by dkturner
Thu May 01, 2014 11:07 am
 
Forum: Investing - Theory, News & General
Topic: Are Historical Returns Irrelevant?
Replies: 44
Views: 2928

Re: CORRECTION

virtually ALL of the major DFA equity funds have performed amazingly well since inception. In May, 2000, Morningstar's Research Director, John Rekenthaler, conducted an 18 year comparative study of DFA vs. Vanguard. He concluded: "Vanguard in a landslide." Why Investing Isn't Engineering ...
by dkturner
Wed Apr 30, 2014 4:36 pm
 
Forum: Investing - Theory, News & General
Topic: Fama/French Factors: "A Come-to-Buffet Moment" (from M*)
Replies: 74
Views: 4743

Re: Question about Wellington and Wellesley

Congrats! I did a quick check of the returns, unrebalanced, over the last 15 years and you win. I not going to hold it against you that 61% of your portfolio is actively managed (VFITX). 39% indexed is close enough. :beer If you want to believe that this portfolio beat Wellesley only because the bo...
by dkturner
Wed Apr 30, 2014 4:18 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Wellington and Wellesley
Replies: 55
Views: 42706

Re: Question about Wellington and Wellesley

Several days ago I posted a challenge, to the usual suspects, to come up with an index fund portfolio that would replicate Wellesley's risk adjusted performance over an extended period of time. We haven't had any takers - and I'm not holding my breath. :shock: I can't find your earlier challenge, b...
by dkturner
Wed Apr 30, 2014 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Wellington and Wellesley
Replies: 55
Views: 42706

Re: Question about Wellington and Wellesley

Several days ago I posted a challenge, to the usual suspects, to come up with an index fund portfolio that would replicate Wellesley's risk adjusted performance over an extended period of time. We haven't had any takers - and I'm not holding my breath. :shock: I can't find your earlier challenge, b...
by dkturner
Wed Apr 30, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Wellington and Wellesley
Replies: 55
Views: 42706

Re: Question about Wellington and Wellesley

  The managers have the ability to adjust the bonds and stocks enough to get through anything. This is the wrong reason to invest in active fund If fund meets your investment goals and style is a better reason.But managers come and go, along with there ability to overperform the market John Over th...
by dkturner
Wed Apr 30, 2014 1:59 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Wellington and Wellesley
Replies: 55
Views: 42706

Re: Question about Wellington and Wellesley

The Wellesley fund's return and low volatility have indeed been impressive. One question though: what do you mean when you refer to the "structure of the fund" driving performance? Are there certain investing rules that the managers must adhere to? And if so, couldn't those be replicated ...
by dkturner
Wed Apr 30, 2014 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Wellington and Wellesley
Replies: 55
Views: 42706

Re: CORRECTION

virtually ALL of the major DFA equity funds have performed amazingly well since inception. In May, 2000, Morningstar's Research Director, John Rekenthaler, conducted an 18 year comparative study of DFA vs. Vanguard. He concluded: "Vanguard in a landslide." Why Investing Isn't Engineering ...
by dkturner
Wed Apr 30, 2014 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Fama/French Factors: "A Come-to-Buffet Moment" (from M*)
Replies: 74
Views: 4743

Re: "A Come-to-Buffet Moment" (from M*)

However if you rerun your chart comparing VTSMX to the DFA Large Value fund you get a much more accurate indication of what is possible when one uses the power of a computer to properly construct a passively managed value fund. But the vast majority of the value permium exists only in small cap sto...
by dkturner
Tue Apr 29, 2014 7:35 pm
 
Forum: Investing - Theory, News & General
Topic: Fama/French Factors: "A Come-to-Buffet Moment" (from M*)
Replies: 74
Views: 4743

Re: "A Come-to-Buffet Moment" (from M*)

But now value bites the dust, too. Maybe that explains why there has been virtually no difference in total return between Vanguard Total Stock Market Index and Vanguard Value Index, eh? True, if one simplistically defines the value factor as VIVAX has - three separate times. However if you rerun yo...
by dkturner
Tue Apr 29, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Fama/French Factors: "A Come-to-Buffet Moment" (from M*)
Replies: 74
Views: 4743

Re: Question about Wellington and Wellesley

Take a look at the actual makeup of the W and W portfolios. Neither the equity portions nor the fixed income portions look like any of the available Vanguard index funds. In the equity holdings W and W hold some international stocks and these international holdings don't look like the holdings in an...
by dkturner
Mon Apr 28, 2014 7:37 am
 
Forum: Investing - Theory, News & General
Topic: Question about Wellington and Wellesley
Replies: 55
Views: 42706

Re: Poll: Would you EVER recommend 100% equity?

There are a number of situations where an investor can have a 100% allocation of his investments to equities without taking much more risk than a typical belt and suspenders Boglehead. There is a substantial population of "trust fund children" in this world who are beneficiaries of trust f...
by dkturner
Sun Apr 27, 2014 12:54 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Would you EVER recommend 100% equity?
Replies: 136
Views: 26900

Re: Joe Stiglitz - "most of finance does more harm than good

I have lived in a town with a population of about 17,000 for nearly 40 years. When I moved here there were 4 "financial advisors" (they used to be called stockbrokers) and the population was more than 20,000. Today there are at least 16 stockbrokers and at least a dozen insurance salesmen ...
by dkturner
Fri Apr 25, 2014 10:27 am
 
Forum: Investing - Theory, News & General
Topic: Joe Stiglitz - "most of finance does more harm than good"
Replies: 8
Views: 1090

Re: Japan Does not Show That Stocks are Dangerous

richard wrote:Projections are not always accurate.


That's why they have horse races - and securities markets.
by dkturner
Thu Apr 17, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: Japan Does not Show That Stocks are Dangerous
Replies: 79
Views: 5253

Re: Japan Does not Show That Stocks are Dangerous

What is the CAPE at which I should not buy stocks? I'm asking very precise questions - what are the numbers at which I should stop buying, sell and resume buying? Is your answer that I should stop buying (sell?) when bond yields (which bonds?) exceed 1/CAPE? A precise question about an imprecise si...
by dkturner
Wed Apr 16, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: Japan Does not Show That Stocks are Dangerous
Replies: 79
Views: 5253

Re: Japan Does not Show That Stocks are Dangerous

What is the CAPE at which I should not buy stocks? I'm asking very precise questions - what are the numbers at which I should stop buying, sell and resume buying? Is your answer that I should stop buying (sell?) when bond yields (which bonds?) exceed 1/CAPE? A precise question about an imprecise si...
by dkturner
Wed Apr 16, 2014 10:26 am
 
Forum: Investing - Theory, News & General
Topic: Japan Does not Show That Stocks are Dangerous
Replies: 79
Views: 5253

Re: Japan Does not Show That Stocks are Dangerous

Japan Does not Show That Stocks are Dangerous Yes, it does. Japan shows that a market crash can last long enough to convert shallow risk into deep risk. For those looking at Japan and coming up with reasons after the fact is kind of like how black swans are always reasoned out--after the fact. Is a...
by dkturner
Wed Apr 16, 2014 5:43 am
 
Forum: Investing - Theory, News & General
Topic: Japan Does not Show That Stocks are Dangerous
Replies: 79
Views: 5253

Re: Asness & Fama on Bloomberg TV NOW

That was awesome. Just as the debate heats up around here on SCV vs. total market approach we get to hear from the giants of both sides. I am firmly convinced that Jack's approach is the best. Buy the market at the lowest cost possible and hold it forever. Beat that! (1) Adopt a long time horizon. ...
by dkturner
Tue Apr 15, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: Asness & Fama on Bloomberg TV NOW
Replies: 23
Views: 1369

Re: Jack on Bloomberg Today...

On at 11:00 EDT
by dkturner
Tue Apr 15, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Jack on Bloomberg Today...
Replies: 12
Views: 1745
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