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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? Good question :) I believe Mr. Bogle pitches his interview comments strictly to Americans. I can't imagine what he would say if a Brit were to approach him and say "I'm confused, are you...
by dkturner
Wed Jan 28, 2015 1:40 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Bogle on CNBC today--International and Bonds
Replies: 42
Views: 4468

Re: Mr. Bogle's current bond investing advice--what is it?

As long as your bond portfolio is short or intermediate in term, includes a mix of treasuries and investment grade corporates, and is low cost, I doubt Mr. Bogle would find much fault in your choice. The question of munis IMO depends almost entirely on your tax situation. True, but some of the Usua...
by dkturner
Mon Jan 26, 2015 5:02 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Bogle's current bond investing advice--what is it?
Replies: 22
Views: 3378

Re: Total Bond: 23 years of SEC yield and distribution yield

- As others have mentioned, the fact that SEC yield is greater/less than the distribution yield is probably explained by relative amount of discounted/premium bonds in the fund. That makes sense to me. Since bond mutual fund amortize premiums and accrete discounts why would the "relative amoun...
by dkturner
Mon Jan 26, 2015 4:27 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond: 23 years of SEC yield and distribution yield
Replies: 30
Views: 2845

Re: Initial SEC yield and subsequent 5yr and 10yr returns

As an aside I think it is better for retirees to consider their income coming from total return and not just dividends & interest but that is getting too far off subject. I'm an old fashioned person and take the other side on the issue of income vs. total return. During trying times dividend in...
by dkturner
Sun Jan 25, 2015 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 125
Views: 6086

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Correct me if I'm wrong, but premiums on bonds are amortized over the remaining life of the bonds held by a mutual fund aren't they? If that's the case how does the amortized yield result in a higher distribution yield than for a par bond? Doesn't the process of amortizing a premium put the distrib...
by dkturner
Sun Jan 25, 2015 8:13 am
 
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 125
Views: 6086

Re: Initial SEC yield and subsequent 5yr and 10yr returns

SEC yield is based on yield to maturity and YTM calculations assume that all coupon payments are reinvested at the same rate as the current yield Take a look at this link. http://en.wikipedia.org/wiki/Yield_to_maturity "All the coupons are reinvested at an interest rate equal to the yield-to-m...
by dkturner
Sat Jan 24, 2015 7:11 am
 
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 125
Views: 6086

Re: Why are people buying 10 year Bunds?

baw703916 wrote:Treasuries carry currency risk for people in Eurozone countries.


Can't Germans hedge their currency exposure?
by dkturner
Thu Jan 22, 2015 2:59 pm
 
Forum: Investing - Theory, News & General
Topic: Why are people buying 10 year Bunds?
Replies: 14
Views: 1388

Re: "When you've won the game, stop playing"

Thanks, Bill. Actually I wonder if the most worrisome point about 2008 is the miss-perception that market crashes recover quickly and do no harm especially if one simply rebalances into them. There is a lot or rhetoric out there about how wonderful it is to "buy stocks cheap." But then, I...
by dkturner
Wed Jan 21, 2015 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: "When you've won the game, stop playing"
Replies: 83
Views: 8346

Re: The DOW: An Index I Love to Hate

While The Dow Jones Industrial Average (DJIA) has long been the most cited and widely recognized US stock market index. The first reaction I feel whenever I hear it mentioned is: “What a bunch of rubes !” No serious investor follows The DOW. I am proud to report that I couldn’t tell you within 1000...
by dkturner
Mon Jan 19, 2015 2:55 pm
 
Forum: Investing - Theory, News & General
Topic: The DOW: An Index I Love to Hate
Replies: 27
Views: 1938

Re: The DOW: An Index I Love to Hate

Why do the media report point changes rather than percentage changes? It's my understanding that market research has convinced most of the media that their customers prefer reading/hearing about the point change rather than the percentage change. As an aside I was talking with an institutional inve...
by dkturner
Mon Jan 19, 2015 12:19 pm
 
Forum: Investing - Theory, News & General
Topic: The DOW: An Index I Love to Hate
Replies: 27
Views: 1938

Re: The DOW: An Index I Love to Hate

While The Dow Jones Industrial Average (DJIA) has long been the most cited and widely recognized US stock market index. The first reaction I feel whenever I hear it mentioned is: “What a bunch of rubes !” No serious investor follows The DOW. I am proud to report that I couldn’t tell you within 1000...
by dkturner
Mon Jan 19, 2015 11:38 am
 
Forum: Investing - Theory, News & General
Topic: The DOW: An Index I Love to Hate
Replies: 27
Views: 1938

Re: Tilting to Corp. Bonds

In June of 2007 the spread between 5 year Treasuries and Baa corporates was only 167 basis points. ... The corporate yield was 33% higher than the treasury yield. Nothing to get excited about. I submit that if you view yield differences in percentages, as opposed to basis points or percentage point...
by dkturner
Sun Jan 18, 2015 9:23 am
 
Forum: Investing - Theory, News & General
Topic: Tilting to Corp. Bonds
Replies: 36
Views: 2931

Re: Initial SEC yield and subsequent 5yr and 10yr returns

dkturner: You are misinformed. SEC yield is a very accurate predictor of subsequent 10 year return. I believe that "current" yield is generally considered to be an accurate predictor of future total returns. "SEC" yield often differs wildly from "current" yield. Just f...
by dkturner
Sun Jan 18, 2015 8:19 am
 
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 125
Views: 6086

Re: Short term bonds in rising interest rates?

Even if the Fed begins the process of raising interest rates in 2015 what will be the impact on short-term bonds versus intermediate-term bonds? What happened with short versus intermediate bonds the last time (2003-2006) the Fed raised interest rates substantially? You should probably compare the ...
by dkturner
Sun Jan 18, 2015 7:52 am
 
Forum: Investing - Theory, News & General
Topic: Short term bonds in rising interest rates?
Replies: 26
Views: 2580

Re: Initial SEC yield and subsequent 5yr and 10yr returns

There have been many posts related to this topic, but I wanted to start a thread to show actual results for various Vanguard bond funds. In this first post is a chart of initial SEC yields and subsequent 5yr and 10yr returns for Vanguard California Intermediate-Term Tax-Exempt bond fund (one of the...
by dkturner
Sun Jan 18, 2015 7:37 am
 
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 125
Views: 6086

Re: Malkiel's recommendations, 1990 to 2015

Interestingly, now that I think about it, Malkiel's recommendation for 10% cash has remained rock-steady (despite large changes in the return from cash!) Yes, but in 2015 he includes short-term bonds as "cash". In 1990 he defined cash as money market funds. Looking at the Vanguard Total B...
by dkturner
Sun Jan 18, 2015 7:09 am
 
Forum: Investing - Theory, News & General
Topic: Malkiel's recommendations, 1990 to 2015
Replies: 40
Views: 3828

Re: Malkiel's recommendations, 1990 to 2015

Isn't it possible that Malkiel took a look around, made some assumptions about future needs and returns, and changed his mind about what, in his opinion, would be now be the best AA for a new retiree? Last time I checked the world is a lot different now than it was in 1990. We now think we know a lo...
by dkturner
Sat Jan 17, 2015 3:37 pm
 
Forum: Investing - Theory, News & General
Topic: Malkiel's recommendations, 1990 to 2015
Replies: 40
Views: 3828

Re: Tilting to Corp. Bonds

Does anyone think that Fed participation in the Treasury market may have been distorting the relationship between the relative yields of Treasury and investment grade corporate bonds? The credit spread doesn't look like it correlates with the Fed action as such except in the early part of the actio...
by dkturner
Sat Jan 17, 2015 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: Tilting to Corp. Bonds
Replies: 36
Views: 2931

Re: Tilting to Corp. Bonds

Does anyone have any thoughts about the unusual situation we have been in since 2009 with respect to the Federal Reserve Board's participation in the market for Treasury securities? Does anyone think that Fed participation in the Treasury market may have been distorting the relationship between the...
by dkturner
Sat Jan 17, 2015 10:23 am
 
Forum: Investing - Theory, News & General
Topic: Tilting to Corp. Bonds
Replies: 36
Views: 2931

Re: Tilting to Corp. Bonds

Does anyone have any thoughts about the unusual situation we have been in since 2009 with respect to the Federal Reserve Board's participation in the market for Treasury securities? Does anyone think that Fed participation in the Treasury market may have been distorting the relationship between the ...
by dkturner
Sat Jan 17, 2015 8:47 am
 
Forum: Investing - Theory, News & General
Topic: Tilting to Corp. Bonds
Replies: 36
Views: 2931

Re: Burton Malkiel interview

Relatively Safe? Exxon,Johnson&Johnson,Wal-Mart,Mcdonalds,Dominion Resources,Proctor Gamble,Coca-Cola :happy He's talking about the dividend return. I believe he is cognizant of the fact that equity prices are likely to be more volatile than bond prices. So, in order to make dividend substituti...
by dkturner
Thu Jan 15, 2015 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: Burton Malkiel interview
Replies: 12
Views: 1095

Re: Burton Malkiel interview

Toons wrote:Relatively Safe?

Exxon,Johnson&Johnson,Wal-Mart,Mcdonalds,Dominion Resources,Proctor Gamble,Coca-Cola :happy


He's talking about the dividend return. I believe he is cognizant of the fact that equity prices are likely to be more volatile than bond prices.
by dkturner
Thu Jan 15, 2015 11:19 am
 
Forum: Investing - Theory, News & General
Topic: Burton Malkiel interview
Replies: 12
Views: 1095

Re: Short term bonds in rising interest rates?

Even if the Fed begins the process of raising interest rates in 2015 what will be the impact on short-term bonds versus intermediate-term bonds? What happened with short versus intermediate bonds the last time (2003-2006) the Fed raised interest rates substantially? You should probably compare the ...
by dkturner
Wed Jan 14, 2015 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: Short term bonds in rising interest rates?
Replies: 26
Views: 2580

Re: Short term bonds in rising interest rates?

I was reading an article that quoted William Bernstein on the topic of bonds. His position is to invest in short term high grade bond funds exclusively. One point in the article talked about the risk of rising interest rates as it relates to bonds and that the shorter duration of the bond fund, the...
by dkturner
Wed Jan 14, 2015 2:14 pm
 
Forum: Investing - Theory, News & General
Topic: Short term bonds in rising interest rates?
Replies: 26
Views: 2580

Re: Where do you tilt your Total Int'l Fund?

dkturner wrote: About 1/3 of my international equity exposure is through the Vanguard Wellesley Income Fund, so I have a tilt towards large-cap European equities in my portfolio. I don't get this. Wellesley's portfolio is 38% stocks, and of the 60 or so stocks it holds, perhaps 12-14 are foreign co...
by dkturner
Tue Jan 13, 2015 7:28 am
 
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 3219

Re: Where do you tilt your Total Int'l Fund?

Isn't this forum called the Bogleheads? John Bogle feels investing in international funds isn't needed and isn't worth the currency risk: http://www.bloomberg.com/news/2014-12-08/jack-bogle-i-wouldn-t-risk-investing-outside-the-u-s-.html http://www.morningstar.com/cover/videocenter.aspx?id=355647 B...
by dkturner
Mon Jan 12, 2015 11:50 am
 
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 3219

Re: Where do you tilt your Total Int'l Fund?

About 1/3 of my international equity exposure is through the Vanguard Wellesley Income Fund, so I have a tilt towards large-cap European equities in my portfolio.
by dkturner
Sun Jan 11, 2015 9:01 am
 
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 3219

Re: At Vanguard Active beats Passive

Vanguard's mutual funds have not always had appropriate benchmarks, so I would treat this self-serving study with a grain of salt. Picking indices for comparison, or tracking, hasn't been one of Vanguard's skill sets. I believe the outside fund managers (most of Vanguard's most successful ones are)...
by dkturner
Fri Jan 09, 2015 2:54 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's stockpickers outperform.... [news article]
Replies: 61
Views: 3595

Re: At Vanguard Active beats Passive

I think the author just called us fanatics. "Yet the performance of portfolio managers running Vanguard funds suggests that stock picking is not a fool's errand, as some of Bogle's most devoted fanatics, known as Bogleheads, make it out to be." I wonder where he got an idea like that? I a...
by dkturner
Fri Jan 09, 2015 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's stockpickers outperform.... [news article]
Replies: 61
Views: 3595

Re: Rick Ferri looking to internationalize his portfolio

And then there's this: LONDON (MarketWatch) — The euro fell to its lowest level against the dollar since 2005 on Thursday, extending more than a week of declines, after the European Union Commission’s report on eurozone economic sentiment showed no change from November’s tepid reading. Currency ris...
by dkturner
Thu Jan 08, 2015 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25909

Re: Rick Ferri looking to internationalize his portfolio

And then there's this: LONDON (MarketWatch) — The euro fell to its lowest level against the dollar since 2005 on Thursday, extending more than a week of declines, after the European Union Commission’s report on eurozone economic sentiment showed no change from November’s tepid reading. Currency ris...
by dkturner
Thu Jan 08, 2015 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25909

Re: Do you check you get all your dividends?

In the 1990s I would sometimes have incorrect foreign tax reporting. It helped to use a big broker so that someone else would complain, and my account would eventually be corrected too. I've seen no sign that anyone other than me has noticed a problem. I find that a bit odd. I am with a fairly larg...
by dkturner
Thu Jan 08, 2015 10:34 am
 
Forum: Investing - Theory, News & General
Topic: Do you check you get all your dividends?
Replies: 20
Views: 2397

Re: Is "stay the course" a commandment or a suggestion?

Rick also states: "Now I’m planning a move toward a neutral global mix. I believe the opportunities outsid the U.S. ..." does not strike me as market timing or anything other than having his portfolio reflect market capitalization rates which some BHs feel is the only weight of internatio...
by dkturner
Wed Jan 07, 2015 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4085

Re: Is "stay the course" a commandment or a suggestion?

I would put "stay the course" closer to a commandment then not. Once you decide on an asset allocation you should NOT be changing it unless something changes in YOUR (the investors) willingness, ability, or need to take risk. That means the only reasons NOT to stay the course is if someth...
by dkturner
Wed Jan 07, 2015 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4085

Re: Vanguard announces new Tax-Exempt Index Bond Fund

I think this is a case where there's a good reason to favor the ETF shares (at least until the purchase fee goes away). -Same 0.12% ER as Admiral shares--with no minimum. -No purchase fee as with Investor/Admiral shares. -No commissions if purchased through one's Vanguard account. Yes, but beware t...
by dkturner
Tue Jan 06, 2015 4:11 pm
 
Forum: Investing - Theory, News & General
Topic: New Vanguard AMT-free National Municipal Bond Fund
Replies: 58
Views: 5037

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

Vanguard FTSE All world ex US in my taxable account with the quarterly dividends from my Total Stock Market Index Fund. Positioning my portfolio for the prospect that a Grexit from the Euro will ignite a conflagration overseas. Read that Rick Ferri is planning on the same thing, but in Grand Style.
by dkturner
Tue Jan 06, 2015 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: Let's Celebrate! Which funds are you buying in 2015?
Replies: 48
Views: 3593

Re: Vanguard's best fund: Healthcare?

Vanguard's best fund: Healthcare? No. The OP mentioned that the Vanguard Healthcare Fund was the best performing of the 15 investment choices in his 401(k) plan over the last 3, 5 and 10 years. I think he was curious as to whether it has been the best performing of all of the Vanguard mutual funds ...
by dkturner
Tue Jan 06, 2015 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's best fund: Healthcare?
Replies: 60
Views: 7024

Re: Is "stay the course" a commandment or a suggestion?

I would say that it means: Create an asset allocation that includes bonds to reduce the volatility caused by the stock part of your portfolio, then rebalance when needed. This balanced approach will help you to stay the course. Once you set up a Boglehead portfolio, the only real course correction ...
by dkturner
Tue Jan 06, 2015 10:11 am
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4085

Re: Is "stay the course" a commandment or a suggestion?

Fallible wrote:
englishgirl wrote:the brothers??? :shock:


+1 and joining you in :shock:


I was just curious about how many female posters frequent this forum. :wink:
by dkturner
Mon Jan 05, 2015 5:09 pm
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4085

Re: Vanguard sets record funds inflow, has $3.1 trillion ass

My 457 plan offers Vanguard funds but I've avoided them because they are larded up with extra fees that make them more expensive than some other index funds available to us. The real revolution in retirement investing will come when investors can break free of employer plans and have their deductio...
by dkturner
Mon Jan 05, 2015 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard sets record funds inflow, has $3.1 trillion assets
Replies: 39
Views: 2846

Re: Is "stay the course" a commandment or a suggestion?

I would say that it means: Create an asset allocation that includes bonds to reduce the volatility caused by the stock part of your portfolio, then rebalance when needed. This balanced approach will help you to stay the course. Once you set up a Boglehead portfolio, the only real course correction ...
by dkturner
Mon Jan 05, 2015 3:27 pm
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4085

Is "stay the course" a commandment or a suggestion?

Just curious about how the brothers interpret Jack Bogle's oft quoted phrase, "stay the course" :?:
by dkturner
Mon Jan 05, 2015 1:49 pm
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4085

Re: Hussman finally admits the obvious

John Hussman, a smart and knowledgeable guy who has been relentlessly advising that markets are overvalued and precarious, finally admits in his current newsletter that you have to be right about two things to actually profit from correct predictions: direction and timing. I submit that timing is m...
by dkturner
Mon Jan 05, 2015 12:10 pm
 
Forum: Investing - Theory, News & General
Topic: Hussman finally admits the obvious
Replies: 16
Views: 2411

Re: Why not just follow John Bogle

stemikger wrote: it's thinking too much that gets me in trouble.


Interesting comment. For most people it's the other way around.
by dkturner
Sun Jan 04, 2015 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: Why not just follow John Bogle
Replies: 78
Views: 5912

Re: "The Global Portfolio" -- Vanguard Research

Sorry, my earlier post was comparing global ex-US to US, but upon rereading the OP I see Vanguard's outlook pertains to global including US. But I have the same reaction. Investors who reduced their equity exposure in 2006 because Vanguard had a guarded outlook would have suffered as a result. The ...
by dkturner
Sun Jan 04, 2015 12:26 pm
 
Forum: Investing - Theory, News & General
Topic: "The Global Portfolio" -- Vanguard Research
Replies: 14
Views: 1115

Re: Why not just follow John Bogle

I often scratch my head in dismay when reading so many here follow advice from other respected professionals who seem to have more complicated and inferior advice from John Bogle. I admit I don't know much about Paul Merriman or David Swensen but when I see people talking about their suggestions th...
by dkturner
Sat Jan 03, 2015 5:50 pm
 
Forum: Investing - Theory, News & General
Topic: Why not just follow John Bogle
Replies: 78
Views: 5912

Re: "Most important piece of investment wisdom."

I guess if you accept the idea that you can't possibly know anything about future market movements there really isn't anything to do, so why not spend your free time reminding us sinners of the errors of our ways. :wink: Bogleheads: This is what Mr. Bogle wrote in Common Sense on Mutual Funds : Sta...
by dkturner
Fri Jan 02, 2015 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25909

Re: Rick Ferri looking to internationalize his portfolio

After reading these posts I conclude that many forum members are market timers/traders with rationalizing justifications albeit with sensitivity to costs and maybe tracking error.I think it would be useful to own up to this and admit that we do peek a lot and market time more than required by rebal...
by dkturner
Fri Jan 02, 2015 1:17 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25909

Re: [Annual POLL] What was your 2014 return?

2014 return was 8.28% using Excel formula XIRR. Vanguard's Target 2015 Fund has almost exactly the same equity/fixed income breakdown that I do (51.8% equity for me, 51.3% for TR2015). TR2015 returned 6.56% in 2014. :D Edit: I have all of my marketable investments in accounts at Vanguard. Their webs...
by dkturner
Thu Jan 01, 2015 11:21 am
 
Forum: Investing - Theory, News & General
Topic: [Annual POLL] What was your 2014 return?
Replies: 144
Views: 14096

Re: Paul Merriman takes John Bogles $5.00 Bet!

Deviating from the total market by concentrating a portfolio in parts of the market (small, value, momentum, etc.) could deliver better or worse returns than the market. The fundamental reality remains that, as a group, all investors are indexers. The overall market cannot beat itself! So if one be...
by dkturner
Thu Jan 01, 2015 11:04 am
 
Forum: Investing - Theory, News & General
Topic: Paul Merriman takes John Bogles $5.00 Bet!
Replies: 61
Views: 7512
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