Bogleheads.org

http://www.invescopowershares.com/pdf/P-PSP-PC-1.pdf shows me a 2.7% expense ratio [for PSP]. Perhaps they are including the management fees of the underlying vehicles? That will probably cancel out any upside in investing in this asset class.. As the comparisons imply it really is a form of specia...

Interesting article Larry. Thanks. For anyone who wants to invest in private equity notwithstanding Larry's case against it, there is an ETF available called Powershares Global Listed Private Equity Portfolio, ticker PSP. Its annualized return of the 5 years ending 3/30/13 is -5.5% vs. +8.5% for the...

Beginning April 1, 2013, when a WellsTrade account is linked to a PMA Package, benefits will not include 100 commission-free online trades. The new benefits will be unlimited trades at a discounted commission rate of $6.95 per transaction for online and automated telephone trades for Stocks (exclud...

...1) US Reits (VNQ) 2) INTL Reits (VNQI) 3) Commodities (PCRIX) 4) High-Yield Bonds (HYG) 5) TIPS (VIPSX) 6) probably others as well Which one of the above alternative asset classes has the best "valuation metrics"?... Do you mean which of the above have valuation metrics that show it to...

If I had a view that the markets are like some kind of roller coaster I would envision myself in the lead car with the track behind me in view, but the track in front of my car was non-existent/not in view indicating that I know what has happened in the past, but have no foresight when it comes to ...

Vanguard says this about the current yield of its REIT index fund at https://personal.vanguard.com/us/FundsYieldDisclaimerREITFund?FundId=5123 : ...The current adjusted effective yield is 2.29% as of 01/31/2013. The adjusted yield reflects a reduction in the income included in the yield based on the...

Good question frugaldude. Suppose that: (1) Your mortgage interest is fully tax deductible. (2) 40% of your liquid assets (outside of your emergency fund) could pay off your mortgage. (3) Of your liquid assets (outside of your emergency fund), you have 60% in equities and 40% in bonds. (4) A 60/40 p...

Other companies will soon be offering ETFs as a share class of open-end funds. These master-feeder funds will not operate exactly the same as Vanguard ETFs and mutual funds, but the tax benefits to all share class holders will be the same. Fidelity is one of those companies that has filed for exemp...

^Thanks Kevin.

Also, one could learn a new skill that greatly increases the dollar value of your human capital. Similarly, Apple could greatly increase the dollar value of their company by creating another new, amazing product.

The concept of human capital is bogus, because you do not own your job. It's as simple as that. But each of us does own himself, his skills, his abilities, his work preferences, his work intentions, and his knowledge (except knowledge covered by a non-disclosure agreement). I think those are the es...

Thanks SSSS & hoops777 for the info on Pentagon Federal Credit Union's excellent CD rates. If one is not a current member of the armed forces or a US government employee or a relative of one, here are some of the organizations you can join which will then allow you to join PenFed: American Red C...

magician wrote:Sounds as though someone's been reviewing implementation shortfall in the Level III CFA curriculum.

I wish. Wow. Hang out on this board long enough, and you too can be mistaken for a Level III CFA candidate. (Magician, on the other hand, has, I think, already passed his Level III's.)

Hi grok87, Thanks for the interesting info. There are so many potential pitfalls to active management vs. index funds: higher management fees, cost of your own time, greater market impact costs, style drift, greater capital gains tax cost, less diversification, greater total cost from the spread bet...

As far as we know, no person has ever had a loss disallowed by the IRS for selling a mutual fund & purchasing a different mutual fund. If it happened to you, you would be the first, and you would get to be a very minor Internet celebrity, which would probably more than make up for the inconveni...

Setting aside the issue of the amount of government borrowing, right now quantitative easing is raising US Treasury bond, note, and bill prices and lowering yields. The Fed has been pushing on a string. It is struggling mightily to lower rates but it can't do much because rates are already near the...

You [i.e. the poster "riskreward"] should be very clear about this. When you are saying that you want less government borrowing at this time, you are saying that you want higher bond prices and lower bond yields . Are you sure this is what you want? Hi Jack, Setting aside the issue of the...

I love how the active guys love analogies ("straightjacket"), but never, ever, EVER want to talk about data. The data in favor of indexing is so overwhelming that those selling active services know the only thing to do is change the subject. Hi afan, Nor do they want to talk about this al...

Suppose over a lifetime a work someone pays off their mortgage and accumulates say 2 million in savings held in Vanguard Total Stock Market. This hypothetically includes over 1.5 million in unrealized gains. Can this person take out a big reverse mortgage on their property, live the rest of their l...

Vanguard Target Date Funds are "set it and forget it" funds until Vanguard changes its mind. In that sense, they are just a different version of a managed fund, where the manager (Vanguard) can change the allocation at any time. Not enough stocks, change the allocation. No tips, change th...

In addition to PIMCO's short term TIPS index ETF (STPZ) with a 0.20% expense ratio, there is now a Vanguard short term TIPS index ETF (VTIP http://finance.yahoo.com/q?s=vtip&ql=1 ) with a 0.10% expense ratio, and a Vanguard short term TIPS index mutual fund (VTIPX) with a 0.20% expense ratio. He...

magician wrote:I believe that neither YDNAL nor I said that calculating net worth was sufficient to quantify risk.

Hi magician, I agree, and I don't believe I said or implied otherwise. I apologize if it came across that way. Best, Neil

http://www.cnbc.com/id/100435607 I read this and wondered what the folks around here think about it. Bank of America's analyst is predicting a severe and disorderly collapse of the investment grade bond market. I'm not sure whether it even passes the common sense test, since most people invest in b...

"Liabilities are managed as if they were negative assets," means nothing other than Assets - Liabilities = Net Worth. Exactly. Hi magician and YDNAL, Not so fast. Take this example of a guy named Nguyen with: (A) 70% higher risk assets, 60% lower risk assets, and -30% allocation to debt, ...

4. You no longer need 'age in bonds' or some equivalent if you are factoring in human capital. The reason for age in bonds is because of human capital. So if you factor in human capital your portfolio already has a ramp of sorts built in. That's a good and interesting point MrMatt. If human capital...

2. Regardless of how a house should be treated, I wouldn't include it anyways as I don't expect to get any future cashflow out of it (at least my personal house that I live in). Hi MrMatt, If the mortgage is included as a negative bond or negative low risk asset, I think the house needs to be inclu...

If you are going to do things like include a mortgage as part of your portfolio you should also include all assets and liabilities. Just as you would not include your home's value as an asset without offsetting with debts incurred. +1 Would you claim it is more useful to view your portfolio as opti...

revised and posted below

Hi Investor2, Another inflation hedge is of course a home of one's own. 42% of the CPI (Consumer Price Index) is housing (predominately rent and "owner's equivalent rent") (source: http://www.nytimes.com/interactive/2008/05/03/business/20080403_SPENDING_GRAPHIC.html ). Also, changes in the...

Where are these magical funds that lose less in bear markets? That's always the claim, but not a shred of evidence can be found to support such nonsense. Hi Karl, The Powershares S&P 500 Low Volatility ETF ( SPLV ) is designed to do that, and in it's short 1 1/2 year history, it seems to have h...

The idea of a (fixed rate) mortgage as a negative bond seems simple enough to me. But more importantly, it captures a key fact: if you have a mortgage and interest rates go way up, the value of that mortgage to you will go way up because your payments will not increase, yet you can make your paymen...

And unlike a bond you can't easily rebalance in and out [of a mortgage]. To me it just seems to needlessly complicate things with no real benefit from doing so [i.e. viewing a fixed rate mortgage as a negative bond]. Hi Rodc, If you have the cash for a partial prepayment of a mortgage, it's easy to...

Neil: Bonds are primarily for safety . Stocks are primarily for higher return. Hi Taylor, That reminds me that if the total bond index were to return -6 to -10% nominally (and -8 to -11% real) over 12 months, the damage to the stock market would probably be much worse. So, your point about safety h...

Listed below are the historical U.S. inflation rates (CPI-U) and total returns for the Aggregate Bond Index since its inception: YEAR -- INFLATION -- BOND INDEX 1976-------4.9%--------15.6% 1977-------6.7-----------3.0 1978-------9.0-----------1.4 1979------13.3-----------1.9 1980------12.5--------...

And the tilt to small and value isn't just about increased returns. It's also about increased portfolio efficiency. Small and value are weakly correlated with the market (more true for value) and weakly correlated with each other. Diversifying across risk factors is probably much more meaningful th...

Hi all, I just looked at the "Average Effective Maturity"on Morningstar's Portfolio Summary page for Vanguard's GNMA fund, VFIIX , and Payden's, PYGNX . The numbers were 4.50 years and 6.35 years respectively. But then I looked at the "Bond Maturity Breakdown" at the bottom of th...

http://www.dimensional.com/famafrench/2009/11/luck-versus-skill-in-mutual-fund-performance-1.html Take a look at the third paragraph which reads, in part ".....if we add back each fund's expense ratio - the a (alpha) estimate for the aggregate fund portfolio rises to 0.13% per year, which is o...

Here's a link to a paper, written by Eugene Fama and Kenneth French, which demonstrates that, as a group, professional investment managers do exhibit skill - BEFORE fees and expenses. The implication should be that very low cost actively managed funds have a much greater probability of producing su...

The abstract of "Who Gains from Trade?: Evidence from Taiwan" ..."After costs, we estimate that the trading of institutional investors adds one percentage point annually to their portfolio performance, while the trading of individuals subtracts over three percentage points annually f...

It is ludicrous for an amateur to imagine they can beat a full-time professional fund manager--and most professional's underperform a simple index fund. Hi Taylor, I haven't seen any evidence that the average full-time professional beats the average part-time non-professional. Actually the fact tha...

So - wonder if there are any REIT types that specifically target farmland, just like some REITs go after residential, commercial, malls, etc - Hi ps56k, The closest I've found to that is Cresud in Argentina, which sells on the NASDAQ with the ticker CRESY. http://finance.yahoo.com/q/ks?s=CRESY+Key+...

Hi grap, I definitely look at those other valuation measures too, though I prefer price to tangible book value rather than price to book. Also, I prefer price to cash flow over P/E, since P/CF is harder to manipulate. EV/EBITDA is also a good measure and is hard to manipulate. Enterprise value to re...

With 10% of SCV stocks driving most of the return of the asset class you are going to have a lot of variance in your returns holding only 20 stocks. You could easily have 4 whopper stocks or 0. What was your 2012 return with these 20 stocks? Just buy this instead and save yourself some time: http:/...

Update to this thread. I found a website that now shows PE10 for individual stocks: http://www.gurufocus.com/ . Registration is necessary but free (I have no connection to gurufocus.com except as a user). Just enter the ticker symbol in the box on the top left, then look for the number next to "...

papito23 wrote:*The Sharpe ratio suggests Iowa farmland has done better than the S&P given the same amount of risk.

It is possible to buy an S&P 500 index fund, but it is not possible to buy an Iowa farmland index fund (or a US farmland index fund).

Underdog Superman Fund

Our motto comes from Horace: "Many shall be restored that now are fallen, and many shall fall that are now in favor."

Long
APOL Apollo Group Inc.
COCO Corinthian Colleges Inc

Short
FB Facebook
LNKD LinkedIn Corp.

I guess you don't know how the US pays its debts. They change numbers on a spreadsheet. The government has a warehouse full of numbers. There is no government balance sheet, but if there was, you would have to add up all the value of its land, water rights, and mineral reserves. I am sure it would ...

I would not recommend putting the majority of one's reserves in US treasury bills... Why not in T-bills? I wouldn't put the majority of my reserves in US treasury obligations (broadly speaking), partly because I believe in diversifying my credit risks within my reserve portfolio. Another reason is ...

I just read a short piece by Rob Arnott, entitled "Death of the Dollar". http://advisorperspectives.com/commentaries/research_121412.php The endgame is coming. It doesn’t matter who is in the White House or which party controls Congress; when the markets lose confidence in our currency, i...

Buying or renting a home is considered covering the short of needing shelter. Buying, "yes"; renting "no." If you're renting, and rents go up, you absorb that extra cost. The cost of renting can go in a different direction than the cost of buying, as we have seen since 2007. If ...

It would seem to me that the retiree who is "fit as a fiddle" once she reaches age 81 and has lots of TIPS should consider annuitizing at that age or cutting back spending. You don't want to set in stone at retirement a plan that is light on longevity risk. Should you experience longevity...