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by garlandwhizzer
Fri May 22, 2015 10:34 pm
Forum: Investing - Theory, News & General
Topic: Why not overweight international?
Replies: 31
Views: 2139

Re: Why not overweight international?

As you can tell not all US investors are in favor of international investing. Bogle and JoMoney on this forum are among those who see no reason to invest internationally. They give rational reasons for this choice. On the other hand Vanguard's research paper on this issue suggests somewhere between ...
by garlandwhizzer
Fri May 22, 2015 12:56 pm
Forum: Investing - Theory, News & General
Topic: Emerging market bond funds
Replies: 8
Views: 629

Re: Emerging market bond funds

The good thing about EM bonds is their higher yields in a yield free developed market world. The bad thing is that in a severe market downturn they often do not perform the most basic function of bonds in the first place: stability of principal when stocks are collapsing and economies are contractin...
by garlandwhizzer
Thu May 21, 2015 12:41 pm
Forum: Investing - Theory, News & General
Topic: Silver lining for bond fund NAV declines?
Replies: 33
Views: 2722

Re: Silver lining for bond fund NAV declines?

nobsinvestor wrote: Don't you guys think that in this "aggressive" Fed age, not to mention pressure from Wall Street/Corporate America, the Fed would be quick to slash/raise interest rates [thereby boosting bond prices] if we faced continuous high inflation or high deflation? In order to p...
by garlandwhizzer
Thu May 21, 2015 12:14 pm
Forum: Investing - Theory, News & General
Topic: Obtaining Exposure to Quality / Profitability Factor
Replies: 44
Views: 1897

Re: Obtaining Exposure to Quality / Profitability Factor

nisi wrote: I think it is really hard to take the current "factor zoo" seriously. My personal interpretation is that all of the research on factors--including the original discovery of the "small-company effect" in 1981 and the Fama-French "value factor" in 1992--has o...
by garlandwhizzer
Thu May 21, 2015 12:10 pm
Forum: Investing - Theory, News & General
Topic: AQR's Cliff Asness: Guest appearance on WealthTrack
Replies: 36
Views: 2728

Re: AQR's Cliff Asness: Guest appearance on WealthTrack

This is a good interview and I respect Mr. Asness's intelligence, knowledge, and honesty. He isn't just a salesman pushing his products--how refreshing--but rather an astute student of the market who admits to the limitations of his or anyone else's predicting the market's future. I also agree with ...
by garlandwhizzer
Wed May 20, 2015 6:19 pm
Forum: Investing - Theory, News & General
Topic: Obtaining Exposure to Quality / Profitability Factor
Replies: 44
Views: 1897

Re: Obtaining Exposure to Quality / Profitability Factor

ketawa wrote: No. For example, QSMLX has had a 1.05 loading on the market factor It is however interesting that over the life of the fund, QSMLX, it has not outperformed VB, Vanguard's plain old vanilla small cap fund which plays in the same small cap space and is a market weight fund. Presumably V...
by garlandwhizzer
Wed May 20, 2015 12:33 pm
Forum: Investing - Theory, News & General
Topic: Silver lining for bond fund NAV declines?
Replies: 33
Views: 2722

Re: Silver lining for bond fund NAV declines?

If you hold onto your bond fund long enough increased yields will eventually catch up with decreased principal value while rates are rising. That however is in nominal dollars. If inflation intervenes, those nominal dollars may lose purchasing power over very long time frames. In real inflation adju...
by garlandwhizzer
Wed May 20, 2015 12:14 pm
Forum: Investing - Theory, News & General
Topic: What's so great about simplicity?
Replies: 114
Views: 7799

Re: What's so great about simplicity?

tadamsmar wrote: I think the great thing is understanding that complexity in one's asset allocation is not warranted. It typically grows out of overfitting the data, or overlooking the uncertainties. 1+ Very well said. My own experience is that early along in my investing career I was confident tha...
by garlandwhizzer
Mon May 18, 2015 1:14 pm
Forum: Investing - Theory, News & General
Topic: Best Asset Allocation if you've "won the game"
Replies: 86
Views: 8379

Re: Best Asset Allocation if you've "won the game"

I don't believe that one size fits all in asset allocation if you've won the game. Having won the game, you have the freedom to choose an allocation in line with your goals such as leaving money to relatives, charities, etc., your risk tolerance, your lifestyle financial needs, and of course whether...
by garlandwhizzer
Fri May 08, 2015 10:57 am
Forum: Investing - Theory, News & General
Topic: "4 Advisor Moves That Shouldn't Be Legal"
Replies: 6
Views: 1421

Re: "4 Advisor Moves That Shouldn't Be Legal"

Excellent post. Thanks, Taylor.

Garland Whizzer
by garlandwhizzer
Fri May 08, 2015 10:52 am
Forum: Investing - Theory, News & General
Topic: If you worry about a correction, you shouldn't own stocks
Replies: 50
Views: 5596

Re: If you worry about a correction, you shouldn't own stocks

I never get tired of listening to Warren Buffett. His folksy humor, depth of knowledge about investing, and long term point of view is so refreshing amidst the financial industry's circus barkers who change their tune every time the wind blows from another direction. He and Bogle are two that are al...
by garlandwhizzer
Wed May 06, 2015 12:48 pm
Forum: Investing - Theory, News & General
Topic: Vanguard: The Problem of World Domination?
Replies: 21
Views: 2755

Re: Vanguard: The Problem of World Domination?

There are realistic concerns regarding financial markets. Vanguard world domination is is not one of them, never has been and very likely never will be.

Garland Whizzer
by garlandwhizzer
Wed May 06, 2015 12:31 pm
Forum: Investing - Theory, News & General
Topic: Gross: stockbug alert, future investment returns will be miniscule
Replies: 67
Views: 5528

Re: Gross: stockbug alert, future investment returns will be miniscule

Many seem to be fearing equity risk due to ominously high Shiller PE 10 numbers and generous PE1 numbers. On the other hand as Buffett points out, the equity risk premium is one of the few readings that are at historical levels. If you sell your stocks to avoid a possible bear market where do you pu...
by garlandwhizzer
Mon May 04, 2015 1:02 pm
Forum: Investing - Theory, News & General
Topic: Best Time of Year to Rebalance Portfolio?
Replies: 54
Views: 4028

Re: Best Time of Year to Rebalance Portfolio?

I rebalance mine at the end of the year when yearly tax issues are clearest. I have no income other than SS so it's all a question of capital gains tax planning for the year that ends in December. Sometime early in the new year if markets are strong, I sell sufficient equities to replenish all antic...
by garlandwhizzer
Mon May 04, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: Gross: stockbug alert, future investment returns will be miniscule
Replies: 67
Views: 5528

Re: Gross: stockbug alert, future investment returns will be miniscule

I tend to agree with Gross on this point. I expect real bond returns going forward to be close to zero in real inflation adjusted terms and US equity returns to be in the low or hopefully mid single digits for a decade or more. There are, however, two pieces of good news in my view. First, no one ca...
by garlandwhizzer
Sun May 03, 2015 6:55 pm
Forum: Investing - Theory, News & General
Topic: How Index Funds Exercise Their Clout
Replies: 9
Views: 1185

Re: How Index Funds Exercise Their Clout

Barry Barnitz wrote: Here is a counter-argument from an active manager: Index Investing Puts Americans’ Retirement Savings in Peril, Wintergreen Advisers Says | Business Wire, April 30, 2015 What a surprise that this criticism of index investing comes from an active manager whose global stock fund,...
by garlandwhizzer
Sat May 02, 2015 9:38 pm
Forum: Investing - Theory, News & General
Topic: Vanguard vs. DFA when tax efficiency really matters
Replies: 35
Views: 2025

Re: Vanguard vs. DFA when tax efficiency really matters

grabiner wrote: If you have bonds in your tax-deferred accounts, holding a CA muni fund in taxable might be a good alternative, given your high tax rate which is irrelevant for munis but makes anything else in taxable less attractive. Given your quoted tax rates it appears that you are in a high ta...
by garlandwhizzer
Sat May 02, 2015 9:21 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4184

Re: Annuities: Bad in principle or practice?

One thing to consider in buying a SPIA is the effect of inflation. We have for more than 3 decades been in a period of decreasing inflation and inflation rates now are very low and projected by most to stay that way for the short and intermediate term. Most of us don't think much about inflation the...
by garlandwhizzer
Fri May 01, 2015 2:04 pm
Forum: Investing - Theory, News & General
Topic: the missing value premium
Replies: 34
Views: 3305

Re: the missing value premium

Markets tend to go through multi-year periods when value outperforms growth which typically are followed by multi-year periods when the opposite happens and G outperforms V. The same is true of SC versus LC, long multi-year periods of outperformance alternating with underperformance. One of the bigg...
by garlandwhizzer
Fri May 01, 2015 1:18 pm
Forum: Investing - Theory, News & General
Topic: Malkiel on Smart Beta/Factor Investing ... times 4
Replies: 21
Views: 1711

Re: Malkiel on Smart Beta/Factor Investing ... times 4

Very interesting post, scottj19707. Thanks for posting. Some notable academics like Malkiel of Princeton and Sharpe of Stanford are clearly skeptical of smart beta strategies. Rick Ferri and, needless to say, Jack Bogle have also expressed their skepticism about the ability of smart beta to produce ...
by garlandwhizzer
Wed Apr 29, 2015 4:15 pm
Forum: Investing - Theory, News & General
Topic: US stocks returned "just 0.6%" 1915-1982
Replies: 56
Views: 5648

Re: US stocks returned "just 0.6%" 1915-1984

Dividends reinvested are why this article is misleading in addition to the cherry picking of dates. Dividends prior to 1982 were very high and comprised more than half of the markets total return. Reinvesting dividends buys more shares. The cheaper the market becomes the more shares it buys assuming...
by garlandwhizzer
Tue Apr 28, 2015 7:21 pm
Forum: Investing - Theory, News & General
Topic: Cap Weighting for International
Replies: 22
Views: 1751

Re: Cap Weighting for International

TwoByFour wrote: Just to be clear, my internal debate is not passive vs. managed funds, it is cap-weighted TISM vs. slice and dice by region or country. There are many cheap (comparable to VXUS) index ETFs for single countries or regions available. I tend to agree that this implies some special ins...
by garlandwhizzer
Tue Apr 28, 2015 6:30 pm
Forum: Investing - Theory, News & General
Topic: "How much of your portfolio is in index funds, and why?"
Replies: 91
Views: 8502

Re: "How much of your portfolio is in index funds, and why?"

In equity, 97.5% index funds, mostly total market with small cap + value indexes, plus 2.5% VNQI. 2.5% active, VGPMX, which I believe to be well managed and currently undervalued for a long term investor. In fixed income all my funds are Vanguard's with active management, Investment Grade Corporate,...
by garlandwhizzer
Tue Apr 28, 2015 12:06 pm
Forum: Investing - Theory, News & General
Topic: Quality/Value/Momentum Index
Replies: 36
Views: 2029

Re: Quality/Value/Momentum Index

This is a heavily concentrated portfolio holding only 50 stocks that meet the criteria, very non-diversified. Expense ratio of 0.65%. Looks great on backtesting but it is quite easy to do this with data mining 20/20 hindsight on factors. Very small asset base now, about 3 million with wide spreads o...
by garlandwhizzer
Mon Apr 27, 2015 4:10 pm
Forum: Investing - Theory, News & General
Topic: Cap Weighting for International
Replies: 22
Views: 1751

Re: Cap Weighting for International

In theory cap weighting should be less effective in what are considered to be more inefficient markets like international and especially EM. On the other hand, I do not believe that, properly measured, active funds have as a group outperformed cap weighted indexes in DM or EM or TI. Intuitively they...
by garlandwhizzer
Mon Apr 27, 2015 12:13 pm
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 128
Views: 11327

Re: PXSV has changed indexes

Robert T wrote: (i) If you are unsure about factor exposure, then focus on expense i.e. VBR is cheapest (ii) If you want highest size and value loads without regard to alpha (making the assumption that alpha varies randomly around a long-term value of zero – sometimes positive, and sometimes negati...
by garlandwhizzer
Mon Apr 27, 2015 11:55 am
Forum: Investing - Theory, News & General
Topic: Who's holding cash?
Replies: 86
Views: 6475

Re: Who's holding cash?

Generally, I hold no cash in tax sheltered accounts, but I always hold cash in my personal account sufficient to provide adequately for my living expenses of 1 - 3 years depending on market conditions. My SS + dividends do not provide adequately for annual expenses and being a total return guy I mus...
by garlandwhizzer
Mon Apr 27, 2015 11:20 am
Forum: Investing - Theory, News & General
Topic: Vanguard Balanced Index from Cradle to Grave
Replies: 32
Views: 3311

Re: Vanguard Balanced Index from Cradle to Grave

nisiprius wrote: The thing that's hard for people to accept is that there is a fairly big zoo of portfolios of which it can be said that they are all sane, that there is no way to prove which is best, and even thirty years from now no way to prove whether the highest-returning one was smart or just...
by garlandwhizzer
Wed Apr 22, 2015 11:29 am
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 59
Views: 4854

Re: What rate of return do you use when planning for retirem

My equity is divided 60%US, 20%DM, 20%EM broken up into 50% LC and 50% SC + MC. I'm estimating total return of that equity portfolio over the next decade at 4% real. I'm estimating US bond returns over the next decade at between 0 and 1% real. Both are well below historical averages, but given the c...
by garlandwhizzer
Tue Apr 21, 2015 12:02 pm
Forum: Investing - Theory, News & General
Topic: Warren Buffett on equties, treasuries, and "risk"
Replies: 46
Views: 4446

Re: Warren Buffett on equties, treasuries, and "risk"

I believe Buffett is right. I was 100% in equities all the way until well after I retired but that was because I had a great job that paid very well and great job security. If that's not you, you need an anchor or buffer (bonds, cash) in case of loss of job or emergencies and it is wise to keep more...
by garlandwhizzer
Fri Apr 17, 2015 11:25 am
Forum: Investing - Theory, News & General
Topic: Do index funds (and other mutual funds) have a dark side?
Replies: 14
Views: 2156

Re: Do index funds (and other mutual funds) have a dark side

EmergDoc wrote: The dark side of mutual funds is that they're putting stockbrokers everywhere out of business. The dark side of index funds is that they're putting mutual fund salesmen everywhere out of business. The dark side of Bogleheads is it's putting financial advisors everywhere out of busin...
by garlandwhizzer
Fri Apr 17, 2015 11:17 am
Forum: Investing - Theory, News & General
Topic: New Vanguard White Paper: "Factor-based investing" (Apr '15)
Replies: 21
Views: 3269

Re: New Vanguard White Paper: "Factor-based investing" (Apr

Rick Ferri wrote: by Rick Ferri » Thu Apr 16, 2015 3:36 pm I've not seen the paper. There's no free lunch. So-call smart-beta is always more expensive to impliment, there are decades when it doesn't work, and today it has become so popular the odds of it not working in the near future may have incr...
by garlandwhizzer
Thu Apr 16, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: Humorous Investing are Videos are Back Up!
Replies: 8
Views: 1457

Re: Humorous Investing are Videos are Back Up!

Love them. Thanks, Boglenaut.

Garland Whizzer
by garlandwhizzer
Wed Apr 15, 2015 9:47 pm
Forum: Investing - Theory, News & General
Topic: RBD in Emerging Markets Brewing
Replies: 41
Views: 4474

Re: RBD in Emerging Markets Brewing

On this widely anticipated RBD for EM Vanguard's Emerging Market's Index Fund Admiral Shares was up 0.50%. Moving assets around pre-emptively based on short term market predictions was counterproductive, however compelling its logic looked beforehand. I suspect the same is true for most day traders ...
by garlandwhizzer
Wed Apr 15, 2015 9:29 pm
Forum: Investing - Theory, News & General
Topic: Small cap value vs private equity
Replies: 3
Views: 549

Re: Small cap value vs private equity

I suspect that there aren't good reliable statistics on the past performance of private equity. I don't think that all private equity is required to post their results in a central location. There are for example hedge fund indices but all hedge funds are not required to report. The ones who do repo...
by garlandwhizzer
Tue Apr 14, 2015 1:42 pm
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 128
Views: 11327

Re: PXSV has changed indexes

JohnnyFive wrote: They didn't change the index. The index provider (Research Affiliates...RAFI), will no longer be providing this index. That doesn't fully answer the question. It just moves the question upstream by one step. Why then did RAFI abandon an index that many sophisticated factor investor...
by garlandwhizzer
Mon Apr 13, 2015 6:20 pm
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 128
Views: 11327

Re: PXSV has changed indexes

Does anyone know exactly why PXSV management decided to change indexes? It seems to me that those on the Forum who were knowledgeable factor investors believed PXSV's old index to be an excellent choice for SCV exposure. Perhaps it didn't attract a large enough asset base to generate sufficient fees...
by garlandwhizzer
Mon Apr 13, 2015 5:55 pm
Forum: Investing - Theory, News & General
Topic: Ferri on Bloomberg Podcast
Replies: 5
Views: 1136

Re: Ferri on Bloomberg Podcast

Knowledgeable, ethical, and experienced market experts are always worth listening to. This is a case in point.

Garland Whizzer
by garlandwhizzer
Sat Apr 11, 2015 7:33 pm
Forum: Investing - Theory, News & General
Topic: Is there Smart Beta in Corporate Bonds?
Replies: 35
Views: 3361

Re: Is there Smart Beta in Corporate Bonds?

I think Rick makes a good point and I do believe that the Vanguard High Yield Corporate fund is well positioned on the risk reward tradeoff under some circumstances. Personally, I have a very high equity allocation (70% - 75%) so my modest bond allocation (25% - 30%) should be in safer fixed income ...
by garlandwhizzer
Wed Apr 08, 2015 1:49 pm
Forum: Investing - Theory, News & General
Topic: Mohamed El-Erian Has Most of His Money in Cash
Replies: 69
Views: 7918

Re: Mohamed El-Erian Has Most of His Money in Cash

Maynard F Speer wrote: If Swedroe's 'Fat Tails' portfolio can generally stay a nose ahead of a 60:40 portfolio, despite holding effectively 70% cash, I think that says something about the wisdom of holding stable capital preservers through many market conditions Larry's portfolio certainly looks li...
by garlandwhizzer
Mon Apr 06, 2015 11:51 am
Forum: Investing - Theory, News & General
Topic: Mohamed El-Erian Has Most of His Money in Cash
Replies: 69
Views: 7918

Re: Mohamed El-Erian Has Most of His Money in Cash

He's not too excited about cash either but he believes that central bank policy has driven up asset prices of stocks and bonds way beyond their intrinsic values. He fears risk going forward at this point and is taking a defensive position in asset allocation, temporarily accepting a zero return (cas...
by garlandwhizzer
Sun Apr 05, 2015 5:16 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funding
Replies: 17
Views: 1683

Re: Passive vs Active funding

This article suggests that the outperformance of active over passive increases with time. In the study 10 year active funds relative returns were much better in comparison to passive than at 5 years, and again 5 years was better than 3 years. Vanguard's data shows just the opposite, longer time fram...
by garlandwhizzer
Sat Apr 04, 2015 9:05 pm
Forum: Investing - Theory, News & General
Topic: If everyone goes index then who sets the prices?
Replies: 7
Views: 959

Re: If everyone goes index then who sets the prices?

The threat of everyone going into index funds is imaginary. Currently in spite of the recent popularity of index funds less than half of equity investments are in index funds. Hedge funds, private equity, actively managed funds, financial firms with their buy and sell rating lists, the endless strea...
by garlandwhizzer
Fri Apr 03, 2015 6:43 pm
Forum: Investing - Theory, News & General
Topic: "Is Morningstar Losing Relevance In An Indexing World?"
Replies: 25
Views: 2447

Re: "Is Morningstar Losing Relevance In An Indexing World?"

Maynard F Speer makes a good point that some of Vanguard's active funds, Berkshire Hathaway, etc., low cost funds with very good active management, may be exceptions to the rule that passive beats active. All rules have some exceptions but a few exceptions doesn't mean that the rule isn't generally ...
by garlandwhizzer
Fri Apr 03, 2015 1:37 pm
Forum: Investing - Theory, News & General
Topic: "Is Morningstar Losing Relevance In An Indexing World?"
Replies: 25
Views: 2447

Re: "Is Morningstar Losing Relevance In An Indexing World?"

I do not think the investing world will run out of those who try to beat the market with active management in spite of the considerable evidence that it is largely counterproductive. Recall that Las Vegas casinos make billions annually and have done so for a long period of time. Las Vegas is a more ...
by garlandwhizzer
Fri Apr 03, 2015 1:15 pm
Forum: Investing - Theory, News & General
Topic: Have P/E Ratios Affected Your Asset Allocation?
Replies: 52
Views: 2830

Re: Have P/E Ratios Affected Your Asset Allocation?

I definitely make modest changes in asset allocation when I believe that valuations warrant it. For example, within the equity portion of my portfolio, I increased INTL relative to US last fall from 30INTL/70US TO 40/60 based partially on valuations and partially on anticipated divergent monetary po...
by garlandwhizzer
Thu Apr 02, 2015 8:04 pm
Forum: Investing - Theory, News & General
Topic: Beating the Street
Replies: 6
Views: 724

Re: Beating the Street

When I was in the accumulating phase (a long time ago) I never held bonds and was always 100% in stocks, usually high beta stocks. It made me millions in the 1990s and lost me millions in the tech crash. I made more than I lost and, importantly, I learned a hard lesson, one I haven't forgotten since...
by garlandwhizzer
Thu Apr 02, 2015 7:45 pm
Forum: Investing - Theory, News & General
Topic: If long-term, why not just go really high risk?
Replies: 49
Views: 5115

Re: If long-term, why not just go really high risk?

If you're absolutely certain that you're not going to touch it for 50 years, I believe that 100% equity is a reasonable choice. The problem is: who can be absolutely certain up front of maintaining that behavior for 50 years? That's a lot of time and a lot of things can happen unexpectedly like seve...

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