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Re: Stock market recovery time

Taylor hit the nail on the head. The equity fear mongers don't take into account the effects of reinvestment of dividends. The Great Depression took 7 years to recover all equity losses which were 80% by the way. Our recent collapse of 60% in 2008-9 took only 4.5 years to fully recover. The collapse...
by garlandwhizzer
Tue Jul 22, 2014 8:59 pm
 
Forum: Investing - Theory, News & General
Topic: Stock market recovery time
Replies: 25
Views: 2644

Re: Reduce / Eliminate Emerging Market in Retirement?

Nearing_Destination wrote: It appears that most would hold the market weight in VXUS (some don't just tilt... like "GarlandWhizzer" whose international is all EM or REIT). Update. That allocation was several years ago. At the time I felt that international REITS were grossly undervalued, s...
by garlandwhizzer
Tue Jul 22, 2014 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: Reduce / Eliminate Emerging Market in Retirement?
Replies: 11
Views: 1137

Re: Value Overvalued

TJSI wrote: Overvalued or not, I would like to thank James99 for the link. It contains a lot of relevant statistics and data. Thanks. 1+. I also thank James 99 for this link. I found it very interesting. Their valuation data was based on projected earnings which are usually overestimated in my exper...
by garlandwhizzer
Tue Jul 22, 2014 3:31 pm
 
Forum: Investing - Theory, News & General
Topic: Value Overvalued
Replies: 23
Views: 2169

Re: To Tilt or Not to Tilt - Rick Ferri's Latest

Whether to tilt or not is a personal decision. Those who choose a 3 fund portfolio over long periods of time will do quite well. Those who tilt in various ways will also do quite well. I don't believe there's one magic answer for everyone. It's more important to adhere to a sound investment plan tha...
by garlandwhizzer
Tue Jul 22, 2014 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: To Tilt or Not to Tilt - Rick Ferri's Latest
Replies: 72
Views: 6483

Re: Can it be wrong to be too risk averse?

It can be wrong to be too risk averse. Your long term portfolio appreciation suffers and you may well find yourself running out of money during retirement. It can also be wrong not be risk averse enough. You can realize too late in a market collapse that you underestimated your risk aversion and dum...
by garlandwhizzer
Tue Jul 22, 2014 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2269

Re: Adding Corporates to Total Bond Market Index

Munir wrote: Unless one panics and wants to cash out one's bond holdings during a temporary dip in bond prices, why should we gear our longterm investment plans to such temporary dips when after a few months, the corporates recovered and actually beat treasuries in their performance during the 2008 ...
by garlandwhizzer
Tue Jul 22, 2014 2:33 pm
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 75
Views: 6031

Re: Tobins Q as market valuation metric

ArthurO wrote: I just wanted to get the Bogleheads take on the Tobins Q and should we be worried that it's value is 3rd highest in history, and previous 5 times when the value was that high, market returns for next 30 YEARS were negative. This statement if factually incorrect. With dividends reinves...
by garlandwhizzer
Fri Jul 18, 2014 3:04 pm
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2031

Re: Should I use margin to buy a balanced fund?

Taking a margin position implies two things. First, that you know the asset you're purchasing is going up in price over your holding period. Second, that you will not have to sell that asset earlier than anticipated to provide for unanticipated expenses during a personal, national, or worldwide econ...
by garlandwhizzer
Fri Jul 18, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 112
Views: 5399

Re: International exposure: does it really help?

On the question of international exposure or of overweighting factor exposure (small cap, value, momentum, etc.) there is a lot of strong feeling on both sides of these arguments. It reminds me of a medical insight: whenever there are multiple different treatments that are strongly advocated for a d...
by garlandwhizzer
Tue Jul 08, 2014 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: International exposure: does it really help?
Replies: 75
Views: 7282

Re: Asset bubble?

At the worst of the crisis in 2008-9 the Fed had to choose between two very unpleasant alternatives. First choice: don't do much and let the market work it out without much intervention. It is likely that that choice would have brought about a Great Depression-like scenario, just as it did in the fi...
by garlandwhizzer
Tue Jul 08, 2014 2:07 pm
 
Forum: Investing - Theory, News & General
Topic: Asset bubble?
Replies: 8
Views: 930

Re: a close look at value and momentum

I believe AQR funds employ long-short strategies to fully exploit factors because apparently much of the premium lies in the short side. Factor investing has been reliable over long periods of time in the past and is intellectually appealing. But focusing on long-short factor strategies to the exclu...
by garlandwhizzer
Mon Jul 07, 2014 8:16 pm
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16681

Re: Cash allocation in a portfolio

My cash allocation is currently slightly greater than 5%, all in my personal account rather than IRA, about 3 years of living expenses which allows me to take my risk elsewhere and always sleep at night. The downside is that I miss the income of a short term tax free fund in my personal account. The...
by garlandwhizzer
Mon Jul 07, 2014 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: Cash allocation in a portfolio
Replies: 42
Views: 3591

Re: Bubble, Bubble, Toil and Trouble

Very interesting article. Thanks for posting. Take home message: we are unlikely to be in an equity bubble now. Considering current interest rate background, equity prices are likely to be fair at present. No good reason for dumping equities now as some adherents of PE10 market timing advocate. The ...
by garlandwhizzer
Mon Jul 07, 2014 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: Bubble, Bubble, Toil and Trouble
Replies: 24
Views: 3552

Re: Any Bogelheads get involved in private equity?

I have a 4% maximum portfolio allocation rule to high risk/high reward, completely non-diversified investments. Currently it is invested in a biotech startup in which I was one of the original investors, no fees or commissions. My investment has been illiquid for 10 years, through the development ph...
by garlandwhizzer
Sat Jul 05, 2014 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: Any Bogleheads get involved in private equity?
Replies: 31
Views: 3301

Re: Video: The Best Time to Invest

Makes a great but simple point. The most important factor for equity returns is not timing the market but time in the market. As a young investor in the accumulation phase, I believe it's wise to pay no attention at all to market gyrations and to keep buying in on a regular basis regardless of the m...
by garlandwhizzer
Sat Jul 05, 2014 2:01 pm
 
Forum: Investing - Theory, News & General
Topic: Video: The Best Time to Invest
Replies: 2
Views: 342

Re: The Risk of Short-term Bond Funds

Rick Ferri wrote: I'm not saying that short-bonds don't belong in a person's portfolio. Far from it. I'm only pointing out that trying to avoid losses by moving from a intermediate-term duration fund to an short-duration fund hasn't paid off over the past three- five- years. The opportunity cost of ...
by garlandwhizzer
Thu Jul 03, 2014 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10135

Re: Current Stock Market Predictions

Certainly there are seemingly logical formulas by which you can calculate the 10 year expected returns of the stock market. The question of course is how consistently accurate are they? I tend to agree with JoMoney that projections of 10 year forward returns are often inherently flawed regardless of...
by garlandwhizzer
Tue Jul 01, 2014 1:30 pm
 
Forum: Investing - Theory, News & General
Topic: Current Stock Market Predictions
Replies: 35
Views: 5358

Re: The IPO is dying - Marc Andreessen

About what you'd expect the head of a venture capital fund to say: make it easier for unsophisticated investors to buy my products.

Garland Whizzer
by garlandwhizzer
Mon Jun 30, 2014 12:32 pm
 
Forum: Investing - Theory, News & General
Topic: The IPO is dying - Marc Andreessen
Replies: 16
Views: 1392

Re: Suggestions for teaching new MDs about finance?

livesoft wrote: I would have thought that MDs are trained to be skeptical of everything they are taught in med school as well as their teachers and other doctors. Does this not extend to other "experts" that they may come in contact with? Basically through the long and difficult years of ...
by garlandwhizzer
Sun Jun 29, 2014 7:04 pm
 
Forum: Investing - Theory, News & General
Topic: Suggestions for teaching new MDs about finance?
Replies: 39
Views: 2657

Re: Why hedge funds faltered

I think there are two main sources that explain why hedge funds continue to suck in huge amounts of investment assets in spite of poor performance relative to index funds. First of all, the only people who invest in them are very rich. There is a certain cocktail party cache in saying you're investe...
by garlandwhizzer
Sun Jun 29, 2014 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: Why hedge funds faltered
Replies: 12
Views: 1416

Re: Merton: 401(k) retirement plans face crisis

nedsaid wrote:
My point is that no matter what a retiree does, there is still a certain amount of risk that he or she assumes. There is no way around that. But there are certainly better strategies than others in dealing with this. But even the best strategies are not perfect.


1+

Garland Whizzer
by garlandwhizzer
Sun Jun 29, 2014 12:34 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16823

Re: Suggestions for teaching new MDs about finance?

Rather than a seminar by salesmen, I would gift each each young MD with one of Jack Bogle's books or Larry's or Rick's or Bill Bernstein's. It is important to tell them at the same time that they will be lifelong prime targets for brokers, investment advisors, and financial planners whose main aim i...
by garlandwhizzer
Sat Jun 28, 2014 5:00 pm
 
Forum: Investing - Theory, News & General
Topic: Suggestions for teaching new MDs about finance?
Replies: 39
Views: 2657

Re: Total Bond Market

Valuethinker wrote: Your best 'pure' alternative is probably a US government intermediate term bond fund OR intermediate term investment grade (in a rerun of 2008-09 the latter will significantly underperform). Good point, Valuethinker. The other side of that coin is that in a rerun of 2009-2014, th...
by garlandwhizzer
Fri Jun 27, 2014 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Market
Replies: 5
Views: 1665

Re: Modeling the Worst Case for Stocks

I don't think I'd weight the "worst case scenario" too highly in making financial asset allocation decisions. I think the worst case is that stocks are worth nothing and everyone is dead or wishes they were. Multiple causes--huge asteroid impact like the one that wiped out the dinosaurs, s...
by garlandwhizzer
Thu Jun 26, 2014 8:31 pm
 
Forum: Investing - Theory, News & General
Topic: Modeling the Worst Case for Stocks
Replies: 41
Views: 3075

Re: Liability Matching Portfolio? Really?

#Cruncher wrote: Good point, Garland. But remember that with a ladder of TIPS, one will have the whole range of maturities to choose from for liquidation. If interest rates are low, one can liquidate longer maturities and possibly not lose any principal at all. If interest rates are high, one can li...
by garlandwhizzer
Wed Jun 25, 2014 5:47 pm
 
Forum: Investing - Theory, News & General
Topic: Liability Matching Portfolio? Really?
Replies: 71
Views: 6889

Re: Article: Conversation with John Bogle

In my opinion Jack Bogle is the greatest hero in the investing world. He has used his keen investment insight and the precision of his steel trap mind not to make billions for himself but rather to show the way for average Joes and Janes to be successful investors and improve their lives rather than...
by garlandwhizzer
Wed Jun 25, 2014 1:24 pm
 
Forum: Investing - Theory, News & General
Topic: Article: Conversation with John Bogle
Replies: 15
Views: 1886

Re: Are small and mid caps necessary?

I tilt to 40% MC+SC and 60% LC in my US portfolio and MC+SC 50%, 50%LC in international because I believe International SC+MC are better diversifiers to a US equity portfolio than international LC. Many of the investment sages who post on this board (Larry, Rick, Bill Bernstein, for example) tilt an...
by garlandwhizzer
Tue Jun 24, 2014 9:46 pm
 
Forum: Investing - Theory, News & General
Topic: Are small and mid caps necessary?
Replies: 35
Views: 2369

Re: An Argument for Long Term Treasury Bonds

I believe Larry has made the point that long term Treasuries are the best diversifier in a heavily equity dominated portfolio. The downside of long term bonds is that they sustain large principal losses in a rising interest rate/inflation environment due to their high duration. I think Larry's point...
by garlandwhizzer
Tue Jun 24, 2014 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: An Argument for Long Term Treasury Bonds
Replies: 35
Views: 1847

Re: Liability Matching Portfolio? Really?

I really enjoyed Dr. Bernstein's new book, but there is one point he makes that on which I strongly disagree. LMPs may be attractive for very risk averse investors but I am not one and I don't think it necessary for everyone to have a LMP. I have won the game and I choose to keep playing. My main re...
by garlandwhizzer
Tue Jun 24, 2014 2:29 pm
 
Forum: Investing - Theory, News & General
Topic: Liability Matching Portfolio? Really?
Replies: 71
Views: 6889

Re: Do you see profit or ponzi?

At an earlier phase of my life I was taken in on a Ponzi scheme in real estate that looked so compelling on paper that it was impossible to resist. I wound up losing all my investment capital plus years later the IRS came after me to pay back taxes plus penalties for falsified real estate tax docume...
by garlandwhizzer
Sun Jun 22, 2014 6:22 pm
 
Forum: Investing - Theory, News & General
Topic: Do you see profit or ponzi?
Replies: 100
Views: 7011

Re: Thoughts on adding Vanguard Precious Metals and Mining F

In Bill Bernstein's recent excellent book, Rational Expectations, he takes the position that commodity based funds, PM, Energy, and REITS, can play a role in a diversified portfolio. They tend to outperform according to BB during inflationary times and are in a sense insurance for inflation held as ...
by garlandwhizzer
Sun Jun 22, 2014 1:54 pm
 
Forum: Investing - Theory, News & General
Topic: Thoughts on adding Vanguard Precious Metals and Mining Fund
Replies: 44
Views: 8521

Re: Do you see profit or ponzi?

Grabner's reply to this claim hits the nail directly on the head. Claims, especially by charlatans, can have a grain of truth but be totally misleading. The probability that this trading method works reliably and consistently over long periods of time to produce portfolio alpha is close to zero in m...
by garlandwhizzer
Sun Jun 22, 2014 1:02 pm
 
Forum: Investing - Theory, News & General
Topic: Do you see profit or ponzi?
Replies: 100
Views: 7011

Re: Good article on style premium investing & AQR new fund

I think AQR's long-short factor approach is interesting but... 1) It's very expensive for individual investors. Paying an additional 1.45% annually in costs relative to TSM seems like a very high hurdle in a world where most agree that going forward from here factor excess returns are going to decre...
by garlandwhizzer
Sat Jun 21, 2014 1:37 pm
 
Forum: Investing - Theory, News & General
Topic: Good article on style premium investing & AQR new fund
Replies: 62
Views: 6000

Re: Can someone explain B Bernstein's math

Thanks for the correction and clarification, #Cruncher.

Garland Whizzer
by garlandwhizzer
Thu Jun 19, 2014 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Can someone explain B Bernstein's math
Replies: 42
Views: 3921

Re: Do you see profit or ponzi?

Beware active management that claims to have discovered the "secret sauce." Many of us on this forum started out with that approach and after years or decades of bad experiences have abandoned it in favor of low cost index funds. In general asset allocation decisions carry more weight on i...
by garlandwhizzer
Thu Jun 19, 2014 12:35 pm
 
Forum: Investing - Theory, News & General
Topic: Do you see profit or ponzi?
Replies: 100
Views: 7011

Re: Retirees: Equity holdings of 90%+

I am 67 years old and have been retired for 17 years. When I first retired at age 50, I had a 100% equity portfolio and had kept one like that for my entire investing career, 10 years up until that time. I rode the bull market of the 90s but learned a hard lesson in the tech collapse of 2000 - 2003....
by garlandwhizzer
Wed Jun 18, 2014 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: Retirees: Equity holdings of 90%+
Replies: 14
Views: 1614

Re: Can someone explain B Bernstein's math

Correct me if I am wrong, #Cruncher, but in your analysis you take dividends out as cash rather than reinvesting them in buying new shares. In the Great Depression for example stocks dropped by close to 80% from 1929 to 1932 but if you reinvested all your dividends you recovered all these loses by 1...
by garlandwhizzer
Wed Jun 18, 2014 1:31 pm
 
Forum: Investing - Theory, News & General
Topic: Can someone explain B Bernstein's math
Replies: 42
Views: 3921

Re: No bonds at all.

Berntson wrote:I don't think we need to look very hard at current yields because bonds are perpetually overpriced. The idea is (a) as many economist have noticed, the equity risk premium is larger than it should be and (b) risk aversion (really, prospect theory, which I just described) nicely expla...
by garlandwhizzer
Wed Jun 18, 2014 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: No bonds at all.
Replies: 176
Views: 11792

Re: Reading Bernstein: Is value overvalued?

I'd flip it around and say that valuations are what create/define risk premia. Investors will only pay low prices for assets they perceive to be risky. As long as the expected catastrophe doesn't materialize (most days), they get more earnings/dividends/coupons for every dollar they paid for they a...
by garlandwhizzer
Mon Jun 16, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: Reading Bernstein: Is value overvalued?
Replies: 38
Views: 3580

Re: FT: The myth of small-cap outperformance

JoMoney wrote:It appears that shortly after the dot-com boom of the 2000's that the "Median Market Cap" for the Total Stock Market started shrinking, this was the case for several years and then the "Median Market Cap" started growing again, but what I notice is that the growth ...
by garlandwhizzer
Sun Jun 15, 2014 12:12 pm
 
Forum: Investing - Theory, News & General
Topic: FT: The myth of small-cap outperformance
Replies: 42
Views: 3752

Re: A Look at Current P/E Ratios

Morningstar, as JoMoney said, reports PEs as projected earnings, estimated for next 12 months. Vanguard reports earnings for the past 12 months. I also suspect but do not know for sure whether they use different earnings measurements. Vanguard uses GAAP (generally accepted accounting practices) whic...
by garlandwhizzer
Sat Jun 14, 2014 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: A Look at Current P/E Ratios
Replies: 53
Views: 5845

Re: 2nd part of int'l diversification series on ETF.com

Excellent article, Larry. Thanks for the post, some great points.

Garland Whizzer
by garlandwhizzer
Fri Jun 13, 2014 7:22 pm
 
Forum: Investing - Theory, News & General
Topic: 2nd part of int'l diversification series on ETF.com
Replies: 18
Views: 1196

Re: 2nd part of int'l diversification series on ETF.com

cowboysFan wrote:As an analogy, suppose when Enron was at its peak, the corporate insiders came to you wanting to dump their shares as quickly and quietly as possible, but admitted they had been cooking the books for a long time. And of course Enron was headquartered in Texas, not in the emerging m...
by garlandwhizzer
Fri Jun 13, 2014 7:21 pm
 
Forum: Investing - Theory, News & General
Topic: 2nd part of int'l diversification series on ETF.com
Replies: 18
Views: 1196

Re: Brett Arend's 10 fund "All-Weather" portfolio

The "all weather portfolio" looks great since 1998, the last 16 years. It includes 40% bonds (which since 1998 have been in a historic bull market as interest rates and inflation consistently decreased to current historic low levels) plus 20% REITS (which likewise have been in an unprecede...
by garlandwhizzer
Fri Jun 13, 2014 6:51 pm
 
Forum: Investing - Theory, News & General
Topic: Brett Arends's "Perfect Portfolio" Comments?
Replies: 24
Views: 1761

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

Steve_14 wrote Though their expectations are very, very different. For small cap value: Bernstein: +4%/year Grantham: -5%/year So expect your small caps to either double or drop by half over the next few years. This is true and the disparity speaks to uncertainty being the case with small caps and s...
by garlandwhizzer
Wed Jun 11, 2014 6:38 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17121

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

I've got to say this is a great discussion. So much food for thought on both sides of the issue that my brain currently feels overstuffed. Not certain now whether, facing this rather grim future, to do a pre-emptive tactical allocation shift or to stay with my widely diversified index portfolio with...
by garlandwhizzer
Wed Jun 11, 2014 2:04 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17121

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

Clearly_irrational wrote: I'm not sure I totally agree with the changes proposed, but here's a good article about that: http://philosophicaleconomics.wordpress.com/2013/12/13/shiller/ Very interesting article. Thanks for the post. After pondering Bernstein's forecast of a decade of very low returns...
by garlandwhizzer
Tue Jun 10, 2014 9:42 pm
 
Forum: Investing - Theory, News & General
Topic: What happened if you had used CAPE to time the market?
Replies: 20
Views: 1729

Re: "Costly Self-delusions": Happiness, Market Timing

VictoriaF wrote: 1. Jonathan Clemens rightly states that money does not make us happier, and as evidence, he compares the wealth and the happiness of the Americans in 1972 and 2012. During these 40 years, the wealth has significantly increased while the happiness has hardly moved. However, this may...
by garlandwhizzer
Tue Jun 10, 2014 9:08 pm
 
Forum: Investing - Theory, News & General
Topic: "Costly Self-delusions": Happiness, Market Timing
Replies: 30
Views: 2143

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

Given the fact that a market analyst of Dr. Bernstein's stature and record says that: 1.He believes his forecasts to be be sufficiently reliable to be actionable at greater than 50/50 probability. 2.He gives sound fundamental economic reasons for his projections (demographic shifts, valuations, exce...
by garlandwhizzer
Tue Jun 10, 2014 1:10 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17121

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

garlandwhizzer wrote: Hopefully this pessimism will be like the famous "Death of Equities" front page of popular periodical in 1982 (Time or Newsweek) that marked the exact beginning of the greatest secular bull market in US history, a bull that ran on for 17 years in both stocks and bonds...
by garlandwhizzer
Tue Jun 10, 2014 12:18 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17121
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