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Rick Ferri's 30 year market forecast 2015

Rick's 30 year forecast for equity, bond, and REIT returns. It is important to read the preamble before looking at the numbers because it emphasizes the difficulty of making market forecasts and their very real limitations. Nonetheless, I think it is helpful in planning to know the future expectatio...
by garlandwhizzer
Fri Mar 27, 2015 11:57 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri's 30 year market forecast 2015
Replies: 30
Views: 3388

Re: Wise move to move some $ to cash before bear market?

The historical record suggests that no one can consistently and reliably predict beforehand when a bull market in going to begin or end and likewise for bear markets. If prognosticators make enough picks, someone gets it right occasionally but that is very much like the fact that a broken watch is a...
by garlandwhizzer
Thu Mar 26, 2015 6:29 pm
 
Forum: Investing - Theory, News & General
Topic: Wise move to move some $ to cash before bear market?
Replies: 62
Views: 4664

Re: New all-world SC multi-factor ETF

Will be interesting to watch. The index performed nicely over the past year. It's very easy, however, to set up a multi-factor global index that on 20/20 hindsight outperforms by choosing the right countries to invest in at the right weights, and the right factors in the right factor weights in orde...
by garlandwhizzer
Thu Mar 26, 2015 5:37 pm
 
Forum: Investing - Theory, News & General
Topic: New all-world Small-Cap multi-factor ETF
Replies: 4
Views: 595

Re: Should I invest my emergency fund?

It seems to me that the entire point of an emergency fund is to have a ready source of liquidity at times of severe market weakness or unexpected financial difficulty. Having 130% of the standard emergency allocation in equities does not protect you sufficiently in this regard in my opinion. The who...
by garlandwhizzer
Wed Mar 25, 2015 6:55 pm
 
Forum: Investing - Theory, News & General
Topic: Should I invest my emergency fund?
Replies: 71
Views: 5951

Re: Anyone concerned about their bond holdings?

[quote]nisi wrote: So I conclude two things. a) Interest rates often don't do what experts think they will do. b) When interest rates do do what experts think they will do, the effect may not be what experts said it would be. 1+ I believe nisi has hit this nail right on the head. This logic can be a...
by garlandwhizzer
Tue Mar 24, 2015 7:22 pm
 
Forum: Investing - Theory, News & General
Topic: Anyone concerned about their bond holdings?
Replies: 58
Views: 5585

Re: What Happens When Vanguard Owns Everything?

I tend to be skeptical and a bit paranoid about many, not all, financial advisor's, brokers, and financial firms. This is based on years of experience which was richly rewarding to those who claimed to be helping me, but not so rewarding for me. The book, "Where are the Client's Yachts" di...
by garlandwhizzer
Tue Mar 24, 2015 6:58 pm
 
Forum: Investing - Theory, News & General
Topic: What Happens When Vanguard Owns Everything?
Replies: 19
Views: 4645

Re: VGPMX [Vanguard Precious Metals And Mining Fund]

johnz 1001wrote: I think the fund started in 1984. It's roughly 240 percent above it's starting point 17 years ago. I hope my math is right. If I start with $10,000 in 1998 and the Morningstar chart says it's at about $34,000 now. Don't be shy to correct me, though I already know no one is... Actua...
by garlandwhizzer
Mon Mar 23, 2015 12:33 pm
 
Forum: Investing - Theory, News & General
Topic: VGPMX [Vanguard Precious Metals And Mining Fund]
Replies: 24
Views: 2335

Re: "Small-Cap Indexing: Popularity Can Be a Pain"

Great post, Taylor. Brings up some good points. To tilt or not to tilt and, if so, by how much is a personal decision but having more information on these questions is helpful to all of us who consider it. I'm a valuation guy and I don't believe that SC today offer the same valuation advantage relat...
by garlandwhizzer
Mon Mar 23, 2015 11:54 am
 
Forum: Investing - Theory, News & General
Topic: "Small-Cap Indexing: Popularity Can Be a Pain"
Replies: 14
Views: 2109

Re: The Most Likely Portfolio Peril — Inflation or Deflation

nedsaid wrote: Garland, we did get a benefit from the increased government debt in that it helped reflate the real estate and financial markets. In essence, it was a swap of government debt for private debt. I believe that debt is money. The write-off of subprime and other mortgage debt took a lot ...
by garlandwhizzer
Sun Mar 22, 2015 12:39 pm
 
Forum: Investing - Theory, News & General
Topic: The Most Likely Portfolio Peril — Inflation or Deflation?
Replies: 40
Views: 3737

Re: VGPMX [Vanguard Precious Metals And Mining Fund]

madbrain wrote: Sorry, but the current share price is only 78.75% below it's all time-high. What you meant is that the all time high was 470% of the current price. Sorry about my poor math. It had been a long day when I wrote that. Thanks for the correction. The point remains that VGPMX has tanked b...
by garlandwhizzer
Sun Mar 22, 2015 12:16 pm
 
Forum: Investing - Theory, News & General
Topic: VGPMX [Vanguard Precious Metals And Mining Fund]
Replies: 24
Views: 2335

VGPMX [Vanguard Precious Metals And Mining Fund]

Gold and Precious Metals Mining companies are historically among the most poorly managed corporations in the world. In addition they invest in an arena that has a zero expected long term real return and one whose volatility is off the scale. Deflation in much of the developed world, severe recession...
by garlandwhizzer
Sat Mar 21, 2015 3:03 pm
 
Forum: Investing - Theory, News & General
Topic: VGPMX [Vanguard Precious Metals And Mining Fund]
Replies: 24
Views: 2335

Re: The Most Likely Portfolio Peril — Inflation or Deflation

Great thought provoking post, Simplegift. Also enjoyed nedsaid's comments about debt. Debt levels including mortgage debt, other personal debt, and governmental debt have provided tailwinds for developed economies for decades. That engine is running out of steam. The problem is that debt used to giv...
by garlandwhizzer
Sat Mar 21, 2015 2:20 pm
 
Forum: Investing - Theory, News & General
Topic: The Most Likely Portfolio Peril — Inflation or Deflation?
Replies: 40
Views: 3737

Re: PXSV has changed indexes

Robert T wrote: . FWIW: 10-yr returns (%) to end-February 2015 JKL = 9.41 VBR = 8.84 IJS = 8.49 DFSVX = 8.10 IWN = 6.99 Russell Fundamental US Small Company Index = 11.70 http://www.russell.com/indexes/americas ... ?ic=D41448 No one disputes that indexes such as the Russell Fundamental US Small Com...
by garlandwhizzer
Wed Mar 18, 2015 6:49 pm
 
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 88
Views: 5981

Re: This Fund Manager Has Consistently Beaten the S&P 500

The Nicholas Fund is a large/mid cap growth fund with low turnover, a very similar approach to Primecap funds like the Capital Opportunty Fund. Both have outperformed not only the S&P 500 (which is an unfair comparison since it is a large cap blend fund) but also the Vanguard Growth Index Fund w...
by garlandwhizzer
Wed Mar 18, 2015 6:04 pm
 
Forum: Investing - Theory, News & General
Topic: This Fund Manager Has Consistently Beaten the S&P 500
Replies: 18
Views: 2822

Re: VWO vs China/India stock markets

Currency dynamics may have something to do with it. The dollar is appreciating against all other currencies at the moment except perhaps the Swiss franc. Some countries may show considerable market appreciation in their local currencies but translated back into dollars (VWO) the appreciation in a we...
by garlandwhizzer
Tue Mar 17, 2015 1:17 pm
 
Forum: Investing - Theory, News & General
Topic: VWO vs China/India stock markets
Replies: 1
Views: 309

Re: Is MicroCap on sale?

Given the underperformance of micro caps are we to conclude that the small premium has been not only absent but also negative for the last 10 years?

Garland Whizzer
by garlandwhizzer
Tue Mar 17, 2015 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Is MicroCap on sale?
Replies: 11
Views: 1382

Re: Philosophical Economics: Introducing the Total Return EP

Simplegift wrote: But Mr. Livermore loses me when also assumes mean reversion of CAPE — as if this were a natural occurrence and there is some "normal" level of price/earnings at which stocks are destined to trade. I realize that in this current piece he is critiquing a market prediction ...
by garlandwhizzer
Tue Mar 17, 2015 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: Philosophical Economics: Introducing the Total Return EPS
Replies: 16
Views: 1829

Re: Shiller - How Scary Is the Bond Market?

I do not believe there is going to be a crash in the bond market. Our interest rates are the highest in the world given our very low level of risk. Europe and Japan offer much lower rates at similar risk profiles and investors in those developed nations are buying US bonds, effectively putting a cei...
by garlandwhizzer
Tue Mar 17, 2015 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: Shiller - How Scary Is the Bond Market?
Replies: 29
Views: 4377

Re: Retired - When to Sell to Generate Cash

lifesoft wrote: I would sell my bond fund shares in a bear market to buy those equities. As long as I am selling bond funds, I might as well sell some for living expenses, too. Or are you saying that you are 100% equities except for your cash buffer? All my bonds (25% - 30% of portfolio) are in my ...
by garlandwhizzer
Mon Mar 16, 2015 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: Retired - When to Sell to Generate Cash
Replies: 30
Views: 1939

Re: PXSV has changed indexes

Confession: having argued on this forum that I am skeptical of real fund's ability to capture the SCV and other factor premiums going forward, I actually continue hold some SCV myself, changing from one SCV fund to another from time to time as frustration mounts. I do this in spite of the fact that ...
by garlandwhizzer
Mon Mar 16, 2015 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 88
Views: 5981

Re: Retired - When to Sell to Generate Cash

I have been retired for 17 years and I subscribe to the idea of a cash buffer to avoid having to sell equities into a bear market. In my opinion no simple rule will be perfect in all situations. The 3 year rule is a conservative one that will likely keep you out of trouble but it comes at the price ...
by garlandwhizzer
Mon Mar 16, 2015 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Retired - When to Sell to Generate Cash
Replies: 30
Views: 1939

Re: "Picking Winners?"

nedsaid wrote:Hiring stock pickers doesn't help too much or even hiring stock picker pickers. This is why I index more and more. The greatest share of my investments with new money since 1999 have been into index funds. My experience exactly. My equity exposure used to be 100% in individual stocks,...
by garlandwhizzer
Mon Mar 16, 2015 11:47 am
 
Forum: Investing - Theory, News & General
Topic: "Picking Winners?"
Replies: 5
Views: 520

Re: Bernstein: 2% investment returns over next 20 years

Clearly_Irrational wrote with respect to his returns on rental property: Non leveraged returns should be somewhere around 6% while a normal amount of leverage (30% down, 70% borrowed) should return around 15% or so. (for a 40yr holding period, adjust higher or lower depending if your holding period...
by garlandwhizzer
Sun Mar 15, 2015 2:14 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 22823

Re: How much international is too much?

How much international is too much? More than you personally are comfortable with but in no case to exceed international cap weight in global indexes.

Garland Whizzer
by garlandwhizzer
Sun Mar 15, 2015 2:03 pm
 
Forum: Investing - Theory, News & General
Topic: How much international is too much?
Replies: 113
Views: 9051

Re: PXSV has changed indexes

I think this is the second time that PXSV, a favorite SCV fund, has changed its index. Perhaps its performance has something to do with that. It has underperformed VB, Vanguard's SC blend fund, YTD, 1yr, 5 yr, 10 yr, and since PXSV's inception more than 10 yr ago. PXSV dismissed its early underperfo...
by garlandwhizzer
Sat Mar 14, 2015 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 88
Views: 5981

Re: PXSV has changed indexes

Question: Why is it that many of those who trumpet the merits of factor investing, of the small cap value premium in particular, seem to be constantly changing their fund and etf indexes designed to capture it? Isn't such change an admission that the old SCV index they used didn't achieve its desire...
by garlandwhizzer
Sat Mar 14, 2015 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: PXSV has changed indexes
Replies: 88
Views: 5981

Re: U.S. Stock Valuations — Making History?

The disparity between US valuations and international valuations is real and may well have some sound basis, better relative US corporate profit growth, better relative US GDP economic growth, the US seen as a safe haven in crisis, the dollar as world reserve currency etc.. These factors have been t...
by garlandwhizzer
Sat Mar 14, 2015 12:16 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4509

Re: American Funds beats the market 97% of the time?

Let's take AMPCX the large cap growth fund that your broker says consistently outperforms its index for starters. The first day you buy this fund your broker takes 5.75% of your money in commission. Hence you start out with 94.5% of your money instead of 100%. Small wonder the broker suggests this f...
by garlandwhizzer
Fri Mar 13, 2015 4:30 pm
 
Forum: Investing - Theory, News & General
Topic: American Funds beats the market 97% of the time?
Replies: 50
Views: 5207

Re: Any other investors with 70/30 portfolio?

I'm 68, retired for 17 years, and still am between 70/30 and 75/25. I hold bonds only for stability because I don't expect any positive real return from bonds over the next decade or more. Stocks also in my opinion will have muted returns going forward, somewhere around 4% real for a US/INTL equity ...
by garlandwhizzer
Fri Mar 13, 2015 11:04 am
 
Forum: Investing - Theory, News & General
Topic: Any other investors with 70/30 portfolio?
Replies: 60
Views: 6806

Re: U.S. Stock Valuations — Making History?

pkcrafter wrote: The dumb money indicator http://jlfmi.tumblr.com/post/1134445902 ... since-2007 Very good post. I don't believe we're near another extremely severe market crash point, like 2000 or 2008, but it is worrisome that investors many of whom have kept considerable money on the sidelines d...
by garlandwhizzer
Fri Mar 13, 2015 10:58 am
 
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4509

Re: U.S. Stock Valuations — Making History?

US equities have benefited hugely from early aggressive FED action from 2008 to the present. That weakened our currency relative to others, making our exports more attractive, and it provided a source of liquidity that drove up the prices of all US risk assets at a time when there was no other sourc...
by garlandwhizzer
Thu Mar 12, 2015 1:18 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. Stock Valuations — Making History?
Replies: 46
Views: 4509

Re: What percent Emerging Mkt in Total Int'l Stock Index?

The percentage of EM in an international fund depends on where one draws the line between DM and EM in that fund. It is not a black and white question but rather a continuum going from black (clearly a EM--China, India, Thailand, Mexico, Brazil, etc.,) to shades of gray (the transition zone--S. Kore...
by garlandwhizzer
Wed Mar 11, 2015 7:00 pm
 
Forum: Investing - Theory, News & General
Topic: What percent Emerging Mkt in Total Int'l Stock Index?
Replies: 22
Views: 1996

Re: Bernstein: 2% investment returns over next 20 years

Clearly_Irrational wrote: Bond returns 1928-2014 are not zero and I do not expect them to be so going forward despite the heavy intervention of the Fed. However bond returns starting from a very low interest rate environment like we have today, the period of 1940 - 1980 produced negative real retur...
by garlandwhizzer
Tue Mar 10, 2015 12:54 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 22823

Re: Bernstein: 2% investment returns over next 20 years

Clearly_Irrational wrote: (dividend yield + productivity growth rate + population growth rate + inflation) which is (1.82% + 2.2% + 1% + 1.77%) = 6.79% nominal or 5.02% real. Actually I don't think that's the correct formula at least Bogle's for expected future stock market returns. As I recall his...
by garlandwhizzer
Tue Mar 10, 2015 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 22823

Re: REIT Dividend Yields & Forward Returns, 1972-2015

Part of REIT outperformance is due to widespread preference for dividend-interest income over capital gains. I believe this to be irrational but it is none the less pervasive particularly among investors who are retired or close to that point. Part is due to the fact that we have persistently been i...
by garlandwhizzer
Mon Mar 09, 2015 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: REIT Dividend Yields & Forward Returns, 1972-2015
Replies: 6
Views: 732

Re: S & P 500 index fund vs S&P 500 Growth fund

Growth and value go through alternating periods of outperformance and underperformance. Sometimes the market favors growth sometimes value. My experience suggests that when you switch your portfolio from value to growth after a long period of growth outperformance, it is very likely that the tide wi...
by garlandwhizzer
Mon Mar 09, 2015 12:51 pm
 
Forum: Investing - Theory, News & General
Topic: S & P 500 index fund vs S&P 500 Growth fund
Replies: 7
Views: 790

Re: Bernstein: 2% investment returns over next 20 years

No one knows the future. We cannot count on anyone to predict the next 20 years with reliable accuracy. Dr. Bernstein's projections are very low by historical standards. He is an accomplished and experienced student of the market and he has plenty of astute company (Grantham, Asness, Gross, among ot...
by garlandwhizzer
Mon Mar 09, 2015 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: 2% investment returns over next 20 years
Replies: 216
Views: 22823

Re: Tech Stock Valuations--Mark Cuban's "Bubble"

likashing wrote What I think will hit most? SF Bay Area housing. While housing in the US as a whole has still not recovered, the SF Bay Area has already shot above the previous peak. One big factor is extra jobs and higher salary created by the tech boom 2.0. The above mentioned companies are hirin...
by garlandwhizzer
Fri Mar 06, 2015 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: Tech Stock Valuations--Mark Cuban's "Bubble"
Replies: 20
Views: 2234

Re: What percent Emerging Mkt in Total Int'l Stock Index?

Vanguard counts South Korea as a developed market. Most EM funds count it as an emerging market and it has a significant market cap weight in their EM index. It all depends on how the fund arbitrarily defines EM and DM at the grey margin zone. In terms of investment returns the different definitions...
by garlandwhizzer
Fri Mar 06, 2015 12:15 pm
 
Forum: Investing - Theory, News & General
Topic: What percent Emerging Mkt in Total Int'l Stock Index?
Replies: 22
Views: 1996

Re: SIGN PETITION for Jack Bogle's Presidential Medal of Fre

Signed and submitted. Less than 3000 signatures needed in the next week to hit the magic 100,000. Everyone who reads and enjoys this forum should sign to get us over that threshold. Bogle richly deserves this honor.

Garland Whizzer
by garlandwhizzer
Fri Mar 06, 2015 12:01 pm
 
Forum: Investing - Theory, News & General
Topic: SIGN PETITION for Jack Bogle's Presidential Medal of Freedon
Replies: 55
Views: 4456

Re: Emerging Market Stocks & Oil Prices, 1997-2015

Lower oil prices hurt EM oil exporters (Russia, Venezuela, Brazil,etc.,) but they help oil importers (China, India, Taiwan, etc.,) as Simplegift pointed out. EM cap weight indexes are now dominated by oil importers rather than exporters. Most EMs also spend a much higher percentage of GDP on fuel, a...
by garlandwhizzer
Thu Mar 05, 2015 6:45 pm
 
Forum: Investing - Theory, News & General
Topic: Emerging Market Stocks & Oil Prices, 1997-2015
Replies: 12
Views: 966

Re: Anyone fans of the CNBC show American Greed???

Interesting show that serves a purpose, to turn the public off to get rich quick schemes. Simple rule: anybody who guarantees 8% - 10%+ in dividends annually without risk to principal is lying. No exceptions to that rule. The striking and sad thing is that many of these charlatans prey on the most v...
by garlandwhizzer
Thu Mar 05, 2015 11:40 am
 
Forum: Personal Consumer Issues
Topic: Anyone fans of the CNBC show American Greed???
Replies: 32
Views: 2341

Re: Poll: Increasing international equities

I increased international equity exposure about 5 or 6 months ago from 30% to 40% of total equity. There is no option offered for those who have already done so.

Garland Whizzer
by garlandwhizzer
Wed Mar 04, 2015 10:24 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Increasing international equities
Replies: 58
Views: 3790

Re: "Americans Aren't Saving Enough for Retirement"

The problem is not only that potential retirees haven't saved enough. It is compounded by the fact that we live now in a historically low yield environment in the bond market and low expected future returns in equity markets. No serious student of the markets expects future returns to be up to histo...
by garlandwhizzer
Wed Mar 04, 2015 10:02 am
 
Forum: Investing - Theory, News & General
Topic: "Americans Aren't Saving Enough for Retirement"
Replies: 41
Views: 4761

Re: Charley Ellis Guesting on Bob Brinker today

I'll have to take up for Bob here. He correctly called the tech collapse of 2000 6 months before it happened. Those who followed his market timing advice (to move 60% of your equity holdings into bonds or cash) are not crying because they broke with Boglehead orthodoxy and market timed. Having made ...
by garlandwhizzer
Sun Mar 01, 2015 8:47 pm
 
Forum: Investing - Theory, News & General
Topic: Charley Ellis Guesting on Bob Brinker today
Replies: 10
Views: 1146

Re: Dividends and Market Slides

Stocks that pay good dividends tend to be value stocks, large cap stocks, and to operate in mature seasoned markets not rapidly growing ones. Their cash flows in general tend to be more reliable but to grow more slowly than their opposite: smaller cap growth stocks in rapidly expanding and rapidly c...
by garlandwhizzer
Sun Mar 01, 2015 8:12 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 55
Views: 3377

Re: What is the BH consensus on international bonds?

y Noobvestor » Sun Mar 01, 2015 2:42 am Total International Bond has a current yield of less than 1% and a duration of over 7 years. I can see no good reason to hold it over CDs or other bonds. Surprised there is even discussion around this. I know I'm normally the international advocate, but in th...
by garlandwhizzer
Sun Mar 01, 2015 1:01 pm
 
Forum: Investing - Theory, News & General
Topic: What is the BH consensus on international bonds?
Replies: 54
Views: 4004

Re: Likely impact on equities of interest rate increase

When yields rise above 5% - 6%, that critical inflection point, there is always inflation present. Inflation acts as a discount on future stock earnings as well as on future bond returns. There are two important questions. First, what is the real bond interest rate (yield minus inflation) and the re...
by garlandwhizzer
Sun Mar 01, 2015 12:55 pm
 
Forum: Investing - Theory, News & General
Topic: Likely impact on equities of interest rate increase
Replies: 7
Views: 802

Re: You and Your Dumb Money

"Dumb money" reflects sentiment more than fundamentals. When sentiment swings in either direction to extreme levels, it has a negative correlation with future returns. Excessive optimism precedes crashes, excessive pessimism precedes secular bull markets. Most sentiment indicators now show...
by garlandwhizzer
Sun Mar 01, 2015 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: You and Your Dumb Money
Replies: 17
Views: 3296

Re: Past, present, and future of Berkshire - Annual letter

It is interesting that in earlier years Berkshire massively outperformed the S&P 500 but since 2009 it has underperformed that benchmark. This may be merely a pause in Warren's outperformance or it may be the effect of asset bloat. No matter how great you are as a stock picker if the volume of m...
by garlandwhizzer
Sat Feb 28, 2015 11:33 am
 
Forum: Investing - Theory, News & General
Topic: Past, present, and future of Berkshire - Annual letter
Replies: 29
Views: 2592
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