Bogleheads.org

few things First for grap, you might want to read the Novy Marx paper which has the data or my summary here http://www.cbsnews.com/8301-505123_162-57542953/a-new-way-to-be-a-value-investor/ Second, for Dave and Crake, moving to profitability doesn't take you back to a TSM portfolio, at least not to...

Larry,

I am reminded of this article you wrote: http://www.cbsnews.com/8301-505123_162- ... -strategy/

Maybe you could run these four other factors over the same time frame of the profitability factor study to see how they directly compare?

Thanks!

grap

Larry, How well do you think Fundamental Indexes (FIs) capture this new profitability factor? Seems like cash flows/profitability are somewhat linked and FIs focus on cash flow as one of their value metrics. This new metric only enhances my confidence in FIs. They also pass Larry's sniff test as the...

Of course, nobody has a crystal ball, but the fundamentals for 75% of that portfolio look really bad: Gold has had its nice runup over the last 10 years. Reversion to the mean: gold probably won't duplicate its stellar performance of late. With interest rates artificially pushed to near zero the ef...

Based on discussions here and the writings of folks like Wade Pfau, I have at times considered amending my IPS to call for a downward shift in equities as P/E10 levels exceed normal ranges. With mean P/E10 around 16, the current 24 level seems like a time to start downshifting. Do you adjust your s...

Of course, nobody has a crystal ball, but the fundamentals for 75% of that portfolio look really bad: Gold has had its nice runup over the last 10 years. Reversion to the mean: gold probably won't duplicate its stellar performance of late. With interest rates artificially pushed to near zero the ef...

pennstater2005 wrote:Using credit cards in college to buy beer.

-1

I respectfully disagree on this one.

letsgobobby wrote:it's hard to say that 30 year bonds are 'hated' when their prices are at an all time high. I don't get the reasoning at all.

+1

Let's talk about buying Europe and emerging markets if we are talking contrarian.

Seeing EDN post reminds me about these constant portfolio "tweaks" that he has talked about a few times on here. I think these drag on portfolio returns in the long run. ie an investor has a 10% slice to SCV and then later abandons it for simplicity. Go 80% stocks into 2008 and then go 60/...

I think forum member yobria is someone who was into small-cap value in a big way and changed his mind. If one looks at his posts, he hasn't posted in a while. But yobria was teased a bit for being on the SCV bandwagon with RZV, then abandoning RZV after a (big?) loss and going vocally anti-SCV afte...

Without a doubt. INTL REIT.

Now I'm more confused. Maybe I'll make it easier on myself...do you think all those value metrics I mentioned above are resonable ways to attempt to realize the extra returns associated with the value premium?

Thanks!

grap

I've been meaning to post this question for a while. Here's the background on the two different methodologies: Powershare's FIs follow the RAFI strategy: Unlike market-cap weighted indexes, PowerShares FTSE RAFI Portfolios incorporate the Fundamental Index® investment criteria of cash flow, book val...

You can't approach this question from a point of view that something is ok or not ok. The whole subject of tilting at all is neither absolutely ok nor not ok. Let me rephrase - would the advantage of SV tilting commonly espoused here still be observed if the SV component was US only, even though th...

Axes are not labelled. What are they? I guess horizontal axes is number of children and vertical axis is percent house value of net worth? I understand your proclivity towards humor, and encouraging people to fish or think for themselves is beneficial. And sometimes he's just snarky for the fun of ...

Whoops, I need to read better. 3m in today's dollars will likely be 6m in nominal once I retire. That's a big number for an individual. I would be retired and spending some if it got that big so no, I will not likely hit 3 million. I'm gunning for 2.5 million though!

Some numbers are not jiving here. BGs make a lot of money on average. Next I look at the savings rate thread. Something must be in disconnect here. I think a lot of people who answered <3 million must be assuming <3% real returns. Let's just run some dummy numbers: Income 100K Save 25% Common employ...

I would not bother with 10% bonds, I would go 100% stocks. Why invest in bonds yielding 2% when you are paying debts at 6.8%. At these tax rates, I would try to put 17.5k in the 403b, too. This should be pretty close to dropping you into the 28% bracket. Everything else towards the school loans. I ...

Realize that I am not advocating taking more risk. I am recommending holding the risk level you already have, which should already be at a level that you can handle else you should never have been there. Rick Ferri Nice article. It was a refreshing read. All too often in these interviews answers ar...

A lot of defensiveness going on with this thread. You'd think some of the BGs 1st born children were insulted. I'm shocked by some of the tone. :shock: I guess if you have believed in dividends for many, many, many years then it would be most difficult to redirect and believe otherwise despite overw...

I must've been on vacation during this thread. How could I miss a FI discussion?! If Nisi is going to cherry pick one comparison so am I. Graph VEA vs. SFILX over the past 3 years. VEA is cap weighted ex US developed large blend SFILX is fundamental ex US developed small Yes VEA is cheaper but SFILX...

Go for it. International is currently the better deal. Buying low is a good thing.

$3.2 million dollars. If the OP started taking 120k/yr and earned only enough to keep up with inflation (and not a dime more...zero real return) she could withdraw 120k annually for 26.7 years. That would be depleting every single time by 84/85 and doesn't account for social security. It also doesn...

Great article from index universe and it pertains to current valuation of equities globally using CAPE: http://www.indexuniverse.com/publications/journalofindexes/joi-articles/16017-global-value.html?showall=&fullart=1&start=8 Interestingly, I looked at VEA (MSCI EAFE) at its largest holding...

^ I like that move bobby. I think you might as well go to 50% international and then you can thank me in 10 years on here for those 50 extra basis points annualized. :wink: I am strongly considering exactly this move. I accomplished 1/5 of it today. Can I also come back and blame you if the expecte...

^

I like that move bobby. I think you might as well go to 50% international and then you can thank me in 10 years on here for those 50 extra basis points annualized.

I am surprised and humbled at the same time. Ours, including property tax and insurance is around 20%, which is on the HIGH end here. Up to this point, I felt that we lived well below our means but now I am not so sure. I am really surprised at that large number of people here at only 5-10%. Cosmo ...

I don't think it's aggressive at all. Look at all that monthly fixed income, 1.2 million dollar house, and a bunch of cash. Plus they are 84/89 yo. It's not like they need 40 more years of withdrawal planning. They've probably been 100% stocks longer than many posters have been alive. Why do you ass...

The underperformance of International compared to U.S. has made International the better bargain. http://static3.businessinsider.com/image/513df21f6bb3f7ae0d000013-900/goldman-sachs-asset-management.jpg from http://www.businessinsider.com/jim-oneill-stocks-are-not-a-bargain-2013-3 That's a cool cha...

Grap, you seem to have not put Schwab's EM Value (SFENX) or International SV (SFILX) "fundamental index" funds in the mix. Do you have thoughts on these? Hub, They use slightly different fundamental factors than Powershares. I don't think it matters much. SFENX has the same frictional los...

Of course he has to defend it. Much like Vanguard has to defend cap weighted indexes. I think Fundamental indexes are great for all the other geographic regions. The funds and ETFs that follow them basically only lag by expense ratio. If you want to tilt to value and or small in EMs it is difficult ...

http://www.pionline.com/article/19990405/PRINTSUB/904050734 IBBOTSON FORECASTS DOW AT 120,000 WITHIN 25 YEARS; DON'T LAUGH YET -- HE WAS RIGHT THE LAST TIME. EDN pointed out that as of today, the Dow would need a compound annualized growth rate of 18% per year to achieve that. I think Ibbotson had ...

I haven't determined my number yet, so I'd like to ask a related question. Is it worth it for investors in the 25-35 age range to go through the exercise or trying to come up with a number given the huge uncertainties involved? My current strategy is just to save as much as I can. A general seconda...

RenoJay wrote:$10,000,000. Nice round number with lots of digits.

+1

Same here. It sounds a little greedy compared to other posters, but I want to retire early (early to mid 50s), have some flexibility, and have some expensive fun.

Yes, but: on the implementation costs of fundamental Emerging Markets funds: Indexuniverse - The Added Value Of Fundamental Indexing, By Cris Heaton, March 04, 2013 In this column, the actual returns of fundamental emerging market ETFs are compared with the indices they're tracking. Since inception...

Grap This is the money illusion problem If rates rise they rise for basically one of two reasons. The first is inflation rises. If that happens corporate earnings should basically rise by about same rate. So nominal returns go up but not real. So no change in the risk premium. The other is real rat...

It's interesting to think of expected stock returns in isolation based on valuations vs. expected returns in relation to the risk free rate. Here's a hypothetical scenario/question: Let's say interest rates rise 3% over the next 5 years and stock valuations are similar to today's based on PE. What d...

My gripe with these "expected return" discussion is, what stocks? The 0.3/0.3 US allocation I mentioned above outpaced TSM by almost 250 bps over this period. So were now talking about a Tilted Stock ERP of almost 7% for this stretch, and 8% real that everyone seems to scoff at. And what ...

^ That's a good question. Rick, care to expand? My guess is that he expects interest rates to rise at some point in the forseeable future and inflation to be tame.

Ok, so assuming those are real return figures, does that sound reasonable going forward, 8% real return for stocks and 2% for bonds? Best predictor of future stock returns is how "cheap" they are. Price/earnings ratio is pretty resonable right now, but there are a wide range of possibilti...

Domestic
0-0-0
3-4-3
50-31-10

International
2-3-4
31-19-14
13-7-6

Are large caps really necessary?

Here it is: http://www.irebal.com/docs/Opportunisti ... ancing.pdf

Look how bad the smaller bands perform relative to larger bands. RBD has small bands.

sscritic, Don't tell me Livesoft's got you too?! :) In order to have some $ to buy on a RBD that means you have to have some money in cash/bonds/something safe. There is an opportunity cost to doing that much akin to thinking your expected returns are higher with a 80:20 stock:bond allocation vs. a...

These really bad days will not matter for long term investors. Of course they do. If you can get an extra 1% every year for 40 years, what will the difference be? What do you get when you compound at x% and at (x+1)%? If 40 years isn't long enough for you, solve the problem using 50 years. Do you b...

For those of you that like to buy equities after a RBD - what is your definition of a Really Bad Day? Is it a certain percentage? S&P 500 was down 1.25% yesterday. I didn't make any purchases, but it looks like it will be down today also. I'm considering placing an order of US Total Market w/ s...

Thanks for the response. Ive read a ton of books. Just trying to iron out some wrinkles where I see things not making sense. Thanks Good to know. Check out this: https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations?cbdForceDomain=true More bonds = lower expected re...

And it seems to me having some mix of stock funds/bond funds INSIDE the Roth would give the best likelihood of that happening, no? No. The highest expected returns comes from 100% equities. Type of equities matter as well. IMO, I envision different asset classes with different "spray patterns&...

@grap0013, I think I'm a clever guy, but I find it hard to buy DGS, EWX, VWO at March 2009 prices with my 2011 and 2012 Roth IRA contributions. Yes that could be difficult even for the sharpest investors. :) Here's some old DGS prices for example and their gains since: (based on today's last price ...

But what about folks who bought DGS, PXSV, VEIEX after 2008. Say in April-May 2011? :) Ha! Very true! It is much better to have the kahonas to buy at real depressed prices. That way, with inevitable subsequent crashes you won't feel too bad as crash prices still might not even come close to your bu...