Bogleheads.org

connya, I believe that everything you said is correct. Some other things to google are "pure expectations theory" and "liquidity premium" with regards to bonds. Those two should help you round out your thoughts. I think the correct statement is that the barbell outperforms when ...

Hmm...that's very interesting. Thanks for posting. So for 1926-2012 (an 87 year period) Long corporates outperformed treasuries by 50 bps while for 1973-mid 2013 (say a 40 year period) they outperformed treasuries by just 10 bps. So long corporates may perhaps have decently outperformed treasuries ...

So does adjusting AA according to valuation count as market timing? For example if I have a rule that if PE/10 > 40 decrease allocation to stocks by 30% Good question. You are obviously referring to this chart, right http://www.econ.yale.edu/~shiller/data/ie_data.xls The shiller pe10 hit 40 in Janu...

I'll discuss the two maturities you mentioned and advance some hypotheses, in the form of a hypothetical discussion between the issuer, the bond underwiter, institutional investors and (clueless) retail investors ... Great story line. When does the movie come out? :beer Thanks Doc! "Never unde...

Here's another example of a bond barbell that I like. Instead of buying the Vanguard Intermediate Tax Exempt bond fund with a yield of 3.21% and a duration of 5.6, buy an 80/20 mix of the Vanguard Long Term Tax Exempt bond fund (yield 4.02%, duration =7.0) and an FDIC insured savings account (pre-t...

http://www.nytimes.com/2013/05/19/business/for-stock-picking-advice-dont-ask-an-economist.html?_r=0 ... Nice article in the Sunday NY times on indexing by Mankiw. He refers to some interesting research by Shiller from 1981 http://www.jstor.org/discover/10.2307/1802789?uid=3739832&uid=2&uid=4...

rustymutt wrote:

Taylor Larimore wrote:Eric:

Healthy skepticism is good -- it's important also to keep that skepticism from degenerating into ad hominem argument.

Excellent point.

Thank you and best wishes.
Taylor

Plus one. Thank you people.

thanks rustymutt

LadyGeek wrote:The complete list is in the wiki: Grok's tips

thanks LadyGeek!

berg, I agree w/ everyone else to sell your RSUs ASAP. Count yourself lucky that they've outpaced the market so far. Check out this thread for "grok's rule of thumb" for when to exercise options. I've found it very helpful. Note the "rule" definitely is on the conservative side ...

Foreign Bonds may make sense right now for many U.S investors since the yield on high quality Intermediate Term bond funds are at around 1.5%, and similar quality foreign bond funds are yielding slightly higher, say 2%. Besides, there is country diversification in that foreign bond funds are invest...

Apologizing in advance if my question displays too much ignorance, but I was wondering whether purchasing an existing-issue bond at a premium and holding it to maturity will result in a capital loss at the time it matures, and if so, whether this factor is generally priced into the premium of the b...

All data below from M*: http://globalquote.morningstar.com/globalcomponent/GenerateFundChart.ashx?chart=quote&w=955&h=266&lan=en-US&reg=USA&tc=CU$$$$$USD&d=false&r=false&p=false&win=3&period=custom&range=1913-5-18|2013-5-18&cfg=scale:1|GF:7&ma...

Hmm...that's very interesting. Thanks for posting. So for 1926-2012 (an 87 year period) Long corporates outperformed treasuries by 50 bps while for 1973-mid 2013 (say a 40 year period) they outperformed treasuries by just 10 bps. So long corporates may perhaps have decently outperformed treasuries ...

In the United States, bonds lost about 50% in real value from about 1940 to 1980, mostly in two bursts: postwar inflation, and the double-digit inflation of the late 1970s and early 1980s. I still can't figure out how to get Excel to do a decent log axis, but the grid lines are at 1, 2, 3, 4, 5, an...

Over the past 40 years, the average annual return since inception of the Barclays long term corporate bond index was 8.88%.  Not too shabby. But wait- what was the return over the same period of the long-term treasury index? You guessed it, almost exactly the same, it clocked in at 8.78%. And of co...

I'm writing this on my phone, making it hard to organize my post. If it looks scrambled, I'll fix it on my computer later. I'm a 48 years old non US investor with a 7 figure portfolio (usd) in 100% equities (almost all invested in an index fund tracking MSCI World) My plan is to keep it this way, b...

Forget your 401(k) plan. The big money today is building nest eggs on everything from show horses to rock bands http://online.wsj.com/article/SB10001424127887323372504578467133425317620.html This paper has not got its reader's best interest at heart. I just don't think they are a credible source. a...

I'll be interested to see how the two different coupons price. According to the logic i laid out, the higher coupon bond should price so as to give a slightly lower yield to maturity. The reason that you are seeing the same YTM right now is that the bonds haven't priced yet so they don't really kno...

I will take a stab at paraphrasing Mr. Bogle's comments ...He discussed corporate bonds on at least two different occasions.. in one he pointed out that the aggregate bond index has become over-weighted in treasuries due to QE, and no longer accurately reflected the composition of the total bond ma...

it doesn't really work that way. You are generally not going to be able to take a capital loss because the cost basis of the bond will adjust downward (amortize downward) over time. It's possible if interest rates spike and you sell before maturity that you might be able to take a capital loss. But...

Thanks, Grok. Yes, I was talking about munis, and the reason the question arose is because I was recently looking at an offering that was just the situation you described: a choice between two Cal GO bonds maturing on the same date, one with a 3% coupon and one with a 5% coupon, and both supposedly...

Hi, i ;m looking at a breakable 10 year cd at 1.95 from discover bank. their fine print says to break it early is 15 months of interest . any opinions In general you want to make sure, in the fine print, that you have the right to break the cd. Some banks have weasel words in their disclosure that ...

Apologizing in advance if my question displays too much ignorance, but I was wondering whether purchasing an existing-issue bond at a premium and holding it to maturity will result in a capital loss at the time it matures, and if so, whether this factor is generally priced into the premium of the b...

I can prove that today's market is a stock picker's market. In the Bogleheads Hedge Fund contest ( http://libra-investments.com/hf/bh.html ), participant "Mudpuppy" has picked a stock that is up 142.1% for the year. That was a good one to pick. Mudpuppy is handily beating the benchmark (V...

Since we are making predictions

I predict the foreign developed hedged bond fund will have a yield of 1.4% and a duration of 6.75%

Grok, On the topic of tip #7, is Vanguard's decision to include foreign bonds in TR funds justified? Thanks, Brad Hi Brad, It's a good question. I'm kind of waiting for the fund to come out and see the stats before I do some more analysis on the issue. I think the EM USD fund is out so presumably t...

You have to use the treasury rate that's equivalent to your time remaining. 10 yr treasuries are at 1.97% right now. I think I modified that down to ~1.8% to get to a 9 year estimate. Also, the denominator is the ratio - 1 so in your example it is now 0.375 not 1.375 Agree. So the formula math is: ...

One of the issues with ordering things delivered by UPS or FedEx, is the issue with packages being left on porches, etc. Amazon usually uses UPS, in my experience. I just ordered (and received yesterday) something in a small package (size of a hardback book), and used the new delivery address that ...

jginseattle wrote:Only short-term credits have sufficiently rewarded investors. But, as Ilmanen says, they're risky with the worst losses occurring during bad times.

Agree.

Question to Grok: why do you think does Jack Bogle recommend intermediate to long corporate bonds? Hi Munir, I was not aware that he recommended long corporate bonds. Do you have a source/reference? cheers, Hi grok, I did a quick forum search. Here's a recent thread: Bogle again calls for a total c...

Hi, Munir, I don't think Jack Bogle went so far as to recommend long corporates. He's been advocating a true corporate index fund and he's advocated an institutional share class of intermediate corporates specifically. I think Grok is talking about true long bonds; for example, the estimated durati...

Thank you grok! Very timely and useful IMO! Hope this will be an interesting thread and I recently was wondering under what cases would folks here recommend investing in these. Regarding reasons - Swensen, in his book, describes why to avoid any corporate bonds, and one basic reason is that it is n...

Munir wrote:Question to Grok: why do you think does Jack Bogle recommend intermediate to long corporate bonds?

Hi Munir,
I was not aware that he recommended long corporate bonds. Do you have a source/reference?
cheers,

tip 14 is out
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Grok's Tip #14: Avoid long-term corporate bonds It's a tough fixed income investing environment out there, no question. Bond yields are brutally low with the 10 year treasury yield under 2% and t-bills yielding 0%. There has been a lot of talk about corporate bonds, and in particular some may think ...

Article does not say anything about "current yield". I guess they would not have that number until they'd actually start buying bonds. But without having that number, we don't know what is the potential "reward" is in "risk / reward" equation. For a SWAG I would guess ...

Article does not say anything about "current yield". I guess they would not have that number until they'd actually start buying bonds. But without having that number, we don't know what is the potential "reward" is in "risk / reward" equation. For a SWAG I would guess ...

I was speaking with a high school student the other day who mentioned one of the projects in his consumer ed class was to evaluate the students stock picking abilities. Each student was given $100,000 in fake money to see what they could earn by picking stocks over a 3 month period. They are graded...