Bogleheads.org

You're really saying "blind adherence to an index has costs" not "using an index hurts". I don't think trading costs and liquidity costs are an issues except for microcaps (>99% of market cap space). DFA is heavily invest in the microcap area both in the US and internationally. I...

They're waiting until the ETF trades settle, i.e, you actually get the money from the person you sold your ETFs to. This takes 3 business days. This is normal.

I've been using book value in the accounting sense (as should have been clear from my posts): "In accounting, book value or carrying value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any deprecia...

Thanks. For the time being I think I can use Bloomberg for what I'm looking to do. By the way, for P/B, P/E and dividend yield for entire markets I use MSCI factsheets which are updated monthly (a couple of business days after month-end). The iShares ETF data don't match and are strangely higher for...

I'm trying to find a good, reliable source for basic financial data (P/B,P/E, dividend yield, etc.) for foreign equities including those that don't have ADRs in the US. I guess the de-facto sources are Bloomberg and Yahoo, but I was wondering if there was anything better. It doesn't have to be a fre...

You may want to also consider the Honey extension for Chrome. It is helpful on certain sites, like Amazon (so browse to Amazon using the Bogleheads referral link, select your products, then at checkout, have Honey automatically check for coupon codes). http://joinhoney.com/ Good link, thanks. The w...

VGTSX contains the market weighting of Emerging Markets with respect to all international(non-US) Markets. You won't have the "worldwide" or global weighting for EM because you're holding 50/50 US/International which slightly overweights the US. The US market weight is 47.4% as of last mon...

Larry, The factors of value and size ARE included in the total market portfolio and they help make up “market beta”. They are held in the same proportion as they exist “in total” of all marketable securities. Now if we follow your suggestion and add more (tilt/overweight) SCV we will pick up more s...

I would probably split the difference, investing immediately in the bond and international equity portion of your portfolio and then DCA-ing the US equity portion, where valuations are higher.

I understand that, but I have a problem with the underlying assumption that we know the fundamentals. And if we don't know the fundamentals we can't isolate the stocks that are priced low relative to the fundamentals. Book value at its very basic is assets minus liabilities. Putting aside financial...

Your proposed asset allocation is way too aggressive for the situation. A 90/10 portfolio would have lost about 50% in 2008-2009. Would your mother really be able to handle seeing the portfolio drop to $3.5 million? I doubt it and you would end up selling out during the market downturn and decimatin...

DC is expensive. Hotels there don't often offer discounts because they don't have to; their rooms are full regardless of discounts. That being said, you should be able to find a good room for less than $400. Try the Grand Hyatt. It's a huge conference hotel, but I've had luck finding rooms there fo...

Thank you for the reference. The article makes the case of why Vanguard is hedging currencies for its international bond funds. The chart you mentioned above shows addition to the volatility, not to return. I wonder how it affects both, volatility AND how it affects the returns and whether much of ...

If you're in the accumulation stage it doesn't make a significant impact on your returns. Over the long term, the dollar vs. other currencies has a zero expected return and since equities are already volatile the added volatility of currency exchange rates doesn't add much volatility to a hedged int...

I just happened to see this article which is relevant to the thread. “Why do people love dividends? Because they don’t understand either corporate finance or taxes.” At this point people either understand or they don't. The good thing is that as long as they are properly diversified they aren't doin...

I think the point is that the income is fixed dollars and the share price is variable. When the market drop 30% you still get your dividend in the same number of dollars as before, but when you sell shares you need to sell 42% more shares to get your income. ... It is assumed that in the first case...

I wouldn't get too worried about this. It's most likely due to the fact that not very many of these small companies distribute dividends quarterly. If we look at the distributions from last year we see: Dividend $1.95000 12/24/2012 Dividend $0.75500 09/26/2012 Last year was a special case where Vang...

There's not a lot of real difference between Option 1 and Option 2. Some version of Option 1 is better than Option 2 because you won't have assets sitting in cash. Option 1 is rebalancing; it's just slower than actually selling one asset to purchase another. What you can do is just monitor your port...

I'm not sure I understand what the benefit is in using a microcap fund. If you want to tilt to small/value it seems like a more efficient way to do it is with a TSM/SCV mix. With the increased costs in terms of higher expense ratio and increased tracking error what is the argument for using a separa...

A quick back of the envelope calculation shows that starting at 150k today and adding 22.5k yearly with increases due to inflation shows final account values (in today's dollars) in 18 years of: 2% Real return: 696k (27k yearly income with 4% withdrawal) 3% Real return: 782k 4% Real return: 881k (35...

It looks like the Russell Fundamental index series is equivalent to the FTSE RAFI Fundamental series so I don't think these new ETFs represent anything new in terms of market exposure. For example, “FNDB” Russell Fundamental U.S. Index = mix of PRF/PRFZ “FNDX” Russell Fundamental U.S. Large Company ...

This isn't the best, or even a good, way of valuing stock markets. The more traditional metrics like price to book or price to eanings are more appropriate. 4. Sometimes, a company in smaller country becomes a multinational; think Samsung. It then would get dropped from the single country indices so...

You're modelling the 401k opportunity cost wrong or at least there's another way to do it. If you take the loan from the bond portion of your portfolio, meaning that the stock/bond ratio in your 401k increases throughout the life of the loan, then the expected return should only be that of total bon...

This is silly. If we look at Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) since its inception on 4/27/93:
VTSMX: 8.73%
Index: 8.87%

That 0.14% difference, over 20 years, is less than the expense ratio.

In my opinion, this guy loses credibility making claims like these.

We need more information about where you're getting the return data. Are you calculating your ytd return yourself? If you take your Dec 31 balance and your Feb 28 balance it shoul exactly match the reported YTD return through Feb reported by the fund. If you're using tools than any number of issues ...

The main lever to increase returns without taking on unsystematic risk is your stock/bond allocation. In addition, there are those that follow the research showing additional premiums for value and small stock and own a higher percentage of these stocks. You said you're quite young, so at this point...

Any idea on what low real rates mean for the value and small cap premia? Would these be expected to be lower as well?

How are you calculating the sources of returns, particularly the international diversification part? I would like to add this capability to my portfolio tracking spreadsheet.

If you don't have funds to otherwise fill the Roth IRA it seems like a no-brainer to have your emergency fund in the Roth. I would invest pretty conservatively to start, like the Vanguard Retirement Income fund that's 30% stocks. That way even if stocks drop 50% you're only looking at a 15% drop in ...

There aren't many cars that meet your specifications. You're not going to find a V6 in a car shorter than the Accord nowadays. Everyone is going towards turbo 4 cylinders. Additionally, you're looking for a car with performance characteristics but don't want a manual transmission. Some cars that I w...

Take it to a casino's roulette table and wait for a long pattern of consecutive black or red colors to show up. I'm talking 20 colors or more. You could be in there all day, or even all weekend. Now bet 50k on the opposite color. If you lose, bet 150k. If you lose again, bet 250k. If you lose again...

Dodge & Cox International is not too bad of a fund. You could put that in your 401K and buy more Extended Market in the IRA. Or you could put PIMCO Total Return in the 401K in place of Total Bond in IRA. This seems to be the best approach. You have decent funds for international developed and b...

Are there any Frontier Markets ETFs/funds that break it down into Large vs Small and Value vs Balanced? Seriously? Frontier markets are a tiny,tiny portion of the global investment universe. It's hard enough to create a fund to invest in the entire frontier market, let alone trying to carve it up i...

Good article. It seems like the moral of this story is that everyone should get quotes from GEICO and State Farm when buying auto insurance.

Thank you for posting these numbers. It is interesting that the no rebalance and the monthly rebalance both get back to even (2.0) at the same time and then stay roughly equal for the next five months. Rebalancing only pulls away after 9/30/10. 04/30/2010 1.74 2.01 2.00 09/30/2010 1.68 2.05 2.06 Si...

I am curious. Did you run your numbers through a rebalancing machine? Say start at 50/50 and rebalance at the end of every month. As the stock market falls, you will be buying more and more shares of stock (and watching them fall even more); when the market turns, you will be selling your shares as...

I believe you may be looking at price data, not total return data. Yes, that's because when I rebalance, I have to sell my shares at a price, I don't get to sell them at a total return. The same thing holds when I buy shares, I pay a price, not a return. But I assume your bond fund pays interest an...

Gov't bonds didn't fall in 2008/2009. Intermediate Treasuries w ere up 10% from before the crash to the market low . Even Total Bond was up about 5%. 01/23/2008 $11.14 12/15/2008 $9.92 That was just one government, the one I know about. P.S. How do you go up to a low? Sure, pick an advantageous sta...

I didn't claim I could tell you. I just said that "forces you to sell high and buy low" is too simplistic. Sometimes rebalancing takes the form of "sell low but buy lower" and sometimes the form of "buy high but sell higher." Neither of these is "sell high buy low...

Like everybody is saying, it keeps the risk/return profile of your investments stable. This of course assumes that you have a target asset allocation. Another good reason for having a fixed, rule-based rebalancing is that is stops you from tinkering and/or overthinking your portfolio decisions in vo...

1. The DCA idea is more to reduce the chances that you'll regret your decisions if stocks selloff in the next month or two. How are you going to feel if stocks drop 20-30% next month? If you can deal with it go ahead and invest it all now. If not, DCA might be the way to go. 2. Your asset allocation...

This only works for price changes for stocks currently in the respective indices. As companies go private, go public or switch from one index to another (Chinese company buys American company) the total market capitalization of the respective markets will change but the index values won't change. So...

This is probably a waste of time except for possibly the TV and the computer if it's older. Nothing on your list is going to draw much standby power except for these two. If you want you to have some fun, you can buy an EZWatt meter for about $20 and see how much energy each device is using. You'll ...

There's a wiki page that discusses this: Tax-Adjusted Asset Allocation . In my own spreadsheet, I have columns that show my both my regular and tax-adjusted AA. I have found that, at least with my portfolio, the tax-adjusted numbers don't amount to much of a difference, so I haven't worried about i...

Option 3 is more depressing though! You're right, it doesn't matter if both 401k and Roth IRA are invested in Target Retirement funds for example, but I do have a tilt. In addition, my approach is to put the asset class(es) with higher expected returns in the Roth so that it grows faster relative to...

It's way too many. Even if you slice-and-dice the most you need is like 8-9. This seems to be Fidelity's MO. Look at the components of their Target Retirment funds below: I think it may be a strategy to keep funds flowing into some of their smaller and/or active funds. https://fundresearch.fidelity....

I'm trying to figure out how to allocate my retirement savings between my traditional 401k and Roth IRA. The main question is whether I should consider all my savings on a post-tax basis when doing my asset allocation or not? In other words, if I assume that I will have to pay an 18% rate overall on...

On the face of it, I would say you couldn't afford it, but you have some very positive factors in your advantage: 1. As others have said, you're pretty much set in terms of retirement savings. The only thing I would do would contribute enough to your 401k to get any match, hopefully only 3-4%. 2. No...

The first thing would probably be to get non-owner liability coverage added to your home owner's insurance policy. Then you can get the umbrella insurance. I believe you do need some sort of primary insurance before getting the umbrella policy, but I'm no expert. I would just call GEICO and a couple...

Can you afford to contribute $1458/month AFTER tax? If so, you can do both. On an after-tax basis, assuming 5% state/local income tax the $1458/month 401k contribution is $977. That means you have $481/month in after-tax money to max out the Roth IRA as well. If you can contribute $1458 on an PRE-ta...