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Many answers on this thread suggest that if economy improves, so should the stock market. It's not necessarily clear why that has to be the case though. There are at least 2 reasons why this link may not be true I suspect: (1) Stock market indexes we own is just part of the economy. So if privately ...

Good question. I am sure others will have much better answers... My thoughts are... Over long (not short) periods of time, market reflects corporate dividend flows (and buybacks since number of outstanding shares is then reduced) to their owners. IF economies expand, and actually more specifically, ...

After considering this for a while and cringing and all, I finally decided to go with 2% 5yr NON-IRA (i.e. regular) CDs at Mountain America Credit Union (instead of an ~A-rated 6yr duration muni bond fund with ~1% extra sec yield after-tax)... The process of setting this up was simple: Day 1: filled...

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 no...

For everyone else. There is a consistent error in "terminology" made here regarding the FF model. The model never explained 90%+ of returns. What it does is explain 90%+ of the variance in returns between WELL DIVERSIFIED portfolios. The smaller the number of issues in the portfolio the m...

livesoft / sammy - thanks for the tip on IJS instead of VBR for taxable! I will take a closer look at its tax consequences. I could not find on iShares site where they list the percentage of qualified dividends. I did find on M* site however, under "Taxes" subtab, that IJS appears to lose...

Thank you Grabiner, you are right! I updated my spreadsheet to reflect all numbers correctly. I also added a few prior years, more symbols, and a summary section, according to which Taxable to tax-deferred ordering: VEA, VWO, VTI, [VBR / VXUS], [VTV / VSS] VXUS vs VBR: in lower brackets, VXUS is sim...

Thanks grabiner - I am curious what you voted (or what your answer is if you did not vote).

It should be Foreign tax = Income dividend* × 0.066257 Foreign income = Total foreign tax × 16.09270 QDI-eligible foreign income = Total foreign tax × 15 .09270 "Foreign income" number is right - it includes both distribution AND the foreign tax paid. "QDI" number is wrong becau...

@stratton: here we are talking about a muni fund that has ~50% having rating A (rest are spread around with some tendency towards AA) @G-Money: CD would be held in taxable, just like muni fund, but note that the question is already asking about after-tax spread. Muni-fund probably contains both call...

So, as Clearly_Irrational noted, FF "explained" 98.6% of the returns. Larry indicates now there is a better set of factors that explains some "anomalies" in FF model and therefore is "better" in some sense. Question is: for investors that bought into 3-factor investment...

Another one of the bonds vs CDs threads made me wonder how Bogleheads price risk in the FI part of the portfolio. Today, we have an option of a 5-year CD vs ~6yr duration ~A-rated quality muni fund with approximately X% in difference between after-tax SEC return and after-tax CD return. At which (m...

Hi klj1789, and welcome to the board. There are a few issues with this analysis: - As your stocks grow in Roth account, your overall portfolio becomes more and more stock-heavy and thus more risky with wider variations / higher risk. You have to control for risk (e.g. via modeling in appropriate reb...

Hi Grabiner, you are half right - one of the numbers is wrong and the other one is right. If you are interested in details on how these numbers are used, I use analogous ones in the spreadsheet I had posted earlier in https://docs.google.com/spreadsheet/ccc?key=0ArGaNpTAPEwedE8yWUl4dUNrRlE3U0VJYjlkO...

I've been thinking about this topic recently... Looking at today's rates, we are comparing ~2% 5-year CD with - Treasuries: SEC yield all under 2% (except long terms ones: 2.68%) - SEC yield for intermediate corporates (VCIT): 2.52% - Munis: SEC yield 1.62% (vs ~1.2% for the CD in high tax bracket) ...

I overweight developed large-cap compared to the equal-cost allocation; not only is Tax-Managed International relatively inexpensive, but it also has 100% qualified dividends, taxed at 15% rather than 28%, which has the same benefit as a lower expense ratio. I've been looking at VEA vs VXUS as well...

Thanks a lot, rkhusky! I bet you are right! Can't really rely on any data out there (including Vanguard's)... sigh! Wonder how many of such other typos are out there... Only reason I caught this was because it happened to be at the boundary and so it did not make sense when it crossed the boundary, ...

UPDATE (May 16'13) : Vanguard numbers turned out to be correct (Thanks, Grabiner!). I updated my spreadsheet accordingly. Original post: According to https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/taxcenter/prioryeartaxdata/article?file=IWE_TaxManIntlFund2012 , for 2012 Foreign ta...

livesoft / sammy - thanks for the tip on IJS instead of VBR for taxable! I will take a closer look at its tax consequences. (Sammy, VSS is by far least tax efficient for taxable account from my calculations - less than vbr or even vtv) livesoft, regarding muni-bonds making more room in tax-advantage...

Thank you for all the replies, folks. Very interesting thoughts! Grabiner, for your size tilt, what do you use? Specifically, I wonder if the fund you use is SV or also includes SG... SG part of "Small" spectrum seems "scary" to me based on various reading but perhaps it should n...

Question for tilting crowd: for folks whose bond allocation significantly exceeds tax-advantages space (i.e. it's that space is 100% filled with bonds), or to make things easier, with no tax advantaged space at all... would you still recommend tilting and to what degree (vs. if tax-advantaged space ...

Volume of VBR today is > 75,000 shares so far. 1. I would not trade more than 5,000 shares at a time. Less than that has been OK for me, but sometimes I break that into smaller orders. I use real-time Level II quotes to see the order book and make a decision based on the number of shares offered fo...

I've been looking for some tilt with ETFs often mentioned around here, and I wonder how folks actually make use of these. For example, looking at VBR today, according to Vanguard site it traded only ~9k shares today (it's around 3pm now) but it says average volume is ~150,000 shares. Yahoo indicates...

Hi BlueEars, I think your chart in that other discussion is quite telling. Dollar strength was bumpy but overall it trended down over last 30 years. If this trend happens to reverse and dollar strengthens for the next 30 years, then every dollar in international fund exposure you have today, in 30 y...

I am able to use BrokerageLink with my Fidelity account, so I have been investing most of the money into the Spartan funds. Just curious, which Spartan funds do you use (I am guessing it's because they are cheaper than Vangaurd's equivalents at Fidelity?) Regarding your original question, I will jo...

the key is to understand that HNW investors have low marginal utility of wealth, thus little/no need to take risk---my line to them is "if you have already won the game, why are you still playing?" thus when presented with that understanding I've found most will lower their equity allocat...

learning head But the spread between the metrics can narrow and widen, and of course do. And in fact as you would predict logically, wider spreads predicts larger value premiums and vice versa, but by definition the spread is never zero and thus there is always an ex ante value premium, which is wh...

Thank you to all the responders.

it will go away and thus you should buy the value stocks TODAY before their prices rise to eliminate the free lunch unless of course it already went away and value is overpriced compared to growth today... ? But we know that isn't true because the spread between value and growth stocks in terms of ...

larryswedroe wrote:it will go away and thus you should buy the value stocks TODAY before their prices rise to eliminate the free lunch

unless of course it already went away and value is overpriced compared to growth today... ?

But as has been mentioned, they already comprise about 10% of SV, so in my example above, technically we already were 36% in small value and 4% in REIT, the 10% stand along position would be 13% total. Eric, this is an old thread that I resurrected with the point that the part of REITs that comes f...

Very nice spreadsheet! One thing to point out (edit: I see you already did the same at the end of your post) - if you leave a job before taxable account option overtakes 401k option, you can convert 401k to free IRA account. In other words, expenses in 401k may decrease over time (either due to chan...

@dm200: I am not speculating, but trying to ask a question as subject of the OP implies. I am happy to learn that it's not true, or hear an explanation that it's true but with limitations that explain why the banks would have to offer CDs. Not sure how applicable these are, but I do see current 0.25...

I recall some threads referring to ability of banks (credit unions?) to cheaply borrow from the government at ~0% rates. My questions is: why do they need to offer CDs with higher rates than what ~ treasuries pay? If you were to run a bank tomorrow, what motivation would you have to offer any CD pro...

I'm at 70% stocks, 60% of that domestic, and 40% of my domestic equity is in Vanguard small cap value index (60% TSM). Of my total portfolio, TSM is 25% and SCV is 17%. From this link, which I'm not sure is still accurate (it's not too recent), it appears that REITs make up about 2% of TSM and abou...

I think Alice and Bob should get together and save on their payments :-) On a more serious note, I don't think Alice and Bob should have same asset allocation necessarily. Alice has home equity asset and Bob does not. Whether or not Bob's expenses are higher than Alice's (and note: it could be in re...

Did you all scold and fuss at Mr. Swedroe for printing the above statement in his nationally published moneywatch blog/post?? I did not, but other people did in the thread I told you about. Also, Larry responded to this thread already - I don't see him pointing you to any metrics that would help wi...

xram, If anyone were to answer your exact question about valuation metrics, they would have to imply that they believe that - the markets are not efficient and are undervaluing some assets vs others; - there are ways (read: "valuation metrics") of determining such undervalued assets; and -...

If Bungalow10 has 2 529 plans (one with each of his children as beneficiaries), with a total of $100,000, over the course of the 4 years of college depending upon a bunch of factors, this may cost his $20,000 in financial aid. That is the exact same result as having the money just sitting in mutual...

I guess I can see how the linked thread / poll is asking about S OR V for tilt even though it said "SV fund" in the Poll title... To me "SV fund" means small AND value fund, but "SV tilt" could mean AND or OR (in fact OR is more likely I think). People answering the que...

Diversification will not solve this problem. Whole market can go up and down fast around 4pm. So even if a fund owns many stocks, it could still leave you in a situation where you (as mutual fund manager) have to buy/sell stocks to satisfy 4pm NAV net redemptions / buy orders at prices that are quit...

Hi Nonnie, whether you use dividends or sell assets to reach your 2% WR should not matter. I *suspect* your quoted "common wisdom" has its roots in that when people sell capital (a) it could be an indication that their interest/dividends are so low that overall portfolio is not large enoug...

Thanks psteinx! So, in my original example then, say the mutual fund had $0 in cash, and just as many fund shares as stock shares (i.e. 1 million). The buy/sell requests are for fund shares, not for underlying stock shares. So in my example, - at 4pm, the fund has $100 * 1M = $100Million in net asse...

learninghead First, obviously there must be some unexplained portion or there would be no risk in investing in stocks would there? And if that was the case there would be no risk premium either Second, the reason you likely don't see others is that they were tried and have low explanatory power. Pr...

OK, this is my perhaps not so well informed position. 1) These days, mutual fund companies are supposed to process buys/sells for a given day only up to 4:00 pm Eastern for that day. So, if you buy/sell at 3:59 pm on Thursday, you get Thursday's close. If you put in a buy/sell at 4:01 pm, you get F...

Here is what I would suggest (likely others will have better suggestions): (1) Try to guess your risk tolerance based on online resources (e.g. fill out online questioners, check out a couple books - e.g. in Rick Ferri's "All About Asset Allocation", as I recall, there is a chapter on how ...

I have a basic question about how open-ended mutual funds operate... Say there is a mutual fund "FooFund" that only has shares of one company, FooBar, and it closes today at $100.00 per share at 4:00 pm. The FooFund owns 1 million shares of FooBar. At the end of the day, the fund totals up...

It's the numerator that matters in valuation equations, not the denominator. Any fluctuating numerator (index price) and relatively stable denominator (chewing gum cost) is going to give you the same predictive result as CAPE. I think this is an interesting observation... So, Price / PE10 explains ...

Sure think of the R2k which underperforms the similar CRSP 6-10 index by like 2% a year because its transparency allows active managers to exploit it by front running Same thing with CCF. Futures contracts in indices roll 20% for each day of a specific week. Just avoiding those days can easily add ...