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Re: Stocks better value than two weeks ago?

YES - Paying 35x, 25x or 20x Earnings of the S&P 500 is obviously "better value" at 20x when you already witnessed the decrease. NO - Paying 20x is not necessarily better as measured to the unknown. The last 2 weeks are not proxy for the unknown. If you pay 20x for the unknown and I p...
by markierussell
Thu Aug 11, 2011 5:50 am
 
Forum: Investing - Theory, News & General
Topic: Stocks better value than two weeks ago?
Replies: 60
Views: 6518

NO - Paying 20x is not necessarily better as measured to the unknown. The last 2 weeks are not proxy for the unknown. If you pay 20x for the unknown and I pay 19x for the same unknown, I am in better shape regardless of what that unknown turns out to be. Agreed. I think some of us do not like to fa...
by markierussell
Wed Aug 10, 2011 1:53 am
 
Forum: Investing - Theory, News & General
Topic: Stocks better value than two weeks ago?
Replies: 60
Views: 6518

Correction. Otar is comparing 5 months moving average not 5 day. Sam Sam, thank you, you're right. He plots 5 months (not days) against 12 months. I think the principle and analysis remain the same, though. Incidentally, does anyone know a free website that offers easy charting of the 5 month and 1...
by markierussell
Wed Aug 10, 2011 12:41 am
 
Forum: Investing - Theory, News & General
Topic: Otar's "storm warning" approach
Replies: 18
Views: 3082

If anyone can find some studies showing this out performance I would be interested in seeing them. As I recall, Otar isn't necessarily claiming out-performance. He's only claiming that if the market drops 90% (like it did in the early 30s), you won't have to eat catfood or move in with the relative...
by markierussell
Tue Aug 09, 2011 11:44 pm
 
Forum: Investing - Theory, News & General
Topic: Otar's "storm warning" approach
Replies: 18
Views: 3082

If there was a sure fire way to market time accurately. It would have been found out by now. To be fair to Otar, he doesn't say his method is sure-fire. He says it is a way to decrease the likelihood of investing on the verge of a strong downturn and to increase the likelihood of better long term r...
by markierussell
Tue Aug 09, 2011 2:15 am
 
Forum: Investing - Theory, News & General
Topic: Otar's "storm warning" approach
Replies: 18
Views: 3082

Otar's "storm warning" approach

I raised this in another string but I'm inviting broader comment as it seems very timely. Jim Otar, whose book has received a lot of favourable comment on this site, advocates an equity investment approach for turbulent times using moving averages: when the 5 month moving average goes below the 12 m...
by markierussell
Tue Aug 09, 2011 1:37 am
 
Forum: Investing - Theory, News & General
Topic: Otar's "storm warning" approach
Replies: 18
Views: 3082

Re: Stocks better value than two weeks ago?

Anyone's ideas about value are immaterial to the question. The question was not are stocks a good buy. The question is are they a better buy now vs a week (or so) ago. From here on out, good, bad or indifferent stocks will do what they do. Any profit or loss from this day forward is independent of ...
by markierussell
Tue Aug 09, 2011 1:22 am
 
Forum: Investing - Theory, News & General
Topic: Stocks better value than two weeks ago?
Replies: 60
Views: 6518

Surely when the price goes down and the item has not changed intrinsically, you are getting better value. Ask yourself: if you were for some reason compelled to buy shares, would you rather have bought them 2 weeks ago or now? Obviously now. And how could that be the case if you thought the value ha...
by markierussell
Mon Aug 08, 2011 10:53 am
 
Forum: Investing - Theory, News & General
Topic: Stocks better value than two weeks ago?
Replies: 60
Views: 6518

Re: Calling the bottom

Jim Otar, who has had a lot of favourable comment on this site, advocates an approach using moving averages: when the 5 day moving average goes below the 12 month moving average, he considers it a "storm warning" and suggests reducing equity exposure. Then wait until the 5 day average goes...
by markierussell
Mon Aug 08, 2011 10:34 am
 
Forum: Investing - Theory, News & General
Topic: Calling the bottom
Replies: 48
Views: 4628

Pocketplayer, thanks. I'm aiming at 3.5% withdrawal rate. I don't see how I can rely only on fixed inc. to get me there. So it seems I need equities or annuities as well. Or do you think fixed inc. will do the trick? The poster who said I've been doing "pretty darn well" without equities i...
by markierussell
Fri Mar 25, 2011 10:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

But if you do worry about bonds, then go with CDs, and DCA into bonds as well.. The main thing is to read some of the good books... Four Pillars of Investing is very good... Random Walk down Wall Street is good. There's no rush... take a couple of years to go from 100% CDs to 25/50/25 stocks/bonds/...
by markierussell
Wed Mar 23, 2011 10:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

When I first posted the question I was thinking of DCA in terms of more like a 3-4 year process of ramping up to 40%. But most of the replies seem to have assumed that even if DCA is adopted, it would be done within one year at most. To me that is a pretty short period and doesn't seem to really mee...
by markierussell
Wed Mar 23, 2011 9:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Edit: I re-read your first post and discovered you are not "young" per se. I forgot which thread I was on. :oops: Haha right, I'm 57! Well, to me that's getting old, no doubt. But haven't been seriously investing very long so bit of a newbie for sure. And I guess I'm somewhat on the young...
by markierussell
Tue Mar 22, 2011 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

It's really an interesting debate and helpful to me in sorting out my own view, so thanks. On the one hand are the "true believers" in the market who do not fear lump sum, and on the other, the more cautious group who acknowledge their emotional, and very human, reluctance to wager a big w...
by markierussell
Tue Mar 22, 2011 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

I'm not against holding equities, although I'm sure I'm on the conservative side. I think maybe I have to read Otar more carefully. I saw where he said that suffering a loss in the first 4 years means you will never recover but I may have misunderstood the implication. It could be that with a withd...
by markierussell
Tue Mar 22, 2011 11:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Not to nitpick, but the right answer isn't do nothing. The right answer is to be disciplined and re balance into stocks. The worst thing is to dump your equities. I think everyone here may have some real-word experience in their tolerance of equities because of 2008-2009. I have the impression the ...
by markierussell
Mon Mar 21, 2011 7:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Let's say you have a million go 40/60. See stocks drop 30 percent, your nest egg loses $120,000 in the matter of a few months what are you going to do? Right = that of course is the big question! It's easy for people to say, oh just go lump sum but your scenario is quite possible and it's deadly. I...
by markierussell
Mon Mar 21, 2011 11:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Let's say you have a million go 40/60. See stocks drop 30 percent, your nest egg loses $120,000 in the matter of a few months what are you going to do? Right = that of course is the big question! It's easy for people to say, oh just go lump sum but your scenario is quite possible and it's deadly. I...
by markierussell
Mon Mar 21, 2011 10:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

It's really disturbing how the Canadian government punishes Canadians for investing in these U.S. securities. It's no different from how investments in overseas-based securities are treated and in some circumstances actually less "punishing." It's also not different from how US tax code &...
by markierussell
Mon Mar 21, 2011 9:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

1. All fund/ETF distributions from non-Canadian based sponsors are characterized as ordinary income. This means that capital gains and dividend distributions lose their tax advantages. ... 2. US-based funds/ETFs that invest overseas usually offer a flow-through tax credit on taxes withheld by forei...
by markierussell
Sun Mar 20, 2011 10:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

In case it matters, I am an NRA and do not pay tax on any investment income/gains other than dividends. I don't know if it matters. What is "an NRA"? Everyone else seems to know but I am clueless. Goggling tells me nothing but National Rifle Association. JW Haha sorry I should have used t...
by markierussell
Sun Mar 20, 2011 9:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

By the way, do you, as a Cdn resident, use a U.S. based online broker? I note TD Ameritrade isn't available to Cdn residents, not sure about others. While Canadians can't (easily) open US brokerage accounts we can buy US-based ETFs, including Vanguard's, from our Canadian brokerage accounts. While ...
by markierussell
Sun Mar 20, 2011 9:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

when you say for Cdn residents the 15% is recoverable as a credit I assume that's because you have to pay Cdn tax on the dividends so you can deduct the 15% to avoid double taxation, correct? Correct. Thanks! By the way, do you, as a Cdn resident, use a U.S. based online broker? I note TD Ameritrad...
by markierussell
Sun Mar 20, 2011 4:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

Again, thanks for lots of helpful comments. One point that I don't think anyone has answered (maybe cause it was a dumb question?) was whether DCA has any application to buying bonds, or more likely bond ETFs like BND. It seems to me that the same theory should apply. For instance, right now yields ...
by markierussell
Sun Mar 20, 2011 3:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

I am a Canadian citizen not living in the U.S. so I am a "non-resident alien" as defined in the U.S. tax code. Where are you resident? If you're in Canada then we have a tax treaty with the US that reduces the withholding tax to 15%. Go to the IRS website, grab a W8-BEN form, complete it ...
by markierussell
Sun Mar 20, 2011 3:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

Ptete, I have the same question as you, as I am (for U.S. purposes) a non-resident alien, investing through a U.S. online brokerage and do not want to suffer the 30% withholding tax they impose on dividends from ETFs. Have you found a good equity (preferably index) ETF that minimizes dividends? Che...
by markierussell
Fri Mar 18, 2011 10:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

Well at least you're looking to use Vanguard now. They are unlikely to go bust or be convicted of fraud. Guess what, I was investing in Vanguard before too (ETFs) but the problem is my online broker was based here in Bermuda (where I live and work) and they were the ones charged with fraud. That fr...
by markierussell
Thu Mar 17, 2011 10:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Here is a related study for your reading pleasure: http://www.fpanet.org/journal/CurrentIssue/TableofContents/ReturnMeasuresandDollarCostAveraging/ Thanks! Unfortunately my math is not quite up to some of this stuff but I think the main point of this paper is that sequence of returns is crucial and...
by markierussell
Thu Mar 17, 2011 9:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Question: Is this your first foray into equities or did you ever have a significant allocation to stocks in the past? Jacob - as I replied to Rob, I did start buying equities over the past decade but cautiously (probably not more than 20%), then had to bale when my broker tanked. Now tiptoeing back...
by markierussell
Thu Mar 17, 2011 9:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Going out on a limb... and say never in the case you describe. You got to 57 and now want to go to 60/40?? What has changed? I would say keep doing what you have been comfortable with. Rob - I'm in an unusual position I guess in that most of my net worth is from savings earned in the last 10 years ...
by markierussell
Thu Mar 17, 2011 9:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Lots of good feedback here, thanks. I agree a big factor is emotion, it's just hard to toss a lot of cash at the market when you feel it could fall soon. These days I really have a feeling that it's gonna drop significantly in the next year or so. It just seems that it is being buoyed up by all the ...
by markierussell
Wed Mar 16, 2011 9:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Re: Advice please - large cash holding, so when to invest?

[/quote] Here's a question. If you had the money invested at 40/60, would you take everything out into cash so that you could decide when to put the cash back in? If you are afraid now that you will invest the money at 40/60 and lose a lot, why would you not be afraid of the same thing once you are ...
by markierussell
Wed Mar 16, 2011 8:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Advice please - large cash holding, so when to invest?

Hi All, I am 57 and near retirement (like maybe even this year!). I have a 7 figure nest egg composed 81% cash and CDs, 16% bonds (including some BND) and 3% equity ETFs (mainly VTI). I would like to move to something closer to a classic 40/60 equity/bond split. I expect to invest mainly in VTI and ...
by markierussell
Wed Mar 16, 2011 7:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice please - large cash holding, so when to invest?
Replies: 60
Views: 7038

Thanks all for the advice. Although I guess value stocks generally do better than growth stocks over the long haul, it's interesting to note that over the past 7 years (i. e. since inception) the small-cap growth (VBK) beat the value version (VBR) by a small margin: 7.81% to 7.54%. Wonder why. Hard ...
by markierussell
Tue Mar 15, 2011 7:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?
Replies: 25
Views: 2406

KyleAAA, thanks. Would you feel the same way about Vanguard small-cap growth (VBK)? It's also got low dividends (therefore for me tax efficient) but I take your point that one shouldn't focus on this to the exclusion of diversity, the advantage of the total market, etc. At present I am about 80% in ...
by markierussell
Tue Mar 15, 2011 4:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?
Replies: 25
Views: 2406

empb: I'm not a green card holder. That is a RESIDENT alien. You are right that they are normally taxed like a citizen. But I am a NON-resident alien. NRA's are taxed very differently. The system for NRA's is one of withholding by the broker (eg TD Ameritrade) since we don't live in the U.S. Withhol...
by markierussell
Tue Mar 15, 2011 4:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?
Replies: 25
Views: 2406

Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?

YDNAL, thanks. I'm in a different tax position from most investors because I'm a non-resident alien. As such I am not taxed on any return except for dividends, on which there's a 30% withholding tax. I don't think those tax ratios reflect my position, because I believe they also count capital gains ...
by markierussell
Tue Mar 15, 2011 4:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?
Replies: 25
Views: 2406

Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?

Thanks for the input. The reason I'm interested in VOT (mid-cap growth) over VO (basic mid-cap) is that for tax reasons I want to minimize dividends. I believe the SEC yields are indicators of dividend payments (if I'm mistaken please let me know) and note that VOT has SEC yield of only 0.34% wherea...
by markierussell
Tue Mar 15, 2011 4:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?
Replies: 25
Views: 2406

Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?

Hi All, I'm interested in VOT but note that Morningstar gives it only 3 stars, apparently because of high volatility. S&P also seems to give it relatively low credit rating. Does anyone know why this index-tracker would fall short of the pack on these aspects, when other similar Vanguard ETF's (...
by markierussell
Tue Mar 15, 2011 3:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Mid-Cap ETF (VOT) - why only 3 Stars?
Replies: 25
Views: 2406

Low-dividend paying ETFs - are there any?

Fred, thanks! Did you get those by looking at their SEC yields? Guess it stands to reason that ETFs that track smaller companies would receive less dividends. Does anyone know of an ETF with low dividend yield that tracks the whole U.S. market or large caps? I suppose it would have to be specially m...
by markierussell
Mon Mar 14, 2011 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low-dividend paying ETFs - are there any?
Replies: 6
Views: 1415

Low-dividend paying ETFs - are there any?

Hi All, For tax reasons I'm looking for a good index (or passive) ETF that minimizes dividend payout. I know there are many tax-managed funds, some of which do that. But few if any seem to have ETF versions. The only tax-managed Vanguard ETF I can find is VEA, a share class of Vanguard Tax-Managed I...
by markierussell
Mon Mar 14, 2011 8:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low-dividend paying ETFs - are there any?
Replies: 6
Views: 1415

Ptete, I have the same question as you, as I am (for U.S. purposes) a non-resident alien, investing through a U.S. online brokerage and do not want to suffer the 30% withholding tax they impose on dividends from ETFs. Have you found a good equity (preferably index) ETF that minimizes dividends? Chee...
by markierussell
Sat Mar 12, 2011 12:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are low-cost low-dividend-yield Index Funds?
Replies: 31
Views: 5722

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