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Re: MOM faltering? [Momentum]

There is nothing wrong with disagreeing with an article or pointing things out that the original poster didn't think about. But there is an art to disagreeing with somebody while respecting the other person. It is the easiest thing in the world to be dismissive about what somebody else has to say. I...
by nedsaid
Wed Jul 30, 2014 9:17 pm
 
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 47
Views: 2833

Re: global diversification works in long term

I have believed in global diversification for years. I don't believe that the US will be the next Japan but we should not as US investors completely discount that possibility. Diversification all over the world has worked for me. I am a believer.
by nedsaid
Wed Jul 30, 2014 9:09 am
 
Forum: Investing - Theory, News & General
Topic: global diversification works in long term
Replies: 19
Views: 1312

Re: Was ready to pull plug on Janus..until

There are a couple of problems with comparing active funds with index funds. I own active funds, mostly in a fund company that I have invested in for 30 years. At my workplace savings plan, I own mostly index funds but use active funds for asset classes where an index isn't available. Here are the p...
by nedsaid
Wed Jul 30, 2014 9:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 3836

Re: Tell me why I shouldn't buy individual muni bonds

Fred, the reason you don't want to buy individual bond issues of any type rather than Treasuries is that you wind up being your own credit analyst. My gosh, let Vanguard do that for you. A family member invested in individual bond issues. It seemed like the credit quality of whatever he/she bought w...
by nedsaid
Tue Jul 29, 2014 10:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tell me why I shouldn't buy individual muni bonds
Replies: 31
Views: 1892

Re: Larry: 20 Dollar Bills and Factor Persistence

People pick mutual funds and asset classes this way too. I should have mentioned that in my post. Thanks for helping clarify my point.
by nedsaid
Tue Jul 29, 2014 12:18 am
 
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 9447

Re: Larry: 20 Dollar Bills and Factor Persistence

Robert, you had a great post on the effects of inflation/deflation on the value factor. It makes sense, I will have to read your post again and digest further your points. A lot of financial stocks pass the value screens and I will have to exercise my noggin to think about the effect of inflation/de...
by nedsaid
Tue Jul 29, 2014 12:14 am
 
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 9447

Re: Larry: 20 Dollar Bills and Factor Persistence

Someone mentioned that my behavioral theories were made obsolete now that institutions are managing more and more of the investing dollar and individual stock selection at a full service broker is dying. First institutional investors are still human. They are subject to the same emotions and behavio...
by nedsaid
Tue Jul 29, 2014 12:01 am
 
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 9447

Re: Do any boggleheads invest in individual companies?

I do own individual stocks, a bit less than 15% of my retirement portfolio. I don't trade these very often, mostly I am collecting the dividends. I am de-emphasizing these in my portfolio, my individual stocks are a smaller and smaller part of my retirement portfolio. Seeing that 69% of my portfolio...
by nedsaid
Mon Jul 28, 2014 11:50 pm
 
Forum: Investing - Theory, News & General
Topic: Do any boggleheads invest in individual companies?
Replies: 95
Views: 5296

Re: How to invest without an advisor

I think what you bought was an Equity Indexed Annuity, these are usually tied to an index like the S&P 500. The sales pitch is that you get the upside of the stock market without the risk. They normally cap what you can make in a given year plus from what I understand you don't get the dividends...
by nedsaid
Mon Jul 28, 2014 11:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to invest without an advisor
Replies: 7
Views: 1623

Re: How to invest without an advisor

MaggieB, I own General Electric stock but not $100K of it!! What you have in GE stock is a pretty high percentage of your net worth. A good replacement for the stock would be the Vanguard US Total Stock Market Index, or maybe 50% US Total Stock Market and 50% Total International Stock. Keep in mind ...
by nedsaid
Mon Jul 28, 2014 10:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to invest without an advisor
Replies: 7
Views: 1623

Re: One of the simplest rational reasons why some should til

My first venture into the stock market was at a no-load no-minimum fund company where I bought a mutual fund in a taxable account. 30 years later, I still own the fund. Then a friend got into the brokerage business and his office had two of the "All-Star" brokers profiled in Money Magazine...
by nedsaid
Sun Jul 27, 2014 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 42
Views: 3761

Re: Larry: 20 Dollar Bills and Factor Persistence

Garland, being a non-quant I will take a stab at it. First of all history does not repeat itself, it just rhymes. I would regard this period as having some similarities to two time periods. The first being 1929-1941, that is the great depression. We have some things in common with that era: higher u...
by nedsaid
Sun Jul 27, 2014 7:58 pm
 
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 9447

Re: Do Bogleheads Ladder CDs Anymore?

I am not doing this now, my fixed income investments are mostly in Intermediate Term Bonds. I have suggested the five year CD ladder for retirees and near retirees. At some point, I might consider doing this myself as part of my fixed income retirement portfolio. It is a great idea. I have been sugg...
by nedsaid
Sun Jul 27, 2014 11:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Do Bogleheads Ladder CDs Anymore?
Replies: 25
Views: 2369

Re: Teacher looking for portfolio advice

I posted on your other thread. The other comment I have is that I don't see any International Stocks in your portfolio. That is one change I would make, maybe 30% of your stocks in International. Otherwise looks pretty good.
by nedsaid
Sun Jul 27, 2014 11:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Teacher looking for portfolio advice
Replies: 13
Views: 566

Re: Teacher looking for portfolio advice

Teacher 88, there are some more things we need to know before giving specific advice. I can however share some general tips that you might find helpful. I am assuming you are a member of the New York State Teachers Retirement System. From what I can see, it looks like you have access to a good pensi...
by nedsaid
Sun Jul 27, 2014 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Teacher looking for portfolio advice
Replies: 13
Views: 566

Re: Factor investing - A parody

This forum should be a place where people can share ideas and not have them just dismissed sarcastically. It is okay to point out flaws in a post but I thought the idea was to stimulate discussion so that we could learn one from another. My suggestion is to tone down the snarkiness. There is a way t...
by nedsaid
Sun Jul 27, 2014 10:20 am
 
Forum: Investing - Theory, News & General
Topic: Factor investing - A parody
Replies: 33
Views: 2167

Re: Factor investing - A parody

I like Kevin's chart. That was an excellent post. Adding non-correlating, higher return, and higher volatility can add to return and reduce volatility of the overall portfolio a bit. Thus I have added reits, small value, microcap, emerging markets, and international mid/small cap. These asset classe...
by nedsaid
Sat Jul 26, 2014 9:39 pm
 
Forum: Investing - Theory, News & General
Topic: Factor investing - A parody
Replies: 33
Views: 2167

Re: Efficient frontier by decade

This shows why I am not obsessed with getting my asset allocation exactly right. As you can see, the efficient frontiers are all over the map. Investing is more like cooking from scratch than following a precise recipe or formula. A dash of this and a dribble of that. Hmm, that looks good, I'll put ...
by nedsaid
Sat Jul 26, 2014 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: Efficient frontier by decade
Replies: 39
Views: 18176

Re: How to invest without an advisor

It is hard to give specific advice without knowing more detail about your finances. One important factor is your Federal and State Tax brackets. This would determine for example whether it would be advantageous to own municipal funds in a taxable portfolio. You have not indicated a desired asset all...
by nedsaid
Sat Jul 26, 2014 9:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to invest without an advisor
Replies: 7
Views: 1623

Re: Int'l Train Travel

I have taken a few train trips. In 2002, I visited a friend in Japan. I got a Japan rail pass good for the two weeks that I was there. I took in Osaka, Hiroshima, Kyoto, and Nara. Mostly I took the high speed trains. I took a train to Tokyo for the return flight home. I really enjoyed the experience...
by nedsaid
Sat Jul 26, 2014 8:35 pm
 
Forum: Personal Consumer Issues
Topic: Int'l Train Travel
Replies: 28
Views: 1484

Re: Portfolio Tune Up

I like what you are doing but I would add Emerging Markets to your mix. The reason is that the Anglosphere (UK, US, Canada, Australia, New Zealand) is much the same and even when you add Western Europe you aren't getting enough diversification. With your VDU EFT, you are getting that plus Japan and ...
by nedsaid
Sat Jul 26, 2014 8:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Tune Up
Replies: 3
Views: 595

Re: Factor investing - A parody

Whenever you buy individual issues, you are tilting your portfolio to the extent that the percentage of those stocks in your stock portfolio are greater than their portion of the total market index. So yes, if you buy Apple stock you will have a tilt. Whenever people post a portfolio online and want...
by nedsaid
Sat Jul 26, 2014 7:55 pm
 
Forum: Investing - Theory, News & General
Topic: Factor investing - A parody
Replies: 33
Views: 2167

Re: Should market valuations be completely disregarded?

The way I look at it is that when valuations are low and future expected returns are high that the odds are more in your favor than when valuations are high and future expected returns are low. So yes, one can say the market is riskier when valuations are high. The problem is that there are a lot of...
by nedsaid
Sat Jul 26, 2014 6:22 pm
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3847

Re: Old people and financial advisors - a family tale

Your great uncle is fickle, and that is a common human trait. I don't necessarily think he is losing his marbles. Older folks are sometimes lonely and advisors can take advantage of that. If he can't make up his mind on what he wants, there really isn't much you can do about it. You might just have ...
by nedsaid
Sat Jul 26, 2014 2:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 75
Views: 5521

Re: Afraid of Bonds

Jack, you have exactly hit on the reasons I don't expect a repeat of the 1970's. Another factor is that our economy is much more energy efficient than it was during the 1970's. We are also seeing an increase in domestic oil production. We aren't so vulnerable to energy price shocks as we were in the...
by nedsaid
Sat Jul 26, 2014 2:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Afraid of Bonds
Replies: 28
Views: 2250

Re: Afraid of Bonds

My previous post referred back to a day when it was a lot easier to live off of interest and dividends and when stocks were much cheaper. Perhaps like 1982. That would be a dream for retirees, relatively high interest rates and a cheap stock market. The point of my post was that we are not in that e...
by nedsaid
Sat Jul 26, 2014 2:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Afraid of Bonds
Replies: 28
Views: 2250

Re: Afraid of Bonds

I am not afraid of bonds but have been underweighted in them because of the low interest rates. Their future return prospects don't excite me, my best guess is that you will get the rate of inflation or maybe a little bit more or a little bit less. There was a lot of concerns about bonds in 2013 and...
by nedsaid
Sat Jul 26, 2014 1:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Afraid of Bonds
Replies: 28
Views: 2250

Re: Should market valuations be completely disregarded?

No. Stock market valuations should be considered but not completely disregarded. If one thinks valuations are high, what do you do about them? First, reduce your expectations of future returns. Second, it might be a good time to rebalance your portfolio. In the case of extreme valuations, you might ...
by nedsaid
Thu Jul 24, 2014 12:49 am
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3847

Re: "What Has Time Taught Bill Bernstein?"

This was an excellent article and Bill Bernstein's observations is a confirmation of my experience as an investor. Emotions have a very powerful effect on investment returns if unrestrained and that effect is usually negative. Another way of saying it is that successful investing is mostly behaviora...
by nedsaid
Thu Jul 24, 2014 12:23 am
 
Forum: Investing - Theory, News & General
Topic: "What Has Time Taught Bill Bernstein?"
Replies: 19
Views: 3888

Re: Developing a sound framework for optimal asset allocatio

Investing is largely behavioral, human emotions play a big role in how markets perform. So all the math can precisely measure the effects of human behavior in the past, it has limited value in predicting the future. I would not get hung up on optimal asset allocation. There is a lot less precision i...
by nedsaid
Sun Jul 20, 2014 6:49 pm
 
Forum: Investing - Theory, News & General
Topic: Developing a sound framework for optimal asset allocation
Replies: 44
Views: 2732

Re: Japan's Lost Decades in One Chart

It shouldn't surprise me that multi-national companies hedge against currency risk. It is honestly something that I haven't given much thought to. Airlines hedge their fuel costs with futures. Food companies buy commodity futures for the same reason. I just figured that over the long term that all t...
by nedsaid
Sun Jul 20, 2014 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: Japan's Lost Decades in One Chart
Replies: 23
Views: 2874

Re: Stop Loss on stocks/ ETFs

Don't do it. Markets are volatile enough that at some point you will probably hit your stop loss limits. All you are doing is locking in your losses. Better to ride out market volatility. Peter Lynch in his books recommended against this.
by nedsaid
Sun Jul 20, 2014 11:49 am
 
Forum: Investing - Help with Personal Investments
Topic: Stop Loss on stocks/ ETFs
Replies: 12
Views: 893

Re: Jeremy Grantham pokes holes in EMH

Bertilak, you raise a good point. My comments are directed towards long term investors. There are all kinds of people out there that like to trade but I am not one of them. Mostly my buy decisions have been good and my sell decisions mostly not so good. I am a buy the good stuff and keep it type of ...
by nedsaid
Sun Jul 20, 2014 11:43 am
 
Forum: Investing - Theory, News & General
Topic: Jeremy Grantham pokes holes in EMH
Replies: 16
Views: 2158

Re: Portfolio Advice & Suggestions for a self taught investo

Midori, you actually have a good portfolio. There are things I would do a bit different but what you have looks awfully good to me. A few thoughts. It looks like your husband is trying to tilt towards value. This is actually a really good idea. It appears that he doesn't have a small cap value fund ...
by nedsaid
Sun Jul 20, 2014 11:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Advice & Suggestions for a self taught investor
Replies: 6
Views: 714

Re: Japan's Lost Decades in One Chart

Clive, you raised a great point about currencies. This has been talked about on other threads. Because of YEN appreciation and very low inflation if not a mild deflation, the Japanese investor did not fare as badly as what is perceived here. I am still a believer in international diversification. By...
by nedsaid
Sun Jul 20, 2014 10:57 am
 
Forum: Investing - Theory, News & General
Topic: Japan's Lost Decades in One Chart
Replies: 23
Views: 2874

Re: Jeremy Grantham pokes holes in EMH

Larry, I think everyone wants to own the quality stocks low debt, stable earnings, consistent sales and earnings growth. Warren Buffett likes to buy what I call the "good stuff" and buys it at a good price. To do this well, it seems to me that an investor would have to be awfully patient a...
by nedsaid
Sun Jul 20, 2014 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Jeremy Grantham pokes holes in EMH
Replies: 16
Views: 2158

Re: Faber: S&P 500 Active Fund in Drag

No, I don't think Faber is correct. There is a committee that decides the make-up of the index but the index but the changes from year to year are not great. The turnover is about 5% in a year. You could say that about just about any index is managed, albeit to a small degree. A little better argume...
by nedsaid
Sun Jul 20, 2014 12:25 am
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3533

Re: Japan's Lost Decades in One Chart

Japan is an excellent example of why an investor should diversify internationally. One should note that while Japan was experiencing bust in the 1990's, the US Stock Market was booming. Another thing to note was that Japan had overinvested and thus had too much slack capacity in its economy. I belie...
by nedsaid
Sat Jul 19, 2014 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: Japan's Lost Decades in One Chart
Replies: 23
Views: 2874

Re: I was tempted to market time and didn't

The problem with hunches is that markets can act in ways that you don't expect. Years ago I remember watching Nightly Business Report with my father. Chrysler came out with a good earnings report and the stock went down!! Dad asked why this was so and I explained to him that the market was a market ...
by nedsaid
Sat Jul 19, 2014 5:47 pm
 
Forum: Investing - Theory, News & General
Topic: I was tempted to market time and didn't
Replies: 19
Views: 1815

Re: Jeremy Grantham pokes holes in EMH

One point that I wanted to raise from reading the article. It would seem to me that quality companies with low debt and stable earnings be in the sweet spot of a lot of active managers stock screens. Isn't that what most investors want? It would seem to me that such companies would be pretty fully p...
by nedsaid
Sat Jul 19, 2014 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: Jeremy Grantham pokes holes in EMH
Replies: 16
Views: 2158

Re: POLL: Do you have a dedicated REIT allocation?

The reason that a REIT investor who has valuation concerns about REITs continues to hold them is a hedge against being wrong. "Overvalued" REITs have had a strong 2014 performance so far and a person who sold out in 2013 would feel stupid indeed. Another reason is that sell decisions are m...
by nedsaid
Sat Jul 19, 2014 2:04 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6979

Re: Ways to lose money and destroy personal wealth by invest

Here are a few I can think of. 1) Following excessively bearish gurus. The stock market tends to be up 2 years for every year it is down. A person who is always bearish will be wrong 2/3 of the time. If you follow the optimists, you odds of being right are dramatically higher. 2) Chasing performance...
by nedsaid
Sat Jul 19, 2014 1:51 pm
 
Forum: Investing - Theory, News & General
Topic: Ways to lose money and destroy personal wealth by investing
Replies: 81
Views: 9266

Re: Why I can't be a day trader.

Crow Hunter, you have experienced the "Nedsaid effect." I can make the price of a stock go up just by selling it!! Then whatever I buy to take its place does worse than what I just sold!! This has happened to me a lot. That is why I am so reluctant to sell. This has happened with mutual fu...
by nedsaid
Wed Jul 16, 2014 10:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why I can't be a day trader.
Replies: 38
Views: 2969

Re: POLL: Do you have a dedicated REIT allocation?

I own REITs and still add to them at my workplace savings plan with 10% of my new monies for investment. We heard the gloom and doom about REITs and I was among those with valuation concerns. Just checked, one of my REIT funds is up 19% so far this year. I still think REIT returns will be muted goin...
by nedsaid
Wed Jul 16, 2014 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6979

Re: Bet it ALL on Small Cap Value when you're young

You are #^&@* right that I am scared. I have been through two bear markets where the market dropped more than 50% since the year 2000. The first time, I had an approximately 80% stock/20% fixed income portfolio. The second time, I had something more like a 72/28% portfolio. The losses hurt and y...
by nedsaid
Wed Jul 16, 2014 12:55 am
 
Forum: Investing - Theory, News & General
Topic: Bet it ALL on Small Cap Value when you're young
Replies: 64
Views: 6220

Re: Does anyone expect tilts to *under*perform?

I tilt for a few reasons. First, I believe that the small and value premiums are real and persist over time. Secondly, I believe these premiums are based on human nature and human behavior and are unlikely to be arbitraged away. Third, value and growth stocks do not move in synch so there is a diver...
by nedsaid
Wed Jul 16, 2014 12:38 am
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5321

Re: Bet it ALL on Small Cap Value when you're young

The reason you don't bet it all on Small Cap Value when you are young is that this is an incredibly volatile portfolio. Memory recalls that this is about twice as volatile as the stock market as a whole. Small Cap Value can also underperform the rest of the market for years at a time. I believe this...
by nedsaid
Wed Jul 16, 2014 12:08 am
 
Forum: Investing - Theory, News & General
Topic: Bet it ALL on Small Cap Value when you're young
Replies: 64
Views: 6220

Re: Another reason I am my own advisor

Clearly there is a need for a fiduciary standard in the Brokerage Industry. I know of a couple acquaintances who had their rollovers put into variable annuities. Unless there are compelling guarantees against market loss, putting Variable Annuities inside a rollover IRA is Advisor malpractice in my ...
by nedsaid
Tue Jul 15, 2014 11:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Another reason I am my own advisor
Replies: 15
Views: 3740

Re: What To Do During A Correction In Stocks?

Nothing. Just keep investing on your regular schedule. If you have courage, you could rebalance from bonds back into stocks. I was chicken, I kept my stocks and invested on schedule just like I did before. I waited for the market to rebound.
by nedsaid
Tue Jul 15, 2014 10:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: What To Do During A Correction In Stocks?
Replies: 31
Views: 3691

Re: Does anyone expect tilts to *under*perform?

One more comment I will make on all of this. If a $20 bill was left for me on my desk at work every morning when I got to work and it was replaced the next morning with a new $20 bill; like Pavlov's dogs or B.F. Skinner's pigeons I would get smart very fast and pocket the $20 bill each time. Particu...
by nedsaid
Mon Jul 14, 2014 12:17 am
 
Forum: Investing - Theory, News & General
Topic: Does anyone expect tilts to *under*perform?
Replies: 84
Views: 5321
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