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Re: Inflation Bonds - Staying the Course?

I have kept my Inflation Bond Funds and have no plans to change course. Perhaps, I am like the World War II French Generals who relied on WWI tactics and the Maginot Line to defend against the Germans. Instead of trench warfare, they got Panzer divisions and were overrun in a matter of weeks. My por...
by nedsaid
Thu Sep 18, 2014 10:06 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 42
Views: 2460

Re: Do you plan trips on your own or use a [travel agent]?

I have both used travel agents and planned my own trips. When I took my first trip to Europe, I used a travel agent to book a bus tour. I wanted some practical advice as this was my first trip there. The next year, I booked a trip through a discount website but used the travel agent to book the day ...
by nedsaid
Wed Sep 17, 2014 10:34 pm
 
Forum: Personal Consumer Issues
Topic: Do you plan trips on your own or use a [travel agent]?
Replies: 36
Views: 1451

Re: Jack Bogle on "Advisers"

Bogleheads: It is instructive to read what Mr. Bogle wrote about advisers in Common Sense on Mutual Funds. This is a portion: Consider Carefully the Added Costs of Advice: Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do ...
by nedsaid
Wed Sep 17, 2014 9:42 am
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4371

Re: How much value can an advisor add for the average invest

People on this forum are very comfortable with investing and can be a little bit removed from how someone with no experience or interest in it can feel. One example of this was in 1987 when the market crashed going down 22% in one day!! The reality was that I was 28 years old and I lost hundreds of...
by nedsaid
Sun Sep 14, 2014 4:15 pm
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4371

Re: The dangerous practice of rebalancing...

Wow. I'm a bit taken back by the shift in this thread. It started out being sarcastic and dismissive about anything other than constant-mix portfolio rebalancing, highlighting a few extreme points taken out of context from the article. Then we started bashing rebalancing... rebalancing isn't necess...
by nedsaid
Sun Sep 14, 2014 4:02 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: The dangerous practice of rebalancing...

This thread illustrates my dislike for mechanical investing strategies or statements in an Investment Policy Statement that say if X happens, I will do Y. I don't like the rigidity, I allow for myself a certain amount of flexibility. +1 It's good for investors to have a plan. You don't want to be f...
by nedsaid
Sun Sep 14, 2014 3:48 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: How much value can an advisor add for the average invest

My mind has changed on some things over the years and this is one of them. I think most people would benefit from working with an investment advisor. I do taxes on the side and have talked to a lot of people. Some folks are squared away and do a good job with their finances. It never ceases to amaze...
by nedsaid
Sun Sep 14, 2014 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4371

Re: An Interesting Correlation

Leeraar, you have hit on the old "correlation is not causation" statement. I remember my marketing professor citing a correlation between Minister's salaries and the price of scotch. Nonsensical unless you believe that men of the cloth drink lots of scotch. Or that there are enough of the...
by nedsaid
Sun Sep 14, 2014 12:17 pm
 
Forum: Investing - Theory, News & General
Topic: An Interesting Correlation
Replies: 22
Views: 1820

Re: Premiums: Size, Value, Beta, Momentum

You have an old article. There is also now a Quality premium. Larry has also written about an illiquidity premium as well. So we are up to six now.
by nedsaid
Sun Sep 14, 2014 12:03 pm
 
Forum: Investing - Theory, News & General
Topic: Premiums: Size, Value, Beta, Momentum
Replies: 25
Views: 1589

Re: The dangerous practice of rebalancing...

This is what I love so much about this forum. A year and a half ago I was in another rebalancing thread and defended my rather relaxed attitude about rebalancing. I got battered and bruised pretty good and decided it might be a good idea to do some rebalancing. So from July 2013 into 2014, I did som...
by nedsaid
Sun Sep 14, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: An Interesting Correlation

Leeraar, you have hit on the old "correlation is not causation" statement. I remember my marketing professor citing a correlation between Minister's salaries and the price of scotch. Nonsensical unless you believe that men of the cloth drink lots of scotch. Or that there are enough of them...
by nedsaid
Sun Sep 14, 2014 11:24 am
 
Forum: Investing - Theory, News & General
Topic: An Interesting Correlation
Replies: 22
Views: 1820

Re: An Interesting Correlation

In really bad markets the only thing that goes up is correlation. This means that "diversifiers" sometimes fail when you need them the most. To counter this, you need a strong stomach and patience to wait out the volatility. I still strongly advocate diversifying your portfolio with non-co...
by nedsaid
Sun Sep 14, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: An Interesting Correlation
Replies: 22
Views: 1820

Re: Critique my fund allocation

Your asset allocation looks fine to me. Some thoughts. I have invested in REITs and Timber REITs for years. They have been great investments for me over the years. The story on Timber REITs have been out for years, I don't think you will get outperformance here. REITs have been bid up in price just ...
by nedsaid
Sun Sep 14, 2014 10:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Critique my fund allocation
Replies: 1
Views: 273

Re: An Interesting Correlation

I do not hold gold, precious metals, precious metals funds, or commodities. I have considered these as portfolio insurance but so far have decided that the cost of the insurance is too high.
by nedsaid
Sun Sep 14, 2014 9:54 am
 
Forum: Investing - Theory, News & General
Topic: An Interesting Correlation
Replies: 22
Views: 1820

Re: An Interesting Correlation

I do not hold Long Term Treasuries myself. I do see them as the ultimate deflation hedge and as a good diversifier in most situations as the stock market. The danger I see is that if a bear market is caused by increasing interest rates, then Long Term Treasuries would offer no protection. I have rea...
by nedsaid
Sun Sep 14, 2014 1:19 am
 
Forum: Investing - Theory, News & General
Topic: An Interesting Correlation
Replies: 22
Views: 1820

Re: Buffett: Modern investment theory is horse-pucky

I have to admit that I haven't thought too much about the composition of market participants and how that affects the markets. I have always assumed that the big institutional players dominated the markets and that the effect of the individual investor has waxed and waned over the years. You have ra...
by nedsaid
Sun Sep 14, 2014 1:07 am
 
Forum: Investing - Theory, News & General
Topic: Buffett: Modern investment theory is horse-pucky
Replies: 119
Views: 8960

Re: I've never been a fan of commodity funds

The Fidelity Freedom 2025 fund has done okay as a fund but I am sure the commodities didn't help its performance. They didn't call me and ask how to invest the money. I suspect Fidelity was late to the commodities party just like a lot of retail investors. Institutions have the same foibles that ind...
by nedsaid
Sat Sep 13, 2014 10:28 pm
 
Forum: Investing - Theory, News & General
Topic: I've never been a fan of commodity funds
Replies: 28
Views: 2160

Re: The dangerous practice of rebalancing...

Berntson, you don't need super-strong views on rebalancing. Good old fashioned shaming from your fellow forum members will work just fine. :happy :happy :happy Or just think back to 2008, and hitting your head and saying, "I could have rebalanced." Sort of a V-8 moment. A person who never ...
by nedsaid
Sat Sep 13, 2014 10:22 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: I've never been a fan of commodity funds

I have shares in a Fidelity 2025 Freedom Fund in lieu of company contributions into a frozen cash balance pension plan. This fund used to have 7% of it's holdings in a commodities fund not too long ago, I recently checked again and the percentage invested in that commodities fund was down to 1%. Evi...
by nedsaid
Sat Sep 13, 2014 10:09 pm
 
Forum: Investing - Theory, News & General
Topic: I've never been a fan of commodity funds
Replies: 28
Views: 2160

Re: Personal Finance podcast - what should a good one includ

I used to listen to Paul Merriman's podcast. He would pick an investment topic to discuss, answer viewer questions, and have a guest.
by nedsaid
Sat Sep 13, 2014 10:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Personal Finance podcast - what should a good one include?
Replies: 1
Views: 414

Re: Intermarket relations: Bonds, Stocks, and Commodities

If I knew how different investment markets peaked in relationship with each other, I would be a retired multi-millionaire. I suspect once this knowledge become more widely known that the relationships between these asset classes would change. This is what I know. The US Stock Market had a very long ...
by nedsaid
Sat Sep 13, 2014 9:45 pm
 
Forum: Investing - Theory, News & General
Topic: Intermarket relations: Bonds, Stocks, and Commodities
Replies: 1
Views: 211

Re: Why do so many think their home is a foolproof investmen

People think their home is a foolproof investment for several reasons. First, it is a long term investment. I never heard Paul Kangas on Nightly Business Report quote the amount that my home went up or went down in value on a particular day. Second, most of us have seen appreciating home prices for ...
by nedsaid
Sat Sep 13, 2014 5:01 pm
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6129

Re: Buffett: Modern investment theory is horse-pucky

I am certainly not a technical analyst by any means but there are some numbers worth looking at that might tell you something about the health of a bull market. Trading volume, you want to see stocks go up on lots of volume. Market breadth, advancers versus decliners, you want to see a lot more stoc...
by nedsaid
Sat Sep 13, 2014 4:47 pm
 
Forum: Investing - Theory, News & General
Topic: Buffett: Modern investment theory is horse-pucky
Replies: 119
Views: 8960

Re: The dangerous practice of rebalancing...

Rebalancing is sometimes talked about as if it were a sign of good moral character. But it's not. Whether you rebalance or not is just one more asset allocation decision, like deciding how much of your stock portfolio you want to hold in international stocks. I had to laugh about this. Back in earl...
by nedsaid
Sat Sep 13, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: The dangerous practice of rebalancing...

What did I do in the 2008-2009 downturn? The rational thing to do would have been to rebalance from safe assets into riskier assets, that is from bonds to stocks. The reality of it was that I was scared, this really could have been financial Armageddon. My rational self said one thing and my emotion...
by nedsaid
Sat Sep 13, 2014 9:36 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: Percentage of bond money in foreign bonds

I think that Vanguard's recommendation to have 20% of a Bond portfolio in a currency hedged Foreign Bond fund is sensible. I could go either way on this recommendation though I own International Bond Funds myself. I am a big fan of Intermediate Term Investment Grade Bond Funds, to me that gives you ...
by nedsaid
Sat Sep 13, 2014 9:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Percentage of bond money in foreign bonds
Replies: 8
Views: 773

Re: Strong dollar = tilt international?

I sure wouldn't pile into International Stocks and Bonds just because I read that the US Dollar is strengthening versus foreign currencies. But I like that you are exercising your noggin, you are thinking along the correct line of reasoning. That is you buy assets when they are relatively cheap and ...
by nedsaid
Sat Sep 13, 2014 8:46 am
 
Forum: Investing - Theory, News & General
Topic: Strong dollar = tilt international?
Replies: 15
Views: 1294

Re: Individual Stocks

I do both, but index funds are better than active funds which are better than individual stocks. In recent years I have de-emphasized my individual stocks in favor of funds. I have always believed that broad diversification is better than narrow diversification. The investing world is pretty darned ...
by nedsaid
Sat Sep 13, 2014 12:20 am
 
Forum: Investing - Theory, News & General
Topic: Individual Stocks
Replies: 29
Views: 1808

Re: Buffett: Modern investment theory is horse-pucky

Leerar, thanks for your comments. This backbencher in the House of Commons shouts out "hear, hear" or if you have a noticeable British accent "he-ah" "he-ah." Reading about Warren Buffett didn't make me Warren Buffett. Reading Peter Lynch's books did not create Lynchian...
by nedsaid
Sat Sep 13, 2014 12:12 am
 
Forum: Investing - Theory, News & General
Topic: Buffett: Modern investment theory is horse-pucky
Replies: 119
Views: 8960

Re: The dangerous practice of rebalancing...

This is why we all need to put on our philosopher's hat and put down on paper our beliefs about markets and investments. Create a model by which we can understand how markets work. Have core beliefs that we hold strongly. Otherwise you run into the problem of thinking you have a good plan until you ...
by nedsaid
Fri Sep 12, 2014 11:44 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 11109

Re: Buffett: Modern investment theory is horse-pucky

The thing is that we need a good framework or a model by which we can better understand the markets. That is that we build models that are based upon beliefs that are true most of the time. Otherwise we just say it is all bunk or horse-pucky or a rigged game and never invest. We all operate on presu...
by nedsaid
Fri Sep 12, 2014 11:10 pm
 
Forum: Investing - Theory, News & General
Topic: Buffett: Modern investment theory is horse-pucky
Replies: 119
Views: 8960

Re: Good and bad investor habits

Larry Swedroe said: "Research has found that the managers fired by pension plan sponsors, typically based on three-year performance evaluations, subsequently go on to outperform the managers hired as their replacements. " Wow, isn't that interesting? I have posted many times how difficult ...
by nedsaid
Tue Sep 09, 2014 9:05 am
 
Forum: Investing - Theory, News & General
Topic: Good and bad investor habits
Replies: 1
Views: 323

Re: Help with Retirement/Investing

Antichurn, you and your wife are to be commended for wanting to raise a large family. What our nation desperately needs are good parents and more children. I am not saying this to put down anyone who made other choices but just think of what life would be like without children. It is commendable tha...
by nedsaid
Tue Sep 09, 2014 8:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with Retirement/Investing
Replies: 9
Views: 923

Re: Peter Lynch was wrong

No, Peter Lynch did not make a lot of people a lot of money; until the early 1980s, Magellan was not open to the general public--it was essentially the private vehicle of the Johnson family. It did not attract substantial assets til the mid 80s, following which it outperformed the S&P by about ...
by nedsaid
Tue Sep 09, 2014 8:39 am
 
Forum: Investing - Theory, News & General
Topic: Peter Lynch was wrong
Replies: 64
Views: 6032

Re: How is tilting any different that active value investing

I hope it isn't perceived that people are beating up on Larry, at least on this thread. Most of the discussion has been getting a more precise definition of active management and passive investing. But yes, on other threads he has folks that have gotten after him. It is a good reminder that we can a...
by nedsaid
Sun Sep 07, 2014 9:32 pm
 
Forum: Investing - Theory, News & General
Topic: How is tilting any different that active value investing
Replies: 55
Views: 2532

Re: How is tilting any different that active value investing

postingname wrote:
So the Bogleheads are "tilted" towards the rule-based and transparent implementation sector of factor investing.

Got it. ;)


Bogleheads are tilted towards computers. If computers pick stocks, it is passive investing. If people pick stocks that is active. :happy :happy :happy
by nedsaid
Sun Sep 07, 2014 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: How is tilting any different that active value investing
Replies: 55
Views: 2532

Re: J. Zweig - smart investors you should follow - boglehead

It is nice that our forum is recognized by Jason Zweig. I have read his stuff for years and I greatly respect his work. One can read my posts as I have given some great examples of what not to do. Other posters have mentioned their investing experiences and that has been helpful to me.
by nedsaid
Sun Sep 07, 2014 5:22 pm
 
Forum: Investing - Theory, News & General
Topic: J. Zweig - smart investors you should follow - bogleheads
Replies: 19
Views: 2425

Re: How is tilting any different that active value investing

Thanks Simplegift for posting that chart. I have commented on the chart and on the MSCI white paper in another thread. That wonderful chart perfectly illustrates what I have tried (and failed) to get across about factor investing. Pretty much as you make your stock screens more complex and take into...
by nedsaid
Sun Sep 07, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: How is tilting any different that active value investing
Replies: 55
Views: 2532

Re: International Bonds

I own two International Bond funds. My experience is that owning them has neither helped nor hurt my portfolio. In 2013, I noticed that one of my International Bond funds was UP while all the other bond funds I owned were down. So I probably got a mild diversification benefit. For me, it isn't so mu...
by nedsaid
Sun Sep 07, 2014 5:05 pm
 
Forum: Investing - Theory, News & General
Topic: International Bonds
Replies: 4
Views: 636

Re: What do you measure your AA against?

This is a great question. What I use are the Target Date and the Target Risk portfolios at my favorite mutual fund company. I compare against their Target Date 2025 fund and the Moderate Risk Fund. Their 2025 fund holds 56% stocks, 39% bonds, and 5% cash. Their Moderate Risk Fund is 64% stocks, 31% ...
by nedsaid
Sun Sep 07, 2014 4:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: What do you measure your AA against?
Replies: 20
Views: 1100

Re: Peter Lynch was wrong

I have read his books and I don't think it was luck. What I will say is that he came in at a great time to be a fund manager. I was impressed that he had a very flexible mind that executed several investing styles at one time, he bought what he liked. Most managers follow one or maybe two styles. Ly...
by nedsaid
Sun Sep 07, 2014 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: Peter Lynch was wrong
Replies: 64
Views: 6032

Re: Help with Retirement/Investing

The Fidelity Freedom Funds are decent though imperfect Target Date Retirement Funds. If you stuck with what you had, you would do okay. I think you can do better. When my employer froze its pension plan, they started giving us the pension contributions to invest any way that we would like. For the s...
by nedsaid
Sun Sep 07, 2014 12:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Retirement/Investing
Replies: 9
Views: 923

Re: Portfolio Advice Needed $1M age 40

Did your financial advisor provide you with any written financial plan? Investment objectives, time horizons, risk tolerance, asset allocation, etc. Get a hold of that and read through it again. See if you agree with where your advisor was wanting to take you. Second, go to the Wiki and learn about ...
by nedsaid
Sun Sep 07, 2014 12:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Advice Needed $1M age 40
Replies: 18
Views: 2036

Re: RE' Advestment advisory services?

You could do the exact same thing with a Target Date or a Target Risk fund. Target Date funds get more conservative (more bonds) as you get older and the date is your projected retirement date. Target Risk funds maintain the same risk level (conservative, moderate, aggressive). Another good candidat...
by nedsaid
Sun Sep 07, 2014 11:43 am
 
Forum: Investing - Help with Personal Investments
Topic: RE' Advestment advisory services?
Replies: 10
Views: 651

Re: Peter Lynch was wrong

RadAudit, you are probably right about the factors in Lynch's early retirement. I think he could see the handwriting on the wall, he was beating the market by progressively smaller margins. The asset base at Magellan grew to unbelievable proportions and Fidelity should have closed the fund. He did s...
by nedsaid
Sun Sep 07, 2014 11:32 am
 
Forum: Investing - Theory, News & General
Topic: Peter Lynch was wrong
Replies: 64
Views: 6032

Re: Finding Smart Beta in the Factor Zoo

Thanks Paul for the link. It is interesting because the discussion of factors confirms things that I have learned from watching the markets for years. It is nice to know that I actually know something. My style of investing has focused on three of these factors discussed in the paper: value, dividen...
by nedsaid
Sun Sep 07, 2014 11:15 am
 
Forum: Investing - Theory, News & General
Topic: Finding Smart Beta in the Factor Zoo
Replies: 34
Views: 2084

Re: Finding Smart Beta in the Factor Zoo

Paul, thanks for your comments. The truth is that there are different styles of investing and they all seem to work. What makes one want to scratch one's head is that some of this seems contradictory. I can see why many people on this forum stick with the indexes and a 3-5 fund portfolio. Good resul...
by nedsaid
Sat Sep 06, 2014 12:20 pm
 
Forum: Investing - Theory, News & General
Topic: Finding Smart Beta in the Factor Zoo
Replies: 34
Views: 2084

Re: Financial planner advice needed

The best thing to do is to educate yourself first. Go through the wiki and read. The more you know, the better questions you can ask an advisor and the better sense you will have whether you are getting good advice or not. Please don't be a babe in the woods and just walk into an advisor's office, y...
by nedsaid
Sat Sep 06, 2014 11:49 am
 
Forum: Investing - Help with Personal Investments
Topic: Financial planner advice needed
Replies: 11
Views: 1047

Re: summary of two new papers on low volatility

Larry, we all agree that in general the market rewards greater risk with greater return. Your comments indicate that when investors go beyond a certain threshold of risk that they are not rewarded with extra return but may indeed be penalized. Hence you comment about lottery stocks. This is a very i...
by nedsaid
Sat Sep 06, 2014 11:23 am
 
Forum: Investing - Theory, News & General
Topic: summary of two new papers on low volatility
Replies: 15
Views: 1183

Re: summary of two new papers on low volatility

Hi Larry, thanks for your statement that volatility is relative. I know that and you know that and most Bogleheads know that. The reason that I commented is that some investors probably don't realize that. There are people that look at efficient frontiers and other investment graphs assuming that th...
by nedsaid
Sat Sep 06, 2014 11:15 am
 
Forum: Investing - Theory, News & General
Topic: summary of two new papers on low volatility
Replies: 15
Views: 1183
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