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Re: M*: No Vanguard Funds Among Its Top Seven Inter. Bond Fu

The big take-home for me in that chart is that I see four things that are really about the same, and one thing that is quite different from the other four. And, to my eye, no evidence at all that the Total Bond fund (and the Barclay's Aggregate index it tracks) was "too sensitive to an interest...
by nisiprius
Mon Mar 30, 2015 4:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: M*: No Vanguard Funds Among Its Top Seven Inter. Bond Funds
Replies: 17
Views: 2332

Re: Bond Interest - No Where to Go But Up?

http://www.vox.com/2015/2/5/7981461/negative-interest-rates-europe What prevents Bond rates from going negative in the US? Everyone expects interest rates to rise and are concerned about losing money in the process. Couldn't we also gain money if interest rates went to zero or below (from the rise ...
by nisiprius
Mon Mar 30, 2015 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Interest - No Where to Go But Up?
Replies: 8
Views: 982

Re: Why would real estate be sold for $1?

There's some legal thing about a contract not being binding unless there's an exchange of something of value... or something like that. There are a lot of places where the $1 instead of zero crops up. The "dollar-a-year men" during World War II who went to Washington and did what was essen...
by nisiprius
Mon Mar 30, 2015 12:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why would real estate be sold for $1?
Replies: 17
Views: 1649

Re: Weird situation with active vs. index

Here are links to all of his fund options. All loads are waived. Invesco Stable Asset (1.24) PIMCO Total Return Fund Class A (0.85) T Rowe Price Retirement 2040 Class R (1.28); other retirement years available too JP Morgan Equity Income Fund Class A (1.05) Franklin Rising Dividends Fund Class A (0...
by nisiprius
Mon Mar 30, 2015 7:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Weird situation with active vs. index
Replies: 12
Views: 1151

Re: M*: No Vanguard Funds Among Its Top Seven Inter. Bond Fu

For clarification, Grabiner (and Nisiprius agrees) thinks there isn't that much difference in interest-rate risk between intermediate-term treasuries and intermediate-term corporate bonds, while the M* article states that treasuries are more risky in case of a rise in interest rates. Oh, there's so...
by nisiprius
Mon Mar 30, 2015 4:24 am
 
Forum: Investing - Help with Personal Investments
Topic: M*: No Vanguard Funds Among Its Top Seven Inter. Bond Funds
Replies: 17
Views: 2332

Re: M*: No Vanguard Funds Among Its Top Seven Inter. Bond Fu

..."We feel that, in the long run, the Barclays Aggregate Index funds will underperform Gold-rated active funds because of the limitations of the bond index," says Boccellari." I agree with the conclusion, but not with the logic. The Aggregate Bond Index is expected to underperform i...
by nisiprius
Sun Mar 29, 2015 9:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: M*: No Vanguard Funds Among Its Top Seven Inter. Bond Funds
Replies: 17
Views: 2332

Re: Why do I need a CFP?

CFP's need to take a test. I looked over a sample test posted by the CFP board and it was very interesting and a lot of things clicked into place for me. Only about 10% of the test covered investing. A big part of the test involved a hypothetical case of a client. It took a full page to describe her...
by nisiprius
Sun Mar 29, 2015 3:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why do I need a CFP?
Replies: 3
Views: 597

Re: How many of you invest in individual stocks?

Like many other Bogleheads, I once did and quit doing it. I've bought individual stocks maybe ten times in my life. I haven't kept records so allow for false memory, and they were all small positions--all less than 100 shares--but I'm pretty sure I won big on my very first one, had small gains on ma...
by nisiprius
Sun Mar 29, 2015 12:22 pm
 
Forum: Investing - Theory, News & General
Topic: How many of you invest in individual stocks?
Replies: 54
Views: 2947

Re: Is BND really safe?

Guardyourheart, two exercises for you. I've posted on this with charts before, too lazy to repeat, but you should try this yourself. During calendar year 2013, what happened to the interest rate on the 10-year Treasury (roughly comparable to the bonds in BND)? What happened to BND? I believe that pe...
by nisiprius
Sun Mar 29, 2015 9:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Is BND really safe?
Replies: 12
Views: 1526

Re: Risk Questionnaires: How they work?

It's an interesting question what's behind these questionnaires and I'd love to know the answer. In a vague sort of way, I know that brokerages are required to "know their clients." I also know that brokers are required to sell clients only investments that are "suitable" for the...
by nisiprius
Sun Mar 29, 2015 3:49 am
 
Forum: Investing - Theory, News & General
Topic: Risk Questionnaires: How they work?
Replies: 18
Views: 1149

Re: [Poll] Would you be disappointed if VG advertised more?

I can tell you this - I recently dropped a charitable organization that I have been a long time contributor to, in favor of a different org in the same field, because the first organization started advertizing a lot. I looked at their finances and less money was reaching the field, more being spent...
by nisiprius
Sat Mar 28, 2015 11:28 am
 
Forum: Personal Finance (Not Investing)
Topic: [Poll] Would you be disappointed if VG advertised more?
Replies: 19
Views: 1329

Re: If You Print and Mail, Do You Double-Side?

It's an interesting question. In the past I always printed one-sided because I didn't own a duplex printer, and trying to print two-sided was dangerous--it was just too easy to misunderstand the software, and the slightly moist inkjet ink made the paper just curly enough that the chances of a jam fe...
by nisiprius
Sat Mar 28, 2015 6:21 am
 
Forum: Personal Finance (Not Investing)
Topic: If You Print and Mail, Do You Double-Side?
Replies: 44
Views: 13551

Re: Should a BH investor never use futures/options?

One of John C. Bogle's books (and a very good one) is entitled "Clash of the Cultures: Investing versus Speculating." One of his maxims is "invest, don't speculate." One of the rationales for owning a cap-weighted index fund is to be on both sides of every speculative trade, so t...
by nisiprius
Sat Mar 28, 2015 6:13 am
 
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 66
Views: 3758

Re: "Looming Crisis" in Corporate Bond Fund Liquidity

Mutual funds are not required to redeem in cash. They are allowed to redeem in kind. This would seemingly solve the problem of a run on a bond fund. If investors believe that a fund is using a stale value for the value of an illiquid bond, that they are promisingto redeem for $1,000 a bond whose tru...
by nisiprius
Wed Mar 25, 2015 9:43 pm
 
Forum: Investing - Theory, News & General
Topic: "Looming Crisis" in Corporate Bond Fund Liquidity
Replies: 16
Views: 2601

Re: Total International Stock Index includes small caps or n

Vanguard Total International (VGTSX) does. It fits the description of "broadest possible exposure regarding company size and geographic distribution," as does iShares IXUS and perhaps Fidelity's FSGUX. The existence of Vanguard's other international fund, VFWIX, also currently based on a d...
by nisiprius
Tue Mar 24, 2015 5:25 am
 
Forum: Investing - Theory, News & General
Topic: Total International Stock Index includes small caps or not?
Replies: 9
Views: 1309

Re: Better place to keep money than savings account?

You may wish to consider Series I savings bonds. They do not go down in value, ever. They are inflation-adjusted. Their interest rate is a combination of a "fixed rate," currently 0%, and an inflation adjustment. As long as inflation is over 1% a year they will earn more money than a savin...
by nisiprius
Tue Mar 24, 2015 5:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Better place to keep money than savings account?
Replies: 20
Views: 3189

Re: How important is an international allocation?

Despite all of my enthusiasm for International investing, I am still mostly a US investor. I haven't calculated things precisely, but something like 25% of my stocks and 8% of my bonds are invested Internationally. Despite my sales resistance to international investing, about 20-25% of my stocks ar...
by nisiprius
Mon Mar 23, 2015 11:46 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4557

Re: Removing currency when evaluating returns?

But. Here's the part I don't get. If I ask for the amount of outperformance, VTSMX over VEURX, for the Euro investor I think the right way to do it is 12885/10679 = 1.2066 = + 20.7%. For the dollar investor, it is 11286/9354 = 20.7%. (If you carry it to more places they're identical except for roun...
by nisiprius
Mon Mar 23, 2015 10:43 am
 
Forum: Investing - Theory, News & General
Topic: Removing currency when evaluating returns?
Replies: 7
Views: 613

Re: Removing currency when evaluating returns?

It's only a partial solution, but Morningstar allows you to choose a currency in which to display growth charts. I'm thinking out loud here and having almost completed the post I realize I'm puzzled about something, so be aware that I'm posting stuff without quite understanding it. Thus, if we displ...
by nisiprius
Mon Mar 23, 2015 6:19 am
 
Forum: Investing - Theory, News & General
Topic: Removing currency when evaluating returns?
Replies: 7
Views: 613

Re: How important is an international allocation?

...I certainly am not accusing anyone of cherry picking data... That's OK. It really is a question that always needs to be asked. I just can't help but notice that US Stocks and International Stocks tend to outperform each other at different times. It just seems common sense that this would aid in ...
by nisiprius
Sun Mar 22, 2015 7:32 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4557

Re: How important is an international allocation?

[...]As for manipulating endpoints, I used Total World from inception to today, i.e. all available data for that fund. If anyone knows of an older total global stock fund, I'd be glad to use that one. I probably should construct a chart for a 50/50 rebalanced mix of EAFE and the S&P 500 but I'm...
by nisiprius
Sun Mar 22, 2015 7:20 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4557

Re: How important is an international allocation?

I wasn't comparing U.S. to International. I wasn't comparing performance . I was comparing the volatility of U.S.-only to the volatility of Total World (US + international in market cap proportions), looking for a "smoother ride" from international diversification. As for manipulating endp...
by nisiprius
Sun Mar 22, 2015 5:52 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4557

Re: How important is an international allocation?

...When one asset class zigs a bit while the other one zags a bit, you get a bit smoother ride in your portfolio... Vanguard Total World Stock Index Fund, VTWSX, is globally cap-weighted and thus about 50/50 US/International and ought to show that "smoother ride." Since inception, has the...
by nisiprius
Sun Mar 22, 2015 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4557

Re: "Small-Cap Indexing: Popularity Can Be a Pain"

"U.S. small caps have historically provided some diversification benefits. The Russell 2000 Index had a correlation of around 0.92 with the S&P 500 during the past 10 years." This ought to be a joke. A correlation of 0.92 providing "some" diversification effect? You can of co...
by nisiprius
Sun Mar 22, 2015 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: "Small-Cap Indexing: Popularity Can Be a Pain"
Replies: 14
Views: 2126

Re: Foreign stocks/bonds may be less beneficial for retirees

... 1) Adding foreign stocks increases the volatility of portfolio returns. Volatility is not the friend of investors who are withdrawing money because it exacerbates sequence-of-return risk. However, volatility may be more beneficial for accumulators because it can enhance the benefit of dollar co...
by nisiprius
Sun Mar 22, 2015 3:05 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign stocks/bonds may be less beneficial for retirees
Replies: 26
Views: 2326

Re: External Hard Drive?

Toons wrote:I find myself trasitioning my backups and storage to Google Drive the last couple of years although I still use the external drive on occasion for tax files and other financially related data. :happy
Out of curiosity, how much Google Drive storage are you using and how much are you paying for it?
by nisiprius
Sun Mar 22, 2015 9:16 am
 
Forum: Personal Consumer Issues
Topic: External Hard Drive?
Replies: 44
Views: 2324

Re: External Hard Drive?

I vote for an external hard drive. The price of enough cloud storage to back up a whole disk is too high, and figuring out what things you actually need to back up takes too long. I would not use a solid state drive. They are expensive and there are weird issues I can't wrap my head around regarding...
by nisiprius
Sun Mar 22, 2015 9:10 am
 
Forum: Personal Consumer Issues
Topic: External Hard Drive?
Replies: 44
Views: 2324

Re: TurboTax is the WORST

Sarahjane, I agree with you that Intuit is bad, but I don't know if it's the worst--or if the others are really any better. I'm using H&R Block currently but haven't yet experienced the kind of problem that would test their tech support. (Other problems, yes--a year or two ago the H&R Block ...
by nisiprius
Sun Mar 22, 2015 9:00 am
 
Forum: Personal Finance (Not Investing)
Topic: TurboTax is the WORST
Replies: 6
Views: 1747

Re: How important is an international allocation?

RevYoung, it's an insoluble problem. It takes a while to appreciate just how little is known about investing and just how much the people who give advice exaggerate the certainty and the precision of their opinions. Here are some of the random conflicting considerations that have been rattling aroun...
by nisiprius
Sun Mar 22, 2015 6:02 am
 
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 66
Views: 4557

Re: Dip? What Dip? Did you catch it?

...Were you overweight because of pork bellies?.. I was absolutely devastated when trading in pork bellies came to an end in 2011. There is just no other commodity name as droll. We can use "Rough rice" or "Random length lumber" or "Henry Hub Natural Gas" but they're j...
by nisiprius
Sat Mar 21, 2015 8:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dip? What Dip? Did you catch it?
Replies: 134
Views: 11621

Re: Need a new sub-forum for guns?

Petrocelli wrote:Can we also have a separate forum for watches?
If guns and watches were in separate forums, where would you post questions about gun-watches?
Image
by nisiprius
Sat Mar 21, 2015 4:31 pm
 
Forum: Forum Issues and Administration
Topic: Need a new sub-forum for guns?
Replies: 17
Views: 1590

Re: What Behavior Gap?

John C. Bogle had an interesting chart that seemed to show that the behavior gap was quite systematic, and was larger and larger for the more and more volatile and speculative asset classes. For Fidelity Contrafund investor returns are lower than fund (stay-the-course) returns over every time perio...
by nisiprius
Sat Mar 21, 2015 12:59 pm
 
Forum: Investing - Theory, News & General
Topic: What Behavior Gap?
Replies: 23
Views: 1858

Re: The Most Likely Portfolio Peril — Inflation or Deflation

...Deflation is different. It is not just lower prices but also lower demand for money. Why would people need less money? A stale and stagnate economy. This is the very much minority (some would say "crank") attempt to redefine inflation as an increase in the money supply trumpeted by the...
by nisiprius
Sat Mar 21, 2015 5:13 am
 
Forum: Investing - Theory, News & General
Topic: The Most Likely Portfolio Peril — Inflation or Deflation?
Replies: 40
Views: 3785

Re: The Most Likely Portfolio Peril — Inflation or Deflation

The question that arises in my mind is, in general, to a rough first approximation and ignoring taxation etc. what is the effect of inflation and deflation on a) real returns of stocks, b) real returns of bonds, c) the premium of stocks over bonds? Dimson, Marsh and Staunton reported on the real re...
by nisiprius
Sat Mar 21, 2015 5:06 am
 
Forum: Investing - Theory, News & General
Topic: The Most Likely Portfolio Peril — Inflation or Deflation?
Replies: 40
Views: 3785

Re: What Behavior Gap?

John C. Bogle had an interesting chart that seemed to show that the behavior gap was quite systematic, and was larger and larger for the more and more volatile and speculative asset classes. For Fidelity Contrafund investor returns are lower than fund (stay-the-course) returns over every time period...
by nisiprius
Fri Mar 20, 2015 7:35 pm
 
Forum: Investing - Theory, News & General
Topic: What Behavior Gap?
Replies: 23
Views: 1858

Re: Cryptocurrency

1) One of the characteristics of any useful currency is a reasonably stable value. Since bitcoin and other cryptocurrencies do not even make an attempt to have a stable value, I conclude that whatever their purpose actually is, usability as a "currency" is not one of them. 2) The number of...
by nisiprius
Fri Mar 20, 2015 5:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Cryptocurrency
Replies: 8
Views: 959

Re: The Most Likely Portfolio Peril — Inflation or Deflation

I'm really enjoying your thought-provoking posts, simplegift. The question that arises in my mind is, in general, to a rough first approximation and ignoring taxation etc. what is the effect of inflation and deflation on a) real returns of stocks, b) real returns of bonds, c) the premium of stocks o...
by nisiprius
Fri Mar 20, 2015 5:42 am
 
Forum: Investing - Theory, News & General
Topic: The Most Likely Portfolio Peril — Inflation or Deflation?
Replies: 40
Views: 3785

Re: [Poll] Do you have and auto loan?

We financed our cars from my first in 1967 to about 1983. Ever since then we've paid cash. We used the system of getting a three-year loan, and when the loan was paid, arrange for automatic withdrawals of the same amount from our checking account every month, into a savings account. That became the ...
by nisiprius
Thu Mar 19, 2015 7:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Poll] Do you have an auto loan?
Replies: 70
Views: 4049

Re: Anyone concerned about their bond holdings?

seems like an interest hike may be on the near horizon. some are saying June perhaps I have hear this rumor since 2008. Well, the interest rates that affect Vanguard Total Bond Fund did go up in 2013--the 10-year Treasury rate increased by 1.5% or doubled, whichever way you want to look at it. If y...
by nisiprius
Thu Mar 19, 2015 5:15 pm
 
Forum: Investing - Theory, News & General
Topic: Anyone concerned about their bond holdings?
Replies: 58
Views: 5674

Re: Is this Investing or Speculating?

Just my $0.02. I would say that it is "speculating" if your reason for investing in VGK is that you believe it will go up in price because you believe it is undervalued--you believe you have seen something about "Europe" that most investors, including professional institutional i...
by nisiprius
Thu Mar 19, 2015 6:42 am
 
Forum: Investing - Theory, News & General
Topic: Is this Investing or Speculating?
Replies: 24
Views: 2015

Re: Our new voice land line keeps getting FAX calls.

I was just visiting an older uncle who 2 years ago move into an assisted living apartment. When they moved in, they were given a Verizon land line. They received a new number - not the number they had used in their old home for many years. BTW, they want to keep the land line - they have no interes...
by nisiprius
Wed Mar 18, 2015 8:31 pm
 
Forum: Personal Consumer Issues
Topic: Our new voice land line keeps getting FAX calls.
Replies: 11
Views: 1049

Re: Interest rate hike signaled

I don't know what is and isn't possible, but please for future reference remember that bond ETFs went up when "an interest rate hike was signaled." File it as yet another reason to take all statements like "when X happens, Y tends to do Z" with a grain of salt.
by nisiprius
Wed Mar 18, 2015 2:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Interest rate hike signaled
Replies: 25
Views: 2237

Re: how often do you check performance?

Maybe a couple of times a year. Yes, if the stock market is in the process of plunging, more often than that.
by nisiprius
Tue Mar 17, 2015 2:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: how often do you check performance?
Replies: 50
Views: 2666

Re: Is MicroCap on sale?

Countmein, would you mind taking a moment to state, as clearly as you can, what it means to you to stay that MicroCap (or anything else) is "on sale?" Who has reduced the price? What is their motivation for reducing the price? How do you know that MicroCap is the same thing it used to be a...
by nisiprius
Tue Mar 17, 2015 10:20 am
 
Forum: Investing - Theory, News & General
Topic: Is MicroCap on sale?
Replies: 11
Views: 1392

Re: Why Funds Over ETFs?

The interesting thing is that I totally agree with livesoft's analysis, and he prefers ETFs and I prefer mutual funds, mostly for the reasons a, b, and c which he mentions above. I'd add one other reason--it always seemed disrespectful to my employer to place trades during working hours, and mutual ...
by nisiprius
Tue Mar 17, 2015 8:53 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Funds Over ETFs?
Replies: 57
Views: 5347

Re: Which Financial Economic theory says ....

There's a discussion of it in the not-so-great investing textbook I bought second-hand, and the basic idea is laid out here. I about 1/3-understand it: The Market Portfolio It has something or other to do with the Capital Asset Pricing Model, "CAPM," which was developed (in part?) by Sharp...
by nisiprius
Tue Mar 17, 2015 8:30 am
 
Forum: Investing - Theory, News & General
Topic: Which Financial Economic theory says ....
Replies: 6
Views: 618

Re: Best investment in a deflationary scenario

I continue to be puzzled by investing concerns with regard to deflation. Do you need the "best" investment in a deflationary scenario? Since deflation is as hard to predict as anything else, do people hope they will be able to see deflation in advance, and wish to score a win over other in...
by nisiprius
Tue Mar 17, 2015 7:20 am
 
Forum: Investing - Theory, News & General
Topic: Best investment in a deflationary scenario
Replies: 11
Views: 1308

Re: Poll: When to pay down debt rather than invest

I never saw it as an either/or, before-or-after decision. We always did both, more or less on autopilot. I chose 0% because while I don't think all debt should be fully repaid before doing any investing, I do think that all debt should be fairly aggressively paid down, staying the course, according ...
by nisiprius
Tue Mar 17, 2015 5:38 am
 
Forum: Investing - Theory, News & General
Topic: Poll: When to pay down debt rather than invest
Replies: 49
Views: 3925
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