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Re: Harvest Krane Intermediate Bond Fund

What you may be missing is that interest rates have already increased . I don't care about the overnight lending rate, I care about the interest rate over periods of time similar to the maturity of the bonds in my Total Bond. This is what happened to the 10-year Treasury rate over the last 12 months...
by nisiprius
Fri Apr 18, 2014 12:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Harvest Krane Intermediate Bond Fund
Replies: 4
Views: 172

Re: Gold vs. Bonds as an Asset Allocation Hedge

*bump* Was searching the forums for almost this exact question. Does anyone know if the debate has progressed any further in the last two-and-a-half years? The scenario in which I am specifically interested is: For a new investor with 90-100% cash position, if they decided to go lump sum instead of...
by nisiprius
Fri Apr 18, 2014 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Gold vs. Bonds as an Asset Allocation Hedge
Replies: 14
Views: 870

Re: Let's say we live for 150 years...

1) In looking at equities, you have to be careful about survivorship bias. Of the 22 countries included by Dimson & al. in the 2013 Credit Suisse yearbook , 2 of them went to zero sometime between 1900 and today. They weren't zero at the beginning, and they weren't zero at the end, but if you in...
by nisiprius
Fri Apr 18, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: Let's say we live for 150 years...
Replies: 12
Views: 1557

Re: Let's say we live for 150 years...

Thanks Rick! Since Universities expect to live for 150 years, their behavior is likely a good clue to how investors would/should invest if they had longer time-horizons. It seems that buying forests is the way to go. On that theory, it would seems that investing their day-to-day operating funds nee...
by nisiprius
Fri Apr 18, 2014 11:03 am
 
Forum: Investing - Theory, News & General
Topic: Let's say we live for 150 years...
Replies: 12
Views: 1557

Re: Retirement defeasance

And I don't think you can get zero coupon TIPS, which is what you actually need.
by nisiprius
Thu Apr 17, 2014 9:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement defeasance
Replies: 14
Views: 1140

Re: High Yield Bonds as an Annuity?

David, is it the result of bonds in the portfolio literally defaulting, or is it a result of their market price dropping because investors see an impending default, and the fund manager selling at a loss rather than waiting for the default? For example, if a fund manager had a policy of maintaining ...
by nisiprius
Thu Apr 17, 2014 9:36 pm
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1537

Re: The dangers of backtesting and overfitting data - paper

Thanks, great article. If your stock portfolio varies much from the market weighting, you're probably a backtest victim. A core problem is the publish-or-perish nature of academia, which results in smart people wasting large amounts of time pouring over historical returns looking for patterns. The ...
by nisiprius
Thu Apr 17, 2014 8:16 pm
 
Forum: Investing - Theory, News & General
Topic: The dangers of backtesting and overfitting data - paper
Replies: 18
Views: 812

Re: How high of an allocation to REITs?

Rick Ferri has an excellent blog post that addresses your questions: http://www.rickferri.com/blog/investments/reits-and-your-portfolio/ The 4th paragraph answers a big question of yours, basically saying that if you already own Total Stock Market (which has ~3% REITs), then an additional 10% REIT ...
by nisiprius
Thu Apr 17, 2014 7:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: How high of an allocation to REITs?
Replies: 18
Views: 1536

Re: Does this strategy invite unnecessary risk?

DFA SV Thanks thx, but what does DFA stand for? Dimensional Fund Advisors. See http://www.bogleheads.org/wiki/DFA . The two mutual fund companies most committed, institutionally, to passive investing are DFA and Vanguard. I have never read anything about anyone at Vanguard calling DFA a rival, or a...
by nisiprius
Thu Apr 17, 2014 5:17 pm
 
Forum: Investing - Theory, News & General
Topic: Does this strategy invite unnecessary risk?
Replies: 26
Views: 1391

Re: global bond index funds

It makes sense for the same reason market cap weighting stock funds makes sense: special finance theory characteristics of "the market portfolio." People can and do argue about this--why do I want to put the most money what are likely the most overvalued stocks, etc.
by nisiprius
Thu Apr 17, 2014 3:55 pm
 
Forum: Investing - Theory, News & General
Topic: global bond index funds
Replies: 2
Views: 371

Re: The dangers of backtesting and overfitting data - paper

This sounds like a bombshell to me: "Under memory effects, backtest overfitting leads to negative expected returns out-of-sample, rather than zero performance. This may be one of several reasons why so many quantitative funds appear to fail." I need to take the time to actually read the pa...
by nisiprius
Thu Apr 17, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: The dangers of backtesting and overfitting data - paper
Replies: 18
Views: 812

Re: I need a new coffee maker, any recommendations?

It's wretchly expensive and I had to replace the wretchedly expensive thermal carafe after about 5 years, but apart from that my Technivorm Moccamaster has been completely satisfactory. I used to use expensive Gevalia Stockholm Roast brewed in a Mr. Coffee. Now I use cheap Folger's Classic brewed in...
by nisiprius
Thu Apr 17, 2014 3:39 pm
 
Forum: Personal Consumer Issues
Topic: I need a new coffee maker, any recommendations?
Replies: 57
Views: 1858

Re: Does this strategy invite unnecessary risk?

Actually you are in luck as I believe Larry Swedroe is just about to publish a book about on this very topic within the next few months. Yes, see this thread.

In general, fortunately, Swedroe is an an unusual surname and just about any kind of search you do will lead you to his books and articles.
by nisiprius
Thu Apr 17, 2014 2:08 pm
 
Forum: Investing - Theory, News & General
Topic: Does this strategy invite unnecessary risk?
Replies: 26
Views: 1391

Re: Where are the Opportunities now ?

...What did you guys do when Buffett famously wrote the NY times article ? - http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=0 Please understand I am trying to understand ideology here and trying to reconcile between 2 different lines of thoughts and investing... I did nothing in partic...
by nisiprius
Thu Apr 17, 2014 1:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are the Opportunities now ?
Replies: 28
Views: 1767

Re: Where are the Opportunities now ?

HelloImAMac wrote:... based on some advice from Brett Arends....
He is one of many sources of the noise we are told here that we should tune out.

Don't be an Arendshead.

Reading his stuff is like reading about the latest fashion trends. Pssst... the opportunities are going to be in Radiant Orchid this year.
by nisiprius
Thu Apr 17, 2014 1:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where are the Opportunities now ?
Replies: 28
Views: 1767

Re: High Yield Bonds as an Annuity?

...I have seen discussions about the inherent NAV erosion in VWEHX, which apparently is something deliberate on the part of the Wellington managers. I can't remember the exact cause, though I believe it has something to do with managing bond purchases and sales only with income in mind, at a detrim...
by nisiprius
Thu Apr 17, 2014 7:52 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1537

Re: What % of stock market "drive" is gambling?

As a life long gambler, dog racing easily equates to the highest percentage of gambling-only interest level that I've ever seen. The first time I attended Flagler Dog Track in Miami when I was a junior in high school I couldn't believe how boring it was. I tried to handicap it like a horse race and...
by nisiprius
Wed Apr 16, 2014 10:54 pm
 
Forum: Investing - Theory, News & General
Topic: What % of stock market "drive" is gambling?
Replies: 36
Views: 3311

Re: Doesn't Matter - Does Matter - Good Post by Ben Carlson

Yes, that's really very good. Let me point to this one:
Doesn’t Matter: How much risk everyone else takes.
Does Matter: How much risk you are willing and able to take.
by nisiprius
Wed Apr 16, 2014 7:19 pm
 
Forum: Investing - Theory, News & General
Topic: Doesn't Matter - Does Matter - Good Post by Ben Carlson
Replies: 24
Views: 2498

Re: Why does Vanguard use average return iso compound annual

A Google search on def:average yields the following results. I am going to look at the first ten. I am going to read each one until I come to the first sentence that specifies how to do a calculation. (And I will take the words "arithmetic mean" as specifying that, because, at least at the...
by nisiprius
Wed Apr 16, 2014 5:35 pm
 
Forum: Investing - Theory, News & General
Topic: Why does Vanguard use average return iso compound annual?
Replies: 99
Views: 4078

Re: Why are total bond market funds so often recommended?

If you look at real return, correcting for inflation, the long-term charts for 1940-1980 for intermediate-term bonds are quite bad, but the long-term charts for long -term bonds are worse. You can quibble about the pros and cons of TIPS, but locking yourself into a fixed -dollar instrument for two o...
by nisiprius
Wed Apr 16, 2014 12:32 pm
 
Forum: Investing - Theory, News & General
Topic: Why are total bond market funds so often recommended?
Replies: 52
Views: 4157

Re: Why does Vanguard use average return iso compound annual

Well, I just sent this via the SEC's "feedback" page . I'm not going to hold my breath waiting for results, but at least I've tried. How would someone request a change (improvement!) in the language mandated by the SEC for mutual fund disclosures? There's a long discussion in the "Bog...
by nisiprius
Wed Apr 16, 2014 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: Why does Vanguard use average return iso compound annual?
Replies: 99
Views: 4078

Re: High Yield Bonds as an Annuity?

...When it comes to stock investing, I have heard so many people on this forum say that it is foolish to focus on stocks that pay high dividends, because it is only the total return that matters, and anyone who focuses on dividends is fooling themselves into thinking that dividends are some magic f...
by nisiprius
Wed Apr 16, 2014 11:10 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1537

Re: Please Help me understand the 3-fund portfolio

To my original reason for this post, I am trying to understand the basic reason for a 3 fund portfolio. Do people use the 3 fund portfolio because two funds (listed above) are expected to increase if one fund were to fall (for example, if the US Stock Market drops by 30%, do people expect the Bond ...
by nisiprius
Wed Apr 16, 2014 10:59 am
 
Forum: Investing - Theory, News & General
Topic: Please Help me understand 3-fund portfolio
Replies: 21
Views: 1915

Re: High Yield Bonds as an Annuity?

...Would it then be reasonable to take this a stage further and use High Yield Bonds for income later in life, ignore potential capital loss in the same way those who buy an annuity say goodbye to the capital?... I think this is the answer. This is a chart of VWEHX, Vanguard High-Yield Bond Fund, d...
by nisiprius
Wed Apr 16, 2014 9:54 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1537

Re: High Yield Bonds as an Annuity?

In the case of high-yield bonds, if you actually spend all of the dividends, I would be worried about what is happening to the value of the portfolio. High yield bonds "overspend." From a total return point of view, the dividends are some kind of withdrawal from total return. How big they ...
by nisiprius
Wed Apr 16, 2014 9:38 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1537

Re: Why are total bond market funds so often recommended?

I doubt there's much harm or much good in going with 100% treasuries. The question is this: what are the chances that there will come a time when your wife runs across some article in the dentist's office saying something like this article said in 2010: Ten years ago we experienced the biggest bubbl...
by nisiprius
Wed Apr 16, 2014 7:43 am
 
Forum: Investing - Theory, News & General
Topic: Why are total bond market funds so often recommended?
Replies: 52
Views: 4157

Re: Looking for Low-Cost Eyeglass Shop I can visit

My wife has been using Costco for several years and has been very satisfied with them.
by nisiprius
Wed Apr 16, 2014 7:20 am
 
Forum: Personal Consumer Issues
Topic: Looking for Low-Cost Eyeglass Shop I can visit
Replies: 25
Views: 1283

Re: making your own will or trust

The real question that needs to be asked is not whether anyone has had experience in writing your own will, but whether anyone has had experience being the executor or heir of someone who wrote their own will . One can say whether one has written their own will, but not how well it worked in the end!
by nisiprius
Wed Apr 16, 2014 6:52 am
 
Forum: Personal Finance (Not Investing)
Topic: making your own will or trust
Replies: 29
Views: 1563

Re: Stocks: How Bad It Can Get

Calm Man, the correction was roughly from 16,600 down to 16,000 on the DOW but the news media really played it up and people scare easily. I know it was roughly 3% but when the media gets a hold of that watch out. A 30% correction will cause some folks to get religion. 1) Since when is a 3-4% drop ...
by nisiprius
Tue Apr 15, 2014 10:43 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: How Bad It Can Get
Replies: 72
Views: 5309

Re: Why You Shouldn't Fear Japan

That's very interesting and new, or certainly new to me.

What was your data source, was it no-cost or do you have access to some subscription service?
by nisiprius
Tue Apr 15, 2014 10:23 pm
 
Forum: Investing - Theory, News & General
Topic: Japan Does not Show That Stocks are Dangerous
Replies: 79
Views: 3780

Re: Inflation adjusted charts and historical fund data.

I don't know of such a tool. I wish there were one. Morningstar lets you choose a couple of dozen currencies and does currency conversion, I wonder why they can't include constant dollars as one such "currency?" I assume you already know how to download CPI-U itself directly from the BLS w...
by nisiprius
Tue Apr 15, 2014 9:37 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation adjusted charts and historical fund data.
Replies: 3
Views: 325

Re: TIAA-CREF is buying Nuveen?

I didn't parse the "power of .ORG" campaign too closely, but surely TIAA-CREF still claims to be non-profit? Please don't tell me I was taken in by a campaign whose whole purpose was to make me think it was a non-profit when it wasn't... For what it's worth, and I have a pretty high regard...
by nisiprius
Tue Apr 15, 2014 8:33 pm
 
Forum: Investing - Theory, News & General
Topic: TIAA-CREF is buying Nuveen?
Replies: 44
Views: 2431

Re: VTI vs. VTSAX

See http://www.bogleheads.org/wiki/ETFs_vs_mutual_funds for a capsule summary. The differences are microscopic and unimportant. But no difference however microscopic seems unimportant to a devotee, so there are perennial arguments. It absolutely boils down to convenience and personal taste. People w...
by nisiprius
Tue Apr 15, 2014 8:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: VTI vs. VTSAX [Vanguard Total Stk Mkt: ETF vs. Mutual Fund]
Replies: 7
Views: 988

Re: Can this 4% CD be trusted?

The ad itself states there is a 1.25% APY and a 2.75% bonus. It also states that they require a $15k deposit. There you go. The only remaining question is how much you are allowed to invest in the CD. I can't quite read the fine print but I'm thinking the $15,000 is probably the limit. So, you inve...
by nisiprius
Tue Apr 15, 2014 4:48 pm
 
Forum: Investing - Theory, News & General
Topic: Can this 4% CD be trusted?
Replies: 21
Views: 2389

Re: Why are total bond market funds so often recommended?

It's pretty easy... same reason as for the S&P 500. The Barclay's, formerly Lehman Brothers, Aggregate Index is an historically important, familiar index that was basically the first important, good-faith, well-founded effort to capture an entire market. As such, it has more data and history beh...
by nisiprius
Tue Apr 15, 2014 4:29 pm
 
Forum: Investing - Theory, News & General
Topic: Why are total bond market funds so often recommended?
Replies: 52
Views: 4157

Re: Can this 4% CD be trusted?

Your image link doesn't work... if the ad is for a rather short-term CD, it is probably something close to a scam. The scam is not exactly the CD itself. Nor is it the interest rate, but the CD doesn't have that rate, it is for a much lower rate and the firm running the ad cuts you a check for the d...
by nisiprius
Tue Apr 15, 2014 2:13 pm
 
Forum: Investing - Theory, News & General
Topic: Can this 4% CD be trusted?
Replies: 21
Views: 2389

Re: A portfolio with a 7% yield? Your thoughts?

Don't you mean "has had?" Actually the article itself is making my head spin--I can't tell whether his return and volatility numbers are even accurate numbers about past history. And, of course, every time you tweak the portfolio, and it sounds as if he does that constantly, you invalidate...
by nisiprius
Tue Apr 15, 2014 1:53 pm
 
Forum: Investing - Theory, News & General
Topic: A portfolio with a 7% yield? Your thoughts?
Replies: 9
Views: 1012

Re: NYTimes: Inexpensive Advice for Index-Fund Investments

DARN, which I could remember it... flipping through some money magazine in a dentist's office there was an article that mentioned the very salient point that several firms like Wealthfront and Betterment have already folded . I have of course also forgotten (YES, I'm old) the names of the firms... t...
by nisiprius
Tue Apr 15, 2014 1:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: NYTimes: Inexpensive Advice for Index-Fund Investments
Replies: 15
Views: 2370

Re: Stocks: How Bad It Can Get

I do not know the answer to this question, but if you were diversified going into the great depression (actually the market initial crash) how much buying power did you have afterwards. For example, if you had cash in some form, government bonds, cash under the mattress, how much more buying power ...
by nisiprius
Tue Apr 15, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: How Bad It Can Get
Replies: 72
Views: 5309

Re: gold , silver, copper and uranium only

So, to be clear, what gold, silver, copper and uranium have in common is that they have all had recent... how to say this... let me think... :wink:
big upward bountiful bets, letting everyone speculate?
by nisiprius
Tue Apr 15, 2014 1:31 pm
 
Forum: Investing - Theory, News & General
Topic: gold , silver, copper and uranium only
Replies: 46
Views: 2226

Re: Stocks: How Bad It Can Get

Clearly_irrational, I believe it is always that way. It is what is sometimes euphemistically called the "business cycle." The idea of some golden age when things were "normal" is a fantasy.
by nisiprius
Tue Apr 15, 2014 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: How Bad It Can Get
Replies: 72
Views: 5309

Re: Stocks: How Bad It Can Get

Chart in the Economist http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-7 of the peak to trough decline in the American and British stock markets (local currency) during select financial crises. A graphic reminder that the stock market can fall pretty far. Also a reminder that the 2...
by nisiprius
Tue Apr 15, 2014 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: How Bad It Can Get
Replies: 72
Views: 5309

Re: Asness & Fama on Bloomberg TV NOW

JUST tuned in... Bogle: HFT on balance is a plus... there needs to be more transparency... they should be reporting (something) to the SEC... trading ahead of someone is a problem, it's equivalent to, his words, "inside information." When he started the fund, he says he never heard of Fama...
by nisiprius
Tue Apr 15, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: Asness & Fama on Bloomberg TV NOW
Replies: 23
Views: 1123

Re: Why is mid-cap discussed so much less than large and sma

I will say that a lot of the talk is associated with a region of the financial thinking universe that orbits around Fama and French, and that the mutual fund company DFA (Dimensional Fund Advisors) orbits around Fama and French, and DFA does not appear to have any mid-cap funds, so I guess that mid...
by nisiprius
Tue Apr 15, 2014 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Why is mid-cap discussed so much less than large and small?
Replies: 19
Views: 1224

Re: Why is mid-cap discussed so much less than large and sma

It is an interesting question, because, as is so often the case, the growth charts don't match the talk. The talk is all "small" and "small value" and "heavy factor loading." But a casual lay glance suggests that the differences between "large" and "not l...
by nisiprius
Tue Apr 15, 2014 10:01 am
 
Forum: Investing - Theory, News & General
Topic: Why is mid-cap discussed so much less than large and small?
Replies: 19
Views: 1224

Re: SCV premium is a history/math story, its not scientific

...First, "There are an "infinite number of strategies worse than this one" is vacuously true. I would reword it slightly: there are an infinite number of strategies that cannot be proved to be better or worse than this one. Even in hindsight, the other strategies will either have do...
by nisiprius
Mon Apr 14, 2014 9:14 pm
 
Forum: Investing - Theory, News & General
Topic: SCV premium is a history/math story, its not scientific
Replies: 46
Views: 2228

Re: gold , silver, copper and uranium only

Osmium is where the real money is. Well, when they find some more uses for it. One of the rarest metals and the most dense of naturally occurring elements. I am stockpiling fountain pen tips just in case fusion or the space elevator depends on heavy use of Osmium. You never know. I will always have...
by nisiprius
Mon Apr 14, 2014 8:56 pm
 
Forum: Investing - Theory, News & General
Topic: gold , silver, copper and uranium only
Replies: 46
Views: 2226

Re: TIAA-CREF is buying Nuveen?

...What remains to be see is whether TIAA/CREF just treats Nuveen as a holding and lets it operate independently or whether they will attempt to integrate Nuveen's financial products... Let's say you want an index fund that tracks the S&P 500. Institutional shares: TIAA-CREF, TIEIX, 0.06%. Nuve...
by nisiprius
Mon Apr 14, 2014 8:44 pm
 
Forum: Investing - Theory, News & General
Topic: TIAA-CREF is buying Nuveen?
Replies: 44
Views: 2431

Re: SCV premium is a history/math story, its not scientific

Oh, and of course we always need to remember that...

"Investing is not a science."--John C. Bogle, Clash of the Cultures, p. 1.

Image
by nisiprius
Mon Apr 14, 2014 5:21 pm
 
Forum: Investing - Theory, News & General
Topic: SCV premium is a history/math story, its not scientific
Replies: 46
Views: 2228

Re: Bitcoin knockoff

Chaz, according to Wikipedia there are at least sixty "bitcoin knockoff" cryptocurrency systems, including nine that they call "notable:" Bitcoin, Ripple, Litecoin, Peercoin, Dogecoin, Mastercoin, Namecoin, Auroracoin, and Primecoin. I suppose one of the attractive features is th...
by nisiprius
Mon Apr 14, 2014 4:03 pm
 
Forum: Investing - Theory, News & General
Topic: Bitcoin knockoff
Replies: 6
Views: 646
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