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Re: Poll: Which Happens First - DOW > 20,000 or DOW < 14,000

This poll is providing me an opportunity to use a predictive technique I've been working on involving lots of math and science stuff. I assure you that to describe would involve lots of big words -- many of which are three, four, or five syllables. I am still tweaking this methodology (five syllabl...
by nisiprius
Thu Jul 24, 2014 10:04 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Which Happens First - DOW > 20,000 or DOW < 14,000?
Replies: 32
Views: 2584

Re: Mutual fund account with Vanguard or MerrillEdge?

I just don't believe it's good to get in the habit of stealing worms off hooks. I don't see anything particularly dangerous about stealing this particular worm off this particular hook. The worst that could happen is that you somehow you just never get around to leaving Merrill. But signing bonuses ...
by nisiprius
Thu Jul 24, 2014 6:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Mutual fund account with Vanguard or MerrillEdge?
Replies: 24
Views: 569

Re: Investing strategy should "gel" around midlife?

What about the introduction of new products such as ETFs or even Total Int'l Stock Index fund? Or suppose Vanguard introduces Life Strategy Admiral in the future? Or Target Retirement Tax-managed with muni bonds? Or Target Retirement Slice-and-Dice-Larry-Ferri-Tax-Managed fund? Well, I did say &quo...
by nisiprius
Thu Jul 24, 2014 3:04 pm
 
Forum: Investing - Theory, News & General
Topic: "Gel" investment strategy around midlife?
Replies: 5
Views: 584

"Gel" investment strategy around midlife?

Responsible discussions of investing strategy rely on long-term data. When there are new discoveries of improved investing strategies, based on long-term data, should an individual investor change their strategy in response? Here is a vague handwaving argument to suggest that investors should "...
by nisiprius
Thu Jul 24, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: "Gel" investment strategy around midlife?
Replies: 5
Views: 584

Re: Dividend Growth Investing vs Index Funds

As many dividend stock advocates do, he is just saying "I vastly prefer stockpicking to indexing." (Warning, strawman alert) The dividend song typically goes: yes, dividend stocks are better than other stocks. It's true that none of the dividend oriented index funds and ETFs look that grea...
by nisiprius
Thu Jul 24, 2014 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: Dividend Growth Investing vs Index Funds
Replies: 14
Views: 979

Re: Can I buy insurance against bank failure?

There are a few smallish banks in Massachusetts that advertise "deposits insured in full," e.g. Marblehead Bank customers have the added comfort of knowing their funds are fully insured. The FDIC insures all deposits up to $250,000 per depositor relationship. All deposit amounts above the ...
by nisiprius
Thu Jul 24, 2014 11:06 am
 
Forum: Personal Finance (Not Investing)
Topic: Can I buy insurance against bank failure?
Replies: 10
Views: 593

Re: favorite bogleheads posts?

I nominate Taylor Larimore's post, Safe Withdrawal Rates ? Complexity vs. Simplicity.
by nisiprius
Thu Jul 24, 2014 9:26 am
 
Forum: Local Chapters and Bogleheads Community
Topic: favorite bogleheads posts?
Replies: 24
Views: 1578

Re: Bonds beat stocks over the last 15 years

Yes, for me, one of the big puzzles in investing is just how to approach the "long term" data. All of the impressive numbers involve an implicit assumption that a) the long-term future WILL resemble the long-term past, and that b) you, the individual investor hoping to tip your odds a bit ...
by nisiprius
Thu Jul 24, 2014 9:12 am
 
Forum: Investing - Theory, News & General
Topic: Bonds beat stocks over the last 15 years
Replies: 37
Views: 2541

Re: Van. total bond vs intermediate

I'm assuming this is actually Vanguard Intermediate-Term Bond Index because there are other Vanguard intermediate-term bond funds. What Taylor said, but since he's given the short answer I'll give a long one. I honestly don't think its possible or meaningful to decide which is actually better for an...
by nisiprius
Thu Jul 24, 2014 9:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Van. total bond vs intermediate
Replies: 6
Views: 616

Re: Saudi Arabia?

If you want to include it in proportion to market cap, I suspect that 0% is pretty darn close already. If you want to overweight it you are reading different information than I am. MSCI considers Saudi Arabia to be a "frontier market." I can't remember where I read it, but "frontier ...
by nisiprius
Thu Jul 24, 2014 8:07 am
 
Forum: Investing - Theory, News & General
Topic: [Saudi Arabian stock exchange to open to foreign investors]
Replies: 18
Views: 1225

Re: Saudi Arabia?

joe8d wrote:What would be there to invest in ?
Off the top of my head, SABIC (SAudi Basic Industries Corporation).
by nisiprius
Wed Jul 23, 2014 11:09 pm
 
Forum: Investing - Theory, News & General
Topic: [Saudi Arabian stock exchange to open to foreign investors]
Replies: 18
Views: 1225

Re: Where is your brokerage account?

It's my opinion that the most convenient option is for you is probably to open a mutual fund account at Vanguard--not a brokerage account, you don't need that, just a mutual fund account--and arrange for "automatic purchase" out of your regular bank account. That is, you can tell Vanguard ...
by nisiprius
Wed Jul 23, 2014 4:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where is your brokerage account?
Replies: 35
Views: 1788

Re: Poll: Which Happens First - DOW > 20,000 or DOW < 14,000

Poll: Which happens first, closing price of NASDAQ ending in .42 or .24? Answer choices. Choose any sixteen. You may change your answers before or after voting. For "pheasant," read "peasant" throughout. ⋅ Yes. ⋅ Reply hazy, try again. ⋅ .24 on IEX, ...
by nisiprius
Wed Jul 23, 2014 2:27 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Which Happens First - DOW > 20,000 or DOW < 14,000?
Replies: 32
Views: 2584

Re: Some charts of asset classes during downturn or key even

I charge them guilty of "tense crime"--using the present tense (how well DO they work, how markets REACT) instead of the past (how well HAVE they worked, how markets HAVE REACTED).

(Well actually I guess I mean "present perfect" tense, not the "past.")
by nisiprius
Wed Jul 23, 2014 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Some charts of asset classes during downturn or key events
Replies: 3
Views: 334

Re: International Allocation in some funds...

Well, chalk it up to "Portfolio Watch sucks." Because the situation with PRIMECAP seems clear. Of course one of the issues with any active fund is that it more or less does what it likes, and when I read Vanguard's product summary it all seems like vague blarney. However, it says nothing a...
by nisiprius
Wed Jul 23, 2014 10:46 am
 
Forum: Investing - Theory, News & General
Topic: International Allocation in some funds...
Replies: 18
Views: 762

Re: International Allocation in some funds...

It's ALWAYS interesting to try to verify information. It almost always yields surprises. 1) As others have noted, the S&P 500 itself includes several non-US companies, one of them (eyeballing Wikipedia's list) being: TEL, TE Connectivity Ltd., Schaffhausen, Switzerland 2) As already noted, S&...
by nisiprius
Wed Jul 23, 2014 10:13 am
 
Forum: Investing - Theory, News & General
Topic: International Allocation in some funds...
Replies: 18
Views: 762

Re: Inheritance: Cash or Investments?

Probably cash, but perhaps for different reasons than others have suggested. I suggest you do what seems a) least stressful, and b) gives you the longest time period before you need to make any other investment decisions. Large life changes are stressful, even positive ones. Inheriting money often i...
by nisiprius
Wed Jul 23, 2014 8:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Inheritance: Cash or Investments?
Replies: 15
Views: 1275

Re: Opinions - What to do with $50k for 12mos

I would leave it in the bank. The SEC yield of Vanguard Short Term Bond Index fund is 0.80%, and over a time period as short as a year it can and has lost money. http://s7.postimg.org/oo82gllq3/Screen_Shot_2014_07_22_at_10_07_19_PM.png Not a lot of money, but imagine how silly you'd feel, making a m...
by nisiprius
Tue Jul 22, 2014 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Opinions - What to do with $50k for 12mos
Replies: 8
Views: 858

Re: If Argentina Defaults

It is a common fantasy to suppose that you can get an edge on the market by making use of headline news that everybody else knows, too. (How much of an "insider" can BusinessInsider be if I can read it?) In novels, businessmen are always saying things like "What's this in the New York...
by nisiprius
Tue Jul 22, 2014 9:51 pm
 
Forum: Investing - Theory, News & General
Topic: If Argentina Defaults
Replies: 21
Views: 1904

Re: New 10-Year TIPS Auction July 24 2014

Some of my old TIPS just matured and I am going to roll about half of them over. My order is in at Vanguard. I can't think of anything better to do, it's sorta kinda my plan, and I'm more or less sticking to it. My life expectancy is around 20 years at this point. I don't like the rates on the 10-y...
by nisiprius
Tue Jul 22, 2014 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: New 10-Year TIPS Auction July 24 2014
Replies: 17
Views: 1530

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

Remember I said Faber was just repeating a standard "talking point" against index funds? Here is an article published 06/27/2002 by Jon (not the late Robert) Markman: The S&P 500 Is A Mutual Fund--and a Bad One At That The S&P 500 Is Not Passive at All... an eight-person committee ...
by nisiprius
Tue Jul 22, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3458

Re: P/E Ratio: How do YOU interpret/use it?

As many studies have shown, P/Es have some predictive power - above average P/Es signal below average future returns more often than not. You can also use them cross sectionally - in 2001, large caps had high P/Es vs small caps, and small caps did indeed have a run. Today the situation is reversed,...
by nisiprius
Tue Jul 22, 2014 12:14 pm
 
Forum: Investing - Theory, News & General
Topic: P/E Ratio: How do YOU interpret/use it?
Replies: 26
Views: 1325

Re: New 10-Year TIPS Auction July 24 2014

Some of my old TIPS just matured and I am going to roll about half of them over. My order is in at Vanguard. I can't think of anything better to do, it's sorta kinda my plan, and I'm more or less sticking to it. My life expectancy is around 20 years at this point. I don't like the rates on the 10-ye...
by nisiprius
Tue Jul 22, 2014 9:37 am
 
Forum: Investing - Theory, News & General
Topic: New 10-Year TIPS Auction July 24 2014
Replies: 17
Views: 1530

Re: P/E Ratio: How do YOU interpret/use it?

Crazy as it seems, I think ignoring it works about as well as trying to act on it. I try to ignore it. To begin with, I think there is a very wide zone of "normal" within which it doesn't tell you anything at all. Imagine a car on a two-lane highway with no median strip. They are not all p...
by nisiprius
Tue Jul 22, 2014 9:18 am
 
Forum: Investing - Theory, News & General
Topic: P/E Ratio: How do YOU interpret/use it?
Replies: 26
Views: 1325

Re: Bond funds- your percentage of intermediate vs. short-te

I really mean this, take it seriously: I'm not a careful investor and I am simply stating what is , not as any kind of model or recommendation. Defining my investment portfolio to include mutual fund and brokerage holdings, then my bond fund holdings are 10% short-term and 90% intermediate-term. How...
by nisiprius
Tue Jul 22, 2014 7:20 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond funds- your percentage of intermediate vs. short-term?
Replies: 12
Views: 1112

Re: Joel Greenblatt's "magic formula"

If the Magic Formula works, it ought to work in a mutual fund. Formula Investing launched four funds in 2011 that did just that. Formula Investing U.S. Value Select (FNSAX) Formula Investing International Value Select (FNAAX) Formula Investing U.S. Value 1000 (FVVAX) Formula Investing International ...
by nisiprius
Mon Jul 21, 2014 10:28 pm
 
Forum: Investing - Theory, News & General
Topic: Joel Greenblatt's "magic formula"
Replies: 22
Views: 5286

Re: With all these recent posts regarding tilts, should I?

Exercise:

1) Re-read Bogleheads® investment philosophy.

2) Summarize briefly what it says about tilting, both what it says about the pros and what it says about the cons.
by nisiprius
Mon Jul 21, 2014 7:03 pm
 
Forum: Investing - Theory, News & General
Topic: With all these recent posts regarding tilts, should I?
Replies: 14
Views: 998

Re: not all value metrics are equal

I wish I knew how to tell the difference between "the literature" and "literature." There's a paper on "Why Most Published Research Findings Are False," but is it part of the literature?
by nisiprius
Mon Jul 21, 2014 1:52 pm
 
Forum: Investing - Theory, News & General
Topic: not all value metrics are equal
Replies: 36
Views: 1769

Re: What to do in a market correction

Nothing. :happy Which prompts the following question. If my plan is "during a market correction, I will do nothing," how should I prepare to ensure that I actually follow that plan? We know that it is common for people not to follow their plan during a market correction. Author and profes...
by nisiprius
Mon Jul 21, 2014 1:44 pm
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 3030

Re: My quarterly update on 2014's sure things

Beautiful, I love these. It is a real problem having the discipline not to act on what "everyone" is saying. In this forum, Jan 6, 2014 Given that interest rates can only go up, does it make sense to lessen the impact on our bond stake by shifting a portion of those intermediate bonds to a...
by nisiprius
Mon Jul 21, 2014 11:09 am
 
Forum: Investing - Theory, News & General
Topic: My quarterly update on 2014's sure things
Replies: 6
Views: 2027

Re: Vanguard Client Dispute Resolution Dept.

A letter to the CEO should be less than a page long, and the first sentence should say exactly what you want--the thing that would make you happy. I've had very good luck writing to CEOs-- when the thing I wanted was a small refund. (For example, when I felt that Walt Disney World's "MemoryMake...
by nisiprius
Mon Jul 21, 2014 9:35 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Client Dispute Resolution Dept.
Replies: 10
Views: 1603

Re: What to do in a market correction

"When in danger, or in doubt,
Run in circles, scream and shout."
--Herman Wouk, The Caine Mutiny, 1951
by nisiprius
Mon Jul 21, 2014 8:52 am
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 32
Views: 3030

Re: Q&A with the Experts at 2014 Bogleheads Conference

It's endlessly argued, but I think there is a great deal of support in the Bogleheads forum for some degree of "tilt"--expanding on Total Stock, for example by adding extra allocations to small value and REITs. Yet Vanguard's all-in-one funds--Target Retirement and LifeStrategy--do not do ...
by nisiprius
Mon Jul 21, 2014 8:34 am
 
Forum: Investing - Theory, News & General
Topic: Q&A with the Experts at 2014 Bogleheads Conference
Replies: 24
Views: 7605

Re: a close look at value and momentum

why in the world wouldn't this excess return on the long side be over-grazed almost to the point of extinction? Since momentum does not require focusing on a small corner of the market like SV, it takes a lot more money to overgraze it. Small value represents a few percent of the market, so there i...
by nisiprius
Mon Jul 21, 2014 8:14 am
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 16800

Re: VG Total Stock Market Index ETF performance?

The performance is going to be virtually identical, as the ETF is merely a special "share class" of the mutual fund. Furthermore, however innovative it was when Vanguard created the first index fund in 1976, a lot of mutual fund companies have mastered the art and you can be pretty sure th...
by nisiprius
Mon Jul 21, 2014 7:57 am
 
Forum: Investing - Help with Personal Investments
Topic: VG Total Stock Market Index ETF performance?
Replies: 5
Views: 548

Re: Value Overvalued

On page 5 of this report from JP Morgan, it shows Value stocks are overvalued, and Growth stocks are undervalued compare to their 20 years averages. https://www.jpmorganfunds.com/blobcontentheader/202/900/1158474868049_jp-littlebook.pdf Just want to point that out. This reminds me of a quote from W...
by nisiprius
Sun Jul 20, 2014 10:09 pm
 
Forum: Investing - Theory, News & General
Topic: Value Overvalued
Replies: 23
Views: 2175

Re: Total return chart for Barclays Global Aggregate ex-USD

I've used the PIMCO Global Bond Fund (U.S. Dollar Hedged), PGBIX, as a surrogate for what VTIBX/VTABX might have been, for no good reason except that I couldn't find anything else. And to confirm my general notion that dollar-hedged international bond funds are indeed bond-like, whereas unhedged int...
by nisiprius
Sun Jul 20, 2014 9:17 pm
 
Forum: Investing - Theory, News & General
Topic: Total return chart for Barclays Global Aggregate ex-USD
Replies: 2
Views: 527

Re: oil companies more risky

The entire stock market is risky. Sectors (e.g. energy, e.g. Vanguard Energy Fund) are riskier than the market. Individual industries (e.g. oil) are riskier than sectors. Individual stocks are riskier than entire industries. Should we expect the risk to be rewarded? Larry Swedroe has written, in The...
by nisiprius
Sun Jul 20, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: oil companies more risky
Replies: 8
Views: 1002

Re: Stop Loss on stocks/ ETFs

Stop loss sounds like a great way to minimize risk to the downside. The problem arises when trying to decide when to reinvest. I don't think it even "minimizes risk to the downside." It only reduces risk in situations where the downward drop continues . If you have a stop loss at -11% and...
by nisiprius
Sun Jul 20, 2014 5:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Stop Loss on stocks/ ETFs
Replies: 12
Views: 882

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

It would be interesting to find 1950s sources that would speak to the issue of what S&P intended at the time. I've tried casually, with only limited success, to uncover the "prehistory of the S&P," that is to say, what there was before 1957. Innumerable graphs that purport to show ...
by nisiprius
Sun Jul 20, 2014 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3458

Re: Stop Loss on stocks/ ETFs

The name "stop loss" sounds great. But it is a fantasy to suppose there's a simple way to put a ratchet effect into your investments so that they only go up. The two-edged sword is that if you set the "stop loss" level low, then it doesn't trip and doesn't protect you. If you set...
by nisiprius
Sun Jul 20, 2014 12:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Stop Loss on stocks/ ETFs
Replies: 12
Views: 882

Re: Which kind of bike for recent retiree?

...Roadbike seats aren't really the medieval torture devices that they initially appear to be... A reading recommendation for all bicycle riders: "Three Men on the Bummel," by Jerome K. Jerome. https://www.youtube.com/watch?v=-Cnif5EhMR0 “Can you think of any saddle ever advertised that y...
by nisiprius
Sun Jul 20, 2014 12:18 pm
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2557

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

It is nonsense, and it is a standard talking point against indexing that people have been dragging out for years. I can't figure out how to read Faber's words in detail without buying the book. But the standard argument goes like this. Assume, without ever stating it , that indexing means the S&...
by nisiprius
Sun Jul 20, 2014 7:11 am
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3458

Re: Social Security Taxes?

...One of the reasons my social security is being taxed is that I have tax-exempt income. Now this is not my exact situation, but consider this: A person collects social security. None of it is taxed. The next year, he has $10,000 of tax-exempt income (line 8b). Now his social security is taxed. Qu...
by nisiprius
Sat Jul 19, 2014 9:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security Taxes?
Replies: 26
Views: 2262

Re: Vanguard Target retirement vs S&P500 indexing

The 2040 fund today is similar to what the 2030 fund was ten years ago. However since the 2030 fund only goes back to 2006, I'm going to to show the 2025 (blue) and the 2035 (orange) funds, and I'm going to plot them along with the Vanguard 500 Index (S&P 500 fund) (green). http://s30.postimg.or...
by nisiprius
Sat Jul 19, 2014 4:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Target retirement vs S&P500 indexing
Replies: 7
Views: 1586

Re: Social Security Taxes?

...That led me to do some research and the taxes on SS did surprise me. On the SS site it indicated that if married and you have income over $44,000 a year, up to 85% of your SS benefit will be taxed... Anyone with expertise on this or actually in this situation care to comment? I think you misunde...
by nisiprius
Sat Jul 19, 2014 3:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security Taxes?
Replies: 26
Views: 2262

Re: Memory foam mattresses - any insight?

Bought a TempurPedic >10 years ago. We like it. It has been more durable than any conventional mattress we've ever owned. Re chemicals, there has never been a trace of odor from it. I can't speak to the question of whether it's any better than cheaper mattresses. It's not for everyone. Most mattress...
by nisiprius
Sat Jul 19, 2014 3:15 pm
 
Forum: Personal Consumer Issues
Topic: Memory foam mattresses - any insight?
Replies: 52
Views: 3270

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

Not realizing that you are becoming addicted to the endorphin rush of speculating, until you are hooked. Thanks to jginseattle and Fallible I'm now reading American Sucker , by David Denby. I think it is a better, less guarded account of what goes on inside the head of someone who gets acculturated ...
by nisiprius
Sat Jul 19, 2014 2:55 pm
 
Forum: Investing - Theory, News & General
Topic: Ways to lose money and destroy personal wealth by investing
Replies: 81
Views: 9169

Re: What Book Are You Currently Reading? Part V

American Sucker , by David Denby. The author got caught up in the tech boom and bust. Here's a New York Times review... http://www.nytimes.com/2004/01/25/books/a-fool-and-his-money.html Thanks for mentioning this book, which I just read. Thanks to both of you, I'm halfway through and can't put it d...
by nisiprius
Sat Jul 19, 2014 10:04 am
 
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part V
Replies: 3102
Views: 998459
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