Search found 25973 matches

Return to advanced search

Re: Please debunk this CNN Money article on dividend investi

... First, the 2008-2009 financial crisis hit dividend stocks really hard because many of the good dividend payers are financial stocks. A whole industry either eliminated or curtailed its dividend. This is why dividends didn't offer the downside protection in 2008-2009 that they normally do... Ben...
by nisiprius
Sat Dec 20, 2014 7:34 pm
 
Forum: Investing - Theory, News & General
Topic: Please debunk this CNN Money article on dividend investing
Replies: 33
Views: 3010

Re: How do you define "being rich"?

And, of course:
Greg Brown wrote:I'm a man who's rich in daughters,
And if by some wild chance I get rich in money,
Like say another two thou a year or even one thou a year,
I'm gonna look in to havin' some more daughters.
by nisiprius
Sat Dec 20, 2014 5:52 pm
 
Forum: Personal Consumer Issues
Topic: How do you define "being rich"?
Replies: 67
Views: 2794

Re: What Movie Have You Recently Watched?

Over the past six months, I've watched The Jungle Book (1967) at least 20 times with my infant son. It's free on YouTube and helps ease the bedtime transition from fussy baby to sleeping baby. Have to give the movie credit for holding up extremely well after all these years and viewings--I notice s...
by nisiprius
Sat Dec 20, 2014 3:18 pm
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 262
Views: 28303

Re: What Movie Have You Recently Watched?

The Wolf of Wall Street , with Leonardo di Caprio. I loved it. My wife hated it so much she didn't even like to be in the adjacent room overhearing it, and is seriously annoyed with me for thinking it was funny. Brilliant direction, brilliant acting. After watching the scene where di Caprio's chara...
by nisiprius
Sat Dec 20, 2014 3:11 pm
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 262
Views: 28303

Re: How do you define "being rich"?

Well, the word has more than one sense. I don't feel happy saying "I am not rich" because it sounds like the sort of thing rich people say. It sounds like I'm being inadequately grateful for the wonderful life I have, and trying to deflect envy. Or trying to put myself on some kind of pede...
by nisiprius
Sat Dec 20, 2014 2:46 pm
 
Forum: Personal Consumer Issues
Topic: How do you define "being rich"?
Replies: 67
Views: 2794

Re: Active or Not, I Love Wellington

I think that when you hear yourself using words like "love" about an investment, it's time to take a deep breath and step back. Wellington does not experience feelings. Wellington does not love you. No matter how faithful you are to Wellington, Wellington did not take a vow to be faithful ...
by nisiprius
Sat Dec 20, 2014 11:40 am
 
Forum: Investing - Theory, News & General
Topic: Active or Not, I Love Wellington
Replies: 78
Views: 7155

Re: handling large market drops

In terms of advice, the usual definition of rebalancing does involve rebalancing in both directions. You are always, in fact, selling what look like the winners in order to buy what look like the losers. There is constant debate on this forum about how to do rebalancing and what to expect out of it....
by nisiprius
Sat Dec 20, 2014 11:04 am
 
Forum: Investing - Theory, News & General
Topic: handling large market drops
Replies: 14
Views: 730

Re: Is VG Portfolio Tool too aggressive?

P.S. The big problem with risk questionnaires is that they don't even try to put you in the picture. In effect they say "In a very bumpy flight like 2008-2009, the wings of an airliner can flex 38% more than usual." The problem is that when you are in the situation, you don't perceive it a...
by nisiprius
Sat Dec 20, 2014 10:46 am
 
Forum: Investing - Theory, News & General
Topic: Is VG Portfolio Tool too aggressive?
Replies: 16
Views: 720

Re: Is VG Portfolio Tool too aggressive?

There is no objective answer I know of to this. What is disturbing to me is the number of people who seem to think there is, and project their personal risk tolerance onto others and say that someone "should" be more or less risk-tolerant than they think they are. You must decide for yours...
by nisiprius
Sat Dec 20, 2014 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Is VG Portfolio Tool too aggressive?
Replies: 16
Views: 720

Re: [Why did my fund suddenly drop in value?]

...the solution is for members to self desnark ... PJW +1 I don't know if it is "the" solution, but we should all take advantage of the fact that the forum allows us to edit our own past posts. Also, I believe strongly that there is not one bit of harm in the world in simply giving newcom...
by nisiprius
Sat Dec 20, 2014 9:26 am
 
Forum: Investing - Theory, News & General
Topic: [Why did my fund suddenly drop in value?]
Replies: 136
Views: 11360

Re: Effect of 0.79 correlation: fantasy vs. reality

...One valid complaint about showing it this way is that it tends to exaggerate the benefits by not using 0,0 as the origin. Because of this, I requested this as a PV enhancement, and it was done, so at least now we can select the PV "Chart from origin" option... Forgot to say: Bravo! for...
by nisiprius
Sat Dec 20, 2014 8:29 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: teaching / "confessional debugging" and brain stimulatio

Many have noticed the phenomenon that when you teach someone something, even if you do all the talking, somehow it has a great effect on learning new things. This seems a paradox: You actually get no new information - you are merely transmitting what you already know - and yet somehow it seems to s...
by nisiprius
Fri Dec 19, 2014 9:36 pm
 
Forum: Personal Consumer Issues
Topic: teaching / "confessional debugging" and brain stimulation
Replies: 6
Views: 447

Re: Effect of 0.79 correlation: fantasy vs. reality

It seems to me that you're focusing only on the Beta risk of SCV. Yes the correlation is high between SCV and LC but isn't that all about Beta? If that were all there was to it, you would be correct. But what about the diversification that SCV adds in terms of greater size and value factor loadings...
by nisiprius
Fri Dec 19, 2014 7:33 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: What Book Are You Currently Reading? Part VI

The Accursed , by Joyce Carol Oates. Ben Franklin: An American Life by Walter Isaacson Hmmm... I'm reading Jack London: An American Life , by Earle Labor. I guess it's hard for biographers to find fresh new titles... Yep, kinda funny... a search turns up George F. Kennan: An American Life Margaret ...
by nisiprius
Fri Dec 19, 2014 4:52 pm
 
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 254
Views: 30595

Re: Effect of 0.79 correlation: fantasy vs. reality

Kevin, The question I'm interested in is the question of any alleged diversification benefit arising from alleged "low" correlations. As I noted above, regardless of whether I use the Fama-French data series or the Portfolio Visualizer data, it doesn't matter. The correlations with large b...
by nisiprius
Fri Dec 19, 2014 3:25 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Disappointed with sale items

Clothing seems to be very variable, changing every few years as they change their overseas suppliers. Generally, one thing that's happened over the last few decades is that the introduction of new products is apparently much easier than it once was, and the stability of product lines in general is g...
by nisiprius
Fri Dec 19, 2014 3:15 pm
 
Forum: Personal Consumer Issues
Topic: Disappointed with sale items
Replies: 18
Views: 1664

Re: Please debunk this CNN Money article on dividend investi

I think you are comparing apples and oranges. The Fool article is about an investment made in 1972, and nisiprius' chart shows data from the last 10 years. Dividends just ain't what they used to be, so while dividend stocks may have outperformed for a period of time, I think that is likely a thing ...
by nisiprius
Fri Dec 19, 2014 2:58 pm
 
Forum: Investing - Theory, News & General
Topic: Please debunk this CNN Money article on dividend investing
Replies: 33
Views: 3010

Re: Please debunk this CNN Money article on dividend investi

Another obvious point to make is that there is nothing in the article to "debunk," because the writer simply asserts that According data from Goldman Sachs, dividend stocks tend to outperform their nondividend-paying counterparts by a considerable margin over time. A $10,000 investment in ...
by nisiprius
Fri Dec 19, 2014 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: Please debunk this CNN Money article on dividend investing
Replies: 33
Views: 3010

Re: Effect of 0.79 correlation: fantasy vs. reality

Kevin M (and anyone else:) Holy data, Batman. The discrepancy--OK, the difference--between the Fama French Benchmark Portfolio S/H and the Portfolio Visualizer Asset Class Returns for Small Cap Value is... staggering. I don't think this is a problem on Silicon Cloud's part I think this is an issue I...
by nisiprius
Fri Dec 19, 2014 2:08 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

In PV click on FAQ (in top banner), then under Asset Class Return Data Sources, click yearly asset class returns, and copy/paste into a spreadsheet. Here's the direct link Asset Class Returns THANK YOU. I missed that somehow. And a thank-you to whomever is behind Portfolio Visualizer, too. If the F...
by nisiprius
Fri Dec 19, 2014 1:10 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Please debunk this CNN Money article on dividend investi

The Total Return chart shows the story. The Vanguard High Dividend Yield Index Fund, VHDYX, blue, "seeks to track a benchmark that provides broad exposure to U.S. companies that are dedicated to consistently paying larger-than-average dividends." The index it tracks is the FTSE High Divide...
by nisiprius
Fri Dec 19, 2014 11:55 am
 
Forum: Investing - Theory, News & General
Topic: Please debunk this CNN Money article on dividend investing
Replies: 33
Views: 3010

Re: Vinyl (as in old records)

The only observation I have to make is that in situations like this I've found that it is much more effective to pick out and sell individual items on eBay than to try to sell "collections." In other words if you wanted to monetize this, you would try to discover the most valuable ones and...
by nisiprius
Fri Dec 19, 2014 7:12 am
 
Forum: Personal Consumer Issues
Topic: Vinyl (as in old records)
Replies: 10
Views: 852

Re: Effect of 0.79 correlation: fantasy vs. reality

Kevin or anyone else, I've finally gotten around to transcribing the "Fama-French Small Value" series from the SBBI book, and I'm struggling to match what Portfolio Visualizer is showing with my own work-in-progress. I wonder if you have any insight? As a test of my work, I find that when ...
by nisiprius
Fri Dec 19, 2014 7:05 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: How would one track gains of individual stocks in an ind

...I do wonder why aren't more "Socially Responsible" Bond funds... Just reporting its existence and seeing what I see from clicking around, not not not making any recommendation. Domini Social Bond Fund? $133 million assets under management--not big, not microscope. Been around for 14 ye...
by nisiprius
Thu Dec 18, 2014 7:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: How would one track gains of individual stocks in an index?
Replies: 14
Views: 520

Re: [Why did my fund suddenly drop in value?]

I thought that my fund had decreased.
But I get it! My worries have ceased!
I see that, why yes,
Every share is worth less,
But my number of shares just increased.
by nisiprius
Thu Dec 18, 2014 7:11 pm
 
Forum: Investing - Theory, News & General
Topic: [Why did my fund suddenly drop in value?]
Replies: 136
Views: 11360

Re: How would one track gains of individual stocks in an ind

I suggest skipping the calculations and following your heart. Take some guess and donate some nice big round number. You will likely be the only human being to understand the significance of matching an strange dollar figure donation to an entry in your spreadsheet. But if it's important to you, it'...
by nisiprius
Thu Dec 18, 2014 6:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: How would one track gains of individual stocks in an index?
Replies: 14
Views: 520

Re: VWINX declining, any ideas why?

Hey folks... Wikipedia has a formal policy whose formal name is "Please do not bite the newcomers." Here, I guess, it's considered to be part of "We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in ci...
by nisiprius
Thu Dec 18, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: VWINX declining, any ideas why?
Replies: 42
Views: 3691

Re: Correlations of Risk Factors in Down Markets

I don't see how you can have a stock market crash unless you do have high correlations. If you didn't, the crash wouldn't have occurred. The saw "In a crisis, all correlations go to one" is a tautology--it's just a way of saying "stock market crashes happen."
by nisiprius
Thu Dec 18, 2014 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Correlations of Risk Factors in Down Markets
Replies: 22
Views: 1275

Re: Effect of 0.79 correlation: fantasy vs. reality

...Now that I stated all that above I am not that bright because I can not figure out Nisi's curves of the combination of Sp500 and small cap. The last graph of his shows the best combo seems to be "8.5% small caps". So is he saying as one goes to more large cap that there is a higher ret...
by nisiprius
Thu Dec 18, 2014 1:03 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

No offense, but don't think this workup is anything new. Basically, it shows that if correlation is high the mix of any two asset classes in a portfolio will be the weighted average of the means of assetA and assetB. What is new about that? Markowitz and others figured this out many years ago. It's...
by nisiprius
Thu Dec 18, 2014 12:56 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

With regard to "it is a purely mathematical chart," maybe, but only in the sense that "if your investment doubles in ten years, its CAGR is 7.2% is "purely mathematical." There are two ways of looking at it. One is that it is a precisely correct description of past results. ...
by nisiprius
Thu Dec 18, 2014 12:20 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

Bertilak, your understanding is the same as mine. HueyLD, I adjusted the wording a bit to say The light green line shows mixes of the S&P 500 and the riskless asset. The dark green line shows mixes of the riskless asset with best possible combination of the S&P 500 and small-caps, and it tur...
by nisiprius
Thu Dec 18, 2014 12:10 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

Very interesting analysis OP. So the conclusion you came to is that because of the high correlation between S&P500 and the small cap index, that one is not really achieving any true diversification adding small caps, and that you're better off simply holding the S&P500 by itself? And that t...
by nisiprius
Thu Dec 18, 2014 10:33 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

Any rebalancing going on here? If so, what method of rebalancing? Rebalance on lowest day of year for small caps? Bands? A calendar date? This is a simple illustration of MPT math. Efficient-frontier-and-tangent-line charts are based on precisely six numbers: standard deviation and average for each...
by nisiprius
Thu Dec 18, 2014 9:59 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Effect of 0.79 correlation: fantasy vs. reality

Another example, but I want to acknowledge that it's cherry-picked, involves the combination of U.S. (i.e. the S&P 500) and international (EAFE). I am using the specifically chosen decade 1996-2005 inclusive. (The point is "correlations," not "international." I picked the tim...
by nisiprius
Thu Dec 18, 2014 9:40 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Effect of 0.79 correlation: fantasy vs. reality

People are apt to say "well, the lower the better, but anything that isn't 1.0 is still helpful ." I am going to illustrate the meaning of not-so-low correlations by investigating the effectiveness of a "small-cap tilt" over the period 1926-2009, using data from the Ibbotson SBBI...
by nisiprius
Thu Dec 18, 2014 8:39 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 51
Views: 3128

Re: Risk-Adjusted Equity Returns - CAPM vs. Fama-French

I think the reality is closer to "Nobody knows nothin'" than "what are the numbers?" There are not just one but THREE elephants in the room. Elephant #1 is that financial data series, all financial data series, are so incredibly variable that averages just don't settle down even ...
by nisiprius
Thu Dec 18, 2014 8:09 am
 
Forum: Investing - Theory, News & General
Topic: Risk-Adjusted Equity Returns - CAPM vs. Fama-French
Replies: 15
Views: 912

Re: Total stock market funds - is real estate accounted for?

Leeraar, I've read a number of articles that urge overweighting some sector or another on the basis that "it is a much larger part of the total economy than it is of the stock market." REITs and small caps for U.S. investments. Emerging markets for international investments. Not one of the...
by nisiprius
Wed Dec 17, 2014 7:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total stock market funds - is real estate accounted for?
Replies: 8
Views: 707

Re: Total stock market funds - is real estate accounted for?

Go to Morningstar. Type VTSMX in the "quote" box. Click on the "Portfolio" tab. Read answer here: http://s7.postimg.org/863wcnhjf/Captura_de_pantalla_2014_12_17_a_las_5_22_35_PM.png So, it's "accounted for," but be aware that it's not a lot--if you have some investment ...
by nisiprius
Wed Dec 17, 2014 5:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total stock market funds - is real estate accounted for?
Replies: 8
Views: 707

Re: Bogle: How Bond Indexing Could Be Better

Given the possible concerns about illiquid bonds in bond funds--both the SEC and the IMF have been floating proposals to require redemption fees on bond funds to cool down any possible runs on bond funds--I actually am quite happy with the Total Bond Fund being Treasury-heavy. Rick Ferri wrote an in...
by nisiprius
Wed Dec 17, 2014 5:19 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: How Bond Indexing Could Be Better
Replies: 14
Views: 1268

Re: Bogle: How Bond Indexing Could Be Better

Link to interview

I am particularly puzzled because for several years now the Vanguard Total Bond Market Index Fund has followed the Barclay's U.S. Aggregate Float Adjusted Index, which excludes the Treasury bonds that are held by the Federal Reserve.
by nisiprius
Wed Dec 17, 2014 5:04 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: How Bond Indexing Could Be Better
Replies: 14
Views: 1268

Re: On average, how often do you check your investment balan

I said once a month, but it's irregular. I'm afraid I'm apt to peek whenever there are postings in this forum suggesting that something dramatic has occurred. But I try to avoid looking at actual numbers and just glance at the miniature "balances over time" chart. That usually calms my ner...
by nisiprius
Wed Dec 17, 2014 4:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: On average, how often do you check your investment balances?
Replies: 53
Views: 3265

Re: Why would you invest in a bond fund?

If TwoByFour is spending his dividends, then wouldn't it make more sense to say that dividends are all he cares about? (That's what dividend stock enthusiasts usually say if you bring total return charts into the picture...) I think that if you have chosen, for whatever reason, to spend all the div...
by nisiprius
Wed Dec 17, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: Why would you invest in a bond fund?
Replies: 25
Views: 1958

Re: Are 3-funds better than 2?

Am I correct to understand that you're saying the returns are slightly better when including international but the main reason for a 3rd fund is to reduce risk?? Is 50/50 the best percentage split for risk reduction? Thank you It is not a perfect comparison because the composition of Vanguard LifeS...
by nisiprius
Wed Dec 17, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Are 3-funds better than 2?
Replies: 17
Views: 1117

Re: Are 3-funds better than 2?

Over the longest period during which a good international index has existed, the best percentage split, within the stock allocation, for risk reduction would have been around 25-30% international, not 50/50. But. Nobody knows what it will be going forward, and the only long-term international index,...
by nisiprius
Wed Dec 17, 2014 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: Are 3-funds better than 2?
Replies: 17
Views: 1117

Re: Are 3-funds better than 2?

IJim, this is all in the range of stuff that gets argued interminably, and you'll have to decide for yourself what you think. 1) The theory is that IF two asset classes... say domestic and international stocks... had about the same return and about the same volatility but moved somewhat independentl...
by nisiprius
Wed Dec 17, 2014 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: Are 3-funds better than 2?
Replies: 17
Views: 1117

Re: Why would you invest in a bond fund?

No, the total return graph is the right one to use. It's not about reinvesting dividends, it's about not spending increased dividends. If TBM gives you increased dividends and you spend them all, then TBM deserves some credit and you deserve some blame for increasing your spending. Wait, I'm confus...
by nisiprius
Wed Dec 17, 2014 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: Why would you invest in a bond fund?
Replies: 25
Views: 1958

Re: Why a Boglehead doesn't invest in individual companies?

Larry Swedroe, "Rules of Prudent Investing:" #17: Owning individual stocks and sector funds is more akin to speculating, not investing. The market compensates investors for risks that cannot be diversified away, like the risk of investing in stocks versus bonds. Investors shouldn't expect ...
by nisiprius
Wed Dec 17, 2014 12:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 54
Views: 4626

Re: "Gold to tank in 2014: Goldman Sachs"

Really. That is not at all like making diamonds, but still news to me. Yes, but of course it is not cheap or cost effective. I looked it up just now and see also that you can make gold in a particle accelerator. I bet that isn't cheap either. It's not cheap, but it's worth it. Gold atoms made in th...
by nisiprius
Wed Dec 17, 2014 11:14 am
 
Forum: Investing - Theory, News & General
Topic: "Gold to tank in 2014: Goldman Sachs"
Replies: 109
Views: 9829

Re: Long term care insurance?

As others have said, my experience might well be irrelevant and out of date. There are two separate issues here. a) Ten-year paid-up option. This is not inflation protection as such, or I don't think of it that way. I was thinking of it as "lapse protection" by having the burden of premium...
by nisiprius
Wed Dec 17, 2014 10:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Long term care insurance?
Replies: 23
Views: 1859
Next

Return to advanced search