Search found 300 matches

by nobsinvestor
Thu Jun 23, 2016 8:48 pm
Forum: Investing - Theory, News & General
Topic: Actionable advice in a Brexit scenario
Replies: 162
Views: 25369

Re: Actionable advice in a Brexit scenario

lgs88 wrote:How does the efficient-market hypothesis account for these wild swings in international stocks on the basis of an odd poll here or there?!

I am scheduled to rebalance into international on the first of the month. Maybe it'll be on sale.
EMH says nothing about the short run [hours, like now]...EMH holds up quite well over the long run as information is processed
by nobsinvestor
Sat Mar 26, 2016 3:07 pm
Forum: Investing - Theory, News & General
Topic: muni bond experts: if interest rates stopped dropping, would pre-refunded muni bonds stop existing?
Replies: 3
Views: 786

muni bond experts: if interest rates stopped dropping, would pre-refunded muni bonds stop existing?

So it appears that as interest rates have steadily fallen over the last few decades, municipalities have re-financed their bonds at lower rates and there has been a significant enough market for pre-refunded muni bonds that entire large mutual funds such as BMBIX have been set up to exclusively invest in them.

However, in a hypothetical world of steadily RISING rates, after the current pre-refunded bonds mature, would there therefore cease to be any new ones? Would ultra-high quality muni funds like BMBIX be forced to settle for non pre-refunded munis? Thoughts?
by nobsinvestor
Sat Mar 12, 2016 5:30 pm
Forum: Personal Finance (Not Investing)
Topic: Best source for finding renters for a high end home?
Replies: 12
Views: 2231

Re: Best source for finding renters for a high end home?

Gill wrote:I'm still reeling from wondering why the owner of a two million dollar home would need to rent out rooms. Wouldn't it be better to downsize to a less expensive place?
Gill
I guess because he likes living there for now...and property taxes in CA arent that high. I did think of that as an option, though.
by nobsinvestor
Sat Mar 12, 2016 4:59 pm
Forum: Personal Finance (Not Investing)
Topic: Best source for finding renters for a high end home?
Replies: 12
Views: 2231

Re: Best source for finding renters for a high end home?

cadreamer2015 wrote:You can rent a 3 bedroom house in Sherman Oaks for $3,000 per month. Admittedly not in a $2M house, but you'd be getting 3 bedrooms and your own yard, not just a room in a house. What makes you think the market rent for a house share/room to rent is $2,500 - $3,000 per month?
That's what we were trying to figure out- namely the fair price for a single room to rent and then the best way online to advertise/find renters besides craigslist.
by nobsinvestor
Sat Mar 12, 2016 4:21 pm
Forum: Personal Finance (Not Investing)
Topic: Best source for finding renters for a high end home?
Replies: 12
Views: 2231

Best source for finding renters for a high end home?

Hi guys, I'm trying to help a relative who owns a nice $2M home in Sherman Oaks, CA. He is a 50 y/r old single guy and wants to find renters for 2-3 rooms of his 5 bedroom house, while he will also live there.

He and I noticed on Craigslist, even in LA, most listings are for $1500 or less per month. Perhaps Craigslist isn't the best place to find renters for a room that could probably rent for $2,000-$3,000 per month I'm guessing given the home value and location?

Any recommendations for a free online service or paid service that specializes in helping find renters for rooms in higher-end homes/locations and will give accurate appraisals for the monthly room rental value? Thanks!
by nobsinvestor
Thu Mar 10, 2016 6:33 pm
Forum: Non-US Investing
Topic: How to invest living in Ireland?
Replies: 2
Views: 769

How to invest living in Ireland?

Hi guys, helping out a friend who lives in Ireland and holds only Irish citizenship.

What would be the best way to go about helping him set himself up for boglehead type investing?

I assume he cannot own Vanguard mutual funds for tax/residence reasons, even through a european brokerage account?

What would be a good starting point?

Vanguard ETFs or Ishares ETFs through an Irish brokerage account?

thanks!
by nobsinvestor
Mon Feb 15, 2016 6:06 pm
Forum: Investing - Theory, News & General
Topic: Which fund is riskier- total bond market or baird muni fund?
Replies: 9
Views: 1619

Re: Which fund is riskier- total bond market or baird muni fund?

slickwillbo wrote:
stlutz wrote:This fund (BMBIX) is taking some kind of risk somewhere. Either that or they are calculating SEC Yield significantly different than Vanguard does.

As of 12/31, it was yielding 1.55%. Vanguards IT Muni fund (which had more credit risk, more duration risk, and a lower expense ratio) was yielding 1.63%.

If BMBIX was that much safer, the yield should be lower relative to Vanguard.
If you look at what they've actually distributed over the previous 12 months, the Baird fund has a lower yield than VWITX (2.42% vs 2.84%, per Morningstar).
I noticed that too. But is that because the bonds are shorter duration or because the bonds themselves are much less risky?

P.S. Still waiting for the muni experts to chime in :)
by nobsinvestor
Mon Feb 15, 2016 4:49 pm
Forum: Investing - Theory, News & General
Topic: Which fund is riskier- total bond market or baird muni fund?
Replies: 9
Views: 1619

Re: Which fund is riskier- total bond market or baird muni fund?

stlutz wrote:This fund (BMBIX) is taking some kind of risk somewhere. Either that or they are calculating SEC Yield significantly different than Vanguard does.

As of 12/31, it was yielding 1.55%. Vanguards IT Muni fund (which had more credit risk, more duration risk, and a lower expense ratio) was yielding 1.63%.

If BMBIX was that much safer, the yield should be lower relative to Vanguard.
Perhaps it's liquidity risk? Are pre-refunded munis less liquid than others?

Any muni experts care to chime in?
by nobsinvestor
Mon Feb 15, 2016 3:11 pm
Forum: Investing - Theory, News & General
Topic: Which fund is riskier- total bond market or baird muni fund?
Replies: 9
Views: 1619

Re: Which fund is riskier- total bond market or baird muni fund?

Does anyone with specific knowledge of today's muni market know if municipalities plan to continue issuing pre re funded bonds going forward? In 5-10 years when all of the current BMBIX pre-refunded bonds have matured, will there be new ones to purchase for the fund? Is there any risk that this fund will have to "Settle" for high quality non pre-refunded bonds such as the ones found in VWIUX?
by nobsinvestor
Sun Feb 14, 2016 9:55 pm
Forum: Investing - Theory, News & General
Topic: Which fund is riskier- total bond market or baird muni fund?
Replies: 9
Views: 1619

Re: Which fund is riskier- total bond market or baird muni fund?

Total bond is riskier, both term risk and credit risk. Despite the Baird fund being all munis, thus less diversified and representing a different range of kinds of issuers, a smaller amount of the market, etc., parts of total bond make that riskier. Credit ratings in corporate bonds are not comparable to ratings in muni bonds; an A corporate has historically been riskier than an A muni. The Baird fund is 98% AAA and AA issues, with the large majority being AAA, generally with short maturities... a lot of advance refunded, plenty of GO and education. This stuff has virtually never defaulted. That was my gut feeling too. When the current portfolio of Baird prefunded munis matures....will there be new ones? Are municipalities still issuing pr...
by nobsinvestor
Sun Feb 14, 2016 9:45 pm
Forum: Investing - Theory, News & General
Topic: Which fund is riskier- total bond market or baird muni fund?
Replies: 9
Views: 1619

Which fund is riskier- total bond market or baird muni fund?

Speaking purely from a CREDIT risk point of view- which fund do you guys view as riskier?

BMBIX- Baird Institutional Quality Munis
VBTLX- our beloved total bond market index

looking at charts from 2008, it looks like the pre-refunded baird munis actually did better than total bond market during the meltdown, which has exposure to some corporate bonds, and as of today has ~30% of fund assets in corporates.

So- what say you guys? Which fund overall has less credit risk, as of today?
by nobsinvestor
Sun Jan 31, 2016 2:14 pm
Forum: Personal Investments
Topic: Muni bond ladder vs fund for large $$$$
Replies: 42
Views: 5624

Re: Muni bond ladder vs fund for large $$$$

For 20M in bonds why not just manage it yourself with low cost diversified bond funds?

With that level of wealth you're probably also worried about wealth preservation more than anything else such as return.

Why not do 10M in Vanguard's interm term treasury bond fund [treasuries for capital preservation] and 10M in a mix of munis from VWIUX and/or BMBIX?
by nobsinvestor
Wed Jan 27, 2016 3:53 pm
Forum: Investing - Theory, News & General
Topic: Hedge Funds blame Index funds: Bogleheads referenced
Replies: 80
Views: 13595

Re: Hedge Funds blame Index funds: Bogleheads reference

Just to put things in perspective, here are Bill Ackman's returns (after fees of course) from 2004-2015 http://cdn.octafinance.com/wp-content/uploads/2015/04/Pershing-Square-Returns-393x300.png He returned 722.9% to investors while the S&P 500 returned 134.3% ... There's a reason we call hedge fund managers the smartest people in finance, and it's not just the fee structure Religious tit-for-tat nonsense .. Anything giving itself the opportunity to return 6x what the market returned in 10 years is going to underperform sometimes too ... Short-termism is behind 'dumb' money .. I don't know why IFAs seems to have such issues with the hedge fund industry, but I assume it's because hedge funds don't offer to pay them commissions to recomme...
by nobsinvestor
Wed Jan 20, 2016 7:35 pm
Forum: Investing - Theory, News & General
Topic: Why does Total Bond Market have so many capital gains distributions?
Replies: 18
Views: 2685

Re: Why does Total Bond Market have so many capital gains distributions?

goingup wrote:
nobsinvestor wrote: Should one expect possible capital gains distributions to continue and potentially pose a small issue for long term taxable account holders in the 25% bracket?
It's more an issue with the monthly bond interest dividends which are taxed as income.
Sure, but I mean would that capital gain have otherwise been a simple NAV rise [and then you sell whenever you want] instead of a required payout? Obviously as was mentioned before, this is much less common with actively managed bond funds that do not try and track an index.
by nobsinvestor
Wed Jan 20, 2016 2:29 pm
Forum: Investing - Theory, News & General
Topic: Why does Total Bond Market have so many capital gains distributions?
Replies: 18
Views: 2685

Re: Why does Total Bond Market have so many capital gains distributions?

Interesting. So is this just a case of bond indexing requirements i.e. tracking the index as close as possible, even if it triggers capital gains.

I noticed the vanguard muni funds, which are not indexed, distribute almost no capital gains, if none at all in the last few years.
by nobsinvestor
Wed Jan 20, 2016 12:01 pm
Forum: Investing - Theory, News & General
Topic: Why does Total Bond Market have so many capital gains distributions?
Replies: 18
Views: 2685

Why does Total Bond Market have so many capital gains distributions?

I was reading through the distributions tab on Vanguard's page for TBM and found this:

https://personal.vanguard.com/us/funds/ ... =INT#tab=4

While the short and long term distributions for 2015 were not that large, they happened 3 times that year, and in December 2014, the 2 capital gains distributions if added together exceed the value of an average month's distribution yield.

Which of these bonds are the managers selling at a profit at the end of the year? The MBS or the corporates or the treasuries? Should one expect possible capital gains distributions to continue and potentially pose a small issue for long term taxable account holders in the 25% bracket?
by nobsinvestor
Mon Jan 18, 2016 12:07 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Re: Advice for changing AA to reduce risk exposure for large taxable portfolio?

We are thinking to avoid making the mistake of selling at a loss, all of the US stocks should be sold on Monday and replaced by bonds [TBM], putting an extra 1M into bonds, and when the Intl stocks [VTIAX] goes back up [even if it takes a while], some of that can then be used to buy back into US stocks [VTSAX] I think your error resides here. In trying to avoid the loss you are moving to a portfolio that is unreasonable and improperly diversified. What you and this friend need to realize is that the mistake happened a couple of years ago - in choosing the wrong asset allocation. It happens. It happens because there is no way to know your risk true tolerance until risk actually happens. When you realize you are riding a dead horse, the only...
by nobsinvestor
Sun Jan 17, 2016 4:31 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Re: Advice for changing AA to reduce risk exposure for large taxable portfolio?

I would not have an asset allocation of 100% international for equities myself. I would still have a reasonable split for equities of US:foreign. Even if its only temporary? The plan is to buy back more VTSAX as soon as VTIAX reaches the Jan 2014 price it was purchased at. Yes, that could take a decade or more. Yes. Yes. Yes. Or let me put it another away. Suppose to get back to Jan 2014, it takes a gain of 20% and in the meantime US equities go up 40%. You'll look like a chump. You are assuming that Foreign equities will go up more than US equities. There is good possibility that it wishful thinking. I get that. But the goal is to get 2M in bonds ASAP. So what do you propose given the main goal? It seems like the only options are A] Take ...
by nobsinvestor
Sun Jan 17, 2016 3:49 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Re: Advice for changing AA to reduce risk exposure for large taxable portfolio?

livesoft wrote:I would not have an asset allocation of 100% international for equities myself. I would still have a reasonable split for equities of US:foreign.
Even if its only temporary? The plan is to buy back more VTSAX as soon as VTIAX reaches the Jan 2014 price it was purchased at. I have a hard time believing that if you argue that could take 5-10 years or never, that being in US stocks would result in no major losses as well.

The goal is to get $2 million in bonds ASAP, risk tolerance and capital preservation was under-estimated at the start. It's making the best of a bad original decision.
by nobsinvestor
Sun Jan 17, 2016 2:47 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Re: Advice for changing AA to reduce risk exposure for large taxable portfolio?

livesoft wrote:Weird idea. But tell us this: If one sells $1 M of VTSAX, what are the tax consequences?

If you don't want to tax-loss harvest, then at least harvest enough losses to offset any gains in bonds and/or selling VTSAX.

If they are in the 0% tax bracket, then why do they have so much in tax-exempt bonds?

Locking in losses is a ridiculous statement. The losses are already locked in, so take advantage of them where possible.

More information is needed.
No gains in VTSAX. NAV from Jan 2014 is about break even as of now. Dividends over last 2 yrs were used, not re-invested. And yes I agree about the muni bonds, that's why I suggested moving the 1M into total bond market.
by nobsinvestor
Sun Jan 17, 2016 2:41 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Re: Advice for changing AA to reduce risk exposure for large taxable portfolio?

My two cents: I don't like this idea at all. It makes no sense to me to keep the international stocks and not keep any of the U.S. stocks, even though the plan is for that to be temporary and to buy them back later on. If you are building the bonds to $2 million, it would seem better to aim for a suitable division between US/international for the remaining $1 million (or whatever balance it is by now). And you could make the adjustments a little more gradually - perhaps sell 10% of the US and international equity positions each month until the bonds are at $2 million and your friend is at an allocation that he/she finds comfortable. Best of luck to you and your friend. One learns much about one's risk tolerance at times like this. How does...
by nobsinvestor
Sun Jan 17, 2016 2:15 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Re: Advice for changing AA to reduce risk exposure for large taxable portfolio?

jebmke wrote:Harvest losses. Don't let a good unrealized loss go to waste. There are good substitutes for each of the holdings that have an unrealized loss. Move to them in the desired allocation.
My friend's annual tax bill is already zero due to no wage income [this is a "retirement" portfolio] and being exclusively right now in muni bonds and qualified dividend stock funds.

I was thinking the best solution is to swap all of VTSAX for total bond market. I welcome more thoughts!
by nobsinvestor
Sun Jan 17, 2016 2:02 pm
Forum: Personal Investments
Topic: Advice for changing AA to reduce risk exposure for large taxable portfolio?
Replies: 21
Views: 1967

Advice for changing AA to reduce risk exposure for large taxable portfolio?

Hi guys, I'm helping someone out who has a large taxable portfolio, about $3 million, that was invested in 2014. About 1/3 is in bonds and 2/3 in stocks split between US and intl. This person and I agree that for this person, risk tolerance was under-estimated and the more important concern is preserving capital in more price stable assets [bonds]. So the desire is now to have about $2M in relatively safe/stable assets. The original portfolio was invested in Jan 2014 in the following: $1M bonds [mostly munis, want to add total bond market in future] $850k intl stock [VTIAX] $1.2M US stock [VTSAX] Of course, the intl stocks are now down ~20%, resulting in a 170k "paper loss". We are thinking to avoid making the mistake of selling a...
by nobsinvestor
Tue Jan 12, 2016 11:58 pm
Forum: Investing - Theory, News & General
Topic: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS
Replies: 78
Views: 13806

Re: Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

serious question- why didn't they issue this prediction in late 2015, before the opening week of 2016 was bad?

Strange :D
by nobsinvestor
Fri Jan 01, 2016 2:16 pm
Forum: Personal Investments
Topic: Large inheritance issues
Replies: 21
Views: 5037

Re: Large inheritance issues

15M is a ton of money, your great grandchildren will likely be set for life. I dont see why the number of zeroes changes any smart, simple allocation though. If I had 15M in taxable to invest today, I'd probably do this: 3M- Total Stock Market 3M- Total International Stock Market 3M- Vanguard Intermediate Term Treasury 5M- Vanguard Intermediate Term Tax Exempt [for more tax free income, given you'll be in a high tax bracket] 1M- Cash/Short Term Bond Fund 8-9 million alone in bonds is pretty good for knowing you'll be rich even if the stock market tanks for years/decades. If you want to quit working just live off the dividends of any 1, 2 or 3 of those funds, otherwise just re-invest all dividends. I'd probably divide that money into 2 or 3 ...
by nobsinvestor
Mon Nov 02, 2015 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: Cheapest decent health insurance options in Texas?
Replies: 16
Views: 3391

Re: Cheapest decent health insurance options in Texas?

Just looked at options for her on healthcare.gov.

She could get a cheaper Cigna bronze plan for around 300 a month, but it says that the inexpensive doctor visits and drugs only occur after the deductible is reached. Could someone school me on the basics of how this works? Do you pay the deductible up front? Do doctor visits cost $250 or something outrageous before it is met? And you have to pay the premiums on top of that?
by nobsinvestor
Mon Nov 02, 2015 3:58 pm
Forum: Investing - Theory, News & General
Topic: As of Nov 2015, Baird muni fund superior to Vanguard muni fund?
Replies: 33
Views: 4241

Re: As of Nov 2015, Baird muni fund superior to Vanguard muni fund?

Is half of the income from the Baird fund NOT tax exempt due to the types of bonds it holds as the OP asked? I didnt know that either
by nobsinvestor
Mon Nov 02, 2015 3:54 pm
Forum: Personal Finance (Not Investing)
Topic: Cheapest decent health insurance options in Texas?
Replies: 16
Views: 3391

Cheapest decent health insurance options in Texas?

Hi,

Posting on behalf of my aunt who is 52, I'm helping her research health insurance options. We both live in Texas. She previously had Cigna Gold PPO, which some salesperson told her was the best money could buy [she buys her own insurance, doesn't get any through a job]. It was like $600 a month though! And she's only 52 and in perfect health.

Could the Bogleheads recommend a good resource/link to search for cheaper options in TX? I'm sure that for $600 a month she got way more bells and whistles than she needs. Thanks
by nobsinvestor
Thu Sep 10, 2015 10:53 pm
Forum: Investing - Theory, News & General
Topic: Will the refugee crisis drag European economies down long term?
Replies: 16
Views: 2327

Re: Will the refugee crisis drag European economies down long term?

I wonder if we'll keep seeing threads like these if total international starts returning 20% a year for the next 2-3 years and total US stock returns less.
by nobsinvestor
Tue Sep 08, 2015 3:51 pm
Forum: Personal Investments
Topic: Could John Bogle Be Right About International Stock?
Replies: 222
Views: 41823

Re: Could John Bogle Be Right About International Stock?

However, is there a possibility that John Bogle just might be right, that you don't need them and you will do just fine investing strictly in the United States? As literally stated above he is almost certainly right -- not needed and you will do fine without if you are a US investor. It is also true that you will do fine if you invest a reasonable allocation to international. There are reasons this makes sense and no reason not to; Mr. Bogle is not claiming that this will be a serious mistake somehow. It is also true that there is no basis to claim the existence of a clear cut optimum allocation. Most likely it is not advised for a US investor to entirely avoid the US market. It is a mistake to frame this as a right or wrong issue. Most ac...
by nobsinvestor
Mon Sep 07, 2015 1:40 pm
Forum: Personal Finance (Not Investing)
Topic: Which homeowner insurance policy to get?
Replies: 11
Views: 1514

Re: Which homeowner insurance policy to get?

kenner wrote:
nobsinvestor wrote:thx for the replies. forgot to mention he owns the house 100%, paid cash for it. Already has flood insurance he told me. Just wondering what reasonable rates are on a 500k home for what I would consider essential...like the house burning down
What losses do you suggest he insure against?. There are hundreds of possilities.
not sure, thats why I'm asking you guys :)

I figured if I were in his shoes and owned the house and had millions in the bank, I'd just want fire insurance or whatever the cheapest package is from state farm et al....open to hearing more though.
by nobsinvestor
Mon Sep 07, 2015 1:26 pm
Forum: Personal Finance (Not Investing)
Topic: Which homeowner insurance policy to get?
Replies: 11
Views: 1514

Re: Which homeowner insurance policy to get?

thx for the replies. forgot to mention he owns the house 100%, paid cash for it. Already has flood insurance he told me. Just wondering what reasonable rates are on a 500k home for what I would consider essential...like the house burning down
by nobsinvestor
Mon Sep 07, 2015 12:02 pm
Forum: Personal Finance (Not Investing)
Topic: Which homeowner insurance policy to get?
Replies: 11
Views: 1514

Which homeowner insurance policy to get?

Hi guys, I'm trying to get some info for a relative who just bought a 500k house in Houston, TX. This relative has a high liquid net worth as well. What homeowner insurance policy would the Bogleheads advise? I was thinking just flood [even though the house is built up pretty high] and fire. Some State Farm salesman tried to sell my relative a $3500 per year policy but I'm not in the insurance business so I don't know if that's reasonable or not for a 500k house. Apparently it covered all kinds of things, probably most of which are not needed. Can anyone recommend a company/policy that would cover the basics and about how much it should cost? Thanks!

Thanks!
by nobsinvestor
Fri Sep 04, 2015 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Question for the Bogleheads Millionaires
Replies: 372
Views: 76990

Re: Question for the Bogleheads Millionaires

shocked nobody has said it yet.

Get a job in the actively managed investment industry!!! [analyst, fund manager or wholesaler]. You'll be making so much money you won't even need index funds.
by nobsinvestor
Fri Aug 28, 2015 11:56 am
Forum: Investing - Theory, News & General
Topic: Why no diversification benefit for international in this week's crash?
Replies: 90
Views: 11978

Re: Why no diversification benefit for international in this week's crash?

You still need international not for diversification but for exposure. At least that is why I hold Emerging Markets. The reasoning is loooong term, the quality of life in these countries will improve, reflect increased GDP and thereby increased returns. You are diversifying the risk of long-term under-performance of one or the other asset class. -jalbert Couldn't agree more with Jalbert. Buying foreign stocks as a "Safety" net to "protect" against US stock drops makes no sense. The correlations for global equities are high and probably only going higher as time goes on. Own foreign equities to make sure that over the next 10-40 years, if US stocks only end up returning 5% nominal, it's a good thing you owned foreign sto...
by nobsinvestor
Tue Aug 25, 2015 12:29 pm
Forum: Investing - Theory, News & General
Topic: Did anyone jump in and buy 30% cheaper ETFs yesterday?
Replies: 4
Views: 1469

Did anyone jump in and buy 30% cheaper ETFs yesterday?

So I've read lots of stories on here about many broad market ETFs falling by 30-40% yesterday at certain times during the open...did anyone buy in?? Will those orders be filled at the 30% discount before the chaos is sorted out?

My guess is, as a retail investor and not a HFT or Goldman Sachs, you'd have a low chance of getting your order filled before the big boys but it would be nice to be able to scoop up broad market ETFs at 30% discounts due to ETF volatility alone.
by nobsinvestor
Mon Aug 24, 2015 3:21 pm
Forum: Investing - Theory, News & General
Topic: More Proof: The 'Do Nothing' Strategy Works
Replies: 15
Views: 3908

Re: More Proof: The 'Do Nothing' Strategy Works

I love the do nothing strategy.

A relative of mine has millions invested in stocks in taxable. Could she tax loss harvest? Yes, but she's uncomfortable doing so for X,Y,Z reason. She isn't a seasoned investor and doesn't like to trade. Which suits boglehead investing just fine. But most importantly she has the discipline not to sell the equity portion of her portfolio during a dip/crash. And that's perfectly fine.

Do nothing works.
by nobsinvestor
Wed Jul 01, 2015 10:16 pm
Forum: Investing - Theory, News & General
Topic: The Fund Name is Not Enough
Replies: 24
Views: 4502

Re: The Fund Name is Not Enough

Oppenheimer has been pulling this garbage for a while now. Forbes documented it in 2013. http://www.forbes.com/sites/jakezamansky/2013/10/28/the-puerto-rican-bond-plot-thickens/ Puerto Rico has a struggling economy and is facing a staggering burden of unfunded pension liabilities. But some municipal bond fund managers have been gobbling up Puerto Rico’s debt like they were kids with a bag of candy on Halloween, according to several reports. And the problem may be that investors were misled or confused by the name of the bond funds that they bought. In the end, it’s investors, not bond managers, who are left with a bellyache. According to The Bond Buyer: “Franklin Templeton’s “Franklin Double Tax-Free Income A” fund is 61% Puerto Rico debt,...
by nobsinvestor
Wed Jul 01, 2015 5:41 pm
Forum: Investing - Theory, News & General
Topic: The Fund Name is Not Enough
Replies: 24
Views: 4502

Re: The Fund Name is Not Enough

Looks like a deceitful way for fund managers at Oppenheimer et al to juice their funds' yield and give their "Advisors" something with a high yield to sell to clients without informing them of the huge risks [~50% of fund assets in one island's bonds with dubious creditworthiness]

It's not like they used 10% of the fund's assets, they used ~50% in these cases, just enough to not call it a puerto rico fund

Typical investment industry BS. If Vanguard tried something similar [stacking a state fund with ~50% puerto rico bonds to juice the yield], I'd be outraged
by nobsinvestor
Sat Jun 13, 2015 12:40 am
Forum: Investing - Theory, News & General
Topic: M* How to Fine Tune Your Investment Mix in Retirement
Replies: 7
Views: 1998

Re: M* How to Fine Tune Your Investment Mix in Retirement

Let me use your Time Machine to go back to 1998. Send me your address and I will come and pick it up. I bought several thousand shares of VBR in 2009 in a taxable account. I have not sold one single share of since. So buy-and-hold can be a winner if one picks the right start point. All the "outperformance" of VBR over total stock market index occurred in that first year of ownership. If I had bought a year later, then VTSAX would best VBR. However, I have bought and sold additional shares of VBR and IJS in my tax-advantaged accounts in acts of rebalancing. One can see when SCV underperforms TSM and buy. One can see when SCV outperforms TSM and sell. That's why I don't think one should simply buy once and hold. Doesn't that requir...
by nobsinvestor
Fri Jun 12, 2015 10:33 pm
Forum: Investing - Theory, News & General
Topic: M* How to Fine Tune Your Investment Mix in Retirement
Replies: 7
Views: 1998

Re: M* How to Fine Tune Your Investment Mix in Retirement

In general, I am always left with a bad taste in my mouth with any advice that shows up on Morningstar. It always sounds right at first, but it is twisted just enough that one can usually do better. I suppose Ms Benz is nice and knowledgeable, but she never ever ever comes all the way over to the strategies advocated by folks at bogleheads.org. In her playbook, there is always room for buckets, for actively-managed funds, for stocks, for wide moats, and so on. Now back to small-cap value: I believe that SCV is not something that one should buy-and-hold. Since it is more volatile than a total market index fund, I believe one will need to spend some effort to rebalance at opportune times in order to make use of its benefits. I do not believe...
by nobsinvestor
Fri Jun 12, 2015 7:34 pm
Forum: Investing - Theory, News & General
Topic: Is "beating the market a misnomer"?
Replies: 8
Views: 1519

Is "beating the market a misnomer"?

Ok so hear my theory out. You often hear people brag about "beating the market". Let's assume this means they earned a higher return over some period of time than say the S&P 500 or the Total Market Index. Wrong. They did not beat anything. They simply earned a higher return by taking on more risk. Example: If I, nobsinvestor, bought Gilead Sciences with all of my money [100% of portfolio] in 2010, did I beat the market in the last 5 years? Technically, yes. But I was also a damn fool given the level of risk involved with any one security. Ok, a less extreme example: An active fund manager making concentrated, high conviction bets in a relatively diversified small portfolio [say 50-200 holdings]. Let's say this manager beats t...
by nobsinvestor
Wed Jun 10, 2015 10:12 pm
Forum: Investing - Theory, News & General
Topic: Is it possible to believe in slice and dicing but not a rebalancing bonus?
Replies: 22
Views: 4858

Re: Is it possible to believe in slice and dicing but not a rebalancing bonus?

I guess I worded my original post poorly. I meant to ask, can you be a dedicated rebalancer with multiple asset classes yet not believe in the bonus. Moreover, do you personally let your overweight classes ride or do you have bands? The answer is surely to rebalance of course. The reason to rebalance is always that one believes having a certain asset allocation is optimal and that therefore one does not allow the allocation to move away from that optimal allocation. If you let things ride then on average the highest returning assets become overweight or increasingly overweight. If you wanted that outcome, you would have invested at that outcome originally. It could be, logically, that you believe the optimum asset allocation changes as tim...
by nobsinvestor
Wed Jun 10, 2015 5:54 pm
Forum: Investing - Theory, News & General
Topic: Is it possible to believe in slice and dicing but not a rebalancing bonus?
Replies: 22
Views: 4858

Re: Is it possible to believe in slice and dicing but not a rebalancing bonus?

watchnerd wrote:
nobsinvestor wrote:
But it seems to me that you cannot believe that there is no rebalancing bonus, but then also slice and dice into multiple asset classes expecting some kind of benefit from it.
Sure you can.

I can choose to overweight something because I think it will perform better over a certain timeframe. This doesn't require any belief in rebalancing bonuses.

For example, I overweight Emerging Markets relative to Europe because I like some of the fundamentals better.
I guess I worded my original post poorly. I meant to ask, can you be a dedicated rebalancer with multiple asset classes yet not believe in the bonus. Moreover, do you personally let your overweight classes ride or do you have bands?
by nobsinvestor
Wed Jun 10, 2015 2:18 pm
Forum: Investing - Theory, News & General
Topic: Is it possible to believe in slice and dicing but not a rebalancing bonus?
Replies: 22
Views: 4858

Re: Is it possible to believe in slice and dicing but not a rebalancing bonus?

So does anyone think it's reasonable to set an initial "risky" AA [large cap stocks, REITS, small caps, etc] made up of various asset classes, some overweighted of course, and just let it ride, realizing you're taking on higher risk for higher return potential, but still keeping the big risk in check with a bond allocation that is rebalanced when needed?
by nobsinvestor
Wed Jun 10, 2015 12:49 pm
Forum: Investing - Theory, News & General
Topic: Is it possible to believe in slice and dicing but not a rebalancing bonus?
Replies: 22
Views: 4858

Re: Is it possible to believe in slice and dicing but not a rebalancing bonus?

Or do some of you believe in slicing and dicing/ overweighting certain asset classes [small cap value, foreign small cap, REIT, etc] and just letting them ride? You seem to be asking about two different things here: slice and dice, and overweighting certain asset classes. The vast majority of people who slice up allocations do not hold market cap weightings. They are overweighted in some areas. If somebody has a sliced-up allocation that together makes up the broad market (e.g. S&P 500 and extended market funds in the proportion that make up total stock), the performance will be the same as the broad market, minus perhaps any additional expense ratios for the specialized funds and potential capital gains taxes.* If someone is overweigh...
by nobsinvestor
Wed Jun 10, 2015 12:05 pm
Forum: Investing - Theory, News & General
Topic: Is it possible to believe in slice and dicing but not a rebalancing bonus?
Replies: 22
Views: 4858

Is it possible to believe in slice and dicing but not a rebalancing bonus?

So I know it's a hot topic, about whether or not there is a rebalancing "bonus", or excess return from rebalancing less-correlated asset classes versus letting them ride or not slicing and dicing at all.

But it seems to me that you cannot believe that there is no rebalancing bonus, but then also slice and dice into multiple asset classes expecting some kind of benefit from it.

So if you slice and dice but do not believe in a rebalancing bonus, my question is, why slice and dice in the first place?

Or do some of you believe in slicing and dicing/ overweighting certain asset classes [small cap value, foreign small cap, REIT, etc] and just letting them ride?



Thoughts?
by nobsinvestor
Tue Jun 09, 2015 9:53 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 6250

Re: Does break-even duration matter if bond fund payments are not re-invested?

So if one holds to the average duration, one should, at the end of the duration period from time of investment, capture the current yield to maturity [SEC yield] at time of investment, right? No. lack_ey has done a fine job of explaining why this is not the case. I recommend a careful reading of lack_ey's replies. Also, you can empirically verify that this is not the case by looking at historical bond fund returns over holding periods equal to average duration, and see that realized, annualized returns can vary as much as a percentage point or more from initial SEC yield. I can point you to posts in which I've shown this if interested. With respect to the original question, the concept of point of indifference is related to the bond portfo...
by nobsinvestor
Tue Jun 09, 2015 4:28 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 6250

Re: Does break-even duration matter if bond fund payments are not re-invested?

Also, on the Bogleheads link previously posted on duration: "Thus duration represents the length of time it would take for the total value of the fund, with dividends reinvested, to be worth exactly what it would have been worth had interest rates not risen." So it looks like dividends do indeed have to be re-invested if one wants to ensure absolutely no total return loss, right? No, not really. The calculation is customarily done with dividends reinvested to eliminate inconsequential questions like "exactly how much of the yield is being paid out as dividends". How well it holds depends on how much of the dividend you withdraw. If the answer is "same as before", then you'll be in the same place as before, wit...
by nobsinvestor
Tue Jun 09, 2015 3:32 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 6250

Re: Does break-even duration matter if bond fund payments are not re-invested?

Also, on the Bogleheads link previously posted on duration:

"Thus duration represents the length of time it would take for the total value of the fund, with dividends reinvested, to be worth exactly what it would have been worth had interest rates not risen."

So it looks like dividends do indeed have to be re-invested if one wants to ensure absolutely no total return loss, right?