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Re: The lowest stock allocation you plan to stay with

Retired, 72. 85% stocks right now. May slowly take it down to 80%, but I'll need to overcome an aversion to selling stocks and buying bonds.
by pascalwager
Fri Jan 30, 2015 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 33
Views: 1218

Re: Vanguard's government bond index funds

I use Vanguard Intermediate-Term Government Bond Index Fund Admiral Shares (VSIGX) because: • It's a passively managed index fund. The Vanguard Treasury funds are actively managed. • At investments between $10k and $50k, the expense ratio is lower. • Though I'm not really interested in the Agency s...
by pascalwager
Fri Jan 30, 2015 1:26 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 1824

Re: Vanguard's government bond index funds

The three Vg Treasury bond funds list about 5% in MBS, so I checked the holdings. I divided the MBS holdings (a single security) by the fund NAV and got a very small amount, 0.00068% for the intermediate fund. I'm going to check out this discrepancy with Vg. Personally, I would prefer little or no M...
by pascalwager
Thu Jan 29, 2015 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 1824

Re: Vanguard's government bond index funds

Postby saltycaper » Wed Jan 28, 2015 8:54 pm pascalwager wrote: I prefer to avoid GSE debt (credit risk and undesirable options), so I would not wish to purchase the Vg Govt Bond Index Funds. I buy only straight Treasury bond funds with no credit risk. David Swensen discusses this issue in Unconven...
by pascalwager
Thu Jan 29, 2015 1:47 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 1824

Re: Any reason NOT to buy treasuries individually?

In his book Swensen does seem to promote long term Treasuries. However, a few years ago on the Diehards Forum, he responded to a question about Treasury maturities. He recommended a barbell composed of both short and long Treasuries with an overall maturity equal to the Barclays Treasury Index. I gu...
by pascalwager
Thu Jan 29, 2015 12:21 am
 
Forum: Investing - Theory, News & General
Topic: Any reason NOT to buy treasuries individually?
Replies: 17
Views: 1409

Re: Vanguard's government bond index funds

I prefer to avoid GSE debt (credit risk and undesirable options), so I would not wish to purchase the Vg Govt Bond Index Funds. I buy only straight Treasury bond funds with no credit risk. David Swensen discusses this issue in Unconventional Success.
by pascalwager
Wed Jan 28, 2015 3:20 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 1824

In The Little Red Book, Mr. Bogle recommends using any combination of the Vg short-term/intermediate-term bond funds that meets the investor's personal needs.
by pascalwager
Sun Jan 25, 2015 11:53 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Bogle's current bond investing advice--what is it?
Replies: 22
Views: 3383

Re: Am I making a mistake being too conservative?

Note: If you're a small business owner, you may want to tilt to large company stocks in the equity portion of your portfolio.
by pascalwager
Thu Jan 22, 2015 12:13 pm
 
Forum: Investing - Theory, News & General
Topic: Am I making a mistake being too conservative?
Replies: 58
Views: 7551

Re: Why invest in International funds? It's a mystery

As a last resort, maybe just adopt the consensus AA:

US/int'l

Ellis, Malkiel, Swedroe: 50/50
Swensen: 60/40
Larimore: 65/35
Bernstein, Ferri, Vanguard: 70/30
Bogle: 100/0
Fama: "personal taste"
by pascalwager
Thu Jan 22, 2015 2:33 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in International funds? It's a mystery
Replies: 121
Views: 10514

Re: Why invest in International funds? It's a mystery

Fama's involvement with DFA hasn't stopped him from saying that the average investor should not tilt his/her portfolio to size or value , but rather should invest using a total market approach. (John Cochrane, his son-in-law and colleague at Chicago Booth, says the same thing.) Nor has it prevented ...
by pascalwager
Tue Jan 20, 2015 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why invest in International funds? It's a mystery
Replies: 121
Views: 10514

Re: Why invest in International funds? It's a mystery

I like Gene Fama's simple observation that you don't need an int'l AA because the US market is itself adequately diversified. A new investor should probably consider just buying US total market, but an investor can't just sell off an existing int'l AA right now or he/she would be selling low and buy...
by pascalwager
Tue Jan 20, 2015 1:41 am
 
Forum: Investing - Theory, News & General
Topic: Why invest in International funds? It's a mystery
Replies: 121
Views: 10514

Re: Size + Value Premium Explained

The size premium may have gone away after 1981. I have a lot of DFA small cap, US and int'l, but now just consider it to be a diversifying asset.
by pascalwager
Sun Jan 18, 2015 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: Size + Value Premium Explained
Replies: 5
Views: 504

Re: Confused: Why does anyone buy German bonds?

pascalwager » Sat Jan 17, 2015 2:35 am Postby robert88 » Sat Jan 17, 2015 1:21 am Johno wrote: Right, credit default swaps on Germany and the US are similar, a pretty dicey instrument to write on an entity like the US especially (lots of correlated counterparty risk, one would think), but anyway do...
by pascalwager
Sun Jan 18, 2015 1:49 am
 
Forum: Investing - Theory, News & General
Topic: Confused: Why does anyone buy German bonds?
Replies: 24
Views: 2666

Re: Confused: Why does anyone buy German bonds?

Postby robert88 » Sat Jan 17, 2015 1:21 am Johno wrote: Right, credit default swaps on Germany and the US are similar, a pretty dicey instrument to write on an entity like the US especially (lots of correlated counterparty risk, one would think), but anyway don't show a big difference. At times Ger...
by pascalwager
Sat Jan 17, 2015 2:35 am
 
Forum: Investing - Theory, News & General
Topic: Confused: Why does anyone buy German bonds?
Replies: 24
Views: 2666

Re: Rick Ferri looking to internationalize his portfolio

visualguy wrote: backpacker, Two differences: 1) S&P 500 performance over the last 20 years has been over the threshold of what I would consider decent. This is not the case for the Ex-US index. You needed an active fund to get a decent return out of foreign. 2) I haven't done a scientific stud...
by pascalwager
Thu Jan 15, 2015 10:06 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25975

Re: Rick Ferri looking to internationalize his portfolio

15 year returns:

OAKIX 8.30%
MSCI ACWI X-USA 3.22%

visualguy for BH int'l funds advisor?
by pascalwager
Thu Jan 15, 2015 5:50 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25975

Re: Short term bonds in rising interest rates?

allroads wrote: I will take a look. Thanks! Am I correct that Bernstein's position is to only utilize short term bonds in a portfolio? That is all I have ever read him endorse. However, the problem with Bernstein's recommendation is that using the word short term doesn't really tell you what he mea...
by pascalwager
Thu Jan 15, 2015 12:13 pm
 
Forum: Investing - Theory, News & General
Topic: Short term bonds in rising interest rates?
Replies: 26
Views: 2583

Re: Where do you tilt your Total Int'l Fund?

I add the following tilts to TISM:

int'l large value: 95% of TISM
int'l small: 63% of TISM
EM: 5% of TISM
by pascalwager
Wed Jan 14, 2015 2:37 am
 
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 3227

Re: Asness: Why individual bonds are no safer than bond fund

I don't think Bernstein is making a market call; he has always preferred short-term bonds as a more riskless asset. Also, I had two advisor-designed DFA accounts established in 1995. One had a one-year bond fund and the other had a two-year bond fund. The intent was to produce a small real return.
by pascalwager
Tue Jan 13, 2015 10:30 pm
 
Forum: Investing - Theory, News & General
Topic: Asness: Why individual bonds are no safer than bond funds
Replies: 59
Views: 2940

Re: Asness: Why individual bonds are no safer than bond fund

by saltycaper » Tue Jan 13, 2015 4:10 pm pascalwager wrote: Therefore, Bernstein recommends purchasing only individual TIPS for redemption at maturity. I assume this means then that TIPS are never sold for re-balancing purposes if one follows this advice? And that in that case you just assume their...
by pascalwager
Tue Jan 13, 2015 7:25 pm
 
Forum: Investing - Theory, News & General
Topic: Asness: Why individual bonds are no safer than bond funds
Replies: 59
Views: 2940

Re: Asness: Why individual bonds are no safer than bond fund

Unread postby richard » Tue Jan 13, 2015 4:18 pm pascalwager wrote: Cliff Asness' comments may not apply to TIPS. Bill Bernstein warns about a liquidity risk which shows up when a TIPS fund manager needs to sell shares on the secondary market during a financial crisis, perhaps incurring a loss of 2...
by pascalwager
Tue Jan 13, 2015 7:10 pm
 
Forum: Investing - Theory, News & General
Topic: Asness: Why individual bonds are no safer than bond funds
Replies: 59
Views: 2940

Re: How much in I bonds do you own?

I think Treasury Direct is excellent, at least for I Bond purchases.
by pascalwager
Tue Jan 13, 2015 6:13 pm
 
Forum: Investing - Theory, News & General
Topic: How much in I bonds do you own?
Replies: 29
Views: 3118

Re: Asness: Why individual bonds are no safer than bond fund

Cliff Asness' comments may not apply to TIPS. Bill Bernstein warns about a liquidity risk which shows up when a TIPS fund manager needs to sell shares on the secondary market during a financial crisis, perhaps incurring a loss of 25 or 30%. Therefore, Bernstein recommends purchasing only individual ...
by pascalwager
Tue Jan 13, 2015 5:43 pm
 
Forum: Investing - Theory, News & General
Topic: Asness: Why individual bonds are no safer than bond funds
Replies: 59
Views: 2940

Re: Would you buy Total World index if it had Admiral Shares

Postby bulldog1 » Tue Jan 13, 2015 11:37 am Vanguard Total World Index is now at 55.3% US Equities. It keeps creeping up every few months. https://personal.vanguard.com/us/funds/ ... IntExt=INT This is my only holding in my taxable account. So simple. I clicked on your link and see US = 51.7% (not ...
by pascalwager
Tue Jan 13, 2015 3:13 pm
 
Forum: Investing - Theory, News & General
Topic: Would you buy Total World index if it had Admiral Shares?
Replies: 62
Views: 7691

Re: Do you use the 9 style-box for AA?

I've used the M* style box to analyze my existing portfolio, but more out of curiosity than for construction. To my knowledge, no authors employ the style box in their AA developments.
by pascalwager
Mon Jan 12, 2015 10:16 pm
 
Forum: Investing - Theory, News & General
Topic: Do you use the 9 style-box for AA?
Replies: 24
Views: 1874

Re: Vanguard Short Term TIPS fund puzzle

Seems like the duration was about one year greater a few months back.
by pascalwager
Mon Jan 12, 2015 12:25 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPS fund puzzle
Replies: 10
Views: 1497

Re: Where do you tilt your Total Int'l Fund?

Postby livesoft » Sun Jan 11, 2015 4:56 pm Ijim wrote: But don't many bogleheads believe in the 3-fund portfolio? Sure, but one has to remember that one could not have 3-fund portfolio that covered the market weights of the world until relatively recently. After all, the Vanguard Total Internationa...
by pascalwager
Sun Jan 11, 2015 8:51 pm
 
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 3227

Re: Rick Ferri looking to internationalize his portfolio

Postby columbia » Sat Jan 10, 2015 11:41 pm I don't care how other people choose to invest their money, but I'm bemused by the insunuations that going abroad is essential. It may be essential to those investors who are concerned that the Japan experience of a continuously flat or declining stock ma...
by pascalwager
Sun Jan 11, 2015 1:43 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25975

Re: What is the international portion of your portfolio and

I have the following int'l AA (% of equities) across five accounts: VG TISM 19% DFA ILV 18% DFA ISC 12% DFA EM 1% Total int'l 50% In your case, assuming you had plenty of US market, I would reduce/eliminate the VG TISM and VG ISC and use only the DFA ISCV and DFA EM. (The ISC risk premium is doubtfu...
by pascalwager
Sat Jan 10, 2015 9:00 pm
 
Forum: Investing - Theory, News & General
Topic: What is the international portion of your portfolio and why?
Replies: 132
Views: 9883

Re: Rick Ferri looking to internationalize his portfolio

VG TISM (VTIAX) has provided a higher return than M* Foreign Blend since 1996. It's 19% of my equitiess--also have lots of DFA ILV and ISC. I don't expect int'l to do well in the future, but I ignore my own perceptions which I consider mere noise.
by pascalwager
Fri Jan 09, 2015 9:11 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25975

Re: larry portfolio vs 3 fund portfolio last 2 years

It might be interesting to compare your portfolio returns to the S&P 500. Larry once wrote that the Larry Portfolio was expected to provide S&P 500-like returns with much less volatility. Anyway, congratulations on finding the grit to pursue this evidence-based, but uncommon, approach to con...
by pascalwager
Tue Jan 06, 2015 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: larry portfolio vs 3 fund portfolio last 2 years
Replies: 16
Views: 2555

Re: Rick Ferri looking to internationalize his portfolio

Rick wrote:
That's the way the world is going, and that's where my allocation is going.


I don't know what this means. What way is the world going?
by pascalwager
Sat Jan 03, 2015 2:19 am
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 228
Views: 25975

Re: Int'l Value vs Int'l Small Caps?

Int'l Developed: 50% (e.g. VEA) Int'l Small Caps: 25% (e.g. VSS) Emerging: 25% (e.g. VWO) Since there doesn't seem to be an international small cap premium (see Research Affiliates research), I would tend to add only a market amount of small cap for diversification, not a tilt. Something like: VEA ...
by pascalwager
Mon Dec 29, 2014 9:21 pm
 
Forum: Investing - Theory, News & General
Topic: Int'l Value vs Int'l Small Caps?
Replies: 32
Views: 3991

Re: Retiree Poll:What is your current AA?

I don't believe that Nassim Taleb's writings should be used to advocate currently owning bonds. Yes, previously he recommended owning, and did own, 90% in Treasuries; but he no longer "trusts" bonds . His present portfolio (from video interview) is mainly stocks, real estate, timber, and o...
by pascalwager
Mon Dec 29, 2014 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: Retiree Poll:What is your current AA?
Replies: 85
Views: 6977

Re: Equal Weighted Funds - Better?

I think equal weighting just creates a value tilt compared to cap weighting. I looked at the M* style boxes for RSP (S&P 500 equal-weighting) and SPY (S&P 500). RSP has 37% value and 30% growth. SPY has 34% value and 33% growth. RSP has 54% large and 46% medium. SPY has 88% large and 12% me...
by pascalwager
Sun Dec 28, 2014 2:20 am
 
Forum: Investing - Theory, News & General
Topic: Equal Weighted Funds - Better?
Replies: 31
Views: 2590

Re: Why does Swensen have 30% Bonds?

He believes that 25 to 30% should be the maximum allocation for any single asset class. He also states that 30% in U.S. securities can provide protection during a financial crisis.

The portfolio you show is for individual investors, not his endowment fund.
by pascalwager
Sat Dec 20, 2014 2:33 pm
 
Forum: Investing - Theory, News & General
Topic: Why does Swensen have 30% Bonds?
Replies: 28
Views: 3475

Re: What is your opinion about "tilting?"

pascalwager wrote: by DVMResident » Thu Dec 11, 2014 6:30 pm leonard wrote: But, I don't think they actually take in to account whether they will really maintain the rebalancing involved. I really think they don't consider a less-financially-interested spouse one day being the portfolio manager. Th...
by pascalwager
Tue Dec 16, 2014 8:08 pm
 
Forum: Investing - Theory, News & General
Topic: What is your opinion about "tilting?"
Replies: 116
Views: 9374

Re: Why don't YOU follow Buffett's advice?

Buffett offers this advice (90/10, VG 500/ST bonds) for someone with a minimum 20-year time horizon. Seems reasonable to me: broad-based index stock fund and low-risk bonds.

I don't think his wife is going to inherit billions of dollars--most of his fortune is going to charity.
by pascalwager
Sun Dec 14, 2014 10:44 pm
 
Forum: Investing - Theory, News & General
Topic: Why don't YOU follow Buffett's advice?
Replies: 114
Views: 8871

Re: What is your opinion about "tilting?"

by DVMResident » Thu Dec 11, 2014 6:30 pm leonard wrote: But, I don't think they actually take in to account whether they will really maintain the rebalancing involved. I really think they don't consider a less-financially-interested spouse one day being the portfolio manager. Thus, I think people ...
by pascalwager
Fri Dec 12, 2014 1:24 am
 
Forum: Investing - Theory, News & General
Topic: What is your opinion about "tilting?"
Replies: 116
Views: 9374

Re: What is your opinion about "tilting?"

I still have my original DFA portfolios as I consider DFA to be the tiltmaster. Tilting should be reserved for unaverage investors such as retirees. Average investors should hold the total market.
by pascalwager
Fri Dec 12, 2014 1:03 am
 
Forum: Investing - Theory, News & General
Topic: What is your opinion about "tilting?"
Replies: 116
Views: 9374

Re: Is the Boglehead Consensus on Long Bonds still Negative?

by LeeMKE » Thu Dec 11, 2014 5:29 pm LeeMKE wrote: My asset allocation is 60/20/20 with 20 percent in LTGovt I'm confused. What's the other 20? I assume the 60 is equity. 60 US stocks / 20 Intl stocks / 20 LTG bond fund Good to hear that I'm doing something reasonable. Thanks Day9! For a high equity...
by pascalwager
Fri Dec 12, 2014 12:34 am
 
Forum: Investing - Theory, News & General
Topic: Is the Boglehead Consensus on Long Bonds still Negative?
Replies: 29
Views: 3419

Re: Is the Boglehead Consensus on Long Bonds still Negative?

What overall duration do you want for your fixed income portfolio? My spreadsheet includes a formula for overall fixed income duration. If I had a question about adding long term bonds, I would enter a long bond purchase proposal and check the new overall portfolio fixed income duration.
by pascalwager
Thu Dec 11, 2014 4:29 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Boglehead Consensus on Long Bonds still Negative?
Replies: 29
Views: 3419

Re: Is it worth purchasing Ibonds on the verge retirement?

I'm 72 and still buying I Bonds. Were it possible, I Bonds would be my only bond investment.
by pascalwager
Thu Dec 11, 2014 3:54 pm
 
Forum: Investing - Theory, News & General
Topic: Is it worth purchasing Ibonds on the verge retirement?
Replies: 25
Views: 2548

Re: Is the Boglehead Consensus on Long Bonds still Negative?

Vanguard Total Bond Market Index Fund has about15% of its bonds in long term bonds. Consider that as a starting point.


But the fund overall duration is intermediate as the long-term bonds are being combined with short and intermediate durations.
by pascalwager
Wed Dec 10, 2014 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Boglehead Consensus on Long Bonds still Negative?
Replies: 29
Views: 3419

Re: Poll: Your Portfolio Tax Diversification

I voted "None of the Above" as I have a large VA.

Taxable 45%
ROTH 4%
Traditional IRA 22%
VA 28%
by pascalwager
Wed Dec 10, 2014 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Your Portfolio Tax Diversification
Replies: 45
Views: 2634

Re: How to Think About Risk in Retirement - Bernstein

I think Bernstein does a better job explaining the logic than Pfau and Kitces did. It remains very compelling to me. Bernstein is an excellent writer and this piece is clear and straightforward, helping me to understand the choices. He always adds a little humor here and there, such as in this summ...
by pascalwager
Sun Dec 07, 2014 11:44 pm
 
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9668

Re: What % of your fixed-income is TIPs?

TIPS can help during deflation because the original principal will be redeemed even if the index adjusted principal is less. Also, Larry Swedroe recently showed (see ETF.com) that only short-term TIPS or a commodity index fund would provide short-term inflation hedging. For a TIPS/cash portfolio, co...
by pascalwager
Thu Dec 04, 2014 2:26 pm
 
Forum: Investing - Theory, News & General
Topic: What % of your fixed-income is TIPs?
Replies: 71
Views: 3625

Re: POLL: Should investors have a separate emergency fund?

All of my "cash" is part (13%) of my portfolio: checking, HY savings, CDs, I-Bonds. I also consider this cash to be my fixed income, or "bonds". It's also my emergency fund. While I call it cash, most of it is generating "reasonable" interest.
by pascalwager
Wed Dec 03, 2014 1:39 am
 
Forum: Investing - Theory, News & General
Topic: POLL: Should investors have a separate emergency fund?
Replies: 58
Views: 3627

Re: Vanguard Ultra-Short-Term Bond Fund coming in early 2015

DFA has a similar VA fund with a one-year duration. The current YTD is only 0.29%. This was the only bond holding in my DFA VA account for nearly two decades. I assume the ultra-short duration was expected to provide inflation protection.
by pascalwager
Tue Nov 25, 2014 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund coming in early 2015.
Replies: 39
Views: 4809

Re: Spreadsheet for Rebalancing Bands

If you should happen to use a 50/50 stock allocation (e.g., TSM/TISM) and no bonds, the 5% band is all you need to consider. Just set up your spreadsheet to show the actual percentages for TSM and TISM and rebalance when TSM (TISM) is above 55% or below 45%. I've done this for several years and stil...
by pascalwager
Sun Oct 19, 2014 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet for Rebalancing Bands
Replies: 18
Views: 2070
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