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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: 3071

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: 7480

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: 10433

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: 10433

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: 10433

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: 501

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: 2646

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: 2646

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: 226
Views: 25466

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: 226
Views: 25466

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: 2565

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: 3208

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: 2928

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: 2928

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: 2928

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: 3107

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: 2928

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: 58
Views: 6980

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: 1866

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: 3208

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: 226
Views: 25466

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: 129
Views: 9262

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: 226
Views: 25466

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: 2554

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: 226
Views: 25466

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: 3976

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: 6975

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: 2579

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: 3469

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: 9368

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: 8866

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: 9368

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: 9368

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: 2632

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: 9662

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: 3622

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: 3626

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: 4806

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: 2069

Re: AA: 50/50 Domestic and International Stock IPS

I've done 50:50 since 1995. This seems to be a good ratio for people like me that don't know anything. At VG I use TSM and TISM.
by pascalwager
Mon Oct 13, 2014 3:44 pm
 
Forum: Investing - Theory, News & General
Topic: AA: 50/50 Domestic and International Stock IPS
Replies: 18
Views: 1704

Re: I'm Chuck and I work at Vanguard and Invest in Active Fu

Dan Solin recommends using a paid advisor only if he/she has a PhD in finance.
by pascalwager
Thu Oct 09, 2014 9:31 pm
 
Forum: Investing - Theory, News & General
Topic: I'm Chuck and I work at Vanguard and Invest in Active Funds
Replies: 44
Views: 8884

Re: Retirees only, what was you average investment return?

The important thing is to stay the course. If I knew my returns, I might be discouraged from staying the course--or stay the course for the wrong reason.
by pascalwager
Thu Oct 09, 2014 12:36 am
 
Forum: Investing - Theory, News & General
Topic: Retirees only, what was you average investment return?
Replies: 49
Views: 3611

Re: What was your initial AA and how has that worked out?

I started "investing" in 1980 at age 38 and bought 100% bonds (T-Bills) for the first 15 years. In 1995 I gradually sold all the T-bills and bought two DFA 85:15 stocks/bonds portfolios. Also, in 1995, I began to contribute (max and catch-up) to my workplace deferred comp using an S&P ...
by pascalwager
Tue Oct 07, 2014 3:32 pm
 
Forum: Investing - Theory, News & General
Topic: What was your initial AA and how has that worked out?
Replies: 32
Views: 2623

Re: Optimum # of Funds in a Portfolio ?

Two funds: VG TSM and VG TISM, 50:50.
by pascalwager
Mon Oct 06, 2014 12:30 am
 
Forum: Investing - Theory, News & General
Topic: Optimum # of Funds in a Portfolio ?
Replies: 17
Views: 1609

Re: Will you invest in Bill Gross's new bond fund?

I'll stay with checking, savings, CDs, and I Bonds for fixed income.
by pascalwager
Thu Oct 02, 2014 12:27 am
 
Forum: Investing - Theory, News & General
Topic: Will you invest in Bill Gross's new bond fund?
Replies: 51
Views: 3087
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