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Re: global diversification works in long term

What tends to worry me these days about international equities -- especially in Japan and Europe -- is that their demographics are horrible. The U. S. has the "echo-boom" generation that will be very productive and numerous, and so we should see some continued wealth creation in the U. S....
by pascalwager
Wed Jul 30, 2014 5:02 pm
 
Forum: Investing - Theory, News & General
Topic: global diversification works in long term
Replies: 19
Views: 1221

Re: The emerging market portion of Total International Stock

The EM portion of TISM varies because it's the actual int'l market percentage for EM. By including EM in TISM, the volatility of EM is masked and the investor is less likely to make changes compared with holding EM separately. As I recall, Merriman used to recommend 50:50 domestic:foreign; so 10% EM...
by pascalwager
Wed Jul 30, 2014 3:39 am
 
Forum: Investing - Theory, News & General
Topic: The emerging market portion of Total International Stock
Replies: 5
Views: 1041

Re: Should retirement investors own small/value stocks at al

larryswedroe wrote:fwiw retirees are the very people who should tilt AND lower beta exposure to cut tail risk when it matters most in withdrawal stage
larry


Yes, if you're a retiree with a large FI AA, then why not add more FI and go all the way to the LP?
by pascalwager
Tue Jul 29, 2014 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: Should retirement investors own small/value stocks at all?
Replies: 35
Views: 2366

Re: Should retirement investors own small/value stocks at al

This is from Fama, Cochrane, and Norstad: The average investor works and usually should use total market. If an investor works for a large growth company, then should consider holding SV stocks. A retiree is not average by definition (not part of the work force) and would not be increasing an existi...
by pascalwager
Tue Jul 29, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Should retirement investors own small/value stocks at all?
Replies: 35
Views: 2366

Re: Best way to reach initial allocation in a bull market?

by mhalley » Fri Jul 25, 2014 6:31 am The standard boglehead answer is that if you have a desired aa, then go ahead and jump in and buy your mutual funds/etfs. Certainly I can understand how if you have been sitting out this latest run, jumping in right now could be pretty scary. If it were me, I w...
by pascalwager
Tue Jul 29, 2014 3:13 am
 
Forum: Investing - Theory, News & General
Topic: Best way to reach initial allocation in a bull market?
Replies: 28
Views: 2550

Re: Best way to reach initial allocation in a bull market?

by mhalley » Fri Jul 25, 2014 6:31 am The standard boglehead answer is that if you have a desired aa, then go ahead and jump in and buy your mutual funds/etfs. Certainly I can understand how if you have been sitting out this latest run, jumping in right now could be pretty scary. If it were me, I w...
by pascalwager
Mon Jul 28, 2014 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: Best way to reach initial allocation in a bull market?
Replies: 28
Views: 2550

Re: POLL: Do you own corporate bonds?

I have only I-Bonds and CDs for FI, so I voted "no bonds".
by pascalwager
Sat Jul 26, 2014 2:49 am
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you own corporate bonds?
Replies: 35
Views: 2102

Re: DFA funds with one-time fee?

I started two DFA accounts in 1995 and separated from the advisor in 2011. One account is taxable. I cannot rebalance within this account because I'm not allowed to buy more DFA shares (except for reinvested dividends and capital gains). I also have a DFA VA. I can do transfers within this account f...
by pascalwager
Sat Jul 26, 2014 1:22 am
 
Forum: Investing - Theory, News & General
Topic: DFA funds with one-time fee?
Replies: 8
Views: 880

Re: Bonds beat stocks over the last 15 years

. Vanguard total stock market (VTSMX) = 5.25% Vanguard total bond market (VBMFX) = 5.37% Man I'm glad I didn't do a lump sum of all of my money in 1999. I did a large lump sum into two accounts in 1995, but at least no large market fund--all tilted. Value of one account now is 3.4 x cost basis.
by pascalwager
Thu Jul 24, 2014 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: Bonds beat stocks over the last 15 years
Replies: 93
Views: 7733

Re: Variable Annuity funding BY Cd's good or bad?

Are you sure about the ST Treasury Fund? It's not currently one of the VG VA portfolios and wasn't a few years ago either when I was investigating a VA transfer. VA's are not considered efficient compared to a taxable account unless you hold for at least 45 years, or use a tax-inefficient fund such ...
by pascalwager
Thu Jul 24, 2014 4:20 pm
 
Forum: Investing - Theory, News & General
Topic: Variable Annuity funding BY Cd's good or bad?
Replies: 6
Views: 333

Re: (TIPS) Treasury Inflation Protected Securities

Rick Ferri (author, advisor) recommends TIPs at 20% of fixed income.
by pascalwager
Mon Jul 21, 2014 2:10 am
 
Forum: Investing - Help with Personal Investments
Topic: (TIPS) Treasury Inflation Protected Securities
Replies: 3
Views: 916

Re: Poll: Has your AA changed in the last 18 months

I sold some IT bond funds last year, at a loss, and bought TSM. I discovered that I can't accept IT bond fund losses because of the assumed prolonged restoration period, but more easily accept stock losses. Also, I moved my large bank savings from a 0.1% account to an internet bank savings and CD la...
by pascalwager
Sun Jul 20, 2014 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Has your AA changed in the last 18 months
Replies: 58
Views: 3528

Re: Do any bogleheads hold the "Larry Portfolio?"

Larry, what does your (70%) bond portfolio look like? In your books you advise using short-term bonds for high bond allocations.
by pascalwager
Fri Jul 18, 2014 8:07 pm
 
Forum: Investing - Theory, News & General
Topic: Do any bogleheads hold the "Larry Portfolio?"
Replies: 18
Views: 2403

Re: [Poll] % of 3 funds in your financial asset portfolio?

I have 0% TBM, so I assume that means that I have 0% three-fund, despite the fact that TSM and TISM are about 40% of my stocks.
by pascalwager
Fri Jul 18, 2014 5:52 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] % of 3 funds in your financial asset portfolio?
Replies: 31
Views: 1689

Re: recent brokered CD fluctuation

What do you mean by "up 4.65%"? Also, for comparison, according to Samuel Lee (M*), the duration of a current 5-year CD is at most, 1.7 years, by his calculations. So, do you actually know the duration of your 10-year CD?
by pascalwager
Fri Jul 18, 2014 2:17 am
 
Forum: Investing - Theory, News & General
Topic: recent brokered CD fluctuation
Replies: 13
Views: 898

Re: Total Bond Yield vs. 5 year CD Interest Rates

...Bill Bernstein, in his new book, refers to these people #CD high-rate seekers# as "clever and aggressive". So far, I've only used a Synchrony 3-year CD ladder to improve the return on my cash... I don't quite understand. Let me speak directly to the my point of complexity. a) For how m...
by pascalwager
Fri Jul 18, 2014 1:06 am
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2267

Re: Total Bond Yield vs. 5 year CD Interest Rates

Now, the reality check. What ARE CD rates today, just a quick peek. Let's say Ally. 5 years, 1.6%. What's the SEC rate for Total Bond? 1.99%. What has the the total return been for Total Bond, 1-3-5-10, not saying anything about the future, just how has it fared recently? 4.15%, 3.49%, 4.63%, 4.80%...
by pascalwager
Thu Jul 17, 2014 7:07 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2267

Re: Total Bond Yield vs. 5 year CD Interest Rates

Now, the reality check. What ARE CD rates today, just a quick peek. Let's say Ally. 5 years, 1.6%. What's the SEC rate for Total Bond? 1.99%. What has the the total return been for Total Bond, 1-3-5-10, not saying anything about the future, just how has it faired recently? 4.15%, 3.49%, 4.63%, 4.80...
by pascalwager
Thu Jul 17, 2014 4:16 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2267

Re: But why not 100% stock index fund?

The 100% stock portfolio was recently legitimized by John Bogle in an interview, especially in light of expected low bond returns. But the investor needs to have the necessary "grit" to make it work. Considering my thoughts/actions in 2000 and 2008, I gave myself an 89% grit rating, and th...
by pascalwager
Wed Jul 16, 2014 10:56 pm
 
Forum: Investing - Theory, News & General
Topic: But why not 100% stock index fund?
Replies: 76
Views: 7095

Re: POLL: Do you have a dedicated REIT allocation?

I would only add them as an inflation hedge (as per Bernstein, Swensen), but not at current high prices. So I remain TSM-TISM.
by pascalwager
Wed Jul 16, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6978

Re: But why not 100% stock index fund?

In a recent interview, John Bogle legitimizes the 100% stock portfolio, especially in an era of low bond returns.
by pascalwager
Wed Jul 16, 2014 11:18 am
 
Forum: Investing - Theory, News & General
Topic: But why not 100% stock index fund?
Replies: 76
Views: 7095

Re: Article: Conversation with John Bogle - Part II

He now considers an all-stock portfolio a legitimate option, especially for someone impatient with current low bond yields. He also considers owning ST, IT, or/and LT (corporate) bond funds equally valid depending on one's risk/return preference. His own preference for IT bond funds is a behavioral ...
by pascalwager
Wed Jul 16, 2014 10:42 am
 
Forum: Investing - Theory, News & General
Topic: Article: Conversation with John Bogle - Part II
Replies: 11
Views: 1465

Re: In a crash, will you re-balance to maintain your target

In all of the previous crashes I was set up for scheduled quarterly rebalancing, so no problem. But now, as a retiree, I'm all self-managed, and don't really have any bonds to reallocate into stocks anyway. I do have a lot of cash and "cash", but I probably would not deplete it to buy stoc...
by pascalwager
Tue Jul 15, 2014 12:08 am
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4153

Re: Cash allocation in a portfolio

I answered, but I strongly doubt the responses capture what you are after. The prose asks how much cash people keep on hand for the purpose of buying equities during downturns. . But the poll option just asks what % of the portfolio is held in cash. I have no doubt that a sizable fraction of Bogleh...
by pascalwager
Mon Jul 14, 2014 3:12 pm
 
Forum: Investing - Theory, News & General
Topic: Cash allocation in a portfolio
Replies: 42
Views: 3727

Re: Cash allocation in a portfolio

I answered 0%. But I don't sell bonds re-balance. If I have to re-balance, I'll use new contribution. But even in 2008-9 crash, I used the same ratio for contribution. My initial fund started with a fixed 80/20 ratio and my contribution also has 80/20 ratio. Now the portfolio weights are close to 9...
by pascalwager
Mon Jul 14, 2014 3:00 pm
 
Forum: Investing - Theory, News & General
Topic: Cash allocation in a portfolio
Replies: 42
Views: 3727

Re: Cash allocation in a portfolio

I have a category which I think of as stability assets : checking, savings, CDs, I-bonds, IT Treasuries. I keep this as 20% of portfolio along with 80% stock funds. I use the Treasuries to complete the 20% AA and bring the overall duration up from zero and closer to 2.5 years. If I should happen to ...
by pascalwager
Mon Jul 14, 2014 7:18 am
 
Forum: Investing - Theory, News & General
Topic: Cash allocation in a portfolio
Replies: 42
Views: 3727

Re: Keep investing simple--consolidate.

I resolved my own quandary by investing both ways (slice-and-dice and total market) and I keep two completely separate dfa portfolios: currently 60% DFA and 40% VG Total Market (TSM and TISM). The DFA portion is larger because I initially lump-summed into it a long time ago. Pascal: Consider consol...
by pascalwager
Fri Jul 11, 2014 5:59 pm
 
Forum: Investing - Theory, News & General
Topic: One Total Stock Market Index Fund or 3-4 Sub-Funds?
Replies: 19
Views: 3476

Re: Asset Allocation At or Near Retirement?

In "Unconventional Success", Swensen recommends using what he calls the "Risky Portfolio" composed of domestic/int'l broad-based index funds, REITS, EM, and Treasuries. Then, ten years before reaching your personal time horizon, you begin to gradually convert the Risky Portfolio...
by pascalwager
Thu Jul 10, 2014 4:14 pm
 
Forum: Investing - Theory, News & General
Topic: Asset Allocation At or Near Retirement?
Replies: 51
Views: 4651

Re: Asset Allocation At or Near Retirement?

In "Unconventional Success", Swensen recommends using what he calls the "Risky Portfolio" composed of domestic/int'l broad-based index funds, REITS, EM, and Treasuries. Then, ten years before reaching your personal time horizon, you begin to gradually convert the Risky Portfolio ...
by pascalwager
Thu Jul 10, 2014 2:29 am
 
Forum: Investing - Theory, News & General
Topic: Asset Allocation At or Near Retirement?
Replies: 51
Views: 4651

Re: Asset Allocation At or Near Retirement?

I am two and a half months away from retirement. Instead of considering the asset allocation, I am keeping a large amount in safe assets that would provide me with sufficient cash while I am waiting to collect Social Security at the age of 70. Victoria This seems like a formal M* two-or-three bucke...
by pascalwager
Wed Jul 09, 2014 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: Asset Allocation At or Near Retirement?
Replies: 51
Views: 4651

Re: Asset Allocation At or Near Retirement?

I follow Charles Ellis' recommendation to have 0% FI until age 70 and then gradually increase FI if you think you need it . At age 71 (just fully retired) I have 12% FI (cash, CDs, I-Bonds) and may or may not add some CDs in my IRA down-the-line. I have always preferred a stock-dominant portfolio an...
by pascalwager
Wed Jul 09, 2014 6:22 pm
 
Forum: Investing - Theory, News & General
Topic: Asset Allocation At or Near Retirement?
Replies: 51
Views: 4651

Re: One Total Stock Market Index Fund or 3-4 Sub-Funds?

I resolved my own quandary by investing both ways (slice-and-dice and total market) and I keep two completely separate portfolios: currently 60% DFA and 40% VG Total Market (TSM and TISM). The DFA portion is larger because I initially lump-summed into it a long time ago.
by pascalwager
Tue Jul 08, 2014 11:04 am
 
Forum: Investing - Theory, News & General
Topic: One Total Stock Market Index Fund or 3-4 Sub-Funds?
Replies: 19
Views: 3476

Re: "high rate" CDs

This recent article by M* Samuel Lee may answer your questions: http://news.morningstar.com/articlenet/ ... ?id=650538
by pascalwager
Tue Jul 08, 2014 10:33 am
 
Forum: Investing - Theory, News & General
Topic: "high rate" CDs
Replies: 24
Views: 2916

Re: Jonathan Clements WSJ: His index fund portfolio

My entire fixed income is bank checking, bank savings, I-Bonds, and bank CDs (3-year ladder). The savings and CDs are the higher-interest internet bank version. According to M* Samuel Lee, the 2.3% APY 5-year CD is (currently) the best fixed income investment. Better returns than any ST bond fund an...
by pascalwager
Tue Jul 08, 2014 4:47 am
 
Forum: Investing - Theory, News & General
Topic: Jonathan Clements WSJ: His index fund portfolio
Replies: 13
Views: 2989

Re: International exposure: does it really help?

My int'l holdings are based on personal ignorance. I'm unable to predict future country-specific stock market performances, so I hold the entire world stock market.
by pascalwager
Tue Jul 08, 2014 1:05 am
 
Forum: Investing - Theory, News & General
Topic: International exposure: does it really help?
Replies: 75
Views: 7558

Re: Intermediate TIPS fund

You could combine with the ST TIPS Fund to lower the overall weighted duration. Vg uses the ST TIPS Fund in the Target Retirement Income Fund.
by pascalwager
Sat Jul 05, 2014 4:17 pm
 
Forum: Investing - Theory, News & General
Topic: Intermediate TIPS fund
Replies: 22
Views: 2587

Re: Vanguard - Energy Fund

Bill Bernstein considers this fund a good inflation hedge (using a small AA), but doesn't advise buying it at present share price. He covers it in his new book.
by pascalwager
Sat Jul 05, 2014 2:59 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard - Energy Fund
Replies: 31
Views: 3827

Re: Rick Ferri's Emergency Fund

I prefer riskless bonds, so my bonds and cash are almost intermingled: Internet bank HY savings (0.95% APY), I-bonds, various term CDs up to 5-years. But VG ST Bond Index has both term risk and credit risk, and neither are appropriate for cash. Your FDIC-backed Ally account is riskless and a sensibl...
by pascalwager
Fri Jul 04, 2014 9:48 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri's Emergency Fund
Replies: 28
Views: 6321

Re: The Risk of Short-term Bond Funds

Like others have pointed out, this study confuses strategy with outcome and should be of no interest to any serious investor, even if you do prefer to take term- and credit-risk.
by pascalwager
Fri Jul 04, 2014 6:06 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10448

Re: HY Savings, CDs, I-bonds, TIPS, Treasury Fund

I would probably never invest in TBM (don't like corporates, MBS or term risk). I only have 13% "bonds" including I-Bonds, HY savings, and a CD ladder. I may also add some ST Treasury Fund and some munis. I considered adding a treasury ladder as per Bernstein, but was sorely intimidated by...
by pascalwager
Fri Jun 27, 2014 3:22 am
 
Forum: Investing - Theory, News & General
Topic: HY Savings, CDs, I-bonds, TIPS, Treasury Fund
Replies: 16
Views: 2529

Re: GE Capital Retail Bank 5-Year 2.3% CD

Informative discussion!

In his new book, Bill recommends a 5-year treasury ladder with an average maturity of about 2.5 years.
by pascalwager
Tue Jun 24, 2014 7:36 pm
 
Forum: Investing - Theory, News & General
Topic: GE Capital Retail Bank 5-Year 2.3% CD
Replies: 75
Views: 7830

Re: GE Capital Retail Bank 5-Year 2.3% CD

Kevin, thanks for the info. I guess I missed that part by Bill B. in his new book.

Is it reasonable to use this CD in taxable in a state-tax state?
by pascalwager
Tue Jun 24, 2014 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: GE Capital Retail Bank 5-Year 2.3% CD
Replies: 75
Views: 7830

Re: GE Capital Retail Bank 5-Year 2.3% CD

I referred to the ladder as that was Bill Bernstein's recommendation for using CDs, but Samuel Lee didn't mention a ladder either. The Snychrony CD rate table shows that the 2.30% APY starts at $25k, so I guess using four (4) $25k CDs would be preferable to buying a single $100k CD. Then you might n...
by pascalwager
Tue Jun 24, 2014 12:53 am
 
Forum: Investing - Theory, News & General
Topic: GE Capital Retail Bank 5-Year 2.3% CD
Replies: 75
Views: 7830

Re: Thoughts on adding Vanguard Precious Metals and Mining F

W. Bernstein recommends a gold mining fund as an inflation hedge, but not the Vanguard PM fund as it is diluted with base metal mining. Base metal mining can also work as an inflation hedge, but needs to be separated from gold mining for purchasing (market timing). He recommends the Van Eck Market V...
by pascalwager
Mon Jun 23, 2014 3:02 am
 
Forum: Investing - Theory, News & General
Topic: Thoughts on adding Vanguard Precious Metals and Mining Fund
Replies: 44
Views: 8563

Re: GE Capital Retail Bank 5-Year 2.3% CD

M* (Samuel Lee) did a piece on the Synchrony 5-year CD recently. He concluded that it's presently "the best fixed-income investment". I may include it in a 5-year CD ladder.
by pascalwager
Mon Jun 23, 2014 2:50 am
 
Forum: Investing - Theory, News & General
Topic: GE Capital Retail Bank 5-Year 2.3% CD
Replies: 75
Views: 7830

Re: Bloomberg article on 401(k) rollover scam

Upon retirement, I immediately rolled over a 457 plan to Vanguard Rollover IRA. Was paying 35 basis points for S&P 500 fund; now paying 5 basis points for TSM. Was paying 50 basis points for EAFE index fund; now paying 14 basis points for TISM. I did like the 457 plan automatic rebalancing, whic...
by pascalwager
Wed Jun 18, 2014 3:52 am
 
Forum: Investing - Theory, News & General
Topic: Bloomberg article on 401(k) rollover scam
Replies: 10
Views: 1282

Re: Do REITs (and slicing in general) reduce risk?

In his new book, W. Bernstein considers REITs an inflation hedge, but doesn't recommend their purchase at high current price.
by pascalwager
Fri Jun 13, 2014 1:12 am
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3620

Re: Which Vanguard Short Treasury Fund

by abuss368 » Thu Jun 12, 2014 4:36 pm
pascalwager wrote:
In his new book, W. Bernstein recommends avoiding all ETF bond funds. I recall Rick Ferri saying the same in the past.

Why? Higher expenses and the bid/ask spread?


Wide bid/ask spread and arbitrage doesn't work for bond etf's.
by pascalwager
Thu Jun 12, 2014 8:07 pm
 
Forum: Investing - Theory, News & General
Topic: Which Vanguard Short Treasury Fund
Replies: 34
Views: 2109

Re: Excluding Soc. Sec. from AA means over invested in bonds

Some investors prefer a grammatical trick: SS/pension isn't a bond, but can be included in "Bonds", a more-inclusive classification. Charles Ellis even recommends that younger investors include salary as part of their "Bonds", allowing a lower allocation for bonds. My "Bonds...
by pascalwager
Thu Jun 12, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: Excluding Soc. Sec. from AA means over invested in bonds?
Replies: 11
Views: 1180

Re: Which Vanguard Short Treasury Fund

In his new book, W. Bernstein recommends avoiding all ETF bond funds. I recall Rick Ferri saying the same in the past.
by pascalwager
Thu Jun 12, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Which Vanguard Short Treasury Fund
Replies: 34
Views: 2109
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