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Re: 22 Schwab OneSource ETF used in Intelligent Portfolios

I'd prefer to have my cash in an online bank at 1% APY.
by pascalwager
Mon Mar 02, 2015 3:41 pm
 
Forum: Investing - Theory, News & General
Topic: 22 Schwab OneSource ETF used in Intelligent Portfolios
Replies: 25
Views: 2782

Re: International increase in Target Retirement & LifeStrate

Post by abuss368 » Fri Feb 27, 2015 12:41 am I wrote this exact post a year or two ago that 40% was right around the corner. It was obvious. No surprise here. Next is 50% US & 50% International. Good call abuss, I immediately recalled your post when I found out about the changes. Many of us rec...
by pascalwager
Sun Mar 01, 2015 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 121
Views: 8199

Re: Best Use of TIPS Fund in Retirement

The problem with a TIPS fund for a retiree is liquidity risk showing up during a financial crisis. That's why Bill Bernstein recommends a TIPS ladder.
by pascalwager
Sun Feb 22, 2015 1:19 am
 
Forum: Investing - Theory, News & General
Topic: Best Use of TIPS Fund in Retirement
Replies: 17
Views: 1582

Re: Why don't I see more people arguing for a world portfoli

A world portfolio weighting doesn't consider currency risk and fund management foreign trading costs. Also, ideally, the individual foreign countries should be weighted not on relative capitalization, but also consider foreign investor risks and taxation. The current world portfolio of 50/50 US/int'...
by pascalwager
Fri Feb 20, 2015 9:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why don't I see more people arguing for a world portfolio?
Replies: 41
Views: 2820

Re: Financial Advisor, worth it? - McAdam

An advisor isn't necessary if you can read the Wiki.
by pascalwager
Fri Feb 20, 2015 9:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Financial Advisor, worth it? - McAdam
Replies: 26
Views: 1932

Re: Beyond the Total Int'l Stock Index

TISM is the default portfolio, but not ideal. It's main virtue is diversification. A better portfolio would weight the individual countries based on foreign investor treatment: taxation, risk of appropriation, degree of home bias, etc. Also, different portfolios for taxable and non-taxable investors...
by pascalwager
Fri Feb 20, 2015 9:22 pm
 
Forum: Investing - Theory, News & General
Topic: Beyond the Total Int'l Stock Index
Replies: 4
Views: 881

Re: Long term bonds in VBTLX/VBMFX

If long-term bonds are a rising proportion of the TBM fund, then this may be due to more investors stretching for yield (and effecting the Barclays TBM index) by buying long-term bonds. So the increasing duration of TBM may be a result of poor investor behavior and TBM investors become a captive of ...
by pascalwager
Mon Feb 16, 2015 6:42 pm
 
Forum: Investing - Theory, News & General
Topic: Long term bonds in VBTLX/VBMFX
Replies: 12
Views: 801

Re: CWB verses BND

Larry Swedroe advises against holding convertible bonds in his book Winning Bond Strategy (page 140).
by pascalwager
Sun Feb 15, 2015 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: CWB verses BND [Barclays Convertible Securities ETF]
Replies: 6
Views: 456

Re: Social Security as a bond?

What I find deeply troubling is the idea that thinking of Social Security as a bond justifies a change in recommended stock allocation for retirees. If Social Security were some new innovation of the 1990s, then yes, its introduction would justify a change in recommended stock allocation. Mr. Bogle...
by pascalwager
Fri Feb 13, 2015 3:24 am
 
Forum: Investing - Theory, News & General
Topic: Social Security as a bond?
Replies: 47
Views: 3177

Re: Vanguard Ultra-Short-Term Bond Fund now available

For comparison, the DFA ultra-short bond fund (DFIHX), duration = 0.93 years, has an SEC yield = 0.33%. VMMXX ($137 billion assets) is still purchased at yield = 0.01%, so Vanguard may believe that another group might invest in a riskier ultra-short fund to get even more yield! Personally, I'll prob...
by pascalwager
Wed Feb 11, 2015 3:10 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund now available
Replies: 35
Views: 3931

Re: When 60/40 just isn't appropriate

I can't find the quote right now but Harry Markowitz is on record somewhere as saying that he "ought" to calculate the "covariances" and derive the efficient frontier but that he doesn't, but just puts half of his portfolio in stocks and half in bonds. I've seen this quote too. ...
by pascalwager
Mon Feb 09, 2015 4:19 pm
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13069

Re: When 60/40 just isn't appropriate

Bernstein makes a credible case for owning bonds, but not for any particular percentage allocation, including 40%.
by pascalwager
Sun Feb 08, 2015 1:44 am
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13069

Re: FI: Total Bond Market or Intermediate Fund?

This is my retiree low risk bucket:

    IT Treasury bond fund
    3-year CD ladder
    I Bonds
    HY Savings
My first priority is to annually buy an I Bond.
by pascalwager
Sun Feb 08, 2015 1:34 am
 
Forum: Investing - Theory, News & General
Topic: FI: Total Bond Market or Intermediate Fund?
Replies: 19
Views: 2554

Re: Vanguard Total Bond - Not reccomended by Swedroe??

"Don't invest in something you don't understand."

I certainly don't understand MBS securities, and that's a basic investment reason for me to avoid TBM. Rick van Ness, who also avoids TBM, says the same thing in Why Bother with Bonds?
by pascalwager
Sat Feb 07, 2015 3:02 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Total Bond - Not reccomended by Swedroe??
Replies: 23
Views: 3767

Re: Why Do People Invest in Certain VG Funds?

By definition , the market is neutral with respect to growth/value. The average investor should use a total market approach (Eugene Fama, John Cochrane) and the small cap premium seems to be minimal at best; but you still need some small caps for diversification. If you're not average, if you're a ...
by pascalwager
Thu Feb 05, 2015 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Why Do People Invest in Certain VG Funds?
Replies: 15
Views: 2270

Re: Buy High, Sell Low : Avoid Market Timing

For every investor who follows a value approach, there must be an investor who follows a growth strategy or buys high and sells low because he is exposed to the value risk at work or otherwise averse to the value risk (John Cochrane).
by pascalwager
Mon Feb 02, 2015 1:33 am
 
Forum: Investing - Theory, News & General
Topic: Buy High, Sell Low : Avoid Market Timing
Replies: 32
Views: 3215

Re: Is this the "new cash"?

The MM background info was interesting. I'd had no idea.
by pascalwager
Sat Jan 31, 2015 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: Is this the "new cash"?
Replies: 15
Views: 2591

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: 79
Views: 4341

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: 2056

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: 2056

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: 2056

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: 1484

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: 2056

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: 27
Views: 4552

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: 7637

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: 10725

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: 10725

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: 10725

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: 516

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: 2711

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: 2711

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: 293
Views: 35239

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: 293
Views: 35239

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: 2649

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: 3301

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: 2981

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: 2981

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: 2981

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: 3168

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: 2981

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: 68
Views: 8737

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: 1894

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: 1512

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: 3301

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: 293
Views: 35239

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: 140
Views: 11986

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: 293
Views: 35239

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: 2586

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: 293
Views: 35239

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: 4067
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