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Re: Making sense of my whole life insurance statement number

If you have 1000 dollars in your bank account and then you deposit 499 dollars and you get 1 dollar of interest, your balance becomes 1500 dollars. Did you get 50% return then?
by patrick
Fri Jan 30, 2015 6:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Making sense of my whole life insurance statement numbers
Replies: 7
Views: 491

Re: [EU] Considerations for not buying US domiciled ETFs? FA

I don't think FATCA specifically should be a problem for you. As with most European countries, the Dutch government has made an FATCA "intergovermental agreement" with the US government (see for instance http://www.pwc.com/us/en/financial-services/publications/fatca-publications/netherland...
by patrick
Wed Jan 28, 2015 7:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: [EU] Considerations for not buying US domiciled ETFs? FATCA?
Replies: 3
Views: 317

Re: data mining vs. historical performance

Would "data mining" or the question of "yes, but can history repeat itself" even have been mentioned had the portfolio not contained a position in gold? Yes, definitely. If you had used any other asset with the same combination of very high returns in the last 42 years and low r...
by patrick
Tue Jan 27, 2015 7:44 pm
 
Forum: Investing - Theory, News & General
Topic: data mining vs. historical performance
Replies: 39
Views: 1582

Re: Google Chrome: is this a mega security problem?

Yes, absolutely. For the regular PC you have to also keep the system patched, and the non -trojan video viewers (and PDF viewers, let's not forget those) patched, and they have to have good security on their own servers, and, and, and. It's a battle the non-sophisticated user has been losing for mo...
by patrick
Wed Jan 21, 2015 1:46 am
 
Forum: Personal Consumer Issues
Topic: Google Chrome: is this a mega security problem?
Replies: 111
Views: 6582

Re: Should I enroll in this 457 plan?

I believe that rollovers are not permitted for a 457(b), unless it's to another 457(b) So, make sure you spend the funds in this expensive 457(b) first, when retiring. From what I've read on http://www.bogleheads.org/wiki/457(b) and elsewhere it looks like you can roll out of the 457 if it is a gov...
by patrick
Tue Jan 20, 2015 10:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I enroll in this 457 plan?
Replies: 15
Views: 926

Re: Google Chrome: is this a mega security problem?

My point was that the cloud-based machine is internally simpler and (perhaps most importantly) doesn't see many apps installed. So many avenues of attack into your computer have closed, in exchange for the server-side avenue being open. Again, a pretty good tradeoff for most people. If the computer...
by patrick
Tue Jan 20, 2015 10:45 pm
 
Forum: Personal Consumer Issues
Topic: Google Chrome: is this a mega security problem?
Replies: 111
Views: 6582

Re: Google Chrome: is this a mega security problem?

A big mitigating factor is that these are not random pieces of software, but they have to be approved extensions from the Chrome web store. Google is known to watch over those, remove malware and analyze them on an ongoing basis with automated detection -- a bit like a pro-active antivirus which do...
by patrick
Tue Jan 20, 2015 6:35 pm
 
Forum: Personal Consumer Issues
Topic: Google Chrome: is this a mega security problem?
Replies: 111
Views: 6582

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

We can look at various risk premia based on historical data, such as small cap, value, etc. and establish their validity by doing out of sample tests. Moreover, we have reasonable confidence that stocks have a higher ERP than bonds using the same methodology. But in all of these cases, we have obse...
by patrick
Sun Jan 18, 2015 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why invest in International funds? It's a mystery
Replies: 121
Views: 10521

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

Another confirmation bias arises from the crowd that firmly believes in American exceptionalism, that the US "system" is simply better than anywhere else in the world and will continue to be so well into the future. If that's the premise someone is operating under, I think it would be ext...
by patrick
Sun Jan 18, 2015 3:14 pm
 
Forum: Investing - Theory, News & General
Topic: Why invest in International funds? It's a mystery
Replies: 121
Views: 10521

Re: Does strategy even matter?

It might help to make a distinction between things that don't matter and things we don't know. Some of the details discussed here indeed will not matter much. On the other hand, US versus non-US stocks is something we don't know. There is a good chance that the performance of US stocks over the next...
by patrick
Sat Jan 17, 2015 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: Does strategy even matter?
Replies: 12
Views: 1694

Re: Why is it wrong to think individual bonds are safer vs f

A bond fund is composed of individual bonds, and will only lose money if the individual bonds within it lose money. If you actually did construct a portfolio of individual bonds that matched all of your future spending exactly, then (ignoring defaults) there might well be no risk in the sense you ca...
by patrick
Fri Jan 09, 2015 7:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why is it wrong to think individual bonds are safer vs funds
Replies: 30
Views: 1985

Re: Busting the "myth" of the small cap / size premium ?

All indexes have the survivor bias problem. Do you really think the S&P 500 should continue to list Enron, Washington Mutual, and Worldcomm to account for big companies going bad? I think this is a bit of a red herring. Most of the losses from such companies are in fact included in standard ind...
by patrick
Wed Jan 07, 2015 9:59 pm
 
Forum: Investing - Theory, News & General
Topic: Busting the "myth" of the small cap / size premium ?
Replies: 14
Views: 1743

Re: Immediate payable annuity is a bad investment?

...and immediate annuities are not indexed for inflation... Yes, you are correctly relaying the statement of the author, David Marotta, A fixed annuity has a preset withdrawal amount that does not adjust for inflation That sort of thing drives me me crazy . No, immediate annuities are not adjusted ...
by patrick
Fri Jan 02, 2015 6:43 pm
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 61
Views: 4685

Re: Immediate payable annuity is a bad investment?

The concept of an annuity is a good one. The point of the Forbes’ article is that SPIA product currently offered is not very good. I like insurance if it is properly priced and covers an event that has a decent percentage of taking place. The odds of a fire completely burning down a house are small...
by patrick
Fri Jan 02, 2015 6:32 pm
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 61
Views: 4685

Re: Should I even be in bonds?

Well, that's helpful information for people who have 200 years until retirement. Why show a chart that goes back to 1802? It's not as if the investment markets and instruments of the 19th century were directly comparable to what we have now, let alone the regulatory environment. I smell cherry-pick...
by patrick
Fri Jan 02, 2015 6:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I even be in bonds?
Replies: 40
Views: 3667

Re: International - good for diversification, bad for return

Ouch, what an answer: - "17 years is short term". 17 years is a long time, and about half the productive saving years for most people. For people who are in fields requiring long education (doctors, lawyers, PhDs), 17 years could be the entire life of the saving years, Perhaps for a lawye...
by patrick
Thu Jan 01, 2015 6:22 pm
 
Forum: Investing - Theory, News & General
Topic: International - good for diversification, bad for returns?
Replies: 43
Views: 4875

Re: Do commodities provide a real return?

I would suggest it depends on the commodity. For consumables like oil or copper, then "investing" in them would be no different than investing in, say, light bulbs. For something like gold that is mainly just held by investors and has a relatively fixed supply, you could argue that it's a...
by patrick
Wed Dec 31, 2014 10:33 pm
 
Forum: Investing - Theory, News & General
Topic: Do commodities provide a real return?
Replies: 25
Views: 1010

Re: Predicting Long Term Returns After Costs In Taxable

7% return before costs is probably too high an estimate. From https://publications.credit-suisse.com/tasks/render/file/?fileID=0E0A3525-EA60-2750-71CE20B5D14A7818 the average real return of global stocks since 1900 has been only 5.2% per year. There may be reason to expect below average returns in t...
by patrick
Wed Dec 31, 2014 10:17 pm
 
Forum: Investing - Theory, News & General
Topic: Predicting Long Term Returns After Costs In Taxable
Replies: 6
Views: 641

Re: Paul Merriman takes John Bogles $5.00 Bet!

No, he isn't. The data you look at in order to come up with an hypothesis to test doesn't count as evidence for the hypothesis. Only the data you obtain after you formulate the hypothesis accounts. In investing, nobody seems to let their hypotheses stand still for long enough to test them. The cloc...
by patrick
Wed Dec 31, 2014 10:04 pm
 
Forum: Investing - Theory, News & General
Topic: Paul Merriman takes John Bogles $5.00 Bet!
Replies: 61
Views: 7576

Re: International - good for diversification, bad for return

17 years is surely too short a period to look at. However, the US outperformance seems to have lasted much longer than that. The Credit Suisse Yearbook at https://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=88F22B53-83E8-EB92-9D555B7A27900DAC shows global stock returns from 190...
by patrick
Wed Dec 31, 2014 6:43 pm
 
Forum: Investing - Theory, News & General
Topic: International - good for diversification, bad for returns?
Replies: 43
Views: 4875

Re: Bond SEC yield, credit rating

A lower price (i.e. a higher yield) would indicate that the market judges the bond to be of higher risk. The market's judgment usually resembles that of the rating agencies but not always.
by patrick
Mon Dec 29, 2014 9:36 pm
 
Forum: Investing - Theory, News & General
Topic: Bond SEC yield, credit rating
Replies: 10
Views: 609

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

Value can mean several different things. Academic studies on the value premium, as well as DFA value funds, focus on having a low price to book ratio as the definition of value. Morningstar's style charts, EFV, and SFNNX, use broader definitions that measure value using a combination of price to boo...
by patrick
Sun Dec 28, 2014 6:04 pm
 
Forum: Investing - Theory, News & General
Topic: Int'l Value vs Int'l Small Caps?
Replies: 32
Views: 3991

Re: Protecting your Windows system from malware

In 2014, Cryptolocker infected over thousands of well-protected PCs. Any bleeding edge new virus will meet that criteria, meaning new enough that the patch has not yet been released. There are quite a few browser zero-day exploits revealed every year at security conferences that by definition (zero...
by patrick
Sat Dec 27, 2014 3:30 pm
 
Forum: Personal Consumer Issues
Topic: Protecting your Windows system from malware
Replies: 44
Views: 5176

Re: An ETF on a futures contract? Can someone explain this t

Even normal ETFs require exemptive relief because they dont allow redeeming individual shares at NAV. The really troublesome products are ETNs. An ETN is really a debt security. The difference from a normal bond is that the iissuer promises to pay the index minus fees instead of a fixed amount. An E...
by patrick
Sat Dec 27, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: An ETF on a futures contract? Can someone explain this to me
Replies: 41
Views: 2079

Re: An ETF on a futures contract? Can someone explain this t

My understanding is that if you buy USO that your risk is limited to the purchase price, whereas if you bought the futures contract yourself your risk of loss would be much higher. This seems be closer to the individual buying an option rather than a future contract, even though USO is buying the f...
by patrick
Sat Dec 27, 2014 1:32 am
 
Forum: Investing - Theory, News & General
Topic: An ETF on a futures contract? Can someone explain this to me
Replies: 41
Views: 2079

Re: Protecting your Windows system from malware

The same site has an update article published last year that indicates fairly similar results:

https://www.csis.dk/en/csis/news/3981/
by patrick
Sat Dec 27, 2014 12:37 am
 
Forum: Personal Consumer Issues
Topic: Protecting your Windows system from malware
Replies: 44
Views: 5176

Re: Protecting your Windows system from malware

VictoriaF wrote:The linked article is dated 2011-09-27. Many new exploits have been invented since then.

Victoria


If you follow that article's advices you will install the new updates released since then which will stop the new exploits.
by patrick
Fri Dec 26, 2014 6:47 pm
 
Forum: Personal Consumer Issues
Topic: Protecting your Windows system from malware
Replies: 44
Views: 5176

Re: Do you have or recommend a Financial Only PC?

It doesn't need to exploit flash or a browser. It's downloading programs and running them. If the updater is hosed the updatee is hosed. That would mean not only taking over the server that sends out the updates, but also stealing the key needed to sign them. That is rather scary indeed. But on the...
by patrick
Tue Dec 23, 2014 12:06 am
 
Forum: Personal Consumer Issues
Topic: Do you have or recommend a Financial Only PC?
Replies: 84
Views: 7328

Re: Do you have or recommend a Financial Only PC?

You're also going to have to access a bunch of sites to update software, maybe Microsoft, Mozilla or Google, your BIOS vendor, your anti-virus vendor. I've seen paranoid lists with about 20 "must" dos. Accessing these safely is not trivial. Windows, Firefox, Chrome, and most anti-virus so...
by patrick
Mon Dec 22, 2014 10:42 pm
 
Forum: Personal Consumer Issues
Topic: Do you have or recommend a Financial Only PC?
Replies: 84
Views: 7328

Re: Do you have or recommend a Financial Only PC?

Just connecting to the web can get you compromised. Estimates of the time to owned for an unpatched XP machine are as short as 4 minutes, that's without the user doing anything. Newer software may be better but there's no guarantee there are no similar holes. Actually I'll guarantee there are simil...
by patrick
Mon Dec 22, 2014 9:48 pm
 
Forum: Personal Consumer Issues
Topic: Do you have or recommend a Financial Only PC?
Replies: 84
Views: 7328

Re: Do you have or recommend a Financial Only PC?

This advice stems from the fact that browsers and PCs, even ones with anti-virus, anti-malware, and up-to-date patches, can fall prey to malware. Even if you are cautious with your browsing habits, legitimate websites can and have been compromised in the past. The most notorious was the Zeus trojan...
by patrick
Mon Dec 22, 2014 8:28 pm
 
Forum: Personal Consumer Issues
Topic: Do you have or recommend a Financial Only PC?
Replies: 84
Views: 7328

Re: Bond Fund vs CDs - which to use?

I don't want to get into an argument about SEC yield and effective returns at duration (instead of returns at maturity). This won't help our new member. Why not? Of course, the yields aren't the only thing to consider. There are also more subtle matters regarding the yield curve, the level of risk ...
by patrick
Fri Dec 19, 2014 9:06 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund vs CDs - which to use?
Replies: 59
Views: 5833

Re: Bond Fund vs CDs - which to use?

Choosing one or the other based not on need (FDIC protection, liquidity, etc.) but on metrics (SEC yield, interest rates) is factually a form of market timing (tactical fixed income allocation). The last few years have proved that choosing the right product (bond fund or CD) based on these metrics ...
by patrick
Fri Dec 19, 2014 6:52 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund vs CDs - which to use?
Replies: 59
Views: 5833

Re: What desktop should I buy.

And nothing will really last 10 years (unless you install a lightweight linux distro on it). If you try to make it 10 years with a Windows or Mac OS (without timing it perfectly) you are either going to get left behind and no longer receive security updates (windows 8.1 end of life is 8 years from ...
by patrick
Wed Dec 17, 2014 10:20 pm
 
Forum: Personal Consumer Issues
Topic: What desktop should I buy.
Replies: 36
Views: 2717

Re: "Gold to tank in 2014: Goldman Sachs"

The current price of $1196 is shockingly close to the average prediction of $1209 ... of course there are still 15 days left in which anything can happen.
by patrick
Tue Dec 16, 2014 11:28 pm
 
Forum: Investing - Theory, News & General
Topic: "Gold to tank in 2014: Goldman Sachs"
Replies: 112
Views: 10763

Re: Bitcoin: The worst investment in 2014

2014 isn't over yet. But so far there are other investments (and not just single stocks) that have done worse. Take a look at this YTD result: -61% UGAZ VelocityShares 3x Long Natural Gas ETN And here is something else not that much better than Bitcoin, and so might end up worse when the year actual...
by patrick
Tue Dec 16, 2014 8:21 pm
 
Forum: Investing - Theory, News & General
Topic: Bitcoin: The worst investment in 2014
Replies: 17
Views: 2270

Re: Does it make sense for me to buy EE Bonds?

Compare that with the 20 year treasury bond which now yields all of 2.45 percent! If you can hold the EE bond 20 years and thus get the 3.53 percent annual return, plus the tax deferral, the EE bond seems like a very good deal these days.
by patrick
Mon Dec 15, 2014 6:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does it make sense for me to buy EE Bonds?
Replies: 6
Views: 794

Re: I'm an Irrational Bond Chicken Little

The worst loss that is possible is quite high indeed. If you held German bonds in the early 1920s, then your loss (rounded to the nearest whole number percent) was 100 percent. Since it's happened before (even though in a foreign country) I presume it is at least possible to happen again. Of course ...
by patrick
Sun Dec 14, 2014 11:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: I'm an Irrational Bond Chicken Little
Replies: 32
Views: 2997

Re: Does 80/20 have more risk or volatility than 60/40?

80/20 definitely has more volatility than 60/40. In general more stocks means more volatility except at the very low end, for instance 5/95 is less volatile than 0/100. If you define risk as volatility then 80/20 is riskier too. If you look at US history stocks seem to be safe if held a very long ti...
by patrick
Sat Dec 13, 2014 1:46 pm
 
Forum: Investing - Theory, News & General
Topic: Does 80/20 have more risk or volatility than 60/40?
Replies: 25
Views: 2734

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

I disagree that there ever was a consensus against long term bonds in general. There may have been something close to a consensus against long term corporate bonds but that was based on the idea that they aren't compensated for the extra default risk. I don't fully agree with that either -- historic...
by patrick
Thu Dec 11, 2014 11:25 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Boglehead Consensus on Long Bonds still Negative?
Replies: 29
Views: 3423

Re: (Poll) Did you tap into emergency fund in the past 10 ye

I'ts hard to say since it depends on the definition, but in my case the answer is probably no. If an emergency fund is something that is set asset for emergencies only, then unless every expenditure is defined as an emergency and therefore all savings are the emergency fund, I don't have an emergenc...
by patrick
Thu Dec 11, 2014 11:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: (Poll) Did you tap into emergency fund in the past 10 years?
Replies: 64
Views: 5772

Re: 'Might Vanguard Founder Jack Bogle Be Wrong for a Change

Here's where he first defines it: http://pragcap.com/is-the-global-financial-asset-portfolio-the-perfect-indexing-strategy So, there is a paper written in early 2014 that may not even have been published yes--it says "forthcoming"-- From my brief glance at the page, the "GFAP" s...
by patrick
Thu Dec 11, 2014 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: 'Might Jack Bogle Be Wrong for a Change?' [Int'l holdings]
Replies: 49
Views: 4326

Re: 'Might Jack Bogle Be Wrong for a Change?' [Int'l holding

My view is that this is a manufactured controversy to get headlines, and it is working. Jack Bogle's views on international are not that ironic if you consider how interconnected the world economy is. Even if you have a nominally 100% US portfolio, in reality, because so many companies in that port...
by patrick
Thu Dec 11, 2014 8:11 pm
 
Forum: Investing - Theory, News & General
Topic: 'Might Jack Bogle Be Wrong for a Change?' [Int'l holdings]
Replies: 49
Views: 4326

Re: 'Might Jack Bogle Be Wrong for a Change?' [Int'l holding

These are annualized returns for the last 15 years (longest period on Morningstar's website): 5.26% -- Vanguard Total U.S. Stock Market Index Fund (VTSMX) 3.84% -- Vanguard Total International Stock Market Index Fund (VGTSX) Mr. Bogle is seldom wrong. :sharebeer Best wishes. Taylor Meanwhile, here ...
by patrick
Thu Dec 11, 2014 8:02 pm
 
Forum: Investing - Theory, News & General
Topic: 'Might Jack Bogle Be Wrong for a Change?' [Int'l holdings]
Replies: 49
Views: 4326

Re: Commission fees and monthly contributioins

I think you could use Fidelity's own real estate index fund if you've decided that you should include a REIT index in your portfolio.

https://fundresearch.fidelity.com/mutua ... /316146240
by patrick
Tue Dec 09, 2014 6:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: My investment choices
Replies: 8
Views: 273

Re: A less common risk to emerging markets value tilting

Unfortunately employer plans adjust the lineup to chase performance quite often and in just about every asset class. This risk isn't limited to emerging markets value. It's not even limited to equities.
by patrick
Sun Dec 07, 2014 11:22 pm
 
Forum: Investing - Theory, News & General
Topic: A less common risk to emerging markets value tilting
Replies: 32
Views: 2232

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

I fall in that camp that would say that if TIPS make sense for an investor because that investor wants to avoid [unexpected] inflation risk, at least in the fixed income holdings, then it makes sense to be only TIPS. Regular ol' bonds and bond funds that hold them are priced to avoid inflation risk...
by patrick
Tue Dec 02, 2014 8:13 pm
 
Forum: Investing - Theory, News & General
Topic: What % of your fixed-income is TIPs?
Replies: 71
Views: 3626

Re: Oil / Energy ETFs

Point #1: When the USO and OIL ETNs were introduced, the press gushed over the wonders of these innovative new products that for the first time gave retail investors access to those investments. Those investors rubbed their hands with glee as oil prices rose until they noticed that their shares of ...
by patrick
Sun Nov 30, 2014 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: Oil / Energy ETFs
Replies: 58
Views: 4486

Re: Buying a Computer. Need recommendations.

There are other options out there to a Chromebook. Have you seen the new HP Stream laptops? They come in 11 inch and 13 inch screen sizes and seem to be the Windows equivalent of the Chromebook. (ie: Windows 8.1 OS, 32GB HDD, etc). Prices are $199 and $219 respectively. With the black Friday deals ...
by patrick
Fri Nov 28, 2014 11:18 pm
 
Forum: Personal Consumer Issues
Topic: Buying a Computer. Need recommendations.
Replies: 52
Views: 5199

Re: non US bonds - a new asset class?

One aspect I have never liked is the index has the largest weighting to the country with the most debt. Equity funds have the highest weighting to the most valuable companies! That's an interesting statement, but I believe the index represents a weighting of what bonds are on the market. Buyers det...
by patrick
Wed Nov 26, 2014 11:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: non US bonds - a new asset class?
Replies: 11
Views: 849
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