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Re: "What Has Time Taught Bill Bernstein?"

Taylor, thanks for the link, a truly great article. As a engineer, the following really resonated with me. "As many other engineers and scientists have discovered, succeeding at investments isn't entirely the same as succeeding at science. Having a good feel for numbers is a necessary conditio...
by pkcrafter
Fri Jul 25, 2014 8:24 pm
 
Forum: Investing - Theory, News & General
Topic: "What Has Time Taught Bill Bernstein?"
Replies: 19
Views: 3258

Re: One of the simplest rational reasons why some should til

acegolfer wrote: Then who should tilt? Wealthy retired investors (perhaps many BHs). Under the condition you wrote, it's an option because these investors have a lot of financial ability. For most retirees who don't have a lot of ability tilting is probably not a good idea because it's possible to n...
by pkcrafter
Fri Jul 25, 2014 7:34 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 9
Views: 981

Re: Momentum Investing ?

But wait, there's more....and just when you thought you had it figured out. :shock: A Better Three-Factor Model? Since the Fama-French model does not explain the stock price momentum effect, researchers and investors often add momentum as a fourth factor to predict future stock returns. Might some o...
by pkcrafter
Fri Jul 25, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 52
Views: 3706

Re: Bonds beat stocks over the last 15 years

Interesting thread. Can anyone compare dollar cost average (DCA) outcomes of stocks and bonds using the same 15-yr period? My intuition says even if bonds beat stocks with buy and hold, DCA stocks will beat DCA bonds. I'd be interested in doing such an analysis, I'm just not sure how to approach it...
by pkcrafter
Fri Jul 25, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Bonds beat stocks over the last 15 years
Replies: 63
Views: 4291

Re: Rules of thumb that shouldn't be

Rules of thumb are really just "titles" for longer discussions that discuss in detail some subject in investing. As such, there are probably no rules of thumb that should not be. If someone is actually following a rule of thumb without more investigation of why's and wherefore's, then tha...
by pkcrafter
Fri Jul 25, 2014 11:02 am
 
Forum: Investing - Theory, News & General
Topic: Rules of thumb that shouldn't be
Replies: 29
Views: 1792

Re: savings and staying course with investment strategy

Thank you, Robert T. You've said a lot in a few words, which is a refreshing. It brings us back to simple basics. Perhaps you posted this in view of the many recent posts on factor investing. :happy

Paul
by pkcrafter
Fri Jul 25, 2014 10:51 am
 
Forum: Investing - Theory, News & General
Topic: savings and staying course with investment strategy
Replies: 4
Views: 788

Re: Advice proceeding with 100% taxable portfolio.

Valence, part of your problem may be that you don't have an investment policy statement (IPS). http://www.bogleheads.org/wiki/IPS Your reluctance to use the 401k is an indication that you have not made a commitment to save and invest long term with regular contributions. This is an absolute must if ...
by pkcrafter
Thu Jul 24, 2014 10:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice proceeding with 100% taxable portfolio.
Replies: 23
Views: 1238

Re: Momentum Investing ?

Larry wrote: Paul Yes IMO it is mostly a behavioral story, but as Robert pointed out there are risks, especially on short side, and what makes you believe human behavior will change? Larry, I don't believe for one second that investor behavior will change, but following the crowd isn't something I w...
by pkcrafter
Thu Jul 24, 2014 9:34 pm
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 52
Views: 3706

Re: Momentum Investing ?

This paper has been posted before I believe, but I'm posting here for those active in this thread. Fact, Fiction and Momentum Investing http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2435323 With all due respect to Asness and company, I believe momentum is primarily a behavioral story, and I'll ...
by pkcrafter
Thu Jul 24, 2014 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 52
Views: 3706

Re: "What Has Time Taught Bill Bernstein?"

nedsaid: I also liked that he discussed the limitations of a quantitative approach to investing. Numbers are important but they aren't the whole thing with investing, there is a whole lot more. And a whole lot less. :happy What I mean is I believe IF average investors simply follows the basic Bogleh...
by pkcrafter
Thu Jul 24, 2014 7:48 pm
 
Forum: Investing - Theory, News & General
Topic: "What Has Time Taught Bill Bernstein?"
Replies: 19
Views: 3258

Re: Does a 401k plan cost an employer money?

Our three person company costs about $45k per year for compliance testing and reporting plus the employer match. We use Schwab as custodian and they charge no fees for the service. There is an amazing administrative burden with plan docs that weight several pounds and need to be updated periodicall...
by pkcrafter
Thu Jul 24, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: Does a 401k plan cost an employer money?
Replies: 32
Views: 1714

Re: Consumer Staples > Total Index?

Invest0, most of the replies are somewhat negative, so I'll offer a little different view. First, let's separate O'Shaughnessy from consumer staples. Most people in the business have an agenda of promoting and selling, so I would not send much time reading O'Shaughnessy or any other gurus. If we jus...
by pkcrafter
Thu Jul 24, 2014 11:04 am
 
Forum: Investing - Theory, News & General
Topic: Consumer Staples > Total Index?
Replies: 9
Views: 793

Re: Please recommend a low fee index fund with no min. inves

Welcome to the forum :) . Please recommend a low fee index fund with no min. invest. . . . . . My girlfriends and I would like to each save $100/month for the next 5-6 years, . . . . . I'd like to recommend we choose a low cost index mutual fund. . . . . . . I also don't like the idea of an ETF . ....
by pkcrafter
Wed Jul 23, 2014 11:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please recommend a low fee index fund with no min. invest.
Replies: 15
Views: 1216

Re: Need Help and totally confused!!

Welcome Camptalcott, I'm very new to this site and to investing in general. Unfortunately I am forced to learn via "trial by fire" method. You will not have to go through a trial by fire. You can get your basics right here and avoid the fires, and as you will discover, the Bogleheads metho...
by pkcrafter
Wed Jul 23, 2014 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Help and totally confused!!
Replies: 28
Views: 1759

Re: Defining what an expense ratio means for individuals

Vanguard has super-low expense ratios on their index funds because they are a not-for-profit company --the only not-for-profit mutual fund company.[...] Paul I agree with everything else you say but disagree with the above. I could create my own not-for-profit mutual fund company and pay each of my...
by pkcrafter
Wed Jul 23, 2014 9:55 pm
 
Forum: Investing - Theory, News & General
Topic: Defining what an expense ratio means for individuals
Replies: 26
Views: 1400

Re: "What Has Time Taught Bill Bernstein?"

Thank you Taylor, and thank you Bill Bernstein and John Rekenthaler! This an excellent article that should be required reading for all investors. For most people, investing successfully is a deeply unnatural act. Emotions destroy investment performance. Somehow, some way, investors must suppress the...
by pkcrafter
Wed Jul 23, 2014 8:14 pm
 
Forum: Investing - Theory, News & General
Topic: "What Has Time Taught Bill Bernstein?"
Replies: 19
Views: 3258

Re: Defining what an expense ratio means for individuals

Vanguard has super-low expense ratios on their index funds because they are a not-for-profit company--the only not-for-profit mutual fund company. You should also be aware that fund total returns are reported after the expense ratio has been deducted. High costs are a drag on returns as shown by the...
by pkcrafter
Wed Jul 23, 2014 12:48 pm
 
Forum: Investing - Theory, News & General
Topic: Defining what an expense ratio means for individuals
Replies: 26
Views: 1400

Re: A case against Index Funds in India

Nothing new here. The listed arguments against indexing are the same old ones always used by active investors. Having said that, the author claims there is no 500 stock index fund in India. He also says there are "index funds" but no index to track.

Paul
by pkcrafter
Wed Jul 23, 2014 11:00 am
 
Forum: Investing - Theory, News & General
Topic: A case against Index Funds in India
Replies: 32
Views: 1658

Re: Need Portfolio Advice

csc, you have told us what your portfolio value is, but we also need to know your planned initial withdrawal rate.

Paul
by pkcrafter
Mon Jul 21, 2014 11:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Need Portfolio Advice
Replies: 9
Views: 1236

Re: Investment Advisor usage? (vs. 3-fund)

Unrelated to above. But want to double-check something, once an AA is setup, then no matter what happens in the market (e.g. crash), we ought to stick to the AA, right? And re-balance only on the appointed time, and only to the original AA? e.g. If we have a 90/10 stock/bond AA today, and decide to...
by pkcrafter
Sun Jul 20, 2014 11:32 pm
 
Forum: Investing - Theory, News & General
Topic: Investment Advisor usage? (vs. 3-fund)
Replies: 9
Views: 1170

Re: Momentum Investing ?

bs010101, you are right, of course, but some Bogleheads, perhaps the majority, won't chase anything. Furthermore, the opposite of momentum is reversion to the mean.

Paul
by pkcrafter
Sun Jul 20, 2014 11:11 pm
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 52
Views: 3706

Re: Value Overvalued

On page 5 of this report from JP Morgan, it shows Value stocks are overvalued, and Growth stocks are undervalued compare to their 20 years averages. https://www.jpmorganfunds.com/blobcontentheader/202/900/1158474868049_jp-littlebook.pdf Just want to point that out. This reminds me of a quote from W...
by pkcrafter
Sun Jul 20, 2014 9:44 pm
 
Forum: Investing - Theory, News & General
Topic: Value Overvalued
Replies: 23
Views: 2213

Re: Momentum Investing ?

I guess Mo can go both ways. I can't help thinking momentum is created by performance chasers, and you know what we think of them. I don't know if playing the behavioral game is worth anything as JP Morgan's Thaler/Kahaneman's behavioral small cap growth fund, which carried a load and an ER of 1.47%...
by pkcrafter
Sun Jul 20, 2014 9:37 pm
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 52
Views: 3706

Re: years of investing and balances

Don't presume everyone here is a millionaire. :moneybag

You still have time to reach your goal if you work at it. Maxing retirement investments is the key.

Paul
by pkcrafter
Sun Jul 20, 2014 8:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: years of investing and balances
Replies: 23
Views: 1928

Re: Am I "Locked In" For Payments With This Bond Fund?

When a bond price falls due to interest rate increases, the existing bonds in the fund continue to pay the same payout. You will actually see an increase in the yield, but same dollar amount. This happens because new bonds will have higher yields and your bonds must drop in price to make them attrac...
by pkcrafter
Sun Jul 20, 2014 6:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Am I "Locked In" For Payments With This Bond Fund?
Replies: 11
Views: 1073

Re: Can I retire early?

Green light, Rikki. Your starting withdrawal rate would be 2.5%, which opens up your options. I see you are not new, but if you have not checked out The White Coat Investor's website, be sure to do that. You might also investigate life-cycle finance. http://whitecoatinvestor.com/new-to-the-blog-star...
by pkcrafter
Sun Jul 20, 2014 3:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Can I retire early?
Replies: 28
Views: 3863

Re: Thoughts of a long-term investor

Naikansha, thanks for the link, it is a good article worth the read, especially on pg 2: Investment Lessons Learned: Mistakes Made Over 47 Years

It would be most beneficial if you edited your original post and fixed the link.

Thanks,

Paul
by pkcrafter
Sun Jul 20, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: Thoughts of a long-term investor
Replies: 7
Views: 982

Re: Faber: S&P 500 an Active Fund in Drag

The irony is active funds that match the S&P500 are called closet index funds and they are criticized because they can't match performance due to costs. Ah, poo, sour grapes and performance envy.

Paul
by pkcrafter
Sun Jul 20, 2014 9:14 am
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 45
Views: 3496

Re: I was tempted to market time and didn't

Should I act or not act (by throwing some additional moneys into the market...maybe with a small play money account) on such impulses in the future?

In a word, NO.
by pkcrafter
Sun Jul 20, 2014 12:29 am
 
Forum: Investing - Theory, News & General
Topic: I was tempted to market time and didn't
Replies: 19
Views: 1808

Re: Tobins Q as market valuation metric

I'm wondering what your actual asset allocation is, Arthur.

Paul
by pkcrafter
Sat Jul 19, 2014 2:03 pm
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2046

Re: Variable annuity ,what's the difference ?

Can I use this and draw on my funds at retirement If you are referring to your wife's 403b, you can't do anything with it. It says that I can't open a traditional IRA if my job provides one and take the tax deduction It may depend, but generally, this is incorrect. What do mean by "it"? P...
by pkcrafter
Sat Jul 19, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: Variable annuity ,what's the difference ?
Replies: 14
Views: 1823

Re: Market Timing vs. Market Opportunity

Thank you all for your input. I realize now that asking a market timing question on this board is akin to preaching atheism in a Baptist church. Yes, that's right--and here's why--we didn't want to have to do this, but now we have to have an intervention and throw the book at you... :wink: Original...
by pkcrafter
Sat Jul 19, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: Market Timing vs. Market Opportunity
Replies: 46
Views: 2898

Re: Tobins Q as market valuation metric

Arthur wrote: I am not using emotion, I am using the market valuation metric generated by the Nobel Laureate, seems reasonable to me, but definitely staying within my bands, correlation can go together or can zig zag, no rationale there... I do play a little but only within my rebalancing bands, it ...
by pkcrafter
Sat Jul 19, 2014 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2046

Re: Roth IRA income limit question

6% Ginnie Mae fund (1.05% ER)
6% TIPS fund (1.27% ER)

What's this? Do you have any other lower cost bond choices?

Paul
by pkcrafter
Sat Jul 19, 2014 10:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA income limit question
Replies: 24
Views: 1059

Re: Professor looking for investment advice

What is your current asset allocation (AA)? Can you provide some more detail on this fund -- International Equities (expenses of .53%) . You are going to have to use Valic for international and bonds because you don't have enough room in the Roths to cover all needed international and all bonds. Sta...
by pkcrafter
Sat Jul 19, 2014 9:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Professor looking for investment advice
Replies: 16
Views: 1613

Re: Books or Articles for AA in Retirement

At age 65 we finally have our number. Now I am concerned about a more conservative allocation or portfolio strategy to keep the number. Does anyone know of good books or article about investing IN retirement as opposed to investing before retirement. Found a thread a few days ago that recommended s...
by pkcrafter
Sat Jul 19, 2014 9:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Books or Articles for AA in Retirement
Replies: 8
Views: 425

Re: Tobins Q as market valuation metric

I am staying invested within my allocation, but I am overweighing emer. markets and international comparing to US, it just looks cheaper, and I love buying things on sale... EM is on sale? EM has higher risk, and don't forget when markets fall, all correlations tend to go to 1. That means EM is not...
by pkcrafter
Sat Jul 19, 2014 12:19 am
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2046

Re: Market Timing vs. Market Opportunity

I know that general consensus here is that you can't time the market, don't even try. I get that and agree with it; very sound advice. With that in mind, I am wondering has anyone here considered moving some money out of the market into cash now, and leaving it there until QE3 ends? market timing T...
by pkcrafter
Sat Jul 19, 2014 12:05 am
 
Forum: Investing - Theory, News & General
Topic: Market Timing vs. Market Opportunity
Replies: 46
Views: 2898

Re: Tobins Q as market valuation metric

Tobins Q is an interesting metric that tells us that the stock market value of replacement of all companies is actually much much higher than the value of the companies themselves... Tobin's Q provides very similar results to Shillers P/E 10 (see chart above), so it isn't that special. Good, yes, bu...
by pkcrafter
Fri Jul 18, 2014 11:21 pm
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2046

Re: If You Can Free Kindle/NOT Free Paperback Available

I'm betting Levett and Huey are boomers. :happy

And once again, thank you Dr. B.

Paul
by pkcrafter
Fri Jul 18, 2014 10:18 pm
 
Forum: Investing - Theory, News & General
Topic: If You Can Free Kindle/NOT Free Paperback Available
Replies: 9
Views: 1743

Re: Tobins Q as market valuation metric

Arthur, I think what you are referring to is a secular bear market. http://pbs.twimg.com/media/BjN5gBgCEAA5Wjg.png:medium The consensus is we are now in a secular bear market, but as you can see, there are still bull runs in them. More information-- http://www.forbes.com/sites/sharding/2013/11/15/wh...
by pkcrafter
Fri Jul 18, 2014 1:21 am
 
Forum: Investing - Theory, News & General
Topic: Tobins Q as market valuation metric
Replies: 42
Views: 2046

Re: How is my AA? [Asset Allocation]

Your desired AA is 84/16? If so, you seem to be there now. In that case new money should be going to both stocks and bonds to maintain it. Paul I wouldn't say it is my ideal AA, I am still figuring that out but I am looking at how much I also have sitting on the sidelines in cash and the number is ...
by pkcrafter
Fri Jul 18, 2014 12:22 am
 
Forum: Investing - Help with Personal Investments
Topic: How is my AA? [Asset Allocation]
Replies: 8
Views: 608

Re: How is my AA? [Asset Allocation]

Your desired AA is 84/16? If so, you seem to be there now. In that case new money should be going to both stocks and bonds to maintain it.

Paul
by pkcrafter
Thu Jul 17, 2014 8:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: How is my AA? [Asset Allocation]
Replies: 8
Views: 608

Re: Intersting article: what broker's title can reveal

Thanks, Too bad the people who need to read this won't see it.

Paul
by pkcrafter
Thu Jul 17, 2014 7:17 pm
 
Forum: Investing - Theory, News & General
Topic: Intersting article: what broker's title can reveal
Replies: 1
Views: 609

Re: Market Timing vs. Market Opportunity

Apologies, I'm not trying to take a shot at you, it's just....
This time around though, there's a twist.

That is just too close to "it's different this time." I'll have to pass this time too.

Paul
by pkcrafter
Thu Jul 17, 2014 6:06 pm
 
Forum: Investing - Theory, News & General
Topic: Market Timing vs. Market Opportunity
Replies: 46
Views: 2898

Re: I'm a genius!

Will do good wrote:HomerJ- You are a genius.


+1

Paul
by pkcrafter
Thu Jul 17, 2014 5:49 pm
 
Forum: Investing - Theory, News & General
Topic: I'm a genius!
Replies: 19
Views: 5060

Re: Withdrawl from Target Retirement or Life Strategy Fund

It isn't reverse market timing, it's simply rebalancing. With a TR fund, the rebalancing is done daily, but as the fund shrinks, the loss is coming from equity, so equity is added every day to maintain the AA. In a rising market, equity surges and some is moved to the bond side to keep the AA, but t...
by pkcrafter
Thu Jul 17, 2014 2:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 11
Views: 985
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