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Re: should I include a REIT fund with a .77 ER in my portfol

I own this fund. It is NOT a REIT or an REIT fund (index), rather an individual annuity that owns a lot of real estate products around the globe. It provides wonderful diversification. The expense ratio is not an apples to apples comparison. A REIT fund has an expense ratio to hold various REITs lik...
by steve r
Thu Mar 26, 2015 10:55 am
 
Forum: Investing - Help with Personal Investments
Topic: should I include a REIT fund with a .77 ER in my portfolio?
Replies: 5
Views: 579

Re: 15 vs 30 yr mortgage

Given your fixed income portion of your retirement is unlikely to earn 5.25 percent, I would go 15 year mortgage and crank up your stock holdings a touch. This assumes one can afford the higher payments. http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx steve r, This is whe...
by steve r
Tue Mar 24, 2015 3:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 yr mortgage
Replies: 78
Views: 5436

Re: 15 vs 30 yr mortgage

TS, You are making this way too complicated. It is very simple. 1) Can your investment return more than 5.25% over this 15 years period?? A) If the answer is yes, take the 30 years mortgage. B) During this 15 years period, if the return is lower than 5.25%, aka you changed your mind. You can prepay...
by steve r
Tue Mar 24, 2015 2:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 yr mortgage
Replies: 78
Views: 5436

Re: 15 vs 30 yr mortgage

The breakeven point is 5.25%.. So, can you investment return 5.25%?? If you take 15 years mortgage, after 15 years, you owed nothing. If you take 30 years mortgage, after 15 years, you owed 253K. ... If your investment return greater than 5.25%, you make money. Or else, your don't. KlangFool The bi...
by steve r
Tue Mar 24, 2015 9:53 am
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 yr mortgage
Replies: 78
Views: 5436

Re: Buying a Home. 30yr FRM vs. 15yrFRM vs. ARM 5/1

My 30yr FRM is at 3.49%. My 64/36 portfolio asset return average about 7.1%. So, I am not in hurry to pay off the mortgage loan. So, where is the interest rate saving?? I made 3.5% from the loan amount. ... KlangFool The OP is not borrowing at 3.75 percent to invest in stocks. The OP is borrowing t...
by steve r
Sun Mar 15, 2015 3:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Buying a Home. 30yr FRM vs. 15yrFRM vs. ARM 5/1
Replies: 32
Views: 2692

Re: Buying a Home. 30yr FRM vs. 15yrFRM vs. ARM 5/1

Kids. Yes, they are expensive. But having a house paid for pre-college will be a nice help. steve, Why? I have kids going to college in a few years. Housing loan interest rate is much cheaper than student loan by a few percentage point. 30 yr FRM give a person that kind of flexibility. Interest rat...
by steve r
Sun Mar 15, 2015 11:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Buying a Home. 30yr FRM vs. 15yrFRM vs. ARM 5/1
Replies: 32
Views: 2692

Re: Buying a Home. 30yr FRM vs. 15yrFRM vs. ARM 5/1

I do not think we have enough information. Is your income stable/secure(like a teacher)? If NO, I would go with the 30 year. Is your income high relative to payments? If yes. I would go with the 15 year. You can afford it. See MarcBarb's math. Every year with a 15 year mortgage is $1,000 - $2,000 mo...
by steve r
Sun Mar 15, 2015 8:07 am
 
Forum: Personal Finance (Not Investing)
Topic: Buying a Home. 30yr FRM vs. 15yrFRM vs. ARM 5/1
Replies: 32
Views: 2692

Re: Consumer Cellular increases Minutes, Texts, & Data

A little sight of hand on data Data overage on the 3 gb plan now increased to 25 cents. It had been 1.5 cents. It is possible, if I am not careful and switch plans mid month, this can cost me a lot more. Before, each addition GB cost $15, now $250 (if not careful). So thanks for pointing this out to...
by steve r
Mon Mar 02, 2015 3:44 pm
 
Forum: Personal Consumer Issues
Topic: Consumer Cellular increases Minutes, Texts, & Data
Replies: 14
Views: 931

Re: Anyone know a source showing avg. real wage in 70's vs t

FRED The Federal Reserve Board of St Louis complied over 100,000 data series http://research.stlouisfed.org/fred2/series/COMPRNFB They have real wage data back to 1947.https://www.bogleheads.org/forum/viewtopic.php?f=10&t=158710 Real hourly wages are up nearly 50 percent since the 1970s. They h...
by steve r
Wed Feb 18, 2015 7:34 pm
 
Forum: Investing - Theory, News & General
Topic: Anyone know a source showing avg. real wage in 70's vs today
Replies: 19
Views: 1995

Re: Global Minimum Volatility?

Since USMV is the only one of these funds I invest in currently, I do watch it's beta. iShares has pretty consistently reported it as being around .8. Backtesting has claimed that this number should be a little lower--we'll see after the next bear market. Based on these numbers, I've been treating ...
by steve r
Wed Feb 11, 2015 9:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Global Minimum Volatility?

.... it looks like MSCI Global Minimum Volatility uses some kind of model (GEM2) to estimate or forecast covariances. Then a practical implantation has constraints like min/max weights (0.05/1.5 pct), sector and country weights, etc. So it becomes a constrained optimization problem, which is going ...
by steve r
Mon Feb 09, 2015 8:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Global Minimum Volatility?

Global Minimum Variance Portfolio (GMVP) is straight out of Modern Portfolio Theory (MPT). But rather than finding the Tangency Portfolio (TP), which has maximum Sharpe slope, GMVP is the tip of the Markowitz bullet. http://upload.wikimedia.org/wikipedia/commons/e/e1/Markowitz_frontier.jpg Finding ...
by steve r
Mon Feb 09, 2015 2:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Global Minimum Volatility?

I've argued in the past that for the person who holds, say, a 90/10 portfolio and wants less risk, the best way to do that by far is to add bonds as opposed to low volatility stocks. I suspect this is more true for someone who views risk as volatility than for someone most concerned with shortfall ...
by steve r
Mon Feb 09, 2015 9:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Global Minimum Volatility?

It's worth noting that low-vol funds have more interest rate risk than the market, primarily because they are tilted toward sectors such as utilities which use more debt-financing. You can observe this in terms of the higher correlation between bond returns and low-vol returns than with market retu...
by steve r
Fri Feb 06, 2015 1:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Global Minimum Volatility?

Well, in the spirit of chasing performance, I today have moved a small part of my Roth IRA into an initial stake in this fund, VMVFX... I think that doubles the number of Bogleheads who claim to be in the fund. I am curious what BH think about active management (black box) in this space versus some...
by steve r
Fri Feb 06, 2015 1:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Global Minimum Volatility?

The fund has done well for two reasons: 1) Currency hedged international indexes have outperformed in recent years their unhedged counterparts. In the ETF space, HEFA outperformed EFA. 2) Minimum volatility investments -- of which I am invested in -- has outperformed on a risk adjusted basis since t...
by steve r
Thu Feb 05, 2015 10:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Global Minimum Volatility?
Replies: 40
Views: 3007

Re: Critique of Fidelity Index Portfolio

That's the... taxable account only? Ditch the REITs and high-yield corporate bonds. .... Also, my guess is that you want FSIVX instead of FSGDX. ... Different people have different feelings about tilting total market exposure to different categories. A basic small-cap tilt, without combining with v...
by steve r
Wed Jan 28, 2015 1:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Critique of Fidelity Index Portfolio
Replies: 28
Views: 1503

Re: Anyone know when CD rates will increase?

Nobel Prize winning economist Thomas Sargent has this prediction on interest rates (short video). Enjoy.


https://www.youtube.com/watch?v=CF4MD5imt2U
by steve r
Wed Jan 28, 2015 8:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Anyone know when CD rates will increase?
Replies: 70
Views: 5527

Re: Suspend 403b contributions to cancel mortgage insurance?

Thanks for the replies. You all inspired me to check out refinancing. It looks like I can get a 3.7% fixed 15 year conventional mortgage without PMI with a total of about $2,000 in closing costs. This seems like a complete no-brainer as I can shorten the term, save interest, ditch PMI, and not touc...
by steve r
Thu Jan 22, 2015 12:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Suspend 403b contributions to cancel mortgage insurance?
Replies: 12
Views: 1140

Re: why did my portfolio perform so badly in '14 ?

Just my opinion, but if you can't easily analyze your portfolio and determine why you aren't seeing the returns you'd like, it should be time to simplify. +1 3 funds or 3 funds plus (tilt small value, commodities, REITs, TIPS whatever). I do think your portfolio is hedging against inflation (with T...
by steve r
Tue Jan 20, 2015 10:48 am
 
Forum: Investing - Help with Personal Investments
Topic: why did my portfolio perform so badly in '14 ?
Replies: 13
Views: 3371

Re: Suspend 403b contributions to cancel mortgage insurance?

Yes!!! Not only will you not pay PMI, you will also no longerpay interest on the amount you pay down. This is a no brainer IMHO. You may also want to refi to a 15 year mortgage to coincide with retirement. You might consider contributing a little more to stocks and a little less to bonds to your ret...
by steve r
Tue Jan 20, 2015 8:26 am
 
Forum: Personal Finance (Not Investing)
Topic: Suspend 403b contributions to cancel mortgage insurance?
Replies: 12
Views: 1140

Re: CAPM and Minimum Variance Portofolio

I would suggest starting by reviewing the Wiki and the following article. You can see favorable results back to 1926. http://www.bogleheads.org/wiki/Low_volatility_index_returns http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2055431 A few threads on this topic have come up in the past. I am one ...
by steve r
Sun Jan 18, 2015 5:17 pm
 
Forum: Investing - Theory, News & General
Topic: CAPM and Minimum Variance Portofolio
Replies: 4
Views: 509

Re: Equal Weighted Funds - Better?

I am NOT an equal weighter ... but ... 50+ years of data does make one pause. I would not refer to it as illogical. So I will make some counter arguments. 1) Risk adjusted returns--- This has already been discussed. 2) Casino -- Investors are the casino in that the odds are slightly in our favor. A ...
by steve r
Sun Jan 11, 2015 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: Equal Weighted Funds - Better?
Replies: 31
Views: 2696

Frontier Communications - Horrible Experiences

Recently, AT&T uverse was sold to Frontier Communications (at least in Connecticut). My service has been horrible. I will not bore you with a long list of details but my issues include dropped service attempting to switch plans -- poor customer service -- tremendously long wait hold times --- pr...
by steve r
Sun Jan 11, 2015 11:36 am
 
Forum: Personal Consumer Issues
Topic: Frontier Communications - Horrible Experiences
Replies: 9
Views: 1458

Re: REITs and Rising Interest Rates

Your point number 3 is the same argument Swedroe makes in the article I linked like 15 posts up (in fact he uses the same historical example from 2003), namely that the REASON for any interest rate rise is important in determining how REITs will fare. Presumably the Fed will keep rates low until th...
by steve r
Fri Jan 09, 2015 11:57 am
 
Forum: Investing - Theory, News & General
Topic: REITs and Rising Interest Rates
Replies: 25
Views: 2336

Re: REITs and Rising Interest Rates

Interesting discussion ... and in part what makes a market. Several points for thought. 1) If rates rise by a third, the firms weighted average cost of capital will not rise by a third. And if the REIT managers are properly hedged or use fixed rate loans, their cost may not go up at all. I think we ...
by steve r
Thu Jan 08, 2015 7:06 pm
 
Forum: Investing - Theory, News & General
Topic: REITs and Rising Interest Rates
Replies: 25
Views: 2336

Re: REITs and Rising Interest Rates

I think this is a case where assuming the past dictates the future, via the implication that correlations in historical data sets mean much going forward, is particularly unwise. If rates spike up now REIT's are going to get clobbered .... I think it is unwise to say this with such certainty ... yo...
by steve r
Thu Jan 08, 2015 11:37 am
 
Forum: Investing - Theory, News & General
Topic: REITs and Rising Interest Rates
Replies: 25
Views: 2336

Re: REITs and Rising Interest Rates

There are REITs in the S&P 500 and other S&P indices. Should an indexer just own the S&P stock indices and let that determine his REIT position? I struggle with this one. The TSM / 500 way under represents the actual market cap of all commercial real estate and homes, etc. In this light...
by steve r
Thu Jan 08, 2015 10:42 am
 
Forum: Investing - Theory, News & General
Topic: REITs and Rising Interest Rates
Replies: 25
Views: 2336

Re: REITs and Rising Interest Rates

I like the articles summary
"Using predictions of future interest rates to further make predictions of future REIT performance seems doubly silly."
by steve r
Thu Jan 08, 2015 9:50 am
 
Forum: Investing - Theory, News & General
Topic: REITs and Rising Interest Rates
Replies: 25
Views: 2336

Re: REITs and Rising Interest Rates

Using the Simba/BH spreadsheet data
The long term annual correlation between TSM and REITS is 0.59 since 1973 (.51 since 1985 -- the spreadsheet also tests back to 1985)
REITS and total bond ... 0.21 (0.19)
REITS and long term treasuries near zero or slightly negative.
by steve r
Thu Jan 08, 2015 9:47 am
 
Forum: Investing - Theory, News & General
Topic: REITs and Rising Interest Rates
Replies: 25
Views: 2336

Re: Fidelity Customers, What Do You Hold at FIDO?

Spartan funds, almost without exception .... Then I have splits of: FSEVX (mid) FSSVX (small) FSIVX (international) FSGDX (international plus emerging) FSRVX (REIT) +1 I do think Spartan Funds are very good. No bid/ask spread, low fees, no ability to buy and sell during day are all pluses for me wh...
by steve r
Thu Jan 08, 2015 6:44 am
 
Forum: Investing - Theory, News & General
Topic: Fidelity Customers, What Do You Hold at FIDO?
Replies: 43
Views: 4155

Re: rebalance at 3% change ok?

I think it's a good idea to establish a schedule for rebalancing to help avoid untoward influence from pernicious truant whims. Personally I do it in October and April if an allocation is more than 3% different than plan. I think that's plenty, if not excessive. I think 3 percent is fine. For me, f...
by steve r
Wed Jan 07, 2015 5:09 pm
 
Forum: Investing - Theory, News & General
Topic: rebalance at 3% change ok?
Replies: 24
Views: 1912

Re: Is "stay the course" a commandment or a suggestion?

If we are to accept your perfectly reasonable interpretation of "stay the course" what are we supposed to make of Bogleheads luminary Rick Ferri? In case you missed the recent post on his website, and the thread discussing it on this website, he's telling us that he expects a major meltdo...
by steve r
Wed Jan 07, 2015 11:10 am
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4188

Re: Is "stay the course" a commandment or a suggestion?

I would put "stay the course" closer to a commandment then not. .... As we have seen even recently with that fascinating, but not surprising study by Fidelity the folks who did not touch, i.e. alter their accounts ended up doing better then those who did. It is very difficult for folks to...
by steve r
Wed Jan 07, 2015 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Is "stay the course" a commandment or a suggestion?
Replies: 60
Views: 4188

Re: 2015 BOGLEHEAD CONTEST REGISTRATION

2292.22
by steve r
Tue Jan 06, 2015 3:10 pm
 
Forum: Investing - Theory, News & General
Topic: 2015 BOGLEHEAD CONTEST REGISTRATION
Replies: 556
Views: 20359

Re: "The Most Successful Investors Leave Their Money Alone"

The irony is, the more books on personal finance I read and the more knowledgeable I become, the less there is for me to do. Now I just buy index funds and hold them till retirement. Boring! I guess I'd improve my investment returns by not buying any more personal finance books. +1 Perfect Comment ...
by steve r
Mon Jan 05, 2015 8:09 am
 
Forum: Investing - Theory, News & General
Topic: "The Most Successful Investors Leave Their Money Alone"
Replies: 30
Views: 5405

Re: Help with portfolio - no bonds

You could also look for low-volatility or minimum-volatility funds that attempt to limit market exposure (reduce beta), but note that many are heavily concentrated in defensive sectors and some have quite a high turnover, making them tax inefficient. Perhaps consider for tax-advantaged space, along...
by steve r
Thu Jan 01, 2015 5:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with portfolio - no bonds
Replies: 12
Views: 1698

Re: current thoughts on international allocations

Current thinking on international allocations is about the same -- one third (recent Vanguard paper) to one half (roughly market cap weight). I do not think current thinking has changed on EM. You are probably a touch heavier their than consensus (if there is one on this site) which is cap weight. F...
by steve r
Tue Dec 30, 2014 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: current thoughts on international allocations
Replies: 4
Views: 583

Re: On average, how often do you check your investment balan

I put monthly ... but some months a bit more (just not weekly).
This is way down from what it was pre-Boglehead days. :happy
by steve r
Fri Dec 19, 2014 10:58 am
 
Forum: Personal Finance (Not Investing)
Topic: On average, how often do you check your investment balances?
Replies: 53
Views: 3480

Re: Effect of 0.79 correlation: fantasy vs. reality

... If the correlation coefficient between SPY and VBR were 1.0 you could create a riskless, zero-variance portfolio. Is that something you might be interested in? Yes, I would be interested in a zero variance portfolio (of course) .... but am perplexed by how a 1.0 correlation could lead to that ...
by steve r
Thu Dec 18, 2014 9:57 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 58
Views: 5041

Re: Effect of 0.79 correlation: fantasy vs. reality

... If the correlation coefficient between SPY and VBR were 1.0 you could create a riskless, zero-variance portfolio. Is that something you might be interested in? Yes, I would be interested in a zero variance portfolio (of course) .... but am perplexed by how a 1.0 correlation could lead to that ...
by steve r
Thu Dec 18, 2014 9:54 am
 
Forum: Investing - Theory, News & General
Topic: Effect of 0.79 correlation: fantasy vs. reality
Replies: 58
Views: 5041

Re: How do I split between VG & Fidelity?

If I understand your question you are asking should I have three funds in Fidelity and three funds in Vanguard. The answer is YES if you want to keep a simple three fund approach. I have a version of this approach with TIAA and Fidelity. It allows for rebalancing as needed. What Livesoft is suggesti...
by steve r
Fri Dec 12, 2014 9:02 am
 
Forum: Investing - Help with Personal Investments
Topic: How do I split between VG & Fidelity?
Replies: 19
Views: 2215

Re: TBM too much treasury?

I've come across a few articles ... investors should consider adding Intermediate corporate bonds to achieve a better diversification ..... There is no evidence to suggest that "corporate" bonds obtains better diversification from equities in the same set of "corporations" than ...
by steve r
Thu Oct 16, 2014 12:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: TBM too much treasury?
Replies: 67
Views: 4870

Re: Refinance ARM to 15 year fixed with 5 years left?

I too had a similar issue. I had a seven year and switched to 15 year. I was aggressively trying to pay down the seven year ... in case rates went up I would pay a higher rate on a smaller loan. I also wanted the smallest loan on my house went kids went to college. The goal was to replace home payme...
by steve r
Fri Oct 10, 2014 7:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Refinance ARM to 15 year fixed with 5 years left?
Replies: 8
Views: 1143

IOS 8 installed -- now I can't print

Just updated iPads to IOS 8. Now I cannot print via "Air." Has anyone else had this problem? I called Apple and they think it is the printers fault. I do not see how this can be the case as I can still print from my PC and could print from iPads previously? Shouldn't IOS 8 be backwards com...
by steve r
Sun Oct 05, 2014 3:41 pm
 
Forum: Personal Consumer Issues
Topic: IOS 8 installed -- now I can't print
Replies: 2
Views: 396

Minimum volatility - RISING INTEREST RATES

One (other) concern in this space ... how it may respond in a rising rate. My thought is that min vol (with ad hoc sector caps) outperform low vol (with heavy utilities) Not a lot to go by, but the two years wear total bond market lost money with data (1994, 1999) low vol did under perform both year...
by steve r
Thu Oct 02, 2014 7:59 pm
 
Forum: Investing - Theory, News & General
Topic: Minimum volatility - simply factor exposure
Replies: 45
Views: 3818

Re: Minimum volatility - simply factor exposure

Steve First value is not low volatility, in fact value has higher not lower SD over the long term Agreed. And yet people constantly claim low vol is capturing a value factor. Hard to see the connection given value has higher SD and low vol are often pegged by M* as blend or even growth. Let me reph...
by steve r
Wed Oct 01, 2014 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: Minimum volatility - simply factor exposure
Replies: 45
Views: 3818

Re: Minimum volatility - simply factor exposure

. Here's the analysis from the OP broken down into 1990s, 2000s, 2010s, starting again with the full period with a bit more detail added. FF mkt, size, and value, and Asness et al’s QmJ ‘quality’ factor is used for the analysis t-stats in parentheses [list] Full Period (06/1988 – 08/2014) Alpha = -...
by steve r
Wed Oct 01, 2014 10:46 am
 
Forum: Investing - Theory, News & General
Topic: Minimum volatility - simply factor exposure
Replies: 45
Views: 3818

Re: Minimum volatility - simply factor exposure

I just don't find any logic to the low volatility strategy, and the evidence to me seems pretty strong it's other factors. And it's really all about avoiding high volatility, the well known lottery effect You want less vol, use low beta and high tilt, Larry I would think if you want want a specific...
by steve r
Wed Oct 01, 2014 10:33 am
 
Forum: Investing - Theory, News & General
Topic: Minimum volatility - simply factor exposure
Replies: 45
Views: 3818

Re: Minimum volatility - simply factor exposure

Fifth, as mentioned low vol seems to have exposure to term risk. At least that should be taken into when deciding on term of your bond holdings. But low vol has benefited from bond rally. And finally, while the data is impressive, I'm not convinced on quality going forward as the risk story is pret...
by steve r
Wed Oct 01, 2014 10:03 am
 
Forum: Investing - Theory, News & General
Topic: Minimum volatility - simply factor exposure
Replies: 45
Views: 3818
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