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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: 1403

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: 69
Views: 4730

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: 1072

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: 3297

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: 1072

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: 487

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: 2594

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: 1388

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: 2251

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: 2251

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: 2251

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: 2251

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: 2251

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: 2251

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: 4038

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: 1831

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: 4087

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: 4087

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: 19749

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: 5334

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: 1611

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: 569

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: 3450

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: 4880

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: 4880

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: 2148

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: 4800

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: 1115

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: 392

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: 3754

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: 3754

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: 3754

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: 3754

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: 3754

Re: table suggests total bond not best as diversifier

Back-testing can be hazardous to your wealth. True ... but ... is there any question in anyone's mind what the Fed will do when the next recession hits? Anyone not think rates will come even lower. LTT may get clobbered between now and then, but when the next recession hits the Fed will almost cert...
by steve r
Sun Aug 31, 2014 5:41 pm
 
Forum: Investing - Theory, News & General
Topic: table suggests total bond not best as diversifier
Replies: 20
Views: 2161

Re: Does anyone have 'Lazy Portfolios'?

If someone tells me that I can get another expected 1 percent per year CAGR, I don't care if it requires 20 funds to pull off, I would do it. I see two nit picking flaws with this. 1) I would not suggest investing based on someone telling you something. Do your homework. 2) 20 different funds almos...
by steve r
Fri Aug 29, 2014 4:41 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone have 'Lazy Portfolios'?
Replies: 85
Views: 6991

Re: How compelling is the TIAA Real Estate fund?

When I consider putting some of my T-C money into TREA, I stumble when I consider the expense ratio: 0.87%. Instead, I put money into Vanguard REIT Index Fund Admiral Shares (VGSLX), which has an E.R. of 0.10%. The chart of TREA's performance since 2010 is very impressive, but the E.R. stops me col...
by steve r
Mon Jun 16, 2014 2:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: How compelling is the TIAA Real Estate fund?
Replies: 85
Views: 4958

Re: How compelling is the TIAA Real Estate fund?

I have 29% of my T-C portfolio in TREA and 53% in various T-C stock funds ... ... I have a quarter of my T-C portfolio in TREA ... and about half in stocks (split between international and U.S.) ... the rest is in a bond fund. This allocation is a tad too conservative for a presumably young faculty...
by steve r
Mon Jun 16, 2014 12:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: How compelling is the TIAA Real Estate fund?
Replies: 85
Views: 4958

Re: FT: The myth of small-cap outperformance

.... think there is a sort of synergy between small-cap and value. Small caps are no good unless you get rid of the small-cap growth stocks, and while value is always good, value is much more powerful within the small-cap universe than within the total stock universe. I'm not saying any of that is ...
by steve r
Mon Jun 16, 2014 11:33 am
 
Forum: Investing - Theory, News & General
Topic: FT: The myth of small-cap outperformance
Replies: 42
Views: 4043

Re: pick up double major or finish college in 3 years?

As an economics professor I have seen students with "odd"/"unique" double majors do very well. Economic majors do very well and is one of the top paid non-engineering major (see PayScale.com pay by major). This survey assumes no Master's degree. Diverse skill sets actually streng...
by steve r
Mon Jun 16, 2014 6:57 am
 
Forum: Personal Finance (Not Investing)
Topic: pick up double major or finish college in 3 years?
Replies: 112
Views: 5933

Re: Brett Arends's "Perfect Portfolio" Comments?

Thanks for the welcome and insightful comments. Going back further in time would have been instructive. :? Arends doesn't define US "Minimum Volatility" stocks in his article. He leaves it at "The portfolio takes advantage of research showing that "riskier" stocks have tend...
by steve r
Sun Jun 15, 2014 7:32 am
 
Forum: Investing - Theory, News & General
Topic: Brett Arends's "Perfect Portfolio" Comments?
Replies: 24
Views: 2015

Re: Brett Arends's "Perfect Portfolio" Comments?

No one has really commented on the actual portfolio yet. So I'll take a shot. (1) Low-volatility strategies are just small and value strategies in disguise. They are called "low-volatility funds" instead of "mid cap value funds" for marketing purposes. This is not backed by the ...
by steve r
Sun Jun 15, 2014 7:25 am
 
Forum: Investing - Theory, News & General
Topic: Brett Arends's "Perfect Portfolio" Comments?
Replies: 24
Views: 2015

Re: FT: The myth of small-cap outperformance

Even if he is correct, for buy/hold/rebalance types, small-caps out-perform over long time periods. So unless you are a market timer, why is this an important issue? I think you missed the point. His statement is opposite of yours, saying that none of the various cap-sizes show persistent outperfor...
by steve r
Sun Jun 15, 2014 7:12 am
 
Forum: Investing - Theory, News & General
Topic: FT: The myth of small-cap outperformance
Replies: 42
Views: 4043

Re: College & PhD vs $250k working

grad students usually get full tuition/health benefits as well as a stipend from the lab in which they are doing their phd work. monies could be from a fellowship or a research grant from nih, nsf, Dod.... go for the phd and academics is NOT especially a bad career path !!! +1 You son has a passion...
by steve r
Wed Jun 11, 2014 3:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: College & PhD vs $250k working
Replies: 104
Views: 7865

Re: Refinance mortgage from 15 to 30yr to invest more?

No. I think you know this. It cost you $27,000 to free up $63,000 to invest. That is close to a 50 percent return. Even if you STARTED with 63,000 to invest ... that would be one heck of a return. To get such a return, means taking risk. Knowing you have a big down payment in a few years it is not a...
by steve r
Wed Jun 11, 2014 8:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Refinance mortgage from 15 to 30yr to invest more?
Replies: 8
Views: 990

Re: Car for a long daily commute

I can tell you what I did (similar situation). A used car a few years old with nearly no miles on it. But be patient in buying. I drove my old car nearly into the ground, but knew what car I was buying next. (Lexus CT200H. Small, but nice. I recommend it to anyone, but you have to like it ... it is ...
by steve r
Sun Jun 08, 2014 6:43 pm
 
Forum: Personal Consumer Issues
Topic: Car for a long daily commute
Replies: 75
Views: 6721

Re: BenefitWallet Investment Options? HSA

Thanks.
I saw that page, but missed the pdf link (on the right for other readers). Two Vanguard fund is all I really need. Other funds probably on the expensive side. I will cross that bridge when I come to it.
by steve r
Tue Apr 29, 2014 9:54 am
 
Forum: Personal Finance (Not Investing)
Topic: BenefitWallet Investment Options? HSA
Replies: 3
Views: 318

BenefitWallet Investment Options? HSA

Anyone know the investment options at BenefitWallet for HSA? How good they are, etc?

Also, is it a good option for savings if maxed out other taxed deferred space?
by steve r
Tue Apr 29, 2014 9:27 am
 
Forum: Personal Finance (Not Investing)
Topic: BenefitWallet Investment Options? HSA
Replies: 3
Views: 318

Re: Mel's Unloved Mid-Caps Finally Getting Some Respect

Trev on the old diehards site backtested midcaps to the 1920s ... I could find that link, but here is some of the findings. Mid caps consistent outperform a barbell approach of L and S

http://www.bogleheads.org/forum/viewtopic.php?t=1997
by steve r
Thu Apr 24, 2014 11:19 am
 
Forum: Investing - Theory, News & General
Topic: Mel's Unloved Mid-Caps Finally Getting Some Respect
Replies: 46
Views: 4664

Re: Global Minimum Volatility Fund

I took a look at ACWV and noticed it trades at a rather hefty premium to the global total stock market: ACWV: PE 22.78, PB 4.28 VT: PE 18.3, PB 2.0 Pretty interesting, considering that I previously read that low volatility/beta funds tend to generally have a value tilt. This is most definately not ...
by steve r
Wed Apr 23, 2014 7:49 am
 
Forum: Investing - Theory, News & General
Topic: Global Minimum Volatility Fund
Replies: 29
Views: 3178
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