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Re: No advantage of Slice and Dice vs 3Fund?

I never quite follow the "tracking error regret" point as being some unique feature of a tilted portfolio. Isn't there always something that is doing better than whatever portfolio you have? I know I have regret that I just didn't go 100% Wellesley when I started investing with Vanguard. W...
by stlutz
Mon Sep 01, 2014 2:16 am
 
Forum: Investing - Theory, News & General
Topic: No advantage of Slice and Dice vs 3Fund?
Replies: 41
Views: 2568

Re: Financial Planners, DFA, and your opinions please!

I'm looking for a plan initially so that I can bring all the pieces together. That's why my initial search (and I forgot to include this, I'm sorry) was for the following: 1) Fee-only 2) CFP (and more certifications the better showing they are serious) 3) Experience 4) Ability to give me access to ...
by stlutz
Sat Aug 30, 2014 1:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Financial Planners, DFA, and your opinions please!
Replies: 25
Views: 1076

Re: Seeking wisdom and guidance

Looks like you are short on bonds versus your desired allocation (25% bonds). I would suggest the following as being a better starting point: --Your 401K: Use the VG 2030 fund, which is currently 24.2% bonds. --Your wife's 401K: T-Row 2025 fund, which is 27.7% bonds.* --Your IRA: Vanguard Life Strat...
by stlutz
Sat Aug 30, 2014 1:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Seeking wisdom and guidance
Replies: 10
Views: 967

Re: SCHC vs. SFILX

Schwab's ETF equivalent to SFILX would be FNDA.
by stlutz
Sat Aug 30, 2014 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: SCHC vs. SFILX
Replies: 4
Views: 407

Re: Cellphone for trip to Ireland

I use Truphone paired with a cheap quad-band GSM phone that you can buy on Amazon. Use it myself when traveling and share it with family members who travel overseas as well.
by stlutz
Sat Aug 30, 2014 12:43 pm
 
Forum: Personal Consumer Issues
Topic: Cellphone for trip to Ireland
Replies: 9
Views: 619

Re: Financial Planners, DFA, and your opinions please!

Are you looking for a financial planner or an investment advisor? The former will help you with goal setting, determining how much those goals will cost, how much you need to save to accomplish said goals, how much risk is appropriate to take in your situation etc. This should be thought of as more ...
by stlutz
Sat Aug 30, 2014 12:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Financial Planners, DFA, and your opinions please!
Replies: 25
Views: 1076

Re: Targeted Intermediate Treasury Funds vs Market-cap Weigh

The problem with Treasuries with under 3 years or so to maturity is that they yield less than an online savings account. So why bother. With long-term treasuries, there are institutions with lots of money (i.e. insurance companies, pension funds) for whom they are close to a risk-free asset because ...
by stlutz
Sat Aug 30, 2014 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Targeted Intermediate Treasury Funds vs Market-cap Weighing?
Replies: 2
Views: 346

Re: Help with Risky Allocation for 33 year-old

1. Is 93% equity / 7% fixed income reasonable ... 3. What strategy would you recommend for an expected home purchase in the next 5 years... 4. After maxing other tax-advantaged accounts, where would you rank contributions to infant's 529 college savings plan... So, you have a major money goal in 5 ...
by stlutz
Sun Aug 17, 2014 10:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Risky Allocation for 33 year-old
Replies: 13
Views: 1421

Re: 3 Fund Portfolio at Schwab?

Can you use VXUS? For the lump sum I would put it in that, then put any new contributions in the Schwab fund. When you get enough in the fund to make another purchase of VXUS worthwhile (i.e. the commission is insignificant), then do so.
by stlutz
Fri Aug 15, 2014 4:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: 3 Fund Portfolio at Schwab?
Replies: 29
Views: 2185

Re: Why would a passive investor use ETFs?

and there is room for some user error when making the transaction The one time I made a transaction mistake was actually with mutual funds. I exchanged into Intermediate Term Bond Index when I meant to do Intermediate Term Tax Exempt. ETFs with their 3 or 4 character ticker symbols make it less lik...
by stlutz
Fri Aug 15, 2014 3:21 pm
 
Forum: Investing - Theory, News & General
Topic: Why would a passive investor use ETFs?
Replies: 60
Views: 3720

Re: BlackRock MSCI ACWI ex-U.S. Index Non-Lendable Fund M

The "net dividend" part indicates that the index returns are reported net of foreign taxes (which is what the fund returns will be as well). That has no impact on the # of stocks held. Back to your original question, this is a fine choice for an international holding--it's not just as &quo...
by stlutz
Thu Aug 14, 2014 1:19 am
 
Forum: Investing - Help with Personal Investments
Topic: BlackRock MSCI ACWI ex-U.S. Index Non-Lendable Fund M
Replies: 3
Views: 348

Re: BlackRock MSCI ACWI ex-U.S. Index Non-Lendable Fund M

Details on this index:

https://www.msci.com/resources/factshee ... sd-net.pdf

It is more comparable to the other Vanguard International fund (FTSE All World ex-US) in that is does not include smallcaps.
by stlutz
Thu Aug 14, 2014 12:00 am
 
Forum: Investing - Help with Personal Investments
Topic: BlackRock MSCI ACWI ex-U.S. Index Non-Lendable Fund M
Replies: 3
Views: 348

Re: Vanguard Target Date Fund 2025

If you are looking for a constant allocation then the Life Strategy funds might be worth looking at.
by stlutz
Wed Aug 13, 2014 11:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Target Date Fund 2025
Replies: 7
Views: 659

Re: Endowments: Paying for complexity or performance?

Given that the total size of the Balanced Index fund is only $23 billion, I doubt that the transaction would go through without a hitch. Even if it did, and the next day Balanced Index showed up with assets of $55 billion, if Harvard then decided to redeem $32 billion... There actually was a recent...
by stlutz
Sun Aug 10, 2014 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Endowments: Paying for complexity or performance?
Replies: 14
Views: 1057

Re: High Yield Bonds - Uncorrelated to Stocks and Bonds?

when the spreads on HY are high, it's the same time that the ERP and size and value premiums are high


And that's why I'm not really impressed with the value effect--it's really just loading on high yield. :twisted: :P
by stlutz
Sun Aug 10, 2014 11:26 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds - Uncorrelated to Stocks and Bonds?
Replies: 73
Views: 4763

Re: Post interleaving

Make good use of the Preview function to make sure the quoting is accurate.


I suppose it would also help with finding statements like these:

... quotes are only needed to the extent that they identify are point you are responding to.


:oops:
by stlutz
Sun Aug 10, 2014 11:13 am
 
Forum: Forum Issues and Administration
Topic: Post interleaving
Replies: 33
Views: 1639

Re: Just lost 3% Metlife Stable Value Fund - now what?

Does it need to be cash (i.e. it represents an emergency fund of sorts) or were you just counting it as cash? If it really truly needs to be cash, then a savings account is your best bet. Otherwise, don't overthink it and just incorporate it into your overall asset allocation. Any of the options you...
by stlutz
Sun Aug 10, 2014 10:44 am
 
Forum: Investing - Help with Personal Investments
Topic: Just lost 3% Metlife Stable Value Fund - now what?
Replies: 4
Views: 700

Re: Partial transfer from Ameritrade to Vanguard

Two problems: a) That would be a wash sale and the loss would be disallowed. b) Because it would be a cross-custodian wash sale, Vanguard/TD will not correctly track or report the wash sale to you or the IRS, so you'll have to track that and report it correctly to the IRS (including decades down the...
by stlutz
Sun Aug 10, 2014 10:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Partial transfer from Ameritrade to Vanguard
Replies: 8
Views: 557

Re: Post interleaving

Personally, when reading threads I prefer less quoted material to more. Assume I read what came before. When I'm reading your post, quotes are only needed to the extent that they identify are point you are responding to. For example, Larry Swedroe almost never quotes, but it's always clear whose que...
by stlutz
Sat Aug 09, 2014 11:46 pm
 
Forum: Forum Issues and Administration
Topic: Post interleaving
Replies: 33
Views: 1639

Re: Carry on Luggage Restrictions

I'm flying from Portland (Oregon) to Sacramento during the Thanksgiving holiday. I'll probably fly Southwest.


Two bags are checked free on SW, so just check your large bag and make sure no prohibited items are in your carry-on and life is easy.
by stlutz
Sat Aug 09, 2014 10:49 pm
 
Forum: Personal Consumer Issues
Topic: Carry on Luggage Restrictions
Replies: 24
Views: 1631

Re: What are you doing re charitable giving (money, not time

We recently discovered that two local organizations, to whom we've made significant (for us) contributions, have in our opinion made some unwise choices in how they used the money they've been given. In part this is why I give to organizations that I know will spend the money now as opposed to buil...
by stlutz
Sat Aug 09, 2014 6:14 pm
 
Forum: Personal Consumer Issues
Topic: What are you doing re charitable giving (money, not time)
Replies: 26
Views: 1542

Re: 3.3% Vanguard 10 year CD

I think the "warning, warning, danger, danger!" sentiment in this thread is maybe a bit overdone. An intermediate term bond fund like most of us prefer (e.g. with a duration just under 5) would be the same as a rolling 10-year bond ladder. For the OP, your question really is whether you ar...
by stlutz
Sat Aug 09, 2014 6:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: 3.3% Vanguard 10 year CD
Replies: 99
Views: 9694

Re: Tell Vanguard they need 2 factor authentication

I would argue that Vanguard has the option for better security than any other firm I deal with. The big security loophole is always what you can do via a phone call to support. Suppose I lose my key fob/my phone breaks/I forgot my username etc. I call Vanguard/Fidelity/Schwab and tell them so. Will ...
by stlutz
Sat Aug 09, 2014 2:43 am
 
Forum: Personal Consumer Issues
Topic: Tell Vanguard they need 2 factor authentication
Replies: 52
Views: 2372

Re: High Yield Bonds - Uncorrelated to Stocks and Bonds?

I'll qualify my next comment by noting that I'm part of the "safe bonds are best" crowd. However, discussions on "risky" bonds do show a lot of recency bias around here. We had two major, yet short-lived bear markets in 10 years. Both were cases where Treasury bonds were gold. Th...
by stlutz
Fri Aug 08, 2014 12:53 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds - Uncorrelated to Stocks and Bonds?
Replies: 73
Views: 4763

Re: Why should a portfolio get safer as one ages?

I'm one who leans toward having a more constant allocation over time--the Life Strategy approach over the Target Retirement approach. A few reasons: 1) There is no such thing as the one correct asset allocation for someone. As such, the goal is usually not to be wrong. If you randomly pick out 100 p...
by stlutz
Tue Aug 05, 2014 10:56 pm
 
Forum: Investing - Theory, News & General
Topic: Why should a portfolio get safer as one ages?
Replies: 30
Views: 2797

Re: Why should a portfolio get safer as one ages?

I have the impression that the investment industry likes to sell stocks and hates to see anyone reduce their equity allocation, ever. Are you claiming that the investment industry makes a ton of money off stocks and no money off bonds? Actually, I think it probably closer to the opposite--bonds are...
by stlutz
Tue Aug 05, 2014 10:41 pm
 
Forum: Investing - Theory, News & General
Topic: Why should a portfolio get safer as one ages?
Replies: 30
Views: 2797

Re: Target Date Fund vs. 60/40 Allocation

+1 on keeping what you have.

Does your 401K offer automatic rebalancing? My megacorp's will do it for you automatically each quarter and so it becomes the same amount of work as a balanced fund.

Otherwise, just plan to rebalance your 401K every year or two.
by stlutz
Tue Aug 05, 2014 10:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Target Date Fund vs. 60/40 Allocation
Replies: 9
Views: 1181

Re: Alliant Credit Union 48 mo CD/2.1%

One of the things ACU has going for it w.r.t. CDs is this: Do Certificates automatically renew at maturity? You have two renewal options when you open a Share or IRA Certificate: Automatic renewal to a certificate of the same type and term Transfer the funds into a share account or back to your IRA ...
by stlutz
Tue Aug 05, 2014 10:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Alliant Credit Union 48 mo CD/2.1%
Replies: 2
Views: 360

Re: Arnott's/RAFI 10 year 'expected' returns

But I definitely agree with your general point. Looking at back-filled indexes can give investors unreasonable expectations. My own approach is to cut historic premiums in half for the purposes of planning and portfolio construction. This leaves enough margin for error that, hopefully, small improv...
by stlutz
Tue Aug 05, 2014 10:24 pm
 
Forum: Investing - Theory, News & General
Topic: Arnott's/RAFI 10 year 'expected' returns
Replies: 78
Views: 4701

Re: Arnott's/RAFI 10 year 'expected' returns

This is one of the most insightful posts I've read on Bogleheads. You've convinced me that assigning numerical values to expected risks and returns almost always gives the misleading impression that finance more precise than it really is. Take Bernstein's expected returns chart for example. What he...
by stlutz
Tue Aug 05, 2014 2:44 am
 
Forum: Investing - Theory, News & General
Topic: Arnott's/RAFI 10 year 'expected' returns
Replies: 78
Views: 4701

Re: Arnott's/RAFI 10 year 'expected' returns

The Houge et al use of average annual returns instead of annualized returns is ridiculous. It's basically a way of counting uncompensated volatility as performance. That's a good point—I hadn't noticed that before. So, if I use the data from Table 3 in the paper and calculate a CAGR, I get 9.6% for...
by stlutz
Tue Aug 05, 2014 2:37 am
 
Forum: Investing - Theory, News & General
Topic: Arnott's/RAFI 10 year 'expected' returns
Replies: 78
Views: 4701

Re: REITS-worth the time to add 10% into portfolio

REITs are about 3-4% of the total US market (which you already have). What makes REITs so special that you would overweight them over Materials or Utilities (which are a similarly small part of the market)?
by stlutz
Tue Aug 05, 2014 12:32 am
 
Forum: Investing - Help with Personal Investments
Topic: REITS-worth the time to add 10% into portfolio
Replies: 33
Views: 2655

Re: new IRA with vanguard

The target retirement funds do not have admiral share classes, unfortunately.

Otherwise, you've identified the positives and negatives of using a TR fund vs. individual funds. Either way, you'll do better than most investors out there.
by stlutz
Mon Aug 04, 2014 11:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: new IRA with vanguard
Replies: 7
Views: 534

Re: not all small value funds are created equal

steve_14: Fama and French note that firms with negative earnings have historically had higher expected returns than firms with positive earnings (see the reference in their cross-section of expected returns paper). So in fact, including their negative earnings in the price/earnings ratio could be m...
by stlutz
Mon Aug 04, 2014 7:18 pm
 
Forum: Investing - Theory, News & General
Topic: not all small value funds are created equal
Replies: 48
Views: 3499

Re: Opinions on Denver Bond program

3) interest is held until maturity. I am not smart enough to do the math on this but the NPV loss on those interest payments is such that I think it brings down the effective coupon rate of the bonds by some significant amount (versus a normal bond where you are paid out along the way) I don't thin...
by stlutz
Sun Aug 03, 2014 10:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Opinions on Denver Bond program
Replies: 15
Views: 946

Re: Advice on transferring funds to Vanguard

1) Investing the money in a target date fund is the best idea since it would be in a taxable account. (90% stocks, 10% bonds) or are there other Vanguard funds that would be a better fit? If you are comfortable with a 90/10 allocation, then target date 2050 is a fine choice. The question to ask you...
by stlutz
Sun Aug 03, 2014 10:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice on transferring funds to Vanguard
Replies: 5
Views: 778

Re: Suze Orman - Doesn't Like Target Date Funds

In terms of the retail arena, VG is about the only company one should do target date/balanced funds with. In 401Ks, there seem to be better options in some cases. The non-VG target date funds in my 401K charge .12%. Yes, Target Date funds do change allocations periodically. But they probably do it l...
by stlutz
Sun Aug 03, 2014 10:18 pm
 
Forum: Investing - Theory, News & General
Topic: Suze Orman - Doesn't Like Target Date Funds
Replies: 26
Views: 3692

Re: Opinions on Denver Bond program

Denver Post article on the program.

http://www.denverpost.com/politics/ci_2 ... -raise-12m

Note that that this is the fifth time the city has done this since 1990, so not new.
by stlutz
Sun Aug 03, 2014 8:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Opinions on Denver Bond program
Replies: 15
Views: 946

Re: Barclay Arrival credit card

One thing to keep in mind is that you can only apply a credit against an expense once. So, if you buy a $300 airline ticket, and you apply $25 credit against it, you can't apply any future credits against that airline ticket.
by stlutz
Sun Aug 03, 2014 5:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Barclay Arrival credit card
Replies: 19
Views: 1285

Re: Source for ETF bid-ask spread

You can just type "etf.com/" and then the ticker symbol. e.g.: etf.com/vti

Fidelity also has 30 day averages if you click through to "research" when you ask for a quote on a particular ticker.
by stlutz
Sun Aug 03, 2014 3:28 pm
 
Forum: Investing - Theory, News & General
Topic: Source for ETF bid-ask spread
Replies: 10
Views: 448

Re: Source for ETF bid-ask spread

etf.com has 60 day averages for all etfs.
by stlutz
Sun Aug 03, 2014 3:05 pm
 
Forum: Investing - Theory, News & General
Topic: Source for ETF bid-ask spread
Replies: 10
Views: 448

Re: Reliability of stock data prior to 1939?

One major difference with the Russell data is that the standard deviation of the returns for both large and small "value" stocks is lower than the SD for both large and small "growth" stocks. The CRSP data for 1927-1978 shows the the opposite SD result. This is undoubtedly relat...
by stlutz
Sun Aug 03, 2014 12:26 pm
 
Forum: Investing - Theory, News & General
Topic: Reliability of stock data prior to 1939?
Replies: 14
Views: 868

Re: Lower Expense Ratio vs. Better Diversification

The 4 fund mix you came up with will work fine. I wouldn't worry about not having a commodity fund or extra REITs. However, it's also worth considering the difference between the TR fund and your 4 fund in dollar terms. How much does the extra .17% cost you? Based on that, you can make a decision if...
by stlutz
Sat Aug 02, 2014 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lower Expense Ratio vs. Better Diversification
Replies: 9
Views: 878

Re: MOM faltering? [Momentum]

Nice post thx1138. A few thoughts: One of my big concerns with these discussions is the lack of probabilistic thinking. Around here we tend to have one side that says that an anomaly can never, ever, ever,never, never, never, ever be expected to persist and another side that insists that because it ...
by stlutz
Fri Aug 01, 2014 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 94
Views: 6172

Re: Dave Ramsey still defending 12% and still angry at "nerd

I think he could get a lot more love around here if he would just say that "Any good smallcap value mutual fund will return 12% per year". :twisted: In all seriousness, watching someone go on a big rant claiming that if an investment starts out with value of $1000, drops to $500 the next y...
by stlutz
Thu Jul 31, 2014 9:46 pm
 
Forum: Investing - Theory, News & General
Topic: Dave Ramsey still defending 12% and still angry at "nerds"
Replies: 194
Views: 22536

Re: Fidelity and Select Ishares ETFs in Fidelity Roth

Do you have an existing account at Fidelity, or are you planing to start brand new with $200/month? That influences what the available options would be.
by stlutz
Thu Jul 31, 2014 9:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fidelity and Select Ishares ETFs in Fidelity Roth
Replies: 6
Views: 598

Re: Which bond ETFs do you have?

Link? There is sometimes a disagreement between how the market is valuing a particular portfolio of bonds at any given second vs. how those who calculate a mutual fund's NAV at the end of day think the value should be. With less liquid securities that often don't trade every day (e.g. most muni bon...
by stlutz
Thu Jul 31, 2014 12:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Which bond ETFs do you have?
Replies: 16
Views: 1570

Re: 401k Advice

60/40 between the Blackrock index fund and the GNMA bond fund would be the lowest cost option and not an unreasonable allocation.
by stlutz
Wed Jul 30, 2014 11:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k Advice
Replies: 12
Views: 700

Re: Fidelity Charitable Fund Questions

I trust that a copy and paste from their document is okay: The administrative fee of 0.60% is charged to the investment pool on a daily basis and affects the net asset value of the Giving Account pool holdings. Giving Accounts for which the 0.60% administrative fee is less than $100* for a given fis...
by stlutz
Wed Jul 30, 2014 11:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fidelity Charitable Fund Questions
Replies: 31
Views: 1601

Re: MOM faltering? [Momentum]

Larry-- My intent was not to be antagonistic. As you know from other threads, I think it's great that one can now invest in a momentum ETF for less than 20 basis points (which for me at least is the max I'll pay for anything nowadays). Also, momentum backtests are good ones because there are fewer d...
by stlutz
Wed Jul 30, 2014 11:48 pm
 
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 94
Views: 6172
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