Search found 997 matches

by AzRunner
Sat Aug 29, 2020 6:09 pm
Forum: Investing - Theory, News & General
Topic: Impact of New Fed Policy announced Today (Aug 28,2020)
Replies: 14
Views: 2548

Re: Impact of New Fed Policy announced Today (Aug 28,2020)

I am also interested in reading what other Bogleheads think about the new Longer-Run Goals and Monetary Policy Strategy issued by the Fed. Here is a link to the Jerome Powell's speech: https://www.federalreserve.gov/newsevents/speech/powell20200827a.htm Briefly, it says that full employment is now the preeminent goal along 2% inflation. The Fed expect periods of time when inflation is more than 2% to offset periods when it is less than 2%. The goal is to always obtain the maximum employment for the economy. Reading Powell's speech, it all sounds good, but many of us have lived through times of high inflation and we know that it is not pleasant. Perhaps one positive is that interest rates may rise so that small savers are not penalized by th...
by AzRunner
Wed Jul 15, 2020 5:42 pm
Forum: Investing - Theory, News & General
Topic: Behavior of TIPS versus Treasuries in March
Replies: 141
Views: 9271

Re: Behavior of TIPS versus Treasuries in March

From what I have read, Treasuries are far more liquid than TIPS. When there is a flight to safety, the most liquid product in a given domain will dominant. As you say, things corrected soon enough, so that was probably a good buying opportunity for TIPS in retrospect.
by AzRunner
Wed Mar 18, 2020 6:40 pm
Forum: Investing - Theory, News & General
Topic: VTMGX (Developed Markets International Index) not showing in M*
Replies: 3
Views: 392

Re: VTMGX (Developed Markets International Index) not showing in M*

Yes, VEA works fine. Thanks for the suggestion.

Now, I see the problem is that the X-Ray tool is a premium option, not available to library users. I guess it was too good to be true.
by AzRunner
Wed Mar 18, 2020 6:33 pm
Forum: Investing - Theory, News & General
Topic: VTMGX (Developed Markets International Index) not showing in M*
Replies: 3
Views: 392

Re: VTMGX (Developed Markets International Index) not showing in M*

I used the Market Watch mutual fund comparison tool and VEA looks like a good proxy. I'll put it into M* X-Ray tool and see if it provides a price. Thanks I'll report back.
by AzRunner
Tue Mar 17, 2020 10:38 pm
Forum: Investing - Theory, News & General
Topic: VTMGX (Developed Markets International Index) not showing in M*
Replies: 3
Views: 392

VTMGX (Developed Markets International Index) not showing in M*

I found that I can access the Morningstar (M*) portfolio tools through my Phoenix library account. I updated my portfolio but I see that the tool is not providing a price for the Vanguard Developed Markets International Index (VTMGX). It seems unusual. As far as I can see, M* support for the Portfolio page consists of a number of FAQs. I don't see a way to raise the issue with M*. Anyone else see this problem? Perhaps I need a good proxy for VTMGX so that an X-Ray of my portfolio will not omit this holding. Any suggestions for another fund that is similar that shows up in the M* portfolio tool? Thanks.
by AzRunner
Sun Dec 08, 2019 6:27 pm
Forum: Investing - Theory, News & General
Topic: Anyone switching to actively managed bonds?
Replies: 8
Views: 842

Re: Anyone switching to actively managed bonds?

I have consistently used two actively managed bond fund, Vg Intermediate Term Investment Grade and Vg Short Term Investment Grade. With Vg, you really do not pay very much for the active management which makes more sense to me than fundamentally weighted debt. Also, if I want US Treasuries, I can buy myself.
by AzRunner
Thu Sep 12, 2019 6:32 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard "new" checking to replace Advantage Accounts is not really checking
Replies: 27
Views: 6480

Re: Vanguard "new" checking to replace Advantage Accounts is not really checking

The routing number on the Vanguard Brokerage Service Account is associated with the Bank of New York Mellon. My account number on the checks is not a familiar number, but Vanguard must have a mapping from that number to my Vanguard account that I'm using to cover the checks. I haven't written a check yet, but I think they will function like any other check except that Vanguard is no longer offering any extra banking features. And, of course, Vanguard requests that the amount be at least $250. There are some instances where you might want to just write a check on your Money Market account instead of first transferring the money to a bank and then writing a check. That's the reason I signed up for the new checks. I have no intention of carryi...
by AzRunner
Fri Mar 01, 2019 12:31 pm
Forum: Investing - Theory, News & General
Topic: Vanguard is Discontinuing their VanguardAdvantage Accounts
Replies: 645
Views: 93389

Vanguard to discontinue Advantage Checking

[merged into existing topic - moderator prudent]

I received an email from Vanguard saying that they were going to discontinue Vanguard Advantage Checking as of 7/31/2019. Vanguard is vague as to why the service is being discontinued. I've been using it for years and have been happy with it. I open this topic for anyone who finds additional information concerning why Vanguard has decided to drop this service.
by AzRunner
Fri Feb 16, 2018 9:42 pm
Forum: Investing - Theory, News & General
Topic: A time to EVALUATE your jitters
Replies: 678
Views: 632931

Re: A time to EVALUATE your jitters

I haven't been to Bogleheads in a number of months, so I thoroughly enjoyed nisiprius' post. I guess I've lived through too many market drops to get concerned about a 10% drop, even if it is takes place in a week or so. Nisiprius' post is important because your reaction to a market correction is so much more important than any risk test that any investment firm can offer to determine your risk tolerance. The real world is the real test.
by AzRunner
Fri Sep 02, 2016 6:18 pm
Forum: Investing - Theory, News & General
Topic: "Are Index Funds Eating the World?"
Replies: 44
Views: 9094

AllianceBernstein, Karl Marx, and Index Investing

Good article by John Rekenthaler. http://news.morningstar.com/articlenet/article.aspx?id=768078 "Aiming High Of the paper itself, I am less envious. It certainly is ambitious. Topics include Marxist principles of social planning; Correlations of global stock prices; An 18-page analysis of the economics of mining companies; Funding shortfalls in defined-benefit plans; The role of fiduciaries; Environmental, social, and governance (ESG) investing; The average holding period for mutual fund shareholders. The authors' inventiveness extends to their citations; in one passage, they quote Marx, then the Old Testament (Genesis), then the Etymologies of St. Isidore of Seville. (Sadly, they neglected Milton, who inspired a genius yet to be born....
by AzRunner
Thu Dec 03, 2015 11:48 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard TurboTax - Not Available 2015?
Replies: 327
Views: 64524

Vanguard dropping TurboTax discount

I received an e-mail today from TurboTax saying that the discount that Vanguard provided to use TurboTax was being discounted, starting with the 2015 tax season. I called Vanguard to verify and they said it was a cost cutting move. I suspect the cost to Vanguard was climbing higher each year. A little disappointing. I'll have to decide if I want to stick with TurboTax or go a different route.

Norm
by AzRunner
Fri Sep 25, 2015 4:16 pm
Forum: Investing - Theory, News & General
Topic: Solutions for Retirement Funding & Post-Retirement Payout
Replies: 74
Views: 8095

Re: Solutions for Retirement Funding & Post-Retirement Payout

BobK, Very interesting. Thank you. So, what is a reverse mortgage? Maybe it is an imperfect, fee-laden, term certain SPIA? I pledge you my house. You agree to pay me some amount (for life?). If I die late, you lose. If I die early, there is still a residual value. I doubt a reverse mortgage is ever a better value than "Sell the house and rent". And, if you need the wrinkles, buy an SPIA or life insurance. By this line of thinking, it seems to me, a reverse mortgage really is a predatory play on people's behavioral investing instincts. L. In general I agree with you. There are cases where a person or couple want to continue to live in their existing house, rather than sell, and have significant equity tied up in it. Reverse mortga...
by AzRunner
Sat Jun 13, 2015 1:02 pm
Forum: Investing - Theory, News & General
Topic: M* How to Fine Tune Your Investment Mix in Retirement
Replies: 7
Views: 1999

Re: M* How to Fine Tune Your Investment Mix in Retirement

Thanks for the discussion to date.

For many Bogleheads, we are primarily buy and hold with some re-balancing as required. Early in retirement, I primarily sell shares to meet living expenses, looking at my overall equity allocation and my long term capital gain exposure of the various options I have to make a decision on what to sell.

Getting back to the original question, does anyone support Christine Benz' view that reducing your portfolio tilt as one enters retirement is sensible vs. the modern portfolio view of making your equity decision and then varying your risk exposure via your % equity exposure?

Norm
by AzRunner
Fri Jun 12, 2015 10:08 pm
Forum: Investing - Theory, News & General
Topic: M* How to Fine Tune Your Investment Mix in Retirement
Replies: 7
Views: 1999

M* How to Fine Tune Your Investment Mix in Retirement

In this article, a discussion between Christine Benz and Jason Stipp, a point they make, in addition to lessening your equity allocation, they suggest: "So, [for example,] there's the small-cap value effect, which has been well documented in a lot of literature, showing that small-cap value stocks outperform over long periods of time. As your time horizon shortens, you may not have time to benefit from that small-cap value effect if, in fact, it occurs again in the future." Here is a link to the article: http://www.morningstar.com/cover/videocenter.aspx?id=700077 The video is transcribed below the video screen, so you can probably read the article faster than listening. I'm thinking that as long as you are not concerned about trac...
by AzRunner
Wed Jul 30, 2014 6:02 pm
Forum: Investing - Theory, News & General
Topic: Expected Future Yield Curve
Replies: 22
Views: 2590

Re: Expected Future Yield Curve

I'd say "A". If things play out as viewed from today, then yes, you will achieve a greater return, if you sell in two years, but then you would have to decide where to invest the money five years earlier than if you held until maturity. The logic in "B" does not make sense. Borrowing for seven years is different than borrowing for five years. In two years the seven year bond will be a five year bond, as explained in "A". As long as you are happy with the yield of the fixed income instrument, I would buy the bond whose maturity does not exceed your anticipated holding period. Then you have a reasonable chance of being happy with your investment for the entire holding period. For this, you can treat the bond fund...
by AzRunner
Tue Jul 22, 2014 5:55 pm
Forum: Investing - Theory, News & General
Topic: New 10-Year TIPS Auction July 24 2014
Replies: 17
Views: 2492

Re: New 10-Year TIPS Auction July 24 2014

I am in the process of building a portfolio of 20 issues of 10-year TIPS, with roughly equal par amounts in each. So I buy some in every auction. Some rates are good, some rates are negative. Its just like dollar cost averaging. I find it interesting that bogleheads who (as a group) consistently advise against market timing in the stock market, consider market timing with TIPS purchases. Rates at this auction might not be the best. They might be better if you wait and buy in the secondary market in a few months. Isn't that market timing? Am I missing something here?? I think fixed income should always be looked at in relation to what else can be bought at the same time. Personally I do not find the yield on TIPS to be attractive. The one t...
by AzRunner
Fri Apr 11, 2014 3:35 pm
Forum: Investing - Theory, News & General
Topic: Tax Managed International
Replies: 32
Views: 4586

Re: Tax Managed International

I spoke with my Vanguard representative today. Since Vg moved to the new index benchmark providers about a year and a half ago, VTMGX has been following the FTSE Developed Markets Index. We now formally lose the potential to deviate from the index, but Vanguard is keen about the linked VEA ETF. In general, ETFs doomed the tax managed fund model at Vanguard, IMHO. It is far more straightforward to have an ETF based on an index versus breaking ground to try to base an ETF on an actively managed tax managed strategy. With the ETF linked to the fund, it does have the potential to sell off higher priced stock in the creation/redemption process, so that may help our tax efficiency, although it is unclear how much benefit that provides versus the ...
by AzRunner
Thu Apr 10, 2014 10:08 pm
Forum: Investing - Theory, News & General
Topic: A Bubble in Value Stocks?
Replies: 31
Views: 4520

Re: A Bubble in Value Stocks?

Thanks for the chart. It's always good to look at the flow of money when you start to wonder about these things.
by AzRunner
Thu Apr 10, 2014 10:03 pm
Forum: Investing - Theory, News & General
Topic: Tax Managed International
Replies: 32
Views: 4586

Re: Tax Managed International

Rob, jsl11,

Thanks for carrying the water on this issue. I agree with both of you that the fund is no longer what we chose to invest in.

Both of the funds had billions in assets, around $23 billion in Tax Managed and 16.5 in Developed Markets.

I'm thinking that Vanguard just decided that it wanted out of the tax managed international space. I wonder if a similar fate awaits tax managed small cap, another fund I hold.

Norm
by AzRunner
Wed Apr 09, 2014 11:21 pm
Forum: Investing - Theory, News & General
Topic: Tax Managed International
Replies: 32
Views: 4586

Tax Managed International

I was a happy owner of Vanguard Tax Managed International. It has merged with Vanguard Developed Markets (outside North America), yet the fund symbol is still VTMGX, so I'm assuming that its performance was better than the Developed Markets' fund, even though the Tax Managed strategy is being abandoned. Going forward the Developed Market FTSE index will be followed. I guess with ETFs, the International Tax Managed Strategy was viewed to be less viable than the Developed Markets that has an ETF share class. How do other owners of Tax Managed International feel about the change?

Norm
by AzRunner
Sat Mar 15, 2014 9:59 pm
Forum: Investing - Theory, News & General
Topic: The Arithmetic of Investment Expenses
Replies: 3
Views: 934

Re: The Arithmetic of Investment Expenses

Thanks for posting this article. The article is a worthwhile read and the math is not a major hurdle if you are somewhat comfortable with numbers. Even though there is a slim chance that investing in an actively managed fund with a high expense ratio may end up with higher terminal wealth than a low cost index fund, the larger take-away is that picking that actively managed fund in advance is very difficult and really not worth the effort with so many low cost passive investment options.

Norm
by AzRunner
Wed Jan 01, 2014 10:51 pm
Forum: Investing - Theory, News & General
Topic: Morningstar X-ray
Replies: 22
Views: 4093

Re: Morningstar X-ray

I just went into the M* tools via TRowePrice and updated my portfolio. All is good there again. They have reformatted the site, but I think everything that was there, is still there. There was nothing that I used before that has changed. Perhaps others will note whether there is any increased functionality. My primary use of the site is for the equity style box along with the equity/bond/cash allocations, along with the % invested internationally. I appreciate being able to use these tools at the TRowePrice site, even though I do not own any TRowePrice funds.

Norm
by AzRunner
Sun Oct 13, 2013 5:58 pm
Forum: Investing - Theory, News & General
Topic: What is Adequate Compensation for Extending Maturity?
Replies: 22
Views: 2268

Re: What is Adequate Compensation for Extending Maturity?

You should be adequately compensated for the additional interest rate risk for going out longer in duration. My recollection is that Larry's 20 basis point/year recommendation was based on empirical evidence on the risk/reward trade off.

In addition, you need to look at your time horizon. Your duration should be no longer than your holding period.

Norm
by AzRunner
Sun Oct 13, 2013 4:56 pm
Forum: Personal Consumer Issues
Topic: best way to store your gold & silver
Replies: 23
Views: 3430

Re: best way to store your gold & silver

I've sold all my coins over the years, but keeping them in a safe or safe deposit box works fine. Of course, you can buy an ETF and bypass the storage issue completely.

With the relatively high capital gains on commodities, it may be better to hold these in a tax advantaged account, if precious medals or coins are part of your portfolio.

Norm
by AzRunner
Thu Aug 01, 2013 11:01 pm
Forum: Investing - Theory, News & General
Topic: Cash is Best Asset Class for Retirees?
Replies: 27
Views: 4439

Re: Cash is Best Asset Class for Retirees?

A take away from this article is that as the stock market continues to climb, as you rebalance, you might just increase your cash holdings instead of buying bonds. I'm looking at that right now as my equities approach the upper bound of my AA. Normally I would add to my short or intermediate term bond funds, but perhaps I should just build up my cash balance. I am a retiree.

Norm
by AzRunner
Sat Jul 20, 2013 8:06 pm
Forum: Investing - Theory, News & General
Topic: M* Portfolio Manager through T Rowe Price
Replies: 2
Views: 969

Re: M* Portfolio Manager through T Rowe Price

livesoft,

Thanks. I definitely agree on the price.

Norm
by AzRunner
Sat Jul 20, 2013 5:36 pm
Forum: Investing - Theory, News & General
Topic: M* Portfolio Manager through T Rowe Price
Replies: 2
Views: 969

M* Portfolio Manager through T Rowe Price

Is anyone else having problems bringing up the Morningstar Portfolio Manager through the T Rowe Price site? I'm just getting a blue screen at the site, but everything else at T Rowe Price seems to work. Maybe they are having a temporary issue, but I thought I'd check. I haven't used the tool recently, but I do like it and it is a good way for me to track my asset allocation in their nine-box grid.

Norm
by AzRunner
Fri Dec 14, 2012 11:17 pm
Forum: Investing - Theory, News & General
Topic: CD Ladder vs. Short Term Investment Grade Fund in Roth IRA
Replies: 10
Views: 2287

Re: CD Ladder vs. Short Term Investment Grade Fund in Roth I

I am also interested in potentially buying CDs through Vanguard Brokerage. I see them as an alternative to the low rates on Treasuries. My fixed income plan calls for Short term and Intermediate term bonds funds and TIPS or Treasuries, each holding between 25-50%. My TIPS are just about at 25% and nothing attractive on the horizon. So, possibly CDs to fill in the ultra-safe holding.

I don't see buying CDs from various banks for the PITA issues mentioned above. All my fixed income is with Vanguard in Rollover IRAs and its a lot more convenient to just to continue to work with them.

Norm
by AzRunner
Sun Dec 09, 2012 10:56 pm
Forum: Investing - Theory, News & General
Topic: Should we really invest in short term bonds now?
Replies: 36
Views: 4729

Re: Should we really invest in short term bonds now?

As long as your holding period is truly at least as long as your fund's duration, and you don't panic if interest rates rise and your bond's principal decreases, then you are right, just stay the course. Bernstein has been advocating a very short duration on bonds for a number of years. Eventually interest rates will rise and he will be right. Shifting to a short duration is clearly a market timing move based on the fact that interest rates can not go below zero (nominal) and the lower the interest rate, the better chance that they will increase in the future (timing always problematic). This is a better strategy than holding longer term bonds, watching them drop in price with an interest rate increase and then selling them. OTOH, anticipat...
by AzRunner
Tue Oct 02, 2012 1:32 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Changing Indexes
Replies: 5
Views: 2332

Re: Vanguard Changing Indexes

ChicagoBooth has been a Finance leader and their CRSP indices, coming from the University of Chicago's Center for Research in Security Prices should be sound, although the proof is in the pudding. It's good that Vanguard is continuing to look to lower costs to their investors.

Norm
by AzRunner
Sun Sep 23, 2012 11:16 pm
Forum: Investing - Theory, News & General
Topic: Any reason to go outside Vanguard?
Replies: 15
Views: 2443

Re: Any reason to go outside Vanguard?

Nathan Drake wrote:Tilters believe the small cap value premiums can't be captured at vanguard.
Even modest tilters do use the Vanguard Smallcap Value Index fund. If you don't like the loading factors, just buy more of it. If you look at expense ratio, tracking error, simplicity of keeping all your funds at Vanguard, using VISVX still works.

If you really want to use international small-cap value and emerging markets value, then you are going to have to go elsewhere. But, others feel you can get your small-cap tilt domestically and invest in more mainline international funds to get your international exposure.

Norm
by AzRunner
Thu Aug 09, 2012 10:48 pm
Forum: Investing - Theory, News & General
Topic: Your Best One Line of Wisdom
Replies: 238
Views: 24026

Re: Your Best One Line of Wisdom

Costs matter.
by AzRunner
Tue Jul 17, 2012 2:27 pm
Forum: Investing - Theory, News & General
Topic: forecasting the equity risk premium
Replies: 60
Views: 4850

Re: forecasting the equity risk premium

Rodc Now that you have done all that, somewhere well down the list of priorities you finally get to asset allocation. If you have done the above and you pick any allocation between, oh, say 40% to 70% stocks, rest bonds, stick to it for years, later adjust as you see how your investing, career and family, etc. turn out you will be fine. Only in hindsight will you know what you should have done. But people hate that advice. It sounds like giving up. It does not sell. It does not comfort people who want to know exactly what to do. I used to be like that. Then I got wiser as I got older. I probably am in the top 1% of folks who worked the math, I had access to vast databases of information, fancy mathematical software packages. But in the end...
by AzRunner
Thu Jul 12, 2012 10:01 pm
Forum: Investing - Theory, News & General
Topic: Consumption Strikes Back
Replies: 0
Views: 591

Consumption Strikes Back

This link has an overview of the paper, Consumption Strikes Back? Measuring Long-Run Risk , by Hansen, Heaton and Li. http://www.chicagobooth.edu/capideas/may-2012/heaton.aspx Between the article and the video, you get an idea of the paper, which looks pretty meaty. http://cowles.econ.yale.edu/conferences/koopmans/tck08/hansen1.pdf From the ChicagoBooth article But by figuring out how to accurately measure long-run risk, Hansen, Heaton, and Li have made it possible for fundamental economic variables to once again play a key role in determining asset prices. That's the story behind the paper's title. "What we're saying is that using fundamentals like consumption to measure risk can actually work if you look at a longer horizon," sa...
by AzRunner
Fri Jul 06, 2012 11:26 pm
Forum: Investing - Theory, News & General
Topic: Investment Grade versus Treasury
Replies: 24
Views: 2704

Re: Investment Grade versus Treasury

I use both funds in addition to individual TIPS. As mrpotatoheadsays , if an individual investment grade corporate starts to falter and it is rated below investment grade, these funds will sell, but they will take a loss on those bonds. My view is that the bond market is extremely efficient. Risk and reward are in play at all times. It really depends on how you want to go about investing. Many Bogleheads want to take all their risk with equities and no risk with their fixed income. In my case, with a 40/60 equity/fixed income allocation, I don't mind reaching for additional yield with the Vanguard investment grade bond funds (Short and Intermediate Term). I think that the difference in yield between Treasuries and Investment Grade makes thi...
by AzRunner
Fri Jul 06, 2012 11:13 pm
Forum: Investing - Theory, News & General
Topic: Ways to View Break-even Inflation Rates
Replies: 21
Views: 4598

Re: Ways to View Break-even Inflation Rates

Thanks. Great post.

Norm
by AzRunner
Sun Jun 17, 2012 3:00 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Voice Verification
Replies: 21
Views: 4401

Re: Vanguard Voice Verification

TheGreyingDuke wrote:I too have used it to avoid the need for medallion guarantees, very useful for when we are out of the country and it is near impossible to get such a guarantee.

I have found that it gives some false negatives, especially early in the morning. I often need to give three samples before it OKs me.
How long have you used the service? I just learned about it a few days ago.

Norm
by AzRunner
Thu Jun 14, 2012 11:15 pm
Forum: Investing - Theory, News & General
Topic: POLL: Has your investment course changed in 15 years?
Replies: 52
Views: 4615

Re: POLL: Has your investment course changed in 15 years?

I was core and explore 15 years ago. As actively managed funds disappointed they were sold and the appropriate index fund was purchased. Eventually I abandoned actively managed equity funds.

Norm
by AzRunner
Thu Jun 14, 2012 10:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Voice Verification
Replies: 21
Views: 4401

Re: Vanguard Voice Verification

HueyLD wrote:Norm,

Have you actually used this voice verification system to your satisfaction? My main concern is that voice is not as unique as other biometrics such as "iris" or "fingerprints." For example, my voice may sound completely different when I have a cold/flu.
Just signed up today. I haven't tried it yet. If you have a cold/flu and use it, you may get a false negative. I imagine they have a way of alternative verification, but you probably revert back to what you can do with the old system over the phone.

Norm
by AzRunner
Thu Jun 14, 2012 3:59 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Voice Verification
Replies: 21
Views: 4401

Vanguard Voice Verification

I signed up for the Vanguard Voice Verification for telephone transactions. This article may or may not be the specific software that Vanguard is using, but it provides some interesting background on the capability.

http://www.authentify.com/solutions/voi ... trics.html
A voice biometric is a numerical model of the sound, pattern and rhythm of an individual’s voice. A voice biometric or "voice print," is as unique to an individual as a finger or palm print. Any Authentify application that employs a voice channel during the Authentify session is able to add voice biometric authentication to the process for even higher levels of authentication and security.
Norm
by AzRunner
Sat Jun 09, 2012 7:35 pm
Forum: Investing - Theory, News & General
Topic: Not so Expert
Replies: 6
Views: 986

Re: Not so Expert

Good article.
Perhaps the financial-advice industry survives because the idea that the future is unknowable is just unsatisfying. Some forecast—any forecast—is therefore comforting. Mr Tetlock suggests that “we believe in experts in the same way that our ancestors believe in oracles; we want to believe in a controllable world and we have a flawed understanding of the laws of chance.”
Norm
by AzRunner
Mon Jun 04, 2012 10:43 pm
Forum: Investing - Theory, News & General
Topic: The $100 Billion Oxymoron - William Bernstein
Replies: 27
Views: 4611

Re: The $100 Billion Oxymoron - William Bernstein

Good article. William Bernstein rarely disappoints.
How many Facebook purchasers do you think have exerted the considerable effort of estimating Facebook's future advertising revenues? Using the word "investor" to describe these folks is akin to calling Tony Soprano a Catholic. Joe Nocera got closest to the truth when he opined, "Virtually everyone who bought Facebook on that first day was making a one-day, get-rich-quick calculation. It didn't work out. Too bad." (To which I would add this silver lining: That the speculating public will still blindly overpay for growth and glamour strongly suggests that the value premium is yet alive and well.)
Norm
by AzRunner
Wed Apr 18, 2012 11:07 pm
Forum: Investing - Theory, News & General
Topic: I still don't get Vanguard's NAV pricing
Replies: 5
Views: 1432

Re: I still don't get Vanguard's NAV pricing

natureexplorer

The NAV is a mechanical calculation that just takes the aggregate price/share * number of shares of all the funds holdings. It is the market that creates a premium or a discount based on supply and demand. If the premium or discount becomes too large, designated market participants will step in to create or buy up units of the ETF to bring the ETF premium/discount back to zero. That is the arbitrage opportunity that they seek to exploit.

Norm
by AzRunner
Sun Apr 08, 2012 11:40 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Value - What Funds & How Much do you tilt?
Replies: 156
Views: 11372

Re: Small Cap Value - What Funds & How Much do you tilt?

Here is our portfolio in the M* grid:

Code: Select all

21--17--14 / 52
07--07--04 / 18
14--10--05 / 29
--------------
42--34--23
So we have a modest tilt towards small-cap and to value.

Basically I buy in to the arguments made by Fama-French, Larry Swedroe and Rick Ferri on the benefits of the risk premiums associated with small and value over the long term.

I use Vanguard Smallcap Value primarily to obtain the tilt, but due to legacy holdings in Vg 500 Index, I also hold Vg Value Index and Vg Tax Managed Smallcap.

Norm
by AzRunner
Sun Apr 01, 2012 8:33 pm
Forum: Investing - Theory, News & General
Topic: What if you pay more than a billion dollars in fees?
Replies: 15
Views: 1839

Re: What if you pay more than a billion dollars in fees?

Ironically, Vanguard Headquarters in Valley Forge, PA is their counter example that the state has decided to spurn.

Norm
by AzRunner
Sun Apr 01, 2012 1:59 am
Forum: Investing - Theory, News & General
Topic: How Friends Help Friends Become Indexers
Replies: 22
Views: 3049

Re: How Friends Help Friends Become Indexers

I agree with Jacobkg; friends that are new to investing are quite open to indexing. Once someone has been investing in actively managed funds, it is difficult to move them to indexing. In the past, I've tried with close friends, but now I just do my own things. If someone asks, I tell them I use low cost index funds, but I don't try to convince others unless they are newbies.

Norm
by AzRunner
Fri Mar 30, 2012 10:21 pm
Forum: Investing - Theory, News & General
Topic: What is your target allocation to TIPS? {Poll}
Replies: 83
Views: 16909

Re: What is your target allocation to TIPS? {Poll}

My target allocation to TIPS is 50%, but I am at 25% since they have been bid up so high.

Norm