I guess I have to realize I can dump on presentations and interpretations in uncomfortable ways, always to the benefit of the readers.
Good luck to all, and if that means me learning a lesson or two so be it.
Search found 71 matches
- Sun Dec 23, 2012 7:18 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
- Sun Dec 23, 2012 6:56 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
Dave
Are you still with me?
- Sun Dec 23, 2012 6:14 pm
- Forum: Personal Investments
- Topic: portfolio feedback, please
- Replies: 8
- Views: 908
^
A bit too tilted toward capital assets for my comfort.
- Sun Dec 23, 2012 6:01 pm
- Forum: Investing - Theory, News & General
- Topic: Very specific question on international allocation
- Replies: 12
- Views: 1411
Art
[Off-topic comment removed by admin LadyGeek]
- Sun Dec 23, 2012 5:36 pm
- Forum: Personal Investments
- Topic: Your International vs. U.S. Stock Allocation?
- Replies: 73
- Views: 12644
Art
[off-topic comment removed by admin LadyGeek]
- Sun Dec 23, 2012 5:06 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
Dave
The portfolio return is the sum of the weighted returns of the individual classes.
The returns of the individual classes are determined at the end of the period, after each class SD has been accounted for (rolled up into the class return)...and consequently rolled up into the portfolio return. IOW, for return purposes, the SD has already been accounted for and is thus irrelevant...that's why all the interactive stuff doesn't matter when calculating portfolio return.
I think everything you stated after your denial of how portfolio return is determined is basically true, if you step back and look at everything after the fact you'll see what I mean.
Gratis.
The returns of the individual classes are determined at the end of the period, after each class SD has been accounted for (rolled up into the class return)...and consequently rolled up into the portfolio return. IOW, for return purposes, the SD has already been accounted for and is thus irrelevant...that's why all the interactive stuff doesn't matter when calculating portfolio return.
I think everything you stated after your denial of how portfolio return is determined is basically true, if you step back and look at everything after the fact you'll see what I mean.
Gratis.
- Sun Dec 23, 2012 4:39 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
Re: POLL: How much re-balancing bonus do you expect?
Doing a full backward-looking mean-variance optimization the only inputs are the returns and the weights for each investment. The interaction among the classes/investments is derived from the returns.
In a roundabout way you can see why backward-looking analyses have significant limitations.
That's not to say crystal balls don't have limitations, but...
In a roundabout way you can see why backward-looking analyses have significant limitations.
That's not to say crystal balls don't have limitations, but...
- Sun Dec 23, 2012 3:58 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
Re: POLL: How much re-balancing bonus do you expect?
The ideal is to build a portfolio which will deliver, say, 8% per year with zero volatility. Then your planning is straightforward.
In the real world the portfolio SD is going to cause the portfolio return to fall below 8%, so we try to minimize deviations from 8% in order to keep our plan on track.
But there's no way a portfolio made up of a 6% class and an 8% class is going to have higher portfolio return than a portfolio made up of only the 8% class. I'm looking backward here.
That said, it is possible the 6/8 combo has better risk-adjusted return but it will never equal the 8% performance of the single class portfolio.
In the real world the portfolio SD is going to cause the portfolio return to fall below 8%, so we try to minimize deviations from 8% in order to keep our plan on track.
But there's no way a portfolio made up of a 6% class and an 8% class is going to have higher portfolio return than a portfolio made up of only the 8% class. I'm looking backward here.
That said, it is possible the 6/8 combo has better risk-adjusted return but it will never equal the 8% performance of the single class portfolio.
- Sun Dec 23, 2012 3:38 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
Re: POLL: How much re-balancing bonus do you expect?
I agree with GrayFox.
- Sun Dec 23, 2012 1:33 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: How much re-balancing bonus do you expect?
- Replies: 47
- Views: 5040
Re: POLL: How much re-balancing bonus do you expect?
I voted approximately zero.
I have doubts about rebalancing back to a DIY AA. Is there any reason to believe an initially arbitrary AA is efficient or will be efficient over the long run?
I have doubts about rebalancing back to a DIY AA. Is there any reason to believe an initially arbitrary AA is efficient or will be efficient over the long run?
- Sun Dec 23, 2012 1:12 pm
- Forum: Personal Investments
- Topic: Single Fund Selection for IRA
- Replies: 11
- Views: 1255
Re: Single Fund Selection for IRA
Why not Wellington or Wellesley? I think either of them is preferable to the funds you're considering.
Another good option would be the 60/40 distribution fund, although management of the distributions could be a problem.
Another good option would be the 60/40 distribution fund, although management of the distributions could be a problem.
- Sun Dec 23, 2012 12:35 pm
- Forum: Personal Investments
- Topic: Recent Retiree - Target Retirement Income or Wellesley Fund?
- Replies: 31
- Views: 7548
Re: Recent Retiree - Target Retirement Income or Wellesley F
Once transferred you should qualify for a free Vanguard Brokerage Account, you could then gain access to PAUIX which would be a great complement to Wellesley Income (Admiral shares). An even split between VWIAX and PAUIX would be great, although I'd probably tilt a bit toward PAUIX.
- Sun Dec 23, 2012 12:20 pm
- Forum: Investing - Theory, News & General
- Topic: when do you plan to change AA
- Replies: 29
- Views: 2835
Re: when do you plan to change AA
I hope to have my target AA (still have some cash to invest) until I retire, which I hope will be in 16 years.
The change I anticipate will likely come with an increase in income and an increase in diversification.
The change I anticipate will likely come with an increase in income and an increase in diversification.
- Sun Dec 23, 2012 12:09 pm
- Forum: Personal Investments
- Topic: BND combined with PIMCO Total Return (PTTRX)
- Replies: 32
- Views: 3236
Re: BND combined with PIMCO Total Return (PTTRX)
My bonds are actively managed, they're also highly diversified.
I think my PIMCO fund holds bond funds managed by Gross and I have no problem with that.
I think multi-sector and strategic income funds are good options for those looking for a highly diversified bond fund, they're the all-encompassing options.
I wouldn't hold TIPS or HY in targeted funds, too much skill required. I think BND is weighted so I wouldn't hold that either. I guess I'd default into Gross's fund. Again, I'd have no problem with that.
FWIW...I agree with STC, I approach my whole portfolio with his caution though.
I think my PIMCO fund holds bond funds managed by Gross and I have no problem with that.
I think multi-sector and strategic income funds are good options for those looking for a highly diversified bond fund, they're the all-encompassing options.
I wouldn't hold TIPS or HY in targeted funds, too much skill required. I think BND is weighted so I wouldn't hold that either. I guess I'd default into Gross's fund. Again, I'd have no problem with that.
FWIW...I agree with STC, I approach my whole portfolio with his caution though.
- Sun Dec 23, 2012 11:37 am
- Forum: Personal Investments
- Topic: Your International vs. U.S. Stock Allocation?
- Replies: 73
- Views: 12644
Re: Your International vs. U.S. Stock Allocation?
This question is just one of many which convinced me to dump them in my managers' laps.
If I were doing it myself I'd buy stocks based on fundamentals or buy a global stock fund.
The responses are all over the place, not surprising.
If I were doing it myself I'd buy stocks based on fundamentals or buy a global stock fund.
The responses are all over the place, not surprising.
- Sun Dec 23, 2012 10:58 am
- Forum: Personal Investments
- Topic: Portfolio: Smart or Stupid?
- Replies: 13
- Views: 1913
Re: Portfolio: Smart or Stupid?
You may be limited in your TSP choices, nothing you can do about that so I'd say you're likely doing pretty well in there.
I think you're under-diversified in your Roth, where you likely have endless choices. Specifically, your exposure to alternative classes is zero.
I think you're under-diversified in your Roth, where you likely have endless choices. Specifically, your exposure to alternative classes is zero.
- Sun Dec 23, 2012 10:41 am
- Forum: Investing - Theory, News & General
- Topic: Bernstein: How to Build Your Own Hedge Fund
- Replies: 17
- Views: 3606
Re: Bernstein: How to Build Your Own Hedge Fund
I'm not sure HFs are necessary. I referred to the growth vs inflation model when I built my portfolio, I referred to many other things as well. While asset classes don't quite fit as neatly into that macro model as the diagrams show at minimum the model provides the rationale behind asset classes in terms of growth and inflation. (Risk factors are preferable to asset classes because they explain why classes behave as they do.) HFs and managed futures are considered the only all-weather classes in the growth vs inflation model, although most presentations of the model ignore them. For practical reasons HFs and MFs weren't a real consideration for me, so I settled on exposure to many asset classes to give me coverage of the growth and inflati...
- Fri Dec 21, 2012 8:09 pm
- Forum: Personal Investments
- Topic: Why even invest in equities
- Replies: 31
- Views: 5355
MS/SI
If I had to invest under such a limitation I'd pick one of the multi-sector or strategic income funds, they're largely global TAA bond funds.
- Fri Dec 21, 2012 8:00 pm
- Forum: Investing - Theory, News & General
- Topic: Are U.S. Stocks Diverging from the U.S. Economy?
- Replies: 7
- Views: 1741
!
Boy am I glad I invest at the business level.
- Fri Dec 21, 2012 7:10 pm
- Forum: Investing - Theory, News & General
- Topic: Why not a larger small cap allocation?
- Replies: 21
- Views: 2998
Re: Why not a larger small cap allocation?
The ending was great, especially when George intimates his next hot tip...a business making robot butchers.
- Fri Dec 21, 2012 7:03 pm
- Forum: Investing - Theory, News & General
- Topic: Why not a larger small cap allocation?
- Replies: 21
- Views: 2998
Yuck Yuck
Last night they showed the episode of Seinfeld in which George convinces Jerry to go in on a stock with him, Cendrex.
After several days of losses Jerry bails and locks in a $1,500 loss, George decides to stick it out.
A few days later, out of curiosity, Jerry and his girlfriend check the stock in the newspaper and it's way up.
Jerry can't believe it, his girlfriend reminds him she told him stocks fluctuate, Jerry responds "I just got fluctuated out of fifteen hundred dollars!"
After several days of losses Jerry bails and locks in a $1,500 loss, George decides to stick it out.
A few days later, out of curiosity, Jerry and his girlfriend check the stock in the newspaper and it's way up.
Jerry can't believe it, his girlfriend reminds him she told him stocks fluctuate, Jerry responds "I just got fluctuated out of fifteen hundred dollars!"
- Fri Dec 21, 2012 5:52 pm
- Forum: Investing - Theory, News & General
- Topic: Why not a larger small cap allocation?
- Replies: 21
- Views: 2998
Re: Why not a larger small cap allocation?
In the long run don't the returns on stocks reflect earnings?
- Fri Dec 21, 2012 2:25 pm
- Forum: Investing - Theory, News & General
- Topic: Why not a larger small cap allocation?
- Replies: 21
- Views: 2998
Re: Why not a larger small cap allocation?
With 45 years to go you are contemplating exactly the opposite approach I would take if I were in your situation.
I would adopt a highly diversified conservative or moderate portfolio to reduce risk and take advantage of compounding over so many years to grow my portfolio, rather than relying too heavily on the small cap premium to grow my portfolio.
I would adopt a highly diversified conservative or moderate portfolio to reduce risk and take advantage of compounding over so many years to grow my portfolio, rather than relying too heavily on the small cap premium to grow my portfolio.
- Fri Dec 21, 2012 12:16 pm
- Forum: Personal Investments
- Topic: Why even invest in equities
- Replies: 31
- Views: 5355
Re: Why even invest in equities
I don't like reaching into the past for comparisons, the past is the past. But as a result of some simplistic research I did a year ago... Between 73 and 82 Wellesley just missed keeping pace with inflation, Wellington didn't fare so well. Recall, Wellesley runs about 33/67 (stocks/bonds) and Wellington runs about 67/33. 73 and 74 witnessed rate increases, with inflation following and peaking at about 13% later in the period. The rate increases impacted Wellesley no doubt, Wellesley experiencing negative returns in 73 and 74, but the losses were hardly horrific. Sorry, I don't know the impact of the rate increases on Wellington. FYI, commodities were solid over much of the period with REITs coming on strong during the second half of the per...
- Fri Dec 21, 2012 11:42 am
- Forum: Personal Investments
- Topic: Why even invest in equities
- Replies: 31
- Views: 5355
Re: Why even invest in equities
After years of investing and my own research I've come to the conclusion the rule-of-thumb recommending large stock allocations for young investors is just the opposite of what I would do if I had the chance to do it all over again.
The long horizon translates to assuming less risk, not more.
If one likes the challenge of recovering from big setbacks then be my guest, but the volatility has consequences for the return needed to meet the retirement requirement.
We've all seen long term efficient frontiers. The take-away should not have been to allocate heavily to stocks, the take-away should have been a highly diversified portfolio which delivers about the same return (if not more) at half (or less) the SD.
The long horizon translates to assuming less risk, not more.
If one likes the challenge of recovering from big setbacks then be my guest, but the volatility has consequences for the return needed to meet the retirement requirement.
We've all seen long term efficient frontiers. The take-away should not have been to allocate heavily to stocks, the take-away should have been a highly diversified portfolio which delivers about the same return (if not more) at half (or less) the SD.
- Fri Dec 21, 2012 11:17 am
- Forum: Personal Investments
- Topic: Why even invest in equities
- Replies: 31
- Views: 5355
Re: Why even invest in equities
I think 100% bonds is under-diversified too, although if you were intent upon such a portfolio you might consider multisector and strategic income funds. A healthy dose of alternative classes would also be wise.
I share your concern over stock volatility and whenever this comes up I always mention the following: To equally distribute the volatility from stocks with that from bonds you need 3 to 4 times as much allocated to bonds as is allocated to stocks...25% stocks and 75% bonds. If the stock allocation contains a lot of riskier stocks than 20% stocks and 80% bonds might be more appropriate. This is straightforward risk parity.
Clawing your way back from big losses is tough.
I share your concern over stock volatility and whenever this comes up I always mention the following: To equally distribute the volatility from stocks with that from bonds you need 3 to 4 times as much allocated to bonds as is allocated to stocks...25% stocks and 75% bonds. If the stock allocation contains a lot of riskier stocks than 20% stocks and 80% bonds might be more appropriate. This is straightforward risk parity.
Clawing your way back from big losses is tough.
- Thu Dec 20, 2012 5:44 pm
- Forum: Investing - Theory, News & General
- Topic: Why doesn't the general public care about expense ratios?
- Replies: 101
- Views: 11045
T
I get your points.
I'm not sure a lot of securities means better diversification.
I think I could have picked a better word than static for the TR funds, slowly changing might have been more appropriate. In any event TR funds make big bets on when the stock and bond markets should be heavily weighted.
I'm not sure a lot of securities means better diversification.
I think I could have picked a better word than static for the TR funds, slowly changing might have been more appropriate. In any event TR funds make big bets on when the stock and bond markets should be heavily weighted.
- Thu Dec 20, 2012 3:49 pm
- Forum: Investing - Theory, News & General
- Topic: Why doesn't the general public care about expense ratios?
- Replies: 101
- Views: 11045
Re: Why doesn't the general public care about expense ratios
Using the low ER index approach can lead to one of two problems: 1) If you adopt the fund-of-funds approach you end up with limited diversification within a static AA. 2) If you choose to go with a number of targeted index funds you assume responsibility for portfolio management. There may be other problems. Certainly there are investors who can live with the Balanced Index or a TR/LS fund and certainly there are investors who can manage their portfolio and do a good job of it. I don't fit into either category and I suspect I have a lot of company, others will learn the lesson in the future. I think the best way to describe the problem is I'm smart enough to be dangerous. I'm not implying investors should invest in the most expensive funds ...
- Wed Dec 19, 2012 6:22 pm
- Forum: Investing - Theory, News & General
- Topic: balanced risk allocation fund Invesco
- Replies: 23
- Views: 2364
Re: balanced risk allocation fund Invesco
Dr. Grantham could be a source.
- Wed Dec 19, 2012 6:08 pm
- Forum: Investing - Theory, News & General
- Topic: balanced risk allocation fund Invesco
- Replies: 23
- Views: 2364
Re: balanced risk allocation fund Invesco
Your data is backward-looking and of course period-dependent, for me those are major drawbacks.
At this stage in my life I wouldn't be able to adopt a fixed AA based on past performance, I'm not investing for the past.
At this stage in my life I wouldn't be able to adopt a fixed AA based on past performance, I'm not investing for the past.
- Wed Dec 19, 2012 5:57 pm
- Forum: Investing - Theory, News & General
- Topic: hidden risk in high yield bonds
- Replies: 62
- Views: 6918
L
I have a small amount of HY, my fund managers see value (for now) and I don't second guess them.
I personally wouldn't own HY if I managed my portfolio because the misleading long term correlations don't hold during crises. I've come to the conclusion downside protection is paramount, as opposed to return or risk-adjusted return. While I haven't conducted any studies, obviously, I think your high quality advice is sound.
I personally wouldn't own HY if I managed my portfolio because the misleading long term correlations don't hold during crises. I've come to the conclusion downside protection is paramount, as opposed to return or risk-adjusted return. While I haven't conducted any studies, obviously, I think your high quality advice is sound.
- Wed Dec 19, 2012 5:31 pm
- Forum: Investing - Theory, News & General
- Topic: Why doesn't the general public care about expense ratios?
- Replies: 101
- Views: 11045
Re: Why doesn't the general public care about expense ratios
It's not all about reducing drag, it's about a sound/reasonable financial plan and making it succeed.
- Wed Dec 19, 2012 5:28 pm
- Forum: Investing - Theory, News & General
- Topic: Why doesn't the general public care about expense ratios?
- Replies: 101
- Views: 11045
Re: Why doesn't the general public care about expense ratios
My objective is not to realize the highest return possible, my objectives are to meet my portfolio value target at the time I retire and then make that money last through my retirement.
So while I may pay somewhere between 15 and 20% over an extended time period for management it's worth it to me. While the future is getting dicier every day I don't yet have astronomical return requirements and my intervention in the process, beyond picking and allocating to the funds, increases my risk of not hitting my targets. I'm also looking at several ER reductions as I age.
It's a great feeling to be in control but with that control comes the temptation to act, self-defeating behavior for many investors.
So while I may pay somewhere between 15 and 20% over an extended time period for management it's worth it to me. While the future is getting dicier every day I don't yet have astronomical return requirements and my intervention in the process, beyond picking and allocating to the funds, increases my risk of not hitting my targets. I'm also looking at several ER reductions as I age.
It's a great feeling to be in control but with that control comes the temptation to act, self-defeating behavior for many investors.
- Wed Dec 19, 2012 4:59 pm
- Forum: Investing - Theory, News & General
- Topic: balanced risk allocation fund Invesco
- Replies: 23
- Views: 2364
Re: balanced risk allocation fund Invesco
Sorry, invesco balanced risk.
- Tue Dec 18, 2012 6:13 pm
- Forum: Investing - Theory, News & General
- Topic: Wellesley distribution....buy now?
- Replies: 18
- Views: 1424
Re: Wellesley distribution....buy now?
Isn't the NAV of Wellesley relatively stable?
- Tue Dec 18, 2012 6:10 pm
- Forum: Investing - Theory, News & General
- Topic: balanced risk allocation fund Invesco
- Replies: 23
- Views: 2364
Z
I don't think you'll get the level of diversification of IBR from the VG/TRP funds.
- Tue Dec 18, 2012 6:03 pm
- Forum: Investing - Theory, News & General
- Topic: Why doesn't the general public care about expense ratios?
- Replies: 101
- Views: 11045
Re: Why doesn't the general public care about expense ratios
I care more about after-cost performance.
- Mon Dec 17, 2012 3:41 pm
- Forum: Investing - Theory, News & General
- Topic: balanced risk allocation fund Invesco
- Replies: 23
- Views: 2364
Re: balanced risk allocation fund Invesco
I don't think Wellesley and IBR are similar.
Wellesley uses a static AA and is geared for low/moderate inflation environments, IBR has a dynamic AA and should be able to handle higher inflation too.
Wellesley uses a static AA and is geared for low/moderate inflation environments, IBR has a dynamic AA and should be able to handle higher inflation too.
- Sun Dec 16, 2012 3:54 pm
- Forum: Investing - Theory, News & General
- Topic: How can I invest almost entirely in real assets?
- Replies: 30
- Views: 3469
Re: How can I invest almost entirely in real assets?
Just asking...how's economic growth been over that period...one way to suppress inflation is to stifle growth, to the point few want to take risk.
- Sun Dec 16, 2012 1:05 pm
- Forum: Investing - Theory, News & General
- Topic: balanced risk allocation fund Invesco
- Replies: 23
- Views: 2364
Z
The fund is an attempt to distribute volatility evenly, so your stocks don't drive the whole portfolio into the ground. The volatility-spreading is coupled with macro risk considerations, like growth and inflation.
The main mechanism for volatility reduction is the big bond allocation, with leveraging to boost the returns. I could see some other things driving conservative investors away.
I think it's a good fund, only some fees in my VBS account kept me away.
VBS offers AQR's risk parity fund but I think the min is high.
The main mechanism for volatility reduction is the big bond allocation, with leveraging to boost the returns. I could see some other things driving conservative investors away.
I think it's a good fund, only some fees in my VBS account kept me away.
VBS offers AQR's risk parity fund but I think the min is high.
- Sun Dec 16, 2012 12:38 pm
- Forum: Investing - Theory, News & General
- Topic: "Are You Brilliant, or Lucky?"
- Replies: 48
- Views: 5904
Re: "Are You Brilliant, or Lucky?"
I think many investors need to be brilliant, realizing they should detach themselves from the investment process as much as possible.
- Sun Dec 16, 2012 11:54 am
- Forum: Personal Investments
- Topic: Investment vs Speculation
- Replies: 14
- Views: 1830
Re: Investment vs Speculation
I invest to meet my future retirement needs. Bogle's restricting himself to capital markets, which I think is generally a mistake. I'm not sure how a dollar gained in precious metals or foodstuffs is different than a dollar earned in capital markets. Prices are determined differently in each of these markets and more frequent trading may be involved but they don't delegitimize the gains, who's to say compounding of capital is more noble or a better way to invest than operating in markets based on psychology or supply-and-demand. From an asset allocation perspective limiting one's investments to capital markets is under-diversifying. Don't get me wrong I take a lot of pride investing in good companies for the long run, but my objective is to...
- Sun Dec 16, 2012 11:04 am
- Forum: Investing - Theory, News & General
- Topic: Which would you choose??
- Replies: 16
- Views: 1793
Re: Which would you choose??
Option 1, although if I were limiting myself to VG funds I'd go with Wellesley.
IMO PIMCO's All Asset is good single fund solution.
IMO PIMCO's All Asset is good single fund solution.
- Sun Dec 16, 2012 10:21 am
- Forum: Investing - Theory, News & General
- Topic: How can I invest almost entirely in real assets?
- Replies: 30
- Views: 3469
Browser
I would stay broadly diversified, going 100% real assets doesn't seem like a balanced approach from an asset allocation perspective.
I don't see Arnott as prone to wild speculation or scare tactics, he's a smart guy and a good manager. I have about 25% of my retirement assets in his All Asset All Authority fund, and he's not close to 100% real assets. I do think an allocation to real assets should be a permanent part of one's portfolio.
I have exposure to many asset classes, with good income and growth potential. I also have a lot of inflation protection. I think I've done about as much as I can do to prepare for retirement, I now have to rely on forces beyond my control to play ball.
I don't see Arnott as prone to wild speculation or scare tactics, he's a smart guy and a good manager. I have about 25% of my retirement assets in his All Asset All Authority fund, and he's not close to 100% real assets. I do think an allocation to real assets should be a permanent part of one's portfolio.
I have exposure to many asset classes, with good income and growth potential. I also have a lot of inflation protection. I think I've done about as much as I can do to prepare for retirement, I now have to rely on forces beyond my control to play ball.
- Fri Dec 14, 2012 7:57 pm
- Forum: Investing - Theory, News & General
- Topic: Gold continues to fall
- Replies: 178
- Views: 20081
Re: Gold continues to fall
I'm not seeing any decline in the fear factor to justify the decline in gold.
- Fri Dec 14, 2012 7:03 pm
- Forum: Investing - Theory, News & General
- Topic: "Skating Where the Puck Was"
- Replies: 79
- Views: 18608
Re: "Skating Where the Puck Was"
I'm a little more cautious on GDP growth and stocks.
- Fri Dec 14, 2012 6:08 pm
- Forum: Investing - Theory, News & General
- Topic: "Skating Where the Puck Was"
- Replies: 79
- Views: 18608
ziszew
While I think Swensen is a great manager I doubt he's the only one who knows the ins and outs of alternative investments, many of them are accessible to investors. I'm not buying your claim about higher return translating to higher risk. While there aren't any guarantees with asset allocation managers like Swensen have shown your claim to be false, how else could he/they rise to the top. As far as being irresponsible, I like to think I'm open-minded about investing. While I realize there are classes I'm unlikely to ever get exposure to I try not to introduce unnecessary restrictions into my portfolio because I don't know what the future holds nor will I project the past into the future. Irresponsible would be recommending an unnecessarily l...
- Wed Dec 12, 2012 3:50 pm
- Forum: Investing - Theory, News & General
- Topic: "Skating Where the Puck Was"
- Replies: 79
- Views: 18608
Re: "Skating Where the Puck Was"
I'm not sure what the problem is with holding alternative classes, conventional stock and bond portfolios like Wellington, Wellesley, etc. didn't keep pace with inflation between 73 and 82 although Wellesley came close. Wellington lost about 33% from its peak in late 2007 between 2007 and 2009. Alternatives don't just provide inflation protection. I'm not making inflation predictions, but it is possible. Mutual funds are available which provide access to hedge fund strategies, managed futures, etc. While private equity and a few other classes may be out of reach one can build/own institutional-like portfolios, unless someone can prove a stock+bond portfolio is less risky than a multi class portfolio I think multiclass is preferable. People ...
- Tue Dec 11, 2012 5:51 pm
- Forum: Investing - Theory, News & General
- Topic: "Skating Where the Puck Was"
- Replies: 79
- Views: 18608
Re: "Skating Where the Puck Was"
While I appreciate the idea of investors getting to the party too late I disagree with much of what's been posted so far. I haven't conducted comprehensive research but from what I have seen some institutions have done well using actively managed portfolios which contain alternatives. I realize average investors don't have access to some of the classes used by institutions. Eliminating alternatives from consideration, especially now, really cuts into one's diversification. By eliminating alternatives one falls back on essentially capital assets, throwing out classes based on supply-and-demand and psychology...these last 2 categories being where a number of inflation fighters live, along with low correlators. It's easy for me to post the abo...
- Mon Dec 10, 2012 5:44 pm
- Forum: Investing - Theory, News & General
- Topic: Wellsley Fund
- Replies: 20
- Views: 3321
Re: Wellsley Fund
My only problem with either fund is inflation.
Both can go shorter in bonds and load up on inflation-sensitive stock sectors, but that's about it.
Both can go shorter in bonds and load up on inflation-sensitive stock sectors, but that's about it.