Search found 176 matches

by Alchemist
Mon May 22, 2017 7:59 pm
Forum: Personal Consumer Issues
Topic: To auto loan or not to auto loan?
Replies: 23
Views: 1192

Re: To auto loan or not to auto loan?

Cash, hands down. Using debt to buy consumer goods changes the psychology around your decision making. A car payment 'feels' less than just writing a $45k check. It makes the friction of purchasing smaller by making the upfront psychological pain less (this also makes the sales person's job of up-se...
by Alchemist
Tue May 16, 2017 12:41 am
Forum: Investing - Theory, News & General
Topic: Tilting: Will lowered contextual risk of factors eventually eliminate the risk premium?
Replies: 8
Views: 655

Re: Tilting: Will lowered contextual risk of factors eventually eliminate the risk premium?

I think the more important question, and the real risk in this discussion, is what if the SCV premium never shows up in your investing lifetime? Then you are left with far less money (smaller equity position, higher costs, underperformance) at the time when you need it. That is the real risk worth c...
by Alchemist
Tue May 16, 2017 12:37 am
Forum: Investing - Theory, News & General
Topic: NBC WB interview on Jack Bogle
Replies: 13
Views: 1475

Re: NBC WB interview on Jack Bogle

I think Warren Buffet just happens to like the S&P 500 because he knows exactly what is in it, vice a number of Total Market indices. I kind of agree, I've mentioned before that I just split the difference. My taxable account owns Total Market via VTSAX as it is more tax efficient. My Roth TSP/I...
by Alchemist
Tue May 16, 2017 12:13 am
Forum: Personal Consumer Issues
Topic: Cars: Expense or Asset?
Replies: 84
Views: 4402

Re: Cars: Expense or Asset?

I don't think there is a 'right' or wrong way to answer the question from a personal finance perspective. Obviously from an accuracy of terms perspective, yes, obviously a car is an asset just like the Mac Book pro I'm typing this on is an asset. How you calculate that in your personal budgeting? Me...
by Alchemist
Thu May 04, 2017 11:58 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising
Replies: 60
Views: 5338

Re: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising

https://www.youtube.com/watch?v=YG-Q3jQuhPY Jack Bogle is simply incorrect here. Why ignore DFA's Small & Value US fund, in existence since 1993? Higher return, higher risk, higher Sharpe ratio. And, lower correlation with US Mkt (good for tilting!). DFSVX basically had two stellar years, 2002-...
by Alchemist
Sun Apr 30, 2017 7:48 pm
Forum: Investing - Theory, News & General
Topic: Another "Why Bonds?" / Buffett 90/10 thread..
Replies: 66
Views: 7729

Re: Another "Why Bonds?" / Buffett 90/10 thread..

To help clear up some of the misgivings or confusion I think it is important to point out that there are two separate ways of viewing the role of bonds in a portfolio. The seemingly more prominent way of using/viewing bonds is to control overall volatility of a portfolio and for re-balancing. By add...
by Alchemist
Sat Apr 29, 2017 12:45 am
Forum: Investing - Theory, News & General
Topic: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising
Replies: 60
Views: 5338

Re: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising

That's a future paper and so no idea on whether it addresses multi-factor funds and whether they go in the smart beta or factor tilt categories (likely factor tilt I'd guess), but the common ground is probably that all these strategies have a capacity limit and could get crowded. This is the key fa...
by Alchemist
Tue Apr 04, 2017 7:18 pm
Forum: Investing - Theory, News & General
Topic: nice short piece on the math of factor investing
Replies: 202
Views: 10729

Re: nice short piece on the math of factor investing

Firechief IMO what you and most are missing (because not thinking holistically) is that by tilting to factors with higher expected returns and low correlation you can hold less market beta (equity) risk overall, lowering your AA to stocks while then increasing it to safe bonds. And that clearly inc...
by Alchemist
Sun Apr 02, 2017 9:56 am
Forum: Investing - Theory, News & General
Topic: nice short piece on the math of factor investing
Replies: 202
Views: 10729

Re: nice short piece on the math of factor investing

Alchemist, Not sure whether I'm conflating or not. But when an individual shifts their view of diversification from number of stocks to number of separate and independent sources of return, then he is indeed more diversified. The TSM investor may have 5000 stocks, but net exposure to only one facto...
by Alchemist
Sun Apr 02, 2017 2:29 am
Forum: Personal Finance (Not Investing)
Topic: Saving 50% of salary; what does it really mean?
Replies: 142
Views: 10854

Re: Saving 50% of salary; what does it really mean?

I had one year that I saved 50% of my income. Very straight forward in how to get there, I spent most of the year deployed to a combat zone so my taxable income (out of a little over $100k that year, thanks to combat pay/incentives/ect) was less than $20,000. I was not home to spend anything except ...
by Alchemist
Sun Apr 02, 2017 2:12 am
Forum: Investing - Theory, News & General
Topic: nice short piece on the math of factor investing
Replies: 202
Views: 10729

Re: nice short piece on the math of factor investing

Rkhusky, We are talking about diversifying across factors, and even when "concentrate" into SV, there is still plenty of market beta there. Dave You are conflating two things. The issue is that the OP claims that concentrating into fewer stocks is somehow an increase in diversification wh...
by Alchemist
Thu Mar 30, 2017 9:09 pm
Forum: Investing - Theory, News & General
Topic: nice short piece on the math of factor investing
Replies: 202
Views: 10729

Re: nice short piece on the math of factor investing

I take serious exception to the continued definition contortions used by those selling factor strategies. An increased concentration into a risky asset is the opposite of diversification. If you want to promote factors because you think taking the risks that they will show up in the future and provi...
by Alchemist
Sun Mar 26, 2017 10:52 pm
Forum: Investing - Theory, News & General
Topic: Blog on emerging Markets, and investors underweighting them
Replies: 103
Views: 6795

Re: Blog on emerging Markets, and investors underweighting them

I take no issue with someone who wants to own EM, but I do not. Caution is deserved, however, as EM stocks are significantly more risky than developed market stocks. There is sovereign risks, high levels of currency risk, and there is a much higher risk of fraud. Just keep in mind that developing co...
by Alchemist
Thu Mar 16, 2017 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: Do you avoid international investing like Jack Bogle?
Replies: 151
Views: 8343

Re: Do you avoid international investing like Jack Bogle?

Ok, black swan event: To pay for $20 trillion in national debt, trillions in unfunded social security & medicare obligations, the US government nationalizes & seizes control of US companies. The US companies are still operating, but US stocks become worthless. In that scenario, foreign stoc...
by Alchemist
Tue Mar 14, 2017 11:18 pm
Forum: Investing - Theory, News & General
Topic: Merriman article: 12 things every investor should know...
Replies: 43
Views: 5386

Re: Merriman article: 12 things every investor should know...

Even if the small, value, and small value premiums drop by a third, which some academic research suggests might be the case going forward, many believe that there are still likely to be long-term premiums in those asset classes, including myself. Ok, lets run with that. The SCV premium is supposed ...
by Alchemist
Tue Mar 14, 2017 11:01 pm
Forum: Investing - Help with Personal Investments
Topic: Do you avoid international investing like Jack Bogle?
Replies: 151
Views: 8343

Re: Do you avoid international investing like Jack Bogle?

Yes, I avoid international investing and I am a 100% U.S investor. The short version for why is that I believe, for a U.S. based investor, that investing in international stocks exposes you to a great deal of additional risk with no reward for it. The global economy is exposed to any Black Swan even...
by Alchemist
Tue Mar 14, 2017 10:38 pm
Forum: Investing - Theory, News & General
Topic: Merriman article: 12 things every investor should know...
Replies: 43
Views: 5386

Re: Merriman article: 12 things every investor should know...

My initial cynicism toward Merriman seems to have been unfair. However, my main point was that if every investor attempted to tilt to the same thing that it would no longer work. Thus advising that 'every' investor do so, does not make much sense.
by Alchemist
Sun Mar 12, 2017 4:05 pm
Forum: Investing - Theory, News & General
Topic: Merriman article: 12 things every investor should know...
Replies: 43
Views: 5386

Re: Merriman article: 12 things every investor should know...

This article is absurd. If "every" investor should tilt to Small or Value, how is there supposed to be a premium? How many tilters until it capsizes? He does mention the 15 year returns. Odd he doesn't mention the 3,5, or 10 year returns in which Small and Value have trailed TSM (weirdly t...
by Alchemist
Thu Mar 09, 2017 11:11 am
Forum: Investing - Help with Personal Investments
Topic: Do I need small caps?
Replies: 37
Views: 3335

Re: Do I need small caps?

Short Answer: No Slightly less short answer: You already own them in VTI at market weighting, so you are already very well diversified. Also, probably can do without a financial adviser. What are they charging you, btw? The evidence suggests you should tilt at least a little to small cap and value. ...
by Alchemist
Wed Mar 08, 2017 1:10 am
Forum: Personal Finance (Not Investing)
Topic: How Much in Your Emergency Fund And Is It Used?
Replies: 176
Views: 15620

Re: How Much in Your Emergency Fund And Is It Used?

I keep $20k in a separate savings account at my main bank and represents about 10 months of expenses. It is kept separate from other cash (checking account, savings for car/wedding/ect). I have had to tap it a couple times, but for no more than $2k at a time due to car repairs, broken iPhone, funera...
by Alchemist
Fri Mar 03, 2017 12:14 pm
Forum: Investing - Theory, News & General
Topic: investable factors vs acadamic factors
Replies: 11
Views: 817

Re: investable factors vs acadamic factors

In regards to the OP it is actually a much broader problem than that. Funds flowing directly into Small/Value strategies are only part of the problem. Most the research data comes from times before indexing, and specifically total market indexing, became popular. I share nisiprius's skeptical view s...
by Alchemist
Tue Feb 28, 2017 11:56 pm
Forum: Investing - Theory, News & General
Topic: Why has growth beaten value recently?
Replies: 33
Views: 4176

Re: Why has growth beaten value recently?

First of course that is true, and I write about that all the time and I have no idea, literally how you can say it seems to be ignored. That simply is not true. You talk a lot about tracking error, but your confidence that the premium will eventually show up seems nearly absolute. If I had misunder...
by Alchemist
Sun Feb 26, 2017 5:33 pm
Forum: Investing - Theory, News & General
Topic: Why has growth beaten value recently?
Replies: 33
Views: 4176

Re: Why has growth beaten value recently?

Achemist Bizarre? So here is simple question Which group of stocks is more riskY Those with higher SD of earnings and dividends as well as have more operating leverage and more financial leverage (more debt) or companies with the opposite traits? Obviously it's rhetorical. And just as obviously the...
by Alchemist
Thu Feb 23, 2017 8:49 pm
Forum: Investing - Theory, News & General
Topic: Why has growth beaten value recently?
Replies: 33
Views: 4176

Re: Why has growth beaten value recently?

First of all, this thread is from 2016. Value had a comeback recently. Really? Vanguard Value Index (VIVAX) 10 year return: 6.02% Vanguard Growth Index (VIGRX) 10 year return: 8.38% Their 15 year returns are virtually tied at 7.81% vs 7.25% respectively Also there are way too many papers showing cl...
by Alchemist
Wed Feb 22, 2017 11:55 pm
Forum: Investing - Theory, News & General
Topic: Extreme Valuations, and why you should reconsider
Replies: 307
Views: 21425

Re: Extreme Valuations, and why you should reconsider

larryswedroe wrote:FWIW, in January 2000 the CAPE 10 was forecasting a real return to US stocks of 2.3%, it has been 3%. I'd say that was a very good prediction.

Larry


Out of curiosity, does that include dividends?
by Alchemist
Wed Feb 22, 2017 11:27 pm
Forum: Investing - Theory, News & General
Topic: The case against small cap value
Replies: 79
Views: 14326

Re: The case against small cap value

My numbers come straight from Portfolio Visualizer for the asset classes. Many of us use it all the time. Then perhaps this is an important example of the difference between looking at academic measures and actual funds real investors can put money into. And you've picked a poor SCV fund. Vanguard'...
by Alchemist
Wed Feb 22, 2017 12:29 am
Forum: Investing - Theory, News & General
Topic: The case against small cap value
Replies: 79
Views: 14326

Re: The case against small cap value

SCV has impressive out-performance over many time periods, the last decade is not one of them. 2000-2010 S&P 500: CAGR = .32% SCV: CAGR = 9.14% 2007-2017 S&P 500: CAGR = 6.96% SCV: CAGR = 7.63% While it may not be impressive to some, I'll take an additional .67% CAGR. :D And just for fun......
by Alchemist
Sun Feb 19, 2017 5:08 am
Forum: Investing - Theory, News & General
Topic: The case against small cap value
Replies: 79
Views: 14326

Re: The case against small cap value

ETA Disclaimer: Just realized I responded to a very old post......my apologies. I do think that small and value are a good bet! The chart doesn't come with error bars, though, so we have to read it with "fuzzy" statistical glasses. 65% is really probably more like 55%-75%. So a cautious in...
by Alchemist
Fri Feb 17, 2017 11:48 am
Forum: Investing - Theory, News & General
Topic: What's a good analogy for average returns?
Replies: 45
Views: 2924

Re: What's a good analogy for average returns?

I generally avoid much discussion on investing with friends and family, and when asked I usually say that I focus on avoiding unnecessary costs and point them in the direction of Bogle's books. But for me personally, what really made it click was Jack's harping on the simple rules of humble arithmet...
by Alchemist
Fri Feb 17, 2017 11:34 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard Web Site Down?
Replies: 98
Views: 4584

Re: Vanguard Web Site Down?

Seems to be working fine for me now. Was working fine last night as well when I downloaded my tax documents. The only thing that gives me pause with Vanguard is the inability to get away from SMS 2FA. I would prefer to be able to use just the yubikey for 2FA or at the least something like Symantec V...
by Alchemist
Fri Feb 17, 2017 11:29 am
Forum: Investing - Theory, News & General
Topic: Valuation does not matter (may be)
Replies: 55
Views: 4207

Re: Valuation does not matter (may be)

A bit of the detail on interest rates vs P/E effects is admittedly a bit above my head. So for others like me, I will throw out an important reminder. Valuations (and other aggregate metrics) are the forest . Real companies making/selling real things are the trees . Valuations can indeed go down bec...
by Alchemist
Thu Feb 16, 2017 5:42 pm
Forum: Investing - Help with Personal Investments
Topic: Two-Fund Portfolio Role Call
Replies: 43
Views: 4909

Re: Two-Fund Portfolio Role Call

I am a two-funder essentially. I have a 90/10 AA with only owning TSM/S&P 500 for equities and G Fund in my Roth TSP for bonds. For those curious, actual breakdown is: Taxable at Vanguard: VTSAX Roth IRA at USAA: FUSVX (Fidelity S&P 500) Roth TSP: C Fund and G Fund After tax season I am goin...
by Alchemist
Thu Feb 16, 2017 5:31 pm
Forum: Investing - Theory, News & General
Topic: Why is American funds returns too good to be true?
Replies: 45
Views: 5325

Re: Why is American funds returns too good to be true?

They seemed to have performed quite well. Will they in the future? Don't know. But also take into account that these are loaded funds for the most part with a 5.75% load on average. Taking a 5.75% hit on ALL your contributions certainly will severely inhibit actual investor returns. I also do not kn...
by Alchemist
Tue Feb 07, 2017 3:54 am
Forum: Investing - Theory, News & General
Topic: Is a total market fund the most diversified
Replies: 157
Views: 14431

Re: Is a total market fund the most diversified

Meh, the article in the OP just seems to be marketing fluff. If the 40/60 "Portfolio B" has about the same outcome as the classic 60/40 "Portfolio A" but is more expensive, more complex, and suffers from severe tracking error over decade plus periods then why not just go with Por...
by Alchemist
Tue Feb 07, 2017 3:40 am
Forum: Investing - Help with Personal Investments
Topic: Why Wouldn't You Want International Stocks?
Replies: 96
Views: 7895

Re: Why Wouldn't You Want International Stocks?

Suggestions that international stock investing could help us escape if the US experiences a stock market event like Japan are unconvincing. When Japan crashed, the rest of the world didn't. However, the last time the US crashed, 2008-2009, it's not the case that the rest of the world didn't. The wh...
by Alchemist
Thu Jan 26, 2017 9:22 pm
Forum: Investing - Theory, News & General
Topic: TSP?
Replies: 13
Views: 1581

Re: TSP?

All of our Bond holdings are in the G fund as well. 8-) Same here! It depends on what role you are trying to use bonds for. The 'nav' of the G-Fund won't really ever change. But the interest rate will keep up with inflation. If you want bonds for something that might gain in value when your stocks ...
by Alchemist
Sun Jan 15, 2017 1:06 pm
Forum: Investing - Theory, News & General
Topic: Shouldn't everyone do a traditional IRA/401k instead of a Roth?
Replies: 132
Views: 8112

Re: Shouldn't everyone do a traditional IRA/401k instead of a Roth?

My IRA is a Roth and so is my TSP, both are maxed out each year ($23,500 total). My tax burden in the future is very likely to be higher than my current one. More than a quarter of my income is non-taxable, and most years less than half is taxable. I'm a military officer that spends a lot of time in...
by Alchemist
Sat Jan 14, 2017 7:13 pm
Forum: Investing - Help with Personal Investments
Topic: Any reason to NOT go all G Fund for Bond Allocation?
Replies: 5
Views: 907

Re: Any reason to NOT go all G Fund for Bond Allocation?

My entire bond allocation (10%) is in the G Fund of my Roth TSP. I do not intend to ever bother with another bond fun. No other investment vehicle gives you a guarantee on principle, protection from inflation, and the ability to enter/exit it at will.
by Alchemist
Wed Jan 11, 2017 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: Where do you keep your emergency fund?
Replies: 80
Views: 6908

Re: Where do you keep your emergency fund?

Mine is in LifeStrategy Conservative Growth (as another poster mentioned up above). At a certain point once your net worth gets positive and you have access to credit cards, etc., I don't see the point in keeping a cash emergency fund . I could not disagree more with the bolded statement. The EF is...
by Alchemist
Sat Jan 07, 2017 11:00 am
Forum: Investing - Theory, News & General
Topic: "Academic Research Doesn't Always Make Grade in Real World"
Replies: 47
Views: 3994

Re: "Academic Research Doesn't Always Make Grade in Real World"

I am not sure I understand two of your statements consistency Military officer secure salary 12 month emergency fund I am playing with the concept of stable employment and how much cash to keep on hand do I would be interested to understand your logic. Thank you QJ Short answer: SWAN factor. Long a...
by Alchemist
Sat Jan 07, 2017 4:51 am
Forum: Personal Finance (Not Investing)
Topic: What monetary value has your education provided you?
Replies: 107
Views: 6085

Re: What monetary value has your education provided you?

It never occurred to me that it was supposed to have a monetary value. I thought it was supposed to develop ("e-duc", draw out) my mental abilities, provide me with knowledge, and enhance my ability to do critical thinking. It certainly could be both. A more well rounded and intellectuall...
by Alchemist
Sat Jan 07, 2017 4:42 am
Forum: Investing - Theory, News & General
Topic: "Academic Research Doesn't Always Make Grade in Real World"
Replies: 47
Views: 3994

Re: "Academic Research Doesn't Always Make Grade in Real World"

I wonder how you determine appropriate stock/bond weighting, though. That is a fair question. For that I take the Bogle and Buffet view. Keep safe the amount you think you could need in a prolonged economic crisis. Put the rest in stocks (represented by a market weighted index fund). For me, I keep...
by Alchemist
Sat Jan 07, 2017 4:15 am
Forum: Investing - Theory, News & General
Topic: "Academic Research Doesn't Always Make Grade in Real World"
Replies: 47
Views: 3994

Re: "Academic Research Doesn't Always Make Grade in Real World"

What are you actually trying to say here? Are you intending that statement to be precise, that there's a 50/50 chance either way? Based on context, I'm guessing you mean in absolute returns, not adjusted for risk. Is that correct? You are correct, more or less. No, I do not mean in any rigorous sta...
by Alchemist
Thu Jan 05, 2017 12:25 am
Forum: Investing - Theory, News & General
Topic: "Academic Research Doesn't Always Make Grade in Real World"
Replies: 47
Views: 3994

Re: "Academic Research Doesn't Always Make Grade in Real World"

Was expecting a stronger response from Larry. Take the simple example of small cap/small cap value which the FFers were stressing for years until the world changed with the new factors. Even the 'lowly' Vanguard funds, Tax Managed small cap and small cap value have beaten Total Stock market for 1, ...
by Alchemist
Sun Jan 01, 2017 7:36 pm
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 1332
Views: 224865

Re: What are you up YTD? [Year To Date]

A "Buffet Style" 90/10 portfolio: 12.27% Funds for Stocks (90%): VTSAX in taxable, FUSVX in Roth IRA, and C Fund in Roth TSP Funds for "safe assets" (10%): G Fund in Roth TSP Got a bit lucky at the beginning of the year and lump summed a decent amount of money during the market c...
by Alchemist
Sun Jan 01, 2017 5:29 pm
Forum: Investing - Theory, News & General
Topic: When to choose investing over loan repayment?
Replies: 17
Views: 1862

Re: When to choose investing over loan repayment?

I'll be the odd one out and say pay off the mortgage regardless. So long as you have already maxed out your retirement accounts and these extra payments would be either to your mortgage principal or a taxable account, I would just put it towards the mortgage. But I am extremely debt averse, so it is...
by Alchemist
Sun Jan 01, 2017 4:42 pm
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 1332
Views: 224865

Re: What are you up YTD? [Year To Date]

9.74% on a 70/30 split. There's some REIT, SCV, Small Int'l, and EM in there, as well. Can't complain. I think the SP500 was 9.5%? Nice to beat it with less risk. You did quite well, but not as well as the S&P 500. The 9.5% is without dividends, with dividends it was close to 12%. For example, ...
by Alchemist
Fri Dec 30, 2016 5:16 pm
Forum: Investing - Theory, News & General
Topic: Are International Markets overdue for great gains?
Replies: 43
Views: 3714

Re: Are International Markets overdue for great gains?

I do not believe in things like something being 'overdue' for great gains. International is underperforming because of currency fluctuations and real, serious problems in the EU and North East Asia (demographics, unemployment, debt burdens, and geopolitical uncertainty). Emerging markets are also fa...
by Alchemist
Wed Dec 14, 2016 1:40 am
Forum: Investing - Theory, News & General
Topic: Why risk slicing and dicing at all
Replies: 52
Views: 4736

Re: Why risk slicing and dicing at all

There are a lot of odd year groups being picked (1999-2016 for example...why a 17 year sample?). So lets do something really simple, let's look at DFSVX vs VTSAX over the last ten years from today with a $10,000 initial example. DFSVX: 19,805.57 VTSAX: 20,328.56 Taken from Morningstar.com Also keep ...
by Alchemist
Sat Aug 13, 2016 10:19 am
Forum: Personal Finance (Not Investing)
Topic: Any lawyers out there. Bike hits car, minor and parents have no insurance
Replies: 91
Views: 8177

Re: Any lawyers out there. Bike hits car, minor and parents have no insurance

Pay the $500 deductible yourself and move on with life. This is really, really not worth the aggravation on your part to attempt getting blood from a turnip. This is why you have a cash emergency fund. Is it right you have to pay for this? No it isn't, but attempting to apply justice instead of merc...

Go to advanced search