Search found 519 matches

by Day9
Sat Jul 23, 2016 3:05 pm
Forum: Investing - Theory, News & General
Topic: SPY / TLT Portfolio [SPDR S&P 500 / iShares 20+ Year Treasury Bond]
Replies: 19
Views: 1081

Re: SPY / TLT Portfolio

Yes the long term correlation is close to zero, not negative. The correlation during financial crises, perhaps when it matters most, has been negative. And the correlation lately has been negative. Long Term Treasuries are a fine choice for someone with an extremely high stock allocation (like 90% s...
by Day9
Sat Jul 23, 2016 3:00 pm
Forum: Investing - Theory, News & General
Topic: LCG vs LCV over the last 23 years
Replies: 32
Views: 1752

Re: LCG vs LCV over the last 23 years

It seems almost contradictory to me to look for Value stocks that are also the highest market cap.
by Day9
Sat Jul 16, 2016 3:19 pm
Forum: Investing - Theory, News & General
Topic: How to be an enterprising investor?
Replies: 11
Views: 1252

Re: How to be an enterprising investor?

Have a professional and social circle of elite pro investors and business leaders.
by Day9
Fri Jul 15, 2016 6:31 pm
Forum: Investing - Theory, News & General
Topic: Avoid mid and small caps?
Replies: 19
Views: 2613

Re: Avoid mid and small caps?

Is his portfolio 100% S&P 500, no bonds?

You could probably increase expected return and lower risk with a more diversified portfolio.
by Day9
Thu Jul 14, 2016 10:03 pm
Forum: Investing - Theory, News & General
Topic: I'm a 25 year old irish/uk (duel nationality) student about to finish my degree. I want to start investing. Need help.
Replies: 18
Views: 784

Re: I'm a 25 year old irish/uk (duel nationality) student about to finish my degree. I want to start investing. Need hel

Small cap US stocks have historically had 12.5% returns Source But most people think returns will be lower going forward, and there are good reasons to believe this. Nowadays to get a diversified portfolio with 12% expected returns even a high stock allocation of small and value and emerging market ...
by Day9
Thu Jul 14, 2016 9:20 pm
Forum: Investing - Theory, News & General
Topic: Options trading
Replies: 33
Views: 1904

Re: Options trading

To make money with options you *sell* them. You get paid for the risk that you take on in return. That risk is very real so it's not exactly "free" money. Here is a look at *buying* options (straddles and strangles in this case), the conclusion is that the expected return is negative: htt...
by Day9
Sun Jul 10, 2016 1:16 am
Forum: Investing - Theory, News & General
Topic: Why do people invest in Long Term Bonds now?
Replies: 44
Views: 4857

Re: Why do people invest in Long Term Bonds now?

Compare Treasury yields to Japanese or European yields before saying interest rates have nowhere to go but up People with very low bond allocations (like 90% stock, 10% bond portfolios) can use long bonds and get higher expected return with basically the same risk. Adding a splash of a commodity lin...
by Day9
Thu Jul 07, 2016 11:43 am
Forum: Investing - Theory, News & General
Topic: Actionable Advice: What to do if Japan happens here?
Replies: 36
Views: 3350

Re: Actionable Advice: What to do if Japan happens here?

Diversify globally and across asset classes. :beer
by Day9
Wed Jun 29, 2016 11:47 am
Forum: Investing - Theory, News & General
Topic: "Every Financial Crisis Is Different And the best investment response is the same."
Replies: 5
Views: 1074

Re: "Every Financial Crisis Is Different And the best investment response is the same."

Financial crises are different. Diversify globally and across asset classes.
by Day9
Tue Jun 28, 2016 12:16 pm
Forum: Investing - Theory, News & General
Topic: BREXIT - Whats the big deal?
Replies: 108
Views: 10474

Re: BREXIT - Whats the big deal?

And "The British Isles" encompasses all the islands as well, namely Great Britain (the big island) and Ireland (all of it). It's fine to use "British" colloquially in circumstances where it isn't 100% precise, like referring to the people of the UK even though the UK contains nor...
by Day9
Mon Jun 27, 2016 10:58 pm
Forum: Investing - Theory, News & General
Topic: DFA's take on Brexit
Replies: 3
Views: 845

Re: DFA's take on Brexit

Thanks for sharing this. Some of us have access to DFA funds in retirement plans but don't get messaged articles like this one.
by Day9
Mon Jun 27, 2016 10:23 pm
Forum: Investing - Theory, News & General
Topic: Factors explain bond returns just as they do stock returns
Replies: 8
Views: 1051

Re: Factors explain bond returns just as they do stock returns

I recommend people look at this post from Mar 2015: Bond credit risk is unique from equity risk and also the comment replies, especially the one by Robert T.
by Day9
Mon Jun 27, 2016 4:50 pm
Forum: Investing - Theory, News & General
Topic: IT Treasury vs. Total Bond in Three Fund Portfolio
Replies: 5
Views: 356

Re: IT Treasury vs. Total Bond in Three Fund Portfolio

I've read a respected poster here say something like "If Total Bond Index is a sin, it's a misdemeanor not a felony" Coincidentally, Larry Swedroe just published this ETF.com blog post titled "Swedroe: Consider Factors In Fixed Income" Some studies have shown that credit risk is ...
by Day9
Sun Jun 26, 2016 6:53 pm
Forum: Investing - Theory, News & General
Topic: Return expectations for the next 10 years
Replies: 91
Views: 6027

Re: Return expectations for the next 10 years

Not trying to derail the thread, but what would be a Boglehead-friendly way for someone who has the need, willingness, and ability to take more risk to increase the expected return of his portfolio, besides saving more and working longer?
by Day9
Sun Jun 26, 2016 6:18 pm
Forum: Investing - Theory, News & General
Topic: Alt Funds Not So Good on Brexit Friday (-.71%)
Replies: 9
Views: 1019

Re: Alt Funds Not So Good on Brexit Friday (-.71%)

Forgive me if this is basic, but what is an Alternative Fund?
by Day9
Fri Jun 24, 2016 4:57 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 3087
Views: 683750

Re: U.S. stocks in freefall

Surely the big-money market-movers have access to the markets 24/7, perhaps by using futures contracts.
by Day9
Wed Jun 01, 2016 4:09 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 852
Views: 152895

Re: Should I use margin to buy a balanced fund?

Hi Rob, I've again been reviewing portfolio visualizer and the backtest spreadsheet and it seems like 5 year treasury bonds have better risk-adjusted returns than 2 year treasury bonds. Do you get something different? I've found that too. 5 years has been something of a "sweet spot" in th...
by Day9
Tue May 31, 2016 2:02 pm
Forum: Investing - Theory, News & General
Topic: can you construct a zero DY well diversified S&P 500 portfolio?
Replies: 6
Views: 670

Re: can you construct a zero DY well diversified S&P 500 portfolio?

What about buying and rolling S&P 500 futures contracts? Those don't pay dividends! Though I assume your purpose is to reduce taxes and this wouldn't achieve that goal because you create a new taxable event every time you roll contracts. However they only require you to put up a small percentage...
by Day9
Fri May 20, 2016 3:54 pm
Forum: Investing - Theory, News & General
Topic: Is there a such thing as a blue collar Boglehead?
Replies: 149
Views: 12825

Re: Is there a such thing as a blue collar Boglehead?

I know some blue collar folk who are also small business owners who have high income and net worth but drive their white pick up trucks and work with their hands
by Day9
Fri May 20, 2016 2:49 pm
Forum: Investing - Theory, News & General
Topic: Burton Malkiel: "I think [commodities] should be in every portfolio."
Replies: 35
Views: 2984

Re: Burton Malkiel: "I think [commodities] should be in every portfolio."

You must be able to look at an investment as part of a portfolio, not just in isolation. I've found the risks of commodities complement duration risk well. This is intuitive since they perform oppositely in inflation vs deflation. I've found that it is possible to improve expected return and lower r...
by Day9
Mon May 16, 2016 4:44 pm
Forum: Investing - Theory, News & General
Topic: What % do you have in alternatives? REITs, commodities, etc.)
Replies: 67
Views: 4019

Re: What % do you have in alternatives? REITs, commodities, etc.)

3% Collatoralized Commodity Fund The best way to use commodity linked investments like Collatoralized Commodity Futures Funds is to add just a splash to a portfolio while also increasing the duration of your bond portfolio . In isolation it is hard to prove a commodity investment has positive real e...
by Day9
Mon May 16, 2016 2:54 am
Forum: Investing - Theory, News & General
Topic: Jim Cramer doesn’t beat the market
Replies: 61
Views: 6812

Re: Jim Cramer doesn’t beat the market

I find him entertaining. I also have him to thank for buying an index fund when I first opened my Roth IRA upon graduating college. Mind you this was spring of 2009, few people were singing the praises of investing in stocks. But he was, and he recommended young people should have at least $10k in ...
by Day9
Wed May 11, 2016 3:45 pm
Forum: Investing - Theory, News & General
Topic: Batten down the hatches!
Replies: 25
Views: 4488

Re: Batten down the hatches!

I suspect that the class of average "retail investor" shoeshine boys you might meet has less impact on the market than back in the day when this piece of advice was coined. The US market is owned by foreign investors much more than it used to be. And I suspect it is the case now that big m...
by Day9
Wed May 11, 2016 11:15 am
Forum: Investing - Theory, News & General
Topic: Long bonds in portfolio
Replies: 6
Views: 1186

Re: Long bonds in portfolio

Vanguard Total Bond Index Fund is 12.7% weighted in Bonds with effective maturity 20 years or more.

The average duration of the fund is 5.7 years
by Day9
Mon May 02, 2016 5:28 pm
Forum: Investing - Theory, News & General
Topic: Stable Value Fees
Replies: 9
Views: 940

Re: Stable Value Fees

I have this investment option available to me in my 401k: "This investment option is a unitized fund and not a mutual fund and as such is not registered with the Securities Exchange Commission (SEC)." Expense Ratio: 0.37% Credit Quality breakdown: Aaa 57.8 Aa 6.7 A 18.2 Baa 12.2 Ba and bel...
by Day9
Mon May 02, 2016 12:52 pm
Forum: Investing - Theory, News & General
Topic: Buffett goes after fees pushes index funds (again)
Replies: 37
Views: 5271

Re: Buffett goes after fees pushes index funds (again)

I believe he famously instructed to leave to his wife 90% of assets in S&P 500 index fund like Vanguard's and 10% in Treasury Bills. So he doesn't just talk the talk. It is discussed here often that one big benefit of simplicity is so your survivors can more easily manage your portfolio. This su...
by Day9
Mon Feb 15, 2016 10:17 pm
Forum: Investing - Theory, News & General
Topic: Stop retirement investing??
Replies: 57
Views: 12100

Re: Stop retirement investing??

I'm trying to think of a scenario where it would be OK to stop investing now. Maybe if you had great job security and the type of job people do for a lifetime like a tenured professor or a doctor, and you have good disability insurance and if you have dependents, life insurance.
by Day9
Mon Feb 15, 2016 12:40 pm
Forum: Investing - Theory, News & General
Topic: Is there a general rule for computing standard deviation
Replies: 9
Views: 771

Re: Is there a general rule for computing standard deviation

I've found that stock returns are skewed to the right and have fat left tails. Like a sudden 20% drop is more likely than a sudden 20% gain. Something to look out for when modeling return distributions. I've also read that the opposite is true for bonds but I haven't done the analysis myself.
by Day9
Thu Feb 11, 2016 1:33 pm
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 55
Views: 6391

Re: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?

In Larry Swedroe's The Only Guide You'll Ever Need for the Right Financial Plan (highly recommend) he discusses how it is important to consider the stock/bond allocation of the portfolio when determining how much duration risk to take. Everyone here knows how he recommends only very high credit qual...
by Day9
Wed Feb 10, 2016 12:14 pm
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 293
Views: 30675

Re: Why not 100% Stocks?

A modestly leveraged diversified portfolio can have higher expected return with lower risk than an unlevered 100% stock portfolio.

Yet Mr Markowitz himself still recommends a very high stock allocation, perhaps 100%, to young investors in this recent interview.
by Day9
Thu Feb 04, 2016 3:32 pm
Forum: Investing - Theory, News & General
Topic: AQR interview with Harry Markowitz
Replies: 4
Views: 856

Re: AQR interview with Harry Markowitz

I would have expected him to prefer a modestly leveraged diversified portfolio to an unlevered 100% stock portfolio for a 25 year old.
by Day9
Mon Feb 01, 2016 2:59 pm
Forum: Investing - Theory, News & General
Topic: Early Retirement w/ Tax Advantaged Accounts
Replies: 3
Views: 1163

Re: Early Retirement w/ Tax Advantaged Accounts

Early retirement isn't talked about on this forum as much as other topics. It doesn't have to mean mimosas on the beach at 40 years old, it can mean switching to charity work, full time child rearing, part time consulting work, devoting yourself to a passion project, or anything really. A young, hea...
by Day9
Fri Jan 29, 2016 3:44 am
Forum: Investing - Theory, News & General
Topic: Japan reduces interest rates below 0
Replies: 16
Views: 3022

Re: Japan reduces interest rates below 0

I hear that regular people's savings accounts will not go negative and it was like that in Europe as well. Can anyone corroborate that? If that is the case then it doesn't seem like a big deal when you consider real rates have been negative for some time now. The argument for why going from 0 to -0....
by Day9
Thu Jan 28, 2016 5:52 pm
Forum: Investing - Theory, News & General
Topic: What is your favorite Financial Quote or Metaphor??
Replies: 179
Views: 11906

Re: What is your favorite Financial Quote or Metaphor??

"People here talk about their high stock allocations like they are bragging about being able to eat spicy food" -Someone on another forum with a younger userbase than this one
by Day9
Thu Jan 28, 2016 3:41 pm
Forum: Investing - Theory, News & General
Topic: leveraged / Inverse equities
Replies: 15
Views: 1184

Re: leveraged / Inverse equities

If you're savvy enough to have a good reason to use leverage or go short then you are savvy enough to use better instruments than these.
by Day9
Tue Jan 26, 2016 9:28 pm
Forum: Investing - Theory, News & General
Topic: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties
Replies: 48
Views: 3859

Re: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties

It is impressive. It is also imaginary:) Leverage isn't cheap. You would have to go back and subtract out yearly margin rates and the like. When ever I have looked into, it is just a lot cheaper to buy some small value. Throw in that margin in IRA/401(k)s and I have yet to come up with it being a w...
by Day9
Tue Jan 26, 2016 7:52 pm
Forum: Investing - Theory, News & General
Topic: Gene Fama Video from Fiduciary Investors Symposium
Replies: 7
Views: 1039

Re: Gene Fama Video from Fiduciary Investors Symposium

Absorbing stuff. Highlights for me were: - Regarding emerging markets, the "survivor bias in the US" -- we've never been wiped out by war like some EMs have (not to mention the uncertainty/volatility because EMs are largely opaque) I believe he also said that the standard deviation of US ...
by Day9
Tue Jan 26, 2016 6:21 pm
Forum: Investing - Theory, News & General
Topic: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties
Replies: 48
Views: 3859

Re: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties

...Who would you rather be in 2013, The 1985 guy who went 100% stock or the 1985 guy who went 16% stock? The 16% might have had better risk adjusted returns but the 100% stock guy has ~2x as much money. At the end of the day you spend real returns not risk adjusted ones. Of course you have to be ab...
by Day9
Tue Jan 26, 2016 3:21 am
Forum: Investing - Theory, News & General
Topic: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties
Replies: 48
Views: 3859

Re: At what point would you go from 70/30 to 100(stocks)/0(bonds) if you are in your late twenties

I would rather have a modestly leveraged, diversified portfolio than an unlevered 100% stock portfolio. That said, I don't want either. But the former can have higher expected return with lower risk than the latter. It all depends on your need, ability, and willingness to take risk. It depends on yo...
by Day9
Mon Jan 25, 2016 6:10 pm
Forum: Investing - Theory, News & General
Topic: Any reason not to invest in a Vanguard fund that rebalances?
Replies: 41
Views: 3400

Re: Any reason not to invest in a Vanguard fund that rebalances?

This is a fund-of-funds composed of "Investor share" funds. There are even lower cost "Admiral share" funds that have something like a $10k minimum. If you are investing entirely in a tax advantaged account then ignore the following. But if you have both taxable and tax advantage...
by Day9
Mon Jan 25, 2016 5:47 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 12047

Re: The last 15 years

If you don't like data from 1871 then I guess you really hate studies that look at long term interest rates in medieval Venice and classical Rome!
by Day9
Mon Jan 25, 2016 5:23 pm
Forum: Investing - Theory, News & General
Topic: What is Vanguard mutual fund trade execution time?
Replies: 17
Views: 2258

Re: What is Vanguard mutual fund trade execution time?

Try calling Vanguard's customer service to get the answer from the horse's mouth. They have great customer service.
by Day9
Fri Jan 22, 2016 5:03 pm
Forum: Investing - Theory, News & General
Topic: Example of why to favor Treasury-only bond funds
Replies: 13
Views: 2165

Re: Example of why to favor Treasury-only bond funds

Kevin M wrote:EDV: +6.92%
VGLT: + 4.12%


Just want to chime in that Vanguard's government bond ETFs (e.g. VGLT, VGIT) hold agency bonds as well as treasuries. EDV is pure STRIPS. Vanguard has funds that are pure treasuries like VUSUX Long Term Treasury. iShares ETF TLT is pure long term treasury.
by Day9
Thu Jan 21, 2016 7:51 pm
Forum: Investing - Theory, News & General
Topic: Difference between 100% stocks and 75/25 AA
Replies: 18
Views: 1722

Re: Difference between 100% stocks and 75/25 AA

... The point again is that the macro level uncertainty for future growth in the world is so high that impact of micro tuning (10% shifts) is simply unknowable and is basically a roll of dice. This thread is about a 25% shift not a 10% shift. A 25% shift is not "micro tuning". Not even cl...
by Day9
Thu Jan 21, 2016 4:40 pm
Forum: Investing - Theory, News & General
Topic: Difference between 100% stocks and 75/25 AA
Replies: 18
Views: 1722

Re: Difference between 100% stocks and 75/25 AA

How about the difference between an unlevered 100% stock portfolio and a slightly levered (e.g. 1.1 to 1) 75% stock 25% bond portfolio?
by Day9
Wed Jan 20, 2016 2:19 am
Forum: Investing - Theory, News & General
Topic: Dividend Growth Stock as Bond Substitutes?... Malkiel vs. Swedroe
Replies: 22
Views: 3508

Re: Dividend Growth Stock as Bond Substitutes?... Malkiel vs. Swedroe

Maybe junk bonds and dividend growth stocks can be substituted for each other. But not high quality bonds.
by Day9
Tue Jan 19, 2016 7:10 pm
Forum: Investing - Theory, News & General
Topic: Downside protection
Replies: 19
Views: 2071

Re: Downside protection

linenfort wrote:Perhaps it's the Rime of the Ancient Number Cruncher

At length did cross an Albatross,
Thorough the fog it came


Hold on, that sounds dangerously close to technical analysis. :shock:


Lately I've wished the market were idle as a painted ship upon a painted ocean.
by Day9
Tue Jan 19, 2016 4:38 pm
Forum: Investing - Theory, News & General
Topic: Downside protection
Replies: 19
Views: 2071

Re: Downside protection

I know the long term historical correlation between treasuries and stocks has been 0 but since the financial crisis it seems to be really negative.
by Day9
Mon Jan 18, 2016 8:04 pm
Forum: Investing - Theory, News & General
Topic: Any explanation to why Wealthfront is quoting a much higher EM capitalization than Vanguard?
Replies: 13
Views: 1080

Re: Any explanation to why Wealthfront is quoting a much higher EM capitalization than Vanguard?

The Roboadvisor firms need to appear to be adding value beyond a run-of-the-mill Target Date Retirement fund.

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