Search found 501 matches

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: 147
Views: 10950

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: 2640

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: 3507

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: 60
Views: 6161

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: 4370

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: 1134

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: 882

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: 5089

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: 11835

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: 738

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: 6074

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: 30125

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: 828

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: 1104

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: 2911

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: 11105

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: 1111

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: 3685

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: 980

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: 3685

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: 3685

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: 3241

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: 11495

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: 1804

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: 2104

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: 1630

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: 1630

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: 18
Views: 2379

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: 2006

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: 2006

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: 995

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.
by Day9
Mon Jan 18, 2016 12:35 pm
Forum: Investing - Theory, News & General
Topic: "Do You Need to Diversify by Fund Company?"
Replies: 51
Views: 4017

Re: "Do You Need to Diversify by Fund Company?"

Thanks for this post. A reminder that the wiki has this good explanation by Mel Lindauer:

What if Vanguard went broke?
by Day9
Fri Jan 15, 2016 3:05 pm
Forum: Investing - Theory, News & General
Topic: Have Vanguard's active funds added value
Replies: 32
Views: 4198

Re: Have Vanguard's active funds added value

This image I've seen Maynard F. Speer post:

Image
by Day9
Fri Jan 15, 2016 1:52 pm
Forum: Investing - Theory, News & General
Topic: Anyone shifting their AA?
Replies: 91
Views: 7058

Re: Anyone shifting their AA?

Your reasoning to change your asset allocation seems arbitrary. It doesn't even consider the yield or risk of bonds. It just considers the price of the Dow but not any earnings multiple or other ratio that tries to find the value of stocks.
by Day9
Wed Jan 13, 2016 8:58 pm
Forum: Investing - Theory, News & General
Topic: Is the Powerball a good play?
Replies: 48
Views: 3358

Re: Is the Powerball a good play?

Just buy deep out of the money short term options.

Go ahead and join the office lotto pool if it increases coworker morale but there are better options out there if you want a low chance for a huge payout.
by Day9
Wed Jan 13, 2016 6:54 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable?
Replies: 17
Views: 1935

Re: Bonds in Taxable?

Boglehead Principles of tax-efficient fund placement

The wiki recommends bonds go in tax advantaged because interest payments are taxed as ordinary income unlike qualified dividends.

But yields are so low today that other options might be good. Consider tax free municipal bonds as well.
by Day9
Wed Jan 13, 2016 5:29 pm
Forum: Investing - Theory, News & General
Topic: Let's say you wanted to buy some investments....
Replies: 18
Views: 1746

Re: Let's say you wanted to buy some investments....

So you're asking what is the best plan for someone who doesn't have a plan? :confused
by Day9
Wed Jan 13, 2016 1:38 pm
Forum: Investing - Theory, News & General
Topic: "It's a Perfect Strategy for My Enemies" [Scott Adams on Active Management]
Replies: 73
Views: 7740

Re: "It's a Perfect Strategy for My Enemies" [Scott Adams on Active Management]

The point is 1.) Low Cost 2.) Low Turnover (especially in taxable account) 3.) Broadly diversified Bogle himself as recommended firms like Dodge & Cox because they meet those 3 requirements. Somebody mentioned Yale but Swenson has said active management is only good if you can ensure top quality...
by Day9
Mon Jan 11, 2016 2:50 am
Forum: Personal Consumer Issues
Topic: Tough Frugal Decisions
Replies: 111
Views: 18770

Re: Tough Frugal Decisions

Mods - always love the frugality threads, but should this go in Personal Finance or Personal Consumer Issues? Click the exclamation mark button at the top of the post (by the quote button) and select "Wrong Forum" As for the thread, switching to work remotely saved me a lot of money but h...
by Day9
Fri Jan 08, 2016 10:04 pm
Forum: Investing - Theory, News & General
Topic: Sharing Advice from meeting with High Level Vanguard Advisor
Replies: 61
Views: 8728

Re: Sharing Advice from meeting with High Level Vanguard Advisor

Solid advice. Some advanced investors here might say 60/40 for a young accumulator is not optimal but I assume this professional adviser has seen a lot in his career and knows more about the average investor's psychology than I do.
by Day9
Fri Jan 08, 2016 9:45 pm
Forum: Investing - Theory, News & General
Topic: SP500 "reverse tilt"
Replies: 33
Views: 2645

Re: SP500 "reverse tilt"

If you're savvy enough to have a good reason (which I have yet to see) to implement a strategy like this then you're probably also capable of responsibly crafting a long/short portfolio perhaps by using E-mini sector futures contracts.
by Day9
Fri Jan 08, 2016 3:58 pm
Forum: Investing - Theory, News & General
Topic: $3k to $50m strategy
Replies: 52
Views: 7802

Re: $3k to $50m strategy

My favorite example of compound interest is the character named Fry from the cartoon Futurama. For those that don't know the series, Fry is cryogenically frozen for 1000 years. In one episode he visits his old bank (still in business) and finds that his original $0.93 in a 2.25% savings account is ...
by Day9
Thu Jan 07, 2016 4:30 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2901
Views: 620913

Re: U.S. stocks in freefall

"U.S. stocks fall approaching speed of light and distorting space-time" doesn't have quite the same ring to it.
by Day9
Thu Jan 07, 2016 1:02 am
Forum: Investing - Theory, News & General
Topic: Small Value ETF DES
Replies: 3
Views: 495

Re: Small Value ETF DES

Does it have to be an ETF? What about a fund?
by Day9
Mon Jan 04, 2016 6:13 pm
Forum: Investing - Theory, News & General
Topic: strategies, not outcomes
Replies: 2
Views: 342

Re: strategies, not outcomes

A little classier than the overused "hindsight is 20/20" platitude.
by Day9
Mon Jan 04, 2016 4:23 pm
Forum: Investing - Theory, News & General
Topic: A deeper look at the credit premium
Replies: 5
Views: 598

Re: A deeper look at the credit premium

This article states: [corporate bonds'] higher correlations (they are less effective diversifiers) with the equity holdings in the portfolio Compare with this post by Rick Ferri sharing an AQR paper that put[s] to bed the false notion that credit risk and equity risk are one in the same. And conclud...
by Day9
Mon Jan 04, 2016 4:05 pm
Forum: Investing - Theory, News & General
Topic: Boglehead Bond Barbell - why not more popular?
Replies: 26
Views: 4572

Re: Boglehead Bond Barbell - why not more popular?

Barbell has exact same expected return as bullet but with less risk (due to positive convexity, reducing duration risk). Isn't that the end of the story? It is strictly better?
by Day9
Mon Jan 04, 2016 2:07 am
Forum: Investing - Theory, News & General
Topic: What's With Vanguard's Active Funds?
Replies: 18
Views: 2811

Re: What's With Vanguard's Active Funds?

The secret sauce is having so many billions of dollars in assets under management that you can hire an elite team of PhDs and well-connected professionals and still have your operating costs not even come close to 1% of the value of the assets.
by Day9
Sat Jan 02, 2016 9:59 pm
Forum: Investing - Theory, News & General
Topic: $3k to $50m strategy
Replies: 52
Views: 7802

Re: $3k to $50m strategy

TravelGeek wrote:I see this article and the "outrageous" scenario as a way to get people to think about the power of compounding interest.


I see it as a way to get people to click on the link to the article and to discuss the author like we are doing here now.

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