Search found 491 matches

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: 53
Views: 4315

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: 28045

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: 747

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: 977

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: 2752

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: 9416

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: 978

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: 3394

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: 849

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: 3394

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: 3394

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: 2911

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: 10447

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: 1432

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: 2022

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: 1556

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: 1556

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: 15
Views: 1586

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: 1842

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: 1842

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: 882

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: 3671

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: 3880

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: 6529

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: 3056

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: 1656

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: 1596

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: 7234

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: 80
Views: 11584

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: 8207

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: 2366

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: 7440

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: 2754
Views: 546900

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: 418

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: 318

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: 570

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: 4354

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: 2681

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: 7440

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.
by Day9
Sat Jan 02, 2016 7:24 pm
Forum: Investing - Theory, News & General
Topic: The 529: The Ultimate Bond Vehicle?
Replies: 14
Views: 1577

Re: The 529: The Ultimate Bond Vehicle?

This is helpful analysis that the 10% penalty is worth it for the tax advantages if you are saving yourself from paying significant income tax. Good job to the person who pointed out the scenario where you saved in the 529 for 20 years but then stopped contributing and delaying withdrawals for a fur...
by Day9
Sat Jan 02, 2016 5:57 pm
Forum: Investing - Theory, News & General
Topic: Questions and thoughts after re-reading Bogle's Common Sense on Mutual Funds
Replies: 8
Views: 884

Re: Questions and thoughts after re-reading Bogle's Common Sense on Investing

What would happen if we ignored people buying at the peaks and selling at the bottoms? Is indexing still superior? Is there an alternate approach that can compete with indexing based on something other than pure luck? It was said multiple times in the book, by Bogle and those he quoted, that over t...
by Day9
Thu Dec 31, 2015 1:52 am
Forum: Investing - Theory, News & General
Topic: 100% Stocks vs. Bonds & Stocks?
Replies: 51
Views: 3870

Re: 100% Stocks vs. Bonds & Stocks?

So rather than 100% stocks (which is a big active bet against a market which also holds bonds, real estate, etc.), the efficient solution would be to hold the market allocation of stocks, and then use leverage to get it to whatever long-term return you require If you have the ability, willingness, ...
by Day9
Thu Dec 31, 2015 1:42 am
Forum: Investing - Theory, News & General
Topic: Selling covered calls on stocks/ETFs
Replies: 10
Views: 629

Re: Selling covered calls on stocks/ETFs

I've seen some analysis that deep out of the money options have poor expected returns when you buy them and higher expected returns when you write them. The explanation was that people overpay for "lottery ticket" style opportunities with a small chance for a big payoff like deep out of th...
by Day9
Sat Dec 26, 2015 4:18 pm
Forum: Investing - Theory, News & General
Topic: Boglehead Shirt
Replies: 14
Views: 1710

Re: Boglehead Shirt

Costs Rule Everything Around Me

C.R.E.A.M.

Invest the money

Admiral class shares, y'all

(This is a parody of the lyrics of the hip hop song this shirt is referencing)
by Day9
Mon Dec 21, 2015 4:17 pm
Forum: Investing - Theory, News & General
Topic: Part 2 of the perfect storm post, how to increase EXPECTED returns
Replies: 118
Views: 9536

Re: Part 2 of the perfect storm post, how to increase EXPECTED returns

It seems like the pattern of this article series is to analyze ways to increase expected return of your portfolio other than increasing your stock allocation. I doubt that Larry will discuss using leverage but I wish he would. In one of his Only Guide... books (all of which I highly recommend) Larry...
by Day9
Sun Dec 20, 2015 5:23 pm
Forum: Investing - Theory, News & General
Topic: Would you use DFA funds, if available?
Replies: 13
Views: 1001

Re: Would you use DFA funds, if available?

I believe the DFA small value funds are smaller and more valuey than Vanguard's. Also I think that Vanguard's funds are more likely to change indexes or strategies than DFA's. There was a big thread on this forum about how small value ETF PSXV (or something like that) changed indexes and a lot of pe...
by Day9
Fri Dec 18, 2015 2:58 pm
Forum: Investing - Theory, News & General
Topic: When Commodities Prices Fall Do Expected Returns Rise?
Replies: 2
Views: 238

Re: When Commodities Prices Fall Do Expected Returns Rise?

I think the default view is that a diversified basket of commodities always has 0 expected real return before fees (keeps up with inflation) yet are quite volatile. Some collatorlized commodity futures funds hold collateral as TIPS to boost real returns but real yields are quite small and I'm not su...
by Day9
Wed Dec 16, 2015 12:27 am
Forum: Investing - Theory, News & General
Topic: Commodities & Precious Metals
Replies: 15
Views: 1494

Re: Commodities & Precious Metals

Risks of commodities go well with bond duration risk. This is pretty obvious because one does well in inflation and the other does well in deflation, and the backtesting backs this up. Adding a splash of a broadly diversified collatoralized commodity fund and also extending the duration of your bond...
by Day9
Thu Dec 10, 2015 3:23 pm
Forum: Investing - Theory, News & General
Topic: Stocks and bonds move in opposite directions and improve results? Really?
Replies: 129
Views: 7950

Re: Stocks and bonds move in opposite directions and improve results? Really?

I'm still not sure I understand Frans' original point. Nis, looking at long-term results with yearly rebalancing, I've shown - with calculations using real-life data rather than complex math - that there is no or no significant correlation between stocks and bonds. It irks me that way too many so-c...

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