Search found 536 matches

by Day9
Mon Aug 22, 2016 6:04 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 37
Views: 3066

Re: Time Diversification - bottom line, what do you do?

... In order to have a productive conversation around leverage, we really need to get back to basics and look at tilting from a different perspective. In most of the traditional tilts, people are trying to increase returns by adding a volatile and risky asset to the portfolio -- like REITs or SCV. ...
by Day9
Mon Aug 22, 2016 2:41 pm
Forum: Investing - Theory, News & General
Topic: Time Diversification - bottom line, what do you do?
Replies: 37
Views: 3066

Re: Time Diversification - bottom line, what do you do?

Theoretically choosing between leveraging a balanced portfolio and using factor tilting is not an either/or decision. But practically it may be more of an either/or decision than it is in theory because perhaps the best way to implement the leveraged strategy would be with S&P 500 futures as the...
by Day9
Fri Aug 19, 2016 2:25 pm
Forum: Investing - Theory, News & General
Topic: Are there other reasons besides volatility to avoid 100% equities?
Replies: 105
Views: 5477

Re: Are there other reasons besides volatility to avoid 100% equities?

"Why not 100% stock?" posts are very common on this board when the market is at all time highs.
by Day9
Tue Aug 16, 2016 12:37 pm
Forum: Investing - Theory, News & General
Topic: Fixed income strategy
Replies: 17
Views: 1695

Re: Fixed income strategy

If investing solely in TBM in your bond allocation is a crime, it is a misdemeanor not a felony.
by Day9
Wed Aug 10, 2016 6:33 pm
Forum: Investing - Theory, News & General
Topic: Are mutual fund investors smart money?
Replies: 8
Views: 1097

Re: Are mutual fund investors smart money?

First I was amazed to read about this study of a "smart money" effect that looks at fund inflows and persists even after controlling for performance chasing. Then I was amazed that the effect is not that great, especially for taxable investors, and that it does not persist after only 1 mon...
by Day9
Thu Aug 04, 2016 11:14 pm
Forum: Investing - Theory, News & General
Topic: Long Term Investment Grade Bonds a Bad Investment?
Replies: 4
Views: 581

Re: Long Term Investment Grade Bonds a Bad Investment?

In portfolios with very high stock allocations and very low bond allocations, like 90/10, long term treasuries are a fine choice since the volatility and risk of the stock side dominates. If you have long term nominal liabilities then long term investment grade bonds are good for you. Individual inv...
by Day9
Thu Aug 04, 2016 4:38 pm
Forum: Investing - Theory, News & General
Topic: Avoid International?
Replies: 99
Views: 7795

Re: Avoid International?

I keep the market-weighted amount of international. I just look at vanguard total world stock index and use the US allocation vs all others to get a reasonable percentage. Right now its about 54.5% US to 45.5% Intl. ... Could you please show me where you can see this? I'm looking at the Vanguard pa...
by Day9
Thu Aug 04, 2016 4:21 pm
Forum: Investing - Theory, News & General
Topic: Avoid International?
Replies: 99
Views: 7795

Re: Avoid International?

I keep the market-weighted amount of international. I just look at vanguard total world stock index and use the US allocation vs all others to get a reasonable percentage. Right now its about 54.5% US to 45.5% Intl. ... Could you please show me where you can see this? I'm looking at the Vanguard pa...
by Day9
Thu Aug 04, 2016 2:39 pm
Forum: Personal Finance (Not Investing)
Topic: "4% Rule" ...is broken? [argumentative]
Replies: 150
Views: 8576

Re: "4% Rule" ...is broken? [argumentative]

The 4% rule worked in 95% of historical scenarios but...

Larry Swedroe mentions in this recent post about the mistake of solely looking at historical returns to estimate future returns a far lower chance of success than 95%.
by Day9
Thu Aug 04, 2016 2:00 pm
Forum: Investing - Theory, News & General
Topic: My Small Cap Value Mutual Fund conundrum
Replies: 14
Views: 1480

Re: My Small Cap Value Mutual Fund conundrum

Livesoft has referenced this site before. They list their preference for funds from various asset classes. Some of their top small value choices are ETFs. http://www.altruistfa.com/USsmallcapvaluefunds.htm This page lists RZV as the #1 choice but I would like to caution that it has a negative load ...
by Day9
Thu Aug 04, 2016 1:41 pm
Forum: Investing - Theory, News & General
Topic: A costly mistake made by both investors and advisors
Replies: 240
Views: 17379

Re: A costly mistake made by both investors and advisors

The example about current yields being a better indicator of expected bond returns than historical returns is the most easily graspable, common sense example of this point. If yields fall then historical bond returns go up but it is easy to see that expected returns going forward must be lower. So i...
by Day9
Wed Aug 03, 2016 5:58 pm
Forum: Investing - Theory, News & General
Topic: Investors love "lottery tickets" new paper supporting that theory
Replies: 33
Views: 3631

Re: Investors love "lottery tickets" new paper supporting that theory

Would it be too much to consider selling deep-out-of-the-money options, especially calls, as part of a long term diversified portfolio?
by Day9
Wed Aug 03, 2016 5:10 pm
Forum: Investing - Theory, News & General
Topic: Margin investing - how risky is it really?
Replies: 33
Views: 2200

Re: Margin investing - how risky is it really?

If you have the need, willingness, and ability to take risk beyond a very high stock allocation it is better to tilt more strongly to other risk factors like small and value, and increase allocation to international and emerging markets which have lower valuations and higher expected returns. But ev...
by Day9
Wed Aug 03, 2016 2:57 pm
Forum: Investing - Theory, News & General
Topic: Avoid International?
Replies: 99
Views: 7795

Re: Avoid International?

There is good analysis on the Boglehead wiki page for Domestic/International. Give it a read if you haven't already. At least look at the pretty pictures.

https://www.bogleheads.org/wiki/Domestic/International
by Day9
Tue Aug 02, 2016 4:07 am
Forum: Investing - Theory, News & General
Topic: How long to turn 1 million to 2 millions for you?
Replies: 44
Views: 7965

Re: How long to turn 1 million to 2 millions for you?

Starting with $1 million, adding $36,000 per year ($3k/month), growing at 7% would become $2 million in about 7.5 years.

With 5% growth it would take 9.5 years.

So the fact that you say you can save at least $3,000 per month for the next 10 years makes me believe you will reach your goal.
by Day9
Fri Jul 29, 2016 1:35 pm
Forum: Investing - Theory, News & General
Topic: are the markets overvalued? Are Grantham/Hussman etal correct?
Replies: 222
Views: 13809

Re: are the markets overvalued? Are Grantham/Hussman etal correct?

Thanks for the great post and discussion. I see Larry's common sense point about valuations being high and yields being low (and negative in real terms) so it is easy to see why the old 4% SWR is not conservative and why he sees his peers suggest 3% rather than 4%. The original Trinity study shows 4...
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: 1179

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: 1982

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: 1273

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: 2657

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: 805

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: 1938

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: 4985

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: 3491

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: 1115

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: 10641

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: 866

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: 1063

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: 367

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: 6131

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: 1037

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: 3109
Views: 705349

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: 872
Views: 158576

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: 686

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: 206
Views: 19915

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: 3070

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: 4120

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: 6950

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: 4528

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: 1193

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: 950

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: 5327

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: 12226

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: 780

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: 6575

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: 30937

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: 864

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: 1186

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: 3050

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....

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