Search found 3029 matches

by JoMoney
Sun Feb 14, 2016 3:49 pm
Forum: Investing - Theory, News & General
Topic: How Can "Smart Beta" Go Horribly Wrong?
Replies: 9
Views: 724

Re: How Can "Smart Beta" Go Horribly Wrong?

... Anyone? These guys shy away from making analysis of individual businesses, but then make sweeping claims with regard to what the future "value" of trends in active trading styles should be? Seems like just more rhetoric from someone who has an opinion and a product to sell. Changes in...
by JoMoney
Sun Feb 14, 2016 7:33 am
Forum: Investing - Theory, News & General
Topic: [100% Stock Allocation in Retirement]
Replies: 49
Views: 2103

Re: Stock Allocation in Retirement

... On average, you’ll be liquidating your positions at average prices and, over time, you will earn the average performance of the stock market. This is factually not how it works given regular withdrawals because the sequence of returns matters and influences the actual returns, unless these word...
by JoMoney
Sun Feb 14, 2016 7:15 am
Forum: Investing - Theory, News & General
Topic: [100% Stock Allocation in Retirement]
Replies: 49
Views: 2103

Re: Stock Allocation in Retirement

I think the below comment from Mr.Bogle sums it up. While I cannot give any investor a neat formula for risk control, I am comforted to share that inadequacy with the likes of Paul Samuelson, who tells us, “there is no way any professor of economics or any minister of the church can tell you what yo...
by JoMoney
Sun Feb 14, 2016 1:11 am
Forum: Investing - Theory, News & General
Topic: S&P500 has basically gone nowhere for 15 years
Replies: 59
Views: 5767

Re: S&P500 has basically gone nowhere for 15 years

Dirghatamas, You are looking at a particular scenario - regular small contributions throughout the entire period, tax-deferred account, etc. What about the money you already had in the stock market in 2000 - it hasn't grown much since then. If you lump summed, you were in a particularly unfortunate...
by JoMoney
Sat Feb 13, 2016 11:56 pm
Forum: Investing - Theory, News & General
Topic: S&P500 has basically gone nowhere for 15 years
Replies: 59
Views: 5767

Re: S&P500 has basically gone nowhere for 15 years

Not sure if it interests anyone else, but I wanted to run a different simulation than I did above. Instead of picking a somewhat arbitrary percentage withdrawal, I used the life expectancy (RMD) withdrawal method someone might use on a retirement account to see what "going nowhere" would l...
by JoMoney
Sat Feb 13, 2016 10:53 pm
Forum: Investing - Theory, News & General
Topic: Meb Faber's new book Investing With the House
Replies: 31
Views: 2621

Re: Meb Faber's new book Investing With the House

I looked at the Amazon Kindle "free sample." I think a key sentence is this one. After outlining "the methodology I am going to use," he says: It is not realistic for an individual investor to go and do this work on his or her own.... The good news is that I have done that work ...
by JoMoney
Sat Feb 13, 2016 10:41 pm
Forum: Investing - Theory, News & General
Topic: S&P500 has basically gone nowhere for 15 years
Replies: 59
Views: 5767

Re: S&P500 has basically gone nowhere for 15 years

Running a scenario on PortfolioVisualizer.com , If you had $100,000 invested in Vanguard Total Stock Market (VTSMX) in Jan-2000, you could have withdrawn 3.9% of the annual remaining balance at the end of each year and have a balance of $100,388 in Jan-2016. Granted the dollar amounts and balances w...
by JoMoney
Sat Feb 13, 2016 8:43 pm
Forum: Investing - Theory, News & General
Topic: S&P500 has basically gone nowhere for 15 years
Replies: 59
Views: 5767

Re: S&P500 has basically gone nowhere for 15 years

It's using the "Ibbotson Associates Stocks, Bonds, Bills, and Inflation Yearbook" values for "Large U.S. Stocks" on a Total Return basis including dividends. It's essentially the S&P Index and a pretty good proxy for the entire U.S. stock market with data going back to 1926 ...
by JoMoney
Sat Feb 13, 2016 7:49 pm
Forum: Investing - Theory, News & General
Topic: S&P500 has basically gone nowhere for 15 years
Replies: 59
Views: 5767

Re: S&P500 has basically gone nowhere for 15 years

Regarding: "It's showing that, including dividends, 2000 through 2015 inclusive: --1.83% real (annualized) when corrected for inflation, --4.02% uncorrected for inflation, --over the whole period $1.00 grew to $1.88 " Seems like I remember Mr. Bogle mentioning in one of his books, to be v...
by JoMoney
Sat Feb 13, 2016 6:41 pm
Forum: Investing - Theory, News & General
Topic: S&P500 has basically gone nowhere for 15 years
Replies: 59
Views: 5767

Re: S&P500 has basically gone nowhere for 15 years

Here's a total return chart for S&P 500 from PerfCharts: link . Unfortunately no adjustment for inflation. I'm not really aware of a good source that makes inflation-adjusted total return charts (if anybody has a source of data like that, please tell me :happy) .... Here's a link to a Morningst...
by JoMoney
Sat Feb 13, 2016 6:26 pm
Forum: Investing - Theory, News & General
Topic: What's wrong in investing with Wisebanyan?
Replies: 6
Views: 695

Re: What's wrong in investing with Wisebanyan?

Just using mutual funds instead of ETF's would solve problems 1 and 3. Unfortunately Vanguard Mutual funds have $19.99 brokerage fee per transaction. There is a monthly plan you can sign up for but the amount has to be the same. And finally the ER of the index fund is more than that of its ETF equi...
by JoMoney
Sat Feb 13, 2016 6:05 pm
Forum: Investing - Theory, News & General
Topic: Could negative interest rates be the Black Swan?
Replies: 22
Views: 2157

Re: Could negative interest rates be the Black Swan?

I don't think anyone is suggesting negative rates for individuals at this point, but the idea of negative interest rates is perplexing. People expect money to be a store of value . Negative interest rates would imply a guaranteed loss of value, if deflation is higher than the negative interest rate ...
by JoMoney
Sat Feb 13, 2016 3:09 pm
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 467
Views: 98365

Re: Rick Ferri looking to internationalize his portfolio

What you have in those bond funds though are "Yankee Bonds" that are issued in U.S. dollars, on U.S. markets, under U.S. regulations, but the payee standing behind it happens to be a non-U.S. entity. Since they compete more directly with other U.S. bonds, using similar credit ratings, they...
by JoMoney
Fri Feb 12, 2016 10:43 pm
Forum: Investing - Theory, News & General
Topic: Meb Faber's new book Investing With the House
Replies: 31
Views: 2621

Re: Meb Faber's new book Investing With the House

Something to consider when blindly following the active stock picks of someone else, if you don't fully understand the reasoning behind the selection, it seems like it could cause problems for implementing the strategy. For all I know, one of these guys could be picking a stock to balance a position...
by JoMoney
Fri Feb 12, 2016 8:35 pm
Forum: Investing - Theory, News & General
Topic: Why rebalance US/international
Replies: 7
Views: 628

Re: Why rebalance US/international

Some people use rebalancing to vaguely mask their market timing intentions. Some people use rebalancing to keep their risk profile constant. They have no idea what will achieve higher or lower performance, but they acknowledge that they are somewhat unique asset classes with different risks. They se...
by JoMoney
Fri Feb 12, 2016 8:19 pm
Forum: Investing - Theory, News & General
Topic: Meb Faber's new book Investing With the House
Replies: 31
Views: 2621

Re: Meb Faber's new book Investing With the House

I certainly do not think it's impossible to beat the market, I think at least some of the individuals you list are good examples of that. I don't think it's impossible for people to become an all-time leading scorer in the NBA either. What I do think, is that I'm in no position to be trying to play ...
by JoMoney
Fri Feb 12, 2016 7:32 pm
Forum: Investing - Theory, News & General
Topic: This is Your Brain On Investing
Replies: 13
Views: 1727

Re: This is Your Brain On Investing

I was just browsing the (new'ish) book " Phishing For Phools " by George Akerlof and Robert Shiller They make some points regarding markets, beyond just our own brains doing dumb things, there are market participants actively trying to influence us into making bad decisions to take advanta...
by JoMoney
Fri Feb 12, 2016 5:57 pm
Forum: Investing - Theory, News & General
Topic: Final part of the series on small caps
Replies: 19
Views: 1177

Re: Final part of the series on small caps

FWIW, the Wilshire US Small Value and Mid Caps show negligible difference in return from 1985 - Current Wilshire Small Value 1/1/1985-1/1/2016: 11.86% Wilshire Mid Cap Value 1/1/1985-1/1/2016: 12.08% Wilshire Mid Cap Blend 1/1/1985-1/1/2016: 11.97% Morningstar Chart From what at least one research p...
by JoMoney
Fri Feb 12, 2016 3:36 pm
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

Re: Total Bond Market Index Fund

...I tend to think of the primary purpose of diversification is reducing risk which is a term that, for all practical purposes, doesn't apply to US treasuries. On the contrary, this is what you're using to diversify something that's risky in your portfolio... But there is term/duration/interest rat...
by JoMoney
Fri Feb 12, 2016 6:13 am
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

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

Something that may be interesting to "rebalancing bonus" proponents : Using the above scenarios, rebalancing and DCA in new money once a year over different time periods From 1972-2016 the results were: $10,383.85 (60/40 stock bond annually rebalanced) $11,368.11 (100% stock) $5,758.70 (10...
by JoMoney
Fri Feb 12, 2016 4:56 am
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

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

Ignoring the international part, I used the above linked Ibbotson data at Morningstar to build a 60/40 U.S. portfolio that someone DCA'ed into contributing $12 a year every year from 1/1/1926 to 1/1/2016. My results were: $378,291.83 (for $1,092 invested = $12 * 91 years) using a 60/40 Stock/LT_Bond...
by JoMoney
Fri Feb 12, 2016 3:22 am
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

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

... I care more about the behavior of LT-TREASURIES when stocks tank than I do about yield. If rates go up in the future, great. I'm setting up a ladder over decades anyways! 3. I don't want corporate bonds because even the best corporate bonds get hit in a downturn. I don't want credit risk in a d...
by JoMoney
Thu Feb 11, 2016 4:14 pm
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

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

rrppve wrote:... I think all the arguments for LT Treasuries are influenced by recency bias. Go back and look at periods starting in 1940 and the story will be different.
For sure... Here's a nice 60 year period to consider
Image
by JoMoney
Thu Feb 11, 2016 4:00 pm
Forum: Investing - Theory, News & General
Topic: Why has growth beaten value recently?
Replies: 10
Views: 984

Re: Why has growth beaten value recently?

I understand this is totally anecdotal, but it seems that in this forum I read of many with a "value tilt" to their holdings (especially small-cap) and almost none with a "growth tilt." The contrarian in me thinks that value stocks will begin to outperform again precisely when t...
by JoMoney
Thu Feb 11, 2016 3:30 pm
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

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

... Try out your own allocations and tell me what you think ... I think the returns from bonds will be highly influenced by the yield at the time of purchase, and we're not likely to be taking the path bonds took from the 1970's until now... at least not without first having a hard slog of uphill i...
by JoMoney
Thu Feb 11, 2016 6:47 am
Forum: Investing - Theory, News & General
Topic: Why Aren't Long Term Treasuries Recommended Instead of Total Bond Market?
Replies: 53
Views: 4924

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

For myself, I dismiss it because I'm not looking to try and find what asset in the past produced some correlation effect to optimize some mean-variance risk adjusted return. ...but I don't use Total Bond Market either. The money I have in bonds is kept relatively short and high quality because I wan...
by JoMoney
Thu Feb 11, 2016 6:13 am
Forum: Investing - Theory, News & General
Topic: Predicting 1-year S&P 500 returns using the earnings yield
Replies: 5
Views: 593

Re: Predicting 1-year S&P 500 returns using the earnings yield

Vanguard has a paper outlining their study - most metrics have very poor correlation to 1 year forecasting. It get's a little better when you out to longer periods like 10 years, but still with enough unexplained that trying to make it actionable doesn't leave you any better off than flipping a coin...
by JoMoney
Thu Feb 11, 2016 3:40 am
Forum: Investing - Theory, News & General
Topic: A look at the small cap premium
Replies: 34
Views: 3043

Re: A look at the small cap premium

despite the " anomalously bad " performance of the index that " so many funds and pools of money track " it begs the question of whether or not investors should assume that they wouldn't have been investors in those funds, and somehow wouldn't have been exposed to " arbitrag...
by JoMoney
Wed Feb 10, 2016 3:44 pm
Forum: Investing - Theory, News & General
Topic: Factor models, efficiency & risk
Replies: 4
Views: 427

Re: Factor models, efficiency & risk

...We shall find, however, that the long-term return anomalies are sensitive to methodology. They tend to become marginal or disappear when exposed to different models for expected (normal) returns or when different statistical approaches are used to measure them. Thus, even viewed one-by-one, most...
by JoMoney
Wed Feb 10, 2016 3:31 pm
Forum: Investing - Theory, News & General
Topic: Diversification Benefit to SCV Tilt?
Replies: 5
Views: 551

Re: Diversification Benefit to SCV Tilt?

Cap weighting is a growth/momentum play relative to value/mean-reversion play, but relative to the broad market it's neither - it's a balance that's incorporating the sum total of all investors on both sides. Saying things like " So, when companies are overvalued, and their prices are too high ...
by JoMoney
Wed Feb 10, 2016 4:07 am
Forum: Investing - Theory, News & General
Topic: Factor models, efficiency & risk
Replies: 4
Views: 427

Re: Factor models, efficiency & risk

Markets work just fine. It's the models that don't work the way they thought.
by JoMoney
Tue Feb 09, 2016 4:06 pm
Forum: Investing - Theory, News & General
Topic: Staying the course?
Replies: 16
Views: 1070

Re: Staying the course?

Stocks fall when a lot of (or more) people are selling, and stocks rise when a lot of (or more) people are buying. So would it make sense to say that following the herds is a better strategy than staying the course? Trend following is a strategy a number of people follow. There are books about it, ...
by JoMoney
Tue Feb 09, 2016 3:38 pm
Forum: Investing - Theory, News & General
Topic: $2 Trillion Valuation
Replies: 12
Views: 1145

Re: $2 Trillion Valuation

Well, if AT&T hadn't been broken up into the baby-bell's, it's possible it might have had a valuation of $810 Billion in 1999 http://www.businessweek.com/1999/99_47/b3656010.htm That's over a Trillion of today's dollars adjusted back for inflation. I'm not sure if there would be any reasonable e...
by JoMoney
Mon Feb 08, 2016 3:51 pm
Forum: Investing - Theory, News & General
Topic: A look at the small cap premium
Replies: 34
Views: 3043

Re: A look at the small cap premium

FWIW, you can get a chart of the completion index (in this case the Russell 2500) going back to the end of 1978 at Morningstar Chart Link A properly weighted Russell 2500 + S&P500 = Russell 3000 or Total Market* return without any arguable discrepancy. Something to keep in mind though, is that t...
by JoMoney
Mon Feb 08, 2016 3:32 pm
Forum: Investing - Theory, News & General
Topic: Jim Cramer
Replies: 21
Views: 2187

Re: Jim Cramer

I find Cramer's antics and commentary entertaining. Sometimes he has something to say that's interesting and topical with the state of things in the current financial markets. I would not make any stock picks or financial decisions based on anything he says, other than his affirmations of using a lo...
by JoMoney
Mon Feb 08, 2016 4:36 am
Forum: Investing - Theory, News & General
Topic: "Picking Individual Stocks is a Loser's Game"
Replies: 75
Views: 6448

Re: "Picking Individual Stocks is a Loser's Game"

I agree with the idea that it's not unreasonable for someone to build a portfolio of larger leading companies and expect performance roughly inline with the market. There's plenty of real world examples, from the Dow ( DIA ETF) , or Bridgway's Blue Chip 35 Fund ( BRLIX ), or even the Corporate Leade...
by JoMoney
Sun Feb 07, 2016 4:14 pm
Forum: Investing - Theory, News & General
Topic: Expense ratio vs return on investment
Replies: 15
Views: 1403

Re: Expense ratio vs return on investment

Something else to note, while mutual funds report on their net return, there are other expenses and sometimes other income, which is not accounted for in the "Expense Ratio". On a positive note, on a net return basis (which includes some income from securities lending), the cost of owning ...
by JoMoney
Sun Feb 07, 2016 3:15 pm
Forum: Investing - Theory, News & General
Topic: [Vanguard Brokerage Services] 1099Bs Issued at the End of Feb
Replies: 28
Views: 2160

Re: [Vanguard Brokerage Services] 1099Bs Issued at the End of Feb

JoMoney, If your holdings were that simple, why did you bother to convert to VBS? Was the conversion mandatory? It wasn't always this simple, and I didn't think it could hurt. I wanted to get rid of having both a brokerage and mutual fund account and clean up all the stale mutual funds I don't buy ...
by JoMoney
Sun Feb 07, 2016 6:18 am
Forum: Investing - Theory, News & General
Topic: [Vanguard Brokerage Services] 1099Bs Issued at the End of Feb
Replies: 28
Views: 2160

Re: [Vanguard Brokerage Services] 1099Bs Issued at the End of Feb

<SIGH> I've got all converted/'upgraded' Brokerage accounts, still no 1099-DIV ... Before the 'upgrade' last year I only had mutual funds in my account, and I'm pretty sure I got my statements before February. Not this year :( Although I like the new clean look, and the consolidated statements, I no...
by JoMoney
Sat Feb 06, 2016 6:20 pm
Forum: Investing - Theory, News & General
Topic: "Picking Individual Stocks is a Loser's Game"
Replies: 75
Views: 6448

Re: "Picking Individual Stocks is a Loser's Game"

Picking an average assortment of large-cap stocks as a proxy for the market is no difficult task. The DJIA has done a reasonable job of it using 30 stocks in an a bizarre price-weighted scheme for 100+ years. IMO though, people are fooling themselves if they think they've got better than coin-flip o...
by JoMoney
Sat Feb 06, 2016 4:05 pm
Forum: Investing - Theory, News & General
Topic: VOOG + VOOV not equal to VOO [S&P 500 + Growth not equal to Value]
Replies: 6
Views: 459

Re: VOOG + VOOV not equal to VOO [S&P 500 + Growth not equal to Value]

MStar Chart Link Aside from expenses, trading turnover, and risk/diversification differences, over long periods there has been almost no difference between a 50% split of the return from S&P500 Value and Growth and that of the Broad S&P500. There are a few specific period dependent times wh...
by JoMoney
Sat Feb 06, 2016 3:36 pm
Forum: Investing - Theory, News & General
Topic: Case for Bull Market Next 15-20 Years
Replies: 18
Views: 2628

Re: Case for Bull Market Next 15-20 Years

... An interesting comment does strongly suggest a prediction, does anyone know if it came true? It highlighted a change in the law: On July 23 institutions that manage pension fund money began operating under a new and far more liberal interpretation from the Labor Dept. of what is a prudent inves...
by JoMoney
Sat Feb 06, 2016 2:50 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads investment philosophy at huge risk?
Replies: 29
Views: 3332

Re: Bogleheads investment philosophy at huge risk?

... Nobody knows nothing. There was a study of something like 7000 market related predictions from 68 gurus over decades. It turned out the accuracy rate was 47%, less than just flipping a coin. Nobody knows nothing. Invest in a manner that doesn't require you to have a working crystal ball to be s...
by JoMoney
Sat Feb 06, 2016 4:00 am
Forum: Investing - Theory, News & General
Topic: Is there a rule of thumb for 50/50 Total Stock/Total Bond
Replies: 28
Views: 3205

Re: Is there a rule of thumb for 50/50 Total Stock/Total Bond

... I like the Vanguard link because it gives ranges for 10-year returns, and man they are wide. http://www.vanguard.com/pdf/ISGVEMO.pdf ...although valuations are useful in predicting stock returns over the long term, they still leave more than half the volatility of long-run returns unexplained. ...
by JoMoney
Fri Feb 05, 2016 11:50 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads investment philosophy at huge risk?
Replies: 29
Views: 3332

Re: Bogleheads investment philosophy at huge risk?

Part of the "Boglehead's Philosophy" is " Never bear too much or too little risk " People are encouraged to set their own individual level of risk by allocating their investment to both stocks and bonds. Nobody says that you must accept the risks of putting all of your money in t...
by JoMoney
Fri Feb 05, 2016 10:09 pm
Forum: Investing - Theory, News & General
Topic: Smart Beta: When the shark jumps the shark
Replies: 11
Views: 1416

Re: Smart Beta: When the shark jumps the shark

It just worries me that the whole industry seems to be trying to pile in to value and momentum. Or is that just my selection bias (interested in these things, so I find these articles)? Not just you. Over the past several years there has been a glut of new mutual funds offering all sorts of factor ...
by JoMoney
Fri Feb 05, 2016 9:21 pm
Forum: Investing - Theory, News & General
Topic: Why has growth beaten value recently?
Replies: 10
Views: 984

Re: Why has growth beaten value recently?

Image It's not just a recent trend, we're at almost 19 years of a 'return to the mean' between growth/value on S&P indices.
by JoMoney
Fri Feb 05, 2016 8:19 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7908

Re: The failure of valuation predictions

The problem is your prior knowledge of "all possible outcomes". If the limits you propose are being somewhere between losing everything and infinite gain, and weighting it all equally, you're not going to get anything out of the result, other than your prior assertion that anything and eve...
by JoMoney
Fri Feb 05, 2016 6:45 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 124
Views: 7908

Re: The failure of valuation predictions

The key is to understand well, really well, the limit of one's analysis and to not give in to siren song of mathematical/numerical precision What this amounts to though, as Rodc already implied, is your results are just a " subjective probability " needlessly ran through a mathematical ex...

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