Search found 351 matches

by QuietProsperity
Tue Jan 16, 2018 11:48 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets equities went sideways for 50 years 1920-70
Replies: 24
Views: 1945

Re: Emerging Markets equities went sideways for 50 years 1920-70

The US in "Price Only" terms (Like the EM Chart) has done that a number of times...

From the same slides:

Image
by QuietProsperity
Mon Jan 08, 2018 3:26 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Patience And Diversification Crucial
Replies: 51
Views: 6148

Re: Larry Swedroe: Patience And Diversification Crucial

. The word 'multifactor' seems to have different meanings to different people, confused further by financial industry 'marketing'. Multifactor is simply more than one factor (multi = more than one). By extension - large cap value and small cap are multi-factor (exposure to two 'risk factors' each),...
by QuietProsperity
Mon Jan 08, 2018 1:32 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Patience And Diversification Crucial
Replies: 51
Views: 6148

Re: Larry Swedroe: Patience And Diversification Crucial

It leads me wonder if multi-factor funds aren't rather like active managed ones in that some will outperform in a particular environment during a particular time, but it's difficult to choose them in advance. The problem of course is the varying factor exposures of these new multi-factor funds. One...
by QuietProsperity
Thu Jan 04, 2018 4:41 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Patience And Diversification Crucial
Replies: 51
Views: 6148

Re: Larry Swedroe: Patience And Diversification Crucial

Certainly international and value investors have required patience over the last decade. For the former that patience is finally being rewarded but for the latter the waiting continues. Small value relative to market has been positive over last 10 years for both Intl and US markets. 10 year annuali...
by QuietProsperity
Thu Dec 28, 2017 12:36 pm
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 114
Views: 10448

Re: What ever happened to the Larry portfolio?

The Larry Portfolio is an extremely niche portfolio, one that even Larry would say very few investors should try and replicate. It is based purely on the deep belief in the small + value premiums. The value premium has been pretty non-existent since ~2011, so it is no wonder that a value titled, sho...
by QuietProsperity
Wed Dec 20, 2017 1:14 am
Forum: Investing - Theory, News & General
Topic: Momentum: the unfortunate difference between theory and practice
Replies: 7
Views: 1217

Re: Momentum: the unfortunate difference between theory and practice

I'm so thankful that Research Affiliates is always around to "save" a factor from its demise. I really like their research, but man, they sure as hell like to self promote how smart and awesome they are. I think they have "saved" 4 factors in the last year... :oops:
by QuietProsperity
Tue Dec 19, 2017 5:45 pm
Forum: Investing - Theory, News & General
Topic: Paul Merriman and Small Cap Value
Replies: 91
Views: 7597

Re: Paul Merriman and Small Cap Value

TSM has wide diversification and rock bottom cost... Rock bottom cost, yes (Although most factor ETFs are in the 0.15%-0.25% range these days so the margin has slimmed). Diversification, ehhh. Beta diversification sure, but the absence of factor diversification is what makes TSM appealing to a lot ...
by QuietProsperity
Tue Dec 19, 2017 1:36 pm
Forum: Investing - Theory, News & General
Topic: Paul Merriman and Small Cap Value
Replies: 91
Views: 7597

Re: Paul Merriman and Small Cap Value

The problem with all of these "Value Tilt Only" portfolios by Merriman, Swedroe, Bernstein, DFA, etc. is that they become extremely risky, from both a return (Sequence) and emotional perspective. I believe in Value over the long-term but we have more than enough evidence to show us that any single "...
by QuietProsperity
Tue Dec 12, 2017 3:42 pm
Forum: Investing - Theory, News & General
Topic: Small cap value vs. total market?
Replies: 103
Views: 10161

Re: Small cap value vs. total market?

Mean Reversion seems to be a force in our world within and outside of investing. The problem with Mean Reversion is that it may point us towards a higher probability outcome, but it does not help us with the timing of such outcomes. U.S. Stocks surpassed Great Depression valuations in late 1996, but...
by QuietProsperity
Tue Dec 12, 2017 1:50 pm
Forum: Investing - Theory, News & General
Topic: Small cap value vs. total market?
Replies: 103
Views: 10161

Re: Small cap value vs. total market?

SCV (Any any other factor/strategy) will give you the "opportunity" to out-perform the market, nothing else. Value, and other factors, have, can, and will, go very long periods of under-performance compared to the market, sometimes as long as multiple decades. You need to believe in the factor for t...
by QuietProsperity
Mon Dec 11, 2017 4:51 pm
Forum: Investing - Theory, News & General
Topic: What mix of intermediate and short term bonds?
Replies: 45
Views: 3024

Re: What mix of intermediate and short term bonds?

Blue Ears, If you are in the spending phase you should be more concerned with inflation and maintaining purchasing power as opposed to total nominal returns with your bonds. Clearly there is a link between the two, but they are not the same. I would try to start thinking about your portfolio as some...
by QuietProsperity
Sat Dec 09, 2017 12:50 pm
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3256

Re: 2000-09 worst decade for large cap stocks in 109 years

I agree Nisi. My guess is 29-38 is the worst "decade". Also, if this was done on a real basis, my guess is that the 70-79 period wins. Can check this in DFA matrix book https://www.ifa.com/pdf/matrix%20book%202017.pdf Worst 10-year period for US large cap stocks of any 10-year period from 1926 to 2...
by QuietProsperity
Sat Dec 09, 2017 10:36 am
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3256

Re: 2000-09 worst decade for large cap stocks in 109 years

I agree Nisi. My guess is 29-38 is the worst "decade". Also, if this was done on a real basis, my guess is that the 70-79 period wins.

Anyways, the point remains. Diversify and stay the course. Whether that's geographically, by factors, etc. Find the mix that works for you, save, and go live.
by QuietProsperity
Fri Dec 08, 2017 1:14 am
Forum: Investing - Theory, News & General
Topic: Call the top! - Bitcoin
Replies: 180
Views: 17058

Re: Call the top! - Bitcoin

$37,053 followed by an 85% crash :beer
by QuietProsperity
Tue Dec 05, 2017 9:27 pm
Forum: Investing - Theory, News & General
Topic: Fama - Embrace passive management already
Replies: 16
Views: 2526

Re: Fama - Embrace passive management already

None of us hold the global market portfolio and never re-balance. Some of us are trying to get close to that goal by owning Vanguard Total World (net assets $9.8B) and/or ACWI (net assets $8.2B) as our equity holding. It's the ultimate Boglehead equity holding. There's always some of us oddballs ou...
by QuietProsperity
Tue Dec 05, 2017 6:53 pm
Forum: Investing - Theory, News & General
Topic: Fama - Embrace passive management already
Replies: 16
Views: 2526

Re: Fama - Embrace passive management already

Have investors with significant tilts toward small company stocks-- using widely available small cap funds from Vanguard, Schwab, Fidelity et al- -beaten funds holding the capital-weighted total market indexes? Over the last ~25 years the Vanguard Small-Cap Index fund has beaten the Vanguard Total ...
by QuietProsperity
Fri Dec 01, 2017 12:41 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Finding The Source Of Value
Replies: 19
Views: 2231

Re: Larry Swedroe: Finding The Source Of Value

Nisiprius, you know better then to draw conclusions over a single 13-year period. For example, if we look at 2001-2013, we would conclude that value is far superior to the market and not investing in it is just flat out dumb: Source http://i64.tinypic.com/44a6p.jpg Most people get caught up in this ...
by QuietProsperity
Thu Nov 16, 2017 11:50 am
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 197
Views: 25436

Re: My Favorite Alternative Funds

How does this compare to AQR Long Short fund QLEIX? Are these two tracking mutually exclusive segments of Value/Momentum? The funds are somewhat similar but VMOT has a larger range of potential market (beta) exposures. Even though VMOT does not explicity state that they use "Quality" in addition to...
by QuietProsperity
Sun Oct 29, 2017 4:12 pm
Forum: Investing - Theory, News & General
Topic: Bernstein's bond choice for cowards and ST IG
Replies: 28
Views: 3550

Re: Bernstein's bond choice for cowards and ST IG

I find myself with the good doctor on this topic. You can fairly easily replicate Corporate Bond exposure with a stock/treasury bond mix (Term + Credit). If you want a 10% Corporate Bond allocation, you can just split that into roughly 5% stocks and 5% treasuries and find a very similar outcome. Add...
by QuietProsperity
Fri Sep 29, 2017 6:35 pm
Forum: Personal Finance (Not Investing)
Topic: I am in the investment advice industry and I'm not sure if I provide any value
Replies: 67
Views: 6997

Re: I am in the investment advice industry and I'm not sure if I provide any value

That's another false dichotomy: either you have to know it all or you must have your money managed by someone, otherwise you will just trade wildly. How about "I don't know much about it but I know how to follow instructions"? Like seeing a dentist, they will have return visits. The dentist will te...
by QuietProsperity
Fri Sep 29, 2017 1:48 pm
Forum: Personal Finance (Not Investing)
Topic: I am in the investment advice industry and I'm not sure if I provide any value
Replies: 67
Views: 6997

Re: I am in the investment advice industry and I'm not sure if I provide any value

You need to find advisors who don't manage money at all. So there won't be any pushing. As much as I agree with your first comment above. I think this is flat-wrong. I think the investment plan should be married with the financial plan. An advisor can manage money on a discretionary basis under a f...
by QuietProsperity
Fri Sep 29, 2017 11:19 am
Forum: Personal Finance (Not Investing)
Topic: I am in the investment advice industry and I'm not sure if I provide any value
Replies: 67
Views: 6997

Re: I am in the investment advice industry and I'm not sure if I provide any value

This is simply faulty logic permeated by the advice industry, a false dichotomy. It's like a restaurant saying if you don't eat here you will starve to death. Whether 1% is much better than most would do on their own is moot when the customers can just go somewhere else for much less. I have in the...
by QuietProsperity
Fri Sep 29, 2017 12:44 am
Forum: Personal Finance (Not Investing)
Topic: I am in the investment advice industry and I'm not sure if I provide any value
Replies: 67
Views: 6997

Re: I am in the investment advice industry and I'm not sure if I provide any value

I work in the financial services industry as well and have had similar thoughts about the standard 1% model over the years, especially when I first started. I used to get more upset about it, but since helping out advisors and some clients over the past 4 years (I am more on the planning/service sid...
by QuietProsperity
Tue Sep 26, 2017 2:36 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: A 5 Factor Evaluation
Replies: 15
Views: 2412

Re: Larry Swedroe: A 5 Factor Evaluation

Taylor's 3-fund portfolio is a Bayesian guess with unknown probabilities. You make a subjective decision on how to allocate among the three portfolios. And you don't update your Bayesian probabilities because the market fluctuations do not provide you with any hard evidence. I agree, but that's my ...
by QuietProsperity
Mon Sep 25, 2017 2:41 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: A 5 Factor Evaluation
Replies: 15
Views: 2412

Re: Larry Swedroe: A 5 Factor Evaluation

And the past is not a good predictor of the future. And yet, this is how we all invest. Why do you, or anyone for that matter, invest in stocks? Most people, whether they want to admit it or not, invest in stocks because of their past performance. Its important to realize that either: 1. This is al...
by QuietProsperity
Fri Sep 22, 2017 2:37 pm
Forum: Investing - Theory, News & General
Topic: Any "average Joe" here actually make out well with individual stocks?
Replies: 108
Views: 13516

Re: Any "average Joe" here actually make out well with individual stocks?

I run three different strategies alongside our more common low-cost globally diversified portfolio that tilts toward momentum and value. Of those three strategies, one is an US-based individual stock strategy. I started it in 2015 and using VTI as a benchmark, it has a slight out-performance since t...
by QuietProsperity
Thu Aug 31, 2017 11:44 am
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 360
Views: 36167

Re: Why go with an 80% stock / 20% bond portfolio?

Its actually really simple. There is no pure 100% scientific reason for any portfolio mix. You can choose 100% stocks, I can choose 80%, Bogle chooses 50%. We all ultimately decide on a number that makes us feel good. Factors such as Age, Spending Needs based on Expected Life-Span, Knowledge about M...
by QuietProsperity
Thu Aug 31, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: AAPL is midcap growth?
Replies: 5
Views: 1197

Re: AAPL is midcap growth?

Career risk :D
by QuietProsperity
Thu Aug 31, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: Perhaps you shouldn't rebalance your SCV "tilt"
Replies: 9
Views: 1340

Re: Perhaps you shouldn't rebalance your SCV "tilt"

No surprise in the results. With almost any portfolio, you SHOULD achieve a high CAGR over long periods when you do not re-balance. By not re-balancing, you allow the higher risk, and hopefully higher return (In your case, SCV), assets to compound at higher rates at a larger weight. Re-balancing was...
by QuietProsperity
Tue Aug 01, 2017 2:16 pm
Forum: Investing - Theory, News & General
Topic: SNAP News - S&P 500 Index vs Total Stock Market Index
Replies: 10
Views: 1146

Re: SNAP News - S&P 500 Index vs Total Stock Market Index

From May 1992 through July 2017, the CAGR difference between the S&P 500 Index Fund (VFINX) and the U.S. Total Stock Market Fund (VTSMX) was 0.11% (9.40% v. 9.51%)...Hardly anything to concern yourself over. The companies in the S&P 500 make up just around 80% of the TSM Fund. I would file this one ...
by QuietProsperity
Fri Jul 21, 2017 4:52 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: REITs Aren't Special
Replies: 106
Views: 9815

Re: Larry Swedroe: REITs Aren't Special

It is true that REITs provide exposure to the Size, Value, Term, and Credit factors and can be historically (mostly) replicated via a combination of small/mid-cap value + Corporate Bonds: See Here It is also true, that even when replicated via factor exposure, REITs still have some level of a correl...
by QuietProsperity
Mon Jul 17, 2017 2:00 pm
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 197
Views: 25436

Re: My Favorite Alternative Funds

It seems virtually every financial author has changed their recommendations at some point in their career. This is everything and applies to us as investors too. I firmly believe that anyone that can hold onto a reasonable strategy (Market-Cap, Value, Momentum, Trend, Multi-Factor, etc.) will be mo...
by QuietProsperity
Thu Jul 13, 2017 2:01 pm
Forum: Investing - Theory, News & General
Topic: % bogleheads of overall population
Replies: 82
Views: 11686

Re: % bogleheads of overall population

As asif pointed out, the math shows just how small of a population bogleheads are. Obviously there are more frugal, low-cost, financial savvy people out there that are NOT on the bogleheads forum, but in general, those types of people seem to be the minority of the population. I would venture to gue...
by QuietProsperity
Thu Jul 13, 2017 12:29 pm
Forum: Investing - Theory, News & General
Topic: Why Simple beats complex
Replies: 71
Views: 7500

Re: Why Simple beats complex

Like everything in life, simplicity is a bit subjective to all of us and definitely exhibits marginal utility properties. For the majority of our investments, we tilt towards momentum+value within global equities (5 Funds) with an economic trend overlay on the portfolios (I have a small allocation t...
by QuietProsperity
Wed Jul 05, 2017 12:16 am
Forum: Investing - Theory, News & General
Topic: Simplest "Nobody Knows Nothing" Don't Peek Portfolio?
Replies: 20
Views: 3410

Re: Simplest "Nobody Knows Nothing" Don't Peek Portfolio?

pascalwager wrote:His rebalancing is only a quarterly adjustment back to market weighting.
If Sharpe holds the "market" portfolio he should never need to re-balance back to market weightings.
by QuietProsperity
Sun Jun 18, 2017 11:05 pm
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 86
Views: 8211

Re: Your Favorite Portfolio Tilts

US LC Momentum
US SC Value
DM LC Momentum
DM SC Value
EM Value (If better options arise in my lifetime I would split this into same format as US & DM)

My small bond allocation is all US Treasuries and TIPS.
by QuietProsperity
Fri Jun 09, 2017 1:06 pm
Forum: Investing - Theory, News & General
Topic: Why does S&P PE ratio matter
Replies: 30
Views: 2242

Re: Why does S&P PE ratio matter

1.I would be able to keep conviction so that would not be a problem. 2. It may not be perfect, but what is the downside of over weighting countries with low CAPE? They could go bust, but do the ones that do well make up for it? 3.It makes sense that higher evaluations will tend to equal lower retur...
by QuietProsperity
Fri Jun 09, 2017 12:09 pm
Forum: Investing - Theory, News & General
Topic: Why does S&P PE ratio matter
Replies: 30
Views: 2242

Re: Why does S&P PE ratio matter

I was confusing the ratios. These articles are suggesting that it has paid off to use CAPE ratio to time the market. If it is that easy, why doesn't everyone do it? 1. It is not easy by any means. Behavioral errors are extremely difficult when using long-term valuations. For example, in 1997 the CA...
by QuietProsperity
Fri Jun 09, 2017 11:02 am
Forum: Investing - Theory, News & General
Topic: Why does S&P PE ratio matter
Replies: 30
Views: 2242

Re: Why does S&P PE ratio matter

The long-term average PE ratio is just a random number. There is no reason why the long-term PE ratio has settled around 15-16. It is just that over the last century or so, investors have, on average, payed about 15-16 times the markets annual earnings. There is no reason why this average could not...
by QuietProsperity
Fri Jun 09, 2017 10:41 am
Forum: Investing - Theory, News & General
Topic: Opinions on this new fund: suitability for EM small and value
Replies: 20
Views: 3332

Re: Opinions on this new fund: suitability for EM small and value

Getting direct "small value" exposure in EM is somewhat difficult imo. Most EM Value funds are Large-Mid Cap. You might consider buying one of those funds (EYLD, FNDE, PXH, DFEVX if you have access) and pairing it with EEMS. In my personal opinion, I think the Large-Mid Cap Value space in Emerging m...
by QuietProsperity
Fri Jun 09, 2017 10:19 am
Forum: Investing - Theory, News & General
Topic: Why does S&P PE ratio matter
Replies: 30
Views: 2242

Re: Why does S&P PE ratio matter

The PE ratio and other Price-to-Whatever ratios are, imo, the core concepts for all financial decisions. When you buy anything, the prudent question to ask is "What am I paying for this versus what I will get out of it"? (I find most of us do this internally and depending on the person, it could eve...
by QuietProsperity
Wed Jun 07, 2017 3:00 pm
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 92
Views: 8878

Re: Real Estate: Direct vs Indirect Investment

I thought REITs could take many of the same deductions, maybe more in some cases depending on your other income, and then they only have to pay out their taxable income. I believe operating expenses, including I believe interest expenses, property taxes, and so on, are deducted when REITs calculate...
by QuietProsperity
Wed Jun 07, 2017 10:52 am
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 92
Views: 8878

Re: Real Estate: Direct vs Indirect Investment

I'm not sure I would say that makes direct individual investments in commercial real estate rather than investing through REITs "a bad thing," but it makes them a highly-questionable thing. That's because you would appear to be giving up diversification benefits without any offsetting financial adv...
by QuietProsperity
Tue Jun 06, 2017 4:38 pm
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 92
Views: 8878

Re: Real Estate: Direct vs Indirect Investment

I think the reason that it comes up all the time is that there is a big industry of pushers who make money convincing people that real estate can have higher or equal returns to stocks with less (or maybe no) risk. Fair point. It is ridiculous that people do that, but here we are. Probably does not...
by QuietProsperity
Tue Jun 06, 2017 3:29 pm
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 92
Views: 8878

Re: Real Estate: Direct vs Indirect Investment

I am not sure why some people are comparing direct real estate to stocks. They have very different risk/return profiles and are very different asset classes. Direct Real Estate can be thought of much more like Inflation Protected Corporate Bonds. Direct RE is a safer (Assuming you do not over-levera...
by QuietProsperity
Tue Jun 06, 2017 11:04 am
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 92
Views: 8878

Re: Real Estate: Direct vs Indirect Investment

Direct Pros: Some Sizable Tax Benefits Leverage (If you don't blow up) Emotionally Appealing: You can touch your investment; Market Values seem stable due to illiquid nature. You "Own" real estate. It sounds silly, but there are benefits to this. Rental Income has been (Historically) a near perfect ...
by QuietProsperity
Fri Jun 02, 2017 10:24 pm
Forum: Investing - Theory, News & General
Topic: Why do people make 10 year return predictions?
Replies: 23
Views: 2216

Re: Why do people make 10 year return predictions?

CyclingDuo wrote: Prime number years only when it comes to returns. 8-)
Ben Graham did suggest using PE 7...
by QuietProsperity
Fri Jun 02, 2017 5:47 pm
Forum: Investing - Theory, News & General
Topic: Why do people make 10 year return predictions?
Replies: 23
Views: 2216

Re: Why do people make 10 year return predictions?

My take is that setting realistic expectations and trying to predict unpredictable things are totally different beasts. Many would argue that when using long-term value metrics such as CAPE, you are not trying to predict the unpredictable, but setting realistic expectations. CAPE DDM Mkt Cap/GNP HH...
by QuietProsperity
Fri Jun 02, 2017 2:13 pm
Forum: Investing - Theory, News & General
Topic: Why do people make 10 year return predictions?
Replies: 23
Views: 2216

Re: Why do people make 10 year return predictions?

First, I think you made an error in your post (Bold are my corrections): If CAPE is like 50 , we'll probably have negative or near-zero returns. If CAPE is 10 , we might have 10% annualized. The usefulness of predictions depends on your financial goals, time horizon and quite frankly, your opinions ...