Search found 332 matches

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: 6432

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: 6432

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: 6432

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: 6432

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: 2297

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: 2297

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: 12532

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: 33209

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: 1152

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: 1219

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: 987

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: 9034

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: 175
Views: 18654

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: 10977

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: 7308

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: 3218

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: 7564

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: 1947

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: 1947

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: 1947

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: 3115

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: 1947

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: 8102

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: 8102

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: 8102

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: 8102

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: 8102

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: 2028

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: 2028

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: 2028

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 ...
by QuietProsperity
Tue May 30, 2017 12:45 pm
Forum: Investing - Theory, News & General
Topic: "Mind the Gap 2017"
Replies: 14
Views: 2172

Re: "Mind the Gap 2017"

Investors collectively own the market portfolio at all times. So if someone underperforms by market timing, somebody else must outperform. In other words, market timing must be a zero sum game. The claim is often made on this board that it's basically not possible to outperform consistently by mark...
by QuietProsperity
Fri May 26, 2017 10:02 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium: Risk Or Mispricing
Replies: 42
Views: 2824

Re: Larry Swedroe: Value Premium: Risk Or Mispricing

Grap, out of curiosity, do you use the ftse rafi funds or the russell rafi funds? I use the russell rafi funds for intl scv and em value. I use the Russell funds. When you back test them against each other the annualized difference was minor from what I've heard ~10 basis points. Plus I cannot buy ...
by QuietProsperity
Thu May 25, 2017 4:50 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium: Risk Or Mispricing
Replies: 42
Views: 2824

Re: Larry Swedroe: Value Premium: Risk Or Mispricing

Shortly after I became a member of this forum in 2010 I was saying that logic about the RAFI Fundamental Indexes. I'm paraphrasing of course but most posters were like, "blah grap, you don't know what you are talking about, Fama-French says P/B is the way to go grap, blah blah, Arnott is a gimmick ...
by QuietProsperity
Thu May 25, 2017 1:50 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium: Risk Or Mispricing
Replies: 42
Views: 2824

Re: Larry Swedroe: Value Premium: Risk Or Mispricing

Computer learning is fascinating, but us, the humans, are still in control of when we buy/sell at the portfolio level. We have had quant trading for a long time. Just like more and more money is flowing into indexes vs. active investing, I can see a time where more and more people start using robo-...
by QuietProsperity
Thu May 25, 2017 12:51 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium: Risk Or Mispricing
Replies: 42
Views: 2824

Re: Larry Swedroe: Value Premium: Risk Or Mispricing

This has nothing to do with the factor conversation, but I personally am so bearish on this whole AI/Deep Learning/Watson topic. I think we have pretty much reached peak computer tech ability and the challenge moving forward will be distributing it to all industries/countries. As far as revolutiona...
by QuietProsperity
Thu May 25, 2017 11:04 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium: Risk Or Mispricing
Replies: 42
Views: 2824

Re: Larry Swedroe: Value Premium: Risk Or Mispricing

I couldn't agree more on the low-cost aspect. In one respect, it is incredible that I can tilt towards my desired factors (beta,size,value,momentum & term) using a portfolio of 6 funds, that costs me a whole 0.22%/yr. Yes its more expensive than a 3-Fund, but nowhere near what it would have been 20 ...
by QuietProsperity
Thu May 25, 2017 10:20 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium: Risk Or Mispricing
Replies: 42
Views: 2824

Re: Larry Swedroe: Value Premium: Risk Or Mispricing

I bring up the "Replicating Anomalies" paper by Hou, Xue & Zhang again because the Fundamental Score (Fscore) was one of the quality/profitability factors that was found to be insignificant in further out of sample testing. This was of course viewed in isolation as a stand alone factor. It seems tha...
by QuietProsperity
Tue May 23, 2017 11:28 pm
Forum: Investing - Theory, News & General
Topic: Are risk factors just ways to take on additional risk?
Replies: 36
Views: 2615

Re: Are risk factors just ways to take on additional risk?

Historically speaking, size and value seem to fit the risk story of the 3-factor model very well (More risk, more return). Momentum is the key trouble spot: https://www.youtube.com/watch?v=Uu4OeLG4Pr4&t=23s On the subject of Momentum: ...Now you've seen the Fama French isn't a tautology, it can fail...
by QuietProsperity
Tue May 23, 2017 4:25 pm
Forum: Personal Finance (Not Investing)
Topic: Fortune 500 Financial Analyst vs CFP
Replies: 7
Views: 739

Re: Fortune 500 Financial Analyst vs CFP

As afan mentioned, there are a lot of questions around the financial planning industry and its future. In my personal opinion, it is starting to go through what the asset management industry started to go through about a decade ago (And is still going through) which is that consumers/clients are get...
by QuietProsperity
Tue May 23, 2017 12:33 pm
Forum: Personal Finance (Not Investing)
Topic: Question for Sole Proprietors / Small (Micro) Business Owners
Replies: 6
Views: 673

Re: Question for Sole Proprietors / Small (Micro) Business Owners

I could give a number of answers related to being a small business owner, but I'm not sure I fully understand your question. If you're asking about how I chose my current retirement plan, it was related to the business structure, first sole prop, then S Corp. The structure also affected how I paid ...
by QuietProsperity
Tue May 23, 2017 11:01 am
Forum: Personal Finance (Not Investing)
Topic: Question for Sole Proprietors / Small (Micro) Business Owners
Replies: 6
Views: 673

Re: Question for Sole Proprietors / Small (Micro) Business Owners

I would think that as a sole proprietor/micro business owner, personal finance and business finances are mostly blended together? It is recommended to keep as much separation as possible between business and personal finances. Different banks, different lines of credit, etc. Business expenses are t...
by QuietProsperity
Tue May 23, 2017 10:26 am
Forum: Personal Finance (Not Investing)
Topic: Question for Sole Proprietors / Small (Micro) Business Owners
Replies: 6
Views: 673

Re: Question for Sole Proprietors / Small (Micro) Business Owners

Well...a lot of those topics aren't "personal finance" ones unless all business-related topics are. A sales workflow was the hardest for me. I have basically always operated without an accountant. I have a bookkeeper now, but in the beginning I did all the books and taxes and learned a ton from tha...
by QuietProsperity
Mon May 22, 2017 11:40 pm
Forum: Personal Finance (Not Investing)
Topic: Question for Sole Proprietors / Small (Micro) Business Owners
Replies: 6
Views: 673

Question for Sole Proprietors / Small (Micro) Business Owners

I know most who frequent this site are fairly knowledgeable & disciplined when it comes to their personal finances, but I know at some point that was not the case. I am looking to do some research and I wanted to ask the following question. For those who are, or were, sole proprietors, self-employed...
by QuietProsperity
Mon May 22, 2017 9:49 pm
Forum: Personal Finance (Not Investing)
Topic: What type of account would you recommend for a small business?
Replies: 1
Views: 298

Re: What type of account would you recommend for a small business?

1. Traditional bank with minimal interest checking account and use the laddered CDs. 2. Something like a Fidelity Cash management with brokerage account for the LLC where I put the money in a conservative fund that may earn 1%. I am able to take small amount of risk with this money (I am assuming 1...
by QuietProsperity
Sat May 20, 2017 9:49 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2870

Re: Larry Swedroe: Problems With The Factor Zoo

Why not just screen for stocks with "quality" or whatever other "factors", rather than funds? For myself, three reasons: 1. With how inexpensive factor funds are these days, the time/cost trade off of holding a few funds versus building a portfolio with small-cap value/quality stocks, large-cap mom...
by QuietProsperity
Fri May 19, 2017 10:17 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2870

Re: Larry Swedroe: Problems With The Factor Zoo

Anyone seen an intuitive argument for quality or profitability that you found convincing? As a screen, I like it. As a stand alone factor, I have not. To me, factors like size, value and momentum have stories I can believe in. The quality/profitability story, at least as a standalone factor, has al...
by QuietProsperity
Fri May 19, 2017 11:18 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2870

Re: Larry Swedroe: Problems With The Factor Zoo

What I found interesting in that paper, "Replicating Anomalies" by Hou, Xue & Zhang, is that a number of the Quality/Profitability factors did not pass their testing. The following were all found to be insignificant: Return on Equity (6 and 12-month re-balancing periods) Return on Asse...
by QuietProsperity
Tue May 16, 2017 10:51 am
Forum: Investing - Theory, News & General
Topic: What Will Burst the Next Bubble?
Replies: 66
Views: 7509

Re: What Will Burst the Next Bubble?

This is a good one. I think we are slowly losing our benefits. Between hidden inflation (and benefits that don't track it well), raising the eligible age, and AMT (which more and more people will hit with inflation) we are already losing benefits and paying higher taxes. And with the deteriorating ...