Search found 315 matches

by QuietProsperity
Sun Jun 18, 2017 11:05 pm
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 80
Views: 4876

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: 1469

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: 1469

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: 1469

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: 2810

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 ...
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: 1469

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...
by QuietProsperity
Wed Jun 07, 2017 3:00 pm
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 86
Views: 5726

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: 86
Views: 5726

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 fin...
by QuietProsperity
Tue Jun 06, 2017 4:38 pm
Forum: Investing - Theory, News & General
Topic: Real Estate: Direct vs Indirect Investment
Replies: 86
Views: 5726

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: 86
Views: 5726

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: 86
Views: 5726

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 nea...
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: 1747

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: 1747

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: 1747

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
Thu Jun 01, 2017 12:37 am
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 1351
Views: 232993

Re: What are you up YTD? [Year To Date]

12.39% 83S/17B
by QuietProsperity
Tue May 30, 2017 12:45 pm
Forum: Investing - Theory, News & General
Topic: "Mind the Gap 2017"
Replies: 14
Views: 1935

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: 2376

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: 2376

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 gim...
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: 2376

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: 2376

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: 2376

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...
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: 2376

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...
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: 28
Views: 1293

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 ...
by QuietProsperity
Tue May 23, 2017 4:25 pm
Forum: Personal Finance (Not Investing)
Topic: Fortune 500 Financial Analyst vs CFP
Replies: 7
Views: 629

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: 558

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: 558

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: 558

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 to...
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: 558

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-empl...
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: 230

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: 2527

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 s...
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: 2527

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: 2527

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: 6603

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 ...
by QuietProsperity
Tue May 16, 2017 9:46 am
Forum: Investing - Theory, News & General
Topic: What Will Burst the Next Bubble?
Replies: 66
Views: 6603

Re: What Will Burst the Next Bubble?

As always, this is just speculation and for fun. Nothing I say below has an impact on my portfolio, only my set rules do. In my opinion, I do not think there are any major bubbles related to markets right now (Maybe Bitcoin). The combination of 2000 and 2008 over the last two decades has sent so man...
by QuietProsperity
Fri May 12, 2017 11:40 am
Forum: Investing - Theory, News & General
Topic: Rob Arnott [buy emerging market equities vs. US stocks]
Replies: 40
Views: 3064

Re: Rob Arnott

I think making adjustments on the margins is fine if you have really done your homework and know yourself, because chances are you will be "early" in these decisions. Bogle, Bernstein, Ferri etc. are comfortable with the idea of adjusting strategic AAs as long as you stick with it. It is s...
by QuietProsperity
Wed May 03, 2017 10:14 am
Forum: Investing - Theory, News & General
Topic: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg
Replies: 64
Views: 6950

Re: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg

I heard Ted Seides on the Invest Like The Best podcast this week and he seems to be a bit more humble about the experience in that forum compared to the Bloomberg article. With that said, there were still a number of excuses/justifications/reasons etc. given for the loss, but two stuck out to me. Ve...
by QuietProsperity
Wed May 03, 2017 12:48 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe Article On Enhancing Momentum Strategies
Replies: 60
Views: 5724

Re: Larry Swedroe Article On Enhancing Momentum Strategies

Thanks for posting Larry's article. I am still working on getting a better understanding of momentum. Could someone do a plain English explanation of cross-sectional momentum vs. time series momentum? I would really appreciate it. Imho, cross-sectional and time-series are a bit confusing for me. I ...
by QuietProsperity
Wed Apr 19, 2017 4:04 pm
Forum: Investing - Theory, News & General
Topic: Is it necessary to diversify across Factors?
Replies: 123
Views: 7176

Re: Is it necessary to diversify across Factors?

For example, go to Morningstar and chart the past performance of the Vanguard Small-Cap Value Index fund versus the Vanguard Small-Cap Growth Index fund. Broadly speaking, after listening to the factor mavens you would expect a huge difference in their performance. Go look. I have always wondered a...
by QuietProsperity
Tue Apr 18, 2017 8:57 pm
Forum: Investing - Theory, News & General
Topic: Is it necessary to diversify across Factors?
Replies: 123
Views: 7176

Re: Is it necessary to diversify across Factors?

Volatility is not to be taken in isolation. If we would stop talking about risk and return and start talking about expected return and expected volatility of return we would understand that both terms are information about one thing, namely return. It is a lot easier if one starts with a picture of...
by QuietProsperity
Tue Apr 18, 2017 5:49 pm
Forum: Investing - Theory, News & General
Topic: Is it necessary to diversify across Factors?
Replies: 123
Views: 7176

Re: Is it necessary to diversify across Factors?

ImmigrantSaver wrote:For those of you doing factor based investing but don't have the access to DFA or AQR funds, which funds/ETFs do you use instead? TIA


For me:

iShares
Vanguard
Schwab
by QuietProsperity
Tue Apr 18, 2017 5:48 pm
Forum: Investing - Theory, News & General
Topic: Is it necessary to diversify across Factors?
Replies: 123
Views: 7176

Re: Is it necessary to diversify across Factors?

Note, however, that short term volatility compounds into long term uncertainty. It is a misconception to think that volatility somehow evaporates over long periods of time. Whether people want to apply the term "risk" to the fact that future wealth held in volatile investments is subject ...
by QuietProsperity
Tue Apr 18, 2017 4:41 pm
Forum: Investing - Theory, News & General
Topic: Is it necessary to diversify across Factors?
Replies: 123
Views: 7176

Re: Is it necessary to diversify across Factors?

Do you believe a diversified U.S. stock portfolio has a higher expected return than U.S. Treasuries? Yes Do you believe those stocks are riskier than those bonds? It depends on time-horizon in my opinion. The longer the time-horizon, the less risky stocks become, eventually becoming less risky than...
by QuietProsperity
Tue Apr 18, 2017 3:00 pm
Forum: Investing - Theory, News & General
Topic: Is it necessary to diversify across Factors?
Replies: 123
Views: 7176

Re: Is it necessary to diversify across Factors?

Full Disclosure: I invest in factor funds (Value and Momentum; US and Foreign) and believe that over my lifetime of investing 50+ years (I hope!), by gaining exposure to these factors, it will improve my equity diversification, and increase my returns on the equity portion of my portfolio by 1-1.5%...
by QuietProsperity
Mon Apr 17, 2017 2:24 pm
Forum: Investing - Theory, News & General
Topic: Those that hold international equities at market-cap weight: what is your method?
Replies: 24
Views: 2524

Re: Those that hold international equities at market-cap weight: what is your method?

Using the ETFs since they are available to more people (i.e. No Admiral shares outside of Vanguard) we see that: VTI (US) - 0.05% VEU (World ex-US) - 0.11% VT (World w/ US) - 0.11% VTI (54%) / VEU (46%) - 0.08% I would say that the 0.03% increase is what I consider a convenience/simplicity charge. Y...
by QuietProsperity
Thu Apr 13, 2017 1:43 pm
Forum: Investing - Theory, News & General
Topic: Future Return - Siegel vs “new normal”
Replies: 21
Views: 2429

Re: Future Return - Siegel vs “new normal”

Even with a 50 year horizon, prices matter. The 1929 investor who bought at an expensive peak had much worse 50 year performance than the historical average. True, but it is not that big of a deal at those kind of time horizons. Once again: 1928-2016 (89 Years) Total Period Real CAGR: 6.38% If you ...
by QuietProsperity
Wed Apr 12, 2017 5:21 pm
Forum: Investing - Theory, News & General
Topic: Future Return - Siegel vs “new normal”
Replies: 21
Views: 2429

Re: Future Return - Siegel vs “new normal”

The history is pretty clear on starting valuations versus future returns and it comes down to time horizon. If you have a time horizon of 40 years and really do not expect to engage in market timing, the valuation you invest at does not make a massive difference. Valuations (At least LT valuation me...
by QuietProsperity
Mon Apr 10, 2017 6:17 pm
Forum: Investing - Theory, News & General
Topic: Vanguard VWO - no Samsung or South Korea
Replies: 17
Views: 1525

Re: Vanguard VWO - no Samsung or South Korea

Well in a 70/30 portfolio, with what some would call an aggressive allocation to EM, 10%, over the last 12 years, the return difference of using VWO or EEM was 0.08% per year. Not enough to make any sort of difference. Porfolio Visualizer Backtest If you use a FTSE based DM fund, I would stick with ...
by QuietProsperity
Thu Mar 16, 2017 11:28 am
Forum: Investing - Theory, News & General
Topic: Why go with an 80% stock / 20% bond portfolio?
Replies: 342
Views: 24112

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

Per Vanguard, the worst year for a 100% stock portfolio was 1931 with a loss of 43.1% (lost money in 25 of 90 years). Is there something I'm missing here? I could not read through the whole thread so I do not know if someone else pointed it out, but be careful about looking at JUST annual data. In ...
by QuietProsperity
Sun Mar 12, 2017 12:06 am
Forum: Investing - Theory, News & General
Topic: Reasons not to check the account balance too often
Replies: 42
Views: 4177

Re: Reasons not to check the account balance too often

Prospect theory says that losses are more painful than the pleasure of gains. The more often you check, the more often you'll see a loss, and the more unhappy you'll be as a human being. https://2fhpz32auuml24khv2oi0ce1-wpengine.netdna-ssl.com/wp-content/uploads/2017/03/Longboard-Market-Experience....
by QuietProsperity
Thu Jan 26, 2017 12:54 am
Forum: Investing - Theory, News & General
Topic: Factor-Diversified Portfolio
Replies: 175
Views: 15673

Re: The fine print.

QuietProsperity: Are advisor's fees included in the DFA portfolio? Any differences in tax-efficiency? Simplicity? Thank you and best wishes. Taylor Yes the DFA portfolio did better, but no guarantees moving forward, and thinking in this way misses the overall point. Find the portfolio you believe i...

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