Search found 2773 matches

by Random Walker
Mon Jul 16, 2018 10:00 am
Forum: Investing - Theory, News & General
Topic: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?
Replies: 17
Views: 664

Re: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?

There is no 'rebalancing bonus'. That is a myth and nothing more. As noted by others, rebalancing is about controlling the volatility , not necessarily the risk, of your portfolio. I agree with you that risk entails dimensions beyond volatility, but no matter what those characteristics are that com...
by Random Walker
Mon Jul 16, 2018 9:57 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Drums Of (Trade) War
Replies: 5
Views: 479

Re: Larry Swedroe: The Drums Of (Trade) War

I think I learned that ISV is an even better portfolio diversifier than EM. The reason being that the companies in ISV are smaller and much more subject to local economic conditions. Larger EM companies more subject to the larger effects common to TSM and Tot Int.

Dave
by Random Walker
Mon Jul 16, 2018 9:45 am
Forum: Investing - Theory, News & General
Topic: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?
Replies: 17
Views: 664

Re: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?

Advisor suggested new money go into the total international fund that incorporated both international small value and EM into a single fund rather than maintain separate ISV and EM funds. The issue was not quite so black and white. I really wanted to increase my future exposure to EMV, and I didn’t ...
by Random Walker
Mon Jul 16, 2018 9:34 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Drums Of (Trade) War
Replies: 5
Views: 479

Re: Larry Swedroe: The Drums Of (Trade) War

danielc wrote:
Mon Jul 16, 2018 9:29 am

I'm in the accumulation phase and CAPE is high. I'm rooting for a market crash.
I’m curious, looking at the relative valuations in the article, does that make you want to alter your equity allocations? Change US:Int?, increase ISV exposure?, increase EM or EMV exposure?

Dave
by Random Walker
Mon Jul 16, 2018 9:24 am
Forum: Investing - Theory, News & General
Topic: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?
Replies: 17
Views: 664

Re: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?

Rebalancing controls risk and offers the opportunity to buy low and sell high. That being said, when possible, generally more efficient to rebalance with someone else’s money. That means using a core or total market fund that rebalances internally as other investors buy and sell shares is more effic...
by Random Walker
Mon Jul 16, 2018 9:11 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Drums Of (Trade) War
Replies: 5
Views: 479

Larry Swedroe: The Drums Of (Trade) War

http://www.etf.com/sections/index-investor-corner/swedroe-drums-trade-war?nopaging=1 Excellent Bogleheadish article. Larry uses the specific example of the current potential for a trade war to emphasize many more general important BH points: have a plan and stick to it, passive beats active, valuati...
by Random Walker
Sun Jul 15, 2018 10:30 am
Forum: Investing - Theory, News & General
Topic: Saving 20% of paycheck isn't enough
Replies: 91
Views: 10286

Re: Saving 20% of paycheck isn't enough

There is a lot that davidsorenson32 post that I agree with. I agree, forget about saving a percentage of income. Instead think about achieving a number that has a high likelihood of achieving a standard of living that the investor thinks is attainable and reasonable. The earlier the investor gets cl...
by Random Walker
Sun Jul 15, 2018 10:16 am
Forum: Investing - Theory, News & General
Topic: Has the range of expected stock market returns ever been larger than today?
Replies: 15
Views: 1315

Re: Has the range of expected stock market returns ever been larger than today?

This is at the limits of my understanding, but I’ll give it a shot. Expected returns are unconditional: meaning they are long term independent of time horizon. It’s an expected return for next year and 10,20,30 years from now. The estimate is always a mean with a big distribution around it. The hist...
by Random Walker
Fri Jul 13, 2018 8:31 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

I think the value of Larry’s factor book is way more generalizable (is that a word?) than the factors themselves. His 5 criteria for evaluating factors can be used to evaluate the possible benefit of any potential portfolio addition. Appreciating that all components of the portfolio meet the persis...
by Random Walker
Fri Jul 13, 2018 11:48 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Know Your Investor Personality
Replies: 16
Views: 1429

Re: Larry Swedroe: Know Your Investor Personality

Boy, Timelord and I are on the same page of the play book today.
by Random Walker
Fri Jul 13, 2018 10:43 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Know Your Investor Personality
Replies: 16
Views: 1429

Re: Larry Swedroe: Know Your Investor Personality

While it may seem counter intuitive, the more I have, the more conservative have been investing because I have more to lose. I have been very aware of this change occurring over the past 5 years. Same here. I was surprised. Of the 4 categories mentioned, I seemed to fall most in conservative. Dave
by Random Walker
Fri Jul 13, 2018 10:08 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Homer J, I’m not expecting anywhere near the accuracy &/or precision you describe. Then I don't understand how you can "tune" your portfolio to be super efficient using factors. Larry has said many times that one can lower their equity exposure, if they use factors to give themselves higher expecte...
by Random Walker
Fri Jul 13, 2018 9:25 am
Forum: Investing - Theory, News & General
Topic: Saving 20% of paycheck isn't enough
Replies: 91
Views: 10286

Re: Saving 20% of paycheck isn't enough

When people talk about saving a certain %, do they generally refer to % of gross paycheck or net after taxes, Medicare, SSC?

Dave
by Random Walker
Fri Jul 13, 2018 7:23 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Know Your Investor Personality
Replies: 16
Views: 1429

Larry Swedroe: Know Your Investor Personality

http://www.etf.com/sections/index-investor-corner/swedroe-know-your-investor-personality?nopaging=1 We all have our own unique ability, willingness, and need. Turns out questionnaires are quite poor at helping us determine these for ourselves. We are all influenced by numerous cognitive and emotiona...
by Random Walker
Fri Jul 13, 2018 6:13 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Fennewaldaj, You and I think very similarly. We weigh more heavily the factors we have the greatest belief in, perhaps we only differ in one respect. Even the SV fund with the deepest exposure to SmB and HmL still has a huge dose of the market factor, so there’s plenty of that in a portfolio without...
by Random Walker
Thu Jul 12, 2018 10:12 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

But that's just adding another risk. What if factors don't deliver in the future like they did in the past? Exactly! The point is that market beta is just another factor, no more and no less. It also may not deliver over any given investing horizon. Sounds like a strong reason to diversify across i...
by Random Walker
Thu Jul 12, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Yes, the academic publishing effect. That is observed premiums are cut after the academics publish papers about them. Also hard to believe that the behavioral part of the factor premiums will go away, have the quantitative investors repealed the cycles of greed and fear? I think not. The more I lea...
by Random Walker
Thu Jul 12, 2018 7:25 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Homer J, I’m not expecting anywhere near the accuracy &/or precision you describe. I’m more setting an AA based on generalities. It’s because of that lack of numeric foresight that I diversify the portfolio in every way I can. Historically factors (including market) have provided premia over the lon...
by Random Walker
Thu Jul 12, 2018 6:47 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Less of the more expensive factor fund is required to achieve desired tilt Then you are depending WAY too much on the factor fund returning exactly what you THINK it will. You and Larry make this way too hard. You calculate some expected return based on past results from some factor, then you put 1...
by Random Walker
Thu Jul 12, 2018 4:02 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

When has anyone recommending or selling a fund with a higher expense ratio ever said anything other than "yes, it costs a little more, but it's worth it?" And yet, Morningstar continues to say, most recently in 2016, that (my boldfacing) Fund Fees Predict Future Success or Failure The expense ratio...
by Random Walker
Thu Jul 12, 2018 3:58 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

I think Larry has written that the valuation spread between value and growth has not really decreased compared to the mid 1990’s, indicating that there is not significant chasing of the value factor. Dave Bernstein expects the small and value premiums to both drop but not disappear. His advice is t...
by Random Walker
Thu Jul 12, 2018 2:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

I think Larry has written that the valuation spread between value and growth has not really decreased compared to the mid 1990’s, indicating that there is not significant chasing of the value factor.

Dave
by Random Walker
Thu Jul 12, 2018 1:23 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

I wouldn’t sell an old fund and experience capital gains just to invest in a new fund with deeper factor exposures and lower costs, but I would strongly consider pointing new money towards the new fund.

Dave
by Random Walker
Wed Jul 11, 2018 2:25 pm
Forum: Investing - Theory, News & General
Topic: A Great Investor has only one word of advice
Replies: 7
Views: 1259

Re: A Great Investor has only one word of advice

Lots of ways to diversify: geography, asset classes, styles, factors, alternatives.

Dave
by Random Walker
Wed Jul 11, 2018 1:13 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Tax efficiency are also and important cost that can easily overwhelm the expense ratio. Total Stock Market funds (incl ETFs) from Vanguard and iShares are extremely tax efficient. So, for example, you would be better off with a portfolio that has TSM at its core plus a tilt than an otherwise equiva...
by Random Walker
Wed Jul 11, 2018 12:36 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

When I was making the decision to go the advisor route, I created lots of spreadsheets enumerating the costs and potential benefits. This essay covers the “stuff I don’t even know that I don’t know” column of that spreadsheet.

Dave
by Random Walker
Wed Jul 11, 2018 9:34 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

However, Vanguard has introduced Factor related funds. I have read a thread here that discusses this but I have never done a comparison with these new funds compared to DFA products. Also, there are ETFs out there that factor tilt and these could be considered as DFA substitutes. There are new alte...
by Random Walker
Wed Jul 11, 2018 9:29 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3295

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

The alternatives are truly alternatives to both stocks and bonds. They are different animals. But one needs to take from either stocks or bonds to create their position in the typical portfolio. These alternatives have equity like expected returns with about half the volatility of equity and no corr...
by Random Walker
Wed Jul 11, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Re: Larry Swedroe: Look Past Expense Ratios

Larry doesn’t mention it in the article, but the choice of a more expensive fund with deeper exposures to the desired factors can make good sense at the portfolio level. If one is targeting a certain factor exposure within the portfolio, it likely can be achieved with less of the more expensive fund...
by Random Walker
Wed Jul 11, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5825

Larry Swedroe: Look Past Expense Ratios

http://www.etf.com/sections/index-investor-corner/swedroe-look-past-expense-ratios?nopaging=1 Good article showing that there is a lot more to consider than just the expense ratio when looking at funds. I think for most of us Bogleheads, the ER is easy to appreciate. It’s certainly a good starting p...
by Random Walker
Tue Jul 10, 2018 11:19 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3295

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Nedsaid,
I agree human behavior doesn’t change, and I like behavioral stories + limits to arbitrage as well as risk explanations. I’ve become a big fan of value because there are both very good risk and behavioral explanations behind it.

Dave
by Random Walker
Tue Jul 10, 2018 10:55 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3295

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

This is my concern about alternatives as the big institutions essentially financialize these asset classes. Pretty much, lots of money floods in and depresses returns for everyone. I agree that financialization is a big concern as well, but when there is a strong risk story behind a premium, then a...
by Random Walker
Mon Jul 09, 2018 11:04 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3295

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Not at all a marketing campaign. If I “market” anything, I’d say it’s portfolio efficiency. There is no doubt that lack of portfolio efficiency is a real cost, and that is excluding the behavioral errors one sets himself up for with an inefficient portfolio. I have clearly said many times something ...
by Random Walker
Mon Jul 09, 2018 10:16 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3295

Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

http://www.aaii.com/journal/article/diversifying-through-reinsurance-and-marketplace-lending-interval-funds Good article describing the diversification benefits to a portfolio of alternative lending and reinsurance. For those interested, Larry goes into more detail in his 2018 edition of Reducing Th...
by Random Walker
Fri Jul 06, 2018 9:05 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Active’s Last Hope
Replies: 1
Views: 582

Larry Swedroe: Active’s Last Hope

http://www.etf.com/sections/index-investor-corner/swedroe-actives-last-hope Larry has reported many times on the SPIVA, S&P versus active, scorecard. This has always been a comparison of absolute returns. Now SPIVA has generated comparisons on a risk adjusted basis, looking at Sharpe ratios. Relativ...
by Random Walker
Thu Jul 05, 2018 11:28 am
Forum: Investing - Theory, News & General
Topic: Anyone tilting heavy to international based on current forecasts?
Replies: 38
Views: 3923

Re: Anyone tilting heavy to international based on current forecasts?

Thx1138, We agree. I was just stating that most US investors could probably rationally increase international exposure closer to or all the way to world market cap weighting, and that given current valuations, perhaps an opportunistic time to make that move. It would be a permanent allocation change...
by Random Walker
Thu Jul 05, 2018 10:44 am
Forum: Investing - Theory, News & General
Topic: Anyone tilting heavy to international based on current forecasts?
Replies: 38
Views: 3923

Re: Anyone tilting heavy to international based on current forecasts?

But these are prognostications by the market. The market prices risk. Risk perceived by the market lowers prices, decreases P/E’s, and thus results in higher expected returns. Sure, but CAPE and other valuation metrics have failed to have market timing value within the US. Is there some evidence th...
by Random Walker
Thu Jul 05, 2018 9:23 am
Forum: Investing - Theory, News & General
Topic: Do Advisers Add $$$ Value?
Replies: 71
Views: 5378

Re: Do Advisers Add $$$ Value?

- whereas if you just moved that money to a custodian under the supervision of an adviser, they shift their thinking into viewing that savings as long term investments. They consider themselves accountable to their adviser when they consider spending it. I have an advisor and have very much found t...
by Random Walker
Thu Jul 05, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: Do Advisers Add $$$ Value?
Replies: 71
Views: 5378

Re: Do Advisers Add $$$ Value?

Why is everyone assuming that a large number of advisers do not make some of the same mistakes as the much scorned DIY-investors, such as selling at the bottom? I think the answer is objectivity. It’s not their money, so they should have a lot less emotion invested in it than the investor himself. ...
by Random Walker
Thu Jul 05, 2018 9:05 am
Forum: Investing - Theory, News & General
Topic: Anyone tilting heavy to international based on current forecasts?
Replies: 38
Views: 3923

Re: Anyone tilting heavy to international based on current forecasts?

Have similar forecasts in the past regarding the difference between US and International returns been correct better than a coin toss? I’m pretty sure they haven’t been. Is there some reason to expect them to suddenly be accurate this time? Probably not... The forecasters at this very moment are ca...
by Random Walker
Thu Jul 05, 2018 9:03 am
Forum: Investing - Theory, News & General
Topic: Anyone tilting heavy to international based on current forecasts?
Replies: 38
Views: 3923

Re: Anyone tilting heavy to international based on current forecasts?

I have taken advantage of the difference in the valuations to increase my international allocation to its global market weight of about 50%. Not really trying to time the market. I wanted to increase my international allocation, and valuations were just another extra catalyst to make the move.

Dave
by Random Walker
Thu Jul 05, 2018 8:59 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Avoid Private Real Estate Assets
Replies: 9
Views: 1650

Larry Swedroe: Avoid Private Real Estate Assets

http://www.etf.com/sections/index-investor-corner/swedroe-avoid-private-real-estate-assets Institutional private real estate underperforms publicly available REITs, and the story is even worse on a risk adjusted basis. Worse on risk adjusted basis because the private real estate investments use much...
by Random Walker
Wed Jul 04, 2018 3:41 pm
Forum: Investing - Theory, News & General
Topic: Switch to LT bonds in this falling rate environment?
Replies: 43
Views: 2691

Re: Switch to LT bonds in this falling rate environment?

I keep a little Excel plot of the Treasury and Muni yield curves. Coincidentally, I updated it today and noticed the same thing. Rates have decreased over last few months (Don’t remember when I updated last). Also noticed something else. The yield curve seemed pretty much a near straight line with u...
by Random Walker
Wed Jul 04, 2018 11:15 am
Forum: Investing - Theory, News & General
Topic: If you tilt toward Small Cap Value, how much do you tilt?
Replies: 38
Views: 2564

Re: If you tilt toward Small Cap Value, how much do you tilt?

The reason I’ve asked the above question is that I wonder a bit if I’ve been letting the tax tail wag the returns dog. I’ve used for example an EM Core Fund in taxable but am wondering if going with the less tax efficient EMV fund might yield higher expected after tax return in taxable even though i...
by Random Walker
Wed Jul 04, 2018 8:48 am
Forum: Investing - Theory, News & General
Topic: If you tilt toward Small Cap Value, how much do you tilt?
Replies: 38
Views: 2564

Re: If you tilt toward Small Cap Value, how much do you tilt?

For those heavily tilting to SV, I’m curious whether your investing primarily in taxable or tax advantaged space. If taxable, has that affected which vehicles you have chosen?

Dave
by Random Walker
Tue Jul 03, 2018 9:08 pm
Forum: Investing - Theory, News & General
Topic: 28 w/heavy small cap tilt?
Replies: 41
Views: 2944

Re: 28 w/heavy small cap tilt?

Many people would say that it is incredibly risky to put all or nearly all of the equity bet on a single factor, market beta. At least SV equity is exposed to three factors. No, in fact almost no one who actually understands FF3 or FF5 or any other of the various zoo of factors would say it is "inc...
by Random Walker
Tue Jul 03, 2018 9:03 pm
Forum: Investing - Theory, News & General
Topic: 28 w/heavy small cap tilt?
Replies: 41
Views: 2944

Re: 28 w/heavy small cap tilt?

Personally while I see good evidence for a SV effect and likely persistence of it the reality is the magnitude of it may be severely attenuated going forward. I'm not willing to crank down my equity allocation on the faith that the SV premium will reappear and persist going forward to match histori...
by Random Walker
Tue Jul 03, 2018 1:27 pm
Forum: Investing - Theory, News & General
Topic: 28 w/heavy small cap tilt?
Replies: 41
Views: 2944

Re: 28 w/heavy small cap tilt?

Personally while I see good evidence for a SV effect and likely persistence of it the reality is the magnitude of it may be severely attenuated going forward. I'm not willing to crank down my equity allocation on the faith that the SV premium will reappear and persist going forward to match histori...
by Random Walker
Mon Jul 02, 2018 10:38 pm
Forum: Investing - Theory, News & General
Topic: Jason Zweig: Congrats Investors! You’re Behaving Less Badly Than Usual
Replies: 17
Views: 2913

Re: Jason Zweig: Congrats Investors! You’re Behaving Less Badly Than Usual

It is always a good read from Mr. Zweig; thanks for posting the article. I would be interested to see the decile or quintile results from the same group. Does the performance of the top 10% or 20% of investors actually improve to the point of developing a positive gap w.r.t. the funds studied? Pres...