Search found 1970 matches

by Random Walker
Mon Oct 23, 2017 8:55 am
Forum: Investing - Theory, News & General
Topic: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?
Replies: 31
Views: 1893

Re: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?

Packer16 wrote Factors can explain the past but not the future. They may give us hints but to invest as though they can provide additional return or "diversification" by concentration, an oxymoron if I ever heard one, I believe is speculative. This idea also is contrary to the idea that the market p...
by Random Walker
Sun Oct 22, 2017 11:47 pm
Forum: Investing - Theory, News & General
Topic: Jason Zweig: Guard Against Complacency
Replies: 5
Views: 974

Jason Zweig: Guard Against Complacency

http://www.etf.com/sections/features-and-news/zweig-guard-against-complacency?nopaging=1 Good interview of Jason Zweig. Talks about the book he wrote that came out 10 years ago. Comments that ERs are super low but we may be worrying about basis point ER differences when our behavior gap (the differe...
by Random Walker
Sun Oct 22, 2017 11:09 pm
Forum: Investing - Theory, News & General
Topic: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?
Replies: 31
Views: 1893

Re: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?

AlohaJoe, I just sucked it up and paid a bunch of capital gains to make my allocation change. I certainly feel the pain of paying taxes, but they do need to be paid eventually. Moreover, I figured if my risk tolerance has truly changed I should make the change immediately. I think a lot depends wher...
by Random Walker
Sun Oct 22, 2017 7:19 pm
Forum: Investing - Theory, News & General
Topic: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?
Replies: 31
Views: 1893

Re: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?

TD2626 wrote Is it possible that returns from factors are simply explained by excess risk? For example, some could argue that small cap stocks are more risky and therefore over the long run have higher expected returns in exchange for the investor having to suffer through that higher volatility. Som...
by Random Walker
Sun Oct 22, 2017 3:56 pm
Forum: Investing - Theory, News & General
Topic: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?
Replies: 31
Views: 1893

Re: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?

GarlandWhizzer, You wrote I am now ready to start a modest glide path that increases bonds and decreases stocks, lowering my overall portfolio risk. It's about time. Good news is that I've been lucky overall and been fully on board the equity train for several exuberant bull equity markets over the ...
by Random Walker
Sun Oct 22, 2017 10:53 am
Forum: Investing - Theory, News & General
Topic: I believe one can beat the market with a simple contrarian strategy. Am I a fool?
Replies: 32
Views: 3507

Re: I believe one can beat the market with a simple contrarian strategy. Am I a fool?

Benfromtotonto, Have you read Value Averaging by Michael Edleson? It describes investing a lump sum, but can easily adapt as you are doing. It’s a favorite book of William Bernstein. Basically assume a certain portfolio growth path and add money periodically to it: more when markets down, less when ...
by Random Walker
Sun Oct 22, 2017 10:15 am
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 175
Views: 18691

Re: My Favorite Alternative Funds

Smackboy wrote When I look at investments like SRRIX or QSPIX I don't consider them as replacement for fixed income or equity, they are something else. They certainly are something else. But when one is considering creating a position in his portfolio for one of these alternatives, he needs to decid...
by Random Walker
Sun Oct 22, 2017 10:08 am
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 175
Views: 18691

Re: My Favorite Alternative Funds

Here are a few potential working definitions of risk: Standard Deviation Maximal drawdown in severe bear market Not being able to maintain current lifestyle in retirement Losing the ability to achieve needs (as opposed to wants) Losing so much, one can’t stick to the plan any longer I think it’s rea...
by Random Walker
Sun Oct 22, 2017 9:58 am
Forum: Investing - Theory, News & General
Topic: After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?
Replies: 31
Views: 1893

After Market Beta’s Long Run Do you Consider Diversifying Into Other Factors?

It seems the factor talk has declined quite a bit recently. Market beta has had a great 8 year run. With P/E ratios very high and interest rates very low, I’m wondering if any Bogleheads are increasing their interest in diversifying across other potential sources of return: cross sectional Momentum,...
by Random Walker
Thu Oct 19, 2017 9:59 pm
Forum: Investing - Theory, News & General
Topic: For those near retirement and rebalanced to Bonds...
Replies: 34
Views: 3400

Re: For those near retirement and rebalanced to Bonds...

In making these peri-retirement decisions I think its good to remember that equities can lose 50% in any given year and that even a 50/50 portfolio has probably 80-85% of its risk on the equity side.

Dave
by Random Walker
Thu Oct 19, 2017 7:27 pm
Forum: Investing - Theory, News & General
Topic: For those near retirement and rebalanced to Bonds...
Replies: 34
Views: 3400

Re: For those near retirement and rebalanced to Bonds...

I've been talking about this quite a bit lately. I really like William Bernstein's e-book on life cycle investing. He makes the point that high past returns results in high valuations and low future expected returns. Rather than blindly folllowing an age based glide path to retirement, I think it ma...
by Random Walker
Thu Oct 19, 2017 9:02 am
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 4829

Re: The overselling of international diversification

3CT_paddler wrote Several years ago this board was predominantly in support of a global cap-weighted portfolio (after some really good years for international) with many posters strongly advocating that global cap weighting is the only way to go. Now it's almost a 180 here as far as vocal support fo...
by Random Walker
Wed Oct 18, 2017 4:22 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe:Better To Face The Correction
Replies: 51
Views: 6370

Re: Larry Swedroe:Better To Face The Correction

For someone in their 20’s or 30’s, I’d say just stick with the plan. For someone within a decade of retirement, I think it makes a lot of sense to look at where he is relative to goals and possibly cool off the AA some. The arbitrary glide paths based on age of target date funds I believe can be imp...
by Random Walker
Wed Oct 18, 2017 8:27 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe:Better To Face The Correction
Replies: 51
Views: 6370

Re: Larry Swedroe:Better To Face The Correction

When I think of all the high tech algorithmic nanosecond trading on Wall Street, I sort of smile to myself because I’m already there; I already have what the computer is buying. (Of course I’m holding on to what the other computer is selling :-)

Dave
by Random Walker
Wed Oct 18, 2017 7:03 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe:Better To Face The Correction
Replies: 51
Views: 6370

Larry Swedroe:Better To Face The Correction

http://www.etf.com/sections/index-investor-corner/swedroe-better-face-correction?nopaging=1 Excellent article by Larry. He shows that it is more wise to stay in the market than to try to time a correction when equities seem over valued or generously valued. The stock market makes most all of its gai...
by Random Walker
Tue Oct 17, 2017 8:54 pm
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 4829

Re: The overselling of international diversification

I think international small value, even more so than emerging markets, is where the best diversification effect is. Get SV diversification plus small companies more subject to local economy effects.

Dave
by Random Walker
Sun Oct 15, 2017 2:10 pm
Forum: Investing - Theory, News & General
Topic: What's your asset allocation and why?
Replies: 160
Views: 13845

Re: What's your asset allocation and why?

I'm 55, and worry that I may be forced into retirement or lower salary soon. I benefitted from being 80/20 or greater most of last 20 years. Over last two years I've been cooling off the portfolio in response to generous returns, relatively high valuations, relatively low future expected returns. I'...
by Random Walker
Sat Oct 14, 2017 11:09 pm
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 175
Views: 18691

Re: My Favorite Alternative Funds

GarlandWhizzer, I’m a factor junkie, but I can’t really argue with anything you wrote. The single bet on market beta lacks diversification from factor point of view. I agree with you that the best diversifier is also the cheapest, high quality bonds. All the diversification beyond market beta and hi...
by Random Walker
Fri Oct 13, 2017 10:44 pm
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 175
Views: 18691

Re: My Favorite Alternative Funds

Packer16 wrote I do not get the attraction of lower returning non-correlated assets. For me, I took from the Muni bond portion of my portfolio to create the SRRIX position. I expect Pre tax SRRIX returns to be equity like at perhaps 6%ish. I expect post tax returns to be substantially less, yet stil...
by Random Walker
Thu Oct 12, 2017 4:17 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Non-US Valuations Look Attractive
Replies: 74
Views: 7111

Re: Larry Swedroe: Non-US Valuations Look Attractive

Azanon,
I think the difference between Larry’s expected returns and some other people’s is that Larry’s firm assumes no change in the speculative component.

Dave
by Random Walker
Thu Oct 12, 2017 11:19 am
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 175
Views: 18691

Re: My Favorite Alternative Funds

I agree with smackboy1, The point of SRRIX is to invest in reinsurance only, totally independent and uncorrelated with the stock market. The point is to diversify away from market beta. Once one invests in the stocks of insurance companies traded on the secondary market, he is completely exposing hi...
by Random Walker
Wed Oct 11, 2017 8:31 pm
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 175
Views: 18691

Re: My Favorite Alternative Funds

Packer16, I have SSRIX. I certainly wouldn’t call it a bond equivalent, but I did take from the bond side of the portfolio to create the position. My rationale was greater expected after tax returns than Muni bonds, SD about half that of equities, lack of correlation to both stocks and bonds. Overal...
by Random Walker
Wed Oct 11, 2017 12:57 pm
Forum: Investing - Theory, News & General
Topic: Financial Planners and Negotiations
Replies: 8
Views: 834

Re: Financial Planners and Negotiations

I use an advisor, and I do think there is some room to negotiate fees potentially. Realize that there is wide variation on the services offered by different advisors, and that differences in fees will likely reflect that. So far, it seems you are only looking for portfolio maintenance. Even there, d...
by Random Walker
Wed Oct 11, 2017 12:13 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Non-US Valuations Look Attractive
Replies: 74
Views: 7111

Re: Larry Swedroe: Non-US Valuations Look Attractive

For those looking to improve portfolio efficiency, I would consider this time, with these relative valuations, a good opportunity to increase one’s international allocation towards it’s market cap weighting of 50%.

Dave
by Random Walker
Wed Oct 11, 2017 12:11 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Non-US Valuations Look Attractive
Replies: 74
Views: 7111

Larry Swedroe: Non-US Valuations Look Attractive

http://www.etf.com/sections/index-investor-corner/swedroe-non-us-valuations-attractive?nopaging=1 This is an excellent review of valuations in US, Int, EM. Lower valuations internationally imply higher expected returns. Larry also shows higher expected returns for small and value internationally. He...
by Random Walker
Mon Oct 09, 2017 9:44 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Discipline Trumps Distraction
Replies: 3
Views: 1002

Larry Swedroe: Discipline Trumps Distraction

http://www.etf.com/sections/index-investor-corner/swedroe-discipline-trumps-distraction?nopaging=1 In this article Larry makes the case for sticking with a value oriented portfolio. He shows that value has underperformed 2008-2015. He cites a study showing that the number of funds with positive fact...
by Random Walker
Sun Oct 08, 2017 11:56 am
Forum: Investing - Theory, News & General
Topic: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17
Replies: 87
Views: 12191

Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

Magneto wrote: Have been defensive for some time now and will stay that way for foreseeable future 'to stay our own particular course'. I totally agree. One should have an IPS and use it as the default. But as one ages and markets give what they will, we get more clear on goals and circumstances cha...
by Random Walker
Fri Oct 06, 2017 9:16 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Evidence Of Shrinking Alpha
Replies: 5
Views: 1040

Larry Swedroe: Evidence Of Shrinking Alpha

http://www.etf.com/sections/index-investor-corner/swedroe-evidence-shrinking-alpha?nopaging=1 Larry summarizes a couple of papers showing how the bright competitive people on Wall Street gobble up anomalies, making alpha disappear. He describes efficient markets and adaptive markets. It's best to be...
by Random Walker
Fri Oct 06, 2017 8:00 am
Forum: Investing - Theory, News & General
Topic: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals
Replies: 13
Views: 2099

Re: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals

Just thought I'd give this article a bump. The more I ponder my own portfolio, the more I realize the importance of having specific realistic financial goals in making AA decisions rather than just generally investing to maximize mean terminal value someday in the future. I think it's important to k...
by Random Walker
Fri Oct 06, 2017 7:54 am
Forum: Investing - Theory, News & General
Topic: Research Affiliates: Starting Yields Matter To Future Returns
Replies: 6
Views: 878

Re: Research Affiliates: Starting Yields Matter To Future Returns

Always Passive, Yes I have. BUT only because it was a convenient move towards more efficient world market cap allocation. About two years ago my Equity was roughly 60/40 US/Int. I took advantage of the difference in valuations and thus expected returns to move to 50/50 US/Int on the equity side. I w...
by Random Walker
Fri Oct 06, 2017 12:45 am
Forum: Investing - Theory, News & General
Topic: Research Affiliates: Starting Yields Matter To Future Returns
Replies: 6
Views: 878

Research Affiliates: Starting Yields Matter To Future Returns

http://www.etf.com/sections/features-and-news/research-affiliates-starting-yields-matter-future-returns?nopaging=1 I came across this Research Affiliates article on etf.com. I think using historical average returns to make asset allocation decisions is a mistake. But I do believe historical standard...
by Random Walker
Wed Oct 04, 2017 7:29 pm
Forum: Investing - Theory, News & General
Topic: Some Hand-Holding
Replies: 17
Views: 1223

Re: Some Hand-Holding

Only thing worse than paying a tax is not having to pay one

Dave
by Random Walker
Wed Oct 04, 2017 5:59 pm
Forum: Investing - Theory, News & General
Topic: Sequence of returns and retirement
Replies: 8
Views: 1027

Re: Sequence of returns and retirement

This question provides a great opportunity to make a plug for Monte Carlo Simulation. This OP is trying to model a single sequence of returns. A MCS can generate 10,000 alternative histories and provide a sense of both Mean outcome and dispersion of potential outcomes. Also MCS can show the influenc...
by Random Walker
Wed Oct 04, 2017 3:30 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Different Kind Of Momentum
Replies: 6
Views: 899

Re: Larry Swedroe: Different Kind Of Momentum

We are all fallible! Sounds like a good reason to diversify across as many potential sources of return as possible. :-)

Dave
by Random Walker
Wed Oct 04, 2017 1:39 pm
Forum: Investing - Theory, News & General
Topic: Some Hand-Holding
Replies: 17
Views: 1223

Re: Some Hand-Holding

Check out William Bernstein's e-book The Ages Of The Investor: A Critical Look At Life Cycle Investing. Especially look up "Murphy's Law Of Retirement". I also started a Boglehead thread that you can look up on Murphy's Law Of Retirement.

Dave
by Random Walker
Wed Oct 04, 2017 9:41 am
Forum: Investing - Theory, News & General
Topic: Some Hand-Holding
Replies: 17
Views: 1223

Re: Some Hand-Holding

At age 55, I've pared back and am considering cutting back even more. 3 years ago I was 80/20. I've transitioned to 47 equities/33 bonds/20 alternatives and am considering decreasing equities even more.

Dave
by Random Walker
Wed Oct 04, 2017 9:09 am
Forum: Investing - Theory, News & General
Topic: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals
Replies: 13
Views: 2099

Re: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals

Totally agree with everyone above. Target wealth rather than target date and securing a floor makes so much sense to me. We certainly can't control the markets, but we can control how we respond to them. The default is always a fixed AA defined in an IPS. But as we age and get closer to retirement, ...
by Random Walker
Wed Oct 04, 2017 8:39 am
Forum: Investing - Theory, News & General
Topic: Some Hand-Holding
Replies: 17
Views: 1223

Re: Some Hand-Holding

Creative, First of all, I'll note that you and I are the same age. There is a big difference I believe between market timing and customizing your glide path towards retirement. You are 7 years from retirement, valuations are quite generous, expected returns quite modest. Moreover, looking at the pot...
by Random Walker
Wed Oct 04, 2017 12:29 am
Forum: Investing - Theory, News & General
Topic: AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals
Replies: 13
Views: 2099

AAII Article: Target Wealth A Better Bet For Achieving Wealth Goals

http://www.aaii.com/journal/article/target-wealth-a-better-bet-for-achieving-wealth-goals I came across this article from AAII. Many on this board have read and believe the statement "if you've won the game, stop playing". This article supports that sort of investor behavior. It looks at the likelih...
by Random Walker
Wed Oct 04, 2017 12:01 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Different Kind Of Momentum
Replies: 6
Views: 899

Re: Larry Swedroe: Different Kind Of Momentum

For those who would like to read more, I recommend this white paper from AQR. Make sure to check out the smile curve.

https://www.aqr.com/-/media/files/paper ... esting.pdf

Dave
by Random Walker
Tue Oct 03, 2017 11:58 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Different Kind Of Momentum
Replies: 6
Views: 899

Larry Swedroe: Different Kind Of Momentum

http://www.etf.com/sections/index-investor-corner/swedroe-different-kind-momentum?nopaging=1 Larry discusses Time Series Momentum in this article, with special attention to TS Momentum for equities in equity bear markets. Overall TS Mom has about 0 correlation to equity market beta but the correlati...
by Random Walker
Mon Oct 02, 2017 9:58 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Financializing Commodities
Replies: 10
Views: 1191

Re: Larry Swedroe: Financializing Commodities

Midareff, Hard to argue with you. Ultra low cost TSM indexing is certainly the excellent starting point. But superior portfolios can certainly be created with more less than perfectly correlated sources of return. They just come at increased cost. TSM portfolios are basically large growth portfolios...
by Random Walker
Mon Oct 02, 2017 9:44 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Financializing Commodities
Replies: 10
Views: 1191

Larry Swedroe: Financializing Commodities

http://www.etf.com/sections/index-investor-corner/swedroe-financializing-commodities?nopaging=1 Larry writes that commodities may not provide the diversification benefit they once did because they have turned in to financial tools rather than just commodities. Makes me think twice (or 3X) about my p...
by Random Walker
Mon Oct 02, 2017 9:36 am
Forum: Investing - Theory, News & General
Topic: Malkiel essay on Smart Beta
Replies: 11
Views: 1646

Re: Malkiel essay on Smart Beta

It's been a long time since I've read the articles, but I sure thought they were relevant when I read them. If TLH is worth something in a portfolio composed of 500 assets each with a small $ amount, then there should be benefit with typical 3-10 fund portfolio where each fund has relatively more $....
by Random Walker
Sun Oct 01, 2017 10:46 am
Forum: Investing - Theory, News & General
Topic: Malkiel essay on Smart Beta
Replies: 11
Views: 1646

Re: Malkiel essay on Smart Beta

I think the issue here is the behavior of individual portfolios versus the markets. I agree there are few if any free lunches. But an individual can build a more efficient portfolio by diversifying across sources of risk / sources of return. Of course there are tradeoffs, and more efficient portfoli...
by Random Walker
Sun Oct 01, 2017 9:42 am
Forum: Investing - Theory, News & General
Topic: Malkiel essay on Smart Beta
Replies: 11
Views: 1646

Re: Malkiel essay on Smart Beta

There's an article by Arnott and Berkin (I believe it's in the wiki) that seems to show TLH worth about 0.5-0.7% per year. If I remember there are two articles and both also easily found on the web.

Dave
by Random Walker
Fri Sep 29, 2017 8:18 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Volatility Risk Endures
Replies: 2
Views: 354

Larry Swedroe: Volatility Risk Endures

http://www.etf.com/sections/index-investor-corner/swedroe-volatility-risk-endures?nopaging=1 In this article Larry discusses the Variance risk premium: investors effectively pay a premium to insure against really bad downside volatility. This premium is persistent across markets and asset classes, a...
by Random Walker
Wed Sep 27, 2017 9:21 am
Forum: Investing - Theory, News & General
Topic: Research Affiliated Model Portfolios: ZERO % US stocks
Replies: 46
Views: 4689

Re: Research Affiliated Model Portfolios: ZERO % US stocks

I, like most Bogleheads, had been overweight US equities. As I learned more about investing and became less subject to home country bias and tracking error regret, I took advantage of the difference in valuations to move from 40% Int on the equity side to 50%. I only made this somewhat "market timin...
by Random Walker
Wed Sep 27, 2017 9:12 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Iconic Report Supports Index Investing
Replies: 6
Views: 900

Larry Swedroe: Iconic Report Supports Index Investing

http://www.etf.com/sections/index-investor-corner/swedroe-iconic-report-supports-index-investing?nopaging=1 Larry Swedroe reinforces the most fundamental Boglehead thoughts: passive beats active, and passive wins by most in the very asset classes where active managers claim to have the biggest advan...