Search found 2248 matches

by Simplegift
Sun Jun 25, 2017 11:02 am
Forum: Investing - Theory, News & General
Topic: The Age of Tech - Even in Emerging Markets
Replies: 6
Views: 617

Re: The Age of Tech - Even in Emerging Markets

A recent paper suggests there actually has been a “multinational premium” in the last few decades: The Multinational Return Premium: Investor's Perspective Using monthly returns of 18,996 U.S. stocks over 1973-2015 and 23,965 stocks in 22 countries over 1990-2015, we find that multinational companie...
by Simplegift
Sat Jun 24, 2017 11:52 pm
Forum: Investing - Theory, News & General
Topic: The Age of Tech - Even in Emerging Markets
Replies: 6
Views: 617

Re: The Age of Tech - Even in Emerging Markets

This is not my read of the situation. I see it as the raise of the mega-cap supernational corporation. Their headquarters just happens to be located in a EM country. You may be right. There can be no doubt that “the big have gotten bigger” worldwide over the last decade: https://s30.postimg.org/6lx...
by Simplegift
Sat Jun 24, 2017 8:26 pm
Forum: Investing - Theory, News & General
Topic: The Age of Tech - Even in Emerging Markets
Replies: 6
Views: 617

The Age of Tech - Even in Emerging Markets

Most investors are aware of the rise of U.S. technology companies over the last decade, since they now comprise 5 of the 6 most valuable companies on the planet, by market capitalization (chart below): https://s2.postimg.org/pq13xy9qx/chartoftheday_5403_most_valuable_companies_2006.jpg Source: Stati...
by Simplegift
Sat Jun 24, 2017 11:24 am
Forum: Investing - Theory, News & General
Topic: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the day."
Replies: 49
Views: 3491

Re: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the da

If you own 20% of your stock portfolio in total international fund and the other 80% of your stock portfolio in total stock market. How much international do you really own??????? Based on data from 2012-13 (table below), about 53% of revenues from the companies in your equity portfolio would be co...
by Simplegift
Sat Jun 24, 2017 8:58 am
Forum: Investing - Theory, News & General
Topic: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the day."
Replies: 49
Views: 3491

Re: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the da

That's an interesting point, and thanks for the reference to the other thread. I'm not sure, though, how much of an impact the revenue source factor is on the returns of various nations' market returns. Is there data on that? The best general overview of this subject I’ve seen is by MSCI, from Octo...
by Simplegift
Sat Jun 24, 2017 2:22 am
Forum: Investing - Theory, News & General
Topic: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the day."
Replies: 49
Views: 3491

Re: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the da

Currently, about half of the total value of all global equities is in the U.S. That means that half of a global cap-weighted portfolio is still in one country. How can anyone say that country risk is 'diversified away' or even minimized with a global cap-weighted portfolio? In some respects, the ri...
by Simplegift
Mon Jun 19, 2017 12:02 am
Forum: Investing - Theory, News & General
Topic: Global Stocks - Legacy of the Great Recession?
Replies: 21
Views: 2103

Re: Global Stocks - Legacy of the Great Recession?

^^^ Appreciate the insightful post, AlohaJoe — and the papers you mentioned. The PIMCO research , “The Stock-Bond Correlation,” based on monthly data for the 1927-2013 period, was especially helpful: In the short run, stocks and bonds tend to respond in opposite directions to fluctuations in investo...
by Simplegift
Sun Jun 18, 2017 7:42 pm
Forum: Investing - Theory, News & General
Topic: Global Stocks - Legacy of the Great Recession?
Replies: 21
Views: 2103

Re: Global Stocks - Legacy of the Great Recession?

Returns of asset classes compared to each other change over time. Correlation between asset classes change over time also. In the decade prior to the 2008 financial crisis, global equity market correlations were increasing — but since then, the trend has been toward lower correlations (chart below)...
by Simplegift
Sun Jun 18, 2017 6:42 pm
Forum: Investing - Theory, News & General
Topic: Global Stocks - Legacy of the Great Recession?
Replies: 21
Views: 2103

Re: Global Stocks - Legacy of the Great Recession?

I don't like to try to predict these things because anything can happen and I have often been wrong in the past. Having said that it seems reasonable to allocate a portion of equity into total international stock index fund, say 30% and stay with it for the long haul. Very reasonable indeed. Many o...
by Simplegift
Sun Jun 18, 2017 1:56 pm
Forum: Investing - Theory, News & General
Topic: Global Stocks - Legacy of the Great Recession?
Replies: 21
Views: 2103

Re: Global Stocks - Legacy of the Great Recession?

Looking closer, it appears there's quite a bit of variation in the recovery times of different countries after the 2008 Financial Crisis. According to recent data , Germany recovered in 3 years, the U.S. in 6 years, and Iceland, the U.K. and Ireland in 8 years. Some European countries, notably Greec...
by Simplegift
Sun Jun 18, 2017 11:01 am
Forum: Investing - Theory, News & General
Topic: Global Stocks - Legacy of the Great Recession?
Replies: 21
Views: 2103

Global Stocks - Legacy of the Great Recession?

Much has been written about the legacy of the Great Recession and how deep a hole the recession created in the global economy. Recessions associated with financial crises are thought to be deeper and take much longer to recover than normal recessions. Yet, defying global trends, the earnings of U.S....
by Simplegift
Sun Jun 18, 2017 8:14 am
Forum: Investing - Theory, News & General
Topic: Best Financial Advice from Dad (in honor of father's day)
Replies: 79
Views: 4773

Re: Best Financial Advice from Dad (in honor of father's day)

My father raised beef cattle and therefore thought he knew a thing or two about agriculture commodities. One year in the 1970s, he thought pork bellies were a screaming buy, so he purchased a few futures contracts purely to speculate on their price (he had no intention of actually taking delivery of...
by Simplegift
Sat Jun 17, 2017 3:55 pm
Forum: Investing - Theory, News & General
Topic: How Does Fed Reduce Balance Sheet?
Replies: 24
Views: 2306

Re: How Does Fed Reduce Balance Sheet?

It’s worth pointing out that QE is not just a U.S. phenomenon, but a global one (chart below). China’s central bank (PBoC, in red) has been “tapering” for years, along with the U.S. Federal Reserve more recently. Europe (ECB, in blue) is expected to begin tapering over the next few years — while Jap...
by Simplegift
Sat Jun 17, 2017 12:18 pm
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 84
Views: 5549

Re: Your Favorite Portfolio Tilts

With respect to my portfolio I regard myself as a risk manager, rather than as a return maximizer. In retirement now, this is my stance as well. In fact, this quote from Benjamin Graham is framed above my desk: "The defensive investor is content to forego the highest possible rate of return in...
by Simplegift
Sat Jun 17, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: How Does Fed Reduce Balance Sheet?
Replies: 24
Views: 2306

Re: How Does Fed Reduce Balance Sheet?

The part I can't understand is how is all this connected to the stock market? If QE inflated the stock market then why aren't people worried the unwinding of QE will deflate the stock market? For years people attributed the rise in the market to QE. There is no worries that it's all going to be und...
by Simplegift
Fri Jun 16, 2017 2:30 pm
Forum: Investing - Theory, News & General
Topic: What growth rate for your projection calcs?
Replies: 31
Views: 2500

Re: What growth rate for your projection calcs?

Just how good have their projections been over the past 20 years? And over what time scale are these supposed to be? Their first set of projections were made in their 2013 Yearbook, found here: Credit Suisse Global Investment Returns Yearbook - 2013 These projections are for the next 20-30 years. I...
by Simplegift
Fri Jun 16, 2017 1:57 pm
Forum: Investing - Theory, News & General
Topic: What growth rate for your projection calcs?
Replies: 31
Views: 2500

Re: What growth rate for your projection calcs?

What are other BH's using for their calculations? This chart has the most recent expected real returns from Dimson, Marsh and Staunton, as updated from their 2017 Global Investment Returns Yearbook: https://s14.postimg.org/gv9mp9kkx/Untitled.jpg Source: Dimson, Marsh and Staunton It suggests betwee...
by Simplegift
Thu Jun 15, 2017 9:38 pm
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

I had thought the E in P/E was total corporate earnings, not per share. If you read the fine print below each chart in the publication I linked to, this is the P/E formula used: “Price divided by 12-month forward consensus expected operating earnings-per-share.” This is line with the standard defin...
by Simplegift
Thu Jun 15, 2017 5:14 pm
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

You wouldn't happen to know a site that lists earnings per share for countries, do you? Not earnings-per-share alone, but price/earnings-per-share (P/E): Global Index Briefing - MSCI Forward P/Es This weekly publication reports forward P/E values for 46 MSCI country indexes. To find earnings-per-sh...
by Simplegift
Thu Jun 15, 2017 4:24 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Simplegift, the one thing left out of your original post are Health Care costs which have been increasing faster than inflation. Also for seniors, health care costs tend to be a bigger budget item than for younger investors. Per capita U.S. health care spending has certainly been increasing at a fa...
by Simplegift
Thu Jun 15, 2017 1:19 pm
Forum: Investing - Theory, News & General
Topic: Federal Funds Rate and Treasuries Prices
Replies: 7
Views: 614

Re: Federal Funds Rate and Treasuries Prices

My question is how does the Funds Rate effect the Treasury Yields? In short, changes in the Fed funds rate impact shorter-term Treasury yields more than longer-term Treasury yields (chart below). Longer-term Treasury yields are mainly determined by market forces other than U.S. monetary policy, inc...
by Simplegift
Wed Jun 14, 2017 8:33 pm
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

My big question is: is there a relationship between the growth of countries' capital markets and their future returns? In other words, will stocks outperform in countries "equitizing" at a faster rate? There is a relationship, I believe, but likely the opposite of what investors might exp...
by Simplegift
Wed Jun 14, 2017 2:27 pm
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

if china and india are so large, why isn’t this translating into a larger allocation to those countries in Vanguard Total Int'l? The difference is that most developed countries are much more highly “equitized” than emerging countries. Their equity markets have been around longer, and have played a ...
by Simplegift
Wed Jun 14, 2017 12:05 pm
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

I'm a bit surprised by the difference in the two tables. Where is China's energy coming from -- I didn't think they were self-sufficient. China appears to be importing more and more of its crude oil from non-OPEC countries: https://s10.postimg.org/5ym15llpl/twip170405fig1-lg.png Source: U.S EIA In ...
by Simplegift
Wed Jun 14, 2017 10:45 am
Forum: Investing - Theory, News & General
Topic: What growth rate for your projection calcs?
Replies: 31
Views: 2500

Re: What growth rate for your projection calcs?

What are other BH's using for their calculations? FireCalc was the most helpful to me in testing out various allocation and return scenarios prior to retirement. After retirement, I occasionally check expected returns on stocks and bonds by using these simple calculations: • For Stocks: The earning...
by Simplegift
Wed Jun 14, 2017 9:03 am
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

I think it is easy to overlook the impact of sectors in Boglehead's discussions. Yes, I’m guilty of this myself. When comparing global equity markets, it’s easy to compare P/E 10 values across countries, without going to the trouble of correcting for the differences in sector composition between th...
by Simplegift
Wed Jun 14, 2017 12:12 am
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

Re: A Current Perspective on Global Growth

Another visual representation, showing a breakdown of projected global growth for the 2017-2019 period, as currently forecast by the World Bank (in real, inflation-adjusted terms): https://s11.postimg.org/4uj7wmc2r/Untitled.jpg Source: Visual Capitalist Interesting to see Indonesia showing up on the...
by Simplegift
Tue Jun 13, 2017 6:40 pm
Forum: Investing - Theory, News & General
Topic: A Current Perspective on Global Growth
Replies: 24
Views: 1802

A Current Perspective on Global Growth

Where is economic growth occurring around the globe today? For the world’s major economies, the chart below shows their rate of economic growth on the vertical scale, and each country’s proportional share of global GDP on the horizontal scale. The chart thus depicts the relative scale of each countr...
by Simplegift
Tue Jun 13, 2017 11:07 am
Forum: Investing - Theory, News & General
Topic: Bogle Doubles Down on US Index Funds
Replies: 118
Views: 11899

Re: Bogle Doubles Down on US Index Funds

A recent article describes the trends in foreign sales by S&P 500 companies to emerging markets: The percentage of products and services produced or sold by S&P 500 companies outside the United States equated to 44.3 percent in 2015, the lowest level since 2006. It was down from 47.8 percent...
by Simplegift
Tue Jun 13, 2017 10:25 am
Forum: Investing - Theory, News & General
Topic: Bogle Doubles Down on US Index Funds
Replies: 118
Views: 11899

Re: Bogle Doubles Down on US Index Funds

...so from my read of that above chart, it would seem to confirm direct investment in the Chinese market was actually a poor decision relative to gaining the exposure through other markets with exposure. Right. The problem for U.S.-only investors is that our domestic companies' exposure to the fast...
by Simplegift
Tue Jun 13, 2017 9:19 am
Forum: Investing - Theory, News & General
Topic: Bogle Doubles Down on US Index Funds
Replies: 118
Views: 11899

Re: Bogle Doubles Down on US Index Funds

“I believe the U.S. is the best place to invest,” Bogle said. “We probably have the most technology-oriented economy in the world. I would bet that the U.S. will do better than the rest of the world. It is a simple bet on which economy is going to be the strongest in the long run.” https://s15.post...
by Simplegift
Tue Jun 13, 2017 8:25 am
Forum: Investing - Theory, News & General
Topic: Favorite Feature of Vanguard Website?
Replies: 64
Views: 4665

Re: Favorite Feature of Vanguard Website?

What's your favorite or most surprising feature on the Vanguard website? The “Balances and Holdings” page is the one I’ve used most over the years, to monitor and rebalance our Vanguard accounts. I like that the display of this page can be customized in several helpful ways: • Hide zero balance fun...
by Simplegift
Sun Jun 11, 2017 3:20 pm
Forum: Investing - Theory, News & General
Topic: Bogle Doubles Down on US Index Funds
Replies: 118
Views: 11899

Re: Bogle Doubles Down on US Index Funds

I am unaware of any academic research that supports Mr Bogle's point of view, though in terms of risk reduction international diversification seems to accomplish less and less each year as global markets seem to become more and more correlated. But this can change. In the decade prior to the 2009 f...
by Simplegift
Sun Jun 11, 2017 1:12 pm
Forum: Investing - Theory, News & General
Topic: Bogle Doubles Down on US Index Funds
Replies: 118
Views: 11899

Re: Bogle Doubles Down on US Index Funds

From another recent interview with Mr. Bogle: "So if people knew they were putting 45% of their so-called international, non-US, money in Great Britain, France and Japan — I mean every one of those three countries has real problems," Bogle said. "The French don’t work very hard, The J...
by Simplegift
Sat Jun 10, 2017 2:04 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Looking around for an analysis of real stock returns historically at various levels of inflation, this study surfaced: S&P 500 Real Returns, 1872-2014 https://s14.postimg.org/43ssljo5d/graph_realreturns_CPI.jpg Source: Pioneer Investments Not only have U.S. real equity returns not suffered at lo...
by Simplegift
Sat Jun 10, 2017 12:16 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

So, even though there may be a probability of continued low inflation, there is a real risk of higher inflation. That would seem to suggest that it would be wise to use a higher allocation to TIPS than one might have 10 years ago to protect oneself from those risks. Relatively low real returns from...
by Simplegift
Sat Jun 10, 2017 10:20 am
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

What is the equation for that line? y = -1.8926x + 43.034 Using the equation for that line and the data in Table B-3 from that link what will the inflation rates be for those forty countries in 2050? Good question, Ron. It may be a research project worth pursuing, but not for me this weekend. Have ...
by Simplegift
Sat Jun 10, 2017 9:36 am
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Milton Friedman preached rather cogently that inflation is caused by government spending money it doesn't have (by merely printing more money). Is there some reason to believe that is not so? For many years, economic researchers like Friedman considered inflation to be a purely monetary phenomenon....
by Simplegift
Sat Jun 10, 2017 9:14 am
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Does this imply that as that generation passes on and the median age decreases we can expect inflation? Is it that predictable and straightforward? Unfortunately, the aging of the world population is not a generational phenomenon that will reverse at some point in the future. Around 2020, for the f...
by Simplegift
Fri Jun 09, 2017 11:01 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

I'm sorry, but an R^2 of 0.51 and "fairly strong" correlation is not consistent-- rather it is a fairly weak correlation. For economic and financial data the correlation isn't bad. The more important point is that the regression line is sloping in the right direction (the older the median...
by Simplegift
Fri Jun 09, 2017 9:51 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

As another poster has noted, the conventional "wisdom " is that as the workforce ages, the number of employable workers decreases which drives up wages and products associated with the requirement for labor and thus an increasing inflation. That may the conventional wisdom, but a simple r...
by Simplegift
Fri Jun 09, 2017 8:48 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Checking to see how stocks and REITs have actually performed historically in low-inflation, low-growth environments, this chart surfaced (since 1972): https://s29.postimg.org/7eraxfm6v/Untitled.jpg Source: REIT.com According to the article, when U.S. economic growth was less than 5% and inflation le...
by Simplegift
Fri Jun 09, 2017 8:05 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Just a general caution: If this discussion wanders into the weeds of central bank monetary policies and general theories of inflation — rather than the portfolio implications of inflation — the moderators will understandably lock the thread. So let's attempt to stay focused on the investment aspects...
by Simplegift
Fri Jun 09, 2017 7:45 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Re: Is Inflation Dying of Old Age?

Correlations aren't indicative of causality necessarily. Can you explain why a tightening labor force would lead to a decline in inflation as opposed to the opposite? Most economic research historically has considered inflation to be purely a monetary phenomenon. But with real live aging countries ...
by Simplegift
Fri Jun 09, 2017 7:13 pm
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 6740

Is Inflation Dying of Old Age?

For those of us saving and investing in the 1970s, the loss of our financial assets to high inflation (5%-12% annually) made a strong impression. In his 2013 e-book, Deep Risk , William Bernstein identifies inflation as one of the most important threats of permanent capital loss (along with deflatio...
by Simplegift
Fri Jun 09, 2017 2:40 pm
Forum: Investing - Theory, News & General
Topic: Why does S&P PE ratio matter
Replies: 30
Views: 1478

Re: Why does S&P PE ratio matter

I'd put it this way: you shouldn't overreact and overplay your hand when the quality of the read is low. That's an interesting way to put it. I used to count cards when playing Blackjack in Vegas back in the 90s (when you could still find single-deck tables). Knowing that the count was high was goo...
by Simplegift
Fri Jun 09, 2017 12:25 pm
Forum: Investing - Theory, News & General
Topic: Allen Roth article on how to get 5% income
Replies: 16
Views: 2659

Re: Allen Roth article on how to get 5% income

For r = y + g, it makes sense to me that we would use current y (dividend yield). But should we use current g? Doesn't it move all over the place? I thought most predictions use a long term average. If we were to see for example, net buybacks after dilution permanently rise to 1%, is it safe to ign...
by Simplegift
Fri Jun 09, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: Allen Roth article on how to get 5% income
Replies: 16
Views: 2659

Re: Allen Roth article on how to get 5% income

I don’t believe this is correct. Both the dividend yield and the earnings growth rate factors used by Mr. Bogle in his simple expected value formula are per share . In other words, the net effect of share repurchases are already included in the dividend and earnings growth data. Since buybacks chan...
by Simplegift
Fri Jun 09, 2017 10:55 am
Forum: Investing - Theory, News & General
Topic: Allen Roth article on how to get 5% income
Replies: 16
Views: 2659

Re: Allen Roth article on how to get 5% income

If we add a term for buyback yield to the Gordon equation that Jack Bogle favors for estimating future returns and assuming 1.3% real earnings growth, we could see It seems appropriate to use net buybacks in the Gordon equation... I don’t believe this is correct. Both the dividend yield and the ear...
by Simplegift
Fri Jun 09, 2017 8:57 am
Forum: Investing - Theory, News & General
Topic: Allen Roth article on how to get 5% income
Replies: 16
Views: 2659

Re: Allen Roth article on how to get 5% income

How do you determine how much of an index fund yield is dividends and how much is stock buyback? Thanks The only index fund for which I’ve seen data published regularly is the S&P 500. This publication from Yardeni Research is updated monthly, I believe. See the dividend and buyback yields on P...

Go to advanced search