Search found 1061 matches

by Theoretical
Sat Aug 26, 2017 11:50 pm
Forum: Investing - Theory, News & General
Topic: Small-Cap Value has had higher returns than Total Stock Market, with lower risk
Replies: 49
Views: 4395

Re: Small-Cap Value has higher returns than Total Stock Market, with lower risk

As a massive tilter personally (all Value, most small value including internationally), I completely disagree with you re: downside. Also 1970-2016 gives you all theee massive Small Value boosts. At a given equity percentage, Small Value is between 1/3 and 1/2 again as volatile as standard stocks. T...
by Theoretical
Sat Aug 26, 2017 6:46 pm
Forum: Investing - Theory, News & General
Topic: Dumb, basic question about market-cap weighted funds?
Replies: 57
Views: 4036

Re: Dumb, basic question about market-cap weighted funds?

Let me throw in my 2 cents. I personally think to run a portfolio that actively seeks value situations (i.e., cheap assets) then one needs to put in a large initial sink of time to get up to speed . As a additional book I will throw out the CFA prep books. You should be able to find a cheap set on ...
by Theoretical
Sat Aug 26, 2017 6:06 pm
Forum: Investing - Theory, News & General
Topic: Review with Me - Larry Swedroe's new book
Replies: 160
Views: 6899

Re: Review with Me - Larry Swedroe's new book

Nedsaid, he does talk about what you're describing, but he uses "tracking error" and "tracking regret," while using underperformance to describe relative to its historical returns.
by Theoretical
Fri Aug 25, 2017 7:20 pm
Forum: Investing - Theory, News & General
Topic: Buying commercial real estate as investment
Replies: 7
Views: 777

Re: Buying commercial real estate as investment

I think a major impediment is that no one disputes that real estate is an asset class for investment. It's very divergent from both stocks and bonds. The problem is that it's very hard to invest in none-to-minimally leveraged real estate that is diversified across the country. REIT funds give you di...
by Theoretical
Thu Aug 24, 2017 10:31 pm
Forum: Investing - Theory, News & General
Topic: Unrated municipal bonds
Replies: 25
Views: 2550

Re: Unrated municipal bonds

From what I've read, their municipal high-yield is run by the same group and already has a positive record of being one of the first to get out of the Puerto Rico debacle.
by Theoretical
Thu Aug 24, 2017 4:46 pm
Forum: Investing - Theory, News & General
Topic: Unrated municipal bonds
Replies: 25
Views: 2550

Re: Unrated municipal bonds

Posters here made significant money by investing in junk bond funds in January-Mar 2009 when spreads were very high. Bill Bernstein on Efficient Frontier wrote a paper suggesting this as a strategy years before (when spreads are high enough). I was, here, much more cautious-- and wrong. I still thi...
by Theoretical
Thu Aug 24, 2017 7:39 am
Forum: Investing - Theory, News & General
Topic: Japanese Bubble Burst 1989
Replies: 78
Views: 7403

Re: Japanese Bubble Burst 1989

Nedsaid's comment about China and Japan got me thinking. How similar are the Chinese government-invested megacorps to Japan's Zaibatsu oligopoly approach from the 1980s.
by Theoretical
Tue Aug 22, 2017 11:28 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 7 Reasons Why Advisors Should Use Bond Ladders
Replies: 7
Views: 1954

Re: Larry Swedroe: 7 Reasons Why Advisors Should Use Bond Ladders

I think the Guggenheim BulletShares and iShares IBonds target maturity funds can play an interesting role if you want to DIY a ladder of corporates or munis.
by Theoretical
Sun Aug 20, 2017 5:56 pm
Forum: Investing - Theory, News & General
Topic: IVLU for international value exposure [iShares Edge MSCI Intl Value]
Replies: 12
Views: 1473

Re: IVLU for international value exposure [iShares Edge MSCI Intl Value]

Japan though is a bit different in that the Value-Growth difference is so stark in returns that it's almost like two different markets. There's also the issue of a value spread between the companies with absurd growthy ratios and moderate value ones. On the other hand IVLU tilts VERY large, which is...
by Theoretical
Thu Aug 17, 2017 3:32 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 3972
Views: 1058209

Re: U.S. stocks in freefall

Didn't we have a couple dips in 2015 and 2016? I certainly noticed it in my portfolio. No, that wasn't a bear market or even a correction, but neither has it been a steady upwards progression. As I recall, some US asset classes tipped slightly into bear market territory (>20% decline), like US Smal...
by Theoretical
Thu Aug 17, 2017 12:44 pm
Forum: Investing - Theory, News & General
Topic: New Dividends Appreciation data series - backtesting
Replies: 112
Views: 9753

Re: New Dividends Appreciation data series - backtesting

The more I use it, the less I trust QMJ as provIding significant benefit to me as an investor, especially because of how high the quality loads are even on totally unscreened value funds (look at IWN - Russell 2K value). Profitability and Investment seem to provide more concrete, less swingy/unpredi...
by Theoretical
Tue Aug 15, 2017 1:23 am
Forum: Investing - Theory, News & General
Topic: When stocks drop, which bond funds usually do best and worst?
Replies: 25
Views: 2758

Re: When stocks drop, which bond funds usually do best and worst?

Using the data on the Simba sheet, long treasuries do amazingly well in deflationary/liquidity crunch situations like 2008 or the Depression. In time of rapid inflation, the humble 3 month T-bill actually has done a really good job of tracking inflationary spikes, and the exception proves the rule: ...
by Theoretical
Thu Aug 10, 2017 10:15 pm
Forum: Investing - Theory, News & General
Topic: New Dividends Appreciation data series - backtesting
Replies: 112
Views: 9753

Re: New Dividends Appreciation data series - backtesting

One thing about buybacks is that a lot of companies are doing both buybacks and new issuance at the same time, so short of a Net Buyback approach that the Russell RAFI funds use, I wonder if the buybacks are a bit mirage-y.
by Theoretical
Thu Aug 10, 2017 8:28 pm
Forum: Investing - Theory, News & General
Topic: New Dividends Appreciation data series - backtesting
Replies: 112
Views: 9753

Re: New Dividends Appreciation data series - backtesting

This article may be of some interest. https://www.researchaffiliates.com/en_us/publications/articles/624-a-smart-beta-for-sustainable-growth.html A lot of the high loaders on both profitability and investment (per portfolio visualizer data) are dividend growth funds and WisdomTree's dividend output ...
by Theoretical
Tue Aug 08, 2017 9:11 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)
Replies: 56
Views: 5787

Re: Vanguard Government Bond Index Funds changing names and indices (dropping agency bonds)

I wish they'd do a cheap version of iShares GOVT (.15), which is a total market treasury fund.
by Theoretical
Tue Aug 08, 2017 8:18 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: Volatility As A Strategy
Replies: 56
Views: 5032

Re: Swedroe: Volatility As A Strategy

Actually, you're understating cash here. Specifically, T-Bills have shown a pretty strong correlation to inflation shocks. Tyler 9000 did a pretty good analysis of cash, bonds and stocks and found that t-bills largely tracked the inflationary chaos in the 1970s in a way that neither bonds nor stocks...
by Theoretical
Tue Aug 08, 2017 4:44 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: Volatility As A Strategy
Replies: 56
Views: 5032

Re: Bonds and Fixed Income vs. Alternate Stocks

I have never understood how you can write so eloquently about bear markets, especially the depression. Write so passionately about how people are underestimating the risk of stocks. And at the same time urge everyone to do nothing to avoid stock risk. Alternatives add complexity, no question. But t...
by Theoretical
Sat Jul 22, 2017 10:51 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: REITs Aren't Special
Replies: 106
Views: 9028

Re: Larry Swedroe: REITs Aren't Special

I wonder if this observation is also true of the TIAA Real Estate fund. I'd love to be able to get an IRA there to invest in that fund, but alas, neither I nor any of my family members have the required work experience in order for me to qualify. No, that's a very different animal and a no-question...
by Theoretical
Sat Jul 22, 2017 6:09 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Drives Municipal Bond Yields
Replies: 42
Views: 3589

Re: Larry Swedroe: What Drives Municipal Bond Yields

I think the trickier problem is that until you reach Larry's 10 issuer x 50 bond threshold, it becomes really difficult to diversify or have ANY liquidity in the fixed income, especially if you've got 5 bond clumps.

What makes an interesting workaround is iShares target date maturity muni funds.
by Theoretical
Sat Jul 15, 2017 6:17 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: This Metric In Dire Need Of Context
Replies: 13
Views: 3278

Re: Larry Swedroe: This Metric In Dire Need Of Context

Something I think Larry's article highlights is that it's only PE that's elevated and not the other metrics like sales, dividend yield (! -that's actually huge considering the yield chasing of the last decade and increased buybacks), or cash flows. If all of them were in the nosebleed section, I'd b...
by Theoretical
Mon Jun 26, 2017 12:55 pm
Forum: Investing - Theory, News & General
Topic: Ethereum (cryptocurrency) flash crash, 6/21/2017, $339->$0.10 in "seconds"
Replies: 30
Views: 4724

Re: Ethereum (cryptocurrency) flash crash, 6/21/2017, $339->$0.10 in "seconds"

That's why you don't use stop loss market orders. Heck, it's why market orders themselves are not a good idea. Just do a marketable limit order and call it a day. #twocents
by Theoretical
Sun Jun 25, 2017 4:30 pm
Forum: Investing - Theory, News & General
Topic: How riskier are Aaa corporate bonds?
Replies: 14
Views: 1631

Re: How riskier are Aaa corporate bonds?

In addition, though this may change in the future, muni bonds are 10x safer at AAA than corporates, historically. Heck, a BBB muni has been about equivalent to an A or low AA.
by Theoretical
Fri Jun 23, 2017 12:36 am
Forum: Investing - Theory, News & General
Topic: Thoughts about tilting away from the sector you work in?
Replies: 32
Views: 2741

Re: Thoughts about tilting away from the sector you work in?

While we wait, I think the pretty-good workaround is through beta. If you are in a high-beta industry (presumably with a high-beta career), you should invest low-beta in compensation. If you are in a low-beta sector with a low-beta career, then you can take on more market risk in your portfolio. Th...
by Theoretical
Thu Jun 22, 2017 12:39 pm
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 86
Views: 7550

Re: Your Favorite Portfolio Tilts

With that kind of equity risk, you should be using EDV or ZROZ, not intermediate treasuries and a savings account.
by Theoretical
Thu Jun 22, 2017 12:30 pm
Forum: Investing - Theory, News & General
Topic: Vanguard: HOW MUCH active management is right for you? :(
Replies: 37
Views: 3212

Re: Vanguard: HOW MUCH active management is right for you? :(

I think Swedroe has made a good point distinguishing between passive-index, passive-non-index, and active. The Vanguard bond funds (save the Core Bond fund) are passive non-indexers, not active for the most part. This is partly because there's far more bonds outstanding than are indexed. I'd classif...
by Theoretical
Wed Jun 21, 2017 9:39 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Intermediate Term Treasury (VFITX) - Actively Managed
Replies: 44
Views: 3253

Re: Vanguard Intermediate Term Treasury (VFITX) - Actively Managed

Wow. That's crazy for a treasury security, especially with 40 bonds.
by Theoretical
Tue Jun 20, 2017 12:29 pm
Forum: Investing - Theory, News & General
Topic: Wealthfront ignores own advice; adds Smart-Beta
Replies: 24
Views: 3154

Re: Wealthfront ignores own advice; adds Smart-Beta

There are many roads to Dublin, but changing roads as frequently as they have done is not one of them. First it was replace safe bonds with dividend stocks and EM bonds. Now it's multifactor after bashing anything other than market cap weighting. PASS. The last thing I want to do is hold 600-800 lar...
by Theoretical
Mon Jun 19, 2017 11:24 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: More Evidence Against Active
Replies: 5
Views: 1345

Re: Larry Swedroe: More Evidence Against Active

Okay, I give up. The "unanswered posts" search shows both a Larry Swedroe case for Active Management and an Evidence Against Active Management thread. The "Case for Active Management" one was an article that quoted something positive in reference to active and then showed how it didn't tell the who...
by Theoretical
Sun Jun 18, 2017 1:21 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)
Replies: 139
Views: 18407

Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

I think one difference is that this fund makes more sense than the savings account if you're using cash as an asset class, rather than an e-fund or saving for a big purchase.
by Theoretical
Sat Jun 17, 2017 4:57 pm
Forum: Personal Finance (Not Investing)
Topic: Family Death in PA
Replies: 19
Views: 1885

Re: Family Death in MD

Former estate planning attorney here. This is a big mess. The will almost certainly says something about the property distribution, probably along the lines of "I give the residue of my estate" to X or X class or whatever. If it doesn't that'd be very unusual. Whoever is going to be the executor abs...
by Theoretical
Fri Jun 16, 2017 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: iShares Core MSCI World is deviating from benchmark. Why?
Replies: 3
Views: 497

Re: iShares Core MSCI World is deviating from benchmark. Why?

It looks like the collateral for the securities lending done by the fund.
by Theoretical
Fri Jun 16, 2017 5:27 pm
Forum: Investing - Theory, News & General
Topic: The two envelope problem and some thoughts on diversification, rebalancing, variance
Replies: 12
Views: 1087

Re: The two envelope problem and some thoughts on diversification, rebalancing, variance

But the factor opponent's counter-argument (or mine, anyways) to that: While there is plenty of evidence of risk averse individuals, companies, etc. holding bond (or cash) heavy portfolios to reduce risk, there's a lot less evidence of equity investors overweighting growth to reduce their equity ri...
by Theoretical
Fri Jun 16, 2017 1:42 pm
Forum: Investing - Theory, News & General
Topic: The two envelope problem and some thoughts on diversification, rebalancing, variance
Replies: 12
Views: 1087

Re: The two envelope problem and some thoughts on diversification, rebalancing, variance

1) If you start with TSM, tilting/overweighting bits within the TSM will generally increase risk, not decrease it (contra those who argue that by overweighting some bits you're exposed to more risk factors and thus reduce risk). Yes, some slices of the market will be lower risk, and actual experien...
by Theoretical
Fri Jun 16, 2017 11:36 am
Forum: Investing - Theory, News & General
Topic: Amazon Buys Whole Foods
Replies: 103
Views: 12115

Re: Amazon Buys Whole Foods

Whole Foods produce is nothing to write home about, because they use regional centers to centralize and then send out. Walmart and the local Kroger or Tom Thumb (Safeway) routinely beat it.

Now Trader Joe's produce is in a whole other (bad) category. You get what you pay for on that one.
by Theoretical
Thu Jun 15, 2017 10:51 pm
Forum: Investing - Help with Personal Investments
Topic: REIT in a taxable account
Replies: 19
Views: 2707

Re: REIT in a taxable account

Only timber REITs belong in taxable. The problem is that there's only 4 of them.
by Theoretical
Thu Jun 15, 2017 9:12 pm
Forum: Investing - Theory, News & General
Topic: Market index funds are unsustainable?
Replies: 12
Views: 2590

Re: Market index funds are unsustainable?

Regardless of the merits or demerits of sustainable investing, I immediately distrust anyone who redefines well-established words in that tortured of a way. It's qualitatively different even than the dubious art of saying an extreme growth stock is a value bargain because it's got even more potentia...
by Theoretical
Tue Jun 13, 2017 5:32 pm
Forum: Personal Finance (Not Investing)
Topic: Trust Fund Hell
Replies: 66
Views: 8758

Re: Trust Fund Hell

This may not be trust fund heaven, but it's not that bad. We are kind of 5%-ers here on BH, but this would probably be in the top quintile of trust funds. I hope she thanks him for his work and planning over the years, then listens to you for the way forward. Pretty much this. It is chaotic and not...
by Theoretical
Tue Jun 13, 2017 2:04 pm
Forum: Personal Finance (Not Investing)
Topic: Merging bypass & survivor's trust
Replies: 7
Views: 901

Re: Merging bypass & survivor's trust

Ditto to the techniques described here. You want an experienced trusts and estates attorney who regularly works with taxable estates. In this regard, consider looking for an attorney who has been practicing for at least 10 years, or if younger, whose experience has been at an elite boutique. Why? Be...
by Theoretical
Mon Jun 12, 2017 6:23 pm
Forum: Investing - Theory, News & General
Topic: Add TIPS and High Yield Corporate Bonds To Your Portfolio?
Replies: 16
Views: 1795

Re: Add TIPS and High Yield Corporate Bonds To Your Portfolio?

If I wasn't also heavily into Small Value, I'd strongly consider the Fallen Angels junk fund ANGL, perhaps as a barbell with treasuries.

The comparison of default rates between BB, B, and the Ca are completely stunning. 1%, 7%, and 14% as averages.

ANGl is 75% BB
by Theoretical
Mon Jun 12, 2017 5:10 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets fund: DFEMX vs DFEVX vs FPMAX
Replies: 8
Views: 837

Re: Emerging markets fund: DFEMX vs DFEVX vs FPMAX

Well there's a downside to it. EM Value is a rough ride, even by EM standards.
by Theoretical
Mon Jun 12, 2017 2:04 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets fund: DFEMX vs DFEVX vs FPMAX
Replies: 8
Views: 837

Re: Emerging markets fund: DFEMX vs DFEVX vs FPMAX

Actually, the DFA funds have far less turnover than the Fidelity index - 4-6% vs 25%.

The value fund is the most diversified in terms of number of companies and is the only one to get you Small Cap EM exposure (all Value).
by Theoretical
Mon Jun 12, 2017 1:56 pm
Forum: Investing - Theory, News & General
Topic: Vanguard believes in active managment
Replies: 19
Views: 1819

Re: Vanguard believes in active managment

Their "active" bond funds have a lot more bonds than the indexes and have less turnover. There's also the benefit of being able to negotiate institutional prices for new issues. Regarding their stock funds, many of them are quant strategies with moderate turnover at most that merely aren't tied to a...
by Theoretical
Mon Jun 12, 2017 1:34 pm
Forum: Investing - Help with Personal Investments
Topic: Looking to get away for large growth tilt taxable account. Advice?
Replies: 3
Views: 464

Re: Looking to get away for large growth tilt taxable account. Advice?

Torch the actives. I had a lot more capital gains than that and spread it over 3 years. If you're prioritizing them, then do a ranking as follows: Category 1 - expense ratio Category 2 - turnover rate The latter is what kills you with capital gains distributions. So your analysis isn't unduly skewed...
by Theoretical
Mon Jun 12, 2017 1:23 pm
Forum: Investing - Help with Personal Investments
Topic: Using Market Cap to approximate Fundamental or equity weighting
Replies: 21
Views: 1281

Re: Using Market Cap to approximate Fundamental or equity weighting

Robert T did some analysis that showed a 66% Value/33% Growth with the Russell 1000 indexes gets you most of the way there from a 3 factor perspective. I also think Bill Bernstein and the Schulteis approaches of splitting blend and value do much the same. It also works with the S&P 600 growth and Va...
by Theoretical
Sun Jun 11, 2017 6:47 pm
Forum: Investing - Theory, News & General
Topic: SPY is a Unit Investment Trust
Replies: 26
Views: 1989

Re: SPY is a Unit Investment Trust

The rule is often stated as follows: “No interest is good unless it must vest, if at all, not later than twenty-one years after the death of some life in being at the creation of the interest.” In this context, the children are the absolute duration measures until January 22, 2097. At that point, if...
by Theoretical
Sat Jun 10, 2017 11:53 am
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 8018

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. Interesting point. TIPS in defer...
by Theoretical
Sat Jun 10, 2017 11:37 am
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 8018

Re: Is Inflation Dying of Old Age?

Oh I completely agree that there's a quality of living difference. On the macro scale, I think the heavy use of derivatives makes "what's out there" a murky concept. When you had trillions of dollars in leverage collapse followed by trillions in worldwide QE, I think there's a real risk that someone...
by Theoretical
Sat Jun 10, 2017 9:54 am
Forum: Investing - Theory, News & General
Topic: Is Inflation Dying of Old Age?
Replies: 82
Views: 8018

Re: Is Inflation Dying of Old Age?

Inflation is more subtle. Gasoline has 10% ethanol (less energy), a half gallon of ice cream is now 1.75 quarts, orange juice containers are 59 oz not 64, etc...

Also, housing prices have been soaring for quite some time in many areas.
by Theoretical
Sat Jun 10, 2017 8:36 am
Forum: Investing - Theory, News & General
Topic: Interesting Study in Factor Investing
Replies: 4
Views: 618

Re: Interesting Study in Factor Investing

The NYT article is only 6 years old. That's nothing in any investing context, though you correctly identify the psychological problem with tracking error.