Search found 5098 matches

by avalpert
Wed Jun 28, 2017 11:29 pm
Forum: Investing - Theory, News & General
Topic: Tracking Error vs Low Correlation
Replies: 11
Views: 464

Re: Tracking Error vs Low Correlation

Tracking error regret in my opinion is a poor concept and shouldn't happen - one should have expectations regarding the possibility of low correlation and never expect a non-TSM portfolio to track the TSM. Humans are not consistently rational actors - it isn't that the cognitive biases that trip us...
by avalpert
Wed Jun 28, 2017 5:28 pm
Forum: Investing - Help with Personal Investments
Topic: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?
Replies: 66
Views: 7177

Re: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?

I won't try & answer this fully & want to clarify what your question is. I'm asking this: Say I want to have $50,000 in yearly income, and I have $2,500,000 in Vanguard's Total Stock Market Fund (or roughly, at $60 a share, 41,666.67 shares). My $2.5M in the Total Stock Market Fund typicall...
by avalpert
Wed Jun 28, 2017 5:13 pm
Forum: Investing - Help with Personal Investments
Topic: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?
Replies: 66
Views: 7177

Re: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?

Of course when a dividend is paid, you retain the same amount of ownership of the company that you had before the dividend. So, you still have claim on future cash. This is not true if you choose instead to sell shares I don't think this is correct. If you have 10k in a company and receive a 2% div...
by avalpert
Wed Jun 28, 2017 9:43 am
Forum: Investing - Help with Personal Investments
Topic: SP500 vs High Dividend Yeld Global Stocks
Replies: 25
Views: 1747

Re: SP500 vs High Dividend Yeld Global Stocks

It is also possible to believe that because company management makes judgements about dividend sustainability, the dividend payments from a dividend stock are somehow "the right amount" to withdraw. In this case, spending the dividends from a dividend fund could be one kind of "safe ...
by avalpert
Wed Jun 28, 2017 9:35 am
Forum: Personal Finance (Not Investing)
Topic: How many "accounts" do you maintain at your investment firm?
Replies: 31
Views: 1305

Re: How many "accounts" do you maintain at your investment firm?

Alot. Between our IRAs/Roth IRAs/UTMAs/ESAs/529s/3 solo 401k account types/2 wife's 401ks/rollover IRAs/taxable/accounts that exist for transfer bonuses, etc. it adds up. But I don't see what the big deal is, monitoring all with modern technology is as easy as monitoring one, it adds maybe a couple ...
by avalpert
Wed Jun 28, 2017 9:32 am
Forum: Investing - Theory, News & General
Topic: Tracking Error vs Low Correlation
Replies: 11
Views: 464

Re: Tracking Error vs Low Correlation

Let me try to give you a real world example. I believe that asset classes of US Large Cap stocks and REITs have a low correlation, and that by over weighing the REIT asset class I will get a more efficient portfolio - a better Sharpe Ratio. I select 2 indexes, one for US Large Cap and one for REITs...
by avalpert
Wed Jun 28, 2017 9:30 am
Forum: Investing - Theory, News & General
Topic: Tracking Error vs Low Correlation
Replies: 11
Views: 464

Re: Tracking Error vs Low Correlation

'Tracking Error Regret' reflects a behavioral bias that causes you to take irrational actions - you are fixated on a well reported benchmark (say the Dow, which ought to be completely meaningless to everyone) and compare your strategy against that over short term periods which may lead you to abando...
by avalpert
Wed Jun 28, 2017 9:22 am
Forum: Investing - Help with Personal Investments
Topic: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?
Replies: 66
Views: 7177

Re: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?

The argument above is based on the premise that you know what would have happened to a stock's price if cash that was paid out in a dividend was instead held in the company. That cannot be known. I do not accept the claim that keeping cash in a company always increases the market cap of a company b...
by avalpert
Mon Jun 26, 2017 10:52 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: 52
Views: 4080

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

I've been thinking about this for a while now, and I think that there is a drawback to those who think that global cap-weighted stock portfolios have somehow 'diversified away' country risk. Currently, about half of the total value of all global equities is in the U.S. That means that half of a glo...
by avalpert
Sun Jun 25, 2017 12:18 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

That assumes that funds dollar-weighted returns are normally distributed (or some other symmetric distribution with no skew) - I don't know why we should assume that. Take it up with William Sharpe. If you are trying to address mean vs. average that's a bridge too far and it probably also is a brid...
by avalpert
Sat Jun 24, 2017 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: If I want to have a safe portfolio in case of...
Replies: 23
Views: 1694

Re: If I want to have a safe portfolio in case of...

Yes, massively short the market but cover your tracks enough so you don't get suspected of insider trading...
by avalpert
Sat Jun 24, 2017 9:53 pm
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: 52
Views: 4080

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

Aside from Bogle, Buffet and Munger advice, consider the following: I used Portfolio Visualizer to backtest 3 portfolios: Portfolio 1 - Foreign equity asset category Portfolio 2 - US Equity asset category Portfolio 3 - 50% US equity asset category/ 50% Foreign equity asset category Please refer to ...
by avalpert
Sat Jun 24, 2017 7:42 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

Back to reality. So we know that due to cost, an index fund (again, I'm using the term here for a market-tracking fund) must have a higher return to the share holder on average than an active fund. No you don't have it quite right. If "active" and "passive" management styles are...
by avalpert
Sat Jun 24, 2017 12:18 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

One of the bigger issues with active manager data on performance is "survivorship bias," ie, all the ugly funds are closed/merged, thus leaving only very beautiful funds. I suggest that the "survivorship bias" thing is a contrivance of S&P with their SPIA reports. If I want ...
by avalpert
Sat Jun 24, 2017 11:35 am
Forum: Personal Finance (Not Investing)
Topic: Salary Negotiation - Is this request common?
Replies: 9
Views: 1543

Re: Salary Negotiation - Is this request common?

Hi BH's, During negotiation for a position in sales management, is it common for the candidate to request a contract to ease the risk of "employed at will" - and should I hire a lawyer to review any such potential offer? Are you talking senior executive level or just management? If manage...
by avalpert
Sat Jun 24, 2017 10:32 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: 52
Views: 4080

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

I've been thinking about this for a while now, and I think that there is a drawback to those who think that global cap-weighted stock portfolios have somehow 'diversified away' country risk. Currently, about half of the total value of all global equities is in the U.S. That means that half of a glo...
by avalpert
Sat Jun 24, 2017 10:27 am
Forum: Investing - Theory, News & General
Topic: Advantages of Indexing Besides Low Cost
Replies: 14
Views: 1239

Re: Advantages of Indexing Besides Low Cost

This is a great post compiling benefits of indexing besides the expense ratio. I generally favor the cost matters hypothesis fairly heavily - although these are important arguments. Here's an interesting hypothetical, theoretical question: (Assume fund choices are limited due to, say, 401k availabl...
by avalpert
Sat Jun 24, 2017 10:23 am
Forum: Investing - Theory, News & General
Topic: Advantages of Indexing Besides Low Cost
Replies: 14
Views: 1239

Re: Advantages of Indexing Besides Low Cost

Your 21) "Hang out with the smart crowd" kind of touches on this but I think another advantage is index funds help encourage investors to stay the course. Of course I might have it backwards in the sense investors who have a stay the course mindset are more likely to use index funds. I do...
by avalpert
Sat Jun 24, 2017 10:21 am
Forum: Investing - Theory, News & General
Topic: Advantages of Indexing Besides Low Cost
Replies: 14
Views: 1239

Re: Advantages of Indexing Besides Low Cost

This list seems to conflate several discrete aspects of investing in index funds (such as index construction, fund management, total market vs. segmented indexes, cap-weighted vs. other weightings, etc.) leading to misleading conclusions about what is and is not an advantage to using an index fund f...
by avalpert
Sat Jun 24, 2017 9:37 am
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

One of the bigger issues with active manager data on performance is "survivorship bias," ie, all the ugly funds are closed/merged, thus leaving only very beautiful funds. I suggest that the "survivorship bias" thing is a contrivance of S&P with their SPIA reports. If I want ...
by avalpert
Fri Jun 23, 2017 4:43 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

BogleAlltheWay wrote:
avalpert wrote:What about day traders or people who play the stock market and lose?

They are part of the average invested dollar -as are the ones that win.

Do they have any significant weight as opposed to professional investors?

Every invested dollar is weighted the same
by avalpert
Fri Jun 23, 2017 4:42 pm
Forum: Investing - Help with Personal Investments
Topic: Is VG Total Stock Market Index too concentrated?
Replies: 52
Views: 3780

Re: Is VG Total Stock Market Index too concentrated?

You could add some international, ex-U.S. exposure if that would make you feel less concentrated. Or you could add small cap value ( a common addition) or ultra small caps. Adding those doesn't increase your diversification - it does the opposite and increases your concentration in certain areas, i...
by avalpert
Fri Jun 23, 2017 3:42 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

Hi all, 1.Is there any situation possible where active funds as a whole, can beat passive? For example, if the costs of passive and active are equal, does that mean the average return of all of the active funds will equal the index fund? It depends on how you define the universe of funds. It is tru...
by avalpert
Fri Jun 23, 2017 3:09 pm
Forum: Investing - Theory, News & General
Topic: Passive vs Active funds
Replies: 36
Views: 1899

Re: Passive vs Active funds

Hi all, 1.Is there any situation possible where active funds as a whole, can beat passive? For example, if the costs of passive and active are equal, does that mean the average return of all of the active funds will equal the index fund? It depends on how you define the universe of funds. It is tru...
by avalpert
Fri Jun 23, 2017 12:20 pm
Forum: Investing - Help with Personal Investments
Topic: What's the Best Way to Invest in Cryptocurrencies?
Replies: 16
Views: 1672

Re: What's the Best Way to Invest in Cryptocurrencies?

Cryptocurrencies I am more agnostic on as investments. The volatility means that they are not a store of value in any meaningful sense. Today my Bitcoin buys me 50 loaves of bread, tomorrow 75? I don't need cryptocurrencies to be a "store of value" because, ultimately, I will cash out of ...
by avalpert
Fri Jun 23, 2017 11:04 am
Forum: Personal Finance (Not Investing)
Topic: 401k loan as "bridge loan" - own current home in cash - poke holes in this plan
Replies: 24
Views: 1019

Re: 401k loan as "bridge loan" - own current home in cash - poke holes in this plan

BeneIRA wrote:I don't like the idea because 401k loans represent a double tax.

That is just a pervasive myth born out of sloppy thinking. See various attempts at putting an end to it here, and here, and here.
by avalpert
Thu Jun 22, 2017 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: Is VG Total Stock Market Index too concentrated?
Replies: 52
Views: 3780

Re: Is VG Total Stock Market Index too concentrated?

I'll bet at one point that Kodak was in the Dow 30. So yeah, I guess stuff can happen...... Eastman Kodak was in the Dow from 1930 to 2004. One of its replacements was AIG - that only lasted until 2008. Yeah, leading companies in the market turnover, and not in predictable ways. So unless you can r...
by avalpert
Thu Jun 22, 2017 5:27 pm
Forum: Investing - Help with Personal Investments
Topic: Is VG Total Stock Market Index too concentrated?
Replies: 52
Views: 3780

Re: Is VG Total Stock Market Index too concentrated?

You could add some international, ex-U.S. exposure if that would make you feel less concentrated. Or you could add small cap value ( a common addition) or ultra small caps. Adding those doesn't increase your diversification - it does the opposite and increases your concentration in certain areas, i...
by avalpert
Thu Jun 22, 2017 5:26 pm
Forum: Investing - Help with Personal Investments
Topic: Is VG Total Stock Market Index too concentrated?
Replies: 52
Views: 3780

Re: Is VG Total Stock Market Index too concentrated?

I would say that the cap weighted index is by definition perfectly diversified. Any other weighting would represent a bet that someone could out perform the market by identifying stocks that will do better or worse. This is a losing proposition. By sticking with amrket weights you get the consensus...
by avalpert
Wed Jun 21, 2017 8:33 pm
Forum: Investing - Theory, News & General
Topic: Vanguard: HOW MUCH active management is right for you? :(
Replies: 37
Views: 2631

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

I understand and agree with all the logic favoring index funds. However, what do we say about PRIMECAP fund? It's performance has been too good over the years to attribute it to "just good luck". In what way? Since Vanguard's Midcap Index fund started in June '98 it has outperformed Prime...
by avalpert
Wed Jun 21, 2017 5:49 pm
Forum: Investing - Theory, News & General
Topic: Vanguard: HOW MUCH active management is right for you? :(
Replies: 37
Views: 2631

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

I understand and agree with all the logic favoring index funds. However, what do we say about PRIMECAP fund? It's performance has been too good over the years to attribute it to "just good luck". In what way? Since Vanguard's Midcap Index fund started in June '98 it has outperformed Prime...
by avalpert
Wed Jun 21, 2017 4:38 pm
Forum: Investing - Theory, News & General
Topic: Vanguard: HOW MUCH active management is right for you? :(
Replies: 37
Views: 2631

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

packet wrote:What's the difference between identifying a outperforming manager and identifying an advisor or consultant who can identify an outperforming manager?

One skill would make you a good fund management company exec and the other would make you a good financial advisory firm exec
by avalpert
Wed Jun 21, 2017 11:19 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: 52
Views: 4080

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

nisiprius wrote:And yet...
Ben Johnson, CFA does not own shares in any of the securities mentioned above.
Why not?

The only securities I see mentioned are VEIEX and VWO - I can think of plenty of reasons he wouldn't own those that don't have any reflection on the point of the article at all.
by avalpert
Wed Jun 21, 2017 10:20 am
Forum: Personal Consumer Issues
Topic: Google Fi? pros/cons? anyone using it?
Replies: 53
Views: 4001

Re: Google Fi? pros/cons? anyone using it?

I have it and it has been very good for me. The biggest con is for people who don't manage their data use and do things like streaming videos, uploading pictures etc. regularly on network. Since I spend most of my day connected to WiFi, I don't need to do intensive stuff on network and end up averag...
by avalpert
Wed Jun 21, 2017 9:42 am
Forum: Personal Consumer Issues
Topic: Need quick Marriott Rewards
Replies: 15
Views: 700

Re: Need quick Marriott Rewards

Do you have any chase ultimate rewards points in an account that can transfer them to Starwood - you only need 100.
by avalpert
Tue Jun 20, 2017 10:02 pm
Forum: Investing - Theory, News & General
Topic: is offering this [Vanguard] website feature feasible?
Replies: 29
Views: 1926

Re: is offering this [Vanguard] website feature feasible?

Right, you want them to provide you all the advanced tools for 'free' and charge the lowest fees... I also hate it that walmart doesn't give me free champagne while I browse but life is full of tradeoffs. Funds give M* data other than return in a format proscribed by M*. In return the funds get exp...
by avalpert
Tue Jun 20, 2017 8:59 pm
Forum: Investing - Theory, News & General
Topic: Thoughts about tilting away from the sector you work in?
Replies: 29
Views: 1892

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

Company specific risks are far more likely to sink your business than sector-wide risks - tilting away from the entire sector seems unwarranted and probably unwise.
by avalpert
Mon Jun 19, 2017 11:38 pm
Forum: Personal Finance (Not Investing)
Topic: Auto Loan vs Mortgage
Replies: 29
Views: 2000

Re: Auto Loan vs Mortgage

No way would I pay off a less than 1% loan with a 4.5% hanging over my head There is one reason: cash flow. Not having to pay the 1% loan means more $$ is available monthly in case of emergency. No, it absolutely does not mean more $$ available in case of emergency - you had $29k available in case ...
by avalpert
Mon Jun 19, 2017 11:11 pm
Forum: Investing - Theory, News & General
Topic: International's Correlation to Energy (A Real Thing? Ended? Why?)
Replies: 13
Views: 1102

Re: International's Correlation to Energy (A Real Thing? Ended? Why?)

You are looking at a mirage. Using portfolio visualizer, for the 10 years ending 12/31/2016, VGENX has an 85% correlation to VGTSX, 82% to VEIEX and an 83% correlation to VTSMX - basically the same. The correlation has been lower in that last 6 months - but that time frame probably make it nothing b...
by avalpert
Mon Jun 19, 2017 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: Auto Loan vs Mortgage
Replies: 29
Views: 2000

Re: Auto Loan vs Mortgage

No way would I pay off a less than 1% loan with a 4.5% hanging over my head There is one reason: cash flow. Not having to pay the 1% loan means more $$ is available monthly in case of emergency. No, it absolutely does not mean more $$ available in case of emergency - you had $29k available in case ...
by avalpert
Mon Jun 19, 2017 9:57 pm
Forum: Investing - Theory, News & General
Topic: is offering this [Vanguard] website feature feasible?
Replies: 29
Views: 1926

Re: is offering this [Vanguard] website feature feasible?

Don't folks just use morningstar.com to do exactly this? How? The Portfolio X-Ray Stock Intersection tool. It is a premium feature, though. My largest overall holding is Tencent Holdings Ltd. at 0.68% of my portfolio. Tencent is currently 4% of VEMAX/VWO which is 20% of equities, which is 85.39% of...
by avalpert
Mon Jun 19, 2017 9:49 pm
Forum: Investing - Help with Personal Investments
Topic: Collecting Dividends, Waiting for Market Drop?
Replies: 25
Views: 1880

Re: Collecting Dividends, Waiting for Market Drop?

I'm just going to quote my earlier post to your last thread on you questioning/changing direction (which was five days ago) - and add that you are a perfect candidate for putting all your money into a target date fund and don't think about it again: Well, since two weeks ago you had a target allocat...
by avalpert
Mon Jun 19, 2017 3:23 pm
Forum: Investing - Help with Personal Investments
Topic: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?
Replies: 66
Views: 7177

Re: Am I being unrealistic about my expectations of dividend income? Is there a better alternative?

So with a fund such as Vanguard High Dividend Yield Index (VHDYX) or the ETF (VYM),as compared to an SP500 index fund,does one require less active selling of shares to generate income, and does the former give some downside protection? From October 9, 2007 to March 9th 2009 $10,000 invested in VHDY...
by avalpert
Mon Jun 19, 2017 1:54 pm
Forum: Investing - Theory, News & General
Topic: Avoid taking Dividends?
Replies: 21
Views: 2193

Re: Avoid taking Dividends?

The savings was 14bp in 2015, too; I didn't base it entirely on last year's number. It is a well-replicated feature of iShares foreign funds. I'll only note that if the expense ratio of a fund changed by 10bp, many Bogleheads' hair would surely be on fire. It is peculiar to me the same logic is not...
by avalpert
Mon Jun 19, 2017 1:35 pm
Forum: Investing - Theory, News & General
Topic: Avoid taking Dividends?
Replies: 21
Views: 2193

Re: Avoid taking Dividends?

Is this a strategy (avoiding dividends) for the average person or is this one of those whole other level investor kind of thing? Also, I can't imagine having 200k in losses. It's for people who have lot's of time, lot's of accumulated losses, high tax bracket and have a low threshold for what they ...
by avalpert
Mon Jun 19, 2017 1:06 pm
Forum: Investing - Theory, News & General
Topic: Avoid taking Dividends?
Replies: 21
Views: 2193

Re: Avoid taking Dividends?

Is this a strategy (avoiding dividends) for the average person or is this one of those whole other level investor kind of thing? Also, I can't imagine having 200k in losses. It's for people who have lot's of time, lot's of accumulated losses, high tax bracket and have a low threshold for what they ...
by avalpert
Mon Jun 19, 2017 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: Bonus, in bitcoin
Replies: 21
Views: 1874

Re: Bonus, in bitcoin

Spouse is receiving a bonus paid in units of a cryptocurrency. Company "may" be paying the taxes on the bonus. What are the questions I need to get answered, as the finance person in the house? I think you need to make sure they are properly reporting it, and withholding/paying FICA taxes...
by avalpert
Sun Jun 18, 2017 6:22 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Strategy for 1099 Income
Replies: 18
Views: 1189

Re: Tax Strategy for 1099 Income

I lose you on "make after-tax IRA contributions that you convert to Roth - in essence making Roth contributions every year". How am I making after-tax IRA contributions if I rolled over my IRA and my contributions to the solo 401K are pre-tax up to the allowable limits? You make after-tax...
by avalpert
Sun Jun 18, 2017 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: Negotiating a House Using Seller's Agent (opinions wanted)
Replies: 78
Views: 3056

Re: Negotiating a House Using Seller's Agent (opinions wanted)

The OP doesn't need to explain anything in relation to the owner prior purchase price - that anchor is wholly irrelevant to the price today. It is absolutely relevant. If the seller overpaid in 2012 they may be asking too much today to try and "make up for their loss." If that is the case...
by avalpert
Sun Jun 18, 2017 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Negotiating a House Using Seller's Agent (opinions wanted)
Replies: 78
Views: 3056

Re: Negotiating a House Using Seller's Agent (opinions wanted)

Not in your original response, you said that the 'sellar has a price' and that 'is the market price'. Indeed I did and I stand corrected. I stand by my original reasoning, though, even if I failed to properly convey it. Without additional knowledge of the property or area, the seller's "ballpa...

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