Search found 1614 matches

by backpacker
Sun May 14, 2017 5:52 pm
Forum: Investing - Theory, News & General
Topic: "The long run is only longer than the short run, not safer"
Replies: 37
Views: 3690

Re: "The long run is only longer than the short run, not safer"

Selling you that put has the same risk for me as buying the S&P 500 for the same period. Sorry, what? Selling a 30 year European put on the S&P 500 with a strike price of 2390 has a completely different risk/payoff profile compared to a long-only purchaser of the S&P 500 at 2390. They d...
by backpacker
Sun May 14, 2017 5:29 pm
Forum: Investing - Theory, News & General
Topic: Home Country Bias...makes sense?
Replies: 235
Views: 10700

Re: Home Country Bias...makes sense?

http://i65.tinypic.com/r88enn.png I thought I would take a swing at defending willthrill81's international skepticism. The best case for international skepticism IMO relies on being skeptical of long-term historical data, not relying on it. Take a look at this chart from Vanguard's white paper on h...
by backpacker
Sat May 13, 2017 1:21 pm
Forum: Investing - Theory, News & General
Topic: "The long run is only longer than the short run, not safer"
Replies: 37
Views: 3690

Re: "The long run is only longer than the short run, not safer"

If stocks are less risky over increasing time horizons, then put options would become cheaper with longer expiration date. However, they don't. Anyone who thinks the risk of the market declines over time should go price some put options on S&P 500 ETFs. If your belief is correct, these securiti...
by backpacker
Thu May 11, 2017 3:30 pm
Forum: Investing - Theory, News & General
Topic: WSJ: Most market anomalies academics have identified don’t exist
Replies: 53
Views: 5975

WSJ: Most market anomalies academics have identified don’t exist

From the Wall Street Journal, a summary of new study that attempted to replicate 447 academic factors using consistent statistical methodology. A link to the original article "An Algorithm, an ETF and an Academic Study Walk Into a Bar" can be found here . As it turns out, 380 factors faile...
by backpacker
Thu May 11, 2017 1:09 pm
Forum: Investing - Help with Personal Investments
Topic: international stocks poised to outperform US ???
Replies: 80
Views: 6616

Re: international stocks poised to outperform US ???

That means that while it now takes twice as many euros to get a dollar, things in France also cost twice as many euros. Your French wine company has to make twice as many Euros to send you a dollar, but that’s easy because they are now getting twice as many euros for their wine. Here you can see th...
by backpacker
Thu May 11, 2017 9:59 am
Forum: Investing - Help with Personal Investments
Topic: international stocks poised to outperform US ???
Replies: 80
Views: 6616

Re: international stocks poised to outperform US ???

If the dollar goes up, your intl investments go down but your buying power per dollar goes up. Again, good offsetting bad. If you mostly buy services and things denominated in dollars, you can't buy more of those services and things because the dollar has gained relative to other currencies. Instea...
by backpacker
Wed May 10, 2017 8:55 am
Forum: Investing - Help with Personal Investments
Topic: Maximum Gain,swinging for the fences
Replies: 65
Views: 5131

Re: Maximum Gain,swinging for the fences

In that case, the clear winner is a leveraged portfolio. OP also stated "with new investment dollars" though. Would that eliminate the possibility of using leverage? Seems like "going negative" or eating into the existing portfolio is a non-starter. The OP could use new money to...
by backpacker
Wed May 10, 2017 8:42 am
Forum: Investing - Help with Personal Investments
Topic: Maximum Gain,swinging for the fences
Replies: 65
Views: 5131

Re: Maximum Gain,swinging for the fences

If your goal was to maximize potential gains with new investment dollars (without regard for loss) between today and 1/1/2021 what would you do with the ? "Maximum Gain Without Regard for Loss" makes me think of ridiculously risky "bets" with extremely high return potential but ...
by backpacker
Mon May 08, 2017 6:42 pm
Forum: Investing - Help with Personal Investments
Topic: Solid justification for including all stocks & NO bonds?
Replies: 143
Views: 7070

Re: Solid justification for including all stocks & NO bonds?

Suppose the OP has $2 million, invests it all in a global stock portfolio, and decides to live off the dividends. The dividend yield is currently 2.25%, so that would be $45k a year. Everyone is focusing on the fact that the price of the portfolio could fall by half, but who cares? If you're living...
by backpacker
Mon May 08, 2017 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Solid justification for including all stocks & NO bonds?
Replies: 143
Views: 7070

Re: Solid justification for including all stocks & NO bonds?

Suppose the OP has $2 million, invests it all in a global stock portfolio, and decides to live off the dividends. The dividend yield is currently 2.25%, so that would be $45k a year. Everyone is focusing on the fact that the price of the portfolio could fall by half, but who cares? If you're living ...
by backpacker
Mon May 08, 2017 8:58 am
Forum: Investing - Help with Personal Investments
Topic: Solid justification for including all stocks & NO bonds?
Replies: 143
Views: 7070

Re: Solid justification for including all stocks & NO bonds?

All of this makes it sounds like I'm a dividend investor, which I'm not. The dividend investors I've met tend to become obsessed with dividends as a measure of productivity when, in fact, its only one way of estimating it. A company is not less productive because it decides to return money in the f...
by backpacker
Mon May 08, 2017 8:48 am
Forum: Investing - Help with Personal Investments
Topic: When do I add bonds to my child's 529?
Replies: 22
Views: 2142

Re: When do I add bonds to my child's 529?

Maybe start by picking an allocation for the 529s and your retirement portfolio thinking of them as different portfolios. Then forget that they are different portfolios and use that as your overall allocation. Then distribute funds across accounts based on taxes, funds available, fees and such. As ...
by backpacker
Mon May 08, 2017 8:40 am
Forum: Investing - Theory, News & General
Topic: Are indexed funds overblown?
Replies: 89
Views: 7206

Re: Are indexed funds overblown?

a) what happens if public stocks get very cheap with 99.9999% indexers: Companies generate capital by issuing either stocks (ownership) or by bonds (loans). If stocks look very cheap compared to interest rates(bonds), companies can buyback their own shares. Since 2009, there has been a huge amount ...
by backpacker
Mon May 08, 2017 7:59 am
Forum: Investing - Help with Personal Investments
Topic: Solid justification for including all stocks & NO bonds?
Replies: 143
Views: 7070

Re: Solid justification for including all stocks & NO bonds?

Is there any solid reason NOT to invest 100% in stocks, perhaps a balance of large cap, TSM, and TISM? Telling someone that there are good reasons to put their entire portfolio in stocks is a little bit like telling someone that there are good reasons to have a drink. Generally true, but the person...
by backpacker
Mon May 08, 2017 7:04 am
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 70
Views: 11733

Re: Bill Sharpe's preferred portfolio

An answer I've heard is someone who is employed at a small distressed company may want to tilt to large growth. But I'm not sure that really makes sense. Do employment hedging properties really matter enough to affect portfolio decisions so much? Also that assumes no behavioral component to value o...
by backpacker
Mon May 08, 2017 6:56 am
Forum: Investing - Help with Personal Investments
Topic: When do I add bonds to my child's 529?
Replies: 22
Views: 2142

Re: When do I add bonds to my child's 529?

Maybe start by picking an allocation for the 529s and your retirement portfolio thinking of them as different portfolios. Then forget that they are different portfolios and use that as your overall allocation. Then distribute funds across accounts based on taxes, funds available, fees and such. As ...
by backpacker
Sat May 06, 2017 1:54 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with 300,000?
Replies: 29
Views: 3069

Re: What to do with 300,000?

If it makes sense for you to DCA into a market because it has hit new highs, then it makes sense for me to sell everything and DCA back into the market because it has reached new highs. Why shouldn't I be a bit more cautious? It may mean you shouldn't necessarily wait for a pre programmed rebalance...
by backpacker
Sat May 06, 2017 1:28 pm
Forum: Investing - Theory, News & General
Topic: Anyone following the latest in Bitcoin and cryptocurrency news?
Replies: 25
Views: 4607

Re: Anyone following the latest in Bitcoin and cryptocurrency news?

With the advent of dark markets, we will always have cryptocurrency. The only questions are which one and how mainstream will it get? I'm not convinced that bitcoin will still be the currency of choice in ten years. Persistent currency deflation is a big problem and the reason that no one is on the ...
by backpacker
Sat May 06, 2017 1:24 pm
Forum: Investing - Theory, News & General
Topic: Fuzzy size factors
Replies: 2
Views: 517

Re: Fuzzy size factors

This is the same thing DFA does with their trading bands or whatever they're called. You don't trade a value stock the moment it stops being a value stock. You slowly selling the holding incase the stock decides to migrate back into being a value stock.
by backpacker
Sat May 06, 2017 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Should I pay my entire credit card balance if I have 0% APR?
Replies: 4
Views: 442

Re: Should I pay my entire credit card balance if I have 0% APR?

I recently got a credit card that includes a 6-month 0% APR promotion. I definitely can (and always do) simply pay off the entire statement balance each month, but was wondering if, given the promotion, could I somehow benefit from only paying the minimum? Well, you can put the money in a savings a...
by backpacker
Sat May 06, 2017 1:20 pm
Forum: Investing - Help with Personal Investments
Topic: managed vs indexed funds for international stocks
Replies: 16
Views: 1719

Re: managed vs indexed funds for international stocks

Aside from other factors, such as that managers often bring more risk than just following an index, is the above comparison method even a valid way to look at things? No. You have no way of knowing whether the outperformance reflects skill or pure luck. If anything, the outperformance suggests that...
by backpacker
Sat May 06, 2017 1:13 pm
Forum: Investing - Help with Personal Investments
Topic: Another allocation between spouses question
Replies: 5
Views: 551

Re: Another allocation between spouses question

I would do whatever is most convenient. Think of your funds as one big portfolio that just happens to be located across several accounts. Probably, the easiest thing to do is to have a 60/40 split (or whatever) in each account.
by backpacker
Sat May 06, 2017 1:10 pm
Forum: Investing - Help with Personal Investments
Topic: Aggressive index funds
Replies: 15
Views: 1806

Re: Aggressive index funds

Taking on additional risk has diminishing marginal returns. If you were to, say, hold an all stock portfolio with Vanguard total market funds (VTSAX VTIAX) you would IMO have very satisfactory results with a reasonably high but manageable level of risk. The problem with actively managed funds (even ...
by backpacker
Sat May 06, 2017 1:03 pm
Forum: Investing - Help with Personal Investments
Topic: Fixed Annuities - Pros -vs- Cons
Replies: 28
Views: 2647

Re: Fixed Annuities - Pros -vs- Cons

What are the terms of the proposed annuities? How would they fit into your financial plans? Maybe tell us what companies are offering them?

Myself, I would rather just put the money in a conservative balanced fund.

Vanguard also offers fixed annuities.
by backpacker
Sat May 06, 2017 12:48 pm
Forum: Investing - Help with Personal Investments
Topic: Signed up with 2 Advisors - Need Feedback, My Questions
Replies: 30
Views: 1754

Re: Signed up with 2 Advisors - Need Feedback, My Questions

confusedinvestor wrote:Signed up with 2 Advisors.


I believe this is known as sinning boldly. :D

More seriously, why not use Vanguard advisory service? They're top notch and cost only .3%.
by backpacker
Sat May 06, 2017 12:01 pm
Forum: Investing - Theory, News & General
Topic: Why should this chart not scare me from investing?
Replies: 20
Views: 1702

Re: Why should this chart not scare me from investing?

Literal cash isn't fair. Try something that fairly represents typical ultra-low-risk interest-earning investments, like Treasury bills and decent bank savings accounts. In real terms they are all roughly flat, close to zero real return. This is a fair point. You might wonder, though, whether the US...
by backpacker
Sat May 06, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: Why should this chart not scare me from investing?
Replies: 20
Views: 1702

Re: Why should this chart not scare me from investing?

star9 wrote:Please tell me why this chart shouldn't scare me away from the stock market.


Image
by backpacker
Sat May 06, 2017 10:18 am
Forum: Investing - Help with Personal Investments
Topic: What to do with 300,000?
Replies: 29
Views: 3069

Re: What to do with 300,000?

Lump sum vs DCA is another example of over use of the market timing label. Yes, studies have shown that lump sum investing usually turns out better than DCA. Some common sense would indicate that the best time to lump sum is when the market is well off it's historic high - say in 2008-2009. The bes...
by backpacker
Sat May 06, 2017 9:32 am
Forum: Personal Consumer Issues
Topic: Honda vs. Mazda vs. Ford
Replies: 40
Views: 3136

Re: Honda vs. Mazda vs. Ford

If you are buying a Honda, buy new. Hondas depreciate so little in the first few years, it doesn't make sense to buy used. This is a myth. The same is often said of Toyotas, but I bought a three-year old Toyota with like 35,000 miles for 2/3 the price of buying new. It probably does not make sense ...
by backpacker
Sat May 06, 2017 8:59 am
Forum: Investing - Help with Personal Investments
Topic: Help: Vanguard Total International Stock Market vs. Schwab International Index
Replies: 15
Views: 1532

Re: VGTSX vs SWISX

I've been intrigued with Schwab's new lower cost index funds.....had reluctantly been using ETFs to save a bit. But with the new lower ERs, I'd like to go back to index funds. Is there are reason you want to use Schwab instead of Vanguard? Vanguard sends all of its security lending revenue back to ...
by backpacker
Sat May 06, 2017 8:37 am
Forum: Investing - Theory, News & General
Topic: value stocks in taxable
Replies: 8
Views: 637

Re: value stocks in taxable

^ OK, this spreadsheet is amazing. That's what you need.
by backpacker
Sat May 06, 2017 8:32 am
Forum: Investing - Theory, News & General
Topic: Are indexed funds overblown?
Replies: 89
Views: 7206

Re: Are indexed funds overblown?

I haven't been in the investing world too long but the one thing I've noticed is that when everybody is so sure, trouble eventually follows. Conventional wisdom has also long said the default risk on U.S. Treasuries is low, but that stocks are likely to generate higher real returns in the long run....
by backpacker
Sat May 06, 2017 7:21 am
Forum: Investing - Theory, News & General
Topic: "Fake Markets"
Replies: 10
Views: 1236

Re: "Fake Markets"

The article refutes all the claims by the doomsday crowd (Peter Schiff, Marc Faber) that the Fed is making things worse and the end is nigh. It doesn't say that asset purchasing, easy credit, or excess liquity isn't affecting the markets. Only that the market isn't overvalued. Or wasn't back in 201...
by backpacker
Sat May 06, 2017 7:12 am
Forum: Investing - Help with Personal Investments
Topic: Help: Vanguard Total International Stock Market vs. Schwab International Index
Replies: 15
Views: 1532

Re: VGTSX vs SWISX

I've been intrigued with Schwab's new lower cost index funds.....had reluctantly been using ETFs to save a bit. But with the new lower ERs, I'd like to go back to index funds. Is there are reason you want to use Schwab instead of Vanguard? Vanguard sends all of its security lending revenue back to ...
by backpacker
Sat May 06, 2017 7:06 am
Forum: Investing - Theory, News & General
Topic: value stocks in taxable
Replies: 8
Views: 637

Re: value stocks in taxable

You can estimate the cost of holding value stocks in a taxable account directly using last year's qualified dividends. The summary page from Vanguard is here . So for example, US total market had 92% qualified dividends and small cap value had 74%. The dividend yield for both funds is about 1.8% for...
by backpacker
Fri May 05, 2017 10:22 pm
Forum: Investing - Theory, News & General
Topic: "Fake Markets"
Replies: 10
Views: 1236

Re: "Fake Markets"

I usually stop reading articles once I see the claim that markets are "distorted" by central banks. They're not, really. Central banks have far less power than we usually think. They only move the shortest end of the yield curve at best. Valuations are higher for stocks and yields are low...
by backpacker
Fri May 05, 2017 10:07 pm
Forum: Investing - Help with Personal Investments
Topic: Investing 25k using DCA
Replies: 13
Views: 1030

Re: Investing 25k using DCA

TropikThunder wrote:
badbreath wrote:got it but I would rather be right two thirds the times then wrong one third.

Totally agree. My point was just that the DCA didn't lose money, it just did less well then lump sum.


I would think that doing less well would be a great reason not to DCA?
by backpacker
Fri May 05, 2017 9:03 pm
Forum: Investing - Theory, News & General
Topic: "Fake Markets"
Replies: 10
Views: 1236

Re: "Fake Markets"

I usually stop reading articles once I see the claim that markets are "distorted" by central banks. They're not, really. Central banks have far less power than we usually think. They only move the shortest end of the yield curve at best. Valuations are higher for stocks and yields are lowe...
by backpacker
Fri May 05, 2017 8:59 pm
Forum: Investing - Help with Personal Investments
Topic: Help: Vanguard Total International Stock Market vs. Schwab International Index
Replies: 15
Views: 1532

Re: VGTSX vs SWISX

I've been intrigued with Schwab's new lower cost index funds.....had reluctantly been using ETFs to save a bit. But with the new lower ERs, I'd like to go back to index funds. Is there are reason you want to use Schwab instead of Vanguard? Vanguard sends all of its security lending revenue back to ...
by backpacker
Fri May 05, 2017 8:39 pm
Forum: Personal Consumer Issues
Topic: Honda vs. Mazda vs. Ford
Replies: 40
Views: 3136

Re: Honda vs. Mazda vs. Ford

I'm 24 with not a big savings, but enough for car payments for sure. No no no. If you can't pay cash for the car, don't buy it. If you are buying a Honda, buy new. Hondas depreciate so little in the first few years, it doesn't make sense to buy used. This is a myth. The same is often said of Toyota...
by backpacker
Fri May 05, 2017 8:32 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with 300,000?
Replies: 29
Views: 3069

Re: What to do with 300,000?

What if you had stated in your IPS a policy that any time you have a lump sum of cash you will invest it 10% at a time (regardless of perceived market valuation) to ensure against losing the investment in a sudden market crash? I don't see how you can say that would be market timing. That would not...
by backpacker
Fri May 05, 2017 8:23 pm
Forum: Investing - Help with Personal Investments
Topic: New investor needing advice UK-US
Replies: 22
Views: 1348

Re: New investor needing advice

Someone who knows more about the UK tax system should comment on this. I would think that there should be no general problems.
by backpacker
Fri May 05, 2017 8:20 pm
Forum: Personal Finance (Not Investing)
Topic: Investing in Vanguard's Wellesley Income fund for 10 years to buy car
Replies: 21
Views: 2985

Re: Investing in Vanguard's Wellesley Income fund for 10 years to buy car

What are your thoughts on investing it VWINX, Vanguard's Wellesley Income fund? I'm new to investing outside of retirement. Only ~36% of Wellesley's dividends are qualified, so you'll be paying your normal tax rate for ~64% of the Wellesley dividend income. https://personal.vanguard.com/us/insights...
by backpacker
Fri May 05, 2017 8:15 pm
Forum: Investing - Theory, News & General
Topic: Research on advisor vs no advisor as opposed to passive vs active
Replies: 66
Views: 3304

Re: Research on advisor vs no advisor as opposed to passive vs active

So I'll be honest I'm not sold on it, at all. The idea is that you're paying for a team of people making the best data-based allocation decisions using low cost instruments. This 0.15 is on TOP of the 1% AUM that ML charges just to have your money with them. So, the true cost of the entire investme...
by backpacker
Fri May 05, 2017 8:09 pm
Forum: Investing - Theory, News & General
Topic: "Ten Commandments" by Jonathan Clements
Replies: 24
Views: 3505

Re: "Ten Commandments" by Jonathan Clements

12) Ignore commandment number 3. Make your decision between owning and renting based on actual numbers for your area. If you rent, put your extra equity into stocks rather than a house. Outside of a few aberrant markets (i.e. San Francisco, NYC), I've not seen any actual instances where renting was...
by backpacker
Fri May 05, 2017 7:58 pm
Forum: Investing - Theory, News & General
Topic: Buffett/IBM
Replies: 73
Views: 6509

Re: Buffett/IBM

10% of my portfolio is in IBM at a very low cost basis from a small stock gift when I was very young. Curious what Bogleheads would do given 20 quarters of revenue decline and Buffett's sell announcement. Also, Cramer likes it so that's a red flag. Big tax hit to sell it. Thoughts? If you are worri...
by backpacker
Fri May 05, 2017 5:26 pm
Forum: Investing - Theory, News & General
Topic: "Ten Commandments" by Jonathan Clements
Replies: 24
Views: 3505

Re: "Ten Commandments" by Jonathan Clements

12) Ignore commandment number 3. Make your decision between owning and renting based on actual numbers for your area. If you rent, put your extra equity into stocks rather than a house. Outside of a few aberrant markets (i.e. San Francisco, NYC), I've not seen any actual instances where renting was...
by backpacker
Fri May 05, 2017 2:40 pm
Forum: Investing - Theory, News & General
Topic: Research on advisor vs no advisor as opposed to passive vs active
Replies: 66
Views: 3304

Re: Research on advisor vs no advisor as opposed to passive vs active

So I'll be honest I'm not sold on it, at all. The idea is that you're paying for a team of people making the best data-based allocation decisions using low cost instruments. This 0.15 is on TOP of the 1% AUM that ML charges just to have your money with them. So, the true cost of the entire investme...
by backpacker
Fri May 05, 2017 2:26 pm
Forum: Investing - Theory, News & General
Topic: "Ten Commandments" by Jonathan Clements
Replies: 24
Views: 3505

Re: "Ten Commandments" by Jonathan Clements

12) Ignore commandment number 3. Make your decision between owning and renting based on actual numbers for your area. If you rent, put your extra equity into stocks rather than a house.
by backpacker
Fri May 05, 2017 2:21 pm
Forum: Personal Finance (Not Investing)
Topic: Most Common Financial Mistakes
Replies: 108
Views: 14740

Re: Most Common Financial Mistakes

Worst mistake: Portfolio optimization. It's always tempting to think that there's a "best" portfolio out there for me, but there isn't. And thinking there is leads to all sorts of bad behavior. Fiddling with my asset allocation. Switching funds. The goal of investing is to build a good por...