Search found 7583 matches

by grok87
Fri Dec 15, 2017 5:52 pm
Forum: Investing - Help with Personal Investments
Topic: Question About TIPs and TIP Funds
Replies: 18
Views: 646

Re: Question About TIPs and TIP Funds

OP here: That was my concern. However, I feel as though I am missing something in that most recommended asset allocations for retirees and near retirees recommend a percentage of TIPs funds. One problem is the time horizon. Vipsx, the regulAr vanguard tips fund has a real duration of 8 years. 5 yea...
by grok87
Thu Dec 14, 2017 3:40 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 157
Views: 42988

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Always passive wrote:
Thu Dec 14, 2017 3:07 pm
Is 0.76% real yield supposed to be good?
Right now 30 year tips yields have been grinding lower since spiking over 1% earlier in the year.

Over the past 5 years the yields have been in a 0.5% to 1.5% range.

It's hard to know...
by grok87
Tue Dec 12, 2017 6:26 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 157
Views: 42988

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Grok & Doc: Thank you for your insights and advice. I'll probably start by buying some at auction in the coming months. Meanwhile I will continue my education and will begin monitoring interest rates. Looking at the history of interest rates over the past five years I have an observation. Real (and...
by grok87
Tue Dec 12, 2017 6:32 am
Forum: Personal Finance (Not Investing)
Topic: What are your big-picture ‘rules of life’ —financial or otherwise?
Replies: 101
Views: 8816

Re: What are your big-picture ‘rules of life’ —financial or otherwise?

Lostinjersey, all the pratices you mentioned are typically mentioned in "how to be happier" type articles. They're not bad things to do. But doing them as a formula for "happiness" won't work without also having a bigger purpose in life. I suggest reading "man's search for meaning" by Viktor Franke...
by grok87
Sun Dec 10, 2017 12:11 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

With bonds, the inverse relationship between price and yield, means it doesn't matter whether you consider a risk premium to be a discounted price or higher yield. If, at some point in time, the expected value of the liquidity risk premium of a TIP is higher than the expected value of the inflation...
by grok87
Sun Dec 10, 2017 11:21 am
Forum: Investing - Theory, News & General
Topic: likely date for a bitcoin crash: does this make sense to you?
Replies: 38
Views: 2434

Re: likely date for a bitcoin crash: does this make sense to you?

"I have a strong psychic belief that [bitcoin will crash] on New Years Eve..."
https://www.youtube.com/watch?v=Kiiuc0M4L40
by grok87
Sun Dec 10, 2017 6:27 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

With bonds, the inverse relationship between price and yield, means it doesn't matter whether you consider a risk premium to be a discounted price or higher yield. If, at some point in time, the expected value of the liquidity risk premium of a TIP is higher than the expected value of the inflation...
by grok87
Sat Dec 09, 2017 2:45 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 157
Views: 42988

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

I understand your point but it still sounds like market timing. You say "TIPS are expensive now". What does that really mean? Do TIPS have some instrinsic value that you expect them to revert to? I didn't know bonds had intrinsic value different from their market value. They're not like equities. T...
by grok87
Fri Dec 08, 2017 7:15 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Doc wrote:
Thu Dec 07, 2017 12:23 pm
If I am doing this right the nominal curve (red line) is also flattening.

Image

Long data range, sorry. Just look at the right inch.
thanks. yield curve certainly looking pretty flat these days...
by grok87
Fri Dec 08, 2017 7:02 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

The TIPS yield curve has been flattening over the past 8 months as shown by the green line of the difference between the 30-year and 5-year constant maturity rates : https://fred.stlouisfed.org/graph/fredgraph.png?g=gr1E From 4/20/2017 to 12/6/2017 the 30-year yield fell 0.15% points while the 5-ye...
by grok87
Sat Nov 25, 2017 8:01 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

Many thanks to ArtsDoctor for this: In order to answer your own questions, you'll need to understand the 1994 study on which the 4% SWR was originally calculated. Once you've actually looked into that study and subsequent studies, you'll see that there are many caveats. You can start with a variety...
by grok87
Sat Nov 25, 2017 6:24 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

Here is what I came up with: 1) The 4% rule is not a rule but a guideline. 2) Some people are insecure with the 4% guideline and are willing to decrease their guideline to something lower through working longer. 3) No one is a robot and therefor spending will vary over the years. 4) Anyone who has ...
by grok87
Fri Nov 24, 2017 6:15 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

Your example essentially uses social security as a safety cushion, which is what I am going to do. But I do have serious concern about the survivalbility of the socail security, the impact of huge national debt, possible change of medicare. Nothing should be taken for granted, if you don't have to....
by grok87
Fri Nov 24, 2017 4:59 pm
Forum: Investing - Theory, News & General
Topic: Have TIPS truly been tested yet?
Replies: 48
Views: 4429

Re: Have TIPS truly been tested yet?

If you are trying to protect against unexpected inflation TIPS are likely to meet your needs (as well or better than anything else). I was surprised that they dropped in the 2008 stock crisis. They did not provide the protection that standard treasuries did. Once they recovered I exchanged what I h...
by grok87
Fri Nov 24, 2017 5:55 am
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 16
Views: 1764

Re: David Swensen Comments (Nov 2017)

[merged this post into the existing thread - moderator prudent] In a recent interview, David Swensen discussed his thoughts on investing internationally, and his thoughts on the US. I found them interesting: https://www.cfr.org/event/conversation-david-swensen SWENSEN: The types of questions that y...
by grok87
Thu Nov 23, 2017 3:10 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Short answer: it's a follow up to a Board analysis of the Vanguard Quantitative Group: https://www.bogleheads.org/forum/viewtopic.php?t=206890 Investment factors considered: All stocks are ranked according to five characteristics: High quality - healthy balance sheets, steady cash flow Effective us...
by grok87
Thu Nov 23, 2017 10:16 am
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

This is one of the advantages of the Vanguard Market Neutral fund. It's even more tax efficient than TSM or IJS. It's also levered far less and plays its QVM approach in the small caps. Thanks for the interesting comment. Agree about the recent tax-efficiency and i also like the fact that they are ...
by grok87
Wed Nov 22, 2017 4:39 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

Here is what I came up with: 1) The 4% rule is not a rule but a guideline. 2) Some people are insecure with the 4% guideline and are willing to decrease their guideline to something lower through working longer. 3) No one is a robot and therefor spending will vary over the years. 4) Anyone who has ...
by grok87
Wed Nov 22, 2017 3:57 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

Here is what I came up with: 1) The 4% rule is not a rule but a guideline. 2) Some people are insecure with the 4% guideline and are willing to decrease their guideline to something lower through working longer. 3) No one is a robot and therefor spending will vary over the years. 4) Anyone who has ...
by grok87
Wed Nov 22, 2017 1:59 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Now at 0.82%.

One theory is that corporate pension plans are buying long dated treasuries as they see to de-risk and more fully fund their plans.

https://www.bloomberg.com/amp/news/arti ... ve-flatter
by grok87
Tue Nov 21, 2017 7:46 am
Forum: Investing - Theory, News & General
Topic: Liability Matching Portfolio? Really?
Replies: 104
Views: 16446

Re: Liability Matching Portfolio? Really?

There is no such thing as a more or less "safe" asset in the longer term. Thus, the perception that it is possible to "quit the game" is a dangerous illusion. TIPS? Not for high income/high net worth investors with large taxable accounts. If we ever get the rip-roaring inflation that TIPS are bough...
by grok87
Sun Nov 19, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

lack_ey wrote:
Sat Nov 18, 2017 9:50 pm
Leverage in a fund is not like leverage in stocks, though.
Interesting point. I'll give it some thought...
by grok87
Sun Nov 19, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 16
Views: 1764

Re: An hour with David Swensen at Council of Foreign Relations

. Thanks for sharing - always good to hear what Swensen has to say. I found the part on uncorrelated assets interesting - here's an extract from the transcript. One of the most important metrics that we look at is the percentage of the portfolio that’s in what we call uncorrelated assets. And that’...
by grok87
Sat Nov 18, 2017 9:09 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

I hold two AQR funds and I'm surprised at how well they are performing in this "melt-up" environment. As you pointed out, that's not really the environment where you expect to be glad you own them. It's a subtle sign, i think, that the aqr funds actually do have more stock market beta exposure than...
by grok87
Sat Nov 18, 2017 8:28 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Agree with others concern about the amount of leverage aqr is using in its alternative funds Qspix for example is levered 6.9:1 https://funds.aqr.com/-/media/files/fund-documents/fact-sheets/spaf.pdf That means for every $1 you give them they make $6.90 worth of bets, $3.7 worth on the long side an...
by grok87
Sat Nov 18, 2017 2:10 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

I hold two AQR funds and I'm surprised at how well they are performing in this "melt-up" environment. As you pointed out, that's not really the environment where you expect to be glad you own them. Agree It's a subtle sign, i think, that the aqr funds actually do have more stock market beta exposur...
by grok87
Sat Nov 18, 2017 1:58 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5161

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Agree with others concern about the amount of leverage aqr is using in its alternative funds Qspix for example is levered 6.9:1 https://funds.aqr.com/-/media/files/fund-documents/fact-sheets/spaf.pdf That means for every $1 you give them they make $6.90 worth of bets, $3.7 worth on the long side and...
by grok87
Sat Nov 18, 2017 8:37 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

I agree. I would not be in the least concerned about the insurance companies making my annuity payments and my state's guarantor association all failing. But it's obvious that some people are. My point was merely that if that were to occur, it's very possible that a total economic collapse could be...
by grok87
Sat Nov 18, 2017 6:23 am
Forum: Investing - Theory, News & General
Topic: TSP Modernization Act Signed Into Law
Replies: 22
Views: 4137

Re: TSP Modernization Act Signed Into Law

daveydoo wrote:
Sat Nov 18, 2017 1:57 am
Read this thread with a sense of relief -- from the title, I just assumed that "modernization" would mean privatization and conversion to a high-fee model!
+1
by grok87
Fri Nov 17, 2017 7:32 pm
Forum: Investing - Theory, News & General
Topic: Goldman Sachs mulls the death of the value factor
Replies: 18
Views: 2138

Re: Goldman Sachs mulls the death of the value factor

...When BusinessWeek comes out with a "Death of Value" cover, a huge rally in the Large Value stocks will be ahead. It took about 3-4 years after the infamous "Death of Equities" article for one of the greatest bull markets ever to ignite... The "Death of Equities" article is fine. It is constantly...
by grok87
Fri Nov 17, 2017 5:52 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

If retirees truly feared running out of money more than death, then why aren't more buying guaranteed income through vehicles such as SPIAs? They might not guarantee a certain standard of living, but they do guarantee that you'll never run out of money. Why should I believe in the guarantee given b...
by grok87
Fri Nov 17, 2017 5:38 pm
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 16
Views: 1764

Re: An hour with David Swensen at Council of Foreign Relations

Great interview- thanks for posting. Just a heads up that the transcript is not perfect. Pretty sure he said "absolute return portfolio" in this quote "SWENSEN: No. Well, within the absence of return portfolio, a lot of the long/short managers or a lot of the other strategies have residual equity ex...
by grok87
Fri Nov 17, 2017 7:55 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

There was no need to cut spending in 1972 despite the market crash. You could have taken out 4.5% and been fine. VPW cutting spending was an over reaction.That is the whole flaw in the system. It is easy to go conservative and never run out of money. But that isn't a free choice. You give up spendi...
by grok87
Fri Nov 17, 2017 7:21 am
Forum: Investing - Theory, News & General
Topic: Goldman Sachs mulls the death of the value factor
Replies: 18
Views: 2138

Re: Goldman Sachs mulls the death of the value factor

In general shouldn't the underperformance of value for the last decade or so intuitively make one much more not less excited to invest in a value strategy? Or have there been a lot of people making the argument that growth outperforming value is the new normal (as opposed to value continuing to out...
by grok87
Thu Nov 16, 2017 8:24 pm
Forum: Investing - Theory, News & General
Topic: Goldman Sachs mulls the death of the value factor
Replies: 18
Views: 2138

Re: Goldman Sachs mulls the death of the value factor

An interesting article from from GS explaining the reasons why value has underperformed for a long spell: https://www.bloomberg.com/news/articles/2017-06-08/goldman-sachs-mulls-death-of-value-investing-after-losing-decade . GS believes a conjunction of macroeconomic factors and monetary policy are ...
by grok87
Thu Nov 16, 2017 3:16 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 15235

Re: The 4% rule DOES fail but still makes sense!

I'm curious what folks think about this article. https://www.manning-napier.com/Corporate/Insights/ResearchLibrary/Article/tabid/308/Article/97/Endowments-and-Foundations-A-Closer-Look-at-Spending-Rules.aspx It's more geared to endowments. But it shows that the standard 4% rule (the article uses 5%)...
by grok87
Mon Nov 13, 2017 6:23 pm
Forum: Investing - Help with Personal Investments
Topic: Rethinking I-bonds vs Tax Advantaged TIPS fund
Replies: 5
Views: 663

Re: Rethinking I-bonds vs Tax Advantaged TIPS fund

I think you have a valid point. But ibonds, as mel, pointed out have certain state tax advantages compared to tips in a regular ira/401k. Another one is better deflation protection. Ibonds can only go up. Another one is real interest rate protection. If real rates rise then tips will take a hit wher...
by grok87
Sat Nov 11, 2017 4:00 pm
Forum: Investing - Theory, News & General
Topic: My favorite bond portfolio
Replies: 19
Views: 2713

Re: My favorite bond portfolio

i like the emphasis on treasuries and tips. same approach as swensen. but i'm not sure how he is running his backtest starting in 1970 as he claims. tips didn't exist then. my own view is that it is hard to be too scientific about this. in certain periods like recently, long term treasuries have bee...
by grok87
Sat Nov 11, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Seasonal wrote:
Fri Nov 10, 2017 1:11 pm
As of the moment, 30 yr tips yield is 0.91%, making back about half of the lost yield over the last 2 weeks.
thanks- yes i saw that. makes my decision easier...
by grok87
Sat Nov 11, 2017 8:03 am
Forum: Personal Finance (Not Investing)
Topic: 11 month no pnealty CD 1.55% 1K Minnimum
Replies: 11
Views: 2019

Re: 11 month no pnealty CD 1.55% 1K Minnimum

Sure its no penalty if the bank agrees to give you your money back early. They reserve the right not to. From depositaccounts.com I have a No-Penalty CD. How do I access my funds? You can make a request to access the total balance and interest earned on your No-Penalty CD as long as it is 7 days af...
by grok87
Fri Nov 10, 2017 6:56 pm
Forum: Personal Finance (Not Investing)
Topic: 11 month no pnealty CD 1.55% 1K Minnimum
Replies: 11
Views: 2019

Re: 11 month no pnealty CD 1.55% 1K Minnimum

Sure its no penalty if the bank agrees to give you your money back early. They reserve the right not to. From depositaccounts.com I have a No-Penalty CD. How do I access my funds? You can make a request to access the total balance and interest earned on your No-Penalty CD as long as it is 7 days aft...
by grok87
Fri Nov 10, 2017 6:28 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Put another way, I think that TIPS "insurance" is currently free, because a significant number of buyers are offsetting it with an emotional aversion to facing up to what real rates currently are paying. Agree. I haven't read the Larry Swedroe source Doc cites. But there are a bunch of federal rese...
by grok87
Fri Nov 10, 2017 6:26 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

The ft article had a pay wall but I read the pimco one. It was from early 2016 when 5x5 year bei was plunging, down to like 1.5% level. I think it's around 1.8% now. The paragraph I quoted was the key to the FT article. FWIW, I found the article through a Google search and clicking the Google link ...
by grok87
Thu Nov 09, 2017 8:07 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Here's a random sample: https://blog.pimco.com/en/2016/03/is-the-fed-ignoring-an-important-signal-in-market-data/ Also see https://ftalphaville.ft.com/2015/02/26/2120296/why-isnt-the-fed-worried-about-collapsing-breakevens/ "The problem with this explanation of the recent decline in breakevens is t...
by grok87
Thu Nov 09, 2017 7:59 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

I cannot commit to 30 years at current yield levels, but maybe I'll regret that if we experience ILG-like negative real yields in the future. To me, TIPS look attractive vs. nominal Treasuries, but not to CDs. On the secondary market, CD NOMINAL less TIPS REAL rate... 1/15/2023 - 2.36 1/15/2024 - 2...
by grok87
Thu Nov 09, 2017 6:55 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 51
Views: 6140

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Expected inflation = BEI + "tips il-liquidity premium" - "inflation insurance premium" While the model may seem overly complicated, i like it. It starts with the observation that tips are less liquid than regular treasuries, less trading, higher bid-ask spreads, nasty tax rules. I think 30 year BEI...