Search found 1894 matches

by jalbert
Wed May 24, 2017 1:55 pm
Forum: Investing - Theory, News & General
Topic: Total Bond vs Total International Bond
Replies: 11
Views: 602

Re: Total Bond vs Total International Bond

Vanguard's position is that interest rate changes in different countries are not correlated, so that int'l bond diversification reduces short-term term risk. Hm, to be a little more careful/specific here, they say that interest changes are somewhat correlated, rather than perfectly correlated. They...
by jalbert
Wed May 24, 2017 1:47 pm
Forum: Investing - Theory, News & General
Topic: Total Bond vs Total International Bond
Replies: 11
Views: 602

Re: Total Bond vs Total International Bond

Vanguard's position is that interest rate changes in different countries are not fully correlated, so that int'l bond diversification reduces short-term term risk. Hedge return is the spread between short-term US and int'l rates because the hedge contracts are short term. This has been less than the...
by jalbert
Wed May 24, 2017 3:44 am
Forum: Investing - Theory, News & General
Topic: American Funds beat out Vanguard Index over lifetime?
Replies: 62
Views: 6394

Re: American Funds beat out Vanguard Index over lifetime?

Vanguard Total Market Admiral: $32,291, CAGR 15.1% American Funds New Economy: $34,757, CAGR 16.12% American Funds New Economy has a significant growth tilt relative to the total market, as the portfolio management strategy is focused on companies with new innovation potential, which generally are ...
by jalbert
Sun May 21, 2017 11:01 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring at 50. Making sure my investments are in order.
Replies: 15
Views: 3281

Re: Retiring at 50. Making sure my investments are in order.

Only concern I see is inflation exposure from not having SS (cola'd) nor any other assets that are cola'd or inflation-adjusted. If retiring at 50, and if your spouse is younger, you have a 50+ year retirement period to be concerned of. That's long enough that robust inflation could become an issue ...
by jalbert
Sun May 21, 2017 10:39 pm
Forum: Investing - Theory, News & General
Topic: Yield Curve and the Next Stock Market Correction
Replies: 36
Views: 3062

Re: Yield Curve and the Next Stock Market Correction

Inverted yield curves are not just predictive of recessions but contribute to their cause. Banks borrow short and lend long. When the yield curve is inverted, it becomes unprofitable for banks to make loans, which dampens economic activity. It would be incorrect to say that a recession is inevitable...
by jalbert
Fri May 19, 2017 5:54 pm
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2951

Re: Justification for holding Emerging Markets?

Alot of the hype of EM is driven by the EM/China/commodities boom of 2002-2007. After the currency crises of the 1990's, EM countries stabilized their currencies, and the outsourcing/offshoring craze that accelerated in the recovery of 2002 started a large flood of capital into EM economies. This cr...
by jalbert
Tue May 16, 2017 4:30 pm
Forum: Investing - Help with Personal Investments
Topic: Has anyone sold TIPS prior to maturity
Replies: 21
Views: 1188

Re: Has anyone sold TIPS prior to maturity

Not sure what is meant by full liquidity here. TIPs have had some liquidity problems at various times in the past. Aside from the issues in 2008 when Lehman went under, when were these? (Not being argumentative--I actually just didn't realize there was more than 1 situation). From 1997, when TIPs w...
by jalbert
Mon May 15, 2017 9:51 pm
Forum: Investing - Help with Personal Investments
Topic: Has anyone sold TIPS prior to maturity
Replies: 21
Views: 1188

Re: Has anyone sold TIPS prior to maturity

gilgamesh wrote:Theoretically they have full liquidity, but has anyone actually done this...sell TIPS they bought in the secondary market.

Not sure what is meant by full liquidity here. TIPs have had some liquidity problems at various times in the past.
by jalbert
Sat May 13, 2017 10:37 pm
Forum: Investing - Theory, News & General
Topic: Do You Think Behavioral Anomalies Will Persist?
Replies: 40
Views: 3064

Re: Do You Think Behavioral Anomalies Will Persist?

Momentum is all behavioral and at least some part of value is behavioral.

These are unproven theories.
by jalbert
Sat May 13, 2017 10:19 pm
Forum: Investing - Theory, News & General
Topic: American Funds beat out Vanguard Index over lifetime?
Replies: 62
Views: 6394

Re: American Funds beat out Vanguard Index over lifetime?

Of course, this is all picking the funds NOW that have outperformed the Vanguard Index - not a fair comparison. Correct. If 30 people roll dice 15 times and add up the results, somebody will win. Pointing out who won after the fact is trivial. American Funds products are good products if you can ge...
by jalbert
Fri May 12, 2017 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: Can you suggest a mortgage lender who does not resell
Replies: 67
Views: 4362

Re: Can you suggest a mortgage lender who does not resell

Interesting. I have never seen or heard of such a thing. And I live in Illinois, proud home of the 2nd highest property taxes in the country. It has nothing to do with the tax collector. Many mortgage originators charge a 0.25% up front closing cost fee (0.25% of original loan balance) if you choos...
by jalbert
Thu May 11, 2017 6:32 pm
Forum: Personal Finance (Not Investing)
Topic: Can you suggest a mortgage lender who does not resell
Replies: 67
Views: 4362

Re: Can you suggest a mortgage lender who does not resell

With regards to the situation where the subsequent company required escrow, just make sure that the contract you sign specifies that you WILL NOT escrow. It is not uncommon to pay an additional 0.25% in closing costs if you don't escrow taxes and insurance. At today's interest rates, there isn't an...
by jalbert
Thu May 11, 2017 2:48 am
Forum: Personal Finance (Not Investing)
Topic: Can you suggest a mortgage lender who does not resell
Replies: 67
Views: 4362

Re: Can you suggest a mortgage lender who does not resell

A conforming loan that can be sold to fannie or freddie is worth more to a lender than one that cannot, all else equal, which translates into a better APR for the borrower. It is unlikely that a lender is going to offer a lower APR because they wish to portfolio a loan.
by jalbert
Tue May 09, 2017 12:18 am
Forum: Investing - Theory, News & General
Topic: Even if active managers aren't better at picking winners, can't they be better at picking losers?
Replies: 13
Views: 1430

Re: Even if active managers aren't better at picking winners, can't they be better at picking losers?

It would not be uncommon for some of the market's biggest winners to form a fairly small subset of the stocks that you would have filtered out because the firms weren't doing well, but that were able to turn things around.
by jalbert
Tue May 09, 2017 12:09 am
Forum: Investing - Help with Personal Investments
Topic: managed vs indexed funds for international stocks
Replies: 16
Views: 1494

Re: managed vs indexed funds for international stocks

If you look at Report #6, you will see that over 80% of international index funds outperform managed funds.

I think what is meant here is that over 80% of actively managed int'l funds trailed their index benchmarks.
by jalbert
Mon May 08, 2017 6:51 pm
Forum: Investing - Theory, News & General
Topic: Stable Value Funds in Portfolio
Replies: 45
Views: 5595

Re: Stable Value Funds in Portfolio

12% Intermediate Treasuries 5.25 yrs duration avg 9% Tips Fund Duration 8.1 yrs 7% Stable Value This looks very reasonable. I think it is a good idea to diversify a stable value fund with bonds having no credit risk rather than with a bond index fund. It would be a good idea to try to learn what as...
by jalbert
Mon May 08, 2017 2:32 am
Forum: Investing - Help with Personal Investments
Topic: managed vs indexed funds for international stocks
Replies: 16
Views: 1494

Re: managed vs indexed funds for international stocks

Not only do the active funds in question have high ERs, but transaction costs for US funds investing in non-US stocks are higher than for domestic stocks. As a result, I think the case that is sometimes made for active mgmt being preferred for int'l investing by US investors is dubious at best.
by jalbert
Sun May 07, 2017 10:55 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

I think your framework sounds about right but it feels like there's a missing piece (unless the 2% they are buying has no value -i.e. is on its way to zero). Yeah, I suppose the framework would use worst case loss on a purchase rather than total purchase price. The general account is set up to hold...
by jalbert
Sun May 07, 2017 7:42 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

I wonder how they come up with that price? I don't know what the method is, but they could, for example, decide on a perceived worst case scenario of percentage of the portfolio that might have to be purchased over any 10 year period. E.g. If they thought the general account could have to purchase ...
by jalbert
Sun May 07, 2017 7:32 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

in general i am not a fan of leverage. but this fund needs to hold a substantial cash buffer since its real estate investments are very illiquid. one way to think about the 14.6% leverage is that it nets off against the 17% cash and lets them be fully invested in a real estate strategy.. Yeah, that...
by jalbert
Sun May 07, 2017 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: How to get out of a apartment renter lease? They want $3,600
Replies: 40
Views: 3052

Re: How to get out of a apartment renter lease? They want $3,600

Yep and they are charging 2 months worth or 1 month plus deposit. not the 5 months he has remaining. 1 month is absolutely a reasonable time to collect on re-rent charges. Plus any damages, extra cleaning, etc... In the end, it is a fair offer. Certainly if they were asking for the full 5 months pl...
by jalbert
Sat May 06, 2017 10:05 pm
Forum: Personal Finance (Not Investing)
Topic: How to get out of a apartment renter lease? They want $3,600
Replies: 40
Views: 3052

Re: How to get out of a apartment renter lease? They want $3,600

For all of those that say check the lease to see what it says - I think his lease probably states that he agreed in writing to live there 4-5 more months, the duration of his lease. Overall, seems like a fair offer that they gave you to get out of your contract. If that offer exceeds what is allowe...
by jalbert
Sat May 06, 2017 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: My investments inside my 401k.. any good?
Replies: 5
Views: 513

Re: My investments inside my 401k.. any good?

Do not recommend holding value and growth in separate funds-- use a blended fund if not tilting. When a stock moves from value to growth or vice versa you are likely to pay (a share of) the transaction cost of selling it in one fund and buying it in another.
by jalbert
Sat May 06, 2017 9:41 pm
Forum: Investing - Theory, News & General
Topic: Could someone briefly explain confusing expense ratio fees to me?
Replies: 14
Views: 1280

Re: Could someone briefly explain confusing expense ratio fees to me?

Would suggest contacting the plan administrative contact person in HR to ask for clarification instead of relying on speculation.
by jalbert
Sat May 06, 2017 6:40 pm
Forum: Investing - Theory, News & General
Topic: Puerto Rico Bonds Bankrupcy
Replies: 37
Views: 3826

Re: Puerto Rico Bonds Bankrupcy

There is no power higher than a sovereign, so nobody has the legal authority to remove its obligations, unless its creditors forgive the debt, including by agreeing to accept less than originally contracted, which sometimes colorfully is called take a haircut. Puerto Rico is an exception, however, ...
by jalbert
Sat May 06, 2017 12:21 pm
Forum: Personal Finance (Not Investing)
Topic: How to get out of a apartment renter lease? They want $3,600
Replies: 40
Views: 3052

Re: How to get out of a apartment renter lease? They want $3,600

I have to now break my lease 4-5 months before it ends and as my current rent is $1,800/mo, management company will charge me 1 month rent and keep my security deposit. Total $3,600 What are my options? Thank you. In many states, the landlord or property manager must make a good faith effort to mit...
by jalbert
Sat May 06, 2017 11:52 am
Forum: Investing - Theory, News & General
Topic: Morgan Stanley drops Vanguard funds
Replies: 26
Views: 7361

Re: Morgan Stanley drops Vanguard funds

Vanguard funds don't collect 12b-1 fees, so Morgan Stanley would be forced to disclose their revenue streams transparently in order to profit from Vanguard funds.
by jalbert
Fri May 05, 2017 12:16 pm
Forum: Investing - Help with Personal Investments
Topic: Home Bias and International Allocations
Replies: 11
Views: 745

Re: Home Bias and International Allocations

You should lend the most to countries or companies that have the most debt does not (make sense). You have to consider debt/equity and debt/income ratios, not total debt for corporate debt and debt/GDP ratio for sovereign debt. Large-cap companies may hold more debt than small-cap because of their ...
by jalbert
Thu May 04, 2017 8:07 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

Fair enough. I haven't invested in TRE since 2007. I do still believe in the diversification benefit with respect to equities and bonds.
by jalbert
Thu May 04, 2017 7:53 pm
Forum: Investing - Theory, News & General
Topic: Increasing correlation between US and international equities
Replies: 66
Views: 4204

Re: Increasing correlation between US and international equities

Regardless of globalization effects, there is a sector diversification benefit. If you compare vtsax (total US) to vtiax (total int'l) vtiax has larger financial and materials sectors, while vtsax has larger tech and healthcare sectors.
by jalbert
Thu May 04, 2017 1:00 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

They took on leverage during the credit crisis to meet liquidity needs but thought all the loans had been repaid. Do they have current leverage?
by jalbert
Thu May 04, 2017 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

David Swensen in his book on personal investing goes through why investors should avoid "private label" REITs, but why TIAA RE Annuity is an exception (he was on the board). TIAA RE is not a REIT. TRE is unleveraged. The idea is that instead of allocating say 70% stock and 30% bonds you m...
by jalbert
Thu May 04, 2017 11:44 am
Forum: Investing - Theory, News & General
Topic: What conditions could make returns for TSM and S&P separate significantly?
Replies: 24
Views: 1459

Re: What conditions could make returns for TSM and S&P separate significantly?

The conditions for a larger separation would be a long investment horizon with incremental outperformance compounding over time. In terms of a short-term separation, the largest potentially realistic scenario might be sharp movements in opposite directions of the tech and real estate sectors. If tec...
by jalbert
Thu May 04, 2017 12:25 am
Forum: Investing - Theory, News & General
Topic: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg
Replies: 64
Views: 6686

Re: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg

The market valuations went up through the full period (to today), and that's what counts. You can't really make a case based on market behavior through a small part of the bet, while ignoring market behavior over the rest of it. Had the bet period started 10-14 months later instead of on 1/1/2008, ...
by jalbert
Wed May 03, 2017 3:44 pm
Forum: Investing - Theory, News & General
Topic: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg
Replies: 64
Views: 6686

Re: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg

Mr. Seides does mention that: The S&P 500 index fund fell 50 percent in the first 14 months of the bet. This means that the timing of the bet turned out to be especially bad for Mr. Buffett-- Mr. Seides mentioned that hedge funds mitigate market risk so they get their real advantage when market ...
by jalbert
Wed May 03, 2017 2:31 pm
Forum: Investing - Theory, News & General
Topic: R and Data Sets
Replies: 18
Views: 1643

Re: R and Data Sets

I believe that testing hypotheses and developing models is part of data analysis. .... I agree with what you said, but have a slight issue with how you said it. I said it in a provocative way to make the point because misuse of statistical tests is so pervasive these days. But I believe you have it...
by jalbert
Wed May 03, 2017 12:05 am
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

In this chart, green is total US stock market, and dark blue is TIAA RE. Notice how the downdraft and recovery of TRE in 2008-2009 is shifted forward in time? This is the diversification benefit that was delivered in the severe downturn of 2008-2009. Stocks were already well into recovery mode as T...
by jalbert
Tue May 02, 2017 7:44 pm
Forum: Investing - Theory, News & General
Topic: Schwab Vs. Vanguard?
Replies: 32
Views: 4457

Re: Schwab Vs. Vanguard?

Otherwise, tracking error can easily be swamped by differences in the returns of the two "total market" indexes in question. That is true of total return, but tracking error is error relative to the index being tracked, so a good measure of net costs even for similar but different indices.
by jalbert
Mon May 01, 2017 10:08 pm
Forum: Investing - Theory, News & General
Topic: R and Data Sets
Replies: 18
Views: 1643

Re: R and Data Sets

It is a mistake to believe that the purpose of R or SPSS is to analyze data. The purpose is to test hypotheses and develop models. To understand how to use R effectively is to understand how to construct experiments and models properly. This includes an understanding of what data to collect and what...
by jalbert
Mon May 01, 2017 9:56 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA Real Estate vs CREF Equity Index
Replies: 61
Views: 3116

Re: TIAA Real Estate vs CREF Equity Index

TIAA Real Estate is an investment in a different asset class than bonds or equities. You should be considering all three.

An example portfolio:

60% CREF Stock
15% TIAA Real Estate
25% fixed income
by jalbert
Mon May 01, 2017 1:16 am
Forum: Personal Finance (Not Investing)
Topic: Turned down for umbrella policy
Replies: 23
Views: 3139

Re: Turned down for umbrella policy

I believe the insurance companies are trying to protect themselves from people who had an at-fault accident for which they fear a major lawsuit self-selecting into an umbrella policy to cover a possible pending liability. The policy holder has information about the accident that the insurance compan...
by jalbert
Mon May 01, 2017 1:06 am
Forum: Investing - Theory, News & General
Topic: Schwab Vs. Vanguard?
Replies: 32
Views: 4457

Re: Schwab Vs. Vanguard?

These are just projected costs. Vanguard is more conservative in their projections. Last year, the Vanguard total US stock index fund advertised a projected ER of 5 bp but it came in at 4 bp per the latest shareholder report. Differences in expenses not accounted for in ER are usually greater than 1...
by jalbert
Sat Apr 29, 2017 5:40 pm
Forum: Investing - Help with Personal Investments
Topic: I thought I understood MF expense ratios -
Replies: 17
Views: 1440

Re: I thought I understood MF expense ratios -

And if the fund wants to sell a million shares, it probably won't be able to sell them all at $99.95; it will drive the price down in search of more buyers. It might get only $99M for selling stock which was "worth" $100M. The fund companies will use trading strategies that break up a lar...
by jalbert
Fri Apr 28, 2017 3:29 am
Forum: Investing - Help with Personal Investments
Topic: I thought I understood MF expense ratios -
Replies: 17
Views: 1440

Re: I thought I understood MF expense ratios -

Back in 2004, the SEC issued the following rule: Enhanced Mutual Fund Expense Disclosure in Shareholder Reports. The amendments will require open-end management investment companies (mutual funds) to disclose fund expenses borne by shareholders during the reporting period in their shareholder report...
by jalbert
Thu Apr 27, 2017 5:03 pm
Forum: Investing - Theory, News & General
Topic: Vanguard New Lower ER .04%
Replies: 56
Views: 5619

Re: Vanguard New Lower ER .04%

It is highly unlikely that Vanguard's total US index fund is 33% more costly than Schwab, Fido, or ishares. It is likely that differences in transaction costs, securities lending revenue shared with investors, and present expected value of securities lending risk assumed by investors is greater than...
by jalbert
Thu Apr 27, 2017 12:13 pm
Forum: Investing - Theory, News & General
Topic: Vanguard New Lower ER .04%
Replies: 56
Views: 5619

Re: Vanguard New Lower ER .04%

Vanguard ERs are historical admin cost. Most others are projected future cost. Thus, over the last year, I believe that the Vanguard US index funds had a lower actual ER than the corresponding Fido funds even though the published ER was higher.
by jalbert
Wed Apr 26, 2017 2:18 pm
Forum: Investing - Help with Personal Investments
Topic: One Fund? Really?
Replies: 49
Views: 5491

Re: One Fund? Really?

When the all-in-one funds don't fully fit your needs, it may be simpler to use individual funds. Holding ITOT, IXUS, and AGG (or ITOT, IXUS, VGIT, and TIP) or fidelity equivalents in the 401k might be easier. Using an earlier year target date fund is fine, but then you still have to watch the glide ...
by jalbert
Wed Apr 26, 2017 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: Major health issue - finding new employment with health coverage
Replies: 35
Views: 2531

Re: Major health issue - finding new employment with health coverage

Look at the last section d of the text at the end.
by jalbert
Wed Apr 26, 2017 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: Major health issue - finding new employment with health coverage
Replies: 35
Views: 2531

Re: Major health issue - finding new employment with health coverage

How do I find out if a potential employer offers health coverage that would cover my pre-existing conditions? A preexisting condition exclusion would not be legal under Title 45 › Chapter A › Subchapter B › Part 147 › Section 147.108 of the Affordable Care Act, which remains the law of the land at ...

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