Search found 2020 matches

by jalbert
Tue Aug 15, 2017 12:56 pm
Forum: Investing - Theory, News & General
Topic: When stocks drop, which bond funds usually do best and worst?
Replies: 25
Views: 2306

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

All in all, Intermediate Treasuries provided a good combination of stability and return through this market crash. The graph corroborates the view some people have that term risk is not compensated in long-term bonds. Institutional investors who buy long bonds (e.g. insurance companies and pension ...
by jalbert
Mon Aug 14, 2017 11:12 pm
Forum: Investing - Theory, News & General
Topic: When stocks drop, which bond funds usually do best and worst?
Replies: 25
Views: 2306

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

tc101 wrote:
Mon Aug 14, 2017 1:53 pm
When stocks drop, which bond funds usually do best and worst?
Depends on why stocks drop-- if because of a sharp rise in inflation, short-term TIPs are likely to fare best. But in the disinflation of 2008/2009, long-term treasuries fared the best.
by jalbert
Sun Aug 13, 2017 5:57 pm
Forum: Investing - Theory, News & General
Topic: Active investing and the Efficient Market Hypothesis
Replies: 15
Views: 1519

Re: Active investing and the Efficient Market Hypothesis

But I don't believe in the strong version of the EMH (weak makes more sense to me) anyway.
If the strong EMH were true, we would not need insider trading laws. This seems highly unlikely.
by jalbert
Sun Aug 13, 2017 2:34 pm
Forum: Investing - Help with Personal Investments
Topic: Need help in selecting Bond index equivalent at workplace 401K option
Replies: 9
Views: 516

Re: Need help in selecting Bond index equivalent at workplace 401K option

If the risk is not an unfunded liability and the organization(s) underwriting the risk have strong credit ratings, you may want to consider increasing your allocation beyond 40%.
by jalbert
Sun Aug 13, 2017 2:03 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's new security key option
Replies: 54
Views: 10524

Re: Vanguard's new security key option

This seems a little harsh. Have you considered that Vanguard may have decided to keep the SMS backup method for a little while, until a good number of their customers got used to the Yubikey process and until corresponding kinks have been sorted out? It should not be made available to all customers...
by jalbert
Sun Aug 13, 2017 3:51 am
Forum: Investing - Help with Personal Investments
Topic: Need help in selecting Bond index equivalent at workplace 401K option
Replies: 9
Views: 516

Re: Need help in selecting Bond index equivalent at workplace 401K option

The 3% option doesn't have any fees. The annual rate appears to be set every May, based on March-March yearly U.S CPI Index. I just checked, and the rate has been set at 5.38% for the next year. So the maximum return is always 3% above the US CPI, thus 5.38% for the next 12 months. There is no with...
by jalbert
Sat Aug 12, 2017 3:35 pm
Forum: Personal Finance (Not Investing)
Topic: "Upper Middle" Class - ditch WLI or ride it?
Replies: 32
Views: 5397

Re: "Upper Middle" Class - ditch WLI or ride it?

The caveat for the sentence above appearing in bold is that not everyone can "afford" to max out the full $18K 401K contribution prior to age 50, or $24K after age 50 based on their salary level, household income, and number of dependents. We certainly were not able to in our 20's. That doesn't mea...
by jalbert
Sat Aug 12, 2017 3:15 pm
Forum: Investing - Help with Personal Investments
Topic: Need help in selecting Bond index equivalent at workplace 401K option
Replies: 9
Views: 516

Re: Need help in selecting Bond index equivalent at workplace 401K option

- a real 3% option. The description says it provides investors a 3% return above the Consumer Price Index (CPI). For the past 12 months this option returned about 5% which makes sense since US CPI is about 2%. - Barclays Capital Government/Credit Index. year. -JP Morgan Emerging Market Bond Index P...
by jalbert
Sat Aug 12, 2017 12:16 pm
Forum: Investing - Help with Personal Investments
Topic: Stable Value Funds vs Bond Funds
Replies: 33
Views: 1970

Re: Stable Value Funds vs Bond Funds

I plan to retire next year, and am pretty sure I am going to allocate my funds 60% stock index funds and 40% bond index funds. My wife feels that we should put the 40% in Stable Value Funds rather than bond funds, since she feels bond funds cannot go any higher, as the interest rate seems to be cre...
by jalbert
Fri Aug 11, 2017 9:29 pm
Forum: Personal Finance (Not Investing)
Topic: "Upper Middle" Class - ditch WLI or ride it?
Replies: 32
Views: 5397

Re: "Upper Middle" Class - ditch WLI or ride it?

what are the advantages of maxing something i can't touch till 59-1/2 without penalty vs other vehicles? just getting it in market in a tax advantaged status? You only get so much total available tax-advantaged space, and if you don't take advantage of all of it in a given year, the part you ignore...
by jalbert
Fri Aug 11, 2017 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: "Upper Middle" Class - ditch WLI or ride it?
Replies: 32
Views: 5397

Re: "Upper Middle" Class - ditch WLI or ride it?

If you direct the funds you are currently contributing to after-tax mutual fund and WLI to your 401K instead, you will lower your taxes and have additional disposable income. Max out your 401K before you contribute to an after-tax investment. Agree with others that 401K investments should be simplif...
by jalbert
Fri Aug 11, 2017 1:56 am
Forum: Investing - Help with Personal Investments
Topic: What Short-term investment option?
Replies: 12
Views: 897

Re: What Short-term investment option?

I recommended a short-term investment-grade bond fund, but I am wondering if there is a better alternative? It will be in a taxable account naturally. The amount that is earmarked for a real estate purchase needs to be in a cash vehicle like a money market fund or online savings account so that the...
by jalbert
Fri Aug 11, 2017 12:48 am
Forum: Investing - Theory, News & General
Topic: "5 Steps to Take in Jittery Markets"
Replies: 20
Views: 2557

Re: "5 Steps to Take in Jittery Markets"

Unfortunately, Ms. Benz saying As always, it's difficult (if not impossible) to say what stocks will do in the near term. and then contradicting herself with Opportunistic investors, meanwhile, may want to set aside some liquid assets in case they'd like to deploy cash at a later date, if and when s...
by jalbert
Fri Aug 11, 2017 12:17 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversification Benefits of Time Series Momentum
Replies: 9
Views: 1013

Re: Larry Swedroe: Diversification Benefits of Time Series Momentum

Interesting article, but I have the following observation. The collection of TS MOM investment domains includes significantly more markets that are commodities and currencies than equities and bonds. The methodology does not have a control group of just holding these assets long with a buy and hold ...
by jalbert
Thu Aug 10, 2017 6:22 pm
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 4884

Re: Should TBM Be Your Only Bond Fund?

I guess it comes down to which risk do you expect to predominate in the next few years, credit risk in an improving economy or interest rate risk with the Fed's forecasted increases in the fed funds rate? Trying to predict or guess what will happen in the future has never been shown to be an effect...
by jalbert
Thu Aug 10, 2017 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: TIAA-CREF allocation mix? Diversify or lowest ER?
Replies: 16
Views: 785

Re: TIAA-CREF allocation mix? Diversify or lowest ER?

Not likely to be much difference either way, but think you would be better off with the simplicity of choosing between:

Option 1:
TISPX 60%
TIIEX 30%
CREF Bond 10%

Option 2:
CREF Stock 90%
CREF Bond 10%

instead of getting bond exposure through TR Income.
by jalbert
Thu Aug 10, 2017 1:34 am
Forum: Investing - Theory, News & General
Topic: Should TBM Be Your Only Bond Fund?
Replies: 33
Views: 4884

Re: Should TBM Be Your Only Bond Fund?

Credit risk of HY is much more substantial than term risk of treasuries. During an economic downturn, HY credit spreads can widen so much that a junk bond fund can exhibit stock like losses, and they tend to show up just when you are counting on bonds to offset losses in equities. A drop of 30% woul...
by jalbert
Wed Aug 09, 2017 11:37 pm
Forum: Investing - Theory, News & General
Topic: "5 Steps to Take in Jittery Markets"
Replies: 20
Views: 2557

Re: "5 Steps to Take in Jittery Markets"

No, I don't have a crystal ball, but it's a safe bet that value-minded buyers will have better buying opportunities at some point in the future than they do today.
Safe bet, really? Quite possible, yes, but always a speculative bet.
by jalbert
Wed Aug 09, 2017 11:24 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's new security key option
Replies: 54
Views: 10524

Re: Vanguard's new security key option

Is there a link to an explanation of why Yubikey is preferable to the current 2-factor method of receiving a code? Here's an actual example of someone breaking someone's 2-factor SMS via social engineering and compromising the victim's Paypal account: https://www.theregister.co.uk/2017/07/10/att_fa...
by jalbert
Wed Aug 09, 2017 3:21 pm
Forum: Investing - Help with Personal Investments
Topic: Seems like both Stocks and bonds have equal risk now...
Replies: 26
Views: 3135

Re: Seems like both Stocks and bonds have equal risk now...

It seems like bonds are becoming more and more risky as the fed plans to dump their share and inflation and interest rates are bound to increase. Likewise this situation should negatively affect stocks as well. Bonds aren't becoming more and more risky. They have term risk of rising interest rates....
by jalbert
Mon Aug 07, 2017 7:11 pm
Forum: Investing - Help with Personal Investments
Topic: How or if to use TIAA annuity
Replies: 32
Views: 1826

Re: How or if to use TIAA annuity

I highly recommend talking to TIAA-CREF directly to learn about the different nuances associated with all the different versions of this product available to you.
by jalbert
Mon Aug 07, 2017 7:00 pm
Forum: Investing - Help with Personal Investments
Topic: Physician & Real Estate investor seeks advice
Replies: 49
Views: 4169

Re: Physician & Real Estate investor seeks advice

I have never believed in 401ks/IRAs, as I have always liked to have control over my investments. This is a significant error. Deferring taxes on distributions is equivalent to getting a higher return on investments that are otherwise identical except that you have to pay taxes on the distributions....
by jalbert
Mon Aug 07, 2017 2:14 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Puts Rivals on Notice: Fee Wars Will Only Heat Up
Replies: 62
Views: 5817

Re: Vanguard Puts Rivals on Notice: Fee Wars Will Only Heat Up

8 months ago Vanguard's developed market index ETF VEA had a published ER of .09% while iShares competing product IEFA had a published ER of .08%. In the last semi-annual reports, IEFA came in at .08% during the time iShares was projecting .08%, but VEA came in at .07% during the time Vanguard was p...
by jalbert
Mon Aug 07, 2017 1:57 pm
Forum: Investing - Help with Personal Investments
Topic: How or if to use TIAA annuity
Replies: 32
Views: 1826

Re: How or if to use TIAA annuity

4% is a great return on invested principal but not for an annuity, right? It is an annuity contract to provide a fixed income investment paying 4% currently. Withdrawals can later be taken as an income annuity if desired (and at a different prevailing rate) but it can also be taken as a cash withdr...
by jalbert
Mon Aug 07, 2017 1:49 pm
Forum: Investing - Help with Personal Investments
Topic: How or if to use TIAA annuity
Replies: 32
Views: 1826

Re: How or if to use TIAA annuity

TIAA Traditional is an excellent fixed income option. You give up liquidity in return for principal stability. With a 4% crediting rate, it is likely to beat the total bond market index over the next 6 years. The TIAA portfolio that underpins TIAA's ability to make good on its obligations has a lowe...
by jalbert
Sun Aug 06, 2017 1:34 am
Forum: Investing - Theory, News & General
Topic: Vanguard Puts Rivals on Notice: Fee Wars Will Only Heat Up
Replies: 62
Views: 5817

Re: "Vanguard Puts Rival Firms On Notice: Fee Wars Will Only Heat Up"

Does this mean that Vanguard will soon be able to match the lower expenses that are offered by Fidelity, Schwab, and Blackrock? Also, Schwab gives low expenses to everyone, not just those who invest 10 grand or 50 grand in a single fund. Who will be the first to post a 0% ER? Hard to compare them b...
by jalbert
Sat Aug 05, 2017 12:23 am
Forum: Investing - Help with Personal Investments
Topic: Please review my portfolio, ~$513k, I can make changes now. Complete beginner!
Replies: 23
Views: 3807

Re: Please review my portfolio, ~$513k, I can make changes now. Complete beginner!

Not a disaster or urgent thing to fix, but I notice a couple of issues. 1. VOE and VOO have significant overlap despite the names. CRSP slices things differently from S&P. If in a tax advantaged account, you might consider just holding VV and VBR, which pair with no gap or overlap on size. 2. H...
by jalbert
Fri Aug 04, 2017 8:28 pm
Forum: Investing - Help with Personal Investments
Topic: Please review my portfolio, ~$513k, I can make changes now. Complete beginner!
Replies: 23
Views: 3807

Re: Please review my portfolio, ~$513k, I can make changes now. Complete beginner!

Not a disaster or urgent thing to fix, but I notice a couple of issues. 1. VOE and VOO have significant overlap despite the names. CRSP slices things differently from S&P. If in a tax advantaged account, you might consider just holding VV and VBR, which pair with no gap or overlap on size. 2. Ho...
by jalbert
Fri Aug 04, 2017 6:56 pm
Forum: Investing - Theory, News & General
Topic: Greenspan: Look Out When Bonds Pop
Replies: 58
Views: 8120

Re: Greenspan: Look Out When Bonds Pop

What does Alan Greenspan think will cause 1970's style stagflation?

Maybe concern about a trade war with tariffs that stifle growth and raise prices?
by jalbert
Fri Aug 04, 2017 6:37 pm
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 29
Views: 2960

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

Does anyone pair VINEX with VFSVX? They seem like they might complement each other well. Vfsvx is a global non-US float adjusted cap weighted small-cap index fund. Not sure why you need to hold vinex with it. Doing so would increase index tracking error and I have seen no evidence that leads me to ...
by jalbert
Fri Aug 04, 2017 6:17 pm
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 29
Views: 2960

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

I'm interested in how excess return comes about but only as a view into its possible persistence. If it is from a growth tilt and it works then fine. So do we have any insight into changes in trend? I believe the growth tilt is part of the design of the fund, not the result of an active management ...
by jalbert
Fri Aug 04, 2017 1:56 am
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 29
Views: 2960

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

One other point is that the fund vinex has a growth tilt. I'm skeptical that its roughly 40 bp/yr overperformance relative to a DM small cap blend index over the last 9 years is from active management. I suspect it is from growth beating value for DM non-US stocks during that time.
by jalbert
Thu Aug 03, 2017 5:06 pm
Forum: Investing - Help with Personal Investments
Topic: Using VMVFX Vanguard [Global] Minimum Volatility fund for international.
Replies: 14
Views: 1066

Re: Using VMVFX Vanguard [Global] Minimum Volatility fund for international.

As long as you stay the course and don't punt and go to a traditional int'l fund if global min vol underperforms, it is a reasonable idea. Also don't do it to chase returns. Minimum volatility funds tend to have interest rate term exposure so that falling/low interest rates have been a tailwind for ...
by jalbert
Thu Aug 03, 2017 2:39 am
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 29
Views: 2960

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

I generally look at the VG portfolio tab to check Vinex EM exposure. As I recall it has been similar for some years (on vacation now so cannot check my data). Your back test link shows it tracks SCZ closely. Either way, it has not had enough EM to track VSFVX closely, but it has had a small enough ...
by jalbert
Thu Aug 03, 2017 2:25 am
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 29
Views: 2960

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

Well, that is a 'non-US DM small-cap index'. And the official benchmark for this Vanguard fund. What am I missing?

Not sure, maybe that your backtests compared to VSFVX and VGTSX which I think had different asset class compositions over most of the backtested period.
by jalbert
Wed Aug 02, 2017 8:09 pm
Forum: Investing - Theory, News & General
Topic: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?
Replies: 29
Views: 2960

Re: Int'l Small-Caps: Active VINEX vs passive VSS/VFSVX?

Corrections added below Re: EM exposure The active managers of VINEX seem to have delivered net value over ER, but I don't think it is nearly as much as the above backtests would lead one to believe. I think VINEX has in the past invested in non-US developed markets small cap stocks. VSS holds EM st...
by jalbert
Wed Aug 02, 2017 7:52 pm
Forum: Investing - Help with Personal Investments
Topic: Quick Question regarding tilting until retirement
Replies: 22
Views: 1509

Re: Quick Question regarding tilting until retirement

If your equities are: 75% total stock market 25% Small Cap Value You start out with an 80/20 AA of which means you'd have: 60% total Stock 20% SCV 20% Bonds Let's say your retirement AA is 50/50 Should you be holding then: 37.5% total stock 12.5% SCV 50% bonds Or should your end goal be 50% total s...
by jalbert
Wed Aug 02, 2017 3:43 am
Forum: Investing - Theory, News & General
Topic: Are value stocks safer or more risky?
Replies: 49
Views: 3682

Re: Are value stocks safer or more risky?

According to Buffett, the higher the margin between the price of undervalued stock and its value,

We don't ever know the true value of a stock, (with the exception of when it goes to zero). If we did, the ERP for that stock would disappear.
by jalbert
Tue Aug 01, 2017 3:38 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets, not Emerging Market Indexes
Replies: 21
Views: 1628

Re: Emerging Markets, not Emerging Market Indexes

But, in fact, the companies selling the most to emerging markets today are the emerging market companies themselves (in red above)...

Is 16% of N. American corporate revenue less than 82% of EM corporate revenue?
by jalbert
Mon Jul 31, 2017 7:21 pm
Forum: Investing - Theory, News & General
Topic: Risk Parity ("The Problem with the Traditional Approach to Asset Allocation") - Question
Replies: 3
Views: 493

Re: Risk Parity ("The Problem with the Traditional Approach to Asset Allocation") - Question

They are trying to separate economic growth driven return or risk from inflation return or risk. If, hypothetically, commodity returns incorporate both the effect of growth and inflation, then subtracting inflation-linked bond returns from commodity returns would just leave the return driven by econ...
by jalbert
Mon Jul 31, 2017 6:23 pm
Forum: Investing - Theory, News & General
Topic: "Why Don’t Vanguard’s Target Retirement and LifeStrategy Funds Own Admiral Shares?"
Replies: 37
Views: 4325

Re: "Why Don’t Vanguard’s Target Retirement and LifeStrategy Funds Own Admiral Shares?"

To extend, why does the SEC bar Vanguard but lets other companies run their FoFs using institutional shares and a multi-class structure. Not sure. But do investors in the admiral shares stock and bond funds want to bear the transaction cost of rebalancing operations by the Target or LS funds? This ...
by jalbert
Mon Jul 31, 2017 6:16 pm
Forum: Investing - Theory, News & General
Topic: "Why Don’t Vanguard’s Target Retirement and LifeStrategy Funds Own Admiral Shares?"
Replies: 37
Views: 4325

Re: "Why Don’t Vanguard’s Target Retirement and LifeStrategy Funds Own Admiral Shares?"

So why is Vanguard able to have two share classes (Investor and Admiral) for Vanguard Balanced Index Fund? Is it because it is not technically a fund of funds, but rather the fund itself attempts to mirror two indices? Correct. The balanced index fund is not a fund of funds. It holds stocks and bon...
by jalbert
Mon Jul 31, 2017 12:53 pm
Forum: Investing - Theory, News & General
Topic: "Why Don’t Vanguard’s Target Retirement and LifeStrategy Funds Own Admiral Shares?"
Replies: 37
Views: 4325

Re: "Why Don’t Vanguard’s Target Retirement and LifeStrategy Funds Own Admiral Shares?"

it isn't clear why, on the one hand Vanguard "must be able to offer a differentiated cost advantage between share classes" but on the other hand "it’s not possible ... to offer such an advantage." Can someone parse this? Because of SEC rules they can't offer two share classes wi...
by jalbert
Mon Jul 31, 2017 12:19 pm
Forum: Personal Finance (Not Investing)
Topic: 1031 Exchange
Replies: 20
Views: 1158

Re: 1031 Exchange

There are two separate issues. 1. As noted above, you won't exclude all of the capital gains from income. 2. A 1031 exchange does not defer capital gains if the intent of acquiring the new property is to live in the property in the future. There is no stipulation for how long the new property must b...
by jalbert
Mon Jul 31, 2017 2:04 am
Forum: Investing - Theory, News & General
Topic: Factor investing most effective in micro cap
Replies: 8
Views: 1022

Re: Factor investing most effective in micro cap

On the other hand, you will get an illiquidity premium. You may get an illiquidity premium. What you get is a liquidity risk premium as compensation for taking liquidity risk. If that liquidity risk does not show up or the stock becomes more liquid while you hold it, then it will deliver an illiqui...
by jalbert
Fri Jul 28, 2017 6:15 pm
Forum: Investing - Help with Personal Investments
Topic: Stable value fund vs Vanguard Total Bond Market Index
Replies: 27
Views: 3289

Re: Stable value fund vs Vanguard Total Bond Market Index

What other info about the underlying portfolio are they keeping secret?
by jalbert
Tue Jul 25, 2017 2:29 pm
Forum: Investing - Theory, News & General
Topic: Murphy's Law Of Retirement
Replies: 56
Views: 8790

Re: Murphy's Law Of Retirement

When working, regular contributions to a portfolio buffer the risk of a bear market to a significant extent because contributions during the best bear market buy into the market at lower valuations, and there is a high likelihood of being able to continue working until the market recovers or beyond....
by jalbert
Mon Jul 24, 2017 11:01 pm
Forum: Investing - Theory, News & General
Topic: Ben Carlson on Commodities
Replies: 12
Views: 1117

Re: Ben Carlson on Commodities

Trying to truly understand the impact of contango or backwardation on an investment in commodities will make most folks' heads spin. (For instance, they are stochastic, not deterministic concepts). Applying the maxim of not investing in something one doesn't understand will keep a 5% stake in commod...
by jalbert
Mon Jul 24, 2017 8:30 pm
Forum: Investing - Theory, News & General
Topic: John Bogle Has Been Right About Investing In International Stocks
Replies: 505
Views: 31214

Re: John Bogle Has Been Right About Investing In International Stocks

Bogleheads: In his first book, Bogle on Mutual Funds, published in 1993, Mr. Bogle wrote: "Your exposure to mutual funds investing in foreign stocks should not exceed 20% of your equity portfolio." A recent NewsMax article stated: "The MSCI USA Index has returned 9.5 percent annually...
by jalbert
Mon Jul 24, 2017 3:19 pm
Forum: Investing - Theory, News & General
Topic: If markets efficient in local currency why would unhedged foreign equity holding provide adequate return
Replies: 15
Views: 1009

Re: If markets efficient in local currency why would unhedged foreign equity holding provide adequate return

It is not a market efficiency question. You can separate the investment return and currency exposure. Over the long run, expected currency return is zero and low variance. Over short periods, currency exposure is fairly volatile.