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by nedsaid
Thu May 05, 2016 9:38 pm
Forum: Investing - Theory, News & General
Topic: The keys to improving the odds of active management success
Replies: 12
Views: 692

Re: The keys to improving the odds of active management success

...Nisiprius, there is only one flaw in your analysis. Vanguard has changed the index it uses for Value. So while their active funds pick stocks, their index managers pick indexes!... I imagine they were looking for the lowest-cost index provider, not the best-performing index. Could be, I also thi...
by nedsaid
Thu May 05, 2016 9:34 pm
Forum: Investing - Help with Personal Investments
Topic: 57, widowed, looking for best path to invest windfall
Replies: 20
Views: 2527

Re: 57, widowed, looking for best path to invest windfall

My recommendation is to put the proceeds of the life insurance into a short term Treasury Fund at Vanguard for six months. Or you could take the money to a bank that participates in the CDARS program where the money is managed at one bank but with the amounts over the FDIC Insurance limit actually d...
by nedsaid
Thu May 05, 2016 9:20 pm
Forum: Investing - Theory, News & General
Topic: The keys to improving the odds of active management success
Replies: 12
Views: 692

Re: The keys to improving the odds of active management success

https://static.vgcontent.info/ret/hnw/web/frsh_images/ActiveManagement_5_Performance.gif A pity they didn't have another chart of "percentage of Vanguard active funds whose returns beat the closest-matching Vanguard index fund." That's not a rhetorical question, I'd like to see the actual...
by nedsaid
Thu May 05, 2016 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Wiki article for new investors - Risk tolerance
Replies: 40
Views: 2014

Re: Wiki article for new investors - Risk tolerance

The statement "Risk can only be managed by diversifying your portfolio." is false. It is simply not true, and does not belong in any discussion of financial risk. The writer is not helping anyone by spreading falsehoods. He or she is instead is adding to the confusion of how to invest. By...
by nedsaid
Thu May 05, 2016 8:58 pm
Forum: Investing - Theory, News & General
Topic: The crossover point
Replies: 31
Views: 2226

Re: The crossover point

The point is that life happens and there are no 100% guarantees on anything. I wish that a bell would ring and tell me the correct time to retire. It would also be cool if there was the "right" investment strategy, the "right" withdrawal strategy, and the "right" portf...
by nedsaid
Thu May 05, 2016 8:41 pm
Forum: Investing - Theory, News & General
Topic: The crossover point
Replies: 31
Views: 2226

Re: The crossover point

It is a useful concept. There is also the concept of "the number", that is the amount you have to have in the stash in order to retire. Bobcat2 has talked a lot about thinking in terms of how much inflation adjusted income your portfolio could produce rather than just "the number.&quo...
by nedsaid
Wed May 04, 2016 8:38 pm
Forum: Investing - Theory, News & General
Topic: Factor concentration within funds – does it really matter?
Replies: 11
Views: 532

Re: Factor concentration within funds – does it really matter?

in reality it matters for trading costs certainly and how you can also concentrate risk in the corners where the expected returns are the greatest. The more assets you have the less you can concentrate or your trading costs go way up, and that means you lose exposure to the factors. Of course it al...
by nedsaid
Wed May 04, 2016 8:35 pm
Forum: Investing - Theory, News & General
Topic: Does T.R. Price add value for its investors
Replies: 28
Views: 2528

Re: Does T.R. Price add value for its investors

Third, as Nedsaid is indirectly stating active management isn't bad because it's dumb, it's bad when it's expensive. The market's efficiency protects the "dumb" money from being exploited in the same way it prevents the "smart money" from being the exploiter. So it's expenses th...
by nedsaid
Tue May 03, 2016 9:43 pm
Forum: Investing - Theory, News & General
Topic: I Bond rates for May 1 announced
Replies: 44
Views: 5537

Re: I Bond rates for May 1 announced

Just bought one.
by nedsaid
Tue May 03, 2016 9:36 pm
Forum: Investing - Theory, News & General
Topic: I Bond rates for May 1 announced
Replies: 44
Views: 5537

Re: I Bond rates for May 1 announced

Don't know about anyone else, but I am continuing to buy.
by nedsaid
Tue May 03, 2016 9:25 pm
Forum: Investing - Theory, News & General
Topic: The influence of recency on investor behavior - Part 2
Replies: 4
Views: 539

Re: The influence of recency on investor behavior - Part 2

Recency bias is a big part of what causes the "Nedsaid effect." That is that the investments you sell will outperform the investments you buy to replace them. This happens to me probably at a 2:1 ratio but I think that really it is more like 3:1. It is hard to stick with an investment afte...
by nedsaid
Tue May 03, 2016 9:06 pm
Forum: Investing - Theory, News & General
Topic: Does T.R. Price add value for its investors
Replies: 28
Views: 2528

Re: Does T.R. Price add value for its investors

I certainly get indexing and I have been pouring new monies into index or index-like funds since 1999. In fact at my current work place, I am investing in a two fund portfolio: a World Stock Index and an index-like Bond fund. I am pleased with it. While doing contract work, I used a four-fund portfo...
by nedsaid
Tue May 03, 2016 8:37 pm
Forum: Investing - Help with Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 29
Views: 2307

Re: Critique Fixed Income Strategy - GNMA Dominance

I own two GNMA funds, one at a workplace savings plan and another in a mutual fund IRA account. These have been good funds and have done exactly what I wanted. They sailed right through the 2008-2009 financial crisis. Every security has its unique set of risks, and I suppose that those risks have n...
by nedsaid
Sun May 01, 2016 4:05 pm
Forum: Personal Consumer Issues
Topic: How do Bogleheads TRAVEL?
Replies: 50
Views: 3864

Re: How to Bogleheads TRAVEL?

In my younger years, money was tight so I didn't travel a lot. Fortunately, I live in a beautiful part of the country and there is a lot to see in my geographical area. To me, a Disneyland trip was just the ultimate. I later branched out to Las Vegas which is sort of an adult theme park. My travels ...
by nedsaid
Sun May 01, 2016 3:34 pm
Forum: Investing - Theory, News & General
Topic: Fundamental Indexing Is The Better Way To Value Tilt?
Replies: 19
Views: 1760

Re: Fundamental Indexing Is The Better Way To Value Tilt?

I agree with the comment about front running of the Russell 2000. But I haven't heard similar comments about the Russell 1000. You could front run the Russell 1000, but because you'd be trading the smallest stocks in the Russell 1000, it would have less impact. So front running is less of an explan...
by nedsaid
Sun May 01, 2016 3:10 pm
Forum: Investing - Theory, News & General
Topic: A Vanguard Target fund deconstructed - pros/cons?
Replies: 33
Views: 2655

Re: A Vanguard Target fund deconstructed - pros/cons?

So I was reading some of Mr. Larimore's stickied 3-fund portfolio thread, and it sounded good to me. But figuring out the proper allocation of stocks vs bonds and how much international? Ugh. I also have a dilemma where I need to convince my wife to reshuffle her 401k allocations. She's doing some ...
by nedsaid
Sun May 01, 2016 2:32 pm
Forum: Investing - Theory, News & General
Topic: Wykoff: Four important phases of market trends
Replies: 23
Views: 1260

Re: Wykoff: Four important phases of market trends

Rx for Investing, The deflationary scenario you are painting might be playing out before our eyes. You could well be right and there are some very smart people who agree with you. Indeed, I have wondered about this very thing in many of my posts. I certainly am not a bull on China and if my thesis i...
by nedsaid
Sun May 01, 2016 2:19 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

nedsaid, Thank you for your introspective message. I certainly do not think you have a problem, I was just challenging some of your assertions. Yes, I have in the past been accused of making Mr. Spock look like a dilettante, but my style is always to ask for the evidence. Particularly with investin...
by nedsaid
Sun May 01, 2016 1:47 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Nedsaid, if you want to cast your financial transactions as characters, then one character you can cast is your cash flow income. That income can be set to follow any schedule you want it to be by withdrawing any amount from your portfolio at any time. Thus the "reliability" of such withd...
by nedsaid
Sun May 01, 2016 1:34 pm
Forum: Investing - Help with Personal Investments
Topic: Hitting an investment crossroads
Replies: 21
Views: 2721

Re: Hitting an investment crossroads

Why not spend some money and have some fun? Maybe travel or buy a few toys. My gosh, if you are maxing out your tax deferred accounts maybe you need to live it up a little?
by nedsaid
Sun May 01, 2016 1:29 pm
Forum: Personal Consumer Issues
Topic: How do Bogleheads TRAVEL?
Replies: 50
Views: 3864

Re: How to Bogleheads TRAVEL?

Bogleheads: In this noisy world of headline news, commentators, brokers, experts, advisors, expert advisors, pamphlets, editorials, hedge funds, futures, market neutral funds, shorting, annuities, managers of the year, and the like, I've found incredible solace in the well-informed, and sage princi...
by nedsaid
Sun May 01, 2016 1:17 pm
Forum: Investing - Theory, News & General
Topic: Fundamental Indexing Is The Better Way To Value Tilt?
Replies: 19
Views: 1760

Re: Fundamental Indexing Is The Better Way To Value Tilt?

Garland, I smiled all the way through your post as it neatly summarizes a lot of the things I have observed over the years. If you watch the markets, you will see various fads come and go. There have been so many of them that I don't remember them all. There is always a new formula or a secret sauce...
by nedsaid
Sun May 01, 2016 1:03 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Leerar, I think part of my problem is that I am an Accountant and not an Engineer. Though I work with numbers and think them very important, they just don't tell the whole story. Investing is more about human behavior than about crunching numbers. Because of the involvement of human nature, human be...
by nedsaid
Sun May 01, 2016 12:30 pm
Forum: Investing - Theory, News & General
Topic: Wykoff: Four important phases of market trends
Replies: 23
Views: 1260

Re: Wykoff: Four important phases of market trends

FYI... The ave. duration of Vanguard's long-term treasury is 17 years. The modified duration of the S & P 500 at current valuation levels is 47 years. You are working with very inexact numbers. First of all, there is something to the concept of duration for stocks. But both the concept and the ...
by nedsaid
Sun May 01, 2016 12:13 pm
Forum: Investing - Theory, News & General
Topic: "Save $52,000 on Financial Advice" Forbes
Replies: 98
Views: 9817

Re: "Save $52,000 on Financial Advice" Forbes

Most all athletes have their own personal trainer. Look how many Tiger Woods has had. Reading sports related books on , say, golf are helpful but actually teeing up and playing the game without some instruction from a Pro would be so absurd and humiliating , it would probably be the last time one a...
by nedsaid
Sun May 01, 2016 11:57 am
Forum: Investing - Theory, News & General
Topic: Regret of selling winning stocks early
Replies: 35
Views: 3372

Re: Regret of selling winning stocks early

I used to work at a public company and got some stock compensation. Since it was a large part of my portfolio back then, when I received the shares I decided to diversify and sold most of them to buy index funds. However the company's share has since done very well compared to the overall market an...
by nedsaid
Sun May 01, 2016 11:40 am
Forum: Investing - Theory, News & General
Topic: Fundamental Indexing Is The Better Way To Value Tilt?
Replies: 19
Views: 1760

Re: Fundamental Indexing Is The Better Way To Value Tilt?

I do slightly Small Value tilt my portfolio and the main instrument I use to achieve that is the Vanguard Small Value Index ETF. After congratulating myself upon my brilliance, to my dismay I started reading that the Vanguard product had too many mid-caps and didn't have good enough value characteri...
by nedsaid
Sun May 01, 2016 11:33 am
Forum: Investing - Theory, News & General
Topic: Why Are Real Interest Rates So Low Worldwide?
Replies: 86
Views: 7712

Re: Why Are Real Interest Rates So Low Worldwide?

LOL at the BOE, it is the BOE, FED, ECB, and Japan central bank's fault the rates are so low. I love it when these guys write these papers because the answer is behind the pen. Anytime someone is "setting" a rate or "fixing" LIBOR, that is not the market rate. That is a central ...
by nedsaid
Sun May 01, 2016 11:26 am
Forum: Investing - Theory, News & General
Topic: Sound advice from Warren Buffett
Replies: 16
Views: 2960

Re: Sound advice from Warren Buffett

Another link, to a video snip it of Warren giving the speech directly: http://finance.yahoo.com/video/warren-buffett-slams-hedge-fund-204127686.html " ...For the population as a whole, American business has done wonderfully. And the net result of hiring professional management, is a huge minus...
by nedsaid
Sun May 01, 2016 11:22 am
Forum: Investing - Theory, News & General
Topic: Jonathan Clements: higher % stocks -> higher % of stocks international
Replies: 14
Views: 1524

Re: Jonathan Clements: higher % stocks -> higher % of stocks international

If you go with the volatility reduction approach, the challenge is what correlation coefficient to assume going forward? The correlation of US stocks with foreign used to be low, but has been rising. It is now high enough that there is not much volatility reduction to be had from including internat...
by nedsaid
Sun May 01, 2016 11:11 am
Forum: Investing - Theory, News & General
Topic: Wykoff: Four important phases of market trends
Replies: 23
Views: 1260

Re: Wykoff: Four important phases of market trends

> one thing that everyone can probably agree on is that markets are cyclical and that securities do have recurring chart patterns Lost me right there. Humans find patterns in data- it's what they do. The hard part is distinguishing real phenomena from the patterns that appear in random data. I woul...
by nedsaid
Sun May 01, 2016 10:55 am
Forum: Investing - Help with Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 29
Views: 2307

Re: Critique Fixed Income Strategy - GNMA Dominance

I own two GNMA funds, one at a workplace savings plan and another in a mutual fund IRA account. These have been good funds and have done exactly what I wanted. They sailed right through the 2008-2009 financial crisis. Every security has its unique set of risks, and I suppose that those risks have no...
by nedsaid
Sat Apr 30, 2016 11:43 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

So, I looked, and found this: http://www.multpl.com/s-p-500-dividend-yield/ Dividend returns (obviously) spike in the immediate happenstance of a stock price crash. I don't see any evidence they are durable (remain high) during the resulting stock price recovery. L. During a stock (and often econom...
by nedsaid
Sat Apr 30, 2016 11:35 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Really? Do you have a graph that shows the ratio of (S&P dividend yield) / (S&P total yield) for, say, 1980 - 2016? Or, any data to say that dividends are more reliable than accumulated capital gains? Why is this so hard to understand? If a company pays a dividend, its stock price drops by ...
by nedsaid
Sat Apr 30, 2016 9:26 am
Forum: Investing - Help with Personal Investments
Topic: Ameriprise Rava 5 Annuity
Replies: 7
Views: 402

Re: Ameriprise Rava 5 Annuity

Have you benchmarked your returns? How do you know that your account has done well? Let's say that your portfolio is 40% US Stocks, 20% International Stocks, and 60% bonds. A short hand way of checking your returns is using a blended index and weighting the returns to come up with a blended return. ...
by nedsaid
Sat Apr 30, 2016 8:45 am
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Fascinating read, and another "settled topic" relates, that being that the market is efficient and individuals cannot reliably pick stocks that will appreciate. The comments here about dividend strategies, as with comments about market efficiency, are macro and relate to the total market....
by nedsaid
Sat Apr 30, 2016 8:39 am
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

I feel that currently these dividend stocks are popular because of the low interest rates in bonds. Perhaps some money that would have gone into bonds are moved into dividend shares (which gives better yield right now). So you've got additional thing going: share pries going up. But once interest r...
by nedsaid
Sat Apr 30, 2016 1:13 am
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Really? Do you have a graph that shows the ratio of (S&P dividend yield) / (S&P total yield) for, say, 1980 - 2016? Or, any data to say that dividends are more reliable than accumulated capital gains? Why is this so hard to understand? If a company pays a dividend, its stock price drops by ...
by nedsaid
Tue Apr 26, 2016 9:28 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4915

Re: Allan Roth on why bond funds are better than individual bonds

Nedsaid Some additional thoughts to consider First bond funds to boost yield buy bonds with calls, we basically avoid or minimize that by avoiding corporates and also requiring on munis that you have at least 80% call protection. If you limit your purchases to AAA and AA and GOs and essential servi...
by nedsaid
Sun Apr 24, 2016 10:02 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Lynette, another great suggestion made by others here is to use FDIC Insured Certificates of Deposit as a proxy for treasuries. A bit higher yield with no additional risk. Wish I had thought of it myself.
by nedsaid
Sun Apr 24, 2016 9:59 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4915

Re: Allan Roth on why bond funds are better than individual bonds

longinvest I don't know the Canadian market but there is if an individual had build a portfolio of individual bonds with the same maturity/duration then the returns would have been the same without the expense. What you are missing is that you can get a higher return than the bonds were yielding at...
by nedsaid
Sun Apr 24, 2016 9:56 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4915

Re: Alan Roth on why bond funds are better than individual bonds

Bogleheads, Bonds are so much more complex than we sometimes give credit to. Bonds do not trade as transparent as stocks on the exchanges. Investors may not be aware of total costs involved such as bid/ask spreads, commission, etc. In addition, how can investors expect to fully understand a bond of...
by nedsaid
Sun Apr 24, 2016 9:42 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

It just amazes me that people who are interested in income generated by a portfolio "just don't get it", are somehow rubes, or who "just aren't with it." Gosh, if John Bogle talks about income, both dividend yield and interest yield, it must be important to somebody out there. I...
by nedsaid
Sun Apr 24, 2016 6:22 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Another aspect of this is that an investment portfolio has two elements of return: capital gains and income. The reason that older folks are interested in income over capital gains is that income is a more reliable source of return. Yes, interest rates can fall and dividends can be cut but I think ...
by nedsaid
Sun Apr 24, 2016 6:13 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

As Taylor Larimore would say, when experts disagree, it usually doesn't matter. Therefore, pick the total return and/or the dividend strategy -- whatever suits your preference. I chose a bit of both. For instance, REITs currently have very high dividends (> 4%) but they are taxed as ordinary income...
by nedsaid
Sun Apr 24, 2016 6:07 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Another aspect of this is that an investment portfolio has two elements of return: capital gains and income. The reason that older folks are interested in income over capital gains is that income is a more reliable source of return. Yes, interest rates can fall and dividends can be cut but I think y...
by nedsaid
Sun Apr 24, 2016 5:54 pm
Forum: Investing - Theory, News & General
Topic: dividend stocks
Replies: 136
Views: 7256

Re: dividend stocks

Seriously Larry, I am not just trolling the dividend threads just to get a rise out of you. I am not that kind of person, posting just to hit hot buttons. Regardless of my actual intent, I have hit on a hot button. Hopefully the exchange will yield information that is helpful to the readers out ther...
by nedsaid
Sun Apr 24, 2016 5:29 pm
Forum: Investing - Theory, News & General
Topic: Concentrated Factor Indexing
Replies: 9
Views: 789

Re: Concentrated Factor Indexing

These are both good articles. The problem with concentrated factor investing is that you need enough scale to get the fees down enough to be worthwhile investments for the individual investor. With scale comes asset bloat which tends to push down returns. Factor investing is in the middle of the con...
by nedsaid
Sun Apr 24, 2016 5:11 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth on why bond funds are better than individual bonds
Replies: 63
Views: 4915

Re: Alan Roth on why bond funds are better than individual bonds

Another problem with individual bonds is that you wind up being your own credit analyst. There seems to be an entropy with bonds, particularly those bought from full-service brokers. The credit ratings of such corporate and municipal bonds seem to trend towards lower credit ratings and not higher cr...
by nedsaid
Sun Apr 24, 2016 4:58 pm
Forum: Investing - Help with Personal Investments
Topic: Sell ibonds? Or hold?
Replies: 15
Views: 1585

Re: Sell ibonds? Or hold?

A few years ago I bought 5k in ibonds thinking it was a good move for when I have kids and they are ready for college. I later learned about the AGI limit for cashing ibonds for educational purposes. I make over the AGI and intend to keep it that way for some time -- I'm 34 now. Does it still make ...

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