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by nisiprius
Mon Jan 23, 2017 12:26 pm
Forum: Investing - Theory, News & General
Topic: Bogle: Smart Beta does not deliver Better Returns
Replies: 9
Views: 597

Re: Bogle: Smart Beta does not deliver Better Returns

It's a little worse than that in my opinion, because of a kind of memory survivorship effect. When "fundamental" indexing first starting getting a lot of press, there were always THREE that were mentioned: WisdomTree, RAFI, and Fidelity Enhanced Index Funds, such as Fidelity Large-Cap Core...
by nisiprius
Mon Jan 23, 2017 12:20 pm
Forum: Investing - Theory, News & General
Topic: Bogle: Smart Beta does not deliver Better Returns
Replies: 9
Views: 597

Re: Bogle: Smart Beta does not deliver Better Returns

PortfolioVisualizer, here I come... PortfolioVisualizer uses whole years so if John C. Bogle was using a source of data that includes fractional years the exact time spans and thus the numbers could be different. Source https://s29.postimg.org/ekye6s347/Captura_de_pantalla_2017_01_23_a_las_12_19_38_...
by nisiprius
Mon Jan 23, 2017 11:54 am
Forum: Investing - Theory, News & General
Topic: Bogle: Smart Beta does not deliver Better Returns
Replies: 9
Views: 597

Re: Bogle: Smart Beta does not deliver Better Returns

The headline isn't very good. Bogle makes it perfectly clear that he is talking about risk-adjusted returns, i.e. Sharpe ratios : They have not done so. It's on the record. The RAFI 1000 has done a little bit better than the S&P but at a higher risk and therefore, as it turns out in the data, ha...
by nisiprius
Mon Jan 23, 2017 11:49 am
Forum: Investing - Theory, News & General
Topic: Hypo: What would you do if you were SURE of impending deline in markets
Replies: 51
Views: 2627

Re: Hypo: What would you do if you were SURE of impending deline in markets

...One of the best ways to achieve this is using options. With their expiration dates, they're by definition market timing. Pick the time frame and the strike price you predict this will occur, say 3 months out and 10% or 20% drop and if you're 99% sure, you should buy lots of puts (you could lose ...
by nisiprius
Mon Jan 23, 2017 9:22 am
Forum: Investing - Theory, News & General
Topic: Fed Rate [may go] to 3% - [investing consequences?]
Replies: 84
Views: 8125

Re: Fed Rate [may go] to 3% - [investing consequences?]

Somewhat tangentially, but it's a complicated idea that I don't think I've seen explained... Phineas T. Whoopee came close in his remark about yields and prices being mathematically related. What exactly do we mean by "the prevailing interest rate?" We have a universe of individual bonds, ...
by nisiprius
Mon Jan 23, 2017 7:20 am
Forum: Investing - Theory, News & General
Topic: Hypo: What would you do if you were SURE of impending deline in markets
Replies: 51
Views: 2627

Re: Hypo: What would you do if you were SURE of impending deline in markets

(In_reality just beat me to it while I was writing this...) If I were SURE of an impending decline in the markets, I would get some sleep, rest, re-read some investment books and remind myself why I shouldn't be SURE of any prediction, but especially not about the markets. I would also remind myself...
by nisiprius
Sun Jan 22, 2017 4:33 pm
Forum: Investing - Help with Personal Investments
Topic: Investment in International Bond Index
Replies: 5
Views: 459

Re: Investment in International Bond Index

This is a frequently discussed topic in this forum. I don't know of any forum regulars who feel strongly about it one way or another. I've been investing in something close to a three-fund portfolio for decades. I don't think the case for Vanguard's bond fund is strong enough to make me add it. But ...
by nisiprius
Sun Jan 22, 2017 2:35 pm
Forum: Investing - Help with Personal Investments
Topic: Across Two Accounts - Frequent Trading Policy?
Replies: 4
Views: 261

Re: Across Two Accounts - Frequent Trading Policy?

According to Vanguard's own description of its Frequent-trading policy: If you sell or exchange shares of a Vanguard fund, you will not be permitted to buy or exchange back into the same fund, in the same account, within 30 calendar days. Notice, too, that However, this rule does not apply to: Vangu...
by nisiprius
Sun Jan 22, 2017 11:04 am
Forum: Investing - Theory, News & General
Topic: Dow crosses 20,000?
Replies: 28
Views: 2743

Re: Dow crosses 20,000?

I don't think crossing it during the day "counts." I think it has to be at least 20,000 at the close for people to break out the champagne, It's all too easy, in my opinion, for we priced-once-daily mutual fund investors to forget we are not the entirety of market participants. You or I m...
by nisiprius
Sun Jan 22, 2017 10:58 am
Forum: Investing - Theory, News & General
Topic: Unidirectional rebalancing?
Replies: 9
Views: 781

Re: Unidirectional rebalancing?

My experience was just like Sport's.

During 2008-2009 I couldn't bring myself to rebalance from bonds into stocks.

My name for this is "chickening out." I have a big old pack of rationalizations and I don't think it was such a terrible thing to do. But still.
by nisiprius
Sat Jan 21, 2017 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: international small cap value fund
Replies: 25
Views: 2004

Re: international small cap value fund

SPDR® S&P International Small Cap ETF (GWX) tilts small and value. http://portfolios.morningstar.com/fund/summary?t=GWX&region=usa&culture=en_US It's still in the "small blend " style box, not "small value," and Morningstar puts it in the "foreign small/mid blen...
by nisiprius
Sat Jan 21, 2017 8:36 pm
Forum: Investing - Theory, News & General
Topic: Dow crosses 20,000?
Replies: 28
Views: 2743

Re: Dow crosses 20,000?

Hey, wait. Did it?????? I'm not seeing it here. This supposedly happened on January 20th, right? Why am I not seeing it here? Is this a gag?

Image
by nisiprius
Sat Jan 21, 2017 8:25 pm
Forum: Investing - Theory, News & General
Topic: Dow crosses 20,000?
Replies: 28
Views: 2743

Re: Dow crosses 20,000?

I don't think crossing it during the day "counts." I think it has to be at least 20,000 at the close for people to break out the champagne,
by nisiprius
Sat Jan 21, 2017 8:08 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard TR or balanced index fund???
Replies: 28
Views: 1874

Re: Vanguard TR or balanced index fund???

There does seem be plenty of alternatives - but is there any reason I shouldn't stay with TR, given what I'm looking for? I see no reason. Since it is in a Roth, you can change your mind along the way with no tax consequences. If you'd said you were in Balanced Index I'd have said the same thing. T...
by nisiprius
Sat Jan 21, 2017 7:28 am
Forum: Investing - Theory, News & General
Topic: Reasons against margin aside from risk of margin call?
Replies: 23
Views: 1472

Re: Reasons against margin aside from risk of margin call?

The more risk you take, the less able you are to judge how much risk you are taking . That's the biggy: the risk of miscalculating your risk. It's relatively easy to judge the probability of frequently occurring events. It's extremely hard to judge the probability of rare events. And the devil of it...
by nisiprius
Sat Jan 21, 2017 6:30 am
Forum: Investing - Theory, News & General
Topic: International equity allocation - do you tilt to EM?
Replies: 22
Views: 1558

Re: International equity allocation - do you tilt to EM?

...I am trying to match the market, not the economy... I've yet to hear any good reason as to why you'd want to match the economy rather than the market ... Dare I say: https://i.imgur.com/216zd87.jpg There are plenty of reasons to deviate from the market portfolio other than a desire to reproduce ...
by nisiprius
Fri Jan 20, 2017 10:09 pm
Forum: Investing - Help with Personal Investments
Topic: international small cap value fund
Replies: 25
Views: 2004

Re: international small cap value fund

So, what you want is not quite unobtainable, but, after combining share classes, according to Fidelity and Morningstar... ...there are only two international small value funds in the universe of mutual funds. And four among ETFs but none with a conventional value weight: WisdomTree's DLS (developed...
by nisiprius
Fri Jan 20, 2017 9:52 pm
Forum: Investing - Theory, News & General
Topic: International equity allocation - do you tilt to EM?
Replies: 22
Views: 1558

Re: International equity allocation - do you tilt to EM?

I do not. I am trying to match the market, not the economy. In financial economics, the "market portfolio" has special characteristics that make it an optimum by certain measures which might or might not be good ones, under certain assumptions which might or might be true. But at least the...
by nisiprius
Fri Jan 20, 2017 7:14 pm
Forum: Investing - Theory, News & General
Topic: What are the global market cap weights today?
Replies: 10
Views: 630

Re: What are the global market cap weights today?

...I would like to follow the market weightings so I don't make any biases or bets. However, I know Bogle and others say to overweight the US if you live here. Does that hold merits?... In my opinion it does have some merit. A more important question, I think, is "how much does it actually mat...
by nisiprius
Fri Jan 20, 2017 7:09 pm
Forum: Investing - Theory, News & General
Topic: What are the global market cap weights today?
Replies: 10
Views: 630

Re: What are the global market cap weights today?

As mentioned, the weightings of the Vanguard Total World stock index funds are reasonably accurate and easy to find, and so are the weightings for the only other such fund I know, the iShares MSCI ACWI ETF, symbol ACWI. As you see they're in pretty good agreement. https://s28.postimg.org/ys3u7iwxp/C...
by nisiprius
Fri Jan 20, 2017 12:55 pm
Forum: Investing - Theory, News & General
Topic: Forever Stamps as an Investment?
Replies: 72
Views: 8377

Re: Forever Stamps as an Investment?

... when I was a kid in the 1950s many businesses, mail-order businesses in particular, did de facto accept stamps. In fact I recall TV commercials tell you to "send cash, stamps or money orders." However I'm sure this was only true because all businesses used enough postage stamps that t...
by nisiprius
Fri Jan 20, 2017 12:53 pm
Forum: Investing - Theory, News & General
Topic: Mathematics of international asset allocation
Replies: 43
Views: 3782

Re: Mathematics of international asset allocation

US large cap and foreign large cap are mostly made up of international large cap. They all swim in the same pool. What is the covariance of Shell and Exxonmobil or GM and Toyota or Merck and Novartis? If you want your foreign holdings to have low covariance with their domestic counterparts it seem ...
by nisiprius
Fri Jan 20, 2017 12:31 pm
Forum: Investing - Theory, News & General
Topic: "How Much Inflation Protection Do You Need?"
Replies: 7
Views: 1370

Re: "How Much Inflation Protection Do You Need?"

Well, of course, as with interest rates, an important "lesson" is that you can't predict inflation, either. So you don't know "how much you need."
by nisiprius
Fri Jan 20, 2017 12:26 pm
Forum: Investing - Theory, News & General
Topic: Forever Stamps as an Investment?
Replies: 72
Views: 8377

Re: Forever Stamps as an Investment?

Like Ponzi's stated scheme--he found an arbitrage opportunity in international postal reply coupons--this seems kind of silly because there's no practical way to scale it up far enough to amount to more than pin money. There was once an idea that postage stamps were legal tender, but a few minutes o...
by nisiprius
Fri Jan 20, 2017 11:34 am
Forum: Investing - Help with Personal Investments
Topic: Memory Bank 1.5%
Replies: 4
Views: 867

Re: Memory Bank 1.5%

I tune out anything that says "first year." I know that more energetic people can keep switching. I really have had very consistent experience, about three times now, of going for something that seemed noticeably better than the competition and having the added value of the deal basically ...
by nisiprius
Fri Jan 20, 2017 10:13 am
Forum: Investing - Help with Personal Investments
Topic: international small cap value fund
Replies: 25
Views: 2004

Re: international small cap value fund

This is "interesting." Fidelity's mutual fund screener doesn't even offer an option to screen for "international small cap value." The closest screening category they offer is "Foreign small/mid value." There are only 28 matching funds (and many of them are duplicates w...
by nisiprius
Fri Jan 20, 2017 9:45 am
Forum: Investing - Help with Personal Investments
Topic: international small cap value fund
Replies: 25
Views: 2004

Re: international small cap value fund

For those without the secret decoder ring: DISVX = DFA International Small Cap Value Portfolio DLS = WisdomTree International SmallCap Dividend Fund Does Vanguard offer an "International small cap value fund...similar to DISVX or DLS? Executive summary: no. Vanguard offers an international smal...
by nisiprius
Fri Jan 20, 2017 9:22 am
Forum: Personal Consumer Issues
Topic: Do I want to try out another bank for $250?
Replies: 17
Views: 1518

Re: Do I want to try out another bank for $250?

By the way, just to put some numbers on this. Suppose two investors, A and B, both have $15,000 in some kind of goodish savings account at bank X that earns 0.75% APY per year. Suppose investor A moves that $15,000 into a new bank Y that pays the same 0.75% APY but gives him a $150 bonus when he ope...
by nisiprius
Fri Jan 20, 2017 8:40 am
Forum: Personal Consumer Issues
Topic: Do I want to try out another bank for $250?
Replies: 17
Views: 1518

Re: Do I want to try out another bank for $250?

I've taken offers like that occasionally. Read the fine print, of course, but with the ones I've accepted there was no catch. They did what they said they would do, and I got the money they said I would get. The only "catch" is that, yes, a new customer is actually worth that much to them....
by nisiprius
Thu Jan 19, 2017 8:58 pm
Forum: Investing - Theory, News & General
Topic: When Bad Things Happen to Good Funds
Replies: 6
Views: 1372

Re: When Bad Things Happen to Good Funds

William Nygren has succeeded at a difficult task: picking stocks to deliver market-beating returns over long stretches of time. Both his $16.5 billion Oakmark Fund and his $5.6 billion Oakmark Select Fund have topped the S&P 500 by an annual average of more than a percentage point over the past...
by nisiprius
Thu Jan 19, 2017 5:59 pm
Forum: Investing - Theory, News & General
Topic: Fed Rate [may go] to 3% - [investing consequences?]
Replies: 84
Views: 8125

Re: Fed Rate [may go] to 3% - [investing consequences?]

Apologies, Kevin, I've corrected the attribution in my posting.
by nisiprius
Thu Jan 19, 2017 4:30 pm
Forum: Investing - Theory, News & General
Topic: Worth it to add thousands just to go from Inv to Admiral?
Replies: 4
Views: 960

Re: Worth it to add thousands just to go from Inv to Admiral?

Do the math. You say you would be liquidating Total Stock, Admiral to do it, which implies a change in your asset allocation with might deserve some thought, but let's just do the math. You are paying $15,000 x 0.05% = $7.50/year for the Total Stock + $35,000 x 0.23% = $80.50 for the Wellesley for a...
by nisiprius
Thu Jan 19, 2017 3:58 pm
Forum: Investing - Theory, News & General
Topic: Fed Rate [may go] to 3% - [investing consequences?]
Replies: 84
Views: 8125

Re: Fed Rate [may go] to 3% - [investing consequences?]

am i reading this right? she wants to increase it from the current 0.75% to 3.0% by 2019? is that a dramatic increase (seems so to me), and is it common to hike it so much in a relatively short time period? As noted by Kevin M, it went from 1% to 5.26% from May 2004 to July 2006. https://s30.postim...
by nisiprius
Thu Jan 19, 2017 3:07 pm
Forum: Investing - Theory, News & General
Topic: American Century decreasing stock allocations - Interesting article
Replies: 16
Views: 2007

Re: American Century decreasing stock allocations - Interesting article

My comments are that this should please those American Century customers who:
  • Think they can decode the political message implied in it,
  • Agree with it, and
  • Believe in adjusting their portfolio to reflect macroeconomic, political, and ideological predictions.
by nisiprius
Thu Jan 19, 2017 3:04 pm
Forum: Investing - Theory, News & General
Topic: American Century decreasing stock allocations - Interesting article
Replies: 16
Views: 2007

Re: American Century decreasing stock allocations - Interesting article

Meaning of the phrase American Century: The term was coined by Time publisher Henry Luce to describe what he thought the role of the United States would be and should be during the 20th century. Luce, the son of a missionary, in a February 17, 1941 Life magazine editorial urged the United States to ...
by nisiprius
Thu Jan 19, 2017 2:07 pm
Forum: Investing - Theory, News & General
Topic: Fed Rate [may go] to 3% - [investing consequences?]
Replies: 84
Views: 8125

Re: Fed Rate [may go] to 3% - [investing consequences?]

...How do you guys/gals do CDs for a IRA account?... I go to the bank and tell the customer service rep that I want to open an IRA account with a CD. I do some paperwork. When it comes time for renewal I got some paperwork in the mail that says (annoyingly!) that if I don't get back to them they wi...
by nisiprius
Thu Jan 19, 2017 12:43 pm
Forum: Investing - Help with Personal Investments
Topic: VG Rep [doesn't know why commodity ETFs are shown under bonds in online AA]
Replies: 16
Views: 730

Re: VG Rep [doesn't know why commodity ETFs are shown under bonds in online AA]

P.S. EdwardL007, If you don't like Vanguard, leave. I don't mean that in a snarky or dismissive way, I'm serious and I'm just stating it plainly. I don't think anybody, even John Bogle, thinks that Vanguard Brokerage Services is the best place for sophisticated traders. In my personal opinion, it ha...
by nisiprius
Thu Jan 19, 2017 12:33 pm
Forum: Investing - Help with Personal Investments
Topic: VG Rep [doesn't know why commodity ETFs are shown under bonds in online AA]
Replies: 16
Views: 730

Re: OMG! VG REPS KNOW NOTHING AT ALL! and NO UPPER LEVEL HELP

Did Vanguard classify them entirely as bonds? Or did they perhaps use Morningstar's data? (My guess is that Morningstar is the "third party." You might try asking them that outright.) Morningstar's computers think that DBA is 40% cash, 9% bonds and that DBC is 42% cash, 7% bonds. The probl...
by nisiprius
Thu Jan 19, 2017 12:04 pm
Forum: Investing - Theory, News & General
Topic: Fed Rate [may go] to 3% - [investing consequences?]
Replies: 84
Views: 8125

Re: Fed Rate to 3%

[consider the case where the overnight rate rises] "a few times a year" through 2019 to get near 3% long term... this [would] cause bonds to go down for sure. Yes, it would. By how much? The Fed Funds rate is now 0.75%. Getting to 3% by the end of 2019 would imply an increase of 2.25% ove...
by nisiprius
Thu Jan 19, 2017 9:41 am
Forum: Investing - Theory, News & General
Topic: Vanguard's new "account overview" page... BOO!
Replies: 98
Views: 8360

Re: Vanguard's new "account overview" page... BOO!

Perhaps the large font is for older eyes. Tiny print and old eyes don't go well together. I have old eyes. And I have a serviceable pair of eyeglasses, thank you. If the young designers cared about old eyes, they would not be thinking about making text big, which is not a problem. They would be thi...
by nisiprius
Thu Jan 19, 2017 9:31 am
Forum: Investing - Help with Personal Investments
Topic: Voilatility of international stocks, well in particular, VTIAX?
Replies: 9
Views: 614

Re: Voilatility of international stocks, well in particular, VTIAX?

Some other numbers, from PortfolioVisualizer. Portfolio 1 is US only Vanguard Total Stock (VTSMX). Portfolio 2 is international only, Vanguard Total International, VGTSX, I'm using it instead of VTIAX because sometimes the numbers for Admiral shares only go back to the time Vanguard began offering t...
by nisiprius
Thu Jan 19, 2017 9:12 am
Forum: Investing - Help with Personal Investments
Topic: Voilatility of international stocks, well in particular, VTIAX?
Replies: 9
Views: 614

Re: Voilatility of international stocks, well in particular, VTIAX?

It's a frequently debated topic. These are my opinions, but (obviously) I don't think they're crazy. 1) International stocks in general, "and VTIAX in particular," have been a little more volatile than US stocks, but not a lot more volatile. 2) International stocks and US stocks have leapf...
by nisiprius
Wed Jan 18, 2017 10:08 pm
Forum: Investing - Theory, News & General
Topic: Do you always get a small-cap premium in periods of expansionary monetary policy?
Replies: 12
Views: 743

Re: Do you always get a small-cap premium in periods of expansionary monetary policy?

Nisiprius,after bit of thought, hate to accuse you of data mining but why did you choose to not include 2009 when monetary policy was very easy and small premium was very high, with even NAESX outperforming S&P by almost 10%. Curious omission. Here's another look 2009-2016, S&P 14.5 vs DFA ...
by nisiprius
Wed Jan 18, 2017 5:38 pm
Forum: Investing - Theory, News & General
Topic: Do you always get a small-cap premium in periods of expansionary monetary policy?
Replies: 12
Views: 743

Re: Do you always get a small-cap premium in periods of expansionary monetary policy?

OK. Source https://s23.postimg.org/wpn8bndaz/Captura_de_pantalla_2017_01_18_a_las_5_31_16_PM.png That works out to: Total stock market, 12.93%; small-cap funds, 13.78% (Vanguard NAESX); 13.12% (iShares IWM); 14.04% (SCHA). Sharpe ratio 2010-2016 inclusive, 0.98 (VTSMX), 0.86 (NAESX), 0.80 (IWM), 0.8...
by nisiprius
Wed Jan 18, 2017 4:00 pm
Forum: Investing - Theory, News & General
Topic: Do you always get a small-cap premium in periods of expansionary monetary policy?
Replies: 12
Views: 743

Do you always get a small-cap premium in periods of expansionary monetary policy?

(Yeah... "Betteridge's Law of Headlines")... I learn from Berkin and Swedroe's Your Complete Guide to Factor-Based Investing that: Gerald Jensen and Jeffrey Mercer, authors of the 2002 paper "Monetary Policy and the Cross-Section of Expected Stock Returns," examined the relations...
by nisiprius
Tue Jan 17, 2017 9:56 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1162
Views: 156271

Re: QSPIX - thoughts on interesting fund

I just find it very strange how confidently some people are posting "Here's a free lunch." Please show an actual quote where someone said this about alternatives Larry Not in so many words, but an awful lot of writers have juxtaposed Markowitz's statement that "diversification is the...
by nisiprius
Tue Jan 17, 2017 2:30 pm
Forum: Investing - Help with Personal Investments
Topic: Should Bond Funds be Considered a Fixed Income Investment?
Replies: 30
Views: 1846

Re: Should Bond Funds be Considered a Fixed Income Investment?

Strictly off the top of my head, there is a family of such funds called Guggenheim Bulletshares . That's literally all I know about them: they exist. You can read about them as well as I can... "Bond-like Experience in an ETF - Combines the benefits of bonds — monthly income, final distribution...
by nisiprius
Tue Jan 17, 2017 10:40 am
Forum: Personal Finance (Not Investing)
Topic: FAFSA for High Net Worth Parents?
Replies: 70
Views: 5798

Re: FAFSA for High Net Worth Parents?

I don't know. It was a while ago. We are not high net worth, but it was plainly obvious that we could afford to put two kids through school and it seemed pointless to apply. But we were bullied and bullied and bullied , by guidance counselors, by our kids themselves, by propaganda from all sides (&q...
by nisiprius
Tue Jan 17, 2017 10:03 am
Forum: Investing - Help with Personal Investments
Topic: My co-worker boasting about his investments. What do you think about his selections?
Replies: 57
Views: 4520

Re: My co-worker boasting about his investments. What do you think about his selections?

1) I think he's an idiot to be holding both SPY and VTI. Not that there's any harm in it, there isn't, but it's like insisting on drinking nothing but a carefully crafted mixture of Folger's and Maxwell House. 2) I think he's an idiot to be holding leveraged 3X inverse funds. If he's buying and hold...
by nisiprius
Tue Jan 17, 2017 9:36 am
Forum: Investing - Help with Personal Investments
Topic: Put all your eggs in the market?
Replies: 11
Views: 996

Re: Put all your eggs in the market?

...I suspect most Bogleheads are 100% (or close to it) invested in the market... What makes you suspect this? I suspect most do not. I would guess that a substantial proportion of people who call themselves Bogleheads use stock allocations that resemble John C. Bogle's "age in bonds," per...

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