Search found 2203 matches

by patrick013
Thu Jun 21, 2018 10:54 pm
Forum: Investing - Theory, News & General
Topic: Alpha Architect: The Future For Factor Investing May Be Different From It’s Backtested Past
Replies: 1
Views: 327

Re: Alpha Architect: The Future For Factor Investing May Be Different From It’s Backtested Past

I think this article implicitly emphasizes the importance of an intuitive risk based or behavioral based rationale for a factor premium, and also implicitly emphasizes the necessity that a factor be robust to multiple definitions. Curious to hear what others think. Amongst the stat methods still un...
by patrick013
Thu Jun 21, 2018 6:35 pm
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 33
Views: 1963

Re: Factor Investing Makes Someone Money, But Maybe Not You

I agree with Rick, a general index is a general index. Advisors can show off certain stocks but alot cannot, and advisors can show off certain index concentrations but as a factor result of concept. Most of these models haven't made it into business statistics books for non-math majors where pragmat...
by patrick013
Thu Jun 21, 2018 4:38 pm
Forum: Investing - Help with Personal Investments
Topic: 401k/Roth 401K split
Replies: 5
Views: 424

Re: 401k/Roth 401K split

......... so when we retire as well so I don't expect to be in a higher tax bracket when I retire. Invest in tax-deferred if the marginal tax rate in retirement is expected to be less. Based on your budget you could put some 401k money into a Roth 401k if the plan permits. You would still have tax-...
by patrick013
Wed Jun 20, 2018 7:38 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 40
Views: 4131

Re: Are Bogleheads smarter than the bond market?

Based on this information, some of us make our decisions. When I based out a strategy I hypothesized I would buy a 10 year or slightly longer bond at 4% YTM. I bought one at a premium and one at a similar discount. I also planned on selling the bond in 3 years at 3% YTM estimated. So I calc'd what ...
by patrick013
Wed Jun 20, 2018 1:49 pm
Forum: Investing - Help with Personal Investments
Topic: Stock Investments questions and advice?
Replies: 7
Views: 489

Re: Stock Investments questions and advice?

I'm fairly new to this all. I'm currently reading a book called: "One up on Wall Street" to grasp the understanding of stocks. That's an old Peter Lynch book. If I remember he buys brand names or common names having a slight downturn and then sells in 3-5 years after that good entry point ? Today h...
by patrick013
Tue Jun 19, 2018 10:24 pm
Forum: Investing - Theory, News & General
Topic: Effective Number of Bets, or how many funds is enough?
Replies: 16
Views: 1118

Re: Effective Number of Bets, or how many funds is enough?

Equal weights are probably a simpler calc. So if
more bets are better ( I think ) would that metric
lead to other facts perhaps in dollars or just a
portfolio quality statement. Amazing what things
can be invented.
by patrick013
Tue Jun 19, 2018 7:35 pm
Forum: Investing - Theory, News & General
Topic: Effective Number of Bets, or how many funds is enough?
Replies: 16
Views: 1118

Re: Effective Number of Bets, or how many funds is enough?

One of the most interesting developments, in my opinion, is the application of information theory to examine entropy in the covariance matrix of returns for a group of assets. Without going into more theoretical detail than is necessary, basically the process uses principal component analysis and S...
by patrick013
Tue Jun 19, 2018 1:17 pm
Forum: Investing - Theory, News & General
Topic: Almost flat yield curve implications.
Replies: 5
Views: 783

Re: Almost flat yield curve implications.

I see this for current Treasury yields: 2 year = 2.54% 10 year = 2.88% 30 year = 3.01% This is close to flat (at least it seems like that to me). 1. So what does that mean for the common wisdom (I often read) that interest rates are on the rise? 2. What are the broader implications? 3. Could the yi...
by patrick013
Mon Jun 18, 2018 8:06 pm
Forum: Investing - Help with Personal Investments
Topic: Investment book recommendations?
Replies: 12
Views: 1001

Re: Investment book recommendations?

Apart from those already mentioned there are some good
books on Personal Financial Planning. Not the faddy off
the bookstore shelf kind but some more academic types.
I'd try Personal Financial Planning by Gitman on eBay for
a start. Covers more than stocks and bonds.
by patrick013
Mon Jun 18, 2018 7:45 pm
Forum: Personal Consumer Issues
Topic: How do you read books?
Replies: 34
Views: 2858

Re: How do you read books?

I love underlining and then going back and reread. So I just read the first sentence of each paragraph and don't read further unless it needs an underline. Can read alot then at first glance, even a whole newspaper. Fiction I just casually read as that is for enjoyment mostly, rather than reading an...
by patrick013
Sat Jun 16, 2018 1:55 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 40
Views: 4131

Re: Are Bogleheads smarter than the bond market?

If rates are to normalize then the base FFR rate needs to hold steady for many years. Expecting rates to go down if stocks decline, inversions to occur otherwise, or rate increases to halt runaway production, all the things Keynes likes to do to try to effect the market slightly, would have to cease...
by patrick013
Fri Jun 15, 2018 5:09 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 40
Views: 4131

Re: Are Bogleheads smarter than the bond market?

BND for 10 years returned 3.7% compounded while BND the last 3 years returned 1.6% compounded while a CD ladder would return 2-3% compounded and would be reinvested at par at whatever rate shows up in the next few years. If I had any money I think I'd consider these. Get the exact target date and ve...
by patrick013
Fri Jun 15, 2018 12:53 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 40
Views: 4131

Re: Are Bogleheads smarter than the bond market?

Bogleheads like to convince themselves that the market has performed some unique valuation process. But many times a yield spread analysis needs to be done. Could you comment/explain the following 2 observations if they occurred next week ? Assume the FFR is constant. TRSY 10 = 4%, FFR = 1% or TRSY ...
by patrick013
Tue Jun 12, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: Yes, you can diversify a market portfolio
Replies: 190
Views: 9389

Re: Yes, you can diversify a market portfolio

I think most people would say that the market portfolio is a diversified portfolio. Certainly it does, by definition, hold the greatest possible number of assets. Sometimes I think portfolios are over diversified. These numbers are a little old and a little too high I think but still represents the...
by patrick013
Mon Jun 11, 2018 3:48 pm
Forum: Investing - Help with Personal Investments
Topic: rolling 10yr period returns for different stock/bond mixes
Replies: 5
Views: 520

Re: rolling 10yr period returns for different stock/bond mixes

The forecasts we have do not take the tax reduction into account. Corp tax lowered from around 35% to a flat 21%. Even if earnings growth is flat that tax expense reduction is huge. Should add 10-15% to any index's total profits fully diluted. So, I think Bogle's is too low and rolling forecasts too...
by patrick013
Fri Jun 08, 2018 7:58 pm
Forum: Investing - Theory, News & General
Topic: Withdraw from TIRA or Roth, it doesn't matter?
Replies: 14
Views: 1134

Re: Withdraw from TIRA or Roth, it doesn't matter?

If your current marginal tax rate is lower than the one you expect in the future, spend from tax-deferred. If your current marginal tax rate is higher than the marginal tax rate you expect in the future, spend from the Roth account. The chore is always estimating future taxes accurately. If equal ta...
by patrick013
Fri Jun 08, 2018 7:08 pm
Forum: Investing - Help with Personal Investments
Topic: How do you think I can improve my portfolio and strategy?
Replies: 1
Views: 303

Re: How do you think I can improve my portfolio and strategy?

I think if you're going to do tax-deferred then contribute the most so that you get the max tax-deferred for the 401k. What other features does the 401k have ? Roth option, non-deductibles, rollovers, etc.. These usually are helpful. Tax-efficient Fund Placement Investment Priorities Otherwise it lo...
by patrick013
Fri Jun 08, 2018 5:20 pm
Forum: Investing - Theory, News & General
Topic: Rising Interest Rate Strategy
Replies: 35
Views: 4024

Re: Rising Interest Rate Strategy

Actually in rising interest rate environment, high yield tends to perform better in general. The issue is that spreads are pretty low right now, so it's not clear that you're being adequately compensated for the additional risk. I think investment grade has a slightly higher duration than non-inves...
by patrick013
Fri Jun 08, 2018 3:08 pm
Forum: Investing - Theory, News & General
Topic: Rising Interest Rate Strategy
Replies: 35
Views: 4024

Re: Rising Interest Rate Strategy

However, now that rates are actually rising, I’m looking for somewhere to shift maturing CD proceeds and am considering some sort of floating rate fund like the BKLN ETF. Granted there is a big difference in risk. Any other floating rate type products that make sense. For fixed income I stay invest...
by patrick013
Thu Jun 07, 2018 1:51 pm
Forum: Investing - Theory, News & General
Topic: Rising Interest Rate Strategy
Replies: 35
Views: 4024

Re: Rising Interest Rate Strategy

I think the people that had CD ladders are going to get the prize. 5 year CD's were paying 10 year Trsy rates and should mature just in time to reinvest at much higher rates. Now 2 and 3 year CD's are paying 5 year rates and higher and should mature in time to reinvest at much higher rates. As a sem...
by patrick013
Wed Jun 06, 2018 3:13 pm
Forum: Investing - Theory, News & General
Topic: Yes, you can diversify a market portfolio
Replies: 190
Views: 9389

Re: Yes, you can diversify a market portfolio

I always thought when bonds were involved the efficient frontier was the guiding number. Or at least some concern with lowering beta thru bond portfolio inclusion. Several studies have reached the conclusion that in an all stock portfolio around 30 stocks there is a definite reduction in volatility,...
by patrick013
Sun Jun 03, 2018 8:14 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Roth IRA
Replies: 24
Views: 1486

Re: Bonds in Roth IRA

My wife has a pretty decent selection of low-cost index funds in her 401(k), but lousy choices of bond funds. Most are actively managed with .75% fees or higher. The only low cost (.1% fee) bond fund is a short-term (~2 year duration) fund. On the other hand, her Roth IRA allows us to invest in any...
by patrick013
Sun Jun 03, 2018 7:30 pm
Forum: Investing - Theory, News & General
Topic: Bonds in 401k or Roth? Doesn't matter
Replies: 11
Views: 868

Re: Bonds in 401k or Roth? Doesn't matter

To do the accounting correctly requires that you discount your 401k value by the (estimated) amount by which it will be reduced upon withdrawal. You should find that over several decades of accumulation and withdrawal at average return levels having bonds in traditional will give a higher percentag...
by patrick013
Sun Jun 03, 2018 2:38 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking input on investment decision
Replies: 21
Views: 1738

Re: Seeking input on investment decision

It would be good for you to explain your thought process behind those choices. I don't agree that is a good investing plan. I think everyone should start with the three fund allocation and do something different when he/she can argue convincingly why it should be different. Picking investments for ...
by patrick013
Sun Jun 03, 2018 12:02 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking input on investment decision
Replies: 21
Views: 1738

Re: Seeking input on investment decision

What do you think of SDIV or DIV? I wouldn't invest in either one. Mortgage REIT's, MLP's, Intl's, not the kind of thing a dividend fund should be. Even a Preferred stock fund could be better. Plus the total returns are low on those 2 funds. Default risk and currency risk is very present. I'd stay ...
by patrick013
Sat Jun 02, 2018 5:07 pm
Forum: Personal Finance (Not Investing)
Topic: Have $2.5M at 30, career advice needed
Replies: 49
Views: 5237

Re: Have $2.5M at 30, career advice needed

Have you ever tested the market to see what your house would sell for ? Real Estate can be very unpredictable. No offers for years then 3 offers the same day type of thing. If I rec'd an offer of over 2M it would be very hard not to take it, even after taxes, if any. Rent, or buy a smaller house, ta...
by patrick013
Fri Jun 01, 2018 9:36 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking input on investment decision
Replies: 21
Views: 1738

Re: Seeking input on investment decision

I'm aware there is likely some overlap with the ETFs, so would probably pare those back a bit. Any thoughts or advice would be much appreciated. https://us.spindices.com/documents/research/research-the-beauty-of-simplicity-the-sp-500-low-volatility-high-dividend-index.pdf?force_download=true Exhibi...
by patrick013
Fri Jun 01, 2018 4:35 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Recommendations
Replies: 2
Views: 420

Re: Portfolio Recommendations

Tax-efficient Fund Placement

Looks like a good portfolio if expenses are not too high.
by patrick013
Thu May 31, 2018 2:58 pm
Forum: Investing - Theory, News & General
Topic: Treasury yields drop, CD yields hold steady
Replies: 16
Views: 2416

Re: Treasury yields drop, CD yields hold steady

The Treasury yields dropped because of a flight to quality situation based on stuff in Italy and Spain. Yes, I think they were talking of defaulting on govt. bonds, sounds like the Venezuelan story a few weeks back. I still think two consecutive 2 year bonds or CD's are going to be better than a si...
by patrick013
Sun May 27, 2018 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Should I Leave Traditional IRA to Grandkids?
Replies: 21
Views: 2489

Re: Should I Leave Traditional IRA to Grandkids?

after-tax amounts ? ......roll the after-tax amounts to a Roth IRA as a tax-free conversion. That's incorrect. Any distribution except a rollover to a qualified plan must be prorated between pretax and basis. That's what make backdoor Roth difficult for people with existing TIRAs with pretax money....
by patrick013
Sun May 27, 2018 11:57 am
Forum: Investing - Theory, News & General
Topic: Strengths/Weaknesses of Market Cap and Value Strategies
Replies: 21
Views: 2154

Re: Strengths/Weaknesses of Market Cap and Value Strategies

I'm uncertain what % market cap and what % value I should use. 100% market cap? 100% value? Somewhere in between? Everybody has their day. There have been decades where growth was better than value and vice-versa. There have been decades where LC was better, decades where MC was better, and decades...
by patrick013
Sat May 26, 2018 5:50 pm
Forum: Personal Finance (Not Investing)
Topic: Should I Leave Traditional IRA to Grandkids?
Replies: 21
Views: 2489

Re: Should I Leave Traditional IRA to Grandkids?

Very little non-deductible traditional IRA contribution. And I don't think you can pick and choose to convert only such non-deductible amount. As part of a 401k rollover it's possible, pre-tax and after-tax. But where you are at today you'd have to consult with a tax preparer. That I am not. If tha...
by patrick013
Sat May 26, 2018 5:36 pm
Forum: Personal Finance (Not Investing)
Topic: Should I Leave Traditional IRA to Grandkids?
Replies: 21
Views: 2489

Re: Should I Leave Traditional IRA to Grandkids?

after-tax amounts ? ......roll the after-tax amounts to a Roth IRA as a tax-free conversion. This strategy alleviates the blending of the before-tax and after-tax amounts in your Traditional IRAs and negates the need for the pro-rata calculation. At least those would be converted and future pro-rata...
by patrick013
Thu May 24, 2018 5:09 pm
Forum: Investing - Theory, News & General
Topic: Bogle featured in Barrons cover story
Replies: 38
Views: 3702

Re: Bogle featured in Barrons cover story

A few ideas. 500 index strips were available on certain exchanges before Bogle saw their light and made the general public much more aware of and made the creation of actual wide spread 500 index mutual funds widely available. So like other products and ideas great credit is due where great credit i...
by patrick013
Tue May 22, 2018 7:49 pm
Forum: Investing - Theory, News & General
Topic: Bond Yields and Federal Funds Rate
Replies: 30
Views: 2634

Re: Bond Yields and Federal Funds Rate

The paper goes on to analyze when the disconnect between the FFR and 10-year yield began, and presents a theory to explain why. Here is the paper's statement about this disconnect being a rejection of the EH: The theory of the term structures that dominates the finance and monetary policy literatur...
by patrick013
Mon May 21, 2018 3:01 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 30
Views: 2658

Re: Dividend / no dividend index funds?

Just Fed watching like I usually do. They usually provide some direction. First, you specifically mean when the Fed funds rate has peaked not interest rates in general. Second, at any point in time, future Fed actions are guided by future outcomes not yet known at the point in time. Quote from the ...
by patrick013
Sun May 20, 2018 2:41 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 30
Views: 2658

Re: Dividend / no dividend index funds?

https://us.spindices.com/documents/research/research-the-beauty-of-simplicity-the-sp-500-low-volatility-high-dividend-index.pdf?force_download=true These usually outperform and I will probably buy some when interest rates peak. Perhaps you meant to say they usually outperform when interest rates fa...
by patrick013
Sun May 20, 2018 2:23 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 30
Views: 2658

Re: Dividend / no dividend index funds?

Do any funds like this exist? I for one would love to use them, assuming expenses are low. https://us.spindices.com/documents/research/research-the-beauty-of-simplicity-the-sp-500-low-volatility-high-dividend-index.pdf?force_download=true These usually outperform and I will probably buy some when i...
by patrick013
Sun May 20, 2018 2:18 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 30
Views: 2658

Re: Dividend / no dividend index funds?

... I will probably buy some when interest rates peak ... Please let us know " when interest rates pea k", it will be interesting to see how your prediction works out. Will do. Mostly just Fed watching as to when a long term trend expected would be inclusive of rate decreases after a period of high...
by patrick013
Sun May 20, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Bond Yields and Federal Funds Rate
Replies: 30
Views: 2634

Re: Bond Yields and Federal Funds Rate

I think you would find that a TRSY5 has a more normal distribution than a TRSY10 so it's linear relationship is slightly better statistically. Otherwise a confidence interval isn't anything useful and replaced by separate observations of spread occurences which may or not be signals between economic...
by patrick013
Sat May 19, 2018 1:56 pm
Forum: Investing - Theory, News & General
Topic: Bond Yields and Federal Funds Rate
Replies: 30
Views: 2634

Re: Bond Yields and Federal Funds Rate

I could download the data and actually do the analysis, but I don't really see the point, when the visuals make the the points so clearly. And that is what the point is. You've zoomed in on aberrations in the statistical data for short term time periods and done nothing to explain them except state...
by patrick013
Sat May 19, 2018 1:44 pm
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 30
Views: 2658

Re: Dividend / no dividend index funds?

Do any funds like this exist? I for one would love to use them, assuming expenses are low. https://us.spindices.com/documents/research/research-the-beauty-of-simplicity-the-sp-500-low-volatility-high-dividend-index.pdf?force_download=true These usually outperform and I will probably buy some when i...
by patrick013
Sat May 19, 2018 12:22 pm
Forum: Investing - Theory, News & General
Topic: Bond Yields and Federal Funds Rate
Replies: 30
Views: 2634

Re: Bond Yields and Federal Funds Rate

The FFR has about a .90 correlation with movements of market interest rates. The Federal Funds Rate had a correlation of 0.358 with 10 year Treasuries over the period 1983-2007. Over the subperiod 2001-2007 the correlation was even lower, 0.128. From the paper "Decoupling between the Federal Funds ...
by patrick013
Sat May 19, 2018 9:47 am
Forum: Investing - Theory, News & General
Topic: Bond Yields and Federal Funds Rate
Replies: 30
Views: 2634

Re: Bond Yields and Federal Funds Rate

We often see comments like, "The Fed is going to raise interest rates, so bond yields will increase and bond values will fall". This represents a a misunderstanding of the relationship between the federal funds rate (FFR) and bond yields. We can see that if we carefully inspect a chart of the targe...
by patrick013
Thu May 17, 2018 7:46 pm
Forum: Investing - Help with Personal Investments
Topic: Investment Plan Query (Dividend vs Total Return Strategy for Unusual Tax Situation)
Replies: 8
Views: 724

Re: Investment Plan Query (Dividend vs Total Return Strategy for Unusual Tax Situation)

(hence the booms and busts in Ireland, since monetary policy largely reflects German and not Irish circumstances)—the least arbitrary stock allocation is simply to own the world. What do you think? Am I way off? Don't follow Intl that much but I know the US dollar is trading less than usual. If you...
by patrick013
Thu May 17, 2018 6:25 pm
Forum: Investing - Help with Personal Investments
Topic: Investment Plan Query (Dividend vs Total Return Strategy for Unusual Tax Situation)
Replies: 8
Views: 724

Re: Investment Plan Query (Dividend vs Total Return Strategy for Unusual Tax Situation)

I wonder why global would be so good. If you stayed with
the EU or just plain Europe or a dividend fund concentrating
on the British isles you should have less currency risk. France
has been having good dividend funds if the exchange rates
stay stable. Check it out.
by patrick013
Thu May 17, 2018 12:16 pm
Forum: Investing - Help with Personal Investments
Topic: Favorite Passively Managed Funds
Replies: 4
Views: 444

Re: Favorite Passively Managed Funds

I'm helping my boss pick out new investment options for our 401k plan from ~10k options available at Paychex Open Investment platform (link below). What is your favorite passively managed funds? Of course, I'll be adding the Vanguard funds listed below, but wanted to see what other options you guys...
by patrick013
Thu May 17, 2018 11:48 am
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Mechanics
Replies: 17
Views: 1475

Re: Asset Allocation Mechanics

Tax Loss Harvest when the next downturn occurs. Reallocate
into your best AA afterwards. In the IRA reallocate anytime.

Tax-efficient Fund Placement
by patrick013
Wed May 16, 2018 12:48 pm
Forum: Investing - Help with Personal Investments
Topic: Why are stock returns expected to be so low over the next decade?
Replies: 27
Views: 4622

Re: Why are stock returns expected to be so low over the next decade?

Well if you read the weekly financial journals you've got 5 bears on one side of the page and when you turn to the other side there's 5 bulls looking at other sectors and all with appropriate facts. Both bears and bulls will not ignore the chance of the crash. Energy up could be a big plus. What's I...