Search found 476 matches
- Fri May 27, 2022 4:17 pm
- Forum: Personal Consumer Issues
- Topic: Volvo XC40 Recharge vs. Plug-in hybrid alternatives
- Replies: 35
- Views: 2846
Re: Volvo XC40 Recharge vs. Plug-in hybrid alternatives
When we were looking at these, the XC40 came out ahead of all 2-row SUV's in this general segment in my book. First it is very nice, and pretty fun. Second, the spreadsheet said it was less expensive than competing hybrids such as the plug-in or non-plug-in Lexus, Tesla Y, and the electric Mustang pseudo-wagon based on 10-year NPV. I need to add a caveat that I would have been able to buy the Volvo and Lexus at MSRP, while Ford would have tacked on a huge cost increase. Others such as Ionic5 are simply not available, especially to me, whereas the XC40 has some availability. So the XC40 would be my first choice out of any mid-high level SUV (of any size and type) whose sole purpose was commuting and errand running. (But it turned out we want...
- Thu Apr 21, 2022 8:50 am
- Forum: Personal Consumer Issues
- Topic: Sienna vs. Odyssey vs. Pilot
- Replies: 64
- Views: 7384
Re: Sienna vs. Odyssey vs. Pilot
I was not impressed by the Sienna for the reasons others have suggested. I felt car sick looking out the portholes in the last seat, and while it may have the best mechanics it seemed to have the worst ergonomics and general impression of the current minivans. It went from first to worst in my list as soon as I drove one. If you have an outlet (even a standard 110V wall outlet) my NPV spreadsheet shows a Pacifica Hybrid will offer the most van for your money, even with an extra $5,000 maintenance and $7,000 more depreciation than a Sienna after 10 years. The Pinnacle goes well with the hybrid, because neither has the flattening folding middle seats. Or the Touring L for a very nice reasonably affordable minivan. If you want the ultimate min...
- Wed Jun 02, 2021 12:39 am
- Forum: Investing - Theory, News & General
- Topic: Are we in a housing bubble?
- Replies: 687
- Views: 180658
Re: Are we in a housing bubble?
Anecdata: the house next door just sold for $60k more than we bought ours for 10 months ago, even though it is 700 sqft smaller. Prices are up 33% in 10 months, and that was already an all time high.
- Wed Jun 02, 2021 12:14 am
- Forum: Investing - Theory, News & General
- Topic: How many here follow Bogle's "no international" theory?
- Replies: 757
- Views: 59485
Re: How many here follow Bogle's "no international" theory?
I follow it every time I log in to Bogleheads!
- Mon May 31, 2021 7:02 pm
- Forum: Investing - Theory, News & General
- Topic: Portfolio Visualizer
- Replies: 18
- Views: 1710
Re: Portfolio Visualizer
It is most useful for disproving things, showing evidence for theories, or possibly for sweeping generalizations. Example: total bond has a duration of 6.5 years, which makes it too sensitive for holding periods of 7 years because a huge gain in rates at the end could wipe all that off the table. Backtest: total bond has never had a drawdown longer than 18 months since inception, including dividends. Example: regular stock purchases eg once per month are a phenomenal way of reducing risk, and if markets crash, increase rate of return. Backtest: a 2020 investor starting from 0 and making monthly purchases without fail made a rate of return which handily exceeded the market’s. And more, probably many more useful. Wrong use: A mix of 38% EDV, ...
- Sat May 29, 2021 2:18 pm
- Forum: Investing - Theory, News & General
- Topic: Small Cap Value heads Rejoice !!!
- Replies: 5577
- Views: 619154
Re: Small Cap Value heads Rejoice !!!
You can look at SFENX, the mutual fund version of FNDE, if you want a longer history of the method.MotoTrojan wrote: ↑Mon May 24, 2021 9:32 am I am also looking to add some EM exposure, but want a stiffer value tilt. FNDE is my current plan and is quite valuey. Regressions are similar to DFEVX other than a big negative size loading. PXH is a similar version from Invesco (uses book as well, doesn't include buybacks with dividends, believe only rebalances annually where-as FNDE uses a quarterly traunch) which has been around longer and also mirrors DFEVX quite well in returns/regressions.
Similarly SFILX/FNDC.
- Thu Mar 11, 2021 6:16 pm
- Forum: Investing - Theory, News & General
- Topic: Are bond ETF's "safe" (Bernstein) - sounding board please
- Replies: 131
- Views: 12892
Re: Are bond ETF's "safe" (Bernstein) - sounding board please
We would know if this occurred because BND and VBTLX would begin to lag their indexes and also start to lag bond ETF's that have no mutual fund class, such as AGG. But so far I have not seen any sign this occurring. Am I not looking at the right thing?
- Thu Mar 11, 2021 5:48 pm
- Forum: Investing - Theory, News & General
- Topic: Are bond ETF's "safe" (Bernstein) - sounding board please
- Replies: 131
- Views: 12892
Re: Are bond ETF's "safe" (Bernstein) - sounding board please
Unless someone can show why this is not so, it seems like Dr. Bernstein is correct, end of story. I think it makes sense to back test with the assumption new money is flowing into both funds. Back testing like that in portfolio visualizer certainly shows that the mutual fund version has done slightly better than the EFT in the last 10 years or so. The difference could be noise, though, for all I know. It doesn't seem like there's a whole lot of evidence to prefer one over the other. Right it is noise. I'm not trying to show that VBTLX is better, I am showing that BND is not better for a long term investor. There is no meaningful difference, which is something some posters were implying. However for people trying to sell bonds during a mark...
- Thu Mar 11, 2021 3:59 pm
- Forum: Investing - Theory, News & General
- Topic: Are bond ETF's "safe" (Bernstein) - sounding board please
- Replies: 131
- Views: 12892
Re: Are bond ETF's "safe" (Bernstein) - sounding board please
Comparing the actual returns of the BND and VBTLX mutual funds I see no evidence that shareholders of VBTLX are doing worse than BND. However I can clearly see how shareholders of BND would do quite poorly selling at certain times during March 2020 while VBTLX holders would not. In fact VBTLX has done insignificantly better over the past two years. Unless someone can show why this is not so, it seems like Dr. Bernstein is correct, end of story. https://finance.yahoo.com/chart/BND#eyJpbnRlcnZhbCI6IndlZWsiLCJwZXJpb2RpY2l0eSI6MSwidGltZVVuaXQiOm51bGwsImNhbmRsZVdpZHRoIjo5LjUyMzgwOTUyMzgwOTUyNCwiZmxpcHBlZCI6ZmFsc2UsInZvbHVtZVVuZGVybGF5Ijp0cnVlLCJhZGoiOnRydWUsImNyb3NzaGFpciI6dHJ1ZSwiY2hhcnRUeXBlIjoibGluZSIsImV4dGVuZGVkIjpmYWxzZSwibWFya2V0U2Vzc2lvb...
- Sat Mar 06, 2021 7:41 pm
- Forum: Investing - Theory, News & General
- Topic: Gold continues to soar!
- Replies: 565
- Views: 62725
Re: Gold continues to soar!
https://www.usmoneyreserve.com/blog/how-much-gold-is-in-the-world/ Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined. That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible source because its entire purpose is to sell the most gold to the most people at the highest price. So we already know objectivity is out the window. It would take a geologist to really go into the details. But I can give a brief overview. Gold miners have no reason at all to find more gold than they can mine in the near future. They like to find enough for about the next 5 years...
- Sat Mar 06, 2021 7:01 pm
- Forum: Investing - Theory, News & General
- Topic: Gold continues to soar!
- Replies: 565
- Views: 62725
Re: Gold continues to soar!
Living in Colorado, we bump into old or mothballed mines all the time while out hiking, fishing, biking, overlanding etc. One thing I've learned is that there is plenty of gold still in there, but the current prices do not support extraction. If the price goes up, or the technology/productivity improves, many of those mines will restart production. And the price will drop... https://www.usmoneyreserve.com/blog/how-much-gold-is-in-the-world/ Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined. That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible sour...
- Sat Mar 06, 2021 11:06 am
- Forum: Investing - Theory, News & General
- Topic: Gold continues to soar!
- Replies: 565
- Views: 62725
Re: Gold continues to soar!
Living in Colorado, we bump into old or mothballed mines all the time while out hiking, fishing, biking, overlanding etc. One thing I've learned is that there is plenty of gold still in there, but the current prices do not support extraction. If the price goes up, or the technology/productivity improves, many of those mines will restart production. And the price will drop... https://www.usmoneyreserve.com/blog/how-much-gold-is-in-the-world/ Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined. That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible sour...
- Thu Feb 25, 2021 9:14 am
- Forum: Investing - Theory, News & General
- Topic: Bonds: What Are They Doing? Are They Doing Things?? Let's Find Out!
- Replies: 2297
- Views: 256266
Re: Bonds in free fall
If you are dollar cost averaging or regularly investing, trying to catch a falling knife is a fantastically good idea. (Unless the knife falls for a decade or more.)JimmyJammy wrote: ↑Thu Feb 25, 2021 8:50 am Isn't there a trading / investing rule to never try to catch a "falling knife"? Isn't that what you're doing if you're buying bonds here?
- Sat Feb 20, 2021 10:42 pm
- Forum: Investing - Theory, News & General
- Topic: Bonds: What Are They Doing? Are They Doing Things?? Let's Find Out!
- Replies: 2297
- Views: 256266
Re: Bonds in free fall
I look pretty silly right now, buying ZROZ (the more extreme version of EDV) with every contribution in my 401K, and likely to continue through the year. But, I looked pretty smart selling ZROZ to buy small cap value in March 2020, when ZROZ was 40% above my cost basis and small cap value was down 50% on the year. Since then SCV doubled, so the fact that ZROZ is down 30% or so does not bother me. That said, I am not rebalancing into long term bonds, only out of them. Regular small purchases will on average give the ignorant investor (which includes literally all the investors on the planet) the lowest cost basis for this asset class. I like me some low cost basis. Highly volatile assets with no expected real return, such as long term bonds,...
- Sat Feb 20, 2021 9:47 pm
- Forum: Investing - Theory, News & General
- Topic: 10-year TIPS Note vs Nominal Treasury Note vs I-Bond
- Replies: 20
- Views: 2400
Re: 10-year TIPS Note vs Nominal Treasury Note vs I-Bond
Right they are both Treasury bonds. Duh. Brain fart.alluringreality wrote: ↑Thu Feb 18, 2021 8:01 amInterest payments from Treasury Inflation-Protected Securities (TIPS), and increases in the principal of TIPS, are subject to federal tax, but exempt from state and local income taxes.
https://www.treasurydirect.gov/indiv/re ... me%20taxes.
- Wed Feb 17, 2021 11:50 pm
- Forum: Investing - Theory, News & General
- Topic: 10-year TIPS Note vs Nominal Treasury Note vs I-Bond
- Replies: 20
- Views: 2400
Re: 10-year TIPS Note vs Nominal Treasury Note vs I-Bond
What would have been the after-tax difference for TIPS versus I-bonds? TIPS losing state and federal taxes every year, reducing compounding; I bonds suffering only federal taxes at the very end.
- Tue Feb 09, 2021 11:26 pm
- Forum: Investing - Theory, News & General
- Topic: PSA: gold
- Replies: 221
- Views: 33560
Re: PSA: gold
There are two problems with that analysis. First, you're assuming that an investor lump sum invested an amount in 1980 and never invested any additional funds, something that very few accumulators would do. The time weighted nominal return from 1980 through last month was 2.99%, but the money-weighted return for an investor who made equal monthly contributions to gold over the same period was nearly 3% higher. Also, such analyses are highly specific to the time period being analyzed. Using that same method, gold has had a 2.4% real return since 1990 and 6.57% real return since 2000 (beating both TSM and TBM quite handily). It's not time specific. In the decades since, gold has never traded outside of the inflation-adjusted price range it s...
- Tue Feb 09, 2021 3:55 pm
- Forum: Investing - Theory, News & General
- Topic: PSA: gold
- Replies: 221
- Views: 33560
Re: PSA: gold
There are two problems with that analysis. First, you're assuming that an investor lump sum invested an amount in 1980 and never invested any additional funds, something that very few accumulators would do. The time weighted nominal return from 1980 through last month was 2.99%, but the money-weighted return for an investor who made equal monthly contributions to gold over the same period was nearly 3% higher. Also, such analyses are highly specific to the time period being analyzed. Using that same method, gold has had a 2.4% real return since 1990 and 6.57% real return since 2000 (beating both TSM and TBM quite handily). It's not time specific. In the decades since, gold has never traded outside of the inflation-adjusted price range it s...
- Sun Feb 07, 2021 5:42 pm
- Forum: Investing - Theory, News & General
- Topic: International Stock
- Replies: 254
- Views: 16211
Re: International Stock
You can enter whatever start and end dates you wish. If you'd like to look at 2000 to 2010 and then 2010 to 2020 that's possible too. You can choose rolling periods. Choose your planned investment horizon and evaluate the correlation using frequent sampling. What are you saying exactly? Let's use Spain (EWP) and US (VFINX) stock markets again. For the ten years 2000-2009 their daily returns had an 0.72 correlation, which is high. Yet Spain returned 8.42% annualized, while the US returned -1.03% annualized. They were highly correlated yet moved in opposite directions, which is the definition of negatively correlated. https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=EWP+VFINX&startDate=01%2F01%2F2000&endDate=12%...
- Sun Feb 07, 2021 1:13 pm
- Forum: Investing - Theory, News & General
- Topic: International Stock
- Replies: 254
- Views: 16211
Re: International Stock
I'd like to clarify one important piece of misunderstanding on this topic - how to calculate correlations. This is critical to understanding the value of using correlations to gauge benefits of diversification. From Dan Ketchum, How to Calculate Correlation of Investment Returns (not good article - but simple language so everybody can follow). ‘Essentially, correlation gauges the relationship or lack thereof between the returns of two different investments. It's measured by a range of -1.0 to +1.0, where the latter indicates a perfect correlation, and the former indicates a perfect negative correlation. In a perfect correlation, two investments will always change value in unison; in a perfect negative correlation, they'll always change val...
- Mon Aug 17, 2020 10:18 pm
- Forum: Personal Finance (Not Investing)
- Topic: Discount vs. full-price realtor
- Replies: 126
- Views: 7438
Re: Discount vs. full-price realtor
I bought my second house about a month ago. We used a full price agent which for whatever reason we decided on after going to around 100 houses. Gotta be honest, he was fairly worthless. Nice guy, but he made no effort to help negotiate a lower price at all, and why would he? As a previous owner of an owner/landlord occupied duplex home I was easily more knowledgeable of basic problems to look for and various home accouterments and what they were there for. With about an hour on a spreadsheet with comparable sales I easily made a basic price model that was vastly superior to anything he could produce. He was useful at times to the extent that he had more knowledge of the closing process, but that is the part a discount agent would handle. T...
- Thu May 07, 2020 2:53 pm
- Forum: Investing - Theory, News & General
- Topic: Small Cap Value heads Rejoice !!!
- Replies: 5577
- Views: 619154
- Fri May 01, 2020 10:51 am
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Not really. Unless you are rebalancing. You cannot expect positive results from this. Because sometimes you'll buy cheap, sometimes you'll buy expensive and average case they cancel each other. And that was more than full cycle. Cycle usually ends higher than where it started. Your example was less realistic than mine. No this is a real thing. It is the inverse of sequence of returns risk which new retirees need to deal with. Positive results are not guaranteed, but they are more likely than negative results. Positive results are not guaranteed indeed, they are close to 50/50 actually :). You are making some serious mental gymnastics to say that this boosts returns, but over the long-term it should not unless you are contributing to the un...
- Thu Apr 30, 2020 11:02 am
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
it's path dependent. it worked in historical sequence. but it may not work in future sequence. if it first goes down and you buy cheap, and then it goes back up, then it works. but if it first goes up and then down, then you do worse with this method. you cannot know which of these will happen. It is path dependent, but regular volatility contributes to the effect. 71% of historic periods seems like a reasonable odds to me. It is an additional margin of safety that contributors have (70% of the time), in addition to the other ones commonly kicked around on here. I said it a lot already but: that implies a retiree would have been harmed by the effect about 70% of the time, relative to the S&P500, and hence should not be 100% invested in...
- Thu Apr 30, 2020 10:51 am
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Unless the volatility is deeper on the downside as compared to the normalized trend then it doesn’t matter if your DCA buys more shares when under trend and less when over, your average value is equal. Seriously, try it in Excel. Admittedly the effect in my illustration is tiny. I'm sure Bernstein's historic difference was helped along by the SCV tendency to crash and burn before recovering, as we have seen this year. Or else to simply go nowhere for long periods of time. Baseline *1.3, /1.3 Price Shares Price Shares 100.0 10.0 76.9 13.0 100.0 10.0 130.0 7.7 100.0 10.0 76.9 13.0 100.0 10.0 130.0 7.7 100.0 10.0 76.9 13.0 100.0 10.0 130.0 7.7 100.0 10.0 76.9 13.0 100.0 10.0 130.0 7.7 100.0 10.0 76.9 13.0 100.0 10.0 130.0 7.7 Final Number of ...
- Thu Apr 30, 2020 12:53 am
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Whether in accumulation or decumulation, I think volatility detracts from returns. I appreciate the potential of rebalancing with new money going into the worst performing investment during accumulation, but I don’t know that that overrides the drag caused by volatility. With volatility, there is simply less money invested to make the comeback after a down period. Dave So first, I'm one of those people who disagrees with you on volatility drag, saying I only care about CAGR in the first place, so volatility drag has already been baked in to my assumptions. But OT. Second, with regular investing of new money, there is more money invested during a drawdown to make a comeback. That's why it works. Assuming of course that the two options do ha...
- Thu Apr 30, 2020 12:46 am
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Since math and reason have failed, appeal to authority is my most logical recourse. In page 19 of "Ages of the Investor: A Critical Look at Lifecycle Investing" https://www.bogleheads.org/wiki/William_Bernstein wrote: " [for 30 year rolling periods investing $100 'real' per month] Finally, Figure 9 eliminates all of the small-value advantage by equalizing the returns of the small value and S&P500 indexes, again, by subtracting a constant amount from each monthly return. Amazingly, even with a zero small-value advantage, the small-value strategy beats the S&P500 strategy 71% of the time. The reason, once again, is the contradictory nature of both Nalebuff/Ayers and small-value strategies: higher volatility than a conv...
- Wed Apr 29, 2020 8:38 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Since math and reason have failed, appeal to authority is my most logical recourse. In page 19 of "Ages of the Investor: A Critical Look at Lifecycle Investing" https://www.bogleheads.org/wiki/William_Bernstein wrote: " [for 30 year rolling periods investing $100 'real' per month] Finally, Figure 9 eliminates all of the small-value advantage by equalizing the returns of the small value and S&P500 indexes, again, by subtracting a constant amount from each monthly return. Amazingly, even with a zero small-value advantage, the small-value strategy beats the S&P500 strategy 71% of the time. The reason, once again, is the contradictory nature of both Nalebuff/Ayers and small-value strategies: higher volatility than a conve...
- Wed Apr 29, 2020 8:09 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Agreed. However, please be advised that if we agree volatility is bad for a retiree, then we secretly agree to agree.
And if you see page 19 of Ages of the Investor you'll see other people agree with me
- Wed Apr 29, 2020 7:24 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
You see, it's path dependent. Yes, it is path dependent. You need to assume volatility cuts both ways and invest for a full cycle. Usually SCV has greater losses in downturns so that is good. And it doesn't guarantee an outcome, but it is another thing improving my odds in the event that factor investing should turn out to be bunk with lower returns during my time frame. Not really. Unless you are rebalancing. You cannot expect positive results from this. Because sometimes you'll buy cheap, sometimes you'll buy expensive and average case they cancel each other. And that was more than full cycle. Cycle usually ends higher than where it started. Your example was less realistic than mine. No this is a real thing. It is the inverse of sequence...
- Wed Apr 29, 2020 6:36 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
You see, it's path dependent. Yes, it is path dependent. You need to assume volatility cuts both ways and invest for a full cycle. Usually SCV has greater losses in downturns so that is good. And it doesn't guarantee an outcome, but it is another thing improving my odds in the event that factor investing should turn out to be bunk with lower returns during my time frame. Not really. Unless you are rebalancing. You cannot expect positive results from this. Because sometimes you'll buy cheap, sometimes you'll buy expensive and average case they cancel each other. And that was more than full cycle. Cycle usually ends higher than where it started. Your example was less realistic than mine. No this is a real thing. It is the inverse of sequence...
- Wed Apr 29, 2020 6:28 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
Yes, it is path dependent. You need to assume volatility cuts both ways and invest for a full cycle. Usually SCV has greater losses in downturns so that is good. And it doesn't guarantee an outcome, but it is another thing improving my odds in the event that factor investing should turn out to be bunk with lower returns during my time frame.
- Wed Apr 29, 2020 6:23 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
it's rebalancing with new money. You buy each asset to its target with new money. You would get the same bonus if you didn't have new money but sold and bought. Rebalancing bonus relies on mean-reversion. (both assets will revert to the mean in the long term) Lets separate them out to make it more clear. we'll make the high price higher this time. Every year, Investor A buys $100 of Fund A as follows: Year 1: Fund A costs $20/share, resulting in 5 shares bought Year 2: Fund A costs $33.33/share, resulting in 3 shares bought Year 3: Fund A costs $10/share, resulting in 10 shares bought Year 4: Fund A costs $20/share, resulting in 5 shares bought Result: After 4 years, Investor A has 23 shares worth $460. bought Every year, Investor B buys $...
- Wed Apr 29, 2020 6:13 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
is this because rebalancing between TSM and SCV? Otherwise, i don't get how this would happen, volatility also implies sometimes you buy expensive. Nope. The same dollar buys proportionally more shares when things are cheap than when they are expensive, so SCV in isolation does it. Take TSM Fund A and SCV Fund B. Year 1: Fund A costs $20/share and Fund B also costs $20 per share. You buy $100 of each. You have 5 of A and 5 of B for this year Year 2: Fund A costs $25/share and Fund B costs $33.33 per share. You buy $100 of each. You now have 4 of A and 3 of B for this year. Year 3: Fund A costs $10/share and Fund B costs $5 per share. You buy $100 of each. You now have 10 of A and 20 of B for this year. Year 4: Both return to their starting...
- Wed Apr 29, 2020 5:56 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
There were two "aha" moments for me. One was when I was learning how to backtest in Portfolio Visualizer and after playing around I realized that by making regular new investments I would get better than market performance by investing in volatile small cap value stocks than by investing in a total market fund, even if they had the exact same annualized return over the period. Further, I realized that this was a unique advantage for me because just starting off I had very little money at risk, whereas presumably nearly every other invested dollar is owned by a person or institution with a lot more money at play and who would just receive the extra volatility on their copious existing money with little expectation of being compens...
- Wed Apr 29, 2020 5:45 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
There were two "aha" moments for me. One was when I was learning how to backtest in Portfolio Visualizer and after playing around I realized that by making regular new investments I would get better than market performance by investing in volatile small cap value stocks than by investing in a total market fund, even if they had the exact same annualized return over the period. Further, I realized that this was a unique advantage for me because just starting off I had very little money at risk, whereas presumably nearly every other invested dollar is owned by a person or institution with a lot more money at play and who would just receive the extra volatility on their copious existing money with little expectation of being compens...
- Wed Apr 29, 2020 5:23 pm
- Forum: Investing - Theory, News & General
- Topic: The Bottom Line on Factor Investing
- Replies: 328
- Views: 29260
Re: The Bottom Line on Factor Investing
There were two "aha" moments for me. One was when I was learning how to backtest in Portfolio Visualizer and after playing around I realized that by making regular new investments I would get better than market performance by investing in volatile small cap value stocks than by investing in a total market fund, even if they had the exact same annualized return over the period. Further, I realized that this was a unique advantage for me because just starting off I had very little money at risk, whereas presumably nearly every other invested dollar is owned by a person or institution with a lot more money at play and who would just receive the extra volatility on their copious existing money with little expectation of being compensa...
- Tue Apr 21, 2020 9:31 pm
- Forum: Investing - Theory, News & General
- Topic: Are Japan like "lost decades" possible in US and world stock market?
- Replies: 82
- Views: 9648
Re: Are Japan like "lost decades" possible in US and world stock market?
Real returns since 2000 have only been 2.8% annualized, less than half their historic average. We expect 20 year real returns to be 1/CAPE10 (I recall CAPE10 actually has its greatest predictive power for real returns 18 years later). 1/40= 2.5% so about right on target right? 8-) Yes, CAPE (and it's inverse, CAEP) has had the highest correlation with real returns of the subsequent 18 years. In this instance, that was 2000-2017, when real returns averaged 3.54%, about 1% higher than predicted by 1/CAPE10 at the beginning of the year 2000. That was pretty close. https://www.kitces.com/wp-content/uploads/2014/07/Correlation-Of-CAEP-To-Nominal-And-Real-Returns-At-Varying-Time-Horizons.png https://www.kitces.com/blog/shiller-cape-market-valuat...
- Tue Apr 21, 2020 9:24 pm
- Forum: Investing - Theory, News & General
- Topic: U.S. Treasury Inflation Protected Securities (TIPS) ETF
- Replies: 78
- Views: 8400
Re: U.S. Treasury Inflation Protected Securities (TIPS) ETF
I feel silly to say that I was wrong in looking back only as far as 2013 (that's the earliest date for some of the TIPS ETFs on portfoliovisualizer as noted on the original post). When using asset class function, I can see that TIPS have done remarkably well over the last 20 years. For example, with starting balance of 10K, cash only final balance is $13,165 (Unadjusted) but inflation adjusted value is $8,856. On the other hand TIPS fund for the same period returned a final balance of $25,193 with inflated adjusted value of $16,946. I feel a lot better about this class of investment since my initial impression was it was a money losing class (which it was but only 2013 to current). https://www.portfoliovisualizer.com/backtest-asset-class-a...
- Tue Apr 21, 2020 7:35 pm
- Forum: Investing - Theory, News & General
- Topic: For those concerned about International Stocks...
- Replies: 236
- Views: 31681
Re: For those concerned about International Stocks...
between 1998 and 2013, the difference in CAGR is 25% vs 17%. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1998&firstMonth=1&endYear=2013&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=100&symbol2=VXUS&allocation2_2=100 it's not just whether one performs better th...
- Tue Apr 21, 2020 2:01 pm
- Forum: Investing - Theory, News & General
- Topic: Are Japan like "lost decades" possible in US and world stock market?
- Replies: 82
- Views: 9648
Re: Are Japan like "lost decades" possible in US and world stock market?
We expect 20 year real returns to be 1/CAPE10 (I recall CAPE10 actually has its greatest predictive power for real returns 18 years later). 1/40= 2.5% so about right on target right?willthrill81 wrote: ↑Tue Apr 21, 2020 9:59 am Real returns since 2000 have only been 2.8% annualized, less than half their historic average.
- Wed Apr 15, 2020 4:22 pm
- Forum: Investing - Theory, News & General
- Topic: whos' just about had it w/ SCV ?
- Replies: 277
- Views: 23695
Re: whos' just about had it w/ SCV ?
The only reasons I'm not shoveling money into the SCV hole faster is that 1) I don't have enough and 2) my asset allocation doesn't say to rebalance right now (although it said so twice in March).
- Wed Apr 15, 2020 3:25 pm
- Forum: Investing - Theory, News & General
- Topic: Harry Browne Permanent Portfolio Discussion (Cont'd)
- Replies: 876
- Views: 211206
Re: Harry Browne Permanent Portfolio Discussion (Cont'd)
Resurrecting this thread .......... I was reading up this weekend on how the permanent portfolio did recently -- not surprisingly, it has held up extremely well. I was thinking about a variation on the PP using NTSX (to sort of replace the stock component) and SWAN (to sort of replace the LTT component). (And VTIP instead of cash.) In portfolio visualizer this did extremely well since beginning of 2019: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalance...
- Tue Apr 14, 2020 6:33 pm
- Forum: Personal Investments
- Topic: International Growth (VWIGX) Outperformance
- Replies: 28
- Views: 3399
Re: International Growth (VWIGX) Outperformance
I split DW's 401k 50/50 between VWIGX and Primecap (VPMAX). I recall that VWIGX was the only international fund, and the only market-like US fund was S&P500, so I was like "might as well go all in." VWIGX has definitely been rocking the house in the 1.5 years since then, but we will shovel as much money as possible into both regardless and see how things come out.
- Mon Apr 13, 2020 4:28 pm
- Forum: Investing - Theory, News & General
- Topic: What in the world is propping up this market?
- Replies: 214
- Views: 25338
- Mon Apr 13, 2020 4:28 pm
- Forum: Investing - Theory, News & General
- Topic: Why not go EE bonds (instead of bond funds)?
- Replies: 284
- Views: 37132
Re: Why not go EE bonds (instead of bond funds)?
I don't like to present bad math, that's why I showed this: Here is a back test of Vanguard Long Term Treasury Admiral from December 1 2008 to November 30 2018 (ten years). The starting 2008 treasury yields were 3.22% for 30yr, 3.51% for 20 yr, 2.72% for 10yr. The ending 2018 treasury yields were 3.30% for 30yr, 3.19% for 20yr, 3.01% for 10yr. The fund has a duration of around 18 now, but was a little lower through much of the period. The Vanguard fund returned 4.54% after expenses over that time, which is over 1% greater than the underlying bond yields at the start of the period. Assuming this affect becomes stronger at lower yields we could very well see a 1.5% or even 2% improvement for another 10 year period. But even if we assume a st...
- Sun Apr 12, 2020 9:37 pm
- Forum: Investing - Theory, News & General
- Topic: Why not go EE bonds (instead of bond funds)?
- Replies: 284
- Views: 37132
Re: Why not go EE bonds (instead of bond funds)?
As to backtesting in general: well, anything over the past half-century is skewed in favor of long Treasuries because of declining yields, now near zero with little room to provide further tailwinds. https://image.cnbcfm.com/api/v1/image/106413802-15837750747902020030810yrfrom1900.png?v=1583775102&w=678&h=381 All of my emphasis has been on the starting years 1929 and 2000 because those were most favorable for EE bonds relative to a balanced allocation, with passing investigation to the others which were not controlling. A 20+ plus year fund which is most nearly 20 years in duration would have a larger effect. Especially if we consider yield climbing above 3% or ending below 0.5% i t seems to quite plausible to end with 3.5%+ return...
- Sun Apr 12, 2020 5:56 pm
- Forum: Investing - Theory, News & General
- Topic: Why not go EE bonds (instead of bond funds)?
- Replies: 284
- Views: 37132
Re: Why not go EE bonds (instead of bond funds)?
And yes for a long term bond fund to beat EE rates definitely need to rise and then fall, or else end much lower than they are now. However, an EE bond owner would most likely not buy into a long term treasury fund in the situations where the fund would be best, because the yield would not cross the action threshold. So you need a specific scenario to beat EE Bonds, including inaction by EE Bond holders... No, I mean look at the table noobvestor posted earlier. In nearly all cases where a long term bond fund investor would come out ahead, an EE bond holder would be both worse off by switching mid course to a long term fund, and yet also still come out behind the long term fund investor after 20 years. Rates do need to get anywhere close to...
- Sun Apr 12, 2020 5:49 pm
- Forum: Investing - Theory, News & General
- Topic: Why not go EE bonds (instead of bond funds)?
- Replies: 284
- Views: 37132
Re: Why not go EE bonds (instead of bond funds)?
Take a 90% S&P500 10% bond portfolio with a 4% withdrawal rate starting in March 2000. Below are the results for short, intermediate, and long treasury bonds ending last month. For my two cents - I do not understand this comparison... I'm not comparing EE Bonds vs. stocks - or my overall portfolio... Whether my AA is 90/10, 80/20, 60/40, or any other combination is - in my mind - irrelevant - to the discussion... To me the question is what do I hold for my bonds . I'm not "adding" EE... I'm shifting my existing bond makeup to include EE Bonds. But my overall bond allocation remains unchanged... Personally, I have 35% bonds (heading towards 40% - but that's neither here/there)... What should I use to make up that 35%? That's w...
- Sun Apr 12, 2020 5:43 pm
- Forum: Investing - Theory, News & General
- Topic: Why not go EE bonds (instead of bond funds)?
- Replies: 284
- Views: 37132
Re: Why not go EE bonds (instead of bond funds)?
I note though that vineviz's calcaulation was for a 10+ year bond fund would have a shorter duration. I believe the odds of beating EE Bonds are much higher on the shorter end of the spectrum, which is why Vineviz started there. They could weigh in and confirm or dispute this - I don't want to speak for them - but that's what I assumed, at least, and where models look more promising, though 'promising' is still a relative term here. As I pointed out, EE Bonds bought on either side of their start date beat Treasuries in that model. No, that is not correct. For shorter term bonds your arguments are correct, and an EE bond investor could easily make the switch if they looked to be best. However, the longest term bonds have the greatest chance...