Search found 3192 matches

by stlutz
Mon Aug 29, 2016 7:36 pm
Forum: Investing - Help with Personal Investments
Topic: Low Volatility Equity ETFs
Replies: 2
Views: 241

Re: Low Volatility Equity ETFs

You should expect your low vol funds to underperform most of the time. Their performance over the past year has been highly unusual. If the overall market goes up 20% over the next year, I'd expect your low vol funds to go up less than that. But you should always expect that. Generally it's better t...
by stlutz
Mon Aug 29, 2016 7:19 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Article on "Under the radar tax benefit for muni bond funds"
Replies: 24
Views: 2996

Re: Allan Roth Article on "Under the radar tax benefit for muni bond funds"

#Cruncher objected to my claim that this was not that big of a deal. I stand by my conclusion, as it was based on the more practical question of what am I supposed to do with this information? To a long-term holder of this fund, I indirectly bought the bonds at the same time Vanguard did, so there i...
by stlutz
Sun Aug 28, 2016 10:32 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with munis in taxable after we retire?
Replies: 7
Views: 629

Re: What to do with munis in taxable after we retire?

One point I would make is is that this general question shows one of the advantages of holding munis via a fund vs. going the individual bond route. If your tax rates changes to make munis no longer advantageous, you can switch to taxable bonds with the click of a mouse when you hold via a fund. Whi...
by stlutz
Sun Aug 28, 2016 5:48 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Article on "Under the radar tax benefit for muni bond funds"
Replies: 24
Views: 2996

Re: Allan Roth Article on "Under the radar tax benefit for muni bond funds"

Here is an article stating that bond funds do amortize premium, so that leaves some interesting questions about the accounting that goes on within a bond fund. A fund will account for it in the same way that you would if you purchased the bond yourself. If you buy a premium bond yourself, your taxe...
by stlutz
Sun Aug 28, 2016 5:35 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

So for certain people, it seems unthinkable that all the hard work researching, picking stocks, picking funds, and trying to buy cheaper assets opportunistically doesn't automatically pay off. By golly, I worked hard for those extra returns. If it comes clear that I wasn't particularly skilled as a...
by stlutz
Sun Aug 28, 2016 5:24 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

All this is pretty confusing to me as a new investor, but still interesting to read. What caught my attention is all the talk on decreasing value premiums. I realize a lot is speculation and not set in stone, but for those of us starting out, and now have a portfolio approaching 100k, is the 75-25 ...
by stlutz
Sun Aug 28, 2016 5:19 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

Personally, I don't find the idea of "risk premiums" all that compelling to begin with, too many "anomalies" for that to be the explanation of returns among stocks. The performance in recent years just further points it out. Lots of interesting alternative stories/explanations o...
by stlutz
Sun Aug 28, 2016 9:53 am
Forum: Investing - Help with Personal Investments
Topic: Convert a lazy buy-and-hold portfolio to a lazy income-oriented one
Replies: 9
Views: 1048

Re: Convert a lazy buy-and-hold portfolio to a lazy income-oriented one

With equities, there is no such thing as "principal". Suppose a company trades at $100 and makes a profit of $5. It can: a) pay a $5 dividend b) Buy back $5 worth of stock and drive the stock price up to $105. c) Reinvest in the business so it makes $10 next year. (a) is straightforward en...
by stlutz
Sun Aug 28, 2016 9:22 am
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Option A or Option B?
Replies: 22
Views: 1142

Re: Asset Allocation Option A or Option B?

I'm afraid I have to disagree with Taylor on the use of the particular TR funds you have in your 401K plans. The ERs are just too high relative to other much more attractive options. Since it doesn't look like you are holding your Roth IRAs at Vanguard, I probably wouldn't worry about trying to use ...
by stlutz
Sat Aug 27, 2016 8:15 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Article on "Under the radar tax benefit for muni bond funds"
Replies: 24
Views: 2996

Re: Allan Roth Article on "Under the radar tax benefit for muni bond funds"

One additional note: For a bond fund that holds onto its bonds for a long time like VG IT TE does, it is *normal* for the distribution yield to be higher than the SEC Yield if there is an upward-sloping yield curve. Suppose the fund is rolling a 10 year ladder (roughly). The SEC Yield is based on th...
by stlutz
Sat Aug 27, 2016 8:09 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Article on "Under the radar tax benefit for muni bond funds"
Replies: 24
Views: 2996

Re: Allan Roth Article on "Under the radar tax benefit for muni bond funds"

This article is making it sound like there is a loophole when there is in fact none. WARNING! Minor math oversimplifications about to follow! Let's start by looking at this from the perspective of the individual investor. A 10 year muni bond is issued at par ($100) and it pays interest of $3 per yea...
by stlutz
Sat Aug 27, 2016 7:54 am
Forum: Investing - Theory, News & General
Topic: Is Vanguard's reported Yield-to-maturity a Yield-to-worst?
Replies: 2
Views: 378

Re: Is Vanguard's reported Yield-to-maturity a Yield-to-worst?

My understanding is "yes". I know iShares says so explicitly and the reported yields are in line with what VG reports for funds that are highly similar.

The SEC Yield calculation (in the US) requires YTW as the basis.
by stlutz
Sat Aug 27, 2016 12:00 am
Forum: Investing - Theory, News & General
Topic: Adding Inflation Protection to a Portfolio
Replies: 14
Views: 1460

Re: Adding Inflation Protection to a Portfolio

No interest rate risk if held to maturity Most of what you have is on track except for this statement. Suppose you bought a 30 year TIPs yielding .64% today. A year from now, 30 year TIPS are yielding 2.64%. If you had waited a little while to buy, you could have gotten a much higher rate. That is ...
by stlutz
Wed Aug 24, 2016 11:49 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

What do you think? I may still be missing something. backpacker: I think you are allowing Larry to lead you down too many ratholes. :) I'd suggest that readers go back and re-read the original post, which was still the best one in this entire thread, IMO. Several comments on this which mostly repea...
by stlutz
Wed Aug 24, 2016 12:36 am
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

I'm claiming that your value spread wouldn't tell you if the market switched to charging a uniform price for capital, i.e wouldn't tell you if the value premium went away. I thought that was the point of talking about the value spread. It was suppose to be a way of showing people that this hasn't h...
by stlutz
Tue Aug 23, 2016 7:29 pm
Forum: Investing - Help with Personal Investments
Topic: TIPs, I've read the posts, still confused
Replies: 20
Views: 1049

Re: TIPs, I've read the posts, still confused

It's not an obvious choice. When it comes to bonds, an equity heavy investor cares most about what those bonds do when stocks go down. 2008 was not encouraging in this regard. However, it's a big jump to go from that to saying that TIPS necessarily do a bad job of balancing out equity risks. I can c...
by stlutz
Tue Aug 23, 2016 7:22 pm
Forum: Investing - Theory, News & General
Topic: UK TIPS track record - what can we learn?
Replies: 18
Views: 988

Re: UK TIPS track record - what can we learn?

During the high inflation years of the 1970s, a nominal bond portfolio of intermediate duration didn't do great, but didn't do too bad, either. Most of the scary charts illustrate the synthetic returns of a constant-maturity long-term bond. So, one has to be careful, when interpreting charts. True,...
by stlutz
Tue Aug 23, 2016 7:17 pm
Forum: Investing - Help with Personal Investments
Topic: Which Bond Fund to Choose
Replies: 7
Views: 909

Re: Which Bond Fund to Choose

2 questions:

--Are there *any* funds in your 401K with low expense ratios?
--Do you have any other investments outside of your 401K such as an IRA?

If you, say, had a low cost stock fund in your 401, it might make sense to just hold bonds in your IRA. In short, look at your options as a whole.
by stlutz
Tue Aug 23, 2016 7:13 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

I think backpacker and Larry are talking past one another, hence the frustration. As a completely objective observer (yes, you are supposed to laugh at that :happy ), let me attempt to mediate. I don't think Larry disagrees with backpacker's math at all. I think Larry's argument is simply that backp...
by stlutz
Mon Aug 22, 2016 11:37 pm
Forum: Investing - Theory, News & General
Topic: New sector classification for REITs
Replies: 15
Views: 1310

Re: New sector classification for REITs

You're assuming the total market funds already hold real estate investment trusts proportional to their market share. Is this a valid assumption??? Yes, that is correct. REITs are part of most total market indices. If an index/fund did happen to exclude REITs before, it would still do so after the ...
by stlutz
Mon Aug 22, 2016 10:47 pm
Forum: Investing - Theory, News & General
Topic: New sector classification for REITs
Replies: 15
Views: 1310

Re: New sector classification for REITs

The market impact will be negligible. Holders of the XLF ETF (the largest financials sector fund) will receive a spin-off of the new REIT sector fund. So, no underlying shares actually get transacted--you just now have 2 ETFs instead of one. Now, what investors decide to do with their new shares is ...
by stlutz
Mon Aug 22, 2016 10:41 pm
Forum: Personal Consumer Issues
Topic: Health Insurance Puzzle: how should I understand this?
Replies: 30
Views: 2362

Re: Health Insurance Puzzle: how should I understand this?

You really do need to understand what the laws are regarding balance billing in your state. (i.e. google "balance billing [your state]"). That way you at least know where you stand legally before trying to negotiate. My state does not allow balance billing in situations like yours. Provide...
by stlutz
Sun Aug 21, 2016 3:40 pm
Forum: Investing - Theory, News & General
Topic: Vanguard seeks SEC relief for US active ETFs:
Replies: 12
Views: 1132

Re: Vanguard seeks SEC relief for US active ETFs:

They filed to offer standalone active ETFs a couple of years back. Still have yet to offer any. Until something actually happens, I'd consider it vaporware.
by stlutz
Sun Aug 21, 2016 12:21 pm
Forum: Investing - Theory, News & General
Topic: Question about bond fund duration and current SEC yield
Replies: 2
Views: 245

Re: Question about bond fund duration and current SEC yield

The exact return will depend on factors like the shape of the yield curve, the call provisions of the underlying bonds, and how much interest rates change and when. The SEC Yield is the number around which the actual return will fall, but it's not a mathematical certainty. It's more accurate to say ...
by stlutz
Sun Aug 21, 2016 10:14 am
Forum: Investing - Help with Personal Investments
Topic: Allocation when diversifying custodian/brokerage
Replies: 8
Views: 506

Re: Allocation when diversifying custodian/brokerage

Hi stlutz, When you were adding actively to both taxable accounts did you split the money evenly? I added the second account not for the purposes of custodian diversification (not really an advocate of it) but because I got mad at VG's poor customer service and decided I didn't want to add any more...
by stlutz
Sat Aug 20, 2016 11:48 pm
Forum: Investing - Help with Personal Investments
Topic: Allocation when diversifying custodian/brokerage
Replies: 8
Views: 506

Re: Allocation when diversifying custodian/brokerage

I do not try to maintain the same allocation in both of my taxable accounts, mainly because I've stopped adding any new funds to my Vanguard account.
by stlutz
Sat Aug 20, 2016 10:43 am
Forum: Personal Consumer Issues
Topic: Do you wash your car yourself, or have it done?
Replies: 96
Views: 5367

Re: Do you wash your car yourself, or have it done?

I wash my bicycles regularly. My car gets washed when it rains.

Priorities.
by stlutz
Sat Aug 20, 2016 10:35 am
Forum: Personal Finance (Not Investing)
Topic: Large amount of home equity - tempting to cash out and FIRE?
Replies: 57
Views: 4136

Re: Large amount of home equity - tempting to cash out and FIRE?

If what you really want is to be in a sunny place with good schools where you don't have a long commute and it is mostly populated by rich liberals, you are already in your dream location. Why change? A "freedom opportunity" is something you would pursue if you were looking for something d...
by stlutz
Sat Aug 20, 2016 12:32 am
Forum: Investing - Theory, News & General
Topic: How to create a bond proxy?
Replies: 11
Views: 617

Re: How to create a bond proxy?

Thank you all for the replies. I have been thinking of this puzzle for almost a week now and somehow thought there's a mathematical way I can create synthetic equivalent. Now I am convinced there is no easy way to do that other than to employ some kind of bond strategies to match maturity,duration,...
by stlutz
Sat Aug 20, 2016 12:23 am
Forum: Forum Issues and Administration
Topic: Improving the Bogleheads forum
Replies: 86
Views: 5919

Re: Improving the Bogleheads forum

The best way to improve the forum is simply to improve the quality of one's own posts. Good posts are why I come here and why many google searches on investing topics will list BH posts high up in the search rankings.
by stlutz
Sat Aug 20, 2016 12:13 am
Forum: Investing - Theory, News & General
Topic: an in depth look at the low volatility factor
Replies: 9
Views: 860

Re: an in depth look at the low volatility factor

Should an investor be concerned that low vol will likely experience greater losses in a down market? Or is it just a reduced upside? I'm not Larry, but I would suggest backing away from the market-timing question (is XXX group of stocks going to drop in the near future?) and look at your question f...
by stlutz
Fri Aug 19, 2016 7:43 pm
Forum: Investing - Help with Personal Investments
Topic: Why did VBR move to various tracking indices
Replies: 18
Views: 1353

Re: Why did VBR move to various tracking indices

There is also the "crappy index" theory. As I recall, the Russell Small-Cap Index was relatively easy for managers to beat. There were supposedly flaws in the index construction. I think Larry Swedroe has posted on this. So I guess if what you are trying to do doesn't work, you can also b...
by stlutz
Fri Aug 19, 2016 7:32 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

A few things which this thread highlights that I'd like to point out: --From the perspective of stock picking, "risk" vs "behavioral" explanations of historical anomalies are a distinction without a difference. In political economics, the efficient market and behavioral schools h...
by stlutz
Fri Aug 19, 2016 6:46 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

You can also see that the Value premium is smaller for Large Stocks than for Small Stocks. From what I have been reading, it seems that the Value premium for Small Stocks is unchanged. Not really. In the smallcap space, much of the "value premium" is really a "growth penalty", a...
by stlutz
Fri Aug 19, 2016 6:38 pm
Forum: Investing - Help with Personal Investments
Topic: Why did VBR move to various tracking indices
Replies: 18
Views: 1353

Re: Why did VBR move to various tracking indices

what I am discovering is that you need the proper vehicles to capture the premiums for the various factors. I would argue that what you've discovered is that there is a lot more idiosyncratic risk in factor investing than its proponents are willing to admit. If a strategy that has you investing in ...
by stlutz
Fri Aug 19, 2016 6:31 pm
Forum: Investing - Help with Personal Investments
Topic: Why did VBR move to various tracking indices
Replies: 18
Views: 1353

Re: Why did VBR move to various tracking indices

When I compare SLYV and VBR, SLYV outperformed VBR by 0.6% over the last 10 years, while the incremental cost of SLYV is 0.06% over VBR. SLYV changed indexes over that time span as well. On what basis would I have known 10 years ago which would be the best especially when I didn't know that they we...
by stlutz
Thu Aug 18, 2016 11:51 pm
Forum: Investing - Help with Personal Investments
Topic: Mid-Cap Value vs. Large Value with Ishares
Replies: 2
Views: 350

Re: Mid-Cap Value vs. Large Value with Ishares

IUSV is an all-cap value portfolio.
by stlutz
Wed Aug 17, 2016 9:18 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 207
Views: 9295

Re: Better growth? Or on how the value premium ends

I think this exchange is why I've become more skeptical of tilts of various types over this time. Backpacker posits a very legitimate and believable "story" as to how the value premium could go away and Larry replies with the same comments he makes in every thread. Essentially what we get ...
by stlutz
Wed Aug 17, 2016 9:01 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me choose a non-municipal bond fund for my taxable account
Replies: 26
Views: 1261

Re: Please help me choose a non-municipal bond fund for my taxable account

In taxable I would go with IT Gov't Bond. It is almost entirely treasuries and distributes less in the way if capital gains than IT Treasury because it has lower turnover.
by stlutz
Tue Aug 16, 2016 8:31 pm
Forum: Investing - Help with Personal Investments
Topic: Why did VBR move to various tracking indices
Replies: 18
Views: 1353

Re: Why did VBR move to various tracking indices

They moved from S&P over an index licensing dispute and then moved from MSCI due to costs. However, with each switch they did make a good argument that they were switching to te hnically superior indexes..
by stlutz
Tue Aug 16, 2016 8:49 am
Forum: Personal Consumer Issues
Topic: Editing shortcut emacs-like keys. Do u use them?
Replies: 26
Views: 1214

Re: Editing shortcut emacs-like keys. Do u use them?

They are replacements for browser menu commands. Firefox still tells you what the equivalent keystroke command is when you select drop downs. For example, Edit->Select All = Ctrl A.

I still use them a lot, but mostly in Office apps.
by stlutz
Mon Aug 15, 2016 9:46 pm
Forum: Investing - Help with Personal Investments
Topic: Comparison between various small cap value funds
Replies: 8
Views: 617

Re: Comparison between various small cap value funds

This site provides good comparisons of all of the ETF options in terms of fees, performance, strategy, tracking error etc.

http://www.etf.com/equity_u_s_small_cap_value
by stlutz
Mon Aug 15, 2016 9:40 pm
Forum: Investing - Help with Personal Investments
Topic: VTSAX Vs. FSTVX - Capital Gains
Replies: 5
Views: 608

Re: VTSAX Vs. FSTVX - Capital Gains

Vanguard has the ETF share class.

In taxable at Fidelity I would probably prefer using ITOT (the iShares Total Market ETF).
by stlutz
Sat Aug 13, 2016 9:46 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8315

Re: Bonds in Taxable

I have been one who has been objecting to the "bonds belong only in tax advantaged" mantra for a number of years now. But, there are good points that it's not always clear cut the other direction either. I would propose that our "default" position on this board should probably be...
by stlutz
Sat Aug 13, 2016 9:41 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 146
Views: 8315

Re: Bonds in Taxable

Is the 1.8% of yield representative of a stock fund for each and every year? I am not an expert but it sounds awfully high? Over the past 15 years the yield on VTSAX has varied between 1.1% and 2.9%. So, yes, 1.8% is pretty representative. The yield on international equity funds tends to be higher.
by stlutz
Fri Aug 12, 2016 7:45 pm
Forum: Investing - Theory, News & General
Topic: Bond Risk..Total Bond vs IT Treasury
Replies: 5
Views: 639

Re: Bond Risk..Total Bond vs IT Treasury

Two notes: --"Duration" is key component of bond volatility. Bonds that mature is far out years will be more volatile than ones that mature (or will be called) in next couple. The Total Bond fund you are looking at has a duration of 5.2 while the IT Treasury fund has a duration of 6.5. --E...

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