Search found 2169 matches

by patrick013
Thu May 24, 2018 5:09 pm
Forum: Investing - Theory, News & General
Topic: Bogle featured in Barrons cover story
Replies: 38
Views: 3353

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: 2437

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: 2433

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: 2433

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: 2433

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: 2433

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: 2437

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: 2437

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: 2433

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: 2437

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: 2437

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: 674

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: 674

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: 413

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: 1382

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: 4460

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...
by patrick013
Tue May 15, 2018 3:15 pm
Forum: Investing - Theory, News & General
Topic: Treasury term premium estimate: negative in most of 2017, now 2018 too (NY Fed Adrian, Crump, Moench model)
Replies: 37
Views: 3701

Re: Treasury term premium estimate: negative in most of 2017, now 2018 too (NY Fed Adrian, Crump, Moench model)

Okay, I'm not sure I'm understanding where you're going with a lot of that, so help me out here. On average I think the term premium = mean spread. If it doesn't something needs to be identified. Excessive demand or whatever. By "mean spread" what is the averaging over? Time? Over the past, or gene...
by patrick013
Tue May 15, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: Treasury term premium estimate: negative in most of 2017, now 2018 too (NY Fed Adrian, Crump, Moench model)
Replies: 37
Views: 3701

Re: Treasury term premium estimate: negative in most of 2017, now 2018 too (NY Fed Adrian, Crump, Moench model)

Spreads on Treasury yields above FFR conditioned on the market expecting rate increases should be higher than the average spreads if other factors are held constant (they're not). On average I think the term premium = mean spread. If it doesn't something needs to be identified. Excessive demand or ...
by patrick013
Tue May 15, 2018 12:30 pm
Forum: Investing - Theory, News & General
Topic: Treasury term premium estimate: negative in most of 2017, now 2018 too (NY Fed Adrian, Crump, Moench model)
Replies: 37
Views: 3701

Re: Treasury term premium estimate: negative in most of 2017, now 2018 too (NY Fed Adrian, Crump, Moench model)

https://image.ibb.co/e1H6Qd/trsytablerevised660.png Most of the time the spreads are around their mean. As rates rise the LT spread will likely be below it's mean. But it does help to know what the mean is when looking at prices. Lately the credit premium for LT corp was around 1% over the TRSY 20 ...
by patrick013
Mon May 14, 2018 11:26 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Analysis Request
Replies: 3
Views: 465

Re: Portfolio Analysis Request

Apart from using muni's and state specific muni funds and tax exempt MMF's to gather and hold some cash, as safety and taxes are a concern, the highest quality bonds are TRSY's and pay no state taxes. Almost as high in quality are Fed Farm Credit Bank and Fed Home Loan Bank coupon bonds which also p...
by patrick013
Sun May 13, 2018 9:44 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Analysis Request
Replies: 3
Views: 465

Re: Portfolio Analysis Request

Welcome. Most investable funds in Roth are invested in stock funds leaving the bonds, for safety, in a traditional 401k account. The Target Fund could be replaced to accomodate that. Taxable should be mostly stock as well with ST tax-free bonds if needed to acheive desired AA and save some taxes as ...
by patrick013
Sat May 12, 2018 4:07 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

Image

Here's what we have this year at least treasury wise. 2 and 5 year
with good spreads. 10 and 20 year a bit flat. LT corps having a good
spread over LT treasuries. I wonder what it will look like next year.
by patrick013
Fri May 11, 2018 8:33 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

You wouldn't differentiate between short and long term ? Perhaps eliminating long term while the interest rate scenario is rising. We have had rising rates for several years, yet if you look at bond fund returns long term > Intermediate > Short term over the past 3 and 5 years. This is the case for...
by patrick013
Fri May 11, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

It's a good question, I may not be smart enough to actually know. However, in thinking on it now (thanks for prompting that), given accumulation periods that may be multiples of intermediate or long term bond fund duration, is it even worthwhile accumulating into short term bond funds? The assumpti...
by patrick013
Fri May 11, 2018 2:44 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

What I'm slowly starting to conclude is that for more or less unknown time horizon for redemption, such as in a large and growing accumulation of funds in a worker's retirement account, bond funds, especially in a rising rate environment, look like a suitably good buy. You wouldn't differentiate be...
by patrick013
Thu May 10, 2018 3:30 pm
Forum: Investing - Help with Personal Investments
Topic: Paying for Volatility Reduction
Replies: 8
Views: 490

Re: Paying for Volatility Reduction

Percentage of dollars spent and percentage of volatility reduced isn't an apples to apples comparison, is it? Most stock funds will increase volatility unless they're Utility or Low Volatility factor funds. Std. Deviation and Beta define most risk and volatility events that would occur. Just increa...
by patrick013
Thu May 10, 2018 10:36 am
Forum: Investing - Help with Personal Investments
Topic: Small Cap
Replies: 11
Views: 960

Re: Small Cap

Kathys wrote:
Wed May 09, 2018 6:39 pm
What do you guys think of Small cap?
Ticker SPMD. Has growth and value or momentum and value
whatever term you prefer. Also mid and small cap (S&P 1000
index) weighted to small caps a bit.
by patrick013
Wed May 09, 2018 3:57 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

Patrick, if you want to debate this, I suggest you reply to one of bobcat2's dissertations on this topic. I'm not debating anything or bringing it up. I suggest you look at some pro-forma spreadsheets and compare those to duration calc's. I've already done so. It's a very shallow concept. I've drop...
by patrick013
Wed May 09, 2018 1:36 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

If you take this maxim literally, then you should match the duration of your fixed-income to the duration of your liabilities, since this is the relatively riskless approach. Riskless ? Granted books are full of instructions about how to do this but this is the last thing I would suggest except for...
by patrick013
Tue May 08, 2018 5:54 pm
Forum: Investing - Theory, News & General
Topic: Stock Returns & Volatility — A Fickle Long-Term Relationship
Replies: 5
Views: 461

Re: Stock Returns & Volatility — A Fickle Long-Term Relationship

I think volatility and risk shown as SD or beta is just something one has to live with. Predicting the future usually signifies higher risk with better return but at least one should stay with the blue chip indexes. People claim they have good luck predicting the future using changes in GNP, inflati...
by patrick013
Mon May 07, 2018 2:15 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

The Wiki has a detailed explanation on the Point of Indifference under Bonds - Advanced Topics. See the Paragraph on Duration. https://www.bogleheads.org/wiki/Bonds:_advanced_topics Duration is an estimate. Regardless of what the article says it loses accuracy when maturities are longer and/or when...
by patrick013
Sun May 06, 2018 12:42 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Point of Indifference vs. Principle Recovery
Replies: 56
Views: 4477

Re: Bond Fund Point of Indifference vs. Principle Recovery

I’ve often seen bond fund duration discussed as the amount of time necessary to “recover” from a loss of principle related to an interest rate change. However, it appears to be, Berstein’s term, “Point of Indifference”, makes the real point in that the loss of principle will be made up for by the t...
by patrick013
Sat May 05, 2018 1:05 pm
Forum: Investing - Help with Personal Investments
Topic: Understanding Bond Metrics
Replies: 8
Views: 735

Re: Understanding Bond Metrics

It's all making more sense now, thanks for pointing out that I might have an interest payment at the time of purchase. Bond Yield to Maturity Calculator I tried to verify the calc on a 2 year TRSY at Fidelity with a May 7, 2018 settlement date. Both answer were identical. However, the calc did not ...
by patrick013
Sat May 05, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2893

Re: Stock Buybacks as a Global Trend?

The last I read buybacks can be involuntary. You would receive a notice in your account stating 10% of your shares would mandatorily be bought back, for example. You would not have a choice. Do you have an example of this? I've never heard of it. Here's an article detailing some of the very rare oc...
by patrick013
Fri May 04, 2018 3:06 pm
Forum: Investing - Help with Personal Investments
Topic: Understanding Bond Metrics
Replies: 8
Views: 735

Re: Understanding Bond Metrics

doneat53 wrote:
Fri May 04, 2018 2:04 pm

So I received 0.625% interest for holding the bill for a little over a month. I should get another 0.625% on 9/30/2018 and another 0.625% 3/31/2019 plus the face value of 1000.
How much was accrued interest on the purchase ? You paid
for that as part of the purchase price.
by patrick013
Fri May 04, 2018 12:26 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2893

Re: Stock Buybacks as a Global Trend?

What if the buyback is involuntary ? So if you needed the money you could sell your shares anyway. But a buyback forces you to sell your shares you might want to keep. To me it's kind of a non-event then. I’m not sure I know what you’re talking about, other than taking a company private... I'm just...
by patrick013
Thu May 03, 2018 8:39 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2893

Re: Stock Buybacks as a Global Trend?

What if the buyback is involuntary ? So if you needed the money you could sell your shares anyway. But a buyback forces you to sell your shares you might want to keep. To me it's kind of a non-event then. I’m not sure I know what you’re talking about, other than taking a company private... I'm just...
by patrick013
Thu May 03, 2018 1:30 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2893

Re: Stock Buybacks as a Global Trend?

What if the buyback is involuntary ? So if you needed the money you could sell your shares anyway. But a buyback forces you to sell your shares you might want to keep. To me it's kind of a non-event then. Sure the company has less cash on it's books but the PV of earnings would calc the same way con...
by patrick013
Wed May 02, 2018 4:31 pm
Forum: Investing - Theory, News & General
Topic: Value tilted S&P 500 fund for dividend?
Replies: 45
Views: 2131

Re: Value tilted S&P 500 fund for dividend?

I'd buy it when rates peak So, not only tax inefficient fund choices, but market timing too? When will you know when rates peak? Write a book on it. It's not that difficult. Do I read you correctly as stating that you've written a book on the topic of market timing, either generally or the bond mar...
by patrick013
Wed May 02, 2018 3:49 pm
Forum: Investing - Theory, News & General
Topic: Value tilted S&P 500 fund for dividend?
Replies: 45
Views: 2131

Re: Value tilted S&P 500 fund for dividend?

triceratop wrote:
Wed May 02, 2018 3:42 pm
I'd buy it when rates peak
So, not only tax inefficient fund choices, but market timing too? When will you know when rates peak?
Write a book on it. It's not that difficult.
by patrick013
Wed May 02, 2018 3:37 pm
Forum: Investing - Theory, News & General
Topic: Value tilted S&P 500 fund for dividend?
Replies: 45
Views: 2131

Re: Value tilted S&P 500 fund for dividend?

patrick13, what is an optimum dividend index ? And when you've explained that, how can one reliably find them in advance , rather than after the fact? VYM can go pick flowers as far as I am concerned. https://us.spindices.com/documents/research/research-the-beauty-of-simplicity-the-sp-500-low-volat...
by patrick013
Wed May 02, 2018 2:51 pm
Forum: Investing - Theory, News & General
Topic: Value tilted S&P 500 fund for dividend?
Replies: 45
Views: 2131

Re: Value tilted S&P 500 fund for dividend?

As others have pointed out in general, I will point this out specifically: note that in a taxable account a high dividend fund is likely to be strictly worse than a total market fund with a lower dividend yield. Tax cost is an important drag on returns. But what if mathematically one of the optimum...
by patrick013
Wed May 02, 2018 2:21 pm
Forum: Investing - Theory, News & General
Topic: Value tilted S&P 500 fund for dividend?
Replies: 45
Views: 2131

Re: Value tilted S&P 500 fund for dividend?

Any idea why a so called index fund would have such a high rate of turnover? Because if they don't pay up they're out. Tax wise it would be better if it didn't have REIT's but still good in a Roth. Actually, if it didn't have Reit's and Utilities it would be very close to the asset selection "index...
by patrick013
Wed May 02, 2018 1:02 pm
Forum: Investing - Theory, News & General
Topic: Recommendations - Interest Rate Outlooks
Replies: 6
Views: 887

Re: Recommendations - Interest Rate Outlooks

The market has already priced in expected market increases. So that's that. I don't think you can verify that. The market appears to be priced for less than a year of FFR rises. Also, the Doubting Thomas' are there hoping rate increases are reversed giving them a reason to keep LT prices high. Have...
by patrick013
Tue May 01, 2018 3:38 pm
Forum: Investing - Theory, News & General
Topic: Recommendations - Interest Rate Outlooks
Replies: 6
Views: 887

Re: Recommendations - Interest Rate Outlooks

Looking for recommendations on the best authors of / sources for interest rate outlooks in the United States. Someone that will present a clear point of view on all the different metrics & how that will manifest in short term/future interest rates. Budget and Economic Data Congressional Budget Offi...
by patrick013
Mon Apr 30, 2018 3:45 pm
Forum: Investing - Theory, News & General
Topic: Bond market tilting?
Replies: 12
Views: 997

Re: Bond market tilting?

This strategy can be uncertain because it relies on the imperfect forecast of future interest rates. The idea is to increase the return on a bond portfolio by making strategic moves in anticipation of foreseen interest rate changes. Such a strategy is essentially market timing with investment-grade ...
by patrick013
Mon Apr 30, 2018 3:09 pm
Forum: Investing - Theory, News & General
Topic: Dropping equities dividend rates and loss of compounding
Replies: 15
Views: 1716

Re: Dropping equities dividend rates and loss of compounding

The dividend of the 500 is actually over .9 correlated to the index stock price. For whatever cause makes a dividend happen or not you can actually estimate the 500 price by the annual dividend pretty well. Stat-wise a healthy dividend is a sign if not a direct cause towards a healthy 500 price. A v...
by patrick013
Sun Apr 29, 2018 12:41 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement dividend income portfolio
Replies: 3
Views: 605

Re: Retirement dividend income portfolio

We would like to live off pension/dividends and not touch principal amount. A moderate AA (50-50) would probably be advisable. This would result in you spending from cap gains in stock funds and interest income in bond funds. Simple portfolio is VOO and a CD ladder. Dividend funds should be bought ...