Search found 45 matches

by XdUzHa3NtSeIkBkIGPVn
Tue Jun 25, 2019 11:26 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 184
Views: 14976

Re: are TIPS expensive? or are they cheap?

So the question is, with yields this low, are tips too expensive? Cheap and expensive are relative terms, so let's break it down: Compared to nominal treasuries of the same term. TIPS are cheap, unless you have high confidence that we're heading to a recession or deflationary environment. Compared ...
by XdUzHa3NtSeIkBkIGPVn
Thu May 16, 2019 3:20 pm
Forum: Investing - Theory, News & General
Topic: 401(K) presentation - are actively managed funds appropriate?
Replies: 19
Views: 1472

Re: 401(K) presentation - are actively managed funds appropriate?

Counting those, that's 3 plus maybe 8 target date funds. Why do you need to add active funds at all? I think this was well covered in prior replies. So far I've heard no substantive arguments. The posts in favor essentially said "I like them", "I can't imagine a plan without them", and "some active...
by XdUzHa3NtSeIkBkIGPVn
Thu May 16, 2019 2:40 pm
Forum: Investing - Theory, News & General
Topic: Dividends almost Doubled between 2013 and now
Replies: 96
Views: 7424

Re: Dividends almost Doubled between 2013 and now

Say dividends are desirable because they take cash away from executives that would spend it inefficiently. Then stock buybacks should be even more desirable because they do the same thing, but you'd pay less taxes on it. Buybacks also give the investors more flexibility: If you need more than the b...
by XdUzHa3NtSeIkBkIGPVn
Thu May 16, 2019 2:18 pm
Forum: Investing - Theory, News & General
Topic: 401(K) presentation - are actively managed funds appropriate?
Replies: 19
Views: 1472

Re: 401(K) presentation - are actively managed funds appropriate?

[...] If you were on the investment committee for a plan , I expect you’d receive enough training to understand why a plan with only those three choices would likely violate the plan’s fiduciary obligations. Can you be more specific? I am familiar with fiduciary obligations ( here's a page with mor...
by XdUzHa3NtSeIkBkIGPVn
Wed May 15, 2019 1:36 pm
Forum: Investing - Theory, News & General
Topic: 401(K) presentation - are actively managed funds appropriate?
Replies: 19
Views: 1472

Re: 401(K) presentation - are actively managed funds appropriate?

People posting here want an active fund because of very subtle reasons (e.g. "they're high-quality, but low-cost, and I prefer them for specific investment types"). That means you're probably a sophisticated investor, more knowledgeable than 99 out of 100 typical 401k investors out there. I think th...
by XdUzHa3NtSeIkBkIGPVn
Wed May 15, 2019 12:00 pm
Forum: Investing - Theory, News & General
Topic: Dividends almost Doubled between 2013 and now
Replies: 96
Views: 7424

Re: Dividends almost Doubled between 2013 and now

Say dividends are desirable because they take cash away from executives that would spend it inefficiently. Then stock buybacks should be even more desirable because they do the same thing, but you'd pay less taxes on it. Buybacks also give the investors more flexibility: If you need more than the bu...
by XdUzHa3NtSeIkBkIGPVn
Wed May 15, 2019 11:14 am
Forum: Investing - Theory, News & General
Topic: Should one diversify into annuities and not bonds?
Replies: 18
Views: 2005

Re: Should one diversify into annuities and not bonds?

I agree that diversifying your fixed income sources is a good idea. I'd go one step further and try to diversify the annuity sources, to minimize agency risk at the expense of portfolio complexity. In a recession, especially a finance sector-driven recession like 2008, I'd feel much better with 3 an...
by XdUzHa3NtSeIkBkIGPVn
Mon Jan 08, 2018 1:04 pm
Forum: Investing - Theory, News & General
Topic: Living on Dividends and Interest
Replies: 58
Views: 10492

Re: Living on Dividends and Interest

I'd say that's probably a too-conservative approach. Dividends and interest are no different than creating a self-made dividend by selling capital. You're just letting the individual companies' dividend policy dictate your withdrawal rate, rather than set it yourself. And lately, US companies have b...
by XdUzHa3NtSeIkBkIGPVn
Tue Jul 18, 2017 12:06 pm
Forum: Investing - Theory, News & General
Topic: factor crowding vs active mgmnt
Replies: 3
Views: 835

Re: factor crowding vs active mgmnt

To some extent it depends if you think factors are caused by mispricing, or rational risk exposure. Some have convincing arguments for one or the other, or both. If it's a mispricing, the academic publication of a factor would mean that hedge funds and the like would want to rush and bring these bac...
by XdUzHa3NtSeIkBkIGPVn
Mon Jun 26, 2017 7:18 pm
Forum: Investing - Theory, News & General
Topic: Yes, This Is Market Timing: If the CAPE Goes Above 30, Bring on the Larry
Replies: 142
Views: 14903

Re: Yes, This Is Market Timing: If the CAPE Goes Above 30, Bring on the Larry

However, the P/E listed by Vanguard looks like bad data. If true, that would be way above market average valuations, and you'd hear talk of a "small-cap bubble". The Trailing Twelve Month P/E listed by Schwab for the ETFs based on the same indices, VBR and VBK, is just 18.77 and 26.71, respectively...
by XdUzHa3NtSeIkBkIGPVn
Mon Jun 26, 2017 7:09 pm
Forum: Investing - Theory, News & General
Topic: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the day."
Replies: 52
Views: 6886

Re: "Home Bias Blues: Investors really should get out more. The reasons for sticking to local stocks are fewer by the da

I've been thinking about this for a while now, and I think that there is a drawback to those who think that global cap-weighted stock portfolios have somehow 'diversified away' country risk. Currently, about half of the total value of all global equities is in the U.S. That means that half of a glo...
by XdUzHa3NtSeIkBkIGPVn
Mon Jun 26, 2017 2:20 pm
Forum: Investing - Theory, News & General
Topic: Yes, This Is Market Timing: If the CAPE Goes Above 30, Bring on the Larry
Replies: 142
Views: 14903

Re: Yes, This Is Market Timing: If the CAPE Goes Above 30, Bring on the Larry

One more thing, I don't know what is the current CAPE for SCV, but the PE of the corresponding Vanguard fund (VSIAX) is 43x. While the PE of the S&P 500 Vanguard fund (VFIAX) is 24x. Meaning that the SCV sub-category appears to be way more over-valued than the S&P 500... The PE of VSIAX is 17.29. I...
by XdUzHa3NtSeIkBkIGPVn
Mon Jun 26, 2017 11:09 am
Forum: Investing - Theory, News & General
Topic: Yes, This Is Market Timing: If the CAPE Goes Above 30, Bring on the Larry
Replies: 142
Views: 14903

Re: Yes, This Is Market Timing: If the CAPE Goes Above 30, Bring on the Larry

By the way, one thing I admire about the Larry Portfolio is that it's the only thing I can recall seeing written in which someone suggests using riskier assets and adjusts the portfolio so that the portfolio risk stays the same . I believe the Larry portfolio was meant to target the same return wit...
by XdUzHa3NtSeIkBkIGPVn
Tue Aug 02, 2016 2:52 pm
Forum: Investing - Theory, News & General
Topic: Stock Screeners
Replies: 68
Views: 6683

Re: Stock Screeners

I'm going to run a demo account for 1 year of 30 stocks that I pick and see how hard it really is to beat the market... I can't get around the idea that putting in hard work is useless and wont get you better results than average... Before fees and taxes, the public markets are a zero-sum game. The...
by XdUzHa3NtSeIkBkIGPVn
Tue Aug 02, 2016 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Mango prepaid card - 4.8% (effective) APY
Replies: 557
Views: 353368

Re: Mango prepaid card - 4.8% (effective) APY

It's around 1.26% if you just leave it and get 2%-fees. I also calculated a 3.54% IRR if you leave the $800 deposits and withdraw every 7th month, so I think I'll be doing that. The money order idea sounds interesting, but leaving $800 there it only costs $0.66 per month in interest lost (assuming y...
by XdUzHa3NtSeIkBkIGPVn
Mon Aug 01, 2016 5:46 pm
Forum: Personal Finance (Not Investing)
Topic: Mango prepaid card - 4.8% (effective) APY
Replies: 557
Views: 353368

Re: Mango prepaid card - 4.8% (effective) APY

Just too late to this bandwagon for all this effort to have felt particularly worthwhile... Oh well! But I will keep my account open. If I understand it right now, the max balance (across the card + savings) is $10k, so the best you can do is deposit $800 per month for 6 months, then withdraw ~$495...
by XdUzHa3NtSeIkBkIGPVn
Mon Aug 01, 2016 4:13 pm
Forum: Personal Finance (Not Investing)
Topic: Mango prepaid card - 4.8% (effective) APY
Replies: 557
Views: 353368

Re: Mango prepaid card - 4.8% (effective) APY

I just got that too. I'm weighting my options: Leave the money and get the 2% interest instead of 6%. With the $3 fee it should still give you 1.28% APY, which is better than most savings accounts. ACH the $800 and withdraw with an ATM. Not sure how practical this would be, plus it'd be a lot of has...
by XdUzHa3NtSeIkBkIGPVn
Thu Jul 28, 2016 11:48 am
Forum: Investing - Theory, News & General
Topic: Help me understand the recommendation for international stocks
Replies: 22
Views: 3127

Re: Help me understand the recommendation for international stocks

It seems to me that there has been almost no meaningful period of time when international stocks have had (a) consistently less risk than US stocks; or (b) consistently greater returns than US stocks. Am I wrong on that? If so, can someone please provide me with charts? If not, can someone please t...
by XdUzHa3NtSeIkBkIGPVn
Tue Jun 14, 2016 1:33 pm
Forum: Investing - Theory, News & General
Topic: The 2.5% yield on the S&P500: a reason to celebrate?
Replies: 22
Views: 3778

Re: The 2.5% yield on the S&P500: a reason to celebrate?

rgs92, I think you're misunderstanding how dividends work. They're just cash distributed from the company to shareholders. A company doesn't have to distribute any of its earnings to shareholders, nor does the dividend has to come from earnings. A company worth $10M (including $1M in cash) doesn't m...
by XdUzHa3NtSeIkBkIGPVn
Tue Jun 07, 2016 4:55 pm
Forum: Personal Finance (Not Investing)
Topic: Any problems with netspend
Replies: 63
Views: 9584

Re: Any problems with netspend

I don't suggest anyone keep their accounts, even the 1k. At 5%, you'd yield ~$50/year, less than enough to cover their $60/year fees. Mango and Insight it is. Netspend has no fee, if you have activity once per quarter (spend or ach in). Mango is down to one card per SSN now, it seems. Hit on two fr...
by XdUzHa3NtSeIkBkIGPVn
Mon Jun 06, 2016 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: Any problems with netspend
Replies: 63
Views: 9584

Re: Any problems with netspend

I don't suggest anyone keep their accounts, even the 1k. At 5%, you'd yield ~$50/year, less than enough to cover their $60/year fees.

Mango and Insight it is.
by XdUzHa3NtSeIkBkIGPVn
Thu May 12, 2016 12:42 pm
Forum: Investing - Theory, News & General
Topic: Fama-French on long/short strategies
Replies: 6
Views: 2027

Re: Fama-French on long/short strategies

You can have more of a tilt to a factor (like value) by using long short, but that's only if you want a portfolio with more of a value factor than beta. At that point, you're decreasing your exposure to equities overall (up to zero in a 100% long short position) and simply betting that equities with...
by XdUzHa3NtSeIkBkIGPVn
Thu May 05, 2016 4:09 pm
Forum: Investing - Theory, News & General
Topic: Longer Re-Balancing Periods?
Replies: 18
Views: 2266

Re: Longer Re-Balancing Periods?

Leeraar: You come close to arguing against rebalancing but shy away in the end. Rebalancing is a contrarian market behavior, and goes against Efficient Market Theory. You are basically selling one asset while it's "high" with the assumption that it's overvalued, and buying "low" with the assumption ...
by XdUzHa3NtSeIkBkIGPVn
Thu May 05, 2016 1:16 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Spartan Emerging Market fund - change of benchmark?
Replies: 14
Views: 1804

Re: Fidelity Spartan Emerging Market fund - change of benchmark?

That makes a difference only for a historical performance comparison. It was probably tracking another index so it's not directly comparable to other funds following the same index. That being said, I wouldn't use FPEMX as a TLH pair for VEMAX. Vanguard uses an FTSE index and Fidelity a MSCI index. ...
by XdUzHa3NtSeIkBkIGPVn
Tue May 03, 2016 12:34 pm
Forum: Investing - Theory, News & General
Topic: Company stock in 401k while company in process of being acquired - what to do?
Replies: 2
Views: 401

Re: Company stock in 401k while company in process of being acquired - what to do?

Normally I'm on the side of diversifying away from your own employment income, but as it is, you stand to make a 27% gain on your company stock. That more than compensates the lack of diversification, at least until the deal goes through and you can rebalance into index funds. Keep in mind there mig...
by XdUzHa3NtSeIkBkIGPVn
Thu Mar 17, 2016 4:26 pm
Forum: Investing - Theory, News & General
Topic: Friendly Reminder of the Enemy
Replies: 8
Views: 3124

Re: Friendly Reminder of the Enemy

I can't find the link for the article now but it's not so much behavioral gap as it is periodic investing. You're not supposed to compare it to the full 5/10/15-year return with all monies invested yet that's what they did in the article. Really just shows the effect of DCA (likely because lump sum...
by XdUzHa3NtSeIkBkIGPVn
Thu Mar 17, 2016 1:15 pm
Forum: Investing - Theory, News & General
Topic: Looking for clarification on Foreign Tax Credit
Replies: 13
Views: 1283

Re: Looking for clarification on Foreign Tax Credit

Not sure why I'm having such a hard time grasping this. These examples still seem to always result in a higher net when the TISM's are in tax-advantaged accounts, so I'm not seeing why it's better to have them in taxable accounts. Sorry, I've read these responses over and over and still not getting...
by XdUzHa3NtSeIkBkIGPVn
Thu Mar 17, 2016 11:07 am
Forum: Investing - Theory, News & General
Topic: Looking for clarification on Foreign Tax Credit
Replies: 13
Views: 1283

Re: Looking for clarification on Foreign Tax Credit

Now, it sounds like that $70 'credit', is money like 'cash back'? The wording of this description makes it sounds like it's better to have int'l stock funds in taxable accounts, but I'm not understanding why if you have $820 after taxes vs. $930 if it's in a tax-advantaged account. Because you can ...
by XdUzHa3NtSeIkBkIGPVn
Thu Mar 17, 2016 10:55 am
Forum: Investing - Theory, News & General
Topic: Friendly Reminder of the Enemy
Replies: 8
Views: 3124

Re: Friendly Reminder of the Enemy

... If you buy a set amount out of ever paycheck for ten years in a rising market, you're going to trail the 10-year performance of the fund. If you systematically withdraw for ten years in a rising market, you're going to trail the 10-year performance of the fund. If you lump sum into the fund at ...
by XdUzHa3NtSeIkBkIGPVn
Tue Jan 26, 2016 12:50 pm
Forum: Investing - Theory, News & General
Topic: Time property cycles, so why not market cycles?
Replies: 31
Views: 3270

Re: Time property cycles, so why not market cycles?

The problem is that market timing has to overcome a number of hurdles before it's even worthwhile for an investor. You need to be able to find periods around market bottoms. In hindsight, this is easy, but in real time, you could buy on a 20% dip, only to see the market fall a further 20%. Same for ...
by XdUzHa3NtSeIkBkIGPVn
Mon Jan 25, 2016 6:51 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing, another study
Replies: 130
Views: 16638

Re: Rebalancing, another study

longinvest--I also read the Sharpe paper. The big problem with it is that one of his premises is simply false. He says it is not possible for all investors to rebalance to a fixed allocation. In reality, it is. If the current market value ratio of stocks/bond is 50/50, and investors collectively de...
by XdUzHa3NtSeIkBkIGPVn
Mon Dec 28, 2015 5:55 pm
Forum: Investing - Theory, News & General
Topic: Why do we call it "investing"?
Replies: 35
Views: 4303

Re: Why do we call it "investing"?

Seems like you're making an unnecessary distinction between IPOs and secondary market purchase of shares. When a company makes a public offer, it is selling a semi-permanent ownership stake in its earnings. Semi-permanent because it will remain outstanding indefinitely unless it is bought back by th...
by XdUzHa3NtSeIkBkIGPVn
Mon Nov 30, 2015 1:20 pm
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio and International Investing
Replies: 14
Views: 2977

Re: The Two Fund Portfolio and International Investing

For me "the market" = FTSE all world all cap equity index. 100% TSM is an example of slicing. This sums it up for me. Currency fluctuations are a red herring. Both US and foreign domiciled companies have assets sensitive to various currency fluctuations, or assets that currency-agnostic. In any cas...
by XdUzHa3NtSeIkBkIGPVn
Tue Nov 24, 2015 5:29 pm
Forum: Investing - Theory, News & General
Topic: Most important financial metric/calculation?
Replies: 39
Views: 5179

Re: Most important financial metric/calculation?

I like this question because it forced me to condense different metrics into a single concept. Net worth is not sufficient because it doesn't relate to your individual needs, and it doesn't account for different interest rates and equity performance (risk being equal, I'd rather have 500k in a 3% re...
by XdUzHa3NtSeIkBkIGPVn
Fri Nov 20, 2015 4:44 pm
Forum: Investing - Theory, News & General
Topic: Emergency Portfolio with 30% Stocks
Replies: 53
Views: 7800

Re: Emergency Portfolio with 30% Stocks

The emergency fund is simply the section of your portfolio that you want to keep with an unknown investment horizon. Could be tomorrow, could be never. All you need is the money to be there when you need it. However, I'd argue it still does make sense to try to maximize return there. Here's a portfo...
by XdUzHa3NtSeIkBkIGPVn
Thu Nov 19, 2015 6:23 pm
Forum: Investing - Theory, News & General
Topic: Are Low Risk Funds Actually Low Risk?
Replies: 8
Views: 1069

Re: Are Low Risk Funds Actually Low Risk?

I took a look at FFFVX and it looks like even now, it's still almost 40% equities. That's very aggressive for a fund meant for people 10 years into retirement. The description says that between 10 to 19 years after the target date, it would turn like another fund that's 24% equities (which apparentl...
by XdUzHa3NtSeIkBkIGPVn
Mon Nov 16, 2015 4:21 pm
Forum: Investing - Theory, News & General
Topic: [What is the theory behind "float adjusted" market cap indices?]
Replies: 17
Views: 1936

Float-adjusted market cap

[Thread merged into here, see below. --admin LadyGeek] What's the rationale for "float adjusting" market capitalization indexes? I understand that if a 100B$ company only allowed 0.1% of its shares to be publicly traded, there wouldn't be enough shares in the market for (non float-adjusted) indexes...
by XdUzHa3NtSeIkBkIGPVn
Thu Nov 12, 2015 6:58 pm
Forum: Investing - Theory, News & General
Topic: Schwab's new REIT fund
Replies: 11
Views: 1882

Re: Schwab's new REIT fund - 0.13% ER

Why do you need REIT exposure to begin with, beyond what's included in the total stock market funds? If you want to overweight REITS, you're already deviating from cap weightings, so whether to include international or not depends on your motives. That being said, even a fundamental fund should prov...
by XdUzHa3NtSeIkBkIGPVn
Fri Nov 06, 2015 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Online banks with multi-factor authentication?
Replies: 19
Views: 2180

Re: Online banks with multi-factor authentication?

I consider myself good with computer security (I use password managers and create unique username/passwords for each website), but I don't like and wouldn't use 2FA. Besides the problem of "lose your phone, lose your bank", it really isn't needed to accomplish the goal: protect your bank account fro...
by XdUzHa3NtSeIkBkIGPVn
Tue Nov 03, 2015 1:55 pm
Forum: Investing - Theory, News & General
Topic: Possible great fixed income option for selected group
Replies: 3
Views: 661

Re: Possible great fixed income option for selected group

Has anybody called to get the current rates on the CDs and taxable Savings accounts?
by XdUzHa3NtSeIkBkIGPVn
Thu Oct 08, 2015 5:47 pm
Forum: Investing - Theory, News & General
Topic: Investment Club Stock Picking vs Passive Index Investing
Replies: 22
Views: 2316

Re: Investment Club Stock Picking vs Passive Index Investing

I'm getting 22,343.21, by investing 500 up front and 60/mo in VTSMX since the fund's inception. CAGR is 8.27% for the fund vs 6.90% for the club. So, you lost or missed out on ~$2,475 by stock picking. However, that comes down to just $13.75/mo over the entire timeframe. If it helps you stick with i...
by XdUzHa3NtSeIkBkIGPVn
Mon Sep 21, 2015 2:49 pm
Forum: Investing - Theory, News & General
Topic: Why not use Global Market Cap %'s for Equities?
Replies: 64
Views: 5112

Re: Why not use Global Market Cap %'s for Equities?

Very informative thread. I've thought about the same question a lot when deciding asset allocation. One thing regarding currency risk that it's worth considering, is that the price of a foreign company will not necessarily fluctuate in USD by the FX change of the currency the stock is denominated in...
by XdUzHa3NtSeIkBkIGPVn
Thu Aug 13, 2015 4:20 pm
Forum: Investing - Theory, News & General
Topic: Why not diversify beyond the Three Fund Portfolio?
Replies: 78
Views: 11337

Re: Why not diversify beyond the Three Fund Portfolio?

And there are many reasons not to GDP weight. Market cap weighting is more neutral in a lot of senses, not to mention cheaper and more feasible. Can you elaborate on this point? In his arguments for investing in the "Total Economy," Ferri seems to argue that we should aim for exposure to economic a...
by XdUzHa3NtSeIkBkIGPVn
Wed Aug 12, 2015 5:36 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets Equity % of AA
Replies: 24
Views: 2981

Re: Emerging Markets Equity % of AA

I believe that 15% of your equity is the neutral position based on market capitalization. You should not buy on weaknesses. You should base your AA on the risk / return factors of EM and your goals. I use the FTSE Global All Cap Index as my base for market-cap allocations. As of 7/31, the balance a...