Search found 484 matches
- Mon Jan 08, 2024 4:50 am
- Forum: Investing - Theory, News & General
- Topic: Modified versions of HFEA with ITT and Futures / Lifecycle Investing with Modern Portfolio Theory
- Replies: 2993
- Views: 498663
Re: Modified versions of HFEA with ITT and Futures / Lifecycle Investing with Modern Portfolio Theory
Is anyone aware of a good book explaining the details of the different costs associated with US treasury futures. I'm specifically interested in the implied financing rate embedded in the price and how to separate that out from the other costs (e.g. coupon payments). A tool would also be useful to check my understanding.
- Thu Aug 24, 2023 5:52 am
- Forum: Personal Consumer Issues
- Topic: Vanguard has blocked/blacklisted my home IP address
- Replies: 206
- Views: 16840
Re: Vanguard has blocked/blacklisted my home IP address
No. My son-in-law (who has impeccable IT credentials) recommended against a VPN: "recommend against using a VPN or proxy to change IP address, since that decrypts all traffic at some third party location" Maybe check those credentials again, this is very unlikely though technically possible. Your traffic is encrypted to the VPN company with SSL. Just choose a reputable VPN company. VPNs are the preferred solution here. Companies use VPNs in foreign countries and remote workers to protect their data (e.g. tunneling through the great firewall) It’s possible for a VPN company to try a MiTM attack as suggested but once they get found out their business would be gone. ExpressVPN and NordVPN are a couple good options where the cost of ...
- Mon Jul 24, 2023 4:54 am
- Forum: Personal Finance (Not Investing)
- Topic: Should "golden handcuffs" keep us in an unhappy living situation?
- Replies: 51
- Views: 8653
Re: Should "golden handcuffs" keep us in an unhappy living situation?
The average US teacher salary isn’t relevant in this case. The average salary for a teacher in the two locations you’re considering are more relevant. If you’re in a VHCOL area $100k could be good but not crazy. NY, the state not the city, teachers earn 80k on average.
- Mon Jul 24, 2023 4:45 am
- Forum: Personal Finance (Not Investing)
- Topic: Should "golden handcuffs" keep us in an unhappy living situation?
- Replies: 51
- Views: 8653
Re: Should "golden handcuffs" keep us in an unhappy living situation?
How are the costs and taxes astronomical and your wife’s $100k job is incredibly well paid? If the costs are so high then the pay can’t be that good, certainly not high enough to be golden handcuffs. Maybe your sense of what is expensive is out of touch?
Living near family is worth a lot and I wouldn’t consider moving to a much less expensive location unless I was moving from Manhattan making 100k and my wife wanted to move.
Living near family is worth a lot and I wouldn’t consider moving to a much less expensive location unless I was moving from Manhattan making 100k and my wife wanted to move.
- Sat Jul 08, 2023 12:38 am
- Forum: Investing - Theory, News & General
- Topic: Paper: "Smart beta" is a mirage due to data mining in backtested indexes
- Replies: 115
- Views: 9943
Re: Paper: "Smart beta" is a mirage due to data mining in backtested indexes
The reason people invest in stocks rather than bonds, the equity risk premium, is based on the past just as much as any of these factors. If you look at rolling 10 year periods from 1963-2018 (time of publication), the value premium has been positive 89% of the time and the equity risk premium has been positive 80% of the time. If one believes that you should be rewarded for holding stocks rather than bonds, then they should also believe that holding high value stocks will be rewarded.
https://www.pwlcapital.com/wp-content/u ... -Final.pdf
- Sat Jul 08, 2023 12:28 am
- Forum: Investing - Theory, News & General
- Topic: Paper: "Smart beta" is a mirage due to data mining in backtested indexes
- Replies: 115
- Views: 9943
Re: Paper: "Smart beta" is a mirage due to data mining in backtested indexes
Classic xkcd on data mining: https://xkcd.com/882/ It works post-publication and using different metrics for value. I don't think it's data mining. US SCV vs TSM https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1992&firstMonth=1&endYear=2023&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&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&portfolioNames=false&a...
- Fri Jul 07, 2023 2:58 am
- Forum: Personal Finance (Not Investing)
- Topic: How many hours do you work? How many hours do you actually want to work?
- Replies: 171
- Views: 18252
Re: How many hours do you work? How many hours do you actually want to work?
I work more now than ever. 60ish hours often. I don’t have a great reason. There’s just an endless stream of things to do and I like being able to accomplish a lot and help out my coworkers. Maybe I’ll slow down at some point when things are less interesting and the effort is no longer rewarded with better compensation.
I’ve previously worked in jobs where expectations were super low and I didn’t enjoy it. I felt like I was going to be found out and eventually realized I’d wasted time to improve my skills.
I’ve previously worked in jobs where expectations were super low and I didn’t enjoy it. I felt like I was going to be found out and eventually realized I’d wasted time to improve my skills.
- Thu Jun 29, 2023 1:55 pm
- Forum: Investing - Theory, News & General
- Topic: Paper: "Smart beta" is a mirage due to data mining in backtested indexes
- Replies: 115
- Views: 9943
Re: Paper: "Smart beta" is a mirage due to data mining in backtested indexes
If it turns out that size is merely a proxy for beta and low quality, then it is helpful in the context of obtaining both beta and low quality. I am not requiring that the model hold completely true; just close enough to make my assessment as to my portfolio construction. Even the three original factors were essentially data mined since no one had a definitive theory / hypothesis for their existence BEFORE the factors were discovered. We are still arguing 40 years later about what is the theory that explains them. Data artifacts and misreading random occurrences has to be considered a serious theory for their explanation (aka the null hypothesis). Even worse, the three factors may have been true and existed before 1990, but maybe investmen...
- Thu Jun 29, 2023 2:22 am
- Forum: Investing - Theory, News & General
- Topic: 33 - 1.4M Net Worth Drifting From Boglehead Strategy
- Replies: 179
- Views: 22251
Re: 33 - 1.4M Net Worth Drifting From Boglehead Strategy
It’s helpful to note that contrary to your feelings on the subject on average a college degree has a high ROI in almost every paper I’ve read on the subject. It may not stay that way forever. The education data institute which afaict is fairly unbiased publishes statistics on this https://educationdata.org/college-degree-roibroncocountry25 wrote: ↑Sat May 27, 2023 7:21 pm I also have started saving for my kids to go to college but feel like college is now a complete waste of money and in 16+ years it will only be worse. Does anyone feel the same!? I really think there is massive upside for families willing to start a business right now who have the smarts from a decade + of business experience.
- Wed Jun 28, 2023 1:30 am
- Forum: Personal Finance (Not Investing)
- Topic: Is it better to buy house now or in few years?
- Replies: 25
- Views: 3333
- Tue Jun 27, 2023 12:55 am
- Forum: Personal Finance (Not Investing)
- Topic: FAANG+/CS - Career vs. lifestyle/location/housing
- Replies: 121
- Views: 8537
Re: FAANG+/CS - Career vs. lifestyle/location/housing
I am in the Bay Area with my wife and two young kids. We're in our 30s and have come relatively recently after the latest huge run up in housing prices. I have similar thoughts about the expense of housing, daycare, and and pay relative to what I could made/spent back home in the Midwest. It feels wasteful. I would enjoy being closer to family. It's also that I have a profound, probably irrational sense of injustice about the housing situation. IMO how prop 13 transfers wealth from newcomers to long time residents regardless of SES is frustrating. There are a lot of zoning restrictions created by long term residents preventing the situation from getting better. Luckily things are moving in the right direction (MV just approved 7k new homes ...
- Tue Nov 15, 2022 12:39 am
- Forum: Personal Consumer Issues
- Topic: Sleep on mattress on the floor
- Replies: 31
- Views: 4037
Re: Sleep on mattress on the floor
I guess I never realized this was a European thing. All the beds I’ve bought since college have been platform beds. I’ve gotten a king and queen from Costco and a twin kids bed from pottery barn. I grew up with a box spring and these a sort of metal fold out frame which is very cheap. We also had bunk beds.whodidntante wrote: ↑Mon Nov 14, 2022 11:43 pm A platform bed is a European solution. A bit cheaper, and probably a bit saner. Box springs and a separate frame for 'Murica.
- Sat Nov 12, 2022 7:14 am
- Forum: Investing - Theory, News & General
- Topic: Why We Expect Inflation to Fall in 2023
- Replies: 60
- Views: 10347
Re: Why We Expect Inflation to Fall in 2023
The reason one would expect inflation to be lower is that the federal funds rate is higher and it is expected that the real federal funds rate will become positive soon. This is a restrictive monetary policy which has historically reduced inflation as people are more willing to save than spend. Another reason is that a large proportion of overall inflation is housing has dropped substantially in real time data but hasn’t been reflected in owners equivalent rent. This lagging data failed to show inflation rising quickly earlier and is failing to show it falling now. Another reason is quantitative tightening which is reducing the money supply by allowing the federal reserves balance sheet to run off. Another reason is fiscal policy. 2021/2 ha...
- Sat Nov 12, 2022 6:54 am
- Forum: Investing - Theory, News & General
- Topic: Sneaky Bull market?
- Replies: 51
- Views: 8118
Re: Sneaky Bull market?
There isn’t a technical definition. (All numbers are S&P500)
If we say that a bear market is a drop of 20% or more from the previous peak (4818), then a parallel definition of a bull market would be a 20% rise from the most recent trough (3491), or should it be 25% so it’s the reciprocal (0.8/1.25)
If we say that a bull market requires that we pass our previous peak, would we not also have to say it isn’t technically a bear until we drop below the March 2020 trough (2237)? I don’t think that definition can work if we want to keep the definitions aligned
- Sat Nov 12, 2022 6:40 am
- Forum: Investing - Theory, News & General
- Topic: Sneaky Bull market?
- Replies: 51
- Views: 8118
- Sat Nov 12, 2022 6:33 am
- Forum: Non-US Investing
- Topic: High Earners in Europe - What do you do for a living (and are there jobs with similar pay as in the US)?
- Replies: 118
- Views: 19986
Re: High Earners in Europe - What do you do for a living (and are there jobs with similar pay as in the US)?
Texas property taxes are high relative to the rest of the US but in general Income taxes are more costly than property taxes for anyone making higher income. I would take 2% property tax on a 600k home in Austin, TX over 1% property tax on a 2M home and 10% income tax in the Bay Area in California (income tax is progressive and varies based on income so is a rough estimate). California average property tax is <1% because of a tax law that effectively freezes property taxes. Effectively a wealth transfer from new residents to old.Valuethinker wrote: ↑Fri Nov 11, 2022 6:08 am (Texas would be different although I gather property taxes are quite high?).
- Sat Nov 12, 2022 6:19 am
- Forum: Non-US Investing
- Topic: High Earners in Europe - What do you do for a living (and are there jobs with similar pay as in the US)?
- Replies: 118
- Views: 19986
Re: High Earners in Europe - What do you do for a living (and are there jobs with similar pay as in the US)?
Comparing Portugal / Austria to Bay Area salaries doesn’t make much sense. The Bay Area and NYC have much higher salaries than the rest of the US and the last few years have seen a rapid rise of salaries as the labor market has been tight and the demand for tech jobs during COVID was high. When I lived in the Midwest I made ~125k which was a lot for that area. I moved to a similar position in the Bay Area and every offer I received was over 300k. It’s so much more expensive there, most large tech companies have offices so there’s competition, and they can throw around money to get headcount (or they used to). About a third of compensation is stock based compensation which can drop 80%+ in a year. Maybe it’s not as stratified with the rise o...
- Sat Oct 22, 2022 6:52 am
- Forum: Investing - Theory, News & General
- Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
- Replies: 14343
- Views: 1970252
Re: HEDGEFUNDIE's excellent adventure Part II: The next journey
There's a difference between knowing it and living it. There is, but I don't see the point you're making. It is valid to walk away from this strategy knowing it would have gone -70% during the 70s. I already guided Tamalak when they should cautiously look at this strategy, if they are still interested. The point is that in the original white paper (if you want to call it that) proposed that this strategy is a good idea because the assumption was made that the 1970s wouldn't repeat itself -- i.e. aggressive rate hikes by the Federal Reserve to stem off high inflation. In the grand scheme of an investment lifetime, the assumption of what wouldn't happen happened almost immediately. Compared to inflation in the 1970s the fed is using aggressi...
- Sun Oct 16, 2022 7:21 am
- Forum: Personal Finance (Not Investing)
- Topic: TLH: Avoiding a wash sale when selling Schwab MF to buy Vanguard ETF
- Replies: 7
- Views: 609
Re: TLH: Avoiding a wash sale when selling Schwab MF to buy Vanguard ETF
Why is the expense ratio on that small cap equity fund so high? I can’t find anything special about it. Even actively managed funds like AVUV only charge around .25%. VTWO that targets the same underlying indexes charges .2%. I think 1.08% for a small cap active fund is not bad among active small cap funds. https://www.investopedia.com/ask/answers/032715/when-expense-ratio-considered-high-and-when-it-considered-low.asp It is amazing that an active fund like AVUV can charge just 5 basis points more than an index fund like VTWO. And I see that it is not because of temporary fee reductions, well, at least I don't see one stated. Edit 1: It seems that Avantis is the "discount" brand of American Century, all their active funds have ve...
- Wed Oct 12, 2022 8:41 am
- Forum: Personal Finance (Not Investing)
- Topic: Anyone else purposefully [discount] portfolio [when planning]?
- Replies: 40
- Views: 3874
Re: Anyone else purposefully downplay portfolio?
Just curious if when looking at monte Carlos and firecalc if others lower their actual portfolio value to be conservative. For example all numbers I enter are actually $500,000 less than what we have because I sense the market is due for a correction and I want to be on the "safe" side. I guess to make this actionable I am curious if others do this, and at what point does this actually negatively impact decisions to pull the trigger on retirement? Financial services people do this. The more “prudent and conservative” they can get you to be, the more likely you won’t be able to meet your unrealistic goals. This makes you available as a customer. Don’t make conservative estimates. Make realistic estimates and then add a cushion at ...
- Wed Oct 12, 2022 8:32 am
- Forum: Personal Finance (Not Investing)
- Topic: TLH: Avoiding a wash sale when selling Schwab MF to buy Vanguard ETF
- Replies: 7
- Views: 609
Re: TLH: Avoiding a wash sale when selling Schwab MF to buy Vanguard ETF
Why is the expense ratio on that small cap equity fund so high? I can’t find anything special about it. Even actively managed funds like AVUV only charge around .25%. VTWO that targets the same underlying indexes charges .2%.
- Wed Oct 12, 2022 8:20 am
- Forum: Personal Investments
- Topic: Will the market crash like it did in 2020?
- Replies: 63
- Views: 7403
Re: Will the market crash like it did in 2020?
Tbf there was a massive fiscal deficit from tax cuts enacted in 2017 when real federal funds rates were below zero and that didn’t cause massive inflation. Japan has also had decades of easy money and no inflation. I don’t think it’s that clear why inflation took off this time when it hadn’t in a decade. Possibly a combination of spending, easy money, the global nature of stimulus, negative supply shocks, and other unknown factors.Wiggums wrote: ↑Mon Oct 10, 2022 11:48 pm Massive government spending followed by near zero interest rates set the market higher. Now the market is coming back to earth as the Fed is fighting inflation by raising the interest rates very quickly. So, we know what what happened and it’s a global problem.
- Sun Oct 09, 2022 1:56 pm
- Forum: Investing - Theory, News & General
- Topic: I-bonds fixed rate [How is rate determined, compare to TIPS]
- Replies: 21
- Views: 3296
Re: I-bonds fixed rate [How is rate determined, compare to TIPS]
Thank you this was very helpful.FoundingFather wrote: ↑Thu Oct 06, 2022 11:18 amThere is a fair bit of opacity on this issue, but I will try to clear away some of the confusion, having looked into this in the past:phantom0308 wrote: ↑Thu Oct 06, 2022 5:22 am Is anyone aware of any information that explains the way fixed rates on I-bonds are determined? Is there some type of formula or auction that sets these prices?
…
I hope this helps!
Founding Father
- Thu Oct 06, 2022 5:22 am
- Forum: Investing - Theory, News & General
- Topic: I-bonds fixed rate [How is rate determined, compare to TIPS]
- Replies: 21
- Views: 3296
I-bonds fixed rate [How is rate determined, compare to TIPS]
Is anyone aware of any information that explains the way fixed rates on I-bonds are determined? Is there some type of formula or auction that sets these prices? The reason I ask is because most resources I’ve found discussing I-bonds online don’t consider the topic. They appear fairly amateur explanations for people that would normally be chasing savings account rates. They focus only on the high inflation component of the rate and assume that the fixed rate will be zero. The big question is why the next inflation metric will be in November. Since 5/6 months are already in it’s pretty straightforward. It’s not obvious to me why it would be zero. The real rate on TIPs down the yield curve is positive and I-bonds should be competing with thos...
- Thu Oct 06, 2022 5:04 am
- Forum: Investing - Theory, News & General
- Topic: Now that long TIPS yields are 60 bp off their highs I will…
- Replies: 2936
- Views: 611054
Re: If long TIPS hit a real yield above 2.0% I will…
It doesn’t appear as if TIPs are really making up for their long term underperformance during the greatest unexpected inflation shock in 40 years. The link below has a backtest of a 60/40 portfolio comparing intermediate TIPs, long term TIPs, and long term treasuries where EDV and VGLT are mixed to make the duration of LTTs and LTTips match. LTTs have a more negative correlation with stocks so are a clear winner on a total and risk adjusted basis. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annual...
- Tue Oct 04, 2022 3:31 pm
- Forum: Investing - Theory, News & General
- Topic: If things are so bad, how come the market is up 900 points today?
- Replies: 141
- Views: 15311
Re: If things are so bad, how come the market is up 900 points today?
Bad news is good news. Investors are waiting for easy money again. The economy getting worse is an indication that the fed will lower interest rates sooner. At least that’s the theory. It’s all just guessing.
- Sun Oct 02, 2022 6:09 pm
- Forum: Investing - Theory, News & General
- Topic: First 20% of bonds in long-term Treasuries
- Replies: 2259
- Views: 266872
Re: First 20% of bonds in long-term Treasuries
Sorry if this has already been asked, but what about 30-year TIPS? My plan currently is 10% in bonds, 90% in stocks, so my thought was to use 30-year TIPS as my bond portion, held in retirement accounts to avoid the tax issues. I know Vanguard has an extended duration bond etf EDVZ, but is there one for TIPS? I only seem to see short term tips etfs and funds LTPZ Wow that is very enticing, 1.5% yield average with inflation protection. I really wish Vanguard had one. an inflation protected version of EDV would be wonderful It's not nearly as enticing as you would expect, TIPs have only slightly outperformed their nominal counterparts during the greatest unexpected inflation shock in 40 years. They haven't outperformed over the life of the f...
- Wed Sep 28, 2022 9:55 pm
- Forum: Personal Investments
- Topic: BND....gift or avoid?
- Replies: 7
- Views: 1224
Re: BND....gift or avoid?
It really doesn’t make sense to compare bond funds or any other fund to one another without considering where it fits in a portfolio unless you’re holding 100% of each asset being considered. One bond fund might be better than another in isolation but their contribution to your overall risk adjusted returns are more important. LTTs are better on every metric even after the worst year for bonds in 40-50 years (which impacts higher duration bonds more). https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&an...
- Wed Sep 28, 2022 9:44 pm
- Forum: Personal Investments
- Topic: BND....gift or avoid?
- Replies: 7
- Views: 1224
Re: BND....gift or avoid?
Avoid. BND is correlated to stocks during downturns because of its corporate so isn’t a good diversifier like treasuries. It fails at the primary purpose of bonds. Given that BND is 2/3 Treasuries, I wouldn't expect that much of a difference. Portfolio Visualizer seems to support this: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2019&firstMonth=1&endYear=2022&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&leverageType=0&leverageRatio=0.0&debtAmount=0&am...
- Wed Sep 28, 2022 5:56 am
- Forum: Personal Investments
- Topic: BND....gift or avoid?
- Replies: 7
- Views: 1224
Re: BND....gift or avoid?
Avoid.
BND is correlated to stocks during downturns because of its corporate so isn’t a good diversifier like treasuries. It fails at the primary purpose of bonds.
BND is correlated to stocks during downturns because of its corporate so isn’t a good diversifier like treasuries. It fails at the primary purpose of bonds.
- Sat Sep 24, 2022 11:58 pm
- Forum: Investing - Theory, News & General
- Topic: Last Call for I Bonds? Anyone else planning to move to Tbills in 2023
- Replies: 50
- Views: 7622
Re: Last Call for I Bonds? Anyone else planning to move to Tbills in 2023
You could buy your spouse next year’s i bonds today and start collecting interest immediatEly. She could do the same for you. In that way you could lock in 9% interest for 6 months then 6+% for next 6 months.
- Sat Sep 24, 2022 5:02 pm
- Forum: Investing - Theory, News & General
- Topic: Last Call for I Bonds? Anyone else planning to move to Tbills in 2023
- Replies: 50
- Views: 7622
Re: Last Call for I Bonds? Anyone else planning to move to Tbills in 2023
If you check out the I bond gifting thread there are instructions on how to front load a lot of purchases of i bonds. You could get 100k+ in Ibonds purchased for gifts if liquidity isn’t a concern
- Sat Sep 24, 2022 3:43 am
- Forum: Investing - Theory, News & General
- Topic: At this HIGH LEVEL of interest rate, home prices must come down!
- Replies: 72
- Views: 7462
Re: At this HIGH LEVEL of interest rate, home prices must come down!
Another point that isn’t mentioned is that unemployment is near multi decade lows, so there are far fewer people who need to sell.
Four Ds of housing supply are death, divorce, debt and desire (or diapers I’ve also heard) with debt the only really relevant parameter here.
Four Ds of housing supply are death, divorce, debt and desire (or diapers I’ve also heard) with debt the only really relevant parameter here.
- Sat Sep 24, 2022 3:29 am
- Forum: Investing - Theory, News & General
- Topic: At this HIGH LEVEL of interest rate, home prices must come down!
- Replies: 72
- Views: 7462
Re: At this HIGH LEVEL of interest rate, home prices must come down!
Calculated risk blog is the best resource for housing data IMO. My guess for how supply will be impacted is: Supply of new homes in the short term will increase because the number of new housing starts which have not completed is at a high level. Supply of housing in the medium term will be reduced as home builders reduce construction because of higher financing costs and weaker demand. Supply of housing will also be reduced by fewer existing home owners selling. The cost of selling now includes losing a 30year 3% interest mortgage. I think there will need to be some economic hardship to increase the supply of available homes significantly and even then it’s unlikely a significant number of people will be nominally underwater given price ri...
- Mon Sep 19, 2022 10:29 pm
- Forum: Investing - Theory, News & General
- Topic: Why don't you factor tilt?
- Replies: 882
- Views: 55473
Re: Why don't you factor tilt?
I’m not worried about you, I’m worried about the 20 something just starting out and reading your posts and deciding to concentrate in US Large Cap Growth (which the S&P 500 essentially is) and losing out in the decades to come. So you aren't a Boglehead? Bogle pitched US TSM, but US TSM isn't that much different than S&P500. I don’t feel like a religious devotion to Jack Bogle’s investing recommendation for the average investor near the time of his death is what it means to be a boglehead. Over his life he invested in active funds and wouldn’t have been considered a BH under the strictest only US TSM/BND criteria 60/40 that some follow. It’s really irritating for good arguments to be shut down by appeals to authority to Jack. I can...
- Sat Sep 17, 2022 7:52 am
- Forum: Investing - Theory, News & General
- Topic: Foreign stocks are cheaper
- Replies: 94
- Views: 11134
Re: Foreign stocks are cheaper
The dollar is also strong and getting stronger as high US interest rates pull investments from overseas. The strong dollar makes international investments weaker in dollar terms. If that ever reverts international investments should be stronger in dollar terms. It seems like the dollar will get stronger but that’s probably already priced into the market.
- Wed Sep 14, 2022 2:42 am
- Forum: Personal Investments
- Topic: Home country bias = bias to tech in Silicon Valley?
- Replies: 23
- Views: 2732
Re: Home country bias = bias to tech in Silicon Valley?
As someone living in the Bay Area, I have yet to see price declines in anything except maybe houses on the margin even though large portions of the tech sector are down 20-50%. How is this highly correlated? High house prices here just seem to be correlated to restricted supply and high demand. High house prices make everything else expensive.
- Thu Sep 08, 2022 3:31 am
- Forum: Personal Investments
- Topic: Sell inherited taxable bond fund?
- Replies: 4
- Views: 562
Re: Sell inherited taxable bond fund?
The advice on this forum w.r.t. tax placement is not that accurate. The wiki is better. The yield of the investments is more relevant than the asset class. The price return is relevant as well, just less so. When yields on bonds are low as they were from ~2009-2020, the amount of money that’s being taxed is low so the actual tax cost is low. It can be lower than higher yielding dividend stock funds for example. TBills can be some of the most tax efficient investments because yield and appreciation are low. When yields are higher as they’ve been getting recently, the amount taxed is higher so most stock funds would be better in a taxable account. The other thing to consider is price appreciation. The LTCG of stocks is typically higher than b...
- Mon Sep 05, 2022 4:54 am
- Forum: Investing - Theory, News & General
- Topic: Are there ETFs that screen out "zombie companies"?
- Replies: 35
- Views: 3883
Re: Are there ETFs that screen out "zombie companies"?
The US has had so much cheap money for so long that it's a major concern that a LOT of businesses will find themselves in this situation as the Fed rather aggressively increases rates to fight inflation. Fwiw cheap money has been available world wide and now inflation is hitting world wide. The US isn’t particularly egregious in either case. The fed started tightening pre-COVID when many other advanced economies did not. The US also has lower inflation now. I’d expect that any issue that comes from zombie companies would become a world wide phenomenon. The real issues begin when these companies that can’t survive on their own are kept alive through intervention and the US has a better track record than most of letting companies fail at the...
- Mon Sep 05, 2022 4:40 am
- Forum: Investing - Theory, News & General
- Topic: Are there ETFs that screen out "zombie companies"?
- Replies: 35
- Views: 3883
Re: Are there ETFs that screen out "zombie companies"?
The quality of the wiki article on zombie companies seems really poor. Usually people flag uncited opinionated comments like
“ In an age where U.S. monetary policy seems to ease by the day, enterprises of all sizes are tapping time and again into debt markets — potentially creating a corporate landscape littered with zombie firms”
“ In an age where U.S. monetary policy seems to ease by the day, enterprises of all sizes are tapping time and again into debt markets — potentially creating a corporate landscape littered with zombie firms”
- Mon Sep 05, 2022 4:31 am
- Forum: Investing - Theory, News & General
- Topic: RSU selling pressure
- Replies: 10
- Views: 1946
Re: RSU selling pressure
We also have all employees vest on the same day, fwiw. Quarterly vesting of RSU and semi-annually ESPP.
- Mon Sep 05, 2022 4:29 am
- Forum: Investing - Theory, News & General
- Topic: RSU selling pressure
- Replies: 10
- Views: 1946
Re: RSU selling pressure
Thanks this was my reading of the situation as well. I just wasn’t sure if there’d ever been a more thorough investigation of this type of thing before. We have ESPP and RSU at my company. I’m not exactly sure what most of my colleagues do with their RSUs/ESPP on vest because I started post COVID and we’re still 90+% remote so fewer conversations of that nature. The couple people I know outside work have held a large portion of their positions which has paid off incredibly well (+2000% in 6 years after a 50% drop in the last year) so it’s difficult to argue for selling on vest (also not at automatic process for me). The stock just happened to drop 10% the day that ESPP became available wiping out a lot of the 15% discount before they could ...
- Sat Sep 03, 2022 2:19 am
- Forum: Investing - Theory, News & General
- Topic: RSU selling pressure
- Replies: 10
- Views: 1946
RSU selling pressure
The advice most often given for restricted stock units (RSUs) is to sell immediately on vest. The RSU vesting date of companies is either public information or easy to obtain. Other reasons why people might sell on vest are b/c an employee might be counting on that money to fund their lifestyle (not advocating this). I'm wondering if the market knows that there will be a large number of sellers on a specific day, does the price drop, and if so, why not? I imagine that very large companies would have enough daily trading volume that this is noise. For slightly smaller companies is this a thing or is nearly every company in a situation where stock grants are a negligible fraction of daily trading volume?
- Thu Aug 11, 2022 5:40 am
- Forum: Investing - Theory, News & General
- Topic: Why is stock market return so consistent over time?
- Replies: 96
- Views: 10793
Re: Why is stock market return so consistent over time?
From 2000-2020 the US undershot this target so it’s not always overshooting, it’s just rare to get deflation that’d counteract a short period of inflation. You’d need 5 years of 1% inflation to counteract one year of 7% inflation.
The 2% target has only existed since the late 90s and was popularized by the central bank in New Zealand.
- Thu Aug 11, 2022 5:40 am
- Forum: Investing - Theory, News & General
- Topic: Why is stock market return so consistent over time?
- Replies: 96
- Views: 10793
Re: Why is stock market return so consistent over time?
From 2000-2020 the US undershot this target so it’s not always overshooting, it’s just rare to get deflation that’d counteract a short period of inflation. You’d need 5 years of 1% inflation to counteract one year of 7% inflation.
The 2% target has only existed since the late 90s and was popularized by the central bank in New Zealand.
- Thu Aug 11, 2022 5:19 am
- Forum: Personal Consumer Issues
- Topic: Looking for the cheapest, smallest BUT safe home anywhere in the US
- Replies: 109
- Views: 19528
Re: Looking for the cheapest, smallest BUT safe home anywhere in the US
If I’ve heard good things about living in a van down by the river
- Sat Aug 06, 2022 4:46 am
- Forum: Non-US Investing
- Topic: Advice: How to invest from Italy?
- Replies: 32
- Views: 3089
Re: If you had 200k
I would invest it b/c stocks and bonds historically have had better returns than housing. real house prices have also just had their biggest run up in years (above 2008 bubble peak). renting a place where I live is currently a bit above half the cost of a mortgage on the same house.
200k also isn't enough for a downpayment where I live.
200k also isn't enough for a downpayment where I live.
- Sat Aug 06, 2022 4:40 am
- Forum: Investing - Theory, News & General
- Topic: Why Own Corporate Bonds?
- Replies: 132
- Views: 17699
Re: Why Own Corporate Bonds?
historically and internationally there have been long periods where bonds outperform stocks. it seems risky to assume stocks will continue to perform as well as US stocks have recently forever.
- Mon Aug 01, 2022 4:30 am
- Forum: Investing - Theory, News & General
- Topic: Stocks for the Long Haul? Maybe Not.
- Replies: 146
- Views: 21495
Re: Stocks for the Long Haul? Maybe Not.
I listened to the episode and felt it was far more troubling for 100/0 investors and having an allocation to bonds was more important. I have a higher stock allocation and thought 60/40 made more sense than before listening. I think the troubling thing is that regardless of asset allocation you can hit a rough period where it's not possible to hit your goals.PicassoSparks wrote: ↑Sat Jul 30, 2022 11:14 am The paper is very readable with some extremely striking graphs. It raises a lot of questions. It offers troubling information for the 60/40 Boglehead.
...
- Wed Jul 13, 2022 3:42 am
- Forum: Investing - Theory, News & General
- Topic: Treasury yield curve changes over last month
- Replies: 28
- Views: 4740
Re: Treasury yield curve changes over last month
I think that’s more optimistic than what break even implies. A long recession of 8,2,0,1,1 would bring inflation down to 2%. Before the current bout of inflation we had secular stagnation and a decade and a half of below target inflation even with quantitative easing.BigJohn wrote: ↑Sat Jun 04, 2022 4:48 pm What baffles me the most is the reduction in breakeven inflation rate at 5 years. I’ve seen little data that makes me optimistic that the Fed is going to get inflation down quickly enough for it to average 3% over the next 5 years. If it goes 8, 6, 4, 2, 2, that’s almost 4.5% on average. Maybe I’m totally missing something and being too pessimistic?