I’m not sure.
I assume it wouldn’t “true up” to the underlying prices, but would still depending on the market transactions to set its own price
Search found 5474 matches
- Wed Mar 27, 2024 7:39 pm
- Forum: Investing - Theory, News & General
- Topic: AVGV and etf trading in general question
- Replies: 4
- Views: 336
- Wed Mar 27, 2024 4:54 pm
- Forum: Investing - Theory, News & General
- Topic: AVUV vs SCHG
- Replies: 15
- Views: 874
Re: AVUV vs SCHG
Is there a particular question you have about what might be actionable, given the ratio you observe between those two?
- Wed Mar 27, 2024 10:05 am
- Forum: Personal Investments
- Topic: [Wait for new Dept. of Labor Financial Advisor Protections?]
- Replies: 9
- Views: 716
Re: [Wait for new Dept. of Labor Financial Avisor Protections?]
How are you managing your portfolio today?dagsboro wrote: ↑Wed Mar 27, 2024 10:02 am If I want to best protect my spouse from inferior financial advice, should I wait until proposed new U.S. Dept. of Labor Financial Adviser rules and regulations are instituted? They reportedly strengthen fiduciary requirements and will apply to those recommending and selling securities and annuities.
Why do you want to change it?
- Wed Mar 27, 2024 9:38 am
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
...You’re also doubling down on the same type of risk, rather than diversifying your sources of risk. While sharpe ratios differ over various periods, most factor investors would argue that improved risk reduction isn’t an expectation... Wait. What is the expected benefit of "diversifying your sources of risk" if not "improved risk reduction?" I think in general the forum is a little too fixated on "risk adjusted returns" where the definition of risk is always "I treat each observation as a 1-month return number, and take the standard deviation of my whole dataset uncondtionally". What about other risks - risk of not having enough capital at retirement, risk of failure at some safe withdrawal rate, r...
- Wed Mar 27, 2024 9:30 am
- Forum: Personal Finance (Not Investing)
- Topic: Fidelity as a one stop shop
- Replies: 6053
- Views: 1036422
Re: Fidelity as a one stop shop
As an example, do you mean that you might have:mander75 wrote: ↑Wed Mar 27, 2024 9:26 am I buy money market funds at Fidelity in my CMA every month. Question: Does MM interest accumulate once I place the order (it takes 1-2 days to execute) or once the purchased MM is settled in my CMA account? Does frequent MM buying negatively affect the interest? For simplicity, when I get a new direct deposit to my CMA, I buy/rebuy SPRXX with all available funds in my CMA instead of buying the exact direct deposit amount.
$100000 SPRXX + new $1000 direct deposit
Then you make an order to buy $101000 of SPRXX, rather than an order to buy $1000 of SPRXX?
- Wed Mar 27, 2024 8:58 am
- Forum: Non-US Investing
- Topic: Short investment window and retiring soon
- Replies: 7
- Views: 556
Re: Short investment window and retiring soon
Bonds are likely advisable. What is your age?
Do you have any tax-advantaged retirement accounts like a 401k or IRA?
If you just need 3-4%, something between 40% stocks and 60% bonds to 70% stocks and 30% bonds may be more reasonable than 100% stocks
Keep in mind that while 100% stocks gives you the most upside for the next 3 years, it also gives you the most downside for the next 3 years. You could go into retirement with 500k instead of 1M
- Wed Mar 27, 2024 7:47 am
- Forum: Personal Investments
- Topic: iShares iBonds question
- Replies: 30
- Views: 2480
Re: Ishares ibonds question
Hi all. I'm building a treasury bond ladder with fixed income money I fortunately held in a stable value fund in 2022 and is now in a short term Treasury fund yielding ~5.3% SGOV. I just retired and more specifically, I want to build a 10 year treasury ladder. I know I can do this with treasuries at Fidelity, but I like the ease and flexibility of ishares ibonds. It's just my preference. I've read their fact sheets and just want to confirm that if I buy the ten year fund, for example, I will getting a defined monthly yield AND if I hold that etf to maturity, I'm guaranteed my principal back, unlike a bond fund that has a fluctuating NAV. I'd appreciate an answer from anyone who is familiar with ishares ibonds etfs. What I don't want to hap...
- Wed Mar 27, 2024 6:58 am
- Forum: Personal Consumer Issues
- Topic: Favorite protein powder for shakes at home?
- Replies: 75
- Views: 3206
- Wed Mar 27, 2024 6:56 am
- Forum: Investing - Theory, News & General
- Topic: Can you do better than BND, Part 2: Test across bear and bull markets
- Replies: 28
- Views: 3341
Re: Can you do better than BND, Part 2: Test across bear and bull markets
Would you also show the LT-only lines rather than 3:1 long-term : bills for the bull case?
- Tue Mar 26, 2024 8:28 pm
- Forum: Investing - Theory, News & General
- Topic: Looking for advice on unhappy experience in VG short term bond fund
- Replies: 66
- Views: 5569
Re: Looking for advice on unhappy experience in VG short term bond fund
They could look less often.
it’s like telling people they don’t need to exercise or study because sometimes they get sweaty or tired. Sometimes things that are good for you require effort or don’t feel nice at first. It’s ok to work through discomfort
- Tue Mar 26, 2024 8:26 pm
- Forum: Personal Consumer Issues
- Topic: Favorite protein powder for shakes at home?
- Replies: 75
- Views: 3206
Re: Favorite protein powder for shakes at home?
Fast, easy, cheapUpperNwGuy wrote: ↑Tue Mar 26, 2024 4:15 pm Why are you folk consuming protein shakes? Why not just eat more protein at meals?
- Tue Mar 26, 2024 8:24 pm
- Forum: Personal Consumer Issues
- Topic: Favorite protein powder for shakes at home?
- Replies: 75
- Views: 3206
Re: Favorite protein powder for shakes at home?
I’ve been using the optimum nutrition whey forever. Chocolatelessismore22 wrote: ↑Tue Mar 26, 2024 3:12 pm Any recommendations for protein powder that has good taste? What's the BH preference for value and quality?
- Tue Mar 26, 2024 8:15 am
- Forum: Investing - Theory, News & General
- Topic: Why do you think STRIPS are yielding lower than coupon nominal Treasuries
- Replies: 9
- Views: 641
Re: Why do you think STRIPS are yielding lower than coupon nominal Treasuries
I assume that’s the mechanism. Perhaps buyers with needs farther out are willing to accept less yield in exchange for the longer duration. Guranteeing 4.5 vs 4.7% is OK enough for them so they are buyinggavinsiu wrote: ↑Tue Mar 26, 2024 8:11 am So I have notice that all of the nominal treasury are yielding higher than STRIPS of the equivalent maturity. Why do you think this might be happening? I am curious? For example, an inverted yield curve probably means people are expecting future long term return to be low. What sort of sentiment would result in zero having lower yields?
- Tue Mar 26, 2024 8:01 am
- Forum: Investing - Theory, News & General
- Topic: Looking for advice on unhappy experience in VG short term bond fund
- Replies: 66
- Views: 5569
Re: Looking for advice on unhappy experience in VG short term bond fund
All I want from my fixed income allocation is for it to keep up with inflation, period. I now get the impression that even a short-term bond fund is no guarantee of this, especially if we were to get an extended rise in inflation and rates. So I'm tempted to put the whole fixed income allocation in a MMF and live with the up-and-down in rates but steady value in principle.* A money market fund will definitely not guarantee keeping up with inflation. The better approach is to learn to tolerate some small changes in principle in exchange for higher average return. Short term TIPs and short term treasuries may be good for you. Intermediate term could also work for a while, but you seem afraid of price movements so maybe short is better psycho...
- Tue Mar 26, 2024 6:54 am
- Forum: Personal Investments
- Topic: QQQ Question
- Replies: 49
- Views: 2858
- Mon Mar 25, 2024 10:54 pm
- Forum: Personal Consumer Issues
- Topic: Getting to Zurich Airport from Lucerne, options?
- Replies: 20
- Views: 1272
Re: Getting to Zurich Airport from Lucerne, options?
To clarify, I assumed you are spending a night in Lucerne, then plan to wake up and get to Zurich by 6am.
Can you sleep in Zurich that night instead of Lucerne?
Or no, because they have international change fees for the hotel stay? I haven’t heard about $300+ change fees for hotels, unless you just mean that you forfeit your booking cost
Can you sleep in Zurich that night instead of Lucerne?
Or no, because they have international change fees for the hotel stay? I haven’t heard about $300+ change fees for hotels, unless you just mean that you forfeit your booking cost
- Mon Mar 25, 2024 10:25 pm
- Forum: Personal Consumer Issues
- Topic: Getting to Zurich Airport from Lucerne, options?
- Replies: 20
- Views: 1272
Re: Getting to Zurich Airport from Lucerne, options?
what if you stay in Zurich in your last night instead of staying in Lucerne?
- Mon Mar 25, 2024 9:42 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
so diversification means exposure to broader risks and revenue
and factors are measures for risk and revenue exposure
so factors tell you about your diversification
- Mon Mar 25, 2024 6:54 pm
- Forum: Personal Investments
- Topic: QQQ Question
- Replies: 49
- Views: 2858
Re: QQQ Question
stick with the VTSAX/FXAIX alone. You do not seem to have access to information that uniquely positions you to better understand the future cashflows from tech companies any better than the marginal market participant
- Mon Mar 25, 2024 6:38 pm
- Forum: Personal Investments
- Topic: QQQ Question
- Replies: 49
- Views: 2858
Re: QQQ Question
Hi all, I currently invest 500 a month into VTSAX and 700 into FXAIX (not counting retirement/403b). With technology advancing so quickly, and AI becoming such a main stream concept, would it be wise to dollar cost average into QQQ/QQQm every month? Since I looked at it in 2018, it has only increased more and more, and with the way things are going I can't imagine that trend now continuing well into the future. I'd love to know everyone's thoughts. Thanks No I do not think it is wise. QQQ is a product that tracks companies listed on the NASDAQ. It is not explicitly a tech fund, it's just where the stocks happened to be listed. You should you use a tech fund if you want to track tech. Generally I would advise just using VTSAX or the total-w...
- Mon Mar 25, 2024 5:25 pm
- Forum: Personal Investments
- Topic: Please help me organize the fixed income part of my portfolio
- Replies: 130
- Views: 8216
Re: Please hep me organise the fixed income part of my portfolio
While it is an error to recommend total bond as a 1-size-fits-all bond portfolio, it is at least as significant of an error to say that one needs a 7-year horizon to invest in any bond fund, regardless of duration. I think you are confusing the cause and symptom. The symptom (me rejecting bond funds) came about because of Total Bond Fund being peddled as one-size-fits-all for more than 13 years I have been on this forum (cause), and my annoyance began only in 2022, and progressed to distaste only in 2023. lakpr, please answer four questions: 1. How much did your Total Bond holding "lose" in 2022? 2. What portion of those "losses" did you recover in 2023 and YTD in 2024. 3. Were any of those losses "realized" o...
- Mon Mar 25, 2024 7:08 am
- Forum: Personal Investments
- Topic: Please help me organize the fixed income part of my portfolio
- Replies: 130
- Views: 8216
Re: Please hep me organise the fixed income part of my portfolio
So are you saying no retirees should have any bond funds in their portfolios ? Right. No. Not unless they are willing to wait for 7 years to "make up" any adverse impact to their bond funds. Bond funds are available in a wide range of durations, so I don't know why you have a constant 7 years as the required investment horizon. Because the Total Bond Fund is being proselytized on this forum. Take just this thread and see how many mentions of VBTLX are made VBTLX is a fine option. This person also has a horizon much longer than 8 years. You said 8 years while in fact they are only just going to begin retirement then. Their horizon may be more like 20-25 years. They aren’t spending it now, and they aren’t going to drop dead in 8 ye...
- Sun Mar 24, 2024 11:07 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
So when you have a microscopic tilt, the fund you choose does not meaningfully change your outcome. So why do it at all? My example involved devoting 20% of stocks to small-cap value. That's not a "microscopic tilt." It's higher than the tilts suggested by Paul Merriman in the "Ultimate Buy-and-Hold" portfolio, or the tilts suggested in Larry Swedroe's model portfolios in The Only Guide to a Winning Investment Strategy You'll Ever Need . I agree that the effects are microscopic. I'll rephrase. What is the point of devoting a relatively small part of your total portfolio to a fund that is highly correlated to the total market? What do the relatively smaller tilts that you reference accomplish? You two might have a differ...
- Sun Mar 24, 2024 9:16 pm
- Forum: Personal Investments
- Topic: buying mutual funds seems easier than buying ETFs
- Replies: 64
- Views: 4865
Re: buying mutual funds seems easier than buying ETFs
I prefer mutual funds since I can exchange (in the same fund family) in one transaction vs have to sell, wait, and buy with ETFs. It makes rebalancing easier without worries about market conditions and ETF liquidity. If you're a trader looking at daily ETF differences w.r.t. NAV and want to optimize buying/selling opportunities then ETFs are a better choice, IMHO. For the long-term I know ETF expense ratios are lower, yet I invest in both mutual funds and ETFs. Most ETFs trade in just seconds, so there should not be much waiting when you are rebalancing or doing tax-loss harvesting nod, I understand but my use case is logging on and viewing my accounts after-hours and making decisions for the long term. I do not and will not trade during m...
- Sun Mar 24, 2024 8:48 pm
- Forum: Personal Investments
- Topic: buying mutual funds seems easier than buying ETFs
- Replies: 64
- Views: 4865
Re: buying mutual funds seems easier than buying ETFs
Most ETFs trade in just seconds, so there should not be much waiting when you are rebalancing or doing tax-loss harvestingAspirationalBH wrote: ↑Sun Mar 24, 2024 8:42 pm I prefer mutual funds since I can exchange (in the same fund family) in one transaction vs have to sell, wait, and buy with ETFs. It makes rebalancing easier without worries about market conditions and ETF liquidity.
If you're a trader looking at daily ETF differences w.r.t. NAV and want to optimize buying/selling opportunities then ETFs are a better choice, IMHO.
For the long-term I know ETF expense ratios are lower, yet I invest in both mutual funds and ETFs.
- Sun Mar 24, 2024 8:23 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
So when you have a microscopic tilt, the fund you choose does not meaningfully change your outcome. So why do it at all? My example involved devoting 20% of stocks to small-cap value. That's not a "microscopic tilt." It's higher than the tilts suggested by Paul Merriman in the "Ultimate Buy-and-Hold" portfolio, or the tilts suggested in Larry Swedroe's model portfolios in The Only Guide to a Winning Investment Strategy You'll Ever Need . I agree that the effects are microscopic. I'll rephrase. What is the point of devoting a relatively small part of your total portfolio to a fund that is highly correlated to the total market? What do the relatively smaller tilts that you reference accomplish? You two might have a differ...
- Sun Mar 24, 2024 8:11 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can I really really afford a 3 million mortgage?
- Replies: 104
- Views: 9002
Re: Can I really really afford a 3 million mortgage?
Many townhomes have like 24 inches of brick between neighbors, likely pretty soundproof
- Sun Mar 24, 2024 6:20 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can I really really afford a 3 million mortgage?
- Replies: 104
- Views: 9002
Re: Can I really really afford a 3 million mortgage?
I mean, I'll go ahead and ask it: where are town homes $3 million? Even by the standards of VHCOL that's bananas. If you're in medicine, there have to be other options, even in normal VHCOL places. It does seem crazy (to me) to make $1M/year and feel stretched on a mortgage, especially given how many very, very, (very) nice places are less expensive. New York, London, Paris... VHCOL = you can drop $30 million+ on a townhouse in the right area. $3 million gets you a nice but by no means exceptional brownstone in Park Slope. A bigger place in Brooklyn Heights or worse, the West Village, will run you 2-3x that price easily. The median price per square foot in Manhattan is about $1,600. I am not sure you realize what VHCOL actually entails. Bu...
- Sun Mar 24, 2024 6:14 pm
- Forum: Investing - Theory, News & General
- Topic: 10% cash position excessive?
- Replies: 27
- Views: 2684
Re: 10% cash position excessive?
What is fairly risky? What is heavy tech exposure?
Do you work n tech and have 90% of your wealth in company stock, or do you have 90% in VTI, which one could also call risky and heavily exposed to tech?
Do you work n tech and have 90% of your wealth in company stock, or do you have 90% in VTI, which one could also call risky and heavily exposed to tech?
- Sun Mar 24, 2024 9:26 am
- Forum: Personal Finance (Not Investing)
- Topic: Can I really really afford a 3 million mortgage?
- Replies: 104
- Views: 9002
Re: Can I really really afford a 3 million mortgage?
It might be good to understand why your non-housing expenses are 8-12k monthly
1) why does it swing from 8-12k that’s a large range
2) why so high? Are the kids in an expensive private school? You can adjust that
1) why does it swing from 8-12k that’s a large range
2) why so high? Are the kids in an expensive private school? You can adjust that
- Sun Mar 24, 2024 8:44 am
- Forum: Personal Finance (Not Investing)
- Topic: Can I really really afford a 3 million mortgage?
- Replies: 104
- Views: 9002
Re: Can I really really afford a 3 million mortgage?
I mean, I'll go ahead and ask it: where are town homes $3 million? Even by the standards of VHCOL that's bananas. If you're in medicine, there have to be other options, even in normal VHCOL places. It does seem crazy (to me) to make $1M/year and feel stretched on a mortgage, especially given how many very, very, (very) nice places are less expensive. New York, London, Paris... VHCOL = you can drop $30 million+ on a townhouse in the right area. $3 million gets you a nice but by no means exceptional brownstone in Park Slope. A bigger place in Brooklyn Heights or worse, the West Village, will run you 2-3x that price easily. The median price per square foot in Manhattan is about $1,600. I am not sure you realize what VHCOL actually entails. Bu...
- Sun Mar 24, 2024 12:17 am
- Forum: Personal Finance (Not Investing)
- Topic: Can I really really afford a 3 million mortgage?
- Replies: 104
- Views: 9002
Re: Can I really really afford a 3 million mortgage?
You don’t have to buy a 4M home. Why not rent?
4M feels quite expensive…
What will 2M get you?
4M feels quite expensive…
What will 2M get you?
- Sat Mar 23, 2024 9:44 pm
- Forum: Personal Finance (Not Investing)
- Topic: Fidelity as a one stop shop
- Replies: 6053
- Views: 1036422
Re: Fidelity as a one stop shop
Today I encountered a strange bug with Fidelity CMA. I had a recurring transfer scheduled on the 19th of the month that I no longer needed. The recurring transfer for March has already been pushed so the next coming up showed April. So I went to the recurring transfer and deleted it and in the list of transfers it shows "You have no recurring transfers". However, in the cash management main view it now shows a new transaction from the recurring series to be completed 3/24. When I click on "Manage" to go into the series it still says "You have no recurring transfers" which is contradictory information and a bug. So, now it has created a brand new phantom transaction push that does not belong in the original rec...
- Sat Mar 23, 2024 9:41 pm
- Forum: Personal Finance (Not Investing)
- Topic: Fidelity as a one stop shop
- Replies: 6053
- Views: 1036422
Re: Fidelity as a one stop shop
Secondly - what is faster to push or pull EFT to Fidelity from external bank account? Did a pull and today a Fido rep said it will take 9 days to clear i.e. funds able to be withdrawn (insane). It depends what you want to do with the money. Money pulled to Fidelity is available immediately for investment but is subject to their clearance policy for withdrawal and transfer to other Fidelity accounts. Fidelity is not a bank so deposits are not subject to the same clearance policies that apply to banks. Money pushed to Fidelity is available for all purposes as soon as it arrives. How soon it arrives is largely dependent on the ACH processing schedule of whatever financial institution that is doing the pushing (e.g. I belong to a credit union ...
- Sat Mar 23, 2024 8:41 am
- Forum: Personal Finance (Not Investing)
- Topic: HCOL in retirement - mortgage vs. paid off vs. rent?
- Replies: 25
- Views: 2065
Re: HCOL in retirement - mortgage vs. paid off vs. rent?
Visit a lot to know where you’d like to buy. Perhaps rent a year to decide what neighborhood you want to live in.
I’d say buy, with a mortgage eventually. It gives you flexibility to refinance to lower rates when possible while maintaining liquidity.
Rationale for buying is to avoid inflation of rent being problematic or needing to move often.
Rationale for mortgage is that you keep more liquidity, even monthly costs are higher in the short term. You can continually evaluate whether to pre-pay or hold bonds depending on the rate difference
I’d say buy, with a mortgage eventually. It gives you flexibility to refinance to lower rates when possible while maintaining liquidity.
Rationale for buying is to avoid inflation of rent being problematic or needing to move often.
Rationale for mortgage is that you keep more liquidity, even monthly costs are higher in the short term. You can continually evaluate whether to pre-pay or hold bonds depending on the rate difference
- Fri Mar 22, 2024 10:42 pm
- Forum: Personal Finance (Not Investing)
- Topic: Unable to login to Morgan Stanley from Turbo Tax
- Replies: 12
- Views: 833
Re: Unable to login to Morgan Stanley from Turbo Tax
You should be able to type in the information manually
- Fri Mar 22, 2024 9:08 pm
- Forum: Personal Finance (Not Investing)
- Topic: Any downsides to the Fidelity CMA?
- Replies: 25
- Views: 2031
Re: Any downsides to the Fidelity CMA?
My direct deposit for paycheck arrive a day early, in fact
I’m a one-stop shopper at Fidelity
I’m a one-stop shopper at Fidelity
- Fri Mar 22, 2024 8:46 pm
- Forum: Personal Investments
- Topic: Dividend warning when buying
- Replies: 19
- Views: 2340
Re: Dividend warning when buying
That’s odd, considering that dividends are magical free money with no downside.
Joking aside, if it were for a taxable account I’d rather buy just post dividend than just before, if I was planning to buy quite soon. Better to avoid the taxable income now and defer to take it as gains later instead.
Joking aside, if it were for a taxable account I’d rather buy just post dividend than just before, if I was planning to buy quite soon. Better to avoid the taxable income now and defer to take it as gains later instead.
- Fri Mar 22, 2024 6:36 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
That's evident from what you're doing. But when I ask how and why a long value tilt diversifies market exposure in a useful way, you say it's because you're extracting independent sources of return .. I'm not trying to sell you on other factors – I'm asking why that wouldn't be true for any arbitrary grouping of stocks (esp. if the value premium were no longer there – as it isn't with size). The logical conclusion of this is then: why not just go straight to equal weight (every possible 'factor', known and unknown, all at once)? It's essentially a rhetorical question – unless there is a good answer. Because value is empirically a separate driver of return, and a random grouping of stocks is not Why and how? If you have 1000 stocks and rand...
- Fri Mar 22, 2024 2:10 pm
- Forum: Personal Investments
- Topic: Total US Stock Market ETF which distributes dividends annually?
- Replies: 5
- Views: 857
Re: Total US Stock Market ETF which distributes dividends annually?
Can you say more about why you desire such a product? Maybe we can come up with other creative solutions for youhenryphseven wrote: ↑Thu Mar 21, 2024 10:32 pm I'm thinking about investing in a Total US Stock Market ETF. I checked VTI, ITOT, SPTM, and SCHB, but all of them distribute dividends quarterly.
I wonder if there is any such ETF which distributes dividends annually?
Thank you.
- Thu Mar 21, 2024 7:45 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
So as jbowman's saying: if you want to cut the market along every line, and maximise these infinite hypothetical sources of return, you inevitably wind up with something like an equal-weight portfolio. That's where this logic leads. And with every stock individually rebalanced against every other, that is maximising your diversification and rebalancing bonus. But is it really any better? Is it more diversified in practice? How many businesses is Amazon, really? Does it give you 500 rolls of the dice, rather than 1? I don't want to cut the market along every line and I don't want exposure to infinite hypothetical sources of return. I have a preference for risk and I want exposure to well researched and persistent sources of return That's ev...
- Thu Mar 21, 2024 6:51 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
So as jbowman's saying: if you want to cut the market along every line, and maximise these infinite hypothetical sources of return, you inevitably wind up with something like an equal-weight portfolio. That's where this logic leads. And with every stock individually rebalanced against every other, that is maximising your diversification and rebalancing bonus. But is it really any better? Is it more diversified in practice? How many businesses is Amazon, really? Does it give you 500 rolls of the dice, rather than 1? I don't want to cut the market along every line and I don't want exposure to infinite hypothetical sources of return. I have a preference for risk and I want exposure to well researched and persistent sources of return That's ev...
- Thu Mar 21, 2024 5:18 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
I was referring to long-term outcomes like “what is the distribution of my cumulative wealth 30 years from now”rkhusky wrote: ↑Thu Mar 21, 2024 4:53 pmExcept that's not been true, as a quick PortfolioVisualizer run shows.
https://www.portfoliovisualizer.com/bac ... nmH6HXSyAk
And, adding SV to TSM hasn't reduced the variability either:
https://www.portfoliovisualizer.com/bac ... 90r921GYcl
Analyses like this, for example:
viewtopic.php?t=277161
- Thu Mar 21, 2024 3:52 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
I think you canjbowman wrote: ↑Thu Mar 21, 2024 2:16 pm
You can't decide that 2500 stocks = a single source of return and the same 2500 stocks with a different weighting = multiple sources of return. Either they are both are multiple sequences, or they both are (in aggregate across all their holdings) single sequences. Pick one.
It sounds like I am suggesting a person can do this:
Move 9 miles North
Move 1 mile East
I am saying that they are moving in two distinct directions, mostly North and a little East
You seem to be sayin that a person can only go in one direction, North.
How far north did the person go? 9 miles, and you don't have language to communicate East, because you don't think East exists
- Thu Mar 21, 2024 3:45 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
The model was made to explain data, it was not made in a vacuum.Logan Roy wrote: ↑Thu Mar 21, 2024 2:41 pm
I'm trying to get to the essence of what you're saying. If we just discussed factors within the confines of the model (which is just a theory), we'd never be able to question whether it made sense or not – objectively, or as something we should follow. It would rely on pure faith.
I think I have been pretty clear that I was not considering 3000 factors or equal-weight portfolios, so I'm, having a hard time understanding why your takeaway from my posts is that I am essentially saying that I consider 3000 factors and equal-weight portfolios.
- Thu Mar 21, 2024 3:43 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
I believe we already knew and expected that the value premium is smaller than the market premium. What are you trying to insinuate from your graph?
Shorting stocks is usually expensive, hence why most people wouldn't use a long-short fund.
Most people do not need a value factor exposure equal to 1. If a long-only fund gets a value factor exposure of 0.4-0.5, that's very fine, and much cheaper than shorting stocks
- Thu Mar 21, 2024 2:11 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
I went over that a few posts up. So if we get past that: how does overweighting certain stocks you already own improve diversification? I require a 10% portfolio return. If I invest in the MCW portfolio I am relying on a single sequence of returns to achieve my portfolio return hurdle. If I invest in a factor tilted portfolio I am relying on multiple sequences of return to achieve my required return hurdle. I am diversifying the risk that any single sequence of returns fails to meet my personal return goals This is not accurate. You're suggesting that investing in every company that is listed publicly is a "single source of return" because it gets lumped together in a single fund. By averaging everything together, you remove any ...
- Thu Mar 21, 2024 1:20 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
Diversification narrows the range of future outcomes in a manner that helps prevent the worst outcomes. Which is exactly what you get by diversifying into some value instead of only market. It narrows the range of future outcomes. I don't think "how well do I do when the market goes to zero" is a good benchmark here. How many times has the global stock market went to zero in the past? Never. I think that's a little too extreme of an example case to use as as a means to say value stocks are not useful diversifiers And here I thought that value stocks were more risky and had more variability, such that they should get higher expected return. Those characteristics would lead to widening the range of outcomes, not narrowing. This is ...
- Thu Mar 21, 2024 1:15 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
I went over that a few posts up. So if we get past that: how does overweighting certain stocks you already own improve diversification? I require a 10% portfolio return. If I invest in the MCW portfolio I am relying on a single sequence of returns to achieve my portfolio return hurdle. If I invest in a factor tilted portfolio I am relying on multiple sequences of return to achieve my required return hurdle. I am diversifying the risk that any single sequence of returns fails to meet my personal return goals This is not accurate. You're suggesting that investing in every company that is listed publicly is a "single source of return" because it gets lumped together in a single fund. By averaging everything together, you remove any ...
- Thu Mar 21, 2024 1:12 pm
- Forum: Investing - Theory, News & General
- Topic: More Evidence Against Factor Investing
- Replies: 650
- Views: 46331
Re: More Evidence Against Factor Investing
The market portfolio is purple. Made up of a bunch of blue and red stocks.
If you hold relatively more of the red stocks, your portfolio is more red than the market.
If you hold less of the red stocks your portfolio is more blue than the market.
Could we agree both of those portfolios are now exposed to a red vs blue difference, compared to the market? If blue does better than red, it’s going to be different?
If you hold relatively more of the red stocks, your portfolio is more red than the market.
If you hold less of the red stocks your portfolio is more blue than the market.
Could we agree both of those portfolios are now exposed to a red vs blue difference, compared to the market? If blue does better than red, it’s going to be different?