Search found 5474 matches

by muffins14
Wed Mar 27, 2024 7:39 pm
Forum: Investing - Theory, News & General
Topic: AVGV and etf trading in general question
Replies: 4
Views: 336

Re: AVGV and etf trading in general question

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
by muffins14
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?
by muffins14
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?]

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.
How are you managing your portfolio today?

Why do you want to change it?
by muffins14
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...
by muffins14
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

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.
As an example, do you mean that you might have:

$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?
by muffins14
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

Luxan wrote: Wed Mar 27, 2024 8:46 am
Is this a viable plan giving the short period left for compounding to take effect?
Should I be allocating a portion of my investment to bonds right away? or keep it 100% stocks to get the most possible return for the small window left?
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
by muffins14
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...
by muffins14
Wed Mar 27, 2024 6:58 am
Forum: Personal Consumer Issues
Topic: Favorite protein powder for shakes at home?
Replies: 75
Views: 3206

Re: Favorite protein powder for shakes at home?

YeahBuddy wrote: Wed Mar 27, 2024 5:18 am Optimum Nutrition whey protein - Extreme Milk Chocolate
I hope others appreciate your username and signature with this post.

Ain’t nothin but a peanut
by muffins14
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?
by muffins14
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

Beensabu wrote: Tue Mar 26, 2024 2:35 pm
rkhusky wrote: Tue Mar 26, 2024 2:24 pm Individual bonds and brokered CD’s won’t work either, because their values change with interest rates too.
Yes, but you can't see it.

Some people just can't standing seeing the price go lower.
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
by muffins14
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?

UpperNwGuy wrote: Tue Mar 26, 2024 4:15 pm Why are you folk consuming protein shakes? Why not just eat more protein at meals?
Fast, easy, cheap
by muffins14
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?

lessismore22 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?
I’ve been using the optimum nutrition whey forever. Chocolate
by muffins14
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

gavinsiu 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?
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 buying
by muffins14
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...
by muffins14
Tue Mar 26, 2024 6:54 am
Forum: Personal Investments
Topic: QQQ Question
Replies: 49
Views: 2858

Re: QQQ Question

jonbkray wrote: Tue Mar 26, 2024 6:43 am So, from what I'm understanding here, it *might* make sense to have a MAJORITY portion of a portfolio in VTSAX/FXAIX/VOO and then, maybe a small allocation into VGT/QQQm ?
I still don’t think QQQ is a reasonable long-term choice
by muffins14
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
by muffins14
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?
by muffins14
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

Logan Roy wrote: Mon Mar 25, 2024 9:26 pm So the endowment model is principally about diversification – which means giving you more paths to an adequate outcome, which means broader risk and revenue exposures. You get that right, then you're much safer using leverage.
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
by muffins14
Mon Mar 25, 2024 6:54 pm
Forum: Personal Investments
Topic: QQQ Question
Replies: 49
Views: 2858

Re: QQQ Question

jonbkray wrote: Mon Mar 25, 2024 6:51 pm
Thanks VGT is another option as well. Would this be a good addition, or should I stick with the VTSAX/FXAIX alone?
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
by muffins14
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...
by muffins14
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...
by muffins14
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...
by muffins14
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...
by muffins14
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...
by muffins14
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

AspirationalBH 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.
Most ETFs trade in just seconds, so there should not be much waiting when you are rebalancing or doing tax-loss harvesting
by muffins14
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...
by muffins14
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?

syngameon wrote: Sun Mar 24, 2024 6:46 pm You want to pay $3M for a townhouse where you share a wall with your neighbor? That's bonkers. I would do absolutely anything to avoid that situation including switching careers. But that's me.
Many townhomes have like 24 inches of brick between neighbors, likely pretty soundproof
by muffins14
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...
by muffins14
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?
by muffins14
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
by muffins14
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...
by muffins14
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?
by muffins14
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...
by muffins14
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 ...
by muffins14
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
by muffins14
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
by muffins14
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
by muffins14
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.
by muffins14
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...
by muffins14
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?

henryphseven 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.
Can you say more about why you desire such a product? Maybe we can come up with other creative solutions for you
by muffins14
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...
by muffins14
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...
by muffins14
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

rkhusky wrote: Thu Mar 21, 2024 4:53 pm
muffins14 wrote: Thu Mar 21, 2024 1:20 pm as an example: portfolios with stocks and long-term treasures term have less variance than portfolios with stocks and cash, even though cash has less variance than long-term bonds
Except 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
I was referring to long-term outcomes like “what is the distribution of my cumulative wealth 30 years from now”

Analyses like this, for example:
viewtopic.php?t=277161
by muffins14
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

jbowman 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.
I think you can

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
by muffins14
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

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.
The model was made to explain data, it was not made in a vacuum.

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.
by muffins14
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

nisiprius wrote: Thu Mar 21, 2024 3:04 pm
Part of the answer might be this. I took the value factor itself, from Kenneth R. French's "Data Library," here. I calculated growth by cumulative application of monthly returns, and charted it.
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
by muffins14
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 ...
by muffins14
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 ...
by muffins14
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 ...
by muffins14
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?