Search found 4637 matches

by stlutz
Thu Sep 20, 2018 11:13 pm
Forum: Investing - Theory, News & General
Topic: Chase You Invest, is low cost the new default?
Replies: 8
Views: 783

Re: Chase You Invest, is low cost the new default?

BofA, Chase, and FirstTrade all offer free equity trading. Vanguard offers free ETF trades. If you transfer $50K to Fidelity, they'll give you hundreds of free trades.

Lots of ways to get free trades nowadays. Too bad I hardly ever trade. :wink:
by stlutz
Thu Sep 20, 2018 11:09 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Forward P/E ratio - Are stocks highly valued?
Replies: 1
Views: 289

Re: S&P 500 Forward P/E ratio - Are stocks highly valued?

Two assumptions are required for the chart to hold: 1) The higher projected earnings for the next year have to pan out. 2) That market can't go up from here over the next year or so. In short, a lot of earnings growth over the next year or two is currently priced into the market. Reasonably so. Whet...
by stlutz
Thu Sep 20, 2018 11:04 pm
Forum: Investing - Theory, News & General
Topic: Best corporate long-term bond fund
Replies: 7
Views: 590

Re: Best corporate long-term bond fund

VWESX is an actively-managed fund that benchmarks itself against an index of A or better rated bonds. VLTCX is an index fund that tracks and index of BBB or better bonds. So, it takes on more credit risk. Note that VLTCX has a 1% purchase fee. If you go that route, it might be worth considering the ...
by stlutz
Thu Sep 20, 2018 10:57 pm
Forum: Investing - Help with Personal Investments
Topic: Did I buy the wrong Treasury?
Replies: 4
Views: 591

Re: Did I buy the wrong Treasury?

My state doesn't give any clear guidance on it. So on my state tax I simply deduct the "US government interest" amount listed on my 1099 for my individual Treasury holdings and leave it at that. Since I try to buy discount bonds when possible, I may be overpaying but life's too short to spend a bunc...
by stlutz
Thu Sep 20, 2018 7:41 pm
Forum: Investing - Theory, News & General
Topic: Momentum strategies and implementation costs
Replies: 1
Views: 176

Re: Momentum strategies and implementation costs

The default application of a momentum strategy is to use the MTUM ETF. https://www.ishares.com/us/products/251614/ishares-msci-usa-momentum-factor-etf It has trailed it's benchmark by .21% since inception. The ER is .15%. That would seem to indicate that trading costs take away about .06% of return....
by stlutz
Wed Sep 19, 2018 9:18 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 44
Views: 2152

Re: Why should bond duration = investment horizon?

I think the numbers that portray that are based on prior coupons that were much higher than today. And more recently a downward trend in interest rates. Having some concern for rate levels, going long when rates are high for example, should increase returns. Going long any time would not increase r...
by stlutz
Wed Sep 19, 2018 7:30 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 44
Views: 2152

Re: Why should bond duration = investment horizon?

The preference for short-term bonds among many has been driven by those who lived through the high inflation periods of the 60s and 70s. If I compare 60/40 portfolios for the 1960 to 1990 period, short-term bonds proved to be the notably superior holding--giving you a portfolio with higher returns a...
by stlutz
Wed Sep 19, 2018 7:14 pm
Forum: Investing - Theory, News & General
Topic: Why should bond duration = investment horizon?
Replies: 44
Views: 2152

Re: Why should bond duration = investment horizon?

Side note: on average, a constant maturity portfolio of intermediate bonds has historically had a total return over five years that is about 10-20% higher than the portfolio's initial YTM. Can you quote a source for that ? Skip the source and just go to the logic of it. Suppose I have a rolling 10 ...
by stlutz
Sun Sep 16, 2018 7:16 pm
Forum: Investing - Theory, News & General
Topic: What are the "best" factors?
Replies: 19
Views: 1123

Re: What are the "best" factors?

The two-year treasury futures contract currently has a DV01 of $35.77 per $200k contract. The 30-year ultra has a DV01 of $262.69 per $100k contract. If you have a fully-funded 30-year ultra treasury position, that $100k corresponds to 10 contracts at the risk tolerance level I specified, for an ov...
by stlutz
Sun Sep 16, 2018 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: SEC Settlement Distribution - Tax Implications?
Replies: 9
Views: 448

Re: SEC Settlement Distribution - Tax Implications?

Wouldn't this be like any other legal settlements which are generally taxable as "Miscellaneous Income"?
by stlutz
Sun Sep 16, 2018 3:24 pm
Forum: Investing - Theory, News & General
Topic: What are the "best" factors?
Replies: 19
Views: 1123

Re: What are the "best" factors?

Bet Against Beta is really nice IMHO. There's really strong theoretical arguments for it (leveraged constrained investors bid up high risk / high return assets in lieu of levering up low risk / low return assets to an appropriate risk and reward), studies have shown it to pop up in many environment...
by stlutz
Sun Sep 16, 2018 3:08 pm
Forum: Investing - Theory, News & General
Topic: What are the "best" factors?
Replies: 19
Views: 1123

Re: What are the "best" factors?

Cross-sectional momentum has a lot of academic support and great results, but is nigh impossible to capture absent a lot of negative alpha. MTUM has been doing it with positive alpha. https://www.portfoliovisualizer.com/factor-analysis?s=y®ressionType=1&symbols=MTUM&endDate=09%2F15%2F2018&factor...
by stlutz
Sun Sep 16, 2018 12:23 pm
Forum: Investing - Theory, News & General
Topic: What are the "best" factors?
Replies: 19
Views: 1123

Re: What are the "best" factors?

I agree with vineviz that VFMF is a great choice. At the end of the day, "factor investing" is just making a [reasonable] bet that what has repeatedly backtested well will do well in actual portfolios going forward. If you're going to go with that approach, might as well make a few different bets as...
by stlutz
Sat Sep 15, 2018 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: Critique my High-Risk Factor Portfolio
Replies: 30
Views: 2278

Re: Critique my High-Risk Factor Portfolio

I'm not a factor guy, but doing this with 10% of your portfolio seems very reasonable. Not sure that I would use the word "risky" as a matter of fact.
by stlutz
Sat Sep 15, 2018 8:30 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund now available
Replies: 83
Views: 22196

Re: Vanguard Ultra-Short-Term Bond Fund now available

I am curious is he now believes, given the 0.21% differential between the 2 and 10-year Treasury note rates, whether the yield curve is sufficiently flat to invest in this fund? Since I made that post I've become less enamored of "variable maturity" strategies. A closer look at the backtesting arou...
by stlutz
Sat Sep 15, 2018 8:22 pm
Forum: Investing - Help with Personal Investments
Topic: CD rates--what to do?
Replies: 45
Views: 6298

Re: CD rates--what to do?

I had a five year ladder, but in this rising interest rate environment I couldn't bring myself to commit funds for 5 years. I know, no one can predict future interest rates. I guess I'm just weak
Would you invest in something like Vanguard Short-Term Bond fund?
by stlutz
Wed Sep 12, 2018 11:41 pm
Forum: Investing - Help with Personal Investments
Topic: Municipal Bond Ladder / Tax Efficient Allocation of New Funds
Replies: 23
Views: 1853

Re: Municipal Bond Ladder / Tax Efficient Allocation of New Funds

It's not that hard to put together a muni bond ladder yourself at Fidelity once you learn more about muni bonds in general (e.g. call provisions, taxation of things like market discount etc.). If you're not willing to learn about such things, then I wouldn't let anyone put a muni bond ladder togethe...
by stlutz
Wed Sep 12, 2018 11:32 pm
Forum: Investing - Theory, News & General
Topic: Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders
Replies: 18
Views: 4751

Re: Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders

I have been getting price improvements from Schwab and Vanguard. I guess you won't be getting these at Robinhood. Not true. You can (and will) still get price improvement at Robinhood. They aren't any different from Schwab who also receives payments for order flow (Fidelity and Vanguard do not). Th...
by stlutz
Tue Sep 11, 2018 11:19 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard ETF to Fidelity ETF
Replies: 9
Views: 760

Re: Vanguard ETF to Fidelity ETF

You don't need to sell your Vanguard ETFs to transfer them to Fidelity. Just transfer them over and keep holding onto them. Then no taxes are involved.
by stlutz
Sun Sep 09, 2018 11:04 am
Forum: Investing - Theory, News & General
Topic: Put Options
Replies: 27
Views: 1149

Re: Put Options

buying put options is a suckers bet. they are way overpriced.
What would be the better way to try and profit from a significant decline in AMZN?
by stlutz
Thu Sep 06, 2018 11:55 pm
Forum: Investing - Theory, News & General
Topic: Good time to do value investing?
Replies: 37
Views: 2479

Re: Good time to do value investing?

More seriously, historically the value premium has been larger and more dependable in down markets than in up markets. So if you think the market is going to do poorly over the next year or two, it could be a good time for value.
by stlutz
Thu Sep 06, 2018 11:53 pm
Forum: Investing - Theory, News & General
Topic: Good time to do value investing?
Replies: 37
Views: 2479

Re: Good time to do value investing?

I wlll say that if I ever see a post where nedsaid throws in the towel on value, I will treat that good buy signal. :mrgreen:
by stlutz
Wed Sep 05, 2018 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: Opening a new Checking Account/ Bank of the Internet
Replies: 2
Views: 481

Re: Opening a new Checking Account/ Bank of the Internet

No experience but B of I has been around for a long time. They have 55 reviews at depositaccounts.com:

https://www.depositaccounts.com/banks/b ... ml#reviews
by stlutz
Mon Sep 03, 2018 2:49 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
Replies: 734
Views: 69622

Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)

does VTSAX's tax efficiency outweigh the the zero expense ratio of FZROX? Is Fidelity likely to transition to the same tax efficiency formula once Vanguard's patent expires? I would prefer better tax efficiency over [possibly] saving .03%. In a taxable account at Fidelity, ITOT (iShares Total US) a...
by stlutz
Sun Sep 02, 2018 12:27 pm
Forum: Investing - Theory, News & General
Topic: Is Small-Cap Value's 47.2% Turnover Rate Troubling?
Replies: 28
Views: 4421

Re: Is Small-Cap Value's 47.2% Turnover Rate Troubling?

This paper calculated the market impact costs on the MSCI World Minimum Volatility factor index as being about 17 bps per year.
by stlutz
Sat Sep 01, 2018 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: What are your goals when you change your bond funds?
Replies: 36
Views: 2301

Re: What are your goals when you change your bond funds?

For me it's to outperform what is my default bond choice--that is, what I would use if I wanted to make one-time set it and forget it decision. For me, that means I compare to SCHR (or VGIT which is the same thing).
by stlutz
Fri Aug 31, 2018 10:03 pm
Forum: Investing - Theory, News & General
Topic: "Mutual Funds and Securities Lending"
Replies: 32
Views: 1633

Re: "Mutual Funds and Securities Lending"

Quite honestly I guess I see that the setup actually has the short-seller bearing more of the risk. The whole arrangement depends on trust between big financial institutions to make the whole thing work. Suppose that trust breaks down and the short seller doesn't return the shares. The fund gets to ...
by stlutz
Fri Aug 31, 2018 9:57 pm
Forum: Investing - Theory, News & General
Topic: "Mutual Funds and Securities Lending"
Replies: 32
Views: 1633

Re: "Mutual Funds and Securities Lending"

The fund never sees the collateral. Check out the annual reports - it is not on the balance sheet. Thanks for the informative post! However, I think I disagree with that one statement. I am taking a look at the annual report for the Fidelity Smallcap Index fund. I actually do see the holding in the...
by stlutz
Fri Aug 31, 2018 12:20 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard AMT-free National Municipal Bond Fund
Replies: 139
Views: 27479

Re: New Vanguard AMT-free National Municipal Bond Fund

VTEB takes on more duration risk and slightly less credit risk than than actively managed intermediate term fund. The average stated maturity of VTEB is 13.6 years. It's 8.7 years for VWIUX. VWIUX has somewhat more bonds rated below AA than does VTEB. Because VTEB is cap-weighted, it's portfolio has...
by stlutz
Wed Aug 29, 2018 12:21 am
Forum: Investing - Help with Personal Investments
Topic: What do you know about LPL Financial?
Replies: 26
Views: 2404

Re: What do you know about LPL Financial?

I have family members who use an advisor who uses LPL. I haven't heard any complaints, but if they did have issues they would expect their advisor to address it.
by stlutz
Tue Aug 28, 2018 7:41 am
Forum: Investing - Help with Personal Investments
Topic: Purchasing ETF in odd lots at Interactive Brokers?
Replies: 6
Views: 474

Re: Purchasing ETF in odd lots at Interactive Brokers?

No concerns. If you used Vanguard/Fidelity/Schwab that is how your order would be routed.
by stlutz
Mon Aug 27, 2018 11:03 pm
Forum: Investing - Help with Personal Investments
Topic: Purchasing ETF in odd lots at Interactive Brokers?
Replies: 6
Views: 474

Re: Purchasing ETF in odd lots at Interactive Brokers?

What exactly did you ask them? If you asked about trading ETFs on an US exchange, they may have answered based on this: https://www.interactivebrokers.com/en/trading/orders/oddLotOrders.php?ib_entity=llc That page says that if you want to route your order to an exchange, it needs to be a round lot. ...
by stlutz
Sat Aug 25, 2018 8:39 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: TIPS Versus Nominal Bonds
Replies: 46
Views: 3973

Re: Larry Swedroe: TIPS Versus Nominal Bonds

The spread between TIPS and nominal bonds today seems reasonable. I suppose the Philly Fed survey backs that up. Back in early 2016 when the spread was under 1.5%, that to me was a screaming buy signal at that wasn't a credible 10 year projection to me. There have been a few instances historically w...
by stlutz
Fri Aug 24, 2018 9:26 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: TIPS Versus Nominal Bonds
Replies: 46
Views: 3973

Re: Larry Swedroe: TIPS Versus Nominal Bonds

The statement that TIPS protect you against "unexpected" inflation isn't always that helpful. TIPS actually protect you against actual inflation (and usually provide some additional coupon in addition). If I buy a TIPS issue today at 100 and inflation is 5% over the next year, the par value of the b...
by stlutz
Thu Aug 23, 2018 12:07 am
Forum: Forum Issues and Administration
Topic: Rating system for posts/posters ?
Replies: 60
Views: 2539

Re: Rating system for posts/posters ?

And on the other hand you have pretty useless chaps who are a huge time sink at best.
Like stlutz? :?
by stlutz
Thu Aug 23, 2018 12:05 am
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19921

Re: Treasury Bonds are the Only Bonds You Need

Thanks for the reply, Kevin. And just to be clear on my perspective, I have no dog in the fight over what advice is "standard". I've always used intermediate term bonds and am just exploring whether I should have actually been doing what vineviz proposes. A few additional thoughts. First, nobody acc...
by stlutz
Wed Aug 22, 2018 11:11 pm
Forum: Investing - Help with Personal Investments
Topic: Good bond duration for low risk, younger investor
Replies: 16
Views: 1207

Re: Good bond duration for low risk, younger investor

If you want to buy some individual treasury bonds, I would just do so at Vanguard as opposed to doing via Treasury Direct. VG has no commissions to buy or sell, and bid-ask spreads on Treasury bonds are quite small. Now, you could also buy Vanguard's Long-Term Treasury index fund/ETF (VGLT) and acco...
by stlutz
Wed Aug 22, 2018 11:00 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19921

Re: Treasury Bonds are the Only Bonds You Need

Long-term nominal bonds account for expected inflation. TIPS provide protection against unexpectedly high inflation; they hurt you relative to nominals if inflation is unexpectedly low. Some investors deal with unexpectedly high inflation by using other assets, as the Permanent Portfolio does with g...
by stlutz
Wed Aug 22, 2018 10:49 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Zero ER Funds are underperforming their equivalent premium class index funds
Replies: 59
Views: 6901

Re: Fidelity Zero ER Funds are underperforming their equivalent premium class index funds

Nothing to add except to say that I love this thread. One of the best things about the forum is the desire to scrutinize everything--including someone else's scrutiny. :sharebeer
by stlutz
Tue Aug 21, 2018 10:37 pm
Forum: Investing - Theory, News & General
Topic: Treasury Bonds are the Only Bonds You Need
Replies: 188
Views: 19921

Re: Treasury Bonds are the Only Bonds You Need

Exactly. This is the point that vineviz keeps ignoring. One should explain why the duration should be consistent with the investment horizon, rather than just keep stating it over and over and over. Just for the purposes of discussion (not because I necessarily agree): "Investment horizon" seems to...
by stlutz
Tue Aug 21, 2018 7:33 pm
Forum: Investing - Theory, News & General
Topic: 60/40 vs 100% with Trailing Stop Loss
Replies: 36
Views: 2280

Re: 60/40 vs 100% with Trailing Stop Loss

I know the big question is when to get back in the market, but at least it prevents a major loss and gives me time to evaluate the situation while my investment sits drawing 1.7% interest or I can move to a bond fund until I think the worst is over, and then ease back in. I've seen waaaay too many ...
by stlutz
Tue Aug 21, 2018 6:35 pm
Forum: Investing - Theory, News & General
Topic: What non-Vanguard ETFs will you be looking to buy?
Replies: 62
Views: 6487

Re: What non-Vanguard ETFs will you be looking to buy?

Ones that should be considered: SCHP - Schwab's Total TIPS ETF (for those who want broad TIPS coverage in an ETF wrapper) IUSB - iShares Total Bond Market incl. High YIeld (for those who following the Rick Ferri approach of including high yield bonds in their allocation) IXUS - iShares Total Interna...
by stlutz
Mon Aug 20, 2018 10:51 pm
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 91
Views: 10362

Re: Vanguard predicts 10 year equity returns

Do any of the predominant models used to forecast future stock returns specifically incorporate growth in earnings? I don't recall ever seeing one that did. I would think that earnings growth will have a much bigger impact on future returns than just about anything else, including valuations, inter...
by stlutz
Mon Aug 20, 2018 10:40 pm
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 91
Views: 10362

Re: Vanguard predicts 10 year equity returns

Why so? a) Aswath Damodaran who is perhaps the world's foremost authority on valuation estimates the current equity risk premium vs. long-term T-bonds as being 4.78%... b) One highly simplistic way to estimate real returns is to just look at 1/PE... A brief look under the hood of Damodaran's calcs ...
by stlutz
Sun Aug 19, 2018 10:57 pm
Forum: Personal Finance (Not Investing)
Topic: Choosing Best Annuity Option
Replies: 6
Views: 759

Re: Choosing Best Annuity Option

I don't know that there is one "best" option. Given that you a) have significant assets, and b) those assets are tied to financial markets, I would probably take the 100% option on the joint/survivor. It pays a little less than than the other options, but having some additional consistent income for...
by stlutz
Sun Aug 19, 2018 5:36 pm
Forum: Investing - Theory, News & General
Topic: According to BKM, value and small firms may do worse in economic downturn
Replies: 24
Views: 1229

Re: According to BKM, value and small firms may do worse in economic downturn

One of the questions I have trouble getting a clear response to is whether we are talking about individual firms or firms in aggregate? Suppose I broke the economy into two equal halves: large and small. Let's assume revenue but it could be done by market cap, book value, total assets, cash flow et...
by stlutz
Sun Aug 19, 2018 2:33 pm
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 91
Views: 10362

Re: Vanguard predicts 10 year equity returns

Why so? a) Aswath Damodaran who is perhaps the world's foremost authority on valuation estimates the current equity risk premium vs. long-term T-bonds as being 4.78%. Add the bond yield in and you get about 8% nominal or 6% real. http://pages.stern.nyu.edu/~adamodar/ b) One highly simplistic way to...
by stlutz
Sun Aug 19, 2018 1:52 pm
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 91
Views: 10362

Re: Vanguard predicts 10 year equity returns

One problem in these threads is that we all talk as if we are completely uninvolved in the setting of market prices. We aren't. The ratio of equity assets to fixed income assets globally is about 40/60. Most people here are tilted very much the opposite direction. That means that we are saying that ...
by stlutz
Sun Aug 19, 2018 1:29 pm
Forum: Investing - Theory, News & General
Topic: According to BKM, value and small firms may do worse in economic downturn
Replies: 24
Views: 1229

Re: According to BKM, value and small firms may do worse in economic downturn

One of the questions I have trouble getting a clear response to is whether we are talking about individual firms or firms in aggregate? Suppose I broke the economy into two equal halves: large and small. Let's assume revenue but it could be done by market cap, book value, total assets, cash flow etc...