Search found 4540 matches

by stlutz
Sun Jul 22, 2018 11:27 pm
Forum: Investing - Theory, News & General
Topic: Bonds: VG Treasury Funds vs ETFs vs Ladders
Replies: 5
Views: 491

Re: Bonds: VG Treasury Funds vs ETFs vs Ladders

Once you get a ladder fully in place, you should expect to be doing noticeably better than a fund with the same average duration as your ladder.
How do you figure that?
by stlutz
Sun Jul 22, 2018 2:20 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 60
Views: 4039

Re: Larry Swedroe: What Makes Factors Endure

Wow, the Nedsaid effect works even with ETFs based on indexing. That is what you sell tends to outperform what you bought to replace it. The sells tend to outperform the buys at a 2:1 or even a 3:1 ratio. Goshdarn it anyway, I wish I could trademark the "Nedsaid effect." An entire new investment st...
by stlutz
Sun Jul 22, 2018 2:18 pm
Forum: Investing - Help with Personal Investments
Topic: Smart Beta ETFs in my Roth IRA
Replies: 7
Views: 281

Re: Smart Beta ETFs in my Roth IRA

IJS, SLYV, and VIOV all trade with about the same spreads. IJS has the highest ER but also generates the most securities lending revenue of the three. The real-world holding cost of all 3 is about the same.
by stlutz
Sun Jul 22, 2018 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: Smart Beta ETFs in my Roth IRA
Replies: 7
Views: 281

Re: Smart Beta ETFs in my Roth IRA

The nice thing about doing it in a Roth is that you can update your selections later w/o tax consequence. The bad thing about doing it in a Roth is that you don't have tax consequences forcing you to stay the course with your decisions. I would either go entirely with a multi-factor fund (I think VF...
by stlutz
Sun Jul 22, 2018 12:26 pm
Forum: Investing - Help with Personal Investments
Topic: Schwab bid/ask spread
Replies: 20
Views: 1543

Re: Schwab bid/ask spread

I don't know if the trading desk can benefit you, but in your situation you can do the experiment yourself a few times and see. I'd treat it as a form of entertainment since it would cost about the same as going to a movie and dinner before. +1 On a forum like this you can get opinions from a lot o...
by stlutz
Sun Jul 22, 2018 12:16 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 60
Views: 4039

Re: Larry Swedroe: What Makes Factors Endure

It's kind of funny, when I clicked on the thread to see what Nedsaid wrote, it actually dumped me a few posts above where I had said,"But I think its the case that the computers will create different anomalies in the future than have existed in the past. The past ones are pretty easy for them to arb...
by stlutz
Sun Jul 22, 2018 12:12 pm
Forum: Investing - Help with Personal Investments
Topic: Help with tax-loss harvesting muni bonds
Replies: 8
Views: 568

Re: Help with tax-loss harvesting muni bonds

I'll be in the minority of responses, but I don't think it's worth the trouble to take a 1.8% loss. The net gain that you get from the move over time will be less than other random factors that result from the change (e.g. having more concentration in NY bods). Those random factors could be positive...
by stlutz
Sun Jul 22, 2018 8:00 am
Forum: Investing - Help with Personal Investments
Topic: Schwab bid/ask spread
Replies: 20
Views: 1543

Re: Schwab bid/ask spread

If you're trading $1M at a time, then you want the largest, most liquid option for each asset class/sub-class. I would read the sections about liquidity for each ETF you are considering at etf.com (e.g. etf.com/schr). In many cases it will be neither the Schwab nor the iShares one.
by stlutz
Sat Jul 21, 2018 10:51 am
Forum: Investing - Theory, News & General
Topic: Is SEC yield of any value?
Replies: 23
Views: 2682

Re: Is SEC yield of any value?

In a rising short-term rate environment the SEC yield becomes practically useless as a short-term predictor of fund distributions, as it is reflecting current short-term rates and not the coupon rates of the bonds in the fund's portfolio. It is only after the interest rates stop rising and the bond...
by stlutz
Sat Jul 21, 2018 10:46 am
Forum: Investing - Theory, News & General
Topic: Value Stocks and Margin Loans as Inflation Hedges
Replies: 8
Views: 511

Re: Value Stocks and Margin Loans as Inflation Hedges

The problem with margin loans is that the rate is variable. Inflation goes up and rates go up--you don't gain anything. That contrasts with a 30 year fixed rate mortgage. With stock selection, the problem with just using "value stocks" is that this group is composed of companies with a wide variety ...
by stlutz
Sat Jul 21, 2018 12:00 am
Forum: Investing - Theory, News & General
Topic: Why Take Risk on Equity Side?
Replies: 78
Views: 5027

Re: Why Take Risk on Equity Side?

a blend of government bonds like intermediate term Treasuries and stocks is preferable to holding corporate bonds, including high-yield bonds, and data support this view. From 1979 to current, high-yield bonds had a Sharpe ratio of .53, whereas a blend of 30% total stock market and 70% intermediate...
by stlutz
Fri Jul 20, 2018 10:47 pm
Forum: Investing - Theory, News & General
Topic: Is SEC yield of any value?
Replies: 23
Views: 2682

Re: Is SEC yield of any value?

There is often times confusion on what bond funds are paying income on. They are not paying income based on the coupons. They are also not paying income based on the *current* yield-to-maturity of the bonds in the portfolio. The distinction is subtle, but they pay income based on the yield to maturi...
by stlutz
Fri Jul 20, 2018 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Ladder Managed Account
Replies: 31
Views: 1470

Re: Bond Ladder Managed Account

But I feel there's a disconnect on discussion of a bond ladder versus an bond mutual fund when interest rates are expected to rise. The problem is getting over-fixated on the fact that at maturity, you get the par value of the bond back. But that's true if you own the bond individually or if a mutu...
by stlutz
Fri Jul 20, 2018 6:57 pm
Forum: Investing - Theory, News & General
Topic: Why Take Risk on Equity Side?
Replies: 78
Views: 5027

Re: Why Take Risk on Equity Side?

The number that gets thrown around is long term investment grade return 0.3% more than long term treasuries. There is some dispute about the validity of this due to the duration of two the data series not matching. In this paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2563482), it is a...
by stlutz
Fri Jul 20, 2018 6:43 pm
Forum: Investing - Theory, News & General
Topic: Why Take Risk on Equity Side?
Replies: 78
Views: 5027

Re: Why Take Risk on Equity Side?

Does anyone know what percent of this fund/ETF [Vanguard Total Bond Market Fund] is HY corporate bonds?
As a side note, if someone wanted a Total Bond ETF that does include the high yield market in it's definition of "Total", you can use the iShares ETF, IUSB.
by stlutz
Fri Jul 20, 2018 12:04 am
Forum: Personal Finance (Not Investing)
Topic: Transferring Money and Closing Bank Account
Replies: 12
Views: 1000

Re: Transferring Money and Closing Bank Account

Why not write a check? Then close the old account and take the remaining few dollars as cash.
by stlutz
Thu Jul 19, 2018 10:07 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Ladder Managed Account
Replies: 31
Views: 1470

Re: Bond Ladder Managed Account

A bond ladder is simply a collection of individual bonds. Over time the individual bond prices fluctuate and as they approach maturity they get closer to par value. A bond fund is simply a collection of individual bonds. Over time the individual bond prices fluctuate and as they approach maturity th...
by stlutz
Thu Jul 19, 2018 9:57 pm
Forum: Investing - Help with Personal Investments
Topic: Option Puts on SPY [SPDR S&P 500 ETF]
Replies: 8
Views: 560

Re: Option Puts on SPY [SPDR S&P 500 ETF]

Historically, there has been a bear market every 3-4 years. So, yes, there's actually a pretty good chance there will be a big market drop between now and 2020. Two challenges for the buyer of the put: a) At what level doe the bear start--at today's S&P 500 or after it has gone up another 25%? Obvio...
by stlutz
Thu Jul 19, 2018 8:18 pm
Forum: Investing - Theory, News & General
Topic: Why Take Risk on Equity Side?
Replies: 78
Views: 5027

Re: Why Take Risk on Equity Side?

Here’s a comparison since 1979: 1/3 stocks, 1/3 treasuries, 1/3 junk bonds Vs. 1/2 stocks, 1/2 treasuries https://www.portfoliovisualizer.com/bac ... hYield1=33 Pretty similar returns with 34% instead of 50% stocks. The question is, what would have someone “gained” with the former approach? The sta...
by stlutz
Tue Jul 17, 2018 12:01 am
Forum: Investing - Help with Personal Investments
Topic: Use TIPS for multi-year RMDs as a risk reduction strategy?
Replies: 3
Views: 495

Re: Use TIPS for multi-year RMDs as a risk reduction strategy?

With the assets you have, your plan works just fine.

An alternative approach is to just settle on a stock/bond split that you are actually comfortable with (maybe 50/50 or 40/60) and put a large chunk of the bond portion into TIPS.
by stlutz
Sun Jul 15, 2018 6:01 pm
Forum: Investing - Theory, News & General
Topic: In defense of short-term treasuries
Replies: 114
Views: 6582

Re: In defense of short-term treasuries

It looks like my response got lost in the aether... Anyway. I'm not worried about short term inflation. For long-term inflation I plan to rely on equities. As Kevin noted, there doesn't seem to be much of a term premium for IT treasuries. I think that my analysis showed that the benefits of ST trea...
by stlutz
Sun Jul 15, 2018 2:39 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5994

Re: Larry Swedroe: Look Past Expense Ratios

Could I make a friendly suggestion that we stop dropping crucial modifiers when talking about "premiums" or "factors"? A "risk" premium indicates that one should expect asset A to return more than asset B because asset A is more risky and most investors should prefer asset B despite the lower expect...
by stlutz
Sun Jul 15, 2018 9:58 am
Forum: Investing - Help with Personal Investments
Topic: Bond Portfolio
Replies: 11
Views: 1204

Re: Bond Portfolio

Instead of starting out by analyzing where you think the market is wrong (i.e. there is no value in any bonds beyond 2-3 years), I would start out by understanding what the market is saying. The current shape of the yield curve indicates that the market thinks there is a strong possibility of a rece...
by stlutz
Fri Jul 13, 2018 9:39 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Look Past Expense Ratios
Replies: 71
Views: 5994

Re: Larry Swedroe: Look Past Expense Ratios

Larry Swedroe sent me this PM: sorry but this is also wrong: In order to believe that market beta has a persistent and worthwhile premium, one needs to believe only that businesses are capable of making money and that (in a loosely-coupled general sort of long-term way) stocks of money-making compa...
by stlutz
Fri Jul 13, 2018 9:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3385

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

...but from what I've seen and experienced, I'd say that a well diversified portfolio of P2P loans is close to the same risk as investment grade corporate bonds. Consumer credit, in general, is far less volatile than high-yield bonds. The former was in the black in 2008, whereas Vanguard's high-yie...
by stlutz
Fri Jul 13, 2018 9:18 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3385

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Sorry but just had to post this, once again showing how people post without actually knowing what they are talking about yet making very declarative statements. I just received an email today from Stone Ridge with a new paper entitled An Alternative to Bonds in a Modern Portfolio, and of course LEN...
by stlutz
Fri Jul 13, 2018 9:00 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3385

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

I generally view the value of the these threads as a way to illuminate different ways of evaluating an investment, so allow me to ask for a clarification from Larry/Dave/willthrill or whoever wants to opine. I proposed that the best way to compare the risk of otherwise similar fixed income investmen...
by stlutz
Fri Jul 13, 2018 7:54 pm
Forum: Investing - Help with Personal Investments
Topic: If my brokerage debit card is used fraudulently, who's responsible for margin interest charges?
Replies: 12
Views: 890

Re: If my brokerage debit card is used fraudulently, who's responsible for margin interest charges?

I would read their FAQ on the Cash Manager tool closely.

One helpful statement:
Note: Available margin or non-core money market funds are used to cover overdrafts only if you select that as an option.
by stlutz
Wed Jul 11, 2018 11:59 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on using an ETF for TIPS investing
Replies: 22
Views: 1861

Re: Thoughts on using an ETF for TIPS investing

PalmQueen: Since you are looking at switching from a money market fund to a TIPS fund, you should be aware that TIPS do fluctuate in value from year to year due to changes in real interest rates. Vanguard's TIPS fund was down 8.61% in 2013. Now, that's not to scare you away--it's simply to make sure...
by stlutz
Wed Jul 11, 2018 11:53 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3385

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

When I buy a CD from the bank, my principal and earned interest are guaranteed, not only by the bank but by the US government. If I buy a Treasury bond, I can be super-highly confident of getting paid back as well. The next level of risk in fixed income would be municipal bonds. Default rates are ex...
by stlutz
Wed Jul 11, 2018 10:16 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3385

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

one other thought to add that again showing people make statements they have no clue about but speak as if they do, making declarative statements such as "That means P2P is left with loans that banks don't want to make, which are more likely (though not always) to be ones that involve more risk." t...
by stlutz
Wed Jul 11, 2018 7:37 pm
Forum: Investing - Theory, News & General
Topic: yield curve inversion
Replies: 48
Views: 4481

Re: yield curve inversion

Going back to this question I raised last week: A question partially raised by another thread that's going on now as well. Is there any suggestion that inverting the curve *causes* a recession to occur? Or would the claim simply be that long-term rates tend to be a little "smarter" in economic forec...
by stlutz
Wed Jul 11, 2018 6:47 pm
Forum: Investing - Theory, News & General
Topic: Selling Treasuries before maturity
Replies: 11
Views: 1139

Re: Selling Treasuries before maturity

It's also been shared that Schwab seems to offer best Treasury pricing on small quantities--just the opposite of Fidelity (and I think Vanguard too).
And I've given some friendly feedback to Fidelity about the matter... :P
by stlutz
Tue Jul 10, 2018 11:27 pm
Forum: Investing - Theory, News & General
Topic: Selling Treasuries before maturity
Replies: 11
Views: 1139

Re: Selling Treasuries before maturity

The bid/ask spread for this relatively small quantity was about 15 basis points (0.15 percentage points Was this during trading hours? I've noticed that quoted spreads on Fidelity are smaller during trading hours than if I look in the evening--generally about 8 basis points for small lots. But thos...
by stlutz
Tue Jul 10, 2018 10:49 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds
Replies: 50
Views: 3385

Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

This is the problem I have with the marketing of these funds on BH. On one hand, when we are talking about returns, we have the statement, I agree that financialization is a big concern as well, but when there is a strong risk story behind a premium, then a rational market should perhaps cut the pre...
by stlutz
Sun Jul 08, 2018 8:31 pm
Forum: Investing - Theory, News & General
Topic: Is it contradictory to be a Boglehead and have substantial allocation towards SCV?
Replies: 30
Views: 2241

Re: Is it contradictory to be a Boglehead and have substantial allocation towards SCV?

People on this board adopt all sorts of tilts. The global stock market is about 40% stocks. Most people have higher equity allocations than that. Is that deviation from the market contradictory? The global equity market is about 53% US stocks. Most people here have a higher weighting than this. Is t...
by stlutz
Sun Jul 08, 2018 12:25 pm
Forum: Personal Consumer Issues
Topic: What methods are you using to deterimine price to offer on new cars
Replies: 15
Views: 1351

Re: What methods are you using to deterimine price to offer on new cars

E-mail dealers and ask them for an out-the-door price (including all taxes, fees etc.) on the exact vehicle you are looking at. You can take the best offer or have them start negotiating against each other as outlined here: https://www.bogleheads.org/forum/viewtopic.php?t=124638 One other note, when...
by stlutz
Thu Jul 05, 2018 7:46 pm
Forum: Investing - Theory, News & General
Topic: Vanguard to offer non-Vanguard ETFs commission-free
Replies: 124
Views: 9417

Re: Vanguard to offer non-Vanguard ETFs commission-free

Are you sure that is a net cost to execute trades? I always thought there was some margin in the trades themselves for the broker. If you run a lean ship, that may cover the cost. For the Robinhoods of the world who accept payment for order flow, there is. Vanguard doesn't accept such payments so t...
by stlutz
Wed Jul 04, 2018 10:34 pm
Forum: Investing - Theory, News & General
Topic: Fidelity cash position
Replies: 53
Views: 5894

Re: Fidelity cash position

You probably don't even have to do that, as Fidelity will automatically pull from other MM funds if there isn't enough in the settlement fund. Another forum member pointed this out, and while I haven't tested it on a large scale, I was $0.01 short in my settlement fund once, and that was pulled fro...
by stlutz
Wed Jul 04, 2018 10:30 pm
Forum: Investing - Theory, News & General
Topic: Jack Bogle is not a "buy&hold at any price goose", he looks at valuations, he sold his stocks in year 2000
Replies: 48
Views: 6589

Re: Jack Bogle is not a "buy&hold at any price goose", he looks at valuations, he sold his stocks in year 2000

I've noted in the past that a lot of the "experts" that we like around here are not actually all that adverse to some limited market timing. Our religious fervor about it does not emanate from Boglehead writers. The valid reason that folks here are absolutely against this type of market timing is th...
by stlutz
Wed Jul 04, 2018 10:21 pm
Forum: Investing - Theory, News & General
Topic: Yield curves and bond returns
Replies: 31
Views: 2573

Re: Yield curves and bond returns

By my calculations, the "expected return" bump back up a bit if you extend way out to like 30 years. And I guess that would pretty much always be the case if the yield curve is upward sloping. Another way to put it is that term risk is generally "worth it" absent higher inflation (which is a big and...
by stlutz
Wed Jul 04, 2018 7:01 pm
Forum: Investing - Theory, News & General
Topic: Switch to LT bonds in this falling rate environment?
Replies: 43
Views: 2722

Re: Switch to LT bonds in this falling rate environment?

And I'm somewhat puzzled by the reference to 2006-2007 as a period when the fed raised the FFR numerous times. The FFR actually begin increasing in Jul 2004, and continued until Jul 2006. During much of this time, the 10-year yield declined or was relatively unchanged. Thanks for the clarification/...
by stlutz
Wed Jul 04, 2018 5:16 pm
Forum: Investing - Help with Personal Investments
Topic: bond fund - short, intermediate, long
Replies: 3
Views: 270

Re: bond fund - short, intermediate, long

Is this sufficient, or should I also have short and long covered?
That is sufficient. Adding a combo of short and long term in the appropriate percentages would, over the long term, perform the same as just holding the intermediate fund.
by stlutz
Wed Jul 04, 2018 4:16 pm
Forum: Investing - Theory, News & General
Topic: Fidelity cash position
Replies: 53
Views: 5894

Re: Fidelity cash position

...does it have 30-day minimum retention and if I sell during market hours, do I have access to the cash to trade the next second? I think the answer is "no" to the first question. I think the answer to the second question could be "yes" since money market funds settle the same day while other trad...
by stlutz
Wed Jul 04, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: yield curve inversion
Replies: 48
Views: 4481

Re: yield curve inversion

When the curve drops below 0, the yield curve between 2-year and 10-year maturity is inverted. Using this measure, the yield curve did always invert before a recession, but sometimes quite awhile before, and in 3 out of 5 receissions, it had uninverted before the recession officially started. A que...
by stlutz
Wed Jul 04, 2018 2:43 pm
Forum: Investing - Theory, News & General
Topic: yield curve inversion
Replies: 48
Views: 4481

Re: yield curve inversion

Yield curve inversion is a very clear technical description; it's hard to imagine the definition being mushy enough to allow for significant shifting. Do you have evidence backing the impression that the definition is shifting? I think back in the olden days everybody would compare the 3 month T-bi...
by stlutz
Wed Jul 04, 2018 2:39 pm
Forum: Investing - Theory, News & General
Topic: Fidelity cash position
Replies: 53
Views: 5894

Re: Fidelity cash position

SPAXX currently yields about 1.5%.
by stlutz
Wed Jul 04, 2018 2:35 pm
Forum: Investing - Theory, News & General
Topic: Switch to LT bonds in this falling rate environment?
Replies: 43
Views: 2722

Re: Switch to LT bonds in this falling rate environment?

As a side note, I was not trying to get a rise out of Larry Swedroe. First, I've become less and less clear over time what his views on fixed income actually are. And second, I don't know that he should really care about stlutz's views on fixed income in any case. :D