Search found 4594 matches

by stlutz
Mon Aug 20, 2018 10:51 pm
Forum: Investing - Theory, News & General
Topic: Vanguard predicts 10 year equity returns
Replies: 91
Views: 9485

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: 9485

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: 613

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: 1069

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: 9485

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: 9485

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: 1069

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...
by stlutz
Sun Aug 19, 2018 1:23 pm
Forum: Investing - Theory, News & General
Topic: According to BKM, value and small firms may do worse in economic downturn
Replies: 24
Views: 1069

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

Of course large growth did drop the most in the prior major bear market (early 2000s).
by stlutz
Sat Aug 18, 2018 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: Help me pick a TIPS fund
Replies: 8
Views: 772

Re: Help me pick a TIPS fund

The Schwab fund seems to be the obvious choice.
by stlutz
Fri Aug 17, 2018 6:53 pm
Forum: Investing - Help with Personal Investments
Topic: Small cap tilt - value vs. growth
Replies: 25
Views: 1637

Re: Small cap tilt - value vs. growth

It probably won't make that much of a difference. Or at least is hasn't. Comparison Theoretically, small/value probably makes the most sense. If you're doing to deviate from the overall market, you might as well deviate in a way that looks different. If you had a lot in the total market and were tal...
by stlutz
Tue Aug 14, 2018 11:14 pm
Forum: Investing - Theory, News & General
Topic: Magic Formula Results
Replies: 20
Views: 1921

Re: Magic Formula Results

The obsession with "What is the proper benchmark" is interesting. For me, I would either be picking my own stocks or I'd be investing mostly in total market index funds (I once did the former; now I do the later). For me, the proper benchmark is vs. what the alternative was. If the OP would otherwis...
by stlutz
Tue Aug 14, 2018 8:38 pm
Forum: Personal Finance (Not Investing)
Topic: Brokerage checking: Fidelity, Schwab, or Vanguard
Replies: 36
Views: 3137

Re: Brokerage checking: Fidelity, Schwab, or Vanguard

The primary goal for this account is not to act as a checking account, but for emergency funds / investment account / sweep, with some flexibility for check writing and ATM access in case we need it. Regarding the checkwriting/ATM access: What is the timing of when you want access to funds? Money g...
by stlutz
Tue Aug 14, 2018 7:22 pm
Forum: Investing - Theory, News & General
Topic: Magic Formula Results
Replies: 20
Views: 1921

Re: Magic Formula Results

I don't know that I have much to add, but this thread is so cool! It's so rare that we have real life examples of using a stock-picking strategy for this long (11 years).

:sharebeer
by stlutz
Mon Aug 13, 2018 11:16 pm
Forum: Investing - Theory, News & General
Topic: Importance of sequence of real returns for SWR, CAPE valuation, and Luck
Replies: 95
Views: 3769

Re: Importance of sequence of real returns for SWR, CAPE valuation, and Luck

A point was made a above that kind of got glossed over. Things didn't go all that well for the 1966 retiree because of inflation. If you take a more global look at it, there are all sorts of scenarios where 4% didn't work. Most of those were driven by events, not valuations. Changing asset allocatio...
by stlutz
Sun Aug 12, 2018 12:25 am
Forum: Investing - Theory, News & General
Topic: The Bigger Story: Fidelity Expense Ratios
Replies: 93
Views: 8831

Re: The Bigger Story: Fidelity Expense Ratios

Doesn't it really come to down Vanguard using the funds to subsidize the brokerage and Fidelity using the brokerage to subsidize the funds? Just to compare a bit: --The ER on Fidelity's sweep money market fund is .42%. For Vanguard it's .11% --Fidelity gives free trades on iShares ETFs but gets comp...
by stlutz
Sat Aug 11, 2018 10:16 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 115
Views: 6224

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

So is this a mild form of risk-parity trading or a different beast entirely? Not really. The goal of risk parity is that each asset class contributes the same amount of risk to the portfolio. This takes a 60/40 portfolio and levers both the stocks and bonds by 1.5. Risk parity would only lever the ...
by stlutz
Sat Aug 11, 2018 4:05 pm
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 379
Views: 52686

Re: 2-year CDs at Vanguard and Fidelity Today

I'd refine my answer a bit to say that if you buy at a premium, perhaps do a bit more due diligence regarding the bank's financial health. In my case, I didn't do that, and bought a CD issued by a bank that was obviously at risk. +1. And I should say that I always buy the lowest priced CD all other...
by stlutz
Fri Aug 10, 2018 10:38 pm
Forum: Investing - Theory, News & General
Topic: 2-year CDs at Vanguard and Fidelity Today
Replies: 379
Views: 52686

Re: 2-year CDs at Vanguard and Fidelity Today

Do you guys avoid buying above par? I set aside my hangup over buying a premium CD once I experienced CDs I was holding going up in price and becoming premium CDs. You buy your portfolio every day. If I would hold a CD that I bought for a 100 that is now trading at 102, there is no reason I shouldn...
by stlutz
Fri Aug 10, 2018 10:26 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 115
Views: 6224

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

Isn't the whole bit about having 90% stocks just a gimmick? Why not just have a Treasury fund that's levered 6x and then I'll chose the mix of equities that I want (might be a mix of total US, total international and maybe smallcap value)? EDV doesn't lever at 6x vs., say GOVT (total treasury market...
by stlutz
Fri Aug 10, 2018 8:23 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 115
Views: 6224

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

What is the advantage of using this fund to lever up my fixed income holding as opposed just using long-term zeros (i.e. EDV)?

Both approaches are making a big bet that stocks and bonds will not both do poorly at the same time.
by stlutz
Tue Aug 07, 2018 11:48 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Disrupted Expectations
Replies: 27
Views: 2959

Re: Larry Swedroe: Disrupted Expectations

...including Aswath Damodaran... Interestingly, the ERP that he has calculated has consistently been more optimistic than the pessimists in the CAPE threads on Bogleheads. He currently estimates the ERP above the long-term Treasury rate as 4.78%. So, his projected future nominal return is 4.78 + 3 ...
by stlutz
Tue Aug 07, 2018 11:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Disrupted Expectations
Replies: 27
Views: 2959

Re: Larry Swedroe: Disrupted Expectations

In my post I drew a subtle distinction that I should be more explicit about. A while back we had a thread about the relationship between and inverted yield curve and a recession and I asked the question if inversion was a cause of a recession or if had simply correlated to it historically. I actuall...
by stlutz
Mon Aug 06, 2018 10:32 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Disrupted Expectations
Replies: 27
Views: 2959

Re: Larry Swedroe: Disrupted Expectations

Think I’ve read that the explanatory power of CAPE is about 40%. That’s really at the limits of my understanding. With the combination of my limited knowledge and unknowable future, I wouldn’t venture beyond my usual talking points until I know more. I think we can venture further than that. A comm...
by stlutz
Mon Aug 06, 2018 9:50 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

Back to the lending question--I took a look at the SAI for the Schwab total market fund and about 88% of the gross revenue makes it back to the fund as net revenue--so very close to Vanguard. Fidelity seems to be the odd man out here. I tried looking for older versions of the Fido SAI on Edgar to se...
by stlutz
Mon Aug 06, 2018 9:30 pm
Forum: Investing - Theory, News & General
Topic: "Age in Bonds" fails almost everyone
Replies: 217
Views: 12885

Re: "Age in Bonds" fails almost everyone

A few thoughts: a) When someone is 25, the fact that they are saving matters a lot more than the returns they earn at that age. In the 1990s bull market I was selecting individual value stocks and not doing a very good job of it. Had I just gone TSM I would have done better. If I went back and did i...
by stlutz
Mon Aug 06, 2018 7:58 pm
Forum: Investing - Help with Personal Investments
Topic: From TD Ameritrade to ...
Replies: 19
Views: 1468

Re: From TD Ameritrade to ...

TD Ameritrade has commission-free trades on many ETFs including Vanguard and iShares:
They no longer have any VG ETFs on their list:

https://research.tdameritrade.com/grid/ ... onfree.asp
by stlutz
Mon Aug 06, 2018 7:49 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Disrupted Expectations
Replies: 27
Views: 2959

Re: Larry Swedroe: Disrupted Expectations

Valuations matter a lot Dave: What does "a lot" mean? That phrase gets bandied around here a lot but what percent of returns over the next 10-20 years will be determined by today's valuations, do you think? 10%? 80%? Getting to a more precise term than "a lot" might help move the discussion forward...
by stlutz
Sun Aug 05, 2018 9:42 pm
Forum: Investing - Help with Personal Investments
Topic: From TD Ameritrade to ...
Replies: 19
Views: 1468

Re: From TD Ameritrade to ...

If all you're wanting to buy are some ETFs, they will shortly all be free to trade at Vanguard. I know a number of people complain about their brokerage platform not being that good, but if you're just buying and holding some ETFs, I don't know that it matters.
by stlutz
Sun Aug 05, 2018 9:39 pm
Forum: Investing - Theory, News & General
Topic: Has Vanguard fixed their cost basis issues?
Replies: 4
Views: 605

Has Vanguard fixed their cost basis issues?

I was thinking the other day that it's been several months since we've had a thread with somebody complaining about a cost-basis error at Vanguard. Is that true? If so, it might be a sign of some progress on addressing the the issues that a number of people have had in this area (including me) over ...
by stlutz
Sat Aug 04, 2018 11:49 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

You do understand that the fidelity fund is not actually free, right? If Fidelity keeps 60% or whatever of securities lending revenue, that is the actual ER of the fund. Fidelity isn't "keeping" 60% of the securities lending revenue. See this post upthread for an explanation of why gross lending re...
by stlutz
Fri Aug 03, 2018 11:23 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

So, in this example where no expenses have been taken out, only 67% of the gross was returned to the fund. This is a fundamental aspect of Fidelity being more aggressive in lending out shares. Vanguard only likes to lend out shares where it will make a hefty return on the loan, so it is much more r...
by stlutz
Fri Aug 03, 2018 8:05 pm
Forum: Investing - Theory, News & General
Topic: Fidelity eliminated $50 IRA closeout fee
Replies: 9
Views: 1494

Re: Fidelity eliminated $50 IRA closeout fee

pokebowl wrote:
Fri Aug 03, 2018 7:44 pm
I just did a rollover of an orphan IRA from fidelity only two weeks ago. :oops: Would have saved myself $50 bucks to wait two weeks. Oh well...
I'll give you $50 if you call up Fidelity and manage to convince them to reimburse you. :sharebeer
by stlutz
Fri Aug 03, 2018 7:55 pm
Forum: Investing - Theory, News & General
Topic: Are stocks dangerously overvalued? Not according to new Vanguard yardstick
Replies: 84
Views: 8567

Re: Are stocks dangerously overvalued? Not according to new Vanguard yardstick

I know if there is a CAPE thread everybody has to go to their corners, but does anybody have any thoughts on the "improvements" Vanguard has suggested to the model? Namely that one should incorporate: a) real bond yields, b) expected inflation rates, and c) financial volatility into their forecast o...
by stlutz
Fri Aug 03, 2018 7:27 pm
Forum: Personal Finance (Not Investing)
Topic: Few weeks into new job recieved significantly better offer elsewhere
Replies: 103
Views: 9866

Re: Few weeks into new job recieved significantly better offer elsewhere

If there is as big of a chasm in how much you like the corporate culture between the current job and the potential new job, I'd go with the current job.
by stlutz
Fri Aug 03, 2018 4:43 pm
Forum: Investing - Theory, News & General
Topic: Fidelity eliminated $50 IRA closeout fee
Replies: 9
Views: 1494

Re: Fidelity eliminated $50 IRA closeout fee

Also no fee for a wire or to get a cashier's check.
by stlutz
Thu Aug 02, 2018 8:00 pm
Forum: Investing - Theory, News & General
Topic: STIP (Short Term TIP) yield vs TIP
Replies: 14
Views: 926

Re: TIPS yield curve and fund choice

The 10 year TIPS yielded -1% back in 2013. So quite a bit.

https://fred.stlouisfed.org/series/DFII10
by stlutz
Thu Aug 02, 2018 7:42 pm
Forum: Investing - Theory, News & General
Topic: STIP (Short Term TIP) yield vs TIP
Replies: 14
Views: 926

Re: TIPS yield curve and fund choice

What if real rates go down? Aren't you better off with the longer term fund in that case? I'm not arguing that the "total TIPS" vs '"short-term" TIPS fund is better. I'm simply suggesting that I don't think the market timing call is as easy as flat-yield curve = ST bonds and steep yield curve = LT b...
by stlutz
Thu Aug 02, 2018 7:39 pm
Forum: Investing - Theory, News & General
Topic: STIP (Short Term TIP) yield vs TIP
Replies: 14
Views: 926

Re: STIP (Short Term TIP) yield vs TIP

Reported SEC yields for these funds can be squirrely because of the principal adjustments for inflation. I would compare these two by looking at the "Real Yield" minus the expense ratio. So, for STIP, the real yield is .99% and the ER is .06%, leaving a net real yield of .93%. For TIP, the real yiel...
by stlutz
Thu Aug 02, 2018 7:29 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

To jump in on a couple of questions: --The SAI for the new funds indicate that holdings will be published monthly with up to a 30 day delay. Most ETFs (excluding Vanguard) report holdings daily with no delay). The SEC is moving toward requiring all ETFs to disclose daily. --We really haven't seen se...
by stlutz
Wed Aug 01, 2018 9:06 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

Where I wish Vanguard would feel pressure with this move is to get rid of the distinction between Investor and Admiral share and just promote everyone to Admiral. +1 I've been thinking that for a while. Getting rid of the Investor Share classes would save a tiny bit of overhead managing the extra s...
by stlutz
Wed Aug 01, 2018 7:18 pm
Forum: Investing - Theory, News & General
Topic: Switch to LT bonds in this falling rate environment?
Replies: 44
Views: 3213

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

I have to call myself out here and note that me posting this thread has proven thus far to be a pretty good sell signal for longer-term Treasuries. 10 Year yield is back above 3%. :P
by stlutz
Wed Aug 01, 2018 7:13 pm
Forum: Investing - Theory, News & General
Topic: Vanguard to offer non-Vanguard ETFs commission-free
Replies: 214
Views: 19555

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

In related news, Fidelity has dramatically expanded their list of free iShares ETFs to 240.

https://www.fidelity.com/bin-public/060 ... e-ETFs.pdf
by stlutz
Wed Aug 01, 2018 7:11 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

Something else I haven't seen mentioned--apparently they now offer 240 iShares ETFs commission free as opposed to the more limited list they had previously.

https://www.fidelity.com/bin-public/060 ... e-ETFs.pdf
by stlutz
Wed Aug 01, 2018 7:05 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

Where I wish Vanguard would feel pressure with this move is to get rid of the distinction between Investor and Admiral share and just promote everyone to Admiral.
by stlutz
Wed Aug 01, 2018 6:42 pm
Forum: Investing - Theory, News & General
Topic: Vanguard to offer non-Vanguard ETFs commission-free
Replies: 214
Views: 19555

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

I don't understand why they wouldn't just give a specific date. In the end its just a minor quibble, but this is bad customer service.
As anybody who works in a corporation knows, "August" means August 1 to product management and to technology is means August 31st--of next year. :D
by stlutz
Wed Aug 01, 2018 6:38 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Replies: 667
Views: 57738

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

I'm not seeing anything in Fidelity's filings that suggests that they aren't returning all of the net lending revenue to the fund. iShares does not do so and it's very explicit in the SAI that they aren't (provided you scroll down to page 134 :D ). That said, it seems like Fidelity's program isn't t...
by stlutz
Sun Jul 29, 2018 9:25 pm
Forum: Investing - Help with Personal Investments
Topic: Which Risky Bond ETF?
Replies: 11
Views: 680

Re: Which Risky Bond ETF?

Our choices:
Is there a reason those are your only two choices?

USHY (a high yield ETF from iShares) has an ER of .22% which is a lot less than the .5% you are quoting.
by stlutz
Fri Jul 27, 2018 9:43 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Precious Metals and Mining Fund is changing
Replies: 61
Views: 5631

Re: Vanguard Precious Metals and Mining Fund is changing

Perhaps this is the buy signal for gold that I've been waiting for for a long time...
by stlutz
Thu Jul 26, 2018 9:38 pm
Forum: Investing - Theory, News & General
Topic: WSJ--Vanguard Sent Erroneous Text Messages to Some 401(k) Customers Messages said loans had been processed
Replies: 12
Views: 1166

Re: WSJ--Vanguard Sent Erroneous Text Messages to Some 401(k) Customers Messages said loans had been processed

What would it cost up front to make their customer service above average? The thing is, I think the customer service is probably just fine. Their IT is not. IT problems lead to more customer service inquiries which leads to long wait times both to have your inquiry answered and then to resolve the ...