Bogleheads.org

TD2626

I don't think this could ever happen - not 100%. However, it is easy to envision a world where the overwhelming majority of individual investors buy and hold index funds for the overwhelming majority of their portfolios, with some people having small amounts in relatively low cost active funds and w...

TD2626

It's the classic case of incurring higher risk for the expectation of higher reward, in a highly efficient market. This is a great quote. The decision is based on if whether the (possible) higher return is worth the higher risk. Why is the higher return desired or needed? Is the higher risk worth i...

TD2626

It's probably what happens if you do excessive backtesting and go with it. Sometimes the outputs of backtests are a quirk of history and not all that likely to work well in the future. It reminds me of this https://www.bogleheads.org/forum/viewtopic.php?t=5410 Excessively unconventional and highly r...

TD2626

One thing that index funds, particularly at Vanguard (due to their index/etf structure) do is generally have lower capital gain distributions compared to active funds that trade a lot. Indeed, active funds can sometimes have truly enormous capital gain distributions.

TD2626

I wonder if "exactly 16" is more common than "about 16" -- maybe one could look at posts on this board to find that out! I think wealth management is a dying industry, sort of like horse buggy whip makers in the 1920's. I think John Bogle in one of his books even recommends that young people choosin...

TD2626

Each individual lot is a TLH opportunity. Sorry, what do you mean by "each individual lot"? If you use the specific identification method for tracking cost basis and calculating capital gains and losses, each individual purchase of a stock, ETF, or mutual fund creates a "lot" with its own cost basi...

TD2626

It's the classic case of incurring higher risk for the expectation of higher reward, in a highly efficient market. This is a great quote. The decision is based on if whether the (possible) higher return is worth the higher risk. Why is the higher return desired or needed? Is the higher risk worth i...

TD2626

This is impressive! (More or less impossible for many, though, especially those who don't have the information they need to do this in or compiled before the end of the year, though.)

TD2626

A hypothetical non-dividend fund would potentially not be diversified enough. It may have a growth tilt, as well - though value is not synonymous with high dividend yeild. Remember single company stocks are considered very risky, also. Maybe do calculations to see if the tax savings from a low divid...

TD2626

Why would someone want to invest in these sorts of things? In my opinion people seem to wrongly think "its an opportunity limited to few, so it must be good". Um, instead it's often overly risky and non-transparent - and total market index funds may be used even for large portfolios. Nevada has tens...

TD2626

"Stay the course" is not the same as "Buy and hold." Corrections and bear markets can often be an opportunity to rebalance, sell an unwanted fund, tax-loss harvest or move to another company. These seem like good points. One question: By "sell an unwanted fund" would you be referring to a situation...

TD2626

A big concern is the fact that many etfs are small and/or concentrate on tiny sectors of the market. Also, they allow short term speculation. Responsible buy and hold investors tend to dislike narrow sector bets and short term trading. I guess in a sense etfs could be unsafe in the wrong hands (e.g....

TD2626

Right. Don't buy country-specific products just because they're offered and "cheap." This is a non sequitur vis-à-vis Total International Stock Market or Total World, though. Good point - these are not the kinds of buy and hold funds that would likely be held by Bogleheads, in my opinion. Why would...

TD2626

If you don't need to touch your investment portfolio for the next 30 years the experts recommend a small amount of Treasuries with that high equity allocation because of the negative correlation of Treasuries with stocks in times of stress. It has nothing at all to do with selling your investments ...

TD2626

The nice thing is that this can be in theory partially quantified - one could calculate exactly how much in excess fees are being paid, and compound this effect out for many years. I believe a lot of the issue with fees comes from compounding - e.g. the fact that you'd hope to earn money on the mone...

TD2626

It's interesting the performance of Russell 2000 Value relative to other things given SCVs popularity. One must remember that investing for a lifetime-length goal is often a 40-70 year endeavor so single years likely don't matter much --- but SCV supporters shouldn't expect too much (if anything) an...

TD2626

^^^ Sorry, I wasn't clear. PSCU is my B&M financial home. I keep a month of living expenses (<$2K) in savings... just because. --Today my <$2K is earning 0.10%. --The teller said she could convert the account ("no extra effort on my part"). --I move in new money ( through actually, which I do every...

TD2626

BH Reverse tier savings My little CU is trying this no-fee no-minimum-balance savings account idea. Only restriction, it must be new money: 0-2K: 3.25% APY 2-5K: 1.5% APY 5-10K: 0.75% APY 10-50K: 0.4% APY >50K: 0.3% APY vs. their current personal share (savings) account: 0.10% APY. While I’m a conv...

TD2626

Perhaps the board could have a crypto currency sub-forum. ;) Not sure if this was meant tongue-in-cheek, but if this helps people who don't want to think about crypto-currencies avoid popping into threads to mutter "ponzi" or "tulip" repeatedly, rather than contributing to the topic at hand, that w...

TD2626

Thanks for the links and post. It's good to see that short-term yields are rising in both taxable and tax exempt funds. That being said, rising rates on savings accounts probably aren't as important as many think. If a hypothetical investor has $90,000 in stocks and $10,000 in cash, and gets (in a h...

TD2626

In theory, isn't it the case that if you own 1 share of a company with 1,000,000 shares outstanding, you own 1 millionth of the company? Thus, in the event of company liquidation, you would one millionth of whatever was left over after debts are paid off and all assets are sold. However, companies u...

TD2626

Furthermore, even if you could divine a stock's future beta, is beta really a good predictor of stock's returns? The available research suggests the answer is "No." Remember that the mathematics you speak of isn't being used to model systems like those in physics. Stock prices are fractional intere...

TD2626

TD2626 makes a good point but I want to extend on it a bit. China has 2 issues. The first is that many of the companies are state sponsored. That is, the government owns a large chunk of enterprise. As TD2626 allude too, if a large chunk of shares are not traded it becomes harder to "reconstructed ...

TD2626

I think that you could argue that using float-adjusted indices is: 1. Good, because it underweights illiquid companies or those that have a large percentage of their stock controlled by founders, national governments, etc. 2. Bad, because it moves the indices away from the global portfolio - which w...

TD2626

Is this a good way to think about it:...? Dividend investors essentially punish companies that pay low dividends by underweighting/excluding them. Socially responsible investors essentially punish companies that are in certain industries by underweighting/excluding them. Float-adjusted index investo...

TD2626

Dude, I'd check your ego and your intellect at the door. The idea that your big brain can figure out something with a year of research that pros have been dissecting for decades is ludicrous. So stop. If your cash is not invested, your "analysis" is doing you actual HARM. It's far better to underst...

TD2626

I also think you should be careful about "tilting". A lot of the categories constructed in finance are completely arbitrary. For example, one of the key metrics of whether a stock is a "value" stock (assuming you want to tilt to "value") is if it has a low price to book ratio. But surely common sen...

TD2626

I think you should choose Option B, in part because you think that statistics and math constitutes your investing learning path. The real language of investing is accounting, not math. If you can learn to value a business, and you read both broadly and deeply, you can beat the market over time. Thi...

TD2626

You might want to think about some of Rubin's strategies for moving forward with the decision: .... Sounds similar to something out of Decisive by Heath and Heath which has been discussed on the forum before. It's a great book. Thanks for the recommendations. I think I will look into decisionmaking...

TD2626

********************************************************* just put it all into lifestrategy moderate growth, and be done with it for a few decades... if you dont want to ponder it further. Youll be fine. I've always thought that Lifestrategy funds were for investors who knew very little about inves...

TD2626

When I am unsure what to do, I seek the advice of experts. What am I to do when experts disagree? You frequently have wisely said "when experts disagree, it is often because it does not make a forseeable difference". Experts do disagree, though. Larry Swedroe, Rick Feri, and Paul Merriman suggest s...

TD2626

Option B for sure. The real world IS messy. You WILL NEVER get to the bottom of things. If you want to read something valuable, start with complexity theory/chaos theory rather than with arcane investment porn. You will rapidly realize that predicting10,20,30, 50 years into the future is useless, a...

TD2626

:D Everybody think's they're "rational". So convenient a thing it is to be a reasonable creature, since it enables one to find or make a reason for every thing one has a mind to do. Maybe the "rational" thing to do, is to decide what portfolio you want to hold, and then filter out all the obviously...

TD2626

Grabiner - what about interest earned on delayed taxes? Is this a consideration? If you sell in late December 2017, taxes need paid in April 2018, whereas if you sell in January 2018, couldn't payment of taxes could be delayed to April 2019 by making use IRS "safe harbor" rules? (I am not an expert...

TD2626

Since dbr is quoting Alice in Wonderland , I'll add my favorite quote also which seems instructive at this point: The White Rabbit put on his spectacles. `Where shall I begin, please your Majesty?' he asked. `Begin at the beginning,' the King said gravely, `and go on till you come to the end: then ...

TD2626

Nisiprius: Riddle: was Markowitz acting wisely or foolishly? Very difficult riddle. I had to think about this one for a while. My answer (TD2626): There is a 36.43% chance that he was acting wisely. Ha-ha, good one. Another one: what is the probability that you have been out of engineering school f...

TD2626

. . . I'm amazed that you have a 25-page IPS but you have no goals. Is your IPS a notebook of how investing works? An IPS should be focused on you, your goals, and how to get there. Lots of people write long and complicated IPSs that are mixed with personal beliefs and lifestyle choices and narrati...

TD2626

TD2626, there were several reasons for my New 'Doo thread. I consider the "New 'Doo thread to be one of the most interesting and important "classic" threads I've seen on this site. It's great that you've done this analysis and tracked things so closely. Regarding the actual results, it's hard to kn...

TD2626

Now that I've read that you are going to act today decisively and without delay, I wanted to go back to your statement My answer: There is a 36.43% chance that he was acting wisely. How would you answer this? Best statistics question ever I guess I would complain to the test proctor that the questi...

TD2626

Be careful backtesting with short time periods. While that's an interesting backtest, 4 years is nowhere near enough to evaluate something like this in my opinion. I usually try to perform multi-decade backtests. I feel that hasn't been around long enough to backtest that far back in the past is us...

TD2626

It is likely to be irrelevant whether you sell before or after the distribution, because your capital gain will decrease by the amount of the distribution, and both will be taxed at the same rate if the dividend is 100% qualified. And even if it isn't a wash, the difference is trivial; the December...

TD2626

I was talking with an insurance salesman and in the conversation I said something like “from an actuarial perspective” and he almost fainted. He said almost no client knows the a-word. I wound up buying DI insurance from him. Wow. Buying insurance and not considering the actuarial perspective seems...

TD2626

However, in the here and now you must actually invest in something , and choose from actual existing alternatives based on the knowledge you have. The question is: have you found any evidence to justify going beyond the simple broad index funds? What are you going to do now , even if you continue y...

TD2626

If knowing everything is impossible, then getting to the bottom of things and achieving perfection is impossible. As amount of time spent working on optimizing approaches infinity, you get closer and closer to perfection and eventually achieve a state of being "virtually perfect" which would likely...

TD2626

Jason Zweig has an interesting story about Harry Markowitz. Markowitz is the economist who won the Nobel Prize for developing modern portfolio theory. I'm going to quote from a New York Times blog posting ; the article, in turn, is referring to Zweig's Your Money or Your Brain : “There is a story i...

TD2626

A "quant" genius can just use index ETFs and do all the market timing they want to create "alpha". That is, it is possible to actively manage index funds and index ETFs in one's portfolio to take advantage of other investors who require "peace of mind" and "sleeping well at night" with their portfo...

TD2626

TD2626: The enemy of a good plan is the dream of a perfect plan. -- Jack Bogle Consider The Three-Fund Portfolio Best wishes. Taylor My main concern at this point is this basic tenant of common sense: "If it sounds too good to be true, it very likely is". It's what keeps me from investing in anythi...

TD2626

Keep it simple. How to win the 'losers game' . If you were determined to become a successful trader or professional securities investor, I think you need to have a certain passion and desire for it where I don't think you would be coming here looking for people to talk you out of it. Even among the...

TD2626

Thank you for your in depth reply. I put my a few comments in green. Although I have no formal background in this area, I have been reading the forum a lot trying to get to the bottom of investing in hopes of better managing my own investments and better being able to help family members when they ...

TD2626

Furthermore, any regularity in economics that can be discovered by mathematical analysis can be employed to make money only until it causes enough change in the data that the assumptions are no longer valid, e.g., by driving up the price of the underpriced asset. I don't think that this is always t...

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