Search found 95 matches

by smesman
Tue May 08, 2018 2:58 pm
Forum: Investing - Theory, News & General
Topic: Swiss or European Equivalent of Vanguard?
Replies: 12
Views: 1199

Re: Swiss or European Equivalent of Vanguard?

To reduce currency risk, I think you have 2 options: * Buy assets (stocks/real estate) that earn profit in the local currency. E.g. international small/mid caps. In this case, it does not matter in which currency they are denoted. If they are denoted in USD then their relative value will increase if...
by smesman
Fri Mar 30, 2018 2:04 am
Forum: Investing - Theory, News & General
Topic: Simple-minded inspection of actual low-vol fund
Replies: 16
Views: 1734

Re: Simple-minded inspection of actual low-vol fund

In short, in this second case I saw no obvious visible benefit to using stocks selected for low volatility, compared to using a total stock market portfolio and simply increasing the bond allocation. Thank you nispirius, it is always enlightening to see such graphs. The question is whether their pe...
by smesman
Sun Mar 18, 2018 4:25 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Count Out Commodities
Replies: 51
Views: 7237

Re: Larry Swedroe: Don’t Count Out Commodities

I appreciate Larrys article and the discussion.

One thing I'm missing is an intuitive explanation of why commodities would hedge better than TIPS (or: respond stronger to inflation).

Is it because commodities are raw products and sold at a multiple to consumers?
by smesman
Fri Feb 16, 2018 2:40 pm
Forum: Investing - Theory, News & General
Topic: MarketWatch article-Vanguard investors kept their cool during stock-market turmoil
Replies: 18
Views: 2082

Re: MarketWatch article-Vanguard investors kept their cool during stock-market turmoil

Good for the 3%!! Some people of this group recognized the opportunity to accelerate contribution, to do TLH, and to exchange bond to equity fund. I've been busy doing those things. What you're suggesting is that bogleheads should've taken the opportunity to "buy the dip" so to speak. But the truth...
by smesman
Fri Feb 09, 2018 3:24 am
Forum: Investing - Theory, News & General
Topic: Does this strategy make sense in a falling market?
Replies: 19
Views: 2701

Re: Does this strategy make sense in a falling market?

It would make sense if we knew for sure that we'd recover quickly. However, we don't. In the history of the US Stock market, there have been several bear markets spanning years. In some other markets (e.g. Japanese Stock Market), decades. Like Pajamas wrote, this sounds very similar to a Martingale ...
by smesman
Fri Jan 26, 2018 5:52 pm
Forum: Investing - Theory, News & General
Topic: Age-based allocation when you don't need the money?
Replies: 22
Views: 2081

Re: Age-based allocation when you don't need the money?

Definitely agree with dbr that you should think about what you might want to use the money for. If you truely don't need/want the money and don't have heirs, it doesn't matter what you do with it. If you want to see it as some kind of big "emergency" fund that you might one day find a purpose for, t...
by smesman
Fri Jan 26, 2018 5:18 pm
Forum: Investing - Theory, News & General
Topic: When did the bad news start in 2008?
Replies: 135
Views: 14679

Re: When did the bad news start in 2008?

Right now, we have a situation like this: https://i.imgur.com/QMrnox7.png Because of the high valuations, the expected growth for the next 15 years is not very high (~5% per year?) but higher than zero. Let's assume that over the next 15 years, stocks will double in value. It can go like this, with ...
by smesman
Thu Jan 11, 2018 2:40 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone Have Experience With Broker Degiro?
Replies: 4
Views: 898

Re: Anyone Have Experience With Broker Degiro?

I live in the Netherlands and have been with Degiro for about a year. I agree with everything alpine_boglehead and my experiences so far have been good. The interface works pretty well, they take care of tax treaties for you and you can instantaneously deposit money. The only disadvantage is the 0.1...
by smesman
Sat Jan 06, 2018 4:51 pm
Forum: Investing - Theory, News & General
Topic: Talk me out of a 60/40 AA
Replies: 76
Views: 10086

Re: Talk me out of a 60/40 AA

There is a nonzero chance that bonds (or safe equivalents like CDs, TIPS or savings) will outperform stocks over a long period. E.g. like what happened in Japan or because of the effects of an aging workforce/global warming or after a war/natural disaster. Japan is an anomaly caused by terrible cen...
by smesman
Sat Jan 06, 2018 4:10 am
Forum: Investing - Theory, News & General
Topic: Talk me out of a 60/40 AA
Replies: 76
Views: 10086

Re: Talk me out of a 60/40 AA

If you're saving for things other than retirement in 20+ years, you might need bonds. Otherwise, good portfolio performance during bear markets doesn't matter, only average performance over both bear and bull markets. And both historically and in expectation, equities perform better on average in b...
by smesman
Wed Jan 03, 2018 5:09 pm
Forum: Investing - Theory, News & General
Topic: Talk me out of a 60/40 AA
Replies: 76
Views: 10086

Re: Talk me out of a 60/40 AA

At the moment, 50/50 or 40/60 also seems to make a lot of sense to me. The truth is that we don't know what will happen the next 10-40 years. Bonds/cash may outperform stocks over this period, or you may want to withdraw your portfolio earlier for some reason (e.g. study, home/health care costs). Fr...
by smesman
Wed Dec 27, 2017 10:16 am
Forum: Investing - Theory, News & General
Topic: How to setup a crypto-currency "index fund" (Bitcoin, etc.)
Replies: 77
Views: 7643

Re: How to setup a crypto-currency "index fund" (Bitcoin, etc.)

I'll just say that why do we have discussion on gold, commodities or alternative asset class then? I lump crypto in the same categories, albeit an emerging/riskier/untested class. There is no intrinsic reason why gold should hold value, just like like crypto. Yes, I think most bogleheads are also a...
by smesman
Wed Dec 27, 2017 7:04 am
Forum: Investing - Theory, News & General
Topic: How to setup a crypto-currency "index fund" (Bitcoin, etc.)
Replies: 77
Views: 7643

Re: How to setup a crypto-currency "index fund" (Bitcoin, etc.)

Here is another recent topic: https://www.bogleheads.org/forum/viewtopic.php?t=221744 Personally, I've been involved in crypto *and* a bona-fide Boglehead in all other things since 2012, and basically stopped contributing to crypto threads since 2014 because attempting to to get actual facts out and...
by smesman
Mon Dec 25, 2017 12:22 pm
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 120
Views: 15236

Re: What ever happened to the Larry portfolio?

I too would potentially have trepidation about jumping on something very new like reinsurance, alt lending, variance risk premium. But the strategies have been around a very long time; it’s just that they recently became investable . The logic behind them makes total intuitive sense. Given these co...
by smesman
Sun Dec 24, 2017 7:03 pm
Forum: Investing - Theory, News & General
Topic: "The Most Important Investment Decision You'll Ever Make"
Replies: 16
Views: 4229

Re: "The Most Important Investment Decision You'll Ever Make"

The article posits that the main reason to have bonds is to "stay disciplined" and not get out of the market. Which seems to imply that it's safe to assume you'll come out ahead with stocks, as long as you can "stick it out". However I'd say bonds' primary purpose for bogleheads is diversification. ...
by smesman
Tue Dec 12, 2017 6:34 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

Now I'd like to leave you with this thought: 80% of active managers, people who make it their entire job to learn everything there is to know and use powerful trading computers, underperform the market. Now you guys are intelligent individuals, and you think it is an interesting puzzle to get the re...
by smesman
Tue Dec 12, 2017 6:07 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

Losing "diversification across time" can be a very good thing when the market is in a downward trend. Unfortunately you don't know whether the downward trend will continue when you already lost a lot of money and are deciding to get out of the market. There is certainly an element of randomness inv...
by smesman
Tue Dec 12, 2017 5:32 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

But I still wonder.... Once upon a time buying the whole market was not something the average investor could do but an innovation (the index fund) changed that. Currently, active management doesn't usually outperform index funds. But could an innovation change that, too? It is impossible for more t...
by smesman
Mon Dec 11, 2017 5:50 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

I'm not concerned about the investors who, for instance, thought they were 'buy-and-hold' investors and yet sold in early 2009 and never reentered the market. Such investors likely experienced a much lower annualized return than what you specify. ... Conversely, it is well known that many strategie...
by smesman
Mon Dec 11, 2017 4:24 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

Your logic cuts both ways. What if the last decade of your accumulation phase turned out to be a repeat of 2000-2009, when VTSMX had an annualized return of -.27%? Why risk that? By comparison, had you used the above 200 DMA strategy with TSM and TBM, you would have had an annualized return of 8.61...
by smesman
Mon Dec 11, 2017 2:53 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

If we had a crystal ball and could check out which algorithm with what parameters would be doing best we could just pick that and be set! However, in the real world we only have historical data to rely on. So we can use that to pick one of the infinite number of trading strategies possible (hoping i...
by smesman
Sun Dec 10, 2017 3:20 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

Oh, I see your point. I'm kicking the can down the road, but I'm still choosing something/someone and introducing extra risk on top of the market risk, just like picking single stocks or an active manager. (Did I get it?) Yes, you've got it exactly! The "boglehead" way will never be the optimal str...
by smesman
Sun Dec 10, 2017 2:57 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

Myself? Definitely, definitely not. Never in my wildest daydreams would I consider myself able to create such a program. (Post right above proves I can't even figure out how to backtest without a googleable calculator.) But if a smart team at a respected brokerage added this feature to its robo-adv...
by smesman
Sun Dec 10, 2017 2:38 pm
Forum: Investing - Theory, News & General
Topic: Automated Market Timing
Replies: 66
Views: 4699

Re: Automated Market Timing

In short, my question is: could automated tactical adjustment be useful? I'd get a stabler portfolio performance, I wouldn't screw up market timing by forgetfulness, fear, or greed, and I don't have to spend a lot of time thinking about it. I understand this is market timing, but would market timin...
by smesman
Sun Dec 10, 2017 11:03 am
Forum: Investing - Theory, News & General
Topic: An argument for investing in bitcoin
Replies: 10
Views: 850

Re: An argument for investing in bitcoin

But there might be more investments such as bitcoin that we could add to our portfolios that offer a higher expected return for given variance/risk. The main question is: Does this hold for investments with a low or negative expected return? The answer is no: It does not add any more diversificatio...
by smesman
Sat Dec 09, 2017 4:26 am
Forum: Investing - Theory, News & General
Topic: "Think you can time the stock market? Look at this chart first"
Replies: 42
Views: 5051

Re: "Think you can time the stock market? Look at this chart first"

Here is a chart I created with the daily changes of VFINX (S&P 500). The percentage change is calculated by dividing the closing price of the current day by the previous day: https://i.imgur.com/3nroPcI.jpg Very good days seem to occur in times of high volatility, in which very bad days also occur.
by smesman
Thu Dec 07, 2017 5:43 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Bitcoin & It’s Risks
Replies: 57
Views: 6173

Re: Larry Swedroe: Bitcoin & It’s Risks

a couple more thoughts: as bogleheads, we're not in the initial rounds of funding or issuance of shares. so the companies we "invest" in aren't really taking our cash to put to work. rather we're buying a fraction of ownership after it's changed hands multiple times over, in hopes that we can sell ...
by smesman
Wed Dec 06, 2017 2:51 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Bitcoin & It’s Risks
Replies: 57
Views: 6173

Re: Larry Swedroe: Bitcoin & It’s Risks

Characterizing an investment as only something that can produce cash flows in the future is another BogleMyth. That's your personal definition of "investment", and numerous reference sources disagree with you: Jonathan, I think the main point is that Bogleheads basically embrace being average. They...
by smesman
Sun Dec 03, 2017 8:39 am
Forum: Investing - Theory, News & General
Topic: how can an index fund outperform its index??
Replies: 6
Views: 1365

Re: how can an index fund outperform its index??

There are 2 possible reasons:

1. Tracking error: The index fund does not fully follow the index (e.g. it only 'samples' stocks)
2. Securities lending: The operators lend out a small percentage to short-sellers and returns to proceeds to investors, this is what some popular Vanguards funds do.
by smesman
Sat Dec 02, 2017 2:56 pm
Forum: Investing - Theory, News & General
Topic: "Diversification: A Reason to Stay the Course With Your High-Quality Bond Fund."
Replies: 21
Views: 4130

Re: "Diversification: A Reason to Stay the Course With Your High-Quality Bond Fund."

I think online savings/CDs are better right now because of their higher yield. Bonds might earn you more if demand sours during a recession and you rebalance into stocks. But otherwise, the largest predictor of bond funds earnings has always been their current yield. So especially if you intend to h...
by smesman
Mon Nov 27, 2017 6:15 pm
Forum: Investing - Theory, News & General
Topic: Ray Dalio's All Weather Porfolio
Replies: 7
Views: 1936

Re: Ray Dalio's All Weather Porfolio

I don't think you'll find a lot of supporters here.

Long-term bonds have had an exceptional performance the last 40 years because of the decreasing interest rates. But if you buy them now you have a huge chance of not even keeping up with inflation.
by smesman
Sun Nov 26, 2017 4:32 pm
Forum: Investing - Help with Personal Investments
Topic: Gold?
Replies: 64
Views: 5672

Re: Gold?

The main thing gold has going for is that it is small/easy to store and transport, valuable and somewhat keeps up with inflation. It is not an investment but probably does better than cash (unless in case of deflation, but the government knows how to cure that.) However, in pretty much any conceivab...
by smesman
Sun Nov 26, 2017 7:14 am
Forum: Investing - Help with Personal Investments
Topic: Bonds: Why?
Replies: 29
Views: 2881

Re: Bonds: Why?

Some financial experts (e.g. Larry Swedroe) are advising people to use CDs instead of bonds also. The main difference is that institutions/governments cannot buy CDs which has kept their interest up higher. The main disadvantage of some CDs in comparison to bond (funds) is that you'll have less liqu...
by smesman
Sun Nov 19, 2017 5:25 pm
Forum: Investing - Help with Personal Investments
Topic: Bond funds vs Ladder
Replies: 26
Views: 2981

Re: Bond funds vs Ladder

my conclusion, which im wondering if anyone can explain to me why i am wrong, is simply to own no bonds at all. It seems like you're assuming that bonds only serve to "calm your nerves", but that by the time you retire/need the money stocks are 100% sure to have recovered/have higher returns than b...
by smesman
Tue Nov 14, 2017 5:34 pm
Forum: Investing - Theory, News & General
Topic: Dangers of a Broker
Replies: 7
Views: 1446

Re: Dangers of a Broker

He lives is the Netherlands and I'm assuming he is talking about DeGiro which is waaay cheaper than any other broker. Each broker holds the ETFs of their clients in a separate holding company so if they went bankrupt no-one could claim their assets. So yeah it would be a matter of transferring your ...
by smesman
Sat Nov 11, 2017 6:34 pm
Forum: Investing - Theory, News & General
Topic: Value Averaging with Bonds: an example
Replies: 2
Views: 541

Re: Value Averaging with Bonds: an example

I think from a bogleheads' perspective, this is a bad idea because they don't believe/trust in RTM (return-to-the-mean). Basically, you're trusting a formula to determine how much risk you should take. If the formula is wrong, you may stay (partially) out of the market because it believes it is over...
by smesman
Sun Oct 22, 2017 11:03 am
Forum: Investing - Theory, News & General
Topic: I believe one can beat the market with a simple contrarian strategy. Am I a fool?
Replies: 32
Views: 4802

Re: I believe one can beat the market with a simple contrarian strategy. Am I a fool?

smesman is right: a value averaging strategy will underperform a DCA strategy if the market keeps going down forever without ever recovering. This type of doomsday scenario does not preoccupy me because if it happens, we will all become much poorer. I didn't say it kept going down "forever". It may...
by smesman
Sun Oct 22, 2017 4:00 am
Forum: Investing - Theory, News & General
Topic: I believe one can beat the market with a simple contrarian strategy. Am I a fool?
Replies: 32
Views: 4802

Re: I believe one can beat the market with a simple contrarian strategy. Am I a fool?

smesman points out the danger of “Japan-type scenario.” As per my initial post, yes, this strategy does not guarantee a gain. In a Japan-style scenario, everybody loses, but this strategy loses less than a traditional DCA (as experienced in the International (VTGMX) account). Given the gyration of ...
by smesman
Sat Oct 21, 2017 1:08 pm
Forum: Investing - Theory, News & General
Topic: I believe one can beat the market with a simple contrarian strategy. Am I a fool?
Replies: 32
Views: 4802

Re: I believe one can beat the market with a simple contrarian strategy. Am I a fool?

Your method seems to be very similar to Value Averaging . You're basically saying that you can know the "true value" of stocks based on a simple formula. If things were so simple, wouldn't everyone do it? And what happens if a major event happens: Imagine an epidemic kills 50% of the population, if ...
by smesman
Wed Oct 18, 2017 4:04 pm
Forum: Investing - Theory, News & General
Topic: First and maybe last option trade
Replies: 5
Views: 1100

Re: First and maybe last option trade

Bogleheads use them very sparingly. Owning a stock for a long period of time is cheaper than holding options for long amount of time. Options are only useful in some specific situations (e.g. for companies that want to merge or as employee benefits) or when you somehow know that the market is about ...
by smesman
Sun Oct 08, 2017 6:03 pm
Forum: Investing - Theory, News & General
Topic: BitConnect [Cryptocurrency]
Replies: 10
Views: 1447

Re: BitConnect [Cryptocurrency]

It seems like the main difference from normal cryptos is that they have a lending system where you are guaranteed to earn a certain amount of bitcoin after a certain amount of time. So you are certain to get profits as long other keep pouring new bitcoin into the system. I would never invest/gamble ...
by smesman
Sun Oct 08, 2017 3:02 am
Forum: Investing - Theory, News & General
Topic: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17
Replies: 87
Views: 14183

Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

When could we truely say they were overvalued though? When the YTM of treasuries is higher than stock earnings?
by smesman
Fri Sep 29, 2017 1:09 am
Forum: Investing - Theory, News & General
Topic: Which bogleheads have a "high need to take risk"?
Replies: 51
Views: 5908

Re: Which bogleheads have a "high need to take risk"?

In both cases you get a benefit of $1,000 for driving an hour. I'd take that deal. You might still take the deal, but I think you'd agree with me that if you have enough money to spend $2M on a luxury item then that $1000 will probably mean less to you than the average joe that just wants a really ...
by smesman
Thu Sep 28, 2017 5:31 pm
Forum: Investing - Theory, News & General
Topic: Which bogleheads have a "high need to take risk"?
Replies: 51
Views: 5908

Re: Which bogleheads have a "high need to take risk"?

I appreciate your replies. From most of your responses it seems like no-one here really *needs* to take a large amount of risk. It's just that some have a desire to do so or belief that their investing horizon is long enough that stocks are safer than bonds (and as such are not really taking a large...
by smesman
Thu Sep 28, 2017 5:12 am
Forum: Investing - Theory, News & General
Topic: Which bogleheads have a "high need to take risk"?
Replies: 51
Views: 5908

Re: Which bogleheads have a "high need to take risk"?

My goal is early retirement / financial independence, pretty much as soon as possible. ... If stocks don't perform well my retirement will be pushed back, which would make me sad. So why not "insure" that you will be able to retire somewhat early even if the market underperforms by taking a safer a...
by smesman
Thu Sep 28, 2017 3:21 am
Forum: Investing - Theory, News & General
Topic: Which bogleheads have a "high need to take risk"?
Replies: 51
Views: 5908

Which bogleheads have a "high need to take risk"?

I'm curious: Whom of you feels like they need to go e.g. 90%+ stocks to meet some financial goal? I'm talking about bogleheads who have a limited investment horizon and think another allocation would be safer, but have decided to take on more risky assets. If the risk doesn't pay off, what will you ...
by smesman
Thu Sep 28, 2017 2:50 am
Forum: Investing - Theory, News & General
Topic: Why do you LBYM? Why do you save and invest?
Replies: 204
Views: 18636

Re: Why do you LBYM? Why do you save and invest?

For me, there are three reasons I save: I've been somewhat poor large parts of my life, so I translate expenses into how much groceries I could buy or how much rent I could pay from that. Any dollar I save may need to be used for that goal someday. I've seen first-hand how much some old people strug...
by smesman
Sun Sep 10, 2017 4:45 pm
Forum: Investing - Theory, News & General
Topic: "The Market" Portfolio
Replies: 26
Views: 4110

Re: "The Market" Portfolio

Sorry to hear about your tragic life event Krugon. For what it's worth, you seem to be a good writer, so perhaps there are some work at home type things you could do? It probably makes sense to look at the advice given to other people who aim to be financially independent at a younger age. They do u...
by smesman
Sun Sep 10, 2017 2:37 pm
Forum: Investing - Theory, News & General
Topic: Wiki article - Bitcoin
Replies: 37
Views: 5852

Re: Wiki article - Bitcoin

As for the role in a bogleheads' portfolio, I think the 2 most important points about bitcoin are: 1. It's not an investment as it doesn't produce any value. For the average investor, real return after expenses will be negative. 2. Therefore, the best use of bitcoin would be as a safe inflation-adju...
by smesman
Sun Sep 10, 2017 6:01 am
Forum: Investing - Theory, News & General
Topic: "The Market" Portfolio
Replies: 26
Views: 4110

Re: "The Market" Portfolio

I am also not meaning to be bearish on the global market, or a doom monger. I simply don't see the reason why we assume that stocks "will out perform over a long enough time." Why is that considered a truism? Why hasn't it worked out for Japan after 30 years? If stocks were not likely to outperform...