Search found 447 matches

by MrMatt2532
Sat Oct 28, 2017 11:18 am
Forum: Investing - Help with Personal Investments
Topic: S&P 500 -- Ten Years Thoughts?
Replies: 45
Views: 5355

Re: S&P 500 -- Ten Years Thoughts?

Anytime you are comparing a peak (~1999) to a trough (~2009) the returns will look worse than the norm. Similarly, if you compare a trough (~2009) to a peak (maybe today?) they will look better than the norm. Ideally, you should be looking at even longer term and not cherrypick the dates to paint a ...
by MrMatt2532
Wed Jul 12, 2017 4:29 pm
Forum: Personal Consumer Issues
Topic: Cutting the Cord: Who's Best?
Replies: 46
Views: 5663

Re: Cutting the Cord: Who's Best?

The nice thing about these services is you aren't locked in (ok maybe locked in for a month!). The a la carte model isn't truly available except for premium channels (hbo, etc.) and packages of channels (sports package, etc.). I would just list out the channels you want and buy the service that is c...
by MrMatt2532
Sat Apr 08, 2017 7:11 am
Forum: Investing - Help with Personal Investments
Topic: How to do AA based on Age, Risk, HUMAN Capital ?
Replies: 3
Views: 397

Re: How to do AA based on Age, Risk, HUMAN Capital ?

Take a look at a post I made years ago: https://www.bogleheads.org/forum/viewtopic.php?t=109504 It didn't get much attention but I think it directly answers your question. Specifically look at the discount rate to capture bond like vs stock like jobs. I actually have a simplified approach I use toda...
by MrMatt2532
Sat Jul 16, 2016 10:55 am
Forum: Investing - Help with Personal Investments
Topic: 4% SWR for 30 years, what % for 15 years
Replies: 12
Views: 1711

Re: 4% SWR for 30 years, what % for 15 years

Below 25 years, I suggest just assuming 1/n for the rule. So for 15 years you get 6.67%.
by MrMatt2532
Thu Jun 30, 2016 6:16 pm
Forum: Investing - Theory, News & General
Topic: Wait, holding international increases risk?
Replies: 67
Views: 5571

Re: Wait, holding international increases risk?

I would argue a better approach would be to find the us/international mix that maximizes return per unit risk (via a sharpe or sortino ratio) as opposed to minimizing risk. Then you can add bonds to the stock mix in an amount that brings the portfolio's risk to your desired level.
by MrMatt2532
Fri Sep 25, 2015 12:58 pm
Forum: Investing - Theory, News & General
Topic: Who Believes in International Bonds and Why
Replies: 44
Views: 4040

Re: Who Believes in International Bonds and Why

Consider that bond returns can roughly be explained by two risk factors: term risk and default risk. This can give you insight as to whether or not you should be holding international bonds. For somebody that is only interested in exposing themselves to term risk, or near zero default risk, you woul...
by MrMatt2532
Sun Sep 20, 2015 3:16 pm
Forum: Investing - Theory, News & General
Topic: Why not use Global Market Cap %'s for Equities?
Replies: 64
Views: 4632

Re: Why not use Global Market Cap %'s for Equities?

Using concepts from modern portfolio theory, you can calculate the expected optimal international holding percentage you should use for a two asset portfolio (three including risk free asset). You need to assume various values for for US and ex-US assets. For example, using the following for real ex...
by MrMatt2532
Thu Jun 18, 2015 7:00 am
Forum: Personal Consumer Issues
Topic: LastPass.com Breach
Replies: 155
Views: 20367

Re: LastPass.com Breach

Is there any conclusion that can be sought from all of this discussion? The conclusion is the same as the premise: if you have a strong master password there is very little risk. I have been a lastpass user for years and events like this just remind me why I chose the service: because it was built ...
by MrMatt2532
Sun Jun 14, 2015 11:49 am
Forum: Personal Consumer Issues
Topic: Where do you keep your to do list?
Replies: 60
Views: 7593

Re: Where do you keep your to do list?

Use onenote if you are already using it. Otherwise, wunderlist or todoist would probably be perfect for your needs. Maybe try wunderlist first. Heck actually wunderlist is owned by Microsoft now so expect some future integration with some of their other products.
by MrMatt2532
Sun Apr 12, 2015 4:35 pm
Forum: Investing - Help with Personal Investments
Topic: Invest now or wait??
Replies: 22
Views: 3160

Re: Invest now or wait??

Since the consensus is that the bull is ending and a bear is right around the corner, why don't you just short the market?!? Just kidding, please don't do that. If the thought of investing 250k mostly in stocks doesn't sit well with you, maybe you should dial back on your portfolios risk level, mayb...
by MrMatt2532
Sun Feb 01, 2015 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Are car loans really that bad?
Replies: 86
Views: 16750

Re: Are car loans really that bad?

I think the main reason I would avoid a car loan is for financial simplicity and to make sure I don't fall into the trap of buying more car than I would otherwise buy had I been forced to pay in cash. Purely financially, I think it probably makes sense to get a loan at sub 2% rates for most investor...
by MrMatt2532
Sat Jan 31, 2015 3:02 pm
Forum: Investing - Theory, News & General
Topic: Chaos, complexity and entropy [for non-physicists]
Replies: 113
Views: 11053

Re: Chaos, complexity and entropy [for non-physicists]

One fun thing about entropy in an isolated system is that it tends to increase, but it doesn't have to. Thanks to the law of large numbers, it will effectively only increase or stay constant. Basically, what i'm saying is that all the particles in the room you are in could spontaneously go to the ot...
by MrMatt2532
Sat Jan 10, 2015 10:33 am
Forum: Personal Finance (Not Investing)
Topic: Purchasing a car with credit cards for cash back rewards?
Replies: 36
Views: 4884

Re: Purchasing a car with credit cards for cash back rewards

When we recently bought a car the dealer limit was $3000. However we also were able to put another $3000 on the card for the warranty (which we later canceled and got a check back in the mail), and finally we were able to put a another $500 deposit down on the card to put the car on hold/reserve (th...
by MrMatt2532
Sat Oct 18, 2014 8:16 am
Forum: Investing - Theory, News & General
Topic: Why do people use age instead of life expectancy?
Replies: 43
Views: 4193

Re: Why do people use age instead of life expectancy?

Probably because age has a significant negative correlation with life expectancy, just a guess :D
by MrMatt2532
Wed Oct 08, 2014 12:45 pm
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 6295

Re: Why Wouldn't You Tilt To Small Value?

The 10 largest holdings are conglomerates that are the equivalent of many smaller businesses. They should have MUCH more weighting than your local pizza place down the street. The top five holdings in VTSMX are Symbol % Assets YTD Return % AAPL 2.78 25.47 XOM 1.92 -6.25 MSFT 1.52 24.94 JNJ 1.32 16....
by MrMatt2532
Wed Oct 08, 2014 12:12 pm
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 6295

Re: Why Wouldn't You Tilt To Small Value?

I am someone who tilts, however I would argue that the equity style box should not be used to show you are undiversified! Do you realize that how they are defining Large/Medium/Small is largely arbitrary? Market weighting is the natural starting point, no question. And just because 75% of the compa...
by MrMatt2532
Wed Oct 08, 2014 11:43 am
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 6295

Re: Why Wouldn't You Tilt To Small Value?

The three fund portfolio equity box looks something like this: ```` Value Core Growth Large`` 25 ` 25 ` 25 Medium ` 6 ` 6 ` 6 Small ``` 2 ` 2 ` 2 This has 75% large caps and is equally balanced between growth/value therefore not taking advantage of the small value premium with only 33% in value and...
by MrMatt2532
Tue Sep 30, 2014 10:54 am
Forum: Investing - Help with Personal Investments
Topic: should participate in employer matches?
Replies: 20
Views: 2028

Re: should participate in employer matches?

Unless the expense ratios of these horrible options are anywhere close to 3%, still invest up to the match.
by MrMatt2532
Mon Sep 22, 2014 10:18 pm
Forum: Investing - Theory, News & General
Topic: Does Equity Risk Decrease over Time?
Replies: 51
Views: 3915

Re: Does Equity Risk Decrease over Time?

Very little discussion of the actual content of the article here. As far as I can tell the authors did two things. First they computed the optimum percent holding in equities as a function of investor risk aversion and investment period for normally distributed stock/bond distributions defined by me...
by MrMatt2532
Sat Sep 20, 2014 11:40 am
Forum: Investing - Help with Personal Investments
Topic: So what the benckmark SWR for a 25 year retirement?
Replies: 14
Views: 1249

Re: So what the benckmark SWR for a 25 year retirement?

So if 4% is the benchmark for planning purposes for a 30 year retirement what would be the benchmark for a 25 year retirement. I mean if you start taking SS at 67 or 70 then from that point it would seem 25 is more likely than 30. I realized that in retirement a variable withdrawal rate will be the...
by MrMatt2532
Sat Sep 06, 2014 10:04 am
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 154
Views: 16468

Re: Let me get this straight about SCV & factor diversificat

Larry - thinking about the net result of combining TSM with SCV. Seems to me that, since TSM is loaded negatively on size and value, the addition of SCV is likely to have the effect of "neutralizing" small and value risk factors - moving the net loading toward zero. The net result is that...
by MrMatt2532
Fri Sep 05, 2014 6:08 am
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 154
Views: 16468

Re: Let me get this straight about SCV & factor diversificat

No - Fund 1 - b3 = 1 -> positive expected return Fund 2 - b3 = -1 bv = 1 -> positive if the value premium is real Fund 3 - b3 = -0.9 bv = -0.1 bs =1 -> positive if the small premium is real after account for Beta and value. If the premiums are real, you would be able to construct three funds that a...
by MrMatt2532
Thu Sep 04, 2014 10:27 pm
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 154
Views: 16468

Re: Let me get this straight about SCV & factor diversificat

I'm not sure about that. What you described in your original post was how to construct three funds: 1) market fund, 2) small exposure only fund, and 3) value exposure only fund. Those three funds are not (necessarily) uncorrelated... We can define the funds as "the premium that a particular fa...
by MrMatt2532
Thu Sep 04, 2014 9:41 pm
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 154
Views: 16468

Re: Let me get this straight about SCV & factor diversificat

I'm ok with most that you wrote, however the correlations are not zero and there is the nothing in how they are defined that would imply this. See the figure in the post by Simplegift above! You can construct them to be zero by longing or shorting the other factors. E.g. if Value is correlated nega...
by MrMatt2532
Thu Sep 04, 2014 9:32 pm
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 154
Views: 16468

Re: Let me get this straight about SCV & factor diversificat

Most Bogleheads who own SCV funds do so in addition to TSM funds. Tilting like this gets you closer to an equal weight portfolio which would appear to be intuitively more diversified than the 2% Apple, 2% Exxon, etc purely cap weighted portfolio I've tilted since day one myself, however, it has not...
by MrMatt2532
Thu Sep 04, 2014 9:13 pm
Forum: Investing - Theory, News & General
Topic: Let me get this straight about SCV & factor diversification
Replies: 154
Views: 16468

Re: Let me get this straight about SCV & factor diversificat

At this point, we have 3 funds that don't correlate with each other at all (by definition!) and all of whom have large positive expected value. I'm ok with most that you wrote, however the correlations are not zero and there is the nothing in how they are defined that would imply this. See the figu...
by MrMatt2532
Thu Sep 04, 2014 7:16 pm
Forum: Investing - Theory, News & General
Topic: Why is REIT only sector fund recommended in slice & dice?
Replies: 113
Views: 10711

Re: Why is REIT only sector fund recommended in slice & dice

Simplegift wrote:Beyond portfolio diversification, another reason for a separate, overweight allocation to REITs is increased inflation protection.

Yes, this is a great point. I would expect REITS would be the next best things after 1) Long term debt and 2) TIPS for inflation protection.
by MrMatt2532
Tue Aug 19, 2014 12:59 pm
Forum: Investing - Help with Personal Investments
Topic: Why would anyone own a treasury bond fund?
Replies: 20
Views: 2200

Re: Why would anyone own a treasury bond fund?

1) Because the fees are tiny even compared to the small amount of effort required. 2) Because it removes the temptation to make calls or micromanage. 3) Ask Doc . This. You are basically paying a little bit more for a bond fund for less effort managing. Paying a little bit more for convenience is w...
by MrMatt2532
Sat Aug 02, 2014 4:46 pm
Forum: Investing - Theory, News & General
Topic: Prove adding SV will lower the risk, given the same E(r)
Replies: 79
Views: 5762

Re: Prove adding SV will lower the risk, given the same E(r)

Thanks Matt. Some of those changed quite a lot using the monthly data. Modigliani is one I've not heard of before. Are you saying all those ratios are native calculations in Excel, or do you have some add-in tool pack? I'll have to look some of those stats up to see if I can figure out how to inter...
by MrMatt2532
Fri Aug 01, 2014 9:24 pm
Forum: Investing - Theory, News & General
Topic: Prove adding SV will lower the risk, given the same E(r)
Replies: 79
Views: 5762

Re: Prove adding SV will lower the risk, given the same E(r)

MrMatt, this looks potentially interesting, and I hope you don't take offense that I can't get very far in deciphering it. Would you mind going into a bit more detail, including all the abbreviations you're using? Or maybe even better if you could post the actual spreadsheet? Also wondering, are yo...
by MrMatt2532
Fri Aug 01, 2014 11:20 am
Forum: Investing - Theory, News & General
Topic: Prove adding SV will lower the risk, given the same E(r)
Replies: 79
Views: 5762

Re: Prove adding SV will lower the risk, given the same E(r)

I just ran a bunch of numbers using the FF data from 1927-2013. Figured it might be useful for the discussion. Generally, you can see, the data shows one could have owned a mix of small and value, decreased beta, and still achieved the same expected return as the market. I computed the sharpe ratio ...
by MrMatt2532
Sun Jul 20, 2014 3:52 pm
Forum: Investing - Theory, News & General
Topic: Do you "Tax Adjust" your Asset Allocation (Pre vs Roth, etc)
Replies: 77
Views: 6437

Re: Do you "Tax Adjust" your Asset Allocation (Pre vs Roth,

Frankly, I don't buy the "don't overcomplicate" argument here. A dollar in a roth is definitely worth more than a dollar in a traditional ira/401k. I agree that you shouldn't waste hours predicting future tax rates and guessing which bracket you are going to fall into, however, almost any ...
by MrMatt2532
Sun Jul 20, 2014 3:12 pm
Forum: Investing - Theory, News & General
Topic: Do you "Tax Adjust" your Asset Allocation (Pre vs Roth, etc)
Replies: 77
Views: 6437

Re: Do you "Tax Adjust" your Asset Allocation (Pre vs Roth,

I didn't vote because you messed up the math a little bit. I would consider it 55% stocks, 45% bonds.
by MrMatt2532
Sun Jul 13, 2014 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Thoughts on 100% stock allocation for 33 year old
Replies: 85
Views: 11673

Re: Thoughts on 100% stock allocation for 33 year old

I personally think it is fine for most people under 40. Consider the following: Say you are planing to retire at 65 spending around $80k per year or around $2M in financial assets. Typically, in retirement, around a 50/50 stock bond mix is held. So in this retirement scenario, you would be putting $...
by MrMatt2532
Wed Jul 02, 2014 10:48 pm
Forum: Investing - Help with Personal Investments
Topic: Does my house count as my "real estate" for diversification?
Replies: 15
Views: 1565

Re: Does my house count as my "real estate" for diversificat

I would not count the house as "real estate" for diversification, because you aren't using it as an investment. If housing prices go up, owning your own house doesn't make you any better off, because you still live in the same house. If housing prices fall, owning your own house doesn't h...
by MrMatt2532
Wed Jul 02, 2014 10:37 pm
Forum: Personal Finance (Not Investing)
Topic: House maintenance cost
Replies: 13
Views: 1716

Re: House maintenance cost

I use 1% of structure cost as an estimate.

For example, you could look up on zillow what the home value is, say 300k. Then lookup the "land share" for your state, https://www.lincolninst.edu/subcenters/ ... -state.asp, say 15%.
Then your structure cost is equal to 300k * (1.0 - 0.15) = 255k. So your yearly maintenance estimate would be $2550.
by MrMatt2532
Tue Jun 24, 2014 1:49 pm
Forum: Investing - Theory, News & General
Topic: An Argument for Long Term Treasury Bonds
Replies: 62
Views: 9425

Re: An Argument for Long Term Treasury Bonds

Also this is partially why many here prefer treasuries only for bond component of the portfolio. The issue with corporates is that the default risk (of bonds) is correlated with market risk (of stocks), so you don't get this nice behavior in times of trouble.
by MrMatt2532
Thu Jun 12, 2014 12:24 pm
Forum: Investing - Theory, News & General
Topic: Why is Tilting and Slice&Dice so popular in this forum?
Replies: 110
Views: 8670

Re: Why is Tilting and Slice&Dice so popular in this forum?

What ex-US SV fund do you use? With Fidelity I have only been able to find IV and IS, so I do 10% each. But I would prefer to just do 20% ISV. I use DLS for developed markets and DGS for emerging markets. They are technically small but they filter and weight by dividends which is an inherent value ...
by MrMatt2532
Wed Jun 11, 2014 12:26 pm
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 5143

Re: Do REITs (and slicing in general) reduce risk?

Generally, I don't think its right to expect any random slice will reduce risk. For example, I wouldn't expect any benefit from taking the 500 companies in the SP500 and randomly separating them into two groups of 250, and then rebalancing between the two halves. However, where I do expect benefit i...
by MrMatt2532
Tue Jun 10, 2014 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Emergency Fund Alternative for Young Accumulator
Replies: 15
Views: 1871

Re: Emergency Fund Alternative for Young Accumulator

I would vote no. Once your taxable account is significant, a big emergency fund doesn't matter so much and only decreases long term returns. I would still keep about 3 months in cash for liquidity purposes.
by MrMatt2532
Tue Jun 10, 2014 9:32 am
Forum: Investing - Theory, News & General
Topic: Why is Tilting and Slice&Dice so popular in this forum?
Replies: 110
Views: 8670

Re: Why is Tilting and Slice&Dice so popular in this forum?

How can you use leverage to invest more in equity? Wouldn't the interest rate on a personal loan be almost as high as the expected market returns? I guess I am leveraging to an extent because I still have student loans but I just make the min payment and max my retirement contributions. Also I don'...
by MrMatt2532
Mon Jun 09, 2014 5:57 pm
Forum: Investing - Theory, News & General
Topic: investing international, why & how much
Replies: 51
Views: 5996

Re: investing international, why & how much

IMO the starting point should really be about 50% international, not 30%. US now less than 50% of global equity market and small home country bias is okay due to lower costs of domestic investments and bit more tax efficiency generally and for those with lots of labor capital it's likely US restric...
by MrMatt2532
Mon Jun 09, 2014 5:01 pm
Forum: Investing - Theory, News & General
Topic: Why is Tilting and Slice&Dice so popular in this forum?
Replies: 110
Views: 8670

Re: Why is Tilting and Slice&Dice so popular in this forum?

Even if you are in camp 2, can it still make sense to tilt if you have very high risk tolerance? Right, sure. I hinted at this in the first paragraph: if your only goal is to maximize expected return (or you have off the charts risk tolerance), then risk doesn't matter and you should tilt towards s...
by MrMatt2532
Mon Jun 09, 2014 2:37 pm
Forum: Investing - Theory, News & General
Topic: Why is Tilting and Slice&Dice so popular in this forum?
Replies: 110
Views: 8670

Re: Why is Tilting and Slice&Dice so popular in this forum?

Here is what most people agree on: 1) Value and/or Small exposure leads to greater expected returns. 2) Value and/or Small exposure leads to greater risk. With just this in mind, it doesn't necessarily make sense to tilt (unless your only goal is just to maximize expected returns). The big question ...
by MrMatt2532
Fri May 23, 2014 9:19 am
Forum: Investing - Help with Personal Investments
Topic: Post your current AA
Replies: 41
Views: 3354

Re: Post your current AA

Please explain your comments, as they seem to make no sense. Would you agree that your "US Total Market" also includes some "US Small/Mid"? The latter overlaps the former. Would you agree that your "Intl. Small" also includes some small-cap emerging markets? Does your ...
by MrMatt2532
Fri May 23, 2014 9:03 am
Forum: Investing - Help with Personal Investments
Topic: Post your current AA
Replies: 41
Views: 3354

Re: Post your current AA

I'll play: Assett Class Portfolio Percentage Target Treas 0.00% 0.00% TIPS 0.00% 0.00% US REIT 4.87% 4.91% Intl REIT 4.84% 4.91% CCF 4.95% 4.91% Gold 4.67% 4.91% US Mkt 20.97% 19.66% US SV 20.87% 19.66% Intl Dev Mkt 15.44% 16.20% Intl Dev SV 14.58% 16.20% EM Mkt 3.60% 3.46% EM SV 3.49% 3.46% CASH 1....
by MrMatt2532
Fri May 16, 2014 8:20 am
Forum: Investing - Theory, News & General
Topic: Deferred compensation plan--fixed income vs. equity AA?
Replies: 7
Views: 486

Re: Deferred compensation plan--fixed income vs. equity AA?

I would treat it as a bond, however it is worth less than if the payments are coming from the Treasury. Consider discounting its value according to the rates on an equivalent duration bond from the Fortune 500 company in question.
by MrMatt2532
Thu May 01, 2014 12:01 pm
Forum: Investing - Theory, News & General
Topic: What exactly is risk-adjusted return?
Replies: 71
Views: 3678

Re: What exactly is risk-adjusted return?

The sharpe ratio is probably the most used. Another is the sortino ratio, which is similar to sharpe but focuses on the downside deviation below a setpoint minimum acceptable return. There is another that I have made up and use sometimes which uses the downside deviation in the denominator. What I d...
by MrMatt2532
Thu May 01, 2014 10:14 am
Forum: Investing - Help with Personal Investments
Topic: 80/20 stocks/gold portfolio
Replies: 32
Views: 4201

Re: 80/20 stocks/gold portfolio

Gold might not be a bad choice for diversification purposes, but make no mistake that a 80/20 stocks/gold portfolio is more risky than a 80/20 stocks/bond portfolio. Instead, if you want to hold gold, take it out of the stock portion (of course i'm assuming you have picked the correct bond percenta...
by MrMatt2532
Thu May 01, 2014 8:24 am
Forum: Investing - Help with Personal Investments
Topic: 80/20 stocks/gold portfolio
Replies: 32
Views: 4201

Re: 80/20 stocks/gold portfolio

Gold might not be a bad choice for diversification purposes, but make no mistake that a 80/20 stocks/gold portfolio is more risky than a 80/20 stocks/bond portfolio. Instead, if you want to hold gold, take it out of the stock portion (of course i'm assuming you have picked the correct bond percentag...