Search found 3347 matches

by vineviz
Mon Apr 15, 2019 9:30 am
Forum: Personal Investments
Topic: "Never time the market" vs. lump sum investment
Replies: 148
Views: 15145

Re: "Never time the market" vs. lump sum investment

tadamsmar wrote:
Mon Apr 15, 2019 7:41 am
vineviz wrote:
Mon Apr 15, 2019 7:31 am
It’s also no myth that facts alone rarely persuade people to make lasting behavioral change.
Rarely. Therefore it sometimes happens.
You could win the lottery if you buy a ticket, but it’s still a bad idea.
by vineviz
Mon Apr 15, 2019 7:31 am
Forum: Personal Investments
Topic: "Never time the market" vs. lump sum investment
Replies: 148
Views: 15145

Re: "Never time the market" vs. lump sum investment

It's clearly a windfall he intends to buy and hold, set and forget. many things in life we don't carry to the full logical end. buying and selling this sum repeatedly obviously is not at play here either and is dogmatic/unproductive to hold him to this. It's not obvious what he will do in the futur...
by vineviz
Sun Apr 14, 2019 8:01 am
Forum: Investing - Theory, News & General
Topic: Stocks will return about 4% annually over the next decade or so rather than the 10% average annual returns - John Bogle
Replies: 104
Views: 13295

Re: Stocks will return about 4% annually over the next decade or so rather than the 10% average annual returns - John Bo

So nominal earnings for SPX may only grow at 4.0% per year but Earings per share would grow at 6.0% under those assumptions adding in 2.0% annual share reduction. Everyone seems to be forgetting buybacks. Sorry, but no. Where do you think the cash for dividends and buybacks comes from? You can’t co...
by vineviz
Sun Apr 14, 2019 7:50 am
Forum: Investing - Theory, News & General
Topic: Holding LT Treasury bonds in high equity portfolio with flat yield curve
Replies: 36
Views: 2675

Re: Holding LT Treasury bonds in high equity portfolio with flat yield curve

I don’t hold LTT for the yield. I hold them for the uncorrelation with stocks: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=276568&p=4452080&hilit=Box#p4452080 So no change for me. Hedgefundie I follow your other thread. I know what you mean about yield. But if interest rates rise, the LT ...
by vineviz
Sun Apr 14, 2019 7:47 am
Forum: Investing - Theory, News & General
Topic: Holding LT Treasury bonds in high equity portfolio with flat yield curve
Replies: 36
Views: 2675

Re: Holding LT Treasury bonds in high equity portfolio with flat yield curve

I'm not an expert, I'm just wondering if that provides some of the diversity away from equity volatility of long-term bonds while still hedging against inflation. Long term TIPS may indeed lower your inflation exposure relative to long term nominal bonds. The question is whether this is reduction i...
by vineviz
Sat Apr 13, 2019 6:07 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investment Strategy In An Uncertain World
Replies: 21
Views: 2720

Re: Larry Swedroe: Investment Strategy In An Uncertain World

if you’re explicitly assuming multiple sources of risk (not just variance, which is the only source of risk in the Markowitz CAPM), then traditional and common measures of risk-adjusted return (like Sharpe ratio) are no longer relevant. You’d have to describe what you mean by risk-adjusted return ,...
by vineviz
Fri Apr 12, 2019 9:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investment Strategy In An Uncertain World
Replies: 21
Views: 2720

Re: Larry Swedroe: Investment Strategy In An Uncertain World

This is what he said. If you believe that markets are highly efficient, you should also believe that all diversified sources of systematic risk (unique sources of risk and return), such as major asset classes and factor exposures like size, value, momentum, quality, profitability and carry should h...
by vineviz
Fri Apr 12, 2019 5:58 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investment Strategy In An Uncertain World
Replies: 21
Views: 2720

Re: Larry Swedroe: Investment Strategy In An Uncertain World

If one believes markets are highly efficient, then he should also believe that all factors and asset classes should provide about equal risk adjusted returns. I agree that to the extent that markets are efficient, this is a logical conclusion. Some dispute this, however, stating that efficiency doe...
by vineviz
Fri Apr 12, 2019 5:56 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investment Strategy In An Uncertain World
Replies: 21
Views: 2720

Re: Larry Swedroe: Investment Strategy In An Uncertain World

columbia wrote:
Fri Apr 12, 2019 5:46 pm
It seems that factor premiums (including size and value) wouldn’t exist, if markets were truly efficient.

So which one is it?
It’s both, or at least it can be. Risk premia exist even in efficient markets.
by vineviz
Fri Apr 12, 2019 5:50 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans to Launch Commodities Fund
Replies: 140
Views: 10396

Re: Vanguard Announces Plans to Launch Commodities Fund

Whatever you believe is going on in the background, we have not had "prolonged high inflation." We haven't had high inflation since Volcker. There hasn't been a hint of inflation in the last twenty years. There’s an adjective missing in the last quoted sentence, I think. We have inflation of some s...
by vineviz
Fri Apr 12, 2019 8:52 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans to Launch Commodities Fund
Replies: 140
Views: 10396

Re: Vanguard Announces Plans to Launch Commodities Fund

If the best expectation is matching inflation, why not just own TIPS? Commodities have expected returns of approximately the level of inflation (ie short term bonds) but their higher volatility and relatively low correlation with both stocks and bonds can be used to improve portfolio diversificatio...
by vineviz
Thu Apr 11, 2019 4:19 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans to Launch Commodities Fund
Replies: 140
Views: 10396

Re: Vanguard Announces Plans to Launch Commodities Fund

Commodities sound good , they just don't work good in a portfolio. Rick Ferri I"m not targeting you specifically on this Rick, because many people say this, but I just continue to be unable to verify this with calculators on the net. You can't verify it because statements like this ("they just don'...
by vineviz
Thu Apr 11, 2019 2:38 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Suppose the US returns 6% and International returns 4% over the next 100 years (I'm not saying I think this is going to happen, just hypothetically). Then the US:world cap ratio would trend towards 60:40, while a US-only investor would outperform a total world investor. The US:international market ...
by vineviz
Thu Apr 11, 2019 2:31 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Expected Vs. Realized Returns
Replies: 77
Views: 5726

Re: Larry Swedroe: Expected Vs. Realized Returns

I think what you say makes sense in theory. Do people really do this in practice? For example, did you slash your savings rate in 2008/2009, and start living it up, since expected returns increased dramatically? Slash? No, and I don't think that kind of dramatic change would EVER be the right respo...
by vineviz
Thu Apr 11, 2019 11:24 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Does the EMH not imply that the expected risk-adjusted returns of all equities are equal? No, this isn't a direct implication of EMH for the simple reason that EMH is not an asset pricing model. I'm aware that you don't have to look very far on the internet to find sites that link the two things (E...
by vineviz
Thu Apr 11, 2019 11:14 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Expected Vs. Realized Returns
Replies: 77
Views: 5726

Re: Larry Swedroe: Expected Vs. Realized Returns

The question is whether we as individual investors have enough confidence that the metrics being used to form expectations for future returns are better than conservative historically derived estimates. Yeah, I don't think that's the question we should be asking. The real question at the crux of th...
by vineviz
Thu Apr 11, 2019 11:02 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Expected Vs. Realized Returns
Replies: 77
Views: 5726

Re: Larry Swedroe: Expected Vs. Realized Returns

And the ONLY way to find the right balance between consumption and savings is to have an expectations about the future state of things like inflation rates and investment returns. Without those expectations, your financial plan might as well be built by monkeys with dart boards and typewriters. I d...
by vineviz
Thu Apr 11, 2019 11:01 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

The EMH strongly implies that the expected risk-adjusted returns of all publicly traded equities are the same. If that is indeed the case, then it shouldn't matter which basket(s) of equities one owns. There are couple additional implicit assumptions in this statement, to the extent that it is inco...
by vineviz
Thu Apr 11, 2019 10:36 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Here's a thought, and maybe it's somewhere in another thread. Is there an index/ETF/Mutual fund that focuses solely on US based companies that have significant global revenue exposure? I don't think so. S&P actually has an index for this ( S&P 500 Foreign Revenue Exposure Index ) but I don't know o...
by vineviz
Thu Apr 11, 2019 10:27 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

I don't think Mr. Bogle ever asked for "forgiveness" on his stance that holding international stocks just isn't necessary for a U.S. investors but it's something you should look at and make a decision for yourself. We don't need him to ask forgiveness (and it's too late for him now anyway, RIP): we...
by vineviz
Thu Apr 11, 2019 10:20 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Expected Vs. Realized Returns
Replies: 77
Views: 5726

Re: Larry Swedroe: Expected Vs. Realized Returns

The fact that we won't get it correct is absolutely the point. With all due respect, it certainly IS the point. If I have an appointment across town, I check the traffic online and several apps that provide an estimated driving time. If the estimated driving time is 60 minutes then I leave earlier ...
by vineviz
Wed Apr 10, 2019 7:00 pm
Forum: Personal Investments
Topic: 3 Fund Portfolio Bond Question
Replies: 9
Views: 673

Re: 3 Fund Portfolio Bond Question

A savings account is not a bond, so I would not count it as one. It is cash. If it is your emergency fund, then it is not part of your asset allocation. If it is part of your portfolio for retirement, etc., then you have an asset allocation that includes cash. It's nitpicky I know, but under the ho...
by vineviz
Wed Apr 10, 2019 6:53 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

I'm gonna have to agree with visualguy here. I immigrated to the US from the world's 2nd largest economy 10+ yrs ago. Sure. Why should we rely on silly things like financial and economic evidence when we can just use anecdotes and intuition instead? What do legions of PhD-trained economists know th...
by vineviz
Wed Apr 10, 2019 4:54 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

so here is the million dollar question - if there is so much disagreement in this thread and no consensus WHY is there a strong consensus among all the top financial institutions regarding International - Schwab, Fidelity, Vanguard are all consistently predicting that International will outperform ...
by vineviz
Wed Apr 10, 2019 3:20 pm
Forum: Personal Investments
Topic: Help me make the most of a bad 401K!
Replies: 17
Views: 1135

Re: Help me make the most of a bad 401K!

The fund I ended up choosing was the Invesco Diversified Dividend Fund, which at 1.08% seemed like the least egregiously expensive fund that still fits with my goals. But I’m very curious to hear your thoughts. I am 37, by the way, and do contribute the max to a Roth IRA at Vanguard every year. Tha...
by vineviz
Wed Apr 10, 2019 3:08 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Thanks, nisiprious - this is important data. It doesn't surprise me personally because I studied this before. I have to assume that the numerous "recency" claims here were wishful thinking and/or ignorance. In addition to reading up on " recency bias ", I think all investors would do well to read u...
by vineviz
Wed Apr 10, 2019 2:58 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Thanks, nisiprious - this is important data. It doesn't surprise me personally because I studied this before. I have to assume that the numerous "recency" claims here were wishful thinking and/or ignorance. In addition to reading up on " recency bias ", I think all investors would do well to read u...
by vineviz
Wed Apr 10, 2019 2:56 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

A perception of international underperformance is not "recency." You may not "think" that recency bias is at play, but by definition those operating under a bias never do. All three of the periods you chose to highlight (a curatorial choice you made, even if someone else ran the data first) have a ...
by vineviz
Wed Apr 10, 2019 2:02 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

You can't argue that two assets have the same expected return IF one of them has higher costs AND more risk. It's internally inconsistent. I was talking about the same return before the extra burden on US investors of costs, taxes, and potential currency hit. I figured that was what you meant, but ...
by vineviz
Wed Apr 10, 2019 1:44 pm
Forum: Investing - Theory, News & General
Topic: Junk bonds undervalued due to boglehead popularity?
Replies: 51
Views: 4576

Re: Junk bonds undervalued due to boglehead popularity?

But it means a large segment of the population is ignoring a perfectly good class of investment vehicle just because it's not the fashionable way to go. Would that imply junk bonds are going to be undervalued because of a lack of demand? First, I think it's not quite accurate to say junk bonds are ...
by vineviz
Wed Apr 10, 2019 1:30 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

As someone mentioned before, if you believe that everything is "priced in", and returns should be similar barring surprises, then why invest in ex-US which has higher overheads (costs, taxes) and vulnerability to currency fluctuations. This isn't quite an accurate representation of the "priced in" ...
by vineviz
Wed Apr 10, 2019 12:24 pm
Forum: Investing - Theory, News & General
Topic: Holding LT Treasury bonds in high equity portfolio with flat yield curve
Replies: 36
Views: 2675

Re: Holding LT Treasury bonds in high equity portfolio with flat yield curve

If you know rates will rise, LT treasuries are a terrible choice, but nobody knows that. In my mind, you'd not only need to know THAT rates will rise but also WHEN they will rise and when they will STOP rising. For instance, the yield on the 10-year Treasury rose from 1.37% in July 2016 to 3.24% in...
by vineviz
Wed Apr 10, 2019 11:54 am
Forum: Investing - Theory, News & General
Topic: Holding LT Treasury bonds in high equity portfolio with flat yield curve
Replies: 36
Views: 2675

Re: Holding LT Treasury bonds in high equity portfolio with flat yield curve

My question is for people who do use (or people who are knowledgeable about the topic) LT treasury in high equity portfolio, do you have any concern about this strategy now that the yield curve is more flat? Does the yield curve change your position in any way? No. Interest rates will do what they ...
by vineviz
Wed Apr 10, 2019 11:10 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

From an ER standpoint, I wouldn't disagree with you, but speaking out of experience (my equities are split 50/50), the after-tax considerations are non negligible. International index funds tend to generate a lot more unqualified dividends than US index funds. And then there is this pesky thing abo...
by vineviz
Wed Apr 10, 2019 10:54 am
Forum: Investing - Theory, News & General
Topic: Socially Responsible [Investing]
Replies: 54
Views: 3073

Re: Socially Responsible

All other things being equal, socially responsible funds should have lower expected returns than the market as a whole by raising the cost of capital for "sinful" companies. Again, this is stated as a hypothesis that is completely testable and - in fact - has been tested. So let's see some evidence...
by vineviz
Wed Apr 10, 2019 10:39 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

You get hurt more during the periods of poor ex-US performance than you benefit during the periods of good ex-US performance, so overall you get under-performance. Again, not a surprise considering the realities of Europe, Japan, China, India vs the US as things stand in our era. Like I said, I'm n...
by vineviz
Wed Apr 10, 2019 10:00 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Over the long term if international and US are expected to have the same, or even similar, returns (BEFORE fees) yet international is more costly to own, then it's pretty obvious which one will have higher returns AFTER fees. That's a bunch of "ifs", of course, but you don't have to look very hard ...
by vineviz
Wed Apr 10, 2019 9:53 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

Who knows about 50 years or 100 years from now, but over my limited investment time frame, it's a dud. Sorry, but I don't understand this rationale: if international stocks outperform US stocks in seven out of the next ten years (which they did from 2000 to 2009), how would that be "a dud"? Or even...
by vineviz
Wed Apr 10, 2019 8:39 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

The canard used to sell international funds is that you can reduce volatility by mixing them with your U.S. holdings, but that just isn't true. It's not a canard if it's a fact. https://i.imgur.com/R7opgqE.png If you own foreign stocks there are fees associated with the currency exchange that occur...
by vineviz
Wed Apr 10, 2019 7:40 am
Forum: Investing - Theory, News & General
Topic: Socially Responsible [Investing]
Replies: 54
Views: 3073

Re: Socially Responsible

Why should socially responsible companies be expected to do worse? I would expect them to do worse because they are using some of their product/ money/ manpower/ time to do something extra that their competitors (who don't claim to be socially responsible) don't do. For example, if they recycle eve...
by vineviz
Wed Apr 10, 2019 7:36 am
Forum: Investing - Theory, News & General
Topic: Non-Transparent ETFs APPROVED!
Replies: 6
Views: 687

Re: Non-Transparent ETFs APPROVED!

sunnywindy wrote:
Tue Apr 09, 2019 7:50 am
If DFA offered some of their funds in this type of ETF wrapper, I would consider it. (Mr. Larry Swedroe - any thoughts?)
They already do. All the John Hancock multifactor ETFs are managed by DFA.

https://www.jhinvestments.com/investmen ... _class=ETF
by vineviz
Wed Apr 10, 2019 6:54 am
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

It's curious to me how often I see this myth about "currency risk" repeated, without any attempt to articulate what "currency risk" even represents in this context much less an attempt to demonstrate how negative or positive it might be. Currencies fluctuate relative to each other. This is true. If...
by vineviz
Wed Apr 10, 2019 6:10 am
Forum: Investing - Theory, News & General
Topic: Socially Responsible [Investing]
Replies: 54
Views: 3073

Re: Socially Responsible

Why should socially responsible companies be expected to do worse? I would expect them to do worse because they are using some of their product/ money/ manpower/ time to do something extra that their competitors (who don't claim to be socially responsible) don't do. For example, if they recycle eve...
by vineviz
Tue Apr 09, 2019 3:16 pm
Forum: Personal Investments
Topic: International under-performance
Replies: 204
Views: 11673

Re: International under-performance

The currency fluctuation aspect is just uncompensated risk. It's actually one of the negatives about investing in ex-US (others being higher costs and foreign taxes). It's curious to me how often I see this myth about "currency risk" repeated, without any attempt to articulate what "currency risk" ...
by vineviz
Tue Apr 09, 2019 3:07 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]
Replies: 1611
Views: 100416

Re: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]

At any rate, to the extent callable bonds are excluded from the yields used in the backtest model, callability is even more of a red herring in criticizing the validity of the backtest model's Treasury returns pre-1980. I don't think this is a defensible statement. For one thing, if callable Treasu...
by vineviz
Tue Apr 09, 2019 2:48 pm
Forum: Investing - Theory, News & General
Topic: REITs vs. Actual Real Estate Returns, 1904-2015
Replies: 18
Views: 1638

Re: REITs vs. Actual Real Estate Returns, 1904-2015

DISCUSSION: Granted this historical data is quite limited — but on the scale of multiple decades, the trends in REIT returns and the returns of commercial residential real estate appear remarkably similar. REIT returns are of course much more volatile, reflecting expectations of future earnings and...
by vineviz
Tue Apr 09, 2019 11:34 am
Forum: Investing - Theory, News & General
Topic: Socially Responsible [Investing]
Replies: 54
Views: 3073

Re: Socially Responsible

Believe socially responsible (some might say self-congratulatory virtue signaling) funds have a history of underpeformance each and every year. Question your own premise: what evidence do you have for believing that "socially responsible... funds have a history of underpeformance each and every yea...
by vineviz
Tue Apr 09, 2019 10:51 am
Forum: Personal Investments
Topic: Reasonable plan for tilting?
Replies: 17
Views: 1558

Re: Reasonable plan for tilting?

I'm avoiding small value because of my suspicion that, as the most elegant way to tilt, small value is a crowded trade. Thoughts? My thought is this: you either think that the the size and value premia exist, or you don't. You SAY that this is what you think and you've built portfolio BASED on this...
by vineviz
Tue Apr 09, 2019 10:34 am
Forum: Investing - Theory, News & General
Topic: Small Cap Growth and Large Cap Value focus. Why Small value??
Replies: 8
Views: 939

Re: Small Cap Growth and Large Cap Value focus. Why Small value??

Investors who choose to invest in growth stocks are effectively subsidizing the portfolios of investors who invest in value stocks. And we thank you. :-) And when has that started to.. "pay dividends" for you? :D It happens pretty reliably right about the time people join this forum to tout the adv...
by vineviz
Tue Apr 09, 2019 7:16 am
Forum: Personal Finance (Not Investing)
Topic: Wife hates new job...wants to quit after 1 day
Replies: 191
Views: 18505

Re: Wife hates new job...wants to quit after 1 day

Advice for her and me as a supportive spouse? It sounds like you're already doing it: listen, be sympathetic, and care for her during what is surely a stressful time. As for the job, normally my advice is to give it a little time to settle in but this sounds terrible. It's probably not too soon to ...