Search found 521 matches

by Dialectical Investor
Wed Aug 21, 2019 12:37 pm
Forum: Investing - Theory, News & General
Topic: Why investment complexity is appealing and simplicity isn't
Replies: 65
Views: 3800

Re: Why investment complexity is appealing and simplicity isn't

I disagree with the premise that complexity is appealing. All of the reasons given above have nothing to do with complexity and have everything to do with a lack of knowledge/understanding. Likewise, simplicity is not the primary objective. There are a multitude of simple yet poor investing strategi...
by Dialectical Investor
Tue Aug 20, 2019 10:15 pm
Forum: Investing - Theory, News & General
Topic: Total index funds are “crowded”
Replies: 26
Views: 3498

Re: Total index funds are “crowded”

Here's an example why this assertion is nonsense. Let's say you have a universe of 4 stocks, each with 4 shares, and 4 investors. Buy and hold investors. Universe 1: each of the 4 investors owns all 4 shares of 1 stock. Universe 2: each investor owns 1 share of each. So universe 2 is "crowded", but...
by Dialectical Investor
Tue Aug 20, 2019 6:55 pm
Forum: Investing - Theory, News & General
Topic: Total index funds are “crowded”
Replies: 26
Views: 3498

Re: Total index funds are “crowded”

Cap-weight total market indexing is the only strategy that cannot become crowded, because the people who use it do not alter the composition of the assets remaining for everyone else. If you have a pot of stew that is 50% beef and 50% potatoes, and a group of people who, when it is their turn, sele...
by Dialectical Investor
Tue Aug 20, 2019 12:37 pm
Forum: Investing - Theory, News & General
Topic: "The Best Diversifiers For Your Equity Portfolio"
Replies: 126
Views: 10965

Re: "The Best Diversifiers For Your Equity Portfolio"

...You can't collect 6%-7% anymore from a portfolio of quality bonds, you will get more like 2%... This reminds me of how Jack Bogle used to say having an allocation to bonds is like having an "anchor to windward". I am no sailor but I took that to mean you have a part of your portfolio that will b...
by Dialectical Investor
Fri Aug 16, 2019 3:31 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 28808

Re: Larry Swedroe: Small Value Stocks are Cheap

Many of Taylor's statements regarding factor investing are, quite simply, wrong, and that assessment has nothing to do with the merits of any particular strategy. I think it is in the best interest of the forum to point out when incorrect information is posted, regardless of the source or topic. Th...
by Dialectical Investor
Fri Aug 16, 2019 3:06 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 28808

Re: Larry Swedroe: Small Value Stocks are Cheap

So we agree that TSM does not provide factor exposure (other than market beta) then? whodunit: Sorry, I do not agree. We know factor proponents like to say "TSM does not provide factor exposure." Nevertheless, it is obvious that TSM (Total U.S. Stock Market) holds nearly every U.S. stock including ...
by Dialectical Investor
Wed Aug 14, 2019 11:14 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 28808

Re: Past Performance and Nobel Laureates Recommendations

Jack Bogle's Words of Wisdom: "If we abandon our inevitably futile attempts to obtain an edge over other market participants and simply hold our share of the market portfolio, we win." Out of all the quotes and their missing context, meaning, and message, this is probably the most troublesome. Cert...
by Dialectical Investor
Wed Aug 14, 2019 10:13 pm
Forum: Investing - Theory, News & General
Topic: Lawsuit suggests MIT allowed Fidelity to pack retirement plans with high-fee funds
Replies: 54
Views: 4904

Re: Lawsuit suggests MIT allowed Fidelity to pack retirement plans with high-fee funds

Looks like a good list of funds to me. If you want broad, low-cost index funds, those are available.
by Dialectical Investor
Wed Aug 14, 2019 9:17 pm
Forum: Investing - Theory, News & General
Topic: Treasury 2-10 year yield curve has inverted!
Replies: 115
Views: 10946

Re: Treasury 2-10 year yield curve has inverted!

gotta say, I don’t think anything good comes from watching CNBC. :wink: +1 +1. I think CNBC is trying to generate news instead of just reporting it. Par for the course with them. Most of what I have read about the yield curve says that there is an increased chance of a recession somewhere between 6...
by Dialectical Investor
Wed Aug 14, 2019 8:40 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 28808

Re: Larry Swedroe: Small Value Stocks are Cheap

So we agree that TSM does not provide factor exposure (other than market beta) then? whodunit: Sorry, I do not agree. We know factor proponents like to say "TSM does not provide factor exposure." Nevertheless, it is obvious that TSM (Total U.S. Stock Market) holds nearly every U.S. stock including ...
by Dialectical Investor
Fri Aug 09, 2019 2:58 pm
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 19170

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

... As I understand it, dividends must come out of earnings. Perhaps you mean to say that dividends do not need to come out of current earnings and may instead come from previous earnings. In other words, dividends come out of retained earnings, and a corporation generally cannot pay a dividend if ...
by Dialectical Investor
Thu Aug 08, 2019 11:09 pm
Forum: Investing - Theory, News & General
Topic: Simple vs Complex Index Portfolio
Replies: 26
Views: 2867

Re: Simple vs Complex Index Portfolio

Is there really added value to having a complex portfolio, or more cynically, is complexity just something that advisers add to make them look like they're creating value? I think you're asking the wrong question. "Simplicity" and "complexity" are often buzzwords used by people selling ideas. Some ...
by Dialectical Investor
Thu Aug 08, 2019 10:33 pm
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 19170

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

So your theory is that dividends payouts are basically a liquidation of the company? That's why Coca Cola which must have paid out more than its share price over the years is now trading at zero. Really? In fact, a dividend is exactly that: a partial liquidation of the company. Liquidation usually ...
by Dialectical Investor
Thu Aug 08, 2019 10:28 pm
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 19170

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

Over time the corporation may or may not have positive earnings. That's what you get when you invest. Dividends usually, but don't always have to, come out of earnings. Corporations can, and do, borrow money for the express purpose of paying it out as dividends. They do the same with asset sales. A...
by Dialectical Investor
Thu Aug 08, 2019 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: Do you pay for kids college if a non-STEM major?
Replies: 62
Views: 3025

Re: Do you pay for kids college if a non-STEM major?

Plenty of underemployed math and science majors. Plenty of STEM programs that are not particularly intellectually rigorous nor favorable for obtaining a high-paying or satisfying job upon completion. I don't see a reason for this criteria unless there are sentimental reasons at play. I would like to...
by Dialectical Investor
Thu Aug 08, 2019 12:29 pm
Forum: Investing - Theory, News & General
Topic: "Locking in Gains" and How to Do So
Replies: 17
Views: 2154

Re: "Locking in Gains" and How to Do So

If you invest according to a pre-determined asset allocation, the phrase has no meaning. Don't worry about it.
by Dialectical Investor
Mon Jul 29, 2019 11:32 pm
Forum: Investing - Theory, News & General
Topic: Why not aim for a HIGH YIELDING portfolio?
Replies: 60
Views: 5120

Re: Why not aim for a HIGH YIELDING portfolio?

"The declaration of a dividend naturally encourages investors to purchase stock. Because investors know that they will receive a dividend if they purchase the stock before the ex-dividend date, they are willing to pay a premium. This causes the price of a stock to increase in the days leading up to...
by Dialectical Investor
Sat Jul 20, 2019 8:41 pm
Forum: Personal Investments
Topic: What tilt(s) have you adopted?
Replies: 28
Views: 1852

Re: What tilt(s) have you adopted?

This is a Rorschach test for this forum if I've ever seen one. Already a few interesting answers, including not answering the question (simplicity), my tilt is not a tilt (implied by omission), and the most strange one, your tilt is not a tilt. The actionable message for the OP: consider responses s...
by Dialectical Investor
Fri Jul 19, 2019 3:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Which is better, mutual funds or CDs?
Replies: 29
Views: 4261

Re: Larry Swedroe: Which is better, mutual funds or CDs?

Liquidity is not just that you can sell, but that you can convert to cash at the underlying value. On fixed income, losing perhaps 1% is not liquid enough for me. True, but in the case Larry referenced, brokered CDs are yielding .8% higher annually than Treasuries of the same maturity. Unless you p...
by Dialectical Investor
Fri Jul 19, 2019 3:07 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Which is better, mutual funds or CDs?
Replies: 29
Views: 4261

Re: Larry Swedroe: Which is better, mutual funds or CDs?

Liquidity is not just that you can sell, but that you can convert to cash at the underlying value. On fixed income, losing perhaps 1% is not liquid enough for me. True, but in the case Larry referenced, brokered CDs are yielding .8% higher annually than Treasuries of the same maturity. Unless you p...
by Dialectical Investor
Fri Jul 19, 2019 3:03 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Which is better, mutual funds or CDs?
Replies: 29
Views: 4261

Re: Larry Swedroe: Which is better, mutual funds or CDs?

I don't like to speak too often about my personal portfolio, because I don't think it's relevant, but I will share my feelings on this one. A liquidity premium offered due to fleeting circumstances or visible only in comparison to something like nominal Treasuries that are ultra-liquid is a liquidi...
by Dialectical Investor
Fri Jul 19, 2019 2:54 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Which is better, mutual funds or CDs?
Replies: 29
Views: 4261

Re: Larry Swedroe: Which is better, mutual funds or CDs?

I don't like to speak too often about my personal portfolio, because I don't think it's relevant, but I will share my feelings on this one. A liquidity premium offered due to fleeting circumstances or visible only in comparison to something like nominal Treasuries that are ultra-liquid is a liquidit...
by Dialectical Investor
Fri Jul 19, 2019 12:09 pm
Forum: Personal Investments
Topic: Bond fund versus individual bonds
Replies: 39
Views: 2057

Re: Bond fund versus individual bonds

However, with the bond fund the yield may go up and down with the market whereas with the individual the yield does not go up and down with the market. Is that correct? Incorrect. The bond coupon payments don't change, but the yield does change. You can see this by looking at outstanding bonds and ...
by Dialectical Investor
Thu Jul 18, 2019 2:46 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Next "Bogleheads on Investing" podcast guest
Replies: 61
Views: 7107

Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

I'd like to know what Larry eats for breakfast. You, too, Rick. And all your other future guests as well. Also, Larry has stated something to the effect that a very small percentage of investors can tilt away from the market portfolio (however defined) without the help of an advisor, and stay the co...
by Dialectical Investor
Thu Jul 18, 2019 2:39 pm
Forum: Investing - Theory, News & General
Topic: From ex-dividend to distrubution where is my money?
Replies: 101
Views: 6248

Re: From ex-dividend to distrubution where is my money?

Exactly, they are not "taking value". They are saying that on August 1, they are going to take the dividend out of the stock and pay it. And they make this official on July 9th, so the market says "hey, this company is going to have less cash soon, because it will pay a dividend out, so it will be ...
by Dialectical Investor
Mon Jul 15, 2019 10:52 pm
Forum: Personal Investments
Topic: Poor financial advisor performance
Replies: 71
Views: 4399

Re: Poor financial advisor performance

jjodod wrote:
Mon Jul 15, 2019 4:25 pm

I tried using the Vanguard financial advisor but was dissatisfied with the results of their recommendations.
I think you need to decide what you want from an advisor. I sense there is an expectations problem, not an advisor problem.
by Dialectical Investor
Mon Jul 15, 2019 10:13 pm
Forum: Investing - Theory, News & General
Topic: Small-Cap Value Funds: Then And Now
Replies: 74
Views: 9352

Re: RTM

I think this kind of language is where Factor Investing advocates and Factor Investing skeptics start running into each other. The Factor Model is exactly that, a model, and one in a social science. But Factor Investing advocates often speak of factors as, well, facts. They are not. Not in the sens...
by Dialectical Investor
Wed Jul 03, 2019 8:45 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

I believe Larry that you have given a good explanation for stock prices but I don't believe that valuation boils down to just math. There are intangible factors at work too. These are ultimately incorporated into the math via cash flows or discount rate. That's what the model is for--what seems to ...
by Dialectical Investor
Wed Jul 03, 2019 3:54 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

There is a philosophical disagreement between those who favor very simple portfolios based upon the "Total" Stock and Bond indexes and those who want to diversify across factors. I see little indication we're at a stage where actual disagreement is possible. (Sometimes, yes, but not often, and only...
by Dialectical Investor
Wed Jul 03, 2019 1:57 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

larryswedroe wrote:
Wed Jul 03, 2019 1:53 pm

What he might do is discount the cash flows at the Treasury rate and then say okay for my margin of safety I will pay 50% of that valuation. Basically the same thing as applying an equity risk premium and adding it to the risk free rate.
Exactly.
by Dialectical Investor
Wed Jul 03, 2019 1:54 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

There is a philosophical disagreement between those who favor very simple portfolios based upon the "Total" Stock and Bond indexes and those who want to diversify across factors. I see little indication we're at a stage where actual disagreement is possible. (Sometimes, yes, but not often, and only...
by Dialectical Investor
Tue Jul 02, 2019 10:22 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

Yes, really. They then adjust the number for what is effectively a different discount rate. To be fair, he has been on the record saying in very low rate environment they may use a higher rate --- Buffett: "We basically think in terms of the long-term government rate. And there may be times, when i...
by Dialectical Investor
Tue Jul 02, 2019 9:55 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

Of course, one must consider the notion that the "saviour" (doing it for the sake of protecting novices [me] from blatantly poor advice[Buffett's]) could be unknowingly wrong. Buffett is saying interest rates are the yardstick (for comparative valuation), they are the discount rate. (he says the S&...
by Dialectical Investor
Tue Jul 02, 2019 9:50 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

Of course, one must consider the notion that the "saviour" (doing it for the sake of protecting novices [me] from blatantly poor advice[Buffett's]) could be unknowingly wrong. Buffett is saying interest rates are the yardstick (for comparative valuation), they are the discount rate. (he says the S&...
by Dialectical Investor
Mon Jul 01, 2019 6:29 am
Forum: Investing - Theory, News & General
Topic: Ric Edelman's view on the stock market
Replies: 27
Views: 4341

Re: Ric Edelman's view on the stock market

In about 10-15 years, I retire. The math says I will have paid ~25K over that time in fees (assuming 3% real return annually). Do I like paying out 25K? Not particularly. Do I think I could do better? Probably not. Do I have time to really manage my investments? NO! I work 7 days a week at two jobs...
by Dialectical Investor
Thu Jun 27, 2019 1:56 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11498

Re: "Alice's Adventures in Factorland"

Bogleheads: Factor investors are having a difficult time. Small-cap value (factor) funds are heavily promoted by the fund industry as a way to increase portfolio returns. Nevertheless, small cap value funds have the worst 5-year returns of all Morningstar style categories. Index Performance Return ...
by Dialectical Investor
Wed Jun 26, 2019 12:05 pm
Forum: Investing - Theory, News & General
Topic: TIPS bond funds have provided less inflation protection than nominal treasuries recently
Replies: 23
Views: 1659

Re: TIPS bond funds have provided less inflation protection than nominal treasuries recently

You should not be buying TIPS as a short term investment unless you belive that your inflation estimates are better than the market. This may be true if you are seeking the highest nominal return and are making your decision (and evaluating the outcome) based only upon the nominal return. If you wa...
by Dialectical Investor
Wed Jun 26, 2019 11:44 am
Forum: Personal Investments
Topic: What Allocation of International for Portfolio
Replies: 9
Views: 1038

Re: What Allocation of International for Portfolio

Good evening Bogleheads, What is your allocation of International stock for your portfolio? I have thought of 70 US -30 INT but also have heard maybe 80 US -20 INT. What are your arguments for either way? You may get better responses if you present your own thoughts as to why you think the allocati...
by Dialectical Investor
Wed Jun 26, 2019 11:35 am
Forum: Investing - Theory, News & General
Topic: Ric Edelman's view on the stock market
Replies: 27
Views: 4341

Re: Ric Edelman's view on the stock market

Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run. Start at ~1:22:40 listen until 1:13, a total of about 10 minutes. http://www.wlsam.com/ric-edelman...
by Dialectical Investor
Wed Jun 26, 2019 11:04 am
Forum: Investing - Theory, News & General
Topic: TIPS bond funds have provided less inflation protection than nominal treasuries recently
Replies: 23
Views: 1659

Re: TIPS bond funds have provided less inflation protection than nominal treasuries recently

But shouldn't you at least expect to get a return equal to the inflation rate? You can expect this with individual TIPS held to maturity, yes? And I thought that a TIPS bond fund with short maturities would do the same thing. The rate of return you should expect for an individual TIPS held to matur...
by Dialectical Investor
Wed Jun 26, 2019 11:01 am
Forum: Investing - Theory, News & General
Topic: TIPS bond funds have provided less inflation protection than nominal treasuries recently
Replies: 23
Views: 1659

Re: TIPS bond funds have provided less inflation protection than nominal treasuries recently

You should not be buying TIPS as a short term investment unless you belive that your inflation estimates are better than the market. This may be true if you are seeking the highest nominal return and are making your decision (and evaluating the outcome) based only upon the nominal return. If you wa...
by Dialectical Investor
Wed Jun 26, 2019 10:41 am
Forum: Investing - Theory, News & General
Topic: TIPS bond funds have provided less inflation protection than nominal treasuries recently
Replies: 23
Views: 1659

Re: TIPS bond funds have provided less inflation protection than nominal treasuries recently

How come? Real short-term yields were negative on many occasions during 2010-2017. That is, investors were buying these securities knowing they would have a real loss. However, they still received inflation protection, because their real return was known, while the real return on nominal Treasuries...
by Dialectical Investor
Wed Jun 26, 2019 8:15 am
Forum: Investing - Theory, News & General
Topic: Purpose of Stocks?
Replies: 29
Views: 5798

Re: Purpose of Stocks?

I meant, markets expect Amazon to grow at 10%, and GM at 2%, so you pay 500 for Amazon and 100 for GM? What are the actual numbers and how are you making money. You pay in advance for expected growth so where do you profit on the deal Expected growth is just part of the equation. (And as ohai noted...
by Dialectical Investor
Wed Jun 26, 2019 7:38 am
Forum: Investing - Theory, News & General
Topic: TIPS bond funds have provided less inflation protection than nominal treasuries recently
Replies: 23
Views: 1659

Re: TIPS bond funds have provided less inflation protection than nominal treasuries recently

How come? Real short-term yields were negative on many occasions during 2010-2017. That is, investors were buying these securities knowing they would have a real loss. However, they still received inflation protection, because their real return was known, while the real return on nominal Treasuries...
by Dialectical Investor
Tue Jun 25, 2019 3:44 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 204
Views: 20671

Re: are TIPS expensive? or are they cheap?

Okay, but the unprecedented event occurred. Why pretend it didn't happen or won't influence future rates? I'm not pretending it didn't happen. Just that I am not going to make future judgements based on that relatively short and abnormal period. Swedroe used data from 1926-2004. Using the date from...
by Dialectical Investor
Tue Jun 25, 2019 3:36 pm
Forum: Investing - Theory, News & General
Topic: Excluding International All Together?
Replies: 82
Views: 9898

Re: Excluding International All Together?

I like how these threads go. A forum member questions the need for international stocks, and the same group enters to debate the question for the umpteenth time, using the same arguments, charts, and labels. OP typically disappears, leaving the usual suspects to argue amongst themselves. Once everyt...
by Dialectical Investor
Tue Jun 25, 2019 3:26 pm
Forum: Personal Consumer Issues
Topic: Purchasing Major Appliances from Costco
Replies: 41
Views: 6330

Re: Purchasing Major Appliances from Costco

Installation incompetent (and this was just for a W/D). Did not know how to properly attach the electrical cord to the dryer. Also failed to notify me of a defective part, leaving me to find it and redo it after they left. I guess that last part is sort of understandable given the circumstances. Thi...
by Dialectical Investor
Tue Jun 25, 2019 3:18 pm
Forum: Personal Consumer Issues
Topic: Excel Question
Replies: 3
Views: 891

Re: Excel Question

Using the ribbon interface: Page Layout > Breaks > Reset All Page Breaks. You also can go to View > Page Break Preview to see them. If you don't use the ribbon interface, lend me your time machine. 2005 was an interesting year.
by Dialectical Investor
Tue Jun 25, 2019 10:38 am
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 121
Views: 7776

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

Bogleheads: A fund's past performance depends almost entirely on the start and ending dates selected. This is why the last chart (above) looks so different than the previous charts. I will not guess which is more useful (if at all). The Wisdom of Jack Bogle: "The biggest mistake investors make is l...
by Dialectical Investor
Tue Jun 25, 2019 10:20 am
Forum: Personal Investments
Topic: Why does AA matter as long as I stick to it?
Replies: 26
Views: 2797

Re: Why does AA matter as long as I stick to it?

Raybo wrote:
Tue Jun 25, 2019 10:08 am

What does "sticking to it" mean to you?
To borrow from a comedic quip, to me it means having the same plan on Wednesday that one had on Monday no matter what happened on Tuesday. That could be wise or foolish, depending on context. Without context, it is foolish.