Search found 391 matches

by pward
Wed Oct 02, 2019 6:08 pm
Forum: Investing - Theory, News & General
Topic: E-Trade joins the party $0 commission
Replies: 37
Views: 4693

Re: E-Trade joins the party $0 commission

yakk0 wrote: Wed Oct 02, 2019 5:52 pm Does anyone know if this applies to ESPP plans managed by them too? I know I end up paying ridiculous commissions to sell ESPP and RSUs held at Etrade. And I don't even know how the commissions are calculated. They've been different every time but range between $29-86.
I'm in the same boat, though ours is a $30 flat fee per transaction. But 4x a year for RSU's and 2x per year on ESPP that adds up. My guess is that RSU's and ESPP will likely not be included unfortunately.
by pward
Mon Sep 30, 2019 5:37 pm
Forum: Investing - Theory, News & General
Topic: Stocks, Bonds and Gold are expensive at the same time
Replies: 13
Views: 1333

Re: Stocks, Bonds and Gold are expensive at the same time

Remember "uncorrelated" means they are sometimes positively correlated, sometimes negatively. Especially in short to medium term, these "correlations" will all bounce around. I think one could definitely make a case that stocks and bonds are expensive, but gold is still well below it's high from back in 2011. It was in a bear market for many years, and just started a new bull market a few short months ago. It has had quite a run in the short term, but I wouldn't call it "expensive" by any means, especially in an environment with so much negative real and nominal bonds globally. That being said, there is never a perfect time to create a diversified portfolio. Something is always going to look expensive. I mean, ...
by pward
Thu Jun 13, 2019 5:50 pm
Forum: Personal Investments
Topic: Why asset allocation should match market capitalization
Replies: 16
Views: 3283

Re: Why asset allocation should match market capitalization

You're going to find a range of opinions here. My opinion is that it makes absolutely 0 sense to be short your local currency and economy because you are inexorably tied to both. When you hold more long foreign than local stocks it is essentially being short your local currency and economy. Not only that but you are supporting foreign companies and governments above and beyond your local ones. I personally would not recommend that. I would personally make sure at least 50% of your assets were local to avoid this. Most of the people here will probably say the opposite, but to me me just makes no sense to hold more foreign than local assets. There is no real magic to "global market cap". I thing global market cap can make sense for ...
by pward
Fri Jun 07, 2019 11:15 am
Forum: Investing - Theory, News & General
Topic: "Vanguard Patented a Way to Avoid Taxes on Mutual Funds"
Replies: 140
Views: 13953

Re: Can't believe, Vanguard is leader of Heartbeat tradings?

Of course they are, as they use their ETF heartbeats to clear cap gains on their mutual funds as well. I don't know if this should be interpreted as a bad thing though. This is perfectly legal and the IRS is aware of it and chooses to not change anything to make it illegal. So why worry?
by pward
Thu Jun 06, 2019 2:15 pm
Forum: Investing - Theory, News & General
Topic: Bogle "5% Gold"
Replies: 248
Views: 39300

Re: Bogle "5% Gold"

willthrill81 wrote: Thu Jun 06, 2019 1:50 pm
pward wrote: Thu Jun 06, 2019 1:44 pm"Collectables" capitol gains can also be offset by any capitol loss, including one from stocks or bonds (and vice versa).
I don't believe so. Can you site IRS documents which indicate this?
Collectables are logged on Schedule D just like any other capital gain/loss. If you want to dig into the weeks to see for yourself, have it it. Though make sure you have a pillow handy as it might put you to sleep :D : https://www.irs.gov/publications/p550#e ... k100010742
by pward
Thu Jun 06, 2019 1:59 pm
Forum: Investing - Theory, News & General
Topic: Bogle "5% Gold"
Replies: 248
Views: 39300

Re: Bogle "5% Gold"

In that case, you would definitely want to hold it in a tax-advantaged account. I disagree. Gold throws off no yield or interest. You can choose to realize gains strategically whenever you want. So even if it is taxed at a capitol gains rate that is higher than stocks, the fact that you aren't getting forced yearly income is a strong case for holding taxable. Especially since you can offset that gain with stock or bond losses. Save the valuable tax advantaged space for bonds and stocks that distribute income, imo. Gold is subject to the collectibles tax, which differs from the capital gains tax. Yes, I was referring to that, but that doesn't mean it should be put in tax advantaged accounts. You cannot offset a collectibles gain with a capi...
by pward
Thu Jun 06, 2019 1:44 pm
Forum: Investing - Theory, News & General
Topic: Bogle "5% Gold"
Replies: 248
Views: 39300

Re: Bogle "5% Gold"

Addy wrote: Thu Jun 06, 2019 12:48 pm
pward wrote: Thu Jun 06, 2019 12:02 pm Yes, I was referring to that, but that doesn't mean it should be put in tax advantaged accounts.
But what about rebalancing? Wouldn't that trigger taxes at the "collectible tax rate" in a taxable account?
Of course. But gold doesn't throw off any dividend or yield so you can choose when to do this. "Collectables" capitol gains can also be offset by any capitol loss, including one from stocks or bonds (and vice versa). Because of this, holding gold in taxable has some strategic tax benefits. Stocks and bonds throw off dividends and yields, which are both yearly income. So these benefit more from tax sheltering, imo.
by pward
Thu Jun 06, 2019 12:02 pm
Forum: Investing - Theory, News & General
Topic: Bogle "5% Gold"
Replies: 248
Views: 39300

Re: Bogle "5% Gold"

According to this GLD is deemed a collectible by the IRS: https://www.etf.com/GLD In that case, you would definitely want to hold it in a tax-advantaged account. I disagree. Gold throws off no yield or interest. You can choose to realize gains strategically whenever you want. So even if it is taxed at a capitol gains rate that is higher than stocks, the fact that you aren't getting forced yearly income is a strong case for holding taxable. Especially since you can offset that gain with stock or bond losses. Save the valuable tax advantaged space for bonds and stocks that distribute income, imo. Gold is subject to the collectibles tax, which differs from the capital gains tax. Yes, I was referring to that, but that doesn't mean it should be...
by pward
Wed Jun 05, 2019 8:10 pm
Forum: Investing - Theory, News & General
Topic: Bogle "5% Gold"
Replies: 248
Views: 39300

Re: Bogle "5% Gold"

According to this GLD is deemed a collectible by the IRS: https://www.etf.com/GLD In that case, you would definitely want to hold it in a tax-advantaged account. I disagree. Gold throws off no yield or interest. You can choose to realize gains strategically whenever you want. So even if it is taxed at a capitol gains rate that is higher than stocks, the fact that you aren't getting forced yearly income is a strong case for holding taxable. Especially since you can offset that gain with stock or bond losses. Save the valuable tax advantaged space for bonds and stocks that distribute income, imo. As for GLD vs GLDM, GLD is a trading vehicle, GLDM is an investing vehicle. GLD's extra expense ratio is paying for its liquidity and razor thin sp...
by pward
Tue Jun 04, 2019 12:34 pm
Forum: Investing - Theory, News & General
Topic: Do Buy & Hold Index Investors "need" people to actively invest?
Replies: 26
Views: 7369

Re: Do Buy & Hold Index Investors "need" people to actively invest?

As has been mentioned, for price discovery people do need to be able to purchase individual stocks. However, the one thing I've been theorizing on is the effects of index funds on liquidity and how that effects the price fluctuations of individual stocks. Index buy and hold investing removes liquidity from the market. The shares in index funds just stay put, they are not contributing to the market price fluctuations (aside from share lending of course, but these are a minority of shares in an index fund). What this does though is almost provide the effect of reducing the float. There are less shares available for trading, so each individual stock trade has increased effect on price. The larger the market cap, the more index funds hold of th...
by pward
Mon Jun 03, 2019 3:04 pm
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

> It doesn't depend on personal goals. Leverage is mathematically inferior because it's a zero sum minus expenses game. It's the same problem Active management has. Sure, there will be SOME that will earn more returns than their costs of borrowing, but on average, they lose. Most of us bogleheads understand this concept and therefore would not say, "it depends". It's not an equal tradeoff, unless you have an insider institution so powerful with massive resources such as a Bridgewater that can overcome the typically high costs of leverage. So I personally couldn't recommend it for individuals. Someone else here does have a leveraged portfolio thread going so if you want to do that sort of thing anyway, have at it. > I didn't miss ...
by pward
Mon Jun 03, 2019 2:09 pm
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

> Unlevered risk parity is better than levered risk parity, actually, from a risk-adjusted return perspective because leverage adds costs. It depends on the persons goals. One can increase return over and above the added costs. Your inclusion of using EDV was also a great way to increase volatility on the bond side. Adding true leverage also does add volatility, and the added returns from leverage are greatly diminished and non-linear because of the added costs. But that doesn't mean there isn't an added after cost return if done smartly. But there are indeed tradeoffs. > Gold is barely more volatile than stocks, on average. Maybe as much as 20% more, but compared to the baseline volatility of stocks (meaning vs. bonds relatively speaking)...
by pward
Mon Jun 03, 2019 1:40 pm
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

Regarding the "All Seasons Portfolio" (the one Dalio gave to Robbins), I'm really looking forward to Ray Dalio's book "Economic and Investing Principles" which should be out within a year or so, and I'm hoping he either corrects the Robbins portfolio or sheds more light on why the Robbins portfolio differed somewhat from the one described in his "All Weather Story" that's available at Bridgewater. The "All Weather Story" discussed the use of TIPS, Emerging Market Bonds, and Treasury STRIPS, all of which were missing from the Robbins portfolio. A "breakaway" company from 2 previous Bridgewater employees (appianroad.com) started their own Risk Parity portfolio and theirs uses some 40%+ alloca...
by pward
Mon Jun 03, 2019 11:56 am
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

Regarding the "All Seasons Portfolio" (the one Dalio gave to Robbins), I'm really looking forward to Ray Dalio's book "Economic and Investing Principles" which should be out within a year or so, and I'm hoping he either corrects the Robbins portfolio or sheds more light on why the Robbins portfolio differed somewhat from the one described in his "All Weather Story" that's available at Bridgewater. The "All Weather Story" discussed the use of TIPS, Emerging Market Bonds, and Treasury STRIPS, all of which were missing from the Robbins portfolio. A "breakaway" company from 2 previous Bridgewater employees (appianroad.com) started their own Risk Parity portfolio and theirs uses some 40%+ alloca...
by pward
Mon Jun 03, 2019 11:40 am
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

Regarding the "All Seasons Portfolio" (the one Dalio gave to Robbins), I'm really looking forward to Ray Dalio's book "Economic and Investing Principles" which should be out within a year or so, and I'm hoping he either corrects the Robbins portfolio or sheds more light on why the Robbins portfolio differed somewhat from the one described in his "All Weather Story" that's available at Bridgewater. The "All Weather Story" discussed the use of TIPS, Emerging Market Bonds, and Treasury STRIPS, all of which were missing from the Robbins portfolio. A "breakaway" company from 2 previous Bridgewater employees (appianroad.com) started their own Risk Parity portfolio and theirs uses some 40%+ alloca...
by pward
Mon Jun 03, 2019 9:04 am
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

"Best" is something that is subjective. There is no way to objectify what portfolio mix is best for each individual. Personally, I'm a big fan of Browne; him and Dalio have probably been the two biggest influences in my personal investment career. As in all things, it's managing risk vs return. What matters most to me is a good return with a low maximum drawdown and quick time to recover. I am currently in a portfolio very similar to a golden butterfly. Portfolio Charts has the best tools to really dig deep into each of these portfolios. Take a look and see what fits you best. You're going to get nothing but subjective opinion here (including from me). Look at the data for each of these portfolios and draw your own conclusions. I...
by pward
Sun Jun 02, 2019 10:41 am
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

"Best" is something that is subjective. There is no way to objectify what portfolio mix is best for each individual. Personally, I'm a big fan of Browne; him and Dalio have probably been the two biggest influences in my personal investment career. As in all things, it's managing risk vs return. What matters most to me is a good return with a low maximum drawdown and quick time to recover. I am currently in a portfolio very similar to a golden butterfly. Portfolio Charts has the best tools to really dig deep into each of these portfolios. Take a look and see what fits you best. You're going to get nothing but subjective opinion here (including from me). Look at the data for each of these portfolios and draw your own conclusions. I...
by pward
Fri May 31, 2019 7:43 pm
Forum: Personal Investments
Topic: Safety of treasury bonds vs treasury money market
Replies: 42
Views: 6012

Re: Safety of treasury bonds vs treasury money market

I mean a fund always has some added counter party risk involved to owning bonds directly. I do not believe any new counter party is added when you buy a fund vs hold the bonds directly. In the unlikely event that a fund manager goes belly up, the fund's assets would still be safe. The fund itself bears no responsibility for the debts of the fund manager, and the fund's assets are exclusively for the benefit of the fund's investors. I did not say there was a high risk. But there is risk. Bond funds have went under before and people have lost because of it. Even look back at the "breaking the buck" debacle back in 2008. There is counter party risk in a few layers. You have the fund manager, and then you have whatever the holding co...
by pward
Fri May 31, 2019 11:08 am
Forum: Personal Investments
Topic: Safety of treasury bonds vs treasury money market
Replies: 42
Views: 6012

Re: Safety of treasury bonds vs treasury money market

I mean a fund always has some added counter party risk involved to owning bonds directly.
by pward
Thu May 30, 2019 11:09 am
Forum: Investing - Theory, News & General
Topic: Global Inflation - Targeted into Submission?
Replies: 22
Views: 2383

Re: Global Inflation - Targeted into Submission?

I don't believe there's much argument that the dominant population trends in the world now (and for decades to come) are falling fertility rates, slowing population growth and population aging. Some research suggests that population aging may be inflationary at some point, but this is a distinctly minority view from what I've seen. I personally believe there is correlation in the population of the workforce, not just the population as a whole. That's why I say I see some tailwinds coming over the next decade. Millennials are a very large group population wise, and they have been very slow to join the workforce. Over the next 10 years millennials will finish coming of age, fully join the workforce, and start earning, spending, and investing...
by pward
Thu May 30, 2019 9:04 am
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Also of note is that at lower or negative interest rates, the amount a bond will gain in a lowering of yields is not symmetric to the amount it will lose in an increase in yields; it returns substantially more in a lowering of rates than it would lose in a rising of rates. This depends on the type of bond. Conventional bonds have slightly positive convexity (that is, duration decreases when rates rise) and will gain more for a 1% drop than they will lose for a 1% increase. However, many bond funds have GNMAs or callable bonds, which have negative convexity. This is why the muni yield curve is positively sloped while the Treasury curve is flat. Most munis are callable, so long-term munis, with substantial negative convexity, have more inter...
by pward
Wed May 29, 2019 6:08 pm
Forum: Investing - Theory, News & General
Topic: Question regarding the phrase "smart money"
Replies: 23
Views: 2184

Re: Question regarding the phrase "smart money"

Generally, the media refers to professional fund managers as "smart money" and retail investors as "dumb money". Though one look at active management's track record would really make one question the term "smart".
by pward
Wed May 29, 2019 5:41 pm
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Sure stocks tend to go up over time (though they don't have to i.e. Japan). But stocks have no correlation to inflation. Matter of fact, in a period of high inflation stocks may (but not always) go up in nominal terms but tend to lose value in real inflation adjusted terms. High inflation historically has been bad for stocks in real terms. There is no correlation, and as such stocks should not be considered an inflation hedge. I’m not sure why you keep mentioning correlation, since that measure is at best tangential to the discussion. It’s not just an empirical observation that equities provide substantial protection to the investor from inflation (though there is plenty of data supporting this observation). There are fundamental economic ...
by pward
Wed May 29, 2019 5:30 pm
Forum: Investing - Theory, News & General
Topic: Global Inflation - Targeted into Submission?
Replies: 22
Views: 2383

Re: Global Inflation - Targeted into Submission?

What IS different this time, is that inflation is more of a global phenomenon today, and central banks in nearly every major economy around the world are now focused on maintaining inflation at an explicit targeted rate. This is new and different from any previous macroeconomic period. Not to say that we can't see high inflation at some point in the future — but it will be much more difficult, in my view, for inflation to run completely out of control like we saw in the 1970s. All it takes is a major war (cold or hot) and all bets are off. Not only is war inflationary in its own right, but the countries involved generally will run their monetary policy very easy to support the war efforts. What has been different is not the fact that natio...
by pward
Wed May 29, 2019 3:48 pm
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Eh, on the comment on stocks and inflation. Stocks have no correlation to inflation. While they have tended to outpace inflation on the longest timeframes, they have lost when accounting for inflation for over a decade in the past. Stocks do not innately have to outpace inflation. They just have tended to do so over an investment lifetime, but even in that long of a timeframe, there is no guarantee. I don’t think anyone is trying to guarantee anything, but it definitely is true that stocks (especially a globally diversified portfolio of stocks) have historically provided a strong shield against inflation. Over 10 years or more, the real return of stocks has almost always been positive. Not a hedge in the technical sense, but a strong buffe...
by pward
Wed May 29, 2019 3:29 pm
Forum: Investing - Theory, News & General
Topic: Global Inflation - Targeted into Submission?
Replies: 22
Views: 2383

Re: Global Inflation - Targeted into Submission?

It's cyclical. Look back over last last few hundred years and you will see that over time we tend to cycle between periods of disinflationary pressures and periods of inflationary pressures. Considering we had a large scale deflation 10 years ago, and globally there are still a lot of disinflationary pressures at work, this is not surprising. It's not permanent though. The pendulum will continue to swing. Don't give the Fed more credit than they deserve. The recent trend of people claiming that inflation is dead sounds an awful lot like "this time it's different" to me. We all know how that has always turned out in the past.
by pward
Wed May 29, 2019 3:26 pm
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Robert_007 wrote: What you recommend investing in long bonds assuming your young and have at least 80 percent in equities? Just curious, I’ve been inclined to favor total bond market since we don’t know the future. If you're 80+% in equities and you're sure can stay the course long bonds are a great choice. Their downside is increased volatility due to principal swings with changing rates/inflation but the increased diversification relative to equity makes up for that unless you're forced to sell them at the wrong time. TBM or a barbell are IMO also solid choices. TBM's broad and diversified exposure to the investment grade bond market provides a good tradeoff between risk and volatilitu/return in the bond market with its widely diversifie...
by pward
Wed May 29, 2019 9:01 am
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

fennewaldaj wrote: Wed May 29, 2019 1:03 am I think all of this talk and evidence about long bonds have finally convinced me to make my new treasuries long duration. Currently most of my treasuries are in a legacy TSP account in the G fund. I am not prepared to ditch the G fund atm but I will buy long term treasuries instead of the inter term for new money.
Yeah, I wish I hadn't rolled my TSP over back in the day. I didn't realize how good of a deal the G fund was at the time. I would do the same in your position. The G fund will act as a barbell tempering the average maturity down a bit. Nothing wrong with that.
by pward
Tue May 28, 2019 9:17 pm
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Garland whizzer, I’ve admired your thinking and perspective for a while now. I’m 34 and will be in the market for a long time obviously. What you recommend investing in long bonds assuming your young and have at least 80 percent in equities? Just curious, I’ve been inclined to favor total bond market since we don’t know the future. I'm not garland, but since you're 34 and I'm assuming a long way from retirement, and since you have a portfolio where 95% of the volatility comes from stocks, I personally would extend duration and go long. You're not making any bets on the future here, you're just choosing a more volatile bond to compliment a portfolio that is heavy on stock volatility. There's nothing wrong with TBM though, if you want to sti...
by pward
Tue May 28, 2019 5:54 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Home Country Bias Ubiquitous
Replies: 37
Views: 5514

Re: Larry Swedroe: Home Country Bias Ubiquitous

I think that for non-U.S. investors a case can be made to overweight their home country from world market weight. In general, we should be diversified, but we are also all inexorably tied to our local economies and currencies, and it makes no sense to go short our local economy and currency (an international allocation that is greater than local allocation is a short position against your local economy and currency behind the scenes). I think we all also have a vested interest in supporting our local businesses through investment. For U.S. investors this obviously doesn't apply, as global market cap is still long U.S. economy and currency. But we are the only country in that position. I still don't think people need to go to global market c...
by pward
Tue May 28, 2019 5:34 pm
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Long duration bonds are much more sensitive to interest rate changes in either direction than are shorter duration bonds. If interest rates fall long duration does very well indeed in returns and you have the added factor that long duration provides a better expected diversification benefit to stocks than does short duration. On the other hand if rates rise long bonds suffer more than short duration from substantial principal losses. Currently essentially no one expects rates to rise in the foreseeable future and these exceptions are fully priced into the very flat yield curve we now have. The difference in yields between a 30 yr. Treasury and a 1 month T bill is less than 0.4% at present. In short the difference in yield returns for these...
by pward
Tue May 28, 2019 11:28 am
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 76
Views: 11821

Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

We get a lot of discussion here about bonds in a low interest rate environment. A popular theme seems to be that "yields have nowhere to go but up" so bonds should be avoided or under-weighted. Tyler at PortfolioCharts just did a nice piece on explaining bond convexity. This shows that the longer dated the bond, and the lower the current yield, the more the bond will appreciate for each percent of interest rate drop. Also of note is that at lower or negative interest rates, the amount a bond will gain in a lowering of yields is not symmetric to the amount it will lose in an increase in yields; it returns substantially more in a lowering of rates than it would lose in a rising of rates. Some good food for thought showing that even ...
by pward
Tue May 28, 2019 11:19 am
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

I'm listening to a book on Audible titled "The Permanent Portfolio" by Harry Browne. In it, he goes through 11 hr of data and reasoning why a portfolio consisting of: 25% Total Market Index Fund 25% 25 - 30 yr US Treasury Bond Fund 25% Cash 25% Gold is the best portfolio mix compared to a 60/40 split of Stocks and Bonds. He gives compelling data and anecdotes. Any opinions on this? It reminds me a little of Ray Dalio's all season portfolio. What are you trying to achieve? It is impossible to determine whether an investment strategy and/or allocation is appropriate without a goal. That being said, given what people interested in this type of portfolio are typically seeking after, 25% exposure to stocks seems low to me unless you'r...
by pward
Tue May 28, 2019 11:12 am
Forum: Investing - Theory, News & General
Topic: 4 Seasons Portfolio
Replies: 37
Views: 6180

Re: 4 Seasons Portfolio

"Best" is something that is subjective. There is no way to objectify what portfolio mix is best for each individual. Personally, I'm a big fan of Browne; him and Dalio have probably been the two biggest influences in my personal investment career. As in all things, it's managing risk vs return. What matters most to me is a good return with a low maximum drawdown and quick time to recover. I am currently in a portfolio very similar to a golden butterfly. Portfolio Charts has the best tools to really dig deep into each of these portfolios. Take a look and see what fits you best. You're going to get nothing but subjective opinion here (including from me). Look at the data for each of these portfolios and draw your own conclusions. I'...
by pward
Mon May 27, 2019 3:48 pm
Forum: Investing - Theory, News & General
Topic: Any one ever use paid subscriptions from Seeking Alpha ?
Replies: 18
Views: 2695

Re: Any one ever use paid subscriptions from Seeking Alpha ?

To be fair here... SA is mostly a distribution channel for independent authors and analysts. Each of those authors is analyzing things a different way. It's better to have a news platform provide arguments from all sides so their readers can actually hear all the arguments and form an educated opinion, as opposed to putting forth all of their news skewed with a bias. Every day there are professional analysts and traders that are bullish and bearish on everything. That's what makes a market. Agreed, admittedly BH philosophy is limiting by not being aware of both sides, and not informed, but that being said at the end of the day one gets to the same place. If someone is going to buy and hold then these articles are of course nothing more tha...
by pward
Mon May 27, 2019 3:40 pm
Forum: Investing - Theory, News & General
Topic: Any one ever use paid subscriptions from Seeking Alpha ?
Replies: 18
Views: 2695

Re: Any one ever use paid subscriptions from Seeking Alpha ?

I don't mind if they are positive or negative on a specific company. But if they can't even be consistent with one stock how are they going to help me with investment decisions? To be fair here... SA is mostly a distribution channel for independent authors and analysts. Each of those authors is analyzing things a different way. It's better to have a news platform provide arguments from all sides so their readers can actually hear all the arguments and form an educated opinion, as opposed to putting forth all of their news skewed with a bias. Every day there are professional analysts and traders that are bullish and bearish on everything. That's what makes a market. They actually do have some good authors, at least in comparison to their co...
by pward
Sat May 25, 2019 4:33 pm
Forum: Personal Finance (Not Investing)
Topic: Job Offer Evaluation - FANG
Replies: 114
Views: 17418

Re: Job Offer Evaluation - FANG

Being someone working as an engineer at a FANG company I can tell you that your offer seems very fair, so I don't think there's much room for negotiations. The only thing that sticks out to me as unattractive is only 10 days of vacation (I get unlimited PTO and that's really nice...). I mean at the end of the day how much you enjoy the company and team is the biggest thing, but even if you wind up not enjoying your time at this company getting some time at a big name does open a lot of doors and looks really good on a resume going forward... Question re unlimited PTO -- How does that work in practice? I've read about situations where people end up taking LESS vacation because they don't feel like there is a safe floor of what to take witho...
by pward
Thu May 23, 2019 11:41 am
Forum: Investing - Theory, News & General
Topic: Age in Bond Vs Target date funds
Replies: 9
Views: 618

Re: Age in Bond Vs Target date funds

Phineas J. Whoopee wrote: Thu May 23, 2019 11:39 am
pward wrote: Thu May 23, 2019 11:32 am Target date funds are a bit too concentrated to stock volatility for my tastes and I am very skeptical that stocks can continue to go up at the rates they have since the early 80s (of which everyone is assuming will continue infinitely into the future). But everyone is different. Can you handle a gut wrenching stock drop without it negatively effecting your day to day life? How sure are you that stocks will continue to go up at their current historic rate? Those are the two questions you need to ask.
This poster does not speak for me.

PJW
"Everyone" was indeed a bit presumptuous on my part. But it is the common expectation put out in the industry at least that stocks will continue to return ~10% per year forever.
by pward
Thu May 23, 2019 11:32 am
Forum: Investing - Theory, News & General
Topic: Age in Bond Vs Target date funds
Replies: 9
Views: 618

Re: Age in Bond Vs Target date funds

Target date funds are a bit too concentrated to stock volatility for my tastes and I am very skeptical that stocks can continue to go up at the rates they have since the early 80s (of which everyone is assuming will continue infinitely into the future). But everyone is different. Can you handle a gut wrenching stock drop without it negatively effecting your day to day life? How sure are you that stocks will continue to go up at their current historic rate? Those are the two questions you need to ask.
by pward
Sat May 11, 2019 2:11 pm
Forum: Investing - Theory, News & General
Topic: Any conservative young investors?
Replies: 79
Views: 11174

Re: Any conservative young investors?

1) find ways to reduce expenditures to save more. 2) find ways to increase income to save more. Yes, but only up to a point. Some of us are natural savers. We need to remember that it's also important to live the present and enjoy opportunities that money provides. We have to balance accumulation-time spending with retirement-time spending. Yes, for someone that is already doing a lot of saving, I agree that I have found a need to balance and spend some money from time to time (matter of fact I'm about to spend a bunch upgrading my landscaping as my splurge of the year, haha). But, for a young person that is just starting out and wants to optimize their portfolio, maximizing saving the way to go. Once they get a few years of experience wit...
by pward
Sat May 11, 2019 9:25 am
Forum: Investing - Theory, News & General
Topic: Any conservative young investors?
Replies: 79
Views: 11174

Re: Any conservative young investors?

I've done the math and realized that savings rate is the most important variable by far. This. For a young person, AA matters so much less than savings rate. As indexers and bogleheads we all, by definition have a "conservative" investment strategy. Not a lot of bitcoin and options trading around here. Yeah, so many people put so much energy into mental gymnastics in trying to find the holy grail AA, when the solution to the problem is generally to find a way to save more. I've been very guilty of this as well, especially early on in my investing journey. Generally, the two best strategies I've found are: 1) find ways to reduce expenditures to save more. 2) find ways to increase income to save more. AA is a very distant 3rd to th...
by pward
Fri May 10, 2019 8:00 pm
Forum: Investing - Theory, News & General
Topic: Any conservative young investors?
Replies: 79
Views: 11174

Re: Any conservative young investors?

Yes. I'm in something very similar to a Golden Butterfly at 37 years old. I've done the math and realized that savings rate is the most important variable by far. 100% stock allocation on average would only get me to my goal a few short months earlier... and my portfolio is more consistent in the range of returns than 100% stocks, so stocks could actually take longer if luck is not on my side (which at this high of a CAPE 10 it probably would not be). Of note is that I'm also in hyper accumulations mode with a goal of FI within the next 10 years max. Since I'm saving over 50% of my income it also makes no sense to take undue risks. I prioritize consistent returns, low drawdowns, and low time to recover above absolute return. And even still,...
by pward
Wed May 08, 2019 11:39 am
Forum: Investing - Theory, News & General
Topic: point of maximal pessimism for international investing
Replies: 66
Views: 7214

Re: point of maximal pessimism for international investing

Just food for thought here, but is comparing PE, PB, (*insert whatever valuation metric here*), etc between countries apples to apples or apples to oranges? Are other countries cheaper in these metrics because they are undervalued, or because they deserve to be cheaper for one reason or another (risk, laws, local economics, potential growth, politics, etc)?
by pward
Tue May 07, 2019 4:23 pm
Forum: Investing - Theory, News & General
Topic: Is volatility good or bad?
Replies: 45
Views: 3377

Re: Is volatility good or bad?

Volatility is neither good nor bad without further context.
by pward
Fri May 03, 2019 3:37 pm
Forum: Investing - Theory, News & General
Topic: Reversion to the Mean Is Dead?
Replies: 63
Views: 8638

Re: Reversion to the Mean Is Dead?

Reminds me a lot of the "permanently high plateau" from right before the Great Depression started as well.
by pward
Fri May 03, 2019 12:11 pm
Forum: Personal Investments
Topic: Riskfree 3.00% Yield?!
Replies: 33
Views: 7170

Re: Riskfree 3.00% Yield?!

A muni, especially one for New York which is having a lot of financial difficulties at the moment, is hardly risk free...
by pward
Thu May 02, 2019 5:06 pm
Forum: Investing - Theory, News & General
Topic: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”
Replies: 34
Views: 3332

Re: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”

1) You're debating opinion vs fact. To be fully diversified one does need to have at least one asset that is in a bull market and at least one in a bear market at all times. This is fact. That's news to me... I believe you get facts from a place unknown to the rest of us This is really simple and obvious stuff. This doesn't take a genius to understand this. It only takes putting aside biases for a moment to look at things logically. If you have just stocks and bonds, in the 1970s when both were in a bear market, were you "fully diversified"? If you included hard assets, which were in a bull market at the time, would you not have been more diversified? In the 1980s-2000 when stocks and bonds were both in a bull market in unison, w...
by pward
Thu May 02, 2019 4:44 pm
Forum: Investing - Theory, News & General
Topic: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”
Replies: 34
Views: 3332

Re: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”

It's already been said, but a stock stock/bond only proponent (basically, the generic boglehead viewpoint) would have to disagree with this statement, since it is quite common for both asset classes to be positive at the same time. Again, as already said, only endowment type portfolios that add several alternative strategies are going to be almost guaranteed to have one part of the portfolio performing poorly at any given time. So it's a matter of opinion. Just because the "generic boglehead viewpoint" does not conform with this statement does not mean it is not true. Also, all one needs to do is add real assets to the stocks and bonds to achieve that goal. It does not require adding "several alternative strategies" or ...
by pward
Thu May 02, 2019 2:47 pm
Forum: Investing - Theory, News & General
Topic: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”
Replies: 34
Views: 3332

Re: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”

It's already been said, but a stock stock/bond only proponent (basically, the generic boglehead viewpoint) would have to disagree with this statement, since it is quite common for both asset classes to be positive at the same time. Again, as already said, only endowment type portfolios that add several alternative strategies are going to be almost guaranteed to have one part of the portfolio performing poorly at any given time. So it's a matter of opinion. Just because the "generic boglehead viewpoint" does not conform with this statement does not mean it is not true. Also, all one needs to do is add real assets to the stocks and bonds to achieve that goal. It does not require adding "several alternative strategies" or ...
by pward
Thu May 02, 2019 1:52 pm
Forum: Investing - Theory, News & General
Topic: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”
Replies: 34
Views: 3332

Re: “If Some Part Of Your Portfolio Isn’t Performing Poorly, You Are Not Properly Diversified”

Dottie57 wrote: Thu May 02, 2019 1:48 pm
pward wrote: Thu May 02, 2019 1:38 pm I think this is an absolute truth. The only way to be fully diversified is to have at least one asset class that will be in a bull market at all times.
What asset class was going up during the great recession? Maybe treasuries? Cash?

My bond funds and stocks funds were down. Real estate was down.
Long term treasuries were up by 23% and gold was up by 5% for the year in 2008 while stocks were -37%. Your bond funds had to be heavily weighted to corporate debt and/or mortgage backed securities to not be up in 2008. Any treasury bond shot way up in 2008, the longer term the more it returned.

FWIW I don't see corporate debt as a good diversifier because it is highly correlated to stocks.