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GammaPoint

For those waiting for a 'correction' ... Are you done waiting? Why or why not? Still waiting. Two things go into stock prices, the fundamentals and behavioral issues. It's hard to really gauge fundamentals (who knows what earnings are going to be going forward?), but I think behaviorally there are ...

GammaPoint

Nonetheless, I believe most investors (US) should have up to half their bond weighting in TIPS bonds. And that USians should generally buy the maximum number of ibonds they are allowed, every year (assuming other investing priorities are met). I personally own no Series I bonds. I'm not sure if tha...

GammaPoint

I think there are various good reasons why a US investor would be US-only for their investments (e.g., lower costs being reasonable). I personally do not find those reasons sufficient, and so I ideally hold closer to market weight (though I'm overweight international at the moment because I think th...

GammaPoint

I feel like one of the comforts often brandied about when markets are dropping is the assumption that things will recover because they think the problems are not so serious that capitalism as a system will fail. And if we assume that capitalism will not fail, then the logic goes that owning the comp...

GammaPoint

HEDGEFUNDIE wrote: ↑
Fri Oct 12, 2018 12:27 pm
So which of the commonly mentioned multi factor funds use the “bottoms up” approach?

I also got the impression that most multi-factor funds would do this, and it was in contrast to an investor holding separate holdings of value, momentum, quality, etc. factors.

GammaPoint

VTI around 100 would probably cause me to do something irregular, or maybe VXUS around 35. VWO at 32-34 or so would make me a little jittery to buy a lot more too. Today's drop was nothing though. I can easily remember, say, VTI up at 125 and buying it then thinking it was a little frothy. Until VTI...

GammaPoint

Then 10 year is up .01% today. It does seem odd to see such a big drop in the absence of anything else. Stock prices don't respond to only the days events. The events prior to today weigh on investor's minds and then they take action, sometimes after a delay and after having discussed the issue wit...

GammaPoint

Anyone know what could potentially be causing this drop? There does not appear to be any significant recent events that could cause investors to be concerned. Bond yields going up. Also, the stock prices went up for a long, long time in absence of any positive recent events to justify those moves. ...

GammaPoint

Euphoria before a crash is typically the thing you see, but that's because euphoria is associated with dangerous risk taking. However, because of the artificially low interest rates we've had the past decade, people have been forced to take dangerous risks to get a decent return. Howard Marks calls ...

GammaPoint

I expect to harvest the value premium when value index funds underperform the total market funds, so that I can buy more of the value index fund shares, then wait until they catch up and outperform the total market funds, then rebalance a bit out of the value index funds. Rinse and repeat ad nausea...

GammaPoint

I think there are no premiums for folks who buy once and hold forever or hold for 20 years. I know you've mentioned this elsewhere before, but I've forgotten. How do you expect to harvest the value premium that you have in your portfolio (IIRC, you do have at least SV in your portfolio)? Or do you ...

GammaPoint

I think his signature says it all: "The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity." To describe education and learning as a path on which you've already reached the final destination is not a viewpoint I ever try ...

GammaPoint

Unless I've been grossly misled, the breaking down of equity returns into exposures to various factors is a real phenomenon. Those factors may have a risk explanation, a behavioral explanation, or both. They may persist in the future or they may not. For me, I'm willing to believe they are real enou...

GammaPoint

Should we really just hold our noses and wait? This is a highly personal question. It depends on your risk tolerance, your willingness to accept tracking error, your judgement, and a host of other personal financial and psychological factors. The average investor, in past historical situations, was...

GammaPoint

This is incorrect: "Factors Persist In Emerging Markets" This is correct: "Factors Have Persisted In Emerging Markets" This seems excessively pedantic, as the authors are clearly talking about what has happened up to now, and the title can be interpreted that way. We can only measure what has happe...

GammaPoint

I'm glad to see this work. I assumed that the factors would persist in EM, but glad to see that research in that space continues to back this up. As for expenses, I've also been a little more lenient on ERs if I can get factor exposure for a good price. This was part of my decision for picking up so...

GammaPoint

I've always used Spigen Tough Armor and they have worked well. Can't say the other brands aren't better though.

GammaPoint

Rob, there was some discussion on this in another thread you might find interesting:

viewtopic.php?t=256790

GammaPoint

Historically I haven't had any allocation to the momentum factor, though I am considering a small portion of my US equity exposure (~5%) to be put into Vanguard's new multi-factor ETF VFMF, which targets the factors of value, quality, and momentum. I already have lots of value exposure elsewhere in ...

GammaPoint

I overweight emerging markets because they are less correlated with the rest of my portfolio. They happen to be riskier as well, which increases my portfolio risk for a given stock allocation, but I can set my stock allocation freely to get a desired risk level. I would split my foreign stock 50/50...

GammaPoint

I have some tilt to small cap, both domestically and internationally (VB and VSS, as well as VBR). I have overweighted small cap, value, and emerging markets for years. Grabiner, how much do you overweight EM and with what justification? I overweight EM too actually but was curious about your % and ...

GammaPoint

If the 8 isn't going to get a free storage upgrade anytime soon, then I figure I might as well upgrade now. My 5c is pretty much on its death bed.

GammaPoint

I am very curious about the reason to be bullish about EM economies. I lived 25 years in an EM country and I visited a lot more. In my opinion is absolutely no reason to be bullish about them, at least not in my time horizon of several decades. The only reason I own some is speculative and hedging ...

GammaPoint

So why not decide on 60% and move it all now? Well, long-term I'd probably like something like 40-50% international. Being based in the US, I'm okay with a little home country bias (both for relative wealth concerns, but mostly for the fact that it's cheaper for me to invest here and a lot cheaper ...

GammaPoint

I have invested similar to you, but think EM in particular may be in for a bumpy ride. And if EM currencies go into distress, I think the IMF has revised it's opinion on currency controls and may not strive to protect investors as it had done in the past. I see nothing wrong with being 100% US whic...

GammaPoint

Sorry, I got that backwards :oops: When I had an Android phone, that's how it worked and everything was seamless. Both cell phone number and GV number worked through the same app. With iOS, I had to adjust. What I did works for me but I don't recommend it. That is, my cell phone number used to forw...

GammaPoint

But I'm curious if the 1.5 non-turbo engine is effected as well? At first I read that the non-Turbo wasn't affected, but then more recently I've seen people saying it is affected but just to a lesser degree. Though I'm not an expert in it since am like you and almost bought a CRV and don't actually...

GammaPoint

Or, you are just pure market timing and hope to be lucky. You just buy whatever you think is cheap without thinking about whether it is above your ratio. I'm not dictating a general strategy here, so it shouldn't be approached that way. What do you think the default expectation is for US vs ex-US p...

GammaPoint

The point isn't if your AA is reasonable, that's up to you to decide. The issue is you aren't willing to follow an IPS. That might work out fine, or it might not. What will you do if a bear comes along and starts attacking your portfolio? Wing it? Or follow your IPS? You're not wrong. It'll either ...

GammaPoint

But when your savings are higher, to stick to your AA, you might only put $X into the most underperforming asset (like international) to bring it up to the proper AA amount, but then you have more savings left over, which "should" then be spread among other assets too (including even the over-perfo...

GammaPoint

This is different than a value tilt. You are not tilting towards what is classified as "value" equities. You are tilting to what you have a hunch is a good value. https://www.investopedia.com/terms/v/valuestock.asp Unless there is good reason to treat international as a "value" equity, which I have...

GammaPoint

My other comment is you should know why you want international -other than Speculating the stocks ate cheap or cheaper than X. My reasons for holding 30% international are two fold: 1) More diversity, 2) potentially less correlated with U.S. stocks. My reasons for holding international are the same...

GammaPoint

Frankly I’m confused. Why is your AA drifting so much? You clearly understand things well enough to adjust your contribution breakdown to stay within say a 5% band. Maybe I didn't explain it well. I could certainly rebalance or alter purchase decisions to get back within my AA. But my savings rate ...

GammaPoint

You are market timing. It may or may not work. Nobody knows (nothing). I respect you calling it "market timing", and to some degree I agree it is. That said, I think it's also a little extreme of a characterization. I just wanted to be making portfolio purchases that weren't so strongly skewed by t...

GammaPoint

For over 10 years, I had implemented the same asset allocation that I originally set off with years ago. I'd do periodic rebalancing, and I'd commit new purchases to the assets which were under-weighted. Setting an AA and sticking with it is a great way to buy low/sell high, as well as control risk....

GammaPoint

The 5c does support wifi calling. https://support.apple.com/en-us/HT203032 And even if your carrier doesn't support it. You can get a Google Voice number for free and forward your calls so you still use your cell number and have wifi calling. Sure, I was a little loose in what I wrote. The 5c does ...

GammaPoint

As has been noted many times on this forum before, Vanguard is also losing the fee battle in the solo 401k space, since they've long prevented individuals from holding admiral or ETFs there. This has caused lots of solo 401ks to go to Fidelity instead. I'm likely to move my wife's solo 401k to Fidel...

GammaPoint

I've currently got an iPhone 5c, which unfortunately does not support wifi-calling, and I just moved to a new house with very poor cellular reception where that feature would be super, super useful. So I've used this situation as the motivation to finally upgrade my phone. I'll probably wait until t...

GammaPoint

Please take my advice and don't buy a CRV unless you like Lemonade. I stumbled upon this thread a few weeks ago, and have been watching it since. My wife and I were extremely close to buying a 2018 CRV, but now we're probably going to hold off and instead take a look at the 2019 Toyota RAV4s. I'm s...

GammaPoint

First off, thanks for such a detailed reply, Spirit Rider. It brought a lot of clarity to this issue for me. Actually, line 2 of this worksheet is not necessarily in error, just using a short cut. The SE tax calculation multiplies the business profit * 92.35% * 15.3% <= the SS max wage base (2018 = ...

GammaPoint

Article: https://thefinancebuff.com/solo-401k-for-part-time-self-employment.html Spreadsheet (make sure to scroll up to see the entire spreadsheet - its opens towards the bottom for some reason) https://docs.zoho.com/sheet/published.do?rid=hd3vb2c79aa2e630443d58a05e8140934898a I appreciate the link...

GammaPoint

It's a sole proprietorship set up at Vanguard. Her business income will probably be in the $13000-$15000 range for the 2018 year.

GammaPoint

This year my wife set up a new business and we set her up with an individual 401k plan with Vanguard. She's already made about $9k in deductible 401k contributions to a previous W2 job that she no longer has, so we can (business-income permitting) contribute another $9.5k in her individual 401k plus...

GammaPoint

Larry, thanks for the reply. It's always fun and an honor to receive commentary direct from an author that I'm reading. So if you look only at P/B then DFSVX might look more valuey because that is only metric it is using. But then look at other metrics and you see BOSVX looks more valuey. Appreciate...

GammaPoint

If the R^2 is low, then the value loading produced by the model has large error bars. Or similarly, the less accurate the FF formula will be in predicting the returns of the fund, i.e. the predicted fund return will have large error bars. Right, I was aware of this, which is why I was saying "if it...

GammaPoint

Vanguard US Value Factor ETF VFVA is long only and has a value loading of .78. Thanks for looking this up. I was interested in this but didn't realize I could set it to use daily returns instead of monthly (not enough months to compute it by months since it's a new fund). The R^2 of that fit isn't ...

GammaPoint

Realize that factors are defined as long short portfolios. This isolates the factor from market factor. Long only funds at maximum by definition can only have a loading of 0.5. Dave, thanks for the reminder. I remember Swedroe talking about this but not being clear on how to think of it in a long-o...

GammaPoint

The product of those two numbers (eg premium times loading) gives the excess return attributable to each factor in the regression. So it seems like my reading of the equation is correct, then? If so, that would have been a good point for Swedroe to make in his book (that typical products don't achi...

GammaPoint

1. I need to see the regression equation to answer your question about expected return. Thanks for the reply, acegolfer. See the screenshot of the equation and definitions: https://ibb.co/nDQ90z . The problem is that Swedroe doesn't use equations in his book. If Swedroe's "value premium" is equal t...

GammaPoint

I'm currently reading Swedroe's book on factor investing. I've had substantial value/size tilts in my portfolio (at least domestic) for over 10 years, but I'm enjoying reading about other factors (quality,momentum) that I hadn't previously had much experience with. However, I have a question about h...

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