Search found 265 matches

by alluringreality
Thu Aug 06, 2020 10:38 am
Forum: Investing - Theory, News & General
Topic: Definition of "Diversifying Assets"?
Replies: 16
Views: 1021

Re: Definition of "Diversifying Assets"?

BJJ_GUY wrote:
Thu Aug 06, 2020 9:41 am
Either way, I'd be very interested to see what an update would include.
I'd get a copy to see what changed, although his portfolio suggestions were rather similar four years later in 2009.
https://yalealumnimagazine.com/articles ... ng-soundly
by alluringreality
Thu Aug 06, 2020 7:11 am
Forum: Investing - Theory, News & General
Topic: Definition of "Diversifying Assets"?
Replies: 16
Views: 1021

Re: Definition of "Diversifying Assets"?

BJJ, very helpful comments. Especially The answer will differ depending on which version of the book you are referencing. There was a book that was written for the retail investor that varies quite a bit from the original book (and an updated version released later) focused on the endowment managem...
by alluringreality
Tue Aug 04, 2020 8:15 am
Forum: Investing - Theory, News & General
Topic: Sunday NYT article Mutual Fund Winners Don't Stay Ahead for Long
Replies: 14
Views: 1957

Re: Sunday NYT article Mutual Fund Winners Don't Stay Ahead for Long

Please show me where in the MTUM fund documentation it says that it tracks “Growth” of any kind. Your initial thread reply was about past performance. The 5 year Factor Profile from the link below, and the Historical Stock Style, suggests that Morningstar has generally classified this fund as large...
by alluringreality
Mon Aug 03, 2020 1:13 pm
Forum: Investing - Theory, News & General
Topic: Sunday NYT article Mutual Fund Winners Don't Stay Ahead for Long
Replies: 14
Views: 1957

Re: Sunday NYT article Mutual Fund Winners Don't Stay Ahead for Long

When you are assessing the performance of a factor you assess it against market beta. That is the whole point of the factor, that it produces risk adjusted returns in excess of market beta. This assertion is entirely debatable. What I want to view is what happens when trends change. The history for...
by alluringreality
Mon Aug 03, 2020 12:46 pm
Forum: Investing - Theory, News & General
Topic: Sunday NYT article Mutual Fund Winners Don't Stay Ahead for Long
Replies: 14
Views: 1957

Re: Sunday NYT article Mutual Fund Winners Don't Stay Ahead for Long

As an intellectual phenomenon, momentum--and mean reversion, and the Fama-French factor may well exist, but it doesn't necessarily mean you can profit by exploiting them. 7 years of MTUM seems to suggest otherwise. https://www.portfoliovisualizer.com/fund-performance?s=y&symbol=MTUM&benchmark=VOO e...
by alluringreality
Sat Aug 01, 2020 11:39 am
Forum: Investing - Theory, News & General
Topic: Diversification Regret Index
Replies: 190
Views: 24121

Re: Diversification Regret Index

What a difference a few months makes. Many backtests are somewhat sensitive to start date. I'm not sure how to determine if the future is necessarily going to be an upwards or downwards trend. My guesses are sometimes right and sometimes wrong. I'm wrong enough that I figure it's probably best if I...
by alluringreality
Sat Aug 01, 2020 10:02 am
Forum: Investing - Theory, News & General
Topic: Diversification Regret Index
Replies: 190
Views: 24121

Re: Diversification Regret Index

Vineviz you should run the chart against QQQ, I have a lot of regret about not concentrating in that :oops: As noted in the first post, it's possible to adjust for personal preferences. QQQ started just before the 2000 crash, so the information isn't pretty. Compared to Total Market $100 comparativ...
by alluringreality
Fri Jul 31, 2020 10:29 am
Forum: Investing - Theory, News & General
Topic: Great Depression 2.0
Replies: 21
Views: 1751

Re: Great Depression 2.0

Anyone concerned with the biggest drop in GDP? The VIX remains elevated compared to averages from recent years, so yes I presume people remain concerned with how the current situation could play out. Will asset prices continue to climb or another drop? We don’t truly know what the future brings Agr...
by alluringreality
Thu Jul 30, 2020 4:27 pm
Forum: Investing - Theory, News & General
Topic: "Beware the Hype on Gold"
Replies: 170
Views: 12352

Re: "Beware the Hype on Gold"

Have to click the link button then copy the link. Gold: check the adjust for inflation under the chart "inflation adjusted" https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeY...
by alluringreality
Thu Jul 30, 2020 3:48 pm
Forum: Investing - Theory, News & General
Topic: "Beware the Hype on Gold"
Replies: 170
Views: 12352

Re: "Beware the Hype on Gold"

Isn't the whole point of gold that it keeps up with inflation? Wouldn't adjusting it's price for inflation defeat the purpose? I'm not sure if this is intended for a laugh. Portfoliovisualizer shows gold having an 18 year and 11 month drawdown of over 61% nominal. Their information shows it being u...
by alluringreality
Wed Jul 29, 2020 12:12 pm
Forum: Investing - Theory, News & General
Topic: What is your overall portfolio weighted expense ratio
Replies: 289
Views: 32917

Re: What is your overall portfolio weighted expense ratio

I prefer keeping as much as possible in tax advantaged accounts, so our 0.15% 401k administration fee is my primary expense.
by alluringreality
Wed Jul 29, 2020 7:35 am
Forum: Investing - Theory, News & General
Topic: How did you determine risk tolerance?
Replies: 106
Views: 5940

Re: How did you determine risk tolerance?

if you google "Lump sum versus DCA" you will find various studies by various institutions (including Vanguard) have shown that you are better off lump sum investing versus holding and DCA'ing. Everyone does not necessarily need to determine how to proceed based entirely on average performance. Sinc...
by alluringreality
Tue Jul 28, 2020 1:54 pm
Forum: Investing - Theory, News & General
Topic: SP500 is top heavy - Alternatives to cap weighted - equal weighted or Mid cap fund?
Replies: 56
Views: 5376

Re: SP500 is top heavy - Alternatives to cap weighted - equal weighted or Mid cap fund?

These supposedly "equal weight" aren't equal weighted at all . They put a weight of about 0.2% on each of about 500 stocks, and a weight of zero on about 3,000. What is the logical argument for owning equal amounts of Microsoft, market cap $1.5 trillion, and Advance Auto Parts, AAP, $10.18 billion-...
by alluringreality
Sun Jul 26, 2020 11:54 am
Forum: Investing - Theory, News & General
Topic: SP500 is top heavy - Alternatives to cap weighted - equal weighted or Mid cap fund?
Replies: 56
Views: 5376

Re: SP500 is top heavy - Alternatives to cap weighted - equal weighted or Mid cap fund?

But when the future losers move down, new winners move up, no? That is a genuine question, not a response to your statement. I'm trying to understand this. Absolutely, when one company falls it will be replaced in the top 10. When you hold market weight you also own the future winners. Owning the f...
by alluringreality
Sun Jul 26, 2020 11:00 am
Forum: Investing - Theory, News & General
Topic: Theoretical Problem With Debt
Replies: 49
Views: 4147

Re: Theoretical Problem With Debt

If I can borrow at 1-3% nominal, and I can avoid margin calls, I come out ahead as long the stock market exceeds 1-3% nominal. There’s no reason to pay off a home early at today’s interest rates. This is close enough to my thinking. I'm just using a house that I considered as possibly having more f...
by alluringreality
Sun Jul 26, 2020 8:23 am
Forum: Investing - Theory, News & General
Topic: SP500 is top heavy - Alternatives to cap weighted - equal weighted or Mid cap fund?
Replies: 56
Views: 5376

Re: SP500 is top heavy - Alternatives to cap weighted - equal weighted or Mid cap fund?

I've read multiple times (although I can't find source materials this morning) that pretty consistently over the history of the stock market, about 4% of stocks have made up about 95% of the market's gains. If that is in fact the case, does one need to worry about the S&P 500 being top-heavy? I do ...
by alluringreality
Sat Jul 25, 2020 3:46 pm
Forum: Investing - Theory, News & General
Topic: Theoretical Problem With Debt
Replies: 49
Views: 4147

Re: Theoretical Problem With Debt

Your main concern about paying down the mortgage instead of investing in bonds in a taxable account seems to be the need for an emergency fund, which is a liquidity issue. I have included satisfying liquidity needs each time I have listed the financial milestones that might need to be met before pa...
by alluringreality
Sat Jul 25, 2020 10:15 am
Forum: Investing - Theory, News & General
Topic: Theoretical Problem With Debt
Replies: 49
Views: 4147

Re: Theoretical Problem With Debt

I agree with the premise (debt is not efficient) but not the conclusions (we should therefore avoid debt). This reply covers my thoughts far better than I've stated them myself. At this point, though, your argument is condensed to its most concentrated form: use debt only up to the point where the ...
by alluringreality
Fri Jul 24, 2020 6:54 pm
Forum: Investing - Theory, News & General
Topic: Theoretical Problem With Debt
Replies: 49
Views: 4147

Re: Theoretical Problem With Debt

Once a person has a house with a mortgage, has satisfied all liquidity concerns, has taken advantage of any special tax rules like saving in a retirement account, and then has additional capital, the only question is the cost of the debt and the characteristics of other financial assets. The idea o...
by alluringreality
Fri Jul 24, 2020 2:26 pm
Forum: Investing - Theory, News & General
Topic: Theoretical Problem With Debt
Replies: 49
Views: 4147

Re: Theoretical Problem With Debt

Here's an example to show what I'm talking about in the numbers. Let's keep 0% RFR and 5% ERP. I take on debt for 3%. That would be considered a low rate for many kinds of consumer debt, but higher than those better avenues like futures and IBKR margin. If I take $100 from my equity and $100 from m...
by alluringreality
Fri Jul 24, 2020 8:52 am
Forum: Investing - Theory, News & General
Topic: Theoretical Problem With Debt
Replies: 49
Views: 4147

Re: Theoretical Problem With Debt

why should you be somebody else's risk premium on a mortgage at 3% when you're holding bonds that pay less? The equity risk premium doesn't compensate you for risk over your mortgage rate, it compensates you for risk over the risk free rate around zero. There is not enough risk premium for both you...
by alluringreality
Thu Jul 23, 2020 10:13 am
Forum: Investing - Theory, News & General
Topic: Purchasing an ETF Via Robinhood Vs Brokerage
Replies: 10
Views: 728

Re: Purchasing an ETF Via Robinhood Vs Brokerage

I'm a Vanguard mutual fund customer, so I'm not well informed on differences between brokers for ETF transactions. My impression is that topics like selling order flow and price improvement might be relevant to your questions. I know that some Vanguard mutual funds can be converted to ETFs at NAV to...
by alluringreality
Thu Jul 23, 2020 7:25 am
Forum: Investing - Theory, News & General
Topic: Article claiming 401k no longer "makes sense"
Replies: 74
Views: 7625

Re: 401k vs Tax Efficient Taxable - Article linked

Your fees are relatively low, much lower than the 1.5% fees the article claims are "typical" for 401k's. Stay the course. Yeah, I'm not sure why people would be paying 1.5% in 2020. While the 0.15% administration fee makes my 401k the most expensive account I use, the 3% employer contribution makes...
by alluringreality
Wed Jul 22, 2020 12:42 pm
Forum: Investing - Theory, News & General
Topic: The Remarkable Accuracy of CAPE As A Predictor Of Returns
Replies: 73
Views: 3920

Re: The Remarkable Accuracy of CAPE As A Predictor Of Returns

So the currency risk can't go the other way? The dollar can decline relative to other currencies, and this sort of action might be one reason to consider investing in unhedged international stock. It's an odd view you have, considering the historical data shows the dollar has never appreciated more...
by alluringreality
Wed Jul 22, 2020 10:59 am
Forum: Investing - Theory, News & General
Topic: The Remarkable Accuracy of CAPE As A Predictor Of Returns
Replies: 73
Views: 3920

Re: The Remarkable Accuracy of CAPE As A Predictor Of Returns

the Vulcan can do better by responding to what markets are willing to pay for risk. Building valuation-based portfolios is hard because portfolio managers and individual investors aren’t Vulcans. They don’t want to take more risk after markets fall. They don’t want to reduce risk when markets rise....
by alluringreality
Wed Jul 22, 2020 8:15 am
Forum: Investing - Theory, News & General
Topic: [Average return for 100/0, 70/30 asset allocation]
Replies: 345
Views: 17486

Re: [Average return for 100/0, 70/30 asset allocation]

100% stocks are great if you never have any periods of unemployment or large expenses, but who can predict that? May be ok if you are doctor or medical professional I agree that some of the ideas from this forum simply don't apply to me. I had something over 90% of my assets in stocks during the 20...
by alluringreality
Mon Jul 20, 2020 7:25 am
Forum: Investing - Theory, News & General
Topic: Biggest regrets and advice for newbies.
Replies: 30
Views: 3673

Re: Biggest regrets and advice for newbies.

Biggest regret: I sold out of stocks after the 2000 crash once my account exceeded the previous high, and I didn't get back in until after the 2008 crash. I had too much of my personal finances in stocks at that time to feel fine with a significant downturn. I was bearing too much risk for my perso...
by alluringreality
Sat Jul 18, 2020 2:43 pm
Forum: Investing - Theory, News & General
Topic: Smarter approach to "emergency funds"?
Replies: 142
Views: 15259

Re: Smarter approach to "emergency funds"?

This idea would mean to me that short term TIPS would be an ideal emergency fund vehicle. They offer safety and protection for inflation and deflation. If you're thinking about holding TIPS in taxable and are interested in deflation considerations, I Bonds might be worth looking at for some people....
by alluringreality
Sat Jul 18, 2020 12:04 pm
Forum: Investing - Theory, News & General
Topic: Count Cash as Fixed Income?
Replies: 80
Views: 3317

Re: Count Cash as Fixed Income?

Do you accept the basic statement of CASH increases in value in the case of deflation? Yes or no? If the answer is yes, then, CASH hedges against deflation is a correct statement. If you don't consider cash and cash-like assets similar, then no I do not agree that cash necessarily increases in valu...
by alluringreality
Sat Jul 18, 2020 11:36 am
Forum: Investing - Theory, News & General
Topic: Count Cash as Fixed Income?
Replies: 80
Views: 3317

Re: Count Cash as Fixed Income?

Here we go again. You assume that you know something. I assume that I know nothing. I do not adopt any investment strategy based on my ability to know and forecast the future. This is the philosophical difference. I currently have cash-like assets that I'm moving equally into I Bonds and EE Bonds, ...
by alluringreality
Sat Jul 18, 2020 10:53 am
Forum: Investing - Theory, News & General
Topic: Count Cash as Fixed Income?
Replies: 80
Views: 3317

Re: Count Cash as Fixed Income?

And, how do you know that it will not work much better in the next deflationary period? Why would it work better in the next deflationary period? When have cash-like products outperformed US government bonds during deflation historically? Personally I don't remember a time example when T-Bills outp...
by alluringreality
Sat Jul 18, 2020 10:32 am
Forum: Investing - Theory, News & General
Topic: Count Cash as Fixed Income?
Replies: 80
Views: 3317

Re: Count Cash as Fixed Income?

If we have deflation, CASH will increase in value. The BLS site isn't currently working, but it looks like March and April 2020 may have been one of the the bigger deflationary periods since 2014. I'm suggesting that cash-like products don't seem to have increased in value much or hedged for deflat...
by alluringreality
Sat Jul 18, 2020 9:54 am
Forum: Investing - Theory, News & General
Topic: Count Cash as Fixed Income?
Replies: 80
Views: 3317

Re: Count Cash as Fixed Income?

CASH is a separate asset class. It hedges against deflation. While I'm aware there are different thoughts surrounding the role of cash, for example the following Permanent Portfolio summary link lists cash as useful for a recession, personally I don't consider cash-like assets very beneficial to ho...
by alluringreality
Thu Jul 16, 2020 3:48 pm
Forum: Investing - Theory, News & General
Topic: Should everyone have TIPS?
Replies: 82
Views: 4890

Re: Should everyone have TIPS?

But do stocks have a strong link to inflation? I have read conflicting research on this. I get the impression that there may have been times when large cap US stock might not have done very well in relation to inflation, at least Global Asset Allocation gives that impression for the 1973-1981 value...
by alluringreality
Wed Jul 15, 2020 10:22 am
Forum: Investing - Theory, News & General
Topic: What is your Morningstar Style Box?
Replies: 12
Views: 565

Re: What is your Morningstar Style Box?

I don't follow the reasoning for necessarily wanting to have more than 20% of my US stocks in the 10 largest holdings, or having over 10% in the 10 largest international holdings. Since I hopefully have a long timeline, I've roughly doubled my mid and small cap amounts based on the following to slig...
by alluringreality
Fri Jul 03, 2020 3:34 pm
Forum: Investing - Theory, News & General
Topic: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?
Replies: 358
Views: 19259

Re: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?

A shorter less obnoxious version of this post would cut out the comments about retail investors and simply state that past performance is not a guarantee of future results. I'll take this to mean that we agree parts of this thread read like potential performance chasing. I'm also a retail investor ...
by alluringreality
Fri Jul 03, 2020 3:12 pm
Forum: Investing - Theory, News & General
Topic: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?
Replies: 358
Views: 19259

Re: Will ex-US ever revert to good performance? Or is it just a high-risk, low-reward investment?

This discussion board is made up of retail investors. Literature generally suggests many retail investors are likely prone to potentially detrimental performance chasing. Aside from suggesting that investment risk may not result in realized returns, and generally supporting performance chasing, how ...
by alluringreality
Thu Jul 02, 2020 10:29 am
Forum: Investing - Theory, News & General
Topic: TIPS and I Bonds
Replies: 16
Views: 1556

Re: TIPS and I Bonds

It's possible that the next 6 months could wind up with a 0% inflation rate for I Bonds. It's difficult to guess at this point. It has happened a couple times in the past. I figure if the inflation rate goes to zero that could potentially lessen the early withdrawal penalty having the last three mon...
by alluringreality
Wed Jul 01, 2020 5:30 pm
Forum: Investing - Theory, News & General
Topic: TIPS and I Bonds
Replies: 16
Views: 1556

Re: TIPS and I Bonds

I bought I Bonds this year and last year before the latest rate drop. Looking at next year, it's possible I might buy I Bonds at current rates. The main selling point would be if 0% real, less taxes, might end up earning more than say online savings accounts or CDs over time. That would essentially ...
by alluringreality
Tue Jun 30, 2020 9:27 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Under what circumstances would you dollar cost average a lump sum into your asset allocation? Generally I prefer tax advantaged accounts, and the only option available for attempting to move taxable assets into my 401k is through DCA, similar to the first link below. Yesterday I had the audio for U...
by alluringreality
Mon Jun 29, 2020 11:24 am
Forum: Investing - Theory, News & General
Topic: lump sum investing vs dollar cost averaging in the present market
Replies: 66
Views: 3217

Re: lump sum investing vs dollar cost averaging in the present market

What are your thoughts on this, and over how long a time frame do you think it is reasonable to DCA? I generally look at dollar cost averaging and lump-sum from a behavioral or practical perspective, and I tend to question if some "rational" perspectives might also include irrational aspects (overc...
by alluringreality
Sat Jun 20, 2020 12:23 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Dollar cost averaging: Disagreement with basic premise
Replies: 64
Views: 3177

Re: Wiki - Dollar cost averaging: Disagreement with basic premise

The only item I noticed in reading the Wiki was maybe editing the following. I'll guess removing "will" or changing "carries" to "carry" might have been the original intent. "Lump sum investing will always carries a higher expected return" Thanks! I interpret your post as a grammar fix without a ch...
by alluringreality
Sat Jun 20, 2020 11:52 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

The point of the thought experiment was to showcase the illogical strategy of how people implement it. Like if you were previously fully invested on Feb 20 or not fully invested on feb 20, you could avoid some of the variance of the covid scare by dca in identical ways. Person A with cash is told t...
by alluringreality
Sat Jun 20, 2020 10:33 am
Forum: Investing - Theory, News & General
Topic: Wiki - Dollar cost averaging: Disagreement with basic premise
Replies: 64
Views: 3177

Re: Wiki - Dollar cost averaging: Disagreement with basic premise

The only item I noticed in reading the Wiki was maybe editing the following. I'll guess removing "will" or changing "carries" to "carry" might have been the original intent.

"Lump sum investing will always carries a higher expected return"
by alluringreality
Sat Jun 20, 2020 8:51 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

If you had a 100k portfolio of vtsax and inherited 200k cash or 200k vtsax, your decision going forward should be the same. The most concise way I can state my view is that making this statement and then drawing wider conclusions can potentially be a slippery slope for some real-world buy and hold ...
by alluringreality
Fri Jun 19, 2020 10:13 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

I've never had a life changing windfall, but by definition, it is probably unexpected. It is also life changing. DCA'ing it in over a year gives you time to think about what you want to do with it and your life goals. All I'm saying is that we shouldn't cast stones at it. Absolutely. I get why one ...
by alluringreality
Thu Jun 18, 2020 10:45 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

it's an issue of relatively little importance. The impact of DCA vs Lump sum in the average case is 12.3% at the end of a 12 month DCA period. I figure my savings rate matters more than if I lump-sum or DCA, including contributing to a 401k. The typically referenced article from Vanguard and the it...
by alluringreality
Thu Jun 18, 2020 7:29 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

So yes, irrationality is to be frowned upon but what should be even more frowned upon is acceptance of irrationality as inevitable and humans as unteachable. I give humans more credit than that or at least believe each individual should be given the benefit of the doubt. I think it is unethical to ...
by alluringreality
Wed Jun 17, 2020 2:28 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

"The argument is that DCA makes the logical error of treating new money differently from old money, or, equivalently, that's ok to be fully invested with asset allocation X after some arbitrary time period after receiving a windfall, but not immediately after receiving it. Why?" There may be some l...
by alluringreality
Wed Jun 17, 2020 2:10 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34247

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Address the argument. The argument is that DCA makes the logical error of treating new money differently from old money, or, equivalently, that's ok to be fully invested with asset allocation X after some arbitrary time period after receiving a windfall, but not immediately after receiving it. Why?...