Search found 4299 matches

by secondopinion
Fri Mar 17, 2023 6:16 pm
Forum: Personal Investments
Topic: Can I create my own "fund" on Vanguard or Schwab so I don't have to individually purchase 10 different etfs every month?
Replies: 50
Views: 3160

Re: Can I create my own "fund" on Vanguard or Schwab so I don't have to individually purchase 10 different etfs every mo

I was curious so did a max time period chart for VBR for small value and VTI for the rest of us. VTI healthily beat VBR. I learned about small cap value being a bad place from a Jack Bogle interview some time ago. He used it as an example of a sector where people find something that's outperformed for some particular time period and it becomes a rush to get in and continues being a rush for a while. Well, what happens when you get all this investment? It becomes overpriced and from what Jack said, that's where small cap value is now. So if you want to beat small cap value, use the entire US market. VTI or VTSAX work great for this. The root question is whether one should overweight stocks that have more present earnings or book value now p...
by secondopinion
Fri Mar 17, 2023 6:01 pm
Forum: Investing - Theory, News & General
Topic: Private Equity in your 401k? Be Afraid, be very afraid!
Replies: 39
Views: 9581

Re: Private Equity in your 401k? Be Afraid, be very afraid!

Swensen on Private Equity.. And I've said it too, but one can access some very fine PE firms (HG Capital, Harbourvest) via UK investment trusts, sometimes on 50% discounts: https://www.cfr.org/event/conversation-david-swensen SWENSEN: So that is what I love most in my portfolio. I think the private equity that you’re talking about, where you buy the company, you make the company better— RUBIN: Yeah. SWENSEN: —and then you sell the company is a superior form of capitalism. I’m really concerned about what’s going on in our public markets. I think short-termism is incredibly damaging. There’s this focus on quarter-to-quarter earnings. There’s this focus on whether you’re a penny short or a penny above the estimate. And there’s this activist m...
by secondopinion
Fri Mar 17, 2023 5:48 pm
Forum: Investing - Theory, News & General
Topic: Private Equity in your 401k? Be Afraid, be very afraid!
Replies: 39
Views: 9581

Re: Private Equity in your 401k? Be Afraid, be very afraid!

Swensen on Private Equity.. And I've said it too, but one can access some very fine PE firms (HG Capital, Harbourvest) via UK investment trusts, sometimes on 50% discounts: https://www.cfr.org/event/conversation-david-swensen SWENSEN: So that is what I love most in my portfolio. I think the private equity that you’re talking about, where you buy the company, you make the company better— RUBIN: Yeah. SWENSEN: —and then you sell the company is a superior form of capitalism. I’m really concerned about what’s going on in our public markets. I think short-termism is incredibly damaging. There’s this focus on quarter-to-quarter earnings. There’s this focus on whether you’re a penny short or a penny above the estimate. And there’s this activist m...
by secondopinion
Fri Mar 17, 2023 5:16 pm
Forum: Investing - Theory, News & General
Topic: US treasuries and interest rates
Replies: 2
Views: 820

Re: US treasuries and interest rates

Depending on the brokerage, it might not be showing the price change of today (let alone at that given moment). That is, the data might be stale.
by secondopinion
Fri Mar 17, 2023 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Evaluating my risks
Replies: 7
Views: 506

Re: Evaluating my risks

I think it’s very interesting that a partner in a financial planning firm is asking for third-party opinions on his financial risks. :shock: I honestly don't think snarky comments like this are helpful in encouraging people from all backgrounds to ask questions on this forum. Part of the reason I visit is to be able to interact with people I would never have the opportunity to share ideas with otherwise. Echo chamber existence be damned. Labelling, and being dismissive is not helpful. OP asking people on this forum means he is humble and open to suggestions and wise enough to understand that, despite his personal qualifications, he too might have some blind spots. Which, in turn means he not blinded by hubris and is actually a good financi...
by secondopinion
Fri Mar 17, 2023 1:25 pm
Forum: Investing - Theory, News & General
Topic: What is the benefit to the government for issuing inflation-protected securities
Replies: 67
Views: 4743

Re: What is the benefit to the government for issuing inflation-protected securities

MOBY DICK wrote: Fri Mar 17, 2023 9:15 am TIPS are one of those things that sound good to have. Actually seemed like a no-brainer.
They have proven to be worse than useless after real inflation kicked in 2 years ago.
So apparently it did work well... for the government... not for the investor.
So much for all the TIPS discussions.
Did they fail? The government had to pay more interest. TIPS “failed” only because the market real yield increased. That is a big difference from being good for the government.
by secondopinion
Fri Mar 17, 2023 1:06 pm
Forum: Personal Investments
Topic: Who's taking profits right now?
Replies: 23
Views: 2050

Re: Who's taking profits right now?

investwise1983 wrote: Fri Mar 17, 2023 10:32 am Anyone taking profits that hasn't been hit too hard?
I am waiting for the profits. But I guess I have dividends and interest, however.
by secondopinion
Fri Mar 17, 2023 12:30 pm
Forum: Personal Investments
Topic: TBills vs CDs vs Ibonds vs Cash
Replies: 11
Views: 1176

Re: TBills vs CDs vs Ibonds vs Cash

For a youngish investor with the stomach for risk and the need to grow your principal is there any reason to not just do the 3 fund portfolio and forget it? At least with the part of your portfolio that you wouldn't need for 7 years or more? I have a stomach for risk, including going against the grain and not hold BND as my fixed income. BND, the commonly touted bond ETF, is about 40% of bonds that are 1-5 years until maturity and 30% are 5-10 years until maturity. To be frankly honest, if I-bonds or direct CD offerings happen to be superior at the time with a perspective towards long-term investing versus treasuries or even corporate bonds in this maturity range, I do not think it is worth holding BND. The worst case for me is underperfor...
by secondopinion
Fri Mar 17, 2023 11:25 am
Forum: Personal Investments
Topic: TBills vs CDs vs Ibonds vs Cash
Replies: 11
Views: 1176

Re: TBills vs CDs vs Ibonds vs Cash

anoop wrote: Fri Mar 17, 2023 11:18 am CD not best for liquidity because of penalty.
Liquidity is a concern for direct CDs. However, because it is normally a fixed penalty, it can be a rate hedge for the case when rates pop up higher (I utilized this fact in 2022 in my favor).
by secondopinion
Fri Mar 17, 2023 11:08 am
Forum: Personal Investments
Topic: REIT’s in a taxable account
Replies: 15
Views: 1599

Re: REIT’s in a taxable account

My taxable account managed by my former financial advisor has two real estate funds, REET and DFGEX. I read in “The Four Pillars of Investing” and a book by Rob Berger that REIT’s can generate lots of taxes. Should I consider selling them? REITs, as some of the posters have commented, are not terrible in the sense of how the income is taxed. It is more of a question whether you want to hold more REITs than the market; the taxes are secondary in all honesty. As someone who has a large taxable account in comparison to my tax-advantaged, I would not push REITs out of the taxable account. Maybe they rank 3 out of 5 stars (in my mind) as far as tax efficiency, but I can think of other classes of companies that are far worse. And with yields of ...
by secondopinion
Fri Mar 17, 2023 10:27 am
Forum: Personal Investments
Topic: REIT’s in a taxable account
Replies: 15
Views: 1599

Re: REIT’s in a taxable account

An unrelated question: Do any of you use microcap funds, or do you think a small cap value fund is sufficient? Unfortunately, there is not a CRSP U.S. Micro Cap Index (the bottom 2% of cap) fund to go with Vanguard's offerings (which contains all the companies too small for VB, their small-cap ETF). The most similar choice for an ETF is IWC; but with an 0.60% ER, it is very expensive and follows the Russell Microcap Index. https://www.ishares.com/us/products/239716/ishares-microcap-etf If one believes in small cap value intensely, then they might want to consider the S&P 600 Value Index or even the S&P 600 Pure Value Index. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth...
by secondopinion
Thu Mar 16, 2023 5:37 pm
Forum: Investing - Theory, News & General
Topic: All money in Vanguard
Replies: 20
Views: 4325

Re: All money in Vanguard

The largest risk is that you could lose access to all of your portfolio for some time. Even though I am within insured limits, I choose to have more than one brokerage for this reason.
by secondopinion
Thu Mar 16, 2023 3:37 pm
Forum: Investing - Theory, News & General
Topic: Mutual Series Funds - An Interesting History
Replies: 6
Views: 702

Re: Mutual Series Funds - An Interesting History

Franklin Templeton has posted a very interesting history on the Mutual Series Funds going back to the 1930s. Thanks for posting. I got a kick out of the Adapting To Changing Markets title on page 15. Those of us of a certain age will remember Franklin-Templeton as a big name player in the late 20th century, particularly in international investing. What they did not do, however, was adapt. Their lethargic, high-cost model fell out of favor when Vanguard, Fidelity and others came to prominence. Maybe they are trying to reinvent themselves. Well, I know their index single-country ETFs (such as FLAU) are favorites of mine (far cheaper than iShares with FLAU being 0.09% rather than EWA's 0.50%). https://www.franklintempleton.com/investments/opt...
by secondopinion
Thu Mar 16, 2023 3:05 pm
Forum: Personal Investments
Topic: 4 week Tbill Supposed to Auction Today
Replies: 15
Views: 1775

Re: 4 week Tbill Supposed to Auction Today

That is correct; they rescheduled. Normally, they do give more notice, however.
by secondopinion
Thu Mar 16, 2023 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Delay house purchase to invest in the stock market?
Replies: 23
Views: 2945

Re: Delay house purchase to invest in the stock market?

Hi! I'd like to invest more in the stock market (esp during times like this) but I am also saving for a down payment. What % of my net pay should I use for investments vs house down payment? Would it be silly to delay purchasing a house so I can invest more of my money in the stock market? Here are the pros/cons I see. Pros Flexibility. Who knows where my career might take me? I can always sell my stocks if I want to purchase a house (stock market could tank when I want to buy a house though) I can take more risks with my career Cons I live in a VHCOL area. House prices may continue to go up. I like having a home of my own FOMO. Friends are buying homes. Home ownership is fine to seek, but I would tend to not take it lightly. I do not want...
by secondopinion
Thu Mar 16, 2023 11:45 am
Forum: Personal Finance (Not Investing)
Topic: Does it make sense to buy CDs now, with interest rates falling?
Replies: 23
Views: 2062

Re: Does it make sense to buy CDs now, with interest rates falling?

I opened a bunch of add-on CDs ranging from 1 to 5 years over the past few months. That way, if the very short-term interest rates do drop quickly then I have somewhere that is yielding >4% for the next 5 years on new cash.
by secondopinion
Thu Mar 16, 2023 11:22 am
Forum: Personal Finance (Not Investing)
Topic: Looking for a chart on the corrosive effect of investment fees
Replies: 25
Views: 1582

Re: Looking for a chart on the corrosive effect of investment fees

Well of course the absolute values are greater, but as a percentage of total wealth they are much smaller. And the latter matters more from a behavioral and emotional standpoint. Behavior being the biggest factor! And of course these charts assume all else is equal, which it's not. The average investor is going to be buying individual stock, crypto, gold, options, buying high and selling low, taking advice from friends in the locker room and at the bar, etc. If an advisor puts a stop to that catastrophic behavior and gets them into a diversified allocation and pushes them to increase their savings, the results will be substantially better than what the investor would accomplish on their own. The drag from that 1% fee will be minuscule by c...
by secondopinion
Wed Mar 15, 2023 4:15 pm
Forum: Personal Finance (Not Investing)
Topic: Sharing college costs with children
Replies: 105
Views: 8291

Re: Sharing college costs with children

We are planning the following: 100% Paid books/tuition for 2-years of Community College, living at home. 100% Paid books/tuition for in-state University, living at home. Anything else? They are responsible for it (i.e., room and board if they want 4-years away). There are plenty of times when CC credits don’t transfer even with an articulation agreement or transfer as generic credits, which fulfill neither gen ed nor major requirements. Living at home is socially stunting, and a lot of lifetime friendships form freshman year. CCs also vary hugely from excellent, well resourced places to grade 13 and 14 filled with slackers and low achievers. Obviously you need to do research on schools for transferability. Everything else is very dependant...
by secondopinion
Wed Mar 15, 2023 3:05 pm
Forum: Investing - Theory, News & General
Topic: Why buy a negative yield TIPS?
Replies: 36
Views: 2833

Re: Why buy a negative yield TIPS?

Lack of better options for long-term savings. Risk-adjusted expected real rates were historically poor for all USD assets at the same time TIPS real yields were negative. TIPS were just more transparent about it. Some people seem to think negative real rates are not sustainable, but there is no good reason to assume that. There is reason to believe nominal rates can't sustainably be below the expected cost of storage/insurance for paper cash. But expected real rates can be as much below that as expected inflation, since stored paper cash is subject to the same expected inflation. If I dare go here according to forum rules, then consider this: consider the potential that could happen if there were no accepted physical form of cash after 203...
by secondopinion
Wed Mar 15, 2023 2:45 pm
Forum: Personal Investments
Topic: I asked chatgpt about limit orders and I'm confused
Replies: 27
Views: 2166

Re: I asked chatgpt about limit orders and I'm confused

freakyfriday wrote: Wed Mar 15, 2023 4:34 am The livestream last night had ChatGPT4 writing code, fixing it's own bugs.
See Rice's Theorem; I doubt it will defy computational theory and fix everything wrong with itself: https://en.wikipedia.org/wiki/Rice%27s_theorem
by secondopinion
Wed Mar 15, 2023 1:34 pm
Forum: Personal Investments
Topic: Fake Vanguard email spoof [May not be spoof - Move to brokerage platform request]
Replies: 10
Views: 1416

Re: Fake Vanguard email spoof

It might not be fake. Do you still have a mutual fund-only account?
by secondopinion
Wed Mar 15, 2023 1:29 pm
Forum: Investing - Theory, News & General
Topic: Short Term Treasuries/ FDIC de facto limits
Replies: 9
Views: 1061

Re: Short Term Treasuries/ FDIC de facto limits

wbond wrote: Wed Mar 15, 2023 1:04 pm Right. I get that in the current crisis mode. But longterm anyone with access to U.S. banking: is there any meaningful difference between a bank account & T bills if no de facto FDIC limits?
Yes. I cannot pay my bills from a treasury bill until the money from a treasury bill lands into my bank account. Not to mention, many direct CDs are puttable (some have other features worth having). And taxation differs.

It is still a bit of an apples to oranges comparison, regardless of the insurance limits.
by secondopinion
Wed Mar 15, 2023 12:40 pm
Forum: Personal Investments
Topic: Selling Treasuries question
Replies: 7
Views: 536

Re: Selling Treasuries question

swansong wrote: Wed Mar 15, 2023 12:07 pm Is it ever worth it to sell early, profit wise?
It may or may not. It depends on what you actually are going to do with the money. I was posed this dilemma in 2020 for some long-term treasury bonds; I had an add-on CD yielding 3% for four years, so 1.2% or 3%? It would have taken about a decade to earn what 4 years gives. Glad I chose to sell.

But generally, most people do not have such clear-cut situations. Take a moment to assess whether you should be holding the treasuries.
by secondopinion
Tue Mar 14, 2023 3:21 pm
Forum: Personal Investments
Topic: Buying REITs using 20% of your money?
Replies: 9
Views: 957

Re: Buying REITs using 20% of your money?

I assume they mean individual REITs. It sounds crazy to me. Please try to find your source so we can figure out what they were saying. Are you sure it isn't someone hawking REITs? The average REIT was cut down to less than ⅓ of its previous value in 2008-2009: Source https://imgur.com/6K6nO75.png If you'd bought it using 5X leverage, you'd have been in trouble. You'd have gotten a margin call if you'd bought it on margin. If the average REIT was down that much, then many individual REITS must have been down even farther. If I remember right, the leverage employed by REITs was worse back in 2008 than it is now (hence why 2008 was so bad). But regardless, they do employ quite a bit of it already; why add to it? I rather not.
by secondopinion
Tue Mar 14, 2023 1:56 pm
Forum: Personal Investments
Topic: Buying REITs using 20% of your money?
Replies: 9
Views: 957

Re: Buying REITs using 20% of your money?

REITs already use leverage; I do not know how much exactly, but using 5x leverage on REITs is certainly not right.
by secondopinion
Mon Mar 13, 2023 6:38 pm
Forum: Personal Investments
Topic: Help enter the bond world in my 30's
Replies: 12
Views: 1038

Re: Help enter the bond world in my 30's

I don’t plan to retire for another 30 years. ... Even though you have a long time horizon, I'd caution you with regard to long term bonds or long term bond funds. I can't tell you how many times (a lot) I've seen someone in this forum who purchased a long term treasury fund with a duration of 15 - 20 years, then 2 or 3 years later, they're disappointed and want to sell out of it because it's suffered a loss. Regards, Especially if one's expenses are real denominated and the long-term bonds are nominal. It is easier to tolerate, at least for me, that long-term TIPS are very likely to match expenses far into the future. For nominal bonds, I either stay shorter in duration or accept the fact it is a speculation because I do not have long-term...
by secondopinion
Mon Mar 13, 2023 6:21 pm
Forum: Investing - Theory, News & General
Topic: Diversification a la Markowitz #3: Gold
Replies: 48
Views: 4515

Re: Diversification a la Markowitz #3: Gold

The results from the first post will not hold up if expected returns from gold are reduced to 0% real. Gold has to have positive returns that exceed intermediate treasuries, e.g. because actual inflation exceeds expected inflation by a material amount over an entire study period (like 30 years). It's reasonable to imagine scenarios where gold at a 10% allocation helps. It's hard to reasonably expect gold returns in the future will support a 30-40% allocation on the efficient frontier. Well, the point is reduction of risk over having greater returns. If I want better returns, I need something besides a "store of value" and take the risk anyway. Remember that gold cares nothing about a country-specific inflation or taxes. If gold i...
by secondopinion
Mon Mar 13, 2023 5:56 pm
Forum: Investing - Theory, News & General
Topic: BND thought experiment
Replies: 99
Views: 8871

Re: BND thought experiment

Issuers, yes that diversification is good. Duration-related diversification is another story. This assumes that there is no advantage with any particular kind of bond regardless of investment timeframe or circumstance. Someone with a shorter investment timeframe does not need to be taking the duration risk of longer-term bonds. Someone who is actively pulling from their bonds perpetually like an annuity on a nominal basis might benefit from having a sizable number of higher coupon bonds rather than near zero coupon bonds (since buying the bond at a premium is not as concerning since they would likely need to spend their basis anyway). Etc. However, if nominal yields were real yields, then I would agree that accumulators would benefit from ...
by secondopinion
Mon Mar 13, 2023 4:58 pm
Forum: Investing - Theory, News & General
Topic: BND thought experiment
Replies: 99
Views: 8871

Re: BND thought experiment

I'll agree on generally preferring higher non-marketable rates, with limited further consideration. For marketable rates I tend to question if an "all else being equal" condition likely applies with substantially different rates, such as the original post. Presuming markets might contain some information, there's a possibility that significantly higher market yield may indicate non-matching conditions or risks. I suspect there may be additional reasons why rates could change beyond inflation, for example some elements of social trust might appear in market rates. Basically I have reservations if a market accepting 4% likely shares similar conditions or opinions about risks as the same market trading at 14%. I consider a possibili...
by secondopinion
Mon Mar 13, 2023 2:56 pm
Forum: Investing - Theory, News & General
Topic: Long-term Returns: Value Index vs Growth Index
Replies: 18
Views: 1665

Re: Long-term Returns: Value Index vs Growth Index

I think any tilting is pointless unless there are certain risks that one's personal portfolio needs to reduce and other risks that they can accept instead. I assert that neither is more profitable on a expected basis, but it could be that one is more likely to be profitable (essentially, I think skew/kurtosis plays a role). Sadly, I think too many are seeking alpha (or even risk-adjusted alpha in the sense of standard deviation) and not many are considering the other statistical moments, let alone the specific risks increased/reduced by the tilt. Of course, this is opinion; but I doubt it is unreasonable to assume that certain factors, if tilted towards, will incur more of some risks and less of others. If Fama and French factors are uniqu...
by secondopinion
Mon Mar 13, 2023 12:41 pm
Forum: Investing - Theory, News & General
Topic: TIPS could rival S&P500 over next decade
Replies: 57
Views: 6355

Re: TIPS could rival S&P500 over next decade

elderwise wrote: Mon Mar 13, 2023 12:34 pm
secondopinion wrote: Mon Mar 13, 2023 12:31 pm
Cheez-It Guy wrote: Mon Mar 13, 2023 12:10 pm
watchnerd wrote: Mon Mar 13, 2023 11:19 am some service jobs (e.g. barber) would seem hard to automate.
So hard that a lone engineer built one in his basement to give himself a haircut during the pandemic!

https://youtu.be/7zBrbdU_y0s
https://youtu.be/WQ8Xgp8ALFo

Mainly, I just want more people to watch this excellent engineering content and feel as inadequate as I do.
But giving a haircut is not the only reason people go to a barber; they are part-therapist as they listen to everything you say and a discussion occurs. A robot will not do that yet.
Chat GPT has entered the room.
I have not been pleased with the discussion. I will take my business elsewhere and find a new barber. :P
by secondopinion
Mon Mar 13, 2023 12:39 pm
Forum: Investing - Theory, News & General
Topic: Long-term Returns: Value Index vs Growth Index
Replies: 18
Views: 1665

Re: Long-term Returns: Value Index vs Growth Index

I think any tilting is pointless unless there are certain risks that one's personal portfolio needs to reduce and other risks that they can accept instead. I assert that neither is more profitable on a expected basis, but it could be that one is more likely to be profitable (essentially, I think skew/kurtosis plays a role). Sadly, I think too many are seeking alpha (or even risk-adjusted alpha in the sense of standard deviation) and not many are considering the other statistical moments, let alone the specific risks increased/reduced by the tilt. Of course, this is opinion; but I doubt it is unreasonable to assume that certain factors, if tilted towards, will incur more of some risks and less of others. If Fama and French factors are uniqu...
by secondopinion
Mon Mar 13, 2023 12:31 pm
Forum: Investing - Theory, News & General
Topic: TIPS could rival S&P500 over next decade
Replies: 57
Views: 6355

Re: TIPS could rival S&P500 over next decade

Cheez-It Guy wrote: Mon Mar 13, 2023 12:10 pm
watchnerd wrote: Mon Mar 13, 2023 11:19 am some service jobs (e.g. barber) would seem hard to automate.
So hard that a lone engineer built one in his basement to give himself a haircut during the pandemic!

https://youtu.be/7zBrbdU_y0s
https://youtu.be/WQ8Xgp8ALFo

Mainly, I just want more people to watch this excellent engineering content and feel as inadequate as I do.
But giving a haircut is not the only reason people go to a barber; they are part-therapist as they listen to everything you say and a discussion occurs. A robot will not do that yet.
by secondopinion
Mon Mar 13, 2023 12:18 pm
Forum: Personal Finance (Not Investing)
Topic: Do you regret spending money on your wedding?
Replies: 147
Views: 9807

Re: Do you regret spending money on your wedding?

I think the traditional option is frankly nonsense. Spend $30k to see each of 100 friends for 5 minutes in a fancy venue? Part of that is that the perception of the "traditional option" has morphed into a Disneyesque event. The real "traditional option" was to get married at the church or synagogue that you went to so that you did not need an expensive wedding venue. Often the bride and groom went to two different churches so they would even have the choice of two locations instead of using a wedding venue Especially for younger people now the percentage of them that belong to an organized religion is low so a church wedding is not an option for them so they get sucked into the wedding venue scenario which usually also ...
by secondopinion
Mon Mar 13, 2023 11:58 am
Forum: Investing - Theory, News & General
Topic: Long-term Returns: Value Index vs Growth Index
Replies: 18
Views: 1665

Re: Long-term Returns: Value Index vs Growth Index

Value outperforming growth is thought to be a risk-based phenomenon. You could show a 30 year graph of some time period where high yield bonds underperform intermediate treasuries. That doesn't mean it's "reversion to the mean" and that high yield ("junk") bonds no longer have a risk premium. Risk can and does show up. If you want to present the value premium as a behavioral phenomenon that has likely gone away after Fama and French factor models, that is certainly a valid perspective. Likely it is a bit of both. Factors are merely a statistical explanation of the variance of returns for stocks. I think any tilting is pointless unless there are certain risks that one's personal portfolio needs to reduce and other risks ...
by secondopinion
Sun Mar 12, 2023 4:15 pm
Forum: Investing - Theory, News & General
Topic: You really don't understand the relationship between risk and return
Replies: 24
Views: 2847

Re: You really don't understand the relationship between risk and return

nisiprius wrote: Sun Mar 12, 2023 2:25 pm Among all the vile marketing rhetoric used by investment firms, one of the vilest is using the word "aggressive" rather than "risky."
I would disagree; in both financial and medical fields, it is implied that there are considerable risks. An aggressive medical treatment is likely to work as intended, but it could leave side effects, some of which can be permanent and destructive. In finance, an aggressive strategy can leave one worse off; but it could be impressive returns on the hand. Aggressive investment of a company is similar. But sometimes it is optimal to take that considerable risk because the alternative might be worse; it might be better to take that risk at a different point in life than others.
by secondopinion
Sat Mar 11, 2023 7:39 pm
Forum: Investing - Theory, News & General
Topic: BND thought experiment
Replies: 99
Views: 8871

Re: BND thought experiment

Charles Joseph wrote: Sat Mar 11, 2023 6:06 pm
CletusCaddy wrote: Thu Mar 09, 2023 2:05 am What if the yield on intermediate bonds slowly ground upwards over the next 6 years to 14%? I.e. where rates were 40 years ago.
If it gets to that I'm taking my entire life savings and buying 30-year treasuries at 11.18%.
I would not be buying all treasuries at those yields; there would have to be a really good reason for yields to get that high. However, I would be buying such bonds over selling, of course — just not in my taxable account.
by secondopinion
Fri Mar 10, 2023 6:00 pm
Forum: Investing - Theory, News & General
Topic: Buffett in 2018: A 60/40 portfolio is "absurd" and "foolish"
Replies: 162
Views: 18480

Re: Buffett in 2018: A 60/40 portfolio is "absurd" and "foolish"

I will say that the 60/40 makes way more sense when you time horizon invest. A young person in their teens or early 20s investing in bonds would invest in extended long term treasuries like EDV. And LTT, let alone extended LTT, have performed pretty well. Even better than international stocks. Are you sure EDV performed very well? https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageTy...
by secondopinion
Fri Mar 10, 2023 5:54 pm
Forum: Personal Investments
Topic: How safe is VMFXX now?
Replies: 104
Views: 13797

Re: How safe is VMFXX now?

I am certainly no expert but I think bonds held at Treasury Direct cannot be sold there. I think they need to be transferred to a broker and then sold. IMO, it is better to buy Treasury securities via a broker. This is true, but if you are buying 4-week, 8-week, 13-week etc. treasury bills (short duration bills), simply wait for the maturity of the bill and transfer the proceeds to your bank account. You mean the bank account that OP is trying to avoid? Talk about being risk averse. :shock: Regards, We need to do a horizontal gene transfer from this thread to the default thread. :beer I just posted there. Seriously, a lot of this and there is over-stated when one actually looks at the facts (which I assume you would agree).
by secondopinion
Fri Mar 10, 2023 5:43 pm
Forum: Investing - Theory, News & General
Topic: [Debt ceiling discussion mega-thread]
Replies: 456
Views: 33546

Re: How would a government default affect money market funds?

brad.clarkston wrote: Fri Mar 10, 2023 2:40 pm IF the US gov defaults you have bigger issues than your MM fund. Food, water, electric, bullets will be the bigger issues.

Not something I would ever waste time fretting on as the powers that be have several tricks to print more money and kick the debt down the road with.
Read my post and the article attached above. It is very relevant and essentially is not doom and gloom.
by secondopinion
Fri Mar 10, 2023 5:32 pm
Forum: Investing - Theory, News & General
Topic: [Debt ceiling discussion mega-thread]
Replies: 456
Views: 33546

Re: How would a government default affect money market funds?

Here is an article that describes when the US actually did default a few times in 1979 over a debt ceiling issue: https://www.firstlinks.com.au/us-government-previously-defaulted-risk-free In the 1979 defaults, the US Government didn’t treat all its creditors equally. Most Treasury bills, notes and bonds are held by banks and other financial institutions like insurance companies and pension funds, with a small minority held by individuals. In 1979, the Government chose to repay the main institutional creditors in full, out of fear of triggering a banking crisis, but chose to default on 6,000 individual investors. On 26 April 1979, the US Treasury defaulted on $41 million of maturing Treasury bills. They were paid 20 days late on Thursday 17...
by secondopinion
Fri Mar 10, 2023 1:25 pm
Forum: Investing - Theory, News & General
Topic: [Bank failure discussion mega-thread]
Replies: 1945
Views: 126456

Re: Bank stress from bond holdings - SVB

nisiprius wrote: Fri Mar 10, 2023 1:09 pm We are talking about banks
  • that "normal" individuals use
  • that have also made a specialty of catering to a specific category of risky businesses that all have similar risks
  • who will all want to withdraw money at the same time when the risk shows up.
The question is, how many "ordinary" banks are like that?

Notice that the stress is not just a matter of the value of their bond holdings falling, it's also a matter of their customer base being undiversified.
Right. I have not heard of this bank until today. It does not seem ordinary to me.
by secondopinion
Fri Mar 10, 2023 12:42 pm
Forum: Investing - Theory, News & General
Topic: [Bank failure discussion mega-thread]
Replies: 1945
Views: 126456

Re: Silicon Valley Bank

strummer6969 wrote: Fri Mar 10, 2023 12:38 pm Bonds are sure looking great today.
Sure are, even investment grade corporates are good today. Good long-term bonds bought in October through early November last year; they are sure doing decently as a speculation against the peak of the cash-seeking crowd.
by secondopinion
Fri Mar 10, 2023 12:39 pm
Forum: Investing - Theory, News & General
Topic: [Bank failure discussion mega-thread]
Replies: 1945
Views: 126456

Re: Silicon Valley Bank

student wrote: Fri Mar 10, 2023 12:22 pm It has been taken over by regulators. FDIC says customers will have full access to their money by Monday. FDIC works...
I hold my money in more than one place; not only will I stay below the FDIC or equivalent insurance, it also ensures I am not waiting to have access to at least some money.
by secondopinion
Fri Mar 10, 2023 12:31 pm
Forum: Investing - Theory, News & General
Topic: Fixed Income instead of Equities
Replies: 105
Views: 8071

Re: Fixed Income instead of Equities

tibbitts wrote: Fri Mar 10, 2023 10:36 am
watchnerd wrote: Fri Mar 10, 2023 5:01 am Do you have data to support that "most of us" claim?
Of course not, but you already knew that. I should have written "some." What would you guess the percentage of Bogleheads who've made changes in response to market conditions and later regretted those changes is? I've made several such changes and regret all but one of them.
Thus far, my responses to market conditions have been rather favorable. Of course, I tend to go somewhat opposite of the crowd.
by secondopinion
Thu Mar 09, 2023 1:00 pm
Forum: Investing - Theory, News & General
Topic: Buffett in 2018: A 60/40 portfolio is "absurd" and "foolish"
Replies: 162
Views: 18480

Re: Buffett in 2018: A 60/40 portfolio is "absurd" and "foolish"

Who am I to second guess Buffett. However, I do know something better than Buffett does; and that's me. I know what I need to stay investing for the rest of my life no matter what the market does. I have proven that for almost 30 years and it has worked just fine. I simply hold the Vanguard Balanced Index Fund for life and tune out the noise. I don't need to outperform anyone, just need enough to retire modestly. The problem with a 90% or 100% stock portfolio is people think they can handle it until they realize they can't. Correct. And even if they can, the next question is whether they should have that much stock. It is a lot easier to say 90% stocks if one’s portfolio is 50x of their annual expenses rather than 5x. I still hold to the l...
by secondopinion
Wed Mar 08, 2023 9:26 pm
Forum: Investing - Theory, News & General
Topic: Buffett in 2018: A 60/40 portfolio is "absurd" and "foolish"
Replies: 162
Views: 18480

Re: Buffett in 2018: A 60/40 portfolio is "absurd" and "foolish"

Who am I to second guess Buffett. However, I do know something better than Buffett does; and that's me. I know what I need to stay investing for the rest of my life no matter what the market does. I have proven that for almost 30 years and it has worked just fine. I simply hold the Vanguard Balanced Index Fund for life and tune out the noise. I don't need to outperform anyone, just need enough to retire modestly. The problem with a 90% or 100% stock portfolio is people think they can handle it until they realize they can't. Correct. And even if they can, the next question is whether they should have that much stock. It is a lot easier to say 90% stocks if one’s portfolio is 50x of their annual expenses rather than 5x. I still hold to the l...
by secondopinion
Wed Mar 08, 2023 5:33 pm
Forum: Investing - Theory, News & General
Topic: Fixed Income instead of Equities
Replies: 105
Views: 8071

Re: Fixed Income instead of Equities

It is a good time to buy short term treasuries @ 5% plus ( not treasury funds). All those folks piling into bond etfs just took a big beating on their ytd returns with the fed signaling more hikes ahead. Good luck! Any thoughts on next year or the year after that? I do not get caught up on single year deals; I do things with many years in mind. And that's the contradiction: after many years of hammering home "stay the course", now we're telling everyone they have to employ an algorithm to determine how to continuously reallocate their investments. I am merely questioning the short-term thinking here; it is not a contradiction. I have not pretended to be a Boglehead in the orthodox sense, but I have pushed for people to challenge ...
by secondopinion
Wed Mar 08, 2023 4:34 pm
Forum: Investing - Theory, News & General
Topic: Fixed Income instead of Equities
Replies: 105
Views: 8071

Re: Fixed Income instead of Equities

50sFed wrote: Tue Mar 07, 2023 10:55 pm It is a good time to buy short term treasuries @ 5% plus ( not treasury funds). All those folks piling into bond etfs just took a big beating on their ytd returns with the fed signaling more hikes ahead.

Good luck!
Any thoughts on next year or the year after that? I do not get caught up on single year deals; I do things with many years in mind.
by secondopinion
Wed Mar 08, 2023 4:27 pm
Forum: Investing - Theory, News & General
Topic: Fixed Income instead of Equities
Replies: 105
Views: 8071

Re: Fixed Income instead of Equities

Back Dr wrote: Wed Mar 08, 2023 4:24 pm Don't fight the Fed. The fed is raising rates trying to cause a recession which in their theory will cause inflation to drop significantly. The market is upset about rising interest rates and of course a looming recession. Many folks believe we already are in a recession- regardless, the market doesn't like recessions.

What does this tell you? For me, I personally have made investment adjustments to this situation.... don't fight the fed
What does fighting the Fed look like here? I hear it a bit, but it does not explain anything.