Bogleheads.org

SmallHi

You once showed 100% VG SV to equal 40%/36%/24% S&P 500/DFA LV/DFA SV... http://www.bogleheads.org/forum/viewtopic.php?p=476220#476220 Could you do the same again here for your portfolio? James, That chart in the post you linked listed various allocation with the same historical 79-0? retuns--t...

SmallHi

28% US LV 42% US SV 12% Int LV 18% Int SV SH: Do you mind describing your bond allocation and your equity-fixed ratios? Thanks. I am 100% equity besides my emergency fund. Once I get to the point where I need bonds (I'll probably opt for 5-7 years of retirement income in fixed income to overcome in...

SmallHi

Boglenut, You can get there with VTV, VBR, EFV, and SCZ to keep it in the MSCI family. If the "market" nature of SCZ bothers you, DLS is an alternative. james22, My allocation is not constrained in any way other than having to get the buy in of my wife who doesn't fully share my zest for s...

SmallHi

28% US LV
42% US SV
12% Int LV
18% Int SV

SmallHi

. Perhaps the 25% EM came from posts like this one (from a distant thread). http://socialize.morningstar.com/NewSocialize/ViewPost.aspx?apptype=0&PostID=1804177 "If I had no account restraints and access to any fund out there, I would hold a simple 50% USSV/25%Int'L SV/25%EMV portfolio.......

SmallHi

PS-James, I am fond of your existing allocation (although I'd rather stay passive and use Vanguard Value index along with EAFE Value + EAFE Small). The EM already in there is plenty.

SmallHi

Hey, SmallHi. I don't remember you being such an EM fan. Is this new? I think what’s new is him not being such an EM fan. He seemed okay with EM at about 25% of equities (if I recall from distant threads). Then seemed to shift to zero in favor of all ISV (in place of EM). Initial arguments for the ...

SmallHi

From the comments section appears an old friend with an interesting query (ruh-roh!): smallhi 02/10/10 | Report as spam RE: Why Bond Market Outperformance Is So Tough In your books, you have advocated a shifting allocation strategy between TIPS funds and short/interm. term T bond funds, depending o...

SmallHi

. From Erin Botsford at http://www.cnbc.com/id/15840232?video=1248700943&play=1 . That's sort of old conventional wisdom. We don't believe in taking systematic withdrawals from balanced portfolios. I think Ms. Botsford is correct. The Trinity 4% SWR stuff is being replaced by something less vol...

SmallHi

By the way, as mentioned above, $598 for a BB shoe means Alden private label. No reason in my opinion not to go right to the source. Alden's cordovan offerings are lined, whereas BB are unlined. Lined shoes are more durable, and, unless you are going sockless, are more comfortable.

sh

SmallHi

When it comes to shoes, you get what you pay for. The best value for mens shoes are from Alden. SmallHi knows what he's talking about. Alden shoes are great and I've worn them for many years. (I also think he had recommended Samuelsohn suits in the past-my favorite brand). That said, I do think the...

SmallHi

Appreciated shoes? Give me a break. I learned a long time ago that practically no one wants to buy used shoes. :) Don't believe me? Put up a poll to see if anyone will buy used Alden shoes. Thank goodness my job doesn't require anything more than Rockports and even those are too expensive so its To...

SmallHi

When it comes to shoes, you get what you pay for. The best value for mens shoes are from Alden. Timeless stlyes that last a lifetime (when 2 or more pairs are rotated, stored with cedar shoe trees, and resoled/refurbished when they get old). For the average shoebuyer, their calfskin shoes will fit t...

SmallHi

Paul, Nate Davis has impressed, no doubt. I am a bit hesitant to crown him a starter this year, only because he did it against the other team's practice squad, which, if you think about it, isn't much more than a decent college team. And we know he had a good college career. For sure though, I like ...

SmallHi

I too am a diehard (and I mean diehard) 49ers fan. I only came along in the early 80s (due to my age :wink: ), but have more than made up for lost time. 2 for 2 on attending preseason games this year, as a matter of fact! I am a little bit more optimistic about this year. I think Hill is the consuma...

SmallHi

[quote="SmallHi "--rude remark deleted-- The vast majority of people simply cannot live the life they want to live with 20-30% equity allocations. Ain't gonna happen. Maybe not...unless you invest in the Permanent Portolio. http://www.bogleheads.org/forum/viewtopic.php?t=15434[/quote] I w...

SmallHi

. Sh, That is a rather peculiar mix of DFA funds you have recently (?) constructed. Its the closest factor load match to the ETF portfolio using DFA TM funds I could get (matching individually the US, Non-US Developed, EM & fixed income loads, as well as the overall portfolio loads). Constructe...

SmallHi

"Buy & Hold" has to be conservative/moderate risk AA for it to work for individual investors. Tolerable Loss x 2 = Equity Allocation < 50% BUY-AND-HOLD investing isn’t for the faint of heart. It works only if you’re willing to hang onto losing stocks for very long periods, in downturn...

SmallHi

and yet for the same 10 year period, we also have: Vanguard Sm Value - +5.72% Vanguard Sm Growth - +5.11% Vanguard small cap - +4.20% Vanguard tax managed small - +5.98% Of course the only thing constant about those funds in the last decade has been their names, as each one except TM small has chan...

SmallHi

I'd say the fact that small value underperformend mid cap value, and had very similar performance to small growth over the past 10 years, would imply caution when applying the three factor model too regilously. Last 10 years annualized return, % (latest data from MSCI website as of today - http://w...

SmallHi

. Up about 50% for a 75:25 stock:bond portfolio. FWIW I track several portfolios in M*, largely for learning/demonstration purposes (on asset allocation, security selection, and market timing). Here are the returns of each since March 9 (according M*). Asset Allocation - ETF ..........................

SmallHi

. FWIW - 'recent' analysis suggest a much smaller difference between PCE and CPI. BEA’s comparion [see second slide] BLS’s comparison “Both the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA) produce measures of the change in prices that consumers pay on the goods that th...

SmallHi

earnings are noisy and of little use. P/B is a better measure here, and draws out like you'd expect.

sh

SmallHi

We all know that owning emerging markets expose you to a massive amount of political risk . You also know, owning smaller and more value oriented stocks in developed markets exposues you to a higher degree of economic/business risk . Tilting to small and value has rewarded investors with returns of ...

SmallHi

...most investors ignore the fact that our standard of living* has increased approximately 5-fold in the last 80 years, or by about 2% per year beyond the overall increase in inflation ... If your wealth didn't keep pace with our increase in standard of living, then you lost relative purchasing pow...

SmallHi

Stocks (TSM) have outpaced bonds (five-year notes) about as often and by as much as small value stocks have outpaced TSM: 28-08 TSM>5YR =+3.7% SV>TSM =+3.5% # of 5YR periods: TSM>5YR = 74% SV>TSM = 68% # of 10YR periods: TSM>5YR = 83% SV>TSM = 75% This seems obvious. Your risk and reward from moving...

SmallHi

Any updates on this? I'm just learning about the DFA core and vector funds while considering moving to a DFA adviser. Here are a few updates: a) don't hire an advisor to get access to DFA Vector funds, hire one because you need one b) it is largely irrelevant what the loading factors have been over...

SmallHi

This thread is a case study in behavioral economics: overconfidence! The amount of individuals that have the ability (not just the intellect, including reading a few books and corresponding on internet chat sites) to successfully manage their own money is miniscule. I believe Bernstein has it pegged...

SmallHi

Trying to take a (no sides approach) to looking at the issue of EM. Seems to me that a fair comparison would be to look at Large Caps only if you are going to look at EM Large Only. Not so fair to compare Multi Factor portfolio's vs Components, or to choose specific periods. In an attempt to compar...

SmallHi

I am satisfied that the issues have been reviewed, so I don't have anything more to contribute. Appreciate the thoughtful responses...

sh

SmallHi

saurabhec, Sorry, but I don't buy it. There are all number of posts talking about how Bernstein cautioned on emerging markets investings, share dilution, lack of correlation between growth and stock market returns et al. To say nothing of the fact that the patron saint of Bogleheads Jack Bogle is no...

SmallHi

Robert, Thanks for responses, a few quick comments: SH wrote: Consider value or small dimensions, and EM would have (has) no appeal whatsoever Robert T wrote: This seems to be a significant shift from some of your earlier posts. If I’m not mistaken you had 1/3 of your equity allocation in EM at one ...

SmallHi

Robert, EM performance from 1975 to 1985 was not great, lagging the S&P500 (according to Barry et al. using the IFC EM composite index), a period overlapping with the Latin America debt crisis [1979-1988] (risk showed up). Despite the poor performance in 1975-1985, the “efficient” portfolio was ...

SmallHi

I'd say emerging markets investing deserves more critical thinking than Bogleheads have committed to the subject. I know you like to tweak Bogleheads now and then especially given their mistrust of small and value premiums, but on emerging markets if anything Bogleheads seem to be even bigger skept...

SmallHi

Hi Small, Using Simba's spreadsheet: 1975-1995 VFINX (S&P500) CAGR=15% VDMIX (Int'l Developed) CAGR=15% VEIEX (Emg. Mkts.) CAGR=27% 2000-2008 VEIEX (Emg. Mkts.) CAGR=4% VTRIX (Int'l Value) CAGR=1% The 2000-2008 period is the latest data Simba has, but the numbers don't come close to matching yo...

SmallHi

Looking to iShares and DFA websites for independent verification: iShares Emerging Markets Index BtM = 0.36 iShares EAFE Growth Index BtM = 0.33 iShares EAFE Value Index BtM = 0.71 DFA Emerging Markets Fund BtM = 0.49 DFA International LC (EAFE) BtM = 0.68 DFA International LV BtM = 1.05 DFA Interna...

SmallHi

Did Bernstein really write this? For an investor in his early years, an EM index is the place to be for at least 20% of his equity allocation. Stocks are about taking risks to get rewards. If value matters, in the long term equities reflect the degree of growth in the underlying entities. So where ...

SmallHi

Ok - let's go back a little further to the inception year of AEMGX (Acadian EM) to cover a 16-17 yr span.... Value of $10k invested on 9/30/93 to 7/15/09: VIVAX: $26,029 (VG Large Value) DFLVX: $30,210 (DFA US LV) AEMGX: $33,792 (Acadian Emerging Markets - Value tilted) From October of 1993 through...

SmallHi

Makes sense, right? Developing countries are, after all, expected to lead us out of this global recession. And in the long run, countries like China and India will almost certainly leave economies in the U.S., Europe, and Japan in the dust. There's just one glitch: Economic growth and stock returns...

SmallHi

. because, historically, all of the size/value returns have occured in the first few months of the year: June-December Value Premium = +0.7% Size Premium = -1.8% January-May Value Premium = +9.1% Size Premium = +8.1% So the average index that is reconstituing during June or July is only "fully...

SmallHi

because, historically, all of the size/value returns have occured in the first few months of the year: June-December Value Premium = +0.7% Size Premium = -1.8% January-May Value Premium = +9.1% Size Premium = +8.1% So the average index that is reconstituing during June or July is only "fully l...

SmallHi

Robert, Just comparing returns of two Ken French series: one rebalanced annually, the other rebalanced quarterly. The results didn't suggest more frequent rebalancing helped returns. I agree, momemtum is likely part of the explanation for the difference. True, after controlling for momentum, there w...

SmallHi

. Larry, To be honest, I’m not sure to what extent more frequent reconstitution helps. Here are the returns from 1926-2008 of the Fama-French Research portfolios which are rebalanced annually , and the Fama-French Benchmark portfolios which are rebalanced quarterly . Large Small -------------------...

SmallHi

Here is one writer's view of performance of Small Cap Value (SCV): http://seekingalpha.com/article/139932-small-cap-value-beta-still-relevant Sometimes SCV overperforms, sometimes under. I notice 1987 to 2003, or even 1987 to 2008 returns were equalized. So to make use of SCV's "premium" ...

SmallHi

A really, really horrible article ( no offense to Tom, by the way, thanks for posting it ), right along with the Arnott dribble. All of these bond bulls (if ever there was a better case of recency, I'd like to see it) never mention that bonds underperformed inflation for 50 years from 1940 to 1990! ...

SmallHi

S&P 500 Index = +1.94%

IVV = +2.14%
DFLCX = +2.06%
FSMKX = +1.96%
VFINX = +1.96%
SPY = +1.90%
SWPIX = +1.87%

sh

SmallHi

Why are these returns helpful???? Who had $10,000 to invest back in 1976? Wouldn't have $10,000 been considered a small fortune? And if someone did have $10,000, wouldn't it have been in CDs? Just who would have jumped on a new form of unproven investing called "Indexing"? To a limited ex...

SmallHi

S&P 500 = $229, 481 (10.2%)
Large Value = $434,291 (12.4%)
Small Value = $1,074,648 (15.6%)

sh

SmallHi

I am a bit less concerned with the concentration in the larger areas of the market than I am in small/micro. There are less large/mid cap stocks overall, and dispersion between individual names is much lower. Am I in love with 120 stocks when other comparable indexes hold 2X to 5X as many? You alrea...

SmallHi

Of course, its still highly negative and significant over the entire period available (back to 1995)--an issue that is even more problematic given that most of that period is simuated: even in backtests the strategy looked lousy. Furthermore, as I mentioned in a previous post, adding the momentum fa...

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Economic Risk vs. Political Risk

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concluding thoughts

EM looks awful growthy

Momentum and Reconstitution ramblings...

Re: Small Cap Value

S&P 500 YTD Returns