Search found 1056 matches

by magneto
Sat Sep 17, 2022 5:34 am
Forum: Investing - Theory, News & General
Topic: Foreign stocks are cheaper
Replies: 94
Views: 11165

Re: Foreign stocks are cheaper

As a UK Value Investor come at this issue from a different angle.

Have avoided US stocks for some years due to valuation concerns.
However as markets declined from Nov onwards, those declining prices aroused interest,
and some exposure to selected US stocks cautiously opened.
Sadly US overall still seems pricey, and stocks purchased, doing less well than UK positions.

In view of current high prices in Stocks, Bonds, Housing, etc, Portfolio Risk Allocation hovering around a lowly 40% (Bonds regarded as Risk Assets as per Swensen).
One possible bright spot is Commercial Property presently out of favour, but debt levels there need watching in the rising interest rates environment.
by magneto
Sat Sep 10, 2022 5:34 am
Forum: Non-US Investing
Topic: Portfolio for move to UK
Replies: 29
Views: 5022

Re: Portfolio for move to UK

Valuethinker wrote: Sun Sep 04, 2022 10:29 am One could hold Index Linked Gilts - I didn't and that has cost me. But maybe that ship has already sailed ...
Not understood !!!

Cash has outperformed both Conventional and Index linked Gilts since November.
Neither seem to have proved a sensible allocation over the period from their elevated price levels.

If we are not entering a secular bear of steadily rising interest rates,
then the ship might or might not now be approaching harbour ?
by magneto
Sun Jun 19, 2022 11:09 am
Forum: Investing - Theory, News & General
Topic: “Buying the Dip?”
Replies: 134
Views: 27157

Re: “Buying the Dip?”

"Under normal market conditions, systematic rebalancers trim winners and bolster losers, moves that go against the conventional grain. Dramatic bear markets signal the need for significant purchasers of losers, while extraordinary bull markets call for substantial sales of winners. When markets make radical moves, investors demonstrate either the courage or the cowardice of their convictions." Swensen Not sure present conditions can be described as 'dramatic' (so far); more a gentle drift. Somewhat spoilt for choice in these declining markets. Can be somewhat overpowering, so going for breadth rather than depth. Buying steadily into reasonably priced individual businesses. No unduly concentrated bets. Here in UK, FTSE100 peaked in...
by magneto
Tue Jun 14, 2022 11:01 am
Forum: Investing - Theory, News & General
Topic: Bonds are safer than stocks - what evidence??
Replies: 49
Views: 4316

Re: Bonds are safer than stocks - what evidence??

Gov't Bonds show a -ve correlation with Stocks in the short term (flight to safety).
But +ve correlation with Stocks in the long term as both are driven by interest rates, driven in turn by inflation.
So if we superimpose short term on long term movements it can look complicated.

The last 40 years has seen a secular bull market in Gov't Bonds ..........
https://www.multpl.com/10-year-treasury-rate
As a counter-balance to Stocks the investor could not go wrong.
And to maximise capital gains long-duration was the place to be.

Today short-duration seems safer if the wheel is turning.

Portfolio here using a minor holding of 50/50 short duration Treasuries/TIPS,
plus lashings of the ultimate uncorrelated asset class = Cash.
by magneto
Sun Jun 12, 2022 10:46 am
Forum: Personal Investments
Topic: stock fund and total bond fund are going down in tandem preventing balancing ?
Replies: 10
Views: 1470

Re: stock fund and total bond fund are going down in tandem preventing balancing ?

HMSVictory wrote: Sun Jun 12, 2022 7:57 am VTSAX is down 20% this year and VBMFX is down 11% so equities have had about twice the volatility of bonds. Of course the year is not over!
So Cash has outperformed both !!

Swensen puts Bonds in the 'risk assets' category, knowing that longer term Stocks and Bonds are both +vely correlated, being driven by interest rates, in turn driven by inflation.
The -ve correlation 'flight to safety' however in a stocks' sell-off being a short-term but useful attribute.

Since 1982 we are all aware a secular bull market has been running for both Stocks and Bonds. Bonds since then provided an alternative income paying 'safe' counterbalance to Stocks. Now the wheel may have turned ?
by magneto
Sun Jun 05, 2022 11:07 am
Forum: Non-US Investing
Topic: Would I be bound to lose money if I bought a EU bond fund?
Replies: 24
Views: 2942

Re: Would I be bound to lose money if I bought a EU bond fund?

Q. I understand that I should have bonds in Euro (since bonds should add stabiity to my portfolio, so it doesn't make much sense to introduce currency risk in them). Does this make sense?

A. The standard answer from the BogleHead US perspective is domestic currency and that is all fine. But suppose you lived in Turkey? How might one feel about the Turkish Lira ?

The questions to ask are in which currency are the monies going to be needed next ?
And how can currency risk be minimised ?
If monies destined for Global Stocks is the Euro the correct answer ?
by magneto
Sat Feb 12, 2022 11:18 am
Forum: Non-US Investing
Topic: Dealing with Platform Risk in the UK
Replies: 10
Views: 3270

Re: Dealing with Platform Risk in the UK

There was an incident in the UK about two years back, where a broker or similar went belly up.
The clients' monies were supposedly ring-fenced, and they were; but by the time the administrator's costs were deducted, precious little monies were left for the investors.
Someone may recall the name involved ?

Call me over-cautious, but this investor diversifies at every possible level ........
+ Brokers
+ Asset Classes
+ Asset Managers
+ Individual Holdings
+ Currencies

When choosing brokers, this investor homes in on those whose ownership structure and background fully understood; the few ultimately owned by major Banks being preferred. We know who steps in when they get into trouble.
by magneto
Tue Dec 21, 2021 5:49 am
Forum: Non-US Investing
Topic: VHYL - Vanguard High Dividend Yield
Replies: 25
Views: 5131

Re: VHYL - Vanguard High Dividend Yield

I like to supplement my investments in Vanguard FTSE All World (VWRL) with Vanguard’s high dividend yield fund (VHYL). I know that this approach deviates from the market capitalization investment approach, but I feel that VHYL is not overly expensive and I like the idea of regular dividends from excellent companies. It helps me forget about the price fluctuations. Any thoughts on adding VHYL? To what extent do you add dividend paying investments (in your asset allocation)? VHYL has two advantages ............ + Providing a useful income when markets generally take a rest from relentless climbing + Dialling down US exposure, if US valuations are of concern However history suggests VHYL is likely to provide a lower 'total return' than VWRL o...
by magneto
Sat Dec 11, 2021 10:35 am
Forum: Investing - Theory, News & General
Topic: Portion of bond holdings in TIPS
Replies: 42
Views: 2941

Re: Portion of bond holdings in TIPS

When stocks plunged in March 2020 ......
Nominals surged providing rich pickings to put into those cheaper stocks.
TIPS fell which was unhelpful.
Some suggest that the discrepancy was the pandemic lowered inflation expectations.

Now was this typical of a stock plunge, or an exception ?
If inflation expectations surge as they seem to be currently, might we see the reverse ?

Because haven't a clue how things will play out next time, am 50/50.
by magneto
Tue Nov 09, 2021 12:48 pm
Forum: Personal Finance (Not Investing)
Topic: Landlords: Best App/Software for Rentals?
Replies: 8
Views: 1104

Re: Landlords: Best App/Software for Rentals?

We jot down income (boxed) and expenses on lined sheet of A4, always there from year to year if anyone else needs to find.
End year tax reporting do the math(s) on excel, just an update of same layout each year.
Seems a doddle !! - Why create any more work ?
In the UK Gov't is threatening to make reporting quarterly - then may need to reconsider.

Tricky part is keeping tabs on cost of improvements to offset against Capital Gains Tax, on sale proceeds.
by magneto
Wed Sep 29, 2021 11:27 am
Forum: Investing - Theory, News & General
Topic: Adjust Asset Allocation When Markets Are Over Valued
Replies: 48
Views: 5188

Re: Adjust Asset Allocation When Markets Are Over Valued

I have no way to know if the market is overvalued. p/e goes to 40 like in 2000. p/e goes to 80 like in Japan. p/e is currently 35. https://www.multpl.com/s-p-500-pe-ratio Valuations of 35 when 10 yr treasury is 1.35 versus 6% in 2000 are apples to oranges, PE is poor at predicting future returns. Valuations can stay low, sideways or go higher for a very long time. Interest rates can alter investor behavior by reducing the risk premiums across asset classes, and altering opportunity cost decisions etc., but there is no reason current interest rates should change valuation analysis. Stocks are claims to cash flows in perpetuity, so the next 5 years should not have any material impact on fundamentals. I do agree with the last point though, an...
by magneto
Thu Sep 09, 2021 11:06 am
Forum: Non-US Investing
Topic: Opinions on my UK portfolio
Replies: 11
Views: 3831

Re: Opinions on my UK portfolio

Dear ValueThinker,

Just suppose the investor has 50% in UK Bonds.
Other 50% in VWRL, (mostly US Stocks)
A calamity hits GBP and it falls 15% v USD, now there is less ammunition to buy VWRL.

We have a currency risk created problem !!

Sure it can work the other way, but that is gambling on currencies,
not the remit of a cautious/prudent investor.


P.S. Don't forget my opening statement .......
"1. If the Bonds are never going to be used other than for domestic spending, Bonds in, or hedged to GBP, make complete sense"
by magneto
Thu Sep 09, 2021 10:42 am
Forum: Non-US Investing
Topic: Opinions on my UK portfolio
Replies: 11
Views: 3831

Re: Opinions on my UK portfolio

Hi, I've been investing on and off since 2000 with varying success. Can you please let me know what you think of this? 50 % Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc 15% Vanguard FTSE U.K. All Share Index Unit Trust GBP Acc 5% Vanguard FTSE Emerging Markets UCITS ETF USD Accumulation (GBP) VFEG 15% Vanguard Global Bond Index Fund GBP Hedged Acc 15% Vanguard U.K. Inflation-Linked Gilt Index Fund GBP Acc Thanks Sam Hi Sam, While the general consensus is to hold Bonds in domestic currency (GBP), have been thinking about this for a year or three. 1. If the Bonds are never going to be used other than for domestic spending, Bonds in, or hedged to GBP, make complete sense. 2. However if those Bonds are to be used for rebalan...
by magneto
Wed Jul 21, 2021 1:16 pm
Forum: Personal Investments
Topic: Extraordinary Items-Income Statement
Replies: 3
Views: 612

Re: Extraordinary Items-Income Statement

karim1997 wrote: Tue Jul 20, 2021 11:26 am Hi everyone,

I would like to know if it is better to include or exclude extraordinary items for EPS (earning per Share) in Stock Analysis?
Consider both convey information.
How they are treated by the investor could depend on the nature of the exceptionals,
and the history of the company in this respect.
All info is good.
by magneto
Thu Jul 15, 2021 5:55 am
Forum: Personal Investments
Topic: I need advice about the about the market timing thing
Replies: 40
Views: 3793

Re: I need advice about the about the market timing thing

Candor wrote: Wed Jul 14, 2021 1:00 pm In the last 30 years I have bought into many many market highs and it always seems to work itself out.
This may be because like many posters only a secular bull-market has been experienced.
Those who were investing pre 1982 might have a reflective cautious approach.

https://www.multpl.com/10-year-treasury-rate
by magneto
Wed Jul 14, 2021 11:09 am
Forum: Personal Investments
Topic: I need advice about the about the market timing thing
Replies: 40
Views: 3793

Re: I need advice about the about the market timing thing

We in late retirement are currently 25/75 Risk/Riskless. March 2020 were at 50/50 rebalancing frantically into the dip, then scaled back from 60/40 on the recovery to finish 2020 back at 50/50. The move to 25/75 is mainly a response to value disappearing from remaining areas such as Commodities and London listed Stocks, plus the enthusiasm of the Robin Hood et al rookies, plus crypto-currency enthusiasm raging, plus the ease of IPOs, plus SPACs. Suggests too much money may be chasing too few assets ? Strategy remains increase Risk when good value appears, reduce Risk on the contrary. This is maybe easier to spot as individual companies' price/value fluctuate together, rather than rely solely on market statistics ? Now 'market timers' tend t...
by magneto
Tue Jun 08, 2021 11:06 am
Forum: Investing - Theory, News & General
Topic: Growth to Value Rotation
Replies: 16
Views: 1590

Re: Growth to Value Rotation

Growth Stocks (hi P/B) had got ahead of themselves price-wise.
Value Stocks (lo P/B) were directionless at low levels.
The situation changed in recent months, with Growth stalling and Value climbing.
So all this is now very much yesterday's story - with Growth now perhaps becoming more interesting price-wise.

Many seasoned investors will point out the basic misunderstanding in this tentative P/B classification divide, since Growth must always be a feature of Value.
It is simpler to first recognise the growth rate of any prospective investment, then consider the price to be paid.
by magneto
Sun May 30, 2021 10:46 am
Forum: Investing - Theory, News & General
Topic: Fundamental analysis help
Replies: 17
Views: 2600

Re: Fundamental analysis help

Benjamin Graham, who was Warren Buffett's mentor, co-authored Graham and Dodd's Security Analysis , possibly the most influential book on fundamental analysis ever written. In 1976, in an interview in the Financial Analysts' Journal, Graham said this: Interviewer: In selecting the common stock portfolio, do you advise careful study of and selectivity among different issues? Graham: In general, no. I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could d...
by magneto
Sun May 30, 2021 10:28 am
Forum: Investing - Theory, News & General
Topic: Cheapest Asset Classes Today?
Replies: 34
Views: 5842

Re: Cheapest Asset Classes Today?

MotoTrojan wrote: Sun May 30, 2021 9:38 am He also speaks to British value stocks being a particularly cheap class.
British Value Stocks have been climbing rapidly in price of late.
(Private Equity also circling)
That may be yesterday's story - so steadily reducing exposure into price strength.
by magneto
Sun May 30, 2021 10:17 am
Forum: Investing - Theory, News & General
Topic: Cheapest Asset Classes Today?
Replies: 34
Views: 5842

Re: Cheapest Asset Classes Today?

"Cheapest Asset Classes Today?" Can we reshape to Best Value Asset Class Today ? In which case would tentatively suggest 'Cash'. "Cash is a call option on opportunity. Having ample liquid cash puts a valuable optionality in the hands of investors, to make bargain purchases when opportunities arise, and it also makes them antifragile. Cash is a much underappreciated asset. It's one of the only price-stable assets that is simultaneously highly value-elastic; cash increases in value as other asset prices drop. The more they drop, the more valuable cash becomes." Gautam Baid In the late 90's was able to move from highly priced Stocks with advantage to an alternative good value Asset Class. Today am struggling to find value a...
by magneto
Fri Mar 26, 2021 12:02 pm
Forum: Investing - Theory, News & General
Topic: CNBC ...why investors should never try to time the stock market
Replies: 22
Views: 4051

Re: CNBC ...why investors should never try to time the stock market

CNBC is always running "you can't time the market!" segments when the market is at an all time high or likely way overheated. Anything to keep drawing in those retail investors so the big boys can dump on them. Quite good to note a cool head in a hot market. Thank You An extract from Benjamin Roth's diary December 27, 1940 ......... "Since 1930 there have been 8 or 9 booms and collapses. The only person who could have survived them all - without much guessing or risk- would be one who bought bargains in sound stocks every time a collapse came and then selling at reasonable profit when prices returned to normal. If he bought a good stock outright at a bargain he would not have to worry or guess about the what the market was g...
by magneto
Fri Mar 19, 2021 11:38 am
Forum: Personal Investments
Topic: should a rental be part of my assest allocation
Replies: 22
Views: 1650

Re: should a rental be part of my assest allocation

Own approach is to view as two portfolios.

Illiquid Portfolio :-
+ Rental Property

Liquid Portfolio :-
+ Risk (Stocks/Bonds/Commodities/REITs)
+ Riskless (Essentially Cash)

The Liquid Portfolio can be rebalanced/adjusted with the click of a mouse
The Illiquid generally cannot.
by magneto
Thu Mar 18, 2021 11:40 am
Forum: Investing - Theory, News & General
Topic: How to invest new large sum in current frothy market
Replies: 51
Views: 6274

Re: How to invest new large sum in current frothy market

Acting on advice from people you know nothing about is a very bad strategy no matter what the advice. What is the worst that could happen with various alternatives? Which would hurt the least? 1. You put all your money in and the market drops and takes ten years to come back. 2. You hold off on investing and the market shoots up and you miss out on the gains. 3. Something in between-- you lose x% or you earn an additional y% but not as much as if you were more extreme. How often do $200,000 windfalls drop into your lap? Once in a lifetime? Every two or three years? How much is that $200k of all your assets? All these play a part in the decision. But some of the people advising you here have maybe $50k invested and have never invested more ...
by magneto
Mon Feb 15, 2021 10:43 am
Forum: Investing - Theory, News & General
Topic: An important reminder from William Bernstein (2012)
Replies: 42
Views: 7449

Re: An important reminder from William Bernstein (2012)

The #1 reason people are buying stocks right now is: 1. They believe the value of the dollar is a rapidly depreciating asset. If you have $1,000,000 now, you can buy a 4,000 sq foot house on a lake. If you have $1,000,000 in 2022, you can buy a 3,000 sq foot house on a lake. If you have $1,000,000 in 2023, you can buy a 3,000 sq foot house with a view of the lake. If you have $1,000,000 in 2024, you can buy a 3,000 sq foot house with a view of a cornfield. If you have $200,000 right now, you can buy four years of college at a moderate private university. If you have $200,000 next year, you can buy three years of college at a moderate private university. Etc. This is also why bitcoin is going to keep becoming more attractive. Even at bad ev...
by magneto
Tue Jan 26, 2021 5:43 am
Forum: Investing - Theory, News & General
Topic: Adjusting Asset Allocation Based on CAPE Ratio and Market Timing
Replies: 15
Views: 1670

Re: Adjusting Asset Allocation Based on CAPE Ratio and Market Timing

If employing a 'Constant Ratio Formula Plan', as most Bogleheads likely are,
then that is a kind of value driven 'market timing',
for the investor will be found to be holding a lower number of shares when CAPE, etc is high, and vice versa.
by magneto
Sun Jan 03, 2021 10:49 am
Forum: Personal Consumer Issues
Topic: Heat pumps
Replies: 93
Views: 13574

Re: Heat pumps

This is a very relevant thread for readers here in the UK, where the gov't are intent on phasing out fossil fuel heating. The Coefficient of Performance (COP) from heat pumps, from college recall that the amount of energy got out versus the electric energy put in, can be as high as 3:1, but degrades as the temperature differential increases. So just when heat is needed most in very cold weather, performance is sub-par. Most UK heating systems are 'wet', using circulating heated water and room 'radiators' (not air ducts). Have seen suggested that with heat pumps larger 'radiators' are needed, due to lower temperature circulating water. To redesign, resize and replace the 'radiators' would be a major drawback. We have mild winter temps w sel...
by magneto
Sat Dec 26, 2020 10:57 am
Forum: Personal Consumer Issues
Topic: Heat pumps
Replies: 93
Views: 13574

Re: Heat pumps

This is a very relevant thread for readers here in the UK, where the gov't are intent on phasing out fossil fuel heating. The Coefficient of Performance (COP) from heat pumps, from college recall that the amount of energy got out versus the electric energy put in, can be as high as 3:1, but degrades as the temperature differential increases. So just when heat is needed most in very cold weather, performance is sub-par. Most UK heating systems are 'wet', using circulating heated water and room 'radiators' (not air ducts). Have seen suggested that with heat pumps larger 'radiators' are needed, due to lower temperature circulating water. To redesign, resize and replace the 'radiators' would be a major drawback. As an aside; urban concentration...
by magneto
Sun Dec 20, 2020 10:46 am
Forum: Investing - Theory, News & General
Topic: Five Year TIPS Re-opening Auction TUESDAY 12/22/2020
Replies: 9
Views: 1185

Re: Five Year TIPS Re-opening Auction TUESDAY 12/22/2020

Unlike BlackRock, an individual can likely find a direct 5 year CD at about 1.25-1.5% nominal. With that it would take 2.75-3% per year actual inflation in order for that 5 year TIPS to be worth buying. In September, Stanley Druckenmiller warned about inflation, saying it could hit 10% in coming years. I have no idea if inflation is going to get crazy like this, but that's exactly why I'm investing in TIPS, as insurance against such a possibility. Not suggesting this makes sense for other people's portfolios. But I guess I am saying people might want to make their portfolios resilient to a high inflation scenario, even if that scenario appears unlikely. Staying 50/50 nominals v TIPS here. An admission that haven't a clue about future infla...
by magneto
Sat Dec 05, 2020 10:46 am
Forum: Personal Investments
Topic: Stocks overvalued and Bonds low yields
Replies: 34
Views: 4260

Re: Stocks overvalued and Bonds low yields

With stocks overvalued It's not fully clear to me that stocks are overvalued. With interest rates at zero and FED printing money like crazy, cash/bonds is becoming both more risky and losing its value. Also in the era of zero interest rates, maybe we just need to accept that stock annual returns will be permanently lower (4%-5%) and high p/e ratios are simply a reflection of that. That being said, it's of course fully well possible that stocks are overvalued, we are in a bubble and 40% correction is in the horizon Here in UK, Bond prices are now silly. Institutions and Central Banks are obliged to buy, the private investor may eschew. But holding some US Gov't short duration Treasuries at about 5% of liquid portfolio. Stock prices seem mix...
by magneto
Mon Oct 19, 2020 11:00 am
Forum: Non-US Investing
Topic: How to NOT time the market
Replies: 21
Views: 3365

Re: How to NOT time the market

I've liquidated my portfolio before the big events of the year. The equities part was 100% VWRD (I am a non resident alien). Now the price is back to approx what it was before I've sold everything, and I'd like to get back in position. Question is: how do I buy back while limiting the risk? Considering it's a six figure amount: - Do I go and put down 6 figures on day x - Do I spread that over 100 days? - Do I spread that over months? weeks? The objective here is to limit my risk. I am also wary of the ups and downs of the upcoming election. I am much grateful for your thoughts and knowledge! Depends first on type of investor :- + Constant Ratio Formula + Variable Ratio maybe driven by valuations (wondering what was behind the initial sale?...
by magneto
Mon Oct 19, 2020 10:45 am
Forum: Investing - Theory, News & General
Topic: Does Dry Powder Work? - The White Coat Investor
Replies: 89
Views: 13156

Re: Does Dry Powder Work? - The White Coat Investor

"Does Dry Powder Work?"

Seems to depend on starting valuations.

If all Asset Classes are expensive, then waiting for normality to return may be beneficial.
If some or all Asset Classes are cheap, why bother to hold any 'dry powder' ?
by magneto
Sun Sep 27, 2020 12:50 pm
Forum: Non-US Investing
Topic: Trouble understanding yield for INXG - iShares £ Index-Linked Gilts UCITS ETF
Replies: 31
Views: 5619

Re: Trouble understanding yield for INXG - iShares £ Index-Linked Gilts UCITS ETF

A UK investor here.
Regard UK Gilts as a disaster in waiting.

Similar to above have moved into ST US Treasuries and TIPS,
and not too many of those
Currency diversification also comes into play.

Cash also doesn't look too bad while low inflation continues.
by magneto
Thu Sep 17, 2020 12:54 pm
Forum: Personal Investments
Topic: Substituting bond with RE/utility ETFs?
Replies: 46
Views: 4284

Re: Substituting bond with RE/utility ETFs?

Share the misgivings about Bonds at present pricing, following the 38 year Bond bull-market.

Meb Faber's 'Global Asset Allocation' is always worth a read or re-read.
It covers a few options, trouble is most are fully valued today.

Which leaves Cash, ready for any repeat Stocks' downturn ?
by magneto
Tue Jul 28, 2020 10:32 am
Forum: Investing - Theory, News & General
Topic: "Beware the Hype on Gold"
Replies: 170
Views: 16561

Re: "Beware the Hype on Gold"

Timely post.

Have held Gold ETFs in past for the diversification benefits but could not sleep nights.
The question constantly turning over in the mind is if the price falls do we buy or sell?

If a value investor, rather than one of the momentum crowd, we know that with Stocks it makes some sense to buy on undue weakness, sell on undue strength. That probably is not the logic behind Gold.

Without an income Gold is only worth what someone else is prepared to pay for it, so purists would not call Gold an 'investment', merely a speculation.

Frustrating nevertheless to see Gold price surge.

Have a weighting to miners, incl Gold, which at least is rising in sympathy while also producing an income.
by magneto
Thu Jul 02, 2020 12:50 pm
Forum: Investing - Theory, News & General
Topic: Is 60/40 portfolio now dead?
Replies: 22
Views: 3044

Re: Is 60/40 portfolio now dead?

Another way sometimes used for looking at Asset Allocations :-
Risk Portfolio = Stocks + Bonds + Real Estate + Commodities +
Riskless Portfolio = Cash

Looking at :-
https://www.multpl.com/10-year-treasury-rate
many investors will have long-forgotten or never experienced that Bonds are not always a fail-safe refuge.
by magneto
Thu Jul 02, 2020 6:09 am
Forum: Investing - Theory, News & General
Topic: How does a company with a quick ratio (and even current ratio) of less than 1 remain solvent?
Replies: 22
Views: 1709

Re: How does a company with a quick ratio (and even current ratio) of less than 1 remain solvent?

Current Ratio below 1.00 quite common with retailers.
Presumably because much of the goods on the shelves is effectively on credit, being sold before payment to the suppliers.
Try comparing with different retailers.
Others may have deeper understanding and whether this is a correct view.
by magneto
Thu Jun 18, 2020 8:48 am
Forum: Investing - Theory, News & General
Topic: Cash in lieu of bonds
Replies: 55
Views: 7170

Re: Cash in lieu of bonds

delamer wrote: Wed Jun 17, 2020 2:16 pm Consider this from Bill Bernstein, in response to a question on his clients’ allocation:

Dr. William Bernstein: Well, I try not to talk too much about what we do with clients--it's just a confidentiality and a privacy matter. But I've always felt that people should be taking risks on the stock side and not on the bond side. At the end of the day, there are really only two assets. There are risky assets and there are riskless assets, and then there is an exchange rate between them.
This seems to chime with Dreman approach of :-
Risk Portfolio = Stocks plus various + Bonds
Riskless = Cash
moving towards Riskless as time horizon shortens.

Don't however understand about the mentioned "exchange rate between them".
by magneto
Thu May 28, 2020 1:00 pm
Forum: Non-US Investing
Topic: 20-year-old, Investment advice [UK]
Replies: 36
Views: 2234

Re: 20-year-old, Investment advice [UK]

Fellow UK investor here. Concur with VWRL for Stocks core, or if concerned about heavy US weighting then VHYL or something other, to get that weighting down. The standard advice to hedge Bonds back to domestic currency is IMHO debatable for a UK investor. Personally noting long-term trend of GBP v USD, prefer unhedged US shorter treasuries such as provided by IBTS. The reason is that when rebalancing from Bonds back into VWRL or similar with heavy weighting of US Stocks, don't want intervening currency swings to disadvantage. Ask the question - where are the Bond monies likely to be required required next ? In mostly USD instruments or GBP instruments ? If the former then why take GBP currency risk ? If a retiree then GBP hedging might make...
by magneto
Sun May 10, 2020 10:45 am
Forum: Investing - Theory, News & General
Topic: Why no love for REITs?
Replies: 265
Views: 46465

Re: Why no love for REITs?

Post CV tenant demand seems likely to decline, as may the navs and yields.
As part of a balanced portfolio we grin and bear it.
by magneto
Sun May 10, 2020 10:42 am
Forum: Personal Investments
Topic: Investment Property
Replies: 3
Views: 525

Re: Investment Property

Would it not depend on what rest of investment portfolio looks like ?

While keen on Residential RE as an asset class, the property mentioned does not inspire undue confidence in buyer value analysis.
by magneto
Sat Apr 18, 2020 9:34 am
Forum: Personal Investments
Topic: Is it a good idea to dollar cost average $1,000,000 into stocks and bonds over the next 2 years?
Replies: 26
Views: 2575

Re: Is it a good idea to dollar cost average $1,000,000 into stocks and bonds over the next 2 years?

Assuming there is a written Investment Plan, which outlines a Stocks Target, whether Constant Ratio or Variable (valuation driven) Ratio, then this investor moves steadily towards that target at circa 10% of deviation from target per month.

This helps to maintain psychological and system balance thru any turbulence.
Investors, whether they realise it or not, are part of a control system, and in no self-respecting control system would time be ignored in the stabilising process.

The type of investment, nor speed of arrival of monies, would matter not one jot.
by magneto
Mon Apr 13, 2020 8:51 am
Forum: Personal Investments
Topic: Unhedged Foreign Bond Funds
Replies: 22
Views: 1774

Re: Unhedged Foreign Bond Funds

deleted
by magneto
Mon Apr 13, 2020 5:47 am
Forum: Personal Investments
Topic: Unhedged Foreign Bond Funds
Replies: 22
Views: 1774

Re: Unhedged Foreign Bond Funds

As a UK investor hold USD denominated Treasuries from time to time, in varying proportions.
The GBP/USD currency fluctuations tend to dominate the performance.
However quite useful to dip in and out opportunely, as one or the other currencies gets seemingly oversold/overbought.
Useful asset class for those prepared to take advantage of volatility.
For a US investor less interesting - which currency could be chosen ?
by magneto
Mon Apr 13, 2020 5:40 am
Forum: Non-US Investing
Topic: UK investor plans to retire in euro zone
Replies: 4
Views: 473

Re: UK investor plans to retire in euro zone

Perhaps try looking thru the extensive iShares Bond ETFs for a Euro or Euro hedged fund that suits.
by magneto
Sun Apr 12, 2020 10:55 am
Forum: Investing - Theory, News & General
Topic: Stock and bond diversification - Swensen quote on "Investment Principles in Practice"
Replies: 18
Views: 1978

Re: Stock and bond diversification - Swensen quote on "Investment Principles in Practice"

From a simplistic view :-
Bonds tend to show a -ve correlation (flight to safety) in the short term (cyclical)
But tend to show a +ve correlation (inflation/interest rate driven) longer term (secular)
This investor is troubled by :-
https://www.multpl.com/10-year-treasury-rate
and holding ample cash, albeit less since the stocks downturn.
maybe I worry too much about uncertainty in siding with Swensen ?
by magneto
Thu Apr 09, 2020 10:45 am
Forum: Investing - Theory, News & General
Topic: Black (White) Swan Portfolio Insurance ?
Replies: 33
Views: 2368

Re: Black Swan Portfolio Insurance ?

whodidntante wrote: Thu Apr 02, 2020 11:23 pm All asset classes with a long history have had 50%+ real drawdowns at some point. I'm more leaning towards a cash volatility buffer and the rest in stocks, bonds not really being worth the extra volatility anymore since the term premium got crushed.
+1
by magneto
Thu Apr 02, 2020 9:25 am
Forum: Investing - Theory, News & General
Topic: Investing in stocks in the current market conditions: how and when would you do it?
Replies: 83
Views: 7374

Re: Investing in stocks in the current market conditions: how and when would you do it?

Assuming there is a written Investment Plan, which outlines a Stocks Target, whether Constant Ratio or (valuation driven) Variable Ratio, then this investor moves steadily towards that target at circa 10% of deviation from target per month.

This helps to maintain psychological and system balance thru any turbulence.
Investors, whether they realise it or not, are part of a control system, and in no self-respecting control system would time be ignored in the stabilising process.
by magneto
Mon Dec 16, 2019 12:40 pm
Forum: Investing - Theory, News & General
Topic: Enhanced AA
Replies: 33
Views: 2624

Re: Assets at risk information?

If Stocks were not hitting all-time highs; would this measure be contemplated?
by magneto
Sun Oct 20, 2019 12:40 pm
Forum: Personal Finance (Not Investing)
Topic: Landlord Question
Replies: 16
Views: 2704

Re: Landlord Question

ralph124cf wrote: Sat Oct 19, 2019 10:20 pm A good tenant is golden. I typically do not raise rents for good tenants.
The frictional costs of finding a good new tenant are usually at least one months vacancy plus redecorating costs such as paint and possibly new carpet if the old one has been there five or more years, plus real estate agent fees.
The cost of getting stuck with a bad tenant are much higher.
+1
by magneto
Thu Oct 10, 2019 5:19 am
Forum: Non-US Investing
Topic: New to bonds - trying to understand [UK]
Replies: 13
Views: 1679

Re: New to bonds - trying to understand [UK]

Now my next question: Why invest in bonds in these times of record low interest rates? This is a question that have been grappling with of late. Why buy sub-inflation yields, to guarantee a loss of purchasing power over time ? Is the bond market, esp UK, an accident waiting to happen ? Just because others seek a theoretical balanced portfolio, with stocks and bonds, are we obliged to stop thinking about value and follow suit ? Have cut back our own bond holdings now to shorter duration unhedged US Gov't bonds, which are more reasonably valued using IBTS and TIP5. (adds a degree of 'currency insurance') In the UK we are presently spoilt for choice for high total return stocks, with decent yields. There is clear value on offer. Therefore rep...