Search found 3264 matches

by SimpleGift
Wed Jul 10, 2019 6:18 pm
Forum: Investing - Theory, News & General
Topic: How is "Total World Bond" (BNDW) weighting determined?
Replies: 8
Views: 834

Re: How is "Total World Bond" (BNDW) weighting determined?

According to Vanguard's website, it appears that the weighting for BNDW is currently 43% US bonds. Is this weighting similar to the Total World Stock (VT), where the weighting is determined by global market cap? I believe so. It follows the Bloomberg Barclays Global Aggregate Float Adjusted TR Inde...
by SimpleGift
Wed Jul 10, 2019 12:03 pm
Forum: Investing - Theory, News & General
Topic: De-Risking and Diversification aren't the same thing.
Replies: 45
Views: 2204

Re: De-Risking and Diversification aren't the same thing.

Ugh, that sounds like it wasn't fun to get from your "safe" assets using LTT. Especially because inflation was at double digits at the time. STT seemed to be the way to go. Total bond was a nice split the difference between the two. Hello, Pete. The diversification effect of long-term Treasuries in...
by SimpleGift
Wed Jul 10, 2019 7:59 am
Forum: Investing - Theory, News & General
Topic: [2014 Interview with] Jack Bogle: Latest Investor Trends Are Just That--Trends
Replies: 20
Views: 1024

Re: Jack Bogle: Latest Investor Trends Are Just That--Trends

About as succinct a summary of Mr. Bogle's philosophy as one can find: So, I'm straight down in the middle, capture… the interest coupons delivered by bonds, capture the dividend yields and earnings growth captured by stocks. And then forget it until you retire. For the most part, this is the core, ...
by SimpleGift
Wed Jul 10, 2019 7:31 am
Forum: Investing - Theory, News & General
Topic: De-Risking and Diversification aren't the same thing.
Replies: 45
Views: 2204

Re: De-Risking and Diversification aren't the same thing.

The OP would make a good addition to the Boglehead Wiki, I believe. The distinction between de-risking and diversification is a good one, and adds clarification to the portfolio construction discussion. It would be nice if there was a permanent page in the Wiki where one could reference these concep...
by SimpleGift
Tue Jul 09, 2019 4:12 pm
Forum: Investing - Theory, News & General
Topic: Demographics are Not Destiny (due to Automation)
Replies: 22
Views: 1928

Re: Demographics are Not Destiny (due to Automation)

So many variables can impact this demographics/automation equation and it seems hard to reliably predict where it will go in the future. Especially for stock returns. The OP research indicates a slightly positive correlation between aging populations and GDP growth per capita, which is ascribed to ...
by SimpleGift
Tue Jul 09, 2019 8:59 am
Forum: Investing - Theory, News & General
Topic: Demographics are Not Destiny (due to Automation)
Replies: 22
Views: 1928

Re: Demographics are Not Destiny (due to Automation)

Also, when this discussion comes up I always do have to point out that overall US productivity is not growing that fast right now. Everybody talks about automation, but it actually isn't progressing near as fast as it has historically. Looking up the United States in the OP studies, it scores 0.3 o...
by SimpleGift
Tue Jul 09, 2019 8:36 am
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates around the world
Replies: 6
Views: 668

Re: Safe Withdrawal Rates around the world

An excellent use of the free, international database , AlohaJoe. Thanks for the analysis. Looking at the various plots, one realizes how volatile asset returns have been in the 20th century, for both stocks and bonds. World wars, especially when they happen on your home soil, are definitely not good...
by SimpleGift
Mon Jul 08, 2019 11:05 pm
Forum: Investing - Theory, News & General
Topic: Demographics are Not Destiny (due to Automation)
Replies: 22
Views: 1928

Re: Demographics are Not Destiny (due to Automation)

If the adoption of greater automation — including both industrial and service robotics — is highly correlated with population aging (as the OP research indicates), the world appears to be in for a monumental transformation in the nature of work. To wit, this year for the first time in the history of...
by SimpleGift
Mon Jul 08, 2019 6:17 pm
Forum: Investing - Theory, News & General
Topic: Demographics are Not Destiny (due to Automation)
Replies: 22
Views: 1928

Re: Demographics are Not Destiny (due to Automation)

I guess I will need to consider my future robot caregiver in my will. :wink: Robot caregivers may not be as far off as one might think. From what I've read, the robotics market today is dominated by industrial machines (about 95% of all robots produced), the sort used to assemble cars or electrical...
by SimpleGift
Mon Jul 08, 2019 3:11 pm
Forum: Investing - Theory, News & General
Topic: Demographics are Not Destiny (due to Automation)
Replies: 22
Views: 1928

Re: Demographics are Not Destiny (due to Automation)

My takeaway is once more that it's wise to be a humble investor, own a worldwide diversified portfolio and don't act upon some vague beliefs. I agree. Reading this research reminded me of the old Mark Twain quip: “What gets us into trouble is not what we don't know. It's what we know for sure that ...
by SimpleGift
Mon Jul 08, 2019 2:11 pm
Forum: Investing - Theory, News & General
Topic: Demographics are Not Destiny (due to Automation)
Replies: 22
Views: 1928

Demographics are Not Destiny (due to Automation)

For years, it's been accepted wisdom that those countries with the most rapidly-aging populations (e.g., Japan, Germany, South Korea, soon China) would be experiencing declining economic growth, relative to those countries with generally younger workforces (like the U.S.). However, recent research i...
by SimpleGift
Sun Jul 07, 2019 6:45 pm
Forum: Investing - Theory, News & General
Topic: Corporate Default Rates
Replies: 5
Views: 628

Re: Corporate Default Rates

We don't invest in corporate bonds (as we already have plenty of equity risk in our retirement portfolio), but this was one of the more enjoyable papers to read that's been posted on the Forum in a while. Along with their empirical analysis, the authors include contemporaneous quotes from financial ...
by SimpleGift
Sun Jul 07, 2019 5:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

The percentage EM for the ALL-WORLD INDEX caught me by surprise. Interesting. Yes, it comes from a 2015 article and publication from MSCI, found here . I expect the percentage is even higher today. It's something that investors need to get used to, I believe, as emerging markets will be generating ...
by SimpleGift
Sun Jul 07, 2019 4:29 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

I would love ex-US if China and India had US-style economies where I could actually participate as an index investor, but they don't. Don't forget that domestic companies in emerging markets are not the only ones generating revenues in those countries, including China and India. Index companies in ...
by SimpleGift
Sun Jul 07, 2019 3:34 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

It is not impossible that China will move eventually from its current system of state capitalism/private equity to a free-market system relying on a properly-regulated public stock market, but do you have the time to wait for something like that to happen (if it ever does), and manifest itself in e...
by SimpleGift
Sun Jul 07, 2019 3:00 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

True, but the rising economic powers (China, India) have economic systems where you can't really tap effectively into their success by indexing their stock markets, so I don't know how indexing ex-US helps in reality. I agree, this has largely been the state of affairs, when it comes to emerging ma...
by SimpleGift
Sun Jul 07, 2019 2:10 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

Just for fun, we do have a prior example of a country whose economy dominated the world for more than a century, had the world's reserve currency, and whose stock market returns outpaced all others over that century — the United Kingdom (chart below). We can also compare the U.K. stock market return...
by SimpleGift
Sat Jul 06, 2019 8:22 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

You have to believe not so much in this GDP prediction necessarily, but more in a radical change in the nature of the economy and stock markets in those countries, and expect all that to happen within the fairly short time frame of very few decades when it could benefit you. Yes, but again the poin...
by SimpleGift
Sat Jul 06, 2019 8:02 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

It might be nitpicking, but do you believe that an all-U.S. portfolio will only at least match ex-U.S. in "just one possible future?" It's possible, but the point is we don't know. In the face of ignorance about the future, the most prudent course for a passive index investor is to spread one's bet...
by SimpleGift
Sat Jul 06, 2019 7:39 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

I'm extremely skeptical of economic projections 30 years into the future. Economists aren't very good at predicting what will happen next quarter, and I don't believe that the addition of multiple decades will improve their accuracy. The point of the post is not that the economic forecasts are accu...
by SimpleGift
Sat Jul 06, 2019 7:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Historical Imperative For International Diversification
Replies: 347
Views: 16275

Re: Larry Swedroe: The Historical Imperative For International Diversification

I have not seen a clear explanation, and certainly none that explain why the benefit hasn't manifested itself in the past for such an awfully long time, but will suddenly appear in a future time frame that's relevant to us. The U.S. stock market had a remarkable run in the 20th century, especially ...
by SimpleGift
Sat Jul 06, 2019 5:36 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2146

Re: It's All About the Earnings Growth

Labor's share of income has been declining for a while now, meaning that profits are fatter. This appears to be a structural change in the economy, not limited to the United States. Likely it is a consequence of globalization and automation. I would expect it to continue, if not accelerate. Unfortu...
by SimpleGift
Sat Jul 06, 2019 1:10 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2146

Re: It's All About the Earnings Growth

Since a large amount of earnings for US companies come from international markets, it would be interesting to break out where the earnings growth comes from with US firms or vice versa. There isn't freely-available data on foreign sources of earnings for U.S. indexes (as best I know), but Morningst...
by SimpleGift
Sat Jul 06, 2019 9:17 am
Forum: Investing - Theory, News & General
Topic: Relative Importance Of Factor Investing
Replies: 15
Views: 896

Re: Relative Importance Of Factor Investing

What Ang is saying is the MACRO factors explain most of the ABSOLUTE level of returns, vs the variation of returns between diversified portfolios which is explained by market beta, size, value, momentum and quality. For us visual types, Mr. Ang included the chart below in a BlackRock marketing publ...
by SimpleGift
Sat Jul 06, 2019 1:07 am
Forum: Investing - Theory, News & General
Topic: Relative Importance Of Factor Investing
Replies: 15
Views: 896

Re: Relative Importance Of Factor Investing

Fascinating interview with Mr. Ang (full transcript here ). Thank you for posting it. If GDP growth, inflation and real interest rates explain 85% of market returns (according to Mr. Ang), then all of the voluminous research and discussion about style factor premiums in recent years would appear to ...
by SimpleGift
Fri Jul 05, 2019 11:43 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2146

Re: It's All About the Earnings Growth

What happened in the end of 2015 or beginning of 2016 that changed the economy/earnings for the better and drove the market higher? Apparently, GDP growth collapsed in the last half of 2015 (chart below), not only in the U.S. but eventually internationally as well. A steady recovery starting in 201...
by SimpleGift
Fri Jul 05, 2019 8:26 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2146

Re: It's All About the Earnings Growth

The author estimated that the earnings in the US have been systematically overstated by roughly 25% due to those historical costs accounting issues, although this has been trending down in recent decades. Ah, finally found your reference in one of the appendices (page 105). Just for the record, the...
by SimpleGift
Fri Jul 05, 2019 3:49 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2146

Re: It's All About the Earnings Growth

Proponents of US only allocations will use this as proof that US companies are superior and international stocks can’t compete. Proponents of international allocations will use this as proof that international companies have more room for profit growth and will have higher returns vs US stocks.. We...
by SimpleGift
Fri Jul 05, 2019 1:25 pm
Forum: Investing - Theory, News & General
Topic: It's All About the Earnings Growth
Replies: 19
Views: 2146

It's All About the Earnings Growth

This week, J.P. Morgan published the latest update to their quarterly chartbook, and the first one I usually check out is their graph of global earnings-per-share growth (below), comparing the U.S., Europe, Japan and Emerging Markets since 2006. It's not hard to see why the U.S. market has generally...
by SimpleGift
Thu Jul 04, 2019 2:35 pm
Forum: Investing - Theory, News & General
Topic: Japan and PE Ratio
Replies: 14
Views: 1176

Re: Japan and PE Ratio

Just to add some perspective on the magnitude of the 1990 Japanese bubble, compared with the 2000 Tech Bubble that many of us experienced firsthand (chart below): https://i.imgur.com/2PFkp2J.png Note: Chart shows CAPE 10 values, lined up so the two bubbles are synchronized. Source: Meb Faber I guess...
by SimpleGift
Thu Jul 04, 2019 12:45 pm
Forum: Investing - Theory, News & General
Topic: Japan and PE Ratio
Replies: 14
Views: 1176

Re: Japan and PE Ratio

Again, if this chart is true, the risk of a Japanese Lost Decade in the United States, unless we see the P/E rise to unimaginable levels in a sustained way ( a la 1999), is close to zero--assuming the general intuition about P/E having some merit is correct. I believe your intuition is correct. Wha...
by SimpleGift
Thu Jul 04, 2019 11:20 am
Forum: Investing - Theory, News & General
Topic: How do you brace for impact?
Replies: 65
Views: 5762

Re: How do you brace for impact?

As a matter of principle, I steer clear of prophets who are in the business of predicting of the next economic crisis. However, many of the news sources I consume suggest it is not a matter of IF an economic downturn will happen, but WHEN. ... Perhaps this is like being in an airplane -- it seldom ...
by SimpleGift
Wed Jul 03, 2019 8:30 pm
Forum: Investing - Theory, News & General
Topic: The Stock-Bond Correlation vs. Inflation, 1890-2015
Replies: 9
Views: 552

Re: Stock-Bond Correlation vs. Inflation, 1890-2015

I challenge your premise that "Boglehead-type portfolios are constructed with a strong reliance on and an expectation for a negative correlation between stocks and bonds." Your point is well taken, nisiprius. Beyond those that invoke a persistent, negative stock-bond correlation to invest in very l...
by SimpleGift
Wed Jul 03, 2019 6:34 pm
Forum: Investing - Theory, News & General
Topic: The Stock-Bond Correlation vs. Inflation, 1890-2015
Replies: 9
Views: 552

Re: Stock-Bond Correlation vs. Inflation, 1890-2015

Unfortunately, 5, or 10, years are substantial length of time for an individual investor. To separate the signal from the noise, when the time frame is several decades, many charts of correlation between assets will use something like 3-, or 5-, or 7-year rolling correlations. Since the time frame ...
by SimpleGift
Wed Jul 03, 2019 5:39 pm
Forum: Investing - Theory, News & General
Topic: The Stock-Bond Correlation vs. Inflation, 1890-2015
Replies: 9
Views: 552

Re: Stock-Bond Correlation vs. Inflation, 1890-2015

Thesaints wrote:
Wed Jul 03, 2019 5:32 pm
The correlation is calculated over which time span ?
The correlation of the annual total returns of stock and bonds (nominal) over rolling 10-year periods is shown by the blue line — just to smooth the presentation of the century plus of data. Sorry, I don't know how to make this clearer.
by SimpleGift
Wed Jul 03, 2019 5:25 pm
Forum: Investing - Theory, News & General
Topic: The Stock-Bond Correlation vs. Inflation, 1890-2015
Replies: 9
Views: 552

Re: Stock-Bond Correlation vs. Inflation, 1890-2015

Thesaints wrote:
Wed Jul 03, 2019 5:23 pm
On a side note, not sure which correlation (time frame ?) is displayed. Legend says "Chart shows 10-year rolling averages of total nominal stock and bond returns" ??
The chart shows rolling, 10-year averages of annual returns — if that's what you're asking.
by SimpleGift
Wed Jul 03, 2019 5:14 pm
Forum: Investing - Theory, News & General
Topic: The Stock-Bond Correlation vs. Inflation, 1890-2015
Replies: 9
Views: 552

The Stock-Bond Correlation vs. Inflation, 1890-2015

The vast majority of our passive, Boglehead-type portfolios are constructed with a strong reliance on and an expectation for a negative correlation between stocks and bonds — i.e., that high-quality bonds will effectively hedge against periods of stress and uncertainty in the equity markets. In a re...
by SimpleGift
Tue Jul 02, 2019 11:37 am
Forum: Investing - Theory, News & General
Topic: Warren Buffett Remembers Vanguard Founder Jack Bogle
Replies: 4
Views: 792

Re: Warren Buffett Remembers Vanguard Founder Jack Bogle

“Jack did more for American investors as a whole than any individual I’ve known,” Buffett told CNBC. “A lot of Wall Street is devoted to charging a lot for nothing. He charged nothing to accomplish a huge amount.” An article published shortly after Mr. Bogle's death estimated that he saved ordinary...
by SimpleGift
Tue Jul 02, 2019 9:11 am
Forum: Investing - Theory, News & General
Topic: Is anyone else worried about tech becoming too big/overvalued?
Replies: 54
Views: 4207

Re: Is anyone else worried about tech becoming too big/overvalued?

Is anyone else worried about this? I own mutual funds for both the Total Stock Market Index and the S&P 500 Index, and given how much these few companies dominate those indexes, I wonder how smart it is, in this environment, to keep contributing to those funds. The conundrum for investors in a grow...
by SimpleGift
Mon Jul 01, 2019 7:49 am
Forum: Investing - Theory, News & General
Topic: U.S. Stock Market: Too Concentrated at the Top?
Replies: 19
Views: 1816

Re: U.S. Stock Market: Too Concentrated at the Top?

Thank you, JoMoney. It's remarkable to contemplate that in 1950 the 10 largest S&P 500 companies made up 51% of the index (!) — and the market has been getting generally less-concentrated at the top ever since. This is a deeper history of the index that I hadn't been able to find and wasn't aware of...
by SimpleGift
Sun Jun 30, 2019 7:05 pm
Forum: Investing - Theory, News & General
Topic: U.S. Stock Market: Too Concentrated at the Top?
Replies: 19
Views: 1816

Re: U.S. Stock Market: Too Concentrated at the Top?

I agree that the answer is interesting and worthy of consideration. But I'm not convinced that defining 'the top' as five or ten companies is most appropriate. Actually, you make a good point — if one is allowed to deprecate their own OP ( :wink:). Just looking at the historical weightings of the t...
by SimpleGift
Sun Jun 30, 2019 5:48 pm
Forum: Investing - Theory, News & General
Topic: U.S. Stock Market: Too Concentrated at the Top?
Replies: 19
Views: 1816

U.S. Stock Market: Too Concentrated at the Top?

With all the attention in the financial press these days to the dominance of the FAANG stocks and the decline in the number of publicly-listed U.S. companies, one might wonder: Is the market weight of the top companies today more concentrated than it has been historically? Last week, a fellow chart ...
by SimpleGift
Sat Jun 29, 2019 11:11 am
Forum: Investing - Theory, News & General
Topic: Simplicity (Three Fund) vs. Return (Slightly more complex):
Replies: 45
Views: 3134

Re: Simplicity (Three Fund) vs. Return (Slightly more complex):

How do others determine the degree to which simplicity and returns interact? Seeking higher returns seems a dubious reason for diversifying one's equities beyond the simple three-fund portfolio, in my view. Diversifying to reduce risk (portfolio variance) seems more justifiable. In our case, after ...
by SimpleGift
Fri Jun 28, 2019 11:21 pm
Forum: Non-US Investing
Topic: Study: The Rate of Return on Everything, 1870-2015
Replies: 185
Views: 33368

Re: Study: The Rate of Return on Everything, 1870-2015

Still, it is fascinating to see the very distinct trajectories of the three lines between the various countries. Great work by the blogger, and thank you for posting it. What's striking (and a bit surprising) is that, of the 14 countries whose asset returns were charted, only three countries — the ...
by SimpleGift
Fri Jun 28, 2019 10:35 pm
Forum: Investing - Theory, News & General
Topic: The Best of Strategies for the Worst of Times: Can Portfolios be Crisis Proofed?
Replies: 21
Views: 2488

Re: The Best of Strategies for the Worst of Times: Can Portfolios be Crisis Proofed?

From the paper linked in the OP: A strategy that holds long positions in 10- year US Treasuries performed well in the post-2000 equity drawdowns, but was less effective during previous equity sell-offs. This is consistent with the negative bond-equity correlation witnessed post-2000, which is atypic...
by SimpleGift
Sat Jun 15, 2019 4:51 pm
Forum: Investing - Theory, News & General
Topic: good example US vs UK returns
Replies: 20
Views: 1714

Re: good example US vs UK returns

Valuethinker wrote:
Sat Jun 15, 2019 4:00 pm
That graph must be mislabelled.

OR it is in nominal not real terms.
Yes, it's nominal, as stated in the note below the chart: "10-year average of total nominal returns, in local currency."
by SimpleGift
Sat Jun 15, 2019 12:57 pm
Forum: Investing - Theory, News & General
Topic: good example US vs UK returns
Replies: 20
Views: 1714

Re: good example US vs UK returns

Knowing historical evidence helps to avoid the biases such as home country and recency. Just to bolster Larry's historical comparison of the US and UK markets with a good chart! (discussed in more detail in this thread ). Going back to 1910, the US market outperformed in the post World War I & II p...
by SimpleGift
Fri Jun 14, 2019 5:25 pm
Forum: Investing - Theory, News & General
Topic: Stocks/Bond Allocation Based on Buffet Indicator?
Replies: 18
Views: 1765

Re: Stocks/Bond Allocation Based on Buffet Indicator?

Is a Stocks/Bonds evaluation based on Buffet indicator logical? The Buffett indicator (ratio of U.S. market cap to U.S. GDP) may have made some sense 50 years ago, when large U.S. companies were more domestically-oriented. But S&P 500 companies today generate nearly 40% of their revenues overseas. ...
by SimpleGift
Fri Jun 14, 2019 2:47 pm
Forum: Investing - Theory, News & General
Topic: Correlation vs. Differential of Asset Returns
Replies: 4
Views: 336

Re: Correlation vs. Differential of Asset Returns

I don't see how you can get a diversification benefit unless you are really good at foretelling the future. The whole point of diversifying one's portfolio assets — whether across classes, factors, sources of return, etc. — is that we can't foretell the future. So the primary benefit of diversifica...