Search found 2690 matches

by SimpleGift
Thu Jan 11, 2018 12:52 pm
Forum: Investing - Theory, News & General
Topic: REGISTRATION FOR 2018 BOGLEHEAD CONTEST
Replies: 141
Views: 8167

Re: REGISTRATION FOR 2018 BOGLEHEAD CONTEST

Now that the registration period for the 2018 Boglehead Contest is closed, we can display the frequency distribution of the final entries in a histogram chart: https://s18.postimg.org/smdyn2kfd/Boglehead_Chart_FINAL.jpg NOTE: Several outlier forecasts were not included in the chart, both high and lo...
by SimpleGift
Wed Jan 10, 2018 11:51 pm
Forum: Investing - Theory, News & General
Topic: 2017 Callan Periodic Table of Investment Returns
Replies: 34
Views: 4030

Re: 2017 Callan Periodic Table of Investment Returns

One useful pattern, in my view, is to align each year on the S&P 500 return [...] That's a cool idea, SimpleGift. It would be interesting to have a tool allowing to generate a similar chart with an arbitrary portfolio of reference (kind of generalizing your idea of using S&P 500 as an anchor). Yes,...
by SimpleGift
Wed Jan 10, 2018 7:59 pm
Forum: Investing - Theory, News & General
Topic: How diversified are you really with cap weighted foreign markets?
Replies: 37
Views: 1991

Re: How diversified are you really with cap weighted foreign markets?

So..... what you are pointing out is that the U.S. total market cap-weighted index is shockingly undiversified too, yes? You buy the haystack and then find out that it's only a few straws in there that are accounting for most of it. This is crazy talk. These funds are far from un-diversified: • Van...
by SimpleGift
Wed Jan 10, 2018 1:11 pm
Forum: Investing - Theory, News & General
Topic: How diversified are you really with cap weighted foreign markets?
Replies: 37
Views: 1991

Re: How diversified are you really with cap weighted foreign markets?

These are two sectors that tend to be concentrated in few companies and few countries in the international ex-U.S. cap weighted index. Not sure the point you're trying to make in this thread. Yes, single-country funds are often concentrated in a few companies and industry sectors. Individual sector...
by SimpleGift
Wed Jan 10, 2018 1:34 am
Forum: Investing - Theory, News & General
Topic: How diversified are you really with cap weighted foreign markets?
Replies: 37
Views: 1991

Re: How diversified are you really with cap weighted foreign markets?

Holding a foreign cap weighted index fund doesn't give you as much diversification as you thought. Your post and thread title should be edited to read: "How diversified are you with single-country , cap-weighted foreign markets?" Beyond the U.S. market, why would a U.S. investor limit themselves to...
by SimpleGift
Mon Jan 08, 2018 10:44 am
Forum: Investing - Theory, News & General
Topic: Contemplating a sector bet: India
Replies: 17
Views: 1536

Re: Contemplating a sector bet: India

I must say the comments about PE give me pause; which of course is why I posted. If one is patient, though, it does seem that emerging market stocks — including India stocks — regularly go on sale every few years (red arrows below), providing more reasonable buying opportunities for the long-term i...
by SimpleGift
Sun Jan 07, 2018 11:04 pm
Forum: Investing - Theory, News & General
Topic: Contemplating a sector bet: India
Replies: 17
Views: 1536

Re: Contemplating a sector bet: India

No special expertise on investing in India, but it may be worth considering that because India is now one of the fastest-growing major economies in the world, it's received a lot of attention in the financial press around the world. As a consequence, India's stock valuations have been bid up to fair...
by SimpleGift
Sun Jan 07, 2018 2:32 pm
Forum: Investing - Theory, News & General
Topic: Recessions in the USA (list) - Where are we now? Actionable Steps?
Replies: 31
Views: 2476

Re: Recessions in the USA (list) - Where are we now? Actionable Steps?

1) Where are we now? When it comes to recessions, it's almost impossible to tell "where we are now." As pointed out upthread, even the government agency that's the official arbiter of recessions can't determine whether we are in a recession or not until after the fact. But it can be instructive to ...
by SimpleGift
Sun Jan 07, 2018 12:54 pm
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Re: Does the S&P 500 Grow Faster Than the Economy?

Yes, imprecise wording on my part — Maybe the thread title is also imprecisely worded. Are you asking if the S&P 500 price index grows faster than GDP or if the S&P 500 total return index grows faster than GDP? The price index measures the market's growth. The total return index measures the growth...
by SimpleGift
Sun Jan 07, 2018 12:15 pm
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Re: Does the S&P 500 Grow Faster Than the Economy?

Wow. No wonder why Jeremy Siegel likes reinvested dividends so much. Two questions. 1) Does dividends reinvested count share buybacks? No. My understanding is that share buybacks are reflected in the increased growth rate of EPS (in red on the OP chart), since as the number of shares outstanding ar...
by SimpleGift
Sun Jan 07, 2018 11:43 am
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Re: Does the S&P 500 Grow Faster Than the Economy?

3) Nearly the entire difference between market's long-term historical price growth (1.9%, in yellow) and its total return growth (6.3%, in green) is due to the compounding effect of reinvested dividends! 6.3% is not the market's growth rate. The market cannot reinvest dividends. The market already ...
by SimpleGift
Sun Jan 07, 2018 1:46 am
Forum: Investing - Theory, News & General
Topic: CAPE Fear: Why CAPE Naysayers Are Wrong
Replies: 109
Views: 8375

Re: CAPE Fear: Why CAPE Naysayers Are Wrong

Any comments? For those committed to a heavy US presence in equities, can this information be discounted ? A good article, which nicely summarizes many of the issues surrounding the CAPE metric today — though the article does seem to ramble all over the waterfront on a multitude of CAPE-related top...
by SimpleGift
Sat Jan 06, 2018 11:34 pm
Forum: Investing - Theory, News & General
Topic: 2017 Callan Periodic Table of Investment Returns
Replies: 34
Views: 4030

Re: 2017 Callan Periodic Table of Investment Returns

I stare at it and stare at it, wishing I could figure out the pattern... One useful pattern, in my view, is to align each year on the S&P 500 return (in olive below). At a glance, one can then tell when a slice-and-dice diversified portfolio is paying off (i.e., when most of the boxes are above the...
by SimpleGift
Sat Jan 06, 2018 6:59 pm
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Re: Does the S&P 500 Grow Faster Than the Economy?

Just to add: If interested in testing the impact of reinvested dividends on S&P 500 Index returns, this online calculator allows one to quickly select any historical period back to 1871, and reports both nominal and inflation-adjusted returns. If you make periodic investments, they also have another...
by SimpleGift
Sat Jan 06, 2018 4:25 pm
Forum: Investing - Theory, News & General
Topic: Corporate bonds vs. Treasuries
Replies: 52
Views: 4181

Re: Corporate bonds vs. Treasuries

We just went through this process ourselves, upgrading the quality of our bond portfolio to include a much greater allocation to Treasuries. The best research on this I've seen is this paper , which indicates that the spread between investment-grade corporate bonds and Treasuries can be broken down ...
by SimpleGift
Sat Jan 06, 2018 12:41 pm
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Re: Does the S&P 500 Grow Faster Than the Economy?

Wasn’t this basically Picketty’s thesis in Capital in the 21st Century? I think the idea was that the return on capital tends to be greater than underlying growth and this tends to naturally concentrate wealth over time with things getting reset periodically with economic crises and wars and such. ...
by SimpleGift
Sat Jan 06, 2018 9:59 am
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Re: Does the S&P 500 Grow Faster Than the Economy?

Also, since the dividend payout was much larger until the 50's, does it mean the market outpaced the GDP growth more than nowadays ? To see if the "modern era" of lower dividend yields, share buybacks and increasing foreign earnings has been any different than the previous era, this chart looks at ...
by SimpleGift
Sat Jan 06, 2018 3:38 am
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2913

Does the S&P 500 Grow Faster Than the Economy?

A rather complex question, but with a very simple answer, I believe. This post is going to focus solely on the simple answer — plus its vital significance for the individual investor — and leave all of the other complexities of the question to any comments and discussion that may follow. And the sim...
by SimpleGift
Sat Jan 06, 2018 12:06 am
Forum: Investing - Theory, News & General
Topic: Are Robo-Investors driving the market to insane levels?
Replies: 36
Views: 5158

Re: Are Robo-Investors driving the market to insane levels?

The pace at which the indices are rising without a real logical reason behind this kind of growth makes me wonder if the robots that place trades these days are responsible for this kind of skewed performance? The logical reason is that corporate earnings in all regions of the world have been growi...
by SimpleGift
Fri Jan 05, 2018 5:08 pm
Forum: Investing - Theory, News & General
Topic: Definition of “bond bubble”
Replies: 20
Views: 1516

Re: Definition of “bond bubble”

It doesn't have to be very temporary. A graph from this thread on this very forum shows the terrible real returns on intermediate-term bonds during the middle of the 20th century. Historical data suggests that real interest rates generally move in line with the trend rate of real GDP growth (chart ...
by SimpleGift
Fri Jan 05, 2018 4:30 pm
Forum: Investing - Theory, News & General
Topic: Definition of “bond bubble”
Replies: 20
Views: 1516

Re: Definition of “bond bubble”

Interesting thread & posts. But I'm a bit confused as to what is really being said. As I read through, I got the impression that some feel a "bubble" can NOT happen in the case of bonds....I'd like to hear some drill down on whether posters are addressing (1) both individual bonds & bond funds & (2...
by SimpleGift
Fri Jan 05, 2018 7:19 am
Forum: Investing - Theory, News & General
Topic: Hypothetical question: Will a man who lives forever own the world?
Replies: 23
Views: 1595

Re: Hypothetical question: Will a man who lives forever own the world?

This question is closely related to the question: How is it possible that the average growth of stocks is higher than the average GDP growth of a country? One way I've seen this paradox explained: Equity growth in excess of GDP growth is usually calculated on a total return basis — that is, it assu...
by SimpleGift
Fri Jan 05, 2018 5:28 am
Forum: Investing - Theory, News & General
Topic: REGISTRATION FOR 2018 BOGLEHEAD CONTEST
Replies: 141
Views: 8167

Re: REGISTRATION FOR 2018 BOGLEHEAD CONTEST

Since we are about halfway through the Contest registration period, with 354 entries as of this afternoon (1/4/18), it seemed worthwhile to look at a histogram chart of all the entries so far (plus I'm learning how to do frequency distributions): https://s18.postimg.org/oe0aoee0p/Contest_Chart.jpg N...
by SimpleGift
Fri Jan 05, 2018 12:16 am
Forum: Investing - Theory, News & General
Topic: Definition of “bond bubble”
Replies: 20
Views: 1516

Re: Definition of “bond bubble”

I have a hard time getting my head around a bond bubble. Agree. For bond investors who are in it for the long haul, the worst case scenario would seem to be that real interest rates do NOT rise in the coming years and that rates stay at or near their historic lows for decades to come. It would seem...
by SimpleGift
Thu Jan 04, 2018 7:13 pm
Forum: Investing - Theory, News & General
Topic: Definition of “bond bubble”
Replies: 20
Views: 1516

Re: Definition of “bond bubble”

Yes, I believe you've got it mostly right. One commentator who has been consistently opining about a "bond bubble" is Alan Greenspan — and this is how he described it in an August 2017 interview with Bloomberg: “By any measure, real long-term interest rates are much too low and therefore unsustainab...
by SimpleGift
Thu Jan 04, 2018 5:39 pm
Forum: Investing - Theory, News & General
Topic: Chart: 2018 Bogleheads Contest Entries (so far)
Replies: 1
Views: 268

Chart: 2018 Bogleheads Contest Entries (so far)

Was learning how to do frequency distributions in a Mac Numbers spreadsheet this week, and as a practice exercise, I thought I'd make a histogram chart of all the entries so far in the 2018 Bogleheads Contest: https://s18.postimg.org/oe0aoee0p/Contest_Chart.jpg Note: Two outlier forecasts were not i...
by SimpleGift
Wed Jan 03, 2018 11:11 pm
Forum: Investing - Theory, News & General
Topic: Did everyone in the early 80s have their money in CDs?
Replies: 77
Views: 6137

Re: Did everyone in the early 80s have their money in CDs?

One aspect that hasn't been mentioned so far in this thread is that real returns on cash and CDs in the 1980s were actually quite high (chart below). Though inflation dropped precipitously soon after 1980, investors were still spooked and wary about inflation's return, so interest rates on all fixed...
by SimpleGift
Wed Jan 03, 2018 6:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Returns To Value Strategies WhenValuation Spreads Are Wide (Deep Value)
Replies: 8
Views: 1256

Re: Larry Swedroe: The Returns To Value Strategies WhenValuation Spreads Are Wide (Deep Value)

fennewaldaj wrote:
Wed Jan 03, 2018 5:24 pm
What do the decimals in the chart indicate?
The vertical scale is simply the value and growth price indexes, respectively, divided by the S&P 500 price index. By definition, these two values should always add up to 100% on this chart.
by SimpleGift
Wed Jan 03, 2018 4:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Returns To Value Strategies WhenValuation Spreads Are Wide (Deep Value)
Replies: 8
Views: 1256

Re: Larry Swedroe: The Returns To Value Strategies WhenValuation Spreads Are Wide (Deep Value)

Not sure if we are close to a "deep value episode" as defined by the study's authors, but the performance spread between value and growth stocks, relative to the S&P 500, is as large as it's been since the peak of the 2000 Tech Bubble (chart below). https://s18.postimg.org/vmosg9zmx/Untitled.jpg Sou...
by SimpleGift
Tue Jan 02, 2018 5:51 pm
Forum: Investing - Theory, News & General
Topic: Stocks for the Long Run by Jeremy Siegel
Replies: 11
Views: 1430

Re: Stocks for the Long Run by Jeremy Siegel

Would you recommend this book? Definitely, yes. A most essential step for any equity investor, in my view, is developing a strong faith in the resilience, dynamism and adaptability of global capitalism — i.e., that corporate enterprise will be able to overcome the world challenges in the decades ah...
by SimpleGift
Thu Dec 28, 2017 10:52 am
Forum: Investing - Theory, News & General
Topic: Stock prices -- Are they only dependent on how much people are willing to pay and how much they are willing to hold?
Replies: 20
Views: 1585

Re: Stock prices -- Are they only dependent on how much people are willing to pay and how much they are willing to hold?

The value of an income-producing asset, such as a stock, a bond or a commercial real estate property, can be calculated as the discounted present value of its future income stream. Granted, many stocks do not have current earnings or produce dividends — but any stock price above zero suggests that ...
by SimpleGift
Thu Dec 28, 2017 12:59 am
Forum: Investing - Theory, News & General
Topic: Stock prices -- Are they only dependent on how much people are willing to pay and how much they are willing to hold?
Replies: 20
Views: 1585

Re: Stock prices -- Are they only dependent on how much people are willing to pay and how much they are willing to hold?

Are stock prices based on any other value? The value of an income-producing asset, such as a stock, a bond or a commercial real estate property, can be calculated as the discounted present value of its future income stream. Granted, many stocks do not have current earnings or produce dividends — bu...
by SimpleGift
Sat Dec 23, 2017 11:18 pm
Forum: Personal Finance (Not Investing)
Topic: Will you donate less to Charity?
Replies: 107
Views: 6898

Re: Will you donate less to Charity?

It seems many of you are trying to get DAFs and contributions going here at the end of 2017, but does that mean less giving to charities over the next few years? Have you thought about that? Since we have "enough" in retirement and our portfolio is nearly all taxable, we rebalance by donating appre...
by SimpleGift
Sat Dec 23, 2017 3:53 pm
Forum: Investing - Theory, News & General
Topic: The extended bull market
Replies: 53
Views: 4214

Re: The extended bull market

If any of us has literary aspirations, he/she should channel Samuel Beckett and write a play named "Waiting for the Crash". Ha, there does seem to be quite a bit of anxiety among Forum posters around the current bull market, and "Waiting for the Crash" seems a common sentiment — even though none of...
by SimpleGift
Fri Dec 22, 2017 11:48 pm
Forum: Investing - Theory, News & General
Topic: Early retirement pros and cons:
Replies: 58
Views: 6733

Re: Early retirement pros and cons:

Is early retirement a common goal for people posting here? There's a difference between financial independence and early retirement — and I'm not sure exactly which one you're asking about. In our case, we were able to sell a business while in our 50s and become financially independent. This led no...
by SimpleGift
Thu Dec 21, 2017 11:28 pm
Forum: Investing - Theory, News & General
Topic: Speculation
Replies: 16
Views: 1336

Re: Speculation

The problem with trying to define non-income producing assets as investments is that there is no way to independently establish a financial value for them, beyond what someone is willing to pay for them. With income-producing assets, such as a stock, a bond or a commercial real estate property, one ...
by SimpleGift
Thu Dec 21, 2017 6:40 pm
Forum: Investing - Theory, News & General
Topic: Holiday Chart — S&P 500 Price & Earnings, 1990-2017
Replies: 13
Views: 1597

Re: Holiday Chart — S&P 500 Price & Earnings, 1990-2017

Though never impressed with stock analysts' consensus forecasts of future S&P 500 earnings (as these estimates always seem to start out sky high, then get continually downgraded as the year progresses), it's worth noting that the earnings squiggles for 2018-2019 are either going sideways or being up...
by SimpleGift
Thu Dec 21, 2017 11:04 am
Forum: Investing - Theory, News & General
Topic: Speculation
Replies: 16
Views: 1336

Re: Speculation

Many recent threads relating to bitcoin refer to participating in it as "speculation", not an investment. One of the definitions of speculation is "investment in stocks, property, or other ventures in the hope of gain but with the risk of loss". In the extreme, this could apply to equity/bond index...
by SimpleGift
Thu Dec 21, 2017 10:53 am
Forum: Investing - Theory, News & General
Topic: Speculation
Replies: 16
Views: 1336

Re: Speculation

Many recent threads relating to bitcoin refer to participating in it as "speculation", not an investment. One of the definitions of speculation is "investment in stocks, property, or other ventures in the hope of gain but with the risk of loss". In the extreme, this could apply to equity/bond index...
by SimpleGift
Thu Dec 21, 2017 10:40 am
Forum: Investing - Theory, News & General
Topic: Best way to fund your Donor Advised Fund
Replies: 38
Views: 2932

Re: Best way to fund your Donor Advised Fund

Since we are in the fortunate position of having "enough" in retirement, and our portfolio is nearly all taxable, we no longer sell appreciated equities to rebalance within our portfolio (and pay capital gains taxes), but rebalance directly to our Vanguard Donor Advised Fund, as charitable contribut...
by SimpleGift
Wed Dec 20, 2017 6:33 pm
Forum: Investing - Theory, News & General
Topic: Holiday Chart — S&P 500 Price & Earnings, 1990-2017
Replies: 13
Views: 1597

Re: Holiday Chart — S&P 500 Price & Earnings, 1990-2017

Thanks for this interesting chart. If I'm not mistaken, it's a different representation of the same data in your recent thread . You're most welcome. Yes, it's the same data, but that thread was looking specifically at how much of the market's price increases in recent years was due to earnings gro...
by SimpleGift
Wed Dec 20, 2017 5:28 pm
Forum: Investing - Theory, News & General
Topic: Holiday Chart — S&P 500 Price & Earnings, 1990-2017
Replies: 13
Views: 1597

Re: Holiday Chart — S&P 500 Price & Earnings, 1990-2017

Share buybacks have accelerated massively since the passage of the US tax act became likely. Share buybacks will maintain EPS momentum for a while to come. US public firms continue to raise debt (or spend cash) and reduce equity. The LBO industry represents another way of doing this (when done on p...
by SimpleGift
Wed Dec 20, 2017 2:48 pm
Forum: Investing - Theory, News & General
Topic: Holiday Chart — S&P 500 Price & Earnings, 1990-2017
Replies: 13
Views: 1597

Holiday Chart — S&P 500 Price & Earnings, 1990-2017

My avatar doesn't lend itself to holiday decoration, so I'm inspired to offer the Forum a holiday chart instead, as a thank you for all I've learned here this year. Shown below are the annual S&P 500 end-of-year prices and operating earnings for the 1990-2017 period. These values are charted at a P/...
by SimpleGift
Wed Dec 20, 2017 5:00 am
Forum: Investing - Theory, News & General
Topic: AQR: The Illusion of Active Fixed Income Diversification
Replies: 4
Views: 729

Re: AQR: The Illusion of Active Fixed Income Diversification

Interesting analysis, thanks for posting it. Reading this paper, though, I couldn't help but feel it is just a long-winded way of saying that, since the passive index is now dominated by low-yielding U.S. Treasury and agency bonds (chart below), it's been easy for active bond managers to outperform ...
by SimpleGift
Tue Dec 19, 2017 4:45 pm
Forum: Investing - Theory, News & General
Topic: What exactly happened in Japan...and can it happen here?
Replies: 39
Views: 7426

Re: What exactly happened in Japan...and can it happen here?

Any market is capable of performing in a mathematically similar way to the Japanese stock market if expectations and prices rise to such a level that a subsequent crash leads to overly pessimistic expectations and a long period of low prices. True. But inflated stock prices were only part of the st...
by SimpleGift
Mon Dec 18, 2017 7:51 pm
Forum: Investing - Theory, News & General
Topic: Where do you read financial news?
Replies: 39
Views: 3597

Re: Where do you read financial news?

Where do you guys read financial news everyday? Any good sources you recommend? The Financial Times. A digital subscription is a bit expensive (~$275 per year), but I find it has just the right balance of U.S. news, global developments, and even reports on interesting academic studies now and then....
by SimpleGift
Mon Dec 18, 2017 6:19 pm
Forum: Investing - Theory, News & General
Topic: What exactly happened in Japan...and can it happen here?
Replies: 39
Views: 7426

Re: What exactly happened in Japan...and can it happen here?

One of the most significant things that happened in Japan was, due to their population aging, their working-age population (ages 15-64) started declining in about 1995 — and has been shrinking every year since (chart below). Soon to follow along this trend was the European Union in 2010, with China ...
by SimpleGift
Mon Dec 18, 2017 2:19 pm
Forum: Investing - Theory, News & General
Topic: Investing in "Frontier" Markets
Replies: 22
Views: 1625

Re: Investing in "Frontier" Markets

It seems if there ever was an asset class where active managers might excel, it would be in frontier markets. Active managers would be able to avoid the country and sector concentrations that hamper the free-float market cap indexes, plus take advantage of the high dispersion between the best and wo...
by SimpleGift
Mon Dec 18, 2017 12:48 am
Forum: Investing - Theory, News & General
Topic: Investing in "Frontier" Markets
Replies: 22
Views: 1625

Re: Investing in "Frontier" Markets

Huh, why is the number of securities so low? The Ho Chi Minh Stock Exchange in Vietnam alone has 400 listed companies. According to MSCI , just 15 companies make up 85% of the free-float market capitalization in Vietnam. In fact, one company alone, Vietnam Dairy Product makes up 36% of the index's ...
by SimpleGift
Sun Dec 17, 2017 11:02 pm
Forum: Investing - Theory, News & General
Topic: Investing in "Frontier" Markets
Replies: 22
Views: 1625

Re: Investing in "Frontier" Markets

Frontier markets have a certain seductive appeal — low correlation to other global equities, fast growing economies, great demographics, etc. But it's somewhat shocking to see how small the investable universe of frontier stocks actually is (table below). While the MSCI Emerging Markets Index has ov...