Search found 6461 matches
- Wed Apr 11, 2012 2:42 pm
- Forum: Investing - Theory, News & General
- Topic: TSM, Efficient Markets, and tilting
- Replies: 33
- Views: 2646
Re: TSM, Efficient Markets, and tilting
Like MPT, market efficiency leading to the Market Portfolio of all risky assets being optimal has many assumptions about risk, investor behavior, etc etc. And some people like me scratch their heads and ask why two seperate concepts have been merged in the same sentence. No need to come up with dif...
- Tue Apr 10, 2012 12:30 pm
- Forum: Investing - Theory, News & General
- Topic: Why Asset Allocation May Not Matter
- Replies: 24
- Views: 2656
Re: Why Asset Allocation May Not Matter
I haven't read the paper. But I can tell you what I know with playing with all sorts of spreadsheets containing historical data. Yes, savings rate does matter. But only before the nest egg has grown to a certain amount, say, $200,000 or thereabouts. After that, the rate earned on those savings matte...
- Mon Apr 09, 2012 4:36 pm
- Forum: Investing - Theory, News & General
- Topic: TSM, Efficient Markets, and tilting
- Replies: 33
- Views: 2646
Re: TSM, Efficient Markets, and tilting
I've got news for all you so called no tilt people out there, if you own VTI, or any other single ETF, or mutual fund that owns the markets, then you're tilted toward large cap stocks. So dump the this argument about tilting being a bad thing. VTI et al are "tilted" to whatever the market says has ...
- Mon Apr 09, 2012 3:45 pm
- Forum: Investing - Theory, News & General
- Topic: TSM, Efficient Markets, and tilting
- Replies: 33
- Views: 2646
Re: TSM, Efficient Markets, and tilting
On the other hand, portfolio efficiency means that there is some combination of stock asset classes that will fall on the efficient frontier. Of course, we can never know that optimal combination ahead of time. But we can look at history to see how it turned out. Click on image for full size. http:...
- Mon Apr 09, 2012 12:57 pm
- Forum: Investing - Theory, News & General
- Topic: TSM, Efficient Markets, and tilting
- Replies: 33
- Views: 2646
Re: TSM, Efficient Markets, and tilting
As far as reversion to the mean, John Bogle has excellent writing on this in his book Common Sense on Mutual Funds . I recall other authors writing about it as well. From what I remember it occurs to various mutual funds as well as individual asset classes. For me it confirms my decision to go for ...
- Sun Apr 08, 2012 10:04 pm
- Forum: Investing - Theory, News & General
- Topic: TSM, Efficient Markets, and tilting
- Replies: 33
- Views: 2646
Re: TSM, Efficient Markets, and tilting
Efficient markets mean that the longer the time frame the less likely it is for active managers to outperform a benchmark index. Think Bill Miller as a recent example. On the other hand, portfolio efficiency means that there is some combination of stock asset classes that will fall on the efficient ...
- Sun Apr 08, 2012 5:01 pm
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
I would cast a "NO" vote. I don't see it necessary to add any more lines. It'll just clutter things up.Kevin M wrote:I do miss the average trend line. Could we make it a very light, dotted line? It could even be non-continuous so it does not interfere with the "average" indicators.
- Sun Apr 08, 2012 4:04 pm
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
Top chart is even better!LadyGeek wrote:Next update. The top chart is bob90245's suggestions.

- Sun Apr 08, 2012 3:11 pm
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
Yes, I think that chart is accurate for someone whose holding period is a year - but then, they shouldn't be owning stocks in the first place, as the chart implies. A 20-30 year chart, showing the long term benefits of stocks (returns compound with time, standard deviation with only the square root...
- Sun Apr 08, 2012 2:14 pm
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
I used the same data file and created a new chart. http://www.bogleheads.org/w/images/5/5e/Range_of_Annual_Returns.jpg Much, much better! Actually, I came up with an idea to make this chart even clearer. 1) Remove the extra vertical bar that is labeled "Risk" 2) Underneath the skinny part of the lo...
- Sun Apr 08, 2012 11:48 am
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
Much, much better!LadyGeek wrote:I used the same data file and created a new chart.
- Sun Apr 08, 2012 9:56 am
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
Modified to make increasing risk (uncertainty) and return more clear: http://i40.tinypic.com/juiibq.png Your title of "Average Returns" is misleading. Yes you do have the horizontal hash marks for average returns. But the vertical lines represent "Range of Annual Returns". As you describe in the te...
- Fri Apr 06, 2012 3:23 pm
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
Maybe this will covered in part 2. But it seems your figures are bi-model (tri-model?). Perhaps in the sub-section on Asset Allocation , you can make the point that risk can be somewhat controlled by how much or how little you have in risky and less risky assets. Use a chart like this for illustrati...
- Fri Apr 06, 2012 12:35 pm
- Forum: Investing - Theory, News & General
- Topic: Wiki - Investment Risk (revised for new investors)
- Replies: 103
- Views: 4904
Re: Wiki - Investment Risk (revised for new investors)
Also there is no need to take risk. This stuff about risk as a need is straight from Larry Swedroe who is not an academic. Swedroe is often wrong when he talks about risk and this is one of the many cases where he is wrong about risk. This was already discussed. But apparently it didn't sink in. So...
- Thu Apr 05, 2012 12:13 pm
- Forum: Investing - Theory, News & General
- Topic: On the radio with Zvi Bodie
- Replies: 4
- Views: 755
Re: On the radio with Zvi Bodie
Perhaps Bodie's views were influenced bythe Japanese stock market. That makes sense.
- Tue Mar 27, 2012 6:19 pm
- Forum: Investing - Theory, News & General
- Topic: Is there a Gauss or Einstein of investing?
- Replies: 71
- Views: 4542
Re: Is there a Gauss or Einstein of investing?
Peter L. Berstein's book "Capital Ideas, The Improbable Origins of Modern Wall Street" discusses the contributions of such notables as Alfred Cowles, Harry Markowitz, Paul Samuelson, Eugene Fama, James Tobin and others. A very good read.-----Jim I second the recommendation for Capital Ideas . A bri...
- Tue Mar 27, 2012 12:47 pm
- Forum: Investing - Theory, News & General
- Topic: How often have you goofed and placed an incorrect order?
- Replies: 46
- Views: 3412
Re: How often have you goofed and placed an incorrect order?
I use the adage of "measure twice and cut once" so not yet for me. For me, more like double-, triple-, and quaduple-check. Plus I make hard copies of my spreadsheet that documents the potential trade. Plus I have a separate browser tab telling me the closing trade price. And I look over all documen...
- Tue Mar 27, 2012 10:42 am
- Forum: Investing - Theory, News & General
- Topic: investor.gov
- Replies: 11
- Views: 1171
Re: investor.gov
I remember from previous web surfing, there is an SEC website that will probably be much more instructive than the one featured in the opening post. Check it out here:
http://www.sec.gov/investor/pubs/assetallocation.htm
http://www.sec.gov/investor/pubs/assetallocation.htm
- Mon Mar 26, 2012 10:14 pm
- Forum: Investing - Theory, News & General
- Topic: Is there a Gauss or Einstein of investing?
- Replies: 71
- Views: 4542
Re: Is there a Gauss or Einstein of investing?
There are a dozen or so. These two articles provide a listing:
http://www.ifa.com/12steps/step2/step2page2.asp
http://www.ifa.com/12steps/step2/step2page3.asp
http://www.ifa.com/12steps/step2/step2page2.asp
http://www.ifa.com/12steps/step2/step2page3.asp
- Mon Mar 26, 2012 8:10 pm
- Forum: Personal Finance (Not Investing)
- Topic: Took some off the table today
- Replies: 2
- Views: 709
Re: Took some off the table today
Tomorrow, take the rest off the table. Stocks are no place for money you need in the short term (college this fall).
- Mon Mar 26, 2012 6:14 pm
- Forum: Investing - Theory, News & General
- Topic: Investors are their own worst enemy
- Replies: 19
- Views: 2552
Re: Investors are their own worst enemy
A person would have to be in extreme dire straits having burned through all other cash, CDs and other fixed income accounts to have no other choice than to tap their long-term retirement accounts holding stocks in order to put food on the table.
- Mon Mar 26, 2012 4:19 pm
- Forum: Investing - Theory, News & General
- Topic: The Equity risk Premium has all but vanished
- Replies: 48
- Views: 5726
Re: The Equity risk Premium has all but vanished
You left out Jack Bogle. He seems to be expert on expected returns and when or when not to lighten up on equities.Gordon wrote:Where are you there Rick, Larry and William???
- Mon Mar 26, 2012 4:13 pm
- Forum: Investing - Theory, News & General
- Topic: QE3 Poll
- Replies: 9
- Views: 709
Re: QE3 Poll
Why single out QE3? Aren't there dozens of potential policy actions that will affect investors? Or is your response to change your portfolio in different ways depending on the policy action implemented?
- Sun Mar 25, 2012 10:18 pm
- Forum: Investing - Help with Personal Investments
- Topic: Am I being conned?
- Replies: 43
- Views: 5157
Re: Am I being conned?
It's common for novices to have someone like your Metlife person helping you with your investments. And as you've learned, that advice is not free. Once you climb up the learning curve, you'll have the knowledge to do this investing stuff yourself. It appears you're on that track. When you're ready ...
- Sun Mar 25, 2012 4:34 pm
- Forum: Investing - Theory, News & General
- Topic: Bogleheadism goes mainstream?
- Replies: 24
- Views: 3384
Re: Bogleheadism goes mainstream?
If everyone switches to low-cost index fund investment, would that not "change the game" substantially? Could the market be efficient, if it even is now, if all investments were just market cap weighted index buys? Somebody needs to be out there actively trading. Don't worry yourself. Human nature ...
- Sun Mar 25, 2012 3:47 pm
- Forum: Investing - Theory, News & General
- Topic: Money Magazine is bad for me
- Replies: 55
- Views: 6078
Re: Money Magazine is bad for me
Vanguard advertises in Money Magazine.
- Sun Mar 25, 2012 3:45 pm
- Forum: Investing - Theory, News & General
- Topic: Bogleheadism goes mainstream?
- Replies: 24
- Views: 3384
Re: Bogleheadism goes mainstream?
I wouldn't consider Forbes a "mainstream" media outlet. The Atlantic might be more "mainstream".
What are some of the most popular "mainstream" media outlets that most Americans read? The national paper USA Today?
What are some of the most popular "mainstream" media outlets that most Americans read? The national paper USA Today?
- Sun Mar 25, 2012 10:40 am
- Forum: Investing - Theory, News & General
- Topic: Money Magazine is bad for me
- Replies: 55
- Views: 6078
Re: Money Magazine is bad for me
I just realized that every time I read my monthly subscription of Money Magazine, depending on what I read in that particular issue, I start thinking about changing my plan, or adding to it and basically not staying the course. The way I "solved" this problem is that my portfolio has a variety of a...
- Fri Mar 23, 2012 10:16 pm
- Forum: Personal Finance (Not Investing)
- Topic: Malkiel WSJ Editorial - What I Don't Like
- Replies: 40
- Views: 4950
Re: Malkiel WSJ Editorial - What I Don't Like
This is hindsight bias: You know sometimes you don't necessarily have to be a lemming and fall off the cliff and "stay the course." There were numerous indications the US economy was in a severe real estate bubble in the mid 2000's that would end badly. What very few knew was that the failure of inv...
- Fri Mar 23, 2012 9:11 pm
- Forum: Investing - Theory, News & General
- Topic: Single Most Valuable Thing
- Replies: 50
- Views: 3603
Re: Single Most Valuable Thing
Do-it-yourself investing is not for the faint of heart. Bogleheads are a unique minority.
- Fri Mar 23, 2012 9:02 pm
- Forum: Investing - Theory, News & General
- Topic: chart/article in Times boglehead idea sucessful
- Replies: 3
- Views: 426
Re: chart/article in Times boglehead idea sucessful
Here is chart http://www.nytimes.com/interactive/2012/03/20/business/it-pays-to-hang-in-there-if-portfolios-are-diversified.html?ref=your-money Would the chart be better representative if they used a log scale on the Y axis? I know these linear charts make the steep ups and downs more dramatic look...
- Fri Mar 23, 2012 10:33 am
- Forum: Personal Finance (Not Investing)
- Topic: Malkiel WSJ Editorial - What I Don't Like
- Replies: 40
- Views: 4950
Re: Malkiel WSJ Editorial - What I Don't Like
Going by the comments here so far (I haven't read the article), it appears that Malkiel makes the common mistake of examining portfolio components in isolation, and not how each lend their support to the whole.
- Thu Mar 22, 2012 4:31 pm
- Forum: Investing - Theory, News & General
- Topic: from nisiprius, a 'greatest post' in case you missed it
- Replies: 147
- Views: 16014
Re: from nisiprius, a 'greatest post' in case you missed it
bob90245, do you agree that the data I've presented is reasonably accurate and reasonably objective, and that the issue is not the fact but how to act on them? That is, would you say I'm correct that during periods when the stock market performs poorly, outcome is almost independent of asset alloca...
- Thu Mar 22, 2012 4:10 pm
- Forum: Investing - Help with Personal Investments
- Topic: Do you invest with more than one mutual fund company?
- Replies: 19
- Views: 1522
Re: Do you invest with more than one mutual fund company?
Re: Do you invest with more than one mutual fund company? We are talking about options at your sole discretion, right? Because I don't have a choice of mutual fund company my employer offers. But in both my taxable accounts and traditional and Roth IRAs where I place funds with high distributions, t...
- Thu Mar 22, 2012 3:30 pm
- Forum: Investing - Theory, News & General
- Topic: from nisiprius, a 'greatest post' in case you missed it
- Replies: 147
- Views: 16014
Re: from nisiprius, a 'greatest post' in case you missed it
To pick a convenient source, the 2010 SBBI yearbook. There are the usual problems here. The "bonds" allocation is represented by long-term government bonds, which is probably not a typical Boglehead practice, and these are real, not nominal returns. But, here's the data, and I insist that this is t...
- Wed Mar 21, 2012 7:56 pm
- Forum: Investing - Theory, News & General
- Topic: Tilting vs Total Market: Does it really matter that much?
- Replies: 39
- Views: 3606
Re: Tilting vs Total Market: Does it really matter that much
Tilting can also add diversification. You want to have sufficient exposure to all equity asset classes (market, value and small) to guard against periods of underperformance. JG, you sum up nicely a significant reason to tilt. The period 1995 to 1999, and then 2000 to 2010 is a prime example of per...
- Wed Mar 21, 2012 2:26 pm
- Forum: Investing - Theory, News & General
- Topic: Tilting vs Total Market: Does it really matter that much?
- Replies: 39
- Views: 3606
Re: Tilting vs Total Market: Does it really matter that much
To the contrary, if it doesn't really matter that much, would you see so much passion on both sides? No! Of course, not. No one expends all their energy if, at the end of the day, it really doesn't matter that much.[1] [1] With the possible except of those who debate just for arguments sake. LOL Ac...
- Wed Mar 21, 2012 1:48 pm
- Forum: Investing - Theory, News & General
- Topic: Tilting vs Total Market: Does it really matter that much?
- Replies: 39
- Views: 3606
Re: Tilting vs Total Market: Does it really matter that much
If there's so much debate, it can't be that clear cut which is better. No, there could be other interpretations. There is so much debate because people are very passionate about their side and put forward pursuasive arguments to a) justify their position b) convert the other side to their position....
- Wed Mar 21, 2012 12:35 pm
- Forum: Investing - Theory, News & General
- Topic: Tilting vs Total Market: Does it really matter that much?
- Replies: 39
- Views: 3606
Re: Tilting vs Total Market: Does it really matter that much
No, there could be other interpretations. There is so much debate because people are very passionate about their side and put forward pursuasive arguments to a) justify their position b) convert the other side to their position.555 wrote:If there's so much debate, it can't be that clear cut which is better.
- Tue Mar 20, 2012 1:31 pm
- Forum: Investing - Help with Personal Investments
- Topic: Investment Question?? Zvi Bodie's ". Risk Less and Prosper"
- Replies: 4
- Views: 1638
Re: Investment Question?? Zvi Bodie's ". Risk Less and Pros
I read the book. But in follow up articles, he departs from his advice in his book. Bodie now has said that if you are an investor in your 20's and 30's, you don't need to put 100% of your nest egg devoted to base retirement needs into TIPS and IBonds.
- Tue Mar 20, 2012 1:24 pm
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
All this seems like excessive semantic precision, yet there is a big difference between diversifying across "asset classes" and "asset class categories" (Personally I don't like that term and would call them sectors, flavors or class members, but you get my meaning) If you prefer to use the term "s...
- Tue Mar 20, 2012 11:54 am
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
As far as I know, the academic approach to differentiate between equity asset classes is along the lines of big and small, value and growth along with their counterparts in international. That doesn't match what I've seen, citation? I suppose you never read about the Three-Factor Model to explain e...
- Tue Mar 20, 2012 10:38 am
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
Coal mining stocks perform differently than the total market, that doesn't make them a separate asset class, just a different member of the "equities" class. I don't think anyone would categorize coal mining stocks as a separate asset class. Instead, it would be called an "equity sector". In fact, ...
- Mon Mar 19, 2012 6:24 pm
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
Others choose to include other asset classes like small, value, REITs and international Just quibbling really, but those are not asset classes, they're just different flavors of equities. Your comment is not a small quibble. It seems to be a firm rejection of the theory put forward by Boglehead aut...
- Mon Mar 19, 2012 5:00 pm
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
Others choose to include other asset classes like small, value, REITs and international Just quibbling really, but those are not asset classes, they're just different flavors of equities. Your comment is not a small quibble. It seems to be a firm rejection of the theory put forward by Boglehead aut...
- Mon Mar 19, 2012 4:48 pm
- Forum: Investing - Theory, News & General
- Topic: The Bogle Interview: Big Picture, Big Challenges
- Replies: 15
- Views: 2303
Re: The Bogle Interview: Big Picture, Big Challenges
From this quote, we see that Bogle rejects the Efficient Market Hypothesis (prices already reflect information that is known to market participants): Our mentor, Jack Bogle, gave a long interview with the editors of the Journal of Indexes. It is full of interesting and valuable quotes like these: Th...
- Sun Mar 18, 2012 4:35 pm
- Forum: Investing - Help with Personal Investments
- Topic: Bogle on value tilting/REIT/emerging markets
- Replies: 23
- Views: 3095
Re: Bogle on value tilting/REIT/emerging markets
Investors expecting value tilting/REIT/emerging markets to pay off year in and year out will be disappointed. This is strictly a long term strategy. Those who lack the neccesary patience should stick to total markets. Total markets pay off year in and year out? I don't think those choosing Total ma...
- Sun Mar 18, 2012 12:17 pm
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
I didn't know there is a ticker symbol that tracks P/E10 in real time.letsgobobby wrote:Intraday PE10 fell to about 11 in march 2009. That's close enough that'd I say a single digit figure is highly likely in the future.
- Sun Mar 18, 2012 12:07 pm
- Forum: Investing - Theory, News & General
- Topic: Is a 2012/2013 Market Collapse Inevitable?
- Replies: 49
- Views: 5678
Re: Is a 2012/2013 Market Collapse Inevitable?
There is ALWAYS bad news. Always.
And as Larry is wont to point out, crises occur more often than people suspect. Like every 2 or 3 years.
And as Larry is wont to point out, crises occur more often than people suspect. Like every 2 or 3 years.
- Sun Mar 18, 2012 10:46 am
- Forum: Investing - Theory, News & General
- Topic: What if I'd gotten out of stocks in 1996 based on PE10?
- Replies: 42
- Views: 3528
Re: What if I'd gotten out of stocks in 1996 based on PE10?
PE10 at the beginning of 2012 was 21.68. It would have to drop by more than 50% [to below 10] by the beginning of 2013 to signal a move from 100% Treasuries to 100% TSM using this decision rule. With P/E10 having to fall below 10 for you to move back to 100% TSM, I think you'll have a long wait. I ...