Search found 6461 matches

by bob90245
Wed Apr 11, 2012 2:42 pm
Forum: Investing - Theory, News & General
Topic: TSM, Efficient Markets, and tilting
Replies: 33
Views: 2502

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...
by bob90245
Tue Apr 10, 2012 12:30 pm
Forum: Investing - Theory, News & General
Topic: Why Asset Allocation May Not Matter
Replies: 24
Views: 2531

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...
by bob90245
Mon Apr 09, 2012 4:36 pm
Forum: Investing - Theory, News & General
Topic: TSM, Efficient Markets, and tilting
Replies: 33
Views: 2502

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...
by bob90245
Mon Apr 09, 2012 3:45 pm
Forum: Investing - Theory, News & General
Topic: TSM, Efficient Markets, and tilting
Replies: 33
Views: 2502

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:...
by bob90245
Mon Apr 09, 2012 12:57 pm
Forum: Investing - Theory, News & General
Topic: TSM, Efficient Markets, and tilting
Replies: 33
Views: 2502

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 ...
by bob90245
Sun Apr 08, 2012 10:04 pm
Forum: Investing - Theory, News & General
Topic: TSM, Efficient Markets, and tilting
Replies: 33
Views: 2502

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 ...
by bob90245
Sun Apr 08, 2012 5:01 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

Re: Wiki - Investment Risk (revised for new investors)

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.

I would cast a "NO" vote. I don't see it necessary to add any more lines. It'll just clutter things up.
by bob90245
Sun Apr 08, 2012 4:04 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

Re: Wiki - Investment Risk (revised for new investors)

LadyGeek wrote:Next update. The top chart is bob90245's suggestions.
Image

Top chart is even better! :sharebeer
by bob90245
Sun Apr 08, 2012 3:11 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

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...
by bob90245
Sun Apr 08, 2012 2:14 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

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...
by bob90245
Sun Apr 08, 2012 11:48 am
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

Re: Wiki - Investment Risk (revised for new investors)

LadyGeek wrote:I used the same data file and created a new chart.

Image

Much, much better!
by bob90245
Sun Apr 08, 2012 9:56 am
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

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 yo...
by bob90245
Fri Apr 06, 2012 3:23 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

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...
by bob90245
Fri Apr 06, 2012 12:35 pm
Forum: Investing - Theory, News & General
Topic: Wiki - Investment Risk (revised for new investors)
Replies: 103
Views: 4299

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...
by bob90245
Thu Apr 05, 2012 12:13 pm
Forum: Investing - Theory, News & General
Topic: On the radio with Zvi Bodie
Replies: 4
Views: 723

Re: On the radio with Zvi Bodie

Perhaps Bodie's views were influenced bythe Japanese stock market. That makes sense.
by bob90245
Tue Mar 27, 2012 6:19 pm
Forum: Investing - Theory, News & General
Topic: Is there a Gauss or Einstein of investing?
Replies: 71
Views: 4286

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 Ide...
by bob90245
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: 3303

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 a...
by bob90245
Tue Mar 27, 2012 10:42 am
Forum: Investing - Theory, News & General
Topic: investor.gov
Replies: 11
Views: 1115

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
by bob90245
Mon Mar 26, 2012 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Took some off the table today
Replies: 2
Views: 684

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).
by bob90245
Mon Mar 26, 2012 6:14 pm
Forum: Investing - Theory, News & General
Topic: Investors are their own worst enemy
Replies: 19
Views: 2478

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.
by bob90245
Mon Mar 26, 2012 4:19 pm
Forum: Investing - Theory, News & General
Topic: The Equity risk Premium has all but vanished
Replies: 48
Views: 5387

Re: The Equity risk Premium has all but vanished

Gordon wrote:Where are you there Rick, Larry and William???

You left out Jack Bogle. He seems to be expert on expected returns and when or when not to lighten up on equities.
by bob90245
Mon Mar 26, 2012 4:13 pm
Forum: Investing - Theory, News & General
Topic: QE3 Poll
Replies: 9
Views: 658

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?
by bob90245
Sun Mar 25, 2012 10:18 pm
Forum: Investing - Help with Personal Investments
Topic: Am I being conned?
Replies: 43
Views: 5020

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 ...
by bob90245
Sun Mar 25, 2012 4:34 pm
Forum: Investing - Theory, News & General
Topic: Bogleheadism goes mainstream?
Replies: 24
Views: 3202

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. Hum...
by bob90245
Sun Mar 25, 2012 3:47 pm
Forum: Investing - Theory, News & General
Topic: Money Magazine is bad for me
Replies: 55
Views: 5830

Re: Money Magazine is bad for me

Vanguard advertises in Money Magazine.
by bob90245
Sun Mar 25, 2012 3:45 pm
Forum: Investing - Theory, News & General
Topic: Bogleheadism goes mainstream?
Replies: 24
Views: 3202

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?
by bob90245
Sun Mar 25, 2012 10:40 am
Forum: Investing - Theory, News & General
Topic: Money Magazine is bad for me
Replies: 55
Views: 5830

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 va...
by bob90245
Fri Mar 23, 2012 10:16 pm
Forum: Personal Finance (Not Investing)
Topic: Malkiel WSJ Editorial - What I Don't Like
Replies: 40
Views: 4800

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 fail...
by bob90245
Fri Mar 23, 2012 9:11 pm
Forum: Investing - Theory, News & General
Topic: Single Most Valuable Thing
Replies: 50
Views: 3465

Re: Single Most Valuable Thing

Do-it-yourself investing is not for the faint of heart. Bogleheads are a unique minority.
by bob90245
Fri Mar 23, 2012 9:02 pm
Forum: Investing - Theory, News & General
Topic: chart/article in Times boglehead idea sucessful
Replies: 3
Views: 396

Re: chart/article in Times boglehead idea sucessful

sometimesinvestor wrote:Here is chart

http://www.nytimes.com/interactive/2012 ... 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 looking.
by bob90245
Fri Mar 23, 2012 10:33 am
Forum: Personal Finance (Not Investing)
Topic: Malkiel WSJ Editorial - What I Don't Like
Replies: 40
Views: 4800

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.
by bob90245
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: 15199

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...
by bob90245
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: 1443

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...
by bob90245
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: 15199

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...
by bob90245
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: 3494

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...
by bob90245
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: 3494

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...
by bob90245
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: 3494

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....
by bob90245
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: 3494

Re: Tilting vs Total Market: Does it really matter that much

555 wrote: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.
by bob90245
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: 1530

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.
by bob90245
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: 3388

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 prefe...
by bob90245
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: 3388

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...
by bob90245
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: 3388

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 sec...
by bob90245
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: 3388

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...
by bob90245
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: 3388

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...
by bob90245
Mon Mar 19, 2012 4:48 pm
Forum: Investing - Theory, News & General
Topic: The Bogle Interview: Big Picture, Big Challenges
Replies: 15
Views: 2249

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...
by bob90245
Sun Mar 18, 2012 4:35 pm
Forum: Investing - Help with Personal Investments
Topic: Bogle on value tilting/REIT/emerging markets
Replies: 23
Views: 2888

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...
by bob90245
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: 3388

Re: What if I'd gotten out of stocks in 1996 based on PE10?

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.

I didn't know there is a ticker symbol that tracks P/E10 in real time.
by bob90245
Sun Mar 18, 2012 12:07 pm
Forum: Investing - Theory, News & General
Topic: Is a 2012/2013 Market Collapse Inevitable?
Replies: 49
Views: 5536

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.
by bob90245
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: 3388

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 ...