Search found 3454 matches

by Random Walker
Wed Jan 23, 2019 12:21 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: More Investing Lessons From 2018
Replies: 3
Views: 227

Larry Swedroe: More Investing Lessons From 2018

https://www.etf.com/sections/index-investor-corner/swedroe-more-investing-lessons-2018?nopaging=1 Lessons 4-7. Here’s a few sample tidbits. Today’s 35 year old investor can expect to live through at least 10 more bear markets in his lifetime and 20 or more periods of losses 15% or greater. Also a re...
by Random Walker
Wed Jan 23, 2019 10:44 am
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Why do people often think that factor premiums may have been arbitraged away, but never apply the same logic to the equity premium? If the value premium could be arbitraged away, couldn’t that also happen to the equity premium? People think this way because, no matter how many times it is claimed t...
by Random Walker
Wed Jan 23, 2019 8:50 am
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

The value premium has been just about as persistent as has the equity risk premium: the likelihood of negative premium over different time periods just about the same for both. The value premium, and I believe the other factors as well, has been stronger in small stocks.

Dave
by Random Walker
Tue Jan 22, 2019 6:29 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

I think most long only SV funds have a market beta of about 1. That’s one potential advantage of possibly paying a bit more for a SV fund with deeper exposures; take on less market beta for same exposure to the other factors. And the point of tilting is to diversify away from the market beta that a...
by Random Walker
Tue Jan 22, 2019 3:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Spend Down Strategies Part 1
Replies: 5
Views: 985

Larry Swedroe: Spend Down Strategies Part 1

https://www.fa-mag.com/news/a-successful-and-secure-retirement-spend-down-strategies--part-1-42882.html?section=3 This is an article excerpted from Larry Swedroe’s new book, Your Complete Guide To A Successful And Secure Retirement. As the title states, this is part 1 of an article on the important ...
by Random Walker
Tue Jan 22, 2019 10:38 am
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Hedgefundie, Random Walker, anyone else... I want to try a "matter-scatter" chart using the best possible mutual fund for the comparison. So, I want to use my personal method of analysis--whose value has been questioned--and I want to use a real-world actual mutual funds, but since there are said t...
by Random Walker
Mon Jan 21, 2019 10:30 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Larry Swedroe said "I don't know what world the Bogleheads are living in, declaring value has performed miserably." However, in 2015, in an article entitled Value Premium Goes Missing , he wrote: As you can see, in terms of annualized returns, there has been, on average, no realized value premium o...
by Random Walker
Mon Jan 21, 2019 6:50 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Overall i do a small tilt to small cap value, but i believe that staying in blend funds is the way to go for most investors. With that strategy, you should always be in the middle in market returns over the long haul, you won't be selling low when you abandoned your tilt, and you won't have regrets...
by Random Walker
Mon Jan 21, 2019 6:14 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Let me acknowledge that factor enthusiasts have objections to this presentation, one being his basing it on the performance actual mutual funds rather than calculated factors. I think the objection is that it is based on active mutual funds that have a propensity for style drift as opposed to just ...
by Random Walker
Mon Jan 21, 2019 5:58 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investing Lessons From 2018
Replies: 5
Views: 1367

Re: Larry Swedroe: Investing Lessons From 2018

With regard to Lesson 2, Larry has written elsewhere “a wise person once said that if some part of your portfolio isn’t performing poorly, you’re not properly diversified”. I’ll be keeping that in mind a lot as I periodically inflict tracking error regret on myself. :-)

Dave
by Random Walker
Mon Jan 21, 2019 5:50 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Add to that the lack of correlation between the factors, and I think high tilt makes a lot of sense. I thought the small and value factors had high correlation with the market factor. A big benefit to diversifying across market beta, size, and value, is the lack of correlations. From my memory, siz...
by Random Walker
Mon Jan 21, 2019 5:05 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Add to that the lack of correlation between the factors, and I think high tilt makes a lot of sense. I thought the small and value factors had high correlation with the market factor. A big benefit to diversifying across market beta, size, and value, is the lack of correlations. From my memory, siz...
by Random Walker
Mon Jan 21, 2019 3:21 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

While it is way too early to report, Vanguard Value Factor ETF (VFVA) is the best performing asset so far this year, 12% up YTD. If this holds up for 6 months or more there will be a lot of money chasing value funds again. What it indicates is that pure exposure to any one factor is going to result...
by Random Walker
Mon Jan 21, 2019 3:15 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

From Portfolio Visualizer: 1994-2018 (earliest date for DFA fund) VFINX VG S&P 500 index fund 8.97% VIVAX VG Large Value Index fund 8.67% DFLVX DFA Large Value fund 9.52% Dave Looking at the factor regressions for these funds over this period , it looks like you have a confounding variable in that ...
by Random Walker
Mon Jan 21, 2019 1:34 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

From Portfolio Visualizer: 1994-2018 (earliest date for DFA fund)

VFINX VG S&P 500 index fund 8.97%
VIVAX VG Large Value Index fund 8.67%
DFLVX DFA Large Value fund 9.52%

Dave
by Random Walker
Mon Jan 21, 2019 1:08 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Value "Premium" is nothing more than narrative, with equal amounts of narrative opposing it. For this, one would embrace complexity with its abundance of risks? I have my strongest factor faith in value. Overwhelmingly this is because it has both strong plausible risk based and behavioral based exp...
by Random Walker
Mon Jan 21, 2019 1:01 pm
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

While it is way too early to report, Vanguard Value Factor ETF (VFVA) is the best performing asset so far this year, 12% up YTD. If this holds up for 6 months or more there will be a lot of money chasing value funds again. What it indicates is that pure exposure to any one factor is going to result...
by Random Walker
Mon Jan 21, 2019 8:49 am
Forum: Investing - Theory, News & General
Topic: The Value "Premium" has been ZERO for 30 years
Replies: 86
Views: 7171

Re: The Value "Premium" has been ZERO for 30 years

Aloha Joe,
What is the difference between the benchmark data set and the research data set? Thanks,

Dave
by Random Walker
Mon Jan 21, 2019 8:39 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investing Lessons From 2018
Replies: 5
Views: 1367

Larry Swedroe: Investing Lessons From 2018

https://www.etf.com/sections/index-investor-corner/swedroe-investing-lessons-2018?nopaging=1 “there’s nothing new in investing, only investment history you don’t yet know.” Larry reviews 11 investing lessons from 2018. This essay reviews lessons 1-3: active management is a loser’s game, diversificat...
by Random Walker
Sun Jan 20, 2019 6:34 pm
Forum: Investing - Theory, News & General
Topic: Testing a Statement from Bernstein's "Ages of the Investor"
Replies: 6
Views: 803

Re: Testing a Statement from Bernstein's "Ages of the Investor"

I went and read Bernstein’s example. He is looking at periodic contributions over time. Looks like there can be some benefit to volatility in accumulation phase. This is getting at limits of my understanding. Volatility is a drag on a portfolio. It is better to have a less volatile portfolio. I thin...
by Random Walker
Sun Jan 20, 2019 5:43 pm
Forum: Investing - Theory, News & General
Topic: Testing a Statement from Bernstein's "Ages of the Investor"
Replies: 6
Views: 803

Re: Testing a Statement from Bernstein's "Ages of the Investor"

If two portfolios have the same average annual return but different volatilities, the portfolio with the greater volatility will have a lower compounded annualized return and lower terminal value. The reason is called volatility drag or variance drain. Compounded return is always less than average r...
by Random Walker
Sat Jan 19, 2019 2:53 pm
Forum: Investing - Theory, News & General
Topic: When would you stop being a Boglehead?
Replies: 95
Views: 7409

Re: When would you stop being a Boglehead?

I would use an advisor if I decided I didn’t want to deal with or wasn’t capable of dealing with the details of financial matters anymore. Seems reasonable, but I would make the point that perhaps it would make sense to get set up with the advisor much earlier. If one waits until after they have ac...
by Random Walker
Sat Jan 19, 2019 2:08 am
Forum: Investing - Theory, News & General
Topic: Alan Roth: 5 Investing Lessons
Replies: 28
Views: 2685

Re: Alan Roth: 5 Investing Lessons

Fennewaldaj,
That is why I have the most conviction for value. It has both strong risk based and behavioral based rationale supporting it.

Dave
by Random Walker
Fri Jan 18, 2019 9:55 pm
Forum: Investing - Theory, News & General
Topic: Alan Roth: 5 Investing Lessons
Replies: 28
Views: 2685

Re: Alan Roth: 5 Investing Lessons

I think most of us would disagree with the proposition that the size and value factors as well as alternatives represent free lunches or “free excess returns”. Each of those represents a unique and independent risk. Nothing free about each one individually. The only thing close to a potential freebi...
by Random Walker
Fri Jan 18, 2019 5:13 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Hedge Funds A Bad Buy
Replies: 7
Views: 513

Re: Larry Swedroe: Hedge Funds A Bad Buy

State and Municipal pension plans have been trying to outperform the markets in an effort to meet their liabilities. I believe this is a governance issue. Politicians don''t want to raise taxes or slash benefits, so they tell pension plan manger, get the 12% a year we had to assume to make the liab...
by Random Walker
Fri Jan 18, 2019 4:57 pm
Forum: Investing - Theory, News & General
Topic: Alan Roth: 5 Investing Lessons
Replies: 28
Views: 2685

Re: Alan Roth: 5 Investing Lessons

Excellent article! Thanks for Sharing. Straightforward article that most people can easily understand. It offers some great advice. The rebalancing impact is impressive and instructive. Think we need to be careful looking at that rebalancing information. I think that figure could be very period dep...
by Random Walker
Fri Jan 18, 2019 2:20 pm
Forum: Investing - Theory, News & General
Topic: Question for RobertT
Replies: 50
Views: 13265

Re: Question for RobertT

Just to add my 2 cents. I’d just make the point that cost, while very important, isn’t everything. The purpose of factor investing is to diversify away from the market beta factor that dominates most all of our portfolios. Sometimes a factor fund with deeper exposures to the desired factors will cos...
by Random Walker
Fri Jan 18, 2019 2:06 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Hedge Funds A Bad Buy
Replies: 7
Views: 513

Larry Swedroe: Hedge Funds A Bad Buy

https://www.etf.com/sections/index-investor-corner/swedroe-hedge-funds-bad-buy State and Municipal pension plans have been trying to outperform the markets in an effort to meet their liabilities. Over the last roughly 20 years, pension funds have tried to increase returns by increasing allocations t...
by Random Walker
Fri Jan 18, 2019 1:53 pm
Forum: Investing - Theory, News & General
Topic: Alan Roth: 5 Investing Lessons
Replies: 28
Views: 2685

Alan Roth: 5 Investing Lessons

https://www.etf.com/sections/index-investor-corner/5-investing-lessons Pretty good article. I don’t agree that factors can be simply categorized as a fad. Otherwise though, some solid advice. I agree with the idea of keeping bonds simple. Monte Carlo Simulations of my own portfolio fit with what Ala...
by Random Walker
Thu Jan 17, 2019 11:02 am
Forum: Investing - Theory, News & General
Topic: What Percentage of US Stocks is traded by Pros vs Public?
Replies: 4
Views: 541

Re: What Percentage of US Stocks is traded by Pros vs Public?

I think the number is >=90% trading between the big firms. That means one firm’s computers backed by it’s PhDs, whizzes, algorithms, sharks trading with the other firms computers backed by it’s PhDs, whizzes, algorithms and sharks. One firm selling and the other firm buying, and both firms think the...
by Random Walker
Wed Jan 16, 2019 11:19 am
Forum: Investing - Theory, News & General
Topic: When would you stop being a Boglehead?
Replies: 95
Views: 7409

Re: When would you stop being a Boglehead?

I actually made the transition from DIY BH to advisor path. It started with a focus on tax managed value funds and more efficient tax loss harvesting. It then evolved to a more general focus on improved portfolio efficiency and avoiding behavioral errors. The costs are certain and the benefits only ...
by Random Walker
Mon Jan 14, 2019 10:20 am
Forum: Investing - Theory, News & General
Topic: Vanguard factor funds slow to catch on
Replies: 86
Views: 10656

Re: Vanguard factor funds slow to catch on

Well, they seem to be marketing at least one of these multifactors to us now (VFLQ): https://www.etf.com/sections/etf-industry-perspective/vanguard-liquidity-factor-investings-hidden-gem What would the benchmark be for that fund? Mid Cap? Can't even do a comparison on M* via the chart function - do...
by Random Walker
Mon Jan 14, 2019 9:03 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Reviewing 2018’s Predictions
Replies: 2
Views: 516

Larry Swedroe: Reviewing 2018’s Predictions

https://www.etf.com/sections/index-inve ... swedroe-31

2018 was the first year since Larry started doing this that the consensus predictions turned out to be more accurate than not.

Dave
by Random Walker
Sun Jan 13, 2019 8:27 pm
Forum: Investing - Theory, News & General
Topic: Further diversifying the 60/40 portfoilio?
Replies: 29
Views: 3413

Re: Further diversifying the 60/40 portfoilio?

I agree. A typical 60/40 portfolio has about 90% of its risk wrapped up in equities. A 60/40 TSM/TBM portfolio has about 90% of its risk wrapped up in a single factor, market bets. If you perceive diversification as diversification across independent sources of return (I do), then I would follow the...
by Random Walker
Fri Jan 11, 2019 10:19 pm
Forum: Investing - Theory, News & General
Topic: What are the disadvantages of taking all risk on equity side?
Replies: 63
Views: 3600

Re: What are the disadvantages of taking all risk on equity side?

I think longer duration bonds would have increased correlation to equities. Growth stocks, and most market cap weighted TSM portfolios are basically large growth portfolios, have some exposure to the term premium. My understanding is that if one is really taking his risk on the equity side, he shoul...
by Random Walker
Fri Jan 11, 2019 8:07 pm
Forum: Investing - Theory, News & General
Topic: What are the disadvantages of taking all risk on equity side?
Replies: 63
Views: 3600

Re: What are the disadvantages of taking all risk on equity side?

Of course this debate is going to devolve into the "what is risk" discussion. For me, risk is more than just volatility, so using MPT techniques like efficiency frontiers and portfolio optimization based on volatility-as-risk just don't quite cut it. I agree that there is more to risk than just vol...
by Random Walker
Fri Jan 11, 2019 8:38 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Historical Data Can Comfort
Replies: 6
Views: 784

Larry Swedroe: Historical Data Can Comfort

https://www.etf.com/sections/index-investor-corner/swedroe-historical-data-can-comfort?nopaging=1 Some historical data may help prevent us from catastrophising. Two of the many statistics from the article: on average the market has a 10% drop once every three years and a 20% drop once every six year...
by Random Walker
Wed Jan 09, 2019 1:10 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium Lives!
Replies: 61
Views: 5727

Re: Larry Swedroe: Value Premium Lives!

My belief is that the Value Premium will endure because human nature doesn't change. The old cycles of fear and greed. Im a big believer in value. What I like most about it is that there are both strong risk based and strong behavioral based rationale behind it. I used to think it was 90% risk and ...
by Random Walker
Wed Jan 09, 2019 12:09 pm
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 211
Views: 33812

Re: My Favorite Alternative Funds

Just thought I’d update a few funds since the recent decline. I looked at returns 8/31/18-12/31/18 S&P 500 -13.6% Russell 2K -22.5% LENDX -1.1% SRRIX -9.9% AVRPX -4.0% QSPRX -4.5% 1/n above alts -4.9% Not bad for diversifies with equity like expected returns. SRRIX got hit by big fires, expect AVRPX...
by Random Walker
Wed Jan 09, 2019 9:27 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe:Moderate Your Market Expectations
Replies: 2
Views: 471

Larry Swedroe:Moderate Your Market Expectations

https://www.etf.com/sections/index-investor-corner/swedroe-moderate-your-market-expectations?nopaging=1 I posted Jared Kizer’s original essay on this titled S&P 500 Goes Supernova a few weeks ago. Personally, I’ve taken action on this information over the last several years. Not only is the mean exp...
by Random Walker
Tue Jan 08, 2019 7:48 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Does The Bucket Approach Destroy Wealth?
Replies: 56
Views: 5808

Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

https://www.advisorperspectives.com/articles/2019/01/07/does-the-bucket-approach-destroy-wealth?bt_ee=FTU%2FsBNf%2FLUiHMmWwiQ4s%2FPvcHZiqdidGGmLKie5LRuYO378o7HycRIbJqe0nQFi&bt_ts=1546956764657 ...Compared to static asset allocation strategies, the bucket approach underperforms mainly because the in...
by Random Walker
Tue Jan 08, 2019 3:19 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Does The Bucket Approach Destroy Wealth?
Replies: 56
Views: 5808

Larry Swedroe: Does The Bucket Approach Destroy Wealth?

https://www.advisorperspectives.com/articles/2019/01/07/does-the-bucket-approach-destroy-wealth?bt_ee=FTU%2FsBNf%2FLUiHMmWwiQ4s%2FPvcHZiqdidGGmLKie5LRuYO378o7HycRIbJqe0nQFi&bt_ts=1546956764657 In this article Larry goes into significant depth on retirement planning with Monte Carlo Simulation. MCS r...
by Random Walker
Mon Jan 07, 2019 11:50 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Loser’s Game Reaffirmed
Replies: 21
Views: 2764

Re: Larry Swedroe: The Loser’s Game Reaffirmed

Nisiprius, I think that is mostly legalese. I know most people won’t find that a satisfactory answer, but at some point I think the investor needs to trust the organization he invests with. Even with Vanguard for example, I think their tax exempt muni bond funds are technically active funds versus i...
by Random Walker
Mon Jan 07, 2019 11:35 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Loser’s Game Reaffirmed
Replies: 21
Views: 2764

Re: Larry Swedroe: The Loser’s Game Reaffirmed

From my perspective, the key take-away from Ellis' original article isn't active versus passive, but avoiding errors - and the biggest error we can avoid is costs. I would invest in an active fund like Wellington or Wellesley long before I would hand over my portfolio to an investment advisor for a...
by Random Walker
Mon Jan 07, 2019 7:54 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Loser’s Game Reaffirmed
Replies: 21
Views: 2764

Re: Larry Swedroe: The Loser’s Game Reaffirmed

I've always had a mild problem with Larry quoting the SPIVA reports. He has made it clear that he believes that traditional indexes are inadequate, initially arguing for small and value tilts and now for factor investing. He has always said that US total stock market was only exposed to beta and be...
by Random Walker
Mon Jan 07, 2019 2:18 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Loser’s Game Reaffirmed
Replies: 21
Views: 2764

Re: Larry Swedroe: The Loser’s Game Reaffirmed

...take what the markets give us, keep costs low... Which strategy is better described by your words above? a) Total market investing b) Factor investing Isn't factor investing an attempt to improve on what the markets give us, in some way, rather than just taking what the markets give us? Words ab...
by Random Walker
Mon Jan 07, 2019 12:34 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Loser’s Game Reaffirmed
Replies: 21
Views: 2764

Re: Larry Swedroe: The Loser’s Game Reaffirmed

The professional tennis we see on tv is literally a different sport from the one we see in public parks. The pros hit amazing shots and win points with those amazing shots. In regular tennis for us amateurs, the winner is generally the guy who makes fewer unforced errors. Winning the Loser’s Game is...
by Random Walker
Mon Jan 07, 2019 12:06 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Loser’s Game Reaffirmed
Replies: 21
Views: 2764

Re: Larry Swedroe: The Loser’s Game Reaffirmed

https://www.etf.com/sections/index-investor-corner/swedroe-losers-game-reaffirmed Larry reviews the December SPIVA reports. These S&P Index versus Active reports don’t just compare active to appropriate passive benchmarks, they also look at the persistence of active outperformance when it occurs. A...
by Random Walker
Mon Jan 07, 2019 10:50 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Value Premium Lives!
Replies: 61
Views: 5727

Re: Larry Swedroe: Value Premium Lives!

Here's a question - in terms of minimizing whole-portfolio volatility, wouldn't separate allocations to individual factors work better than a single allocation to SV or a multifactor fund? You'd get the sum of several hopefully-not-highly-correlated random variables, which should have a lower SD th...