Search found 2299 matches

by Random Walker
Fri Feb 23, 2018 10:34 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Investors Should Worry About
Replies: 10
Views: 862

Larry Swedroe: What Investors Should Worry About

http://www.etf.com/sections/index-investor-corner/swedroe-what-investors-should-worry-about?nopaging=1 Larry is not in the business of making predictions, but I think it’s fair to say he’s in the business of helping build robust investor portfolios that can withstand the wide variety of outcomes pre...
by Random Walker
Thu Feb 22, 2018 10:31 am
Forum: Investing - Theory, News & General
Topic: Rising Bond Yields
Replies: 6
Views: 984

Re: Rising Bond Yields

This a chance to recommend a great and easy to read book: Why Bother With Bonds by Rick Van Ness. It is my favorite bond book by far. One definition of bond duration is the point at which the investor is indifferent to changes in interest rate. If rates rise and bond prices fall, if the investor con...
by Random Walker
Tue Feb 20, 2018 12:37 pm
Forum: Investing - Theory, News & General
Topic: Sequence of returns risk while accumulating
Replies: 65
Views: 3856

Re: Sequence of returns risk while accumulating

Willthrill, This is the reason I am a fan of customizing one’s own glide path rather than blindly following an age based rule that decreases a percent or two per year. The market doesn’t move in 1-2% yearly adjustments. Like Bernstein writes in his Life Cycle Investing book, when the market has been...
by Random Walker
Tue Feb 20, 2018 11:30 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Why Stock Price Anomalies Persist
Replies: 0
Views: 174

Larry Swedroe: Why Stock Price Anomalies Persist

http://www.etf.com/sections/index-investor-corner/swedroe-arb-limits-dont-explain-anomalies?nopaging=1 This article was at or a little beyond my level of understanding. Larry reviews an article that shows that the persistence over time of several market anomalies cannot be fully explained by limits ...
by Random Walker
Tue Feb 20, 2018 10:40 am
Forum: Investing - Theory, News & General
Topic: Sequence of returns risk while accumulating
Replies: 65
Views: 3856

Re: Sequence of returns risk while accumulating

Reference was made above I think to “Murphy’s Law Of Retirement”. Late accumulators benefit from a bull market, see their portfolios swell, and then decide to retire. They are retiring after a long bull, equity valuations high, future expected returns low, whole potential distribution of returns shi...
by Random Walker
Mon Feb 19, 2018 9:10 pm
Forum: Investing - Theory, News & General
Topic: Sequence of returns risk while accumulating
Replies: 65
Views: 3856

Re: Sequence of returns risk while accumulating

Here is an option. The variability in potential outcomes is due to the standard deviation of possible returns in any given year. If one can keep the expected return of the portfolio constant, but decrease the expected and realized volatility, then the dispersion of the final outcomes will be smaller...
by Random Walker
Mon Feb 19, 2018 4:07 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's portfolio: does the fact that SC are expensive cause a problem?
Replies: 37
Views: 3264

Re: Larry Swedroe's portfolio: does the fact that SC are expensive cause a problem?

If you believe that size and value are risk premia, then the expected return should always be positive relative to large cap or total market. The gap in valuations and additional expected return may be higher or lower at different times, but the expected return premia should always be positive. ......
by Random Walker
Mon Feb 19, 2018 3:45 pm
Forum: Investing - Theory, News & General
Topic: What seems to matter
Replies: 25
Views: 3445

Re: What seems to matter

Top99% wrote The only thing I would add (perhaps just expand #3 on your list) is to think deeply on what makes you happy so you can balance your spending / saving appropriately and get the best happiness per dollar ratio out of your spending. I totally agree. Personally I’ve found that getting clear...
by Random Walker
Sat Feb 17, 2018 2:22 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's portfolio: does the fact that SC are expensive cause a problem?
Replies: 37
Views: 3264

Re: Larry Swedroe's portfolio: does the fact that SC are expensive cause a problem?

This clearly would require nerves made of titanium. Really? The large dose of safe bonds should narrow the SD. One could create a TSM/TBM portfolio with same expected return but it would have a larger equity allocation, exposure to only one equity risk factor as opposed to three, and highly likely ...
by Random Walker
Sat Feb 17, 2018 12:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's portfolio: does the fact that SC are expensive cause a problem?
Replies: 37
Views: 3264

Re: Larry Swedroe's portfolio: does the fact that SC are expensive cause a problem?

Hi Lauretta, My thoughts are pretty simple ones. If you believe that size and value are risk premia, then the expected return should always be positive relative to large cap or total market. The gap in valuations and additional expected return may be higher or lower at different times, but the expec...
by Random Walker
Fri Feb 16, 2018 9:27 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investors Love Lottery Stocks
Replies: 2
Views: 505

Larry Swedroe: Investors Love Lottery Stocks

http://www.etf.com/sections/index-inves ... nopaging=1

Larry reviews an article showing that stocks with lottery ticket like characteristics underperform. Limits to arbitrage allow behavioral anomalies to persist.

Dave
by Random Walker
Thu Feb 15, 2018 12:35 pm
Forum: Investing - Theory, News & General
Topic: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias
Replies: 113
Views: 7456

Re: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias

Yes, I think small value is superior diversifier to small. I think VG has no ISV fund, so I didn’t go all the way there. In general I think the goal is to diversify away from market beta (we all have enough of that already in our portfolios). I use DFA ISV Fund.

Dave
by Random Walker
Thu Feb 15, 2018 10:19 am
Forum: Investing - Theory, News & General
Topic: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias
Replies: 113
Views: 7456

Re: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias

I think the really great international diversifier is international small value, perhaps even better than emerging markets. International small much more influenced by local economic conditions than the large multinational companies.

Dave
by Random Walker
Wed Feb 14, 2018 7:23 pm
Forum: Investing - Theory, News & General
Topic: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias
Replies: 113
Views: 7456

Re: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias

Markets price risk and I gotta believe any differences between the riskiness of our markets and foreign markets are already reflected in the prices. And lower prices and valuations imply higher perceived risk and higher expected return.

Dave
by Random Walker
Wed Feb 14, 2018 3:59 pm
Forum: Investing - Theory, News & General
Topic: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias
Replies: 113
Views: 7456

Re: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias

Patrick013,
Don’t you think all the risks you mention are already incorporated into prices?

Dave
by Random Walker
Wed Feb 14, 2018 2:51 pm
Forum: Investing - Theory, News & General
Topic: The Misguided Beliefs of Financial Advisors
Replies: 15
Views: 2833

Re: The Misguided Beliefs of Financial Advisors

Another potential benefit of an advisor is getting the initial asset allocation right to begin with, and then making adjustments over time as well. I have found Monte Carlo Simulation highly valuable and have been surprised by the results.

Dave
by Random Walker
Wed Feb 14, 2018 11:12 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Driver’s Behind The Dip
Replies: 27
Views: 2728

Re: Larry Swedroe: Driver’s Behind The Dip

Top99%, I think I remember Larry once writing something to the effect that life is too short to stress over an asset allocation that is too aggressive. The older I get, the more I agree! Moreover, as I’ve gotten older, I’ve tamed down my financial goals and with the aid of Monte Carlo Simulation, se...
by Random Walker
Wed Feb 14, 2018 11:03 am
Forum: Investing - Theory, News & General
Topic: A Case for Higher Int'l Allocation? Larry Swedroe article on home bias
Replies: 113
Views: 7456

Larry Swedroe: Bias Can Derail You

[moved RandomWalker's post and its replies into this existing thread - moderator prudent] http://www.etf.com/sections/index-investor-corner/swedroe-bias-can-derail-you?nopaging=1 Excellent article on the potential benefit of international diversification. International developed is currently about ...
by Random Walker
Tue Feb 13, 2018 1:08 pm
Forum: Investing - Theory, News & General
Topic: Vanguard US Multifactor Fund
Replies: 52
Views: 4165

Re: Vanguard US Multifactor Fund

The term “Multi-Factor” is what got my attention. That’s why I compared it to Style premia. Just a reminder that the name of a fund is virtually meaningless.

Dave
by Random Walker
Tue Feb 13, 2018 10:18 am
Forum: Investing - Theory, News & General
Topic: Vanguard US Multifactor Fund
Replies: 52
Views: 4165

Re: Vanguard US Multifactor Fund

Afan, I believe there is a difference between an efficient market and an efficient portfolio. Although there are no free lunches in the markets, some portfolios will be more efficient than others. Those portfolios closer to the northwest corner of a risk return graph will likely be more diversified ...
by Random Walker
Tue Feb 13, 2018 10:10 am
Forum: Investing - Theory, News & General
Topic: Vanguard US Multifactor Fund
Replies: 52
Views: 4165

Re: Vanguard US Multifactor Fund

Quickly looked at the prospectus. This fund is nothing like the style premia multi factor fund of AQR. This VG Fund is a long only US stock fund that looks like it will focus on market, momentum, value, profitability. So the dominant factor remains market beta. In contrast AQR Style Premia is a mark...
by Random Walker
Mon Feb 12, 2018 4:22 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Driver’s Behind The Dip
Replies: 27
Views: 2728

Re: Larry Swedroe: Driver’s Behind The Dip

In previous post up above Lauretta mentioned that the market had dropped around 80% in the depression. Yet many of us use the working assumption that we need to tolerate a roughly 50% equity decline at some point. If we make our base case the worst case, then we may well end up being too conservativ...
by Random Walker
Mon Feb 12, 2018 11:00 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Driver’s Behind The Dip
Replies: 27
Views: 2728

Re: Larry Swedroe: Driver’s Behind The Dip

Taylor and Homer,
Completely Agree! I assume equities can drop 50% in any given year as well.

Dave
by Random Walker
Mon Feb 12, 2018 10:57 am
Forum: Investing - Theory, News & General
Topic: Expanding on The Rewards Of Multiple Asset Class Investing
Replies: 43
Views: 3838

Re: Expanding on The Rewards Of Multiple Asset Class Investing

Thought I’d give this post a bump. The diagram at the start really is the foundation of my investment philosophy and it’s in the back of my mind whenever we talk factors and alternatives.

Dave
by Random Walker
Mon Feb 12, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Driver’s Behind The Dip
Replies: 27
Views: 2728

Larry Swedroe: Driver’s Behind The Dip

http://www.etf.com/sections/index-investor-corner/swedroe-drivers-behind-dip?nopaging=1 Great article. In the end, no one really knows why the dip occurred. But Larry sure teaches a lot in 3 pages hypothesizing on possible sources. He reviews valuations, discount rate, investor demand for risk premi...
by Random Walker
Sun Feb 11, 2018 9:25 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

As far as comparisons go, all of the above are flawed a lot. I remember when I was signing up with an advisor who provides DFA access. I asked about benchmarks. And he said the DFA funds are “sort of their own benchmarks”. I think that is completely true. If one owns a passive formulaic fund that ad...
by Random Walker
Sun Feb 11, 2018 9:15 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

In-reality, It is your statements that are both incorrect and misleading. Yes, we do expect some additional premium from small and value, but that is just part of the story. As I think you know, the factors are defined as long short portfolios. Defined as such, the market factor has been eliminated....
by Random Walker
Sun Feb 11, 2018 1:52 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

Taylor, As you know, TSM certainly has exposure to all the stocks, but no net exposure to the factors. I completely agree with being wary of complexity. But the rationale behind most of the factors and alternatives is pretty straightforward. I’m sure you’ll agree the benefits are only potential and ...
by Random Walker
Sun Feb 11, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

In_reality, I would like to post my returns here, but there are a few reasons I can’t, won’t, probably shouldn’t. Firstly, I’m in accumulation phase, so would require IRR calculation and I’d probably screw that up. Secondly, my total time frame is only about a decade since I started down the factor ...
by Random Walker
Sun Feb 11, 2018 10:29 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Consumption’s Impact On Returns
Replies: 0
Views: 238

Larry Swedroe: Consumption’s Impact On Returns

http://www.etf.com/sections/index-investor-corner/swedroe-consumptions-impact-returns Aggregate Consumption decreases in bad economic times and increases in good economic times. Here Larry reviews a paper showing that the expected return on equities increases during periods of low consumption and de...
by Random Walker
Sat Feb 10, 2018 8:52 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

Packer16 wrote I just have a problem with characterizing these as equity like returns for less volatility. From a markets perspective, this does not make sense as the market does not cross sectionally reward less volatile asset classes with more return for very long. Isn’t it possible the alternativ...
by Random Walker
Sat Feb 10, 2018 7:30 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

I would guesstimate that Larry has increased the recommendation from 10% to 20% because there are now more funds to consider: Style premia, TS Mom, alternative lending, reinsurance, variance risk premium. These are all independent sources of return that are uncorrelated with one another. Each has eq...
by Random Walker
Sat Feb 10, 2018 7:23 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

I wonder how many of us Bogleheads appreciate that a typical 60% TSM / 40% TBM portfolio has at least 90% of its risk wrapped up in a single factor.

Dave
by Random Walker
Sat Feb 10, 2018 7:12 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

Packer16 wrote What is the difference between portfolio efficiency and seeking alpha (both trying to get equity like returns for less risk or more returns for equity like risk). I would say that seeking alpha is trying to do better than the market, either through security selection or timing. One ca...
by Random Walker
Sat Feb 10, 2018 5:47 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh
Replies: 28
Views: 2239

Re: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh

Time Series Momentum versus Cross Sectional Momentum CS Momentum is relative momentum. Independent of whether investments in an asset class go up or down, CS Momentum will go long the top performers and short the worst performers. Thus it remains net no exposure to the asset class. For example, in s...
by Random Walker
Sat Feb 10, 2018 5:31 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1250
Views: 186583

Re: QSPIX - thoughts on interesting fund

Packer16 wrote Although Larry has some good advice & is a really nice guy, he has some weaknesses. He appears to be in the hunt for alternative assets to generate returns, just like the active managers he rails on. This quest IMO leads him to risky & expensive alternative which IMO have little or no...
by Random Walker
Fri Feb 09, 2018 5:30 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh
Replies: 28
Views: 2239

Re: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh

Nisiprius, I agree that comparing QMHRX to 60/40 is senseless. The issue is whether it improves a stock and bond portfolio. 60/40 seems like a good comparison from that standpoint. You critique that the fund only has 8 year track record, but you then make a comparison between 60/40 and 60/40+AQMIX. ...
by Random Walker
Fri Feb 09, 2018 3:19 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 4 Horsemen Of Your Portfolio
Replies: 108
Views: 10365

Re: Larry Swedroe: 4 Horsemen Of Your Portfolio

The alternatives are really a fairly minor point of the article. Nonetheless, I do think it is rational to consider them. Expected equity returns are modest and interest rates are low, so reasonable to look elsewhere for returns if possible. Given that these investments are not correlated with eithe...
by Random Walker
Fri Feb 09, 2018 11:27 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 4 Horsemen Of Your Portfolio
Replies: 108
Views: 10365

Re: Larry Swedroe: 4 Horsemen Of Your Portfolio

Larry let me know that this article is basically an introduction to another book he is working on. He’s adding to his Your Only Guide series with a book on retirement planning. That will be a very worthwhile book! From what I’ve heard and partially read, one of the best retirement books is Retiremen...
by Random Walker
Fri Feb 09, 2018 9:37 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh
Replies: 28
Views: 2239

Re: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh

Couldn’t find AQRMX, but did find AQRIX. I can’t speak for Larry. Nonetheless I see AQRIX appears to be a long only risk parity fund, investing more in less volatile/less risky/lower expected return assets and less in more volatile/more risky/higher expected return assets. I do think Larry is a fan ...
by Random Walker
Fri Feb 09, 2018 8:29 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh
Replies: 28
Views: 2239

Larry Swedroe: Time Series Momentum (aka Trend Following): A Good Time For A Refresh

https://alphaarchitect.com/2018/02/08/time-series-momentum-aka-trend-following-the-historical-evidence/ Excellent review of TS Momentum. It meets all of Larry’s criteria for a factor: persistent, pervasive, robust, intuitive, investable. It’s definitly behavioral; perhaps that’s what makes it powerf...
by Random Walker
Thu Feb 08, 2018 11:12 am
Forum: Investing - Theory, News & General
Topic: Bogleheads in an era of robots vs. robots
Replies: 18
Views: 1287

Re: Bogleheads in an era of robots vs. robots

About 90% of Wall Street trading is between one big firm with its PhDs, robots, computers and another big firm with its PhDs, robots, computers. One advantage us little guys have is that we don’t need to look good at the end of a quarter or end of a year. We can stay disciplined when the pros maybe ...
by Random Walker
Wed Feb 07, 2018 11:42 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 4 Horsemen Of Your Portfolio
Replies: 108
Views: 10365

Larry Swedroe: 4 Horsemen Of Your Portfolio

http://www.etf.com/sections/index-investor-corner/swedroe-4-horsemen-your-portfolio?nopaging=1 This is a very important and sobering article. The risk of outliving our savings is perhaps greater now than it has ever been for people of previous eras. Long life expectancy, low bond yields, low expecte...
by Random Walker
Tue Feb 06, 2018 10:39 am
Forum: Investing - Theory, News & General
Topic: Bonds in taxable for TLH purposes
Replies: 11
Views: 978

Re: Bonds in taxable for TLH purposes

Potentially can have it both ways. I agree stocks more volatile, so more TLH opportunities for stocks. But perhaps there is a better use for tax advantaged space than bonds. How about stocks in taxable and use municipal bonds in taxable as one’s bond allocation? That could leave tax advantaged space...
by Random Walker
Tue Feb 06, 2018 10:00 am
Forum: Investing - Theory, News & General
Topic: Bonds in taxable for TLH purposes
Replies: 11
Views: 978

Re: Bonds in taxable for TLH purposes

Da5id,
Yes the bid ask spread is potential problem. I use an advisor who manages the bond ladder. They have the potential to exchange bonds between clients at I think no cost or miniscule cost, thus avoiding the bid ask spread issue.

Dave
by Random Walker
Mon Feb 05, 2018 4:04 pm
Forum: Investing - Theory, News & General
Topic: Bonds in taxable for TLH purposes
Replies: 11
Views: 978

Re: Bonds in taxable for TLH purposes

I think this is possibly a potential advantage of a ladder of individual bonds. One can potentially TLH at the individual bond level in a taxable account.

Dave
by Random Walker
Mon Feb 05, 2018 10:27 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Seeing Valuations Clearly
Replies: 3
Views: 558

Re: Larry Swedroe: Seeing Valuations Clearly

I use about 3% real and 5% nominal for US equities. I think these modest expectations and low interest rates are good reasons to diversify across factors and consider alternative sources of return as portfolio components.

Dave
by Random Walker
Mon Feb 05, 2018 9:53 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Seeing Valuations Clearly
Replies: 3
Views: 558

Larry Swedroe: Seeing Valuations Clearly

http://www.etf.com/sections/index-investor-corner/swedroe-seeing-valuations-clearly?nopaging=1 A look at current market valuations. As has been discussed here previously, there are reasons we might expect CAPE10 to be higher than its historical average. Stocks may be generously valued with lower tha...