Search found 196 matches

by M B
Wed Aug 19, 2015 3:29 pm
Forum: Investing - Theory, News & General
Topic: Financial advice vs. financial legwork?
Replies: 1
Views: 318

Financial advice vs. financial legwork?

Financial advisors (be they humans or computer programs) do two completely different tasks: Financial advice is about setting up a plan, an asset allocation, etc. It is done once, and the cost does not depend so much on the size of the assets. By financial legwork I mean all those tedious tasks, lik...
by M B
Wed Aug 19, 2015 2:39 pm
Forum: Investing - Theory, News & General
Topic: How to be a Boglehead in Germany
Replies: 28
Views: 9951

Re: How to be a Boglehead in Germany

barbaz wrote:iShares S&P 500 - B UCITS ETF (Acc) (0.07%)
Is this a typo, or can you really invest overseas for cheaper than in eurozone stocks?
by M B
Thu Aug 13, 2015 11:59 am
Forum: Investing - Theory, News & General
Topic: Robo-advisors in Europe
Replies: 4
Views: 925

Re: Robo-advisors in Europe

Does anyone know of others?
by M B
Mon Aug 10, 2015 12:58 pm
Forum: Investing - Theory, News & General
Topic: Robo-advisors in Europe
Replies: 4
Views: 925

Robo-advisors in Europe

The likes of Betterment and Wealthfront are well-known in the US. What is there in Europe? I know of only one in Switzerland and none in Luxembourg, which is suspicious... France: advize.fr fundshop.fr mariequantier.com yomoni.fr Germany: mambu.com owlhub.co smava.de Italy: borsadelcredito.it jusp.c...
by M B
Mon Aug 10, 2015 7:22 am
Forum: Investing - Theory, News & General
Topic: Just how new are "robo" advisors? Give Vanguard some credit.
Replies: 3
Views: 1235

Re: Just how new are "robo" advisors? Give Vanguard some credit.

The single biggest reason why startups succeed is timing. Robo-advisors ten or twenty years ago were simply too early to have much of an impact.
by M B
Mon Aug 10, 2015 7:17 am
Forum: Investing - Theory, News & General
Topic: Many roads to Dublin [Robo vs. Human Advisor Comparison]
Replies: 7
Views: 1334

Re: Many roads to Dublin [Robo vs. Human Advisor Comparison]

All the human advisors were fee only and presumably knew they would be published and pubicly scrutinized. It would have been more interesting to get a real person to go to many different advisors with the same portfolio and report the results. This was my first reaction too: how representative are ...
by M B
Mon Aug 10, 2015 6:59 am
Forum: Investing - Theory, News & General
Topic: Our Mistakes Benefit Future Generations
Replies: 28
Views: 6618

Re: Our Mistakes Benefit Future Generations

Investing is not that complicated. You pick a number for your asset allocation, buy low-cost funds accordingly, keep saving, rebalance, stay the course. True, when markets crash, investing is simple but not easy (but no flesh-and-fee advisor will make it easy). So robo-advisors are shaking a market ...
by M B
Mon Aug 10, 2015 6:49 am
Forum: Investing - Help with Personal Investments
Topic: Advice on "Robo-Investment" tools
Replies: 15
Views: 2653

Re: Advice on "Robo-Investment" tools

Robo-advisors are about as good (or will be within a few years with experience) as flesh-and-fee advisors gross of costs. Net of costs, 15 b.p. of advisory fee + 10-30 b.p. for trackers will beat 1% + 2% hands down. If you do it yourself, you can get 0 + 10-30 b.p. instead of 15 + 10-30 b.p. But I t...
by M B
Mon Aug 10, 2015 6:42 am
Forum: Investing - Theory, News & General
Topic: Rick Ferri Launching A Robo Advisory
Replies: 31
Views: 8229

Re: Rick Ferri Launching A Robo Advisory

Ferri plans to charge the same 25 basis points he charges at Portfolio Solutions, and for the same portfolios. The key advantage of robo-advisors (as with passive investing) is low cost. If all flesh-and-fee advisors charged 25 basis points a year, robo-advisors would not exist (just like trackers ...
by M B
Mon Jul 27, 2015 3:39 am
Forum: Investing - Theory, News & General
Topic: "Investing for Retirement: The Defined Contribution Challenge" by Ben Inker and Martin Tarlie
Replies: 1
Views: 794

"Investing for Retirement: The Defined Contribution Challenge" by Ben Inker and Martin Tarlie

Instead of focusing on risk-adjusted returns, they "introduce a framework based on a common-sense definition of risk: not having enough wealth in retirement. The goal is not to put investors into yachts, but rather to increase the odds that they have the appropriate level of resources in retirement....
by M B
Thu Jun 18, 2015 7:56 am
Forum: Investing - Theory, News & General
Topic: When does the long term start?
Replies: 59
Views: 10294

Re: When does the long term start?

a razor-thin accident of less than a percentage point makes the difference between "7-8 years" and "14-15 years." I changed Fig. 4 to have two different versions of the "length of a bear market": when the initial investment is first recovered and when it is permanently recovered. http://mathieu.bou...
by M B
Thu Jun 18, 2015 5:16 am
Forum: Investing - Theory, News & General
Topic: When does the long term start?
Replies: 59
Views: 10294

Re: When does the long term start?

Toons wrote:10years MINIMUM.
Personally Iong term is "For Life" :happy
What I am after is a threshold having to do with the asset class, not with investors, their motivations and personality. When do things objectively change?
by M B
Tue Jun 16, 2015 11:29 am
Forum: Investing - Theory, News & General
Topic: When does the long term start?
Replies: 59
Views: 10294

Re: When does the long term start?

nisiprius wrote:And since the two exceptions each lasted about 15 years, the chance of an investor's being affected by one, in the past 150 years, was something like 30/150 = 20%.
No, because to be really affected you had to invest at the peak: a year before or after was much less bad.
by M B
Tue Jun 16, 2015 1:38 am
Forum: Investing - Theory, News & General
Topic: When does the long term start?
Replies: 59
Views: 10294

Re: When does the long term start?

* nisiprius points out that a razor-thin accident of less than a percentage point makes the difference between "7-8 years" and "14-15 years." Indeed this criterion is not very robust. But since no criterion is perfect, it's a good idea to use a bunch and see in what direction they all point (and uns...
by M B
Mon Jun 15, 2015 4:26 am
Forum: Investing - Theory, News & General
Topic: When does the long term start?
Replies: 59
Views: 10294

When does the long term start?

Claiming that the stock market is an investment for the long term is very common, but also very vague. When exactly does the long term start? Is five years long term? or do you have to wait for twenty years? or perhaps thirty years is what it really takes. I looked for criteria that may provide an a...
by M B
Thu Jun 12, 2014 2:42 am
Forum: Investing - Theory, News & General
Topic: Mathematical strategies for stock-bond asset allocations
Replies: 3
Views: 981

Re: Mathematical strategies for stock-bond asset allocations

- I use monthly data starting in the 19th century, not daily or tick-by-tick data from the past few years (two advantages of strategies trading less often is that they are less time consuming, i.e. not a full-time job, and that the trading costs are not as huge an issue); - I deal with stocks as an ...
by M B
Tue Jun 10, 2014 8:17 am
Forum: Investing - Theory, News & General
Topic: Mathematical strategies for stock-bond asset allocations
Replies: 3
Views: 981

Mathematical strategies for stock-bond asset allocations

I have been working on implementing (in R) strategies for stock-bond asset allocations, both technical and based on valuation (e.g. CAPE). The strategies are based on Shiller's long-term historical data for stocks and bonds in the US. The parameters are optimized during the period 1871-1942 and test...
by M B
Mon Aug 05, 2013 3:05 am
Forum: Personal Finance (Not Investing)
Topic: Free online "Financial Literacy" class
Replies: 0
Views: 392

Free online "Financial Literacy" class

An Australian university offers a free online financial literacy course over 4 weeks: https://www.open2study.com/content/fina ... y-cohort-4. Spread to word to those who never listened to your lectures (perhaps for lack of an Australian accent).
by M B
Sat Jun 16, 2012 12:51 pm
Forum: Investing - Theory, News & General
Topic: Do other countries have very low cost index funds?
Replies: 33
Views: 4953

Re: Do other countries have very low cost index funds?

tiresias wrote:what is TER?
total expense ratio, i.e. annual fees.
by M B
Fri Jun 15, 2012 1:50 am
Forum: Investing - Theory, News & General
Topic: Do other countries have very low cost index funds?
Replies: 33
Views: 4953

Re: Do other countries have very low cost index funds?

France has little in the way of low cost index investing. While one can find ETFs with expenses of 0.35%, you need to hold them in an insurance or brokerage account "wrapper" that charges anywhere from 0.75% to 1.5%. So there's no way even a simple index portfolio can come in at under 1% total expe...
by M B
Sun May 27, 2012 3:52 am
Forum: Investing - Theory, News & General
Topic: What are these "Minimum Volatility ETFs"?
Replies: 7
Views: 998

Re: What are these "Minimum Volatility ETFs"?

MSCI currently calculates MSCI Minimum Volatility Indices for the following regions: ACWI Europe EAFE USA Emerging Markets World Should there not be only one (global in the mathematical sense) minimum volatility portfolio? It seems that MSCI uses one algorithm and instead of running a mutual fund b...
by M B
Sat May 05, 2012 2:26 am
Forum: Investing - Theory, News & General
Topic: Index funds have over 14% of equity assets
Replies: 14
Views: 1734

Re: Index funds have over 14% of equity assets

Bongleur wrote:Index funds have over 14% of equity assets
The chart I found is labeled "The share of mutual fund assets that are passively managed has risen". It seems to mean that 14.5% of funds are passive (is it by number of funds or by assets?).
by M B
Sat May 05, 2012 2:23 am
Forum: Investing - Theory, News & General
Topic: Index funds have over 14% of equity assets
Replies: 14
Views: 1734

Re: Index funds have over 14% of equity assets

1210sda wrote:I can't find slide 13.
There are several slides numbered 13. The one is on page 61 (or search for "passive").
by M B
Sat May 05, 2012 2:17 am
Forum: Investing - Theory, News & General
Topic: Do scientists invest scientifically?
Replies: 56
Views: 4064

Re: Do scientists invest scientifically?

3CT_Paddler wrote:Isaac Newton proved a brilliant scientist is just as susceptible to bad investment decisions as any less intelligent person.
Knowledge about investing did make progress since Newton's times. Would Newton make the same mistakes today, or would he have access to good information and know better?
by M B
Thu May 03, 2012 10:03 am
Forum: Investing - Theory, News & General
Topic: Do scientists invest scientifically?
Replies: 56
Views: 4064

Re: Do scientists invest scientifically?

SP-diceman wrote:Brings up the question: What is “scientific” investing?
Rational, thought through, based on logic and facts.
by M B
Thu May 03, 2012 7:16 am
Forum: Investing - Theory, News & General
Topic: Do scientists invest scientifically?
Replies: 56
Views: 4064

Re: Do scientists invest scientifically?

3CT_Paddler wrote:The closest thing to a "science" or truth would be broad based, buy and hold index investing IMO.
Do scientists agree on this more than the average Joe?
by M B
Thu May 03, 2012 6:52 am
Forum: Investing - Theory, News & General
Topic: Do scientists invest scientifically?
Replies: 56
Views: 4064

Do scientists invest scientifically?

Are there studies showing how scientists, engineers, etc. invest?
by M B
Mon Apr 09, 2012 2:36 am
Forum: Investing - Theory, News & General
Topic: Risk, Uncertainty, and Behavioral Pitfalls (wiki)
Replies: 13
Views: 1216

Re: Risk, Uncertainty, and Behavioral Pitfalls (wiki)

For example, if you flip a coin five times and it comes up heads, it is the tendency to believe there is a greater than 50/50 chance the next flip will be tails, even though the odds are still 50/50. I guess what is meant is "if you flip a fair coin ...". For investing, the stock market increases f...
by M B
Fri Mar 30, 2012 10:26 am
Forum: Investing - Theory, News & General
Topic: You, Too, Can Predict Stock Market Returns
Replies: 63
Views: 7174

Re: You, Too, Can Predict Stock Market Returns

Simplegift wrote:Stock Market Returns (6.5%) = Current Dividend Yield (2%) + HIstorical Growth Rate of Dividends/Earnings (4.5%)
Mixing current and historical assumes that the dividend yield is stable over time.
by M B
Fri Mar 30, 2012 10:23 am
Forum: Investing - Theory, News & General
Topic: what we can learn from Norway
Replies: 25
Views: 3454

Re: what we can learn from Norway

larryswedroe wrote:Commodities indices are readily available
Except for gold (and perhaps a few other precious metals), ETFs do not buy commodities but derivatives. So the tracking error is huge, and the end result pretty disappointing.
by M B
Thu Mar 29, 2012 1:24 pm
Forum: Investing - Theory, News & General
Topic: what we can learn from Norway
Replies: 25
Views: 3454

Re: what we can learn from Norway

larryswedroe wrote:The literature is moving to not just beta, size and value, but momentum, carry trade, merger arbitrage, commodities, assets with unique/independent risk characteristics
How do you (or the Norwegians) track these?
by M B
Thu Mar 29, 2012 12:47 pm
Forum: Investing - Theory, News & General
Topic: what we can learn from Norway
Replies: 25
Views: 3454

Re: what we can learn from Norway

While investors have traditionally focused on the equity risk premium as the key source of excess returns, there's a growing consensus in the academic literature that multiple return sources appear to influence asset prices.
Which "multiple return sources"?
by M B
Thu Mar 22, 2012 4:01 am
Forum: Investing - Theory, News & General
Topic: World's worst stock market losses.
Replies: 41
Views: 6485

Re: World's worst stock market losses.

As we have found out in the post 1990 crises, whilst individual markets may crash due to local factors (coups, monetary craziness etc.), global markets will crash when we have global crashes [...] Diversification into other equity markets *helps* but it doesn't protect you substantially against equ...
by M B
Thu Mar 22, 2012 2:53 am
Forum: Investing - Theory, News & General
Topic: Allocation Risk Poll: Does employment matter?
Replies: 8
Views: 733

Re: Allocation Risk Poll: Does employment matter?

A major argument against 100% in stocks is that you may need the money (eg you lost your job) at the bottom of the market.
by M B
Wed Mar 21, 2012 4:41 am
Forum: Investing - Theory, News & General
Topic: Is fixed asset allocation really riskier than you think?
Replies: 6
Views: 1236

Re: Is fixed asset allocation really riskier than you think?

> Returns are highly concentrated: Over the past 11 decades returns were concentrated in just four of those decades, which were unique and unrepeatable: two were post-war recoveries (1920s and 1950s), and two were secular declines in inflation and bond yields (1980s and 1990s). Average returns in t...
by M B
Tue Mar 20, 2012 3:28 am
Forum: Investing - Theory, News & General
Topic: Is fixed asset allocation really riskier than you think?
Replies: 6
Views: 1236

Re: Is fixed asset allocation really riskier than you think?

Another thing that is unrepeatable is 2 world wars.
by M B
Sun Mar 18, 2012 3:26 am
Forum: Investing - Theory, News & General
Topic: Why is 1926 used for most historic risk/return charts?
Replies: 28
Views: 3441

Re: Why is 1926 used for most historic risk/return charts?

some years ago, different mutual fund companies would say that one wouldn't lose money if one kept some money in a mixture of stock and bond mutual funds over a 10-year period; however, because of recent events, including the Great Recession and some charts indicating that for one 10-year period re...
by M B
Fri Mar 16, 2012 3:42 am
Forum: Investing - Theory, News & General
Topic: Risk Figure of Merit
Replies: 22
Views: 1618

Re: Risk Figure of Merit

Using standard deviation you would conclude that stocks are riskier than bonds, regardless of whether you have a year or a century ahead of you. I like to use the bottom 5th percentile for the returns (what has only a 5% probability of happening) over the investment period. It does show that risk ch...
by M B
Wed Mar 14, 2012 2:48 am
Forum: Investing - Theory, News & General
Topic: Market for talks on investing
Replies: 7
Views: 899

Re: Market for talks on investing

HongKonger wrote:
M B wrote:The 500 euro price tag was meant per person, for 2 full days.
Then busy people who have the money to invest wouldn not be able to commit to 2 days straight as they would be busy working.
I am thinking of 2 Saturdays in a row.
by M B
Tue Mar 13, 2012 5:14 am
Forum: Investing - Theory, News & General
Topic: Why Stocks Are Riskier Than You Think-Bodie and Taqqu
Replies: 39
Views: 4901

Re: Why Stocks Are Riskier Than You Think-Bodie and Taqqu

Sammy_M wrote:Expresses many Boglehead views in the beginning, but then concludes with options strategies and a call for structured products.
Structured products may be nice in theory, but are expensive and opaque in practice.
by M B
Mon Mar 12, 2012 3:32 am
Forum: Investing - Theory, News & General
Topic: World's worst stock market losses.
Replies: 41
Views: 6485

Re: World's worst stock market losses.

wade wrote:From Sept. 1929 to June 1932, the nominal drop was 83%, and the price level dropped by 21%. In inflation-adjusted terms, I'm calculating -79% by converting monthly nominal data into monthly real data and repeating the calculation.
The loss was about 75% (real, total return).
by M B
Sun Mar 11, 2012 5:28 am
Forum: Investing - Theory, News & General
Topic: Market for talks on investing
Replies: 7
Views: 899

Re: Market for talks on investing

HongKonger wrote:I think your quoted price is too high though, for that price, I would want like 2 hours a week for 3 weeks - like Saturday morning or evening classes.
The 500 euro price tag was meant per person, for 2 full days.
by M B
Thu Mar 08, 2012 7:36 pm
Forum: Investing - Theory, News & General
Topic: Poll: Will we ever see a market drawdown >75% again?
Replies: 51
Views: 4346

Re: Poll: Will we ever see a market drawdown >75% again?

nisiprius wrote:In any case, I'm not convinced there's any "normal" or "regular" or "typical" amount for a stock drawdown.
There's at least clustering around 45-50%.
by M B
Thu Mar 08, 2012 7:35 pm
Forum: Investing - Theory, News & General
Topic: Poll: Will we ever see a market drawdown >75% again?
Replies: 51
Views: 4346

Re: Poll: Will we ever see a market drawdown >75% again?

What were the dates? I'm staring at the charts in the SBBI yearbook and not seeing 'em. "Since the thirties" implies you are not talking about 1937 through 1941, which in any case was -32%. I'm just excluding the great depression. Worse than 45% real drawdowns are: 37-41, 73-74, 2000-03 and 2007-09...
by M B
Thu Mar 08, 2012 12:45 pm
Forum: Investing - Theory, News & General
Topic: Poll: Will we ever see a market drawdown >75% again?
Replies: 51
Views: 4346

Re: Poll: Will we ever see a market drawdown >75% again?

The fact that the last one was 50% should not "anchor" us on that number. Just because the market only dropped 22% in 1987 didn't mean a 50% drop was vanishingly unlikely. Just because the 2008-2009 drop was 50% doesn't mean a 75% drop is vanishingly unlikely. The largest 4 drawdowns since the thir...
by M B
Thu Mar 08, 2012 10:02 am
Forum: Investing - Theory, News & General
Topic: Market for talks on investing
Replies: 7
Views: 899

Re: Market for talks on investing

NAVigator wrote:The papers on your website are interesting, but may not appeal to all.
The book is a lot more straightforward, rather basic stuff, no prerequisite.
by M B
Wed Mar 07, 2012 12:18 pm
Forum: Investing - Theory, News & General
Topic: Market for talks on investing
Replies: 7
Views: 899

Market for talks on investing

I am thinking of giving talks (in France) based on my book —avatar— and wonder if I can make a living doing so. People certainly don't mind paying thousands of euros in fees and expenses, but would they fork out 500 € for a seminar? Those looking for day trading recipes and other sorts of snake oil ...
by M B
Mon Mar 05, 2012 5:07 am
Forum: Investing - Theory, News & General
Topic: Determine Your Risk Set Point - WSJ
Replies: 47
Views: 4048

Re: Determine Your Risk Set Point - WSJ

The "safety zone" is about how much you have in retirement; whereas risk tolerance is rather about drawdowns, which are temporary losses. The former is a financial risk (not having enough money when you need it), whereas the latter is psychological. The latter sets an upper bound on your allocation ...
by M B
Sun Mar 04, 2012 2:15 am
Forum: Investing - Theory, News & General
Topic: Is 30% (David Swensen) REIT Allocation too much?
Replies: 33
Views: 5315

Re: Getting to "Dublin."

There is more than one road to Dublin .. but strive for Simplicity. If the question is about how much to allocate to real estate then simplicity is irrelevant: 10% in REITs is neither simpler nor less simple than 50%. Only 0% would be simpler, but then it becomes a question of whether , not of how ...