Search found 8725 matches

by Doc
Mon Dec 10, 2018 1:27 pm
Forum: Investing - Theory, News & General
Topic: VBINX closed to new investors? Wow. [Vang. Balanced Index regular shares]
Replies: 8
Views: 1998

Re: VBINX closed to new investors? Wow. [Vang. Balanced Index regular shares]

VANGUARD BALANCED INDEX FD ADMIRAL CL S is available at Schwab. Minimum $3000.
by Doc
Sun Dec 09, 2018 7:47 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

I have a vague recollection that the introduction of TIPS was partly based on developing a market prediction of future inflation. If so it was a complete failure as this theard illustrates. :D
by Doc
Sun Dec 09, 2018 5:04 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

Regarding illiquidity and spreads: It's not only the spread that is the metric but also the size of the bid & offer. A spread of 1 bps on a bid and offer of 100 shares may mean nothing by itself. We need to look at the rest of the book also. And then there has been some mention recently that there a...
by Doc
Sun Dec 09, 2018 8:41 am
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

Your point, that downside price volatility in TIPS is often described as/conflated with illiquidity here, is a good one. I've been guilty of it myself. Before the financial crisis it was a reasonably common theme here that TIPS were a perfectly acceptable choice for 100% of one's bond allocation. T...
by Doc
Sat Dec 08, 2018 3:03 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Understanding TIPS
Replies: 36
Views: 3337

Re: Larry Swedroe: Understanding TIPS

TIPS should be used only for that part of your portfolio that you are going to use for expenses far in the future. Why "far in the future?" A rolling TIPS ladder that has maturing issues every calendar year works just fine for near, mid and far future points. Near term "withdrawals" can be met with...
by Doc
Sat Dec 08, 2018 12:25 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Understanding TIPS
Replies: 36
Views: 3337

Re: Larry Swedroe: Understanding TIPS

I think that way too much focus is given to the "liquidity premium." If it truly does exist, it is miniscule. These are US treasuries that are bought and sold by millions of individuals and institutions. 2008 was an isolated data point that rapidly faded to irrelevance. That would be my guess too. ...
by Doc
Sat Dec 08, 2018 9:17 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Understanding TIPS
Replies: 36
Views: 3337

Re: Larry Swedroe: Understanding TIPS

I think that way too much focus is given to the "liquidity premium." If it truly does exist, it is miniscule. These are US treasuries that are bought and sold by millions of individuals and institutions. 2008 was an isolated data point that rapidly faded to irrelevance. We don't know that will be i...
by Doc
Fri Dec 07, 2018 5:41 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

One other factor to possibly consider is that during the time that TIPS have actually existed, nominal bonds have actually been a more optimal diversifier to stocks. That is, when stocks have gone down, nominals have outperformed TIPS. If this behavior is intrinsic to the investment as opposed to r...
by Doc
Fri Dec 07, 2018 4:51 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

If you look back over the past 100 years or so there were actually 3 periods when there were bad bouts of high inflation. The late 1910s. The 1940s. And the 70s. I think the common linkage is that these were all periods of wartime deficit spending. In the Volker period the Fed changed their objecti...
by Doc
Fri Dec 07, 2018 4:43 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

gmaynardkrebs wrote:
Thu Dec 06, 2018 10:50 pm
I’d be curious why you have a low personal risk for unexpected inflation.
1) We have a significant position in investment real estate which should keep up with inflation at least in the long run.

2) Our personal expenses are not highly correlated with inflation.
by Doc
Thu Dec 06, 2018 7:17 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

If you look back over the past 100 years or so there were actually 3 periods when there were bad bouts of high inflation. The late 1910s. The 1940s. And the 70s. I think the common linkage is that these were all periods of wartime deficit spending. In the Volker period the Fed changed their objecti...
by Doc
Thu Dec 06, 2018 5:17 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

I think in general the market underprices regime change and black swans. Except the swan isn’t really black here because it has happened before- ie the high inflation of the 70s and early 80s. It's been a long time but ... I belive that in 70's and early 80's the Fed's policy was to control the mon...
by Doc
Thu Dec 06, 2018 1:54 pm
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

The 0.25 percent lower expected return can be thought of as the risk premium investors are willing to pay to guarantee a real return. This would go the other way. If investors are paying more to guarantee a real return, the breakeven rate would be 2.5%, not 2% (assuming grok's formulation of 2.25% ...
by Doc
Thu Dec 06, 2018 11:34 am
Forum: Investing - Theory, News & General
Topic: Tips breakevens and illiquidity premia
Replies: 53
Views: 3243

Re: Tips breakevens and illiquidity premia

I think long run fair value breakeven inflation would be about 2.25%. Because the fed targets PCE inflation at 2% and CPI usually runs 25 bps higher. Since 20x10 is at 2.02 that implies. 23 bp illiquidity Premium for long dated tips The 0.25 percent lower expected return can be thought of as the ri...
by Doc
Wed Dec 05, 2018 1:41 pm
Forum: Investing - Theory, News & General
Topic: Morningstar forum gone?
Replies: 11
Views: 1518

Re: Morningstar forum gone?

It's working for me. Premium. :?
by Doc
Wed Dec 05, 2018 11:16 am
Forum: Investing - Theory, News & General
Topic: Morningstar forum gone?
Replies: 11
Views: 1518

Re: Morningstar forum gone?

Every time i've tried to check out what was going on over there to see how it stacked up to the views here in the past week the forum/discuss site has been show as down/broken. Does anyone know if it has been removed? I wasn't able to find much in searching the forum here for recent news on it. The...
by Doc
Wed Dec 05, 2018 8:25 am
Forum: Investing - Theory, News & General
Topic: Vanguard has switched to brokerage only accounts
Replies: 180
Views: 41107

Re: Vanguard has switched to brokerage only accounts

I have no objection to Vanguard Brokerage being improved. I do object to maintaining two platforms forever which will undoubtedly lead to added cost and maybe poorer service for all of us. Can you document that maintaining two platforms will increase costs and lead to poorer service. It's the 21st ...
by Doc
Tue Dec 04, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5943

Re: What percent of Managers beat the market BEFORE fees?

People seem to be looking at this problem of picking an above average manager bass ackwards. As many people have opined picking that better than average manager is is difficult if not impossible. But how about identifying the below average manager. That's not hard. Just eliminate those mangers that...
by Doc
Tue Dec 04, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5943

Re: What percent of Managers beat the market BEFORE fees?

Indeed, same for me. And even if you focus on funds as opposed to fund managers, then they get acquired or they merge or they close doors for other reasons having nothing to do with performance, etc. Or the index funds change their index, merge or otherwise disappear for some reason. Sith happens. ...
by Doc
Tue Dec 04, 2018 12:05 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5943

Re: What percent of Managers beat the market BEFORE fees?

People seem to be looking at this problem of picking an above average manager bass ackwards. As many people have opined picking that better than average manager is is difficult if not impossible. But how about identifying the below average manager. That's not hard. Just eliminate those mangers that ...
by Doc
Mon Dec 03, 2018 5:01 pm
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

Today's auction results for 26-week (aka 6-month) Bill. Term and Type of Security 182-Day Bill CUSIP Number 912796RS0 Price 98.738639 Investment Rate 2.562% Issue Date December 06, 2018 Maturity Date June 06, 2019 Quote at Schwab for this Bill is price = 98.74420, YTM = 2.551%. This is for min qty ...
by Doc
Mon Dec 03, 2018 1:17 pm
Forum: Investing - Theory, News & General
Topic: Treasuries vs Treasury Funds
Replies: 14
Views: 2130

Re: Treasuries vs Treasury Funds

The argument is that when say interest rates rise, funds sell the treasuries at a discount and reinvest in current higher interest rate Treasuries. This will lead to the same return as if holding an individual Treasury to Maturity. There is more to the argument than that. Funds normally do not hold...
by Doc
Sun Dec 02, 2018 9:18 am
Forum: Investing - Theory, News & General
Topic: foreign tax credit
Replies: 12
Views: 935

Re: foreign tax credit

HueyLD wrote:
Sun Dec 02, 2018 9:15 am
Yes, one year carryback and ten year carryforward.

However, your future foreign source income may not be large enough to absorb all the carryforwards.
Thanks, I just received a message from myself to check this out today. Now I can spend the time saved watching the business channels :beer
by Doc
Sun Dec 02, 2018 9:10 am
Forum: Investing - Theory, News & General
Topic: foreign tax credit
Replies: 12
Views: 935

Re: foreign tax credit

Is there a carry forward provision if you can't take all the credit in the current year?
by Doc
Sat Dec 01, 2018 12:53 pm
Forum: Investing - Theory, News & General
Topic: [Understanding volatility in ultrashort bond funds]
Replies: 49
Views: 5221

Re: Ultrashort bond funds in freefall

VUBFX, the Vanguard ultrashort bond fund ... . It has an average effective duration that's about the same as the average effective maturity... https://imgur.com/ToIpMOw.png I'm curious. How does VUBFX have duration longer than maturity? BobK I think it's a derivative thingy. But I don't really care...
by Doc
Sat Dec 01, 2018 11:59 am
Forum: Investing - Theory, News & General
Topic: Intermediate-Term Bond Managers Pull Ahead (of TBM index)
Replies: 4
Views: 380

Re: Intermediate-Term Bond Managers Pull Ahead (of TBM index)

Phineas J. Whoopee wrote:
Sat Dec 01, 2018 11:54 am
I read the article. Assuming by "win" you mean return more over a chosen period of time, of course index funds don't always do that.

Who thinks they do?

PJW
Lot's of Bogleheads. :D

(I added another chart to my last post.)
by Doc
Sat Dec 01, 2018 11:49 am
Forum: Investing - Theory, News & General
Topic: Intermediate-Term Bond Managers Pull Ahead (of TBM index)
Replies: 4
Views: 380

Re: Intermediate-Term Bond Managers Pull Ahead (of TBM index)

Naturally different portfolios will have different returns. A bond manager taking more risk, as long as it's rewarded, should be expected to have a higher fund return than one with less risk. What is there to see here? PJW You need to read the article. The answer is convoluted. But one take away is...
by Doc
Sat Dec 01, 2018 11:47 am
Forum: Investing - Theory, News & General
Topic: [Understanding volatility in ultrashort bond funds]
Replies: 49
Views: 5221

Re: Ultrashort bond funds in freefall

We've seen pretty stable times, not huge jumps in rates or credit spreads as of late. We haven't really seen the risk show up, so to speak (as let's say a 5 percentile or worse outcome). It can get a lot bumpie Not sure what your graph purports to show but here's a price chart with the Vg Ultra Sho...
by Doc
Sat Dec 01, 2018 11:05 am
Forum: Investing - Theory, News & General
Topic: Intermediate-Term Bond Managers Pull Ahead (of TBM index)
Replies: 4
Views: 380

Intermediate-Term Bond Managers Pull Ahead (of TBM index)

At Long Last Morningstar’s Miriam Sjoblom caught my attention. For the first time in since forever, she surmised, the 10-year average return for intermediate-term bond funds was above that of Vanguard Total Bond Market Index (VBMFX). (This article uses that fund as its example, but it applies to al...
by Doc
Fri Nov 30, 2018 8:10 am
Forum: Investing - Theory, News & General
Topic: Why are REITS a separate asset class but healthcare is not?
Replies: 55
Views: 3004

Re: Why are REITS a separate asset class but healthcare is not?

The tax, deprecation and financing of real estate are significantly different than most of the other businesses.
by Doc
Wed Nov 28, 2018 2:41 pm
Forum: Investing - Theory, News & General
Topic: Vanguard lowering Admiral level to $3,000?
Replies: 224
Views: 17143

Re: Vanguard lowering Admiral level to $3,000?

Email from Vanguard received a few minutes ago: Good news: We're making your index funds even better Oboy. And with a link to follow to convert all our shares to Admiral. :beer Followed the link with gusto. Link: Convert your shares Now" Click. Click. Login.... " Error icon No eligible funds found Y...
by Doc
Tue Nov 27, 2018 7:58 am
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

The spread typically is much larger for smaller quantities at Fidelity, and you can also pay significantly more when you buy smaller quantities on the secondary market at Fidelity. I understand why one would want to sell Treasuries in the secondary market. Are there situations where an ordinary inv...
by Doc
Mon Nov 26, 2018 10:54 am
Forum: Investing - Theory, News & General
Topic: Psychological “justifiers” of active management
Replies: 9
Views: 796

Re: Psychological “justifiers” of active management

If I were to try to tie this back to investing theory (discussion went on over beers), with the union = EJ, NW, the non-union = Vanguard, and management = individual investors, there’s an interesting link in that active managers are often firm believers in active management. You have a serious flaw...
by Doc
Sun Nov 25, 2018 3:20 pm
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

Arby wrote:
Sun Nov 25, 2018 2:15 pm
If you want to sell before it matures there is a charge and a Bid/Ask spread.
There is no charge to buy or sell a Treasury online at Fidelity, Schwab or Vanguard. There will be a bid/ask spread.

There is also no fee and no spread to buy at auction from these brokers at least online.
by Doc
Sun Nov 25, 2018 11:17 am
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

indexonlyplease wrote:
Sun Nov 25, 2018 9:40 am
I see Schwab charges 25 dollars.
Online:
Schwab wrote:Treasury Bonds, Treasury Bills, Treasury Notes and TIPS $0
The $25 is for broker assisted trades at Schwab.
Fidelity wrote:U.S. Treasury: Auctions and secondary issues online $0
by Doc
Sun Nov 25, 2018 11:02 am
Forum: Investing - Theory, News & General
Topic: What is your allocation to U.S. and International?
Replies: 119
Views: 7051

Re: What is your allocation to U.S. and International?

I don't think of this the way most responders do. My equity target is 75/25 but that 25 foreign is small developed. Having large international does little for diversity because large US and large foreign are mostly international firms that are all swimming in the same pool. So you get little diversi...
by Doc
Fri Nov 23, 2018 12:22 pm
Forum: Investing - Theory, News & General
Topic: Small Value: 15 years of underperforming
Replies: 142
Views: 10935

Re: Small Value: 15 years of underperforming

Why not compare IJS to the equivalent growth index, IJT? Yes, it's good to compare two funds that haven't played "random index" over their life. As an individual investor, your personal "experiences" in investing in these asset classes, even assuming you stayed the course, would depend on your time...
by Doc
Fri Nov 23, 2018 8:51 am
Forum: Investing - Theory, News & General
Topic: Transfers Between Vanguard Accounts?
Replies: 10
Views: 1851

Re: Transfers Between Vanguard Accounts?

Since these cases are involving a change of ownership for the shares, forms will be needed. Possibly you feel like the owners are the same, but a transfer from an individual to a joint account as sell as from parent to child (UTMA) are certainly changes in ownership and SSN. I would think you would...
by Doc
Fri Nov 23, 2018 8:29 am
Forum: Investing - Theory, News & General
Topic: Transfers Between Vanguard Accounts?
Replies: 10
Views: 1851

Re: Transfers Between Vanguard Accounts?

Since these cases are involving a change of ownership for the shares, forms will be needed. Possibly you feel like the owners are the same, but a transfer from an individual to a joint account as sell as from parent to child (UTMA) are certainly changes in ownership and SSN. I would think you would...
by Doc
Thu Nov 22, 2018 12:32 pm
Forum: Investing - Theory, News & General
Topic: Why Active Funds Have Outperformed in Theory
Replies: 20
Views: 2163

Re: Why Active Funds Have Outperformed in Theory

VTWO tracks the Russell 2000. Hhmmnn, it doesn't show up in Vanguard's ETF filter. Maybe because they don't like it themselves. Vanguard Russell 2000 ETF (VTWO) Consider Vanguard Small-Cap ETF, which tracks the same market segment at a lower cost. Compare now OK I see the underlying mutual fund is ...
by Doc
Thu Nov 22, 2018 11:55 am
Forum: Investing - Theory, News & General
Topic: Why Active Funds Have Outperformed in Theory
Replies: 20
Views: 2163

Re: Why Active Funds Have Outperformed in Theory

Even now, Vanguard's ETF tracking the Russell 2000 has trailed the index by 0.01% since the 2010 inception, which means that it has covered its entire 0.15% expense ratio with trading techniques. (For comparison, the S&P 600 ETF has trailed by 0.14%, which means that it matched the index before exp...
by Doc
Thu Nov 22, 2018 11:17 am
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

What will happen is that the Fed will keep raising rates slowly until there is a recession or the stock market crashes, at which point they will cut rates to emergency lows again. That indeed might happen but their intent is to get rates back to where they were historically and to work off their ba...
by Doc
Thu Nov 22, 2018 11:08 am
Forum: Investing - Theory, News & General
Topic: Why Active Funds Have Outperformed in Theory
Replies: 20
Views: 2163

Re: Why Active Funds Have Outperformed in Theory

There were some pretty poor indexes used by some of the Vanguard funds in the earlier days. These have mostly been corrected with funds using indexes designed for low turnover and minimizing front running and other issues. We should leave Vangaurd out of this discussion. I think Vanguard's many cha...
by Doc
Thu Nov 22, 2018 10:55 am
Forum: Investing - Theory, News & General
Topic: Why Active Funds Have Outperformed in Theory
Replies: 20
Views: 2163

Re: Why Active Funds Have Outperformed in Theory

One issue I noticed is the choice of index. M* compared each category to the corresponding Russell index. The Russell indexes used to change annually according to a fixed formula, and the Russell 2000 has long been a popular investment for small-cap indexeres, which made it vulnerable to front-runn...
by Doc
Thu Nov 22, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: Vanguard lowering Admiral level to $3,000?
Replies: 224
Views: 17143

Re: Vanguard lowering Admiral level to $3,000?

And I just finished memorizing all the Investor class Vanguard index ticker symbols! Now I have to start memorizing all the Admiral index ticker symbols. bill Good problem to have... :beer But when you get to be my age you have to re-memorize them every day so it's not any additional work. :(
by Doc
Thu Nov 22, 2018 9:03 am
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

As an aside, it's sometimes hard to get the spreadsheet YIELD function to come up with exactly the same yield displayed by a broker. I've even seen Fidelity and Vanguard display the exact same price but a slightly different yield, but maybe that was for CDs. Or it could be that their price actually...
by Doc
Wed Nov 21, 2018 5:27 pm
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

Yes, this explains it. Good sleuthing. I didn't think of looking at the 52-week bill issued about six months ago, but that's it. I didn't look either. As ofckrupke noted the current auction announcement has the info. A coupon bond is a little different. The Treasury won't know if the auction will p...
by Doc
Wed Nov 21, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: Why Active Funds Have Outperformed in Theory
Replies: 20
Views: 2163

Re: Why Active Funds Have Outperformed in Theory

Sure, but unfortunately I don't have a way to buy active funds without paying fees, so... So ... buy active funds that have low fees. This is my general screen: (Equity Style Box = whatever I'm looking for and (Expense Ratio <= Category average) and (No-Load Funds = Yes) and (Turnover Ratio <= Cate...
by Doc
Wed Nov 21, 2018 10:44 am
Forum: Investing - Theory, News & General
Topic: What's in your Investor Policy Statement about Bear Markets?
Replies: 52
Views: 3485

Re: What's in your Investor Policy Statement about Bear Markets?

Mine isn't written. I re-balance at -5pts from target. I am exactly on target today. I have a long way to go. Since the accepted definition of a "bear market" is a drop of 20% and I have a 50/50 AA target a bear market would put me at my 5% rebalncing point if I was actually at 50/50 when that bear...
by Doc
Wed Nov 21, 2018 10:15 am
Forum: Investing - Theory, News & General
Topic: Prime MM vs 6-month Treasury in IRA
Replies: 91
Views: 9400

Re: Prime MM vs 6-month Treasury in IRA

The CUSIPs are different. The CUSIP for the 11/23/2018 issue is 912796QH5, while the CUSIP for the one issued 5/24/2018 is 912796QK8. The 5/24/18 bill QK8 is a 26 week bill. We are looking for a 52 week bill that will mature on the same date as the 26 week bill just auctioned. That 52 week bill is ...