Search found 994 matches

by FillorKill
Wed Dec 28, 2016 5:16 pm
Forum: Investing - Theory, News & General
Topic: Expected returns 2017-2047
Replies: 30
Views: 4206

Re: Expected returns 2017-2047

0) Atrocious: Neg Real
1) Bad: 0% Real
2) OK: 2% Real
3) Good: 4% Real
4) Spectacular: 6% Real
by FillorKill
Sat Dec 24, 2016 11:46 am
Forum: Investing - Theory, News & General
Topic: If day trading works, shouldn't there be successful companies with proven track record?
Replies: 20
Views: 3085

Re: If day trading works ,,shouldn't there be successful companies with proven track record?

peter1a wrote:Isn't there a higher chance that renesaince returns are just pure luck, that is being justified by technical explanation?
No. This isn't luck.
https://www.bloomberg.com/news/articles ... ackest-box
by FillorKill
Fri Dec 23, 2016 3:41 am
Forum: Investing - Theory, News & General
Topic: Vanguard Sector Bond Funds - Lowered Costs
Replies: 21
Views: 3020

Re: Vanguard Sector Bond Funds - Lowered Costs

triceratop wrote:It appears as if the entire Vanguard Sector Bond portfolio saw cost reductions, effective today.
It appears as if the entire Vanguard Sector Bond portfolio saw price reductions, commencing with the conclusion of the presidential election :P
by FillorKill
Mon Dec 19, 2016 4:43 pm
Forum: Investing - Theory, News & General
Topic: Index funds is the reason for overvalued market
Replies: 23
Views: 4322

Re: Index funds is the reason for overvalued market

rbaldini wrote:Is the market overvalued?
Price is truth.
by FillorKill
Thu Dec 15, 2016 5:23 pm
Forum: Investing - Theory, News & General
Topic: Deleted
Replies: 47
Views: 5691

Re: winning game, sell stocks despite high bond prices?

letsgobobby wrote:Appreciate the thoughts. We are overweight US stocks especially large cap and all of our VTI/VOO equivalent is in taxable; we either have to incur capital gains or donate to rebalance.
You've been in this through both of the last two 50% equity declines and all of the other less impressive pull-backs along the way.... Which is my way of implying surprise that you don't have loss carryforwards to use in rebalancing the taxable account. Hmmm. Wouldn't have guessed that.
by FillorKill
Thu Dec 15, 2016 4:19 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4652797

Re: U.S. stocks in freefall

Doom&Gloom wrote:Freefall ain't what it used to be.
This time is different.
by FillorKill
Sat Dec 10, 2016 9:12 am
Forum: Personal Finance (Not Investing)
Topic: What Can One Do To Decrease Dividend Taxes?
Replies: 27
Views: 4871

Re: What Can One Do To Decrease Dividend Taxes?

The idea of selling before each dividend is a poor one. First of all, you will generate a fair amount of cost in commissions and the bid-asked spread, most likely more cost than the tax cost of the dividend. More importantly, you will trigger capital gains tax prematurely. This can only be a reasonable consideration in highly specialized circumstances. I have more than what I consider a lifetime supply of loss carryforwards. I expect to die with my taxable account intact. Additionally, the counterpoint to the step-up in basis upon death is the fact that unused loss carryforwards are sacrificed. For these reasons I have traded-around dividends at times. Consider the following scenario: say I have a 1000 share position in VOO and my basis is...
by FillorKill
Sun Dec 04, 2016 12:13 pm
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs Less Tax Efficient Than Other ETFs?
Replies: 37
Views: 5842

Re: Vanguard ETFs Less Tax Efficient Than Other ETFs?

I stand corrected. But from an earlier post in this thread: "However, I have read the following from morningstar. An ETF has the option to sell underlying shares, and not just exchange them with authorized participants. So it can also accumulate cap losses that can be used to offset any cap gains resulting from changes in the portfolio." So my take is that ETF providers have the same ability to tax loss harvest as mutual fund providers. But ETF providers have a greater ability to minimize cap gains than mutual fund providers. 'generally' :happy I was mostly trying to point out that in-kind, which is the typical day-to-day process for ETFs, is a non taxable event either way which seemed to have gotten lost in the thread. ETF spons...
by FillorKill
Sun Dec 04, 2016 11:40 am
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs Less Tax Efficient Than Other ETFs?
Replies: 37
Views: 5842

Re: Vanguard ETFs Less Tax Efficient Than Other ETFs?

However, the same also applies to net redemptions by ETF owners; portfolio managers could choose to exchange highest basis securities instead of lowest base securities. But hopefully for the fund owners, the net direction of the NAV is up, and this is especially relevant to buy and hold owners. So IMO, minimizing cap gains is more important than maximizing tax loss harvest opportunities. And ETFs are better able than mutual funds to minimize cap gains. But there's a fly in that ointment. ETFs generally create and redeem via in-kind transactions with APs and MF shares are generally created and extinguished via directly transacting in the marketplace. The reason that in-kind is so effective at eliminating potential gains is precisely the rea...
by FillorKill
Sun Dec 04, 2016 7:50 am
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs Less Tax Efficient Than Other ETFs?
Replies: 37
Views: 5842

Re: Vanguard ETFs Less Tax Efficient Than Other ETFs?

For my needs and those of many other investors, ETFs are a better vehicle overall than open ended mutual funds. Vanguard ETFs are definitely competitive with nonVanguard ETFs. But that's because of Vanguard's cost advantage; IMO, the structure of Vanguard's ETFs is overall inferior to those of other open ended ETFs. And that cost advantage is what also keeps the number of Vanguard mutual fund units increasing, which is important for Vanguard ETF owners. I don't see that cost advantage disappearing, at least in the near future. IMO your analysis is incomplete at least in regard to VG equity funds. You identify the tax advantage that the ETF share class has on the dual-structure portfolio via pushing the lowest basis securities out of the po...
by FillorKill
Wed Nov 30, 2016 3:44 pm
Forum: Personal Investments
Topic: Roth IRA contributions 2017
Replies: 11
Views: 3662

Re: Roth IRA contributions 2017

Thus, there are no bad outcomes for investing the money right away in a taxable account instead of parking it in a savings account while waiting for January to come around. Why wait until January? I've laid this out a couple of times before so I'll just paste-in a previous explanation from a couple of years ago: "Be advised: I’m presenting this strategy (again) for that small population of posters & lurkers who will find this potentially actionable. If you’re big on the ‘time in market’ concept then here are, potentially, a couple of extra days for you to enjoy. This is minutia in the extreme. You have been warned. Commit further time to reading this post at your own discretion. In January I mentioned in an IRA thread that I made ...
by FillorKill
Thu Nov 17, 2016 4:46 pm
Forum: Investing - Theory, News & General
Topic: Muni bonds are getting killed. Are you bailing out?
Replies: 88
Views: 21461

Re: Muni bonds are getting killed. Are you bailing out?

cusetownusa wrote:By high, sell low...that's my motto. :wink:
It hasn't worked in the past, but there's a first time for everything :P
by FillorKill
Tue Nov 15, 2016 5:37 pm
Forum: Investing - Theory, News & General
Topic: Muni bonds are getting killed. Are you bailing out?
Replies: 88
Views: 21461

Re: Muni bonds are getting killed. Are you bailing out?

lostdog wrote:What happened with staying the course?
Be reasonable - it's been a week. :D
by FillorKill
Tue Nov 15, 2016 5:23 pm
Forum: Personal Finance (Not Investing)
Topic: Tax bomb at 70 1/2
Replies: 71
Views: 14915

Re: Tax bomb at 70 1/2

...deduction bundling to produce alternating higher v lower taxable income years. High deduction/lower taxable income years augment income from high tax sources - traditional space. Higher income years draw from ROTH &/or take highest cost basis cap gains washed against loss carryforwards....
by FillorKill
Tue Nov 15, 2016 5:11 pm
Forum: Personal Finance (Not Investing)
Topic: Tax bomb at 70 1/2
Replies: 71
Views: 14915

Re: Tax bomb at 70 1/2

Lowest expected returning assets in traditional space, highest in ROTH, TLH aggressively, spending out of the taxable account prior to SS/RMD to keep the distribution income in check....
by FillorKill
Mon Nov 14, 2016 3:51 pm
Forum: Personal Investments
Topic: EM buying opportunity? [Emerging Markets]
Replies: 35
Views: 7007

Re: EM buying opportunity?

selftalk wrote:Why not buy a total world etf or fund and forget all this market timing ?
Because the day would come that I couldn't resist TLH'ing it. So, I'd go to similar proportions of US/ex-US funds (VTI/VXUS). Then one of those would inevitably underperform and I would TLH that into the underlying components in their appropriate proportions (VEU/VSS for VXUS as an example). Then one of those would underperform and I would TLH that into....

That nonsense would never end so, the obvious choice is keeping a leveraged 38 fund slice & dice portfolio with algorithmically determined (hourly during market hours) rebalance, TLH and tilt proportions. This is simplicity itself. Taylor told me about it.
by FillorKill
Fri Nov 11, 2016 5:51 am
Forum: Investing - Theory, News & General
Topic: Today was an RBD ... [Really Bad Day]
Replies: 34
Views: 11038

Re: Today was an RBD ... [Really Bad Day]

inbox788 wrote:Slowing Chinese economy is doing more to bring down EM indices. Successful Singles Day will help stimulate the economy, so it should help EM rise. All in all, it's volatile, but full sail ahead.
Per capita GDP growth and real stock returns have been negatively correlated. Economic growth might make China a nicer place to live for those successful singles but it isn't as likely to do our EM equity investments much good. :|
by FillorKill
Thu Nov 10, 2016 6:00 pm
Forum: Personal Investments
Topic: portfolio advice
Replies: 25
Views: 3550

Re: TSM, TBM, TISM, TIBM, REIT still a good Portfolio for 2017??

jafcorrea wrote:"What do you think?

any other good Portfolio funds suggestions ?"
VBR/VIOV/VOE/IVOV/VWO/VSS
by FillorKill
Thu Nov 10, 2016 5:57 pm
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 18663

Re: Slipping last few days- time to buy now or wait until after 11/8?

Tamalak wrote:You weren't wrong. S&P futures were down 5% when Mr. You Know Who was winning - and then promptly recovered the next day.
Maybe so but what the mini is doing at 10 pm isn't actionable by 99.9% of Bogleheads who generally access equities via MF and ETF share classes of index funds. For those 99.9% that 5% drop wasn't accessible. If you sold Vanguard's S&P 500 etf into the close on Tuesday you got a price of 196.58 and buying the opening cross on Wednesday got you back in at 194.94. Well below 1% for your trouble, not to mention the risk of being under exposed to equities which could have just as easily opened up 2%. Even if Fudgie would have bagged a 5% round trip it would have been simple luck (and terrible investing strategy).
by FillorKill
Wed Nov 09, 2016 4:00 pm
Forum: Investing - Theory, News & General
Topic: Today was an RBD ... [Really Bad Day]
Replies: 34
Views: 11038

Re: Today was an RBD ...

CaliJim wrote:Please...save me the analysis... which asset class. Long bonds? (which I don't own)
My guess is livesoft was talking about EM - but duration had a bad hair day too - ZROZ down 6.6%
by FillorKill
Sun Oct 30, 2016 10:12 am
Forum: Investing - Theory, News & General
Topic: Impact of fleeing index investors on Index Mutual Funds: studies?
Replies: 32
Views: 6726

Re: Impact of fleeing index investors on Index Mutual Funds: studies?

Further, what don't I understand about index mutual funds if many of my fellow shareholders of the mutual fund abandon ship? Nothing. You get your pro rata share of gains and losses just like everyone else with similar exposure be that through a fund pursuing the same objective, holding the underlying securities, etc. If you mean what happens to a particular fund in the face of exceptionally large redemptions then there are a few tools used to ensure fund assets are priced/disposed of at FMV: 1. The fund has up to seven days to pay the proceeds from redemptions to investors 2. The fund reserves the right to redeem in-kind 3. In an emergency situation where it is not practical to dispose of securities or determine FMV then special relief fr...
by FillorKill
Fri Oct 28, 2016 4:35 pm
Forum: Investing - Theory, News & General
Topic: Impact of fleeing index investors on Index Mutual Funds: studies?
Replies: 32
Views: 6726

Re: Impact of fleeing index investors on Index Mutual Funds: studies?

...that the S.E.C. may not properly understand the risks borne by index mutual fund investors if investors flee those funds en masse. The author additionally pointed out that investors may not understand the risks. "the reality is that mutual funds are ultimately owned by tens of millions of individual investors, each with their own time horizons, risk preferences, and investment goals. Even under the most stressful market conditions, our experience is wholly inconsistent with the conjecture that mutual funds are susceptible to mass redemptions. Mutual fund investors simply are not inclined to redeem during times of market stress.... In fact, in the history of the mutual fund industry, a run on equity and bond funds has never material...
by FillorKill
Tue Oct 18, 2016 6:17 pm
Forum: Personal Finance (Not Investing)
Topic: Crossing the line (becoming a miser)
Replies: 71
Views: 13340

Re: Crossing the line (becoming a miser)

I have an acquaintance that's an Ascetic which looks like miserliness from afar but doesn't have anything to do with money.
by FillorKill
Thu Oct 13, 2016 5:13 pm
Forum: Investing - Theory, News & General
Topic: Exchange Fund, NOT ETF
Replies: 4
Views: 943

Re: Exchange Fund, NOT ETF

If you have a concentrated equity position - a usual prerequisite to interest in these vehicles - then exchange funds, variable forward contracts and equity collars among other vehicles/strategies can be used depending on your goals. Presumably you want diversification, to hedge and/or capital gain deferral. Most of those typically recommended solutions are comparatively expensive and complicated. For all we know your ESPP may only be 10 or 20% of your total portfolio which is a very different situation than if it is 80 or 90%. Depending on how concentrated you really are, simpler, less expensive options may suffice. A preferable solution might be building a diversified portfolio around the single-stock position; if you're too concentrated ...
by FillorKill
Tue Oct 11, 2016 4:14 pm
Forum: Investing - Theory, News & General
Topic: "Free Lunch" - secondary brokered CDs?
Replies: 12
Views: 2697

Re: "Free Lunch" - secondary brokered CDs?

Theoretical wrote: It's not a free lunch. Unlike treasuries, you might not have access to your money in a financial crisis to buy stocks at pennies on the dollar if you want to re-balance. 99%+ of the time, the partial illiquidity of an EWP (and risk of temporary total illiquidity) is worth the risk and pays off.
In context it is a free lunch. Once you've decided to accept the relative illiquidity of the brokered CD market, then obtaining a yield of 1.9 via secondary market v 1.7 initial issue, all else equal, is an unequivocal win. If you take a step back to consider other options, such as direct CDs, then that's a different story.
by FillorKill
Sun Oct 02, 2016 3:51 pm
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs vs. Index Funds
Replies: 20
Views: 4639

Re: Vanguard ETFs vs. Index Funds

Earl Lemongrab wrote:Not sure what you mean. You can, if you want, reinvest ETF distributions just as you would regular mutual funds. I don't to avoid fractional shares and to direct new money to lagging allocations.

Earl
That doesn't help. An ETF goes ex and trades at a price reflecting the distribution, you, however, don't get the distribution back into the market if reinvesting (or the cash) for several days. MF will pay or reinvest with much less of a time interval from record date. Advantage: MF (or use a work-around).
by FillorKill
Sun Oct 02, 2016 8:34 am
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs vs. Index Funds
Replies: 20
Views: 4639

Re: Vanguard ETFs vs. Index Funds

Not significant and rarely mentioned - although annoying to me- is the cash drag of the ETF share class. I tend to avoid it in this way: in anticipation of quarterly distributions I will take a look at what I need to buy to move toward targets and the dollar value of distributions. In instances where I will need to buy into ETFs I will make the purchases on the respective ex dates and then let the actual distributions flow back and replenish cash expenditure used in advance of actual distributions. This pretty well eliminates the cash drag. YMMV.
by FillorKill
Fri Sep 30, 2016 4:07 pm
Forum: Personal Investments
Topic: Anyone feel like ripping this asset allocation to shreds?
Replies: 58
Views: 6108

Re: Anyone feel like ripping this asset allocation to shreds?

seekinganswers wrote: Here's an update. Thoughts?

------------------------------------------
---------UPDATED AA---------

PROCESS: Allocation rate of 20K/month, rebalancing by adding rather than selling. Do this for 4 years - 2017 - 2020.

---------
Big step in the right direction - you've done yourself a favor.
by FillorKill
Thu Sep 29, 2016 3:58 pm
Forum: Personal Investments
Topic: Anyone feel like ripping this asset allocation to shreds?
Replies: 58
Views: 6108

Re: Anyone feel like ripping this asset allocation to shreds?

seekinganswers wrote:Purchasing power preservation for about 40 years with an ever decreasing need to purchase...

...PROCESS: Move cash into these allocations at rate of 30K/quarter, rebalancing by adding rather than selling. Do this for 8-10 years - roughly 2017 - 2027.
Your plan is to spend 20-25% of your investment horizon getting to your stated AA? You'd probably be better off with a more conservative AA implemented in a much shorter period. Your actual AA across the 40 year period is already much more conservative than your target as you take (up to) a decade to get there.
by FillorKill
Wed Sep 28, 2016 4:36 pm
Forum: Investing - Theory, News & General
Topic: Why are tax-exempt money market yields so high?
Replies: 27
Views: 7932

Re: Why are tax-exempt money market yields so high?

Kenneth Almquist wrote:Does anybody have any idea what is going on here?
Keep in mind that the SEC yield for a MMF is annualized based on the previous 7 days distributions. Check back next week. :D
by FillorKill
Tue Sep 27, 2016 5:30 pm
Forum: Personal Finance (Not Investing)
Topic: How it really feels to have investments during a bear market?
Replies: 74
Views: 10146

Re: How it really feels to have investments during a bear market?

JoMoney wrote:I remember wishing I had more money to invest during some of the big drops... and then being amazed at how much further it continued to fall. Day after day of huge volatile swings, but for the most part I 'stayed the course' and continued my regular investments in what is pretty much an all stock portfolio.
:D That sounds familiar. I started to think I was just shoveling perfectly good liquidity into an incinerator. Which for several months proved to be true. TLH'ing positions I'd held for 3 or 5 or 7 trading days got a bit tiresome too. You run out of partner funds in a hurry and wonder if you'll ever really need 150 years worth of loss carryforwards....
by FillorKill
Tue Sep 27, 2016 4:31 am
Forum: Investing - Theory, News & General
Topic: High yield bonds and GNMA's in a portfolio, since 1988
Replies: 10
Views: 2181

Re: High yield bonds and GNMA's in a portfolio, since 1988

Only because of the discreteness of Portfolio Visualizer calculations. You can see that the Sharpe ratio when including VSGBX falls slightly from 1.09 to 1.07, which should not happen when adding a fund choice. I have emailed the creator of the site, and he admits it is a problem, which can be solved by generating more points on the efficient frontier. Portfolio Visualizer is a fine web site, but it is worth checking its results with other programs. OK you made me look. There's more to it than just that. The projections the program is using are exceedingly optimistic. Additional points on that frontier would be helpful but that's just one aspect of the issue. As an example, from your analysis you have optimization results that show a weigh...
by FillorKill
Tue Sep 27, 2016 3:52 am
Forum: Investing - Theory, News & General
Topic: High yield bonds and GNMA's in a portfolio, since 1988
Replies: 10
Views: 2181

Re: High yield bonds and GNMA's in a portfolio, since 1988

Admittedly I'm a risk-on-the-equity-side investor. In theory GNMA is a lose/lose proposition for the mortgagor and a win/win for the mortgagee. But the rates on GNMAs allow for that, as investors are aware of the risk. GNMAs are backed by the US Government, but they yield significantly more than Treasury bonds of the same duration; investors demand the higher yields because they will gain less if rates fall and lose more if rates rise. There is no free lunch, and in this case, the free lunch would apply if you could buy Treasuries and sell equal-yielding GNMAs short. Sure; they're a spread product and the option-adjusted spread may or may not adequately compensate that risk in future periods. If that spread didn't exist the demand for the ...
by FillorKill
Mon Sep 26, 2016 4:37 am
Forum: Investing - Theory, News & General
Topic: High yield bonds and GNMA's in a portfolio, since 1988
Replies: 10
Views: 2181

Re: High yield bonds and GNMA's in a portfolio, since 1988

According to Portfolio Visualizer, however, since 1988 (based on data availability), the highest Sharpe ratio portfolio choosing among.... VFINX Vanguard 500 Index Fund VUSTX Vanguard Long-Term Treasury Fund VFIIX Vanguard GNMA Fund VWESX Vanguard Long-Term Investment Grade Fund Investor Shrs VWEHX Vanguard High Yield Corporate Fund has been Optimized Portfolio Allocation Ticker Name 02.22% VFINX Vanguard 500 Index Fund 86.07% VFIIX Vanguard GNMA Fund 11.71% VWEHX Vanguard High Yield Corporate Fund with Sharpe of 1.09. Admittedly, if I exclude VWEHX, the portfolio of Optimized Portfolio Allocation Ticker Name 06.06% VFINX Vanguard 500 Index Fund 93.94% VFIIX Vanguard GNMA Fund This occurs because VFIIX had the highest Sharpe ratio, 1.01. I...
by FillorKill
Sun Sep 25, 2016 9:36 am
Forum: Personal Investments
Topic: IRA CD question
Replies: 32
Views: 4298

Re: IRA CD question

Rob5TCP wrote:If you choose the brokered route; you might want to purchase several smaller ones that you could sell to cover your RMD.
But your broker would presumably have the best answer.
With of brokered CDs you may make a larger purchase, say an initial issue purchase of 50K but you're buying 50 1K par CDs. You can sell using the number of increments that meets your needs.
by FillorKill
Sun Sep 25, 2016 8:38 am
Forum: Investing - Theory, News & General
Topic: Selling in October
Replies: 43
Views: 5065

Re: Selling in October

You believe that you can outperform an investor bearing equity risk 12/12 of the time by doing so 11/12 of the time?
by FillorKill
Sun Sep 25, 2016 7:31 am
Forum: Investing - Theory, News & General
Topic: High yield bonds and GNMA's in a portfolio, since 1988
Replies: 10
Views: 2181

Re: High yield bonds and GNMA's in a portfolio, since 1988

Beliavsky wrote:Should fixed income portfolios be tilted towards GNMA bonds? In optimizations they push out Treasuries and investment grade corporate bonds.
In future periods will the option-adjusted spread adequately or inadequately compensate you for negative convexity? That is the question....
by FillorKill
Tue Sep 20, 2016 7:56 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Premium
Replies: 11
Views: 2616

Re: Small Cap Premium

JoMoney wrote:But even the S&P Small-Cap 600 was outperformed by the S&P Mid-Cap 400 over the course of it's existence which pokes some holes in the idea that there's a "premium" for smaller.
In the interest of fairness let's add the 500 TR & VG TSM to that chart and observe the results:

S&P 400: 121055.68
S&P 600: 100459.29
VTSMX: 69112.47
S&P 500: 69105.53
by FillorKill
Tue Sep 06, 2016 4:14 pm
Forum: Personal Consumer Issues
Topic: What makes people succeed?
Replies: 98
Views: 14409

Re: What makes people succeed?

VictoriaF wrote:Right. Livesoft's glass is greener {laughing}

Victoria
"The point is, ladies and gentleman, that green, for lack of a better word, is good. Green is right, green works. Green clarifies, cuts through, and captures the essence of the evolutionary spirit. Green, in all of its forms; green for life, for money, for love, knowledge has marked the upward surge of mankind".
by FillorKill
Tue Sep 06, 2016 4:04 pm
Forum: Personal Consumer Issues
Topic: What makes people succeed?
Replies: 98
Views: 14409

Re: What makes people succeed?

VictoriaF wrote:Livesoft has over 49,000 posts, and I have over 15,000 posts. Should I see my Bogleheads glass as one-third full or two-thirds empty? It is THE question.

Victoria
livesoft has 49150 posts/1.64% of all posts/14.14 posts per day.
You have 15760 posts/.53% of all posts/4.53 posts per day.

Maybe you should just admire his glass....
by FillorKill
Mon Aug 15, 2016 4:35 pm
Forum: Investing - Theory, News & General
Topic: Positive Aspect Of Currency Risk?
Replies: 16
Views: 1819

Re: Positive Aspect Of Currency Risk?

One investors 'currency risk' is another investors 'currency diversification'.

I'm with GMO on this one: https://www.gmo.com/docs/default-source ... f?sfvrsn=6
by FillorKill
Sun Aug 07, 2016 10:48 am
Forum: Investing - Theory, News & General
Topic: How much international stock? A suggestion.
Replies: 754
Views: 163444

Re: How much international stock? A suggestion.

P1: 100% US Market
P2: 50/50 US Market/Int Market (annual rebalance)

According to visualizer, from 1972-2015 one of these portfolios had a Sharpe of .37 and a Sortino of .63 while the other had a Sharpe of .37 and a Sortino of .63.

Can you guess which is which?
by FillorKill
Fri May 13, 2016 8:28 am
Forum: Personal Investments
Topic: What's your EM tilt and why?
Replies: 43
Views: 5157

Re: What's your EM tilt and why?

docbrown wrote:For those of you who have an emerging markets tilt, how much is it and what is your justification for that amount?
About 23% of portfolio ATM or thereabout. Why? Beyond any sound investing rationale it's the mystery meat intrigue I find irresistible. Like buying a crab salad sandwich out of a vending machine in a parking garage; you don't really know what you have but you know it's risky, so you cross your fingers and hope for the best. :shock:
by FillorKill
Thu Apr 28, 2016 5:07 pm
Forum: Investing - Theory, News & General
Topic: Selling in May and Walking Away?
Replies: 106
Views: 15166

Re: Selling in May and Walking Away?

chicagoan23 wrote:...I know that data has shown it to be a strategy that doesn't work long-term, and I know that a long-term investing horizon makes short-term moves a blip on the radar, and I know moving out of the market is easy, but timing the return to the market is very, very hard.
If you're a long term investor....
by FillorKill
Thu Apr 28, 2016 10:26 am
Forum: Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 29
Views: 4455

Re: Critique Fixed Income Strategy - GNMA Dominance

I think I'll have to increase duration with some of the longer duration Fidelity funds that also add more credit risk. EDIT: Forgive my math but from your link, as of today, the slope is from 1-3 is 0.215 and the slope from 3-7 is 0.17. Your algebra may be better than my statement :D I last looked earlier in the month at which point the steepest segment among the 1-3, 3-5, 5-7 ranges was 3-5, followed by 5-7 and then 1-3. Looks that that arrangement has shifted a bit. Not to obscure the point of the value in adding a little term (I just grabbed Monday's numbers but sub-in yesterday if you'd rather the results will be too similar to matter either way). Assuming a static yield curve, consider the annual return of buying a 7 @ 1.69, receiving...
by FillorKill
Wed Apr 27, 2016 1:44 pm
Forum: Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 29
Views: 4455

Re: Critique Fixed Income Strategy - GNMA Dominance

What's the maximum of your fixed income (exclusive of Ibonds) would you put in the GNMA or in Mortgages to keep from being overly concentrated? Does it make sense to view my own mortgage as a short position on the same sector? If rates go down to 2.5 no points, no closing 10 year, I would refinance myself. In that case I'm 41%-14% = 27% in mortgages. Maybe I should add some Fidelity Investment Grade just to get some credit diversity. I think that's my next most attractive option. No problem. MBS constitutes a large portion of the US investment grade bond market. While not a fully comprehensive representation of that market, total bond has an allocation of around 22% to MBS. Not including your own mortgage you're approaching double that. It...
by FillorKill
Wed Apr 27, 2016 8:47 am
Forum: Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 29
Views: 4455

Re: Critique Fixed Income Strategy - GNMA Dominance

...are you saying that there is no reason for me to be in GNMA vs treasuries and that the extra yield to compensate for the negative convexity isn't really compensating me? Ex-ante it is most reasonable to assume that the extra yield is sufficient compensation for the additional risks. Attempting to make an active decision based on your assessment of the pricing of that risk is what I believe Valuethinker was warning you off of. Understanding the risks you assume and not becoming overly concentrated in any one sector of the debt market are obviously advisable (in no way do you appear to be pursuing such a path). I'm not very familiar with Fidelity funds so I'll use VG as a point of comparison. I am not aware of a fixed income VG fund that ...
by FillorKill
Tue Apr 26, 2016 8:41 am
Forum: Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 29
Views: 4455

Re: Critique Fixed Income Strategy - GNMA Dominance

Buffetologist wrote: However, I am aware that I am being compensated in the GNMA for the negative convexity of mortgages. I don't know how to factor that into the selection.
Consider it compensation for the increased duration volatility that the negative convexity creates.
by FillorKill
Thu Apr 21, 2016 4:03 pm
Forum: Personal Investments
Topic: What's the deal with long term gov bonds?
Replies: 26
Views: 3245

Re: What's the deal with long term gov bonds?

azanon wrote:
FillorKill wrote:Anyone backtesting with portfolio visualizer to arrive at their proposed bond allocation should be required to run their proposed bond allocation 1972-1981 to see what things can look like in a different rate environment. Short term treasuries - too good to be true? :wink:
If you're buying bonds with a duration of 15 years or more, for just 9 years, you might want to let someone else manage your portfolio. :?
They were horrible from 1940-1981 and the results would be the same. The limitation is with visualizer not my point.