Search found 107 matches

by NERD777
Fri May 04, 2012 8:44 pm
Forum: Investing - Theory, News & General
Topic: Gold is ready to fall
Replies: 157
Views: 15979

Re: Gold is ready to fall

Gold prices rest on fear. When the fear subsides, so will the gold prices. May the force be with you. May the force be with you too. This whole "fear" theme gets way overplayed. It is a red herring. The real issue is "Is the fear justified?" Or another question in regard to stocks might be, "Is the confidence justified?" Now since we are mostly not market timers here, and do not claim to know the answer, or even if we do think we know the answer would not presume to be able to stay solvent long enough for the market to get rational, we stay well diversified. Some of us use gold in that attempt to diversify. .................... As an aside, today is an example of where the DJIA and gold provided some real dive...
by NERD777
Wed Apr 18, 2012 8:34 pm
Forum: Personal Investments
Topic: If I buy gold, what should I buy?
Replies: 50
Views: 10096

Re: If I buy gold, what should I buy?

Platinum is cheaper than gold now. I ordered a 1-ounce platinum Canadian Maple yesterday. (SSSS: I don't know if you are just being funny, but in case you aren't....) A word of advice, to you and those who have or are thinking of diversifying into precious metals: I like simplicity . So other than a token investment into silver, I am all in gold, as far as my precious metal allocation. I just haven't and do not buy into platinum and palladium. Others that I respect do believe they provide a good way to diversify your precious metals allocation, but I don't know. They are the only other elements that have a chance to compete against gold and silver, but I believe they are so heavily used for industry, that if the economy takes a hit, they w...
by NERD777
Sat Apr 07, 2012 10:00 am
Forum: Investing - Theory, News & General
Topic: POLL: How do you consider gold?
Replies: 61
Views: 4949

Re: POLL: How do you consider gold?

I said "I do not own gold for other reasons" because I do consider gold to be pure speculation, but I don't consider it to be a commodity speculation. Most commodities have a direct use and a direct value as some kind of industrial input, and commodity speculation is the perverse consequence of a system that does have some legitimate use in allowing businesses to plan and budget for future needs. I think the gold advocates are correct in saying that gold is different and gold is a special case. The considerations that apply to it are not the same as the considerations that apply to (say) petroleum. Good point, I don't own gold because it's purely speculative. The poll option that seemed closest was the "commodity speculation...
by NERD777
Fri Apr 06, 2012 3:05 pm
Forum: Investing - Theory, News & General
Topic: POLL: How do you consider gold?
Replies: 61
Views: 4949

Re: POLL: How do you consider gold?

I said "I do not own gold for other reasons" because I do consider gold to be pure speculation, but I don't consider it to be a commodity speculation. Most commodities have a direct use and a direct value as some kind of industrial input, and commodity speculation is the perverse consequence of a system that does have some legitimate use in allowing businesses to plan and budget for future needs. I think the gold advocates are correct in saying that gold is different and gold is a special case. The considerations that apply to it are not the same as the considerations that apply to (say) petroleum. Good point, I don't own gold because it's purely speculative. The poll option that seemed closest was the "commodity speculation...
by NERD777
Fri Apr 06, 2012 1:44 pm
Forum: Investing - Theory, News & General
Topic: is inflation set to soar?
Replies: 32
Views: 3858

Re: is inflation set to soar?

Anybody that knows anything about inflation knows that it is nothing but politics and it is impossible to separate the two. Prices have risen, often abruptly, and fallen, and fluctuated, throughout modern history. Are you really making the case that politicians, and politicians alone, drive changes in prices? That seems to ignore the entire field of economics. No doubt many a U.S. president has wished he could adjust inflation to his liking. Or are you excluding yourself from the group you describe above, and fall into the category of those who don't know anything about inflation? :happy Eric They do not alone control the change in prices but they play a LARGE role. Not so much politicians but central banks around the world. The danger of ...
by NERD777
Fri Apr 06, 2012 1:36 pm
Forum: Investing - Theory, News & General
Topic: is inflation set to soar?
Replies: 32
Views: 3858

Re: is inflation set to soar?

Valuethinker wrote:
NERD777 wrote:How inflation tracks global money supply can be a tricky issue. It, like everything else in this market, is less correlated over the short term and becomes higher correlated long term. What you can be sure of is the global money supply has been greatly increased via the central banks balance sheets.
Yet the velocity of money is volatile and only indirectly observable.

You create lots of money, it sits in bank vaults.

I think causation runs in reverse: growth in economic activity creates a growth in money supply NOT the other way around.
The central banks can not directly control velocity of money. They do control money supply. Both affect inflation.
by NERD777
Fri Apr 06, 2012 1:33 pm
Forum: Investing - Theory, News & General
Topic: Will TIPS really protect you if inflation takes off?
Replies: 62
Views: 9731

Re: Will TIPS really protect you if inflation takes off?

I would much rather own a small allocation of PM's (5-10% max) and also own real estate (house+land) for this type of situation. Again I reiterate I'm not saying this will happen, I'm not in the we're all doomed crowd. But to say the chance is 0 is ignorant and silly in my opinion. My house has decreased in value the last few years by ~20% while my TIPS have gone up ~20 - 40%. I think the key is to not hold 100% of anything and to have multiple asset classes and income streams so you are covered under different inflation / deflation scenarios. How much did it/home values in general increase in the years prior? You can not look at small periods in isolation with regards to any investment, nothing is in a vacuum. Real estate, TIPS, commoditi...
by NERD777
Thu Apr 05, 2012 10:30 pm
Forum: Investing - Theory, News & General
Topic: Will TIPS really protect you if inflation takes off?
Replies: 62
Views: 9731

Re: Will TIPS really protect you if inflation takes off?

It's actually quite hilarious you think that is a troll post. I'm not saying this will happen, but it absolutely could, and for you to say there is no historical precedent for this is naive and ignorant. How does thousands of years of history sound? There is precedent for a meteor to hit the planet, wipe out the dominant species and shroud the Earth in darkness decades, but personally that doesn't keep me up at night. You have to look at the likely probability of either a TIPS default or the catastrophic meteor actually happening in the next 30 years, compared to the probability that people in retirement are going to be hurt by possible high inflation during some of the future U.S. economic cycles. Your meteor analogy is not the best. You ...
by NERD777
Thu Apr 05, 2012 4:18 pm
Forum: Investing - Theory, News & General
Topic: Will TIPS really protect you if inflation takes off?
Replies: 62
Views: 9731

Re: Will TIPS really protect you if inflation takes off?

This is the easiest question ever asked on this forum. NO. If rampant inflation were to take place one of two things would happen. TIPS would be defaulted upon, and if they weren't you would be paid in worthless currency. People who believe TIPS are the investment to hedge against inflation will be severely disappointed when and if this scenario arises. Comments like this are very close to being considered trolls. The unstated assumptions behind them depend on a view of the government for which there is simply no historical precedent . They also ignore the reality that, if all else fails, the US citizens have the wealth and the US government has the taxation powers to deal with these issues long before they cause the types of issues being ...
by NERD777
Wed Apr 04, 2012 7:58 pm
Forum: Personal Consumer Issues
Topic: LCD TV
Replies: 27
Views: 2452

Re: LCD TV

I would also suggest LED. Samsung is top notch IMO, but you pay for it. Vizio is a great high quality lower cost brand that I would highly recommend. 42" 120Hz LED Vizio can be had at WalMart for $650.
by NERD777
Wed Apr 04, 2012 7:55 pm
Forum: Investing - Theory, News & General
Topic: is inflation set to soar?
Replies: 32
Views: 3858

Re: is inflation set to soar?

How inflation tracks global money supply can be a tricky issue. It, like everything else in this market, is less correlated over the short term and becomes higher correlated long term. What you can be sure of is the global money supply has been greatly increased via the central banks balance sheets.
by NERD777
Mon Apr 02, 2012 10:18 pm
Forum: Investing - Theory, News & General
Topic: Will TIPS really protect you if inflation takes off?
Replies: 62
Views: 9731

Re: Will TIPS really protect you if inflation takes off?

This is the easiest question ever asked on this forum. NO.

If rampant inflation were to take place one of two things would happen. TIPS would be defaulted upon, and if they weren't you would be paid in worthless currency. People who believe TIPS are the investment to hedge against inflation will be severely disappointed when and if this scenario arises.
by NERD777
Sat Mar 31, 2012 10:24 am
Forum: Personal Investments
Topic: How would you advise the 3 MegaMillions winners?
Replies: 34
Views: 3801

Re: How would you advise the 3 MegaMillions winners?

I would advise them:
20% (VTSAX) Total Stock
20% (VTIAX) Total International
30% (VBIRX) Short Term Bond Index
10% (VWEAX) High Yield Bond Fund
15% (BWX) Unhedged Foreign Bond ETF
5% Precious Metals.

Somewhat similar to my own portfolio although a bit more conservative
by NERD777
Sun Mar 25, 2012 4:21 pm
Forum: Personal Finance (Not Investing)
Topic: Why does anyone use American Express?
Replies: 146
Views: 296745

Re: Why does anyone use American Express?

To the people that have said their card was declined and it caused them shame or humiliation in public you really need to suck up your pride. I've had cards declined because of what was deemed as unusual activity and all it took was a phone call to clear it up. I actually found this a relief that they would cut off my card in case of identity theft or someone stealing my cc #. It's simply good business from their perspective and may save you in the long run. Have a backup card or two or however many and get on with it.
by NERD777
Sun Mar 25, 2012 4:11 pm
Forum: Investing - Theory, News & General
Topic: Bogleheadism goes mainstream?
Replies: 24
Views: 4241

Re: Bogleheadism goes mainstream?

tomforshort wrote:To the OP, do you really want Bogleheadism to go mainstream? If everyone switches to low-cost index fund investment, would that not "change the game" substantially? Could the market be efficient, if it even is now, if all investments were just market cap weighted index buys? Somebody needs to be out there actively trading.
This is an important point not often made. People on here tend to scoff at traders, but without them the market would not function properly. If every dollar in the market was indexed, the market would cease to be even remotely efficient.
by NERD777
Sun Mar 25, 2012 10:40 am
Forum: Investing - Theory, News & General
Topic: Apple flash crash.... 9 percent on a 100 share trade?
Replies: 24
Views: 2323

Re: Apple flash crash.... 9 percent on a 100 share trade?

It wasn't a flash crash at all, I guess it was a super slows news day and they decided to run with it. One 100 lot went off on BATS and caused a circuit breaker trigger. They halted it, reopened it a few minutes later and all was well. The market during the time of Apple's halting was completely unaffected. You couldn't do this on purpose, it was basically a malfunction on BATS ECN. They actually were suppose to IPO today, and there stock did 'flash crash' traded 0.00 before being halted. So if I sold 100 shares of apple below price on etrade..... what mechanistically is different form the BATS ECN? Would the order not be accepted? Or is the BATS order more authoritative, or recieves more weight, than an identicle order I would make on etr...
by NERD777
Sat Mar 24, 2012 7:34 am
Forum: Investing - Theory, News & General
Topic: Apple flash crash.... 9 percent on a 100 share trade?
Replies: 24
Views: 2323

Re: Apple flash crash.... 9 percent on a 100 share trade?

It wasn't a flash crash at all, I guess it was a super slows news day and they decided to run with it. One 100 lot went off on BATS and caused a circuit breaker trigger. They halted it, reopened it a few minutes later and all was well. The market during the time of Apple's halting was completely unaffected. You couldn't do this on purpose, it was basically a malfunction on BATS ECN. They actually were suppose to IPO today, and there stock did 'flash crash' traded 0.00 before being halted.
by NERD777
Thu Mar 22, 2012 9:32 pm
Forum: Personal Investments
Topic: If I buy gold, what should I buy?
Replies: 50
Views: 10096

Re: If I buy gold, what should I buy?

Honestly I think it depends on the size of your portfolio. If you like I believe in a 5-10% allocation to precious metals as a way to decrease the SD of your portfolio there are two things to consider. GLD is a great product, super easy to buy and sell and you can rebalance with the click of a mouse as necessary. I am in the camp that says own physical, forever and always, You can easily buy gold bars or eagles, maple leafs etc. and not get burned too bad on premium. You will pay above spot yes, but you also will demand a slight premium when and if you decide to sell. If your portfolio is not too big, I recommend owning physical 100% of your gold allocation. If your portfolio is rather large, you may consider mostly physical with a small po...
by NERD777
Mon Mar 19, 2012 6:46 pm
Forum: Investing - Theory, News & General
Topic: Is a 2012/2013 Market Collapse Inevitable?
Replies: 49
Views: 6602

Re: Is a 2012/2013 Market Collapse Inevitable?

Another thing people seem to forget is the price of stock and therefore the price of the market is simply what another individual is willing to pay for it. Is AAPL worth 600 a share? It may be more or less. But as of today perceptions of investors deem that appropriate. Trading is about these perceptions, long term investing is about creating wealth. Perceptions will change as will valuations. In the long run, companies tend to generate profits for investors.
by NERD777
Sun Mar 18, 2012 8:57 pm
Forum: Investing - Theory, News & General
Topic: Is a 2012/2013 Market Collapse Inevitable?
Replies: 49
Views: 6602

Re: Is a 2012/2013 Market Collapse Inevitable?

Yes the FED, ECB, BOE, BOJ, etc. do have a major influence to some degree in the equity markets. Yes there is some serious pricing in of QE3 in this market if the economy indicators started to deteriorate. I guess how you define collapse is the real key here. IS 2007-2008 what you are referring too? If so I highly doubt it, the FED would not allow it to happen. The three major things that could cause a downturn of that magnitude in the next two years in my opinion is complete collapse of the EU, a confidence crisis in either Japan, UK, or USA ( highly highly unlikely in the next two years, inevitable when your period is n ) or a conflict with Iran which sends oil prices to the moon and destroys the worldwide economy. Honestly #3 is probably...
by NERD777
Sun Feb 12, 2012 1:18 pm
Forum: Investing - Theory, News & General
Topic: WSJ The New Bond Market
Replies: 30
Views: 3296

Re: WSJ The New Bond Market

I was wondering how long it would take for someone in this thread to say "take your risk on the equities side".

Investment grade and junk can and in my opinion should have a place in one's long term investment portfolio. The thinner and more volatile a market is typically the greater edge exists for certain people. As far as long term investing it does not mean that much. Except that in times like last august and 2008, certain asset classes can and will incur massive "losses". These can present great buying opportunities for a long term outlook.
by NERD777
Mon Jan 30, 2012 9:08 pm
Forum: Investing - Theory, News & General
Topic: Why Europe's continuing problems have not roiled the markets
Replies: 87
Views: 8673

Re: Why Europe's continuing problems have not roiled the mar

They have to a degree, much more so a few months back. Any slight 'news' would send the market into a tizzy intraday. Now not so much, but European news still lingers. There won't be another liquidity issue like we saw in 07-08. The Fed has made that very clear, the IMF is on board, and the ECB will be there if needed. The issue now is confidence in sovereign debt, a much more difficult problem. For right now, the US market is seen as a safe haven among equities, QE3 will come if necessary. The Fed and Bernanke are in a very tough position, they either telegraph their moves or let market turmoil persist. They seem to have chosen telegraph their moves in the hope that said moves won't be needed. Realistically, the Euro Zone cannot continue i...
by NERD777
Sat Jan 07, 2012 7:49 pm
Forum: Investing - Theory, News & General
Topic: Can One LOCK IN GAINS?
Replies: 9
Views: 1652

Re: Can One LOCK IN GAINS?

Many directions to take this question, I'll bite with the most theoretical, lest practical of them. Short Answer: Kinda. Rebalancing from 'riskier' investments into 'safer' investments. i.e rebalancing equity gains into your bond allocation (Remember when that used to happen frequently?) Bonds obviously are not risk free, the shorter the duration the less theoretical risk. Long Answer: No. Bonds are not this risk-free investment that every seems to think. (Not risk free in the sense of duration and interest rates, everyone here seems to get that. I'm talking default, or complete monetization of treasuries). Not saying it will happen in my lifetime or ever, but it is not 100% impossible. In such a scenario no paper asset would be worth anyth...
by NERD777
Sat Jan 07, 2012 4:49 pm
Forum: Personal Consumer Issues
Topic: I'm about to buy a new car and think I may have a blind spot
Replies: 19
Views: 2305

Re: I'm about to buy a new car and think I may have a blind

It might not be your style, but the V6 mustangs have great pickup and handling for 25K.
by NERD777
Tue Jan 03, 2012 8:22 pm
Forum: Investing - Theory, News & General
Topic: Market Valuation Indicators: Overvaluation Remains High
Replies: 11
Views: 1591

Re: Market Valuation Indicators: Overvaluation Remains High

A little scary when one considers how overvalued we seemed in 2000 compared to 1929. One thing to consider, part of the reason this market is "overvalued" is because treasury yields are so low. I know Bogleheads think active investing and timing markets is silly, but the fact is some people don't. And with yields treasury yields where they are, stocks tend to look more attractive. Truth be told, I think the market may be slightly overvalued, but I would much rather have the majority my money in equities as opposed to bonds.
by NERD777
Mon Jan 02, 2012 6:31 pm
Forum: Personal Investments
Topic: What would you change if you had a 9-figure portfolio?
Replies: 31
Views: 3624

Re: What would you change if you had a 9-figure portfolio?

I would invest a bit more conservatively. Probably cut down my equity exposure and throw it into Corporates and TIPS. And it would not move the market.
by NERD777
Fri Dec 30, 2011 6:40 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads 2012 hedge fund contest
Replies: 81
Views: 13000

Re: Bogleheads 2012 hedge fund contest

Upsilon Frontier (UF)

Long: Apple (AAPL)
Long: Goldman Sachs (GS)

Short: eBay (EBAY)
Short: Red Hat (RHT)
by NERD777
Fri Dec 30, 2011 3:41 pm
Forum: Investing - Theory, News & General
Topic: Traders
Replies: 3
Views: 360

Re: Traders

Remember that most active funds underperform the market before fees. Traders do not take money from the market, but rather market participants. Imagine fund X wants to buy 1,000,000 shares of stock Y. Fund X doesn't just instantly buy 1,000,000 shares, or they would drive the price up far too high. So the accumulation of shares takes place over a prolonged period. It's not easy, but traders can identify large buyers and sellers in individual stocks and front run these orders. You will never quite know how large the order is until it's over, but determining that by the price action is a skill that can be learned. The biggest advantage traders have is they are small, a million dollars is a raindrop in the ocean in the market. The biggest disa...
by NERD777
Wed Dec 21, 2011 8:30 pm
Forum: Personal Investments
Topic: When do you not invest?
Replies: 23
Views: 3201

Re: When do you not invest?

When the total utility of your future expected returns is less than your current total utility from said amount. Muddy waters huh? Save, invest, and plan for the future, a lot. But have a little bit of fun while you are at.
by NERD777
Wed Dec 21, 2011 7:57 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #11: Take Grok's pledge!
Replies: 188
Views: 33868

Re: Grok's Tip #11: Take Grok's pledge!

Grok,

I love your posts and agree with the majority of your philosophy. But I don't quite understand your position on take your risk on the equity side. To simplify things we can simply address junk bonds, much like Vanguard High Yield Corporate (VWEHX). While I agree these should not be viewed anything like treasuries or investment grade, but do you not think they have a place in a portfolio? Addressing any asset in isolation is not appropriate, do you not think these could be beneficial to a portfolio with respect diversification, and a benefit of risk and return?
by NERD777
Wed Dec 21, 2011 7:39 pm
Forum: Investing - Theory, News & General
Topic: Is the market preoccupied with the negative?
Replies: 19
Views: 4518

Re: Is the market preoccupied with the negative?

Also today was far less news driven than it was earnings driven. Oracle missed pretty big and ended up down 11%, which is the 4th biggest component in the NASDAQ. Their earnings miss also dragged down many software, networking, and cloud stocks. CSCO, EMC, & IBM all huge companies were sold very hard. But all things considered, S&P still ended up positive on the day, so your assessment of the 'news' was not necessarily wrong. If you'd like a little confidence boost, the VXX was down almost 7%, so your views were shared by many in the market today.
by NERD777
Wed Dec 21, 2011 7:30 pm
Forum: Investing - Theory, News & General
Topic: Is the market preoccupied with the negative?
Replies: 19
Views: 4518

Re: Is the market preoccupied with the negative?

Well for one reason is there is not a lot of positive news out there. IMO, this market has held up pretty well with all the negative news. VTI is down roughly 18% from 2007 highs not including reinvesting dividends. Not to shabby all things considered. "Bulls make money, bears make money, sheep get slaughtered" is a pretty accurate assessment. You could classify a boglehead as a perma pull. The market (and more importantly a balanced portfolio of stocks and bonds) can and will go up over a long enough time period. Bears (mostly traders and some hedge funds) make money during opportunistic times like the environment we have been in the past 4 or 5 years. Sheep, the typical performance chaser, buying internet stocks in 2000, selling...
by NERD777
Sun Dec 18, 2011 7:36 pm
Forum: Investing - Theory, News & General
Topic: Could this be a super portfolio? What do you think?
Replies: 35
Views: 4661

Re: Could this be a super portfolio? What do you think?

Has a PP type feel. Long term treasuries have performed well in the face of lower interest rates. What happens if in 2013 rates go up consistently for years to come? Long term gets thrashed. If you were looking for a portfolio that tends to perform well in any market without significant draw downs I'd switch at least half to Intermediate Term Bond Index, which includes about half corporates. Also I think it is overly tilted towards small cap but thats just me. I personally would go with something like this: 25% Total US 15% International 20% Intermediate Term Bond Index 20% High Yield 10% Gold 10% Short Term Treasuries You could slice and dice by adding small cap and EM to your equity allocation but I don't think its necessary. This is sort...
by NERD777
Sun Dec 18, 2011 7:25 pm
Forum: Personal Investments
Topic: Why would anyone buy hedge funds?
Replies: 37
Views: 3660

Re: Why would anyone buy hedge funds?

The few hedge funds that do beat the market consistently by employing HFT, various types or arbitrage (which can occasionaly blow up, i.e. LTCM), or trade on insider information, the general public and those without large amounts of capital would not and do not have access too. Solid hedge funds that employ sound, market beating strategies cannot perform these strategies with infinite capital and will almost always be closed to new investors. The market is not perfectly efficient, but efficient enough where these strategies cannot be performed ad infinitum. Maybe it's just me, but if I was super duper rich I would have an extremely aggressive portfolio. With $100m or more, a loss of 50% means nothing and a loss of even 90% still leaves you ...
by NERD777
Mon Dec 05, 2011 9:04 pm
Forum: Investing - Theory, News & General
Topic: fannie stock - worth it?
Replies: 7
Views: 1038

Re: fannie stock - worth it?

You would be much better off buying their debt, same probably goes for JPM, BoA, MS, GS, etc. If the government does provide a backstop, debt should get paid but stock will most likely be diluted and when these banks return to actual profits on a consistent basis depends heavily on how our economy works itself out. For what it's worth Value, I've read many of your posts and love them. Very insightful and direct. But I personally wouldn't call Cramer a clown. He actually has a lot of knowledge and knows more than anyone else you will see on TV that is not a special guest. He, at this point, is a personality. Is Stephen Colbert the exact man you see on TV? I suspect not and neither is Cramer. I do not take his advice to heart (Or to the bank!...
by NERD777
Sat Dec 03, 2011 1:28 pm
Forum: Investing - Theory, News & General
Topic: US Markets - Flattest day ever?
Replies: 3
Views: 682

Re: US Markets - Flattest day ever?

What's more interesting is how the market compared with the major banks, specifically Morgan Stanley, Citi, JPM, and Goldman. The first hour specifically, the futures struggled while these major banks did nothing short of go vertical on large volume. Trading that day was certainly an interesting one.
by NERD777
Sun Nov 27, 2011 6:23 pm
Forum: Personal Investments
Topic: The name is Bond. Junk Bond.
Replies: 50
Views: 6320

Re: The name is Bond. Junk Bond.

I like junk, as long as you don't view it quite like a "bond". The whole take your risk on the equity side is a stupid saying, and frankly doesn't make much sense. Your entire portfolio's risk should be the concern. I would never replace treasuries with junk and consider my AA the same for obvious reasons. I'm also a huge fan of investment grade corporates. I think an equal weight of treasuries, junk, would suit most people just fine. So let's say you were a 70/30 guy, and wanted to add junk to your portfolio, you might go 60/40, the 40 being 1/3 of the previously mentioned 3. Having said all that, as much as of love junk bonds, I would never hold any in taxable accounts. This can make it difficult for some to allocate a significa...
by NERD777
Sun Nov 20, 2011 12:52 am
Forum: Investing - Theory, News & General
Topic: New Total International Bond not just Developed
Replies: 22
Views: 2441

Re: New Total International Bond not just Developed

A Devout Indexer wrote: Hedging is very inexpensive (maybe a few basis points per year), and certainly the way to go with global fixed income. Bonds are the low risk/stable part of a balanced portfolio--adding currency exposure dwarfs interest income and price change volatility, making it an unwanted feature of fixed income.
I know hedging currency exposure is very cheap, but a few basis points is still a few basis points. I personally desired an International Bond Fund to diversify and give me some worldwide currency exposure. If a person were to hold just VTI and BND for example, they are very dependent on the value of the US dollar, an unhedged IBF would help with this regard.
by NERD777
Sat Nov 19, 2011 11:18 pm
Forum: Investing - Theory, News & General
Topic: New Total International Bond not just Developed
Replies: 22
Views: 2441

Re: New Total International Bond not just Developed

Hmm according to that press release they will be hedging currencies. That's a huge drawback for me depending on how much they hedge. One it will raise the expense ratio. Two and more importantly, part of the reason I would love an International Bond Fund in my portfolio is the currency diversification it provide. Am I alone on that?
by NERD777
Sat Nov 19, 2011 11:12 pm
Forum: Personal Investments
Topic: The great bond debate
Replies: 66
Views: 7019

Re: The great bond debate

Am I right to steer clear of bonds, ... Yes. While not 100% certain, it's extremely likely that the Fed will let interest rates rise again in 3 years or so, and when that happens, bond holders will lose principle. I'm not going to be one of them. (But there are a lot of folks in this forum who don't seem to agree with that, so maybe I'm wrong.) I've been in a position similar to yours, having some cash to invest, and I've been buying stock mutual funds over the last 3 months. It's been a good time to buy, with several nice market lows to cheapen prices. Bernanke has said he (they) have no intention of raising interest rates significantly until 2013. That doesn't mean he won't and that doesn't mean will then. The Fed will do whatever it see...
by NERD777
Sat Nov 19, 2011 10:45 pm
Forum: Investing - Theory, News & General
Topic: If Europe blows up how will it affect Vanguard funds?
Replies: 28
Views: 3397

Re: If Europe blows up how will it affect Vanguard funds?

In the last 3 months, VGK is down .56% while VTI is up 8.33%. VGK has not come off September panic lows nearly as much as VTI has. You can tell the market is trying to price in possible scenarios for the European markets and more faith is being put into our market. VWO actually is performing worse than both at -3.18% over that time period. Emerging markets may take the biggest hit when and if there is full blown contagion as there appears to be a slowdown already happening in Brasil and China. Also if you take returns out to one year, VTI is up 1.05% while VGK is down 16.85%. So even if one fears this market is overvalued, you can see the market has priced a major situation possibly arising out of Europe.
by NERD777
Sat Nov 19, 2011 10:33 pm
Forum: Personal Consumer Issues
Topic: Weightlifting - do you do isolation exercises?
Replies: 81
Views: 6394

Re: Weightlifting - do you do isolation exercises?

I don't believe they are necessary provided you have a solid program of compound movements. If general health is your concern you can definitely skip them. Having said that, I myself could be caught doing curls and shrugs occasionally for vanity purposes. It's mostly an ego thing, after a good workout finished off with curls and shrugs the reflection looks pretty good in the mirror, long term though it is probably negligible improvement.
by NERD777
Sat Nov 19, 2011 4:14 pm
Forum: Investing - Theory, News & General
Topic: If Europe blows up how will it affect Vanguard funds?
Replies: 28
Views: 3397

Re: If Europe blows up how will it affect Vanguard funds?

Remember in 2008 treasuries took a hit as well. If a crisis were to happen, almost all asset classes may take a hit, equities, bonds, precious metals etc. as a flight to liquidity. If it were to "blow up", equity markets would more than likely take a serious hit. Realistically S&P 600 would not be out of the question. It really depends on the counter-party risk that would ensue, and whether or not the hedges the banks have in place pan out. As long as you are comfortable with your current asset allocation not much will change that you can control if a full blown contagion scenario takes place. The road may be bumpy, but stay the course as always.
by NERD777
Sat Nov 19, 2011 12:42 pm
Forum: Investing - Theory, News & General
Topic: If Europe blows up how will it affect Vanguard funds?
Replies: 28
Views: 3397

Re: If Europe blows up how will it affect Vanguard funds?

stlutz wrote:The market is betting that the ECB will ultimately monetize the debt (or if they don't then the US Fed will). If they don't, then you have the depression scenario which is actually worse than what happened post-Lehman.
Pretty much. If no monetizing happens 2008 looks like a cake-walk. More than likely it will be the Fed which will work as long as there is no confidence shake on US debt. If that happens, it will be real bad.
by NERD777
Thu Nov 17, 2011 5:21 pm
Forum: Investing - Theory, News & General
Topic: Why I Don't Buy Corporate Bond ETFs
Replies: 17
Views: 4316

Re: Why I Don't Buy Corporate Bond ETFs

Rick, BND contains corporate bonds. Would you advocate against owning BND as well based on this?
by NERD777
Tue Nov 15, 2011 11:02 pm
Forum: Personal Investments
Topic: Stock idea for 4th grade class...
Replies: 31
Views: 1893

Re: Stock idea for 4th grade class...

fredflinstone wrote:since almost everyone else in the contest will go long, buy an inverse fund like SKF.
Probably the best idea. If most schools go the route of picking a high beta, you then have to get lucky on picking the "best" high beta. If it's one month just buy some FAZ (triple levered inverse bank ETF, the decay you pay for one month won't be huge), if the market goes down they should be a shoe in to win. Although with Buffets position in WFC and his warrants on GS and BAC it could make for an interesting lunch :D. If you open the floor to options, just purchase an IWM strangle, a big market move would show great returns.
by NERD777
Tue Nov 15, 2011 10:57 pm
Forum: Personal Consumer Issues
Topic: When To Upgrade To A New Computer
Replies: 39
Views: 4277

Re: When To Upgrade To A New Computer

I'm with the not upgrading crowd, I simply do not think it is cost effective. I would use your current model until it dies or you often find yourself frustrated at its speed or rather lack thereof. Maybe you get 6 more months, maybe 2 years. Perhaps even making this thread shows you may not be frustrated just yet, but you seem to think that maybe soon. Like others have said, a new model with an i3 processor and 4 gig RAM is pretty standard nowadays for less than $500, some with i5. The longer you wait the cheaper/better your next one will be.
by NERD777
Tue Nov 15, 2011 10:15 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4924

Re: Is Interest a Scam?

It seems like there is a lot of confusion on this thread, probably due to the fact that the fractional reserve banking system is a very confusing topic. Maybe a different way to pose the problem / question with slightly more clarity... Consider: If the assumption is all money is debt - which is what the fractional reserve banking system gives us - what happens if everone paid off their debt at the exact same time. By definition, there would be no money. What would be left to make their final interest payment? Actuality: Now, with the cycle of money, cycle of loans and labor to procur more money, this will never happen, but never-the-less, here we are, in a system dependent upon people being in debt. Debt won't go away, it can't. My thought...
by NERD777
Mon Nov 14, 2011 11:05 pm
Forum: Personal Consumer Issues
Topic: Deleted
Replies: 101
Views: 9330

Re: I can't believe the price of...

Notice people seem to believe many things seem to rise faster than the price of inflation, things they use very often/mildly dependent on. It might lead one to believe the calculation for inflation is off...
by NERD777
Wed Nov 09, 2011 8:44 pm
Forum: Personal Investments
Topic: Gold and silver
Replies: 21
Views: 2253

Re: Gold and silver

My original paragraph was in response to the original poster. My second paragraph was a response to you and the crisis, I do apologize for not making it clearer with quotes. I agree, turning one's investment strategy upside because of certain events is not only against the philosophy of this board, but is not something I recommend. I was simply stating a small allocation to gold and silver in one's portfolio can add significant diversification and create a portfolio with a lower standard deviation of returns.