Search found 222 matches

by norak
Sun Nov 27, 2011 12:32 am
Forum: Investing - Theory, News & General
Topic: Where is Accountability in Buy-and-Hold?
Replies: 14
Views: 1439

Where is Accountability in Buy-and-Hold?

Does anyone get suspicious when their financial adviser (or fund manager or John Bogle) tells you that in the long run everything will be fine? It seems like such a convenient excuse. If I were a boss and one of my workers underperformed and I were to confront him and say, "Why are you sleeping on t...
by norak
Fri Nov 25, 2011 6:01 am
Forum: Investing - Theory, News & General
Topic: Madoff Victims
Replies: 34
Views: 2949

Re: Madoff Victims

After Madoff, the lesson learned is that we cannot trust anyone and we should split our money up. I don't even think it is wise to invest all in Vanguard. You can't trust anyone, so diversification is the only solution to that problem.
by norak
Sat Nov 05, 2011 12:45 am
Forum: Personal Investments
Topic: Time To Bail Out of International Funds?
Replies: 30
Views: 2812

Re: Time To Bail Out of International Funds?

Only 15% international and you want to bail? Greece is not the only country in debt. I strongly recommend against it.
by norak
Sat Nov 05, 2011 12:44 am
Forum: Personal Finance (Not Investing)
Topic: Ultimatum Game - Your vote
Replies: 75
Views: 4910

Re: Ultimatum Game - Your vote

Make sure you write something in your report about taxing the rich.
by norak
Fri Nov 04, 2011 5:36 pm
Forum: Personal Consumer Issues
Topic: How Do You Deal with Status Anxiety?
Replies: 95
Views: 10213

How Do You Deal with Status Anxiety?

Are you capable of suppressing status anxiety when e.g. your friends and relatives start to earn more than you? Are there techniques you use to cope with status anxiety, e.g. do you compare yourself to people less fortunate than you? I have tried to cope with status anxiety by trying to remind mysel...
by norak
Fri Nov 04, 2011 8:25 am
Forum: Investing - Theory, News & General
Topic: "Age in Bonds" goes against Bogleism
Replies: 40
Views: 3520

"Age in Bonds" goes against Bogleism

John Bogle believes that investments be based upon market capitalization to ensure investors receive market returns. To go against market cap weighting is to bet against the market. Following Bogle's advice, we should therefore allocate 65% of our portfolio to bonds and 35% to stocks, as this reflec...
by norak
Fri Nov 04, 2011 7:25 am
Forum: Investing - Theory, News & General
Topic: MF global: tell me again how Vanguard is safe from fraud?
Replies: 43
Views: 5114

Re: MF global: tell me again how Vanguard is safe from fraud

As much as I trust Vanguard, you should never trust anything 100% Always diversify. Buy different index funds across all asset sectors using different providers, and if you can consider physical gold.
by norak
Mon Oct 31, 2011 10:54 pm
Forum: Personal Consumer Issues
Topic: I don't understand Facebook
Replies: 89
Views: 8176

Re: I don't understand Facebook

I like Facebook a lot. Believe me, I have gone through the "I am too cool for Facebook" phase, and it seems like that phase is normal for people new to Facebook. I suppose I wanted to feel superior to others, so I pretended I was better than the Facebook crowd, going on about how real life interacti...
by norak
Mon Oct 24, 2011 6:07 am
Forum: Investing - Theory, News & General
Topic: Can Index Funds Alleviate Poverty?
Replies: 2
Views: 564

Can Index Funds Alleviate Poverty?

I was reading a Bogleheads thread on Kiva microlending . Kiva is a website that allows you to make small $25 loans to poor people. It is believe that by giving poor people loans that they can use to start a business, poor people are given an opportunity to pull themselves out of poverty by establish...
by norak
Sat Oct 22, 2011 12:46 am
Forum: Investing - Theory, News & General
Topic: International Equity Allocation
Replies: 58
Views: 7417

Re: Re:

Here's the bottom line about international allocation: Global market says 50+% The efficient frontier says 30% Vanguard says 20-30% Jack Bogle says 0-20% Warren Buffet says 0% <=== ??? Choose your poison. ... I think the fact that Warren Buffet invested in PetroChina (and profited massively with it...
by norak
Fri Oct 21, 2011 8:36 am
Forum: Personal Finance (Not Investing)
Topic: How to get a wife interested in personal finance
Replies: 61
Views: 7049

Re: How to get a wife interested in personal finance

What do you mean by "basics of finance"?

It seems like you want to teach your wife how to live cheap. That is not basic finance.

You only live once, so splashing out on something that makes you happy, in my opinion, is justified, so long as you can afford it.
by norak
Fri Oct 21, 2011 6:48 am
Forum: Investing - Theory, News & General
Topic: Is anyone changing their mind about foreign allocation?
Replies: 51
Views: 10534

Re: Is anyone changing their mind about foreign allocation?

If you take the S&P500, pick the top 10 companies and invested in them, your returns would be highly correlated to the S&P500, and it would be cheaper to invest in the top 10. But what if a non-top 10 outperformed? This is why it is recommended that you buy the entire market, i.e. the S&P500 (or eve...
by norak
Fri Oct 21, 2011 6:25 am
Forum: Investing - Theory, News & General
Topic: Actively Managed Indexes
Replies: 1
Views: 329

Actively Managed Indexes

Within Australia there is a Vanguard ETF called the Vanguard Australian Shares High Yield ETF (VHY), which tracks the FTSE/ASFA Australian High Dividend Index. Here is what Morningstar had to say about the index upon which this ETF is based: The Vanguard Australian Shares High Yield ETF (VHY) tracks...
by norak
Fri Oct 21, 2011 6:10 am
Forum: Personal Finance (Not Investing)
Topic: Girlfriend is an heiress, who should pay?
Replies: 197
Views: 18334

Re: Girlfriend is an heiress, who should pay?

I agree with most people here. Don't think that because she is rich that she owes you. Be a man and pay your own way. I'm not sure what sort of values this girl has, but I think most women (and men) will respect you more if you have have an attitude of self-reliance.
by norak
Sat Oct 15, 2011 7:13 pm
Forum: Investing - Theory, News & General
Topic: International Equity Allocation
Replies: 58
Views: 7417

Re: International Equity Allocation

U.S. companies derive much of their profit from overseas, so you are already Internationally exposed. Thoughths? Many US companies may derive much profits from overseas, but US wages are quite high, and compliance with regulation for US companies is very expensive, which affects company profitabili...
by norak
Sat Oct 15, 2011 8:48 am
Forum: Investing - Theory, News & General
Topic: MSCI EM 50 not broad enough?
Replies: 5
Views: 733

MSCI EM 50 not broad enough?

The stock market is doing poorly, but I am optimistic that in the long run it will bounce back. When the stock market does bounce back, I want to be in high-risk and high-return asset classes in order to maximize my returns, which is why I am now 100% in equities, with about 60% in emerging market E...
by norak
Sat Sep 10, 2011 1:42 am
Forum: Personal Consumer Issues
Topic: Brand Snobbery Protects Us From Scams?
Replies: 8
Views: 1676

Brand Snobbery Protects Us From Scams?

I have two friends, one of whom is a brand snob who only buys and does business with companies with what he perceives are good brands that he knows and trusts. On the other hand, I have another friend who does not consider brands at all. This brand unaware friend has recently been a victim of a scam...
by norak
Fri Aug 26, 2011 11:47 pm
Forum: Investing - Theory, News & General
Topic: Impact of Corruption on Equity Index Fund Returns?
Replies: 12
Views: 1366

Impact of Corruption on Equity Index Fund Returns?

A friend of mine told me that executives and directors in many publicly listed companies sell shares and accept money from index investors. Then they plunder this money by accepting bribes from unions to lift wages of workers. They also accept bribes from corrupt politicians to raise company taxes t...
by norak
Sat Jul 16, 2011 2:53 am
Forum: Personal Consumer Issues
Topic: College Conspiracy - A brilliant pump and dump scheme?
Replies: 14
Views: 3788

Furthermore, while the increased supply has lowered the value of a college degree alone, it hasn't increased the value of not getting a college degree If more high school students go to university, it sucks away labour supply from jobs that do not require university degrees, e.g. plumbers, carpente...
by norak
Fri Jul 15, 2011 7:06 am
Forum: Investing - Theory, News & General
Topic: The first $500,000 is always the hardest
Replies: 260
Views: 47543

Exponential growth of investments is dangerous because as you get older and feel more inclines to retire, the gains from continuing to work a bit more increase, and so you work forever and die while in the office.
by norak
Fri Jul 15, 2011 7:03 am
Forum: Personal Consumer Issues
Topic: College Conspiracy - A brilliant pump and dump scheme?
Replies: 14
Views: 3788

I think that video makes sense. The government gives loans to people to go to college. This distorts the market by getting too many people into college. Prices go up as demand increase. Because everyone has a degree, there is inflation which causes the degree to become more worthless. It all sounds ...
by norak
Mon Apr 25, 2011 6:30 am
Forum: Investing - Theory, News & General
Topic: Impact of High Wages on Index Performance
Replies: 5
Views: 1008

Impact of High Wages on Index Performance

According to an article in Australia (Trouble brewing as wage demands hit listed firms), many listed firms are having difficulty trying to make a profit with cost of labor increasing. With money needing to be paid to workers, there is less money available for shareholders and, as a result, less mone...
by norak
Wed Mar 23, 2011 4:18 am
Forum: Personal Investments
Topic: Indexing Is Great When Preserving Wealth
Replies: 56
Views: 8075

I think I understand what the OP is saying. He is saying that indexing is not risky enough to produce enough money. The answer to this is simple: increase risk. You can do this still using index funds, e.g. by borrowing money to buy index funds or by investing in specific index funds rather than bro...
by norak
Mon Mar 21, 2011 7:18 am
Forum: Investing - Theory, News & General
Topic: How Indexers are Exploited by Hedge Funds
Replies: 48
Views: 7449

How Indexers are Exploited by Hedge Funds

I was having dinner with a very rich man yesterday. He told me that index fund investors are being ripped off and have been ripped off significantly for a long time. Active investors have been promoting index funds for a long time, so much so that the use of index funds is now part of mainstream per...
by norak
Mon Nov 01, 2010 9:24 pm
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

Sorry I had another argument with a friend about this issue since it is Melbourne Cup day today and I am still not convinced that betting and investing are different things. On the surface it looks like a similar phenomenon, but sellers don't set prices like bookies set odds. Bookies set odds so tha...
by norak
Fri Aug 06, 2010 5:58 pm
Forum: Investing - Theory, News & General
Topic: How Can Buying Stocks Beat Inflation?
Replies: 31
Views: 5428

How Can Buying Stocks Beat Inflation?

It is easy to understand how stockpiling goods you will later consumer or commodities like silver, which are inputs for many industrial process, can beat inflation. However, how exactly does investing in stocks beat inflation? What many say is that if there is inflation, companies can increase price...
by norak
Fri Jul 30, 2010 11:02 pm
Forum: Investing - Theory, News & General
Topic: I got out of this market and think it over where i have to
Replies: 49
Views: 6678

Indeed times seem very uncertain. I'm 26 yo and now have 60% stocks, 2% gold, and the rest in cash and bonds. I used to be 100% in stocks but in the last few months I've rapidly become more conservative. Many investors out there are playing a martingale strategy of betting in the stock market, think...
by norak
Fri Jul 09, 2010 6:30 pm
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

I have been informed that many companies like IG Index apparently are esentially gambling or betting companies that allow you to bet on financial indexes like the FTSE 100. The betting agency when taking bets from clients about where the FTSE 100 will go acts just like a sport betting agency. If som...
by norak
Tue Jul 06, 2010 6:07 am
Forum: Personal Finance (Not Investing)
Topic: Economics as a Career
Replies: 8
Views: 1911

Economics as a Career

In terms of career prospects, pay, and so forth, do you think economics is a useful subject to study in university? Many economists make forecasts of the future state of the economy and more often than not they are wrong. It makes me wonder whether economics is a proper science or not or whether it ...
by norak
Thu Jun 24, 2010 11:13 pm
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

I apologise if I seem stubborn but like I said I feel the need to stress test the theory behind long term investing in stocks. I talk about investing a lot with friends, and I have learned that people tend to get angry at you if you question something that they have invested in. It is human nature t...
by norak
Thu Jun 24, 2010 6:06 am
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

I am trying to get my head around why stock investing is legitimate. Warren Buffet said that before you invest in anything you must understand it. I have 100% in stocks, so I need to perform theoretical stress tests so I can sleep at night. Some here say that sports betting produces no dividend whil...
by norak
Wed Jun 23, 2010 6:15 am
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

Thanks for your input. But this new wealth created by companies due to technological improvement is just an outcome in the natural world that you are betting on in the same way that in sports betting you are betting on an outcome in the natural world, namely the performance of a soccer team. Wealth ...
by norak
Wed Jun 23, 2010 5:28 am
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

Re: Sports Betting To Diversify Your Portfolio

... but maybe I have missed out on something... Yup. Costs matter. :roll: Are you telling me sports betting has higher fees than stock investing? Buying individual stocks has commissions for transactions and investing in mutual funds has management fees in addition to any buy/sell spreads. Sports b...
by norak
Wed Jun 23, 2010 4:55 am
Forum: Investing - Theory, News & General
Topic: Sports Betting To Diversify Your Portfolio
Replies: 53
Views: 9525

Sports Betting To Diversify Your Portfolio

Now that it is World Cup time I have seen many people betting on which teams will win in soccer games. I used to believe that investing in the stock market is safe and proper and betting on which team will win in a soccer game is gambling and therefore is bad. But aren't they the same? When you inve...
by norak
Fri Jun 11, 2010 5:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Bond Funds Contain Suprime Loans?
Replies: 2
Views: 976

Vanguard Bond Funds Contain Suprime Loans?

IN my spare time I have been reading the PDSs of my investments. This is a risk management exercise. According to page 8 of http://www.vanguard.com.au/vnl/pds/retail_pds.pdf the Vanguard Index Diversified Bond Fund has counterpart/credit risk because the issuers of the bonds may become bankrupt and ...
by norak
Fri Apr 23, 2010 1:53 am
Forum: Investing - Theory, News & General
Topic: Is Tracking S&P500 Really Passive Investing?
Replies: 12
Views: 2811

Is Tracking S&P500 Really Passive Investing?

I have been reading the Wikipedia article on S&P500 and in the "selection" section of the article it claims that the members of the S&P500 are selected by a committee of Standard & Poors staff. They make judgment calls about whether company stocks should go in and out based on the liquidity of the s...
by norak
Fri Apr 09, 2010 8:40 pm
Forum: Personal Finance (Not Investing)
Topic: Divorce Insurance
Replies: 124
Views: 14331

Divorce Insurance

I would like to get married to a female but don't want to ask her for a prenup because I think it would offend her. Is there an insurance company that provides divorce insurance? I can pay regular premiums and in the event of divorce the insurance company can make a large payout to me to compensate ...
by norak
Sun Apr 04, 2010 1:28 am
Forum: Personal Investments
Topic: Bond Indexing, the Worst is First
Replies: 34
Views: 5704

One poster said Vanguard filters using credit ratings so that only those borrowers with good credit ratings are on the index. But we know from the Great Recession that credit ratings cannot always be trusted. Further, isn't relying on one firm's judgment of the quality of investments akin to active ...
by norak
Fri Apr 02, 2010 4:24 pm
Forum: Investing - Theory, News & General
Topic: Long Term Investing and Corruption
Replies: 30
Views: 4091

Long Term Investing and Corruption

In a company, the board is accountable to the shareholders and managers are accountable to the board. If shareholders are passive investors with long-term focus, wouldn't this reduce accountability? If there is corruption in the company and it affects the performance of the company, if the company t...
by norak
Fri Aug 14, 2009 7:36 am
Forum: Investing - Theory, News & General
Topic: Borrow and Invest in Capital Protected Fund?
Replies: 8
Views: 1833

Borrow and Invest in Capital Protected Fund?

Capital protected funds (like AXA North ) go up when the stock market goes up but do not go down when the stock market goes down. The downside with these products is that usually the fees are higher. Nevertheless, if there is no downside risk (fees are predictable) then wouldn't you be able to gener...
by norak
Sat Aug 08, 2009 1:26 am
Forum: Investing - Theory, News & General
Topic: Why Buy Government Bonds?
Replies: 9
Views: 2129

Why Buy Government Bonds?

Government bonds are loans to governments. You lend a government money and it pays you back more in the future. Government bonds are seen as safe because government has the ability to use taxation to raise revenue to pay you back. However, the ability to tax does not give a government an infinite so...
by norak
Tue Jun 23, 2009 5:42 am
Forum: Investing - Theory, News & General
Topic: Is a college degree worthless?
Replies: 133
Views: 18290

I think a university degree is important for all the reasons mentioned by others. It is used to signal to employers good quality. However, I have spent 6 years in university before getting a job and I feel like I have spent far too long. The problem with university is that even if returns can be hig...
by norak
Tue Jun 23, 2009 5:36 am
Forum: Investing - Theory, News & General
Topic: Our prayers have been answered: Peru ETF!
Replies: 50
Views: 8418

If there is greater risk then there should be greater return. That is why stocks in theory give higher returns than government bonds. Wouldn't the same apply to countries like Peru?
by norak
Sat Jun 13, 2009 9:16 am
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1447
Views: 673131

I haven't had time to read this whole thread. I have just read the Mortgage Your Retirement document. I think it makes a lot of sense. Conventional wisdom says you start off with 100% stocks and then move move into bonds. This is based on the assumption that stocks in the long run go up. The histori...
by norak
Thu May 28, 2009 5:17 am
Forum: Investing - Theory, News & General
Topic: Why is Index Investing so much better?
Replies: 39
Views: 6478

So, why is the index agency's choice of stocks "magically" better than any other mutual fund manager's picks? They are not. In fact, Bogle believes that many index funds are bad , especially those that are very narrow. E.g. the HealthShares Emerging Cancer ETF is an index fund that tracks the Healt...
by norak
Fri May 22, 2009 7:11 am
Forum: Personal Investments
Topic: (Permanent) Portfolio help for a first-time poster
Replies: 95
Views: 14762

Many say that in the long term you are allowed to use history as a guide to your investments but in the short term you should not. Most people say 10 year+ is long term, but how long does a piece of string need to be to be long? There is no answer. Just as this relativism applies to string it also a...
by norak
Wed May 20, 2009 7:40 am
Forum: Personal Investments
Topic: (Permanent) Portfolio help for a first-time poster
Replies: 95
Views: 14762

Weighting the four investments equally, you over/underweight them historically. In the investing world, history doesn't matter. You cannot predict the future from the past. This comes from the efficient market hypothesis. If you are unsure about the probability of risks, the best you can do is appl...
by norak
Tue May 19, 2009 5:59 am
Forum: Personal Investments
Topic: (Permanent) Portfolio help for a first-time poster
Replies: 95
Views: 14762

Grayfox is correct, the PP is more of a preservation portfolio. It looks pretty good NOW because of our current market conditions, but over a long time span the lack of equity accumulation at an early age will cost a lot in loss of compounding opportunity. New investors have to be careful about put...
by norak
Sun May 17, 2009 6:19 am
Forum: Investing - Theory, News & General
Topic: Cash in Permanent Portfolio?
Replies: 5
Views: 1759

Cash in Permanent Portfolio?

In the Permanent Portfolio , cash protects against recession while long-term bonds protect against deflation. However, wouldn't bonds protect better than cash during recession? Why hold cash at all? Wouldn't holding bonds, stocks, and gold at 33% each protect you against all outcomes, namely deflati...
by norak
Sun May 17, 2009 6:01 am
Forum: Investing - Theory, News & General
Topic: Frontline: The Madoff Affair
Replies: 28
Views: 5447

If I can't trust the government to regulate funds I hope I can trust government not to default on my bonds.