Search found 8248 matches

by Rick Ferri
Thu Jun 21, 2018 7:45 pm
Forum: Investing - Theory, News & General
Topic: Are mutual funds safer than ETFs?
Replies: 15
Views: 1423

Re: Are mutual funds safer than ETFs?

One is not safer than the other because ETFs are mutual funds, with certain regulatory relief. They are governed by the Investment Company Act of 1940 and regulated by the SEC. it’s all the same stuff.
by Rick Ferri
Thu Jun 21, 2018 2:16 pm
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 56
Views: 3350

Re: Factor Investing Makes Someone Money, But Maybe Not You

My goal with this post is NOT to convince anyone to avoid a factor tilt strategy; it’s to ensure people know what they’re getting into. It takes a higher cost and die-hard discipline needed to make this strategy work in the long-term.
by Rick Ferri
Thu Jun 21, 2018 12:46 pm
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 56
Views: 3350

Re: Factor Investing Makes Someone Money, But Maybe Not You

All the chatter about tilting to factors today reminds me of the excitement of tilting to industry sector funds when they flourished in the 1990s.

Rick Ferri
by Rick Ferri
Thu Jun 21, 2018 8:14 am
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 56
Views: 3350

Factor Investing Makes Someone Money, But Maybe Not You

Factor investing is discussed ad nauseam on this forum. Lately, it has reached the point were investors who shouldn’t do factor investing become confused to the point of believing they should or they’ll miss out on something. Let’s correct that. Factor investing is complex and the “optimal” way to d...
by Rick Ferri
Thu Jun 21, 2018 8:02 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 62
Views: 5594

Re: Larry Swedroe: The Battle Of Passive Strategies

Factor investing is complex and the “optimal” way to do it is always changing because there is no optimal way that can be known in advance. That being said, it’s all to common for advisers to relentlessly push complex investment strategies such as “optimal factor allocation” because it makes the adv...
by Rick Ferri
Thu Jun 21, 2018 7:44 am
Forum: Investing - Help with Personal Investments
Topic: help, inheritance of $3.5M, read & read BogleH, & still in the dark
Replies: 26
Views: 3250

Re: help, inheritance of $3.5M, read & read BogleH, & still in the dark

If I were in your shoes, I would: 1) pay $1 mm cash for the home, leaving $2.5 mm 2) put the money at one custodian (Schwab or Vanguard). There is no risk in this. 3) invest in a simple 50 % stock, 50% bond portfolio of core stock and bond index funds (mostly US stock, and use an intermediate-term b...
by Rick Ferri
Tue Jun 19, 2018 9:17 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 62
Views: 5594

Re: Larry Swedroe: The Battle Of Passive Strategies

If you tilt, I recommend a barbell. Use 75% in total market, 25% in the most heavily factor weighted fund or funds you can find.
by Rick Ferri
Tue Jun 19, 2018 9:08 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 46
Views: 4878

Re: General Electric booted from Dow Jones Industrial Average

Who cares? The DJIA should have been retired a long time ago. Agreed, who cares? Also, this has been expected for a LONG time. S&P Dow Jones cares because they get licensing fees from fund companies that track the DJIA, such as ticker DIA, which has $22 billion in assets. So, it won’t be killed off...
by Rick Ferri
Tue Jun 19, 2018 8:58 pm
Forum: Investing - Theory, News & General
Topic: Our interview with Taylor Larimore
Replies: 17
Views: 3623

Re: Our interview with Taylor Larimore

PartIrish wrote:
Tue Jun 19, 2018 8:41 pm
Taylor Larimore has been a real inspiration to me on the financial planning side of life, but more important, he is a true gentleman online. Thank you, Taylor, for your extraordinary contributions to the well-being of others!
x 100!
by Rick Ferri
Tue Jun 19, 2018 8:25 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 46
Views: 4878

Re: General Electric booted from Dow Jones Industrial Average

The DJIA isn’t terrible; just bad. It’s a price weighted “indicator”, not a market index. The idea is to provide a general direction of the price of a few stocks (there were only a few stocks traded when the indicator was created). The allocation to each stock is based on the market price of one sha...
by Rick Ferri
Tue Jun 19, 2018 7:22 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 46
Views: 4878

Re: General Electric booted from Dow Jones Industrial Average

The stock market is not the economy. It reflects only about 40% of business conducted in the economy. Some large industries have only a small market footprint, such as real estate, others have no footprint, such as legal devices.
by Rick Ferri
Tue Jun 19, 2018 5:24 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 46
Views: 4878

Re: General Electric booted from Dow Jones Industrial Average

Who cares? The DJIA should have been retired a long time ago.
by Rick Ferri
Tue Jun 19, 2018 5:06 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 62
Views: 5594

Re: Larry Swedroe: The Battle Of Passive Strategies

I understand the argument. I don’t agree with it. Factor premiums are not guarantees. I don’t treat them like they are. They should be used as a potential additive to beta, not a substitute for beta.
by Rick Ferri
Tue Jun 19, 2018 7:11 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 62
Views: 5594

Re: Larry Swedroe: The Battle Of Passive Strategies

Or it could be a random event. How one decides which selection and weighting methodology to use for value or any other factor goes beyond the icing on the cake. It is the sprinkles on the icing on the cake. In other words, it’s mostly an academic excerise. The “best” method as measured by performanc...
by Rick Ferri
Tue Jun 19, 2018 6:58 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 62
Views: 5594

Re: Larry Swedroe: The Battle Of Passive Strategies

OP wrote: When a fund has deeper factor exposure, less market beta exposure needs to be taken on to achieve the same tilt: a more efficient portfolio. I do not believe in having less market exposure because of a hope that other factor premiums will make up the difference. I believe in allocating to...
by Rick Ferri
Mon Jun 18, 2018 9:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 62
Views: 5594

Re: Larry Swedroe: The Battle Of Passive Strategies

OP wrote: When a fund has deeper factor exposure, less market beta exposure needs to be taken on to achieve the same tilt: a more efficient portfolio. I do not believe in having less market exposure because of a hope that other factor premiums will make up the difference. I believe in allocating to ...
by Rick Ferri
Thu Jun 14, 2018 7:41 am
Forum: Investing - Theory, News & General
Topic: New JUST ETF - thoughts?
Replies: 12
Views: 651

Re: New JUST ETF - thoughts?

Here is the reason the article says the fund is “better” than the S&P 500: it’s not better because it’s going to outperform the S&P 500 funds (it might, it might not, no one knows). Instead, it’s better because the stocks in it are chosen according to what you might call a crowdsourced dynamic value...
by Rick Ferri
Mon Jun 11, 2018 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: Explanation of free credit scores
Replies: 16
Views: 1680

Re: Explanation of free credit scores

The free ones on Crefit Karma are not updated often either. I paid off a bank loan 3 weeks ago and it’s still showing today.
by Rick Ferri
Sun Jun 10, 2018 8:42 pm
Forum: Personal Consumer Issues
Topic: Life in retirement - what did you do today?
Replies: 194
Views: 16502

Re: Life after FIRE

FIRE means Financial Independence / Retire Early. The idea is to be financially frugal, save religiously, invest wisely and accumulate enough to walk away from it all before age 60 (?) if you want too.
by Rick Ferri
Sat Jun 09, 2018 9:38 pm
Forum: Investing - Theory, News & General
Topic: Multi-Asset vs. Simple Portfolio, 1970-2017
Replies: 37
Views: 3029

Re: Multi-Asset vs. Simple Portfolio, 1970-2017

snarky jack,

The problem with complexity isn’t the strategy, it’s the lack of long-term commitment by an investor. No harm in adding small value as long as it’s a 25 year commitment.

Rick Ferri
by Rick Ferri
Sat Jun 09, 2018 6:55 pm
Forum: Investing - Theory, News & General
Topic: Multi-Asset vs. Simple Portfolio, 1970-2017
Replies: 37
Views: 3029

Re: Multi-Asset vs. Simple Portfolio, 1970-2017

I can’t guarantee much, but I can guarantee that nothing in those tables is going to change my life or my portfolio. There is no silver bullet to slay the markets. There is no such thing as a free lunch on Wall Street. The only “alpha” in all this is the revenue generated in fees charged by those ma...
by Rick Ferri
Sat Jun 09, 2018 6:32 pm
Forum: Investing - Theory, News & General
Topic: Multi-Asset vs. Simple Portfolio, 1970-2017
Replies: 37
Views: 3029

Re: Multi-Asset vs. Simple Portfolio, 1970-2017

:sharebeer

The best strategy for each investor is the one that keeps them in the game long-term. That strategy could be different for each of us, and, one could argue, should be different.

Rick Ferri
by Rick Ferri
Sat Jun 09, 2018 5:56 pm
Forum: Investing - Theory, News & General
Topic: Multi-Asset vs. Simple Portfolio, 1970-2017
Replies: 37
Views: 3029

Re: Multi-Asset vs. Simple Portfolio, 1970-2017

In theory, you’re correct. In real life, you're not. There were no commodity funds, REIT funds or even small cap index funds in the 1970s. Today they do exist, but the costs for those funds are higher. And which commodity index do you use? They’re all very different. What happens if you pick the wro...
by Rick Ferri
Fri Jun 08, 2018 2:43 pm
Forum: Personal Consumer Issues
Topic: Death - Prediction
Replies: 63
Views: 3785

Re: Death - Prediction

Father is 90
Mother is 85
Both in fairly good health

I’m shooting for 100!
by Rick Ferri
Thu Jun 07, 2018 6:30 pm
Forum: Investing - Theory, News & General
Topic: Indexing will fail investors in next decade
Replies: 57
Views: 8869

Re: Indexing will fail investors in next decade

Ten years ago, Robb Arnott from Research Affiliates claimed the S&P 500 was a great index for the previous 50 years, and that “fundamental indexing” will take its place over the next 50 years. That hasn’t happened either.
by Rick Ferri
Thu Jun 07, 2018 8:39 am
Forum: Investing - Help with Personal Investments
Topic: Breaking Up and Staying On Good Terms with an Advisor
Replies: 28
Views: 3159

Re: Breaking Up and Staying On Good Terms with an Advisor

I’ll give you the adviser’s side of this. For the record, I was an adviser for 29 years, currently not in the adviser business, but will be back in the business after a non-compete is over next April. Most of the time, good-bye is good-bye. After a client leaves, unless they contacted me, I didn’t c...
by Rick Ferri
Mon Jun 04, 2018 6:38 pm
Forum: Personal Finance (Not Investing)
Topic: Might one take social security before 70 because you would hit total family benefits earlier?
Replies: 32
Views: 2223

Re: Might one take social security before 70 because you would hit total family benefits earlier?

I ran the tool and it recommended that I go to age 70 and my wife (whose PIA is about $100/month less than mine) go at age 62 and 1 month. (She is about 3-1/2 years younger than me.) What I find lacking in this calculator is the ability to factor in the cost of drawing on your retirement accounts t...
by Rick Ferri
Fri Jun 01, 2018 4:03 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Two Articles On Reinsurance
Replies: 41
Views: 3286

Re: Larry Swedroe: Two Articles On Reinsurance

I looked at reinsurance funds a few years ago. It's interesting, but I didn't buy. First, the fund fees are too high. Second, there are a lot of dollars chasing a few deals so pricimg is skewed toward overpricing (underpricing risk).

Rick Ferri
by Rick Ferri
Wed May 30, 2018 10:18 am
Forum: Investing - Theory, News & General
Topic: To be or not to be complex, that is the question
Replies: 146
Views: 11694

Re: To be or not to be complex, that is the question

A favorite quote: " In theory, theory and practice are the same; in practice, they're not. " True. But theory also sells complexity well. Consider the large number of advisers who put something like this in their marketing material: We put Nobel-prize winning research into practice. Theory could pr...
by Rick Ferri
Wed May 30, 2018 6:42 am
Forum: Investing - Theory, News & General
Topic: To be or not to be complex, that is the question
Replies: 146
Views: 11694

To be or not to be complex, that is the question

Bogleheads spend a lot of time talking about the benefits and drawbacks of simple portfolio strategies and “complex” strategies. Simple portfolios include Life-Strategy funds, 2-fund, 3-fund, Core-4 and other set and forget type strategies. Complex portfolios include factor tilts, commodity exposure...
by Rick Ferri
Mon May 28, 2018 3:40 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Brokerage Account
Replies: 17
Views: 2347

Re: Vanguard Brokerage Account

I have all my accounts set up under Vanguard brokerage, new and all, and I wouldn't want it any other way. It's so much easier to have one account for everything (ETFs, other company funds, CDs, etc.) than a separate account for one set of investments and another for just Vanguard mutual funds. Rick...
by Rick Ferri
Mon May 28, 2018 2:10 pm
Forum: Investing - Theory, News & General
Topic: Fact, Fiction, and the Size Effect
Replies: 84
Views: 6476

Re: Fact, Fiction, and the Size Effect

On paper, a more complex strategy should outperform a simple one, but I don't believe it does in real life for most people. The outcome of simplicity is actually greater in real life than the outcome for complexity, even if in theory complexity outperforms. We know complexity will cost more and that...
by Rick Ferri
Mon May 28, 2018 11:55 am
Forum: Investing - Theory, News & General
Topic: Fact, Fiction, and the Size Effect
Replies: 84
Views: 6476

Re: Fact, Fiction, and the Size Effect

I definitely have the above mentioned bug....As I’ve progressed in investing, and now have more to lose, I see risk as putting all my bets on the single factor, market beta. Dave Hmm. We disagree on what progress in investing is. I see progress as getting beyond complexity, buying a few total-marke...
by Rick Ferri
Mon May 28, 2018 11:12 am
Forum: Investing - Theory, News & General
Topic: Index fund investing requires active management
Replies: 10
Views: 2213

Index fund investing requires active management

Index funds and ETFs that track indexes don't manage themselves. Selecting securities and allocating capital within an index tracking fund requires hundreds of active decisions every day. In addition, the index is constantly moving. Bonds are maturing, stocks buybacks are occurring, downgrades, buyo...
by Rick Ferri
Mon May 28, 2018 9:56 am
Forum: Investing - Help with Personal Investments
Topic: Creative Planning vs Vanguard PAS
Replies: 90
Views: 5363

Re: Creative Planning vs Robo-advisor

If you don't mind doing the trading yourself, you should consider the services of an advice-only adviser. Advice-only advisers charge a hourly fee or subscription service for advice-only. They may not be able to physically trade your account because they don't have permissions. A new service offered...
by Rick Ferri
Wed May 23, 2018 6:23 am
Forum: Investing - Theory, News & General
Topic: Fact, Fiction, and the Size Effect
Replies: 84
Views: 6476

Re: Fact, Fiction, and the Size Effect

I believe the conclusion we can draw from the evidence is that small size alone has not outperformed on a risk-adjusted basis, and that a higher allocation to small cap over its market cap weight should be done using a multi-factor approach.
by Rick Ferri
Tue May 22, 2018 11:50 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans To Launch Total World Bond ETF
Replies: 30
Views: 3438

Re: Vanguard Announces Plans To Launch Total World Bond ETF

Here we go, get ready for the Two-Funder -- Total World Stock -- Total World Bond Good luck y gracias por leer / cfs I’m not a big fan of hedged international bonds, but I believe this will be the new two-fund portfolio, and quite frankly, I have no major problem with that. Rick Ferri But it is a E...
by Rick Ferri
Mon May 21, 2018 12:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans To Launch Total World Bond ETF
Replies: 30
Views: 3438

Re: Vanguard Announces Plans To Launch Total World Bond ETF

cfs wrote:
Mon May 21, 2018 10:38 am
Here we go, get ready for the Two-Funder
-- Total World Stock
-- Total World Bond
Good luck y gracias por leer / cfs
I’m not a big fan of hedged international bonds, but I believe this will be the new two-fund portfolio, and quite frankly, I have no major problem with that.

Rick Ferri
by Rick Ferri
Sun May 20, 2018 7:18 pm
Forum: Investing - Theory, News & General
Topic: Edelman & Financial Engines merging
Replies: 36
Views: 4000

Re: Edelman & Financial Engines merging

Every Financial Engines client will get the hard sell on Edelman Financial Services (fees up to 1.5% before fund costs) especially when they retire and roll out of their 401(k) plans. Considering that Financial Engines has over $160 billion in assets under advisement for tens of thousands of clients...
by Rick Ferri
Sun May 20, 2018 6:53 pm
Forum: Investing - Help with Personal Investments
Topic: Rick Ferri Core Four questions
Replies: 13
Views: 1632

Re: Rick Ferri Core Four questions

Information about the Virtual Bogleheads Community is here:

viewtopic.php?f=9&t=126449&start=50
by Rick Ferri
Sun May 20, 2018 6:32 pm
Forum: Investing - Help with Personal Investments
Topic: Rick Ferri Core Four questions
Replies: 13
Views: 1632

Re: Rick Ferri Core Four questions

Thanks Rick. I was most hoping you might chime in. Can you address whether you (currently) recommend 30% of the Equity allocation be in Int'l Stock? If my 40% is too high, how fast should I unwind it? Can you speak to the REIT allocation at all? I really appreciate it. 40% is not too high. REITs ar...
by Rick Ferri
Sun May 20, 2018 5:24 pm
Forum: Investing - Help with Personal Investments
Topic: Rick Ferri Core Four questions
Replies: 13
Views: 1632

Re: Rick Ferri Core Four questions

My traditional Core-4 portfolio of US stocks, international stocks, REITs and a bond index fund can be modified any way you like to fit your needs. My allocation contains no knowledge of which asset class will outperform or underperform in the short-term. I hope that message isn’t being transmitted ...
by Rick Ferri
Sun May 20, 2018 4:18 pm
Forum: Local Chapters and Bogleheads Community
Topic: [Virtual online chapter - Master thread]
Replies: 98
Views: 15338

Re: [Virtual online chapter - Master thread]

I think the video we are talking about will be from the virtual meeting this coming Tuesday. It was my understanding these meetings are archived.
by Rick Ferri
Sun May 20, 2018 1:26 pm
Forum: Local Chapters and Bogleheads Community
Topic: [Virtual online chapter - Master thread]
Replies: 98
Views: 15338

Re: [Virtual online chapter - Master thread]

I can't, but perhaps a moderator might.

Thanks for asking.

Rick Ferri
by Rick Ferri
Sun May 20, 2018 1:25 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 9510

Re: Three-fund portfolio returns and variance drain

My view is asset class diversification's primary goal is risk diversification. It reduces the risk of a large loss. Any other benefit that might occur is ancillary to this function.

Rick Ferri
by Rick Ferri
Sun May 20, 2018 1:04 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 9510

Re: Three-fund portfolio returns and variance drain

We diversify asset classes to reduce the risk of a large loss. We don't diversify to because there's an expected portfolio benefit from rebalancing. If that happens, great, but it shouldn't be counted on. To be clear, an expected portfolio benefit from rebalancing asset classes should not be include...
by Rick Ferri
Sun May 20, 2018 12:50 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 9510

Re: Three-fund portfolio returns and variance drain

I read all of this and a few of things come to mind: 1) Fees matter. There's no ambiguity in that equation. A penny saved is a penny earned. 2) The expected return of a total stock market index fund is the market less a negligible fee. There's no ambiguity there either. 3) Any fund or strategy that ...
by Rick Ferri
Sun May 20, 2018 12:31 pm
Forum: Local Chapters and Bogleheads Community
Topic: [Virtual online chapter - Master thread]
Replies: 98
Views: 15338

Re: [Virtual online chapter - Master thread]

REMINDER I am looking forward to presenting at the next meeting Bogleheads Virtual Online Chapter meeting this Tuesday, May 22, at 8 PM EST. In brief, we'll be discussing a few concepts regarding The Education of an Index Investor: Topics include: :arrow: Three elements of investor success :arrow: F...
by Rick Ferri
Sun May 20, 2018 11:35 am
Forum: Investing - Theory, News & General
Topic: Bogle featured in Barrons cover story
Replies: 38
Views: 3704

Re: Bogle featured in Barrons cover story

Jack Bogle's Battle? What battle. The war is over. Index investing won. The arguments brought up against indexing are the same rehash we heard 20 years ago; too much money going into too few stocks, too much in index funds is dangerous, blah, blah, blah. This is not news!

Rick Ferri
by Rick Ferri
Fri May 18, 2018 9:36 am
Forum: Investing - Theory, News & General
Topic: Rob Arnott:index Investors Buy High, Sell Low
Replies: 51
Views: 5275

Re: Rob Arnott:index Investors Buy High, Sell Low

Don't listen to the arguments. Look at the data. If Rob is right, and this buy-high sell-low phenomenon in the markets is so easy to avoid, where is the outperformance by active managers?