Search found 8212 matches

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: 24
Views: 1967

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: 24
Views: 1967

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: 16
Views: 1672

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: 1379

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: 1379

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: 1379

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: 89
Views: 13517

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: 89
Views: 13517

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: 100
Views: 8136

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: 100
Views: 8136

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: 100
Views: 8136

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: 89
Views: 13517

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: 33
Views: 2660

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: 35
Views: 3143

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?
by Rick Ferri
Wed May 16, 2018 4:47 pm
Forum: Investing - Theory, News & General
Topic: Microcap Stock Screener
Replies: 15
Views: 914

Re: Microcap Stock Screener

Eric,

My response:

Total Stock Market Index Fund

and forgetaboutit.
by Rick Ferri
Tue May 15, 2018 5:28 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3596

Re: Vanguard Junk Bond fund

The NAV can decline for reasons other than default. Bonds can be downgraded and principal lost when sold. Bonds can be bought at a premium to par and will loss principal as they wind down to maturity. Bonds can be called at prices below the purchase price.
by Rick Ferri
Tue May 15, 2018 5:24 pm
Forum: Local Chapters and Bogleheads Community
Topic: Yes, I'm 89 all right! [Jack Bogle]
Replies: 126
Views: 8929

Re: Yes, I'm 89 all right! [Jack Bogle]

Happy belated 89th birthday!

Stay healthy. You are irreplaceable.

Rick Ferri
by Rick Ferri
Tue May 15, 2018 11:16 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3596

Re: Vanguard Junk Bond fund

Why would an investor care if the value drops if the investment purpose is just to receive income? With no intention to ever sell shares. Only to the extent that taking the entire SEC yield from a high yield corporate bond fund means you're taking out some principle, so your remaining investment va...
by Rick Ferri
Tue May 15, 2018 11:08 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3596

Re: Vanguard Junk Bond fund

I have a gut feeling that skilled choice of bonds is essential whereas VICSX is an index fund so committed to have no choice in bond quality ? I'm not so sure about that and it would be an anomaly if true. Fund managers rarely add alpha after fees. All risks being known and equal, an extremely low-...
by Rick Ferri
Tue May 15, 2018 10:32 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Junk Bond fund
Replies: 65
Views: 3596

Re: Vanguard Junk Bond fund

From a recent post on this forum : I should have noted that the link I posted with comments by Rick Ferri was posted in March 2008. It is very interesting to read the thread in that context and there are also a number of comments by Larry Swedroe. Rick Ferri made a projection of 7.2% for future retu...
by Rick Ferri
Mon May 14, 2018 1:24 pm
Forum: Personal Finance (Not Investing)
Topic: FINCON...other Boglehead-Type Groups
Replies: 5
Views: 850

Re: FINCON...other Boglehead-Type Groups

I attended the first FINCON conference in 2011. There were a couple of hundred of us. The second conference was three times as large. Now it's huge - a couple of thousand attendees I understand. I'll be going to FINCON 2018 this Sept 26-29 in Orlando.

Rick Ferri
by Rick Ferri
Sun May 06, 2018 1:43 pm
Forum: Personal Finance (Not Investing)
Topic: Retire Internationally for FIRE
Replies: 78
Views: 8837

Re: Retire Internationally for FIRE

Why go overseas? You can buy a used RV and travel extensively in the US, Canada and Mexico for the same money.
by Rick Ferri
Sat May 05, 2018 2:21 pm
Forum: Local Chapters and Bogleheads Community
Topic: [Virtual online chapter - Master thread]
Replies: 89
Views: 13517

Re: [Virtual online chapter - Master thread]

I’m looking forward to our virtual meeting and a discussion about “The Education of an Index Investor.” In the mean time, think about where YOU are in your education!

😀

Rick Ferri
by Rick Ferri
Wed May 02, 2018 10:36 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market Benchmark Changes Over Time
Replies: 13
Views: 2121

Re: Total Bond Market Benchmark Changes Over Time

The Vanguard Total Bond Market benchmark has changed over time. The percentage on Treasury bonds has been as high as 50% and as low as 21%. In addition, the benchmark changed to float-adjusted after to financial crisis to take out Treasury bonds and other debt on the Feds balance sheet. An article ...
by Rick Ferri
Mon Apr 30, 2018 6:06 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Market Benchmark Changes Over Time
Replies: 13
Views: 2121

Re: Total Bond Market Benchmark Changes Over Time

My understanding at the time this index was created and Vanguard adopted it was the float adjusted index excludes Treasuries purchased in the market by the Fed and that’s all. Also, I recall the index was created because Vanguard specifically asked for it, which might explain why other fund provider...
by Rick Ferri
Mon Apr 30, 2018 9:39 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market Benchmark Changes Over Time
Replies: 13
Views: 2121

Re: Total Bond Market Benchmark Changes Over Time

As with much in the ever expanding market for index based products, the stories are big, the differences in return small.
by Rick Ferri
Mon Apr 30, 2018 7:14 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market Benchmark Changes Over Time
Replies: 13
Views: 2121

Re: Total Bond Market Benchmark Changes Over Time

Agreed. All cap weighted indexes adapt to current market conditions. It’s all interesting, though. In this case, Vanguard changed the index it followed to free float so the Total Bond Market Index Fund it wasn’t as Treasury heavy.
by Rick Ferri
Mon Apr 30, 2018 6:44 am
Forum: Investing - Theory, News & General
Topic: Total Bond Market Benchmark Changes Over Time
Replies: 13
Views: 2121

Total Bond Market Benchmark Changes Over Time

The Vanguard Total Bond Market benchmark has changed over time. The percentage on Treasury bonds has been as high as 50% and as low as 21%. In addition, the benchmark changed to float-adjusted after to financial crisis to take out Treasury bonds and other debt on the Feds balance sheet. An article o...
by Rick Ferri
Tue Apr 24, 2018 3:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard factor funds slow to catch on
Replies: 50
Views: 4608

Re: Vanguard factor funds slow to catch on

bschultheis wrote:
Tue Apr 24, 2018 1:33 pm
I just love all this factor / smart beta stuff. Makes my life so much easier, because it gets investors to focus on irrelevant things, thinking that these things actually matters in the big picture of reaching financial goals.

Bill
+1
Don't try this at home.
by Rick Ferri
Tue Apr 24, 2018 3:00 pm
Forum: Investing - Theory, News & General
Topic: A Challenge To The 3 Fund Portfolio...The 2 Fund Portfolio
Replies: 32
Views: 3245

Re: A Challenge To The 3 Fund Portfolio...The 2 Fund Portfolio

The challenge isn't to compare one to another, the challenge is get people to do ANY of them and stick to the strategy long-term. If two funds work for you, GREAT! Do it! If Core-4 is your thing, OUTSTANDING! Go for it! You like Taylor's three-fund portfolio, FANTASTIC! It's an excellent choice! It'...
by Rick Ferri
Tue Apr 24, 2018 2:04 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

True, but we know what causes the higher correlation with equites at times. There’s no complexity in understanding the risks in a diversified portfolio of high yield corporate bonds.
by Rick Ferri
Tue Apr 24, 2018 10:22 am
Forum: Personal Consumer Issues
Topic: Nomadic lifestyle in their 50s
Replies: 101
Views: 10345

Re: Nomadic lifestyle in their 50s

We've been living the Vagabond Life for the past two years. It's going to end soon as we are settling down in the Austin area. You can read about our adventures here:

50-50.us

Rick Ferri
by Rick Ferri
Tue Apr 24, 2018 9:16 am
Forum: Investing - Theory, News & General
Topic: Vanguard factor funds slow to catch on
Replies: 50
Views: 4608

Re: Vanguard factor funds slow to catch on

My view of how to use factor funds in a portfolio differs from most. I do a "barbell" approach. Start with VTI or similar very cheap total market fund and supplement it with the most value intensive, small-cap intensive, momentum intensive, quality intensive fund you can find and don't worry too muc...
by Rick Ferri
Tue Apr 24, 2018 9:10 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

Complexity - another reason not to own hedged international bond funds. If you don't understand what you're buying (in this case currency hedging), you'll be inclined to sell it at the wrong time and that harms your long-term return.

Rick Ferri
by Rick Ferri
Tue Apr 24, 2018 9:04 am
Forum: Investing - Help with Personal Investments
Topic: Managed Beating Index?
Replies: 35
Views: 2560

Re: Managed Beating Index?

BND returned 1.7% over the past 5 years through 3/13/2018 according to the Vanguard website. The ETF is 64% in government bonds of which 21% are mortgage backed securities. BND probably isn't the appropriate benchmark to compare to a managed account that likely has more corporate bonds and issues wi...
by Rick Ferri
Mon Apr 23, 2018 7:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard factor funds slow to catch on
Replies: 50
Views: 4608

Re: Vanguard factor funds slow to catch on

My take on Vanguard factor funds is the same as their international bond fund and their muni bond ETF; Vanguard investors were buying elsewhere, so offer them a quality competing product at a low fee. It’s not as though Vanguard expects this strategy to be its future.
by Rick Ferri
Mon Apr 23, 2018 2:27 pm
Forum: Investing - Theory, News & General
Topic: NYT article: Everyone should hire a financial planner
Replies: 103
Views: 9148

Re: NYT article: Everyone should hire a financial planner

Rick, i have nothing against a reasonable AUM fee, but is it reasonable to charge the person who has $10M only slightly less on % basis compared to the person who has $1M? From what I've seen, they pay 8X to 9x more for roughly the same advice. I say "roughly," because there undoubtedly are a certa...
by Rick Ferri
Mon Apr 23, 2018 1:44 pm
Forum: Investing - Theory, News & General
Topic: NYT article: Everyone should hire a financial planner
Replies: 103
Views: 9148

Re: NYT article: Everyone should hire a financial planner

If you remove the AUM fee you end up with an "advice only" model. Like an attorney or tax preparer, who charges for the work they actually do. When they have done nothing they get paid nothing. 99.99999% of the time, the asset manager is doing nothing. And that is a very good thing. If you want som...
by Rick Ferri
Mon Apr 23, 2018 11:31 am
Forum: Investing - Theory, News & General
Topic: Vanguard factor funds slow to catch on
Replies: 50
Views: 4608

Re: Vanguard factor funds slow to catch on

For those of you using Vanguard's Personal Advisory Services (PAS) have they started pitching a factor strategy? That would seem to be the easiest way for Vanguard to get these funds off the ground. Maybe stick them in LifeStrategy funds as well, like they did with their international bond fund whe...
by Rick Ferri
Mon Apr 23, 2018 8:28 am
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 2159
Views: 1332033

Re: "A successful index fund investor goes through four phases"

Bogleheads: Rick Ferri recently made a post which Three-Fund Portfolio investors will appreciate: A successful index fund investor goes through four phases: 1) Darkness - takes advice from everyone; 2) Enlightenment - realizes a market return is superior to their return; 3) Complexity - overdoing e...
by Rick Ferri
Mon Apr 23, 2018 8:17 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

Based on LadyGeek’s request, this was my fixed income allocation in the most recent edition of “All About Asset Allocation”: 60% Total Bond Index 20% TIPS 20% High Yield Corporate Rick Ferri Hi Rick - I am I am correct you have recommended this bond allocation for well over a decade and have not ch...
by Rick Ferri
Mon Apr 23, 2018 7:55 am
Forum: Investing - Theory, News & General
Topic: Vanguard factor funds slow to catch on
Replies: 50
Views: 4608

Vanguard factor funds slow to catch on

Follow the money? What money? There is no money. You’d think with all the hype about factor investing and Vanguard’s entry into the arena with six actively managed factor funds that investors would be flocking to them. It’s not happening. Asset flows into most of Vanguard’s new funds have been the e...
by Rick Ferri
Sun Apr 22, 2018 6:33 pm
Forum: Local Chapters and Bogleheads Community
Topic: Too much Bogleheads.org?
Replies: 79
Views: 11071

Re: Too much Bogleheads.org?

A successful index fund investor goes through four phases: 1) Darkness - takes advice from everyone; 2) Enlightenment - realizes a market return is superior to their return; 3) Complexity - overdoing everything to find optimal; 4) Simplicity - invests in a few total market funds Dear OP, You’re in ...
by Rick Ferri
Sun Apr 22, 2018 10:57 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

Based on LadyGeek’s request, this was my fixed income allocation in the most recent edition of “All About Asset Allocation”:

60% Total Bond Index
20% TIPS
20% High Yield Corporate

Rick Ferri
by Rick Ferri
Sun Apr 22, 2018 8:42 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

This decision makes no difference to the Boglehead philosophy of low-cost, broad diversification, no market speculation. The decision to include international bonds or not is a strategy decision that each investor makes for themselves. Do what works for you. Do what maintains discipline. Philosophy ...
by Rick Ferri
Sun Apr 22, 2018 7:56 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

I agree YTM doesn’t predict *exact* return in a bond portfolio, but it’s pretty darn close at its duration. For example, if a portfolio has a 3% yield and a duration of 5 years, then 5 years from now the annualized return will be very close to 3% assuming all interest is reinvested.

Rick Ferri
by Rick Ferri
Sun Apr 22, 2018 7:28 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

As I noted early, several developed country central banks forced their bond yields below zero percent and that lifted total return on bonds in those counties well over US bonds. They’ll be a payback for that in the future. I prefer not to have the added risk in my portfolio. For the record, at this ...
by Rick Ferri
Sun Apr 22, 2018 6:37 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

As it was pointed out, the SEC yield on a hedge international bond funds is not the expected total return. These funds use futures and swaps to hedge currency risk. The hedging strategy often produces a much different expected total return than yield alone, and that return is not very predictable. I...
by Rick Ferri
Sat Apr 21, 2018 7:12 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 168
Views: 13192

Re: I’m still not a fan of international bond funds

Here is an excellent new article by Jonathan Clements about non-US investors that fits perfectly with this conversation

Exposing Yourself

Rick Ferri
by Rick Ferri
Sat Apr 21, 2018 6:48 pm
Forum: Personal Finance (Not Investing)
Topic: Settlement Offer -- Accept or Wait?
Replies: 66
Views: 5474

Re: Settlement Offer -- Accept or Wait?

I am not an attorney and do not provide legal advice, but I've been in situations like this before. Here are my suggestions: 1) You're out of your league. Get legal help from an attorney who specializes in auto accidents, then let your attorney tell you what you should be asking for. Follow his or h...