Search found 8184 matches

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: 3593

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: 21
Views: 1834

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: 137
Views: 7857

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: 61
Views: 4778

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: 3593

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: 137
Views: 7857

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: 19
Views: 1255

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: 3593

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: 8080

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: 8080

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: 3593

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: 2137
Views: 1312052

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: 137
Views: 7857

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: 3593

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: 10104

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: 137
Views: 7857

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: 137
Views: 7857

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: 137
Views: 7857

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: 137
Views: 7857

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: 137
Views: 7857

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: 137
Views: 7857

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: 4900

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...
by Rick Ferri
Sat Apr 21, 2018 4:22 pm
Forum: Investing - Theory, News & General
Topic: NYT article: Everyone should hire a financial planner
Replies: 103
Views: 8080

Re: NYT article: Everyone should hire a financial planner

An investment adviser who provides extra services should also provides each client with a line-item invoice at least quarterly that lists each service and each cost during the period. That is what transparency means. It is what a fiduciary is expected to do. Hi Rick, Thanks for the detailed answer....
by Rick Ferri
Sat Apr 21, 2018 4:22 pm
Forum: Investing - Theory, News & General
Topic: NYT article: Everyone should hire a financial planner
Replies: 103
Views: 8080

Re: NYT article: Everyone should hire a financial planner

An investment adviser who provides extra services should also provides each client with a line-item invoice at least quarterly that lists each service and each cost during the period. That is what transparency means. It is what a fiduciary is expected to do. Hi Rick, Thanks for the detailed answer....
by Rick Ferri
Sat Apr 21, 2018 2:43 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

What I love about is board is no one gets away with even the tiniest mistake. That's good. It keeps us all honest!

Rick Ferri
by Rick Ferri
Sat Apr 21, 2018 2:38 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

It was probably the first edition of the book I wrote about 13 years ago. At the time, I did recommend EM closed-end bond funds because they were selling at deep discount to NAV. Those funds were converting to open-end and there was a unique opportunity for risk-free arbitrage. All of the EM closed ...
by Rick Ferri
Sat Apr 21, 2018 1:57 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

Bobcat2,

You might want to modify or delete your post because nowhere does it show I recommend emerging market bonds.

Also, for the record, I no longer own or manage an investment firm.

Rick Ferri
by Rick Ferri
Sat Apr 21, 2018 9:20 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

As a non-financial expert (I'm a biologist), I confess to having them in my portfolio mainly because the 5.x trillion dollar Vanguard recommends that I have them. I admit I am trusting that they are recommending them because they believe them to be in my best interest, and not their own. As a power...
by Rick Ferri
Sat Apr 21, 2018 8:58 am
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

Hi Rick, I pay the .19 expense ratio and use VTWSX across all my retirement accounts and taxable account. The .19 is worth it to me because it will deter me from taking action and adjusting the domestic and international allocation every time an international thread appears on this forum. I also pa...
by Rick Ferri
Sat Apr 21, 2018 7:36 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

International bonds did outperform handily during a recent period when many developed countries like Japan and Germany experienced interest rate drops so dramatic that bond yields fell well below zero. Just remember one of Jack Bogle’s favorite phrases, “Regression to the mean!”
by Rick Ferri
Sat Apr 21, 2018 7:25 am
Forum: Investing - Theory, News & General
Topic: NYT article: Everyone should hire a financial planner
Replies: 103
Views: 8080

Re: NYT article: Everyone should hire a financial planner

I’ll be blunt. As a former adviser with 30 years under my belt, I have some insight here. I’ve always believed it can be a breach of an adviser’s fiduciary duty to charge higher fees based assets under management (AUM) as compensation for services offered when those extra services are not directly r...
by Rick Ferri
Sat Apr 21, 2018 6:23 am
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

It is great to see so many non-US based Bogleheads on the board. My how we’ve grown! My belief for all investors is to keep portfolio complexity as low as needed to accomplish a financial goal. Doing this reduces cost and increases the probability an investor will stay disciplined. This view on inte...
by Rick Ferri
Fri Apr 20, 2018 8:36 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

randomizer wrote:
Fri Apr 20, 2018 8:29 pm
As a US-based investor, I agree.

If investing from overseas, I would go for an international currency-hedged fund, even if the yields sthink. Bonds for safety, not returns.
Thanks for clarifying. I agree in general. It depends on the county an investor resides in.

Rick Ferri
by Rick Ferri
Fri Apr 20, 2018 8:31 pm
Forum: Investing - Theory, News & General
Topic: NYT article: Everyone should hire a financial planner
Replies: 103
Views: 8080

Re: NYT article: Everyone should hire a financial planner

I've hired an hourly financial planner a couple of times in the past 10-years and was very satisfied. The cost was nominal because I only needed help with a few issues. I didn't need or want a full-blown financial plan or portfolio management services, which increase the cost.

Rick Ferri
by Rick Ferri
Fri Apr 20, 2018 8:22 pm
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

guyesmith wrote:
Fri Apr 20, 2018 7:10 pm
Great! Ill look forward to it. If I may, other than being an etf why does it matter VT vs VTWSX? Just ER?
Yes. The fee difference is about 0.09%. Not huge, but something to consider.

Rick
by Rick Ferri
Fri Apr 20, 2018 8:13 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

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

Lack_ey, Yes, that's the big unknown. According to purchasing power parity, the net outcome is supposed to be the same for both US bonds and developed market bonds (before considering credit differences). But accepting this assumes the market is correct in its estimate of future inflation and short ...
by Rick Ferri
Fri Apr 20, 2018 6:54 pm
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

I am referencing Vanguard Total World Stock Market Index Fund - ETF ticker: VT Rick: Do you have any articles on VTWSX as part of your two-fund portfolio plan or as a one-fund portfolio? I'm 33 yrs old and considering VTWSX vs VTSAX as a one-fund portfolio until at least age 50. Any docs? I’d be mo...
by Rick Ferri
Fri Apr 20, 2018 6:47 pm
Forum: Investing - Theory, News & General
Topic: I’m still not a fan of international bond funds
Replies: 137
Views: 7857

I’m still not a fan of international bond funds

I’ve never been a big fan of international bond funds (see my “All About Asset Allocation” book and other posts I’ve made here in the past). They have higher fees than comparable US bond funds and hedging currency adds another hidden layer of cost. On top of that, at the present time, the yields sti...
by Rick Ferri
Thu Apr 19, 2018 12:15 pm
Forum: Investing - Help with Personal Investments
Topic: What is "journaling" of assets?
Replies: 16
Views: 2183

Re: What is "journaling" of assets?

To journal (verb) in the brokerage industry means to move cash and investments from one brokerage account to another either partially or in full. "We journalled your minimum IRA distribution from your IRA account to your joint account today."

Rick Ferri
by Rick Ferri
Wed Apr 18, 2018 7:03 am
Forum: Investing - Theory, News & General
Topic: Rise in rates continues - good for fixed income investors and banks
Replies: 6
Views: 1159

Rise in rates continues - good for fixed income investors and banks

Times have changed. One year T-bills are 2.15% and the best one year CD rates are at 2.20% according to Bankrate. This is close to the 2.4% annualized inflation rate reported on April 11. Historically, one-year bills yield about 0.5% more than inflation. It's getting there! The increase in interest ...
by Rick Ferri
Sat Apr 14, 2018 3:54 pm
Forum: Investing - Help with Personal Investments
Topic: Lazy Portfolio - Using Fidelity ETF's Vs Vanguard ETF's
Replies: 29
Views: 2429

Re: Lazy Portfolio - Using Fidelity ETF's Vs Vanguard ETF's

Any Lazy Portfolio will work for you if you’re disciplined about maintaining it. Core-4 is one option, 3 fund portfolio is another, or use a single Lifestyle fund. The philosophy is all the same. No one can tell you today which strategy will be best in the future. The anatomy of a successful index p...
by Rick Ferri
Sat Apr 14, 2018 8:34 am
Forum: Investing - Theory, News & General
Topic: Factor Investing - A convincing article
Replies: 67
Views: 5526

Re: Factor Investing - A convincing article

Making you portfolio more complex than it needs to be provides one guarantee: it will increase cost. That being said, there is a chance a complex portfolio that’s maintained diligently for many years will generate a higher return.
by Rick Ferri
Wed Apr 11, 2018 11:27 am
Forum: Investing - Theory, News & General
Topic: Stock market investors on higher floors take more risks
Replies: 13
Views: 1640

Re: Stock market investors on higher floors take more risks

What about those who serve in our Navy’s submarine fleet?
by Rick Ferri
Wed Apr 11, 2018 7:20 am
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

I am referencing Vanguard Total World Stock Market Index Fund - ETF ticker: VT
by Rick Ferri
Tue Apr 10, 2018 9:27 am
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

Whether you select a US total market index fund and an international total market index fund or a total global stock index fund is a matter of preference and not likely to make much difference in the long run.
by Rick Ferri
Mon Apr 09, 2018 4:30 pm
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

If I were buying a 2 fund portfolio, I'd use the Vanguard Global Equity fund (Ticker VHGEX or the EFT: VT) and an intermediate-term US bond fund (there are several to choose from). All else adds too much cost and complexity that I do not want or need. Rick, I understand your argument about just usi...
by Rick Ferri
Mon Apr 09, 2018 3:33 pm
Forum: Investing - Theory, News & General
Topic: The Two Fund Portfolio
Replies: 34
Views: 4568

Re: The Two Fund Portfolio

If I were buying a 2 fund portfolio, I'd use the Vanguard Global Equity fund (Ticker VHGEX or the EFT: VT) and an intermediate-term US bond fund (there are several to choose from). All else adds too much cost and complexity that I do not want or need.
by Rick Ferri
Mon Apr 09, 2018 10:59 am
Forum: Local Chapters and Bogleheads Community
Topic: Too much Bogleheads.org?
Replies: 79
Views: 10104

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 t...
by Rick Ferri
Mon Apr 09, 2018 9:31 am
Forum: Investing - Theory, News & General
Topic: I’m looking for a word...
Replies: 114
Views: 9240

Re: I’m looking for a word...

KSActuary wrote:
Mon Apr 09, 2018 8:50 am
Catalyst
Something new entering a market is s catalyst for change, but we don’t know what the change will be or even if there will be one. What do we call that unknown effect of something new coming into a market?
by Rick Ferri
Sun Apr 08, 2018 11:03 am
Forum: Investing - Theory, News & General
Topic: A simple question
Replies: 9
Views: 848

Re: A simple question

A lot of endowments suffer low returns because they believe they have the same Swenson wisdom and access (not to mention Yale’s preferential fees). In practice, the Yale Model has been a curse. The Curse of the Yale Model My article was published in 2012. It has been updated by others who have found...