Search found 333 matches
- Sun Jun 23, 2019 8:16 pm
- Forum: Investing - Theory, News & General
- Topic: RIP to value investing...
- Replies: 44
- Views: 7899
Re: RIP to value investing...
p/b is dead. p/e is not. P/B might very well be dead (probably will be comatose, at the very least, as long as the cost of capital is so low), but even so I think the perception is that value funds rely on it much more than they actually do. Among small cap value ETFs, for instance, only the Russell value indexes rely on price/book as their sole value metric. Most other funds use a total of three to five different metrics in combination or else focus on a single metric like dividend yield or ROA. Yes that’s true. DFA for instance sorts for value using price to book, and then applies a profitability screen. They also use momentum screens when buying and selling. DFA’s value funds still rank very high in their categories despite everyone cla...
- Sun Jun 23, 2019 4:53 pm
- Forum: Investing - Theory, News & General
- Topic: RIP to value investing...
- Replies: 44
- Views: 7899
Re: RIP to value investing...
It’s been a rough go for a while now for value. Factor enthusiasts would argue every factor goes through extended periods of underperformance. Value factor cynics would argue book value is no longer a relevant factor and the market has evolved to the point where it’s useless in application.
Who is right? I don’t know, but when people start claiming a strategy is dead then I think it may come around. Buy and hold was deemed dead at the end of 2009. Value investing was dead in 1999. We’ll see I guess.
Who is right? I don’t know, but when people start claiming a strategy is dead then I think it may come around. Buy and hold was deemed dead at the end of 2009. Value investing was dead in 1999. We’ll see I guess.
- Sun Jun 23, 2019 4:47 pm
- Forum: Investing - Theory, News & General
- Topic: Dimensional Funds versus Vanguard
- Replies: 27
- Views: 5212
Re: Dimensional Funds versus Vanguard
Most of their return are explained by the market, exposure to size and value as you noted, and exposure to the profitability premium. If those factors show future premiums then DFA will likely do well, and so will many other funds that have launched since DFA trying to mimic their strategies. If those factors do not work, DFA may underperform a bit, which has happened the last 5-10 years.
- Mon Jun 03, 2019 9:56 pm
- Forum: Personal Investments
- Topic: Does an Advisors AUM fee also include assets in your 401k that they advise on?
- Replies: 24
- Views: 3633
Re: Does an Advisors AUM fee also include assets in your 401k that they advise on?
Many firms do charge on the 401k advice also. If the advisor’s advice is the only product of value they have to offer then why would they give away some of it for free?
- Sat May 18, 2019 7:55 pm
- Forum: Investing - Theory, News & General
- Topic: Valuations of International Equities vs. US Equities
- Replies: 31
- Views: 3819
Re: Valuations of International Equities vs. US Equities
Valuations between US and Foreign are actually EXTREMELY similar at the moment if you adjust for sector composition of the indexes you are comparing. The US index is tech heavy compared to the rest of the world, and that sector trades at a higher valuation.
Here is an article: https://www.putnam.com/individual/conte ... ruly-cheap
Here is an article: https://www.putnam.com/individual/conte ... ruly-cheap
- Sun May 05, 2019 2:33 pm
- Forum: Personal Investments
- Topic: SLYV large distributions [SPDR S&P 600 Small Cap Value]
- Replies: 13
- Views: 3002
Re: SLYV large distributions [SPDR S&P 600 Small Cap Value]
I have contacted SPDR recently about SLYV large cap gain distributions in the past and they stated they have implemented a new trading strategy that has fixed the past issues.
- Sun Dec 02, 2018 5:03 pm
- Forum: Investing - Theory, News & General
- Topic: Edward Jones a Review and Analysis: Can Edward Jones be Used for a Boglehead Three Fund Portfolio?
- Replies: 36
- Views: 4478
Re: Edward Jones a Review and Analysis: Can Edward Jones be Used for a Boglehead Three Fund Portfolio?
You toss money into FT so your FA can get a commission?
You don’t mind paying an FA what they’re worth but you have opted for Edward Jones over a fee only planner?
You don’t mind paying an FA what they’re worth but you have opted for Edward Jones over a fee only planner?
- Sun Nov 11, 2018 7:37 pm
- Forum: Personal Investments
- Topic: A Special Kind of Market-Linked CD?
- Replies: 14
- Views: 1161
Re: A Special Kind of Market-Linked CD?
These are FDIC insured. They aren’t great investments, but other forum members are wrong to compare the returns of an FDIC insured CD to the S&P 500.
- Tue Sep 25, 2018 8:34 pm
- Forum: Personal Investments
- Topic: JP Morgan Structured Investments - What am I missing?
- Replies: 20
- Views: 4245
Re: JP Morgan Structured Investments - What am I missing?
Not all structured products are bad, but most Bogleheads will disagree with me on that. The product seems fine, but the biggest issue is the credit risk.
- Fri Sep 21, 2018 3:54 pm
- Forum: Investing - Theory, News & General
- Topic: Buckingham Strategic Wealth #12 on Barron's
- Replies: 13
- Views: 2899
Re: Buckingham Strategic Wealth #12 on Barron's
Buckingham is a fine firm, better than most probably, but these Barron’s lists are a joke. Ami Forte was named the top woman advisor by Barron’s three years in a row. She ended up getting fired from Morgan Stanley and lost the company a $34 million arbitration case.
- Sat Aug 25, 2018 9:38 pm
- Forum: Investing - Theory, News & General
- Topic: NYT - Caring for Aging Parents, With an Eye on the Broker Handling Their Savings
- Replies: 26
- Views: 3129
Re: NYT - Caring for Aging Parents, With an Eye on the Broker Handling Their Savings
You never, ever should give an investment broker discretionary authority over an investment account. Clearly the broker in this article was doing good old fashioned churning, performing many trades with the sole purpose of generating commissions. This man took advantage of his elderly client. If you have an Assets Under Management agreement with an investment firm, there should be an Investment Policy Statement on file. Furthermore, there should be a clear understanding of the fees that are involved with such an arrangement. Be careful out there. Disagree, many fee only advisors operate on a discretionary basis. The problem was this advisor did not have discretionary authority yet acted with discretion in a commission based account. He mar...
- Wed Jul 04, 2018 3:34 pm
- Forum: Investing - Theory, News & General
- Topic: What a high-fee financial advisor really offers as a value proposition
- Replies: 17
- Views: 2182
Re: What a high-fee financial advisor really offers as a value proposition
You should have known from the start that the person was clueless. They are trying to build a business in 2018 via cold calling. Silly.
- Tue Jul 03, 2018 8:43 pm
- Forum: Investing - Theory, News & General
- Topic: Building a personal family Bank?
- Replies: 6
- Views: 2147
Re: Building a personal family Bank?
It’s basically a gimmick to get you to buy life insurance.
I recommend this Kitces article which goes into great detail.
https://www.kitces.com/blog/bank-on-you ... e-banking/
I recommend this Kitces article which goes into great detail.
https://www.kitces.com/blog/bank-on-you ... e-banking/
- Sun Jul 01, 2018 8:56 am
- Forum: Investing - Theory, News & General
- Topic: Do Advisers Add $$$ Value?
- Replies: 74
- Views: 8453
Re: Do Advisers Add $$$ Value?
I have had casual conversations with a number of financial advisors and I am convinced that most of them know less about investing than experienced BHs. Some comments by these advisors were wrong, selfish or uninformed. One told me that Roth conversions would only help heirs. He also insisted that delaying SS was a stupid move regardless of an individuals situation. Another recommended non-traded REITs. Another wanted to sell equity indexed annuities with huge fees. A friend was advised to do the file and suspend and restricted application for a spousal benefit two years after the law was put into effect preventing this strategy. The law did not prevent the strategy for everyone, only those below a certain age when the rules were changed.
- Sun Jul 01, 2018 6:56 am
- Forum: Investing - Theory, News & General
- Topic: Do Advisers Add $$$ Value?
- Replies: 74
- Views: 8453
- Sat Jun 02, 2018 1:14 pm
- Forum: Personal Consumer Issues
- Topic: Friends with an EJ Advisor
- Replies: 49
- Views: 5704
Re: Friends with an EJ Advisor
I am a financial planner, who has friends and family members that manage their own portfolios (although a few of them shouldn’t be )
I’m happy for them if they can do it, and they’ll sometimes ask me minor questions. I actually have never solicited any business from anyone I’m close with but do provide help if they come to me.
There are plenty of clients out there for a good planner and if they need your business THAT badly maybe they just aren’t that successful?
I would be direct with him, without being offensive. If he wants to continue to question your debate your philosophy then tell him you don’t want to discuss it any further with him.
I’m happy for them if they can do it, and they’ll sometimes ask me minor questions. I actually have never solicited any business from anyone I’m close with but do provide help if they come to me.
There are plenty of clients out there for a good planner and if they need your business THAT badly maybe they just aren’t that successful?
I would be direct with him, without being offensive. If he wants to continue to question your debate your philosophy then tell him you don’t want to discuss it any further with him.
- Thu Nov 09, 2017 6:22 am
- Forum: Investing - Theory, News & General
- Topic: DFA access
- Replies: 30
- Views: 5277
Re: DFA access
Depending on what asset class you want you may not even need DFA. The small value they offer is very comparable to IJS, and IJS is half the expense ratio. It’s a little hard to replicate what they do on foreign and EM, but Powershares/Schwab Funds that track fundamental indexes are comparable. I think it’s ironic that some advisors “sell access” to DFA. These fee only advisors have become brokers for DFA. Do you have tickers for those international funds? I have been using widomtree DLS/DGS to get international small value but maybe there's better options? Thanks DLS and DGS is about as good as you can do. PDN is through Powershares. FNDE is a fundamental index for EM large cap, so not a great comparison to DGS. FNDF and PXF are solid opti...
- Wed Nov 08, 2017 8:14 pm
- Forum: Investing - Theory, News & General
- Topic: New CEO Tim Buckley: To run Vanguard, 'you have to be willing not to be a billionaire'
- Replies: 24
- Views: 9832
Re: New CEO Tim Buckley: To run Vanguard, 'you have to be willing not to be a billionaire'
wrongfunds wrote: ↑Wed Nov 08, 2017 10:44 am How much Vanguard pays to Riholtz's firm? To ask this differently, how does Riholtz (and firms like that) make money when their clients pour money in to Vanguard?
They charge an advisory fee on top of the funds they recommend which vanguard gets no part of nor do they have anything to do with it.
- Wed Nov 08, 2017 7:50 pm
- Forum: Personal Investments
- Topic: Fixed index annuities
- Replies: 9
- Views: 4396
Re: Fixed index annuities
Unlike most on the board I won’t bash all fixed index annuities. Most are garbage, but if you are considering one you should make sure it is guaranteed 100% participation rate (for the entire term), uses annual point to point for crediting, a guaranteed cap of at least 6%, no annual fees, and no longer than 7 year surrender period. These do exist, but you’ll rarely see them suggested.
I am a CFP professional, but have never recommended one of these. I do always look at what’s out there though.
I am a CFP professional, but have never recommended one of these. I do always look at what’s out there though.
- Wed Nov 08, 2017 7:43 pm
- Forum: Investing - Theory, News & General
- Topic: DFA access
- Replies: 30
- Views: 5277
Re: DFA access
Depending on what asset class you want you may not even need DFA. The small value they offer is very comparable to IJS, and IJS is half the expense ratio. It’s a little hard to replicate what they do on foreign and EM, but Powershares/Schwab Funds that track fundamental indexes are comparable.
I think it’s ironic that some advisors “sell access” to DFA. These fee only advisors have become brokers for DFA.
I think it’s ironic that some advisors “sell access” to DFA. These fee only advisors have become brokers for DFA.
- Sat Nov 04, 2017 4:27 pm
- Forum: Personal Investments
- Topic: Investing in index funds at this moment
- Replies: 50
- Views: 5470
Re: Investing in index funds at this moment
Is it a good time to invest in index funds? Right now the stock market is at it's most overvalued by the Cyclically adjusted price-to-earnings ratio (CAPE) ratio since 1929 and the peak of the dot com bubble. It feels like a correction is due at any point now. Generally, you should not take market conditions into account when investing into index funds but it seems that mantra has rewarded people who've invested in the last 10 years. I know people who invested right at the peak in 2007 and lost a lot of their investments and it took years for them to get back to the level they had before. Yeah it would have been awful to invest near the peak of the market about 10 years prior to this very day. But, VFINX has compounded at 7.72% annually si...
- Wed Nov 01, 2017 8:18 pm
- Forum: Investing - Theory, News & General
- Topic: Robert Prechter, Elliott Wave theorist, Fox Business today
- Replies: 24
- Views: 3421
Re: Robert Prechter, Elliott Wave theorist, Fox Business today
Mr Prechter, what a legend: Elliot Wave predicts triple-digit Dow in 2016 Published: June 17, 2010 "The only way for the developing configuration to satisfy a perfect set of Fibonacci time relationships is for the stock market to fall over the next six years and bottom in 2016." "This bear market is of Supercycle degree, the biggest since 1720-1784. It should therefore include a decline deeper that the 89% decline of 1929-1932. A decline of 91.5% or more would carry it below 1,000." https://www.marketwatch.com/story/elliot-wave-predicts-triple-digit-dow-2010-06-17 At least he can count I guess. In 1720 Prechter was just finishing up grad school. Elliott Wave, Dow Theory, Death Cross, Head and Shoulders formation, all ga...
- Sat Jun 24, 2017 6:54 am
- Forum: Personal Investments
- Topic: Crazy(?) Adviser Advice: "I don't believe in bonds"
- Replies: 49
- Views: 8286
Re: Crazy(?) Adviser Advice: "I don't believe in bonds"
"I've always had success picking individual stocks"
Great can you provide me your personal 20,10,5, and 3 year GIPS certified returns? Didn't think so.
100% equities is okay being 25 years out. An adviser "not believing in bonds" is a bit more alarming. What else may they not believe in? Index funds?
Great can you provide me your personal 20,10,5, and 3 year GIPS certified returns? Didn't think so.
100% equities is okay being 25 years out. An adviser "not believing in bonds" is a bit more alarming. What else may they not believe in? Index funds?
- Thu Apr 20, 2017 9:49 am
- Forum: Investing - Theory, News & General
- Topic: Larry Swedroe says "Goodbye."
- Replies: 445
- Views: 80225
Re: Larry Swedroe says "Goodby."
When I was 16 years old my dad suggested I read a book he found at the library called "Wise Investing Made Simple" by Larry Swedroe. I remember the instant impact it had on me and causing me to do a 180 in my investment philosophy. Being able to meet Larry a few times since then, the last way I would describe him is a self promoter. His passion for research is unmatched and one of the main reasons I would visit this site was to read his comments. Bogleheads will survive, but this is a big loss.
- Wed Apr 12, 2017 10:15 pm
- Forum: Investing - Theory, News & General
- Topic: Wealthfront: Why we avoid Blackrock ETFs
- Replies: 24
- Views: 6383
Re: Wealthfront: Why we avoid Blackrock ETFs
I wonder if they have a blog post on why they avoid mutual funds.
- Sat Dec 31, 2016 9:13 am
- Forum: Personal Investments
- Topic: Financial Advisor Evaluation (for Mom and Stepdad)
- Replies: 12
- Views: 1515
Re: Financial Advisor Evaluation (for Mom and Stepdad)
Is the advisor registered as an investment advisor still?
- Sat Dec 03, 2016 9:09 am
- Forum: Investing - Theory, News & General
- Topic: Swedroe's book
- Replies: 25
- Views: 4153
Re: Swedroe's book
It was still an extremely valuable book. I was just curious. Thanks for responding.
- Sat Dec 03, 2016 7:50 am
- Forum: Investing - Theory, News & General
- Topic: Swedroe's book
- Replies: 25
- Views: 4153
Swedroe's book
In Your Complete Guide to Factor-Based Investing on pages 169-170 I have the same paragraph printed 3 times in a row. Does anyone else see this?
- Thu Oct 20, 2016 7:04 am
- Forum: Personal Investments
- Topic: Letter from Broker at EJ [Edward Jones]
- Replies: 40
- Views: 8779
Re: Letter from Broker at EJ
You have what is called a "direct account", which is not a brokerage account. EJ and many of the other major brokers are wanting to get rid of and no longer offer direct accounts, as it is easier for their internal compliance team to oversee brokerage accounts than direct accounts. They may try to use it as an excuse to push you into a fee based account as well.
- Tue Oct 04, 2016 9:41 am
- Forum: Personal Investments
- Topic: DIY vs. low cost DFA advisor
- Replies: 8
- Views: 1095
Re: DIY vs. low cost DFA advisor
I doubt you could even use the advisor's recommended DFA funds in your 403b or 457 plans. DFA is a great fund family, but I wouldn't pay $1,500 a year just to access their funds. A good advisor can definitely be worth $1,500 a year, a bad one can cost you much more.
As an advisor I am biased, but if you are not truly interested in these things and doing the proper planning you may want to turn the keys over. If you have an interest, and are willing to learn, then save yourself $1,500 a year and spend $50 on some books.
As an advisor I am biased, but if you are not truly interested in these things and doing the proper planning you may want to turn the keys over. If you have an interest, and are willing to learn, then save yourself $1,500 a year and spend $50 on some books.
- Wed Jul 20, 2016 8:27 am
- Forum: Investing - Theory, News & General
- Topic: Which factors have risk-based explanations and which don't
- Replies: 8
- Views: 1138
Re: Which factors have risk-based explanations and which don't
Isn't momentum behavioral as well?
- Sat May 28, 2016 2:27 pm
- Forum: Investing - Theory, News & General
- Topic: Books on Options
- Replies: 57
- Views: 5181
Re: Books on Options
Option Volatility and Pricing by Sheldon Natenberg. This is considered the Bible of options books in the industry.
- Fri Apr 15, 2016 6:06 pm
- Forum: Personal Consumer Issues
- Topic: Stub Hub High Fees - WOW
- Replies: 29
- Views: 16611
Re: Stub Hub High Fees - WOW
I use SeatGeek for this reason.
- Wed Apr 06, 2016 2:48 pm
- Forum: Investing - Theory, News & General
- Topic: [DOL Rule on Fiduciary Standard is Released]
- Replies: 105
- Views: 10464
Re: ‘Customers First’ to Become the Law in Retirement Investing
Except variable annuities, indexed annuities, non-traded REITs, and huge commissions will still be allowed in retirement accounts, doesn't seem like this law changes much.
- Sat Apr 02, 2016 9:44 pm
- Forum: Investing - Theory, News & General
- Topic: Which individual countries hold the most promise for future investment gains?
- Replies: 86
- Views: 10392
- Sat Feb 13, 2016 4:07 pm
- Forum: Investing - Theory, News & General
- Topic: S&P500 has basically gone nowhere for 15 years
- Replies: 59
- Views: 9431
Re: S&P500 has basically gone nowhere for 15 years
Wow the comments on that guy's post are alarming, very uneducated people.
- Tue Feb 09, 2016 9:10 am
- Forum: Investing - Theory, News & General
- Topic: "Politics and Investing Don't Mix"
- Replies: 23
- Views: 3194
Re: "Politics and Investing Don't Mix"
From my experience, clients and prospects always bring up politics. I never do and try to steer clear of the conversation. The reason brokers have these sales pitches is because the customers are begging for it. The uneducated investor doesn't like hearing "Whoever is in office does not have a major effect on your portfolio". Maybe it's the area I work in, but the conspiracy theory nut jobs run pretty abundant. That's not surprising. But in the long run politics can have an effect on your portfolio, to the extent the political consensus changes on basic economic issues. The reason you often can't see much effect on stock market performance based on party in power, is that major parties in advanced democracies often agree more tha...
- Mon Feb 08, 2016 9:44 pm
- Forum: Investing - Theory, News & General
- Topic: "Politics and Investing Don't Mix"
- Replies: 23
- Views: 3194
Re: "Politics and Investing Don't Mix"
From my experience, clients and prospects always bring up politics. I never do and try to steer clear of the conversation. The reason brokers have these sales pitches is because the customers are begging for it.
The uneducated investor doesn't like hearing "Whoever is in office does not have a major effect on your portfolio". Maybe it's the area I work in, but the conspiracy theory nut jobs run pretty abundant.
The uneducated investor doesn't like hearing "Whoever is in office does not have a major effect on your portfolio". Maybe it's the area I work in, but the conspiracy theory nut jobs run pretty abundant.
- Fri Jan 29, 2016 10:39 am
- Forum: Personal Investments
- Topic: Need Advisor/Planner for 1.5M Portfolio
- Replies: 29
- Views: 4888
Re: Need Advisor for 1.5M Portfolio
I don't think 0.40% is too high for an advisor, depends on what you're getting I suppose. Let's call that $6,000 a year, many flat fee advisors are in that range. Maybe you should find a flat fee advisor that charges $3,000 - $6,000 annually rather than based on a percentage of assets. Some that I am aware of are: Evanson Asset Management, Bason Asset Management, and Cardiff Park Advisors.
- Mon Jan 25, 2016 10:12 pm
- Forum: Personal Finance (Not Investing)
- Topic: John Hancock Annuity Question
- Replies: 11
- Views: 2029
Re: John Hancock Annuity Question
If this is a variable annuity like you said then I believe you can use someone who just has a NY securities license, but I am not positive on that rule. I also agree with you that the agent of record they assigned to your account from NY should be licensed in OK as well since that is your state of residence. I am nearly certain they would have to be, they may have a grace period for that agent to obtain licensing in your state though.
All variable annuities have a mortality and expense fee, so I wonder if you met the 4% or if that is the gross return before the M&E fee. Typically the contract ceases upon death of the original owner, so this is a little confusing to me.
All variable annuities have a mortality and expense fee, so I wonder if you met the 4% or if that is the gross return before the M&E fee. Typically the contract ceases upon death of the original owner, so this is a little confusing to me.
- Mon Jan 25, 2016 9:21 pm
- Forum: Personal Finance (Not Investing)
- Topic: John Hancock Annuity Question
- Replies: 11
- Views: 2029
Re: John Hancock Annuity Question
The insurance laws in New York are much different than nearly any other state and often times insurance companies such as John Hancock must design specific products just to meet the state of New York's standards.
It sounds like you have a fixed annuity, see if there is a prospectus available just to make sure it is not a variable annuity. If it was issued years back it could well be earning 4% net returns.
You need an advisor that has life license in the state of New York which may be harder to find in OK than an advisor with a New York securities license. I think JH is telling you the correct information on this. A fixed annuity is a life product, not a security.
It sounds like you have a fixed annuity, see if there is a prospectus available just to make sure it is not a variable annuity. If it was issued years back it could well be earning 4% net returns.
You need an advisor that has life license in the state of New York which may be harder to find in OK than an advisor with a New York securities license. I think JH is telling you the correct information on this. A fixed annuity is a life product, not a security.
- Thu Jan 07, 2016 7:56 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16217
Re: Small value underperformance, DFA
R What underperformance? 10.16 compared to 5.63% is frickin huge outperformance:) 5 and 10 year returns will always just tell you what was hot over the previous. Odds are you will get better results by buying the funds with the worse 10 year returns than the best ones. Small and value go back at least 30 years. The options to invest in it have always been there if a bit border line (I remember paying 1.5% for the funds in the late 90s) and tended more towards active management than indexing. That is all that has changed over the past 15 years. There will always be always be performance chasers. They rarely do well as investors About the only thing value got you in the last couple of decades is avoiding the tech bubble. The last couple of de...
- Tue Dec 29, 2015 9:46 pm
- Forum: Investing - Theory, News & General
- Topic: Jack Bogle on Bloomberg TV (12-29-15)
- Replies: 20
- Views: 2700
Re: Jack Bogle on Bloomberg TV (12-29-15)
"The index had a measly 2% return..."
She's right, maybe we all should invest in Third Avenue funds.
She's right, maybe we all should invest in Third Avenue funds.
- Sat Nov 21, 2015 9:46 pm
- Forum: Personal Consumer Issues
- Topic: Series 7 Exam and Bogleheads
- Replies: 26
- Views: 4317
Re: Series 7 Exam and Bogleheads
I took the 7 and 66, both are easy and can be passed with a week long study (but I was a financial planning major in college). Like someone else said, the CFA would teach you more but you'd waste a lot of time on that if you're not planning on being in the industry.
I would just recommend books by William Bernstein, Larry Swedroe, David Swensen, and others.
I would just recommend books by William Bernstein, Larry Swedroe, David Swensen, and others.
- Wed Nov 18, 2015 8:28 pm
- Forum: Investing - Theory, News & General
- Topic: Cheap Factor Exposure
- Replies: 9
- Views: 1751
Re: Cheap Factor Exposure
One solution is to use a portfolio of 60% Ishares S&P SmallCap 600 value (IJS), 30% Powershares RAFI 1000 (PRF), and 10% Vanguard Total Stock (VTSAX): Beta: 0.98 Size: 0.52 Value: 0.28 Momentum: 0.07 Annual Alpha: 0.25% Expense Ratio: 0.27% (no advisor fee necessary but there is the cost of the spread in buying ETF shares). IJS is great but Vanguard has a good solution of its own with the Small Cap Value Index Fund. You don't need IJS; Vanguard has VIOV which tracks the same index for lower expenses. (To see this on Vanguard's ETF page, you have to check the box, "Other Indexes"; the S&P and Russell indexes aren't on the main ETF list. I am aware, but apparently many people arent since IJS has $3 billion more in assets. I...
- Wed Nov 18, 2015 6:22 pm
- Forum: Investing - Theory, News & General
- Topic: Cheap Factor Exposure
- Replies: 9
- Views: 1751
Re: Cheap Factor Exposure
I understand now, thanks.
AQR's multi style funds seem to incorporate multi factor screens like DFA, but cost a little more.
AQR's multi style funds seem to incorporate multi factor screens like DFA, but cost a little more.
- Wed Nov 18, 2015 4:18 pm
- Forum: Investing - Theory, News & General
- Topic: Cheap Factor Exposure
- Replies: 9
- Views: 1751
Re: Cheap Factor Exposure
I backtested using CRSP data and that was not the case. Owning more of the less efficient fund had a smaller max drawdown than the other scenario. The standard deviation was slightly higher though.Random Walker wrote:Owning more of a less valuey value fund to get a given factor tilt does expose the portfolio to greater market risk than if one has a more valuey value fund. The less valuey fund may be cheaper, but the portfolio perhaps a bit less efficient: tradeoffs.
Dave
Can you explain in more detail? It seems if the factor exposures are approximately the same and the portfolios are well diversified, the risks should be similar.
- Wed Nov 18, 2015 3:33 pm
- Forum: Investing - Theory, News & General
- Topic: Cheap Factor Exposure
- Replies: 9
- Views: 1751
Cheap Factor Exposure
I'm sure variations of this have been posted before but with the help of Portfolio Visualizer and Excel I wanted to post a couple findings. Let's say you wanted to match factor exposures that a portfolio of 60% Vanguard Total Stock Market Index Adm (VTSAX) and 40% DFA U.S. Small Cap Value gave you. 60/40 (VTSAX/DFSVX): Beta: 1.03 Size: 0.52 Value: 0.29 Momentum: 0.09 Annual Alpha: -0.06% Expense Ratio: 0.33% (plus needed advisor expenses to invest in DFA) One solution is to use a portfolio of 60% Ishares S&P SmallCap 600 value (IJS), 30% Powershares RAFI 1000 (PRF), and 10% Vanguard Total Stock (VTSAX): Beta: 0.98 Size: 0.52 Value: 0.28 Momentum: 0.07 Annual Alpha: 0.25% Expense Ratio: 0.27% (no advisor fee necessary but there is the co...
- Wed Oct 07, 2015 8:54 pm
- Forum: Investing - Theory, News & General
- Topic: How do Fee Based Advisors and Fund Managers invest THEIR money?
- Replies: 29
- Views: 4645
Re: How do Fee Based Advisors and Fund Managers invest THEIR money?
I invest in the exact same funds I recommend, in different proportions.
- Thu Sep 03, 2015 9:34 pm
- Forum: Personal Finance (Not Investing)
- Topic: Loan Officer vs. Financial Advisor
- Replies: 21
- Views: 5584
Re: Loan Officer vs. Financial Advisor
Convince your bank to start an investment department if they don't have one. They should hire an experienced advisor that you can work with and learn from. Most local banks already do this as a good revenue source, it's a cheap start up and usually market well at the community bank level.