Search found 1365 matches

by berntson
Mon Sep 22, 2014 11:53 am
Forum: Personal Consumer Issues
Topic: Anyone know anything about diamond rings?
Replies: 49
Views: 4676

Re: Anyone know anything about diamond rings?

Your wife sounds much more level headed than my gf. I cant see her not being happy with whatever I get her, but at the same time we are in our upper 20s and most of her friends are getting engaged/engaged/ newly weds, so im sure they do comparisons. If I do purchase a $5k ish ring, I'm thinking of ...
by berntson
Mon Sep 22, 2014 11:36 am
Forum: Personal Consumer Issues
Topic: Anyone know anything about diamond rings?
Replies: 49
Views: 4676

Re: Anyone know anything about diamond rings?

My advice: Don't overthink this and don't spend huge amounts of money. This is one of the purchases that feels incredibly important when you're making it, but feels less important over time. If your gf is anything like my wife, she will be so happy to be getting married to you that the exact cut/col...
by berntson
Sun Sep 21, 2014 8:53 pm
Forum: Investing - Help with Personal Investments
Topic: 23 Year Old - 70/30 Asset Allocation?
Replies: 12
Views: 4943

Re: 23 Year Old - 70/30 Asset Allocation?

When you have a high savings rate and stable finances, any allocation will be fine. You could have 100% stocks and be fine. You could have 50% stocks and 50% bonds and be fine. You only really start shooting yourself in the foot if your allocation means that either (1) you clearly won't have enough ...
by berntson
Sun Sep 21, 2014 8:49 pm
Forum: Investing - Help with Personal Investments
Topic: Investments for beginners.
Replies: 6
Views: 913

Re: Investments for beginners.

Hi Alejandro, Welcome to the boards! I'm going to second what has already been said. Boglehead investing is really easy. So portfolios for "beginners" are really just the same as portfolio for more "advanced" investors. If you have secure work and an emergency fund, you don't rea...
by berntson
Sun Sep 21, 2014 1:42 pm
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 37
Views: 6401

Re: Two Fund real Lazy Portfolio?

I've also wondered that about Bernstein's article. FWIW, here's a chart of returns for stocks in the Russell 3000 over a somewhat longer period. http://static.seekingalpha.com/uploads/2008/12/3/saupload_chartwwww_1.jpg I wish I could find other articles looking at the skewness problem. I've poked ar...
by berntson
Sun Sep 21, 2014 1:33 pm
Forum: Investing - Help with Personal Investments
Topic: Money Market Funds can Refuse Withdrawals (Or not!)
Replies: 10
Views: 1114

Money Market Funds can Refuse Withdrawals (Or not!)

I only recently learned that new rules governing money market funds allow fund companies to refuse withdrawals during a financial crisis. The idea is that this will help stop money runs like the one from the last crisis. Investors will, of course, be able to get their money out eventually. But if yo...
by berntson
Sun Sep 21, 2014 11:30 am
Forum: Investing - Theory, News & General
Topic: A look at the large value premium
Replies: 16
Views: 2683

Re: A look at the large value premium

berntson said: This is how the PowerShares FTSE RAFI All-World 3000 ETF works. A global value portfolio weighted using price to earnings, price to cashflow, price to sales, and dividend yield. Unfortunately, the AMU is still really low. What is the symbol for that ETF? Thanks. PSRW . Though it look...
by berntson
Sun Sep 21, 2014 11:01 am
Forum: Investing - Theory, News & General
Topic: The Case Against Mid Caps? (Say it ain't so!)
Replies: 23
Views: 3900

Re: The Case Against Mid Caps? (Say it ain't so!)

The Vanguard Small Cap Value funds now has so much if midcaps, in fact, that I now consider it my midcap value fund I know you were joking in part, but your comment does point to a problem with these discussions--there is not an objective definition of a "midcap" stock or as "smallca...
by berntson
Sat Sep 20, 2014 9:45 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Mid Caps? (Say it ain't so!)
Replies: 23
Views: 3900

Re: The Case Against Mid Caps? (Say it ain't so!)

nedsaid wrote: In addition, "small-cap" funds often contain a lot of mid-cap stocks. This includes the Vanguard Small-Cap Value Index.


The Vanguard Small Cap Value funds now has so much if midcaps, in fact, that I now consider it my midcap value fund. :D
by berntson
Sat Sep 20, 2014 9:40 pm
Forum: Investing - Theory, News & General
Topic: Another take on "rising equity glidepath" in retirement
Replies: 19
Views: 3065

Re: Another take on "rising equity glidepath" in retirement

All of these studies seem to assume that investors should set their glide path and stick with it. But as I see it, the sensible thing to do is to sell stocks if there is a bull market and bonds if there is a bear market. The shape of the glide path should reflect market conditions.
by berntson
Sat Sep 20, 2014 3:56 pm
Forum: Personal Consumer Issues
Topic: How to achieve a balance between "saving" and "living"?!
Replies: 64
Views: 8074

Re: How to achieve a balance between "saving" and "living"?!

Here's one way to look at the decision. $23,000 invested now for 35 years with a 4% rate of return (I'm adjusting for inflation) gives you $90,000, about one year's worth of your current income. Are you willing to spend an entire extra year working to buy the bike? I would rather have an extra year ...
by berntson
Sat Sep 20, 2014 10:39 am
Forum: Investing - Theory, News & General
Topic: Due diligence on RAFI Pure Small Value
Replies: 189
Views: 24124

Re: Due diligence on RAFI Pure Small Value

^ Maybe this means that PowerShares can finally get the PSXV AUM over the magical 100 million threshold. :)
by berntson
Sat Sep 20, 2014 10:23 am
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 37
Views: 6401

Re: Two Fund real Lazy Portfolio?

^ Right. It's good to see that even 30 stocks have relatively low standard deviation. I was also thinking about the skewness issue. I'm not sure if 30 stocks would be enough for that. But an investor probably doesn't need hundreds either. 50 is a nice round number. So the standards for building a re...
by berntson
Sat Sep 20, 2014 9:58 am
Forum: Investing - Theory, News & General
Topic: Due diligence on RAFI Pure Small Value
Replies: 189
Views: 24124

Re: Due diligence on RAFI Pure Small Value

JohnnyFive wrote:Looks like PXSV is now offered commission free on Schwab as of VERY recently. Great news.


This is good news. Unfortunately, the other PowerShares funds I use aren't offered by Schwab (PXF and PXH). This is probably because they have their own funds that directly compete with PXF and PXH.
by berntson
Fri Sep 19, 2014 11:21 pm
Forum: Investing - Help with Personal Investments
Topic: Higher Dividend Three Fund Portfolio Idea
Replies: 15
Views: 2385

Re: Higher Dividend Three Fund Portfolio Idea

(1) What about international stocks? Vanguard's plain-vanilla total international fund has a trailing twelve month dividend yield that is 50 basis points higher than their "high yield" dividend fund. (2) Value investing works over the long run and in general. One way to do that is to buy h...
by berntson
Fri Sep 19, 2014 11:13 pm
Forum: Investing - Theory, News & General
Topic: Why is there no mutual fund that truly behaves like rental?
Replies: 36
Views: 4003

Re: Why is there no mutual fund that truly behaves like rent

The TIAA-CREF real estate fund sounds a lot like what you describe. But a garden variety REIT funds should also do the trick. Owning a REIT funds "feels" more risky than owning a house and renting it out. But that's just because a REIT funds is being "appraised" on a daily basis ...
by berntson
Fri Sep 19, 2014 11:01 pm
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 37
Views: 6401

Re: Two Fund real Lazy Portfolio?

^ The benefits of diversification have been somewhat oversold IMO. Going from owning 30 companies across a range of industries to 100 companies makes a huge difference. Going from 100 companies to 500 companies a bit less but is still probably important. Once you own a diversified collection of 500 ...
by berntson
Fri Sep 19, 2014 6:25 pm
Forum: Investing - Theory, News & General
Topic: A look at the large value premium
Replies: 16
Views: 2683

Re: A look at the large value premium

Perhaps we will see the advent of some Global LV funds using multiple metrics and global sorts. Given the significant valuation differences between U.S., DM and EM right now, the timing couldn't be better. This is how the PowerShares FTSE RAFI All-World 3000 ETF works. A global value portfolio weig...
by berntson
Fri Sep 19, 2014 6:17 pm
Forum: Investing - Theory, News & General
Topic: Vanguard SV/SG funds vs. CRSP indexes
Replies: 7
Views: 1168

Re: Vanguard SV/SG funds vs. CRSP indexes

Thanks Kevin, this is really interesting. One of the striking things in your first chart is that the Vanguard small growth fund has no growth tilt. This fits well with my own results, which indicate that VISGX has is in fact had a statistically significant value tilt between 1998-2014. It's also goo...
by berntson
Fri Sep 19, 2014 6:09 pm
Forum: Personal Finance (Not Investing)
Topic: Buy PCRIX today?
Replies: 31
Views: 3798

Re: Buy PCRIX today?

I say stick with your plan. It's more important for an investor stay the course with a good plan than it is to find the best plan.
by berntson
Fri Sep 19, 2014 6:02 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalancing questions / Should I change the complexity?
Replies: 6
Views: 515

Re: Rebalancing questions / Should I change the complexity?

(1) You can build a fine portfolio without international stocks. But don't make the decision based on saving a 7 basis points in fees on only part of your portfolio. If international stocks really do provide a the significant diversification benefit that many people claim, it's worth more than 7 bas...
by berntson
Fri Sep 19, 2014 5:42 pm
Forum: Investing - Help with Personal Investments
Topic: Two Fund real Lazy Portfolio?
Replies: 37
Views: 6401

Re: Two Fund real Lazy Portfolio?

I don't see why investors need domestic stocks myself. You can build a great portfolio using only total international (VXUS) and total bond (BND). If you're happying owning an all-stock portfolio, then VXUS is all you need. :beer
by berntson
Thu Sep 18, 2014 10:30 pm
Forum: Investing - Help with Personal Investments
Topic: A safe full of cash
Replies: 22
Views: 3738

Re: A safe full of cash

A safe full of gold coins would be way more fun.

[Distracting animated GIF removed by admin LadyGeek. I left the link instead.]

http://media.giphy.com/media/n59dQcO9yaaaY/giphy.gif
by berntson
Thu Sep 18, 2014 6:36 pm
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 8591

Re: Holding Cash because Tried to time Market

anakinskywalker wrote: But I refuse to participate in mass hysteria. If more people acted responsibly like me there would be fewer irrational bubbles and crashes, and the outcome would have been better for society as a whole.


I'm curious. When did you start sitting out the current mass hysteria?
by berntson
Thu Sep 18, 2014 6:05 pm
Forum: Investing - Theory, News & General
Topic: Bridgeway Omni SCV (BOTSX) vs PXSV
Replies: 33
Views: 3746

Re: Bridgeway Omni SCV (BOTSX) vs PXSV

sidenote #2 regarding HML that I got reminded of skimming through a paper in another thread: it's not industry adjusted. The downside of industry adjustments is that they ignore the possibility that entire industries are overvalued. Yes, I can see that Facebook has a reasonable price compared to ot...
by berntson
Thu Sep 18, 2014 3:15 pm
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 61
Views: 6314

Re: Immediate payable annuity is a bad investment?

Professor Emeritus wrote:Annuities are very Bogle. They get you the low risk market rate of return on an actuarial risk of longevity.


They are Bogleheadish if the fees are low enough. The fees from most companies are obscene. But I suppose that's not so different from mutual funds.
by berntson
Thu Sep 18, 2014 12:31 pm
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 8591

Re: Holding Cash because Tried to time Market

You're probably the indicator that the market is going to correct soon. Feb 2009 was very close to the bottom. Right now we're probably equally close to the top. Just be patient. Keep in mind that the most cautious people are the ones who lose big on ponzi schemes; they have the good sense to wait ...
by berntson
Thu Sep 18, 2014 11:37 am
Forum: Investing - Theory, News & General
Topic: beginner - help with questions about a specific product
Replies: 1
Views: 600

Re: beginner - help with questions about a specific product

Weclome to the forum mro02rz2qz! Full replication of an index means that a fund buys every single company in the index. Optimization means that the fund only buys some of them and hopes that it can still track the index. I generally don't like my funds to be "optimized". I don't know much ...
by berntson
Thu Sep 18, 2014 11:28 am
Forum: Investing - Help with Personal Investments
Topic: Revising AA, significant difference
Replies: 11
Views: 1262

Re: Revising AA, significant difference

- is age in bonds really a good rule of thumb? We also are targeting an earlier retirement date if the pension is around as planned, but would not need the 401k money to do so. Moving to 30% just seems so drastic! - how important are the subcategories? I am just getting my head around stocks vs. bo...
by berntson
Thu Sep 18, 2014 11:11 am
Forum: Investing - Help with Personal Investments
Topic: Random Contributions
Replies: 16
Views: 1430

Re: Random Contributions

I make regular 403b contributions because that's the only way to make them. Otherwise, I invest money whenever I see that there's too much in my bank account.
by berntson
Thu Sep 18, 2014 11:05 am
Forum: Investing - Theory, News & General
Topic: 3-Fund Low Beta/High Tilt Portfolio
Replies: 3
Views: 606

Re: 3-Fund Low Beta/High Tilt Portfolio

I would focus on the cost of the portfolio as a whole, not the cost of each factor. It's generally cheaper to buy beta and factor exposure at the same time than to segregate the two. You'll get more back for you buck buying PXSV and MTUM and ignoring total market funds than you will buying total mar...
by berntson
Thu Sep 18, 2014 10:10 am
Forum: Investing - Theory, News & General
Topic: An Efficient Frontier for Retirement Income
Replies: 4
Views: 948

Re: An Efficient Frontier for Retirement Income

Annuities are able to pay out more than bonds because of the mortality credit. Basically, you agree to give the insurance company your whole investment with nothing in return if you happen to die shortly after purchasing said annuity. This lets the insurance company offer higher rates and pay for a ...
by berntson
Thu Sep 18, 2014 10:03 am
Forum: Investing - Help with Personal Investments
Topic: Why Invest in Bonds in your early 30s?
Replies: 43
Views: 5574

Re: Why Invest in Bonds in your early 30s?

So, with the exception of the required G fund investments for a short time in my early investment years, we've never owned bonds. So I'm not crazy! My wife and I are in our early 30s. We have our emergency fund in bonds, but have never owned bonds in our "portfolio". Our general plan has ...
by berntson
Thu Sep 18, 2014 9:50 am
Forum: Investing - Help with Personal Investments
Topic: Transferring trad. IRA to Vanguard index funds
Replies: 7
Views: 703

Re: Transferring trad. IRA to Vanguard index funds

My financial adviser at the credit union says that transferring my IRA while the market is overdue for a correction would mean buying in while prices are high. But if I wait for the correction that she says analysts expect next year, doesn't that just mean I have less money with which to purchase i...
by berntson
Thu Sep 18, 2014 9:43 am
Forum: Investing - Help with Personal Investments
Topic: How to best adjust asset allocation as years pass
Replies: 21
Views: 2773

Re: How to best adjust asset allocation as years pass

Age - x in bonds has investors making too many portfolio changes too early IMO. I've never understood why a 25 or 35 or even 45 year old investor needs to be selling stocks to buy bonds. Is this to reduce risk before retirement? That's still 20-40 years away! Just find an allocation you like and st...
by berntson
Thu Sep 18, 2014 9:19 am
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 8591

Re: Holding Cash because Tried to time Market

By the way, great work LateArrival. You've really grabbed this bull by the horns. One thought. If you're worrying about investing in stocks at all-time highs, what about buying international stock? International stocks are not at all time highs. Neither developed ex-US or emerging markets have fully...
by berntson
Thu Sep 18, 2014 9:06 am
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 16
Views: 2639

Re: Bond Index Conundrum

And keep in mind that even setting aside credit ratings, the market will demand higher interest from companies if it thinks they're starting to issue a bit too much debt. So even if they have a bit more risk, you're being paid to take it. Corporate bonds are also not that large a part of TBM, so I w...
by berntson
Wed Sep 17, 2014 7:56 pm
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 8591

Re: Holding Cash because Tried to time Market

^ Ah! Good point. B is 100% bonds. S is 100% stocks. Each dot closer to the middle of the chart from B is a 10% increase in stock allocation. Each dot closer to the middle from S is a 10% decrease. Dots farther to the left of the chart were safer. Dots closer to the top had higher returns. Six of th...
by berntson
Wed Sep 17, 2014 7:42 pm
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 78
Views: 8591

Re: Holding Cash because Tried to time Market

Hi LateArrival! Here's one way to look at your situation. I'm sure you've seen this before, but consider a pretty standard efficiency frontier chart. http://dougcronk.files.wordpress.com/2010/09/efficient-frontiers-1950-20093.jpg Everyone should have at least 30% in stocks (outside of "I have s...
by berntson
Wed Sep 17, 2014 12:32 pm
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 40
Views: 5578

Re: Proposed: 35% Maximum Bond Allocation, For Life

^Nice work Paul! I agree. Withdrawal rate matters way more for retirement success than stock/bond allocation. Here's a visual way of getting at the same point. http://i62.tinypic.com/2a6l0fm.png The chart is from here . As you can see, a 3% withdrawal rate with 100/0 is in fact safer than 4% with 40...
by berntson
Wed Sep 17, 2014 11:28 am
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 212
Views: 21958

Re: What evidence would prove the Boglehead mentality wrong?

The central core of the BH mentality is accepting that one isn't far enough above average in evaluating managers (in 1) or determining investment strategies (in 2, timing, stock picking, other) to beat index buy-hold, when investing in that index. +1 My Bogleheadish views are based on the claim tha...
by berntson
Wed Sep 17, 2014 11:22 am
Forum: Investing - Theory, News & General
Topic: Betterment Explanation on Investment Returns
Replies: 14
Views: 2476

Re: Betterment Explanation on Investment Returns

^ Yes. The point of time-weighted returns is really removing your contributions and withdrawals as a factor in your returns.
by berntson
Wed Sep 17, 2014 11:15 am
Forum: Investing - Help with Personal Investments
Topic: How to best adjust asset allocation as years pass
Replies: 21
Views: 2773

Re: How to best adjust asset allocation as years pass

Age - x in bonds has investors making too many portfolio changes too early IMO. I've never understood why a 25 or 35 or even 45 year old investor needs to be selling stocks to buy bonds. Is this to reduce risk before retirement? That's still 20-40 years away! Just find an allocation you like and sti...
by berntson
Wed Sep 17, 2014 11:07 am
Forum: Investing - Theory, News & General
Topic: Financial Psychology - Mind Over Money
Replies: 78
Views: 5605

Re: Financial Psychology - Mind Over Money

The beauty of buy-and-hold investing is that it avoids behavioral mistakes by avoiding behavior instead of avoiding mistakes. The less you look at your investments and the fewer choices you have to make, the fewer opportunities there are for getting things wrong. So pick a simple plan and stay the c...
by berntson
Tue Sep 16, 2014 4:55 pm
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 2991

Re: Randomly-weighted stock portfolios beat the index

You could use the average stock return as the benchmark. The idea being that the equal weight portfolio is the portfolio an investor should own if she really knew nothing (including knowing nothing about market cap). You should make sure that you are doing at least as well as the maximally clueless...
by berntson
Tue Sep 16, 2014 4:41 pm
Forum: Investing - Help with Personal Investments
Topic: Why Invest in Bonds in your early 30s?
Replies: 43
Views: 5574

Re: Why Invest in Bonds in your early 30s?

grayfox wrote:In the best case, it became $270,000. :shock:


:shock: indeed!
by berntson
Tue Sep 16, 2014 4:39 pm
Forum: Investing - Help with Personal Investments
Topic: How to add to my portfolio monthly without crazy fees
Replies: 39
Views: 4206

Re: How to add to my portfolio monthly without crazy fees

livesoft wrote:I am probably one of the biggest fans of ETFs on the forum and also a big fan of TDAmeritrade where I have more assets than I have at Vanguard...


By the way livesoft, what do you like about TDAmeritrade in comparisons to Vanguard? Since I use only ETFs anyway, I've been thinking about a switch.
by berntson
Tue Sep 16, 2014 4:28 pm
Forum: Investing - Theory, News & General
Topic: Bridgeway Omni SCV (BOTSX) vs PXSV
Replies: 33
Views: 3746

Re: Bridgeway Omni SCV (BOTSX) vs PXSV

I guess I can understand the convenience of sticking with HML alone, but if people think that these multiple measures are meaningful with regards to value, i.e. that HML is not the only thing that matters or the only way to identify value, it would be nice if there was a sound way of simultaneously...
by berntson
Tue Sep 16, 2014 2:21 pm
Forum: Investing - Theory, News & General
Topic: Bridgeway Omni SCV (BOTSX) vs PXSV
Replies: 33
Views: 3746

Re: Bridgeway Omni SCV (BOTSX) vs PXSV

^ No worries Angst! I find that it's easy to lose track of threads myself. HML is the most popular definition of value in the literature. But my impression is that this choice is mostly arbitrary. We could just as well definite the value factor using cashflow or earnings or dividends instead of book...