Search found 8701 matches

by grok87
Sat Jul 13, 2019 6:46 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Latest from Swedroe: https://www.advisorperspectives.com/articles/2019/07/11/are-tips-cheap The bottom line is that TIPS look cheap relative to both Treasuries and CDs. thanks in the linked article Larry cites the philly fed survey as being at 2.20% for 10 year CPI the 5 year CPI figure is 2.10% wh...
by grok87
Wed Jul 10, 2019 8:24 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

why not just use the treasury money market instead? I do although the treasury money market cannot be used for the default settlement fund. Only the federal money market fund is available. There are a couple of other reasons the state tax exemption of VMFXX could be of interest. <snip> I guess the ...
by grok87
Sun Jul 07, 2019 7:18 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

Earlier data is similar to 2015, most years were in the 30s and 40s. I have most but not every year back to 2005, I happen to have downloaded them earlier this year for a different reason. The urls varied on the older ones. Lowest I see is 21.37% in 2007. Current holdings are categorized as about 8...
by grok87
Sun Jul 07, 2019 9:18 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

What I don't know is how reliable the federal money market fund is in maintaining its allocation to federal debt. Last year it was in the 75% range but several years ago, it was below 50% (which essentially was the same as 0% for CA state purposes). Good point. It seems that the percent of income f...
by grok87
Fri Jul 05, 2019 1:59 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

FIREchief wrote: I really appreciate Grok's posts on this. I totally agree. I always enjoy Grok's posts on TIPS as well as other topics. I believe Grok's goal is to establish a sure fire, no risk, inflation adjusted income stream over 30 years or more. That is in a sense the pinnacle of success in ...
by grok87
Thu Jul 04, 2019 6:30 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

updating as: 5 year TIP: 0.22% 10 year TIP: 0.29% 30 year TIP: 0.75% 5 year nominal treasury: 1.73%======> 5 year BEI = 1.51% 10 year nominal treasury: 1.95% =====> 10 year BEI = 1.66% 30 year nominal treasury: 2.47% =====> 30 year BEI = 1.72% ===> 5x5 BEI = 1.81% ( this is the BEI for the 2024-2029...
by grok87
Wed Jul 03, 2019 6:18 am
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 26
Views: 3966

Re: REITS no longer cheap

Should long term multi decade investors care? I don’t use them because they’re included in the total market fund and I own a house. I have heard the House item many times but I never agreed with that strategy. One can not rebalance a house or mortgage. The more important issue is that the house con...
by grok87
Mon Jul 01, 2019 8:06 am
Forum: Investing - Theory, News & General
Topic: Bloomberg commodities index still in contango
Replies: 97
Views: 10021

Re: Bloomberg commodities index still in contango

Commodities still in contango at -3.9%. See Page 21. Not time to invest in commodities yet, vanguards rollout of the new fund notwithstanding.

:)

See page 21
https://data.bloomberglp.com/promo/site ... utlook.pdf
Cheers
Grok
by grok87
Sun Jun 30, 2019 3:32 pm
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 26
Views: 3966

Re: REITS no longer cheap

The cheapness of REITs is more dependent upon interest rates vs. discount to NAV. If you think interest rates will go the way of Japan and the EU, then real estate is cheap. The cap rates are justifiably below the US given lower interest rates. The Lazard piece of research has an average FFO yield ...
by grok87
Sun Jun 30, 2019 7:58 am
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 26
Views: 3966

Re: REITS no longer cheap

According to Greenstreet https://www.greenstreetadvisors.com/insights/avgpremnav REITS are now trading at 4% above the NAV of their real estate or at 104%. The long term average is 102%. I'm not changing my asset allocation but it is something i watch. Mostly i would interpret this as a bullish sig...
by grok87
Sat Jun 29, 2019 2:28 pm
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 26
Views: 3966

Re: REITS no longer cheap

THis article in "Pensions & Investments" talks about institutional investors moving into REITs https://www.pionline.com/print/reits-dig-back-good-graces-investors "Institutional investors are rediscovering real estate investment trusts as returns and supply-demand dynamics heighten their allure for ...
by grok87
Sat Jun 29, 2019 2:04 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces Plans to Launch Commodities Fund
Replies: 187
Views: 18233

Re: Vanguard Announces Plans to Launch Commodities Fund

boglerdude wrote:
Fri Jun 28, 2019 12:12 am
> why are Commodities getting so much attention in the past year?

Dalio's been in the news, his All-Weather and Vanguard's Managed Payout Fund hold 7.5%. Also, commodities are the most beaten up asset now
yet they are still not in backwardation. so i don't think they are cheap yet.
by grok87
Wed Jun 26, 2019 7:02 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

XdUzHa3NtSeIkBkIGPVn wrote:
Tue Jun 25, 2019 11:26 am


And if you look at the macro view, deflation is relatively easy to stop by a central bank (print more money).
thanks. good post.
Japan though...
by grok87
Tue Jun 25, 2019 6:22 am
Forum: Investing - Theory, News & General
Topic: Vanguard Research Paper on Inflation
Replies: 12
Views: 2063

Re: Vanguard Research Paper on Inflation

TIL vanguard does not understand asset liability matching.
by grok87
Fri Jun 21, 2019 7:06 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

The best 5 year new issue non-callable CD on fidelity seems to be about 2.3%. That is 60 bps better than the 5 year treasury at 1.72% so it may be worth a look. Fidelity's premium money market class (FZDXX) currently has a 7 day yield of 2.25%, which might be worth giving up 5 bps for full liquidit...
by grok87
Wed Jun 19, 2019 8:13 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Well it's been an interesting week in the bond market. Tips yields have dropped, along with nominal treasuries. Currently yields: 5 year TIP: 0.33% 10 year TIP: 0.38% 30 year TIP: 0.73% S a) The 5 year BEI repesents near term inflation. i think the best guide here is what recent CPI reports have be...
by grok87
Mon Jun 17, 2019 4:39 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

I think that it's always time to buy 30-year TIPS for grok87, I actually do have a hurdle rate. I usually don’t buy 30 year tips below 0.5% real yield. When the real yields get close to zero or negative I sell them Interesting; thanks for clarifying. Can you elaborate on your policy for selling at ...
by grok87
Mon Jun 17, 2019 7:46 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Time to buy 30 year TIPS Or T-bills? Why would one want to buy 30's at 2% real yield? You can change your mind in a few years if the yield curve starts to make more sense. Maybe TIPS are cheap for a good reason. :D For the obvious reason of locking in a real yield for a long time. There is no guara...
by grok87
Mon Jun 17, 2019 7:46 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Kevin M wrote:
Sun Jun 16, 2019 3:55 pm

I think that it's always time to buy 30-year TIPS for grok87,
I actually do have a hurdle rate. I usually don’t buy 30 year tips below 0.5% real yield. When the real yields get close to zero or negative I sell them
by grok87
Sun Jun 16, 2019 6:53 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

thought it was worth an update. Currently yields: 5 year TIP: 0.35% 10 year TIP: 0.43% 30 year TIP: 0.85% 5 year nominal treasury: 1.83%======> 5 year BEI = 1.48% 10 year nominal treasury: 2.08% =====> 10 year BEI = 1.65% 30 year nominal treasury: 2.59% =====> 30 year BEI = 1.74% ===> 5x5 BEI = 1.82...
by grok87
Sun Jun 16, 2019 6:36 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

Here's a thought. It may be a mistake to look only at the Treasury yields for the last 7 days. If the fund holds a 3-month Treasury to maturity, just before it matures it will be earning the daily accreted income based on the yield three months ago. So maybe I should average the last three months o...
by grok87
Fri Jun 14, 2019 8:10 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

Here's a thought. It may be a mistake to look only at the Treasury yields for the last 7 days. If the fund holds a 3-month Treasury to maturity, just before it matures it will be earning the daily accreted income based on the yield three months ago. So maybe I should average the last three months o...
by grok87
Sun Jun 09, 2019 5:10 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

An interesting question is how Money Market funds account for small gains and losses when selling securities before maturity. I tried a number of searches and wasn't able to find much information. It would appear that small losses would simply reduce the income paid out. It's not clear if gains wou...
by grok87
Sun Jun 09, 2019 12:10 pm
Forum: Personal Investments
Topic: 7% callable - Structured Investment/Note
Replies: 30
Views: 2482

Re: 7% callable - Structured Investment/Note

well 3 year puts and calls are available. leaps. i wonder what a roll your own structure using those would look like I don't want to keep repeating, but these are longer dated options than 3y with even higher implied volatility... Anyway, I'm not here to sell these products. I'm just saying that if...
by grok87
Sun Jun 09, 2019 9:48 am
Forum: Personal Investments
Topic: 7% callable - Structured Investment/Note
Replies: 30
Views: 2482

Re: 7% callable - Structured Investment/Note

The reality is you can synthesize these things with option strategies *without* paying some huge margin to brokers. If you don't know who the mug is in the card game ... then you are the mug. And if it's too complicated to understand, it's too complicated to invest in. Not true, unless you can tell...
by grok87
Sat Jun 08, 2019 7:02 pm
Forum: Personal Investments
Topic: 7% callable - Structured Investment/Note
Replies: 30
Views: 2482

Re: 7% callable - Structured Investment/Note

One of the advisor came to me with this investment opportunity. I would like to get some feedback/voices from experienced folks on this forum since I am new to all this. Thanks! A callable Yield Note Coupon: 7%p.a. coupon paid quarterly (1.75% per quarter) Equity Contingency: Based on the worst of ...
by grok87
Sat Jun 08, 2019 6:58 pm
Forum: Personal Investments
Topic: Vanguard moving clients from mutual funds to ETFs?
Replies: 34
Views: 4011

Re: Vanguard moving clients from mutual funds to ETFs?

my theory is they want to pump up the volume of the ETFs so they can produce more juicy tax benefits for the mutual fund holders.
by grok87
Sat Jun 08, 2019 9:09 am
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 101
Views: 18062

Re: Why is Vanguard Treasury Money Market yield so high?

SEC 7-day yield of Vanguard Treasury Money Market fund (VUSXX) is 2.33% as of 6/6/2019. That's only down 3 basis points from the high of 2.36%, last seen on 4/5/2019. The fund holds Treasury Bills in the 1-month to 3-month maturity range, with average maturity of 43 days and weighted average life o...
by grok87
Sat Jun 08, 2019 9:06 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

There is an old saying “don’t fight the fed”. I tend to believe the fed will, in the long run, deliver on their inflation target. Perhaps, but the evidence is that the Fed regards its inflation target mostly as a ceiling and is much more willing to undershoot than overshoot. The ECB is even more fi...
by grok87
Sat Jun 08, 2019 5:31 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Thought it might be worth updating the numbers given the movements this week in the bond market 5 year TIP: 0.24% 10 year TIP: 0.33% 30 year TIP: 0.75% 5 year nominal treasury: 1.85%======> 5 year BEI = 1.61% 10 year nominal treasury: 2.08% =====> 10 year BEI = 1.75% 30 year nominal treasury: 2.57% ...
by grok87
Fri Jun 07, 2019 9:53 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12703

Re: David Swensen Unconventional Success

Considering Unconventional Success was published in 2005, I would be interested in David Swensen's current thoughts regarding asset classes that were more expensive and not as readily available as today. International Bonds and International REITs come to mind. Perhaps international bonds would be ...
by grok87
Fri Jun 07, 2019 6:30 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Calling TIPS cheap or expensive assumes that you can predict inflation better than the market, and that you think you know the values of the nominal Treasury liquidity price premium (yield discount) and nominal Treasury unexpected inflation yield premium (price discount). Although there are various...
by grok87
Thu Jun 06, 2019 3:58 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

Calling TIPS cheap or expensive assumes that you can predict inflation better than the market, and that you think you know the values of the nominal Treasury liquidity price premium (yield discount) and nominal Treasury unexpected inflation yield premium (price discount). Although there are various...
by grok87
Tue Jun 04, 2019 12:05 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12703

Re: David Swensen Unconventional Success

i think it is interesting to look at the performance since 1/1/2018. kind of an arbitrarybee period i guess. but it feels like from then til now markets have been flattish but increasingly volatile. whereas in the year or so before that they just went straight up. http://quotes.morningstar.com/char...
by grok87
Mon Jun 03, 2019 5:03 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12703

Re: David Swensen Unconventional Success

catchup wrote:
Mon Jun 03, 2019 7:43 am
I think the TIPS protect against unexpected inflation moreso than expected inflation.
Agree
by grok87
Sun Jun 02, 2019 12:51 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are tips expensive? or are they cheap?

FIREchief wrote:
Sat Jun 01, 2019 11:47 pm
grok87 wrote:
Sat Jun 01, 2019 10:39 am
i mostly buy tips for my retirement tips ladder, which is a substitute for the inflation linked pension i don't have. so from that perspective it is a riskless asset.
Same here. Thanks for posting this very interesting thread grok87!
My pleasure
by grok87
Sun Jun 02, 2019 8:20 am
Forum: Investing - Theory, News & General
Topic: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates
Replies: 68
Views: 6700

Re: Bond Convexity: Why You Shouldn't Fear Bonds With Low Rates

Most investors will optimally hold mostly long-term bonds even at retirement age, since the typical 65-70 year old still has a 20+ year investment horizon. As bonds become a large portion of the portfolio it might be helpful to replace some fraction of the long-term nominal bonds with long-term TIP...
by grok87
Sat Jun 01, 2019 7:26 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

But honestly, i don't see deflation happening in US. Our politicians are too eager to spend. They will be happy to push even larger deficit spending if deflation risk appears. So you're implying that deficit spending is inflationary? Based on what's happened in the aftermath of the great recession,...
by grok87
Sat Jun 01, 2019 7:25 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are TIPS expensive? or are they cheap?

My answer is no. I'm actually going to argue that Tips are cheap. To see why let's start by looking at nominal treasury yields and the implied break-even inflation levels (BEI): 5 year nominal treasury: 1.91%======> 5 year BEI = 1.58% 10 year nominal treasury: 2.12% =====> 10 year BEI = 1.74% 30 ye...
by grok87
Sat Jun 01, 2019 2:03 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are tips expensive? or are they cheap?

dbr wrote: All bonds are expensive now because all interest rates, nominal and real, are historically low. 1+ I believe this to be entirely true. In developed markets there is huge demand for safe yield among the aging and wealthy investing class. This in combination with historically low interest ...
by grok87
Sat Jun 01, 2019 10:41 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are tips expensive? or are they cheap?

jeffyscott wrote:
Sat Jun 01, 2019 10:06 am
Maybe both TIPS and nominals are expensive, given that ~2.35% is available on 1-6 mo. t-bills and brokered CDs are 2.4% and above for any term :?:
yes but brokered cds have il-iquidity risk and state taxes
by grok87
Sat Jun 01, 2019 10:39 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

Re: are tips expensive? or are they cheap?

I think there's a risk-based explanation for what's going on here. In 2008, the market "learned" that fixed-rate U.S. Treasuries are perhaps the safest and most liquid asset class in the world. TIP's not so much. Right now, with concerns about global equity markets, investors are moving into Treasu...
by grok87
Sat Jun 01, 2019 9:13 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 164
Views: 13657

are TIPS expensive? or are they cheap?

Well it's been an interesting week in the bond market. Tips yields have dropped, along with nominal treasuries. Currently yields: 5 year TIP: 0.33% 10 year TIP: 0.38% 30 year TIP: 0.73% So the question is, with yields this low, are tips too expensive? My answer is no. I'm actually going to argue tha...
by grok87
Sat Jun 01, 2019 7:36 am
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12703

Re: David Swensen Unconventional Success

i think it is interesting to look at the performance since 1/1/2018. kind of an arbitrarybee period i guess. but it feels like from then til now markets have been flattish but increasingly volatile. whereas in the year or so before that they just went straight up. http://quotes.morningstar.com/chart...
by grok87
Wed May 29, 2019 6:08 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: REITs Aren't Special
Replies: 124
Views: 14487

Re: Larry Swedroe: REITs Aren't Special

Re REITs Few thoughts, first nothing unique about them basically---well explained by exposure to size, value and term factors. Not as tax inefficient as people generally think --they think NOT because of dividends are ordinary income, but there is virtually no migration (once a REIT always a REIT) ...
by grok87
Mon May 27, 2019 8:50 am
Forum: Investing - Theory, News & General
Topic: 4% withdrawal failed in 1960s. Is that correct?
Replies: 34
Views: 4154

Re: 4% withdrawal failed in 1960s. Is that correct?

4% is a rule of thumb, not a guarantee. Even if it never failed in the past does not mean it will never fail in the future. One reason for not putting too much weight on these studies is that there have not been many independent 30 year periods in the modern era. Using overlapping periods gives the...
by grok87
Sat May 25, 2019 4:15 pm
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 26
Views: 3966

Re: REITS no longer cheap

According to Greenstreet https://www.greenstreetadvisors.com/insights/avgpremnav REITS are now trading at 4% above the NAV of their real estate or at 104%. The long term average is 102%. I'm not changing my asset allocation but it is something i watch. Mostly i would interpret this as a bullish sig...
by grok87
Sat May 25, 2019 12:27 pm
Forum: Investing - Theory, News & General
Topic: REITS no longer cheap
Replies: 26
Views: 3966

Re: REITS no longer cheap

Tdubs wrote:
Sat May 25, 2019 10:12 am
Funny, I was going to post a question about REITs and TREA too. My TIAA 403(b) is closed, but I can buy TREA through a "backdoor," an after-tax retirement annuity.
interesting. i wonder if that's why they are raising expense ratios because they are losing 403b business
by grok87
Sat May 25, 2019 12:00 pm
Forum: Investing - Theory, News & General
Topic: WSJ Article: Think Before You Fish for Bargains in Chinese Stocks
Replies: 50
Views: 4087

Re: Jason Zweig: Counties with faster growing economies of produce lower-not higher-stock market returns

Boy Grok you sure work fast! Thanks! Took a look at the paper you linked. A big point is this: “The correlation between the mean geometric annual real return and mean per capita GDP growth is 0.007 ( p = 0.98) for the top 19 countries for 1970–2002 and 0.005 ( p = 0.99) for the bottom 13 countries ...
by grok87
Sat May 25, 2019 10:45 am
Forum: Investing - Theory, News & General
Topic: WSJ Article: Think Before You Fish for Bargains in Chinese Stocks
Replies: 50
Views: 4087

Re: Jason Zweig: Counties with faster growing economies of produce lower-not higher-stock market returns

https://www.wsj.com/articles/think-before-you-fish-for-bargains-in-chinese-stocks-11558710015?emailToken=3e437a22518fa43db242fe0d5e0f6521bPLKAjcvPTZUJSWgc0LIXK971nYHZOTw9l8K7jnDK0tn4vPj3TbUB5SD14m/Vn0D9GXdPAPDlq1995hyj7FY3m1M0ft3heIUa1U5DeCDgYe7cIX1RpQcd0bxaTE1yRWa&reflink=article_copyURL_share In ...