Search found 7577 matches

by grok87
Sun Dec 10, 2017 12:11 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

With bonds, the inverse relationship between price and yield, means it doesn't matter whether you consider a risk premium to be a discounted price or higher yield. If, at some point in time, the expected value of the liquidity risk premium of a TIP is higher than the expected value of the inflation...
by grok87
Sun Dec 10, 2017 11:21 am
Forum: Investing - Theory, News & General
Topic: likely date for a bitcoin crash: does this make sense to you?
Replies: 31
Views: 1095

Re: likely date for a bitcoin crash: does this make sense to you?

"I have a strong psychic belief that [bitcoin will crash] on New Years Eve..."
https://www.youtube.com/watch?v=Kiiuc0M4L40
by grok87
Sun Dec 10, 2017 6:27 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

With bonds, the inverse relationship between price and yield, means it doesn't matter whether you consider a risk premium to be a discounted price or higher yield. If, at some point in time, the expected value of the liquidity risk premium of a TIP is higher than the expected value of the inflation...
by grok87
Sat Dec 09, 2017 2:45 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 150
Views: 41020

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

I understand your point but it still sounds like market timing. You say "TIPS are expensive now". What does that really mean? Do TIPS have some instrinsic value that you expect them to revert to? I didn't know bonds had intrinsic value different from their market value. They're not like equities. T...
by grok87
Fri Dec 08, 2017 7:15 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Doc wrote:
Thu Dec 07, 2017 12:23 pm
If I am doing this right the nominal curve (red line) is also flattening.

Image

Long data range, sorry. Just look at the right inch.
thanks. yield curve certainly looking pretty flat these days...
by grok87
Fri Dec 08, 2017 7:02 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

The TIPS yield curve has been flattening over the past 8 months as shown by the green line of the difference between the 30-year and 5-year constant maturity rates : https://fred.stlouisfed.org/graph/fredgraph.png?g=gr1E From 4/20/2017 to 12/6/2017 the 30-year yield fell 0.15% points while the 5-ye...
by grok87
Sat Nov 25, 2017 8:01 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

Many thanks to ArtsDoctor for this: In order to answer your own questions, you'll need to understand the 1994 study on which the 4% SWR was originally calculated. Once you've actually looked into that study and subsequent studies, you'll see that there are many caveats. You can start with a variety...
by grok87
Sat Nov 25, 2017 6:24 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

Here is what I came up with: 1) The 4% rule is not a rule but a guideline. 2) Some people are insecure with the 4% guideline and are willing to decrease their guideline to something lower through working longer. 3) No one is a robot and therefor spending will vary over the years. 4) Anyone who has ...
by grok87
Fri Nov 24, 2017 6:15 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

Your example essentially uses social security as a safety cushion, which is what I am going to do. But I do have serious concern about the survivalbility of the socail security, the impact of huge national debt, possible change of medicare. Nothing should be taken for granted, if you don't have to....
by grok87
Fri Nov 24, 2017 4:59 pm
Forum: Investing - Theory, News & General
Topic: Have TIPS truly been tested yet?
Replies: 48
Views: 4364

Re: Have TIPS truly been tested yet?

If you are trying to protect against unexpected inflation TIPS are likely to meet your needs (as well or better than anything else). I was surprised that they dropped in the 2008 stock crisis. They did not provide the protection that standard treasuries did. Once they recovered I exchanged what I h...
by grok87
Fri Nov 24, 2017 5:55 am
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 16
Views: 1735

Re: David Swensen Comments (Nov 2017)

[merged this post into the existing thread - moderator prudent] In a recent interview, David Swensen discussed his thoughts on investing internationally, and his thoughts on the US. I found them interesting: https://www.cfr.org/event/conversation-david-swensen SWENSEN: The types of questions that y...
by grok87
Thu Nov 23, 2017 3:10 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Short answer: it's a follow up to a Board analysis of the Vanguard Quantitative Group: https://www.bogleheads.org/forum/viewtopic.php?t=206890 Investment factors considered: All stocks are ranked according to five characteristics: High quality - healthy balance sheets, steady cash flow Effective us...
by grok87
Thu Nov 23, 2017 10:16 am
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

This is one of the advantages of the Vanguard Market Neutral fund. It's even more tax efficient than TSM or IJS. It's also levered far less and plays its QVM approach in the small caps. Thanks for the interesting comment. Agree about the recent tax-efficiency and i also like the fact that they are ...
by grok87
Wed Nov 22, 2017 4:39 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

Here is what I came up with: 1) The 4% rule is not a rule but a guideline. 2) Some people are insecure with the 4% guideline and are willing to decrease their guideline to something lower through working longer. 3) No one is a robot and therefor spending will vary over the years. 4) Anyone who has ...
by grok87
Wed Nov 22, 2017 3:57 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

Here is what I came up with: 1) The 4% rule is not a rule but a guideline. 2) Some people are insecure with the 4% guideline and are willing to decrease their guideline to something lower through working longer. 3) No one is a robot and therefor spending will vary over the years. 4) Anyone who has ...
by grok87
Wed Nov 22, 2017 1:59 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Now at 0.82%.

One theory is that corporate pension plans are buying long dated treasuries as they see to de-risk and more fully fund their plans.

https://www.bloomberg.com/amp/news/arti ... ve-flatter
by grok87
Tue Nov 21, 2017 7:46 am
Forum: Investing - Theory, News & General
Topic: Liability Matching Portfolio? Really?
Replies: 104
Views: 16293

Re: Liability Matching Portfolio? Really?

There is no such thing as a more or less "safe" asset in the longer term. Thus, the perception that it is possible to "quit the game" is a dangerous illusion. TIPS? Not for high income/high net worth investors with large taxable accounts. If we ever get the rip-roaring inflation that TIPS are bough...
by grok87
Sun Nov 19, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

lack_ey wrote:
Sat Nov 18, 2017 9:50 pm
Leverage in a fund is not like leverage in stocks, though.
Interesting point. I'll give it some thought...
by grok87
Sun Nov 19, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 16
Views: 1735

Re: An hour with David Swensen at Council of Foreign Relations

. Thanks for sharing - always good to hear what Swensen has to say. I found the part on uncorrelated assets interesting - here's an extract from the transcript. One of the most important metrics that we look at is the percentage of the portfolio that’s in what we call uncorrelated assets. And that’...
by grok87
Sat Nov 18, 2017 9:09 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

I hold two AQR funds and I'm surprised at how well they are performing in this "melt-up" environment. As you pointed out, that's not really the environment where you expect to be glad you own them. It's a subtle sign, i think, that the aqr funds actually do have more stock market beta exposure than...
by grok87
Sat Nov 18, 2017 8:28 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Agree with others concern about the amount of leverage aqr is using in its alternative funds Qspix for example is levered 6.9:1 https://funds.aqr.com/-/media/files/fund-documents/fact-sheets/spaf.pdf That means for every $1 you give them they make $6.90 worth of bets, $3.7 worth on the long side an...
by grok87
Sat Nov 18, 2017 2:10 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

I hold two AQR funds and I'm surprised at how well they are performing in this "melt-up" environment. As you pointed out, that's not really the environment where you expect to be glad you own them. Agree It's a subtle sign, i think, that the aqr funds actually do have more stock market beta exposur...
by grok87
Sat Nov 18, 2017 1:58 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5037

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Agree with others concern about the amount of leverage aqr is using in its alternative funds Qspix for example is levered 6.9:1 https://funds.aqr.com/-/media/files/fund-documents/fact-sheets/spaf.pdf That means for every $1 you give them they make $6.90 worth of bets, $3.7 worth on the long side and...
by grok87
Sat Nov 18, 2017 8:37 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

I agree. I would not be in the least concerned about the insurance companies making my annuity payments and my state's guarantor association all failing. But it's obvious that some people are. My point was merely that if that were to occur, it's very possible that a total economic collapse could be...
by grok87
Sat Nov 18, 2017 6:23 am
Forum: Investing - Theory, News & General
Topic: TSP Modernization Act Signed Into Law
Replies: 22
Views: 4088

Re: TSP Modernization Act Signed Into Law

daveydoo wrote:
Sat Nov 18, 2017 1:57 am
Read this thread with a sense of relief -- from the title, I just assumed that "modernization" would mean privatization and conversion to a high-fee model!
+1
by grok87
Fri Nov 17, 2017 7:32 pm
Forum: Investing - Theory, News & General
Topic: Goldman Sachs mulls the death of the value factor
Replies: 18
Views: 2123

Re: Goldman Sachs mulls the death of the value factor

...When BusinessWeek comes out with a "Death of Value" cover, a huge rally in the Large Value stocks will be ahead. It took about 3-4 years after the infamous "Death of Equities" article for one of the greatest bull markets ever to ignite... The "Death of Equities" article is fine. It is constantly...
by grok87
Fri Nov 17, 2017 5:52 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

If retirees truly feared running out of money more than death, then why aren't more buying guaranteed income through vehicles such as SPIAs? They might not guarantee a certain standard of living, but they do guarantee that you'll never run out of money. Why should I believe in the guarantee given b...
by grok87
Fri Nov 17, 2017 5:38 pm
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 16
Views: 1735

Re: An hour with David Swensen at Council of Foreign Relations

Great interview- thanks for posting. Just a heads up that the transcript is not perfect. Pretty sure he said "absolute return portfolio" in this quote "SWENSEN: No. Well, within the absence of return portfolio, a lot of the long/short managers or a lot of the other strategies have residual equity ex...
by grok87
Fri Nov 17, 2017 7:55 am
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

There was no need to cut spending in 1972 despite the market crash. You could have taken out 4.5% and been fine. VPW cutting spending was an over reaction.That is the whole flaw in the system. It is easy to go conservative and never run out of money. But that isn't a free choice. You give up spendi...
by grok87
Fri Nov 17, 2017 7:21 am
Forum: Investing - Theory, News & General
Topic: Goldman Sachs mulls the death of the value factor
Replies: 18
Views: 2123

Re: Goldman Sachs mulls the death of the value factor

In general shouldn't the underperformance of value for the last decade or so intuitively make one much more not less excited to invest in a value strategy? Or have there been a lot of people making the argument that growth outperforming value is the new normal (as opposed to value continuing to out...
by grok87
Thu Nov 16, 2017 8:24 pm
Forum: Investing - Theory, News & General
Topic: Goldman Sachs mulls the death of the value factor
Replies: 18
Views: 2123

Re: Goldman Sachs mulls the death of the value factor

An interesting article from from GS explaining the reasons why value has underperformed for a long spell: https://www.bloomberg.com/news/articles/2017-06-08/goldman-sachs-mulls-death-of-value-investing-after-losing-decade . GS believes a conjunction of macroeconomic factors and monetary policy are ...
by grok87
Thu Nov 16, 2017 3:16 pm
Forum: Investing - Theory, News & General
Topic: The 4% rule DOES fail but still makes sense!
Replies: 195
Views: 14938

Re: The 4% rule DOES fail but still makes sense!

I'm curious what folks think about this article. https://www.manning-napier.com/Corporate/Insights/ResearchLibrary/Article/tabid/308/Article/97/Endowments-and-Foundations-A-Closer-Look-at-Spending-Rules.aspx It's more geared to endowments. But it shows that the standard 4% rule (the article uses 5%)...
by grok87
Mon Nov 13, 2017 6:23 pm
Forum: Investing - Help with Personal Investments
Topic: Rethinking I-bonds vs Tax Advantaged TIPS fund
Replies: 5
Views: 660

Re: Rethinking I-bonds vs Tax Advantaged TIPS fund

I think you have a valid point. But ibonds, as mel, pointed out have certain state tax advantages compared to tips in a regular ira/401k. Another one is better deflation protection. Ibonds can only go up. Another one is real interest rate protection. If real rates rise then tips will take a hit wher...
by grok87
Sat Nov 11, 2017 4:00 pm
Forum: Investing - Theory, News & General
Topic: My favorite bond portfolio
Replies: 19
Views: 2690

Re: My favorite bond portfolio

i like the emphasis on treasuries and tips. same approach as swensen. but i'm not sure how he is running his backtest starting in 1970 as he claims. tips didn't exist then. my own view is that it is hard to be too scientific about this. in certain periods like recently, long term treasuries have bee...
by grok87
Sat Nov 11, 2017 8:06 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Seasonal wrote:
Fri Nov 10, 2017 1:11 pm
As of the moment, 30 yr tips yield is 0.91%, making back about half of the lost yield over the last 2 weeks.
thanks- yes i saw that. makes my decision easier...
by grok87
Sat Nov 11, 2017 8:03 am
Forum: Personal Finance (Not Investing)
Topic: 11 month no pnealty CD 1.55% 1K Minnimum
Replies: 11
Views: 2010

Re: 11 month no pnealty CD 1.55% 1K Minnimum

Sure its no penalty if the bank agrees to give you your money back early. They reserve the right not to. From depositaccounts.com I have a No-Penalty CD. How do I access my funds? You can make a request to access the total balance and interest earned on your No-Penalty CD as long as it is 7 days af...
by grok87
Fri Nov 10, 2017 6:56 pm
Forum: Personal Finance (Not Investing)
Topic: 11 month no pnealty CD 1.55% 1K Minnimum
Replies: 11
Views: 2010

Re: 11 month no pnealty CD 1.55% 1K Minnimum

Sure its no penalty if the bank agrees to give you your money back early. They reserve the right not to. From depositaccounts.com I have a No-Penalty CD. How do I access my funds? You can make a request to access the total balance and interest earned on your No-Penalty CD as long as it is 7 days aft...
by grok87
Fri Nov 10, 2017 6:28 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Put another way, I think that TIPS "insurance" is currently free, because a significant number of buyers are offsetting it with an emotional aversion to facing up to what real rates currently are paying. Agree. I haven't read the Larry Swedroe source Doc cites. But there are a bunch of federal rese...
by grok87
Fri Nov 10, 2017 6:26 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

The ft article had a pay wall but I read the pimco one. It was from early 2016 when 5x5 year bei was plunging, down to like 1.5% level. I think it's around 1.8% now. The paragraph I quoted was the key to the FT article. FWIW, I found the article through a Google search and clicking the Google link ...
by grok87
Thu Nov 09, 2017 8:07 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Here's a random sample: https://blog.pimco.com/en/2016/03/is-the-fed-ignoring-an-important-signal-in-market-data/ Also see https://ftalphaville.ft.com/2015/02/26/2120296/why-isnt-the-fed-worried-about-collapsing-breakevens/ "The problem with this explanation of the recent decline in breakevens is t...
by grok87
Thu Nov 09, 2017 7:59 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

I cannot commit to 30 years at current yield levels, but maybe I'll regret that if we experience ILG-like negative real yields in the future. To me, TIPS look attractive vs. nominal Treasuries, but not to CDs. On the secondary market, CD NOMINAL less TIPS REAL rate... 1/15/2023 - 2.36 1/15/2024 - 2...
by grok87
Thu Nov 09, 2017 6:55 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Expected inflation = BEI + "tips il-liquidity premium" - "inflation insurance premium" While the model may seem overly complicated, i like it. It starts with the observation that tips are less liquid than regular treasuries, less trading, higher bid-ask spreads, nasty tax rules. I think 30 year BEI...
by grok87
Thu Nov 09, 2017 5:54 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

Put another way, I think that TIPS "insurance" is currently free, because a significant number of buyers are offsetting it with an emotional aversion to facing up to what real rates currently are paying. Agree. I haven't read the Larry Swedroe source Doc cites. But there are a bunch of federal rese...
by grok87
Wed Nov 08, 2017 10:07 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

1% vs. 0.83% seems tiny. Well it's a 5% price move. If my maths is right (1+0.0017)^30 then it is a 5% difference in terminal wealth, assuming the coupons can be reinvested at the same real rate. That's significant in my books. Thanks Valuethinker. Agree with your analysis. I would be curious re yo...
by grok87
Wed Nov 08, 2017 8:30 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

If inflation is 1-2%, they'll clearly underperform other fixed income. If inflation is 2%, TIPS will absolutely not underperform nominal treasuries (at any term from 5 years to 30 years currently). If you're introducing agency/corporate/etc. bonds, then we're comparing apples to oranges. Agree
by grok87
Wed Nov 08, 2017 8:02 am
Forum: Investing - Theory, News & General
Topic: Vanguard Total Corporate Bond ETF listing announced
Replies: 8
Views: 1199

Re: Vanguard Total Corporate Bond ETF listing announced

How is it truly a "Total" Corporate Bond ETF if it is only investment-grade bonds? Would you need high-yield exposure, or at the very least an ETF like iShares Fallen Angels USD Bond ETF (FALN) ? I don't know the answer myself, but it seems strange to call it a "Total" bond fund. Is it simply becau...
by grok87
Wed Nov 08, 2017 7:51 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

It's always worth remembering that whether to buy now and whether to buy at auction are two different questions. I personally don't see the appeal of buying at auction simply because you don't find out until afterward what the price/yield are. I prefer to buy bonds in the secondary market where I k...
by grok87
Tue Nov 07, 2017 4:11 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 49
Views: 5389

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

1% vs. 0.83% seems tiny. Well it's a 5% price move. I hear you. But I guess my point is that 5% of bupkes is bupkes...unless you have $500k in TIPS or something. Well let's just say my aim is to source 1/3 of my retirement Income from long term tips. It's the 3-legged stool approach with 1/3 from s...