Search found 960 matches

by Theoretical
Sun May 21, 2017 12:29 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2239

Re: Larry Swedroe: Problems With The Factor Zoo

Quite right. I think if anything there is a premium to quality, but it's a premium in the insurance sense, not the positive sense. For what it's worth, the quality-screened Bridgeway microcap fund got hammered on the way down in 2008, and the recovery was most centered on junky microcaps. With bonds...
by Theoretical
Sat May 20, 2017 10:38 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2239

Re: Larry Swedroe: Problems With The Factor Zoo

I tend to view quality/profitability as one of two ways. The best positive explanation (for it being a risk factor) I've heard is that it relates to competitive advantages that can be targeted for reduction or elimination by rival companies. For example, having THE top technology and the execution t...
by Theoretical
Fri May 19, 2017 5:17 pm
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2876

Re: Justification for holding Emerging Markets?

And we also have shareholder protections that can be taken for granted. This statement is true, BUT, I think the very safe havenness of the US leads to an underrating of the risks of fraud and outright fantasy in the markets - the dot coms, Worldcom/Enron, and biggest of all the outright MBS/CDO fr...
by Theoretical
Wed May 17, 2017 7:34 pm
Forum: Investing - Theory, News & General
Topic: International: Where's the benefit?
Replies: 63
Views: 4597

Re: International: Where's the benefit?

ONE country has been dragging International down since that date (after pulling it way ahead). Japan. European stocks, Asia ex-Japan, and Emerging markets have all been diversifiers with high returns. Moreover, Japan Value has had decent returns as well. This is exactly the reason why International ...
by Theoretical
Tue May 16, 2017 10:10 pm
Forum: Investing - Theory, News & General
Topic: Tilting: Will lowered contextual risk of factors eventually eliminate the risk premium?
Replies: 8
Views: 650

Re: Tilting: Will lowered contextual risk of factors eventually eliminate the risk premium?

While it's always possible, it's not yet happened that TSM has never yielded positive turns over a longer investment trajectory, whereas it seems that people are making the argument that SV could disappear or diminish proportionally to overall returns. We just had a 30 year period where stocks fail...
by Theoretical
Tue May 16, 2017 2:31 pm
Forum: Investing - Theory, News & General
Topic: "Can this fee structure save actively managed funds"
Replies: 10
Views: 870

Re: "Can this fee structure save actively managed funds"

Or perhaps this could be a great ploy to attract investors who might otherwise grudgingly place money in a passive fund because they finally realized how expensive active funds really are. This would offer "active at passive" pricing as the sales pitch but could then be nothing more than ...
by Theoretical
Tue May 16, 2017 1:28 pm
Forum: Investing - Theory, News & General
Topic: What Will Burst the Next Bubble?
Replies: 66
Views: 6200

Re: What Will Burst the Next Bubble?

But, fundamentally, oil prices are low this time because US production is rising, having fallen every year since 1971. And that is because of technology change-- tight oil/ fracking. So the supply-demand picture has fundamentally changed in an unprecedented way. The outlook is very much for oil pri...
by Theoretical
Tue May 16, 2017 1:10 pm
Forum: Investing - Theory, News & General
Topic: Research studies on high bond/low stock portfolios?
Replies: 10
Views: 1023

Re: Research studies on high bond/low stock portfolios?

I think if you're going to do a high bond-stock folio, a big slug should be in t-bills or a TIPS ladder. Using The Simba sheet and the broadest categories of data, with a 1940-1982 timeframe, t-bills will save your bacon as bonds die and stocks play the 1970s.
by Theoretical
Mon May 15, 2017 6:43 pm
Forum: Investing - Theory, News & General
Topic: "Can this fee structure save actively managed funds"
Replies: 10
Views: 870

Re: "Can this fee structure save actively managed funds"

This is actually a strategy that may be more hazardous to the investor even than a 2/20. With that, you at least know your eyeballs are getting ripped out but you're at least promised uncorrellated returns or massive profits despite the fees. This is a fee structure that is rife with moral hazard an...
by Theoretical
Fri May 12, 2017 6:19 pm
Forum: Personal Finance (Not Investing)
Topic: How specific/specialized is your Living Will?
Replies: 22
Views: 1104

Re: How specific/specialized is your Living Will?

I think specificity is most useful when a specific, chronic, progressive, and ultimately lethal condition has been diagnosed OR where by genetic history, absent getting hit by a bus, you are nearly certain to get and die from this condition. Then, one can go to the Merck Manual or WebMD and list on ...
by Theoretical
Thu May 11, 2017 8:26 pm
Forum: Investing - Theory, News & General
Topic: Muni risks other than interest rates
Replies: 7
Views: 985

Re: Muni risks other than interest rates

Also, General Obligation, Education, Transportation, and especially Water/Sewer bonds tend to be extremely safe. Now I'd avoid the high yield fund and a lot of other muni funds that play around in the lower credit ratings and with stuff like special revenue bonds for stadiums, housing, or commercial...
by Theoretical
Thu May 11, 2017 8:11 pm
Forum: Investing - Theory, News & General
Topic: Muni risks other than interest rates
Replies: 7
Views: 985

Re: Muni risks other than interest rates

I'd say for a conservative fund like Vanguard's, there's not high risk but there is some risk. The fact it's an active fund is to your advantage because Vanguard can move out of vulnerable states if it so chooses. Tax law changes are all over the map. Munis may get charged or they may not. Yields wo...
by Theoretical
Thu May 11, 2017 3:57 pm
Forum: Investing - Theory, News & General
Topic: If not Past Performance, how do you evaluate a fund/etf?
Replies: 18
Views: 1117

Re: If not Past Performance, how do you evaluate a fund/etf?

Past performance is not good for evaluating the merits of a strategy , but for an index fund or factor/quant fund, past performance is valuable to determine whether the implementation of said strategy has been successfully executed. This is where the concept of tracking error comes into play. If the...
by Theoretical
Thu May 11, 2017 2:23 pm
Forum: Investing - Theory, News & General
Topic: "Necessary but not sufficient. CEO McNabb explains why it takes more than low costs."
Replies: 4
Views: 1124

Re: "Necessary but not sufficient. CEO McNabb explains why it takes more than low costs."

The problem is, if the manager is active, he or she is doing a lot of trading - and someone has to pay for the trading costs. There are other risks in managed funds - one of the biggest being manager risk - the risk that the manager will do something stupid. In the equity space, indexing is the way...
by Theoretical
Wed May 10, 2017 3:10 pm
Forum: Investing - Help with Personal Investments
Topic: Best TDA ETF to replicate Total International Stock Fund
Replies: 9
Views: 338

Re: Best TDA ETF to replicate Total International Stock Fund

China A shares in VWO I think. Is this for taxable or an IRA? I keep all my Tot International in IRA/HSA If you're buying monthly, then buy VEU (with or without VSS) 11 months out of the year. Then wait 30 days from your last VEU purchase and sell all of it (plus the VSS) and pay one (or 2 in the c...
by Theoretical
Wed May 10, 2017 2:25 pm
Forum: Investing - Help with Personal Investments
Topic: Best TDA ETF to replicate Total International Stock Fund
Replies: 9
Views: 338

Re: Best TDA ETF to replicate Total International Stock Fund

China A shares in VWO I think.

Is this for taxable or an IRA?
by Theoretical
Wed May 10, 2017 1:38 pm
Forum: Investing - Theory, News & General
Topic: Could investors realistically lose money balance on a short-term US Govt. money market?
Replies: 3
Views: 381

Re: Could investors realistically lose money balance on a short-term US Govt. money market?

"Breaking the buck" happened with money market funds in 2008, but they were invested in much riskier assets. If the buck gets broken on short-term government money markets like this, I think the US would have to be in dire straits like a revolution/civil war, large-scale WMD attack, or som...
by Theoretical
Wed May 10, 2017 12:05 pm
Forum: Investing - Theory, News & General
Topic: How are international/global ETF region weightings determined?
Replies: 31
Views: 1236

Re: How are international/global ETF region weightings determined?

I'd take a look at FTSE Russell's indexes to see how different methods weight their countries. http://www.ftse.com/products/indexmenu?scrollToSection=Market-Cap_Weighted&_ga=2.102265221.509437492.1494435252-774414513.1494435252 The GDP-weighted indexes are interesting comparisons, but you end up...
by Theoretical
Tue May 09, 2017 8:11 pm
Forum: Investing - Theory, News & General
Topic: Odd factor loadings - int'l funds
Replies: 6
Views: 655

Re: Odd factor loadings - int'l funds

Also, the ex-US factors and Global factors can be downright wonky in their results. But part of that is that hardly any funds even begin to reach down into the true small caps for International like many more funds do in the US. $2B is roughly in the middle quintile of ex-US and $1B is the 20-40% qu...
by Theoretical
Tue May 09, 2017 5:47 pm
Forum: Investing - Theory, News & General
Topic: All-in-one Plus strategy
Replies: 65
Views: 2870

Re: All-in-one Plus strategy

In addition, having the bonds be in taxable with this strategy means you can eat them in a way that you would get penalized for IRA/401k withdrawals in an extended slump. This addresses the issue of extended unemployment and having to dip into savings that slumps often cause. Moreover, it rebalances...
by Theoretical
Tue May 09, 2017 5:36 pm
Forum: Investing - Theory, News & General
Topic: All-in-one Plus strategy
Replies: 65
Views: 2870

Re: All-in-one Plus strategy

I think it should be bonds as the "plus" point, not stocks, in taxable with this strategy. Use a more aggressive All-in-One and a conservative Municipal fund in taxable.
by Theoretical
Tue May 09, 2017 1:52 pm
Forum: Investing - Theory, News & General
Topic: I'm Calling an Emerging Markets Bottom
Replies: 242
Views: 38660

Re: I'm Calling an Emerging Markets Bottom

HomerJ, you're quite right on that. One would have missed a lot of asset growth that was not lost in the down years of the market. Because the general trend of markets is upwards, subject to all kinds of turmoil, I think if one is going to sin in this area, it's much more likely to pay off being a d...
by Theoretical
Tue May 09, 2017 11:46 am
Forum: Investing - Theory, News & General
Topic: Gundlach shorts S&P 500, says passive investing is a 'myth'
Replies: 51
Views: 5912

Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

Can't say I'm impressed with his credentials as "the Bond King". On March 9, 2011, Gundlach was quoted on CNBC that “Munis Are The New Subprime.” “You’ve got a history of low defaults, which is comforting. But that kind of sounds like what subprime sounded like back in 2006,” Gundlach sai...
by Theoretical
Tue May 09, 2017 7:32 am
Forum: Investing - Theory, News & General
Topic: Gundlach shorts S&P 500, says passive investing is a 'myth'
Replies: 51
Views: 5912

Re: Gundlach shorts S&P 500, says passive investing is a 'myth'

I most like how he's short S&P and long EEM (gasp, another index), and with extra leverage 200 up/100 down! Also, S&P'a methodology is far more transparent than almost any active fund.
by Theoretical
Mon May 08, 2017 1:42 pm
Forum: Investing - Theory, News & General
Topic: I'm Calling an Emerging Markets Bottom
Replies: 242
Views: 38660

Re: I'm Calling an Emerging Markets Bottom

So, in defense of grap003, when he's talking about a signal, he's talking about those very rare extreme valuation situations that are the flipside of the "shoeshine boys talking stocks" that got Joe Kennedy to bail on the markets in '29 or the must-have internet stocks that were the irrati...
by Theoretical
Mon May 08, 2017 12:16 am
Forum: Investing - Theory, News & General
Topic: If everybody indexed, the only word you could use is chaos, catastrophe
Replies: 48
Views: 6186

Re: If everybody indexed, the only word you could use is chaos, catastrophe

I think that's a valid concern in terms of the Japanese zombie corp experience to one extent. On the other side of it, though, is a dramatic increase in the dispersion of returns between companies. It used to be that you could grab 30-40 blue chips and have a diverse portfolio. Now to get a 5% track...
by Theoretical
Sun May 07, 2017 4:08 pm
Forum: Personal Finance (Not Investing)
Topic: Recommended Asset Protection Attorney
Replies: 3
Views: 486

Re: Recommended Asset Protection Attorney

If what you're trying to protect against has already happened, then full stop and take your lumps. It's worthwhile to get a consultation, but you won't be able to protect anything for a recent past incident (within statute of limitations). Moreover, trying to hide or limit asset exposure is a good w...
by Theoretical
Sun May 07, 2017 3:05 pm
Forum: Investing - Theory, News & General
Topic: PowerShares S&P 500 Value with Momentum ETF (SPVM)
Replies: 10
Views: 797

Re: PowerShares S&P 500 Value with Momentum ETF (SPVM)

It's relatively doable to get momentum to neutral or mildly positive (S&P 600 value, the PIMCO take on RAFI funds, Bridgeway and DFA, and several "active" value funds) and AQR/Bridgeway manage to make momentum value-neutral, but so far the multifactor funds look great in theory but app...
by Theoretical
Sun May 07, 2017 2:36 pm
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3574

Re: Value Index Funds A Farse?

Also, notably, the S&P definitions of value and growth are not structured as mutually exclusive. S&P 600 growth is arguably a QVM multifactor etf by its factor loadings. S&P Pure funds avoid splitting the market into value and growth. But S&P Style funds do: http://us.spindices.com/...
by Theoretical
Sun May 07, 2017 12:00 am
Forum: Investing - Theory, News & General
Topic: CDOs or Sub prime MBS in Vanguard funds?
Replies: 9
Views: 731

Re: CDOs or Sub prime MBS in Vanguard funds?

Yeah, the criticism of MBS in total bond on the board only relate to how the bonds react to interest rate changes (lower duration for cuts and longer for hikes, both generally bad for the investor). The creditworthiness is not at issue.
by Theoretical
Sat May 06, 2017 11:31 pm
Forum: Investing - Theory, News & General
Topic: DGSIX: Any other small-cap & value tilted 60/40 funds?
Replies: 10
Views: 818

Re: DGSIX: Any other small-cap & value tilted 60/40 funds?

Until 2016, the value premium had been negative for 9 years - ergo, it's not surprising that the tilted fund did worse.
by Theoretical
Fri May 05, 2017 4:32 pm
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3574

Re: Value Index Funds A Farse?

I've always thought this procedure was a little bit insane from the perspective of a style investor. Why would a value investor be less interested in owning a low valuation stock once she learns that it also has strong growth prospects? Or the other way around, why a growth investor lose in interes...
by Theoretical
Fri May 05, 2017 11:30 am
Forum: Investing - Theory, News & General
Topic: U.S. SEC approves request to list quadruple-leveraged ETFs
Replies: 27
Views: 2120

Re: U.S. SEC approves request to list quadruple-leveraged ETFs

You guys are such pessimists. Look on the bright side - people buying the 4x daily S&P ETFs can only lose 100% of their money. With S&P futures, which is the obvious and no doubt cheaper alternative, they could lose more than 100% if they used the same 4x leverage. That's the spirit! :mrgre...
by Theoretical
Fri May 05, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: Will the real Value Investing please stand up
Replies: 3
Views: 560

Re: Will the real Value Investing please stand up

Quantitative approaches to detecting these distortions—such as combining formulaic value with momentum, quality, and profitability measures—can help in avoiding these “value traps.” They set out to prove that "bare value" is not enough, then conclude with this statement; however, this sta...
by Theoretical
Fri May 05, 2017 10:54 am
Forum: Investing - Theory, News & General
Topic: Puerto Rico Bonds Bankrupcy
Replies: 37
Views: 3790

Re: Puerto Rico Bonds Bankrupcy

Historically, municipal bonds have been dramatically safer than corporates, and even more so for GO or essential service revenue (like water/sewer, education, or transportation): http://www.municipalbonds.com/education/read/77/default-rates-of-municipal-bonds/ . As far as GSE bonds go, we already kn...
by Theoretical
Thu May 04, 2017 4:42 pm
Forum: Investing - Theory, News & General
Topic: Any argument for NOT using total market/bond funds in taxable account?
Replies: 23
Views: 1534

Re: Any argument for NOT using total market/bond funds in taxable account?

What you're looking for on the other side is called "slicing and dicing." This can be done on the factor-level (small/value/momentum/etc...) or large/small, developed/emerging. REITs are somewhere in the middle, as they're a category of stocks that's taxed atypically. Total market stock fu...
by Theoretical
Thu May 04, 2017 10:16 am
Forum: Personal Consumer Issues
Topic: Recommended Washer/Dryer Set
Replies: 25
Views: 1916

Recommended Washer/Dryer Set

Our current washer just broke, and as its a compact washer, we'd like to get a full size stackable pair, with our plan being front-loaders. The budget for both (aggregated) is between $1500-2000. Any recommendations or "avoids" as far as brands go?
by Theoretical
Wed May 03, 2017 4:57 pm
Forum: Investing - Theory, News & General
Topic: Puerto Rico Bonds Bankrupcy
Replies: 37
Views: 3790

Re: Puerto Rico Bonds Bankrupcy

The territories are under a significantly different standard than the states. The 10th Amendment, even under the O'Connor-Rehnquist courts, would not allow state bankruptcies. It's basically a dead letter as far as constitutional law is concerned 99% of the time, and would especially be for somethin...
by Theoretical
Tue May 02, 2017 10:30 pm
Forum: Investing - Theory, News & General
Topic: Why? Jeremy Siegel thinks 30 yr. bond a good l.t. buy/hold.
Replies: 13
Views: 1768

Re: Why? Jeremy Siegel thinks 30 yr. bond a good l.t. buy/hold.

I just realized why I really asked this question: Any way you measure it, given how pulverized the holder of a 30 year bond could get by inflation over that time, how can buying one be anything other than speculation? Matching a nominal liability is not speculative. Neither is using them for anti-d...
by Theoretical
Tue May 02, 2017 8:31 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising
Replies: 60
Views: 5312

Re: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising

One difference is that megacaps tend to be highly concentrated while ex-megacap investing tends to be far more dispersed. Cisco used to be something like 5-6% of the S&P and Enron used to be number 7 globally. The top 10 holdings of most TSM funds tend to be 20-30% of the entire fund while most ...
by Theoretical
Mon May 01, 2017 10:49 am
Forum: Investing - Theory, News & General
Topic: Value's Rough Patch Not a Concern for AQR's Ronen Israel
Replies: 4
Views: 581

Re: Value's Rough Patch Not a Concern for AQR's Ronen Israel

This article about deep value across asset classes by AQR was most interesting: https://www.aqr.com/library/aqr-publications/building-a-better-deep-value-portfolio-difficulties-mastered-are-opportunities-won. I wonder if they'll be releasing a fund based on this strategy.
by Theoretical
Mon May 01, 2017 8:36 am
Forum: Investing - Theory, News & General
Topic: Vanguard's Jack Bogle Warns Smart Beta May Be Over-Promising
Replies: 60
Views: 5312

Re: "I wish I was as sure of anything as he is of everything"

Bogleheads: I love this classic quote by Jack Bogle in the Wall Street Journal (4-29-2017) referring to Rob Arnott, "Godfather of 'Smart Beta'." I wish I was as sure of anything as he is of everything. Best wishes. Taylor Yep that's a gem. I like the fundamental index approach personally,...
by Theoretical
Sun Apr 30, 2017 3:31 pm
Forum: Investing - Help with Personal Investments
Topic: Where to park 200k cash for 2-5 years
Replies: 24
Views: 3378

Re: Where to park 200k cash for 2-5 years

All of these recommendations are missing the fact the OP is in California. CDs and corporate bonds get double doses of taxes. I think 10-20% should be invested in stocks (limiting the downside while providing real diversification) and the rest is a mix of short term TVA bonds (near CD rates and stat...
by Theoretical
Sun Apr 30, 2017 10:59 am
Forum: Investing - Theory, News & General
Topic: Question for quants, math geeks - reducing volatility in my costs?
Replies: 18
Views: 1229

Re: Question for quants, math geeks - reducing volatility in my costs?

Honestly, this sounds like something where you should consult a business consultant and a specialist financial consultant to evaluate what is and is not an appropriate hedging vehicle. Since it's not a readily traded commodity, I think you're very likely to do more harm than good by only DIY'ing it....
by Theoretical
Sun Apr 30, 2017 9:23 am
Forum: Investing - Theory, News & General
Topic: Diversifying Power of Longer Term US Treasuries
Replies: 59
Views: 21117

Re: Diversifying Power of Longer Term US Treasuries

can we conclude that during a bear market caused by a financial crisis/Deflation, Long-Term US Treasuries are very likely to have the higher negative correlation to stocks compared to other types of bonds or fixed income? I'd say mostly yes, with a caveat. Generally bonds of longer duration should ...
by Theoretical
Sat Apr 29, 2017 3:09 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Investing for Elderly Parents
Replies: 14
Views: 1065

Re: Help with Investing for Elderly Parents

A joint life Single Premium Immediate Annuity seems like it'd be near-perfect for some of the money. Mix it with building a savings cushion and maybe 20% stocks and you're set. The stocks add diversification without upping volatility overall. Try something like $150K in Total Market funds (a single ...
by Theoretical
Thu Apr 27, 2017 11:37 pm
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting on a one fund portfolio
Replies: 6
Views: 701

Re: Tax Loss Harvesting on a one fund portfolio

31 days, unless you sell ALL of the TLH partner, including in your IRAs/HSA/other accounts. Alternately, if you end up triggering VG's frequent trading, you'll want to switch to ETFs at least for a large chunk.
by Theoretical
Thu Apr 27, 2017 7:57 am
Forum: Investing - Theory, News & General
Topic: DEMSX vs VSS [DFA Emerg. Mkts Small Cap vs. Vanguard FTSE All-World ex-US]
Replies: 20
Views: 1450

Re: DEMSX vs VSS

Tracking error (which can be huge in either direction) and the lack of capital gains distributions.
by Theoretical
Thu Apr 27, 2017 7:36 am
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting on a one fund portfolio
Replies: 6
Views: 701

Re: Tax Loss Harvesting on a one fund portfolio

Just buy Vanguard Large Cap or the S&P 500 funds, or do you just start dumping your cash on hand into the VTSAX fund, so when it goes up you have more shares at a cheaper price, so you end up farther out in the end? Just buy more of the TLH partner as you would normally or wait 30 days and if yo...
by Theoretical
Thu Apr 27, 2017 12:24 am
Forum: Investing - Theory, News & General
Topic: DEMSX vs VSS [DFA Emerg. Mkts Small Cap vs. Vanguard FTSE All-World ex-US]
Replies: 20
Views: 1450

Re: DEMSX vs VSS

For EWX and EEMS, ignore the expense ratios. Securities lending brings both funds effective expense ratios (what you see) into the teens or lower. DGS is still about 50-55 bp in expenses. If it's taxable, I'd take EEMS every day and Sunday, high spreads and all. VSS's analogue would be something lik...

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