Search found 455 matches

by raven15
Thu May 07, 2020 2:53 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 2012
Views: 160064

Re: Small Cap Value heads Rejoice !!!

Forester wrote:
Thu May 07, 2020 9:17 am
7th May 2019 to 6th May 2020 total return

IJS scv -29.99%
QQQ +18.61%

Tech/Growth 48.6% advantage over small cap value in the last 12 months
ZROZ +48.67%

Bond/Stock 30.1% advantage over tech stocks in the last 12 months
by raven15
Fri May 01, 2020 10:51 am
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

Not really. Unless you are rebalancing. You cannot expect positive results from this. Because sometimes you'll buy cheap, sometimes you'll buy expensive and average case they cancel each other. And that was more than full cycle. Cycle usually ends higher than where it started. Your example was less...
by raven15
Thu Apr 30, 2020 11:02 am
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

it's path dependent. it worked in historical sequence. but it may not work in future sequence. if it first goes down and you buy cheap, and then it goes back up, then it works. but if it first goes up and then down, then you do worse with this method. you cannot know which of these will happen. It ...
by raven15
Thu Apr 30, 2020 10:51 am
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

Unless the volatility is deeper on the downside as compared to the normalized trend then it doesn’t matter if your DCA buys more shares when under trend and less when over, your average value is equal. Seriously, try it in Excel. Admittedly the effect in my illustration is tiny. I'm sure Bernstein'...
by raven15
Thu Apr 30, 2020 12:53 am
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

Whether in accumulation or decumulation, I think volatility detracts from returns. I appreciate the potential of rebalancing with new money going into the worst performing investment during accumulation, but I don’t know that that overrides the drag caused by volatility. With volatility, there is s...
by raven15
Thu Apr 30, 2020 12:46 am
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

Since math and reason have failed, appeal to authority is my most logical recourse. In page 19 of "Ages of the Investor: A Critical Look at Lifecycle Investing" https://www.bogleheads.org/wiki/William_Bernstein wrote: " [for 30 year rolling periods investing $100 'real' per month] Finally, Figure 9...
by raven15
Wed Apr 29, 2020 8:38 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

Since math and reason have failed, appeal to authority is my most logical recourse. In page 19 of "Ages of the Investor: A Critical Look at Lifecycle Investing" https://www.bogleheads.org/wiki/William_Bernstein wrote: " [for 30 year rolling periods investing $100 'real' per month] Finally, Figure 9 ...
by raven15
Wed Apr 29, 2020 8:09 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

MotoTrojan wrote:
Wed Apr 29, 2020 7:55 pm
Let’s agree to disagree.
Agreed. However, please be advised that if we agree volatility is bad for a retiree, then we secretly agree to agree.

And if you see page 19 of Ages of the Investor you'll see other people agree with me :o
by raven15
Wed Apr 29, 2020 7:24 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

You see, it's path dependent. Yes, it is path dependent. You need to assume volatility cuts both ways and invest for a full cycle. Usually SCV has greater losses in downturns so that is good. And it doesn't guarantee an outcome, but it is another thing improving my odds in the event that factor inv...
by raven15
Wed Apr 29, 2020 6:36 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

You see, it's path dependent. Yes, it is path dependent. You need to assume volatility cuts both ways and invest for a full cycle. Usually SCV has greater losses in downturns so that is good. And it doesn't guarantee an outcome, but it is another thing improving my odds in the event that factor inv...
by raven15
Wed Apr 29, 2020 6:28 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

You see, it's path dependent. Yes, it is path dependent. You need to assume volatility cuts both ways and invest for a full cycle. Usually SCV has greater losses in downturns so that is good. And it doesn't guarantee an outcome, but it is another thing improving my odds in the event that factor inv...
by raven15
Wed Apr 29, 2020 6:23 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

it's rebalancing with new money. You buy each asset to its target with new money. You would get the same bonus if you didn't have new money but sold and bought. Rebalancing bonus relies on mean-reversion. (both assets will revert to the mean in the long term) Lets separate them out to make it more ...
by raven15
Wed Apr 29, 2020 6:13 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

is this because rebalancing between TSM and SCV? Otherwise, i don't get how this would happen, volatility also implies sometimes you buy expensive. Nope. The same dollar buys proportionally more shares when things are cheap than when they are expensive, so SCV in isolation does it. Take TSM Fund A ...
by raven15
Wed Apr 29, 2020 5:56 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

There were two "aha" moments for me. One was when I was learning how to backtest in Portfolio Visualizer and after playing around I realized that by making regular new investments I would get better than market performance by investing in volatile small cap value stocks than by investing in a total...
by raven15
Wed Apr 29, 2020 5:45 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

There were two "aha" moments for me. One was when I was learning how to backtest in Portfolio Visualizer and after playing around I realized that by making regular new investments I would get better than market performance by investing in volatile small cap value stocks than by investing in a total...
by raven15
Wed Apr 29, 2020 5:23 pm
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 290
Views: 12779

Re: The Bottom Line on Factor Investing

There were two "aha" moments for me. One was when I was learning how to backtest in Portfolio Visualizer and after playing around I realized that by making regular new investments I would get better than market performance by investing in volatile small cap value stocks than by investing in a total ...
by raven15
Tue Apr 21, 2020 9:31 pm
Forum: Investing - Theory, News & General
Topic: Are Japan like "lost decades" possible in US and world stock market?
Replies: 82
Views: 8407

Re: Are Japan like "lost decades" possible in US and world stock market?

Real returns since 2000 have only been 2.8% annualized, less than half their historic average. We expect 20 year real returns to be 1/CAPE10 (I recall CAPE10 actually has its greatest predictive power for real returns 18 years later). 1/40= 2.5% so about right on target right? 8-) Yes, CAPE (and it...
by raven15
Tue Apr 21, 2020 9:24 pm
Forum: Investing - Theory, News & General
Topic: U.S. Treasury Inflation Protected Securities (TIPS) ETF
Replies: 78
Views: 6129

Re: U.S. Treasury Inflation Protected Securities (TIPS) ETF

I feel silly to say that I was wrong in looking back only as far as 2013 (that's the earliest date for some of the TIPS ETFs on portfoliovisualizer as noted on the original post). When using asset class function, I can see that TIPS have done remarkably well over the last 20 years. For example, wit...
by raven15
Tue Apr 21, 2020 7:35 pm
Forum: Investing - Theory, News & General
Topic: For those concerned about International Stocks...
Replies: 78
Views: 7245

Re: For those concerned about International Stocks...

between 1998 and 2013, the difference in CAGR is 25% vs 17%. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1998&firstMonth=1&endYear=2013&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted...
by raven15
Tue Apr 21, 2020 2:01 pm
Forum: Investing - Theory, News & General
Topic: Are Japan like "lost decades" possible in US and world stock market?
Replies: 82
Views: 8407

Re: Are Japan like "lost decades" possible in US and world stock market?

willthrill81 wrote:
Tue Apr 21, 2020 9:59 am
Real returns since 2000 have only been 2.8% annualized, less than half their historic average.
We expect 20 year real returns to be 1/CAPE10 (I recall CAPE10 actually has its greatest predictive power for real returns 18 years later). 1/40= 2.5% so about right on target right? 8-)
by raven15
Wed Apr 15, 2020 4:22 pm
Forum: Investing - Theory, News & General
Topic: whos' just about had it w/ SCV ?
Replies: 263
Views: 16757

Re: whos' just about had it w/ SCV ?

The only reasons I'm not shoveling money into the SCV hole faster is that 1) I don't have enough and 2) my asset allocation doesn't say to rebalance right now (although it said so twice in March).
by raven15
Wed Apr 15, 2020 3:25 pm
Forum: Investing - Theory, News & General
Topic: Harry Browne Permanent Portfolio Discussion (Cont'd)
Replies: 786
Views: 179572

Re: Harry Browne Permanent Portfolio Discussion (Cont'd)

Resurrecting this thread .......... I was reading up this weekend on how the permanent portfolio did recently -- not surprisingly, it has held up extremely well. I was thinking about a variation on the PP using NTSX (to sort of replace the stock component) and SWAN (to sort of replace the LTT compo...
by raven15
Tue Apr 14, 2020 6:33 pm
Forum: Personal Investments
Topic: International Growth (VWIGX) Outperformance
Replies: 28
Views: 1755

Re: International Growth (VWIGX) Outperformance

I split DW's 401k 50/50 between VWIGX and Primecap (VPMAX). I recall that VWIGX was the only international fund, and the only market-like US fund was S&P500, so I was like "might as well go all in." VWIGX has definitely been rocking the house in the 1.5 years since then, but we will shovel as much m...
by raven15
Mon Apr 13, 2020 4:28 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I don't like to present bad math, that's why I showed this: Here is a back test of Vanguard Long Term Treasury Admiral from December 1 2008 to November 30 2018 (ten years). The starting 2008 treasury yields were 3.22% for 30yr, 3.51% for 20 yr, 2.72% for 10yr. The ending 2018 treasury yields were 3...
by raven15
Sun Apr 12, 2020 9:37 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

As to backtesting in general: well, anything over the past half-century is skewed in favor of long Treasuries because of declining yields, now near zero with little room to provide further tailwinds. https://image.cnbcfm.com/api/v1/image/106413802-15837750747902020030810yrfrom1900.png?v=1583775102&...
by raven15
Sun Apr 12, 2020 5:56 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

And yes for a long term bond fund to beat EE rates definitely need to rise and then fall, or else end much lower than they are now. However, an EE bond owner would most likely not buy into a long term treasury fund in the situations where the fund would be best, because the yield would not cross th...
by raven15
Sun Apr 12, 2020 5:49 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

Take a 90% S&P500 10% bond portfolio with a 4% withdrawal rate starting in March 2000. Below are the results for short, intermediate, and long treasury bonds ending last month. For my two cents - I do not understand this comparison... I'm not comparing EE Bonds vs. stocks - or my overall portfolio....
by raven15
Sun Apr 12, 2020 5:43 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I note though that vineviz's calcaulation was for a 10+ year bond fund would have a shorter duration. I believe the odds of beating EE Bonds are much higher on the shorter end of the spectrum, which is why Vineviz started there. They could weigh in and confirm or dispute this - I don't want to spea...
by raven15
Sun Apr 12, 2020 5:33 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

But the rate is only part of the calculation... For most bond funds (except I and EE), their NAV (aka price per share) is impacted - inversely - with rate changes. So if you invest $10k in a normal bond fund - if interest rates go up - the "price" goes down - let's say to $9k. I think that's the po...
by raven15
Sun Apr 12, 2020 5:16 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

So far we have been only looking at CAGR returns, where an investor neither adds not withdraws money. That is something of a pet peeve of mine because in practice that pretty much never happens. For people who are adding money regularly for 20+years EE bonds are a poor and almost certainly detriment...
by raven15
Sun Apr 12, 2020 4:17 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

You say exotic, I say amazing. I am not at all saying they not mutually exclusive. I guess there is a 1 in 4 chance of VGLT doing better than EEs over 20 years, and a 1/3 chance of EDV doing better, where those are for scenarios where long term rates in 20 years are at or below their current rates....
by raven15
Thu Apr 09, 2020 2:50 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

We're straying now into longer-than-20-year-duration bonds. If those are on the table, well, EDV has an average duration of 25 years. Monthly SEC yields aside (because we have to-the-day numbers from the Treasury we can use that are more accurate) we see a yield of around 1.25%. https://www.treasur...
by raven15
Thu Apr 09, 2020 10:25 am
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

Still waiting (but losing hope) on someone presenting any plausible scenario in which EE Bonds lose to basically any duration of Treasuries for the next 20 years. On the upside, thinking through all of these scenarios has convinced me more than ever before they are a great deal. :beer From my examp...
by raven15
Wed Apr 08, 2020 4:53 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

Here is a back test of Vanguard Long Term Treasury Admiral from December 1 2008 to November 30 2018 (ten years). The starting 2008 treasury yields were 3.22% for 30yr, 3.51% for 20 yr, 2.72% for 10yr. The ending 2018 treasury yields were 3.30% for 30yr, 3.19% for 20yr, 3.01% for 10yr. The fund has ...
by raven15
Wed Apr 08, 2020 4:24 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

Here is a back test of Vanguard Long Term Treasury Admiral from December 1 2008 to November 30 2018 (ten years). The starting 2008 treasury yields were 3.22% for 30yr, 3.51% for 20 yr, 2.72% for 10yr. The ending 2018 treasury yields were 3.30% for 30yr, 3.19% for 20yr, 3.01% for 10yr. The fund has a...
by raven15
Wed Apr 08, 2020 11:03 am
Forum: Personal Investments
Topic: Follow Bernstein or Bogle
Replies: 99
Views: 7493

Re: Follow Bernstein or Bogle

The target retirement funds end in the Target Income Fund. That is a diverse fund that has 5 sub parts and is 70% bonds. You could just go to that right now.
by raven15
Tue Apr 07, 2020 10:07 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

If things get bad enough I have to cash them in early, well, we'll be scrounging for scraps in a post-apocalyptic wasteland anyway. I guess it would have happened in the 1930's. That was more of an intra-apocalyptic wasteland. Anyhow I thought we were not comparing assets in isolation? You seem to ...
by raven15
Tue Apr 07, 2020 8:19 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I laid out a variety of scenarios above for different yield trajectories over the next two decades. They all seem to favor EE Bonds. As for comparing stocks to bonds, I can't help you there. If you think stocks are a sure thing for any given 20-year period, you're on your own there. So far, all cas...
by raven15
Tue Apr 07, 2020 8:09 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

So to reiterate: at ~3.5%, EE Bonds have been among my best-returning bonds over the last decade. The only thing they clearly lost to was long-term Treasuries, and that only happened because yields went down - i.e. it was NAV return (which cannot repeat), not interest return. So far at exactly 1.2%...
by raven15
Tue Apr 07, 2020 4:54 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

The reality is that EE bonds are very risky. If you buy one and time goes forward you may find that it becomes progressively less risky and a better investment with time. However at the beginning of each 20 year period you cannot know the outcome and they are extremely risky, even riskier than stoc...
by raven15
Tue Apr 07, 2020 4:44 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I keep posting this chart, because it shows the trade-offs of different options clearly. EE Bonds held for 20 years starting now yield around 3.5% (not to mention being state tax exempt, having some cash-in flexibility after 20 years, etc...). Right now, other bond yields are all dismally low. If y...
by raven15
Tue Apr 07, 2020 3:40 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

This is the mistake of looking at assets in isolation; why not go with 80% stocks and 20% marketable bonds instead of EE bonds? Any money you need in less than 20 years would be better in shorter term bonds, and any you need in 20 years or more would be better in mostly stocks and probably a small ...
by raven15
Tue Apr 07, 2020 3:36 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I changed my mind a little. I started with the hypothesis that any addition of EE bonds was detrimental to the portfolio of every investor at every point in US history. It was detrimental for 1 year periods. It was detrimental for three year periods. It was detrimental to 20 and 5 and 10 and 30 yea...
by raven15
Tue Apr 07, 2020 3:14 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I changed my mind a little. I started with the hypothesis that any addition of EE bonds was detrimental to the portfolio of every investor at every point in US history. It was detrimental for 1 year periods. It was detrimental for three year periods. It was detrimental to 20 and 5 and 10 and 30 yea...
by raven15
Tue Apr 07, 2020 3:00 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I have a portfolio visualizer backtest which shows the past ten years. 20 year treasury bond rates were almost 3 times higher 10 years ago, and with current treasury rates so close to zero, personally I tend to question if a backtest of prior bond rates is necessarily relevant to current decisions....
by raven15
Tue Apr 07, 2020 11:29 am
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I changed my mind a little. I started with the hypothesis that any addition of EE bonds was detrimental to the portfolio of every investor at every point in US history. It was detrimental for 1 year periods. It was detrimental for three year periods. It was detrimental to 20 and 5 and 10 and 30 yea...
by raven15
Tue Apr 07, 2020 11:24 am
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I keep posting this chart, because it shows the trade-offs of different options clearly. EE Bonds held for 20 years starting now yield around 3.5% (not to mention being state tax exempt, having some cash-in flexibility after 20 years, etc...). Right now, other bond yields are all dismally low. If y...
by raven15
Tue Apr 07, 2020 11:19 am
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I changed my mind a little. I started with the hypothesis that any addition of EE bonds was detrimental to the portfolio of every investor at every point in US history. It was detrimental for 1 year periods. It was detrimental for three year periods. It was detrimental to 20 and 5 and 10 and 30 yea...
by raven15
Mon Apr 06, 2020 12:48 pm
Forum: Investing - Theory, News & General
Topic: Why not go EE bonds (instead of bond funds)?
Replies: 176
Views: 11321

Re: Why not go EE bonds (instead of bond funds)?

I changed my mind a little. I started with the hypothesis that any addition of EE bonds was detrimental to the portfolio of every investor at every point in US history. It was detrimental for 1 year periods. It was detrimental for three year periods. It was detrimental to 20 and 5 and 10 and 30 year...