Search found 2553 matches

by alex_686
Mon Dec 11, 2017 2:25 pm
Forum: Investing - Help with Personal Investments
Topic: What's the case for including foreign developed & emerging markets with a 10-12 year outlook on retirement
Replies: 19
Views: 855

Re: What's the case for including foreign developed & emerging markets with a 10-12 year outlook on retirement

What’s the case for excluding foreign markets ? I will second that. Plus a note on back testing. DM and EM markets and companies have become a lot more normal over the past 20 years. Indexes tend to be dominated by megacap multinationals and megacap multinationals tend to act more like other megaca...
by alex_686
Mon Dec 11, 2017 12:27 am
Forum: Personal Finance (Not Investing)
Topic: 840 credit score Million dollar farm.. low income cannot get Heloc?
Replies: 64
Views: 4313

Re: 840 credit score Million dollar farm.. low income cannot get Heloc?

So.... yes.. I have a negative attitude about bankers in general.. and yes.. I fully understand that just a very small percentage of bad apples ruins the batch. I will generally laught at this. I feel your frustration but you are arguing against yourself. Credit tends to go in cycles. First it is t...
by alex_686
Mon Dec 11, 2017 12:14 am
Forum: Investing - Theory, News & General
Topic: Do ETFs have the same issue as mutual funds at year end (distributions)?
Replies: 3
Views: 534

Re: Do ETFs have the same issue as mutual funds at year end (distributions)?

Technically yes. They are both governed by the same rules and regulations. For dividends they are equlivent. For capital gains they are not. When mutual funds liquidate they sell, and selling is a taxable event. When ETFs liquidate, they swap ETF shares for the underlying assets. Swaps are not taxab...
by alex_686
Fri Dec 08, 2017 5:47 pm
Forum: Personal Finance (Not Investing)
Topic: 840 credit score Million dollar farm.. low income cannot get Heloc?
Replies: 64
Views: 4313

Re: 840 credit score Million dollar farm.. low income cannot get Heloc?

NINJA Loans were common before 2008. No Income, No Job, and No Assets. Your friend would fit this type of loan, he has assets but maybe not enough income. NINJA loans were one of the things that help cause the real estate blow up. Too many loans made to little old ladies who could never afford to re...
by alex_686
Thu Dec 07, 2017 12:36 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on Malkiel saying a world index maybe underweight countries like China?
Replies: 20
Views: 1092

Re: Thoughts on Malkiel saying a world index maybe underweight countries like China?

When you say that assets that are tradable on the market are not necessarily priced efficiently. My understanding of it is that whilst large chunks of these companies are owned by the Government ( say 50% government owned?), but are still freely traded on Shenzen and Shanghai markets (for the other...
by alex_686
Thu Dec 07, 2017 12:17 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on Malkiel saying a world index maybe underweight countries like China?
Replies: 20
Views: 1092

Re: Thoughts on Malkiel saying a world index maybe underweight countries like China?

First, a quick note on China's human rights issues. While that may be a valid reason to underweight China it is a subjective one. As such it does not fit well into investment theory or the reason why most indexes currently underweight China. I see the clear reason for float adjustment, but it does s...
by alex_686
Thu Dec 07, 2017 11:15 am
Forum: Investing - Theory, News & General
Topic: Thoughts on Malkiel saying a world index maybe underweight countries like China?
Replies: 20
Views: 1092

Re: Thoughts on Malkiel saying a world index maybe underweight countries like China?

Most indices to my knowledge are based on free float market capitalisation. Malkiel argues that this means China and other countries like it might be underweight, (arguing this on must recent version of Random Walk Down Wall St., and also in the google talk he gave : time stamped https://youtu.be/w...
by alex_686
Thu Dec 07, 2017 9:07 am
Forum: Investing - Help with Personal Investments
Topic: Analyzing Expense Ratios
Replies: 39
Views: 2126

Re: Analyzing Expense Ratios

What is the probability a small company (less than 20 employee's) will change their 401K plan? For me I don't plan on leaving this current job. The 401K plan that is currently in place is about 7 years old'ish? I would say decent. The break even point is probably 20+ years. What is the chance that ...
by alex_686
Wed Dec 06, 2017 7:46 pm
Forum: Investing - Help with Personal Investments
Topic: Analyzing Expense Ratios
Replies: 39
Views: 2126

Re: Analyzing Expense Ratios

To calculate the break even point you must count the employee match. So in year zero you get a 100% bonus. Then you need to estimate expected market returns less the expense ratio. Then it is just an exercise in algebra. Because of the match, the break even point is normally decades out. Probablity ...
by alex_686
Wed Dec 06, 2017 2:34 pm
Forum: Investing - Help with Personal Investments
Topic: Risk management
Replies: 8
Views: 717

Re: Risk management

What do you mean by "risk arbitrage"? It is a woolly concept, elastic enough to meet almost any speaker's definition. The short answer is "No". Banks can no longer borrow money cheaply to build up a inventory of assets to do risk arbitrage things. The longer answer, and the one you were asked, is "M...
by alex_686
Wed Dec 06, 2017 2:04 pm
Forum: Personal Finance (Not Investing)
Topic: CBOE to launch bitcoin futures trading on Dec 10, 2017
Replies: 12
Views: 809

Re: CBOE to launch bitcoin futures trading on Dec 10, 2017

There are many cash settled markets, which actually help the price discovery. In my case when i do the dispersion trading, I short the biotech index options(for example) and go long its component options, I am actually helping price discovery and liquidity I am not saying it won't help. I just thin...
by alex_686
Wed Dec 06, 2017 1:27 pm
Forum: Personal Finance (Not Investing)
Topic: CBOE to launch bitcoin futures trading on Dec 10, 2017
Replies: 12
Views: 809

Re: CBOE to launch bitcoin futures trading on Dec 10, 2017

Creating a synthetic betting instrument to speculate is actually a good thing. This asset is one way street up is because no one can short this thing till now. It provides liquidity to this market, which might dampen the volatility imo. Maybe. Many futures require physical delivery. i.e., on the da...
by alex_686
Wed Dec 06, 2017 12:15 pm
Forum: Investing - Theory, News & General
Topic: Understanding the differences in Investing
Replies: 10
Views: 988

Re: Understanding the differences in Investing

Ahh thank you. I knew i was missing something. You are absolutely correct, the real test would be a down market although most of these did go through the 2008 recession, however that was 1 year and then we had 9 solid years of positive returns. Assuming if the downtrend was over a longer period the...
by alex_686
Wed Dec 06, 2017 11:48 am
Forum: Investing - Theory, News & General
Topic: Understanding the differences in Investing
Replies: 10
Views: 988

Re: Understanding the differences in Investing

I understand the point that i had selected two of the strongest sectors, however i did the same analysis for all of the Fidelity Funds, and 8 out of 10 seem to have exceeded the returns of the S&P anywhere from $4-10K. FYI, I prefer annualized percentage returns, not dollar returns. Easier to compa...
by alex_686
Wed Dec 06, 2017 11:18 am
Forum: Personal Finance (Not Investing)
Topic: CBOE to launch bitcoin futures trading on Dec 10, 2017
Replies: 12
Views: 809

Re: CBOE to launch bitcoin futures trading on Dec 10, 2017

Practically, what does this change? Does this allow big institutional money into the mix? Is it the first step towards creation of etfs and other regulated investment vehicles? Futures are normally used for hedging or leveraged exposure to the price of an asset by anyone who wants that. I don't thi...
by alex_686
Tue Dec 05, 2017 10:04 pm
Forum: Investing - Theory, News & General
Topic: Corporate & Treasury Bonds: Where's the risk?
Replies: 21
Views: 1934

Re: Corporate & Treasury Bonds: Where's the risk?

So the point basically is that the duration of the aggregate US bond market is historically high, so the downside risk to the overall bond market due to a relatively large increase in yields is historically high. I wouldn't characterize this as an "existential risk", and the M* article did not use ...
by alex_686
Tue Dec 05, 2017 9:53 pm
Forum: Investing - Theory, News & General
Topic: Understanding the differences in Investing
Replies: 10
Views: 988

Re: Understanding the differences in Investing

Thanks for the comments. On point 6 I am a little confused as the diffence in performance is $18k and $16k respectively over a 10 year period. I am looking specifically at your second chart. IIf there were any type of calculation errors - initial inputs off, reinvested dividends not calculated just...
by alex_686
Tue Dec 05, 2017 3:27 pm
Forum: Investing - Theory, News & General
Topic: Understanding the differences in Investing
Replies: 10
Views: 988

Re: Understanding the differences in Investing

Let us try to unpack this a bit. You have gotten superior performance for a couple of reasons. 1. You have selected outstanding portfolio managers. This is a bit tricky. So as you have stated, past performance does not indicate future performance. Funds that charge higher fees tend to have better gr...
by alex_686
Tue Dec 05, 2017 1:26 pm
Forum: Investing - Theory, News & General
Topic: How would you value a business if you considered investing in it
Replies: 18
Views: 1364

Re: How would you value a business if you considered investing in it

Once you have the EBITDA it is a multiple of that number dependent upon the size of the business and the type of the business. If it is a smaller business you can get an idea of the numbers and multiples by looking at what is for sale on bizbuysell. The correct answer is to calculate the discounted...
by alex_686
Mon Dec 04, 2017 10:09 pm
Forum: Personal Finance (Not Investing)
Topic: How my FIL saved for college
Replies: 13
Views: 1704

Re: How my FIL saved for college

Wow! Does that mean bank interest rates and stock returns were also abnormally high in order to make that kind of borrowing rate seem normal? The trick was that inflation was in the double digits. Historically rates were not that high once you factored out inflation,. Not saying that life was a bow...
by alex_686
Mon Dec 04, 2017 7:25 pm
Forum: Investing - Theory, News & General
Topic: Formula to figure Roth or Traditional
Replies: 10
Views: 807

Re: Formula to figure Roth or Traditional

There is a formula and it is pretty simple. If you want me to find the exact formulation I can but the short of it is: The tax drag of a Roth IRA is your current tax rate. This is easy to figure out. The tax drag of a Traditional IRA is your future tax rate. This is harder to estimate. Who knows wha...
by alex_686
Sun Dec 03, 2017 9:34 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 166
Views: 8940

Re: One answer to the Dividend stocks puzzle from behavioral finance

Another factor which the author did not address is that how a person is first introduced to investing also carries a lot of weight regarding their ability to change. I don't know of any studies on how people were introduced to investing per se. There are articles out there that people who started i...
by alex_686
Fri Dec 01, 2017 4:59 pm
Forum: Investing - Theory, News & General
Topic: BH philosophy on restricted stock units and employee stock purchase program?
Replies: 27
Views: 1268

Re: BH philosophy on restricted stock units and employee stock purchase program?

Concerning the employee stock purchase program I would suggest to pass on it. That it doesn't allow you to sell immediately and only a 15% discount means it isn't a good deal. The potential fluctuation over a 1 year period far outweighs the 15% discount. The 15% discount is a very normal, nothing s...
by alex_686
Fri Dec 01, 2017 4:40 pm
Forum: Investing - Help with Personal Investments
Topic: Complete Beginner to investing, 24 years old
Replies: 15
Views: 1412

Re: Complete Beginner to investing, 24 years old

Goals and Risk Tolerance Everybody wants to talk about asset allocation and about stocks. All very sexy and pointless until you have addressed the above 2 issues. It is o.k. it you goals and risk tolerance are a bit hazy at this point. I am sure you will rewrite them over time. But you need a place ...
by alex_686
Fri Dec 01, 2017 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

Yes, but what about: if the stock prices go down, you have to wait until they go back up. With a house, you still get consistent cash flow during the period that you can actually use to invest in other things during that time? Doesn't this beat out stocks any time? Do you? The big difference is not...
by alex_686
Fri Dec 01, 2017 1:58 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

No - because one does not invest for appreciation for either a home or stock. The value of any investment is the discounted cash flow to equity. That seems like more of an academic statement than an empirical observation. Plenty of people have bought Tesla and Netflix stock for appreciation. Sure, ...
by alex_686
Fri Dec 01, 2017 1:10 pm
Forum: Investing - Help with Personal Investments
Topic: Is investing in the stock market just like investing in a house for appreciation?
Replies: 33
Views: 1247

Re: Is investing in the stock market just like investing in a house for appreciation?

No - because one does not invest for appreciation for either a home or stock. The value of any investment is the discounted cash flow to equity. For stocks this normally means dividends. In the most common example, stock prices increase when those dividends become more valuable. This can be because ...
by alex_686
Thu Nov 30, 2017 12:04 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Dividend Trivia [qualified vs non-qualified]
Replies: 3
Views: 233

Re: Mutual Fund Dividend Trivia

Yes, but then again I programmed systems to calculate QDI / DRD for mutual fund payouts. There are a few more wrinkles. Dividends can be non-qualified for many reasons. REITs kick off most non-qualified dividends, but a small portion of their dividends are qualified and other companies can kick off ...
by alex_686
Wed Nov 29, 2017 3:46 pm
Forum: Investing - Help with Personal Investments
Topic: Certified Deposits [Certificates of Deposit - CDs]
Replies: 22
Views: 2278

Re: Certified Deposits [Certificates of Deposit - CDs]

Im not very familiar with the product but It looks like you could use inflation swaps to add inflation protection to a CD. Might be worth considering as an alternative to TIPS since CDs often offer premium interest rates. IIRC, swaps are restricted to institutional investors. Plus nominal value ten...
by alex_686
Mon Nov 27, 2017 11:08 pm
Forum: Investing - Theory, News & General
Topic: Value Investors vs. S&P 500
Replies: 24
Views: 3019

Re: Value Investors vs. S&P 500

Sorry, I should have typed out equity risk premium. I think that is a missaplicatioon of the principle. IIRC Required Return - Risk Free Rate + (Beta * Equity Risk Premiium). Equity Risk Premium is the risk premium for the market, not for a individual security. To try to tie this back, Value stocks...
by alex_686
Mon Nov 27, 2017 7:04 pm
Forum: Investing - Theory, News & General
Topic: Value Investors vs. S&P 500
Replies: 24
Views: 3019

Re: Value Investors vs. S&P 500

So would you say that value investors are mostly getting higher returns from higher ERP in a mostly efficient market? I am not familiar with the acronym "ERP" but I suspect not. There is a wide ranging debate on this subject but I am with the side that value premium has evaporated. i.e., a value po...
by alex_686
Mon Nov 27, 2017 4:52 pm
Forum: Investing - Theory, News & General
Topic: Value Investors vs. S&P 500
Replies: 24
Views: 3019

Re: Value Investors vs. S&P 500

2 points on Value. There are a couple of different ways to define "Value". The most common way is to divided a index into 2 halves - a value half and a growth half. So yes, most value funds are going to look like half of the S&P 500. Value does not say anything about about large cap verse small cap....
by alex_686
Mon Nov 27, 2017 4:28 pm
Forum: Investing - Help with Personal Investments
Topic: Certified Deposits [Certificates of Deposit - CDs]
Replies: 22
Views: 2278

Re: Certified Deposits

It is "Certificates of Deposit" or CDs. Yes, your deposits are insured up to 250k by FDIC. This is by person, not by account. Read up on that if you get close because the details matter. CDs are a special class of bonds. Many people here on Boggleheads favor CDs. I hate to do a blanket statement - T...
by alex_686
Fri Nov 24, 2017 10:44 am
Forum: Investing - Help with Personal Investments
Topic: Slanting International geographically or regionally
Replies: 25
Views: 1131

Re: Slanting International geographically or regionally

How would you know if you are slanted regionally anyways? What tool or metric would you use to analyze your portfolio that would tell you that? And why would you believe such a tool, calculator, or metric anyways? I am going to take this argument in a slightly different direction. Investing in Euro...
by alex_686
Thu Nov 23, 2017 9:45 pm
Forum: Investing - Theory, News & General
Topic: Why does everyone keep increasing their international stock %?
Replies: 101
Views: 8766

Re: Why does everyone keep increasing their international stock %?

These authors are just shifting closer towards world market-cap weighting, which makes perfect sense. Some may have arguments based on inflated P/E ratios in the US too, but you don't need to go there to justify the shift. The critical bit is not the world market cap weighted, but the fact that wor...
by alex_686
Tue Nov 21, 2017 4:42 pm
Forum: Investing - Help with Personal Investments
Topic: Are CDs within investment accounts the same as when you invest through bank?
Replies: 24
Views: 2265

Re: Are CDs within investment accounts the same as when you invest through bank?

So it sounds like it would be safer to open up an IRA at my bank and roll over this money from Fidelity, so that I can then buy a CD directly and only have to worry about an early withdrawal penalty? No, their just fine. You will need to check the fine print but most CDs are insured by the FDIC at ...
by alex_686
Tue Nov 21, 2017 4:28 pm
Forum: Personal Finance (Not Investing)
Topic: Selling Farm Land - What next?
Replies: 11
Views: 880

Re: Selling Farm Land - What next?

Thanks to both. We certainly would retain counsel to determine 1031 qualification and requirements due to the $$ amount. My brother is also a real estate attorney and will be advising on the transaction as well. That is half of the equation, dotting the i's and crossing the t's. The other half is f...
by alex_686
Tue Nov 21, 2017 4:17 pm
Forum: Personal Finance (Not Investing)
Topic: Selling Farm Land - What next?
Replies: 11
Views: 880

Re: Selling Farm Land - What next?

How are you going to avoid taxes with that sizeable gain? https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-code-section-1031 Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an e...
by alex_686
Sun Nov 19, 2017 10:59 am
Forum: Investing - Theory, News & General
Topic: is Amazon a monopoly?
Replies: 15
Views: 795

Re: is Amazon a monopoly?

I think we are on the edge of acceptable posting topics but I will try to answer. Having a dominate market position does not automatically translate into being a monopoly. IIRC the company also has to abuse their dominate position. Bullying customers and suppliers in unrelated markets. Microsoft int...
by alex_686
Fri Nov 17, 2017 3:27 pm
Forum: Investing - Theory, News & General
Topic: Monte Carlo Analysis VS Historical Rolling Periods
Replies: 28
Views: 2115

Re: Monte Carlo Analysis VS Historical Rolling Periods

There are 2 problems with using historical rolling periods. The first is that there are secular changes in how the market works. Think of the market structures that drive the market - these change slowly over time. The economy, companies, and investors of the 1950s are not those of the 1980s or of t...
by alex_686
Fri Nov 17, 2017 3:17 pm
Forum: Investing - Help with Personal Investments
Topic: Current precarious equity environment for a retiree
Replies: 43
Views: 3396

Re: Current precarious equity environment for a retiree

Dachshund, I am not exactly against market trimming exactly. If the market's expectations of risk and return bounce around, but one's risk tolerance is static, one should update their AA to match expectations. The problem that we currently face is that the market is expecting a long period of low re...
by alex_686
Wed Nov 15, 2017 4:48 pm
Forum: Investing - Theory, News & General
Topic: Luxury Index Funds
Replies: 12
Views: 1717

Re: Luxury Index Funds

Here is a question. How good - in the technical sense - are creating the best AA for yourself? How discipline are you in rebalancing your portfolio? I am very good at both so I DIY. Most people are not. For them "Luxury" - and I don't consider them "Luxury" - are well worth it.
by alex_686
Wed Nov 15, 2017 12:03 pm
Forum: Personal Consumer Issues
Topic: Favorite Holiday Recipes
Replies: 48
Views: 3950

Re: Favorite Holiday Recipes

This is our new holiday recipe favorite, Mary Berry's Apple & Almond Cake Recipe. It is from The Great American Baking Show which is the US version of the British Baking show. It makes a nice cake and uses almond flour instead of regular flour. http://abc.go.com/shows/the-great-american-baking-show/...
by alex_686
Wed Nov 15, 2017 10:46 am
Forum: Investing - Theory, News & General
Topic: Dangers of a Broker
Replies: 7
Views: 1176

Re: Dangers of a Broker

In the case of DeGiro, they are able to lend out your ETFs up to 30% though so if both their clients and they went bankrupt you might lose up to 30% with a "normal" account in the absolute worst case. I believe this lending out is how they make most of their money, apart from the cheap but high vol...
by alex_686
Wed Nov 15, 2017 9:39 am
Forum: Investing - Theory, News & General
Topic: Improving returns on total bond market without changing the risk profile
Replies: 8
Views: 1191

Re: Improving returns on total bond market without changing the risk profile

Isn't the fundamental theory that you can't get more reward without taking more risk? That if you somehow found an inefficiency and effectively beat the market by getting more reward for the same risk, then the market is pretty efficient and will tend to self-correct and remove that "free money" an...
by alex_686
Tue Nov 14, 2017 10:18 pm
Forum: Investing - Theory, News & General
Topic: Improving returns on total bond market without changing the risk profile
Replies: 8
Views: 1191

Re: Improving returns on total bond market without changing the risk profile

What analysi? The author did not provided much. He found a particular period where a particular weighting outperformed. Was this due to fundamental casual factors or just the luck of the draw? He references the fact that there are many buckets. I don't know why this is important. I don't see the ter...
by alex_686
Sat Nov 11, 2017 10:35 pm
Forum: Investing - Help with Personal Investments
Topic: AA: Should I List Junk Bond Fund Under Stocks or Bonds?
Replies: 12
Views: 783

Re: AA: Should I List Junk Bond Fund Under Stocks or Bonds?

Bond. Historically it has acted more like a bond, and I would guess in today's interest rate environments this would be doubly so. Where are you getting your info that it acts more like a stock? I would break it out into its own catagoey before I would included it in equity. FYI I stock preferred st...
by alex_686
Fri Nov 10, 2017 5:38 pm
Forum: Investing - Help with Personal Investments
Topic: Individual Stocks
Replies: 22
Views: 1513

Re: Individual Stocks

Thanks for chiming in. How many stocks do you need for a good sample? My guess would be 50. The election polls usually have samples of 1,200 likely voters or something like that. I know of the techniques to pick the 20 or so stocks to replicate the S&P 500. Election polls assume that the sample siz...
by alex_686
Fri Nov 10, 2017 4:47 pm
Forum: Investing - Theory, News & General
Topic: How much does diligent rebalancing add to a portfolio?
Replies: 35
Views: 2398

Re: How much does diligent rebalancing add to a portfolio?

There is another factor that we have not talked about there, how we rebalance and the type of market we are in. There are concave and convex rebalancing options out there. Each of these rebalances risk but in different ways. Concave, or having a fixed asset allocation, does best in a osculating mark...
by alex_686
Fri Nov 10, 2017 4:00 pm
Forum: Investing - Help with Personal Investments
Topic: Individual Stocks
Replies: 22
Views: 1513

Re: Individual Stocks

Right now, I have 18 stocks in my brokerage IRA. Over time, it has varied from 15-20 stocks. The exception was when I was starting out, I had one! But I branched out over time and 15-20 seems to be optimal for a small investor. Plus most of my stocks are well-known names that you will recognize. Pr...