Search found 3878 matches

by alex_686
Mon Nov 12, 2018 10:30 am
Forum: Investing - Help with Personal Investments
Topic: Noob asset question
Replies: 5
Views: 537

Re: Noob asset question

Got it. So valuing the property at the full value Zillow give me is too high, due to the cost of moving the asset. If I reassess the value of the property by 30%, I'm a log closer to what I think is reasonable. This is correct - valuation is tricky and subjective - better to be conservative. Howeve...
by alex_686
Sun Nov 11, 2018 9:39 pm
Forum: Investing - Theory, News & General
Topic: Fidelity class change calculation. Numbers seem off, unless NAVs have extra decimal places.
Replies: 20
Views: 1082

Re: Fidelity class change calculation. Numbers seem off, unless NAVs have extra decimal places.

I often see dividend value per share with many decimal places, though when reinvesting it seems they are bought at an NAV in whole cents. In this case NAV itself seemed to have extra decimal places for just one "special" day. No, they calculate the NAV to 6 to 8 digits every day. If you have access...
by alex_686
Sun Nov 11, 2018 8:18 pm
Forum: Investing - Theory, News & General
Topic: Fidelity class change calculation. Numbers seem off, unless NAVs have extra decimal places.
Replies: 20
Views: 1082

Re: Fidelity class change calculation. Numbers seem off, unless NAVs have extra decimal places.

It has been a few years since I worked in fund accounting, but I think the regulations say you have to calculate the NAV to either 6 or 8 digits. This is important when you are reinvesting dividends. Now, just because you calculate it out to 6 digits does not mean you have to report it.
by alex_686
Sun Nov 11, 2018 7:57 pm
Forum: Investing - Help with Personal Investments
Topic: What? I'm a Vanguard Owner?
Replies: 10
Views: 1647

Re: What? I'm a Vanguard Owner?

The non-profit nature sounds great, and in general over the years Vanguard has been a leader in cost reductions. I don't think Vanguard is a non-profit, or even a not-for-profit. If it were they would have to publish certain reports that they make to the IRS - like how much the managers are paid. T...
by alex_686
Sun Nov 11, 2018 7:58 am
Forum: Personal Finance (Not Investing)
Topic: Admiral share class for total world stock
Replies: 20
Views: 1557

Re: Admiral share class for total world stock

I doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future. Evidence is mixed. On the one hand, Vanguard launched the multifactor fund this year with admiral and etf share classes. On the other hand, Vanguard launche...
by alex_686
Sat Nov 10, 2018 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: Admiral share class for total world stock
Replies: 20
Views: 1557

Re: Admiral share class for total world stock

DartThrower wrote:
Sat Nov 10, 2018 5:26 pm
I guess I'm curious about the process by which Vanguard makes the decision to offer Admiral shares.
I doubt that Vanguard will every offer Admiral shares again. The ETF structure is cheaper to run a mutual fund structure. ETFs are the future.
by alex_686
Sat Nov 10, 2018 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: Noob asset question
Replies: 5
Views: 537

Re: Noob asset question

Yes, put your real estate stuff into the REIT bucket. Because of the specific risk and liquidity issues surrounding real estate, one usually gives directly held real estate a 20% to 40% haircut when calculating ones asset allocation. You should also give your direct real estate holdings a rather lar...
by alex_686
Sat Nov 10, 2018 4:04 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Index Fund Admiral Shares Question
Replies: 21
Views: 2069

Re: Vanguard Index Fund Admiral Shares Question

I would chose the one that had the greatest likelihood of meeting my goals.

There is not a whole lot of difference between the 2. iirc S&P 500 makes up 80% to the total market index. I would lean towards total market because in theory the market basket is the most efficient.
by alex_686
Sat Nov 10, 2018 10:23 am
Forum: Investing - Help with Personal Investments
Topic: Natural Disasters and Annuities
Replies: 3
Views: 501

Re: Natural Disasters and Annuities

Annuities are insurance products, and thus only offered by insurance companies. That being said, most of your fears are off base. I am going to simplify a bit, but all of your annuity payments goes into a segregated account designated for just that product. In theory the payments into this segregate...
by alex_686
Sat Nov 10, 2018 8:53 am
Forum: Investing - Theory, News & General
Topic: P/E Ratios - US vs International
Replies: 19
Views: 1390

Re: P/E Ratios - US vs International

So, just to chine in one more time - P/E ratios do not indicate if a market is cheap or not. PE ratios packs in both risk, return, and growth metrics into a single number. For example, DM and EM looks cheap to the US for different reasons.
by alex_686
Fri Nov 09, 2018 5:20 pm
Forum: Investing - Theory, News & General
Topic: P/E Ratios - US vs International
Replies: 19
Views: 1390

Re: P/E Ratios - US vs International

It has been a while, but when I last checked 3 years ago there was not a lot of difference between the 2. If you are scratching your head over that, consider size, sector, and leverage (risk). You need to adjust for that to get an apples to apples comparison. May I ask exactly what you are trying to...
by alex_686
Fri Nov 09, 2018 4:55 pm
Forum: Investing - Theory, News & General
Topic: Good explanation of how bond funds don't get crushed in rising rate environment
Replies: 64
Views: 6004

Re: Good explanation of how bond funds don't get crushed in rising rate environment

All else being equal. If you are hoping to make money in an intermediate term bond fund, are you hoping for the price to go up or the yield to go up? 2 points. Risk and return are linked. Bonds have 2 primary forms of risk, principle risk and interest rate risk. If you squeeze on one side the risk ...
by alex_686
Fri Nov 09, 2018 4:45 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy during the last stock market decline
Replies: 41
Views: 3514

Re: Strategy during the last stock market decline

Rebalance in bands I will mildly counter that a yearly calendar rebalance is better. The fewer times you peak the less you will freak. Quarterly works as well. Anything beyond that and you are hitting the marginal returns of a rebalance strategy. Honestly, from a pragmatic viewpoint it does not mak...
by alex_686
Thu Nov 08, 2018 3:08 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited ~200k cash. 27-28y/o. Want to go to grad school/medical school. Want to invest in real estate right now.
Replies: 19
Views: 2355

Re: Inherited ~200k cash. 27-28y/o. Want to go to grad school/medical school. Want to invest in real estate right now.

I would do grad school or real estate, but not both - or at least not right now. I think getting 7% to 10% return on a passive real estate deal is optimistic. It is a possibility for a active investor - somebody who is willing to hazard their capital and spend their time on their project. However, i...
by alex_686
Wed Nov 07, 2018 2:52 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Question/Help
Replies: 12
Views: 1020

Re: Asset Allocation Question/Help

I'm invested quite a bit in stocks (91%) at 62. Too much? I really won't need the income upon retirement but wondering if I should not move some monthly stock investments (about 10k) to cash or other(?) as opposed to selling. Move reinvestment CG, Div, Interest to cash funds? First, figure out your...
by alex_686
Wed Nov 07, 2018 12:49 pm
Forum: Investing - Theory, News & General
Topic: Good explanation of how bond funds don't get crushed in rising rate environment
Replies: 64
Views: 6004

Re: Good explanation of how bond funds don't get crushed in rising rate environment

In terms of mitigating risk, does a bond index mitigate rising rates by having multiple durations? Just curious about the mechanics of a bond index more for my own knowledge. No. Bond funds tend to pick 1 of 3 different structures: Level: Hold a equal amount of short, intermediate and long term bon...
by alex_686
Wed Nov 07, 2018 11:37 am
Forum: Investing - Theory, News & General
Topic: Good explanation of how bond funds don't get crushed in rising rate environment
Replies: 64
Views: 6004

Re: Good explanation of how bond funds don't get crushed in rising rate environment

As a counter argument, why would they get crushed in a rising rate environment? Everybody knows that rates are rising. These expected rate increases are already baked into bond prices. It is straight forward to extracted market expectation and the distribution of those expectations. All you need is ...
by alex_686
Wed Nov 07, 2018 11:32 am
Forum: Investing - Help with Personal Investments
Topic: Bond prices drop but their yields go up??
Replies: 22
Views: 2619

Re: Bond prices drop but their yields go up??

(Confusingly, by a strict definition, TBM is an "active" fund. Rather than slavishly following a specific index, Vanguard feels it is actually better to construct a portfolio with *around* the characteristics of the index, but without having to hold many bonds in the index which are of low liquidit...
by alex_686
Tue Nov 06, 2018 1:13 pm
Forum: Investing - Theory, News & General
Topic: Actively Managed Bond Funds
Replies: 24
Views: 1569

Re: Actively Managed Bond Funds

There is modest evidence that a semi-active bond portfolios beat out passive indexing after fees by 10 to 30 bps. The trick is that bond indexes only cover about 10% of the actively traded market and ignores the 70% where trading is low to non-existential. A semi-active manager can replicate the fac...
by alex_686
Sat Nov 03, 2018 8:24 am
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4325

Re: Bonds vs CDs

CDs are bonds. Yes, a special type of bond issued by a bank. I’m not sure it matters to the OP, but it’s worth being accurate. CDs are not a “special type of bond”. They are a form of savings account. You aren’t loaning the money to anyone when you purchase a CD, you are depositing your money in a ...
by alex_686
Fri Nov 02, 2018 4:33 pm
Forum: Investing - Theory, News & General
Topic: "Individual investors should have access to Private Equity"
Replies: 46
Views: 3403

Re: "Individual investors should have access to Private Equity"

Why should the government tell me who I should be doing business with? To protect people, just like the USDA and meat. The securities industry has a long history for abusing its clients. Also, as my compliance manager said - never sell anything to a grandmother, they always win in court. The are so...
by alex_686
Fri Nov 02, 2018 2:22 pm
Forum: Personal Consumer Issues
Topic: Engineering school
Replies: 66
Views: 4819

Re: Engineering school

South Dakota State University - for embedded chips and systems.

Which might bring a different dimension to your search. Many student change majors, so also consider what other aspects your child needs.
by alex_686
Fri Nov 02, 2018 10:22 am
Forum: Investing - Theory, News & General
Topic: no dividends in index funds!
Replies: 95
Views: 9143

Re: no dividends in index funds!

If you need the extra $500, then sell $500 worth of holdings. As mentioned above, it's like taking the money out of your wallet (the investment account) and putting it into your pocket (the cash account). Or, if you don't really need it, then it's like enforced extra savings :happy Just keep it the...
by alex_686
Fri Nov 02, 2018 10:08 am
Forum: Investing - Theory, News & General
Topic: What is an "advanced" investor?
Replies: 34
Views: 2562

Re: What is an "advanced" investor?

As a novice, I can change a light bulb without any "advance" electrical engineering training. One can be a Boglehead without advance training. However, there is a good amount of theory behind Bogleheads and passive investing, such as: Investment Theory. This implies also economic and behavioral theo...
by alex_686
Fri Nov 02, 2018 9:34 am
Forum: Investing - Theory, News & General
Topic: no dividends in index funds!
Replies: 95
Views: 9143

Re: no dividends in index funds!

Dividend policy is irrelevant to a stock’s total return I believe. Think there was a Nobel prize involved in that work. Dividends tend to be a not so great proxy for value stocks. The nice thing, I would think, about avoiding dividend stocks, is that one can decide when to sell and experience the c...
by alex_686
Thu Nov 01, 2018 10:20 am
Forum: Investing - Help with Personal Investments
Topic: 401k has high fees
Replies: 15
Views: 1079

Re: 401k has high fees

Read your plan documents, but I strongly suspect that the answer is no.

I am also guessing that the high fees is because your employer is having you pay for the administration fees. Many employers pay these fees but they can pass them on.
by alex_686
Thu Nov 01, 2018 6:43 am
Forum: Investing - Theory, News & General
Topic: Bonds vs CDs
Replies: 39
Views: 4325

Re: Bonds vs CDs

CDs are bonds. Yes, a special type of bond issued by a bank. CDs are simple and offer certainty. Some people confuse that with low risk, or at least a lower risk than a bond fund. Unless you are doing "liability matching" this is not true. CDs are not bad, but I would gently nudge you towards a bond...
by alex_686
Wed Oct 31, 2018 8:27 pm
Forum: Investing - Theory, News & General
Topic: How faithful must index funds be?
Replies: 9
Views: 779

Re: How faithful must index funds be?

There are some index funds that do not hold all the stocks in their index. They hold a subset of the stocks which will very closely correlate to the performance of the index. This type of fund may have more flexibility. Some index funds are managed to be tax efficient. They too might have more flex...
by alex_686
Wed Oct 31, 2018 7:15 pm
Forum: Investing - Theory, News & General
Topic: How faithful must index funds be?
Replies: 9
Views: 779

Re: How faithful must index funds be?

Does the fund manager have an "emergency release valve" that can be used to dump the stuck and go against the index? Or does he have to wait until it formally gets dropped from the index before selling it? No. They have to follow the index. The prospectus gives fund managerd legal cover to diversge...
by alex_686
Wed Oct 31, 2018 3:11 pm
Forum: Investing - Theory, News & General
Topic: Is market cap weighting a dumb idea?
Replies: 64
Views: 2974

Re: Is market cap weighting a dumb idea?

Just saw a Tweet storm by Meb Faber. He argues that market cap weighting is a dumb idea, by showing that the largest stocks in the S&P500 have massively underperformed the index: Ah, the glory of data mining. Chose a different start date and you will see that the largest stocks have out preformed t...
by alex_686
Wed Oct 31, 2018 2:32 pm
Forum: Investing - Theory, News & General
Topic: Large cap value, small cap, mid cap, etc. index funds
Replies: 15
Views: 988

Re: Large cap value, small cap, mid cap, etc. index funds

While many Bogleheads use a three-fund portfolio, there is nothing inherent in the Boglehead investment philosophy that dictates the use of only three funds. Let me extend on this a bit. The "neutral" position is to hold the market basket at the market cap weight. There is a fair amount of evidence...
by alex_686
Wed Oct 31, 2018 8:58 am
Forum: Investing - Help with Personal Investments
Topic: Buy Treasury bond direct vs. ETF
Replies: 3
Views: 322

Re: Buy Treasury bond direct vs. ETF

First, BND has a duration of about 6 and the 10 year treasury has a duration of 9. So a 10 year is much riskier, so it carries a higher yield. Second, I am not sure which 10 year treasury bond you are looking at, but I suspect you are looking at a "premium" bond. If a bond's par (value at maturity) ...
by alex_686
Tue Oct 30, 2018 9:49 pm
Forum: Investing - Help with Personal Investments
Topic: Using Cash as actual Bond Allocation?
Replies: 15
Views: 1713

Re: Using Cash as actual Bond Allocation?

goodenyou wrote:
Tue Oct 30, 2018 8:56 pm
Does inflation also eat away at bonds paying 2% nominal?
Who knows the future? Currently the breakeven between the 10 year nominal Treasry and TIPS is 2.06%. So, no - it would not.
https://fred.stlouisfed.org/series/T10YIE
by alex_686
Tue Oct 30, 2018 7:19 pm
Forum: Investing - Help with Personal Investments
Topic: Using Cash as actual Bond Allocation?
Replies: 15
Views: 1713

Re: Using Cash as actual Bond Allocation?

I didn’t realize that a longer CD is essentially considered a bond past the 1 year mark. This belongs in the same camp as "are cash bonds". I come from a formal compliance background so that is coloring my thinking. In short, if a instrument guarantees its principle, is liquid, and has a maturity o...
by alex_686
Tue Oct 30, 2018 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: Using Cash as actual Bond Allocation?
Replies: 15
Views: 1713

Re: Using Cash as actual Bond Allocation?

Cash is a bond with a duration of zero. I am not a real fan of cash. Inflation will eat away at its value. I would modestly push towards a higher allocation in bonds. Note, any CD with over 1 year to maturity is a bond. Not a fan of CD ladders either, but it is better than cash. So let me ask - why ...
by alex_686
Tue Oct 30, 2018 2:26 pm
Forum: Investing - Theory, News & General
Topic: Vanguard/Blackrock value index funds bias themselves to low growth, and not necessarily high risk, firms
Replies: 28
Views: 2440

Re: Vanguard/Blackrock value index funds bias themselves to low growth, and not necessarily high risk, firms

DFA doesn't do this. A value stock is a value stock to DFA (basically) because it has a low price/book. They don't force it to also have low earnings growth rankings. This means their funds should do a better job capturing average differences in risk, not earnings growth. Although even better would...
by alex_686
Tue Oct 30, 2018 11:56 am
Forum: Investing - Help with Personal Investments
Topic: Changing Asset Allocation Based On Market Forecasts - Market Timing?
Replies: 7
Views: 709

Re: Changing Asset Allocation Based On Market Forecasts - Market Timing?

There is no way to choose an asset allocation without having some expectations about future asset returns, future asset volatility, and future correlations between assets: clearly WHAT those expectations are should influence our portfolio construction, savings rates, etc. Several times, though, Kin...
by alex_686
Tue Oct 30, 2018 9:46 am
Forum: Investing - Help with Personal Investments
Topic: nobody can time the market ... but is it a bad idea to be tech ETF ?
Replies: 12
Views: 1205

Re: nobody can time the market ... but is it a bad idea to be tech ETF ?

' tech is the future ' Pssst, everyone already knows that. To extend that a bit, can you buy tech at a reasonable price? The price levels of tech companies are somewhere between high to frothy to bubble territory. As somebody who lived though the dot.com bubble and bust of the 2000s, just because t...
by alex_686
Mon Oct 29, 2018 8:08 pm
Forum: Investing - Theory, News & General
Topic: Dividend yields
Replies: 7
Views: 1019

Re: Dividend yields

What you are missing is the increase in asset prices. Let us say that a company is worth $100 and has a $10 dividend. So a 10% yield. The company reprices to $200 but the economics remain the same. So $10 dividend, a 5% yield. The current market has fairy high asset prices. It assumes that "Required...
by alex_686
Sat Oct 27, 2018 5:24 pm
Forum: Investing - Help with Personal Investments
Topic: Why not utilize leveraged ETF's?
Replies: 41
Views: 3850

Re: Why not utilize leveraged ETF's?

It appears that with "longer" time frames and under some market dynamics (as from 2008 to 2018) the leveraged ETFs can do well. Perhaps the previous thinking that these should not be buy-and-hold investments should be reconsidered? Perhaps I have made a mistake or missed something in obtaining thes...
by alex_686
Sat Oct 27, 2018 5:12 pm
Forum: Personal Consumer Issues
Topic: Indoor Play toys for toddler
Replies: 31
Views: 1775

Re: Indoor Play toys for toddler

A dog. Hours of fun as the little one chases the dog around and around the house. Plus it grows as the child grows. They can read the dog stories, learn responsibilities, walk them around the block. etc. Plus, as a added bonus, the dog will help clean up any spills the child makes. Get one made out ...
by alex_686
Fri Oct 26, 2018 4:42 pm
Forum: Investing - Theory, News & General
Topic: DFA small value... acitve management?
Replies: 103
Views: 6157

Re: DFA small value... acitve management?

It is interesting is that funds that track the S&P 600 Small-Cap Value Index are more aligned with the new focus on quality than DFA funds have been in the past. The liquidity and profitability screens of the S&P600 index family are a form of quality screen (but does not include the investment fact...
by alex_686
Fri Oct 26, 2018 4:15 pm
Forum: Personal Consumer Issues
Topic: Indoor Play toys for toddler
Replies: 31
Views: 1775

Re: Indoor Play toys for toddler

Nearly A Moose wrote:
Fri Oct 26, 2018 4:07 pm
If you do a lot of cooking, Google Ikea hack Montessori Learning Tower. Or buy a premade one like it.
I will second this. We got a premade one.
by alex_686
Fri Oct 26, 2018 4:11 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking guidance to begin an Investment Portfolio
Replies: 8
Views: 606

Re: Seeking guidance to begin an Investment Portfolio

I am considering Schwab's Intelligent Portfolio, which is like a Robo advisor with access to a CFP, and charges .28% fee. They are using only EFT's...and is kind of bit scary to allocate all in EFT's.... Welcome to the forum. First, what do you find scary to allocate everything to ETFs? ETFs are ab...
by alex_686
Thu Oct 25, 2018 7:40 pm
Forum: Investing - Theory, News & General
Topic: DFA small value... acitve management?
Replies: 103
Views: 6157

Re: DFA small value... acitve management?

Were they expressing recency bias or outright giving up on the idea that the size and value factors are persistent and pervasive across all markets? First, when pressed by questioners if the factor premiums were stable or if they were losing power, the presenter really danced around the issue. Like...
by alex_686
Thu Oct 25, 2018 6:41 pm
Forum: Investing - Help with Personal Investments
Topic: Does an exchange from VFIAX (S&P500, sold at a short-term capital loss) to VTSAX (Russel 3000) consitute a wash sale?
Replies: 6
Views: 399

Re: Does an exchange from VFIAX (S&P500, sold at a short-term capital loss) to VTSAX (Russel 3000) consitute a wash sale

I believe the Russel 3000 is a superset of S&P500 (i.e., it includes all the shares that the S&P500 has) but also an additional 2500 medium cap companies. Is that "substantially similar"? This subject has been kicked around at lot at bogleheads. The IRS has specially never issued guidance on what "...
by alex_686
Thu Oct 25, 2018 6:24 pm
Forum: Investing - Theory, News & General
Topic: DFA small value... acitve management?
Replies: 103
Views: 6157

Re: DFA small value... acitve management?

That is my understanding as well. Many deep value stocks are ones where the market has drastically repriced the risk of future revenue being delivered causing a big drop in stock price. A momentum screen would delay buying those until the negative momentum had dissipated. Conversely, when a value s...
by alex_686
Thu Oct 25, 2018 6:19 pm
Forum: Investing - Theory, News & General
Topic: DFA small value... acitve management?
Replies: 103
Views: 6157

Re: DFA small value... acitve management?

Although the original question is about DFA Small Cap Value, many responses have discussed various indices. As I recall, the new Fidelity zero funds will invest in indices developed by Fidelity. DFA seems to develop their own indices for various market segments. Fidelity seems to be following the s...
by alex_686
Thu Oct 25, 2018 4:39 pm
Forum: Investing - Theory, News & General
Topic: Number of market participants in stocks and bonds
Replies: 6
Views: 615

Re: Number of market participants in stocks and bonds

Sure, then banks and non-banking financial companies (NBFCs)? (However, this seems to be the original quote. ) You make a good point that most trading is actually done by brokers or computers. But I seem to be not closer to understand how many people are involved on the "virtual trading floor" on a...
by alex_686
Thu Oct 25, 2018 1:21 pm
Forum: Investing - Theory, News & General
Topic: Number of market participants in stocks and bonds
Replies: 6
Views: 615

Re: Number of market participants in stocks and bonds

How many institutions (banks, shadow banks) trade on a typical day? All - None. First, drop the term "shadow banks". It is not applicable in this situation. What it means is when corporations turn to financial markets instead of traditional banks for financing. It is "shadow banking" because the le...