Search found 2454 matches

by alex_686
Thu Oct 19, 2017 3:16 pm
Forum: Investing - Theory, News & General
Topic: UVXY and contango questions
Replies: 5
Views: 288

Re: UVXY and contango questions

You can get the info directly from the horses mouth. http://www.cboe.com/products/vix-index-volatility/vix-options-and-futures/vix-index Or from Wiki https://en.wikipedia.org/wiki/VIX A future is a special type of forward. A forward is when you agree to sell X at $Y dollars at time Z. Watch the film...
by alex_686
Thu Oct 19, 2017 2:53 pm
Forum: Investing - Theory, News & General
Topic: Do Index ETFs and Mutual Funds mute the diversification value of their diverse holdings?
Replies: 5
Views: 343

Re: Do Index ETFs and Mutual Funds mute the diversification value of their diverse holdings?

This point is often brought up on Bogleheads. As long as the market is efficient - as in the efficient market hypothesis - the answer is no. What matters is if the individual securities are priced correctly. For this to happen we need price discovery which means we need some active trades - from day...
by alex_686
Thu Oct 19, 2017 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: [What happens if TD Ameritrade goes bankrupt?]
Replies: 6
Views: 997

Re: Paranoiac question

Yes, paranoid. But it is a good and valid question to ask. This happened a lot during prior to the 1950s. Since then regulation of back office functions have been heavily regulated and audited. I can't think of the last time something like this happened. One weird edge case during the 90s involving ...
by alex_686
Thu Oct 19, 2017 1:44 pm
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

There is a reason why the Vanguard website lists VTSAX as a 4 and VTIAX as a 5 on a risk scale (from 1-5). Yeah, but is it currency risk? If so, how important? The VTIAX skews small cap, value, and emerging market - all of these factors carries a higher risk. Is currency the thing that shifts it fr...
by alex_686
Thu Oct 19, 2017 1:29 pm
Forum: Investing - Theory, News & General
Topic: Is a crash coming soon?
Replies: 62
Views: 4841

Re: Is a crash coming soon?

Secondly, the longest period in US history without a big recession is 10 years. But in the 80s and 90s we saw a 18 year bull market. The unscientific part of your post rings true. There will always be bulls and bears talking about the market. Point of order, in 1987 on this day we had a slight dip ...
by alex_686
Thu Oct 19, 2017 12:58 pm
Forum: Investing - Theory, News & General
Topic: Is a crash coming soon?
Replies: 62
Views: 4841

Re: Is a crash coming soon?

Jacky817 wrote:
Thu Oct 19, 2017 12:54 pm
Secondly, the longest period in US history without a big recession is 10 years.
But in the 80s and 90s we saw a 18 year bull market. The unscientific part of your post rings true. There will always be bulls and bears talking about the market.
by alex_686
Thu Oct 19, 2017 12:46 pm
Forum: Investing - Theory, News & General
Topic: UVXY and contango questions
Replies: 5
Views: 288

Re: UVXY and contango questions

1. It is the annualized volatility. It is useful - it is one of the tools in my tool box that I use to measure risk. 2. Black Scholes can up with a formula to price options. A unobserved input is volatility. If you know what a option is priced at you can derived out its volatility. The VIX is the vo...
by alex_686
Thu Oct 19, 2017 9:15 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

In the long run, I see the currency risk as small enough for me to consider it a wash. My stock allocation is 60/40 US/International, and it doesn't bother me one bit. Just my two cents. Those close to or in retirement are much more sensitive to short-term currency movements than those with long in...
by alex_686
Thu Oct 19, 2017 9:08 am
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation with Farm Land
Replies: 15
Views: 962

Re: Asset Allocation with Farm Land

It is a research problem to see how individual investors like most of us should configure a portfolio to include assets such a real estate, land, even gold in a portfolio. The one point of agreement is that alternative assets are certainly not stocks or bonds and should not be treated as if they we...
by alex_686
Thu Oct 19, 2017 8:41 am
Forum: Investing - Help with Personal Investments
Topic: Relationship Between Price of VFIAX and S&P 500 Level
Replies: 5
Views: 392

Re: Relationship Between Price of VFIAX and S&P 500 Level

And if you submit a trade after 4 p.m. ET, do you get the following day's VFIAX closing price (and a price that matches the closing level of the S&P 500 on the following day)? No, the S&P 500 is a platonic ideal, existing only in a spreadsheet, spared of all the real world issues that involve runni...
by alex_686
Wed Oct 18, 2017 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Is a doctor's practice one of the safest and most profitable businesses?
Replies: 58
Views: 3372

Re: Is a doctor's practice one of the safest and most profitable businesses?

9. Veterinarian Services This makes me suspect that a Doctor's practice is not the most successful type of businesses. IIRC, when that list was published, veterinarian clinics had to be owned by a veterinarian. A restricted trade. If not a monopoly then a oligopoly. I know that veterinarians can ma...
by alex_686
Wed Oct 18, 2017 3:26 pm
Forum: Investing - Help with Personal Investments
Topic: High fee funds
Replies: 12
Views: 949

Re: High fee funds

If the fund has shown outperformance over a long period of time, why would you not keep it? While few and far between, there are some funds that have done quite well. Because past performance is not predictive of future performance. Well, not quite true. Funds that have underperformed tend to conti...
by alex_686
Wed Oct 18, 2017 1:16 pm
Forum: Investing - Help with Personal Investments
Topic: If someone held a gun to your head, and force u to gamble whether the S&P 500 will rise or fall tomorrow, what do u say?
Replies: 45
Views: 2152

Re: If someone held a gun to your head, and force u to gamble whether the S&P 500 will rise or fall tomorrow, what do u

The stock market averages up so I would bet up, so the market skews up. However it does have a fat tail. When it goes down it really goes down. So average would be up but there would be huge error bars for a 1 day prediction. Over 10 years the error bars would fall, but...
by alex_686
Wed Oct 18, 2017 12:42 pm
Forum: Investing - Help with Personal Investments
Topic: High fee funds
Replies: 12
Views: 949

Re: High fee funds

What are you getting for your high fees? The answer is not past performance - the past is the past and does not indicate future performance. There are some strategies out there that I might be willing to pay for - mostly in bonds. PIMCO's Income Fund, junk bonds, etc. small cap EM, Long / Short, and...
by alex_686
Wed Oct 18, 2017 11:20 am
Forum: Investing - Help with Personal Investments
Topic: Finding a 1965 (year) Mutual Fund Today
Replies: 3
Views: 397

Re: Finding a 1965 (year) Mutual Fund Today

My friend has been sitting on this forever and finally was coaxed into waking up to see what he might have. I know...it's not very Bogleheadish to buy an investment and ignore it for 52 years....or maybe it is? Benign neglect. Actually, benign neglect is very Bogleheadish. I am going to guess 2 thi...
by alex_686
Wed Oct 18, 2017 10:08 am
Forum: Investing - Theory, News & General
Topic: Help me Understand: Guide to Investing Book Chart
Replies: 6
Views: 650

Re: Help me Understand: Guide to Investing Book Chart

For a income of $1,000 per year - that is from retirement to your death - you need $21,122 invested at the time of your retirement. The first number is a flow number - dollars per year. Your car's miles per gallon is a flow number. The second number is a stock number - a fixed amount at a certain ti...
by alex_686
Tue Oct 17, 2017 12:08 pm
Forum: Investing - Theory, News & General
Topic: R/E Investing Approaches: Bogleheads vs MMM vs BiggerPockets?
Replies: 7
Views: 916

Re: R/E Investing Approaches: Bogleheads vs MMM vs BiggerPockets?

I don't think Bogleheads have a real estate investing approach per se. There are posters on this forum who own real estate to varying degrees and in various forms. In general the forum itself is "about" mutual fund investing in Vanguard funds so there wouldn't be a particular point of view about ot...
by alex_686
Tue Oct 17, 2017 11:48 am
Forum: Personal Finance (Not Investing)
Topic: Grandparents want to give to grandkids
Replies: 33
Views: 2933

Re: Grandparents want to give to grandkids

They mentioned they would retain control of the money as the custodial until they felt the children were ready to recieve the funds. My understanding of custodial accounts is that at 21 they have full access to the funds regardless of whether or not the custodian deems they are ready for the money....
by alex_686
Tue Oct 17, 2017 11:33 am
Forum: Investing - Theory, News & General
Topic: Does bond length matter for investing in bond funds?
Replies: 20
Views: 1590

Re: Does bond length matter for investing in bond funds?

While the Long Term fund has higher returns and has a smaller expense ratio. But people often recommend against investing in long-term bonds? The last 10 years have been exceptionally good for long term bonds. The longer the maturity the higher the duration, the higher the duration. With rates fall...
by alex_686
Tue Oct 17, 2017 11:27 am
Forum: Personal Finance (Not Investing)
Topic: Grandparents want to give to grandkids
Replies: 33
Views: 2933

Re: Grandparents want to give to grandkids

529 plans would be my first choice. If the grandparents wanted to do a UTMA I would be fine with that. In my experience, children having access to their own money is a maturing experience. If their money is controlled by somebody else they can shift responsibilities, and hence consequences, to a 3rd...
by alex_686
Tue Oct 17, 2017 8:55 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

Historical there has been a 1% volatility in inflation adjusted FX rates in developed markets. For equities that does not constitute one of the major risk factors. Where did you find that 1% volatility in currency? I found previously in this thread (https://www.bogleheads.org/forum/viewtopic.php?f=...
by alex_686
Mon Oct 16, 2017 6:40 pm
Forum: Investing - Theory, News & General
Topic: How to learn about financial statement analysis?
Replies: 17
Views: 1215

Re: How to learn about financial statement analysis?

Find some old CFA books and study them. I would second this. It is a little bit on the overkill side of things. However the CFA curriculum covers many areas and does an excellent job of integrating different study topics. For example, how to adjust financial statements to get a better economic pict...
by alex_686
Mon Oct 16, 2017 12:23 pm
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

In practice, the more volatile the currency pair, the greater the cost of hedging. I am going to have to disagree with you here. You hedge by entering into forward contracts and their cost is basically zero. The forward price is driven by interest rate differentials between the 2 currencies. The bi...
by alex_686
Mon Oct 16, 2017 11:27 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

One other thought. In theory one should hold a percentage of foreign stocks to get the maximum mean grievance portfolio. I believe his to be more or less the global market weight for 2 reasons. First, as international markets have increased integration the correlation between domestic and foreign ma...
by alex_686
Mon Oct 16, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

In practice, the more volatile the currency pair, the greater the cost of hedging. I am going to have to disagree with you here. You hedge by entering into forward contracts and their cost is basically zero. The forward price is driven by interest rate differentials between the 2 currencies. The bi...
by alex_686
Mon Oct 16, 2017 11:15 am
Forum: Investing - Theory, News & General
Topic: Currency risk?
Replies: 39
Views: 1867

Re: Currency risk?

Generally investing in currencies is held to be zero sum. You get increased volatility, for no extra return. Do you have any idea why that is the case? Just looking at some historical performance, it appears to be very time dependent. I would agree that if you averaged in on many investors over ver...
by alex_686
Fri Oct 13, 2017 1:46 pm
Forum: Investing - Help with Personal Investments
Topic: Need help with current market (voo,vti)
Replies: 48
Views: 2000

Re: Need help with current market (voo,vti)

Not using any type of metric just saying market is very optimistic and afraid of investing in both voo and vti only to later depreciate in value "rookie here" so just wondering if I should just buy both? I do have a vanguard account and have a few other ETF's I want to buy. There is not much differ...
by alex_686
Fri Oct 13, 2017 1:07 pm
Forum: Investing - Help with Personal Investments
Topic: Need help with current market (voo,vti)
Replies: 48
Views: 2000

Re: Need help with current market (voo,vti)

True, I just dont want to risk buying high and then later it dips real low in price, so I was thinking bonds and then stocks? I have read a few books and I believe in the buy low sale high but I want to buy and hold until retirement but still buy low. I feel we need to make this recurring question ...
by alex_686
Fri Oct 13, 2017 12:21 pm
Forum: Investing - Help with Personal Investments
Topic: Large lump sum-how to invest
Replies: 5
Views: 626

Re: Large lump sum-how to invest

Lump sum is the rational answer. There is no logical reason why one should not implement your optimal asset allocation imminently.

DCA addresses behavioral and cognitive issues. Lack of discipline, fear of regret, etc.
by alex_686
Wed Oct 11, 2017 6:36 pm
Forum: Investing - Theory, News & General
Topic: Offensive Valuations
Replies: 45
Views: 4099

Re: Offensive Valuations

Why in the world would I buy more shares of this "business" (S&P 500) right now, at a multiple of twice the historical average? ... Now I know the market is psychological/behavioral game, but everything screams "CAUTION". By "twice the historical average" you imply that the P/E ratio is incorrect a...
by alex_686
Wed Oct 11, 2017 4:11 pm
Forum: Investing - Theory, News & General
Topic: Factor investing: should financial firms be excluded when screening for value?
Replies: 31
Views: 1453

Re: Factor investing: should financial firms be excluded when screening for value?

I am very confused. Sorry to confuse you - All I was trying to say was that: book value +/- adjustments = assets I would take the opposite side if book value is important. It can be manipulated. For some industries, like banking, it is a important measure. For others it less important. The predicti...
by alex_686
Wed Oct 11, 2017 12:40 pm
Forum: Investing - Theory, News & General
Topic: Factor investing: should financial firms be excluded when screening for value?
Replies: 31
Views: 1453

Re: Factor investing: should financial firms be excluded when screening for value?

Thanks, I really enjoy reading Howard Marks' letters so I'll try that. But according to Investopedia, Book value is also the net asset value of a company, calculated as total assets minus intangible assets (patents, goodwill) and liabilities. So according to this definition, it's the same as how yo...
by alex_686
Wed Oct 11, 2017 9:40 am
Forum: Investing - Theory, News & General
Topic: Factor investing: should financial firms be excluded when screening for value?
Replies: 31
Views: 1453

Re: Factor investing: should financial firms be excluded when screening for value?

Thanks nedsaid! This has given me the opportunity to look up some balance sheets - something I am begining to teach mysef to read. Please excuse me if I say something silly - I am a complete beginner in this - I just wanted to confirm one thing: are 'book value' and 'stockholders equity' the same? ...
by alex_686
Tue Oct 10, 2017 10:44 pm
Forum: Investing - Theory, News & General
Topic: Why is inflation so low? Moore's law?
Replies: 27
Views: 3572

Re: Why is inflation so low? Moore's law?

That doesn't really make sense. Increased productivity should cause a decreased demand for labor, not the opposite. My recollection was in the 90's you really didn't see the productivity boom but post 2000 you started to for a number of years. Increased productive can cut both ways. You may be thin...
by alex_686
Tue Oct 10, 2017 8:30 pm
Forum: Investing - Theory, News & General
Topic: Factor investing: should financial firms be excluded when screening for value?
Replies: 31
Views: 1453

Re: Factor investing: should financial firms be excluded when screening for value?

Business have an additional "going concern" value. It is sort of like Newton's laws of motion. What is in motion tends to stay in motion. They have established brands, loyal customers, competitive advantages. These and other things like intellectual property are difficult for accountants to measure...
by alex_686
Mon Oct 09, 2017 7:27 pm
Forum: Investing - Theory, News & General
Topic: 100% in bond to wait for market crash?
Replies: 122
Views: 11719

Re: 100% in bond to wait for market crash?

Alex, Somewhat in year 2000 , the P/E is 45 right before the market went down, and 1929 when P/E reach almost 35 and it crash due to it's too expensive make a lot of people nervous and sell in panic. I do think it has something to do with high P/E with a market correction. I wish I know how to post...
by alex_686
Mon Oct 09, 2017 6:56 pm
Forum: Investing - Theory, News & General
Topic: 100% in bond to wait for market crash?
Replies: 122
Views: 11719

Re: 100% in bond to wait for market crash?

hi Alex-686, the idea is to avoid the big lost for now and eventually will move most of the fund back to the total stock market index in taxable. I have invested in my 401k as well which having 90% stock currently with $250k. No, I understand what you are saying. Let me counter with a different ide...
by alex_686
Mon Oct 09, 2017 6:14 pm
Forum: Investing - Theory, News & General
Topic: 100% in bond to wait for market crash?
Replies: 122
Views: 11719

Re: 100% in bond to wait for market crash?

1. Historically speaking, PE don't have any predicative power if the market is about to crash. 2. 2.3% is about the expected inflation over the next 10 years. So you want to get a expected real return of 0% for ??? I understand the emotion behind your statement. Just understand that the is no logic ...
by alex_686
Mon Oct 09, 2017 5:08 pm
Forum: Investing - Help with Personal Investments
Topic: Please define "cash"
Replies: 31
Views: 1972

Re: Please define "cash"

how about treasury bills and repos? Definitely fixed income :wink: These are all short term instruments and would be counted as cash in a annual report. If you consider the above as fixed income I would recommend that you treat your checking account as a fixed income bond fund with a duration of 0....
by alex_686
Mon Oct 09, 2017 5:06 pm
Forum: Investing - Help with Personal Investments
Topic: Please define "cash"
Replies: 31
Views: 1972

Re: Please define "cash"

Assets that are liquid and offer strong principle protection, even during times of crisis. Most of the time this captures savings, checking, and money market accounts (both at banks and and mutual funds - they are different beast even if the have the same name". Mutual funds count anything with a ma...
by alex_686
Mon Oct 09, 2017 5:02 pm
Forum: Investing - Help with Personal Investments
Topic: Rental properties in lieu of bond in AA?
Replies: 29
Views: 945

Re: Rental properties in lieu of bond in AA?

My 2 cents - rental properties historically have the same level of return and risk as a BBB bond. Same level of risk does not imply that they are correlated assets - real estate and bonds often move in different directions. Just that the level of risk is the same. This is also ignoring liquidation a...
by alex_686
Mon Oct 09, 2017 2:30 pm
Forum: Investing - Theory, News & General
Topic: bond "generalizations"
Replies: 4
Views: 452

Re: bond "generalizations"

"Duration" is a key concept that you should research. 1. Bond rates can be deconstructed a couple of ways, and are normally refereed to in spreads. Government bonds can be broken down by expected inflation and real rates. Corporate bonds have a additional credit, or default, spread. 2. This is based...
by alex_686
Mon Oct 09, 2017 12:34 pm
Forum: Investing - Theory, News & General
Topic: Why is inflation so low? Moore's law?
Replies: 27
Views: 3572

Re: Why is inflation so low? Moore's law?

Maybe. Inflation is caused when the supply of money increases faster than the demand for money. Technology is one piece of the puzzle but it can cut both ways. Technology does make things cheaper. Increases in technology can increase productive growth, causing GNP growth to increase, which can lead ...
by alex_686
Mon Oct 09, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: what to research on possible "too good to be true" ETF
Replies: 10
Views: 619

Re: what to research on possible "too good to be true" ETF

So, as long as investors, think more than 50% of the time, that the market will not be too volatile in the short term then this ETF will continue to increase? Whether or not the market IS actually very volatile or not..as long as most investors think for the short term it will not be..it would stil...
by alex_686
Mon Oct 09, 2017 10:11 am
Forum: Investing - Theory, News & General
Topic: what to research on possible "too good to be true" ETF
Replies: 10
Views: 619

Re: what to research on possible "too good to be true" ETF

The ETF is following the VIX index. https://en.wikipedia.org/wiki/VIX The VIX index - aka the fear index. First, read up on Black-Scholes model. https://en.wikipedia.org/wiki/Black%E2%80%93Scholes_model How do you price a option - call or put - on the S&P 500? You need a few inputs - price of the un...
by alex_686
Sun Oct 08, 2017 12:45 pm
Forum: Investing - Help with Personal Investments
Topic: Shifting 100% Stock → 35% Stock & 65% Bonds / REITs
Replies: 52
Views: 6102

Re: Shifting 100% Stock → 35% Stock & 65% Bonds / REITs

I am working off of memory here. If REITs offer a slightly lower return and slightly lower volatility than the S&P 500 and if the correlation is about .7 then the optional holdings is somewhere between 10% to 20%. A note on mean variance portfolio optimization - it is very sensitive to inputs. Chan...
by alex_686
Sat Oct 07, 2017 10:30 am
Forum: Investing - Help with Personal Investments
Topic: Need for inflation protection w/SS and/or inflation-adjusted pensions?
Replies: 9
Views: 685

Re: Need for inflation protection w/SS and/or inflation-adjusted pensions?

The size of the TIPs market is 5% of the size of the total bond market in the United States. In this way, I feel that market has already voted on the need for inflation protection, and the answer was a qualified "no". Could you expand on this? My understanding is that the limiting factor is the sup...
by alex_686
Sat Oct 07, 2017 8:01 am
Forum: Investing - Theory, News & General
Topic: I'm thinking about cashing completely out of equites....
Replies: 75
Views: 8088

Re: I'm thinking about cashing completely out of equites....

I'm 56 years old and I have all the money I will ever need based on my lifestyle (boring). With the market overdue for a correction does it ever make sense to completely liqudate ones exposure to risk. I'm currently at a 50/50 mix. Thoughts? I don't think that make sense unless you have at least 10...
by alex_686
Fri Oct 06, 2017 4:57 pm
Forum: Personal Finance (Not Investing)
Topic: Sell or keep shares of a private company?
Replies: 39
Views: 2188

Re: Sell or keep shares of a private company?

You, like almost everybody else, is putting the cart before the horse. First, figure out your goals - from emergency fund to retirement. Then figure out your risk tolerance - both ability and willingness to take risks. Then figure out what your current assets are, including your human capital - i.e....
by alex_686
Fri Oct 06, 2017 1:24 pm
Forum: Investing - Help with Personal Investments
Topic: Return Assumptions over Next 15 years
Replies: 13
Views: 1109

Re: Return Assumptions over Next 15 years

deltaneutral83 wrote:
Fri Oct 06, 2017 1:22 pm
Do these projections include reinvested divs or not? I always see authors of these articles distinguish between real and nominal but not if the divs are reinvested.
Everything I have read uses total returns.