Search found 3706 matches

by alex_686
Mon Sep 24, 2018 10:19 am
Forum: Investing - Theory, News & General
Topic: Are Government Back Bonds or FDIC Insured accounts more at risk of Default?
Replies: 4
Views: 220

Re: Are Government Back Bonds or FDIC Insured accounts more at risk of Default?

It is almost impossible to pull these 2 risks apart. Technically banks and the FDIC have their own pools of capital that would carry them though if US Treasuries defaulted. The problem here is that a large chunk of those reserves are in US Treasuries. I would give a slight edge to banks and the FDIC...
by alex_686
Mon Sep 24, 2018 10:09 am
Forum: Personal Consumer Issues
Topic: Where are the hybrid or fully electric two seater commuting vehicles?
Replies: 23
Views: 429

Re: Where are the hybrid or fully electric two seater commuting vehicles?

As others have posted, there are quite a few intriguing vehicles out there. I doubt any will make it. Two seaters means sport cars. Fast and fun, in particular if we are talking about open top. I think there is a viable niche market here, but it is not going to be for a commuting vehicle. Or at leas...
by alex_686
Fri Sep 21, 2018 9:31 pm
Forum: Investing - Help with Personal Investments
Topic: Stable Value Similat to What Bond Fund
Replies: 9
Views: 733

Re: Stable Value Similat to What Bond Fund

There really is nothing similar to a stable value fund. This is particularly true if you use portfolio visualized. Even short term bond funds dipped in 2008. Stable funds did not.
by alex_686
Fri Sep 21, 2018 4:13 pm
Forum: Investing - Help with Personal Investments
Topic: treating all of investments as one asset allocation pool
Replies: 14
Views: 1369

Re: treating all of investments as one asset allocation pool

The primary benefit is that you don't use "Mental Accounting", a cognitive defect. You should be able to build a portfolio with a higher return and lower risk by combining your goals and risk tolerance into a unified structure. So kudos for you. The problem is a higher cognitive load. Doing this is ...
by alex_686
Fri Sep 21, 2018 3:22 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Forward P/E ratio - Are stocks highly valued?
Replies: 58
Views: 3694

Re: S&P 500 Forward P/E ratio - Are stocks highly valued?

I don't understand why the big proponents of CAPE believe that earnings from ten years ago have anything to do with what stocks will return ten years from now. Because for the S&P 500 index it does did a better job of predicting long term earnings growth than forward earnings over the next 10 years...
by alex_686
Fri Sep 21, 2018 2:43 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Forward P/E ratio - Are stocks highly valued?
Replies: 58
Views: 3694

Re: S&P 500 Forward P/E ratio - Are stocks highly valued?

I don't understand why the big proponents of CAPE believe that earnings from ten years ago have anything to do with what stocks will return ten years from now. Because for the S&P 500 index it does a better job of predicting long term earnings growth than forward earnings over the next 10 years. 2 ...
by alex_686
Fri Sep 21, 2018 11:26 am
Forum: Investing - Theory, News & General
Topic: S&P 500 Forward P/E ratio - Are stocks highly valued?
Replies: 58
Views: 3694

Re: S&P 500 Forward P/E ratio - Are stocks highly valued?

not incorporating interest rate levels to these types of valuation 'analysis' render them worthless. H Yes. Well sorta of. PE is a relative measure. If you are going to say it is high you have to say what it is high against, and you can't say "to itself". Interest rates are one of the more popular ...
by alex_686
Thu Sep 20, 2018 3:54 pm
Forum: Investing - Theory, News & General
Topic: Closed End Funds and Dividend Reinvestment Programs
Replies: 2
Views: 192

Re: Closed End Funds and Dividend Reinvestment Programs

How can CEFs keep paying dividends in shares? Seems like they would run out of any that are set aside for this. Do they do share buy backs or something? Just curious as I know a lot of these funds have been around for decades. Are we talking about dividend reinvestment programs? In that case the CE...
by alex_686
Thu Sep 20, 2018 3:33 pm
Forum: Investing - Theory, News & General
Topic: Watching for Dividend Ex-Date - any tips?
Replies: 13
Views: 909

Re: Watching for Dividend Ex-Date - any tips?

https://advisors.vanguard.com/web/c1/fas-investmentproducts/VPGDX/price This is interesting. I wonder how they pull it off. There is a disconcert between economic total returns and accounting income which can be exploited, plus there is the fund of funds structure. I wish I could pop off the hood a...
by alex_686
Thu Sep 20, 2018 3:30 pm
Forum: Investing - Help with Personal Investments
Topic: Would Stop Orders with ETFs protect against a downturn?
Replies: 21
Views: 1238

Re: Would Stop Orders with ETFs protect against a downturn?

To give more background: The amount I have to start with is small,20k. I’d add in another $750 or so each month. We have no debts, own a middle of the road house and a couple of reliable vehicles, have enough savings to cover emergencies and have the kids university money tucked away. I’ll be 50 so...
by alex_686
Thu Sep 20, 2018 2:22 pm
Forum: Investing - Help with Personal Investments
Topic: Would Stop Orders with ETFs protect against a downturn?
Replies: 21
Views: 1238

Re: Would Stop Orders with ETFs protect against a downturn?

I know that one danger of Stop Orders is that a sale might happen automatically and then the price goes up before you can buy back in - but I am thinking I would much rather be sitting on cash or pay the cost to get back in than to be down 30% because the market went crazy (again). Welcome to the f...
by alex_686
Thu Sep 20, 2018 2:15 pm
Forum: Investing - Theory, News & General
Topic: Watching for Dividend Ex-Date - any tips?
Replies: 13
Views: 909

Re: Watching for Dividend Ex-Date - any tips?

I don't think that's correct: managed payout funds can use ROC to keep distributions at their stipulated level, for instance. Can you point to one? Has the tax law been updated in the past 2 years? I remember being in too many meetings with accountants and portfolio managers debating the finer poin...
by alex_686
Thu Sep 20, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Are unleveraged real estate returns more comparable to stock market returns or just a notch above inflation?
Replies: 70
Views: 3590

Re: Are unleveraged real estate returns more comparable to stock market returns or just a notch above inflation?

I never did. Others mentioned REIT returns and I commented they underestimate total RE return, so we agree. Never mean to imply. It was just an aside on the thread that I tacked on at the end. As another aside, I have a hard time believing that established real estate properties have a return close...
by alex_686
Thu Sep 20, 2018 1:56 pm
Forum: Investing - Theory, News & General
Topic: Watching for Dividend Ex-Date - any tips?
Replies: 13
Views: 909

Re: Watching for Dividend Ex-Date - any tips?

The fund can certainly pay more and reclassify the excess as "return of capital", it is paying less than may cause loss of status. However, supplemental distributions can be made in the following year. No. The only way a fund can pay out a "Return of Capital" is if one of the underlying stocks paid...
by alex_686
Thu Sep 20, 2018 1:31 pm
Forum: Investing - Theory, News & General
Topic: Watching for Dividend Ex-Date - any tips?
Replies: 13
Views: 909

Re: Watching for Dividend Ex-Date - any tips?

...Before a fund can announce a dividend they have to know exactly how much income they have earned since the last announcement... I don't think this is correct... It is. I used to work in mutual fund accounting and help calculate these things. If a mutual fund issues a dividend that is more than i...
by alex_686
Thu Sep 20, 2018 1:10 pm
Forum: Investing - Theory, News & General
Topic: Watching for Dividend Ex-Date - any tips?
Replies: 13
Views: 909

Re: Watching for Dividend Ex-Date - any tips?

Not really. Funds are not obliged to pay quarterly dividends or give much of a advance notice. Actually, tax law discourages any type of announcement. Before a fund can announce a dividend they have to know exactly how much income they have earned since the last announcement. Do it wrong and you "bl...
by alex_686
Thu Sep 20, 2018 11:38 am
Forum: Investing - Help with Personal Investments
Topic: When or is an index to big?
Replies: 4
Views: 556

Re: When or is an index to big?

Is there a tipping point or sweet spot where the structure and organization of a fund loses it's peak effectiveness and becomes bloated or unwieldy and less effective? Indirect examples could be the "to big to fail" organizations just 10 years ago. Directly, no. Having worked in mutual fund operati...
by alex_686
Thu Sep 20, 2018 10:53 am
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs vs Traditional Mutual Funds
Replies: 5
Views: 418

Re: Vanguard ETFs vs Traditional Mutual Funds

On the other hand Vanguard could be rolling out new funds as ETFs first to accumulate AUM in the open market, then later roll out a mutual fund version that uses the ETF as a share class. Why would this be true? I can't think of any solid reasons why ETF or mutual funds would be better. Can you exp...
by alex_686
Thu Sep 20, 2018 10:38 am
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs vs Traditional Mutual Funds
Replies: 5
Views: 418

Re: Vanguard ETFs vs Traditional Mutual Funds

sport wrote:
Thu Sep 20, 2018 10:28 am
EyeDee wrote:
Thu Sep 20, 2018 10:21 am
Is this a sign that Vanguard is abandoning the traditional mutual fund holder who does not want to use ETFs?
Not likely.
I will take the opposite side. From Vanguard's perspective, ETFs are cheaper to run than mutual funds. Not much, but there are still cost savings.
by alex_686
Wed Sep 19, 2018 6:06 pm
Forum: Investing - Theory, News & General
Topic: Are unleveraged real estate returns more comparable to stock market returns or just a notch above inflation?
Replies: 70
Views: 3590

Re: Are unleveraged real estate returns more comparable to stock market returns or just a notch above inflation?

I read on the Economist just before the 2008 crash that housing prices historically grow just a bit over inflation. If you add renting on top of that it should be more than "just a notch". I am going to guess you were reading about the Case-Schiller index, which shows that family homes have had pri...
by alex_686
Wed Sep 19, 2018 4:31 pm
Forum: Investing - Theory, News & General
Topic: Why are there so few long-term investors?
Replies: 18
Views: 2741

Re: Why are there so few long-term investors?

asset_chaos wrote:
Wed Sep 19, 2018 4:27 pm
But if I had to guess, I would guess that the situation is closer to the latter than to the former.
It is the latter. Algorithmic trading has rapidly grown over the past 10 to 15 years. Think day-trading, but in milliseconds.
by alex_686
Wed Sep 19, 2018 4:23 pm
Forum: Investing - Help with Personal Investments
Topic: It seems simplke bot of course not! Benchmarking ...
Replies: 14
Views: 718

Re: It seems simplke bot of course not! Benchmarking ...

I have a 401(k) with Fidelity and I called them today. My question was very simple … over the past 5 years what has been the performance of my fully managed account … because 5 years ago I switched to this because I had no clue. She told me the 401(k) is up 11.36% over 1 year, 9.95% over 3 years an...
by alex_686
Wed Sep 19, 2018 3:58 pm
Forum: Investing - Help with Personal Investments
Topic: What can go wrong in shorting Tilray, and can EU investors short it (and how?)
Replies: 29
Views: 1246

Re: What can go wrong in shorting Tilray, and can EU investors short it (and how?)

I was on the margin desk during the dot.com boom and bust. A good lesson that I learned was that the market can stay irrational longer than you can stay liquid. I saw quite a few people bet against the dot.com boom, get crushed but the continuing irrational rise, have to close out their position and...
by alex_686
Wed Sep 19, 2018 2:25 pm
Forum: Investing - Theory, News & General
Topic: Advantage of Rebalancing for different asset allocations
Replies: 25
Views: 1430

Re: Advantage of Rebalancing for different asset allocations

If a 70/30 AA has higher expected return of a 100/0 AA, then let me take the “70” and allocate it 70/30. I think this is where you are tripping up. A 100/0 has a higher expected return than a 70/30 portfolio, but it may have a lower geometric expected return . You are also assuming a liner relation...
by alex_686
Wed Sep 19, 2018 12:58 pm
Forum: Investing - Theory, News & General
Topic: Why are there so few long-term investors?
Replies: 18
Views: 2741

Re: Why are there so few long-term investors?

Why are there so few long-term investors? Most funds and ETFs have such great turnover. Why do you think they have great turnovers? Most mutual funds and ETFs have constant inflows, outflows, and internal flows of cash. People deposit funds via their payroll every 2 weeks, retirees tanking funds ou...
by alex_686
Wed Sep 19, 2018 11:54 am
Forum: Investing - Theory, News & General
Topic: Advantage of Rebalancing for different asset allocations
Replies: 25
Views: 1430

Re: Advantage of Rebalancing for different asset allocations

If 70/30 outperforms 100/0 (by outperforming I mean it has higher expected return), wouldn’t 49/51 outperform 70/30 for the exact same reason ? Volility Drag = .5 * Variance or Returns Geometric Returns = Annual Returns - (.5 * Variance or Returns) A 49/51 portfolio would drop annual returns more t...
by alex_686
Wed Sep 19, 2018 9:32 am
Forum: Investing - Theory, News & General
Topic: Advantage of Rebalancing for different asset allocations
Replies: 25
Views: 1430

Re: Advantage of Rebalancing for different asset allocations

But leaves out a critical point. Well, maybe 2 The first portfolio probably has a higher annual return and a higher volility. The higher the volility, the lower the geometric returns. It is quite plausible that the second portfolio would have a higher return over 10 years. Off of the top of my head...
by alex_686
Tue Sep 18, 2018 6:53 pm
Forum: Investing - Theory, News & General
Topic: Advantage of Rebalancing for different asset allocations
Replies: 25
Views: 1430

Re: Advantage of Rebalancing for different asset allocations

Portfolio Visualizer will allow you to experiment with different rebalancing criteria. It can help but it can also hurt. It actually won't. Rebalancing benefits are depend on market conditions. Volility, correlation between asset types, and if the market is mean reverting. All of these factors are ...
by alex_686
Tue Sep 18, 2018 6:43 pm
Forum: Investing - Theory, News & General
Topic: Advantage of Rebalancing for different asset allocations
Replies: 25
Views: 1430

Re: Advantage of Rebalancing for different asset allocations

A portfolio that averages 7% return annually has already done better than one that averages 5%, assuming no new contributions. There is no way for the latter to outperform the former. obvious. But leaves out a critical point. Well, maybe 2 The first portfolio probably has a higher annual return and...
by alex_686
Tue Sep 18, 2018 2:46 pm
Forum: Investing - Theory, News & General
Topic: How often do cap weighted funds get adjusted?
Replies: 16
Views: 667

Re: How often do cap weighted funds get adjusted?

Also you can review the turnover % for each fund. 100% means the average asset is held 1 year. VT will be awfully close to 0%. An active trading fund could be well over 100%. The last reported turnover rate for VT (last October) was 9.9% . VTI's (US total stock) turnover rate was 3.1%. , and VXUS (...
by alex_686
Tue Sep 18, 2018 10:52 am
Forum: Investing - Theory, News & General
Topic: How often do cap weighted funds get adjusted?
Replies: 16
Views: 667

Re: How often do cap weighted funds get adjusted?

Unless a nation moves indexes it won’t drifr much at all. If EM becomes a bigger part of the global market then your EM fund will grow to be a bigger part of your homegrown VT. Or EMs have a higher capital formation than DM. i.e., more new issues. Or the flow of corporate mergers are unbalanced. i....
by alex_686
Tue Sep 18, 2018 10:37 am
Forum: Investing - Theory, News & General
Topic: How often do cap weighted funds get adjusted?
Replies: 16
Views: 667

Re: How often do cap weighted funds get adjusted?

If one were to build VT on their own, would be cap weight % of US stocks, DW stocks, EM stocks that are as close to the holdings of VT and let it roll. Only balancing would be for equities to bond proportions. And between US, DW, and EM stocks. The ratio between these 3 different class of stocks ca...
by alex_686
Tue Sep 18, 2018 9:54 am
Forum: Investing - Theory, News & General
Topic: How often do cap weighted funds get adjusted?
Replies: 16
Views: 667

Re: How often do cap weighted funds get adjusted?

Every index is different. Read the methodology papers associated with the index to figure out the exact impacts. They tend to fall into 2 classes. Most indexes update the stocks in the index each quarter. There is a decent lead time so nobody is surprised. Most are structured so there are no surpris...
by alex_686
Sun Sep 16, 2018 5:45 pm
Forum: Investing - Theory, News & General
Topic: Index funds - how do they work? Do passive funds reliant on active funds indirectly?
Replies: 15
Views: 1122

Re: Index funds - how do they work? Do passive funds reliant on active funds indirectly?

I will point out that the guys who launched the first passive index fund where students of the guy who came up with the Efficient Market Hypothesis, did their graduate work in EMH, and explicated pointed to EMH when marketing their fund. I think different market structures do create different outcom...
by alex_686
Wed Sep 12, 2018 3:48 pm
Forum: Personal Consumer Issues
Topic: 401k "advice" to my associates
Replies: 51
Views: 2088

Re: 401k "advice" to my associates

Max contribution might be stiff for a starting family - saving for a mortgage, student loans, new kids, etc. First, there is a fair amount of behavioral evidence that what works is to get people in the door with any contribution amount, and then get them to promise to increase their contribution rat...
by alex_686
Wed Sep 12, 2018 8:19 am
Forum: Investing - Theory, News & General
Topic: Can you time the forex market?
Replies: 10
Views: 659

Re: Can you time the forex market?

It is like timing the stock market, and maybe even worse. There are more and bigger players in the FX market than in the stock market. Very efficient and everybody reads the newspapers, government reports, and the gossip pages. There is some positive history in the carry trade - selling weak currenc...
by alex_686
Tue Sep 11, 2018 11:39 am
Forum: Investing - Help with Personal Investments
Topic: New Investor - Glad to meet you, and eager for advice!
Replies: 10
Views: 939

Re: New Investor - Glad to meet you, and eager for advice!

I would mostly agree with you on the emergency fund. Cash drag is cash drag - destined to under-preform inflation. So keep it small. My emergency fund consisting of: Taxable stocks. Highly liquid and tax efficient. I discounted the value by 50% to reflect the possibility that my emergency will happe...
by alex_686
Tue Sep 11, 2018 9:50 am
Forum: Investing - Theory, News & General
Topic: Questions about Bond Fund Price Efficiency
Replies: 11
Views: 575

Re: Questions about Bond Fund Price Efficiency

This is a fascinating tool. Presumably, the largest and savviest players would be able to direct bond trading prices based on their short-term projections of interest rate movements, commensurate to the mathematical values of the existing bonds in light of projected near-term rates. And, as you sta...
by alex_686
Mon Sep 10, 2018 3:53 pm
Forum: Investing - Help with Personal Investments
Topic: Investing in 5G Wireless
Replies: 44
Views: 2423

Re: Investing in 5G Wireless

To drag this back to something actionable to the OP. How do you plan on investing in 5G? I suspect either though the hardware side or the network side. The problem with either approach is the same as investing in any company. While the field may be experiencing, while the company is experiencing hig...
by alex_686
Sun Sep 09, 2018 9:24 pm
Forum: Investing - Theory, News & General
Topic: Put Options
Replies: 27
Views: 1158

Re: Put Options

The problem with puts is that the market is now pricing in the black swan-type scenarios you're describing. One of the ways Nassim Taleb made bucketfuls of money was because there was a gap between tail risk protection and the cost of insurance. There was a bit of a recent lull where being long vol...
by alex_686
Sun Sep 09, 2018 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: cap gains considerations for mergers
Replies: 2
Views: 173

Re: cap gains considerations for mergers

This is the way that most mergers are structured but read the fine print. The IRS has a fair number of regs in place that the merging companies must meet to qualify so you don't have to pay capital gains. There have been a few cases where the accountants failed to dot the i's and cross the t's or ot...
by alex_686
Sun Sep 09, 2018 5:11 pm
Forum: Investing - Theory, News & General
Topic: Questions about Bond Fund Price Efficiency
Replies: 11
Views: 575

Re: Questions about Bond Fund Price Efficiency

I now know what to study next and will take your suggestions. Thank you. oops - I forgot the link. https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html In rereading the posts, I am going to extend a little bit. One one side the bond market is huge and deep compared to the stock ma...
by alex_686
Sun Sep 09, 2018 4:03 pm
Forum: Investing - Theory, News & General
Topic: Questions about Bond Fund Price Efficiency
Replies: 11
Views: 575

Re: Questions about Bond Fund Price Efficiency

The bond market is highly efficient and transparent. Technically, a yield curve is the expected forward short term rates and we can extract the expected rate increases and the distribution of yield curves. There is, at least, a good bookshelf of textbooks that cover bonds, their derivatives, and the...
by alex_686
Sun Sep 09, 2018 12:38 pm
Forum: Personal Consumer Issues
Topic: Can Sneakers go with Business Casual?
Replies: 172
Views: 8106

Re: Can Sneakers go with Business Casual?

All else being equal it would make no difference to me personally what shoes a professional I was dealing with was wearing. Whether it's a doctor, lawyer, policeman, etc I can't think of any case where it would make a difference (to me). I will admit that I don't know how common this view is or if ...
by alex_686
Sun Sep 09, 2018 11:17 am
Forum: Personal Consumer Issues
Topic: Can Sneakers go with Business Casual?
Replies: 172
Views: 8106

Re: Can Sneakers go with Business Casual?

First, I had a idiot of a pointy hair boss who did give me one good piece of advice. Don't dress for the job you have, dress for the job you want. Second, I will point out that some people can get away with wearing Converse Chuck Taylor All Star Basketball shoes with a suit. However, the shoes and t...
by alex_686
Sun Sep 09, 2018 11:11 am
Forum: Investing - Help with Personal Investments
Topic: Wash sale question- are ITOT and VTI Substantially Identical?
Replies: 78
Views: 6498

Re: Wash sale question- are ITOT and VTI Substantially Identical?

My own rule of thumb is that if it follows a different index, it is not substantially identical. I think that's probably overly conservative but it's a clear signal to go on and there are generally no shortage if ETFs out there following very-similar-but-not-quite-the-same indices to choose from. I...
by alex_686
Sat Sep 08, 2018 7:13 am
Forum: Investing - Help with Personal Investments
Topic: Wash sale question- are ITOT and VTI Substantially Identical?
Replies: 78
Views: 6498

Re: Wash sale question- are ITOT and VTI Substantially Identical?

Thanks for the reply. I agree that this seems to be the only reasonable explanation. You can dig into reports and figure out who they are using for industrial classification. I used to do this for a living, so let me give you a example 10 years ago. GICS, on of the major industrial classification p...
by alex_686
Fri Sep 07, 2018 11:11 pm
Forum: Investing - Help with Personal Investments
Topic: Wash sale question- are ITOT and VTI Substantially Identical?
Replies: 78
Views: 6498

Re: Wash sale question- are ITOT and VTI Substantially Identical?

Sorry for bringing back an old thread. I was searching for VTI and ITOT, and it led me to this thread. VTI https://investor.vanguard.com/etf/profile/VTI has about 20% in financials and ITOT https://www.ishares.com/us/products/239724/ishares-core-sp-total-us-stock-market-etf has about 14% in financi...
by alex_686
Fri Sep 07, 2018 9:30 pm
Forum: Investing - Help with Personal Investments
Topic: returns for the next decade
Replies: 40
Views: 4178

Re: returns for the next decade

Grt2bOutdoors wrote:
Fri Sep 07, 2018 8:05 pm
How are you calculating 3 to 5% real?
CAPE10 is about 30, so the inverse is about 3%. I think there are some adjustments that need to be made in that number upwards. BB bonds also have about a 3% real expected returns.
by alex_686
Fri Sep 07, 2018 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Could One Work For Edward Jones and Put Clients in Boglehead Portfolios?
Replies: 34
Views: 4227

Re: Could One Work For Edward Jones and Put Clients in Boglehead Portfolios?

Financial advisors do not need to beat the market. They just need to outperform what the investor would have done on their own which for many would be 100% stock and sell during a downturn and staying out of the market until the new top, or just investing in CD's/money market accounts. I would seco...