Search found 4194 matches

by Northern Flicker
Sat Jun 15, 2019 10:04 pm
Forum: Personal Consumer Issues
Topic: Walking Cities, potential for retirees
Replies: 92
Views: 7217

Re: Walking Cities, potential for retirees

While it is commonly known that one does not need to own a car to have a diverse life in these US cities: NYC, San Francisco, Boston, DC, Seattle, or Chicago, this is also true in places that are less well known for that: Boulder, CO Burlington, VT Bloomington, IN Minneapolis Portland, OR Santa Fe, ...
by Northern Flicker
Fri Jun 14, 2019 7:23 pm
Forum: Investing - Theory, News & General
Topic: Mechanisms for disappearance of factor premia -- how does it work for momentum?
Replies: 19
Views: 1369

Re: Mechanisms for disappearance of factor premia -- how does it work for momentum?

Momentum would be susceptible to from-running if enough market participants do momentum trades. This is true whether or not a momentum effect exists in the first place.
by Northern Flicker
Thu Jun 13, 2019 11:14 pm
Forum: Personal Investments
Topic: First Post! Portfolio Review Needed
Replies: 28
Views: 2986

Re: First Post! Portfolio Review Needed

1) With those high expense ratios in her 403b, she should contribute just enough ($1.3k annually) to get the employer match, unless she will be leaving that employer soon. About how long might she be staying with that employer? For at least another 10-15 years. 3) He should start doing a backdoor R...
by Northern Flicker
Thu Jun 13, 2019 9:08 pm
Forum: Investing - Theory, News & General
Topic: Karsten (Early Retirement Now) Pens a Challenge to Merriman and the Small/Value Premium
Replies: 44
Views: 3819

Re: Karsten (Early Retirement Now) Pens a Challenge to Merriman and the Small/Value Premium

Each factor represents an independent source of systematic risk. You can diversify away the idiosyncratic risk associated with each small cap value stocks, but you can't diversify away the systematic components of small value: you decide to bear those risks, or not. If you do ,then you expect some ...
by Northern Flicker
Thu Jun 13, 2019 12:54 am
Forum: Investing - Theory, News & General
Topic: Karsten (Early Retirement Now) Pens a Challenge to Merriman and the Small/Value Premium
Replies: 44
Views: 3819

Re: Karsten (Early Retirement Now) Pens a Serious Challenge to Merriman and the Small/Value Premium

There is also a logical inconsistency between the idea of factor premiums being risk premiums but factor diversification reducing risk. Not at all, at least not if the risks are less than perfectly correlated. Every single stock has some degree of idiosyncratic risk. Combine 50 or 500 or 5,000 stoc...
by Northern Flicker
Wed Jun 12, 2019 5:29 pm
Forum: Investing - Theory, News & General
Topic: Karsten (Early Retirement Now) Pens a Challenge to Merriman and the Small/Value Premium
Replies: 44
Views: 3819

Re: Karsten (Early Retirement Now) Pens a Serious Challenge to Merriman and the Small/Value Premium

There is also a logical inconsistency between the idea of factor premiums being risk premiums but factor diversification reducing risk. Some will say that a small-cap value portfolio is less risky than would be determined by the risk premiums because of diversified exposure to market beta, size, and...
by Northern Flicker
Wed Jun 12, 2019 5:07 pm
Forum: Personal Finance (Not Investing)
Topic: 4% APY credit unions
Replies: 22
Views: 3024

Re: 4% APY credit unions

Yes, which is why the ideal strategy includes doing only small purchases with the RCA debit card, to minimize the CC cashback rewards lost. I try to keep my RCA purchases under $10, with an average of about $5 or less. Ideal with respect to interest earned. It does take time away from potentially m...
by Northern Flicker
Wed Jun 12, 2019 5:04 pm
Forum: Investing - Theory, News & General
Topic: "The S&P 500 Is Beating Yale's Endowment Fund"
Replies: 34
Views: 3968

Re: "The S&P 500 Is Beating Yale's Endowment Fund"

Bogleheads: Article about how the simple Vanguard S&P 500 Index Fund is currently outperforming Swensen's famous Yale Portfolio: https://www.morningstar.com/articles/933014/the-sp-500-is-beating-yales-endowment-fund.html Best wishes. Taylor How exactly is it currently beating it? Did the S&P500 out...
by Northern Flicker
Wed Jun 12, 2019 12:55 pm
Forum: Personal Investments
Topic: First Post! Portfolio Review Needed
Replies: 28
Views: 2986

Re: First Post! Portfolio Review Needed

The one concern I have about her 403(b) is that the specific account that holds her current fund product is labeled as an "annuity." I'll have to look into this as I'm not sure what this means exactly. Definitely follow up with the plan administrator for due diligence but I believe it is just the t...
by Northern Flicker
Wed Jun 12, 2019 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: 4% APY credit unions
Replies: 22
Views: 3024

Re: 4% APY credit unions

They are basically asking you to do a bunch of debit card transactions and refunding some of the debit card fee to you. You could instead use a cash back credit card for those transactions and get a similar benefit without having to worry about number of transactions per month, or all the other hoo...
by Northern Flicker
Tue Jun 11, 2019 11:25 pm
Forum: Investing - Theory, News & General
Topic: Best Vanguard value factor exposure?
Replies: 42
Views: 2646

Re: Best Vanguard value factor exposure?

It is not possible to provide a good answer without knowing what the rest of the OP’s portfolio looks like.
by Northern Flicker
Tue Jun 11, 2019 4:46 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

No. Short term Treasuries for example are very tax efficient because of the low yield and state tax exemption.
As long as you don’t have to hold stock in a tax-deferred account to make room for the short-term treasuries in taxable space that is true.
by Northern Flicker
Tue Jun 11, 2019 4:42 pm
Forum: Investing - Theory, News & General
Topic: Help me understand "inflation risk" for bond funds
Replies: 24
Views: 787

Re: Help me understand "inflation risk" for bond funds

Inflation increases costs for companies and increases pricing power which increases revenue. Some stocks will benefit from inflation, others will get hurt, and for some it will be a wash. For a broad market index fund these effects are averaged out to lead to some real return that probably will fall...
by Northern Flicker
Tue Jun 11, 2019 1:31 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

One way to include both time frames in one's Investment portfolio is to not use TBM as their only FI asset. Sorry for all you three funders but while easy it ignores the short term concerns. Just break that TBM into it's components and both short and lifetime concerns can be addressed. This is only...
by Northern Flicker
Tue Jun 11, 2019 1:15 pm
Forum: Personal Investments
Topic: Individual Investment - Please help
Replies: 19
Views: 794

Re: Individual Investment - Please help

Stock Market - $7,253.86 Long-term savings - $7,044.59 401k - $9,000.00 Some questions about whether the long-term savings is that, or maybe more of an emergency fund and/or assets you will need for your move. But when you have a 401K or IRA and a taxable account with assets, they should be combine...
by Northern Flicker
Tue Jun 11, 2019 2:06 am
Forum: Personal Investments
Topic: Tax-managed Vanguard Funds
Replies: 10
Views: 1105

Re: Tax-managed Vanguard Funds

But, since Vanguard's TSM Mutual Fund has the benefit of the ETF Share Class, then can we assume (over the VERY long term) it would "ward off" any capital gains distributions AND that some day Tax-Managed Capital Appreciation must likely has capital gains distributions, since it does NOT have the b...
by Northern Flicker
Tue Jun 11, 2019 1:58 am
Forum: Investing - Theory, News & General
Topic: Tax efficiency of mutual fund vs ETF for bonds
Replies: 11
Views: 770

Re: Tax efficiency of mutual fund vs ETF for bonds

In many, if not all states that tax income, I believe that capital gains on treasury securities are subject to state income tax, whereas the interest on them is not.
by Northern Flicker
Mon Jun 10, 2019 7:59 pm
Forum: Personal Investments
Topic: Tax-managed Vanguard Funds
Replies: 10
Views: 1105

Re: Tax-managed Vanguard Funds

VIGAX may be more tax-efficient than VTCLX in a given year, but it has about a 33% portfolio turnover on average so distribution of capital gains is a significant on-going concern. Assets that leave a growth index often have had their value decline, so the risk of capital gains distributions is damp...
by Northern Flicker
Mon Jun 10, 2019 5:06 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

If we can agree on that, then we can probably agree that most investors should care much more about the general nature of those characteristics over the life of the investment and not as much about what might happen in any particular month. Investment horizon is not a deterministic future property ...
by Northern Flicker
Mon Jun 10, 2019 3:53 pm
Forum: Investing - Theory, News & General
Topic: Instead of bonds; why not 100% Low Vol?
Replies: 8
Views: 1513

Re: Instead of bonds; why not 100% Low Vol?

It is reasonable to hold a low volatility equity portfolio and increase equity exposure some. Low-vol incorporates some term exposure compensating for the reduced term exposure from reducing one’s bond exposure some. I think that there are two challenges to overcome with this approach: 1) such an eq...
by Northern Flicker
Mon Jun 10, 2019 3:30 pm
Forum: Investing - Theory, News & General
Topic: US stocks still look better than anywhere else
Replies: 100
Views: 7550

Re: US stocks still look better than anywhere else

While American outperformance continues to defy history, the rest of the world remains trapped in a bear market. This is classic (and bad) financial journalism— use present tense to describe past performance and present it in a way that suggests it is the driver for future performance. US equities ...
by Northern Flicker
Mon Jun 10, 2019 1:32 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

I like long term TIPS just fine, for investors whose portfolio would otherwise have significant exposure to inflation risk. Inflation risk is hard to quantify for growth assets. Int’l stocks, small value tilts, real estate, commodity producers, and commodities all protect against inflation risk pro...
by Northern Flicker
Mon Jun 10, 2019 1:20 pm
Forum: Personal Finance (Not Investing)
Topic: 4% APY credit unions
Replies: 22
Views: 3024

Re: 4% APY credit unions

They are basically asking you to do a bunch of debit card transactions and refunding some of the debit card fee to you. You could instead use a cash back credit card for those transactions and get a similar benefit without having to worry about number of transactions per month, or all the other hoop...
by Northern Flicker
Sun Jun 09, 2019 7:27 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard Treasury Money Market yield so high?
Replies: 28
Views: 6543

Re: Why is Vanguard Treasury Money Market yield so high?

Based on the varying maturities, credit quality, and sectors listed at Morningstar's page for the VMFXX fund, there are longer term bonds and other investments that spice up the portfolio. http://portfolios.morningstar.com/fund/summary?t=VMFXX®ion=usa&culture=en_US Vanguard’s site says that VMFX...
by Northern Flicker
Sun Jun 09, 2019 4:33 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

One last point, we get accused a lot of recency bias around here, but surely the opposite bias exists as well. I don’t think it has a pithy name; basically it’s the bias that anything that has happened in the past is just as likely to happen again. Which totally ignores the underlying drivers of wh...
by Northern Flicker
Sun Jun 09, 2019 1:34 pm
Forum: Personal Investments
Topic: Having both Vanguard Target and TIAA-CREF Lifecycle funds
Replies: 16
Views: 1159

Re: Having both Vanguard Target and TIAA-CREF Lifecycle funds

Sorry, I was referencing the TIAA fund family referenced in the thread title which is inconsistent with the original posting text.
by Northern Flicker
Sun Jun 09, 2019 1:31 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

I find it interesting how some Bogleheads’ first instinct when confronted with a behavioral anomaly is not to correct the behavior, but rather to build one’s portfolio around it. Fits in with the general conservatism and pessimism around here, I suppose... Others “validate” their position with a 2-...
by Northern Flicker
Sun Jun 09, 2019 1:09 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

I find it interesting how some Bogleheads’ first instinct when confronted with a behavioral anomaly is not to correct the behavior, but rather to build one’s portfolio around it. Fits in with the general conservatism and pessimism around here, I suppose... Others “validate” their position with a 2-...
by Northern Flicker
Sun Jun 09, 2019 12:19 pm
Forum: Personal Investments
Topic: First Post! Portfolio Review Needed
Replies: 28
Views: 2986

Re: First Post! Portfolio Review Needed

Minor point but I would not hold the total world index fund in a taxable account. If you want to hold the world market cap, that is fine, but you can hold it as separate US and non-US index funds and still not need to rebalance to maintain world market cap. The disadvantages of commingling them in o...
by Northern Flicker
Sun Jun 09, 2019 12:53 am
Forum: Investing - Theory, News & General
Topic: The impact of Baby Boomers on the Future of U.S. Stocks
Replies: 41
Views: 5182

Re: The impact of Baby Boomers on the Future of U.S. Stocks

In the US, millenials are now a larger demographic group than baby boomers.
by Northern Flicker
Sat Jun 08, 2019 11:57 pm
Forum: Investing - Theory, News & General
Topic: Insights From a Long Call With Vanguard Reps Today
Replies: 74
Views: 11981

Re: Insights From a Long Call With Vanguard Reps Today

Vanguard does not raise or lower expense ratios, regardless of whether they would prefer their customers to use traditional mutual funds or exchange-traded funds. Vanguard reports expense ratios after the fact. It's what they already spent during the previous reporting period. Vanguard raising or l...
by Northern Flicker
Sat Jun 08, 2019 11:49 pm
Forum: Personal Investments
Topic: why are Small Caps falling?
Replies: 113
Views: 9302

Re: why are Small Caps falling?

Nobody knows what the risk-adjusted expected returns of risky assets actually are.
by Northern Flicker
Sat Jun 08, 2019 9:48 pm
Forum: Personal Investments
Topic: why are Small Caps falling?
Replies: 113
Views: 9302

Re: why are Small Caps falling?

Was anyone advocating betting everything on megacap stocks or avoiding small-caps? Nothing wrong with investing in small-caps for diversification. But the idea that small-caps have a higher risk-adjusted return than the broad market is not an easy thing to exploit if it is true. Nobody I know says ...
by Northern Flicker
Sat Jun 08, 2019 9:40 pm
Forum: Investing - Theory, News & General
Topic: The logical fallacy behind "Bonds Are For Safety"
Replies: 248
Views: 15360

Re: The logical fallacy behind "Bonds Are For Safety"

An even larger error is measuring variance and the effectiveness of diversification in nominal terms for investments with a long time horizon. It should be obvious that over a long time horizon real returns are what matters. When inflation tail risk is properly quantified, the diversification of equ...
by Northern Flicker
Sat Jun 08, 2019 12:26 pm
Forum: Personal Investments
Topic: why are Small Caps falling?
Replies: 113
Views: 9302

Re: why are Small Caps falling?

Was anyone advocating betting everything on megacap stocks or avoiding small-caps? Nothing wrong with investing in small-caps for diversification. But the idea that small-caps have a higher risk-adjusted return than the broad market is not an easy thing to exploit if it is true.
by Northern Flicker
Sat Jun 08, 2019 12:19 pm
Forum: Investing - Theory, News & General
Topic: Market up because of rate cut expectation - why ?
Replies: 21
Views: 2769

Re: Market up because of rate cut expectation - why ?

Nobody knows what the odds of a rate cut are and nobody knows how the market is responding to estimations of those odds.
by Northern Flicker
Fri Jun 07, 2019 10:34 pm
Forum: Personal Investments
Topic: why are Small Caps falling?
Replies: 113
Views: 9302

Re: why are Small Caps falling?

A Asset backtest in Portfolio Visualizer shows that Small Caps most definitely beat large caps between 1/1/1977-date and by a HEFTY margin CAGR of 12.54% for Small vs 10.83% for Large. I mentioned a couple of issues with NAESX. However, can you name a small-cap fund that I could have invested in th...
by Northern Flicker
Fri Jun 07, 2019 7:25 pm
Forum: Personal Investments
Topic: why are Small Caps falling?
Replies: 113
Views: 9302

Re: why are Small Caps falling?

To clarify I meant, at the very least Small will not significantly underperform Large in a long time frame (10+ years). By significant I mean for example I think it's unlikely that over a decade Large will return CAGR 9% and Small with return CAGR 2%. It is speculation of course based on what has h...
by Northern Flicker
Thu Jun 06, 2019 11:01 pm
Forum: Personal Investments
Topic: Portfolio Review – Haunted by a Late Start on Retirement
Replies: 3
Views: 714

Re: Portfolio Review – Haunted by a Late Start on Retirement

I haven't made the best decisions when it comes to retirement planning. As a result, my spouse and I are in our late 30s and have very little saved for retirement. I’ve a rollover IRA from a previous employer with Fidelity: $124,000 (Fidelity Contrafund FCNTX ) We’ve an emergency fund of $50,000 in...
by Northern Flicker
Thu Jun 06, 2019 10:04 pm
Forum: Personal Investments
Topic: why are Small Caps falling?
Replies: 113
Views: 9302

Re: why are Small Caps falling?

- Expectation of a rate cut which is hugely favorable to Small Caps - Trade war fears also favor Small Caps as they are somewhat insulated (not fully but better than Large Caps) - Slowing ex US growth relative to US, should favor Small Caps as they are not directly exposed to International demand I...
by Northern Flicker
Thu Jun 06, 2019 9:29 pm
Forum: Personal Investments
Topic: Recommended DFA funds through 457 plan
Replies: 13
Views: 946

Re: Recommended DFA funds through 457 plan

DFA Global Allocation 60/40 would have a ratio of equities to bonds similar to the Vanguard Wellington fund and DFA Global Allocation 25/75 would be similar to the Vanguard Wellesley fund. The DFA funds referenced are significantly more diversified than Wellesley or Wellington. The I share classes h...
by Northern Flicker
Thu Jun 06, 2019 9:16 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12472

Re: David Swensen Unconventional Success

If you are buying or selling a nominal bond on the secondary market the effective yield will be quoted relative to the market price at which the transaction takes place. The yield of the bond itself does not change. If you calculate the breakeven inflation for a TIPS relative to a nominal treasury o...
by Northern Flicker
Thu Jun 06, 2019 9:08 pm
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 110
Views: 8083

Re: are TIPS expensive? or are they cheap?

Yes, published in 2006 when expected real yields were much higher, and TIPS still incorporated a significant liquidity risk premium in the yields. This is no longer a useful allocation method for TIPS. Ok, but what else do we have except a whole lot of Boglehead's comments? :D Vanguard and David Sw...
by Northern Flicker
Thu Jun 06, 2019 1:48 am
Forum: Investing - Theory, News & General
Topic: are TIPS expensive? or are they cheap?
Replies: 110
Views: 8083

Re: are TIPS expensive? or are they cheap?

From Swedroe's "Winning Bond Book" Allocation to TIPS vs. short term fixed income Real Yield on TIPS Allocation to TIPS >3% 75 - 100% >2.5% <3% 50 - 75% >2% <2.5% 25 - 50% >1.5% <2% 0 - 25% <1.5% 0% This was published before '08 so maybe "things have changed" but if not, TIPS are expensive. Yes, pu...
by Northern Flicker
Thu Jun 06, 2019 1:34 am
Forum: Investing - Theory, News & General
Topic: Being a conservative investor is not always a bad thing
Replies: 30
Views: 2254

Re: Being a conservative investor is not always a bad thing

Picking the start as the year before the deflation of the largest stock market bubble since the 1960s (at least) is going to tilt the table towards bonds. Which could happen starting tomorrow. Some think that zirp has bubbled us up once again. Nobody can predict the start of a bear market. You shou...
by Northern Flicker
Wed Jun 05, 2019 6:25 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12472

Re: David Swensen Unconventional Success

How so? TIPS are adjusted for inflation, period, whether that inflation is expected or not. They protect against unexpected inflation in comparison to nominal treasuries, which have expected inflation priced into their yield. If inflation turns out to be higher than expected, TIPS adjust accordingl...
by Northern Flicker
Tue Jun 04, 2019 7:07 pm
Forum: Investing - Theory, News & General
Topic: David Swensen Unconventional Success
Replies: 123
Views: 12472

Re: David Swensen Unconventional Success

When TIPS had negative real yields, did nominal treasuries of similar durations have non-negative expected real yields?
by Northern Flicker
Tue Jun 04, 2019 7:02 pm
Forum: Personal Investments
Topic: Recommended DFA funds through 457 plan
Replies: 13
Views: 946

Re: Recommended DFA funds through 457 plan

Are all of those actually offered in the plan? It would seem odd for:

DFA US Targeted Value R1
DFA US Targeted Value R2

both to be offered, as they are different share classes of the same fund.