Search found 3905 matches

by jalbert
Thu Dec 13, 2018 4:34 pm
Forum: Investing - Help with Personal Investments
Topic: Why I use Roth for bond instead of stock. Please correct me...
Replies: 35
Views: 1967

Re: Why I use Roth for bond instead of stock. Please correct me...

You may find this article intriguing: https://www.whitecoatinvestor.com/asset-location-bonds-go-in-taxable/ Some comments about that. 1. The comparison is not using bonds with the same risk profile in tax-qualified and taxable spaces. Muni bonds have call provisions which will reduce return. Some o...
by jalbert
Thu Dec 13, 2018 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: Investment advice for stocks?
Replies: 9
Views: 613

Re: Investment advice for stocks?

Columbia Large Cap Index Fund Institutional 2 Class CLXRX Decent returns, low 0.2% managed expense ratio. Chases the S&P 500 with similar results. Columbia Mid Cap Index Fund Institutional 2 Class CPXRX Decent returns and 0.27% managed expense ratio. Chases the S&P 400 MidCap with similar results. ...
by jalbert
Thu Dec 13, 2018 4:39 am
Forum: Investing - Theory, News & General
Topic: Rebalance market timing - a good idea?
Replies: 7
Views: 563

Re: Rebalance market timing - a good idea?

It’s just a different rebalancing heuristic. The relative fund movements could go either way, with equal likelihood based on info available to an individual investor so It will neither help you nor hurt you on average.
by jalbert
Wed Dec 12, 2018 5:37 pm
Forum: Investing - Theory, News & General
Topic: Pitfalls of Backtesting
Replies: 4
Views: 299

Re: Pitfalls of Backtesting

The point of the article is that there is a tendency of many investors to overestimate the generalizability of a backtest.
by jalbert
Wed Dec 12, 2018 5:33 pm
Forum: Investing - Theory, News & General
Topic: Do long-term bonds belong in one's portfolio?
Replies: 159
Views: 7809

Re: Do long-term bonds belong in one's portfolio?

EDV isn't a Bogleheads investment . It's pure speculation (a hope of making a profit by selling it to a greater fool). You’re entitled to your opinion, obviously. But you’re wrong. In fact a regular treasury bond is equivalent to a portfolio of zero-coupon bonds each with a maturity date and value ...
by jalbert
Wed Dec 12, 2018 5:05 pm
Forum: Investing - Theory, News & General
Topic: What Happened to you during the Financial crisis of 2007–2008
Replies: 169
Views: 11968

Re: What Happened to you during the Financial crisis of 2007–2008

Past bear markets have been profitable for those fortunate enough to keep working and contributing to their retirement accounts. Those with appropriate asset allocations for their risk tolerance and who rebalanced at market low points profited even more. Deep bear markets can be very rough on people...
by jalbert
Wed Dec 12, 2018 4:03 pm
Forum: Investing - Help with Personal Investments
Topic: Why I use Roth for bond instead of stock. Please correct me...
Replies: 35
Views: 1967

Re: Why I use Roth for bond instead of stock. Please correct me...

If your tax rate were the same at contribution and withdrawal time, and there were no RMDs on tax-deferred accounts driving more withdrawals than what you need to spend, then there would be no difference between a tax-deferred or Roth account, and the argument that higher return potential in Roth gi...
by jalbert
Wed Dec 12, 2018 3:54 pm
Forum: Investing - Theory, News & General
Topic: Pitfalls of Backtesting
Replies: 4
Views: 299

Pitfalls of Backtesting

Informative article on the limits of backtesting:

http://media.allianzinvestors.com/insti ... y-2018.pdf
by jalbert
Wed Dec 12, 2018 1:36 am
Forum: Investing - Help with Personal Investments
Topic: CD's safer than Bond Funds?
Replies: 14
Views: 1448

Re: CD's safer than Bond Funds?

So with all that said: CD's seem very much safer because I won't lose 5% if interest rates go up my 1%. It is extremely unlikely that a bond fund with a 5-year duration will lose 5% of its value if interest rates increase by one percentage point. Such a loss in value would require rates to go up on...
by jalbert
Tue Dec 11, 2018 4:43 pm
Forum: Investing - Theory, News & General
Topic: Article: Your love of index funds is terrible for our economy
Replies: 59
Views: 6240

Re: Article: Your love of index funds is terrible for our economy

The author of the referenced article, Michael Brush, publishes a stockpicking newsletter. Who would have thought he would not like index funds?
by jalbert
Tue Dec 11, 2018 1:32 pm
Forum: Investing - Help with Personal Investments
Topic: Made an unwise investment, help solicited
Replies: 41
Views: 3490

Re: Made an unwise investment, help solicited

Any recommendations on a replacement fund? Thanks! The actual error you made was selecting a mutual fund you thought would be a good investment instead of designing an asset allocation. An asset allocation should at the least make decisions on your ratio of stocks to bonds and percentage of stocks ...
by jalbert
Mon Dec 10, 2018 5:12 pm
Forum: Investing - Theory, News & General
Topic: International underperformance - how to break it down
Replies: 52
Views: 4025

Re: International underperformance - how to break it down

You are more likely to lose money than make money by betting against the efficient market hypothesis. How does that happen if the market is "efficient"? Who would be getting the lost money? Trading costs, expense ratios of mutual funds, loads, advisor AUM fees, hits from front-running by high speed...
by jalbert
Mon Dec 10, 2018 1:24 pm
Forum: Investing - Theory, News & General
Topic: International underperformance - how to break it down
Replies: 52
Views: 4025

Re: International underperformance - how to break it down

You are more likely to lose money than make money by betting against the efficient market hypothesis.
by jalbert
Mon Dec 10, 2018 1:21 pm
Forum: Investing - Theory, News & General
Topic: Ignored Risks of Factor Investing
Replies: 104
Views: 5136

Re: Ignored Risks of Factor Investing

The Fama French work demonstrated that size and value are unique and independent factors from each other and from market beta. These unique independent risks cannot be diversified away. Dave Which would imply that there is no risk mitigation by diversifying across size, value, and beta. I actually ...
by jalbert
Mon Dec 10, 2018 12:52 am
Forum: Investing - Theory, News & General
Topic: Ignored Risks of Factor Investing
Replies: 104
Views: 5136

Re: Ignored Risks of Factor Investing

Random Walker wrote:
Sun Dec 09, 2018 11:38 pm
The Fama French work demonstrated that size and value are unique and independent factors from each other and from market beta. These unique independent risks cannot be diversified away.

Dave
Which would imply that there is no risk mitigation by diversifying across size, value, and beta.
by jalbert
Sun Dec 09, 2018 11:11 pm
Forum: Investing - Theory, News & General
Topic: Ignored Risks of Factor Investing
Replies: 104
Views: 5136

Re: Ignored Risks of Factor Investing

I do agree with the first bullet point at the beginning of the article: The risks of factor investing are usually understated (perhaps, severely so), and the diversification benefits tend to be overstated. It’s hard to see how: they are called “risk factors” after all. I mean, it’s right there in t...
by jalbert
Sun Dec 09, 2018 9:25 pm
Forum: Investing - Theory, News & General
Topic: does the 4% withdrawal guideline include dividends?
Replies: 43
Views: 2970

Re: does the 4% withdrawal guideline include dividends?

Another problem is that a 60/40 portfolio worth $1 million on 1/1/2008 was only worth $750,000 on 1/1/2009. According to the 4% rule, an investor with $1,000,000 retiring on 1/1/2008 can spend $40,000 the first year (and COLA'd thereafter). But if he waits a year, he only has $750,000 and can only ...
by jalbert
Sun Dec 09, 2018 3:34 pm
Forum: Investing - Theory, News & General
Topic: Ignored Risks of Factor Investing
Replies: 104
Views: 5136

Re: Ignored Risks of Factor Investing

I do agree with the first bullet point at the beginning of the article: The risks of factor investing are usually understated (perhaps, severely so), and the diversification benefits tend to be overstated. It’s hard to see how: they are called “risk factors” after all. I mean, it’s right there in t...
by jalbert
Sun Dec 09, 2018 3:32 pm
Forum: Investing - Help with Personal Investments
Topic: What am I not getting about the value of TIPS funds?
Replies: 23
Views: 2190

Re: What am I not getting about the value of TIPS funds?

To be honest I've never understood why retired folks should load up on TIPS funds/etfs. Not much inflation right now, Future inflation is a risk, past inflation is not. TIPS outperform when future inflation exceeds market expectations, which is a significant risk for retirees. Do all the brokerage ...
by jalbert
Sun Dec 09, 2018 3:30 pm
Forum: Investing - Help with Personal Investments
Topic: SPIA or CD Ladder
Replies: 31
Views: 2284

Re: SPIA or CD Ladder

In any event if you buy the SPIA you are essentially locking in your interest rate for 10 years. The likelihood that rates will increase over the next 10 years, possibly dramatically, is much higher than the likelihood that rates will stay the same or even drop. What is the basis for knowing that t...
by jalbert
Sat Dec 08, 2018 10:47 pm
Forum: Investing - Theory, News & General
Topic: Ignored Risks of Factor Investing
Replies: 104
Views: 5136

Re: Ignored Risks of Factor Investing

I do agree with the first bullet point at the beginning of the article:
The risks of factor investing are usually understated (perhaps, severely so), and the diversification benefits tend to be overstated.
by jalbert
Sat Dec 08, 2018 7:06 pm
Forum: Investing - Help with Personal Investments
Topic: What am I not getting about the value of TIPS funds?
Replies: 23
Views: 2190

Re: What am I not getting about the value of TIPS funds?

To be honest I've never understood why retired folks should load up on TIPS funds/etfs. Not much inflation right now,
Future inflation is a risk, past inflation is not. TIPS outperform when future inflation exceeds market expectations, which is a significant risk for retirees.
by jalbert
Sat Dec 08, 2018 3:38 am
Forum: Investing - Theory, News & General
Topic: Is the division of international markets into "developed" and "emerging" meaningful?
Replies: 16
Views: 1357

Re: Is the division of international markets into "developed" and "emerging" meaningful?

Emerging markets equity funds are diversified across many currencies and economies. This increase correlation in aggregate with, say, US equities by blurring the volatility of a single country. Here are some sample correlations for US equities with those of Taiwan and those trading in China: https:/...
by jalbert
Sat Dec 08, 2018 2:41 am
Forum: Investing - Theory, News & General
Topic: Is the division of international markets into "developed" and "emerging" meaningful?
Replies: 16
Views: 1357

Re: Is the division of international markets into "developed" and "emerging" meaningful?

Is the division of international markets into "developed" and "emerging" meaningful? I charted them and they seem to be highly correlated. The two biggest countries in the emerging market index are China and Taiwan. Is it meaningful to say they are emerging? Correlations have nothing to do with the...
by jalbert
Fri Dec 07, 2018 11:56 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Understanding TIPS
Replies: 36
Views: 3354

Re: Larry Swedroe: Understanding TIPS

Some minor additional points come to mind. First, if a 401K plan has a brokerage option, individual TIPS can be purchased there. Second, if holding TIPS in a taxable account, a TIPS funds distribute the inflation correction to principal so that you are not paying tax on income you have no way to rec...
by jalbert
Thu Dec 06, 2018 7:41 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

Mr. X grows up in Winston-Salem. He inherits some money and buys only one stock. Ill let you guess which one. ;-) 70 years later, he's dominated the sp500. Anything less would be an underperformance considering he had a 9 year head start before the S&P500 was created in 1957, and they were 9 good y...
by jalbert
Thu Dec 06, 2018 12:40 pm
Forum: Investing - Help with Personal Investments
Topic: Help lowering my expense ratio
Replies: 13
Views: 1064

Re: Help lowering my expense ratio

You could lower your overall ER a little bit by implementing a total market index using the SP500, midcap 400, and smallcap 600. JFIVX 48% JECIX 6% JESIX 6% JIEQX 40% Would be pretty much equivalent to the original portfolio, but with a slightly lower aggregate ER, about 3bp lower. The extra comple...
by jalbert
Thu Dec 06, 2018 12:25 pm
Forum: Investing - Theory, News & General
Topic: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Replies: 172
Views: 12278

Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund

This is weird. I thought maybe the prospectus would help me. On this page , it says click here to view or download prospectus[/url] When I clicked on that link, this is what I saw. How about you? https://imgur.com/M81lpDt.png Reproduced with both Safari 11.1.2 (13605.3.8) and Firefox 61.0.1 (64-bit...
by jalbert
Thu Dec 06, 2018 12:43 am
Forum: Investing - Help with Personal Investments
Topic: Help lowering my expense ratio
Replies: 13
Views: 1064

Re: Help lowering my expense ratio

You could lower your overall ER a little bit by implementing a total market index using the SP500, midcap 400, and smallcap 600. JFIVX 48% JECIX 6% JESIX 6% JIEQX 40% Would be pretty much equivalent to the original portfolio, but with a slightly lower aggregate ER, about 3bp lower. The extra complex...
by jalbert
Wed Dec 05, 2018 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: In a Bear Market, What Are Some Best Practices
Replies: 31
Views: 3498

Re: In a Bear Market, What Are Some Best Practices

If I’m feeling jittery because the market seems to have gone up too much too fast, I rebalance. When the market punches me in the gut, I rebalance. I’ve not generally tax-loss harvested in the past as aggressively as I probably should have, but that is an additional response with a steep loss in a t...
by jalbert
Wed Dec 05, 2018 3:08 pm
Forum: Personal Finance (Not Investing)
Topic: Why Is Insurance Worth It (Analytically)?
Replies: 89
Views: 4186

Re: Why Is Insurance Worth It (Analytically)?

It seems that many people are very adamant about insurance being 100% non negotiable, you must have it in the following categories: 1. Health Insurance 2. Property Insurance 3. Supplemental Car Insurance (above legal minimum) 4. Umbrella Liability What seems even stranger to me is that many Boglehe...
by jalbert
Wed Dec 05, 2018 4:30 am
Forum: Personal Finance (Not Investing)
Topic: Do I need Umbrella Insurance?
Replies: 2
Views: 655

Re: Do I need Umbrella Insurance?

Also consider dash cams to greatly reduce the risk of being accused of foreseeable negligence like texting while driving.
If you don't use a cell phone to talk or text while driving, your cell provider has a de facto audit trail of your activity that can prove it.
by jalbert
Wed Dec 05, 2018 4:06 am
Forum: Investing - Theory, News & General
Topic: High book to price companies (low price to book companies) are risky?
Replies: 10
Views: 754

Re: High book to price companies (low price to book companies) are risky?

One issue with book value today is that companies in some sectors have intellectual property as their main assets. These need to be valued properly to get a book value. Maybe this has been addressed at present more than I realize but it has been an issue in recent years. But I think the presenter on...
by jalbert
Wed Dec 05, 2018 3:38 am
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

There is plenty of under-performance in the hard-to-get to crowd. I don't think they skew the performance numbers at all except that they may be WORSE than average. Sure, but the contrary position was not my point. Rather it was just that eliminating the worst 10% of active managers is not a strate...
by jalbert
Tue Dec 04, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

You missed the point completely. I am suggesting that if you can eliminate the say 10% worst performers the remaining 90% are going to have better performance than the average of the total 100%. It's statistics not picking winners. That’s not necessarily true. Actively managed mutual funds and hedg...
by jalbert
Tue Dec 04, 2018 1:24 am
Forum: Investing - Help with Personal Investments
Topic: Minimizing capital gains taxes when moving to low-cost funds?
Replies: 26
Views: 2995

Re: Minimizing capital gains taxes when moving to low-cost funds?

FKINX .61 $18k $3k HFCSX 1.50 $59k $11k I would be inclined to sell those two now and the other two when you stop working, unless there are high cost basis shares you may sell sooner. FKINX is tax-inefficient as mentioned above, and it’s gain is low. The $270 in ER and taxes on distributions from F...
by jalbert
Mon Dec 03, 2018 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio review after windfall
Replies: 8
Views: 761

Re: Portfolio review after windfall

It looks fine, although you could hold all of your int’l stock allocation in taxable space to get the foreign tax credit for all of the holdings.
by jalbert
Mon Dec 03, 2018 8:20 pm
Forum: Investing - Help with Personal Investments
Topic: rebalanced to bonds and intl out of US equtiies
Replies: 8
Views: 697

Re: rebalanced to bonds and intl out of US equtiies

In the recent runup of US and rundown of bonds and international, i balanced a little into bonds and interntional from US, to meet my allocation goals. Wonder if this will be a good idea or not based on so many here at BH who are negative on bonds or intl. If you brought your portfolio back in alig...
by jalbert
Mon Dec 03, 2018 7:28 pm
Forum: Investing - Help with Personal Investments
Topic: Roth - 60 day tax free rollover
Replies: 8
Views: 494

Re: Roth - 60 day tax free rollover

If Vanguard continues to refuse the rollover back to the same account, I would suggest opening a new account somewhere else to accept the rollover. Be sure to tell the new provider it is a rollover. Be sure not to miss the 60-day deadline
by jalbert
Mon Dec 03, 2018 7:11 pm
Forum: Investing - Theory, News & General
Topic: Bond Inversion! Real estate prices, and more.
Replies: 25
Views: 2124

Re: Bond Inversion! Real estate prices, and more.

The Fed could easily uninvert at least the lower part of the yield curve by suspending increases in the Federal Funds Rate and accelerating the rate of unwinding notes from the balance sheet.
by jalbert
Mon Dec 03, 2018 5:16 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

One major issue is that portfolio managers are in competition with each other— the zero sum game argument. If you are choosing a plumber or CPA you just need to find a competent practitioner with some experience dealing with the type of work to be done. You do not need to identify someone who is in ...
by jalbert
Mon Dec 03, 2018 2:51 am
Forum: Investing - Theory, News & General
Topic: Tilting small cap blend instead of value?
Replies: 18
Views: 1373

Re: Tilting small cap blend instead of value?

Or perhaps the two risk factors act synergistically because investors are generally risk averse? The two factors are synergistic but uncorrelated? While independent variables are uncorrelated, I think there are examples where two random variables can be uncorrelated but dependent, eg if X is a rand...
by jalbert
Sun Dec 02, 2018 5:55 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

Given that it is not possible to invest in their funds without paying their fees, I'm not sure why that matters. Aren't our returns that we put in our pockets always after costs and fees? If, say 80% of active managers fail to beat the market net of fees, this aggregates the data for active manager...
by jalbert
Sun Dec 02, 2018 5:42 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

When I choose a plumber, or a prom date, its not (very) hard to weed out the bad ones. Logically, the same logic would apply to fund managers. That has not held up empirically. The track record for choosing active managers a priori who will outperform has been poor even among financial pros with fa...
by jalbert
Sun Dec 02, 2018 5:23 pm
Forum: Investing - Theory, News & General
Topic: What percent of Managers beat the market BEFORE fees?
Replies: 94
Views: 5946

Re: What percent of Managers beat the market BEFORE fees?

Example, there are ten managers in the large cap space, large cap returns returns 10% for a given amount of time. Eight managers return 9%, one manger returns 13% and one more returns 15%. 80% or 8 out of 10 underperform. Yeah, ok, sure, an average isn't a median, but the law of large numbers shoul...
by jalbert
Sat Dec 01, 2018 6:12 pm
Forum: Investing - Help with Personal Investments
Topic: The Disaster That Is General Electric Company Stock
Replies: 53
Views: 9951

Re: The Disaster That Is General Electric Company Stock

The lesson should be that buying individual stocks takes uncompensated risk. An individual stock can go to zero. While that could happen to the entire stock market, it is dramatically less likely than it happening to an individual stock. I'm not sure what you mean by "uncompensated risk". People ha...
by jalbert
Sat Dec 01, 2018 5:31 pm
Forum: Investing - Theory, News & General
Topic: [Understanding volatility in ultrashort bond funds]
Replies: 49
Views: 5227

Re: Ultrashort bond funds in freefall

There was a flurry of creating new ultrashort bond funds in response to money-market interest rates being at or within a basis point or two of zero for a long time. The idea was to have a very short duration, less than one, and take credit risk to actually earn a little bit of interest. The short ma...
by jalbert
Sat Dec 01, 2018 2:04 am
Forum: Investing - Help with Personal Investments
Topic: The Disaster That Is General Electric Company Stock
Replies: 53
Views: 9951

Re: The Disaster That Is General Electric Company Stock

The lesson should be that buying individual stocks takes uncompensated risk. An individual stock can go to zero. While that could happen to the entire stock market, it is dramatically less likely than it happening to an individual stock.