Search found 1464 matches

by garlandwhizzer
Fri Apr 12, 2013 11:35 am
Forum: Investing - Theory, News & General
Topic: J Bogle article: Total Corporate Bond Index Fund
Replies: 60
Views: 10091

Re: J Bogle article: Total Corporate Bond Index Fund

In my opinion, the greatest risk to bonds at this point is not the default risk of corporate bonds on which most people focus. Rather it is the risk of principal loss in a rising interest rate environment (which can happen with or without increasing inflation rates. This risk correlates best with th...
by garlandwhizzer
Fri Apr 12, 2013 11:08 am
Forum: Investing - Theory, News & General
Topic: Charles Ellis says stay out of bonds
Replies: 122
Views: 12899

Re: Charles Ellis says stay out of bonds

I totally agree with CyberBob and SpaceCommander on this one. I have already lowered my bond allocation to 25% of my portfolio, anticipating a zero or slightly negative real return on bonds over the next decade. I am keeping some bonds as an anchor for stormy times and I plan to rebalance into stock...
by garlandwhizzer
Wed Apr 10, 2013 12:53 pm
Forum: Investing - Theory, News & General
Topic: A reason to hold bonds in taxable accounts?
Replies: 10
Views: 1112

Re: A reason to hold bonds in taxable accounts?

I think that it can be important for some investors, myself included, to hold a core of safe money market funds plus short term-intermediate term high quality bonds in a taxable account that is sufficient to provide all living expenses for two to three years. This allows one to sleep at night when s...
by garlandwhizzer
Fri Apr 05, 2013 12:00 pm
Forum: Investing - Theory, News & General
Topic: Regarding V Tot Bond Mkt I vs Short Term Invest Gr I
Replies: 5
Views: 1159

Re: Regarding V Tot Bond Mkt I vs Short Term Invest Gr I

Munir wrote: Why is the Short Term Investment Grade doing better YTD than Total Bond Index when interest rates have not changed much during this period- not that such a short period of time means much anyway? Because investors fearing the negative effects of rising interest rates on longer duration...
by garlandwhizzer
Fri Apr 05, 2013 11:35 am
Forum: Investing - Theory, News & General
Topic: how to think about the high profits relative to GDP
Replies: 17
Views: 1514

Re: how to think about the high profits relative to GNP

Excellent and thoughtful post, Larry.

Garland Whizzer
by garlandwhizzer
Mon Apr 01, 2013 5:55 pm
Forum: Investing - Theory, News & General
Topic: Morningstar Investors Webcast: Deciphering the Big Picture
Replies: 0
Views: 202

Morningstar Investors Webcast: Deciphering the Big Picture

The video webcast can be accessed at <www.morningstar.com/Cover/videoCenter.aspx?id=590421>

Some interesting food for thought about bonds and stocks in the current environment.

Garland Whizzer
by garlandwhizzer
Mon Apr 01, 2013 12:20 pm
Forum: Investing - Theory, News & General
Topic: What investment does well as interest rates rise?
Replies: 29
Views: 5104

Re: What investment does well as interest rates rise?

I second plannerman's opinion on gofigure's excellent post. Shiller's interview is very informative. He is very knowledgeable, unemotional, and level headed which allowed him to see through both the dot com and housing bubbles before they burst. It turns out that he is a value investor and unafraid ...
by garlandwhizzer
Fri Mar 29, 2013 6:09 pm
Forum: Investing - Theory, News & General
Topic: Thinking about increasing risk. Any advice?
Replies: 46
Views: 3318

Re: Thinking about increasing risk. Any advice?

bobcat2 wrote [quote]For the most recent 13 year period 2000-2012 the real return on the total US stock market was -0.2% per year before expenses. So given the experience of the last 13 years, why are so sure that the stock market will recover from any drop in 10 years or less? True in real inflatio...
by garlandwhizzer
Fri Mar 29, 2013 12:32 pm
Forum: Investing - Theory, News & General
Topic: Is "Age in Bonds" dead? (From "The Affluent Investor:")
Replies: 60
Views: 10350

Re: Is "Age in Bonds" dead? (From "The Affluent Investor:")

I do not accept the concept of glide paths in general and certainly not "age in bonds." For me, it has been dead for a long time. Currently although I'm 66, my bond allocation is 25%, but that is a very personal decision based on my own circumstances and my own rather high level of risk to...
by garlandwhizzer
Fri Mar 29, 2013 12:23 pm
Forum: Investing - Theory, News & General
Topic: Thinking about increasing risk. Any advice?
Replies: 46
Views: 3318

Re: Thinking about increasing risk. Any advice?

I would agree that rebalancing into equities when they are at all time highs is a herd reaction, based on emotion rather than reason. The perception of risk is subjective, and it is often inversely proportional to objective risk. Objectively, the lowest risk environment for adding to equity exposure...
by garlandwhizzer
Mon Mar 25, 2013 11:48 am
Forum: Investing - Theory, News & General
Topic: Re: Investing in house flipping
Replies: 41
Views: 5432

Re: Investing in house flipping

Two points. First investing in "house flipping" is a concentrated and leveraged bet on a tiny slice (DC area) of a market subsegment (real estate). It utterly lacks diversification and it is therefore very risky. Second, see the work of Professor Shiller at Yale on the long term inflation ...
by garlandwhizzer
Fri Mar 22, 2013 10:15 pm
Forum: Investing - Theory, News & General
Topic: Aren't V & S a less efficient way to increase risk?
Replies: 10
Views: 1369

Re: Aren't V & S a less efficient way to increase risk?

A simple point. S and V have worked in the past over long periods of time, rewarding investors who had the patience to hold them through the inevitable occasional downdrafts relative to L and G. Does this mean with certainty that that pattern will persist indefinitely into the future? I don't think ...
by garlandwhizzer
Thu Mar 21, 2013 9:43 pm
Forum: Investing - Theory, News & General
Topic: Why target date funds add TIPS only at retirement?
Replies: 36
Views: 4225

Re: Why target date funds add TIPS only at retirement?

nisi wrote: If interest rates rise in the absence of inflation, they rise. It hits TIPS and it hurts nominal bonds (and, of course, it also hits stocks, a point which many people seem to overlook--but I digress). It doesn't hit TIPS any worse than nominal bonds. True that inflation hits everything, ...
by garlandwhizzer
Thu Mar 21, 2013 11:51 am
Forum: Investing - Theory, News & General
Topic: Why target date funds add TIPS only at retirement?
Replies: 36
Views: 4225

Re: Why target date funds add TIPS only at retirement?

There is a vulnerability and a risk in TIPS that few mention. In contrast to other bonds, TIPS do offer inflationary protection, but what if interest rates rise in the absence of significant inflation? For example, if investors become disenchanted with bonds due to historically low yields from unpre...
by garlandwhizzer
Wed Mar 13, 2013 1:05 pm
Forum: Investing - Theory, News & General
Topic: Ned Davis research on size and value premiums
Replies: 7
Views: 1201

Ned Davis research on size and value premiums

Interesting article, not sure if his points are valid, but food for thought. Ned is a tactical asset allocator, an active manager, so not a true Boglehead. Still, his research suggests that world wide over the last 13 years neither the value nor the size premium have been either significant or persi...
by garlandwhizzer
Tue Mar 12, 2013 11:33 am
Forum: Investing - Theory, News & General
Topic: Invest like Buffett: 50/50 stocks/bonds and 6.6% exp return?
Replies: 3
Views: 1033

Re: Invest like Buffett: 50/50 stocks/bonds and 6.6% exp ret

There's a big difference in the asset allocation of Buffett's Pension Plans and Berkshire Hathaway, his fund. Their goals are different. BRK aims to maximize total returns for the long run, greater than a decade, and Buffett is not optimistic about long term bond returns. Fiduciary duty in a pension...
by garlandwhizzer
Tue Mar 12, 2013 11:17 am
Forum: Investing - Theory, News & General
Topic: under performance of EM vs US
Replies: 11
Views: 1895

Re: under performance of EM vs US

rm wrote
I can't find a good vehicle for EM small cap (apart from DFA which I don't have access to)


Check out EWX and DGS.

Garland Whizzer
by garlandwhizzer
Thu Mar 07, 2013 9:42 pm
Forum: Investing - Theory, News & General
Topic: Indexes continue to beat active management
Replies: 14
Views: 1200

Re: Indexes continue to beat active management

lawman3966 wrote: "Moreover, I suspect this underperformance would occur due to all the long-established factors like trading costs, fees, taxes, and bad market timing decisions, with or without the advisor salaries being "egregious." The following excerpt is from an article written b...
by garlandwhizzer
Thu Mar 07, 2013 12:11 pm
Forum: Investing - Theory, News & General
Topic: Indexes continue to beat active management
Replies: 14
Views: 1200

Indexes continue to beat active management

From Yahoo: Active managers used to offer the excuse that stock performance correlations were so high, the risk-on versus risk-off pattern, and that was the reason they couldn't beat indexes. Now stock market correlations are decreasing and still active managers are underperforming. One thing hasn't...
by garlandwhizzer
Wed Mar 06, 2013 6:17 pm
Forum: Investing - Theory, News & General
Topic: The VIX as a hedge of market risk
Replies: 28
Views: 2598

Re: The VIX as a hedge of market risk

Hedging loses in an up market. It may marginally do better in a down market. The long history of the stock market trends up, not down, and therefore hedging with VIX for the very long haul is a losing strategy just as are most active strategies. It is cost generating active trading, something most o...
by garlandwhizzer
Wed Mar 06, 2013 12:25 pm
Forum: Investing - Theory, News & General
Topic: The VIX as a hedge of market risk
Replies: 28
Views: 2598

Re: The VIX as a hedge of market risk

Hedging may increase returns in a down market by reducing losses. It decreases returns in an up market, one reason why the average hedge fund has underperformed TSM and S&P 500 in recent years. Warren Buffett's bet that the S&P 500 would outperform a cherry picked portfolio of hedge funds ru...
by garlandwhizzer
Wed Mar 06, 2013 12:03 pm
Forum: Investing - Theory, News & General
Topic: Recent bull market and changes in perception of AA
Replies: 7
Views: 623

Re: Recent bull market and changes in perception of AA

"Age in years" for bond allocation worked well when Bogle first suggested it. Given today's interest rate environment, it is almost certain to substantially reduce long term portfolio returns going forward relative to a more aggressive stock/bond mix. Personally, I'll choose to tolerate th...
by garlandwhizzer
Wed Mar 06, 2013 11:35 am
Forum: Investing - Theory, News & General
Topic: Vanguard's Principles for Investing Success
Replies: 3
Views: 641

Vanguard's Principles for Investing Success

New research paper from Vanguard. Definitely worth reading.

personal.vanguard.com/pdf/s700.pdf

Garland Whizzer
by garlandwhizzer
Tue Mar 05, 2013 5:37 pm
Forum: Investing - Theory, News & General
Topic: 5-year high news
Replies: 12
Views: 1225

Re: 5-year high news

ResNullis wrote» Tue Mar 05, 2013 6:11 pm For equity investing to make any sense at all on a buy and hold basis, then "new highs" need to happen all the time, not just once every 5 or 10 years. I don't understand your point. Over the past 10 years with dividends reinvested VTSMX has gained...
by garlandwhizzer
Tue Mar 05, 2013 12:32 pm
Forum: Investing - Theory, News & General
Topic: The VIX as a hedge of market risk
Replies: 28
Views: 2598

Re: The VIX as a hedge of market risk

As for hedging stock market risk, don't high quality bonds do exactly that? Do we need really need another hedge? Is this yet another financial product created by Wall Street to extract money from investors? If you're so concerned about risk, you can always lower your asset allocation to equities an...
by garlandwhizzer
Mon Mar 04, 2013 6:50 pm
Forum: Investing - Theory, News & General
Topic: Apple's plunge singlehandedly disproves EMH ?
Replies: 38
Views: 2904

Re: Apple's plunge singlehandedly disproves EMH ?

I think Nisi's got it right. Short term the market does show inefficiencies. Even so the question is: can they be consistently exploited? The evidence on this question is clear. Most who actively try to exploit them fail to do so consistently and given their higher cost structure, underperform compa...
by garlandwhizzer
Sun Mar 03, 2013 1:52 pm
Forum: Investing - Theory, News & General
Topic: Huge Index Fund "Style Drift" (REITs No Longer Value-Tilted)
Replies: 22
Views: 2829

Re: Huge Index Fund "Style Drift" (REITs No Longer Value-Til

I think DaveS hit the nail on the head. Quite simply on a fundamental basis, REITS were attractively valued years ago but this is no longer true. Due to investors frantic stretch for yield in a yield-free world and to their perceived superiority of REITS in terms of inflation risk relative to bonds,...
by garlandwhizzer
Fri Mar 01, 2013 11:06 am
Forum: Investing - Theory, News & General
Topic: Bogleheads, why is this taboo? [Use Leverage in a Portfolio]
Replies: 189
Views: 21100

Re: Bogleheads, why is this taboo? [Use Leverage in a Portfo

Leverage is fine as long as things are going up in price. In a prolonged severe bear market or a black swan event, both of which are unpredictable in onset and in severity, leverage is deadly, with the real possibility that you can get wiped out. It is also a costly strategy in terms of execution, e...
by garlandwhizzer
Wed Feb 27, 2013 11:33 am
Forum: Investing - Theory, News & General
Topic: Sales on Wall Street
Replies: 6
Views: 791

Re: Sales on Wall Street

Buying extreme market dips can be profitable but is tricky because one never knows if there is another big leg to the downside waiting around the corner. I believe the best but not infallible indicator of when the risk/reward tradeoff is maximal for buying when stocks are "on sale" is dete...
by garlandwhizzer
Mon Feb 25, 2013 12:07 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth's 5% income strategy
Replies: 34
Views: 4020

Re: Allan Roth's 5% income strategy

I agree with Allan Roth and Rick Ferri. There is nothing magical about dividends and their recent popularity has stretched valuations of high dividend stocks in the wrong way. Total return is where the focus should be, which is certainly more tax efficient.

Garland Whizzer
by garlandwhizzer
Sun Feb 24, 2013 11:13 am
Forum: Investing - Theory, News & General
Topic: So what will people do? [if bond bubble bursts]
Replies: 66
Views: 5902

Re: So what will people do? [if bond bubble bursts]

I am not waiting for the bond market to bust before I make changes. I believe that it is not a matter of "if" but of "when" it will bust, so I have already pre-emptively reduced bond exposure to 25% of my portfolio because I strongly believe that in real inflation adjusted dollar...
by garlandwhizzer
Tue Feb 19, 2013 1:11 pm
Forum: Investing - Theory, News & General
Topic: Luck, skill, or Beardstown Lady?
Replies: 64
Views: 5757

Re: Luck, skill, or Beardstown Lady?

I do see the opinions of Adler and others in the article which akiva listed, opinions which are based on their interpretations of aggregate individual investor psychology. I do not see any data that reliably backs up that claim. What they claim--that investors hold on to losers and sell winners for ...
by garlandwhizzer
Tue Feb 19, 2013 12:01 pm
Forum: Investing - Theory, News & General
Topic: Luck, skill, or Beardstown Lady?
Replies: 64
Views: 5757

Re: Luck, skill, or Beardstown Lady?

akiva wrote No. The fact that position A is in the black for you and position B is in the red for you doesn't tell you anything about what the market is going to do. But ex post facto, the evidence is that people sell stocks like A and replace them with ones that do not do as well, but hold onto sto...
by garlandwhizzer
Fri Feb 15, 2013 5:42 pm
Forum: Investing - Theory, News & General
Topic: Market Cap Weighted Indexes vs Sector-Equal Weight Indexes
Replies: 15
Views: 1859

Re: Market Cap Weighted Indexes vs Sector-Equal Weight Index

Akiva wrote There are plenty of people on this board with 70-80% stock allocations, and I think that taking that kind of volatility is just plain crazy for the marginal additional returns you are getting. If your portfolio is large enough, you can get equivalent returns for much less risk with a sli...
by garlandwhizzer
Mon Feb 11, 2013 8:21 pm
Forum: Investing - Theory, News & General
Topic: Is 3% the new safe withdrawal rate for retirees?
Replies: 101
Views: 8873

Is 3% the new safe withdrawal rate for retirees?

Morningstar research on the topic of safe withdrawal rates taking into account the current low interest environment for bonds.

<www.morningstar.com/cover/videocenter.aspx?id=582877>
by garlandwhizzer
Mon Feb 11, 2013 6:30 pm
Forum: Investing - Theory, News & General
Topic: Small/Value Tilt question
Replies: 27
Views: 3434

Re: Small/Value Tilt question

I don't think there's any question in the academic literature that over very long periods of time, SCV outperforms SCG, TSM, or the S&P 500. The premium does exist but there are qualifiers. First, the outperformance comes with higher volatility. Second, in contrast to the academic literature, ma...
by garlandwhizzer
Mon Feb 11, 2013 5:52 pm
Forum: Investing - Theory, News & General
Topic: Mean Reversion of Equity Prices: Less than Meets the Eye?
Replies: 38
Views: 3291

Re: Mean Reversion of Equity Prices: Less than Meets the Ey

Fascinating post, Taylor. Thanks. Jeremy Siegel is a knowledgeable cheerleader for stocks and particularly high dividend stocks and value stocks. His long term charts in this post tend to substantiate his point of view at least over very long periods of time. Also his concern about the future of dev...
by garlandwhizzer
Mon Feb 11, 2013 12:52 pm
Forum: Investing - Theory, News & General
Topic: For Value Stock Lovers
Replies: 4
Views: 1039

Re: For Value Stock Lovers

Interesting post. Thanks.

Garland Whizzer
by garlandwhizzer
Mon Feb 11, 2013 12:46 pm
Forum: Investing - Theory, News & General
Topic: Mean Reversion of Equity Prices: Less than Meets the Eye?
Replies: 38
Views: 3291

Re: Mean Reversion of Equity Prices: Less than Meets the Ey

P/E ratios and other good measures of fundamental valuation do in fact tend to revert to the mean. The Japan example of 1990 to present that everyone likes to use to deny mean reversion was in fact a mean reversion in P/E ratios from outrageous P/E levels (>60) to present levels that are I believe l...
by garlandwhizzer
Fri Feb 08, 2013 7:20 pm
Forum: Investing - Theory, News & General
Topic: Charlie Ellis & Burton Malkiel say 0% bonds OK under 50
Replies: 155
Views: 23289

Re: Charlie Ellis & Burton Malkiel say 0% bonds OK under 50

Needless to say, I totally agree with Eric on this one. Vanguard's Target Retirement Funds are set up to offer very conservative investors a low volatility path. They do not aim at or claim to optimize performance. Short term volatility may provoke anxiety in investors, but a steady path of diminish...
by garlandwhizzer
Fri Feb 08, 2013 11:47 am
Forum: Investing - Theory, News & General
Topic: Charlie Ellis & Burton Malkiel say 0% bonds OK under 50
Replies: 155
Views: 23289

Re: Charlie Ellis & Burton Malkiel say 0% bonds OK under 50

Nisi wrote Vanguard gives a capsule summary of their methodology. It is what it is. The funny thing is that when I post results like this, the typical response is "it must be wrong, because it's not what I expected." Of course, if you want a 100% stocks portfolio to do better, you can get ...
by garlandwhizzer
Thu Feb 07, 2013 1:39 pm
Forum: Investing - Theory, News & General
Topic: Charlie Ellis & Burton Malkiel say 0% bonds OK under 50
Replies: 155
Views: 23289

Re: Charlie Ellis & Burton Malkiel say 0% bonds OK under 50

I totally agree with a 100% equity position for those less than 50 who have a stock market stomach. Considering long term returns it is the way to go in my opinion. If you have a stock dominated portfolio, however, it is critical to be able to tolerate large losses of portfolio value without letting...
by garlandwhizzer
Mon Feb 04, 2013 12:00 pm
Forum: Investing - Theory, News & General
Topic: Rick Ferri [Selected as WSJ Industry Expert]
Replies: 19
Views: 3280

Re: Rick Ferri

Well deserved accolades for Rick. I much enjoy and learn from the insights he shares with us on this forum. Thanks, Rick.

Garland Whizzer
by garlandwhizzer
Sun Feb 03, 2013 11:36 am
Forum: Investing - Theory, News & General
Topic: A question for retirees/pre-retirees
Replies: 25
Views: 1829

Re: A question for retirees/pre-retirees

I sell equities every year to provide a years worth of cash. I usually do this late in the year near the holidays or early the next year in Jan., which historically have usually been strong periods for equity performance. Sometimes I'll do it mid-year if the market is doing quite well and I wish to ...
by garlandwhizzer
Fri Jan 25, 2013 11:37 am
Forum: Investing - Theory, News & General
Topic: The Future Looks Bright for Stocks
Replies: 17
Views: 2188

Re: The Future Looks Bright for Stocks

I totally agree with your comments, Rick. You have been right to be bullish on stocks for years now, although most investors have continued to sell stocks and buy bonds that yield less than inflation. Being a confessed market timer, I have put my money where my mouth is and have increased my equity ...
by garlandwhizzer
Mon Jan 21, 2013 1:11 pm
Forum: Investing - Theory, News & General
Topic: Movement from bonds
Replies: 32
Views: 2493

Re: Movement from bonds

I have already changed my asset allocation, reducing bond exposure to 30% even though I'm retired and have been for 15 years, based on expected differences in bond and equity performance over the next decade or more. Although a good argument can be made for having a fixed bond/equity asset allocatio...
by garlandwhizzer
Fri Jan 18, 2013 1:24 pm
Forum: Investing - Theory, News & General
Topic: 4% withdrawal rate during retirement?
Replies: 80
Views: 6494

4% withdrawal rate during retirement?

From the Retirement Research Blog. The full article is accessible on the Oblivious Investor web site. Bogleheads comments? WEDNESDAY, JANUARY 16, 2013 New research article: The 4% Rule is Not Safe in a Low-Yield World I've completed a new research article along with Michael Finke and David Blanchett...
by garlandwhizzer
Wed Jan 16, 2013 10:48 am
Forum: Investing - Theory, News & General
Topic: Gus Sauter Worried About "Bond Bubble"
Replies: 20
Views: 3318

Re: Gus Sauter Worried About "Bond Bubble"

I think Sauter is exactly correct and that a long (more than a decade) and very unpleasant bear market in bonds is soon to start. That said, a bear market in bonds means zero or perhaps slightly negative REAL return probably for a decade or more, not the roller coaster ride of equities. Also, althou...
by garlandwhizzer
Sat Jan 12, 2013 12:15 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets may not yield higher growth
Replies: 34
Views: 2473

Re: Emerging markets may not yield higher growth

by EDN » Fri Jan 11, 2013 6:31 pm Emerging Markets are tricky, as posters before have mentioned that economic growth in EM tends to be above the average of the developed world, meaning that they are the classic "growth" stock of the regional marketplace. However, emerging markets also hav...
by garlandwhizzer
Fri Jan 11, 2013 11:53 am
Forum: Investing - Theory, News & General
Topic: Total Bond fund tanks
Replies: 63
Views: 9981

Re: Total Bond fund tanks

SSSS wrote: Analysts generally advise fund investors to target small-cap stocks in order to tap into the true growth story behind emerging markets. True perhaps, for nominal dollars, but not for real inflation-adjusted dollars or real purchasing power. How much purchasing power does one lose in 5 ye...

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