Search found 1331 matches

by garlandwhizzer
Mon Oct 24, 2016 11:49 am
Forum: Investing - Theory, News & General
Topic: If the interest rates rise, won't the bond prices go down?
Replies: 22
Views: 2874

Re: If the interest rates rise, won't the bond prices go down?

The biggest risk to bonds in my view is not the Fed's expected snail-like pace of minuscule (0.25%) rises in interest rates. That is a tempest in a teapot. Bonds will in time recover nicely from that. The Fed can exert some control on short term rates, but has much less control on long term rates wh...
by garlandwhizzer
Fri Oct 21, 2016 12:26 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's latest market returns forecast
Replies: 380
Views: 29649

Re: Larry Swedroe's latest market returns forecast

Great article, Larry, thanks for posting. I completely agree that INTL diversification is likely to pay off in the future. I believe that INTL and EM in particular are very likely to outperform US including US SCV, US MOM, and US multi-factor funds in the future. Much discussion occurs in this Forum...
by garlandwhizzer
Thu Oct 20, 2016 3:11 pm
Forum: Investing - Theory, News & General
Topic: Meb Faber article links
Replies: 6
Views: 806

Re: Meb Faber article links

I clicked on Meb Faber's article and thought it was interesting and informative. Thanks for posting. Mebane Faber examines many asset allocation models (including Larry's, El Arian's, Swenson's, 60/40, SCV tilt, Buffett's 90/10, etc.,) with long term backtesting (40+ yrs.) looking at returns, volati...
by garlandwhizzer
Tue Oct 18, 2016 2:34 pm
Forum: Investing - Theory, News & General
Topic: Can gold and real estate grow in real terms in the very long run?
Replies: 32
Views: 2666

Re: Can gold and real estate grow in real terms in the very long run?

Where there are no building constraints on creation of new residential real estate, the average appreciation is expected to be, net of costs such as real estate taxes, maintenance, etc, about the inflation rate long term as long as demand doesn't decrease. If demand decreases--plants close, jobs dis...
by garlandwhizzer
Fri Oct 14, 2016 12:30 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness - Turning Over Accepted Wisdom with Turnover
Replies: 29
Views: 2776

Re: Cliff Asness - Turning Over Accepted Wisdom with Turnover

in_reality wrote: Why is someone who only holds the TSM defined as a passive investor? They have made an active choice to not hold the market. AlohaJoe replied: Because that's how Sharpe defines it in his paper? He's pretty explicit about it. in_reality replied: Yeah I know. What I don't understand...
by garlandwhizzer
Thu Oct 13, 2016 12:47 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness - Turning Over Accepted Wisdom with Turnover
Replies: 29
Views: 2776

Re: Cliff Asness - Turning Over Accepted Wisdom with Turnover

Sharpe's point is really very simple and it relates primarily to the king of indexes in my view, TSM. If the passive investor holds a market weighted TSM portfolio, all other active/factor investors combined must by definition hold in aggregate a market weighted portfolio. If you subtract a market w...
by garlandwhizzer
Wed Oct 12, 2016 9:50 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness - Turning Over Accepted Wisdom with Turnover
Replies: 29
Views: 2776

Re: Cliff Asness - Turning Over Accepted Wisdom with Turnover

How very strange that two who make their livelihood from selling non-market weighted indexes should find fault with Bill Sharpe's "The Arithmetic of Active Management." Certainly with some indexes, one can argue that turnover, being added to or subtracted from the index, may create frictio...
by garlandwhizzer
Wed Oct 05, 2016 2:03 pm
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS Auction: Announced 10/13: yield 0.6%?
Replies: 66
Views: 5725

Re: 30 yr TIPS Auction: Announced 10/13: yield 0.6%?

The fact that there is so much interest aroused by a 0.6% real inflation adjusted yield over a 30 year duration says a lot about where investor sentiment lies now. We're willing to settle for a piddling long term return if inflation risk is removed from the equation and we're guaranteed to get the m...
by garlandwhizzer
Mon Oct 03, 2016 11:17 am
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS Auction: Announced 10/13: yield 0.6%?
Replies: 66
Views: 5725

Re: 30 yr TIPS Auction: Announced 10/13: yield 0.6%?

30 years carries a lot of duration risk to principle for a 0.6% real return even if principle keeps up with inflation. If in ten or twenty years TIPS are yielding 2+% real (which 10 yr. TIPS did in the early 2000s), who will want to lock up long term money for 0.6% real yield? Significant decline in...
by garlandwhizzer
Fri Sep 02, 2016 10:02 pm
Forum: Investing - Theory, News & General
Topic: Asness - Indexing Is Capitalism at Its Best
Replies: 8
Views: 1610

Re: Asness - Indexing Is Capitalism at Its Best

Cliff Asness is a very knowledgeable and, I believe, well meaning guy whose comments stick very close to the truth as he sees it. It is to his credit that he lauds indexing rather than stock picking active management and makes the point that indexing, be it cap weight or fundamental, has helped the ...
by garlandwhizzer
Wed Aug 31, 2016 4:25 pm
Forum: Investing - Theory, News & General
Topic: bad economic news good for stock market?
Replies: 11
Views: 1254

Re: bad economic news good for stock market?

Andyrunner wrote: Bad news sells, good news does not, that is why you see so much more bad news. Media companies are in the business to sell ads not inform people. That is my cynical view on the media. 1+ I believe Andyrunner's view of the media is realistic and accurate. Sometimes it's appropriate...
by garlandwhizzer
Wed Aug 31, 2016 1:50 pm
Forum: Investing - Theory, News & General
Topic: bad economic news good for stock market?
Replies: 11
Views: 1254

Re: bad economic news good for stock market?

Financial firms and the financial media are obsessed with the very short term daily or even hourly market news and market variations. Why is the market going up (or down) today? What piece of news drives these short term changes? What will the FED do next? For those with a long time horizon, I think...
by garlandwhizzer
Wed Aug 31, 2016 1:30 pm
Forum: Investing - Theory, News & General
Topic: Investing early..!
Replies: 31
Views: 2049

Re: Investing early is better. Myth debunked!

The earlier you start investing, the better you long term outcome. That is not a myth. It has been a historical fact in the US if the time frame is at least several decades long. If you invest some fixed amount from your salary every month, even if it is a small amount, over a long period of several...
by garlandwhizzer
Tue Aug 30, 2016 7:23 pm
Forum: Investing - Theory, News & General
Topic: Leverage Success Stories
Replies: 51
Views: 4948

Re: Leverage Success Stories

Leverage success stories certainly exist. So do leverage failure stories. Bankruptcy court is a good place to find leverage failure stories especially with high levels of leverage. I personally know of folks who were once got rich off real estate investing but got over leveraged into bubble real est...
by garlandwhizzer
Mon Aug 29, 2016 3:29 pm
Forum: Investing - Theory, News & General
Topic: What is the dividend yield of VWRD, 2% or nearly 3%?
Replies: 5
Views: 938

Re: What is the dividend yield of VWRD, 2% or nearly 3%?

Much of the dividend yield of VWRD is not in dollars but in foreign currencies. Therefore the problem may be with translating foreign dividends in foreign currencies into dollars which brings currency market fluctuations into the picture. Currencies go up and down relative to the dollar, sometimes q...
by garlandwhizzer
Mon Aug 29, 2016 12:37 pm
Forum: Investing - Theory, News & General
Topic: Retirees Saying No To The Market
Replies: 57
Views: 7839

Re: Retirees Saying No To The Market

Most of those at or close to retirement whom I personally know are much more heavily invested in real estate than in stocks and bonds. I believe that only a minority of potential investors have sufficient market knowledge background and, more importantly, are emotionally equipped to deal with the up...
by garlandwhizzer
Sun Aug 28, 2016 12:48 pm
Forum: Investing - Theory, News & General
Topic: Adding Inflation Protection to a Portfolio
Replies: 14
Views: 1637

Re: Adding Inflation Protection to a Portfolio

There are ways to hedge inflation risk but not insure against it. Insuring against it requires TIPS or inflation adjusted annuities but neither of them offer any significant expected positive real return going forward from here. Bernstein has made the point that international diversification and com...
by garlandwhizzer
Fri Aug 26, 2016 1:18 pm
Forum: Investing - Theory, News & General
Topic: Damodaran: CAPE is no-good horrible & a market timing spreadsheet
Replies: 25
Views: 2939

Re: Damodaran: CAPE is no-good horrible & a market timing spreadsheet

The fact that CAPE 10 looks high now suggests but does not prove that equity returns over the next decade will be lower than in the long term historical past. The fact that ratios of earnings yields between bonds or cash on the one hand and CAPE 10 on the other look normal does not imply that equiti...
by garlandwhizzer
Wed Aug 24, 2016 6:02 pm
Forum: Investing - Theory, News & General
Topic: Why Does Wealthfront Allocate So Much To Emerging Markets?
Replies: 9
Views: 1378

Re: Why Does Wealthfront Allocate So Much To Emerging Markets?

I believe that Burton Malkiel is not alone in suggesting an overweight of EM in current market conditions. Both GMO (Jeremy Grantham) and Research Affiliates (Rob Arnott) are projecting much higher returns for EM equities over the next decade than for US equities. That is why, I believe, they recomm...
by garlandwhizzer
Wed Aug 24, 2016 3:28 pm
Forum: Investing - Theory, News & General
Topic: UK TIPS track record - what can we learn?
Replies: 18
Views: 1184

Re: UK TIPS track record - what can we learn?

longinvestwrote: Just for perspective, let's compare how stocks did relative to bonds, in the high-inflation era of the 1970s. Here's both our nominal 10 to 2-year government bond fund* and the S&P 500** fighting inflation**. This time, I've selected the worst possible starting year (1973): Ima...
by garlandwhizzer
Wed Aug 24, 2016 3:17 pm
Forum: Investing - Theory, News & General
Topic: P/E Ratio Question
Replies: 22
Views: 1904

Re: P/E Ratio Question

I believe that during a severe recession it's not only corporate profits that decline dramatically. There are earnings adjustments in GAAP earnings, one time write downs due to decreased value of corporate assets, etc., that can affect both book value and GAAP earnings dramatically and thereby disto...
by garlandwhizzer
Tue Aug 23, 2016 1:19 pm
Forum: Investing - Theory, News & General
Topic: Diversification
Replies: 8
Views: 903

Diversification

Although the point is not a new one, this is an Interesting article at least to me. Comments?

http://www.schwab.com/public/schwab/nn/articles/Your-portfolio-may-be-less-diversified-than-you-think

Garland Whizzer
by garlandwhizzer
Tue Aug 23, 2016 1:08 pm
Forum: Investing - Theory, News & General
Topic: Long‑Maturity TIPS in Retirement Portfolios
Replies: 3
Views: 510

Re: Long‑Maturity TIPS in Retirement Portfolios

Long maturity TIPS do eliminate inflation risk but in a rising interest rate environment where bond yields may be increasing faster than inflation their principal value declines in proportion to their duration just like nominal bonds do. If you can live off the real yields generated by TIPS and thus...
by garlandwhizzer
Sun Aug 21, 2016 12:11 pm
Forum: Investing - Theory, News & General
Topic: Question about bond fund duration and current SEC yield
Replies: 2
Views: 312

Re: Question about bond fund duration and current SEC yield

Kelly wrote: Where am I wrong in these three scenarios (assumes held in an IRA and interest is reinvested): 1- If rates remain unchanged the annualized return over the 7.8 year duration will be 0.4%. 2- If rates rise, there will be a NAV decline but will be reinvesting at a higher rate and will bre...
by garlandwhizzer
Fri Aug 19, 2016 7:24 pm
Forum: Investing - Theory, News & General
Topic: Growth, Value or Both?
Replies: 19
Views: 1551

Re: Growth, Value or Both?

nedsaid wrote: My portfolio pizza is already has a lot of slices and I don't think I want to keep adding more. But I suppose I will give International Small Value some thought. Do you have a fund or ETF that you recommend? I think the best SV INTL funds are run by DFA, but it is against my religion...
by garlandwhizzer
Fri Aug 19, 2016 12:08 pm
Forum: Investing - Theory, News & General
Topic: Growth, Value or Both?
Replies: 19
Views: 1551

Re: Growth, Value or Both?

nedsaid wrote: I do small/value tilt myself. The key word is tilt. I still have growth investments. Nedsaid, even though I argue for TSM, like you, I tilt to SCV but not with the lions's share of the portfolio in US equities. My tilt to SCV is larger in INTL than in US. Part of the reason for my ti...
by garlandwhizzer
Fri Aug 19, 2016 9:36 am
Forum: Investing - Theory, News & General
Topic: Growth, Value or Both?
Replies: 19
Views: 1551

Re: Growth, Value or Both?

At least part of the difference in growth versus value performance between Taylor's example and this website [url]Comparing the results of value and growth stock market indexes[/url] is that they are comparing different things. The website gives results for cost free indexes: no trading costs, no ma...
by garlandwhizzer
Wed Aug 17, 2016 1:04 pm
Forum: Investing - Theory, News & General
Topic: John Bogle says it is ok to just hold US stock index and Bond index, no international stocks
Replies: 45
Views: 5620

Re: John Bogle says it is ok to just hold US stock index and Bond index, no international stocks

dh wrote: Indeed! There is no right or wrong answer, just many approaches (I cannot think of the exact wording of Taylor's famous "many roads to Dublin" quote). Compare John Bogel's portfolio to Charles Ellis who recently stated it is ok to have US stock index fund, international stock in...
by garlandwhizzer
Wed Aug 17, 2016 12:43 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 211
Views: 12736

Re: Better growth? Or on how the value premium ends

Very interesting post, backpacker, thanks for posting. Poses a good question: will increased efficiency of markets due to dominance by professionals doom the pursuit of alpha?

Garland Whizzer
by garlandwhizzer
Tue Aug 16, 2016 8:12 pm
Forum: Investing - Theory, News & General
Topic: Who trades on momentum, and thus who's on the other side
Replies: 22
Views: 1868

Re: Who trades on momentum, and thus who's on the other side

Timing is critical in momentum strategies. Things that outperform in the very short term tend to keep outperforming up to a point in time at which they start underperforming. Timing is critical because if these stocks are held too long they eventually depart so far from underlying economic fundament...
by garlandwhizzer
Tue Aug 16, 2016 1:57 pm
Forum: Investing - Theory, News & General
Topic: Interesting take on where interest rates are headed
Replies: 9
Views: 1834

Re: Interesting take on where interest rates are headed

garlandwhizzer wrote: labor market reforms which are sorely needed in Europe and Japan but are politically unpopular there. boglerdude wrote in response to my post: Reforms like? For Japan I suggest reading http://voxeu.org/article/fixing-japan-s-labour-market For Europe https://www.weforum.org/age...
by garlandwhizzer
Mon Aug 15, 2016 6:38 pm
Forum: Investing - Theory, News & General
Topic: Interesting take on where interest rates are headed
Replies: 9
Views: 1834

Re: Interesting take on where interest rates are headed

The evidence thus far does not show that negative interest rate policy stimulates the economy at all. Our problem in DM is not that interest rates are too high, but rather that few credit worthy people or corporations want to borrow in order to spend that money stimulating the economy. Monetary poli...
by garlandwhizzer
Mon Aug 15, 2016 1:00 pm
Forum: Investing - Theory, News & General
Topic: The annuity puzzle, and a suggestion
Replies: 108
Views: 7951

Re: The annuity puzzle, and a suggestion

#Cruncher's post is fascinating and thorough, giving us much to think about. What the internal rate of return doesn't tell us however has to do with term risk. The longer the term, the higher the risk of two things impacting real investor returns: inflation and company viability. If your benefits ar...
by garlandwhizzer
Mon Aug 15, 2016 11:27 am
Forum: Investing - Theory, News & General
Topic: The annuity puzzle, and a suggestion
Replies: 108
Views: 7951

Re: The annuity puzzle, and a suggestion

longinvest wrote: I really like Taylor Larimore's position on SPIAs: viewtopic.php?p=2791408#p2791408 Taylor Larimore wrote: In my opinion (I once sold annuities), it is better to wait until the late 70s, or longer, for these reasons: * The premium is less or the lifetime income is larger. * You mi...
by garlandwhizzer
Fri Aug 12, 2016 8:47 am
Forum: Investing - Theory, News & General
Topic: Another look at corporate bonds
Replies: 209
Views: 14514

Re: Another look at corporate bonds

I think it's overstating the case to say that there is never any place for any type of corporate bonds in a portfolio. Treasuries look compelling on backtesting during the greatest bond market in history. But will that continue going forward from here, yielding 1.5% for ten years? They provide safet...
by garlandwhizzer
Thu Aug 11, 2016 2:25 pm
Forum: Investing - Theory, News & General
Topic: Part 2 of the low volatility post
Replies: 9
Views: 881

Re: Part 2 of the low volatility post

Larry wrote regarding low volatility: I have no idea if they are overpriced. What I do know is that high prices project lower future returns. I totally agree. I have stood on the sidelines for years watching high div and REITS get more and more overvalued, going higher and higher. I never got on th...
by garlandwhizzer
Wed Aug 10, 2016 1:57 pm
Forum: Investing - Theory, News & General
Topic: Part 2 of the low volatility post
Replies: 9
Views: 881

Re: Part 2 of the low volatility post

Good article, thanks for posting, Larry. One question: Low Vol and High Div may well be too popular, overpriced at present along with a few other market segments. The question is: is this a cyclical trend which will in the near future be reversed? Or is it a secular change in a world where economic ...
by garlandwhizzer
Wed Aug 10, 2016 1:34 pm
Forum: Investing - Theory, News & General
Topic: Bogle & Buffett on International Investing
Replies: 107
Views: 10606

Re: Bogle & Buffett on International Investing

I don't blindly follow what anyone advises, even Bogle and Buffett, my two favorite heroes in the investing world. Whenever there are many differing expert opinions on a subject like international allocation I try to read all points of view and make my own decision, taking full responsibility for it...
by garlandwhizzer
Wed Aug 10, 2016 1:16 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds taxed more than stocks?
Replies: 29
Views: 3766

Re: Why are bonds taxed more than stocks?

The justification for different treatment is that dividends are double taxed, at the corporate level by firms paying them out and at the personal level by those receiving them. Bonds are single taxed, only to those who receive payments. It is also argued that such preferential tax treatment increase...
by garlandwhizzer
Wed Aug 10, 2016 12:58 pm
Forum: Investing - Theory, News & General
Topic: Rob Arnott warning signs in smart beta
Replies: 8
Views: 1243

Rob Arnott warning signs in smart beta

http://www.marketwatch.com/story/the-pioneer-of-smart-beta-investing-is-flashing-warning-signs-2016-08-10


Comments?

Garland Whizzer
by garlandwhizzer
Thu Aug 04, 2016 7:59 pm
Forum: Investing - Theory, News & General
Topic: A costly mistake made by both investors and advisors
Replies: 240
Views: 18876

Re: A costly mistake made by both investors and advisors

To throw in my two cents worth: I agree with Larry on this one. I adjusted my financial planning a long time ago over such concerns. Predicting future returns is an imperfect art, not a science, so we're not talking about certainty here, only our best guess given current market inputs. Current valua...
by garlandwhizzer
Wed Aug 03, 2016 8:28 pm
Forum: Investing - Theory, News & General
Topic: What is the purpose of a Long/Short Equity Fund fund like AQR QLERX?
Replies: 49
Views: 3091

Re: What is the purpose of a Long/Short Equity Fund fund like AQR QLERX?

What is the purpose of a Long/Short Equity Fund fund like AQR QLERX? The primary purpose of this fund is to generate profits for AQR. It wouldn't exist if AQR didn't see a high probability of profit from it. If it fails to achieve that primary goal, it will disappear and become a victim of survivor...
by garlandwhizzer
Tue Aug 02, 2016 12:51 pm
Forum: Investing - Theory, News & General
Topic: low volatility and high valuations
Replies: 14
Views: 995

Re: low volatility and high valuations

Larry wrote: There are also some other fixed income strategies we are looking closely at which look attractive, including investing in direct to consumer loans (arbing the banks) but taking only the higher end of the credit spectrum. If done right you can get dramatically higher yields (say in 8% r...
by garlandwhizzer
Tue Aug 02, 2016 12:34 pm
Forum: Investing - Theory, News & General
Topic: How can markets keep going up ?
Replies: 131
Views: 10345

Re: How can markets keep going up ?

coachz wrote: Super rich aren't going to invest their money and make crappy returns so I want to know where are they putting their bucks for the big money. 60 billion of super rich money went into Bernie Madoff's Ponzi scheme. Hedge funds which have massively underperformed the S&P 500 for a de...
by garlandwhizzer
Mon Aug 01, 2016 12:27 pm
Forum: Investing - Theory, News & General
Topic: How can markets keep going up ?
Replies: 131
Views: 10345

Re: How can markets keep going up ?

How can markets keep going up? The answer has a lot to do with the following question: How can quality bond yields keep going down? There is an abundance of accumulated wealth in US and DM seeking places to go for safe bonds or relatively safe real gains (US stocks). Historically speaking there is n...
by garlandwhizzer
Sun Jul 31, 2016 8:30 pm
Forum: Investing - Theory, News & General
Topic: How to switch between bonds / stocks to maximize profits
Replies: 23
Views: 1739

Re: How to switch between bonds / stocks to maximize profits

nedsaid wrote: Color me skeptical. 1+ Color me skeptical as well. First of all, I simply cannot believe the numbers. If Auntie has been averaging a compound rate of return of 18%/yr. her money doubles every 4 years. We're asked to believe that she has done this not for 4 years but for 16 years, 4 c...
by garlandwhizzer
Sun Jul 31, 2016 2:34 pm
Forum: Investing - Theory, News & General
Topic: Decided to try timing the market. 100% short on 9/17/15
Replies: 353
Views: 52423

Re: Decided to try timing the market. 100% short on 9/17/15

For those who follow market timing strategies consistently, no one, and I do mean no one, experts included, avoids being served a generous slice of humble pie by the market at some point. Sometimes it works, sometimes it backfires. I believe the data suggests that most who follow these strategies un...
by garlandwhizzer
Thu Jul 28, 2016 4:04 pm
Forum: Investing - Theory, News & General
Topic: Revisiting Dr. Bernstein on REITs
Replies: 29
Views: 3532

Re: Revisiting Dr. Bernstein on REITs

nedsaid wrote: As much as I like and admire Larry Swedroe and Dr. Bill Bernstein, there might be something going on with real estate that they are completely missing. True, nedsaid, and here's another idea that is as close to ensuring bullet proof high returns as possible. I'll short REITs, you buy...
by garlandwhizzer
Thu Jul 28, 2016 11:59 am
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 139
Views: 16374

Re: What rate of return do you use when planning for retirement?

jebmke wrote: Only use real rates (~0 for bonds and 4% for equity). Me, too, for US returns. I expect INTL equity and EM equity to have higher returns going forward but still use 4% estimates for them because their returns, while higher on an expected basis, are less predictable and reliable than U...
by garlandwhizzer
Wed Jul 27, 2016 9:41 pm
Forum: Investing - Theory, News & General
Topic: Revisiting Dr. Bernstein on REITs
Replies: 29
Views: 3532

Re: Revisiting Dr. Bernstein on REITs

InvestorNewb wrote: I feel sorry for the people who sold their REITs after that post, even though he did not suggest doing that. It goes to show that nobody can predict the future. I have to admit I was tempted to sell some of my REITs at the time, since Dr. Bernstein is a well respected author and...

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