Search found 718 matches

by Park
Sun Feb 10, 2019 6:19 pm
Forum: Investing - Theory, News & General
Topic: How "Safe" is Your Bond Fund?
Replies: 43
Views: 4749

Re: How "Safe" is Your Bond Fund?

I'm not sure I understand what you are saying re how safety and a sufficiently long holding period are related. Many new investors bought Total Bond a year ago and started complaining here on Bogleheads that their Total Bond investments had lost value, so they were asking about selling Total Bond a...
by Park
Sun Feb 10, 2019 3:15 pm
Forum: Investing - Theory, News & General
Topic: How Investing Ability Changes With Age --blog post
Replies: 33
Views: 2968

Re: How Investing Ability Changes With Age --blog post

A corollary of the decline in investing ability as one ages is that it may be better to learn about personal finance before the age of 60. How well will you learn, as you advance in years? I'm assuming that as you age, you will retain what you learned earlier.
by Park
Sun Feb 10, 2019 3:08 pm
Forum: Investing - Theory, News & General
Topic: Is Index Investing Just Betting on The U.S Economy?
Replies: 46
Views: 6005

Re: Is Index Investing Just Betting on The U.S Economy?

billthecat wrote: Why can’t Japan fix itself? Subsequently they became zombie banks unable to lend money even for worthy enterprises. In the mid 1990s this dire situation drove the Japanese government to try belatedly to stimulate the economy with deficit spending. Governmental debt which was only ...
by Park
Sun Feb 10, 2019 2:50 pm
Forum: Investing - Theory, News & General
Topic: How Investing Ability Changes With Age --blog post
Replies: 33
Views: 2968

Re: How Investing Ability Changes With Age --blog post

This is an important topic, especially on a board that looks favorably upon DIY investing and whose viewers are probably skewed towards those are at least nearing retirement. "Compounding the cognitive aging issue is overconfidence. Michael Finke, John Howe and Sandra Huston, authors of the study “O...
by Park
Sun Feb 10, 2019 12:39 am
Forum: Investing - Theory, News & General
Topic: Why borrow money in RE but not Stocks?
Replies: 39
Views: 4582

Re: Why borrow money in RE but not Stocks?

An obvious point, but one worth pointing out is that there is embedded leverage in stocks, but not in RE. And as stocks are corporations, a stockowner is not personally liable for the debts of those stocks. There's not many forms of debt where you can say that. Corporations often can get debt at low...
by Park
Sun Jan 27, 2019 10:34 pm
Forum: Investing - Theory, News & General
Topic: Unconventional investment choices
Replies: 86
Views: 8016

Re: Unconventional investment choices

Ooooh. This is fun. My confession:. I think IPS are a silly behavioral finance ploy. I do not have one. Yes, an IPS is meant to be a beavioural ploy. It is meant to help you stay the course. Well aware. For me, an IPS is about as valuable as a sheet of paper that says "don't panic". Your mileage ma...
by Park
Sun Jan 27, 2019 11:29 am
Forum: Investing - Theory, News & General
Topic: Unconventional investment choices
Replies: 86
Views: 8016

Re: Unconventional investment choices

I see cash/fixed income as a way to manage the risk of a cyclical bear markets. So I don't see a need for more than a few years of required income in cash/fixed income. When it comes to cash/fixed income, HISAs and CDs work well. I also believe in factor investing. That's not to increase returns, bu...
by Park
Tue Jan 08, 2019 10:32 am
Forum: Investing - Theory, News & General
Topic: A Test of Warren Buffett's 90:10 Retirement Portfolio
Replies: 33
Views: 6833

Re: A Test of Warren Buffett's 90:10 Retirement Portfolio

"The first change [T1] relates to the annual withdrawal to the behavior of the stock market in the previous year. If stocks have gone up, the retiree takes the annual withdrawal from stocks and then rebalances the portfolio back to the 90/10 allocation. Conversely, if stocks have gone down, the ret...
by Park
Tue Jan 08, 2019 10:25 am
Forum: Investing - Theory, News & General
Topic: A Test of Warren Buffett's 90:10 Retirement Portfolio
Replies: 33
Views: 6833

Re: A Test of Warren Buffett's 90:10 Retirement Portfolio

... The author then discusses two modified 90:10 strategies (T1 and T2), which are dynamic allocation strategies ( market timing? ). "The first change [T1] relates to the annual withdrawal to the behavior of the stock market in the previous year. If stocks have gone up, the retiree takes the annual...
by Park
Thu Jan 03, 2019 11:30 am
Forum: Personal Investments
Topic: Opinions sought $3.5 M Net Worth
Replies: 76
Views: 10065

Re: Opinions sought $3.5 M Net Worth

The following is for the Topic Author, but really, it's also for myself and many others on this board. When you retire, you no longer generate income from your labor, but you still need income. Apart from pensions, your income is going to come from your capital. So in reality, you don't retire: you ...
by Park
Sun Dec 30, 2018 5:37 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 66
Views: 6594

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

Currently you can replace treasuries with corporates in a 50/50 portfolio and pick up 90bps in expected return. In today's interest rate environment that is really valued added. Another way to look at this based upon how much % wise in return do you pick up from the switch. In the 2000 & 2007, you ...
by Park
Sun Dec 30, 2018 5:17 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 66
Views: 6594

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

the DFA Five-Year Global Fixed Income Portfolio DFGBX is currently 55.55% corporates, compared to 25.97% for the category average. The following is from Expected Returns by Antti Ilmanen: "There is one exception to the disappointing performance of credit. In the U.S. credit markets, the highest vol...
by Park
Sun Dec 30, 2018 5:06 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 66
Views: 6594

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

One point that has no one has brought up is the point that current yields of bonds are good proxies for expected returns & the current yields provided by each type of investment. That is true of Treasuries but not stocks (i.e. stocks typically benefit from capital appreciation, whereas Treasuries d...
by Park
Sun Dec 30, 2018 3:34 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Are Corp Bonds Worth Risk?
Replies: 66
Views: 6594

Re: Larry Swedroe: Are Corp Bonds Worth Risk?

the DFA Five-Year Global Fixed Income Portfolio DFGBX is currently 55.55% corporates, compared to 25.97% for the category average. The DFA VA Global Bond Fund has no ticker symbol and isn't listed in Morningstar, but it contains bonds issued by Coca-Cola, Microsoft, Shell, Toyota, Pfizer, Apple, et...
by Park
Sun Dec 30, 2018 1:27 pm
Forum: Personal Investments
Topic: Opinions sought $3.5 M Net Worth
Replies: 76
Views: 10065

Re: Opinions sought $3.5 M Net Worth

Based on your income, I would guess that your job requires a good amount of skill. If you haven't worked in several years, would you still have the skill required to do the job? That should be considered, when one decides whether to retire or work part time. A decision to retire may effectively be i...
by Park
Sun Dec 30, 2018 11:54 am
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

Once again, from Larry Swedroe's above article: "Now, again using Ken French’s data, let’s look at how the size and value premiums performed during those same three periods. 14 Years (1929-1943) U.S. Market Beta: down 0.7%; Size: up 5.8%; Value: up 3.2% 15 Years (1969-1983) U.S. Market Beta: down 0....
by Park
Sun Dec 30, 2018 11:00 am
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

What interests me most is what I can do to decrease the impact of a secular bear market on my portfolio. That's my greatest concern as an investor. Someone who retired in 1929 or 1968 or 2000 had a problem. As mentioned previously, my plan is to use cash/fixed income to decrease the impact of a cycl...
by Park
Sat Dec 29, 2018 7:47 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

When I look over the data that I"ve found, my conclusion is that in a tax advantaged account, dividends modestly decrease the impact of secular bear markets and usually modestly decrease the impact of cyclical bear markets.
by Park
Sat Dec 29, 2018 5:13 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

did it take into account taxes on the dividends if in a taxable acct No, it didn't. I share the concerns expressed by others of dividend stocks presently being overpriced. However, dividends don't tend to go down as much as prices, during a cyclical or secular bear market. That plays an important r...
by Park
Sat Dec 29, 2018 5:01 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

https://www.heartlandadvisors.com/Insights/White-Papers/Dividends-A-Review-of-Historical-Returns Here's some data on the US stock market from Jan 1928 to Dec 2017. The authors "determined all periods during which the market declined a cumulative 10% or more in consecutive negative months. We then ca...
by Park
Sat Dec 29, 2018 12:28 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

CTL (Century Link) yield 14.15%. I'm sure they will never cut that. But when they do their stock price will take a hit. Just looking at how they maintain their physical plant around here (they are the landline and an internet provider) shows me where they are getting the cash to maintain that divid...
by Park
Sat Dec 29, 2018 12:06 pm
Forum: Investing - Theory, News & General
Topic: Global PE10 and PS summary: Research Affiliates, Barclays, StarCapital
Replies: 74
Views: 10778

Re: International and US CAPE

.... At a high level, a direct application of cape to the investing process likely de-optimized one's portfolio. While these 10 year outlooks may be directionally indicative (not sure I buy that entirely), the pathway to get there is incredibly unpredictable. Staying the course has generated strong...
by Park
Sat Dec 29, 2018 11:56 am
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

The only difference I can see between those bear markets and other bear markets is that they are measured in real terms. Would that be correct? When people discuss secular and cyclical bear markets, they usually mean that a secular bear market can contain more than one cyclical bear market. For exa...
by Park
Sat Dec 29, 2018 9:53 am
Forum: Investing - Theory, News & General
Topic: Value Investing To Decrease Inflation Risk
Replies: 3
Views: 514

Re: Value Investing To Decrease Inflation Risk

I'm basically a taxable investor, so TIPS don't work for me. I'm making a case for there being two components to stock price changes: changes due to fundamentals and changes due to stock inflation/deflation (changes disproportionate to fundamentals). Value stocks will vary in their ability to increa...
by Park
Sat Dec 29, 2018 8:53 am
Forum: Investing - Theory, News & General
Topic: Value Investing To Decrease Inflation Risk
Replies: 3
Views: 514

Re: Value Investing To Decrease Inflation Risk

About value stocks decreasing inflation risk, this is not a free lunch. A stock can go up in price due to improving fundamentals, but it can also go up to due to stock inflation (an increase in price disproportionate to its fundamentals). Similarly, a stock can go down in price due to declining fund...
by Park
Sat Dec 29, 2018 1:51 am
Forum: Investing - Theory, News & General
Topic: Value Investing To Decrease Inflation Risk
Replies: 3
Views: 514

Value Investing To Decrease Inflation Risk

It is sometimes said that the greatest long term risk in investing is inflation. A good part of investing is spent on how to decrease that risk. Long term ownership of stocks can decrease that risk. What happens if stocks themselves become subject to inflation? Inflation can occur in any asset. Extr...
by Park
Fri Dec 28, 2018 12:54 am
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

Maybe you want to start by defining “secular bear market”. https://www.advisorperspectives.com/images/content_image/data/0f/0fbfe312d4013a7575529d3ebc795193.png "The key word on the chart above is secular. The implicit rule we're following is that blue shows secular trends that lead to new all-time...
by Park
Thu Dec 27, 2018 9:25 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

The comments about dividend stocks presently being overpriced are reasonable. With low interest rates on fixed income, there has been the argument made that with stretching for yield, dividend stock prices went up. However, with recent and future planned interest rates increases, that may change. ht...
by Park
Thu Dec 27, 2018 8:18 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

https://www.suredividend.com/wp-content/uploads/2018/08/Dividend-Contribution-to-Total-Return.png As you can see, in decades when stock returns were low, dividends were a significant amount of the total return. I'd like to emphasize that I think the default strategy for an individual investor shoul...
by Park
Thu Dec 27, 2018 5:49 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

https://www.simplysafedividends.com/intelligent-income/posts/36-5-reasons-to-be-a-dividend-growth-investor In the 1970s, dividends contributed 73% of total stock return. In the 2000s, they contributed all of the return. From about 1926 to 2014, the top 30% dividend payers returned 11.3%, middle 40% ...
by Park
Wed Dec 26, 2018 1:20 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

Yes, and the dividend portfolios lagged the performance of the broader market for the decade prior to 2000, and in more recent periods. Dividend stocks probably do tend to be larger older more established possible less risky companies... but it's no free lunch either way. We can pick individual per...
by Park
Wed Dec 26, 2018 1:10 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

No class of stocks holds up well in bear markets. IMO the group that does best is not strictly high dividend payers but companies that have long histories of ever increasing dividend payments, dividend growth stocks. Dividend growth tends to be a good measure of the quality factor and these compani...
by Park
Wed Dec 26, 2018 12:44 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Re: Dividend Stocks Mitigate Secular Bear Markets?

I used morningstar to compare Vanguard equity income fund and Fidelity equity income fund to the total return of the S&P500 in the secular bear market from approximately March 31/2000 to Dec 31/2011. S&P500 stayed flat at about 10,515.75. Vanguard and Fidelity rose to 18,395.53 and 13,552.58 respect...
by Park
Wed Dec 26, 2018 12:01 pm
Forum: Investing - Theory, News & General
Topic: Dividend Stocks Mitigate Secular Bear Markets?
Replies: 43
Views: 3358

Dividend Stocks Mitigate Secular Bear Markets?

https://seekingalpha.com/article/3997749-dividend-stocks-outperform?page=2 In the above link, the author compared returns of dividend vs. nondividend paying US stocks. What I find most interesting is when the two are compared by decade: 1920-29, 1930-39,...2000-2009. The three worst decades for stoc...
by Park
Mon Dec 24, 2018 10:18 am
Forum: Investing - Theory, News & General
Topic: The Small Cap Discount
Replies: 3
Views: 690

The Small Cap Discount

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 The author used American stock data from 1926-2016. I found Table 3A on p. 47 interesting. The author looks at individual stocks held for up to one year; it's shorter, if the stock is delisted. He divides the market into deciles using marke...
by Park
Sat Dec 22, 2018 11:24 am
Forum: Investing - Theory, News & General
Topic: A Test of Warren Buffett's 90:10 Retirement Portfolio
Replies: 33
Views: 6833

A Test of Warren Buffett's 90:10 Retirement Portfolio

https://seekingalpha.com/article/3623346-optimize-warren-buffetts-asset-allocation-advice For the retirement portfolio of his wife, Warren Buffett has recommended 10% in short term government bonds and 90% in a very low cost S&500 index fund. An academic tested that portfolio using US stocks and Tre...
by Park
Fri Dec 21, 2018 5:41 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investing In Short Time Horizons
Replies: 44
Views: 3565

Re: Larry Swedroe: Investing In Short Time Horizons

About VFMF, do you think it is possible to get exposure to the value and quality factors in US large caps? VFMF allocates roughly 1/3 of its assets to large cap, 1/3 to mid cap, and 1/3 to small cap. This provides exposure to the size factor, but also allows the fund to generate exposure to factors...
by Park
Fri Dec 21, 2018 3:47 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investing In Short Time Horizons
Replies: 44
Views: 3565

Re: Larry Swedroe: Investing In Short Time Horizons

I believe I went with DLS over IJS after I did some digging for my INTL SCV. I was considering VFMF for my backdoor Roth monies at VG. Right now, DW and I have them all in their SCV fund. I am debating if I should switch all of them out and go to VFMF. What say you? Hard to say without taking a loo...
by Park
Fri Dec 21, 2018 2:56 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investing In Short Time Horizons
Replies: 44
Views: 3565

Re: Larry Swedroe: Investing In Short Time Horizons

Embracing Factors depend completely on understanding and believing that past is prologue and you understand that relationship and the risk of under-performance..... Past data is certainly important, but also need the forward looking intuitive risk based or behavioral based explanation to expect the...
by Park
Fri Dec 21, 2018 1:28 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Investing In Short Time Horizons
Replies: 44
Views: 3565

Re: Larry Swedroe: Investing In Short Time Horizons

How is it possible to diversify market beta risk by adding a factor when market beta is the sum of the factors of the market ? I think Dave did a pretty good job of laying out a basic answer to your question, but I want to add one thing to address the quoted sentence. It's important to understand t...
by Park
Tue Dec 18, 2018 7:16 pm
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

There are literally hundreds (thousands?) of hedge fund that are very aware of small value tilts. DFA has about $600 billion in assets, and from what I can see, tilts to small and value play an important role in how those assets are invested. At the level of the retail investor, this board shows th...
by Park
Tue Dec 18, 2018 8:52 am
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

One argument I hear against overpricing is that small cap value should have done very well in the last 15 years, if it was becoming overpriced. Also, if small cap value was becoming overpriced, the disparity between in price ratios between growth and value stocks should have lessened. But those two...
by Park
Mon Dec 17, 2018 11:33 pm
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

I am not sure if we know that SCV is cheaper than history as we do not know the relative growth of the historical SCV firms versus the current SCV firms. If the market is getting more efficient then the relative growth rate should decline. I have not seen a relative growth analysis so IMO we do not...
by Park
Mon Dec 17, 2018 10:23 am
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

I do not think factor tilts increase idiosyncratic risk. Idiosyncratic risk generally is single stock risk. Most all the factor tilting discussed here is with cap weighted, passive/index funds that have hundreds or thousands of individual stocks. Single stock risk is effectively eliminated. Dave Se...
by Park
Sun Dec 16, 2018 2:02 pm
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

I'm not sure what you mean by idiosyncratic risk. In the past, small-caps have consistently had more risk, by various measures, than the market as a whole; and value stocks have had more risk, by various measures than the market as a whole. I don't think that's seriously in dispute. What tilters sa...
by Park
Sun Dec 16, 2018 1:52 pm
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

What tilters say is that if you look at the past statistics, despite having had higher risk, you could have used factor tilts to build portfolios that would have had the same return with less risk--or more return with the same risk--as total market portfolios. The controversial claim is that these ...
by Park
Sun Dec 16, 2018 12:40 pm
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

I'm not sure what you mean by idiosyncratic risk. In the past, small-caps have consistently had more risk, by various measures, than the market as a whole; and value stocks have had more risk, by various measures than the market as a whole. I don't think that's seriously in dispute. What tilters sa...
by Park
Sun Dec 16, 2018 11:49 am
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

VTI is concentrated in megacap/large cap stocks. The following is from someone else, not me: "As for the weaknesses of indexes: the megacap issue doesn't give me that much pause, because I view the megacaps as inherently more diversified; e.g. should you underweight Exxon vs a collection of small c...
by Park
Sun Dec 16, 2018 11:37 am
Forum: Investing - Theory, News & General
Topic: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?
Replies: 52
Views: 2843

Re: Do Factor Tilts, Such As Small Value, Increase Idiosyncratic Risk?

I do not think factor tilts increase idiosyncratic risk. Idiosyncratic risk generally is single stock risk. Most all the factor tilting discussed here is with cap weighted, passive/index funds that have hundreds or thousands of individual stocks. Single stock risk is effectively eliminated. Dave Le...