Search found 9781 matches

by Doc
Thu Jun 11, 2020 3:25 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

This entire discussion on negative convexity is simply dancing on the head of a pin, IMO. Ok it's dancing on the head of a pin. The extra amount that you get for accepting the negative convexity risk is not enough to "fit on the end" of a pin. So why are you taking the extra risk if there is not en...
by Doc
Thu Jun 11, 2020 12:58 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Duration risk of GNMA are compensated through extra yield, as much as 40 bps with comparable Treasury Note. Yes, finally. The GNMA's have duration risk that nominal Treasuries do not. And you get compensated for taking that risk in higher yields. One can always have a preference towards using only ...
by Doc
Thu Jun 11, 2020 10:42 am
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Given that same argument I would imagine you wouldn't invest in anything other than totally risk-less fixed income which are only 3 Month T-Bills. Actually no. Currently the largest part (35%) of MY fixed income portfolio is in Treasury Bills with much longer maturity than only three months. (One e...
by Doc
Thu Jun 11, 2020 9:57 am
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

If someone has a mortgage at 4% and rates drop to 3% he refinances and the MBS investors lose. If rates go the other way and go up from 3% to 4% they don't buy that new home and the MBS investors get stuck with that low paying asset for maybe the next 25 years. They lose then also. Except that the ...
by Doc
Thu Jun 11, 2020 7:19 am
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Lastly, in the unlikely event that a newly issued 30 year mortgage actually were held to maturity, the duration of the cash flows is still significantly shorter than a 30-year treasury. That's because of amortization-- you get principal repaid along the way, not all at maturity. And an actively man...
by Doc
Wed Jun 10, 2020 4:22 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

I don't have a citation in front of me, but Swedroe has also made the point that LTTs are the best diversifier for an equity-heavy portfolio. The "no total bond index" concept is based on Swedroe's "Winning Bond Strategy" which doesn't even mention equities except for a few paragraphs on pages 132 ...
by Doc
Wed Jun 10, 2020 4:07 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

You aren't even trying to describe or quantify the risk of holding credit, so it is hard to see why I should view your analysis as more reliable. Historically, credit has been riskier than term, and the risk has shown up at the wrong time. All I'm trying to say is that using a long term average met...
by Doc
Wed Jun 10, 2020 1:42 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Short-term investment grade credit still looks riskier than GNMAs to me: I don't belive using Portfolio Visualizer is the right tool for the type of comparison we are considering. Let's look at the portfolio for the MBS fund. Maturity Schedule for Vanguard Mortgage-Backed Secs ETF VMBS shows 73.95&...
by Doc
Wed Jun 10, 2020 9:55 am
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Thanks tj.

12 month rolling return chart for MBS and 1-10 Gov/Corp.

Image
by Doc
Wed Jun 10, 2020 9:36 am
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Northern Flicker wrote: Wed Jun 10, 2020 12:15 am I think the malignant view often seen on BH is more extreme than the reality. Corporate credit is a notably riskier bond subclass.
That's why Swedroe recommends only short corporates in his book.
by Doc
Wed Jun 10, 2020 9:33 am
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

Doc, if you've answered this and I missed it, my apologies. I've looked at your chart here and didn't see the point you were trying to make. I don't think growth charts are the way to look at this type of question. The long term averaging of the returns make shorter term differences disappear. In t...
by Doc
Tue Jun 09, 2020 3:11 pm
Forum: Investing - Theory, News & General
Topic: 5% or 10% band?
Replies: 29
Views: 2452

Re: 5% or 10% band?

livesoft wrote: Tue Jun 09, 2020 3:01 pm A problem with bands such as 5% is that what do you do when you see your portfolio 4.99% out of balance? :twisted:
You buy only 4.99% instead of the full 5.00%. :P
by Doc
Tue Jun 09, 2020 3:07 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

There is nothing wrong with safety of Agency MBS, it has been discussed here so many times It is not about credit risk. It's about negative convexity. Read the link or buy Swedroe's book. Ask yourself if Vanguard Core Bond Fund has a higher return than a TBM fund then how is that accomplished excep...
by Doc
Tue Jun 09, 2020 2:02 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Core Bond fund (VCOBX)
Replies: 58
Views: 3863

Re: Vanguard Core Bond fund (VCOBX)

One thing you should note though is this fund has higher amount of MBS , instead of straight Treasury bonds, their percentages are swapped between TBM and VCOBX. So, little extra from Agency MBS is what they are getting. Yep. See: "Swedroe's Bond Advice - No Total Bond" https://www.bogleheads.org/f...
by Doc
Tue Jun 09, 2020 8:40 am
Forum: Investing - Theory, News & General
Topic: Did I miss my only chance for TLH?
Replies: 12
Views: 914

Re: Did I miss my only chance for TLH?

My crystal ball shows the market going down 22% by July 4th so prepare to tAx loss harvest then. All kidding aside I estimate 99.99% chance at some point you will have more bear markets to TLH. You are not managing your portfolio the way I am. Our taxable accounts have large cap with 75% gain and s...
by Doc
Mon Jun 08, 2020 6:44 pm
Forum: Investing - Theory, News & General
Topic: 5% or 10% band?
Replies: 29
Views: 2452

Re: 5% or 10% band?

It's not a matter of which is better. The idea is to establish an AA that meets your needs and that you are comfortable with and to stick to it.

By even asking the question you are not comfortable with your AA.
by Doc
Mon Jun 08, 2020 4:10 pm
Forum: Investing - Theory, News & General
Topic: Did I miss my only chance for TLH?
Replies: 12
Views: 914

Re: Did I miss my only chance for TLH?

blake22 wrote: Mon Jun 08, 2020 4:03 pm Ah - interesting. I thought that if I had bought VTSAX, I couldn't sell or buy anything similar for 30 days before and after, without triggering a wash sale.
The rule is "substantially identical" not "similar" as beyou illustrated.
by Doc
Sun Jun 07, 2020 12:36 pm
Forum: Investing - Theory, News & General
Topic: Morningstar Analyst Reports
Replies: 3
Views: 445

Re: Morningstar Analyst Reports

How much are you paying per year for that “in depth analysis”? Nothing. :D I do subscribe to Morningstar but not for the analysts' reports. I just pulled up these two reports to try to get some idea of the difference the CRSP large cap index has from the more generally used indices in this category...
by Doc
Sat Jun 06, 2020 4:56 pm
Forum: Investing - Theory, News & General
Topic: Terrible time to buy bonds?
Replies: 42
Views: 4449

Re: Terrible time to buy bonds?

Basically just relying on Larry Swedroe's opinion that mortgage-backed securities and long-term bonds should be avoided and short and intermediate term bonds are best. It isn't a good time to buy bonds but I would follow the plan anyway. OK listen to the bond guru but modify it for now based on ned...
by Doc
Sat Jun 06, 2020 11:31 am
Forum: Investing - Theory, News & General
Topic: Morningstar Analyst Reports
Replies: 3
Views: 445

Morningstar Analyst Reports

I sometimes use these to choose an alternative fund when I am Tax Loss Harvesting so as to avoid a wash sale. Here's a couple of examples of the lead paragraph for two excelent GOLD rated ETFs: "Vanguard Large-Cap ETF VV is one of the best large-cap U.S. stock funds available. (Analyst name cut) Van...
by Doc
Wed Jun 03, 2020 6:14 pm
Forum: Investing - Theory, News & General
Topic: How do ultra short term bond funds have such a high yield relative to their target holdings?
Replies: 8
Views: 997

Re: How do ultra short term bond funds have such a high yield relative to their target holdings?

jeffyscott wrote: Wed Jun 03, 2020 2:50 pm Or at least choose to not pay a fund company 0.14% to hold a portfolio of T-bills for you.
YES. :thumbsup

Roll your own. E/R = 0.0
by Doc
Wed Jun 03, 2020 2:42 pm
Forum: Investing - Theory, News & General
Topic: tax-efficient asset location
Replies: 2
Views: 354

Re: tax-efficient asset location

It depends on your tax situation and your taxable/tax sheltered ratio. My rating for tax efficiency is: short T's > intermediate T's ~ short corporates > intermediate corporates. I don't do foreign FI. You're often only doing a currency thing with foreign and that often gets hedged away by the fund ...
by Doc
Wed Jun 03, 2020 2:32 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

IIRC, you invest in PIMCO Total Return? Like most managed funds, it invests in mortgage bonds. Currently they show about 29% in securitized debt which includes mortgages and some other stuff. Currently Pimco Total Return is just slightly more than 1% of my FI portfolio. And it's only that high beca...
by Doc
Wed Jun 03, 2020 2:22 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

But the problem is that when I look at the Vanguard GNMA Fund over forty years, high inflation and low inflation, four stock market crashes and who knows how many "business cycles," and a global financial crisis precipitated by mortgage-backed securities (of a very different kind), I ask, "so where...
by Doc
Wed Jun 03, 2020 6:36 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

I do not find much credence to this argument against GNMAs. They are one of the safest and lowest risk bond investments available, in fact they are even lower risk than Treasury bonds if you look at variance as a measure of risk. You are completely missing the point. It is not about credit risk. It...
by Doc
Wed Jun 03, 2020 6:23 am
Forum: Investing - Theory, News & General
Topic: Is there a computer program for making a spending report?
Replies: 13
Views: 824

Re: Is there a computer program for making a spending report?

I have heard that Quicken allows manual entries for a spending report but after a year they badger you to buy another version and their advertising shows up on your computer screen. Morningstar Premium is going to cost you ~$15 a month. You can download all your bank and credit card info directly f...
by Doc
Tue Jun 02, 2020 9:29 am
Forum: Investing - Theory, News & General
Topic: Is there a computer program for making a spending report?
Replies: 13
Views: 824

Re: Is there a computer program for making a spending report?

I have heard that Quicken allows manual entries for a spending report but after a year they badger you to buy another version and their advertising shows up on your computer screen. Morningstar Premium is going to cost you ~$15 a month. You can download all your bank and credit card info directly f...
by Doc
Sun May 31, 2020 2:05 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

nedsaid wrote: Sun May 31, 2020 12:22 pm So far I haven't seen the unique risks of MBS such as GNMAs show up. ... In that light, GNMA funds don't look so bad.
It takes longer for a homeowner to refinance his mortgage than for a bond investor to trade Treasuries. :D
by Doc
Sun May 31, 2020 12:16 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

Larry Swedroe doesn't suggest a specific alternative for Total Bond in Why GNMAs Shouldn't Be Your Bond Choice--does he in his book? Basically yes. Short corporates and Treasuries (as a rolling ladder) with durations extending as long as you achieve 20 bps per annum. But he does not specify a singl...
by Doc
Sun May 31, 2020 10:19 am
Forum: Investing - Theory, News & General
Topic: iShares 0-3 Month Treasury ETF
Replies: 16
Views: 1290

Re: iShares 0-3 Month Treasury ETF

jeffyscott wrote: Sun May 31, 2020 9:38 am Okay, but then why pay an ETF vendor 0.07% or 0.14% in order to hold them?
Then don't.

Doc's T-Bills:

Image

:D
by Doc
Sun May 31, 2020 8:13 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

Larry Swedroe doesn't suggest a specific alternative for Total Bond in Why GNMAs Shouldn't Be Your Bond Choice--does he in his book? Basically yes. Short corporates and Treasuries (as a rolling ladder) with durations extending as long as you achieve 20 bps per annum. But he does not specify a singl...
by Doc
Sun May 31, 2020 7:03 am
Forum: Investing - Theory, News & General
Topic: iShares 0-3 Month Treasury ETF
Replies: 16
Views: 1290

Re: iShares 0-3 Month Treasury ETF

I can't see any reason to hold T-bills right now due to the yield. However, holding T-bills directly has a 0% ER, and if you sell, it settles the same day. If you hold longer term Treasuries and need the money in the next several years you will take a big hit when interest rates rise. Longer term T...
by Doc
Sat May 30, 2020 3:29 pm
Forum: Investing - Theory, News & General
Topic: iShares 0-3 Month Treasury ETF
Replies: 16
Views: 1290

Re: iShares 0-3 Month Treasury ETF

Look also at SPDR® Blmbg Barclays 1-3 Mth T-Bill ETF BIL. Been around over ten years.
by Doc
Sat May 30, 2020 3:21 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

Obviously from reading Swedroe's book he relied primarily on the 10 year TRSY ladder taking capital gains when they occurred. Mostly going back to a 10 year bond then unless another term had investment opportunity at the time of reinvestment. That's not obvious to me. The whole section "A Shifting ...
by Doc
Sat May 30, 2020 11:14 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

Can you give examples of which Vanguard Mutual Funds could be used to get there 100% i.e. 1-10 Treasury plus a 1-5 investment grade corporate fund? No I can't. They don't offer anything useful in this area as far as I know. Maybe closest you could get with 2 funds would be Intermediate Treasury (th...
by Doc
Sat May 30, 2020 10:16 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

Can you give examples of which Vanguard Mutual Funds could be used to get there 100% i.e. 1-10 Treasury plus a 1-5 investment grade corporate fund? No I can't. They don't offer anything useful in this area as far as I know. The vanguard intermediate treasury ETF has an ER of 0.035%, the mutual fund...
by Doc
Fri May 29, 2020 12:27 pm
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

And at all times the investor (whose time horizon is 15+ years) will recoup that 15% drop in price - and more - because they can reinvest their bond fund dividends at the new, higher yields. This offset between price risk and reinvestment risk, the two component pieces of interest rate risk, is exa...
by Doc
Fri May 29, 2020 9:46 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 17473

Re: Swedroe’s Bond Advice - no total bond index

For all you "one funders" out there, you can get to 75% of Swedroe's optimum with a 1-10 Government/Credit index like iShares Intermediate Govt/Crdt Bd ETF GVI. And you can get 100% there with two funds like a 1-10 Treasury plus a 1-5 investment grade corporate fund. Two caveats, 1) Larry's bond boo...
by Doc
Wed May 27, 2020 5:00 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

vineviz wrote: Wed May 27, 2020 2:59 pm
Doc wrote: Wed May 27, 2020 2:49 pm
That 3000 share ask was not there when I first looked. The spread for 3000 shares was almost 4% when I first looked.
You keep looking at the order book, and it is scaring you. Stop looking. There's no information there you can use, and it's only going to keep freaking you out.
:beer
by Doc
Wed May 27, 2020 2:49 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

I want to buy some 3000 shares of this ETF at one time in the next few months. And you say not to worry? Yes. That's exactly what I'm saying. If you enter a market order for 3000 shares of this ETF you'll get immediate execution at an average price that is almost certainly going to be between $25.2...
by Doc
Wed May 27, 2020 2:12 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

Nevertheless I am going to be cognizant of not using thinly traded ETFs when I can avoid them. There is no reason to avoid "thinly traded" ETFs, either. Trading volume is indicative of basically nothing. I'd avoid ETFs that have persistently wide bid/ask spreads relative to other similar funds, but...
by Doc
Wed May 27, 2020 12:43 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

I can understand how the AP's can keep create or reduce liquidity and keep the price near the underlying value price of the ETF by the creation/liquidation methodology. But I don't understand how this affects what is going on in the market book that is trading 100 or 200 shares every five or ten min...
by Doc
Wed May 27, 2020 9:26 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

I am obviously far from being an expert on any of this, but I think a market order and a marketable limit order (as mine was) are treated the same way and have a similar opportunity to be filled from sources other than the displayed book. Perhaps the experts can weigh in. The two order types (marke...
by Doc
Tue May 26, 2020 3:27 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

Doc, we covered this ground in the other thread. There is liquidity at the bid and ask that doesn't show up in the order book but will likely show up when you put in your order. See my last post in that thread. I put in a limit buy order at the ask that was 9 times the displayed ask size. I was fil...
by Doc
Tue May 26, 2020 11:40 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

For instance, May 22 10:12:37, VSS best ask was 88.76. Within a few milliseconds, shares executed at 88.76, clearing out the ask, and some executed at 88.79 and 88.80. In aggregate, about 1000 shares were executed, which is on the large size for a retail investor, but not impossible. A few minutes ...
by Doc
Tue May 26, 2020 11:28 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

No one here is going to "move the market" with an ETF trade for any ETF that tracks a stock or bond index. Even if "moving the market" was possible (which it isn't ) using limit orders or breaking up the order would be likely to make the problem worse because those strategies increase your exposure...
by Doc
Tue May 26, 2020 8:52 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

It's not just bid/ask spreads that are an issue. It's also trading volume that's important. And not just the average daily volume but also the depth of the bid ask spreads. Several weeks ago I started a thread on this issue . For a large trade it is easy to move the market against you if you do not ...
by Doc
Tue May 26, 2020 8:31 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 5209

Re: Alarming Bid/Ask Spreads on ETFs

It's not just bid/ask spreads that are an issue. It's also trading volume that's important. And not just the average daily volume but also the depth of the bid ask spreads. Several weeks ago I started a thread on this issue. For a large trade it is easy to move the market against you if you do not e...
by Doc
Wed May 20, 2020 11:06 am
Forum: Investing - Theory, News & General
Topic: Worth replacing International Small Cap (DLS, FNDC and DGS) to VSS ?
Replies: 26
Views: 1647

Re: Worth replacing International Small Cap (DLS, FNDC and DGS) to VSS ?

I use FNDC or SFILX mutual fund equivalent which has been around longer. 12 month rolling return chart with VSS: https://i.postimg.cc/rF4rNdJp/Small-Foreign.jpg http://quotes.morningstar.com/chart/fund/chart?t=VMFXX®ion=usa&culture=en-US&dataParams=%7B%22zoomKey%22%3A9%2C%22startDay%22%3A%2205%2F...
by Doc
Tue May 19, 2020 2:31 pm
Forum: Investing - Theory, News & General
Topic: Total market or S&P 500?
Replies: 44
Views: 3762

Re: Total market or S&P 500?

And the reason why it's not worth fussing about is clear if you look at the difference in behavior between an ETF that tracks the Russell 1000, which is based strictly on capitalization (IWB, blue) and one that tracks the S&P 500 (SPY, orange). I took Nisi's chart and reformatted it as a 24 month r...