Search found 8050 matches

by JoMoney
Sat Oct 19, 2013 8:08 pm
Forum: Investing - Theory, News & General
Topic: Liquidity + Equity
Replies: 46
Views: 3838

Re: Liquidity + Equity

The optimal mix, and threshold or time period for rebalancing will change over time. Knowing it in advance isn't something we can do, even looking at the past it depends on the time period you look at. One example would be to look at the way "optimal" international allocations have changed over the ...
by JoMoney
Sat Oct 19, 2013 7:20 pm
Forum: Investing - Theory, News & General
Topic: Help me understand how rebalancing affects compounding
Replies: 34
Views: 2923

Re: Help me understand how rebalancing affects compounding

If you believed "risk premiums" were constant and forever, and that one asset would always earn more then another, the best bet would be to put your money in whatever asset would earn the most and let it be. Over the past 15 years, U.S. Small-Caps (and Real Estate) have been the place to be. The bes...
by JoMoney
Sat Oct 19, 2013 6:33 pm
Forum: Personal Consumer Issues
Topic: Good operating system for my parents
Replies: 68
Views: 5580

Re: Good operating system for my parents

Google's ChromeOS despite being built on linux is not like any linux distro. It's a basically just a well designed web-browser with "apps" and local storage, and some stand-alone apps capability, but focused on Cloud-Storage and apps so you don't have as much concern with backups. There are even som...
by JoMoney
Sat Oct 19, 2013 6:16 pm
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 99
Views: 9971

Re: The cult of PE10 - so what?

What if the bubble is in the E? :happy That's always the risk in stocks. Earnings are not stable, bond yields are fixed. If earnings dropped in half, stock earnings would be quite comparable to gov bond yields, and in that sense a whole lot risker.... but current earnings are not out of line with p...
by JoMoney
Sat Oct 19, 2013 7:02 am
Forum: Investing - Theory, News & General
Topic: Whats the diff between index investing vs buying your own?
Replies: 39
Views: 3844

Re: Whats the diff between index investing vs buying your ow

Hard to beat the .05% ER on Vanguard market index funds. With larger sums and/or employer retirement accounts you can get access to index funds at even lower ER's. Managing a large portfolio of individual stocks can be a headache, and paying someone else to do it for you in a wrap account takes away...
by JoMoney
Sat Oct 19, 2013 5:33 am
Forum: Investing - Theory, News & General
Topic: Deleted
Replies: 24
Views: 2256

Re: International as a percentage of your [equities]?

stemikger wrote:I've been investing in my 401K for 20 years now and I never had international and I did pretty good without it.
I can believe it :wink:
Image
by JoMoney
Sat Oct 19, 2013 4:28 am
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 99
Views: 9971

Re: The cult of PE10 - so what?

Irregardless of price , the earnings on the S&P500 are currently about double what they were in 2003. Back in 2003 they were about double what they were in 1993, and from there a little less then double what they were in 1983, similarly to 1973, and you can keep going back... the earnings today are ...
by JoMoney
Sat Oct 19, 2013 1:14 am
Forum: Investing - Theory, News & General
Topic: Liquidity + Equity
Replies: 46
Views: 3838

Re: Liquidity + Equity

... My treasuries and cash are there to protect my portfolio from my liabilities. My equities are there for my long-term goals. That's essentially been my stance. But as someone pointed out in another thread, it seems we're seeing more and more people justifying a higher equity portfolio now that t...
by JoMoney
Sat Oct 19, 2013 12:41 am
Forum: Personal Investments
Topic: sellers remorse [Individual stocks to index funds]
Replies: 22
Views: 3110

Re: sellers remorse [Individual stocks to index funds]

I bought Facebook at $32 few months ago and placed a 10% stop loss on it. It dipped hard last week and was sold at $46. Now it's up to $54. I shrugged and moved on. No regrets! We'll live to fight another day. Off topic, but that's why I don't like stop losses. The possibilities of a whipsaw are ju...
by JoMoney
Sat Oct 19, 2013 12:29 am
Forum: Investing - Theory, News & General
Topic: how do I find out PE10 of foreign stock markets?
Replies: 80
Views: 23135

Re:

... Why doesn't Vanguard report the Earnings for its funds at least for the past ten years so we can calculate the current P/E10? Not sure if it's still of interest, but it was brought up in another thread, you can get Annual Reports for many Vanguard funds going back to 2003 Vanguard's annual repo...
by JoMoney
Fri Oct 18, 2013 11:57 pm
Forum: Personal Investments
Topic: sellers remorse [Individual stocks to index funds]
Replies: 22
Views: 3110

Re: sellers remorse [Individual stocks to index funds]

The sellers remorse was one of the reasons I stopped holding individual stocks. When I finally saw my long-term aggregate net results were not giving me much (if any) additional gain, just extra grief, I made the decision to index. Switching was a slow process, and I did "relapse" back to stock pick...
by JoMoney
Fri Oct 18, 2013 9:35 pm
Forum: Personal Investments
Topic: Maximizing ROI - Three Fund Portfolio
Replies: 12
Views: 1287

Re: Maximizing ROI - Three Fund Portfolio

... However, if I am in 100% equities then I can’t sell my bonds during a major bear market/recession/collapse etc and buy the equities which are going cheap. Being able to do this would clearly be very good from a long-term point of view. Then again, is this going against the Boglehead mentality a...
by JoMoney
Fri Oct 18, 2013 8:31 pm
Forum: Personal Investments
Topic: Protective puts
Replies: 21
Views: 3026

Re: Protective puts

Instead of selling both calls and puts at the same time, I would think you could just do one or the other depending on what your objective was. If your balance called for lowering stocks and increasing cash/bonds, then simply sell a call. If it gets exorcised you've achieved your objective, if it's ...
by JoMoney
Fri Oct 18, 2013 7:50 pm
Forum: Investing - Theory, News & General
Topic: Longleaf Funds
Replies: 14
Views: 4414

Re: Longleaf Funds

Interesting... This made me go back and re-evaluate one of my favorite actively manged funds (SEQUX - I don't invest in it, but I watch it closely). Despite falling into a large-growth category, when compared to a Mid-Cap index the relative outperformance doesn't look as spectacular (although from a...
by JoMoney
Fri Oct 18, 2013 5:45 am
Forum: Investing - Theory, News & General
Topic: Small-Cap Value vs. Small-Cap Growth?
Replies: 113
Views: 22646

Re: Small-Cap Value vs. Small-Cap Growth?

Link to Vanguard paper for those interested: https://institutional.vanguard.com/iam/pdf/ICRCWI.pdf?cbdForceDomain=true That was interesting... thank you. An issue they don't mention, is that if weighting is done by some "value" metrics, it may have a propensity to compound risks. In Cap-weighted me...
by JoMoney
Thu Oct 17, 2013 3:16 pm
Forum: Personal Consumer Issues
Topic: Good operating system for my parents
Replies: 68
Views: 5580

Re: Good operating system for my parents

Get a chromebook . My wife has the earlier Samsung model & loves it. btw I'm not intending to trivialize the word-processing needs, but if you went with the Chromebook you should still be able to open & edit Word documents with QuickOffice . If the documents are simple spreadsheets & correspondence...
by JoMoney
Thu Oct 17, 2013 4:03 am
Forum: Investing - Theory, News & General
Topic: Small-Cap Value vs. Small-Cap Growth?
Replies: 113
Views: 22646

Re: Small-Cap Value vs. Small-Cap Growth?

I think I'm saying that optimal equity portfolios are based on the ABCWI (Anything But Cap Weight Index). You can construct this equity portfolio in various ways by breaking up straight cap-weighting of your equity holdings, one of which is to slice and dice. Fundamental index weighting, equal weig...
by JoMoney
Thu Oct 17, 2013 3:59 am
Forum: Personal Investments
Topic: Talk me down
Replies: 77
Views: 8411

Re: Talk me down

... A rule of thumb I heard somewhere, was that any year in which the Russell 2000 beats the S&P 500 will look like a "stock pickers market" where any random fund will look like it beats indexing (or cap weighting in general)... I'm going to have to dig around more to see if I can find where I pick...
by JoMoney
Wed Oct 16, 2013 4:09 pm
Forum: Investing - Theory, News & General
Topic: Small-Cap Value vs. Small-Cap Growth?
Replies: 113
Views: 22646

Re: Small-Cap Value vs. Small-Cap Growth?

I'm not sure that small cap is so good vs. large cap being so bad. I get about the same absolute and risk-adjusted returns from midcap as from small cap from 1972-2012, both beating TSM handily . I think that any weighting methodology other than cap-weighing gets you to the same place as slice and ...
by JoMoney
Wed Oct 16, 2013 3:25 pm
Forum: Personal Investments
Topic: individual stocks or mutual funds?
Replies: 10
Views: 1208

Re: individual stocks or mutual funds?

A simple truism is that the sum of all stock market investments in aggregate simply can not achieve more than what the total market returns. If a stock or stock mutual fund is earning more than the market, you can be certain there's an equal loss occurring in some other part of the market. There are...
by JoMoney
Wed Oct 16, 2013 7:59 am
Forum: Investing - Theory, News & General
Topic: Are diversification's benefits dead? Not by long shot
Replies: 16
Views: 2297

Re: Are diversification's benefits dead? Not by long shot

... And we know also that the returns of a rebalanced portfolio will be greater than the weighted average returns of the components---just how much will depend on correlations and volatility. Where does the "higher return" come from? Is the "higher return" just a temporary anomaly? Additional gains...
by JoMoney
Wed Oct 16, 2013 6:17 am
Forum: Investing - Theory, News & General
Topic: Is BRK really now just an index fund?
Replies: 10
Views: 1632

Re: Is BRK really now just an index fund?

I agree that the author is being disingenuous, but it's not going to affect my market-weight holdings of Berkshire one way or the other. I have high admiration for Buffett, and follow his advice: We never recommend buying or selling Berkshire. Among the various propositions offered to you, if you in...
by JoMoney
Wed Oct 16, 2013 5:58 am
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 99
Views: 9971

Re: The cult of PE10 - so what?

... Now the fine print was more interesting it looks as if the correlation goes up to 0.8 or better when the P/E 10 is at the extremes (highly over or undervalued). ... ...and without those few fat-tail extremes where the ratio managed to show some predictive ability, it had almost no predictive po...
by JoMoney
Tue Oct 15, 2013 4:07 pm
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 99
Views: 9971

Re: The cult of PE10 - so what?

Amongst the problems I have with PE10 as an indicator, is that despite the fact that it would have worked to predict a few times when the market got excessively high priced, there are times when it has given false indications ( broken clock )... and if someone did use it to get out of the market, it...
by JoMoney
Tue Oct 15, 2013 2:57 pm
Forum: Personal Investments
Topic: When even a Boglehead would buy gold?
Replies: 35
Views: 3154

Re: When even a Boglehead would buy gold?

A bubble requires two things: 1. Widespread public awareness of the investment, to provide speculators; 2. The general opinion among the public in question that the asset in question "has to go up", to provide a rationale for speculation. There is very little public interest in gold at present, eve...
by JoMoney
Tue Oct 15, 2013 8:07 am
Forum: Investing - Theory, News & General
Topic: Why are "defensive stocks" bad in a growth market?
Replies: 5
Views: 671

Re: Why are "defensive stocks" bad in a growth market?

"Defensive Stocks" are what you want to own in a "Growth Market" just before it stops being a "Growth Market", and you get "defensive". Companies that can grow and increase earnings become more valuable over time, during times of growth the companies that do this the fastest will make the most money...
by JoMoney
Tue Oct 15, 2013 6:38 am
Forum: Investing - Theory, News & General
Topic: 2013 Nobel in Economics awarded to Fama, Hansen, and Shiller
Replies: 53
Views: 6151

Re: 2013 Nobel in Economics awarded to Fama, Hansen, and Shi

Irrational vs efficient? I do not think that irrational implies inefficient. Keith Like the sub-prime mortgage situation, once the market realized it was being efficiently irrational things got irrationally efficient... "You have to face the following fact: all assets declined by about the same amo...
by JoMoney
Mon Oct 14, 2013 3:34 pm
Forum: Investing - Theory, News & General
Topic: Government Shutdown/Default [effect on investments]
Replies: 454
Views: 38551

Re: Anyone else freaking about the state of the market?

The people who were not invested when the Dow peaked around 11000 and the Nasdaq around 5000 somewhere around 14 years ago might be laughing at that statement, Keith. And at us. I would guess that most of us are down in real dollars since then. They would probably say just the opposite. And yet, th...
by JoMoney
Mon Oct 14, 2013 7:09 am
Forum: Personal Investments
Topic: When even a Boglehead would buy gold?
Replies: 35
Views: 3154

Re: When even a Boglehead would buy gold?

About 8 years ago, I had a gold crown put on a tooth. Hopefully a daily regimen of flossing will keep me from buying more. I have some gold tipped audio-video cables, they were a gift - I wouldn't have paid for them. Unless gold became money, I don't really have a use for it. I know there are gold c...
by JoMoney
Sun Oct 13, 2013 11:57 pm
Forum: Personal Investments
Topic: Talk me down
Replies: 77
Views: 8411

Re: Talk me down

I repeated the process twice more, and failed to receive the spectacular results... so not sure there's anything to be said for the random monkey's luck based on the time period either... So you may be skillful, you maybe lucky, you may not be able to prove either... 23.1% Conn's Inc. CONN $24,304.0...
by JoMoney
Sun Oct 13, 2013 8:25 pm
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

Apparently, there is nothing wrong with geeks bearing charts generated by "10,000 Monte Carlo simulations involving complex, seven-asset-class portfolios" when those charts support the point you're trying to make. :D You're right, at least if you're being sarcastic that is... My point is to be skep...
by JoMoney
Sun Oct 13, 2013 6:09 pm
Forum: Investing - Theory, News & General
Topic: Small-Cap Value vs. Small-Cap Growth?
Replies: 113
Views: 22646

Re: Small-Cap Value vs. Small-Cap Growth?

Anybody have VG data going further back? I'm in the same boat, i've looked all over, the best I can do is the data in VG annual reports going back to 2003 (N-CSR Filings) http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000036405&type=N-CSR&dateb=&count=40&scd=filings And an old book ...
by JoMoney
Sun Oct 13, 2013 5:26 am
Forum: Investing - Theory, News & General
Topic: The problem with a 3 fund portfolio
Replies: 65
Views: 9192

Re: The problem with a 3 fund portfolio

...By investing in total stock market only, you are investing mostly in large caps. Like I said earlier, just because TSM is the market weight doesn't make it automatically optimal. Adding more small caps allows you to take more (and different) risks, seeking higher returns. Since large and small c...
by JoMoney
Sun Oct 13, 2013 2:42 am
Forum: Personal Investments
Topic: Talk me down
Replies: 77
Views: 8411

Re: Talk me down

I want to add that it's been a good 1 year period for stocks, and a "rising tide floats all boats". Keep mind that if the portfolio had an equally "bad year" of -73.39% it would require a +276% later just to get back to even. Also, keep in mind that the Total Market indexes are heavy in larger stock...
by JoMoney
Sun Oct 13, 2013 1:50 am
Forum: Personal Investments
Topic: Talk me down
Replies: 77
Views: 8411

Re: Talk me down

I went and got last years Vanguard Total Stock Market annual report, pasted all the portfolio holdings into a spreadsheet. Generated 20 random numbers from 1 through however many rows of stocks.. if my random number corresponded to a header or non-stock text I went to the immediate next stock on the...
by JoMoney
Sat Oct 12, 2013 8:16 pm
Forum: Investing - Theory, News & General
Topic: Anyone else freaking about the state of the market?
Replies: 95
Views: 10025

Re: Anyone else freaking about the state of the market?

I get freaked out at Kroger sometimes when they haven't restocked the banana shelf and only a few brownish ones are left. Other than that the markets don't bother me. +1 :thumbsup I find the banana market more concerning as well. I spend a lot of time in Australia... over the past couple years ther...
by JoMoney
Sat Oct 12, 2013 8:05 pm
Forum: Investing - Theory, News & General
Topic: Government Shutdown/Default [effect on investments]
Replies: 454
Views: 38551

Re: Government Shutdown/Default [effect on investments]

So are we talking about just US market, VTI, or will the international stock indexes be affected by a default as well? The U.S. has a major role in the global economy. If there's a problem in the U.S., it will have far reaching global impacts. IF there is a default, what that means to the stock mar...
by JoMoney
Sat Oct 12, 2013 7:50 pm
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

The reasons I see other people giving for tilting toward (or holding only) US stocks remain remarkably un-compelling, and are increasingly weakened as international stock investing becomes ever cheaper. Compared to the other things you listed (real estate, commodities and art) investing in internat...
by JoMoney
Sat Oct 12, 2013 7:11 pm
Forum: Investing - Theory, News & General
Topic: Small-Cap Value vs. Small-Cap Growth?
Replies: 113
Views: 22646

Re: Small-Cap Value vs. Small-Cap Growth?

... 30Jun1998-30Jun2013(15 years) 50%VFINX+50%VISVX Growth = 25200 SD= 17.45 CAGR= 6.36% VTSMX Growth=20163 SD=16.73 CAGR=4.79% The growth is the same as Morningstar shows if you had put $5000 in each at the start of the period and just left it alone "buy and hold". So much for the "rebalancing bon...
by JoMoney
Sat Oct 12, 2013 1:32 am
Forum: Investing - Theory, News & General
Topic: Why Market Capitalization For Weighting?
Replies: 11
Views: 1667

Re: Why Market Capitalization For Weighting?

The magic of cap weighting is that it's the only way to truly represent the market as it is. It represents every dollar invested in the market. Owning some other weighting is a "tilt" away from the market. You're free to make your investment wherever you wish, but anything other than the market by c...
by JoMoney
Fri Oct 11, 2013 11:02 pm
Forum: Investing - Theory, News & General
Topic: Small-Cap Value vs. Small-Cap Growth?
Replies: 113
Views: 22646

Re: Small-Cap Value vs. Small-Cap Growth?

There may be some formula for describing with perfect hind-sight the results of "buy low sell high", but the well advertised strategy of buying a particular style box is silly. Premiums are not persistent. No style is persistently better than the market forever and ever. There is no formula to beat ...
by JoMoney
Fri Oct 11, 2013 8:49 pm
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

If you believe in mean reversion, rebalancing into bonds when equities are on a roar will increase returns. Mean reversion is inevitable, the problem is that nobody knows how long it will take to manifest from a given start date, nor what the mean will be over that period. Despite the fact that equ...
by JoMoney
Fri Oct 11, 2013 3:40 pm
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

What is the basis for this? I understand it to be both a risk management and possible performance benefit. Recently, I was reading a blog post from Wealthfront with Burton Malkiel where he referenced the daily re-balancing of the Yale endowment by David Swensen. Dr. Swensen estimated that this proc...
by JoMoney
Fri Oct 11, 2013 7:54 am
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

Vanguard total world doesn't rebalance. If you hold roughly market weights (40%-50% domestic and 60%-50% international) and rebalance, then you get the above chart, which clearly shows a historic improvement in volatility. This isn't alchemy, it's just common sense. If you have two assets that have...
by JoMoney
Thu Oct 10, 2013 10:28 pm
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

the Vanguard Total World index consistently has higher volatility than Total U.S.. Actually, I don't see any obvious difference in volatility between the two just by eye: http://finance.yahoo.com/q/bc?s=VT&t=5y&l=on&z=l&q=l&c=VTI I don't either, and I suspect it doesn't make a difference to most pe...
by JoMoney
Thu Oct 10, 2013 4:27 pm
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

A U.S. investor does not get reduced portfolio volatility by holding international at market weights (e.g. the Vanguard Total World index consistently has higher volatility than Total U.S.). The only time a reduction in volatility is had is if the investor engages in Modern Portfolio Alchemy and pre...
by JoMoney
Thu Oct 10, 2013 6:58 am
Forum: Investing - Theory, News & General
Topic: Government Shutdown/Default [effect on investments]
Replies: 454
Views: 38551

Re: Government Shutdown/Default [effect on investments]

The politicians have two constituencies: people who elect them and people who fund their campaigns. At this time, major campaign contributors have a more immediate impact than the voters. If the funding class does not want a default there should be no default. On the other hand, the debt ceiling th...
by JoMoney
Thu Oct 10, 2013 6:41 am
Forum: Investing - Theory, News & General
Topic: Buying bond funds at 30
Replies: 17
Views: 2051

Re: Buying bond funds at 30

I don't think John Bogle takes the "age in bonds" as any more than a rough rule of thumb. You have to decide how much risk you're willing to accept, and what your strategy and allocation will be. Some people prefer CD's, Savings Bonds, or other vehicles to "bond funds"... but everybody needs an emer...
by JoMoney
Thu Oct 10, 2013 4:58 am
Forum: Investing - Theory, News & General
Topic: Why the currency concern over too much foreign holdings?
Replies: 71
Views: 6514

Re: Why the currency concern over too much foreign holdings?

... A further consideration is that valuation for US equity are currently significantly higher than for international equity. If the valuations were more commensurate, I might consider dropping my international allocation from 50% to 40%. But I don't want to sell assets with lower valuations to buy...
by JoMoney
Wed Oct 09, 2013 3:21 pm
Forum: Investing - Theory, News & General
Topic: Can the US government actually pay down debt?
Replies: 12
Views: 1621

Re: Can the US government actually pay down debt?

This was a pretty interesting report/podcast: http://www.npr.org/blogs/money/2011/10/21/141510617/what-if-we-paid-off-the-debt-the-secret-government-report Planet Money has obtained a secret government report outlining what once looked like a potential crisis: The possibility that the U.S. governmen...