Search found 6184 matches

by mptfan
Tue Jun 12, 2007 11:33 am
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

I may be totally missing what you're getting at, but, of course there are risks investing in an S&P500 index. If you look at 2000-2002, VFINX lost something like 35% of its value. That's the risk inherent in investing in that index. Mitigating that risk requires an asset allocation plan that in...
by mptfan
Tue Jun 12, 2007 11:31 am
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

Boglefan, I share your concerns about tracking market weighted indexes. I think you should investigate the merits of fundamental indexing.

http://www.researchaffiliates.com/pubs/ ... 3e50f90f8e
by mptfan
Mon Jun 11, 2007 8:13 pm
Forum: Investing - Theory, News & General
Topic: How much to save for retirement?
Replies: 32
Views: 12295

Adrian, Vanguard's S&P 500 fund has averaged 12.3% return per year since its inception in 1976. Also, the STAR fund, clearly a moderately agressive and well balanced portfolio, averaged an 11.2% return since its inception in 1985. Why do you predict that 8% is a long term average of a moderately...
by mptfan
Sun Jun 10, 2007 8:39 pm
Forum: Investing - Theory, News & General
Topic: How much to save for retirement?
Replies: 32
Views: 12295

20 percent of your gross salary in a tax deferred retirement plan.
by mptfan
Sun Jun 10, 2007 8:28 pm
Forum: Personal Investments
Topic: Help! Relatives using Whole Life for retirement...
Replies: 18
Views: 6332

I have learned from experience that trying to help others with financial decisions is a bad idea, and usually fruitless. No matter how badly they are getting screwed, I can't compete with the advice of the "very nice financial advisor from [insert large financial institution here] who seems to ...
by mptfan
Sun Jun 10, 2007 8:21 pm
Forum: Personal Investments
Topic: Is being a Boglehead a personality type?
Replies: 9
Views: 2783

Yes to all of your questions. The traits can be learned or they can be a part of your character.
by mptfan
Sun Jun 10, 2007 6:27 pm
Forum: Investing - Theory, News & General
Topic: Boglehead survey: Is Social Security A Good Thing?
Replies: 171
Views: 67190

Social Security is supposed to be a retirement plan, not a tax. What you put should determine what you get out. If means testing goes through, why should the government stop with Social Security? Next they will means test your 401k plan and your pension. After all, the "rich" people who h...
by mptfan
Sun Jun 10, 2007 6:21 pm
Forum: Investing - Theory, News & General
Topic: Boglehead survey: Is Social Security A Good Thing?
Replies: 171
Views: 67190

Also, if we want to have a serious discussion, we should probably get over the notion of "recovering what we've paid in". That money's already gone. Earlier recipients and other government programs have already taken it. (Yes, there are treasury bonds designated for SS, but there's no mon...
by mptfan
Sat Jun 09, 2007 4:01 pm
Forum: Investing - Theory, News & General
Topic: International Allocation
Replies: 18
Views: 5691

Markets movements are the sum of individual countries, sectors, and stocks. Looking at the global stock market in two unequal pieces (one with way more country/currency risk than the other) doesn't make much sense to me. There is no strong reason to weight by market capitalization. (No strong reaso...
by mptfan
Sat Jun 09, 2007 3:39 pm
Forum: Personal Investments
Topic: Directed Beneficiary Plan no longer for joint accounts?
Replies: 14
Views: 3540

The transfer on death plan is the same thing as naming a beneficiary on your account. When you name a beneficiary, that person receives the funds in the account upon proof of your death. If you haven't already named a beneficiary for all of your accounts, you should do so pronto, ie. right now. The ...
by mptfan
Sat Jun 09, 2007 12:14 pm
Forum: Investing - Theory, News & General
Topic: Boglehead survey: Is Social Security A Good Thing?
Replies: 171
Views: 67190

Also, if we want to have a serious discussion, we should probably get over the notion of "recovering what we've paid in". That money's already gone. Earlier recipients and other government programs have already taken it. (Yes, there are treasury bonds designated for SS, but there's no mon...
by mptfan
Sat Jun 09, 2007 11:41 am
Forum: Investing - Theory, News & General
Topic: Thought game: What if everyone only invested in index funds?
Replies: 22
Views: 7396

I agree. In order for index investing to be effective, there has to be a large number of people in the market willing to buy and sell individual securities in order to keep the security prices at least semi-efficient. If everyone indexed, the market would become inefficient. We should be thankful th...
by mptfan
Sat Jun 09, 2007 10:44 am
Forum: Investing - Theory, News & General
Topic: Price to Book Ratio of S&P 500-Where to find???
Replies: 7
Views: 5334

The Price/Book ratio of the S&P 500 is 2.9.

https://flagship.vanguard.com/VGApp/hnw ... IntExt=INT
by mptfan
Sat Jun 09, 2007 7:25 am
Forum: Investing - Theory, News & General
Topic: Boglehead survey: Is Social Security A Good Thing?
Replies: 171
Views: 67190

Jeffy, what changes would you propose?
by mptfan
Sat Jun 09, 2007 6:32 am
Forum: Investing - Theory, News & General
Topic: Boglehead survey: Is Social Security A Good Thing?
Replies: 171
Views: 67190

I see social security as a welfare program. That's because it is. It taxes one group and transfers that money to another group, the standard definition of a welfare program. The orginal intent was to end poverty among seniors, which also sounds like a welfare program. Karl, you are ignoring the fac...
by mptfan
Thu Jun 07, 2007 3:58 pm
Forum: Personal Investments
Topic: Real effect of ETF commissions (not as bad as we think?)
Replies: 7
Views: 1953

Also remember that you have to pay a bid/ask spread when buying ETFs.

Also remember that ETFs do not automatically reinvest dividends for you, although some brokers offer that feature.
by mptfan
Thu Jun 07, 2007 1:57 pm
Forum: Investing - Theory, News & General
Topic: The Worst Investment Ever - Your home?
Replies: 77
Views: 29172

I also agree that a home is usually not a good investment. In order to keep a home, you have to pay property taxes, homeowners' insurance, flood insurance (sometimes), maintenance, improvements, utility bills, special assessments, homeowner's dues (sometimes), replacement of property damage (even if...
by mptfan
Thu Jun 07, 2007 12:48 pm
Forum: Personal Investments
Topic: List of things that affect portfolio performance?
Replies: 2
Views: 1239

Peppe, to be precise, my list was not meant to define portfolio performance, but rather, portfolio size.
by mptfan
Wed Jun 06, 2007 3:23 pm
Forum: Investing - Theory, News & General
Topic: Preferred Stocks
Replies: 13
Views: 3206

Although preferred stocks have somewhat different characteristics than common stocks (ie. higher priority of claim in bankruptcy, higher dividend rates), they are clearly equities.
by mptfan
Wed Jun 06, 2007 11:58 am
Forum: Investing - Theory, News & General
Topic: Why not a 115% Equity Portfolio?
Replies: 60
Views: 23500

USA Only data is data mining for a start anyway, cause the USA was by far the luckiest country in the last 200 years with no wars on homeground, no notable political crisis etc. I think the Civil War might count, :lol: but I do agree with your sentiment. Best wishes, Ken [Edit: Come to think of it,...
by mptfan
Tue Jun 05, 2007 3:14 pm
Forum: Investing - Theory, News & General
Topic: Why not a 100% Equity portfolio?
Replies: 42
Views: 15889

Spyder wrote: Hear me now, and believe me later.
LMAO :lol:
by mptfan
Sun Jun 03, 2007 9:57 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

I was about to respond to the issue of Schwab's index funds, but since you won't respond any further, I won't.
by mptfan
Sun Jun 03, 2007 9:46 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Yes, the market can go down. But historically it goes up more than it goes down, so advising a long term investor to sit out for a year to save a few basis points in expenses is flat out bad advice. I think it was relevant to refer to another conversation to prove that you find it helpful to rely on...
by mptfan
Sun Jun 03, 2007 9:17 pm
Forum: Personal Investments
Topic: Help me exercise some self restraint!
Replies: 23
Views: 6001

Linda, I say "you go girl!" Personal finance is more than just math equations, it's also about behavioural issues. I tend to agree with you that paying off a debt is a good thing and provides more peace of mind than the possibility of getting a higher return from risky investments. I too a...
by mptfan
Sun Jun 03, 2007 9:04 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

mptfan wrote: I thought we were supposed to look at the longer term results. However, please feel free to ignore any long term results that don't support your view. Is there any real world long term returns for RAFI at all? The returns for Russel 1000 Value and Vanguard Indexes are real world, not ...
by mptfan
Sun Jun 03, 2007 9:00 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

mptfan wrote: However, if you assume that someone doesn't have access to Vanguard funds, and prefers to use funds instead of ETFs, and has more than 50k to invest (which describes me) then the Schwab RAFI funds provide an excellent alternative in one convenient package. You seem to be exaggerating ...
by mptfan
Sun Jun 03, 2007 7:22 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

I never denied that. In fact, I implicitly recognized that fact when I said a 50/50 value tilt is a fair comparison. Geez. Well, the Russell 1000 Value index is only 50% large value according to M*, so why are you rejecting that as a valid comparison? Clearly the RAFI 1000 index is not 50/50, so wh...
by mptfan
Sun Jun 03, 2007 7:19 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Morningstar x-ray shows that a 50/50 mix of iShares Russel 1000 Value fund and Vanguard Total Market Index has very similar distribution across the style box compared to Powershares RAFI Index fund. You may be right about that. But... looking at the returns of Russel 1000 value index and Total Mark...
by mptfan
Sun Jun 03, 2007 5:38 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Geez, even Mr. Arnott admits that the value tilt of the RAFI index explains much of the excess returns. I never denied that. In fact, I implicitly recognized that fact when I said a 50/50 value tilt is a fair comparison. Geez. P.S. Mr. Arnott suggests in the alternative that the fundamentally weigh...
by mptfan
Sun Jun 03, 2007 4:58 pm
Forum: Personal Investments
Topic: trust portfolio
Replies: 1
Views: 1240

Chelsea, you would certainly save money in lower expense ratios by switching to Vanguard, and that is the advice you will get from most people on here. But you mentioned the hassle of moving. The question becomes, how much money are we talking about here? If the trust is say $10,000, then a .50 ER d...
by mptfan
Sun Jun 03, 2007 4:42 pm
Forum: Investing - Theory, News & General
Topic: Keep both hands on your wallet investment fans.
Replies: 27
Views: 10308

Ken, you're right, but I don't want to hijack this thread to talk about that issue. Suffice it to say that I think it's better to take the tax savings now. Also, I remember reading somewhere that most people change jobs something like 7 times during their career, so I think it's safe to say that mos...
by mptfan
Sun Jun 03, 2007 4:32 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

The Russell 1000 Value index IS a valid comparison. In fact, WisdomTree uses it to compare performance with its new fundamentally-weighted Low P/E Fund (EZY). WisdomTree uses a different methodology to construct their fundamental index. For example, they have a fundamental index using dividends onl...
by mptfan
Sun Jun 03, 2007 4:28 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dave, that is an unfair comparison. I have never heard anyone suggest that you should own a value fund for your entire U.S. Large Cap exposure. Rather, people who want a value tilt use a combination of equal amounts of a large cap index fund and a large cap value fund, which would be a fair compari...
by mptfan
Sun Jun 03, 2007 4:20 pm
Forum: Investing - Theory, News & General
Topic: Keep both hands on your wallet investment fans.
Replies: 27
Views: 10308

Most (not all) 401k's I have seen offer lousy funds,higher fees. I guess I should have said it first that the order is: 1) max out employer contribution 2)roth IRA 3)taxable account Yeah you got it as far as I'm concerned (MOST)deferred ain't worth all that much without the matching . :shock: Are y...
by mptfan
Sun Jun 03, 2007 4:07 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Hmmm. The idea behind fundamental indexing seems to be the assumption that over the market as a whole, it is more likely that large-cap stocks will be overvalued than will be small-cap stocks--at least on a cap-weighted basis. Marco, I'm afraid that your understanding is incorrect, thus your assump...
by mptfan
Sun Jun 03, 2007 4:04 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Index Return Comparisons: Index 1YR 3YR 5YR 10YR RAFI 1000 15.6% 13.1% 9.4% 12.4% Russell 1000V 16.8% 14.4% 10.3% 10.9% * Data as of 3/31/07 Not sure I would want to wait 10 years to see if RAFI can outperform the Russell 1000 Value index in the real world. Dave, that is an unfair comparison. I hav...
by mptfan
Sun Jun 03, 2007 3:57 pm
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Please do your homework before you invest in them. All of the Schwab index funds have underperformed their Vanguard and Barclays counterparts by much more than the ER difference. Almost to the extend of 1% to 2% per annum over 3 and 5 years for Schwab 1000 vs. Total Stock.... That is an unfair comp...
by mptfan
Sun Jun 03, 2007 7:30 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

I think some of the same people who criticize this new way of investing would have criticized Mr. Bogle more than 30 years ago when he introduced the first index fund. Apparently if someone introduces a new idea which also has the potential for them to make money, that's all it takes for some people...
by mptfan
Sat Jun 02, 2007 11:43 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dieharder, maybe I took it in a way that it was not meant, but if you knew me, you would know that I am the complete opposite of a person who is subject to marketing hype. I tend to look for the "catch" in everything, including every sales pitch, so I am certainly not the type to fall for ...
by mptfan
Sat Jun 02, 2007 11:20 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dieharder, if I were to buy Vanguard ETFs, I would pay commissions on each buy and each sell order, plus the bid/ask spread. So it's not cost effective to use ETFs for regular monthly contributions with periodic rebalancing. You have ask yourself honestly are you making excuses to yourself to buy t...
by mptfan
Sat Jun 02, 2007 11:02 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dieharder, if I were to buy Vanguard ETFs, I would pay commissions on each buy and each sell order, plus the bid/ask spread. So it's not cost effective to use ETFs for regular monthly contributions with periodic rebalancing.
by mptfan
Sat Jun 02, 2007 11:00 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

adam, thank you for your response. I agree that the fundamental index is basically a diversified portfolio with a value tilt. (it's a bit more complicated than that, but I accept that very basic interpretation for purposes of our discussion) I also agree that growth sometimes outperforms value (e.g....
by mptfan
Sat Jun 02, 2007 10:53 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dieharder wrote:Bill Bernstein makes it very clear that he thinks fundamental indexing has merits, he also acknowledges the excess returns over market.
Dieharder, can you provide a cite for this? It would be interesting to see what Bernstein has to say on the topic.
by mptfan
Sat Jun 02, 2007 10:38 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dave, I stand corrected, the Powershares product is an ETF. I made a mistake, I thought it was a mutual fund. However, I did not "conveniently ignore" the fact that the Schwab fund has a 50k minimum, you will note in the post just above that I mentioned that to Dieharder. Also, I stated th...
by mptfan
Sat Jun 02, 2007 10:33 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Dieharder, you make a valid point that costs do matter. However, please be aware that Schwab has introduced a fundamental index product that charges only 44 bps if you invest at least 50k (SFLSX). For less than 50k, it is 59 bps (SFLVX). Those are not rock bottom Vanguard like ER's, but I think the ...
by mptfan
Sat Jun 02, 2007 10:14 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

And while it is true that the expense ratios of the currently available fundamental index funds are somewhat higher than the lowest cost Vanguard cap weighted index funds (.44 compared to .19) Why do you continue to show misleading cost information. You are comparing the least-accessible, highest m...
by mptfan
Sat Jun 02, 2007 10:08 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Rick, you appear to be focused on the word "index." I don't care what they call it. My only concern is whether the theory is sound, and whether I can use it and reasonably expect to get superior returns in the future.
by mptfan
Sat Jun 02, 2007 9:28 am
Forum: Investing - Theory, News & General
Topic: Generating Alpha in a F/F 3-Factor World -- Tough Job!
Replies: 3
Views: 1314

Thanks for pointing out this article.

I understand the theory, but I have yet to understand how to apply the theory in practice. In other words, how do I determine the size and value load factors of MY portfolio??
by mptfan
Sat Jun 02, 2007 9:11 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

mcdave, I don't care to debate whether the word "index" applies or not. We can call it a "market marker" or a "fuzzy whazit". I only care whether the theory is sound, and whether it will produce superior returns.
by mptfan
Sat Jun 02, 2007 8:52 am
Forum: Investing - Theory, News & General
Topic: Is Fundamental Indexing superior to Cap Weighted indexing?
Replies: 107
Views: 48989

Active mutual fund managers have never used capitalization weighted portfolios, yet a vast majority have underperformed capitalization weighted indexes. So, this idea of not cap weighting to beat the market is no guarantee of success. Rick Ferri Rick, I respect your views, and it's helpful to get d...