Search found 1526 matches

by BigJohn
Fri Aug 22, 2014 1:43 pm
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 7680

Re: Is the Aggregate Index Too Heavy in Treasuries?

Valuethinker, assumption in my statement about both TBM and the IT Corp Bond fund was that some amount of those bonds are likely callable and will generate some negative convexity. This may be a bad assumption as I have yet to find a way to understand how much call risk is buried in either. Chan_va,...
by BigJohn
Fri Aug 22, 2014 10:58 am
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 7680

Re: Is the Aggregate Index Too Heavy in Treasuries?

The effect is called "convexity" and I keep forgetting how it works, and don't know whether it's relevant here. Nisi, I'm no bond expert but at least a partial explantion here http://www.bogleheads.org/forum/viewtopic.php?p=2149769#p2149769 The negative convexity of MBS is one of the reasons I'm le...
by BigJohn
Fri Aug 22, 2014 10:50 am
Forum: Investing - Theory, News & General
Topic: Give Your Portfolio Room To Maneuver-DFA/Bridgeway
Replies: 13
Views: 2533

Re: Give Your Portfolio Room To Maneuver-DFA/Bridgeway

This statement near the end seems to be more than a little contradictory. While three years is too short a period to draw any statistically-sound conclusions, the lesson here is still a clear one: with investing, it makes the most sense to use the most broadly-diversified portfolios possible. I tota...
by BigJohn
Fri Aug 22, 2014 10:24 am
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 7680

Re: Is the Aggregate Index Too Heavy in Treasuries?

That is basically the approach I take. I started with TBM except no MBS or long bonds which brought me to the BarCap Intermediate (1-10) Government/Credit Index as my bogey. VFIUX is missing the 1-3 maturity range so I add a short Treasury fund in taxable which also increases my tax efficiency. The...
by BigJohn
Fri Aug 22, 2014 7:03 am
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 7680

Re: Is the Aggregate Index Too Heavy in Treasuries?

What do you mean by risk? How are you quantifying it? Fair question. For me it's the "risk creep" referred to earlier in this post (ie moving proportion of Tresaury vs Corporate) combined with the convexity risk of MBS. Just seems to me that if I set the ratio of Treasury to Corporate, I'll get les...
by BigJohn
Fri Aug 22, 2014 6:41 am
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 7680

Re: Is the Aggregate Index Too Heavy in Treasuries?

Simplegift, the historical graph you posted is fantastic, many thanks. I've been struggling with this question for some time as I approach retirement. In addition to the significant variability over time, I'm actually more disturbed by what appears to be a long term trend to significantly more MBS w...
by BigJohn
Fri Aug 22, 2014 6:01 am
Forum: Investing - Help with Personal Investments
Topic: When to put money into bond fund rather than home principal
Replies: 14
Views: 2326

Re: When to put money into bond fund rather than home princi

The Vanguard Long Term Tax Exempt fund has a 2.50% yield,a duration of 6.3 and liquidity, close but not equal to the 2.67% yield your mortgage offers. Also, it has a bit of risk, if rates move 1% up, the fund will decline by 6.3%. Be careful using this rule of thumb with the tax exempt muni funds. ...
by BigJohn
Wed Aug 20, 2014 6:27 am
Forum: Investing - Help with Personal Investments
Topic: Retirement Planning
Replies: 14
Views: 2112

Re: Retirement Planning

On this forum people avoid managed funds. And for good reason - time and time again, it has been shown that managed funds do not consistently outperform their respective index in the long term. johnny, I think it's more correct to say we avoid high cost managed funds as it's the cost that contribut...
by BigJohn
Wed Aug 20, 2014 12:14 am
Forum: Investing - Help with Personal Investments
Topic: TIPS vs SVF
Replies: 12
Views: 1836

Re: TIPS vs SVF

I am planning to retire in 6 - 9 months so have been giving fixed income investment a lot of thought. A much tougher decision than stocks where the choice of TSM/TISM is an easy one. My two cents below.... any comments on what I'm missing in my thinking on SVF vs TIPS would be welcome. I don't have ...
by BigJohn
Tue Aug 19, 2014 11:15 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement Planning
Replies: 14
Views: 2112

Re: Retirement Planning

While not in direct response to your questions, based on your info I have two thoughts for you to consider that might improve your financial position. 1) Have you looked at economics of refinancing your mortgage? Looks like you can still get a 15 year mortgage for between 3% and 3.5%. My prior analy...
by BigJohn
Mon Aug 18, 2014 11:32 pm
Forum: Investing - Theory, News & General
Topic: Retirement Party [Investment] Discussions
Replies: 50
Views: 5566

Re: Retirement Party [Investment] Discussions

She was surprised by the following aspects of my plan: 1. Wait to collect the Social Security at the age of 70. 2. Make Roth conversions during early-retirement years. 3. Use some of my investment "principal"--in addition to the interest--while waiting for the Social Security and paying taxes for t...
by BigJohn
Mon Aug 18, 2014 11:07 pm
Forum: Investing - Help with Personal Investments
Topic: Is the small cap value premium real?
Replies: 23
Views: 4405

Re: Is the small cap value premium real?

Ziggy, There are lots of threads on this forum that will provide you some insight into the diversity of opinion on this issue. Here are just a few, you can search for others http://www.bogleheads.org/forum/viewtopic.php?f=10&t=143834 http://www.bogleheads.org/forum/viewtopic.php?f=10&t=142818 http:/...
by BigJohn
Mon Aug 18, 2014 10:15 pm
Forum: Investing - Help with Personal Investments
Topic: [helping a family member to start investing]
Replies: 10
Views: 1069

Re: Do you know any of the 36% [that don’t save for retireme

Get your family member to read this, a free download: If You Can: How Millennials Can Get Rich Slowly +1 I sent copies to all my children, nieces and nephews in their mid to late 20's. So far the batting average is 4 out of 6 have read and asked a few questions about how best to start their retirem...
by BigJohn
Sun Aug 17, 2014 7:54 am
Forum: Personal Finance (Not Investing)
Topic: Power of Attorney
Replies: 32
Views: 3748

Re: Power of Attorney

Victorb, While I'm very comfortable managing my investments without an adviser, this is an area where I believe professional help is well worth the price. I worked with my elderly parents to be sure they went to a good estate attorney to create four key documents. A will and a durable PoA for financ...
by BigJohn
Wed Aug 13, 2014 10:54 pm
Forum: Investing - Theory, News & General
Topic: [Poll] How I Feel When I Think about Investing, etc.
Replies: 36
Views: 3647

Re: [Poll] How I Feel When I Think about Investing, etc.

I voted enjoy "Generally is a pleasant experience and relaxes me. I enjoy it."

Time spent increasing my investing knowledge increases confidence in my ability to manage my own finances without an adviser.
by BigJohn
Wed Aug 13, 2014 10:11 pm
Forum: Investing - Help with Personal Investments
Topic: Do you hold cash/money market outside of your emergency fund
Replies: 31
Views: 3025

Re: Do you hold cash/money market outside of your emergency

John3754 wrote:I do not, cash allocations are a drag on returns.
+1
by BigJohn
Sun Aug 10, 2014 2:17 pm
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 51
Views: 6889

Re: Withdrawl from Target Retirement or Life Strategy Fund

If your modifying your asset allocation by withdrawals you are market timing. This is not my plan. Just as during accumulation you can rebalance by adjusting your contributions, you can do the same during retirement by adjusting your withdrawals. Selling more of what's either up the most or down th...
by BigJohn
Sun Aug 10, 2014 10:54 am
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 51
Views: 6889

Re: Withdrawl from Target Retirement or Life Strategy Fund

antiqueman, My retirement financing plan is built around the Core Four portfolio. I have two main reasons for not using Target Retirement or any other mixed stock/bond fund. First, most of what I've read says rebalancing too often really doesn't help and may hurt returns. Second, in retirement I wan...
by BigJohn
Sun Aug 10, 2014 10:34 am
Forum: Investing - Help with Personal Investments
Topic: Just lost 3% Metlife Stable Value Fund - now what?
Replies: 4
Views: 1006

Re: Just lost 3% Metlife Stable Value Fund - now what?

I consider my stable value as part of my bond allocation although it's only earning ~2 - 2.5%. In my mind your stable value at 3% was really part of your bond allocation. There isn't anything in the bond world that gives you both the protection of principle and return that you have lost. 10 year CD'...
by BigJohn
Sat Aug 09, 2014 10:34 am
Forum: Personal Consumer Issues
Topic: Your Favorite charity organization...? please
Replies: 91
Views: 7585

Re: Your Favorite charity organization...? please

Then too, when I do donate, I prefer being able to make a one-time donation that will help make a difference with a special project or activity for a group, versus the situation of donating to the same organization year after year----in effect, be coming part of their annual budget. Sconie, please ...
by BigJohn
Sat Aug 09, 2014 9:10 am
Forum: Personal Consumer Issues
Topic: Insulation Question
Replies: 25
Views: 3064

Re: Insulation Question

I did what SteveNet recommended (no vapor barrier R-30 fiberglass rolls across the joists). I live in a hot humid climate on the US Gulf Coast and saw a noticeable drop in my summer electric bill. Probably paid for itself in 12 months or less. However, I was comfortable doing it myself so lower cost...
by BigJohn
Sat Aug 09, 2014 9:02 am
Forum: Personal Consumer Issues
Topic: Your Favorite charity organization...? please
Replies: 91
Views: 7585

Re: Your Favorite charity organization...? please

Like Nisi and others my first choice is our local food bank. I've been on the board of directors for many years and I know the money is well spent helping people with a basic need. It's unbelievable how many people go to bed hungry each night in this country. Don't think I've seen it mentioned yet b...
by BigJohn
Sat Aug 09, 2014 1:31 am
Forum: Investing - Theory, News & General
Topic: Which Vanguard Short Treasury Fund
Replies: 38
Views: 5198

Re: Which Vanguard Short Treasury Fund

antiqueman, My need is not exactly the same as Doc's as you'll see earlier in the thread. A tough call and probably no wrong answer but ultimately I choose VFIRX for two reasons. Primary reason was slightly longer duration and higher yield for what I view as a very manageable and small increase in i...
by BigJohn
Sat Aug 09, 2014 1:16 am
Forum: Investing - Help with Personal Investments
Topic: Understanding Muni/Treasury spreads
Replies: 9
Views: 1395

Re: Understanding Muni/Treasury spreads

* VWIUX contains callable bonds, which would make its duration increase when interest rates rise, leading to losses later on greater than can be expected by duration. This is called negative convexity. Unfortunately, there's no easily accessible number. ogd, not an expert and glad to be corrected i...
by BigJohn
Wed Aug 06, 2014 7:27 pm
Forum: Investing - Help with Personal Investments
Topic: VG PA long term or intermed tax exempt for EF?
Replies: 4
Views: 734

Re: VG PA long term or intermed tax exempt for EF?

No reason to have regrets about asking these questions. Lots of people on this forum, myself included, are struggling to make decisions on bond investments in this interest rate environment. I'm no bond expert but will give you some very high level answers to your last questions. Bond prices will dr...
by BigJohn
Tue Aug 05, 2014 10:57 pm
Forum: Investing - Help with Personal Investments
Topic: VG PA long term or intermed tax exempt for EF?
Replies: 4
Views: 734

Re: VG PA long term or intermed tax exempt for EF?

A couple of things to think about. If this is part of your emergency fund, how much are you willing to have the value move around? Depending on the fund you choose, are you comfortable with say a 10 - 15% drop in your EF value maybe just when you need it the most. I'd suggest you read this thread an...
by BigJohn
Sat Aug 02, 2014 11:46 pm
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 108
Views: 10508

Re: MOM faltering? [Momentum]

larryswedroe wrote:.... then the same logic applies to why the other factors should persist even after discovery, just like ERP persists
Larry, while the same logic may apply the probability that they will persist is certainly not the same.
by BigJohn
Fri Aug 01, 2014 11:07 pm
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 108
Views: 10508

Re: MOM faltering? [Momentum]

But it just blows my mind to see the frequency with which some people will make honest recommendations about an equity and fixed income ratio and half a breath later call factors make believe. How can you believe that asset allocation between equity and fixed income even matters at all and not ackn...
by BigJohn
Fri Aug 01, 2014 6:25 pm
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 108
Views: 10508

Re: MOM faltering? [Momentum]

thx1138 wrote:Wow, that was long...
.... but very educational. Thanks for taking the time to explain more fully.
by BigJohn
Thu Jul 31, 2014 11:24 pm
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 108
Views: 10508

Re: MOM faltering? [Momentum]

Matjen, thk1138, Larry, I appreciate the info on out of sample testing as that's not a concept with which I was very familiar. Not trying to put words in your mouth but it appears that you believe that this out of sample verification demonstrates there is causation even in the absence of proof tied ...
by BigJohn
Wed Jul 30, 2014 11:47 pm
Forum: Investing - Theory, News & General
Topic: Should retirement investors own small/value stocks at all?
Replies: 36
Views: 3919

Re: Should retirement investors own small/value stocks at al

Dr. Bernstein's observations regarding small and value equities raises the question of whether "tilting" is an appropriate strategy for investors who are retired and are drawing down their portfolios. First, these investors can be considered to be "lump sum" investors since they're not making syste...
by BigJohn
Wed Jul 30, 2014 11:29 pm
Forum: Investing - Theory, News & General
Topic: MOM faltering? [Momentum]
Replies: 108
Views: 10508

Re: MOM faltering? [Momentum]

Finally IMO claims of data mining in face of overwhelming evidence cannot be supported by any rational analysis of the data--- Larry, a few comments/questions about my apparently irrational belief that this is data mining. I found this article by Jason Zweig to be both entertaining and educational ...
by BigJohn
Tue Jul 29, 2014 11:19 pm
Forum: Investing - Theory, News & General
Topic: Anyone Switched to Vanguard Account Upgrade?
Replies: 48
Views: 20292

Re: Anyone Switched to Vanguard Account Upgrade?

Very interesting comments. I currently have a taxable mutual find account at VG but when I retire I'll have some NUA employer stock that needs to be moved into a taxable brokerage account. I went on the VG website to see if both could be held in a brokerage account. The site indicates that they can ...
by BigJohn
Tue Jul 29, 2014 11:03 pm
Forum: Investing - Help with Personal Investments
Topic: Tell me why I shouldn't buy individual muni bonds
Replies: 32
Views: 3519

Re: Tell me why I shouldn't buy individual muni bonds

FWIW, I have a similar amount in the VG national muni funds. However, I started out years ago owning individual bonds all in my state to minimize taxes (similar incremental rate). Over time I've migrated to the VG funds as the better option for me based on many of the reasons stated above. Primarily...
by BigJohn
Tue Jul 29, 2014 10:37 pm
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 8268

Re: Was ready to pull plug on Janus..until

The problem here is that you are conflating 3 potential changes: - Changing from Janus funds to Vanguard funds. - Changing from active funds to index funds. - Changing your asset allocation from a bunch of funds with an unknown representation of the stock market to a Total Stock Market fund. I agre...
by BigJohn
Tue Jul 29, 2014 6:59 pm
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 33
Views: 4420

Re: bond duration and interest rate risk

I'm not enough of a bond expert to understand the technical differences between all these duration definitions. What I learned in the link I posted was the VG Long Term TE is much more interest rate sensitive than I thought is was when all VG provided was the average duration number. This has me rec...
by BigJohn
Tue Jul 29, 2014 12:11 am
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 33
Views: 4420

Re: bond duration and interest rate risk

Here's at least on of the posts that discusses this issue and the difference between average duration which is impact by call provisions and the average stated maturity which is not. Also contains links to other posts and useful info. Before VG started providing both numbers I starting holding at le...
by BigJohn
Mon Jul 28, 2014 11:57 pm
Forum: Investing - Help with Personal Investments
Topic: Target Retirement vs Life Strategy Income
Replies: 7
Views: 1891

Re: Target Retirement vs Life Strategy Income

Here's a thread that I think will have useful information to compare these two alternatives.

http://www.bogleheads.org/forum/viewtop ... 1&t=141447
by BigJohn
Mon Jul 28, 2014 6:59 am
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 13450

Re: Larry: 20 Dollar Bills and Factor Persistence

Grayfox, thanks for the data, we're on the same page. Just for kicks I went and got the same numbers for VISVX, the small cap value fund Number of stocks = 830 Median Mkt Cap = $3.2M P/E = 23.9x P/B = 2.0x ROE = 11.2% EGR = 9.3% Clearly a bit more "value" than the total small cap space but still see...
by BigJohn
Sun Jul 27, 2014 8:50 pm
Forum: Personal Finance (Not Investing)
Topic: Selling House - Do We Need a Listing Broker?
Replies: 61
Views: 4640

Re: Selling House - Do We Need a Listing Broker?

I sold our's this way about 4 years ago in similar situation as had already bought our next home. We listed on FSBO and I'd offer the following to consider 1) I did not fall into the trap that our house was special. I did my homework and priced at the same $/sq ft as other houses in our neighborhood...
by BigJohn
Sun Jul 27, 2014 5:27 pm
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 13450

Re: Larry: 20 Dollar Bills and Factor Persistence

You seem to keep missing the point that if it's risk that leads to the premium doesn't matter how many people are aware of it it won't go away----in other words it's not higher risk adjusted returns (at least in isolation). No different than everyone aware of BETA premium but people don't fully inv...
by BigJohn
Sat Jul 26, 2014 1:13 pm
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 55
Views: 6798

Re: Momentum Investing ?

Heck no. Let's just agree on a standing "tee time" to meet on the internet and discuss/argue? Excellent, I love a good debate with a worthy opponent :beer I think we already have our tee-time. It's every post with the word/acronym Factor, Tilt, Value, Momentum or DFA in the title. To continue this ...
by BigJohn
Fri Jul 25, 2014 5:55 pm
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 55
Views: 6798

Re: Momentum Investing ?

OK, well we are just going to end up with where you ended up with Larry here I am guessing. Yea but what would we do with our time if we didn't debate this topic a least every other week. I'll make a pledge to stop posting arguments against factor investing if you pledge to stop posting arguments f...
by BigJohn
Thu Jul 24, 2014 11:51 pm
Forum: Investing - Theory, News & General
Topic: "What Has Time Taught Bill Bernstein?"
Replies: 19
Views: 4661

Re: "What Has Time Taught Bill Bernstein?"

Taylor, thanks for the link, a truly great article. As a engineer, the following really resonated with me. "As many other engineers and scientists have discovered, succeeding at investments isn't entirely the same as succeeding at science. Having a good feel for numbers is a necessary condition for ...
by BigJohn
Thu Jul 24, 2014 11:24 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking sample retirement portfolios
Replies: 13
Views: 1946

Re: Seeking sample retirement portfolios

You might want to do a forum search on this topic. Lots of current threads that might be of help to understand issues/questions that people in or near retirement (I'm one) are considering. Here are links to a few http://www.bogleheads.org/forum/viewtopic.php?f=1&t=143444 http://www.bogleheads.org/fo...
by BigJohn
Thu Jul 24, 2014 10:58 pm
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 55
Views: 6798

Re: Momentum Investing ?

I have also read his more fully formed, detailed, and more recent book "Rational Expectations." The book that has entire sections on tilting. In it he addresses this very question in pages 78-86. There is no doubt he thinks that factors exist and that they have excess returns and are more volatile....
by BigJohn
Thu Jul 24, 2014 8:13 pm
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 55
Views: 6798

Re: Momentum Investing ?

Exactly. Bernstein often writes/opines about factors perhaps decreasing a bit AND the ERP decreasing a bit. You can't just cherry pick one of them. Matjen, have you read the book? Lots of data based analysis in a single direction. When the masses can easily buy the factor or special asset, the corr...
by BigJohn
Thu Jul 24, 2014 8:02 pm
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 55
Views: 6798

Re: Momentum Investing ?

But here is best example--do you think ERP has disappeared given everyone knows equity has outperformed over long periods? However, the systemic changes since say 1950 IMO have shrunk premium---world is safer than it was after two world wars and Great Depression. And costs of trading and fund costs...
by BigJohn
Thu Jul 24, 2014 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement Portfolio Proposal
Replies: 23
Views: 3492

Re: Retirement Portfolio Proposal

I think BigJohn provided a very good post that you should be able to relate too (i.e. same age, questions and concerns, etc.). I found it interesting that BigJohn and others have no interest in the new Total International Bond Index fund. I further found it interesting that there is no recommendati...
by BigJohn
Thu Jul 24, 2014 2:12 am
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 55
Views: 6798

Re: Momentum Investing ?

Larry, You keep mentioning persistence of these factors over long periods of time. Just finished rereading Bill Bernstein's "Skating Where the Puck Was". Many examples were the "system" changes as soon as the ability to easily buy that factor becomes widely available. Near the end he says "If you've...