Search found 7770 matches

by Doc
Thu Oct 26, 2017 3:33 pm
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

Rekenthaler Report
'Star Ratings Are Not Predictive'
Except that they are
The star rating is very much predictive! In fact, it is more predictive of future fund deaths than is a fund's expense ratio.
http://news.morningstar.com/articlenet/ ... ?id=608627
08-21-13
by Doc
Thu Oct 26, 2017 2:30 pm
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

Sure, it's not written down anywhere. I suppose my point is just one of asking what the actual purpose of these star ratings is? If it's supposed to help one pick funds at all, you had better be comparing apples to apples. I don't think Morningstar ever made the claim that the star rating's purpose...
by Doc
Thu Oct 26, 2017 2:18 pm
Forum: Investing - Theory, News & General
Topic: 4 Bond-Fund Basics Worth Knowing
Replies: 6
Views: 1279

Re: 4 Bond-Fund Basics Worth Knowing

EHEngineer wrote:
Thu Oct 26, 2017 2:07 pm
Same topic here: viewtopic.php?f=1&t=230681
Maybe if someone posts it again next week it will get some traction. Third time's a charm they say.
by Doc
Thu Oct 26, 2017 1:58 pm
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

I just read the (lengthy) article from WSJ, the gold/silver/bronze is intended to be forward-looking based on analysts research ... Just to make things clear the OP was discussing "star" ratings not gold/silver/bronze. I don't think the latter are a quantitative rating but based highly on what the ...
by Doc
Thu Oct 26, 2017 1:54 pm
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

The Morningstar star rating is based on risk adjusted returns relative to the category. The fine print under the comparison states "Rating, risk, and return values are relative to each fund’s Morningstar Category." I'm sorry, but since M* itself acknowledges (see Portfolio tab) that the category av...
by Doc
Thu Oct 26, 2017 12:47 pm
Forum: Investing - Theory, News & General
Topic: 4 Bond-Fund Basics Worth Knowing
Replies: 6
Views: 1279

4 Bond-Fund Basics Worth Knowing

Your Benchmark is Worthless Well, maybe not if you're talking about niches like Ginnie Mae or Treasury funds, but when it comes to your core bond portfolio, the Bloomberg Barclays (née Lehman Brothers) U.S. Aggregate Bond Index just isn't going to do you much good. http://news.morningstar.com/artic...
by Doc
Thu Oct 26, 2017 12:43 pm
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

Here's a link to the performance chart. And here's the link to the "Rating and Risk" page: http://performance.morningstar.com/funds/etf/ratings-risk.action?t=VSS®ion=usa&culture=en-US (You have to add SCZ using the "compare" button.) The Morningstar star rating is based on risk adjusted returns ...
by Doc
Thu Oct 26, 2017 11:35 am
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

And Morningstar responds. The Morningstar Rating for Funds: A Good Starting Point for Investors?: Though it has limitations, the star rating has, on balance, pointed investors toward funds they can succeed with. http://news.morningstar.com/articlenet/article.aspx?id=824319 On balance, we found that ...
by Doc
Thu Oct 26, 2017 6:39 am
Forum: Investing - Theory, News & General
Topic: Morningstar 5 star rating not meaningful.
Replies: 26
Views: 1943

Re: Morningstar 5 star rating not meaningful.

I think even Morningstar has reported that ***** are not predictive of future good performance. On the other hand * and ** performance does tend to continue.
by Doc
Mon Oct 23, 2017 5:16 pm
Forum: Investing - Theory, News & General
Topic: Emergency Fund Allocation Nuance
Replies: 8
Views: 665

Re: Emergency Fund Allocation Nuance

We don't use a TBM fund because of opinions of Swedroe & Bogle. We break up our FI portfolio between taxable vs tax advantaged and corporate vs Treasuries for tax efficiency and negative correlation between Treasuries and equities in a flight to quality event. Our emergency fund is already there as ...
by Doc
Mon Oct 23, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

grok87 wrote:
Mon Oct 23, 2017 11:12 am
Hope that helps.
Are you really Larry Swedroe in disguise? :sharebeer
by Doc
Mon Oct 23, 2017 9:49 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Now assume we instead use the $20,000 to buy twenty 10-year TIPS, hoping that real rates will rise enough in ten and twenty years that the coupons and, more importantly, the principal can be reinvested so as to produce $26,957 after 30 years. But if real rates immediately fall to 0% and stay there,...
by Doc
Sun Oct 22, 2017 9:03 am
Forum: Investing - Theory, News & General
Topic: Charles schwab - why so much cheaper?
Replies: 53
Views: 8587

Re: Charles schwab - why so much cheaper?

What are your costs for trading and reinvesting dividends of Vanguard funds at Fidelity? I can’t seem to get a clear answer on their website. VGTSX $75 VGTSX $75 "Online Transaction Fees: $49.95 for most funds. Certain funds will have a transaction fee of $75. To identify any applicable transaction...
by Doc
Sun Oct 22, 2017 8:43 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Doc wrote: ↑Sun Oct 22, 2017 5:57 am Say I have a $30k obligation in 10 years. To have a LMP [Liability Matching Portfolio] ... can I buy a $28k coupon bond that will have coupons of $2k over the 10 years? Even that may not be enough, Doc, if the coupons can only be reinvested at a negative real ra...
by Doc
Sun Oct 22, 2017 5:57 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

So you are defining a LMP as a zero risk portfolio that will provide a fixed known cash flow over some time period in the future. It is not my definition. Matching the duration of liabilities to assets, whether nominal or real is a long established principle in the insurance industry, and the conce...
by Doc
Sat Oct 21, 2017 3:47 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Would be interesting to construct a combo TIPS+IBonds LMP over time where IBonds take care of the first $10k of each rung. I believe this would help minimize the problem of reinvestment of TIPS coupons Just put $3k in a TIPS fund and put your coupons in there. Reinvest in actual note when you get e...
by Doc
Sat Oct 21, 2017 2:33 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Nice graph, Doc; but there are 38 TIPS maturing from 2019 through 2047, not 31. Here they are [1], showing that the interest collected is about 14% of the principal. :oops: My bad https://s1.postimg.org/5jd77llw73/TIPS_Ladder_Capture.jpg Presentation Overview Total principal $46,699.93 Total accrue...
by Doc
Sat Oct 21, 2017 12:46 pm
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

PS. which one won? Well, PTTRX did win against VBILX, but by a much smaller margin. Also, it's an institutional fund, so this is cheating a tad. I didn't cheat, I used the lowest E/R for both. :wink: I bought PTTRX in 2006 after watching it for five years waiting for it to mess up. It never did exc...
by Doc
Sat Oct 21, 2017 10:50 am
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

the time periods are too short when solely using real-life funds That is a problem but if you go back more than about 20 years you really compound the "history repeating itself" factor. Regarding corporate bonds, I "touched" on that one with the "which bond fund is better, the green or the orange" ...
by Doc
Sat Oct 21, 2017 9:08 am
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

Funny, I think you actually used cherry picking on a rolling return question to confuse the answer. For the most part I took Vanguard funds and used a plot for the longest time available. But whatever fund I picked I used the longest time available. If you make the chart you can easily home in on t...
by Doc
Sat Oct 21, 2017 8:34 am
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

I ran out of interesting general questions to be addressed by this type of chart. Anybody got another one?
by Doc
Sat Oct 21, 2017 8:30 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Just for kicks I created an all TIPS ladder with one bond for each TIPS issue. Here's the cash flow chart. I think coupons are an important part as they are about 18% of the total but they could be ignored if that's the way you want to set up your LMP. https://s1.postimg.org/97uus147of/TIPS_Ladder_C...
by Doc
Sat Oct 21, 2017 6:25 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

I don't understand the "not LMP" argument. Seems to me that buying $20k thirtys or $21k tens with the intent of rolling the tens twice gets you to the same place. A liability matching portfolio is a fixed income portfolio with duration matching the duration of liabilities. By matching the durations...
by Doc
Fri Oct 20, 2017 4:04 pm
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

Hey Larry, does small cap value still outperform? Vanguard Small-Cap Value Index Fund (VISVX) Vanguard 500 Index Fund Investor Shares (VFINX) 24 month rolling returns: https://s1.postimg.org/77dm3il9xr/S_P_vs_SCV_Capture.jpg http://quotes.morningstar.com/chart/fund/chart?t=DFIHX®ion=usa&culture=e...
by Doc
Fri Oct 20, 2017 7:06 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

I would be buying tens or even sevens with the intention of rolling them when they mature to build my 30 year LMP. Taking 30 years of term risk for less than 1% is iffy. In a LMP for real liabilities, you would be matching the duration of TIPs holdings to the duration of real liabilities, and you w...
by Doc
Thu Oct 19, 2017 5:30 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

I would be buying tens or even sevens with the intention of rolling them when they mature to build my 30 year LMP. Taking 30 years of term risk for less than 1% is iffy. In a LMP for real liabilities, you would be matching the duration of TIPs holdings to the duration of real liabilities, and you w...
by Doc
Thu Oct 19, 2017 12:34 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Part of this would be verifying the annual inflation adjustment reported on the 1099-OID. But buying the same maturity at all three annual auctions instead of one would not significantly increase this complexity. Yes but you might be trading the OID for the ABP. And even if you didn't you would sti...
by Doc
Thu Oct 19, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

Bogleheads, which bond fund is better, the green or the orange? Thirty-six month rolling return chart for 20+ years: https://s1.postimg.org/7anw7uewxr/PTTRX_vs_VBTLX_Capture.jpg http://quotes.morningstar.com/chart/fund/chart?t=DFIHX®ion=usa&culture=en_US&dataParams=%7B%22zoomKey%22%3A11%2C%22vers...
by Doc
Wed Oct 18, 2017 2:39 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Grok, are you buying several times a year. That would be an accounting nightmare in a taxable account. Trusting our brokers to get the OID correct is scary.
by Doc
Wed Oct 18, 2017 2:35 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

grok87 wrote:
Wed Oct 18, 2017 11:55 am
Last chance to place orders before tomorrow's auction.
Current secondary yield is 0.91% so I'm predicting 0.90% at auction.
Cutoff is 10:30 AM eastern tommorow. Some brokers might close retail customers a bit earlier.
by Doc
Wed Oct 18, 2017 8:18 am
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

Re: The Tell Tale Chart

Jack, no international? S&P 500 - VFIAX Vanguard Developed Markets Index - VTMGX 36 month rolling return https://s1.postimg.org/9g12k3tvhr/Internaional_Capture.jpg http://quotes.morningstar.com/chart/fund/chart?t=DFIHX®ion=usa&culture=en_US&dataParams=%7B%22zoomKey%22%3A11%2C%22version%22%3A%22US...
by Doc
Tue Oct 17, 2017 3:12 pm
Forum: Investing - Theory, News & General
Topic: The Tell Tale Chart
Replies: 12
Views: 2571

The Tell Tale Chart

In a recent thread there was a discussion of whether a Total Return Chart as opposed to Price or Rolling Return Chart was more appropriate. Since I don't think many are familiar with a Rolling Return chart I though an example might be informative. For this purpose I used an S&P 500 fund (SPY), an in...
by Doc
Tue Oct 17, 2017 12:17 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Yes as per my original post these are for liability matching portfolio (LMP) strategy. My aim is to create a floor of 40% of my salary using social security and the TIPS ladder. I don't have a problem with that. If we take asset allocation to be a trade off among need, ability and willingness to ta...
by Doc
Tue Oct 17, 2017 12:08 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Please do the same chart but include the yields from 1997-1998. The early TIPS data is problematic because of their newness and low float. That's why I used only ten years. Here's my attempt to calculate "TIPS" yields back before TIPS actually existed. I subtracted the annualized "Personalized Cons...
by Doc
Mon Oct 16, 2017 5:38 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

Secondary yield now at 0.88% Up by 2 bps. :shock: I would like to see the thirty at 2% minimum. Up by at least 100 + bps. Repeating question. With current real yields way below historical levels why would you commit for 30 years. Why not by a ten now and roll it into a twenty when it matures. Locki...
by Doc
Sun Oct 15, 2017 4:11 pm
Forum: Investing - Theory, News & General
Topic: International [Are multinational US companies the same as international?]
Replies: 12
Views: 748

Re: International [Are multinational US companies the same as international?]

Are multinational US companies the same as international? I think that multinational US companies are essentially the same as multinational foreign companies. The largest companies both domestic and foreign are all fishing in the same pool so there should be very little difference in their performan...
by Doc
Sun Oct 15, 2017 12:32 pm
Forum: Investing - Theory, News & General
Topic: 30 year tips auction-thursday 10/19, yield 0.86%?
Replies: 47
Views: 4594

Re: 30 year tips auction-thursday 10/19, yield 0.86%?

TIPS- get them while they're hot! We have a different definition of "hot". https://s1.postimg.org/6j5u44vt5r/TIPS_Then_and_Now_Capture.jpg I would be buying tens or even sevens with the intention of rolling them when they mature to build my 30 year LMP. Taking 30 years of term risk for less than 1%...
by Doc
Sat Oct 14, 2017 11:06 am
Forum: Investing - Theory, News & General
Topic: Vanguard's long-term outlook for TIPS
Replies: 92
Views: 7818

Re: Vanguard's long-term outlook for TIPS

@longinvest We are talking about two different scenarios. I am addressing how TIPS might response in an equity market crash and how you can get some feeling for what that might be. You are addressing rebalncing in a normal non-crisis environment. In the latter case distributions and therefore total ...
by Doc
Sat Oct 14, 2017 10:12 am
Forum: Investing - Theory, News & General
Topic: Vanguard's long-term outlook for TIPS
Replies: 92
Views: 7818

Re: Vanguard's long-term outlook for TIPS

I don't see how a price chart can be more important than a total-return chart in a multi-assets portfolio. I personally think that a price chart is of no interest whatsoever to an investor, regardless of whether he's in his accumulation phase or in retirement. The price or rolling return chart is i...
by Doc
Fri Oct 13, 2017 6:24 am
Forum: Investing - Theory, News & General
Topic: Vanguard's long-term outlook for TIPS
Replies: 92
Views: 7818

Re: Vanguard's long-term outlook for TIPS

Doc, are you aware that Morningstar's "Rolling Returns" chart is based on the values from the Growth chart, not on the NAVs from the Price chart? Chicken and egg. Rolling returns are simply total returns over multiple overlapping time periods. They have some advantages over growth charts. They are ...
by Doc
Thu Oct 12, 2017 3:29 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's long-term outlook for TIPS
Replies: 92
Views: 7818

Re: Vanguard's long-term outlook for TIPS

A couple of things: What does "during the financial crisis" mean? NBER says the latest recession started in December 2007 and ended June 2009. From 12/1/2007 to 6/30/2009 $10,000 invested in the Vanguard VIPSX TIPS fund grew to $10,235. So in one sense, TIPS actually rose "during the financial cris...
by Doc
Thu Oct 12, 2017 11:18 am
Forum: Investing - Theory, News & General
Topic: Schwab now offering Index funds at lower ER than Vanguard
Replies: 9
Views: 1436

Re: Schwab now offering Index funds at lower ER than Vanguard

Not sure what the "Schwab 1000" index is, but if you want to track a broader index than the S&P 500, the Vanguard Total Market ETF is only 0.04% ER. "The Schwab 1000 Index was built in 1991 to track the largest 1000 stocks in the U.S." The 2017 Methodology document is here: http://www.schwab.com/pu...
by Doc
Thu Oct 12, 2017 11:03 am
Forum: Investing - Theory, News & General
Topic: Rebalancing - Personal Philosophies
Replies: 43
Views: 4001

Re: Rebalancing - Personal Philosophies

Regarding new investments and withdrawals for expenses:

I don't consider this rebalancing. Just good practice. Same with dividend reinvestment.

FWIW I rebalance based on ± 5% bands on the overall Equity/FI ratio target.
by Doc
Thu Oct 12, 2017 10:56 am
Forum: Investing - Theory, News & General
Topic: Rebalancing - Personal Philosophies
Replies: 43
Views: 4001

Re: Rebalancing - Personal Philosophies

Not to quibble, but I think when you TLH to reduce your equities, you are just "selling low". The magic of TLH is to harvest losses and purchase a similar asset. At least that's is how I do it. It's more common to "sell equities high" and buy bonds to get equity allocation lower. I'm missing someth...
by Doc
Thu Oct 12, 2017 8:08 am
Forum: Investing - Theory, News & General
Topic: 10 year anniversary of the beginning of the Great Recession
Replies: 45
Views: 4675

Re: 10 year anniversary of the beginning of the Great Recession

My present self is thankful to my younger self for strictly following my investment plan, including rebalancing all the way down and all the way back up. No good result, however, was sure to happen. PJW Sounds like only a very few of us were willing to rebalance into stocks in a falling market. Sta...
by Doc
Wed Oct 11, 2017 1:46 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3559

Re: What is a “bond bubble”?

There's nothing wrong with CDs and other cash investments. But, the fact that cash investments don't fluctuate in value doesn't make bonds a bad investment. Moreover the fact that (Treasury) bonds do fluctuate in value and that value often increases during a stock market bear may make them better t...
by Doc
Wed Oct 11, 2017 1:20 pm
Forum: Investing - Theory, News & General
Topic: What is a “bond bubble”?
Replies: 35
Views: 3559

Re: What is a “bond bubble”?

That's what a bear market could look like, in bonds. You need to look at price not total returns to determine what a bear looks like. What is a 'Bear Market' A bear market is a condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-su...
by Doc
Wed Oct 11, 2017 9:34 am
Forum: Investing - Theory, News & General
Topic: Vanguard's long-term outlook for TIPS
Replies: 92
Views: 7818

Re: Vanguard's long-term outlook for TIPS

I think there is a middle ground here. I'm building a tips ladder for my retirement. But what i really want is a federally insured inflation indexed annuity (basically more social security!) but it is not available. So i plan to use my tips ladder till i'm in my mid 80s (Deo Volente) and then buy s...
by Doc
Wed Oct 11, 2017 9:25 am
Forum: Investing - Theory, News & General
Topic: Vanguard bond ETF/funds
Replies: 21
Views: 1411

Re: Vanguard bond ETF/funds

If I could own only one Vanguard bond fund, it would be VSIGX (Vanguard Intermediate Term Government/Treasury Bond Index Fund Admiral Shares) or VBILX (Vanguard Intermediate Term Bond Index Fund Admiral Shares) (50/50 govt/corp), depending on the size of my bond allocation. VSIGX was, in fact, my f...