Search found 8818 matches

by Doc
Sun Oct 25, 2009 11:23 am
Forum: Investing - Theory, News & General
Topic: Fidelity, basic article on foreign stocks
Replies: 12
Views: 2419

Re: Fidelity, basic article on foreign stocks

I was struck by this chart. I've been too flip in saying "why bother, the correlation is so high." But am I the only one who doesn't think the captions jibe with the chart? What was the "crisis" from 1998 to 2009? Was 1998 to 2009 one continuous crisis interrupted by one brief moment of normality c...
by Doc
Sun Oct 25, 2009 10:50 am
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

I use Vanguard mostly. Rick Ferri Rick, can you give any logical reason why the indexes have such a wide difference . Unless we know why they are different is is very hard to make any kind of logical choice of one over another. The only reason for the difference given so far seems to be F&F loading...
by Doc
Sat Oct 24, 2009 12:10 pm
Forum: Investing - Theory, News & General
Topic: Who's Smarter: Vanguard or Fidelity Investors?
Replies: 26
Views: 4056

As you may recall, investor returns are calculated by adjusting returns for flows in and out of funds in order to arrive at an estimate of the average investor's return in the fund. Isn't this just saying that the average Vanguard investor is likely to be more dedicated to the "Buy and Hold" philos...
by Doc
Sat Oct 24, 2009 10:50 am
Forum: Investing - Theory, News & General
Topic: Who's Smarter: Vanguard or Fidelity Investors?
Replies: 26
Views: 4056

Smarter? The fact that Fidelity has higher workplace penetration means some folks have little choce but to use Fidelity funds for much of their retirement investing. I understand the "investor returns" concept to be an attempt to measure market timing or at least performance chasing. Maybe just fai...
by Doc
Sat Oct 24, 2009 10:36 am
Forum: Investing - Theory, News & General
Topic: Who's Smarter: Vanguard or Fidelity Investors?
Replies: 26
Views: 4056

Re: Who's Smarter: Vanguard or Fidelity Investors?

Who's Smarter: Vanguard or Fidelity Investors? http://news.morningstar.com/articlenet/article.aspx?id=312153 Based on investor returns The Winner Is ... Vanguard. Collectively, Vanguard investors earned a 2.63% annualized 10-year return compared with an annualized 1.52% for Fidelity investors. ... ...
by Doc
Sat Oct 24, 2009 10:14 am
Forum: Investing - Theory, News & General
Topic: Who's Smarter: Vanguard or Fidelity Investors?
Replies: 26
Views: 4056

Who's Smarter: Vanguard or Fidelity Investors?

Who's Smarter: Vanguard or Fidelity Investors? http://news.morningstar.com/articlenet/article.aspx?id=312153 Based on investor returns The Winner Is ... Vanguard. Collectively, Vanguard investors earned a 2.63% annualized 10-year return compared with an annualized 1.52% for Fidelity investors. ... i...
by Doc
Sat Oct 24, 2009 9:53 am
Forum: Investing - Theory, News & General
Topic: Small-cap with a twist beat the index
Replies: 12
Views: 3197

Re: Small-cap with a twist beat the index

Therefore, the S&P 600 missed the Internet bubble on both the way up and the way down. Starting the comparison nine years ago includes the 2001-2002 decline but not the 1999-2000 increase. This is not an indication that S&P's methodology is better or worse; it depends where the next bubble comes fr...
by Doc
Sat Oct 24, 2009 9:42 am
Forum: Investing - Theory, News & General
Topic: Small-cap with a twist beat the index
Replies: 12
Views: 3197

This notion by Morningstar ETF analyst Bradly Kay that S&P aims to select "the best companies" sounds more like an S&P Mission Statement than actual analysis - the portfolio's expected returns come from its exposure to the 3 Fama French risk factors , and not from S&P's determination that a company...
by Doc
Sat Oct 24, 2009 9:39 am
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

My guess is that a lot of it has to do with sampling the index, which all Small-cap funds do, and which necessarily introduces a "random" error. The sampling error should average to zero over time. Do you mean the funds/ETFs sampling the index or the index sampling of the small cap value universe? ...
by Doc
Fri Oct 23, 2009 6:56 pm
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

Right. Alpha. But doesn't the theory say that alpha for index funds should be zero? We need to know the index used to measure the alpha. But we have five different indexes. Various studies often quoted here refer to the Morningstar categories. The average active fund "lost" to the average of the st...
by Doc
Fri Oct 23, 2009 4:59 pm
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

Not looking at historical performance. Just looking at BtM and size, again per FF. NO! NO! NO! or maybe YES! YES! YES! "... looking at (the past performance) of BTM and size, again per FF." You are looking at past performance just not of the fund. The FF studies themselves are based on past perform...
by Doc
Fri Oct 23, 2009 1:42 pm
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

... where I prefer a smaller/valueyer benchmark). - DDB But how did you decide that a smaller/valuyer benchmark was preferable? Based on the F&F studies of past performance ? :shock: It's only preferable for me, not necessarily for anybody else. I target a certain level of risk in my portfolio, and...
by Doc
Fri Oct 23, 2009 12:32 pm
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

ddb wrote: ... where I prefer a smaller/valueyer benchmark).

- DDB
But how did you decide that a smaller/valuyer benchmark was preferable? Based on the F&F studies of past performance ? :shock:
by Doc
Fri Oct 23, 2009 12:12 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalancing by Fund
Replies: 17
Views: 2261

Re: Rebalancing by Fund

I rebalance when my (essentially fixed) AA gets outside the target range (+/- 5%) for each (major) asset (e.g. US stocks, EM stocks, bonds). I do have asset sub-classes (e.g. S&P 500, SCV), but those ranges are wider so they really are designed to be triggered very infrequently. Agreed. Rebalancing...
by Doc
Fri Oct 23, 2009 12:05 pm
Forum: Investing - Theory, News & General
Topic: ETF's based upon what indexes?
Replies: 27
Views: 3024

This question raises a conundrum for the passive investing advocates. That is which index? For the small value style box we have five ETFs representing five indexes. SPDR Dow Jones Small Cap Value, DSV, (Dow Jones) iShares Morningstar Small Value Index,JKL, (Morningstar) Vanguard Small Cap Value ETF...
by Doc
Thu Oct 22, 2009 7:06 pm
Forum: Investing - Help with Personal Investments
Topic: Why is a Short-Term Bond Fund Okay in a Taxable Account?
Replies: 15
Views: 4101

Re: Why is a Short-Term Bond Fund Okay in a Taxable Account?

1) Why is doing this not contrary to the BH maxim "bonds should only be in tax-advantaged accounts"? I think you may be overstating the maxim. "Only" should probably be "usually". I don't think there are any BH's who would say "if you don't have a tax advantaged account, you should not hold bonds i...
by Doc
Thu Oct 22, 2009 10:08 am
Forum: Investing - Theory, News & General
Topic: Brazil to levy 2% investment tax
Replies: 25
Views: 4546

Certainly a way to increase tax revenue without directly impacting the domestic tax payer. You are right when you use "directly" but ultimately it makes no difference. Corporations do not pay taxes only people do. Corporations collect the taxes by increasing their charge for goods and services from...
by Doc
Wed Oct 21, 2009 11:50 am
Forum: Investing - Theory, News & General
Topic: Which of these funds is least tax efficient?
Replies: 16
Views: 2483

Re: Fund tax-efficiency ?

billern wrote:Using the boggleheads chart of tax efficiency works for me.
Tax efficiency can be highly dependent on ones personal tax situation and as you noted things like qualified dividend distributions. Using a "one size fits all" chart can be detrimental to your investment portfolio.
by Doc
Wed Oct 21, 2009 11:45 am
Forum: Investing - Theory, News & General
Topic: New Medicare Premiums Part B/Higher Incomes
Replies: 25
Views: 3779

FWIW, the premium for my Medicare Advantage policy will go down by $600 a year.
by Doc
Wed Oct 21, 2009 11:40 am
Forum: Investing - Theory, News & General
Topic: New Box Score Report: Passive Management
Replies: 0
Views: 536

New Box Score Report: Passive Management

Recently Rick Ferri started a thread discussing Morningstar’s new report comparing active funds performance to its style box index returns. http://www.bogleheads.org/foru....hp?t=44101 Many responders used this study as a foil to make comments on passive investing. Here is a sampling of some comment...
by Doc
Wed Oct 21, 2009 9:45 am
Forum: Investing - Theory, News & General
Topic: Which of these funds is least tax efficient?
Replies: 16
Views: 2483

Re: Fund tax-efficiency ?

In practice, however, most fund companies do not specify if their distributions are eligible for this lower rate. Further NASDAQ, which supplies the raw daily data feed on distributions and NAVs for mutual funds, is not currently equipped to distinguish between income distributions that are eligibl...
by Doc
Tue Oct 20, 2009 6:58 pm
Forum: Investing - Theory, News & General
Topic: I still hate Vg Brokerage Service
Replies: 68
Views: 11115

The ONLY reason I can think of to ever use VBS, is if you are holding VG ETF's and want to qualify for Flagship. Flagship Services™ Flagship Services offers the height of personal attention from Vanguard to help you reach your goals, make the most of your investments, and protect your wealth. Inves...
by Doc
Mon Oct 19, 2009 7:14 pm
Forum: Investing - Theory, News & General
Topic: Which of these funds is least tax efficient?
Replies: 16
Views: 2483

Re: Fund tax-efficiency ?

I have gotten the idea from morningstar's disclosures that they do not take into account the preferential tax rates for the various types of dividends because they don't have enough detail. Generally, I believe they assume the dividends are all the worst kind . I would look at the information on mo...
by Doc
Mon Oct 19, 2009 2:20 pm
Forum: Investing - Theory, News & General
Topic: Which of these funds is least tax efficient?
Replies: 16
Views: 2483

Re: Fund tax-efficiency ?

Hi TC: I agree with Bob that you probably have the funds in the right order. How could I look this up for myself : You can get a rough idea (tax-efficiency changes) by putting each fund's name or ticker symbol in Morningstar's "Search" Box. When the fund comes up, hit the "Tax" link in the bar acro...
by Doc
Mon Oct 19, 2009 1:15 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

56% of the mid-cap value funds chosen by cost ratio and turnover in the 25% quartile beat Vanguard Mid Cap Value Index based on three year trailing returns. Hardly a definitive study, but I have better than 50/50 chance to beat the Vg index fund by closing my eyes and throwing darts at the screened...
by Doc
Mon Oct 19, 2009 8:47 am
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

I should also add that one needs to look at risk: did they win on return because they took out more risk, or example did they go smaller than the Vanguard fund? This new M* report builds on the S&P Active Scorecard data in that M* looks at actively managed funds on a risk-adjusted return basis usin...
by Doc
Sun Oct 18, 2009 4:45 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

The selection criteria for a new stock is very complex so it is difficult to know beforehand which stocks will be added or removed. Afterwards, I suspect index fund managers would be the first to notice the addition and be the first to buy and enjoy any increase. Hi Taylor, I've always wondered abo...
by Doc
Sun Oct 18, 2009 2:30 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

Once you use "average" you have arithmetic not finance. Fair enough, though it appears that the idea to screen funds and then ask how the set does suffers from the same complaint. If you look at even two funds you have this problem. However, I'm having a hard time figuring out a rational argument t...
by Doc
Sun Oct 18, 2009 1:30 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard Policy on IRA transfers?
Replies: 14
Views: 8005

the point is good companies don't put up such inexplicable roadblocks to managing (more of) your money. I'm not sure that it's not some government rules that are at play here. This week my wife started the procedure of moving some Fidelity IRA money to a Teacher Retirement plan. The transfer need t...
by Doc
Sat Oct 17, 2009 12:53 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

My guess, just a guess, is that the average active cost to the investor will never get that low, because offering low cost is not the objective for the vast majority of active funds. Nor, fundamentally, is the objective to provide superior returns. The fundamental objective is to earn money for the...
by Doc
Fri Oct 16, 2009 7:02 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

Doc wrote: Maybe information technology will have advance to the point during those thirty years that the average "active" mutual funds costs are down to ten bps Highly unlikely. The goal of active mutual funds are to create alpha to an appropriate benchmark (typically ignoring the one they supply)...
by Doc
Fri Oct 16, 2009 11:24 am
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

Until the end of time, there will always be "some" active investors that will beat passive, risk adjusted. However, I'm guessing around 15% looking at very long-term horizons (30 years plus). Of course, these winners will keep touting their success as strategy; however, probably only a small percen...
by Doc
Fri Oct 16, 2009 11:05 am
Forum: Investing - Theory, News & General
Topic: Tips Individual Bond Interest Late Pay out
Replies: 5
Views: 1187

The problem is the separation between the brokerage and the mutual fund sides of the house. The money is there. It shows as a credit on the lower right side of the brokerage holdings. It also shows in the transaction details of the brokerage account with the date of the 15th. But there is nothing on...
by Doc
Fri Oct 16, 2009 10:38 am
Forum: Investing - Theory, News & General
Topic: Tips Individual Bond Interest Late Pay out
Replies: 5
Views: 1187

Re: Tips Individual Bond Interest Late Pay out

I hold individual Tips bonds in my IRA Account. They were to pay interest on 10/15/2009. Evidently, Bank of NY handles this transaction. This money did not hit my Vanguard Acct until 10/16. It will not be available for me to reinvest until 10/17. The person from Flagship, felt it simple was late. I...
by Doc
Thu Oct 15, 2009 3:24 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard ETFS
Replies: 23
Views: 6873

dphmd wrote: My opinion is that they just created these funds so they could make ETF's for government and corporate bonds. They can't make ETF's off their current retail funds, since they aren't indexes.
That makes a lot of sense.
by Doc
Thu Oct 15, 2009 1:43 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard ETFS
Replies: 23
Views: 6873

sommerfeld wrote:
dphmd wrote:Since the other two share classes are Signal and Institutional, it sounds like the only way for the average investor to access these funds is through the ETF's.
I find this ominous.
:?: What's your thinking?
by Doc
Thu Oct 15, 2009 12:06 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard ETFS
Replies: 23
Views: 6873

I don't get it. Why would Vanguard want to offer bond ETF's that were not associated with an underlying mutal fund? The way I read the announcement, the ETF's are associated with the underlying mutual funds: I skimmed too fast and missed that. Thanks. Hey now I'm excited. Maybe the presence of the ...
by Doc
Thu Oct 15, 2009 10:15 am
Forum: Investing - Theory, News & General
Topic: New Vanguard ETFS
Replies: 23
Views: 6873

I don't get it. Why would Vanguard want to offer bond ETF's that were not associated with an underlying mutal fund? Especially the credit ETFs. There are already ETFs offered by Ishares that cover the 1-3 and 1-10 year credit range. They suffer from a very large premium over NAV. see http://www.barc...
by Doc
Wed Oct 14, 2009 6:38 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

My point is that most active investors won't even go through anywhere near the seven screens you (a professional) used, which gives them even less than a "coin toss" chance. And yet they persist in swallowing the Wall Street hype, hook line and sinker, and losing out to the indexes. Good point Mel,...
by Doc
Wed Oct 14, 2009 1:14 pm
Forum: Investing - Theory, News & General
Topic: Portfolio Tracking - How Do You Do It?
Replies: 26
Views: 3941

I have used Vanguard Portfolio Watch and Portfolio Tester tools. However I don't have any Schwab accounts. All my accounts, including Fidelity and T. Rowe Price, seem to be merged in correctly. I am happy with keeping things simple using the Vanguard tools, but have thought about M* x-ray tool just...
by Doc
Wed Oct 14, 2009 12:22 pm
Forum: Investing - Theory, News & General
Topic: Bond Funds v. Bonds
Replies: 50
Views: 8365

Assuming we throw out the principle of investing in bond funds because it is simpler, I expect that you can come up with a scheme that will mimic a ladder - but that is a long ways from saying a (single) bond fund is a ladder. And it is a long ways from saying a bond fund (or even a group of bond f...
by Doc
Wed Oct 14, 2009 12:11 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

JeffyScott, Based on your post, it appears you are one of the very few people who 'won' the active verses passive bet over the past ten years. Perhaps you should lock in your gains in use 100% index funds going forward . That is what many active managers do who beat the market. They become 'closet ...
by Doc
Tue Oct 13, 2009 6:58 pm
Forum: Investing - Theory, News & General
Topic: Bond Funds v. Bonds
Replies: 50
Views: 8365

Re: Bond Funds v. Bonds

Regardless, is there such an analysis? I think such an analysis would help show the true relative merit of owning bond funds versus individual bonds, assuming you hold both for relatively lenghy periods of time like 5, 10, 15 and 20 years. This might be a stupid question, but it's been nagging me f...
by Doc
Tue Oct 13, 2009 6:38 pm
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

My take away on the report is sumarized by the quote on page 4: In addition, Figure IV shows the batting average of all active funds by category. Active managers meet or beat the index half of the time over three years. "Meet or beat the index" despite having to pay expenses that the index does not ...
by Doc
Tue Oct 13, 2009 2:56 pm
Forum: Investing - Theory, News & General
Topic: TIPS current pros/cons article
Replies: 20
Views: 3526

TIPS have gained 7.9 percent this year, according to Merrill Lynch & Co. indexes, while Treasuries overall lost 2.8 percent. That’s the biggest outperformance since the U.S. first issued TIPS in 1997. Let me see if I've got this right. During the height of the credit crisis last fall Treasuries soa...
by Doc
Tue Oct 13, 2009 10:22 am
Forum: Investing - Theory, News & General
Topic: New Morningstar Box Score Report: Active Management
Replies: 97
Views: 10370

Re: Morningstar expert fund picks

Once again, the distinction between active and passive is a red-herring. The distinction should be between low cost and high cost funds. I would disagree . The distinction is between active and passive is very inportant. Given the low probability of choosing a manager or strategy that actually beat...
by Doc
Sun Oct 11, 2009 6:13 pm
Forum: Investing - Theory, News & General
Topic: Total Bond vs Bond Index
Replies: 13
Views: 2939

Re: Total Bond vs Bond Index

Basically the hassle factor became too great. You don't need to be very close. This is not a FI/Equity allocation. The differences between the FI results are not that great. My current Treasury allocation is 55% but the target is only 40%. I intend to do something about this over the next two or th...
by Doc
Sun Oct 11, 2009 5:42 pm
Forum: Investing - Theory, News & General
Topic: TIPS Allocation
Replies: 10
Views: 2321

Re: TIPS Allocation

...(snip)... But to answer your question, I don't have a percentage target. I have a TIPS rolling ladder that gives me a guaranteed income each year that covers my absolute minimum annual expenses. I assume in this worst case scenario I won't even pay RE taxes. That currently puts me at around 50% ...
by Doc
Sun Oct 11, 2009 2:20 pm
Forum: Investing - Theory, News & General
Topic: TIP Fund/Inflation Adjustment
Replies: 24
Views: 2552

Re: TIP Fund/Inflation Adjustment

Yes, the long bond comment is objectionable. Hmnn? History has shown us that the only security that does well in long periods of deflation has been long term government bonds. They keep paying out dividends and when they mature the dollars buy more then when you invested. Of course maybe you don't ...
by Doc
Sun Oct 11, 2009 1:13 pm
Forum: Investing - Theory, News & General
Topic: Total Bond vs Bond Index
Replies: 13
Views: 2939

Re: Total Bond vs Bond Index

Additionally, I do have one major difference from Taylors's overall approach. I consider TIPS to be Treasuries and subtract from the nominal Treasuries as I add TIPS. Taylor adds TIPS without changing the nominal Treasury amount (since he uses a total bond fund) so he has an overall over weight in ...