Jonathan Clements newsletter

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
pinot3
Posts: 47
Joined: Sat Nov 26, 2011 10:24 am

Jonathan Clements newsletter

Post by pinot3 »

Woohoo, Jonathan Clements has a newsletter available from his website and by subscription.

http://www.jonathanclements.com/sept-2015-newsletter

His style is very clear. :D
pinot3 / total expense ratio: .06%
User avatar
cfs
Posts: 4154
Joined: Fri Feb 23, 2007 12:22 am
Location: ~ Mi Propio Camino ~

Re: Jonathan Clements newsletter

Post by cfs »

Thank you.

Thank you for the link to the newsletter.

Interesting:

"Growth-stock funds are ahead of value funds not only in 2015, but also over the past five and 10 years. The performance gap isn’t enormous. Still, it’s a reminder that the academic research, which shows that bargain-priced value stocks have outperformed historically, doesn’t guarantee anything."

"If value funds have been slight laggards, international markets have been a huge disappointment. Vanguard’s total international stock index fund clocked 3.9% a year over the 10 years through Aug. 31, versus 7.4% for its total U.S. stock market index fund. That translates into a hefty cumulative difference—a 46% total gain for international, compared with 104% for the U.S. These figures are for the “investor” share class."
~ Member of the Active Retired Force since 2014 ~
User avatar
yukonjack
Posts: 647
Joined: Wed Feb 21, 2007 9:36 pm
Location: Rocky Mountain West

Re: Jonathan Clements newsletter

Post by yukonjack »

Thanks for the tip. I like reading JC in the past. Hope his newsletter continues the tradition.
User avatar
Toons
Posts: 14467
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: Jonathan Clements newsletter

Post by Toons »

Thanks
Not bad :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
grok87
Posts: 10512
Joined: Tue Feb 27, 2007 8:00 pm

Re: Jonathan Clements newsletter

Post by grok87 »

First of all let me say I am a big Jonathan Clements fan. I used to read his stuff all the time when he first was at the WSJ.

But I would take this specific advice with a grain of salt

"Hunting for Yield
The threat of rising interest rates continues to loom over the bond market. That makes it tricky for investors, who fear reaching for extra yield could come back to haunt them, because they might get hit with tumbling bond prices. To sidestep that threat, consider three strategies....Second, you might buy five-year certificates of deposit. If interest rates climb and other investments become more attractive, you can always cash in your CDs, pay the early withdrawal penalty and invest your money elsewhere. Start your search for higher-yielding CDs at Bankrate.com."

So 3 comments:

1) I have posted before about the idea of buying CDs with cheap early withdrawal penalties (EWPs) and cashing them in if rates rise. THe problem is most banks have language that let's them deny the early withdrawal. If rates rise a lot then I'm sure banks will start doing this.
https://www.depositaccounts.com/blog/im ... lties.html

2) Credit Unions sometimes don't have this "gotcha". For example Penfed used to have an EWP = 1 years interest and the only requirement was to submit the request in writing (i.e. they did not reserve the right to deny early withdrawal). But PenFed just massively upped their EWP- see here.
viewtopic.php?t=173266

3) Bankrate.com is ok but I prefer depositaccounts.com
for example here is a good discussion about the penfed EWP issue
https://www.depositaccounts.com/banks/p ... promo21647

cheers,
RIP Mr. Bogle.
vv19
Posts: 1159
Joined: Thu Aug 23, 2012 8:56 am

Re: Jonathan Clements newsletter

Post by vv19 »

These quotes are interesting.
As of yesterday’s market close, the S&P 500 was down a relatively modest 8% from its May high. If this drags on, without any further decline, I’ll eventually do a little buying and selling, to bring my holdings back into line with my target portfolio percentages. But to get enthusiastic about stocks, I’d like to see the S&P 500 off 25% from its high—and, at that juncture, I would probably overweight stocks, with a special focus on emerging markets.
Long-run returns—at least in the U.S.—are unlikely to be impressive for today’s buyers, because we are starting from such rich valuations.
Is he saying we should just hold cash and wait for the next correction before we buy any more stocks?
livesoft
Posts: 86079
Joined: Thu Mar 01, 2007 7:00 pm

Re: Jonathan Clements newsletter

Post by livesoft »

jay22 wrote:Is he saying we should just hold cash and wait for the next correction before we buy any more stocks?
I think he is saying that he will not rebalance until market values and momentum take him far enough away from his desired asset allocation.
Wiki This signature message sponsored by sscritic: Learn to fish.
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: Jonathan Clements newsletter

Post by Fallible »

pinot3 wrote:Woohoo, Jonathan Clements has a newsletter available from his website and by subscription.

http://www.jonathanclements.com/sept-2015-newsletter

His style is very clear. :D
As a subscriber and reader of his WSJ columns and books going back to the '90s, I was gad to see the first issue today. Also looking forward to his updated 2016 "Money Guide" and his upcoming book, "How To Think About Money."
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
vv19
Posts: 1159
Joined: Thu Aug 23, 2012 8:56 am

Re: Jonathan Clements newsletter

Post by vv19 »

This newsletter raises a very pertinent question - what is an investor supposed to do with these high valuations? Keep putting money into stocks when you know you're buying very expensive assets, or hold cash and see it's value erode due to inflation? :?:
User avatar
nisiprius
Advisory Board
Posts: 52216
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Jonathan Clements newsletter

Post by nisiprius »

jay22 wrote:This newsletter raises a very pertinent question - what is an investor supposed to do with these high valuations? Keep putting money into stocks when you know you're buying very expensive assets, or hold cash and see it's value erode due to inflation? :?:
Perhaps what an investor is supposed to say is "Things are what they are. Nobody ever promised me that there would always be investments that have as high a return as I would like. The market does not care about me and my needs. Sometimes, time are sucky for investors. When times are sucky, I can only do myself harm by listening to people selling investments I've never bought before, who are telling me what I want to hear. And I can only do myself harm by taking more risk than I used to take and pretending that I am not doing it, or that my risk tolerance has becomes higher than it used to be."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
livesoft
Posts: 86079
Joined: Thu Mar 01, 2007 7:00 pm

Re: Jonathan Clements newsletter

Post by livesoft »

jay22 wrote:This newsletter raises a very pertinent question - what is an investor supposed to do with these high valuations? Keep putting money into stocks when you know you're buying very expensive assets, or hold cash and see it's value erode due to inflation? :?:
I didn't get a hint of that question when I read the newsletter in my e-mail very early this morning. What I got was: OK, same ol' same ol' from Jonathan Clements who is clearly working on his "brand" in order to sell more books and remain relevant while he is semi-retired.
Wiki This signature message sponsored by sscritic: Learn to fish.
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: Jonathan Clements newsletter

Post by Fallible »

jay22 wrote:This newsletter raises a very pertinent question - what is an investor supposed to do with these high valuations? Keep putting money into stocks when you know you're buying very expensive assets, or hold cash and see it's value erode due to inflation? :?:
He has provided a link for comments and he's known for often responding to questions, so I would put the question to him.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
User avatar
Kevin M
Posts: 15789
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: Jonathan Clements newsletter

Post by Kevin M »

grok87 wrote:THe problem is most banks have language that let's them deny the early withdrawal. If rates rise a lot then I'm sure banks will start doing this.
How can you be so sure? I believe that Alan Roth has been recommending this strategy for the last ten years or so.

From mid-2012 to September 2013, 5-year Treasury yield increased by about 100 basis points, and I didn't hear any new reports about denials of early withdrawals.

I did a few early withdrawals on 5-year 2% CDs to buy some PenFed 5-year 3% CDs. Three percent seems like quite a bit more than 2%, so it doesn't necessarily require a general increase in interest rates for the early withdrawal option to be valuable.

Also, given that my average premium over Treasuries for CDs purchased in the last five years has been greater than 100 basis points, even if the early withdrawal were to be disallowed, I'm still way ahead on a risk-adjusted basis. An extra hundred basis points helps dampen the effect of rising interest rates even without the early withdrawal.

So my point of view is that CDs are a good deal relative to bonds, and the early withdrawal option is very nice icing on the cake. There is some liquidity risk due to the typical clauses in the terms and conditions, but that doesn't completely eliminate the value of the put option.
But PenFed just massively upped their EWP
PenFed has really gone down the tubes. Sad.
3) Bankrate.com is ok but I prefer depositaccounts.com
As do I. I don't even look at Bankrate.com

Kevin
If I make a calculation error, #Cruncher probably will let me know.
grok87
Posts: 10512
Joined: Tue Feb 27, 2007 8:00 pm

Re: Jonathan Clements newsletter

Post by grok87 »

Kevin M wrote:
grok87 wrote:THe problem is most banks have language that let's them deny the early withdrawal. If rates rise a lot then I'm sure banks will start doing this.
How can you be so sure? I believe that Alan Roth has been recommending this strategy for the last ten years or so.

From mid-2012 to September 2013, 5-year Treasury yield increased by about 100 basis points, and I didn't hear any new reports about denials of early withdrawals.

I did a few early withdrawals on 5-year 2% CDs to buy some PenFed 5-year 3% CDs. Three percent seems like quite a bit more than 2%, so it doesn't necessarily require a general increase in interest rates for the early withdrawal option to be valuable.
thanks. I guess you're right. I'm just a pessimist i suppose!
RIP Mr. Bogle.
vv19
Posts: 1159
Joined: Thu Aug 23, 2012 8:56 am

Re: Jonathan Clements newsletter

Post by vv19 »

livesoft wrote:
jay22 wrote:This newsletter raises a very pertinent question - what is an investor supposed to do with these high valuations? Keep putting money into stocks when you know you're buying very expensive assets, or hold cash and see it's value erode due to inflation? :?:
I didn't get a hint of that question when I read the newsletter in my e-mail very early this morning. What I got was: OK, same ol' same ol' from Jonathan Clements who is clearly working on his "brand" in order to sell more books and remain relevant while he is semi-retired.
So what if he is selling his brand? Doesn't mean his points and opinions are not valid. In my opinion, he is one of the most astute writers out there.
livesoft
Posts: 86079
Joined: Thu Mar 01, 2007 7:00 pm

Re: Jonathan Clements newsletter

Post by livesoft »

^Yep, so what? That was might my thought as well.
Last edited by livesoft on Sat Sep 12, 2015 9:49 am, edited 1 time in total.
Wiki This signature message sponsored by sscritic: Learn to fish.
User avatar
White Coat Investor
Posts: 17413
Joined: Fri Mar 02, 2007 8:11 pm
Location: Greatest Snow On Earth

Re: Jonathan Clements newsletter

Post by White Coat Investor »

I'm trying to figure out where he got his email list from. I'm on it and didn't opt in once, much less "double-opt-in," the standard for a newsletter like this. I mean, it's Jonathan so I'm not going to make a big fuss about it, but I do find it annoying to see one of the good guys not following best practices.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
livesoft
Posts: 86079
Joined: Thu Mar 01, 2007 7:00 pm

Re: Jonathan Clements newsletter

Post by livesoft »

^On where he got his e-mail list from …

I got an e-mail of the newsletter. I just presume it was because I have communicated with Jonathan Clements by e-mail before so that he has my e-mail in his list of contacts. As Fallible previously noted, he does answer questions and even his e-mails … or at least he was happy to do so in the past.
Wiki This signature message sponsored by sscritic: Learn to fish.
vv19
Posts: 1159
Joined: Thu Aug 23, 2012 8:56 am

Re: Jonathan Clements newsletter

Post by vv19 »

Fallible wrote:
jay22 wrote:This newsletter raises a very pertinent question - what is an investor supposed to do with these high valuations? Keep putting money into stocks when you know you're buying very expensive assets, or hold cash and see it's value erode due to inflation? :?:
He has provided a link for comments and he's known for often responding to questions, so I would put the question to him.
I did email him the same question. He was kind enough to reply.
If you were approaching retirement, I might suggest dialing back risk. But if you have more than a decade to go, I would keep plowing money into stocks. While there may be some bumps, you should do fine over a decade or longer. The stock market is an amazing long-run compounding machine, and we should try to avoid second-guessing the benefits, unless we'll need to convert stocks into cash in the near future.
Call_Me_Op
Posts: 9883
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Jonathan Clements newsletter

Post by Call_Me_Op »

cfs wrote: Interesting:

"Growth-stock funds are ahead of value funds not only in 2015, but also over the past five and 10 years. The performance gap isn’t enormous. Still, it’s a reminder that the academic research, which shows that bargain-priced value stocks have outperformed historically, doesn’t guarantee anything."
I am surprised he would make such a statement. The academics never claimed that the value premium would show-up in every 5 or 10 year period.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
pappascw
Posts: 15
Joined: Mon Aug 03, 2015 12:11 pm

Re: Jonathan Clements newsletter

Post by pappascw »

Thanks for the advice. Maybe I will stay out of it but put it in one of the banks she currently deals with for tracking purposes.
Post Reply