Larry Swedroe: Next "Bogleheads on Investing" podcast guest

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Rick Ferri
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Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Rick Ferri » Wed Jul 17, 2019 11:36 am

Larry Swedroe will be my guest on the next Bogleheads on Investing podcast. We will discuss Larry's views, his books, and answer questions from the Bogleheads.

Please post your questions for Larry on this thread. ONLY questions for a general audience will be considered, and questions will only be asked time permitting.

Rick Ferri
Podcast Host
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by willthrill81 » Wed Jul 17, 2019 11:40 am

Here's one I've been wondering about.

Larry is a big proponent of the efficient market hypothesis. But he has recently claimed that TIPS are cheap. How can this be if the EMH is reasonably accurate? Why are so many market participants buying Treasuries when they could be buying TIPS of an equivalent maturity with a higher expected real yield of between about 60 and 80 basis points? Is it because they have a much lower expectation of inflation than the FED and other entities?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by robert.wang » Wed Jul 17, 2019 12:07 pm

I am always wondering about this question: what would happen if the long term interest rate would be near zero forever? would the average return of the stock market also go down in the long term?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Day9 » Wed Jul 17, 2019 12:28 pm

Thank you very much. What are your thoughts on the new Vanguard Factor Funds, specifically Vanguard Multifactor (VFVM, VFVMX) and Vanguard Value Factor (VFVA)? These came out after Your Complete Guide to Factor-Based Investing. You have pointed out advantages of mutli-style funds over using multiple single-factor funds. In the Implementation appendix of the book the only Non-AQR, Non-DFA multi-style fund listed is Goldman Sachs Activebeta US Lage Cap Equity ETF (GSLC) and I would like to know how Vanguard Multifactor compares to that. If your answer is the funds are too new, or have too little AUM, then at what levels would you consider them? Thank you again!
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by columbia » Wed Jul 17, 2019 12:34 pm

I would interested in hearing about the most up to date version of the Larry Portfolio.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by robertmcd » Wed Jul 17, 2019 12:36 pm

What is your current opinion on risk parity investing (specifically in regards to US total stock market/S&P 500 and US treasury bonds) in the current economic climate? It seems most people think the fed has lost credibility and it is a sure bet rates will drop back to zero in the event that stock prices struggle.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by alankirkendall » Wed Jul 17, 2019 2:25 pm

Chris Pedersen/Paul Merriman have selected ETFs in 10 asset classes (https://paulmerriman.com/best-in-class- ... hold-2019/) in the attempt to mirror DFA funds as closely as possible. How well do you think they have they succeeded in this effort?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Fruition15 » Wed Jul 17, 2019 3:24 pm

willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by willthrill81 » Wed Jul 17, 2019 3:26 pm

Fruition15 wrote:
Wed Jul 17, 2019 3:24 pm
willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?
You can believe in the EMH and factors; the two are not mutually exclusive. There are EMH-compatible reasons for believing in factors, one of which being that they are caused by higher risk.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Grt2bOutdoors » Wed Jul 17, 2019 3:28 pm

Rick, I'm so looking forward to this podcast.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by HomerJ » Wed Jul 17, 2019 3:29 pm

columbia wrote:
Wed Jul 17, 2019 12:34 pm
I would interested in hearing about the most up to date version of the Larry Portfolio.
Follow up question: If it changes, doesn't that limit it's usefulness?
The J stands for Jay

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Broken Man 1999 » Wed Jul 17, 2019 3:41 pm

Rick, I think the long discussions you and Larry have had in the forum are some of the best ones I have read.

The fact you two can disagree without being disagreeable made the discussions even bettter. You both display passion for what you believe.

FWIW, I have followed your suggestions on some things, and Larry's suggestions on other things. Both of you come to conclusions that are backed with facts, rather than simplistic opinions.

And I feel I have a better portfolio from reading both of you.

I'm looking forward to the podcast.

Thanks in advance for your activities to help educate us. It is greatly appreciated! :sharebeer

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by jocdoc » Wed Jul 17, 2019 7:31 pm

What does he think of the Vanguard multifactor fund / ETF?
1. Is it constructed well as compared to the ishares multifactor funds he recommended in his book.
2.What is it strengths and weakness.
3. Would you use alone in place of the US total stock market fund or in conjunction with a total stock market fund.
4. The ETF is not a share class of the mutual fund. Which is better in a taxable account?
Is it better to use separate US small and large multifactor funds such as the ishares LRGF and SMLF instead of the vanguard fund?

5. The black box nature of some of these multifactor funds such as vanguard's VFMF execution becomes a concern. VFMV is rules based but with some human intervention possible. Would it be more rational to stick with a small cap value fund index such as slyv that gives you quality, value and size factor and almost neutral on the momentum that may give you extra return without the execution risk of the black box construction of the Vanguard fund often at a lower expense ratio>

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by whodidntante » Wed Jul 17, 2019 8:42 pm

Fruition15 wrote:
Wed Jul 17, 2019 3:24 pm
willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?
A swing and a miss! :happy

Eugene Fama developed the EMH. I think he also had something to do with factor research, LOL.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by stlutz » Wed Jul 17, 2019 10:32 pm

Swedroe has recently become a strong proponent of certain types of "alternative" investments--namely P2P lending and reinsurance. Are there additional opportunities he sees arising over the next 5 years that would be suitable investments?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by privatefarmer » Wed Jul 17, 2019 11:37 pm

Thank you for making this new podcast Rick and thank you to Larry for all of his contributions over the years.

I would love to know both of your opinions on the investing strategy known as "risk parity". There seems to be a lot of hype around it lately, particularly on the bogleheads forum. Do you believe we should search for a portfolio with the highest historical Sharpe ratio and even consider using leverage on that portfolio to get stock-like returns? Do you believe that mixing stocks with long-term treasuries and commodities would offer true diversification or is this a time-bomb waiting to explode as interest rates are at "historical lows"? Or do you believe this is all a waste of time and effort and that we should continue to take our risk in equities and use short-term treasuries or cash for stability?

Thanks again! I can't wait to hear it. -- Jason

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by packer16 » Thu Jul 18, 2019 7:22 am

Thanks for doing the Rick. I have 2 questions.

IMO one of the best attributes of a market weighted approach is the "mind of the market" (i.e. the weighted average views of market participant) is incorporated into the portfolio. How or is the "mind of the market" incorporated into the factor approaches given that the weights of holdings are not what the market participants have produced? Factor investing results are dependent upon how it is implemented. One difference in implementation is the position weightings (market weighted vs. factor weighted). What are Larry's views on each approach.

Also, a question on expected returns. Most estimates of stock & bond returns in the early 2000s were off in the same direction, namely bond expected returns were too high, large cap equity returns too low and large cap value just about right. What can be learned from this error? One observation is the difference between large cap stock & bonds appears to be much more consistent than these expected returns would have implied (See A. Damodaran's work on ERP for an example here). Have you considered changing your approach to expected returns as a result?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Grt2bOutdoors » Thu Jul 18, 2019 8:50 am

Here's a question - Isn't a simple portfolio of 1-4 index funds still the best way for the general public to grab their fair share of market returns without breaking the bank on expenses? If not, what has changed?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by azanon » Thu Jul 18, 2019 9:26 am

Here's my question:

Should an investor modify their portfolio as much as weekly as this new research is constantly coming out (such as Larry's research) or would he recommend that they stick with their low-cost, market-cap-weighted index funds that they chose maybe some 10-20 years ago, or more.

Or, another version of this question, is this research only for new investors who hasn't made an IPS portfolio decision, or is it for everyone, such as those who are already following an IPS and are just trying to stay disciplined?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Howard Donnelly » Thu Jul 18, 2019 9:34 am

Three questions please:

1. Jack Bogle did not like “factor” funds. How do you respond?
2. Small Cap Value currently has the worst performance of all Morningstar style categories. What is your current favorite factor fund?
3. May I ask, how many advisors do you currently represent?

Thank you,
Howard

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Blueskies123 » Thu Jul 18, 2019 9:48 am

What are his opinions on the federal deficit and if it matters anymore to interest rates and the dollar? What does he think of gold or other commodities?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Random Walker » Thu Jul 18, 2019 10:26 am

1.Discuss some of your interactions with John Bogle: same panel at Bogleheads conference, his blurbs on your books, your critique of telltale chart, cost matters hypothesis v. Cost per unit value added.

2.Is lack of portfolio efficiency a cost?

3.What is portfolio efficiency?

4.Explain why a near retiree or retiree might be better served by looking at diversification differently: sequence of returns risk
If someone is a strong believer in efficient markets, why should he expect behavioral anomalies to persist?

Dave

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Bruce » Thu Jul 18, 2019 11:54 am

Rick

Thanks so much for doing these podcasts! They are gems!

I would be curious to hear Larry’s thought on “recency bias” impacting investor expectations of future investing returns.

Has it been long enough since the last market downturn, that investor perceptions of market risk are impacted?

Is Larry still working with individual clients, and if so, does he have any generalized observations or lessons learned of clients risk expectations to share?

Regards
Bruce | | Winner of the 2017 Bogleheads Contest | | "Simplicity is the master key to financial success."

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Seasonal » Thu Jul 18, 2019 12:09 pm

whodidntante wrote:
Wed Jul 17, 2019 8:42 pm
Fruition15 wrote:
Wed Jul 17, 2019 3:24 pm
willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?
A swing and a miss! :happy

Eugene Fama developed the EMH. I think he also had something to do with factor research, LOL.
His factor research concerns the explanatory power of factors. Factor investing concerns overweighting factors (compared to market cap weights). The second does not necessarily follow from the first.

A mainstay of factor investment advocates is that factor investing is more diversified. Has Fama ever said this? Second question would be whether he has advocated the more extreme tilts away from cap weighted suggested by some factor advocates.

Those might be good questions for Larry.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by whodidntante » Thu Jul 18, 2019 1:09 pm

Seasonal wrote:
Thu Jul 18, 2019 12:09 pm
whodidntante wrote:
Wed Jul 17, 2019 8:42 pm
Fruition15 wrote:
Wed Jul 17, 2019 3:24 pm
willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?
A swing and a miss! :happy

Eugene Fama developed the EMH. I think he also had something to do with factor research, LOL.
His factor research concerns the explanatory power of factors. Factor investing concerns overweighting factors (compared to market cap weights). The second does not necessarily follow from the first.

A mainstay of factor investment advocates is that factor investing is more diversified. Has Fama ever said this? Second question would be whether he has advocated the more extreme tilts away from cap weighted suggested by some factor advocates.

Those might be good questions for Larry.
Fama has described factors as "different betas." Is your question about whether Fama accepts MPT? I don't think I would ask Larry what Fama thinks, and Larry has been clear about his thoughts on portfolio construction.

Now Fama would be an excellent future guest. Though in some interviews I've seen, he stopped just short of calling the interviewer an idiot. Lol

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by nedsaid » Thu Jul 18, 2019 2:21 pm

stlutz wrote:
Wed Jul 17, 2019 10:32 pm
Swedroe has recently become a strong proponent of certain types of "alternative" investments--namely P2P lending and reinsurance. Are there additional opportunities he sees arising over the next 5 years that would be suitable investments?
Perhaps Larry could discuss how Style Premia, Alternative Lending, Risk Variance Premium, and Reinsurance have benefitted portfolios in terms of performance, helping with better distributions of returns, and portfolio efficiency.
A fool and his money are good for business.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by 9-5 Suited » Thu Jul 18, 2019 2:42 pm

Larry often advocates a portfolio (sometimes called the Larry Portfolio) in his writings. This is typically something like 40% global small value equities and 60% safe fixed income. This reduces tail risk and diversifies across factors. But is Larry concerned it could also cause the investor to fall far short of savings goals in the simple situation where factor premia do not show up during the investor’s lifetime?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by 9-5 Suited » Thu Jul 18, 2019 2:45 pm

Howard Donnelly wrote:
Thu Jul 18, 2019 9:34 am
Three questions please:

1. Jack Bogle did not like “factor” funds. How do you respond?
2. Small Cap Value currently has the worst performance of all Morningstar style categories. What is your current favorite factor fund?
3. May I ask, how many advisors do you currently represent?

Thank you,
Howard
Larry has addressed #1 and #2 in great detail in many threads. He thinks Bogle is wrong based on his research findings and doesn’t consider simple past performance of factor funds a logical critique of factor investing. #3 hints at a kind of ad hominem cynicism that has developed about Larry that frustrates me. But oh well.
Last edited by 9-5 Suited on Thu Jul 18, 2019 2:48 pm, edited 1 time in total.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Dialectical Investor » Thu Jul 18, 2019 2:46 pm

I'd like to know what Larry eats for breakfast. You, too, Rick. And all your other future guests as well.

Also, Larry has stated something to the effect that a very small percentage of investors can tilt away from the market portfolio (however defined) without the help of an advisor, and stay the course while underperforming the market portfolio. What advice does he have for this group to identify themselves? (Honest question.) I already know I'm a member--several others here too--so tell us what makes us special. :greedy

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by jocdoc » Fri Jul 19, 2019 6:11 am

I would like to know Mr Swerdoe's opinion of what bonds and what duration to hold for a retirement portfolio given the low yield today. He had expressed a low opinion that short term tips fund. yet Vanguard prefers them for their target date fund.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by international001 » Fri Jul 19, 2019 6:51 am

alankirkendall wrote:
Wed Jul 17, 2019 2:25 pm
Chris Pedersen/Paul Merriman have selected ETFs in 10 asset classes (https://paulmerriman.com/best-in-class- ... hold-2019/) in the attempt to mirror DFA funds as closely as possible. How well do you think they have they succeeded in this effort?
Some of the changes look shady. Lower ER are fine... But sometimes he just changes the index based on recent performance.
So take it with a grain of salt

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Seasonal » Fri Jul 19, 2019 7:31 am

whodidntante wrote:
Thu Jul 18, 2019 1:09 pm
Seasonal wrote:
Thu Jul 18, 2019 12:09 pm
whodidntante wrote:
Wed Jul 17, 2019 8:42 pm
Fruition15 wrote:
Wed Jul 17, 2019 3:24 pm
willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?
A swing and a miss! :happy

Eugene Fama developed the EMH. I think he also had something to do with factor research, LOL.
His factor research concerns the explanatory power of factors. Factor investing concerns overweighting factors (compared to market cap weights). The second does not necessarily follow from the first.

A mainstay of factor investment advocates is that factor investing is more diversified. Has Fama ever said this? Second question would be whether he has advocated the more extreme tilts away from cap weighted suggested by some factor advocates.

Those might be good questions for Larry.
Fama has described factors as "different betas." Is your question about whether Fama accepts MPT? I don't think I would ask Larry what Fama thinks, and Larry has been clear about his thoughts on portfolio construction.

Now Fama would be an excellent future guest. Though in some interviews I've seen, he stopped just short of calling the interviewer an idiot. Lol
My questions regard diversification and large tilts. See above. I have yet to see a factor investing advocate who cites Fama for support provide a good answer.

I'm confident Fama accepts MPT in the sense of the relation between risk and expected return and does not accept MPT in the sense that volatility is the sole measure of risk.

The last time I heard Larry on Fama's thoughts he said Fama privately endorsed large tilts, but would not do so publicly due to issues with EMH. Fama has endorsed small tilts (taking more risk for the chance of more return) and Larry has called value investing a free stop at the dessert tray. I wonder if Fama has said anything new or Larry's thinking has evolved.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by WhyNotUs » Fri Jul 19, 2019 8:43 am

No question but rather a thank you to both of you for consistently advancing the dialogue on this and other forums. Many people benefit from your thinking out loud.

Simple works for me so I do not follow Larry's latest factor pursuit. Maybe if I decide to stop working and am looking for a hobby I will think about it but pickleball sounds like more fun. 8-)
I own the next hot stock- VTSAX

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by rosemary11 » Fri Jul 19, 2019 9:09 am

Mr. Swedroe recommends " 3 percent withdrawal rate" instead of "4 percent safe withdrawal rate".
Would you comment on the advantage and disadvantage of the 3 percent withdrawal rate versus the " spend safely in retirement" strategy developed by the Stanford Center on retirement , author Steve Vernon.
Let us assume an average retiree wants to apply the strategy , starting retirement age 65 and starting social security at age 70.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by wjo » Fri Jul 19, 2019 9:16 am

rosemary11 wrote:
Fri Jul 19, 2019 9:09 am
Mr. Swedroe recommends " 3 percent withdrawal rate" instead of "4 percent safe withdrawal rate".
Would you comment on the advantage and disadvantage of the 3 percent withdrawal rate versus the " spend safely in retirement" strategy developed by the Stanford Center on retirement , author Steve Vernon.
Let us assume an average retiree wants to apply the strategy , starting retirement age 65 and starting social security at age 70.
I think this is a very good, general interest question. I would also be interested in his thoughts about the merit of different withdrawal strategies in general and what his recommendations are.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by wjo » Fri Jul 19, 2019 9:18 am

Another thought would be Larry's perspectives on what to do to plan for lack of competence to handle your assets and affairs in retirement. There is a recent thread here on what to do when you have no family/friends to look after you in your old age. I'd appreciate his thoughts as rep of a firm that does expensive but supposedly full service financial management.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by lassevirensghost » Fri Jul 19, 2019 9:27 am

Howard Donnelly wrote:
Thu Jul 18, 2019 9:34 am
Three questions please:


2. Small Cap Value currently has the worst performance of all Morningstar style categories. What is your current favorite factor fund?


Thank you,
Howard
I would imagine Larry would say SCV or global SCV.

The more important question is actually for Howard Donnelly: what do you mean by "currently"? and what are your plans for when TSM ranks lower in style categories, lagging sub-sectors such as SCV?
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by aristotelian » Fri Jul 19, 2019 9:41 am

Low Volatility seems to have a great track record in achieving the same returns as the overall market but with lower volatility. Would you be in favor of using these funds to reduce sequence of returns risk and thus enabling higher Safe Withdrawal Rates? Overall, would you see Low Volatility as a superior factor to weight vs. Small Value?

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Leif » Fri Jul 19, 2019 10:17 am

This should be fun. I would be disappointed if the great commodity debate does not come up in the podcast.

Does he still recommend commodity funds, and personally own, as a risk diversifier? Does he also recommend long term bonds along with it?
Last edited by Leif on Mon Jul 22, 2019 8:46 am, edited 1 time in total.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by packer16 » Sun Jul 21, 2019 8:52 am

Another questions for Larry - You have stated that paying fees for value-add can be worth it for access to specific asset classes/tilts. What is a reasonable fee as % of value add if it structured as a fixed fee? If it is structured as a value-add above a benchmark? Thanks.

Packer
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by oncodoc » Sun Jul 21, 2019 9:25 am

These podcasts are fantastic. Here’s a general question for consideration, in light of the threads/discussions on recent factor underperformance:

What hypothetical evidence would it take to convince you that factor investing no longer “works” to a significant degree?

I think this question would be illuminating. Falsifiability is an important feature of any good hypothesis.

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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by DecumulatorDoc » Sun Jul 21, 2019 11:30 am

lassevirensghost wrote:
Fri Jul 19, 2019 9:27 am
Howard Donnelly wrote:
Thu Jul 18, 2019 9:34 am
Three questions please:


2. Small Cap Value currently has the worst performance of all Morningstar style categories. What is your current favorite factor fund?


Thank you,
Howard
I would imagine Larry would say SCV or global SCV.

The more important question is actually for Howard Donnelly: what do you mean by "currently"? and what are your plans for when TSM ranks lower in style categories, lagging sub-sectors such as SCV?
To me the most important Boglehead characteristic, once you have selected your portfolio allocation, is to stay the course. It's what surprises me about all the posts lately critical of the poor recent performance of SCV. And don't forget about the power of rebalancing. Remember that concept, you actually add to the asset that performs poorly, rather than abandon it at the urging of others here.

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arcticpineapplecorp.
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by arcticpineapplecorp. » Sun Jul 21, 2019 12:16 pm

alankirkendall wrote:
Wed Jul 17, 2019 2:25 pm
Chris Pedersen/Paul Merriman have selected ETFs in 10 asset classes (https://paulmerriman.com/best-in-class- ... hold-2019/) in the attempt to mirror DFA funds as closely as possible. How well do you think they have they succeeded in this effort?
actually, they're now advocating the "Two Funds For Life" portfolio to provide even more simplicity which consists of:
1. Target Date Retirement Fund (matching year closest to retirement date I believe)
2. Small Cap Value Index Fund

The percentages advocated are as follows:
1.5 X age in Target Date Fund and the rest in Small Cap Value Index Fund
It works like this: Multiply your age by 1.5, then use the result as the percentage of your portfolio that belongs in the target-date fund. For example, at age 20, you would have 30% of your portfolio in a target-date fund and the other 70% in a small-cap value fund.

When you are 40, 60% of your portfolio would be in a target-date fund, with the rest in a small-cap value fund.

Under this formula, by the time you reach age 67, all your money would be safely in the target date retirement fund.
source: https://paulmerriman.com/2-funds-for-li ... rich-buck/
https://www.google.com/search?client=fi ... s+for+life
So when you're younger you have a larger tilt to small cap value and around 66 or 67 you have no tilt to small cap value but are entirely in the target date retirement fund.

What does Larry think of such a portfolio as recommended by his friend Paul Merriman?
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

international001
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by international001 » Sun Jul 21, 2019 6:32 pm

arcticpineapplecorp. wrote:
Sun Jul 21, 2019 12:16 pm

So when you're younger you have a larger tilt to small cap value and around 66 or 67 you have no tilt to small cap value but are entirely in the target date retirement fund.

What does Larry think of such a portfolio as recommended by his friend Paul Merriman?
This seems kind of arbitrary glide path for SCV to me. And this means not to own any more SCV after 65? Even if you turn out to live 30 more years?

What does Larry think of glide paths, anyway. Does he agree with rising equity after retirement (like Kitces https://www.kitces.com/blog/should-equi ... ly-better/)?

Wind_Reaver
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Wind_Reaver » Mon Jul 22, 2019 10:25 am

Question for Larry:
  • What is the role of cash/cash equivalents in investor portfolio construction/maintenance?
Potential followup:
  • Has deposit banking become an anachronism?

jhawktx
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by jhawktx » Mon Jul 22, 2019 11:39 am

Maybe we will get a lecture on the value of SCV investing. Gag.

Howard Donnelly
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Howard Donnelly » Tue Jul 23, 2019 8:54 am

When can we expect the podcast to be done and available?

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Rick Ferri
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Rick Ferri » Fri Jul 26, 2019 10:46 am

I am recording the podcast on July 31 and plan to publish it on August 1.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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willthrill81
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by willthrill81 » Fri Jul 26, 2019 11:13 am

Rick Ferri wrote:
Fri Jul 26, 2019 10:46 am
I am recording the podcast on July 31 and plan to publish it on August 1.

Rick Ferri
Thanks for the update Rick.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Ben Mathew
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Re: Larry Swedroe: Next "Bogleheads on Investing" podcast guest

Post by Ben Mathew » Fri Jul 26, 2019 11:27 am

whodidntante wrote:
Wed Jul 17, 2019 8:42 pm
Fruition15 wrote:
Wed Jul 17, 2019 3:24 pm
willthrill81 wrote:
Wed Jul 17, 2019 11:40 am
Larry is a big proponent of the efficient market hypothesis.
He is? If this were the case, would he be such a big fan of factor investing?
A swing and a miss! :happy

Eugene Fama developed the EMH. I think he also had something to do with factor research, LOL.
To be fair though, Fama has not convincingly shown that the two are compatible. He believes that they are compatible--that the excess returns are fair compensation for risk. But it is a hard sell.
Last edited by Ben Mathew on Fri Jul 26, 2019 11:45 am, edited 1 time in total.

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