Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
bck63
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by bck63 » Mon Jan 06, 2020 9:30 pm

whodidntante wrote:
Mon Jan 06, 2020 9:28 pm
bck63 wrote:
Mon Jan 06, 2020 9:24 pm
If he says "small cap value" one more time I'm gonna drill a corkscrew into my eye.
You can probably sell tickets to that.
:sharebeer You get 20% of gross from dollar one, for the idea.

columbia
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by columbia » Mon Jan 06, 2020 9:36 pm

Uncorking a bottle of 🍷 would probably be a better idea.

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whodidntante
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by whodidntante » Mon Jan 06, 2020 9:51 pm

columbia wrote:
Mon Jan 06, 2020 9:36 pm
Uncorking a bottle of 🍷 would probably be a better idea.
Every time Paul says "small-cap value," DRINK! :happy

columbia
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by columbia » Mon Jan 06, 2020 9:52 pm

whodidntante wrote:
Mon Jan 06, 2020 9:51 pm
columbia wrote:
Mon Jan 06, 2020 9:36 pm
Uncorking a bottle of 🍷 would probably be a better idea.
Every time Paul says "small-cap value," DRINK! :happy

:P :beer

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One Ping
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by One Ping » Mon Jan 06, 2020 10:10 pm

Bama12 wrote:
Mon Jan 06, 2020 12:17 am
One Ping wrote:
Sun Jan 05, 2020 11:30 pm
Bama12 wrote:
Sun Jan 05, 2020 9:39 pm
Trader Joe wrote:
Sat Jan 04, 2020 6:57 pm
This is great news! I am very interested to hear from Paul Merriman how his Ultimate Buy and Hold Strategy Portfolio has held up vs. the ultimate passive investment strategy of VFIAX (SP&500).

If I recall correctly, Paul's portfolio was a Slice & Dice Portfolio using 10 separate funds. That sounds like an awful lot of rebalancing work - something I have zero interest in doing.

https://www.marketwatch.com/story/the-u ... -17?page=5

I recently asked Paul (Madslinger) on this forum how his reported Slice & Dice Portfolio compares to the the Paul Merriman Ultimate Buy and Hold Portfolio:

viewtopic.php?f=10&t=299424&newpost=493 ... ead#unread

FYI, I currently only invest in VFINX or VTSAX. Of course, I am always open to new data/information.

No, he teaches not to re-balance. It's buy and hold very simple. I have been doing it for years.
No. Paul Merriman's Ultimate Buy and Hold Portfolio returns are based on annual rebalancing. If you know of somewhere where he has said something different please post the link, thanks.
https://www.marketwatch.com/story/why-r ... 2013-11-20
Bama 12 –

The answer is still that the UBH Portfolio returns referenced in Paul’s UBH articles are based on rebalancing annually at the equity asset class level. I know this because I’m very familiar with how those returns are calculated and presented.

The article you referenced is NOT about the UBH Portfolio. It is an article Paul wrote more than 6 years ago exploring the more general effect on portfolio growth of rebalancing (or not) between equity asset classes. It did not use the UBH portfolio. That article used 4 US equity asset classes and return sequence data starting with 1963. The UBH Portfolio Paul uses for his UBH articles is a 10 equity asset class portfolio that he has been reporting returns for since the early 2000’s. The UBH return sequence data starts in 1970.

That's not to say you can't have a portfolio with those ten UBH equity asset classes and not rebalance between them. I have no doubt that you are satisfied with not rebalancing between equity asset classes. In fact, Paul as much said in the article that that might be the case, especially for younger investors. However, he still advocated in that article to rebalance between equity and fixed income to maintain your desired risk tolerance asset allocation.

I just want to make clear that returns quoted in his UBH articles and UBH podcasts are based on annual rebalancing between equity asset classes. This is different than your referenced article.

If you want more discussion about this, we can take it off-line via PM so as to not derail Rick’s podcast thread.
"Re-verify our range to target ... one ping only."

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Johnnie
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Johnnie » Mon Jan 06, 2020 11:13 pm

I have a question for Paul Merriman:

Paul, a Boglehead member asks: He has heard you say half your investment money is in 50/50 UBH, and half in a "mechanical" momentum-triggered market timing system managed by a professional. You report the latter keeps you out at the worst times and also at the best. It's a SWAN.

He also has seen articles suggesting that the firm Paul founded used the timing thing a lot with clients. Which to be clear, is empirical and rules based, not the "evil" market timing discussed elsewhere on BH (and by Paul Merriman, Dalbar, etc.). Also, Paul's been around a while and the same good data and info that's commonplace now was not widespread earlier in his career. But at some point he saw something of greater value and swung to UBH and similar.

The question for Paul is, does any of that resemble the truth, and if so can you describe your journey to recommending strict buy-hold-rebalance with low-cost index funds? (The question's author knows that Paul will nod at doing that with either Total Market (plus some World-ex-US) or UBH, because no one knows what the future will bring and either will do just about as well.)
"I know nothing."

Bama12
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Bama12 » Mon Jan 06, 2020 11:18 pm

One Ping wrote:
Mon Jan 06, 2020 10:10 pm
Bama12 wrote:
Mon Jan 06, 2020 12:17 am
One Ping wrote:
Sun Jan 05, 2020 11:30 pm
Bama12 wrote:
Sun Jan 05, 2020 9:39 pm
Trader Joe wrote:
Sat Jan 04, 2020 6:57 pm
This is great news! I am very interested to hear from Paul Merriman how his Ultimate Buy and Hold Strategy Portfolio has held up vs. the ultimate passive investment strategy of VFIAX (SP&500).

If I recall correctly, Paul's portfolio was a Slice & Dice Portfolio using 10 separate funds. That sounds like an awful lot of rebalancing work - something I have zero interest in doing.

https://www.marketwatch.com/story/the-u ... -17?page=5

I recently asked Paul (Madslinger) on this forum how his reported Slice & Dice Portfolio compares to the the Paul Merriman Ultimate Buy and Hold Portfolio:

viewtopic.php?f=10&t=299424&newpost=493 ... ead#unread

FYI, I currently only invest in VFINX or VTSAX. Of course, I am always open to new data/information.

No, he teaches not to re-balance. It's buy and hold very simple. I have been doing it for years.
No. Paul Merriman's Ultimate Buy and Hold Portfolio returns are based on annual rebalancing. If you know of somewhere where he has said something different please post the link, thanks.
https://www.marketwatch.com/story/why-r ... 2013-11-20
Bama 12 –

The answer is still that the UBH Portfolio returns referenced in Paul’s UBH articles are based on rebalancing annually at the equity asset class level. I know this because I’m very familiar with how those returns are calculated and presented.

The article you referenced is NOT about the UBH Portfolio. It is an article Paul wrote more than 6 years ago exploring the more general effect on portfolio growth of rebalancing (or not) between equity asset classes. It did not use the UBH portfolio. That article used 4 US equity asset classes and return sequence data starting with 1963. The UBH Portfolio Paul uses for his UBH articles is a 10 equity asset class portfolio that he has been reporting returns for since the early 2000’s. The UBH return sequence data starts in 1970.

That's not to say you can't have a portfolio with those ten UBH equity asset classes and not rebalance between them. I have no doubt that you are satisfied with not rebalancing between equity asset classes. In fact, Paul as much said in the article that that might be the case, especially for younger investors. However, he still advocated in that article to rebalance between equity and fixed income to maintain your desired risk tolerance asset allocation.

I just want to make clear that returns quoted in his UBH articles and UBH podcasts are based on annual rebalancing between equity asset classes. This is different than your referenced article.

If you want more discussion about this, we can take it off-line via PM so as to not derail Rick’s podcast thread.

I have talked to Paul about this.

OrangeMoney
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by OrangeMoney » Tue Jan 07, 2020 4:46 pm

Rick,

suggestion for a future show: interview Taylor for an overview of the Boglehead three-fund portfolio along with recommended allocations.

I've enjoyed the shows so far, especially the initial and social security episodes. Looking forward to the February episode.

bck63
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by bck63 » Tue Jan 07, 2020 6:01 pm

columbia wrote:
Mon Jan 06, 2020 9:36 pm
Uncorking a bottle of 🍷 would probably be a better idea.
:beer :beer

bck63
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by bck63 » Tue Jan 07, 2020 6:03 pm

whodidntante wrote:
Mon Jan 06, 2020 9:28 pm
bck63 wrote:
Mon Jan 06, 2020 9:24 pm
If he says "small cap value" one more time I'm gonna drill a corkscrew into my eye.
You can probably sell tickets to that.
Just for the record, my joke was intended to be good natured. I listen to every one of Mr. Merriman's "Sound Investing" podcasts and am so impressed with the sincerity and honesty with which he does his work on behalf of investors -- for free at this stage of his life.

He seems like a good, decent man.

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Taylor Larimore
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Laryngectomy

Post by Taylor Larimore » Tue Jan 07, 2020 10:00 pm

OrangeMoney wrote:
Tue Jan 07, 2020 4:46 pm
Rick,

Suggestion for a future show: interview Taylor for an overview of the Boglehead three-fund portfolio along with recommended allocations.

I've enjoyed the shows so far, especially the initial and social security episodes. Looking forward to the February episode.
OrangeMoney:

For 5-years I was a speech instructor for the American Institute of Banking. In 2005 I was diagnosed with throat cancer and underwent a laryngectomy which made me unable to speak. I now use an artificial electronic larynges to speak in a monotone. Accordingly, I am not a good candidate for Rick's wonderful podcasts but I appreciate your post.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "In the mutual fund field, no one else in the system is battling to bring back our
traditional values of trusteeship and our high promise of service to investors. Someone’s got to do it. By the process of elimination, I got the job."
"Simplicity is the master key to financial success." -- Jack Bogle

OrangeMoney
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Re: Laryngectomy

Post by OrangeMoney » Wed Jan 08, 2020 8:02 am

Taylor Larimore wrote:
Tue Jan 07, 2020 10:00 pm
OrangeMoney:

For 5-years I was a speech instructor for the American Institute of Banking. In 2005 I was diagnosed with throat cancer and underwent a laryngectomy which made me unable to speak. I now use an artificial electronic larynges to speak in a monotone. Accordingly, I am not a good candidate for Rick's wonderful podcasts but I appreciate your post.

Best wishes.
Taylor
I'm so sorry to hear that Taylor.
I hope other aspects of life are going better.
Happy New Year!

I still believe it would be good to have a podcast to review the Boglehead three-fund strategy.

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One Ping
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by One Ping » Wed Jan 08, 2020 11:52 am

Bama12 wrote:
Mon Jan 06, 2020 11:18 pm
One Ping wrote:
Mon Jan 06, 2020 10:10 pm
Bama12 wrote:
Mon Jan 06, 2020 12:17 am
One Ping wrote:
Sun Jan 05, 2020 11:30 pm
Bama12 wrote:
Sun Jan 05, 2020 9:39 pm
No, he teaches not to re-balance. It's buy and hold very simple. I have been doing it for years.
No. Paul Merriman's Ultimate Buy and Hold Portfolio returns are based on annual rebalancing. If you know of somewhere where he has said something different please post the link, thanks.
https://www.marketwatch.com/story/why-r ... 2013-11-20
The answer is still that the UBH Portfolio returns referenced in Paul’s UBH articles are based on rebalancing annually at the equity asset class level.
I have talked to Paul about this.
Nevertheless, this is what Paul said in his Ultimate buy and hold strategy: 2019 update:
"Assuming annual rebalancing (an assumption that applies throughout this discussion)"

(See the 13th paragraph, about 1/3 to 1/2 down the page.)
"Re-verify our range to target ... one ping only."

RandomPointer
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by RandomPointer » Wed Jan 08, 2020 12:52 pm

Q1: What was your greatest mistake? In life, or in investing that we can learn from?

Whatever he most comfortable sharing, I found that we learn a lot from realized mistakes.

Q2: What are you currently reading? Watching?

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One Ping
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by One Ping » Wed Jan 08, 2020 4:30 pm

Paul retired in 2012 and sold the wealth management company he founded. A few questions about his retirement from that:
1) Since his retirement, does he miss advising clients and running his company?
2) Presuming he's having more fun now :P, does he wish he'd given up the rat race sooner?
3) Now that he's out of the AUM system, how does he feel about advisors charging 1% or more to manage clients money?
4) What does he do in his free time?
"Re-verify our range to target ... one ping only."

Bama12
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Bama12 » Wed Jan 08, 2020 7:28 pm

One Ping wrote:
Wed Jan 08, 2020 11:52 am
Bama12 wrote:
Mon Jan 06, 2020 11:18 pm
One Ping wrote:
Mon Jan 06, 2020 10:10 pm
Bama12 wrote:
Mon Jan 06, 2020 12:17 am
One Ping wrote:
Sun Jan 05, 2020 11:30 pm

No. Paul Merriman's Ultimate Buy and Hold Portfolio returns are based on annual rebalancing. If you know of somewhere where he has said something different please post the link, thanks.
https://www.marketwatch.com/story/why-r ... 2013-11-20
The answer is still that the UBH Portfolio returns referenced in Paul’s UBH articles are based on rebalancing annually at the equity asset class level.
I have talked to Paul about this.
Nevertheless, this is what Paul said in his Ultimate buy and hold strategy: 2019 update:
"Assuming annual rebalancing (an assumption that applies throughout this discussion)"

(See the 13th paragraph, about 1/3 to 1/2 down the page.)
The rebalancing question I hear most frequently is how often should rebalancing be done. There’s no absolute right answer, as it’s a trade-off between risk and return.

In theory, the longer you postpone rebalancing, the higher your return will be. If you never rebalance at all (see above) you may get the highest return of all. But by doing that you would be gradually adding more risk to your portfolio.

At the other extreme, you could rebalance your funds every business day. That would absolutely prevent your level of risk from deviating from your targets. However, it also would absolutely prevent your higher-performing assets from compounding.

I generally recommend rebalancing once a year. That will avoid the tax cost of having short-term taxable gains. And it will let your “winning” asset classes do their thing when they are on a roll.

I have computed long-term results assuming annual rebalancing and (with exactly the same portfolio) assuming monthly rebalancing. Over 44 years, the compound return was 10.3% with annual rebalancing versus only 9.3% with monthly rebalancing.

That difference is a big deal. Over the 44 years, a $100,000 initial investment grew to about $8.2 million with annual rebalancing but only to about $6.8 million when rebalanced monthly.

It isn’t hard to understand the reason for the difference. When you rebalance every month you are taking the excess equity gains (in most months equities do better than bonds) and moving them to the safer (and less profitable) bond funds. Such short-term rebalancing never allows the best performing asset classes to take off and run.

Annual rebalancing will allow you to let the good times roll with the asset classes that are doing well while at the same time you let the poorer performers continue their struggle longer.

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One Ping
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by One Ping » Wed Jan 08, 2020 8:57 pm

Bama12 wrote:
Wed Jan 08, 2020 7:28 pm
One Ping wrote:
Wed Jan 08, 2020 11:52 am
Bama12 wrote:
Mon Jan 06, 2020 11:18 pm
One Ping wrote:
Mon Jan 06, 2020 10:10 pm
The answer is still that the UBH Portfolio returns referenced in Paul’s UBH articles are based on rebalancing annually at the equity asset class level.
I have talked to Paul about this.
Nevertheless, this is what Paul said in his Ultimate buy and hold strategy: 2019 update:
"Assuming annual rebalancing (an assumption that applies throughout this discussion)"

(See the 13th paragraph, about 1/3 to 1/2 down the page.)
The rebalancing question I hear most frequently is how often should rebalancing be done. There’s no absolute right answer, as it’s a trade-off between risk and return.

In theory, the longer you postpone rebalancing, the higher your return will be. If you never rebalance at all (see above) you may get the highest return of all. But by doing that you would be gradually adding more risk to your portfolio.

At the other extreme, you could rebalance your funds every business day. That would absolutely prevent your level of risk from deviating from your targets. However, it also would absolutely prevent your higher-performing assets from compounding.

I generally recommend rebalancing once a year. That will avoid the tax cost of having short-term taxable gains. And it will let your “winning” asset classes do their thing when they are on a roll.

I have computed long-term results assuming annual rebalancing and (with exactly the same portfolio) assuming monthly rebalancing. Over 44 years, the compound return was 10.3% with annual rebalancing versus only 9.3% with monthly rebalancing.

That difference is a big deal. Over the 44 years, a $100,000 initial investment grew to about $8.2 million with annual rebalancing but only to about $6.8 million when rebalanced monthly.

It isn’t hard to understand the reason for the difference. When you rebalance every month you are taking the excess equity gains (in most months equities do better than bonds) and moving them to the safer (and less profitable) bond funds. Such short-term rebalancing never allows the best performing asset classes to take off and run.

Annual rebalancing will allow you to let the good times roll with the asset classes that are doing well while at the same time you let the poorer performers continue their struggle longer.
Agree. I myself follow Larry Swedroe's 5/25 approach, checked once a year.

My concern, as I said earlier, is that people realize the returns quoted in the Ultimate Buy and Hold performance articles written by Paul are based on annual rebalancing.

Not rebalancing at all will likely gradually move the asset allocation toward those classes with higher 'expected' returns ... and higher 'risk' (e.g., standard deviation). Not necessarily bad, if you can stand the ride. :happy

One Ping :beer
"Re-verify our range to target ... one ping only."

Bama12
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Bama12 » Wed Jan 08, 2020 9:59 pm

One Ping wrote:
Wed Jan 08, 2020 8:57 pm
Bama12 wrote:
Wed Jan 08, 2020 7:28 pm
One Ping wrote:
Wed Jan 08, 2020 11:52 am
Bama12 wrote:
Mon Jan 06, 2020 11:18 pm
One Ping wrote:
Mon Jan 06, 2020 10:10 pm

The answer is still that the UBH Portfolio returns referenced in Paul’s UBH articles are based on rebalancing annually at the equity asset class level.
I have talked to Paul about this.
Nevertheless, this is what Paul said in his Ultimate buy and hold strategy: 2019 update:
"Assuming annual rebalancing (an assumption that applies throughout this discussion)"

(See the 13th paragraph, about 1/3 to 1/2 down the page.)
The rebalancing question I hear most frequently is how often should rebalancing be done. There’s no absolute right answer, as it’s a trade-off between risk and return.

In theory, the longer you postpone rebalancing, the higher your return will be. If you never rebalance at all (see above) you may get the highest return of all. But by doing that you would be gradually adding more risk to your portfolio.

At the other extreme, you could rebalance your funds every business day. That would absolutely prevent your level of risk from deviating from your targets. However, it also would absolutely prevent your higher-performing assets from compounding.

I generally recommend rebalancing once a year. That will avoid the tax cost of having short-term taxable gains. And it will let your “winning” asset classes do their thing when they are on a roll.

I have computed long-term results assuming annual rebalancing and (with exactly the same portfolio) assuming monthly rebalancing. Over 44 years, the compound return was 10.3% with annual rebalancing versus only 9.3% with monthly rebalancing.

That difference is a big deal. Over the 44 years, a $100,000 initial investment grew to about $8.2 million with annual rebalancing but only to about $6.8 million when rebalanced monthly.

It isn’t hard to understand the reason for the difference. When you rebalance every month you are taking the excess equity gains (in most months equities do better than bonds) and moving them to the safer (and less profitable) bond funds. Such short-term rebalancing never allows the best performing asset classes to take off and run.

Annual rebalancing will allow you to let the good times roll with the asset classes that are doing well while at the same time you let the poorer performers continue their struggle longer.
Agree. I myself follow Larry Swedroe's 5/25 approach, checked once a year.

My concern, as I said earlier, is that people realize the returns quoted in the Ultimate Buy and Hold performance articles written by Paul are based on annual rebalancing.

Not rebalancing at all will likely gradually move the asset allocation toward those classes with higher 'expected' returns ... and higher 'risk' (e.g., standard deviation). Not necessarily bad, if you can stand the ride. :happy

One Ping :beer
Just looked at Larry's 5/25, I really like it.

I have always been a big fan of the UBH but with me get more accounts I find it harder and harder to stay true to it.

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Horton
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Horton » Sat Jan 11, 2020 9:20 am

Ask Paul to talk about and explain his “Two Funds for Life” strategy. I was familiar with the UBH, but had not heard of this new strategy until recently. It’s a simple approach that may be easier for folks to implement and manage.

I second the comments above about Paul being a classy gentleman. I look forward to the discussion!
Last edited by Horton on Sat Jan 11, 2020 9:23 am, edited 1 time in total.

Jags4186
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Jags4186 » Sat Jan 11, 2020 9:21 am

Ask Paul what he thinks about the leveraged risk parity strategy (55/45 UPRO/TMF) that is talked about on the forum.

averagedude
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by averagedude » Sat Jan 11, 2020 9:43 am

I would like to ask him about his conflicting International allocation in the portfolios he recommends. For a young investor, the choices between UBH and the two funds for life has a huge difference in how they are allocated Internationally. Personally, I love the work Paul does and I find his podcasts entertaining. Another great guest on your podcast Rick.

brademac
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by brademac » Sat Jan 11, 2020 10:07 am

What is the mechanism behind the out performance of small cap value versus other asset classes?

Is it a relatively few number of stocks that go way up carrying the rest of the portfolio or is it a larger percentage of stocks outperforming in that index versus the stocks in other indexes?

Another way of asking this is...

There are approximately 400 stocks in S&P 600 value index. When comparing the performance of those 400 stocks to the performance of the 500 stocks in the S&P 500 what is the difference between the mean and median gain over the last several decades? That should indicate whether it is few stocks or many stocks carrying the outperformance.

Hopefully this makes sense. I am trying to figure out the best way to ask this and not sure I am articulating this very well.

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Small-Cap Value?

Post by Taylor Larimore » Sat Jan 11, 2020 10:59 am

brademac wrote:What is the mechanism behind the out performance of small cap value versus other asset classes?
brademac:

You have been misinformed. Small-cap value has the WORST performance of ALL 16 Morningstar style funds during the past 1-year, 3-years, and 5-years.

Morningstar Index Performance

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't look for the needle. Buy the haystack."
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Small-Cap Value?

Post by abuss368 » Sat Jan 11, 2020 1:03 pm

Taylor Larimore wrote:
Sat Jan 11, 2020 10:59 am
brademac wrote:What is the mechanism behind the out performance of small cap value versus other asset classes?
brademac:

You have been misinformed. Small-cap value has the WORST performance of ALL 16 Morningstar style funds during the past 1-year, 3-years, and 5-years.

Morningstar Index Performance

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't look for the needle. Buy the haystack."
Hi Taylor -

That is incredible. It really reinforces the strategy of total market investing.

Thanks you for sharing.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: Small-Cap Value?

Post by Jags4186 » Sat Jan 11, 2020 1:17 pm

abuss368 wrote:
Sat Jan 11, 2020 1:03 pm
Taylor Larimore wrote:
Sat Jan 11, 2020 10:59 am
brademac wrote:What is the mechanism behind the out performance of small cap value versus other asset classes?
brademac:

You have been misinformed. Small-cap value has the WORST performance of ALL 16 Morningstar style funds during the past 1-year, 3-years, and 5-years.

Morningstar Index Performance

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't look for the needle. Buy the haystack."
Hi Taylor -

That is incredible. It really reinforces the strategy of total market investing.

Thanks you for sharing.
Small-cap value has also outperformed the SP500 over the past 30, 25, and 20 years. I guess that means Taylor is also misinformed.

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Re: Small-Cap Value?

Post by abuss368 » Sat Jan 11, 2020 1:21 pm

Jags4186 wrote:
Sat Jan 11, 2020 1:17 pm
abuss368 wrote:
Sat Jan 11, 2020 1:03 pm
Taylor Larimore wrote:
Sat Jan 11, 2020 10:59 am
brademac wrote:What is the mechanism behind the out performance of small cap value versus other asset classes?
brademac:

You have been misinformed. Small-cap value has the WORST performance of ALL 16 Morningstar style funds during the past 1-year, 3-years, and 5-years.

Morningstar Index Performance

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't look for the needle. Buy the haystack."
Hi Taylor -

That is incredible. It really reinforces the strategy of total market investing.

Thanks you for sharing.
Small-cap value has also outperformed the SP500 over the past 30, 25, and 20 years. I guess that means Taylor is also misinformed.
Why does Vanguard not recommend or include in the all in one funds?
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: Small-Cap Value?

Post by whodidntante » Sat Jan 11, 2020 1:23 pm

Jags4186 wrote:
Sat Jan 11, 2020 1:17 pm
Small-cap value has also outperformed the SP500 over the past 30, 25, and 20 years. I guess that means Taylor is also misinformed.
Hi Jags4186,

That is incredible. It really reinforces the strategy of small-cap value investing!

Thank you for sharing!

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Re: Small-Cap Value?

Post by Jags4186 » Sat Jan 11, 2020 1:24 pm

abuss368 wrote:
Sat Jan 11, 2020 1:21 pm
Why does Vanguard not recommend or include in the all in one funds?
Define all-in-one funds?

If you mean Life Strategy or Target Date they do include it as part of the Total Stock Market which is a constituent part of both Life Strategy and TDFs. It is just such a small amount to not materially move the needle one way or the other.

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Re: Small-Cap Value?

Post by abuss368 » Sat Jan 11, 2020 2:38 pm

Jags4186 wrote:
Sat Jan 11, 2020 1:24 pm
abuss368 wrote:
Sat Jan 11, 2020 1:21 pm
Why does Vanguard not recommend or include in the all in one funds?
Define all-in-one funds?

If you mean Life Strategy or Target Date they do include it as part of the Total Stock Market which is a constituent part of both Life Strategy and TDFs. It is just such a small amount to not materially move the needle one way or the other.
Correct. My question was more of why Vanguard does not overweight the small value?
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: Small-Cap Value?

Post by Jags4186 » Sat Jan 11, 2020 2:41 pm

abuss368 wrote:
Sat Jan 11, 2020 2:38 pm
Jags4186 wrote:
Sat Jan 11, 2020 1:24 pm
abuss368 wrote:
Sat Jan 11, 2020 1:21 pm
Why does Vanguard not recommend or include in the all in one funds?
Define all-in-one funds?

If you mean Life Strategy or Target Date they do include it as part of the Total Stock Market which is a constituent part of both Life Strategy and TDFs. It is just such a small amount to not materially move the needle one way or the other.
Correct. My question was more of why Vanguard does not overweight the small value?
I wouldn't be able to tell you that. I would guess because Vanguard's philosophy is market weighting with its indexed products.

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Re: Small-Cap Value?

Post by willthrill81 » Sat Jan 11, 2020 3:09 pm

Jags4186 wrote:
Sat Jan 11, 2020 1:17 pm
abuss368 wrote:
Sat Jan 11, 2020 1:03 pm
Taylor Larimore wrote:
Sat Jan 11, 2020 10:59 am
brademac wrote:What is the mechanism behind the out performance of small cap value versus other asset classes?
brademac:

You have been misinformed. Small-cap value has the WORST performance of ALL 16 Morningstar style funds during the past 1-year, 3-years, and 5-years.

Morningstar Index Performance

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't look for the needle. Buy the haystack."
Hi Taylor -

That is incredible. It really reinforces the strategy of total market investing.

Thanks you for sharing.
Small-cap value has also outperformed the SP500 over the past 30, 25, and 20 years. I guess that means Taylor is also misinformed.
And stocks have absolutely trounced bonds over the last decade. I guess that means that bonds should be avoided entirely. Ditto for international stock. And small-caps. And value stocks.

Nothing but U.S. large-cap growth! :wink:
“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: Small-Cap Value?

Post by abuss368 » Sat Jan 11, 2020 3:11 pm

Jags4186 wrote:
Sat Jan 11, 2020 2:41 pm
abuss368 wrote:
Sat Jan 11, 2020 2:38 pm
Jags4186 wrote:
Sat Jan 11, 2020 1:24 pm
abuss368 wrote:
Sat Jan 11, 2020 1:21 pm
Why does Vanguard not recommend or include in the all in one funds?
Define all-in-one funds?

If you mean Life Strategy or Target Date they do include it as part of the Total Stock Market which is a constituent part of both Life Strategy and TDFs. It is just such a small amount to not materially move the needle one way or the other.
Correct. My question was more of why Vanguard does not overweight the small value?
I wouldn't be able to tell you that. I would guess because Vanguard's philosophy is market weighting with its indexed products.
Makes sense. Vanguard's index funds are market cap weighted.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by oldcomputerguy » Sun Jan 12, 2020 6:53 am

New member retirewithhelp has a question regarding moving from the UBH strategy to a 2-fund strategy, his question has been moved to its own topic here.

The discussion has strayed pretty far from Rick's request (questions to be posed to Mr. Merriman) into debates over the virtues of investing in various ways. Please bring it back to questions to be posted to the podcast guest.
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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by Rick Ferri » Mon Jan 13, 2020 7:41 am

oldcomputerguy wrote:
Sun Jan 12, 2020 6:53 am
New member retirewithhelp has a question regarding moving from the UBH strategy to a 2-fund strategy, his question has been moved to its own topic here.

The discussion has strayed pretty far from Rick's request (questions to be posed to Mr. Merriman) into debates over the virtues of investing in various ways. Please bring it back to questions to be posted to the podcast guest.
I have more than enough material for the podcast. Thank you for your participation.

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

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Re: Paul Merriman will be our February 2020 "Bogleheads on Investing" guest.

Post by rascott » Mon Jan 13, 2020 12:28 pm

Paul has mentioned a few times that he held a very high risk investment that returned something like 30% CAGR over a long period of time..... but was always at risk of going to zero. He said he finally sold out of this in retirement..... as he didn't need to take the risk.

Did he mean his own firm? Or was this some esoteric leveraged investment?

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