What do bogleheads *not* agree on?

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nydad
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What do bogleheads *not* agree on?

Post by nydad »

This page http://www.bogleheads.org/wiki/Boglehea ... Philosophy is a great overview of the areas on which there is general consensus amongst Bogleheads - including highly experienced authors, and denizens of this forum - stay the course, passive vs. active, index approach, asset allocation, low cost, diversify, be tax efficient, don't try to market time, don't try to predict interest rate changes...

However, much of the fun in this forum to me, and challenge, is when highly intelligent people disagree about fundamental things. So I wonder if we could try to catalog those here, and eventually create a wiki page for it.

This should not be every single little nitpicky disagreement - but rather big areas of disagreement.

Here are a few I've thought of:
Commodities futures and their role in portfolio (Swedroe vs Ferri)
Adding international/developed market bonds
Total Bond Market Index (Bogle says buy, Swedroe says no)
TIPS as inflation hedge, market timing on TIPS purchases
Whether small/value premiums will persist
Recommended allocation to international/emerging market equity

Any other thoughts? What questions do you have that the experienced members of this board don't agree on (leaving you, the poor individual, to have to make their own decision!)
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Scott S
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Post by Scott S »

* Whether rebalancing is a risk-reduction and/or return-improving strategy, and whether it succeeds at either
* Importance of and location for an emergency fund
* Whether to pay off the mortgage or stay flexible
* How to gauge one's ability to take risk

- Scott
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Opponent Process
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Post by Opponent Process »

bond market timing. Bogleheads tend to agree that successfully timing the stock market is impossible, but are unsure about bond markets.
30/30/20/20 | US/International/Bonds/TIPS | Average Age=37
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Post by rwwoods »

1) Diversification of fixed income into junk, foreign, etc (Swedroe says no, Ferri says yes)
2) Tactical adjustments in allocation based upon perceived market value (overweight equities at/near market bottom)
"I'm not so much concerned about the return on my money as the return of my money" - Will Rogers
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Post by sschullo »

In the poll What is your Investment Philosophy?http://www.bogleheads.org/forum/viewtop ... 1298044051Not sure if it’s a major disagreement, just different views of looking at the market.
Seems to be a disagreement about the existence of the EMH or not. I think some people like to see the market as reflecting a pattern of expression. Others don't know and they don’t care. Boglehead philosophy exists under any circumstances, whether it’s efficient or not, rational or irrational. It’s the investor’s behavior that counts (reflecting the Boglehead philosophy), and the less the investor does, the better for the investor’s bottom line, not what the market does or does not and certainly not what we expect the market to do.
"We have seen much more money made and kept by “ordinary people” who were temperamentally well suited for the investment process than by those who lacked this quality." Ben Graham
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ObliviousInvestor
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Post by ObliviousInvestor »

I'd add:

1. The role of annuities in retirement planning,
2. When to take Social Security,
3. Whether or not to tax-adjust one's asset allocation,
4. What percent of people are better off using an advisor, and
5. How much to tip for pizza delivery.
Last edited by ObliviousInvestor on Fri Feb 18, 2011 12:34 pm, edited 1 time in total.
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fredflinstone
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Post by fredflinstone »

I own several dozen individual large cap growth stocks instead of a large cap growth fund. I own 100+ individual micro cap value stocks instead of a microcap value fund. Very people here agree with me on either strategy. However, I still consider myself a Boglehead.
Stocks 28 / Gold 23 / Long-term US treasuries 19 / Cash (mainly CDs) 22 / TIPS 8
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Post by FredPeterson »

I'd mention this, but fear the entire thread will derail. But I'll do it anyway.

Precious Metals.
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fredflinstone
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Post by fredflinstone »

Opponent Process wrote:bond market timing. Bogleheads tend to agree that successfully timing the stock market is impossible, but are unsure about bond markets.
Yes, you are absolutely right. In fact this is probably one of the two biggest disagreements among Bogleheads. The other is whether to tilt equities toward small cap value.
Stocks 28 / Gold 23 / Long-term US treasuries 19 / Cash (mainly CDs) 22 / TIPS 8
dbr
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Post by dbr »

My first reaction is that none of the areas named are in fact big areas of disagreement. I think they are attempts to assess nuances where the less the consequence the more the discussion. Also the more nuanced an issue is the more chance there is for misunderstanding and/or errors of fact that need to be hashed out. I don't consider arriving at correct facts and correct logic to be points of disagreement.

The one I would credit is the question of assessing risk, but I don't think this has to do with disagreement so much as with the vagueness and ambiguity that surrounds that question.

It is also true that one can label as disagreements what are really matters of preference arising in psychological comfort or what are really matters of best choice for personal circumstances. De gustibus . . .
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bob90245
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Post by bob90245 »

Add this to your list of disagreements:

How to set asset allocation in distribution phase:

Either:

Capitalize pension and social security and use it as a bond equivalent

or

Use the pension and social security as cash flow that reduces amount needed from retirement portfolio. Then set asset allocation using standard willingness and need criteria.
Ignore the market noise. Keep to your rebalancing schedule whether that is semi-annual, annual or trigger bands.
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ObliviousInvestor
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Post by ObliviousInvestor »

bob90245 wrote:Add this to your list of disagreements:

How to set asset allocation in distribution phase:

Either:

Capitalize pension and social security and use it as a bond equivalent

or

Use the pension and social security as cash flow that reduces amount needed from retirement portfolio. Then set asset allocation using standard willingness and need criteria.
Ah yes, and the related question of whether one's "labor capital" should be included in one's allocation.
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dbr
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Post by dbr »

bob90245 wrote:Add this to your list of disagreements:

How to set asset allocation in distribution phase:

Either:

Capitalize pension and social security and use it as a bond equivalent

or

Use the pension and social security as cash flow that reduces amount needed from retirement portfolio. Then set asset allocation using standard willingness and need criteria.
I consider that one in the category of "needs correct analysis" rather than in the category of disagreement. Those kinds of choices can then be left to the individual who then understands clearly what the effect of making one choice or the other might be. Tax adjusting is in the same class and so is discussion of SV tilting.

I would like to add that rules of thumb are always by definition not Boglehead principles because rules of thumb do not have sufficient logical and factual correctness to be principles. There may be revered Boglehead gurus who choose to state rules of thumb, but that does not make such statements actual principles. (No I didn't read the philosophy link, but I still say what I say).
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DocHolliday
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Post by DocHolliday »

REIT Fund
The Wizard
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Post by The Wizard »

ObliviousInvestor wrote: Ah yes, and the related question of whether one's "labor capital" should be included in one's allocation.
Don't think I've heard this one recently if ever.
What is the key point of it?
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Post by dbr »

The Wizard wrote:
ObliviousInvestor wrote: Ah yes, and the related question of whether one's "labor capital" should be included in one's allocation.
Don't think I've heard this one recently if ever.
What is the key point of it?
This is the idea that a person who can look forward to a long career of earning money has less at risk in whatever investments they hold and therefore can have a more risky AA. It is associated with the general theory that young investors can take more risk, but not because time diverisifies risk (another item for the list). The idea also applies to people who have very secure labor income streams such as tenured academics. The dispute is probably about how much sense it makes to literally capitalize such an asset, thereby thinking of it as a low risk bond. It is also possible to take such a situation into account by assessing the effect under "ability to take risk."
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Post by SpringMan »

A couple more:
Whether to pay $5K for a wrist watch.
Whether to go to court and pay more for a traffic ticket in order to get the points expunged.
Best Wishes, SpringMan
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Tortoise
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Post by Tortoise »

Total market versus slice & dice investing.

Often boils down to disagreement over the meaning of "diversified."
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Post by CaliJim »

..
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Post by thedude »

Mac vs. PC.

Worst part is that people can't seem to just *not care* what other people's preferences are and often insist they know better than anyone else exactly WHY one is better.
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Post by CABob »

Mortgage backed securities
Should E-fund be a part of asset allocation?
Total return vs. dividend approach
Bob Brinker’s radio show and newsletter
Dan Wiener’s newsletter
Best books for beginner
Bob
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Post by bottlecap »

Politics. Hence, it is forbidden....
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Post by retcaveman »

Paper saving's bonds vs an e account with Treasury Direct.

ETF's vs Mutual Funds
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Post by manuvns »

is DCA generally agreed upon ( may be lump sum for small amount ? )

oh BTW used vs new car :)
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Post by bdpb »

Should a mortgage (or debt) be considered a negative bond?
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Post by scubadiver »

Pre-pay mortgage or invest more?

Whether or not parents should fund their children's entire college education if they have the means to do so.

Rent home or buy home?
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Post by mptfan »

Whether you should recycle your dryer sheets.
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Post by gkaplan »

Foreign investing: Should we? If so, to what degree?
Gordon
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Post by dailybagel »

Whether the CPI used to calculate social security COLAs and TIPS principal adjustments is accurate. What the standard of comparison is, i.e. what the "true" inflation number is, I'm not really sure.
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Post by jimbone »

There is an interesting battle going on here: http://www.bogleheads.org/forum/viewtopic.php?t=68915, so I am going to say life insurance.
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Post by Dingle »

Whether or not pension and social security count as an asset
Lease or buy a car
is not the time to invest
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Post by tsturbo »

Briefs or Boxers?
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Post by rob »

Sorry if I missed this above....

The need and weighting of non US stock (foreign). A lot tend to be in the up to 20% while some of us are closer to 50%
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Post by stan1 »

A few do get resolved. The ETF vs. mutual fund debate that was rampant when this board was created 3 years ago has now pretty much died down and most everyone agrees they are two packagings of the same underlying product.
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Post by cjackson0 »

VI or Emacs
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Post by fundtalker123 »

Whether to buy a BMW or just a Honda civic.
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Post by Ozonewanderer »

CaliJim wrote: chuck norris or bruce lee
Are you kidding me? This a point in contention???? No contest - Bruce Lee of course!!!

How about Permanent Portfolio? Actually I'm not sure what the debate is about. It just seems to get talked about a whole lot...
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Post by wbond »

EO 11110
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Post by EO 11110 »

insurance company annuities versus self annuitization
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Post by letsgobobby »

is P/E 10 actionable?
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Post by verygoodthings »

I admit not having been here as long as most others, but in my scouring the boards:

1) Rebalancing
2) Use of Margin or leverage
3) How to handle mortgage (pay off or hold)
4) Vanguard vs DFA
5) Value investing
6) Gold
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Post by verygoodthings »

Another big topic to add:

-How much money is enough for retirement (seems to be a wide range of opinion)
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Post by CaliJim »

..
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Post by SSSS »

Hmm...

Image
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Post by dbonnett »

Market timing and capturing momentum
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Post by dratkinson »

Any allocation of less than 5% of your total portfolio.
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Post by DRiP Guy »

mptfan wrote:Whether you should recycle your dryer sheets.
WRONG FORUM! WRONG FORUM!!!!



:lol:
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Post by SP-diceman »

They don’t agree on what Bogleheads don’t agree on.
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nydad
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Post by nydad »

Nothing is certain... usually.

I've taken the liberty of selecting a number of these and placing them in the wiki. Please take a look and update / comment - a lot more can be added, but just as we have areas of agreement in the wiki, I think it would be useful to capture in one place areas of disagreement with links to more detailed articles/threads, etc.

http://www.bogleheads.org/wiki/Bogleheads_debates
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Post by LadyGeek »

Don't forget about the disagreement whether holding individual bonds is similar to a bond fund.

Wiki article link: Individual Bonds vs a Bond Fund, which references Bond fund versus individual bonds, definitive answer (External link)

The wiki collaboration page turned into a no-holds barred smackdown: Individual Bonds vs a Bond Fund (Discussion)
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