Search found 8270 matches

by alex_686
Fri May 14, 2021 7:36 pm
Forum: Investing - Theory, News & General
Topic: Yield or P/E ratio for thinking about expected stock returns
Replies: 33
Views: 2039

Re: Yield or P/E ratio for thinking about expected stock returns

However, it appears that the value of published E / P ratios are more like the sum of the earnings of companies making positive earnings divided by the sum of the market capitalizations of the companies making positive earnings. Perhaps the latter statistic is useful for some purpose (I don’t immed...
by alex_686
Fri May 14, 2021 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: use net present worth for mother's future retirement home costs?
Replies: 2
Views: 197

Re: use net present worth for mother's future retirement home costs?

I am confused by your question. I think this is what you want to do. I think you are trying to estimate how large a portfolio you are going to need to meet this goal. I am assuming that you mother is 82 years now and entering assisted living now. Current price is $100,000 per year. Prices are expect...
by alex_686
Fri May 14, 2021 11:40 am
Forum: Investing - Theory, News & General
Topic: Trading Securities and Blockchain
Replies: 8
Views: 372

Re: Trading Securities and Blockchain

I would expect that a move to settlement on blockchain will come with markets being open 24/7 instead of to the weirdly limited weekday only hours they're open today. It's not necessarily going to happen but I wouldn't bet against it happening. I hope they open 24/7 (or 24/5 at least). I dislike th...
by alex_686
Fri May 14, 2021 11:05 am
Forum: Investing - Theory, News & General
Topic: Trading Securities and Blockchain
Replies: 8
Views: 372

Re: Trading Securities and Blockchain

txhill wrote: Fri May 14, 2021 10:50 am Get ready to post to the "Stocks Are Soaring" and "Stocks Are in Freefall" threads 24/7 :)
Why? How would a change in trading platforms and settlement mechanisms have anything to do with asset prices? I mean, I can see some minor changes, but nothing major.
by alex_686
Fri May 14, 2021 10:41 am
Forum: Investing - Theory, News & General
Topic: Trading Securities and Blockchain
Replies: 8
Views: 372

Trading Securities and Blockchain

So here is some news on this front: https://www.americanbanker.com/news/figure-wins-sec-approval-to-sell-securities-on-its-blockchain Basically, Figure Securities and Provenance have gotten SEC approval to trade and settle securities using a blockchain. This is a pretty small step, but I think a imp...
by alex_686
Fri May 14, 2021 7:12 am
Forum: Personal Investments
Topic: Taxed on initial investment in brokerage?
Replies: 5
Views: 444

Re: Taxed on initial investment in brokerage?

Yes. Time only determines short or long term gains.
by alex_686
Thu May 13, 2021 5:01 pm
Forum: Investing - Theory, News & General
Topic: Is inflation bad...
Replies: 86
Views: 6440

Re: Is inflation bad...

...Over the long term, equities are certainly the best inflation protection we have, such that many financial advisers would say equities are essential to beating inflation over the long term... Those financial advisers would be pretending that TIPS do not exist. TIPS promise to keep up with inflat...
by alex_686
Thu May 13, 2021 2:50 pm
Forum: Investing - Theory, News & General
Topic: Is inflation bad...
Replies: 86
Views: 6440

Re: Is inflation bad...

However, there are many excellent studies out there which shows that equities are a decent hedge against inflation. Over 100 years of history, 20 currencies, across multiple sectors. Really solid theoretical and historical stuff to back this up. Just have to figure how to live for another century t...
by alex_686
Thu May 13, 2021 11:16 am
Forum: Investing - Theory, News & General
Topic: Is inflation bad...
Replies: 86
Views: 6440

Re: Is inflation bad...

Inflation increases the price if things. Assets are a thing. Since equities are a claim on real economic productive assets, equities have been a excellent hedge against inflation. In The Intelligent Investor , 4th ed., 1973, (p. 20) On this point we can be categorical. There is no close time connec...
by alex_686
Thu May 13, 2021 11:09 am
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 236
Views: 19300

Re: Whence inflation?

How could M3 have declined when M2 has more than doubled over the last 10 years, and why? So, I misread the post and thought you were talking only about the last 12 months. Sorry about that. However, there is a very large disconnect between M2 and the broad money supply, M3. During the last 2 finan...
by alex_686
Thu May 13, 2021 7:59 am
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 236
Views: 19300

Re: Whence inflation?

The annual inflation rate for the U.S. is now 4.2%. In the context of the OP, which looked at both the money supply and the velocity of money over the prior decade, I believe that it's worthwhile to look at how both of these variables have changed since 2020. The M2 money supply increased from $15....
by alex_686
Thu May 13, 2021 7:45 am
Forum: Investing - Theory, News & General
Topic: Is inflation bad...
Replies: 86
Views: 6440

Re: Is inflation bad...

Inflation increases the price if things. Assets are a thing. Since equities are a claim on real economic productive assets, equities have been a excellent hedge against inflation. You do want to step back and think why we are having inflation. The OPEC oil embargo caused both inflation and a economi...
by alex_686
Wed May 12, 2021 6:16 pm
Forum: Investing - Theory, News & General
Topic: How to know mutual fund shares bought / sold each day?
Replies: 1
Views: 284

Re: How to know mutual fund shares bought / sold each day?

Mutual funds have to post that info daily. I used to pull up that value on my premium data feed, back when I worked in mutual funds. Unsure how to find that data out in the wild.
by alex_686
Sat May 08, 2021 2:49 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

alex_686 is speaking very loosely, which is leading to some inaccuracy in what he is saying. None of these Vanguard mutual funds are corporations. I am not exactly an expert in this very niche area ... I was speaking very specifically. I worked in mutual fund accounting for 10 years. See my signatu...
by alex_686
Sat May 08, 2021 12:51 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

When you say "a fund is a corporation", I am just curious how that applies in this case. What entity is the corporation you are referring to here? The "Vanguard Total International Stock Index Fund", or the "Vanguard Star Funds Trust" which has 6 mutual funds (one of w...
by alex_686
Fri May 07, 2021 9:22 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

Funds can't cross subsidize each other. They are 2 separate corporations Out of curiosity, are funds that are part of the same trust still considered separate? E.g. Vanguard Total Stock Market Fund and Vanguard 500 Index Fund are both part of the "Vanguard Index Funds Trust", for example....
by alex_686
Fri May 07, 2021 6:21 pm
Forum: Investing - Theory, News & General
Topic: Taking risk on equity side.
Replies: 60
Views: 4843

Re: Taking risk on equity side.

Overall bonds tend to be uncorrelated with stocks. As stated above, the correlations of higher risk bonds to equities tends to be higher. Very significant though is when correlations change. When equities tank, the correlation of high quality bonds to stocks tends to turn strongly negative, just wh...
by alex_686
Fri May 07, 2021 4:17 pm
Forum: Investing - Theory, News & General
Topic: Taking risk on equity side.
Replies: 60
Views: 4843

Re: Taking risk on equity side.

"Everything should be made as simple as possible. But not simpler" - Albert Einstein I think this is a case where Bogleheads have gone a step too far. Understanding how a low-return low-risk asset can enhance a portfolio's return is complex and nuanced, involving a fair amount of math and ...
by alex_686
Fri May 07, 2021 4:07 pm
Forum: Personal Finance (Not Investing)
Topic: What interest rate on loan would you sell shares of VTI to avoid?
Replies: 8
Views: 793

Re: What interest rate on loan would you sell shares of VTI to avoid?

But mathematically, besides the risk , if you can assume 7% growth of VTI over 5 years, it seems to make complete sense not to sell, and not reducing taxable contributions to save to pay for the loan in cash? I think you have nailed on the head. The big thing to do is think about the risk. So, 2 qu...
by alex_686
Fri May 07, 2021 3:54 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

... let's assume that the excess commissions are paying for goods and services of commensurate value. The point is that by packaging these expenses with broker commissions, they are excluded from being accounted for in ER. ... There is no need to make it complicated. To restate, my argument is that...
by alex_686
Fri May 07, 2021 2:49 pm
Forum: Personal Investments
Topic: Dividends on foreign funds, estimating current year
Replies: 8
Views: 699

Re: Dividends on foreign funds, estimating current year

Are you talking about specific stock, country, or index? It is much harder to forecast international dividends because different countries have different rules. Some requires a certain percentage to be paid out. Others forbid paying out anything if earnings are negative. etc. Also, beyond taxes why ...
by alex_686
Fri May 07, 2021 2:29 pm
Forum: Investing - Theory, News & General
Topic: Confused about dividend investing, market downturns and early retirement
Replies: 88
Views: 5752

Re: Confused about dividend investing, market downturns and early retirement

You say that like it is a bad thing. Isn't much of the Boglehead philosophy just mental trickery? Mostly no. It is based off passive investing. Deep field, lots of papers out there with lots of math. Why hold bonds? To prevent panic selling in a downturn. Why have an asset allocation less than 100%...
by alex_686
Fri May 07, 2021 1:47 pm
Forum: Investing - Theory, News & General
Topic: How does bitcoin solve the deflation problem?
Replies: 80
Views: 5754

Re: How does bitcoin solve the deflation problem?

You are onto something, because inflation/deflation depends on the amount of money "normally available to execute transactions" (which in literature you will find as money supply times velocity of money). However, even if BTC holders were not hoarding at all, the BTC finite amount would e...
by alex_686
Fri May 07, 2021 11:34 am
Forum: Personal Finance (Not Investing)
Topic: What interest rate on loan would you sell shares of VTI to avoid?
Replies: 8
Views: 793

Re: What interest rate on loan would you sell shares of VTI to avoid?

Lots of factors, but probably around 4% to 5%. Car and home equity loans tend to have low interest rates. You should take out the loans if your market expectations of VTI is higher than VTI. This is leverage. You are leveraging up your portfolio. You are increasing your risk profile. I tend to be ri...
by alex_686
Fri May 07, 2021 10:14 am
Forum: Personal Investments
Topic: Buying Before Ex-Dividend Date
Replies: 14
Views: 874

Re: Buying Before Ex-Dividend Date

Will my nephew be the owner of record even if the stock has not hit his account yet? Is it possible that no one will be the owner of record? Can we expect that one of us will be the owner of record and that the dividend won't just disappear? Your nephew should get the dividend. Somebody has to get ...
by alex_686
Fri May 07, 2021 10:10 am
Forum: Personal Investments
Topic: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?
Replies: 48
Views: 4972

Re: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?

I don't really think that's a fair assessment. All investing involves risk. ... You asserted that the people who are 100% equities tend to be overconfident on average, and I can maybe believe that on average as it's intuitive that overconfident investors would pile into stocks, but I don't think th...
by alex_686
Fri May 07, 2021 9:58 am
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

First, let me say that I know where you are coming from. I had a similar opinion prior to having to dig deep in the subject. Let us step back and focus on SEC reporting. They like objective values that can be independently verified. They like to audit things. They want everybody to use the same meth...
by alex_686
Thu May 06, 2021 8:44 pm
Forum: Personal Investments
Topic: Buying Before Ex-Dividend Date
Replies: 14
Views: 874

Re: Buying Before Ex-Dividend Date

Buy the day before the Ex-date to collect the dividend. Would think the sale has to take place by the closing bell. Not sure if an after hours buy would count. You can also sell on the Ex-date and collect the dividend. I have had stock called away under covered call options. If the option is expiri...
by alex_686
Thu May 06, 2021 8:34 pm
Forum: Personal Investments
Topic: Total Bond Fund---How is the price calculated?
Replies: 6
Views: 614

Re: Total Bond Fund---How is the price calculated?

A mutual fund’s NAV is a accountant’s estimate of the portfolio value. I have struck the NAV of mutual funds.

ETFs price is the market price. Buyers and sellers in the open market.

Both are of high quality. There are nuances between the 2 methods. I think the ETF price is a higher quality price.
by alex_686
Thu May 06, 2021 8:10 pm
Forum: Personal Investments
Topic: Buying Before Ex-Dividend Date
Replies: 14
Views: 874

Re: Buying Before Ex-Dividend Date

There are many long involved threads on this forum about dividends. In the short run they don’t matter when calculating “total returns”. The stock will drop by the dividend amount. It dies not matter if you buy before or after. If it did there would be a riskless free way to make money. There is not...
by alex_686
Thu May 06, 2021 6:28 pm
Forum: Personal Investments
Topic: Margin Accounts and Regulation T (Interactive Brokers)
Replies: 14
Views: 923

Re: Margin Accounts and Regulation T (Interactive Brokers)

It seems quite easy to me had this been invented in the computer age. ... I am generally in favor of margin being calculated at the portfolio level with risk. There is a flaw in your design. You have a different margin requirements for transactions and maintenance. I could drive a truck through tha...
by alex_686
Thu May 06, 2021 5:46 pm
Forum: Personal Investments
Topic: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?
Replies: 48
Views: 4972

Re: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?

So the 100/0 investor will panic sell during a crash while the 85/15 investor sleeps well at night? Hypothetical $1,000,000 portfolios, 50% stock crash - 100/0 portfolio drops to $500,000 - 85/15 portfolio drops to $575,000 (you can't assume bonds will go up when stocks go down, they didn't last Ma...
by alex_686
Thu May 06, 2021 3:51 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

A true Boglehead doesn't have that many holdings, so you have a small number of prospectuses to read. Oh contraire. Consider a Boglehead who choses to invest in a S&P 500 fund. There are at least a half dozen high quality S&P 500 funds out there. So to pick one you should read all of them t...
by alex_686
Thu May 06, 2021 3:47 pm
Forum: Personal Investments
Topic: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?
Replies: 48
Views: 4972

Re: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?

My personal opinion is that one should not exceed 85% in equities. Not to hijack the thread, but I'm curious, could you elaborate on why that is your opinion? As someone who does not hold bonds and has read that opinion numerous times on here, I don't remember ever actually seeing any explanations ...
by alex_686
Thu May 06, 2021 3:26 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

I am not suggesting it is being abused other than for false advertising. Soft dollar arrangements with brokers violate transparency and should be illegal. Mutual funds should be required to publish 12 month trailing expenses every month for all expenses, including transaction costs with soft dollar...
by alex_686
Thu May 06, 2021 2:47 pm
Forum: Personal Investments
Topic: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?
Replies: 48
Views: 4972

Re: Is it acceptable for 30 year old with $2 million to have 100% all in diversified total world stock index funds?

"30 year old with $2 million" is a red herring and contains no useful information. Younger people tend to have a longer time span and more flexibility than a older person. Younger people tend to still be actively employed, have high human capital, and thus have the capacity to increase the...
by alex_686
Thu May 06, 2021 2:19 pm
Forum: Investing - Theory, News & General
Topic: [Question About Fund Tickers]
Replies: 7
Views: 437

Re: Dum Question

dbr wrote: Thu May 06, 2021 2:17 pm I'm not sure why they all end in X. I know rail car owner indices end in X when the owner is not a railroad and not if they are, except CSX maybe.
The convention for publicly traded mutual funds is a 5 letter ticker. I don't know why, but it has been this way for a long long time.
by alex_686
Thu May 06, 2021 1:41 pm
Forum: Investing - Theory, News & General
Topic: [Question About Fund Tickers]
Replies: 7
Views: 437

Re: Dum Question

The fund or ETF provider can choose the name. It must be unique, they can’t choose a name of any other stock or fund (i.e. you can’t name your ETF XOM - Exxon Mobil Corp.) To extend a bit, it has to be unique to a exchange. The exchanges are the ones who actually pick the symbol and set the rules. ...
by alex_686
Thu May 06, 2021 1:35 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 236
Views: 19300

Re: Whence inflation?

In economics, nominal value is measured in terms of money, whereas real value is measured against goods or services. A real value is one which has been adjusted for inflation, enabling comparison of quantities as if the prices of goods had not changed on average. Changes in value in real terms ther...
by alex_686
Thu May 06, 2021 1:05 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

It probably isn't cross-fund subsidy because the fund is not making expenditures with transactions above and beyond normal transaction cost that in aggregate exceed the actual cost of running the "zero" fund. This has nothing to do with it. Cross subsidization is prohibited by SEC regulat...
by alex_686
Thu May 06, 2021 12:54 pm
Forum: Investing - Theory, News & General
Topic: How does bitcoin solve the deflation problem?
Replies: 80
Views: 5754

Re: How does bitcoin solve the deflation problem?

Deflation is a huge problem for cryptocurrencies because people hoard them. Not really. The reason is that their amount is fixed by design. As they say: "It is not a bug, it is a feature." Yes, it is fixed by design. I understand why that choice was made, but in my opinion it was the wron...
by alex_686
Thu May 06, 2021 9:03 am
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

Funds can't cross subsidize each other. They are 2 separate corporations whose primary duty is to their shareholders. i.e., their investors. They all have to pay their own way. That is generally the case, but not fully true. There are examples of funds that not only can use soft dollar arrangements...
by alex_686
Wed May 05, 2021 5:42 pm
Forum: Investing - Theory, News & General
Topic: Why does raising CG taxes decrease government revenue?
Replies: 22
Views: 1480

Re: Why does raising CG taxes decrease government revenue?

This is a debatable topic and adjacent to politics. I will try to avoid the 3rd rail. Economic theory is not a hard science. The data on this tends to be thin, nuanced, and contradicts itself. 2 broad reasons are given. The first is the Laffer Curve. As taxes rise the reward - the after tax total re...
by alex_686
Wed May 05, 2021 5:26 pm
Forum: Personal Investments
Topic: What is the average historic P/E for US REIT Index?
Replies: 9
Views: 864

Re: What is the average historic P/E for US REIT Index?

Short answer, the mean for P/E is time varying. I don't see how you conclude that P/E ratios don't regress to the mean over long periods of time. Math. Hurst Jump Diffusion is the most common technique. The wiki page that you quote above shows Shiller's graph of historic CAPE regressing to the mean ...
by alex_686
Wed May 05, 2021 4:18 pm
Forum: Investing - Theory, News & General
Topic: How does bitcoin solve the deflation problem?
Replies: 80
Views: 5754

Re: How does bitcoin solve the deflation problem?

I think lot of people start with the wrong foot. BTC is not a currency. It's essentially a commodity, but digitalized. Bitcoin may be a currency. That is you can use to facilitate the exchange of goods. It is not money. Money can be used for the exchange of goods (yes), store of value (no), and uni...
by alex_686
Wed May 05, 2021 3:28 pm
Forum: Investing - Theory, News & General
Topic: How does bitcoin solve the deflation problem?
Replies: 80
Views: 5754

Re: How does bitcoin solve the deflation problem?

I think lot of people start with the wrong foot. BTC is not a currency. It's essentially a commodity, but digitalized. Bitcoin may be a currency. That is you can use to facilitate the exchange of goods. It is not money. Money can be used for the exchange of goods (yes), store of value (no), and uni...
by alex_686
Wed May 05, 2021 2:05 pm
Forum: Personal Finance (Not Investing)
Topic: HELOC providers
Replies: 14
Views: 832

Re: HELOC providers

As was mentioned, what your looking for is technically a 3rd mortgage. I'm not sure any reputable lender will do this. I ran into exactly what you're running into several years ago when I wanted to increase my HELOC limit. Credit Union wouldn't increase it - I had to go through the whole applicatio...
by alex_686
Wed May 05, 2021 12:20 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

A question to those who strongly suggest that you read the prospectus before buying a fund: Do you read the new prospectus every year? If you need to read the prospectus before buying the fund, this means that the prospectus contains valuable information. The prospectus gets updated every year. This...
by alex_686
Wed May 05, 2021 12:05 pm
Forum: Investing - Theory, News & General
Topic: Do I have to read the prospectus before buying an index fund?
Replies: 101
Views: 7896

Re: Do I have to read the prospectus before buying an index fund?

What I love about the interfund lending program is this condition: 1) ... no fund may borrow or lend money through the program unless it receives a more favorable interest rate than is typically available from a bank for a comparable transaction... If Vanguard fund A lends to Vanguard fund B, both ...
by alex_686
Wed May 05, 2021 9:52 am
Forum: Personal Finance (Not Investing)
Topic: HELOC providers
Replies: 14
Views: 832

Re: HELOC providers

I am working off of my general knowledge. NY may have a different set of laws. 1st mortgages and 2nd mortgages are titled differently. A 1st mortgage has more rights. A HELOC is a titled as a 2nd mortgage, even if there is not a first mortgage. Cheaper that way. So you are asking the new mortgage co...