Vanguard predicts value outperforms grrowth

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marky2kk
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Re: Vanguard predicts value outperforms grrowth

Post by marky2kk »

Silverado wrote: Wed May 05, 2021 9:39 am
Tom_T wrote: Wed May 05, 2021 9:36 am I don't think anyone has any expertise in accurately predicting the future. That includes Vanguard.
That is not strong enough....

I know no one has proven they have expertise in predicting the future of markets.
And yet, you sit here with most of your assets invested in equities, implicitly hoping that equities will outperform bonds, cash, gold, and so on over the next years/decades :wink:

Presumably, also invested in index funds as opposed to active funds, implicitly predicting that passive funds will continue to outperform active funds. Which is of course fine. Just saying. We all try to time certain markets and make active decisions, even when we claim to be "passive."
asif408
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Re: Vanguard predicts value outperforms grrowth

Post by asif408 »

marky2kk wrote: Thu May 06, 2021 9:30 am
Silverado wrote: Wed May 05, 2021 9:39 am
Tom_T wrote: Wed May 05, 2021 9:36 am I don't think anyone has any expertise in accurately predicting the future. That includes Vanguard.
That is not strong enough....

I know no one has proven they have expertise in predicting the future of markets.
And yet, you sit here with most of your assets invested in equities, implicitly hoping that equities will outperform bonds, cash, gold, and so on over the next years/decades :wink:

Presumably, also invested in index funds as opposed to active funds, implicitly predicting that passive funds will continue to outperform active funds. Which is of course fine. Just saying. We all try to time certain markets and make active decisions, even when we claim to be "passive."
Please, mary, keep facts out of this discussion, pithy 1 liners are preferable. Also don't mention that Silverado is 80% in stocks, with only 15% of those equities in international. He obviously implicitly believes US will outperform int'l, otherwise why would he deviate from market cap weight in global equities? He must know something and he's not telling us.
Silverado
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Re: Vanguard predicts value outperforms grrowth

Post by Silverado »

asif408 wrote: Thu May 06, 2021 9:46 am
marky2kk wrote: Thu May 06, 2021 9:30 am
Silverado wrote: Wed May 05, 2021 9:39 am
Tom_T wrote: Wed May 05, 2021 9:36 am I don't think anyone has any expertise in accurately predicting the future. That includes Vanguard.
That is not strong enough....

I know no one has proven they have expertise in predicting the future of markets.
And yet, you sit here with most of your assets invested in equities, implicitly hoping that equities will outperform bonds, cash, gold, and so on over the next years/decades :wink:

Presumably, also invested in index funds as opposed to active funds, implicitly predicting that passive funds will continue to outperform active funds. Which is of course fine. Just saying. We all try to time certain markets and make active decisions, even when we claim to be "passive."
Please, mary, keep facts out of this discussion, pithy 1 liners are preferable. Also don't mention that Silverado is 80% in stocks, with only 15% of those equities in international. He obviously implicitly believes US will outperform int'l, otherwise why would he deviate from market cap weight in global equities? He must know something and he's not telling us.
Strange, very strange. I can’t see the path that stating strongly that no one has proven they can predict the future means I claim to be able to predict the future. :confused Oh well, take shots at me if it makes you feel better.

If you have some examples of someone successfully proving they are correctly predicting the future, I’m all eyes. But be very aware of tense. Of course you can find examples of something someone said in the past that ended up being true, but that is not what I am saying the burden is. You don’t need to roll a ball down a ramp to prove your calculations of angular momentum are correct.
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Anon9001
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Re: Vanguard predicts value outperforms grrowth

Post by Anon9001 »

Pretty confusing how harsh this forum views Value factor in comparison to Market factor. Out-of-sample HML is more economically and statistically significant than MKT factor in Europe, Japan and Asia Pacific and is as economically significant as MKT factor in Global but more statistically significant. Only in North America HML is weaker economically and statistically in comparison to MKT factor out-of-sample.
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DB2
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Re: Vanguard predicts value outperforms grrowth

Post by DB2 »

I would only bet on this via Wellington or Global Wellington as only a portion of a portfolio. But that's just me.
Nathan Drake
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Re: Vanguard predicts value outperforms grrowth

Post by Nathan Drake »

JoMoney wrote: Thu May 06, 2021 5:56 am There are lots of guesses out there. Vanguard has been making predictions about ex-US out-performance for quite some time. Keep making guesses, bound to get something right sooner or later.

Might be worth noting that both value and growth could have miserable/negative performance, with 'value' simply losing less and achieve that out-performance.
Also worth noting that over the past decade the S&P 500 Growth bested the S&P 500 Value by a bit over 4% annualized, I don't see why it would be unthinkable to imagine at some point it might go the other way... and the methodology they're discussing is a "Pure Value" portfolio more concentrated then most "Value/Growth indexes".
A few years isn’t “quite some time” when their forecasts are for the next decade
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Carol88888
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Re: Vanguard predicts value outperforms grrowth

Post by Carol88888 »

Taylor Larimore wrote: Wed May 05, 2021 3:21 pm Bogleheads:

Vanguard once had a market-timing fund called Asset-Allocation Fund based on stock forecasts. It was also included in their Life Cycle funds.

The results were so terrible that the fund was discontinued.

I believe it is impossible to forecast future stock and bond returns, and that it is best to ignore anyone's stock (and bond) forecasts. I recommend buying the U.S. total stock market and U.S. total bond market -- with a dash of international stocks for insurance -- then stay-the-course.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The Vanguard Total Stock Market Index fund and its Total Bond Market cousin represent the purest form of common-sense investing."
What you wrote just reminded on something I recently read in "The Psychology of Money" by Housel. He said that a number of funds that were designed to use quantitative signals to move in and out of the market and adjust allocations ALL failed to beat a buy and hold proxy.
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nedsaid
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Re: Vanguard predicts value outperforms grrowth

Post by nedsaid »

Carol88888 wrote: Wed May 05, 2021 9:28 am I saw Vanguard's release on the expected outperformance of value over growth for the next decade.
https://investornews.vanguard/why-u-s-v ... rm-growth/

I am wondering what others think of this. The expected outperformance is 5-7% annualized a decade which seems enormous to me.

Do you think this is actionable advice?

Do you think Vanguard has any expertise in making these calls?
Too bad this wasn't posted a year ago. Now that Value, and particularly Small Value has been outperforming since, people are becoming interested. Not the best of ideas to jump on an investment after it has already done well.

That being said, if I am right, this Value trend could continue for quite a while. The prior Growth trend had persisted for about 12 years. If someone wanted to hop aboard with a Small Value tilt, there is probably still lots of time to benefit from the trend.

If you didn't have the conviction to have had a Value tilt when things didn't look so good, my advice would be not to start now. Going back and forth between investment strategies is the surefire way to depress investment results. These are long term strategies.
A fool and his money are good for business.
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