Vanguard REIT Index VIPERs (VNQ)

All Comments on VNQ

  • commenter
    pantograph
    Jun 16 03:18 PM
    Asset Allocation as a Method for Risk Management [view article]
    Mr. Stathis inplies that market timing is an easy thing to do, but the vast majority of investors, including highly-compensated fund managers can't pull it off reliably or repeatedly. Market forecasts are notoriously inaccurate and emotions often get in the way, making nearly-passive approaches (with asset class rebalancing) more successful over the long haul. Reply
  • commenter
    Indexor
    Jun 10 06:50 PM
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    Mebane: Excellent article, as always. I always look for your posts as we share very similar phiosophies on managing assets.

    As Xyrus mentioned, that is my allocation strategy as well, including the specific ETFs, although I am weighted a bit diferently.

    Thank you.     Reply
  • commenter
    rudi
    Jun 10 05:51 PM
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    I completely agree with you, Foust. I admit, the sentence you quoted was not the best I wrote ;)
    Of course most asset classes does not mean the best allocation. To be more concrete, I like the high yield bonds in the harvard portfolio, and the higher percentage of inflation-linked bonds. Also, they have less stocks then El-Erian.
    All portfolios in my opinion underweight bonds drastically!

    Seafarer: The domestic stocks are in ACWI (international stocks). As far as I remember they hold 40% US stocks.
    To your question: I would add stocks, which are quite unrelated to S&P500 for example. This could be "defense", like LMT. Other ideas are holdings, e.g. BRK.B and shipping, e.g. OSG. Secondly, I would add carry trades to the portfolio. Check out DBV. Since DBV is too expensive, I would make the carry trades manually via forex trading. Thirdly, I would have a look at covered calls, like BEO. If you have some more ideas, please let me know, I am alway looking for some >6% return investments, which are a stand-alone asset class, to diversify with. Back to the question: I would then substract from ACWI mostly and from real estate.

    By the way, I am not just guessing these numbers, I retrieve them from statistical portfolio optimization. I can for sure tell you, that >30% stocks is way too much. 10-15% is healthy.

    best regards
    rudi     Reply
  • commenter
    Xyrus
    Jun 10 01:00 PM
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    This is kind of amusing. That's pretty much my allocation strategy...right down to the ETFs. :)

    ~X~     Reply
  • commenter
    Foust
    Jun 10 10:00 AM
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    "I conclude the harvard portfolio to be defenitely the best, since they are best diversivied, i.e. they have the most asset classes."

    There is a difference between being the most diversified (number of asset classes) and best diversified. Also, there must be some sort of distinction in the hedge fund space to fully appreciate the allocations, it is too generic and broad a category. Same with private equity (venture, buyout, etc.) and where do timber and other private real asset classes fall?     Reply
  • commenter
    Tom B
    Jun 10 09:05 AM
    World and US Real Estate ETFs [view article]
    "Real estate will not bottom before some time after I am dead, may be 2020"

    Best of luck. Do take care of yourself!     Reply
  • commenter
    Seaferer20
    Jun 10 08:26 AM
    My Website
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    Rudi posted his comment as I was writing mine. It's interesting to note that there doesn't appear to be any domestic stocks in Rudi's although he closes with the caveat that "there are even more asset classes, that should be added to the portfolio". But then what and how much would be subtracted from the above?

    Reply
  • commenter
    Seaferer20
    Jun 10 08:21 AM
    My Website
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    I agree with Desi - correlating ETFs with Mr. El Erian's asset allocation model translates his institutional thesis into individual investor tools. Reply
  • commenter
    rudi
    Jun 10 08:19 AM
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    I'd find it interesting to know, how these portfolios are being created. As I am involved into asset allocation a lot, I wonder why there is so little allocation into bonds. I think the difficulty is, what expected returns to assume, when optimizing the portfolio by the best sharpe ratio (or some other ratio). As you can see, all portfolios assume >10% commodities to be appropriate. I find results like that, when I imply the empirical returns of commodities for the last years. Minding the efficient market hypothesis, there is no reason to assume more than the inflation rate plus some increased demand due to worlds economic growth, as an expected return. This would be 3-4% in my opinion. This leads me to a portfolio with maximum 5% commodities.

    I conclude the harvard portfolio to be defenitely the best, since they are best diversivied, i.e. they have the most asset classes. High yield bonds and inflation-linked bonds should be included in every good portfolio.
    In spite of that, the harvard portfolio could be easily outperformed (risk adjusted) by a portfolio like that:

    -International Stocks (weighted by marketcap) 20% (ACWI)
    -International inflation-linked-bonds 30% (TIP)
    -High yield bonds 3% (HYG)
    -Bonds with short avg. maturity 18% (SHY)
    -International Bonds 12% (BWX)
    -Commodities 5% (DBC)
    -Real Estate 7% (VNQ)
    -Private Equity 5% (PPE?)

    Keep in mind, that private equity is correlated with stocks. So there is a lot of emphasis on stocks market in all mentioned portfolios.

    The idea of having hedge funds is in my opinion misleading as well, since they are either doing some similar allocation, or they apply some strategy, which includes short selling (not sticking to efficient market hypothesis), what means, you are long and short in the same assets at the same time, just wasting fees.

    By the way, there are even more asset classes, that should be added to the portfolio, but I wanted to show a portfolio, which doesnt't include more than the harvard one and is already more developed.

    best regards
    rudi     Reply
  • commenter
    desi
    Jun 10 07:10 AM
    El-Erian's Recommended Allocation vs. Harvard, Yale [view article]
    Mr Mebane Faber...

    Thanks for linking the portfolio allocation to ETF's . This helps an individual investor to easily create his own portfolio. In an Interview with Barron's two weeks back, Mr EL Erian had recommended a similar allocation. Thanks again     Reply
  • commenter
    reitster
    Jun 10 01:25 AM
    World and US Real Estate ETFs [view article]
    Your time period for comparative analysis it way too short. Global funds outperform domestic only with less risk over a ten-year period ending 12/31/07. Who invests for only three or 12 months? Reply
  • commenter
    jjason
    Jun 09 01:57 PM
    World and US Real Estate ETFs [view article]
    The yields you posted are too low and I wonder why? Also, these ETF's seem to be down quite a bit in the past year. Reply
  • commenter
    Whidbey
    Jun 08 10:04 PM
    World and US Real Estate ETFs [view article]
    This is a great review. Real estate will not bottom before some time after I am dead, may be 2020, but it will be a "buy" well before that time. I suspect in say 2015 or maybe sooner. It is real and it has value to mankind. So expect to see it rise again and rise smartly. I am sure it will be a valuable part of the assets of this next century. But it will be different in design and methods of ownership. Be aware it will not be what you father owned. Reply
  • commenter
    joof
    Jun 06 05:22 PM
    Homeowner Equity at Post WWII Low [view article]
    If you dig into the numbers ( at least the prior issuances of this data) you find that the % of owners with fully paid off mortgage or good LTV ratios hasn't changed that much. However the portion of people with high LTV (little to no equity; the new buyers of the past several years ) are much more levered. Hence, combined with value reducitons the average equity decline

    we end up with two classes- the housed and comfortable, and the broke     Reply
  • commenter
    nickgogerty
    Jun 06 09:35 AM
    My Website
    Portfolio Theory: The Unnatural Alternative? [view article]
    portfolio theory is trend following in drag and assumes "knowledge" in the Soros sense that isn't there. Reply
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