LBill

10 Comments

    • Breaking Up with ETFs is Hard To Do [view article]
      What signals can be used to get back in after getting out below the 200-day or 8% down? How do you keep from getting whipsawed? Sep 07 08:17 PM
    • More Thoughts on Mohamed El-Erian's 'When Markets Collide' [view article]
      Geoff- Valuable piece. I especially take note of your reflections on market-cap weighted index funds (backward looking) as well as the fundamental-weighting alternatives. I've often wondered whether the Fama-French value and small effects on increasing portfolio returns is simply due to the dilution of market-cap weighting that this introduces. Sep 03 06:51 PM
    • Foreign ETFs: Is Now the Best Time for International Exposure? [view article]
      Gary- I've never really understood the concept of stop-loss. If int'l ETFs are down 25-30% now, why would I want to buy and put a stop-loss at another 10% loss? If they're a buy now, wouldn't they be an even better buy at 35-40% down? Why would I want to sell then rather than buy? If I'm stopped out then, when would I get back in? Aug 28 10:32 AM
    • Income Planning and Safe Withdrawal Rates [view article]
      whoops, I meant biennially (every 2 years)- I always get those mixed up. Aug 22 06:35 PM
    • Income Planning and Safe Withdrawal Rates [view article]
      This is another terrific article Geoff. It's important to consider portfolio risk and portfolio survival probability together. A high-risk port with an 80% survival target could result in lethal drawdowns over a 5-year period. IMO, it makes more sense to review and reset annually or at most bi-annually than it does to wait 5 years. Aug 22 06:33 PM
    • International Dividend Investments Can Diversify Portfolio [view article]
      Barnburner- there are several funds and ETFs that are based on the RAFI methodology. PRF offered by Powershares is and ETF for US large cap and there are international stock offerings as well. Schwab offers mutual funds based on the RAFI methodology that have lower expense ratios than the Powershares ETFs. Of late, the international RAFI funds are doing much better than the US funds. Lot of debate about the merits of fundamental weighting (which includes dividend weighting) vs. capitalization weighting. You'll want to research. Aug 18 12:19 PM
    • International Dividend Investments Can Diversify Portfolio [view article]
      Two things: First, everyone seems to ignore the fact that dividend funds have very different sector weightings than total market funds, typically overweighting financial, energy, and utilities. How much of the performance of such funds is attributable to sector weightings alone? Second, not all companies issue dividends so you are making bets on the subset of companies that do. Arnott's RAFI combines several fundamental measures in addition to dividends and does not exlude as many companies as do funds based on dividend weighting alone. Seems to me - if you believe in fundamental weighting at all - this is a more sophisticated approach. Aug 18 09:59 AM
    • A Simple Momentum System for Beating the Market [view article]
      There can be long periods when markets are not trending and price keeps crossing above and below the 10-month (or whatever) moving average one is using to buy or sell. For example, if I were using PCRIX as my commodity investment there were two buy-sell round trips in 2005 and four round trips in 2006 which ground out loss after loss. I wouldn't have been able to stay with it over that 2 year period - would you? Aug 07 09:00 PM
    • New Vanguard Global Fund Beats Competitors on Price [view article]
      Another option is to hold 40% in Vanguard Total U.S. and 60% in Total Int ex-U.S. funds. Gives you the same exposure as the World ETF for about .30% fee vs. .25% for the ETF. Some might prefer the convenience of the funds and avoiding brokerage fees for the ETFs Jul 01 10:06 AM
    • Is the Investment World Flat? [view article]
      Since diversifying between domestic and foreign stocks presently doesn't offer much diversification "bang for the buck," not much in total portfolio risk-adjusted return is likely to be lost for awhile by being under-diversified globally so it seems of minor importance at least for a time. Why not look for better ways to diversify until global equity market correlations actually do become smaller? If you had diversified into foreign stocks 10-15 years ago, when they were not as highly correlated with the U.S. market and were not performing as well, that would have paid off handsomely. Might be OK to do now if it helps you sleep better, but I wouldn't count on as big a payoff as waiting until global markets de-synchronize a bit. Apr 16 11:26 AM
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