Author Topic: VTSAX 13%+ gain YTD  (Read 13939 times)

BTDretire

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VTSAX 13%+ gain YTD
« on: December 28, 2016, 08:47:35 AM »
Just checked VTSAX for it's gain this year.
It's up about 12% plus another 1.82% of dividends.
 If you had your $1M in VTSAX and spent $40,000,
your portfolio still has and extra $90,000.
 May the good times continue.

OurTown

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Re: VTSAX 13%+ gain YTD
« Reply #1 on: December 28, 2016, 09:00:46 AM »
May the odds be ever in your favor.

dougules

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Re: VTSAX 13%+ gain YTD
« Reply #2 on: December 28, 2016, 09:50:09 AM »
If you're past FIRE, it's great.  If you're a few years out like me, it isn't a good thing. 

sol

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Re: VTSAX 13%+ gain YTD
« Reply #3 on: December 28, 2016, 10:22:42 AM »
If you're past FIRE, it's great.  If you're a few years out like me, it isn't a good thing.

I was kind of hoping we would see a correction this year, so I wouldn't be tempted to punch out early.

Of course, I've been hoping that since the 2013 spike, so I probably shouldn't complain.

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #4 on: December 28, 2016, 10:31:19 AM »
yeah i really want to see a good dip for 2 reasons:

1. i'm still buying so all that money can get in at a better price

2. i started full time work in 2010 i havent lived thru a large drawback just want to see what it does to me emotionally.
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Re: VTSAX 13%+ gain YTD
« Reply #5 on: December 28, 2016, 12:57:36 PM »
yeah i really want to see a good dip for 2 reasons:

1. i'm still buying so all that money can get in at a better price

2. i started full time work in 2010 i havent lived thru a large drawback just want to see what it does to me emotionally.

I definitely agree with number 2. I need to see a drop before I fire just so that I know I can handle loosing $200k and stay the course. If I can't, I'd like to know that before I fire.
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2Birds1Stone

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Re: VTSAX 13%+ gain YTD
« Reply #6 on: December 28, 2016, 01:11:27 PM »
If you're past FIRE, it's great.  If you're a few years out like me, it isn't a good thing.

I was kind of hoping we would see a correction this year, so I wouldn't be tempted to punch out early.

Of course, I've been hoping that since the 2013 spike, so I probably shouldn't complain.

 We did have a correction earlier this year.
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boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #7 on: December 28, 2016, 01:15:06 PM »
If you're past FIRE, it's great.  If you're a few years out like me, it isn't a good thing.

I was kind of hoping we would see a correction this year, so I wouldn't be tempted to punch out early.

Of course, I've been hoping that since the 2013 spike, so I probably shouldn't complain.

 We did have a correction earlier this year.

i guess you could say that. it wasnt much of one. but i did pull out alot of money in december b/c of buying a house not knowing if ours would sell and then dump it all back in ... in late feb/early march so it worked out well for me.
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2Birds1Stone

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Re: VTSAX 13%+ gain YTD
« Reply #8 on: December 28, 2016, 01:23:20 PM »


i guess you could say that. it wasnt much of one. but i did pull out alot of money in december b/c of buying a house not knowing if ours would sell and then dump it all back in ... in late feb/early march so it worked out well for me.

Yea, from December 29th - Feb 11th we had a 15% drop, then a subsequent 25% increase since those lows.

Not too shabby.
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MilesTeg

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Re: VTSAX 13%+ gain YTD
« Reply #9 on: December 28, 2016, 01:24:33 PM »
Just checked VTSAX for it's gain this year.
It's up about 12% plus another 1.82% of dividends.
 If you had your $1M in VTSAX and spent $40,000,
your portfolio still has and extra $90,000.
 May the good times continue.

Don't forget the most important rule of investing: Gains are meaningless on securities that are held.

Easy come, easy go.

This applies to losses as well, but too many people look at a good period like YTD and think "look at all that money I have made!" but unless you sell NOW, you've 'made' nothing.

mathlete

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Re: VTSAX 13%+ gain YTD
« Reply #10 on: December 28, 2016, 01:25:15 PM »
We did have a correction earlier this year.

I think a correction is usually defined as a 10% pullback in value. A quick glance at the charts says that we saw around 9% in the S&P500 within the calendar year which is within spitting distance I suppose.

The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

I'm still long on "the future" in general, but I'd be lying if I said I wasn't at all concerned about US stocks.

2Birds1Stone

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Re: VTSAX 13%+ gain YTD
« Reply #11 on: December 28, 2016, 01:28:11 PM »
We did have a correction earlier this year.

I think a correction is usually defined as a 10% pullback in value. A quick glance at the charts says that we saw around 9% in the S&P500 this year which is within spitting distance I suppose.

The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

I'm still long on "the future" in general, but I'd be lying if I said I wasn't at all concerned about US stocks.

VTI went from $106.12 to $92.56 between December 29th and February 11th....or a 12.77% drop

Those are closing prices, if we use intraday the drop was closer to 15% at one point.
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mathlete

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Re: VTSAX 13%+ gain YTD
« Reply #12 on: December 28, 2016, 01:30:37 PM »
VTI went from $106.12 to $92.56 between December 29th and February 11th....or a 12.77% drop

Those are closing prices, if we use intraday the drop was closer to 15% at one point.

Yeah I was looking at the S&P and only within the calendar year. I'm confident your VTI numbers are accurate so I'll concede there.

I still got a yellow caution light on the market. Earnings growth simply doesn't justify the prices we're seeing.

2Birds1Stone

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Re: VTSAX 13%+ gain YTD
« Reply #13 on: December 28, 2016, 01:32:58 PM »
VTI went from $106.12 to $92.56 between December 29th and February 11th....or a 12.77% drop

Those are closing prices, if we use intraday the drop was closer to 15% at one point.

Yeah I was looking at the S&P and only within the calendar year. I'm confident your VTI numbers are accurate so I'll concede there.

I still got a yellow caution light on the market. Earnings growth simply doesn't justify the prices we're seeing.

Agreed, I think the market is moving based on sentiment and hopes for relaxed corporate tax policies.

While I am regularly contributing to 401k/HSA/Roth IRA I am holding $25k in dry powder from a rollover IRA to see what happens by end of Q1 next year.

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mathlete

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Re: VTSAX 13%+ gain YTD
« Reply #14 on: December 28, 2016, 01:35:17 PM »
Agreed, I think the market is moving based on sentiment and hopes for relaxed corporate tax policies.

While I am regularly contributing to 401k/HSA/Roth IRA I am holding $25k in dry powder from a rollover IRA to see what happens by end of Q1 next year.

Oh yeah, I'm still maxing out my tax deferred or tax advantaged equities accounts. But mostly because there's really no better place to turn.

BlueMR2

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Re: VTSAX 13%+ gain YTD
« Reply #15 on: December 29, 2016, 09:56:11 AM »
The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

That's what I'm interested to see.  I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).

seattlecyclone

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Re: VTSAX 13%+ gain YTD
« Reply #16 on: December 29, 2016, 10:03:29 AM »
yeah i really want to see a good dip for 2 reasons:

1. i'm still buying so all that money can get in at a better price

2. i started full time work in 2010 i havent lived thru a large drawback just want to see what it does to me emotionally.

I definitely agree with number 2. I need to see a drop before I fire just so that I know I can handle loosing $200k and stay the course. If I can't, I'd like to know that before I fire.

Agreed. I was in grad school during the 2008 crash, stayed the course, kept investing new money, and came out of it feeling quite good about myself. But my portfolio then was a fraction of its current size. I'd like to think I'd do the same next time, but it's impossible to know.
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boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #17 on: December 29, 2016, 10:22:22 AM »
The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

That's what I'm interested to see.  I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).

its been in the 40s pre dot com bubble. so its not unheard of territory. 
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dougules

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Re: VTSAX 13%+ gain YTD
« Reply #18 on: December 30, 2016, 10:11:52 AM »
If you're past FIRE, it's great.  If you're a few years out like me, it isn't a good thing.

I was kind of hoping we would see a correction this year, so I wouldn't be tempted to punch out early.

Of course, I've been hoping that since the 2013 spike, so I probably shouldn't complain.

At a certain point you're going to just be good to go.  It would be nice to see you're still there even after a pull-back, though. 

yeah i really want to see a good dip for 2 reasons:

1. i'm still buying so all that money can get in at a better price

2. i started full time work in 2010 i havent lived thru a large drawback just want to see what it does to me emotionally.

I definitely agree with number 2. I need to see a drop before I fire just so that I know I can handle loosing $200k and stay the course. If I can't, I'd like to know that before I fire.

I know it wasn't exactly a crash, but I was doing a little happy dance back in February.  Then it went back up :(  At least it's good for everybody here that's already pulled the plug.


Just checked VTSAX for it's gain this year.
It's up about 12% plus another 1.82% of dividends.
 If you had your $1M in VTSAX and spent $40,000,
your portfolio still has and extra $90,000.
 May the good times continue.

Don't forget the most important rule of investing: Gains are meaningless on securities that are held.

Easy come, easy go.

This applies to losses as well, but too many people look at a good period like YTD and think "look at all that money I have made!" but unless you sell NOW, you've 'made' nothing.

I wish people would stop talking about "money" when they refer to stocks.  It's not money, it's equity.  You don't actually have any money.  If the market takes a dive, you've still got the same number of shares.  I know it's just semantics, but it's a semantic misconception that really affects the way people react. 

The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

That's what I'm interested to see.  I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).

Yes, I think some accounting changes had some effects, but interest rates have been super low for a while.  Stocks had to go way up for risk premiums to revert to their mean.  Interest rates are going back, up though, so it will be interesting to see how that plays out. I guess the market is still going up because it sees interest rates as a sign the economy is taking off.  I personally think there will be a "correction," but I mean that in a much vaguer sense than most people.  The market may correct itself with a crash, but it also might correct itself with a rise in earnings, inflation, or something else I can't predict.  And as we've seen over the past couple of years, nobody knows what the timing of that will be. 

sleepyguy

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Re: VTSAX 13%+ gain YTD
« Reply #19 on: December 30, 2016, 02:54:15 PM »
Canadian S&P/TSX ETF killed it this year... particular the one we hold below,

https://www.blackrock.com/ca/individual/en-ca/products/239846/ishares-sptsx-equity-income-index-etf

Mind you 2015 was a crappy year.

I'm heavier on Canadian equities as it's taxing is much friendly and it's nice to get some REALLY heavy gains this year on it, although we are still pretty balanced

We get a bit shortchanged on VanG ETFS here in Canada, the fees are a tad higher and iShares has really upped their game.
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VladTheImpaler

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Re: VTSAX 13%+ gain YTD
« Reply #20 on: December 30, 2016, 04:23:32 PM »
Ugh...I've been sitting on enough dry powder to open a VTSAX but I'm too risk averse.
So it's just sitting in a savings account not earning any interest. :(
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MilesTeg

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Re: VTSAX 13%+ gain YTD
« Reply #21 on: December 30, 2016, 04:37:22 PM »
Ugh...I've been sitting on enough dry powder to open a VTSAX but I'm too risk averse.
So it's just sitting in a savings account not earning any interest. :(

At least put it in a CD or other no risk investment. Have to avoid or at least mitigate the losses due to inflation.

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #22 on: December 30, 2016, 04:51:27 PM »
Or just quit trying to time it and drop it in
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dougules

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Re: VTSAX 13%+ gain YTD
« Reply #23 on: December 30, 2016, 10:50:37 PM »
Ugh...I've been sitting on enough dry powder to open a VTSAX but I'm too risk averse.
So it's just sitting in a savings account not earning any interest. :(

VTSAX dividend rate is 1.82% right now.  If you completely ignore what the market is doing you'll still be making that much. 

Your savings account is also risky.  You risk missing dividends, and you risk losing money to inflation.  And those are risks you've actually already hit.  You just missed December's VTSAX dividend payout, and you lost 1.8% of your money to inflation over the past year.  Both dividends and inflation are likely to pick up soon, too. 

BlueMR2

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Re: VTSAX 13%+ gain YTD
« Reply #24 on: December 31, 2016, 05:16:13 AM »
Ugh...I've been sitting on enough dry powder to open a VTSAX but I'm too risk averse.
So it's just sitting in a savings account not earning any interest. :(

I was expecting a drop a few months ago and was nervous about putting more into VTSAX.  However, I'd hit my agreed upon numbers for doing so.  I did.  Things kept going up.  I'm glad I didn't delay...

It's oh so tempting to try and do some variation on market timing, but for us normal people it just doesn't work.  The losses from not being in are easier to accept, but just as real.  You really need to define your goals, limits, and times, then stick to them.

Metric Mouse

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Re: VTSAX 13%+ gain YTD
« Reply #25 on: December 31, 2016, 05:36:44 AM »
Ugh...I've been sitting on enough dry powder to open a VTSAX but I'm too risk averse.
So it's just sitting in a savings account not earning any interest. :(

I would think it would be more risky to give up huge gains and compounding than it would be to buy into the market.
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TomTX

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Re: VTSAX 13%+ gain YTD
« Reply #26 on: January 01, 2017, 07:19:16 AM »
The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

That's what I'm interested to see.  I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).

its been in the 40s pre dot com bubble. so its not unheard of territory.

But pre-GAAP earnings are not really comparable.

GAAP pushed down earnings and inflated PE.
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sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #27 on: January 01, 2017, 08:04:48 AM »
GAAP has been around >75 years, right?

I'm not following exactly what accounting treatment differences you're referring to Tom. Can you help explain?

PizzaSteve

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Re: VTSAX 13%+ gain YTD
« Reply #28 on: January 01, 2017, 08:47:45 AM »
Guys.  All this talk of hoping for a correction so one can buy cheaper is wrong thinking on many levels.  I would discourage it.

1) the idea of an inevitable correctionis flawed in that it is not true.  The market may never drop. Talk about it encourages sideline sitters.
2) the idea one can time the market to pile more money in (buy low-sell high advice) encourages market timing thinking, which is also correllated with underperformance
3) market volatility has externalities that actually hurt corporate earnings, which are what power dividends and share price.  We should hope for slow steady gains as that is what best for the steady appreciation  of the underlying assets
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Retire-Canada

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Re: VTSAX 13%+ gain YTD
« Reply #29 on: January 01, 2017, 09:24:58 AM »
Guys.  All this talk of hoping for a correction so one can buy cheaper is wrong thinking on many levels.  I would discourage it.

Yup. So many examples of people sitting on the sidelines in fear have been posted on this forum in 2016...some for years. The most liberating thing I've learned about investing is that I cannot predict the future so just invest my money in broad market index funds and get on with working on parts of my FIRE plan that I can control like savings/spending and staying healthy so I can actually take advantage of the free time I'm working towards when I do FIRE.


Classical_Liberal

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Re: VTSAX 13%+ gain YTD
« Reply #30 on: January 01, 2017, 07:06:25 PM »
The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

That's what I'm interested to see.  I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).

its been in the 40s pre dot com bubble. so its not unheard of territory.

But pre-GAAP earnings are not really comparable.

GAAP pushed down earnings and inflated PE.

Not only accounting, but one has to compare risk free returns like US treasuries.  Before the great recession 10 yr Treasury yields were hovering between 4-5 percent.  Recently, (until Trump) they were 1.5, now up to 2.5.  Relatively speaking, the risk premium for stocks is much higher today at a 28 P/E 10 than it was for a 28 P/E 10 in 2007.   The market is less overpriced than a superficial look makes it out to be.  On top of that, many international markets are a downright decent deal with the strong dollar.  I'm bullish for someone with a total world exposure.  Listen to PizzaSteve, it's time to buy!

sol

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Re: VTSAX 13%+ gain YTD
« Reply #31 on: January 01, 2017, 07:30:24 PM »
Listen to PizzaSteve, it's time to buy!

Or don't listen to PizzaSteve, and it's still time to buy.  It's always time to buy.

BlueMR2

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Re: VTSAX 13%+ gain YTD
« Reply #32 on: January 02, 2017, 12:40:07 PM »
It's always time to buy.

This is all that one needs to know about investing!

rudimentsofgruel

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Re: VTSAX 13%+ gain YTD
« Reply #33 on: January 02, 2017, 01:07:01 PM »
When I saw my recent gains in my 401k stock funds, I thought immediately about swapping to some bond funds, but then realized I was getting into market timing thinking and would be really annoyed if stocks kept going up, much more so than if I do nothing and stocks go down. The small potential gains pale in comparison to the value of just not thinking about it. I'll check my balance again in six months.

retired?

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Re: VTSAX 13%+ gain YTD
« Reply #34 on: January 02, 2017, 07:55:44 PM »
Two things I've learned (sort of already knew) since FIRE.....I am not a good individual stock picker.  I had carved out about 10% to have some fun and become more engaged.  The return has been lower than VTSAX.

And, I am not a good market timer.  Back when SnP was about 1400 (and had already risen a lot from the bottom), I was skeptical and pulled out a chunk from a Vanguard index fund.  In retrospect, very poor choice.  Didn't miss the full ride as I put back in a couple years ago.

I am slowing winding down my individual stock picks and place the cash into VTSAX, etc.

The timing choices I may make going forward will be expense-related or a rotation from stock to paying down rental home loan.  But, I won't park it on the side like I did last time. 


AnEDO

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Re: VTSAX 13%+ gain YTD
« Reply #35 on: January 03, 2017, 06:55:38 AM »
Looking at my allocations, with the US markets outperforming, I'm re-balancing into the 3 relative losers, Europe, Emerging and Frontier. 

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #36 on: January 03, 2017, 07:03:40 AM »
Looking at my allocations, with the US markets outperforming, I'm re-balancing into the 3 relative losers, Europe, Emerging and Frontier.

why ... this is market timing... a bad move in general unless you're just rebalancing back to what your AA is supposed to be.
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AnEDO

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Re: VTSAX 13%+ gain YTD
« Reply #37 on: January 03, 2017, 07:15:50 AM »
Re-balancing back to my original allocations my friend. 

sokoloff

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Re: VTSAX 13%+ gain YTD
« Reply #38 on: January 03, 2017, 11:10:37 AM »
That makes sense in general.

I believe that VTSAX (or VFIAX) has adequate international exposure that I don't go specifically seeking international exposure outside of VTSAX/VFIAX.

AnEDO

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Re: VTSAX 13%+ gain YTD
« Reply #39 on: January 03, 2017, 12:26:05 PM »
Nothing wrong with that approach at all. 

My portfolio is biased towards mid cap, small cap, micro cap, value, emerging and frontier.  The odds are good that my portfolio will significantly outperform something like 100% VTSAX.  I have a long timeline and market volatility doesn't bother me in the least.  So for me personally, this is the optimal approach.

ZagNation

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Re: VTSAX 13%+ gain YTD
« Reply #40 on: January 03, 2017, 01:01:26 PM »
Although I am 100% equities in my portfolio, 25% is devoted to international exposure (VTSNX) leaving 75% for domestic (VIIIX). JLCollins makes a compelling argument regarding the inherent VTSAX international exposure however I was convinced after reading Vanguard's Global Equities: Balancing Home Bias and Diversification research paper to diversify my portfolio globally.
Quote
In light of quantitative analysis and qualitative considerations, we have demonstrated that domestic investors should consider allocating part of their portfolios to international securities, and that a 20% allocation may be a reasonable starting point. Although finance theory dictates that an upper asset allocation limit should be based on the global market capitalization for international equities (currently approximately 51%), we have demonstrated that international allocations exceeding 40% have not historically added significant additional diversification benefits, particularly accounting for costs. For many investors, an allocation between 20% and 40% should be considered reasonable, given the historical benefits of diversification. Allocations closer to 40% may be suitable for those investors seeking to be closer to a market proportional weighting or for those who are hoping to obtain potentially greater diversification benefits and are less concerned with the potential risks and higher costs. On the other hand, allocations closer to 20% may be viewed as offering a greater balance among the benefits of diversification, the risks of currency volatility and higher U.S. to non-U.S. stock correlations, investor preferences, and costs.
Out of curiosity, for those that are 100% VTSAX my assumption is you are adhering to a self cleansing strategy on a micro-economic level. Why not implement the same underlying strategy on a macro-economic level? Do you believe the United States' economy will continue to outperform all others in the foreseeable future and on the off chance that it does not, the 'international exposure' in VTSAX is good enough to reap the gains in the ex-US economies?
« Last Edit: January 03, 2017, 01:07:15 PM by ZagNation »

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #41 on: January 03, 2017, 01:08:36 PM »
Although I am 100% equities in my portfolio, 25% is devoted to international exposure (VTSNX) leaving 75% for domestic (VIIIX). JLCollins makes a compelling argument regarding the inherent VTSAX international exposure however I was convinced after reading Vanguard's Global Equities: Balancing Home Bias and Diversification research paper to diversify my portfolio globally.
Quote
In light of quantitative analysis and qualitative considerations, we have demonstrated that domestic investors should consider allocating part of their portfolios to international securities, and that a 20% allocation may be a reasonable starting point. Although finance theory dictates that an upper asset allocation limit should be based on the global market capitalization for international equities (currently approximately 51%), we have demonstrated that international allocations exceeding 40% have not historically added significant additional diversification benefits, particularly accounting for costs. For many investors, an allocation between 20% and 40% should be considered reasonable, given the historical benefits of diversification. Allocations closer to 40% may be suitable for those investors seeking to be closer to a market proportional weighting or for those who are hoping to obtain potentially greater diversification benefits and are less concerned with the potential risks and higher costs. On the other hand, allocations closer to 20% may be viewed as offering a greater balance among the benefits of diversification, the risks of currency volatility and higher U.S. to non-U.S. stock correlations, investor preferences, and costs.
Out of curiosity, for those that are 100% VTSAX my assumption is you are adhering to a self cleansing strategy on a micro-economic level. Why not implement the same underlying strategy on a macro-economic level? Do you believe the United States' economy will continue to outperform all others in the foreseeable future and on the off chance that it does not, the 'international exposure' in VTSAX is good enough to reap the gains in the ex-US economies?

even bogle thinks VTSAX has enough international exposure
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tooqk4u22

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Re: VTSAX 13%+ gain YTD
« Reply #42 on: January 03, 2017, 01:33:38 PM »
The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.

Regular PE on the S&P is 26. Well above it's historic average of around 15.

That's what I'm interested to see.  I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).

its been in the 40s pre dot com bubble. so its not unheard of territory.

But pre-GAAP earnings are not really comparable.

GAAP pushed down earnings and inflated PE.

Not only accounting, but one has to compare risk free returns like US treasuries.  Before the great recession 10 yr Treasury yields were hovering between 4-5 percent.  Recently, (until Trump) they were 1.5, now up to 2.5.  Relatively speaking, the risk premium for stocks is much higher today at a 28 P/E 10 than it was for a 28 P/E 10 in 2007.   The market is less overpriced than a superficial look makes it out to be.  On top of that, many international markets are a downright decent deal with the strong dollar.  I'm bullish for someone with a total world exposure.  Listen to PizzaSteve, it's time to buy!

I made a similar argument in another thread not too long ago about the CAPE/PE being somewhat skewed currently.  I do still think its high but not as high as it would seem.

Also regarding the Shiller PE one should think about the last 10 years.   Sure the Shiller PE is at 27 right now and the PE is at 25.  But in 2009 when the collapse happened and earnings plummeted (a lot attributed to non-cash charge offs/write downs) the PE spiked.

So as a proxy if you take the average of the last 120 months PE it would currently be 26, but if you simply removed the 10 months with the highest and lowest PE ratios the average PE would drop to 20 - still high but its something to think about when there are very large swings up or down. 

So I don't think that the Shiller PE may not be as high as it really indicates

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #43 on: January 03, 2017, 01:43:37 PM »
yep i remember that comment tooq.  it was a well thought out comment and something that does make a lot of sense. 20 is not really that high either. would equate to a 5% SWR ... thats alot
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Classical_Liberal

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Re: VTSAX 13%+ gain YTD
« Reply #44 on: January 03, 2017, 02:38:23 PM »
I made a similar argument in another thread not too long ago about the CAPE/PE being somewhat skewed currently.  I do still think its high but not as high as it would seem.

Also regarding the Shiller PE one should think about the last 10 years.   Sure the Shiller PE is at 27 right now and the PE is at 25.  But in 2009 when the collapse happened and earnings plummeted (a lot attributed to non-cash charge offs/write downs) the PE spiked.

So as a proxy if you take the average of the last 120 months PE it would currently be 26, but if you simply removed the 10 months with the highest and lowest PE ratios the average PE would drop to 20 - still high but its something to think about when there are very large swings up or down. 

So I don't think that the Shiller PE may not be as high as it really indicates
Classical_liberal denies complicity in stealing concepts from tooqk4u22!  :)  Multiple discovery? or great minds?

I remember awhile back, I ran a P/E10 without the 2009 spike (did a P/E 9, nixing 2009) and it impacted the current ratio by only about 0.5 (this was a few month ago), not too substantial.  I had not thought to remove highest and lowest mo's... very interesting indeed.  Did you just randomly pick 10 mos or cherry pick that for any particular reason?

Also of note in the whole situation is the current earnings recession, it ain't pretty. As of June 30th, 12 mo EPS of S&P was only 87.17, from a high of 107.61 only 20 mos earlier.  That type of movement is usually seen in recessions. However, it appears ZIRP may have pushed one off with the very significant Q3 GDP growth revised at 3.2%.  If earnings start to rebound, along with pro-business tax cuts, rising interest rates may not concern investors much.  I second my bullishness!

Bateaux

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Re: VTSAX 13%+ gain YTD
« Reply #45 on: January 03, 2017, 02:41:40 PM »
It's going to suck when this rally ends.  The daily gains have been incredulous.   Probably will see my account increase $7500 just today.
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spud1987

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Re: VTSAX 13%+ gain YTD
« Reply #46 on: January 03, 2017, 04:33:44 PM »
The equity gains the past 2 months haven't been as great for me since I'm about 35-40% in bonds/REITs, which have been hammered. I have to keep reminding myself that my current allocation will pay off during the next recession.

Vilgan

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Re: VTSAX 13%+ gain YTD
« Reply #47 on: January 03, 2017, 07:03:26 PM »
If the market hadn't dropped the last 3 days, I would have finished in the top 10 (of 610) in the bogleheads market predictor competition. So close!

No clue what will happen in 2017, but after basically giving up on buying any bonds through most of 2016 I finally picked some up when BND was at 80. It seems like everyone is seeing the rosy side of trump "good for business!" right now without the downsides. I have no clue where the S&P 500 will end the year (would personally guess around an 8% gain), but I bet there will be some bumps along the way and it'll be nice having some in bonds to ride that out and potentially buy some dips. Or maybe it will just be up up up and I'll regret the bond buys, but at least got in at 80 instead of 85.
« Last Edit: January 03, 2017, 07:11:28 PM by Vilgan »

sol

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Re: VTSAX 13%+ gain YTD
« Reply #48 on: January 03, 2017, 10:29:36 PM »
Didn't we have a bunch of 2016 market prediction threads?  I definitely remember taking bets.  Can anyone find those buried in the forum archives?

Metric Mouse

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Re: VTSAX 13%+ gain YTD
« Reply #49 on: January 04, 2017, 04:47:24 AM »
If the market hadn't dropped the last 3 days, I would have finished in the top 10 (of 610) in the bogleheads market predictor competition. So close!

No clue what will happen in 2017, but after basically giving up on buying any bonds through most of 2016 I finally picked some up when BND was at 80. It seems like everyone is seeing the rosy side of trump "good for business!" right now without the downsides. I have no clue where the S&P 500 will end the year (would personally guess around an 8% gain), but I bet there will be some bumps along the way and it'll be nice having some in bonds to ride that out and potentially buy some dips. Or maybe it will just be up up up and I'll regret the bond buys, but at least got in at 80 instead of 85.

Time to start the 2017 prediction threads!
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