Emerging Markets

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Desert
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Emerging Markets

Post by Desert » Wed Mar 22, 2017 6:29 pm

This is only for non-HBPP investors. For anyone holding or considering an EM investment, here's a new article on the topic from Swedroe:

http://www.etf.com/sections/index-inves ... nopaging=1
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ochotona
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Re: Emerging Markets

Post by ochotona » Wed Mar 22, 2017 7:57 pm

Thanks. I have lots of EM
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Desert
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Re: Emerging Markets

Post by Desert » Wed Mar 22, 2017 8:31 pm

ochotona wrote:Thanks. I have lots of EM
So you are happy this year so far! Up 12% YTD.
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ochotona
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Re: Emerging Markets

Post by ochotona » Thu Mar 23, 2017 5:07 am

Desert wrote:
ochotona wrote:Thanks. I have lots of EM
So you are happy this year so far! Up 12% YTD.
Quite satisfied and the CAPE is lower about 15 so more room to grow. The dividend is like 3%.
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Tyler
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Re: Emerging Markets

Post by Tyler » Thu Mar 23, 2017 10:36 am

Emerging markets are a fine component to a portfolio in the right dosage.

But the more I read Swedroe extol the virtues of valuations and expected returns, it strikes me that despite the one passive portfolio named after him he's really not a passive investor at all. Adviser gonna advise.
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Re: Emerging Markets

Post by stuper1 » Thu Mar 23, 2017 2:11 pm

Tyler wrote:Emerging markets are a fine component to a portfolio in the right dosage.
Tyler, I have a question about your portfoliocharts.com website. Do you have a calculator that will do something like the following: I pick a certain number of specific assets, say 2 to 10 specific assets. Then, I ask the calculator to crunch the numbers and tell me what "dosage" of each asset would have given me the best long-term return (but based on multiple calculations using many possible start dates). Basically, I'm looking for a portfolio optimization calculator. I tell it the ingredients I want in my portfolio, and the calculator tells me the "dosage" for each ingredient.
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Re: Emerging Markets

Post by dualstow » Thu Mar 23, 2017 2:59 pm

Tyler wrote:Emerging markets are a fine component to a portfolio in the right dosage.

But the more I read Swedroe extol the virtues of valuations and expected returns, it strikes me that despite the one passive portfolio named after him he's really not a passive investor at all. Adviser gonna advise.
Yeah. I believe Larry said he's taking on more risk in a recent Boglehead thread, the title of which asks, Are you taking on less risk?
It's because of the low (safe) bond yields.
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Tyler
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Re: Emerging Markets

Post by Tyler » Thu Mar 23, 2017 3:18 pm

stuper1 wrote:
Tyler wrote:Emerging markets are a fine component to a portfolio in the right dosage.
Tyler, I have a question about your portfoliocharts.com website. Do you have a calculator that will do something like the following: I pick a certain number of specific assets, say 2 to 10 specific assets. Then, I ask the calculator to crunch the numbers and tell me what "dosage" of each asset would have given me the best long-term return (but based on multiple calculations using many possible start dates). Basically, I'm looking for a portfolio optimization calculator. I tell it the ingredients I want in my portfolio, and the calculator tells me the "dosage" for each ingredient.
I don't have that yet, but it's a good idea. I've played with it in the past, but have yet to get it to a point I'm comfortable with. It's a tricky problem to crack, both mathematically and responsibly. "Ideal" percentages are shiftier than you realize.
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ochotona
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Re: Emerging Markets

Post by ochotona » Thu Mar 23, 2017 6:45 pm

By the way, does anyone have ideas about how to build a collection of EM ETFS that mimic EEM but without China? It's an appealing idea but I don't want to buy a dozen single country ETFs.
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Re: Emerging Markets

Post by eufo » Thu Mar 23, 2017 9:02 pm

Tyler wrote:Emerging markets are a fine component to a portfolio in the right dosage.

But the more I read Swedroe extol the virtues of valuations and expected returns, it strikes me that despite the one passive portfolio named after him he's really not a passive investor at all. Adviser gonna advise.
Yes, he has a definite stance here and one I don't agree with.

Breaking out fundamentals and comparing them seems a little bit ludicrous to me. It's a nice idea to think that, first, fundamentals move markets, but also, that fundamentals between corporations under different governmental regimes can be compared apples to apples.

I've never cared for EM because of my own perceived riskiness in investing outside of my own country. This may end up to be a "mistake" on my future returns, but the long term numbers don't seem to indicate that.

Also, he speaks of recency, but most EM are up substantially as of "recent", so explain to me how recency might make someone avoid EM.

Bah, the whole article just gets me riled up! >:(
Don't agree with me too strongly or I'm going to change my mind
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Re: Emerging Markets

Post by Desert » Thu Mar 23, 2017 9:23 pm

eufo wrote: Also, he speaks of recency, but most EM are up substantially as of "recent", so explain to me how recency might make someone avoid EM.

Bah, the whole article just gets me riled up! >:(
Rather than getting riled, you may want to read the article again. :)
The second mistake is that investors are subject to recency—allowing more recent returns to dominate their decision-making. From 2008 through 2016, the S&P 500 Index returned 7.1% per year, providing a total return of 85.5%.

During the same period, the MSCI Emerging Markets Index lost 1.3% a year, providing a total return of -11.3%. It managed to underperform the S&P 500 Index by 8.4 percentage points per year and posted a total return underperformance gap of 96.8 percentage points.
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Desert
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Re: Emerging Markets

Post by Desert » Thu Mar 23, 2017 9:25 pm

Tyler wrote:Emerging markets are a fine component to a portfolio in the right dosage.

But the more I read Swedroe extol the virtues of valuations and expected returns, it strikes me that despite the one passive portfolio named after him he's really not a passive investor at all. Adviser gonna advise.
I have no idea how you concluded that.
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