Except perhaps for the very long lived?Īt or near end of 1st paragraph, could mention step up basis on death for those with estate tax. "Over time, you will generate the same cumulative returns as your benchmark" This is contrary to the Bernstein link near top of page, median return below mean. "expect a tracking error of" "5.3% for a 60 stock portfolio" Is that 530 basis points?! But 8.1% difference in amount gained/lost (vs 810 basis points) sounds low for 15. If you have an easy way for investing in Ex-US for those without a good stock screener, maybe could link or mention. "isn't much trouble to select stocks from different industries" For US, probably easy, for example can use cap weighted industry index ETF holding list. There may be other special situations like currency risk and multinational corporations. For example, before I ever saw a post about Profitability capital P, I favored quality, partly to address my sensitivity to shortfall risk. "one can neither help nor hurt oneself through choice of strategy." Except for special situations. Hassle to buy and sell at good prices, but individual investors may have some advantage (small trades), reduced by institutional bots which IMO even play illiquid microcaps. "Low liquidity can be a problem" Also some research shows significant liquidity premium, or whatever the term is. List at top might be expanded for Profitability and Momentum. IMO the big problem with Small (other than behavior) is not volatility as standard deviation, but extreme tail events, which might be covered by the shortfall risk paper.
#Debtinator beta free
"There is no free lunch." Except diversification, which many believe a Small exposure offers. The last paragraph in section says "shortfall" I didn't verify this is shortfall and not drawdown. Just my opinion that shortfall risk is an underapreciated concept at Bogleheads. And/or bold the words "risk adjusted" at the top of the Statman section.ġst sentence: Maybe a link (underline or number) to. "< 0.49%/year, that investor will have a higher expected net return by holding those": Maybe insert "risk adjusted" before word "net". I've had many, but only from US companies. The list in the quote above could also include shareholder lawsuits, which if not responded to means suffering dillution. One choice may be clearly better, but require research to understand which is the better one. "taxable or other paperwork-generating events such as going private, getting bought out, going bankrupt and splitting" Does this deserve its own section? It's not just about documenting what you've done, but you must sometimes make a decision. There are probably other VG funds holding subsets of the market with extremely low turnover costs, though perhaps there are risks in achieving this?Ĭould add a link to Record keeping section. Futures use and stock lending can hide turnover costs, but maybe aren't very significant for Vanguard. Note how closely they have tracked their index. Even for Total International, probably extremely small. Turnover costs of the kind you mention (vs for redemptions could add a line about those also potentially causing trading) of Vanguard Total (US) Market is probably almost zero because it approaches holding or sampling the whole index. I do think I've seen an article or paper showing range of results of a few studies, by asset class (just US small, US large, Ex-US IIRC) but don't recall where. Though may be tough to pick one, as you could make this cost look small or large. No source link for "A hidden cost in mutual funds is the impact of turnover".
Most of the notes below are minor and maybe not worthwhile: Seems like a good page, good coverage of the major issues, at least for a US citizen.
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