DGS
WisdomTree Emerging Markets SmallCap Dividend Fund
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Are bonds an obvious investment now, if you believe that we will return to the 2010-1019 interest rate regime?
Why is SPX still far above pre-covid peak, if rates are higher, and the economy had a stagnant 3 years?
Emerging market small cap value
Cramer says: Heed Brainard, Sell Stonk
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> I would argue OER is almost a laughably bad data collection method if your intent is accurate data collection. You don't seem to understand what OER is tracking if you are benchmarking its accuracy to home prices. That is not what it is. I suggest before you make judgements on how well it is working, you try and understand why it is used and what it is trying to measure. Using home prices as a way to measure the cost of living is very poor because they are durable goods. They do not get consumed after a year. If you could rent a home for $30k a year or buy it for $500k, it does not mean that buying the home is 16x more expensive, because you own the home and you can sell it later. So using the price of the house compared to renting the house does not make sense. Falling interest rates also affect the home price. Lower interest rates could cause home prices to go up, but finance costs to go down, leading to more expensive homes, but the same monthly payment from the owner due to lower rates. Looking at the price of the home would distort the actual cost of the mortgage. And if you look at rates over this time, that is exactly what happened. 30 year treasury yields fell from a high of nearly 10% in 1987 to below 2% in 2020 and are still below 5%: https://fred.stlouisfed.org/series/DGS30 Here are some resources on why the BLS uses OER: https://www.bls.gov/cpi/additional-resources/rent-oer-faq.htm https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm OER is meant to address these issues. There are tradeoffs and pros/cons to any method, but the BLS is transparent on what they do and their reasoning. I'm sure there are valid critiques that could be made one way or another, but your framing of this method as "laughably bad data collection method" just speaks to your ignorance of their process. I think you should do some more reading before you start making judgements on the accuracy of the BLS figures.
It was 4.58% May 21: [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10) \>> Do you think rising yields will trigger a broader market pullback, or is the equity rally strong enough to hold? They would. But they seem to be moving sideways. It's probably more about inflation expectations which are muddied by tariffs (are they inflationary?) and are we heading into a recession (which would possibly keep inflation in check).
It was 15% in the early 80s, imagine loading up on those, guaranteed 15% until 2011 [https://fred.stlouisfed.org/series/DGS30](https://fred.stlouisfed.org/series/DGS30)
Looking at the graph of [10 year treasury bond yield rates over time](https://fred.stlouisfed.org/series/DGS10) it doesn't look like its appreciating more rapidly? At least, it seems to be rising at a consistent rate over the last 4 years. Am I looking at the wrong chart?
Looking at the graph of [10 year treasury bond yield rates over time](https://fred.stlouisfed.org/series/DGS10) it doesn't look like its appreciating more rapidly? At least, it seems to be rising at a consistent rate over the last 4 years. Am I looking at the wrong chart?
Fed rate is important as it is the floor. If you observe the 5 years the 10 year rates are corelated to fed rates after all 10 year is a combination of fed rate plus risk premium https://fred.stlouisfed.org/series/DGS10
> Part of this makes sense as the bonds have gained in value, and it makes sense to sell off the assets that are higher priced. When? Recently, US bonds *fell* in value (rates went up). Here's a [graph of 30 year yields](https://fred.stlouisfed.org/series/DGS30). From the inverse of rates, bonds went up in value from 2018 to 2020 (covid crash in rates), then have been falling in value since 2020.
While it may seem small in context, the issue is long rates disassociating from the expected path of short rates, and more importantly, liquidity issues in the Treasury market. The Treasury market needs high liquidity to fulfill its role, and if that breaks down, all bets are off. Effectively, if the spike is due to a strong mismatch between demand (which is moving to prefer short maturities as leveraged trades unwind), and inelastic supply of long term debt, rates can rise quickly and remove Treasuries as a source of liquidity. What is happening right now is similar to what led to the Fed purchasing bonds in mid-March 2020 in response to the last unwinding of leveraged trades. In that period, rates on the 10 Yr spiked from 54 bps to 118+ bps over 12 days as liquidity in the market melted away. There are two potential solutions. Option 1 is the U.S. Treasury rapidly adjusts its issuance towards short maturity bonds, correcting the mismatch and reducing long supply, or engages in buybacks funded by short issues. (Note this is unlikely, but I will say it given the U.S. Treasury has been toying with small value buybacks recently and its the "natural" move). Option 2 is conditions deteriorate enough for the Fed to step in; perhaps another 15 to 25 bps rise if we take March 2020's peak to trough 54 to 118 bps at close as a guideline. (Though I would lean a bit higher unless we see metrics of treasury illiquidity strongly spike as well.) SLR changes may help a bit by relaxing bank regulatory requirements and enabling them to absorb some of the Treasury selling, but fundamentally won't solve the long/short mismatch unless banks' treasury chooses to expand their long treasury holdings again, which seem unlikely. The Primary Dealer component of the bank likewise isn't going to want to take on the net duration risk being sold right now if markets risk unwinding. Likewise, it won't solve the issue of most savings flowing into MMFs, instead of banks, and who prefer short term government debt . Likewise, to be clear it is probably just a matter of time until the Fed has to step in. The markets are already receiving an additional 600 billion in liquidity support (reserves) and shortfall in government issuance due to the debt ceiling. The TGA has already dumped 600 billion of reserves onto the market, and issued 600 billion less of T-Bills, adding significant liquidity to ON repo markets (although this can't fix demand mismatches and risk aversion + uncertainty). Once the debt ceiling ends and the Treasury aims to issue 600 additional T-Bills, we are likely to see some problems unless the Fed expands its balance sheet before then. The biggest concern, however, is tax day coming up. The liquidity draw there is going to stress leveraged funds borrowing in repo and could be a catalyst similar to September 2019. Think next Monday will be ... quite the day ... with an even more exciting tax day on Tuesday. 300 bn+ in short liquidity will get drawn down, and that could hit remaining leveraged investors via their short borrowing pretty hard. (That said, unlike 2019 we have not seen any major warning signs on month/quarter end yet. Nonetheless even some repo rate volatility could increase tensions.) TL;DR: The spike reflects an underlying lack of buyers in the market, and a potential mismatch between demand and supply of long term gov debt, and demand and supply for short term gov debt. If the mismatch is large, the Treasury market could spiral for liquidity reasons and disassociate from the path of rates, quickly driving rates higher. Zoom in on March 2020, you can see the problem and should probably guess where the Fed stepped in.: [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10)
Zoom in on March 2020, you can see the similar rate spike from the last unwinding as people sold off and moved to cash: [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10) The dollar, however, appreciated in March 2020 around the sell off as people needed dollar funding and the shock was global: [https://fred.stlouisfed.org/series/DTWEXBGS](https://fred.stlouisfed.org/series/DTWEXBGS) That said, we wouldn't necessarily expect the same shock to the dollar this time around since tariffs and reciprocal tariffs are also hitting the current account balance and raising the spectre of idiosyncratic changes in the U.S. unlike the global shock of COVID.
> 3.991 to 4.4ish in 3 days, with it having briefly touched over 4.5% last night. > I'm sorry, but that's not normal. https://fred.stlouisfed.org/series/DGS10
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You’re missing international equity exposure and possibly bond exposure in your recommendations. Don’t allow your personal bias to influence OP’s decisions. These are average options for U.S. equities exposure… VTI or VOO + AVUV will suffice. For a properly diversified portfolio you should add VEA + VWO or VXUS for a total international exposure. If you’re looking to increase compensated risk AVDV + DGS would be a solid compliment to VXUS or VEA + VWO. Finally adding bond exposure could be beneficial with STRIPS if you have a long investment horizon or short/mid term treasury bonds otherwise.
[That's never been true](https://fred.stlouisfed.org/series/DGS10#0). Given that both treasury bills and mortgage rates are so closely linked to the federal funds rate It's functionally impossible.
If you’re looking to maximize gains over the long-term then why avoid small caps? I’d recommend adding AVUV (small cap value) to VOO for your U.S. stock allocation. Then for international you could use VXUS or VEA + VWO and tilt towards small cap value with AVDV and DGS. International markets do not have lower expected returns long-term to U.S. stocks as many assume due to recency bias. You could also consider adding 10% STRIPS for greater diversification, but that is certainly debatable.
5 year horizon till retirement but also a long retirement, so lets take a long term view. You should buy the whole US market at least, SCHB or VTI or whatever. Its recommended to hold 20-30% international equities. Im not saying VXUS since its not my favorite. I prefer VEU (intl large and mid caps) + AVDV and AVES/DGS, some dude a few days ago likes LVHI for its lower vol large cap value approach. Whatever you choose, *long term*, international diversification makes the portfolio more robust, hedges country and currency idiosyncracies, and is one of the only free lunches in investing. 10-30% of your portfolio should be long treasury bonds. This will hedge your fear of a market correction or recession. When stocks crash fast, flight to safety assets like long treasury bonds spike up. Historically this method of holding 10-30% long T bonds like ZROZ along with equities like VTI or VT outperforms 100% equities by a lot, with far smaller drawdowns.
I stand corrected. I thought I had read a couple different places that DGS was undesirable in a taxable... I should look things up before I post lol
AVES has a higher dividend yield than DGS (3.64% vs 3.47%). Dividend payment and exposure to factor tilts is much more deeply linked than in the USA. For example, AVUV gives you very deep factor tilts in US small caps but only has a 1.65% dividend yield (share buybacks are much more prevalent). While unqualified dividends are unfortunate, due to the unknowability of future expected returns in different regions/markets/caps/factors, its best practice is likely to hold your diversified portfolio in all places.
DGS or AVES. Keep DGS only in an IRA though due to its dividends
Here’s a few good ones… - VEA international developed total market - VWO emerging markets total market - AVDV international developed SCV - DGS/AVES emerging markets SCV - VXUS total international markets
I would highly recommend going with a globally diversified portfolio but VXUS at 5% is a meaningless exposure. I would recommend closer to 40% ex U.S. exposure to match market weights. You could avoid mid-cap growth and there isn’t a great argument for large cap growth outside of recency bias. Alternatively there is research that supports tilting towards small cap value and large cap value. Personally I’m VOO – 25%AVUV – 25%VEA – 10%AVDV – 10%VWO – 10%DGS – 10%EDV – 10% This gives you 55% U.S., 22.5% International developed, and 22.5% emerging markets with small cap to large cap held at roughly a 1:1 ratio but avoiding small cap growth. It’s also 90/10 stocks to bonds which is the optimal allocation for the accumulation phase. If you’re wanting to tilt make sure you understand factor/risk premiums. Otherwise just go either 100% VTI or VTI/VXUS or add 10% bond and hold stocks at 90%
Seems reasonable. I recently reallocate my market portfolio to the Ginger ale portfolio after learning about factor premiums. Any reason to not go 50/40 on AVDV and VEA for your developed international exposure? Also, I'd probably up DGS to at least 5%, not much purpose of such a small allocation
[fed funds rate](https://fred.stlouisfed.org/series/FEDFUNDS) and [long duration treasuries](https://fred.stlouisfed.org/series/DGS10) are correlated, but don't perfectly track. Pick random data points and compare, such as April 1993. Look at what happened in the 70s.. so, who wants to buy a 10Y bond at 3.6% considering the government's deficit and debt problem? That yield sucks given inflation risk & interest rate risk. We're in "good" times, and yet: "The deficit came despite record receipts of $4.9 trillion, which fell well short of outlays of $6.75 trillion. As a share of the total U.S. economy, the deficit is running above 6%, unusual historically during an expansion and well above the 3.7% historical average over the past 50 years, according to the Congressional Budget Office. The CBO expects deficits to continue to rise, hitting $2.8 trillion by 2034. On the debt side, the office expects it to rise from the current level near 100% of GDP to 122% in 2034." [source](https://www.cnbc.com/2024/10/18/us-deficit-tops-1point8-trillion-in-2024-as-interest-on-debt-surpasses-trillion-dollar-mark.html#:~:text=As%20a%20share%20of%20the,hitting%20%242.8%20trillion%20by%202034.) Oh, and the fed has ~$7.2T on their balance sheet, which *in addition to directly lowering long-term interest rates by purchasing long-dated securities, quantitative easing is also intended to signal the central bank's bias toward looser monetary policy as a further growth spur* [source](https://www.investopedia.com/articles/economics/10/understanding-the-fed-balance-sheet.asp#:~:text=The%20Fed's%20Balance%20Sheet%20Expansion,-Quantitative%20easing%20(QE&text=In%20addition%20to%20directly%20lowering,as%20a%20further%20growth%20spur.)
(1) In general, I recommend against CDs. If you are willing to lock money up for some number of months, you can buy US Treasury bills in your brokerage account which often pay a little more interest and are exempt from state tax. A bank savings account is for money that is in motion and might be needed soon. I don't have the best options off the top of my head but you can search "best high yield savings accounts". A money market fund in your brokerage account is another cash equivalent with no risk, often with good yields, though you may need to compare the available options. Note for all these cash equivalents, rates should change over time with the Fed's decisions. See https://fred.stlouisfed.org/series/DGS3MO (2) For retirees, a year expenses in cash and the rest in investments. For savers, typically 3 months expenses / 6 months income in cash and the rest in investments (with stock and bond allocation dependent on age, risk tolerance, etc). If the business income is inconsistent, it makes sense to keep a larger cushion of cash. (3) Stocks: VTI, VXUS, Bonds: BND, SCHP (4) Open a brokerage account at Fidelity or Schwab. You can open a IRAs or Roth IRAs for tax exempt retirement investing for up to 8k per person (8k is for people older than 50; you can contribute 7k per year to your own once you have earned income). https://www.reddit.com/r/investing/wiki/index/gettingstarted https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy
Bonds did become a more attractive investment to everyone as their expectations for the future path of interest rates fell. That's why bond yields dropped (and equivalently prices rose) *before* the Fed actually cut rates. For example, 3yr dropped from 4.8% back in April, to 3.5% recently: https://fred.stlouisfed.org/series/DGS3 If you want to benefit from changing interest rates, you need to get in before everyone else does. Last friday's jobs report was very good, leading people to start reversing expectations. They no longer expect rapid cuts, at least not as many as before.
What do you mean it's not fully reflected? Tbill rates are down 75bps. https://fred.stlouisfed.org/series/DGS3MO
the Avantis funds are very new and very trendy. DGS is an emerging small cap value fund.
You'd have to look at the 30-year yield: [https://fred.stlouisfed.org/series/DGS30](https://fred.stlouisfed.org/series/DGS30) It looks like the peak in 1980 was around 12%. So if you loaded up on those with $1 million you would receive $120k/year (yields are always presented as annualized yields - a 12 month period). I buy and hold bonds to maturity. But there are others here and in r/bonds who could also point out the selling opportunities those 1980 30-year treasuries presented in the subsequent years of falling yields.
I have 6 that have a value and small cap weight overall, with world market cap allocations based on US, International, and Emerging Markets. Historically weighting towards small caps and value provide the best return, whether that holds up is anyone’s guess… anyway these are my 6 that I think are tilted as aggressively as possible and give me the best change for the highest risk adjusted return without going overboard and doing something wild like 100% small caps. This is 65/35 us to international weighted, and 8% is emerging value. Small cap to med/large cap is around 1:1. AVUV-32.5% RPV-32% AVDV-14% DFIV-13.5% DGS-4-% AVES-4% Edit: There are no bonds here since you are in your 20s. Personally I am 100% stocks because I have diamond hands and don’t sell and don’t get emotional no matter how bad things get…I also have a pension when I retire which replaces the need for bonds for me
I have 6 that have a value and small cap weight overall, with world market cap allocations based on US, International, and Emerging Markets. Historically weighting towards small caps and value provide the best return, whether that holds up is anyone’s guess… anyway these are my 6 that I think are tilted as aggressively as possible and give me the best change for the highest risk adjusted return without going overboard and doing something wild like 100% small caps. This is 65/35 us to international weighted, and 8% is emerging value. Small cap to med/large cap is around 1:1. AVUV-32.5% RPV-32% AVDV-14% DFIV-13.5% DGS-4-% AVES-4%
It is the constant maturity rate. I thought it would best to use this measure so users could compare, but lmk if you think an alternative would be better! https://fred.stlouisfed.org/series/DGS3MO
To clarify on the existing treatments to treat immunodeficiencies. There are a few other drugs that exist, however the immunoglobulin which are used to treat primary immunodeficiency (PI) is what ADMA’s drugs specialize in. Their market share is currently 2% but they are growing much faster and agressively than existing company’s with older dated products with hit or miss success in comparison. The big leap in their massive growth has been production and distribution of immunoglobulin drugs all in house with their newly complete and operational facilities. Also capitalized on the growing recognized as one of the most effective treatments in combination with these other drugs or existing therapies. Besides that there exists a few other targeted treatments within other immunoglobulin therapies (much rarer conditions) which ADMA does not target with their treatments, these consist of: Common variable immune deficiency (CVID), Severe combined immune deficiency syndrome (SCID), and three others: (DGS), (XHMD), and (XLA) which I won’t go into extensive detail about because they are much less common and I’m not a physician who can give you the full breakdown of different immune deficiencies. However I do not think that these other subsidiary immune deficiency target populations are relevant since they have a more limited number of target patients What I do know is that primary immunodeficiency (PI) is the largest growing and at par with the largest other treatment for less common deficiencies. You can check out ADMA’s corporate investor presentation, my insight might not be the most clear in comparison to the one they provide since I am not a doctor.
BINC is an active multisector bond fund, meaning it invests in a broad range of bonds including some less common stuff like EM bonds, CLOs, and non-agency-backed mortgages. It has some duration: 2.9yrs, and some credit risk: 1.9% credit spread, and it appears those targets can vary at the discretion of the managers. It has 0.4% fees and reports a SEC yield of 5.61%. Compared to a typical Agg-like bond fund, you can expect higher long term return, more credit risk, and less interest rate risk. Compared to a typical money market-like fund, you can expect higher long term return, credit risk, and interest rate sensitivity. A bank savings account has no duration or credit risk (unless you deposit more than the FDIC limit). They tend to offer rates below the risk free rate (currently [5.46%](https://fred.stlouisfed.org/series/DGS3MO)) since they are in a less efficient market.
https://fred.stlouisfed.org/series/DGS10
I bet on the S&P as usual and in small cap value, so I have AVUV, AVDV and DGS. Besides the usual large cap ETFs and bonds.
We're talking about different projections, I think. Sure, within margin of error for one measure, one month out, they did great. Look at past projections for FF rate, starting 2021 or so. Messaging is a huge part of what the Fed does with its meeting updates and has been since forward guidance began after 2008. Projecting three cuts this year, just guesses from each of the banks is an imperfect measure, and I think even Jay would agree, those aren't what drive the ultimate rate decisions when the time comes. I agree with you that the FF futures market hasn't been completely accurate, but it has its own flaws as its mostly used for hedging purposes and is dominated by one large player. If they didn't care about the market's forward-looking expectations were then they wouldn't measure it. They want to assert that they have the situation under control. If the market senses that the Fed sees higher inflation for longer, it manifests in longer term bond rates by transmitting through the term structure of interest rate expectations. Good reference for NY Fed's work on expectations: [https://www.newyorkfed.org/microeconomics/sce#/](https://www.newyorkfed.org/microeconomics/sce#/) And a look at the 30-year rate reflects the change in expectations from "transitory" to a more permanent structural shift. Changing the FF rate only does so much to impact a 30-year security, but the market's outlook on the rate of inflation 10/20/30 years will have a significant impact. Balance sheet and Treasury financing impact too, but nobody is buying a 2% bond unless they expect inflation to be firmly anchored near that level. [https://fred.stlouisfed.org/series/DGS30](https://fred.stlouisfed.org/series/DGS30) Sorry for the rant, bring some substance man.
Fed has a restrictive policy now. Look at the big picture. [3 month Tbill yield history](https://fred.stlouisfed.org/series/DGS3MO) [CPI history](https://fred.stlouisfed.org/series/FPCPITOTLZGUSA) If you believe the Fed will hold the short term rate *more than 1.3% higher* than the inflation rate over the long term, then yes T-bills will outperform in that environment. The late 90s look a little bit like that scenario, but not by a wide margin. T-bills *could* offer a greater real return for some future periods of time. I bonds with the fixed rate are *guaranteed* to have a positive real return for 20 years straight. We just got out of a regime with 13 years of negative real Tbill yields. That's a hard pass from me when my goal is maintaining purchasing power of savings.
That's a good rate but not crazy. Tbills are at 5.45%. https://fred.stlouisfed.org/series/DGS3MO
That's pretty much what I do but 60% VOO, 20% AVUV, and then 20% split equally between VEA, VWO, DGS, and AVDV
I'm personally just using Vanguards emerging markets etf and not trying to make specific predictions. I _might_ switch to Avantis EM / EM Value but that's not my default. For India in particular, there are MSCI India ETFs esp from WisdomTree and iShares. Those are tailored towards large caps though and have relatively expensive companies. There is WisdomTrees DGS which is tailored towards emerging markets small cap value. This may benefit more from economic development but only has 10% India. My hearsay knowledge is that these publicly available funds will underperform institutional funds that are actively managed, which is unfortunate if true. But it will still help.
Yes, they use forward guidance to influence the markets, a tool arguably more powerful than interest rates alone. However, I’m not sure what disconnect you’re referring to; the 2-year called the premature hike when the fed said rates would remain low for long. The fed has been following the 2-year in lockstep since ‘84. https://fred.stlouisfed.org/series/DGS2#0
Here's my list: VYM - Vanguard High Dividend Yield ETF SCHD - Schwab United State Dividend Equity ETF DGS - WisdomTree Emerging Markets Small Cap Dividend Fund IDV - iShares International Select Dividend VIG - Vanguard Dividend Appreciation ETF SPHD - Invesco S&P 500 High Dividend Low Volatility ETF SPYD - SPRD Portfolio S&P 500 High Dividend ETF
You can do it in excel or python + pandas or whatever your favorite language is. You can get daily price data from yahoo finance. Use the adjusted close column to include distributions. If you want to backtest further back than inception of those funds you'll need to reconstruct the fund returns. You can do that with daily data for VFINX and 30 year bond yields DGS30 at fred plus financing rates. UPRO would be financed at LIBOR + 30 bps, that is, the daily return of UPRO is 3x the daily return of VFINX minus 2x the daily interest via LIBOR+30bps. LIBOR doesn't exist any more so for recent years you can replicate it with tbills and a wider spread. To replicate bond returns from yields, you'll use the formula (3) https://www.mdpi.com/2306-5729/4/3/91. Treasuries can be financed at a lower rate so you can use 3month tbills plus 20bps or something instead of LIBOR. From there you will need to calculate your moving averages and build a portfolio for each day and compound together the portfolio returns. And annualize it.
My proxy for risk free rate. https://fred.stlouisfed.org/series/DGS1
>Thanks, I was considering this too. But no use in selling current VOO holdings, right? Just continue putting it all towards VTI? In tax advantaged (like IRAs), I'd sell the VOO. In taxable, probably not, unless you can tax loss harvest. >Didn't realize VXUS is inclusive of so much emerging markets, thank you for this! You can see that here https://investor.vanguard.com/investment-products/etfs/profile/vxus#portfolio-composition and ETF Overlap: https://www.etfrc.com/funds/overlap.php >Similar question as above...worth selling or just going forward with different allocation for future purchases? Same answer as above. >Selling what, exactly? Selling the VOO to buy VTI. >And thank you, I will look into VXF, not familiar with it VXF is an extended market fund. In the right ratio, pairing it with VOO should mimic VTI. Approximating US total market cap weights: https://www.bogleheads.org/wiki/Approximating_total_stock_market >A reoccurring doubt of mine w/ investing since starting 1.5 years ago is whether i should be selling these less favorable holdings (eg. VOO and DGS in the above breakdowns), or just going forward with the purchase of others in future investments. Any advice for me here? That's been my biggest gap in learning thusfar. Is there a tax or fee that would be applied? If no and no, then go ahead and sell to move to your real desired allocation. No reason not to. If either are yes, you'd have a choice to make.
\- mostly split between VOO/VTI (over 60%), Why both? I'd just go VTI, as it already fully includes VOO. - ***Thanks, I was considering this too. But no use in selling current VOO holdings, right? Just continue putting it all towards VTI?*** \- DGS for emerg. markets (30%), and VXUS (10)%). That's a heavy overweight of emerging markets, as roughly 25-30% of VXUS is emerging already. If that's intentional and you intend to underweight developed markets (at roughly 7% instead of 30% of a global market cap weighted portfolio), that's a bit extreme, but could be fine for you. - ***Didn't realize VXUS is inclusive of so much emerging markets, thank you for this! Similar question as above...worth selling or just going forward with different allocation for future purchases?*** \- personal brokerage- 31k, 75% VTI/VOO, and 25% VXUS. Selling here might not be a good idea, but adding VXF in the right ratio can simulate VTI. A bit of a US tilt already. - **Selling what, exactly? And t*****hank you, I will look into VXF, not familiar with it.*** **A reoccurring doubt of mine w/ investing since starting 1.5 years ago is whether i should be selling these less favorable holdings (eg. VOO and DGS in the above breakdowns), or just going forward with the purchase of others in future investments. Any advice for me here? That's been my biggest gap in learning thusfar.**
>mostly split between VOO/VTI (over 60%), Why both? I'd just go VTI, as it already fully includes VOO. >DGS for emerg. markets (30%), and VXUS (10)%). That's a heavy overweight of emerging markets, as roughly 25-30% of VXUS is emerging already. If that's intentional and you intend to underweight developed markets (at roughly 7% instead of 30% of a global market cap weighted portfolio), that's a bit extreme, but could be fine for you. >personal brokerage- 31k, 75% VTI/VOO, and 25% VXUS. Selling here might not be a good idea, but adding VXF in the right ratio can simulate VTI. A bit of a US tilt already. A global market cap weighted portfolio, a reasonable starting point, would be (roughly) 50% US large caps, 10% US extended market, 30% developed ex-US, 10% emerging ex-US. Recent history has favored US large caps, but be aware that that comes after a run where they were one of, if not the, worst place to have been invested. Winners don't stay winners forever, favor changes. If your current funds are expensive, that could be a reason to switch, if you also already your other accounts accordingly to make up for what you'd be giving up.
Good question. I currently hold: \- **a Roth IRA (backdoor)** **w/ roughly 15k** mostly split between VOO/VTI (over 60%), DGS for emerg. markets (30%), and VXUS (10)%). No REAL rhyme or reason, just a bit more diversification. \- **personal brokerage- 31k**, 75% VTI/VOO, and 25% VXUS. So definitely have a large majority in Large Cap/S&P500 ETFs.
35, married. Our net worth is about $1.75M, living in California. A big part of that is we make a good living (~$500K), aren't big spenders and bought our home and at a good time in 2019. Home Equity: $700K 401Ks: $425K Equities (Taxable): $340K - $100K VOO, $100K SCHD, $70K AVUV, $15K AVDV, $20K DGS, $20K PIN, $15K SOXX CD - $50K Bonds/Money Market: $50K Cash - $150K Crypto - $20K Vehicles - $30K
nope, the 10Y rate, which all mortgages are based off of, were around 4% to 5% from 2004 to 2008. https://fred.stlouisfed.org/series/DGS10 You just are completely wrong here.
Why? [Rates haven't been this high since 2002](https://fred.stlouisfed.org/series/DGS20). Inflation indexed 10 year yields [haven't been this high since 2000](https://fred.stlouisfed.org/series/DFII10), with the exception of a month in 2008. And the US government can't afford high real rates.
The yield has been above 7% for most of the nations prosperous history. It seems history disagrees with you. [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10)
A quick glance at a long term 10-year yield chart tells me they could easily go higher. [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10)
https://fred.stlouisfed.org/series/DGS2
> Compared to various points in history, interest rates right now are actually still fairly low. Here's [the 10 year T-bond rate minus inflation from 1962](https://fred.stlouisfed.org/series/DGS10). If you believe that T-bonds will stay at 4.3%, but inflation will fall to 2%, then today's bond rates are pretty typical. In the 1960s 10 year T-bonds yielded 2.5% to 2% above inflation, then went negative from 1975 to 1980, then rose to 7% for a very brief time, then hovered at around 3-4% to late 1990s, then went below 2% from 2000 to 2009. So real rates are low today only if we believe inflation continues, but if we believe inflation will return to 2%, then rates seem pretty normal for the post-1960 era.
You sound rather convincing.. I like that! I put you on the spot to explain and you had a answer.. ty for that.. one question when comparing what I proposed and what you suggested.. how are the percentages of small cap, emerging, international and value when comparing both portfolios? And I am definitely not asking exa percentages… a simple what I proposed has “a little more value “ .. what you proposed has “a lot more international “ .. comparisons like that if you don’t mind .. nothing to detailed..if your change was at all because you feel mine was to much of something or to little that would be good to know also.. it sounds like you thou I had to much emerging? One thing I read about the DGS was saying that it is dividend and some how becomes of that.. in some way it was round about value. .. like it wasn’t intentionally a value etf but it turned out that way.. ty for all your help.. it really is making my head spin and you seem so sure lol.. maybe one day I will understand this stuff better lol
Yes, 50/50 blend/value. The top offering in both is the blend, the others are the value. To answer all of your other questions yes - diversified, low expense, good total return. If I was using your picks only I would go something like this for 60/40 45% VOO 15% AVUV / 30% VEA 10% AVDV I’d swap VEA for VXUS though because VXUS is VEA + VWO and I would not include DGS because AVDV is already covering that. VWO and DGS are both emerging market funds but if you just use VXUS and AVDV you will get EM exposure. VEA is just developed international.
Imagine you are in an environment in which people and institutions have just been lent or given a lot extra cash to spend but for some hypothetical reason don't have much to spend it on. Economic growth is low and the lack of demand is suppressing inflation. Also inflation has been low for the past decade despite lots of fiscal and monetary stimulus, and rates in similar countries overseas had even been negative for a while. In this environment, you might accept a low rate of yield on safe bonds rather than none at all keeping cash. For example, you might pay 98.76 for a five-year 100-par zero-coupon note to get a [yield of 0.25%](https://fred.stlouisfed.org/graph/?id=DGS3MO,DGS5,DGS10,DGS30) (100/1.0025\^^(5)). Then, a couple years later, for some hypothetical reason, people start spending all that money. Supply can't keep up with the surging demand and inflation starts to spike to levels not seen in forty years. Monetary policymakers quickly turn restrictive to counteract it. In this environment you will be want and be able to get a higher yield on safe bonds. For example people might pay you 81.41 for a five-year 100-par zero-coupon note to get a yield of 4.2% (100/1.042\^^(5)). That's a 17.5% loss on your note from prices two years ago. Ouch.
I have a feeling I'll get bullied for this one but - has anyone had experience with Charles Schwab Intelligent Portfolios (robo-advisor)? I (36) have just started investing within the past year and a half (playing catch-up after a 15-year stint abroad). I have my employer 401k in a Target Date Fund, then my own Roth IRA (backdoor method) and Taxable Brokerage. I'm looking to play catchup so have a moderate risk tolerance and would like to have my money grow at a quicker pace since I lost so many years behind me. I have very basic knowledge and have most of my Taxable and Roth money in VTI, then some in VXUS and a small amount in foreign stocks (DGS). Would a robo-advisor (set up with a mid-mid/high risk tolerance make sense for me? Or should I keep with VTI as my main bucket, with VXUS and DGS as complimentary?
If you deposit money in a savings account, you have loaned it to that bank. They advertise some interest rate to you and that's the annualized rate the account will pay you. Meanwhile, they will take some of that money and loan it to others. They can change their rate any time and you can withdraw at any time. If the bank goes bankrupt, your deposit is at risk since it exceeds FDIC limits. FDIC has in the past tried to manage bank liquidations or takeovers in a way that covers uninsured depositors but there is no guarantee. Currently, due to the recent high inflation and the Federal Reserve's rate hikes to combat it, a competitive rate on cash is around 5.4% (pre-tax). That's what you can earn, with effectively no credit risk, by buying treasury bills with your cash through any broker. There is no good reason to deposit a significant amount of cash in a savings account unless it pays that much. 5.4% on $60M is $270k a month. If you reinvest 2.5% to scale with inflation, that leaves 145k a month. But cash rates can change quickly. If an economic crisis happens, rates could be cut to zero and may stay there for years as they did 2008 (https://fred.stlouisfed.org/series/DGS3MO). Longer term bonds will lock in an interest rate for longer, but the tradeoff is that they can fluctuate in market value in the short term. $60 million is quite a lot of money for someone who isn't used to managing it and you should probably get professional investment and tax advice. Keeping it in t-bills or bank deposits or other money market instruments is quite safe in the short term but can be expected to give lower returns than a portfolio of stocks and bonds. That will make little difference over the next few years but if you want this money to provide for you and for generations after you, you will be better served with a moderate risk portfolio.
Thank you for your answer "...robotaxies, stock is gonna tank" that's for sure. ARM has designed a stackable 1W GPU that can be used in IOT for things such as autonomous driving, it will be much more energy efficient that existing tech but is some years away. ARM will IPO this year, a good thing to buy when the market bottoms. And NXP is working on in-memory computing chip with the US airforce for drones, bcs this is more faster and better than current CPUs and GPUs. About rising and falling rates environment: From 1940 to 1980 rates went up from 1% to 15% From 1980 to 2020 rates fell from 15% to 1% The yield on the 10 year Treasury bond is smoother than the 'fed funds rate': [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10) [https://fred.stlouisfed.org/series/FF](https://fred.stlouisfed.org/series/FF) but they both follow the same long trends. In the 40s, 50,s 60s and 70s the run up in commodities, and oil especially, forced the Fed to hike, imo, we will see. I'm also short MARA since two days, it's a scam and price has been pushed up last month for it to tank now, it's the best short now until BTC stops falling imo.
It's composed of TBills and repos. Its yield decreases the same way it rises. I'm not sure which rate you consider the overall government lending rate. The [Fed's reverse repo facility](https://fred.stlouisfed.org/series/RRPONTSYAWARD) is indeed held at a fixed rate for weeks at a time and hasn't decreased. [But tbills](https://fred.stlouisfed.org/series/DGS3MO) are traded in the open market and may change in prices and yields every day. The fund is also continually reinvesting cash received from matured tbills into new tbills. By the way are you sure it was 4.70% yield before? It's possible you are looking at two different types of yield quotes.
For an EM I don't think Turkey is all that cheap. Turkish people are worried about inflation more than interest rates and have hidden out (correctly) in stocks. Their stock market is rather high in local currency terms. Last year you could get 25% on Turkish bonds, that was an attractive way to play Turkey if you had confidence. Those people made out as those same bonds are at 10.5%. I don't like the bonds at today's prices either. I like where your head is out jumping into crisis and buying cheap. You might want to consider FNDE, DGS and take a broadly diversified collection of these opportunities.
Simple.... 30y treasuries... https://fred.stlouisfed.org/series/DGS30 3.54% 30y fix rate mortgage... https://fred.stlouisfed.org/series/MORTGAGE30US 6.28% Banks borrow at 3.54% and lend at 6.28%, earning them almost 3% annually for a prime borrower with a low default risk. (obvi it's more complex but that's the eli5 answer)
I want to sell puts on some boring conventional stocks. Not sure which one yet. VYM - Vanguard High Dividend Yield ETF SCHD - Schwab United State Dividend Equity ETF DGS - WisdomTree Emerging Markets Small Cap Dividend Fund IDV - iShares International Select Dividend VIG - Vanguard Dividend Appreciation ETF SPHD - Invesco S&P 500 High Dividend Low Volatility ETF SPYD - SPRD Portfolio S&P 500 High Dividend ETF
I thought it was starting to uninvert too but the 1 moth T bill (link: [https://fred.stlouisfed.org/series/DGS1MO](https://fred.stlouisfed.org/series/DGS1MO)) jumped back up from 4.2 to 4.7%
Sort of. I have one on EM Value and then one that's basically AVES vs. AVEM vs. DGS.
Since rise in interest rates up to 1982 the current rise in the 10 year yield has never been seen before. If you look at the rise in rates in terms of magnitude which may be more impactful on bond pricing, the current interest rate increase is unmatched at least since 1962 (when the FRED chart linked below starts). I would not assume stress testing accounts for this. [https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10)
"Try to explain what a yield curve inversion means and what it does to cause a recession." First, your premise is wrong. Yield curves don't cause recessions, they indicate them. You appear to operating under the assumption that the yield curve isn't well understood and an otherwise meaningless piece of data. If you're interested in learning more about what a yield curve means you should read the paper linked to in this comment from the New York Fed's website. Time inverted is important when considering the potential for a recession. A simple, momentary inversion DOES NOT mean an inevitable recession. But at times when the TB3MS/DGS10 and DGS2/DGS10 are simultaneously inverted for extended periods of time (as they are now), they have been 100% accurate. [https://www.newyorkfed.org/medialibrary/media/research/current\_issues/ci12-5.pdf](https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci12-5.pdf)
Life is to short to wait for all those emerging markets narratives to become reality. There is always some China reopening, India growth, Thailand election. Etc. Turkey is just another em country. I got DGS as small cap value em etf and don't need to care about each individual narrative.
Just did some quick research and it looks like AVES, DGS, DFEV, or EYLD will probably be the best EM value options. Probably going to go with AVES as it's the cheapest and most trade volume.
VWO: if you buy VWO be aware that it is 34% China exposure and 16% Taiwan exposure. And DGS is weighed almost the opposite way for these 2 countries: 27% Taiwan and 19% China.
Pretty new to the world of investing as a 19 year old college student. I don't have to worry about debt or tuition because everything has been paid for already. Stumbled upon this "lazy ETF portfolio" ([https://www.optimizedportfolio.com/ginger-ale-portfolio/](https://www.optimizedportfolio.com/ginger-ale-portfolio/)) and was wondering if it is worth it for my age. Looking to allocate much of my savings and save for at least 20+ years. Overall (Taxable account): VOO – 30% AVUV – 30% VEA – 10% AVDV – 10% VWO – 10% DGS – 10%
ETF allocation (core portfolio, ~80%) for 2022, -9.64% Total portfolio for 2022 -11.78% (includes a few tilt attempts w individual stocks, some great, others abysmal, + a previous TLT position that got hammered, + some spec punts - ~20% of accounts) Technically didn't DCA, but contributed regularly to VOO + AVUV + SCHD + VTV + AVDV/DGS, closer to the swing lows of the descending channel that SPX has been following since April 2022 and skipping the swing highs. (I know, don't time the market. I agree mostly, but I adjust a little bit during macro down trends in clear boundaries) Did it help? Not sure yet, but probably not. Had I DCA'd every week instead, just to my top 4 ETFs the return would have been -7.21% If DCA only to VOO, 100% Allocation, -18.2% It really depends how my current holdings perform over the long run. A recovery could outperform or underperform the benchmarks. That is the goal after all, and we'll only know when we know right? Also, looking at one year doesn't really mean much outside of the context of total performance over time leading up to 2022. Side note: Anyone stating returns for 2022 that are btwn -2% and +5% while their allocation is VOO or some combo of it + a few other common ETF diversifiers isn't calculating their YTD returns correctly, or they're stating their *total* performance since inception, or are simply making it up. TWRR is a better judge of portfolio performance vs MWRR in my opinion. That being said, the most common allocations are all going to be down at least -5-10% for 2022, and likely much more if there was exposure to Int'l, Small/mid caps, bond funds, Gold, REIT, you name it. No matter how you slice it, SPX is down -18% and your DCA schedule cant have flipped that into only -2%. The only major ETF sector that is up for 2022 following a DCA strategy is the Large Cap Value / Dividend ETFs like SCHD, VTV etc. You'd need a 100% allocation to them for that. Happy New Year to all r/investing redditors and may you be blessed with outsized returns in 2023! Cheers
If I had extra money in 2023 I'm planning these: > https://wiseme.in/web-stories/best-high-dividend-etfs-in-united-states/ * VYM - Vanguard High Dividen Yield ETF * SCHD - Schwab United State Dividend Equity ETF * DGS - WisdomTree Emerging Markets Small Cap Dividend Fund * IDV - iShares International Select Dividend * VIG - Vanguard Dividend Appreciation ETF * SPHD - Invesco S&P 500 High Dividend Low Volatility ETF * SPYD - SPRD Portfolio S&P 500 High Dividend ETF
Ahhh looks like you are right! I definitely don't mind as I want 20% EM exposure overall and DGS is the only really viable alternative at almost twice the cost and dividend yield. Any outperformance would likely be eaten by the expenses and tax drag.
SCHD SCHY AVUV DGS ... also I have VHT and FXG for defensive. With rates somewhat high and probably rising and a possible recession looming, growth stocks get hit hardest due to the largest earnings slowdown and multiple contraction both.
I've been keeping a close eye on yield curves lately (and am working on some DD for it), but the 10Y-3M spread has actually been worse than what was on Friday. Looking at your linked data set: Trade Date|Spread :--|--: 1982-02-16|-0.96 2001-01-02|-0.95 2022-12-02|-0.83 So it's close. But -0.96 isn't even remotely close to the lowest in history. If you compare these two data sets: * [Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity, Quoted on an Investment Basis](https://fred.stlouisfed.org/series/DGS3MO) * [Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis](https://fred.stlouisfed.org/series/DGS10) And look at 1981-09-01 for both, you'll see the spread was at -1.60. I think we'll beat the low in 1982, if the Fed continues hiking to at least 5%. We might even surpass 1981.
A return to the previous high levels would likely only occur during a recession when the Fed has to drop rates. But even without a recession, I think it is very likely to get close to those high levels. Take a look at this graph of the 30-year yield over time: https://fred.stlouisfed.org/series/DGS30 Decreasing long-term rates is one of the clearest, most consistent long-term economic trends that exists. And this trend exists not only in the US, but across all developed economies. The 30-year is currently yielding around 3.6%, and I will probably keep buying into TMF at least until yields return to the long-term trend line (maybe 2.5%?). At that point I’d probably return to a more “normal” allocation.
So Avantis came out with a new ETF, $AVGE which seems kind of similar to my long term hold portfolio of 30% VOO, 30% AVUV, 10% AVDV, 10% VEA, 10% VWO and 10% DGS ​ Probably seems better to switch over to AVGE at this point, won't have to deal with the rebalancing and a complicated allocation of etfs Thoughts?
FRED often posts the same data series with different time increments. The daily version is DGS10. There may be subtle differences since \^TNX is calculated by CBOE while DGS10 is calculated by the Treasury, but they are basically the same.
If someone comes around with a micro cap ETF with decent fees then move half the VBR into that. DGS's fees are unavoidable...and worth it.
50% VBR, 35% AVDV, and 15% DGS. Dividend reinvestment plan. Close your eyes and come back in 40 years.
I've always had a hot take that the Fed, being aware that the [10 yr Treasury yield](https://fred.stlouisfed.org/series/DGS10) is a good estimate for the [neutral rate of interest](https://www.federalreserve.gov/econres/notes/feds-notes/estimate-of-the-long-term-neutral-rate-of-interest-20180905.html), is going to keep raising rates slowly until it reaches that number. The market seems to be [pretty certain that we'll get to > 4.25% by the end of the year](https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html), but I'm a bit skeptical of anything beyond that unless the 10 yr yield keeps rising. The leading indicators you mention reinforce my opinion.
Possibly, but a lot risker too. I split my emerging market exposure between VWO, AVES, EMXC and DGS to control my cap exposure, value exposure, and limit my exposure to China.
Value stocks in general seem like amazing "value". AVUV, AVDV, and AVES all with PE ratios below 10. I think value stocks will significantly outperform large cap growth and tech in the near to mid term. Personally, I am value tilting fairly hard, with a portfolio as follows: 1. 30% - NTSX 90/60 S&P 500/Treasuries; 2. 20% AVUV – Avantis US small cap value; 3. 10% VMVAX - Vanguard Mid-Cap Value Index Adm; 4. 14% VTMGX - Vanguard Developed Mkts Index Adm; 5. 14% AVDV – Avantis International small cap value; 6. 6% VEMAX – Vanguard Emerging Mkts Stock Idx Adm; 7. 6% DGS - WisdomTree Emerging Markets SmallCap Dividend Fund. Rebalanced quarterly.
Back of the envelope: TLT yield in Sep 2019 (proxied with [FRED/DGS20](https://fred.stlouisfed.org/series/DGS20)): 2.0% TLT yield now: 3.8% TLT effective duration (as of today via [Blackrock](https://www.ishares.com/us/products/239454/ishares-20-year-treasury-bond-etf): 17.9yrs As a first approximation, TLT should have lost 32% in price. We can expect that to be overestimated due to convexity and the three years of time that its bonds have spent maturing. Actual price loss: 106.24/141.89 - 1 = 25%. Seems about right to me.
On ToS you can also use DGS2. Change the 2 to 5/10/30 for those yields. Can also do futures with /10Y or /2YY.
Assuming max credit score Google says mortgages in my area go for 6.353. The 10-year treasury rate is 3.20% so there is a 3.1% markup. So I'd expect it'd go to 4% if the 10-year goes to 4% and the yield curve remains flat. The yield curve might not remain flat, it might be inverted, where the 10 year remains at 3.2% and the overnight goes to 4%. In that case I'd imagine mortgage rates would stay the same. You can say compare the fed funds rate in the 1970s compared to the 10 year to get some ideas *if history were to repeat.* https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/DGS10 8.10 April 1970 fed funds, 7.82% 10-year rate, so definitely flat but some minor yield inversion. I won't cover the whole era. I hope this helps!
First thought is there's a good chance you are being scammed. 12% guaranteed: "Either the bank is lying or Celsius is lying". Guess which it was. Second thought, 3 yr TIPS yield around 0.34%* while 3yr nominal treasurys yield 3.23% https://www.wsj.com/market-data/bonds/tips https://fred.stlouisfed.org/series/DGS3. This implies inflation the market expects inflation to average 2.89%, and your 12% nominal return would be 9% real return, higher than the US stock market has averaged over the last century.
Https://fred.stlouisfed.org/series/DGS2 Currently the market thinks that the interest rate will average 3.23 in the next 2 years. If you think that the fed will lower rates, then I wold buy TLT. If you think that the fed will raise rates more than that (fe cause of inflation), then I wouldnt buy TLT.
[https://fred.stlouisfed.org/series/DGS10](https://fred.stlouisfed.org/series/DGS10) 10s have already started rallying in anticipation of fed rate **cuts**. markets are forward looking.
Thanks! I also have 10% DGS in there. I’ve been keeping my eye on AVES as a replacement, but it is a much newer ETF. What do you think?
Anybody else vibing on emerging market small cap value? I have a thumb on the scale in that direction, mostly on the tails of GMO's 7 year asset class forecasts. DGS seems to be the best one-shot exposure I have found. Also down almost 20% from highs. SEC 30 day yield of 4.61%
There is no way to get extra return without risk. The converse is NOT true. You can take uncompensated risk by not diversifying for example. I personally seek larger compensated returns by adding risk from small cap and value ETFs. Historically small cap and value have outperformed large cap and growth due to the added compensated risk factors. I use ADVANTIS US SMALL CAP VALUE (AVUV), ADVANTIS INTERNATIONAL SMALL CAP VALUE (AVDV), and Wisdom tree emerging markets small cap dividend fund (DGS). Used in conjunction with VTI you will have a high risk high reward portfolio. I would stay away from leveraged ETFs as they are not intended as long term holdings. Sequence risk is the big issue. Historically if you invested in TQQQ after 5+ year bull markets you would have lost money. Look at the backtest. [QQQ backtest](https://www.optimizedportfolio.com/tqqq/)https://www.optimizedportfolio.com/tqqq/
you simpleton this is the superior portfolio 30/30/10/10/10/10, VOO + AVUV + AVDV + VEA + VWO + DGS
22yo with $16400 in VOO, VEA, DGS, AVUV, AVDV and VWO, down to 14000 now. I know I should think long term but this hurts :(
22yo with $16400 in VOO, VEA, DGS, AVUV, AVDV and VWO, down to 14000 now. I know I should think long term but this hurts :(