Excellent answer for the question about BRK.B. It would be interesting to use it as the large cap value portion of a portfolio, but "you can't buy the past."
I've watched the debates (not just the latest) regarding SCV- it only comes down to two things as far as I can see. The huge range of SCV funds- i.e. AVUV versus a Vanguard SCV for example. And is SCV dead for the future because the world has changed.
Thanks gents for responding to the article. I appreciate your examination and thoughts. With respect to the inherited RothIRA distributions, they are subject to the 10 year RMD’s but they won’t be taxed for the heirs. I’m not a tax expert but that’s what I’ve planned around from the IRS website. Thanks again gents!
Can y'all add best in class ETFs for EM SCV, EM LCV, and EM SC to the EM group? I know y'all don't have that in your portfolio allocations, but I would love to see that information. Thanks for all y'all do!
At least in India - there are no Large Cap Value stocks. They are all growth stocks. the small cap is like micro cap Why do you think AVEM is not enough?
unfortunately there arnt any good options for EM SCV. Ive looked at interviews from avantis where they basically explain how the spread on EM SCV is quite costly. this is due to the low trading volume on these no-name obscure companies. would love to be proven wrong on this. but i think your best bet is either DGS (EM SC Dividend) which happens to score decent on value or AVES which is actually an EM Midcap Value. Would love to here some other options if someone could reply to this comment. i personally just forego emerging markets altogether, begrudgingly due to this lack of availability of EM SCV products
@@yashen12345 I've been watching lots of their videos- as far as I can tell you can diversify in EM as follows, EEMS, AVEM, AVES- maybe that's enough to get you into EM? But I think you're correct regarding EM SCV
Roth IRA has to be withdrawn within 10 years by the heirs. But it’s tax free so no biggie. I would do the tax deferred first if I were trying to preserve capital for heirs, even though your heirs have some restrictions on what they can do if any is left.
I dont recall Rob Berger ever saying he "doesnt believe" in Small cap value anymore. Although he has mentioned several times that hes working to simplify his portfollio. The older he gets, the more comfortable he is just following the market
I didn't go back and listen to what I said but I totally agree that he said he was trying to simplify his portfolio and he wasn't suggesting investors not use it. To be fair, if SCV had lived up to the historic returns Jim would probably have added to the holding at the end of 10 years. His position was only 10% of his portfolio and the return of a 90/10 (S&P 500) over the last 55 years was only .4% more per year. The additional worst drawdown .6%. Taking the small position in SCV out of his portfolio will not likely change his lifestyle. On the other hand, my 2 year old granddaughter's 50% position in SCV (along with 50% in a total market index) would be very different if she decided to go all TMI.
For Roth accounts left to heirs, under the new rules, they will have 10 years to fully empty the account, but they can leave it to grow tax free for the full 10 years and empty it out at the very end. Then they can invest it in a taxable account as they wish, all tax free. That is definitely a better option than bequeathing a taxable account in my opinion, even with the step up in basis.
Regarrding the 2 funds for life over the age of 65 question, wouldn't an investor still have some SCV as part of the TDF? Of course, it's not guaranteed, but I've never seen an indexed TDF that ignored the typical factor tilts, at least to a small degree, like single digit % allocations.
After going through a lot, I realized two things about the stock market: it played a role in the Great Depression, and the quickest way to make a million in the market was to start with two million. Then, just a few years later, the Great Recession hit. Looking back, I wish someone had explained it to me better earlier in life. Having a solid entry and exit strategy is key to succeeding in the stock market.
Exactly, many investors focus solely on the profit side and overlook the fact that the market has its ups and downs. Securing your financial position requires patience and a solid understanding of the market to identify the right profitable stocks to invest in. I made over $260K in profits just in Q4 of 2021. Investing in the stock market is most rewarding when you truly understand how it works.
As Paul always says, recency bias is a major impediment to rational investing. IF you are truly a long term investor (I'm talking decades long time horizon) then the last 10 or 20 years are not relevant. It's all about committing to asset diversity as a long term strategy. If you are too skittish to ignore small cap volatility, IN THE SHORT TERM, this strategy is probably not for you.
@@dlg5485 What's really neat is I bought small positions in stocks I had last year (and sold) for this year and they are already up more than my SCV and International ETF. SCV is starting to come back but for how long? I'll probably sell out of both ETFs and buy more individual stocks. My core S&P holdings are doing well.
Excellent answer for the question about BRK.B. It would be interesting to use it as the large cap value portion of a portfolio, but "you can't buy the past."
Comment for the algorithm as well - Paul is a legend
Always excited for another video from Paul & Co.
I've watched the debates (not just the latest) regarding SCV- it only comes down to two things as far as I can see. The huge range of SCV funds- i.e. AVUV versus a Vanguard SCV for example. And is SCV dead for the future because the world has changed.
Thanks for the great info guys !
Second comment: I have 15% of my total allocation in small cap value and 9% in international value. I am 63.
Thanks gents for responding to the article. I appreciate your examination and thoughts. With respect to the inherited RothIRA distributions, they are subject to the 10 year RMD’s but they won’t be taxed for the heirs. I’m not a tax expert but that’s what I’ve planned around from the IRS website. Thanks again gents!
Comment for the algorithm 🎉
Can y'all add best in class ETFs for EM SCV, EM LCV, and EM SC to the EM group? I know y'all don't have that in your portfolio allocations, but I would love to see that information. Thanks for all y'all do!
At least in India -
there are no Large Cap Value stocks. They are all growth stocks.
the small cap is like micro cap
Why do you think AVEM is not enough?
unfortunately there arnt any good options for EM SCV. Ive looked at interviews from avantis where they basically explain how the spread on EM SCV is quite costly. this is due to the low trading volume on these no-name obscure companies. would love to be proven wrong on this. but i think your best bet is either DGS (EM SC Dividend) which happens to score decent on value or AVES which is actually an EM Midcap Value. Would love to here some other options if someone could reply to this comment.
i personally just forego emerging markets altogether, begrudgingly due to this lack of availability of EM SCV products
@@yashen12345 I've been watching lots of their videos- as far as I can tell you can diversify in EM as follows, EEMS, AVEM, AVES- maybe that's enough to get you into EM? But I think you're correct regarding EM SCV
Roth IRA has to be withdrawn within 10 years by the heirs. But it’s tax free so no biggie. I would do the tax deferred first if I were trying to preserve capital for heirs, even though your heirs have some restrictions on what they can do if any is left.
Exactly so you get tax free growth over those 10 years and you don’t get that in regular brokerage.
I dont recall Rob Berger ever saying he "doesnt believe" in Small cap value anymore. Although he has mentioned several times that hes working to simplify his portfollio. The older he gets, the more comfortable he is just following the market
I didn't go back and listen to what I said but I totally agree that he said he was trying to simplify his portfolio and he wasn't suggesting investors not use it. To be fair, if SCV had lived up to the historic returns Jim would probably have added to the holding at the end of 10 years. His position was only 10% of his portfolio and the return of a 90/10 (S&P 500) over the last 55 years was only .4% more per year. The additional worst drawdown .6%. Taking the small position in SCV out of his portfolio will not likely change his lifestyle. On the other hand, my 2 year old granddaughter's 50% position in SCV (along with 50% in a total market index) would be very different if she decided to go all TMI.
For Roth accounts left to heirs, under the new rules, they will have 10 years to fully empty the account, but they can leave it to grow tax free for the full 10 years and empty it out at the very end. Then they can invest it in a taxable account as they wish, all tax free. That is definitely a better option than bequeathing a taxable account in my opinion, even with the step up in basis.
Regarrding the 2 funds for life over the age of 65 question, wouldn't an investor still have some SCV as part of the TDF? Of course, it's not guaranteed, but I've never seen an indexed TDF that ignored the typical factor tilts, at least to a small degree, like single digit % allocations.
I do like the idea you shared of having a specific minimum of 10% SCV, for example. Just thinking out loud, here.
After going through a lot, I realized two things about the stock market: it played a role in the Great Depression, and the quickest way to make a million in the market was to start with two million. Then, just a few years later, the Great Recession hit. Looking back, I wish someone had explained it to me better earlier in life. Having a solid entry and exit strategy is key to succeeding in the stock market.
There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor.
Exactly, many investors focus solely on the profit side and overlook the fact that the market has its ups and downs. Securing your financial position requires patience and a solid understanding of the market to identify the right profitable stocks to invest in. I made over $260K in profits just in Q4 of 2021. Investing in the stock market is most rewarding when you truly understand how it works.
I really acknowledge your comment, i have been trading stocks for a while now but i have not been able to make much. how do you achieve this feat?
@@EmmaDavis-n6udon’t trade, buy and hold, that’s the message
My small cap value and international ETFs are the only ones in the red right now.
So they're the ones with a higher expected future return 😁
As Paul always says, recency bias is a major impediment to rational investing. IF you are truly a long term investor (I'm talking decades long time horizon) then the last 10 or 20 years are not relevant. It's all about committing to asset diversity as a long term strategy. If you are too skittish to ignore small cap volatility, IN THE SHORT TERM, this strategy is probably not for you.
@@dlg5485 What's really neat is I bought small positions in stocks I had last year (and sold) for this year and they are already up more than my SCV and International ETF. SCV is starting to come back but for how long? I'll probably sell out of both ETFs and buy more individual stocks. My core S&P holdings are doing well.