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Re: Does the future of exp ratios factor into your decision?

columbia wrote:My guess is that the Total World fund at Vanguard would have greater investments if they introduced an Admiral fund and lowered the ER to at least .20.
So I'm sure it affects some decisions.

Yeah, but that's an effect based on current costs, not predictions of future costs.
by Aptenodytes
Fri Oct 31, 2014 7:05 am
 
Forum: Investing - Theory, News & General
Topic: Does the future of exp ratios factor into your decision?
Replies: 20
Views: 721

Re: Does the future of exp ratios factor into your decision?

I don't see how this is possibly relevant to any decision-making. A prudent investor will always keep an eye on costs. If a given fund becomes uncompetitive with respect to cost, then you simply switch. There's no need to stick with an expensive fund today because you think it may go down later, or ...
by Aptenodytes
Fri Oct 31, 2014 5:52 am
 
Forum: Investing - Theory, News & General
Topic: Does the future of exp ratios factor into your decision?
Replies: 20
Views: 721

Re: Early SS or Higher IRA Withdrawal??

Unless you are near flat broke it just about always makes sense to delay ss to 70. And that requires elevated withdrawals until age 70. Can't really have one without the other. The annual percentages prior to age 70 are irrelevant. You need to look at the big picture and post-70 equilibrium.
by Aptenodytes
Wed Oct 29, 2014 5:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early SS or Higher IRA Withdrawal??
Replies: 19
Views: 1501

Re: AA canceled flight: premium seat fee not refunded

So I recently had to cancel an American Airlines flight. I had been stupid enough to pay up for a premium seat. Apparently when you cancel a flight, they just make you forfeit that premium seat fee- i.e. you can't carry it over to the flight you rebook. Pretty nice scam on American Airlines part hu...
by Aptenodytes
Wed Oct 29, 2014 11:09 am
 
Forum: Personal Consumer Issues
Topic: canceled flight on AA: premium seat fee not refunded
Replies: 30
Views: 2213

Re: Checking monthly - may not even notice the October "cras

If you had to withdraw money near the bottom of the recent little trough, it could cost some money. I had to: RMD, which had been prescheduled. But I invest for longer term always. RMDs don't require that you remove money from your portfolio, merely that you shift it out of an tax-advantaged accoun...
by Aptenodytes
Wed Oct 29, 2014 11:03 am
 
Forum: Investing - Theory, News & General
Topic: Checking monthly - may not even notice the October "crash"
Replies: 49
Views: 3525

Re: A Challenge for Bogleheads - the market has changed

The second thing I find with this type of approach - there is typically someone telling you (preaching to you even) to buy low and sell high - they will say something like "I do that, it's just smart". My response back is always "are you measuring how you are doing against some sort ...
by Aptenodytes
Wed Oct 29, 2014 10:07 am
 
Forum: Investing - Theory, News & General
Topic: A Challenge for Bogleheads - the market has changed
Replies: 52
Views: 5041

Re: A Challenge for Bogleheads - the market has changed

People such as Schiller, who put great faith in valuations and are far more thoughtful and intelligent than the average commentator, do not advocate this kind of approach. They say it is a good time to invest in stocks, just don't expect returns as high as you'd get with lower valuations. Then there...
by Aptenodytes
Wed Oct 29, 2014 9:12 am
 
Forum: Investing - Theory, News & General
Topic: A Challenge for Bogleheads - the market has changed
Replies: 52
Views: 5041

Re: How much do you keep in bucket one for those that use th

I'm not a personal fan of buckets, but I understand the attraction. Of what I've read, Christine Benz has the most clear-headed exposition of how to do it. See this recent article . What you are calling bucket 1 seems to correspond to what she calls buckets 1 and 2 together. Her guidance on how much...
by Aptenodytes
Wed Oct 29, 2014 8:29 am
 
Forum: Personal Finance (Not Investing)
Topic: How much do you keep in bucket one for those that use the
Replies: 7
Views: 1280

Re: Tilted to SV by mistake, should I TLH out of it?

And this is why I don't like DCA. For all the claimed psychological benefits, I think it's very prone to "revisiting", "waiting until the present conditions blahblah" and in general wallowing in instability. In addition, if the OP is going from single stock to AA using DCA, that...
by Aptenodytes
Tue Oct 28, 2014 3:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tilted to SV by mistake, should I TLH out of it?
Replies: 37
Views: 1664

Re: Tilted to SV by mistake, should I TLH out of it?

If you are still worrying about how you will react - you need to add enough bonds to make your portfolio conservative enough that you are sure you WILL NOT react. Make it very conservative and see how you react to market pullbacks. If you are okay through a market pullback or 2 - then maybe - maybe...
by Aptenodytes
Tue Oct 28, 2014 12:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tilted to SV by mistake, should I TLH out of it?
Replies: 37
Views: 1664

Re: Ham and Egger's Theory? [Buy Whatever Cap Size is laggin

HamNEgg, Look up something called the "Dogs of the Dow" strategy. It involved buying the worst performing stocks in the Dow every year. It worked till it didn't. This strategy and variations have been tried before. The Achilles heel of all these is that there is no natural "timeframe...
by Aptenodytes
Tue Oct 28, 2014 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Ham and Egger's Theory? [Buy Whatever Cap Size is lagging) ]
Replies: 38
Views: 3059

Re: Should I buy more REITs?

backpacker wrote:Go big or go home. If you think that a dedicated REIT allocation makes sense, hold enough to make a difference. David Swenson is awfully smart and suggests 20%.

Is Swenson still recommending 20% in REITs, even given their very high valuations?
by Aptenodytes
Tue Oct 28, 2014 10:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I buy more REITs?
Replies: 44
Views: 4078

Re: Tilted to SV by mistake, should I TLH out of it?

I never look at the comparative returns of my asset categories. You shouldn't either. They simply aren't relevant to any possible decision you could make. They can do harm, however. As Larry says, Don't confuse strategy and outcome . Whether your decision to tilt to small-value was wise or not has a...
by Aptenodytes
Tue Oct 28, 2014 8:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Tilted to SV by mistake, should I TLH out of it?
Replies: 37
Views: 1664

Re: What funds are negatively correlated with stocks?

Long-term U.S. treasuries do the job. Do yourself a favor and plot a chart of TLT vs VTI and see the power of negative correlation. Those are far from negatively correlated, but I see the benefits. In fact, it is the lack of negative correlation that brings the benefits -- you want the two assets t...
by Aptenodytes
Mon Oct 27, 2014 1:25 pm
 
Forum: Investing - Theory, News & General
Topic: What funds are negatively correlated with stocks?
Replies: 24
Views: 2910

Re: Bucket Approach Redux

I've been practicing a sort of bucket approach, adapted to the work of William Sharpe on lockbox investing and withdrawals. I divided my portfolio into 5-year increments and invested them in TR funds based on withdrawal ages for me. Then every five years I'll have a fund invested in the TR income f...
by Aptenodytes
Mon Oct 27, 2014 8:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Bucket Approach Redux
Replies: 35
Views: 2567

Re: What funds are negatively correlated with stocks?

We haven't heard from the OP, but I'm thinking they used the word "hedge" to mean "diversify."

I don't think the post was about hedging at all.
by Aptenodytes
Mon Oct 27, 2014 6:55 am
 
Forum: Investing - Theory, News & General
Topic: What funds are negatively correlated with stocks?
Replies: 24
Views: 2910

Re: Asset allocation in inherited IRA's

Excellent points. Thanks for the responses. There's always the possibility of early retirement (voluntary or involuntary) or disability so I think I'll stay heavy in stocks in case I need the rmd's to make it to 59 1/2. I'll have taxable accounts as a back up. You are allowed to take more than the ...
by Aptenodytes
Mon Oct 27, 2014 6:49 am
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocation in inherited IRA's
Replies: 11
Views: 704

Re: Global Equity Markets — 40 Years of Evolution at a Glanc

And there is something funny about those charts, or at least in disagreement with Vanguard's, data, because according to Vanguard, the U.S. share of global capitalization was about 66% of global in 1970. Their chart only goes to 2011 but it is currently very close to 50%. So, the area of the U.S. c...
by Aptenodytes
Sun Oct 26, 2014 8:14 pm
 
Forum: Investing - Theory, News & General
Topic: Global Equity Markets — 40 Years of Evolution at a Glance
Replies: 10
Views: 1274

Re: What funds are negatively correlated with stocks?

True, short etf's are negatively correlated with total market. No denying that. That doesn't make them a good investment though. Short and/or leveraged ETFs decay to 0. It's a mathematical property - hard to explain here. Long bonds have a reasonably strong negative correlation with total stock mar...
by Aptenodytes
Sun Oct 26, 2014 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: What funds are negatively correlated with stocks?
Replies: 24
Views: 2910

Re: DCA deposits can raise red flags with the IRS

The problem related in the article stemmed from superstitious fear of banks. The guy cashed his paychecks and hoarded cash savings for a while. The problem arose when he finally decided to put the cash in the bank. He then compounded the problem with a superstitious fear of government forms. DCA isn...
by Aptenodytes
Sun Oct 26, 2014 5:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: DCA deposits can raise red flags with the IRS
Replies: 7
Views: 1451

Re: Ham and Egger's Theory? [Buy Whatever Cap Size is laggin

Trends in performance are almost irrelevant. Better to do as Livesoft says and just adopt an AA and rebalance. If you really want to adjust your allocations based on shifts in the market, I think most people would suggest using valuations as your guide, not rates of return. Fluctuations in rates of ...
by Aptenodytes
Sun Oct 26, 2014 2:15 pm
 
Forum: Investing - Theory, News & General
Topic: Ham and Egger's Theory? [Buy Whatever Cap Size is lagging) ]
Replies: 38
Views: 3059

Re: Bucket Approach Redux

I read the Benz article on buckets. It seems to be a variant of the dividend illusion. The cash bucket is kept full using dividends; when dividends aren't enough to keep the cash bucket full equities are sold. The comfort probably derives from an interaction of two mental accounting fallacies -- spe...
by Aptenodytes
Sun Oct 26, 2014 9:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Bucket Approach Redux
Replies: 35
Views: 2567

Re: Bucket Approach Redux

I'm with Nisi on this. Buckets provide a comforting mental crutch when markets are rising or stable. They do so at the price of being underinvested in the market. The price may be a bargain for people who get a lot of value from that comfort-level. But when markets are falling or highly volatile, th...
by Aptenodytes
Sun Oct 26, 2014 9:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Bucket Approach Redux
Replies: 35
Views: 2567

Re: HSA account with the lowest cost: HSA bank or Vanguard?

Sorry to hijack the thread, but this seemed somewhat relevant and I'm not sure if this warrants a new thread as it's a simple question. For HSA Administrators (those who have it), how do you purchase funds? I have money in the debit portion, but the website is not very user friendly. I thought 'Exc...
by Aptenodytes
Sun Oct 26, 2014 9:08 am
 
Forum: Personal Finance (Not Investing)
Topic: HSA account with the lowest cost: HSA bank or Vanguard?
Replies: 16
Views: 1803

Re: investing during retirment

Cash buffer makes a lot of sense I have never thought of that , thank you. Maybe the wrong thread, but how did retirees handle the draw down in 2009 or so , it took me maybe 4 years to break even with my vanguard funds, so I would need an extra large buffer to handle those large down years Thank yo...
by Aptenodytes
Thu Oct 23, 2014 1:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: investing during retirment
Replies: 20
Views: 2036

Re: How to buy oil in the stock market?

At the risk of appearing overly snarky, do you really think that someone who doesn't know how to look things up on Google should be doing something like speculating on the direction of oil prices? I don't think it's that easy, at least if the goal is to "invest" in the spot price. Nothing...
by Aptenodytes
Thu Oct 23, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: How to buy oil in the stock market?
Replies: 32
Views: 2047

Re: investing during retirment

I'm not aware of any limits on how often or how much you can withdraw from a Vanguard fund. If you want feedback on your post-retirement AA you'll need to post the AA and indicate what your concerns are. If you want advice on how best to get money from your portfolio into your bank account, you'll n...
by Aptenodytes
Thu Oct 23, 2014 12:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: investing during retirment
Replies: 20
Views: 2036

Re: Loaning money to invest?

A mega-wealthy person with income security is probably fine doing what you propose. Around $500K in income, no debt, I see no problem paying 3% to invest for the long term. I also see no need to do so, but if you like to aim for the stars, why not. Unless you are going through mental accounting gyra...
by Aptenodytes
Thu Oct 23, 2014 11:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Loaning money to invest?
Replies: 13
Views: 1439

Re: How to buy oil in the stock market?

At the risk of appearing overly snarky, do you really think that someone who doesn't know how to look things up on Google should be doing something like speculating on the direction of oil prices?
by Aptenodytes
Thu Oct 23, 2014 11:05 am
 
Forum: Investing - Theory, News & General
Topic: How to buy oil in the stock market?
Replies: 32
Views: 2047

Re: Electricity Adaptor for Europe

Camera and laptop power supplies will run on 220v. You just need the plug converters.
by Aptenodytes
Tue Oct 21, 2014 12:27 pm
 
Forum: Personal Consumer Issues
Topic: Electricity Adaptor for Europe
Replies: 10
Views: 641

Re: Help me choose... [Retirement withdrawal strategy]

You seem to commingling AA and withdrawal questions, but not consistently. I suggest you sharpen your questions to help clarify what you need to decide. Regarding the AA, high SPIAs mean you probably want a higher stock percentage to offset inflation risk, compared to what you'd want without the SPI...
by Aptenodytes
Mon Oct 20, 2014 11:46 am
 
Forum: Personal Finance (Not Investing)
Topic: Help me choose... [Retirement withdrawal strategy]
Replies: 12
Views: 1278

Re: Why do people use age instead of life expectancy?

Professor Emeritus, I'm not a distinguished former professor. I'm just a simple guy holding an eight-figure portfolio. My best advice to you on this particular argument: Quit while you're behind. Dognose, you must be more observant than I am -- I can't tell what the OP is advocating for, so I can't...
by Aptenodytes
Mon Oct 20, 2014 9:45 am
 
Forum: Investing - Theory, News & General
Topic: Why do people use age instead of life expectancy?
Replies: 43
Views: 2921

Re: Individual Bonds versus Bond Funds - Again

Hi kenner, This excerpt, that the authors states without explanation, counters your argument. Depending on how significant the redemptions are, they may have to sell off their highest-yielding bonds and replace them with those offering a lower yield, or assume more risk to obtain the same return. I...
by Aptenodytes
Mon Oct 20, 2014 9:11 am
 
Forum: Investing - Theory, News & General
Topic: Individual Bonds versus Bond Funds - Again
Replies: 17
Views: 1238

Re: Individual Bonds versus Bond Funds - Again

The article seemed wrong-headed to me. + it argues that the scenario to worry about is rates rising, shareholders divesting, fund managers selling high-rate bonds to meet liquidity needs, lowering average rate of the remaining holdings. Frankly, this seems farfetched to me. For the typical funds tha...
by Aptenodytes
Mon Oct 20, 2014 8:32 am
 
Forum: Investing - Theory, News & General
Topic: Individual Bonds versus Bond Funds - Again
Replies: 17
Views: 1238

Re: Help: missed the deadline for an inherited IRA, what nex

You probably need a qualified professional to sort this out with you; some members of this forum are so qualified and might guide you. Perhaps with some hand-holding you can DIY, but inherited IRAs can be complicated and you are violation of IRS rules to boot so you need to seek out a favorable reso...
by Aptenodytes
Sun Oct 19, 2014 10:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help: missed the deadline for an inherited IRA, what next?
Replies: 6
Views: 690

Re: How does one hedge against deflation?

Some people are recommending getting rid of your personal debt, but that's a bad hedge. When deflation occurs, people with debt will suffer, but it doesn't follow that during current conditions someone wanting to protect against the possibility of deflation should eliminate debt. A hedge is somethin...
by Aptenodytes
Sun Oct 19, 2014 6:16 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 52
Views: 3874

Re: WSJ's Jon Clements: "How to Make Your Savings Outlive Yo

This Web site seems to calculate, every month, an optimal allocation of TIPS ladders and DIAs consistent with the idea; the allocation varies according to market conditions. At present they recommend, for someone age 65, to use 15% of the portfolio to buy a DIA that will start generating income at ...
by Aptenodytes
Sun Oct 19, 2014 5:56 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ's Jon Clements: "How to Make Your Savings Outlive You"
Replies: 14
Views: 2838

Re: WSJ's Jon Clements: "How to Make Your Savings Outlive Yo

Thanks to all for the input. Thanks especially to Aptenodytes for the link to the paper and your step-by-step summary. Having now read the paper I understand their annual calculation but I did not find any suggestion of putting (exactly) "25%" of assets toward a longevity annuity. Guess t...
by Aptenodytes
Sun Oct 19, 2014 5:51 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ's Jon Clements: "How to Make Your Savings Outlive You"
Replies: 14
Views: 2838

Re: WSJ's Jon Clements: "How to Make Your Savings Outlive Yo

P.S. We spend our working lives intuitively adjusting our spending to our somewhat variable and unpredictable income. Nobody ever suggests running a Monte Carlo analysis of one's future earnings. Nobody ever suggests that your spending at age 25 should be governed by statistical projections of your...
by Aptenodytes
Sun Oct 19, 2014 5:39 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ's Jon Clements: "How to Make Your Savings Outlive You"
Replies: 14
Views: 2838

Re: WSJ's Jon Clements: "How to Make Your Savings Outlive Yo

OK, I've read the white paper. It is highly repetitive and wordy. Here's the gist. 1) The right way to think of the sustainable withdrawal problem is to conceptualize the retirement portfolio as an annuity, whether or not any literal annuities are involved. They call this a virtual annuity approach ...
by Aptenodytes
Sun Oct 19, 2014 4:31 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ's Jon Clements: "How to Make Your Savings Outlive You"
Replies: 14
Views: 2838

Re: WSJ's Jon Clements: "How to Make Your Savings Outlive Yo

I read Clements's article too and found it frustratingly devoid of specifics, so decided to look up the Siegel and Waring paper because I was curious what the heck the point was. This paper seems to explain things.
by Aptenodytes
Sun Oct 19, 2014 11:01 am
 
Forum: Investing - Theory, News & General
Topic: WSJ's Jon Clements: "How to Make Your Savings Outlive You"
Replies: 14
Views: 2838

Re: Can I reduce my *retirement* savings rate?

I have a quite detailed Excel Notebook which is about 10 sheets deep and includes budgets for 3 different stages in life as well as estimations of household costs, life insurance needs, etc. I use conservative ( I think), but constant, projections of 3% real growth before 67 and 2% real growth afte...
by Aptenodytes
Fri Oct 17, 2014 11:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Can I reduce my *retirement* savings rate?
Replies: 35
Views: 3335

Re: Can I reduce my *retirement* savings rate?

I think you may be a victim of bucket thinking. You seem to be complicating things by putting artificial constraints around different sources of money. Focus on income and expenses. 1) First figure out how much you want to end up with when you retire. Call it your retirement portfolio goal. 2) Then ...
by Aptenodytes
Fri Oct 17, 2014 11:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Can I reduce my *retirement* savings rate?
Replies: 35
Views: 3335

Re: Can I reduce my *retirement* savings rate?

It doesn't seem complicated. Lots of couples have only one bread-winner, and few of them have $550k in taxable accounts in their 30s. Your situation is really completely generic, not special. You have income, you have savings, you have expenses, you have retirement goals, you need to explore if ever...
by Aptenodytes
Fri Oct 17, 2014 11:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Can I reduce my *retirement* savings rate?
Replies: 35
Views: 3335

Re: Replacing primary sump pump - how difficult

I don't find it hard, but each case is unique and you know yourself best. There are definitely mistakes one could make that would spew water into the basement. My advice is that if you aren't sure, you should hire a handyman or plumber. They can advise on the best capacity. Capacity is determined by...
by Aptenodytes
Fri Oct 17, 2014 7:33 am
 
Forum: Personal Consumer Issues
Topic: Replacing primary sump pump - how difficult
Replies: 18
Views: 1057

Re: Replacement for tinypic?

I like dropbox.
by Aptenodytes
Thu Oct 16, 2014 8:48 pm
 
Forum: Personal Consumer Issues
Topic: Replacement for tinypic?
Replies: 7
Views: 389

Re: Roll Over Old TIAA CREF Account?

I personally don't see the TIAA TREA account as that unique, but I agree that it makes sense to look at the unique accounts there before rolling everything over. I had several old TIAA-CREF accounts and moved them all into Vanguard save the Traditional Annuity deposits. For my money, those are "...
by Aptenodytes
Wed Oct 15, 2014 6:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roll Over Old TIAA CREF Account?
Replies: 15
Views: 777

Re: Hold My Hand - I Am Rebalancing

Thankfully most of my money is spread between mutual funds with Vanguard, Fidelity and a pension plan. All allow me to rebalance quarterly without any fees. If it helps you sleep at night and satisfies your itch, there is no harm rebalancing quarterly as long as the assets are transaction and tax c...
by Aptenodytes
Wed Oct 15, 2014 12:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Hold My Hand - I Am Rebalancing
Replies: 20
Views: 1259

Re: Samsung or LG Washer and Dryers (reliability and repairs

LG and Samsung have the lowest repair frequency among Consumer Reports survey respondents. That said, I think it is naive to believe that the increasing complexity of home appliances does not bring with it a much higher cost of average repair. It is believable to me that newer brands will have fewer...
by Aptenodytes
Wed Oct 15, 2014 11:36 am
 
Forum: Personal Finance (Not Investing)
Topic: Samsung or LG Washer and Dryers (reliability and repairs)
Replies: 23
Views: 878

Re: The Role of Life Expectancy

I take Nisi's view on this question. The practical implication is to have a plan that has a decent chance of getting you to age 105 financially intact. I realize that it is hard to predict so far out, and much of what will determine our security will be out of our hands, but if I have a trajectory t...
by Aptenodytes
Wed Oct 15, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: The Role of Life Expectancy
Replies: 25
Views: 1669
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