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Re: I/EE Bonds as tax advantaged space expansion

One thing to keep in mind is that I-bonds and EE bonds will stop paying interest after 30 years. If you are 24 now, that means that you will have to pay taxes on them when you are 54. Which is probably going to be your peak earning period when your tax bracket is the highest.
by Chan_va
Tue Aug 26, 2014 3:01 pm
 
Forum: Investing - Theory, News & General
Topic: I/EE Bonds as tax advantaged space expansion
Replies: 10
Views: 668

Re: Telling my friends I paid off my houses was a mistake.

If all they do is mention casually every few months or so that you should buy a boat - I don't see what the problem is. They have their point of view, and you have yours. Time will tell whose is right. No reason to get worked up about it.
by Chan_va
Mon Aug 25, 2014 1:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Telling my friends I paid off my house was a mistake.
Replies: 56
Views: 7386

Re: Changing AA from 90/10 to 80/20

Why did you choose 90-10 a year ago, and what has changed in the past year to cause you to move to 80-20?

No right or wrong answer here, just make sure you are making the change for the right reasons.
by Chan_va
Mon Aug 25, 2014 12:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Changing AA from 90/10 to 80/20
Replies: 5
Views: 779

Re: Is the Aggregate Index Too Heavy in Treasuries?

...Now it's another matter that TBM does not come close to representing the whole fixed income market... I believe it comes reasonably close to representing the whole investment grade fixed income market, which is what it bills itself as doing: This fund is designed to provide broad exposure to U.S...
by Chan_va
Fri Aug 22, 2014 8:58 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 2779

Re: Is the Aggregate Index Too Heavy in Treasuries?

Anyway IMO TBM funds are a dog's breakfast for which I don't understand the appeal, once and if one accepts that 'own the whole market' has less significance in fixed income than equity. Interesting. Why do you believe that owning the market is less important in fixed income? The market decides the...
by Chan_va
Fri Aug 22, 2014 8:39 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 2779

Re: Is the Aggregate Index Too Heavy in Treasuries?

Johno wrote:
Anyway IMO TBM funds are a dog's breakfast for which I don't understand the appeal, once and if one accepts that 'own the whole market' has less significance in fixed income than equity.


Interesting. Why do you believe that owning the market is less important in fixed income?
by Chan_va
Fri Aug 22, 2014 8:17 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 2779

Re: A tax-deferred space dilemma

All other things being equal, there are only 2 numbers that matter - your current tax bracket and the tax bracket at withdrawal. Here is how I might go about it 1. Determine how you want to balance current vs. future enjoyment. I personally might take 25% of the bonus (post tax) now and enjoy a nice...
by Chan_va
Fri Aug 22, 2014 3:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: A tax-deferred space dilemma
Replies: 5
Views: 563

Re: Is the Aggregate Index Too Heavy in Treasuries?

Here is a chart that shows you the effect of convexity. Start with the same duration for treasuries and GNMA's, but as interest rates change, notice how much more volatile the GNMA duration is due to negative convexity. However, I don't believe that this is a reason to avoid agency or callable bonds...
by Chan_va
Fri Aug 22, 2014 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: Is the Aggregate Index Too Heavy in Treasuries?
Replies: 63
Views: 2779

Re: HELOC + Margin = $200k to play with

Shoeshine boy indicator is flashing red.
by Chan_va
Fri Aug 22, 2014 10:52 am
 
Forum: Investing - Help with Personal Investments
Topic: HELOC + Margin = $200k to play with
Replies: 24
Views: 1743

Re: Vanguard Lost My Account

This is scary stuff. I have long considered not putting all my eggs in one basket, but I think I need to make the move now. Does Fidelity have the same voyager, flagship type account structure I recently endured an experience very similar to that of the OP. I received the same (or at least a very si...
by Chan_va
Wed Aug 20, 2014 3:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard Lost My Account
Replies: 91
Views: 10377

Re: Do interest rates really matter when buying a home?

Yes and No. Things to consider - The nominal interest rate is not as important as the real interest rate. - Prices are not exactly correlated to real interest rates. There is some correlation , but it may take a while to show up, or in some areas never at all - - Somewhere around 40% of homes are bo...
by Chan_va
Wed Aug 20, 2014 11:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Do interest rates really matter when buying a home?
Replies: 8
Views: 809

Re: Best strategy with 401K

Since you have a 401k, your traditional Ira is tax deductible only if your income is below a threshold. I believe it's around 58k for a single filer. If you fall under that, then yes you can do what you are proposing. How high are your Er's in your 401k? If the difference between that and vanguard i...
by Chan_va
Wed Aug 20, 2014 12:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Best strategy with 401K
Replies: 7
Views: 599

Re: How the rich stay/get richer??

OP is getting to the fundamental puzzle of macro economics. Why is there an equity risk premium at all?
by Chan_va
Tue Aug 19, 2014 11:15 pm
 
Forum: Investing - Theory, News & General
Topic: [live off dividends?] How the rich stay/get richer??
Replies: 62
Views: 4875

Re: Bond Allocation - 27 y/o

This has to be a new record. 0.75% allocation to an asset class.

Anything below a 5% allocation is going to be completely insignificant In terms of portfolio returns or volatility. Given your 90-10 split, just go with total bond and forget about it.
by Chan_va
Tue Aug 19, 2014 11:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation - 27 y/o
Replies: 4
Views: 369

Re: Wash D.C. speed camera - how accurate?

I believe that a traffic camera ticket does not count as a "moving violation" and hence does not impact your insurance. Dont think its worth your time to fight it
by Chan_va
Tue Aug 19, 2014 1:38 pm
 
Forum: Personal Consumer Issues
Topic: Wash D.C. speed camera - how accurate?
Replies: 40
Views: 2404

Re: What Book Are You Currently Reading? Part V

Been on a bit of an exploration book kick lately.

Read "Travels in the interior districts of Africa" by Mungo Park. Free on the kindle. Great read as an adventure, but also as a look into the heart of the slave trade.
by Chan_va
Mon Aug 18, 2014 12:33 pm
 
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part V
Replies: 3245
Views: 1102620

Re: Going 60+% international? (US resident)

Search over balancing on the forum. I have tried this in the past and here is the problem. Its relatively easy to say you should be overweight international now, but the issue is, when do you correct back to market weight? I have been able to somewhat time the buy low, but have never timed the sell ...
by Chan_va
Sat Aug 09, 2014 3:01 am
 
Forum: Investing - Theory, News & General
Topic: Going 60+% international? (US resident)
Replies: 83
Views: 5933

Re: Tell Vanguard they need 2 factor authentication

I'm still waiting for some sort of reason besides "it's what everyone else is doing". I would gladly change my mind if I can be shown evidence that Vanguard is experiencing large losses due to fraud because they don't have 2fa. Or if there was strong evidence that A LOT of people want thi...
by Chan_va
Sat Aug 09, 2014 2:43 am
 
Forum: Personal Consumer Issues
Topic: Tell Vanguard they need 2 factor authentication
Replies: 52
Views: 2349

Re: Tell Vanguard they need 2 factor authentication

My parents live in a developing (3rd world) country. Their state owned bank, which 10 years ago, barely had a computer in the branches, now has 2 factor authentication. Vanguard is way behind the times and is seriously exposed. Arguing against 2fa is like arguing against vaccines because it costs mo...
by Chan_va
Sat Aug 09, 2014 2:12 am
 
Forum: Personal Consumer Issues
Topic: Tell Vanguard they need 2 factor authentication
Replies: 52
Views: 2349

Re: Historical question about recessions

For a wider historical perspective, this is a classic - Manias, Panics and Crashes. These have been with us for almost as long as history itself. http://www.amazon.com/Manias-Panics-Crashes-Financial-Investment/dp/0471389455 What I will also caution you is against trying to analyze how Action A led ...
by Chan_va
Fri Aug 08, 2014 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: Historical question about recessions
Replies: 19
Views: 1090

Re: High Yield Bonds - Uncorrelated to Stocks and Bonds?

I don't agree. It's true that HY bonds have a low correlation with stocks, but TBM actually has negative correlations - which is what you want. Especially when stocks zag, HY bonds zag too, only a tad less maybe. Its sort of like going to an ice cream shop, and getting chocolate, vanilla, and chocol...
by Chan_va
Thu Aug 07, 2014 11:35 am
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds - Uncorrelated to Stocks and Bonds?
Replies: 73
Views: 4693

Re: New to taxable accounts

I would still highly recommend treating all your accounts as one bucket. But if you insist on a 60:40 AA in taxable with 100k, here is one simple option Total Stock Market - 40k Total International Stock Market - 20k Intermediate term tax exempt - 40k The ohio tax exempt fund has a higher duration t...
by Chan_va
Tue Aug 05, 2014 3:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: New to taxable accounts
Replies: 19
Views: 1149

Re: New to taxable accounts

megaluke wrote:Chan,
I thought about that but like I said, I already am well diversified in DFA. I have long term, intermediate, short and Tips. I understand by opening new accounts with vanguard that there will probably be some overlap


What is your current asset allocation within your DFA funds?
by Chan_va
Tue Aug 05, 2014 3:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: New to taxable accounts
Replies: 19
Views: 1149

Re: New to taxable accounts

Look at your taxable + tax deferred (IRA's, 401k's) + tax free (Roth) as one big bucket. Decide on an asset allocation, and place bonds for the most part in your tax deferred accounts.
by Chan_va
Tue Aug 05, 2014 3:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: New to taxable accounts
Replies: 19
Views: 1149

Re: Should i Buy a new car

You can get a 3-4 year old CPO BMW for about 30k. (5 series). That's what I did. Mentally prepare yourself for about 1-2k in maintenance / year. To me it's worth it.
by Chan_va
Tue Aug 05, 2014 3:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should i Buy a new car
Replies: 87
Views: 3957

Re: Investing a windfall for an older new investor

Since she doesn't work I am assuming that she will live off this windfall amount, at least till she draws social security. Is that right or are there any other sources of income? Do you have a sense of her annual expenses and how much that is as a percentage of the lump sum?
by Chan_va
Mon Aug 04, 2014 11:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing a windfall for an older new investor
Replies: 10
Views: 534

Re: HSA Strategy for high income earners

I pay for current medical expenses with the hsa. There are very few guarantees in life and I am happy taking the guaranteed tax break now. For me personally, there are too many unknowns to defer hsa spend. Future tax rates, future advances in medicine, market performance etc. I am already taking on ...
by Chan_va
Sat Aug 02, 2014 1:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA Strategy for high income earners
Replies: 79
Views: 5544

Re: Too many goals - where do I start?

Does your employer really match 50% all the way to the max contribution of 17.5k a year?

If so, that is a spectacular deal. Once you have built up an emergency fund, max out your 401k. What investing options do you have in there?
by Chan_va
Sat Aug 02, 2014 12:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Too many goals - where do I start?
Replies: 53
Views: 3878

Re: Risk Averse Start

Dadyson, Welcome to the forum. You have come to the right place. Spend some time reading up on investing and don't feel rushed into making any moves. Start here. http://www.bogleheads.org/wiki/Getting_started Once you are ready, you will get the best responses if your questions are in this format. h...
by Chan_va
Sat Aug 02, 2014 11:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Risk Averse Start
Replies: 28
Views: 2042

Re: Thanks Bogleheads

I remember going to an Amex "financial advisor" about 10 years ago. At the end of the 30 minute "free" consult, I asked about his fee. He wrote the number down on a piece of paper and pushed it across the desk to me - like some sort of secret Swiss bank transaction where we could...
by Chan_va
Fri Aug 01, 2014 12:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Thanks Bogleheads
Replies: 8
Views: 1001

Re: my idea of retirement

Just put everything in a target retirement fund, and forget about it. Focus on raising your income and paying off debt.

Too early to worry about where you will buy a place in retirement etc.
by Chan_va
Fri Aug 01, 2014 10:53 am
 
Forum: Investing - Help with Personal Investments
Topic: my idea of retirement
Replies: 8
Views: 1536

Re: Public Speaking-help

Good luck. I have given lots and lots of presentations, ranging from small groups to 1000's. I am always nervous before a presentation. It gives you the adrenaline edge you need. Here are a couple of tips 1. 5 minutes before the presentation, close your eyes and meditate for 3 minutes 2. 2 minutes b...
by Chan_va
Fri Aug 01, 2014 9:59 am
 
Forum: Personal Consumer Issues
Topic: Public Speaking-help
Replies: 79
Views: 4976

Re: Market not interested in inflation protection?

I don't think the market is not interested in inflation protection. Most people already have 3 forms of inflation indexed assets - Social Security, real estate and equities. I would be loathe to call real estate or equities inflation indexed assets. Social Security is , but keep in mind, that's not...
by Chan_va
Thu Jul 31, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: Market not interested in inflation protection?
Replies: 32
Views: 2261

Re: The Boglehead-prisoner’s dilemma.

Very interesting thought experiment. Here is my solution. This solution relaxes the "trust no one" condition to a "diversify away the trust risk" condition. Which arguably is more Bogleheadish. Assumptions - a 60:40 portfolio (the one the prisoner wants) has an expected nominal r...
by Chan_va
Thu Jul 31, 2014 11:33 am
 
Forum: Investing - Theory, News & General
Topic: The Boglehead-prisoner’s dilemma.
Replies: 33
Views: 5427

Re: Was ready to pull plug on Janus..until

thank you all for your replies. 4 new accounts opened at vanguard, 2 SEPs, 2 Roths. I plan to liquidate all my Janus funds and move to index funds or ETFs(still haven't decided which is best for me...any advice here?) How about an up day now so I can sell feeling good..lol Do you have enough to qua...
by Chan_va
Wed Jul 30, 2014 12:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 4033

Re: Which is King: Income Stream or $ Invested

Is the pension inflation indexed? That makes a big difference in the equation. If not inflation indexed, no brainier - the $4M. Much better chance of keeping up with inflation over the long term. If inflation indexed, then its closer, but still at a 4% rate, I would take my chances with the lump sum...
by Chan_va
Wed Jul 30, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 52
Views: 4581

Re: POLL: Wills vs. Living Trusts

Thanks for the responses all. I thought plain old wills would be much more common, but looks like it's neck and neck with wills + trusts.
by Chan_va
Wed Jul 30, 2014 11:38 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3109

Re: Mid-term, Non-retirement, Taxable Investments

Can you elaborate as to why you have a mid term goal separate from a retirement goal? Are you saving up for some specific event in 10-15 years? Being young I'm just worried about tying up all my assets in accounts I can't access for 35-40 years. No specific purpose in mind. Maybe start a business, ...
by Chan_va
Wed Jul 30, 2014 8:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Mid-term, Non-retirement, Taxable Investments
Replies: 12
Views: 1253

Re: Mid-term, Non-retirement, Taxable Investments

V1RTUS wrote:Anyone else have any thoughts/advice on this plan?


Can you elaborate as to why you have a mid term goal separate from a retirement goal? Are you saving up for some specific event in 10-15 years?
by Chan_va
Tue Jul 29, 2014 10:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Mid-term, Non-retirement, Taxable Investments
Replies: 12
Views: 1253

Re: Dilemma: Get more fuel-efficient car now, or wait?

It almost never makes financial sense to replace a car just for fuel efficiency. The math just doesn't work. Just ride out and replace as needed. Some of what you are missing in your analysis Lost opportunity cost of not investing the 11k Higher insurance and taxes on the newer car Faster depreciati...
by Chan_va
Tue Jul 29, 2014 10:39 pm
 
Forum: Personal Consumer Issues
Topic: Dilemma: Get more fuel-efficient car now, or wait?
Replies: 16
Views: 1319

Re: Market not interested in inflation protection?

I don't think the market is not interested in inflation protection. Most people already have 3 forms of inflation indexed assets - Social Security, real estate and equities. So, what you are saying is that there doesn't seem to be much of a market for riskless inflation protection. I think there are...
by Chan_va
Tue Jul 29, 2014 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: Market not interested in inflation protection?
Replies: 32
Views: 2261

Re: How does car trade-in works?

Here is my strategy. Post the car on craigslist with lots and lots of pictures. Price it at above market value. Allow yourself to be haggled down. It's amazing the number of people out there who don't do the basic research regarding the market price of a used car. And everyone on Craigslist loves th...
by Chan_va
Tue Jul 29, 2014 1:55 pm
 
Forum: Personal Consumer Issues
Topic: How does car trade-in work?
Replies: 71
Views: 4386

Re: Was ready to pull plug on Janus..until

1. Are you calculating annualized returns correctly? The annualized return over 8 years is not the total return/8. 2. Make sure you are comparing to the right index. So, if your Janus fund is a small cap fund - compare to the small cap index etc. But to answer your questions - Yes you have been luck...
by Chan_va
Tue Jul 29, 2014 1:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 4033

Re: Why should stocks go up over the long term?

There are at least 3 ways to answer this question 1. They go up because of fundamentals - productivity increases, earnings reinvestment etc. 2. They go up because they are riskier, and investors demand higher returns for riskier assets 3. They don't - the data presented is just a statistical fluke I...
by Chan_va
Tue Jul 29, 2014 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: Why should stocks go up over the long term?
Replies: 34
Views: 2884

Re: Ultra long term treasuries (50 yr)

The total term risk an investor takes on is what matters. So, for instance, an investor could a small allocation of 50 year treasuries together with a large allocation of cash and have the same risk and expected return as an intermediate bond fund. That's true in terms of interest rate risk, but I ...
by Chan_va
Tue Jul 29, 2014 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: Ultra long term treasuries (50 yr)
Replies: 4
Views: 593

Ultra long term treasuries (50 yr)

The treasury is considering the possibility of issuing ultra long term treasuries - 50 year maturity or more. http://online.wsj.com/articles/u-s-considers-issuing-debt-with-maturities-of-more-than-30-years-1406145447 I can see how this may be interesting to insurers who want to match liabilities, bu...
by Chan_va
Tue Jul 29, 2014 12:19 pm
 
Forum: Investing - Theory, News & General
Topic: Ultra long term treasuries (50 yr)
Replies: 4
Views: 593

Re: Should retirement investors own small/value stocks at al

Do you mean - Should retirees not hold small/value in excess of the market portfolio, or do you mean - Should retirees cut small/value out of their portfolio altogether?
by Chan_va
Tue Jul 29, 2014 10:28 am
 
Forum: Investing - Theory, News & General
Topic: Should retirement investors own small/value stocks at all?
Replies: 36
Views: 2940

Re: bond duration and interest rate risk

Here's at least on of the posts that discusses this issue and the difference between average duration which is impact by call provisions and the average stated maturity which is not. Also contains links to other posts and useful info. Before VG started providing both numbers I starting holding at l...
by Chan_va
Tue Jul 29, 2014 9:49 am
 
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 33
Views: 2854

Re: POLL: Wills vs. Living Trusts

Revocable trusts make sense in some cases, and in some states. However, they're overhyped and oversold, and for most people in most states are unnecessary and tend to be a distraction. Like any tool in the toolbox, we'll use it where it's appropriate, which is some but not most of the time. Asking ...
by Chan_va
Tue Jul 29, 2014 9:11 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3109

POLL: Wills vs. Living Trusts

Folks,

I know this topic has been discussed before, but I don't think we have had a poll on this topic. I am trying to decide between a will and a will+living trust, and wanted to see what's more common out here.
by Chan_va
Tue Jul 29, 2014 8:54 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3109
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