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Re: Portfolio Withdrawal 4% rate with Ceiling and Floor

I think you have it reversed Alan. The idea is to take no more than 5% when the market has done badly - and no less than 2-1/2% if the market has done well.

In practice, RMDs may force larger withdrawals, but the excess can be invested in a taxable account.

Dale
by Dale_G
Mon Jul 21, 2014 9:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Withdrawal 4% rate with Ceiling and Floor
Replies: 8
Views: 592

Re: Advice Needed on Transitioning to DIY Passive Portfolio

It doesn't make much sense to dollar cost average with investment proceeds that turned into cash simply because you moved to a different provider.

But if you insist on dollar cost averaging, I'd suggest 50% tomorrow and the other 50% on the day after tomorrow.

Dale
by Dale_G
Mon Jul 21, 2014 9:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 56
Views: 5242

Re: Do you "Tax Adjust" your Asset Allocation (Pre vs Roth,

In my case "tax adjustment" doesn't amount to a whole lot from the risk perspective. My equity allocation is 62.7% without any tax adjustment, and 69.7% after tax adjustment. The fly in the ointment however, is that tax adjustment also accounts for capital gains in the taxable account. Und...
by Dale_G
Mon Jul 21, 2014 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Do you "Tax Adjust" your Asset Allocation (Pre vs Roth, etc)
Replies: 44
Views: 1774

Re: Poll: Has your AA changed in the last 18 months

I am one of the guys people who is becoming more "aggressive". I modified my IPS in January 2013. I've been resetting upper and lower rebalancing bands upward (while taking just a bit out of equities) as the market has risen. The portfolio is at a level that far exceeds anything that I ant...
by Dale_G
Sun Jul 20, 2014 11:22 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Has your AA changed in the last 18 months
Replies: 43
Views: 1787

Re: Momentum Investing ?

MarketWatch senior columnist, Brown noted that she advocates an unconventional strategy FUNDX +1.12% that ignores long-term performance and fee structures , focusing instead on buying the top funds in areas that have shown recent market momentum. So, if Brown is going to ignore long term performanc...
by Dale_G
Sun Jul 20, 2014 3:13 pm
 
Forum: Investing - Theory, News & General
Topic: Momentum Investing ?
Replies: 8
Views: 1140

Re: Total Bond Market vs Muni

And remember that when you take slightly more risk, you are entitled to expect slightly more in returns.

When it comes to bonds, the Boglehead mantra is to avoid risk in bonds. The mantra is false on it's face, but that is the way it goes.

Dale
by Dale_G
Wed Jul 16, 2014 7:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Market vs Muni
Replies: 6
Views: 985

Re: 1035 Conversion -Open New Annuity or Not?

yes, open an new annuity unless the older annuity has some very good living benefits. IMO, if you open new annuity, ladder the purchase by amounts, the fee costs will be the same to you whether 1 large annuity or 4 smaller ones . A amount ladder will allow you to withdraw by the annuity , example 1...
by Dale_G
Wed Jul 16, 2014 5:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: 1035 Conversion -Open New Annuity or Not?
Replies: 7
Views: 703

Re: Some Basic Asset Allocation Advice Please

To keep it simple Mark, when you decide what bond fund you want (and Total Bond Market is a good choice at this point), just call Vanguard and tell them that you want to exchange $xx from your Total Stock Market fund into a new Total Bond Market fund (or whatever bond fund). If you call before 4 pm ...
by Dale_G
Tue Jul 15, 2014 10:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Some Basic Asset Allocation Advice Please
Replies: 12
Views: 1315

Re: 1035 Conversion -Open New Annuity or Not?

I assume you can do the exchange into your present Vanguard VA. A quick call to Vanguard will settle that matter. You should look at your present Vanguard VA to see what the guaranteed interest rate is on annuitization. If yours is an older contract you may find that the guaranteed rate is higher on...
by Dale_G
Tue Jul 15, 2014 10:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: 1035 Conversion -Open New Annuity or Not?
Replies: 7
Views: 703

Re: In a crash, will you re-balance to maintain your target

I think next time I will. Last time I didn't because things were starting to look too blurry and I wanted a floor under that mess. What I did do was max the 401k at the beginning of 2009, all into stocks, which was of course the most rewarding money I ever put in the market. So I wasn't a complete ...
by Dale_G
Tue Jul 15, 2014 12:03 am
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4111

Re: Question about managed account

LetItGrow, your 28 funds are waving a big red flag. Either your advisor is completely clueless or he is attempting to make investing look so complicated that that it is beyond the capability of mere mortals like you to understand. Actually, he is probably very successful in "complicating" ...
by Dale_G
Mon Jul 14, 2014 10:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about managed account
Replies: 17
Views: 1347

Re: In a crash, will you re-balance to maintain your target

In 2008/2007 (retired for 6 years, so no new money) I rebalanced from bonds to equities to the tune of about 4 years of my previous gross salary. It ceased to be fun after a while, but it resulted in some nice tax loss carry forwards :D And no, most of the money didn't go in at the bottom, it went i...
by Dale_G
Mon Jul 14, 2014 8:25 pm
 
Forum: Investing - Theory, News & General
Topic: In a crash, will you re-balance to maintain your target AA?
Replies: 64
Views: 4111

Re: Bubble, Bubble, Toil and Trouble

I guess I am an "Armchair Psychiatrist Bubbler". When I see folks lining up overnight sitting on lawn chairs sidewalks (overnight) waiting for a chance to participate in a lottery to bid on a new condo - or the local news is featuring twenty-somethings as successful day traders, I know a b...
by Dale_G
Mon Jul 07, 2014 6:12 pm
 
Forum: Investing - Theory, News & General
Topic: Bubble, Bubble, Toil and Trouble
Replies: 24
Views: 3539

Re: Bond Distributions

I understand that not all of the NAV depreciation may occur because high coupon bonds may be sold above par as they near maturity. But in my bond spreadsheet, I account for the expected NAV decrease. If interest rates remain the same over the duration of the funds, I am expecting roughly a 6.6% decr...
by Dale_G
Sat Jul 05, 2014 4:30 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Distributions
Replies: 6
Views: 619

Re: Does corporate credit risk add value

One doesn't have to get lucky to do better than market, just follow the (academic) research... Larry I guess all we need to do is to have someone tell us what research to follow, then we will all be rich. It is amazing that most active managers haven't figured this out yet, otherwise they would be ...
by Dale_G
Fri Jul 04, 2014 7:33 pm
 
Forum: Investing - Theory, News & General
Topic: Does corporate credit risk add value
Replies: 71
Views: 4035

Re: The Risk of Short-term Bond Funds

And I suspect some of those who abandoned TBM and even Short Term Investment Grade for Prime MM back in the days of the inverted yield curve, are still sitting in Prime.

My dollar weighted duration is 6.5 years - I wouldn't have it any other way.

Dale
by Dale_G
Wed Jul 02, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10057

Re: Wash Sale Violations: Cap Loss Harvesting Index Fund Bas

The IRS has a lot going on with budget cuts and fighting fraud so I doubt low payoff things like wash sales are high on the priority list. As of year end 2012 the IRS had 97,717 employees. How many might be working on wash sales rules? Just a wild a** guess, more than 2, less than 200. Probably the...
by Dale_G
Fri Jun 27, 2014 12:50 am
 
Forum: Investing - Theory, News & General
Topic: Wash Sale Violations: Cap Loss Harvesting Index Fund Baskets
Replies: 6
Views: 478

Re: Merton: 401(k) retirement plans face crisis

.... snip ... We would probably have to use some standardized retirement age such as the SS retirement age and then generate an income estimate based on the price of either some sort of standardized annuity or else a standardized withdrawal rate like 4%. But the real problem with such an approach i...
by Dale_G
Wed Jun 25, 2014 10:33 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16605

Re: Merton: 401(k) retirement plans face crisis

Hi manwithnoname, You do realize that DFA has been employing this strategy in their defined contribution retirement plan for the last two years, both here in the US and in other countries. BobK Are we talking about the Smartnest software platform developed by Merton and Bodie in 2006 - and sold to ...
by Dale_G
Wed Jun 25, 2014 6:06 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16605

Re: Would you change stock allocation based on market condit

The day bonds yield 5% real - or maybe 4% - or maybe 3%, I will move 90% of my equities to bonds. I will have reduce my stocks by 90% based on market conditions. Please note, I don't ever expect this to happen - as a matter of fact I will be pleased if during my lifetime I ever see an after tax real...
by Dale_G
Sun Jun 22, 2014 9:56 pm
 
Forum: Investing - Theory, News & General
Topic: Would you change stock allocation based on market conditions
Replies: 37
Views: 1759

Re: taxable account purchase- timing taxable distribution?

freckles, The old saying, "Don't buy the dividend", really applies to funds that may pay an annual dividend or a large capital gain distribution. You wouldn't want to buy just before the dividend. But index funds like Total Stock Market and Total International pay quarterly dividends and a...
by Dale_G
Fri Jun 20, 2014 1:39 am
 
Forum: Investing - Help with Personal Investments
Topic: taxable account purchase- timing taxable distribution?
Replies: 4
Views: 582

Re: Poll: Do you receive compensation for financial advice?

I checked "other". I am not a financial professional and receive no compensation for giving any financial advice. But I do advise relatives about investing and financial matters. You could say I have a paltry $55 million under management. I receive no compensation other than knowing I have...
by Dale_G
Tue Jun 17, 2014 7:52 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Do you receive compensation for financial advice?
Replies: 29
Views: 2064

Re: Be Fearful When Others Are Greedy and Greedy When Others

I've been investing since about 1962. I suppose I have seen hundreds of new highs. I am glad I didn't stop investing just because the S&P 500 was at a new high. That said; If you start seeing your local news channel interviewing day traders who quit their day jobs and brag about lighting cigars ...
by Dale_G
Tue Jun 17, 2014 5:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Be Fearful When Others Are Greedy and Greedy When Others Are
Replies: 26
Views: 2762

Re: Advice re: Fixed Annuity Contract

NYC, I ran some crude numbers. Assuming a lump sum 8 years ago and the maximum 4% interest, it appears that your cost cannot be less than $5,000. As dhodson points out the penalty is only assessed on the gains, so the penalty will not be more than $200. You will pay taxes at your ordinary rate on th...
by Dale_G
Tue Jun 17, 2014 10:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Advice re: Fixed Annuity Contract
Replies: 7
Views: 403

Re: Should international travel impact your investments?

I've traveled in about 85 countries. I wouldn't bother traveling there if everything was the same as in the US. But in the early days, it generally felt pretty good to get back home. My impressions from an investment standpoint: Developed countries are... well, developed countries. Small hotel rooms...
by Dale_G
Mon Jun 16, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Should international travel impact your investments?
Replies: 30
Views: 1844

Re: At what point do munis make sense?

In the case of VWITX (Vanguard's Intermediate Term Tax Exempt) the SEC and distribution yields were 1.86% and 3.21% respectively as of May 31. The yield gap was 1.35%. All or almost all of the yield gap must be attributed to the fact that the fund holds bonds that trade at a premium due to their hig...
by Dale_G
Mon Jun 16, 2014 12:51 am
 
Forum: Investing - Theory, News & General
Topic: At what point do munis make sense?
Replies: 65
Views: 5862

Re: IMCA Capital Unsolicited Card Sent?

At least one "business" website lists the address as 3435 Ocean Park BLVD, Suite 107-505, Santa Monica, CA. Google Earth street view shows suite 107 to be occupied by Santa Monica Mailboxes & More as of April 2014. So I guess Imca Capital rents mail boxes - the "More" part mu...
by Dale_G
Sat Jun 14, 2014 12:30 am
 
Forum: Personal Finance (Not Investing)
Topic: IMCA Capital Unsolicited Card Sent?
Replies: 17
Views: 681

Re: The Problem with Market Timing

And for Dale_G: RBDs are announced on the forum when they happen, so that you can hear from timers in real-time. And I haven't seen a RBD since mid-October of 1987. The low for the market though was in early December 1987, so then would have been a better time to buy. Did you buy October 16th (the ...
by Dale_G
Fri Jun 13, 2014 7:44 pm
 
Forum: Investing - Theory, News & General
Topic: The Problem with Market Timing
Replies: 19
Views: 1676

Re: Self Coverage in the Absense of Long Term Care Ins.

1.5 million might be the right number +/- a bunch. But I don't "set aside" anything based on the rather low probability of using up anything like that amount.

Dale
by Dale_G
Fri Jun 13, 2014 5:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Self Coverage in the Absense of Long Term Care Ins.
Replies: 13
Views: 1108

Re: The Problem with Market Timing

Nothing brings out "successful" market timers like a 5 year bull market. I'd like to hear from the timers in real time (not months or years after the fact) when they expect the market to turn down and cash out - and then later, again in real time, when they decide to get back in the market...
by Dale_G
Fri Jun 13, 2014 4:48 pm
 
Forum: Investing - Theory, News & General
Topic: The Problem with Market Timing
Replies: 19
Views: 1676

Re: Young boglehead: Materials science, chemE, or mechE for

The time not wasted was thermodynamics and fluid mechanics, which are increasingly important for sustainability and energy efficiency. L. Ah, yes, thermo and fluids. As an Electrical Engineer, they were probably my most valuable courses. Whenever stuff blows up, I suspect the guy/gal in charge wasn...
by Dale_G
Wed Jun 11, 2014 12:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Young boglehead: Materials science, chemE, or mechE for grad
Replies: 28
Views: 1926

Re: Help me evaluate two different job offers

200 days of travel/yr has to be a real bummer for a family guy - time to move on. Clearly you have to make up your own mind about what is important to you, but it doesn't hurt to get input from those who may been there, done that. I would be somewhat put off by the prospect of a long commute at comp...
by Dale_G
Tue Jun 10, 2014 11:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help me evaluate two different job offers
Replies: 10
Views: 987

Re: Fear of Equities Drives More Investors to Cash

I guess I am an outlier at 0.6% cash. At least only 0.6% of my portfolio is almost guaranteed to lose 2% in purchasing power per year for the foreseeable future. The other 99.4% may lose a whole lot more than 2% in purchasing power per year, but at least the loss is not guaranteed. I can't imagine j...
by Dale_G
Tue Jun 10, 2014 12:23 am
 
Forum: Investing - Theory, News & General
Topic: Fear of Equities Drives More Investors to Cash
Replies: 17
Views: 1580

Re: What's Your up to the minute AA?

Age 77 47.4% domestic equity 15.4% International equity 35.7% bonds - across the yield and credit curves 1.5% cash & metals So, 62.8% equities - or about age -40 on bonds/cash. I still have a tax loss carry-forward from 2008/2009 but (mental accounting) I don't want to use it all up, so I do onl...
by Dale_G
Sun Jun 08, 2014 6:32 pm
 
Forum: Investing - Theory, News & General
Topic: What's Your up to the minute AA?
Replies: 104
Views: 8135

Re: VTI Above $100 - When will it split?

Stock splits made some sense in the old days when it cost a few hundred dollars to trade 100 shares at a broker - and the commission rate was a lot higher for who could only buy "odd lots" of fewer than 100 shares. Splitting shares made it more likely that an investor could buy a "rou...
by Dale_G
Fri Jun 06, 2014 5:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: VTI Above $100 - When will it split?
Replies: 6
Views: 1136

Re: Retirement vs. Non-retirement stash

And the ratio may change one way or the other over time. When I retired in late 2001, the taxable account was 18% of invested assets. 12-1/2 years later, the taxable account is 62% of assets. I didn't do anything on purpose, but the proceeds from RMDs, distributions from a non-qualified account, and...
by Dale_G
Thu Jun 05, 2014 6:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retirement vs. Non-retirement stash
Replies: 37
Views: 2231

Re: Vanguard mobile app deposit limit

The Vanguard hold only applies to removing the money from Vanguard, you can invest the money in a fund if you like.

Dale
by Dale_G
Thu Jun 05, 2014 10:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard mobile app deposit limit
Replies: 1
Views: 204

Re: what to do with Bond dividends

The easy solution is to reinvest all dividends in tax deferred accounts. If you need to rebalance, a simple exchange does the trick. There is no advantage to having dividends sitting around in a money market account waiting for an event that may not occur or does so rarely.

Dale
by Dale_G
Mon Jun 02, 2014 10:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: what to do with Bond dividends
Replies: 8
Views: 734

Re: Keeping up with the neighbors and Balance

Stemikger, as others have said, balance is the key. In your post you indicated that you are focused on saving, but you didn't provide any info about present expenses, or the size of your retirement nest egg. That's okay, but that is what you have to look at. If you are reasonably on target to fund r...
by Dale_G
Mon Jun 02, 2014 4:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Keeping up with the neighbors and Balance
Replies: 95
Views: 9666

Re: Garden 2014

I've been picking tomatoes, peppers, beans and cukes for about a month. I put in some more a week ago, but I have my doubts that the tomatoes will set fruit. Tomatoes don't normally set fruit if night time temperatures exceed 73 degrees. We'll see how it goes. I am a transplanted Yankee/buckeye and ...
by Dale_G
Sun Jun 01, 2014 6:01 pm
 
Forum: Personal Consumer Issues
Topic: Garden 2014
Replies: 46
Views: 4410

Re: Bond funds/ETFs - any real or nominal capital gain?

Inflation is always say 3% and real GDP growth 2% on top of that. The 1.5% yield/dividend of bond fund is taken out each period and spent on something extremely dull. If you spend $100 to buy 1 unit of the bond fund at year 0, what is the price of the fund and what is your investment worth at year ...
by Dale_G
Sat May 31, 2014 11:27 pm
 
Forum: Investing - Theory, News & General
Topic: Bond funds/ETFs - any real or nominal capital gain?
Replies: 4
Views: 606

Re: This market is a snoozer, do you like it?

I didn't answer the poll. Despite my tag line, "volatility is my friend", I didn't enjoy 1973/1974, 1987, 2001/2002 or 2008/2009. Neither do I take much pleasure in trending markets - up or down. Maybe I am jaded, the market gives what it gives. Treating investments as a business matter el...
by Dale_G
Sat May 31, 2014 11:05 pm
 
Forum: Investing - Theory, News & General
Topic: This market is a snoozer, do you like it?
Replies: 45
Views: 4516

Re: Getting out of large student loan debt

I agree with others, you are taking a speculative risk with the rental property. Those who speculated in 2003-2008 thought they would be in fat city too, but that was not to be. Maybe this time it is different, maybe not, but the rental property is a serious risk. You have a high potential family in...
by Dale_G
Sat May 31, 2014 6:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Getting out of large student loan debt
Replies: 45
Views: 3508

Re: Back to Chasing Bonds

"Investors are back to doing what they do best this month – running after the thing that’s getting away from them, regardless of whether or not it’s in their best economic interest to do so." Note: Richard is really quoting the ML blurb :D Or maybe they are just rebalancing out of equitie...
by Dale_G
Fri May 30, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Back to Chasing Bonds
Replies: 3
Views: 872

Re: IRA Withdrawal/Tax Question

Did you owe taxes or get a refund for 2013? Will you earn about the same amount of money this year? There are a lot of little details, but basically you will not owe penalties or interest unless you end up owing more than $1,000 at tax time.

Dale
by Dale_G
Thu May 29, 2014 5:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA Withdrawal/Tax Question
Replies: 9
Views: 716

Re: Help with elderly portfolio -- nearing end of draw down

I see no justification for a fixed term immediate annuity. In Sheepdog's example (with April rates) you give the insurance company $100,000, and over the next five years they return monthly payments totaling $100,740 (payments from fixed term annuities stop at the end of the term). I didn't compute ...
by Dale_G
Tue May 27, 2014 11:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with elderly portfolio -- nearing end of draw down
Replies: 25
Views: 1980

Re: How much house should I buy? (young person with many ass

I wouldn't buy a house at all, as others have said. A house when you're single and 25 is a big boat anchor. Keep your load light. Save/invest for another five years and re-assess at age 30. I disagree. Pat wants to buy a house and has done some cost benefit analysis. There are a lot of anchors in l...
by Dale_G
Thu May 22, 2014 11:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: How much house should I buy? (young person with many assets)
Replies: 71
Views: 5468

Re: How much house should I buy? (young person with many ass

Jeez, what a bunch of grinches :annoyed Pat, if you want a modest house, go ahead and buy it. And if you take the down payment from the IRA (take enough to pay the taxes too) that is just fine. Someone probably left the money to you because they thought you would get more joy from it than they would...
by Dale_G
Thu May 22, 2014 11:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: How much house should I buy? (young person with many assets)
Replies: 71
Views: 5468

Re: What do you think of this portfolio?

The portfolio is fine assuming it matches your need and risk profile. Back testing to 1972 is more problematic since most of the funds didn't exist. In particular, someone had to make up, create or guess what the return of Short Term TIPS would have been. In addition, assuming the asset classes had ...
by Dale_G
Thu May 22, 2014 12:12 pm
 
Forum: Investing - Theory, News & General
Topic: What do you think of this portfolio?
Replies: 17
Views: 1324

Re: We won best paper from S&P SPIVA worldwide!

Terrific - and in keeping with what we have come to expect from you Rick. You have now set an even higher hurdle. :sharebeer

Dale
by Dale_G
Thu May 22, 2014 11:56 am
 
Forum: Investing - Theory, News & General
Topic: We won best paper from S&P SPIVA worldwide!
Replies: 39
Views: 3028
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