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Re: Diversification among Bonds?

Here's the deal -- because CDs are so incredibly safe, no risk/reward tradeoffs, then (A) there is a yield difference Y after which the retiree should go all-in in the CD. No Treasuries at all. The Y is very likely less than 1% because it's mostly about liquidity considerations and avoiding hassle, ...
by Dandy
Fri Nov 21, 2014 9:07 am
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 17
Views: 1474

Re: Diversification among Bonds?

There are some fairly entrenched thinking about fixed income and whether or not people will get any benefit from holding other than something like the Total Bond fund. (I'm not a fan of most individual bonds). You are probably unlikely to score major gains through moderate diversification of fixed i...
by Dandy
Wed Nov 19, 2014 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 17
Views: 1474

Re: lock-up for 20 years [20 year CD]

Interesting question. I would answer yes if it was say only 25% of my IRA fixed income. The fact that you have to reinvest the interest is probably a benefit with the likelihood of interest rising before many of the 20 years have passed. That is about $10k/year or $200k in interest paid until maturi...
by Dandy
Wed Nov 19, 2014 9:55 am
 
Forum: Personal Finance (Not Investing)
Topic: lock-up for 20 years [20 year CD]
Replies: 21
Views: 2453

Re: Retiring within 6 months looking for some advice

Your allocation looks fine. I like adding a CD ladder as part of your fixed income allocation (maybe because I have one also?). I see my IRA CD ladder as the safe base of the portfolio which would be liquidated last. Therefore, I have been using VG brokerage CDs purchased easily and with no charge. ...
by Dandy
Wed Nov 19, 2014 9:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Retiring within 6 months looking for some advice
Replies: 14
Views: 2381

Re: I may not make my retirement goals! What to do?

. But current market valuations should not change the OP'S need , ability and willingness to take risk In general I agree. But you really can't say valuations don't matter at all. But, if you are going to take valuations into account it can't be based on feelings. You need some objective measure(s)....
by Dandy
Wed Nov 19, 2014 9:17 am
 
Forum: Investing - Help with Personal Investments
Topic: I may not make my retirement goals! What to do?
Replies: 49
Views: 3306

Re: Diversification among Bonds?

I think bond diversification is often overlooked or unappreciated. I would broaden the discussion to include all fixed income e.g. CDs. It is true that for the most part a good diversified intermediate bond fund will do pretty well - it is kind of the sweet spot - decent yield and not too much durat...
by Dandy
Wed Nov 19, 2014 8:28 am
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 17
Views: 1474

Re: I may not make my retirement goals! What to do?

It is easy to say just do it - much harder when you have to change your plan. If it were me I would probably move to 30% soon and have a plan over the next 2 years of so to get equities up to 35%. Keep in mine when the market is down it isn't so easy to buy equities there is a tendency to not look a...
by Dandy
Wed Nov 19, 2014 7:48 am
 
Forum: Investing - Help with Personal Investments
Topic: I may not make my retirement goals! What to do?
Replies: 49
Views: 3306

Re: How Not to Retire

Wow the man can still write. He captured the dark fears we might imagine if we let our minds go there. I got a taste of this from my parents who lived through the Depression. People standing on the corner selling pencils that had doctorate degrees, the shabby look of the houses since painting was to...
by Dandy
Mon Nov 17, 2014 8:41 am
 
Forum: Personal Finance (Not Investing)
Topic: How Not to Retire
Replies: 67
Views: 6856

Re: VWINX (Wellesley Inc.)

Wellesley is a much loved fund. My favorite "active" fund. It is relatively low cost, not very active and has a great track record for a long term. It is not very diversified -- holding 60 stocks (vs 3700 + for the Total Stock market fund.)While not expensive at 25 bp Expense Ratio compare...
by Dandy
Mon Nov 17, 2014 7:34 am
 
Forum: Investing - Theory, News & General
Topic: VWINX (Wellesley Inc.)
Replies: 44
Views: 4756

Re: Want to add bonds to taxable account.

I use VG's Limited Term Tax Exempt
by Dandy
Sun Nov 16, 2014 2:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Want to add bonds to taxable account.
Replies: 25
Views: 982

Re: "Safe" investment for a retired parent. CD?

VG offers very competitive 5 (2.3%), 7 (2.65%)and 10 yr (3.2%) CDs. It might be worth your while to call Vanguard for help if you are unsure on how to purchase their CDs. Brokerage CDs are different from CDs bought directly at a bank. Some differences: Brokerage CDs 1. No early redemption fee - if y...
by Dandy
Sun Nov 16, 2014 10:21 am
 
Forum: Investing - Theory, News & General
Topic: "Safe" investment for a retired parent. CD?
Replies: 12
Views: 1329

Re: is 3.20% Vanguard brokered CD best deal around?

My IRA 5 yr CD ladder was expanded to buy a VG 7 yr CD at 2.75% 10 yr CD at 3.3? a few months back. The CDs will be the last IRA money that I will use so I'm pretty sure that I won't need to sell before maturity. I'm a little leery of putting much more at 10 yr. When a CD rung comes due I might opt ...
by Dandy
Sun Nov 16, 2014 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: is 3.20% Vanguard brokered CD best deal around?
Replies: 48
Views: 4099

Re: Emergency fund question. please help

I would think through the emergencies you are guarding against, the odd of those emergencies and what resources you have. Most people in the accumulation stage have loss of job as the top emergency they are guarding against. Some analysis: 1. Does your spouse work? 2. Are you job(s) covered by unemp...
by Dandy
Sat Nov 15, 2014 1:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Emergency fund question. please help
Replies: 14
Views: 1781

Re: Speaking with an Aging Relative about care & money

Older, depression era seniors like safety. They are more trustful in banks and insurance companies then most. She may be too old for an annuity (and may not want to part with a large lump if she was eligible). That really leaves CDs and savings for the most part. A friend of mine had a mother in alm...
by Dandy
Sat Nov 15, 2014 9:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Speaking with an Aging Relative about care & money
Replies: 24
Views: 1985

Re: $400 reward to open Chase accounts

$400 is a lot to turn down for an hour or so inconvenience.
Wife and I did that offer from Chase a few years ago. There were no gotchas. closed out the savings account but kept the credit cards. Always look at the details but for us it was not a problem.
by Dandy
Sat Nov 15, 2014 9:36 am
 
Forum: Personal Finance (Not Investing)
Topic: $400 reward to open Chase accounts
Replies: 41
Views: 10252

Re: letting profits run or sell...

What is your plan for these stocks? Do you have a dollar gain that you are looking for? I am not a stock trader. What I have heard is that to be somewhat successful you have to have a good reason to buy and a planned reason to sell. Otherwise you just watch the stock go up and down. A reason to sell...
by Dandy
Sat Nov 15, 2014 9:21 am
 
Forum: Investing - Theory, News & General
Topic: letting profits run or sell...
Replies: 34
Views: 2573

Re: For the next year or so, why shouldn't we be in all-cas

Usually, going 100% in anything is not a good idea. As has been noted, this coming interest rate rise has been coming for several years and is always just down the road. Some day in the near future? rates are bound to rise. When, how much and over what timeframe is very uncertain. Moving to 100% cas...
by Dandy
Sat Nov 15, 2014 8:27 am
 
Forum: Investing - Theory, News & General
Topic: For the next year or so, why shouldn't we be in all-cash?
Replies: 54
Views: 6668

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

I'm not sure what the point of higher "income" for a balanced stock and bond investor with bonds most likely in a 401K or IRA would be. A person who wants to hold nothing but bonds and is locked in on equating interest paid on bonds with income to a cash flow account can do that if they w...
by Dandy
Sat Nov 15, 2014 5:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3577

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

Interesting chart. It may show that the "cost" (much lower income) of using 100% intermediate treasuries for panic protection might be too high. In the recent past the intermediate bonds and treasuries yields were competitive vs now. So, for me it speaks to some diversity on the fixed inco...
by Dandy
Fri Nov 14, 2014 4:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3577

Re: Kitces Sequence of Returns, Bucket Rebalancing

In general re balancing is a good strategy. Actually, having some liquid assets as part of your fixed income retiree allocation makes sense also. There is a quest for "rules" to follow under a wide range of situations. I just don't feel rules really can fit the bill totally. When people ta...
by Dandy
Fri Nov 14, 2014 9:14 am
 
Forum: Investing - Theory, News & General
Topic: Kitces Sequence of Returns, Bucket Rebalancing
Replies: 10
Views: 1504

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

The underlying Treasury bond is safe from default. Don't confuse that with a Treasury Bond Mutual Fund. They are affected by interest rate changes just like other bond funds. They are great to have when there is a flight to quality but less so when the fright that caused the flight to quality passes...
by Dandy
Fri Nov 14, 2014 8:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3577

Re: If your networth is over $3 million, how did you do it?

The USA isn't the only place that is usually lucky to be born in. But, not a bad place for most people when you consider some of the alternatives. Anyone sign up now for Syria? Iraq? Sierra Leone? or Europe, Japan during WWII? Where you are born is just plain Luck where you live can be a different s...
by Dandy
Wed Nov 12, 2014 12:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 244
Views: 22003

Re: If your networth is over $3 million, how did you do it?

I may have introduced Luck into the conversation. The OP wants to know the routes to a nice nest egg. My only point was that I think, for the most part, I did a lot of wise things to get a nice nest egg but luck played a major role. Life luck and investment luck. So, you can do all the right things ...
by Dandy
Wed Nov 12, 2014 10:49 am
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 244
Views: 22003

Re: If your networth is over $3 million, how did you do it?

People often forget how lucky they are. I was born in the USA and had 2 loving parents, lived in a nice house in the safe suburbs, my dad and mom were hard workers that set a good example, they spent money wisely, had their health, had employment until retirement, paid for their children's education...
by Dandy
Wed Nov 12, 2014 9:57 am
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 244
Views: 22003

Re: Assisted Living

I still live in my home for 40 years. I applaud you for making the move before you had to. It is so hard to make those major decisions. There is a tendency to drift until you are forced to decide - usually a bad situation. If you make these decisions before you have to you new environment becomes &q...
by Dandy
Wed Nov 12, 2014 8:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Assisted Living
Replies: 24
Views: 1917

Re: If your networth is over $3 million, how did you do it?

Not at that level but in the ball park. 1. Lived below our means from the start - guess it was my nature 2. Started off with putting $ in Stable Value Fund and built a nice base (SV was paying 10%+ at the start!!) 3. Started investing in equity MFs in early 80's 4. Read 4 Pillars and Boglehead Guide...
by Dandy
Wed Nov 12, 2014 8:06 am
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 244
Views: 22003

Re: EE savings bonds for retirement

You seem to understand the pros and cons (don't forget interest is not subject to state taxes). 20 years is a long time and inflation is a real risk. I wouldn't make this my only approach but for some of your longer term money - why not.
by Dandy
Wed Nov 12, 2014 7:46 am
 
Forum: Investing - Help with Personal Investments
Topic: EE savings bonds for retirement
Replies: 31
Views: 2117

Re: How can I convince my wife to accept investing??

Tough situation. She isn't going to listen to you. So, as I see it there are two choices: 1. Say lets discuss how to save/invest our money with a fee only financial planner. Maybe a 3rd party would have a better chance of helping you both reach an acceptable solution -- and it wouldn't be a win/lose...
by Dandy
Wed Nov 12, 2014 7:38 am
 
Forum: Investing - Help with Personal Investments
Topic: How can I convince my wife to accept investing??
Replies: 54
Views: 4288

Re: Retiring Parents Set in Risky Ways

We are assuming their retirement is at risk if the stock went to zero Not me that is why I started the quoted sentence with IF. [color=#BF0000]If your parents put their retirement at extreme risk and lose -- most children would feel a obligation to provide significant help if they can. [/color] I'm...
by Dandy
Tue Nov 11, 2014 4:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retiring Parents Set in Risky Ways
Replies: 46
Views: 3870

Re: Retiring Parents Set in Risky Ways

It is hard to tell if and if so how much to try to guide adult/independent family members. Of course you can always be totally hands off. But parents and children aren't like friends and neighbors. If your friend messes up his health or finances you have little moral obligation to rescue them. If yo...
by Dandy
Tue Nov 11, 2014 12:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retiring Parents Set in Risky Ways
Replies: 46
Views: 3870

Re: For the next year or so, why shouldn't we be in all-cas

extreme moves don't usually work out well. People could have made the same argument several years ago since interest rates were bound to go up. I have no idea when the rates will go up. I have 1/3 intermediate, 1/3 short term and 1/3 no loss of principal e.g. CDs. I intend to maintain roughly that. ...
by Dandy
Tue Nov 11, 2014 9:14 am
 
Forum: Investing - Theory, News & General
Topic: For the next year or so, why shouldn't we be in all-cash?
Replies: 54
Views: 6668

Re: Retiring Parents Set in Risky Ways

my sympathies. Parents can't usually prevent their children doing dumb things with their money (lives). And children can't usually prevent parents from doing dumb things with their money (or lives). If this investment approach crashes and burns you will be on the hook somewhat to help -- so you do h...
by Dandy
Tue Nov 11, 2014 8:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Retiring Parents Set in Risky Ways
Replies: 46
Views: 3870

Re: Gathering thoughts vs. Market Timing

Mistake - usually when you make such a drastic move based on a feeling it is not wise. You made a few good calls and now with some size to your assets your realize your calls could have been lucky not smart. That is actually pretty wise. Many would think they are smart or get it and continue down th...
by Dandy
Tue Nov 11, 2014 8:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Gathering thoughts vs. Market Timing
Replies: 56
Views: 2782

Re: dad wants to get univ life policy for grandkids

First a Universal Life policy sounds like a terrible idea. Very expensive/complicated despite the "guarantee". There are better options. Second. I agree that too much help for children isn't always a wise idea - they do have to learn how to fend for themselves. This, like most philosophies...
by Dandy
Mon Nov 10, 2014 8:39 am
 
Forum: Personal Finance (Not Investing)
Topic: dad wants to get univ life policy for grandkids
Replies: 21
Views: 2154

Re: Whats the expense ratio of this stable value fund ?

Some products don't have disclosed expense ratios (or make them hard to find). Do you know the expense ratio of a CD? Or a bank money market deposit account? Or an I bond for that matter? Mutual funds have a disadvantage of having to calculate and publish their expenses/expense ratio. I would judge ...
by Dandy
Sun Nov 09, 2014 9:06 am
 
Forum: Investing - Theory, News & General
Topic: Whats the expense ratio of this stable value fund ?
Replies: 16
Views: 1353

Re: Bogle: No TIPS/Inflation Bonds

Why would Jack need inflation protection bonds at his age and wealth? Is there a feeling that there is a risk that he won't be able to fund a happy retirement due to inflation? What he actually owns at his age and wealth isn't a great guide to what most of us should own.
by Dandy
Sun Nov 09, 2014 8:54 am
 
Forum: Investing - Theory, News & General
Topic: Bogle: No TIPS/Inflation Bonds
Replies: 36
Views: 7678

Re: Sunday morning musing - dividend stocks

there are worse things you could have done with the money. The danger is that you get too much of a high with rewarding yourself with individual stocks and that becomes a focus vs the "boring index funds". Getting your kicks out of exciting investments is a gambling high and often very sed...
by Dandy
Sun Nov 09, 2014 8:31 am
 
Forum: Investing - Theory, News & General
Topic: Sunday morning musing - dividend stocks
Replies: 11
Views: 1186

Re: asset allocation question - reason to go > Age in bonds

Age in bonds is a starting point. For people new to investments it makes some sense. Most? theory is that you should have a balanced portfolio and usually a minimum of 20% or so in fixed income. The real guiding approach should be knowing your true/tested risk tolerance and need to take risk. That i...
by Dandy
Sun Nov 09, 2014 8:26 am
 
Forum: Investing - Help with Personal Investments
Topic: asset allocation question - reason to go > Age in bonds
Replies: 22
Views: 2166

Re: brand new investor

Brand new young investors have a special challenge. In theory they could be 100% equities for quite a while. In practice, if they have never experience a 50% or so drop in their portfolio they really don't know their real risk tolerance. Some get burned and never invest in the market again. So, my a...
by Dandy
Sun Nov 09, 2014 8:10 am
 
Forum: Investing - Help with Personal Investments
Topic: brand new investor
Replies: 14
Views: 1303

Re: Just Opened Vanguard - Need Help

90% equities is very aggressive. If your investment experience hasn't been during a major drop in value you may panic. I'm not saying change the fund just make sure you know the risks as well as the rewards. The good news is that Target Date funds automatically get less risky over time.
by Dandy
Sun Nov 09, 2014 8:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Just Opened Vanguard - Need Help
Replies: 4
Views: 743

Re: What is your age and AA?

age 66 - 42% equities 58% fixed income. Can be misleading - there are so many factors that affect my investment allocation. 1. What is my risk tolerance? 2. What is my need to take risk - 3. When do I plan taking SS? 4. What is my current withdrawal rate to fund normal monthly expenses? 4.b. Do I ha...
by Dandy
Sun Nov 09, 2014 7:55 am
 
Forum: Investing - Help with Personal Investments
Topic: What is your age and AA?
Replies: 219
Views: 56109

Re: Asking for opinions.

In your financial position it doesn't matter much. I know it seems as if it matters but your pension and SS cover more than your needs. So, you need to decide what your allocation should be -- conservative because you don't like much risk or are you investing for heirs? Charity?. If you are hesitant...
by Dandy
Sat Nov 08, 2014 4:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asking for opinions.
Replies: 9
Views: 632

Re: 401k stable value fund or switch to IRA bond fund - help

I think you may be putting too much emphasis on current return. Both bond funds in your 401k seem reasonable choices. But moving out of SV to get a better return can be a bit of a mistake as/if/when interest rates rise. Not a disaster but looking at a recent return is not always the best idea. Bond ...
by Dandy
Sat Nov 08, 2014 11:58 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k stable value fund or switch to IRA bond fund - help?
Replies: 9
Views: 846

Re: Poll: What is your Bond Allocation %?

I am 66 and have 58% in fixed income - targeting 60% by age 70 and most likely holding at that level. Do not use age in bonds as a ongoing rule of thumb - nice starting point though.
by Dandy
Sat Nov 08, 2014 8:35 am
 
Forum: Investing - Theory, News & General
Topic: Poll: What is your Bond Allocation %?
Replies: 93
Views: 12047

Re: 401k stable value fund or switch to IRA bond fund - help

I'm a fan of Stable Value funds and regret that I moved all my 401k position since I no longer have access to my old SV fund. You seem to have a diversified fixed income allocation. I would probably move more of your wife's fixed income into her Stable Value fund. I try to have 1/3 of my fixed incom...
by Dandy
Sat Nov 08, 2014 8:17 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k stable value fund or switch to IRA bond fund - help?
Replies: 9
Views: 846

Re: Sitting on the fence to retire...

We are missing a lot of important info. What are your estimated retirement expenses? If you had to cut back how much could you reduce those expenses if you had to? What portion of that has to be funded by your portfolio? What % withdrawal rate would that be? Are you both planning to collect SS at 62...
by Dandy
Thu Nov 06, 2014 8:46 am
 
Forum: Personal Finance (Not Investing)
Topic: Sitting on the fence to retire...
Replies: 21
Views: 1997

Re: Guaranteed Income for Life Feature for Risk Averse Type

In general, anything other than an immediate annuity is a problem. It is usually complicated, with lots of fees and insurance company protections. Most people don't want to part with large sums of money so there are lots of features/riders that are attached to entice buyers to buy. Most times people...
by Dandy
Thu Nov 06, 2014 8:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Guaranteed Income for Life Feature for Risk Averse Type
Replies: 15
Views: 1778

Re: Pension lump sum offer - am I thinking clearly?

I think you have listed the pros and cons well. The weighting of the pros and cons is most important. I normally would opt for the $18600 a year pension vs the lump sum. That assumes you have good health and reasonable life expectancy. I figure you have a decent size portfolio without the lump sum. ...
by Dandy
Thu Nov 06, 2014 8:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Pension lump sum offer - am I thinking clearly?
Replies: 32
Views: 2371

Re: I have seen the enemy and it is me. Reluctance to inves

First I would stop beating yourself up. Your approach has left you in better position than most that did invest. You have a rare and coveted COLA pension that exceeds your current needs and a "fun" part time job that pays about 30k. Your DW spent time with children and you feel that helped...
by Dandy
Wed Nov 05, 2014 5:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: I have seen the enemy and it is me. Reluctance to invest
Replies: 29
Views: 3371

Re: What to do with a million

1. Secure your retirement - Sounds like you may have done that. But "safe" fixed income assets to get you and wife to your SS collection ages and to fund your residual expenses to -- say age 90. Tall order for most. 2. Secure your health. May not take much money but a healthy retirement is...
by Dandy
Mon Nov 03, 2014 7:56 am
 
Forum: Investing - Help with Personal Investments
Topic: What to do with a million
Replies: 26
Views: 3850
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