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Re: Where to keep "emergency fund" and how much to keep in b

Having a home equity line of credit is nice to have to temporarily fund an unusual expense. You then have a low cost option (vs most credit cards) that gives you time to determine the best way of handling the expense. This is an especially good idea if you can open one without paying any fees. Right...
by Dandy
Wed Jul 30, 2014 9:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Where to keep "emergency fund" and how much to keep in bank?
Replies: 19
Views: 2635

Re: Bonds!!??

I am puzzled. If the facts about bonds are so self-evident as nisiprius, Taylor, and many others state, then why do so many Bogleheads (and others) still discuss and explore so many variations of bond & fixed income instruments' ownership? Some reasons: 1. Historic low interest rates have many ...
by Dandy
Wed Jul 30, 2014 6:49 am
 
Forum: Investing - Help with Personal Investments
Topic: Bonds!!??
Replies: 56
Views: 10409

Re: Bonds!!??

I think TIPs and Total Bond are a great combination. I favor also holding a CD ladder (or Stable Value fund). I would allocate money to a CD ladder if you were very sure you wouldn't have to redeem early. Each time a CD "rung" matures you have options as to how to invest - continue the CD ...
by Dandy
Tue Jul 29, 2014 10:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Bonds!!??
Replies: 56
Views: 10409

Re: Annuities and asset allocation

Congrats on having such a nice size portfolio and I think the overall allocation of 40% equities is a good preservative strategy. It seems logical when you use some of your fixed income to buy annuities that you should automatically continue to count them as part of your fixed income allocation. Som...
by Dandy
Tue Jul 29, 2014 8:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Annuities and asset allocation
Replies: 32
Views: 1462

Re: Difference between leasing a car and renting a home

Up front I have never leased a car (or rented a house). I would try to avoid leasing a car for the following reasons: 1. It is hard enough negotiating buying a car and even more with a trade in. Adding in negotiating a lease just keeps tipping the negotiation in the dealer's favor. The down payment,...
by Dandy
Mon Jul 28, 2014 2:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Difference between leasing a car and renting a home
Replies: 7
Views: 974

Re: Does severance pay reduce or relace unemployment benefit

I was forced out of two jobs - both had nice lump sum packages and one with 16 months of payments equal to my monthly salary. Both times I collected unemployment as soon as I applied. I think a lot has to do with how the company that lets you go characterizes the termination and state rules. The com...
by Dandy
Mon Jul 28, 2014 2:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does severance pay reduce or relace unemployment benefits?
Replies: 52
Views: 2977

Re: Should market valuations be completely disregarded?

The market prices in the best info it has at a point in time. Often you can sense a bubble e.g. housing prices, gold prices or even equity prices but the market keeps pricing in growth -- until it doesn't. So, I trust the market most times but we all know it over reacts sometimes greatly. So, when a...
by Dandy
Mon Jul 28, 2014 8:32 am
 
Forum: Investing - Theory, News & General
Topic: Should market valuations be completely disregarded?
Replies: 50
Views: 3802

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

I have pretty well defined equity allocations that I re balance to. That is where the risk is so I stay on top of it. When it comes to fixed income as long as I stay within broad categories I'm not as focused. I made some changes e.g. added some Short Term TIPs rather than adding more to the TIPS fu...
by Dandy
Mon Jul 28, 2014 8:14 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Has your AA changed in the last 18 months
Replies: 58
Views: 3523

Re: Rules of thumb that shouldn't be

Almost by definition a rule of thumb is a lot less than a commandment. You shouldn't base your financial future on a rule of thumb - it is a starting point for most people. It is a general guideline. People who follow a rule of thumb, any rule of thumb, blindly are being foolish or lazy. The problem...
by Dandy
Mon Jul 28, 2014 7:55 am
 
Forum: Investing - Theory, News & General
Topic: Rules of thumb that shouldn't be
Replies: 39
Views: 4148

Re: rewards checking account

I disagree re credit card cash backs. I have received thousands of dollars of refunds while paying off balances each month. Very little or no effort.
by Dandy
Sun Jul 27, 2014 12:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: rewards checking account
Replies: 12
Views: 708

Re: rewards checking account

I keep looking at them but the hassle to move to them and the hassle to meet their swipe requirements hasn't been worth it. Also many don't have convenient locations for branches or ATMs. I move excess cash to an online savings account that pays about .85%. Easy, but not totally satisfying. I also a...
by Dandy
Sun Jul 27, 2014 11:26 am
 
Forum: Personal Finance (Not Investing)
Topic: rewards checking account
Replies: 12
Views: 708

Re: Do Bogleheads Ladder CDs Anymore?

For me the purpose of my fixed income allocation in retirement is for stability and the risk is mostly on the equity side. Cds fit that purpose very well. So, along with Intermediate and short duration bond funds I have a decent allocation to a CD ladder. While working I had access to a good Stable ...
by Dandy
Sun Jul 27, 2014 11:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Do Bogleheads Ladder CDs Anymore?
Replies: 25
Views: 2362

Re: Teacher looking for portfolio advice

I would suggest at least 20% in fixed income even though you feel you have a strong tolerance for risk. I say fixed income to make sure you look at CDs, I bonds, etc. not just bonds/funds. Less volatility and in many cases better performance than an all equity portfolio. As noted pensions are at ris...
by Dandy
Sun Jul 27, 2014 10:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Teacher looking for portfolio advice
Replies: 13
Views: 565

Re: Is stated SEC yield before expense ratio?

Keep in mind that the expense ratio doesn't include all expenses. trading commissions and things like currency hedging aren't included. Another advantage for index funds since they usually have lower turnover than active funds.
by Dandy
Sat Jul 26, 2014 2:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is stated SEC yield before expense ratio?
Replies: 8
Views: 535

Re: Afraid of Bonds

I feel you pain. Being relatively conservative and retired, fixed income is a real concern. The purpose of my fixed income is stability and to take the risk on the equity side. I decided to diversify duration and use a variety of products. I have 1/3 in intermediate funds, 1/3 in short term bond fun...
by Dandy
Sat Jul 26, 2014 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Afraid of Bonds
Replies: 28
Views: 2247

Re: Have a million to transfer, thinking of doing 100% stock

You have the age and risk tolerance to do anything you want. You did the wise thing to get some opinions (not based on commissions) before going ahead. You project that you will almost never need this money. At 20 life has many challenges and risks ahead. You might want to go a little more mainstrea...
by Dandy
Sat Jul 26, 2014 2:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Have a million to transfer, thinking of doing 100% stocks
Replies: 38
Views: 3665

Re: Best way to reach initial allocation in a bull market?

In general lump sum has been a better idea. I am usually in favor of doing some lump and some automated DCA over a short time period like 6-9 months. When markets are at or near historic highs I would do less lump sum and more DCA, if markets had been taken a beating and were down high double digits...
by Dandy
Fri Jul 25, 2014 7:42 am
 
Forum: Investing - Theory, News & General
Topic: Best way to reach initial allocation in a bull market?
Replies: 28
Views: 2526

Re: Reaching Severe Burnout - Can I Scale Back Career?

Been there done that for about a 10 year stretch. That was before everyone had a cell phone and was instructed to be on calls during the weekends even on vacation. Life is short - stress can make it shorter. Kids are precious at every age. Marriage can be busted by stress and depression. I think you...
by Dandy
Thu Jul 24, 2014 5:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reaching Severe Burnout - Can I Scale Back Career?
Replies: 48
Views: 5040

Re: Balancing saving with living now. (how do you do it?)

I was pretty much a born saver. Never acquired the yen for fancy cars, house,gadgets etc. I had to learn to spend some for today. I tried to have my standard of living gradually increase. Luck plays an important part. I tried to automatically save a portion of every salary increase and of any bonus....
by Dandy
Thu Jul 24, 2014 4:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Balancing saving with living now. (how do you do it?)
Replies: 25
Views: 5025

Re: Will baby boomers retiring spell doom for the markets

I never said the market was unaware except to quote Larry's response. Larry used the term not me. Of course you/the market can't price in a risk that you are unaware of - it has to do with how accurately can the market price in new/unfamiliar (aware of the risk but haven't seen it before) risks or r...
by Dandy
Thu Jul 24, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: Will baby boomers retiring spell doom for the markets
Replies: 45
Views: 5380

Re: Will baby boomers retiring spell doom for the markets

So please show me the evidence that supports your statement that investors persistently misprice assets because they are unaware of the risks. Never said investors persistently misprice assets... was careful to limit it to the newer or[u] longer the potential hit the less likely the market will tak...
by Dandy
Thu Jul 24, 2014 8:18 am
 
Forum: Investing - Theory, News & General
Topic: Will baby boomers retiring spell doom for the markets
Replies: 45
Views: 5380

Re: Please help settle an argument

I vote B

as for A. 'Always" is usually a deal breaker in most arguments. Even without the Always word it is a losing argument. It is an argument that leverage is a great idea. The S&P usually does well over a 5 year period but nothing is guaranteed.
by Dandy
Wed Jul 23, 2014 6:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Please help settle an argument
Replies: 23
Views: 1950

Re: Will baby boomers retiring spell doom for the markets

You can be certain that investors in general are well aware of this trend, and thus have incorporated that knowledge and the expected effect of retirees' equity sales into current prices. I think it is a bit of a stretch. Are you Bogleheads adjusting for potential equity retiree redemptions/lower e...
by Dandy
Wed Jul 23, 2014 6:04 pm
 
Forum: Investing - Theory, News & General
Topic: Will baby boomers retiring spell doom for the markets
Replies: 45
Views: 5380

Re: Can it be wrong to be too risk averse?

You need an awfully lot of safe assets in retirement to live on. I believe Groucho Marx was wealthy and invested only in government bonds. When someone said they don't pay enough he supposedly said "they do if you have enough of them". Having enough of them is the challenge. Most need some...
by Dandy
Tue Jul 22, 2014 7:02 pm
 
Forum: Investing - Theory, News & General
Topic: Can it be wrong to be too risk averse?
Replies: 49
Views: 2327

Re: Total Bond Yield vs. 5 year CD Interest Rates

I didn't complete the survey. Why is it either or? I have done both. Total bond has some diversity and some risk - a 5yr CD is safe but with some risk/penalty if you redeem early. I don't know where interest rates are going to be in 5 years. There are pros and cons to both -- actually having some of...
by Dandy
Fri Jul 18, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2267

Re: Adding Corporates to Total Bond Market Index

Basis of retirees being less experienced ... No factual basis just retirees I talk to they seem especially ill at ease with bonds and bond funds. Having to explain impact of rising rates, that muni funds cap gains are taxable etc. Many had Stable Value funds in their accounts and if they invested i...
by Dandy
Thu Jul 17, 2014 12:14 pm
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6621

Re: Adding Corporates to Total Bond Market Index

As noted I would add Corporate bonds and some of them being shorter duration than total bond. I'm not sure how duration is calculated but have basic trust that it is reasonable. Since 2008 there have been a lot of investors new to bond funds. I know that there is concern that when interest rates ris...
by Dandy
Thu Jul 17, 2014 11:09 am
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6621

Re: Adding Corporates to Total Bond Market Index

Total Bond fund is an excellent bond fund. But it isn't as diversified as the Total Stock Market or Total International Stock market funds. While total bond is still a large investment, I have added Investment Grade Intermediate and Short term bond funds to increase corp bond exposure. I also, hold ...
by Dandy
Thu Jul 17, 2014 9:34 am
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 76
Views: 6621

Re: Should I use my margin to buy bonds?

I can't believe all these leverage questions - must mean we are in a bubble of some sort. If you are 95% or so in equities and you want to add bonds -- trim your equities a bit or adjust future contributions. Interest rates are at historic lows which means your leverage interest costs will be low - ...
by Dandy
Thu Jul 17, 2014 9:19 am
 
Forum: Investing - Theory, News & General
Topic: Should I use my margin to buy bonds?
Replies: 41
Views: 3422

Re: Should I use margin to buy a balanced fund?

Using leverage to buy a balanced fund seems like a really bad idea. You seem determined to do it. Leverage works great until it doesn't then it is usually really, really bad. If you are behind your savings goal -- try saving more/reducing expenses rather than using leverage.
by Dandy
Thu Jul 17, 2014 9:12 am
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 188
Views: 9525

Re: Withdrawal Rate and Net Worth

Not me. A house is an expensive often illiquid quasi investment. It is illiquid usually at just the wrong time - when broad economic conditions are iffy or worse. Taking it into account in some background way when determining your withdrawal rate might be ok but actually basing withdrawals on it see...
by Dandy
Thu Jul 17, 2014 9:07 am
 
Forum: Investing - Theory, News & General
Topic: Withdrawal Rate and Net Worth
Replies: 16
Views: 1803

Re: Living on Dividends

I'm assuming you are bright not by your own assessment but by more objective measures like your grades etc. You are forward thinking and aggressive which are good qualities for a bright young person. So, you should have much success but that is not guaranteed. I think of bright, aggressive people I ...
by Dandy
Thu Jul 17, 2014 9:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Living on Dividends
Replies: 18
Views: 4427

Re: Withdrawl from Target Retirement or Life Strategy Fund

no matter how many different investments you have - you still have to withdraw from one of them. How do you pick? the one that has appreciated the most? OK but you might be losing out on some further momentum and/or you might have been using that fund to rebalance to an investment that underperforme...
by Dandy
Thu Jul 17, 2014 8:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 11
Views: 991

Re: Article: Conversation with John Bogle - Part II

The leader remains much more flexible than many of his followers.
by Dandy
Wed Jul 16, 2014 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: Article: Conversation with John Bogle - Part II
Replies: 11
Views: 1465

Re: What To Do During A Correction In Stocks?

Dandy, read Nisi's post just prior to yours. Your approach requires magic to work. Nisi's does not. The recommended approach would be to lower your equity percentage to a level that you will be able to tolerate through such swings . Thanks - Nisi has a reasonable approach. I don't think mine is muc...
by Dandy
Wed Jul 16, 2014 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: What To Do During A Correction In Stocks?
Replies: 31
Views: 3690

Re: Article: Conversation with John Bogle - Part II

The biggest mistake investors make is looking backward at performance and thinking it’ll recur in the future. I get the main point. But it always amuses me that we often do that. e.g. safe withdrawals, re balancing, stocks will do better than fixed income, fire calc, etc. We all base some of our mo...
by Dandy
Wed Jul 16, 2014 9:40 am
 
Forum: Investing - Theory, News & General
Topic: Article: Conversation with John Bogle - Part II
Replies: 11
Views: 1465

Re: Bet it ALL on Small Cap Value when you're young

Duh :oops: ? One of the main ideas of sane Boglehead investing vs gambling is diversification. Now if you are a true believer in small cap value maybe over allocate to it a bit but I wouldn't bet the farm on any one idea.
by Dandy
Wed Jul 16, 2014 9:25 am
 
Forum: Investing - Theory, News & General
Topic: Bet it ALL on Small Cap Value when you're young
Replies: 64
Views: 6215

Re: [Poll] How often do you re-balance?

The best way to re balance is via adjusting your contributions. Alas, no more contributions in retirement. My target date to rebalance is once a year. However, I hate to move large amounts of money at one time. So, in 2013 for example, I did some minor re balancing from equities during the year as a...
by Dandy
Wed Jul 16, 2014 9:18 am
 
Forum: Investing - Theory, News & General
Topic: [Poll] How often do you re-balance?
Replies: 25
Views: 2213

Re: Cash allocation in a portfolio

Since cash includes short term bonds/funds I have about 20% in cash which is about 1/3 of my fixed income allocation. I have this much cash for several reasons: 1. "Guaranteed" funding to age 70 to collect SS 2. A 5 yr CD ladder so I don't have to sell equities in a severe, prolonged marke...
by Dandy
Wed Jul 16, 2014 9:06 am
 
Forum: Investing - Theory, News & General
Topic: Cash allocation in a portfolio
Replies: 42
Views: 3726

Re: What To Do During A Correction In Stocks?

I favor a different approach smaller rebalancing and stopping at a certain point, especially in retirement. If the market is declining and you have bands e.g. 5% rebalance for a few 5% declines. If the market keeps declining rebalance lesser amounts. Eventually, stop rebalancing until the market sta...
by Dandy
Wed Jul 16, 2014 8:38 am
 
Forum: Investing - Help with Personal Investments
Topic: What To Do During A Correction In Stocks?
Replies: 31
Views: 3690

Re: Please advise me on "Brokered CDs"

you need to understand coupon rates vs yield to maturity and if the CDs are callable etc. Also, brokered CDs might not be easy to sell before maturity and might sell at a loss. Longer term CDs might not keep up with inflation and if interest rates rise what seems like an attractive yield now might n...
by Dandy
Wed Jul 16, 2014 7:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Please advise me on "Brokered CDs"
Replies: 3
Views: 562

Re: Has anyone tried/used the Guyton/Klinger method for a VP

My concern with any withdrawal strategy, especially one that is complicated, is that it will not be manageable in later years for me and my wife or helpful children. Also, anything that can drastically change the amount of withdrawal is problematic at least for me. I think most people will manage th...
by Dandy
Mon Jul 14, 2014 11:55 pm
 
Forum: Investing - Theory, News & General
Topic: Has anyone tried/used the Guyton/Klinger method for a VPW
Replies: 34
Views: 2932

Re: Allocation in Retirement

2.5 to 3% should be very doable with most balanced investments. Interest rates are bound to go up (but when??) so you might want to consider some allocation to VG brokerage CDs e.g. a 10yr at 3.35% and a 7yr at 2.7%. You could also check Fidelity which had similar rates recently. "Locking"...
by Dandy
Mon Jul 14, 2014 11:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Allocation in Retirement
Replies: 7
Views: 1301

Re: [Poll] Are you more risk averse than average?

Do not fear risk,the biggest risk is running out of money before you run out of time :happy High equity allocation does not guarantee that you won't run out of money before running out of time. You can fear taking risk so much that you risk running out of money and you can be fearless and have a hi...
by Dandy
Mon Jul 14, 2014 12:40 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Are you more risk averse than average?
Replies: 36
Views: 2629

Re: [Poll] Are you more risk averse than average?

It is hard to tell. I think that in general more aggressive investors are more vocal. Being risk averse is kind of wimpy compared to being aggressive. So, I don't think too many conservative investors make a big point about it. Just like index fund investors are sometimes viewed as wimpy compared to...
by Dandy
Sun Jul 13, 2014 11:59 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Are you more risk averse than average?
Replies: 36
Views: 2629

Re: Thoughts on 100% stock allocation for 33 year old

There are respected people on both sides - I think most who favor 100% for the young often mean people in their 20's. Some analysis I believe indicate that is not even the best allocation for maximizing gains over the long run - that at least 20% in bonds (fixed income to me) is a nice balance of ri...
by Dandy
Sun Jul 13, 2014 3:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on 100% stock allocation for 33 year old
Replies: 85
Views: 6205

Re: Thoughts on 100% stock allocation for 33 year old

There are respected people on both sides - I think most who favor 100% for the young often mean people in their 20's. Some analysis I believe indicate that is not even the best allocation for maximizing gains over the long run - that at least 20% in bonds (fixed income to me) is a nice balance of ri...
by Dandy
Sun Jul 13, 2014 3:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on 100% stock allocation for 33 year old
Replies: 85
Views: 6205

Re: Brokered CD's vs Bonds

for the brokered CD the value will only go down if you sell my vanguard online recap of my holdings shows the value of my brokerage CDs changing each trading day. Usually down if the Treasury yields are up and vice versa. I'm not sure of the exact trigger of the change i.e. is it tied to the market...
by Dandy
Sun Jul 13, 2014 1:57 pm
 
Forum: Investing - Theory, News & General
Topic: Brokered CD's vs Bonds
Replies: 24
Views: 2669

Re: Who else hates choosing a car?

I don't have too much problems choosing a car -- it is the buying experience I hate. There are always trade offs when making a car purchase - lots to consider. Here is how I decide: 1. What size car do I need/want? Am I commuting a long distance? driving to the train station? Using it for family vac...
by Dandy
Sun Jul 13, 2014 9:48 am
 
Forum: Personal Consumer Issues
Topic: Who else hates choosing a car?
Replies: 75
Views: 6409

Re: Brokered CD's vs Bonds

I don't think you should go for brokered CDs if you are pretty sure you are going to sell if interest rates change significantly. I believe they are much less liquid than normal bonds and that might mean delays and/or sales price underperformance. They are much better choice for a buy and hold strat...
by Dandy
Sun Jul 13, 2014 7:37 am
 
Forum: Investing - Theory, News & General
Topic: Brokered CD's vs Bonds
Replies: 24
Views: 2669
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