Search found 5571 matches

by Doc
Tue Aug 04, 2015 11:49 am
Forum: Investing - Theory, News & General
Topic: Which is more optimal in retirement? Total return vs. income investing
Replies: 35
Views: 2709

Re: Which is more optimal in retirement? Total return vs. income investing

About 45% of my portfolio is in a TIPS ladder extending to 2029 (age 80), with the rest in risky assets, meaning stock index funds globally diversified plus a REITs index fund. Hopefully and if I am still alive by the age of 80, I can then decide to extent the TIPS ladder or buy a longevity annuity...
by Doc
Tue Aug 04, 2015 8:27 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Thanks #cruncher. I was trying to figure an easy way to illustrate the choices. Your idea of using a zero to simplify the calculation was the key that I needed.

In addition you already had the Tips Ladder Spreadsheet which I had forgotten about. :oops:
by Doc
Mon Aug 03, 2015 11:45 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

... I am instead planning to meet half my (above SS) needs with a TIPs ladder and will keep the rest in more intermediate term funds. ... I use a similar approach but instead of "half" I use my "bare minimum" expenses in excess of SS & pension. Of course "bare minimum&q...
by Doc
Mon Aug 03, 2015 9:49 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Here is a chart showing how steep the yield curve was in 2011 when Grok started this thread compared with what it is today. Thirty year TIPS made a lot more sense then than they do now.

Image
http://s8.postimg.org/c6cao0z2t/Capture.jpg
by Doc
Mon Aug 03, 2015 8:33 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

So I think mathematically you are better off locking in a long term rate than rolling short term bonds and hoping on rates increasing. I don't know where you are coming from. This post is about a "Worry-Free" retirement portfolio. Grok is suggesting a 30 year TIPS ladder portfolio. I sugg...
by Doc
Mon Aug 03, 2015 8:04 am
Forum: Investing - Theory, News & General
Topic: [How often do you check on your investments?]
Replies: 43
Views: 1769

Re: [How often do you check on your investments?]

Once a week I check all my financial accounts to make sure everything is as it should be. I look at my investments then . I download transactions once a week and reconcile my accounts about once a month. But I don't look at the bottom line. If I make a large trade or there is a large stock market c...
by Doc
Sun Aug 02, 2015 2:30 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Isn't it possible for interest rates to remain the same ? Then you would have been better off with the 30 year TIPS. Yes you would have been better off. But not by that much. The spread between the 10 and the 30 is only some 60 bps or 3 bps per year. A common number for going longer is 20 bps per y...
by Doc
Sat Aug 01, 2015 11:37 am
Forum: Investing - Theory, News & General
Topic: Which is more optimal in retirement? Total return vs. income investing
Replies: 35
Views: 2709

Re: Which is more optimal in retirement? Total return vs. income investing

rca1824 wrote:Strategy (2): Buy high yield assets and hold forever

...

Cons: Income stream may not meet needs during recessions.


"Cons: Income stream may not meet needs during recessions" period. :(
by Doc
Sat Aug 01, 2015 8:17 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

This is a way to proceed if you want to count on TIPS rates rising over the next 10 years. The problem is that one hasn't locked in the constant dollar cash flow for the entire 30 years. The glass is half full. The problem is that one hasn't has locked in the low constant dollar cash flow for t...
by Doc
Sat Aug 01, 2015 7:54 am
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

What do you mean "sufficient capital״? If you have a pretty good idea of your needs (and to me that is a big question because it is impossible to anticipated the unexpected) and can fund the ladder, whatever is left can go into equities, and hopefully you are done with. If that is the case, th...
by Doc
Fri Jul 31, 2015 4:20 pm
Forum: Investing - Theory, News & General
Topic: Anyone hold Long Term Bonds?
Replies: 45
Views: 3002

Re: Anyone hold Long Term Bonds?

Isn't Sharpe ratio CAGR divided by standard deviation of annual returns? If you're a long-term investor why do you care what the annual returns are? You only care about the final return. If you don't care about risk then you shouldn't have any fixed income at all because if you wait long enough whi...
by Doc
Fri Jul 31, 2015 2:48 pm
Forum: Investing - Theory, News & General
Topic: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation
Replies: 147
Views: 34584

Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

My own view, and what i am actually planning to do, is buy a portfolio of long term tips that roughly duration match my retirement liabilities out to age 95, at least for a basic floor guaranteed income. Then when (God willing) i get to my mid 80s i will probably convert these funds over to a infla...
by Doc
Fri Jul 31, 2015 2:16 pm
Forum: Investing - Theory, News & General
Topic: Anyone hold Long Term Bonds?
Replies: 45
Views: 3002

Re: Anyone hold Long Term Bonds?

I hold long-term treasuries because I believe there a case for them in a high-equity portfolio. I believe that Larry Swedroe co-authored an article on this. There was a discussion on the forum back in 2009 with a good summary: One of my coworkers and I just finished a research project on this very ...
by Doc
Tue Jul 28, 2015 6:09 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 45
Views: 2525

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

do you have a defined benefit pension? if not i would recommend building a tips ladder or buying a bunch of tips for early retirement as an income floor. A floor can take a lot of the sting out of market volatility. I use our defined benefit pension to reduce the size of our Treasury ladder not eli...
by Doc
Tue Jul 28, 2015 6:03 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 45
Views: 2525

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

We have a ten year rolling Treasury ladder. If we are in an equity bear market the maturing rungs will be spent instead of rolling it. That gives us ten years for the stock market to recover enough to replenish the ladder. In this way I don't have to change my AA in anticipation of an event that ma...
by Doc
Tue Jul 28, 2015 12:23 pm
Forum: Investing - Theory, News & General
Topic: XIRR - dividends, and creating YTD figures
Replies: 9
Views: 610

Re: XIRR - dividends, and creating YTD figures

The internal rate of return is based on discounting the cash flows. If you reinvest dividend the cash flow is zero. For consistency I would set up my spreadsheet with every time period having an entry even if it is zero. That way you don't have a distinction between reinvesting in the same fund or d...
by Doc
Tue Jul 28, 2015 12:14 pm
Forum: Investing - Theory, News & General
Topic: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?
Replies: 45
Views: 2525

Re: Anyone Have a Near Retirement Strategy for Sequence of Return Risk?

We have a ten year rolling Treasury ladder. If we are in an equity bear market the maturing rungs will be spent instead of rolling it. That gives us ten years for the stock market to recover enough to replenish the ladder. In this way I don't have to change my AA in anticipation of an event that may...
by Doc
Tue Jul 28, 2015 12:09 pm
Forum: Investing - Theory, News & General
Topic: Tax loss harvesting with periodic investment
Replies: 3
Views: 302

Re: Tax loss harvesting with periodic investment

Yes and you also have to turn off investments for the last 30 days. Opps! Not quite true. The OP is selling the shares purchased in the previous 30 days, so no wash sale from those shares. However, if those shares are not sold, then there would be wash sale. I missed that the shares purchased in th...
by Doc
Tue Jul 28, 2015 9:40 am
Forum: Investing - Theory, News & General
Topic: Tax loss harvesting with periodic investment
Replies: 3
Views: 302

Re: Tax loss harvesting with periodic investment

I do understand that I will also need to turn off upcoming investments into this fund for the next 30 days. Yes and you also have to turn off investments for the last 30 days. Opps! Periodic investments play havoc with the wash sale rules. I think the best way to avoid this is to put your scheduled...
by Doc
Mon Jul 27, 2015 5:14 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Developed & Emerging Markets Indexes — Transition Details
Replies: 50
Views: 3880

Re: Vanguard's Developed & Emerging Markets Indexes — Transition Details

...And there's no way NOT to have small caps now, in index internatl. funds. Except maybe VFWAX = FTSE all world ex US? Think outside the box. There are other fund companies than Vanguard. Example: Schwab International Equity ETF™ SCHF with 8% mid cap and zero percent small cap tracking the FTSE De...
by Doc
Mon Jul 27, 2015 12:11 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Developed & Emerging Markets Indexes — Transition Details
Replies: 50
Views: 3880

Re: Vanguard's Developed & Emerging Markets Indexes — Transition Details

(Just try finding any record of the Total International Stock Index Fund tracking an index that included no small caps.) ... :annoyed You have to read the footnotes. :wink: *Total International Composite Index through August 31, 2006; MSCI EAFE + Emerging Markets Index through December 15, 2010; MS...
by Doc
Sun Jul 26, 2015 4:10 pm
Forum: Investing - Theory, News & General
Topic: How Does Vanguard Calculate YTD Performance for Bond Funds?
Replies: 6
Views: 511

Re: How Does Vanguard Calculate YTD Performance for Bond Funds?

I have fully verified the actual year-to-date performance for the funds in question. In fact, I even created a spreadsheet working from the starting share balance, monthly dividends, reinvestment NAV, reinvested share balance, and final fund value. It looks like the Vanguard fund profile might be i...
by Doc
Sat Jul 25, 2015 9:13 am
Forum: Investing - Theory, News & General
Topic: 10-Year TIPS Auction July 23 2015
Replies: 29
Views: 2786

Re: 10-Year TIPS Auction July 23 2015

Isn't the accrued inflation adjustment exposed to deflation risk (however small that might be)? Yes. But so is that TIPS you bought at auction 5 or 10 years ago. If you want/need deflation protection buy nominal bonds not TIPS. If you want both types of protection buy some of each. Maybe Doc and # ...
by Doc
Fri Jul 24, 2015 6:01 pm
Forum: Investing - Theory, News & General
Topic: 10-Year TIPS Auction July 23 2015
Replies: 29
Views: 2786

Re: 10-Year TIPS Auction July 23 2015

#Cruncher, correct as always. Starting this year, there are 20-year TIPS maturing in each year out to 2029, then an opening until 2032. I am trying to build my ladder with auction issues, not from the secondary market , which has some hefty accrued principal. But you are right it can be done Buying...
by Doc
Thu Jul 23, 2015 8:42 am
Forum: Investing - Theory, News & General
Topic: 10-Year TIPS Auction July 23 2015
Replies: 29
Views: 2786

Re: 10-Year TIPS Auction July 23 2015

Because TIPS come in 5-, 10- and 30-year maturities, there is always going to be an open spot in a TIPS ladder 10 years out. No you will just have to buy 30 year TIPS with a 20 year remaining time to maturity on the secondary market. The brokerage fee to buy at the three brokers we use is zero. The...
by Doc
Wed Jul 22, 2015 4:19 pm
Forum: Investing - Theory, News & General
Topic: Correlations, eh?
Replies: 18
Views: 2819

Re: Correlations, eh?

... but I don't see any big negative numbers in that lower left quadrant ... Nice work Nisi. But, what I am concerned with is the correlation of bonds with equities when there is a stock market correction, bear market and/or collapse. Given your stacks and bands illustration we probably will never ...
by Doc
Tue Jul 21, 2015 11:39 am
Forum: Investing - Theory, News & General
Topic: How do you pick TLH partners?
Replies: 6
Views: 484

Re: How do you pick TLH partners?

Typically I just park the money in cash and eat the 60 days (at Vanguard). It's cleanest that way, as I don't think "substantially equal" has ever been specifically defined by the IRS. I should note that my TLH usually is not a lot of money relative to the whole, so missing 30 or even 60 ...
by Doc
Mon Jul 20, 2015 9:29 am
Forum: Investing - Theory, News & General
Topic: VBILX vs VBTLX for 3 fund portfolio
Replies: 14
Views: 1223

Re: VBILX vs VBTLX for 3 fund portfolio

One thing I always do when trying to understand a fund is to hop into the "way back machine" and see how it performed in 2008 when the markets were extremely stressed. Maybe you've done this. Go to the Vanguard fund's Price and Performance tab, then scroll down to Historical Returns. Bett...
by Doc
Sun Jul 19, 2015 5:29 pm
Forum: Investing - Theory, News & General
Topic: "Behind Vanguard's Surprising China Decision"
Replies: 22
Views: 4113

Re: "Behind Vanguard's Surprising China Decision"

I assume you mean take a new position in the fund. For the funds I own that are making these changes, I just go along on whatever ride the fund managers offer. Actually a wrong assumption. In 2011 a fund that we had owned for several years increased its charter for EM limitations from 10% to 25% (I...
by Doc
Sun Jul 19, 2015 3:34 pm
Forum: Investing - Theory, News & General
Topic: "Behind Vanguard's Surprising China Decision"
Replies: 22
Views: 4113

Re: "Behind Vanguard's Surprising China Decision"

I own Vanguard mutual funds and ETFs, and I own ETFs from iShares. I am really agnostic about vendor and fund type, for the most part. But to me, "speculator" is a pejorative term. Assuming by "fund type" you mean "mutual fund" or "exchange traded fund" I wou...
by Doc
Thu Jul 16, 2015 7:53 am
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4412

Re: Do Dividends Actually Add To The Total Return of a Stock?

Regarding "price" changes and ex-dividend date: Does this help or confuse the issue? After the close of business on the day before the ex-dividend date and before the market opens on the ex-dividend date, all open good-until-canceled limit, stop, and stop limit orders are automatically red...
by Doc
Wed Jul 15, 2015 9:22 am
Forum: Investing - Theory, News & General
Topic: Whatever happened to the advocates of CDs vs Bonds?
Replies: 58
Views: 5623

Re: Whatever happened to the advocates of CDs vs Bonds?

...I would argue that given equivalent yields, CD's are better due to being zero risk....but thats really splitting hairs... I take your point. I've personally had money in a credit union that failed and was rescued by NCUA, in a perfect non-event that didn't cause me the slightest nuisance, so I &...
by Doc
Wed Jul 15, 2015 8:14 am
Forum: Personal Consumer Issues
Topic: Vanguard's Security image going away?
Replies: 81
Views: 7926

Re: Vanguard's Security image going away?

For Vanguard and Google, I enter my password and then receive a code via text that needs to be entered to access my account. I have no cell phone. So if I use another computer or don't log in for a while Vg forgets my computer and then am I SOOL. The message we received from Vanguard made no mentio...
by Doc
Sun Jul 12, 2015 5:42 pm
Forum: Investing - Theory, News & General
Topic: How do you calculate the expected earnings of the stock market?
Replies: 21
Views: 1550

Re: How do you calculate the expected earnings of the stock market?

I don't. Rather I use Portfolio Solutions 30-Year Market Forecast for 2015 Each year, I put my head on the chopping block and publish a 30-year forecast for global stock and bond market returns. This forecast is used to create long-term asset allocation strategies for our clients. It’s a terribly im...
by Doc
Sat Jul 11, 2015 5:48 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4412

Re: Do Dividends Actually Add To The Total Return of a Stock?

No, they actually reduce the after tax total return, which is the only return investors should care about.* *not (as) applicable in tax deferred accounts That's a very misleading statement. What dbr wrote is correct. Yes a fund that does not pay dividends does defer the tax paid and that effectivel...
by Doc
Sat Jul 11, 2015 11:57 am
Forum: Investing - Theory, News & General
Topic: If you don't care about volatility, are long-term bonds better than total bond?
Replies: 66
Views: 5929

Re: If you don't care about volatility, are long-term bonds better than total bond?

Unlike the former, I haven't actually seen a proper study supporting the latter. Apparently the original research on the concept comes from Eugene F. Fama and Robert R Bliss "The information in Long-Maturity Forward Rates" September 1987 edition of the American Economic Review. The 20 bps...
by Doc
Fri Jul 10, 2015 5:26 pm
Forum: Investing - Theory, News & General
Topic: Total Bond and Intermediate Term Investment Grade
Replies: 18
Views: 1919

Re: Total Bond and Intermediate Term Investment Grade

Do you not use any muni's? No. 1) There is an "effective" tax on muni's because usually the yield is somewhat less than on similar risk Treasuries. And the tax loss on short term Treasuries is lower than that effective rate times the yield at least for us. And I see no reason for short te...
by Doc
Fri Jul 10, 2015 11:26 am
Forum: Investing - Theory, News & General
Topic: Total Bond and Intermediate Term Investment Grade
Replies: 18
Views: 1919

Re: Total Bond and Intermediate Term Investment Grade

What funds do you use? We have 7 accounts at three brokers and have a large amount of fixed income in taxable so the list gets pretty long but many are interchangeable and some are near duplicates for tax reasons. For short term we any of the short index funds at Vanguard or Schwab. Also Vanguard s...
by Doc
Fri Jul 10, 2015 10:13 am
Forum: Investing - Theory, News & General
Topic: If you don't care about volatility, are long-term bonds better than total bond?
Replies: 66
Views: 5929

Re: If you don't care about volatility, are long-term bonds better than total bond?

Well, there is the theory that you can get the same portfolio effect with a smaller allocation to long bonds than to intermediate term bonds, so your bond allocation doesn't have to be as large. I barbelled between CDs and long term treasuries. I do something like this as well. I have limited tax s...
by Doc
Fri Jul 10, 2015 9:04 am
Forum: Investing - Theory, News & General
Topic: If you don't care about volatility, are long-term bonds better than total bond?
Replies: 66
Views: 5929

Re: If you don't care about volatility, are long-term bonds better than total bond?

In Larry Swedroe Positions For 2013: Resist The Temptation To Stretch For Yield | Seeking Alpha, Larry clarifies his firm's position on bond maturities a bit more, and explicitly references the 20 basis points per year of maturity guideline: I don't agree with Larry on this one any more than I'd ag...
by Doc
Thu Jul 09, 2015 5:15 pm
Forum: Investing - Theory, News & General
Topic: If you don't care about volatility, are long-term bonds better than total bond?
Replies: 66
Views: 5929

Re: If you don't care about volatility, are long-term bonds better than total bond?

Even looking at just nominal returns, we can see that the way bonds complemented stocks in and around the inflationary recession, shown above, was very different than in the two most recent recessions and stock declines. And we can see that the Fed was very active in all of these times, but in diff...
by Doc
Thu Jul 09, 2015 11:20 am
Forum: Investing - Theory, News & General
Topic: Total Bond and Intermediate Term Investment Grade
Replies: 18
Views: 1919

Re: Total Bond and Intermediate Term Investment Grade

When I see people complaining about how Total Bond doesn't have enough corporate bonds, I wonder why they don't just add one of Vanguard's corporate bond funds. It's not that it doesn't have enough corporates. It is that it has too much in Treasuries, MBS and long bonds. Just adding corporates dilu...
by Doc
Thu Jul 09, 2015 11:12 am
Forum: Investing - Theory, News & General
Topic: Total Bond and Intermediate Term Investment Grade
Replies: 18
Views: 1919

Re: Total Bond and Intermediate Term Investment Grade

... Jack Bogle's suggestion of 50% Total bond and 50% Intermediate Term Investment Grade for their bond allocation? We use a combination of funds to come close to the BarCap Intermediate (1-10) Government/Credit Index (see GVI as an example). This puts our portfolio somewhat similar to Bogle's sugg...
by Doc
Thu Jul 09, 2015 11:00 am
Forum: Investing - Theory, News & General
Topic: If you don't care about volatility, are long-term bonds better than total bond?
Replies: 66
Views: 5929

Re: If you don't care about volatility, are long-term bonds better than total bond?

I remember reading that also from Larry's books (I gave away all of my books due to several relocations) re 0.2% increments as a strategy but could you do me the favor of sharing your knowledge/thought as to the basis of this and what do you think of it? From a simple approach, sure, more ytm to ta...
by Doc
Thu Jul 09, 2015 8:43 am
Forum: Investing - Theory, News & General
Topic: Anyone else get the recent Vanguard survey?
Replies: 6
Views: 983

Re: Morningstars portfolio info

I love the way Morningstar shows portfolio information. Seems so much simpler, love the X-Ray function and stock intersection function. Funds supply Morningstar with portfolio data at regular intervals and formats compatible with M*. In return the funds get exposure. They are not going to give that...
by Doc
Thu Jul 09, 2015 8:37 am
Forum: Personal Consumer Issues
Topic: Vanguard's Security image going away?
Replies: 81
Views: 7926

Re: Vanguard's Security image going away?

For Vanguard and Google, I enter my password and then receive a code via text that needs to be entered to access my account. I have no cell phone. So if I use another computer or don't log in for a while Vg forgets my computer and then am I SOOL. The message we received from Vanguard made no mentio...
by Doc
Wed Jul 08, 2015 3:59 pm
Forum: Personal Consumer Issues
Topic: Vanguard's Security image going away?
Replies: 81
Views: 7926

Re: Vanguard's Security image going away?

I got a notice from them indicating the 2-step authentication would be implemented sometime this year. Is "them" Vanguard or B of A? Part of today's notice from Vanguard. Receive security codes [u]by text message Vanguard offers you the option to receive a single-use security code to ente...
by Doc
Wed Jul 08, 2015 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: NYSE halted **Mutual Fund Trade**
Replies: 11
Views: 1247

Re: NYSE halted **Mutual Fund Trade**

S&P Dow Jones Indices Statement on Resumption of Trading at NYSE Given that the NYSE has resumed normal trading at 3:10pm EDT, S&P Dow Jones Indices has switched real-time index calculation for its indices, including the S&P 500® and Dow Jones Industrial Average®, to prices from the pri...
by Doc
Wed Jul 08, 2015 2:34 pm
Forum: Investing - Help with Personal Investments
Topic: NYSE halted **Mutual Fund Trade**
Replies: 11
Views: 1247

Re: NYSE halted **Mutual Fund Trade**

Much of the trading on the NYSE happens at the end of the day, when portfolio managers put in orders designed to occur at the exact market close to ensure end-of-day pricing . The NYSE accounts for more than 60 percent of S&P 500 volume at the close of the market, according to Credit Suisse ana...

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