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Re: Vanguard Small Cap Index Inv (NAESX) - Questions...

placeholder wrote:The "settling" took place long ago.


I don't disagree but can you give some references please.

Thanks,

Doc
by Doc
Thu Apr 24, 2014 7:43 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Small Cap Index Inv (NAESX) - Questions...
Replies: 21
Views: 1193

Re: Bogle: Tilt To Corporates For More Yield

Are we reading the same quotes above? I posted "the spread" - which can easily be equated * for duration, if Mr. Doc wants. I think one of us misunderstood the other. I was trying to point out that part of the spread you posted may be due to difference in duration and part due to the defa...
by Doc
Thu Apr 24, 2014 5:59 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: Tilt To Corporates For More Yield
Replies: 71
Views: 7155

Re: Vanguard Small Cap Index Inv (NAESX) - Questions...

That's interesting and I think that I am even more satisfied with my R2000 holdings than before. Vanguard gave up the Russell 2000 in May 2003 because of poor peer performance ostensibly because active managers were front running the Russell. This problem of so-called market impact is exacerbated b...
by Doc
Thu Apr 24, 2014 5:48 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Small Cap Index Inv (NAESX) - Questions...
Replies: 21
Views: 1193

Re: Bogle: Tilt To Corporates For More Yield

According to Larry Swedroe, the default premium for corporate bonds is too small (0.3%) to cover defaults, so the realized returns are very small in spite of higher yields. The last time I looked for intermediate term bonds the corporate/treasury spread was a tad over 1%. Actually 1.5%. https://per...
by Doc
Thu Apr 24, 2014 12:11 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: Tilt To Corporates For More Yield
Replies: 71
Views: 7155

Re: Vanguard Small Cap Index Inv (NAESX) - Questions...

If you want to understand a Fund (any fund), read the prospectus. Very good advice. However if you are only interested in a fund's benchmark you can find it on M* easily. On the "Portfolio Tab" for the fund you are interested in use the "Benchmark" pull down menu and then select...
by Doc
Thu Apr 24, 2014 10:37 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Small Cap Index Inv (NAESX) - Questions...
Replies: 21
Views: 1193

Re: Post on bonds and low volatility anomaly

While investors have been well rewarded for taking the risks of investing in stocks in general, and specifically small stocks and value stocks, as well as for taking term risk, they have received almost no reward for accepting corporate credit risk s. While corporate bonds yields have been much hig...
by Doc
Wed Apr 23, 2014 1:49 pm
 
Forum: Investing - Theory, News & General
Topic: Post on bonds and low volatility anomaly
Replies: 10
Views: 825

Re: Why is it better to put stock funds in taxable accounts?

Thanks all for helping me think through it. I guess my question more boils down to something like, "What is the difference between tax efficiency with roths vs pre-tax" It's not a huge difference and it boils down to the mechanics of withdrawal, i.e. that Roths don't have RMDs that could ...
by Doc
Tue Apr 22, 2014 12:11 pm
 
Forum: Investing - Theory, News & General
Topic: Why is it better to put stock funds in taxable accounts?
Replies: 10
Views: 1236

Re: Floating Rate Treasuries - J. Zweig

thx1138 wrote: Non-marketable CD's on the other hand are returning much higher rates at no risk to the investor.


Almost but not quite:

FDIC wrote:This includes principal and accrued interest and applies to all depositors of an insured bank.


http://www.fdic.gov/consumers/banking/facts/
by Doc
Mon Apr 21, 2014 10:53 am
 
Forum: Investing - Theory, News & General
Topic: Floating Rate Treasuries - J. Zweig
Replies: 3
Views: 616

Re: Beware Vanguard DOES NOT update all your account values

I hold some TIPS in my Vanguard brokerage account. Values get updated some number of hours after 6:00pm (certainly by the next morning), while my Vanguard mutual fund values get updated within minutes. TIPS purchased at auction on Thursday April 19 are showing zero cost even though the transaction ...
by Doc
Sat Apr 19, 2014 11:25 am
 
Forum: Investing - Theory, News & General
Topic: Beware Vanguard DOES NOT update all your account values
Replies: 56
Views: 4569

Re: Bond mutual fund vs individual bonds

I will sell one half and move the rest into a longer term fund matching your duration (which you've just extended). I challenge you to show that in the long term there's any difference difference. I have a ten year note with a 4% coupon with two years left to maturity. That note is selling at a pre...
by Doc
Sat Apr 19, 2014 10:01 am
 
Forum: Investing - Theory, News & General
Topic: Bond mutual fund vs individual bonds
Replies: 13
Views: 1238

Re: Bond mutual fund vs individual bonds

As an investor with an ongoing bond allocation, you don't care about any specific point in time. A possible exception to worrying about a specific point in time would be if you needed to sell bonds unexpectedly to meet some emergency or to re-balance into equities during a stock market crash. But e...
by Doc
Fri Apr 18, 2014 7:29 pm
 
Forum: Investing - Theory, News & General
Topic: Bond mutual fund vs individual bonds
Replies: 13
Views: 1238

Re: Bond mutual fund vs individual bonds

As an investor with an ongoing bond allocation, you don't care about any specific point in time. A possible exception to worrying about a specific point in time would be if you needed to sell bonds unexpectedly to meet some emergency or to re-balance into equities during a stock market crash. But e...
by Doc
Fri Apr 18, 2014 6:39 pm
 
Forum: Investing - Theory, News & General
Topic: Bond mutual fund vs individual bonds
Replies: 13
Views: 1238

Re: 5 yr TIPs auction announced 4/10- any takers?

#cruncher I'm somewhat confused. Maybe you can sort the tax speak for us. It looks like there have been subsequent rulings. The coupon was 0.125% which is the smallest coupon allowed by Treasury rules on a note or bond. I wasn't aware that there was a 1/8 minimum before but now i seems different may...
by Doc
Fri Apr 18, 2014 6:28 pm
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: Why are total bond market funds so often recommended?

I really like this thought. David Swenson says that diversification is the only reasonable response to uncertainty. Applying that to bonds, you get something like the total market. On the other hand, Swenson also thinks that investors should own only US treasuries. *shrugs* Diversify what? If you w...
by Doc
Thu Apr 17, 2014 4:52 pm
 
Forum: Investing - Theory, News & General
Topic: Why are total bond market funds so often recommended?
Replies: 52
Views: 4471

Re: 5 yr TIPs auction announced 4/10- any takers?

Treasury Direct wrote:High Yield -0.213%


Unadjusted Price 101.685932


http://www.treasurydirect.gov/instit/an ... 0417_1.pdf
by Doc
Thu Apr 17, 2014 11:59 am
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: 5 yr TIPs auction announced 4/10- any takers?

auction price at a premium? This does like a certainty because the TIPS will carry a coupon rate of 0.125% and the yield at auction will be negative. That has happened for 10 consecutive 4- to 5-year TIPS auctions, and all of those were priced above par for buyers at the auction: I think your data ...
by Doc
Thu Apr 17, 2014 11:24 am
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: TIPS and the Equity Bear

I still find it interesting that the particularly odd shape of the real yield curve under the old formula was so dramatically improved by the change in the formula, but the raft of questions that this elicits in my mind could be addressed in another thread. I didn't realize that the weird shape was...
by Doc
Wed Apr 16, 2014 8:03 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: TIPS and the Equity Bear

I felt the need to complete the thought introduced in #Cruncher's post above, so here's the graph. The disparity is still significant, if not quite so dramatic, no? Regardless, the money made by buying up TIPS at the time was surely no mirage. Title of Thread: TIPS and the Equity Bear TIPS did not ...
by Doc
Wed Apr 16, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: 5 yr TIPs auction announced 4/10- any takers?

thanks Doc...I really appreciate the helpful info. now all I have to decide is which broker to use: VBS, Schwab, or Fidelity. maybe some others will chime in; I always appreciate listening to what others have to say. Thanks, Don Of the 3: Only VBS is showing negative yields on line. Schwab is not s...
by Doc
Tue Apr 15, 2014 11:05 am
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: TIPS and the Equity Bear

For a ladder I plan to hold to maturity I really only care about the YTM when I buy and very little to not at all what happens to value between when I buy and maturity. Agreed if you never ever ever will use your TIPS to rebalance which is why the post is titled "... and the equity bear"....
by Doc
Mon Apr 14, 2014 2:50 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: TIPS and the Equity Bear

It looks like beginning 12/1/2008 more weight was given to the "on the run" 5-year TIPS maturing 4/15/2013 which had a much lower yield than the 10-year TIPS maturing in July 2012, July 2013, and January 2014 as shown by ... Right. Part of the change, maybe the whole change, was to use th...
by Doc
Mon Apr 14, 2014 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: TIPS and the Equity Bear

Thanks cruncher, I forgot about the method change. But It doesn't help. Before the change we still see the "Weird" real yield curve and the big change in the opposite direction. The nominal curves are however more separated but still have a normal shape. http://s29.postimg.org/oo6hwfcpz/TI...
by Doc
Mon Apr 14, 2014 2:20 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: TIPS and the Equity Bear

IIRC Larry said the 08 phenomenon was caused by Lehman dumping TIPs to try to stay alive, and that was not likely to happen again as the TIPs market is much more liquid now. I have no dog in this, I merely mention it. There were a lot of reasons propagated at the time. Liquidity and the "fear&...
by Doc
Mon Apr 14, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: 5 yr TIPs auction announced 4/10- any takers?

hi doc just a quick easy question for ya (at least I hope so): when you buy your tips, treasuries, or the 4-wk treasuries to roll, do you buy direct using Treasury Direct or do you use a brokerage firm account (like VG, Fidelity, Schwab)? thanks, don Broker - both auction and secondary market at ti...
by Doc
Mon Apr 14, 2014 11:18 am
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: TIPS and the Equity Bear

OGD, I guess I didn't state my point very well. I am addressing how TIPS performed in a major disruption of the equity markets. But move the slider back to 2007 befole the oil inflationary spike started, and what you have is TIPS exactly in line with nominal Treasuries by 2009. Exactly correct. Go b...
by Doc
Sun Apr 13, 2014 7:57 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: TIPS and the Equity Bear

Doc: while the deflationary properties of nominal bonds are nothing to sneeze at, I'd be careful judging TIPS performance based on late 2008. No. The only time since TIPS have been a "viable" bond segment that we have had a market upset like '08 was '08 itself. I'm judging TIPS performanc...
by Doc
Sun Apr 13, 2014 5:51 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

TIPS and the Equity Bear

TIPS in the short short run are not nominal Treasuries. Here is a yield chart for nominal and real Treasuries during the '08 banking crisis for the December 2008 and Jan 2009 time period. http://s8.postimg.org/v0hadupat/TIPS_Dec_08_thru_Jan_09.png The difference in performance of nominal Treasuries ...
by Doc
Sun Apr 13, 2014 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS and the Equity Bear
Replies: 20
Views: 1602

Re: Why does Vanguard use average return iso compound annual

Average Geometric Return, Annualized Return, Discounted Cash Flow, Net Present value, Future Value, Internal Rate Of Return, Excel's XIRR function, Bond YTM etc are all variations of the same basic analysis of the cash flow of a business or other investment. The different terms are just the vernacul...
by Doc
Sat Apr 12, 2014 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: Why does Vanguard use average return iso compound annual?
Replies: 99
Views: 4156

Re: 5 yr TIPs auction announced 4/10- any takers?

Maybe it's just the weekend but the data is all screwy. Vanguard is showing an indicative yield of -0.571 which is the yield on th April 2018 note. Schwab is showing no yield or coupon. Fidelity doesn't even acknowledge the auction at all but does show the two t-Bills announced at the same time. The...
by Doc
Sat Apr 12, 2014 2:01 pm
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: Why does Vanguard use average return iso compound annual

Garrison Keillor wrote:Well, that's the news from Lake Wobegon, where all the women are strong, all the men are good looking, and all the children investors are above average.
by Doc
Sat Apr 12, 2014 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Why does Vanguard use average return iso compound annual?
Replies: 99
Views: 4156

Re: 5 yr TIPs auction announced 4/10- any takers?

I know we are not supposed to market time but I'm with you on this one. A rate of 1.5% is getting towards not horrible, but I have not gotten over this point for some time and so have not purchased in more TIPS for the last few years. I'm not sure I would call it market timing. Selling one duration...
by Doc
Sat Apr 12, 2014 10:44 am
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: 5 yr TIPs auction announced 4/10- any takers?

2) any data on how much better rolling 4 wk treasuries do for unexpected inflation vs TIPS? I'm not sure I buy the claim. Expected inflation: Why T-bills lead The high correlation of T-bills with expected inflation rates reflects the nature of these securities—short- term, government-guaranteed deb...
by Doc
Sat Apr 12, 2014 10:34 am
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: 5 yr TIPs auction announced 4/10- any takers?

FYI, the 5-year TIPS yield dropped to -0.10% on Thursday, down 21 basis points in just eight days. This is what happens when the stock market tanks. Flight to safety. This is what happens when the market lowers its estimate of economic performance - stocks drop and interest rates drop. It's interes...
by Doc
Fri Apr 11, 2014 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: 5 yr TIPs auction announced 4/10- any takers?

I confess I don't really get 5-year TIPS. I worry about inflation in the long run much more than in the short run. Sure I can roll over short TIPS, but easier to buy longer TIPS. "Easy" shouldn't be a factor. The best inflation hedge would be rolling 4 wk Treasuries bills. But you give up...
by Doc
Fri Apr 11, 2014 5:34 pm
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: 5 yr TIPs auction announced 4/10- any takers?

Anyway, the Treasury's Yield Curve site does a pretty good job estimating the current value of TIPS of all maturities. They explain how they do it, but looks a bit magical to me: The spline fit is just a function used to smooth data. I haven't used it in over 40 years and I don't remember the detai...
by Doc
Fri Apr 11, 2014 5:23 pm
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: 5 yr TIPs auction announced 4/10- any takers?

rate as of 4/10 is -0.10. Doc, any reason you are buying a large amount of these, or just part of your IPS? RM I let my 10 year ladder collapse by rolling to short nominals after the '08 debacle and am now beginning to extend the duration again by buying double rungs of the fives. The reason I said...
by Doc
Fri Apr 11, 2014 5:17 pm
 
Forum: Investing - Theory, News & General
Topic: 5 yr TIPs auction announced 4/10- any takers?
Replies: 36
Views: 3088

Re: Morningstar X-ray and Bond Funds

PTRAX now has an xray of 258 long bond, 23 long cash, 175 short cash, 8 short bond. Does PTRAX really short that heavily? This has a big impact on the portfolio I put into Xray. (I have PTRAX because of poor 401k choices) No. It's not necessarily a short position. PTRAX uses a lot of derivatives li...
by Doc
Thu Apr 10, 2014 8:53 pm
 
Forum: Investing - Theory, News & General
Topic: Morningstar X-ray and Bond Funds
Replies: 5
Views: 650

Re: Fed news efficient markets quiz

You guys are paranoid. It must have been at 13:00. :D Here's a chart of the Treasury Yield 5 Years Index showing the step change at that time. https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1397160960000&chddm=1221.00...
by Doc
Thu Apr 10, 2014 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: Fed news efficient markets quiz
Replies: 5
Views: 415

Re: Vanguard Developed Markets Index Fund

So I see that Vanguard merged two funds into what they are now calling the Vanguard Developed Markets Index Fund. ... Are Vanguard investors at serious risk for this type of thing...fund objective dramatically changing or even a big fee hike? I assume not and am not really worried about it, but it'...
by Doc
Thu Apr 10, 2014 10:53 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Developed Markets Index Fund
Replies: 4
Views: 345

Re: emerging markets should they be in your portfolio

Emerging equity markets have been more volatile than developed markets. However, volatility has been falling. Current valuations suggest that emerging markets will provide higher returns than either the U.S. or other developed markets. A trade off between risk and return is a well accepted investme...
by Doc
Thu Apr 10, 2014 10:23 am
 
Forum: Investing - Theory, News & General
Topic: emerging markets should they be in your portfolio
Replies: 14
Views: 1509

Re: Roth IRA - tax free - totally ?

Let me try a completely different approach to see if we can get to some kind of common understanding. Addressing the goa l of investing in an environment where taxes matter. 1) Minimize taxes. 2) Maximize after tax return. The correct goal is #2. Sometimes perhaps often, minimizing taxes also maximi...
by Doc
Wed Apr 09, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: Roth IRA - tax free - totally ?

I'm aware of that. You seem to be missing my point. The gain is still included in AGI. If it was "tax free," you'd only include your principal upon withdrawal. Stop with the words. They are just confusing the the issue. Congress labeled the tIRA "tax deferred". When they made th...
by Doc
Wed Apr 09, 2014 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: Roth IRA - tax free - totally ?

not incorrect? I'm confused. If the distribution which you take has a 'gain' wrapped in it, the gain is included in taxable income. Forget the words. Do the math . It is not difficult. ROTH (Pay taxes first): Wages x (1-TaxRate) x (1+Growth) = Money to spend Traditional IRA (Pay taxes later): Wages...
by Doc
Wed Apr 09, 2014 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: Roth IRA - tax free - totally ?

By the way, did I already mention that your quoting is sloppy? :D No, thanks. I hadn't notice that recently. Like maybe 20 or 30 minutes. I need to use a bigger font when I cut and paste. :oops: 1. Did anyone equate 1) Traditional and 2) Roth IRA contributions? No I just didn't want anyone to start...
by Doc
Wed Apr 09, 2014 11:56 am
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: Roth IRA - tax free - totally ?

Just want to totally understand the meaning of "tax free".. If you, ps56k (OP), 1. Put $10 in a traditional IRA and it grows to $20 [permanently], money you take from the $20 is income to you. 2. Put $10 in a Roth IRA and it grows to $20 [permanently], money you take from the $20 is NOT i...
by Doc
Wed Apr 09, 2014 10:45 am
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: Roth IRA - tax free - totally ?

Gains are tax free, whether they are traditional or Roth. That's the entire point of an IRA...it's a government protected investment vehicle that encourages people to invest for their retirement. If gains are taxed, then it's just like a taxable account where you are taxed on capital gains. This is...
by Doc
Wed Apr 09, 2014 10:07 am
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: "Optimizing Asset Location: Is it Worth the Effort?"

Bogleheads: Link to a recent study of asset location: Optimizing Asset Location: Is It Worth the Effort? Best wishes. Taylor Authors made the typical oversimplification of not rebalancing so the AA or risk factors over 20 year completely mask any tax effects. I did a back of the envelope calculatio...
by Doc
Wed Apr 09, 2014 9:47 am
 
Forum: Investing - Theory, News & General
Topic: Asset location strategies for taxes are OK; but not great
Replies: 27
Views: 2644

Re: Roth IRA - tax free - totally ?

It is just semantics. I meant the same thing you are saying. I was clearing up the comment that gains in a traditional IRA are tax free. They are taxable income (taxed) when withdrawn. Whether or not you need to pay tax on that income is a different story and a different question. Stop quibbling wi...
by Doc
Wed Apr 09, 2014 9:34 am
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: Roth IRA - tax free - totally ?

Let's be careful about terminology. Yes, all withdrawals from a Traditional IRA are taxed as ordinary income, but it's a mistake to say "gains" are taxed. Everybody pay attention to Phineas. There is a distinct difference between "gains" and "distributions". The tax on...
by Doc
Tue Apr 08, 2014 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2769

Re: How are you preparing for the coming bear market

This is a thinly veiled question about what people do to try and time the marke t... What can one do to prepare for the inevitable bear market other than have the appropriate amount of non-equity assets for their personal risk tolerance? Anything that you could possibly do , like stock piling cash,...
by Doc
Sat Apr 05, 2014 1:05 pm
 
Forum: Investing - Theory, News & General
Topic: How are you preparing for the coming bear market
Replies: 104
Views: 7862
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