Search found 5508 matches

by Doc
Tue Jun 30, 2015 10:48 am
Forum: Investing - Theory, News & General
Topic: Bond ETF Thoughts
Replies: 5
Views: 523

Re: Bond ETF Thoughts

The application would permit BlackRock funds that have unanticipated cash needs to borrow money from sister funds that have excess cash. One would presume that the lending fund would receive collateral for the loan. While that makes the lending fund "less liquid" in the borrower actually ...
by Doc
Tue Jun 30, 2015 9:26 am
Forum: Investing - Theory, News & General
Topic: Are REITs necessary in a portfolio? Why?
Replies: 31
Views: 1969

Re: Are REITs necessary in a portfolio? Why?

According to the Rick Ferri article linked to by Rx for Investing, REITs are about 3% of the Total Stock Market, but Commercial Real Estate is about 13% of the investment market. Thus his suggestion is that adding up to 10% REITs lets you do a better job of tracking the market. Others have commente...
by Doc
Sun Jun 28, 2015 8:45 am
Forum: Investing - Theory, News & General
Topic: Why not Vanguard tax managed mutual funds ?
Replies: 12
Views: 1659

Re: Why not Vanguard tax managed mutual funds ?

Instead of having in a taxable account VTIAX why not have VTCLX instead ? It`s a tax managed fund. The yearly taxes are lower and the total returns are higher. Warren Buffett and John Bogle must be aware of this and I wonder why both of them did not mention this fund. Any responses ? Did you really...
by Doc
Wed Jun 24, 2015 10:32 am
Forum: Investing - Theory, News & General
Topic: Vanguard Tax-Managed Small-Cap Fund
Replies: 15
Views: 1430

Re: Vanguard Tax-Managed Small-Cap Fund

I don't know whether this will sound like market timing, but I wouldn't touch US Small-Caps at the moment .. Price/earnings around 21, against growth estimates around 12 .. Even if the Small-Cap index lost 50%, I'd only just call that a buying opportunity .. Very high valuations - looks to me like ...
by Doc
Wed Jun 24, 2015 9:43 am
Forum: Investing - Theory, News & General
Topic: Vanguard Tax-Managed Small-Cap Fund
Replies: 15
Views: 1430

Re: Vanguard Tax-Managed Small-Cap Fund

Go to Morningstar's page for VTMSX http://portfolios.morningstar.com/fund/summary?t=VTMSX&region=usa&culture=en-US Pick any/all tabs and enter VB on the compare or benchmark pull down. The biggest difference is in market cap. Avg Market Cap USD 1,647 Mil for VTMSX and 3,154 Mil for VB. As ex...
by Doc
Sat Jun 20, 2015 6:34 pm
Forum: Investing - Theory, News & General
Topic: "Will Your Bond Holdings Come Through in the Clutch?"
Replies: 10
Views: 2828

Re: "Will Your Bond Holdings Come Through in the Clutch?"

Also, the gain is fleeting, so if you don't rebalance from the Treasuries, it is a temporary gain. Once rates start to rise, whenever that may be, bonds are guaranteed to lose value during the period of rising rates. As I said when CDs with terms of the same length as the duration of Total Bond or ...
by Doc
Sat Jun 20, 2015 4:12 pm
Forum: Investing - Theory, News & General
Topic: Does the tax efficiency of fund placement depend on your time horizon?
Replies: 24
Views: 1810

Re: Does the tax efficiency of fund placement depend on your time horizon?

But at current yields, it is very close, and often the more important criteria is whether your 401(k) has better stock or bond options, and how taxes work in your state. (If you are in a high-tax state, you may pay 21% tax on qualified stock dividends and capital gains, but 0% on munis from your st...
by Doc
Sat Jun 20, 2015 3:50 pm
Forum: Investing - Theory, News & General
Topic: Does the tax efficiency of fund placement depend on your time horizon?
Replies: 24
Views: 1810

Re: Does the tax efficiency of fund placement depend on your time horizon?

If putting your TBM in taxable pushes stocks into IRA or 401k, the stock earnings are taxed at a different and higher rate than they would have been taxed in taxable. As far as I know, this is a fact and there is no way around it. There is NO tax on your share of the earnings in an IRA or 401k. If ...
by Doc
Sat Jun 20, 2015 2:20 pm
Forum: Investing - Theory, News & General
Topic: Does the tax efficiency of fund placement depend on your time horizon?
Replies: 24
Views: 1810

Re: Does the tax efficiency of fund placement depend on your time horizon?

If all the money is for retirement, hold a total stock index and/or a total international stock index in taxable. These two asset classes are chosen because they are very tax-efficient , no matter what your time horizon. That's the answer. It really is that simple if all the money is for retirement...
by Doc
Sat Jun 20, 2015 8:42 am
Forum: Investing - Theory, News & General
Topic: Does the tax efficiency of fund placement depend on your time horizon?
Replies: 24
Views: 1810

Re: Does the tax efficiency of fund placement depend on your time horizon?

livesoft wrote: So it's not about the growth. Instead, it's all about the taxes.

How come it only took you 12 words to say what I said in a gazillion? :D
by Doc
Sat Jun 20, 2015 8:37 am
Forum: Investing - Theory, News & General
Topic: "Will Your Bond Holdings Come Through in the Clutch?"
Replies: 10
Views: 2828

Re: "Will Your Bond Holdings Come Through in the Clutch?"

... I do think CDs or high yielding stable value funds, if available, are superior in risk/reward. From Taylor's post: "Investors typically view their bond portfolios through the lens of their total portfolios --that is, they look to their bond holdings to lose as little as possible, or perhap...
by Doc
Sat Jun 20, 2015 8:26 am
Forum: Investing - Theory, News & General
Topic: Does the tax efficiency of fund placement depend on your time horizon?
Replies: 24
Views: 1810

Re: Does the tax efficiency of fund placement depend on your time horizon?

It seems to suggest that most people should put all stocks in taxable and all bonds in tax-advantaged. https://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement doesn't say that. Look at the table Approximate Tax Efficiency Ranking for Major Asset Classes Short term bonds are in th...
by Doc
Fri Jun 19, 2015 9:31 am
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 25
Views: 3708

Re: Vanguard's government bond index funds

There is a Morningstar article from yesterday that gives a somewhat alternative viewpoint on the original question. ... but investors must remember that their goals for their bond portfolios may not be the same as their fund managers'. While many fund managers may prioritize a decent (or at least po...
by Doc
Thu Jun 18, 2015 8:41 am
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 25
Views: 3708

Re: Vanguard's government bond index funds

At Schwab I'm using actual Treasury notes or high volume ETF's - neither Schwab's own or Vanguards because of low trading volume. As a single data point, I bought some SCHR a couple of weeks back and had no real issues trading it. I originally put in an order at the bid and got back to work. Came b...
by Doc
Wed Jun 17, 2015 4:06 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 25
Views: 3708

Re: Vanguard's government bond index funds

I prefer pure Treasury obligations if I can get them. A small amount of agency doesn't bother me much nor does a very small amount of MBS whether agency or not. (Note that agency might be mortgage pass throughs or straight agency debt.) In bonds I actually prefer active management over index funds a...
by Doc
Wed Jun 17, 2015 10:07 am
Forum: Investing - Theory, News & General
Topic: Vanguard announces plans for money market fund lineup
Replies: 15
Views: 3025

Re: Vanguard announces plans for money market fund lineup

So I can move from Prime MM to the Institutional Prime MM, lowering ER from 16 bp to 10 bp, raising current yield from 2 bp to 8 bp. What is the downside to moving? Will is be an entirely new account number? So will I need new checks, and will I need to modify my direct deposit? Vanguard Prime Mone...
by Doc
Tue Jun 16, 2015 5:43 pm
Forum: Investing - Theory, News & General
Topic: M* X-ray Stock Intersection Inaccurate for anyone else?
Replies: 3
Views: 429

Re: M* X-ray Stock Intersection Inaccurate for anyone else?

I haven't looked at this tool in years. I have a vague recollection that they took it down for some time while they revamped it. It's just not something I worry about. I certainly wouldn't worry much about something that has a very low portfolio holding.
by Doc
Mon Jun 15, 2015 8:14 am
Forum: Investing - Theory, News & General
Topic: Vanguard Bond funds Style change
Replies: 26
Views: 3426

Re: Vanguard Bond funds Style change

Here's a link to Morningstar's The Morningstar® Bond Indexes "fact" sheet.

https://corporate.morningstar.com/us/do ... tSheet.pdf

While interesting I didn't' find any actionable data in there. But it's only 2 pages.
by Doc
Mon Jun 15, 2015 8:08 am
Forum: Investing - Theory, News & General
Topic: Vanguard Bond funds Style change
Replies: 26
Views: 3426

Re: Vanguard Bond funds Style change

The Guv'nt made me do it. Doc, I understand the impact of more 30-yr bonds on the Total Bond fund duration but confused as to why Int Term Bond Index (VBIIX) increased as well since 30 year bonds are not in it's benchmark. If a fund is near one of the limits a lot of different things can push it ov...
by Doc
Sun Jun 14, 2015 5:11 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 2986

Re: Does break-even duration matter if bond fund payments are not re-invested?

As a clarification when I said duration does not requiring reinvestment I was addressing the calculation. The calculation uses the yield to maturity in the calculation and it does not require reinvestment of coupon payments. But a bond fund usually does not hold bonds until maturity but rather sells...
by Doc
Sun Jun 14, 2015 4:58 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Bond funds Style change
Replies: 26
Views: 3426

Re: Vanguard Bond funds Style change

They may have been the same thing, but they are not with the change. How can bond funds of 5 and 14 years respectively both have extreme interest rate sensitivity ? I don't understand. Some time ago M* changed their style box procedures. It involved changing the name as well changing some other pro...
by Doc
Sun Jun 14, 2015 8:14 am
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

As retiredjg has pointed out, we can't have a realistic discussion about this if we ignore tax-deferred accounts, which are likely to make up a large portion of typical Bogleheads' tax-advantaged accounts; they make up almost all of mine. So here's one reason I don't want higher expected return ass...
by Doc
Sat Jun 13, 2015 5:45 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

Anyways, any thoughts on this thought experiment? ogd wrote: Rather than running the numbers with tax adjustment that will just end up disputed, can I prove my point another way? Suppose that there was an unrealistic IRS rule, 12345(f), that allowed you to switch every year growth you that you've e...
by Doc
Sat Jun 13, 2015 5:11 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

After 20 years: $530k total, $265k t-bills, $265k stocks in both cases Stocks in taxable: taxable account has ($430k total) ($265k stocks) ($165k t-bills). Roth has $100k t-bills T-bills in taxable: taxable account has $100k bills. Roth has ($430k total) ($265k stocks) ($160k t-bills) Note that in ...
by Doc
Sat Jun 13, 2015 12:55 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

As for the Roth tax-adjustment, it's a bit of a rabbit hole I think. The adjustment is very complex and ever-changing; for example the point you are making about the IRS sharing the risk is greatly diminished if you are far away from your cost basis, like I am right now -- are you supposed to chang...
by Doc
Sat Jun 13, 2015 12:15 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

The T-bills do not remain stuck at $100k, as visible even after one year. They grow due to the rebalancing from stocks. There's the problem. You have the stocks in tax advantaged. When you rebalance you do it in that account. The original $100k t-bills in taxable doesn't grow from the rebalancing. ...
by Doc
Sat Jun 13, 2015 9:30 am
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

0 Year: $100k t-bills in taxable, $100k equities in ROTH 1 Year: $100k t-bills in taxable, $110k equities in ROTH 1 Year + 1 day (rebalance): $100k t-bill in taxable, $105k equites + $5k t-bills in ROTH Ok you have more tax advantaged space but in both cases you pay tax on the $100k t-bills. The ex...
by Doc
Fri Jun 12, 2015 5:16 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

The largest factor is the fact that stocks can enlarge your tax-advantaged space to a much greater degree; eventually you can end up with more bonds tax-advantaged than you would have had if you would have started and stayed 100% bonds. I don't think this does you any good. 0 Year: $100k t-bills in...
by Doc
Fri Jun 12, 2015 4:37 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

See the WIKI "Tax-adjusted asset allocation" https://www.bogleheads.org/wiki/Tax-adjusted_asset_allocation Asset location Once you adjust for the after-tax value, it does not matter which assets you put in a traditional IRA or 401(k) and which you put in a Roth. ... It still does matter wh...
by Doc
Fri Jun 12, 2015 4:10 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

Regarding the risk aspects: If you look at your portfolio on a consistent tax basis I think the risk factors go away.
by Doc
Fri Jun 12, 2015 4:07 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

Thank you Kevin. I didn't read back throughout the thread, but as I recall, EmergDoc's "bonds go in taxable" theory only works right if the portfolio is tax-adjusted. I would express this thought a little differently. If you don't tax adjust your portfolio you will get the wrong answers. ...
by Doc
Fri Jun 12, 2015 3:58 pm
Forum: Investing - Theory, News & General
Topic: Why not iShares Core Total USD Bond Market ETF (IUSB)?
Replies: 10
Views: 924

Re: Why not iShares Core Total USD Bond Market ETF (IUSB)?

Well, you are expressing Swedroe's concerns, not shared by Ferri. The M* report states that the fund holds 7% high yield. I assume that bothers you. Only 27% US Treasuries but 22% Securitized and 30% Over 20 years - a lot of it's portfolio bothers me. http://portfolios.morningstar.com/fund/summary?...
by Doc
Fri Jun 12, 2015 11:48 am
Forum: Investing - Theory, News & General
Topic: Why not iShares Core Total USD Bond Market ETF (IUSB)?
Replies: 10
Views: 924

Re: Why not iShares Core Total USD Bond Market ETF (IUSB)?

Unlike funds that track the Aggregate Index, such as iShares Core U.S. Aggregate Bond AGG, the fund includes a broader range of higher-yielding assets , such as high-yield corporate bonds, eurodollar and emerging-markets (U.S. dollar and U.S. listed) bonds, 144A securities, as well as a broader swa...
by Doc
Fri Jun 12, 2015 9:10 am
Forum: Investing - Theory, News & General
Topic: 30 year tips auction: 6/11; yield 1.125%?
Replies: 36
Views: 4774

Re: 30 year tips auction: 6/11; yield 1.125%?

May I ask, just how much are you purchasing at these auctions? $10K, more, less? If one is funding a Roth, you only have so much in annual contributions to such an account. My 401k offers a brokerage window, but the fees and use of it are onerous making it somewhat cumbersome to add there. The mini...
by Doc
Thu Jun 11, 2015 1:29 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 2986

Re: Does break-even duration matter if bond fund payments are not re-invested?

Yes. The bond loses value, but less every year than it did in the old yield regime. If the question here is about amortizing the market premium of bonds then that amortization is determined from the purchase price and YTM at purchase. Subsequent changes in market yield have no effect on the annual ...
by Doc
Thu Jun 11, 2015 12:49 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

And part of the issue is that the calculation was done for ten years. If you hold equities for 30 years, you get more benefit of deferral on the capital gains (and you may avoid the tax entirely if you leave the equities to your heirs or charity). For the 6% equity return the effective annualized t...
by Doc
Thu Jun 11, 2015 12:34 pm
Forum: Investing - Theory, News & General
Topic: Vang Total Bond Market, trailing its benchmark?
Replies: 7
Views: 1796

Re: Vang Total Bond Market, trailing its benchmark?

baw703916 wrote:The TSP F Fund (which tracks the same index ...)

It's not quite the same index. Vanguard changed to the float adjusted version some time ago.

See the asterisk note in HurdyGurdy's post.
by Doc
Wed Jun 10, 2015 3:38 pm
Forum: Investing - Theory, News & General
Topic: Roth IRA question
Replies: 9
Views: 964

Re: Roth IRA question

I don't have it set up personally, but I just logged into vanguard and they have direct deposit available. Unless you are referring to a different type of account or something else that I am misunderstanding? It's available on the mutual fund platform but no longer available if you have switched to...
by Doc
Wed Jun 10, 2015 3:32 pm
Forum: Investing - Theory, News & General
Topic: Assessing TIPS fund performance - Is this too simple?
Replies: 21
Views: 1494

Re: Assessing TIPS fund performance - Is this too simple?

If declining duration is what you want, you can accomplish it with multiple funds. I'll admit that this is a little harder with TIPS because there are few funds, but it can still be done to a reasonable degree -- decide every time you balance the long and the short fund what duration you want, and ...
by Doc
Wed Jun 10, 2015 3:21 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

I thought the same thing so I wrote an R program to do the rebalancing and check out whether EmerDog's article still pretty much held water. With todays low rates (and over quite a range), it is still true even with rebalancing that stocks in a Roth and bonds in taxable will give more after TAX mon...
by Doc
Wed Jun 10, 2015 1:24 pm
Forum: Investing - Theory, News & General
Topic: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)
Replies: 154
Views: 16843

Re: Bonds go in taxable (whitecoatinvestor aka EmergDoc article)

It is clear that over a wide range of assumptions in returns that stocks in TD accounts (or a Roth) and bonds in taxable will give me MORE AFTER TAX MONEY than the opposite Many people who come up with this conclusion fail to take rebalancing into consideration. The higher return and zero tax on ga...
by Doc
Wed Jun 10, 2015 1:16 pm
Forum: Investing - Theory, News & General
Topic: Roth IRA question
Replies: 9
Views: 964

Re: Roth IRA question

Yes, Vanguard lets you set up direct deposit once the account is set up. They'll give you a routing and account number, and you can have your employer drop some amount in each paycheck. Alternately, you can set it up for them to debit your checking account a fixed amount periodically. The direct de...
by Doc
Wed Jun 10, 2015 7:49 am
Forum: Investing - Theory, News & General
Topic: Assessing TIPS fund performance - Is this too simple?
Replies: 21
Views: 1494

Re: Assessing TIPS fund performance - Is this too simple?

In order to tell if I am having a good day or a bad one with my investment, I believe I need to know ... Have you seen #cruncher's thread "Re: Consistent Yield & Duration to Help Choose TIPS Fund" https://www.bogleheads.org/forum/viewtopic.php?f=10&t=104845 He presents much of the...
by Doc
Tue Jun 09, 2015 5:38 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 2986

Re: Does break-even duration matter if bond fund payments are not re-invested?

Does break-even duration matter if bond fund payments are not re-invested? At the risk of giving you a shovel when you should just stop digging the answer is NO. The hole is "break even duration". That phrase is an oxymoron. (The) Macaulay duration is calculated by adding the results of m...
by Doc
Tue Jun 09, 2015 3:12 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 2986

Re: Does break-even duration matter if bond fund payments are not re-invested?

I think reinvestment (and the changing market yields) still sneaks in when calculating the value of the dividend payments , if one wants to be precise. Right if you can be precise. The present value of that dividend payment is the cash paid divided by (1+YTM)^n. The future value of that payment is ...
by Doc
Tue Jun 09, 2015 2:56 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 2986

Re: Does break-even duration matter if bond fund payments are not re-invested?

Duration is calculated using a mathematical formula that doesn't matter whether you make the reinvestment assumption. The number is the same. Investors like to use this "duration" number as a guide to something called "point of indifference". Electron illustrates what happens if ...
by Doc
Tue Jun 09, 2015 2:24 pm
Forum: Investing - Theory, News & General
Topic: Does break-even duration matter if bond fund payments are not re-invested?
Replies: 32
Views: 2986

Re: Does break-even duration matter if bond fund payments are not re-invested?

nobsinvestor wrote: So most of us understand the concept that if a bond fund is held to its average duration, you should at least break even from the time of investment. But, that is assuming the yield is re-invested automatically, right? What if one is taking the monthly bond payments and not re-i...
by Doc
Mon Jun 08, 2015 9:03 am
Forum: Investing - Theory, News & General
Topic: TIPS Funds Yielding 6+%
Replies: 30
Views: 2408

Re: TIPS Funds Yielding 6+%

7. The fund's yield will include adjustments to the principal value of Treasury Inflation-Protected Securities (TIPS) due to changes in the government's inflation rate. Because of these inflation adjustments, the fund's yield may be more volatile than yields quoted on nominal (non-inflation adjuste...
by Doc
Sun Jun 07, 2015 3:53 pm
Forum: Investing - Theory, News & General
Topic: Vanguard/Schwab Bond ETF Price Anomaly
Replies: 15
Views: 838

Re: Vanguard/Schwab Bond ETF Price Anomaly

stlutz wrote: I think the combo fund/ETFs work less well for bond funds than they do for stock funds because the maturity range of the bond fund compels them to unload what's in their portfolio. That is, with the VG fund/ETF, they have to sell the bonds when they reach 3 years of maturity. This doe...

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