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by Doc
Fri May 22, 2015 5:26 pm
Forum: Investing - Theory, News & General
Topic: Not your father's Total Bond Market Fund anymore
Replies: 47
Views: 4803

Re: Not your father's Total Bond Market Fund anymore

"Roughly the same time period" is key. The starting and ending points matter. There are several posts about cherry picking, head spinning and the time period concept that Rob makes. The point of a rolling return chart is that it eliminates these problems (Except perhaps for the head spinn...
by Doc
Thu May 21, 2015 12:54 pm
Forum: Investing - Theory, News & General
Topic: Not your father's Total Bond Market Fund anymore
Replies: 47
Views: 4803

Re: Not your father's Total Bond Market Fund anymore

Doc, please comment on the relatively liquidity of government issues and corporate issues, their proportions in Total Bond and Intermediate-Term Bond Index, and whether liquidity should be a concern for bond mutual fund investors today. Yes, Total Bond has relatively less risk and less return than ...
by Doc
Thu May 21, 2015 12:07 pm
Forum: Investing - Theory, News & General
Topic: Not your father's Total Bond Market Fund anymore
Replies: 47
Views: 4803

Re: Not your father's Total Bond Market Fund anymore

There are a bunch of questions that are all related. You're tracking the wrong index. Vanguard Total Bond Market Index (VBTLX ) tracks the Barclays US Aggregate Bond Index I don't understand. What's the problem? Spell it out for me. How is it relevant to compare TBM to Intermediate Term? The post is...
by Doc
Thu May 21, 2015 8:07 am
Forum: Investing - Theory, News & General
Topic: Not your father's Total Bond Market Fund anymore
Replies: 47
Views: 4803

Not your father's Total Bond Market Fund anymore

The impact of '08 still continues after some eight years. Three year rolling return chart for Vanguard Total Bond Market fund compared to the category average: http://i62.tinypic.com/1zbvtxx.jpg http://quotes.morningstar.com/chart/fund/chart?t=VBTIX&region=usa&culture=en_US&dataParams=%7...
by Doc
Tue May 19, 2015 7:48 am
Forum: Investing - Theory, News & General
Topic: criteria for picking an active fund
Replies: 22
Views: 1457

Re: criteria for picking an active fund

3) Picking the highest performer has proven not to work. But eliminating the poorest performance over multiple time frames is a different storey. I call this my "dog killer". Doc, this sounds more like a "performance killer" to me. ... You say that nine out of your ten picks con...
by Doc
Sun May 17, 2015 2:41 pm
Forum: Investing - Theory, News & General
Topic: criteria for picking an active fund
Replies: 22
Views: 1457

Re: criteria for picking an active fund

The article which might/would t be considered as self serving ... is funded by Fidelity)suggests that using two criteria to filter funds for consideration may result in picking an actively managed fund that will outperform I use a multi-factor approach. As an example: Your Screen (small value or bl...
by Doc
Fri May 15, 2015 3:47 pm
Forum: Investing - Theory, News & General
Topic: Why is Vanguard's Web Site So Bad?
Replies: 64
Views: 4955

Re: Why is Vanguard's Web Site So Bad?

Hello Vanguard! Are you reading this? If any Vanguard folks want to send me a PM, I am available for consulting on your improvement of your web site. I don't think you'd be so willing after you find out how low a rate they offer you. What they really need to do first is to spend enough money to hir...
by Doc
Fri May 15, 2015 3:34 pm
Forum: Investing - Theory, News & General
Topic: I'm so glad I bought bonds in taxable!
Replies: 13
Views: 3506

Re: I'm so glad I bought bonds in taxable!

I split the difference. Since I have a decent sized taxable account, I split my bonds approximately 50/50 between my 401K total bond fund and my taxable intermediate term tax exempt muni bond fund. I am in the 39.6% tax bracket therefor munis in taxable are a good option for me. I believe that this...
by Doc
Thu May 14, 2015 4:51 pm
Forum: Investing - Theory, News & General
Topic: I'm so glad I bought bonds in taxable!
Replies: 13
Views: 3506

Re: I'm so glad I bought bonds in taxable!

... if the majority of you tax-advantaged is in non-Roth the numbers will work out very different ... No. If the ROTH and tIRA/401K are compared on a consistent pre-tax or post-tax dollar basis for the contribution the two give the same after tax amount on withdrawal. The only difference is if a hi...
by Doc
Sun May 10, 2015 11:02 am
Forum: Investing - Theory, News & General
Topic: Swedroe: Credit Risk Not Worth It
Replies: 43
Views: 5233

Re: Swedroe: Credit Risk Not Worth It

While it's essential for investors to choose an asset allocation with the right amount of risk for them, IMO believing that stocks are risky and bonds are safe is a dangerous misunderstanding of fundamental investing principles. The problem is that a lot of Bogleheads here think that bonds means a ...
by Doc
Sun May 10, 2015 9:26 am
Forum: Investing - Theory, News & General
Topic: Swedroe: Credit Risk Not Worth It
Replies: 43
Views: 5233

Re: Swedroe: Credit Risk Not Worth It

Taylor Larimore wrote:Bonds let us sleep well. Stocks let us eat well.

Worth repeating.
by Doc
Sun May 10, 2015 8:18 am
Forum: Investing - Theory, News & General
Topic: Swedroe: Credit Risk Not Worth It
Replies: 43
Views: 5233

Re: Swedroe: Credit Risk Not Worth It

My main point is that it's not possible to build a portfolio that reliably smooths out dips from panics, so don't try. Get the overall risk level right and then diversify the types of risks in the portfolio as best you can. It is actually possible to build a portfolio that reliably smooths out dips...
by Doc
Sat May 09, 2015 5:31 pm
Forum: Investing - Theory, News & General
Topic: Swedroe: Credit Risk Not Worth It
Replies: 43
Views: 5233

Re: Swedroe: Credit Risk Not Worth It

It's always worth remembering that not all market participants experience "risk" in the same way. What might make sense for a pension fund might not make sense for my individual portfolio (for example, my future obligations are real while many institutions have future obligations that are...
by Doc
Fri May 08, 2015 5:27 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund now available
Replies: 49
Views: 7247

Re: Vanguard Ultra-Short-Term Bond Fund now available

Here's how it fared from 2007-2010, against Vanguard short-term investment grade (VFSTX) You can get protection from an equity bear by going ultra short or very high grade. How about a short treasury fund like Vanguard Short-Term Treasury Inv VFISX http://s9.postimg.org/t4y8cx2sf/Capture.jpg Vangua...
by Doc
Fri May 08, 2015 8:32 am
Forum: Investing - Theory, News & General
Topic: Calculating duration when rates are negative
Replies: 16
Views: 2611

Re: Calculating duration when rates are negative

richard wrote:How do you calculate duration (or modified duration) when rates are negative, such as on many TIPS today.


Use FICALC

http://www.ficalc.com/calc.tips
by Doc
Thu May 07, 2015 9:51 am
Forum: Investing - Theory, News & General
Topic: Vanguard Claims Title of World’s Largest Bond Fund
Replies: 20
Views: 2328

Re: Vanguard Claims Title of World’s Largest Bond Fund

The wide use of derivatives lets a fund reduce transaction costs and therefore take advantage of well known bond trading techniques like "riding the yield curve". An index fund can't do that. Moreover any large fund that has to or wants to make large moves without affecting the market prob...
by Doc
Thu May 07, 2015 9:03 am
Forum: Investing - Theory, News & General
Topic: Vanguard Claims Title of World’s Largest Bond Fund
Replies: 20
Views: 2328

Re: Vanguard Claims Title of World’s Largest Bond Fund

Regarding PTTRX, Isn't Vanguard Interm-Bond Index Fund the more appropriate benchmark? No. The duration is too long. Both PIMCO and Morningstar analyst use the BarCap Agg Index as the benchmark. If you want to get closer to the average credit quality while maintaining the duration the best choice ma...
by Doc
Tue May 05, 2015 10:43 am
Forum: Investing - Theory, News & General
Topic: Vanguard Claims Title of World’s Largest Bond Fund
Replies: 20
Views: 2328

Re: Vanguard Claims Title of World’s Largest Bond Fund

It's funny to me though that PTTRX has outperformed VBTLX the last 15 years, 10 years, 5 years, 3 years, 1 year, and YTD. And all but one rolling three year period for the last ten years at least. :? http://quotes.morningstar.com/chart/fund/chart?t=PTTRX&region=usa&culture=en_US&dataPar...
by Doc
Tue May 05, 2015 10:35 am
Forum: Investing - Theory, News & General
Topic: Concerned that Floating NAV Rules will disrupt Prime Money Market Fund?
Replies: 20
Views: 1197

Re: Concerned that Floating NAV Rules will disrupt Prime Money Market Fund?

I neglected to mention: Bond funds Interest accruing outside of NAV is not a rule, it's a choice of the fund manager. There are bond funds that include accrued interest in NAV. Vanguard's TIPS funds include accrued interest in NAV* FWIW Each fund declares a dividend every business day , with the ex...
by Doc
Tue May 05, 2015 8:30 am
Forum: Investing - Theory, News & General
Topic: Concerned that Floating NAV Rules will disrupt Prime Money Market Fund?
Replies: 20
Views: 1197

Re: Concerned that Floating NAV Rules will disrupt Prime Money Market Fund?

Of course different classes can have different NAV. Total Stock Market Admiral is $53.23, investor is $53.18. Bond funds usually don't show this, but that's because accrued interest is not part of the NAV . That's the key difference. Share classes that have a fixed ratio among them would also be po...
by Doc
Mon May 04, 2015 6:45 pm
Forum: Investing - Theory, News & General
Topic: Concerned that Floating NAV Rules will disrupt Prime Money Market Fund?
Replies: 20
Views: 1197

Re: Concerned that Floating NAV Rules will disrupt Prime Money Market Fund?

As for the two tickers, they are two share classes of the same funds. I have no idea what that means. The assets are not segregated. But when Vanguard has two share classes of the same fund, they can charge different expense ratios; companies with load funds can charge different loads, etc. etc. So...
by Doc
Sun May 03, 2015 2:19 pm
Forum: Investing - Theory, News & General
Topic: Vanguard governance and investor rights
Replies: 66
Views: 3401

Re: Vanguard governance and investor rights

How would revealing Vanguard compensation put the company at risk for losing talent? The risk only exists if Vanguard's compensation is lower such that Vanguard's executives know they can get better money elsewhere. For this reason, it's likely that Vanguard's compensation is about equal to other c...
by Doc
Sat May 02, 2015 11:51 am
Forum: Investing - Theory, News & General
Topic: Vanguard governance and investor rights
Replies: 66
Views: 3401

Re: Vanguard governance and investor rights

Who owns Vanguard Brokerage Service and do the holders of Vanguard Mutual Funds have any say in the operation of VBS or do they just pay for it?
by Doc
Thu Apr 30, 2015 3:08 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

For that calculation, you take the sum total of all income on lines 7-19 and 21 on the 1040, plus line 8b (tax-exempt interest). That's what I call "Other Income". It is everything except your SS benefits. When I did my "study" prior to this thread I also used "other income...
by Doc
Thu Apr 30, 2015 8:41 am
Forum: Investing - Theory, News & General
Topic: Vanguard Total Bond Market Index [Exp.Ratio] now only 0.07%
Replies: 20
Views: 3785

Re: Vanguard Total Bond Market Index fund is now only 0.07%

Is the 0.07% the e/r or the after tax total return? :twisted:
by Doc
Thu Apr 30, 2015 8:38 am
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

My personal plan is to convert traditional to Roth before taking SS; however, with large accounts there will have to be a balancing act... and I'm struggling to comprehend all the necessary calculations. The idea of delaying SS and using the time after retirement and before SS to convert one's 401K...
by Doc
Thu Apr 30, 2015 8:26 am
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

JW Nearly Retired wrote:Doc wrote:
Thanks guys,

I was right. I suffer from bias of the familiar. $48k in SS income - OMG.

Doc,
That amount is pretty darn ordinary for two people. The max for a couple who both waited until 70 would be a little more than $80k.
JW

Mrs. Doc was/is a school teacher. No SS worth mentioning.
by Doc
Wed Apr 29, 2015 4:33 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

For planning purposes I just assume all of my SS is taxable as ordinary income along with everything else. That way I don't stress over these marginal tax rates. Once I hit 70 and start SS, I can't really say "no" to whatever my taxable income will be as it will be comprised of RMD + Pens...
by Doc
Wed Apr 29, 2015 4:29 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

Thanks guys,

I was right. I suffer from bias of the familiar. $48k in SS income - OMG.
by Doc
Wed Apr 29, 2015 3:05 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

Most Bogleheads will have SS income greater than U - L. For them, the amount of "other" income you need (ordinary income + dividends + cap gains + tax exempt interest + etc) in order for 100% of your SS income to be 85% taxable is My favorite tax "gotcha" in this context is a Fe...
by Doc
Wed Apr 29, 2015 10:06 am
Forum: Investing - Theory, News & General
Topic: Spoke with a Schwab Representative...
Replies: 9
Views: 1844

Re: Spoke with a Schwab Representative...

From the OP's statement, I could infer that one needs $1 million held at Schwab in order for Schwab to let one purchase Vanguard Admiral share funds at Schwab. At least one Vanguard Admiral mutual fund is available at Schwab - Vanguard Total Stock Market Index Fund Admiral Shares. But for Instituti...
by Doc
Wed Apr 29, 2015 8:45 am
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

There is beginning to be some confusion here about tax rates for "ordinary" income and LTCG/QD. From The link in footnote 2 in David Grabiner's post: Worksheet A. A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Enter the amount from box 5 of all your Forms SSA...
by Doc
Tue Apr 28, 2015 12:15 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

Is there any advantage to arranging to receive income as capital gains or qualified dividends, rather than ordinary income? No with respect to the SS taxation. When you are "in the zone" every dollar of non-SS income makes $0.85 subject to tax regardless of what the non-SS income is. I th...
by Doc
Tue Apr 28, 2015 11:43 am
Forum: Investing - Theory, News & General
Topic: Vanguard governance and investor rights
Replies: 66
Views: 3401

Re: Vanguard governance and investor rights

We own a very small dollar amount of GE. Do we get to know the compensation of the senior executives and board members? I think the answer is yes. Our Vanguard fund ownership is 70 times the amount we own in GE. Do we get to know the compensation of the senior executives and board members of VGI? Fr...
by Doc
Tue Apr 28, 2015 10:52 am
Forum: Investing - Theory, News & General
Topic: NPV of Pension in the Retirement Portfolio
Replies: 16
Views: 980

Re: NPV of Pension in the Retirement Portfolio

You have to think of AA in terms of both risk and return. Dbr and others have alluded to this in one way or another. Larry Swedroe often talks about the need to set one's AA based on the individuals need and ability to assume risk. An annuity or pension reduce ones need to take risk but also may inc...
by Doc
Tue Apr 28, 2015 8:01 am
Forum: Investing - Theory, News & General
Topic: Confusion on Vanguard accounts - brokerage and mutual funds
Replies: 18
Views: 4115

Re: Confusion on Vanguard accounts

I've been a Vanguard customer for about a year. They contacted me about merging my accounts back in November and it went through seamlessly. But when I called them today about opening a new account for my mother, the rep told me that for now they are still opening new accounts "unmerged",...
by Doc
Mon Apr 27, 2015 9:45 am
Forum: Investing - Theory, News & General
Topic: Quickie to clarify confusion re: 0% long-term capital gains
Replies: 29
Views: 2214

Re: Buy and Sell of Vanguard Mutual Fund

. Jefmafnl, Yes, you should be able to put in a request to buy a Vanguard mutual fund and then a request to sell that same fund on the same day (at least I was able to do so in 2012 and 2013 to change some shares from non-covered to covered). However, be very careful to do it in the right order. As...
by Doc
Mon Apr 27, 2015 9:40 am
Forum: Investing - Theory, News & General
Topic: Quickie to clarify confusion re: 0% long-term capital gains
Replies: 29
Views: 2214

Re: Quickie to clarify confusion re: 0% long-term capital ga

.................................................. By the way I had absolutely no idea that the lousey one dollar from a fund distribution would make so much difference. Other than making you use the Sch D wksht, was there really much difference in the result? I had to use that wksht for the first ...
by Doc
Sat Apr 25, 2015 3:54 pm
Forum: Investing - Theory, News & General
Topic: Quickie to clarify confusion re: 0% long-term capital gains
Replies: 29
Views: 2214

Re: Quickie to clarify confusion re: 0% long-term capital ga

By the way I had absolutely no idea that the lousey one dollar from a fund distribution would make so much difference. That is interesting indeed. Physicists call that the butterfly effect. :) "In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a s...
by Doc
Sat Apr 25, 2015 3:38 pm
Forum: Investing - Theory, News & General
Topic: International Stock Poll: Emerging vs Developed Ratio
Replies: 55
Views: 2778

Re: International Stock Poll: Emerging vs Developed Ratio

AA 60/40 Domestic/International 80/20 Developed/EM 80/20 EM benefit +10% (Ten percent - yeh really? Would you like to buy a bridge over the East River?) .60*.20*.20*10%=24 bps Does it make any difference at all? If you have enough EM to make a difference in your total portfolio return you probably w...
by Doc
Sat Apr 25, 2015 2:38 pm
Forum: Investing - Theory, News & General
Topic: Quickie to clarify confusion re: 0% long-term capital gains
Replies: 29
Views: 2214

Re: Quickie to clarify confusion re: 0% long-term capital ga

I was only answering the OP's question on whether there is a cap on the 0% rate for LTCG. My answer is still correct, I believe. Schedule D worksheet would not apply. I believe that is only for gains on collectibles and trusts Or maybe if you had "Unrecaptured Section 1250 Gains" of which...
by Doc
Sat Apr 25, 2015 9:51 am
Forum: Investing - Theory, News & General
Topic: Quickie to clarify confusion re: 0% long-term capital gains
Replies: 29
Views: 2214

Re: Quickie to clarify confusion re: 0% long-term capital ga

If you have no capital gains, then you are correct. But if you have capital gains, you have to use the Qualified Dividends and Capital Gains Worksheet to compute your taxes. It has you compute an "Adjusted Taxable Income", which is line 43, less your capital gains and less your QDI, in ot...
by Doc
Thu Apr 23, 2015 8:41 am
Forum: Investing - Theory, News & General
Topic: 5 year tips auction: TBA 4/16/2015 Neg 0.480 Yield?
Replies: 8
Views: 1159

Re: 5 year tips auction: TBA 4/16/2015 Neg 0.480 Yield?

Would welcome correction if I'm mistaken, but hasn't the Fed's asset-buying program also included TIPS, so that their low yields, like the historically low yields of other Treasury-quality securities, are not just an outcome of the behavior of individual and bank/brokerage actors, but have also bee...
by Doc
Wed Apr 22, 2015 8:55 am
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund now available
Replies: 49
Views: 7247

Re: Vanguard Ultra-Short-Term Bond Fund now available

I don't understand the advantage of FDIC in this case: isn't FDIC insurance and Treasury bonds exposed to essentially the same default risk *? They're both backed the US government. ... Based on the information that is on Vanguard's web page (no criticism, they can hardly be expected to report the ...
by Doc
Tue Apr 21, 2015 9:14 am
Forum: Investing - Theory, News & General
Topic: VTIAX or VTMGX and VEMAX
Replies: 30
Views: 2843

Re: VTIAX or VTMGX and VEMAX

Vanguard has the numbers for every year. https://personal.vanguard.com/us/insigh ... ncome-2014 Replace 2014 with another year to compare the data for multiple years . Also, Vanguard reports its own after-tax returns, which are more accurate than Morningstar's because Vanguard does know how much of...
by Doc
Mon Apr 20, 2015 7:53 am
Forum: Investing - Theory, News & General
Topic: VTIAX or VTMGX and VEMAX
Replies: 30
Views: 2843

Re: VTIAX or VTMGX and VEMAX

I wanted to make the comment that any numbers reported by M* for "tax-cost" are suspect until proven otherwise. I would not use them myself. Don't use Morningstar's tax data; use the data from the fund provider. Morningstar doesn't always know about qualified dividends, and there are a fe...
by Doc
Sun Apr 19, 2015 12:05 pm
Forum: Investing - Theory, News & General
Topic: a consensus? (Bonds in different accounts)
Replies: 20
Views: 1508

Re: a consensus? (Bonds in different accounts)

So midareff's post above speaks to the possibility of having bonds/stocks in each type of account makes it (potentially) easier in terms of later rebalancing? Is that right? Because, he says, splitting them up between 'only stocks' in one and 'only bonds' in another will trigger a challenge in reba...
by Doc
Sat Apr 18, 2015 9:07 am
Forum: Investing - Theory, News & General
Topic: a consensus? (Bonds in different accounts)
Replies: 20
Views: 1508

Re: a consensus? (Bonds in different accounts)

dbr wrote:...

Agreed.
by Doc
Sat Apr 18, 2015 8:54 am
Forum: Investing - Theory, News & General
Topic: a consensus? (Bonds in different accounts)
Replies: 20
Views: 1508

Re: a consensus? (Bonds in different accounts)

... advocate placing bonds in a tax deferred but not in a taxable (unless they are muni's) ...and I do think this is what the wiki information also says .... That is not what the WIKI says. If you have both tax-advantaged (retirement) and taxable accounts, you generally want to hold less tax-effici...
by Doc
Thu Apr 16, 2015 10:59 am
Forum: Investing - Theory, News & General
Topic: How to (diplomatically) challenge wife's active mgmt funds
Replies: 90
Views: 5387

Re: How to (diplomatically) challenge wife's active mgmt fun

$10,000 earning 8% a year for 20 years is $46,609.

$10,000 earning 1% less because of fees for the same 20 years is $38,366.

Say to Darling Wife, "is another $400 a year worth your effort?"

(Use her own numbers before you ask so you don't look foolish if the savings is only $10 a year.)

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