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Re: How to weather market downturn with a high chance of lay

Let's forget about the fact that as the market trends higher over time, there will be times when it's price will be at the same as it was 2 or 10 years before -- but are you a fortune teller such that you know when that will occur, not likely. fd Hi Dave, I agree that I cannot predict when the mark...
by FinancialDave
Thu Aug 21, 2014 11:44 am
 
Forum: Investing - Theory, News & General
Topic: How to weather market downturn with a high chance of layoff
Replies: 33
Views: 1744

Re: How to weather market downturn with a high chance of lay

Dividends come from the stocks in the index. For instance in 2006 VTSMX paid $.524 income on a year ending price of $34.09. About 1.5% dividend. In 2008 the income was $.586 on a $21.80 year end price. About 2.7% dividend. Let's forget about the fact that as the market trends higher over time, there...
by FinancialDave
Wed Aug 20, 2014 9:36 pm
 
Forum: Investing - Theory, News & General
Topic: How to weather market downturn with a high chance of layoff
Replies: 33
Views: 1744

Re: How to weather market downturn with a high chance of lay

The alternative is that we can still stick to buy-and-hold, but time our buy during major recessions. For example, during boom times I can sock my money away in a 0.9% CD or savings account, and only buy into index fund when the index is low. May be this alternative sucks Thank you! This would tell...
by FinancialDave
Wed Aug 20, 2014 8:00 pm
 
Forum: Investing - Theory, News & General
Topic: How to weather market downturn with a high chance of layoff
Replies: 33
Views: 1744

Re: How to weather market downturn with a high chance of lay

The alternative is that we can still stick to buy-and-hold, but time our buy during major recessions. For example, during boom times I can sock my money away in a 0.9% CD or savings account, and only buy into index fund when the index is low. May be this alternative sucks Thank you! This would tell...
by FinancialDave
Wed Aug 20, 2014 5:08 pm
 
Forum: Investing - Theory, News & General
Topic: How to weather market downturn with a high chance of layoff
Replies: 33
Views: 1744

Re: How to weather market downturn with a high chance of lay

I'm a firm believer in the superiority of buy-and-hold over day-trading. However, it is unclear to me how the tracking-the-index strategy works well given the fact that during boom years we tend to have more money to invest, whereas in downturns we tend to have less (due to layoffs, less work for f...
by FinancialDave
Wed Aug 20, 2014 5:02 pm
 
Forum: Investing - Theory, News & General
Topic: How to weather market downturn with a high chance of layoff
Replies: 33
Views: 1744

Re: How the rich stay/get richer??

What matters is that the spending is significantly less than the total growth per year. It makes no difference whether that growth comes from dividends or appreciation, or both. Thanks SD, This is essentially the story - you are only withdrawing 2% of your portfolio, when the "tipping point&qu...
by FinancialDave
Wed Aug 20, 2014 12:33 pm
 
Forum: Investing - Theory, News & General
Topic: [live off dividends?] How the rich stay/get richer??
Replies: 62
Views: 4692

Re: Bogleheads Featured in Money Article

I am sorry to all if I just don't buy into the TIPS fascination in retirement and not many in their 80's are going to be managing a TIPS ladder -- remember a ladder has to essentially go on to beyond age 100, because what are you going to do if the ladder runs out?? Even though a bond ladder or a TI...
by FinancialDave
Tue Aug 19, 2014 10:57 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads Featured in Money Article
Replies: 21
Views: 2997

Re: Bogleheads Featured in Money Article

So for tip #3, the article (Mel) is recommending I-Bonds and TIPS for pre-retires. Is that regardless of timeframe and goals? I would think that TIPS and I-Bonds would be more important for retires than pre-retires. Actually, the article was supposedly aimed at retirees and near-retirees, and I res...
by FinancialDave
Tue Aug 19, 2014 2:57 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads Featured in Money Article
Replies: 21
Views: 2997

Re: Bogleheads Featured in Money Article

So for tip #3, the article (Mel) is recommending I-Bonds and TIPS for pre-retires. Is that regardless of timeframe and goals? I would think that TIPS and I-Bonds would be more important for retires than pre-retires. I-bonds - sure these are "somewhat" of an inflation hedge because they tr...
by FinancialDave
Tue Aug 19, 2014 12:38 am
 
Forum: Investing - Theory, News & General
Topic: Bogleheads Featured in Money Article
Replies: 21
Views: 2997

Re: Bogleheads Featured in Money Article

It is a good article.

I hope she felt she needed a much safer topic than the "fire-storm" created by the "Stop Passing Up This Great Deal" article in the Aug magazine.

fd
by FinancialDave
Mon Aug 18, 2014 7:46 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads Featured in Money Article
Replies: 21
Views: 2997

Re: Your biggest "Missed Money" event that still kills you?

Becoming a boglehead too late... The above is certainly true, but not buying into Microsoft at a now adjusted price of 7 CENTS, is one that still haunts me - only because I wanted to get into the IPO but could not and when it came out, it jumped up and didn't look back, so I just took it off my rad...
by FinancialDave
Mon Aug 18, 2014 11:55 am
 
Forum: Investing - Theory, News & General
Topic: Your biggest "Missed Money" event that still kills you?
Replies: 84
Views: 5889

Re: Online classes?

You might check out Coursera . The classes they offer are all through regular universities, and the one I took was both rigorous and excellent. They're also free, which is pretty amazing. This Personal Finance/Financial Planning course offered by Coursera starts this Wednesday, 8/20. Per the syllab...
by FinancialDave
Mon Aug 18, 2014 11:36 am
 
Forum: Investing - Theory, News & General
Topic: Online classes?
Replies: 14
Views: 1755

Re: Beat The Street's Permanent Portfolio

Beat The Street wrote:What a day to own long term STRIPS.....


It's all in your perspective - I would say "What a day to sell your long term STRIPS!"

:D

fd
by FinancialDave
Fri Aug 15, 2014 1:15 pm
 
Forum: Investing - Theory, News & General
Topic: Beat The Street's Permanent Portfolio
Replies: 36
Views: 3002

Re: Stop Passing Up This Great Deal - In Money Magazine

What matters is for tax purposes taking income when you might not want it. And to that point you should view those expected taxes on RMDs as one of your expenses and make sure you have safe liquid funds to pay for them just like you'd pay for food and housing. A better way to do this (IMHO) is to l...
by FinancialDave
Thu Aug 14, 2014 4:13 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Most Hated Brokerage Firm? [or one that you love]

When they talk about free trades it is only for a specific time frame (like 30 or 60 days) and it is only for so many trades (like 30 or 60 trades). That's wrong the Merrill Edge free trades are a certain number each month depending on the asset level: https://www.bankofamerica.com/preferred-reward...
by FinancialDave
Thu Aug 14, 2014 3:53 pm
 
Forum: Investing - Theory, News & General
Topic: Most Hated Brokerage Firm? [or one that you love]
Replies: 74
Views: 7142

Re: Beat The Street's Permanent Portfolio

Really, putting together a fund with 30% in 30 year treasuries - did pretty good in a bond bull market. I just don't see it doing so good in the next 20 and as you can see it seriously underperformed in 2013, which was just a little taste of an interest rate blip. Not for me, going forward. Let's ch...
by FinancialDave
Wed Aug 13, 2014 11:35 pm
 
Forum: Investing - Theory, News & General
Topic: Beat The Street's Permanent Portfolio
Replies: 36
Views: 3002

Re: Most Hated Brokerage Firm? [or one that you love]

I've only dealt with two brokerages, Vanguard and TD Ameritrade. I wouldn't say that I hated Vanguard, but I definitely preferred TD Ameritrade. The customer service at TD is way better. They give you cash and free trades for bringing money into your account. And VBS's web interface looks like it w...
by FinancialDave
Wed Aug 13, 2014 11:24 pm
 
Forum: Investing - Theory, News & General
Topic: Most Hated Brokerage Firm? [or one that you love]
Replies: 74
Views: 7142

Re: Short term vs Intermediate term bond funds

What are this forum's latest thoughts on short term bond funds (i.e. VBIRX and VTAPX) vs intermediate bond funds (i.e. VBTLX and VAIPX)..... I would venture to guess the "forum's latest thoughts" are the same as they were 6 months ago, last year, and the year before that. And this is docu...
by FinancialDave
Fri Aug 08, 2014 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: Short term vs Intermediate term bond funds
Replies: 27
Views: 2484

Re: Stop Passing Up This Great Deal - In Money Magazine

it looks like the online Money article already has the text corrected about 50/85% of SS benefits being taxable. Crazy idea: the tax rate on Social Security income is 50% to 85%. The crazy idea seems to be a "meme on the rise." It's spreading like wildfire. This confused the heck out of m...
by FinancialDave
Fri Aug 08, 2014 5:12 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

it looks like the online Money article already has the text corrected about 50/85% of SS benefits being taxable. Crazy idea: the tax rate on Social Security income is 50% to 85%. The crazy idea seems to be a "meme on the rise." It's spreading like wildfire. This confused the heck out of m...
by FinancialDave
Fri Aug 08, 2014 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: duration? [Help selecting bond funds]

This is just my opinion, but in the current environment, we should probably ask the same question traditionally asked about stocks: how soon will you need the money? If your need is further out than the average duration of the fund, you should be fine. For anything less than that, I’d go cash and C...
by FinancialDave
Fri Aug 08, 2014 4:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: duration? [Help selecting bond funds]
Replies: 13
Views: 887

Re: Roth IRA with Vanguard

I would start with the Total Stock Market, VTSMX, then once you get to $10k transfer to VTSAX and after that think about the rest of your AA. I personally think Wellington is a good addition to VTSAX to adjust your AA. These two funds can be all you need, or you could add some other "trim"...
by FinancialDave
Fri Aug 08, 2014 12:28 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA with Vanguard
Replies: 9
Views: 1027

Re: duration? [Help selecting bond funds]

I take it that your account is maybe at TDA so buying a Vanguard MF is a little more expensive ($50 transaction fee.) You don't need to jump into a bond allocation all at once, maybe just start with a small allocation and work up - depends on the amount of money you have in the account. Especially i...
by FinancialDave
Fri Aug 08, 2014 12:21 am
 
Forum: Investing - Help with Personal Investments
Topic: duration? [Help selecting bond funds]
Replies: 13
Views: 887

Re: Vanguard computer security

ResearchMed wrote:
The only other choice is Fidelity, although not helpful for Vanguard MFs.

RM


Not helpful is an understatement -- I don't know any "discount" broker who charges more to buy a Vanguard MF ($75) than Fidelity - and if they did I'm not sure I would call them a discount broker anyway!

fd
by FinancialDave
Thu Aug 07, 2014 11:27 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard computer security
Replies: 67
Views: 3596

Re: Vanguard computer security

I guess there are reasons after all for Vanguard's rock bottom expense ratio---relatively weak security, refusal to allow beneficiaries on taxable joint-accounts, etc. I'd gladly trade a small increase in expense ratio for more peace of mind. You can have the ER you want and the service you want by...
by FinancialDave
Thu Aug 07, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard computer security
Replies: 67
Views: 3596

Re: Inherited IRA RMD question

Does it make sense for me to move this bond into my taxable account as my RMD for next year even though doing so would be more than my RMD total using the current assumptions? I assume, that if I do decide to do that, since it is an individual bond, I should move it out as soon as possible in Janua...
by FinancialDave
Thu Aug 07, 2014 2:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA RMD question
Replies: 18
Views: 431

Re: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & B

telemark wrote:Yawn. What do you call an expert with a prediction?


A dart throwing monkey.

:idea:

That of course depends on what you are trying to predict.
by FinancialDave
Thu Aug 07, 2014 2:42 pm
 
Forum: Investing - Theory, News & General
Topic: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & Bonds
Replies: 13
Views: 1459

Re: Vanguard computer security

If I remember correctly , if the "cookie" is not found you must answer security questions so even if the hacker has your password they must also have the answers to your security questions. This seems to be correct from my experience. But it doesn't help much if your laptop is stolen, the...
by FinancialDave
Thu Aug 07, 2014 2:40 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard computer security
Replies: 67
Views: 3596

Re: Vanguard computer security

What bothers me is that how is even two "factor" security really secure if the hackers hack into the financial website you are visiting. While I like the RSA verification because it is always changing - the same way the financial institution verifies the signature (I assume by serial numbe...
by FinancialDave
Thu Aug 07, 2014 2:38 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard computer security
Replies: 67
Views: 3596

Re: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & B

Clearly no one knows what is really going to happen with interest rates . Interest rates could go up 4% (the Goldman scenario), they could go up 2% (the PIMCO scenario), or they could drop (the unexpected economic crisis scenario). There is no fact about which scenario will happen, only a range of ...
by FinancialDave
Thu Aug 07, 2014 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & Bonds
Replies: 13
Views: 1459

Re: Inherited IRA RMD question

Also, since the current value of the bond and it's 6% coupon is reflected in the $10,587 price, you could also just sell it and then you would not only have a lower income tax, you wouldn't have to worry about it.

fd
by FinancialDave
Thu Aug 07, 2014 12:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA RMD question
Replies: 18
Views: 431

Re: Inherited IRA RMD question

Ok,
After re-reading your post a number of times I finally came to that conclusion.
:oops:
by FinancialDave
Thu Aug 07, 2014 12:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA RMD question
Replies: 18
Views: 431

Re: Inherited IRA RMD question

Yes, it is time for another in my series of oddball questions. :D However, since this is a Muni bond, the growth is already tax free. Based my age and the current value of the aggregate account the RMD will be roughly $8,000. There is no such thing as "tax-free" growth inside an IRA, at l...
by FinancialDave
Thu Aug 07, 2014 12:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA RMD question
Replies: 18
Views: 431

Re: Inherited IRA RMD question

The answer above of course depends if somehow the Muni was bought with after tax money and the proper IRS form 8606 was submitted, otherwise all withdrawals are taxable.

fd
by FinancialDave
Thu Aug 07, 2014 12:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA RMD question
Replies: 18
Views: 431

Re: Inherited IRA RMD question

I am pretty sure you will be taxed 100% on the withdrawal from the IRA, whether it was a Muni or cash, should make no difference.

fd
by FinancialDave
Thu Aug 07, 2014 12:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA RMD question
Replies: 18
Views: 431

Re: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & B

To be honest I don't think the argument or even the counter-argument would affect my decision as there is no way to predict the short term future of stocks and bonds and whether they diverge or not has no relevance to the long term affect on your portfolio. What does have an effect in the long term ...
by FinancialDave
Thu Aug 07, 2014 12:16 pm
 
Forum: Investing - Theory, News & General
Topic: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & Bonds
Replies: 13
Views: 1459

Re: Confused about conflicting information

Hello All, It's the newbie again. :happy I have a quick question. I'm watching tv and playing a gentleman named Ed slot, he had a pbs special and as a contributor I got his dvd, retirement rescue. One area he has me baffled. 1) he recommended turning my 401K and IRA's into ROTH IRAS to avoid the ta...
by FinancialDave
Thu Aug 07, 2014 12:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Confused about conflicting information
Replies: 6
Views: 604

Re: Short term vs Intermediate term bond funds

Short duration, intermediate duration, eh, whatever. People have been fretting about this since 2010, but if you need bonds you need bonds. Are we still talking about this? I don't think we ever should stop talking about fixed income alternatives. For example, some folks (especially those in or nea...
by FinancialDave
Wed Aug 06, 2014 10:23 pm
 
Forum: Investing - Theory, News & General
Topic: Short term vs Intermediate term bond funds
Replies: 27
Views: 2484

Re: Short term vs Intermediate term bond funds

If I'm going to invest in a bond fund, I will use a fund's duration to guide me. In another words, I will not invest in a fund which has a duration longer than when I will need the money. If I anticipate that I will need the funds within the next few years, I'll use a short-term fund; if I don't an...
by FinancialDave
Wed Aug 06, 2014 6:28 pm
 
Forum: Investing - Theory, News & General
Topic: Short term vs Intermediate term bond funds
Replies: 27
Views: 2484

Re: Stop Passing Up This Great Deal - In Money Magazine

Being in a much higher tax bracket at retirement than I was early in the accumulating stage, I wish I had Roth accounts available to me then. I agree that if you cannot contribute to the limit of a Roth then contribute a higher amount in traditional. But if you can contribute the full amount in a R...
by FinancialDave
Wed Aug 06, 2014 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Short term vs Intermediate term bond funds

If I'm going to invest in a bond fund, I will use a fund's duration to guide me. In another words, I will not invest in a fund which has a duration longer than when I will need the money. If I anticipate that I will need the funds within the next few years, I'll use a short-term fund; if I don't an...
by FinancialDave
Wed Aug 06, 2014 12:19 pm
 
Forum: Investing - Theory, News & General
Topic: Short term vs Intermediate term bond funds
Replies: 27
Views: 2484

Re: Stop Passing Up This Great Deal - In Money Magazine

I haven't worked through all the combinations, which all have different breakpoints, but the impression I got when I worked it through once is that the "high marginal tax rate" caused by distributions increasing the portion of Social Security which is taxed, although very annoying, is als...
by FinancialDave
Tue Aug 05, 2014 12:10 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

The article is now available online, by the way: http://time.com/money/3080353/roth-401ks-great-retirement-account-not-using/ Mike, Thanks for the link. It would have been so much easier, and less confusing, if she had just changed the words "are added-in" to "exists," as it rel...
by FinancialDave
Tue Aug 05, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

Financial Dave, I totally agree with you that if the article didn't urge tax diversification, it really missed the boat! Impossible to calculate these marginal tax rates exactly in any case, because there are so many potentially interacting factors. It is definitely worth keeping in mind the qualit...
by FinancialDave
Mon Aug 04, 2014 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

I read the print article, since I'm currently receiving the magazine in an effort not to lose my airline miles on a particular airline. My impression was that it was all predicated upon someone who could max out all retirement accounts, and then invest further for retirement in taxable. This is a p...
by FinancialDave
Mon Aug 04, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

^I suppose you can try to argue that if one writes "Many retirees in the 15% bracket actually have a marginal rate of X% or Y% when SS taxes are added in," then the one and only mistake here is that X% and Y% should represent possible marginal rates on SS income, so something like 50% or ...
by FinancialDave
Mon Aug 04, 2014 12:53 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

Is there any way at all to access this article online? I don't subscribe to any print publications, and my local grocery store still has the July issue of Money for some reason. I spoke with Penny for this article with regard to how the ACA and taxation of Social Security can make a retiree's margi...
by FinancialDave
Mon Aug 04, 2014 12:11 am
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

Is there any way at all to access this article online? I don't subscribe to any print publications, and my local grocery store still has the July issue of Money for some reason. I spoke with Penny for this article with regard to how the ACA and taxation of Social Security can make a retiree's margi...
by FinancialDave
Sun Aug 03, 2014 8:03 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

Is there any way at all to access this article online? I don't subscribe to any print publications, and my local grocery store still has the July issue of Money for some reason. I spoke with Penny for this article with regard to how the ACA and taxation of Social Security can make a retiree's margi...
by FinancialDave
Sun Aug 03, 2014 7:39 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924

Re: Stop Passing Up This Great Deal - In Money Magazine

2) Some items in this article seem incorrect or misstated such as, "Roth 401ks leave just about all workers, regardless of age or tax bracket, with more money to spend in retirement than pretax plans do" "The Roth 401k should be considered the default investment" "Every dol...
by FinancialDave
Sun Aug 03, 2014 7:16 pm
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 10924
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