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Jim Cramer recommends Vanguard - Almost!

Once in awhile you have to give credit where credit is do just like Jim Cramer did on tonight's show. A lady calls in wanting to know which of all the many index funds she should invest in because the "list is so long." After rambling a bit about the ETF SPX, he winds up the call with - &q...
by FinancialDave
Wed Nov 19, 2014 10:01 pm
 
Forum: Investing - Theory, News & General
Topic: Jim Cramer recommends Vanguard - Almost!
Replies: 1
Views: 1077

Re: "Schwab Intelligent Portfolios"

One of the things I'm not looking forward to in retirement is deciding how to draw down my annual needs from my portfolio at the beginning of each year. I know current thinking is draw from taxable, then tax advantaged, then Ross. I've been told by more than one CPA and tax attorney (non involved i...
by FinancialDave
Wed Nov 19, 2014 5:58 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: "Schwab Intelligent Portfolios"

There are different types of fundamental weightings -- one which I really like is the equally weighted S&P 500 RSP -- this is very easy to understand and is not suspect (at least in my mind) to someone's interpretation of what is the best fundamental parameter (such as P/E, cash flow, etc.) In t...
by FinancialDave
Tue Nov 18, 2014 3:44 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: "Schwab Intelligent Portfolios"

Riptide, While my purpose is not to give you investing advice, as you need to do what is right for you, what it appears at least from this viewpoint is someone looking for the "next best thing." Some may call it reaching for returns or seeking more alpha. IMHO it is the best way to lower y...
by FinancialDave
Tue Nov 18, 2014 2:27 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: Value Investing or Dividend Investing - Which Is It?

Ok, let me be more clear for those that don't have access to SA or what to register. This is a 100% equity portfolio made up of the following 3 Vanguard Funds, which were selected for a value tilt, similar to what one might find in a portfolio made up of all dividend stocks, but without having to bu...
by FinancialDave
Sat Nov 15, 2014 12:17 pm
 
Forum: Investing - Theory, News & General
Topic: Value Investing or Dividend Investing - Which Is It?
Replies: 4
Views: 828

Value Investing or Dividend Investing - Which Is It?

Is it one in the same, or are you stuck on just one side of the fence?

http://seekingalpha.com/article/2682355-setting-up-a-portfolio-that-millennials-can-relate-to

The short story is I pick a Value-tilted Vanguard 3-Fund Portfolio as a play on Dividend Investing.



fd
by FinancialDave
Sat Nov 15, 2014 1:21 am
 
Forum: Investing - Theory, News & General
Topic: Value Investing or Dividend Investing - Which Is It?
Replies: 4
Views: 828

Re: Is Boglehead investing becoming the conventional wisdom?

Up until a week ago, I had never heard of Boglehead investing. In my little part of the world practically NO ONE invest on their own like you all and like I am trying to learn from you. I only know of two others that were DYI investors. Most everyone paid professionals (??) Even talking about dyi i...
by FinancialDave
Fri Nov 14, 2014 12:05 am
 
Forum: Investing - Theory, News & General
Topic: Is Boglehead investing becoming the conventional wisdom?
Replies: 23
Views: 2990

Re: Is Boglehead investing becoming the conventional wisdom?

I guess the question could be: What would happen if everyone indexed? Would that not mean that everyone would get the market return? If that were to happen, an ambitious individual would have the bright idea that he could do better simply dropping the worst stock and doubling up on the best stock i...
by FinancialDave
Fri Nov 14, 2014 12:03 am
 
Forum: Investing - Theory, News & General
Topic: Is Boglehead investing becoming the conventional wisdom?
Replies: 23
Views: 2990

Re: Tax-loss harvesting

Abraham: Tax-loss harvesting can be simple or complicated. I prefer "simple." This is all you need to do (2 steps): 1. Before year-end, sell any taxable fund with a loss and put the proceeds in a safe liquid investment. 2. After 30 days, repurchase the fund (or another fund if you prefer)...
by FinancialDave
Mon Nov 03, 2014 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: If I am a LT investor, should I forgo a bond allocation?

I will say that an 85% stock/15% long-term bond portfolio had a slightly higher return than a 100% stock portfolio (9.93% vs. 9.84%) from 1972-2012 with lower volatility. Most of the people are totally missing the reason. A small bond percentage will result in a higher (not less) risk adjusted retu...
by FinancialDave
Thu Oct 30, 2014 6:35 pm
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2208

Re: REIT Index Fund in a SEP IRA vs Roth IRA

Except one is pre tax, and one is post tax. They are not the same thing, and, depending on how gains from REIT's are taxed, one might be MORE advantageous than the other, are they not? Is it not recommended that REIT's NOT be held in taxable accounts? Johnny, In re-reading all your posts, I think t...
by FinancialDave
Thu Oct 30, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: REIT Index Fund in a SEP IRA vs Roth IRA
Replies: 9
Views: 604

Re: If I am a LT investor, should I forgo a bond allocation?

I would like to re-stress a couple of important points that have been said by others, and I agree with wholeheartedly: 1. SS is a bond investment that most people accumulate over time. This said, as a young investor, there is good reason to be 100% stocks in your investment asset allocation if this ...
by FinancialDave
Thu Oct 30, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2208

Re: 401k rollover

Well you did see the part where the OP expressed a desire to do multiple rollovers from the 401k to do DCA so if the funds there were in stocks there and used to purchase more stocks then how would DCA happen? Somehow, there seems to be a disconnect on what people thinks goes on during a 401(k) rol...
by FinancialDave
Thu Oct 30, 2014 12:44 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k rollover
Replies: 21
Views: 1241

Re: If I am a LT investor, should I forgo a bond allocation?

Yet another question is how certain you are of your horizon. Life or deep economic woes might force a short horizon on you, and then what. This can be either health or extended unemployment (the latter well correlated with crashes), or even a golden opportunity that you don't have any liquid money ...
by FinancialDave
Thu Oct 30, 2014 12:10 am
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2208

Re: REIT Index Fund in a SEP IRA vs Roth IRA

I can't see how putting a REIT in a tax deferred account (IRA) or a tax free account (ROTH) is going to make much difference. In one case there are no taxes and the other case the taxes are at your ordinary income tax rate - neither account is affected by the type of investments. fd So that was my ...
by FinancialDave
Wed Oct 29, 2014 11:55 pm
 
Forum: Investing - Theory, News & General
Topic: REIT Index Fund in a SEP IRA vs Roth IRA
Replies: 9
Views: 604

Re: REIT Index Fund in a SEP IRA vs Roth IRA

I can't see how putting a REIT in a tax deferred account (IRA) or a tax free account (ROTH) is going to make much difference. In one case there are no taxes and the other case the taxes are at your ordinary income tax rate - neither account is affected by the type of investments.

fd
by FinancialDave
Wed Oct 29, 2014 7:38 pm
 
Forum: Investing - Theory, News & General
Topic: REIT Index Fund in a SEP IRA vs Roth IRA
Replies: 9
Views: 604

Re: "Schwab Intelligent Portfolios"

I would like to thank place holder for his post as to Strategy to get a $2500 bonus from Schwab. If you had at least 50k to bring in they have an offer to cover that: https://rewards.fidelity.com/offers/cashrewards If you're under that then your options are elsewhere like Etrade which will give you...
by FinancialDave
Wed Oct 29, 2014 7:29 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: A Backtest of the Dividend Growth Model, 1871-2010

Not sure why Simplegift says buybacks only add about 0.3% to total returns. Buybacks are a few hundred basis points to price. Can clarify? Actually I am not sure why buybacks are guaranteed to add anything to returns - there is absolutely no guarantee of that! If earnings drop the return will actua...
by FinancialDave
Wed Oct 29, 2014 5:27 pm
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 70
Views: 4445

Re: 401k rollover

I don't follow your logic -- let's say you had $200k in a 401k and you cashed out of your 100% equity position about 10 days ago, they sent the check to you (like my 401k had to do), you then sent it to Vanguard, today it sit's at Vanguard in a conservative fund -- you just lost $10,000 (5%) of you...
by FinancialDave
Wed Oct 29, 2014 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k rollover
Replies: 21
Views: 1241

Re: "Schwab Intelligent Portfolios"

Would this convince anyone here to open a taxable account/IRA with Schwab (or move their taxable account/IRA from Vanguard to Schwab)? I suspect the answer to the question is yes, only because you use the term "anyone" - which would only take one and I seem to remember a number of people ...
by FinancialDave
Wed Oct 29, 2014 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: "Schwab Intelligent Portfolios"

Schwab website says it's scheduled to rollout Q1 2015.

https://intelligent.schwab.com/

fd
by FinancialDave
Wed Oct 29, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: "Schwab Intelligent Portfolios"

I just read that this morning, and it sounds quite interesting.

fd
by FinancialDave
Wed Oct 29, 2014 11:37 am
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5900

Re: 401k rollover

I think it would make more sense to roll it over all at once but put it in a conservative fund in the Roth and then do your DCA (actually I don't like DCA but that's not the question) by a series of conversions. I don't follow your logic -- let's say you had $200k in a 401k and you cashed out of yo...
by FinancialDave
Wed Oct 29, 2014 11:28 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k rollover
Replies: 21
Views: 1241

Re: 401k rollover

This is something that can be done from a legal standpoint however the plan rules might not allow it but why would you want to? dollar cost average. I view it as no different than if i had a lump sum to invest. I wouldn't want to invest it all at once, but would spread it out over time. In the long...
by FinancialDave
Tue Oct 28, 2014 4:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k rollover
Replies: 21
Views: 1241

Re: A Backtest of the Dividend Growth Model, 1871-2010

Going back 140 years is a little beyond my confidence that we are comparing apples to apples, just because of how much corporate dividend policies have changed in the last 100 years. How much would the curves change if you only went back 60 years? Also, I can't tell from the charts what this is indi...
by FinancialDave
Mon Oct 27, 2014 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 70
Views: 4445

Re: If holding cash, do you want a Great Depression?

I hold cash for a slightly different reason in my retirement "Income" account. It is not that a want a Recession or a Depression, but if some bad things would happen to the stocks or funds that are generating the income, I would use some of that cash to purchase other income generators, wh...
by FinancialDave
Mon Oct 27, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: If holding cash, do you want a Great Depression?
Replies: 50
Views: 4044

Re: IBM: Stock Buybacks Gone Wrong?

The other thing I'm noticing these days with my settled allocation and recent volatility is that the capital losses harvested in 2009 aren't really being depleted; enough ongoing harvesting to pay for rebalancing for the foreseeable future. So this make dividends even more annoying, with the 23.8% ...
by FinancialDave
Thu Oct 23, 2014 3:00 pm
 
Forum: Investing - Theory, News & General
Topic: IBM: Stock Buybacks Gone Wrong?
Replies: 65
Views: 4134

Re: Importing yields from treasury.gov into Google spreadshe

Don't kick yourself, but it's right there on the yield curve page: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2013 :happy You need to click where it says "If you are having trouble viewing the above XML in your browser, ...
by FinancialDave
Thu Oct 23, 2014 11:23 am
 
Forum: Investing - Theory, News & General
Topic: Importing yields from treasury.gov into Google spreadsheet
Replies: 18
Views: 1546

Re: IBM: Stock Buybacks Gone Wrong?

I think it's going to take a lot more than stock buyback mistakes to kill IBM. This company still has immense technical and financial resources, and what is probably the best corporate R&D organization in the world. It may have lost it's way but that is far from being dead. Many large companies...
by FinancialDave
Wed Oct 22, 2014 7:20 pm
 
Forum: Investing - Theory, News & General
Topic: IBM: Stock Buybacks Gone Wrong?
Replies: 65
Views: 4134

Re: IBM: Stock Buybacks Gone Wrong?

Unless you are the one that sells their shares back to IBM it is NOTHING like a dividend. The company can buy back shares right up until the time it goes bankrupt and if you don't sell any of your shares you will get nothing! fd FD: see my message above. This is no different than reinvesting divide...
by FinancialDave
Wed Oct 22, 2014 4:38 pm
 
Forum: Investing - Theory, News & General
Topic: IBM: Stock Buybacks Gone Wrong?
Replies: 65
Views: 4134

Re: Why do Engineers Think They’ll Be Good at Picking Stocks

Collectively we just aren't aware of it in general. I wish I had found it years ago.


So true!
by FinancialDave
Wed Oct 22, 2014 4:04 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 135
Views: 10618

Re: Risk in a high dividend stock portfolio

Hi all, I'm a few years (2 to 5) until retirement, I'm wondering about high dividend stocks. Looking at the site, http://www.dividend.com/dividend-stocks/high-dividend-yield-stocks.php and eliminating say the first 12, just because the dividend is so high you will see 80 stocks paying between 15.69...
by FinancialDave
Wed Oct 22, 2014 3:15 pm
 
Forum: Investing - Theory, News & General
Topic: Risk in a high dividend stock portfolio
Replies: 19
Views: 2534

Re: IBM: Stock Buybacks Gone Wrong?

Remember that a buyback is just another way to pay a dividend. Why do you think that IBM management would have made better investments with those profits than their shareholders would have? At the end of the day I trust investors to allocate capital more than I trust managers to. Unless you are the...
by FinancialDave
Wed Oct 22, 2014 2:55 pm
 
Forum: Investing - Theory, News & General
Topic: IBM: Stock Buybacks Gone Wrong?
Replies: 65
Views: 4134

Re: Putting Active Management to the Test

It's fun to see a true believer in active management. I didn't know there were any left. I figured all those active fund investors were just ignorant. ...either you believe the many books and studies that have already been done, or you want to try it out for yourself I am unaware of work relevant t...
by FinancialDave
Tue Oct 21, 2014 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Putting Active Management to the Test
Replies: 108
Views: 13100

Re: Putting Active Management to the Test

It's fun to see a true believer in active management. I didn't know there were any left. I figured all those active fund investors were just ignorant. My question is how will the results of this change anyone's investing strategy . If 3/4s of his funds beat their benchmark, will someone go after ac...
by FinancialDave
Mon Oct 20, 2014 11:14 am
 
Forum: Investing - Theory, News & General
Topic: Putting Active Management to the Test
Replies: 108
Views: 13100

Re: Past Performance

Hundreds of millions of investors have already answered this question in the most meaningful way possible - by their dollar votes on the world's stock and bond markets. Just pick broad index mutual funds. It appears as you say investors have already voted with their wallets as the largest held stoc...
by FinancialDave
Sat Oct 18, 2014 5:59 pm
 
Forum: Investing - Theory, News & General
Topic: [how should new investors select funds w/o] Past Performance
Replies: 6
Views: 570

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

FWIW - One can buy 5-yr TIPS bonds and 10-yr TIPS bonds each year for 5 years and end up with a 10-yr TIPs ladder at the end of 5 years. I began building mine at age 65 and will complete it just before I turn 70 at which time I will begin to receive Social Security. The two combined will served as ...
by FinancialDave
Sat Oct 18, 2014 12:53 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6668

Re: "The best response to market volatility"

Thanks for the reminders, Taylor. As a new investor, this has been my first market downturn, and came right after putting in a lump sum to max out my IRA and deferring 90% of my paycheck to my 401k to get as much in as possible in by January. Realizing I had already lost 6% of what I invested in su...
by FinancialDave
Sat Oct 18, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: "The best response to market volatility"
Replies: 27
Views: 3376

Re: Wealthfront updates tax loss harvesting software

Is the gain as much as those white papers suggest? Probably not. Let's be real, there is absolutely no way to predict whether there will be ANY gain at all. By the very nature of this "harvesting" you are selling your investments at a loss! That is the one true fact of this discussion. fd
by FinancialDave
Fri Oct 17, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Wealthfront updates tax loss harvesting software
Replies: 11
Views: 1026

Re: "The best response to market volatility"

This volatility has had exactly zero affect (at least so far) on my retirement income account, which is driven solely from dividends. This type of volatility (which seems to be currently all news driven - as opposed to some systemic or fundamental problem like we had in 2008) affects dividends very...
by FinancialDave
Fri Oct 17, 2014 3:10 pm
 
Forum: Investing - Theory, News & General
Topic: "The best response to market volatility"
Replies: 27
Views: 3376

Re: Wealthfront updates tax loss harvesting software

I suspect their software is really "churning" this week!

fd
by FinancialDave
Thu Oct 16, 2014 6:35 pm
 
Forum: Investing - Theory, News & General
Topic: Wealthfront updates tax loss harvesting software
Replies: 11
Views: 1026

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

Just placed my order. Here is a guide to help decide how much each bond will likely cost at auction: 1) Bloomberg shows the current price on the secondary at 113 + 8/32 = 113.25 2) The inflation factor is 1.02062 3) The accrued interest per bond is 2.936 per $1,000 of face or 0.2936 per $100 of fac...
by FinancialDave
Thu Oct 16, 2014 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6668

Re: Dealing with Volatility

Here is some good Boglehead advice: Dealing with Volatility If you think you shouldn't be nervous about market downturns, don't kid yourself. Everyone becomes concerned (except short-sellers). The question is what you do about it - or don't do. Rick Ferri Wow Rick, I would think short-sellers shoul...
by FinancialDave
Thu Oct 16, 2014 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: Dealing with Volatility
Replies: 14
Views: 1133

Re: "The best response to market volatility"

This volatility has had exactly zero affect (at least so far) on my retirement income account, which is driven solely from dividends. This type of volatility (which seems to be currently all news driven - as opposed to some systemic or fundamental problem like we had in 2008) affects dividends very ...
by FinancialDave
Thu Oct 16, 2014 6:14 pm
 
Forum: Investing - Theory, News & General
Topic: "The best response to market volatility"
Replies: 27
Views: 3376

Re: Putting Active Management to the Test

Your uncertainties #2 & #3 just above the chart are of a major concern for me in any test like this.

fd
by FinancialDave
Wed Oct 15, 2014 5:15 pm
 
Forum: Investing - Theory, News & General
Topic: Putting Active Management to the Test
Replies: 108
Views: 13100

Re: starting 401(k) and need advice on taxable savings

Also, let's say I wanted to hold stocks and bonds separately in a taxable account instead of in a balanced fund. Is there any good option for a bond fund in a taxable account for someone in the 28% bracket? Would i-Bonds over time and TSM in the taxable be a better option? I am not sure I-bonds wou...
by FinancialDave
Wed Oct 15, 2014 3:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: starting 401(k) and need advice on taxable savings
Replies: 8
Views: 417

Re: TSP Withdrawal and RMD Question

You do want to make sure that he has no other IRA accounts, that will require RMD's as well.

fd
by FinancialDave
Wed Oct 15, 2014 2:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP Withdrawal and RMD Question
Replies: 12
Views: 621

Re: TSP Withdrawal and RMD Question

I agree you should not need to worry about the word "approximate" if the account has the correct birthdate of your father. The tax notice says that the TSP will take care of it: If you make a partial withdrawal, withdraw your entire account in a single payment, begin withdrawing it through...
by FinancialDave
Wed Oct 15, 2014 2:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP Withdrawal and RMD Question
Replies: 12
Views: 621

Re: starting 401(k) and need advice on taxable savings

I haven't received any responses, so I thought I might simplify my questions: - If I wanted to build a three-fund portfolio for my 401k from the above list, I would choose VTSSX, but don't know which bond fund to choose and don't see a viable international index. Because of this, should I choose a ...
by FinancialDave
Wed Oct 15, 2014 1:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: starting 401(k) and need advice on taxable savings
Replies: 8
Views: 417

Re: Crazy asset-based fees in my 401K!

Dear BH friends I need your help. New physician here who just started my first job. Next month I'm eligible for my employers 401k plan which is through The Standard. After careful study of the plan I'm seeing what seems to me as some crazy high fees! For example, one of the index funds we have acce...
by FinancialDave
Wed Oct 15, 2014 1:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Crazy asset-based fees in my 401K!
Replies: 49
Views: 2570
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