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There seems to be a life-cycle component to asset location that I do not recall seeing discussed. When I retire I would prefer to have stocks in my taxable account for the usual reasons. In my peak earning years immediately prior to retirement I will be shifting my asset allocation to be more conser...

Um, no. You can figure out pretty closely what was paid for the gold coin on the day it was purchased. It's as if you wrote a check to the couple on that day. It's that impersonal. It's a far cry from making an effort to search for a unique, special gift that would be particularly liked or needed b...

Second http://www.all-ett.com/original-wallet/ I've had the original nylon for years. I actually bought a replacement when it developed some holes in the corners, but the "rip-stop" nylon is true to its name and they haven't gotten any bigger so the replacement is still sitting on the shel...

Based on a Consumer Reports review I bought their top recommendation: a Maytag HE washer for over $900. Two years later the control panel and a sensor broke. Replacement cost was $400. The repairman said there was no way of knowing if these replacement parts would last any longer than the originals...

The problem is you don't know the answer so you have to decide on your allocation and location before you know the fact. The more volatile the asset the more important it is to know how much of it you own precisely. If, through progressive taxation, the fraction of an asset that I own decreases as ...

You can rebalance between accounts at any time. Seems like you are looking at each account individually, which is not optimal. Unless I'm missing something, this doesn't offer any real benefits over more traditional tax-efficient investing. Sorry for not being clear. Within an overall asset allocat...

Also with tax DEFERRED accounts you don't own the whole account, the government owns a portion. It's not they hedge the risks, it's that you don't own 100% of the asset in the first place and that should be accounted for in your investment plan, something many if not most investors fail to do. Larr...

Looking at Principles of Tax-Efficient Fund Placement I am wondering if the recommendation would be different if the risks of different asset classes were considered. Let us say I want to maximize my after-tax income in retirement if my investments do poorly, and that if my investments do well I wil...

tadamsmar wrote:Should their be a role for projected earnings and risks in stock price setting?

Of course. The only role that past earnings play is to help predict future earnings.

The good and bad performers of the past all revert to the average future performance of their peers. This is not based on using some past mean as a predictor. It say forget about the past relative means as a tool to predict the future relative means. Random walks evidence this type of RTM. Exactly....

If you were 55 and your savings increased 50% overnight, would you... It surely depends. ⋅ Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't. ⋅ Unfortunately, many 55yo are not that close to meeting savings goals/ob...

If you were 55 and your savings increased 50% overnight, would you... It surely depends. ⋅ Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't. ⋅ Unfortunately, many 55yo are not that close to meeting savings goals/ob...

I'm wondering if people save more so they can be retire earlier or have a higher standard of living in retirement.

Jim The data holds up all over the world and for periods lot longer than that. MOM and carry trade have been well known phenomenons for many decades. The profitability factor is the only new one, with Novy-Marx "discovering" it. MOM also exists not only all around the globe (with if memor...

Ugh. There sure are a lot of interest rate timers on this forum. It would be timing if bonds were yielding 5% and you were sure rates were heading up to 7% so you bought a CD yielding 4%. Nobody is doing that. For stocks, future value is harder to predict the further out you go. It's basically a ra...

Antti Ilmanen, Ronen Israel and Tobias J. Moskowitz of AQR Capital Management studied the period 1990-2011 and found... Whatever theoretical explanation is offered, this is an analysis of what strategies paid off over the last two decades. I have great respect for Larry, but this seems more like &q...

Technically speaking there is a downside. By slicing and dicing you could create returns that lag the total market. Obviously someone could counter with "well I could exceed the total market return", but I think underperforming is more heavily weighted than outperforming. By investing in ...

If I pick their target 2035 fund for now, is .91 expense ratio bad? I mean compared to Vanguard everything seems bad. They have other funds with expense ratios in the low 20s too. Or should I pick something like 60-70% this http://www.icmarc.org/prebuilt/static/funds/profile/WH9800.html and the res...

Very sorry about your wife. You may feel old right now, but you are still young with much ahead of you. Regarding the Roth IRA, you can save $275 per year in IL taxes by contributing to a traditional IRA and immediately converting to a Roth since your income allows you to deduct the IRA contribution...

Tax Rate: 28% Federal, 3% IL The Illinois tax rate is currently 5%. If your plan allows in-service rollovers you can avoid that 5% (although you would be paying tax on appreciated assets) by contributing to traditional and rolling some over to a Roth every year. The Roth allows you to effectively s...

If the student loan interest is deductible then it's effectively pretty close to the credit card rate. I think you'd enjoy the experience of paying off the "bad" credit card debt completely, which could inspire you to make the sacrifices needed to prepay the student loan.

Making an extra 3.6% per year for three years (or 2% for five years) covers the difference between a 15% and 25% tax bracket, so redeeming your bonds more than 3-5 years early to save taxes would never make sense until interest rates are much higher than today, and even then if you can only re-inves...

And here's an article from January 2013 from the very same author suggesting the opposite. http://www.marketwatch.com/story/turbo-charge-your-retirement-portfolio-2013-01-16 Sounds like this guy can't make up his mind. I know, right? First he tells you to own some safe bonds, then he says half your...

I used to be a Merriman fan and listen to his podcasts. Lately I find him annoying. He comes across as being full of himself. He uses the same stale jokes over and over like calling SS Social Insecurity. He does portfolio reviews where he is critical of them because of lack of commodities and gold....

Take everything Paul Merriman says with a grain of salt, since his portfolios are all over the place, mostly whatever is hot, and cherry-picked to impress his clients (as are the promises of a 6-8% withdrawal rate. I include him in the Ray Lucia/Ben Stein area of entertaining hucksters, promising e...

§363.29 May Treasury close an account, suspend transactions in an account, or refuse to open an account? We reserve the right to take any of the following actions if, in our sole discretion, we deem the action to be in the best interests of the United States: (a) Refuse to open an account for any p...

If you can live with the liquidity characteristics, then I would hold your Commercial RE allocation in this, over a REIT fund. The latter will be more volatile and will not 'track' Commercial RE characteristics (income the major factor in returns, lower volatility than stocks, lower returns, higher...

Chan_va wrote:But the whole point of coming to Bogleheads is take the path less taken by the average investor.

Ironically, the Bogleheads philosophy is to use index funds to follow exactly the path taken by the average investor, only with lower expenses, risk, and effort.

You can't sell for a year, so you'll get the next inflation bump either way. The fixed rate will be at zero until TIPS real rates are at least 1% (they are currently negative). Unless you have something better than the current I-bond yield to do with your money while you wait you're likely better of...

When you first discovered Bogleheads you learned that investing was simple. Now you're learning that simple is not the same thing as easy.

"Single Event Risk" is not a real thing. Every moment you own the market, you are re-buying the market because you always have the option to sell. It seems to me that the misunderstanding about DCA is basically a misunderstanding about buying vs holding-- they are equivalent. The one &quo...

"Single Event Risk" is not a real thing. Every moment you own the market, you are re-buying the market because you always have the option to sell. It seems to me that the misunderstanding about DCA is basically a misunderstanding about buying vs holding-- they are equivalent. The one &quo...

jeffyscott wrote:I think it would be a "lose" if the next fixed rate is greater than 0.

Good point, but that would require a 1% increase in real long-term interest rates before November to happen.

If you buy I-bonds today they pay zero interest. Their only return is the inflation adjustment, which makes them a very price-stable version of a commodity like gold. If you have access to it, the TIAA Real Estate Account is also price-stable (short-term). It holds some bonds (less than 20%) for liq...

I just scheduled my I-bond purchase for January 30. Six months at 1.76% is close to a year in a savings account, so it's a draw if the next inflation component is zero and a win otherwise.

crowd79 wrote:If the next I-Bond rate is indeed 0.00%, it is probably worth it to sell your current bond holdings and take a 3 month penalty and park it in a savings account for a few months.

Unless your current I-bond holdings plus your planned purchases exceed $10,000.

For a state like Illinois that doesn't tax Roth conversions (considered a distribution), does this mean I can contribute to a regular 401k (tax-free) and then convert it to a Roth (paying federal taxes only) and thereby avoid state taxes on the contribution?

Given your current marginal rate there is no reason not to defer. The only reason to defer less would be if you expected your marginal rate in retirement to be higher than your marginal rate now, in which case you would want to use Roth accounts instead. If you retire early you will want to have fun...

Thanks, #Cruncher. I'll wait to see the December CPI on January 16 but probably go ahead and buy in late January.

According to http://www.savings-bond-advisor.com/cpi-inflation-update/ the November CPI-U is down .51% from September. If this trend holds and the next I-bond inflation adjustment is zero, then bonds purchased in January would have a return for the first year of 0.88%. Is that low enough that people...

Your suggested portfolio looks great. My one concern is if you will actually be able to implement your rebalancing plan, since selling overweighted assets will generate taxable gains for your parent and they may not want to pay additional taxes to buy an out-of-favor asset class. You may be better o...

An example of that is a working couple, age 50, with 15 years left on their mortgage (most would agree 15 years is a long-term situation) - what we would call a perfectly normal situation until the primary breadwinner loses their job and due to circumstances beyond their control are unable to find ...

I think the liquidity argument is important. I would not deplete my taxable accounts to pay down the mortgage, and I would not skip contributions to tax-advantaged accounts to pay it down either. Given a taxable account of more than twice the mortgage balance while maxing-out tax-advantaged contribu...

I think there is a logical way to merge these. If you count the "emergency fund" as part of the asset allocation, then a young investor should be entirely in safe assets (savings bonds, a ladder of CDs, or 80% bonds / 20% stocks) until they have several months of living expenses. Once that...

What Rick Ferri and others before him are basically saying is that young investors should forgo the higher expected return of stocks, because he's worried they might do something stupid. But it's better advice to tell young investors not to do something stupid :D I tried that on my kids when they w...

I bought several packs of Gold Toes from BJs. Algorithmic complexity of laundry dropped big time. I tried this but after a few months the socks faded differently, and it looks odd if I match random socks. I have to sort the socks by shade of gray and then pair them starting with the two darkest etc...

Those on this board tend to enjoy living frugally, saving, and investing. Reading this board will not make you more frugal if your natural inclination is to max out your credit cards, live for today, and try to get rich quick. Bogleheads also enjoy the freedom of knowing it's not worth their time tr...

Hint: Stickies do not show up at http://www.bogleheads.org I think this nails it. It took me months to discover the individual forum listings with the sticky posts, while there is a big attractive list of "Post a New Topic" links on the main http://www.bogleheads.org page. The sticky post...

After all, we know that stable value funds are riskier than money market funds simply because stable value funds have higher returns, thereby confirming once again the often overlooked, yet profound, link between risk and return. Asserting that stable value is higher risk because it is higher retur...

1. Do I really need REIT in stocks and what is the desire % for REIT? 2. TIPS are added to the portfolio because of the inflation going ahead with 40bil from FED? Is that right? Do I need them? 3. VWESX fund is for corporate bonds. According to Bogle interview corporate will be good for next couple...