Bogleheads.org

Hi all, Been looking for this answer for a bit and I'm a little confused on compound interest.. I fully understand the power of compound interest and I've recently started my Roth IRA at a decently young age..What I fail to understand is how compound interest works if you own a set number of shares...

Is it too late to hit the April 30 deadline?

What I mean is that does TreasuryDirect count your purchase at time of purchase, or when the funds are withdrawn from your bank?

I trust Mint. Mint uses the same 128-bit encryption and physical security that most bank websites use - Bank of America, etc. And according to their website their practices are monitored and verified by TRUSTe and VeriSign, and supported by RSA Security. Besides, you can't make any trades or transf...

There are several portfolio aggregate tools, the biggest of which is probably Mint.com. Do you trust Mint or similar sites with your Vanguard information? There hasn't been any precedent of a financial account being compromised through Mint, so I wonder what Vanguard's response be if that were to ha...

I can't find the exact thread now. But I definitely got the feeling that the veteran Boglehead was questioning the wisdom of TSM in an IRA. There's nothing wrong with putting TSM in your IRA: http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement Step 5: Place tax efficient funds...

1. Rebalance with new money.

or

2. Buy a second group of TSM in your IRA, and/or Bonds in your taxable.

Why would people get chided for putting TSM in tax-advantaged space? (genuinely curious)

Furthermore, the risk of the first event - buy and the market goes up - is that you are not as rich as you could have been. The risk of the second event - buy right before the crash - is that your portfolio might never recover. Especially true if you suddenly need money because you have lost your j...

"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...

livesoft wrote:

JustinR wrote:If this were your logic, why wouldn't you sell all your equities and DCA back in on a regular basis?

Taxes.
Early redemption fees.
Frequent trading restrictions.

Right, but even in a hypothetical world where those things didn't exist, nobody would do that. And that's the point.

Let's say that you have a chunk of money to invest. I've heard that the benefit of spreading out the investment gradually over time, instead of investing it all at once, is that it helps to avoid going "all in" at one point in time that might turn out to have been bad timing (e.g., at a m...

"The key fact about DCA is that if it's a good idea, then it's also a good idea to take all your money out of stocks and DCA that money back in." This idea is so laughably absurd that if anyone tried to seriously claim it in an academic paper then they should be greeted by their peers wit...

If that were the case, then sure, keep 100% stocks, and at the end of every year, take it all (or some) out into cash, and slowly revamp up back to 100%. The key fact about DCA is that if it's a good idea, then it's also a good idea to take all your money out of stocks and DCA that money back in. T...

When you come up with a large sum, you don't know what your AA should be. The AA would be different from your previous AA because the large sum changed your ability, need and willingness to take risk. You can put the money in cash, study what your new AA should be, and then invest in a lump sum und...

Spades wrote:Oh good. I didn't know that's how they computed it. Agreed, I could always be reading more Bogle Heads or use the search function more.

No need to apologize. I'm sure a lot of people didn't know about it as I didn't catch it until like two days ago. Thanks for reminding us!

How would you reorganize the section? Your statement about misconceptions assumes that your 401(k) plan allows hardship withdrawals for a home purchase. I added a sentence that hardship withdrawals are defined in the 401(k) plan. The IRS rules are complex which makes writing for the wiki somewhat t...

I think this section could be organized in a better way: http://www.bogleheads.org/wiki/401%28k%29#Early_withdrawals_and_loans The first bullet point is an incomplete thought. It tells you what hardship withdrawals include without explaining anything else about it like the consequences. For example,...

Seeing as how how much you can contribute to a Roth IRA (if you can even do it at all) depends on how much you make in the current calendar year, and you don't find that out until sometime early in the FOLLOWING year, how do you plan around that? Especially for the reduced tier range of $10-15k in w...

Many Vanguard funds have a decent amount of REIT in them. Some funds, like Small-cap Value ( VSIAX ) for example, has up to 15% REIT. Over several funds, this can grow to a noticeable size. When figuring out your asset allocation how do you deal with the overlap, if you want to have a separate REIT ...

Hi: We maintain market returns data in the wiki. The US stock returns data for CRSP, and Dow Jones indexes do not become available until the index provider publishes factsheets for the fourth quarter 2012. Here is the US stock market returns page. US index returns - 2012 - Bogleheads Additional ret...

Does anyone know why, if you start with a balance of 0, XIRR gives you 0% no matter what you do?

Try it, set your first value to $0.

I wonder why Vanguard doesn't have return in percentage form anywhere on the site, other than "1 year". Or am I missing something?

Thanks guys. My pleasure. Question about XIRR. It's annualized right? Yes. Is there a way to un-annualize it or another formula or function so that I can get total return similar to the 107% figure above (using total lifetime spreadsheet data)? In other words, I'm not looking for "average annu...

Thanks guys. Question about XIRR. It's annualized right? Is there a way to un-annualize it or another formula or function so that I can get total return similar to the 107% figure above (using total lifetime spreadsheet data)? In other words, I'm not looking for "average annual return" (is...

Ok thank you for all of your opinions.

I agree now, employer contributions are considered contributions. The return shouldn't be about my personal financial performance, but how well my portfolio did. Also, I'm sure that's how the 401k carrier calculates returns as well.

How do you link annual returns for a total lifetime return?

Does Rick's formula for linking quarterly -> annual work the same way?

So if you had annual returns of 20%, 30%, -5%, and 40% it would be:

1.2 * 1.3 * .95 * 1.4 - 1 = 107%?

That doesn't seem right to me for some reason.

When calculating your portfolio's return, do you consider employer contributions part of the "contributions" or do you just treat it as part the gains? I'm leaning towards the latter since they're not your contributions. They are not investment gains. They are contributions made on your b...

When calculating your portfolio's return, do you consider employer contributions part of the "contributions" or do you just treat it as part the gains?

I'm leaning towards the latter since they're not your contributions.

Return=(ending balance - starting balance - contributions) / (starting balance + contributions) Dividends reinvested need not be concerned about, but put into another account would need to be factored into this. I have this formula: (End - Start - Contributions) / (Start + (Contributions/2)) OR (En...

... Are there any reasons not to do any of the following things now, or rather... 1) Buy in taxable December has a lot of distribution dates. You should usually wait until after a distribution date to buy, so you don't "buy the dividend. Read this Vanguard literature: https://personal.vanguard...

You say you might rebalance in taxable but then you don't list selling in taxable in your question. There may be tax reasons for or against selling in taxable. As for buying in taxable, 401k, or Roth, avoiding a wash sale would be one reason not to buy in any of those places, but that is not linked...

I'm planning on adding new money this weekend (and perhaps rebalance in my taxable and retirement accounts), which happens to be right before the new year. Are there any reasons not to do any of the following things now, or rather... would it be better to wait to do any of these things NEXT YEAR ? 1...

http://www.vanguard.com/pdf/icrpr.pdf
https://institutional.vanguard.com/iwe/pdf/FAIPRTP.pdf

From those papers, it seems that rebalancing quarterly at 10% bands, or annually at 10%, is optimal. At least as good as any other rule of thumb I guess.

There can be no simple answer because you didn't give enough information about why you need to rebalance and whether this is taxable account or not. I wait until an RBD to rebalance and do not rebalance based on a date on the calendar. Sorry. Both taxable and retirement. I rebalance across my entir...

Sorry to hijack the thread, but along the same lines...

I'm set to rebalance next week (last week of Dec). This would entail exchanging some funds and POSSIBLY contributing new money. Should I just wait til January 1?

Just looking for a simple answer, thank you in advance.

I'm looking for success stories of people who have won the lottery. Can anyone help me out?

I threw lump sum in there as well but I think that more applies to those who come into windfalls, not most people who would like to invest every paycheck. If there is another method I missed, please post. All input appreciated, thanks! Not sure I understand. If you invest every time you have enough...

Thanks for the writeup Kathleen.

Could you elaborate on why the Vanguard offices were so disappointing? What do you mean by institutionalized? I thought that the Vanguard offices were intentionally not fancy because of costs.

I don't know. Has anyone ever committed suicide from not being in the market during an upswing?

Aren't dividends the only way that equities compound?

What is your theory, plan, etc for knowing when to rebalance your portfolio? I can't really figure out how to figure it out. Do you require that a particular asset become some percentage too small or too large? How did you figure out how much was too small and how much was too large? For example, I...

On November 1st, or whenever they become known, enter the new Fixed and Inflation rates into cells C31 and D31; and enter TRUE into cell B31. Do the same for the Monthly Calculator, except it doesn't have the "Ready" column. I also have an I Bond Value Calculator web site which I'll updat...

Since no one has mentioned a spreadsheet that computes the monthly values, I polished up one I've been using and made it available. Below is a sample for the purchase tommoran2 says he made in March 2008. Not knowing the amount of his purchase I arbitrarily assumed $1,000. The spreadsheet makes no ...

People didn't see my edit, so I just want to update that on Sunday night, it worked.

I was swarmed with about 10 OTP codes in my inbox at once from the backlogged server. In any case it's working now. Thanks everyone!

I still get confused by this, it's not explained in the wiki, and people seem to have contradictory answers to exactly how it works. Say I slice and dice in four equal equity funds, with the rest in bonds: 18% Equity1 18% Equity2 18% Equity3 18% Equity4 28% Bonds How does the 5/25 rule apply to Equi...

I think the OTP system, or their automatic email server, is broken at the moment. Hopefully they get it fixed when they go back to work on Monday. I just tried and received the email immediately. A lot of sites do maintenance early Sunday morning and I am commonly unable to access several sites aro...

I have a question: for "age minus 10" does this simply mean subtract 10 from your age or does it mean subtract 10% from your age? Mr. Bogel wrote in "The Little Book of Common Sense Investing" that one could subtract 10% from one's age for one's bond allocation. The first one, s...

I believe the "problem" being reported here is that they fixed the problem. There have been many complaints about getting the One Time Password (OTP) whether they registered the computer or not. Registered computers are now recognized; One Time Passcode (OTP): You'll need a One Time Passc...

Is anyone not able to receive the OTP (one time passcode) in their email right now? I've tried having them resend it several times, and nothing.

If you lived in a large city you could hang out in a brokerage office. I remember the large boards they had up where you could follow the market. There were two brokerages I could visit during my lunch break, EF Hutton, and ML. I'm sure there were others nearby, as well. Sam I Am Interesting...alth...

If you lived in a large city you could hang out in a brokerage office. I remember the large boards they had up where you could follow the market. There were two brokerages I could visit during my lunch break, EF Hutton, and ML. I'm sure there were others nearby, as well. Sam I Am Interesting...alth...