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Counting SS as Part Of Bond Allocation

Most investors calculate their asset allocation based on their holdings of equities and fixed income investments. Wouldn't it be more accurate to attribute future expected SS benefits as part of your fixed income allocation, even before receiving those benefits? This would significantly increase wei...
by LMK5
Sun Dec 01, 2013 1:42 am
 
Forum: Investing - Theory, News & General
Topic: Counting SS as Part Of Bond Allocation
Replies: 7
Views: 550

Re: Vanguard Portfolio Watch Bug

I think Portfolio Watch is generally pretty buggy. I actually called and asked about an unremitting bug recently--after working fine for months, Portfolio Watch suddenly decided that several of my individual equities were actually Canadian, which stayed that way for several weeks. I finally called ...
by LMK5
Sat Nov 30, 2013 12:55 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Portfolio Watch Bug
Replies: 11
Views: 728

Re: Vanguard Portfolio Watch Bug

Has anyone run into this error and notified Vanguard of it. They didn't seem to care too much about it when I told them via phone. There are so many things related to IT that Vanguard covers poorly, it makes me both angry and sad, then again I'm fairly resigned to it, like Livesoft. I rely on Vangu...
by LMK5
Sat Nov 30, 2013 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Portfolio Watch Bug
Replies: 11
Views: 728

Vanguard Portfolio Watch Bug

There is a bug in the Portfolio Watch Tool. It gives me the following message when I try to analyze my Vanguard 529 accounts which are listed as "Outside Investments" in "Balances and Holdings": "You have outside investments that are being classified as "Other." We...
by LMK5
Sat Nov 30, 2013 1:36 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Portfolio Watch Bug
Replies: 11
Views: 728

Re: Rebalancing in Taxable Accounts

Thanks for the excellent info. In your example though, when you sell stocks in the taxable account to raise cash you still have to pay CG tax. Also, if you exchanged bonds for the same amount of stock in your tax advantaged account that you sold in your taxable account, the AA would be different th...
by LMK5
Thu Jul 11, 2013 11:47 am
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Rebalancing in Taxable Accounts

You need to look at whole portfolio as one. Use fresh/new money to re-balance your account. Are you contributing to 401k every 2 weeks ? Why don't tilt to all bonds for few cycle in 401K account. Also as other mentioned, don't reinvest dividends in taxable account, let it go to MM or saving. There ...
by LMK5
Thu Jul 11, 2013 10:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Rebalancing in Taxable Accounts

How did you fair emotionally during the crash of 2008-2009? Did that event not spur you into making your taxable accounts less risky in spite of them being less tax efficient? I don't know your age, but if you are retirement or very close then I guess it doesn't matter that much. I'm about 10 years...
by LMK5
Thu Jul 11, 2013 10:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Rebalancing in Taxable Accounts

Like livesoft, my taxable account is all stocks with a little bit of cash (collected dividends etc). IMO, Money is money whether it is in your left pocket (taxable) or right pocket (tax advantaged). Stocks will be volatile whether they are held in taxable or tax advantaged. If there is a substantia...
by LMK5
Thu Jul 11, 2013 10:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Rebalancing in Taxable Accounts

What I mean by "equity heavy" is when my taxable accounts have more equity exposure than the total portfolio does. I like to keep my taxable accounts a little safer than my retirement accounts because any short term needs would be paid from the taxable accounts. So, if I have an overall A...
by LMK5
Wed Jul 10, 2013 5:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Rebalancing in Taxable Accounts

My experience is that one rebalances less frequently than annually if one uses bands. I don't know if it has been analyzed, but it might even be a good idea to avoid taxes by using somewhat larger bands when one is positioned to have to rebalance in taxable accounts. Rebalancing on a calendar sched...
by LMK5
Wed Jul 10, 2013 2:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Rebalancing in Taxable Accounts

This is all probably a personal choice. Our taxable accounts are 100% equity, so I am not sure what you mean by "but when I see my taxable accounts getting too equity-heavy". For us, we would only put non-equity in a taxable account if our tax-advantaged accounts were already 100% fixed i...
by LMK5
Wed Jul 10, 2013 2:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Rebalancing in Taxable Accounts

It's that time of year for me to do my annual rebalance. I look at my whole portfolio, including taxable and non-taxable retirement accounts, then rebalance to my objectives. I usually do this by rebalancing in the retirement accounts to avoid capital gains taxes, but when I see my taxable accounts ...
by LMK5
Wed Jul 10, 2013 10:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in Taxable Accounts
Replies: 15
Views: 1450

Re: Can I file form 8814 for child's K-1 income?

You need to file individual returns for the kids. A return reporting income from the trust will include Sched E page 2 identifying the trust as the source of the income. I disagree. Leaving aside the issue of any foreign tax credits, there is no reason a parent cannot file Form 8814 in this situati...
by LMK5
Fri Apr 05, 2013 10:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Can I file form 8814 for child's K-1 income?
Replies: 9
Views: 789

Re: Can I file form 8814 for child's K-1 income?

You need to file individual returns for the kids. A return reporting income from the trust will include Sched E page 2 identifying the trust as the source of the income. I disagree. Leaving aside the issue of any foreign tax credits, there is no reason a parent cannot file Form 8814 in this situati...
by LMK5
Fri Apr 05, 2013 1:26 am
 
Forum: Personal Finance (Not Investing)
Topic: Can I file form 8814 for child's K-1 income?
Replies: 9
Views: 789

Re: Can I file form 8814 for child's K-1 income?

You need to file individual returns for the kids. A return reporting income from the trust will include Sched E page 2 identifying the trust as the source of the income. Since these children are presumably subject to the "kiddie tax" and their unearned income exceeds $1900, their returns ...
by LMK5
Thu Apr 04, 2013 10:06 am
 
Forum: Personal Finance (Not Investing)
Topic: Can I file form 8814 for child's K-1 income?
Replies: 9
Views: 789

Can I file form 8814 for child's K-1 income?

My 3 kids each receive K-1s from a testamentary trust each year. On the K-1 it shows ordinary dividends, qualified dividends, and foreign taxes paid, all from mutual fund investments. For years I have been filing separate returns for them, but it is time consuming. Am I eligible to file a form 8814 ...
by LMK5
Wed Apr 03, 2013 11:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Can I file form 8814 for child's K-1 income?
Replies: 9
Views: 789

Kids receive a Schedule K-1: Must they file individually?

My kids receive some income from a trust which is detailed in a Schedule K-1 they receive each year. The income is strictly from dividends and capital gains. I have been filing individual returns for each of them for years, but I'm wondering if I could save some time by reporting their income via a ...
by LMK5
Tue Mar 13, 2012 3:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Kids receive a Schedule K-1: Must they file individually?
Replies: 3
Views: 405

Re: Defined Maturity ETFs vs. Traditional Bond Funds

Interesting product. But I wouldn't buy it. Now lets consider the Bulletshares 2015 Corporate ETF. We are talking about 4 year bonds here. No one issues 4 year bonds. (usually 3, 5, and 10 years are issued). So no ability to buy new issues. And say a "bid list" of corporate bonds comes ou...
by LMK5
Sat Nov 26, 2011 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: Defined Maturity ETFs vs. Traditional Bond Funds
Replies: 9
Views: 1319

Defined Maturity ETFs vs. Traditional Bond Funds

I was looking at Guggenheim's Defined Maturity ETFs and thought they filled an obvious need. With interest rates almost certain to rise over the next 10 years, it seems to me that bond mutual fund investors are going to get hurt. Are defined maturity ETFs the answer? I'd like to know what the outcom...
by LMK5
Thu Nov 24, 2011 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Defined Maturity ETFs vs. Traditional Bond Funds
Replies: 9
Views: 1319

If you put that in the bank you wouldn’t even realize you were taking “risk”.


Well put.
by LMK5
Tue Dec 28, 2010 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: Is there really a penalty for taking too little risk?
Replies: 42
Views: 4374

Absolutely. I have two friends who used to be husband and wife. They both worked with me and we all owned property together so I know a lot about their finances. She is very conservative financially and he is a risk taker and entrepreneur. They split up back in the 1980s over money and risk taking ...
by LMK5
Tue Dec 28, 2010 1:44 pm
 
Forum: Investing - Theory, News & General
Topic: Is there really a penalty for taking too little risk?
Replies: 42
Views: 4374

Is there really a penalty for taking too little risk?

I read and hear about people all the time who took too much risk with their investments and who now have to continue working instead of retiring the way they had planned. 2008-9 certainly expanded the population of people in this group. Does anyone know of a retiree who felt they took too little ris...
by LMK5
Tue Dec 28, 2010 11:33 am
 
Forum: Investing - Theory, News & General
Topic: Is there really a penalty for taking too little risk?
Replies: 42
Views: 4374

What's Your Allocation to High Yield Bonds?

My allocation is 8% of my total portfolio. If you don't have an allocation at all, could you share your reasoning?

Larry
by LMK5
Thu Dec 23, 2010 2:04 am
 
Forum: Investing - Theory, News & General
Topic: What's Your Allocation to High Yield Bonds?
Replies: 80
Views: 8278

Why do midcaps seem to be missing from model portfolios?

Most example or model portfolios I see include both large cap and small cap stocks, but very few contain an allocation to midcaps. Some years ago, midcaps were a common slice of a broad-based portfolio. Are midcaps too highly correlated with either the large cap or small cap sector to be considered ...
by LMK5
Sun Dec 19, 2010 2:29 pm
 
Forum: Investing - Theory, News & General
Topic: Why do midcaps seem to be missing from model portfolios?
Replies: 20
Views: 2681

Do the Indexes Get Rebalanced?

I couldn't help but notice that Apple now comprises just under 20% of the Nasdaq 100 index, and Google, the next largest component, makes up under 5 %. Is Apple's market value so much higher than the other components? Even so, do these indexes get periodically rebalanced, and if not, why not? Wouldn...
by LMK5
Thu Dec 16, 2010 11:16 am
 
Forum: Investing - Theory, News & General
Topic: Do the Indexes Get Rebalanced?
Replies: 2
Views: 457

Old 401k: Keep it or Transfer to Rollover IRA?

Are their any advantages to keeping money in an old 401k instead of transferring it to an existing rollover IRA? I'd like to transfer for consolidation purposes, but if there is a present or future advantage to retaining the 401k then I'd keep it. Any suggestions?

LMK5
by LMK5
Fri Nov 19, 2010 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Old 401k: Keep it or Transfer to Rollover IRA?
Replies: 7
Views: 965

Who pays the estate tax, beneficiaries or the estate?

I'm a little confused as to who pays the estate tax, the beneficiaries or the etate itself. Can someone explain the mechanics of who pays the tax for the situation when the estate has assets over the non-taxable limit and also for the case where the bequests bring the estate down to a level below th...
by LMK5
Sun Nov 14, 2010 1:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Who pays the estate tax, beneficiaries or the estate?
Replies: 21
Views: 3176

Thanks for all the good inputs.
by LMK5
Sat Nov 06, 2010 11:34 am
 
Forum: Investing - Theory, News & General
Topic: Is Indexing the New "Conventional Wisdom"?
Replies: 16
Views: 1762

Is Indexing the New "Conventional Wisdom"?

Is indexing getting too popular? Is it like any other technique that stops working when too many people use it as their investment strategy? I would dare to say that half the investment books out there are instructing readers on the joys of MPT and indexing. The way I see it, in order for indexing t...
by LMK5
Sat Nov 06, 2010 10:27 am
 
Forum: Investing - Theory, News & General
Topic: Is Indexing the New "Conventional Wisdom"?
Replies: 16
Views: 1762

Echos of Japan

China gets talked about in much the same way that Japan was discussed in the 80's. In fact, the fear of the growth of the Japanese economy was worse because they were seen as technological innovators, not a pool of low cost labor. They also were buying up lots of trophy real estate in the US, which ...
by LMK5
Tue Nov 02, 2010 12:52 am
 
Forum: Investing - Theory, News & General
Topic: China Bubble?
Replies: 15
Views: 1670

I'm hoping someone could set me straight on this: Studies I've seen for the 1926-2000 period show that for, let's say, a 60/40 stock/bond portfolio, you can withdraw about 5% per year and have a very high probability of not running out of cash over a period of 30 years. From what I could see, this ...
by LMK5
Sat Oct 30, 2010 11:02 am
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawals and Leaving Principal Untouched
Replies: 31
Views: 4389

Re: Sustainable Withdrawals and Leaving Principal Untouched

I'm hoping someone could set me straight on this: Studies I've seen for the 1926-2000 period show that for, let's say, a 60/40 stock/bond portfolio, you can withdraw about 5% per year and have a very high probability of not running out of cash over a period of 30 years. From what I could see, this ...
by LMK5
Sat Oct 30, 2010 10:22 am
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawals and Leaving Principal Untouched
Replies: 31
Views: 4389

Are your numbers real or nominal? The studies that say you can withdraw 4% a year without running out are talking about 4% real, that is, you start at 4% of your initial amount and increase the withdrawal by the amount of inflation each year. When your nominal withdrawal is 100% of your current nom...
by LMK5
Fri Oct 29, 2010 1:08 am
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawals and Leaving Principal Untouched
Replies: 31
Views: 4389

Re: Sustainable Withdrawals and Leaving Principal Untouched

I'm hoping someone could set me straight on this: Studies I've seen for the 1926-2000 period show that for, let's say, a 60/40 stock/bond portfolio, you can withdraw about 5% per year and have a very high probability of not running out of cash over a period of 30 years. From what I could see, this ...
by LMK5
Fri Oct 29, 2010 1:05 am
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawals and Leaving Principal Untouched
Replies: 31
Views: 4389

No, because of the sequence of returns. The portfolio may average 7% over the period of time, but it's not a steady 7% every year. You may/will have several years in a row of negative returns, during which the losses combined with the large withdrawals may deplete the portfolio to a point that even...
by LMK5
Thu Oct 28, 2010 10:01 pm
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawals and Leaving Principal Untouched
Replies: 31
Views: 4389

Sustainable Withdrawals and Leaving Principal Untouched

I'm hoping someone could set me straight on this: Studies I've seen for the 1926-2000 period show that for, let's say, a 60/40 stock/bond portfolio, you can withdraw about 5% per year and have a very high probability of not running out of cash over a period of 30 years. From what I could see, this 6...
by LMK5
Thu Oct 28, 2010 10:10 am
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawals and Leaving Principal Untouched
Replies: 31
Views: 4389

"Your Age in Bonds" vs. Sustainable Withrawal AA

One of John Bogle's well-known teachings on asset allocation is to hold "your age in bonds." Of course this is meant to slowly decrease one's risk as retirement approaches. So the typical 65 year old retiree should be holding a 35/65 stock/bond portfolio as he punches the clock for the las...
by LMK5
Sat Oct 16, 2010 10:39 am
 
Forum: Investing - Theory, News & General
Topic: "Your Age in Bonds" vs. Sustainable Withrawal AA
Replies: 9
Views: 1997

Thanks for all the inputs. Is there any data that shows SWR if international equities and small stocks are in the portfolio?
by LMK5
Wed Oct 13, 2010 12:29 am
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawal Rates: Any Updated Data Available?
Replies: 38
Views: 4865

Sustainable Withdrawal Rates: Any Updated Data Available?

Most of the sustainable retirement withdrawal rates studies, such as Trinity, cover periods that don't include the down market of the past few years. Are there any new sudies that update the data by taking recent stock and bond returns into consideration?

Thanks,

Larry
by LMK5
Tue Oct 12, 2010 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Sustainable Withdrawal Rates: Any Updated Data Available?
Replies: 38
Views: 4865

MSN Stock Charts: Total Return or Just Price Movement?

I was on msn.com the other day and looking at a chart of the S&P 500 it showed the return as -22% over the last ten years. Does this return as shown by the chart include the income return from the dividend payout or is it showing just the capital return based on price movement alone?
by LMK5
Sun Jun 27, 2010 2:06 am
 
Forum: Investing - Theory, News & General
Topic: MSN Stock Charts: Total Return or Just Price Movement?
Replies: 1
Views: 663

TIPS vs. Treasurys in a Rising Rate Environment

If rates start to climb without a significant spike in inflation, how would the principal value of a 10-year TIPS behave vs. a 10-year Treasury note? Is there a duration attribute for TIPS that could be used as a predictor of price behavior in the same way it is used for regular bonds?
by LMK5
Fri Jun 18, 2010 1:42 am
 
Forum: Investing - Theory, News & General
Topic: TIPS vs. Treasurys in a Rising Rate Environment
Replies: 4
Views: 1581

How to withdraw a non-deductible IRA contribution from '08?

I have a traditional IRA that I set up for my wife some years ago. We were able to deduct the contributions each year because she didn't work. On April of 2008, I made a $5000 contribution to the account. Later in that year, she got a part time job that had an involuntary pension contribution tied t...
by LMK5
Thu Jun 10, 2010 10:20 am
 
Forum: Investing - Help with Personal Investments
Topic: How to withdraw a non-deductible IRA contribution from '08?
Replies: 5
Views: 1724

No justification is needed. Simply request the withdrawal from the custodian. You (and the IRS) will get a 1099-Q which you will have to explain to the IRS on one of their forms that you send in with your Form 1040. Your educational institution will send you (and the IRS) a 1098-T with the amount o...
by LMK5
Wed May 26, 2010 9:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Do I need to justify 529 plan withdrawals?
Replies: 12
Views: 3260

LMK5... If you allow TurboTax to guide you through the tax return, it will automatically prompt you for information on Form 8615. If, however, you select the option where YOU will determine which topics to complete, then TurboTax will not automatically guide you to this topic (which is what this op...
by LMK5
Mon May 24, 2010 3:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Dealing with Form 8615 (Child's Income) in TurboTax
Replies: 6
Views: 2079

Re: Important Questions Not Discussed in this Forum

Are we afraid to admit that an element of--I'm going to say it--market timing is needed to preserve portfolio gains and that a slow contraction of equity exposure as we near retirement will not suffice because of the severity of the next inevitable downturn? All comments, nasty or otherwise, are we...
by LMK5
Sat May 22, 2010 10:47 pm
 
Forum: Investing - Theory, News & General
Topic: Important Questions Not Discussed in this Forum
Replies: 46
Views: 4862

i don't have any proof of this, so i would be interested to hear what others think, but regarding stock returns, and increased volatility, and staying the course, i think all of these have been affected by the 'recent' (past 1-2 decades) changes in the abundancy and immediate availability of inform...
by LMK5
Sat May 22, 2010 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: Important Questions Not Discussed in this Forum
Replies: 46
Views: 4862

Important Questions Not Discussed in this Forum

After 25 years of disciplined investing, some questions keep popping into my head that I don't see coming up in this forum: 1) With all the assumptions about stock market returns over time, staying the course, etc., there is an underlying assumption that the equity investing landscape is level. But ...
by LMK5
Sat May 22, 2010 12:15 pm
 
Forum: Investing - Theory, News & General
Topic: Important Questions Not Discussed in this Forum
Replies: 46
Views: 4862

Life Insurance Secondary Beneficiaries

I recently took out a term life policy. My wife is the primary beneficiary but since my kids are minors they can't appear as secondary beneficiaries. I do have a living trust. Should that be my secondary beneficiary? What are the other possibilities I should consider?

Any help would be appreciated.
by LMK5
Sat May 22, 2010 10:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Life Insurance Secondary Beneficiaries
Replies: 13
Views: 1632

Can I modify my own living trust?

I have a living trust that was done by a lawyer in 2001. There are things I would like to change, such as the name of the successor trustee and the investment listing. --Can I alter the living trust myself? --Are there some do's and don't's in order to make the trust binding? --Do I need to make sur...
by LMK5
Sat May 22, 2010 10:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Can I modify my own living trust?
Replies: 9
Views: 1989

Do I need to justify 529 plan withdrawals?

This is a question on the mechanics of using a 529 plan. When college time arrives and I want to make a withdrawal for, let's say, buying my daughter a car for school, how do I do this? Do I simply request funds from my plan custodian and they send it to me no questions asked, or do I have to justif...
by LMK5
Sat May 22, 2010 10:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Do I need to justify 529 plan withdrawals?
Replies: 12
Views: 3260
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