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Re: Poll: Intermediate Term Investment Grade Admiral

There's a lot being said about CDs, and I have nothing per se against CDs. On the other hand, many folks on this Board have 50% or more of the overall portfolio in fixed assets, and for many on this Board that means $1M, $2M, $3M or more to be invested in fixed assets, and using bond funds is a real...
by OverTheHill
Fri Jun 07, 2013 3:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Poll: Intermediate Term Investment Grade Admiral
Replies: 66
Views: 3987

Re: Help me manage a $7 million portfolio.

You need an estate or elder lawyer to draw up a living revokable trust for your mother and to gradually get the amount of her portfolio below estate tax limits. As it is now, the gov would get 40% of about $2M that she holds in excess of the $5mil + limit. This can be done by gifting to children (b...
by OverTheHill
Fri Jun 07, 2013 12:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me manage a $7 million portfolio.
Replies: 105
Views: 11988

Re: Help me manage a $7 million portfolio.

I would call Rick Ferri and also Larry Swedroe of Buckingham Asset Management and see what each one can do for you and their fees. I wouldn't just go with the lowest fee advisor because one firm may have a slightly higher fee but give you more personal attention and better advice with regards to ta...
by OverTheHill
Fri Jun 07, 2013 10:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me manage a $7 million portfolio.
Replies: 105
Views: 11988

Re: Today's WSJ: Old School Stock Picker Struggles w Index C

I guess poor Wally might have to sell one of his many vacation homes. Too bad, so sad.
by OverTheHill
Fri Jun 07, 2013 10:01 am
 
Forum: Investing - Theory, News & General
Topic: Today's WSJ: Old School Stock Picker Struggles w Index Craze
Replies: 17
Views: 2231

Re: Poll: Intermediate Term Investment Grade Admiral

I'm holding my intermediate investment grade, with the thought of actually moving some of my short-term investment grade to it or possibly TBM. I've got intermediate in my IRA. While I'm fully retired now, I have no reason to touch it until RMD time, which for me is further off than the duration of ...
by OverTheHill
Fri Jun 07, 2013 9:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Poll: Intermediate Term Investment Grade Admiral
Replies: 66
Views: 3987

Re: The Case for Lower Interest Rates

Rick, Under current market conditions, do you still advocate the use of the Total Bond Market Index fund as the core bond holding in a retiree's 50/50 asset allocation plan as opposed to any other bond funds? I do use TIPS and H-Y in percentages approximating 10% each in addition to the TBM. Yes. T...
by OverTheHill
Thu Jun 06, 2013 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: The Case for Lower Interest Rates
Replies: 20
Views: 1783

Re: Selling a diamond ring

You're probably much better off using the diamonds to make a totally different piece you wife might like to have. Use your imagination.
by OverTheHill
Wed Jun 05, 2013 7:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Selling a diamond ring
Replies: 10
Views: 1427

Re: Count social security towards your bond allocatiion?

The idea that if one has a pension or annuity and SS, one can just swing for the fences with the rest of their portfolio is problematic. Behaviorally that is a real challenge for a prudent investor to do. The danger being relinquishment of an aggressive position at just the wrong time, which we see...
by OverTheHill
Wed Jun 05, 2013 11:40 am
 
Forum: Investing - Theory, News & General
Topic: Count social security towards your bond allocatiion?
Replies: 65
Views: 3547

Re: Discussion with Adviser

Thanks so much everyone for the replies, all are very helpful for a new investor. Gbrainer: when you mention the tax benefit of separating growth and value funds within a nonqualified plan not helping much in retirement, i understand that given index funds have lower expense ratios. But if I withdr...
by OverTheHill
Tue Jun 04, 2013 4:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Discussion with Adviser
Replies: 32
Views: 2698

Re: Most assets in taxable - Should I get a variable annuity

You do realize that you'll probably be paying more in gross fees than the taxes you would have to pay. I have two-thirds of our overall portfolio in taxable funds with Vanguard. I keep my bond funds in IRAs, plus a little more in bond funds in taxable to fill out my fixed asset allocation. The equit...
by OverTheHill
Mon Jun 03, 2013 3:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Most assets in taxable - Should I get a variable annuity?
Replies: 25
Views: 1469

Re: Safely filling the retirement cash flow gap

Safely? Too "safe" and you won't have any inflation protection. It doesn't take a huge investment portfolio (stocks & bonds) to throw off $30K per year. I see no reason for excessive creativity beyond that... Well, to secure $30K per year would require around a $750K portfolio, reason...
by OverTheHill
Mon Jun 03, 2013 1:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Safely filling the retirement cash flow gap
Replies: 7
Views: 746

Re: More Unconventional Failure

Great article, but we all know (because most financial advisors so say) that simple index funds are just fine for simple people who don't have much to start with. On the other hand, the sophisitcated folks all know that a more complex and demanding strategy is needed in order to meet the needs of th...
by OverTheHill
Mon Jun 03, 2013 12:44 pm
 
Forum: Investing - Theory, News & General
Topic: More Unconventional Failure
Replies: 17
Views: 2228

Re: How Commodities Can Help a Portfolio

I find that it usually makes sense to ignore anyone who says that they "know" how to make money by any method other than working for it.
by OverTheHill
Sun Jun 02, 2013 3:54 pm
 
Forum: Investing - Theory, News & General
Topic: How Commodities Can Help a Portfolio
Replies: 129
Views: 8523

Re: Low Air Flow - Central Air Conditioning

I doubt this would be the problem given the age of your system, but many newer systems have multi-speed fans, and it's possible that the high speed has broken for some reason, thus leaving you only with the low speed. By the way, 21 years old is very old. I'm surprised it has lasted this long. A new...
by OverTheHill
Sun Jun 02, 2013 3:45 pm
 
Forum: Personal Consumer Issues
Topic: Low Air Flow - Central Air Conditioning
Replies: 20
Views: 2077

Re: how have you performed recently

You asked for clever comments.... How have I performed recently? I don't know, you would have to ask my wife.
by OverTheHill
Sat Jun 01, 2013 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: how have you performed recently
Replies: 15
Views: 1928

Re: Bond Fund Question

My thanks for all the comments.
by OverTheHill
Sat Jun 01, 2013 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Bond Fund Question

.... I'm not suggesting that it would make sense to invest most of a person's fixed allocation in HY, but if a person isn't going to touch the money for 7 to 10 years,.... I'd say one might as well invest in equities with a 7 to 10 years time frame. Be sure to change investment when getting close t...
by OverTheHill
Sat Jun 01, 2013 5:04 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Bond Fund Question

But, if a person is holding the HY fund for a long period (at least as long as the fund's bond duration), then should the same results apply to HY as apply to investment grade? No, a bunch of the bonds in HY might default and be marked down, sometimes to zero. In an extreme case, all of them... Thi...
by OverTheHill
Sat Jun 01, 2013 4:18 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Bond Fund Question

Do these same rules or whatever apply equally to HY bond funds, or is HY something so different as to not follow the same financial rules as ordinary bonds. I realize that HY has a higher default risk, but other than that. Thanks. The credit risk of HY is the only difference, but it's a big one. In...
by OverTheHill
Sat Jun 01, 2013 4:03 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Bond Fund Question

Do these same rules or whatever apply equally to HY bond funds, or is HY something so different as to not follow the same financial rules as ordinary bonds. I realize that HY has a higher default risk, but other than that. Thanks.
by OverTheHill
Sat Jun 01, 2013 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Asset Allocation

Banjo player here, also age 63. Between all the musicians around here, we could put together quite a jam session.
by OverTheHill
Sat Jun 01, 2013 12:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation
Replies: 24
Views: 1580

Re: What you tell yourself when you end up buying at a peak

Well, going off to the beach is a good thing to think about, rather than buying at a peak. Just remember that today's peak will always be a low at some point in time. The market has never just kept going straight up. On the other hand, the market is way up over where it was 100 years ago.
by OverTheHill
Sat Jun 01, 2013 12:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: What you tell yourself when you end up buying at a peak
Replies: 47
Views: 3388

Re: Bond Fund Question

You should have $100K*(1.01)^5 = $105,101.01 before taxes, assuming you have kept the money invested and reinvested all dividends. Thanks. Now, another question. I'm fully retired due to health issues at age 63. I won't be touching my IRA until RMD time, which is over 7 years off. Given the time fr...
by OverTheHill
Sat Jun 01, 2013 11:37 am
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Bond Fund Question

You guys are killing me. When I start to think I understand the long-term ramifications, I read something that makes me wonder if I truly understand. Let's assume I bought $100K of intermediate investment grade at a point when interest rates were 1% and duration was 5 years (I'm just making this up ...
by OverTheHill
Sat Jun 01, 2013 11:26 am
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Bond Fund Question

I guess I understand. I have all my fixed assets in Vanguard short and intermediate investment grade bond funds, with a small tad of HY. My intent is to hold what I currently have invested in fixed assets until I'm pushing up daisies. I'll take RMDs at the appropriate time, so that should diminish s...
by OverTheHill
Sat Jun 01, 2013 8:57 am
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Bond Fund Question

Many of the postings on this Board talk about the fact that bond funds will recoup their losses when rates go up via the higher yield over the duration of the bonds in the fund. In other words, it seems that many folks are saying that if you hold a bond fund with a duration of 5 years for the full f...
by OverTheHill
Sat Jun 01, 2013 8:05 am
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Question
Replies: 42
Views: 2343

Re: Downpayment Money from In-Laws

We had a gift from parents and also took out 401k loan when we bought our house to avoid PMI. Paid back the 401k loan within a year and the gift from parents the year after that. We didn't "have" to pay back the gift as it was a gift but wouldn't have felt comfortable keeping it since par...
by OverTheHill
Fri May 31, 2013 5:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Downpayment Money from In-Laws
Replies: 52
Views: 4052

Re: Retiree's proposed new allocation

It would be difficult for anyone to say that your plan isn't a solid and reasonable plan. This said, I would probably put less emphasis on internation bonds and stocks, but that's just me. If members of your family have a history of living to 100, you might want to up your equity allocation to at le...
by OverTheHill
Fri May 31, 2013 5:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retiree's proposed new allocation
Replies: 1
Views: 396

Re: Downpayment Money from In-Laws

I haven't read all of the replies, so this might have already been mentioned. But, when parents say "long term loan" to help with downpayment, they usually are referring to a defacto gift to be repaid only if the parents have financial problems in the distant future. Otherwise, it would be...
by OverTheHill
Fri May 31, 2013 4:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Downpayment Money from In-Laws
Replies: 52
Views: 4052

Re: "My guy always beats the market"

Just a guess here, but I would guess that virtually nobody who claims to always beat the market has ever beaten the market. Just useless blowhards.
by OverTheHill
Fri May 31, 2013 12:59 pm
 
Forum: Investing - Theory, News & General
Topic: "My guy always beats the market"
Replies: 20
Views: 1997

Re: New "Flagship Select" level at Vanguard

We shouldn't criticize Vanguard for trying to attract the $10M and up group. After all, you can make some real money off of 0.1% per year of $10M. Really, with all the financial advisors and brokerage firms giving them all types of useless stuff in exchange for charging 2% to 3% per year (fees and e...
by OverTheHill
Fri May 31, 2013 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: New "Flagship Select" level at Vanguard
Replies: 12
Views: 2512

Re: VG Total International Bond Fund is open

I have no plans to invest in international bonds, same for non-domestic equities.
by OverTheHill
Fri May 31, 2013 10:48 am
 
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 82
Views: 10614

Re: trading costs matter

larryswedroe wrote:dont know why anyone turned this into a "dfa" issue"... Sad to see that single minded people raise that issue.
Best wishes
Larry

Larry, I simply quoted directly from the article. By the way, I thought your article on bonds was really good.
by OverTheHill
Thu May 30, 2013 5:07 pm
 
Forum: Investing - Theory, News & General
Topic: trading costs matter
Replies: 13
Views: 1071

Re: Advice on what to do with a sum of cash

Sounds like this is money you don't need for yourself, plus you don't want to see it drop much in value, hence your desire for bonds. Assuming this is correct, then you could put it in Vanguard short-term investment grade, or short-term treasuries (much lower yield), or mix it up some by putting hal...
by OverTheHill
Thu May 30, 2013 4:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice on what to do with a sum of cash
Replies: 7
Views: 473

Re: Fed tigthening? What to do? How markets act

A timely and useful article. I'll admit to not fully understanding what a rise in rates will do to my overall portfolio. I think I know, but the more I read the less I'm certain about anything. Anyway, it's good to see a good "stay the course" discussion and analysis.
by OverTheHill
Thu May 30, 2013 12:11 pm
 
Forum: Investing - Theory, News & General
Topic: Fed tigthening? What to do? How markets act
Replies: 41
Views: 2957

Re: Tips on answering the question - What Should I Do?

I just read this for the first time, although I have seen it listed for a long time now. Given how old it is, I thought I would read it to see what Rick had to say back in the dark days. It's a really a good read, something that should be required reading by every investor. Well stated, Rick.
by OverTheHill
Thu May 30, 2013 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Tips on answering the question - What Should I Do?
Replies: 147
Views: 116251

Re: trading costs matter

"Dimensional Fund Advisors is the largest provider of passively managed funds that are not pure index funds. One difference between DFA funds and index funds is that DFA avoids the forced trading that is required to replicate an index. Instead, they use the more sophisticated trading strategies...
by OverTheHill
Thu May 30, 2013 10:45 am
 
Forum: Investing - Theory, News & General
Topic: trading costs matter
Replies: 13
Views: 1071

Re: Retirement Floor

We have a variation of this. Our portfolio is 50% equity and 50% fixed, give or take a percent or two at any given time. The fixed portion is mostly in short and intermediate investment grade, with some cash and HY. We could lose all of our equity allocation and probably still have enough to take ca...
by OverTheHill
Thu May 30, 2013 9:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement Floor
Replies: 55
Views: 5408

Vanguard Bond Funds ER Drop

I just checked my Vanguard account and noticed that the expense ratios have dropped for some of the bond funds. Although small, it's always nice to see Vanguard passing along savings to investors.
by OverTheHill
Thu May 30, 2013 9:05 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Bond Funds ER Drop
Replies: 1
Views: 532

Re: Need Help - Income Portfolio for my 78 Year Old Father ?

Yeah, this is one of the rare instances in which I would agree that a SPIA makes good sense.
by OverTheHill
Wed May 29, 2013 5:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Help - Income Portfolio for my 78 Year Old Father ?
Replies: 5
Views: 487

Re: Retirement Floor

It's hard to know what enough is. Do you count what happens if both spouses end up in skilled nursing at $120K each for say 10 years? Well, that would take around $2.5M to handle that kind of retirement expense, using present values. Yes, you can find skilled nursing situations that cost less, but y...
by OverTheHill
Wed May 29, 2013 12:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement Floor
Replies: 55
Views: 5408

Re: Preparing for financial independence soon

Given your your relatively young age, plus 2 kids at home, I think you're cutting it a little close to retire now. On the other hand, so long as your wife maintains her license, she should be able to get work if it becomes necessary. I don't know about your situation. You might could make it just fi...
by OverTheHill
Tue May 28, 2013 7:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for financial independence soon
Replies: 10
Views: 1170

Re: Isn't it a bad time to be investing??

Every day you have extra money to invest is a great day to invest. When you are running in the red is bad day. :) I have felt negative for the last couple of years and I'm making money hand over fist. So I don't let my emotions get in the way of investing. Quite true, quite true. And, by the way, i...
by OverTheHill
Tue May 28, 2013 5:24 pm
 
Forum: Investing - Theory, News & General
Topic: Isn't it a bad time to be investing??
Replies: 53
Views: 5132

Re: Individual Investment vs. Portfolio Piece (Ferri vs. Lar

To ensure there is no misunderstanding, this stuff is NOT new to me. I have been in the investment business a long time. I hold a Chartered Financial Analyst® designation (CFA), have a strong familiarity with swaps, options, futures and other forward contracts, and held a commodities trading licens...
by OverTheHill
Tue May 28, 2013 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Investment vs. Portfolio Piece (Ferri vs. Larry)
Replies: 67
Views: 4564

Re: Individual Investment vs. Portfolio Piece (Ferri vs. Lar

Investing is boring wrote:
Bradley wrote:
Investing is boring wrote:
IYou are confusing strategy with outcome on a timeline that is more apt to be noise than signal.


The only thing worse than a bad strategy is a bad outcome.
by OverTheHill
Tue May 28, 2013 5:00 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Investment vs. Portfolio Piece (Ferri vs. Larry)
Replies: 67
Views: 4564

Re: Thoughts on high-yield bonds

In fact, the monthly income would have gone up during the market crash, even though the value of the bond fund went down. The income goes up ONLY relative to the share price (which is going down), thus increasing yield. The actual income would stay the same barring any defaults. OK, I guess it was ...
by OverTheHill
Tue May 28, 2013 3:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on high-yield bonds
Replies: 13
Views: 1021

Re: Minimizing Gift Tax

I'm not a tax expert, but I think anyone can gift up to $14K per year to any individual without any gift tax consequence. Thus, two parents could give $28K each year to each of their kids, plus $28K to someone else's kids if they wanted to do so.
by OverTheHill
Tue May 28, 2013 1:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing Gift Tax
Replies: 7
Views: 985

Re: Thoughts on high-yield bonds

Unless I'm mistaken, and I could be, the yield on a HY bond fund goes up when the value goes down, as during the financial crash. If true, this would mean that the HY bond fund continued to cover it's primary objective of producing monthly income. In fact, the monthly income would have gone up durin...
by OverTheHill
Tue May 28, 2013 1:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on high-yield bonds
Replies: 13
Views: 1021
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