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Re: Newbie needs advice

Good link, Paul, but although we'll have to wait for OP to confirm, I interpreted: ... I plan to pay for an education because I know investing in myself is the best thing i can do. ... to mean going to a vocational program or tertiary school, not paying a financial adviser. OP, will you clarify for ...
by Phineas J. Whoopee
Fri Oct 31, 2014 11:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie needs advice
Replies: 5
Views: 373

Re: Possibility of financial markets breakdown / transformat

Thank you for all of the participation! I must say I am surprised that no on has voted for Invest in Precious Metals. Maybe there is a better way to create a poll around this idea ? Any criticism is appreciated. Well, you might create a poll with only the options: Invest in Precious Metals; or Prec...
by Phineas J. Whoopee
Fri Oct 31, 2014 11:44 pm
 
Forum: Investing - Theory, News & General
Topic: Possibility of financial markets breakdown / transformation?
Replies: 14
Views: 1280

Re: Dividends: reinvest or into money market?

Hi nbseer, In a tax-advantaged account, where keeping track of tax lots is not an issue, holding money out of the market to buy when it's down is market timing, pure and simple, and we know empirically that in practice, market timing just doesn't help. It usually hurts. If you would be withdrawing t...
by Phineas J. Whoopee
Fri Oct 31, 2014 10:32 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends: reinvest or into money market?
Replies: 2
Views: 309

Re: Possibility of financial markets breakdown / transformat

With respect to mark-to-market, for banks and insurance companies marking to market is the best current view, but really we're talking about accounting, or as it's called in the US, Generally Accepted Accounting Principles (GAAP). Under GAAP, normally assets must be marked to market, that is, valued...
by Phineas J. Whoopee
Fri Oct 31, 2014 9:52 pm
 
Forum: Investing - Theory, News & General
Topic: Possibility of financial markets breakdown / transformation?
Replies: 14
Views: 1280

Re: Newbie needs advice

Hi spoonfullofsugar, and welcome to the forum! Conventional advice here is a) to do precisely what you've said: learn, think, question; then b) create a plan and invest. In the mean time, many of us, including me, suggest a savings account for the $100,000 you mention. You can find high-ish (if they...
by Phineas J. Whoopee
Fri Oct 31, 2014 9:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie needs advice
Replies: 5
Views: 373

Re: When Capital gains are paid out on a fund does the share

Thanks everyone for helping me understand. There are a couple of non index funds I like but this point drives me crazy about them. You can get big tax bill and nothing to show for it. Also they might no have capital gains for several years then have a huge gain one year causing you to have a big ta...
by Phineas J. Whoopee
Fri Oct 31, 2014 9:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: When Capital gains are paid out on a fund does the share
Replies: 15
Views: 576

Re: Just how stringent is the fiduciary standard?

... I suppose that if we follow the admonition to not consider insurance to be an investment then selling insurance to someone is not part of investment advising and the fiduciary responsibility does not apply to it. That sounds so good I am even convinced myself. Whatever gets measured gets optimi...
by Phineas J. Whoopee
Fri Oct 31, 2014 12:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Just how stringent is the fiduciary standard?
Replies: 3
Views: 425

Re: Assumptions on inflation and buying/selling tips

Think of TIPs as normal bonds + an inflation insurance policy. Some people need that insurance. For others, inflation insurance makes about as much sense as taking out life insurance on the family dog . Like buying both a mutt and a life insurance policy for said mutt, buying TIPs is more expensive...
by Phineas J. Whoopee
Fri Oct 31, 2014 12:10 am
 
Forum: Investing - Help with Personal Investments
Topic: Assumptions on inflation and buying/selling tips
Replies: 7
Views: 578

Re: Assumptions on inflation and buying/selling tips

It's worth noting that John's CD approach does not have a fixed term, but is a rolling ladder, therefore one of the differences between a single CD and a TIPS (or any bond) fund I discussed above doesn't apply to him. In addition, the average duration of his ladder is much shorter than the ten (or 7...
by Phineas J. Whoopee
Thu Oct 30, 2014 11:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Assumptions on inflation and buying/selling tips
Replies: 7
Views: 578

Re: Assumptions on inflation and buying/selling tips

Hi Cody, I just looked at a bunch of inflation projections for the next ten years. The "experts" seem to feel it should be around 2-2.3% or so. Ten year breakeven inflation, which as Larry reminds me is probably not expected inflation, but at least can be calculated precisely, works out to...
by Phineas J. Whoopee
Thu Oct 30, 2014 11:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Assumptions on inflation and buying/selling tips
Replies: 7
Views: 578

Re: Bond Distribution Yield and SEC Yield ?

As a total simpleton, I have always compared SEC yields (stuff "in the door") to CD rates. Stated another way, if the fund is buying 2% "stuff", and I can buy 2.25% "stuff", I buy the latter. Putting on my crash helmet. No helmet needed. You simply have a precise calcu...
by Phineas J. Whoopee
Thu Oct 30, 2014 10:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Distribution Yield and SEC Yield ?
Replies: 8
Views: 511

Re: Bond Distribution Yield and SEC Yield ?

ogd thanks I think? I'm going to have read this a few times. ogd is right, and I do suggest reading the post carefully, but maybe I can roll it up a little. Yield, unless qualified by another word, is in relation to the present market price. Distribution yield (note that it's qualified by the word ...
by Phineas J. Whoopee
Thu Oct 30, 2014 9:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Distribution Yield and SEC Yield ?
Replies: 8
Views: 511

Re: Annually Recalculated Virtual Annuity

It relies on knowing one's, as they put it, maximum possible lifetime . Otherwise the math doesn't work. Fortunately, they do know it, for each of us. It's 120 years. They got it from a Social Security table, reasoning it must be the correct age because the table contains no rows beyond it. The clai...
by Phineas J. Whoopee
Tue Oct 28, 2014 8:14 pm
 
Forum: Investing - Theory, News & General
Topic: Annually Recalculated Virtual Annuity
Replies: 9
Views: 872

Re: What funds are negatively correlated with stocks?

... Hedges aren't investments. They are risk mitigation instruments. If I may add, the expected return of a hedge is negative. They protect your portfolio from certain risks, but only because you pay somebody else to bear them for you, at a cost that other believes they'll make a profit from on ave...
by Phineas J. Whoopee
Sun Oct 26, 2014 9:55 pm
 
Forum: Investing - Theory, News & General
Topic: What funds are negatively correlated with stocks?
Replies: 24
Views: 2911

Re: What is the appeal of smart watches?

From my perspective, we've gone back more than a century to 1885, to the third Anglo-Burmese War, anyway, replacing modern wrist watches with archaic pocket ones.
PJW
by Phineas J. Whoopee
Sun Oct 26, 2014 9:38 pm
 
Forum: Personal Consumer Issues
Topic: What is the appeal of smart watches?
Replies: 22
Views: 1922

Re: More Aggressive AA Post Home Purchase

Although I exclude it from my retirement portfolio calculations, in net worth I include home equity as equity. I don't pretend it's a bond to use it to talk myself into holding more stocks. In fact, I've recently reduced the risk of my retirement portfolio, its having touched a targeted multiple of ...
by Phineas J. Whoopee
Fri Oct 24, 2014 4:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: More Aggressive AA Post Home Purchase
Replies: 16
Views: 838

Re: Vanguard, TIPs, Accrued Interest & RMDs

Most larger businesses use accrual accounting . Most smaller ones, and nearly all individuals, use cash-basis accounting . You can use accrual if you want, although it's more complex, but cash-basis refers to actual money you actually received during the actual time period (in this case a tax year)....
by Phineas J. Whoopee
Fri Oct 24, 2014 3:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard, TIPs, Accrued Interest & RMDs
Replies: 22
Views: 1644

Re: Renting vs owning

Naturally this thread has, as most similar ones seem to do, descended into a comparison of free-standing houses, or in one instance row houses, with apartments in a complex. One can rent a house. One can buy an apartment. If we're arguing over whether houses or apartments are better let's at least b...
by Phineas J. Whoopee
Fri Oct 24, 2014 3:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Renting vs owning
Replies: 16
Views: 1688

Re: Yes, 100% of economists were dead wrong about yields

Fallible wrote:
Phineas J. Whoopee wrote:...
Now that's comedy! :D

PJW


But borrowed comedy. Not sure who coined it first - maybe you?

If I had a nickle for every good joke I've coined I'd be five cents in debt. If I had one for every good joke I've stolen I'd be in prison.
PJW
by Phineas J. Whoopee
Fri Oct 24, 2014 1:24 am
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3950

Re: Yes, 100% of economists were dead wrong about yields

... Had the headline writer included the word "surveyed" - and I think he/she should have - so that the headline read: "Yes, 100% of economists surveyed were dead wrong about yields," I'd guess the number of clicks would be the same. I'd prefer to read an article titled "Ye...
by Phineas J. Whoopee
Thu Oct 23, 2014 8:09 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3950

Re: 2nd Opinions on Bond Alternatives?

At 80% equities, your portfolio's value and volatility is affected very little by the fixed income component, whatever it's invested in. Twenty percent is somewhere around the minimum good level for bonds, for a risk-seeking investor. There's an argument that it's really 10%, but that difference won...
by Phineas J. Whoopee
Thu Oct 23, 2014 8:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2nd Opinions on Bond Alternatives?
Replies: 35
Views: 2178

Re: Renting vs owning

I rented by choice for a couple of decades, in four different regions of the US, until I settled on the location in which I want to stay, and found what was, for me, a compelling deal. The seller, who had the place on the market for over a year when I made the offer one mid-December, didn't know it ...
by Phineas J. Whoopee
Thu Oct 23, 2014 6:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Renting vs owning
Replies: 16
Views: 1688

Re: A MM account or not?

To help others who may happen across this thread, the subject line refers to a Money Market Account , but the body of the OP talks about a Money Market Fund . The latter, which are mutual funds , are not FDIC insured, and pay very little interest, even by today's standards. The former, which are FDI...
by Phineas J. Whoopee
Thu Oct 23, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: A MM account or not?
Replies: 9
Views: 1274

Re: Long Term Care Insurance - Should I Keep?

For me the primary purpose of LTCI is protecting your legacy for your heirs. If you don't care about this then maybe cancellation is a reasonable idea. Otherwise I think your policy is probably worth keeping. I would not expand it. I think your coverage is fairly decent as is. I, respectfully, main...
by Phineas J. Whoopee
Thu Oct 23, 2014 4:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long Term Care Insurance - Should I Keep?
Replies: 11
Views: 930

Re: Emergency Fund Questions

Hi WalterMitty, and thanks for making one part of your life less secret. :happy I think we get into too much prescriptive detail here on EFs. The main point is to have fairly liquid fairly stable assets available in case you unexpectedly need them. Not doing so can mess up investing and other plans....
by Phineas J. Whoopee
Thu Oct 23, 2014 4:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Emergency Fund Questions
Replies: 14
Views: 2234

Re: Yes, 100% of economists were dead wrong about yields

I suppose Well, 67 economists predicted the wrong direction, without counting magnitude, for bond yields over six months wouldn't garner nearly as many clicks, and might not even have shown up here, so good job, headline writer * ! PJW * The writers of articles in periodicals hardly ever write their...
by Phineas J. Whoopee
Thu Oct 23, 2014 3:25 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3950

Re: Just wondering how you personally calculate net worth

An equally valid question is, how do you calculate your height? I include my feet, and my head, when measuring my height. My problem is, although I know the absolute value of my head, I can never figure out whether it's an asset or a liability. My feet definitely are assets, which work best when ba...
by Phineas J. Whoopee
Thu Oct 23, 2014 3:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Just wondering how you personally calculate net worth
Replies: 56
Views: 3725

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

bhsince87 wrote:...
It could be great to marry a little bit of, say, each of the top 500 spouses in America.... :happy

Didn't you mean to say, marry a little bit of each of the top 500 biggest spouses in America? :happy
PJW
by Phineas J. Whoopee
Wed Oct 22, 2014 11:13 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 133
Views: 9591

Re: Just wondering how you personally calculate net worth

If I was going to do a net worth, which I don't, I would take .75% of IRA + ROTH + taxable + home equity . Since my pension does not survive me it does not apply. Would you adjust home equity by your current long term capital gains rate less $250,000 (or $500,000, if you're married in a state in wh...
by Phineas J. Whoopee
Wed Oct 22, 2014 9:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Just wondering how you personally calculate net worth
Replies: 56
Views: 3725

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

Here's a response I wrote last year to a self-described engineer's question about optimizing, which that person received well. Maybe it will be useful in this context.

LQD, BND, or MUNIs ?

PJW
by Phineas J. Whoopee
Wed Oct 22, 2014 8:57 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 133
Views: 9591

Re: "Vanguard 'Bogleheads' Crazy for 'Saint' Jack Bogle?"

sorry if this is obvious but what exactly does "Vanguard would place ownership of the funds with the shareholders themselves" mean? How is this technically accomplished? Is it just eliminating all the middlemen and keeping the costs low or is there a explicit technical mechanism where the...
by Phineas J. Whoopee
Wed Oct 22, 2014 7:56 pm
 
Forum: Investing - Theory, News & General
Topic: "Vanguard 'Bogleheads' Crazy for 'Saint' Jack Bogle?"
Replies: 8
Views: 1798

Re: Just wondering how you personally calculate net worth

Net Worth = Assets - Liabilities. I mark them to market. That which can't be marked to market, at least aproximately, I don't include in the calculation. A pension, for example, unless it has an immediately-realizable price I can opt to obtain, isn't part of the equation. Social Security is continge...
by Phineas J. Whoopee
Wed Oct 22, 2014 7:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Just wondering how you personally calculate net worth
Replies: 56
Views: 3725

Re: Bonds in taxable or tax advantaged?

abuss368 wrote:The best portfolio is the one that works for you and allows you to stay the course.

And on that, the overriding value of staying the well-chosen course rather than trading in response to short- to medium-term market events, we fully agree.
:sharebeer
PJW
by Phineas J. Whoopee
Wed Oct 22, 2014 6:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in taxable or tax advantaged?
Replies: 9
Views: 875

Re: How does one hedge against deflation?

... I did not assert that? My apologies if I attributed to you a position you didn't express. That's never my intent toward anyone. If a TIPS bond is trading at 90, due to cumulative deflation , with 5 years to run, then the investor is guaranteed a $10 nominal return over 5 years-- a positive amou...
by Phineas J. Whoopee
Wed Oct 22, 2014 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 52
Views: 3874

Re: 2013 NAWI released

Just saw it on SSA site: http://www.ssa.gov/oact/cola/AWI.html and also the bend points here http://www.ssa.gov/oact/cola/bendpoints.html Time to update those SS bene spreadsheets! Faith - - - 2013 (?) I'm not Faith, but yes, 2013. Quoting from the first link: Latest index The national average wage...
by Phineas J. Whoopee
Wed Oct 22, 2014 5:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: 2013 NAWI released
Replies: 5
Views: 470

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

I'm an engineer. ... The biggest thing I have learned which is in 100% contrast to boglehead philosophy and what most economists say is that markets are efficient on the macro level and more often than not inefficient on the micro level. There are tons and tons of mispriced individual stocks in my ...
by Phineas J. Whoopee
Wed Oct 22, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 133
Views: 9591

US Chip & Signature --> Chip & PIN 2020

An article at Bankrate.com from last Friday, the 17th of October, says the US is meant to get Chip & PIN in 2020. We'll have Chip & Signature until then. Of course, that's far enough in the future that plans can change. ... Unlike the European version of EMV, American debit card holders won'...
by Phineas J. Whoopee
Wed Oct 22, 2014 3:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: US Chip & Signature --> Chip & PIN 2020
Replies: 24
Views: 1318

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

... Dunning-Kruger is tricky. It reminds me of the liar paradox "this statement is false." If I claim that I am a better investor, I must be suffering from illusory superiority. If I am modest about my investing ability, I must be underestimating my skill. ... With due respect, Victoria, ...
by Phineas J. Whoopee
Tue Oct 21, 2014 8:37 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 133
Views: 9591

Re: Local college invests 56% of assets in "alternatives"

There was a news bit on Bloomberg today that none of the ivy league colleges endowments beat the S&P 500. The highest was about 20% vs the S&P 500 of about 29%. I only saw it for a moment so I may have the numbers off a bit. Alternative investments/hedge funds were all the rage -- that may ...
by Phineas J. Whoopee
Tue Oct 21, 2014 8:23 pm
 
Forum: Investing - Theory, News & General
Topic: Local college invests 56% of assets in "alternatives"
Replies: 29
Views: 2851

Re: Why include International Index in AA?

It's a contentious issue, not everyone agrees, there isn't even a Boglehead consensus, and it may turn out not to make any important difference. So far so good? Reasons not to: US stocks are the best! USA Blast! USA! USA! US stocks get plenty of their revenue from it isn't important to get reven...
by Phineas J. Whoopee
Tue Oct 21, 2014 7:23 pm
 
Forum: Investing - Theory, News & General
Topic: Why include International Index in AA?
Replies: 39
Views: 2772

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

Do engineers think they're better than other investors at picking stocks to any greater degree than non-engineers think they're better? Sorry to rain on everyone's speculative parade with a testable question. Engineers in my acquaintance don't always do that, which is why they're more successful th...
by Phineas J. Whoopee
Tue Oct 21, 2014 6:02 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 133
Views: 9591

Re: Bonds in taxable or tax advantaged?

^ Rick's recommendation assumes behavioral errors.
PJW
by Phineas J. Whoopee
Tue Oct 21, 2014 5:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in taxable or tax advantaged?
Replies: 9
Views: 875

Re: Bonds in taxable or tax advantaged?

That's a subject which has come up several times over the past few low-bond-yield years. One view has been to invert the traditional order, keep bonds in taxable, pay little in income tax because the interest is so low, then when intermediate-term interest rates go up Real Soon Now sell the bonds af...
by Phineas J. Whoopee
Tue Oct 21, 2014 4:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in taxable or tax advantaged?
Replies: 9
Views: 875

Re: How does one hedge against deflation?

... Once the TIPS fell below par, it would (mathematically) have to offer a real return to an investor-- making them quite attractive instruments. How would a TIPS trading below par because of a rise in real interest rates have a higher real YTM than one just issued offering the same recently-risen...
by Phineas J. Whoopee
Tue Oct 21, 2014 2:43 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 52
Views: 3874

Re: Local college invests 56% of assets in "alternatives"

I learned, through experience operating several cars and a couple of trucks, that if my objective is to overtake another driver I can't do it by staying in the same lane they chose. I suppose that must be true for investing: if my objective is to overtake other investors I can't do it by buying the ...
by Phineas J. Whoopee
Tue Oct 21, 2014 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: Local college invests 56% of assets in "alternatives"
Replies: 29
Views: 2851

Re: When people put all their eggs in the wrong basket

I like thought experiments. In my earlier message cited here, I looked for possible explanations of why one would put all money into a single stock. It's easy to claim that some people are just stupid and leave the topic. I wanted to find a plausible explanation apart from stupidity. Victoria [I fi...
by Phineas J. Whoopee
Tue Oct 21, 2014 1:38 pm
 
Forum: Investing - Theory, News & General
Topic: When people put all their eggs in the wrong basket
Replies: 233
Views: 26621

Re: How does one hedge against deflation?

... PS. Because of the Treasury's guarantee, wouldn't a bond whose adjusted principle was below par value due to prolonged deflation likely be valued "at par" by the market? By that reasoning, nominal treasury debt would never trade below par, because of the promise to return all principa...
by Phineas J. Whoopee
Tue Oct 21, 2014 12:49 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 52
Views: 3874

Re: How does one hedge against deflation?

... • TIPS that have been outstanding, say, 5 or 10 years have likely accrued a fair amount of inflation in their current value. If deflation was prolonged over years, these TIPS would eventually lose that accrued inflation down to the par value of the bonds (the amount the bond holder is entitled ...
by Phineas J. Whoopee
Tue Oct 21, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 52
Views: 3874

Re: What tax software do you use and why

... I am curious. If you don't mind saying, what was the rule the software didn't implement correctly? ... I'm pretty sure it was TaxAct, several years ago (within the last seven, because I remember where I was living while I worked it out). I've looked back through my notes and I didn't keep a rec...
by Phineas J. Whoopee
Sun Oct 19, 2014 5:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: What tax software do you use and why
Replies: 54
Views: 2569

Re: "The best response to market volatility"

What a wildly volatile week! Well, not so much week, as several wildly volatile days in close proximity. To wit, my total retirement portfolio value as of close of trade two days ago (Friday 17th) compared to one week earlier, was down 0.001%. That's the fewest figures I can use to prevent its round...
by Phineas J. Whoopee
Sun Oct 19, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: "The best response to market volatility"
Replies: 27
Views: 3350
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