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Re: Which Bond Fund in this Rising Interest Rates environmen

I thought there was no risk of loss in a bond fund as long you do not sell the fund prior to the length of its duration. (assuming reinvestment of dividends) OK, you have got to be kidding me. I have read just about every bond fund thread on this board for the past 6 months and seen many back and f...
by Strevlac
Fri Dec 06, 2013 7:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which Bond Fund in this Rising Interest Rates environment?
Replies: 44
Views: 4137

Re: Question About Capital Gain Distributions In Taxable Acc

http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Capital-Gains,-Losses,-Sale-of-Home/Mutual-Funds-(Costs,-Distributions,-etc.)/Mutual-Funds-(Costs,-Distributions,-etc.)-4 "Capital gains distributions are taxed as long-te...
by Strevlac
Sun Dec 01, 2013 1:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question About Capital Gain Distributions In Taxable Account
Replies: 3
Views: 345

Question About Capital Gain Distributions In Taxable Account

How exactly does the taxation of these distributions work? I am assuming that short term vs long term cap gains on securities held by the fund itself will be spelled out on the 1099? If that's the case (again, not sure), then how does that relate to how long one has actually held the fund shares? I....
by Strevlac
Sun Dec 01, 2013 12:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question About Capital Gain Distributions In Taxable Account
Replies: 3
Views: 345

Re: Confused about margin

Assuming I have $100 invested in marginable securities and I borrow $25 on margin and add to my $100 position, I'm now long $125. If the market falls 75% I will be left with $31.25 which is well above the $25 I borrowed so it won't trigger a margin call. I do understand that out of the $31.25 $25 b...
by Strevlac
Wed Nov 27, 2013 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Confused about margin
Replies: 23
Views: 1543

Re: Confused about margin

I don't see how this is a bad thing to do. Basically, if investing in the market is the best way to invest your money, if you are able to invest it using money borrowed at 1.33%, with sufficient buffer to avoid a margin call, it seems like the smart thing to do. No? Sure, it's very smart. Except wh...
by Strevlac
Wed Nov 27, 2013 4:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Confused about margin
Replies: 23
Views: 1543

Re: Confused about margin

These threads are popping up more and more.

Hmmm.
by Strevlac
Wed Nov 27, 2013 1:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Confused about margin
Replies: 23
Views: 1543

Re: 3rd yr Boglehead Anniversary - Annual Checkup - 27 yr ol

Gross 70,000.00 401K (17,500.00) Est Health Prem (5,000.00) HSA Account (1,000.00) AGI 46,500.00 Standard Deduction (3,800.00) Exemption (5,950.00) Taxable Income 36,750.00 Up to $17,850 1,785.00 $17,851 - $72,500 2,835.00 Total Tax 4,620.00 Gross 70,000.00 SS Tax Rate 6.20% Medicare Tax Rate 1.45% ...
by Strevlac
Fri Nov 22, 2013 9:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: 3rd yr Boglehead Anniversary - Annual Checkup - 27 yr old.
Replies: 21
Views: 1553

Re: 3rd yr Boglehead Anniversary - Annual Checkup - 27 yr ol

You're doing an incredible job. You've gone from $150K 2 years ago, to ~$210,000 last year to ~$315K this year. How does one do this on $70k a year? Good question. Returns over 2 years average around 20% a year, so that accounts for a majority of the results, but not completely without basically in...
by Strevlac
Fri Nov 22, 2013 9:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: 3rd yr Boglehead Anniversary - Annual Checkup - 27 yr old.
Replies: 21
Views: 1553

Re: 3rd yr Boglehead Anniversary - Annual Checkup - 27 yr ol

hoppy08520 wrote:You're doing an incredible job. You've gone from $150K 2 years ago, to ~$210,000 last year to ~$315K this year.


How does one do this on $70k a year?
by Strevlac
Fri Nov 22, 2013 5:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: 3rd yr Boglehead Anniversary - Annual Checkup - 27 yr old.
Replies: 21
Views: 1553

Re: ETFs vs. Mutual Funds for Young Investor

Long-term capital gains and dividends are taxed at 0% for those in the 15% tax bracket, correct? If the OP is in that bracket or if he could up his 401K contribution and/or itemize deductions until he gets there, then taxes shouldn't be an issue for equity holdings. Unless the tax law changes, of co...
by Strevlac
Wed Nov 13, 2013 9:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: ETFs vs. Mutual Funds for Young Investor
Replies: 6
Views: 799

Re: index funds in taxable accounts

It depends on what kind of fund and what tax bracket you are in. Qualified dividends (which include dividends for stock funds) and long-term capital gains are taxed at a lower rate. Currently these are taxed at 0% for those in the 15% tax bracket. Bond fund dividends are nonqualified and therefore a...
by Strevlac
Sat Oct 19, 2013 7:46 pm
 
Forum: Investing - Theory, News & General
Topic: index funds in taxable accounts
Replies: 3
Views: 591

Re: POLL: What is your rate of return YTD?

12.44% as of market close 10/17/13.

Asset Allocation:
50% US Stocks
14% International Stocks
20% Bonds
16% Cash
by Strevlac
Thu Oct 17, 2013 6:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: POLL: What is your rate of return YTD?
Replies: 89
Views: 6153

Re: Home Affordability

Maybe I missed it but....health insurance premiums?
by Strevlac
Thu Oct 17, 2013 2:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Home Affordability [check my calculations]
Replies: 77
Views: 4427

Re: Now stocks feel expensive

I bought my first shares of the Total Stock Market Index (VTI) in November 2012 for $71.72/unit. I remember at the time that it felt "expensive", and there were many posts about the stock market being at an "all time high", etc. It's hard to believe that the same shares are wort...
by Strevlac
Thu Oct 17, 2013 1:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Now stocks feel expensive
Replies: 13
Views: 1538

Re: Jack Bogle says rebalancing is overhyped?!

Let me ask a hypothetical question: Is having $500K in stocks the same risk as having $250K in stocks? Actually, that's a loaded question. Most people would probably say that $500K in stocks is riskier than $250K, because you stand to lose a lot more dollars if stocks really head south. In 2008, fo...
by Strevlac
Wed Oct 16, 2013 9:05 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle says rebalancing is overhyped?!
Replies: 83
Views: 8192

Re: Talk me down

Wouldn't extremely low P/B ratios indicate lots of capital with poor prospects of creating future earnings? Companies can burn through a mountain of cash very fast....management makes out like bandits and owners are left holding the bag.

OTOH you seem to have done OK with your picks.
by Strevlac
Wed Oct 16, 2013 5:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Talk me down
Replies: 77
Views: 5543

Re: Any Dangerous Boglehead Group-Think?

William Million wrote:. . . . because so many posters here now have more in PE10 than any rational index investor, such as John Bogle.


What does this even mean?
by Strevlac
Wed Oct 16, 2013 4:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Any Dangerous Boglehead Group-Think?
Replies: 73
Views: 4495

Re: Jack Bogle says rebalancing is overhyped?!

I never thought of rebalancing as anything other than maintaining a risk profile. If I decide on day one that I am comfortable with 50/50 or some kind of glide path or whatever, then in the absence of some fundamental change in my need/ability/willingness to take risk, then that is what I should sti...
by Strevlac
Wed Oct 16, 2013 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle says rebalancing is overhyped?!
Replies: 83
Views: 8192

Re: Help with Market Timing (Forced)

How about ETFs?
by Strevlac
Wed Oct 02, 2013 9:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with Market Timing (Forced)
Replies: 9
Views: 1151

Re: Indexing and Past Performance

It's not based on past performance. It's based on the math of the market. Beating the market is a zero-sum game. Money managers charge a fee to take investors money and try to beat the market. Since each money manager is competing with all of the other money managers and individual investors, who c...
by Strevlac
Sun Sep 15, 2013 2:19 pm
 
Forum: Investing - Theory, News & General
Topic: Indexing and Past Performance
Replies: 15
Views: 861

Re: Indexing and Past Performance

It's not based on past performance. It's based on the math of the market. Beating the market is a zero-sum game. Money managers charge a fee to take investors money and try to beat the market. Since each money manager is competing with all of the other money managers and individual investors, who co...
by Strevlac
Sun Sep 15, 2013 10:58 am
 
Forum: Investing - Theory, News & General
Topic: Indexing and Past Performance
Replies: 15
Views: 861

Re: Dividend, growth investment strategy

1. The growth-of-$10K chart is irrelevant for DG strategy because it shows the portfolio balance, when the important thing for DG investor is the income. If you never sell a share, then the price fluctuations and your portfolio balance doesn't matter. Total return = price change + income. If price ...
by Strevlac
Thu Sep 12, 2013 9:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dividend, growth investment strategy
Replies: 95
Views: 6292

Re: These funds have beaten the Vgd Idxs over 10 yrs

This is all very basic stuff. Jack Bogle laid it out in his senior thesis at Princeton more than 60 years ago. He has repeated that simple analysis in every one of his published books since then. It is very simple math. Really. I'm surprised that various posters with hundreds/thousands of posts hav...
by Strevlac
Tue Sep 10, 2013 7:46 pm
 
Forum: Investing - Theory, News & General
Topic: These funds have beaten the Vgd Idxs over 10 yrs
Replies: 64
Views: 5172

Re: Dividend, growth investment strategy

1. The growth-of-$10K chart is irrelevant for DG strategy because it shows the portfolio balance, when the important thing for DG investor is the income. If you never sell a share, then the price fluctuations and your portfolio balance doesn't matter. Total return = price change + income. If price ...
by Strevlac
Tue Sep 10, 2013 11:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Dividend, growth investment strategy
Replies: 95
Views: 6292

Re: Where to invest money

Ibonds?
by Strevlac
Mon Sep 09, 2013 11:39 am
 
Forum: Investing - Help with Personal Investments
Topic: Where to invest money
Replies: 11
Views: 1218

Re: I just don't get this rise in interest rates

This is kind of ugly (I couldn't get everything to line up properly) but hopefully it makes sense. Scenario two, rates rise 1% in year five, incur a $50 "loss" to buy a new bond. Result = same ending balance as scenario 1. Scenario 1 - Hold Until Maturity 2.00% Year Principal Interest Bala...
by Strevlac
Sat Sep 07, 2013 9:35 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

and in the example above selling at $950 and rebuying at $1000, you'd have a real loss, even if you bought another bond at a higher yield. And if the new bond you bought drops in value and you repeat your sale and purchase at a loss you'd be compounding your loss. If you sell a stock mutual fund af...
by Strevlac
Sat Sep 07, 2013 8:02 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

Bonds mature, Bond Funds do not. Where can we find the % of bonds in TBM held to maturity? +100% turnover rate doesn't indicate that the fund holds all bonds to maturity. I would argue that such as statistic is meaningless for a bond fund. The Vanguard Total Bond Market fund buys and sells bonds ei...
by Strevlac
Sat Sep 07, 2013 9:54 am
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

Bonds mature, Bond Funds do not. Where can we find the % of bonds in TBM held to maturity? +100% turnover rate doesn't indicate that the fund holds all bonds to maturity. I would argue that such as statistic is meaningless for a bond fund. The Vanguard Total Bond Market fund buys and sells bonds ei...
by Strevlac
Fri Sep 06, 2013 7:15 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

Bonds mature, Bond Funds do not. Where can we find the % of bonds in TBM held to maturity? +100% turnover rate doesn't indicate that the fund holds all bonds to maturity. I would argue that such as statistic is meaningless for a bond fund. The Vanguard Total Bond Market fund buys and sells bonds ei...
by Strevlac
Fri Sep 06, 2013 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

This is a great thread. The chart in the first post is one of the best I've seen: viewtopic.php?f=10&t=120947
by Strevlac
Thu Sep 05, 2013 8:52 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

I wouldn't say freaking out, but I would like to know why it is considered reasonable to justify a somewhat large loss in a bond price just by saying "I will hold it 30 years until maturity" when you could say the same thing about a large loss in a stock index price...just hold the stock ...
by Strevlac
Thu Sep 05, 2013 8:29 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: I just don't get this rise in interest rates

All of this bond angst has me wondering if I am missing something. I buy shares of bond funds with the intention of holding them forever, or until such time (hopefully late in life) that I am forced to liquidate. I buy them to reinvest the dividends during my accumulation phase, and live off of the ...
by Strevlac
Thu Sep 05, 2013 8:21 pm
 
Forum: Investing - Theory, News & General
Topic: I just don't get this rise in interest rates
Replies: 104
Views: 6852

Re: A Professor Puts the Scare in Plan Sponsors

manwithnoname wrote:I made my pile and its enough to build several castles.


No doubt due to those "reasonable" 401K fees.
by Strevlac
Sun Aug 11, 2013 8:58 pm
 
Forum: Investing - Theory, News & General
Topic: A Professor Puts the Scare in Plan Sponsors
Replies: 102
Views: 10028

Re: Why must 401Ks be company specific?

This drives me absolutely batty. I hate that the government is dangling this juicy 401(k) carrot in front of me, and I've got to go beg my CFO to dump John Hancock as our provider in order for those tax incentives to be worth a damn. I can think of three better options: 1) Allow employees to shop f...
by Strevlac
Sun Aug 11, 2013 10:53 am
 
Forum: Investing - Theory, News & General
Topic: Why must 401Ks be company specific?
Replies: 27
Views: 2063

Re: Long Term Steady Growth for Cash Balance Plan

I was simply responding to the question as stated. ...a conservative mix of funds aimed at primarily capital preservation and 5% a year? Anything, currently, that preserves capital is not going to yield 5% a year, and anything that yields 5% a year is not going to preserve capital. But I guess you ...
by Strevlac
Sat Aug 10, 2013 9:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Long Term Steady Growth for Cash Balance Plan
Replies: 15
Views: 692

Re: Does a home mortgage use Simple or Compund Interest?

There is absolutely no question at all that 555 is correct. It's simple math. How did this thread go on for so long? Yeah. Wouldn't a simple interest mortgage have the same split between principal and interest for every payment (so principal is reduced in a straight-line fashion)? That is certainly...
by Strevlac
Wed Aug 07, 2013 5:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does a home mortgage use Simple or Compund Interest?
Replies: 126
Views: 7337

Re: Why rebalance into bonds?

The best answer I feel I've gotten is that it "helps to balance risk". Unfortunately, that answer doesn't sway my opinion on making allocation decisions, because when the methodology calls for moving your bonds into stocks, it is actually increasing your risks. But, for those who are able...
by Strevlac
Fri Aug 02, 2013 7:08 pm
 
Forum: Investing - Theory, News & General
Topic: Why rebalance into bonds?
Replies: 58
Views: 5099

Re: Long-Term Returns website down?

Financial institutions guard their reputations very aggressively since any inference that they are not beyond reproach could result in customers leaving and the company falling into bankruptcy (MF Global). Even prominent media outlets will be be besieged by an army of lawyers if anything said in pr...
by Strevlac
Sat Jul 27, 2013 3:55 pm
 
Forum: Investing - Theory, News & General
Topic: Long-Term Returns website down?
Replies: 56
Views: 7695

Re: A Professor Puts the Scare in Plan Sponsors

manwithnoname wrote:Someone has to pay for all this regulation.
[/quote]


Which is exactly the way you like it, I'm sure.

One simple change in tax law would make all of this moot, and kick 95% of guys like you to the curb. Sure would be a bummer to have to get a real job though wouldn't it?
by Strevlac
Thu Jul 25, 2013 8:09 pm
 
Forum: Investing - Theory, News & General
Topic: A Professor Puts the Scare in Plan Sponsors
Replies: 102
Views: 10028

Re: The Professor is not identifying companies

According to the WSJ the professor is now back peddling and will not release any company specific data based on 2009 data. :annoyed Also he is not responding to any inquiries-all questions are being referred to Yale spokespersons. Yale recognizes its reputational risk. Yale is also very big on acad...
by Strevlac
Thu Jul 25, 2013 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: A Professor Puts the Scare in Plan Sponsors
Replies: 102
Views: 10028

Re: Is 401k that good nowadays ?

Assuming those ERs include admin fees, etc (and probably even if they don't), this looks like a GREAT plan.

Any of you willing to share who this plan is through?
by Strevlac
Tue Jul 02, 2013 3:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is 401k that good nowadays ?
Replies: 29
Views: 2742

Re: 401k Admin Fee/Fund Selection

I would want clarification if .6% is actually an itemized charge in addition to fund expense ratios. A lot of recordkeepers and TPA's get their fee from the funds rather than participants directly through what is called "revenue sharing" The Vanguard target funds are the best around. If th...
by Strevlac
Thu Jun 06, 2013 4:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k Admin Fee/Fund Selection
Replies: 7
Views: 396

Re: Buffett on bonds

There has been a lot of talk about an inevitable increase in interest rates, but much less talk about our governments ability to pay higher rates on our national debt. What is it now, 13 trillion and rising? That's what has me thinking rates are going to be very, very low for the forseeable future. ...
by Strevlac
Sat May 18, 2013 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: Buffet says no to bonds - recommends equities and cash
Replies: 70
Views: 7241

Re: Company 401k - Suggestions for Improvements

If the $40,000 TPA charge is based off of AUM then you are implying your total plan assets are 20 million. Seems like Vanguard would set up and run a 401k for an account that large, no? Have you contacted them or Fidelity? $20m, that is correct. To recap: .45 provider fee .2 TPA .07 budgeted someth...
by Strevlac
Sat May 11, 2013 1:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Company 401k - Suggestions for Improvements
Replies: 7
Views: 432

Re: Company 401k - Suggestions for Improvements

I really appreciate you folks taking the time to offer suggestions, thank you very much. To clarify, none of the plan costs are absorbed by the employer. The provider and TPA costs are all bourne by the participants, either through a cut of the funds expense ratio (revenue sharing) or directly. I ca...
by Strevlac
Sat May 11, 2013 12:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Company 401k - Suggestions for Improvements
Replies: 7
Views: 432

Company 401k - Suggestions for Improvements

So I've dug into my companies 401k and fee structure to where I think I have a handle on how this works. I'm in a position to make suggestions for improvements, or possibly change the provider and TPA completely. I know what my idea of the perfect 401k plan is (all index funds/Vanguard target date f...
by Strevlac
Sat May 11, 2013 11:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Company 401k - Suggestions for Improvements
Replies: 7
Views: 432

Re: Employer is letting me decide which 401k plan to choose

Keep in mind that the asset charge is often offset by "revenue sharing" which comes out of the fund expense ratio and goes to the 401K provider. My company uses Transamerica and as far s I can tell from the plan documents, that's the case with them.
by Strevlac
Fri May 10, 2013 2:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Employer is letting me decide which 401k plan to choose
Replies: 16
Views: 1283

Re: Inflation - how to treat in retirement projection

Inflation - how to treat in retirement projection? IMO it's a waste of time and energy. I just project expenses in nominal terms and my "best guess" of real investment returns on the total portfolio...4%. Some might see that as aggressive, some might see it as conservative, but it doesn't...
by Strevlac
Thu May 09, 2013 9:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inflation - how to treat in retirement projection
Replies: 14
Views: 774

Re: Frontline--The Retirement Gamble

Wall Street is not a zero-sum game. For every winner there is a loser. This is not correct. Oops! I mixed that up. :( I meant "Wall Street is a zero sum game." It is indeed possible for all market participants to "win". If you define "win" as "earn what the market...
by Strevlac
Tue Apr 30, 2013 7:30 pm
 
Forum: Investing - Theory, News & General
Topic: Frontline--The Retirement Gamble
Replies: 318
Views: 33124
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