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Vanguard hedging costs and methods

Rick Ferri recently commented that the hedging of the US dollar has costs and therefor feels that the fund is not worth it. He stated that USD hedging approximately doubles the expense. Essentially the .2% ER is close to .4% due to the hidden hedging cost. SpringMan: Vanguard published this article...
by Taylor Larimore
Mon Jun 17, 2013 5:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is 3-Fund now 4-Fund with new Int. Bond Fund?
Replies: 8
Views: 1240

Vanguard's "At Cost Cafe" truck.

Bogleheads: Vanguard has been crossing the country with its At-Cost Cafe truck , which markets Vanguard's at-cost structure by selling coffee for $0.26 per cup. It's a good shtick and a dramatic illustration of how disruptive Vanguard has been to the U.S. fund industry. Source: Morningstar Best wish...
by Taylor Larimore
Mon Jun 17, 2013 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's "At Cost Cafe" truck.
Replies: 13
Views: 1382

Adding International Bonds to the Three Fund Portfolio ?

Any ideas about how the new Total International Bond Fund will affect the 3-Fund portfolio recommended on this forum? Fillol Fillol: I am studying the theory, the effect, and the practical benefit of adding an international bond fund to The Three Fund Portfolio. "There seems to be some pervers...
by Taylor Larimore
Mon Jun 17, 2013 5:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is 3-Fund now 4-Fund with new Int. Bond Fund?
Replies: 8
Views: 1240

Re: Growth; Value; and Total Stock Market

Mr. Bogle has examined the long-term returns of growth and value stocks and explains why he prefers a total market index fund. Bogleheads can read about it in this 2002 Keynote speech he gave at the Morningstar Investment Conference in Chicago (I heard him give it). Or you can read the work of Prof...
by Taylor Larimore
Mon Jun 17, 2013 5:00 pm
 
Forum: Investing - Theory, News & General
Topic: VTI or VIG as a core U.S Stock Market Holding
Replies: 15
Views: 1137

Growth; Value; and Total Stock Market

Mr. Bogle has examined the long-term returns of growth and value stocks and explains why he prefers a total market index fund. Bogleheads can read about it in this 2002 Keynote speech he gave at the Morningstar Investment Conference in Chicago (I heard him give it). The Telltale Chart Best wishes. T...
by Taylor Larimore
Mon Jun 17, 2013 4:44 pm
 
Forum: Investing - Theory, News & General
Topic: VTI or VIG as a core U.S Stock Market Holding
Replies: 15
Views: 1137

Diversified RE in a single market ?

avn2109 wrote:I want to own a diversified portfolio of real estate in a single market (say NYC or Chicago)

Avn:

Do you realize that "a diversified portfolio of real estate in a single market" is an oxymoron? :?

Best wishes.
Taylor
by Taylor Larimore
Mon Jun 17, 2013 12:13 pm
 
Forum: Investing - Theory, News & General
Topic: How to own diversified RE in a single market
Replies: 8
Views: 728

My best investment.

guitarguy wrote:
I enjoy getting her flowers randomly so much more.

I made a habit of bringing my wife a bouquet of inexpensive flowers about once a week. Probably the best investment I ever made. :wink:

Best wishes.
Taylor
by Taylor Larimore
Mon Jun 17, 2013 12:05 pm
 
Forum: Personal Consumer Issues
Topic: What did you give your wife on your wedding day?
Replies: 64
Views: 2824

Small-Cap Growth vs. Small-Cap Value

Adding small value is also a tilt towards small value and away from small growth (aka the "black hole of investing".) The "black hole of investing" has done quite well. These are annualized returns for Vanguard Small-Cap Growth (VISGX) and Vanguard Small-Cap Value (VISVX) funds:...
by Taylor Larimore
Mon Jun 17, 2013 11:59 am
 
Forum: Investing - Theory, News & General
Topic: VTI or VIG as a core U.S Stock Market Holding
Replies: 15
Views: 1137

Wedding gifts.

I'm getting married in about six weeks and I'm still struggling with a wedding gift for my soon to be wife. What did you get your wife? Any suggestions or lessons learned? Camoaero: We were married 62 years ago. I never heard of anyone (except possibly a self-serving shopkeeper) suggesting that the...
by Taylor Larimore
Mon Jun 17, 2013 9:46 am
 
Forum: Personal Consumer Issues
Topic: What did you give your wife on your wedding day?
Replies: 64
Views: 2824

Re: Happy Father's Day !

Kathleen:

Thank you, from myself and all the other Boglehead fathers who learn and contribute to this forum.

Best wishes
Taylor
by Taylor Larimore
Sun Jun 16, 2013 1:54 pm
 
Forum: Personal Consumer Issues
Topic: Happy Father's Day
Replies: 5
Views: 303

Mr. Bogle and "cognitive decline"

He (Mr. Bogle) is 84. I know there are people here who don't believe that cognitive decline comes with age, but you are in a tiny minority. Read any scientific study of aging and you will see that by age 80 there is a definite measurable mental decline. Mr. Bogle's "cognitive decline" (if...
by Taylor Larimore
Sat Jun 15, 2013 8:05 am
 
Forum: Investing - Theory, News & General
Topic: Bogle: Too Much In Bonds
Replies: 115
Views: 9197

Past Performance ?

Bogleheads: These are excerpts from a new Rick Ferri article about " Past Performance ": Wishing Upon a Star Manager Doesn't Work: "71% of current owners rank past performance as “very influential” or “somewhat influential” when selecting mutual funds, according to survey conducted by...
by Taylor Larimore
Fri Jun 14, 2013 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: Past Performance ?
Replies: 0
Views: 194

Re: What does it take to become a Boglehead?

What does it take to successfully convert someone to a Boglehead? Rick: This is the Boglehead Philosophy: 1 Develop a workable plan 2 Invest early and often 3 Never bear too much or too little risk 4 Diversify 5 Never try to time the market 6 Use index funds when possible 7 Keep Costs Low 8 Minimiz...
by Taylor Larimore
Thu Jun 13, 2013 1:02 pm
 
Forum: Investing - Theory, News & General
Topic: What does it take to become a Boglehead?
Replies: 31
Views: 2071

Re: Windfall management with low income

I'm mid-twenties and just started my first "real" job. It pays $50k / year and I will earn about $25k for tax year 2013. The nature of my career is I will earn $50k/year for 5 years and then about $200k annually after that. Obviously, I would like to pay taxes now rather than later. My jo...
by Taylor Larimore
Thu Jun 13, 2013 12:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Windfall management with low income
Replies: 8
Views: 614

Order of rebalancing

Jay wrote: I am not able to understand how the taxes in the taxable account will work. When I rebalance (which is essentially selling and buying shares), should I only rebalance in the IRAs (since they're tax sheltered)? If you rebalance in your taxable account at this time, you will probably be sel...
by Taylor Larimore
Thu Jun 13, 2013 8:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Tax implications on taxable accounts
Replies: 29
Views: 1854

Jack Bogle on Market Timing.

Big Worm: Our mentor, Jack Bogle, wrote in Common Sense on Mutual Funds : After nearly fifty years in this business, I do not know of anybody who has done it (market timing) successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Your...
by Taylor Larimore
Thu Jun 13, 2013 8:38 am
 
Forum: Investing - Theory, News & General
Topic: Timing the market
Replies: 16
Views: 1074

Re: Tax Managed International (TMI) vs TISM ?

Calm Man wrote: Since I am rather sensitive to taxes as many of us are, is it a case of cutting off one's nose to spite the face to just go with TMI (Tax Managed International) instead of TISM (Total International)? No one can tell you which fund will have the higher after-tax return and the least v...
by Taylor Larimore
Wed Jun 12, 2013 11:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Tax Managed International (TMI) vs TISM
Replies: 8
Views: 590

Variable Annuities: Promises vs. actuality

Bogleheads: Readers of this forum, know that Bogleheads are not fans of Variable Annuities. In his latest newsletter, Mike Piper, editor of the Oblivious Investor , gives a good example of the promises of a variable annuity compared with actuality. Variable Annuity with a 5.5% Guaranteed Growth Rate...
by Taylor Larimore
Wed Jun 12, 2013 10:52 am
 
Forum: Investing - Theory, News & General
Topic: Variable Annuities: Promises vs. actuality
Replies: 12
Views: 1217

Re: TSP G fund as only bond fund

I'm working on simplifying our (I'm married) investments and wonder if it makes sense to use my TSP G fund as our only bond fund. We are both 39 and right now are probably a bit low on our bond allocation. I'm thinking 20-25% in the TSP G fund (I also have a pension that is growing each year). Is t...
by Taylor Larimore
Wed Jun 12, 2013 10:22 am
 
Forum: Investing - Help with Personal Investments
Topic: TSP G fund as only bond fund
Replies: 54
Views: 3009

Listening to the experts . .

I can tell you from experience that you can copy an adviser's portfolio or come up with your own logical allocation, the results of all portfolios with the same equity and fixed income allocation are going to be based on risk and randomness ~ and more so on randomness. One intelligently crafted mix...
by Taylor Larimore
Wed Jun 12, 2013 10:12 am
 
Forum: Investing - Help with Personal Investments
Topic: So my advisor says........
Replies: 51
Views: 4598

Re: course(free) on investing but it will be hard

Bogleheads:
"There seems to be some perverse human characteristic that likes to make easy things difficult." -- Warren Buffett

Best wishes.
Taylor
by Taylor Larimore
Tue Jun 11, 2013 9:53 pm
 
Forum: Investing - Theory, News & General
Topic: course(free) on investing but it will be hard
Replies: 8
Views: 978

Sell Total Bond Market Index Fund ?

John: Do you also see dropping total bond market as a solution? I don't have the choice in my 401, I don't know if I would hold total bond index. Would you hold total bond or switch to CDs as link mentioned? I intend to hold the diversified Total Bond Market Index Fund. It's Tracking Index performan...
by Taylor Larimore
Mon Jun 10, 2013 8:53 pm
 
Forum: Investing - Theory, News & General
Topic: Alan Roth: "At long last, a forecast worth heeding"
Replies: 31
Views: 4151

Re: Alan Roth: "At long last, a forecast worth heeding"

RNJ:

When Vanguard speaks--I listen. When Allan Roth speaks--I listen. When they agree--I listen intently.

Thank you and best wishes.
Taylor
by Taylor Larimore
Mon Jun 10, 2013 8:13 pm
 
Forum: Investing - Theory, News & General
Topic: Alan Roth: "At long last, a forecast worth heeding"
Replies: 31
Views: 4151

Past performance.

Sir Horice: Your chart showing the superiority of Wellesley's past performance over each of the three individual total market index funds is enticing. However, this is what investing authorities tell us about using "past performance" to select funds: Frank Armstrong, financial author: &quo...
by Taylor Larimore
Mon Jun 10, 2013 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: The Three Fund Portfolio
Replies: 470
Views: 137079

Re: Wellington Fund or Total Stock Market Index Fund?

Casey: This is what investing authorities (and the government) say about using past performance to pick mutual funds: Jack Bogle: "In selecting equity funds, no analysis of the past, no matter how painstaking, assures future superiority." Frank Armstrong, financial author: "Rating ser...
by Taylor Larimore
Mon Jun 10, 2013 7:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Wellington Fund or Total Stock Market Index Fund?
Replies: 19
Views: 2064

Good luck or smart timing ?

Taylor, I know you could never be accused of market timing, but your switch in TIPS funds seems to have worked out very well: VIPSX (original TIPS fund): -4.62% YTD VTAPX (short-term TIPS index): -1.08% YTD Congratulations! Brad Brad: I try not to confuse "brains" with "good luck.&qu...
by Taylor Larimore
Sun Jun 09, 2013 2:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inflation protected, VAIPX vs VTAPX vs VTIP
Replies: 19
Views: 2325

Re: Please review my plan.

markmadsden: Welcome to the Bogleheads Forum! I like how you are using a Target Retirement Income Fund in your Roth for a part of your emergency fund if it should be needed. I have not seen that before. Your reading has helped you structure a Boglehead portfolio that contains all the characteristics...
by Taylor Larimore
Sat Jun 08, 2013 9:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please review my plan-30 yo
Replies: 17
Views: 1548

Bogle: History of indexing and the mutual fund industry.

Nisiprius: Thank you for the link to Mr. Rekenthaler's article. For Bogleheads interested in the history of the mutual fund industry and indexing, the article contains a link to a lengthy speech on the subject that Mr. Bogle recently delivered to The Boston Security Analysts Society . BIG MONEY IN B...
by Taylor Larimore
Fri Jun 07, 2013 9:01 pm
 
Forum: Investing - Theory, News & General
Topic: "The Vanguard Anomaly"--Morningstar, Rekenthaler
Replies: 6
Views: 1916

Re: Individual Stocks VS Mutual Funds?

Black Swan: Owning a managed and diversified (lower risk) portfolio of every marketable individual stock in the United States, at a cost of only 0.05%/year Admiral shares, is a fantastic value. Mr. Bogle wrote in Bogle on Mutual Funds: "Attempting to build an investment program around a handful...
by Taylor Larimore
Fri Jun 07, 2013 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Stocks VS Mutual Funds/ETF
Replies: 49
Views: 1697

Re: "The Experts: Lessons from the 2008 breakdown"

Rick:

I agree with you. The more I learn about investing, the more I realize what I don't know.

"Expert" is a bad word. For a long time I avoided using it. However, nearly everyone seems to accept it, so I use it again.

Taylor
by Taylor Larimore
Fri Jun 07, 2013 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: "The Experts: Lessons from the 2008 breakdown"
Replies: 15
Views: 2295

"The Experts: Lessons from the 2008 breakdown"

Bogleheads: The Wall Street Journal asked a group of investing experts (including our own Rick Ferri): "What's the most important lesson for investors from the 2008 stock market meltdown?" This is their answer: http://online.wsj.com/article/SB10001424127887324178904578342792079645644.html?...
by Taylor Larimore
Fri Jun 07, 2013 1:31 pm
 
Forum: Investing - Theory, News & General
Topic: "The Experts: Lessons from the 2008 breakdown"
Replies: 15
Views: 2295

Adding bond funds?

xram: Personally, I would not bother with a taxable international bond fund unless I could put it within a tax-advantaged account. Even then, I would only add it to a large portfolio where it would be at least 20% of the bond allocation. Strive for simplicity -- not complexity. Best wishes. Taylor ...
by Taylor Larimore
Fri Jun 07, 2013 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 63
Views: 6463

Simplicity vs. Complexity

Meglin: Welcome to the Bogleheads forum. Due to concerns about the US debt, monetary policy, and US stocks being overvalued, I also read some Peter Schiff and Jim Rogers -- Then I designed a portfolio, which I thought was a good distillation of the above strategies, and invested in it in November 20...
by Taylor Larimore
Thu Jun 06, 2013 4:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review: (VTHRX) Vanguard 2030 is outperforming me
Replies: 20
Views: 1601

Re: Annual Meeting, Philly Area, 2013?

Keyle:

You can read about it here:

viewtopic.php?f=10&t=111986

I understand there are only a few openings left.

Best wishes.
Taylor
by Taylor Larimore
Thu Jun 06, 2013 2:30 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Annual Meeting, Philly Area, 2013?
Replies: 1
Views: 228

Re: Forbes Story How Retirees Pay Zero Taxes

Bogleads:

This tool shows the different tax rates for different states (New York is highest; Alaska lowest):

http://www.usatoday.com/story/money/per ... n/1937757/

Best wishes.
Taylor
by Taylor Larimore
Thu Jun 06, 2013 12:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Forbes Story How Retirees Pay Zero Taxes
Replies: 34
Views: 3868

Re: Vanguard's Bogle: Sound & Fury Signifying Nothing

Howard:

Thanks for the link and the title to your post.

Best wishes.
Taylor
by Taylor Larimore
Thu Jun 06, 2013 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's Bogle: Yesterday Sound & Fury Signifying Nothing
Replies: 16
Views: 2417

Pay Zero Taxes

rec7:

Interesting article with several things to remember like this:
No, the portfolio does not have to be tucked away in the Cayman Islands. It can be invested through a U.S. brokerage account in mainstream funds like Vanguard Total Stock Market. . .

Thank you and best wishes.
Taylor
by Taylor Larimore
Thu Jun 06, 2013 8:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Forbes Story How Retirees Pay Zero Taxes
Replies: 34
Views: 3868

Vanguard experts or forum posters ?

SippinHenn: What does Bogleheads feeling on this allocation for someone who would be theoretically retiring in approx. 43 years? The target fund allocation looks reasonable to me for a risk tolerant , young investor. Nevertheless, I would put more weight on an allocation recommended by Vanguard expe...
by Taylor Larimore
Wed Jun 05, 2013 10:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about following TR Funds
Replies: 4
Views: 354

Excellent illustration of how capital gain taxes work.

EmergDoc:

I love your illustration of how taxes can affect various funds differently. I haven't seen that easy-to-understand illustration before.

Thank you and best wishes.
Taylor
by Taylor Larimore
Wed Jun 05, 2013 9:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Discussion with Adviser
Replies: 32
Views: 2554

Re: Efficient Frontier

Hi Everyone, First post here, so I apologize if this question has been answered previously. My question is regarding how to calculate the efficient frontier. Specifically, lets say that I have 20 years of historical data for 20 asset classes and I calculate the variance and mean return for each ass...
by Taylor Larimore
Wed Jun 05, 2013 5:30 pm
 
Forum: Investing - Theory, News & General
Topic: Efficient Frontier
Replies: 14
Views: 1187

Adding an international bond fund?

xram: Personally, I would not bother with a taxable international bond fund unless I could put it within a tax-advantaged account. Even then, I would only add it to a large portfolio where it would be at least 20% of the bond allocation. Strive for simplicity -- not complexity. Best wishes. Taylor
by Taylor Larimore
Wed Jun 05, 2013 2:02 pm
 
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 63
Views: 6463

Mr. Bogle's words of wisdom

Thanks for your thought Taylor. I pretty much agree with you. The one thing I wonder about is just in theory, but not in practice because I don't slice and dice very intricately. However, it does seem that there are cases where emerging market currency would go down relative to the dollar, while em...
by Taylor Larimore
Wed Jun 05, 2013 1:49 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Emerging Markets Government Bond ETF (VWOB)
Replies: 8
Views: 578

Rebalancing The Three Fund Portfolio

beman wrote: My question to all in here: is re- balancing a hard thing to do, or is it fairly straight forward and not hard at all. One of the big advantages of The Three Fund Portfolio is that it greatly minimizes rebalancing because all the volitile sub-categories rebalance themselves (value, grow...
by Taylor Larimore
Wed Jun 05, 2013 11:18 am
 
Forum: Investing - Help with Personal Investments
Topic: So my advisor says........
Replies: 51
Views: 4598

Investing in international bonds ?

Thanks for the link. I didn't realize Vanguard had an emerging markets bond fund. There has been so much talk about the total international bond fund, and no talk about this. tc: In my opinion, investing in an International Emerging Markets Bond Fund is more akin to gambling than investing. If an i...
by Taylor Larimore
Wed Jun 05, 2013 10:39 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Emerging Markets Government Bond ETF (VWOB)
Replies: 8
Views: 578

Re: Nice NPR news story on indexing

Hi Spencer

The fund industry (Vanguard's an exception) is not going to like that article. :happy

Thank you and best wishes.
Taylor
by Taylor Larimore
Wed Jun 05, 2013 10:16 am
 
Forum: Investing - Theory, News & General
Topic: Nice NPR news story on indexing
Replies: 4
Views: 1014

Re: VG Total International Bond Fund is open

Where are folks holding the international bond fund? 401k? IRA? Taxable? xram: Taxable bonds should seldom be located in taxable accounts where dividends are taxed annually at higher income tax rates. In my opinion, it makes little difference between holding them in a 401k or an IRA. Dividends (yie...
by Taylor Larimore
Wed Jun 05, 2013 8:08 am
 
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 63
Views: 6463

Selling low.

knopflergrass wrote: If I withdraw a larger sum of money to buy a car let's say from an underperforming fund, rather than having only a single larger fund, say a VF total stock market, to withdraw from, won't that result in substantial tax savings? You are selling low. This is the opposite of what y...
by Taylor Larimore
Wed Jun 05, 2013 7:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Discussion with Adviser
Replies: 32
Views: 2554

Why investment grade bonds?

I'm curious as to why investment-grade-only bond indexes are popular, and not simply "total" bond market indexes. Focusing on investment-grade indexes seems akin to just having large-cap indexes. ftobin: Nearly all investing authorities believe that bonds are primarily to provide safety i...
by Taylor Larimore
Wed Jun 05, 2013 7:09 am
 
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 63
Views: 6463

Fixing a mistake.

Storm Shadow: If you want to correct the mistake-- do it immediately by phone and document your call (time, date, who you talked to). Back-up your call with Vanguard's website e-mail service. Vanguard will almost certainly correct their mistake -- and even if their tape shows they misunderstood your...
by Taylor Larimore
Tue Jun 04, 2013 8:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard mixup with purchasing mutual funds
Replies: 16
Views: 1412
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