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The Three Fund Portfolio

33ZY: Welcome to the Bogleheads forum! Yes you do need a plan. Central to that plan would be diversification. Bogleheads in general tend toward owning the whole market rather than a single market segment. That whole market includes all US stocks , all international stocks and (at least) all US bonds...
by Taylor Larimore
Fri Sep 19, 2014 9:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: No plan till today, not even frame work
Replies: 6
Views: 454

SPIAs are primarily insurance.

SPIAs aren't a bad product but you need to exceed you expected life expectancy by quite a bit to break even. That is almost the same as saying: Fire insurance is not a bad product but you need your house to burn down to break even. A SPIA is insurance against running out of money before running out...
by Taylor Larimore
Fri Sep 19, 2014 6:42 pm
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 44
Views: 2130

Re: Why wait to purchase a SPIA?

Most annuity salespeople will urge us to buy SPIA annuities NOW. Best wishes. Taylor Really? :confused Pretty sure that most annuity salespeople are urging us to buy higher commission products (Equity Indexed, "Hybrid', etc). ndchamp: You are undoubtedly correct. Thank you and best wishes. Tay...
by Taylor Larimore
Fri Sep 19, 2014 1:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Moshe Milevsky's Life Annuities Monograph
Replies: 17
Views: 1855

"The academic big guns behind your humble index tracker fund

Bogleheads:

The link below is to an excellent article (don't miss the video) featuring the history of indexing:

The academic big guns behind your humble index tracker fund

Best wishes.
Taylor
by Taylor Larimore
Fri Sep 19, 2014 12:54 pm
 
Forum: Investing - Theory, News & General
Topic: "The academic big guns behind your humble index tracker fund
Replies: 1
Views: 506

Boglehead definition

Bogleheads definition:

"Investors who foolishly use academic research for their investing. They also naively follow the wisdom of Jack Bogle who has more practical investing experience than anyone."

Best wishes.
Taylor
by Taylor Larimore
Fri Sep 19, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Jason's Zweig's new dictionary ---enjoy
Replies: 26
Views: 2238

Boglehead's care.

nelson1015 wrote:Taylor,

If you were 77 when the article was written, does that mean you're 90 now?

nelson 1015:

Yes; I'm 90 now. You can read my messages from hundred's of caring Bogleheads here:

Taylor's 90th Birthday

Best wishes.
Taylor
by Taylor Larimore
Fri Sep 19, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: "Here Come the Bogleheads" by Jason Zweig
Replies: 10
Views: 1899

My 2 annuities

Bogleheads: When I was about 82, my wife and I purchased two single premium immediate annuities (SPIAs) with these advantages: * The guaranteed annual lifetime income is about 11% of our investments. Today, similar joint annuities at age 82 will pay a guaranteed lifetime income of about 8%. * I no l...
by Taylor Larimore
Fri Sep 19, 2014 9:20 am
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 44
Views: 2130

"Here Come the Bogleheads" by Jason Zweig

Bogleheads: This morning I Goggled my favorite article about a Boglehead convention with the title: "Here Come the Bogleheads." The article was written by Jason Zweig for Money Magazine. Jason is now a highly respected columnist for the Wall Street JournaI. This wonderful article, written ...
by Taylor Larimore
Thu Sep 18, 2014 11:00 pm
 
Forum: Investing - Theory, News & General
Topic: "Here Come the Bogleheads" by Jason Zweig
Replies: 10
Views: 1899

Bond indexes

Bond index funds (like TBM and Total International), however, give you the organizations that are the most indebted and the most need of cash (maybe in trouble, like someone opening multiple credit card lines)? Is this even a problem? If it is a problem, is there a way around it without going to ac...
by Taylor Larimore
Thu Sep 18, 2014 10:07 am
 
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 9
Views: 672

Vanguard target funds.

That being said, i was going to call vanguard today and ask them about moving over, even before i saw this post. I was coming back here just now to ask why people recommended the target date fund through vanguard for someone with a small account balance. Why start there and then switch over to the ...
by Taylor Larimore
Thu Sep 18, 2014 9:05 am
 
Forum: Investing - Help with Personal Investments
Topic: How to add to my portfolio monthly without crazy fees
Replies: 31
Views: 1848

How does Vanguard make money? They don't.

One can also ask, "How does Vanguard make money from passive investors?" :)

They don't. Vanguard has no stockholders taking profits from our returns. Vanguard operates at cost. Any "profit" is returned to investors in their mutual fund returns.

Best wishes.
Taylor
by Taylor Larimore
Wed Sep 17, 2014 6:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to add to my portfolio monthly without crazy fees
Replies: 31
Views: 1848

Total Stock Market Index Fund Report

Bogleheads:

Morningstar recently reported that only 8 of 1,144 funds with Analyst Ratings have beaten their category averages for at least ten straight years. Total Stock Market Index Fund is one of them!

THE LONGEST WINNING STREAKS AMONG OUR RATED FUNDS

Best wishes.
Taylor
by Taylor Larimore
Tue Sep 16, 2014 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: The Three Fund Portfolio
Replies: 893
Views: 351360

T-Bills and The Three Fund Portfolio

I may have missed this in the 18 pages of this great thread, but where do t-bills fit into the 3-fund portfolio? Is it covered in TBM treasuries? I remember reading over and over in Bogle on Mutual Funds that they are an essential asset class. gvsucavieo3: In Bogle on Mutual Funds , Mr. Bogle offer...
by Taylor Larimore
Tue Sep 16, 2014 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: The Three Fund Portfolio
Replies: 893
Views: 351360

Vanguard Target Retirement Funds

i just want a good reliable index / mutual fund where i can put my money each month and save for retirement. (This is a Roth IRA.) -- If i'm trying to put 450$ a month (give or take) into the market, and not worry about it, what would be my best strategy with minimal fees? Notwerby: If the Roth IRA...
by Taylor Larimore
Tue Sep 16, 2014 9:19 am
 
Forum: Investing - Help with Personal Investments
Topic: How to add to my portfolio monthly without crazy fees
Replies: 31
Views: 1848

Vanguard Total Stock Market Index Fund (VTSMX)

Bogleheads: On October 26, 2000, Jack Bogle had the following to say to the Investment Analysts Society of Chicago. We formed the first S&P 500 Index fund in 1975, and then in 1987 pioneered the completion ("Extended Market") index fund, tracking the small- and mid-cap stocks unreprese...
by Taylor Larimore
Mon Sep 15, 2014 6:47 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Total Stock Market Index Fund (VTSMX)
Replies: 10
Views: 2088

Checking adviser's qualifications.

I've just signed with an adviser who is flat-fee only, fiduciary, and who blogs regularly about his investment philosophy (which pretty much exactly matches the Bogleheads' philosophy). He has no disciplinary actions logged against him anywhere, and I spoke with four current clients of his who prai...
by Taylor Larimore
Mon Sep 15, 2014 5:52 pm
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4542

Selecting an adviser

Bogleheads: It is instructive to read what Mr. Bogle wrote about advisers in Common Sense on Mutual Funds. This is a portion: Consider Carefully the Added Costs of Advice: Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do ...
by Taylor Larimore
Mon Sep 15, 2014 11:50 am
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4542

Keep investing simple

Supalong:

I have no idea if your father's investment in a new start-up company will be successful or not (no one knows). I do know that it is not worth the cost and aggravation for 1% of your portfolio.

Keep investing simple. Use the link below.

Best wishes.
Taylor
by Taylor Larimore
Mon Sep 15, 2014 8:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Investing in Startup My Father Is Joining as Founder
Replies: 16
Views: 1693

Past performance

He has raised some doubt in my mind about how correct I am in transferring everything to Vanguard. retire2044: The oldest trick in the book is for a broker or adviser to select funds that have outperformed in the past with the suggestion that they will outperform in the future. Read what experts sa...
by Taylor Larimore
Sun Sep 14, 2014 10:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help compare Vanguard Three Fund vs Edward Jones Am. Fund
Replies: 25
Views: 2072

Jack Bogle on "Advisers"

Bogleheads: It is instructive to read what Mr. Bogle wrote about advisers in Common Sense on Mutual Funds. This is a portion: Consider Carefully the Added Costs of Advice: Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do n...
by Taylor Larimore
Sun Sep 14, 2014 5:33 pm
 
Forum: Investing - Theory, News & General
Topic: How much value can an advisor add for the average investor?
Replies: 71
Views: 4542

Balanced funds and tax-inefficiency

gasman:

Welcome to the Bogleheads forum!

You have received helpful advice. However, you need to know that balanced funds (containing stocks and taxable bonds) are seldom recommended for taxable accounts because of their tax-inefficiency.

Best wishes.
Taylor
by Taylor Larimore
Sun Sep 14, 2014 9:08 am
 
Forum: Investing - Help with Personal Investments
Topic: New to investing - Timing Questions
Replies: 8
Views: 750

Gems from "The Bogleheads' Guide to Investing"

Subwaysandwich: Welcome to the Bogleheads Forum! Few schools teach personaI finance. What we learn about investing is mostly from self-serving Wall Street and the media. In my opinion, every investor should read a good investment book before investing. Last month we published the updated second edit...
by Taylor Larimore
Sun Sep 14, 2014 8:44 am
 
Forum: Investing - Help with Personal Investments
Topic: Investing $100
Replies: 15
Views: 1798

Nedsaid's sound advice.

Nedsaid:

Thank you for your excellent post, above.

Best wishes.
Taylor
by Taylor Larimore
Sat Sep 13, 2014 7:11 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 11881

Dangerous practices

Better late than never to know that rebalancing is a way dangerous practice. Austintatious: You prove that the media is dangerous. This is what Vanguard research concluded: Portfolio rebalancing is extremely important because it helps investors to maintain their target asset allocation. By periodic...
by Taylor Larimore
Fri Sep 12, 2014 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 182
Views: 11881

"A fool's errand"

I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum. Thanks teacher5: I once thought it would be easy for me to pick winning stocks, but sad experience h...
by Taylor Larimore
Fri Sep 12, 2014 5:50 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Stocks
Replies: 30
Views: 2056

"5 Simple Steps to the Perfect Portfolio"

Bogleheads: This link is to a similar article by Walter Updegrave posted here earlier. Nevertheless, good advice needs repeating (like the quote below): Truth is, you can get pretty much all the domestic and foreign diversification you need with just three index funds: a total U.S. stock market fund...
by Taylor Larimore
Fri Sep 12, 2014 11:53 am
 
Forum: Investing - Theory, News & General
Topic: "5 Simple Steps to the Perfect Portfolio"
Replies: 2
Views: 848

Simplify to two Target Funds.

Retired58: Welcome to the Bogleheads Forum! You do, indeed, need to simplify the hodge-podge of funds in your portfolio for the benefit of you, your spouse, your caretakers and your heirs. To fortify your resolve, listen to these experts: Simplicity I'll suggest a single, low-cost, Target Retirement...
by Taylor Larimore
Thu Sep 11, 2014 11:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need help simplifying retirement investments
Replies: 8
Views: 701

Re: 100% Small and Value Tilting

What 20 year period did SV underperform? Not saying it hasn't happened, just curious. It is not a "20 year period," but shown below are the 15-year returns of nine (Morningstar) stock asset classes for the period ending 6-30-00: Style.......1 Yr.....3 Yr.....5 Yr....10 Yr....15 Yrs. LCG.....
by Taylor Larimore
Thu Sep 11, 2014 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: 100% Small and Value Tilting
Replies: 70
Views: 4031

NO ONE can predict stock market returns.

What would be wrong with an investor with a 40+ year horizon, investing in a portfolio comprised exclusively of small and value tilts. Something like 1/3 SCV 1/3 MCV 1/3 FTSE Ex US Small Cap I'm fully aware of the risks involved but have never seen such a thing advocated on here for long investment...
by Taylor Larimore
Thu Sep 11, 2014 10:18 pm
 
Forum: Investing - Theory, News & General
Topic: 100% Small and Value Tilting
Replies: 70
Views: 4031

"The Bogleheads' Guide to Retirement Planning."

I wonder how many people here understand retirement finance in so far as it applies to the majority of the American public. Of course there are special situations that apply to a fair number of people but I'm looking for the "low hanging fruit", so to speak. technovelist: I agree with Hou...
by Taylor Larimore
Thu Sep 11, 2014 2:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: How well do you understand SS and tax-deferral issues?
Replies: 16
Views: 853

"The Loser's Game"

The Inner Game of Tennis and Investing

Swaption:

We must be careful not to invest in THE LOSER'S GAME

Best wishes.
Taylor
by Taylor Larimore
Wed Sep 10, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: The Inner Game of Tennis and Investing
Replies: 7
Views: 645

Re: Simplicity vs. Complexity

I agree with Mr. Larimore that investing in a few low-cost, broad-based funds gets you 90% of the way to your destination. The problem is deciding what that last 10% should be? It is almost as easy to be wrong as to be right. There seems to be some perverse human characteristic that likes to make e...
by Taylor Larimore
Wed Sep 10, 2014 3:24 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3312

Re: Best article on Vanguard's philosophy and history?

I would like to have something readily available to share with friends and business associates. They have heard me rave about Vanguard and Mr Boglefor years, and I would like to be able to attach or link to an article that dives into the subject matter more deeply. Most would be unwilling to read a...
by Taylor Larimore
Wed Sep 10, 2014 11:13 am
 
Forum: Investing - Theory, News & General
Topic: Best article on Vanguard's philosophy and history?
Replies: 10
Views: 722

Re: What's the riskiest Bogleheadish asset?

What the single riskiest asset that Bogleheads advocate? Is it SV mutual funds? Tadamsmar: For the 10 years ending December 2013, Vanguard's CA Tax-Exempt Money Market Fund had the worst return of any Vanguard Fund with a cumulative return of 13.4% .* Vanguard's Energy Fund had the best cumulative ...
by Taylor Larimore
Wed Sep 10, 2014 10:15 am
 
Forum: Investing - Theory, News & General
Topic: What's the riskiest Bogleheadish asset?
Replies: 81
Views: 6876

Re: Cruise Around the World

minhnusa:

My wife retired in 1996 and shortly thereafter we embarked on a world cruise on the SS Rotterdam. . We liked it so much we did another world cruise a few years later on the new MS Rotterdam.

Thank you, Mr. Bogle.

Best wishes.
Taylor
by Taylor Larimore
Tue Sep 09, 2014 11:38 pm
 
Forum: Personal Consumer Issues
Topic: Cruise Around the World
Replies: 14
Views: 1397

Thank you, Jack.

I am looking for suggestions for the best article created by a third party media outlet (ideally one of the big ones - NY Times, WSJ, Washington Post, etc.) that profiles Vanguard's investment philosophy and history in a way that would make Bogleheads proud. Len: I saved this old article from Fortu...
by Taylor Larimore
Tue Sep 09, 2014 11:12 pm
 
Forum: Investing - Theory, News & General
Topic: Best article on Vanguard's philosophy and history?
Replies: 10
Views: 722

"Why 97% of People Don't Use 529 College Savings Plans."

Bogleheads: Bloomberg is featuring an article about College Savings Plans . Two important quotes from the article are these: "Focusing on fees is crucial." "Vanguard Group, the lowest-cost of the major 529 providers, just dropped the total expenses on its age-based funds to 0.19 perce...
by Taylor Larimore
Tue Sep 09, 2014 4:19 pm
 
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 110
Views: 10387

Total Stock Market is largest stock fund (with good reason).

Chaz: Thank you for the link. Speaking of "#1," the October edition of Kiplinger's magazine lists the 20 largest stock mutual funds. Vanguard's Total Stock Market Index Fund is #1 and has the second highest five year annualized return (17.0%) of all 20 funds. Past performance does not fore...
by Taylor Larimore
Mon Sep 08, 2014 6:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard is #1
Replies: 3
Views: 681

A good laugh.

Jackie:

Thank you for a good laugh!

Best wishes.
Taylor
by Taylor Larimore
Mon Sep 08, 2014 5:47 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3312

Annual Return vs. Standard Deviation

Understood, but I'd sacrifice a little annual return for a significantly lower STDEV. ctreada: A good solution is to simply lower your stock allocation and increase your bond allocation. "One point of excess return is priceless. One point of additional standard deviation is meaningless." ...
by Taylor Larimore
Mon Sep 08, 2014 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3312

Re: Simplicity vs. Complexity

ctreada wrote:what was the stdev?

that's the real argument for diversifying more -- reduce stdev at a similar-ish return

ctreada:

According to the article, during the 2008 meltdown the two fund portfolio "held up nicely." "Only one other portfolio fared as well."

Best wishes.
Taylor
by Taylor Larimore
Mon Sep 08, 2014 5:12 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3312

Simplicity vs. Complexity

Bogleheads: We must avoid making the mistake of adding more funds simply because Wall Street's marketing machine keeps churning out ever more options. A recent (08/16/2014) Wall Street Journal article published the 20-year results of two portfolios: The Simple Portfolio (Annualized return 9.1%) 70% ...
by Taylor Larimore
Mon Sep 08, 2014 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Simplicity vs. Complexity
Replies: 50
Views: 3312

"Character Counts"

Selftalk wrote: John Bogle said that he knows NO ONE that can time the market consistently. That should tell you something. Beliavsky wrote: This quote of Bogle is used a lot, but that does not make it true. Beliavsky: Mr. Bogle can make a mistake, but he would NEVER lie. I suggest you read his book...
by Taylor Larimore
Mon Sep 08, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: So, when does a market timer get back in?
Replies: 54
Views: 5516

"How to manage a windfall successfully"

So my question is. Say one of us wins a very large jackpot (think at least 50mil +). Then does boglehead philosophy still apply? Or is it "better" to go into professional wealth management/private equity? ginmqi: Our Bogleheads' Guide to Investing has an entire chapter titled "How to...
by Taylor Larimore
Sun Sep 07, 2014 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: If you won the lottery, does boglehead thinking still work?
Replies: 39
Views: 2929

Jonathan Clements's article on rebalancing

arcticpineapplecorp:

Thank you for the link to Mr. Clements Wall Street Journal article.

I'll not repeat replies to your question, but I found it to be a very well-written and helpful article.

Best wishes.
Taylor
by Taylor Larimore
Sun Sep 07, 2014 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Question about Jonathan Clements's article on rebalancing
Replies: 8
Views: 967

"The Dangers of Using Past Performance"

Looking at the performance since inception, xynder: It is probably a good idea to never look at past performance . However, if you do, never use inception dates of two funds unless the inception dates are the same. Period returns are determined only by the start and ending dates. If a start date is...
by Taylor Larimore
Sat Sep 06, 2014 6:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Considering divesting international position...
Replies: 12
Views: 589

"Dollar Cost Averaging versus Lump Sum"

sbf: Welcome to the Bogleheads Forum! But what about someone with no or minimal exposure to the market at present, and everything in cash/bonds. Eg. sold house, inheritance. S&P at record highs, jobs figures less than expected..... Should they plow into an index S&P fund even in the current ...
by Taylor Larimore
Sat Sep 06, 2014 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: So, when does a market timer get back in?
Replies: 54
Views: 5516

Market Timing -- What experts say.

Bogleheads: I spent many years attempting to beat the market using various market timing schemes. It doesn't work as these experienced authorities attest: "The stock market will fluctuate, but you can't pinpoint when it will tumble or shoot up. If you have allocated your assets properly and hav...
by Taylor Larimore
Fri Sep 05, 2014 10:40 pm
 
Forum: Investing - Theory, News & General
Topic: How exactly would you define market timing?
Replies: 67
Views: 2006

Jack Bogle's most important wisdom: "Stay the course"

Bogleheads: Jack Bogle, our mentor, wrote this in Common Sense on Mutual Funds : Stay the Course. No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to...
by Taylor Larimore
Fri Sep 05, 2014 4:54 pm
 
Forum: Investing - Theory, News & General
Topic: So, when does a market timer get back in?
Replies: 54
Views: 5516
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