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Re: Style Box breakdown of U.S. companies

Um, why? The data are for an adult education class I teach on investing (from a Bogleheads perspective, naturally). I like class participants to clearly understand just how few U.S. companies make up the "large cap" universe while how many companies make up the "smaller cap" uni...
by ThePrune
Sat Aug 30, 2014 1:51 pm
 
Forum: Investing - Theory, News & General
Topic: Style Box breakdown of U.S. companies
Replies: 5
Views: 368

Style Box breakdown of U.S. companies

Several years ago I had found a breakdown of the number of U.S. companies that were located in each of the Morningstar equity style box cells for the total U.S. equity market. I'm interested a similar breakdown as of this year, 2014. In other words, how many: Large+Mega cap Value companies, Large+Me...
by ThePrune
Thu Aug 28, 2014 6:28 pm
 
Forum: Investing - Theory, News & General
Topic: Style Box breakdown of U.S. companies
Replies: 5
Views: 368

Re: Life insurance with Long term care rider

technovelist wrote:And I probably wouldn't have bought the policy just for the "LTCI" benefit. But given that:
1. I really HATE the official LTCI contracts and wouldn't buy one for that reason, and
2. I needed new life insurance anyway,

this seemed like a nice "freebie".

I like your reasoning!
by ThePrune
Thu Aug 28, 2014 5:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Life insurance with Long term care rider

However, for my plan to fail, I have to live past 85 outside a nursing home, then have to go into a nursing home after that age. I think the probability of that is fairly low. Since you have actuarial background, I refer you to the Society of Actuaries 1987 - 2007 Long Term Care and Intercompany Re...
by ThePrune
Wed Aug 27, 2014 1:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Any good studies on active vs. passive BEFORE fees?

After various fees are involved, the superiority of passive investing seems fairly obvious. But to satisfy my curiosity, how do active funds fare before these fees are deducted? Two academic research papers published in the Journal of Finance in 2010 performed this exact analysis for U.S. equity mu...
by ThePrune
Tue Aug 26, 2014 5:16 pm
 
Forum: Investing - Theory, News & General
Topic: Any good studies on active vs. passive BEFORE fees?
Replies: 10
Views: 1017

Re: How would one analyze the claim "American Funds Outperfo

Now: how would one analyze that claim? Not critique the sloppy methods of the paper, but rather analyze the assertion from the ground up? If you are really interested in this topic, why not take a look at Bernd Fisher and Russ Wermer's book Performance Evaluation and Attribution of Security Portfol...
by ThePrune
Tue Aug 26, 2014 5:08 pm
 
Forum: Investing - Theory, News & General
Topic: How would one analyze the claim "American Funds Outperform"
Replies: 4
Views: 742

Re: Life insurance with Long term care rider

I have a TERM, not UL, policy with Prudential that has this rider; the UL policies also have it. My understanding (and I have read the policy) is as follows: 1. There is NO additional premium for the rider. That is possible because the rider provides for early payment of the death benefit (after ac...
by ThePrune
Tue Aug 26, 2014 4:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Life insurance with Long term care rider

So I'm trying to make a decision about Long term care insurance. I've read all the horror stories of not having it and the statistical information of why I will definitely need it down the road. I totally admit that I've been hesitate, the price is crazy expensive and I hate the "use it or los...
by ThePrune
Sat Aug 23, 2014 8:33 am
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Life insurance with Long term care rider

I am not selling these policies yet, but the more I review I sorta like them. However, to make them harder to understand they tie crediting rates to index returns, similar to Equity Index Annuities. These policies have the ability to use better performing illustrations than a typical Universal Life...
by ThePrune
Sat Aug 23, 2014 8:22 am
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Life insurance with Long term care rider

The Policy is called a Prulife universal protector. Type A (fixed) death Benefit with a Benefit Access rider. quote from the summary report "The benefitaccess Rider advances up to 100% of the policy's death benefit in the event that the insured becomes chronically ill as certified by a license...
by ThePrune
Fri Aug 22, 2014 5:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Life insurance with Long term care rider

camptalcott , we'll be able to give more knowledgeable advice after you tell us the specific name of the Prudential life insurance policy and the name of the long term care rider. I could spout off some generalities right now without this information, but frankly it would likely be a waste of time ...
by ThePrune
Fri Aug 22, 2014 12:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 2231

Re: Vanguard Index vs American Funds?

tibbitts wrote: But don't you need $1MM in each fund to waive sales charges, not just $1MM total?

No, American Funds calculates breakpoints for front-load sales charge reductions based on total investments across all mutual funds within the American Funds family.
by ThePrune
Mon Aug 18, 2014 7:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Index vs American Funds?
Replies: 33
Views: 3452

Re: Vanguard Index vs American Funds?

American Funds has 7 funds that invest only in US Large Cap stocks. I did some research on the 30-year, 20-year, and 10-year real returns (after fees subtracted) of these funds vs. the Vanguard 500 Index Admiral (VFIAX). Strictly speaking it isn't correct to compare most American Funds large cap mu...
by ThePrune
Sun Aug 17, 2014 8:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Index vs American Funds?
Replies: 33
Views: 3452

Re: Vanguard Index vs American Funds?

I am planning on investing a lump sum on money in US Large Cap stocks and holding on to these investments for the next 20-30 years. After reading various books on investing, it seemed to me that low-cost index funds are the way to go. However, my investment adviser recommended the actively managed ...
by ThePrune
Sun Aug 17, 2014 8:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Index vs American Funds?
Replies: 33
Views: 3452

Re: Deferred Income Annuity

Strictly speaking its hard to give you the optimal advice without knowing more about your total situation. But if your goal is to arrange for a portion of your fixed income allocation to receive a guaranteed and competitive annual interest, then you've got options beyond just Deferred Income Annuiti...
by ThePrune
Thu Aug 14, 2014 5:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Deferred Income Annuity
Replies: 9
Views: 893

Re: Mutual-fund-only accounts more secure, in one way?

It is not necessary to have a brokerage account in order to own mutual funds . As far as I know, every mutual fund company lets you open an account directly with the fund company. Typically such an accounts have no transaction fees, but of course only allow purchases and exchanges within a single f...
by ThePrune
Wed Aug 13, 2014 3:38 pm
 
Forum: Investing - Theory, News & General
Topic: Mutual-fund-only accounts more secure, in one way?
Replies: 17
Views: 1584

Re: Too Good to be True? Universal Life

Are you allowed to "deposit" $100K into it without turning it into a MEC? Since it's a Universal Life policy, the issuer could potentially take the simple step of increasing the policy face value until the cash value fits within the legally allowed "cash value corridor". (I know...
by ThePrune
Tue Aug 12, 2014 9:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Too Good to be True? Universal Life
Replies: 11
Views: 1155

Re: Too Good to be True? Universal Life

I agree that the very first action you should take is to request an illustration for the addition of the $100,000. Pay careful attention to whether this group plan imposes a "front-end expense load" on the $100,000 and how large the loading is. Being a group plan, the loading might be &quo...
by ThePrune
Tue Aug 12, 2014 9:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Too Good to be True? Universal Life
Replies: 11
Views: 1155

Re: Help me figure out how to sell investment advice legally

Once you have clients in enough states (I think 20) then you can register with the SEC and you won't have to register in every state. Recent rules changes (in 2010 I think) have changed the dividing point for Investment Advisory supervision between states and the SEC to $100 Million of assets under...
by ThePrune
Sun Aug 10, 2014 1:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help me figure out how to sell investment advice legally
Replies: 12
Views: 1980

Re: Spreadsheet calculating returns of IUL / 7702 Pension Pl

There's one reason an insurance plan might actually help some people: participation rates. http://s.wsj.net/public/resources/MWimages/MW-BF011_401k_r_MD_20130703105500.jpg The insurance is a type of forced savings: you've got to keep up with the premiums . I have trouble roundly critiquing 7702/IUL...
by ThePrune
Sun Aug 10, 2014 8:01 am
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet calculating returns of IUL / 7702 Pension Plan
Replies: 19
Views: 1410

Re: Spreadsheet calculating returns of IUL / 7702 Pension Pl

It's been a month since I wrote to Professor Jon Abraham, and still no response of any type. So probably nothing will be forthcoming. I've been doing some more reading of my own on the topic of IUL policies and rules-of-thumb for estimating their ACTUAL long-term prospective returns. I highly recomm...
by ThePrune
Sat Aug 09, 2014 10:27 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet calculating returns of IUL / 7702 Pension Plan
Replies: 19
Views: 1410

Re: Taxed on a [Whole-Life Insurance] Benefit??

Details of the policy: Excel 100 Standard Tax-Qualified Life (fixed premium universal whole life) Since this life insurance policy was contained within a Qualified Plan (for example a Profit Sharing or 401k retirement plan), the death benefits are no longer tax exempt. If you want to learn more, re...
by ThePrune
Sat Aug 09, 2014 10:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxed on a [Whole-Life Insurance] Benefit??
Replies: 2
Views: 522

Re: Help me figure out how to sell investment advice legally

I'm not surprised that folks have been hesitant to offer advice, since your question is fundamentally a legal one. Nevertheless I'll give you some guidelines on how to get at a valid answer to your questions. First (and most importantly), you must take the time to learn about the securities and inve...
by ThePrune
Sat Aug 09, 2014 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help me figure out how to sell investment advice legally
Replies: 12
Views: 1980

Re: American Funds' Active Investing Whitepaper

. The earlier linked American Funds paper asks the question “Has American Funds added Value?” IMO a more ‘accurate’ test than the paper presents is to look at the ‘alphas’ from a Fama-French three factor analysis of the funds. A positive alpha indicates ‘value added’ beyond factor exposure, while a...
by ThePrune
Sat Aug 09, 2014 10:06 am
 
Forum: Investing - Theory, News & General
Topic: American Funds' Active Investing Whitepaper
Replies: 22
Views: 2411

Re: American Funds' Active Investing Whitepaper

In additional news, Capital Group, the manager of American Funds, has recently filed a petition with the SEC for issuing ETFs. See this article ---> American Funds ETF Filing A Very Big Deal | ETF.com for further details. Thanks for the article link. I was unaware of how SEC petitioners were propos...
by ThePrune
Sat Aug 09, 2014 10:01 am
 
Forum: Investing - Theory, News & General
Topic: American Funds' Active Investing Whitepaper
Replies: 22
Views: 2411

Re: HDHP vs PPO (least bad choice)

What are the out of pocket maximums? Are we assuming your health expenses at this time are minimal? +1 Insurance should be viewed first and foremost as protection against unlikely but devastating economic events. So if there is a significant difference in out-of-pocket maximums for these two plans,...
by ThePrune
Wed Aug 06, 2014 6:40 am
 
Forum: Personal Finance (Not Investing)
Topic: HDHP vs PPO (least bad choice)
Replies: 13
Views: 856

Re: Using equal mortality time intervals for planning

Based on some of the comments in this posting thread it appears to me that there is confusion about the nature of a mortality table. Mortality Tables are NOT the same as tables of life expectancy. Rather, for a person at their ( N )th birthday, a mortality table gives the probability that they will ...
by ThePrune
Fri Aug 01, 2014 6:16 pm
 
Forum: Investing - Theory, News & General
Topic: Using equal mortality time intervals for planning
Replies: 17
Views: 1314

Re: Using equal mortality time intervals for planning

One thing that I like about the CDC period life tables is that they have different tables by race and gender. If I really wanted to bet on increased longevity I could use the tables for Hispanics, who have the longest life expectancy of the racial groups that are reported. If you want to explore ho...
by ThePrune
Thu Jul 31, 2014 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: Using equal mortality time intervals for planning
Replies: 17
Views: 1314

Re: PE10

PE10 is interesting and may have some application, but it's not an answer to forecasting/timing the market. +1 If you haven't read it, take a look at the Vanguard research report Forecasting Stock Returns: What Signals matter, and What do They Say Now (2012) . We confirm that valuation metrics such...
by ThePrune
Wed Jul 30, 2014 4:30 pm
 
Forum: Investing - Theory, News & General
Topic: PE10
Replies: 13
Views: 1392

Re: Using equal mortality time intervals for planning

I have been looking at the CDC's United States Life Tables 2009 (published Janurary 2014) http://www.cdc.gov/nchs/data/nvsr/nvsr62/nvsr62_07.pdf to estimate equal mortality time intervals for white males (Table 5) and females (Table 6). I find this very useful for adding some discipline to my own t...
by ThePrune
Wed Jul 30, 2014 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: Using equal mortality time intervals for planning
Replies: 17
Views: 1314

Re: How to cash in Savings bonds (from 80s)

My wife found a savings bond from 1956 (!) and cashed it at a local bank. The bank gave her the exact amount that TreasuryDirect indicated.
by ThePrune
Wed Jul 23, 2014 7:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to cash in Savings bonds (from 80s)
Replies: 14
Views: 1691

Re: Imputed income (rent) Owner occupied houses.

Thanks for getting this thread started. Doing some reading about imputed rent has been on my "To Do" list for quite a while, and this gave me an opportunity to get started. I'll share just a few of my initial thoughts. First, housing purchase prices in my area of Michigan are quite low com...
by ThePrune
Sat Jul 12, 2014 8:53 pm
 
Forum: Investing - Theory, News & General
Topic: Imputed income (rent) Owner occupied houses.
Replies: 21
Views: 2445

Re: Help holding persoanl finance workshops

I've been leading retirement planning classes in local churches for 6 years. I find the key to getting permission to present in church settings is working through a network of personal friends and "key individuals" in various churches. Without having someone personally vouch for me and the...
by ThePrune
Tue Jul 08, 2014 9:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help holding persoanl finance workshops
Replies: 18
Views: 1436

Re: Spreadsheet calculating returns of IUL / 7702 Pension Pl

bnes , wait a little while before spending more time on your IUL spreadsheet. The Actuarial Mathematics program at Worcester Polytechnic Institute has had several B.S. projects submitted recently that consisted of spreadsheets for quantitatively evaluating various types of Universal Life policies. ...
by ThePrune
Wed Jul 02, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet calculating returns of IUL / 7702 Pension Plan
Replies: 19
Views: 1410

Re: Variable Index Annuity

I guess that I'm the "resident expert" on index annuities here at the Forum. (Refer to my posting thread Investor Analysis of Index Annuities for further information.) I keep pretty current on various index annuity products and their statistical return probability distributions. Because of...
by ThePrune
Mon Jun 30, 2014 10:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Variable Index Annuity
Replies: 6
Views: 652

Re: File and suspend

Are there income limits on who can get spousal benefits ? Income Limits? I could simply answer your question, NO , but its also useful to cite material from the Social Security Administration to back up my answer. 320.1 What is your spouse's insurance benefit amount? As a spouse, your insurance ben...
by ThePrune
Sun Jun 29, 2014 8:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: File and suspend
Replies: 9
Views: 1249

Re: Spreadsheet calculating returns of IUL / 7702 Pension Pl

I'd like to model both the container (the "7702 plan") and the investment (which might be darn close to a FIA). There is no "7702 container" . This is a marketing ploy on the part of some insurance agents to confuse prospects into thinking that the universal life policy being of...
by ThePrune
Sat Jun 28, 2014 4:35 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet calculating returns of IUL / 7702 Pension Plan
Replies: 19
Views: 1410

Re: Spreadsheet calculating returns of IUL / 7702 Pension Pl

A friend is pushing this sort of policy: I'm trying to provide a more correct illustration than his company's illustrations provide. He's convinced these things are the best investment for moderate and low income people. Anytime you see life insurance policies being pushed as "retirement incom...
by ThePrune
Fri Jun 27, 2014 9:49 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet calculating returns of IUL / 7702 Pension Plan
Replies: 19
Views: 1410

Re: Spreadsheet calculating returns of IUL / 7702 Pension Pl

For your comment: I've created a first pass at a spreadsheet to shine light on "Indexed Universal Life", which is often illustrated with carefully selected periods. I took a look at your Google.Docs spreadsheet. IUL (sometimes called EIUL) policies are clearly more complicated than your s...
by ThePrune
Fri Jun 27, 2014 9:28 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet calculating returns of IUL / 7702 Pension Plan
Replies: 19
Views: 1410

Re: Location does matter when measuring asset allocation

I track my asset allocations on both a before- and an after-tax basis. But my IPS allocation targets (and their rebalance bands) are after-tax. For a long time I was "sitting on the fence" with respect to this discussion. Then I started building a ladder of TIPS bonds as a form of insuranc...
by ThePrune
Fri Jun 20, 2014 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: Location does matter when measuring asset allocation
Replies: 45
Views: 3109

Re: Early retirement gotchas

Divorce when you have to face your spouse 24 hours a day. This is a very real concern. Sociological research has revealed that married couples find the first two years of retirement to be MORE stressful than the birth of their first child! Here is the big "Gotcha" - failing to appreciate ...
by ThePrune
Thu Jun 19, 2014 4:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early retirement gotchas
Replies: 28
Views: 5561

Re: Should risk be stated in dollars terms instead of AA %?

For the adult Investing classes I teach, I have the participants do an "Asset Allocation" exercise. The goal is to help them individualize the PERCENTAGES for their allocation. But I always have them estimate a target stock allocation percentage based on maximum number of absolute DOLLARS ...
by ThePrune
Fri Jun 13, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1430

Re: "Never take an investment risk that doesn't pay a premiu

Actually, I just checked Merriman's figures using Simba and get somewhat different asset returns from 1984-2013: Gold: Compound annual return = 3.45%, SD = 15.6% (Merriman's figures were < 5% return with 20.1% SD) I decided to check these numbers against my own database, which uses the London Bulli...
by ThePrune
Wed Jun 11, 2014 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: "Never take an investment risk that doesn't pay a premium"
Replies: 14
Views: 1052

Re: Young boglehead: Materials science, chemE, or mechE for

As someone who made a dramatic shift mid-career (geology to ceramic engineering), I'd advise moving into a new discipline that takes advantage of what you've already learned. Shifting into engineering is a lot of work, so don't make it needlessly difficult by throwing away your chemistry and medical...
by ThePrune
Fri Jun 06, 2014 9:06 am
 
Forum: Personal Finance (Not Investing)
Topic: Young boglehead: Materials science, chemE, or mechE for grad
Replies: 28
Views: 1965

Re: [Back testing programs]

pvguy , a very nice website and suite of tools. Please consider the following comment purely as constructive criticism. A basic "reality check" for any Monte Carlo model that uses a Normal Distribution is to compare projected mean and median values against the values calculated using the ...
by ThePrune
Mon Jun 02, 2014 10:09 pm
 
Forum: Investing - Theory, News & General
Topic: [Back testing programs]
Replies: 17
Views: 1567

Re: Retirement Calculator ?

Still, it's hard to believe that the monte carlo simulation would be worth a damn unless they could somehow reproduce the correlation between stocks/bonds/inflation as we've seen it in history. No problem for Monte Carlo! Run enough billions of simulations and one of them will match the historical ...
by ThePrune
Mon Jun 02, 2014 4:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retirement Calculator ?
Replies: 14
Views: 1946

Re: All in one retirement simulator

For those of you who suggested incorporating non-normal (non-lognornmal) distributions, I'll add a few comments. I've done this little exercise, but instead of using the Cauchy distribution (symmetrical about the median, mean and variance undefined), I decided to use the Normal Inverse Gaussian (NIG...
by ThePrune
Fri May 30, 2014 6:30 pm
 
Forum: Investing - Theory, News & General
Topic: All in one retirement simulator
Replies: 11
Views: 1771

Re: All in one retirement simulator

As the main author of the Bogleheads Wiki Retirement calculators and spending article I've had the opportunity to review a lot of calculators. In addition, I've developed my own rather-detailed spreadsheet retirement calculator over the years to illustrate the concepts I present in a retirement plan...
by ThePrune
Fri May 30, 2014 5:53 pm
 
Forum: Investing - Theory, News & General
Topic: All in one retirement simulator
Replies: 11
Views: 1771

Re: Retirement Planning Calculator from Vanguard

The Vanguard Retirement Income calculator is included within the Retirement calculators and spending Wiki. Some if its characteristics relative to modeling spending in retirement are also shown.

Art
by ThePrune
Tue May 20, 2014 5:15 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement Planning Calculator from Vanguard
Replies: 11
Views: 1837

Re: Spreadsheet for backtesting (includes TrevH's data)

I would like do download the return Data form the Emering Markets Index of this Homepage: http://www.ifa.com/disclosures/index-data/#EM But i can't find there a link where i can download the Monthly returns :?: Anybody know wehere i can download the Data from the Hompepage? This is the Dimensional ...
by ThePrune
Sat May 10, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: Spreadsheet for backtesting (includes TrevH's data)
Replies: 610
Views: 380260
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