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Re: Question on investing/ personal finance newsletters....

Anybody who knows the secret to fabulous investing results will borrow all they can, invest using the secret, and become a billionaire. Anybody who doesn't but is a great salesperson will consider whether selling newsletters is the best means to become a billionaire without the secret, but usually ...
by Wagnerjb
Tue Jan 27, 2015 8:54 am
 
Forum: Investing - Theory, News & General
Topic: Question on investing/ personal finance newsletters....
Replies: 4
Views: 234

Re: Efficient markets: luck v. skill

My mistake. When the consequence of the hypothesis true implies one cannot beat the average over time, then it is found individuals can (regardless of implication to the average investor)... shouldn't we come up with a new description that fits reality, rather than trying to sculpt reality in a way...
by Wagnerjb
Mon Jan 26, 2015 10:57 pm
 
Forum: Investing - Theory, News & General
Topic: Efficient markets: luck v. skill
Replies: 34
Views: 2096

Re: 40 years of IRA and 401k Contributions

We started in earnest in 1987. The OP's numbers make sense. I wish we had gotten 10% return, but we didn't. Also some years, one of us could not contribute the maximum due to HCE issues. And of course there were many years of high-fee plans with some front-end loads for one of us. I started trackin...
by Wagnerjb
Mon Jan 26, 2015 9:04 pm
 
Forum: Investing - Theory, News & General
Topic: 40 years of IRA and 401k Contributions
Replies: 16
Views: 1611

Re: 40 years of IRA and 401k Contributions

If one started investing when the first IRA started up to the the maximum then filled up a 401k when that started in 1987 you may have done ok. I ran the numbers without catch-up contributions and took a wild guess at a rate. You could be just north of a million. If you started in the early 1980's ...
by Wagnerjb
Mon Jan 26, 2015 7:21 pm
 
Forum: Investing - Theory, News & General
Topic: 40 years of IRA and 401k Contributions
Replies: 16
Views: 1611

Re: $1 and $2 foreign tax paid - file? refundable credit?

They can carry their unused foreign tax credits back one year and forward 10 years under Internal Revenue Code Section 904(c). So if they can't use the credit for the current year or the previous year, they may be able to use the credit at some point during the next 10 years. Whether it's worth the...
by Wagnerjb
Sun Jan 25, 2015 1:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: $1 and $2 foreign tax paid - file? refundable credit?
Replies: 6
Views: 568

Re: AOTC versus 529 plan [American Opportunity Tax Credit]

Jared: thank you for the tremendous reply to my questions. I can see that you put a considerable amount of effort and research into it, and I sincerely appreciate that. Section 529 is silent regarding whether distributions must be made from a section 529 account in the same tax year as QHEEs were pa...
by Wagnerjb
Sun Jan 25, 2015 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: AOTC versus 529 plan [American Opportunity Tax Credit]
Replies: 40
Views: 2571

Re: Efficient markets: luck v. skill

Your last paragraph again doesn't mean much to the fundamental question of can it be done . "Can it be done" and "can I pay someone to do it for me and still come out ahead" are different questions. I agree. But the two answers have very different implications. If we determine t...
by Wagnerjb
Fri Jan 23, 2015 3:53 pm
 
Forum: Investing - Theory, News & General
Topic: Efficient markets: luck v. skill
Replies: 34
Views: 2096

Re: AOTC versus 529 plan [American Opportunity Tax Credit]

Actually, another way to think of a taxable account for educational expenses is that it has 2 income components: (1) Annual dividends that parents can use now to pay for things for the kids such at music lessons, laptops, sports activities, and (2) tax-deferred unrealized capital gains. The capital...
by Wagnerjb
Fri Jan 23, 2015 11:04 am
 
Forum: Personal Finance (Not Investing)
Topic: AOTC versus 529 plan [American Opportunity Tax Credit]
Replies: 40
Views: 2571

Re: AOTC versus 529 plan [American Opportunity Tax Credit]

Great question Andy. Unfortunately, I don't have a definitive answer. Section 529 is silent regarding the timing of distributions. I doubt the intent was to allow the reimbursement of prior year expenses. The IRS is certainly aware of the potential for abuse and made it clear in Notice 2008-17. See...
by Wagnerjb
Fri Jan 23, 2015 10:57 am
 
Forum: Personal Finance (Not Investing)
Topic: AOTC versus 529 plan [American Opportunity Tax Credit]
Replies: 40
Views: 2571

Re: Efficient markets: luck v. skill

In games of true luck (gambling) where we are confident that the outcomes are random, we still find a few big winners over time. We also find a few big winners in active trading of the stock market. Are the results of active investing just luck? Before you start, do you know which gambler will be t...
by Wagnerjb
Fri Jan 23, 2015 10:25 am
 
Forum: Investing - Theory, News & General
Topic: Efficient markets: luck v. skill
Replies: 34
Views: 2096

Re: Efficient markets: luck v. skill

Nor have we found a manager that can consistently and predictably beat the market. Best wishes. Sure, we have. Jim Simons, for sure, Edward Thorpe, and probably Buffet as well. We are trying to distinguish luck from skill. In games of true luck (gambling) where we are confident that the outcomes ar...
by Wagnerjb
Fri Jan 23, 2015 10:00 am
 
Forum: Investing - Theory, News & General
Topic: Efficient markets: luck v. skill
Replies: 34
Views: 2096

Re: Efficient markets: luck v. skill

I liken the argument of considering the EMH as true until proven wrong, along the same line of considering unicorns exist until proven they don't. I liken considering EMH as true along the same lines as considering that UFOs don't exist. Logic says that EMH is true and it also says that UFOs don't ...
by Wagnerjb
Thu Jan 22, 2015 10:44 pm
 
Forum: Investing - Theory, News & General
Topic: Efficient markets: luck v. skill
Replies: 34
Views: 2096

Re: AOTC versus 529 plan [American Opportunity Tax Credit]

Although not authoritative, see page 59 of the 2013 IRS Publication 970 for the easy to read version: Exceptions. The 10% additional tax does not apply to distributions: ... 5. Included in income only because the qualified education expenses were taken into account in determining the American oppor...
by Wagnerjb
Thu Jan 22, 2015 3:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: AOTC versus 529 plan [American Opportunity Tax Credit]
Replies: 40
Views: 2571

Re: AOTC versus 529 plan [American Opportunity Tax Credit]

I am disagreeing with livesoft's original statement that 529 plan withdrawals are not eligible for AOTC treatment. They are eligible for AOC treatment, but the amount used to compute the AOC will reduce the QHEE to offset the 529 distributions. I agree that you may want to withdraw less than 100% o...
by Wagnerjb
Thu Jan 22, 2015 11:40 am
 
Forum: Personal Finance (Not Investing)
Topic: AOTC versus 529 plan [American Opportunity Tax Credit]
Replies: 40
Views: 2571

Re: Does securities lending matter more than expense ratios?

Again in the direction the brokers do these trades from POV of retail investor you're only exposed to the borrowing broker if the stock rises in value relative to the collateral. What plausible scenario is there where short term US treasury securities are suddenly seriously impaired in value and st...
by Wagnerjb
Thu Jan 22, 2015 10:59 am
 
Forum: Investing - Theory, News & General
Topic: Does securities lending matter more than expense ratios?
Replies: 29
Views: 1720

Re: AOTC versus 529 plan [American Opportunity Tax Credit]

But no double-dipping so payments made with 529 plan withdrawals are not eligible for AOTC treatment. So we need to use 529 plan withdrawals for all but $2,000 a year of QHEE in order to get the first tier of the AOTC. Not necessarily. The amount of qualified higher education expenses available to ...
by Wagnerjb
Thu Jan 22, 2015 9:27 am
 
Forum: Personal Finance (Not Investing)
Topic: AOTC versus 529 plan [American Opportunity Tax Credit]
Replies: 40
Views: 2571

Re: Does securities lending matter more than expense ratios?

I'm pretty certain the collateral is something highly liquid such as a Treasury security Sure....it is viewed as "highly liquid" until one day it suddenly isn't. Like holding Swiss currency......until last week. Obviously, the risk is very small and it will take a "black swan" e...
by Wagnerjb
Wed Jan 21, 2015 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: Does securities lending matter more than expense ratios?
Replies: 29
Views: 1720

Re: Does securities lending matter more than expense ratios?

While some may consider securities lending as "harmless", I consider it as adding risk to your index fund. If I want more risk I will invest in more equities. Luckily we haven't seen major defaults in securities lending, but that doesn't mean it couldn't happen. We never thought a Money Ma...
by Wagnerjb
Tue Jan 20, 2015 8:55 pm
 
Forum: Investing - Theory, News & General
Topic: Does securities lending matter more than expense ratios?
Replies: 29
Views: 1720

Re: Been out of market for 5 years, when get back in?

With your concerns it would probably be best for you to stay out of stocks altogether, particularly if this represents your entire savings. You might consider I Bonds as a possibility. Gill I agree with Gill. If you feel strongly about investing in equities, I would suggest using a reputable adviso...
by Wagnerjb
Thu Jan 15, 2015 11:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Been out of market for 5 years, when get back in?
Replies: 25
Views: 3058

Re: Using UGMA to pay for past private school expenses

I am not the expert, but I suspect nobody will touch this (even the tax experts) because the rules aren't clear and specific in this area. I faced that issue with the UGMAs I opened for my two children. I also face a similar issue with the 529 college accounts - can you withdraw in January for last ...
by Wagnerjb
Thu Jan 15, 2015 9:28 am
 
Forum: Investing - Help with Personal Investments
Topic: Using UGMA to pay for past private school expenses
Replies: 6
Views: 529

Re: How does an Efficient Market explain Buffett?

Buffett buys companies and exerts significant influence on management. You and I cannot do this when we buy 100 shares of Coca-Cola. His skills are management and executive oversight of operations, which is very different from a passive investor like you and me. His results don't say anything about ...
by Wagnerjb
Wed Jan 14, 2015 6:58 pm
 
Forum: Investing - Theory, News & General
Topic: How does an Efficient Market explain Buffett?
Replies: 247
Views: 11712

Re: Help to Understand How to Build Post-Retirement Income

So, when we decide to stop working – what do we do? Where would we get those 4%? Do we consolidate everything in one place? Do we select each time what account to pull money from? Do we do it once a year or several times a year? Everything that I could think of seems too complicated… Could anybody ...
by Wagnerjb
Wed Jan 14, 2015 6:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help to Understand How to Build Post-Retirement Income
Replies: 11
Views: 1384

Re: Would managed funds beat index funds IF...

For this reason, we see that Vanguard's lower-cost active funds tend to perform much better than the overall active fund population...simply due to costs. Really? Which ones? Can you offer examples please. Go to Morningstar and look up several Vanguard active funds. See their ranking in the asset c...
by Wagnerjb
Wed Jan 14, 2015 6:33 pm
 
Forum: Investing - Theory, News & General
Topic: Would managed funds beat index funds IF...
Replies: 34
Views: 2398

Re: Would managed funds beat index funds IF...

I think the answer to your question is likely yes, but only for highly skilled analysts/traders. Studies have shown that active mutual funds actually do beat their benchmarks on a pre-cost basis, but once costs are taken into account the net result is underperformance. For this reason, we see that V...
by Wagnerjb
Tue Jan 13, 2015 12:51 pm
 
Forum: Investing - Theory, News & General
Topic: Would managed funds beat index funds IF...
Replies: 34
Views: 2398

Re: Two Homes in Retirement?

Brian: I am in my late-50's and will be retiring this year. We have owned a vacation condo for the past 7 years (about three hours away, near relatives and a lake). Our logic is similar to yours in that my wife and I have agreed that when the first of our two children marries, moves away and has chi...
by Wagnerjb
Tue Jan 13, 2015 9:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Two Homes in Retirement?
Replies: 38
Views: 3490

Re: Russia and energy in EM

I generally ignore the talking heads, in this case talking about Russia. I will remain well diversified globally and that will undoubtedly include some sort of market weight allocation to Russia. I don't buy one-country funds (other than the USA) and I don't believe in market timing. Sure, some fund...
by Wagnerjb
Tue Jan 13, 2015 8:51 am
 
Forum: Investing - Theory, News & General
Topic: Russia and energy in EM
Replies: 19
Views: 1650

Re: Should pension plans be relied upon for retirement?

I think it is reasonable to rely on a traditional pension plan as part of your retirement plan. As others have said, your accrued benefits cannot be eliminated, and you have a safety net in case your employer goes into bankruptcy. So....what happens if you are rocking along at age 40 and your employ...
by Wagnerjb
Mon Jan 12, 2015 8:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Should pension plans be relied upon for retirement?
Replies: 35
Views: 3098

Re: If you were going to retire at 57 what would your number

richard wrote:
TheTimeLord wrote:If you were going to retire at 57 and not take either SS or a pension until 67 what would you number be?

It really depends on spending needs and desires. Someone who wants $40,000/year is going to have a different number than someone who wants $400,000/year.


I agree.
by Wagnerjb
Sun Jan 11, 2015 11:49 am
 
Forum: Investing - Help with Personal Investments
Topic: If you were going to retire at 57 what would your number be?
Replies: 35
Views: 4005

Re: If you were me, how much would your home budget be?

Let's see what it looks like if you upscale to a $700k home. Today, you have a $350k mortgage. You put up another $200k in equity (from taxable and cash savings) and you buy a $700k home, keeping your mortgage at today's level of $350k. So, you monthly cash flow and budget are unchanged. Fine, but I...
by Wagnerjb
Sun Jan 11, 2015 11:47 am
 
Forum: Personal Finance (Not Investing)
Topic: If you were me, how much would your home budget be?
Replies: 36
Views: 3621

Re: Selling mineral rights to land?

I will look forward to whatever small checks we will start getting in 2016/2017. You certainly did your homework on a small plot of land, so I hope you get some ongoing reward for all that work! I took another look at the paperwork we received - it's actually an offer from Cheyenne Oil & Gas, a...
by Wagnerjb
Sun Jan 11, 2015 11:37 am
 
Forum: Personal Finance (Not Investing)
Topic: Selling mineral rights to land?
Replies: 53
Views: 5512

Re: Where do you tilt your Total Int'l Fund?

I hold about 20% of my international in Vanguard's Total International fund. I use a variety of other funds to tilt, giving me around 55% in value vs growth. Around 50% of my international is small caps. And Emerging Markets make up 30% of my international. I use quite a few funds, mostly because of...
by Wagnerjb
Sun Jan 11, 2015 11:22 am
 
Forum: Investing - Theory, News & General
Topic: Where do you tilt your Total Int'l Fund?
Replies: 40
Views: 3208

Re: marriott point value

I value my Marriott miles/points at about a penny. So, the 25,000 points would be worth $250 or so. You seem to want to spend $90 * 3 = $270 (plus tax) to acquire the 25,000 points. I don't see the benefit. Maybe I am missing some angle here.

Best wishes.
by Wagnerjb
Sun Jan 11, 2015 11:09 am
 
Forum: Personal Consumer Issues
Topic: marriott point value
Replies: 4
Views: 894

Re: Keeping CC Receipts

I am an accountant, so I am pretty detailed when it comes to things like this. I keep the receipt from the merchant and compare it to the credit card statement. (I do this every two or three months at one sitting). To answer the OP's question, I don't recall ever finding any big mistakes. In 2004 wh...
by Wagnerjb
Sun Jan 11, 2015 11:04 am
 
Forum: Personal Consumer Issues
Topic: Keeping CC Receipts
Replies: 45
Views: 3522

Re: anyone ever go to spring training?

Spring break - there are some weeks that are busier than others and that can have an impact on prices and general atmosphere of the area. Be mindful of spring break. My wife and I have visited the Tampa area for the past three years in March. Our purpose is to see my brother and mother, to get a wa...
by Wagnerjb
Sun Jan 11, 2015 10:48 am
 
Forum: Personal Consumer Issues
Topic: anyone ever go to spring training?
Replies: 7
Views: 1018

Re: Fidelity Donor Advised Fund

victorb wrote:We just recently setup a Fidelity Donor Advised Fund and it has been extremely easy to use and has exceeded our expectations. If you have any questions, their 800 number is great for advice. I would highly recommend them.


Same here.
by Wagnerjb
Sun Jan 11, 2015 10:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Donor Advised Fund
Replies: 50
Views: 3329

Re: 2000-2014 [15 year returns]

Here’s 15 year returns 2000-2014, encompassing two significant downturns and recoveries. For those who are in their 50's (or older), they experienced the previous 15 years of 1984-1999 which had dramatically better returns. I don't have the data at my fingertips, but I bet US and international larg...
by Wagnerjb
Fri Jan 09, 2015 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: 2000-2014 [15 year returns]
Replies: 26
Views: 4117

Re: At Vanguard Active beats Passive

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&ved=0CEoQFjAI&url=http%3A%2F%2Fonline.barrons.com%2Farticles%2FSB50001424053111904780504580049972670851664&ei=xwuwVOfsH8WKyASEvILYAg&usg=AFQjCNHanUsF2h65oX8dVC9AHe6UIpsBDQ&sig2=SOkDXjnLqVVwourBkmg...
by Wagnerjb
Fri Jan 09, 2015 1:24 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's stockpickers outperform.... [news article]
Replies: 61
Views: 3593

Re: Fidelity Customers, What Do You Hold at FIDO?

I use the Fidelity Donor Advised Fund, which I believe is superior to Vanguard's.....maybe only because of the lower initial investment. I have also determined that I want to have accounts at two different investment companies, just for security purposes. I prefer Vanguard in general due to their lo...
by Wagnerjb
Thu Jan 08, 2015 8:52 am
 
Forum: Investing - Theory, News & General
Topic: Fidelity Customers, What Do You Hold at FIDO?
Replies: 43
Views: 4031

Re: Why a Boglehead doesn't invest in individual companies?

Tax loss harvesting is worth 0.4% to 0.6% annually. Aren't you overestimating this bonus since you can tax loss harvest an index fund as well? So shouldn't you really should only be talking about the net benefit of being able to harvest the true dogs vs. the whole index? I suspect the net benefit i...
by Wagnerjb
Mon Jan 05, 2015 8:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15587

Re: Why a Boglehead doesn't invest in individual companies?

It is important to fairly state the benefits of an individual stock portfolio, but we also need to be fair about the true "costs" (mostly time) of holding such a portfolio. Even if you completely throw out research, isn't there a considerable amount of record keeping involved just for the...
by Wagnerjb
Mon Jan 05, 2015 8:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15587

Re: Why a Boglehead doesn't invest in individual companies?

I didn't include front running because frankly I hadn't heard of it being an issue prior to today. I found two studies, whose results don't agree: http://www.petajisto.net/papers/petajisto%202011%20jef%20-%20hidden%20cost%20for%20index%20funds.pdf Suggests 0.25% http://www.etf.com/docs/Index%20Chan...
by Wagnerjb
Mon Jan 05, 2015 7:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15587

Re: Why a Boglehead doesn't invest in individual companies?

That's not nothing, but it takes a considerable amount of effort to do the required research & recording keeping tasks as well as introducing you to significant non-rewarded stock selection risk. For me that's too small to be worth it. Certainly it is possible for people to value their time dif...
by Wagnerjb
Mon Jan 05, 2015 7:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15587

Re: Why a Boglehead doesn't invest in individual companies?

Trading costs would actually work against individual stocks since the indexes will get much lower ones. As a Vanguard Flagship customer, I trade individual stocks for free (of course I trade rarely, virtually all for tax loss harvesting purposes). No mutual fund is getting free trades. But I will a...
by Wagnerjb
Mon Jan 05, 2015 7:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15587

Re: Why a Boglehead doesn't invest in individual companies?

the articles on the wiki page seem to confirm that with realistic numbers for the amount of individual stocks, and realistic timeframes, the higher expected returns outweigh the skewness issue. Wait, I haven't seen any evidence to suggest that a portfolio of individual stocks has a higher expected ...
by Wagnerjb
Mon Jan 05, 2015 4:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15587

Re: Oil price goes down,any investment opportunities?

Only if I had a time machine and could either see the future, or go back in time. Otherwise, I don't see any opportunities that aren't already fairly priced.

Good luck.
by Wagnerjb
Mon Jan 05, 2015 1:22 pm
 
Forum: Investing - Theory, News & General
Topic: Oil price goes down,any investment opportunities?
Replies: 9
Views: 1240

Re: Hussman finally admits the obvious

John Hussman, a smart and knowledgeable guy who has been relentlessly advising that markets are overvalued and precarious, finally admits in his current newsletter that you have to be right about two things to actually profit from correct predictions: direction and timing. I disagree. All you need ...
by Wagnerjb
Mon Jan 05, 2015 1:18 pm
 
Forum: Investing - Theory, News & General
Topic: Hussman finally admits the obvious
Replies: 16
Views: 2410

Re: Wash Sales Don't Apply to Tax-deferred accounts, right?

Thanks for the feedback. This is helpful. Based on your comments, am I correct in saying that wash sale considerations only apply if the first sale was a "loss situation"? In my case, all my sales resulted in capital gains, I believe. Yes, if all of your sales in the taxable account resul...
by Wagnerjb
Mon Jan 05, 2015 12:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Wash Sales Don't Apply to Tax-deferred accounts, right?
Replies: 10
Views: 782

Re: DFA vs DIY

Don't hire an advisor just for DFA access. But if you're going to hire one anyway, make sure he has it. I agree 100%. When my father (who handled the family finances) passed away, my mother decided to use an advisor. She settled on an advisor with DFA access and he was first class. I believe DFA in...
by Wagnerjb
Mon Jan 05, 2015 8:50 am
 
Forum: Investing - Help with Personal Investments
Topic: DFA vs DIY
Replies: 10
Views: 1732

Re: Tax Refund For Principle on House

The 10k in credit card debt is a red flag, so is the 10k refund of overpaid income taxes. I am concerned that you may be buying a house for the wrong reasons, one that you might not be able to afford. Do you have a budget worked out for the new home, and does it include paying off the credit card de...
by Wagnerjb
Sun Jan 04, 2015 1:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Refund For Principle on House
Replies: 12
Views: 1277

Re: Why not just follow John Bogle

I personally follow what Mr. Bogle says because it fits my personality and in my opinion, he makes perfect sense. So again I ask why do so many make it complicated when it doesn't have to be. Others have different amounts of financial intelligence, different education, different personalities. For ...
by Wagnerjb
Sun Jan 04, 2015 12:29 pm
 
Forum: Investing - Theory, News & General
Topic: Why not just follow John Bogle
Replies: 78
Views: 5908
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