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Re: What % of stock market "drive" is gambling?

I'm not seeing why VTI is more speculative than VTSMX. But then again, gambling doesn't interest me, and I can't really visualize why it interests other people. VTI allows intra-day trading. It gets used by traders who want exposure to the market along with the ability to quickly exit. I guess I'm ...
by baw703916
Fri Apr 18, 2014 12:44 am
 
Forum: Investing - Theory, News & General
Topic: What % of stock market "drive" is gambling?
Replies: 36
Views: 3311

Re: First of two parter on what is risk

I propose that on a practical level, risk is the probability that at some point in the future the investor won't have as much money as (s)he needs. So a portfolio which is invested very conservatively may in fact be very risky, in spite of low volatility, if it is likely to produce a return insuffic...
by baw703916
Fri Apr 18, 2014 12:40 am
 
Forum: Investing - Theory, News & General
Topic: First of two parter on what is risk
Replies: 26
Views: 1414

Re: What % of stock market "drive" is gambling?

I'm not seeing why VTI is more speculative than VTSMX. But then again, gambling doesn't interest me, and I can't really visualize why it interests other people.
by baw703916
Fri Apr 18, 2014 12:07 am
 
Forum: Investing - Theory, News & General
Topic: What % of stock market "drive" is gambling?
Replies: 36
Views: 3311

Re: What % of stock market "drive" is gambling?

nisiprius wrote:would you go to a Las Vegas casino just to see the Cirque de Soleil?


Of course not. But you might have gone to attend Bogleheads V ;)
by baw703916
Wed Apr 16, 2014 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: What % of stock market "drive" is gambling?
Replies: 36
Views: 3311

Re: Why are total bond market funds so often recommended?

That sounds like a good argument for sticking to Treasuries.
by baw703916
Tue Apr 15, 2014 7:47 pm
 
Forum: Investing - Theory, News & General
Topic: Why are total bond market funds so often recommended?
Replies: 52
Views: 4157

Re: Stocks: How Bad It Can Get

Stay the course, nothing to see here. Stocks are volatile and can go down a lot. But we all should already be aware of that following 2007-09. :) Fortunately we don't have to concern ourselves with whether we should hope whether stocks do or don't have a big drop, as the market isn't going to be aff...
by baw703916
Tue Apr 15, 2014 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: How Bad It Can Get
Replies: 72
Views: 5309

Re: SCV premium is a history/math story, its not scientific

Nothing in economics or finance is scientific, because you can't perform an adequately controlled experiment. There's no proof that stocks will outperform bonds (stocks can go to zero by governmental action), nor that bonds are safer than stocks (hyperinflation anyone?), nor that gold is a good hedg...
by baw703916
Mon Apr 14, 2014 8:10 am
 
Forum: Investing - Theory, News & General
Topic: SCV premium is a history/math story, its not scientific
Replies: 46
Views: 2228

Re: gold , silver, copper and uranium only

If I buy an equal number of moles of copper, silver, gold, and uranium, I'll have to rebalance every 10^7 years or so.

Seems like too much work.
by baw703916
Sun Apr 13, 2014 8:12 pm
 
Forum: Investing - Theory, News & General
Topic: gold , silver, copper and uranium only
Replies: 46
Views: 2226

Re: Vanguard VTI and VXUS: adding more small VSS and VB/VBR

It's fine to tilt, but suggest you do it as part of a long term strategy, not short term tactical. In other words, set your tilt and keep it there by re-balancing. Write it down. Don't just do it on a whim or market timing. This is excellent advice. An important point for investors who are consider...
by baw703916
Sat Apr 12, 2014 10:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard VTI and VXUS: adding more small VSS and VB/VBR
Replies: 15
Views: 1015

Re: Life in the Bay Area and housing costs

If by government the OP means the federal government, then for a given pay grade the pay is adjusted by the locality adjustment. https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2014/saltbl.pdf For the Bay Area, the adjustment is 35%--meaning that a Federal employ...
by baw703916
Thu Apr 10, 2014 5:57 pm
 
Forum: Personal Consumer Issues
Topic: Life in the Bay Area and housing costs
Replies: 51
Views: 3096

Re: Roth IRA - tax free - totally ?

A non deductible TIRA is inferior to both of the above. As is a taxable account, in which the gains on the part that was already taxed are still taxable. PJW Yes, but in a non-deductible TIRA, all the gains will be taxed as ordinary income. In a taxable account, they won't be (assuming the standard...
by baw703916
Tue Apr 08, 2014 8:54 pm
 
Forum: Investing - Theory, News & General
Topic: Roth IRA - tax free - totally ?
Replies: 67
Views: 2660

Re: RZV Regression [Guggenheim S&P SmallCap 600 Pure Value]

I have no idea what you just said, but I looked RZV up on the morningstar charts compared to VTSMX, and was absolutely horrified. Why are you horrified? The size and value premia are supposed to be risk based according to Fama and French's explanation, so the volatility shouldn't be a surprise. Any...
by baw703916
Mon Mar 24, 2014 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: RZV Regression [Guggenheim S&P SmallCap 600 Pure Value]
Replies: 20
Views: 1266

Re: When the "very best" fail, should you be trying

I bet they didn't fail to get paid, which is their real goal.
by baw703916
Fri Mar 21, 2014 8:53 pm
 
Forum: Investing - Theory, News & General
Topic: When the "very best" fail, should you be trying
Replies: 12
Views: 1525

Re: Municipal Bonds or Vanguard Wellesley Income Fund

Individual muni bonds are too illiquid if you might need to sell them to raise cash. On the other hand a fund (say Intermediate Term or Limited Term--there's a clear tradeoff between yield and loss of principal) could be easily sold, but it might be at a loss. Wellesley wouldn't be suitable for a ta...
by baw703916
Mon Mar 17, 2014 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Municipal Bonds or Vanguard Wellesley Income Fund
Replies: 10
Views: 1272

Re: The Intelligent Investor

"Do what Benjamin Graham would do" would be a very good IPS, albeit challenging to follow at times.
by baw703916
Mon Mar 17, 2014 7:25 pm
 
Forum: Investing - Theory, News & General
Topic: The Intelligent Investor
Replies: 27
Views: 3293

Re: Green Bogleheads discussing Target Stock

Why not just call it "The Dogs of the Dow?" L. Actually the "Dogs of the Dow" was a value strategy--a poorly diversified one which excludes the vast majority of companies (Target would never be included for instance). If you are really investing in deep value, as opposed to just...
by baw703916
Mon Mar 17, 2014 12:58 pm
 
Forum: Investing - Theory, News & General
Topic: Green Bogleheads discussing Target Stock
Replies: 36
Views: 2437

Re: Green Bogleheads discussing Target Stock

On the other hand, sometimes stocks that get badly beaten up (justifiably or otherwise) do recover. So maybe the thing to do is to buy a whole bunch of down and out stocks, in the hope that some will completely recover and that this will make up for the ones that never do. You could even implement a...
by baw703916
Mon Mar 17, 2014 11:42 am
 
Forum: Investing - Theory, News & General
Topic: Green Bogleheads discussing Target Stock
Replies: 36
Views: 2437

Re: Please Help with Math. Cap Gains, Div and Foreign Tax

I wouldn't be surprised if this turns out to be true, though. The fund didn't distribute capital gains in 2009-2012 as it used up its accumulated losses, then distributed a large gain in 2013. If the bull market continues, the fund will probably continue to distribute capital gains. (This is a comm...
by baw703916
Mon Mar 17, 2014 11:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Please Help with Math. Cap Gains, Div and Foreign Tax
Replies: 19
Views: 956

Re: Please Help with Math. Cap Gains, Div and Foreign Tax

grabiner wrote: it distributed a gain of 5% of its share price in 2015.


Thanks for the heads up. I'll make sure not to own it in 2015! :)
by baw703916
Sun Mar 16, 2014 11:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please Help with Math. Cap Gains, Div and Foreign Tax
Replies: 19
Views: 956

Re: Can I beat 2.75% guaranteed via mortgage paydown?

I think people doing it for the psychological benefit are implicitly saying that the numbers don't justify it, making it a not very good argument. psychological benefit = sleeping better = priceless = very good argument I sleep better knowing that my portfolio has been mathematically optimized, reg...
by baw703916
Sun Mar 16, 2014 2:41 pm
 
Forum: Investing - Theory, News & General
Topic: Can I beat 2.75% guaranteed via mortgage paydown?
Replies: 73
Views: 4520

Re: Investing in stocks--A surprising Google report ?

I remember reading somewhere that a loss is twice as emotionally intense as a gain. Maybe these results suggest that it's actually a factor of 5?

Brad
by baw703916
Sun Mar 16, 2014 12:47 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in stocks--A surprising Google report ?
Replies: 37
Views: 4090

Re: Can I beat 2.75% guaranteed via mortgage paydown?

Although it's not possible to have a nominal loss on prepaying the mortgage, there can be an opportunity cost, as MT and grabiner point out. Consider that seven years ago the risk-free rate was above 5% (seems hard to imagine it being anything other than zero these days!). It's possible that in five...
by baw703916
Sun Mar 16, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: Can I beat 2.75% guaranteed via mortgage paydown?
Replies: 73
Views: 4520

Re: Wade Pfau: Lifecycle Finance

Amy Finkelstein of MIT and Jeff Brown of Illinois have done extensive research on the market for long-term care and Amy presented a summary of that research at the 2008 Future of Life-Cycle Saving and Investing Conference. Here is a link to the papers at that conference including the Finkelstein pa...
by baw703916
Sun Mar 16, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 118
Views: 11967

Re: Wade Pfau: Lifecycle Finance

BobK, From a Lifecycle Finance approach, how would one handle planning for the possibility of needing long-term care? That has been a contentious issue in several discussions on the board, and there doesn't seem to be any consensus. It's a huge potential uncertainty in one's future liability--how do...
by baw703916
Sat Mar 15, 2014 7:31 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 118
Views: 11967

Re: Vanguard Thinks an Advisor is worth 300 Basis Points

The paper says that a typical investor has 150 bp worth of bad behavior that an advisor will hopefully be able to cure them of--that's the largest component of the 300 bp. I don't think many Bogleheads would experience nearly this much of a difference from working with an advisor. The point being th...
by baw703916
Sat Mar 15, 2014 6:03 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Thinks an Advisor is worth 300 Basis Points
Replies: 4
Views: 971

Re: Do you have a side job?

Developmentally, neither children nor adolescents have full access to that part of their brain (the prefrontal cortex) that's most useful in understanding the long-term consequences of actions such as saving or getting into debt. Thank you. How does this relate to an old Stanford marshmallow experi...
by baw703916
Sat Mar 15, 2014 2:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you have a side job?
Replies: 58
Views: 4771

Re: Green Bogleheads discussing Target Stock

Target Retirement: good investment strategy
Target stock: not so much
by baw703916
Sat Mar 15, 2014 1:34 pm
 
Forum: Investing - Theory, News & General
Topic: Green Bogleheads discussing Target Stock
Replies: 36
Views: 2437

Re: What is your 2013 Federal Effective Tax Rate?

All of the discussion so far has not put self-employment income on the same footing as W-2 income. You either should not include half of the self-employment tax from the tax rate calculation, or add in the employer's portion of FICA on W-2 income. But this whole calculation seems like too much trou...
by baw703916
Sat Mar 15, 2014 1:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: What is your 2013 Federal Effective Tax Rate?
Replies: 73
Views: 4713

Re: What is your 2013 Federal Effective Tax Rate?

All of the discussion so far has not put self-employment income on the same footing as W-2 income. You either should not include half of the self-employment tax from the tax rate calculation, or add in the employer's portion of FICA on W-2 income. But this whole calculation seems like too much troub...
by baw703916
Sat Mar 15, 2014 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: What is your 2013 Federal Effective Tax Rate?
Replies: 73
Views: 4713

Re: Rick Ferri's estimated future returns

I wonder if anyone is going to suggest to Rick that he should enter the Bogleheads contest, as happened on another thread in which estimated returns were discussed?
by baw703916
Fri Mar 14, 2014 11:28 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri's estimated future returns
Replies: 8
Views: 2248

Re: Please Help with Math. Cap Gains, Div and Foreign Tax

One aspect of actively managed funds (such as the American Funds), is that they tend to buy and sell stocks in their portfolio much more often than do index funds. When they do this and realize a capital gain, they distribute the gain to the fund's shareholders. This means the shareholders have to p...
by baw703916
Fri Mar 14, 2014 7:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please Help with Math. Cap Gains, Div and Foreign Tax
Replies: 19
Views: 956

Re: 10 year forecast for SP500

I already have. But Mr. Bogle should--he's the one who made the prediction for the WSJ. :)

Anyway, there's a reason why he's making a 10 year prediction, not a 1 year prediction.
by baw703916
Thu Mar 13, 2014 6:32 pm
 
Forum: Investing - Theory, News & General
Topic: 10 year forecast for SP500
Replies: 23
Views: 2188

Re: 10 year forecast for SP500

Here's Mr. Bogle prediction as of three years ago. Over the next decade, Mr. Bogle said stocks are likely to generate an average annual return, including dividends, of around 7%. http://online.wsj.com/news/articles/SB10001424053111904103404576560913892680574?mod=WSJ_hp_MIDDLENexttoWhatsNewsFifth&...
by baw703916
Thu Mar 13, 2014 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: 10 year forecast for SP500
Replies: 23
Views: 2188

Re: Maxing the TSP: 27 contributions in 2014

I'm pretty sure it goes by the actual pay date, not when the money appears in your account. They try to deposit it the working day previous to the pay date, but don't always make it, as that one instance shows. 2015, however, will have 27 pay periods, because the pay date would normally be Friday, J...
by baw703916
Thu Mar 13, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: Maxing the TSP: 27 contributions in 2014
Replies: 4
Views: 514

Re: What is your 2013 Federal Effective Tax Rate?

How are you defining it? Total taxes paid to AGI? What if you have self employment income, and pay self employment tax as well as income tax? Are you excluding tax-deferred retirement contributions from income?
by baw703916
Wed Mar 12, 2014 9:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: What is your 2013 Federal Effective Tax Rate?
Replies: 73
Views: 4713

Re: Federal deferred FERS retirement, TCC and FEHB

Victoria, The OPM Page on FERS Deferred Retirement just says your health benefits don't continue (which you already knew and which doesn't answer your question. But this pamphlet does explain things (I had read this before, but of course can't find now) https://www.opm.gov/retirement-services/public...
by baw703916
Wed Mar 12, 2014 8:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Federal deferred FERS retirement, TCC and FEHB
Replies: 10
Views: 551

Re: What If Long-Term Thinking Really Catches On?

But the timing/selection factor must sum to zero for all active investors in aggregate--they can't have bad market timing or below average stock picking performance. That's one thing that really bothers me about the statement "most investors buy and sell at exactly the wrong times." That c...
by baw703916
Wed Mar 12, 2014 12:12 am
 
Forum: Investing - Theory, News & General
Topic: What If Long-Term Thinking Really Catches On?
Replies: 21
Views: 2022

Re: What If Long-Term Thinking Really Catches On?

Facebook could never have had an IPO, because nobody would have been able to buy it, since it wasn't in any index. :)
by baw703916
Tue Mar 11, 2014 11:29 pm
 
Forum: Investing - Theory, News & General
Topic: What If Long-Term Thinking Really Catches On?
Replies: 21
Views: 2022

Re: Why is index investing better considering these funds

What grabiner said.

Also, can he provide documented proof that he was recommending those same funds 5 years ago? If not, which funds was he recommending back then? And, how have they done since then?
by baw703916
Tue Mar 11, 2014 11:20 pm
 
Forum: Investing - Theory, News & General
Topic: Why is index investing better considering these funds
Replies: 23
Views: 3025

Re: Muni Bond Question

To the OP: given your long time horizon, why not buy LT TE rather than IT TE? The duration isn't that much greater and the yield is considerably higher. The formula change in value = duration * change in interest rates only holds for small changes in interest rates. For instance, if I buy 30 year ze...
by baw703916
Sun Mar 09, 2014 10:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Muni Bond Question
Replies: 10
Views: 653

Re: How did you get through the market crash in 08-09

For options 2 and 3, what's the point of selling after it's gone down?
by baw703916
Sun Mar 09, 2014 10:20 pm
 
Forum: Investing - Theory, News & General
Topic: How did you get through the market crash in 08-09
Replies: 104
Views: 5435

Re: Small Cap Tilting

Can we not agree that most people think small cap value will outperform? Therefore, the chances of it outperforming are greatly reduced. People on this board seem to think that, but apparently not everybody does. AUM Vanguard Small Value Index (all share classes): $12.1 billion Vanguard Small Growt...
by baw703916
Sun Mar 09, 2014 7:31 pm
 
Forum: Investing - Theory, News & General
Topic: Small Cap Tilting
Replies: 84
Views: 6095

Re: Getting Rich By Reading Fiction

Hi Joe, Thank you for mentioning Fiddler on the Roof . It's ironic that material wealth automatically brings respect (your second quote). Someone busy with the pursuit of wealth has less time to read great books and contemplate life. However, having acquired wealth is a good time to start enhancing...
by baw703916
Sun Mar 09, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Getting Rich By Reading Fiction
Replies: 7
Views: 1706

Re: OMG, There Goes Coinstar?

nisiprius wrote:So perhaps the best solution... would be to take your coins and blow them to bits.


A new kind of bitcoin! :D
by baw703916
Sun Mar 09, 2014 3:26 pm
 
Forum: Personal Consumer Issues
Topic: OMG, There Goes Coinstar?
Replies: 38
Views: 3833

Re: Please Help with Math. Cap Gains, Div and Foreign Tax

For VTSAX: --all domestic stocks, so no foreign tax credit --no distributed capital gains (I don't believe there have ever been any for this fund--that's one of the beauties of indexing. --dividends: from the distributions link above, there were total dividend distributions of $0.814 per share of VT...
by baw703916
Sun Mar 09, 2014 3:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please Help with Math. Cap Gains, Div and Foreign Tax
Replies: 19
Views: 956

Re: Poll: Are you going to retire? And if so, when?

I recently read an article entitled "The case for never retiring." It summarized a couple different studies, one from Harvard and one from a research institute in the UK. Here are some of the findings: + Retirement increases the probability of suffering from clinical depression by about 4...
by baw703916
Sun Mar 09, 2014 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Are you going to retire? And if so, when?
Replies: 38
Views: 2975

Re: Don't like PE/10; How about Warren Buffet's metric

First, the opportunity cost of stocks versus bonds is 5 to 7% per year. So for every dollar you have in bonds you are forgoing 5 to 7% on average returns in stocks. That seems doubtful at current prices. Using this Gordon model methodology: http://www.bogleheads.org/forum/viewtopic.php?f=10&t=1...
by baw703916
Sun Mar 09, 2014 12:15 pm
 
Forum: Investing - Theory, News & General
Topic: Don't like PE/10; How about Warren Buffet's metric
Replies: 24
Views: 1219

Re: Vanguard files for active fund ETFs

Having a bunch of authorized participants doing ETF arbitrage in the muni market might alleviate the liquidity problem in the long run. I mean, isn't the basic problem that people don't trade munis often enough?
by baw703916
Sat Mar 08, 2014 11:27 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard files for active fund ETFs
Replies: 21
Views: 1521

Re: How Many Funds Do You Have in Taxable?

Is there a good strategy to get rid of funds that have a large gain, and i am in a high tax bracket? Please don't suggest donating to charity. The funds are low cost (random vanguard funds), but they are now a small part of my portfolio (2-4%) Not really, unless a repeat of 2008 happens. But if the...
by baw703916
Sat Mar 08, 2014 11:18 pm
 
Forum: Investing - Theory, News & General
Topic: How Many Funds Do You Have in Taxable?
Replies: 97
Views: 4889

Re: How Many Funds Do You Have in Taxable?

12 I have a tilted portfolio and want to hold bonds in taxable. If it isn't already obvious, I'm not particularly interested in trying to minimize the number of funds. :) Baw could you please tell us what the funds are? I'm interested in learning more about the portfolios of experienced Bogleheads....
by baw703916
Sat Mar 08, 2014 9:12 pm
 
Forum: Investing - Theory, News & General
Topic: How Many Funds Do You Have in Taxable?
Replies: 97
Views: 4889
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