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Re: To ETF or Not to ETF? That is the question.

I am awaiting a mutual fund of ETFs. Somewhere on Wall Street, the evil Catbert is purring!! While this concept exists ( read this: http://en.wikipedia.org/wiki/Fund_of_funds ), it just does not make sense from an investor's point of view. You will pay the management fee twice. That is why Catbert ...
by baw703916
Sun Apr 26, 2015 6:23 pm
 
Forum: Investing - Theory, News & General
Topic: To ETF or Not to ETF? That is the question.
Replies: 17
Views: 1787

Re: Why is international mid cap such an unloved asset class

Most international "small cap" funds are really small/mid cap funds. Vanguard's small FTSE fund is about 50% midcaps and so is WT's DLS (Intl. Small cap dividend). I think that one reason that US midcaps have done well recently is that a lot of money is indexed to the S&P 500 and the R...
by baw703916
Sun Apr 26, 2015 3:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why is international mid cap such an unloved asset class?
Replies: 6
Views: 336

Re: 140% Stocks (or why the Kelly criterion is cool)

Whether you can end up underwater depends on whether by "margin" you literally mean a margin loan. If so then yes, as market timer's thread illustrates. A better way of owning 140% stocks is to make 40% of your portfolio LEAPs calls with a strike price of one-half the current market price ...
by baw703916
Sun Apr 26, 2015 12:01 pm
 
Forum: Investing - Theory, News & General
Topic: 140% Stocks (or why the Kelly criterion is cool)
Replies: 64
Views: 2160

Re: Study Recommends Keeping Status Quo for TSP Fund Offerin

FWIW, my TSP (L2030 with some additional G and I) is

49% G
4% F
22% C
8% S
17% I
by baw703916
Sat Apr 25, 2015 12:07 pm
 
Forum: Investing - Theory, News & General
Topic: Study Recommends Keeping Status Quo for TSP Fund Offerings
Replies: 22
Views: 1431

Re: Study Recommends Keeping Status Quo for TSP Fund Offerin

Global Real Estate Investment Trusts (REITs) – “TSP participants attain exposure to REITs in market capitalization weights via the C, S and I Funds,” and REITs “exhibit a higher degree of volatility than the broad equity market” This seems like an opportune moment to remind folks that any current o...
by baw703916
Sat Apr 25, 2015 9:29 am
 
Forum: Investing - Theory, News & General
Topic: Study Recommends Keeping Status Quo for TSP Fund Offerings
Replies: 22
Views: 1431

Re: Study Recommends Keeping Status Quo for TSP Fund Offerin

For reference, the current breakdown of how TSP participants have their money invested in aggregate:

G Fund (stable value) 35%
F Fund (TBM) 5%
C Fund (S&P 500) 28%
S Fund (Completion index) 10%
I Fund (EAFE) 5%
L funds (Target Date) 17%
by baw703916
Sat Apr 25, 2015 9:26 am
 
Forum: Investing - Theory, News & General
Topic: Study Recommends Keeping Status Quo for TSP Fund Offerings
Replies: 22
Views: 1431

Re: dollar cost averaging

That's like saying water is not wet, except when it's dry! :oops: 555, 1. You have $12,000 in cash and choose to invest $1,000 per month for the next 12 months, while holding back your available cash. 2. You have a job and a salary that allows you to invest $1,000 per month by payroll deduction eac...
by baw703916
Fri Apr 24, 2015 11:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: dollar cost averaging
Replies: 17
Views: 879

Re: Study Recommends Keeping Status Quo for TSP Fund Offerin

The I Fund would be improved by a broader index though.
by baw703916
Fri Apr 24, 2015 9:58 pm
 
Forum: Investing - Theory, News & General
Topic: Study Recommends Keeping Status Quo for TSP Fund Offerings
Replies: 22
Views: 1431

Re: Study Recommends Keeping Status Quo for TSP Fund Offerin

It appears to be Total U.S., International (without emerging), Bond, and a form of TIPS. I'm not sure what you're commenting on. International Is kind of the big issue--It doesn't have Emerging, or Canada, or small cap. The G Fund isn't actually TIPS--it is a money market fund in the sense that it ...
by baw703916
Fri Apr 24, 2015 9:44 pm
 
Forum: Investing - Theory, News & General
Topic: Study Recommends Keeping Status Quo for TSP Fund Offerings
Replies: 22
Views: 1431

Re: XIRR of NASDAQ over the last 15 years

M* lists the 12 month yield of QQQ as 1.06%, with a 0.20% E/R. If we just naively assume those numbers stayed constant over the last 15 years, the total return of a hypothetical NASDAQ fund with no expenses would have been 9.2% +1.26% = 10.46%. That's very close to the value JoMoney gets above. Yay ...
by baw703916
Fri Apr 24, 2015 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: XIRR of NASDAQ over the last 15 years
Replies: 14
Views: 854

Re: Study Recommends Keeping Status Quo for TSP Fund Offerin

In this 2012 report, the topic of Benchmarks was considered--probably why it wasn't in the 2013 report.

http://www.frtib.gov/ReadingRoom/InvBMa ... Report.pdf
by baw703916
Fri Apr 24, 2015 7:57 pm
 
Forum: Investing - Theory, News & General
Topic: Study Recommends Keeping Status Quo for TSP Fund Offerings
Replies: 22
Views: 1431

Re: What is too long to stay the course?

Warren Buffett wrote: our favorite holding period is forever
--1988 Chairman's Letter
by baw703916
Fri Apr 24, 2015 7:09 pm
 
Forum: Investing - Theory, News & General
Topic: What is too long to stay the course?
Replies: 50
Views: 3271

Re: "How much of your portfolio is in index funds, and why?"

The concept of an index fund is to track the performance of its target index after expenses. That doesn't necessarily have anything to do with the market unless the target index is a total market one.
by baw703916
Tue Apr 21, 2015 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: "How much of your portfolio is in index funds, and why?"
Replies: 62
Views: 5357

Re: "How much of your portfolio is in index funds, and why?"

I think a lot of the typical terminology ends up sounding bizarre when applied to bond funds, as opposed to stock-picking managers of equities funds. For instance, Vanguard's original TIPS fund would be pretty much indistinguishable if it were just indexed. In fact the purpose of it being active esc...
by baw703916
Tue Apr 21, 2015 11:56 am
 
Forum: Investing - Theory, News & General
Topic: "How much of your portfolio is in index funds, and why?"
Replies: 62
Views: 5357

Re: Your Questions for Jack Bogle Q&A @ Bogleheads Conferenc

Should a TIPS Fund be actively managed? Why or why not?
by baw703916
Mon Apr 20, 2015 9:36 pm
 
Forum: Investing - Theory, News & General
Topic: Your Questions for Jack Bogle Q&A @ Bogleheads Conference
Replies: 15
Views: 1574

Re: U.S. stocks in freefall

tecmage wrote:
I do like how the search is called egosearch when you click on view your posts.


Ha! I hadn't noticed that. Well played, Alex and LadyGeek! :happy
by baw703916
Mon Apr 20, 2015 3:08 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1261
Views: 241053

Re: Sad calculation (max IRA contributions)

From the March 2014 BLS Employee Benefits Survey:

In private industry, 65 percent of employees had access to retirement benefits and 48 percent of employees participated in retirement plans.
by baw703916
Sun Apr 19, 2015 10:42 pm
 
Forum: Investing - Theory, News & General
Topic: Sad calculation (max IRA contributions)
Replies: 18
Views: 1155

Re: U.S. stocks in freefall

Since I posted on this thread many moons ago, I can now just click the "view your posts" button and see whether there has been a Pretty Bad Day recently--whenever there is there's a new post in this thread and it pops up to the top. :wink:
by baw703916
Sun Apr 19, 2015 1:31 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1261
Views: 241053

Re: Rules on using IRA money for child's education?

Thanks, alex_686. I may have been unnecessarily defensive in the OP. :)

Is part of the reason that a Roth is actually better for funding college (assuming using it in that way doesn't overly deplete retirement accounts) is the way it (doesn't) show up on the FAFSA form?
by baw703916
Sat Apr 18, 2015 1:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rules on using IRA money for child's education?
Replies: 16
Views: 1276

Re: Poll: Effective average Adjusted Livesoft tax rate?

Livesoft, Can you confirm that the line 63 (total tax) amount would need to be adjusted if one has self-employment tax? Since we are ignoring other payroll taxes... OK, subtract line 27 which is half of line 57 from total tax. OTOH, the non-self-employed get lower compensation generally since their...
by baw703916
Thu Apr 16, 2015 5:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Effective average Adjusted Livesoft tax rate?
Replies: 67
Views: 4671

Re: Poll: Effective average Adjusted Livesoft tax rate?

Livesoft,

Can you confirm that the line 63 (total tax) amount would need to be adjusted if one has self-employment tax? Since we are ignoring other payroll taxes...
by baw703916
Thu Apr 16, 2015 5:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Effective average Adjusted Livesoft tax rate?
Replies: 67
Views: 4671

Moving to more expensive area--loan or sell investments?

I'm planning to move to a different part of the country. I own my present house outright, but real estate prices in my new location are some 20-30% more than where I presently live, taking into account the needed space and what commute I'm willing to accept. I could take out a loan for the remaining...
by baw703916
Thu Apr 16, 2015 4:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Moving to more expensive area--loan or sell investments?
Replies: 1
Views: 244

Re: How much riskier are munis than treasuries?

While the Vanguard ratings are helpful they don't explain what the source of the risk is. For instance the Extended Duration Treasury ETF has a risk grade of 5--all interest rate risk. The high yield corporate fund, by contrast has a grade of 3--mostly credit risk.
by baw703916
Thu Apr 16, 2015 9:37 am
 
Forum: Investing - Theory, News & General
Topic: How much riskier are munis than treasuries?
Replies: 32
Views: 3824

Re: Poll: Effective average Adjusted Livesoft tax rate?

If you have self-employment taxes, that is included on line 63. I assume that should be subtracted out?
by baw703916
Wed Apr 15, 2015 9:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Effective average Adjusted Livesoft tax rate?
Replies: 67
Views: 4671

Re: How much riskier are munis than treasuries?

You can see how the market perceives the risk. In one month (9/15/08-10/16/18), munis lost about 8% of their value (Vanguard Intemediate-Term Tax-Exempt, and the M* category average also lost 9%), while Treasuries were stable. Munis also have an additional risk, the risk that the tax treatment will...
by baw703916
Wed Apr 15, 2015 9:07 pm
 
Forum: Investing - Theory, News & General
Topic: How much riskier are munis than treasuries?
Replies: 32
Views: 3824

Estimated state taxes if changing state of residence

I am planning to move to a different state later this year. The last several years, I have had to make estimated tax payments as I have income as an independent contractor. I have made equal payments each quarter for state taxes to avoid a rather complicated form figuring how much income I earned in...
by baw703916
Wed Apr 15, 2015 3:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Estimated state taxes if changing state of residence
Replies: 1
Views: 205

Re: Dr. Ron Paul politician says terrible crash is coming

Dr. Ron Paul , politician for many years, and was a possible presidential candidate says a crash is coming similar to 2008 or worse. Anybody know anything about this ?? He said that last July. It is old news. I guarantee with 100% certainty that the next crash is nine months closer now than it was ...
by baw703916
Wed Apr 15, 2015 11:16 am
 
Forum: Investing - Theory, News & General
Topic: [retired guy said] terrible crash is coming
Replies: 71
Views: 8360

Re: 401k conversion tax when moving

Any other ideas on how to limit the income to one state without having to wait until 2016? What's the rush? Waiting is the safest bet. Otherwise do a mock return as a part-year resident in state A with and without this extra income and compare. I think the issue is that if the conversion is done in...
by baw703916
Tue Apr 14, 2015 10:54 am
 
Forum: Personal Finance (Not Investing)
Topic: 401k conversion tax when moving
Replies: 15
Views: 845

Rules on using IRA money for child's education?

I'm asking this question on behalf of a friend of a friend. I realize that using money from an IRA to fund children's college tuition isn't a very Boglehead thing to do. So no need to lecture me--I don't have any kids in any event. But what are the rules on using IRA money (Roth or traditional) for ...
by baw703916
Tue Apr 14, 2015 10:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Rules on using IRA money for child's education?
Replies: 16
Views: 1276

Re: How should I name my home Wi-Fi network?

Market Linked CDs suck
by baw703916
Sun Apr 12, 2015 3:27 pm
 
Forum: Personal Consumer Issues
Topic: How should I name my home Wi-Fi network?
Replies: 55
Views: 4519

Re: 401k conversion tax when moving

A lot of the net tax will depend on how State A and State B handle part-year residents, which isn't consistent between states. You may want to play with different scenarios (using 2014 forms) on converting in 2015 while still in state A, in 2015 after moving to state B, and in 2016.
by baw703916
Sun Apr 12, 2015 2:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: 401k conversion tax when moving
Replies: 15
Views: 845

Re: 401k conversion tax when moving

Hi there- quick question. I have an existing 401k from employment in state A with state income tax. I will be moving to a new company in state B with a different state income tax in July 2015. I will be rolling my 401k to a personal Roth IRA. Will both states tax this IRA income or is there a way I...
by baw703916
Sun Apr 12, 2015 2:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: 401k conversion tax when moving
Replies: 15
Views: 845

Re: Barrons Article on LTC Insurance

How would someone with a net worth of $5 million benefit from LTCi? If I understand things correctly, the policies which are available now have a max 5 year payout. Even at $200K per year, that's only 20% of the person's net worth. And $200K per year is the SWR. This makes no sense. By paying less ...
by baw703916
Sun Apr 12, 2015 2:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Barrons Article on LTC Insurance
Replies: 12
Views: 1074

Re: Barrons Article on LTC Insurance

How would someone with a net worth of $5 million benefit from LTCi? If I understand things correctly, the policies which are available now have a max 5 year payout. Even at $200K per year, that's only 20% of the person's net worth. And $200K per year is the SWR.

This makes no sense.
by baw703916
Sun Apr 12, 2015 11:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Barrons Article on LTC Insurance
Replies: 12
Views: 1074

Re: 401k "Fee Freedom" Day

If you maxed out your contributions, the "freedom day" would occur in January (even with the higher fee funds). :happy

I'm not sure why one wouldn't use the Spartan Funds in a Fidelity 401k. I assume they're available?
by baw703916
Sun Apr 12, 2015 10:44 am
 
Forum: Investing - Theory, News & General
Topic: 401k "Fee Freedom" Day
Replies: 11
Views: 1102

Re: Adjusted Livesoft Income (ALI)

Does this methodology handle the back-door Roth correctly?
by baw703916
Sat Apr 11, 2015 4:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Adjusted Livesoft Income (ALI)
Replies: 40
Views: 6231

Re: The Indexer, Speculator & Efficiency

JoMoney, That's true if all indexers invest in a fund that holds all stocks. But in the real world there is the "S&P effect" which I encourage you to google. A lot of people have access to an S&P index fund but not an extended market index fund in their 401k offerings. I think it's...
by baw703916
Sat Apr 11, 2015 4:08 pm
 
Forum: Investing - Theory, News & General
Topic: The Indexer, Speculator & Efficiency
Replies: 17
Views: 1586

Re: Long-term care hybrid insurance - is this a good idea?

It's a more complex policy, and complexity always tends to favor the seller (think market-linked CDs).

Why is insurance an exception to the Boglehead emphasis on simplicity?
by baw703916
Sat Apr 11, 2015 3:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long-term care hybrid insurance - is this a good idea?
Replies: 12
Views: 1425

Re: ETF limit order relative to NAV?

I see your point. But even though defining an NAV for an illiquid asset during market turbulence is problematic, one does have the right to buy or sell mutual fund shares at the nominal end-of-day NAV. So it has relevance in spite of these issues.
by baw703916
Sat Apr 11, 2015 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: ETF limit order relative to NAV?
Replies: 7
Views: 433

Re: ETF limit order relative to NAV?

VSS may not be the best example due to the time zone difference between the ETF and the underlying securities. A better example is probably the muni bond ETF MUB (and also the forthcoming Vanguard fund that will track the same index). It went pretty nonlinear during the financial crisis (market pric...
by baw703916
Sat Apr 11, 2015 1:49 pm
 
Forum: Investing - Theory, News & General
Topic: ETF limit order relative to NAV?
Replies: 7
Views: 433

ETF limit order relative to NAV?

I just wondered if any brokerages facilitate placing a limit order on an ETF not as an absolute price/share, but a price relative to the current NAV. For instance, if I decided to invest (new money or rebalancing) into VSs (small FTSE), is there any way to put in a conditional buy order to buy if th...
by baw703916
Sat Apr 11, 2015 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: ETF limit order relative to NAV?
Replies: 7
Views: 433

Re: Allan Roth Recommends LTC Insurance (Sort of)

Here is the link that Allan references regarding Genworth's rumored divestment of their Life/Annuity businesses. From a "source", not officially announced by the company. http://www.bloomberg.com/news/articles/2015-04-02/genworth-said-to-seek-buyers-for-glaic-life-and-annuity-division This...
by baw703916
Sat Apr 11, 2015 12:13 pm
 
Forum: Personal Consumer Issues
Topic: Allan Roth Recommends LTC Insurance (Sort of)
Replies: 3
Views: 482

Re: Allan Roth Recommends LTC Insurance (Sort of)

My issue with the hybrid policies (LTC + Life insurance) is that they are inherently more complex than a policy covering only one type on insurance. While it's true that the actuarial risks tend to offset, wouldn't this just benefit the sellers, rather than they buyers? How do people buying the poli...
by baw703916
Sat Apr 11, 2015 11:56 am
 
Forum: Personal Consumer Issues
Topic: Allan Roth Recommends LTC Insurance (Sort of)
Replies: 3
Views: 482

Re: Small Value is not tax inefficient!

There may be good reasons not to tilt, but I don't believe tax efficiency is a valid one. Vanguard's SV Index Fund has not had a capital gains distribution since the advent of the ETF share class ten years ago. Agreed, but that's a feature of the Vanguard fund, not something intrinsic to the asset ...
by baw703916
Sun Apr 05, 2015 3:50 pm
 
Forum: Investing - Theory, News & General
Topic: Small Value is not tax inefficient!
Replies: 13
Views: 1583

Re: Small Value is not tax inefficient!

I tend to think Vanguard is particularly skilled at managing their stock funds for tax efficiency. Avi The ETF share class has helped the tax management considerably, by allowing shares with low basis costs to be disposed of in ETF redemptions. This is of course unique to Vanguard for the next seve...
by baw703916
Sun Apr 05, 2015 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Small Value is not tax inefficient!
Replies: 13
Views: 1583

Re: Long Term Tax Efficient Investing - Is it Better to Shel

While government policy is unpredictable, so are future interest rates on bonds. All one can do is assess the current situation as being the best guess as what will happen in the future with growing uncertainty as time lengthens. If you put equities in a tax advantaged account and bonds in taxable ...
by baw703916
Sun Apr 05, 2015 12:55 pm
 
Forum: Investing - Theory, News & General
Topic: Long Term Tax Efficient Investing - Is it Better to Shelter
Replies: 16
Views: 2396

Small Value is not tax inefficient!

Fellow Bogleheads, There seems to be a conventional wisdom that tilting to small value is tax inefficient. There may be good reasons not to tilt, but I don't believe tax efficiency is a valid one. Vanguard's SV Index Fund has not had a capital gains distribution since the advent of the ETF share cla...
by baw703916
Sun Apr 05, 2015 12:29 pm
 
Forum: Investing - Theory, News & General
Topic: Small Value is not tax inefficient!
Replies: 13
Views: 1583

Re: Long Term Tax Efficient Investing - Is it Better to Shel

The problem with the Reichenstein paper is similar to the shortcoming of many papers which have considered the location issue: one set of numbers for tax rates and asset class returns is assumed, and then a conclusion is derived based on those numbers. If those numbers become unrealistic in some fut...
by baw703916
Sun Apr 05, 2015 11:39 am
 
Forum: Investing - Theory, News & General
Topic: Long Term Tax Efficient Investing - Is it Better to Shelter
Replies: 16
Views: 2396

Re: Bored -- wondering about day trading for fun

Having my net worth increase never gets boring.

Losing money gets boring very quickly. So unless day trading has a very high probability of increasing net worth I wouldn't consider it "fun".

Sooner or later another 2008 will happen and then things *won't* be boring.
by baw703916
Sun Apr 05, 2015 11:07 am
 
Forum: Investing - Theory, News & General
Topic: Bored -- wondering about day trading for fun
Replies: 61
Views: 5613

Re: Investment returns like the extremely rich

I thought it was interesting to note that this same rate of growth was available to anyone who maintained a balanced portfolio of 50%/50% stocks and bonds over that period: Yes, assuming they had it all in a tax-advantaged account (I guess it would have to be a Roth otherwise there would have been ...
by baw703916
Sun Apr 05, 2015 10:27 am
 
Forum: Investing - Theory, News & General
Topic: Investment returns like the extremely rich
Replies: 13
Views: 2028
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