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Re: 32 y.o. Investor Looking to Add Fund to Taxable Acct

Bob's not my name wrote:
burma7734 wrote:The key is estimating an average (not marginal) tax rate at withdrawal - I am using 20%. So I count a $1 in taxable as equivalent to pre-tax $1.20
That's 16.7%.


Correct... my mistake. Should be $1.25 equivalent to $1 with a 20% average tax rate assumption.
by burma7734
Mon Nov 04, 2013 12:39 am
 
Forum: Investing - Help with Personal Investments
Topic: 32 y.o. Investor Looking to Add Fund to Taxable Acct
Replies: 9
Views: 993

Re: 32 y.o. Investor Looking to Add Fund to Taxable Acct

I think your idea to add the Extended index is sound - maybe something like VEXAX. I keep track of my "stock style" through a spreadsheet with the weighted totals of the Morningstar 3x3 style categories. Market weight for large caps is about 72% of US stock now - my target is 62%, since I ...
by burma7734
Sun Nov 03, 2013 7:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: 32 y.o. Investor Looking to Add Fund to Taxable Acct
Replies: 9
Views: 993

Re: Three-Fund Portfolio - VBTLX vs. VBILX

The fund names might cause you to think incorrectly about thier holdings. If you look a the average duration of each, you will see that VBTLX is at 5.5 years while VBILX is at 6.5 years. While Total Bond has a mix of long, medium, and short term bonds, on average it has a lower duration (i.e. less i...
by burma7734
Sun Nov 03, 2013 6:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Three-Fund Portfolio - VBTLX vs. VBILX
Replies: 11
Views: 1644

Re: Quicken and Vanguard - Download Problem

Seems to be fixed now.
by burma7734
Mon Oct 14, 2013 10:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Quicken and Vanguard - Download Problem
Replies: 219
Views: 18211

Re: Quicken and Vanguard - Download Problem

I have been having this problem too the last couple weeks. My One Step Update returns and OL-293 error for Vanguard. Thanks for the link to the known issues page. Hopefully fixed soon.
by burma7734
Sun Sep 29, 2013 9:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Quicken and Vanguard - Download Problem
Replies: 219
Views: 18211

Re: Hypothetical: Why not I-Bonds instead of TBM?

Do we have any historical data if I-Bonds beats TBM over a long period, say 20 years... or vice versa? Check back in 2018 after I-bonds have been around for 20 years. $10k of I-bonds in from the first issue in Nov 1998 would be worth $23,576 now $10k put into VBTIX at the same time with dividends r...
by burma7734
Mon Sep 09, 2013 8:40 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical: Why not I-Bonds instead of TBM?
Replies: 8
Views: 1414

Re: What to put in my backdoor Roth IRA...

You have a low cost, market weighted equity portfolio. You do already own market weighted REIT and Small-Value stocks in VTSMX. But if you want to use the Roth to "tilt" your portfolio, I think adding a small-value tilt (like VBR) might be a good way to go.
by burma7734
Mon Sep 09, 2013 8:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to put in my backdoor Roth IRA...
Replies: 3
Views: 243

Re: Vanguard Reit

REITs are equities. The only reason to hold it is if you want to "tilt" your equity holdings to overweight the market cap REIT weight. If you already hold a broad equity fund, like Total Stock Market, it already contains the same companies as your REIT fund. REIT has been highly correlated...
by burma7734
Thu Sep 05, 2013 3:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Reit
Replies: 21
Views: 2046

Re: Question about volatile stock funds and allocation

Back to the OP question... Does anyone else adjust their allocation based on having more volatile stocks? Yes, as you add volatility in one asset you would want to counterbalance that with a less volatile asset to keep the your portfolio beta constant. The more precise way to do this would be to cal...
by burma7734
Wed Sep 04, 2013 12:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about volatile stock funds and allocation
Replies: 9
Views: 619

Re: Question about volatile stock funds and allocation

I think you mean to INCREASE your bond allocation to account for higher risk stocks, which is fine. However, what probably matters more if you are early in your wealth accumulation is your savings rate rather than a few points here or there on stock allocation. If you feel better about your portfoli...
by burma7734
Wed Sep 04, 2013 12:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Question about volatile stock funds and allocation
Replies: 9
Views: 619

Re: Tilting to value/small

I do employ a tilt toward small and medium stocks. I think using the Morningstar style box is the easiest way to explain. If you look at VTSAX you see the style box as, below which would be the market cap weighted US Stock Market: 23 25 24 6 6 7 3 3 3 I want my mid and small holdings to be more than...
by burma7734
Tue Sep 03, 2013 11:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tilting to value/small
Replies: 25
Views: 2656

Re: Buying more I-Bonds

So that leaves the inflation portion. Right now it's 1.18% like you said. If you wait till the last two weeks of October, you can calculate what the rate for the 11/1/2013 issue will be (folks on here will do it for you, there is usually a post) and you can decide then whether it's better to buy du...
by burma7734
Fri Aug 30, 2013 3:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying more I-Bonds
Replies: 11
Views: 863

Re: Buying more I-Bonds

I guess what you are really asking is if the fixed rate on I-Bonds might be greater than the current zero after November. The current yield is, as you noted, 0% fixed + 1.18% CPI. If you bought today, or in November your CPI factor will eventually be the same. I am not sure how Treasury decides on t...
by burma7734
Fri Aug 30, 2013 3:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying more I-Bonds
Replies: 11
Views: 863

Re: Max out 401k: Traditional-Roth mix

I am in a similar situation and weighed this decision a few months back. I went with a "split the baby in half" tax diversification answer. 30% of my 401k contribution is now going in to r401k. About 50% of my total investment portfolio is taxable, and I didn't want it to shift much from t...
by burma7734
Wed Aug 21, 2013 11:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Max out 401k: Traditional-Roth mix
Replies: 7
Views: 580

Re: 401k T or Roth & dependence with tax bracket

I decided to "tax diversify" and contribute my 401k to both Trad and Roth. I max my annual 401ka and IRA (backdoor roth) contribution. I have been putting 30% 401k contribution as Roth. My assumptions: 1) Tax rates might be higher in the future than today 2) Most of my retirement assets ar...
by burma7734
Wed Jul 03, 2013 12:49 am
 
Forum: Investing - Theory, News & General
Topic: 401k T or Roth & dependence with tax bracket
Replies: 9
Views: 644

Re: yet another Tactical tilt recipe

I spent some time looking at the Shiller "theory" and playing around with backtest data. The problem I was having valuation derisking is that the market can stay overvalued for a long period time and you might give up a lot of gain by just cutting back when prices got high. Working through...
by burma7734
Sun Jun 09, 2013 8:39 pm
 
Forum: Investing - Theory, News & General
Topic: yet another Tactical tilt recipe
Replies: 44
Views: 3547

Re: yet another Tactical tilt recipe

I took a little time this week to backtest this tactical tilt strategy using the dataset from Shiller's website. I used the data from 1960 forward to compare a fixed 60% stock 40% bond strategy to one where the stock might range from 25-75% based on the PE10 and momentum. As I tested the idea as I p...
by burma7734
Fri Jun 07, 2013 9:22 pm
 
Forum: Investing - Theory, News & General
Topic: yet another Tactical tilt recipe
Replies: 44
Views: 3547

Re: What's the right allocation to international bonds?

In other words, international stock markets can diverge from the US more than developed country international bond markets can. Counterargument (not checked): recent correlation has been about 0.9 ie very limited gains from developed country international diversification. I don't see the data to su...
by burma7734
Fri Jun 07, 2013 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: What's the right allocation to international bonds?
Replies: 39
Views: 2789

Re: yet another Tactical tilt recipe

Thanks for all the comments. Would like to add a few of my own: 1) A am not trying to "beat the market" as the funds and quants are trying to do. I can rebalance with no transaction cost or taxable gains within my 401k and IRA. I am trying to reduce volatility for my risk assets in the ext...
by burma7734
Sun Jun 02, 2013 9:41 pm
 
Forum: Investing - Theory, News & General
Topic: yet another Tactical tilt recipe
Replies: 44
Views: 3547

Re: 3-fund vs 4-fund approach (reason for a REIT fund)

You already own some REITS, about 3% of your Total Stock Market fund. So the question is if you want to add complexity and "tilt" toward higher REIT holding. REITS are subset of the stock asset class. And, REIT returns generally follow the Total Stock Market (0.7-0.9 correlation for the la...
by burma7734
Sat Jun 01, 2013 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: 3-fund vs 4-fund approach (reason for a REIT fund)
Replies: 22
Views: 1778

Re: What's the right allocation to international bonds?

I have 35% of my stocks in international holdings and currently 12% of my bonds. I have been holding some Roth IRA money to put into the new VTABX, which would bring me to 25% of bonds as international. Will you rebalance that 25% in international bonds as they go up and down? If so, how often or a...
by burma7734
Sat Jun 01, 2013 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: What's the right allocation to international bonds?
Replies: 39
Views: 2789

Re: What's the right allocation to international bonds?

Is there any evidence that investment quality foreign bond interest rates don't rise and fall in tandem with US bonds? Several people have asked that question. Does anyone know the answer? Here is a source that shows the correlation between International Bonds and US Bonds at 0.3, 0.0, 0.3 for 1, 3...
by burma7734
Sat Jun 01, 2013 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: What's the right allocation to international bonds?
Replies: 39
Views: 2789

Re: yet another Tactical tilt recipe

Yes, If PE10 were below 12, I would still tilt toward stocks. I wrestled with the idea of some sort of stock/bond comparison (like E/P yield vs AA ). But I am attempting to use my recipe to set only my risk asset allocation, regardless of relative performance of bonds. Factors like TIPS real yield, ...
by burma7734
Sat Jun 01, 2013 10:36 am
 
Forum: Investing - Theory, News & General
Topic: yet another Tactical tilt recipe
Replies: 44
Views: 3547

Re: Where Do Savings Bonds Fit Into Your Order Of Investing?

1) 401K up to the match 2) Roth IRA up to the max 3) 401K up to the max (assuming reasonable fund options - maybe not if 5%-load, 2% fee, but maybe) 4) I Bonds 5) EE Bonds (assuming you treat them as a potentially 20-year investment for the doubling) 6) Stocks & Municipal Bond Fund @ Vanguard m...
by burma7734
Fri May 31, 2013 9:43 pm
 
Forum: Investing - Theory, News & General
Topic: Where Do Savings Bonds Fit Into Your Order Of Investing?
Replies: 36
Views: 2830

yet another Tactical tilt recipe

I have read through several excellent threads 1 2 and thier linked references in an attempt to create a asset allocation "tilting" strategy {cough **market timing** cough}. But please indulge me. There is evidence for the persistence of extreme PE10 and momentum correlations to backtested ...
by burma7734
Fri May 31, 2013 8:44 pm
 
Forum: Investing - Theory, News & General
Topic: yet another Tactical tilt recipe
Replies: 44
Views: 3547

Re: Do you adjust your AA based on valuations?

I will never understand why folks use valuations. Vanguard itself did a paper that looked at a whole bunch of valuations as a forward predictor and the best of the lot was the heralded PE10 which gave a correlation of 0.41. That means using PE10 would have only predicted the direction of the market...
by burma7734
Sat May 11, 2013 12:35 am
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 94
Views: 5386

Re: I bond composite rate for May, 1.18%

I already maxed both the I bond ($10K + $5K tax return) and the EE ($10k) in April. I think they are two of the "least worst" fixed income options now, as long as you have a 20 year time horizon. Even if inflation starts to pick up in a few years, it is surprising how much return spread yo...
by burma7734
Wed May 01, 2013 3:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: I bond composite rate for May, 1.18%
Replies: 6
Views: 1360

Re: EE bonds - new rates?

So I went ahead and bought my $10k of EE bonds for the year, since there is no reason to expect the May rates will be anything significantly better and could well be worse. 3.5% semi-tax advantaged seems like one of the "least worst" bond options today, after maxing my Ibonds.
by burma7734
Wed Apr 03, 2013 12:13 am
 
Forum: Investing - Help with Personal Investments
Topic: EE bonds - new rates?
Replies: 8
Views: 1267

Re: Roth 401(k) versus 401(k) for high income investors?

I wrestled with this too and ultimately decided to split my 401k contribution - 30% to Roth 401k - just for some additional tax diversification. The Roth 401k assets are in Total Stock Market.
by burma7734
Tue Apr 02, 2013 12:26 pm
 
Forum: Investing - Theory, News & General
Topic: Roth 401(k) versus 401(k) for high income investors?
Replies: 44
Views: 4119

Re: EE bonds - new rates?

Thanks, interesting comments. I sort of assumed the 20 year doubling was somehow "sacred" but I guess that is naive.

Since I would be purchasing to achieve the 20 yr, 3.5% return, maybe I should go ahead and lock in now.
by burma7734
Tue Apr 02, 2013 10:26 am
 
Forum: Investing - Help with Personal Investments
Topic: EE bonds - new rates?
Replies: 8
Views: 1267

Re: Need to buy some bonds

For your first $10k, I think Ibonds are a one of the "least worst" bond options today. I put $10k in Ibonds this year, then going to put my next $10k in EE bonds.
by burma7734
Tue Apr 02, 2013 12:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Need to buy some bonds
Replies: 3
Views: 598

EE bonds - new rates?

When does the Treasury typically announce the new bond rates? With the current 0.20% on EE Bond through April 30, I assume it can't hurt to wait to see the new rates before investing my $10k. Is there anything that correlates to the EE rates? I am aware the fixed rate becomes meaningless if you hold...
by burma7734
Tue Apr 02, 2013 12:15 am
 
Forum: Investing - Help with Personal Investments
Topic: EE bonds - new rates?
Replies: 8
Views: 1267

Re: Buy Munis inside my Roth IRA?

Can't see that it makes any sense in a Roth account. You are paying a premium tax free status but not taking advantage of it. If you have filled up your tax-advantaged accounts with tax-inefficient assets (taxable bonds, REITs, commodities, etc), and you still need bonds to meet your desired stock/b...
by burma7734
Thu Mar 21, 2013 12:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buy Munis inside my Roth IRA?
Replies: 9
Views: 977

Re: Percent allocation to TIPS?

I am 0% TIPS, but been buying I-bonds at the annual limit the past three years. So they are about 26% of my bonds. For your first $10k (+$5k with tax return) per year, it seems I-bonds at 1.67% yield are the clearly better choice now than negative yield on TIPS for new money. Or am I missing somethi...
by burma7734
Tue Mar 05, 2013 2:46 am
 
Forum: Investing - Theory, News & General
Topic: Percent allocation to TIPS?
Replies: 25
Views: 4110

Re: bond portfolio optimization - stable value fund?

Thanks to both. I was just looking for a little affirmation of my choice of this stable value fund, as they don't seem to be talked about very much. With a current net yield at 3.5%, it seems to be a good place for safe money.
by burma7734
Mon Mar 04, 2013 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: bond portfolio optimization - stable value fund?
Replies: 5
Views: 579

bond portfolio optimization - stable value fund?

Thanks to Boglehead advise that I have been building a fixed income portfolio. I (36 yrs old) have a 30% non-stock allocation for my portfolio, but having trouble finding worthwhile assets in this environment. So my non-stock assets are: 26% I-bonds (already did the 10K + 5K tax refund this year) 14...
by burma7734
Sun Mar 03, 2013 11:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: bond portfolio optimization - stable value fund?
Replies: 5
Views: 579

Re: Nickeling and diming out of the HSA

I agree. Move your money to a new custodian if you don't like the fees. My employer has Fidelity as custodian so I can access all their funds commission free.... Looks like Vanguard is another option too.

https://personal.vanguard.com/us/whatwe ... lthsavings
by burma7734
Wed Jan 30, 2013 1:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Nickeling and diming out of the HSA
Replies: 29
Views: 1631

Re: Nickeling and diming out of the HSA

I have a new HSA, but was just planning to use it sort of as another IRA. Put my max in each year and pay my current expenses out of pocket. I did not appreciate sort of retroactive reimbursement you proposed, till I just answered my own question by reading the wiki http://www.bogleheads.org/wiki/HS...
by burma7734
Wed Jan 30, 2013 12:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Nickeling and diming out of the HSA
Replies: 29
Views: 1631

Re: REITS as a separate asset class?

If you have a Total International fund like VTIAX, you already have some exposure to international REITs at about 3% of that fund. Without belaboring the semantics, the point I have been trying to make is that REIT holdings are already part of the holdings of many funds including Total Market funds ...
by burma7734
Mon Jan 14, 2013 12:09 am
 
Forum: Investing - Theory, News & General
Topic: REITS as a separate asset class?
Replies: 49
Views: 8577

Re: REITS as a separate asset class?

1) correlation should not define an asset class 2) Why compare a US REIT index to 23 country developed market index? I could pull out several baskets of US stocks that have low correlation to this index, but that does not mean they are a unique asset class. REIT is not unique from the total equity m...
by burma7734
Sun Jan 13, 2013 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: REITS as a separate asset class?
Replies: 49
Views: 8577

Re: REITS as a separate asset class?

Remember most real estate investment is not traded on the stock market. Therefore the amount of REITs you see in TSM is much less than the true weight in TM (Total Market). That is the essence of the argument to overweight the REIT sector. Since total equity capitalization of REITs is only fraction...
by burma7734
Sat Jan 12, 2013 11:44 pm
 
Forum: Investing - Theory, News & General
Topic: REITS as a separate asset class?
Replies: 49
Views: 8577

Re: REITS as a separate asset class?

Thanks for the Swedroe article. Sure, REIT can be a good sector for tactical asset allocation, as could utility stocks, or consumer discretionary. It just does not seem they should be regarded as a separate asset class. I thought I was purchasing something different in VNQ that was not covered by th...
by burma7734
Sat Jan 12, 2013 3:15 pm
 
Forum: Investing - Theory, News & General
Topic: REITS as a separate asset class?
Replies: 49
Views: 8577

Re: Calculator for Roth vs traditional 401(k) contributions?

I went through a similar evaluation for myself recently http://www.bogleheads.org/forum/viewtopic.php?f=1&t=108423 I found this site to be very helpful with the case for an against a calculating your needed tax spread for either case to bring benefit http://thefinancebuff.com/case-against-roth-4...
by burma7734
Sat Jan 12, 2013 2:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Calculator for Roth vs traditional 401(k) contributions?
Replies: 1
Views: 600

Re: REITS as a separate asset class?

I wanted to kick this old thread back up because I learned a valuable lesson today. I had been under the mistaken impression that holding a REIT index (VNQ) gave me exposure to an asset class that was not captured by the Total market index. However, as I have read several threads here and the wiki a...
by burma7734
Sat Jan 12, 2013 3:08 am
 
Forum: Investing - Theory, News & General
Topic: REITS as a separate asset class?
Replies: 49
Views: 8577

Re: S&P500 Index vs. Total Stock Market Index

The Extended Market fund is the completion fund for the SP 500 to give you mid and small caps and exposure to the total US equity market. http://www.bogleheads.org/wiki/Extended_Market_Index_Fund 80% SP 500 + 20% Extended Market = US Total Market This is what I have in my 401k since I don't have a t...
by burma7734
Fri Jan 11, 2013 3:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: S&P500 Index vs. Total Stock Market Index
Replies: 9
Views: 1442

Re: 401(k): Roth or Traditional?

The question of roth versus traditional comes down to one thing, and that has to do with what do you believe about the future. If you think you will be in a higher tax bracket later, roth the 401k, otherwise go the traditional route. No, it is more complicated than that. As I noted above, there is ...
by burma7734
Tue Jan 08, 2013 1:18 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k): Roth or Traditional?
Replies: 8
Views: 1310

EE Bonds - break even scenarios

I will max out my primary investment choices: 401k, rIRA (backdoor), I-bonds ($10k + $5k tax return) this year, and expect to have another $10k to invest in the bond side of my portfolio. I have 18% of my bonds in Emerging (FNMIX) for a little yield chasing, but don't want to push that any higher. I...
by burma7734
Mon Jan 07, 2013 9:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: EE Bonds - break even scenarios
Replies: 15
Views: 1745

Re: 401(k): Roth or Traditional?

This discussion has got me to really look at my decision about r401k vs t401k. I realize my original idea for maxing r401k contribution that "saving more is good" is not a complete picture. I found this article particularly helpful for my situation, where I am maxing 401k and backdoor roth...
by burma7734
Mon Jan 07, 2013 8:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k): Roth or Traditional?
Replies: 8
Views: 1310

Re: 401(k): Roth or Traditional?

I am putting my 401k contributions into Roth since it was offered by my employer last year. I max out my 401k and Roth (backdoor) contributions each year, so for me, I am saving more by contributing to the Roth. Similar to the OP, I hope to retire early and can use either rIRA or r401k principle con...
by burma7734
Mon Jan 07, 2013 12:41 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k): Roth or Traditional?
Replies: 8
Views: 1310
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