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by convert949
Fri Feb 20, 2015 4:54 pm
Forum: Investing - Theory, News & General
Topic: What is Risk?
Replies: 27
Views: 1551

Re: What is Risk?

The riskiness of an investment is not measured by beta (a Wall Street term encompassing volatility and often used in measuring risk) but rather by the probability – the reasoned probability – of that investment causing its owner a loss of purchasing-power over his contemplated holding period. Asset...
by convert949
Wed Feb 04, 2015 1:52 pm
Forum: Investing - Theory, News & General
Topic: Somewhat different approach to asset allocation
Replies: 12
Views: 978

Re: Somewhat different approach to asset allocation

I have seen a number of articles for financial planners that take a somewhat more casual approach than Bernstein but still follows the basic idea. Have short term assets for short term needs, bonds for intermediate term needs and equities/TIPS/I Bonds for longer term needs where inflation is more of...
by convert949
Fri Jan 30, 2015 9:06 am
Forum: Investing - Theory, News & General
Topic: Mr. Bogle on CNBC today--International and Bonds
Replies: 50
Views: 6789

Re: Mr. Bogle on CNBC today--International and Bonds

jnet2000 wrote:Mr. Bogle makes a good case. But I plan to stay the course and keep no more than 20% of my stock allocation in International stocks. I don't agree with everything Vanguard recommends either and plan to stay the course and not invest in International Bonds. Thanks for sharing.

+1
by convert949
Fri Jan 30, 2015 8:53 am
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 79
Views: 4813

Re: The lowest stock allocation you plan to stay with

Currently 65 YO and at 35% equity. Will consider 30% at 70. Can't see going lower than that...
by convert949
Thu Jan 29, 2015 12:02 pm
Forum: Investing - Theory, News & General
Topic: Why not a 2 fund portfolio like Bogle suggests
Replies: 36
Views: 4153

Re: Why not a 2 fund portfolio like Bogle suggests

Part of me wonders if some people would benefit from a 2 or 3 fund portfolio but they have spent so many hours researching investment strategies that they will feel they wasted their time if they choose something so simple. My only comment is that the more I read, researched and followed the forum,...
by convert949
Wed Jan 28, 2015 8:35 am
Forum: Investing - Help with Personal Investments
Topic: Short Term TIPS vs. Intermediate Term Funds
Replies: 8
Views: 1003

Re: Short Term TIPS vs. Intermediate Term Funds

convert949 in this post wrote: [ I ] have always followed Larry Swedroe's advice to look for 20 basis points per year of duration as a way of determining the relative risk/return of short/intermediate bond funds. By that definition, the short term fund would be advantageous as it has the same SEC y...
by convert949
Tue Jan 27, 2015 2:40 pm
Forum: Investing - Help with Personal Investments
Topic: Short Term TIPS vs. Intermediate Term Funds
Replies: 8
Views: 1003

Re: Short Term TIPS vs. Intermediate Term Funds

I was comparing the performance of short vs. intermediate term TIPS. Anyone understand what is happening with short term TIPS? Update - I guess it is all period dependent. I went all the back to the start of the ST TIPS fund (10/2012). Going back to that VTIP is down -2.75%. But VAIPX is down -10.1...
by convert949
Tue Jan 27, 2015 12:02 pm
Forum: Investing - Help with Personal Investments
Topic: Short Term TIPS vs. Intermediate Term Funds
Replies: 8
Views: 1003

Re: Short Term TIPS vs. Intermediate Term Funds

TIPS are different, and Swedroe discusses this in his books and posts. At a given yield curve, you normally go out further in duration with TIPS than with nominals. Or to put it in very crude terms, a 10-year TIPS occupies more or less the same niche as a 5-year nominal. Understood... But it would ...
by convert949
Tue Jan 27, 2015 10:26 am
Forum: Investing - Help with Personal Investments
Topic: Short Term Bonds in Taxable
Replies: 6
Views: 1110

Re: Short Term Bonds in Taxable

Hi. I know that bond funds are not tax efficient and should, in general, be kept in tax-advantaged accounts. However, I currently have both VG Short Term Investment Grade (1.70% yield) and Limited Term Tax Exempt (0.86% yield) in my taxable account. I am holding these for a shorter term savings hor...
by convert949
Tue Jan 27, 2015 8:54 am
Forum: Investing - Help with Personal Investments
Topic: Short Term TIPS vs. Intermediate Term Funds
Replies: 8
Views: 1003

Re: Short Term TIPS vs. Intermediate Term Funds

cb474 wrote: In principle, the intermediate term fund will provide a greater return over the long run, but be more volatile, and the short-term fund with provide less return over the long run, but be less volatile. Other bogleheads I'm sure could offer a more sophisticated analysis of the distincti...
by convert949
Tue Jan 27, 2015 7:58 am
Forum: Investing - Help with Personal Investments
Topic: Short Term TIPS vs. Intermediate Term Funds
Replies: 8
Views: 1003

Short Term TIPS vs. Intermediate Term Funds

Some time ago, I ventured into TIPS with a portion of our retirement accounts. We put 2/3 into the intermediate term fund VAIPX and 1/3 in the Short Term Index VTAPX. The split was across two accounts and the purpose was to take advantage of Admiral Shares for both purchases as well as to shorten th...
by convert949
Fri Jan 16, 2015 12:17 pm
Forum: Investing - Theory, News & General
Topic: Valuation of I Bonds
Replies: 29
Views: 3203

Re: Valuation of I Bonds

Basically Market Timer demonstrated that an EE bond was roughly a 20 year zero coupon bond with a put option. Basically, the doubling caused a increased present value (PV) of the EE bonds relative to the 20 year zero coupon treasury, plus the PV of the EE bond is further increased by the put option...
by convert949
Thu Jan 15, 2015 8:48 am
Forum: Investing - Theory, News & General
Topic: Diversification... Alternate Theory?
Replies: 11
Views: 1501

Re: Diversification... Alternate Theory?

Several years ago I read about Quantext, downloaded it and tried it out. I learned some things but did not fully use it. So much emphasis on correlations, the big standout disagreement I had was that the correlations change meaningfully over time. I must allow for the possibility that my impression...
by convert949
Wed Jan 14, 2015 9:57 am
Forum: Investing - Theory, News & General
Topic: Diversification... Alternate Theory?
Replies: 11
Views: 1501

Re: Diversification... Alternate Theory?

So if adding international does not improve the math, but eliminates country/ geographical risk there is still a very GOOD reason to diversify into other countries despite what an equation or computer software tells you. U.S. equity returns have been robust to say the least the last 50+ years. Are ...
by convert949
Mon Jan 12, 2015 11:20 am
Forum: Investing - Theory, News & General
Topic: Diversification... Alternate Theory?
Replies: 11
Views: 1501

Re: Diversification... Alternate Theory?

There's no theory here except possibly in the 2006 article briefly mentioned. Here there's nothing but handwaving the technical details so there's no way to get a sense of what the numbers mean in the diversification metric beyond just the qualitative overview. I tried to search for how it was comp...
by convert949
Mon Jan 12, 2015 10:46 am
Forum: Investing - Theory, News & General
Topic: We miss Larry Swedroe
Replies: 28
Views: 7603

Re: We miss Larry Swedroe

Grt2bOutdoors wrote:
RunningRad wrote:Count me in as a fan of Larry and his work.


Same here. :sharebeer

+1

Just finished re-reading Larry's bond book on the way to Florida...
by convert949
Mon Jan 12, 2015 10:44 am
Forum: Investing - Theory, News & General
Topic: How much in I bonds do you own?
Replies: 29
Views: 3249

Re: How much in I bonds do you own?

Have about $140K and buying max each year in individual and trust accounts. I like them better than TIPS...
by convert949
Mon Jan 12, 2015 10:36 am
Forum: Investing - Theory, News & General
Topic: Diversification... Alternate Theory?
Replies: 11
Views: 1501

Diversification... Alternate Theory?

I have been using an Excel based Monti Carlo Simulator called Quantext for some time to supplement other information available on the forum, books, etc. What I like about it is the ability to test changes in portfolio design based on the specific performance of actual fund (yes, I understand the lim...
by convert949
Sat Jan 03, 2015 12:44 pm
Forum: Investing - Help with Personal Investments
Topic: Do I have too much in Municipal Bond Funds?
Replies: 4
Views: 614

Re: Do I have too much in Municipal Bond Funds?

My primary concern with your portfolio is an unrelated matter. You have annuities; are they inflation-adjusted? If not, then you have considerable inflation risk, and thus most of your bonds should be inflation-adjusted. You have, and should continue to buy, I-Bonds, but beyond the I-Bond limit, yo...
by convert949
Sat Jan 03, 2015 9:09 am
Forum: Investing - Help with Personal Investments
Topic: Do I have too much in Municipal Bond Funds?
Replies: 4
Views: 614

Do I have too much in Municipal Bond Funds?

Having just finished my year end re-balancing of my equity holdings, I am now reviewing my bond allocations. I prefer to hold funds with the exception of I Bonds and an online Savings Account with 2-3 years cash expenses (I am 65 and retired). Our current Portfolio is as follows: SEP IRA's: Total Bo...
by convert949
Tue Dec 30, 2014 8:00 am
Forum: Investing - Theory, News & General
Topic: Munis: intermediate vs. (intermediate plus limited)
Replies: 10
Views: 1836

Re: Munis: intermediate vs. (intermediate plus limited)

I do use both in taxable with VMLUX (VMLTX Admiral) and VWIUX (VWITX Admiral) in amounts determined by when I might need the money. I keep 2 years expenses in an online savings account and 2-3 years in short term bonds. The balance is in intermediate term bonds. Full disclosure, I also own Short Ter...
by convert949
Mon Dec 29, 2014 6:41 am
Forum: Investing - Theory, News & General
Topic: Retiree Poll:What is your current AA?
Replies: 85
Views: 7251

Re: Retiree Poll:What is your current AA?

Currently 38/44/18 Stock/Bond/Cash. Cash includes I bonds. :sharebeer
by convert949
Thu Dec 11, 2014 9:31 am
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

In other words, if you have enough set aside in very safe assets to provide for your expenses until approximately age 100 (aka liability matching portfolio), then you can do whatever you want with the rest, including putting all of the excess into equities. I'm concerned that people who don't have ...
by convert949
Wed Dec 10, 2014 5:07 pm
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

I am a continuous campaigner that one should invest for total return, that dividends are nothing special. No better, no worse (taxes aside) from other equity returns. To be consistent, I then have to say that dividends cannot be relied on for income any more than capital appreciation can. Don't you...
by convert949
Tue Dec 09, 2014 6:07 pm
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

I don't think an LMP discussion would be talking about dividends from stocks. After some thought, I have to agree strongly with what you say here. L. The reason I asked the question is that I recall reading that the 25 year (or so) safe portfolio would be decided upon after taking your income into ...
by convert949
Tue Dec 09, 2014 1:45 pm
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

One additional question not asked as of yet... I have all of the dividends from my taxable accounts deposited into my checking account each month/quarter. This reduces my need to tap principle in my investment accounts. In looking at 25 years of safe assets, should one consider your annual need from...
by convert949
Tue Dec 09, 2014 8:21 am
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

My AA is a result of my plan, it does not drive it.L. Isn't this the core argument for any version of an LMP or Bucket approach? The only difference (edit: in the amount of safe assets) is how much time you give the market to recover. You have chosen 6 years, Christine Benz from Morningstar likes 1...
by convert949
Mon Dec 08, 2014 12:19 pm
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

If I can arrange my portfolio dynamically so that I shrink the risk of a big drop just prior to retirement and lower the risk of running out at the end, all while not reducing long-term expected return (even probably getting a little bonus), then that's compelling to me. Pfau and Kitces framed thei...
by convert949
Mon Dec 08, 2014 8:35 am
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

I think Bernstein does a better job explaining the logic than Pfau and Kitces did. It remains very compelling to me. Why is it compelling when the data are so weak? All they have shown, if you look at their results, is that a rising glide slope is virtually indistinguishable from a constant allocat...
by convert949
Mon Dec 08, 2014 8:13 am
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

I think Bernstein does a better job explaining the logic than Pfau and Kitces did. It remains very compelling to me. Bernstein is an excellent writer and this piece is clear and straightforward, helping me to understand the choices. He always adds a little humor here and there, such as in this summ...
by convert949
Sun Dec 07, 2014 10:01 am
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

If you want to think about risk in retirement think March 6, 2009. The S&P500 touched 666 on that day and has run 1400+ points since. What would be the impact to your life and your retirement if that course reversed itself over the next 5 years? Think liability matching, think annuities and FI ...
by convert949
Sun Dec 07, 2014 9:16 am
Forum: Investing - Theory, News & General
Topic: How to Think About Risk in Retirement - Bernstein
Replies: 64
Views: 9930

Re: How to Think About Risk in Retirement - Bernstein

Bonds / LMP: three choices—an inflation-adjusted annuity, TIPS ladder or short-bond portfolio—or any combination of them would match the retiree’s annual needs well, because they all provide a known stream of income and principal over the years. Is it safe to assume that a short term bond portfolio...
by convert949
Wed Nov 19, 2014 7:24 pm
Forum: Investing - Theory, News & General
Topic: Assets for Liability Matching Portfolio?
Replies: 24
Views: 1954

Re: Assets for Liability Matching Portfolio?

A more positive point of view is to think of liability matching as a way to know how much you can afford to put into your risky portfolio -- after coverage of basic needs are addressed. Even with a large portfolio this can ensure you don't risk too much and stumble. Kinda like putting Plan B into e...
by convert949
Wed Nov 19, 2014 3:58 pm
Forum: Investing - Theory, News & General
Topic: Assets for Liability Matching Portfolio?
Replies: 24
Views: 1954

Re: Assets for Liability Matching Portfolio?

A "risk" portfolio in this context can contain any balance of risky and less risky assets that the investor chooses. There are major semantic issues going on when starting a discussion around the liability matching portfolio concept. Indeed... Originally, I had considered these other non-...
by convert949
Wed Nov 19, 2014 3:28 pm
Forum: Investing - Theory, News & General
Topic: Assets for Liability Matching Portfolio?
Replies: 24
Views: 1954

Re: Assets for Liability Matching Portfolio?

To clarify, I am not trying to construct a formal "ladder" so the timing of the sale of these assets would be flexible. I am, however, trying to establish a baseline for what an appropriate "risk portfolio" might be for my particular situation. Thanks in advance for your help an...
by convert949
Wed Nov 19, 2014 10:24 am
Forum: Investing - Theory, News & General
Topic: Assets for Liability Matching Portfolio?
Replies: 24
Views: 1954

Re: Assets for Liability Matching Portfolio?

Ran across this thread while "surfing" for info on LMP construction. One thought I had that is particular to my situation is the use of "non-investment" assets as a part of LMP planning. In particular, I own real estate other than my primary residence in the form of an income pro...
by convert949
Wed Oct 29, 2014 6:20 am
Forum: Personal Finance (Not Investing)
Topic: How much do you keep in bucket one for those that use the
Replies: 7
Views: 1374

Re: How much do you keep in bucket one for those that use th

the stock market surpassed its 1929 precrash high in March 1937 — 7½ years later I was thinking of this much or more so I could sleep well at night. If you have 7.5 years in bucket one should you be able to put all your other money in the market would that be safe? Personal choice but don't think y...
by convert949
Sun Oct 26, 2014 9:51 am
Forum: Personal Finance (Not Investing)
Topic: Bucket Approach Redux
Replies: 35
Views: 3211

Re: Bucket Approach Redux

This was brought up in a panel discussion with Benz and others at BH 13. I was a little surprised that no one really objected to it. Someone sent in a question comparing a safe withdrawal rate, liability matching and bucket approach. That would be me... I posted a similar question on the forum just...
by convert949
Tue Oct 21, 2014 5:41 am
Forum: Personal Finance (Not Investing)
Topic: POLL: How fulfilling is your retirement?
Replies: 34
Views: 3137

Re: POLL: How fulfilling is your retirement?

exoilman wrote:
Toons wrote:Life is what you make it,whether retired or not ,it was great before retirement and it is great in retirement.I am content :happy


operative word, content. Same here :happy

+1 :sharebeer
by convert949
Mon Oct 20, 2014 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Help me choose... [Retirement withdrawal strategy]
Replies: 12
Views: 1347

Re: Help me choose... [Retirement withdrawal strategy]

Retiree here... Just finished reconfiguring my portfolio for the next 30 years having just turned 65. SS and SPIA's will cover my "basic" needs (about 60% of current expenses). I am withdrawing about 3.5% of our portfolio annually to support the balance of our current expenses. Bernstein'...
by convert949
Mon Oct 20, 2014 6:58 am
Forum: Personal Finance (Not Investing)
Topic: Help me choose... [Retirement withdrawal strategy]
Replies: 12
Views: 1347

Re: Help me choose... [Retirement withdrawal strategy]

I guess the thirds' comes closest for me. But, I like WM Bernstein's idea of putting more emphasis on securing your retirement as the main focus. First put 20-25 years of your anticipated retirement drawdown needs in "safe" products. e.g. short term bonds/funds, CDs, etc. and then invest ...
by convert949
Sun Oct 19, 2014 7:57 am
Forum: Personal Finance (Not Investing)
Topic: Help me choose... [Retirement withdrawal strategy]
Replies: 12
Views: 1347

Help me choose... [Retirement withdrawal strategy]

Retiree here... Just finished reconfiguring my portfolio for the next 30 years having just turned 65. SS and SPIA's will cover my "basic" needs (about 60% of current expenses). I am withdrawing about 3.5% of our portfolio annually to support the balance of our current expenses. Going forwa...
by convert949
Sun Oct 12, 2014 3:08 pm
Forum: Investing - Help with Personal Investments
Topic: Are Savings Bonds Considered Cash?
Replies: 16
Views: 1125

Re: Are Savings Bonds Considered Cash?

Quick question... I have $30k in I and EE Savings Bonds my Grandma bought for me 30 years. Paying about 4-5% yield. Should those be considered part of our emergency fund or are they part of the 20% bonds I plan to keep in my investment portfolio? Thank you! Bogleboy Depends... I would choose one of...
by convert949
Wed Oct 08, 2014 8:44 am
Forum: Investing - Help with Personal Investments
Topic: I Bonds in Trust (Applicable Limits)
Replies: 7
Views: 888

Re: I Bonds in Trust (Applicable Limits)

Not sure of how it might affect limits but you can have your estate re-title the I bonds to the trusts after your passing. My wife and I have provided for this by having any assets in our individual names flow to the trust upon our death. I have a similar situation with my dad... He has some of his ...
by convert949
Sat Sep 27, 2014 1:41 pm
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 5759

Re: Why not 100% CD's?

The529guy, thanks for the links, but I'd already read those and, unless I missed it, there's nothing in there about whether individuals can buy the maximum annual amount of ibonds with their own social security number (say $20k), and then in the same year buy an additional $20k with their trust tha...
by convert949
Sat Sep 27, 2014 10:59 am
Forum: Investing - Help with Personal Investments
Topic: Why not 100% CD's?
Replies: 73
Views: 5759

Re: Why not 100% CD's?

My dad, at 88 has all his assets in FDIC banks. Earlier, at my age (65) he dabbled in individual stocks. In my opinion, the rules at 65 are different than the rules at 88. The rules also change over time... The fixed income he had at 65 was paying 4-6% (much of it in Savings Bonds). If it were not f...
by convert949
Sun Aug 10, 2014 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: MAGI for Medicare Rates
Replies: 36
Views: 2171

Re: MAGI for Medicare Rates

Deleted by OP... Never Mind...
by convert949
Sun Aug 10, 2014 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: MAGI for Medicare Rates
Replies: 36
Views: 2171

Re: MAGI for Medicare Rates

Your MAGI is your adjusted gross income as used on line 37 of IRS form 1040 plus your tax-exempt interest income as used on line 8b of IRS form 1040. P.S. Stop reading household names. Good advice sscritic... Thanks again (I posted previously on IRMAA and you were a great help). At that time, you a...
by convert949
Sun Aug 10, 2014 11:05 am
Forum: Personal Finance (Not Investing)
Topic: MAGI for Medicare Rates
Replies: 36
Views: 2171

MAGI for Medicare Rates

Good Morning, I am looking for help in getting a definitive answer about what is included in a retiree's MAGI calculation for Medicare. I have a "one year" penalty ahead for 2014 as I restructure my portfolio at 65. I am aware that I am already in the penalty area due to the necessity to t...
by convert949
Sat Jul 05, 2014 10:58 am
Forum: Investing - Theory, News & General
Topic: Bond Distributions
Replies: 6
Views: 653

Re: Bond Distributions

⋅ YTM corresponds to SEC Yield for a bond fund except it is before deducting expenses. ⋅ Current yield equals interest divided by price and corresponds to "Distribution Yield" for a bond fund. ⋅ The fall in price corresponds to a fall in Net Asset Value per s...

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