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Re: Why do Engineers Think They’ll Be Good at Picking Stocks

I think my background and experience in engineering directs me against stock picking rather than toward it. I admit I have seen colleagues behave exactly as in the blog, but that baffles me. I have seen more of my colleagues who would not attempt to pick stocks. Maybe for me engineering was always h...
by dbr
Sat Oct 25, 2014 11:54 am
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 117
Views: 7140

Re: BlackRock Strategic Income Opportunities Fund

Aside from the pluses or (mostly) minuses of this particular fund, I would be concerned about what causes you to think you need to explore more than what you are already invested in. Is there a standing problem in your portfolio that needs to be addressed? There is basically no such thing as an &quo...
by dbr
Sat Oct 25, 2014 11:40 am
 
Forum: Investing - Theory, News & General
Topic: BlackRock Strategic Income Opportunities Fund
Replies: 12
Views: 765

Re: My TSP G Fund is not Enough! What other Bonds?

dbr : Oh, I think you're giving me too much credit. I'm an engineer, not a statistician. What bothers me about Max Tolerant Loss is that investors don't state a confidence level. I probably should have said "high level of confidence" rather than 95%. I always thought the following table f...
by dbr
Sat Oct 25, 2014 11:21 am
 
Forum: Investing - Help with Personal Investments
Topic: My TSP G Fund is not Enough! What other Bonds?
Replies: 17
Views: 1208

Re: Conflicting home inspection reports

I would look for a house that doesn't have problems like this. Is there a particular reason you are locked in in this specific house? Are you restricted to an area where pretty much everyone is subject to these hazards due to climate and soil conditions? As far as costs, I don't have much experience...
by dbr
Sat Oct 25, 2014 10:19 am
 
Forum: Personal Consumer Issues
Topic: Conflicting home inspection reports
Replies: 5
Views: 556

Re: Vanguard Short Term Bond vs TIPS?

I personally think a retiree whose income structure indicates reason to be concerned with inflation could, maybe should, have much or all of the bond asset in TIPS. An example of that is a person with much of the income from a fixed pension or non-indexed SPIA. I personally think the Vanguard funds ...
by dbr
Sat Oct 25, 2014 9:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Short Term Bond vs TIPS?
Replies: 3
Views: 552

Re: Phone for Europe trip

The problem is that the locals still have to dial a US number to reach you by cell/text, and that tends to cost them much money (and I believe I will still pay the relatively low T-mobile roaming fees on top - not certain about that). Not an issue if you don't need to be called when abroad, but I u...
by dbr
Sat Oct 25, 2014 9:36 am
 
Forum: Personal Consumer Issues
Topic: Phone for Europe trip
Replies: 23
Views: 1140

Re: My TSP G Fund is not Enough! What other Bonds?

My IPS calls for an Asset Allocation (AA) of 75% Stocks / 25% Bonds . Rationale: My max tolerable loss is ~33% . More specifically, I want 95% certainty (two sigma) of not exceeding that loss in the next 10 years. I have somewhat high tolerance for risk. I have the ability and willingness to take a...
by dbr
Sat Oct 25, 2014 9:31 am
 
Forum: Investing - Help with Personal Investments
Topic: My TSP G Fund is not Enough! What other Bonds?
Replies: 17
Views: 1208

Re: Vanguard, TIPs, Accrued Interest & RMDs

I think I found the answer to my question in Pub 550 The following paragraph covers the treatment of TIPs in a taxable account, but I think it is reasonable to apply it to when interest is constructively received for valuing a retirement account. "Inflation-Indexed Debt Instruments If you hold...
by dbr
Sat Oct 25, 2014 9:06 am
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard, TIPs, Accrued Interest & RMDs
Replies: 13
Views: 897

Re: is optimization(TLH+tax credit) worth cost(time,behavior

We also have a large carryover loss in the 6=figure range. Even so, we still TLH whenever possible because this will help us shift income into years when our tax rate is very low. Yes, it has a chance of not making any difference, but we cannot predict that. I'd rather have booked the loss in a yea...
by dbr
Fri Oct 24, 2014 3:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: is optimization(TLH+tax credit) worth cost(time,behavior)?
Replies: 14
Views: 879

Re: Athens and London, what to do and where to stay?

I understand about 11 days being short but this is the middle of a 6+ week trip where we end up in Athens and next have to leave from London. Since you will be in Athens first you should be OK if there is a strike or some other disruption. Unless you will be really jet lagged it might be best to sp...
by dbr
Fri Oct 24, 2014 3:10 pm
 
Forum: Personal Consumer Issues
Topic: Athens and London, what to do and where to stay?
Replies: 32
Views: 1335

Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

I doubt that statements made in sound bite context to the media that one should buy an S&P 500 fund are meant to be statements that one should buy an S&P 500 fund but not a TSM fund. Did we hear Mr. Buffett state that he had instructed his trustees to buy the S&P 500 but at all costs to ...
by dbr
Fri Oct 24, 2014 11:47 am
 
Forum: Investing - Theory, News & General
Topic: "Jack Bogle on Warren Buffett, Bill Gross and How to Invest"
Replies: 14
Views: 1886

Re: Vanguard, TIPs, Accrued Interest & RMDs

Of course, what you, I, or anyone else thinks has nothing to do with what the IRS, and the law, actually does. I have never seen a note anywhere that the asset value of a bond fund at the end of the reporting period is to be adjusted for accrued interest for purposes of calculating the RMD. If such ...
by dbr
Fri Oct 24, 2014 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard, TIPs, Accrued Interest & RMDs
Replies: 13
Views: 897

Re: 2nd Opinions on Bond Alternatives?

You are talking to people who are trying to sell you a bill of goods in order to enrich themselves.

Why are you talking to these guys?
by dbr
Fri Oct 24, 2014 11:00 am
 
Forum: Investing - Help with Personal Investments
Topic: 2nd Opinions on Bond Alternatives?
Replies: 35
Views: 2127

Re: Should I Sue?

If you are saying the damage was from water pooling on the floor because the drainage was wrong and you lost a $7500 couch as a consequence, then I would say the negligence was yours. No basement or garage should be assumed to be immune to water on the floor during rainstorms and a reasonable person...
by dbr
Fri Oct 24, 2014 10:54 am
 
Forum: Personal Consumer Issues
Topic: Should I Sue? [couch damaged in garage of rental]
Replies: 39
Views: 2964

Re: investing during retirment

Withdrawing money from a portfolio has nothing to do with trying to engineer some kind of array of dividend and interest payments from holdings. Trying to do that is awkward, unnecessary, and may even result in distorted investment decisions. That does not mean that distributions from investments th...
by dbr
Fri Oct 24, 2014 10:27 am
 
Forum: Investing - Help with Personal Investments
Topic: investing during retirment
Replies: 20
Views: 1988

Re: Athens and London, what to do and where to stay?

In London if you want clean cheap newish no frills and centrally located then I would look into Premier Inn (they have a couple locations-- Blackfriars and County Inn are a couple of them). They are almost like a grown up hostel/dorm-- not a lot of charm (although friendly service) but perfectly ad...
by dbr
Fri Oct 24, 2014 10:19 am
 
Forum: Personal Consumer Issues
Topic: Athens and London, what to do and where to stay?
Replies: 32
Views: 1335

Re: Phone for Europe trip

Do you need a different SIM card for a different European country? Yes, if you want a number in that country. There are also services such as Telestial than give you a UK and a US number that works almost everywhere in the world (not Japan) on a quad band phone but means people calling you in the c...
by dbr
Fri Oct 24, 2014 10:06 am
 
Forum: Personal Consumer Issues
Topic: Phone for Europe trip
Replies: 23
Views: 1140

Re: is optimization(TLH+tax credit) worth cost(time,behavior

If one TLH'd effectively during the big downturn one will be enjoying a small tax windfall every year for a couple of decades. People that didn't avail themselves at the time can still pay attention to whatever opportunities arise. In my own situation I now have a huge carryover capital loss and hug...
by dbr
Fri Oct 24, 2014 9:50 am
 
Forum: Investing - Help with Personal Investments
Topic: is optimization(TLH+tax credit) worth cost(time,behavior)?
Replies: 14
Views: 879

Re: Time For Me to Kick Wellington Through The Goalpost of L

Rats!! I hate it when I have to eat crow... I re-checked and found I'd omitted a couple of transactions from my XIRR calculation and the more-sharp-eyed Bogleheaders (than me) are correct. Wellington has done better... my experiment will have to continue for awhile longer... :oops: Except of course...
by dbr
Fri Oct 24, 2014 9:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Time For Me to Kick Wellington Through The Goalpost of Life?
Replies: 43
Views: 4410

Re: Do all mutual funds have 12b-1 fees?

I am of the view that being ignorant of the fundamentals of your profession while giving advice in a professional capacity is effectively criminal and should be prosecuted with jail time.
by dbr
Fri Oct 24, 2014 9:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Do all mutual funds have 12b-1 fees?
Replies: 23
Views: 1330

Re: Athens and London, what to do and where to stay?

In Athens the obvious sites are the National Archeological Museum and the Acropolis/Parthenon. There are others. Beware that museum schedules are changing and uncertain. The "charming" area in Athens is Plaka, which has some nice smaller hotels, tends to the tourist boutique style, but is ...
by dbr
Fri Oct 24, 2014 9:32 am
 
Forum: Personal Consumer Issues
Topic: Athens and London, what to do and where to stay?
Replies: 32
Views: 1335

Re: Bond exposure in my portfolio

There are lots of good reasons in support of keeping bonds to a diversified set of intermediate duration bonds on average. People can make credible arguments that bonds should be kept even to short durations, or use CD's, stable value funds, etc. The problem in these discussions is there is an almos...
by dbr
Fri Oct 24, 2014 9:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond exposure in my portfolio
Replies: 7
Views: 620

Re: Calculating return

XIRR gives a result that is theoretically NOT comparable to the return of other portfolios. You are correct that XIRR gives the result not for how a portfolio has behaved but for what outcome a certain investor has gotten investing in a certain portfolio. That can't be compared to the result gotten...
by dbr
Fri Oct 24, 2014 8:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 24
Views: 1751

Re: Why is VIPSX (TIPS) active?

As was stated a few hundred years ago, "Much ado about nothing". :D Not quite. Because it's an 'active" fund, the admiral threshold it $50k. If it were an index fund it would be $10K, and there could be an ETF share class. I'm sure there are people to whom this would make a differenc...
by dbr
Tue Oct 21, 2014 9:03 am
 
Forum: Investing - Theory, News & General
Topic: Why is VIPSX (TIPS) active?
Replies: 17
Views: 1243

Re: Why not 100% Stocks?

That's why I like the Need, Ability, and Willingness to take risk approach to selecting one's investment portfolio Asset Allocation. You could rationally chose to be 100% in stocks (in your investment portfolio) if you have the the ability to do so (through owning your house and having a pension, f...
by dbr
Mon Oct 20, 2014 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 20595

Re: "I've had it" at work - how often

Basically never at that extreme, although I did make a couple of moves from one employer to another, and into retirement. That doesn't mean everything glorious day after day anywhere.
by dbr
Mon Oct 20, 2014 9:14 am
 
Forum: Personal Finance (Not Investing)
Topic: "I've had it" at work - how often
Replies: 151
Views: 12365

Re: Switching Medigap Policies - Confused

I would suggest calling whatever insurance companies you might be considering and ask.
by dbr
Fri Oct 17, 2014 10:14 am
 
Forum: Personal Finance (Not Investing)
Topic: Switching Medigap Policies - Confused
Replies: 4
Views: 306

Re: Dry Powder

Isn't that what bonds and rebalancing were designed for? I don't get it Right, that is where the false analogy comes in. What is both Stocks and Bonds are down? Have we never seen such a scenario? There is possibility that it might happen. Rebalancing happens if one is down more than the other. It ...
by dbr
Thu Oct 16, 2014 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3523

Re: Using a Lump Sum Pension to buy Real Estate: 2 Options

The scenario of whether or not to take a lump sum pension and/or what to do with the lump sum is not an uncommon question for people. I suspect the idea of treating this as a kind of windfall opportunity to pay taxes and invest in a high risk investment is not the usual one. With Option 2, it might ...
by dbr
Thu Oct 16, 2014 12:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Using a Lump Sum Pension to buy Real Estate: 2 Options
Replies: 5
Views: 323

Re: Dry Powder

Chan_va wrote:Isn't that what bonds and rebalancing were designed for? I don't get it


Right, that is where the false analogy comes in.
by dbr
Thu Oct 16, 2014 10:29 am
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3523

Re: Dry Powder

Dry powder is a false analogy.
by dbr
Thu Oct 16, 2014 9:57 am
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3523

Re: Bill Sharpe on the 4% SWR rule (he thinks it's silly)

Considering that the objective of the withdrawing investor is to get ahold of whatever money he wants to spend whenever he wants to spend it, no system that simply allocates a certain amount of withdrawal whether of not it matches what you want to do is really to the point, SWR,VPW, or anything else...
by dbr
Thu Oct 16, 2014 9:46 am
 
Forum: Investing - Theory, News & General
Topic: Bill Sharpe on the 4% SWR rule (he thinks it's silly)
Replies: 51
Views: 4627

Re: Does "substantially identical" apply to combined securit

Kevin M wrote:I would do something like this again in a heartbeat. I'm quite confident the IRS is not going to use my puny transactions as a test case.

Kevin


I've commented once or twice in the past that the trick is for someone to figure out how to create sufficient provocation to get a test case into court.
by dbr
Tue Oct 14, 2014 10:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1438

Re: the importance of asset allocation

It may be that asset allocation being important does not necessarily mean that the result is extremely sensitive to the exact asset allocation. Between 25/75, 50/50, and 75/25 it matters a lot.* Between 60/40 and 70/30 there is not much difference.

*Even 0/100 and 100/0 can be contemplated.
by dbr
Tue Oct 14, 2014 3:06 pm
 
Forum: Investing - Theory, News & General
Topic: the importance of asset allocation
Replies: 16
Views: 1484

Re: Why not 100% Stocks?

New poster. New Investor. Long time horizon. Very interesting points thus far: My understanding of AA is effectively a technique to reduce volatility. Over the long term, less volatile portfolios lead to better gains. So a 100% stock allocation based on history is not necessarily any better than a ...
by dbr
Tue Oct 14, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 20595

Re: Bill Sharpe on the 4% SWR rule (he thinks it's silly)

I have some issues with the way the whole SWR issue is walked up to. Let's suppose you have a $1M portfolio split 50/50. Equities @ 2% produce $10K in dividends, which you take to your bank to spend. Since you have sold nothing do you have a WR? Let's further suppose FI produces $25K of dividends o...
by dbr
Tue Oct 14, 2014 9:36 am
 
Forum: Investing - Theory, News & General
Topic: Bill Sharpe on the 4% SWR rule (he thinks it's silly)
Replies: 51
Views: 4627

Re: TIPS & Rick Ferri

This reinvestment thing is not just about TIPS. If a person wants a nominal bond position to increase in value to pace inflation, one would have to be continually adding to the principal as well. The difference is that the nominal bond may not even pay enough to fund the reinvestment and additional ...
by dbr
Tue Oct 14, 2014 9:08 am
 
Forum: Investing - Theory, News & General
Topic: TIPS & Rick Ferri
Replies: 28
Views: 4923

Re: Does "substantially identical" apply to combined securit

Since the IRS does not seem to have a active process to examine and catch wash sales of not actually identical securities, there is not much rolling of the dice to be done. There is going to have to be some rule making to enforce the law and some people being called to account and perhaps taken to c...
by dbr
Tue Oct 14, 2014 9:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1438

Re: Calculating dividend yield

Your original yield = ({share dividend at time of purchase}/{price paid for share})*100 Your current yield = ({share dividend today}/{price paid for share})*100 Market yield is = ({share dividend today}/{share price today})*100 Annualized. Distinguishing "your" yield from the "market...
by dbr
Sun Oct 12, 2014 9:29 am
 
Forum: Investing - Theory, News & General
Topic: Calculating dividend yield
Replies: 9
Views: 837

Re: TIPS or VIPSX and why?

... Edit 10/11/14 7:35 AM CDT: added the following: ... I tend to agree that the case for you including TIPS is weak, ... I don't understand why many on this forum seem to think that holding TIPS (individual or in a fund) in one's portfolio requires some special justification. I never see it argued...
by dbr
Sun Oct 12, 2014 9:21 am
 
Forum: Investing - Help with Personal Investments
Topic: TIPS or VIPSX and why?
Replies: 9
Views: 1244

Re: Are Savings Bonds Considered Cash?

You can include the emergency fund as part of your portfolio or not and then after making that decision, decide what your asset allocation should be. It wouldn't be off base to have 70/30 with the emergency fund and 80/20 not counting the emergency fund as part of the portfolio. The reason is that i...
by dbr
Sun Oct 12, 2014 9:17 am
 
Forum: Investing - Help with Personal Investments
Topic: Are Savings Bonds Considered Cash?
Replies: 16
Views: 981

Re: Market corrections and rebalancing band

Here's a question. If Person 1 only contributes new money once a year at tax time. He doesn't automatically rebalance every month to get his target allocation back to where it was initially -- he only rebalances when he hits his rebalancing bands. Then why should Person 2 rebalance when she contrib...
by dbr
Fri Oct 10, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4071

Re: Market corrections and rebalancing band

This is contrary to the established wisdom, but I rebalance when I feel like it: I freely let my emotions dictate the decision. I justify this by saying that investing is about avoiding the big mistakes, and rebalancing at the wrong time is at worst a small mistake. I probably rebalance too often, ...
by dbr
Fri Oct 10, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4071

Re: TIPS or VIPSX and why?

I would probably be accumulating I bonds over the thirty years to retirement. The first of them would be ready to redeem as soon as you retire. If it is TIPS, I choose funds for the simplicity and convenience. I am not sure with thirty years to retirement that I would be buying TIPS at all, however....
by dbr
Fri Oct 10, 2014 3:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: TIPS or VIPSX and why?
Replies: 9
Views: 1244

Re: Multiple brokerages?

I suggest you have accounts with institutions you trust. If you don't trust a company, don't do business with them. I suggest that one not trust any company completely. Since one cannot avoid doing business with companies they do not trust, what should one do? My answer is avoid doing business with...
by dbr
Fri Oct 10, 2014 3:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Multiple brokerages?
Replies: 14
Views: 849

Re: Market corrections and rebalancing band

No matter what your starting point or the size of your bands where you start from makes a big difference when you start buying stocks in a market decline if you set your trigger based on the difference from the target rather than the difference from what it was at the start of the market correction...
by dbr
Fri Oct 10, 2014 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4071

Re: Multiple brokerages?

Here's a response for Vanguard about the infrequent cases of getting an account locked. Although I cannot speak to the situations of these individuals you have read about, I have found in my experience at Vanguard, that this situation usually occurs when there is a security concern on a client's ac...
by dbr
Fri Oct 10, 2014 12:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Multiple brokerages?
Replies: 14
Views: 849

Re: Is a fall in portfolio value "only on paper"?

The challenge faced by investors in a market is to understand how it can be a good thing to invest in something that fluctuates in value. I don't think that is really the issue. I think the main issue for many investors is "I have more than I am ready to spend today, but I may have less than I...
by dbr
Fri Oct 10, 2014 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3630

Re: Market corrections and rebalancing band

The recent volatility in the stock market has made me rethink how one should apply rebalancing bands. A common band application is to rebalance only when your AA is off by +/- 5%. So if you have a 50/50 AA and it is in balance it requires a market correction of about ~10% to hit the lower band. But...
by dbr
Fri Oct 10, 2014 12:03 pm
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4071

Re: Multiple brokerages?

The Wiki page does not address the issue that you may loose access to your accounts for some time, and in the mean time you may have a liquidity issue. Personally I have accounts at several places for this very reason. I agree. I would never, ever tie up almost all my assets at one institution whet...
by dbr
Fri Oct 10, 2014 10:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Multiple brokerages?
Replies: 14
Views: 849
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