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Re: Why do we like dividends?

My first post! :happy If we own a fund and then dividends are paid, our fund value goes up. Then the NAV of our shares goes down the amount of the dividend, so our fund value goes down the same amount - and we are back to where we started. So why do we like dividends? Dividends are really simple. N...
by dbr
Fri Nov 28, 2014 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: Why do we like dividends?
Replies: 56
Views: 2354

Re: Florescent lights

One of the good feeling things I have done is eliminate all CFL's in the house for LEDs, even the T8 tubes. The one exceeption is a circular bulb in a magnifier light.
by dbr
Fri Nov 28, 2014 5:42 pm
 
Forum: Personal Consumer Issues
Topic: Florescent lights
Replies: 5
Views: 436

Re: Why do we like dividends?

If you look at long term stock returns, a large percentage of that return comes from dividends and reinvested dividends. I believe the percentage is actually over 50%. That fact does not lead to a conclusion that the higher the dividend paid, the higher return for any particular stock, nor does it ...
by dbr
Fri Nov 28, 2014 5:37 pm
 
Forum: Investing - Theory, News & General
Topic: Why do we like dividends?
Replies: 56
Views: 2354

Re: Valuation of EE Savings Bonds

Don't you decide things like this according to what use you have for the result?
by dbr
Fri Nov 28, 2014 11:28 am
 
Forum: Investing - Theory, News & General
Topic: Valuation of EE Savings Bonds
Replies: 43
Views: 2587

Re: The Whole Ball Game Of Equity Investing As I See It

Considering that tilting means to concentrate more in small cap than is present in the cap weighted total market, I think starting with TSM and some indeterminate fraction to TISM is sufficient for most any investor. I think doing otherwise is fine for any investor that learns enough about how all ...
by dbr
Fri Nov 28, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: The Whole Ball Game Of Equity Investing As I See It
Replies: 14
Views: 1580

Re: The Whole Ball Game Of Equity Investing As I See It

Considering that tilting means to concentrate more in small cap than is present in the cap weighted total market, I think starting with TSM and some indeterminate fraction to TISM is sufficient for most any investor. I think doing otherwise is fine for any investor that learns enough about how all t...
by dbr
Fri Nov 28, 2014 11:03 am
 
Forum: Investing - Theory, News & General
Topic: The Whole Ball Game Of Equity Investing As I See It
Replies: 14
Views: 1580

Re: I know you folks are big fans of individual stocks but..

Johnson and Johnson Proctor and Gamble Kellog's General Electric Apple Microsoft Coca Cola United Healthcare United Airlines US Steel AT&T Union Pacific Verizon I have funds in SWPPX and I am not very impressed with the dividends, I believe in the power of dividend reinvestment but I feel that ...
by dbr
Fri Nov 28, 2014 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: I know you folks aren't big fans of individual stocks but...
Replies: 19
Views: 1360

Re: Corporate bond funds? Tips? Long term bond funds? Yes or

Hi rai, In my opinion, any low cost investment grade, short or intermediate term bond fund will provide safety and income to a portfolio. Best. rai, if you want a simple, direct answer to your question, it is the above. If you additionally want to know if you should allocate perhaps 25% of that to ...
by dbr
Fri Nov 28, 2014 10:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Corporate bond funds? Tips? Long term bond funds? Yes or no?
Replies: 17
Views: 1406

Re: Corporate bond funds? Tips? Long term bond funds? Yes or

This is why we say TIPS protect against unexpected inflation. In the longer term, inflation gets baked into yields of both types of bonds. Exactly, but there are people who go away from this with the impression that TIPS somehow do not protect against expected inflation, which is nonsense. It is ju...
by dbr
Thu Nov 27, 2014 12:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Corporate bond funds? Tips? Long term bond funds? Yes or no?
Replies: 17
Views: 1406

Re: Safe Withdrawal Rates - Is the 4% rule still good?

There are a lot of reasons why a 4% WD rate won't work: Indeed so. - age of death minus age at retirement. This is going up over time, and for someone who is 40 now, will be even longer at their retirement, That is true and important, but it isn't what 4% is talking about. What they are talking abo...
by dbr
Thu Nov 27, 2014 12:47 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 67
Views: 5347

Re: Safe Withdrawal Rates - Is the 4% rule still good?

There are a lot of reasons why a 4% WD rate won't work: Indeed so. - age of death minus age at retirement. This is going up over time, and for someone who is 40 now, will be even longer at their retirement, That is true and important, but it isn't what 4% is talking about. What they are talking abo...
by dbr
Thu Nov 27, 2014 12:46 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 67
Views: 5347

Re: What is the present value of future payments?

I'm trying to simulate how an annuity with a guarantee withdrawal benefit would have performed during period 1968 to 1997. This was the worst retirement period according to the 1992 Bengen study that gave us the 4% withdrawal rate. Unrelated to the OP...how can a study done in 1992 use data from 19...
by dbr
Thu Nov 27, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: What is the present value of future payments?
Replies: 8
Views: 642

Re: What is the present value of future payments?

Wouldn't it be more accurate if you used the appropriate treasury risk-free rate separately for each individual payment date? Payments for the first few years would be low but they would gradually increase to the 30 year rate. I think what he is doing is not a present value calculation, but somethi...
by dbr
Thu Nov 27, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: What is the present value of future payments?
Replies: 8
Views: 642

Re: What is the present value of future payments?

If I'm trying to total the amount of real payments made from each program is it correct to simply add all the deflated annuity payments and multiply the first years 4% withdrawal from the 70/30 portfolio by 30? If I did it correctly the 70/30 portfolio delivered 70% more real payments. Kelly That s...
by dbr
Thu Nov 27, 2014 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: What is the present value of future payments?
Replies: 8
Views: 642

Re: Safe Withdrawal Rates - Is the 4% rule still good?

. Is there really anyone who thinks when they actually get to retirement they can spend a level 4% and nothing bad can happen? And, in addition, real life spending is not constant. One may spend less on some things as one ages, or one may be hit by major issues sooner or later on. There is also an ...
by dbr
Thu Nov 27, 2014 12:19 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 67
Views: 5347

Re: Safe Withdrawal Rates - Is the 4% rule still good?

Since the 4% rule has never been good, it's hard to make much sense of the premise of this thread. What can be said about the 4% rule is that it is not as bad as the 8% rule promulgated by Peter Lynch that preceded the 4% rule. I guess that's progress of a sort. :D BobK Of course, the whole point i...
by dbr
Thu Nov 27, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 67
Views: 5347

Re: How to calculate pension into retirement calculations

Subtract the guaranteed income from your income requirement and go from there.
by dbr
Thu Nov 27, 2014 11:20 am
 
Forum: Personal Finance (Not Investing)
Topic: How to calculate pension into retirement calculations
Replies: 4
Views: 499

Re: Safe Withdrawal Rates - Is the 4% rule still good?

Good debate here. Bogleheads tend to be instinctive savers and cautious spenders. For that reason, have a lot of extremely low SWRs on this board. I personally consider anything under 3% ridiculously conservative. As a previous poster mentioned, for many of us there are two types of SWR failures - ...
by dbr
Thu Nov 27, 2014 10:15 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 67
Views: 5347

Re: Does investing in a 401k actually save any money?

Captain_Andrew wrote:I'm guessing if my income is US Federal income tax free I would want a Roth 401k? (I can't say with any certainty if it will be or not but there's a good chance.)


It could be if military pay on certain duty. If someone is familiar with this situation exactly their input could be helpful.
by dbr
Wed Nov 26, 2014 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 63
Views: 6039

Re: Safe Withdrawal Rates - Is the 4% rule still good?

+1 on the nicely written. I'm 2.5 years retired and I guess I'm more of a ceiling and floor kind of guy, although heavily influenced by Otar. Can't imagine waking up and going it's year 27 so 12.6% of my remaining money is to be withdrawn from my portfolio this year. After all, in year 27 it's past...
by dbr
Wed Nov 26, 2014 10:14 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rates - Is the 4% rule still good?
Replies: 67
Views: 5347

Re: How Will Rising Interest Rates Affect Bond Funds?

Interest rate goes up - bond fund share price goes down - bond fund yield goes up. And bond fund payout in dollars remains the same, at least immediately. Many people confuse payout, which is the size of the dividend in dollars and yield which is the ratio of payout to fund price expressed as a per...
by dbr
Wed Nov 26, 2014 10:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Rising Interest Rates And Bond Funds?
Replies: 9
Views: 1044

Re: Allocation

Thanks for the info. I hadnt thought of having bonds to buy on a drop...makes me actually want to set 10% or so of my portfolio in bonds now for that very reason. That's not the reason. Returns remain higher with 100% stocks. The point is that some dilution with bonds starts reducing portfolio vari...
by dbr
Wed Nov 26, 2014 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Allocation
Replies: 16
Views: 970

Re: Company ESPP Advice

If you are saying the company lets you buy 14% of your salary in stock while asking you to pay only 8% of your salary, then that is a tremendous benefit and worth rolling that investment annually as the holding period expires. That is also extremely unusual as most plans we hear about offer stock at...
by dbr
Tue Nov 25, 2014 6:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Company ESPP Advice
Replies: 2
Views: 269

Re: Girlfriend with a LOT of Student debt.

I don't have an answer to the individual dilemma, but it is clear that this habit of devil's bargains with debt to obtain an education is having far reaching and destructive consequences for a generation of individuals with no end in sight. Personally I think this is a scam produced by collusion bet...
by dbr
Tue Nov 25, 2014 9:05 am
 
Forum: Personal Finance (Not Investing)
Topic: Girlfriend with a LOT of Student debt.
Replies: 166
Views: 13289

Re: Allocation

So if I buy a bond etf or mutual fund, the yields will change as bond yields change without me having to do anything? Bond funds do not lock on yields as individual bonds do? The yields of individual bonds also change. If interest rates go up (down) the market value of that bond will go down (up). ...
by dbr
Tue Nov 25, 2014 9:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Allocation
Replies: 16
Views: 970

Re: Moving current 401k funds into brokerage link?

My company offers an employee stock purchase plan. I havne't heard of the match of stock though. I'm not sure what the difference is between the HP stock fund vs the ESPP but it shouldn't matter since I'm not planning to invest in such risk! You should investigate your benefits and compensation pla...
by dbr
Mon Nov 24, 2014 8:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Moving current 401k funds into brokerage link?
Replies: 30
Views: 1583

Re: What-If Planning Advice

Is it definitely or probably the case that, after the move is accomplished, you will have enough in Schedule A deductions to exceed the standard deduction each year? If not, then the answer to your question is it won't make any difference at all. That's a point often glossed over by real estate sal...
by dbr
Mon Nov 24, 2014 5:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: What-If Planning Advice
Replies: 9
Views: 996

Re: Freakonomics approach to 401(k) choices

Thank you EVERYONE for all of your very valuable insights!! I am pretty new to investing, and it is really nice to know that I can have my questions answered so fully, so quickly on this forum! I would especially like to make a shout out to staythecourse. Quick question for you though: If the S&...
by dbr
Mon Nov 24, 2014 9:20 am
 
Forum: Investing - Theory, News & General
Topic: Freakonomics approach to 401(k) choices
Replies: 27
Views: 2637

Re: TSP G-Fund: Is this the only fixed-income component I ne

Questioning what you have in bonds when you are 90% stocks isn't meaningful. I would think the G fund would be just fine. Those current allocations to TIPS and munis could easily go away and I wouldn't get side-tracked by all the noise about corporates. Having said all that, if there is any academi...
by dbr
Sun Nov 23, 2014 8:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP G-Fund: Is this the only fixed-income component I need?
Replies: 6
Views: 651

Re: Rollover Fidelity 401k to Vanguard IRA or not?

Why do you want to rollover this 401K? The usual reason that would justify this is getting out of expensive funds, but in this case you already have low costs and can't gain a benefit. Are there other costs in the plan that you can escape? The investments you are talking about are institutional fund...
by dbr
Sun Nov 23, 2014 6:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rollover Fidelity 401k to Vanguard IRA or not?
Replies: 3
Views: 426

Re: Freakonomics approach to 401(k) choices

Your problem is actually pretty simple, though the solution is somewhat complex: you do not understand the variability of returns. Among many possible sets of data you could look at this is one: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html Note in that table that there ...
by dbr
Sun Nov 23, 2014 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: Freakonomics approach to 401(k) choices
Replies: 27
Views: 2637

Re: 75 year old assistance

I have also substantial real estate holdings that will produce over 150,000/ year. The issue is not what I will require but if it is reasonable to enter the market when it is at such extreme high levels and interest rates at such low levels. My inclination is not to take any risk if there is no nee...
by dbr
Sun Nov 23, 2014 4:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: 75 year old assistance
Replies: 14
Views: 1075

Re: Return Percentage Question

So, if I understand you correctly, to know whether or not my average annual return is on target with a 8-12% return, I should take my total investment value divided by my cost basis (contributions) and apply an exponential of 1/# of years. So in reality, the figure that my investment firm gives me ...
by dbr
Sun Nov 23, 2014 2:50 pm
 
Forum: Investing - Theory, News & General
Topic: Return Percentage Question
Replies: 7
Views: 370

Re: Return Percentage Question

longinvest wrote:You coul read (and maybe use the spreadsheet) in our wiki's Calculating personal returns.


Yes, you created that didn't you? I apologize for not mentioning it.
by dbr
Sun Nov 23, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: Return Percentage Question
Replies: 7
Views: 370

Re: 75 year old assistance

I am sorry we are considering 75% V bond index not stock index. We have no debt and we are still employed and do not plan to retire for 2 years. My question is. Is this an appropriate time to ladder into the market with a simple AA of 75 bond index and 25 stock index? Or is it best to wait 2 years?...
by dbr
Sun Nov 23, 2014 2:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: 75 year old assistance
Replies: 14
Views: 1075

Re: portfolio suggestions for the truly aged.

I do think it will get almost all spent. This is the key statement. If you really think she is going to need every penny she has now for spending over the next five years, then you have to be is safe savings instruments such as CDs. Do you really mean this? What is the plan if she is still alive an...
by dbr
Sun Nov 23, 2014 1:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: portfolio suggestions for the truly aged.
Replies: 20
Views: 1982

Re: Retirement around the corner, seeking advice on getting

I did learn from that is to stay put and the market will come back. We all hope the market will "come back" quickly, like it did in 2008-9 but, the reality is, in Japan they're still waiting! Going through a major correction like 2008-9 while still working, knowing you can always postpone...
by dbr
Sun Nov 23, 2014 1:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement around the corner, seeking advice on getting hous
Replies: 21
Views: 1913

Re: Saving Strategy For a Young Person?

For myself, I am not talking about mistake but rather annoyance. How much annoyance an annoyance is is a personal issue and also related to the size. We cashed out a 403b and paid taxes to avoid carrying a whole additional account that had 0.5% of our assets. My 401K has after tax assets that are al...
by dbr
Sun Nov 23, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: Saving Strategy For a Young Person?
Replies: 17
Views: 1501

Re: 30 Year TIPS Bond as a SPD Annuity Alternative?

Much of the future income advantage of SPD annuities comes from mortality credits. You would not have that source of income with TIPs. If you really care about leaving an inheritance for your heirs, then TIPs are reasonable, but they are at historically low real interest rates now, and essentially ...
by dbr
Sun Nov 23, 2014 1:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: 30 Year TIPS Bond as a SPD Annuity Alternative?
Replies: 7
Views: 750

Re: Bumped out of first class at boarding - compensation?

I am not a FF/contract expert but I disagree with this. I find it hard to believe that non-rev passengers have the right to bump anyone with a confirmed ticket from first class. A ticket purchased with miles is still a contract for first class. There is non-rev, meaning airline employees on vacatio...
by dbr
Sun Nov 23, 2014 1:14 pm
 
Forum: Personal Consumer Issues
Topic: Bumped out of first class at boarding - compensation?
Replies: 41
Views: 4131

Re: TSP G-Fund: Is this the only fixed-income component I ne

Questioning what you have in bonds when you are 90% stocks isn't meaningful. I would think the G fund would be just fine. Those current allocations to TIPS and munis could easily go away and I wouldn't get side-tracked by all the noise about corporates. Having said all that, if there is any academic...
by dbr
Sun Nov 23, 2014 12:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP G-Fund: Is this the only fixed-income component I need?
Replies: 6
Views: 651

Re: Return Percentage Question

Since return is by definition an annual number, that should answer that question. But, you may not have calculated an annual return. For example, if you started with $10,000 and have $12,000 at the end of two years, the return, also known as the compound annual growth rate would be r = (12000/10000)...
by dbr
Sun Nov 23, 2014 12:14 pm
 
Forum: Investing - Theory, News & General
Topic: Return Percentage Question
Replies: 7
Views: 370

Re: 75 year old assistance

The first question to ask is what are your objectives? You don't say what amount of spending you might want to support from these assets, whether you intend money to be left for heirs or gifted, or whether you plan to buy a yacht or sell your country home if you have one (the real estate?). It would...
by dbr
Sun Nov 23, 2014 11:58 am
 
Forum: Investing - Help with Personal Investments
Topic: 75 year old assistance
Replies: 14
Views: 1075

Re: Moving current 401k funds into brokerage link?

What is the description of HP STOCK FUND(.02) ? OP, will you also answer the above question? My first thoughts are that it could be (a) a total U.S. stock index fund, which would be great, or (b) an option to invest money in company stock, which wouldn't be what we're looking for. What do the plan ...
by dbr
Sun Nov 23, 2014 11:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Moving current 401k funds into brokerage link?
Replies: 30
Views: 1583

Re: Retirement around the corner, seeking advice on getting

Key Points 1. Retirement next summer and will put off pension till 65 and SS until 70. Expect annual income of $74K against expenses of $45K. 2. 60/40 asset allocation, but lean towards more risk. 3. Have access to a safe 3% fund. Good idea for the 40%? Or too conservative? 4. Anxious over giving u...
by dbr
Sun Nov 23, 2014 11:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement around the corner, seeking advice on getting hous
Replies: 21
Views: 1913

Re: Bumped out of first class at boarding - compensation?

I would ask over at flyertalk-- they are very knowledgeable about all the rules/practices. Look for either the USAir or the United FF forum. Absolutely post at flyertalk, probably in the USAir section but could spill to UA: http://www.flyertalk.com/forum/us-airways-dividend-miles-pre-merger-612/ Th...
by dbr
Sun Nov 23, 2014 11:09 am
 
Forum: Personal Consumer Issues
Topic: Bumped out of first class at boarding - compensation?
Replies: 41
Views: 4131

Re: Saving Strategy For a Young Person?

I still have a small amount of non-deductible money in my 401K from the misty past when the company was still trying to figure out how to run a 401K plan and all the different ways to contribute to it. All I have learned so far about that money is that I can't take it out as such (something about po...
by dbr
Sun Nov 23, 2014 10:04 am
 
Forum: Investing - Theory, News & General
Topic: Saving Strategy For a Young Person?
Replies: 17
Views: 1501

Re: 30% In International Stocks?

That certainly would be the argument for holding a measurably higher percentage of international than 30% of equities. Or it is an argument that when one asset class or another (stocks/bond) is the minority part of a portfolio, how that set of investments is further sub-allocated becomes less and l...
by dbr
Sun Nov 23, 2014 9:51 am
 
Forum: Investing - Help with Personal Investments
Topic: 30% In International Stocks?
Replies: 59
Views: 5856

Re: Fidelity Rewards Amex Activation Experience

All the credit cards I have gotten from any company in recent years said right on the front that I could activate online or by calling a phone number. That information is on a peel-off sticky on the card. The phone call goes to an activation line that most often is automated. I have never had a prob...
by dbr
Sun Nov 23, 2014 9:49 am
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Rewards Amex Activation Experience
Replies: 20
Views: 1172

Re: Social Security 62 vs 66

A big factor is "how old are you now?". If you're 60, then it's a good bet that waiting will pay off. But look at articles examining funding of social security and possible remedies as time goes on. Most converge on 2033 as the point where benefits will drop to 75% of where they are now. ...
by dbr
Sun Nov 23, 2014 9:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Social Security 62 vs 66
Replies: 58
Views: 5014
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