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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: 1211

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: 20358

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: 11789

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: 299

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: 3503

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: 319

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: 3503

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: 3503

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: 4605

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: 1428

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: 1474

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: 20358

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: 4605

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: 4913

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: 1428

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: 826

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: 1230

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: 978

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: 4057

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: 4057

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: 1230

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: 836

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: 4057

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: 836

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: 3613

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: 4057

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: 836

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. The key is that the investor is aiming at a result playing out over time and not at isolated events occurring one day and the next. Trying to invest in things tha...
by dbr
Fri Oct 10, 2014 9:45 am
 
Forum: Investing - Theory, News & General
Topic: Is a fall in portfolio value "only on paper"?
Replies: 86
Views: 3613

Re: Will Interm-Term Inv Grade Bonds Keep With Inflation?

dbr wrote: The two amount to perhaps 3% between TIPS and Investment grade that is explained by not understanding what TIPS yield means and what the extra risk is doing to help investment grade. TIPS may have more risk in duration. Believe it or not, dbr, I do understand the difference between a rea...
by dbr
Wed Oct 08, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: Will Interm-Term Inv Grade Bonds Keep With Inflation?
Replies: 13
Views: 1263

Re: TLH question

Nobody knows the actual legal answer to what mutual funds are substantially identical to what other mutual funds because the law doesn't say, the IRS has not set any rules, and there are no court cases to inform the issue. Some people would suggest that two different mutual funds from two different ...
by dbr
Wed Oct 08, 2014 9:11 am
 
Forum: Investing - Help with Personal Investments
Topic: TLH question
Replies: 4
Views: 259

Re: Managed Payout

Hi rons, and welcome to the forum! John's suggestion to read past threads is a good one. The managed payout fund doesn't do anything, with respect to payouts, you couldn't do yourself fairly easily, and it invests in a portfolio of assets which is much riskier than most retirees might want. PJW Yes...
by dbr
Wed Oct 08, 2014 9:04 am
 
Forum: Investing - Theory, News & General
Topic: Managed Payout
Replies: 5
Views: 642

Re: Three fund allocation per Vanguard Flagship CFP?

Someone please help me...I am 41 years old and I don't understand why I have to invest in bonds when I plan to retire at 60? Most historical yields of different blend of stock funds yield about 7% when bond funds yield less than that? Why do I need to invest in bonds if I don't need to retire anyti...
by dbr
Wed Oct 08, 2014 8:57 am
 
Forum: Investing - Help with Personal Investments
Topic: [Why do I need to invest in bonds at 41?]
Replies: 3
Views: 125

Re: New B of A visa chip card, no pin needed?

For exhaustive discussion see here:

http://www.flyertalk.com/forum/credit-c ... ature.html

Presently at 7,172 postings.
by dbr
Wed Oct 08, 2014 8:29 am
 
Forum: Personal Finance (Not Investing)
Topic: New B of A visa chip card, no pin needed?
Replies: 30
Views: 2270

Re: Vanguard > Fidelity 401k & Should I Buy New Company's St

You should not hold a significant position in any single company stock and especially not stock in your employer. Actually buying your employer's stock when you have a choice is not advised. A possible exception to this is an ESOP plan that gives you a major discount and a way to get rid of the stoc...
by dbr
Tue Oct 07, 2014 9:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard > Fidelity 401k & Should I Buy New Company's Stock?
Replies: 5
Views: 409

Re: Will Interm-Term Inv Grade Bonds Keep With Inflation?

Steadfast wrote: If you are concerned about your bonds keeping pace with inflation, allocate an appropriate portion of them to TIPS in addition to nominal bonds. I have this concern and so I allocate 33% of bonds to TIPS in my IRA. Good point, Steadfast. The only problem is that at present Vanguard...
by dbr
Tue Oct 07, 2014 9:24 pm
 
Forum: Investing - Theory, News & General
Topic: Will Interm-Term Inv Grade Bonds Keep With Inflation?
Replies: 13
Views: 1263

Re: Need Income - Wellesley Income or Wellington Fund

Hi All, I am trying to figure out which fund will give me the most income, Wellesley Income (VWIAX) or the Wellington Fund (VWENX). I like both funds and will be investing approximately $500,000 in a taxable (non-retirement) account. Because each fund compliments each other, I thought about investi...
by dbr
Tue Oct 07, 2014 8:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Need Income - Wellesley Income or Wellington Fund
Replies: 8
Views: 1161

Re: Grandpa wants me to help invest $800k - Suggestions?

As is often the case the actual situation is more complicated than the question originally presented suggests. Sorry, I guess it really is more complicated than I originally thought. I'm worried about talking to a "professional" because the guys at JPMorgan first tried to get him into an ...
by dbr
Mon Oct 06, 2014 4:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Grandpa wants me to help invest $800k - Suggestions?
Replies: 21
Views: 2526

Re: Grandpa wants me to help invest $800k - Suggestions?

As is often the case the actual situation is more complicated than the question originally presented suggests. The best idea is to back up and take an overview of the objectives (needs) first and address how to invest last. Along the way the things included in that are what is the needed income, wha...
by dbr
Mon Oct 06, 2014 3:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Grandpa wants me to help invest $800k - Suggestions?
Replies: 21
Views: 2526

Re: Grandpa wants me to help invest $800k - Suggestions?

My 83-year-old grandpa, whom I live with and take care of, has a savings of a little more than $800,000 that is currently in some kind of investment fund through JPMorgan Chase and the fees are quite ridiculous. It's tied up for another 5 months but as soon as it's free he wants to invest elsewhere...
by dbr
Mon Oct 06, 2014 2:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Grandpa wants me to help invest $800k - Suggestions?
Replies: 21
Views: 2526

Re: What type of Vanguard account to open?

By retirement they mean a Traditional or Roth IRA. You can read here for information about IRA's: http://www.bogleheads.org/wiki/IRA Otherwise you can always open an ordinary "taxable" account, and you may want two or even all three of the options. This is all about provisions of how diffe...
by dbr
Mon Oct 06, 2014 1:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: What type of Vanguard account to open?
Replies: 4
Views: 479

Re: manipulating Amazon reviews

I don't read reviews for opinions but for information about such things as features, details that might not have been clear in the description, etc. Sometimes the question and answer postings are helpful. It isn't difficult to separate the wheat from the chaff. One thing that does bug me is that som...
by dbr
Mon Oct 06, 2014 9:11 am
 
Forum: Personal Consumer Issues
Topic: manipulating Amazon reviews
Replies: 33
Views: 2916

Re: Assistance W/Devising a Withdrawal& Income Strategy

The only problem with Otars program is you have to have microsoft excel to run it, I wish he would come out with an open office/libre office compatable version. You might try http://www.i-orp.com/ It is designed to help minimize taxes, You can run different scenarios, and it will tell you when to d...
by dbr
Mon Oct 06, 2014 8:49 am
 
Forum: Investing - Help with Personal Investments
Topic: Assistance W/Devising a Withdrawal& Income Strategy
Replies: 7
Views: 1099

Re: Fidelity Offers A Round-Trip to Europe for New Account

I've looked into this as well as other savings account offers that American Airlines puts out with an offer of bonus miles. I like having all of my investments with vanguard and since this has to be a taxable account, in nine months I'd probsbly have to pay capital gains taxes :oops: Most offers to...
by dbr
Mon Oct 06, 2014 8:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Offers A Round-Trip to Europe for New Account
Replies: 26
Views: 3064

Re: Moved account to Vanguard: new questions

Questions: 1. We're currently underweight in bonds (we have about 10%). Our general thinking is that we should exchange equities for bonds in the 401ks/Roths in order to get this amount higher, under the belief that it makes the most sense to have bonds in tax-advantaged accounts, saving the equiti...
by dbr
Fri Oct 03, 2014 12:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Moved account to Vanguard: new questions
Replies: 17
Views: 1088

Re: Assistance W/Devising a Withdrawal& Income Strategy

Several comments. First of all there is one pretty good book on the subject of retirement by Jim Otar. It is long and detailed but could be very helpful: http://www.retirementoptimizer.com/ There is also the Boglehead book on retirement and excellent writing by people such as Larry Swedroe and Rick ...
by dbr
Fri Oct 03, 2014 12:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: Assistance W/Devising a Withdrawal& Income Strategy
Replies: 7
Views: 1099

Re: Bond Allocation

There are so many choices in what a person in your position might choose in bonds and so little difference among those choices that neither you nor anyone else can ever resolve the issue. One conclusion to draw is to simply invest in BND and not look back. A minor issue is that presumably you mentio...
by dbr
Fri Oct 03, 2014 12:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation
Replies: 2
Views: 371

Re: Why not 100% Stocks?

- I'm 100% stocks damnit if you ignore my business, my home, my cash, and my 'hard assets' (still trying to figure out what the heck those are); None of those things are taken into account when one refers to their investment portfolio. Otherwise, it's impossible (in all practical terms) to be 100% ...
by dbr
Fri Oct 03, 2014 11:32 am
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 20358

Re: Fidelity Offers A Round-Trip to Europe for New Account

Rewards from brokers/airlines of frequent flier miles do not result in an income tax liability. Cash back offers do IAFAIK. Just to clarify/confirm, "cash back" in the credit card sense is not taxable as it's considered a rebate (even if they give you cash). Cash bonuses (as in $150 for o...
by dbr
Fri Oct 03, 2014 10:15 am
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Offers A Round-Trip to Europe for New Account
Replies: 26
Views: 3064

Re: Fidelity Offers A Round-Trip to Europe for New Account

I wonder how much that adds to their fund expense ratios? :P The details might be complicated but I doubt they do this unless there is a profit for them in doing so. One very typical way to make money on the deal is from investors that move cash in an out of these accounts, including brokered CD's....
by dbr
Fri Oct 03, 2014 10:14 am
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Offers A Round-Trip to Europe for New Account
Replies: 26
Views: 3064

Re: Medicare question

In my case, benefits had been administered and subsidized by Megacorp. I suspect they didn't want the hassle of dealing with this anymore so handed it over to a private exchange also with a fixed $$$ amount subsidy/person depending on yrs of service. In the beginning retirees win since the net cost...
by dbr
Fri Oct 03, 2014 9:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Medicare question
Replies: 8
Views: 657
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