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Re: Social Security - Receive Any Letters Approaching Age 70

They don't send you a notice when you turn 62, nor at FRA, and I have never heard of anyone getting a notice at 70. They do send an annual statement, so if one is getting that and one does not think about filing, then I don't know . . .
by dbr
Sun Jul 27, 2014 5:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security - Receive Any Letters Approaching Age 70?
Replies: 10
Views: 742

Re: A Scenario and 3 questions

I'm gonna have to write that most of what you wrote doesn't make any sense to me. Short-term bonds in taxable to fund pre-SS retirement? No. Plain and simple: No. Sure. If it were me, I wouldn't do anything special at all except just withdraw and spend from one portfolio, some of it in taxable and ...
by dbr
Sun Jul 27, 2014 2:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: A Scenario and 3 questions
Replies: 7
Views: 448

Re: A Scenario and 3 questions

As dbr noted, the first, key question is the size of your expenses. Are you certain you have enough? From the way you have worded your question, I'm guessing the answer to that question is yes. I guess I never considered there would be an issue with a high 6 figure portfolio that has 10-12 years to...
by dbr
Sun Jul 27, 2014 2:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: A Scenario and 3 questions
Replies: 7
Views: 448

Re: One of the simplest rational reasons why some should til

Right, this does not affect the expected return, but the standard deviations of returns of individual stocks is much higher than that of a collection of stocks. In that sense it does cause the price to move; indeed it affects the very definition of the price moving. This is the best and most basic ...
by dbr
Sun Jul 27, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 39
Views: 3039

Re: bond duration and interest rate risk

It is possible that Wiki section should be edited to removed the impression that the word" useful" means "useful for how to manage investments" as distinct from "useful for understanding what duration means." This is also an example of citing "sound-bite" inv...
by dbr
Sun Jul 27, 2014 2:01 pm
 
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 10
Views: 392

Re: bond duration and interest rate risk

So to summarize, if interest rates stay same: long term wins by 0.8% . If interest rates spike, intermediate may or may not win. Looking at historical performance chart, this appears to be the case( long term fund is ahead most of the time, except when they both dip, it dips more). So if I know tha...
by dbr
Sun Jul 27, 2014 1:17 pm
 
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 10
Views: 392

Re: bond duration and interest rate risk

2. Bond funds trade often and don't hold the bond till maturity. In addition, I don't see how holding a bond beyond duration matters. Duration is not time to maturity. It's a measure of interest rate risk. For this fund though, it would be good to understand exactly how that number was produced, if...
by dbr
Sun Jul 27, 2014 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 10
Views: 392

Re: bond duration and interest rate risk

That duration number for VWLTX doesn't mean what it says. The maturity of the bonds in that fund is 16 years and would not be recommended.

Do I remember a thread where durations in long term muni funds were affected by call provisions or something?
by dbr
Sun Jul 27, 2014 12:47 pm
 
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 10
Views: 392

Re: Old people and financial advisors - a family tale

There is indeed the maxim to not ascribe to malevolence that which is explained by stupidity. However, when it comes to taking care of someone else's interests for a consideration for oneself, it is absolutely an ethical obligation to not be stupid. That is especially so in a case where one advertis...
by dbr
Sun Jul 27, 2014 12:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 66
Views: 3878

Re: Old people and financial advisors - a family tale

So true. I have a relative with a Ph.D. in a STEM field. He tutored me all the way through differential equations. He has patents. A smart guy. Yet he has Merrill Lynch or Ameriprise or Morgan Stanley (I can't remember which) managing his money. His AUM fee is around 1% and he's invested in the typ...
by dbr
Sun Jul 27, 2014 11:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 66
Views: 3878

Re: A Scenario and 3 questions

Here is the scenario. Individual is looking to retire in 1-3 years. Within 10-12 years of retirement they plan to start drawing SS and a pension both indexed to inflation which will cover expenses at their current level of spending. They currently have high 6 figures in their tax deferred accounts ...
by dbr
Sun Jul 27, 2014 11:45 am
 
Forum: Investing - Help with Personal Investments
Topic: A Scenario and 3 questions
Replies: 7
Views: 448

Re: Help me save my parents from Merrill Lynch

Thanks to all for the thoughtful responses. I should clarify that my parents have indeed asked me for my input. I've also given them copies of several Boglehead-friendly books, and they've said they find the philosophy attractive. That's why I'm so confused they ended up at Merrill Lynch. But yes, ...
by dbr
Sun Jul 27, 2014 11:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Help me save my parents from Merrill Lynch
Replies: 26
Views: 2651

Re: Teacher looking for portfolio advice

Teacher88 wrote:Sorry, somehow this got posted before I was done filling out the entire post.


I see that.

You did supply better background on the question of risk of a 100% stock allocation, but I would still question it. I also really would suggest going through the Wiki, but you might have already done so.
by dbr
Sun Jul 27, 2014 10:47 am
 
Forum: Investing - Help with Personal Investments
Topic: Teacher looking for portfolio advice
Replies: 13
Views: 476

Re: Sshwab vs. Vanguard for index funds

Where you invest, meaning where your accounts are, and what you invest in, meaning what company's mutual funds, ETF's, other kinds of assets, are two separate questions. I suspect a good answer is that if you are going to invest in mutual funds from Vanguard, then you should certainly invest at Vang...
by dbr
Sun Jul 27, 2014 10:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Sshwab vs. Vanguard for index funds
Replies: 15
Views: 1435

Re: Old people and financial advisors - a family tale

well I am not sure if this is just related to age. Last week I was talking to guy in probably early 50s..very sharp in what he does professionally, articulate and has a clarity that I could relate to. Guess what..he has been investing with a friend, knows that the guy is making money, heard of othe...
by dbr
Sun Jul 27, 2014 10:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 66
Views: 3878

Re: Larry: 20 Dollar Bills and Factor Persistence

OP, SV is not clearly a risk. It may be a proxy for some underlying risk, such as distress, but is not itself a risk. Therefore, the answers to both questions don't have to be the same. They might be or they might not be. The efficient market claim is not that risk and return are commensurate. If m...
by dbr
Sun Jul 27, 2014 10:26 am
 
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 101
Views: 8144

Re: Teacher looking for portfolio advice

It is unlikely that a person aged 48 with almost as much debt as assets would want to be 100% stock.

For a more complete perspective I would start here and work through the materials on financial planning and investing in the Wiki:

http://www.bogleheads.org/wiki/Getting_started
by dbr
Sun Jul 27, 2014 10:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Teacher looking for portfolio advice
Replies: 13
Views: 476

Re: Old people and financial advisors - a family tale

I'm sorry, but I would've stepped in and done some about the advisor. If the advisor was churning the account that badly, he is probably doing it to many people. A little TV exposure, a lawsuit, and talk of elder abuse might tamp things down a little bit. This is, I think, the key. the advisor need...
by dbr
Sun Jul 27, 2014 10:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Old people and financial advisors - a family tale
Replies: 66
Views: 3878

Re: Make Income the Outcome

Like any business decision or investment: it is all about the cash flow! Best. No, it really isn't - that is how people get duped into bad annuity type products. All investments should provide some form of cash flow. So do you exclude all stocks that don't pay dividends from your portfolio? What ab...
by dbr
Sun Jul 27, 2014 9:42 am
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: One of the simplest rational reasons why some should til

If it's a risk that does not cause the price to move (if such a thing exists), it will not be something investors care about or price in. Isn't idiosyncratic risk an example of such risk? 1. In asset pricing theory, idiosyncratic risk doesn't affect the expected return. 2. But investors will care a...
by dbr
Sun Jul 27, 2014 9:38 am
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 39
Views: 3039

Re: One of the simplest rational reasons why some should til

It would help if someone could define what the other notions of risk are and how to measure them. dbr, Those questions are very important in asset pricing theory. Specifically, to calculate the expected returns, one needs to know what the risk factor (f) is and how to measure the risk (b). On the o...
by dbr
Sun Jul 27, 2014 9:33 am
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 39
Views: 3039

Re: TIPS Ladder Spreadsheets in General & Two in Particular

^ Erwin, When you consider building a TIPS ladder for retirement, you are assuming that you will spend the bond at the maturity date. You would not be expected to live off of the coupons. The cash flow each year is made up of the maturing bond and the coupons generated from the longer bonds as well...
by dbr
Sun Jul 27, 2014 9:21 am
 
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 36
Views: 4284

Re: If you tax adjust, how has it changed your life?

I don't tax adjust because I can't figure out how doing so would have any effect on anything I do. I wonder if there is a rationale we could apply that would tell us if we should care. First of all we will not allow the argument that the difference is too small to matter. While I think that is usual...
by dbr
Sat Jul 26, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: If you tax adjust, how has it changed your life?
Replies: 12
Views: 1256

Re: RMD's

Your RMD amount is based the 12/31 balances of the previous year. You could set aside that money into an MM fund early in the year and forego any appreciation on it until you actually withdraw the funds. Of course if the market tanked, the money is set aside and you avoid having to cash in more ass...
by dbr
Sat Jul 26, 2014 12:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: RMD's [Required Minimum Distributions]
Replies: 11
Views: 994

Re: One of the simplest rational reasons why some should til

Interesting thread. I've seen it suggested that asset classes like small caps, private real estate, private equity, emerging markets may earn varying degrees of illiquidity premiums. In other words, these asset classes may have poor returns during times of illiquidity which are often associated wit...
by dbr
Sat Jul 26, 2014 12:50 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 39
Views: 3039

Re: RMD's

What I am trying to get at is do you just set aside in the account every year a certain amount in a money market fund to account for the amount you are going to be withdrawing, or what? What's the best strategy? Why not just sell enough of something to fund the withdrawal. What that something is wo...
by dbr
Sat Jul 26, 2014 11:28 am
 
Forum: Investing - Help with Personal Investments
Topic: RMD's [Required Minimum Distributions]
Replies: 11
Views: 994

Re: TIPS Ladder Spreadsheets in General & Two in Particular

However, it's not a good deal when compared to historical TIPS yields. For this reason, I'm not building a 30-year ladder myself. I'm keeping my average TIPS duration about 7 years. However, for someone at retirement age, even a low yield like this may be considered good if the ladder will produce ...
by dbr
Sat Jul 26, 2014 11:21 am
 
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 36
Views: 4284

Re: Better to not rollover 401k to IRA for better protection

[*] Federal and state laws on this have changed over time and it's sometimes hard to know if what you're reading is outdated, especially if what you're reading has no "published on date". In my state of VA, this is particularly difficult because VA passed a newish law on this just a coupl...
by dbr
Sat Jul 26, 2014 11:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Better to not rollover 401k to IRA for better protection?
Replies: 16
Views: 948

Re: Better to not rollover 401k to IRA for better protection

As I understand, regular IRAs are protected from creditors up to about $1M (I believe this amount is increased each year to keep pace with inflation), and rollover IRAs funded exclusively with 401k assets have unlimited protection. However, I can't point to definite sources. Any experts able to fil...
by dbr
Sat Jul 26, 2014 9:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Better to not rollover 401k to IRA for better protection?
Replies: 16
Views: 948

Re: Have a million to transfer, thinking of doing 100% stock

So tell me, Bogleheads, is it objectively a bad idea to invest 100% into stocks, . No it is not objectively a good idea or a bad idea. Everything depends on your own subjective position of what wealth means to you in life. You have to begin by understanding the consequences, both certain and uncert...
by dbr
Sat Jul 26, 2014 9:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Have a million to transfer, thinking of doing 100% stocks
Replies: 38
Views: 3496

Re: One of the simplest rational reasons why some should til

That assumes STDV is all there is to risk. The thread is about some other notion of risk. In the tilt debate this distinction is critical. It would help if someone could define what the other notions of risk are and how to measure them. I am aware of one example, which is the "Larry" port...
by dbr
Sat Jul 26, 2014 9:05 am
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 39
Views: 3039

Re: Make Income the Outcome

Whether or not a more conservative portfolio is the most appropriate way to ensure a desired income stream is still open to question. We actually know that if the wanted withdrawal rate is high enough and the portfolio too conservative, that the outcome is disaster. The entire premise of the "...
by dbr
Fri Jul 25, 2014 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: If FF3 model is a true risk model, does it follow to buy

dbr - its possible I am not using terms correctly. When I say diversification above what I am saying is that multiple sources of non-perfectly correlated growth, when combined into a portfolio, creates a smoothing effect where the portfolio StDev is reduced but the total returns of the portfolio ar...
by dbr
Fri Jul 25, 2014 4:25 pm
 
Forum: Investing - Theory, News & General
Topic: If FF3 model is a true risk model, does it follow to buy SV?
Replies: 17
Views: 838

Re: One of the simplest rational reasons why some should til

Yes, SCV offers more reward for more risk. But this risk is not measured by standard deviation. If all the risks can be measured by 1 stdev, then your statement is absolutely true. But there are other types of risk that investors are exposed to. One example, the so-called financial distress risk, i...
by dbr
Fri Jul 25, 2014 4:02 pm
 
Forum: Investing - Theory, News & General
Topic: One of the simplest rational reasons why some should tilt
Replies: 39
Views: 3039

Re: Make Income the Outcome

For us, as we get older, the account balance has become second on the priority scale. We have been watching the dividend stream from the Total Market Index funds we invest in grow each with compounding and new contributions. For us this is number one. Somehow it doesn't seem to me that ignoring tot...
by dbr
Fri Jul 25, 2014 3:32 pm
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: The article on tax efficient placement needs to be rewri

Let's keep in mind that much of the controversy is due to low interest rates, which probably won't last forever. I would think that anything stated in the Wiki would be applicable regardless of interest rates. Kevin Hasn't there also been a discussion that "tax efficient" can refer to act...
by dbr
Fri Jul 25, 2014 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: The article on tax efficient placement needs to be rewri
Replies: 75
Views: 3922

Re: If FF3 model is a true risk model, does it follow to buy

Regarding diversification, one could make the definition that the market represents the "diversified" portfolio in that it holds the representative allocation of large and small, value and growth stocks. If one devises a portfolio in which the factor loadings are non-zero, either positive ...
by dbr
Fri Jul 25, 2014 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: If FF3 model is a true risk model, does it follow to buy SV?
Replies: 17
Views: 838

Re: Make Income the Outcome

Here's a football analogy. With 6 minutes to go, possession of the ball, and a 9 point lead a team can maximize its expected pointed total by throwing lots of medium and long passes, but the goal of winning the game is not maximized by employing this strategy. BobK But doesn't a glide path to conse...
by dbr
Fri Jul 25, 2014 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: If FF3 model is a true risk model, does it follow to buy

2: Three factors are not perfectly correlated and react to different stimuli - increasing diversification Diversification, when risk taken is compensated, is the only free lunch in investing. I tilt because the 3 factors have historically been compensated, and so my free lunch is multi-course... wi...
by dbr
Fri Jul 25, 2014 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: If FF3 model is a true risk model, does it follow to buy SV?
Replies: 17
Views: 838

Re: Make Income the Outcome

In the game of life there is ultimately no winning, as there's only one outcome. And maximizing spending is *a* goal but is not necessarily *the* only or even most important goal. It would be interesting to learn what percentage of folks have significant bequest motives. I suspect there's millions ...
by dbr
Fri Jul 25, 2014 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: Rules of thumb that shouldn't be

In your opinion, what rules of thumb are too often incorrect to be a good rule of thumb? Judging by the recent thread about tax adjustment and the wiki article on tax efficient asset location, some would probably include the following on the list: "stocks should go in taxable, bonds should go ...
by dbr
Fri Jul 25, 2014 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: Rules of thumb that shouldn't be
Replies: 30
Views: 2581

Re: If FF3 model is a true risk model, does it follow to buy

2: Three factors are not perfectly correlated and react to different stimuli - increasing diversification Diversification, when risk taken is compensated, is the only free lunch in investing. I tilt because the 3 factors have historically been compensated, and so my free lunch is multi-course... wi...
by dbr
Fri Jul 25, 2014 12:46 pm
 
Forum: Investing - Theory, News & General
Topic: If FF3 model is a true risk model, does it follow to buy SV?
Replies: 17
Views: 838

Re: Rules of thumb that shouldn't be

YES - The details vary by state, and I think the regs/laws may have changed in the last few years, but I was badly burned (and given incorrect information from an attorney) when I lost a civil judgment (business related contract/obligation) case and a very large amount (about $300,000) was seized f...
by dbr
Fri Jul 25, 2014 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: Rules of thumb that shouldn't be
Replies: 30
Views: 2581

Re: Make Income the Outcome

I think the message of this article and the previous discussion is that most financial professionals and all individual investors do not understand how to properly configure and explain an investment strategy that meats the actual needs of people saving for retirement. I think that observation in ge...
by dbr
Fri Jul 25, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: Make Income the Outcome

Could one even imagine? 14% tax free (on that balance). Well, if it was 1980 that was a real return of about 1% We have no idea if that man's investment choices enabled him to have the purchasing power he desired or not. If he wanted to spend, say, $500,000/year, inflation adjusted, the rest of his...
by dbr
Fri Jul 25, 2014 12:19 pm
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666

Re: Simplify usingVASIX

It would be best to go here and learn fundamentals of investing rather than to ask an opinion about a specific fund: http://www.bogleheads.org/wiki/Getting_started For example, that fund is 80% bonds and 20% stocks. On what basis would it be a good idea for you to invest at that asset allocation? Yo...
by dbr
Fri Jul 25, 2014 12:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Simplify usingVASIX
Replies: 2
Views: 330

Re: Rules of thumb that shouldn't be

So yes if you have one of these super plans that are about as common as left handed screwdrivers, take advantage. But I'm happy with the rule of thumb. +1. You shouldn't follow it if you have unusual circumstances, but institutional funds or a backdoor Roth that maybe 5% of people have to worry abo...
by dbr
Fri Jul 25, 2014 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Rules of thumb that shouldn't be
Replies: 30
Views: 2581

Re: The article on tax efficient placement needs to be rewri

It might be better for the Wiki to explain systematically how taxation of assets in different locations works rather than try to formulate a blanket statement about what anyone and everyone "should" do under all conditions.
by dbr
Fri Jul 25, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: The article on tax efficient placement needs to be rewri
Replies: 75
Views: 3922

Re: Rules of thumb that shouldn't be

Rules of thumb are really just "titles" for longer discussions that discuss in detail some subject in investing. As such, there are probably no rules of thumb that should not be. If someone is actually following a rule of thumb without more investigation of why's and wherefore's, then that...
by dbr
Fri Jul 25, 2014 10:23 am
 
Forum: Investing - Theory, News & General
Topic: Rules of thumb that shouldn't be
Replies: 30
Views: 2581

Re: Make Income the Outcome

Aptenodytes wrote:Another version of this was circulated here earlier.


Bob, in view of this, can you introduce some discussion to explain what is needed here that has not already been discussed.

I can see that the previous thread may not have been as satisfactory as one might have hoped.
by dbr
Fri Jul 25, 2014 10:04 am
 
Forum: Investing - Theory, News & General
Topic: Make Income the Outcome
Replies: 49
Views: 3666
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