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Re: Bad(?) advice given about Target Date Retirement funds

Frankly, I like them both.

We use TD funds in traditional IRA and TSP for the drawdown in risk.

I use LS Moderate Growth as the Core of my Roth. Different horizon since I don't think we'll need it.
by dharrythomas
Mon Aug 18, 2014 8:03 pm
 
Forum: Investing - Theory, News & General
Topic: Bad(?) advice given about Target Date Retirement funds
Replies: 100
Views: 5734

Re: Withdrawl from Target Retirement or Life Strategy Fund

If your modifying your asset allocation by withdrawals you are market timing. It may or may not work, depending on timeframe and how you define work. But rest assured that you've timed the market and changed the risk level and expected return of your portfolio. A balanced Vanguard fund will at least...
by dharrythomas
Sun Aug 10, 2014 2:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 33
Views: 2797

Re: Understanding implications of Shiller CAPE on retirement

The best use that I can manage is to lower my return expectations when the CAPE P/E is high. I'm paying more per unit of earnings than if the P/E were lower, if I pay more the income share left for me is less. As far as market timing, I thought the market was too frothy in the late 80s. If I'd waite...
by dharrythomas
Sat Aug 09, 2014 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: Understanding implications of Shiller CAPE on retirement
Replies: 27
Views: 2349

Re: Maxing roth 401k vs trad 401k in high income tax bracket

A Roth account is also more valuable if there is any chance that you may leave it to heirs.

If I have some left, my preferred split is traditional to the church, taxable and Roth to the kids.
by dharrythomas
Thu Aug 07, 2014 4:32 pm
 
Forum: Investing - Theory, News & General
Topic: Maxing roth 401k vs trad 401k in high income tax bracket
Replies: 13
Views: 1243

Re: Maxing roth 401k vs trad 401k in high income tax bracket

Yes. Money in a Roth is more valuable than money in a traditional account or in a taxable account. If you either max out the accounts or are saving a percentage, you put more aside using a Roth account. Like many people, life style and savings are a trade off. DW will let me set aside 15% in TSP plu...
by dharrythomas
Thu Aug 07, 2014 4:27 pm
 
Forum: Investing - Theory, News & General
Topic: Maxing roth 401k vs trad 401k in high income tax bracket
Replies: 13
Views: 1243

Re: Lifestrategy fund vs. slice-and-dice in 401k

Either is OK.

If you like to play with it, s/d. If you want to "fire and forget", LSG. If you can access admiral shares, s/d is a little cheaper.

You may (or may not depending on your horizon) get a small extra return from the small and REIT.
by dharrythomas
Thu Aug 07, 2014 4:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lifestrategy fund vs. slice-and-dice in 401k
Replies: 8
Views: 583

Re: Vanguard Star Fund Vs. Lifestrategy Moderate Growth Fund

The only other difference is that STAR has a few percentage points more equity. Either is very good.
by dharrythomas
Thu Aug 07, 2014 4:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Star Fund Vs. Lifestrategy Moderate Growth Fund
Replies: 2
Views: 591

Re: Mutual Fund for a 10 year-old

I recommend LifeStrategy Growth or the Total World Stock Index. Target Retirement, LifeStrategy Moderate Growth, STAR, or Wellington are not bad options either depending on risk tolerance. Might want to hide some of the volitility in a balanced fund for a new investor. Total World Stock Index is the...
by dharrythomas
Thu Aug 07, 2014 3:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Mutual Fund for a 10 year-old
Replies: 10
Views: 676

Re: Maxing roth 401k vs trad 401k in high income tax bracket

I use the Roth though SC taxes are lower than CA. I'm saving more than I would the other way and I like knowing how much is mine as opposed to the uncertainty of future tax rates in a traditional account. Will we pay more than we have to? Time will tell. People here will do a great deal of math to p...
by dharrythomas
Thu Aug 07, 2014 2:51 pm
 
Forum: Investing - Theory, News & General
Topic: Maxing roth 401k vs trad 401k in high income tax bracket
Replies: 13
Views: 1243

Re: I have access to a military TSP...worth it?

I strongly recommend the Uniformed Services TSP. I just retired this year after a 30 year active and reserve career. The TSP was a great addition to the benefit package though it came later in my career and contributions were restricted in the beginning. The Roth option recently added gives you choi...
by dharrythomas
Sun Jul 27, 2014 7:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: I have access to a military TSP...worth it?
Replies: 13
Views: 1091

Re: Using retirement assets and inheritance wisely

I agree with Paul. You're doing fine except that it doesn't appear that you're close to your stated asset allocation. I'd pay off the car loan, do or buy something the two of you want and put the rest in a LifeStrategy fund. You should ask yourselves: "Why are we still saving?" If you've g...
by dharrythomas
Mon Jul 21, 2014 9:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using retirement assets and inheritance wisely
Replies: 12
Views: 1803

Re: College Kid Looking for some Vanguard Advice

If you have earned income a Roth is a great idea in your situation. Depending on the amount of earned income you anticipate for this year either a Target Retirement or a LifeStrategy fund would be outstanding. Low cost, indexed, broad diversification.

Good luck.
by dharrythomas
Sun Jul 20, 2014 9:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: College Kid Looking for some Vanguard Advice
Replies: 7
Views: 943

Re: TSP vs Vanguard

A big part of the difference is that the TSP reaches its terminal asset allocation at the date, it is a "to" fund. Vanguard is a "through" fund which reaches its terminal asset allocation about 7 years after the target date. Most of the rest is accounted for by the fact that Vang...
by dharrythomas
Sun Jul 20, 2014 9:04 pm
 
Forum: Investing - Theory, News & General
Topic: TSP vs Vanguard
Replies: 10
Views: 1177

Re: Teaching Kids the Rules of Investing.

4 biggest issues: 1) Debt adds risk 2) Savings rate is under your control and is as critical as rate of return 3) Expenses (fees and taxes) come directly from your return) 4) Time value of money and compounding (both returns and expenses) If they master those concepts AND apply them, the rest will t...
by dharrythomas
Sat Jul 12, 2014 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: Teaching Kids the Rules of Investing.
Replies: 17
Views: 2014

Re: Bernstein: Don’t Bother With International Bonds

It doesn't bother me that we own some in LifeStrategy and Target Retirement, but I don't think the potential benefit is worth the cost and effort to do it on my own.
by dharrythomas
Sun Jun 29, 2014 3:29 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: Don’t Bother With International Bonds
Replies: 112
Views: 9217

Re: Any experience with Vanguard Life Strategy?

I agree with many of the posters above. 1) At your age you should probably invest in LS Moderate Growth (if you don't want to change it for 30 years. I think that's close to the 'sweet spot'. 2) I believe that periodic investment as you earn money is more important than picking the best investment. ...
by dharrythomas
Sun Jun 29, 2014 3:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Any experience with Vanguard Life Strategy?
Replies: 25
Views: 2431

Re: JP Morgan botched 401k distribution

I don't think this is a JP Morgan problem. I don't think what you want to do is legal. I think that any distribution has to come out in proportion to the funds in the account, pre and post tax. It's the problem of doing a back door Roth if you've already got a traditional IRA. The only good work aro...
by dharrythomas
Fri Jun 27, 2014 9:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: JP Morgan botched 401k distribution
Replies: 36
Views: 2355

Re: Improving the TSP [for current participants]

If they want people to leave money in the TSP, they need to expand withdrawal options. My one partial withdrawal will be used for the Roth portion. I might as well transfer the traditional at the same time to avoid some of the restrictions.
by dharrythomas
Thu Jun 26, 2014 10:08 pm
 
Forum: Investing - Theory, News & General
Topic: Improving the TSP [for current participants]
Replies: 34
Views: 3784

Re: If chasing market performance is bad...

We started investing in the late 80's. The problem with timing is that I thought the markets were high then with new records all the time. Based on the history at the time, we've never. Been close to what I thought was a reasonable price. Paul Volker changed the world by breaking inflation but we we...
by dharrythomas
Sat Jun 21, 2014 6:43 pm
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4827

Re: "Three Simple Rules of Investing"

Taylor,

Thanks. A valuable contribution as always.

Harry
by dharrythomas
Sat Jun 21, 2014 5:21 pm
 
Forum: Investing - Theory, News & General
Topic: "Three Simple Rules of Investing"
Replies: 6
Views: 1676

Re: out of residency since 07 - please advise

I'd pay off the student loans and sell the rental house. You will have reduced your risk significantly and increased free cash flow every month (that should put you $5-6K per month ahead of where you were last year). Then I'd work on the mortgage, remember to deduct the mortgage you give up the stan...
by dharrythomas
Sat Jun 21, 2014 2:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: out of residency since 07 - please advise
Replies: 29
Views: 3814

Re: Life Strategy Funds vs. 3 Fund portfolio

Rex, How comfortable are you with the markets and managing money? If something happens to you, what is your wife's level of interest/knowledge? If this is your first 'real' investment, a balanced fund will hide some of the turbulence. That makes it easier for some folks to sleep at night. For a smal...
by dharrythomas
Sat Jun 21, 2014 2:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Life Strategy Funds vs. 3 Fund portfolio
Replies: 13
Views: 2175

Re: Job loss

Sorry about the job loss. It's something I worry about. Looks like you need some type of job to cover expenses for several years or cut your expenses. There is nothing you can reasonably do with $1M that will cover your expenses. Leaving the funds in the 401(k) may give you some penalty free withdra...
by dharrythomas
Sat Jun 21, 2014 1:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Job loss
Replies: 40
Views: 2531

Re: Developing a sound framework for optimal asset allocatio

I don't read too much previous work. I try to be original. That explains a great deal. Most professional researchers begin with a literature search. You'll make more progress if you understand what went before you and build on that rather than start from scratch. There was at one time a number of p...
by dharrythomas
Sun Jun 15, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: Developing a sound framework for optimal asset allocation
Replies: 44
Views: 2805

Re: Article: 60/40 produces "same" return with ~half the ri

Of course returns are not constant and neither are investors. The sequence of returns makes a big difference in the final balance. The other thing that kills investors with 100% stocks is not being able to handle the turbulence particularly as balances increase. It's not the annual return that is th...
by dharrythomas
Sun Jun 08, 2014 2:26 pm
 
Forum: Investing - Theory, News & General
Topic: Article: 60/40 produces "same" return with ~half the risk
Replies: 46
Views: 5520

Re: Intra-Family Mortgage

We did it twice with my mother. She won't do stocks and I couldn't refinance our mortgage and after fees have it cost less while we were paying it off early. We did did a no cost refi, cut our interest cost, paid her a rate of interest much higher than her CDs, kept the same payment and cut the numb...
by dharrythomas
Sun Jun 08, 2014 1:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Intra-Family Mortgage
Replies: 32
Views: 2794

Re: Another Reason to Index

There is nothing inherently incompetent about a concentrated portfolio. Greater risk for greater potential reward. Most of us don't chose that path, but look at the Sequoia Fund. Greater concentration allowed for the possibility of market beating returns. If your ideas are good you only need a few. ...
by dharrythomas
Sat Jun 07, 2014 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: Another Reason to Index
Replies: 26
Views: 2625

Re: Which is superior? Slice & Dice or [Total Market]?

You pay your money you take your chances. Most of the "experts" whose opinions I value consider the factors a RISK story, so not free money. Looking at markets from a world-wide historical perspective, returns and correlations vary and markets/ countries/ civilizations can collapse and not...
by dharrythomas
Sat Jun 07, 2014 11:49 am
 
Forum: Investing - Theory, News & General
Topic: Which is superior? Slice & Dice or [Total Market]?
Replies: 48
Views: 3800

Re: How much does cost matter? (Plotting ER vs. Alpha)

For an individual fund, you can think of Alpha as being variable and temporary. You should think about the expense ratio as being constant and permanent. While that model is not exact, it's close enough to the real world for a decision making model.
by dharrythomas
Sat Jun 07, 2014 11:26 am
 
Forum: Investing - Theory, News & General
Topic: How much does cost matter? (Plotting ER vs. Alpha)
Replies: 15
Views: 1118

Re: Am I thinking this correctly? Reinvesting in IRA's

Hunter1801,

Try to reword your question. If sscritic did't answer your question, then I don't understand what you asked.

You may be using the word "re-invest" imprecisely. If we understand the question we can try to help.

Harry
by dharrythomas
Fri Jun 06, 2014 10:23 pm
 
Forum: Investing - Theory, News & General
Topic: Am I thinking this correctly? Reinvesting in IRA's
Replies: 21
Views: 1274

Re: Interesting artcle on inflation and mortgages

How do you calculate into your spreadsheet the additional RISK of a fixed payment, even if it works for most people most of the time how does an individual account for the risk of unemployment. Many have drawn down retirement accounts to make debt payments. And it just seems to work that when people...
by dharrythomas
Sun Jun 01, 2014 7:38 am
 
Forum: Investing - Theory, News & General
Topic: Interesting artcle on inflation and mortgages
Replies: 14
Views: 1251

Re: Disclaiming a Roth IRA inheritance

Not bad. The PV calculations are only valid IF the parties stick to the RMD. Real life can skew the projections as can sequence of returns. Regardless if the kids let it compound longer and the rate of return is greater than inflation, any asset would be worth more to the kids. Are there generation ...
by dharrythomas
Sat May 31, 2014 10:50 am
 
Forum: Investing - Theory, News & General
Topic: Disclaiming a Roth IRA inheritance
Replies: 26
Views: 2205

Re: Should you be worried about record profit margins

Larry,

Thanks. Particularly for the reminder that if I see it and there are many articles written on it, it's probably priced in.

Harry
by dharrythomas
Sun May 25, 2014 9:27 pm
 
Forum: Investing - Theory, News & General
Topic: Should you be worried about record profit margins
Replies: 20
Views: 2258

Re: We won best paper from S&P SPIVA worldwide!

Rick,

Congratulations and thanks for what you do.

Harry
by dharrythomas
Fri May 23, 2014 8:42 pm
 
Forum: Investing - Theory, News & General
Topic: We won best paper from S&P SPIVA worldwide!
Replies: 39
Views: 3223

Re: The Three Fund Portfolio: "Make more money and worry les

Taylor,

The article is on target. Thank you for all you do.

Harry
by dharrythomas
Tue May 20, 2014 9:37 pm
 
Forum: Investing - Theory, News & General
Topic: The Three Fund Portfolio: "Make more money and worry less"
Replies: 8
Views: 2558

Re: Is the Vanguard Balanced Index Fund all I need?

If you are 38 with only $17K set aside and a modest income with no pension, I'd try to save 15%. A better way to calculate would be to figure out how much you want to have saved then calculate how much you need to save at your expected rate of return to reach your goal. I'd go with a lower than hist...
by dharrythomas
Fri May 16, 2014 10:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is the Vanguard Balanced Index Fund all I need?
Replies: 59
Views: 5878

Re: Books for someone who is not that interested

The Automatic Millioniare I also like many of the other books mentioned. This shows that it's hard because of the discipline :shock: required but not overly complicated. Make it automatic and worry about the rest of your life. My daughter with no interest and my daughter in the Econ PhD program at C...
by dharrythomas
Tue May 13, 2014 8:28 pm
 
Forum: Investing - Theory, News & General
Topic: Books for someone who is not that interested
Replies: 48
Views: 3419

Re: heirs and bequest motivation

In 'The Millioniare Next Door', the concept is called "economic out patient care". In general the result is less earning, less savings, and dependence. Not what I raised my kids for.

Whatever you decide, good luck.

Harry
by dharrythomas
Sat May 10, 2014 8:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: heirs and bequest motivation
Replies: 52
Views: 3826

Re: what should I do with my whole life policy

You can do what you want. It appears to me that you're paying a good bit for a little insurance. You're making a bet on when you'll die and the insurance company makes money on fees and float (and increasing life expectancy). My annual statements show an administration fee and commission to the agen...
by dharrythomas
Sat Apr 19, 2014 11:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: what should I do with my whole life policy
Replies: 24
Views: 2489

Re: Book for 20 Year Old Beginner

The Richest Man in Babylon The Automatic Millionaire The Millionaire Next Door The Total Money Makeover (though there are problems with the investment recommendations) The biggest piece of the puzzle is to set a consistent, early, and relatively aggressive savings and investing plan early and minimi...
by dharrythomas
Fri Apr 18, 2014 9:41 pm
 
Forum: Investing - Theory, News & General
Topic: Book for 20 Year Old Beginner
Replies: 16
Views: 1392

Re: "If You Can: How Millennials Can Get Rich Slowly"-- A Ge

Thank you both, Bill & Taylor!

You continue to teach me that the more I learn the more I realize how small my circle of competency really is! :oops:

Harry
by dharrythomas
Sun Apr 13, 2014 4:40 pm
 
Forum: Investing - Theory, News & General
Topic: "If You Can: How Millennials Can Get Rich Slowly"-- A Gem
Replies: 4
Views: 2394

Re: retired at 37?

I don't like the odds on 4% withdrawals starting at 37. That's a 50-60 year planning horizon. :shock:
by dharrythomas
Sun Mar 30, 2014 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: retired at 37?
Replies: 52
Views: 5513

Re: Winners of 2013: Boring Investors

If you want to be exact, the benchmarks are 65/35 for Wellington and 35/65 for Wellesley. Though according to the latest reports, Wellesley is close to 40% equity currently. For what it's worth, they benchmark the stocks against the S&P 500 rather than one of the value indexes. Good luck. Harry
by dharrythomas
Sun Mar 30, 2014 6:04 pm
 
Forum: Investing - Theory, News & General
Topic: Winners of 2013: Boring Investors
Replies: 14
Views: 2685

Re: 24, starting new job - advice please!

I think you're fine except that your asset location is more like 96/4 than 90/10. You are also overweight large US growth stocks. You're making a good start. Continue to learn and and you have plenty of time to make necessary adjustments.

Good luck.

Harry
by dharrythomas
Sat Mar 29, 2014 4:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: 24, starting new job - advice please!
Replies: 19
Views: 1169

Re: How important are Int'l Bonds?

Depends on what you offer right now and what offering you'd remove. I think that a 401(K) that would be the best for the average employee would have an extremely limited fund offering of only either the Target Retirement series or the LifeStrategy series. While some of us would like to play with mor...
by dharrythomas
Sat Mar 22, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: How important are Int'l Bonds?
Replies: 44
Views: 4313

Re: Max TSP or Diversify Elsewhere?

I think the L fund is fine. I use it. Remember, all the allocations and advice are based on historical data and the one thing that is clear in that data is that correlations and relative returns vary over time and time period. Another is that sometimes the changes are permanent (at least from the pe...
by dharrythomas
Sat Mar 22, 2014 1:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Max TSP or Diversify Elsewhere?
Replies: 21
Views: 2851

Re: 10 Reasons to take your pension annuity over a lump sum

My prime consideration is to ensure a steady income stream for the spouse. I signed up for my Army Reserve pension at immediate annuity upon my death max rate and intend to do the same for my next pension at decision time. That plus social security should give her enough income to live on even after...
by dharrythomas
Sat Mar 22, 2014 1:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: 10 Reasons to take your pension annuity over a lump sum
Replies: 34
Views: 5279

Re: Target Retirement vs. Underlying Funds

There are several reasons that Target Retirement funds are less tax efficient than individual components. First, they have taxable bond income. Many try to keep taxable bonds in tax free or tax deferred accounts. Second, you lose some overseas tax benefits by investing in fund of funds. Third, becau...
by dharrythomas
Sat Mar 22, 2014 12:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Target Retirement vs. Underlying Funds
Replies: 3
Views: 348

Re: Can I beat 2.75% guaranteed via mortgage paydown?

We paid off a 3% mortgage early. If you're saving/investing enough, paying early reduces risk. In five years it provides you with free cash flow for either spending or savings. I gave 2/3 to DW and added 1/3 to what we're saving/investing. We'll have plenty. You only know the best choice in the rear...
by dharrythomas
Sat Mar 15, 2014 11:23 pm
 
Forum: Investing - Theory, News & General
Topic: Can I beat 2.75% guaranteed via mortgage paydown?
Replies: 73
Views: 5023

Re: Dynamic Asset Allocations or do 'Valuations Matter'

Valuations matter. BUT the markets have made a series of record highs over the last 30 years...people thought the market was high in the mid-80s. It's hard to time and the rules, multipliers, and correlations change over time, so does the equity risk premium. The changes are only apparent AFTER the ...
by dharrythomas
Sat Mar 15, 2014 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: Dynamic Asset Allocations or do 'Valuations Matter'
Replies: 30
Views: 2700
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