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Re: Is rebalancing worth having bonds?

Yeah, the L 2050 fund wouldn't be a bad choice - it's currently not too far off from my proposed asset allocation and then it would be automated and I'd never have to think about it again. It would prevent me from trying to time the market on when I would be bringing bonds into the mix. L 2050 is a...
by grabiner
Wed Jul 30, 2014 10:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is rebalancing worth having bonds?
Replies: 18
Views: 1217

Re: Home Appraisal

The home appraisal is an integral part of the refinancing process and determines whether I reach a 20% LTV. Surprised that there is not much attention to detail. Sales of comprables in the area are perhaps the most important factor in appraising the property. The reason there is not much attention ...
by grabiner
Wed Jul 30, 2014 10:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Home Appraisal
Replies: 13
Views: 601

Re: bond duration and interest rate risk

From vanguard web site: Long term bond fund ( VWLTX) SEC yield is 2.57% , average duration 6.3 years Intermediate term fund ( VWITX) SEC yield 1.77% , average duration 4.8 years If rates do not budge at all, then the long term fund would come ahead of course because of the 0.8% extra yield ( which ...
by grabiner
Wed Jul 30, 2014 9:46 pm
 
Forum: Investing - Theory, News & General
Topic: bond duration and interest rate risk
Replies: 23
Views: 1596

Re: Muni fund premium?

When interest rates fall, bond prices rise. What is going on here is that Treasury rates fell much less this year than corporate and muni rates did; they didn't have much room to fall. Thus Total Bond Market, which holds a lot of Treasuries, did not get as much price appreciation as corporate and mu...
by grabiner
Wed Jul 30, 2014 9:38 pm
 
Forum: Investing - Theory, News & General
Topic: Muni fund premium?
Replies: 2
Views: 357

Re: Is rebalancing worth having bonds?

Rebalancing gives you a risk reduction relative to whatever allocation you have. If you decide to hold 60% stock and never rebalance, your portfolio will be riskier than one with 80% stock which is rebalanced, as you may have 80% stock rather than 60% in the next bear market. But you do pay a price ...
by grabiner
Wed Jul 30, 2014 9:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is rebalancing worth having bonds?
Replies: 18
Views: 1217

Re: Principal Residence = Poor Investment?

I was having a discussion with a friend the other day who is convinced that the home he lives in is a great investment. I was wondering if those with a bit more financial acumen could critique my analysis. Current market value = $600,000 PITI = $3,700/month Utilities = $330/month Landscaping/Mainte...
by grabiner
Tue Jul 29, 2014 10:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Principal Residence = Poor Investment?
Replies: 61
Views: 3278

Re: HSA Questions [Rolling over]

Using Roth IRA funds is not advisable as your Roth IRA has no conditions on how the tax free distributions must be spent. However, you can just withdraw from your Roth IRA (tax-free if it is a withdrawal of contributions) and contribute this money to your HSA (tax-deductible, and still tax-free if ...
by grabiner
Tue Jul 29, 2014 9:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA Questions [Rolling over]
Replies: 2
Views: 289

Re: Feasibility of tax arbitrage?

Last I checked the Growth and Income indexes each had turnovers in the 25%-33% range. Much higher than the 4% of TSM and 10% of large cap Index. This is to be expected as the indexes are reconstituted. Sooner or later the higher turnover is likely to result in capital gain distributions which are a...
by grabiner
Tue Jul 29, 2014 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: Feasibility of tax arbitrage?
Replies: 10
Views: 803

Re: Is tax deferment overvalued?

Can someone clear this up for me? Let's say that I invest into VTSAX (which is near 100% qualified dividends, correct me if I'm wrong) and that my long term capital gains tax rate is 0%. Would I essentially be paying zero taxes on this investment, even if it's in a taxable account? As long as your ...
by grabiner
Tue Jul 29, 2014 12:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Is tax deferment overvalued?
Replies: 20
Views: 2430

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

Before deciding whether to contribute to a 401K, IRA, or Roth; whether to pay a tax (and up to what bracket) to convert an IRA to a Roth; whether to take out a 401K loan; whether to pay down student loans or invest in a retirement account; and so on, I asked myself what $1 in each of these accounts...
by grabiner
Tue Jul 29, 2014 12:23 am
 
Forum: Investing - Theory, News & General
Topic: If you tax adjust, how has it changed your life?
Replies: 16
Views: 1885

Re: Feasibility of tax arbitrage?

If it's a Roth IRA, that makes sense. If it's a traditional (deductible) IRA, then upon eventual withdrawal, those dividends will be taxed at your ordinary income tax rate at the time of withdrawal, not at the qualified dividend rate that they would otherwise be taxed at if they were in a taxable a...
by grabiner
Tue Jul 29, 2014 12:17 am
 
Forum: Investing - Theory, News & General
Topic: Feasibility of tax arbitrage?
Replies: 10
Views: 803

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

David, it sounds like you're saying the impact of tax adjusting has been extremely small, not enough to make any meaningful difference? It's a 20% reduction in the dollar amount of any asset class I hold in my Roth IRA, compared to what I would hold with equal weights. At the moment, that affects o...
by grabiner
Tue Jul 29, 2014 12:02 am
 
Forum: Investing - Theory, News & General
Topic: If you tax adjust, how has it changed your life?
Replies: 16
Views: 1885

Re: Changing cost basis from Average Cost to Specific ID

Is it correct that the broker does not report basis to the IRS if the (long) positions were initiated in the early 2000's but closed out this year (or in other words there was some date stated in the legislation that positions initiated before 20?? do not have to be reported to the IRS? Yes, this i...
by grabiner
Sun Jul 27, 2014 10:39 pm
 
Forum: Investing - Theory, News & General
Topic: Changing cost basis from Average Cost to Specific ID
Replies: 6
Views: 470

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

I hold almost all of my REITs in my Roth IRA. My target allocation is 10%, and since I tax-adjust and the Roth IRA is a relatively small part of my portfolio, I have only 8% of the dollar value of my portfolio in REITs. The rest of my Roth IRA, and my HSA, are in value stocks (Vanguard's Value and S...
by grabiner
Sun Jul 27, 2014 8:50 pm
 
Forum: Investing - Theory, News & General
Topic: If you tax adjust, how has it changed your life?
Replies: 16
Views: 1885

Re: If you own a car, do you have a car payment?

I'm new to bogleheads, but was assuming that people here would view car loans the way corporations look at weighted average cost of capital. For me, when financing the car is cheaper than existing financing options I have (or cheaper than risk-free investments), I think it makes sense to do so. Usu...
by grabiner
Sun Jul 27, 2014 8:29 pm
 
Forum: Personal Consumer Issues
Topic: If you own a car, do you have a car payment?
Replies: 112
Views: 7287

Re: Comparing home loan offers

I liked the responses of meg77, dm200, and anil686 - can't add much more - my personal experience aligns with what Anil is saying in that lenders provide estimated closing costs when you're fishing and so getting a mock HUD from each prospective lender is apples to apples in a sense . I recall that...
by grabiner
Sun Jul 27, 2014 8:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Comparing home loan offers
Replies: 9
Views: 904

Re: Cost basis and mutual fund exchanges

And kaneohe has it right if you think of basis in terms of per share. He is also correct when he says the basis of the lot doesn't change. I think of basis by lot; I think you should too. It is a lot simpler to use lots. I buy some shares of AFund Investors for $2000; the basis is $2000. The shares...
by grabiner
Sun Jul 27, 2014 7:49 pm
 
Forum: Investing - Theory, News & General
Topic: Cost basis and mutual fund exchanges
Replies: 4
Views: 606

Re: Vanguard eliminates fee on FTSE All-World ex-US Small-Ca

Next step is admiral shares. Get that ER down to .2 and I might have to think about sell my international explorer in my IRA. This is one fund which has long been worth holding as an ETF. I have held the ETF since it started in 2009. (I didn't directly replace International Explorer; I switched fro...
by grabiner
Sun Jul 27, 2014 7:40 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard eliminates fee on FTSE All-World ex-US Small-Cap
Replies: 24
Views: 3514

Re: AMZN's magical status

I gazed up at the enormous face. Eighteen years it had taken me to learn what kind of smile was hidden below the thinning hair. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two chai-scented tears trickled down the sides of my nose. But it was all right, ...
by grabiner
Sun Jul 27, 2014 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: AMZN's magical status
Replies: 26
Views: 2755

Re: Changing cost basis from Average Cost to Specific ID

Vanguard will have only average-cost information for the non-covered shares, even if you never sold them or sold them with some other method. Therefore, if you sell non-covered shares, your 1099 will list an incorrect gain. The incorrect gain will not be reported to the IRS. I encountered this in 20...
by grabiner
Sun Jul 27, 2014 7:01 pm
 
Forum: Investing - Theory, News & General
Topic: Changing cost basis from Average Cost to Specific ID
Replies: 6
Views: 470

Re: so you're the world's greatest trader

The author doesn't understand the tax laws. How can the big boys do this? Mutual firms and hedge funds have a huge advantage that you, the individual investor, do not. They are a business. As such, they pay taxes on their total net gains. Losing trades offset winning trades dollar for dollar. Mutual...
by grabiner
Sun Jul 27, 2014 6:47 pm
 
Forum: Investing - Theory, News & General
Topic: so you're the world's greatest trader
Replies: 20
Views: 1519

Re: Calculus in determining Roth vs. Traditional?

So I get the basic principle: Invest in a Roth if you are in a low income bracket and expect to be a higher income bracket at retirement. But what if you're in a middle income bracket--say, 25%? I assume you want to put some money into a Traditional account to lower your taxable income and then som...
by grabiner
Sun Jul 27, 2014 6:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculus in determining Roth vs. Traditional?
Replies: 8
Views: 862

Re: Fund SEP or Roth first?

Wiki article link: Traditional versus Roth Usually, in a 25% bracket plus 5% state, a traditional investment is better; you might retire in a 15% bracket, or in the 25% bracket in a state which doesn't tax IRA withdrawals. However, you should think in terms of the amount you can invest after tax. If...
by grabiner
Sun Jul 27, 2014 6:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fund SEP or Roth first?
Replies: 1
Views: 155

Re: Is tax deferment overvalued?

Looking forward I am avoiding high RMDs by the conversions. Tax deferred accounts have been described as tax time bombs. I hope young people are putting as much as they can in Roth accounts because there is no guarantee that your income tax will be lower as you age and retire. You will benefit from...
by grabiner
Sun Jul 27, 2014 6:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is tax deferment overvalued?
Replies: 20
Views: 2430

Re: Is tax deferment overvalued?

BUT, the dip in fixed income yields the last few years definitely makes Roth IRAs seem less attractive. I particularly think that backdoor Roths are not worth messing with unless you are fairly young, fixed income yields go back up, and you have no previous funds in (deductible) Traditional IRAs. T...
by grabiner
Sun Jul 27, 2014 1:50 am
 
Forum: Personal Finance (Not Investing)
Topic: Is tax deferment overvalued?
Replies: 20
Views: 2430

Re: Stop Extra Payment Toward Mortgage?

My home is currently worth more than what I owe. Its worth about $30K more than what I owe. Do I have to pay back the HELOC back with interest? A HELOC is a line of credit, like a credit card, which allows you to borrow money as needed. Thus you must pay back anything you borrow with interest (alth...
by grabiner
Sun Jul 27, 2014 1:46 am
 
Forum: Personal Finance (Not Investing)
Topic: Stop Extra Payment Toward Mortgage?
Replies: 31
Views: 1985

Re: Is tax deferment overvalued?

But I wonder if the benefits of tax deferment are not overblown. For a person who has a significant amount of equities, a tax deferred retirement plan can be an unfortunate way to convert favorably taxed capital gains into less favorably treated ordinary income. The advantage is the tax deduction o...
by grabiner
Sun Jul 27, 2014 1:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Is tax deferment overvalued?
Replies: 20
Views: 2430

Re: Advice proceeding with 100% taxable portfolio.

What about 6% income to 401k for match, max roth, rest to taxable? Is this better than 6% + 5500 to 401k and rest in taxable? It seems like Roth space is more valuable than 401k since returns as well as distributions are tax-free. Where the 401k is taxed when distributed. That was kind of my logic ...
by grabiner
Fri Jul 25, 2014 7:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice proceeding with 100% taxable portfolio.
Replies: 24
Views: 1594

Re: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL

While Schwab makes SCHC have a lower expense ratio, Schwab does not help it have a higher average daily volume. SCHC does not meet my criteria for daily volume. I don't think anyone wants to make a trade for half the daily volume in a security. One may think "I'll never own that much SCHC"...
by grabiner
Fri Jul 25, 2014 7:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL)?
Replies: 37
Views: 1687

Re: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL

However, I also wanted to make the point that SCZ, even though it has a lower expense ratio than VSS, is not less expensive in the context of a full portfolio. What are the expense ratios of these ETFs? I think VSS has an e.r. that is half that of SCZ and about the same as SCHC. Post corrected; it ...
by grabiner
Fri Jul 25, 2014 7:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL)?
Replies: 37
Views: 1687

Re: Should I use margin to buy a balanced fund?

It's also just a nonsensical statement because if people strictly avoided leverage, very few could ever buy a home. And no, that's not 'different', fundamentally. A home mortgage is definitely leverage. It can be used wisely, but obviously can be used unwisely. Same with other forms of leverage. A ...
by grabiner
Fri Jul 25, 2014 7:04 pm
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 188
Views: 9525

Re: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL

If you do want a developed-only ETF, it makes more sense to use Schwab's SCHC, which tracks a different developed-markets index for lower cost than VSS. (The cost advantage goes away if you have to add a small-cap emerging markets ETF to get a matching allocation, as those ETFs are much more expens...
by grabiner
Fri Jul 25, 2014 6:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL)?
Replies: 37
Views: 1687

Re: Should I use margin to buy a balanced fund?

And, of course, there is some extra value in getting a tax deduction. I've been ignoring that. It doesn't necessarily change the value of the portfolio, but it could allow me more disposable income to throw at it. The tax deduction is a wash; you can deduct your margin interest, but you pay tax on ...
by grabiner
Fri Jul 25, 2014 1:00 am
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 188
Views: 9525

Re: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL

I had a head to head comparison for VSS and SCZ over morningstar. Looks like SCZ has been consistently generating higher SHarpe, alpha and more tax efficient than VSS? Alpha and Sharpe ratio aren't meaningful when you compare funds in different asset classes; the proper measurement of alpha is rela...
by grabiner
Fri Jul 25, 2014 12:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL)?
Replies: 37
Views: 1687

Re: Old Mortgage about to 'fall off' credit report - now wha

In generating a free credit report for myself last week, I noticed that my old mortgage is about to age out of my report (10 years). This means I will only have credit cards as my sole form of debt. Does anyone here have any fact-based opinion if this will negatively affect my score? I only care be...
by grabiner
Thu Jul 24, 2014 8:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Old Mortgage about to 'fall off' credit report - now what?
Replies: 13
Views: 1411

Re: Please help settle an argument

Count the cost of extra insurance. Loans may make you take out comprehensive coverage, which you might not want to carry as a boglehead that drives conservatively. It could rival your interest cost, if you are young and male it could be prohibitive. When I was young some years I paid $2000 in insur...
by grabiner
Thu Jul 24, 2014 1:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Please help settle an argument
Replies: 23
Views: 1950

Re: Advice: Switched Job, New Company has no 401k Till Octob

Welcome to the forum! It won't cost much to wait while you learn what to do. You might decide that it would be better to roll your old 401(k) into an IRA, if you have better options in the IRA than in the new 401(k). But the cost of waiting is trivial. If you keep your investments in similar funds, ...
by grabiner
Thu Jul 24, 2014 12:53 am
 
Forum: Personal Finance (Not Investing)
Topic: Advice: Switched Job, New Company has no 401k Till October
Replies: 2
Views: 281

Re: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL

Would you mind giving more pointer where I could find how many % is the 'qualified dividend income' within an ETF? From the Vanguard Tax Center, under Information for specific Vanguard funds: Qualified dividend income—2013 year-end figures Changing the year in the link works for 2009-2012. Note tha...
by grabiner
Thu Jul 24, 2014 12:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL)?
Replies: 37
Views: 1687

Re: Need Guidance

Are you eligible for PSLF? https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service Yes, we are eligible but we have to change how we structured the debt on our loans. It is one of my priorities once we get access to that loan. We will not be discharged from bankruptcy f...
by grabiner
Wed Jul 23, 2014 10:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need Guidance [Chapter 7 Bankruptcy]
Replies: 7
Views: 731

Re: Hw many credit cards to own?

But you shouldn't care; both of those scores are good enough that you won't be denied credit or charged a higher rate based on the score. (The Trans Union score used by Credit Karma is on the same range as many versions of FICO, but it tends to be lower, which is why Credit Karma considers 750+ to ...
by grabiner
Wed Jul 23, 2014 9:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Hw many credit cards to own?
Replies: 69
Views: 4138

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

http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement The entire article is written with the implicit assumption that it's better to hold bonds in a tax-advantaged space because of how the gains are taxed. Only a small section is provided with criticism of this idea, but without...
by grabiner
Wed Jul 23, 2014 9:46 pm
 
Forum: Investing - Theory, News & General
Topic: The article on tax efficient placement needs to be rewri
Replies: 75
Views: 4068

Re: Do you own a DOW30 or NASDAQ100 index fund?

The problem with these funds isn't the number of companies, but the narrow focus. The NASDAQ 100 is heavily weighted to technology, and the Dow 30 is 30 huge industrial companies. A narrow focus is OK if it fits your needs for that one investment. If you need a large-cap growth or value fund, Vangua...
by grabiner
Wed Jul 23, 2014 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: Do you own a DOW30 or NASDAQ100 index fund?
Replies: 14
Views: 748

Re: Vanguard Account Owners - has this happened to you?

There are also times that what happens isn't Vanguard's responsibility. I had a Vanguard 403(b) with an old employer, and I had tracked it for several years when it disappeared. I asked Vanguard what had happened, and they forwarded me a note from the old employer (which apparently didn't have my ne...
by grabiner
Wed Jul 23, 2014 9:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Account Owners - has this happened to you?
Replies: 17
Views: 2635

Re: Do you split in-state and fed munis? If so, how?

I am in a minority. I only use CA IT TE. Many others recommend no more than 50% in CA, the rest in National. For me, most of my bonds are not in taxable, so the amounts just aren't that big. I think at the peak, I was 50% CA muni and 50% taxable in tax-deferred accounts (if you can make sense of ta...
by grabiner
Wed Jul 23, 2014 9:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you split in-state and national munis? If so, how?
Replies: 16
Views: 675

Re: Ameriprise Wrap Fees includes cash??

There can be a legitimate business reason for including cash in the wrap/AUM fee. An argument can be made that by making the wrap fee apply to cash the advisor has less of an incentive to acquire investments for the purpose of generating a wrap/AUM fee. Just like there might be legitimate reasons t...
by grabiner
Wed Jul 23, 2014 9:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ameriprise Wrap Fee includes cash??
Replies: 3
Views: 348

Re: AA for a spoiled young buck

William4u - Thanks for the input. I sold about half of the American Century funds two years ago to use towards my house down payment. I'll sell ~$5 each of the next few years to keep under the next bracket, then. Janus I will plan on leaving alone until the American Century fund is dry. If you are ...
by grabiner
Wed Jul 23, 2014 8:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: AA for a spoiled young buck
Replies: 26
Views: 3838

Re: Hw many credit cards to own?

In terms of credit score, I seem to have cracked the Vantagescore since I have a perfect 990 . My Creditkarma Transunion score is only 772 out of 850, though. I'm really not sure what I could possibly do to increase it. CK simulator doesn't help, nothing I can do will increase the score by even 1 p...
by grabiner
Wed Jul 23, 2014 8:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Hw many credit cards to own?
Replies: 69
Views: 4138

Re: Your allocation to Emerging Market small cap ETFs?

I used to own EWX, but switched to EEMS after EWX distributed significant capital gains for several years. (I also had the chance to take a small capital loss when I switched.) EEMS has not yet distributed a capital gain, so it has been very tax-efficient. I would hold EM small-cap as 1/4 of my inte...
by grabiner
Wed Jul 23, 2014 12:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Your allocation to Emerging Market small cap ETFs?
Replies: 12
Views: 1188

Re: Raft Stategy

They say if you take money out of a taxable account, or like monthly pension annuity, then that is what makes your SS to be taxed at 85%. This is a misunderstanding. If you have high enough income in retirement, some of your Social Security is taxable , but the taxable fraction is then taxed at you...
by grabiner
Wed Jul 23, 2014 12:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Raft Stategy
Replies: 32
Views: 3385

Re: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL

I hold VEA as a legacy holding from when it was Tax-Managed International and had 100% qualified dividends; at that time, 70% VEA/15% VWO/15% VSS was probably better in a taxable account than 100% VXUS. I haven't had any need to add to that fund recently; I am currently slightly underweighted in eme...
by grabiner
Tue Jul 22, 2014 11:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you split your VEU (into VEA+VWO) & VEA (into VGK+VPL)?
Replies: 37
Views: 1687
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