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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 grabiner
Mon Oct 20, 2014 10:57 pm
 
Forum: Investing - Theory, News & General
Topic: Why is VIPSX (TIPS) active?
Replies: 12
Views: 531

Re: Why is VIPSX (TIPS) active?

When the fund started, there weren't many different TIPS, so an index wouldn't have been a good choice; its duration would change substantially every time a new TIPS was issued, and would decrease over time if no new TIPS were issued. For example, if the fund had a 10-year average maturity, and a ne...
by grabiner
Mon Oct 20, 2014 10:01 pm
 
Forum: Investing - Theory, News & General
Topic: Why is VIPSX (TIPS) active?
Replies: 12
Views: 531

Re: 2nd Opinions on Bond Alternatives?

I've typically heard some iffy things about non-traded REITS and Annuities. I am a little skeptical because I've heard these can carry high fees, and offer low performance. However the reasoning behind these (as explained to me) makes a little bit sense: with interest rates as they are (and the fac...
by grabiner
Sun Oct 19, 2014 11:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2nd Opinions on Bond Alternatives?
Replies: 25
Views: 1217

Re: Help Create a Portfolio Generating 2,500 a month on 600K

abyan wrote:But woukdnt they have to either sell off the IRA to buy the annuity, or sell off the brokerage account (which they don't want to do).


You can buy an annuity in an IRA; the distributions from the annuity substitute for the RMDs you would otherwise take out.
by grabiner
Sun Oct 19, 2014 8:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help Create a Portfolio Generating 2,500 a month on 600K
Replies: 22
Views: 3666

Re: Rebalancing with dividends

You may not want to automatically reinvest dividends; you do want to reinvest them when you receive them, but not necessarily in the same place. For example, I am currently over my target weight in US stock, and underweight in international small-cap and emerging markets. Therefore, I didn't want my...
by grabiner
Sun Oct 19, 2014 8:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing with dividends
Replies: 8
Views: 927

Re: Portfolio Help for 29YO - First Taxable Investment Cont.

Desired Breakdown: 25% US Large Blend (LB) TSM is fine 25% US Small Value(SV) 20% International Small (IS) or International Small Value (ISV) 20% International Large Value (ILV) or International Large Blend (ILB) 10% REIT I believe from your posts that you have been investing for only four years, s...
by grabiner
Sun Oct 19, 2014 8:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Help for 29YO - First Taxable Investment Cont.
Replies: 14
Views: 1061

Re: Help Create a Portfolio Generating 2,500 a month on 600K

She was also left with two investment accounts Rollover IRA with 600k Individual Brokerage account with 600K I would like to use the IRA account to generate around 2500k a month of extra income for her through Dividends, Interest and other forms while maintaining as much capital preservation as pos...
by grabiner
Sun Oct 19, 2014 8:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help Create a Portfolio Generating 2,500 a month on 600K
Replies: 22
Views: 3666

Re: What tax software do you use and why

My experiences with TaxAct in 2013 and TurboTax in 2012, with a comparison to TaxAct ... I am curious. If you don't mind saying, what was the rule the software didn't implement correctly? ... I'm pretty sure it was TaxAct, several years ago (within the last seven, because I remember where I was livi...
by grabiner
Sun Oct 19, 2014 6:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: What tax software do you use and why
Replies: 44
Views: 1862

Re: Marginal Tax Rate Question/Confusion

The 25% bracket has largely disappeared for families, because nominal brackets are inflation-adjusted while the child tax credit phaseout is not -- as a result, the 25% bracket threshold is very close to the phaseout threshold for families with several children. But at the other end, you can still ...
by grabiner
Sun Oct 19, 2014 12:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Marginal Tax Rate Question/Confusion
Replies: 16
Views: 1081

Re: Taxable investing compatible with Boglehead approach?

Tax loss harvesting is an option. But doing so lowers your cost basis on the shares TLH'd. This means when you sell later, if in a higher tax bracket, then taxes on your capital gains will outweigh your TLH. Under current law you take the losses against income so you'd have to have higher capital g...
by grabiner
Sat Oct 18, 2014 3:49 pm
 
Forum: Investing - Theory, News & General
Topic: Taxable investing compatible with Boglehead approach?
Replies: 9
Views: 1082

Re: How do spreads work on highly illiquid and liquid ETFs?

I see. What If I'm buying at least 10 shares? or 50? Or is it usually better to do 100 shares since those are standard round lots? The advantage of a round lot is that your limit order will be listed in the market. A typical real-time quote says something like $49.90-50.10, 5x10; this means that so...
by grabiner
Sat Oct 18, 2014 3:44 pm
 
Forum: Investing - Theory, News & General
Topic: How do spreads work on highly illiquid and liquid ETFs?
Replies: 11
Views: 408

Re: Tax Loss Harvesting VTIAX

I am not sure wash sales in an IRA matter - they aren't reported for IRS purposes (as far as I know) You can't have a wash sale in an IRA; you can have a taxable sale washed by buying in an IRA. The normal way a wash sale works is that the capital loss may not be deducted, and is added to the basis...
by grabiner
Sat Oct 18, 2014 3:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting VTIAX
Replies: 18
Views: 1231

Re: need advice for bond fund in taxable low income high as

If you fall to the 15% tax bracket, you might switch to a TIPS or other Treasury fund, avoiding the CA tax but paying only 15% federal tax. (CA doesn't exempt Treasury income in a mixed fund from taxes unless the fund is more than half exempt; if you want to take more risk for higher returns, you c...
by grabiner
Sat Oct 18, 2014 3:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1244

Re: Allow OP to lock thread?

One thing I would find useful is the ability to remove myself from the "View Your Posts" section. That is not removing my response to a thread. Instead it would mean not having a thread pop up in the list that you responded to years ago. You can go to Advanced Search and search "Firs...
by grabiner
Sat Oct 18, 2014 12:12 am
 
Forum: Forum Issues and Administration
Topic: Allow OP to lock thread?
Replies: 17
Views: 1325

Re: Investment Policy Statement - share your sample template

The most generally relevant section in my IPS is the very last paragraph: Reviewing This Statement This statement will be reviewed whenever there is a substantial change in my financial situation, and annually when I rebalance. If there is no substantial change in my financial situation, I will wait...
by grabiner
Sat Oct 18, 2014 12:03 am
 
Forum: Investing - Theory, News & General
Topic: Investment Policy Statement - share your sample template?
Replies: 8
Views: 1187

Re: How to move 8 figure portfolio and minimize capital gain

Vanguard large stock index funds are extremely tax-efficient. So are municipal bonds or funds of same. I think he would be surprised how affordable his taxes can be with those two core holdings. Here's an example. The portfolio size was not given, so I'm assuming $20M, and choosing a representative...
by grabiner
Fri Oct 17, 2014 11:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to move 8 figure portfolio and minimize capital gains?
Replies: 10
Views: 2022

Re: What is your tax loss harvest strategy?

I have seen you writing a message like below atleast twice. livesoft : "I will harvest a loss before the position goes long-term as long as the loss is at least $100 I suppose." My question is: what happen if the loss is a long-term loss? i didn't see any difference between long-term/shor...
by grabiner
Fri Oct 17, 2014 11:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: What is your tax loss harvest strategy?
Replies: 17
Views: 1596

Re: Tax Loss Harvesting VTIAX

I'm also curious about TLH on this fund, but have a slightly different situation. I've purchased VTIAX within the last month. Do I have to wait 31 days since my last purchase to TLH, and then 31 days to buy back in (if desired)? You don't have to wait 31 days since your last purchase. A wash sale o...
by grabiner
Fri Oct 17, 2014 11:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting VTIAX
Replies: 18
Views: 1231

Re: Emergency Fund in 401k?

This is a variant of a strategy discussed on the wiki: Placing cash needs in a tax-advantaged account Here, you are holding your emergency fund in your Roth IRA rather than your taxable account, but the principle is the same; your emergency fund is in an all-stock account but have fixed income which...
by grabiner
Fri Oct 17, 2014 11:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Emergency Fund in 401k?
Replies: 1
Views: 268

Re: need advice for bond fund in taxable low income high as

Thanks a lot for this explanation. I never understood why the VG CPA was proposing that I buy "Vanguard California Intermediate-Term Tax-Exempt Fund" for my bond portion in the taxable space given that I am in a high tax bracket. Now it makes sense. But looks like this may be a bad choice...
by grabiner
Fri Oct 17, 2014 11:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1244

Re: Would you lock mortgage rate now?

Builder's mortgage company is offering 120 day lock rate of 3.999% for a 30 year. 1% held as earnest money refunded at closing. Would you lock now or should I hold out for a lower rate closer to our January close? I will most likely use the builders mortgage company because they are offering 2% off...
by grabiner
Thu Oct 16, 2014 10:40 pm
 
Forum: Personal Consumer Issues
Topic: Would you lock mortgage rate now?
Replies: 7
Views: 860

Re: How to move 8 figure portfolio and minimize capital gain

The other question would be Pat's general portfolio and life plans. If Pay plans to mainly spend his way through the 8 figures over the rest of his life, just being pretty sure not to run out before he dies, then he's going to realize most cap gains now or later and it's a timing difference. But if...
by grabiner
Thu Oct 16, 2014 10:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to move 8 figure portfolio and minimize capital gains?
Replies: 10
Views: 2022

Re: Poll: which portion of the chart shows higher volatility

This isn't the right form for a graph to estimate standard deviations, because the time series is meaningless: 4,-5,3,-3,1 and -5,-3,1,3,4 have the same standard deviation but look very different. It would be possible to estimate standard deviation from a histogram, or from a line graph of cumulativ...
by grabiner
Thu Oct 16, 2014 10:09 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: which portion of the chart shows higher volatility?
Replies: 26
Views: 1426

Re: Marginal Tax Rate Question/Confusion

I have tried as some have suggested in other posts to enter an additional 100 dollars of income into my online tax software for 2013 to gauge what my marginal tax rate would have been and with the addition of $100, I would have received $65 less in my federal refund (none for state and state tax ra...
by grabiner
Thu Oct 16, 2014 9:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Marginal Tax Rate Question/Confusion
Replies: 16
Views: 1081

Re: Is Roth 401k better even if future tax bracket is lower?

If you contribute the same amount out of pocket to either account, and retire in the same bracket, traditional versus Roth is break-even. If you retire in a lower bracket, traditional is better; if you retire in a higher bracket, Roth is better. There is an example which shows the additional conside...
by grabiner
Thu Oct 16, 2014 9:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is Roth 401k better even if future tax bracket is lower?
Replies: 10
Views: 1231

Re: Re-entering market - all at once, or over time?

Since this inheritance will greatly increase your dollar exposure to stock, I would recommend dollar-cost averaging in, just as I would for new investors. If you currently have $1M invested, and you receive another $3M and put it all in the same asset allocation, you have quadrupled your dollar risk...
by grabiner
Thu Oct 16, 2014 9:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Re-entering market - all at once, or over time?
Replies: 13
Views: 911

Re: need advice for bond fund in taxable low income high as

I think my biggest concern is that if I buy Vanguard total Bond Mkt VBTLX and later discover it is not working I will have capital gains when I sell. This is not a significant risk with a bond fund. Bond funds get almost all their income from dividends; you will have a small capital gain if interes...
by grabiner
Thu Oct 16, 2014 9:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1244

Re: Relatively new here. What did you do in 2008/09

But I was active on the forum in 2007-2009, so I saw many other posters who discovered that they did not know their risk tolerance when the stock market lost more than half its value. Therefore, I do not recommend that anyone who hasn't already experienced a bear market hold more than 80% stock. Ho...
by grabiner
Wed Oct 15, 2014 11:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 106
Views: 6661

Re: Tax on Roth conversion after change of jurisdiction

It should be sourced to your domicile at the time of conversion, so if you do it after your move that would be DC. However, it's possible that NY's tax for part year residents considers your total Federal income (including the taxable conversion amount), computes the NY tax, and then multiplies tha...
by grabiner
Wed Oct 15, 2014 9:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax on Roth conversion after change of jurisdiction
Replies: 5
Views: 503

Re: Long term gains tax rebalancing vs. Tax efficient placem

I was wondering if there was a mathematically optimal percentage for tax-advantaged vs. taxable. Would 20% in tax-advantaged be enough? 100% tax-advantaged is optimal, as long as you won't need the money before you can withdraw it (or when you will have a substantial penalty for withdrawing it.) Ev...
by grabiner
Wed Oct 15, 2014 9:20 pm
 
Forum: Investing - Theory, News & General
Topic: Long term gains tax rebalancing vs. Tax efficient placement
Replies: 3
Views: 425

Re: Stop & Stop-Limit clarifications

A stop-limit order is a variant of the stop order. A standard stop order becomes a market order when the stock trades below the stop price. A stop-limit order becomes a limit order; you could thus say, "If the price reaches $57, place a limit order to sell at $55". If it drops suddenly fro...
by grabiner
Wed Oct 15, 2014 9:09 pm
 
Forum: Investing - Theory, News & General
Topic: Stop & Stop-Limit clarifications
Replies: 3
Views: 402

Re: need advice for bond fund in taxable low income high as

What state are you in? If you pay high state taxes, Treasury bonds would be attractive investments, as they are exempt from state tax. You might put a lot of the taxable money into TIPS. In any case, you should probably each buy 10,000 of I-Bonds every year; these bonds track inflation, are exempt f...
by grabiner
Wed Oct 15, 2014 9:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1244

Re: TLH and Dividend Elections

2. Do any Vanguard funds distribute more frequently than a quarter just so I know to avoid them if scheduling around quarter end? Most bond funds distribute dividends monthly, but if you hold bonds in both taxable and tax-deferred, you aren't likely to hold the same bond fund. More likely, you woul...
by grabiner
Wed Oct 15, 2014 9:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: TLH and Dividend Elections
Replies: 5
Views: 461

Re: Relatively new here. What did you do in 2008/09

I knew my risk tolerance from previous experience. In 2000, my portfolio was 80% stock. As I lost about a quarter of my portfolio, I didn't have any problem sticking with that allocation. I went to 85% stock in 2002, 90% in 2004, and as I overweighted risky stocks (small-cap, value, and emerging mar...
by grabiner
Wed Oct 15, 2014 8:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 106
Views: 6661

Re: Investing Mortgage Payments

The cost of compound interest on a 30 year mortgage is way more than we can make in a taxable investment account. However, once you are on a 15 year or 10 schedule to payoff the note, your cost of interest is competitive with investment rates, so long as your tax rate is at 15% or lower. Keeping a ...
by grabiner
Tue Oct 14, 2014 10:25 pm
 
Forum: Investing - Theory, News & General
Topic: Investing Mortgage Payments
Replies: 11
Views: 1006

Re: vtclx vs. vti [Tax Managed Cap Appreciation vs. Total St

See Tax-managed fund comparison on the wiki. Tax-Managed Capital Appreciation is more comparable to 500 Index, as it doesn't have small-caps; if you want small-caps, you could hold 80% Tax-Managed Capital Appreciation and 20% Tax-Managed Small-Cap, or 100% Total Stock Market Index. But either way, t...
by grabiner
Tue Oct 14, 2014 10:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: vtclx vs. vti [Tax Managed Cap Appreciation vs. Total Stock]
Replies: 5
Views: 294

Re: Need dispensation to pay ROTH conversion taxes from tIRA

If you will always have the same marginal tax rate, it is break-even to convert a traditional IRA to a Roth IRA and pay taxes from the traditional IRA. For example, if you are in a 25% bracket and withdraw $4000 from the traditional IRA to convert $3000 and use $1000 to pay the tax, you have $3000 i...
by grabiner
Tue Oct 14, 2014 9:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need dispensation to pay ROTH conversion taxes from tIRA
Replies: 25
Views: 777

Re: Does your ROTH hold risky or stable items?

I have heard talk outside this post (if someone wrote this, I missed it), that each person has a limited amount of space in their Roth ($5,500/yr), and therefore the money should be in a less volatile investment vehicle. Is there any through or validity to such a statement? This doesn't make much s...
by grabiner
Tue Oct 14, 2014 9:53 pm
 
Forum: Investing - Theory, News & General
Topic: Does your ROTH hold risky or stable items?
Replies: 49
Views: 2647

Re: When the roof needs replacement.

In a multi-floor condo, if the roof needs to be replaced, who will pay for that? Flyingaway: Our condominium roof is currently being replaced. The cost will be paid from our monthly maintenance fee which is shared by all residents. I think this is true of all condominiums, although sometimes a spec...
by grabiner
Tue Oct 14, 2014 12:03 am
 
Forum: Personal Consumer Issues
Topic: Should I buy a condo on the GROUND FLOOR?
Replies: 50
Views: 4924

Re: Tax efficiency of short term bonds

But stock funds have high expected returns and are considered tax efficient This is because most of the returns from a stock index fund are not taxed or are taxed at low rates. If the stock market returns 8% with a 2% dividend yield, you pay tax only on that 2% yield, and if the dividend is qualifi...
by grabiner
Mon Oct 13, 2014 11:47 pm
 
Forum: Investing - Theory, News & General
Topic: Tax efficiency of short term bonds
Replies: 10
Views: 592

Re: Does your ROTH hold risky or stable items?

My Roth IRA holds many of my riskiest investments, but that isn't because I prefer risky investments in the Roth; rather, it is because they are investments I don't want to hold in taxable and don't have as options in my retirement plans. My Roth holdings are Value Index, Small-Cap Value Index, REIT...
by grabiner
Mon Oct 13, 2014 11:41 pm
 
Forum: Investing - Theory, News & General
Topic: Does your ROTH hold risky or stable items?
Replies: 49
Views: 2647

Re: fsitx low morning star rating

The M* rating of a fund is based on comparison of the fund's risk and return to its category average. For Vanguard's and Fidelity's total-bond market funds, the category is Intermediate-Term Corporate. But the index is 40% Treasuries and a total of 62% government bonds (mostly GNMAs for the rest); t...
by grabiner
Mon Oct 13, 2014 11:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: fsitx low morning star rating
Replies: 4
Views: 488

Re: Credit Card Issue

I'm also not familiar with any CC's that call you when they detect fraud. In fact, I wouldn't want them to call me. If they call me and ask for personal information to confirm the account then it is probably a scam. I have been called, but I agree that the card issuer needs to distinguish the call ...
by grabiner
Mon Oct 13, 2014 4:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Credit Card Issue
Replies: 26
Views: 1821

Re: Support that HSAs might not be the best option for you

The reason the government's premiums are higher for HDHPs than for conventional plans is that the plan makes a contribution to your HSA. It does? I haven't had time to dive back into the plan documents, but it is my understanding that the "plan" contribution comes from the higher premiums...
by grabiner
Mon Oct 13, 2014 11:59 am
 
Forum: Personal Finance (Not Investing)
Topic: Support that HSAs might not be the best option for you
Replies: 38
Views: 3344

Still need to use limit orders

VSS has been around for five years, and trades 80,000 shares ($8M) daily, but you still need to use limit orders for safety, for the same reason as the other examples in this thread. I bought VSS this morning. At 9:31, the spread was 96.31-96.33, much lower than normal, so I was about to buy, and ha...
by grabiner
Mon Oct 13, 2014 11:50 am
 
Forum: Investing - Help with Personal Investments
Topic: I bought VSS; spread has been consistently very small
Replies: 25
Views: 4987

Re: Market corrections and rebalancing band

i rebalance only on my birthday, which is probably silly and illogical and maybe even an emotional act that is forbidden under Boglehead law. And for the last 20 years or so, it's worked like a charm . How did you make out in the fall of '08 or is your birthday in October maybe? :happy If you are g...
by grabiner
Mon Oct 13, 2014 10:37 am
 
Forum: Investing - Theory, News & General
Topic: Market corrections and rebalancing band
Replies: 71
Views: 4044

Re: Support that HSAs might not be the best option for you

OP, I am surprised that your monthly premiums of standard are less than HDHP. Most of the people that use HDHP/HSA have monthly HDHP premiums less than standard PPO plan. The other benefit that most get is also the triple tax benefit of HSA contributions and also that employer also pitches in towar...
by grabiner
Mon Oct 13, 2014 10:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Support that HSAs might not be the best option for you
Replies: 38
Views: 3344

Re: Bond Index Conundrum

I agree that a bond index does not make as much sense as a stock index. You should choose individual bond funds for your own situation. For example, I buy long-term bonds since I have a long horizon. I also buy junk bonds because they have higher risk/return and I have a long enough horizon to wait...
by grabiner
Mon Oct 13, 2014 12:28 am
 
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 16
Views: 1952

Re: Rebalancing Bands

Would you have been rebalancing like crazy as each band was breached after 9/11, at the start of the 2003 Iraq war,or during the economic crisis of 2008/2009..or would you just have rebalanced annually You aren't likely to hit bands repeatedly, because a percentage change in the market does not cre...
by grabiner
Mon Oct 13, 2014 12:19 am
 
Forum: Investing - Theory, News & General
Topic: Rebalancing Bands
Replies: 15
Views: 1136

Re: Portfolio Review/ Moving taxable account to Vanguard

I would recommend the Roth TSP, because you can max it out (using your huge taxable account), and effectively tax-defer more money. In addition, you are in the military and will have a taxable military pension, which will use up your lower brackets in retirement; you aren't likely to retire in a low...
by grabiner
Sun Oct 12, 2014 9:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review/ Moving taxable account to Vanguard
Replies: 3
Views: 314
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