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Buying the dividend in a tax advantaged account. Downsides?

A few days ago I purchased a mutual fund (QSPIX) in a tax advantaged account. In the rush of holiday planning I did not realize that I had purchased it directly before a large 12% dividend. Today I noted that the fund price had dropped 12% and I had earned the same amount in dividends (my dividends ...
by ilan1h
Sat Dec 20, 2014 3:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Buying the dividend in a tax advantaged account. Downsides?
Replies: 1
Views: 350

Re: An incredibly naiive question

Many of the contributors to this thread are obviously extremely knowledgeable about the subject at hand. I, on the other hand, know next to nothing about it. However, my gut instinct tells me that something is wrong. Several years ago the price of oil soared to record levels. Dozens of pundits appea...
by ilan1h
Fri Dec 12, 2014 1:35 pm
 
Forum: Investing - Theory, News & General
Topic: Oil's future...
Replies: 56
Views: 6058

Re: CA int municipal bond fund vs. Vanguard int muni fund

I was hoping that someone could help me on the tax math here. Currently there is over a 6 figure capital gain on the national muni fund since I shifted significant funds into it in 2008. I've concluded (I may be wrong) that the worries about California were overblown. As a nation-state, California w...
by ilan1h
Tue Nov 18, 2014 11:15 am
 
Forum: Investing - Help with Personal Investments
Topic: CA int municipal bond fund vs. Vanguard int muni fund
Replies: 32
Views: 2614

Re: CA int municipal bond fund vs. Vanguard int muni fund

So I've decided that I would like to sell the VWIUX (national fund) and buy VCADX (the Calif specific fund). However, I have a very large unrealized gain in VWIUX. At this point is it worth being hit with the taxes in order to shift the money to the other fund? Any way to do this tax free?
by ilan1h
Sun Nov 16, 2014 10:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: CA int municipal bond fund vs. Vanguard int muni fund
Replies: 32
Views: 2614

Re: "Safe" investment for a retired parent. CD?

Thanks for all the responses. The objective was absolute safety with little to no risk of losing money that they will need to live on in 3-5 years. This means that any exposure to the stock or bond markets is too risky for their time horizon. Leaving the money in a checking account or money market h...
by ilan1h
Sun Nov 16, 2014 9:45 pm
 
Forum: Investing - Theory, News & General
Topic: "Safe" investment for a retired parent. CD?
Replies: 12
Views: 1444

Re: CA int municipal bond fund vs. Vanguard int muni fund

Sadly you missed a really nice rally in CA tax free munis (12k in 2010, now 15k), though the broader bond market did pretty well too. A good lesson in allocating in alignment with risk profile and sticking with it. I didn't miss the nice rally because, as I mentioned in my post, I was still fully i...
by ilan1h
Sat Nov 15, 2014 6:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: CA int municipal bond fund vs. Vanguard int muni fund
Replies: 32
Views: 2614

CA int municipal bond fund vs. Vanguard int muni fund

Several years ago when everyone was panicking about California's financial future, I pulled half of my funds out of VCADX (the Calif Int, Muni bond fund) and placed it into Vanguard's national intermed. muni bond fund (VWIUX). I am in the highest tax bracket possible (state and federal) and these ac...
by ilan1h
Sat Nov 15, 2014 4:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: CA int municipal bond fund vs. Vanguard int muni fund
Replies: 32
Views: 2614

"Safe" investment for a retired parent. CD?

I have about $500,000 to invest for a retired 83 year old parent. I am more concerned about keeping their money safe and immune from excessive market volatility. They will not need the money in the near future. Therefore, I was looking at CD's. The best rate I could find was 2.20% at University of I...
by ilan1h
Sat Nov 15, 2014 4:06 pm
 
Forum: Investing - Theory, News & General
Topic: "Safe" investment for a retired parent. CD?
Replies: 12
Views: 1444

Re: Invest like a chicken

The other advantage of chickens as opposed to mutual fund managers is that the chickens cluck defiance...(think about it for a moment and my meaning will become clear)
by ilan1h
Mon Jul 08, 2013 5:00 pm
 
Forum: Investing - Theory, News & General
Topic: Invest like a chicken
Replies: 16
Views: 2041

Long-standing Boglehead would appreciate advice on portfolio

Hi all, I am 52 years old, actively working. Wife is also working. No plans to retire for at least 5 years. Two children under the age of 11. Current portfolio is entirely invested in Vanguard index funds. This is a large account and either one (or both) of us could comfortably retire today on under...
by ilan1h
Sat Apr 27, 2013 8:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Long-standing Boglehead would appreciate advice on portfolio
Replies: 8
Views: 751

Re: "Buy California Bonds"

You buy these bonds from a broker such as Schwab or Vanguard. IT's a very easy process. You tell them which bonds you're interested in and they will tell you the "approximate" coupon rate that you will get. The exact rate is calculated a day or two later when all the sales are in. At that ...
by ilan1h
Fri Apr 05, 2013 11:39 am
 
Forum: Investing - Theory, News & General
Topic: "Buy California Bonds"
Replies: 2
Views: 448

Re: VWITX or BND in taxable account?

It's slightly cumbersome because they have accounts "in-trust" and there is some paperwork and verification stuff that needs to take place to transfer it to Vanguard (or to open a new account there).
by ilan1h
Mon Mar 25, 2013 5:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: VWITX or BND in taxable account?
Replies: 5
Views: 645

New York intermediate muni fund?

Vanguard does not seem to have an intermediate NY muni fund (long term only). I realize that I could get the national intermediate muni fund (VWITX) but would lose out a little on the state exempt advantages (although I'm not sure this would be a big deal). Or I could get some of the NY long term on...
by ilan1h
Mon Mar 25, 2013 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: New York intermediate muni fund?
Replies: 2
Views: 218

VWITX or BND in taxable account?

I am investing some money for my elderly parents. They are retired and living off their income. They are in a fairly low tax bracket (but probably not the lowest) and live in New York (high state income taxes). The money is currently in cash in an Ameritrade account and they want to charge $50 every...
by ilan1h
Mon Mar 25, 2013 4:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: VWITX or BND in taxable account?
Replies: 5
Views: 645

Re: Wimpy Market Timing

I'm not sure why everyone is giving him a hard time. I actually do exactly what he is proposing when I rebalance. For example, I know that my AA is asking for more international and more REITS. I also know that due to some retarded blip in European politics the international funds are suffering. The...
by ilan1h
Sun Jan 27, 2013 10:05 pm
 
Forum: Investing - Theory, News & General
Topic: Wimpy Market Timing
Replies: 82
Views: 4599

F/U on Merriman's seminal article "Perfect Portfolio"

In 2009 Jeff Cohen-Merriman published a seminal article in which he compared the balance of risk and return on various asset allocations. The data,compiled from 1970 to 2008 showed various mixes of SP500 and T-bills and their accompanying annualized return, standard deviation, worst month, worst 12 ...
by ilan1h
Sat Dec 29, 2012 8:30 pm
 
Forum: Investing - Theory, News & General
Topic: F/U on Merriman's seminal article "Perfect Portfolio"
Replies: 4
Views: 2833

Switching from VWIUX to VCADX(int muni to CA muni)

For many years I have had a significant amount of my assets in munis. I own both muni funds and individual muni bonds. I have always had about 70% of my munis in VWIUX which is a national fund holding interm munis and only 30% in VCADX (the CA fund). The reason for doing this was so as not to have a...
by ilan1h
Tue Dec 18, 2012 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: Switching from VWIUX to VCADX(int muni to CA muni)
Replies: 1
Views: 307

Re: Tax GAIN harvesting?

lan1h....... In your 1st two paragraphs you have set up a number of comparisons. For simplicity/clarity (hopefully) I will call them 1A/1B for par.1 and 2A/2B for par. 2. Questions/comments: par. 1: don't you need to have the same initial conditions....1B starting should have the 500K built-in CG b...
by ilan1h
Sun Sep 23, 2012 8:20 pm
 
Forum: Investing - Theory, News & General
Topic: Tax GAIN harvesting?
Replies: 20
Views: 1682

Re: Tax GAIN harvesting?

Likely, no. As a quick experiment, I setup two portfolios in a spreadsheet where I invested $100 10 years ago and made 6%/yr., all tax deferred. They are now worth ~$169. In portfolio A I sell it and harvest my gains, paying $17.24 in taxes (15% federal, 10% state). Both portfolios continue to grow...
by ilan1h
Sun Sep 23, 2012 12:34 am
 
Forum: Investing - Theory, News & General
Topic: Tax GAIN harvesting?
Replies: 20
Views: 1682

Tax GAIN harvesting?

We've had lots of discussions on tax-loss harvesting but this may be an opportune time to discuss tax-gain harvesting. Tax rates are likely to go up in 2013, especially for high income individuals. Projected tax increases in capital gains may be from 15% to 23%. This is, in effect, a 60% hike in the...
by ilan1h
Sat Sep 22, 2012 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: Tax GAIN harvesting?
Replies: 20
Views: 1682

Re: Condos Cheap in my building-residental real estate

I'm also interested in your math. I'm in a similar situation in L.A. ie: I would like to buy a condo and to rent it out. I would prefer this than to sinking it into the market or into a low yielding park fund. However, the math doesn't seem to make sense. I currently own and rent a condo which I pur...
by ilan1h
Sat Jun 23, 2012 9:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Condos Cheap in my building-residental real estate
Replies: 23
Views: 2070

Re: AMA: Morgan & The Euro Crisis - Is this time different?

I have a question about this and apologize if it sounds muddled. I fully understand what Morgan is saying about what he is seeing around him. This is definitely not "business as usual" and people are suffering acutely. On the other hand it is rather odd that when one visits Europe (and I h...
by ilan1h
Tue Jun 19, 2012 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: AMA: Morgan & The Euro Crisis - Is this time different?
Replies: 73
Views: 6015

Re: HSA- I know revisiting a horse thats already played out

If you want to invest without spending 15/trade, consider HSA Bank. If you keep $5k in the checking account, the rest can be invested fee-free through TD Ameritrade, which offers a good list of fee-free index ETFs. Since you might use portions of the HSA for healthcare costs, then it's not quite a ...
by ilan1h
Sat Jan 21, 2012 1:56 am
 
Forum: Investing - Help with Personal Investments
Topic: HSA- I know revisiting a horse thats already played out
Replies: 26
Views: 1416

Please help me figure out my eff. tax rate in retiremnt.

I'm trying hard to understand exactly how much I will be taxed during retirement. I don't intend to retire for another 10 years but for the purpose of simplicity I would like to use todays situation to extrapolate to the future. Currently I receive about 30K in tax-exempt interest from muni bonds an...
by ilan1h
Sun Dec 11, 2011 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: Please help me figure out my eff. tax rate in retiremnt.
Replies: 5
Views: 444

Re: How can countries exit the common currency

However, if the strongest country, for example Germany, exits, the remaining countries will be more homogeneous and their collective financial strength will be big enough to support the remaining Euro. This is probably a lest destabilizing route to disintegrate the Euro. Actually, a hybrid system h...
by ilan1h
Sun Dec 04, 2011 7:56 pm
 
Forum: Investing - Theory, News & General
Topic: Buying europe bonds now, like munis in 2008?
Replies: 17
Views: 1331

Re: Buying europe bonds now, like munis in 2008?

One thing that is not commonly mentioned is that the Eurozone experiment is not completely new. About 150 years ago the Austrian=Hungarian empire established a common currency within its sphere of 8-12 participating countries. This worked very well for 40 years until the end of WWI when the empire c...
by ilan1h
Sun Dec 04, 2011 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: Buying europe bonds now, like munis in 2008?
Replies: 17
Views: 1331

Re: 401K from an employer's perspective

Wow, you have a very generous plan. It's amazing but not surprising that all don't participate in your plan. I would keep it just as is if I were you and do your best to witness to your employees about the benefits. Maybe explain that it's not 30 year money, but that they would have a nice emergenc...
by ilan1h
Sun Dec 04, 2011 1:01 am
 
Forum: Investing - Theory, News & General
Topic: 401K from an employer's perspective
Replies: 17
Views: 1023

401K from an employer's perspective

I am an employer of 7 and have been offering a 401K plan to my employees for the past several years. They can defer into this plan and they also receive a match of 4% and a year-end profit share of 5%. Hence, they get an additional 9% of their salaries in benefits from this plan. My personal benefit...
by ilan1h
Sat Dec 03, 2011 11:20 pm
 
Forum: Investing - Theory, News & General
Topic: 401K from an employer's perspective
Replies: 17
Views: 1023

Buying europe bonds now, like munis in 2008?

In 2008 I made the very good decision to place a large part of my portfolio into Calif munis. I bought the bonds directly at 5% and will be holding them until 2016. I also bought a big chunk of a muni bond fund. At the time there was a lot of hand wringing and worrying about whether or not states wo...
by ilan1h
Sat Dec 03, 2011 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: Buying europe bonds now, like munis in 2008?
Replies: 17
Views: 1331

Re: What percentage would you pay to defer money?

when I retire... I will still have to pay full income taxes when I withdraw it (which is quite a bit more than capital gains taxes). That's not a fair comparison. Without the deferral plan, you would be paying both income taxes now (at a higher rate than in retirement, likely) as well as capital ga...
by ilan1h
Thu Dec 01, 2011 8:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: What percentage would you pay to defer money?
Replies: 14
Views: 894

What percentage would you pay to defer money?

I'm trying to figure out how much one would pay to defer money? For example, if you were offered a 10% fee to defer as much money as you wanted in a pension plan, would you do it? The reason why I ask is that I am considering a pension plan which would cost me about $10,000 but allows me to defer $1...
by ilan1h
Thu Dec 01, 2011 12:40 am
 
Forum: Investing - Help with Personal Investments
Topic: What percentage would you pay to defer money?
Replies: 14
Views: 894

stockpiling harvested losses?

What happens if you did a lot of tax loss harvesting in 2008 and stockpiled a large amount of losses. In 2009 and 2010 your investments did very well but you didn't sell anything (so no capital gains). In 2011 you tax loss harvested more losses. Now you have losses accumulated from 2008 and 2011 but...
by ilan1h
Thu Oct 06, 2011 1:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: stockpiling harvested losses?
Replies: 2
Views: 357

I've never been a big fan of keeping part of my AA in international index funds. However, several years ago I finally decided to put 20% of my investable equity assets into international index funds (partly due to my readings of this forum). The rationale was that this would help diversify my portfo...
by ilan1h
Thu Sep 29, 2011 4:17 pm
 
Forum: Investing - Theory, News & General
Topic: No alarm by Bogleheads over Grecian debt crisis?
Replies: 62
Views: 5655

Are you asking about rates or about offerings? BOND SALE PAR AMOUNT SALE DATE California State University Systemwide Revenue Bonds Series 2011A $245,000,000 September 14, 2011 2011-2012 Revenue Anticipation Notes $5,400,000,000 September 15, 2011 Various Purpose General Obligation Bonds $1,275,000,...
by ilan1h
Mon Sep 12, 2011 9:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: CA GO muni bonds being sold by state Sept 19. Rate?
Replies: 9
Views: 1029

CA GO muni bonds being sold by state Sept 19. Rate?

Any information available regarding the newest offering of muni bonds by CA? I would like to get a rough idea of the offering for the GO bonds. I bought some of these in 2008 and was awfully glad I did.
by ilan1h
Mon Sep 12, 2011 8:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: CA GO muni bonds being sold by state Sept 19. Rate?
Replies: 9
Views: 1029

Here's another way of looking at it: 1. No tax deferred plan: I have $110K to invest each year. Since I am in the 45% fed/state bracket this leaves me $60,500 to invest every year. If I assume a return of 5% and do this every year for 10 years I will wind up with about $898000: At the end of 10 year...
by ilan1h
Sun Feb 20, 2011 2:58 am
 
Forum: Investing - Theory, News & General
Topic: How much would you "pay" to defer income from taxe
Replies: 15
Views: 1675

Re: How much would you "pay" to defer income from

He would pay 15% tax on the gains when he sells, plus tax on the dividends every year, so the total tax would be close to 25%. Try these numbers: Total return of 7.2% consisting of 2.2% dividends and 5.0% increase in NAV. Taxable Account: In year 1, the $82,500 grows to $86,625 and pays dividends o...
by ilan1h
Sun Feb 20, 2011 12:42 am
 
Forum: Investing - Theory, News & General
Topic: How much would you "pay" to defer income from taxe
Replies: 15
Views: 1675

How much would you "pay" to defer income from taxe

I was wondering how much people would "pay" to be able to defer a certain portion of their income from taxes? For example, would you pay a fee of $10,000 if you were able to defer $100,000 from taxes? The reason why I ask is that I have been given the option to move myself and my employees...
by ilan1h
Fri Feb 18, 2011 1:53 pm
 
Forum: Investing - Theory, News & General
Topic: How much would you "pay" to defer income from taxe
Replies: 15
Views: 1675

In neither case did I assume that he was spending the money. However, I do agree that for individuals who need to spend the money that they receive, the annuity may be a better deal. Then you've "got it." I plead guilty to assuming that this annuity was something that your dad was conside...
by ilan1h
Mon Jan 24, 2011 1:22 pm
 
Forum: Investing - Theory, News & General
Topic: AARP annuity; is it a scam?
Replies: 32
Views: 7383

If you take your original $100K and put it into a very safe investment ie: AAA muni, CD, short term bond you could reasonable expect to make about 3% (I am talking historically). THis means that after 10 years (with very little risk) you wind up with $135,000. If you hold it for another 10 years yo...
by ilan1h
Sun Jan 23, 2011 11:33 pm
 
Forum: Investing - Theory, News & General
Topic: AARP annuity; is it a scam?
Replies: 32
Views: 7383

If you take your original $100K and put it into a very safe investment ie: AAA muni, CD, short term bond you could reasonable expect to make about 3% (I am talking historically). THis means that after 10 years (with very little risk) you wind up with $135,000. If you hold it for another 10 years you...
by ilan1h
Sun Jan 23, 2011 11:49 am
 
Forum: Investing - Theory, News & General
Topic: AARP annuity; is it a scam?
Replies: 32
Views: 7383

AARP annuity; is it a scam?

I recently reviewed AARP's annuity offering for my father (age 85). The deal sounds attractive on first blush ie: you hand over $100,000 and they will pay you 10% a year until you die. If you die before you've recouped your original $100K, they will refund the difference to your spouse. For example,...
by ilan1h
Sun Jan 23, 2011 1:15 am
 
Forum: Investing - Theory, News & General
Topic: AARP annuity; is it a scam?
Replies: 32
Views: 7383

It should also be noted that when a company defaults on its debt it's no big deal. THere are many other companies out there and life goes on even with hundreds of companies declaring bankruptcy every month. However, if a state defaults on its debt obligation its future costs to borrow money will ris...
by ilan1h
Sun Jan 23, 2011 12:54 am
 
Forum: Investing - Theory, News & General
Topic: Will muni defaults make munis more like corporate bonds??
Replies: 12
Views: 1850

steve roy wrote:I recently went and bought a mess of California General Obligation bonds paying 5.9% for my taxable account. They were AA/A.



Just out of interest, what bonds did you buy? I also recently bought some CA GO bonds and the yield for 2020 was 4.65% (not anywhere close to 5.9%).
by ilan1h
Sat Jan 22, 2011 2:29 am
 
Forum: Investing - Theory, News & General
Topic: What's the outlook for munis? Any specific guesses?
Replies: 57
Views: 9069

Am I the only one or do others find this to be absolutely crazy. A state defaulting on its obligations simply as a "negotiating tool" with pension plans? The ramnification on future ability to borrow money would be devastating. I assume that a move like that would make it extremely difficu...
by ilan1h
Fri Jan 21, 2011 7:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: State Bankruptcy?
Replies: 11
Views: 1452

if I lived in California, I would buy ultra-safe individual bonds: AAA-rated, pre-refunded, SLGS-backed. That way, you get the (substantial) state income tax exemption without taking on lots of added credit risk. Are AAA rated bonds neccessarily safer than A- state of Calif GO bonds? Yes, I underst...
by ilan1h
Wed Jan 19, 2011 7:06 pm
 
Forum: Investing - Theory, News & General
Topic: state specific muni vs. national muni fund?
Replies: 4
Views: 1448

I'm very surprised at the gloomy outlook on these threads. Granted that we are slowly recovering from a very serious recession. It will take years to sort out our unemployment issues not to mention our deficit, trade imbalance, unsustainable benefits etc. Europe is also having troubles of its own an...
by ilan1h
Wed Jan 19, 2011 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Munis reaching 2008 Crisis Prices..Anyone watching/buying?
Replies: 147
Views: 18711

Larry has been very direct. He favors holding only AAA and AA muni's. VG muni bond funds hold far too many lower rated bonds for his taste. Plus, he's detailed his rationale for holding individual issues. It should be noted, however, that Larry's criterion is almost impossible for any fund to meet ...
by ilan1h
Wed Jan 19, 2011 1:07 am
 
Forum: Investing - Theory, News & General
Topic: Munis reaching 2008 Crisis Prices..Anyone watching/buying?
Replies: 147
Views: 18711

Re: ilan

fwiw-I would not buy a Cal GO either. Would look for higher rating bonds. Well, this puts California residents in a bind. If you wouldn't invest in CA GO it means that you wouldn't invest in any CA bonds. We lose between 1-1.5% of tax equivalent yield by investing in bonds of other states. Since th...
by ilan1h
Tue Jan 18, 2011 8:01 pm
 
Forum: Investing - Theory, News & General
Topic: Munis reaching 2008 Crisis Prices..Anyone watching/buying?
Replies: 147
Views: 18711

Re: Ilan

FWIW-you broke one of my cardinal rules of bond buying, never buy a bond without at least 80% call protection, and better to have no call risk at all. Best wishes Larry Thanks Larry, Yes I was concerned about this but I figured that the callable option is more likely to hurt me if rates fall which ...
by ilan1h
Tue Jan 18, 2011 7:19 pm
 
Forum: Investing - Theory, News & General
Topic: Munis reaching 2008 Crisis Prices..Anyone watching/buying?
Replies: 147
Views: 18711
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