Bogleheads.org

Many Bogleheads have been mentioning CDs and CD ladders for ever so long. My goodness, where do we start? I would suggest searching all my posts , then Kevin M's. The real issue is how to build a CD ladder from scratch using bond funds. You can't just go "all in". Building a CD ladder requ...

As Kevin M noted, the "early break" strategy has its own risks. We have not experienced a rapidly-rising rate environment since banks and CUs made explicit their terms and conditions that early withdrawals were discretionary (their discretion, not yours). While Ken Tumin has always provide...

My wife and I started investing in IRAs back when they were first introduced, in the 70s. Never gave a thought to whether laws might "change". As a practical matter, what would "they" do? Revisit tax returns from 40 years ago? I can only recall one period of time, back in the mid...

I'm not a huge fan of bond funds in general in this environment, but the "least worst" (which I have owned) is probably VFSTX. That said, I bailed some time ago on VFSTX (probably too early, but hindsight is 20-20). If you have a long(ish) horizon, believe strongly in the concept of durati...

Bond funds are quite helpful for re-balancing. I would always keep just enough in bond funds for that purpose. That said, other fixed-income alternatives might be better once one has salted away enough for re-balancing. I Bonds, EE Bonds, CDs, all have merit. Even a garden-variety cash savings accou...

Axiomatically, if your investments "throw off" 2%/annum, you have no risk of principal, you never harvest any principal, and harvest only the interest, your risk is but to purchasing power. As in, inflation. I suppose you could harvest that 2% ad infinitum. The more interesting question is...

I prefer not to count S/S as a "bond", any more than I count our rental property as a "bond". Both throw off a monthly cash flow, but neither is a "bond". A "bond" is a debt instrument, with an interest payment (which might, or might not, be fixed). However, i...

I have held the garden-variety panacea for dividend paying stocks for ever so long (DVY). Trust me, it goes up and down just like all other stocks. Has it out-performed your garden-variety dividend paying stock index fund? As in VTI?

Pull up a chart.

I suspect "bonds" may have been taken a tad too literally when one is considering fixed-income investments. Most of us considered more than one route to Dublin. PS: To Lady Geek. 680 North from Dublin today was a mess, owing to a bottle-neck on 24. Best to follow 580 east. Many routes &quo...

FWIW, my wife just began collecting her "free money". We are both 66, her record was a tad higher than mine (thanks to my military service and graduate school), and I started collecting at 62. She filed for spousal a few months back and the direct deposits just started. She's delaying to 7...

My wife and I are 66. We have been investing since the IRA was "invented" (I kid you not) in the early 70's. Even before then, my parents bought me a modest stock fund (in the late 60's). And before that, I plowed all my ill-gotten gains (from lawn-mowing, snow-shoveling, yard-trimming, yo...

Should you need the stated amount today for a down payment, what might you need two years hence? The way some real estate markets are moving, it might be a moving target. And if "all cash" deals continue to gain favor (as they have in certain markets), the concept of a "down payment&q...

FWIW, my wife and I buy as follows: (a) every two weeks, through her 401K, and (b) when our AA gets out-of-whack. Obviously, scenario (a) occurs more often than scenario (b). Indeed, she actually "sold" some equities in her 401K a few weeks ago in a re-balance from 64/36 back to 60/40. I s...

As Kevin M noted, a plan does not mean you must be wedded to any particular asset (read: bond funds) within an asset class (read: fixed income). A certain amount of dexterity and common sense, and all that. In a rising-rate environment, as we now appear to be in, certain types of fixed-income are mo...

To: bpg1234

Sounds like you have a great option in that 2%+ IRA savings account. Comparable to stable value funds in 401Ks. So long as it's NCUA-insured, I'd seriously consider an allocation of part of your FI TIRA to it.

On the heels of Credit Unions and the discussion of potential use of CD's in lieu of a portion of the bond allocation in one's TIRA due to concerns over interest rate risk, what would the BH perspective be on transferring some of existing Vanguard TIRA fixed income (say up to the $250K insured limi...

Dazed, a good resource devoted to cash, CDs, and the like is Ken Tumin's blog: http://www.depositaccounts.com/blog. In this rate environment, you might wish to consider building a CD ladder. Plunking all your spare cash in one 5-yr CD might look (relatively) good today, but in three or four years, t...

Tough to approach a real rate of return with after-tax FI these days. Tax-exempt bond funds, well you avoid the tax hit but still have interest-rate risk. CD ladders, you avoid the interest-rate risk but pay the taxes. And with either, there's inflation nibbling. IBonds, EE Bonds, great for new mone...

You can scratch the speculative itch with a "play money" account, but I'd limit it to a modest amount (as a percentage of investable assets). You get the rush of "trading" without the downside of doing any real damage to your retirement. Don't be surprised, however, if the novelt...

Welcome. Mr. Market aside, do you have an emergency fund? Debt?

FI is a rather large universe. You might consider IBonds, EE bonds, CDs, etc. I suspect if you salted away the max allowed for IBonds and EE bonds over the next few years, you'd see your relative FI AA creep up. These days, even garden-variety savings accounts or Reward Checking can be used as viabl...

A retired couple living on $50K, plus Social Security, plus a nice check from rental properties, plus a pension or two, throw in a modest SWR, yup, it can be done. With ordinary income sheltered per Form 8582, it gets so much easier.

It is a tad weird.

Artsdoc, wow, your last post sounds fairly pessimistic. Go have a beer. It's Saturday.

No matter how bad it got, a cheap six-pack helped.

An excellent article in the popular press that re-iterates what most folks who read this forum have already assimilated. While there is nothing new here, perhaps seeing it in black& white will stimulate some folks although the comments are full of whiners. Bogleheads, by definition, are not whi...

Catch my other posts on headlines you'll never read. Or will, then ignore. The Sunday Times has about a gazillion column inches to fill. The Quarterly "Retirement Guide" generally touts the advantages of diversification. Duh.

Oblivious am I. But I do like the print edition. I'll read it tomorrow.

As an aside, we're fine. Else, how would we be able to pay for the Times?

Artsdoc, said it once and will say it again, give a peek at a CD ladder. Seems like I'm butting my head against the wall. But Johnny Appleseed and all that.

Somehow, in my tummy, I just think a headline proclaiming "Long-Term Investors View Recent Bond Fund Declines with a Yawn" would elicit few readers. Right up there with "CD Ladders Fashionable? Karl Lagerfeld Weighs In" (Womens Wear Daily). Or "J Lo sports low ER; draws gasp...

My wife's 401K tossed the Stable Value from its options many months ago. So, you can play it safe with your bond allocation in a MMF (yielding virtually nothing, mattress money as it were) or stay the course in a low-cost index bond fund (VBTSX). I discussed the options with my wife some time ago, t...

It will be interesting (at least to me) to see how bond funds behaved relative to their stated duration at the turn.

Stated durations have always brought to mind the phrase "caveat emptor". Not as questionable as slapping AAA on a sub-prime tranche, but . . ..

It's a bit obscure, but the MAGI limit of $150K. For Form 8582.

Jot it down, for when you get older.

Key Bank went through some rocky times in the swoon. Glad to see it has recovered.* As to its on-line division, can't speak to that. Might be, maybe they just shut it down. On a positive note, they have paid out those interest payments, and compounded them, like clockwork. 5.75%, compounded, well, t...

Short answer. Were my 10-year CD with KeyDirect (yielding 5.75%) available on secondary (it's not), you could pay ever so much more than what I paid for ownership. But you could brag about the yield. what is keydirect? fidelity best is 2.5 at 10 year currently-has a 2.7 at 12 year. my wife insisted...

We do what we have done. Just observe our AA, buy, hold, and re-balance. It's reasonably simple.

Just re-balanced a few days ago, as it were. Mid-year, due to the run-up in stocks. My wife's 401K did it automatically, with the press of a button. Painless.

Brad, I've always been confused, with respect to these funds, how "tilt" matters. Stated another way (and as alluded above) assume I have 20% of my emerging fund's tilt in "value", but research reveals the fund's value companies have no value whatsoever. They are Peruvian gold mi...

Short answer. Were my 10-year CD with KeyDirect (yielding 5.75%) available on secondary (it's not), you could pay ever so much more than what I paid for ownership. But you could brag about the yield.

Fixed-income investments provide an "anchor to windward" for a portfolio. As one ages, the risk of a swan (pick your color) magnifies. After a certain age (pick one), it becomes difficult to replace equity losses with new contributions. Hence, "age-in-bonds". It's overly-simplist...

If you have a Schwab IRA (as I do, a SEP-IRA), I'd follow the path of least resistance. As I mentioned, had I not already plopped a bit down recently in VEMAX, I'd have gone with SCHE. As I also noted, unless you drill unmercifully down into the managers' selections, then do incredible amounts of ho...

Widestance, you got it. Nay, you nailed it. Making the best of a bad barrel. I might have allocated a tad more to the Vanguard "smallies", but I doubt it will make much difference. As I explained to my wife, will "growth" best "value"? Well, yes, some years. Will either...

Perhaps I missed it, but the stable value fund is yielding, what? After ER, 2%, 3%? Mind you, in a rising-rate environment, a stable value fund is a worthy alternative to just about any bond fund. Many 401Ks (including my wife's) have discontinued them. Moving right along, your international selecti...

My Mom's fund, which is similar, has tanked of late. Not to mention the fact the dividend payout is down by roughly 25%. Thankfully, she does not need the dividends for living expenses, and just continues to re-invest. She's 98. If you're long-term, as my Mom, just stay the course. Short-term pain, ...

I would suspect it would take a whole lot of digging, and much research, to drill down into the particular holdings of each, then try to second-guess the managers' selections. Unless you are contemplating a huge purchase, it's probably best to go with the lower ER and the no-commission ETF (Schwab)....

As Artsdoc said. I've done many custodian-to-custodian IRA transfers from Vanguard to banks/CUs, and between banks and CUs, and it's not that difficult. Item #2 on his list can be tricky. Shoot for a rate lock when you apply, if possible. This may be less a concern in a rising-rate environment, but ...

It's all a matter of timing and patience. If you catch Mr. Market in a period just before a protracted bull (aka a cyclical bull), with 15 - 20 years to run, then you will do well. This is what many early Boomers (as my wife and I) experienced in the period from 1982 - 2000. Classic cyclical bull ma...

We can all agree it is tough, indeed, to approximate a real return in "safe" FI these days. Not to say it can't be done, if one is willing to snoop around and jump through a few hoops. For example, various Reward Checking accounts offer real returns, are FDIC or NCUA insured, and are avail...

Theoretically, you get the SEC yield. That said, bond funds are not static. So, you might, or might not. But (again, theoretically), it is supposed to work that way. Some folks prefer CD ladders. A tad more predictable with a smidge better return. Bond funds are better than nothing at all (read:cash...

One might opine you're a tad overweight in equities. But if you are aware of the risks, so be it. Bond funds these days have not been stellar performers.

Japan was indeed a great trade over the past year or two. Who would have thought it, with the Nikkei mired in the depths? Of course, little solace to the average Japanese consumer paying sky-high for imported whatevers, or going abroad.

Kevin, I've always kept roughly 15 - 20% of my total stock allocation in international, with a modest tilt to emerging. This recent buy just brings my allocation back closer to 20%, by adding to emerging. In dollar terms, VTIAX will be roughly $60K and VEMAX roughly $20K. My wife has a tad of VTIAX ...

Kevin, you must agree that those of us into CD ladders are contrarians at heart. As a contrarian, would you not consider loading up on an asset class which will, perforce, lose favor as rates increase? I'm just thinking ahead. As more and more folks become enamoured with CDs, the law of supply and d...