Search found 41 matches
- Wed Mar 08, 2023 8:44 pm
- Forum: Personal Consumer Issues
- Topic: dishwasher recomendations
- Replies: 110
- Views: 8263
Re: dishwasher recomendations
Nice to hear so many positive comments on the Miele dishwashers. We just ordered 2 of them today to replace high-end Kitchenaid dishwashers that are starting to breakdown on us after 4 years. The Kitchenaid dishwashers will be moving into our outdoor kitchen and bar so they can live out their remaining lives at a slower pace. We are very hard on our dishwashers so they tend to not last as long as they should in other places. We have been happy with Kitchenaid over the years but noticing certain parts having to be replaced more frequently than I would like. You have use for 4 dishwashers! Do you entertain a lot? Back to the OP: we have a 10-year old mid-level Bosh that does not clean that well anymore but is still very quiet. Will be replac...
- Wed Dec 29, 2021 9:35 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard issue with Yubikey : Won't support U2F API soon?
- Replies: 73
- Views: 9279
Re: Vanguard issue with Yubikey : Won't support U2F API soon?
OK. The issue was first reported 6 weeks ago and February is less time away. We'll see if it gets resolved on time.
- Tue Dec 28, 2021 8:30 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard issue with Yubikey : Won't support U2F API soon?
- Replies: 73
- Views: 9279
Re: Vanguard issue with Yubikey : Won't support U2F API soon?
Got the same issue as OP today (first login in a couple months). UbiKey 5 (with a USB C adaptor) on Chrome and a new M1 MacBook Pro. I started using UbiKey only 6 months ago and it's already "deprecated" ...
- Tue May 18, 2021 11:23 pm
- Forum: Investing - Theory, News & General
- Topic: Equity Roll-over .. yes or no .. PE firm buy-out
- Replies: 11
- Views: 1353
Re: Equity Roll-over .. yes or no .. PE firm buy-out
a PE firm is buying my company to merge into a bigger company.[...] I am a key employee in the company and I know the industry very well.[...] one of my friend who is in M&A tells me that they are a solid group of people Eight years ago, my company was bought and merged in a much bigger company that a PE firm had just taken control of. The PE firm was and is one of the very biggest name. Thankfully, it was all cash so I didn't have your dilemma. PE firms always plan on a quick turn-around and a 2x or 3x return. I did get some options early on in my new company and I had an optimistic perspective about their success at the beginning (eh, they knew what there are doing since they bought us!). But it didn't pan out. The PE firm may be kin...
- Mon Apr 30, 2018 10:26 pm
- Forum: Personal Investments
- Topic: Tax loss harvesting (TLH) for tax-exempt bonds
- Replies: 18
- Views: 3176
Re: Tax loss harvesting (TLH) for tax-exempt bonds
Tank you for the replies. Yes, my fund (Vanguard Intermediate Tax Exempt) distributes dividend monthly, so it should be subject to the 6-month rule.
Regarding the 6-month rule: I had automatic dividend re-investment into the fund, so I do have recent shares there. But if I move, say, 95% of the shares using the First-In/First-Out (FIFO) rule, it will only concern long-held shares and so the 6-month rule won't apply to them. However, for the trip back after 31 days from the CA municipal fund to the all-state municipal fund, I suppose the 6-month rule will apply and so my understanding is that I will forfeit one month of tax exemption on these shares.
Regarding the 6-month rule: I had automatic dividend re-investment into the fund, so I do have recent shares there. But if I move, say, 95% of the shares using the First-In/First-Out (FIFO) rule, it will only concern long-held shares and so the 6-month rule won't apply to them. However, for the trip back after 31 days from the CA municipal fund to the all-state municipal fund, I suppose the 6-month rule will apply and so my understanding is that I will forfeit one month of tax exemption on these shares.
- Sun Apr 29, 2018 10:52 pm
- Forum: Personal Investments
- Topic: Tax loss harvesting (TLH) for tax-exempt bonds
- Replies: 18
- Views: 3176
Tax loss harvesting (TLH) for tax-exempt bonds
So far I have only TLH'ed on the equity side (with advise from the forum-thanks!). I happen to have some realized capital gains this year, and the gains match my current cost-basis loss on my Intermediate Tax-Exempt bond fund. I am thinking about selling the bond fund and buying with the proceeds the California Intermediate Tax-Exempt fund. Then, after 31 days, going back to the Intermediate (all-state) fund. (Or maybe only going back for 50% or so of the value--I am a CA resident after all, I am just not comfortable with the concentration on a single state.) The fact is that the all-state and CA intermediate tax-exempt funds seem very highly correlated, so they should be a non-brainer as a TLH pair. Am I missing something?
- Thu Sep 21, 2017 10:01 pm
- Forum: Investing - Theory, News & General
- Topic: What happens if... [trying to understand public debt in the age of fiat currency]
- Replies: 6
- Views: 1227
What happens if... [trying to understand public debt in the age of fiat currency]
As a thought experiment, what would happen if the Federal Reserve sends tomorrow a check to the US government that covers all its present debts (it must be something around $20T) and the government in turns calls back all its bonds and pays off its creditors. Presumably, nobody would want to lend it anymore, but the government may not need to borrow either for a while (taxes keep going to the Treasury, no more debt to service and so no deficit, ...). Would it trigger runaway inflation somehow? The collapse of the World economy? Or maybe nothing so extreme, besides the Fed's balance sheet going from $4.5T to $24.5T? (Let us consider this as an actionable topic in some general sense if it helps understanding modern economy -- I just don't kno...
- Wed Jun 07, 2017 9:33 pm
- Forum: Personal Finance (Not Investing)
- Topic: Have GEICO auto, asked for quote online, $150 less
- Replies: 30
- Views: 9488
Re: Have GEICO auto, asked for quote online, $150 less
This is enough of an explanation. Insurers reward their long time customers with steady increases as they renew or change their policy. I recently changed from a major insurer to another one. What I was paying for identical terms after 15 years with the previous insurer is too embarrassing to tell.We have been with Geico for years.[...]
- Wed Jun 07, 2017 9:20 pm
- Forum: Investing - Theory, News & General
- Topic: 100% Stock Portfolio?
- Replies: 148
- Views: 27397
Re: 100% Stock Portfolio?
To the advocates of the 100% stock portfolio: I usually only hear the argument against a lower allocation. But why do you stop there? You can go beyond by leveraging your investment. So, what makes 100% not only better than 80% but also better than 120%?
- Wed Mar 01, 2017 1:13 am
- Forum: Personal Investments
- Topic: Advise 98 yr old with 95% equities?
- Replies: 33
- Views: 5034
Re: Advise 98 yr old with 95% equities?
What proportion of equity is concentrated in these 6 individual stocks? And what are the 2 Janus funds? There may be a legitimate diversification concern here, regardless of the high equity allocation.His investments are 95% equity (6 large cap dividend paying stocks and 2 Janus equity funds)
- Fri Feb 03, 2017 10:22 pm
- Forum: Investing - Theory, News & General
- Topic: No Inflation-Adjusted SPIAs at Vanguard
- Replies: 120
- Views: 10806
Re: No Inflation-Adjusted SPIAs at Vanguard
You can do it yourself. You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not. +1 That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside. The downside is that it doesn't work :twisted: . [...]. Whether it works or not, I would think that it can only underperform the following strategy: "You have decided to invest X dollars to get an inflation adjusted annuity paying out Y ...
- Mon Jan 23, 2017 10:20 pm
- Forum: Personal Investments
- Topic: minimum necessary to retire at defined expense level
- Replies: 37
- Views: 4823
Re: minimum necessary to retire at defined expense level
I found this recently from a post by livesoft. I think it's a good read. https://earlyretirementnow.com/2016/12/ ... t-1-intro/ These studies on safe withdrawal rate for extended retirement periods really need to be put in perspective according to life expectancy. In the one quoted above, a 50/50 bond/equity portfolio with a 3.5% withdrawal rate accrued for inflation has "only" a 93% chance of survival after 50 years. Nobody wants to be in that non-negligible 7% of failure. But, as a (fictitious) 50-year old newly retiree, the actuary table ( https://www.ssa.gov/oact/STATS/table4c6.html ) tells me that the probability of being alive at 100 is 935/92,940, which is about 1%. So the expected scenario in 50 years is that: - there is ...
- Sat Dec 17, 2016 5:08 pm
- Forum: Personal Investments
- Topic: Tax Loss Harvesting (TLH) for international equities
- Replies: 2
- Views: 614
Re: Tax Loss Harvesting (TLH) for international equities
Thanks for the tip about VFWAX. It does not go as deep as VTIAX in the small caps, but it is close enough (eh, it can't be too close either!).Keep it simple. Use FTSE All World ex-US VFWIX Investor VFWAX Admiral as replacement holding for Total International Stock Market Index VGTSX/VTIAX.
- Thu Dec 15, 2016 11:57 pm
- Forum: Personal Investments
- Topic: Tax Loss Harvesting (TLH) for international equities
- Replies: 2
- Views: 614
Tax Loss Harvesting (TLH) for international equities
I have some unexpected capital gains that I could offset by TLHing current losses in Vanguard Total International Stock Index (VTIAX). VTIAX is about 80% Developed Markets (indexed by VTNGX) and 20% Emerging Markets (indexed by VEMAX). If I sell VTIAX and invest 80% of the proceed in VTNGX and 20% in VEMAX, do I pass the test of "non-substantially identical" investment to avoid "wash sales"?
- Mon Nov 07, 2016 12:37 am
- Forum: Personal Investments
- Topic: Another "helping my in-laws with their investment"...
- Replies: 4
- Views: 1265
Re: Another "helping my in-laws with their investment"...
Thanks for the replies. Three posts are enough to cover the range of opinions! No way it will be 40% equities as suggested by jasmino. Thanks Dandy for the detailed and relevant suggestion. The bulk of the assets will definitely be in saving accounts and CDs. At this point, I don't see overall equity allocation, if any, to be more than 10%.
- Sat Nov 05, 2016 1:07 am
- Forum: Personal Investments
- Topic: Another "helping my in-laws with their investment"...
- Replies: 4
- Views: 1265
Another "helping my in-laws with their investment"...
...as each situation is different. My in-laws moved from abroad to live with us. They sold their home and transferred their assets ($640K) here in the USA. Father-in-law is in his late eighties, mother-in-law in her early eighties. FIL is in weak health. Their annual expenses are (now) about $60K, covering ACA ("Obamacare") insurance for both and physical therapy and living assistance for FIL. They rely on me for managing their assets. - A part of me tells to simply invest in a 5-year CD ladder. That is, I would start 5 $120K CDs with 1- to 5-year terms. Then as a CD matures, they would take out of it whatever 1-year expense is needed at that time and reinvest the remaining into a new 5-year CD. - Another part tells me that, since...
- Sat Nov 05, 2016 12:23 am
- Forum: Personal Finance (Not Investing)
- Topic: Time to buy my way out of jumbo mortgage?
- Replies: 10
- Views: 3035
Re: Time to buy my way out of jumbo mortgage?
Good Boglehead move I would say.Update one year later...
I did get a non-jumbo for 15yr fixed rate at 3.25%.
- Fri Sep 16, 2016 12:49 am
- Forum: Investing - Theory, News & General
- Topic: Why is the effective maturity in Vanguard Total Bond Market bimodal?
- Replies: 7
- Views: 1166
Re: Why is the effective maturity in Vanguard Total Bond Market bimodal?
Indeed, that may be what's going on: very long term bonds are very often called back much earlier than their nominal maturity date.AlohaJoe wrote:Interesting observation. Here's my fact-free guess: it is caused by mortgage backed securities, a large number of which never "age" more than 5-7 years. My understanding is that the vast majority of mortgages are paid off early -- either by refinancing or due to selling the house.
- Fri Sep 16, 2016 12:39 am
- Forum: Investing - Theory, News & General
- Topic: Why is the effective maturity in Vanguard Total Bond Market bimodal?
- Replies: 7
- Views: 1166
Re: Why is the effective maturity in Vanguard Total Bond Market bimodal?
pkcrafter and jjface:
As I understand it, the effective maturity of a bond is the number of years until the bond matures (taking also into account the fact that a bond can be "called" earlier - I don't know how it is done). For instance, we should find in the 10-year category both newly issued 10-year bonds and 30-year bonds issued 20 years ago. I suppose also that the bonds are weighted by their (current) values. That is, in the distribution, 5 $20M bonds count as much as one $100 bond. What intrigues me in Total Bond Market is the drought of bonds in the 10-20 years range, compared to the 20+ ranges. As years pass, the bonds in the latter category should move in the former category.
As I understand it, the effective maturity of a bond is the number of years until the bond matures (taking also into account the fact that a bond can be "called" earlier - I don't know how it is done). For instance, we should find in the 10-year category both newly issued 10-year bonds and 30-year bonds issued 20 years ago. I suppose also that the bonds are weighted by their (current) values. That is, in the distribution, 5 $20M bonds count as much as one $100 bond. What intrigues me in Total Bond Market is the drought of bonds in the 10-20 years range, compared to the 20+ ranges. As years pass, the bonds in the latter category should move in the former category.
- Thu Sep 15, 2016 10:44 pm
- Forum: Investing - Theory, News & General
- Topic: Why is the effective maturity in Vanguard Total Bond Market bimodal?
- Replies: 7
- Views: 1166
Why is the effective maturity in Vanguard Total Bond Market bimodal?
I expected the distribution of the effective maturity to be more uniform, or at least symmetrical around the middle years. But there is this big depression in the 10-20 years range. Does it really reflect the current state of the bond market? What puzzles me is that these 20-30 years bonds eventually must move in the 10-20 years range, they cannot just jump past it.
- Thu Sep 08, 2016 12:15 am
- Forum: Investing - Theory, News & General
- Topic: Do you think about volatility drag on your portfolio?
- Replies: 246
- Views: 28462
Re: Do you think about volatility drag on your portfolio?
The geometric mean of (non-negative) numbers is less than their arithmetic mean, but I cannot figure out the formula in the OP. Kolea mentions it to be correct for normally distributed data. Is there a reference for that (or a trivial computation that eludes me now)? In any event, I don't know what meaning to attach to the arithmetic mean of the returns in the first place. The total return is what it is and the geometric mean is just a way to express it in whatever unit of time I choose (such as annualized in the example). But what is the arithmetic mean? We cannot reconstruct the total return from it. It depends arbitrarily on the underlying unit of time used to compute it. Even if yearly returns were uniform, choosing returns over a small...
- Fri Sep 02, 2016 12:19 am
- Forum: Personal Investments
- Topic: Too much muni exposure?
- Replies: 14
- Views: 2909
Re: Too much muni exposure?
Same boat here. 95% of portfolio is in taxable. Asset allocation is 50% stock and 50% fixed income (FI). The latter is 10% CD, 10% Total Bond, 10% TIPS and 20% Tax Exempt Intermediate. My federal tax bracket is 33% and my CA tax bracket is 9.3%. Once in a while, as when reading a thread like this one, I worry about the tax efficiency on the FI side. So I did a back-of-the-envelope estimate of the after-tax interests for this year using the current different yields and taxation rates for my portfolio and then for a hypothetical portfolio where all the FI is in CA Tax Exempt Intermediate. The both came out almost exactly the same... So I am sticking with my "wide" FI exposure.
- Thu Aug 18, 2016 12:20 am
- Forum: Personal Investments
- Topic: Feedback on Donor Advised Fund allocation
- Replies: 10
- Views: 1213
Re: Feedback on Donor Advised Fund allocation
Your allocation is sensitive if you want to distribute a small portion over a long period. Our DAF is more conservative (a single balanced fund which is 40% stock), with the idea that we would "exhaust" it fast. But so far we have distributed only about 5% a year. We need to give more....
- Tue May 03, 2016 10:22 pm
- Forum: Investing - Theory, News & General
- Topic: Tax loss harvesting: in rare occasions for the boglehead?
- Replies: 17
- Views: 2374
Re: Tax loss harvesting: in rare occasions for the boglehead?
My concern with leaving it to a robo-advisor is visibility into other accounts. Do you feed in what you are holding and investing in for other accounts into something like Wealthfront? For example - if I TLH using Small-Cap-Value I've got to stop investing in it in my 401K for 30 days. I'd have to make sure Wealthfront understands my other accounts and alerts me to any moves it is making - at which point - I come to the conclusion that it is easier to just manage my accounts and TLH moves myself. As far as I can tell, there is no way to make a Wealthfront account aware of you other portfolios. It looks like a contribution in another account could trigger a "wash sale" if it happens that Wealthfront sold from the same fund (they u...
- Mon May 02, 2016 11:50 pm
- Forum: Investing - Theory, News & General
- Topic: Tax loss harvesting: in rare occasions for the boglehead?
- Replies: 17
- Views: 2374
Re: Tax loss harvesting: in rare occasions for the boglehead?
OK, I see that Bogleheads can engage in TLH more actively if they wish to do so. But I still don't imagine an individual investor doing it at the level and frequency of a robot advisor like Wealthfront. These robot advisors start from Boglehead principles, but it seems that they want to offer something beyond to justify their 0.25% fee, and that's where the very active TLH algorithm comes in.
- Sun May 01, 2016 12:03 am
- Forum: Investing - Theory, News & General
- Topic: Tax loss harvesting: in rare occasions for the boglehead?
- Replies: 17
- Views: 2374
Re: Tax loss harvesting: in rare occasions for the boglehead?
I am not discussing the merit of TLH, just its place in a Boglehad's approach to investing. As much as you will have many ocasions to TLH if you routinely trade individual equities, an investor that sticks to, say, just a total bond and a total stock funds will by definition see very few opportunities to TLH outside the situation I was describing in the original post. HouseBlend mentioned swapping the asset between tax sheltered and taxable accounts. That would be one way of doing it (where, I suppose, one relies on the fact that the IRS doesn't know what's in your tax sheltered account...). Another way is swapping between similar but not exactly the same assets. Wealthfront built a kind a THL machine around that stratgegy that generates qu...
- Sat Apr 30, 2016 12:07 am
- Forum: Investing - Theory, News & General
- Topic: Tax loss harvesting: in rare occasions for the boglehead?
- Replies: 17
- Views: 2374
Tax loss harvesting: in rare occasions for the boglehead?
Let's take a portfolio in the taxable space managed according to bogleheads principles: a handful of passive indexed funds matching a given asset allocation. Suppose also that the portfolio is not used yet for withdrawal. It looks like the only time when TLH'ing is when, at rebalancing time, it happens that all your assets when down and so even the asset you reallocated from lost value. Example: the starting portfolio has two assets with $50 in each. After one year, on is $40 and the other is $30. You get TLH when selling $5 of the greater asset (to purchase $5 of the lesser). In other words, TLH is just a side effect of rebalancing. Practically, if your portfolio already had significant growth, that event may never happen, or only in rare ...
- Thu Apr 21, 2016 10:56 pm
- Forum: Personal Investments
- Topic: Vanguard versus David Swensen
- Replies: 28
- Views: 6019
Re: Vanguard versus David Swenson
I'm in a very similar situation (portfolio size, mostly taxable, high tax bracket) and the Vanguard advisor gave me the same recommendation on the bond side 2 years ago: 1/3 each of Short/Mid/Long Term Muni bonds. So there are consistent! I ended by allocating 40% to Mid Term Muni and splitting the remainder between CD's, TIPS and Total Bond. Not as tax efficient as the recommendation, but added diversity and safety. In any event, the yield on Muni bonds is known to factor in the tax advantage, so the after tax gain may not be as big as compared to other bonds. I was not familiar with Swenson's portfolio. Given that my equity/bond allocation is 50-50, my portfolio is roughly a Swenson's portfolio where REITS have been swapped for Mid Term M...
- Tue Mar 22, 2016 9:11 pm
- Forum: Personal Investments
- Topic: Confused with Vanguard's Internal Rate of Return (IRR)
- Replies: 4
- Views: 1057
Re: Confused with Vanguard's Internal Rate of Return (IRR)
Thanks for the replies! I missed the date in the footnote and it's the source of the discrepancy indeed. Vanguard's computation is up to end of last month and is missing the market upswing over the last weeks.
Thanks!
Thanks!
- Tue Mar 22, 2016 1:25 am
- Forum: Personal Investments
- Topic: Confused with Vanguard's Internal Rate of Return (IRR)
- Replies: 4
- Views: 1057
Confused with Vanguard's Internal Rate of Return (IRR)
Hello finance wizards,
A bit more than a year ago, I moved half of a sum on Vanguard and then started moving the other half though monthly contributions for the next 2 years. (I didn't have the nerve of investing all at once.) When checking the investment performance so far, Vanguard says that my IRR is -0.9%. When I compute it by myself on Google Spreadsheet, I get an IRR of +1.8%. My cashflow has been only contributions, and their sum is less than the current balance. So there is a net gain and I don't understand how the IRR could be negative in the first place. Where could the discrepancy come from?
A bit more than a year ago, I moved half of a sum on Vanguard and then started moving the other half though monthly contributions for the next 2 years. (I didn't have the nerve of investing all at once.) When checking the investment performance so far, Vanguard says that my IRR is -0.9%. When I compute it by myself on Google Spreadsheet, I get an IRR of +1.8%. My cashflow has been only contributions, and their sum is less than the current balance. So there is a net gain and I don't understand how the IRR could be negative in the first place. Where could the discrepancy come from?
- Wed Nov 19, 2014 11:46 pm
- Forum: Personal Consumer Issues
- Topic: Vacation in France
- Replies: 95
- Views: 18327
Re: Vacation in France
You're getting plenty of good advice here. You got a great deal on your flight tickets! You don't want to use a car while in Paris, but a car is probably the best option for the trips in the countryside. Loire and Provence sounds great and plenty to do. Whatever you pick will be as picturesque as you expect it to be. Don't try to exhaust the country. You will still be missing many "essentials" anyway and it will just be you and your girlfriend that will be exhausted. France is the greatest place to be lazy! Versailles can fit in the 5 days in Paris (and again, no need of a car for that). I can recommend Hotel Saint Andre des Arts in the namesake street. Rustic, but quiet, comfortable and as central as it gets.
- Tue Nov 18, 2014 11:47 pm
- Forum: Personal Consumer Issues
- Topic: Vacation in France
- Replies: 95
- Views: 18327
Re: Vacation in France
No problem, just go! I'll just comment on your budget. Sounds like that you see this as a once in a lifetime trip and that you need to splurge to make it worth. I can tell you from extensive experience (I'm from Western Europe and go back regularly to the old country) that you can travel two weeks in France very comfortably for much less money. Or better, add a third week for the same budget! (But that may not be an option.) Who knows, you may get a taste for it and may want to start traveling every few years, now that you have your long term savings under control. Practically, by leaving before mid-June you should be able to avoid high-season fares on the flight.
- Sun Oct 26, 2014 3:04 pm
- Forum: Investing - Theory, News & General
- Topic: When people put all their eggs in the wrong basket
- Replies: 248
- Views: 58018
Re: When people put all their eggs in the wrong basket
Haha!Rysto wrote:Well, you can try, but somehow that only elevates your risk level.lapuce wrote:You cannot [h]edge your spouse by marrying four of them
- Sun Oct 26, 2014 12:27 am
- Forum: Investing - Theory, News & General
- Topic: When people put all their eggs in the wrong basket
- Replies: 248
- Views: 58018
Re: When people put all their eggs in the wrong basket
It could be said that many small-business owners are putting all their eggs in one basket too. Since many small business owners fail, it's likely that these would have turned out to be bad baskets. Is there a difference between putting most of your wealth in your own business, and putting most of your wealth in an equity investment? I would evaluate small business ownership according to Life Theory, not Financial Theory. Life is about putting your eggs in very few baskets. You cannot edge your spouse by marrying four of them (and many marriages do end as in a bankruptcy), you cannot diversify your job by working for three different employers or pursue several career paths at once or raise your family in two different communities. Someone m...
- Sat Oct 25, 2014 2:43 am
- Forum: Investing - Theory, News & General
- Topic: More funds = more "efficient" rebalancing?
- Replies: 28
- Views: 2906
Re: More funds = more "efficient" rebalancing?
Indeed, finding such smaller asset classes is akin to stock picking. Do I believe I'm good at it?anil686 wrote:In addition to the excellent points made above, Bernstein has written in all of his books that the asset classes you want to hold (funds if you will) need to have a good amount of volatility and similar expected returns with lower correlations( to each other) wrt make rebalancing work robustly (at least that is my understanding) - so it is hard to find more than 3 or 4 asset classes that exhibit these traits.
- Sat Oct 25, 2014 2:31 am
- Forum: Investing - Theory, News & General
- Topic: More funds = more "efficient" rebalancing?
- Replies: 28
- Views: 2906
Re: More funds = more "efficient" rebalancing?
The logical extreme of this would be something like an "equal weight" index fund that attempts to own every stock and maintain them at equal weights by constantly rebalancing every stock. I imagine a trading strategy that follows something like that works well when there is a lot of dispersion and mean reversion in the returns of various stocks, but at other times when the markets return is coming from a narrow group of stocks a momentum strategy that focuses more and more into those stocks growing the fastest would probably be better... but unless you can predict what sort of sequence of returns/style the market will look like over whatever future period you're invested I don't think any of these trading styles is worth ones sal...
- Fri Oct 24, 2014 1:59 am
- Forum: Investing - Theory, News & General
- Topic: More funds = more "efficient" rebalancing?
- Replies: 28
- Views: 2906
Re: More funds = more "efficient" rebalancing?
Tfb, Chan_va or others: Can you expend a bit further what it means that total funds continuously rebalance? If, for instance, "total international" simply reflects the whole international market, and if "emerging" performs better than the rest of the fund, wouldn't its share of the fund simply grow ? Unless, by design, "total international" is structured with x% for "emerging", and the fund managers continuously rebalance to keep the same structure.
- Fri Oct 24, 2014 1:43 am
- Forum: Investing - Theory, News & General
- Topic: More funds = more "efficient" rebalancing?
- Replies: 28
- Views: 2906
Re: More funds = more "efficient" rebalancing?
Tanks for the many good points made here. Personally, I'll go with less rather than more funds, if only because simplicity always beats complexity when you don’t fully understand something! But I'll carry my argument a little further for the sake of the discussion. My understanding of rebalancing at its simplest is the following. Suppose that two assets, A and B, have the same long term value. Let's even say that they don't appreciate. However, they are subject to independent short term fluctuations. If I rebalance during these fluctuations, I'll make money, almost magically! It's actually a zero-sum game where the looser is the other party selling low/buying high. Now, as passive long term investors, we're not interested in that game. The ...
- Thu Oct 23, 2014 2:06 am
- Forum: Investing - Theory, News & General
- Topic: More funds = more "efficient" rebalancing?
- Replies: 28
- Views: 2906
More funds = more "efficient" rebalancing?
I was browsing the "lazy portfolios" page when I was wondering if portfolios there with more funds haven't an intrinsic advantage over the minimalist 2- or 3-fund portfolios. Let's say that bonds are split between shorter terms and longer terms, stocks between smaller cap and larger cap, and international between developed and emerging. Then, as/if these sub-classes of asset diverge, I will be able to rebalance between them, selling high the ones doing well and buying low the ones faring worse, something not possible if the sub-classes are consolidated into "total" funds. Make sense, bogus point-of-view, or is there some trade-off?
- Tue Oct 21, 2014 1:13 am
- Forum: Personal Investments
- Topic: Advice sought for $6M investment
- Replies: 36
- Views: 5916
Re: Advice sought for $6M investment
Haha, Jazztonight. It's real. I went to this forum because right now most everything is just seating in <1% savings accounts. I did move a little money (relatively) in an online portfolio just to get a feel for what it is (like seeing it shrinking over the last 2 weeks!). The world of investment is new to me. Some colleagues went the "active" road with Merril Lynch and the likes, and they get calls pitching them to move into this new this or that. I don't buy it. Thank you everybody for your inputs. The main point I'm taking out is that I do need to consider muni bonds. I live in California, where my ordinary incomes put me in the 9.3% bracket for state taxes. The highest bracket is above 13%. I'll stick to an indexed funds approa...
- Sat Oct 18, 2014 5:05 pm
- Forum: Personal Investments
- Topic: Advice sought for $6M investment
- Replies: 36
- Views: 5916
Advice sought for $6M investment
Hello Bogleheads, We're in our early fifties with two kids about to go to college. Just sold the business I co-founded 20 years ago. After taxes, charitable giving, paying down the mortgage, we're left with about $6M. I did my due diligence, reading "A Random Walk down Wall Street". Here are my thoughts: (a) 10% Five laddered 5-year CDs of $120K each (b) 40% Bond index fund (c) 35% US market index fund (d) 15% International market index fund For the coming years, I'll keep my job with the big company that bought us, but I may want to do something else in a few years. Not retiring, but it would mean much reduced ordinary incomes. Wife is homemaker. Does this portfolio make sense? I want to keep it simple, with no more funds than ne...