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Re: Vanguard's Recommended Portfolio

I also think the suggested portfolio seems OK, trusting that it meets your personal needs. The most important change I'd consider is replacing some bonds with TIPS and/or I bonds for inflation protection and diversification. If it were my portfolio, I'd drop all of the bond funds, and instead use so...
by lazyday
Wed Jan 28, 2015 9:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard's Recommended Portfolio
Replies: 15
Views: 1536

Re: What mutual fund companies do you use?

Strong preference for Vanguard but in the last 10 years, I've also used ETFs from SSGA and ishares, and passive traditional mutual funds from Bridgeway.

I'm considering Schwab and Powershares ETFs for ex-US RAFI funds.
by lazyday
Wed Jan 28, 2015 5:14 am
 
Forum: Investing - Theory, News & General
Topic: What mutual fund companies do you use?
Replies: 46
Views: 1550

Re: Anyone know when CD rates will increase?

You can use market prices to predict lots of things, like presidential elections , oil prices, or interest rates. For example, the futures market predicts a less than 2% chance of a fed funds rate of 1.5% or better in 1 year from now. http://www.cmegroup.com/trading/interest-rates/fed-funds.html The...
by lazyday
Wed Jan 28, 2015 4:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Anyone know when CD rates will increase?
Replies: 18
Views: 1173

Re: 250K or more with Vanguard

What about the risk of one's stocks or bonds being lent out to short-sellers? Do you mean stocks and bonds inside mutual funds, or sitting in our account? If you have a cash account (instead of margin) I believe that securities can't be lent out. This should increase safety, but I'm not convinced i...
by lazyday
Tue Jan 27, 2015 4:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: 250K or more with Vanguard
Replies: 12
Views: 3666

Re: iShares Files for Intl Quality and Momentum Factor ETFs

The quality index appears to be cap weighted. Here's year end valuations vs MSCI ex-US: Div Yld (%) P/E P/E Fwd P/BV 3.12 15.39 15.02 2.45 3.04 16.61 14.12 1.67 These are directly comparable, because the quality index is sector neutral. High P/B is expected for quality, with high return on assets/eq...
by lazyday
Tue Jan 27, 2015 3:44 pm
 
Forum: Investing - Theory, News & General
Topic: iShares Files for Intl Quality and Momentum Factor ETFs
Replies: 2
Views: 457

Re: The Biggest Risk

Distressed banks 2008-9. Lost quite a bit on the lowest quality banks, balanced by gains on better names like Barclays. By any sensible risk adjusted measure, my total return across all banks was horrendous, and could have been much worse. Paid adequate attention to % in each sector or company, but ...
by lazyday
Tue Jan 27, 2015 12:18 pm
 
Forum: Investing - Theory, News & General
Topic: The Biggest Risk
Replies: 18
Views: 1767

Re: Question about Bond Mutual Funds and High Interest CD's

When I recently looked at brokered CDs, I don't think there were any with maturity over 10 years that weren't callable. So check the terms on that 15 year before investing.
by lazyday
Sun Jan 25, 2015 2:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about Bond Mutual Funds and High Interest CD's
Replies: 15
Views: 1310

Re: TIPs, what do they really add

one portfolio with just bonds and one with just TIPS, bonds win no matter how you slice in dice it, back to 1972 How about if you end the backtest in 1980? TIPS didn't exist back then, so hopefully the simulated data is reasonable. Inflation bonds were around in Europe before US, so you might try b...
by lazyday
Fri Jan 23, 2015 2:26 pm
 
Forum: Investing - Theory, News & General
Topic: TIPs, what do they really add
Replies: 33
Views: 2826

Re: 250K or more with Vanguard

For traditional mutual funds held directly at Vanguard (not Vanguard Brokerage) it seems you are quite safe.

For ETFs held at Vanguard Brokerage, I'm not sure you are as protected. SIPC might help if the brokerage fails, for up to $500,000 each in IRA, Roth, Individual.
by lazyday
Fri Jan 23, 2015 2:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: 250K or more with Vanguard
Replies: 12
Views: 3666

Re: Sector risk with cap weighted index

The next crazy market might not be like the last one. One way to protect oneself would be to choose a few good gurus, such as W Bernstein or Larry Swedroe, and every few years, catch up on their articles/papers/shareholder letters. If they noticed something, think critically about it with a bias tow...
by lazyday
Thu Jan 22, 2015 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Sector risk with cap weighted index
Replies: 3
Views: 296

Re: Does securities lending matter more than expense ratios?

the borrowed equities rise substantially in value This seems to me like a reasonable concern. But maybe it would only be a problem if a stock rose steeply in one day or less: In practice, funds require 102 percent collateral for domestic securities and 105 percent for international securities. Beca...
by lazyday
Thu Jan 22, 2015 11:52 am
 
Forum: Investing - Theory, News & General
Topic: Does securities lending matter more than expense ratios?
Replies: 29
Views: 1764

Re: Does securities lending matter more than expense ratios?

Andy (Wagnerjb) and Johno, I'm rereading page 146 of Swensen's 2009 revised Pioneering Portfolio Management (1ed is 2000). He says that in the 1970s, security lenders could reinvest cash collateral in Treasury bills, making decent low risk profit. ("quite safe" pg 145) But "Structural...
by lazyday
Thu Jan 22, 2015 7:02 am
 
Forum: Investing - Theory, News & General
Topic: Does securities lending matter more than expense ratios?
Replies: 29
Views: 1764

Re: Does securities lending matter more than expense ratios?

Any pragmatic advice on how to extract value from brokerage firms not in a not for profit mode? I read somewhere that being in a margin account automatically allows the practice, but there are no 'kickbacks' of revenue. https://www.interactivebrokers.com/en/index.php?f=shortableStocks&p=stockyi...
by lazyday
Wed Jan 21, 2015 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: Does securities lending matter more than expense ratios?
Replies: 29
Views: 1764

Re: What will happen to international stocks if a Euro break

GMO has speculated a bit about an eventual breakup. Maybe a few years ago. I think in one of the papers, it was mentioned that it's a long term problem to require economically strong countries to keep supporting the weak. A comparison was made to North and South Italy, where this support has been go...
by lazyday
Wed Jan 21, 2015 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: What will happen to international stocks if a Euro breakup?
Replies: 23
Views: 1576

Re: Low Bond Yields and Safe Portfolio Withdrawal Rates

Maybe this is an update including more recent CAPE? It was lower in 2013: http://www.multpl.com/shiller-pe/table?f=m We compared this to a forward-looking model that assumes an initial CAPE ratio of 27, an initial bond yield of 2.5%, an investment fee of 50 bps and an average future expected equity ...
by lazyday
Wed Jan 21, 2015 3:29 pm
 
Forum: Investing - Theory, News & General
Topic: Low Bond Yields and Safe Portfolio Withdrawal Rates
Replies: 6
Views: 746

Re: $ Value of CD early withdrawal option?

I suppose it should be expensive to protect against terrible returns in terrible times, even if only because that's a primary risk for many. I once casually looked at prices of longish term puts on individual stocks with strike price maybe 1/3 or 1/4 of current price, and without any real analysis s...
by lazyday
Wed Jan 21, 2015 8:40 am
 
Forum: Investing - Theory, News & General
Topic: $ Value of CD early withdrawal option?
Replies: 14
Views: 1453

Re: IRA CD experiences or precautions?

That might be a brokered CD, with a set coupon yield. https://www.fidelity.com/fixed-income-bonds/cds These are easier because you can buy them within an account that also might hold mutual funds and other investments. WIth a "bank CD" also called "traditional CD" or "direct...
by lazyday
Wed Jan 21, 2015 8:20 am
 
Forum: Investing - Theory, News & General
Topic: IRA CD experiences or precautions?
Replies: 8
Views: 973

Re: $50,000 to invest, want little to no risk. CDs? Silver?

Good points about using a Roth. Also to think about different kinds of risk. Usually, people think about losing money. Another kind of risk is "shortfall risk" or not having as much money as you'll need, such as to retire. Thinking this way might encourage a small % in stocks, even for som...
by lazyday
Tue Jan 20, 2015 11:53 am
 
Forum: Investing - Help with Personal Investments
Topic: $50,000 to invest, want little to no risk. CDs? Silver? Etc?
Replies: 37
Views: 3290

Re: $50,000 to invest, want little to no risk. CDs? Silver?

Grt2bOutdoors, If you view risk in nominal terms instead of spending power, then CDs are lower risk. Otherwise, my opinion is that I bonds are lower risk. Ignoring taxes, and the small penalty in the first 5 years, they retain your buying power for 30 years under any conditions. If in the future a b...
by lazyday
Tue Jan 20, 2015 11:48 am
 
Forum: Investing - Help with Personal Investments
Topic: $50,000 to invest, want little to no risk. CDs? Silver? Etc?
Replies: 37
Views: 3290

Re: Setting price limit for ETF

I think it's expected for odd lot (under 100) orders to be treated worse, it's the mixed lot (like 150) vs round lot (x * 100) that I'm not sure about. do not get good executions at TDAmeritrade especially compared to WellsTrade I've seen positive comments and info about Wells in the past. For a big...
by lazyday
Tue Jan 20, 2015 9:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Setting price limit for ETF
Replies: 22
Views: 1206

Re: $50,000 to invest, want little to no risk. CDs? Silver?

Series I bonds pay very little since their rate is mainly dependent on what inflation is doing, since energy prices have been falling, inflation when calculated will be below the previously calculated rate - therefore it's likely the interest rate to be announced in May will be near or at zero. ......
by lazyday
Tue Jan 20, 2015 9:12 am
 
Forum: Investing - Help with Personal Investments
Topic: $50,000 to invest, want little to no risk. CDs? Silver? Etc?
Replies: 37
Views: 3290

Re: Setting price limit for ETF

Livesoft, on mixed lots: I googled this a while ago, and thought that the round lot portion of the order is now supposed to get equal treatment to a round lot order. But in practice, I seemed to get worse execution (for the entire order) on mixed lot orders than round lot orders. So I've sometimes e...
by lazyday
Tue Jan 20, 2015 8:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Setting price limit for ETF
Replies: 22
Views: 1206

Re: Setting price limit for ETF

For very actively traded stocks and ETFs, with a 1 or 2 cent spread, at a time the market is relatively calm, for an order much smaller than the lowest number of shares typically offered/bid, and with a good broker, I almost always use a market order. It's easier, and it seems to me that I get a bet...
by lazyday
Tue Jan 20, 2015 8:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Setting price limit for ETF
Replies: 22
Views: 1206

Re: $50,000 to invest, want little to no risk. CDs? Silver?

Series I savings bonds are even safer than CDs, because inflation might reduce the spending power in a CD. But the yield might be even lower. They now pay about 0% + inflation, lately about 1.5%. You can only buy $10,000 per SSN per year, and $5,000 as a tax refund. With CDs there is risk that a ban...
by lazyday
Tue Jan 20, 2015 7:50 am
 
Forum: Investing - Help with Personal Investments
Topic: $50,000 to invest, want little to no risk. CDs? Silver? Etc?
Replies: 37
Views: 3290

Re: Which broker to choose for IRA and which for taxable?

My usual answer has been Vanguard since their interests are better aligned with yours. But I'm starting to think that it might make sense to choose Fidelity or Schwab for better service and fewer screwups, if you're careful about choosing good low cost products, and yearly fees are below 0.05% of yo...
by lazyday
Tue Jan 20, 2015 3:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Which broker to choose for IRA and which for taxable?
Replies: 5
Views: 676

Re: VEU vs VEA vs VXUS splitting hairs...which is better

The world's largest company, maybe worth $10 trillion, is government owned: http://en.wikipedia.org/wiki/Saudi_Aramco The index is free float weighted, so if some oil companies in the region do trade, the portions held by governments or privately would be excluded from the index. Total global free f...
by lazyday
Tue Jan 20, 2015 3:17 am
 
Forum: Investing - Theory, News & General
Topic: VEU vs VEA vs VXUS splitting hairs...which is better
Replies: 7
Views: 1140

Re: $ Value of CD early withdrawal option?

Thanks Johno. Sounds like 60bps might favor the brokered CD. I was mostly able to follow market timer's EE posts, but not his I post or your post above. Any book suggestions, so I might: - do this analysis myself, maybe with your posts for help - think through other financial decisions using optiona...
by lazyday
Mon Jan 19, 2015 5:41 pm
 
Forum: Investing - Theory, News & General
Topic: $ Value of CD early withdrawal option?
Replies: 14
Views: 1453

Re: IRA CD experiences or precautions?

Thanks, John. I'm probably going to require a rate lock for all but the best reviewed places. Even if a bank or CU won't promise the rate on transfer, a customer friendly one might try to honor it if possible. Also there seems to be a wide range of difficulty in opening up new IRA accounts. For a sm...
by lazyday
Mon Jan 19, 2015 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: IRA CD experiences or precautions?
Replies: 8
Views: 973

Re: CD APY vs. Treasury YTM since late 2010

DWD wrote:The FDIC promptly returned my principal, but the nice interest rate was gone. So I learned to look at bank ratings when buying CD's.

I suppose that banks are most likely to fail at a time that interest rates are low.
by lazyday
Mon Jan 19, 2015 4:41 pm
 
Forum: Investing - Theory, News & General
Topic: CD APY vs. Treasury YTM since late 2010
Replies: 28
Views: 1828

Re: MSCI Switzerland Index Return

Foreign currency broker FXCM survived better than Everest, but with customers putting down only 2% capital, they now owe FXCM nearly a quarter billion. LUK to the rescue. http://www.bloomberg.com/news/2015-01-16/fxcm-gets-300-million-bailout-from-leucadia-after-swiss-shock.html http://www.bloomberg....
by lazyday
Sun Jan 18, 2015 12:03 pm
 
Forum: Investing - Theory, News & General
Topic: MSCI Switzerland Index Return
Replies: 9
Views: 865

IRA CD experiences or precautions?

How easy is it to redeem a CD as it matures, and transfer out? I haven’t done this yet. I’ve had terrible experiences with the last two credit unions I tried to open IRA CDs with. Lots of hassle and time wasted. By the time they had my money, the CD promo was over. “Heads you win, tails I lose”: if ...
by lazyday
Sun Jan 18, 2015 9:58 am
 
Forum: Investing - Theory, News & General
Topic: IRA CD experiences or precautions?
Replies: 8
Views: 973

Re: Initial SEC yield and subsequent 5yr and 10yr returns

Don't know if this means anything:

A quick google says the maturity and duration of the fund is about 5 years, at least recently. But the 10 year returns were closer to sec yield than 5 year.
by lazyday
Sun Jan 18, 2015 9:41 am
 
Forum: Investing - Theory, News & General
Topic: Initial SEC yield and subsequent 5yr and 10yr returns
Replies: 113
Views: 5423

Re: VEU vs VEA vs VXUS splitting hairs...which is better

And with the FTC, the order is (best) VSS VWO VEA VXUS How did VXUS end up worse than its (more or less) components? I suppose if there were high shareholder fund flows into some of the other funds, then the dividend yield paid to shareholders of those funds could be reduced. Or Canada has terrible...
by lazyday
Sun Jan 18, 2015 9:28 am
 
Forum: Investing - Theory, News & General
Topic: VEU vs VEA vs VXUS splitting hairs...which is better
Replies: 7
Views: 1140

Re: Tobias Moskowitz on value and momentum

Richard, if you're interested in a paper on value&momentum of indexes, that attempts to be more practical for an individual investor: http://www.elmfunds.com/uploads/1/2/0/2/12029754/value_and_momentum_07.03.13.pdf The Case for Value and Momentum at the Asset Class Level∗ Victor Haghani The Lond...
by lazyday
Sun Jan 18, 2015 9:13 am
 
Forum: Investing - Theory, News & General
Topic: Tobias Moskowitz on value and momentum
Replies: 19
Views: 2082

Re: $ Value of CD early withdrawal option?

So the spread is worth about 3% of principal for a 5 yr CD. What would it cost for puts that are similar to the early withdrawal put? It seems that IEI puts are only available to Jul 15: http://www.nasdaq.com/symbol/iei/option-chain?dateindex=-1&callput=put&page=2 I wouldn't mind using somet...
by lazyday
Sun Jan 18, 2015 8:19 am
 
Forum: Investing - Theory, News & General
Topic: $ Value of CD early withdrawal option?
Replies: 14
Views: 1453

Re: EE bonds vs iBonds

I think about how things have changed over the last 20 years and I just don't like the idea of tying my money up for that long I've already bought and redeemed once, for Penfed 3% 5 and 7 year with reasonable early withdrawal policies. Thinking about buying again this month, but probably won't. The...
by lazyday
Sun Jan 18, 2015 7:22 am
 
Forum: Investing - Help with Personal Investments
Topic: EE bonds vs iBonds
Replies: 29
Views: 2452

Re: CD APY vs. Treasury YTM since late 2010

DWD, that 2008 premium is amazing. I'm guessing it's an anomaly because of the crisis. Was this for new issues, or secondary market? I don't know how the market works, but could imagine intermediaries desperate to get rid of illiquid inventory. By the way, a new issue 10 year (brokered) last week ha...
by lazyday
Sun Jan 18, 2015 6:53 am
 
Forum: Investing - Theory, News & General
Topic: CD APY vs. Treasury YTM since late 2010
Replies: 28
Views: 1828

Re: CD APY vs. Treasury YTM since late 2010

All I can say is that you're making a big mistake if you think of a 5-year direct CD as having a duration of five years for any kind of financial decision making. I would only do that if both: - Elected to have dividends reinvested, and can't (or isn't practical to) change this election - Account f...
by lazyday
Sun Jan 18, 2015 6:46 am
 
Forum: Investing - Theory, News & General
Topic: CD APY vs. Treasury YTM since late 2010
Replies: 28
Views: 1828

Re: VEU vs VEA vs VXUS splitting hairs...which is better

VXUS doesn't have to trade when a small stock becomes large enough for inclusion in the other funds, or when a country enters or leaves the set of developed markets. Sometimes this trading might be free when it's done within Vanguard, but otherwise it can be expensive; smaller stocks and some foreig...
by lazyday
Sun Jan 18, 2015 5:45 am
 
Forum: Investing - Theory, News & General
Topic: VEU vs VEA vs VXUS splitting hairs...which is better
Replies: 7
Views: 1140

Re: How to transition from local hard drive to the cloud

I'm also starting to get different versions of the same docs which is not good at all1 Having one copy on the cloud will prevent this. Google and probably some others are good about avoiding sync issues. In my experience, you can open a google doc from anywhere, and even have it open in more than o...
by lazyday
Sun Jan 18, 2015 5:37 am
 
Forum: Personal Consumer Issues
Topic: How to transition from local hard drive to the cloud
Replies: 12
Views: 965

Re: garbage disposals - are these still used?

ah yes, the spoons and butter knifes with their battle scarred but rugged bodies.
by lazyday
Sat Jan 17, 2015 2:15 pm
 
Forum: Personal Consumer Issues
Topic: garbage disposals - are these still used?
Replies: 52
Views: 3676

Re: Malkiel's recommendations, 1990 to 2015

If I were to try hard to defend Malkiel, I'd say that in 1990, stocks and probably bonds had higher expected return than today. So we need to take more risk to get the same expected return. Looks like he's still into growth, with that suggestion about "smaller growth companies". Personally...
by lazyday
Sat Jan 17, 2015 11:11 am
 
Forum: Investing - Theory, News & General
Topic: Malkiel's recommendations, 1990 to 2015
Replies: 40
Views: 3810

Re: Tobias Moskowitz on value and momentum

We need a movalue index fund. There's passive funds using momentum, value, and to a lesser extent, profitability. Brought to you by some of the same people that gave us this video. Here's one of them: https://funds.aqr.com/~/media/files/fact-sheets/ceemgmfl.pdf By the way, the video and text have s...
by lazyday
Sat Jan 17, 2015 9:54 am
 
Forum: Investing - Theory, News & General
Topic: Tobias Moskowitz on value and momentum
Replies: 19
Views: 2082

Re: To what extent are European stocks better value than US?

in_reality, thanks for the link. It includes P/S though I doubt it reweights industries to make it comparable across countries. Other metrics such as P/B have the same issue. Interesting that without considering the above, Korea looks pretty cheap. RA uses the Gordon growth model, so the low dividen...
by lazyday
Sat Jan 17, 2015 9:40 am
 
Forum: Investing - Theory, News & General
Topic: To what extent are European stocks better value than US?
Replies: 9
Views: 826

Re: Alternatives to TurboTax

Here's a list of free software companies and the criteria sheepdog mentioned: http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck And the Taxact link: https://www.taxactonline.com/s_online_tax2014/free-file.asp?sc=14050302&m=FFA&src=FFA PCmag has been rating tax programs for some years now. Fo...
by lazyday
Sat Jan 17, 2015 9:14 am
 
Forum: Personal Consumer Issues
Topic: Alternatives to TurboTax
Replies: 26
Views: 2710

Re: RA Expected Returns update yearend '14

garlandwhizzer wrote:Now they tend to believe... US REITS are a haven of safety.

:shock:

I hope the industry has less leverage than in 1998.

Reits are on the first tab of the RA page. To find them, look near the bottom right side, where the worst Sharpe ratio is: high volatility and low returns.
by lazyday
Sat Jan 17, 2015 7:40 am
 
Forum: Investing - Theory, News & General
Topic: RA Expected Returns update yearend '14
Replies: 10
Views: 1160

Re: To what extent are European stocks better value than US?

I guess I've been seeing different figures. For example, Vanguard gives the PE ratio of the FTSE Developed Europe index as 19.5. I don't understand the variation in the PE ratios from different sources. There are different ways to measure P/E. For example, what do you do about companies with negati...
by lazyday
Sat Jan 17, 2015 7:25 am
 
Forum: Investing - Theory, News & General
Topic: To what extent are European stocks better value than US?
Replies: 9
Views: 826

Re: $ Value of CD early withdrawal option?

dphilipps and Kevin , When comparing two similar instruments with a small or large spread, it might be best to think about this as you say. With a complex decision set and/or a moderate spread, it would help to simplify, such as by estimating a monetary value of the withdrawal put. Maybe some detai...
by lazyday
Sat Jan 17, 2015 6:30 am
 
Forum: Investing - Theory, News & General
Topic: $ Value of CD early withdrawal option?
Replies: 14
Views: 1453

Re: $ Value of CD early withdrawal option?

Kevin, Thanks for the link. I've done similar thinking when comparing two CDs with different early withdrawal policies. I might try something similar when comparing a direct to brokered CD, but unless the choice is already obvious, it doesn't seem to help much. I'd need to make guesses about chances...
by lazyday
Sat Jan 17, 2015 6:19 am
 
Forum: Investing - Theory, News & General
Topic: $ Value of CD early withdrawal option?
Replies: 14
Views: 1453
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