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Re: What gives with these low returns?

With that track record you should apply to be the president of HMC which is vacant. I am sure they will offer a hefty sign on bonus.

http://www.businessweek.com/news/2014-0 ... -step-down
by manwithnoname
Fri Jul 04, 2014 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: What gives with these low returns?
Replies: 17
Views: 1401

Re: What gives with these low returns?

For comparison, Vanguard Balanced Index Fund--60% Total Stock, 40% Total Bond--earned 13.50% annualized over the last five years. By my crude calculations based on Morningstar's growth charts, 8.6% over the last 20 years. Depends on what period is measured. Over previous 20 years average annual ret...
by manwithnoname
Fri Jul 04, 2014 3:31 pm
 
Forum: Investing - Theory, News & General
Topic: What gives with these low returns?
Replies: 17
Views: 1401

Re: Merton: 401(k) retirement plans face crisis

bob wrote: "The idea of the life care annuity began around 1999. That's the idea of bundling a life annuity with long term care insurance. The idea is still kicking around, but to the best of my knowledge no one has introduced the product. Sooner or later someone will IMO, who knows when."...
by manwithnoname
Fri Jul 04, 2014 3:19 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: What gives with these low returns?

Depends on what period is measured. Over previous 20 years average annual return of Harvard endowment is 12% which is 3% above its benchmark. Take you pick last 5 or last 20. http://www.hmc.harvard.edu/investment-management/performance-history.html That may be true, but why the significant under-pe...
by manwithnoname
Fri Jul 04, 2014 3:06 pm
 
Forum: Investing - Theory, News & General
Topic: What gives with these low returns?
Replies: 17
Views: 1401

Re: What gives with these low returns?

Depends on what period is measured. Over previous 20 years average annual return of Harvard endowment is 12% which is 3% above its benchmark. Take you pick last 5 or last 20.

http://www.hmc.harvard.edu/investment-m ... story.html
by manwithnoname
Fri Jul 04, 2014 2:58 pm
 
Forum: Investing - Theory, News & General
Topic: What gives with these low returns?
Replies: 17
Views: 1401

Re: Merton: 401(k) retirement plans face crisis

<snip>The answer is simple: who is going guarantee payments from a retirement system which requires unlimited payments for an infinite period of time in investment markets which periodically have 50% or more volatility? Only entity I know of that can guarantee such risks is the US government which ...
by manwithnoname
Fri Jul 04, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: Merton: 401(k) retirement plans face crisis

Can someone explain to me why the private market, ie, insurers, mutual fund companies, has not offered a product that would "duplicate" as much as possible the basic features of the DB system, basically, some sort of deferred annuity, which you pay into during your working years, and star...
by manwithnoname
Fri Jul 04, 2014 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: Merton: 401(k) retirement plans face crisis

The 401k (et al) Defined Contribution scheme is an accident, based on exploitation of a tax loophole. One of the casualties of that accident is Defined Benefit pension plans. What's missing from all of this, IMO, is a conversion opportunity to a DB plan for DC participants. Yes, an annuitization op...
by manwithnoname
Fri Jul 04, 2014 10:19 am
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: Vanguard - Energy Fund

David Swensen didn't recommend energy for small investors (in his book Unconventional Success). http://www.bogleheads.org/blog/david-swensens-portfolio-from-unconventional-success/ So? If you think that TIPS and emerging markets will outperform the energy sector then follow his investment advice. I...
by manwithnoname
Fri Jul 04, 2014 8:52 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard - Energy Fund
Replies: 31
Views: 3791

Re: Merton: 401(k) retirement plans face crisis

Most investors will be better off investing to accumulate assets for retirement instead of trying to fund for the purchase of income because: 1. No one can calculate how much income they will need for retirement that will begin 10 or more years in the future that could last 40 years. 2. No one can ...
by manwithnoname
Fri Jul 04, 2014 12:41 am
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: Current Stock Market Predictions

A lot of the debate here seems in response to the word "prediction," which apparently triggers all kinds of negative associations (many of which I agree with). What if we consider that what Bogle is doing is not really a prediction, it's a framework for calculating expected returns and ri...
by manwithnoname
Thu Jul 03, 2014 11:58 pm
 
Forum: Investing - Theory, News & General
Topic: Current Stock Market Predictions
Replies: 35
Views: 5296

Re: Can Beneficiary IRAs Be Merged? (same parent)

My Father died last year and left me three Beneficiary IRAs in 3 different investment houses - one each in Vanguard, Schwab and Fidelity. Each account has the holdings of the respective company - Vanguard has only VG mutual funds and Fidelity has Fidelity mutual funds, while Schwab (smallest) is al...
by manwithnoname
Thu Jul 03, 2014 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: Can Beneficiary IRAs Be Merged? (same parent)
Replies: 10
Views: 755

Re: POLL: What is your weighted average duration in FI?

What about the TSP G fund? The TSP fact sheet for the fund makes no mention of duration. I don't know. Never had access to this fund. G fund holds non marketable treasury bonds which have an infinite duration because the bonds are interagency debt similar to the Treasury bonds held by in SS and Med...
by manwithnoname
Thu Jul 03, 2014 9:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: POLL: What is your weighted average duration in FI?
Replies: 16
Views: 1001

Re: CBS vs CBSO spinoff tender offer

Thanks again. I was justing asking what people thought might be the better of two investments for the future. I know it's a chit/chat question. Just like asking if you think IBM or Google is a better investment now. No hidden deep meaning to the question. This Q is about as meaningless as comparing...
by manwithnoname
Thu Jul 03, 2014 3:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: CBS vs CBSO spinoff tender offer
Replies: 14
Views: 1093

Re: WSJ article on ROTH 401K's vs Traditional

If you are receiving SS, pension, dividends, interest, cap gains, rental income, part time work, i.e., whatever sort of taxable income you can imagine, then starting RMDs on top of this will make the RMD taxed at the marginal rate you had previously, and maybe the next higher one too. My RMD is all...
by manwithnoname
Thu Jul 03, 2014 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4406

Re: US citizens abroad cannot invest through a US brokerage

As a US citizen abroad for 9 years, I'm far from concerned about this. I've opened multiple accounts (both bank and brokerage) with companies that claim only US residents can open accounts. The main point is that they do not know I live abroad. I never provided them a foreign address. And they can'...
by manwithnoname
Wed Jul 02, 2014 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: US citizens abroad cannot invest through [Fidelity]
Replies: 94
Views: 7092

Re: WSJ article on ROTH 401K's vs Traditional

If you are receiving SS, pension, dividends, interest, cap gains, rental income, part time work, i.e., whatever sort of taxable income you can imagine, then starting RMDs on top of this will make the RMD taxed at the marginal rate you had previously, and maybe the next higher one too. My RMD is all...
by manwithnoname
Wed Jul 02, 2014 8:27 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4406

Re: WSJ article on ROTH 401K's vs Traditional

As it is impossible to predict future tax law changes I always find the best financial planning tool to assume that current tax laws will continue indefinitely. Given the frequency with with the laws change, that seems a strange assumption. From Forbes 2013, OK, it is Forbes and they hate taxes, bu...
by manwithnoname
Wed Jul 02, 2014 8:04 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4406

Re: Merton: 401(k) retirement plans face crisis

Before considering longevity insurance investors need to consider that the odds of a 65 year old living to 85 in order to commence the annuity payment is about 50% which means that a 65 year old has a 50% chance of losing 100% of his 125k investment. What kind of financial advisor would recommend s...
by manwithnoname
Wed Jul 02, 2014 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: Changed Lawyers - Won't Transfer File

My mother recently found new legal representation to administer her estate/trust. She told me the her file is still with the old law firm and they are making her drive 45 minutes to the office to pick it up. I think this is BS and the old firm should just mail it to the new firm. I reach out to the...
by manwithnoname
Wed Jul 02, 2014 1:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Changed Lawyers - Won't Transfer File
Replies: 29
Views: 2234

Re: Vanguard - Energy Fund

Bought VG energy fund last year for my roth IRA when it was cheap to increase investments in energy sector. Up 20%. Also own EEP which has jumped about 25% in last 4 months and pays 6%. Will increase investments in energy sector, oil, MLPs, EFTs, on tax efficient basis because US energy production ...
by manwithnoname
Wed Jul 02, 2014 1:19 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard - Energy Fund
Replies: 31
Views: 3791

Re: Merton: 401(k) retirement plans face crisis

Hi Leeraar, Merton continually points out that the investor has three ways to improve the chances of meeting retirement income goals: Save more (consume less) now, work longer (retire later), or take more risk (and accept a larger loss if the risk shows up). I would say the first two are both very ...
by manwithnoname
Wed Jul 02, 2014 12:44 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: POLL: Mortgage as a negative bond

The sales price of your home doesn't include your investments, or does it ? Home is not an investment. Based on the firms I have analyzed corporations are dumb, e.g., Enron, Lehman, Bear Sterns, WAMU, etc. Or as Warren Buffet reminds investors only invest in a corporation that any fool can run, bec...
by manwithnoname
Wed Jul 02, 2014 12:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Mortgage as a negative bond
Replies: 89
Views: 2867

Re: finding an adviser/handholder for wife

I have wrestled with this scenario myself and have not figured out a good answer. My wife would want someone to handle "everything" (including taxes). As much as I would dislike having her pay AUM fees, if the right person would indeed handle "everything" - put money in her chec...
by manwithnoname
Wed Jul 02, 2014 11:54 am
 
Forum: Personal Finance (Not Investing)
Topic: finding an adviser/handholder for wife
Replies: 15
Views: 2564

Re: Vanguard - Energy Fund

Bought VG energy fund last year for my roth IRA when it was cheap to increase investments in energy sector. Up 20%. Also own EEP which has jumped about 25% in last 4 months and pays 6%. Will increase investments in energy sector, oil, MLPs, EFTs, on tax efficient basis because US energy production w...
by manwithnoname
Wed Jul 02, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard - Energy Fund
Replies: 31
Views: 3791

Re: Longevity Insurance now allowed in IRA/401k/etc.

You would be better off buying Puerto Rico GO bonds because at least there is no default risk. If one lives to 105, which is the better deal, the annuity or the PR bonds? What about 99? Or perhaps 93? The point is, how can you possibly say one was "better off", without knowing the future....
by manwithnoname
Wed Jul 02, 2014 11:20 am
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: POLL: Mortgage as a negative bond

Mortgage is not an asset, its a liability. A mortgage of 100k reduces net worth by 100k, but it has no effect on your investment in bonds under your AA. When you sell the home or payoff the mortgage the mortgage liability goes to 0 but that event should not change the percent of assets invested in ...
by manwithnoname
Wed Jul 02, 2014 11:11 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Mortgage as a negative bond
Replies: 89
Views: 2867

Re: Longevity Insurance now allowed in IRA/401k/etc.

I can answer this question, which apparently is unfathomable to a typical boglehead: Howe many 65 years olds live to 85? I don't plan to determine the answer to this question, because the result is not of interest to me. [Well, ok, I am interested, but not THAT interested]. But I AM interested in t...
by manwithnoname
Wed Jul 02, 2014 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: US citizens abroad cannot invest through a US brokerage

Only affects 60,000 accounts out of 20 million. Too much compliance/tax regulation for number of accounts involved.
by manwithnoname
Wed Jul 02, 2014 10:28 am
 
Forum: Investing - Theory, News & General
Topic: US citizens abroad cannot invest through [Fidelity]
Replies: 94
Views: 7092

Re: POLL: Mortgage as a negative bond

Why would anyone treat a mortgage as a negative bond? Is as dumb as treating SS benefits as part of fixed income for the purpose of determining AA. Can you explain why treating SS benefits as part of fixed income for the purpose of determining AA is dumb? (I'm not saying I treat SS as such. I just ...
by manwithnoname
Wed Jul 02, 2014 10:17 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Mortgage as a negative bond
Replies: 89
Views: 2867

Re: Current Stock Market Predictions

I would like to say that the most important part of this calculation is missing. That is a reasonable estimate of the 95% confidence interval. I think your point is that there is wild possibilities of outcomes. You get it. Now onto my rant. Where I think a lot of people fall into a trap is using fr...
by manwithnoname
Wed Jul 02, 2014 1:50 am
 
Forum: Investing - Theory, News & General
Topic: Current Stock Market Predictions
Replies: 35
Views: 5296

Re: Longevity Insurance now allowed in IRA/401k/etc.

2. SS is taxed as ordinary income. Only SS that is taxed is taxed as ordinary income. SS that is not taxed is not taxed as ordinary income. So. I was speaking generically comparing SS taxation to Cap gains, qualified dividends and roths. Yes, only 1/3rd of taxpayers pay taxes on SS but bogleheads k...
by manwithnoname
Tue Jul 01, 2014 8:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: Longevity Insurance now allowed in IRA/401k/etc.

But who would invest in an annuity policy that will pay 0 if you die prematurely. The details are different but the result is similar to deferring social security until you are 70 to get a larger amount then. If you do either of these then die at the age of 69 then you get nothing if you are single...
by manwithnoname
Tue Jul 01, 2014 7:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: The Truth Hurts: CNBC

Something is missing from the story. How does one accumulate $5 million without knowing how to save and budget? Sounds more like someone who inherited the wealth from a parent or spouse or divorce settlement and has never had to learn what a dollar is worth or how to manage it. Worse yet - how does...
by manwithnoname
Tue Jul 01, 2014 3:18 pm
 
Forum: Investing - Theory, News & General
Topic: The Truth Hurts: CNBC
Replies: 17
Views: 3492

Re: The Truth Hurts: CNBC

Something is missing from the story. How does one accumulate $5 million without knowing how to save and budget? Sounds more like someone who inherited the wealth from a parent or spouse or divorce settlement and has never had to learn what a dollar is worth or how to manage it. Just how many invest...
by manwithnoname
Tue Jul 01, 2014 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: The Truth Hurts: CNBC
Replies: 17
Views: 3492

Re: Longevity Insurance now allowed in IRA/401k/etc.

But who would invest in an annuity policy that will pay 0 if you die prematurely. Longevity insurance products offer considerable comfort to those who worry about having to move in with their kids during retirement. But they come with some significant drawbacks, too. The biggest is that basic longe...
by manwithnoname
Tue Jul 01, 2014 2:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: The Truth Hurts: CNBC

How do you tell a client she can't retire yet? How do you tell another he can't sustain his current lifestyle? Delivering bad news comes with the territory for financial advisors. "A large amount of our time is spent counseling and supporting clients. We often become their support team for dai...
by manwithnoname
Tue Jul 01, 2014 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: The Truth Hurts: CNBC
Replies: 17
Views: 3492

Re: POLL: Mortgage as a negative bond

Why would anyone treat a mortgage as a negative bond? Is as dumb as treating SS benefits as part of fixed income for the purpose of determining AA.

My mortgage is a reduction of my net worth which is too small to be material.
by manwithnoname
Tue Jul 01, 2014 1:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Mortgage as a negative bond
Replies: 89
Views: 2867

Re: Longevity Insurance now allowed in IRA/401k/etc.

But who would invest in an annuity policy that will pay 0 if you die prematurely. Longevity insurance products offer considerable comfort to those who worry about having to move in with their kids during retirement. But they come with some significant drawbacks, too. The biggest is that basic longe...
by manwithnoname
Tue Jul 01, 2014 1:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: Longevity Insurance now allowed in IRA/401k/etc.

But who would invest in an annuity policy that will pay 0 if you die prematurely. Longevity insurance products offer considerable comfort to those who worry about having to move in with their kids during retirement. But they come with some significant drawbacks, too. The biggest is that basic longev...
by manwithnoname
Tue Jul 01, 2014 1:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance now allowed in IRA/401k/etc.
Replies: 97
Views: 4689

Re: Merton: 401(k) retirement plans face crisis

There are valid reasons for skepticism of Merton's theory due to its fantasyland solutions to retirement income such as level 1 income from state DB plans because only about 12% of all workers are employed by governments and benefits is are low. In NJ average state pension is only 22k. Few govt work...
by manwithnoname
Tue Jul 01, 2014 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: Merton: 401(k) retirement plans face crisis
Replies: 188
Views: 16610

Re: Roth 401(k) and the "tax advantaged years"

Also keep in mind that most assets get a 'step up' in basis on death of the owner. They get passed free of tax to the next generation. But not tax advantaged assets. There's no step up in basis. Roth ira do, they pass on to next generation with out paying tax, when being withdrawn. But the opportun...
by manwithnoname
Mon Jun 30, 2014 7:51 pm
 
Forum: Investing - Theory, News & General
Topic: Roth 401(k) and the "tax advantaged years"
Replies: 14
Views: 1243

Re: JP Morgan botched 401k distribution

What good is getting the plan document going to do and how is participant going to decipher it? Its not exactly written in plain language. Mine is in clear text and it definitely lays out the options for withdrawals. Options for withdrawal does not mean that every tax nuance is going to be explaine...
by manwithnoname
Mon Jun 30, 2014 7:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: JP Morgan botched 401k distribution
Replies: 36
Views: 2276

Re: JP Morgan botched 401k distribution

What is his complaint? Plan administrator must follow plan rules. DOL cannot force plan administrator to violate plan rules. Which is why I stressed getting the plan documents and copy the request first. What good is getting the plan document going to do and how is participant going to decipher it?...
by manwithnoname
Mon Jun 30, 2014 5:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: JP Morgan botched 401k distribution
Replies: 36
Views: 2276

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

Well, despite all the calculations to the contrary, the REIT train is still rolling. Vanguard REIT Index up 17.90% YTD. Dont know about that bill. Seems from this chart a pretty damn good call... ohh, and rising rates hurt REIT's pretty badly. Expect more blood. http://i61.tinypic.com/2zfr5mx.png W...
by manwithnoname
Mon Jun 30, 2014 5:35 pm
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 119
Views: 14652

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

The only infallible rule in investing is buy low sell high. I bought VNQ 5 years ago when RE was an underperforming investment class and my annual increase in value is over 26% +3.62% dividend. Could not care less about some speculative projection of how much REITS will return by some metric maven w...
by manwithnoname
Mon Jun 30, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 119
Views: 14652

Re: JP Morgan botched 401k distribution

Is this an ERISA problem at any rate I would let the plan administration know you are planning to follow up with official complaints with the relevant regulatory bodies BUT do this after you get a copy of the plan documents and the forms you filed. What is his complaint? Plan administrator must fol...
by manwithnoname
Mon Jun 30, 2014 3:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: JP Morgan botched 401k distribution
Replies: 36
Views: 2276

Re: Hit our number, should we change our asset allocation?

I know this could be filed under a category of "first world problems" - but I am going to ask it anyway. My wife and I have been fortunate. We are approaching 50, and looking at it from many angles, I've determined we have hit our "number." Meaning, we could retire today and lik...
by manwithnoname
Mon Jun 30, 2014 11:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Hit our number, should we change our asset allocation?
Replies: 34
Views: 2727

Re: beneficiary form trumps will

Spousal rights to 403b benefits are subject to three distinct rules. 1. If the 403b plan is subject to ERISA because the non profit employer make periodic contributions to a 403b plan then the spouse is automatically entitled a benefit equal to the 50% of the account value unless the spouse waive ri...
by manwithnoname
Mon Jun 30, 2014 11:07 am
 
Forum: Personal Finance (Not Investing)
Topic: beneficiary form trumps will
Replies: 54
Views: 4027

Re: beneficiary form trumps will

How did the executor get their hands on non probate assets with beneficiaries without gross negligence on the part of the custodian of those assets? Just because an asset of the deceased does not pass through probate doesn't mean in is not subject to claims of the estate. In NY inheritors of non pr...
by manwithnoname
Mon Jun 30, 2014 10:37 am
 
Forum: Personal Finance (Not Investing)
Topic: beneficiary form trumps will
Replies: 54
Views: 4027
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