Search found 5459 matches

by market timer
Mon Jun 29, 2015 11:28 am
Forum: Investing - Theory, News & General
Topic: Spending from separate retirement buckets
Replies: 21
Views: 1523

Re: Spending from separate retirement buckets

Yeah, in the example I gave, you'd let the portfolio drift to something more stock heavy over time, spending the fixed income. The main point I wanted to emphasize in my example is that the first portfolio will be spent in, say, 8 years (maybe ages 60-68). So, the average liability it is meeting is...
by market timer
Mon Jun 29, 2015 9:34 am
Forum: Investing - Theory, News & General
Topic: Spending from separate retirement buckets
Replies: 21
Views: 1523

Re: Spending from separate retirement buckets

I think it makes sense to have different allocations for different goals. A common example is an early retiree planning to draw heavily from his portfolio before Social Security kicks in, then much less in later years. To me, those are two different goals, requiring two different portfolios. Some p...
by market timer
Mon Jun 29, 2015 8:58 am
Forum: Investing - Theory, News & General
Topic: Spending from separate retirement buckets
Replies: 21
Views: 1523

Re: Spending from separate retirement buckets

I think it makes sense to have different allocations for different goals. A common example is an early retiree planning to draw heavily from his portfolio before Social Security kicks in, then much less in later years. To me, those are two different goals, requiring two different portfolios.
by market timer
Fri Jun 26, 2015 10:51 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring @ 60; $1 million (portfolio)
Replies: 22
Views: 6608

Re: Retiring @ 60; $1 million (portfolio)

Your plan seems reasonable to me. My one suggestion is to separate the portion of your portfolio meant for spending in the next 10 years from the part that will cover spending beyond age 70. For the portfolio you intend to spend over the next 10 years (roughly $600K, assuming you delay SS until age ...
by market timer
Wed Jun 24, 2015 11:09 am
Forum: Investing - Help with Personal Investments
Topic: I've got $80k burning a whole in my pocket, what should I do with it?
Replies: 21
Views: 2665

Re: I've got $80k burning a whole in my pocket, what should I do with it?

Without PSLF, I'd advise you to pay down your loans with this money if the loans had an interest rate of roughly 4% or higher. PSLF makes things more complicated. You're basically paying an extra 2.9% vs. what I'd be comfortable paying (i.e., 6.9% vs. 4%). Let's say it takes you 5 years to figure o...
by market timer
Wed Jun 24, 2015 9:32 am
Forum: Investing - Help with Personal Investments
Topic: I've got $80k burning a whole in my pocket, what should I do with it?
Replies: 21
Views: 2665

Re: I've got $80k burning a whole in my pocket, what should I do with it?

Without PSLF, I'd advise you to pay down your loans with this money if the loans had an interest rate of roughly 4% or higher. PSLF makes things more complicated. You're basically paying an extra 2.9% vs. what I'd be comfortable paying (i.e., 6.9% vs. 4%). Let's say it takes you 5 years to figure ou...
by market timer
Sun Jun 21, 2015 6:04 am
Forum: Personal Finance (Not Investing)
Topic: Retiring Abroad
Replies: 22
Views: 3805

Re: Retiring Abroad

The US is rather tax friendly for people living on passive income, plus you might get subsidized health insurance (Obamacare) and Medicare later in life. It's my top choice for retirement, and I live overseas currently. I think there is a better financial case to be made for working abroad in your ...
by market timer
Sun Jun 21, 2015 5:32 am
Forum: Personal Finance (Not Investing)
Topic: Retiring Abroad
Replies: 22
Views: 3805

Re: Retiring Abroad

Additionally, for anyone considering living abroad I would not underestimate the benefits of social security. I'd certainly advocate working enough to get one's benefits (10 years) and, ideally, contribute enough to hit the first bend point. I don't mean to hijack the thread, but what is the first ...
by market timer
Sat Jun 20, 2015 1:38 am
Forum: Personal Consumer Issues
Topic: Your Top 10 Books
Replies: 56
Views: 6797

Re: Your Top 10 Books

Wind-Up Bird Chronicle, Murakami Glass Bead Game, Hesse Siddhartha, Hesse Thousand Autumns of Jacob de Zoet, Mitchell Lost Illusions, Balzac Journey to the End of the Night, Celine Confederacy of Dunces, Toole The Most Instructive Games of Chess Ever Played, Chernev Complexity, Waldrop Bonfire of th...
by market timer
Fri Jun 19, 2015 11:05 am
Forum: Investing - Theory, News & General
Topic: Duration - why is it expressed in years?
Replies: 13
Views: 1433

Re: Duration - why is it expressed in years?

Good wikipedia article on this: In finance, the duration of a financial asset that consists of fixed cash flows, for example a bond, is the weighted average of the times until those fixed cash flows are received. When an asset is considered as a function of yield, duration also measures the price se...
by market timer
Fri Jun 19, 2015 10:36 am
Forum: Investing - Theory, News & General
Topic: Interest rate hedged bond ETF
Replies: 9
Views: 684

Re: Interest rate hedged bond ETF

market timer: In what manner is the 197bps hedging cost paid for? Is it amortized over time? The expense ratio, with fee waiver, is just.25%. The cost is paid implicitly via Treasury futures. Futures prices take into account yield differentials between reference bonds and the risk-free rate. It is ...
by market timer
Fri Jun 19, 2015 10:09 am
Forum: Investing - Theory, News & General
Topic: Interest rate hedged bond ETF
Replies: 9
Views: 684

Re: Interest rate hedged bond ETF

Anyone using these? ishares has a few, investment grade corporate and high yield corporate. It looks like you sacrifice 20-30 bps, seems like a small price to pay for that feature. You should expect to pay in hedging costs roughly the risk-free rate for the duration of the unhedged fund. LQD has a ...
by market timer
Wed Jun 17, 2015 11:26 pm
Forum: Personal Consumer Issues
Topic: Your Top 10 Bands and Top 10 Movies
Replies: 30
Views: 3546

Re: Your Top 10 Bands and Top 10 Movies

Based on listening frequency over the years, my favorite bands are: Kings of Convenience Midlake Fleet Foxes Interpol Arctic Monkeys Modest Mouse Smashing Pumpkins Pink Floyd The Beatles Radiohead For movies, I'll give 13: Sunset Blvd (1950) Ikiru (1952) Vertigo (1958) The Hustler (1961) A Clockwork...
by market timer
Wed Jun 17, 2015 9:19 pm
Forum: Personal Consumer Issues
Topic: How much do your children cost per month?
Replies: 83
Views: 6531

Re: How much do your children cost per month?

19-month-old child $450/month nanny Only $450/month for a nanny? For how many hours? Is one of you a stay-at-home parent or do you have family help? This is for 360 days per year, around the clock care. It's in Thailand where labor is cheaper. I should add maybe $200/month imputed rent to this cost...
by market timer
Wed Jun 17, 2015 11:38 am
Forum: Personal Consumer Issues
Topic: How much do your children cost per month?
Replies: 83
Views: 6531

Re: How much do your children cost per month?

19-month-old child $450/month nanny $100/month food $50/month diapers $50/month clothes (mostly gifts) $50/month health care $50/month toys and books (mostly gifts) $50/month other stuff: crib, stroller, monitor, etc. Next year: $1000/month nursery instead of nanny $800/month extra imputed rent from...
by market timer
Tue Jun 16, 2015 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: Retiring Abroad
Replies: 22
Views: 3805

Re: Retiring Abroad

The US is rather tax friendly for people living on passive income, plus you might get subsidized health insurance (Obamacare) and Medicare later in life. It's my top choice for retirement, and I live overseas currently. I think there is a better financial case to be made for working abroad in your 3...
by market timer
Sun Jun 14, 2015 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: Big Decision to Make
Replies: 55
Views: 7234

Re: Big Decision to Make

I would absolutely take the offer. If you have a demanding job, your life revolves around the office. Doesn't matter what country you're in. Sounds like this is a great time to start your family, so your wife will have plenty to do anyhow.
by market timer
Sun Jun 14, 2015 10:38 pm
Forum: Investing - Help with Personal Investments
Topic: 25 y/o--For bond portion of retirement account, only long term bonds (??)
Replies: 6
Views: 734

Re: 25 y/o--For bond portion of retirement account, only long term bonds (??)

People overly fixate on short run price volatility, given that our liabilities are long run in nature. Despite the equity-like volatility of long term bonds, they are one of the safest investments for meeting long term liabilities. You have a very good idea what you will end up with in 30+ years, un...
by market timer
Sun Jun 14, 2015 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: Help me understand student loan interest capitalization
Replies: 8
Views: 866

Re: Help me understand student loan interest capitalization

I think the main reason to pay off the interest before it is capitalized is to be able to get a tax deduction. You are able to deduct student loan interest paid. Once that interest capitalizes, you are unable to deduct payments to the interest that has been converted to principal.
by market timer
Sat Jun 13, 2015 11:41 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off Student Loans or Aiming for Forgiveness
Replies: 9
Views: 1402

Re: Paying off Student Loans or Aiming for Forgiveness

The rules on PSLF appear to be in a state of flux. The current rules are unsustainable in the long run. I haven't followed very closely lately, but I believe new applicants might no longer be allowed to use married filing separately to reduce their required minimum payments. In other words, if you a...
by market timer
Sat Jun 13, 2015 11:37 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off Student Loans or Aiming for Forgiveness
Replies: 9
Views: 1402

Re: Paying off Student Loans or Aiming for Forgiveness

Did she have cosigners on her loans? It's hard to see how she could have gotten $130K loans on her own unless it was for medical or law school. Cosigners might muddy the waters on repayment. The government does not consider future ability to repay when it offers student loans. You could get a maste...
by market timer
Sat Jun 13, 2015 7:38 am
Forum: Investing - Help with Personal Investments
Topic: LCOL, zero tax bracket, middle class retirement-OK to pull the trigger?
Replies: 10
Views: 1599

Re: LCOL, zero tax bracket, middle class retirement-OK to pull the trigger?

Your plan looks good to me. I agree with splitting the portfolio into two buckets, as you have done. My preference would be for a combination of short-term and intermediate-term corporate bond fund for the first six years, since this is money that is earmarked for spending in the fairly near term. C...
by market timer
Fri Jun 12, 2015 1:48 am
Forum: Investing - Theory, News & General
Topic: REITs - why the volatility?
Replies: 44
Views: 3753

Re: REITs - why the volatility?

Dividend growth in REITs is expected to track inflation only (and is still not "NAV growth"). Speculative return expectation is zero unless you apply RTM in which case it would be negative from these prices. From the wiki: William Bernstein has proposed a simple model for estimating long ...
by market timer
Thu Jun 11, 2015 1:22 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 931
Views: 146630

Re: What Movie Have You Recently Watched?

I've wanted to see "La Grande Bellezza" ("The Great Beauty") for a while--finally caught a screening at a film festival. The story involves a 65-year-old writer/socialite who is trying to arrange his life's denouement. This was one of the best movies I've seen in the past year. F...
by market timer
Wed Jun 10, 2015 10:29 pm
Forum: Investing - Theory, News & General
Topic: Interest rates are rising - is it inflation?
Replies: 15
Views: 1765

Re: Interest rates are rising - is it inflation?

Not so much inflation as the avoidance of deflation. Apparently speculators were front running the ECB's bond buying program. Now they are finding themselves on the wrong side of Bill Gross' " short of a lifetime ". German borrowing costs jump back above 1% Ron Agreed, it seems that this ...
by market timer
Tue Jun 09, 2015 12:00 pm
Forum: Personal Finance (Not Investing)
Topic: How risky is real estate (especially New York City real estate)?
Replies: 26
Views: 3475

Re: How risky is real estate (especially New York City real estate)?

We thought about buying a few years ago, and now most places around us are about double. Your neighborhood might be unique, but according to Case-Shiller, there has not been much of a rebound in NYC real estate. Prices have risen only 15% from the recent trough and are still 15% below peak levels. ...
by market timer
Tue Jun 09, 2015 12:12 am
Forum: Investing - Theory, News & General
Topic: There’s No Place to Hide as Bonds Move in Tandem With Equities?
Replies: 18
Views: 2783

Re: There’s No Place to Hide as Bonds Move in Tandem With Equities?

Interesting chart from JPMorgan showing how stock/bond correlation is affected by interest rates Putting interest rates on the x-axis frames this relationship as one where low yields lead to stronger correlations. I'd flip the x and y axes and argue that stronger correlations lead to lower yields. ...
by market timer
Mon Jun 08, 2015 11:20 am
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 812
Views: 135807

Re: What Book Are You Currently Reading? Part VI

Nonfiction: On Intelligence by Jeff Hawkins and Sandra Blakeslee
Fiction: Never Let Me Go by Kazuo Ishiguro
by market timer
Mon Jun 08, 2015 9:21 am
Forum: Investing - Theory, News & General
Topic: TIPS Funds Yielding 6+%
Replies: 30
Views: 2408

Re: TIPS Funds Yielding 6+%

TIPS pay inflation plus the real yield. In March, the non-seasonally adjusted inflation change was 0.6% month/month. When you annualize this number, you get a yield greater than 6%. It is a temporary blip due to seasonality. The seasonally adjusted inflation change was just 0.2% month/month.
by market timer
Mon Jun 08, 2015 8:40 am
Forum: Investing - Theory, News & General
Topic: TIPS Funds Yielding 6+%
Replies: 30
Views: 2408

Re: TIPS Funds Yielding 6+%

It's no error. I called and they confirmed. All of their TIPS funds have high 30 day yield. Maybe it is due to seasonality? Inflation peaks in the summer. If someone annualizes a non-seasonally adjusted TIPS yield over a 30-day period, it is possible to end up with abnormal returns. You might want ...
by market timer
Sun Jun 07, 2015 11:00 am
Forum: Personal Finance (Not Investing)
Topic: Confused college kid
Replies: 54
Views: 5140

Re: Confused college kid

As an economist now learning how to code in middle age, I agree with your choice of a second major in computer science. Coding has become an essential job skill. The finance industry is ripe for disruption via increased automation and disintermediation. It is worth spending some time in the industry...
by market timer
Sun Jun 07, 2015 7:32 am
Forum: Investing - Theory, News & General
Topic: What is the expected long run NAV return on REITS?
Replies: 14
Views: 1693

Re: What is the expected long run NAV return on REITS?

Equity REITs should have NAV growth over time. They own real estate, typically levered 2:1, that should appreciate at least as quickly as the rate of inflation. There is typically a clear upward trajectory of dividend payments in equity REITs that have been around since the 1990s, and NAV growth sho...
by market timer
Sat Jun 06, 2015 11:39 am
Forum: Investing - Theory, News & General
Topic: Lacy Hunt: " (Not) anywhere near the secular low in long-term (interest) rates."
Replies: 33
Views: 4152

Re: Lacy Hunt: " (Not) anywhere near the secular low in long-term (interest) rates."

The inflation argument is simple: the Fed can always create as much inflation as it wants even if it has to metaphorically drop money out of helicopters. If the Fed really wants 2% inflation, then in the long run, that's what we'll end up with more or less. The Fed is not allowed to drop money from...
by market timer
Sat Jun 06, 2015 10:48 am
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 931
Views: 146630

Re: What Movie Have You Recently Watched?

Nightcrawler - excellent
Kingsmen - OK
by market timer
Fri Jun 05, 2015 9:28 pm
Forum: Investing - Theory, News & General
Topic: Kessler: "expect that long US Treasury rates will come down much closer to 0%"
Replies: 8
Views: 1562

Re: Kessler: "expect that long US Treasury rates will come down much closer to 0%"

Their argument relies on knowing what the true output gap is. I don't have any faith that they can identify the output gap better than the market. The Fed and other economists have consistently overestimated GDP growth out of this recovery, while underestimating how quickly the unemployment rate wou...
by market timer
Thu Jun 04, 2015 1:26 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 755
Views: 116290

Re: Should I use margin to buy a balanced fund?

For those watching the spreadsheets, I updated the new one. I backfilled data to April 14th when I switched to futures and got the portfolio back into balance. It still only has 2 weeks of data, but it's better than only 1 week. https://docs.google.com/spreadsheets/d/1Oq62lUUf7qi3DJ9vImlUzqLlwkBpLO...
by market timer
Wed Jun 03, 2015 11:12 pm
Forum: Personal Finance (Not Investing)
Topic: Paying old debt
Replies: 16
Views: 1811

Re: Paying old debt

The fishiest part to me is that we have searched her credit reports extensively and there are no collections listed. How can it be in collections and the credit report not know about it? As a reminder, the account apparently went unpaid starting in fall of 2008, so we are still within the 7 year pe...
by market timer
Wed Jun 03, 2015 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Quit high paying job to be stay at home parent?
Replies: 44
Views: 5113

Re: Quit high paying job to be stay at home parent?

Yes, you can easily afford it. You'll probably get bored, though.
by market timer
Wed Jun 03, 2015 2:31 am
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 9293

Re: Dividend yield is a lot less important than buyback yield

Dividends do nothing of the sort. They match no liabilities with anything approaching the abilities of bonds. They have no durations that are somehow independent of buybacks or even the stock price, or approaching the certainty of a bond that you know pays this much and ends on this date. BP cut it...
by market timer
Wed Jun 03, 2015 1:43 am
Forum: Personal Finance (Not Investing)
Topic: Minimizing Student Loan Total
Replies: 2
Views: 408

Re: Minimizing Student Loan Total

Generally, you shouldn't make payments toward student loan interest while in school. Interest on federal student loans does not compound (i.e., interest only accrues on principal, not on interest), so when you make payments toward loan interest, you're effectively paying off a 0% interest loan. Yes,...
by market timer
Tue Jun 02, 2015 10:53 pm
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 9293

Re: Dividend yield is a lot less important than buyback yield

When the company buys back 4% of it shares, it's returning 4% of it's market capitalization to its shareholders just like a 4% dividend would. It just returns all 4% to 4% of the shares rather than spreading the 4% out over 100% of the shares. When an investor living off their investments wants cas...
by market timer
Tue Jun 02, 2015 10:17 pm
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 9293

Re: Dividend yield is a lot less important than buyback yield

There is one other important factor that hasn't been mentioned yet: duration. Duration is a term more commonly associated with fixed income, but we can apply it to equities as well. Consider a simple example where a company has constant earnings. This company can pay those earnings in dividends, buy...
by market timer
Tue Jun 02, 2015 2:30 am
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 9293

Re: Dividend yield is a lot less important than buyback yield

Results of a Google Scholar search with some relevant articles on the topic of dividend signaling: Jagannathan et al. JFE (2000) This paper measures the growth in open market stock repurchases and the manner in which stock repurchases and dividends are used by U.S. corporations. Stock repurchases an...
by market timer
Tue Jun 02, 2015 1:51 am
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 9293

Re: Dividend yield is a lot less important than buyback yield

* what if you reinvest dividends? * why not sell the buyback? * if the answer is, "because mutual fund", why isn't this an easy route for outperformance for a cheap active MF? Treat every buyback as a sell signal. * if you think cash is a better investment than the stock, why is the other...
by market timer
Tue Jun 02, 2015 12:55 am
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 9293

Re: Dividend yield is a lot less important than buyback yield

It seems that buybacks are a lower quality form of returns than dividends. Dividend levels are more stable than buybacks. Buybacks tend to be correlated with share prices, so you are receiving these distributions when valuations are less favorable. Therefore, all else equal, I would rather receive a...
by market timer
Fri May 29, 2015 11:47 am
Forum: Investing - Help with Personal Investments
Topic: All cash now ($1M) - need advice on entering this lofty market
Replies: 96
Views: 9829

Re: All cash now ($1M) - need advice on entering this lofty market

grayfox, I appreciate your post, but with all due respect, I would suggest that the main issue of why I am where I am IS relevant. As many others seem to agree, the psychology behind investing is very complicated and it has screwed me royally. The discussion of lump sum vs DCA is not a red herring,...
by market timer
Fri May 29, 2015 10:14 am
Forum: Investing - Help with Personal Investments
Topic: What am I doing wrong ?
Replies: 39
Views: 4265

Re: What am I doing wrong ?

Why would anyone put their money in something that is expected to return 0% over the next 10 years ? Seems crazy to me but there must be a reason. That is what the market has decided is the risk-free rate. If you want a chance at beating inflation over 10 years, you need to take some risk. If you c...
by market timer
Fri May 29, 2015 8:26 am
Forum: Investing - Help with Personal Investments
Topic: What am I doing wrong ?
Replies: 39
Views: 4265

Re: What am I doing wrong ?

Is it really necessary to use "no growth of investments over and above inflation". Is the future that dismal or does this forum suffer from ultra conservatism? Serious question please . Interest rates are extraordinarily low right now, and that means expected returns across all asset clas...
by market timer
Thu May 28, 2015 10:48 pm
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 812
Views: 135807

Re: What Book Are You Currently Reading? Part VI

Enjoying Morgenthal & Co. by Barrie Wigmore. It's about a fictional investment bank between the years 1972 and 2010, written by a retired Goldman Sachs partner.
by market timer
Thu May 28, 2015 10:28 pm
Forum: Investing - Help with Personal Investments
Topic: What am I doing wrong ?
Replies: 39
Views: 4265

Re: What am I doing wrong ?

This is an interesting case, because you will likely need to spend the majority of your nest egg prior to full retirement age, given your spend rate. This means you can't afford to take much risk with your portfolio. You also seem to be carrying a mortgage of close to $400K on a $500K house. Before ...

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