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Re: 401(k) In-Plan Roth Conversion of After-Tax Money

Actually, it could be very easy if your after tax contributions are going into a separate sub account within the plan, and many posters here have been doing these mostly tax free conversions regularly. Here is the detailed explanation of what you are contemplating: http://fairmark.com/retirement/ro...
by marketeer
Sun Jan 19, 2014 1:04 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) In-Plan Roth Conversion of After-Tax Money
Replies: 65
Views: 4050

Re: 401(k) In-Plan Roth Conversion of After-Tax Money

This is very timely for me. Our employer is considering giving us the option to contribute after tax money to our 401k. I was hoping there is some way to convert those funds to a Roth, but I haven’t had a chance to research it yet. But this sounds promising. I'd be hesitant to recommend anyone go t...
by marketeer
Fri Jan 17, 2014 6:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) In-Plan Roth Conversion of After-Tax Money
Replies: 65
Views: 4050

Re: 401(k) In-Plan Roth Conversion of After-Tax Money

One question for you though: why do an in-plan conversion? Most of the time, people like the investment options in their IRAs more than their employer-sponsored retirement plans. If that is the case for you as well, and assuming they allow you to do a rollover of after-tax money from the plan (most...
by marketeer
Fri Jan 17, 2014 5:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) In-Plan Roth Conversion of After-Tax Money
Replies: 65
Views: 4050

401(k) In-Plan Roth Conversion of After-Tax Money

I joined a new employer recently. This employer offers many "bells and whistles" in its 401k that I didn't have before, including after-tax contributions, Roth balances, in-service withdrawals, and one "in-plan Roth conversion" per year. As I am under 59 1/2 and currently employe...
by marketeer
Fri Jan 17, 2014 4:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) In-Plan Roth Conversion of After-Tax Money
Replies: 65
Views: 4050

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

So any comments? What I'm interested in is why anyone would bother trading LEAPs, at least since the time the book was written, to follow the Lifecycle Investing strategy, given that: - its implied cost is around 4%, when you consider loss of dividends - you can get margin at 1.something % Is the an...
by marketeer
Sat May 25, 2013 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

So the book recommends buying 2-year LEAP calls with a strike price of roughly half the current SPY price. This is Ayres and Nalebuff's preferred strategy, with margin a close second. I'm confused why LEAPS are recommended at all, though. 1. SPY is currently priced around 165. A 2-year LEAPS call wi...
by marketeer
Thu May 16, 2013 11:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

Thanks for all the replies. What I've done recently is sell off my VTI holding and move to portfolio margin. The portfolio margin threshold I got with SPY was 8%, which is a lot better than the 25% I got with Reg T. At 8% I could theoretically leverage up to 12.5:1 (I don't want to): this gives me p...
by marketeer
Thu May 16, 2013 1:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

One option might be to leverage Vanguard mutual funds rather than the ETFs. Since the pricing is done at the end of the day, flash crashes won't be an issue. I thought of this too. Unfortunately, you can't leverage mutual funds. Will look into what you're saying with ETNs, although if you mean that...
by marketeer
Sun May 12, 2013 10:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

I do remember that day vividly (I am an short term derivatives trader). But again with new rules of "New Limit Up-Limit Down Mechanism" which was not there before flash crash, Liquid ETF should not move that much from intrinsic value. I am not a big fan of these other ETF's other than SPY...
by marketeer
Sun May 12, 2013 10:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

You are right about 50% draw-down and its effect on PM. But since you are worried about flash crash, fully margined PM can survive flash crash, since the circuit breaker kicks in at 10%. 20% and 30% drop of the market. Tell me what you mean by circuit breaker. Do you mean the NYSE circuit breaker t...
by marketeer
Sun May 12, 2013 12:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

So it's hard to design a portfolio with leverage that would not have had some serious issues from 2007-2012. http://www.frbatlanta.org/cenfis/pubscf/stock_prices_infinancial_crisis.cfm After all, an unleveraged portfolio had serious issues. For most people, a 50% drop isn't all right. At least it wo...
by marketeer
Sat May 11, 2013 10:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

One option might be to leverage Vanguard mutual funds rather than the ETFs. Since the pricing is done at the end of the day, flash crashes won't be an issue. I thought of this too. Unfortunately, you can't leverage mutual funds. Will look into what you're saying with ETNs, although if you mean that...
by marketeer
Sat May 11, 2013 9:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

I am just commenting to point out how similar the two user names are. Ha. :) Not the same person, not a deliberate similarity. Was the first username that came to mind when signing up for a new account. I'm looking for some insights on the strategy that I didn't get out of the first thread, and I'm...
by marketeer
Sat May 11, 2013 6:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Re: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

I read most of that thread (noticed he was called out in the book) and another one on this board. My post was actually originally a reply to one of these threads. I'm definitely not being that aggressive... certainly not taking out credit card debt or anything other than the Reg T margin I have. I a...
by marketeer
Sat May 11, 2013 4:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)

[Originally posted in Ayres and Nalebuff: Young people should buy stocks on margin , moved into separate thread. --admin LadyGeek] I've been using this strategy (roughly) for the last year and a half to two years. It has been a propitious time for it. Started quite small, but now I have a pretty la...
by marketeer
Thu May 09, 2013 11:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Using Ayres/Nalebuff leveraged strategy (Lifecycle Inv.)
Replies: 32
Views: 2895

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