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Re: BND or a CD

MPT, Are you in the accumulation stage or in retirement? What's the role of fixed income in your investment portfolio? If you're in the middle of accumulation mode and all you're after from fixed income is a smoothing out of the equity volatility portion of your portfolio, you can use either or bot...
by mpt follower
Fri Oct 31, 2014 5:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 46
Views: 2437

Re: BND or a CD

In the investment world, reward generally follows risk. Longer term, bonds are expected to have higher returns than CDs. To OP: what is your time horizon for this investment? The time horizon is not the issue. The issue is related to: BND has a duration of between 5 and 6 years with a SEC yield of ...
by mpt follower
Fri Oct 31, 2014 3:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 46
Views: 2437

Re: BND or a CD

Help me understand: Assume I purchase shares of BND today when the SEC yield is 2% and the duration is 5.5 years. If I wait that duration and reinvest all dividends (excluding any taxes), should I not expect to get about 2% annually at the end? Not necessarily. If you buy it today (or probably tomo...
by mpt follower
Fri Oct 31, 2014 10:12 am
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 46
Views: 2437

Re: BND or a CD

Last year, folks touted CDs over a bond fund, too. Guess what happened? The bond fund returned more than enough to trounce CDs so that even if CDs are better in the future, the bond fund will still come out ahead. I suppose if one needed 100% of their bond fund money on exactly a certain date, that...
by mpt follower
Thu Oct 30, 2014 11:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 46
Views: 2437

Re: BND or a CD

They serve different purposes. A CD is more or less locked in for that period of time. BND is not. BND also provides useful diversification from your stock investments. Bonds tend to zig when stocks zag, making it very useful as a tool to reduce overall volatility in your investment portfolio. A CD...
by mpt follower
Thu Oct 30, 2014 3:40 am
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 46
Views: 2437

BND or a CD

On 10.29.2014, the Vanguard Total Bond Index Etf (BND) SEC yield was 2% with an average duration of 2%. At the same time a 5 year CD is yielding a bit over. Further the CD is a done deal, while BND can and will fluctuate in price. Why then bogleheads prefer BND? Or do they?
by mpt follower
Thu Oct 30, 2014 2:58 am
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 46
Views: 2437

Re: End of QE2 or Where did it go?

Not enough consumption, the money is being saved. If you are Keynesian, which by the way I am not, this calls for higher fiscal spending, i.e., big public work, etc.
by mpt follower
Thu Oct 30, 2014 12:21 am
 
Forum: Investing - Theory, News & General
Topic: End of QE2 or Where did it go?
Replies: 13
Views: 1423

Re: Help with global ETfs from New Zealand

Although American living overseas, I have many friends that are non US citizens that have the same problem. The way to avoid the absolutely silly (understatement) law, most of them create a company (which by definition never dies) and then invest in US instruments through the company. Talk to a lawy...
by mpt follower
Mon Oct 27, 2014 6:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with global ETfs from New Zealand
Replies: 8
Views: 533

Auto rental Insurance in a foreign country

In August my wife and I had a lovely 15 day vacation in Portugal. At the airport the Avis agent asked us if we wanted coverage for the rental car. It was 30 euros a day for a policy that covered the car (with a 150 euro deductible), almost as much as the rental itself, and we paid because I was afra...
by mpt follower
Sat Oct 25, 2014 2:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Auto rental Insurance in a foreign country
Replies: 2
Views: 289

Re: Long term return forecast [Research Affil. Expected retu

Remember if inflation higher than nominal corporate earnings will also be higher (and vice versa). Larry, In 1977, Warren Buffett made an elaborate accounting argument that corporate profits are directly harmed by inflation. http://fortune.com/2011/06/12/buffett-how-inflation-swindles-the-equity-in...
by mpt follower
Sun Oct 19, 2014 2:37 pm
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2453

Re: Long term return forecast [Research Affil. Expected retu

For those that doubt that there is a way to predict long term equity performance, the following article (among many) does a pretty good job. It uses a variation of Shiller's PE10, the P-BM10 (book to market). But both should do a decent job of helping a long term investor decide where to place the $...
by mpt follower
Sun Oct 19, 2014 4:35 am
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2453

Re: Pimco vs. Jack Bogle on active management of bonds

forget PTTRX. PIMIX is the one you want. http://i60.tinypic.com/wbquqx.jpg What is the correlation between PIMIX and the stock market versus the total bond index and the stock market? I am going to guess that for PIMIX it is significantly higher. And if that is the case, you are better off selling ...
by mpt follower
Sat Oct 18, 2014 3:38 pm
 
Forum: Investing - Theory, News & General
Topic: Pimco vs. Jack Bogle on active management of bonds
Replies: 18
Views: 1992

Re: Long term return forecast

So you run blind. If you mean that I have an IPS that I stick to and don't try to time the markets based on projections then "yes". In order to develop the IPS you made some assumptions about the future, otherwise how do you know that you will meet your goal(s). Further things change and ...
by mpt follower
Sat Oct 18, 2014 1:37 pm
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2453

Re: Long term return forecast

I have 2 related questions: Does the prediction of low returns going forward infer anything about inflation expectations? What, if anything, would a low inflation future mean for sustainable withdrawl rates? Very low inflation seems to be associated with a very slow economy, which tends to mean low...
by mpt follower
Sat Oct 18, 2014 8:58 am
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2453

Re: Long term return forecast

lol...no one can predict future returns...PERIOD! I use these reports as TP. So you run blind. You are right that no one can predict the future because unexpected events change the picture too often, but that is true in absolutely every field. Engineers are paid to bracket events between worst and ...
by mpt follower
Sat Oct 18, 2014 1:27 am
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2453

Long term return forecast [Research Affil. Expected returns]

Dear all, For whatever it is worth, Research Affiliates just issued a comprehensive presentation of their view of the future: http://www.researchaffiliates.com/AssetAllocation/Pages/Core-Overview.aspx Even if not accurate, as most other forecasters, they point at very low returns in all asset classe...
by mpt follower
Sat Oct 18, 2014 12:49 am
 
Forum: Investing - Theory, News & General
Topic: Long term return forecast [Research Affil. Expected returns]
Replies: 33
Views: 2453

Re: It's a good day to adhere to your IPS

However, very tempted to rebalance!
by mpt follower
Wed Oct 15, 2014 10:54 am
 
Forum: Investing - Theory, News & General
Topic: It's a good day to adhere to your IPS
Replies: 19
Views: 1771

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

Although I have been retired for 11 years (I am 66) and have lived comfortable out of my savings (covering over 50% of my needs) without building any type of long term bond ladder, I have recently began thinking about it, and after reading all the different options, have come to the conclusion that ...
by mpt follower
Wed Oct 15, 2014 2:25 am
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

Re: Do you rebalance now?

carofe wrote:Check this research paper https://personal.vanguard.com/pdf/icrpr.pdf
Once a year if it changes +/- 5% of your original allocation seems to be the best.
Don't do it to time the market :), only to keep your goals.



Excellent! Thank you
by mpt follower
Tue Oct 14, 2014 12:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Do you rebalance now?
Replies: 17
Views: 1472

Do you rebalance now?

I have never known if I do it right. I look at my portfolio in the first weeks of January and rebalance if I see a big change, is that correct? I know that there are some opportunistic investors that take advantage of significant market drops to do it. Is there any historical/academic work pointing ...
by mpt follower
Mon Oct 13, 2014 8:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you rebalance now?
Replies: 17
Views: 1472

Re: Wine - how to keep it from not spoiling?

Question: Since I drink one glass of red wine daily, a bottle of wine lasts me for a week. How can I keep it from not going bad? You get seven glasses of wine from a bottle? I've never heard of bottles that size. A standard serving is 5 ounces, and five servings equates to 740 milliliters, very clo...
by mpt follower
Fri Oct 10, 2014 2:14 pm
 
Forum: Personal Consumer Issues
Topic: Wine - how to keep it from not spoiling?
Replies: 57
Views: 2884

Re: Wine - how to keep it from not spoiling?

There are a variety of systems on the market - most I have found to be of limited value and maybe gt you 2-3 days out of the bottle if you follow the process precisely. You can go with one of the starter level commercial units (like this one http://www.winekeeper.com/wk-commercial-keeper.html) but ...
by mpt follower
Fri Oct 10, 2014 12:55 pm
 
Forum: Personal Consumer Issues
Topic: Wine - how to keep it from not spoiling?
Replies: 57
Views: 2884

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

so i've had a look at the data. here is the source i used- see page 10 in particular. There are lot of unanswered questions with the past real return data . First, Larry often doesn't give the source for his data when he's writing short articles or Boglehead posts so we don't know the basis for his...
by mpt follower
Fri Oct 10, 2014 12:51 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

Wine - how to keep it from not spoiling?

Question: Since I drink one glass of red wine daily, a bottle of wine lasts me for a week. How can I keep it from not going bad?
by mpt follower
Fri Oct 10, 2014 12:06 pm
 
Forum: Personal Consumer Issues
Topic: Wine - how to keep it from not spoiling?
Replies: 57
Views: 2884

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

One further comment on TIPs. I am always concern whether the true inflation is properly reflected in the CPI. So when I hear someone buying a 30 year TIP with such a miser real interst, I wonder. I picked up the following comment from another blog; When are TIPS attractive? Well let me share a littl...
by mpt follower
Thu Oct 09, 2014 3:50 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

Not too excited... Yep, this is it in a nutshell. While it may (or may not) be wise to have some long-term TIPS as part of your portfolio, it's a bit sad to lock in 1.1% real for 30 years. For those that have enough money, even if the real return is 0%, some may find it attractive to develop a 30 y...
by mpt follower
Thu Oct 09, 2014 9:58 am
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

Re: Sell or hold "Sequoia" and "Oakmark Equity and Income"

Bogleheads is not a cult! If you like the funds keep them. Many people here hold active funds, specially Vanguard's, such as Wellesley and Wellington, and they feel very comfortable with their decisions
by mpt follower
Thu Oct 09, 2014 1:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Sell or hold "Sequoia" and "Oakmark Equity and Income"
Replies: 6
Views: 719

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

One further comment: Given the current inflation situation, the fact that the Fed has done a pretty good job controlling it, it seems to me that at least for the conceivable time, investing in nominal bonds via an intermediate term bond fund maybe more profitable. I recall that Swedroe recently boug...
by mpt follower
Tue Oct 07, 2014 4:03 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

Swedroe in his "The Only Guide to a Winning Bond Strategy", Appendix B (page 229), recommends 0% TIPS if real yield on 10 year TIPs is under 1.75%. Is that no longer valid? If we knew if the real yield on the 10-year would ever be higher than 1.75% again I guess it would still be valid. H...
by mpt follower
Tue Oct 07, 2014 12:01 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

Swedroe in his "The Only Guide to a Winning Bond Strategy", Appendix B (page 229), recommends 0% TIPS if real yield on 10 year TIPs is under 1.75%. Is that no longer valid?
by mpt follower
Tue Oct 07, 2014 11:37 am
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6505

2014 Harvard U. Annual Endowment Report

Find here the 2014 Harvard U. Annual Endowment Report. https://gallery.mailchimp.com/6750faf5c6091bc898da154ff/files/Final_Annual_Report_2014.pdf?utm_source=PAID+The+Idea+Farm&utm_campaign=dd8e60627c-First_Email8_14_2012&utm_medium=email&utm_term=0_ac58d173d8-dd8e60627c-411772605 Of inte...
by mpt follower
Fri Oct 03, 2014 5:40 am
 
Forum: Investing - Theory, News & General
Topic: 2014 Harvard U. Annual Endowment Report
Replies: 14
Views: 2176

Re: In retirement: Need 1.5% over inflation - How?

technovelist wrote:Have you considered the RMDs that I assume you will have to start taking in a few years? That could have an effect on your tax bracket...


You right. I have built that issue in my calculations
by mpt follower
Thu Oct 02, 2014 12:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: In retirement: Need 1.5% over inflation - How?
Replies: 4
Views: 799

In retirement: Need 1.5% over inflation - How?

Playing with Excel and assuming worse case expenditure scenarios, it seems that accounting for SS/pensions, if I can assure getting minimum 1.5% real on my money (I assume 2.5% inflation), we (wife and I) should make it through retirement to age 95++ comfortably. Today my portfolio is as follows: IR...
by mpt follower
Thu Oct 02, 2014 8:29 am
 
Forum: Investing - Help with Personal Investments
Topic: In retirement: Need 1.5% over inflation - How?
Replies: 4
Views: 799

Re: PenFed Visa Foreign Transaction Fee

Took a Danube River cruise in June. Used the PenFed Visa a few times. No foreign transaction fees. As explained before, the fee is hidden in the exchange rate you get. I know, I travel extensively, but use their AX card. Now, if you try to get cash in a foreign ATM, there is fee. I do not remember ...
by mpt follower
Mon Sep 29, 2014 3:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: PenFed Visa Foreign Transaction Fee
Replies: 7
Views: 773

Re: Norwegian Airlines

I am one of those people who tends to avoid flying too much for the usual reasons, particularly the inconveniences, although I do. Without being an alarmist, I am taking an absolute hiatus from flights over the ocean right now as the situation in the world unfolds. I know that there is always somet...
by mpt follower
Mon Sep 29, 2014 10:35 am
 
Forum: Personal Consumer Issues
Topic: Re: Norwegian Airlines
Replies: 24
Views: 2041

Re: R u selling PIMCO bond fund

Pimco is not a one man operation.
by mpt follower
Sun Sep 28, 2014 4:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: R u selling PIMCO bond fund
Replies: 25
Views: 2780

Re: What's Your Takeaway from 2014 High Valuation

Yale chief investment officer, David F. Swensen stated in a recent interview: “Someone once said that diversification protects us from our own ignorance”
by mpt follower
Thu Sep 25, 2014 1:18 am
 
Forum: Investing - Theory, News & General
Topic: What's Your Takeaway from 2014 High Valuation
Replies: 52
Views: 4257

Re: Total bond index or 5 yr CD?

How can the fund do either better or worse. It is not actively run, it is passive, rule based, thus an investor that purchases the fund today and reinvest all the dividends should get about the present 30 day SEC yield. Where am I wrong? The outcome from the CD is $11,204.13. It does not depend on ...
by mpt follower
Sun Sep 21, 2014 9:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Re: Total bond index or 5 yr CD?

$10,000 in the 5-year CD at 2.3% will give back $11,204.13. Why would you not get the CD? Because there is a chance that the bond fund will have a better outcome, i.e. more money, after 5 years than the CD. But it could also have a worse outcome. That's the risk. How can the fund do either better o...
by mpt follower
Sun Sep 21, 2014 8:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Re: Total bond index or 5 yr CD?

The Vanguard Total Bond Index fund has a duration of a bit over 5 years and a 30 day SEC yield slightly below 2%. At the same time, a FDIC insured 5year CD can be purchased with an annual interest of 2.3%. Please educate me, why would you not get the CD? These are two different kinds of investments...
by mpt follower
Sun Sep 21, 2014 7:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Re: Total bond index or 5 yr CD?

Thank you all for the responses. Let me just add that in my 25 years investing for retirement I do not recall having been confronted with this issue. I do consider a complete anomaly that an insured investment instrument, a CD, can compete with the total bond index fund, by nature riskier, even if t...
by mpt follower
Sun Sep 21, 2014 1:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Re: Total bond index or 5 yr CD?

I would agree would you if you buy CDs directly from the bank, where there is penalties for pulling out before. maturity. But I can get the yield stated above buying a brokared CD from Fidelity, and in this case, if interest rates go up and you want out, I think that you will get similar losses whet...
by mpt follower
Sat Sep 20, 2014 2:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Re: Total bond index or 5 yr CD?

I wouldn't get the CD because I like total bond market index. I believe that it is not only about yield, but also about the change in NAV or if you like: total return. I sell total bond index shares when the NAV goes up in a rebalancing move. If I only want to earn 2.3%, then I buy a short-term bon...
by mpt follower
Sat Sep 20, 2014 2:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Total bond index or 5 yr CD?

The Vanguard Total Bond Index fund has a duration of a bit over 5 years and a 30 day SEC yield slightly below 2%. At the same time, a FDIC insured 5year CD can be purchased with an annual interest of 2.3%.
Please educate me, why would you not get the CD?
by mpt follower
Sat Sep 20, 2014 1:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total bond index or 5 yr CD?
Replies: 36
Views: 2876

Re: Trip to Greece

I read about your week in Greece. How con one do Greece I such a short time? I always suggest at least 14 days. For the past years I have discovered Europe and vacation exclusively there, trying to do two trips a year. It is an amazingly beautiful continent, and so diverse, so rich in culture. I hav...
by mpt follower
Tue Sep 16, 2014 12:30 am
 
Forum: Personal Consumer Issues
Topic: Trip to Greece
Replies: 10
Views: 729

Re: buying a house in france

A few years ago, when I bought an apartment in Israel, i had Fidelity transfer dollars to a bank in Israel, where I had already negotiated the terms. Fidelity did not charge anything, and with respect to the local bank, I shopped around until I got the best dollar/shekel exchange terms. I am sure yo...
by mpt follower
Sat Sep 06, 2014 10:02 am
 
Forum: Personal Finance (Not Investing)
Topic: buying a house in france
Replies: 15
Views: 1623

Re: Inflation Protected Annuity versus TIPs ladder

Robert T wrote:.
Bill Bernstein's Ages of the Investor book has a comparison, and a very informative section on this.

Robert
.


Thank you Robert, You right, Bernstein's material is very useful.
by mpt follower
Fri Sep 05, 2014 1:06 am
 
Forum: Investing - Theory, News & General
Topic: Inflation Protected Annuity versus TIPs ladder
Replies: 9
Views: 940

Inflation Protected Annuity versus TIPs ladder

Has anyone done any research comparing the two options to fund retirement: Inflation Protected Annuity versus a TIPs ladder?
by mpt follower
Fri Sep 05, 2014 12:42 am
 
Forum: Investing - Theory, News & General
Topic: Inflation Protected Annuity versus TIPs ladder
Replies: 9
Views: 940

Total world stock or diversification

Question: Has anyone compared the historical after tax performance of owing the total world stock index versus total US stock index plus total International stock index? What seems to be the best approach? My intuition tells me that in a regular taxable account and because of the tax consequences, i...
by mpt follower
Tue Aug 26, 2014 3:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Total world stock or diversification
Replies: 3
Views: 444

Re: I need "Ultra High Net Worth" investing advice please

People with your kind of money do not need to and seldom follow the typical passive portfolios that one would expect from someone building a retirement portfolio. For whatever it is worth, I am not in your league but have enough to follow to not have to worry much about funding retirement. Since I h...
by mpt follower
Sat Aug 23, 2014 5:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: I need "Ultra High Net Worth" investing advice please
Replies: 225
Views: 19459
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