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Re: Adding Corporates to Total Bond Market Index

The counter argument to this, and it is a pretty sound one, is that rather than tilting more towards corporates instead slightly increase your stock allocation if you need more "yield" - i.e. return. Recall especially how corporates, even highly rated ones, behave in a crisis. They tank. ...
by mptfan
Fri Jul 18, 2014 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: Adding Corporates to Total Bond Market Index
Replies: 74
Views: 5914

Re: stocks about to plunge

There was some weakness in 2013 but by September my indicators were suggesting it was still too early to call, which looks to have been correct. My current data suggests we're still in a period of market order that started July 2011. Latest crash indicator reading is only 14.29/100 (over 30 is usua...
by mptfan
Tue Jul 08, 2014 3:25 pm
 
Forum: Investing - Theory, News & General
Topic: stocks about to plunge
Replies: 39
Views: 7656

Re: Windows 7 free support will be ending in 2015

DH finally got a Mac after many years/iterations of ThinkPads, and after a few weeks of "getting to know you...", he just announced he really likes it. I used to have software that couldn't run on a Mac, but I no longer use it (and it can probably run on a Mac now anyway). So maybe... I a...
by mptfan
Tue Jul 08, 2014 3:00 pm
 
Forum: Personal Consumer Issues
Topic: Windows 7 free support will be ending in 2015
Replies: 27
Views: 2179

Re: The Risk of Short-term Bond Funds

This thread (and almost all the bond-panic threads) repeatedly miss the central point. All the worry is over interest rate risk (or duration risk). If you start investing at age 30 and die at 90, your holding period is 60 years, or something like 20x the duration of an intermediate bond fund. In su...
by mptfan
Mon Jul 07, 2014 10:51 am
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10133

Re: Does corporate credit risk add value

nisiprius wrote:They are really one and the same thing; they are correlated.

These are different statements....they can be different and correlated.
by mptfan
Fri Jul 04, 2014 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: Does corporate credit risk add value
Replies: 71
Views: 4080

Re: Does corporate credit risk add value

Vanguard's Total Market Bond Index Fund contains 6579 distinct bonds spawning across a wide range of maturities and low levels of credit risk. I guess that an investor that decides to only invest in a small subset of these bonds (short and intermediate treasuries) must really feel lucky! Or and inv...
by mptfan
Fri Jul 04, 2014 2:30 pm
 
Forum: Investing - Theory, News & General
Topic: Does corporate credit risk add value
Replies: 71
Views: 4080

Re: Bernstein: Don’t Bother With International Bonds

I'm also troubled by Dr. Bernstein's use of the often repeated slogan to 'take your risk on the equity side.' Many experts say this, but despite trying, I haven't yet found any academic research that supports it. IMO, stocks and bonds are both potentially risky assets that blend well in a portfolio...
by mptfan
Mon Jun 30, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: Don’t Bother With International Bonds
Replies: 112
Views: 8992

Re: Buy A New Windows Computer Now?

One word... Chromebook.
by mptfan
Tue Jun 24, 2014 4:27 pm
 
Forum: Personal Consumer Issues
Topic: Buy A New Windows Computer Now?
Replies: 53
Views: 2841

Re: Late starters: what age did you start investing?

I would not call 30 late.
by mptfan
Thu Jun 19, 2014 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Late starters: what age did you start investing?
Replies: 73
Views: 5516

Re: Do REITs (and slicing in general) reduce risk?

steve, thank you for proving my point for me. I hear what you are saying, but I will never understand why people argue that TSM is the default or optimal allocation for stocks, while at the same time, they reject the market allocation to bonds. Sorry, that is inconsistent to me no matter how many t...
by mptfan
Sat Jun 14, 2014 2:24 pm
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3612

Re: Do REITs (and slicing in general) reduce risk?

steve, thank you for proving my point for me. I hear what you are saying, but I will never understand why people argue that TSM is the default or optimal allocation for stocks, while at the same time, they reject the market allocation to bonds. Sorry, that is inconsistent to me no matter how many ti...
by mptfan
Sat Jun 14, 2014 12:41 pm
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3612

Re: Do REITs (and slicing in general) reduce risk?

The first argument, which is to hold them according to their true cap weight, doesn't seem to sit right with me. What if bonds were 20% of the US economy. Would that make it optimal to always hold 20% bonds? Of course not. We don't hold things to their arbitrary representation of the US economy, we...
by mptfan
Sat Jun 14, 2014 11:59 am
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3612

Re: Cutting the cable cord - how did you do it?

He could tell by listening to what I was saying that I was not moving, but rather, I was cancelling cable because I no longer wanted it. How loud is your voice? :) Usually the windows are a several feet apart. Where I used to go, the line was kept back so that customers had some privacy. I guess ma...
by mptfan
Sat Jun 14, 2014 11:31 am
 
Forum: Personal Consumer Issues
Topic: Cutting the cable cord - how did you do it?
Replies: 63
Views: 4379

Re: Do REITs (and slicing in general) reduce risk?

What makes investing in land any different from investing in gold? Because the demand for land is grounded in a real need that increases with population growth? Yes, and because land produces income in the form of rent payments that gold does not. Land is an income producing asset and gold is not.
by mptfan
Sat Jun 14, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3612

Re: Cutting the cable cord - how did you do it?

I had to take the cable box to the local office of the cable provider and wait in line and walked up to the window and told them I wanted to cancel my service completely and I gave them back their box. The guy standing next to me turned and looked at me like I was crazy, The guy next to you had nev...
by mptfan
Sat Jun 14, 2014 11:20 am
 
Forum: Personal Consumer Issues
Topic: Cutting the cable cord - how did you do it?
Replies: 63
Views: 4379

Re: Cutting the cable cord - how did you do it?

I had to take the cable box to the local office of the cable provider and wait in line and walked up to the window and told them I wanted to cancel my service completely and I gave them back their box. The guy standing next to me turned and looked at me like I was crazy, I think some people just can...
by mptfan
Sat Jun 14, 2014 9:49 am
 
Forum: Personal Consumer Issues
Topic: Cutting the cable cord - how did you do it?
Replies: 63
Views: 4379

Re: I cannot make the jump and retire

I don't know the details of your work situation or if it is feasible for you, but I would suggest starting to pull back on the number of hours you work. Start with a target of working 75% of the hours that you work now, and see how that feels. If you still feel burnt out, try 50%. If you still feel ...
by mptfan
Sat Jun 14, 2014 8:34 am
 
Forum: Personal Finance (Not Investing)
Topic: I cannot make the jump and retire
Replies: 73
Views: 8071

Re: The Biology of Risk

2008 was not a black swan, in the sense of an event that could not possibly be foreseen. Numerous writers identified the housing bubble from 2003 onward and expected a recession (at least) to follow its collapse. Others observed that during a recession the stock declines, on the average, 28%. If yo...
by mptfan
Sat Jun 14, 2014 8:26 am
 
Forum: Investing - Theory, News & General
Topic: The Biology of Risk
Replies: 91
Views: 4339

Re: Is the first million really the hardest?

randombogler wrote:naive question - how do you ascertain you have achieved the mark, if its net worth and includes your house, stocks, bonds - that value varies everyday. Is it the fact that the current value >= 1 M.

I assumed the question related to retirement savings, not net worth.
by mptfan
Fri Jun 13, 2014 5:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is the first million really the hardest?
Replies: 64
Views: 7755

Re: Is the first million really the hardest?

telemark wrote:At some point the gains and losses in your portfolio will start to outweigh your contributions. Where that point occurs depends on how early you start and how much you can afford to save.

It also depends on the portfolio return.
by mptfan
Thu Jun 12, 2014 10:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Is the first million really the hardest?
Replies: 64
Views: 7755

Re: Is the first million really the hardest?

I have not reached it yet, but according to my spreadsheet, the first million of retirement savings (not net worth) will take about 25 years to accumulate (that includes a divorce along the way), and the second will take about 7.
by mptfan
Thu Jun 12, 2014 10:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Is the first million really the hardest?
Replies: 64
Views: 7755

Re: Do REITs (and slicing in general) reduce risk?

So how can slicing the total market into REIT/non-REIT reduce risk? If that were true, why not slice your portfolio into even more market segments and sectors? Because although REITS are stocks, and therefore part of the total stock market by definition, many people consider them to be a distinct a...
by mptfan
Wed Jun 11, 2014 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3612

Re: "Be Fearful: There May Be a 5% Drop in the S&P 500"

5%!!! Good Lord, run for dem hills - especially since the S&P is up 5.5% this year alone, why goodness that means for the mathematically challenged I'd still be up only 50 bps, more than a US Treasury bill pays! :oops: I'm still waiting for that 20% off sale. As placeholder noted, you would be ...
by mptfan
Wed Jun 11, 2014 2:52 pm
 
Forum: Investing - Theory, News & General
Topic: "Be Fearful: There May Be a 5% Drop in the S&P 500"
Replies: 10
Views: 1666

Re: Do REITs (and slicing in general) reduce risk?

My data tells me that REITs have a .51 correlation with the total stock market index fund over the last 30 years, and over that time, REITs have had a CAGR of 10.58% while TSM was 11.2%, while exhibiting almost identical standard deviation (18.02 vs 17.91). So my conclusion is that REITs provide rea...
by mptfan
Wed Jun 11, 2014 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: Do REITs (and slicing in general) reduce risk?
Replies: 65
Views: 3612

Re: "Be Fearful: There May Be a 5% Drop in the S&P 500"

A 5% drop in the S&P 500 would be about where it was on April 15, less than two months ago. Oh, the horror!
by mptfan
Wed Jun 11, 2014 10:03 am
 
Forum: Investing - Theory, News & General
Topic: "Be Fearful: There May Be a 5% Drop in the S&P 500"
Replies: 10
Views: 1666

Re: Addicted to saving?

by mptfan
Mon Jun 09, 2014 2:33 pm
 
Forum: Personal Consumer Issues
Topic: Addicted to saving?
Replies: 24
Views: 2534

Re: Age in Bonds (The Bogle Rule)

manwithnoname wrote: Why invest in bonds that are going to yield 3% at best for the next 5 or so years?

You can invest in bonds that are yielding 5.44% right now. Take a look at Vanguard's high yield corporate bond fund.
by mptfan
Sat Jun 07, 2014 1:28 pm
 
Forum: Investing - Theory, News & General
Topic: Age in Bonds (The Bogle Rule)
Replies: 135
Views: 10939

Re: VGD Intermediate corp bond vs total bond

It appears that the default rate for investment grade corporate bonds is fairly negligible (0.4% in 2008). Here's 2011 SP study https://www.standardandpoors.com/ratings/articles/en/us/?articleType=HTML&assetID=1245330814766 The true amount of losses is even less than the default rate because &q...
by mptfan
Mon Jun 02, 2014 3:14 pm
 
Forum: Investing - Theory, News & General
Topic: VGD Intermediate corp bond vs total bond
Replies: 7
Views: 575

Re: Keeping up with the neighbors and Balance

One very helpful way to deal with this is to compare yourself to people less fortunate than yourself, rather than looking at people who spend more or have more stuff. I have gone on several volunteer trips to places in Mexico, Peru and Guatemala and spent time with the truly impoverished. It really...
by mptfan
Mon Jun 02, 2014 3:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Keeping up with the neighbors and Balance
Replies: 95
Views: 9678

Re: Keeping up with the neighbors and Balance

This is a thread on a similar topic entitled "Do you regret saving too much?"...

viewtopic.php?f=10&t=98393
by mptfan
Mon Jun 02, 2014 10:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Keeping up with the neighbors and Balance
Replies: 95
Views: 9678

Re: Total Bond Index Fund amd Retirement

principle ..... principal.
by mptfan
Sun Jun 01, 2014 11:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Index Fund and Retirement
Replies: 16
Views: 1992

Re: Total Bond Index Fund amd Retirement

I think it would be reasonable to allocate up to 50% of your portfolio to the total bond fund, but putting substantially all or all of your investments in that fund would be a mistake in my opinion. Consider this... in the last 20 years (I only have data going back to 1993), the total bond fund had ...
by mptfan
Sun Jun 01, 2014 11:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Index Fund and Retirement
Replies: 16
Views: 1992

Timing of bond fund dividend payments

Some bond funds pay dividends monthly, on the last business day of the month. For example, Vanguard's Total Bond Market fund and the Vanguard High Yield Corporate Bond fund pay dividends monthly, on the last business day of each month. My question is, do they pay dividends based on the number of sha...
by mptfan
Sun Jun 01, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: Timing of bond fund dividend payments
Replies: 8
Views: 829

Re: international diversification

Vanguard seems to focus (in the above paper) on the volatility aspect of the portfolio only, but if I am more interested in the long term returns (rather than how bumpy the short term road may be), should I have more weight given to the international equities. If you are only interested in the long...
by mptfan
Thu May 29, 2014 4:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: international diversification
Replies: 4
Views: 361

Re: Is it okay to think of my stocks as bonds?

Stocks are stocks, and bonds are bonds, and never the twain shall meet. I agree with you, but apparently some Bogleheads do not. In the thread linked below, some Bogleheads argued that High Yield Corporate Bonds should be considered "part equity and part fixed income." http://www.boglehea...
by mptfan
Thu May 29, 2014 10:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Is it okay to think of my stocks as bonds?
Replies: 22
Views: 1977

Re: BoA - Paying extra on mortgage principal

What is the basis of your conclusion that you can eliminate PMI after 10 months? Are you assuming that if you pay down the mortgage more quickly than the regular schedule, and you get the balance below a certain threshold that the lender will automatically eliminate PMI? If this is your assumption, ...
by mptfan
Thu May 29, 2014 8:20 am
 
Forum: Personal Finance (Not Investing)
Topic: BoA - Paying extra on mortgage principal
Replies: 26
Views: 2520

Re: Pre-nup at only $1M networth, do I need it?

stoptothink wrote:Maybe I am wrong, but I don't think anybody was suggesting that there was some gender issue at play here; other than the fact that most of the members of this forum are male ...

How do you know this?
by mptfan
Thu May 29, 2014 8:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Pre-nup at only $1M networth, do I need it?
Replies: 199
Views: 12456

Re: Roth or Traditional 401k Contribution

I think 100% traditional is the way to go. Read Chapter 10 of the Boglehead's Guide to Retirement Planning.
by mptfan
Wed May 28, 2014 3:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth or Traditional 401k Contribution
Replies: 7
Views: 303

Re: AMEX Card - waiving annual fee?

I have an American Express Delta Skymiles card that I've been using for the last year. Overall, I feel satisfied with the features and benefits of the card. This is, however, the only credit card in my wallet with an annual fee. While I feel the features and benefits are worth the $95 annual feel, ...
by mptfan
Wed May 28, 2014 3:26 pm
 
Forum: Personal Consumer Issues
Topic: AMEX Card - waiving annual fee?
Replies: 15
Views: 2180

Re: Paying of debt after Father in Laws death

If nonprobate assets were always exempt from creditors, many people would create revocable trusts or transfer on death accounts. Many people do create revocable trusts or transfer on death accounts. (I'm not arguing that nonprobate assets are always exempt, just pointing out that your assumption is...
by mptfan
Wed May 28, 2014 3:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying of debt after Father in Laws death
Replies: 27
Views: 3078

Re: 1 Year Bogleheadiversary - Before and After Picture

My only critical comment is that you may be prone to too much slice-and-dice. Ongoing positions of less then 5% may not do much to change your overall return and incur certain overhead of monitoring and rebalancing. I've done that at times to and within a year or two I normally eliminate such stray...
by mptfan
Wed May 28, 2014 3:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: 1 Year Bogleheadiversary - Before and After Picture
Replies: 62
Views: 7082

Re: What's the downside to eliminating REIT?

If you own TSM, you cannot eliminate REITs.
by mptfan
Tue May 27, 2014 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: What's the downside to eliminating REIT?
Replies: 10
Views: 1143

Re: The in-laws are broke!

do whatever your wife decides. That has been the secret to my successful marriage. We made an agreement before we got married that I would make all major decisions and she would make all minor decisions. In 38 years of marital bliss we have not faced any major decisions . I hope this is said tongue...
by mptfan
Tue May 27, 2014 4:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: The in-laws are broke!
Replies: 128
Views: 16175

Re: How to decide your number?

I agree that Bogleheads are a rare bunch indeed. I also have no documentation to back it up, but my sense is that there are a great many people who retire and live off of social security and maybe a modest amount of savings. Some of these people are smart enough to pay off their mortgage and have no...
by mptfan
Tue May 27, 2014 10:24 am
 
Forum: Personal Finance (Not Investing)
Topic: How to decide your number?
Replies: 61
Views: 7071

Re: why do investors keep buying actively managed funds?

Why do some people keep gambling? Why do some people keep smoking? Why do some people keep eating unhealthy foods? Why do some people not exercise as much as they should? The answer is because we are all human beings, not computers, and we sometimes make decisions that are not the most economically ...
by mptfan
Sat May 24, 2014 4:30 pm
 
Forum: Investing - Theory, News & General
Topic: why do investors keep buying actively managed funds?
Replies: 104
Views: 7093

Re: When is a taxable account unnecessary?

Crushtheturtle wrote:Uh...yes.

If you want to save and grow money and have access to it before age 59.5 then obviously you need a taxable brokerage account.

Ok, so to be more precise, the answer is no if you are referring to retirement savings, and if you plan to retire after the age of 59.
by mptfan
Wed May 21, 2014 2:51 pm
 
Forum: Investing - Theory, News & General
Topic: When is a taxable account unnecessary?
Replies: 30
Views: 2040

Re: When is a taxable account unnecessary?

asif408 wrote:If a person cannot fill all their tax advantaged space, is there any reason to have or invest in a taxable account?

No. You are not overlooking anything.
by mptfan
Wed May 21, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: When is a taxable account unnecessary?
Replies: 30
Views: 2040

Re: Starting to invest beyond Roth IRA?

Thanks guys, I think it's patently obvious my knowledge of taxes is woefully inadequate. i.e. I thought that AGI was taxable income. I'm only a rookie with this stuff, and you have given me even more incentive to try to figure it all out. In the tax code, specific words and specific phrases have sp...
by mptfan
Mon May 19, 2014 4:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Starting to invest beyond Roth IRA?
Replies: 10
Views: 689
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