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Re: Where do I put my cash now?

The Wizard is correct. My goal is 10% cash, but in the last year, it has gone up to 15% as all purchase orders for ETFs have expired because they were at prices below the market. Don't do this. You may think you're clever and grabbing a discount, but the problem with this proposal should be obvious...
by ogd
Wed Sep 17, 2014 9:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where do I put my cash now?
Replies: 16
Views: 1497

Re: Holding Cash because Tried to time Market

My Issue: Investing into market when stock and bond market are high. Should that affect my investment considerations? Yes, yes I know that I made a really stupid mistake in 2009. Well, you could wait some more and perhaps face another 20% of missed highs a year or two down the road... OR, you tell ...
by ogd
Wed Sep 17, 2014 7:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Holding Cash because Tried to time Market
Replies: 43
Views: 2735

Re: Advice for non-US citizen wanting to invest like a Bogle

Have you checked out http://www.meesman.nl/onze-fondsen ? Their fees are high by Bogleheads standards, but 0.5-0.6% a year isn't THAT bad. Like I was saying above I would look for a broker in the same jurisdiction, but those fees are more than I'd be willing to pay. If nothing else Dutch try Saxo B...
by ogd
Wed Sep 17, 2014 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice for non-US citizen wanting to invest like a Boglehead
Replies: 10
Views: 478

Re: LASTPASS Password Program

My concern with LastPass was if they get hacked - can ALL my critical passwords now be compromised. I use very complex passwords (which I keep on a locked file on my computer. I use 2FA whenever possible. LastPass would be great if it REALLY is completely or almost completely secure. Rob -- LastPas...
by ogd
Wed Sep 17, 2014 7:31 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 8
Views: 712

Re: Index Funds Add to demand or follows ?

Whatever you think of index funds, one mitigating factor is that their turnover is an order of magnitude or more less than active funds. Since they don't yet compensate for this with size, it follows that index funds are far less involved in trading (and price setting) than their active counterparts...
by ogd
Wed Sep 17, 2014 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Index Funds Add to demand or follows ?
Replies: 4
Views: 543

Re: What evidence would prove the Boglehead mentality wrong?

What would change my mind: sound statistical proof that a manager 's outperformance after fees is predictive of future outperformance after fees. Of course, it's hard to imagine that if this becomes the norm, good managers won't be swamped with new assets and thereafter fight among themselves destro...
by ogd
Wed Sep 17, 2014 2:06 pm
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 60
Views: 3399

Re: Bond Fund Duration ?

The answer is yes. Portfolio duration is a (dollar-weighted) linear combination of the fund durations (which are themselves a linear combination of constituent bond durations). If you want the duration to be 10 in year 1, 9 in year 2, 8 in year 3, etc. all you have to do is rebalance your bond fund...
by ogd
Wed Sep 17, 2014 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 761

Re: The dangerous practice of rebalancing...

1. High grade bonds don't have to outperform stocks for a fixed initial allocation (or very infrequently or incompletely) of stocks and bonds to perform about the same as a continuously rebalanced portfolio. Japan would just one of any number of examples where (frequent) rebalancing wouldn't help. ...
by ogd
Wed Sep 17, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 10805

Re: LifeStrategy Growth vs Three / Four Fund

Separate funds will be cheaper once you exceed $10K in the individual funds. If you are doing this in a taxable account, separate funds will also be more tax-efficient. However, the LifeStrategy funds have the great advantages of simplicity (they rebalance for you) and shielding you from seeing the ...
by ogd
Wed Sep 17, 2014 12:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: LifeStrategy Growth vs Three / Four Fund
Replies: 8
Views: 588

Re: Advice for non-US citizen wanting to invest like a Bogle

Start here: http://www.bogleheads.org/wiki/EU_investing I would recommend looking for a Dutch brokerage with low fees to access the Amsterdam market, on which you can find Ireland-domiciled ETFs from Vanguard and others like iShares, in a word everything you need. In Europe you won't find good mutua...
by ogd
Wed Sep 17, 2014 12:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice for non-US citizen wanting to invest like a Boglehead
Replies: 10
Views: 478

Re: LASTPASS Password Program

Jon: LastPass is a password manager, that is it aggregates many account passwords so you don't have to remember them separately and you can use a single password to access those individual passwords . They still exist, it's just that you don't have to remember them. From the point of view of the web...
by ogd
Wed Sep 17, 2014 12:13 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 8
Views: 712

Re: Vanguard's Website - Bad, or just me?

The rebalancing stuff shows up in 401k and in CFP financial plans. In the latter taxes are specifically a topic so it's very likely about that. A decent way to have them run some numbers is through Portfolio Watch simulations. But indeed there's nothing as simple as the 401k rebalancer. Have you tri...
by ogd
Tue Sep 16, 2014 11:26 pm
 
Forum: Personal Consumer Issues
Topic: Vanguard's Website - Bad, or just me?
Replies: 36
Views: 2104

Re: Bond Fund Duration ?

The duration does depend on how much interest is paid. The duration of a zero coupon bond is quite a bit longer than that of a bond which pays interest before maturity. The duration of a bond fund depends only on its holdings, not on whether an investor in the fund reinvests dividends. That's why I...
by ogd
Tue Sep 16, 2014 5:36 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 761

Re: Very lost on random inherited bonds in portfolio

The yield on those bonds is very likely much lower, as they have appreciated to match comparable market bonds. In other words, they are no longer 6% investments, but maybe 3% - too lazy to check. The only thing that would prevent me from selling is if the spreads were high, suggesting that I actuall...
by ogd
Tue Sep 16, 2014 5:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Very lost on random inherited bonds in portfolio
Replies: 8
Views: 610

Re: Bond Fund Duration ?

Is there some way to use bond funds and an investor be able to manage it in such a way as to expect their duration to get to zero at some certain date and expect they'll have earned a fair amount of interest AND return of principal? Or would this only be possible with individual bonds? One could us...
by ogd
Tue Sep 16, 2014 5:21 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 761

Re: Ack! Bought a Dividend!

So best to "market time" your buy and hold index fund just after the quarter end dividend date. I see the point now. It seems quite minor in the grand scheme. VTSAX is tax efficient, but not perfectly tax efficient. If it paid a dividend at H1 and H2 would that be more efficient? It's ind...
by ogd
Tue Sep 16, 2014 4:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ack! Bought a Dividend!
Replies: 26
Views: 2322

Re: More Bond Questions?

Okay, so bottom line, things can correct themselves over time, but it might take time, thus the reason bonds are not a sure-deal, though, your market value should drop less with bonds than stocks, so they do serve their purpose. The only question is whether to play the bond game at all, nowadays, a...
by ogd
Tue Sep 16, 2014 4:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: More Bond Questions?
Replies: 9
Views: 618

Re: BOND FUND DURATION

awferg -- there is no such concept as "fund duration without dividends reinvested". The pricing of bonds is relatively indifferent to how much of the yield is returned as coupons (making up your dividends) and how much is returned as value changes (the movements of your fund's NAV). And in...
by ogd
Tue Sep 16, 2014 4:41 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Fund Duration ?
Replies: 13
Views: 761

Re: Buying CDs

I've been closing out most my CDs over the past year. My final CD at Wells Fargo Bank (3.54% interest opened in September 2009) goes into grace period on Friday. I've moved most of my cash-equivalent funds into SCHO and SCHZ at Schwab. While there is undoubtedly some risk that that bond share price...
by ogd
Tue Sep 16, 2014 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying CDs
Replies: 30
Views: 3258

Re: Ack! Bought a Dividend!

Is this "tongue in cheek"? A dividend is an "expense" because it might have a taxable portion? Darn those pesky dividends. Stop giving me money! I would actually like this question answered. I see this mentioned occasionally and just don't understand what the issue is. Someone i...
by ogd
Tue Sep 16, 2014 4:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ack! Bought a Dividend!
Replies: 26
Views: 2322

Re: The dangerous practice of rebalancing...

1. I agree that high grade bonds tend to reduce the variance of return, but AFAIK even John Bogle doesn't necessarily agree that rebalancing per se does much for you, let alone at all frequently. I personally do rebalance fairly frequently, usually, not counting on it to improve top line statistics...
by ogd
Tue Sep 16, 2014 12:29 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 10805

Re: The dangerous practice of rebalancing...

Other random comments: 'rebalancing bonus' is subject to the usual paradox: 'no one knows the future...but you should do X based on results in this particular period of past history in one particular country (during which that country was world economic quasi-hegemon)'. And it seems some past histo...
by ogd
Mon Sep 15, 2014 5:42 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 10805

Re: RMD Bond Mutual Funds, and Bond duration more to lose sl

Since holding bonds through the full duration is important especially with rising rates. What about bond funds when RMDs in tIRAs are coming up sooner than the average duration. Example Wellesley bond average duration is 6.1 and I will start RMDs from that fund in 5 years. Do I lose out somehow? Tw...
by ogd
Mon Sep 15, 2014 2:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: RMD Bond Mutual Funds, and Bond duration more to lose sleep
Replies: 8
Views: 532

Re: The dangerous practice of rebalancing...

I would have thought you would like the big EF approach! Suppose an investor holds bonds to protect herself from the possibility of extended unemployment. At the bottom of a recession, she is more likely to lose her job, not less. Selling bonds to buy stocks then look like a mildly insane behavior....
by ogd
Mon Sep 15, 2014 2:00 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 10805

Re: Buying CDs

Seattlenative: can you substantiate this? As far as I can tell, retroactive penalty increases are exceedingly rare and seem to come with the escape hatch of not agreeing to the new terms. I'd say this is an important topic right now, with CDs the most attractive fixed income investments. Worth spen...
by ogd
Mon Sep 15, 2014 1:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying CDs
Replies: 30
Views: 3258

Re: The dangerous practice of rebalancing...

^Yes. Longinvest is assuming throughout that risk should be measured using percentages. This is an honest and easy mistake to make. Most fund companies (including Vanguard) and investment books talk about risk in terms of stock percentages almost exclusively. It can be hard to see that there are ot...
by ogd
Sat Sep 13, 2014 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 180
Views: 10805

Re: Buying CDs

Following the 2008 Lehman Brothers meltdown, the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration tightened up capital requirements for the vast majority of banks and credit unions. Even before 2008, banks and...
by ogd
Sat Sep 13, 2014 2:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying CDs
Replies: 30
Views: 3258

Re: EJ Gadflies [Edward Jones]

obgyn65: what toto238 means to say is that Edward Jones has a terrible reputation around here. This has little to do with solicitation practices and everything to do with the results once you're a client. Time and time again we see very expensive and unnecessarily complex portfolios, with (adding in...
by ogd
Sat Sep 13, 2014 2:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: EJ Gadflies [Edward Jones]
Replies: 50
Views: 4435

Re: treating all investment accounts as one pool of money

The problem I see with the above approach is: what happens when it's time to sell to realize the non-retirement goal I was investing for? At this point the taxable account will contain 100% stocks and the tax-deferred accounts will contain some percentage of bonds. Raiding the tax-deferred accounts...
by ogd
Sat Sep 13, 2014 2:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: treating all investment accounts as one pool of money
Replies: 26
Views: 2225

Re: Interest rates - Bond effects?

Here's a simplified explanation: suppose you buy a fresh 10 year bond paying 2% at the par value of $100. The expected return over 10 years is $20 in coupons plus $100 at maturity, for $120 total. Now suppose the market rates rise to 3% for bonds that are otherwise identical, i.e. 10 years and same ...
by ogd
Fri Sep 12, 2014 3:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Interest rates - Bond effects?
Replies: 7
Views: 862

Re: Options vesting period coming to close, need advice

2) Exercise and hold; maybe the stock goes up and I sell at a better time. If I wait a year, I potentially see better gains from short-term --> long-term capital gains, of course there's no guarantee that the stock doesn't plummet Whatever you do, do not exercise and hold. It's pretty much never wo...
by ogd
Fri Sep 12, 2014 1:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Options vesting period coming to close, need advice
Replies: 8
Views: 504

Re: Beginner questions, don't shoot

A few additions to the excellent points above: 1) See Wiki article on the topic: http://www.bogleheads.org/wiki/EU_investing 2) Always use EU-domiciled ETFs to avoid US taxation. Unfortunately, this means you'll have to translate "our" funds to yours in generic US-based discussions. 3) Div...
by ogd
Thu Sep 11, 2014 1:49 pm
 
Forum: Investing - Theory, News & General
Topic: Beginner questions, don't shoot
Replies: 10
Views: 1456

Re: Future direction of U.S. stock market

1) Don't do this. Next thing you know, you're drawing heads and shoulders and silly cup handles atop those graphs. In a word, seeing things.

2) If you want to congratulate yourself, or anyone else, for the stock market returns of the last 40 years, use a graph that includes dividends. :sharebeer
by ogd
Wed Sep 10, 2014 9:23 pm
 
Forum: Investing - Theory, News & General
Topic: Future direction of U.S. stock market
Replies: 23
Views: 2080

Re: Should anyone invest in short-term bonds at this point?

ogd, my struggle has been more with things like negative convexity of muni's, corporate's and the MBS portion of TBM not the question of short vs long . Yes I know the market is very efficient and those risks are theoretically rewarded but that's not my worry. The things I've been struggling with a...
by ogd
Wed Sep 10, 2014 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: Help with Asset Allocation and a large stock position

OpenRoad: yay! Glad to hear that. I wonder if we can ask you for a small contribution in return. Can you find some definitive wording on this in the plan documents, or could recount the answers you got in a focused paragraph or two, either to keep in this thread for reference or better yet put in a ...
by ogd
Wed Sep 10, 2014 5:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Asset Allocation and a large stock position
Replies: 23
Views: 2164

Re: would like to protect principal

lotsofquestions: while I agree with the other posters when it comes to fixed income, be aware that 0% stocks is historically not the minimum risk position. Adding 20%-30% stocks actually lowers risk in adition to increasing returns. The reason is primarily inflation, which stocks are good at fightin...
by ogd
Wed Sep 10, 2014 5:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: would like to protect principal
Replies: 15
Views: 964

Re: Should anyone invest in short-term bonds at this point?

I'm paranoid about this, and probably overstating it... but having, several times in the past, bought CDs whose terms and conditions stated that early withdrawal was "at the bank's discretion" or "with the bank's permission," I have to say: read the terms and conditions on any C...
by ogd
Wed Sep 10, 2014 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: Should anyone invest in short-term bonds at this point?

Definitely prefer CDs for your parents in a 25% bracket. They tend to love them, btw -- a familiar instrument and no price volatility in sight. The problem with munis is that the market already takes the tax discount into account, that is they are priced to yield X% lower than they would if they wer...
by ogd
Wed Sep 10, 2014 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: Buying CDs

There is a huge advantage to direct CDs, which is the opportunity to do early withdrawals with relatively low penalties. This means that a 5 year direct CD, often competitively priced, has interest rate risk comparable to a one year bond or so, whereas a 5 year brokered CD is like a 5 year bond beca...
by ogd
Wed Sep 10, 2014 2:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying CDs
Replies: 30
Views: 3258

Re: Should anyone invest in short-term bonds at this point?

U.S. Treasury prices extended losses Wednesday, lifting the 10-year yield above 2.5% as investors brace for a turning point in Federal Reserve policy. In early New York trading, benchmark 10-year notes fell 11/32 in price to yield 2.540%, according to Tradeweb. That's the highest yield since Aug. 1...
by ogd
Wed Sep 10, 2014 2:16 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: Cost Basis Methods

I've been doing this since before spreadsheets were invented. Are you sure? My backup, last-resort plan is to simply reconstruct the decisions I made from the transaction history, using my saved tax return to confirm. After all, none of those decisions were arbitrary. It sounds pretty bad but it's ...
by ogd
Tue Sep 09, 2014 9:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Cost Basis Methods
Replies: 19
Views: 770

Re: Cost Basis Methods

Can't I just look back at my purchase history on Vanguard.com and tell them the date or dates and qty of shares I want to sell? Why do people say to keep your own records then? I don't know why you would. There are two levels of record keeping I can think of: one is recording transactions, the othe...
by ogd
Tue Sep 09, 2014 9:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Cost Basis Methods
Replies: 19
Views: 770

Re: Should anyone invest in short-term bonds at this point?

Yeah, Ogd, I was impressed by the 2.3% yields. I could imagine parking a good deal of the fixed income there, then perhaps some in short and intermediate bonds, just in case they do better than expected. And if something changes in the bond market, I suppose I could always just withdraw the money f...
by ogd
Tue Sep 09, 2014 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: Should anyone invest in short-term bonds at this point?

To what degree is past performance, in this case "not very good current yields," indicative of future performance, aka 'how they'll do in the next few years"? For safe bonds, to a very negative degree . It's simple math: if you bought a 5 year bond at 2% yield, and it's returned 6% r...
by ogd
Tue Sep 09, 2014 3:01 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: Should anyone invest in short-term bonds at this point?

Recent performance notwithstanding, there is no reason to invest in short bonds right now if bank products are available . Which they very often aren't, e.g. in 401k's or if the hassle of switching IRAs is too much or if the amount of money divided by the $250K FDIC guarantee results in too many acc...
by ogd
Tue Sep 09, 2014 2:43 pm
 
Forum: Investing - Theory, News & General
Topic: Should anyone invest in short-term bonds at this point?
Replies: 46
Views: 3691

Re: No good bond funds available. Other options?

Using muni funds extends your tax-advantaged space. Not true. You pay no taxes, but at the cost of worse yields that you would have had otherwise. This is much more obvious if we look before 2007, when munis were yielding 15% or so less than comparable Treasuries. So there's a discount of at least ...
by ogd
Tue Sep 09, 2014 2:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: No good bond funds available. Other options?
Replies: 15
Views: 1298

Re: Math Help Please: Mortgage v. Investing calculations

There's something wrong with your numbers. Are you including taxes & home insurance? Those don't stop at 15 years. Fundamentally, investing at 5% will always make up for a 4.15% mortgage. If it doesn't, the math is wrong. (Edit: nevermind, a large enough rate difference in the first 15 years...
by ogd
Tue Sep 09, 2014 2:00 pm
 
Forum: Investing - Theory, News & General
Topic: Math Help Please: Mortgage v. Investing calculations
Replies: 10
Views: 627

Re: pimco total return

I would definitely not use it at that ER. Even at the more customary 0.7% it would be a hard sell.

That Stable Value account is good and what I would use in your situation.
by ogd
Tue Sep 09, 2014 1:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: pimco total return
Replies: 7
Views: 533

Re: No good bond funds available. Other options?

The only reason I have the Roth stocks is that there was money I needed to stick somewhere for a rollover account. Thanks for the read. Are there any good options since my company account doesn't have decent bond and international options? BND and VXUS are always good, but you'll pay comissions tha...
by ogd
Tue Sep 09, 2014 12:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: No good bond funds available. Other options?
Replies: 15
Views: 1298

Re: I've been going all tax-deferred, considering to go taxa

Will the tax deferred savings really make a huge difference -- I have to pay the taxes anyway in 30 years. By then, taxes might be higher (or might not be). But I'll be paying taxes on the entire amount (original balance, plus all the gains). Is it going to make a huge benefit to give up the flexib...
by ogd
Tue Sep 09, 2014 12:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: I've been going all tax-deferred, considering to go taxable.
Replies: 37
Views: 3435
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