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Re: BND or a CD

Moreover, I do not think it repeals the financial law that when interest rates/inflation rise, existing fixed income securities, on a relative basis, lose value. Not at first glance, but the direct CD investor has a way to get out of that law by withdrawing early with a small penalty. So instead of...
by ogd
Fri Oct 31, 2014 6:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 42
Views: 2134

Re: BND or a CD

Then again, you might consider that BND investors with an appropriate investment time horizon will be benefitting from increasing market interest rates while a 5-year CD becomes worth less and less money every month interest rates/inflation rise. Of course, the magnitude of your monetary loss (in r...
by ogd
Fri Oct 31, 2014 5:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 42
Views: 2134

Re: BND or a CD

This is a little off the topic but, I saw this footnote in a Vanguard research paper. http://www.vanguard.com/pdf/s130.pdf The footnote is cited to the last sentence in the executive summary and states: 1. During periods of severe equity market stress, cash has historically been the most consistent...
by ogd
Fri Oct 31, 2014 2:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 42
Views: 2134

Re: Pay taxes now to pay less taxes later

Anything missing or incorrect? I could see one potential problem of future temporary LTCG rates of 0% would make it more desirable to not realize gains now. Aside from that, there is also the issue that over the long term, tax deferral is worth quite a bit. Essentially, you continue getting returns...
by ogd
Fri Oct 31, 2014 2:30 pm
 
Forum: Investing - Theory, News & General
Topic: Pay taxes now to pay less taxes later
Replies: 6
Views: 662

Re: A Challenge for Bogleheads - the market has changed

Vanguard does have some active funds that outperform indexes during some time periods of time, but Vanguard as a company is in my opinion a unique breed among financial institutions. The exception in this case proves the rule. Thanks for the +1, Garland. When it comes to the specific case of tactic...
by ogd
Fri Oct 31, 2014 2:08 pm
 
Forum: Investing - Theory, News & General
Topic: A Challenge for Bogleheads - the market has changed
Replies: 51
Views: 4709

Re: Schwab expands no commission ETFs-no early sell fee

Well, at least this makes me feel a little better about costing Schwab so much money in ATM fees while never giving them any commissions. I still think they're deep in the red with my account.... I assure you they are not in the red. Have you looked at the fees they charge for money market funds? R...
by ogd
Thu Oct 30, 2014 11:11 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab expands no commission ETFs-no early sell fee
Replies: 41
Views: 2793

Re: Bond Distribution Yield and SEC Yield ?

It's complicated. Which means it's not a dumb question. Distribution yield (as show in the VG distributions page) is the recentmost dividend paid, annualized. It's paid from bond coupons every month. SEC yield is the combined, weighted Yield-to-Maturity of the component bonds. This means the amount ...
by ogd
Thu Oct 30, 2014 8:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Distribution Yield and SEC Yield ?
Replies: 8
Views: 497

Re: VCADX alternative

My VG CFP recommended that I split my bond allocation between BND (in my 401k) and remaining in VCADX (in my taxable account). His reasoning was that I am in high tax bracket and so this would be a better choice in taxable account. This is indeed correct, provided the 401k is full with BND. Otherwi...
by ogd
Thu Oct 30, 2014 8:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: VCADX alternative
Replies: 3
Views: 332

Re: Schwab expands no commission ETFs-no early sell fee

Well, at least this makes me feel a little better about costing Schwab so much money in ATM fees while never giving them any commissions. I still think they're deep in the red with my account....
by ogd
Thu Oct 30, 2014 2:16 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab expands no commission ETFs-no early sell fee
Replies: 41
Views: 2793

Re: Thoughts on Defined Maturity Bond Funds?

The yield on the Defined Maturity funds are much higher than any CD's I can ladder. If I could match the yield, FDIC insured CD's would absolutely be the way to go. They are not "much higher". BSCJ pays 2% for a 5 year term, and you can find CDs as high as 2.5% -- with no credit risk and ...
by ogd
Thu Oct 30, 2014 12:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on Defined Maturity Bond Funds?
Replies: 6
Views: 271

Re: Thoughts on Defined Maturity Bond Funds?

There are many reasons: 1) High expenses 2) Low liquidity (small funds) 3) Only a few sectors available, e.g. the only reasonably cheap funds are corporate 4) Low availability, e.g. you won't find them in 401k's. 5) There's no escaping the low yields on short bonds. For example, BSCH (corp 2017) mak...
by ogd
Thu Oct 30, 2014 12:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thoughts on Defined Maturity Bond Funds?
Replies: 6
Views: 271

Re: 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? A simple and very freque...
by ogd
Thu Oct 30, 2014 11:48 am
 
Forum: Investing - Help with Personal Investments
Topic: BND or a CD
Replies: 42
Views: 2134

Re: If I am a LT investor, should I forgo a bond allocation?

Virtually nobody plans for the fact that their long-term bonds could fall more than 50% -- but they could. It's not as simple as comparing two numbers. For a number like 50% to approach the realm of the possible, you really need to have a theory of inflation, as in why it would move off the present...
by ogd
Thu Oct 30, 2014 11:38 am
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2059

Re: Bond fund for taxable account.

See ongoing discussion in this thread: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=149738&newpost=2241067 Short answers: 1) Bank CDs and I-bonds are probably the top choices right now. 2) If you don't want to deal with those and would prefer everything in the same account, TBM and IT...
by ogd
Wed Oct 29, 2014 6:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond fund for taxable account.
Replies: 2
Views: 319

Re: If I am a LT investor, should I forgo a bond allocation?

Yet another question is how certain you are of your horizon. Life or deep economic woes might force a short horizon on you, and then what. This can be either health or extended unemployment (the latter well correlated with crashes), or even a golden opportunity that you don't have any liquid money t...
by ogd
Wed Oct 29, 2014 5:49 pm
 
Forum: Investing - Theory, News & General
Topic: If I am a LT investor, should I forgo a bond allocation?
Replies: 28
Views: 2059

Re: What online banks do you like for savings or MMA?

I really like Barclay's. One factor not mentioned is that both the savings account and the CDs have been at or near the top of similar offerings for years now, which is great news for the lazy -- you don't have to keep shifting money around. Thanks ogd, that's a very important point. Hate to go wit...
by ogd
Wed Oct 29, 2014 5:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: What online banks do you like for savings or MMA?
Replies: 44
Views: 2546

Re: Questions on bond funds in taxable

Kevin: I maintain that the following comparisons are invalid and discount risk: AAA muni against Treasury AAA muni against CD Intermediate-Term Tax Exempt against Total Bond Market Of course I know you're aware of risk and you mention it in passing, but the calculations discount it, and that's a big...
by ogd
Wed Oct 29, 2014 5:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Questions on bond funds in taxable
Replies: 22
Views: 1586

Re: What online banks do you like for savings or MMA?

I really like Barclay's. One factor not mentioned is that both the savings account and the CDs have been at or near the top of similar offerings for years now, which is great news for the lazy -- you don't have to keep shifting money around. (One exception being those crazysexycool PenFed deals that...
by ogd
Wed Oct 29, 2014 4:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: What online banks do you like for savings or MMA?
Replies: 44
Views: 2546

Re: QE Ending, how does it affect Total Bond Fund?

The yield will increase instantly . When a bond's price drops, the yield automatically goes up much more than you'd think, because even if coupons stay unchanged, it's a given that over the next N years the bond will gradually recover value back to par; the true yield of a bond or fund is a function...
by ogd
Wed Oct 29, 2014 4:04 pm
 
Forum: Investing - Theory, News & General
Topic: QE Ending, how does it affect Total Bond Fund?
Replies: 8
Views: 1394

Re: Questions on bond funds in taxable

Just for the sake of my education, how you would have answered the original poster's question? Before the edit, the poster thought the tax bracket would be 25% or 28%. Right now I would recommend direct CDs. The yield comparison with Treasuries, which is apples to apples (well, close enough) and wh...
by ogd
Wed Oct 29, 2014 3:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Questions on bond funds in taxable
Replies: 22
Views: 1586

Re: Asset Location

You can be a diehard passive investor, but there are times when you want to make changes to the component holdings. On average in my RIA firm, I see this every five years or so. Yes, but it's not how we advise people to invest. Like I said, either your own or your funds' hyperactivity can definitel...
by ogd
Wed Oct 29, 2014 3:40 pm
 
Forum: Investing - Theory, News & General
Topic: Asset Location
Replies: 13
Views: 738

Re: Asset Location

If there are two accounts, say a traditional IRA and a taxable account, please help me understand by equities go in the taxable account and bonds go in the IRA. I have heard this advice many times in the past, but I find it unworkable in practice. To me, it should be reversed. Yahoo says 10-year AA...
by ogd
Wed Oct 29, 2014 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: Asset Location
Replies: 13
Views: 738

Re: Asset Location

Hank: lots of reading on some of these threads, have fun! I would only add re: your specific concerns that items 2-4 don't apply to the funds we usually recommend. Yes, not even 2 :sharebeer Consider VTSAX: all capital gains are deferred, and I can't think of what a better domestic fund could possib...
by ogd
Wed Oct 29, 2014 1:45 pm
 
Forum: Investing - Theory, News & General
Topic: Asset Location
Replies: 13
Views: 738

Re: A Challenge for Bogleheads - the market has changed

There is a very simple response to the challenge: So for me the key thing is to buy when things are historically cheap or well below trend, and hold/sell when they are historically very dear or well above trend. So, no major insight there! But I would invest in a substantial fashion when I identify ...
by ogd
Wed Oct 29, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: A Challenge for Bogleheads - the market has changed
Replies: 51
Views: 4709

Re: Schwab expands no commission ETFs-no early sell fee

There is a degree of fairness to such payments -- AFAIK Vanguard funds own & support VBS and its administration costs, at least to the degree that VBS does not support itself through fees for non-Vanguard assets. I don't know what the amounts are or even sign (positive or negative), but if Vangu...
by ogd
Wed Oct 29, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab expands no commission ETFs-no early sell fee
Replies: 41
Views: 2793

Re: Questions on bond funds in taxable

Not sure I understand your argument. Seems like there are times when you could end up with the choice that is both higher risk and lower yield. The argument goes like this: would it be correct to compare the after-tax yield of Treasuries and corporates? Whatever your tax situation, you'd conclude t...
by ogd
Wed Oct 29, 2014 12:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Questions on bond funds in taxable
Replies: 22
Views: 1586

Re: Questions on bond funds in taxable

If they are in the 15% bracket in retirement, taxable bonds (like total bond market) would be fine. Or CDs. If they end up in the 28% bracket, they should almost certainly use tax-exempt bonds (munis). In the 25% bracket, you might need to calculate it using a bond yield calculator . Here's a like ...
by ogd
Tue Oct 28, 2014 3:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Questions on bond funds in taxable
Replies: 22
Views: 1586

Re: Tilted to SV by mistake, should I TLH out of it?

1) I did choose to go with conservative approach by going with 60-40 even though my age, need, willingness, ability say I could go with 70/30. Should I go even more conservative? 60/40 is my present allocation and probably for a long time hence. I find it very tolerable. Give yourself a little time...
by ogd
Tue Oct 28, 2014 2:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tilted to SV by mistake, should I TLH out of it?
Replies: 37
Views: 1664

Re: Schwab expands no commission ETFs-no early sell fee

Commission free does not mean revenue free. The revenue Schwab gets from the ETF companies is called something else. Those fees come out of the fund and out of total return. Vanguard does not pay these fees, thus no "commission free" Vanguard ETFs at Schwab. Rick Ferri Rick -- can you ela...
by ogd
Tue Oct 28, 2014 1:18 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab expands no commission ETFs-no early sell fee
Replies: 41
Views: 2793

Re: I give in! three fund portfolio - need some advice

Oh brother. You are the second person in a day to reconsider a tilt to Small Value and REIT specifically . It's an epidemic! http://www.bogleheads.org/forum/viewtopic.php?f=1&t=149678 Y'all need to stop watching the markets and chill, I think. I second the VXUS recommendation. Simply not worth t...
by ogd
Tue Oct 28, 2014 3:34 am
 
Forum: Investing - Help with Personal Investments
Topic: I give in! three fund portfolio - need some advice
Replies: 10
Views: 1636

Re: CDs or something else? Short to medium term savings

I don't really see it as giving up tax sheltered space. This isn't money that would otherwise go to retirement. It's money that would otherwise get spent on a nicer apartment or a vacation. I'm very comfortable with my long term savings rate. Hopefully soon enough, you might begin maxing out tax ad...
by ogd
Tue Oct 28, 2014 3:28 am
 
Forum: Investing - Help with Personal Investments
Topic: CDs or something else? Short to medium term savings
Replies: 17
Views: 1623

Re: CDs or something else? Short to medium term savings

bh42: many of us value tax-advantaged space highly and don't like wasting it. If you had been certain about this much in this many years, then we would have said CDs or something. But it's a vague plan at this point, which in the NYC variant will not pan out at all. So for "vague mid-term"...
by ogd
Mon Oct 27, 2014 10:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: CDs or something else? Short to medium term savings
Replies: 17
Views: 1623

Re: fleeced by an adviser, is there a recourse?

subham: I'm afraid there's nothing you can do. If firms like Edward Jones are allowed to exist in their current form, then it's clear that the legal system is not an option. This is a sad state of affairs. I disagree with those who say this is capitalism and do your due diligence; imagine if you had...
by ogd
Mon Oct 27, 2014 8:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: fleeced by an adviser, is there a recourse?
Replies: 104
Views: 7947

Re: Tilted to SV by mistake, should I TLH out of it?

Initially I was going to hold on to this till it recovers. But now that year is ending, should i sell it off and harvest the losses? What Bogleheads rules would I be breaking here? I think while settling into a long-term allocation you get one free pass. But if you once again "realize that you...
by ogd
Mon Oct 27, 2014 5:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tilted to SV by mistake, should I TLH out of it?
Replies: 37
Views: 1664

Re: Vanguard High Yield Fund for Roth IRA

As for the original question, about high yield funds: the question to ask yourself is, does it accomplish anything that isn't better done by increasing stock allocation slightly? Which too gives you higher expected returns and lower sensitivity to interest rate risk. Perhaps you get something; a cas...
by ogd
Mon Oct 27, 2014 1:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard High Yield Fund for Roth IRA
Replies: 9
Views: 1040

Re: Vanguard High Yield Fund for Roth IRA

I can try to stand in for David. Grabiner, So if the US stock market crashed 30% and you held a different asset class that was up 10%, you would stick to your guns and just rebalance to targets and not overweight US Stocks? Yes. With a decent sized portfolio, it will be hard enough rebalancing to ta...
by ogd
Mon Oct 27, 2014 12:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard High Yield Fund for Roth IRA
Replies: 9
Views: 1040

Re: CDs or something else? Short to medium term savings

Don't know if that's enough for your situation, but you can borrow up to $50k or 50% from a 401k, then withdraw another $10k without penalty in most cases. That goes quite a long way towards a down payment. I'm not at all comfortable withdrawing from retirement funds for any reason and don't want to...
by ogd
Mon Oct 27, 2014 12:50 am
 
Forum: Investing - Help with Personal Investments
Topic: CDs or something else? Short to medium term savings
Replies: 17
Views: 1623

Re: Is this a low amount of trading?

I can't answer the IB question directly, but a few things I know: 1) VWRL trades on four different European exchanges, which helps mitigate the volume issue somewhat. I'm sure there are robots running around equalizing prices if they get too out of whack. For a small fee, of course. 2) 500M is a sma...
by ogd
Sun Oct 26, 2014 7:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is this a low amount of trading?
Replies: 2
Views: 398

Re: LASTPASS Password Program

But the greatest advantage of open source is you don't need to 'trust' the programer/coder. As long as you trust the compiler, you are safe. For closed source, you introduce an additional attack vector. What is to prevent a disgruntled employee from introducing a trojan? Or the more common scenario...
by ogd
Sun Oct 26, 2014 4:05 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 46
Views: 4312

Re: LASTPASS Password Program

LastPass is proprietary. How much would you trust LastPass itself? I'd recommend KeePass or Password Safe. I personally use KeePass. The possibility that Lastpass feeds me malicious code through the Chrome store or Google Play to send them the master password or decrypted file is pretty low on my l...
by ogd
Sun Oct 26, 2014 1:40 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 46
Views: 4312

Re: Time For Me to Kick Wellington Through The Goalpost of L

BHChinook: you didn't mention LifeStrategy yourself (just VTINX, which had no AA fund), but a couple of other posters did, hence the responses. Note that the way in which the Asset Allocation fund erred is more Wellesley-like than index-like, that is the managers used their freedom to do precisely t...
by ogd
Sat Oct 25, 2014 5:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time For Me to Kick Wellington Through The Goalpost of Life?
Replies: 43
Views: 4773

Re: LASTPASS Password Program

Naïve. give me a break. Been working in finance at a large tech company for 20+ years. Believe me, I understand SW development and the issues around. Yes, but have you worked in tech at a large finance company? That's the flipside of the story. It's really the stone age in some of these places. Wit...
by ogd
Fri Oct 24, 2014 6:25 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 46
Views: 4312

Re: Time For Me to Kick Wellington Through The Goalpost of L

But what if this particular managed fund has beaten the index fund consistently 30+ years? At what point do you decide they are generating some positive return and giving it to investors. The person in 1994 who picked Wellesly over Conservative growth (i.e. funds within 1%) for their 10k, now has 5...
by ogd
Fri Oct 24, 2014 3:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time For Me to Kick Wellington Through The Goalpost of Life?
Replies: 43
Views: 4773

Re: is optimization(TLH+tax credit) worth cost(time,behavior

To expand on the two posts above, I also think that TLH gives you something to do with your portfolio, when otherwise you might be tempted to do something more damaging as a way to manifest your evolving sophistication. And it's something that has a good chance of being profitable, for once.
by ogd
Fri Oct 24, 2014 3:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: is optimization(TLH+tax credit) worth cost(time,behavior)?
Replies: 14
Views: 916

Re: LASTPASS Password Program

Large companies like Target must have at least the IT resources that lastpass has. I find it hard to believe that lastpass security around storing the passwords is orders of magnitude difference than companies like Target that are in the news lately. If that was true - target (or whoever) would hav...
by ogd
Fri Oct 24, 2014 2:53 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 46
Views: 4312

Re: So do we care more about change in bond price or bond yi

The red and green curves are YTM and price for our beautiful zeros. Wonderfully well-behaved because of the consistent coupon rate of 0%. By contrast, the blue and orange curves are the yield and price for bonds maturing on the same dates but some with different coupon rates. So for this chart I di...
by ogd
Fri Oct 24, 2014 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: So do we care more about change in bond price or bond yield?
Replies: 178
Views: 13429

Re: LASTPASS Password Program

So, the idea is that having a duplicate set of your User ID's and passwords, consolidated in one place, is more secure? In which case, hackers only need to be successful once to get access to everything. In a way yes, but that one success is much harder to achieve than breaking into much less prote...
by ogd
Fri Oct 24, 2014 2:17 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 46
Views: 4312

Re: Time For Me to Kick Wellington Through The Goalpost of L

I was going to pop in and congratulate the OP for switching out of Wellington after a period of outperformance -- which is the right time to change investments -- but sadly that's not what we're doing here. Performance chasing costs the average investor anywhere between 50 bp and 200 bp depending on...
by ogd
Fri Oct 24, 2014 1:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time For Me to Kick Wellington Through The Goalpost of Life?
Replies: 43
Views: 4773

Re: Mr. Market turns on Amazon

How much of that is focused on relevant projects and how much frittering away earnings on ridiculous side projects? No idea. I would guess very little. It's easy enough to find out once you go past that P/E number and start digging a little. There's no better way to suck the life out of this type o...
by ogd
Thu Oct 23, 2014 11:26 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Market turns on Amazon
Replies: 42
Views: 4422

Re: Mr. Market turns on Amazon

Amazon has so little earnings because they constantly expand. Those who read the full reports (clarification: this isn't me) and not just the P/E ratio can see that it's a very profitable business, for a retailer at least.
by ogd
Thu Oct 23, 2014 7:54 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Market turns on Amazon
Replies: 42
Views: 4422
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