Search found 3952 matches

by ogd
Thu Aug 27, 2015 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: Performance of VGTSX
Replies: 18
Views: 1676

Re: Performance of VGTSX

TinyElvis wrote:I think international allocation is very important, but I'm not sure I would touch VGTSX at all. After further research on it, I am definitely not comfortable throwing 30% of a portfolio towards it.

What exactly do you mean by "further research"?
by ogd
Wed Aug 26, 2015 9:24 pm
Forum: Investing - Help with Personal Investments
Topic: TLH tomorrow? Please help me decide [Tax Loss Harvesting]
Replies: 22
Views: 1028

Re: TLH tomorrow? Please help me decide [Tax Loss Harvesting]

I don't have a lot of input since I'm struggling with this decision myself, but just wanted to say I'm proud to see so many TLH threads on bogleheads right now. As opposed to "should I sell" or even the slightly more frequent market timing.
by ogd
Wed Aug 26, 2015 5:43 pm
Forum: Investing - Theory, News & General
Topic: Market timing risk with long term bonds?
Replies: 5
Views: 607

Re: Market timing risk with long term bonds?

DCA is just as powerless to mitigate interest rate risk as "not selling for 30 years" is. Rates might rise the minute you're done DCA-ing. Alternatively, the better part of your DCA might suffer from the reinvestment risk you're worried about. The risk is inherent in the instrument and &qu...
by ogd
Wed Aug 26, 2015 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: VTI - "Market" order type
Replies: 25
Views: 1940

Re: VTI - "Market" order type

Since market orders are executed essentially immediately, you'd have to have the most extraordinarily bad luck to have a mini crash start the millisecond after you placed your order. I'm assuming here that you're paying attention, and don't enter a market order in the middle of a flash crash. I cer...
by ogd
Wed Aug 26, 2015 12:41 am
Forum: Investing - Help with Personal Investments
Topic: Which tax-exempt bond fund ??
Replies: 32
Views: 2460

Re: Which tax-exempt bond fund ??

I would suggest giving the new fund some time to mature and prove itself. There is very little that needs to be improved on with the current mutual funds, IMHO. The unknowns are mainly the ETF structure. My guess is that this will be the main source of inflows for the fund, as the needs of Vanguard ...
by ogd
Tue Aug 25, 2015 10:54 pm
Forum: Investing - Theory, News & General
Topic: Long term bonds in VBTLX/VBMFX
Replies: 35
Views: 2691

Re: Long term bonds in VBTLX/VBMFX

Long-term TIPS are ideal for long-term investors; you can buy a 30-year TIPS which is guaranteed to be worth $10,000 in today's dollars thirty years from now. Ideal except for the copious amounts of interest rate risk, which still exists despite the reduction afforded by the "IP" part. On...
by ogd
Tue Aug 25, 2015 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: VTI - "Market" order type
Replies: 25
Views: 1940

Re: VTI - "Market" order type

One problem with limit orders if you're TLHing, and just want to get it done, is that the market could move against you in the time between buying and selling, so you could lose much more than by just doing market orders. I don't have a problem with the market moving against me, it could just as ea...
by ogd
Tue Aug 25, 2015 6:06 pm
Forum: Investing - Help with Personal Investments
Topic: VTI - "Market" order type
Replies: 25
Views: 1940

Re: VTI - "Market" order type

I've read about one of the downsides around ETFs vs Mutual Funds with the bid/ask spread. However, is this a big deal for large ETFs like VTI etc.? No, not really. At any given time, if a spread is small, you're good to go. When choosing, look at the bid/ask spread over a day or two, or see if you ...
by ogd
Tue Aug 25, 2015 4:56 pm
Forum: Investing - Theory, News & General
Topic: Long term bonds in VBTLX/VBMFX
Replies: 35
Views: 2691

Re: Long term bonds in VBTLX/VBMFX

I am now thinking the opposite: that long term bonds are an optimal holding for long term investors. If you are holding to maturity, there is no interest rate risk, and you get a higher average and fixed yield. Trick question: what if you are NOT holding the same bond to maturity, but instead every...
by ogd
Sat Aug 22, 2015 9:31 pm
Forum: Investing - Theory, News & General
Topic: A warning on RBDs [Really Bad Days]
Replies: 46
Views: 6308

Re: A warning on RBDs [Really Bad Days]

If you just call them ReBalancing Days, all's well. Except for the part where you actively wait for one, off-balance -- if I'm off from my target a "Healthy RBD" (tm) is "as soon as possible".
by ogd
Sat Aug 22, 2015 9:26 pm
Forum: Investing - Theory, News & General
Topic: Should I want the market to go up or down?
Replies: 35
Views: 3172

Re: Should I want the market to go up or down?

Aside from the very good points about personal circumstances above, there's still a strong case to be made that you should want the stock market to go up. Thing is, the stock prices mean something . Implicit in the talk about buying cheap stocks is the assumption that they end up in the same place a...
by ogd
Sat Aug 22, 2015 9:04 pm
Forum: Investing - Theory, News & General
Topic: "Stocks for the Long Run? Really?
Replies: 29
Views: 4496

Re: "Stocks for the Long Run? Really?

It's not even mathematically possible for TBM to give a total return of 121% over the next 15 years! That equates to an annualized return of 5.45% (which I suspect was pretty close to the yield in 2000). Today the yield is 2.13%--o the only place the other 3.3% of yield could come from is interest ...
by ogd
Sat Aug 22, 2015 8:31 pm
Forum: Investing - Theory, News & General
Topic: Muni-Bonds anyone???
Replies: 3
Views: 638

Re: Muni-Bonds anyone???

I keep looking at tax free individual muni-bonds with a coupon rate of 5% for my taxable account. Because of the price you pay, the yield on these bonds is almost certainly much lower. For example: if you have to pay $110 per $100 for a 5 year bond with coupon 5%, your yield is only about 2.9%. Thi...
by ogd
Thu Aug 20, 2015 10:29 am
Forum: Investing - Help with Personal Investments
Topic: Building the Bond Side of Your Potfolio
Replies: 23
Views: 1593

Re: Building the Bond Side of Your Potfolio

Welll, it's obvious that you guys know more about this (asset allocation) than I do. I can hardly follow your conversation. :) It makes me wonder if I should truly being trying to get the best allocation on my own or turn to an advisor. No advisor. You simply can't afford them from the current low ...
by ogd
Sat Aug 15, 2015 12:22 pm
Forum: Investing - Theory, News & General
Topic: "Weighing the concerns about bond market liquidity."
Replies: 22
Views: 1455

Re: "Weighing the concerns about bond market liquidity."

So one can say that ETFs are safer if you don't sell, but if you see 10% losses in your MUB when you were expecting 5%, if only for a few months, that does raise eyebrows. Whereas if a MF drags by 0.5% annualized for a few months you hardly ever notice. I think we're on the same page, in fact I thi...
by ogd
Sat Aug 15, 2015 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with my American Funds?
Replies: 28
Views: 1523

Re: What to do with my American Funds?

Thanks nedsaid- I know you're familiar with American Funds and appreciate the explanation. In your opinion, what is the incentive for the OP's Wells Fargo Advisor to keep adding new American funds in his IRA account? I had assumed that the advisor would collect the sales load with each new fund . B...
by ogd
Sat Aug 15, 2015 11:55 am
Forum: Investing - Theory, News & General
Topic: "Weighing the concerns about bond market liquidity."
Replies: 22
Views: 1455

Re: "Weighing the concerns about bond market liquidity."

What's puzzling to me about media coverage of this issue though is that they almost inevitably attribute this prospective problem to ETF's without mentioning MF's. Whereas it's really the other way around*. A temporary liquidity squeeze doesn't harm ETF holders who don't sell. The ETF market price ...
by ogd
Thu Aug 13, 2015 11:04 pm
Forum: Investing - Help with Personal Investments
Topic: Help Picking Mutual Funds
Replies: 3
Views: 417

Re: Help Picking Mutual Funds

You can post your portfolio in this format Asking portfolio questions to cover all the bases. A target fund might be the best choice for you. No-one is too young to have bonds -- it's my belief that every investor should have at least 20%, which would make the target funds under-bonded. The next bes...
by ogd
Thu Aug 13, 2015 10:37 pm
Forum: Investing - Theory, News & General
Topic: Inverse ETFs
Replies: 44
Views: 2520

Re: Inverse ETFs

Amont all the talk about the brokenness of inverse ETFs (very true), let's not forget that it would be a bad idea even if they were exactly what the unwary investor thought them to be. If someone came here asking whether "there is a case to be made for selling all my stocks after a six year bul...
by ogd
Thu Aug 13, 2015 10:23 pm
Forum: Investing - Theory, News & General
Topic: More Individual Municipal Bond Shenanigans [Edward Jones SEC overcharge settlement]
Replies: 27
Views: 1843

Re: More Individual Municipal Bond Shenanigans

Even with, say $1M in fixed income, is that enough for an individual investor to have in bonds, rather than funds? There is so much exists about this on BH on archived threads. If you don't care to get some extra money for some work, sure, go the muni mutual fund route. But $1M is above the thresho...
by ogd
Mon Aug 10, 2015 11:01 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

Not trying to spin anything. If I paid $1000 for a bond and it is paying $50/year and I will get my $1000 back at maturity, it seems to me that 5% is the best characterization of the return. Of the return over the entire holding period, yes. The question is how much is in the past and how much is i...
by ogd
Sun Aug 09, 2015 10:14 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

I would only get the $190 if I sell the bond and then I am stuck with 1% interest going forward, which is equivalent to what I would get if I held on to the original bond (except for whatever fees are involved in buying/selling bonds). So, really, there is no benefit to selling the bond and purchas...
by ogd
Sat Aug 08, 2015 3:11 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

I still look at my muni bonds as a better investment for me rather than a 2 % CD, because I receive enough interest that I would be pushed into the 28% tax bracket or higher if my interest was not tax free. Wouldn't that negate any benefit from selling now and investing in CD's? That was a big reas...
by ogd
Sat Aug 08, 2015 2:35 pm
Forum: Investing - Theory, News & General
Topic: Kitces: How bond funds could beat individual bonds in a rising interest rate environment.
Replies: 11
Views: 1217

Re: Kitces: How bond funds could beat individual bonds in a rising interest rate environment.

1 does Vanguard Total Bond use this strategy? Yes. It does so not as a "strategy", but simply to maintain a certain structure so that you always buy about the same thing. Bonds age . If the fund didn't fight off this aging process, an investor would one year buy a 5 year fund, the next ye...
by ogd
Sat Aug 08, 2015 2:00 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

You're forgetting about the premium going back to par, which messes up with those calculations. The way you did it would only work for an infinite bond if such a thing existed. You can run the numbers in a bond calculator, which I don't have right now. Should be some $1200 or thereabouts. Of course...
by ogd
Fri Aug 07, 2015 7:52 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

To answer my own question in a rough sense, I imagine that my bond is now worth about $5000 (I come to this answer because if it was worth less than $5K, why would I sell, unless I thought interest rates were going up? and I can't imagine why anyone would pay more, unless they thought interest rate...
by ogd
Wed Aug 05, 2015 11:43 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

I think this is just semantics and both definitions of "getting" are valid, you just have explain how you are obtaining your number. No, I don't think they're equally valid. One definition has the problem that an instrument that is "getting" 5% can be handily beaten by an instru...
by ogd
Tue Aug 04, 2015 11:08 pm
Forum: Investing - Help with Personal Investments
Topic: Total Bond Market vs. Interm-Term Treasury
Replies: 34
Views: 2305

Re: Myth

It's well known that historically 100% bonds was not the position of minimum volatility, but some 20%-30% stocks actually reduced risk while improving returns. Ogd: I believe this is a myth as evidenced by the Vanguard risk/return chart in this link: The Truth About Risk Best wishes. Taylor Hi Tayl...
by ogd
Tue Aug 04, 2015 10:58 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

My question when looking at the yield I might be losing by not selling today, while it is worth more, is that there does not seem to be a better place to put the money. I certainly cannot buy a bond today with a 5% coupon without paying a similar premium. CD's and treasuries don't appeal to me with...
by ogd
Tue Aug 04, 2015 12:35 am
Forum: Investing - Help with Personal Investments
Topic: Total Bond Market vs. Interm-Term Treasury
Replies: 34
Views: 2305

Re: Total Bond Market vs. Interm-Term Treasury

Leif: Thank you for the comparisons. Until now, I thought the Treasury Fund would outperform Total Bond Market when bonds turned negative; however, the opposite has occurred. Past performance does not forecast future performance. Best wishes. Taylor I thought so too. I guess the mix of treasury and...
by ogd
Tue Aug 04, 2015 12:27 am
Forum: Investing - Theory, News & General
Topic: Allan Roth Says Not to Load Up on Muni Bonds
Replies: 101
Views: 7978

Re: Allan Roth Says Not to Load Up on Muni Bonds

The bottom line is that the money comes in, and that's not a matter of dispute. I'm not going to argue with cash in my pocket. This is not theoretical. I don't think the argument is about the money in your pocket, it's about the fact that you're probably measuring it the wrong way. That is, you're ...
by ogd
Mon Aug 03, 2015 11:12 pm
Forum: Investing - Theory, News & General
Topic: Which is more optimal in retirement? Total return vs. income investing
Replies: 41
Views: 3436

Re: Which is more optimal in retirement? Total return vs. income investing

The argument against a dividend strategy in the Vanguard papers really comes down to: (1) taxes and (2) over-weighting sectors that are traditionally high dividend companies puts you at risk due to loss of diversification. Yes, those are the main arguments. There's little wrong with dividend stocks...
by ogd
Sat Aug 01, 2015 5:08 pm
Forum: Investing - Theory, News & General
Topic: Which is more optimal in retirement? Total return vs. income investing
Replies: 41
Views: 3436

Re: Which is more optimal in retirement? Total return vs. income investing

The similar growth charts mean that in every time period, the two funds had almost the same total return. The only difference is that in one fund, more of that return came from price appreciation, and in the other, more of it came from dividends. Yes. Crucially, total return is computed with divide...
by ogd
Sat Aug 01, 2015 2:20 pm
Forum: Investing - Theory, News & General
Topic: Anyone hold Long Term Bonds?
Replies: 45
Views: 3073

Re: Anyone hold Long Term Bonds?

See I just replaced "cash" with "stocks" and now you see how ridiculous that statement looks. Obviously bonds can underperform cash just like bonds can underperform stocks. That hardly makes them risky. A chance of underperforming a more volatile asset does not make risk. Risk i...
by ogd
Sat Aug 01, 2015 1:48 pm
Forum: Investing - Help with Personal Investments
Topic: Moving from TIPs fund to TIPs ladder???
Replies: 49
Views: 2925

Re: Moving from TIPs fund to TIPs ladder???

If I translate your answer below correctly, it says: Everything is wrong with it if the objective is liability matching. Oh, I wouldn't go nearly as far. Just because differences can happen, it doesn't mean they are likely. I'd expect yield curve changes to be much smoother than my artificial examp...
by ogd
Fri Jul 31, 2015 5:38 pm
Forum: Investing - Help with Personal Investments
Topic: Moving from TIPs fund to TIPs ladder???
Replies: 49
Views: 2925

Re: Moving from TIPs fund to TIPs ladder???

Great question and I'm sure someone more analytical will provide a better answer than I can. All I know is 'given my current objective of using TIPs for LMP purposes, as a proxy for a TIPs ladder the long-term PIMCO fund is more suitable than Vanguard's intermediate term fund'...having said that, I...
by ogd
Fri Jul 31, 2015 5:29 pm
Forum: Investing - Help with Personal Investments
Topic: Moving from TIPs fund to TIPs ladder???
Replies: 49
Views: 2925

Re: Moving from TIPs fund to TIPs ladder???

What's wrong with it? Nothing much, but it might perform differently due to the maturity shape. For example, suppose that in the latter half of the ladder, yields go up steeply but only in 15 year+ end of the curve (whether or not realistic). The ladder would not have been affected at all, but a go...
by ogd
Fri Jul 31, 2015 4:36 pm
Forum: Investing - Theory, News & General
Topic: Anyone hold Long Term Bonds?
Replies: 45
Views: 3073

Re: Anyone hold Long Term Bonds?

Isn't Sharpe ratio CAGR divided by standard deviation of annual returns? If you're a long-term investor why do you care what the annual returns are? You only care about the final return. Well, let's for a minute suppose that's true [*], and you spend 30 years in a deep sleep. What if your final ret...
by ogd
Fri Jul 31, 2015 2:49 pm
Forum: Investing - Theory, News & General
Topic: Chance of bond being called?
Replies: 4
Views: 414

Re: Chance of bond being called?

I'm no expert on callable bonds and the call provisions can be complex. However, this one will probably be called, with that coupon at AA rating. The number to pay attention to is YtW, yield-to-worst, which also takes into account the disappearance of the premium you'd probably be paying for this bo...
by ogd
Thu Jul 30, 2015 12:39 pm
Forum: Investing - Theory, News & General
Topic: Bond Prices and Anticapted FED Increae
Replies: 5
Views: 644

Re: Bond Prices and Anticapted FED Increae

The short version is that the that particular part of the consensus has been priced in long ago. The market doesn't like to wait until you hear about it. You can look to the early part in the year or even as far back as 2013 for the major repricings. Now it's about chances that it might not happen o...
by ogd
Thu Jul 30, 2015 12:22 pm
Forum: Investing - Theory, News & General
Topic: How to understand the performance of a bond fund?
Replies: 8
Views: 892

Re: How to understand the performance of a bond fund?

Yes, the performance graphs by default for ETFs are next to useless. Here's the trick to use: start with a mutual fund (any, but let's say Vanguard Total Bond Market which is a "proper" bond fund - safe and USD-denominated). Look it up on Morningstar, go to the Chart tab the add your ETF a...
by ogd
Wed Jul 29, 2015 11:32 pm
Forum: Investing - Theory, News & General
Topic: Crazy Stock Investment Idea
Replies: 21
Views: 1967

Re: Crazy Stock Investment Idea

Well if you think Warren Buffett's performance in recent decades has only matched the Mid-cap Value index .. You could make the argument that it is as simple as buying stocks with a low P/E ratio [/quote] How so? Where are all the other Warren Buffetts? How come there's only one, if it's that easy?...
by ogd
Wed Jul 29, 2015 11:14 pm
Forum: Investing - Theory, News & General
Topic: "current yields are the best estimate of future returns"
Replies: 6
Views: 549

Re: "current yields are the best estimate of future returns"

It also stands to reason. With bonds all you get is the yield, and then you're done with it after a while. They don't have the "perpetuity" aspect of stocks, where a stock that has kept up earnings & dividends but has a huge problem on the horizon is going to be hit massively. Or a sto...
by ogd
Wed Jul 29, 2015 10:29 pm
Forum: Investing - Theory, News & General
Topic: Crazy Stock Investment Idea
Replies: 21
Views: 1967

Re: Crazy Stock Investment Idea

Well in the UK it is a little different - the average active fund here has outperformed over 1, 3, 5 and 10 years .. (And that's despite about half of them being closet indexes, and plenty of bad apples and high fees) I always say the difference with the UK is we're very conservative and cautious, ...
by ogd
Wed Jul 29, 2015 10:07 pm
Forum: Investing - Help with Personal Investments
Topic: Bond prices
Replies: 21
Views: 1680

Re: Bond prices

Really quickly: Second, so the answer to my first question is that expected inflation and real return are used to determine the stated yield on a bond? But then what is meant when writers state that anticipated interest rate hikes have been "priced in"? Does that mean the same; i.e. that t...
by ogd
Wed Jul 29, 2015 9:50 pm
Forum: Investing - Theory, News & General
Topic: Crazy Stock Investment Idea
Replies: 21
Views: 1967

Re: Crazy Stock Investment Idea

So typical mutual fund structure is demonstrably anywhere from 50-70% index tracker, with maybe 20% smart-beta and 10% genuine active stock-picking .. Hug the index, and aim to outperform a little, and you're unlikely to lose investors' confidence So many mutual funds are "closet indexes"...
by ogd
Wed Jul 29, 2015 2:24 pm
Forum: Investing - Help with Personal Investments
Topic: Moving from TIPs fund to TIPs ladder???
Replies: 49
Views: 2925

Re: Moving from TIPs fund to TIPs ladder???

My definition of interest rate risk is very reasonable: can you underperform cash based entirely on yield curve changes (i.e. separating it from credit events, or inflation anticipation in this case). If the answer is yes, you have interest rate risk." This is a bit tricky. What's your definit...
by ogd
Wed Jul 29, 2015 1:19 pm
Forum: Investing - Theory, News & General
Topic: Crazy Stock Investment Idea
Replies: 21
Views: 1967

Re: Crazy Stock Investment Idea

Well practically any smart-beta strategy (including weighting by how many board members in a company wear bow ties, or letting a monkey throw darts) does tend to produce a market-beating return (mostly explainable through known factor exposure) - as does a simple equal-weight portfolio http://www.q...
by ogd
Wed Jul 29, 2015 1:03 pm
Forum: Investing - Help with Personal Investments
Topic: Moving from TIPs fund to TIPs ladder???
Replies: 49
Views: 2925

Re: Moving from TIPs fund to TIPs ladder???

We do call this [ what I called opportunity "risk" ] interest rate risk. It's exactly the same thing. The same $X hit to your bottom line as if you'd marked to market, the very real chance you might underperform cash ... because of rising interest rates. (underline added) Ogd, we don't di...
by ogd
Wed Jul 29, 2015 12:01 pm
Forum: Investing - Theory, News & General
Topic: Crazy Stock Investment Idea
Replies: 21
Views: 1967

Re: Crazy Stock Investment Idea

I don't really expect it to mess up, but it's still a bad proposition. You will probably make the returns of the market (perhaps with a value bent). However, you will do this with more risk because of the lower diversification, until you accumulate a lot of different stocks. Which means that on a ri...

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