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Re: Short or Intermediate Bond Funds?

You can combine two bond funds to get a duration of about four years. Some consider that to be a good balance between inflation risk and reinvestment risk.
by pascalwager
Fri Apr 24, 2015 12:55 am
 
Forum: Investing - Theory, News & General
Topic: Short or Intermediate Bond Funds?
Replies: 2
Views: 374

Re: Age in Bonds Poll

At age 72 I'm still somewhat in the accumulation stage, but mainly adding to HY savings. My stocks are at about 84% of portfolio.
by pascalwager
Thu Apr 23, 2015 11:46 am
 
Forum: Investing - Theory, News & General
Topic: Age in Bonds Poll
Replies: 71
Views: 3177

Re: "How much of your portfolio is in index funds, and why?"

My index funds (VG TSM and TISM) comprise 34% of my portfolio. The rest is DFA stock funds, I-Bonds, bond funds, CDs, and cash.
by pascalwager
Thu Apr 23, 2015 2:02 am
 
Forum: Investing - Theory, News & General
Topic: "How much of your portfolio is in index funds, and why?"
Replies: 56
Views: 4838

Re: David Booth interviews Eugene Fama

After re-listening a few times, Fama referred specifically to small company funds as being a problem (time mark 46:11). I liked his comments about paper writing: keep it as simple as possible. Put all of the simple stuff in the beginning and the technical at the end to hold the reader's attention as...
by pascalwager
Wed Apr 22, 2015 12:53 pm
 
Forum: Investing - Theory, News & General
Topic: David Booth interviews Eugene Fama
Replies: 10
Views: 1531

Re: David Booth interviews Eugene Fama

by robert88 » Mon Apr 20, 2015 6:32 pm pascalwager wrote: Here, Fama says that indexing is stupid. But previously, he has said that the average investor should invest in the total market. The DFA website refers to their Fama-influenced core funds as total market funds, holding all of the companies ...
by pascalwager
Mon Apr 20, 2015 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: David Booth interviews Eugene Fama
Replies: 10
Views: 1531

Re: David Booth interviews Eugene Fama

Here, Fama says that indexing is stupid. But previously, he has said that the average investor should invest in the total market. The DFA website refers to their Fama-influenced core funds as total market funds, holding all of the companies in the market but not by capitalization, and internally til...
by pascalwager
Mon Apr 20, 2015 3:01 pm
 
Forum: Investing - Theory, News & General
Topic: David Booth interviews Eugene Fama
Replies: 10
Views: 1531

Re: I and EE Bonds - What will the new rate be?

The current variable rate is 1.48% for I-Bonds. Why would a 0.00% new variable rate be expected?
by pascalwager
Thu Apr 16, 2015 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: I and EE Bonds - What will the new rate be?
Replies: 18
Views: 2186

Re: How much riskier are munis than treasuries?

Compared to Treasuries, munis reduce the diversification power of fixed income because of credit and call risk. I don't use munis (or corporates). I take my risks in equities, not fixed income.
by pascalwager
Thu Apr 16, 2015 1:56 am
 
Forum: Investing - Theory, News & General
Topic: How much riskier are munis than treasuries?
Replies: 32
Views: 3817

Re: Inflation Protection [(Morningstar article)]

In my area some public employees with collective bargaining have COLA, but with a cap of 2 to 3%, typically.
by pascalwager
Sat Apr 11, 2015 12:50 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation Protection [(Morningstar article)]
Replies: 7
Views: 1179

Re: Warren Buffett Financial Advisor

Simply, it's a recommendation by Buffett to invest primarily in the indexed American stock market provided you have a long time horizon (20 to 30 years) and purchase shares over an extended period.
by pascalwager
Fri Apr 10, 2015 12:07 pm
 
Forum: Investing - Theory, News & General
Topic: Warren Buffett Financial Advisor
Replies: 26
Views: 4299

Re: Withdrawing from balanced funds when stocks are down

dbr wrote:
No less a luminary than Larry Swedroe has supposedly stated that he would follow a strategy of rebalancing out of stocks when they are up but not into stocks when they are down.

I recall Bill Bernstein saying the same thing--for retirees.
by pascalwager
Wed Apr 08, 2015 7:59 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing from balanced funds when stocks are down
Replies: 30
Views: 1649

Re: Warren Buffett Financial Advisor

After rereading a few times, Buffett is mainly saying that putting your money in a bank account is far riskier than putting it in an index fund. I notice that 25% of Berkshire Hathaway capital structure is corporate bonds issued by the company. If Buffett is against owning bonds, who does he think s...
by pascalwager
Wed Apr 08, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Warren Buffett Financial Advisor
Replies: 26
Views: 4299

Re: Why bonds?

Postby z3r0c00l » Tue Apr 07, 2015 6:13 am pascalwager wrote: Warren Buffett considers bonds to be far riskier than stocks. With that in mind, I prefer to own only stock funds, I-Bonds, and bank savings/CDs. So two kinds of bonds and stocks? No. In general, bonds are not even part of my eligible un...
by pascalwager
Tue Apr 07, 2015 1:01 pm
 
Forum: Investing - Theory, News & General
Topic: Why bonds?
Replies: 13
Views: 1524

Re: Why bonds?

Warren Buffett considers bonds to be far riskier than stocks. With that in mind, I prefer to own only stock funds, I-Bonds, and bank savings/CDs.
by pascalwager
Tue Apr 07, 2015 2:16 am
 
Forum: Investing - Theory, News & General
Topic: Why bonds?
Replies: 13
Views: 1524

Re: Warren Buffett Financial Advisor

I'm holding 70/30 asset allocation right now, and currently have enough in my bond fund to feel secure if things really went down. With 10 to 15 years before retirement, I'm really starting to think that I should just add to my stocks and not my bonds. Mr. Buffett would strongly disagree with your ...
by pascalwager
Tue Apr 07, 2015 2:00 am
 
Forum: Investing - Theory, News & General
Topic: Warren Buffett Financial Advisor
Replies: 26
Views: 4299

Re: Switching 40% of my portfolio to bonds: just can't do it

Even at age 72 and retired, I share your aversion to exchanging stocks for bonds. Since 1995, I've had about no more than 17% (short-term) bonds, and more recently that 17% is mostly I-Bonds and bank savings/CDs. I also remind myself that Warren Buffet considers bonds to be far riskier than stocks (...
by pascalwager
Mon Apr 06, 2015 9:24 pm
 
Forum: Investing - Theory, News & General
Topic: Switching 40% of my portfolio to bonds: just can't do it.
Replies: 52
Views: 7055

Re: The Detriments of Rebalancing

Postby AllYouNeedIsLove » Sat Apr 04, 2015 8:30 am To my knowledge there are many experts who believe in allowing the AA to drift with the course of the markets. I am sure there are some with this strategy specified in their IPS. I can't recall any passive-investing-type authors who recommend letti...
by pascalwager
Sat Apr 04, 2015 11:40 am
 
Forum: Investing - Theory, News & General
Topic: The Detriments of Rebalancing
Replies: 67
Views: 5776

Re: The Detriments of Rebalancing

If you don't rebalance, how do you maintain the asset allocation required in your Investment Policy Statement?
by pascalwager
Sat Apr 04, 2015 1:15 am
 
Forum: Investing - Theory, News & General
Topic: The Detriments of Rebalancing
Replies: 67
Views: 5776

Re: Vanguard Tax-Exempt Bond Index Fund vs Savings Account

Open a 1% APY bank (online) savings account and also keep your checking account. You can move money from savings to checking up to six times per statement period with no additional fees. Allow three days for moving money, so does require some planning. This is what I did last year, but should have d...
by pascalwager
Fri Apr 03, 2015 3:38 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Tax-Exempt Bond Index Fund vs Savings Account
Replies: 7
Views: 1785

Re: I Bonds - now or later in the year?

I buy on January 1st to minimize the 5-year maturity date.
by pascalwager
Sat Mar 28, 2015 1:40 am
 
Forum: Investing - Theory, News & General
Topic: I Bonds - now or later in the year?
Replies: 39
Views: 3725

Re: Vanguard's Week In Review

by Taylor Larimore » Fri Mar 27, 2015 6:11 pm EyeDee: Vanguard's "Eye on the Economy" is one e-mail I'll not bother reading. I have learned that economic forecasts are wrong as often as right. Economic articles are mostly wasted time for me. Long ago I made a decision to simply own total ...
by pascalwager
Sat Mar 28, 2015 1:31 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's Week In Review
Replies: 19
Views: 2134

Re: Medium bond vs short + long bonds & rebalance

What about the Swedroe strategy of holding long term treasuries because they are more negatively correlated with equities and will provide a better ballast during market crashes? In Right Financial Plan , Larry says that short-term bonds are less correlated to equities, not long-term bonds. That's ...
by pascalwager
Tue Mar 24, 2015 4:47 pm
 
Forum: Investing - Theory, News & General
Topic: Medium bond vs short + long bonds & rebalance
Replies: 9
Views: 1253

Re: How do you invest your taxable account?

by zaboomafoozarg » Fri Mar 20, 2015 4:43 am

I only buy VTSAX, VTIAX and I Bonds in my taxable accounts.


Same here, except also use HY Savings (1% APY) and CDs.
by pascalwager
Fri Mar 20, 2015 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: How do you invest your taxable account?
Replies: 69
Views: 7603

Re: Vanguard variable annuity

A low-cost VA can make sense if you don't have any other tax-sheltered space for a REIT fund.

I have a large DFA VA which was recommended by my advisor 20 years ago (I was maxed out in deferred comp/ROTH), but I have long since realized that it isn't efficient.
by pascalwager
Mon Mar 16, 2015 3:12 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard variable annuity
Replies: 7
Views: 767

Re: S & P 500 index fund vs S&P 500 Growth fund

I went to M* and looked at each fund's holding style. VOOG has much more large growth than VOO and much less large value. I guess large growth was doing better than large value during the period you looked at, but this isn't relevant to long-term investing.
by pascalwager
Sun Mar 08, 2015 11:25 pm
 
Forum: Investing - Theory, News & General
Topic: S & P 500 index fund vs S&P 500 Growth fund
Replies: 7
Views: 826

Re: Backpedaling: Rising Equity Allocation During Retiremen

Pfau writes: Do remember that ultimately, this whole discussion is about appropriate default glidepaths for those who have very little interest in investments… what should target date funds do post-retirement? Those with greater sophistication should be determining asset allocation based on their fu...
by pascalwager
Fri Mar 06, 2015 2:48 pm
 
Forum: Investing - Theory, News & General
Topic: Backpedaling: Rising Equity Allocation During Retirement
Replies: 38
Views: 3885

Re: Tax free municipal or money market

An online HY savings account (1% interest) would seem to be a better choice than a MM fund. Then the choice would be between the muni fund and the savings account.
by pascalwager
Thu Mar 05, 2015 2:38 am
 
Forum: Investing - Theory, News & General
Topic: Tax free municipal or money market
Replies: 2
Views: 580

Re: International increase in Target Retirement & LifeStrate

Postby anil686 » Wed Mar 04, 2015 3:29 pm What bothers me most about this are the following points: a) VG says costs investing internationally have come down. But this is a slight distortion - they have come down by a significant percentage but very little overall. TISM costs have gone from 0.17% t...
by pascalwager
Wed Mar 04, 2015 4:46 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 233
Views: 20655

Re: Poll: Increasing international equities

I started out at 49/51 (US/int'l) and over the course of about 17 years gradually arrived at 56/44 three years ago when I then permanently went to 50/50.

Perhaps I'm tempted to welcome the VG move in the spirit of "misery loves company".
by pascalwager
Wed Mar 04, 2015 3:43 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Increasing international equities
Replies: 58
Views: 4027

Re: 22 Schwab OneSource ETF used in Intelligent Portfolios

I'd prefer to have my cash in an online bank at 1% APY.
by pascalwager
Mon Mar 02, 2015 3:41 pm
 
Forum: Investing - Theory, News & General
Topic: 22 Schwab OneSource ETF used in Intelligent Portfolios
Replies: 25
Views: 3176

Re: International increase in Target Retirement & LifeStrate

Post by abuss368 » Fri Feb 27, 2015 12:41 am I wrote this exact post a year or two ago that 40% was right around the corner. It was obvious. No surprise here. Next is 50% US & 50% International. Good call abuss, I immediately recalled your post when I found out about the changes. Many of us rec...
by pascalwager
Sun Mar 01, 2015 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 233
Views: 20655

Re: Best Use of TIPS Fund in Retirement

The problem with a TIPS fund for a retiree is liquidity risk showing up during a financial crisis. That's why Bill Bernstein recommends a TIPS ladder.
by pascalwager
Sun Feb 22, 2015 1:19 am
 
Forum: Investing - Theory, News & General
Topic: Best Use of TIPS Fund in Retirement
Replies: 17
Views: 1686

Re: Why don't I see more people arguing for a world portfoli

A world portfolio weighting doesn't consider currency risk and fund management foreign trading costs. Also, ideally, the individual foreign countries should be weighted not on relative capitalization, but also consider foreign investor risks and taxation. The current world portfolio of 50/50 US/int'...
by pascalwager
Fri Feb 20, 2015 9:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why don't I see more people arguing for a world portfolio?
Replies: 41
Views: 3001

Re: Financial Advisor, worth it? - McAdam

An advisor isn't necessary if you can read the Wiki.
by pascalwager
Fri Feb 20, 2015 9:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Financial Advisor, worth it? - McAdam
Replies: 26
Views: 2126

Re: Beyond the Total Int'l Stock Index

TISM is the default portfolio, but not ideal. It's main virtue is diversification. A better portfolio would weight the individual countries based on foreign investor treatment: taxation, risk of appropriation, degree of home bias, etc. Also, different portfolios for taxable and non-taxable investors...
by pascalwager
Fri Feb 20, 2015 9:22 pm
 
Forum: Investing - Theory, News & General
Topic: Beyond the Total Int'l Stock Index
Replies: 4
Views: 922

Re: Long term bonds in VBTLX/VBMFX

If long-term bonds are a rising proportion of the TBM fund, then this may be due to more investors stretching for yield (and effecting the Barclays TBM index) by buying long-term bonds. So the increasing duration of TBM may be a result of poor investor behavior and TBM investors become a captive of ...
by pascalwager
Mon Feb 16, 2015 6:42 pm
 
Forum: Investing - Theory, News & General
Topic: Long term bonds in VBTLX/VBMFX
Replies: 12
Views: 880

Re: CWB verses BND

Larry Swedroe advises against holding convertible bonds in his book Winning Bond Strategy (page 140).
by pascalwager
Sun Feb 15, 2015 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: CWB verses BND [Barclays Convertible Securities ETF]
Replies: 6
Views: 496

Re: Social Security as a bond?

What I find deeply troubling is the idea that thinking of Social Security as a bond justifies a change in recommended stock allocation for retirees. If Social Security were some new innovation of the 1990s, then yes, its introduction would justify a change in recommended stock allocation. Mr. Bogle...
by pascalwager
Fri Feb 13, 2015 3:24 am
 
Forum: Investing - Theory, News & General
Topic: Social Security as a bond?
Replies: 47
Views: 3363

Re: Vanguard Ultra-Short-Term Bond Fund now available

For comparison, the DFA ultra-short bond fund (DFIHX), duration = 0.93 years, has an SEC yield = 0.33%. VMMXX ($137 billion assets) is still purchased at yield = 0.01%, so Vanguard may believe that another group might invest in a riskier ultra-short fund to get even more yield! Personally, I'll prob...
by pascalwager
Wed Feb 11, 2015 3:10 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund now available
Replies: 41
Views: 5526

Re: When 60/40 just isn't appropriate

I can't find the quote right now but Harry Markowitz is on record somewhere as saying that he "ought" to calculate the "covariances" and derive the efficient frontier but that he doesn't, but just puts half of his portfolio in stocks and half in bonds. I've seen this quote too. ...
by pascalwager
Mon Feb 09, 2015 4:19 pm
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13793

Re: When 60/40 just isn't appropriate

Bernstein makes a credible case for owning bonds, but not for any particular percentage allocation, including 40%.
by pascalwager
Sun Feb 08, 2015 1:44 am
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13793

Re: FI: Total Bond Market or Intermediate Fund?

This is my retiree low risk bucket:

    IT Treasury bond fund
    3-year CD ladder
    I Bonds
    HY Savings
My first priority is to annually buy an I Bond.
by pascalwager
Sun Feb 08, 2015 1:34 am
 
Forum: Investing - Theory, News & General
Topic: FI: Total Bond Market or Intermediate Fund?
Replies: 19
Views: 2654

Re: Vanguard Total Bond - Not reccomended by Swedroe??

"Don't invest in something you don't understand."

I certainly don't understand MBS securities, and that's a basic investment reason for me to avoid TBM. Rick van Ness, who also avoids TBM, says the same thing in Why Bother with Bonds?
by pascalwager
Sat Feb 07, 2015 3:02 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Total Bond - Not reccomended by Swedroe??
Replies: 23
Views: 3924

Re: Why Do People Invest in Certain VG Funds?

By definition , the market is neutral with respect to growth/value. The average investor should use a total market approach (Eugene Fama, John Cochrane) and the small cap premium seems to be minimal at best; but you still need some small caps for diversification. If you're not average, if you're a ...
by pascalwager
Thu Feb 05, 2015 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Why Do People Invest in Certain VG Funds?
Replies: 15
Views: 2292

Re: Buy High, Sell Low : Avoid Market Timing

For every investor who follows a value approach, there must be an investor who follows a growth strategy or buys high and sells low because he is exposed to the value risk at work or otherwise averse to the value risk (John Cochrane).
by pascalwager
Mon Feb 02, 2015 1:33 am
 
Forum: Investing - Theory, News & General
Topic: Buy High, Sell Low : Avoid Market Timing
Replies: 32
Views: 3325

Re: Is this the "new cash"?

The MM background info was interesting. I'd had no idea.
by pascalwager
Sat Jan 31, 2015 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: Is this the "new cash"?
Replies: 15
Views: 2647

Re: The lowest stock allocation you plan to stay with

Retired, 72. 85% stocks right now. May slowly take it down to 80%, but I'll need to overcome an aversion to selling stocks and buying bonds.
by pascalwager
Fri Jan 30, 2015 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 79
Views: 4654

Re: Vanguard's government bond index funds

I use Vanguard Intermediate-Term Government Bond Index Fund Admiral Shares (VSIGX) because: • It's a passively managed index fund. The Vanguard Treasury funds are actively managed. • At investments between $10k and $50k, the expense ratio is lower. • Though I'm not really interested in the Agency s...
by pascalwager
Fri Jan 30, 2015 1:26 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 2170

Re: Vanguard's government bond index funds

The three Vg Treasury bond funds list about 5% in MBS, so I checked the holdings. I divided the MBS holdings (a single security) by the fund NAV and got a very small amount, 0.00068% for the intermediate fund. I'm going to check out this discrepancy with Vg. Personally, I would prefer little or no M...
by pascalwager
Thu Jan 29, 2015 2:21 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 2170

Re: Vanguard's government bond index funds

Postby saltycaper » Wed Jan 28, 2015 8:54 pm pascalwager wrote: I prefer to avoid GSE debt (credit risk and undesirable options), so I would not wish to purchase the Vg Govt Bond Index Funds. I buy only straight Treasury bond funds with no credit risk. David Swensen discusses this issue in Unconven...
by pascalwager
Thu Jan 29, 2015 1:47 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard's government bond index funds
Replies: 17
Views: 2170
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