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Florida Prepaid Savings Plan Now an Awful Deal

For much of its history, the Florida prepaid tuition program was very popular because it allowed a parent to purchase tomorrow’s tuition at today’s rates. Since about 2008, however, the cost of a prepaid tuition plan in Florida has become significantly more than the current cost of tuition. These ar...
by tms
Tue Jan 21, 2014 4:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Florida Prepaid Savings Plan Now an Awful Deal
Replies: 0
Views: 326

Re: Michael Edesess on Delaying Social Security

This is a very useful discussion, and I'd particularly like to thank those who have pointed out that although the increased SS payments through delay are in the aggregate actuarially fair, they're not demographically neutral. The unmarried male who decides to delay is not likely to get, on average,...
by tms
Thu Oct 03, 2013 5:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Michael Edesess on Delaying Social Security
Replies: 36
Views: 2565

Michael Edesess on Delaying Social Security

In an otherwise decent column on William Bernstein's new book "Deep Risk", Michael Edesess writes: A second quibble is with his recommendation to “spend your nest egg down on living expenses until age 70 so as to obtain the world’s cheapest and best inflation-adjusted annuity: the 8% per y...
by tms
Thu Oct 03, 2013 1:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Michael Edesess on Delaying Social Security
Replies: 36
Views: 2565

The Risk Shows Up? Pimco, BlackRock Seek to Bar Mtg Seizures

I have no idea how significant this is, but this story illustrates how all of the risk management tools in the world can't deal with the events that are unpredictable. http://mobile.bloomberg.com/news/2013-08-07/bondholders-sue-california-city-to-block-mortgage-seizures-1-.html?cmpid=#disqus-tab Pac...
by tms
Thu Aug 08, 2013 12:33 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk Shows Up? Pimco, BlackRock Seek to Bar Mtg Seizures
Replies: 16
Views: 1314

Re: Avoiding RMD's with 401K after age 70 1/2

RMDs are generally not required if still employed, even part time, at 70.5+ (never seen one that was required, but still used the word "generally"). With the exception being more than 5% owner, as mentioned already. Assuming the plan allows for rollovers, moving the 403b into the 401k wou...
by tms
Tue Jul 02, 2013 12:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Avoiding RMD's with 401K after age 70 1/2
Replies: 18
Views: 3188

Re: Avoiding RMD's with 401K after age 70 1/2

Watty wrote:Depending on the amounts and if he is not already maxing out the 401K then another option is to just increase the payroll deductions to offset the RMD..


This is an excellent idea.
by tms
Tue Jul 02, 2013 12:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Avoiding RMD's with 401K after age 70 1/2
Replies: 18
Views: 3188

Re: Avoiding RMD's with 401K after age 70 1/2

ourbrooks wrote:This is true even if you are still employed and still contributing to the plan.


If you are participating in a 401K, more often than not, the plan documents say that RMD's are required at age 70 1/2, or after separation from service, whichever is later.
by tms
Tue Jul 02, 2013 11:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Avoiding RMD's with 401K after age 70 1/2
Replies: 18
Views: 3188

Avoiding RMD's with 401K after age 70 1/2

A person turns 70 1/2 this year, is employed and is participating in a 401K. This person also has an old 403B from a former employer. He will need to take an RMD from the 403B for 2013. But the question is, if he rolls the 403B into the 401K after taking the RMD, and assuming he continues working, c...
by tms
Tue Jul 02, 2013 11:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Avoiding RMD's with 401K after age 70 1/2
Replies: 18
Views: 3188

Re: IRS comments on backdoor Roth IRA

I'm not sure why it would be an issue. There are taxpayers choosing to do Roth conversions in part because it will allow them to do the backdoor. It would be very unfair to take it away after a taxpayer has paid the tax to put them in a position to use the backdoor strategy.
by tms
Mon Apr 09, 2012 9:06 pm
 
Forum: Investing - Theory, News & General
Topic: IRS comments on backdoor Roth IRA
Replies: 13
Views: 2881

Re: Reform/Abolish the Employer 401k

So you like the TSP but you hate 401Ks? Any 401K could be setup to look identical to the TSP. The problem is that administering a 401K plan is expensive for small employers, so employers are left with 1) paying for the administrative costs themselves, 2) passing on those costs to the employees, or 3...
by tms
Fri Apr 06, 2012 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: Reform/Abolish the Employer 401k
Replies: 33
Views: 3891

Re: You can time the market?

I think the only implication that you can draw from that chart is that for those years where capital gains were at their highest point, asset prices had peaked. So most stock sales were going to generate capital gains and therefore capital gains taxes. It doesn't tell you whether or not people were ...
by tms
Wed Mar 21, 2012 3:22 pm
 
Forum: Investing - Theory, News & General
Topic: You can time the market?
Replies: 15
Views: 1177

Re: future of small value "effect"?

The way I think about it is as follows: If the reason for small-cap value effect is a risk story, then it is not a free lunch, and expected returns of small cap value would continue to be higher regardless. If the reason for the small-cap value effect is a behavioral story (the result of investors o...
by tms
Thu Mar 15, 2012 6:02 pm
 
Forum: Investing - Theory, News & General
Topic: future of small value "effect"?
Replies: 230
Views: 9016

Re: Portfolio Solutions

burgrat wrote:I am considering them as well. My question is that once they set up your portfolio, how often do they review it?


They review client portfolios everyday.
by tms
Sun Mar 11, 2012 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: Portfolio Solutions
Replies: 52
Views: 4673

Re: Portfolio Solutions

LazyNihilist wrote:Just curious about Portfolio Solutions, Since Vanguard has some of the best Index funds, why hold them at Schwabb? Why not hold them at Vanguard?


Portfolio Solutions is an RIA firm, and Vanguard does not provide clearing/custody services to RIA firms. Schwab does.
by tms
Sun Mar 11, 2012 4:32 pm
 
Forum: Investing - Theory, News & General
Topic: Portfolio Solutions
Replies: 52
Views: 4673

Re: The Total Economy Portfolio

I like it. Thanks for the insight Rick.
by tms
Thu Mar 01, 2012 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: The Total Economy Portfolio
Replies: 154
Views: 15472

Re: "It probably won't happen" isn't good enough

I don't have the 30 year return on Japanese stocks handy, but I am pretty sure the real return over the 30 years is negative. I do have the Japanese equity risk premium over the last 25 years (1987-2011) - Japanese stocks compared to Japanese ST government bills. The equity risk premium for Japanes...
by tms
Thu Mar 01, 2012 3:27 pm
 
Forum: Investing - Theory, News & General
Topic: "It probably won't happen" isn't good enough
Replies: 126
Views: 8246

Re: "It probably won't happen" isn't good enough

So it’s really a very different paradigm that says, get away from this notion of “60/40 and diversify across all asset classes.”


Most investors never got to that point in the first place.
by tms
Thu Mar 01, 2012 3:15 pm
 
Forum: Investing - Theory, News & General
Topic: "It probably won't happen" isn't good enough
Replies: 126
Views: 8246

Re: Rick Ferri 1st Quarter Conference Call

Thanks Rick. I agree that things are improving, although I am skeptical about evaluating the health of an economy by adding up G+I+C+(E-I). I think part of what is happening is that those excess resources that had been over committed to home building and mortgage lending and finance are finally be d...
by tms
Fri Feb 17, 2012 4:46 pm
 
Forum: Investing - Theory, News & General
Topic: Rick Ferri 1st Quarter Conference Call
Replies: 10
Views: 1675

Re: 'advisory' fees for DFA 401k

My company has about $6.5M with an advisory company that charges ~.56 on top of DFA fees as management costs. They only offer 5 portfolio's and no advisory services to our staff. Is this typical? We are trying to decide if it's worth shopping around. We generally like DFA (although not religiously)...
by tms
Thu Feb 16, 2012 6:58 pm
 
Forum: Investing - Theory, News & General
Topic: 'advisory' fees for DFA 401k
Replies: 3
Views: 501

Contributing to both a Roth 401K and a Roth IRA

Question: can you contribute maximum to a Roth 401K (16,500) and a Roth IRA (5,000)?
by tms
Tue Feb 07, 2012 7:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Contributing to both a Roth 401K and a Roth IRA
Replies: 4
Views: 404

Re: Gene Fama on Econtalk

His argument is that the only thing that explains a drop in all asset prices - real estate, stocks, commodities - is a recession. The best argument against this is probably the timing.
by tms
Wed Feb 01, 2012 4:14 pm
 
Forum: Investing - Theory, News & General
Topic: Gene Fama on Econtalk
Replies: 12
Views: 2399

Re: Gene Fama on Econtalk

I am an Econtalk addict. In the last 15 months or so, I have listened to more than 200 episodes.
by tms
Tue Jan 31, 2012 1:30 pm
 
Forum: Investing - Theory, News & General
Topic: Gene Fama on Econtalk
Replies: 12
Views: 2399

Gene Fama on Econtalk

Released this morning, here is an interview with Gene Fama on the weekly podcast Econtalk. The the first 15 minutes he discusses the efficient market theory and its implications for investors In the rest of the interview, he discusses his unconventional view of the financial crisis, as well as his v...
by tms
Mon Jan 30, 2012 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Gene Fama on Econtalk
Replies: 12
Views: 2399

Re: Nassim Taleb interview on upcoming book (01/16/2012)

There is an Econtalk episode with Art De Vany. The first half is on steroids in baseball, and the second half is about his idea on diet and exercise.

Here is the link.

http://www.econtalk.org/archives/2010/0 ... _ster.html
by tms
Fri Jan 20, 2012 2:57 pm
 
Forum: Investing - Theory, News & General
Topic: Nassim Taleb interview on upcoming book (01/16/2012)
Replies: 13
Views: 1800

Re: Nassim Taleb interview on upcoming book (01/16/2012)

I listened to it the other day. Great interview. I love how he described his life's work: "the study of what to do when you don't know what's going on."

Apparently, Gene Fama is going to be a guest in the next several weeks.
by tms
Thu Jan 19, 2012 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: Nassim Taleb interview on upcoming book (01/16/2012)
Replies: 13
Views: 1800

Re: What is the single most important investing belief?

For me it all boils down to this... over an investing lifetime, costs matter.


Hmmm, someone can get their costs down to zero by only putting money in CD's, and save those 10 or 20 basis points that Vanguard charges.
by tms
Thu Jan 05, 2012 10:54 pm
 
Forum: Investing - Theory, News & General
Topic: What is the single most important investing belief?
Replies: 128
Views: 8428

Hurricane forecasters admit their models are worthless

It would be nice to see this kind of integrity in the economic forecasting arena: OTTAWA — Two top U.S. hurricane forecasters, famous across Deep South hurricane country, are quitting the practice of making a seasonal forecast in December because it doesn’t work. William Gray and Phil Klotzbach say ...
by tms
Tue Dec 13, 2011 6:46 pm
 
Forum: Investing - Theory, News & General
Topic: Hurricane forecasters admit their models are worthless
Replies: 9
Views: 835

Arrends: "There is no wider social purpose"

In this column http://www.marketwatch.com/story/mf-globals-risk-mismanagement-2011-11-01?pagenumber=1 , Brett Arends makes the following comment about Wall Street firms: But what are they actually doing? They’re just playing poker against each other. They’re engaged in an “industry” that produces ne...
by tms
Wed Nov 02, 2011 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Arrends: "There is no wider social purpose"
Replies: 18
Views: 2031

Not an expert, but my take is that Wall Street firms are very good at providing M&A advisory services, securities underwriting services, and making markets. Those services create a lot of value. But as you explain, with the exception of maybe market making, that seems to be a small part of what ...
by tms
Mon Oct 10, 2011 5:04 pm
 
Forum: Investing - Theory, News & General
Topic: Is Wall Street mostly worthless??
Replies: 13
Views: 2049

From a business perspective, the Netflix debacle will become good fodder for case studies on management decision-making. If it's affecting customers' lives, they need to get out and about more. There's a lot of living to do that is not connected with watching a screen. It is a business case waiting...
by tms
Mon Oct 10, 2011 4:14 pm
 
Forum: Personal Consumer Issues
Topic: Netlfix changes tune, will not split off DVD business.
Replies: 33
Views: 2787

Put this in the category of an unpredictable event that makes analyst forecasts worthless. While I would agree wrt the drop in the stock price - I just ain't going to attempt to defend the wall street lemmings, I do not agree that the reaction of the customers was unpredictable. . Just to clarify, ...
by tms
Mon Oct 10, 2011 4:13 pm
 
Forum: Personal Consumer Issues
Topic: Netlfix changes tune, will not split off DVD business.
Replies: 33
Views: 2787

Put this in the category of an unpredictable event that makes analyst forecasts worthless.
by tms
Mon Oct 10, 2011 2:51 pm
 
Forum: Personal Consumer Issues
Topic: Netlfix changes tune, will not split off DVD business.
Replies: 33
Views: 2787

Yahoo Sports: Bad Investments by Star Athletes

"From pistachio farms and bowling alleys to private jets and Ponzi schemes, these bad investments sunk fortunes and fame for many of the following star athletes:"


http://www.thepostgame.com/blog/list/20 ... r-athletes
by tms
Fri Oct 07, 2011 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: Yahoo Sports: Bad Investments by Star Athletes
Replies: 3
Views: 664

Sammy_M wrote:Thanks. Certainly one to watch.

With a core type approach, it's interesting that they're so light on mid-caps, but perhaps they're still building?

Large-Cap 44.2
Mid-Cap 9.24
Small-Cap 46.56



I was struck by that as well.That's not a tilt...that's a barbell.
by tms
Fri Sep 23, 2011 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: New ETF Tilts to Small Value stocks
Replies: 27
Views: 8421

FafnerMorell wrote:Where do you live?


Let me clarify,there is not really a cat 5 storm off the coast. It's just an analogy.
by tms
Thu Sep 22, 2011 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: An analogy: Hurricanes and investing
Replies: 8
Views: 558

An analogy: Hurricanes and investing

Imagine that a category 5 hurricane is three days away from landfall and the models show that it is coming right for my home. My best financial move would be to not own a home. The problem is, I own a home, and I can’t sell it, except at a huge discount, because everyone knows the storm is out there...
by tms
Thu Sep 22, 2011 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: An analogy: Hurricanes and investing
Replies: 8
Views: 558

compounding or exponential growth can not last forever. For instance, in my opinion, there IS a limit to growth in population. We can have the world population grow from 1 billion to 2 billion to 4 billion and then to 8 billion. But eventually there will be some force to determine that no more can ...
by tms
Thu Sep 22, 2011 3:04 pm
 
Forum: Investing - Theory, News & General
Topic: The Magic of Compounding
Replies: 21
Views: 2649

European credit markets freezing?

BNP Paribas (BNP) SA and Societe Generale (GLE) have stopped lending to aircraft purchasers because of difficulties in obtaining dollar refinancing, Les Echos reported, without saying where it got the information. Airbus SAS may be affected more than Boeing Co. (BA), which has easier access to cred...
by tms
Thu Sep 22, 2011 9:31 am
 
Forum: Investing - Theory, News & General
Topic: European credit markets freezing?
Replies: 3
Views: 650

Re: "Efficient" does not mean "correct"

... The efficient market hypothesis in no way implies that prices are correct, that events can be predicted, or that there is no uncertainty or risk. It's quite the opposite. It acknowledges that there are all kinds of uncertainties, but that we can reasonably assume that risk should be reflected w...
by tms
Tue Sep 20, 2011 9:33 pm
 
Forum: Investing - Theory, News & General
Topic: "Efficient" does not mean "correct"
Replies: 30
Views: 1765

The article never uses the word "correct". Fair enough. But he says that there are inefficiencies and "therefore" financial outcomes are not "certain". The implication is that efficiency means certainty. But maybe I am reading too much into this particular article.
by tms
Tue Sep 20, 2011 4:29 pm
 
Forum: Investing - Theory, News & General
Topic: "Efficient" does not mean "correct"
Replies: 30
Views: 1765

I really don't think he is confusing efficient and correct. He really just rejecting the use of certain types of tools that purport to provide an understanding of economics: Austrian economists contend that testability in economics is virtually impossible since it relies on human actors who cannot ...
by tms
Tue Sep 20, 2011 3:32 pm
 
Forum: Investing - Theory, News & General
Topic: "Efficient" does not mean "correct"
Replies: 30
Views: 1765

"Efficient" does not mean "correct"

The paper below was released by Deuthsce Bank and is entitled, “I'm an Austrian in economics". http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000278552/%27I%27m+an+Austrian+in+economics%27.pdf;jsessionid=9BB5CE7CA591943858D981631EECBC73.srv12-dbr-de There is a lot in the paper t...
by tms
Tue Sep 20, 2011 2:06 pm
 
Forum: Investing - Theory, News & General
Topic: "Efficient" does not mean "correct"
Replies: 30
Views: 1765

Re: 2011 income limit conversions

We recently visited our advisor & she recommended paying all our 2010 conversion tax this year (2011),rather than splitting it between 2010 & 2011. Wait...you can do that? I thought that, once you had filed your 2010 tax returns electing to split any Roth conversion income between 2011 and ...
by tms
Tue Sep 20, 2011 12:35 pm
 
Forum: Investing - Theory, News & General
Topic: 2011 Roth Conversion Income Limit
Replies: 14
Views: 8808

Re: 2011 income limit conversions

We recently visited our advisor & she recommended paying all our 2010 conversion tax this year (2011),rather than splitting it between 2010 & 2011. Wait...you can do that? I thought that, once you had filed your 2010 tax returns electing to split any Roth conversion income between 2011 and ...
by tms
Tue Sep 20, 2011 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: 2011 Roth Conversion Income Limit
Replies: 14
Views: 8808

Even when initially successful, active management sows the seeds of its own destruction. You say that like the best people from Goldman haven't left to run the most successful strategies at hedge funds free from onerous regulators and caps on compensation. I stand by that statement whether they hav...
by tms
Fri Sep 16, 2011 2:13 pm
 
Forum: Investing - Theory, News & General
Topic: How Goldman Sachs Lost One of Its Crown Jewels
Replies: 4
Views: 930

Even when initially successful, active management sows the seeds of its own destruction.
by tms
Fri Sep 16, 2011 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: How Goldman Sachs Lost One of Its Crown Jewels
Replies: 4
Views: 930

Let me try to explain the fallacy that your financial advisor has fallen into using an example. Imagine the economy consists of three companies, each roughly the same size. Company A pays no dividend and has a total return of 10% Company B pays a 4% dividend and has a total return of 9% Company C p...
by tms
Tue Aug 30, 2011 3:29 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Account for Plurality of Returns?
Replies: 72
Views: 6539

I found this thread: http://www.bogleheads.org/forum/viewtopic.php?t=80729&mrr=1313596605 And it implies that the benefit at age 70 when delaying benefits until age 70 should include the 4 years of COLA adjustments. Therefore, my calculation understates the benefit at age 70 - it should be about...
by tms
Fri Aug 26, 2011 11:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Question: Delayed SS credits and COLA
Replies: 2
Views: 446

Question: Delayed SS credits and COLA

I am trying to confirm how the delayed SS credits interact with COLA adjustments. Assume PIA at age 66 = 2000/month, and a 3% COLA. Below are the projected monthly benefits under the two scenarios. at age 66 at age 70 66 2,000 - 67 2,060 - 68 2,121 - 69 2,185 - 70 2,251 2,640 (1.32 times PIA at age ...
by tms
Fri Aug 26, 2011 10:52 am
 
Forum: Personal Finance (Not Investing)
Topic: Question: Delayed SS credits and COLA
Replies: 2
Views: 446

Re: ddb

This is the first I've heard of an "upside only" rebalancing strategy. Have you written about this before, and I've just missed it? Such a strategy would seem to eliminate some of the benefits of a more typical rebalancing strategy. Basically, you can never "buy low" unless addi...
by tms
Thu Aug 25, 2011 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: Minimizing fat tail risk w/ lower equity allocation - myth?
Replies: 110
Views: 12510
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