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Re: Market-on-close orders?

Let me try to clear some confusion. I am not asking about what retail investors investing in index funds or ETFs do nor am I asking what the difference is between the market close of an ETF and its NAV. The goal of an Index Fund is to accurately track its benchmark; up or down. If the manager of an ...
by troysapp
Tue Jul 15, 2014 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: Market-on-close orders?
Replies: 10
Views: 924

Market-on-close orders?

I've seen it said several times on this forum that it's best to place ETF and securities orders during the middle of the day. That is, not too close to either the market open or the market close. However, it's now my understanding that many index funds (Vanguard?) place "market-on-close" o...
by troysapp
Tue Jul 15, 2014 10:38 am
 
Forum: Investing - Theory, News & General
Topic: Market-on-close orders?
Replies: 10
Views: 924

Re: Taxes & Selling a high-fee mutual fund

Assuming you inherited the assets directly from the estate of a decedent, the tax cost basis should generally be the fair market value on the date of the decedent's death. Generally, advisory firms and/or custodians do not make the estate cost basis adjustment. As was previously posted, your gain co...
by troysapp
Sat Jul 12, 2014 8:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxes & Selling a high-fee mutual fund
Replies: 6
Views: 1127

Re: Family cabin [Estate] planning

I see situations similar to this fairly often. The best solution usually involves a partnership or trust (this sounds like more of a partnership situation, though). Partnership agreements generally cover things such as how capital calls are determined/made, ownership percentages, rules for getting o...
by troysapp
Sat Jul 12, 2014 7:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family cabin [Estate] planning
Replies: 25
Views: 1986

Re: What our company's 401k Advisor said about 1.5% Fees

Just came here to say that I occasionally work with small biz owner clients that oversee small-ish 401k plans. Every time I encounter a high cost small biz 401k plan I help them (pro bono) transition to Vanguard Retirement Plan Services (VRPS). VRPS will first prepare a proposal that clearly shows a...
by troysapp
Sat Jul 12, 2014 6:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: What our company's 401k Advisor said about 1.5% Fees
Replies: 113
Views: 15008

What is the role of preferred stocks in a portfolio, if any?

Hello All, I would very much to hear your thoughts about preferred stocks and how they should be used (or not) within a portfolio, if at all. Specifically, I recently encountered a retired person with the self-stated risk tolerance as very low. His broker placed him with approx 80% preferred energy ...
by troysapp
Tue May 13, 2014 3:42 pm
 
Forum: Investing - Theory, News & General
Topic: What is the role of preferred stocks in a portfolio, if any?
Replies: 10
Views: 853

Re: Is it okay to keep all your assets with one fund company

Larry, It seems the major critical piece you missed is who holds the underlying assets of mutual funds. You do state that "Mutual funds don't act as custodian of the assets. In the case of Buckingham's clients, their funds are held in custody at Fidelity, Schwab or TD Ameritrade.", but thi...
by troysapp
Tue May 06, 2014 11:55 am
 
Forum: Investing - Theory, News & General
Topic: Is it okay to keep all your assets with one fund company?
Replies: 48
Views: 5934

Re: Scary Parallel to 1928-29?

Thanks Cheese!
by troysapp
Fri Feb 14, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Scary Parallel to 1928-29?
Replies: 7
Views: 720

Scary Parallel to 1928-29?

I would love to hear the forum's thoughts on this article: http://www.ijreview.com/2014/02/114510-stock-market-telling-us-crash/.
by troysapp
Fri Feb 14, 2014 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: Scary Parallel to 1928-29?
Replies: 7
Views: 720

Re: How to tell who is bound to a fiduciary standard?

Richard, Thing is that a client can generally not bring action under the 1940 Advisers Act (I believe the only exception relates to fees). This applies in court or in arbitration. If there's no private right of action, as a practical matter it doesn't matter what's in the Act or rules. I tend to ag...
by troysapp
Fri Jan 31, 2014 5:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to tell who is bound to a fiduciary standard?
Replies: 57
Views: 4121

Re: How to tell who is bound to a fiduciary standard?

Richard, Thing is that a client can generally not bring action under the 1940 Advisers Act (I believe the only exception relates to fees). This applies in court or in arbitration. manwithnoname, Since we are discussing the Investment Adviser and not the Investment Company I believe that Rule 204A-1 ...
by troysapp
Thu Jan 30, 2014 6:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to tell who is bound to a fiduciary standard?
Replies: 57
Views: 4121

Re: How to tell who is bound to a fiduciary standard?

Let us not confuse the UPIA with the 1940 Investment Advisers Act. They simply are not the same thing. Neither is the definition of “fiduciary” necessarily the same nor do Investment Advisers need to have discretionary trading authority to have fiduciary obligations under the 1940 Act. Below is a pa...
by troysapp
Thu Jan 30, 2014 5:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to tell who is bound to a fiduciary standard?
Replies: 57
Views: 4121

Re: How to tell who is bound to a fiduciary standard?

Nisi, Not everyone at an RIA firm is an IAR, but from reading VAI's ADV Part 2 for "Ask a CFP" it would seem that anyone picking up the phone would be an IAR or equivalent. I say "equivalent" because not all states necessarily require IARs to formerly register (Minnesota, for ins...
by troysapp
Thu Jan 30, 2014 3:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to tell who is bound to a fiduciary standard?
Replies: 57
Views: 4121

Re: How to tell who is bound to a fiduciary standard?

Nisi, Just because Vanguard Advisers Inc doesn't say it's a fiduciary, doesn't mean that they aren't. Registered Investment Advisors and their Investment Advisor Representatives are regulated by the SEC (or state agency), and are considered “fiduciaries”. See: http://www.sec.gov/divisions/investment...
by troysapp
Thu Jan 30, 2014 1:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to tell who is bound to a fiduciary standard?
Replies: 57
Views: 4121

Re: How is bond interest computed?

When you buy bond fund shares the interest will begin accruing to you on the day following your purchase. A way to remember this is that the shares you receive are determined after the close of the day's trading, thus after the interest has accrued for the day. When a particular bond is purchased, i...
by troysapp
Fri Apr 05, 2013 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: How is bond interest computed?
Replies: 7
Views: 425

Re: RMD Timing

[quote="Epsilon Delta"] These are more complicated than that. The key is that taking an early RMD means you need to make estimated tax payments earlier in the year.[quote] This is not true. You can either pay your current year tax estimates based on your previous year's tax OR pay this yea...
by troysapp
Wed Feb 13, 2013 1:30 pm
 
Forum: Investing - Theory, News & General
Topic: RMD Timing
Replies: 22
Views: 1897

Re: RMD Timing

All things being equal, the only thing that matters is your tax rate now versus your future tax rate. Funds taken from deferred accounts are taxed as ordinary income. In the US, the tax rate on ordinary income has almost always been higher than the tax rate on long term capital gains. Over time, mar...
by troysapp
Tue Feb 12, 2013 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: RMD Timing
Replies: 22
Views: 1897

"The Permanent Portfolio" - questions & observations

I’ve just finished reading “The Permanent Portfolio”, and I have a few questions and observations: 1. On page 25 the returns of a 60/40 portfolio are compared to the Permanent Portfolio. Was the 60/40 portfolio rebalanced over the time period shown? Also, the book discusses storage, tax, insurance, ...
by troysapp
Mon Jan 07, 2013 8:27 pm
 
Forum: Investing - Theory, News & General
Topic: "The Permanent Portfolio" - questions & observations
Replies: 32
Views: 3666

Mgmt fees & distributions: Bond Funds v. Equity Funds

In a recent thread I noticed what seemed to be confusion about how mutual fund distributions and management fees work. I’ve 14 years’ experience with accounting, compliance, tax prep, shareholder reporting, shareholder distributions, etc. with four 1940 Act Funds, so I thought I’d attempt to shed li...
by troysapp
Fri Jan 04, 2013 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: Mgmt fees & distributions: Bond Funds v. Equity Funds
Replies: 6
Views: 625

Re: Help For Large Portfolio

NAPFA and Garrett Planning Network are good places to start, but broad experience is key and very difficult to find. If you have been very successful ($15m+), then you might want to look into multi-family offices. These tend to be fee-only and offer comprehensive services including tax prep, portfol...
by troysapp
Tue Nov 27, 2012 8:39 pm
 
Forum: Investing - Theory, News & General
Topic: Help For Large Portfolio
Replies: 18
Views: 1854

Re: Would this be considered a wash sale?

No wash sale, but you should have instructed Vanguard to gift the low-basis shares (or FIFO lot, in this case). Otherwise you could have a problem of gifting the higher basis shares you had just purchased OR cost averaging the shares just purchased with the lower basis shares.
by troysapp
Tue Nov 27, 2012 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: Would this be considered a wash sale?
Replies: 34
Views: 1460

Re: Setting up a Trust for the Kids

If you want to set aside funds for education, why not a 529? If educational funds are instead set aside in Trust, appreciation and income will be taxable. If you want to set up trusts using the annual gift exclusion instead of using that exclusion to fund a 529, then you could maximize your gifts by...
by troysapp
Wed Nov 14, 2012 8:10 pm
 
Forum: Investing - Theory, News & General
Topic: Setting up a Trust for the Kids
Replies: 17
Views: 1395

Re: Vanguard Total Bond Anomaly

Doc, I think YDNAL was correct with "The answer to your question lies in Morningstar's criteria of the Intermediate Bond Category (CI)." I was unable to find info on how M* constructs their "Intermediate-Term Bond" benchmark, but suspected that it might have a heavier weighting t...
by troysapp
Wed Oct 24, 2012 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Total Bond Anomaly
Replies: 28
Views: 3016

treasuries vs. munis ??

Hi All, When comparing the YTM of VFITX to VWITX, the muni YTM is 100Bps higher than that of treasuries even though duration is roughly the same. The spread between distribution yields is even greater (throw in income taxes, and the spread grows even further). I understand that the new muni rating s...
by troysapp
Thu Oct 18, 2012 7:33 pm
 
Forum: Investing - Theory, News & General
Topic: treasuries vs. munis ??
Replies: 6
Views: 538

Re: Getting lower cost Vanguard shares in a 401k

Large organizations can be very difficult to deal with, but the HR dept would likely be the best place to start since they tend to be charged with 401k admin issues. Good luck!
by troysapp
Mon Oct 01, 2012 5:01 pm
 
Forum: Investing - Theory, News & General
Topic: Getting lower cost Vanguard shares in a 401k
Replies: 4
Views: 523

Re: Getting lower cost Vanguard shares in a 401k

I'm an advisor with many clients that are also small business owners with 401k plans. As a service to them, I've helped many transition their 401k plans to Vanguard (I've helped move several millions of 401k plan assets to Vanguard, but I do not charge on those assets). What I've seen is Vanguard pr...
by troysapp
Sun Sep 30, 2012 12:59 pm
 
Forum: Investing - Theory, News & General
Topic: Getting lower cost Vanguard shares in a 401k
Replies: 4
Views: 523

Re: Ray Lucia charged by SEC - "Buckets of Money" Sep 5, 201

I assisted both Mr. Zweig and Mr. Hettena with their articles, and have become quite familiar with the Bucket Strategy as well as how the strategy is actually implemented. When it comes to actual implementation, it seems the buckets often consist of roughly: 15% cash and cash equivalents 30% equitie...
by troysapp
Wed Sep 19, 2012 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Ray Lucia charged by SEC - "Buckets of Money" Sep 5, 2012
Replies: 136
Views: 12285

Re: AMA: Morgan & The Euro Crisis - Is this time different?

AMA = ask me anything

I think it's a Reddit thing....
by troysapp
Sat Jun 30, 2012 4:41 pm
 
Forum: Investing - Theory, News & General
Topic: AMA: Morgan & The Euro Crisis - Is this time different?
Replies: 73
Views: 5854

Bond portfolio interest sensitivity question

Hi All, A recent thread about TBM's portfolio and its average duration got me to thinking: If TBM's average duration is 5+ years with components ranging from short to long term bonds, how would its interest rate sensitivity differ from a substantially identical bond portfolio which constrains its bo...
by troysapp
Thu Jun 28, 2012 5:29 pm
 
Forum: Investing - Theory, News & General
Topic: Bond portfolio interest sensitivity question
Replies: 9
Views: 2249

Re: AMA: Morgan & The Euro Crisis - Is this time different?

In my personal life I had my own version of a financial crisis which is completely unrelated to the market collapse of the last few years... Morgan, In the spirit of this being an AMA thread, please elaborate on this financial crisis and what could have been done differently, if anything. This is b...
by troysapp
Wed Jun 27, 2012 11:23 pm
 
Forum: Investing - Theory, News & General
Topic: AMA: Morgan & The Euro Crisis - Is this time different?
Replies: 73
Views: 5854

Re: Tax reporting for joint accounts?

If the mother was the only source of the account funds AND the daughter has never withdrawn funds from the account, then any taxable income associated with the account is likely the mother's. If the daughter has withdrawn funds, then it's quite likely a deemed gift has occurred, not only the amounts...
by troysapp
Tue Jun 26, 2012 5:28 pm
 
Forum: Investing - Theory, News & General
Topic: Tax reporting for joint accounts?
Replies: 39
Views: 3075

Re: Vanguard target funds - rebalancing ?

I read the annual report, prospectus, and SAI, but wasn't able to fing anything re: rebalancing.

Separately, I actually used to write all of these documents for 4 "private" '40 Act funds with over $1B of net assets so I know my way around them fairly well :wink:
by troysapp
Sat May 19, 2012 8:34 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard target funds - rebalancing ?
Replies: 7
Views: 989

Vanguard target funds - rebalancing ?

Hi All, Does anyone here know how often the Vanguard Target Funds rebalance to AA targets? Daily, weekly, monthly, quarterly, annually, 5-years, "tolerable bounds", other? I assume the funds also move toward target with new money and redemption requests, but I wouldn't think that action al...
by troysapp
Sat May 19, 2012 3:05 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard target funds - rebalancing ?
Replies: 7
Views: 989

Re: Mortgage-Backed Securities

555 - Have you read Mr. Swedroe's Bond and/or alternative investment books? In each of these he provides very good info re: Stable Value Funds (both books have the approx same info re: Stable Value Funds). If you haven't read them I highly recommend. Stable Value funds as a whole aren't necessarily ...
by troysapp
Thu Mar 22, 2012 1:11 pm
 
Forum: Investing - Theory, News & General
Topic: Mortgage-Backed Securities
Replies: 8
Views: 597

Re: Mortgage-Backed Securities

Thanks BC! Reading Ms. Thau's chapter on MBS was VERY helpful (as was the rest of the book). MBS aren't for me either.
by troysapp
Thu Mar 22, 2012 11:42 am
 
Forum: Investing - Theory, News & General
Topic: Mortgage-Backed Securities
Replies: 8
Views: 597

Re: Foreign Developed Large Cap exposure

Ah yes, sector exposure. As a US investor I do believe that adding foreign countries helps to offset currency risk as well, though. This said, it would seem to me that including Canada (a developed nation with substantial natural resources) would help diversify both sector and currency risk. Separat...
by troysapp
Wed Mar 21, 2012 6:11 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign Developed Large Cap exposure
Replies: 5
Views: 213

Foreign Developed Large Cap exposure

Hi all, Most everyone on this board seems to agree that adding foreign developed large cap exposure to an AA is prudent. For all you BHs that prefer setting your own For Dev Large Cap AA target (versus letting it float with the world's equity capitalization), do you think it's necessary to have expo...
by troysapp
Wed Mar 21, 2012 3:50 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign Developed Large Cap exposure
Replies: 5
Views: 213

future of small value "effect"?

Hi All, Over the past few years I have witnessed (but not quantified) more investors shifting their small cap exposure to be more "value" oriented. Here in Washington State even the state has recently dumped their employees' small cap option in favor of providing only a small cap value ind...
by troysapp
Thu Mar 15, 2012 4:54 pm
 
Forum: Investing - Theory, News & General
Topic: future of small value "effect"?
Replies: 230
Views: 8948

Re: hedging inflation risk

Thought this Krugman blog might be of interest. Deals w/whether CPI figures are accurate.

http://krugman.blogs.nytimes.com/2011/1 ... theories/#
by troysapp
Sat Mar 10, 2012 6:20 pm
 
Forum: Investing - Theory, News & General
Topic: hedging inflation risk
Replies: 88
Views: 5340

Re: Mortgage-Backed Securities

Thanks. The Wiki forum was somewhat helpful. "The Total Bond Market Index Fund is fine, but I vaguely wonder about a bond fund that has 35% of its portfolio in non-bonds" ~ jack bogle, 2007 Mr. Bogle also gave an interview a few days back where he said something to the effect of: The Total...
by troysapp
Fri Mar 09, 2012 5:14 pm
 
Forum: Investing - Theory, News & General
Topic: Mortgage-Backed Securities
Replies: 8
Views: 597

Mortgage-Backed Securities

Hi all, I find myself compelled to have an AA with an MBS target simply because the MBS market is such a large portion of the US bond market. Based solely on the characteristics of the MBS asset class, however, I find little to suggest adding them would increase a portfolio's efficiency. Perhaps sim...
by troysapp
Fri Mar 09, 2012 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Mortgage-Backed Securities
Replies: 8
Views: 597

Re: Foreign equity allocation

Thank you all for your responses! Quite an enlightening crowd! It seems to me that any foreign equity allocation between 30 percent and market weighting would be prudent. Perhaps I was remembering incorrectly, but my concern was that I was missing something that the respected authors had not. It was...
by troysapp
Tue Feb 21, 2012 10:44 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign equity allocation
Replies: 102
Views: 3800

Foreign equity allocation

Hi All, Most everything I've read suggests an equity allocation of no greater than 30 percent foreign (presumably for US investors). Why is this when over half of the investable equity market is outside the US? Does the rather consistent 30 percent limitation result from anticipated currency convers...
by troysapp
Tue Feb 21, 2012 12:22 am
 
Forum: Investing - Theory, News & General
Topic: Foreign equity allocation
Replies: 102
Views: 3800

thanks mel!

The math doesn't seem entirely difficult, but the data collection to get there is a bit more than I care to tackle right now!! :shock:
by troysapp
Wed Apr 13, 2011 3:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: "Modigliani Return" - how to calculate?
Replies: 2
Views: 536

"Modigliani Return" - how to calculate?

Hi all,
In Mr. Bogle's Common Sense he provides what he footnotes as "Modigliani Returns" in Figures 6.6. Does anyone know the equation used for arriving at the figures presented?
by troysapp
Wed Apr 13, 2011 12:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: "Modigliani Return" - how to calculate?
Replies: 2
Views: 536

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