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Re: Dividends Are Different?

Fact: Only dividends can help you avoid selling shares at the worst possible prices. This, in my book, is unethical. It implies that if the market tanks by 50%, you are better off receiving dividends than by selling shares for income. Sure you are selling shares, but the dividend has exactly the sa...
by umfundi
Tue Jun 18, 2013 7:11 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 82
Views: 2979

Re: Dividends Are Different?

If the dividend paying stock is so much better than a non-dividend paying one, why would you want the dividends to invest them in another company ? Not sure I quite follow the question. Most often they're reinvested (it gets blurry in a mutual fund, but some amount of the dividend from a given comp...
by umfundi
Tue Jun 18, 2013 7:02 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 82
Views: 2979

Re: Dividends Are Different?

Jane Bryant Quinn: An investor who put $100 into the S&P 500 on the last day of 1925, held until January 1, 2009 - and spent all the dividends would have earned $7,079. If that investor had reinvested all the dividends, he or she would have had $204,526! This says to me that dividends are not &q...
by umfundi
Tue Jun 18, 2013 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 82
Views: 2979

Re: Dividends Are Different?

But, this doesn't necessarily mean the price of the stock has declined, does it? After all, the price of the stock is set by the market, not by the book value of the company. It seems to me this must be true, that the stock price drops by the amount of the dividend. Otherwise, buy before the divide...
by umfundi
Tue Jun 18, 2013 1:22 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 82
Views: 2979

Re: Dividends Are Different?

Received today, in a Morningstar Newsletter come-on: Myth: You don't need income from your stocks--you can always sell shares. Fact: Only dividends can help you avoid selling shares at the worst possible prices. If you remember nothing else from this article, remember this: dividends, and only divi...
by umfundi
Tue Jun 18, 2013 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 82
Views: 2979

Re: I have a chip on my shoulder, but not in my card!

Payments to SDFCU:

You can pay your credit card bill on their site, with a manual transfer from an outside bank account.

If you want automatic payments, there is a form you have to download, fill out, and mail in. I now have this working for me.

Keith
by umfundi
Mon Jun 17, 2013 11:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: I have a chip on my shoulder, but not in my card!
Replies: 113
Views: 9400

Re: Serenity Prayer for Indexers

I'll drink to that! :sharebeer Keith As long as it's Vanguard's "at cost" coffee, it should be appropriate to both the original context and the repurposed one. :happy Oh, stick that knife in! I have been trying to get a Vanguard coffee cup (the one they flaunt in their webinars) for years...
by umfundi
Mon Jun 17, 2013 11:41 pm
 
Forum: Investing - Theory, News & General
Topic: Serenity Prayer for Indexers
Replies: 9
Views: 1051

Re: Serenity Prayer for Indexers

I'll drink to that! :sharebeer

Keith
by umfundi
Mon Jun 17, 2013 11:22 pm
 
Forum: Investing - Theory, News & General
Topic: Serenity Prayer for Indexers
Replies: 9
Views: 1051

Re: Models better than instincts

And now, they're not? Models are essentially curve fits of observed behavior. They work until they don't. In the financial world, they are useful until the advantage is arbitraged away. In physics and engineering they contain the basic equations (and those are exact!) and a huge number of particles...
by umfundi
Mon Jun 17, 2013 11:19 pm
 
Forum: Investing - Theory, News & General
Topic: Models better than instincts
Replies: 27
Views: 1077

Re: Models better than instincts

On Wall Street, if an inefficiency is discovered, it disappears. Keith Kind of a really perverse version of the Uncertainty Principle. By the way, active managers are equivalent to would-be Maxwell's demons. My son's favorite joke: Heisenberg is pulled over for speeding. The cop says, do you know h...
by umfundi
Mon Jun 17, 2013 10:31 pm
 
Forum: Investing - Theory, News & General
Topic: Models better than instincts
Replies: 27
Views: 1077

Re: Models better than instincts

My impression is that in the financial world the people who develop models often know the models' limitations, but the people using them often don't. Trusting a model's predictions beyond its range of applicability is a recipe for disaster. So true! And sometimes the fact that it is somebody else's...
by umfundi
Mon Jun 17, 2013 10:22 pm
 
Forum: Investing - Theory, News & General
Topic: Models better than instincts
Replies: 27
Views: 1077

Re: Models better than instincts

Before the age of supercomputers, engineering models where based on a simplified reality. And now, they're not? Models are essentially curve fits of observed behavior. They work until they don't. In the financial world, they are useful until the advantage is arbitraged away. This is distinct from s...
by umfundi
Mon Jun 17, 2013 10:17 pm
 
Forum: Investing - Theory, News & General
Topic: Models better than instincts
Replies: 27
Views: 1077

Re: Help with portfolio, fiduciary hourly advisor

I want to read and learn some more, all that I can understand anyway.


+1

If you end up with a paid adviser or not, your increased understanding will be invaluable.

Keith
by umfundi
Mon Jun 17, 2013 7:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with portfolio, fiduciary hourly advisor
Replies: 84
Views: 2538

Re: Non-Vested 401K Match and Asset Allocation?

OK, to those who say "don't count it" I ask: How much effort should one go through to exclude it? For me, Quicken sucks all the individual transactions in, so technically I could differentiate between each purchase with 'my' money vs. employer contributions, but the reality is that separa...
by umfundi
Mon Jun 17, 2013 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: Non-Vested 401K Match and Asset Allocation?
Replies: 16
Views: 383

Re: Non-Vested 401K Match and Asset Allocation?

I have been led down similar garden paths.

If it's not yours, don't count it.

If anywhere in the plan literature it says "Black-Scholes Valuation", it's worth zero. Until you have it.

Keith
by umfundi
Mon Jun 17, 2013 6:16 pm
 
Forum: Investing - Theory, News & General
Topic: Non-Vested 401K Match and Asset Allocation?
Replies: 16
Views: 383

Dividends Are Different?

Received today, in a Morningstar Newsletter come-on: Myth: You don't need income from your stocks--you can always sell shares. Fact: Only dividends can help you avoid selling shares at the worst possible prices. If you remember nothing else from this article, remember this: dividends, and only divid...
by umfundi
Mon Jun 17, 2013 5:48 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 82
Views: 2979

Re: Bogle: The Problems With 401(k)s

Would be awesome for a committee of people of the caliber of Bogle, to fix some of the problems inherent with these plans. I shudder to think how that might turn out. The special interests would have a field day. But, I am with Larry Swedroe. Public sentiment is turning, but it may be early yet. Gi...
by umfundi
Mon Jun 17, 2013 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: The Problems With 401(k)s
Replies: 22
Views: 2964

Re: Help with portfolio, fiduciary hourly advisor

tacomainvestor,

Good luck!

Keith
by umfundi
Mon Jun 17, 2013 11:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with portfolio, fiduciary hourly advisor
Replies: 84
Views: 2538

Re: Help with portfolio, fiduciary hourly advisor

tacoma, The financial planner will help you with withdrawal strategies, yes. They will also help you with should you get an annuity, should you convert traditional to Roth IRAs, etc. How to manage and optimize taxes if you move those taxable investments. The investment advisor is the one you seem to...
by umfundi
Mon Jun 17, 2013 3:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with portfolio, fiduciary hourly advisor
Replies: 84
Views: 2538

Re: Gold and Silver Coins in IRA?

ofcmetz wrote:I prefer to own assets that have an expected rate of return above inflation.

I believe the expected return is zero.
Gold is also very tax efficient in that it doesn't throw off any dividends or capital gains.

There you go!

Pokemon cards, anyone?

Keith
by umfundi
Mon Jun 17, 2013 2:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Gold and Silver Coins in IRA?
Replies: 26
Views: 1346

Re: Help with portfolio, fiduciary hourly advisor

tacomaininvestor, (My first post in this thread.) You may be being a little unrealistic in what you are looking for. You want fee-only, but you also want someone between you and your money to protect you from yourself when 2008 rolls around again. I am not sure you can get that. You may want to divi...
by umfundi
Mon Jun 17, 2013 2:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with portfolio, fiduciary hourly advisor
Replies: 84
Views: 2538

Re: How to be unhappy

Lo siento mucho compadres. Почему Вам нас жалко? Victoria Victoria, I hoped you would stick to the romance languages - I don't dig cyrillic. You think Russian is unromantic? See John Cleese in "A Fish Named Wanda". :D By the way, I took Chaz to mean he/she has regrets. In the Piaf sense. ...
by umfundi
Sun Jun 16, 2013 7:55 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: How the SS Claiming Decision Affects Portfolio Longevity

When I view the PDF, the chart Figure 1 is missing the line for "Begin at 70". So, look at the web version of the article. Very interesting. Thank you for posting. Boston College has some good stuff, including this: http://crr.bc.edu/special-projects/books/the-social-security-claiming-guid...
by umfundi
Sun Jun 16, 2013 6:45 pm
 
Forum: Investing - Theory, News & General
Topic: How the SS Claiming Decision Affects Portfolio Longevity
Replies: 3
Views: 563

Re: Bogle: The Problems With 401(k)s

I thought the analysis of social security in retirement planning was clear and very helpful. If the social security income stream is valued at 300,000 and your holdings in equities is also 300,000, then you are already at the equivalent of 50% bonds. More esoteric discussions of how to value social...
by umfundi
Sun Jun 16, 2013 3:23 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: The Problems With 401(k)s
Replies: 22
Views: 2964

Re: Bogle: The Problems With 401(k)s

401k plans and their brethren may have happened more or less by accident, but I think they are far superior to the company stock savings plans they supplanted. I believe similar things have been implemented in other countries. I think also that the demise of defined benefit (DB) pension plans is onl...
by umfundi
Sun Jun 16, 2013 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: The Problems With 401(k)s
Replies: 22
Views: 2964

Re: Nate Silver, index fund investor (Indexuniverse)

The 20 percent of really dumb decisions that we make in life tend to hurt us a lot more than the smartest 20 percent of our decisions tend to help us.

Food for thought.

I'm not even sure I could make a good list of dumb decisions that I've made. Wouldn't they represent the roads not taken?

Keith
by umfundi
Sun Jun 16, 2013 2:13 pm
 
Forum: Investing - Theory, News & General
Topic: Nate Silver, index fund investor (Indexuniverse)
Replies: 2
Views: 592

Re: Not happy with market

Good article by Jason Zweig, Why the Markets? Latest Stumbles Are Good News . Investors should welcome the falling prices that make assets cheaper. Instead, the markets resemble an immense school of fish, shifting from feeding frenzy to reversal in a single silvery flash. It makes my head hurt. I a...
by umfundi
Sun Jun 16, 2013 1:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Not happy with market
Replies: 78
Views: 5476

Re: Has anybody read Value Averaging?

I will refrain from further comments in this thread.

Keith
by umfundi
Sun Jun 16, 2013 9:50 am
 
Forum: Investing - Theory, News & General
Topic: Has anybody read Value Averaging?
Replies: 36
Views: 1795

Re: How to be unhappy

I say "noise" to mean fluctuations about the long term trend. There is no bad connotation. OK Keith, got it. I agree that the main purpose of rebalancing is to maintain desired risk/expected-return tradeoff, but I secretly hope for a rebalancing bonus, thus like to use something akin to t...
by umfundi
Sun Jun 16, 2013 12:30 am
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: why do people buy both insurance and lottery tickets

I once calculated that the odds of my being killed in a car crash driving to the next state to buy a Powerball lottery ticket are dramatically higher than my odds of winning the jackpot.

Keith
by umfundi
Sun Jun 16, 2013 12:03 am
 
Forum: Investing - Theory, News & General
Topic: why do people buy both insurance and lottery tickets
Replies: 39
Views: 2123

Re: Has anybody read Value Averaging?

Frengo, Your best rational behavior is to invest nothing now, and then to invest it all once the period of "downside risk" is past. It is quite rational to conclude that you can't know when it's past. I hope you will concede my main point: If you are not fully invested, you will receive l...
by umfundi
Sat Jun 15, 2013 11:30 pm
 
Forum: Investing - Theory, News & General
Topic: Has anybody read Value Averaging?
Replies: 36
Views: 1795

Re: Has anybody read Value Averaging?

Frengo, Your best rational behavior is to invest nothing now, and then to invest it all once the period of "downside risk" is past. I hope you will concede my main point: If you are not fully invested, you will receive less than the market return, up or down. It's as simple as that. Keith
by umfundi
Sat Jun 15, 2013 11:08 pm
 
Forum: Investing - Theory, News & General
Topic: Has anybody read Value Averaging?
Replies: 36
Views: 1795

Re: Has anybody read Value Averaging?

A single chapter by Jason Kelly on Value Averaging was enough to convince me that it's a method superior to Dollar Cost Averaging. Maybe you should read some more. If the actual growth rate of the market and the growth rate you choose don't agree, think what happens to the amount of capital you wil...
by umfundi
Sat Jun 15, 2013 10:20 pm
 
Forum: Investing - Theory, News & General
Topic: Has anybody read Value Averaging?
Replies: 36
Views: 1795

Re: Cashing out company 401k match immediately?

The laws have changed. In the good old days you were required to buy company stock, and it took five or more years for the match to be vested. What do you mean? Companies still can apply vesting to their contributions. The law never required it, or that the participant buy company stock, at least n...
by umfundi
Sat Jun 15, 2013 7:25 pm
 
Forum: Investing - Theory, News & General
Topic: Cashing out company 401k match immediately?
Replies: 21
Views: 1210

Re: Has anybody read Value Averaging?

You won't entirely understand DCA reading a summary. Most people criticizing the technique appear to be drawing conclusions from reading summaries, not the whole explanation. Do you mean VA? Which book or " whole explanation" on DCA should I read? Can you give a precise criticism of what ...
by umfundi
Sat Jun 15, 2013 5:23 pm
 
Forum: Investing - Theory, News & General
Topic: Has anybody read Value Averaging?
Replies: 36
Views: 1795

Re: How to be unhappy

I must check daily to avoid missing an opportunity to: capture rebalance momentum, TLH, RBD buying opportunity. DR, You are cracking me up, but you remind me of a good point. Your anxiety / unhappiness increases with the frequency of your knowledge. So, turn off all printed and mailed statements (e...
by umfundi
Sat Jun 15, 2013 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: Bond Funds Tanking

livesoft wrote:Point taken, so I changed it. :)

It's just a Razz. :P

But yes, for a mutual fund there is a tenuous connection between fund price changes and investment inflows and outflows. Who knows what the actual forces are that move the prices of the funds' investments, and thus the fund price itself?
by umfundi
Sat Jun 15, 2013 4:54 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Funds Tanking
Replies: 98
Views: 6721

Re: Bond Funds Tanking

Perhaps a moderator can take their red font and put some truth into these threads. For example, "tanking" could be changed to " [down 1%] " in the thread title. :twisted: But I do think Bogleheads started the stampede out of VIPSX and into VTAPX. Attention moderators: "stam...
by umfundi
Sat Jun 15, 2013 4:05 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Funds Tanking
Replies: 98
Views: 6721

Re: How to be unhappy

Kevin, Yes. By rebalancing more frequently you can make money off the "noise". That is the rebalancing "bonus", which may not be available all of the time. Keith Do you consider buying at 10% below target and selling at 25% above target noise? I don't. I have bought REIT once an...
by umfundi
Sat Jun 15, 2013 4:00 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: Bogle: The Problems With 401(k)s

Jack Bogle said: I think a reasonable thing to do, for example, on the fixed-income side would be to have a corporate bond index fund in your portfolio, as well as a total bond market index fund in your portfolio. The total bond market index fund is 70% government guaranteed, U.S. Treasury, etc. An...
by umfundi
Sat Jun 15, 2013 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: The Problems With 401(k)s
Replies: 22
Views: 2964

Re: Bond Funds Tanking

Someone mentioned "normal times". Well, I have been investing since the early 80's. In that 30 years there has been quite a bit of "normal time". I haven't been investing as long as you but so far none of my time has felt "normal". You will eventually decide that the t...
by umfundi
Sat Jun 15, 2013 3:25 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Funds Tanking
Replies: 98
Views: 6721

Re: How to be unhappy

Kevin,

Yes. By rebalancing more frequently you can make money off the "noise". That is the rebalancing "bonus", which may not be available all of the time.

Keith
by umfundi
Sat Jun 15, 2013 3:17 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: How to be unhappy

I agree with this. At age 39 if the market falls 50% over the next year I'll be ecstatic.


It's the sequence of returns thing. If you are accumulating, you want the market to go up later. If you are decumulating, you want it to go up sooner.

Keith
by umfundi
Sat Jun 15, 2013 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: How to be unhappy

I've been checking daily lately so this thread is telling. The only thing is, I'm dollar cost averaging in an account so I want the market to go down. But if it goes down I lose much more in my other accounts . I guess I'm unhappy no matter what. :? "Cheer up!", he said, "things coul...
by umfundi
Sat Jun 15, 2013 2:15 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654

Re: Cashing out company 401k match immediately?

I once worked at a company where you could withdraw your own contribution after 6 months, but not the match. That seems unlikely. As I noted above, the law has serious restrictions on removing your contributions. The plan can't approve anything contrary to the law. Brian The laws have changed. In t...
by umfundi
Sat Jun 15, 2013 2:08 pm
 
Forum: Investing - Theory, News & General
Topic: Cashing out company 401k match immediately?
Replies: 21
Views: 1210

Re: Has anybody read Value Averaging?

Has anybody read Value Averaging: The Safe and Easy Strategy for Higher Investment Returns By Michael E. Edleson? New to the world of indexing, planing on adding $500.00 per mth to my 3 fund formula. Wanted to know if anybody has read this book? and their thoughts? Has anybody read the book on Kind...
by umfundi
Sat Jun 15, 2013 1:22 pm
 
Forum: Investing - Theory, News & General
Topic: Has anybody read Value Averaging?
Replies: 36
Views: 1795

Re: Bogelheads' investable assets at retirement

nodenuff2 wrote:1.2 and retiring soon. More 1.8 if I lump sum my entire pension. Decisions, decisons causing sleepless nights right now.


I have a whole thread on lump summing your pension. Generally, not a good idea.

Keith
by umfundi
Fri Jun 14, 2013 9:57 pm
 
Forum: Investing - Theory, News & General
Topic: Bogelheads' investable assets at retirement
Replies: 27
Views: 2212

Re: Bogelheads' investable assets at retirement

Done.

Family net worth $2M plus. Includes kids investments in UTMAs, 529s. Excludes home, or any valuation of pension or SS.

Keith
by umfundi
Fri Jun 14, 2013 9:53 pm
 
Forum: Investing - Theory, News & General
Topic: Bogelheads' investable assets at retirement
Replies: 27
Views: 2212

Re: Bond Funds Tanking

Another thing I'd like to add. It is always a puzzle. I have posted before on the "two-humped camel," bond interest rates go through cycles that are so slow that there have only been two complete cycles since 1900. Certainly one cannot ignore the likelihood, the seeming certainty that one...
by umfundi
Fri Jun 14, 2013 8:00 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Funds Tanking
Replies: 98
Views: 6721

Re: How to be unhappy

There is an analogy in the common recommendation that dieters weigh themselves weekly and avoid the temptation to weigh themselves any oftener than that. Dieters should synchronize their weight with the markets. When both the markets and the weight go up, they will derive happiness from their incre...
by umfundi
Fri Jun 14, 2013 7:08 pm
 
Forum: Investing - Theory, News & General
Topic: How to be unhappy
Replies: 45
Views: 4654
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