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Re: when is an annuity a good option?

Reading the Quinn article. I guess one thing I worry about is the insurance company that underwrites the annuity goes out of business? I'm guessing nothing protect a consumer from that? So you'd have to choose wisely. Chris zvez, My annuity is very large (about $1.2 million), it is the DB pension G...
by umfundi
Sat Nov 30, 2013 6:43 pm
 
Forum: Investing - Theory, News & General
Topic: when is an annuity a good option?
Replies: 35
Views: 2081

Re: Investor Intelligence Bearish Sentiment Very Low

No. Nor on any other indicator.

Keith
by umfundi
Sat Nov 30, 2013 3:40 pm
 
Forum: Investing - Theory, News & General
Topic: Investor Intelligence Bearish Sentiment Very Low
Replies: 26
Views: 6473

Re: Siegel on CAPE shortcomings

Along the lines of "if a tree falls", do we think CAPE was a valid metric before it was "discovered"?

Of course, this is science (isn't it?), and so "discovered" is much more apt than "postulated" or "invented".

Keith :P
by umfundi
Sat Nov 30, 2013 2:26 pm
 
Forum: Investing - Theory, News & General
Topic: Siegel on CAPE shortcomings
Replies: 44
Views: 2986

Re: Question about LMP / income flooring.

Thanks Keith. So you draw from tax-advantaged? I've been drawing from the taxable and wondered if I was leaving too much in my TA space. My taxable contains Total Stock and Total International and VMMXX. Our IRA's are Wellesley, Total Bond, Short Term Bond Index and REIT. Bustoff, Yes. Please note,...
by umfundi
Sat Nov 30, 2013 2:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about LMP / income flooring.
Replies: 18
Views: 1954

Re: when is an annuity a good option?

Here is Jane Bryant Quinn on the topic:

http://www.aarp.org/money/investing/inf ... r-you.html

Keith
by umfundi
Sat Nov 30, 2013 11:15 am
 
Forum: Investing - Theory, News & General
Topic: when is an annuity a good option?
Replies: 35
Views: 2081

Re: Question about LMP / income flooring.

Thanks Keith! B is 3X bigger than 25A. I currently receive a small non-cola pension that together with future social security (mine and spouse) will cover our current living expenses. The wrinkle is that if we both delay SS until 70, we would need to bridge a 10 year gap because my pension is only ...
by umfundi
Sat Nov 30, 2013 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Question about LMP / income flooring.
Replies: 18
Views: 1954

Re: Bill Bernstein: "Take risk off the table"

Actually, it's two months, according to a message I get from Vanguard when I sell. Victoria Well, it really wasn't about Vanguard, but even so, I don't recall them ever keeping me from buying stocks for two months. Just not the same fund. But thanks... Actually, Vanguard told me yesterday that if I...
by umfundi
Sat Nov 30, 2013 8:45 am
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

The menacing guy is the Soup Nazi, a Seinfeld classic.

Keith
by umfundi
Sat Nov 30, 2013 8:35 am
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

Actually, it's two months, according to a message I get from Vanguard when I sell. Victoria Well, it really wasn't about Vanguard, but even so, I don't recall them ever keeping me from buying stocks for two months. Just not the same fund. But thanks... Actually, Vanguard told me yesterday that if I...
by umfundi
Sat Nov 30, 2013 3:36 am
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: POLL: Black Friday market close: Green or Red?

The poll was about S&P500. 0.08 is practically 0, don't you think? Victoria I agree close, but the programmer in me would not allow me to accept it. What is the saying, close only applies for horseshoes and handgrenades? And in dancing. :shock: Kalo And, most important, close applies in investi...
by umfundi
Fri Nov 29, 2013 10:52 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Black Friday market close: Green or Red?
Replies: 52
Views: 2016

Re: Question about LMP / income flooring.

In the context of setting up an LMP, it's my understanding that the "safe floor" is meant to provide the income for the shortfall and should equal at least 25X residual living expenses. If I have a shortfall of $20,000 per year then I need a floor of $500,000. How do I adjust for the effe...
by umfundi
Fri Nov 29, 2013 10:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about LMP / income flooring.
Replies: 18
Views: 1954

Re: Bill Bernstein: "Take risk off the table"

Life changes. You may need more than you thought later in life due to a variety of changes. Or, even though you 'think' you need 4% you may need less. If you lock in the annuity - you're locked in. By keeping equities you keep flexibility (albeit with risk). However, I do agree you shouldn't push r...
by umfundi
Fri Nov 29, 2013 9:58 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Financial Windfall

Within the next several months, I will receive a mid six figures cash inheritance. I'm looking for investment advice for this inheritance. My objective will be some growth but primarily capital preservation. First my personal situation: I will be 71 in January. I am married and have been for more t...
by umfundi
Fri Nov 29, 2013 9:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Financial Windfall
Replies: 8
Views: 1620

Re: Man Throws Away 7,500 Bitcoins

Professor Emeritus wrote:it just has the smell of urban legend to me

There are plenty of hits for: James Howells Bitcoins

Reminds me of the story of the guy who parlayed $5 into millions betting on 6 in Las Vegas roulette. Lost it all on the last spin. He regrets losing that $5.

Keith
by umfundi
Fri Nov 29, 2013 9:29 pm
 
Forum: Investing - Theory, News & General
Topic: Man Throws Away 7,500 Bitcoins
Replies: 11
Views: 1594

Re: Bill Bernstein: "Take risk off the table"

If one agrees with Dr. B's propositions (as I do) that 1) if you've won the game then stop playing it, 2) stocks are toxic to retired investors, then it follows that the approach of holding a retirement portfolio with a significant portion of stocks to support a 4% SWR for income withdrawals is wro...
by umfundi
Fri Nov 29, 2013 9:20 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Malkiel suggests a different asset allocation

Business Week profile: Dr. Burton Gordon Malkiel, also known as Burt, Ph.D. is Chief Investment Officer of Wealthfront Inc..He is a Co-Founder of AlphaShares LLC and serves as its Chief Investment Officer, Manager and Head of Index Committee. Dr. Malkiel serves as an Advisor of CareGain, Inc. Prior ...
by umfundi
Fri Nov 29, 2013 7:36 pm
 
Forum: Investing - Theory, News & General
Topic: Malkiel suggests a different asset allocation
Replies: 41
Views: 4600

Re: Siegel on CAPE shortcomings

I think the point (or the argument) is that executives may have compensation incentives dependent on earnings per (outstanding) share. Stock buybacks reduce the number of shares, so earnings per share may rise even if total earnings do not.

Keith
by umfundi
Fri Nov 29, 2013 5:40 pm
 
Forum: Investing - Theory, News & General
Topic: Siegel on CAPE shortcomings
Replies: 44
Views: 2986

Re: Mutual Fund gifts for grand kids

I am seeking some recommendations on mutual funds that would be most appropriate as gifts to my two grandchildren. Sophia is 2 1/2 and Max is 5 months. I want to put $1,000 in each of two new accounts, one for each. I'm thinking of Wellington or Wellesley. 1. What funds do you think fit these long-...
by umfundi
Fri Nov 29, 2013 2:57 pm
 
Forum: Investing - Theory, News & General
Topic: Mutual Fund gifts for grand kids
Replies: 5
Views: 502

Re: POLL: Black Friday market close: Green or Red?

It almost seems like lots of orders to sell rebalance out of equities were kept by fund managers until the last few minutes of the session when they said, "Uh-oh, we better do these exchanges that folks asked for." Or maybe those managers at Vanguard did sell early in the day and then dro...
by umfundi
Fri Nov 29, 2013 2:41 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Black Friday market close: Green or Red?
Replies: 52
Views: 2016

Re: POLL: Black Friday market close: Green or Red?

umfundi wrote:I think the market will be down slightly, since few are paying attention. Let's say, -28.3 on the Dow.


That's not the winning prediction?

I have downloaded all the Thanksgiving Day football scores, and the DJIA history for the day after. My newsletter will be announced shortly. :P

Keith
by umfundi
Fri Nov 29, 2013 2:37 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Black Friday market close: Green or Red?
Replies: 52
Views: 2016

Re: Rebalancing on Friday

Good for us.

I will admit I was not going to rebalance since I was only a couple of percent off, but Malkiel's latest pronouncement set me off. :annoyed

Keith
by umfundi
Fri Nov 29, 2013 2:32 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Re: Independent Adviser for Vanguard Investors

Some good advice (low cost funds at Vanguard) but also a promise of a secret sauce for market timing and/or fund picking.

I'd take a pass.

Keith
by umfundi
Fri Nov 29, 2013 12:49 am
 
Forum: Investing - Theory, News & General
Topic: Independent Adviser for Vanguard Investors
Replies: 8
Views: 1260

Re: POLL: Black Friday market close: Green or Red?

So, I decide to rebalance, and the whole world cares? My trades have been submitted, and I have a stern admonishment from Vanguard they cannot be changed. I think the market will be down slightly, since few are paying attention. Let's say, -28.3 on the Dow. I do wish someone would do some data minin...
by umfundi
Fri Nov 29, 2013 12:33 am
 
Forum: Investing - Theory, News & General
Topic: POLL: Black Friday market close: Green or Red?
Replies: 52
Views: 2016

Re: Rebalancing on Friday

Calm Man,

I was talking in the context of funds you will use during your lifetime. Leaving a legacy brings a whole set of other considerations. I am sorry to hear about your daughter.

Best wishes,

Keith
by umfundi
Thu Nov 28, 2013 11:29 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Re: Rebalancing on Friday

Markets close early tomorrow, so don't be late getting your moves in... Done. Transactions submitted. On Friday, bond funds will pay out their November dividend distributions. Don't care, tax-deferred investments. Victoria implied I might wait until we get a sense of what the markets are doing tomo...
by umfundi
Thu Nov 28, 2013 10:37 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Re: Bill Bernstein: "Take risk off the table"

The problem is, we have a new strong signal:

The Lions actually WON a Thanksgiving Day game. I mean, they handily beat Green Bay, not just edged by.

Who knows what this means for the markets tomorrow? :shock:

Keith
by umfundi
Thu Nov 28, 2013 4:57 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

Taking advantage of extremes of market sentiment is not hard. If your friends are bragging about the big gains they are making from day trading stocks, that is a sign of a bubble. If folks who no nothing about investing start giving you stock tips, that is a sign of a bubble. When you see books abo...
by umfundi
Thu Nov 28, 2013 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

Sriracha,

Great post. The Wiki rocks!

As someone else noted, the BH Forums contribute their own noise.

Keith

PS: I assume you are not the guy with a court order: http://www.cnbc.com/id/101231927

(Edited for typo.)
by umfundi
Thu Nov 28, 2013 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

Well, Keith, I don't feel it's fair to ignore Dr. Bill's post early on in this thread: There's another dimension to this, which is that high recent returns mean that many savers have, at this point, won the retirement game--that is, they now have, for the first time, an adequate liability matching ...
by umfundi
Thu Nov 28, 2013 2:00 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

As Dr. Bernstein and others on the panel of experts at BH2013 said, staying with your plan is more important than getting the plan exactly right. Yes, "staying the course" is not some stupid slogan. It means, stick with your plan. Which is why I am so frustrated with some of the experts n...
by umfundi
Thu Nov 28, 2013 12:47 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Bill Bernstein: "Take risk off the table"

As Dr. Bernstein and others on the panel of experts at BH2013 said, staying with your plan is more important than getting the plan exactly right. Yes, "staying the course" is not some stupid slogan. It means, stick with your plan. Which is why I am so frustrated with some of the experts no...
by umfundi
Thu Nov 28, 2013 4:44 am
 
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: "Take risk off the table"
Replies: 207
Views: 17969

Re: Rebalancing on Friday

Keith, wouldn't life be good if everything was in accounts not affected so much by taxes, The we could just do life strategy moderate growth everywhere, not have to rebalance or do anything. ... Calm Man, Yes, but ... Only about 15% of our investable net worth is in taxable assets. So, yes, my reba...
by umfundi
Wed Nov 27, 2013 10:05 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Re: Rebalancing on Friday

Keith, and none of your motive to rebalance is driven by a high PE10 which clearly predicts an imminent crash? :sharebeer On the contrary, I am protesting the very idea that the tea leaves predict anything that is actionable. Period. By the way, to time the market you have to be correct twice. If P...
by umfundi
Wed Nov 27, 2013 9:26 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Re: Share the (real) ways you do financial arithmetic mental

The one easy rule is the rule of 72, for when a sum will double for a given interest rate.

Except, I have never been able to remember anything about it other than there is a rule associated with some number. :(

Keith
by umfundi
Wed Nov 27, 2013 9:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Share the (real) ways you do financial arithmetic mentally
Replies: 48
Views: 2251

Re: Rebalancing on Friday

VictoriaF wrote:But Keith, what if everything crashes and burns on Friday?

Victoria

Oh, that's what "Black Friday" means? :oops:

Keith
by umfundi
Wed Nov 27, 2013 5:27 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Rebalancing on Friday

Enough, already. I have decided to rebalance my accounts on Friday. Back to my planned AA of 50/50. This involves moving only a few percent, since I have a large chunk in VSMGX, which rebalances itself. (If anyone cares, my goal is VSMGX 80%, VFSUX 10%, and VBILX 10%.) Really, the noise has become u...
by umfundi
Wed Nov 27, 2013 5:15 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing on Friday
Replies: 37
Views: 2947

Re: Share the (real) ways you do financial arithmetic mental

My father had a book,

The Trachtenberg Speed System of Mathematics, with all kind of tricks.

The one I shortcut I find most useful is Pounds to Kilograms: Divide by 2, deduct 10% .

Kg to lbs: Double, add 10%.

Keith
by umfundi
Tue Nov 26, 2013 9:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Share the (real) ways you do financial arithmetic mentally
Replies: 48
Views: 2251

Re: A case for rebalancing

Mrxyz wrote:
Call_Me_Op wrote:Been buying EM all along - per IPS. :wink:


Pardon my ignorance, but what is EM? Is it Emerging Market?
Thanks

Yes, EM is Emerging Markets, which the article does not mention.

Keith
by umfundi
Tue Nov 26, 2013 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: A case for rebalancing
Replies: 13
Views: 1241

Re: A self constructed annuity

Hmmm, I wonder how a ladder of term SPIAs would look or does it even make sense ? Just thinking out loud here. Hexdump, Here is my own *opinion* . Stay away from all varieties of annuities except Single Premium Immediate Lifetime Annuities. You are much better off to delay SS before you buy an annu...
by umfundi
Tue Nov 26, 2013 4:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: A self constructed annuity
Replies: 18
Views: 1502

Re: Using Credit Card to Invest

Well, what could go wrong? Your investment drops 30% in the month your free CC offer expires! :oops: You manage to save $50K a year. Jan 2014: You apply for a credit card with 50K limit at 0% or 1%. You do a cash advance and immediately buy ETFs. Aug 2014: You are halfway there and you save 25K in ...
by umfundi
Tue Nov 26, 2013 1:54 am
 
Forum: Investing - Theory, News & General
Topic: Using Credit Card to Invest
Replies: 32
Views: 2602

Re: "Stocks, bonds, and your portfolio: A (re)balancing act"

Exactly.

I not only plan to rebalance, I plan to make those withdrawals from 529 plans for tuition paid, and I plan to plan my IRA contributions early in the New Year.

Keith
by umfundi
Mon Nov 25, 2013 8:41 pm
 
Forum: Investing - Theory, News & General
Topic: "Stocks, bonds, and your portfolio: A (re)balancing act"
Replies: 1
Views: 303

Re: A self constructed annuity

If you want to understand the basic idea of an immediate annuity (which is an insurance contract, not an investment), check out what a "tontine" is: http://en.wikipedia.org/wiki/Tontine If you buy a Single Premium Immediate Annuity you will get a return (not a "yield") which is p...
by umfundi
Mon Nov 25, 2013 6:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: A self constructed annuity
Replies: 18
Views: 1502

Re: Leveraging your Cashflow

livesoft wrote:We did that by borrowing $50K from a 401(k) in order to invest in a 529 plan. I like it.


livesoft,

I am not sure I get it.

A) Borrow from a 401k to purchase a 529. Repay the 401k loan over time.

B) Leave the 401k alone. Invest in the 529 over time.

How is A) better than B)?

Keith
by umfundi
Mon Nov 25, 2013 5:10 pm
 
Forum: Investing - Theory, News & General
Topic: Using Credit Card to Invest
Replies: 32
Views: 2602

Re: Using Credit Card to Invest

As with all sorts of leverage, when the margin call shows up, what are you going to do? Market declines and unemployment have a reasonable correlation: You borrow money, invest it, the market declines and you lose your job. Now, what? When I retired in 2008, I paid off my 2.5% home mortgage. I did t...
by umfundi
Mon Nov 25, 2013 5:00 pm
 
Forum: Investing - Theory, News & General
Topic: Using Credit Card to Invest
Replies: 32
Views: 2602

Re: Assessing Inflation fighters

Larry, I am still somewhat confused on this, in terms of an overall strategy. Yes, TIPS protect against inflation, but they only protect that part of your portfolio that is in TIPS. Also, it seems that by focusing on one particular risk you may be more vulnerable to other risks. In this case, forgoi...
by umfundi
Mon Nov 25, 2013 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: Assessing Inflation fighters
Replies: 7
Views: 648

Re: How to Invest for Retirement with Rick Ferri

I am also disappointed by the paucity of articles and forums on Investing IN Retirement. It seems that most advice is about planning for retirement and investing for the long haul etc and not as much discussion on the nuts and bolts of what to keep doing (or not doing) during retirement. I am puzzl...
by umfundi
Mon Nov 25, 2013 3:30 am
 
Forum: Investing - Theory, News & General
Topic: How to Invest for Retirement with Rick Ferri
Replies: 11
Views: 3327

Re: Equal Location or Asset Location?

While we are here, a pop quiz: Who said If you do own your own home, you will probably find that the house you live in is the best investment you ever made in your life ? Just googled that expression and the only hit I got for that string was your post above. Burton G. Malkiel, "A Random Walk ...
by umfundi
Mon Nov 25, 2013 3:08 am
 
Forum: Investing - Theory, News & General
Topic: Equal Location or Asset Location?
Replies: 42
Views: 1897

Re: New Withdrawal Strategies from T. Rowe Price

What's missing from all of this is any assessment of needs and risks. If you NEED 4%, go and buy an indexed (real) SPIA and you will get 4% for the rest of your life with virtually no risk. Taylor Larimore says he has annuitized his required income, and is now gifting from the remainder during his l...
by umfundi
Sun Nov 24, 2013 6:25 pm
 
Forum: Investing - Theory, News & General
Topic: New Withdrawal Strategies from T. Rowe Price
Replies: 10
Views: 2497

Re: Lease or buy a car?

We bought a Toyota Solara new in 1999 and it is in great shape today with 180,000 miles on it. Last month we were able to buy a 2004 Lexus RX with 70,000 miles on it. You can save a huge amount of money keeping a car for a long time. If you are going to drive lots of miles there is no question that...
by umfundi
Sun Nov 24, 2013 6:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Lease or buy a car?
Replies: 33
Views: 3212
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