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I would avoid the short-term TIPS fund because you don't benefit from its inflation protection in the very low yield. The amount you can withdraw penalty-free from the Roth IRA in an emergency is equal to the dollar amount you contributed; thus, if there is 10% inflation, your $5500 in the TIPS fun...

I updated my OP by the way. As far as how long, it probably will be under "emergency" status for about 1-2 years before it gets switched to "retirement."

So, I'm about to open a Roth for 2012 to store a portion of my emergency fund (with the intent to later switch it over to be retirement assets once I build back up cash funds in non tax advantaged space). I'm debating between the following choices (and welcome suggestions beyond my choices): Vanguar...

Being open-minded is great for mulling philosophical conjectures - but when it comes to spending/investing money, I prefer more concrete criterion. Much of the active vs. passive debate is pure strawman, but as someone starts pitching "Why settle for Vanguard's TSM when for a mere 1.5% more, y...

In other words, you either get extra risk for no return, or you can retune your portfolio and get the same risk but lower return. Extra risk is bad in itself . Extra risk may be worth it if you get extra return. Extra risk is not worth it if all it happens is that it "just evens out in the end...

I don't really see how this is a group think issue. There are countless studies that show over the long-term (decades) that active fund investing will lose to passive fund investing (after expenses, taxes, turn over etc.). Will there be a few active funds that do better? Yes. However, finding these...

Lot's of interesting charts to look at and things to read. I looked at the Russian profile and realized that there are greater risks to markets than great depressions and Japan-style stagnation. Look at Russia: After the 1917 revolution, Russia ceased to be a market economy. We therefore distinguish...

Interesting news, as regards hedged vs. unhedged , I'll have to reread the Vanguard white paper. But I did take the PIMCO Global Bond Fund and compared the differences between the hedged (PGDAX ER 0.80) and unhedged (PADMX ER 0.80) share classes. To me it looks like hedged has less volatility and sl...

The answer to this seems obvious to me: on a dollar-weighted basis, the average dollar performs above average. Well duh! Funds with above-average returns grow faster than funds with below-average returns, so the number of absolute dollars will naturally grow larger in the higher-performing funds ov...

The article advocates selecting proven low cost funds that are well above average. For example, funds like Wellington, Contra, and Sequoia have very good long term records. Occasionally they may underperform but disciplined investors are unlikely to sell them then, if ever. The article emphasizes q...

Interesting perspective the author provides and I welcome hearing about other perspectives, information, and studies. I think here on this board we run a high risk for group-think, confirmation bias, and black and white thinking (i.e. low-cost index-based investing is the one-true religion of invest...

In my 401k they have an international index fund that used to have tickler JEIEX. Back last year they notified us that they were reducing the expense ratio by 1 basis point and the underlying fund was changing from JHVIT International Equity Index Trust A (Class I) [JEIEX], which no longer appears t...

I use the Blue Cash Everyday card from AMEX and it offers this type of protection, they call it Premium Car Rental Protection. If you get that card you have to opt in for the car insurance feature. You will get charged $25 when you use your AMEX card at the rental agency. It is primary coverage, but...

Here is a study not necessarily on the specific issues discussed thus far, but it does have an interesting chart at the end about how CC companies make their money: 2001 for Visa and MasterCard: Interest 71% Interchange 14% Penalty Fees 7% Cash-Advance 5% Annual Fees 2% Enhancements 1% 1999 for AME...

Actually there are more negatives beyond the reward card holding bunch, see http://www.laweconcenter.org/images/articles/zywicki_interchange.pdf . Uh, you do realize that this study was paid for by Mastercard, don't you? And the problem with that is what exactly? In short, the study should stand on...

Last year there was a thread about this. Thought it might be fun. Here's mine: Chase Freedom: 4.8% ($69.10) Priceline Rewards: 2.0% ($421.54) <-- awesome I can put my rent on this and is my 'daily driver' of cards! Amex BCE: 1.9% ($56.48 ) Total Rewards: 2.1% ($547.12) Total Signup Bonus: $150 (Amex...

How does having a legal separation (but not a divorce) affect one's taxes and IRA contributions? I've tried to research this and this is my understanding: Not legally separated = If make $10k or more cannot contribute to a ROTH if filling separately. Not legally separated = must file either jointly ...

Another except: While these changes don't signify a seismic shift in Vanguard's muni-investing philosophy, which retains its cautious streak, they're a welcome sign that the team is serious about competing as an active manager in the muni space and not just on costs. I don't know if this is good or ...

I think it is an interesting chart because this topic comes up quite frequently in the forum. Two points: 1. I think 14 years is to short a study. 2. I am surprised that I-Bonds didnt do well according to the chart. ( I dont have I bonds for emergency funds.). I agree it's a short study (but these ...

There has been some recent threads about where to park money for emergency and short (and mid?) term savings. I was curious about the performance between the following main categories. Since these are often not graphed all together, I decided to do just that. The categories are as follows: 1) Short ...

Hmm. I initially avoided the idea of VFSTX due to the ~10% drop it had during part of 2008. But other than that, it looks fairly stable with the higher yield (even after tax as mentioned). Long-term though (10+ years) it's return has been almost exactly on par with VBISX.

I think Limited-Term Tax Exempt would be a better alternative for an emergency fund than Short Term Bond as currently , the former is yielding more, it's dividends are tax exempt, and it's duration is a tiny bit less. Even for the the 15% bracket, its had higher tax-equivalent yield for the last 2 y...

Due to the flight-to-safety effect, LTT are negatively correlated to stocks (notice the alternating periods of zig for zag denoted by green/red zones on the graph). TIPS used to be similar, but since 2008/9 have seemed to loose this negative correlation (see dotted line). I realize correlations can ...

I know that municipal bond funds have a 6 month rule for tax loss harvesting and that having reinvested dividends is problematic as it keeps resetting the 6 month period. The rule being something like you cannot claim all of the tax loss if you held the fund (or shares?) for less than 6 months and e...

How did you get historic SEC Yield values? I have always wondered how they compared too. Thanks for starting this thread. I'm interested in the other comments it will receive.

You should also check whether your 401(k) fund tracks the all-country index or the EAFE index. The EAFE is more common; it is tracked by Vanguard Developed Markets Index, Fidelity Spartan International Index, and the TSP I fund. If you have an EAFE index, you may want to add an emerging markets fun...

The index being tracked is MSCI ACWI IMI exUS (note the "IMI"). It includes small caps. Ah... somehow I missed that. Thank you! Do you think it matters much if one fund tracks the IMI version and another the non-IMI one (as in the case of my 401k fund)? Growth charts don't seem to make mu...

Why does VGTSX have 4% in small and 17% in mid-caps, when it's index being tracked (MSCI ACWI ex-US) has about 0% and 11% respectively? http://img843.imageshack.us/img843/7342/vgtsx.png My 401k has an international index tracking MSCI ACWI ex-US in the correct holding percentages. So why is vanguard...

It does not appear to me from this chart that the S&P 500 and the Nikkei 225 are tracking very well. In my book, there is a big difference between being +50% and being -30%. That is for the entire chart. For nine years it looks like +60% and ~0%. Still a big difference to me. What am I missing?...

I keep it 50/50, but you'll probably be fine with that allocation. The chance of a sustained, multi-decade US-only equity decline is small. Keep in mind Japan 1989 was at the peak of an enormous bubble. The US was in a bubble of sorts during the 90s bull as well (not nearly as high though). Nonethe...

Rodc wrote:If we do become the next Japan it is entirely possible the rest of the world's stock markets will be worse.

It's possible yes, but the opposite could happen too. The rest of the world could continue to grow.

Could be. Diversify accordingly. I'm currently 30% international of stocks, and 20% bonds (roughly age in bonds - 10). I'm wondering if this is "enough" diversification. I've decided on this allocation as it seems a reasonable starting point to someone new to investing like me. Back-teste...

Interesting, removing age we have (out of currently 93 responses):

03% (03) 0
09% (08) 01-19
65% (60) 20-49
24% (22) 50+

... Because for the last 12.5 years the US has been sideways in a similar fashion (compare the MSCI Japan Index and the Nikkei 225 to US TSM and 500 index). http://img837.imageshack.us/img837/5339/japan135.png What prevents the S&P 500 from tracking like the Nikkei 225 for another 9 years (or mo...

The first thing that I need to ask you is whether your employer's 401(k) investments are held within a Variable Annuity. I ask this because John Hancock is an insurance company and tends to only offer variable annuity products. If so, you need to determine if you will be paying annual variable annu...

If one is typically an indexing investor, then why are even asking this question? Because the reason for being an index investor may be based off of the fact that the average actively managed dollar underperforms the passively managed, net of costs . If costs are similar, then this might give one e...

Is JITRX a typo? JITRX isn't PIMCO Total Return it is JHFunds2 Total Return 1, with an expense ratio of 0.78%. And VBMFX doesn't have an expense ratio of 0.82%, it has an expense ratio of 0.22%. Nisiprius, JITRX is a PIMCO Total Return variant for John Hancock and is still managed by Bill Gross. Se...

there is no way to predict the future. I realize that. I'm not asking which one would produce better results (the active fund still could "win" even if the index fund was very cheap). Rather I'm asking which one would be the better option if one is typically an indexing investor. One of t...

Would it make sense to still choose TBM if the following were the options in a 401k?: Total Return (JITRX) ER 0.88 Vanguard Total Bond Market Index (VBMFX) ER 0.82 The index fund would only be 6 basis points cheaper. Thus, most of it's low cost advantage is lost, but not the low turnover, no active ...

FYI, one big assumption in your calculation was kind of scary: Jack and Jill will make the same amount as they are now for the rest of their working careers (adjusted for inflation). If you're only 32, making median income and expect no merit increases ever, something is seriously wrong. (or at lea...

UnderstandingJH – I think there’s a fatal flaw in your analyses, which I view as a fine example of how the academics mislead us via despicably irresponsible labeling. ... The result they label “expected” is NOT to be expected. It’s the arithmetic mean of a distribution of possibilities. ... To make...

These responses are helping me see that it is almost impossible to know how much to save per year for retirement in the early years of one's investing horizon. The problem I have is that one might want to make a lifestyle choice to semi-retire early in life (say 40s or 50s) to have more time to focu...

34k still works out to 80% of their pre-retirement income, considering they were saving 20% off the top. Yes I realize that 34k in this example may be 'enough' for retirement. But I was more so interested in comparing the difference in expected real returns and the impact on the portfolio. I could ...

Traditional investing advice has the idea that stocks will earn an average 10% a year, and bonds 5.5% (as shown in the Vanguard model portfolios using historical data between 1926-2010). Inflation during that same time period was 3.0%. Safe withdraw rates historically using that time period would be...

With Discover you can use their site to buy merchandise at their partner sites for 5 - 20% off, plus the 1% cash back you normally get on the card, plus take advantage of sale prices and rewards programs at the partner store sites, and pay for it with discounted gift card bought with your Discover ...

FYI that link contains some outdated information and is missing at least one 2% card (Sallie Mae) so don't trust it as the end-all be-all. The Sallie Mae (2% everything card, and the other one for 5% Gas, Groceries, Bookstores [including amazon]) are listed in the thread, but not the summary. The &...

The best place to search for the best cash back cards I've found is at this fat wallet thread:

What Credit Card Should I Get ? FAQ

Many 401K plans have a self direct brokerage option. Does your plan offer that possibility? If you could buy ETFs, your investment world would open to a lot of great bond opportunities. Just wondering. If we have that option, no one has told us about it. Our 401k is technically a group annuity cont...

In that case, I'd agree with retiredjg and go with Total Return. Getting the full match is number one. JITRX looks like it's basically a clone of PIMCO Total Return. You won't be committing financial suicide by using it and the ER is among the best of the bunch. So really my only other consideratio...

I-bonds in taxable is a possibility. Not sure whether your portfolio is of a size where the annual limits would make it work. IBonds is an option as is my 3.5% rewards checking (have plenty of room left there for the foreseeable future). The problem is these and IRAs don't benefit from a 50% match....