Bogleheads.org

Max out the 401k this year, save on income taxes.

Convert to Roth in 0% tax bracket. Once the money is in Roth, you can withdraw if needed for a 10% penalty for 5 years and with no penalty after 5 years.

Larry. Nice article. Two questions: 1) Why did you use the European Market and not EAFE Market in your chart of valuation ratios? It raises an unnecessary question mark. 2) How high would you go with international weighting. I am at 50%, but even that is underweight market portfolio. So if you were...

I don't see how you can divorce the return from bonds from its effect on the portfolio, when over the past 30 years bonds have been contributing significant returns through dividends considerably north of 5% a year, year in and year out. That was enough to double whatever you had put into bonds ove...

Max out 401k to 17,500 while working plus do IRA and then convert to Roth in 0% tax bracket while in school! Use some of the 50k to live on while maxing 401k.

Put the rest on the loan.

$500k is a lot of cash for 35. Good job!

Did you start working at 20 and make a decent salary and save for 15 years? Sometimes starting work young and taking a break for college is a good way to go.

I think its time for international index to rise!

PE ratios are lower than US.

Plus international has underperformed for a while now, and is trailing the US by a large amount this year so far.

Has anyone increased the % in international? I have. Overbalanced to international to an extent.

Been there, done that, bought that T-Shirt. Fortunately, I learned about asset allocation and portfolio theory before the 2000 crash and diversifed. Having 30% in bonds helped cushion the two bear markets that I experienced in the next decade. My losses each time were about 1/3 of the portfolio, wh...

I buy mostly with new money since am in accumulation phase. My rebalancing bands make it so that this would be a rare event. As far as buying stocks on the cheap during bears unless you keep rebalancing, it always seems that they will go lower and it is not clear when to buy exactly. I remember tha...

If the market went on a 80's/90's-style 17 yr run starting back in 2009, how high would it go? Didn't PE ratio hit around 45 in 1999 and right now it is around 15?

Congratulations! Your post mirrors what my wife and I went/are going thru. We are both U.S. Army officers and for years maxed contributions to TSP and also to our Roth IRAs thru Vanguard (VTSAX, VFIAX, VDIGX) and others...we started investing early in our careers and kept at it, looking at market d...

Yes, I missed most of it. I had the worst possible timing and lost my job in 2008 and then was unemployed for a while and traveled for a while. Terrible timing and missed most of the good buying opportunities. Now I have decent income and have to pay much higher prices. Ugh.

S&P500 PE10 is 23. High-ish, but not a bubble, IMO. Doesn't mean the market can't fall in half, just like that. PE10 44 in 2000 was a bubble. Even to contemporaries brave enough to be contrarian. That would mean a stock market of about 29,000 right now. Housing affordability 5% in 2006 was a bu...

I'm in late 20's. When I was 23, I wanted to get a house really soon. Now, I have no desire in the short-term. It is good to have flexibility.

Also, highly recommend maxing 401k out to $17,500 during one calendar year. Then travel during the next year and do a Roth conversion in the 0% tax bracket.

Good for you. Noise is exactly what all the turmoil is. The Fed has set the conditions with certainty as to when they will begin raising rates. Regardless of what people may think of the Fed. bankers, they are not dummies. Also unless we get our federal debt to a more manageable position, interest ...

Better put, the bonds currently carry big downside risk, with the only chance of rewarding benefits being if we stay in an ultralow rate environment for a long time. I am in the Bernstein camp and have shortened duration. But I admit it's timing and is at least a Boglehead misdemeanor. -1% to -1.5%...

Leesbro63 wrote:I get the cashflow part of your comment. But if you are 45% equity and the market crashes in half (or worse), you'd then be merely 29% equity (or less). How is that being rebalanced by the market?

Yes. Why be 45% in equity at Dow 14,000 but only 29% in equity at Dow 7,000?

IMO, interest rates will stay well below the inflation rate for decades to come because our country cannot afford to pay higher interest on the federal debt. In Japan, a 1% rise in interest wipes out all tax-revenue. We're moving in that direction fast. No Central Banks will not let that happen, in...

Well done!! I didn't invest a penny in my 20's because I was more concerned about beer money. :D So, I'd say you're doing great!! You had a setback (job loss), got a good experience out of the deal, and you're only 2 years behind on your goals. You're probably WELL ahead of most at your age. Good j...

I think it was livesoft that mentioned SCV (like VBR) in a taxable account isn't that bad. Especially if you can buy with a high basis.

I like the idea and have been thinking the same.

Essentially book SCV gains in Roth. Sell SCV in Roth, buy INTL in Roth.

Sell INTL in taxable and buy SCV in taxable.

While we all recognize the buy-high, sell-low syndrome, I think it's at least as relevant to consider what you would like these folks to do. So they finally saw the light and realized they'd miss the ride the last 4 years. What are they supposed to do now? Wait until the next downdraft in the marke...

He had a lot of posts and seemed pretty knowledgeable. Definitely on the negative side, but provided a good balance to the forum.

I remember most people saying in Aug 2011 that it was way too early to rebalance into stocks. They thought 2008 was happening again. In reality, Aug 2011 was a great buying opportunity.

I think too many people are expecting 2008 to happen soon and it is costing them money.

I am now 29. At age 23, I set net worth goals for age 27 and age 30. I reached my age 27 goal just recently, 2 years late but I'm glad I reached it and overall I am quite satisfied. At age 23, I didn't know about this forum but had a good grasp of staying-the-course and buying low-cost investments l...

When did you develop your AA? If you developed it in 2007, then stocks are cheaper now (going by P/E) and bonds are more expensive. If this is the case, is increasing stocks really that bad? Bonds have a lot of purchasing power risk, especially for young people, and that risk is higher now than it's...

He seemed to be pretty knowledgeable and I learned a few things from him. I wish he would return, I would like to hear his thoughts.

Doesn't this usually happen? Market drops, people sell and swear off stocks. Market recovers, starts hitting highs, suddenly people love stocks again. And they buy at higher prices..... :oops: It is sad, on many levels. Saddest at the personal level, seeing folks jumping in after missing so much of...

In 2011, we had the Flight to Safety, with investors rushing into treasuries. Now its 2013 and the stock market is doing well. When will we ever have the flight FROM safety? I want to buy some treasuries with a higher yield! Problem is millions of people are thinking the same thing [as they risk av...

Stock market hits all-time nominal high and no sign of LBill.

He used to post a lot back in August 2011 when the market was tumbling.

I might be interested too.

from HR Block calculator: single, 30K wages, tax 2603 MFJ, 60 K wages, tax 5206 ........basically 2x single w/ 30K wages in line above MFJ, 30K wages, tax 1050 (did you type 55 or is my computer going wacky on numbers too?) Yeah, I got 55 with the $1000 Savers Credit. But still: tax 1050 vs tax 260...

I file single.

Federal taxes were approx $2600. Just for fun, I checked MFJ and my Federal taxes would have been....$55.

Is it me or is there a penalty for filing single?

almost - 25% in 2007 and 70% in 2009 - how did you remember?!? stocks: 62.25% TSM - 25.1% US small/value 12.3% TISM - 17.5% Intl small/value - 7.3% bonds: 37.75% TBM - 17.8% stable value - 17.6% I bonds - 2.3% So you have scaled back a bit since 2009? Have you increased % in INTL in the last few ye...

I think the first question is how many are rebalancing from equity to bonds For the new and seemingly expanding '100% equity' crowd: Zero :shock: For me, with a very wide band - very little new money to equities this year. Mostly non-equities with new $$. Equity rebalancing US :arrow: Int. *Shrug* ...

In 2011, we had the Flight to Safety, with investors rushing into treasuries.

Now its 2013 and the stock market is doing well. When will we ever have the flight FROM safety? I want to buy some treasuries with a higher yield!

What caused the flight to safety? All the European stuff?

I reran the numbers. 1) The S&P 500 price needs to go up 9% to be at the same inflation-adjusted price as it was at it's peak in 2007, and needs to go up 26% to be at the same inflation-adjusted price at was at it's peak in March 2000. 2) The P/E of the market is 17.5 today based on trailing 12...

What new high? The S&P 500 is currently 9% below it's inflation-adjusted high in 2007 and 27% below it's inflation-adjusted high in 2000. The market P/E is sitting at a reasonable 17x trailing 12 month earnings . These are not "high" numbers. Rick Ferri RIck, what level would the SP a...

Lbill wrote:DOW is down by over 550 points with a couple hours of trading left. Trading halt on the way?

VTI is up 36% since this thread started.

Where's LBill?

i have to make a similar decision. thinking about keeping some of each, but not fully sure on that.

Adirondack 3% RIP.

What is the best way to go now for investing?

I will be in 0% LTCG bracket in 2012 and want to tax gain harvest a bunch of VTI. My plan is to sell it and buy the whole thing back 1 min later. These are all long-term shares. I was planning on doing around 12/15, so that I have breathing room if I want to do some more tax gain harvest in late Dec...

Larry,

If stocks expected return is 3.9% real and bonds are around -1% real, that is a 4.9% difference. Isn't this a pretty big difference compared to historical? Wouldn't that mean that stocks are relatively attractive in that view?

Oh I just realized that 22 and 24 only need to be done if one takes a distribution from a Roth. In other years, these amounts don't need to be reported. But your tracking system is a good idea. Basically keep 5498 and 1099-R's until age 59.5. And also keep track of distributions, return of excess co...

Is it necessary to report the running total of cumulative conversions and contributions each year for Lines 22 and 24? I've never done so in the past.

So how do you keep track of this information? Just save the Form 5498 from each year in a big file? And save 1099's to keep track of conversions?

I noticed Form 8606 Line 22 and 24 has a spot for basis in Roth contributions and conversions. Should this be updated and reported each year on this form?

To pay for my 4, one month vacations a year to different countries. This year; Panama/Costa Rica, Thailand/Singapore, Russia and Australia/New Zealand/Vanuatu. Avoiding the Euro zone this year. :shock: Traveling is getting worse and worse and I would rather do it now then when I am older. Once I re...

My point about owning commodities as part of the bond allocation rather than stock is period sensitive to where rates are today. We are in an unusual time when the Fed's target for intermediate-term interest rates is well below their target for inflation. If the Fed is successful, you will lose pur...

What does everyone think of the future of i-bonds and TIPS in general? They are good for the public, but how does it benefit the government? One of the biggest weapons against debt is inflation and inflation indexed securities give up this power. I'm wondering this too. What are the chances that th...

I haven't yet read the replies on here, but I know I will find some very annoying. I got my parents to put 50% of their money in gold and silver a few years ago. I sold silver near the top and still have the gold. I made them roughly a 80% roi. The fact is this: Gold IS money. You should not compar...

I like gold, but the first question she needs to ask is "Why do I want this in my portfolio?". Until you know that, it's very difficult to decide what kind, how much and when you should be holding it. For my portfolio I hold gold as a "cash" alternative. Gold doesn't pay dividen...