Search found 462 matches

by brick-house
Sat Feb 14, 2015 8:25 pm
Forum: Investing - Theory, News & General
Topic: TIAA-CREF dramatically increasing Expense Ratios
Replies: 95
Views: 27993

Re: TIAA-CREF dramatically increasing Expense Ratios

TIAA-CREF expenses and offerings seem very dependent on your university's size and the contracts it offers. One of my old employers (very large university) offers a GSRA contract (3% liquid TIAA Traditional) with institutional mutual fund shares (Us equity - russell 3000 and international equity - MSCI EAFE that both run at .07% and an emerging market index at .25%, plus a bond index - barclays us aggregate at .12%). Pretty cheap...
by brick-house
Wed Oct 15, 2014 8:29 pm
Forum: Personal Investments
Topic: Roll Over Old TIAA CREF Account?
Replies: 15
Views: 1999

Re: Roll Over Old TIAA CREF Account?

Ourbrooks wrote:
If nothing else, when you go to cocktail parties, you will be able to honestly say that you keep your investments in the same fund that Janet Yellen and Ben Bernanke use.
TIAA Traditional is three percent and a cloud of dust. 10 year treasury yield flirts with 2%, yet TIAA Traditional guarantees 3% and pays more (much more in some old vintages :D ) .

Ben Graham may have liked 50% TIAA Traditional and 50% CREF Stock as a default allocation. I believe that satisficed the retirement needs of a few generations of academics...
by brick-house
Sun Apr 06, 2014 10:26 am
Forum: Investing - Theory, News & General
Topic: "The 4% rule and a dynamic retirement spending plan"
Replies: 14
Views: 3348

Re: "The 4% rule and a dynamic retirement spending plan"

Vanguard managed to provide a dramatic example of sequence of return risk. If the Vanguard Managed Payout Funds were launched on March 2009 instead of 2007; then I think they would be hyping these funds instead of letting them wither on the vine. As a couple in our early 40s with kids, we pay for term life insurance and invest the rest. When we retire, we plan to annuitize and invest the rest. Our simple plan is to save enough principal to satisfy the 4% annual withdrawal conventional wisdom (25 times annual income need). Then we will annuitize (Two Life with 15 or 20 years guaranteed, 70% fixed payment (nominal) and 30% variable) enough of our principal to provide 4% annually and invest the rest. Quick example: If we were 65 (today) with a...
by brick-house
Fri Mar 14, 2014 5:06 am
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 31231

Re: Wade Pfau: Lifecycle Finance

Bobcat2 wrote: It makes perfect sense that TIAA-CREF would be a leader in advancing life-cycle investing. Two of the fathers of life-cycle finance, Paul Samuelson and Robert Merton, were long-time CREF Trustees. TIAA-CREF has an annual award that recognizes an outstanding research publication that can help strengthen Americans’ lifelong financial well being. It is the Paul A. Samuelson Award. Lastly, according to a recent article in Forbes, DFA is currently working with TIAA-CREF to bring its DC Managed Retirement Plan to Lewis & Clark College. If I were the HR executive at Lewis & Clark College and this DFA offer was pitched, I would channel Ten Bears (Outlaw Josey Wales) and say - these things you say we'll have, we already have.....
by brick-house
Thu Mar 13, 2014 9:24 pm
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 31231

Re: Wade Pfau: Lifecycle Finance

bobcat2 wrote:
I fail to see what financial products are missing that make the above life-cycle retirement plan nonviable. Certainly low interest rates aren't a problem restricted to retirement plans that follow the principles of life-cycle finance.
+1 Everything old is new again - seems like this has been done successfully by TIAA CREF participants for a few generations of retirees. TIAA Traditional for the floor. CREF Stock for the aspirational. Since the late 90s, TC has offered CREF Inflation Linked Bond to bolster the floor and TIAA Real Estate to bolster the aspirational. All four can be annuitized.
by brick-house
Wed Dec 04, 2013 4:58 pm
Forum: Investing - Theory, News & General
Topic: Stock investing and the fear of flying
Replies: 57
Views: 6232

Re: Stock investing and the fear of flying

Turbulence.... Judging by fund flow history and the underfunding of many Defined Benefit Pensions - many investors (amateur and professional) make poor decisions (sell low, buy high,) in times of market turbulence.
by brick-house
Sat Nov 30, 2013 6:57 am
Forum: Investing - Theory, News & General
Topic: 5 Ways to Cheat the 4 Percent Withdrawal Rule
Replies: 8
Views: 2259

Re: 5 Ways to Cheat the 4 Percent Withdrawal Rule

article quote:
But the 4 percent rule presents a problem for many people. At 4 percent, $1 million produces just $40,000 a year in income. If we could increase our withdrawals to 4.5 or even 5 percent each year, the extra income could go a long way. Here are five potential ways to do just that:
Suprising that a floor of lifetime annuity income was not one of the author's five suggestions. In this case ($1 million nest egg), buy a Single Premium Immediate Annuity for $600,000-$700,000 (to produce the 4%) and then invest the remainder for future use/inflation/flexibility. Buy an SPIA and then invest the rest... :beer
by brick-house
Sat Aug 31, 2013 7:28 am
Forum: Personal Investments
Topic: Moving into TIAA Traditional
Replies: 24
Views: 3096

Re: Moving into TIAA Traditional

levett wrote:
And the TIAA Traditional RA/GRA got bumped UP another 15 basis points yesterday! 3.75%. Not bad in a tax-deferred account.
3.75% and a cloud of dust... TIAA Traditional keeps the chains moving in a low/rising rate environment. :beer
by brick-house
Sun Mar 24, 2013 11:01 am
Forum: Investing - Theory, News & General
Topic: Burton Malkiel, Wealthfront CIO
Replies: 89
Views: 20963

Re: Burton Malkiel, Wealthfront CIO

rick ferri wrote: I often wonder why Vanguard, Schwab, Fidelity, and other custodians have not created and launched a similar "robo" program. The automated rebalancing and tax-loss harvesting software that drives Wealthfront may be leading edge today, but how far ahead can you go with this stuff? Portfolio management processes are fairly generic (rebalancing, tax-loss selling). A large firm like Schwab could create a program in a few months if they wanted to - Vanguard also. They could offer this technology to premium clients at no-cost. The large firms could even enhance the technology by giving you the ability to customize your portfolio where Wealthfront currently does not. Rebalancing could be based on your choice of methodolo...
by brick-house
Sun Mar 24, 2013 7:54 am
Forum: Investing - Theory, News & General
Topic: Burton Malkiel, Wealthfront CIO
Replies: 89
Views: 20963

Re: Burton Malkiel, Wealthfront CIO

rick ferri wrote:
Is there something new and revolutionary that Malkiel is suggesting that I'm missing? It all seems so routine to me. If I am missing something, then I must be the one getting old.
Passive investing is a routine. Determine your risk level/time frame, build an appropriate asset allocation and location framework, complete the framework with low cost index mutual funds/etfs, rebalance.

For those that need help with that routine: Wealthfront is using technology to fill a void in the market. For some reason, if you have less than $500,000 or sometimes even a million - advisors won't help or will charge an oppressive fee (relative to assets). :confused
by brick-house
Sat Mar 16, 2013 9:03 am
Forum: Investing - Theory, News & General
Topic: Dave Ramsey Defends His Investment Advice
Replies: 120
Views: 22345

Re: Dave Ramsey Defends His Investment Advice

Dave Ramsey's advice helps people clean up debt and get organized. This allows a household to have a clean balance sheet, strong savings rate, and an increasing net worth. This leads to healthy functional financial households. Thus, I understand his following...

What I don't understand is that after all of the heavy lifting involved in cleaning up a dysfunctional financial household (bad debt, negative cash flow, decreasing net worth), why send someone to the Dogbert Mutual fund? :confused

http://www.bylo.org/dilbert.html
by brick-house
Wed Mar 13, 2013 6:12 pm
Forum: Investing - Theory, News & General
Topic: Dave Ramsey Defends His Investment Advice
Replies: 120
Views: 22345

Re: Dave Ramsey Defends His Investment Advice

emerg doc wrote: I don't even have much of a problem with his whole business structure to refer to his ELPs. Most people do need investment advice unfortunately. Most people who need it don't have the assets necessary to hire a fee-only adviser. Nobody is going to work for 1% of a $10K portfolio. Hourly advisors are some solution, but they're still fairly rare out there. The advisors have to get paid, so they take loads. That's fine with me as long as people understand what they're doing. But to think the mutual fund salesman/advisor can pick funds that will beat the S&P 500 over the long run shows a serious ignorance of the academic literature he seems fond of citing. I wonder what old Dave thinks of Wealthfront? Advisory fee waived on...
by brick-house
Sun Mar 03, 2013 7:47 am
Forum: Personal Finance (Not Investing)
Topic: Surprised at actual marginal tax rate
Replies: 32
Views: 3913

Re: Surprised at actual marginal tax rate

bob's not my name wrote: You don't have to guess, this is well known. For families with children there essentially is no 25% bracket and their total marginal rate, including federal and state income tax and de facto financial aid tax, is often well over 50% and can be over 100%. This is perverse because the tax credits and financial aid substantially improve their trade balance of payments with society, while their exceptionally high marginal rates discourage a second income or professional exertion. Tax mitigation strategies include aggressive use of tax-deductible savings -- 401k,403b, spousal TIRA, FSA, HSA, UTMA for shifting investment income (especially LTCG) to children, etc. to reduce both AGI and taxable income, including withdrawin...
by brick-house
Sat Feb 23, 2013 8:35 am
Forum: Investing - Theory, News & General
Topic: Is the Gold Rally Over
Replies: 160
Views: 15359

Re: Is the Gold Rally Over

I do not understand the gold market. I view gold as a wild card. Gold has no earnings, dividends, interest to provide a fair value.

I do understand how Financial Advisors and Life-cycle Glide-paths completely missed the gold boat in 2000. It would have been tough to market or justify a portfolio with gold because the recent history (especially 10 year numbers that mutual funds love to report) was poor in 2000.
by brick-house
Tue Feb 12, 2013 7:39 pm
Forum: Investing - Theory, News & General
Topic: NY Times: Vanguard: "never go public"
Replies: 40
Views: 6075

Re: NY Times: Vanguard: "never go public"

kevin21 wrote: As a boglehead, I was doing ok with a $40k salary in DC. Are you raising a family on 40k per year? Tough to do around Valley Forge, PA. I had another part-time job when I worked at Vanguard, as did many of my fellow crew members. As a former low level Vanguard Crew Member of decent tenure - I can attest to the low salaries. However, Vanguard's benefits were excellent especially the tuition reimbursement, retirement plan (14% employer contribution if I remember correctly), and partnership bonus. 3 things not factored into total compensation: 1- Vanguard's initial and on-going training was amazing 2- It is energizing to be part of a rapidly growing organization on a mission. (I did savor the free lunches for every 10 billion of...
by brick-house
Tue Feb 12, 2013 6:45 pm
Forum: Personal Investments
Topic: role of tiaa-cref traditional in portfolio
Replies: 16
Views: 2538

Re: role of tiaa-cref traditional in portfolio

Good luck getting me to give up the TIAA Traditional in my old employer's GSRA. 3% floor with potential for additional dividends backed by TIAA's General Account. GSRA contracts allow withdrawals and/or transfers - like a money market on steroids... Here is a dated PDF (2010) outlining TIAA Traditional holdings in detail as well as how it can benefit a diversified portfolio http://www.tiaa-cref.org/ucm/groups/content/@ap_ucm_p_tcp/documents/document/tiaa01011136.pdf Launched with the founding of TIAA in 1918 , the TIAA Traditional Annuity is the pioneering retirement offering on which the company built its asset and participant base. Since 1918 , a variety of new retirement products have been introduced in the marketplace, many by TIAA-CREF...
by brick-house
Sun Jan 20, 2013 9:39 am
Forum: Investing - Theory, News & General
Topic: NYT: Finding Advice for More Modest Retirement Investments
Replies: 44
Views: 7479

Re: NYT: Finding Advice for More Modest Retirement Investmen

Rick Ferri wrote: The difference boils down to service. Are you able to pick up the phone and talk to a real human being whenever you feel the need? You can do that with Rebalance-IRA for 0.50%, not with Wealthfront for 0.25%. We've been able to do it at 0.25% for the past 14 years, but we have a higher minimum account size than either two and we have a household minimum fee of $2,500, which almost covers of this personalized service (not quite). I'm just trying to add some perspective as a person who has been deeply involved in trying to provide personal portfolio advice and management at a reasonable price. It is not as simple as it looks on paper. I've seen MANY firms with the same goal come and go over the years. We're still here. :D I ...
by brick-house
Sun Jan 20, 2013 8:56 am
Forum: Investing - Theory, News & General
Topic: NYT: Finding Advice for More Modest Retirement Investments
Replies: 44
Views: 7479

Re: NYT: Finding Advice for More Modest Retirement Investmen

rick ferri wrote: The problem with all these suggestions for free and low cost services is government regulations. It is difficult to stay even and more difficult to earn a decent by profit charging a low fee and complying with SEC and other governing body regs. No firm can offer advice and then trade or rebalance individual portfolios automatically without running into reams and reams of rules. Vanguard would have had a free set-and-forget portfolio management service years ago if not for the legal issues. My firm is a mid-sized adviser with over $1.2 billion under management and we have a full time JD on staff just to try to stay even with it all. We would like to provide the same personalized advice to smaller investors (under $500k) as ...
by brick-house
Sun Jan 20, 2013 7:58 am
Forum: Investing - Theory, News & General
Topic: NYT: Finding Advice for More Modest Retirement Investments
Replies: 44
Views: 7479

Re: NYT: Finding Advice for More Modest Retirement Investmen

hoppy08250 wrote: It's interesting to see all these services popping up, along with Betterment and others. Burton Malkiel ("A Random Walk Down Wall Street") and Charles Ellis ("Winning the Loser's Game") are affiliating themselves with Rebalanace IRA, which puts you in a portfolio of mostly-index fund and ETFs with some twist (small tilt, emerging markets tilt, global bonds, etc.). Fee are 0.5% of assets, on top of ETF/index fund fees of less than 0.2%, plus trading fees (claimed to be around $50- $70) when they rebalance. There's a $500 annual minimum and a $250 start up fee. The company is an RIA. Why not Wealthfront? Small quote from the NY Times article: A company called Wealthfront, which has also put Mr. Malkiel to...
by brick-house
Tue Jan 15, 2013 7:23 pm
Forum: Investing - Theory, News & General
Topic: Gus Sauter Worried About "Bond Bubble"
Replies: 20
Views: 3687

Re: Gus Sauter Worried About "Bond Bubble"

levett wrote: What did Sauter say? (It's irrelevant what I think.) +1 Longer article quote shows Gus Sauter stating a 10 yr expectation 0f 6-9% for stocks and 2-3% for Bonds. Pretty common stock bug outlook. :beer http://bigstory.ap.org/article/vanguard-exec-shares-outlook-fears-bond-bubble Q: We're almost at 2013, but what's your outlook for the stock market, say over the next 10 years? A: The best predictor of future returns is what you're paying for earnings. And valuations now are quite reasonable. (Eds note: Stocks in the S&P 500 are trading at an average of about 14 times earnings over the past 12 months, below the 10-year average of about 15). So stocks are a bit cheap, and you can expect a reasonable return over the next decade ...
by brick-house
Sun Jan 13, 2013 7:29 pm
Forum: Investing - Theory, News & General
Topic: Bill Gross (PIMCO) likes bonds / 5-yr treasury now
Replies: 79
Views: 10123

Re: Bill Gross (PIMCO) like bonds / 5-yr treasury now

larryswedroe wrote: Brick house 1) My standard prediction is that my crystal ball is always cloudy. I did not make any predictions about commodities as you stated I did 2) There are many with excellent PAST records, Gross among them. Unfortunately that tells us nothing about the future returns. As to Gross yes he has a good record but much of it comes from taking more risk than the benchmarks. But a good record nonetheless. Good record, eh? I guess Ted Williams was just a good hitter. http://investments.pimco.com/Products/pages/346.aspx ----------------------------------------- 1 yr-------3 yr------5yr-------10 yr-------Since Inception -5-11- 1987 PIMCO Total Return-------------------10.36----7.75-----8.34-----6.81---------8.35 Barclay's U....
by brick-house
Sun Jan 13, 2013 12:55 pm
Forum: Investing - Theory, News & General
Topic: Bill Gross (PIMCO) likes bonds / 5-yr treasury now
Replies: 79
Views: 10123

Re: Bill Gross (PIMCO) like bonds / 5-yr treasury now

larryswedroe wrote:
Same guy who dumped them when the 10 year was 380 or so and then it fell by more than half. Who cares what he says? He has no more clue than the proverbial monkey (nor does anyone else)
Uhhhh... I do. I also like to hear what you say [rude comment removed by admin LadyGeek].

Please show me the proverbial monkey (or bond index) with Bill Gross's long run track record with PIMCO Total Return?

It is about the long run right? Your comment is similar to [rude comment removed by admin LadyGeek] your commodity call in 2008-2009.
by brick-house
Sun Dec 30, 2012 6:18 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

umfundi wrote: And so, What is the theory (not the prediction) for the price of gold going forward? :annoyed 2% real interest rates is one theory offered in the second link below by Eddy Elfenbein. If higher than 2%, gold's price falls. If lower than 2%, then gold's price rises. The first link is a graph showing gold's price and real interest rates since 1970. http://seekingalpha.com/instablog/98115-john-lounsbury/913531-real-interest-rates-and-gold http://www.crossingwallstreet.com/archives/2012/04/reprise-the-elfenbein-gold-model.html In my view, there are a few key takeaways. The first and perhaps the most significant is that gold isn’t tied to inflation. It’s tied to low real rates which are often the by-product of inflation. Right now ...
by brick-house
Sat Dec 29, 2012 9:52 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

Joe s wrote: I think the main point Hazlitt777 was making is not that there was deflation in 1875, but that deflation meant than gold was rising in price. Similarly, in 1917 there was inflation, which meant gold was dropping in price. Gold did fluctuate in real value during the gold standard. There are some people who allege that gold did not vary in value during the fixed gold standard, but that only refers to nominal value, not real value. These people then claim gold couldn't rise in value during the gold standard, but since we are now off the gold standard, gold is at last able to rise in value. Therefore only the data from 1971-present should be used to evaluate gold's expected return. I just don't buy this argument. Maybe it needs exp...
by brick-house
Sat Dec 29, 2012 10:01 am
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

nisiprius wrote: The fact that gold quadrupled in real value during a period of unprecedentedly mild and stable inflation, just as the fact that it halved in real value from 1910 to 1920, show that it does not really behave the way people say it "tends to" behave. And it's not fair to throw out data before 1971; we have to judge gold by what it did, not what it might have done in some ideal world where governments do not regulate anything. What "people" say it "tends" to behave in a certain way? The people with the tin hats who do not want government to regulate anything or the strawman??? :beer Gold has been a wild card since the early 1970s. Prior to the early 1970s, gold was not a wild card. Once we went fia...
by brick-house
Sat Dec 29, 2012 5:33 am
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

umfundi wrote: Deflation in 1875 is absolutely irrelevant in today's context. The Fed's actions since 2009 suggest they do not think deflation is irrelevant. Quote from Ben S. Bernanke 2002 speech titled Deflation: Making Sure "It" Doesn't Happen Here http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scient...
by brick-house
Fri Dec 28, 2012 6:10 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

umfundi wrote:
I think then the short term (1 year) outlook for stocks is mildly positive. That is not a prediction, but I think that sentiment has some basis.

For bonds, pretty flat.

For gold, I have no idea. In your words, it is a wild card.
In your words, stocks sound like a wild card as well… :?
by brick-house
Fri Dec 28, 2012 4:50 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

umfundi wrote: 2. If global economic growth in 2013 is at 2%, with no change in interest rates, what is the short term outlook for gold? What is the short term outlook for stocks? William Bernstein quote from Efficient Frontier article titled The Returns Fairy…Explained http://www.efficientfrontier.com/ef/403/fairy.htm For starters, let’s be clear what we’re talking about. Nobody knows what the market is going to do tomorrow, next month, or even in the next five years. And in the final analysis, what the market does over such relatively short periods is irrelevant to the average investor. What is important is return over the next few decades, and we do have a pretty good idea of what’s going to happen over such long time periods. We don’t w...
by brick-house
Fri Dec 28, 2012 4:27 pm
Forum: Investing - Theory, News & General
Topic: Scott Burns is investing in Gold
Replies: 126
Views: 12828

Re: Scott Burns is investing in Gold

dnamouv wrote:
If gold is not money, as people so often like to point out, how come the world's central banks to continue to be net BUYERS of gold?
According to the Bernank, it is tradition :beer

http://www.youtube.com/watch?v=2Dj9v9s9buk
by brick-house
Sat Dec 15, 2012 7:29 am
Forum: Investing - Theory, News & General
Topic: Faltering innovation confronts the six headwinds
Replies: 22
Views: 2632

Re: Faltering innovation confronts the six headwinds

fnk wrote: You're no longer necessary. Except the engineers, scientists and managers. We're the elite. And we've got to feed everybody else. Please remember to feed the farmers... :beer bobcat 2 - thanks for the articles and the perspective It's odd than when Vanguard economist Davis puts out an article proclaiming relatively rapid future economic growth most of the comments at Bogleheads are about how sage is his analysis. When one of America's leading experts on long-term economic growth writes a paper pessimistic about economic growth prospects the comments at Bogleheads turn mostly to forecasts are often wrong. :annoyed So what we appear to have here is an economist employed by a mutual fund company trying to make people feel good by pu...
by brick-house
Fri Dec 14, 2012 9:52 pm
Forum: Investing - Theory, News & General
Topic: Excellent Vanguard Article [Joe Davis, Our Economic Future]
Replies: 66
Views: 7562

Re: Excellent Vanguard Article

nisiprius wrote: I hope this curve isn't being factored into Vanguard's mutual fund management. Of course, the nice thing is, with index funds, I'm not sure how it could be. Managed Payout Funds? Quote from Joe Davis speech: Yes, amid all the talk of doom and gloom, I see flickers of light at the end of the tunnel, but my near-term outlook is a very cautious one, marked by serious downside risks, given the fiscal challenges here and around the world. As I look out over the horizon, over the next five or 10 years or even longer, I see another economic future that few are talking about—one that could, just could, return our economy back to that white light. It's driven by a force that has been more than a generation in the making; a powerful,...
by brick-house
Fri Dec 14, 2012 9:40 am
Forum: Investing - Theory, News & General
Topic: Buying an Immediate Annuity in a Traditional IRA
Replies: 9
Views: 2774

Re: Buying an Immediate Annuity in a Traditional IRA

Annuity payments count as its own RMD. The remaining balance would then have to have a separate RMD taken. Simple example. Fair warning -I am not a CPA, just another crank on the internet... 12-31-2011 IRA balance is $200,000. On Jan 3, 2012 -100,000 is annuitized - annuity payments are considered toward RMD for 2012 because RMD is based on 12-31-2011 balance of $200,000. However, that all changes on 12-31-2012. On 12-31-2012-the balance of the IRA is less the annuity balance. The annuity commuted value is not listed as part of your 12-31-2012 balance. So, for years 2013 onward - this individual would receive annuity payments; plus need to take an RMD on the remaining IRA balance. http://www.morningstar.com/cover/videoCenter.aspx?id=336278
by brick-house
Fri Dec 14, 2012 9:02 am
Forum: Investing - Theory, News & General
Topic: Buying an Immediate Annuity in a Traditional IRA
Replies: 9
Views: 2774

Re: Buying an Immediate Annuity in a Traditional IRA

My understanding is that any payment stream over ten years cannot be rolled over or deposited back into the account. Quote from IRS Publication 575 http://www.irs.gov/publications/p575/ar02.html#en_US_2011_publink1000226891 Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan except: 1.Any of a series of substantially equal distributions paid at least once a year over: a.Your lifetime or life expectancy, b.The joint lives or life expectancies of you and your beneficiary, or c.A period of 10 years or more, 2.A required minimum distribution (discussed later under Tax on Excess Accumulation ), 3.Hardship distributions, 4.Corrective ...
by brick-house
Thu Dec 13, 2012 10:03 pm
Forum: Investing - Theory, News & General
Topic: Four years to grow portfolio 20 percent
Replies: 26
Views: 3654

Re: Four years to grow portfolio 20 percent

Great thread! Reminds me of an article from Michael Kitces about how typical 401k advice leaves folks needing a doubling of their retirement in the last 10 years of accumulation. http://www.kitces.com/blog/archives/76-Is-Save-For-Decades,-Then-Quickly-Double-Your-Money-And-Retire-Your-Unintentional-Retirement-Advice!.html Where does this leave us? It means that we are probably far too reliant on compounding to work not just the way that it does, but we rely on the biggest part of the compounding curve to hit exactly when we need it - if we don't actually get that last doubling of 8% for the final 9 years, the retirement plan can be dramatically off track. In response, that means some clients might wish to save more, while others more realis...
by brick-house
Tue Dec 11, 2012 12:09 pm
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 18684

Re: "Skating Where the Puck Was"

Browser wrote:
Gee, I thought I answered that. One of us needs to re-read the previous posts. I'm out of bacon-savers.
My bad. I did not catch the bacon amongst the bull... :beer
by brick-house
Tue Dec 11, 2012 11:33 am
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 18684

Re: "Skating Where the Puck Was"

Browser wrote: Unfortunately, it may not be possible to save the bacon if stocks and treasurys head down together. During the last quarter of 2008, the correlation of the monthly returns of Gold and TSM spiked up to 0.8 as they both went down together. As we know, it was the "flight to safety" returns from Treasurys that saved the bacon then. As Dr. B points out in his great new e-book (which I have avidly consumed) the trend of the correlation between commodities and equities has moved from negative to positive. The same thing appears to be going on with gold as well. There is still a low positive to low negative correlation between bonds and commodities and between bonds and gold. So, if stocks head down along with Treasurys, wi...
by brick-house
Mon Dec 10, 2012 5:56 pm
Forum: Investing - Theory, News & General
Topic: "Skating Where the Puck Was"
Replies: 79
Views: 18684

Re: "Skating Where the Puck Was"

browser wrote
Marvelous comments, Dr. B. Now you've gone and made two groups angry with you, I'm afraid: first the Permanent Porfolioers who are counting on gold to save the bacon if interest rates take off and drag down Treasurys and Stocks like the 1970s; and second, those "expert" commentators who are endlessly chiming about all the latent "money on the sidelines" just waiting to materialize into the markets somewhere. Thank You! Now, excuse me so I can log on to Amazon and download your new Kindle book.
What's going to save the bacon of a traditional stock/bond (60 Stock/40 bond) portfolio - if treasuries and stocks are dragged down?
by brick-house
Sat Dec 08, 2012 8:10 pm
Forum: Investing - Theory, News & General
Topic: Permanent Portfolio Poll
Replies: 222
Views: 28882

Re: Permanent Portfolio Poll

browser wrote:
Will the returns of the PP be better than the 5-year Treasury over the next decade?
Who knows? However, the past decade has been OK for the PP. Vanguard Intermediate Treasury Fund has returned 5.24% over the past decade (9/30) while PRPFX has returned 10.24%.
It's all about the gold
Gold is a wildcard with no dividends, interest, and/or earnings to pin down fair value or expected return. If you view investing as straight poker with no wild cards, then gold is a fold. However, if you view investing as poker with wild cards then gold is worth holding. Who knows what the future holds? You may run into a crazy dealer that picks negative real interest rates as the wild card...
by brick-house
Sat Nov 10, 2012 8:12 am
Forum: Investing - Theory, News & General
Topic: Mr. Bogle's suggestions for retirement savings system change
Replies: 12
Views: 1904

Re: Mr. Bogle's suggestions for retirement savings system ch

levett wrote: That's pretty much how it is with those of us who are (or were) in the TIAA-CREF retirement system. +100 - Everything old is new again. This article and the new DFA offering seem to be paying homage to TIAA-CREF. "Old school" TIAA-CREF mixes (25-75% TIAA Traditional , 75-25% CREF Stock) - have provided (for several generations) a simple and effective path to essential (guaranteed floor of income) and aspirational (discretionary, legacy) goals. "New school" offerings like CREF Inflation Linked Bond and TIAA Real Estate are great additions to the old mix. (Now if they would only add some gold...) Hopefully, Roger Ferguson will use the bully pulpit and educate/advocate about the importance of a guaranteed floo...
by brick-house
Sun Nov 04, 2012 3:51 am
Forum: Investing - Theory, News & General
Topic: Perils of Crashing Through Risk Tolerance
Replies: 17
Views: 2027

Re: Perils of Crashing Through Risk Tolerance

Rick, These are two great articles. I really like the flight plan concept/narrative. Most folk's finances are more Airplane than Top Gun and they do not know if they have Clearance, Clarence or the Vector, Victor... A bear market or two exposes risk tolerance in a big way. It also exposes poor financial planning. Excessive debt, lack of emergency funds, overestimation of work stability and ability to get new/similar employment are common blind spots for many investors. The 08-09 bear caused many to lose their jobs and need money. As a result, many young(and some older) investors withdrew from their 401k at a 10% penalty to Uncle Sam and up to 50% to the bear. It wasn’t just risk tolerance that was under-estimated, it was financial stability...
by brick-house
Mon Oct 29, 2012 2:04 pm
Forum: Investing - Theory, News & General
Topic: The Flight Path Approach to Age-Based Asset Allocation
Replies: 74
Views: 12324

Re: The Flight Path Approach to Age-Based Asset Allocation

Rick Ferri wrote:
If you can find a reference, please post it. I've been aound for a long time and have never read an article or study suggesting that young people have anything other than a high equity allocation.
Great article. As I read the article, especially the graph on the "flight path" - I was reminded of Jim Otar's Unveiling the Retirement Myth book.

He has a concept of seed money formation (Chapter 19 Optimum Asset Allocation Accumulation Stage) for younger investors and his lifetime asset allocation path is similar to your "flight path."
by brick-house
Tue Oct 02, 2012 4:40 pm
Forum: Investing - Theory, News & General
Topic: This sure doesn't sound like Stay the Course to me!
Replies: 32
Views: 4486

Re: This sure doesn't sound like Stay the Course to me!

azanon wrote: Jeremy Siegel, for instance, suggests that during the storms, you read chapter 1 and 2 again of his book "Stocks for the Long Run" to remind you that not only do stocks produce superior returns to bonds over long-term periods, but they're also less risky, again, when viewed from a long term perspective. These statements are supported by data contained within his book. Jeremy Siegel has some strong critics that believe his data is flawed. An example from Barry Ritholz's August 9th blogpost titled Bonds for the Long Run: http://www.ritholtz.com/blog/2012/08/bonds-for-the-long-run-2/ But the most damning criticism leveled at SFTLR is that it uses bad data to prove its point. Not only is the fundamental premise wrong, bu...
by brick-house
Tue Aug 07, 2012 7:10 pm
Forum: Personal Investments
Topic: Most conservative/defensive portfolio possible
Replies: 36
Views: 4451

Re: Most conservative/defensive portfolio possible

nisiprius wrote:
When it really hits the fan, it is not Harry Browne who will offer you his garage to live in.
Harry Browne won't offer his garage, neither will Ben Franklin, Peter Bernstein, or Ben Graham. However, Harry Browne's 16 Golden Rules of Financial Safety will keep you in your house and in a position to offer your garage .... :beer

http://crawlingroad.com/blog/2008/12/17 ... al-safety/
by brick-house
Fri Jul 20, 2012 8:16 pm
Forum: Investing - Theory, News & General
Topic: pros and cons of gold
Replies: 84
Views: 8246

Re: pros and cons of gold

umfundi wrote:
Why not just report the correlation coefficient?
For annual returns from 1964 -2009 per William Bernstein's article Wild About Harry:

Gold had a -0.16 correlation with stocks

http://www.efficientfrontier.com/ef/0adhoc/harry.htm
by brick-house
Fri Jul 20, 2012 7:16 pm
Forum: Investing - Theory, News & General
Topic: pros and cons of gold
Replies: 84
Views: 8246

Re: pros and cons of gold

Larry Swedroe wrote: I agree that if something does well 5/6 of time it should be considered a pretty good hedge, just as something that has worked about 2/3 of the time has been a somewhat effective hedge (CCF relative to stocks while its 100% with bonds). So that point is valid. article quote: Gold provides safety when markets drop If this is true, gold should be stable when other asset markets falter. However, we see gold fell in nearly one-sixth of months when stock prices fell. If gold was a true safe haven, then we would expect very few, if any, such observations. Bottom line: Gold may not be a reliable safe haven asset during periods of financial market stress Nice demonstration of confirmation bias... :beer If gold is a "pretty...
by brick-house
Thu Jul 19, 2012 7:50 pm
Forum: Investing - Theory, News & General
Topic: forecasting the equity risk premium
Replies: 60
Views: 4850

Re: forecasting the equity risk premium

Jerry Lee wrote: I'm not so sure people retiring in 2008 consider themselves lucky They should because in March 2009 many 2008 retirees were praying for a "do-over." The quickness and strength of the stock market recovery provided that do-over and kept many 2008 retirees from bailing on their plan A. Unfortunately, some did bail. Those folks had the bad luck of underestimating their risk tolerance. The portfolio value at YE 1932 would have been a worrying $400,000, with a $30,000 withdrawal (deflation cut the withdrawal rate by 25%). That drop is merely "worrying"?? You truly are the most disciplined investor in the world. The next Dos Equis is on me... :beer By the way, you aren't going to say the investor who retired i...
by brick-house
Wed Jul 18, 2012 9:14 pm
Forum: Investing - Theory, News & General
Topic: forecasting the equity risk premium
Replies: 60
Views: 4850

Re: forecasting the equity risk premium

jerry lee wrote: Brick-house, good example, as I think we can agree this is one of the most extreme cases of bad luck imaginable (other than retiring in 1929). So I looked at an investor who retires on Jan 1 2008 with $1M needing $40k per year at the end of each year adjusted for that year's CPI--in the DFA Normal Balanced Strategy*. Further, I assumed we take the income from the side of the portfolio (stocks or bonds) that were most overweighted at that point (bonds in 08, stocks in 09/10, bonds in 11, etc.) and further rebalanced back to 60/40 if the allocation was beyond 5% after the withdrawal (to simulate the 5/25 rebalancing rule most here follow). I don't agree about 2008 being an extreme case of bad luck, instead I think 2008-presen...
by brick-house
Tue Jul 17, 2012 8:50 pm
Forum: Investing - Theory, News & General
Topic: forecasting the equity risk premium
Replies: 60
Views: 4850

Re: forecasting the equity risk premium

jerry lee wrote: But the most useful way to use this info isn't to vary your allocation from 80/20 to 40/60 (let's say) based on your future forecasts, it's to know: (a) regardless of expected returns, at your given allocation, you should expect X% decline at any point in time (say 25% for a 60/40) (b) you might need to work an extra year or two, or save 10% more to make up the retirement shortfall created by lower returns (c) you might need to reduce your inheritance expectations, or cut spending from 4% to 3% for a while to preserve portfolio value at a lower return level You can see this in a few of the posts I have made in another thread. Looking at the classic "DFA Normal Balanced Strategy" (60/40) since 2000, it's only had a...
by brick-house
Sun Jul 15, 2012 6:35 am
Forum: Investing - Theory, News & General
Topic: NestWise buys Veritat to bring financial planning to masses
Replies: 13
Views: 2365

Re: NestWise buys Veritat to bring financial planning to mas

Bobk wrote: Here's one by Jason Zweig. Veritat charges a $250 upfront planning fee, plus $40 a month (for a family, $25 for an individual). That includes three initial consultations plus quarterly and annual reviews, all conducted via online video chat. Link to Zweig's column in WSJ. http://online.wsj.com/article/SB10001424052748703988304575413422740203834.html The pricing sounds amazing, but my cynical side worries about the up-sell. $250 upfront and $40 month does not seem like a great deal of revenue. Deeper inspection of the Vertitat website shows an optional portfolio management service priced at .7% (.8378% when ETF costs are included). Since Veritat Advisors are not on a vow of poverty, it seems like Veritat advisors would have a str...