Search found 1303 matches

by DaveS
Mon May 27, 2013 3:06 pm
Forum: Investing - Theory, News & General
Topic: Mankiw suggests Vanguard Total World Stock ETF
Replies: 12
Views: 2718

Re: Mankiw suggests Vanguard Total World Stock ETF

Yes that is one problem with the world fund, it has a higher expense ratio than if you held the total US market etf and Total International etf. Another problem is the number of stocks. Vanguard World has about 4k stocks if you bought total US and Total Int. You would have about 6k stocks. Dave
by DaveS
Fri May 17, 2013 6:59 pm
Forum: Personal Investments
Topic: Muni Bond ETFs -- No Vanguard options?
Replies: 18
Views: 3615

Re: Muni Bond ETFs -- No Vanguard options?

Yup. If your too snooty to have an admiral fund, the ETF TFI is a very good substitute. Dave
by DaveS
Fri May 17, 2013 9:36 am
Forum: Personal Investments
Topic: Impact of future earnings on portfolio mix?
Replies: 1
Views: 400

Re: Impact of future earnings on portfolio mix?

Larry Swedroe discusses this in his recent books. Do you have less of a need to take risk given your financial picture. Are you investing for yourself or your heirs. Mostly he cautions, the richer you are the less risk you need to take on. He refers to rich people who take a flyer on some risky asset class and loose like 30% of their net worth. Prompting the question was that necessary. Dave
by DaveS
Fri May 17, 2013 2:03 am
Forum: Personal Investments
Topic: Thought on my portfolio
Replies: 4
Views: 819

Re: Thought on my portfolio

Stop buying individual stocks. Your expenses to have the portfolio you have must be really substantial. Money that goes to commissions does not earn you money. Buy indexed etf's or invest in funds at a low cost mutual find provider such as Vanguard. Secondly, an "emergency fund" consisting of stocks does not really protect you if the emergency is losing your job in times when the stock market is also down such as January 2009. Lastly at your level of investment you should be in a 3 fund portfolio rather than odd lots of individual stocks. Look at the sample portfolio's in the wiki. Investing successfully is a long term and slow and steady process not a speculative series of guesses which is what seems to have gotten you to where y...
by DaveS
Thu May 16, 2013 10:50 am
Forum: Personal Investments
Topic: Allocation in Multiple Accounts - Portfolio Review
Replies: 5
Views: 817

Re: Allocation in Multiple Accounts - Portfolio Review

I don't have a problem with what you propose which is to in general replicate the target fund. From your library take out one of the early Swedroe Books or William Bernstein books. The Swedroe books are The Only Investment Guide You Will Ever Need, and What Wall Street Does Not Want You to Know. The Bernstein, The Intelligent Asset Allocator, or Four Pillars of Investing. If you read and absorb them you will make the following changes. 1) You wont bother with the mid cap fund. Mid caps just perform between small and large, so you just hold the two ends tilting to small if your not risk adverse. 2) You will have small value funds instead of small blend funds. (If available). The reason is that over longer periods of time small growth is one ...
by DaveS
Tue May 14, 2013 6:44 pm
Forum: Investing - Theory, News & General
Topic: The new profitability factor, US and int'l evidence
Replies: 172
Views: 19887

Re: The new profitability factor, US and int'l evidence

I spent several years getting used to "Value" stocks being the stocks of distressed companies, an exact quote from your first book. As a result it's going to take a while to embrace the concept that profitable, i.e. companies that are not distressed, will out perform. I think Marx may have been fooled by some statistical fluke such as unprofitable tech companies falling from way too lofty heights in 2000, rather than hitting on some long term predictor. Dave
by DaveS
Mon May 13, 2013 10:25 pm
Forum: Personal Investments
Topic: Portfolio Review
Replies: 3
Views: 1002

Re: Portfolio Review

There is only one low cost bond fund that you list. I don't know anything about it When you have an asset class that is now only yielding 2%, lowering costs is even more important than usual. Buy it, or get some of the 2015 or 2020 target fund - which is a sneaky way of buying mostly bonds.
by DaveS
Sun May 12, 2013 9:54 am
Forum: Investing - Theory, News & General
Topic: Bond bubble + Bnd total bond 80 percent turnover?
Replies: 12
Views: 3161

Re: Bond bubble + Bnd total bond 80 percent turnover?

I defiantly am not criticizing the fund which I happen to hold. About 7 years ago Total Bond held commercial paper with maturities as short as 90 days and their turnover was more than 100%. Now they don't buy anything with a maturity shorter than a year. Once you understand the reason for it, the turnover is not harmful. Dave
by DaveS
Sat May 11, 2013 6:57 pm
Forum: Personal Investments
Topic: Portfolio Review
Replies: 14
Views: 3336

Re: Portfolio Review

Don't walk, run away from those high cost funds in your 401. The extra 1% a year just for the management fee adds up to a lot of lost appreciation over 30+ years. The turnover is less important than the fee because your not subject to gains taxes in a tax free account. But the brokerage commissions for high turnover funds are not included in the high fee. I would just ask the wife to hold one of the target funds and you have something like a 4 fund portfolio. Total Stock, Total International, Small Value and Total Bond or their ETF's. Then you buy one of the etf's every 3 months and make that your contribution for the year for that fund. you can rebalance by buying a little less or more if a fund is ahead or behind others. I don't understan...
by DaveS
Sat May 11, 2013 6:33 pm
Forum: Investing - Theory, News & General
Topic: Bond bubble + Bnd total bond 80 percent turnover?
Replies: 12
Views: 3161

Re: Bond bubble + Bnd total bond 80 percent turnover?

My source is that i have owned TBM for years and periodically glance at the holdings. Dave
by DaveS
Sat May 11, 2013 8:02 am
Forum: Investing - Theory, News & General
Topic: Bond bubble + Bnd total bond 80 percent turnover?
Replies: 12
Views: 3161

Re: Bond bubble + Bnd total bond 80 percent turnover?

The problem isn't the fund it's the index. The idea of the agg. bond index is to create a statistically accurate reflection of the bond market. If they have a 30 year bond one year, the next year you would think it would be the 29 year bond. No, they sell it and replace it with a more statistically correct 29 year bond. Then the next year they sell that and get a statistically perfect 28 year bond. So the turnover is fairly high. On the other hand brokerage commissions are not high these days with computerized trading, and bonds don't generate a lot of short term capital gains. So the turnover is not that important. Dave
by DaveS
Thu May 09, 2013 10:09 pm
Forum: Personal Investments
Topic: Keep All Bonds in Advantaged or Take Advantage of Value?
Replies: 5
Views: 1128

Re: Keep All Bonds in Advantaged or Take Advantage of Value?

I don't know your state, mine does not have an income tax so I can do national muni bonds which are more diversified than single state. The thing I noticed about your post is you said you have three value funds. Most who tilt to value don't bother with having a mid cap value fund. The theory being that they perform in between small value and large value and thus add little to a portfolio. Do away with the mid value fund and you might think if you have enough space for bonds in tax free. Dave
by DaveS
Sun May 05, 2013 3:30 pm
Forum: Personal Investments
Topic: Investment Strategy Thoughts (Attorney)
Replies: 5
Views: 876

Re: Investment Strategy Thoughts (Attorney)

I am a retired lawyer. First, you and yours should realize that your income, even in a high expense city, is above average for lawyers, so you should not quit your jobs unless you have offers paying as much. Secondly, paying down debt should be only after you have maximized contributions to tax free investment vehicles. The reason for this is that tax free compounding benefits you year after year till the money is withdrawn, paying down debt only benefits you for the period till the debt is paid off. Dave
by DaveS
Sun May 05, 2013 3:10 pm
Forum: Personal Investments
Topic: Portfolio Review
Replies: 11
Views: 2259

Re: Portfolio Review

OK I will bite. 1) The book you want to get from your library is the first Swedroe book, The Only Guide to a Winning Investment Strategy You'll Ever Need. Or one of his later books. 2) A portfolio that contains some bonds, over longer periods, consistently beats a 100% equity portfolio because it does not go down as much on the bad equity years. So go 10% intermediate bonds at least in a tax free account. 3) Over longer periods of time the lowest performing asset class is always Small Growth. So why do you want to have a small fund with the growth component, when you could have VBR which is just small value? The reason for this seems to be that small growth stocks are always over priced by people hoping to hold the "next Microsoft"...
by DaveS
Sat May 04, 2013 8:38 pm
Forum: Personal Investments
Topic: Young Investor With Questions
Replies: 3
Views: 752

Re: Young Investor With Questions

Here is an answer from an old investor who learned things the hard way. First, I don't know what the Capital Preservation fund is. Secondly, I think the rest of what your doing is fine. I note you picked lower cost index options, and that your stock, bond, and international allocations are rational based on your station in life. 5% in company stock is not extreme, anything above 10% is extreme. Dave
by DaveS
Sat May 04, 2013 6:52 pm
Forum: Personal Investments
Topic: First time poster, 30 year old with investment plan
Replies: 17
Views: 3456

Re: First time poster, 30 year old with investment plan

At your level of investing most Bogleheads recommend a 3 fund portfolio. 1) A total US market if available or 500 index if not; 2) a total international/emerging fund 3) an intermediate bond fund such as Vanguard Total Bond. 1) might be 50%, 2) 30% and 3) 20% of funds invested, not counting emergency fund. You seem to have picked funds that have flashy names, high costs, and considerable overlap.
by DaveS
Fri May 03, 2013 9:54 pm
Forum: Personal Investments
Topic: Splitting my portfolio across taxed/non-taxed accounts
Replies: 7
Views: 3679

Re: Splitting my portfolio across taxed/non-taxed accounts

What your proposing makes sense. I don't have a problem with 80/20 either. Since I am a bit more than twice your age I will tell you that the size of a bond holding should be high if you think your the kind of a person who would panic and sell out at a stock market low. If you can stand the volatility of stocks without selling out at a low then you can get by with less bonds. Take a look at a ten year graph for stocks and look at the 3rd quarter of 2008. If that kind of decline would have prompted you to sell out at a low, then you need more bonds. Dave
by DaveS
Fri May 03, 2013 7:20 pm
Forum: Personal Investments
Topic: Requesting Help with 401k Options
Replies: 3
Views: 935

Re: Requesting Help with 401k Options

Not having really good retirement options is fairly common. I would just have the 500 index and the Pimco bond fund. Then I would hope to soon be able to open an additional account and put Vanguard Total International there. The alternative is a much higher cost Fido target retirement fund. Costs are something you should control so I would not go that route. Dave
by DaveS
Wed Apr 24, 2013 5:38 am
Forum: Investing - Theory, News & General
Topic: Proposed 401K funds
Replies: 13
Views: 1083

Re: Proposed 401K funds

It looks very good to me. There are a couple of funds I would not bother with. Mid value and Intermediate Treasury come to mind. If I were to add one fund it would be Vanguard Intermediate Term Investment Grade bond fund. Recently Jack Bogle in an interview called for a corporate bond index. The fund I suggested is an active corporate very close to what he proposed. Dave
by DaveS
Fri Apr 19, 2013 1:41 am
Forum: Personal Investments
Topic: Which portfolio is better?
Replies: 5
Views: 1079

Re: Which portfolio is better?

28% in Emerging is an overweight. Also the VIG etf is similar to the large cap portion of total market. I don't think natural resources is really an asset class. The combination of funds seems to be based on speculative tilt based on hunches that might not pay off. Why not three funds, Vanguard Total Stock Market, Vanguard Total International and a muni bond fund. I perfer TFI to MUB because it has a shorter duration, or if you don't mind funds instead of ETF's, Vanguard has some excellent muni funds. If you just had equal weights to the two total funds you would have almost the same composition as VT but at a lower combined cost. That way you would have a piece of about 8 thousand stocks. VT is a slimmed down version of the totals with onl...
by DaveS
Fri Apr 19, 2013 1:26 am
Forum: Personal Investments
Topic: bond funds
Replies: 1
Views: 516

Re: bond funds

That would give you an average duration of about 3.5 which is conservative but perhaps appropriate given your outlook. By comparison total bond is about 5.6. The yield is going to be low, around 3% or less. But yields are pathetic everywhere and trying to do better yield wise means taking on more risk than the funds you have selected and is not wise in this market. So I would say do it. You might consider the Short Term Investment Grade fund, but if you get that your concentrating nearly all your bond money in corporates albeit investment grade ones which are low risk. Dave
by DaveS
Fri Apr 12, 2013 11:06 pm
Forum: Personal Investments
Topic: Portfolio Help - bond fund advice needed
Replies: 2
Views: 703

Re: Portfolio Help - bond fund advice needed

With interest rates at historic lows the most likely direction for them is to rise at some unknown point in the future. If and when that happens a bond fund will decline by it's duration for each 1% increase in rates. Historically rates average around 5% and are about 2% now. So if rates return to normal in one year your typical short term bond fund with a duration of around 3 will decline by 9% and make a bit of that back by having a higher yield. Your typical intermediate term bond fund with a duration of 6 will go down 18% and yield a bit more after that. Your typical long term fund with a duration of say 20 will go down 60% and yield a bit more after that. Do you now understand why your holding long term bonds is taking a big risk? I wo...
by DaveS
Sat Apr 06, 2013 9:10 am
Forum: Personal Investments
Topic: Need Advice on AA. New here [Portfolio help]
Replies: 12
Views: 1702

Re: Need Advice on AA. New here [Portfolio help]

There is a lot of confusing noise in the investment world. So you don't want to pay too much attention to people who are paid to talk 30 + minutes a day. They have to say something even if they can't think of anything intelligent to say. If you put all your money into something like Life Strategy Moderate Growth that is not like putting all your eggs in one basket because that fund is a collection of US, International and bond funds. It's not a bad allocation for someone your age. So look and see what it's composed of. I assume that your only going to hold it in taxable and that your tax free is going to be all bonds. But the life strategy fund has one disadvantage, it's bonds are taxable. I am about your age a station in life. You did not ...
by DaveS
Sat Apr 06, 2013 8:46 am
Forum: Personal Investments
Topic: Portfolio Configuration for New Investor Age 27
Replies: 12
Views: 1317

Re: Portfolio Configuration for New Investor Age 27

I doubt that the 2050 is the only Target Date fund available to you. If they have a 2040 or even a 2030 it should be higher in bonds than the longer fund. So you could shorten the target and get to the allocation you want for now, change it in the future if you want. You don't worry about paying capital gains taxes in a tax free account. There is nothing wrong about your plan to add more bonds in an IRA either. Until you have more money I would not bother going to multiple funds. Dave
by DaveS
Tue Apr 02, 2013 8:47 am
Forum: Investing - Theory, News & General
Topic: Munis and Stockton California
Replies: 18
Views: 2580

Re: Munis and Stockton California

The default rate on muni's is practically non existent. Last time I looked which was more than a year ago it was .003% At the state level there has not been a Governmental Operation bond default since Arkansas in the dust bowl era. Think of all the municipalities in the US and I can practically name the ones who have filed Chapter 9's in the last three years, Stockton, Vallejo, Jefferson County Ala. one city in western Pa was close to it. I cant remember if it went over the hill. Revenue bonds have defaulted more frequently. Those are bonds that are not tax free under the Alternative Minimum Tax. If you have a non AMT fund you don't own any revenue bonds. For example limited term tax exempt, intermediate term tax exempt at Vanguard are AMT ...
by DaveS
Mon Apr 01, 2013 9:55 am
Forum: Investing - Theory, News & General
Topic: I Found a Great Hedge Fund.
Replies: 7
Views: 1994

I Found a Great Hedge Fund.

Happy April Fools Day folks. Dave
by DaveS
Fri Mar 29, 2013 12:24 am
Forum: Personal Investments
Topic: Requesting help with portfolio restructuring
Replies: 5
Views: 1163

Re: Requesting help with portfolio restructuring

For all that typing you deserve more response than you have been getting. Here are some general observations. You might consider the fact you have a defined benefit plan as making retirement less of a risk, so maybe you can afford to have less in bonds. I am kind of the reverse. I worry about the long term prospects of any company or govt. that still has a defined benefit plan after such plans devastated the steel and auto industries and some cities like Vallejo. I don't have a problem with your saving for the down payment before you pay down the debt. You could use half the emergency funds for the down payment on that house now while rates and prices are favorable. Just a thought. I did not look to closely at all the 403 options because so...
by DaveS
Thu Mar 28, 2013 11:34 pm
Forum: Personal Investments
Topic: When to dump bonds? [Portfolio help]
Replies: 21
Views: 3806

Re: When to dump bonds? [Portfolio help]

I don't agree with a lot of the advice you have been given. 1) Regarding age in bonds etc. Your parents are well enough off that they are really investing for their heirs anyway. So I don't have a problem with 30% or maybe even 20% bonds. In a couple of the Swedroe books he refers to possible allocations based on average age in bonds i.e. parents and heirs. 2) Interest rates are notoriously hard to predict, so fears of a "bond collapse" similar to a real estate collapse are to be taken with a grain of salt - like all predictions. 3) Two things should affect you and your parents finding a comfort level, you have not told us how much of the real estate is free and clear or nearly free and clear. Not making a mortgage payment is like...
by DaveS
Mon Mar 25, 2013 12:03 am
Forum: Personal Investments
Topic: What to do with new money?
Replies: 1
Views: 821

Re: What to do with new money?

I am about your age and station in life. I look at what you have and think, this guy needs more international/emerging. So that is where I would put the money up to the point where your 30-40% international. My reasoning is diversity, and because international stocks have been kept down by events in Europe which appear to be coming to and end, also because of the former factor, the dividend yield on international are up to the point where they are better than you will get on bonds. Yes you pick up more volatility, but with interest rates at historic lows with the most likely direction up at some unknown point in the future, bonds might be volatile too. Dave
by DaveS
Fri Mar 22, 2013 7:36 pm
Forum: Personal Investments
Topic: Investment Advice
Replies: 7
Views: 1804

Re: Invested in a bunch of funds (need help on Roth IRA)

I had a friend who some time ago worked for a company with a 401 with NY life. It was a very expensive plan and the costs take a big chunk out of appreciation. And when she changed jobs, they socked her with a outrageous withdrawal fee. Anyway, your idea of the Roth at Vanguard is a good one and STAR is a good place to start, then you could go to Target Retirement or a low cost bond fund or other fund. Your statement about the ideal portfolio is not necessarily ideal. Bonds are for stability, so you want some. How much varies with your risk tolerance and goals. More bonds if the goal is to be able to withdraw the money in a short time, less bonds if the goal is long term like retiring in 30+ years. Risk tolerance can be explained this way. ...
by DaveS
Tue Mar 19, 2013 10:17 pm
Forum: Personal Investments
Topic: Looking for some advice with an upcoming windfall
Replies: 3
Views: 671

Re: Looking for some advice with an upcoming windfall

In addition to the wiki article a rule of thumb is that if your saving for a down payment or some other event. Use a bond fund with a duration no longer than the period till you will need the money. Vanguard Short Term Investment Grade comes to mind if you likely to need the money in a couple of years. Dave
by DaveS
Tue Mar 19, 2013 10:09 pm
Forum: Personal Investments
Topic: What to do with governmental 457?
Replies: 7
Views: 675

Re: What to do with governmental 457?

I would roll it to Vanguard IRA in an instant. Your paying about twice what they charge and you will be paying that much more for 30 years or more. If you have some doubts about where to put it just pick a Vanguard target retirement fund. Also having an IRA invites you to make contributions to it into the future. You wont be able to add to the 457 once your out of government service. Dave
by DaveS
Mon Mar 18, 2013 10:51 pm
Forum: Personal Investments
Topic: Portfolio Review/401k Advice - Age 29
Replies: 4
Views: 2810

Re: Portfolio Review/401k Advice - Age 29

You know, the choices in the 401 are so bad it's as if someone got paid off. I would read the article in the wiki about how to talk to your HR person about what is in the 401. Search for the article "How to campaign for a better 401k." Then I would get some co workers together and have the conversation. You are paying more than 1% er when they could have indexes for one tenth that. You have a core bond offering charging .96 to manage bonds paying 3% before the fee. And if you don't do anything about it, on that bond fund your going to be losing appreciation like that to costs for the next 30 years. Dave
by DaveS
Sun Mar 17, 2013 12:23 am
Forum: Personal Investments
Topic: Portfolio Questions
Replies: 6
Views: 881

Re: Portfolio Questions

Yes I would split it. Dave
by DaveS
Sat Mar 16, 2013 12:43 am
Forum: Personal Investments
Topic: Newbie real estate question
Replies: 12
Views: 1973

Re: Newbie real estate question

I am a bankruptcy lawyer. I have a lot of customers who got into real estate without knowing what they were doing. Dave
by DaveS
Thu Mar 14, 2013 11:31 pm
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 3
Views: 762

Re: Portfolio Advice

I can harp quite a bit about REIT. It consists of 2% of the total US stock market. So 10% is to overweight it by 500%. Then you look at where it is valuation wise. In 1999 REITs sold for about 70% of the value of the underling real estate. Today it's 230%. In 1999 REITs sold for about 15 times earnings, now they are up to 60 times earnings because everyone wants dividends. So I don't say don't invest in them but they are beginning to look like tech stocks in the 90's. The principle reason to hold them is because they have a low correlation with other US stocks. I.E. they tend to do well when others do poorly. But if you have too much of them they are the tail wagging the dog. You do well when other stocks do poorly and you do poorly when ot...
by DaveS
Thu Mar 14, 2013 4:01 am
Forum: Personal Investments
Topic: Making Changes - See What You Think
Replies: 4
Views: 807

Re: Making Changes - See What You Think

I don't know who gave you the idea about bonds, vs. stocks in tax free being an issue because it's not. You want tax efficient assets in taxable and tax inefficient assets in tax free. In order of tax efficiency worst to best, taxable bonds, REIT, Small Value, Large Value, Large Blend, International/Emerging due to the foreign tax credit. Sometimes people's 401s may have bad bond or stock choices and you depart from the above, but that is the only reason I can think of. Or maybe your saving for something like a house down payment in a couple of years and you don't want to have it in an asset that might go down just before you need it. Now you think for a minute. Why would you want tax inefficient assets in taxable, and pay higher taxes for ...
by DaveS
Thu Mar 14, 2013 3:45 am
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 3
Views: 762

Re: Portfolio Advice

The Vanguard Small Value fund is 15% REIT so you should factor that into your allocation. Frankly REITS are now so over valued I just have the Small Value fund. Tilting to small value works over longer periods of time. Since Financial stocks are also value stocks the financial crash of 2008 makes their recent record look bad. That might be why your having second thoughts. My impression is the G fund is based on the same index as Vanguard Total Bond. If that is correct returns should be the same. I would go there before buying muni's in taxable. And go there over the fidelity choices. Note you did not list the expense ratios. The lower cost bond funds are really recommended because bonds yield so little these days before costs. Tilting is a ...
by DaveS
Thu Mar 14, 2013 3:22 am
Forum: Personal Investments
Topic: Floundering seniors must preserve capital - maximize income
Replies: 15
Views: 3469

Re: Floundering seniors must preserve capital - maximize inc

I get the impression that for me to give you a specific plan that you would actually follow would require something about as long as a book. Instead go to the library and check out one of the following. Bernstein, The Investors Manifesto, or The Four Pillars of investing. Or Swedroe, What Wall Street Does Not Want You to Know, or The Only Guide To Investing You Will Ever Need. All have lengthy explanations on how to set up a portfolio suitable for the common man. If you must buy the book all are still in print. Dave
by DaveS
Thu Mar 14, 2013 3:10 am
Forum: Personal Investments
Topic: Where to put Profits? Don't trust Bond Funds
Replies: 37
Views: 4495

Re: Where to put Profits? Don't trust Bond Funds

Send it to me. Alternatively I-bonds from treasury direct or CD's. They don't lose principle if rates rise. Frankly your fear of a bond decline due to rising rates is overstated. Something like Vanguard Short term Investment Grade has a short enough duration that it does not go down much in a rising rate environment, and the coupon goes up due to the higher rate. Dave
by DaveS
Wed Mar 13, 2013 11:36 pm
Forum: Personal Finance (Not Investing)
Topic: Sallie Mae loan servicer / death of co-signer
Replies: 93
Views: 42745

Re: Sallie Mae loan servicer / death of co-signer

Legally the decision to accelerate has to be made in good faith. The legal basis is that in every contract is an implied covenant of good faith and fair dealing. This is often the theory advanced in lender liability cases. So the fact the person you talked to might have been having a bad day, is not the last word on this issue. The fact the loan is not in default is a good indication that any decision to accelerate payment is not a good faith decision. Frankly I don't think anything is going to happen as long as payments remain current. But if you want to vent, find out who regulates the servicer, and call or look at their web page and see what kind of complaint mechanism exists. Usually if you look at SIMM associates web page it will say w...
by DaveS
Mon Mar 11, 2013 10:06 am
Forum: Personal Investments
Topic: help with overall portfolio, 42yo
Replies: 3
Views: 830

Re: help with overall portfolio, 42yo

If I had your attitude about getting into a mature market, I would pay off the mortgage with that cash. Your allocation is quite normal and can stay that way. Dave
PS World wide International stocks are not hitting new highs. You did not say what your US v. International/Emerging allocation is. If it's lower than 1/3rd of equities, I would buy Total International to get it up to that level. Some go to 50/50. Dave
by DaveS
Mon Mar 11, 2013 10:00 am
Forum: Personal Investments
Topic: Bond funds? More risk vs stocks, given current Fed policy?
Replies: 19
Views: 3111

Re: Bond funds? More risk vs stocks, given current Fed poli

ddb wrote:
Chan_va wrote:...but know that historically, having a small bond component actually improves long term expected returns.
Source?
This is in the first two Swedroe books. Also look at Bernstein, Four Pillars of Investing. More accurately the statement should be that over long periods 90/10 to 80/20 does better than 100% equities. The reason is that smoothing out market bottoms with even a small allocation to bonds, is better than 100% equity's volatility. Dave
by DaveS
Mon Mar 11, 2013 12:33 am
Forum: Personal Investments
Topic: Would principal in bond funds be decimated at 1980s rates
Replies: 6
Views: 1492

Re: Would principal in bond funds be decimated at 1980s rate

If memory serves the rates on long term treasuries went from about 5 to 11%. over about a 3 year period. But that just my memory. So the rate increases were more than 1% during a couple of years of that period - This I definitely remember. If you had intermediate bonds you were looking at declines approaching 10% Long term bonds got hit with like 30% losses. GNMA's were like 12% up from 5% a few years earlier. The bad years were 79-80. So that what i remember. Sorry I cant refer you to a site with actual rather than remembered statistics. Dave
by DaveS
Mon Mar 11, 2013 12:21 am
Forum: Personal Investments
Topic: Request help with portfolio overhaul.
Replies: 6
Views: 1200

Re: Request help with portfolio overhaul.

Both you and yours have been violating an important rule - costs matter. The 1% in added costs over a 30 year period adds up to a lot of lost appreciation. If you go over to the Vanguard site and find their cost analyzer and run the expense ratios against your typical Vanguard with an average return of 8-9% a year you will be stunned at the amount your loosing to expenses. The Schwab index funds until quite recently followed the same index providers as Vanguard. So they are fine. You don't need to roll the funds to Vanguard or go the ETF route. Your wife ought to pick one of the lower cost funds in her 457 and you adjust for what she has elsewhere. I would pick Life strategy Growth because there is not that much difference between .17 ER an...
by DaveS
Sun Mar 10, 2013 11:42 pm
Forum: Personal Investments
Topic: 28, new to investing, what would you do with my 3k tax retur
Replies: 12
Views: 1742

Re: 28, new to investing, what would you do with my 3k tax r

I cant tell if I agree with the prior post or not. I think one should maximize tax free compounding. That grows for 30 years without taxation. With any kind of IRA once the calender goes beyond April 15th contributing for that year is gone. So I would use the money in the Roth till you reach the contribution limit and then pay down debt. I also think target retirement is fine for someone with limited funds to invest. So I would not hunt up another fund. I agree its nice to tweak your withholding to limit refunds but with the recent changes in the tax code and withholding and further limited deductions it's a hard target to hit. You have a great future. Dave
by DaveS
Fri Mar 08, 2013 3:24 am
Forum: Personal Investments
Topic: Muni bond call date
Replies: 4
Views: 682

Re: Muni bond call date

My experience is that if the bonds coupon is higher that market rates the muni will always be refinanced i.e. called. I am so used to this I know the call dates of the bonds I have in a ladder, I can't remember the dates they mature. I would worry if a muni paying maybe 4.5% went past a call date. That might indicate the issuers finances were so bad they could not refi. Dave
by DaveS
Fri Mar 08, 2013 3:14 am
Forum: Investing - Theory, News & General
Topic: Dow who? New record high for gold
Replies: 13
Views: 2218

Re: Dow who? New record high for gold

I think we are getting trolled. Gold was at $1720 per ounce last October and is $1577 per today. Dave
by DaveS
Thu Mar 07, 2013 9:28 pm
Forum: Personal Investments
Topic: Dive into bonds?
Replies: 38
Views: 4871

Re: Dive into bonds?

I can give you a couple or rules of thumb. 1) I cant for the life of me figure out why you have 500 index, mid cap funds, and small cap funds in each account. My bet is you could get a total stock market fund in one account at least that would be better, and less expensive than holding the three funds. For you information the total stock market is approximately 70% large, 20% Mid and 10% small. So if you wanted to tilt to smaller stocks you could own total and then some small in addition. 2) People who have both taxable and tax free accounts want to have tax efficient assets in taxable accounts, and tax inefficient in tax free. In order of tax efficiency worst to best; taxable bonds, REIT, Small Value, Large Value, Large Blend, Internationa...
by DaveS
Wed Mar 06, 2013 11:32 pm
Forum: Personal Investments
Topic: Which fund is best for a taxable account?
Replies: 5
Views: 1268

Re: Which fund is best for a taxable account?

Morningstar does some calculation regarding tax efficiency. I never pay much attention to it. They peg the ETFs this way;

VSS tax efficiency .64 - cap gains potential 6.45 VXUS tax efficiency .74 - cap gains potential 4.19 VWO .53, .49 cap gains potential 5.86.

I suppose that makes VWO the most efficient. of the three.