Search found 3752 matches

by Aptenodytes
Wed Jan 24, 2024 10:34 am
Forum: Personal Finance (Not Investing)
Topic: Retiring vs Resigning
Replies: 28
Views: 4309

Re: Retiring vs Resigning

As someone said, it is company-specific. But retirement can't possibly worse than resigning, so why not plan on that? That's what I did when I changed jobs after meeting the age and seniority requirements for retirement, and I was pleasantly surprised at some of the perks, especially the ~$1,400 annual health-cost subsidy (through an HRA).
by Aptenodytes
Sat Nov 18, 2023 9:30 am
Forum: Personal Investments
Topic: Best time to draw money from HSA
Replies: 42
Views: 5162

Re: Best time to draw money from HSA

When the money goes into the HSA the account is like a Roth with added benefits (tax-deductible contributions). Once the money is in the HSA the account is like a Roth (tax-free withdrawals) with added hassles (record keeping, non-spouse inheritance). Therefore whenever your post-retirement tax planning would have you draw from a Roth, draw from the HSA first (staying within the qualified expenses you've accumulated). You get the same tax benefits while lowering the hassles.
by Aptenodytes
Mon Nov 13, 2023 4:07 pm
Forum: Personal Finance (Not Investing)
Topic: Estimating Life Expectancy Accurately - Defying the Lake Wobegon Effect
Replies: 202
Views: 23451

Re: Estimating Life Expectancy Accurately - Defying the Lake Wobegon Effect

Here is the life expectancy calculator that I like the best. It’s produced by the Society of Actuaries and the American Academy of Actuaries, which are the two professional actuarial organizations. I think this is a lot more reliable than Social Security tables. https://www.longevityillustrator.org/ I don't have a basis for judging if it is more reliable, but it is definitely more useful. Especially the inclusion of joint probabilities taking into account life expectancy of two spouses/partners. E.g. for me and my wife it shows: Years left Spouse 1 Spouse 2 Either Both 0 100% 100% 100% 100% 5 93% 96% 99% 89% 10 84% 89% 98% 75% 15 70% 79% 94% 55% 20 51% 62% 82% 32% 25 30% 41% 58% 12% 30 12% 19% 29% 2% 35 3% 6% 9% 1% 40 1% 1% 1% 1% 50 0% 0% ...
by Aptenodytes
Sun Jul 02, 2023 7:29 am
Forum: Personal Consumer Issues
Topic: Neighbors asked my spouse for money to cut down their trees
Replies: 259
Views: 27830

Re: Neighbors asked my spouse for money to cut down their trees

If a properly maintained tree on your neighbor's property causes damage to you, the neighbor has no liability. Otherwise the neighbor has full liability. Properly maintained trees can cause damage, e.g. if a storm knocks down a large branch. So normally you have an incentive to pay a neighbor to remove or cut back a healthy tree if the risk bothers you, but not a dead tree. You'd want to document the condition of the dead tree in the event your insurance company needs to go after them to collect damages.
by Aptenodytes
Fri Jun 30, 2023 10:26 am
Forum: Investing - Theory, News & General
Topic: Misvaluing retirement accounts when rebalancing
Replies: 43
Views: 3175

Re: Misvaluing retirement accounts when rebalancing

Aren't you over-complicating things?

You set your AA in terms of all your holdings, treating them as if they were one account. That's how you manage the risk/reward tradeoff.
When you decide how to implement your AA target you take into account differences in tax implications across the accounts. That's how you minimize expected tax burdens.
You don't need to calculate asset value differently across accounts.
by Aptenodytes
Fri Jun 30, 2023 10:07 am
Forum: Investing - Theory, News & General
Topic: When to reduce risk in Roth accounts?
Replies: 35
Views: 4050

Re: When to reduce risk in Roth accounts?

I'm a year or two from retirement and thinking about this question myself. In my case it all comes down to taxes. For the first 3-5 years of retirement I won't be taking social security payments, so all my expenses will be met with withdrawals from savings. Even after social security starts taxes will matter. I'll be aiming to target where those withdrawals come from so as to: stay within the 0% capital gains tax bracket stay within the 12% federal income tax bracket avoid tax on social security income So whereas 10 years ago my Roth and HSA allocations pretty much mirrored my overall AA, I've recently started derisking those accounts a bit so that I can reduce the possibility that the money needed to meet those tax goals isn't there due to...
by Aptenodytes
Mon Jun 26, 2023 9:13 am
Forum: Personal Finance (Not Investing)
Topic: Checking Account - Minimum Balance?
Replies: 88
Views: 7212

Re: Checking Account - Minimum Balance?

Many banks now offer overdraft protection at no charge , so having your balance go negative once in a while is not necessarily the horrible thing it used to be. No bounced checks, no punitive fees. in effect, for many of us the gain from reducing checking balances entered free-lunch territory (because of high money-market rates). Fine print always matters, of course. My local bank, for example, only rebates other-bank ATM fees if my balance is above a certain threshold. And sometimes you have to deliberately re-categorize your account to avoid monthly fees that you may be avoiding at present only because of large balances. And often a bank's implementation of overdraft protection will include a fair amount of ambiguity (discussed in the li...
by Aptenodytes
Tue May 09, 2023 10:04 pm
Forum: Personal Investments
Topic: Size of IRA at Retirement
Replies: 7
Views: 1904

Re: Size of IRA at Retirement

I think the idea behind the rule of thumb you are recalling is to try to keep taxable income while in retirement below the threshold that triggers income tax obligations. I don't think it makes sense to simply translate that threshold into a withdrawal rate and then translate into a target portfolio size. In any event, your pension guarantees that you will be above that threshold, so the goal of zero-tax is out of reach. Taxes are still important, even more so, if you are above the zero-tax threshold, but it is more complex than just lowering your IRA withdrawals. There are Roth conversions to think about, for example. If you are still accumulating, taxable savings might help lower taxes while in retirement, and maximizing HSA contributions...
by Aptenodytes
Tue Apr 25, 2023 8:49 am
Forum: Personal Investments
Topic: generating cash for RMD
Replies: 24
Views: 2558

Re: generating cash for RMD

If you are younger than 85 or so isn't simply withdrawing the RMD in whatever way gets you to your target AA the best? Worrying about precise valuations at the time of withdrawal isn't logical if you don't worry about them at other times.

At least that's what I would do. If that makes you anxious, the bucket strategy you alluded to is designed exactly to eliminate that anxiety.
by Aptenodytes
Tue Apr 25, 2023 8:33 am
Forum: Personal Consumer Issues
Topic: "Quality" LED bulbs
Replies: 114
Views: 13977

Re: "Quality" LED bulbs

When I had an addition put on my house 9 years ago I installed 11 Philips LED floodlight bulbs. The first one failed this week.
by Aptenodytes
Thu Apr 06, 2023 4:52 pm
Forum: Investing - Theory, News & General
Topic: Inflation-hedging my nominal annuity
Replies: 70
Views: 5172

Re: Inflation-hedging my nominal annuity

Take about a third of the net-after-income-tax payout each month and invest it in a 60/40 3-fund portfolio. Not perfect, but close enough IMHO. [45% Total Stock Market / 15% Total International Stock Market / 40% Total Bond Market, rebalanced every 3 to 6 months.] If that's too much trouble, use your favorite Vanguard Retirement or Fidelity-Freedom-Index 60/40 fund as the repository for the third of the net payment. (Note: FQIFX would be the Fidelity Freedom Index fund of choice. 12bp ER.) This is what I'm planning to do. I have about half my portfolio in TIAA TRAD, and will not need the whole lifetime annuity payment to meet living expenses so will take some fraction and invest it. Note that if you do this systematically the fraction you ...
by Aptenodytes
Thu Nov 10, 2022 9:51 am
Forum: Investing - Theory, News & General
Topic: TIAA Traditional Graded Payment Option [No longer offered after Nov. 15, 2022]
Replies: 43
Views: 4574

Re: TIAA Traditional Graded Payment Option [No longer offered after Nov. 15, 2022]

Do we know if this change applies to all employer plans, or just some? I'm about a year from retirement with about half my money in TIAA TRAD, and was very much looking forward to a graded-payment lifetime annuity. I don't see any email like the one the OP refers to, nor is there any message along those lines in my TIAA online message center.

If I play around with the income scenario tool, graded payments are still presented as an option [that by itself doesn't say much, because it wouldn't be unusual for them not to have thought to inject the news into the tool].

I tried unsuccessfully searching the TIAA web site.

Thanks, both for the original post and light anyone might shed on my question.
by Aptenodytes
Tue Oct 04, 2022 4:07 am
Forum: Personal Finance (Not Investing)
Topic: Annuitizing TIAA Traditional
Replies: 61
Views: 6061

Re: Annuitizing TIAA Traditional

I wonder how all those who were bullish on annuitization before inflation was so much of a worry now feel about it. I have half my portfolio in TRAD and am about two years from retirement. I like seeing the crediting rates creep up (creeping is better than nothing) and think about how I'd feel in a future high-inflation period when annuity payments were fixed.

That said, I'm still likely to do what felt right before the current inflation - annuitize in tranches over time.
by Aptenodytes
Tue Apr 05, 2022 4:49 am
Forum: Personal Finance (Not Investing)
Topic: When to Start Spousal S.S. (Question not Asked?)
Replies: 23
Views: 3191

Re: When to Start Spousal S.S. (Question not Asked?)

slipp1229 wrote: Mon Apr 04, 2022 9:58 pm What is VERY interesting, is the the SS.gov Website still provides me with an estimated CURRENT Spousal Benefit of $1300 for my wife if I turned it on TODAY???
What is your monthly benefit if you retired today? What is your wife's? Whether that current spousal benefit is misleading depends on knowing those two numbers. And, when you say "current," do you mean a current estimate of future benefits? Or an estimate of benefits if taken today?
by Aptenodytes
Wed Mar 16, 2022 6:04 am
Forum: Personal Investments
Topic: I think I will Lose my Nest Egg by 401K Reallocation
Replies: 12
Views: 2813

Re: I think I will Lose my Nest Egg by 401K Reallocation

How sure are you that you want to switch out of the Blackrock fund? It holds the assets you are seeking and is pretty cheap (0.09% expense ratio). It does hold more stocks than you want (80% instead of 60%) and it throws in a small real estate allocation (4%). But there are other ways of lowering your stock exposure - you could switch to a different Blackrock target-date fund (the easiest thing to do), or you could start directing new contributions to a bond fund until the bond fund is one third the size of the Blackrock fund (that gets you 60% stocks) and from then on direct new contributions to stay close to that split. The real estate allocation is too small to worry about, if there are logistical benefits from sticking with Blackrock co...
by Aptenodytes
Fri Dec 31, 2021 12:11 pm
Forum: Personal Investments
Topic: 30-year Market Forecast
Replies: 29
Views: 3781

Re: 30-year Market Forecast

Unless you can also accurately forecast inflation for the next 30 years I'm not sure how any one can get close to finding out what real returns will be. I've always done all my portfolio projections in real, i.e. inflation-adjusted, terms. Simba's spreadsheet includes both nominal and real data & calculations so it is easy to do. Projecting real returns is enough of a leap of faith already - having to project both nominal returns and inflation rates is just too much for me. More important, I don't need it - what I care about is what my future portfolio might be able to let me spend. Real projections not only do that, but they do it better because they are denominated in terms that have intuitive meaning to me. That is, I have an intuit...
by Aptenodytes
Fri Nov 05, 2021 3:08 pm
Forum: Personal Investments
Topic: Tax strategy for Inherited IRA
Replies: 10
Views: 1042

Re: Tax strategy for Inherited IRA

Stick with the RMDs and you should hit retirement with a balance at least as big as you have now, and then your marginal tax rate will be more like 15% or so (hopefully).

I inherited an IRA 13 years ago at age 49, have taken out only RMDs each year, and the balance has barely changed.

If you are going to compare different tax scenarios, don't leave out the fact that your marginal tax rate will almost definitely decline when you retire.
by Aptenodytes
Fri Aug 13, 2021 4:59 pm
Forum: Personal Consumer Issues
Topic: OUTDOOR Sump Pump Advice Please
Replies: 15
Views: 2102

Re: OUTDOOR Sump Pump Advice Please

I did the same thing in a suburb just outside NYC. I never had to bring in the pump during the winter. Late fall and early spring are common flooding times so I'm glad I don't have to worry about when to bring it in and put it out. I did all the work myself .. one contractor told me it wasn't possible for him to do because of code issues. The hardest part was cutting the pit into the concrete. Working out the discharge pipes required a little thought but wasn't hard.
by Aptenodytes
Mon Apr 06, 2020 3:48 am
Forum: Investing - Theory, News & General
Topic: What percentage of your paycheck do you invest?
Replies: 268
Views: 22165

Re: What percentage of your paycheck do you invest?

Code: Select all

Taxes      27%
Savings    16% (includes HSA)
Insurance   3%
Spending   54% (includes mortgage; don't consider it investment)
by Aptenodytes
Thu Mar 19, 2020 5:34 am
Forum: Investing - Theory, News & General
Topic: A time to EVALUATE your jitters
Replies: 678
Views: 630301

Re: A time to EVALUATE your jitters

Very enlightening discussion. It has been helpful for me to a have little box in my portfolio tracking sheet, right next to my balance, that shows me very starkly what my holdings would be if stocks fell by 50% . I started doing it several years ago to help me make sure I had enough liquid non-stock funds on hand to be able to rebalance in such a scenario (most of my non-equities are in TIAA Traditional Annuity (the non-liquid kind). But even though the purpose was checking on liquidity, I found that seeing that number almost every day helped normalize what is happening now . I think it is part of why I am not at all nervous about the market right now (I've no pretense that I'll be calm under any storms, but for now I'm good). Another way t...
by Aptenodytes
Mon Mar 16, 2020 4:02 am
Forum: Personal Investments
Topic: Asset allocation thoughts during Corona?
Replies: 10
Views: 1235

Re: Asset allocation thoughts during Corona?

There are a few red flags you might want to address before making a decision: Why do you mention "Corona" in your post? If I didn't know anything about you other than your shift in bond percentage I would guess that you thought stocks were "cheap" right now and wanted to buy more. But because stocks are no more cheap now than they were two years ago, I'd also be guessing that you were letting the headlines sway your judgment. Normally one tilts toward bonds when one is more concerned about risk. Are you saying you were more concerned about risk two years ago than you are today? That would be a bit odd. Your proposed new AA also makes a significant shift towards large-cap stocks. What is driving that? In other words, your...
by Aptenodytes
Tue Mar 10, 2020 4:53 am
Forum: Investing - Theory, News & General
Topic: Five Ways To Make Lemonade Out Of A Lemon Market
Replies: 19
Views: 4325

Re: Five Ways To Make Lemonade Out Of A Lemon Market

Rick, with all due respect don't #1 and #2 go against "stay the course" in this volatility? Even rebalancing may be premature if things reverse as we know they can with lightning fast institutional trading. It may be best to wait until the dust settles. It depends on your course, doesn't it? Rick would say that tax-loss harvesting (#1) and using index funds instead of active funds (#2) should be part of the course you want to stay on, which is why he included them and why I agree with them. However, believing you can know when the dust settles and therefore should hold back from rebalancing following an 18% drop only counts as staying the course if your course calls for market timing, which Rick would recommend against (and I'd a...
by Aptenodytes
Fri Feb 21, 2020 4:49 am
Forum: Investing - Theory, News & General
Topic: xkcd on stock picking
Replies: 27
Views: 4278

Re: xkcd on stock picking

I'm not sure if people are really confused about why the purported idea in the comic is wrong, or just going along with the fun. On aggregate, active funds lose money because of a) management fees and b) market timing. It has nothing to do with picking the wrong stocks. And though you can't make (a) into a contrarian strategy that makes money, you can do so with (b). You just can't make that strategy into a joke XKCD readers will laugh at. Coming at it another way, just because nobody knows how to pick individual stock winners doesn't mean that all stock pickers get every pick wrong. So knowing that a stock picker chose a particular stock tells you nothing about that stock's future price. By the way, subtle transformation of a true statemen...
by Aptenodytes
Sat Jan 18, 2020 11:02 am
Forum: Personal Finance (Not Investing)
Topic: Realized we made a major mistake and feeling really sick.
Replies: 162
Views: 17015

Re: Realized we made a major mistake and feeling really sick.

Make your wife sit down with you and review a few other ways you could have made money if you could have predicted the future accurately. It won't be hard to get billions of dollars. Your $1m pales as insignificant. Buying Google and Apple at their lows, buying a few hundred PowerBall winning tickets, etc. You could try summoning this list whenever your brain brings up the false notion that you made a mistake by selling the stock. Every boglehead portfolio will be beaten by enormous multiples by the portfolios of time travelers who go back in time and buy all the right assets. Our portfolios are still the right ones. Because there's no time travel. We can't foresee the future or time travel, so we manage risk through diversification. You ma...
by Aptenodytes
Wed Nov 20, 2019 3:39 am
Forum: Investing - Theory, News & General
Topic: Is dividend yield included in Gross Return?
Replies: 7
Views: 1094

Re: Is dividend yield included in Gross Return?

"gross" and "net" don't really apply to these scenarios. The returns are both gross and net because nothing is taken away.

But the answer to your question is that dividends are included in the returns.

I don't know how UK ETFs are regulated; perhaps they aren't required to pay dividends to shareholders. But whether CSPX distributes dividends to shareholders who can buy more shares of the fund with them, or keeps the dividends and buys more stock with them, the effect on return is the same, as you observe.
by Aptenodytes
Sun Aug 25, 2019 2:28 pm
Forum: Personal Investments
Topic: Protecting ourselves from sequence of returns risk
Replies: 69
Views: 7765

Re: Protecting ourselves from sequence of returns risk

KyleAAA wrote: Sun Aug 25, 2019 1:58 pm ...Consider an ascending glide path for equities. For example, say today you are 65/35 stocks/bonds. When you retire, go to 30/70 stocks/bonds and gradually increase to your desired asset allocation over the next 8-10 years.
or if having to delay your retirement is also a risk you wish to mitigate, then lower your stock percentage a few years in advance of your retirement date, and then start increasing once you retire.
by Aptenodytes
Sun Aug 11, 2019 11:30 am
Forum: Personal Investments
Topic: Bond funds in an HSA
Replies: 19
Views: 3411

Re: Bond funds in an HSA

Thanks ! In that case, where should one place total market bond funds ( assuming one wants to and under similar conditions, age 30, etc) ? Roth IRA ? Taxable ? 401K ? The wiki covers this topic thoroughly and clearly. What I've come to appreciate is that if you are near retirement, and you expect to rely on HSA withdrawals in the early withdrawal stages (because you are deferring Social Security and you need tax-free withdrawals to stay within your tax bracket), then it might make sense to have a significant bond allocation in your HSA (and Roth). That way you lower the risk that your HSA is too low to meet your withdrawal needs between retirement and Social Security benefits. Not everyone nearing retirement will need to worry about this. ...
by Aptenodytes
Sun Jun 23, 2019 5:26 am
Forum: Personal Investments
Topic: Account Specific AA and Taking Advantage of Low Tax Bracket
Replies: 12
Views: 1303

Re: Account Specific AA and Taking Advantage of Low Tax Bracket

I would not base my portfolio on what I thought the marginal tax rates on income and capital gains would be in thirty years.

Putting as much as possible in Roths does make sense, though there's still some risk they will be treated differently in thirty years.

I would put only high risk funds in the Roths and only low risk in the inherited IRA. You want the Roths to grow as much as possible and the inherited IRA to grow as little as possible, within the constraints of your AA.

I would not hold cash in a retirement fund at your age.

I wouldn't consider the 457 and real estate to be functional equivalents. Real estate is speculative.
by Aptenodytes
Wed Jun 12, 2019 4:35 am
Forum: Personal Investments
Topic: Monte Carlo Simulation
Replies: 47
Views: 5798

Re: Monte Carlo Simulation

You can tune your simulation to any probability distributions you want - you can shift the expected return of any asset you want, and you can shift the shape of the distribution, you can shift the correlations across after asset classes. Likewise you can shift the probability distributions of future spending needs or contribution rates.

E.g., I never run a simulation with historic returns without also running a simulation with half those values.
by Aptenodytes
Sun May 26, 2019 9:21 am
Forum: Investing - Theory, News & General
Topic: Is Cash Trash? The Purpose of Cash
Replies: 246
Views: 35351

Re: Is Cash Trash? The Purpose of Cash

It it were obvious there wouldn't be so many people disagreeing with it. I've always thought there was a lot of magical thinking about cash, and I saw Rick's post as saying 'stick to reality.'
samsoes wrote: Sun Mar 04, 2018 2:19 pm
The original post is just an obvious statement. Nothing more, nothing less, nothing actionable.
by Aptenodytes
Sun May 26, 2019 9:12 am
Forum: Investing - Theory, News & General
Topic: Three assets all with negative correlations?
Replies: 18
Views: 2201

Re: Three assets all with negative correlations?

You are searching for what are called factors. No need to do the search from scratch unless you have billions to invest and can justify the expense. Nobel prize winners have done it for you. And people like Larry Swedroe have synthesized the results in understandable, actionable ways.
by Aptenodytes
Tue May 14, 2019 5:20 am
Forum: Personal Investments
Topic: Trade VTTVX for VBIAX? Need sanity check on my AA too please
Replies: 3
Views: 897

Re: Trade VTTVX for VBIAX? Need sanity check on my AA too please

1) price/share does not matter for mutual funds. 2) The difference in expense ratio between these two funds is far less important than the difference in asset allocation (AA) within the funds. What you are seeing as similar profiles (because of stock/bond ratios) are actually pretty different when you dig one level deeper. The Target Date fund has significant international holdings in both stocks and bonds, but the Balanced Fund has only US stocks and bonds. 3) So you need to figure out how much international exposure you want before you start choosing among various "funds of funds." As you know from the headlines, global markets are not exactly screaming "stability" right now, so you have to be confident you will stick ...
by Aptenodytes
Sat Apr 06, 2019 6:01 am
Forum: Investing - Theory, News & General
Topic: Those who view everything as one portfolio - how do you determine allocations and how "funded" different goals are?
Replies: 28
Views: 2950

Re: Those who view everything as one portfolio - how do you determine allocations and how "funded" different goals are?

Here's a simpler approach. You need at least $15K in a cash emergency fund, and all the rest is invested for the long term. The $15K for car and wedding and other emergency needs isn't part of your long-term retirement portfolio where you are in your life right now, because you may need to deplete it at any moment. If you were a lot older things would be different and you could do what Livesoft does. The costs of not having that $15K liquid are significant -- you have no car, or you have to borrow at high rates to get the "new" used car when the old one conks out. Or you have to put your wedding costs on a credit card. As for the $75K down payment for the house, that seems different. It isn't "emergency" in nature, given...
by Aptenodytes
Fri Mar 29, 2019 9:08 am
Forum: Personal Finance (Not Investing)
Topic: How often do you check your net worth?
Replies: 257
Views: 21391

Re: How often do you check your net worth?

Liquid retirement accounts, monthly
Net worth, yearly
by Aptenodytes
Thu Feb 21, 2019 4:19 pm
Forum: Personal Investments
Topic: Super Lazy portfolio, just VSMGX? [Vanguard LifeStrategy Moderate Growth]
Replies: 117
Views: 24966

Re: Super Lazy portfolio, just VSMGX?

Or the more conservative, LifeStrategy Conservative Growth (VSCGX). I have started using this fund as my primary comparison benchmark (in a virtual portfolio that matches my stock-bond mix). I use it because it is where I'd be if I gave up my a la carte approach. Even if you don't invest in one of these all-in-one funds it can be helpful to use them as a point of comparison. After two full years of tracking against such a benchmark, I am comforted that when the time comes to move to "super lazy" by necessity (for example, I die before my spouse, who is not interested in these things, or my declining faculties require it), the new portfolio will behave very similarly except for requiring no maintenance.
by Aptenodytes
Fri Mar 30, 2018 7:13 am
Forum: Personal Investments
Topic: Emerging Europe funds / strategies?
Replies: 12
Views: 1720

Re: Emerging Europe funds / strategies?

It would help to see your total AA. It sounds like you are tilting to Europe with your equity holdings, but you don't say that explicitly. And you are defining Europe in this context as west of Russia and north of Africa and Syria. How big is your Europe tilt? Within Europe, how big is your emerging market tilt? How big is your non-Europe emerging market tilt? The emerging European markets are likely to be very small as a percentage of all Europe. So my intuition is that unless you have a very large tilt it just doesn't matter what you do. And nobody here, I think, would recommend a huge tilt based on geography, because the received wisdom says it is not a basis for tilting. That said, it seems easy and not overly expensive to tilt to Polan...
by Aptenodytes
Thu Mar 15, 2018 1:42 pm
Forum: Investing - Theory, News & General
Topic: Anyone exclude emerging markets?
Replies: 50
Views: 8405

Re: Anyone exclude emerging markets?

I overweight them because I think the preponderance of evidence suggests that they act as if they were a factor. I realize this is not an accepted fact. For comparison purposes, it seems that what matters is the percentage of your international portfolio that is emerging, as opposed to percentage of your portfolio or percentage of your stocks. If Mary's portfolio is 5% EM and Joe's is 10% EM, we don't really know anything about their attitude toward EM because we don't know what their international stock percentage is. Joe might be underweighting and Mary might be overweighting. My international stocks are 40% EM, as defined by Vanguard, whereas market weights would be about 20% EM. I get there with a target international stock AA of 2/3 sm...
by Aptenodytes
Mon Mar 12, 2018 1:14 pm
Forum: Investing - Theory, News & General
Topic: Are Health Savings Accounts (HSA) that require a minimum balance before investing worth it?
Replies: 39
Views: 5236

Re: Are Health Savings Accounts (HSA) that require a minimum balance before investing worth it?

Comparing an option that is available to you to an option that is not available cannot possibly help you make a good decision. Whether a given HSA's investment options are worse than an imaginary HSA with no cash minimum requirements is irrelevant. You should choose the HSA that is best for you, by comparing among actual, available options.

If you have some unusually high aversion to holding cash, for whatever reason, then you can just put your money in a Roth IRA. That operates more or less like an investment-only HSA (for people who anticipate that their allowable expenses will exceed their HSA holdings) and it has no requirement to hold cash. All you have to do is pay taxes on the money you put in.
by Aptenodytes
Wed Jan 10, 2018 11:14 am
Forum: Personal Finance (Not Investing)
Topic: Sell bonds, pre-pay mortgage instead?
Replies: 10
Views: 1493

Re: Sell bonds, pre-pay mortgage instead?

FiveK wrote: Wed Jan 10, 2018 9:14 am
Miguelito wrote: Wed Jan 10, 2018 8:56 am We have a 3% fixed rate on the mortgage...
...bond with a guaranteed 4% return
Don't know if the 4% was a typo, but the "guaranteed return" would be the same as the mortgage rate: 3%.
True, 3% from mortgage prepayment = 3% from mortgage prepayment. But in weighing the choice between prepaying and buying bonds, what matters is that 3% from mortgage prepayment = 4% from bonds (the OP is in a 25% tax bracket and the bonds are in a taxable account).

I feel lucky to have a 2.6% mortgage and access to 3.8% TIAA Traditional. Post tax-reform, my de facto mortgage rate is going up 25%, but I have no interest in paying it off faster than necessary.
by Aptenodytes
Wed Jan 10, 2018 5:16 am
Forum: Personal Investments
Topic: Mutual Funds to reduce risk in stock heavy portfolio for 89 year old?
Replies: 12
Views: 1883

Re: Mutual Funds to reduce risk in stock heavy portfolio for 89 year old?

Aptenodytes: You asked about their stocks. Actually, it is now > $1M.... it is actually $1.3M in just 3 stocks: 4% General Electric, 39% AT&T, 57% in Consolidated Edison. What would you select that would be counter sector"? Well, you are talking to someone who sticks to broad-based, factor-based index funds, so what do I know? But I was curious so I looked at the 10-year correlation coefficients for 10 sector ETFs. Nine are Vanguard, the tenth is Spider. They match the 10 sectors listed here . No idea how robust that is. I got correlation coefficients here . Not vouching for it - it just turned up on Google. Con Ed is in the utility sector; AT&T is in the telecom sector. The 3 lowest-correlated sectors for utilities are financ...
by Aptenodytes
Tue Jan 09, 2018 5:26 pm
Forum: Personal Investments
Topic: Mutual Funds to reduce risk in stock heavy portfolio for 89 year old?
Replies: 12
Views: 1883

Re: Mutual Funds to reduce risk in stock heavy portfolio for 89 year old?

They seem like people who are comfortable with a 100% equity portfolio, so I wouldn't focus on the bond question. Bonds wouldn't really do anything for them. I'd focus strictly on the stock diversification question. Diversification will take the current risk they have of losing everything, which is substantial, to zero. If you could get them to put 75% of the stocks in an index fund, then the normal advice of broad and cheap probably applies. Total Stock Market would make more sense than Extended Market. If they only want to put a small percentage in an index fund, then you may want to take into account the stocks they now own. E.g. if all of them are in a single sector or heavily correlated sectors, then you may want to put a big chunk of ...
by Aptenodytes
Tue Jan 09, 2018 5:02 pm
Forum: Investing - Theory, News & General
Topic: Which Intermediate Bond Fund Will Perform Best With Rising Rates
Replies: 13
Views: 2966

Re: Which Intermediate Bond Fund Will Perform Best With Rising Rates

There's a paradox: IF you really believed it were possible to predict interest rate changes, then you would HAVE to conclude that you should never do so. Because actively managed bond funds have access to far better information than you and teams of far better-trained people than you. So if you believe in this crystal ball, invest in an actively managed bond fund.
Munir wrote: Tue Jan 09, 2018 4:22 pm ... What other period of time would be a better predictor if we can forget about 2008?
Why would you want to forget about 2008 when choosing your bond portfolio? If bonds serve to help you weather storms, you want to stress test your bond portfolio against precisely such magnitude storms.
by Aptenodytes
Sat Dec 30, 2017 4:54 pm
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 5249
Views: 899885

Re: What are you up YTD? [Year To Date]

30% stocks ("Larry" flavored)
70% "bonds" (mostly TIAA TRAD)
----------
9.0%

A couple tenths of a percentage point below my benchmark. Not a good year for SCV.
by Aptenodytes
Thu Dec 28, 2017 4:29 pm
Forum: Personal Investments
Topic: Bond allocation-what I'm I missing
Replies: 15
Views: 1759

Re: Bond allocation-what I'm I missing

1) If you could have your portfolio lose half its value and not wish you had been able to prevent it, you don't need bonds.

2) If you are trying to have your portfolio end up as large as it possibly could at the time of your death, regardless of the consequences, you don't need bonds.

Otherwise, you need bonds.
by Aptenodytes
Wed Aug 23, 2017 10:22 am
Forum: Investing - Theory, News & General
Topic: Target Date Funds, Rebalancing, and Bear Markets
Replies: 5
Views: 3087

Re: Target Date Funds, Rebalancing, and Bear Markets

You embedded the answer in your question:
TSP L funds are rebalanced daily.
This feature is one of the main reasons people buy Target Date funds. The other is the glide path.

Both features are mast-tying correctives against the siren call of market timing. They are also correctives against the sin of sloth (your funds are adjusted properly no matter how shiftless you are).

Daily rebalancing rules out any chance to exploit gains from the use of rebalancing bands. If you don't think such gains exist this is no loss; but if you do target date funds may not be appropriate (it will depend on the value to you of the two correctives).
by Aptenodytes
Thu Aug 10, 2017 3:38 pm
Forum: Investing - Theory, News & General
Topic: What Percentage CASH are you?
Replies: 168
Views: 24685

Re: What Percentage CASH are you?

I've never understood the logic of cash as an asset category within an investment portfolio. If you need to hold onto some cash for liquidity or emergency uses, you take it out of your investment portfolio and it becomes part of your checking account or emergency fund. For me that's part of the definition of cash -- it is set aside for short-term, not long-term needs. And how much of it you need is totally independent of how much you are investing, so if your portfolio doubled that wouldn't make you need twice as much cash, or if your portfolio suffered a cash that wouldn't make you need less. I know people talk about "buckets" in a portfolio when you are withdrawing, and that one of those buckets should have cash in it, but I nev...
by Aptenodytes
Sat Jul 29, 2017 6:29 am
Forum: Personal Consumer Issues
Topic: Wooden flooring in kitchen
Replies: 51
Views: 10731

Re: Wooden flooring in kitchen

What do you consider impractical about it?

One of the things I like about the oak floor in my kitchen is the practicality of it (one example -- no grout to clean; another example -- no threshold between kitchen and adjoining rooms which also have oak floors).

If I'm still living here when the time comes to resurface the floor, I will no doubt be cursing the impracticality of it.
by Aptenodytes
Sun Jul 23, 2017 7:49 am
Forum: Personal Consumer Issues
Topic: Potential Move to the Upper Valley, NH
Replies: 24
Views: 3835

Re: Potential Move to the Upper Valley, NH

You can choose how "so rural" you want it to be. In the town center of Hanover or Lebanon, for example, you'll have restaurants, movie theaters, bookstores, department stores of sorts, even some traffic and parking hassles. A mile or so out and you are in suburbia, and 5 miles out you are in the country. A little farther and you can be off-grid. The most urban of these locations won't trick you into thinking you are in Raleigh or Durham, but it won't feel like a cultural wasteland either. If you are worried about things to do and your budget permits, I'd look at Hanover proper. The college brings in lots of cultural amenities that most towns of Hanover's size wouldn't normally have. But the fact is kids find things to do no matter...
by Aptenodytes
Mon Jun 19, 2017 12:46 pm
Forum: Personal Investments
Topic: Deleted
Replies: 5
Views: 1368

Re: Considering Larry portfolio for a portion of portfolio

You may want to consider rephrasing your question and giving it a new title. It really doesn't concern the Larry Portfolio at all, so it takes a while to figure what you are seeking. Is this close to what you are asking: 1) For a portfolio that will not be having withdrawals for a very long time and will be rebalanced regularly, is it worth replacing my Treasury holdings with TIAA Traditional? My current Treasury holdings are __% very short term, __% short term, __% medium term, and __% long term. The guaranteed TIAA Traditional rate I have access to is 3%, and recent total rates in my account have been around __%. 2) Which alternatives to the Vanguard small-value and small-international funds are worth considering for a tax-advantaged acco...