Search found 3334 matches
- Sat Nov 30, 2013 4:43 pm
- Forum: Investing - Theory, News & General
- Topic: when is an annuity a good option?
- Replies: 35
- Views: 3278
Re: when is an annuity a good option?
Reading the Quinn article. I guess one thing I worry about is the insurance company that underwrites the annuity goes out of business? I'm guessing nothing protect a consumer from that? So you'd have to choose wisely. Chris zvez, My annuity is very large (about $1.2 million), it is the DB pension GM gave to Prudential on my behalf. I think companies like Prudential are "too big to fail", so I don't worry about it. Annuities are guaranteed by the insurance industry, subject to the laws of each state. There is not a state guarantee. The limits are quite low, and provisions vary a lot by state. In some states, they protect you if you buy the annuity when you lived there, but in most states you are only protected if you live there wh...
- Sat Nov 30, 2013 1:40 pm
- Forum: Investing - Theory, News & General
- Topic: Investor Intelligence Bearish Sentiment Very Low
- Replies: 26
- Views: 7673
Re: Investor Intelligence Bearish Sentiment Very Low
No. Nor on any other indicator.
Keith
Keith
- Sat Nov 30, 2013 12:26 pm
- Forum: Investing - Theory, News & General
- Topic: Siegel on CAPE shortcomings
- Replies: 44
- Views: 5202
Re: Siegel on CAPE shortcomings
Along the lines of "if a tree falls", do we think CAPE was a valid metric before it was "discovered"?
Of course, this is science (isn't it?), and so "discovered" is much more apt than "postulated" or "invented".
Keith
Of course, this is science (isn't it?), and so "discovered" is much more apt than "postulated" or "invented".
Keith
- Sat Nov 30, 2013 12:14 pm
- Forum: Personal Investments
- Topic: Question about LMP / income flooring.
- Replies: 18
- Views: 3336
Re: Question about LMP / income flooring.
Thanks Keith. So you draw from tax-advantaged? I've been drawing from the taxable and wondered if I was leaving too much in my TA space. My taxable contains Total Stock and Total International and VMMXX. Our IRA's are Wellesley, Total Bond, Short Term Bond Index and REIT. Bustoff, Yes. Please note, I can tell you what I do and why. I do not know what you should do. I am 63. 10% of our investable assets (IA) are taxable, 90% are tax advantaged, heavily tIRAs. Earlier this year I decided to delay SS, and tried to take a look at the bigger picture. We have a floor in place: My DB pension plus SS (if I took it at 62) would meet our cash flow needs.My wife (now 60) has her own SS entitlement when that time comes. The DB pension is not indexed f...
- Sat Nov 30, 2013 9:15 am
- Forum: Investing - Theory, News & General
- Topic: when is an annuity a good option?
- Replies: 35
- Views: 3278
Re: when is an annuity a good option?
Here is Jane Bryant Quinn on the topic:
http://www.aarp.org/money/investing/inf ... r-you.html
Keith
http://www.aarp.org/money/investing/inf ... r-you.html
Keith
- Sat Nov 30, 2013 8:35 am
- Forum: Personal Investments
- Topic: Question about LMP / income flooring.
- Replies: 18
- Views: 3336
Re: Question about LMP / income flooring.
Thanks Keith! B is 3X bigger than 25A. I currently receive a small non-cola pension that together with future social security (mine and spouse) will cover our current living expenses. The wrinkle is that if we both delay SS until 70, we would need to bridge a 10 year gap because my pension is only covering half our current expenses. If I wait the 10 years until I'm 70 to collect SS, inflation may result in higher cost of living expenses for which non-cola pension doesn't offset. Thus, delaying SS would mean spending down at least $200K of investable assets (10 years x 20K) I'm not sure how to invest the $200K needed to cover the next ten years. I would appreciate hearing your thoughts. Bustoff B is 3X bigger than 25A. So, on the face of it...
- Sat Nov 30, 2013 6:45 am
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
Actually, it's two months, according to a message I get from Vanguard when I sell. Victoria Well, it really wasn't about Vanguard, but even so, I don't recall them ever keeping me from buying stocks for two months. Just not the same fund. But thanks... Actually, Vanguard told me yesterday that if I wrote them a letter pointing out the moves were in the context of rebalancing, they would waive the rule. In other words, I rebalanced yesterday. If I wanted to then make a new investment in January to keep the rebalance percentages, they would let me do so. Keith Thank you, Keith. I am curious if it's possible to write them a letter before making the first transaction and then to make two transactions simultaneously. For example, if I have a ta...
- Sat Nov 30, 2013 6:35 am
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
The menacing guy is the Soup Nazi, a Seinfeld classic.
Keith
Keith
- Sat Nov 30, 2013 1:36 am
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
Actually, Vanguard told me yesterday that if I wrote them a letter pointing out the moves were in the context of rebalancing, they would waive the rule.Blues wrote:Well, it really wasn't about Vanguard, but even so, I don't recall them ever keeping me from buying stocks for two months. Just not the same fund. But thanks...VictoriaF wrote:Actually, it's two months, according to a message I get from Vanguard when I sell.
Victoria
In other words, I rebalanced yesterday. If I wanted to then make a new investment in January to keep the rebalance percentages, they would let me do so.
Keith
- Fri Nov 29, 2013 8:52 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: Black Friday market close: Green or Red?
- Replies: 52
- Views: 4643
Re: POLL: Black Friday market close: Green or Red?
And, most important, close applies in investing.Kalo wrote:And in dancing.Leif wrote:I agree close, but the programmer in me would not allow me to accept it.VictoriaF wrote:
The poll was about S&P500. 0.08 is practically 0, don't you think?
Victoria
What is the saying, close only applies for horseshoes and handgrenades?
Kalo
Keith
- Fri Nov 29, 2013 8:20 pm
- Forum: Personal Investments
- Topic: Question about LMP / income flooring.
- Replies: 18
- Views: 3336
Re: Question about LMP / income flooring.
In the context of setting up an LMP, it's my understanding that the "safe floor" is meant to provide the income for the shortfall and should equal at least 25X residual living expenses. If I have a shortfall of $20,000 per year then I need a floor of $500,000. How do I adjust for the effects of inflation on the $500,000 over the 25 years. (assuming it's not invested in TIPS) Also, just to confirm I have the correct understanding, the $500,000 isn't supposed to generate the $20,000 from interest income is it ? Lastly, how is an LMP (essentially two buckets) different from the discredited bucket approach ? Thanks Bustoff, Let me try. You should try to ensure a minimum level of income that will meet your basic needs. Calculate your ...
- Fri Nov 29, 2013 7:58 pm
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
Life changes. You may need more than you thought later in life due to a variety of changes. Or, even though you 'think' you need 4% you may need less. If you lock in the annuity - you're locked in. By keeping equities you keep flexibility (albeit with risk). However, I do agree you shouldn't push right to your #. I use the 4% SWR rule but since retirement 6 years ago), have only pulled out 3.7% incl taxes). I thought I'd need 4% too. In an annuity I'd be forced to take it. In equities, that extra untouched 10% has remained invested in stocks and has grown. Now I have a larger portfolio with which to work, and may even result in me taking less than the 3.7% going forward. Sperry, I agree. My point is that 4% is close to the tipping point wh...
- Fri Nov 29, 2013 7:38 pm
- Forum: Personal Investments
- Topic: Financial Windfall
- Replies: 8
- Views: 2096
Re: Financial Windfall
Within the next several months, I will receive a mid six figures cash inheritance. I'm looking for investment advice for this inheritance. My objective will be some growth but primarily capital preservation. First my personal situation: I will be 71 in January. I am married and have been for more than 48 years. I am a retired Naval Officer earning a mid 5 figures military pension annually. My wife and I receive mid 5 figures in annual social security payments. I have a mid 6 figures IRA from which I will make my first RMD in December. My wife has a low 6 figures IRA from which her first RMD will be required in 2 years. We own our home free and clear and have no debt other than credit card which is paid off each month. We are completely deb...
- Fri Nov 29, 2013 7:29 pm
- Forum: Investing - Theory, News & General
- Topic: Man Throws Away 7,500 Bitcoins
- Replies: 11
- Views: 2305
Re: Man Throws Away 7,500 Bitcoins
There are plenty of hits for: James Howells BitcoinsProfessor Emeritus wrote:it just has the smell of urban legend to me
Reminds me of the story of the guy who parlayed $5 into millions betting on 6 in Las Vegas roulette. Lost it all on the last spin. He regrets losing that $5.
Keith
- Fri Nov 29, 2013 7:20 pm
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
First, if you *need* 4%, the dumbest thing to do is to take 4%. You need a real plan. Like, an SPIA that will pay you 4% guaranteed, forever.Browser wrote:If one agrees with Dr. B's propositions (as I do) that 1) if you've won the game then stop playing it, 2) stocks are toxic to retired investors, then it follows that the approach of holding a retirement portfolio with a significant portion of stocks to support a 4% SWR for income withdrawals is wrong-headed. Two schools of thought here.
I think that what Dr. Bernstein says should be seen in the context of ensuring a floor of income that meets your basic needs. Once that is done, you have some leeway to invest for discretionary income. Then, stocks are not toxic to anyone.
Keith
- Fri Nov 29, 2013 5:36 pm
- Forum: Investing - Theory, News & General
- Topic: Malkiel suggests a different asset allocation
- Replies: 41
- Views: 7084
Re: Malkiel suggests a different asset allocation
Business Week profile: Dr. Burton Gordon Malkiel, also known as Burt, Ph.D. is Chief Investment Officer of Wealthfront Inc..He is a Co-Founder of AlphaShares LLC and serves as its Chief Investment Officer, Manager and Head of Index Committee. Dr. Malkiel serves as an Advisor of CareGain, Inc. Prior to this, Dr. Malkiel was employed at investment-banking department of Citigroup CIB. Dr. Malkiel served as Deputy Chairman of Genmab A/S and has been its Director since April 19, 2007. He serves as a Director of Vanguard Group (Ireland) Limited, Vanguard Group Europe, BKF Asset Management Inc., Baker Fentress Inc., John A. Levin and Co., Inc., Prudential Insurance Company of America, Jeffrey Company, and Neuvis Corp. He has been a Director of The...
- Fri Nov 29, 2013 3:40 pm
- Forum: Investing - Theory, News & General
- Topic: Siegel on CAPE shortcomings
- Replies: 44
- Views: 5202
Re: Siegel on CAPE shortcomings
I think the point (or the argument) is that executives may have compensation incentives dependent on earnings per (outstanding) share. Stock buybacks reduce the number of shares, so earnings per share may rise even if total earnings do not.
Keith
Keith
- Fri Nov 29, 2013 12:57 pm
- Forum: Investing - Theory, News & General
- Topic: Mutual Fund gifts for grand kids
- Replies: 5
- Views: 1007
Re: Mutual Fund gifts for grand kids
I am seeking some recommendations on mutual funds that would be most appropriate as gifts to my two grandchildren. Sophia is 2 1/2 and Max is 5 months. I want to put $1,000 in each of two new accounts, one for each. I'm thinking of Wellington or Wellesley. 1. What funds do you think fit these long-term gifts? 2. Is it best to put them in my daughters (Mom) name and the kids name? 3. I will be retiring in a few months, so I don't know how often we'll be adding new deposits. Thanks in advance for your thoughts and possible recommendations. :shock: Dave, Given a similar question, I chose Vanguard LifeStrategy Moderate VSMGX. They may have a $3,000 minimum. So far as ownership is concerned, discuss that with your daughter. My opinion (a little...
- Fri Nov 29, 2013 12:41 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: Black Friday market close: Green or Red?
- Replies: 52
- Views: 4643
Re: POLL: Black Friday market close: Green or Red?
So, the livesoft theory is that since people rebalance on Black Friday, the market direction will be the opposite of the YTD trend? Sounds quite plausible to me!livesoft wrote:It almost seems like lots of orders to sell rebalance out of equities were kept by fund managers until the last few minutes of the session when they said, "Uh-oh, we better do these exchanges that folks asked for."
Or maybe those managers at Vanguard did sell early in the day and then drove prices lower at the end, so that all shareholders got lower after-close NAV and the Vanguard managers got a bonus?
Keith
- Fri Nov 29, 2013 12:37 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: Black Friday market close: Green or Red?
- Replies: 52
- Views: 4643
Re: POLL: Black Friday market close: Green or Red?
That's not the winning prediction?umfundi wrote: I think the market will be down slightly, since few are paying attention. Let's say, -28.3 on the Dow.
I have downloaded all the Thanksgiving Day football scores, and the DJIA history for the day after. My newsletter will be announced shortly.
Keith
- Fri Nov 29, 2013 12:32 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Re: Rebalancing on Friday
Good for us.
I will admit I was not going to rebalance since I was only a couple of percent off, but Malkiel's latest pronouncement set me off.
Keith
I will admit I was not going to rebalance since I was only a couple of percent off, but Malkiel's latest pronouncement set me off.
Keith
- Thu Nov 28, 2013 10:49 pm
- Forum: Investing - Theory, News & General
- Topic: Independent Adviser for Vanguard Investors
- Replies: 8
- Views: 1999
Re: Independent Adviser for Vanguard Investors
Some good advice (low cost funds at Vanguard) but also a promise of a secret sauce for market timing and/or fund picking.
I'd take a pass.
Keith
I'd take a pass.
Keith
- Thu Nov 28, 2013 10:33 pm
- Forum: Investing - Theory, News & General
- Topic: POLL: Black Friday market close: Green or Red?
- Replies: 52
- Views: 4643
Re: POLL: Black Friday market close: Green or Red?
So, I decide to rebalance, and the whole world cares? My trades have been submitted, and I have a stern admonishment from Vanguard they cannot be changed.
I think the market will be down slightly, since few are paying attention. Let's say, -28.3 on the Dow.
I do wish someone would do some data mining to correlate the Detroit Lions' performance in the Thursday Thanksgiving football game to the market on the next day, Friday. Lions' score, opponents' score, margin of loss (or victory) ... There has to be something that fits. Number on the winning quarterback's jersey?
Keith
I think the market will be down slightly, since few are paying attention. Let's say, -28.3 on the Dow.
I do wish someone would do some data mining to correlate the Detroit Lions' performance in the Thursday Thanksgiving football game to the market on the next day, Friday. Lions' score, opponents' score, margin of loss (or victory) ... There has to be something that fits. Number on the winning quarterback's jersey?
Keith
- Thu Nov 28, 2013 9:29 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Re: Rebalancing on Friday
Calm Man,
I was talking in the context of funds you will use during your lifetime. Leaving a legacy brings a whole set of other considerations. I am sorry to hear about your daughter.
Best wishes,
Keith
I was talking in the context of funds you will use during your lifetime. Leaving a legacy brings a whole set of other considerations. I am sorry to hear about your daughter.
Best wishes,
Keith
- Thu Nov 28, 2013 8:37 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Re: Rebalancing on Friday
Done. Transactions submitted.Markets close early tomorrow, so don't be late getting your moves in...
Don't care, tax-deferred investments.On Friday, bond funds will pay out their November dividend distributions.
Victoria implied I might wait until we get a sense of what the markets are doing tomorrow. I thought about that, then realized I would not do anything differently. So, there we go.
Keith
- Thu Nov 28, 2013 2:57 pm
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
The problem is, we have a new strong signal:
The Lions actually WON a Thanksgiving Day game. I mean, they handily beat Green Bay, not just edged by.
Who knows what this means for the markets tomorrow?
Keith
The Lions actually WON a Thanksgiving Day game. I mean, they handily beat Green Bay, not just edged by.
Who knows what this means for the markets tomorrow?
Keith
- Thu Nov 28, 2013 1:16 pm
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
Taking advantage of extremes of market sentiment is not hard. If your friends are bragging about the big gains they are making from day trading stocks, that is a sign of a bubble. If folks who no nothing about investing start giving you stock tips, that is a sign of a bubble. When you see books about DOW 36,000, that is a sign of a bubble. When magazine covers extol the bull market in stocks that will go on for as far as the eye can see, that is a sign of a bubble. When market experts tell us that old methods of valuation are obsolete, that is a sign of a bubble. Conversely, when everyone has given up on stocks that is a sign of a buying opportunity. When Business Week has "The Death of Equities" on its cover, that is a good sign...
- Thu Nov 28, 2013 1:02 pm
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
Sriracha,
Great post. The Wiki rocks!
As someone else noted, the BH Forums contribute their own noise.
Keith
PS: I assume you are not the guy with a court order: http://www.cnbc.com/id/101231927
(Edited for typo.)
Great post. The Wiki rocks!
As someone else noted, the BH Forums contribute their own noise.
Keith
PS: I assume you are not the guy with a court order: http://www.cnbc.com/id/101231927
(Edited for typo.)
- Thu Nov 28, 2013 12:00 pm
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
I fully agree with what Dr. Bernstein says here, excerpted in bold above. I was simply trying to point out, that's not what I am ranting about.Blues wrote:Well, Keith, I don't feel it's fair to ignore Dr. Bill's post early on in this thread:
To each his own. I choose to err on the side of caution and risk management with my hard earned portfolio.wbern wrote:There's another dimension to this, which is that high recent returns mean that many savers have, at this point, won the retirement game--that is, they now have, for the first time, an adequate liability matching portfolio. Once you've won the game, you should stop playing it, or at least stop playing it so aggressively.
Bill
Regardless of your choice of method, I wish you well.
Keith
- Thu Nov 28, 2013 10:47 am
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
As Dr. Bernstein and others on the panel of experts at BH2013 said, staying with your plan is more important than getting the plan exactly right. Yes, "staying the course" is not some stupid slogan. It means, stick with your plan. Which is why I am so frustrated with some of the experts now suggesting you should be tinkering and tampering with your plan. Keith Happy Thanksgiving to all. I don't consider it tinkering but prudent to take appropriate measures when, as Bernstein and Swedroe point out, one is no longer required to take as much risk to fund their retirement (or other goal). Just as you wouldn't invest in equities for a short term goal, once one has amassed a certain amount of wealth sufficient to augment their "sa...
- Thu Nov 28, 2013 2:44 am
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
Re: Bill Bernstein: "Take risk off the table"
As Dr. Bernstein and others on the panel of experts at BH2013 said, staying with your plan is more important than getting the plan exactly right.
Yes, "staying the course" is not some stupid slogan. It means, stick with your plan. Which is why I am so frustrated with some of the experts now suggesting you should be tinkering and tampering with your plan.
Keith
Yes, "staying the course" is not some stupid slogan. It means, stick with your plan. Which is why I am so frustrated with some of the experts now suggesting you should be tinkering and tampering with your plan.
Keith
- Wed Nov 27, 2013 8:05 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Re: Rebalancing on Friday
Keith, wouldn't life be good if everything was in accounts not affected so much by taxes, The we could just do life strategy moderate growth everywhere, not have to rebalance or do anything. ... Calm Man, Yes, but ... Only about 15% of our investable net worth is in taxable assets. So, yes, my rebalancing is in the tax-advantaged accounts. But, three years ago I got mad at my situation, and liquidated all of our family's taxable investments to move them to Vanguard. I am glad I did it, although that year our taxable income was a new high that we will likely not see again. We paid the piper then, and it is good now: Using the kids' UTMAs for college and housing and our taxable account to withdraw funds to defer SS, the current taxes are pre...
- Wed Nov 27, 2013 7:26 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Re: Rebalancing on Friday
On the contrary, I am protesting the very idea that the tea leaves predict anything that is actionable. Period.letsgobobby wrote:Keith, and none of your motive to rebalance is driven by a high PE10 which clearly predicts an imminent crash?
By the way, to time the market you have to be correct twice. If PE10 predicts a crash, what is the indicator to return to the market? It's a bunch of mambo-jumbo, and I am distressed to see respected advisers jumping on the bandwagon.
Which part do people not understand? Your AA is not a knob to fine tune your investments.
Keith
- Wed Nov 27, 2013 7:05 pm
- Forum: Personal Finance (Not Investing)
- Topic: Share the (real) ways you do financial arithmetic mentally
- Replies: 48
- Views: 3900
Re: Share the (real) ways you do financial arithmetic mental
The one easy rule is the rule of 72, for when a sum will double for a given interest rate.
Except, I have never been able to remember anything about it other than there is a rule associated with some number.
Keith
Except, I have never been able to remember anything about it other than there is a rule associated with some number.
Keith
- Wed Nov 27, 2013 3:27 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Re: Rebalancing on Friday
Oh, that's what "Black Friday" means?VictoriaF wrote:But Keith, what if everything crashes and burns on Friday?
Victoria
Keith
- Wed Nov 27, 2013 3:15 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing on Friday
- Replies: 37
- Views: 4983
Rebalancing on Friday
Enough, already. I have decided to rebalance my accounts on Friday. Back to my planned AA of 50/50.
This involves moving only a few percent, since I have a large chunk in VSMGX, which rebalances itself. (If anyone cares, my goal is VSMGX 80%, VFSUX 10%, and VBILX 10%.)
Really, the noise has become unbearable. The latest straw is something from Malkiel that bonds are dangerous and that the markets have fundamentally changed since 2011. I guess I missed that memo.
It's a new market high, I can figure out the moves tomorrow and submit them for Friday execution. Then, I'll have fresh monthly statements on Monday. It feels good to reaffirm my plan.
Keith
This involves moving only a few percent, since I have a large chunk in VSMGX, which rebalances itself. (If anyone cares, my goal is VSMGX 80%, VFSUX 10%, and VBILX 10%.)
Really, the noise has become unbearable. The latest straw is something from Malkiel that bonds are dangerous and that the markets have fundamentally changed since 2011. I guess I missed that memo.
It's a new market high, I can figure out the moves tomorrow and submit them for Friday execution. Then, I'll have fresh monthly statements on Monday. It feels good to reaffirm my plan.
Keith
- Wed Nov 27, 2013 8:15 am
- Forum: Investing - Theory, News & General
- Topic: Bill Bernstein: "Take risk off the table"
- Replies: 207
- Views: 34404
- Tue Nov 26, 2013 7:44 pm
- Forum: Personal Finance (Not Investing)
- Topic: Share the (real) ways you do financial arithmetic mentally
- Replies: 48
- Views: 3900
Re: Share the (real) ways you do financial arithmetic mental
My father had a book,
The Trachtenberg Speed System of Mathematics, with all kind of tricks.
The one I shortcut I find most useful is Pounds to Kilograms: Divide by 2, deduct 10% .
Kg to lbs: Double, add 10%.
Keith
The Trachtenberg Speed System of Mathematics, with all kind of tricks.
The one I shortcut I find most useful is Pounds to Kilograms: Divide by 2, deduct 10% .
Kg to lbs: Double, add 10%.
Keith
- Tue Nov 26, 2013 3:03 pm
- Forum: Investing - Theory, News & General
- Topic: A case for rebalancing
- Replies: 13
- Views: 1913
Re: A case for rebalancing
Yes, EM is Emerging Markets, which the article does not mention.Mrxyz wrote:Pardon my ignorance, but what is EM? Is it Emerging Market?Call_Me_Op wrote:Been buying EM all along - per IPS.
Thanks
Keith
- Tue Nov 26, 2013 2:45 pm
- Forum: Personal Investments
- Topic: A self constructed annuity
- Replies: 18
- Views: 2656
Re: A self constructed annuity
Hmmm, I wonder how a ladder of term SPIAs would look or does it even make sense ? Just thinking out loud here. Hexdump, Here is my own *opinion* . Stay away from all varieties of annuities except Single Premium Immediate Lifetime Annuities. You are much better off to delay SS before you buy an annuity. While you can buy an annuity that is indexed for inflation, they seem expensive to me. My plan is to purchase an annuity that is not indexed for inflation. Then when its value gets eroded, purchase another. There is no point to purchasing a "ladder" of annuities. Just buy them as you need them. There is something called a deferred (rather than immediate) annuity, where you buy it now and payments start later. Seems odd to me. If yo...
- Mon Nov 25, 2013 11:54 pm
- Forum: Investing - Theory, News & General
- Topic: Using Credit Card to Invest
- Replies: 32
- Views: 4286
Re: Using Credit Card to Invest
Chances Aretechcrium wrote:You manage to save $50K a year.FinancialDave wrote:Your investment drops 30% in the month your free CC offer expires!Well, what could go wrong?
Jan 2014: You apply for a credit card with 50K limit at 0% or 1%. You do a cash advance and immediately buy ETFs.
Aug 2014: You are halfway there and you save 25K in a savings account
Dec 2014: You save the 50K, pay back your cc loan. Your equities drop 30%, you stay the course. Your ETF is worth 35K.
Jan 2015: You apply again for another 50K and start over...(total of 85K)
Dec 2015: Chances are the 85K recovered from the bottom and is now $150K
I don't see anything wrong with that...
Chances are your chances are ...
Keith
- Mon Nov 25, 2013 6:41 pm
- Forum: Investing - Theory, News & General
- Topic: "Stocks, bonds, and your portfolio: A (re)balancing act"
- Replies: 1
- Views: 600
Re: "Stocks, bonds, and your portfolio: A (re)balancing act"
Exactly.
I not only plan to rebalance, I plan to make those withdrawals from 529 plans for tuition paid, and I plan to plan my IRA contributions early in the New Year.
Keith
I not only plan to rebalance, I plan to make those withdrawals from 529 plans for tuition paid, and I plan to plan my IRA contributions early in the New Year.
Keith
- Mon Nov 25, 2013 4:12 pm
- Forum: Personal Investments
- Topic: A self constructed annuity
- Replies: 18
- Views: 2656
Re: A self constructed annuity
If you want to understand the basic idea of an immediate annuity (which is an insurance contract, not an investment), check out what a "tontine" is: http://en.wikipedia.org/wiki/Tontine If you buy a Single Premium Immediate Annuity you will get a return (not a "yield") which is part investment return, part return of capital, and part "mortality credit" which is the money not paid to those who have died before you. The mortality credit increases the payment beyond any other guaranteed contract you can purchase, as Taylor has pointed out. An annuity is insurance against longevity risk, against ever running out of money or income. Sure, you might die early, but you might also live to be 100. If you want to build y...
- Mon Nov 25, 2013 3:10 pm
- Forum: Investing - Theory, News & General
- Topic: Using Credit Card to Invest
- Replies: 32
- Views: 4286
Re: Leveraging your Cashflow
livesoft,livesoft wrote:We did that by borrowing $50K from a 401(k) in order to invest in a 529 plan. I like it.
I am not sure I get it.
A) Borrow from a 401k to purchase a 529. Repay the 401k loan over time.
B) Leave the 401k alone. Invest in the 529 over time.
How is A) better than B)?
Keith
- Mon Nov 25, 2013 3:00 pm
- Forum: Investing - Theory, News & General
- Topic: Using Credit Card to Invest
- Replies: 32
- Views: 4286
Re: Using Credit Card to Invest
As with all sorts of leverage, when the margin call shows up, what are you going to do? Market declines and unemployment have a reasonable correlation: You borrow money, invest it, the market declines and you lose your job. Now, what?
When I retired in 2008, I paid off my 2.5% home mortgage. I did this to lower my monthly cash flow.
I am not aware of any case where carrying over a balance on a credit card is a good idea. The best you can do is get two month's interest free, but cash advances do not have a grace period. What you are proposing is very risky, and can cause collateral damage to your credit rating.
Keith
When I retired in 2008, I paid off my 2.5% home mortgage. I did this to lower my monthly cash flow.
I am not aware of any case where carrying over a balance on a credit card is a good idea. The best you can do is get two month's interest free, but cash advances do not have a grace period. What you are proposing is very risky, and can cause collateral damage to your credit rating.
Keith
- Mon Nov 25, 2013 12:39 pm
- Forum: Investing - Theory, News & General
- Topic: Assessing Inflation fighters
- Replies: 7
- Views: 1223
Re: Assessing Inflation fighters
Larry,
I am still somewhat confused on this, in terms of an overall strategy.
Yes, TIPS protect against inflation, but they only protect that part of your portfolio that is in TIPS. Also, it seems that by focusing on one particular risk you may be more vulnerable to other risks. In this case, forgoing the opportunity for other types of market participation.
It seems to me that the best overall strategy to deal with inflation (and most other risks) is a broadly diversified portfolio. After, inflation is the change in the price of goods and services, so invest in goods and services.
Keith
I am still somewhat confused on this, in terms of an overall strategy.
Yes, TIPS protect against inflation, but they only protect that part of your portfolio that is in TIPS. Also, it seems that by focusing on one particular risk you may be more vulnerable to other risks. In this case, forgoing the opportunity for other types of market participation.
It seems to me that the best overall strategy to deal with inflation (and most other risks) is a broadly diversified portfolio. After, inflation is the change in the price of goods and services, so invest in goods and services.
Keith
- Mon Nov 25, 2013 1:30 am
- Forum: Investing - Theory, News & General
- Topic: How to Invest for Retirement with Rick Ferri
- Replies: 11
- Views: 3897
Re: How to Invest for Retirement with Rick Ferri
I am also disappointed by the paucity of articles and forums on Investing IN Retirement. It seems that most advice is about planning for retirement and investing for the long haul etc and not as much discussion on the nuts and bolts of what to keep doing (or not doing) during retirement. I am puzzled why that is the case. Same here. Retired now three years. It took me a year to figure out there was a difference between accumulation and distribution stages. I think the life-cycle/liability-matching/safe-floor people are on the right track and there is quite a bit of information on that in the literature if you hunt for it. I eventually figured out that between SS and a DB pension as a "safe floor" I was pretty well set, except tha...
- Mon Nov 25, 2013 1:08 am
- Forum: Investing - Theory, News & General
- Topic: Equal Location or Asset Location?
- Replies: 42
- Views: 4430
Re: Equal Location or Asset Location?
Burton G. Malkiel, "A Random Walk Down Wall Street", 4th edition (1985), p. 282.docneil88 wrote:Just googled that expression and the only hit I got for that string was your post above.umfundi wrote:While we are here, a pop quiz: Who said?If you do own your own home, you will probably find that the house you live in is the best investment you ever made in your life
Fortunately, I do not regard my home as an investment. If I did, it would be the worst I ever made, by far.
Keith
- Sun Nov 24, 2013 4:25 pm
- Forum: Investing - Theory, News & General
- Topic: New Withdrawal Strategies from T. Rowe Price
- Replies: 10
- Views: 3468
Re: New Withdrawal Strategies from T. Rowe Price
What's missing from all of this is any assessment of needs and risks.
If you NEED 4%, go and buy an indexed (real) SPIA and you will get 4% for the rest of your life with virtually no risk.
Taylor Larimore says he has annuitized his required income, and is now gifting from the remainder during his life.
I agree with Nisiprius, these strategies that are tuned by back testing on historical data are more or less meaningless as strategies for individuals to adopt going forward.
Keith
If you NEED 4%, go and buy an indexed (real) SPIA and you will get 4% for the rest of your life with virtually no risk.
Taylor Larimore says he has annuitized his required income, and is now gifting from the remainder during his life.
I agree with Nisiprius, these strategies that are tuned by back testing on historical data are more or less meaningless as strategies for individuals to adopt going forward.
Keith
- Sun Nov 24, 2013 4:06 pm
- Forum: Personal Finance (Not Investing)
- Topic: Lease or buy a car?
- Replies: 31
- Views: 5261
Re: Lease or buy a car?
We bought a Toyota Solara new in 1999 and it is in great shape today with 180,000 miles on it. Last month we were able to buy a 2004 Lexus RX with 70,000 miles on it. You can save a huge amount of money keeping a car for a long time. If you are going to drive lots of miles there is no question that you should buy rather than lease. I have also bought some used cars, and was surprised by the high costs. Brakes, battery, tires, suspension parts and other maintenance add up quickly. A two-year old car is still depreciating at a pretty good rate. At three years you're looking at brakes and tires, at five years it's battery and suspension. And the other weird stuff like HVAC that costs hundreds because they have to dismantle the entire dashboar...