Search found 13412 matches

by jeffyscott
Wed Mar 27, 2024 5:17 pm
Forum: Investing - Theory, News & General
Topic: Vanguard fund to ETF conversion
Replies: 9
Views: 529

Re: Vanguard fund to ETF conversion

Somehow the ER difference doesn't seem to necessarily carry through to the returns.

viewtopic.php?p=7772746#p7772746
by jeffyscott
Wed Mar 27, 2024 9:49 am
Forum: Personal Investments
Topic: buying mutual funds seems easier than buying ETFs
Replies: 64
Views: 4862

Re: buying mutual funds seems easier than buying ETFs

bonesly wrote: Tue Mar 26, 2024 10:26 pm
jeffyscott wrote: Tue Mar 26, 2024 10:03 pm Any move from ETF to mutual fund would have to be a trade and is going to be a taxable event, if this is a taxable account.
Well that's terrible... :(

I guess the OP could shift future contributions to MFs and just let the ETFs sit, but meh.
Since their issue is (currently) with the buying of them, that would seem to resolve it. As I had mentioned previously, there could be future tax loss harvesting from the ETFs and dividends from the ETF can go to the MF.

Also, if they happen to be in the 0% LTCG bracket, they could fill that and pay only state income taxes.

I don't think the OP has even indicated whether or not the account is taxable, though.
by jeffyscott
Wed Mar 27, 2024 9:36 am
Forum: Personal Investments
Topic: TIPS Question
Replies: 7
Views: 521

Re: TIPS Question

Inflation adjusted principal is about $1200 for that bond, so you are getting about $1200 rather than $1000.

Just approximately, it's 0.9 X 1200 X 10 = $10,800.

To be more precise, the index ratio for the settlement date will be 1.20207, so it's actually $1202.07 in principal per bond. I found the index ratio here: https://eyebonds.info/tips/2024/tips2024_03b.html

0.900577×1202.07×10 + 3.01 = 10,828.5759
by jeffyscott
Tue Mar 26, 2024 10:03 pm
Forum: Personal Investments
Topic: buying mutual funds seems easier than buying ETFs
Replies: 64
Views: 4862

Re: buying mutual funds seems easier than buying ETFs

bonesly wrote: Tue Mar 26, 2024 9:49 pm You absolutely want to exchange your ETF shares into mutual fund shares...

If Schwab can't do what you're asking above, then I think you're stuck with ETFs as the only other option is to move to a brokerage (Van or Fido) that does have the funds you want and can exchange them "in-kind" so as not to trigger a taxable event for just changing share class.
I don't think it's possible to do an exchange from an ETF to a mutual fund, anywhere.

Also only Vanguard has the structure where the ETF is a share class of a mutual fund. But even there, they only allow mutual fund to ETF, not ETF to mutual fund.

Any move from ETF to mutual fund would have to be a trade and is going to be a taxable event, if this is a taxable account.
by jeffyscott
Tue Mar 26, 2024 9:58 pm
Forum: Personal Investments
Topic: buying mutual funds seems easier than buying ETFs
Replies: 64
Views: 4862

Re: buying mutual funds seems easier than buying ETFs

Well, judging by the volume on this thread, I stand by my thesis that buying mutual funds is simpler than buying ETFs! I'll try to clarify some things about my position. I simply want to tell my brokerage platform, in the evening, "invest $x into XYZ fund, at the next available opportunity." And I want a guarantee that $x will indeed be invested, within a reasonable time frame, e.g. 24 hours. Let the number of shares (including fractional) acquired float. Let the price per share I pay float. I cannot see a way to do this with ETFs on my Schwab platform. Another thing that's easier is making changes across multiple accounts. I'm in the process of gradually shifting taxable to stocks and offsetting that with trades in IRAs (and HSA...
by jeffyscott
Tue Mar 26, 2024 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: US obligations not included in the 1099
Replies: 12
Views: 506

Re: US obligations not included in the 1099

Geologist wrote: Tue Mar 26, 2024 3:56 pm The IRS boxes for the 1099-DIV do not include one for income from US government obligations (USGO) because this information is not relevant for federal tax returns.
If that's the reason, then why does the 1099-INT, unlike the DIV, have box 3 for reporting "interest earned on U.S. savings bonds or Treasury notes, bills or bonds"?
by jeffyscott
Tue Mar 26, 2024 9:39 am
Forum: Personal Investments
Topic: buying mutual funds seems easier than buying ETFs
Replies: 64
Views: 4862

Re: buying mutual funds seems easier than buying ETFs

Somewhere along the line I became convinced that ETFs were "better", in terms of income tax treatment, CGDs, and other features. Clearly they each have their pros and cons, but all in all, In retrospect, I wish I'd stuck with mutual funds. If it's a tax deferred account you can easily go back. If it's taxable you can at least switch new purchases to mutual funds and reinvest dividends from ETFs into mutual funds. If there's ever a market crash, you might be able to move some without tax consequences. Are the mutual fund substitutes that you would want available at Schwab, without transaction fees? Do you have the special transaction fee waiver for Vanguard, Fidelity, Dodge and Cox there? If not, might you have enough assets to ge...
by jeffyscott
Mon Mar 25, 2024 4:29 pm
Forum: Personal Investments
Topic: Horrified by Schwab Platform -- Where to Next?
Replies: 94
Views: 15609

Re: Horrified by Schwab Platform -- Where to Next?

RetiredAL wrote: Mon Mar 25, 2024 3:25 pm Schwab requires you sell a Money Market to cash first, then do a buy or transfer, thus you have to lead the buy or transfer by 1 business day.
The part about having to lead a buy by 1 business day is incorrect. You can do a buy order with cash being only in their money market fund. You just have to then manually sell from the money market fund to match the settlement date of the buy order.
by jeffyscott
Mon Mar 25, 2024 4:21 pm
Forum: Personal Investments
Topic: Horrified by Schwab Platform -- Where to Next?
Replies: 94
Views: 15609

Re: Horrified by Schwab Platform -- Where to Next?

I've looked at the Schwab website a few times, when considering where I want to consolidate my assets. Each time I come away somewhat bewildered as to what they offer and why I would want to transfer there. Maybe it's their marketing, or maybe I'm just dumb. :confused Not sure what you're looking for, but there's the same things offered as at any brokerage: Mutual Funds, ETFs, Bonds, CDs, plus a bunch of other stuff that I don't care about. What I meant was, what they offer as far as account features and services. For example, one thing I don't see mentioned on their website is how they do automatic withdrawals (taxable account or IRA withdrawals). On chat with one of their reps a few months ago, they said they can only do that if you enro...
by jeffyscott
Mon Mar 25, 2024 3:02 pm
Forum: Personal Investments
Topic: Horrified by Schwab Platform -- Where to Next?
Replies: 94
Views: 15609

Re: Horrified by Schwab Platform -- Where to Next?

GaryA505 wrote: Mon Mar 25, 2024 1:48 pm I've looked at the Schwab website a few times, when considering where I want to consolidate my assets. Each time I come away somewhat bewildered as to what they offer and why I would want to transfer there. Maybe it's their marketing, or maybe I'm just dumb.
:confused

Not sure what you're looking for, but there's the same things offered as at any brokerage:
Mutual Funds, ETFs, Bonds, CDs, plus a bunch of other stuff that I don't care about.
by jeffyscott
Mon Mar 25, 2024 2:50 pm
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5567

Re: Looking for advice on unhappy experience in VG short term bond fund

All I want from my fixed income allocation is for it to keep up with inflation, period. Then buy individual TIPS bonds. If you hold to maturity then you almost keep up with inflation (I say almost because you pay tax on the inflation adjustment each year, not a yearly cost if held in a retirement account although eventually it will be taxed when withdrawn). Since TIPS yields are near 2% real, I'm not sure that your "almost" for after-tax returns is even needed. At 2% inflation, you'd have to be paying over a 50% tax rate to not keep up with inflation after taxes. At 3%, it'd take a 40% tax rate. Most are in the 12, 22, or 24% federal brackets. Even at 24%, it'd take 6%+ inflation for taxes to bring the after-tax yield down to abo...
by jeffyscott
Mon Mar 25, 2024 11:00 am
Forum: Personal Investments
Topic: Considering a TIPS ladder. Is this the right approach?
Replies: 26
Views: 2743

Re: Considering a TIPS ladder. Is this the right approach?

zie wrote: Mon Mar 25, 2024 10:38 amThey offer normal constant duration bond funds, like BND AND they offer ladder ETF's or target maturity date bond funds, which are bond ladders.
Not sure about your terminology, they can be ladder components maybe, but a single target maturity fund is not a bond ladder.
A single ETF instead of a bunch of individual bond purchases.
To make a ladder you would have to buy a bunch of target maturity bond ETFs. Perhaps you have misunderstood what these ETFs are? If you buy the one for 2030 TIPS, it holds only the TIPS that mature in 2030 (all two of them).
by jeffyscott
Mon Mar 25, 2024 10:51 am
Forum: Personal Finance (Not Investing)
Topic: Avoiding State Tax on Treasuries held in ETFs and Mutuals
Replies: 11
Views: 1459

Re: Avoiding State Tax on Treasuries held in ETFs and Mutuals

relentless1 wrote: Thu Feb 23, 2023 4:48 pm FYI-both Schwab and E Trade break this out on their tax reports:

"Interest on U.S. Savings Bonds & Treasury obligations"
For Schwab are you talking about this: https://www.schwabassetmanagement.com/r ... nformation

I'd assumed you were, but jebmke's comments have me wondering if you meant something more specific to your holdings? I haven't seen anything other than the above. Even for SNSXX (treasury money market), I had to look up the percentage and do my own calculation.
by jeffyscott
Mon Mar 25, 2024 10:18 am
Forum: Investing - Theory, News & General
Topic: VTMSX vs VIOO?
Replies: 19
Views: 2643

Re: VTMSX vs VIOO?

Alternatively, you could use Vanguard Small-Cap Index; the ETF class VB is even less expensive, although the stocks aren't quite as small. (The CRSP Index that Vanguard uses tracks the bottom 15% of the market; S&P's index is about the bottom 10%.) Isn't the additional difference between CRSP Index used by VB and S&P 600 that S&P 600 is selected by committee and CRSP Index is more like a computer generated? Yes, this is correct. The Russell 2000 (VTWO) is an index which actually tracks the bottom 10% of the market. The S&P 600 selects 600 companies from about the same range to be representative of the market, but it also has other criteria. In the long run, I wouldn't expect the Russell or S&P to do better, but there ar...
by jeffyscott
Mon Mar 25, 2024 10:04 am
Forum: Investing - Theory, News & General
Topic: VTMSX vs VIOO?
Replies: 19
Views: 2643

Re: VTMSX vs VIOO?

grabiner wrote: Sun Apr 18, 2021 2:08 pmBut if you aren't in a high tax bracket, saving three basis points over VTMSX by investing in the iShares ETF IJR which tracks the same index may be better.
That hasn't paid off so far.

In case the ERs may have changed over longer time frames, I looked at 3 year and 5 year returns as of the end of Feb and, according to M*, VTMSX has beaten IJR by about 0.11%, annualized, in both cases.

For longer terms, there is a much smaller difference of 0.01% in favor of VTMSX: https://www.portfoliovisualizer.com/bac ... gZK1ZasSWb
by jeffyscott
Mon Mar 25, 2024 9:54 am
Forum: Investing - Theory, News & General
Topic: VTMSX vs VIOO?
Replies: 19
Views: 2643

Re: VTMSX vs VIOO?

grabiner wrote: Sun Apr 18, 2021 2:08 pm The tax-managed fund is likely to be slightly more tax-efficient, because it has more qualified dividends. (Unlike Tax-Managed Capital Appreciation, it isn't managed for a lower dividend yield).
Seems to have been (surprisingly :?: ) little avoidance last year, VTMSX had 80.48% QDI and VIOO 80.16%.
by jeffyscott
Mon Mar 25, 2024 9:26 am
Forum: Personal Investments
Topic: buying mutual funds seems easier than buying ETFs
Replies: 64
Views: 4862

Re: buying mutual funds seems easier than buying ETFs

syc wrote: Sun Mar 24, 2024 2:37 pm The point about mutual fund purchasing process is a good one, that I had not considered before. So placing an order for a mutual fund is essentially a market order? It executes at whatever the next closing price is, getting me however many shares I can get for my $2000?
Yes, if you put in an order after hours tonight, for example, you would get the mutual fund at price based on tomorrow's closing prices for all of it's holdings. Mutual funds are always priced at the NAV, so there's also no spread or market discount/premiums to concern yourself with.

However, at Schwab, depending on what mutual funds you would be buying, there may be transaction fees.
by jeffyscott
Mon Mar 25, 2024 9:10 am
Forum: Personal Investments
Topic: Navigating Tax Loss Harvesting Decisions: VTSAX vs. VLCAX in Taxable Account
Replies: 9
Views: 830

Re: Navigating Tax Loss Harvesting Decisions: VTSAX vs. VLCAX in Taxable Account

If I invest new funds into VTSAX, holding both VTSAX and VLCAX, how would tax-loss harvesting (TLH) work in practice? Specifically, if a TLH opportunity arises, I understand I could sell VLCAX to buy VTSAX. Can I also do the reverse simultaneously—sell VTSAX to buy VLCAX, effectively oscillating between the two without adding more funds solely for TLH purposes? No, if you want to sell both at a loss you'll need a third option. Consider switching to ETFs which would given you ITOT, another total market fund that follows a different index than VTSAX/VTI. For those that want to stick to mutual funds, another option would be VTCLX (tax managed capital appreciation). Since it's basically the Russell 1000, it's actually a bit closer to VTSAX tha...
by jeffyscott
Mon Mar 25, 2024 8:39 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

I'm not advocating for or against someone else selling in order to extend maturity, but since I was curious about the actual results to date for my worst purchases, I refined the numbers for one of them and looked at results for a low coupon one. I bought the April 2028 TIPS at a real yield of 0.08% in May 2022. The actual amount paid was $2138 per bond, the cost basis is now $2274 according to Schwab. The market value is about $2029, so my actual loss is $109 (-5.1%), not the $245 (-12%) that Schwab shows. Net coupon payments have been about $165 (including estimated $35 coming in a few weeks and subtracting the accrued interest of about $6 at the time of purchase). So from this one I have a net gain of about $56 or 2.6% over nearly 2 year...
by jeffyscott
Sun Mar 24, 2024 10:25 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

Currently, if I sell the 2025s through 2027s , acc. to Fidelity's "Positions" page, I would be selling at a loss totaling close to $2700. That's a pretty big hit. I question whether I would ever recover that if I used the proceeds to buy 2034s and 2040s today at close to 2% YTM. How are these "losses" (paper losses) on the Fidelity "Positions" page calculated? (Maybe you understand this already and this is an unnecessary diversion to the thread, but I thought I would ask anyway as it might benefit other readers.) I use Vanguard and it has a page called "Cost basis – Unrealized gains/losses." Just about every lot of every TIPS I am still holding is showing an "unrealized loss," even though i...
by jeffyscott
Sun Mar 24, 2024 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding State Tax on Treasuries held in ETFs and Mutuals
Replies: 11
Views: 1459

Re: Avoiding State Tax on Treasuries held in ETFs and Mutuals

jebmke wrote: Sun Mar 24, 2024 5:24 pm
jeffyscott wrote: Sun Mar 24, 2024 5:06 pm
jebmke wrote: Thu Feb 23, 2023 4:50 pm
relentless1 wrote: Thu Feb 23, 2023 4:48 pm FYI-both Schwab and E Trade break this out on their tax reports:

"Interest on U.S. Savings Bonds & Treasury obligations"
VG does too except, oddly for the settlement fund
Sure they do:
Federal Money Market Fund† 49.37%
†This information applies to the Vanguard Federal Money Market Settlement Fund.


I'm pretty sure that every fund company publishes this information for their funds in one form or another.
wasn't on either of my VG brokerage statements. I had to get it from the supplemental schedule they publish. The Treasury index fund was shown but not the settlement fund.
Oh I have never seen anything on a statement, I assumed you were just talking about the supplement.
by jeffyscott
Sun Mar 24, 2024 5:06 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding State Tax on Treasuries held in ETFs and Mutuals
Replies: 11
Views: 1459

Re: Avoiding State Tax on Treasuries held in ETFs and Mutuals

jebmke wrote: Thu Feb 23, 2023 4:50 pm
relentless1 wrote: Thu Feb 23, 2023 4:48 pm FYI-both Schwab and E Trade break this out on their tax reports:

"Interest on U.S. Savings Bonds & Treasury obligations"
VG does too except, oddly for the settlement fund
Sure they do:
Federal Money Market Fund† 49.37%
†This information applies to the Vanguard Federal Money Market Settlement Fund.


I'm pretty sure that every fund company publishes this information for their funds in one form or another.
by jeffyscott
Sun Mar 24, 2024 12:12 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

^ If you want to hedge your bets a bit and have some extra money to do it with, you could just buy some longer TIPS outside the ladder. If real yields fall, you can sell and if they don't just hold to maturity (or heirs can do so).

I'm not really doing a ladder, but when real yields have gotten high enough, I have put a small amount into 2040+ TIPS. I got the 2040 at about 2.5% and 2044 at about 2.2%. As sort of a reverse hedge, I am more inclined to go for the higher coupon issues when doing this, but haven't been bold enough to consider the 2054 yet.
by jeffyscott
Sun Mar 24, 2024 10:49 am
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 66
Views: 5567

Re: Looking for advice on unhappy experience in VG short term bond fund

All I want from my fixed income allocation is for it to keep up with inflation, period. ... *I'm also considering putting part in a 5-year TIPS. But having looked at recent TIPS thread posts, I'm not confident these don't also come with potential curve-balls I don't understand. Individual TIPS bought and held to maturity would seem to be the obvious answer to both guarantee a return above inflation and to eliminate your psychological pain from seeing NAV fluctuations in a fund. There's no curve balls, if you buy a TIPS with a 2% real yield and hold to maturity you will earn a yield of inflation+2%. There will be coupons to reinvest in something or to spend along the way and there will be principle to reinvest or spend upon maturity. Of cou...
by jeffyscott
Sun Mar 24, 2024 10:06 am
Forum: Investing - Theory, News & General
Topic: VSIGX and VSBSX's Capital Gains
Replies: 4
Views: 497

Re: VSIGX and VSBSX's Capital Gains

If they are share classes of the same fund, there can not be distributions to one share class and not the other.

You can see VGIT had capital gain distributions in 2020 and 2021, here:
https://www.morningstar.com/etfs/xnas/vgit/performance (click on "distributions" just above the chart on that page)
by jeffyscott
Sat Mar 23, 2024 9:32 am
Forum: Personal Investments
Topic: Considering a TIPS ladder. Is this the right approach?
Replies: 26
Views: 2743

Re: Considering a TIPS ladder. Is this the right approach?

These funds will be in a mix of taxable and tax-deferred accounts but I don't think that affects the choice between directly purchased bonds and funds very much. As you note, the fund(s) would be easier for doing taxes. So that could mean that you would want to put individual TIPS in tax-deferred, but use the fund in taxable. Not that it affects the choice between fund(s) and individual TIPS, but in tax deferred, you most likely lose the tax exemption. The only exceptions to that appear to be Oregon, NJ, and Wisconsin, so in those states the fund(s) would make tracking for taxes much easier in a tax-deferred account. With a 15 year ladder, about 1/3 of the years are not going to have a TIPS, so you'll be doing some duration matching even w...
by jeffyscott
Sat Mar 23, 2024 8:53 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

Here's an alternative where I told it to pick the earliest maturing, rather than highest yield.
https://www.tipsladder.com/build?income ... r=Earliest

This makes it pick the January for 2032 and 2033, which have the lower coupons for those years. That reduces the pre-ladder interest by about $10K. Cost to purchase is about the same.

It looks like the assumption is that pre-ladder interest is used for 2030, the first year of the ladder.

I don't know anything about it or what it might do differently from that site, but #cruncher has a TIPS ladder builder here: https://eyebonds.info/downloads/index.html
by jeffyscott
Sat Mar 23, 2024 8:28 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

Another TIPS question. I was looking at tipsladder.com and here is one such ladder. Now looking at it, it seems to me, one would be paying quite a bit for the TIPS marked in red. Is that correct? Do people skip buying some yrs if they have other sources for income? Yes, the prices for the TIPS in red are correct. No, people don't skip rungs in a TIPS ladder, unless they don't want a ladder. The reason you pay so much for the 2032 TIPS 912810FQ6 is because of the 3.375% coupon payment. The 2040 TIP 912810QF8 that you would purchase for 2038 income also has a large coupon at 2.125%. These coupon payments are part of your annual income from the ladder in previous years. So if you didn't buy the 2032 TIPS you would need to buy more of the 2030...
by jeffyscott
Fri Mar 22, 2024 8:55 pm
Forum: Personal Finance (Not Investing)
Topic: Does schwab provide auto daily liquidation like Fidelity?
Replies: 11
Views: 1762

Re: Does schwab provide auto daily liquidation like Fidelity?

jello_nailer wrote: Wed Mar 25, 2020 11:51 pm and it irritates the living crap out of me...
So why not just move to Fidelity, if that feature is so important to you?
by jeffyscott
Fri Mar 22, 2024 8:52 pm
Forum: Personal Finance (Not Investing)
Topic: Need help! do I owe this much in taxes?
Replies: 7
Views: 1342

Re: Need help! do I owe this much in taxes?

I just went to do taxes and my accountant is telling me that I owe taxes on $16,338 of my ROTH IRA account. Below are the details from my tax documents. APEX C/F ROTH IRA ROTH OR ESA CONTRIBUTION 2023 6,500.00 ROTH CONVERSION AMOUNT 2023 4,338.47 PERIODIC DISTRB PREMATURE 2023 11,999.99 FAIR MARKET VALUE - 12/31/23 ** 16,157.26 I understand that I owe taxes on the roth conversation of $4338.47... but why would I owe taxes on the $11.999.99? Those were my own roth ira contributions that i took out. Am I correct? Does your accountant know that they are your contributions? You probably just need to clarify. Tell him what your total contributions have been to date "for the purposes of line 22 of form 8606." I guess not, I was so thro...
by jeffyscott
Fri Mar 22, 2024 3:33 pm
Forum: Investing - Theory, News & General
Topic: Managing Market Risk in Holding a TIPS Fund
Replies: 20
Views: 1542

Re: Managing Market Risk in Holding a TIPS Fund

If you're only likely to want to spend a small percentage, then the higher yield ones can give a little more cash flow. IIRC, there's a few 2040+ ones with 2.125% coupons. So you could get 2.125% inflation adjusted cash each year w/o selling anything from those.

Of course, higher coupons have more reinvestment risk if you're not spending it.
by jeffyscott
Fri Mar 22, 2024 3:27 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

samulta52 wrote: Fri Mar 22, 2024 1:35 pm So I should just go by maturity date alone? What about the last 2 rows in the first TIP 91282CBF7. Price/Yield 89.234/1.813% vs 89.328/1.798.
I thought you were asking only about choosing between the two bonds, not which quote to choose. But, of course you'd choose the best price for the quantity that you intend to buy.

Not sure what would happen if you picked a worse one, isn't the brokerage obligated to seek the best price they can get for you?
by jeffyscott
Fri Mar 22, 2024 1:03 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

samulta52 wrote: Fri Mar 22, 2024 12:55 pm I assume the yield difference will get negated by the price that I will be paying.
No, but a reasonable assumption would be that the yield difference is primarily due to the seasonality of inflation and so both will likely end up getting similar nominal yields if both are held to maturity.
by jeffyscott
Fri Mar 22, 2024 12:50 pm
Forum: Personal Investments
Topic: Nominal treasuries in PreTax 401k?
Replies: 9
Views: 556

Re: Nominal treasuries in PreTax 401k?

Planning to buy small amount of 5 or 7 yr treasuries in pretax 401k account. I hope to retire around in 6-7 yrs. Main reason is that so far I have bought t-bills in my brokerage account and then I get nailed for additional taxes due to being in high income bracket. But having them in 401k, I will loose the no state tax benefits (live in high state tax state). Any recommendations? There are actually several states that allow deduction of US Government Obligation interest when earned in a 401(k)/traditional IRA. I’m interested in learning more about this. Do you know of resources and/or wiki page where this is discussed in detail? Does the deduction assume or require that one is also taking a distribution from the pre-tax account of the inte...
by jeffyscott
Fri Mar 22, 2024 9:37 am
Forum: Personal Investments
Topic: Nominal treasuries in PreTax 401k?
Replies: 9
Views: 556

Re: Nominal treasuries in PreTax 401k?

Fed+state taxes at the time of withdrawal may still be less than current Federal taxes if held in taxable.

I've used brokered CDs in tax deferred, when the yields are higher than nominal treasuries. But currently I think there's little difference between non-callable CDs and a nominal treasury of the same term.
by jeffyscott
Thu Mar 21, 2024 3:56 pm
Forum: Investing - Theory, News & General
Topic: Managing Market Risk in Holding a TIPS Fund
Replies: 20
Views: 1542

Re: Managing Market Risk in Holding a TIPS Fund

oxothuk wrote: Wed Mar 20, 2024 4:36 pm A TIPS fund is subject to the same volatility as the bonds themselves - increasing in value when interest rates fall, decreasing when interest rates rise.
Right, and so a fund from which you make small periodic withdrawals would be like liquidating, say, 4% of each TIPS held each year. My guess would be that over a 20 year or so period of making small withdrawals like that there'd not likely be much difference between that and the non-rolling ladder. Any potential difference could be further reduced by using multiple funds to match duration.

I think either approach is fine. Note that a non-rolling ladder will also have to do duration matching for 25% of the 20 years, since no TIPS mature in 2035-39, currently.
by jeffyscott
Thu Mar 21, 2024 12:46 pm
Forum: Personal Finance (Not Investing)
Topic: Which loans to pay off, advice
Replies: 21
Views: 1488

Re: Which loans to pay off, advice

CAsage wrote: Thu Mar 21, 2024 11:38 am I would not pay off the rental property mortgage, because that is deductible against your rental income.
But isn't that offset by taxes on the 5% interest on VUSXX, at least for federal?

If it's the 22% bracket, then the after tax cost of the loan is 5.265%, but VUSXX after tax yield is about 3.9%.

The 6.75% loan is the only one that makes financial sense to pay down, currently. The mental accounting of "walling it off" seems illogical, unless there's possibility of defaulting on the loan or something.
by jeffyscott
Thu Mar 21, 2024 9:24 am
Forum: Personal Finance (Not Investing)
Topic: Medigappers: which plan do you have and why
Replies: 89
Views: 5024

Re: Medigappers: which plan do you have and why

There are some states with more lenient rules, where switching from G-HD to G could be possible without underwriting. New York, Connecticut, Massachusetts, Vermont, and Washington come to mind. (Other states have lenient rules, but most of those are restricted to moving to a plan of equal to or lesser benefits.) Of course, those states have higher premiums for everyone. Especially New York! New York cries out for people to take Plan G-HD. Yes of course, the more lenient the rules the more adverse selection there will be. Those with low medical expenses can pick a plan with higher deductible and then just switch to lower or no deductible when/if they start having higher expenses. This fills the low deductible plan with the people that have ...
by jeffyscott
Wed Mar 20, 2024 1:39 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

Some more basics questions:- 1. Let us say a new 10YR TIPS is auctioned at coupon rate of 0%. I buy $1000 worth now in March 2024. From my understanding after 10 years, I get back $1000 in 2034 dollars at maturity. And I wouldn't get any interest payments during those 6 yrs. Correct? Treasury has a minimum coupon of 0.125%, so a TIPS auction that results in 0% real yield means you would pay a bit more than $1000, maybe about $1013. You would get half the 0.125% as a coupon payment every 6 months. The $1000 is 2024 dollars not 2034. In 2034 it would be, for example, $1200 if cumulative inflation had been 20%. If the auction had 2% real yield, you'd buy for $1000 and get a 1% coupon payment twice a year. Final principal would be the same as ...
by jeffyscott
Wed Mar 20, 2024 10:46 am
Forum: Personal Investments
Topic: Can TIPS in a taxable account make sense?
Replies: 22
Views: 2682

Re: Can TIPS in a taxable account make sense?

^ That's a good point, had I accumulated TIPS in taxable when working, I'd have paid 25% or 22% federal tax during that time.

Doing it in tax deferred, I would now pay about 18% combined federal and state taxes upon withdrawal.
by jeffyscott
Wed Mar 20, 2024 10:37 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

Price, yield and coupon are all related. Looking at some examples in the 8y maturity range, the Jan 2032 TIPS has a 0.125% coupon and the Apr 2032 TIPS has a 3.375% coupon. The yields for both are about 2%, but the price for the Jan issue is 86.714 and the price for the Apr issue is 110.123. The difference in prices is what results in the yields being about the same, despite the large difference in coupons. Thanks. So in the above case, it should be ok to buy either one as for the one with lower coupon you paying less upfront? I mean that $86.714 is taking into account the 0.125% vs 3.375% of the other TIP? Yes, yesterday's yields (based on WSJ quotes) were about 2% for both. Of course, the 3.75% coupon means the duration is shorter and th...
by jeffyscott
Wed Mar 20, 2024 8:35 am
Forum: Investing - Theory, News & General
Topic: Why have the current short term TIPS yields plummeted?
Replies: 2
Views: 737

Re: Why have the current short term TIPS yields plummeted?

Does this have something to do with the principal payments being imminent? Yes, for example: The important point is that the real yield of -1.70% has no significant meaning in terms of an investment decision. Bond traders are pricing the Apr 2024 TIPS to be competitive with a nominal bond maturing on the same date, and they now can do that with certainty. https://www.bogleheads.org/forum/viewtopic.php?p=7763165#p7763165 For July 2024 and January 2025, they've not fully transitioned to being effectively nominal bonds but there is less unknown inflation to consider. We already know the inflation adjusted principal through May 1, from this it is known that the principal will increase by 0.83% between now and then. You can determine what short...
by jeffyscott
Wed Mar 20, 2024 8:06 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466375

Re: Trading Treasuries (nominal and TIPS)

When buying TIPS on secondary mkt, what should newbies look at? I know what duration and amount I want but what to look after that to decide if it is worth buying or not. How would you decide if a nominal treasury is "worth buying or not"? Just like nominal treasuries, you can assume that the market is efficient and just buy the TIPS that matures at the time that you want. In case of multiple TIPS maturing close to each other, how do I know one is better than the other? Assume that one is not better than another, that the market has appropriately priced in all possible considerations, except for your individual interest in a certain date of maturity. Some might give some preference to the one with lower or higher coupon or the on...
by jeffyscott
Tue Mar 19, 2024 5:14 pm
Forum: Personal Investments
Topic: Fees for selling Mutual Funds?
Replies: 18
Views: 1610

Re: Fees for selling Mutual Funds?

Knowing that they aren't Vanguard funds, would it be worthwhile to move them to a different brokerage before selling, maybe one that doesn't have a fee for selling 'non-brokerage-associated' mutual funds? Here are some of the mutual fund tickers to give an idea. MDNLX CIVVX SASMX CSFAX EGFFX As beyou indicated above the back-end loads are not from the brokerage, they are charged by the fund. If the funds are ntf at Vanguard, you'll not save anything by moving elsewhere, because Vanguard is not charging you anything. It appears that all are NTF at Vanguard, so there's no reason to move elsewhere to sell. Here's the first one: https://investor.vanguard.com/investment-products/mutual-funds/profile/mdnlx You can find the Vanguard page like tha...
by jeffyscott
Tue Mar 19, 2024 10:08 am
Forum: Personal Investments
Topic: Can TIPS in a taxable account make sense?
Replies: 22
Views: 2682

Re: Can TIPS in a taxable account make sense?

I have had them in tax deferred, but after looking at the tax drag differential, holding some in taxable seems like it would be a reasonable choice for me (once ACA is no longer a factor). For stocks in taxable, we pay about 6.5% state and 0% federal on QDI/LTCG. In tax-deferred that would become 12% Federal with no change for state. With dividends of about 1.5%, the tax drag is about 0.1% of the balance for taxable. Meanwhile, in tax deferred, the total tax rate on the gains upon withdrawal changes from 6.5% to 18.5%. For treasuries/TIPS in taxable we would pay 12% Federal and 0% state. For treasuries in tax deferred, state tax becomes about 6.5%*, with no change to Federal. At current interest rates, the tax drag in taxable is about 0.5% ...
by jeffyscott
Tue Mar 19, 2024 9:03 am
Forum: Personal Finance (Not Investing)
Topic: Have any of you Frugal Zebras Changed Your (Spending) Stripes?
Replies: 139
Views: 12965

Re: Have any of you Frugal Zebras Changed Your (Spending) Stripes?

Yeah I dunno it is something about the SHORT TIME involved on a flight that I wrestle with. And the level of service. I'm happy to do it on the company dime (I'm not some idealistic Robin Hood or whatever) but when it's my own money it is just.....I dunno.....the people in Economy Plus are still arriving at the same destination at the same time. So you get a couple glasses of 12 dollar bottle wine in Biz Class and a "nicer meal". Yes you can lie flat and sleep which is a real benefit. But literally if some dude approached me and said "I will PAY YOU 6000 DOLLARS IN CASH IF YOU STAY UP THIS FRIDAY NIGHT UNTIL 5AM AND THEN GET 2.5 HOURS OF SLEEP AND THEN GET UP AND DO YOUR SATURDAY" i would sign up in a heartbeat. So the ...
by jeffyscott
Mon Mar 18, 2024 4:13 pm
Forum: Personal Finance (Not Investing)
Topic: Paying for grandparents to babysit, medical insurance implications
Replies: 43
Views: 4728

Re: Paying for grandparents to babysit, medical insurance implications

This may be of interest:
Alien lawfully present in the United States.

Certain aliens with household income below 100% of the federal poverty line are not eligible for Medicaid because of their immigration status. You may qualify for the PTC if your household income is less than 100% of the federal poverty line if you meet all of the following requirements.
...
https://www.irs.gov/instructions/i8962# ... k100077021

So it seems you may just have to somehow convince the system that they really are not eligible for medicaid, due to the green card provisions?
by jeffyscott
Mon Mar 18, 2024 3:56 pm
Forum: Personal Finance (Not Investing)
Topic: Paying for grandparents to babysit, medical insurance implications
Replies: 43
Views: 4728

Re: Paying for grandparents to babysit, medical insurance implications

Regressor wrote: Mon Mar 18, 2024 3:32 pm However, the conditions my my parents' legal status (USA resident with green card) states that they cannot use any "means-based" programs, which MedicAid is but Obamacare/ACA is not.
So they are not supposed to apply for medicaid, but if they try to apply for ACA coverage the system won't let them, instead directing them to medicaid due to low income?

What if they overstate their expected income on the ACA site? This will reduce their subsidies, but be corrected when they file taxes. As long as income is at least 100% of poverty they are still eligible for subsidies.

(I can't imagine there'd be a clawback of the subsidies even if actual income ends up below 100% of poverty, but I have no idea what the law is on that.)
by jeffyscott
Mon Mar 18, 2024 3:35 pm
Forum: Investing - Theory, News & General
Topic: VTIAX and VFWAX are only 90% international, VSS only 85%
Replies: 5
Views: 1148

Re: VTIAX and VTWAX are only 90% international, VSS only 85%

asset_chaos wrote: Sun Mar 17, 2024 8:16 pm I clearly don't understand how this is reported. How does total world (vtwax) have 90% foreign income and 80% qualified dividends, per the 1099 I got for total world?
OP meant VFWAX, check the image.
by jeffyscott
Mon Mar 18, 2024 12:50 pm
Forum: Personal Finance (Not Investing)
Topic: Have any of you Frugal Zebras Changed Your (Spending) Stripes?
Replies: 139
Views: 12965

Re: Have any of you Frugal Zebras Changed Your (Spending) Stripes?

If I were to splurge, I think a likely possibility would be a beachfront vacation home. We probably could pull that off with what we have. The hassles of owning and the fact that we would probably have to rent it to others make it unappealing. As a billionaire, I could buy it and let it sit empty for 10 or 11 months each year. Even as a billionaire the house would require maintenance and repairs. Yes, you could pay someone to manage the house, but you could also pay someone to manage it as a rental even as a non-billionaire. I agree with your general point though, I much rather rent a vacation home than buy. Right, the difference would be not needing to rent it to others. Doing that makes it not much different from just renting a place for...