Search found 305 matches

by financialguy
Mon Oct 27, 2008 8:23 am
Forum: Investing - Theory, News & General
Topic: For Richer now Poorer
Replies: 10
Views: 2568

Let's see...there are hundreds if not thousands of families affected by this and the author states "It is hard to have sympathy for people who make that much money when the average New Yorker makes $85,000." Then we have people on this forum seemingly jumping up and down with glee over other people's turn of events. I read the article yesterday in the Chicago Tribune and found the author's "It's hard to have sympathy..." statement completely in poor taste. Excellent point, Ed. It reminds me of The Ultimatum Game, where it's been proven that people will literally sacrifice their own well-being in order to see to it that others are hurt more, in the name of fairness. See http://www.google.com/search?hl=en&q=the+ultima...
by financialguy
Fri Oct 24, 2008 9:23 am
Forum: Investing - Theory, News & General
Topic: Any buyers out there II?
Replies: 58
Views: 10104

I just put half my paycheck into Emerging Markets today.
by financialguy
Wed Oct 22, 2008 10:22 am
Forum: Investing - Theory, News & General
Topic: Why are Vanguard's Expense Ratios High ...
Replies: 35
Views: 8724

Met Income wrote:
financialguy wrote:TSP doesn't waste money on TV, radio, magazine and newspaper ads.
Why is it wasteful? They have to make money, too.
Vanguard's customers come primarily through word of mouth (free advertising). I highly doubt they're measuring ROI on their ads. If they did, I bet they would be shocked at the money they're wasting.
by financialguy
Tue Oct 21, 2008 11:42 am
Forum: Investing - Theory, News & General
Topic: Why are Vanguard's Expense Ratios High ...
Replies: 35
Views: 8724

TSP doesn't waste money on TV, radio, magazine and newspaper ads.
by financialguy
Tue Oct 21, 2008 10:19 am
Forum: Investing - Theory, News & General
Topic: Shiller: Homeownership is a bad investment
Replies: 480
Views: 69871

As someone who does not yet have kids, I've found it highly worthwhile to rent. If anything breaks, all I have to do is call the landlord. Any maintenance or repairs are his problem, not mine.

All I have to do is come up with the rent each month.
by financialguy
Mon Oct 20, 2008 10:44 am
Forum: Personal Finance (Not Investing)
Topic: Economic benefits of citizenship
Replies: 64
Views: 12086

Another reason to stay in the US is that his children will have US education This is a benefit? :D On the flip side, immigrants who are not absolutely sure of planning to spend the rest of their lives in the US might want to think about whether they really want to be handcuffed to the IRS even if they leave and are no longer benefitting from the government services that their taxes are paying for. You can forfeit citizenship to escape those taxes. Nope. At least not for ten years. You are still liable for income tax for ten years after you renounce citizenship. This is a very good point. It's important to keep in mind that as late as 1986 the top marginal tax rate was 50%. (In 1980 it was 70%!) There's certainly a non-zero chance it could ...
by financialguy
Sun Oct 19, 2008 7:02 am
Forum: Investing - Theory, News & General
Topic: Transition from 100% equity to bond=age
Replies: 23
Views: 4043

What I've been doing is upping my bond allocation by one percentage point every time my portfolio hits $X. What I mean is, let's say your portfolio's at $100,000 right now, and you're at 100% equities: - You decide to start buying bonds, and you go to 99% equities/1% bonds. - Once you hit $110,000, you go up another percentage point. Now you're at 98/2. - At $120,000, you're at 97/3. ...and so on, until you're at your goal of bonds=age. By doing this system, you're gradually easing into bonds instead of buying all at once, which allows you to, as others have said, just direct some of your new money into bonds. (By the way, you don't have to have $10,000 increments be the point where you keep upping your bond allocation by 1%. I just used th...
by financialguy
Sat Oct 18, 2008 4:49 pm
Forum: Investing - Theory, News & General
Topic: Soviet Collapse Lessons Every American Needs To Know
Replies: 2
Views: 1259

Fascinating talk. Thanks for sharing.
by financialguy
Fri Oct 17, 2008 4:59 pm
Forum: Personal Investments
Topic: Going All In
Replies: 69
Views: 16109

Please keep in mind that the maximum the Dow has fallen from peak to trough is 89%. That would mean the market would need to be cut in half from where it is now -- and then it would need to be cut in half again!

Would you be okay with that?

P.S. I've had massive losses too in the past year, in my case equivalent to 78% of gross annual salary! :shock: I do have more shares now though, bought at cheaper prices. I guess that's good, right? :)
by financialguy
Fri Oct 17, 2008 10:23 am
Forum: Personal Finance (Not Investing)
Topic: "Potentially Negative Item" on Credit Report
Replies: 5
Views: 2487

Post your story at http://www.debtorboards.com/ and see what feedback you get.

The Fair Debt Collection Practices Act is surprisingly favorable to consumers, and debt collectors violate it all the time (betting on the fact that most consumers do nothing). So you may have something here. But I'd post it at debtorboards and see what those folks say.
by financialguy
Fri Oct 17, 2008 8:47 am
Forum: Personal Investments
Topic: REITs in taxable account
Replies: 5
Views: 1780

I've simply accepted it as the only asset class that I can't hold in taxable. If you want in your taxable account you could always buy some stock in companies that get most of their profits from real estate but are not organized as REITs, but that strategy brings its own complications.
by financialguy
Wed Oct 15, 2008 10:17 am
Forum: Investing - Theory, News & General
Topic: I-Bonds: buy now or wait until November?
Replies: 82
Views: 16654

Sorry, but I don't think it was nit-picking to clarify that I-Bonds...are one of the best assets to hold during a period of deflation really meant that they are not quite the worst fixed income option under deflation. I was just trying to understand why one would think I-bonds are a great investment under deflation, because it made no sense to me. Now if you had said they are good under inflation and not horrible under the, probably unlikely, scenario of deflation that would be another matter. Haha, okay, it's a matter of semantics. I define an investment "one of the best" when it is better than: - All equities (large cap, small cap, you name it) - All real assets (REITs, land, artwork, etc.) - All TIPS Under a deflationary spira...
by financialguy
Wed Oct 15, 2008 8:40 am
Forum: Investing - Theory, News & General
Topic: Rule of thumb, Max loss = half of equity?
Replies: 24
Views: 4987

By July 8, 1932, the Dow had declined 89% from its peak. So maybe the rule should be:

Maximum Loss = 89% of Equity

:)
by financialguy
Wed Oct 15, 2008 8:36 am
Forum: Investing - Theory, News & General
Topic: I-Bonds: buy now or wait until November?
Replies: 82
Views: 16654

Wow, that's funny how my little comment got nitpicking responses. All I was saying was that protection against a deflationary spiral was an additional advantage of I-Bonds not present in a lot of other asset classes. (It's certainly not present in TIPS, equities, or real assets.)

And yes of course stuffing money under the mattress is one of the best investments during a deflationary spiral. That's the whole problem with deflation!

Sometimes this board reminds me of an academic conference where the professors get in long passionate arguments about minutia.
by financialguy
Tue Oct 14, 2008 8:35 pm
Forum: Personal Investments
Topic: Ginnie Mae Bonds
Replies: 1
Views: 1105

There are a lot of excellent discussions you can find through the search feature.

I'm an investor in Vanguard's GNMA fund for a couple reasons:
- Much higher yield than Treasury funds.
- Free of default risk. (They're backed by the US government.)

It's important to note that they have interest rate risk not present in the Short-Term Treasury Fund. If interest rates are falling, some homeowners may refinance their mortgages at the lower rates, so you don't get the same degree of upward pressure on the fund's value that you would with the Treasury Fund.

Hope this helps.
by financialguy
Tue Oct 14, 2008 1:56 pm
Forum: Investing - Theory, News & General
Topic: I-Bonds: buy now or wait until November?
Replies: 82
Views: 16654

jeffyscott wrote:
financialguy wrote:I did in fact mean deflationary spiral.

I would not see I-bonds as a substitute for equity or real assets that may do poorly under deflation. Among fixed income options, they (and TIPS) would be the worst choices under deflation, wouldn't they? So whatever deflationary protection they do provide would be less than the competing options.
You are half right. TIPS principal can decline, and therefore are not a good protection against deflation. I-Bonds, however, cannot have a decline of principal, and so are one of the best assets to hold during a period of deflation.
by financialguy
Tue Oct 14, 2008 1:12 pm
Forum: Investing - Theory, News & General
Topic: I-Bonds: buy now or wait until November?
Replies: 82
Views: 16654

jeffyscott wrote:I assume your meant to say: I-Bonds give you protection against the black swan of an inflationary spiral. :?
While I-Bonds are great protection for inflation, I did in fact mean deflationary spiral. The returns of I-Bonds will never go below zero, unlike many other asset classes which get walloped in a deflationary environment, such as equities and real assets. (It's important to note that Treasury Bills are good for protection against deflation too, such as in the first 3 years of the Great Depression when they returned 7.1% real.)

As for an inflationary spiral, you can also do well with equities and real assets.
by financialguy
Tue Oct 14, 2008 8:56 am
Forum: Investing - Theory, News & General
Topic: I-Bonds: buy now or wait until November?
Replies: 82
Views: 16654

I-Bonds give you protection against the black swan of a deflationary spiral. You might want to buy them for that reason alone, never mind the 0% fixed.
by financialguy
Sun Oct 12, 2008 2:05 pm
Forum: Investing - Theory, News & General
Topic: would an efficient market drop 45% ?
Replies: 63
Views: 10157

Re: would an efficient market drop 45% ?

One of the failures of the wisdom of crowds is when emotion is introduced. And there's a lot of panic out there.

Plus, as studies have shown, the whole reason for the ~10% expected returns is the risk of decline. If there were no risk of decline, equities would have expected returns similar to Treasury bills.
by financialguy
Sat Oct 11, 2008 7:02 pm
Forum: Investing - Theory, News & General
Topic: Anybody unable to get credit?
Replies: 71
Views: 14361

I have no doubt that credit is still there for those with excellent credit history and businesses with abundant collateral. The credit I'm referring to is short operating funds in the form of credit lines and short term loans for grassroot companies. Operations like the trades, small roofing outfits, owner/operator truckers, landscaping lawn services, painting contractors, to even your corner deli or pizzaria. These micro businesses are a third of the jobs in America, ask these people who's collateral is brow sweat how easy it is to get operating capital. Not to beat a dead horse, but there are tons of these loans getting fully funded on prosper.com right now. For example, check this one out. It's the exact thing you're talking about: http...
by financialguy
Fri Oct 10, 2008 3:12 pm
Forum: Investing - Theory, News & General
Topic: Anybody unable to get credit?
Replies: 71
Views: 14361

paulob wrote:
financialguy wrote:A lot of loans are still getting funded at prosper.com

I'm looking at it with suspicion too.[/quote

I wouldn't think prosper.com to be illustrative of the credit market.
Maybe not, but those are some very questionable borrowers there, to be diplomatic. If those loans get lenders not only funding them but competing for them, is there really a problem with people getting credit? A lot of the loans are for businesses too.

So, with prosper.com plus all the credit card offers still going out, car loans and HELOCs as mentioned in this thread, maybe the media is exaggerating a bit? That's all I'm saying. :)
by financialguy
Fri Oct 10, 2008 2:46 pm
Forum: Investing - Theory, News & General
Topic: Anybody unable to get credit?
Replies: 71
Views: 14361

A lot of loans are still getting funded at prosper.com

I'm looking at it with suspicion too.
by financialguy
Fri Oct 10, 2008 8:38 am
Forum: Investing - Theory, News & General
Topic: Bogleheads, et al: Are you REALLY Staying the Course? (POLL)
Replies: 60
Views: 12726

Thanks for explaining. I misinterpreted text on a screen. No hard feelings. I apologize for my comment, which I deleted. That's a good point about the 5% to 32% chance of decline. I really like Larry Swedroe's maxim that one should not confuse the unlikely for the impossible. And who knows, the recent decline could end up being the bargain of a lifetime. :) I hope you realized that this was a parody on your nick... I certainly meant you no disrespect. I'm no genius (thats my point), I just do things mechanically, including rebalancing EM... I've followed this SOP for well over 25 years and I'm not about to change now... who cares about this years return... market timers I guess. BTW the EM portion of my AA is about 3%, so rebalancing EM to ...
by financialguy
Thu Oct 09, 2008 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: Open letter to Vanguard web developers
Replies: 31
Views: 7770

I agree 100%. They should have left their website the way it was a couple years ago. It's programmers gone wild over there.
by financialguy
Thu Oct 09, 2008 8:51 am
Forum: Personal Investments
Topic: Buying opportunity for VNQ???
Replies: 13
Views: 4164

There are excellent points of view in this thread. I own REITs because they have a low correlation with other asset classes and so help my portfolio overall.

Do keep in mind the caution Bill gave about risk. From my own point of view, the high dividend is sufficient compensation, it may not be for others. If there is a Great Depression 2.0, there will be so much empty office space and so forth that REITs will most likely get slaughtered.
by financialguy
Thu Oct 09, 2008 8:27 am
Forum: Personal Consumer Issues
Topic: My daughter got a nose pierce! I am not happy.
Replies: 142
Views: 45743

SkepticalGuy wrote:By the way, are you worried that she'll being home someone poorer than you or someone richer? Or someone different in another way? I'd love to know.
Maybe he's afraid the nose ring will attract this guy:

Image
by financialguy
Wed Oct 08, 2008 5:52 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads, et al: Are you REALLY Staying the Course? (POLL)
Replies: 60
Views: 12726

I'm (probably stupidly) buying more Emerging Markets today, so I voted "yes."
by financialguy
Wed Oct 08, 2008 5:47 pm
Forum: Investing - Theory, News & General
Topic: Pension as fixed income portion of AA
Replies: 14
Views: 3059

bookshot wrote:Makes more sense to simply subtract it from your estimated income needs before computing your target AA. Much simpler than doing mathematical gyrations.
I think this is a good option. Mathematically the results are the same either way, since the entire point of bonds is to receive the income they throw off.
by financialguy
Wed Oct 08, 2008 5:43 pm
Forum: Personal Consumer Issues
Topic: My daughter got a nose pierce! I am not happy.
Replies: 142
Views: 45743

I have to agree with SoonerSunDevil here. There are just too many classy women out there who do NOT have weird piercings and tattoos.

Of course, there's not much you can do about it, except pray she gets through her mid twenties without meeting some complete loser who makes her pregnant.
by financialguy
Wed Oct 08, 2008 11:51 am
Forum: Investing - Theory, News & General
Topic: Have you changed your life style?
Replies: 42
Views: 8649

gkaplan wrote:On a related note, I continually have turned down my local grocery store's request to use its store card because of privacy concerns. Are my concerns warranted? Do these store cards really save an appreciable amount of money?

Thanks.
When I get cards like that, I leave the phone number blank and use a UPS store mailbox for my address.

I have privacy concerns too, and find that having that private mailbox solves a great many issues.
by financialguy
Wed Oct 08, 2008 10:11 am
Forum: Investing - Theory, News & General
Topic: The definition of the words economic depression?
Replies: 15
Views: 3125

cloudeleven wrote:financialguy,

These definitions are pretty silly (see my reply above). Anyway, a recession is NOT necessarily 2 consecutive quarters of GDP decline according to the NBER. That's the popular media definition. Were you actually taught that?
Yeah, it was on the exam!

Yeah, they do seem a bit silly to me too.
by financialguy
Wed Oct 08, 2008 10:01 am
Forum: Investing - Theory, News & General
Topic: The definition of the words economic depression?
Replies: 15
Views: 3125

If I remember correctly from my study for the Series 6 exam, the definition of a depression is 6 consecutive quarters of negative growth. (A recession is 2 consecutive quarters.)
by financialguy
Wed Oct 08, 2008 9:48 am
Forum: Investing - Theory, News & General
Topic: Negative bubbles?
Replies: 4
Views: 1289

I wonder if there's a negative bubble now. The REIT ETF for example is yielding 6.60%. This is a great income payout.
by financialguy
Wed Oct 08, 2008 8:45 am
Forum: Personal Finance (Not Investing)
Topic: Self Employed - SEP & Roth?
Replies: 13
Views: 2977

chaser wrote:Your Roth IRA contributions are independent from your SEP-IRA contributions. They don't have a direct relationship.

Now that Vanguard is launching a Solo 401(K) (with Roth option I hear), you should look into doing that instead of a SEP-IRA. For self-employed with no employees, the Solo 401k is superior to the SEP in just about every way. And it is still treated independently from a Roth IRA so you can theoretically make Roth contributions to both your Roth IRA and Solo 401(K).
Wow, that's great that they're doing that now. I'll certainly be looking into that.
by financialguy
Wed Oct 08, 2008 8:10 am
Forum: Personal Finance (Not Investing)
Topic: Self Employed - SEP & Roth?
Replies: 13
Views: 2977

Yes, as Polaris said, you do the SEP-IRA contributions as employer contributions. So for example if your paycheck for the week is $1,000, you can then have your S corporation put $250 into your SEP.

The only thing I'd add to what Polaris said is that it's very easy to do this through Vanguard. There's really nothing to it at all. Easy to set up, and easy to add funds each week.

Also, the $250 in the example above is deductible as a business expense, which is very cool. The SEP is one of the only advantages the small businessman gets, so definitely use it!
by financialguy
Wed Oct 08, 2008 5:46 am
Forum: Investing - Theory, News & General
Topic: 456 just joined
Replies: 4
Views: 2009

This is surreal. Things just keep crashing...
by financialguy
Wed Oct 08, 2008 5:45 am
Forum: Investing - Theory, News & General
Topic: Have you changed your life style?
Replies: 42
Views: 8649

Re: Have you changed your life style?

Polaris wrote:
Teetlebaum wrote:I was just talking about coupons with a frugal friend this morning. Neither of us often uses coupons because they almost always only apply to expensive brands that we don't buy.
I hear this a lot, which is surprising because I have found the opposite to be true. I rarely buy off brand items since buying brand name items when they are on sale combined with coupons offers great savings. This week I bought a case of 8 ounce cans of Hunt's tomato sauce, which were free after sale and coupons. Last week I got 6 tubes of Skippy peanut butter for free under a similar scenario. Buying the store-brand equivalents would have cost $15-$20.
That's the sort of thing I've been doing too! It's really cool.
by financialguy
Wed Oct 08, 2008 5:42 am
Forum: Investing - Theory, News & General
Topic: Have you changed your life style?
Replies: 42
Views: 8649

Re: Have you changed your life style?

Teetlebaum wrote:I was just talking about coupons with a frugal friend this morning. Neither of us often uses coupons because they almost always only apply to expensive brands that we don't buy.
Usually generics are cheaper. But not always...

You see, the prices of the typical name brand thing will fluctuate. Every 2 or 3 months, it hits bottom. When you add in a coupon, the savings is even better.

The key is to buy a few months' worth of the item when it hits bottom, so that way you're set until the next time it goes on sale.
by financialguy
Tue Oct 07, 2008 11:48 am
Forum: Investing - Theory, News & General
Topic: Have all the shoes dropped?
Replies: 48
Views: 8926

daryll40 wrote:Remember, though that our DOW has done nothing (more or less) for 10 years. Japan had a HUGE run up BEFORE it started the huge decline.
I said I wouldn't reply to you anymore since you were mean to me, but...

I hope you're right! :lol:
by financialguy
Tue Oct 07, 2008 11:45 am
Forum: Investing - Theory, News & General
Topic: Have all the shoes dropped?
Replies: 48
Views: 8926

UNI4MER, I think you could be onto something. Historically pessimism has usually at its maximum just before the turnaround.

On the other hand, if the US follows the footsteps of Japan 1990-2002, we could be seeing Dow 3,000. That's another potential storm on the horizon I don't want to think about!
by financialguy
Tue Oct 07, 2008 11:40 am
Forum: Investing - Theory, News & General
Topic: So what are people buying today?
Replies: 41
Views: 8479

So question is... What is everyone doing today for your "for fun" trading portfolio?
Every penny I'm currently investing is going into Emerging Markets. I'm having fun with it!

That's because I'm either going to get rich when things turn around... or I'm completely insane.
by financialguy
Mon Oct 06, 2008 12:50 pm
Forum: Investing - Theory, News & General
Topic: Have you changed your life style?
Replies: 42
Views: 8649

Re: Have you changed your life style?

I've cut down big time. We used to go to restaurants 3-4 times a week, and now it's 1 time. I've also recently become obsessive about grocery coupons. (Did you know you can save literally thousands a year by doing that? It's pretty cool! For example, a couple days ago I got a half-gallon of organic milk for 9 cents, when it was on sale for $1.59, by using a $1.50 coupon.) Hi everyone, I know that as a family, we have cut back in many small and not so small ways on our daily spending. We are doing this becuaes I worry about our job security, not becuase of anything going on with our stocks. I find myself reluctant to make purchases that I would never have given any thought to a while ago. For example, I make sure to bring a water bottle with...
by financialguy
Sat Oct 04, 2008 4:09 pm
Forum: Personal Investments
Topic: PSA: Please put the fund name with the ticker symbol
Replies: 5
Views: 1395

I agree!
by financialguy
Sat Oct 04, 2008 8:37 am
Forum: Investing - Theory, News & General
Topic: S&P 500 Now Yielding 2.62% (Now Over 3%)
Replies: 14
Views: 3904

Up until the 1950s a dividend yield of 5% or more was considered necessary compensation for taking on the risk of holding equities. I wonder if this will happen again.
by financialguy
Fri Oct 03, 2008 8:26 am
Forum: Personal Finance (Not Investing)
Topic: Tried your hand at lending?
Replies: 12
Views: 3143

Re: Tried your hand at lending?

Has anyone tried out lending websites / communities like www.prosper.com or www.kiva.org? My wife and I were discussing the "prosper" concept last night. I, too, liken it to a junk bond, or a sub-prime loan. Say you "loan" a total of $10,000 to 100 folks in $100 chunks. Your anticipated yield is 9% after an anticipated default rate of 10%. What happens if the default rate soars to 50%? You'd have been better off in a FDIC-insured CD. I'll leave prosper.com to the gamblers. Bozo PS: If the folks at "prosper" wanted to get cute, they could start offering credit default swaps on monies loaned at their site. Wouldn't that be something??????? The main lesson I drew from my experience at Prosper is that the "pr...
by financialguy
Tue Sep 30, 2008 1:19 pm
Forum: Personal Investments
Topic: REIT equivalent?
Replies: 13
Views: 2598

deleted
by financialguy
Tue Sep 30, 2008 11:00 am
Forum: Personal Investments
Topic: REIT equivalent?
Replies: 13
Views: 2598

You might be able to invest in individual companies that invest in real estate but are not organized as REITs. For example, Starwood Hotels (ticker symbol HOT) is a hotel chain that gets most of its value from real estate but is not a REIT.

If you diversify into enough companies like that, then it may bring you pretty close to the return of the REIT index.
by financialguy
Mon Sep 29, 2008 3:04 pm
Forum: Investing - Theory, News & General
Topic: Are the current problems worse than 1973-74?
Replies: 54
Views: 11583

Just to clarify a bit of the history... 1974 was year 3 of the massive Watergate scandal. (Nixon resigned in August of that year.) Trust in government was at an all-time low.
by financialguy
Mon Sep 29, 2008 1:47 pm
Forum: Investing - Theory, News & General
Topic: Are the current problems worse than 1973-74?
Replies: 54
Views: 11583

If you look at newspaper stories from 1974, they were full of stories on how the bear market would be ending any day now. So one difference is there's a lot more pessimism today.

@nisiprius - It's interesting to look through newspapers from the Missile Crisis period in 1962. (I did that back in college -- it's on microfilm at the library and easy to do.) I was fascinated how papers would have stories on silly things like Boy Scouts fundraisers, and then the Missile Crisis stuff would be buried in small articles on page A12 or whatever. And yet, talk to anyone who lived through the period and they recall how they thought the world was literally about to end. So yeah, I'd say it was definitely underreported.