Search found 3178 matches

by Munir
Sat Oct 26, 2013 3:32 pm
Forum: Personal Investments
Topic: Short term bond versus total bond market
Replies: 17
Views: 3131

Re: Short term bond versus total bond market

The extra yield comes from lower credit in that fund. At times of financial stress, there is a flight to safety. For my purposes, would rather hold the highest quality bonds, treasuries and other highly rated bonds such as that in the short term bond etf. As mentioned before CDs and I bonds are too cumbersome and restrictive for me. Would rather take the risk on the stock side. Maybe going from intermed to short term duration bonds, can increase stock exposire to 75%. Cannot disagree with the first part of your assessment. Personally, I think the risk with the Short Term Investment Grade is mild to minimal, and any economic "catastrophe" is covered on a short-term basis with the cash holdings. I need income (late 70s retiree in d...
by Munir
Sat Oct 26, 2013 2:51 pm
Forum: Personal Investments
Topic: Short term bond versus total bond market
Replies: 17
Views: 3131

Re: Short term bond versus total bond market

am wrote:I like your approach but there is more credit risk. Look what happened in 08 compared Barclays/TBM.
If you are referring to the Short Term Investment Grade, the dip in 2008 was temporary with a nice recovery in 2009. US Treasuries did the opposite- they did not do well in 2009 but no one seems to hold that against them. In short, using 2008 as the only yardstick to measure risk, you may not be getting an accurate picture of risk on a longer term basis. Moreover, why does Vanguard give this fund its lowest risk rating?
PS: I also hold enough cash to cover my expenses for 2-3 years in Barclay's Savings at 0.9%.
by Munir
Sat Oct 26, 2013 1:45 pm
Forum: Personal Investments
Topic: Short term bond versus total bond market
Replies: 17
Views: 3131

Re: Short term bond versus total bond market

I have been using total bond market from Vanguard for years. The bond portion of my portfolio is to reduce risk to a level I am confortable with (30% bonds currently). This portion of my portfolio should have the lowest possible risk. So I started thinking, why am I using TBM instead of short term bond? Short term bond would reduce my risk even more. I am taking my risk on the equity side with Total market us and international funds. Why take any more risk on the bond side with intermed. when I can lower duration and keep credit quality constant? Return last 5 years has been something like 3% versus 5% for TBM, Agree with your proposal/question. I use Short Term Investment Grade (VFSUX). Duration 2.3 years, SEC yield 1.67%, ER 0.1%, and ra...
by Munir
Tue Oct 22, 2013 1:00 pm
Forum: Investing - Theory, News & General
Topic: Another Target Retirement Income vs Wellesley question.
Replies: 14
Views: 2300

Re: Another Target Retirement Income vs Wellesley question.

In case of a rise in interest rates, Wellesley has a duration of 6.2 while Target Retiremnt Income's duration is 4.5 (per M*). How these two funds will react to a rise in rates was not tested in 2008. It would be interesting to see how their performance compares in the period May-July of this year.

PS: Wellesley has 5% more equities which may partially explain a higher return but slightly more risk.
by Munir
Mon Oct 21, 2013 11:12 pm
Forum: Investing - Theory, News & General
Topic: "Take your RMD soon to avoid an IRS penalty."
Replies: 24
Views: 2918

Re: "Take your RMD soon to avoid an IRS penalty."

Dale_G wrote:In addition Munir, it doesn't matter whether you have other income or not as long as the amount of tax withheld from the RMD meets the IRS safe harbor rules.

I do not have tax withheld from SS or my tiny pension, or from taxable dividends for that matter. I take part of my RMD in January without withholding and then schedule the balance of my RMD for December 15th with enough withholding to pay the entire tax for the year.

It is certainly easier than filing those pesky quarterly estimates.

Dale
Dale,

Thanks for the clear and thorough response.

Munir
by Munir
Mon Oct 21, 2013 10:35 pm
Forum: Investing - Theory, News & General
Topic: "Take your RMD soon to avoid an IRS penalty."
Replies: 24
Views: 2918

Re: RMDs may eliminate Quarterly Withholding Statements.

Taylor Larimore wrote:Gordon:

Thank you for this important reminder for older retirees like myself.

One feature of RMDs (Required Minimum Distributions) is that Vanguard permits RMDs to have any portion earmarked for Federal Tax Withholding. This often means that Quarterly Estimated Income-Tax Returns can be eliminated. It worked for us (I checked the legality).

Best wishes.
Taylor
Taylor or anyone else,

If I choose to take out my whole RMD in December, can I have the total witholding for that amount witheld by Vanguard at that time? i.e. I do not need to pay any withholdings or estimated taxes during the year but only at the time the total RMD is distributed in December if I have no other sources of income other than the RMD?
by Munir
Sun Oct 20, 2013 10:20 am
Forum: Investing - Theory, News & General
Topic: Morningstar Ratings
Replies: 36
Views: 4813

Re: Morningstar Ratings

This very topic will be covered at our upcoming Bogleheads Conference and I think most Bogleheads will be blown away by what the results show. They'll be available after the Conference is over for those who aren't attending. Hi Mel, The suspense is killing me already! Can you give us a hint about the results? Who presented them? What did they show? :confused Thanks, --Pete Hi Pete: In his presentation, Gus Sauter had a slide that showed the performance vs their benchmark for three years following receiving their M* rating. The results were just the inverse of what many unsophisticated investors would expect. 1. The 5-star funds underperformed their benchmarks by (IIRC) about 4% per year. 2. The 4-star funds underperformed their benchmarks ...
by Munir
Sun Oct 20, 2013 10:00 am
Forum: Personal Finance (Not Investing)
Topic: Which Med school?
Replies: 162
Views: 27130

Re: Which Med school?

All the medical schools being mentioned probably offer a good basic medical education. The main difference is cost. I wonder if individual anecdotes about one school or another are of help at all.

Residency specialty programs is where the real training occurs and decisions about choosing one are more difficult. Large big-name hospitals may or may not be the best. High quality second-tier programs could offer more individual training and a resident gets to do more hands-on experience instead of just tagging along with the professor on rounds.
by Munir
Thu Oct 17, 2013 1:05 pm
Forum: Personal Investments
Topic: Bogle - Swap Treasuries for Corporates
Replies: 59
Views: 7746

Re: Bogle - Swap Treasuries for Corporates

CyberBob wrote:
Bogle - Swap Treasuries for Corporates
Also interesting is Bill Bernstein's comment that a high-grade corporate bond fund is not really in the riskless part of your portfolio; that's a risky part of the portfolio.

Bob
The Vanguard web site ranks both Short Term Investment Grade and Short Term Bond Index as 1 in their risk category - lowest risk on a scale of 5. The corresponding two intermediate funds and the Total Bond Market fund are ranked 2- slightly higher risk. None of these funds are ranked in the "risky" part of the protfolio.
by Munir
Thu Oct 17, 2013 12:41 pm
Forum: Personal Investments
Topic: Should we switch out of Total Bond.
Replies: 28
Views: 4119

Re: Should we switch out of Total Bond.

With the numbers dbr presented, I personally would shift to the short term bond fund. If you want to mix it up, transfer at least 50% of fixed income to the short term fund. Greater safety in case rates rise with minimal decrease in income.
by Munir
Wed Oct 16, 2013 10:55 am
Forum: Personal Investments
Topic: Bogle - Swap Treasuries for Corporates
Replies: 59
Views: 7746

Re: Bogle - Swap Treasuries for Corporates

I don't understand why someone would replace government bonds with corporate bonds? Why not just hold a higher allocation to stocks instead? Credit risk (the risk taken on by holding corporate bonds) has not been well-rewarded historically and has strong correlations with equity returns. Why not instead get the extra returns from holding more equities, since equity risk has been well-rewarded historically? Why should one restrict risk to equities only? Corporate bonds have a slightly higher risk (nothing compared to equities) but have provided greater returns than US govenment instruments (disagree with above post). If 2/3 or more of one's holdings are in fixed income, there is no incentive to invest them totally in the less-rewarding sect...
by Munir
Wed Oct 16, 2013 10:29 am
Forum: Personal Investments
Topic: Any Dangerous Boglehead Group-Think?
Replies: 73
Views: 6273

Re: Any Dangerous Boglehead Group-Think?

johnep wrote:Whenever someone poses a buy or sell situation within a segment of the market, someone quickly responds with: "That is already priced into the market" or "What do you know that the market does not know?".

We have seen our share of market bubbles in the past 10-15 years where the "smart money" was not too smart.
+1
by Munir
Tue Oct 15, 2013 7:58 pm
Forum: Personal Investments
Topic: Any Dangerous Boglehead Group-Think?
Replies: 73
Views: 6273

Re: Any Dangerous Boglehead Group-Think?

livesoft wrote:Faith in the 3-fund total market funds portfolio.

Faith that market timing does not work.

Faith that whole life insurance is generally bad.

Faith that Lump-sum investing is a whole lot better than dollar-cost averaging all the time.

Faith that one needs some TIPS to diversity their bond allocation.
Faith that the Total Bond Market Fund is the one and only way to invest in the bond market.

Faith that the only way to even slightly increase risk is thru the equity market.

Faith that past performance is totally worthless, and one should rely on ??? in making financial decisions.

Faith that the most effective way to discredit any idea one disagrees with is to call it "market timing".
by Munir
Sun Oct 13, 2013 9:36 am
Forum: Personal Investments
Topic: How Do Bogleheads Diversify Fixed Income?
Replies: 48
Views: 6849

Re: How Do Bogleheads Diversify Fixed Income?

burt wrote:I'm a couple years from retirement. 40/60 (stocks/bonds).
50% of fixed income is Vanguard Total Bond. 50% of fixed income is Vanguard TIPS.

I don't know......... "if you've won the game why keep playing ?"

burt
Can you please clarify how you "have won the game"?

BTW, 85% of your fixed income is in US government instruments. Is that what you desire?
by Munir
Sun Oct 13, 2013 9:23 am
Forum: Personal Finance (Not Investing)
Topic: Why are so many physicians unhappy with their careers?
Replies: 110
Views: 12649

Re: Why are so many physicians unhappy with their careers?

Physicians are taught early in their training that they are part of an elite corps. Most put up with painful, extended training to enter this elite group. Unemployment is essentially zero among physicians and they expect that from the beginning. They are trained to be "Captains of the Ship" and dislike insurance or governmental meddling in their medical decisions. They expect to be well paid from this endeavor and for their "lost years". They tend to be disappointed when this dedication is not rewarded. Is it entirely justified? .....no. Agree with above analysis. If one is in medicine merely to make money and be the "captain fo the ship", then disappointment down the line is frequent. You need to have the ded...
by Munir
Fri Oct 11, 2013 1:04 am
Forum: Personal Investments
Topic: How Do Bogleheads Diversify Fixed Income?
Replies: 48
Views: 6849

Re: How Do Bogleheads Diversify Fixed Income?

I wonder why some people cannot accept the fact that Jack Bogle has been critical of the Total Bond Market Fund in multiple interviews in the last year or two, and they keep quoting from his old books that touted that fund in the past.
by Munir
Wed Oct 09, 2013 5:53 pm
Forum: Personal Investments
Topic: How Do Bogleheads Diversify Fixed Income?
Replies: 48
Views: 6849

Re: How Do Bogleheads Diversify Fixed Income?

How do retired Bogleheads diversify within their fixed income in retirement ? I have noticed that some retired Bogleheads hold TIPS while others don't. Some prefer a Short-term Investment Grade Fund rather than a Total Bond Fund. Some prefer to substitute CD's for bonds. I was hoping some Bogleheads that are in the draw-down phase would be willing to share how they invest fixed-income and why they chose that strategy. 76 year old retiree in distribution phase with 67% of portfolio in fixed income. Of that 67%, about 49% is in Short Term Investment Grade (VFSUX) which is in my IRA, and 18% is in taxable cash in an online savings account (0.9%). The cash covers emergencies and sudden losses, while the VFSUX provides safety in its short durat...
by Munir
Wed Oct 09, 2013 10:33 am
Forum: Personal Investments
Topic: How Do Bogleheads Diversify Fixed Income?
Replies: 48
Views: 6849

Re: Total Bond Market Index Fund

Taylor Larimore wrote:
How Do Bogleheads Diversify Fixed Income?
Bustoff:

The easy way, and the only one Mr. Bogle recommends in his Little Book of Common Sense Investing, is to simply own Vanguard's Total Bond Market Index Fund which holds thousands of bonds of different types and maturities. Investors can add more bond classes if they feel the additional cost and complexity is worth it.

Best wishes.
Taylor
But Taylor, Mr. Bogle has repeatedly over the past year or so indicated his dissatisfaction with the Total Bond Market Fund and the index it follows because they are too heavy in US government instruments (70%). Are you suggesting that maybe the TBMF can be complemented with a corporate fund?
by Munir
Fri Oct 04, 2013 1:02 pm
Forum: Investing - Theory, News & General
Topic: [T. Rowe Price] TR Price X-Ray Tool
Replies: 17
Views: 2927

Re: [T. Rowe Price] TR Price X-Ray Tool

IT'S WORKING !!

I just tried it today and it's working perfectly as advertized. I was able to modify and update my pre-existing portfolio easily.
by Munir
Thu Oct 03, 2013 5:52 pm
Forum: Personal Investments
Topic: Bogle - Swap Treasuries for Corporates
Replies: 59
Views: 7746

Re: Bogle - Swap Treasuries for Corporates

The question, as always, is, if you think you can handle a little more risk, why choose to take it in bonds rather than just nudging up the stock allocation? For someone who is looking for income,I view Corporates as a way to get a bit more income than Treasuries, without the same amount of risk as stocks. True, Corporates frequently go down when stocks do, but not down as much. Even if we look at high- yield corporates, which I think get a bad rap, we see that the Vanguard High-Yield fund was (-21.3%) in 2008. But many forget that it was +39.1% in 2009 and +12.4% in 2010. Again, over time High Yield corporates have done slightly better than investment-grade corporates. There might be an alternative to conventional wisdom of taking all the...
by Munir
Thu Oct 03, 2013 1:18 pm
Forum: Personal Investments
Topic: Bogle - Swap Treasuries for Corporates
Replies: 59
Views: 7746

Re: Bogle - Swap Treasuries for Corporates

Jim180 wrote:If we look at 2008 it can look scary, but there are some that argue that what happened in 2008 was an anomaly that happens once in a generation, so therefore not likely to happen anytime soon. If someone would show a stock market chart from the Great Depression it would convince many to never invest in the stock market. We must look long term rather than focus on one year. Corporates do a little better over time than Treasuries. It all depends on how much volatility an investor can handle.
Agree. And if you combine results of 2008 and 2009, corporates come out ahead.
by Munir
Mon Sep 30, 2013 12:46 am
Forum: Investing - Theory, News & General
Topic: Morningstar Ratings
Replies: 36
Views: 4813

Re: Morningstar Ratings

One other thing. Given that neither star ratings nor growth charts predict future performance, nevertheless I think that a growth chart is approximately 120 times as valuable as a star rating. My experience in comparing funds with growth charts is that the results can differ significantly depending on the starting point of the graph. They are helpful if one knows ahead of time what specific period of time should be used and why the desicion is made to use that period. OK. Let me clarify what I meant by that. First of all, Morningstar's growth charts--some others, too, but I know Morningstars--unlikely the ones printed in fund literature, and unlike those on Vanguard's website--allow you to select any set of endpoint you choose back the fun...
by Munir
Sat Sep 28, 2013 9:19 pm
Forum: Investing - Theory, News & General
Topic: Morningstar Ratings
Replies: 36
Views: 4813

Re: Morningstar Ratings

nisiprius wrote:One other thing. Given that neither star ratings nor growth charts predict future performance, nevertheless I think that a growth chart is approximately 120 times as valuable as a star rating.
My experience in comparing funds with growth charts is that the results can differ significantly depending on the starting point of the graph. They are helpful if one knows ahead of time what specific period of time should be used and why the desicion is made to use that period.
by Munir
Sat Sep 28, 2013 3:26 pm
Forum: Personal Investments
Topic: Is Bond/Bond Fund investing just a bad idea all around now?
Replies: 40
Views: 5610

Re: Is Bond/Bond Fund investing just a bad idea all around n

livesoft wrote:Since September 5th, intermediate-term bond funds are UP a rip-roaring 2%!! And the GNMA bond fund is UP 3%!

Since bond funds are relatively conservative and staid, these moves are positively HUGE! Are we in a bond BUBBLE now?
Yes. Sell :happy .
by Munir
Tue Sep 24, 2013 2:29 pm
Forum: Investing - Theory, News & General
Topic: do active bond funds protect investors from bear markets?
Replies: 14
Views: 1736

Re: do active bond funds protect investors from bear markets

Appreciate the responses and dialogue. I'm sticking by the Short-Term Investment Grade at this time for a number of reasons I've listed in other posts and the facts on the ground are keeping me satisfied with my decision (I do consider the shifting from intermediate to short-term in my bond funds in late May a tactical asset reallocation and not market timing :happy ).
by Munir
Tue Sep 24, 2013 1:54 pm
Forum: Investing - Theory, News & General
Topic: do active bond funds protect investors from bear markets?
Replies: 14
Views: 1736

Re: do active bond funds protect investors from bear markets

ogd wrote:,

The long bonds are more vulnerable to a rate rise higher / faster than what's priced in the yield curve. If the rate increases match or lag that prediction, short-term bonds will underperform (in the "match" case, simply because they are priced to yield much less at the moment). So if you're inclined to shorten duration in response to the yield curve steepening, beware that you might be moving in the wrong direction and you need a significant surprise to profit from the move.
Then why has a short-term bond fund such ST Investment Grade (VFSUX) outperformed all other Vanguard short and intermediate bond funds in the last 4-5 months when even the fear of rising rates sent intermediate bond funds' NAV tumbling?
by Munir
Tue Sep 24, 2013 1:08 pm
Forum: Investing - Theory, News & General
Topic: do active bond funds protect investors from bear markets?
Replies: 14
Views: 1736

Re: do active bond funds protect investors from bear markets

http://www.cbsnews.com/8301-505123_162-57604152/active-bond-funds-wont-protect-you-in-bear-market/ another nail in the coffin Best wishes Larry In the article, Larry says: " Note that the current yield curve is steep -- longer-term rates are much higher than shorter-term rates. Assume the Fed does eventually tighten, but what happens is the yield curve doesn't move upward in a parallel fashion. Instead, it flattens out, with shorter-term rates rising and longer-term rates remaining the same, or rising by much smaller amounts. In that type of situation, shorter-term bonds could easily underperform longer-term bonds, as has often been the case (because the yield curve already anticipated that short-term rates would rise)." Is this ...
by Munir
Mon Sep 23, 2013 1:56 pm
Forum: Personal Investments
Topic: Guaranteed Retirement Income
Replies: 16
Views: 2429

Re: Guaranteed Retirement Income

and most SPIAs are not inflation indexed and can have high surrender fees when you need the money for the heart surgery you didn't plan on. As far as I know, SPIAs cannot be surrendered and have no surrender value. Medicare and any supplemental coverage you may have will pay for your heart surgery if needed. Regardless of whether a SPIA has a surrender capability provided by the issuer, It is a fixed income stream that has "some" surrender value. Where there is a need, the market will provide a solution. It may not be at an optimal price, but it will be a price that a willing buyer will pay. I am not saying that anyone should buy a SPIA with the idea that it can be converted back to cash easily or cheaply. However, it can and is ...
by Munir
Mon Sep 23, 2013 10:08 am
Forum: Personal Investments
Topic: Guaranteed Retirement Income
Replies: 16
Views: 2429

Re: Guaranteed Retirement Income

coachz wrote:and most SPIAs are not inflation indexed and can have high surrender fees when you need the money for the heart surgery you didn't plan on.
As far as I know, SPIAs cannot be surrendered and have no surrender value. Medicare and any supplemental coverage you may have will pay for your heart surgery if needed.
by Munir
Sun Sep 22, 2013 2:08 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing - What to do about fixed income?
Replies: 18
Views: 1851

Re: Rebalancing - What to do about fixed income?

I personally would lean toward SV. What rate is your SV fund paying? What is the ratio of your SV to your bond funds, and what is the average maturity or duration of your bond funds? Kevin - SV has returned 0.71% YTD through August 2013. - Currently SV makes up only 3% of my fixed income portfolio. If I were to rebalance into SV, then it would make up about 15% of my fixed income portfolio. - Average duration of my bond funds is currently at about 2.50-3.00 versus about 6.50-7.00 back in May. Question for you, DallasGuy: why are you rebalancing from Equities to fixed, rather than using new contributions to do so ?? Currently, my only contributions to retirement accounts are going into my 401k. When I rebalance, I tend to just modify existi...
by Munir
Thu Sep 19, 2013 2:16 pm
Forum: Investing - Theory, News & General
Topic: Bond Duration
Replies: 11
Views: 1260

Re: Bond Duration

Yesterday's Fed announcement does not mean "OK, all those people were wrong, my bonds are safe, and rates aren't going anywhere." Note that rates are back up today because of some positive economic news. The Fed cannot control the bond market. I agree with staying the course, but I would not use one day's event as a validation of my decision to do so. A year from now, we might be saying "I wish I had dumped all my bonds when the Fed made that no-taper announcement." Or we might not. We just don't know... The future is unknowable. Stick with the plan and avoid shortening duration under the expectation rates will rise. Who ends up with a higher return in x years is irrelevant. Its the lesson learned. I thought the reason ...
by Munir
Wed Sep 18, 2013 5:15 pm
Forum: Investing - Theory, News & General
Topic: Morningstar Analyst Advises Shortening Bond Fund Duration
Replies: 22
Views: 3738

Re: Morningstar Analyst Advises Shortening Bond Fund Duratio

WendyW wrote:
Munir wrote:M* analyst Kevin McDevitt recommends shortening the bond fund durations that investors hold.
Kevin McDevitt also recommended today that Anthony Weiner stop sexting before it gets him in trouble.
It's a crap shoot :happy .

If the Feds had voted differently today, McDevitt would have been proven as very "wise".
by Munir
Wed Sep 18, 2013 12:12 pm
Forum: Personal Investments
Topic: Short Term Bond Fund
Replies: 21
Views: 3390

Re: Short Term Bond Fund

Do not generalize or pass judgment about other Bogleheads without knowing their individual circumstances. A know-it-all attitude is not typical of Bogleheads either- is it? :happy I like the :) because it's the internet and no one should care what some folks write or say or post on the internet anyways. That is, who cares if anyone generalizes or passes judgment? I certainly don't. (But then again, I sold out of some interm-bond fund in April because I am happy to be called a market timer. Whoops?! Does that mean I care? :) ) I have been called thin-skinned by friends. I wish I was more like you- livesoft. As to market timing, I think it's in the eyes of the beholdeth. Some, if not many Bogleheads, make "tactical adjustments" or ...
by Munir
Wed Sep 18, 2013 11:40 am
Forum: Personal Investments
Topic: Short Term Bond Fund
Replies: 21
Views: 3390

Re: Short Term Bond Fund

Since when do Bogleheads focus on YTD performance numbers? Has everyone on this board turned into a short term trader? For accumulators of a young age, YTD is of little significance. For older retirees in a distribution phase with a short term time line, they are of significance. Is it better to bury one's head in the sand and ignore all facts and numbers available because they do not conform to a pre-formed philosophical point of view? Being aware of YTD numbers does not mean one is a short-term trader. YTD numbers give you an indication of where things are heading in the near-term but of course guarantee nothing. Do not generalize or pass judgment about other Bogleheads without knowing their individual circumstances. A know-it-all attitu...
by Munir
Tue Sep 17, 2013 8:54 pm
Forum: Personal Investments
Topic: Short Term Bond Fund
Replies: 21
Views: 3390

Re: Short Term Bond Fund

joe8d wrote:
Munir wrote:
Razorhog wrote:With the current market conditions, can anyone recommend a short term fixed income or bond fund?

Thanks for your time,

Joel
Vanguard Short Term Investemnt Grade (VFSUX). Short duration 2.4 years; SEC yield 1.71%; ER 0.1%; YTD performance -0.19%- best of Vangaurd bond funds. In my opinion, worries about risk are exaggerated (in the eyes of the beholder)- ranked at 1 (least risk) on a scale of 5 by Vanguard.
+1
Updated YTD for VFSUX is +.02%. Imagine- a bond fund with a positve YTD performance :happy .
by Munir
Tue Sep 17, 2013 8:49 pm
Forum: Personal Finance (Not Investing)
Topic: A quick warning about an annuity company [RiverSource]
Replies: 14
Views: 2048

Re: A quick warning about an annuity company [RiverSource]

livesoft wrote:I gave up long ago on human beings being perfect. I expect mistakes to be made all the time and continuously. Color me cynical, jaded, skeptical, or realistic. Take your pick.

It takes quite a lot to blow me up.
+1- agree.

Human error. As long as they rectify it within a reasonable period of time, give them some slack.
by Munir
Mon Sep 16, 2013 12:14 am
Forum: Personal Investments
Topic: Short Term Bond Fund
Replies: 21
Views: 3390

Re: Short Term Bond Fund

Razorhog wrote:With the current market conditions, can anyone recommend a short term fixed income or bond fund?

Thanks for your time,

Joel
Vanguard Short Term Investemnt Grade (VFSUX). Short duration 2.4 years; SEC yield 1.71%; ER 0.1%; YTD performance -0.19%- best of Vangaurd bond funds. In my opinion, worries about risk are exaggerated (in the eyes of the beholder)- ranked at 1 (least risk) on a scale of 5 by Vanguard.
by Munir
Fri Sep 13, 2013 5:46 pm
Forum: Personal Investments
Topic: Where would you put your fresh fixed income money right now?
Replies: 18
Views: 2144

Re: Where would you put your fresh fixed income money right

mrpotatoheadsays wrote:Vanguard Short-Term Investment-Grade Fund Admiral Shares (VFSUX)
+1.
by Munir
Fri Sep 06, 2013 1:37 pm
Forum: Personal Investments
Topic: 10 year Treasury Rate Hits 3%
Replies: 23
Views: 4504

Re: 10 year Treasury Rate Hits 3%

The ten year treasury interest rate closed at 3% today. This is double what it was about a year ago- a 100% rise. So it's not a question of if and when will the rate rise anymore. Is the second sentence your conclusion based on the data in the first sentence? I see no reason interest rates "have to rise" any more than they "had to rise" in 2010. The word "anymore" at the end of the second sentence of my post above may have been misleading. What I meant to say, and I stand by, is that rates have risen significantly over the past year. Some people are still questioning whether rates are rising or not. Of course, no one can predict where they will go from here, but can we all accept the fact that they HAVE risen ...
by Munir
Thu Sep 05, 2013 4:31 pm
Forum: Personal Investments
Topic: 10 year Treasury Rate Hits 3%
Replies: 23
Views: 4504

Re: 10 year Treasury Rate Hits 3%

Jim180 wrote:Jobs report tomorrow. Weak number=bond rally, strong number=bond sell off. I've held a combination of the Short-Term Investment Grade Fund and the Corporate High Yield Fund for the past year. I'm staying with that plan.
Personally, I'm sticking with short term invesment grade only at this time. My time horizon is 10-13 years. If and when rates rise enough to improve payouts from SPIAs, I will purchase some SPIAs, and might consider shifting some funds to the intermediate sector. Final allocation will be a mix of short and intermediate term bond funds in addition to SPIAs (I'm a retiree in the distribution phase with no pension and don't necessarily advocate such a plan for others with different life circumstances).
by Munir
Thu Sep 05, 2013 4:00 pm
Forum: Personal Investments
Topic: 10 year Treasury Rate Hits 3%
Replies: 23
Views: 4504

10 year Treasury Rate Hits 3%

The ten year treasury interest rate closed at 3% today. This is double what it was about a year ago- a 100% rise. So it's not a question of if and when will the rate rise anymore. How much further it will keep rising in the near future is anyone's guess. A "popular" view is that it will keep rising for now. Of course, for those who hold intermediate bond funds and are willing to sit tight for ten years or more, it may not matter. Others who may need to tap their principal sooner, or just don't sleep well seeing their assets dwindling in front of them, may wish they are in CDs or short-term bonds. Is it too late to make such a move now? Is this market timing? You bet it is! So?
by Munir
Tue Sep 03, 2013 11:12 pm
Forum: Investing - Theory, News & General
Topic: Short Terms vs Intermediate in Rising Rate Environment??
Replies: 59
Views: 7568

Re: Short Terms vs Intermediate in Rising Rate Environment??

If one doesn't want the hassles of owning direct CDs, especially in an IRA, check the short term investment grade fund (VFSUX) with an SEC yield of 1.6% , duration of 2.4 years and ER of 0.1%.
by Munir
Tue Sep 03, 2013 7:44 pm
Forum: Investing - Theory, News & General
Topic: Short Terms vs Intermediate in Rising Rate Environment??
Replies: 59
Views: 7568

Re: Short Terms vs Intermediate in Rising Rate Environment??

I don't understand that statements that say no one knows anything on how interest rates will trend in the near or distant future, and that everything is already priced in the current values since the market is wiser than all of us. Then what's the use of making any decisions about investments since it's all que sera sera? The facts are that some people will be making money and others losing it. How do we choose sides :happy ?
by Munir
Tue Sep 03, 2013 9:43 am
Forum: Investing - Theory, News & General
Topic: Short Terms vs Intermediate in Rising Rate Environment??
Replies: 59
Views: 7568

Re: Short Terms vs Intermediate in Rising Rate Environment??

Lots of folks agree with you. Many people went short-term starting already late last year. See, e.g., this poll from March: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=112412 Some prominent "stay-the-course" posters even noted they had exchanged all their intermediate-term TIPS fund shares into the newer short-term TIPS fund shares. Full disclosure: Based on the linked poll, I went to shorter duration back then as well as I noted in this post: http://www.bogleheads.org/forum/viewtopic.php?p=1638192#p1638192 In going short term, is the investment grade fund (VFSUX) preferred to the bond index fund (VBIRX) since it has a shorter duration and a higher yield? Moreover, treasuries are supposed to be more sensitive to risin...
by Munir
Mon Sep 02, 2013 10:19 am
Forum: Personal Investments
Topic: Wellesley vs. LifeStrategy Conservative Growth
Replies: 8
Views: 2455

Re: Wellesley vs. LifeStrategy Conservative Growth

Okay. I've made the chart: http://quote.morningstar.com/fund/chart.aspx?t=VWIAX&region=USA&culture=en-US&statePara=%7Bsecurities%3A%5B%7Bn%3A%22Vanguard%20Wellesley%20Income%20Adm%22%2Cids%3A%22FOUSA02T3B%7C0P00003348%7CCU%24%24%24%24%24USD%7C1%7C1%7CFO%7C2001-5-13%7C%7C%7Cfalse%7CUSA%7C19%22%7D%2C%7Bn%3A%22Vanguard%20LifeStrategy%20Cnsrv%20Gr%20Inv%22%2Cids%3A%22FOUSA00E6C%7C0P00002RDM%7CCU%24%24%24%24%24USD%7C1%7C1%7CFO%7C1994-9-30%7C%7C%7Cfalse%7CUSA%7C19%22%7D%5D%2CchartType%3A%22GrowthChart%22%2Crange%3A%222001-5-14%7C2013-9-1%22%2Cperiod%3A10%2Cregion%3A%22USA%22%2Ctc%3A%22USD%22%2CisD%3A%220%22%2CisR%3A%220%22%2CrM%3A3%2Cscale%3A%221%22%2CbMenu%3A%22%22%2Csma%3A%220%2C0%2C0%22%7D Now how do I import it visually? Unfortun...
by Munir
Wed Aug 28, 2013 7:37 pm
Forum: Personal Consumer Issues
Topic: How do you "rent" movies?
Replies: 87
Views: 10215

Re: How do you "rent" movies?

Netflix- both DVDs and streaming. Very much worth the few dollars they cost.
by Munir
Thu Aug 22, 2013 4:44 pm
Forum: Personal Investments
Topic: SPIA - what am I missing
Replies: 27
Views: 2853

Re: SPIA - what am I missing

[quote="Khanmots][/quote] I'm a long ways from needing to make this decision myself... but my personal belief is that you're trying to hedge outliving your money. And given how inflation and time work... inflation is not an independent risk here. I'd suggest that the decision on COLA or not should be based on how many years you're worried about the SPIA supporting in the worst reasonable case. i.e., if you're in your 60s and based on health and family history there's a reasonable probability that you could live 40 more years I'd think that COLA would be highly important. If you're 85 or 90 and are in failing health and have already lived longer than anyone in your families history, I'd suspect COLA isn't all that helpful. If you're in ...
by Munir
Thu Aug 22, 2013 12:43 am
Forum: Personal Investments
Topic: SPIA - what am I missing
Replies: 27
Views: 2853

Re: SPIA - what am I missing

I've been trying to talk my father-in-law (he's 81) to buy a SPIA... We keep telling him to spend some of his money for fun stuff, and he says "But what if I live to be 100?" So I'm trying to get him to throw his half his money into a couple of SPIAs. At his age, the payouts are very good (like $11,000 a year for $100,000 because they figure he's going to die in 5 years). That way, his basic needs are totally covered (x2!), and he can feel free to spend some money on fun stuff, because he's guaranteed that money coming in. But then he asks "But what if I die at 84?" And he can't stand the thought of giving away half his money Heh. I can't win for trying. (It's also good dementia protection - My FIL is still pretty sharp...
by Munir
Mon Aug 19, 2013 10:38 am
Forum: Personal Investments
Topic: Catching a falling knife in the bond market?
Replies: 15
Views: 2558

Re: Catching a falling knife in the bond market?

floydtime wrote:When do you need the money that you are placing into TBM?
Crucial question. If you need the money in the next 5-10 years, you should have a large portion of it in cash or a short term bond fund.
by Munir
Thu Aug 15, 2013 12:17 pm
Forum: Investing - Theory, News & General
Topic: Market Valuation and Asset Allocation Decisions
Replies: 9
Views: 1227

Re: Market Valuation and Asset Allocation Decisions

How is this different from market timing which is usually slammed on these boards?

If equity valuation is currently high and a "transfer" is contemplated out of equities, where would these funds be transferred to? Bonds?

Appreciate Rick's clear and forthright opinions.

PS: Is the equity market tanking today because of Rick's column? :happy