Search found 184 matches

by DetroitRed
Wed Aug 22, 2012 10:01 am
Forum: Investing - Theory, News & General
Topic: Jeremy Seigel right or wrong on stocks/Gross
Replies: 6
Views: 1307

Re: Jeremy Seigel right or wrong on stocks/Gross

I'm fond of Charlie Munger's opinion on the relevance of 19th century stock return data.

From an interview with Kiplinger's - http://mungerisms.blogspot.com/2009/09/ ... teven.html

Q: [Kiplinger's] Ibbotson finds 10% average returns back to 1926, and Jeremy Siegel has found roughly the same back to 1802.

A: [Munger] Jeremy Siegel's numbers are total balderdash. When you go back that long ago, you've got a different bunch of companies. You've got a bunch of railroads. It's a different world. I think it's like extrapolating human development by looking at the evolution of life from the worm on up. He's a nut case. There wasn't enough common stock investment for the ordinary person in 1880 to put in your eye.
by DetroitRed
Wed Aug 08, 2012 12:39 pm
Forum: Personal Consumer Issues
Topic: Getting pricing for medical procedures in advance
Replies: 66
Views: 7931

Re: Getting pricing for medical procedures in advance

It's impossible. Been trying to deal with this sporadically for years. One problem is that many medical procedures, even "routine exams," are decision trees. The doctor decides what to do next depending on what has gone before. The surgeon doesn't wake you up in the middle of the operation to say "path just looked at the frozen sections, and the lymph nodes should come out, too. That's $3,415. Price protection within 30 days if you see the identical procedure advertised for less. Will you authorize that?" To tell the truth, pricing medical costs in advance would be genuinely difficult even under the most perfect system you could imagine. It's difficult even when they are trying to help and don't give you a brushoff. I w...
by DetroitRed
Fri Aug 03, 2012 9:40 am
Forum: Personal Finance (Not Investing)
Topic: Bank Deposits--typical account balances for individuals?
Replies: 40
Views: 5158

Re: Bank Deposits--typical account balances for individuals?

The Survey of Consumer Finances (SCF) would have this data - http://www.federalreserve.gov/econresda ... f_2010.htm . They ask total value of checking accounts held by household (variable name: CHECKING) and total value of savings accounts held by household (variable name: SAVING).

Unfortunately, you'd need to use the raw survey data to derive the answers yourself. That's not something that's easy to do (the documentation is confusing, you'd need to have experience using statistical software and you'd need to make sure you made weighting adjustments because the SCF oversamples wealthy households).
by DetroitRed
Tue Jul 24, 2012 12:41 pm
Forum: Investing - Theory, News & General
Topic: Read John Norstads finance page
Replies: 11
Views: 2476

Re: Read John Norstads finance page

Interesting. Do you know if this will this save Excel spreadsheets that are part of a website? Thanks.
by DetroitRed
Tue Jul 24, 2012 12:37 pm
Forum: Personal Finance (Not Investing)
Topic: TIAA Direct Bank Limitations
Replies: 5
Views: 1056

Re: TIAA Direct Stops Accepting New Customers ‎

555 wrote:I was thinking about signing up but looks like I missed it. So that's one thing I can scratch from my "to do" list.
Didn't know they had a freeze on new accounts. Thanks for posting.
by DetroitRed
Wed Jul 11, 2012 8:51 am
Forum: Personal Finance (Not Investing)
Topic: Price of Plastic Going Up? Merchants May Get Surcharge Right
Replies: 42
Views: 5042

Re: Price of Plastic Going Up? Merchants May Get Surcharge R

stan1 wrote:Ugh, I just hope there isn't a return to writing checks. For the first time in years I got stuck in the grocery checkout line last weekend behind a lady who wrote a check, wanted cash back, showed her ID, then proceeded to enter the check in her register and calculate the balance. Took well over a minute away from my life that I'll never get back. :(
I hate carrying around a bunch of cash, so if paying in cash becomes appreciably cheaper than by card, I'll be writing a lot of checks again (and unfortunately for you, I'll probably always end up being in front of you in line :happy) .

I would always wrote out everything but the amount in advance, but it still takes much longer than swiping a card. . .
by DetroitRed
Sun Jun 17, 2012 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Ivy League Myths Uprooted
Replies: 288
Views: 27217

Re: Ivy League Myths Uprooted

getRichSlower wrote:
vesalius wrote:
Check Appendix Table 1 (school average SAT score) at the end of the paper to see that several, but not all, ivy league schools were included in the comparison. Both authors were from Princeton as well.
While some ivy league schools are in the data, I don't believe the study makes any ivy v non-ivy comparisons.
For a summary of the Dale and Krueger research see, http://www.usnews.com/education/blogs/t ... nings-myth

It's very difficult to get data for these kinds of questions because you need studies that follow people for many years. Those kinds of longitudinal studies are very expensive to conduct.
by DetroitRed
Tue May 01, 2012 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: "My Faith-Based Retirement" by Joe Nocera, NYT
Replies: 143
Views: 14492

Re: "My Faith-Based Retirement" by Joe Nocera, NYT

[quote="tfbHere's Vanguard's report on the 401k-type plans it manages: How America Saves 2011. It's a big sample.

[/quote]

Per page 38, the median account balance for workers 55-64 is about $61,000. So half of all participants in that age bracket have less than $61,000.

This amount doesn't include other retirement accounts, but only half of all employees have access to a workplace retirement plan - see http://money.usnews.com/money/blogs/pla ... ans-retire.

If you're a 64-year-old male, $61,000 would buy an immediate annuity of $332/month from Berkshire Hathaway. Yikes. That's a lousy retirement.
by DetroitRed
Tue Apr 17, 2012 10:12 am
Forum: Investing - Theory, News & General
Topic: Paper I bonds WILL be available via tax refund in 2012
Replies: 55
Views: 9722

Re: Paper I bonds WILL be available via tax refund in 2012

I also filed a paper return.

Didn't have any problems getting my $5k in paper I bonds.
by DetroitRed
Sun Apr 01, 2012 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: schedule K-1 for UGL-ProShares Ultra Gold (ETF)
Replies: 26
Views: 4552

Re: schedule K-1 for UGL-ProShares Ultra Gold (ETF)

SSSS wrote:
I've dealt with APMEX, Kitco, Bullion Direct, and Northwest Territorial Mint with no issues. I've heard good things about Tulving but it's only suitable for larger orders.
But weren't your transaction fees and storage costs much higher than owning a gold ETF?
by DetroitRed
Thu Mar 29, 2012 3:50 pm
Forum: Investing - Theory, News & General
Topic: What should I do when I win the $500M lottery?
Replies: 68
Views: 7020

Re: What should I do when I win the $500M lottery?

Numbers 1-25: Try to keep your name from being reported (which usually isn't possible).
by DetroitRed
Wed Mar 28, 2012 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Over $95 million in Roth IRA. Bodes ill for the little guy?
Replies: 20
Views: 4886

Over $95 million in Roth IRA. Bodes ill for the little guy?

Don't know if anyone else saw the recent Forbes article about Roth IRAs being used by billionaires like Peter Thiel (the article says that apparently he was able to put at least some of his Facebook stock inside his Roth IRA). They also mention Yelp founder, Max Levchin, who probably has over $95 million in a Roth. See - Why -- and how -- Congress Should Curb Roth IRAs http://www.forbes.com/sites/deborahljacobs/2012/03/26/why-and-how-congress-should-curb-roth-iras/ I'm not interested in hearing political opinions about this. But I have to say that I've always downplayed people like Rick Edelman who feel that Roth IRAs might be a suckers bet because Congress would renege on the promises of tax-free distributions. It seems much more likely th...
by DetroitRed
Tue Mar 20, 2012 10:10 am
Forum: Personal Consumer Issues
Topic: Can public storage be used as a private library?
Replies: 30
Views: 2887

Re: Can public storage be used as a private library?

My experience with storage units is that things get pretty dusty. It could be that there's no more dust than at my house and that it's just more noticeable in the storage unit, but when I've left things in the unit uncovered they're really dusty after 9 months or so.

Because reading means you'll be spending lots of time with the book close to your face, I'd be more inclined to keep the books in boxes, so they wouldn't get as dustry. If you made an inventory list of the boxes, you could easily retrieve them when needed.
by DetroitRed
Mon Mar 19, 2012 12:54 pm
Forum: Investing - Theory, News & General
Topic: Why is 1926 used for most historic risk/return charts?
Replies: 28
Views: 4308

Re: Why is 1926 used for most historic risk/return charts?

Goetzmann, Ibbotson and Peng put together a US stock return dataset that runs from 1815 to 1925. Their paper describing the dataset (and it's limitations) is here:

A New Historical Database For The NYSE 1815 To 1925: Performance And Predictability
http://papers.ssrn.com/sol3/papers.cfm? ... _id=236982

They've let scholars use the data for research but I'm not aware that it's available to the general public.
by DetroitRed
Thu Mar 15, 2012 3:42 pm
Forum: Investing - Theory, News & General
Topic: Now in Wiki: Extended Market Index Fund
Replies: 42
Views: 8864

Re: Now in Wiki: Extended Market Index Fund

Kevin M wrote:DetroitRed: Sure, you could do that, but you can do the same thing with many other combinations of Large-cap and Small-cap funds-- e.g., the Vanguard funds of those names--for purposes of TLH with Total Stock.

Kevin
If the goal is to replicate Total Stock Market, then S&P 500 + Extended Market is the cheapest & easiest way I know to do that. There are definitely lots of other easy ways to replicate TSM that aren't all that expensive though (iShares Russell 1000 + iShares Russell 2000 for example).
by DetroitRed
Thu Mar 15, 2012 3:05 pm
Forum: Investing - Theory, News & General
Topic: Now in Wiki: Extended Market Index Fund
Replies: 42
Views: 8864

Re: Now in Wiki: Extended Market Index Fund

Another possible reason to hold Extended Market -- you wish to have Total Stock market exposure in a taxable fund, but you already regularly contribution to a Total Stock Market fund in a non-taxable location (or vice versa). If you owned Total Stock Market (TSM) in both locations, you could trip the wash sale provisions because of Revenue Ruling 2008-5. Therefore, own the S&P 500 and Extended Market in one of the locations. Note on a month when you are selling TSM for a loss, it'd probably be wise to only purchase the S&P 500 fund and not Extended Market. In my mind that would cover you from any wash sale exposure. Example at http://www.investopedia.com/articles/retirement/09/ira-wash-sale-rule.asp#axzz1pDWzBSd6 I've been in this s...
by DetroitRed
Thu Mar 08, 2012 1:19 pm
Forum: Personal Consumer Issues
Topic: Experience with street address and PO Box?
Replies: 8
Views: 4524

Re: Experience with street address and PO Box?

In the past I've rented a mail box from a UPS Store. It had a street address and I never had any problems receiving deliveries there.
by DetroitRed
Tue Mar 06, 2012 1:04 pm
Forum: Investing - Theory, News & General
Topic: TIAA Real Estate -- Role in portfolio.
Replies: 52
Views: 3442

Re: TIAA Real Estate -- Role in portfolio.

Query for VanessaB.

Where do you come down regarding TIAA Traditional Annuity?

If you dislike TREA you must loath TIAA Traditional. It's at least 25x more opaque than TREA. It's probably 25x less liquid but it can still be gamed (just in different ways than TREA) - for example Traditional is presently stuck paying most folks 3% but the market rate is 1-1.75% (we know this b/c the version of Traditional that is allowed to pay below 3% is doing so).

Feel free to start another thread if you have things you'd like to weigh in on about this (otherwise this thread could get off topic real quick).
by DetroitRed
Mon Mar 05, 2012 2:04 pm
Forum: Investing - Theory, News & General
Topic: TIAA Real Estate -- Role in portfolio.
Replies: 52
Views: 3442

Re: TIAA Real Estate -- Role in portfolio.

Yeah, but have you considered that if management is allowing this to go on then what else might be going on that even you aren't aware of? You might be waiting for the big dip to transfer your losses to the ignorant, but the insiders might be transferring their losses to you on a daily basis. The insiders actually have to buy the fund if too much money leaves (called "liquidity units"), so if they inappropriately transferred losses, there'd be heavy outflows and the insiders would be forced to immediately purchase liquidity units to prevent the fund from having to sell real estate assets. That's what happened in late '08 and early '09. I see the stronger incentive being that the insiders want the outside money to increase so they...
by DetroitRed
Mon Mar 05, 2012 9:41 am
Forum: Investing - Theory, News & General
Topic: TIAA Real Estate -- Role in portfolio.
Replies: 52
Views: 3442

Re: TIAA Real Estate -- Role in portfolio.

One other advantage (to TIAA's detriment) of the Real Estate account is that it is possible to market time. During the financial crisis the Vanguard REIT dropped much faster and many people were able to get out of TIAA Real Estate before its price adjusted down.

Because of that TIAA CREF instituted market timing rules but I believe they only apply if you own more than 100k of TIAA Real Estate.
by DetroitRed
Sun Mar 04, 2012 12:34 pm
Forum: Investing - Theory, News & General
Topic: TM Balanced Gets No Respect
Replies: 7
Views: 1079

Re: TM Balanced Gets No Respect

I also think people forget about it because until last year it had an onerous redemption fee (shares had to be held for over 5 years). Now that that's gone, I believe a lot more people should use Vanguard Tax Managed Balanced.

For extremely diligent investors (like many of the folks on this board), you could do things better on your own, but for the other 90-95% of investors, I think it's an extremely useful option.
by DetroitRed
Tue Feb 28, 2012 3:54 pm
Forum: Personal Finance (Not Investing)
Topic: Amex savings down again
Replies: 28
Views: 4587

Re: Amex savings down again

As I said in the other thread regarding TIAA: I imagine that if they (TIAA-Direct) were really serious about paying more in interest than the competition for any length of time, their CD rates would be better, but, unfortunately, that isn't the case. (their CD rates are lower than the HY savings acct. and that's still true even if you go out 2 years) I think this is a good point. Remember that when TIAA-CREF released mutual funds that the general public could buy, in the late 90s, they later raised the expense ratios (by merging the funds) and the minimum investment amounts. I'm not saying that I think they're doing a bait-and-switch. I'm a generally a fan and feel like they're straight shooters. However, we do have evidence of them enteri...
by DetroitRed
Thu Feb 23, 2012 5:22 pm
Forum: Investing - Theory, News & General
Topic: Sean Hannity is not in the market
Replies: 50
Views: 5448

Re: Sean Hannity is not in the market

As I said, [Warren Buffett] gives a nod to index funds. You originally said, "It is true that he sometimes gives the nod to index funds." As I showed above, that's not true. He doesn't only sometimes give the nod to index funds. He has never, however, suggested that you should stay away from stocks. He repeatedly suggests that stocks are the place to be, particularly when the public is squeamish. He will never say anything other than that. . . There are numerous times in his career where Warren Buffett has not been a cheerleader for stocks. Can you name anyone else who was as prescient in both 1969 and 1999, see below? I bet you won't be able to. Ex. 1969 letter liquidating his investment partnership because the stock market did ...
by DetroitRed
Thu Feb 23, 2012 4:28 pm
Forum: Investing - Theory, News & General
Topic: Sean Hannity is not in the market
Replies: 50
Views: 5448

Re: Sean Hannity is not in the market

[Warren Buffett] is selling a product, largely based on stocks. He has a vested interest in telling you to buy them whether he needs them or not. It is true that he sometimes gives the nod to index funds, but is by no means impartial in the advice he gives. If he was impartial and honest, he would not only be hurting his business, he would be breaching his duties to his shareholders. Warren Buffett recommends that the vast majority of individual investors should invest in index funds as opposed to stock picking. He has said this numerous times over many, many years. Ex. 2004 Berkshire Annual Meeting [When asked whether one should buy Berkshire, invest in an index fund, or hire a broker, Buffett replied:] We never recommend buying or sellin...
by DetroitRed
Wed Feb 22, 2012 8:42 am
Forum: Investing - Theory, News & General
Topic: Confirming that EWX was a tax failure
Replies: 3
Views: 948

Re: Confirming that EWX was a tax failure

grabiner wrote:Now that I have my 1099, I can confirm just how bad the tax situation was for EWX. I happened to be able to get rid of it at a loss, but if the tax situation continues to be this bad, it's probably worth getting out of a taxable account even at a gain. (I'm still waiting to see whether EEMS is better; it didn't distribute a capital gain this year but is brand new.)
As mentioned by Lady Geek, placement of this asset class in a retirement account seems like the only way to go.

Any other advice/recommendations about what to do to gain exposure to emerging markets small cap? I'm in Vanguard Total Intl so I've got exposure there, but what if someone wants to overweight?
by DetroitRed
Wed Feb 22, 2012 8:35 am
Forum: US Chapters
Topic: JACK BOGLE'S MESSAGE TO BH: Two Birthdays!
Replies: 56
Views: 10022

Re: JACK BOGLE'S MESSAGE TO BH: Two Birthdays!

Mr. Bogle,

You're one of my heroes and it's an honor to wish you a happy heart birthday.
by DetroitRed
Sun Feb 12, 2012 4:55 pm
Forum: Investing - Theory, News & General
Topic: Treasury floating rate notes
Replies: 13
Views: 1519

Re: Treasury floating rate notes

Per the US Treasury quote - wrote: In conclusion, the presenting member noted that the examination of alternative forms and structures of debt issuance is consistent with Treasury’s mission of financing the government at the lowest cost over time.
Would have been an even better deal for the government if they had started issuing these circa 1981 and gotten the benefit of decades of falling interest rates. . .
by DetroitRed
Thu Feb 09, 2012 5:07 pm
Forum: Personal Finance (Not Investing)
Topic: Buffett Says Bonds Among Most Dangerous Assets on Inflation
Replies: 94
Views: 11793

Re: Buffett Says Bonds Among Most Dangerous Assets on Inflat

Ps: Take a look at the comments section of Buffett's article on Fortune.com

http://finance.fortune.cnn.com/2012/02/ ... er-letter/

The Gold Bugs are out in force.

As folks have pointed out, Buffett doesn't do a good job of talking about asset allocation in this excerpt, but once you read the comments, you see what he's up against. If you don't want to read the comments section, I'll save you the time by summarizing what 90% of the posters are saying: Gold is the best investment. Always. Forever. End of story.
by DetroitRed
Thu Feb 09, 2012 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Buffett Says Bonds Among Most Dangerous Assets on Inflation
Replies: 94
Views: 11793

Re: Buffett Says Bonds Among Most Dangerous Assets on Inflat

I'm shocked Buffett is saying to buy stocks and avoid bonds. :shock: I'm trying to remember when he last recommended buying bonds -- did he do that back in the early 80s when there were double-digit rates? I'm thinking NOT. Too bad. . . But he could be right about not recommending bonds now. Don't think he'll get the Genius Award for that one though. What about TIPS, though??? I believe Buffett actually has a pretty good record on this. In 1979, at the same time magazines like Business Week had front page articles like "The Death of Equities," on 8/13/79 he recommended buying stocks -- You Pay A Very High Price In The Stock Market For A Cheery Consensus 8/6/79 http://www.forbes.com/2008/11/08/buffett-forbes-article-markets-cx_pm-...
by DetroitRed
Wed Feb 08, 2012 8:33 am
Forum: Personal Investments
Topic: Why not just use VG Life Strategy Growth?
Replies: 15
Views: 2877

Re: Why not just use VG Life Strategy Growth?

I believe the best "two fund" portfolio available on the market (if you want an allocation 2/3 stocks and 1/3 fixed income) is:

- 5/6ths in LifeStrategy Growth
- 1/6th in TIPS

This gives you 2/3rds in stocks and 1/3 in bonds, with a bond allocation of 50% Total Bond and 50% TIPS.

Obviously you need to plan for other factors: taxable vs. nontaxable fund placement, rebalance between TIPS and LifeStrategy, whether you want LifeStrategy's allocation between intl and US stocks, etc.

But that's an incredibly diverse allocation with only two funds.
by DetroitRed
Mon Jan 30, 2012 3:30 pm
Forum: Investing - Theory, News & General
Topic: Will you be investing in the Facebook IPO?
Replies: 67
Views: 10121

Re: Will you be investing in the Facebook IPO?

TheEternalVortex wrote:
Yes, Google was indeed one of those rare IPOs that turned out to be a great buy. I'm still not quite sure how that happened.
Google used a non-standard IPO format which probably led to it being underpriced.

Google's market cap at IPO was under $25 billion. By the time it reached a $100 billion market cap, original IPO investors had more than quadrupled their money. If Facebook quadruples from it's projected $100 billion IPO market cap, then it'll be close to the largest market cap in the world.

Seems like a lot of Facebook's projected growth/value is already baked in the cake.
by DetroitRed
Thu Jan 26, 2012 1:17 pm
Forum: Personal Investments
Topic: TIAA Traditional - Safety?
Replies: 50
Views: 6696

Re: TIAA Traditional - Safety?

You have a lot of interest rate exposure if your account is an RA. You can only transfer 1/10th of the amount out every year.

If rates rise, you're very exposed. You'll be earning 3% for years while everyone else is enjoying higher payout rates from their fixed income investments.

To me that's a much bigger risk than whether TIAA-CREF will fail in that time period.
by DetroitRed
Tue Jan 17, 2012 12:18 pm
Forum: US Chapters
Topic: Jack Bogle Event on 1/31st, NYC
Replies: 13
Views: 2128

Re: Jack Bogle Event on 1/31st, NYC

Awesome lineup of speakers. If anyone gets wind that this event will be posted to the internet, please let us know.
by DetroitRed
Fri Jan 13, 2012 9:20 am
Forum: Investing - Theory, News & General
Topic: Why You Don't Need TIPS Now (Kiplinger's)
Replies: 17
Views: 3840

Re: Why You Don't Need TIPS Now (Kiplinger's)

ftobin wrote:Furthermore, if inflation, not real, rates go up, there will likely be increased demand for TIPS, lowering their real yield even further (and increasing the value of your already-held TIPS). I won't be surprised if the 30-year TIPS real yield goes negative within two years.
I believe this is what will happen when rates rise. There is only a fairly limited pool of TIPS and there will a big uptick in demand.

There's no way to test this hypothesis because TIPS have not been around yet in a rising-rate environment, but I feel quite confident in this assessment.

Of course, I have no idea when rates will rise.
by DetroitRed
Tue Jan 10, 2012 8:09 am
Forum: Investing - Theory, News & General
Topic: Hedge Fund Reporting Biases and Commercial Databases
Replies: 1
Views: 250

Re: Hedge Fund Reporting Biases and Commercial Databases

Thanks for posting. I'm most impressed with how they were able to build their dataset. They were able to use overlooked fund-of-fund regulatory filings.
by DetroitRed
Sat Jan 07, 2012 2:49 pm
Forum: Personal Finance (Not Investing)
Topic: Accident with rental car
Replies: 18
Views: 4638

Re: Accident with rental car

tibbitts wrote:Does anyone know of a credit card available now that has primary coverage for rental cars for business or personal use, AND covers loss-of-use, AND covers basically any loss to the car (or parts thereof)? If so, what fees apply?

Paul
AMEX has something called Premium Car Rental Insurance which requires paying an extra fee. There's no mention of loss of use coverage (which I would assume means it's not covered). Still, for a long rental, it seems like it might worth it (they say they pay for the accident directly and don't contact your insurance company). https://www295.americanexpress.com/prem ... vt/home.do
by DetroitRed
Fri Jan 06, 2012 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: Accident with rental car
Replies: 18
Views: 4638

Re: Accident with rental car

Anyone have any words of wisdom on easy (i.e. I don't want to make 12 phone calls every time I rent a car) actions to take to cover myself from being dinged for "loss of use" charges?

Or does anyone have experience with a rental car accident where the rental car company did not try to ding you for unreasonable loss of use charges (that they also refused to document)? If I knew of a car rental place that was fair about that, I'd probably start giving them by business.
by DetroitRed
Fri Jan 06, 2012 12:50 pm
Forum: Personal Investments
Topic: Best way to move stocks/options from IRA to non-IRA account?
Replies: 6
Views: 662

Re: Best way to move stocks/options from IRA to non-IRA acco

I am not expecting capital losses from the same year, but it seems to me capital losses from previous years (which are substantial) could be used to offset these IRA capital gains. Could they not? A distribution from an IRA is treated as regular income. It makes no difference whether the dollars for the distribution are from capital gains, interest or from your original contribution. All the dollars in the IRA are the same. This means that you cannot use capital losses from your taxable investments to offset capital gains inside the IRA. The only thing you can do is use your capital losses to offset $3000 of the distribution. EO And unless you fulfill one of the early-withdrawal exceptions (such as being over age 59 1/2), the IRA distribut...
by DetroitRed
Wed Jan 04, 2012 9:39 am
Forum: Investing - Theory, News & General
Topic: VBS lowers commissions: free trades on Treasuries
Replies: 29
Views: 2769

Re: VBS lowers commissions: free trades on Treasuries

nisiprius wrote:By the way, dare I ask: how does Vanguard (and how does Fidelity) make any money off of free trades? Is it just now a "customary service" that everyone has to provide because everyone else is doing it?
Perhaps they lose money on every trade, but make it up on volume? :)
by DetroitRed
Wed Dec 28, 2011 1:16 pm
Forum: Personal Investments
Topic: tax loss harvest Help! Total Intnl ???
Replies: 19
Views: 1528

Re: tax loss harvest Help! Total Intnl ???

Also, be very careful if any of the funds you are selling are regularly purchased by you in your 401k or IRA. I purchase Total Intl monthly in my 401k and it causes all sorts of hoops when I need to plan for TLH.
If you hold the same fund in your IRA or 401(k) as in your taxable account, make sure that there are no recent contributions to that fund if you might want to sell your taxable fund at a loss. http://www.bogleheads.org/wiki/Wash_sale
by DetroitRed
Tue Dec 27, 2011 11:53 am
Forum: Investing - Theory, News & General
Topic: [Lack of] Auto-rebalancing tool at Vanguard
Replies: 70
Views: 20822

Re: Auto-rebalancing tool at Vanguard

KyleAAA wrote:
555 wrote:How is Vanguard supposed to know what all your holdings elsewhere are. If you can't rebalance accross all accounts, then this would be a pretty useless, if not detrimental, tool.
Just because it's not useful for ALL users doesn't mean it wouldn't be extremely useful for SOME users. Some users prefer not to use the website at all and do everything by mail. Does that mean Vanguard should take it down?
Also, as numerous people have pointed out, Vanguard 401k plans already have an auto-rebalancing tool. So all Vanguard needs to do is flip a switch to turn on the feature.
by DetroitRed
Fri Dec 23, 2011 4:28 pm
Forum: Investing - Theory, News & General
Topic: Expected returns to Stocks
Replies: 99
Views: 8370

Re: Expected returns to Stocks

BCP wrote:What's the rationale for excluding financials and utilities from the dataset?
This is the common practice in academic finance papers. The idea being that these areas are heavily regulated and so don't act the same as other industries. I've never seen a finance scholar "revisit" this practice to see if it's still the best way to do analysis.
by DetroitRed
Wed Dec 21, 2011 12:53 pm
Forum: Investing - Theory, News & General
Topic: Goldman Sachs wins my Dubious Distinction Award
Replies: 150
Views: 10634

Re: Goldman Sachs wins my Dubious Distinction Award

Thanks for posting this. I did take the time read this. This appears to be a completely dreadful product compared to other CDs. In fact, it appears to be so bad that I'm surprised the GS would try to sell it. It's a competitive world out there. It seems to me that by trying to sell a product this bad, GS will have too few sales to make this worthwhile and those people who do buy it won't ever want to do business with them again. Maybe I'm missing something, but this appears to be one of the worst CDs that I have ever seen. I've seen versions of the Goldman CD disclosure that are over 60 pages long. The CD disclosure from my local credit union is less than a page and written in plain English. Brody -- you have a much better legal brain than...
by DetroitRed
Wed Dec 21, 2011 12:34 pm
Forum: Personal Investments
Topic: Low Interest Rate Environment - Closed End Funds
Replies: 12
Views: 1310

Re: Low Interest Rate Environment - Closed End Funds

Rick Ferri wrote:When interest rates rise, leveraged closed-end bond funds are decimated. Don't be a yield pig.

Rick Ferri
As Rick says, when rates rise there will be a stampede out the door and these funds should trade at huge discounts to NAV. If you can't correctly predict when rates will rise (which unfortunately, you can't), then these are a ticking time bomb.

That said, when rates rise these should be a screaming deal for a while. Similar to the "deal" in TIPS in late 2008 (when there was a large discrepancy between the market price and the value of the underlying assets).
by DetroitRed
Mon Dec 12, 2011 9:19 am
Forum: Investing - Theory, News & General
Topic: Structured CD's From Goldman Sacks
Replies: 7
Views: 1350

Re: Structured CD's From Goldman Sacks

Here are my back-of-the-envelope calcs for what you'd have made in the Goldman Sachs product during one of the best stock four-year periods in modern history - 1/1/96 to 1/1/2000.

Dow Jones went from 5117 to 11497 ( see http://www.1stock1.com/1stock1_139.htm ).

I used this for monthly return data - http://www.econstats.com/eqty/eqem_mi_3.htm .

My calcs are that during that time period the Dow went up around 125% but the Goldman formula (assuming 2% max monthly gain and unlimited monthly losses) gave you a return of about 11% (so you would only capture about 9% of the stock market's return using this product).

Run, run away.
by DetroitRed
Sun Dec 11, 2011 5:26 pm
Forum: Investing - Theory, News & General
Topic: Structured CD's From Goldman Sacks
Replies: 7
Views: 1350

Re: Structured CD's From Goldman Sacks

Did anyone else notice the "fine print."
The four-year CD tracks the monthly percentage change in the Dow, with gains capped at 1.5 percent to 2 percent and no floor on the declines. That means if the Dow advanced 5 percent, the monthly return would be recorded as no more than 2 percent, while a drop of the same amount would be taken in full.
That means if there are dramatic drops in the market (like at the end of 2008), you have zero chance of making that up because your gains are capped at 2% a month. The stock market is too volatile for that to be a consistently good proposition.

Especially the current market!
by DetroitRed
Wed Nov 23, 2011 3:41 pm
Forum: Investing - Theory, News & General
Topic: Vang. Emerge Markets Bond Fund excludes many good countries
Replies: 7
Views: 1165

Re: Vang. Emerge Markets Bond Fund excludes many good countr

dyangu wrote:I wonder why they don't currency hedge China, India and other countries that don't have USD denominated bonds. Interestingly, the Total International fund does include these countries.
I was wondering the same thing.

My guess is that countries like China and India will be a very small portion of Vanguard Total International Bond so the hedging costs are quite small. While hedging China, India, Taiwan, South Korea, Hong Kong etc in Vanguard Emerging Markets Government Bond would be more expensive because they'd be a large percentage of the holdings.

Could there be other reasons?
by DetroitRed
Tue Nov 22, 2011 10:29 am
Forum: Investing - Theory, News & General
Topic: Vang. Emerge Markets Bond Fund excludes many good countries
Replies: 7
Views: 1165

Re: Vang. Emerge Markets Bond Fund excludes many good countr

nisiprius wrote:Do those countries issue any dollar-denominated debt?
Right, I believe the countries I mentioned are excluded because they are able to issue debt in their local currency and therefore don't have to expose themselves to the currency risk of issuing dollar-denominated bonds.

Therefore, I think it's important to realize that the Vanguard Emerging Markets Govt Bond Fund isn't allowed to invest in the debt of many of the stronger emerging countries.
by DetroitRed
Tue Nov 22, 2011 8:37 am
Forum: Investing - Theory, News & General
Topic: Vang. Emerge Markets Bond Fund excludes many good countries
Replies: 7
Views: 1165

Vang. Emerge Markets Bond Fund excludes many good countries

I wanted to point out that the new Vanguard Emerging Markets Government Bond Index Fund will exclude the debt of many emerging market countries with high credit ratings.

Barry Barnitz posted the list of countries here - http://www.bogleheads.org/forum/viewtop ... 1#p1232128

Here are examples of some (very good) emerging market credits that are excluded from the new fund:

Chile
Hong Kong
India
Poland
Saudi Arabia
Singapore
Slovakia
South Korea
Taiwan
Thailand
United Arab Emirates
by DetroitRed
Sat Nov 19, 2011 5:35 pm
Forum: Personal Investments
Topic: correcting AA to account for tax status of investment
Replies: 24
Views: 1265

Re: correcting AA to account for tax status of investment

Bob's not my name wrote:
DetroitRed wrote:5% state tax rate when I retire
A lot of states exempt all or some retirement plan withdrawals, especially by retirees.
Very true, but some states, California comes to mind, tax pretty much your entire IRA/401k distribution amounts. In my case, barring ill health, I'll almost certainly work part time, but most Bogleheads probably won't so should take that into consideration. Kiplinger has some decent, basic state tax overviews for retirees --

http://www.kiplinger.com/tools/retiree_map