Search found 1773 matches

by hollowcave2
Thu Apr 21, 2016 7:01 pm
Forum: Personal Investments
Topic: Entering the market: lump sum vs DCA vs tactical asset allocation
Replies: 19
Views: 2052

Re: Entering the market: lump sum vs DCA vs tactical asset allocation

Excellent original post by noa! Great summary about lump sum and DCA! You are very accurate in your analysis! You have done your homework! So, after such an excellent OP and a good understanding of yourself and the strategies, you can make an informed decision for yourself. There is a very heavy bias against DCA on this board, but I think both lump sum and DCA have their place in investing. BTW, the time horizon for DCA is best between 6 and 18 months, IMHO. DCA is a way to get into the markets without being paralyzed with regret and worry. The people who favor LS always seem to discount emotion in their analysis, but emotions drive the markets many times. People who placed a LS into the market in August of 2008 got such a bitter taste of i...
by hollowcave2
Thu Apr 21, 2016 6:50 pm
Forum: Personal Investments
Topic: Should I bother with Options Trading?
Replies: 36
Views: 9168

Re: Should I bother with Options Trading?

I have some experience with options, and here's what I found: I basically didn't make any money trying to trade short term options. When I won on one, I lost on another. Short term trading is the highest risk game with the lowest chance of success. I have had some moderate success with covered calls, but there's still a risk of losing money if the stock price goes down. The most success I've had have been with LEAPS, but holding them long term and not trading them. LEAPS are basically long term options and IMHO they have the best chance of success if chosen well. LEAPS cost more but have a better chance of success. And there's a lot more time to determine if you want to stay in the position or not. For example, materials and mining stocks m...
by hollowcave2
Tue Apr 19, 2016 9:13 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Publishes Duration and Holdings Of Core Bond Fund
Replies: 14
Views: 2534

Re: Vanguard Publishes Duration and Holdings Of Core Bond Fund

Looks like they are updating the holdings yet. It doesn't make sense to list 31% Treasury/Agency bonds and then list them as 23% in the Government Bonds column.
by hollowcave2
Mon Apr 18, 2016 5:33 pm
Forum: Investing - Theory, News & General
Topic: Series EE bonds as holder for emergency funds
Replies: 9
Views: 2176

Re: Series EE bonds as holder for emergency funds

If you are using savings bonds as an emergency fund vehicle, I think that I bonds would be a much better choice than EE bonds. The benefit of EE bonds is the doubling value at 20 years, which yields about 3.5% annualized over that time. If you redeem EE's before 20 years, you are essentially getting the current rate of around 0.10%, which is essentially a savings account at a bank. A savings account at a bank is better than current EE's because the bank account is more liquid.

So series I is much better. You get the variable rate which is most of the time substantially higher than EE's and you don't need to wait 20 years.
by hollowcave2
Sun Apr 17, 2016 10:27 pm
Forum: Investing - Theory, News & General
Topic: Why not buy a DIVIDEND stock?
Replies: 36
Views: 9583

Re: Why not buy a DIVIDEND stock?

Many financial stocks, like Bear Sterns and Lehman Brothers, paid dividends. What could go wrong?

Stocks are stocks.

BTW, the above companies don't exist today.
by hollowcave2
Sat Apr 16, 2016 8:12 pm
Forum: Personal Investments
Topic: I Bonds before end of the month?
Replies: 20
Views: 6564

Re: I Bonds before end of the month?

You got to be real patient with EE bonds. EE's right now might as well be zero coupon bonds. But at 20 years, you do get around 3.5% annualized total return.
by hollowcave2
Sat Apr 16, 2016 6:29 pm
Forum: Personal Consumer Issues
Topic: Coin Collecting (will coins increase or decrease in value?)
Replies: 36
Views: 6342

Re: Coin Collecting (will coins increase or decrease in value?)

One reason to dispose of these sooner than later is that even long term capital gains on collectibles are taxed at your marginal tax rate with a maximum of 28%
Yes, this is true. But I don't think the dealer needs to report the transaction to the IRS unless the transaction (or several "related" transactions) equals or exceeds $10,000. This is mainly intended to catch expensive rare coins or substantial bullion sales. I think that even if you went to several dealers, you don't need to report anything until you total $10,000 in a year anyway.

I doubt foreign coins in bulk will come close to that. Perhaps a collection of scarce coins carefully assembled over the years would qualify.
by hollowcave2
Sat Apr 16, 2016 6:23 pm
Forum: Personal Investments
Topic: I Bonds before end of the month?
Replies: 20
Views: 6564

Re: I Bonds before end of the month?

I am betting on the best buy for I-bonds right now is before May 1.

The wild card is the fixed rate. It depends on whether it is raised significantly or not. I'm predicting a fixed rate at either 0.1 or 0.2% Recently, the savings bonds gods have been pretty stingy with that rate.

The main advantage of buying before May 1 is that you can take advantage of a relatively high variable rate for 6 months. It's unknown where rates are going to be later, so buying before May gives you a way to predict your total rate over the next year while locking in a high rate for the first 6 months.

Steve
by hollowcave2
Sat Apr 16, 2016 12:47 pm
Forum: Personal Consumer Issues
Topic: Coin Collecting (will coins increase or decrease in value?)
Replies: 36
Views: 6342

Re: Coin Collecting (will coins increase or decrease in value?)

IF they are all foreign coins in bulk, then there's probably not much numismatic value. You would need to check the melt value of the silver, however. You could take the lot to a local coin shop and see what they say. If you have the time, you can check the coins yourself. I would search for all of the coins before 1920, for example. See what numismatic value they have in addition to melt value. This could take some time, but that's why it's a hobby. Also check condition. Uncirculated coins are worth more. Coin shops sell foreign coins in bulk by the pound, so that gives you an idea of their worth. Again, check with a local coin shop. Get a few estimates if you can. Don't sell to the first guy you talk with. Also, see if there are any coin ...
by hollowcave2
Wed Apr 13, 2016 11:01 pm
Forum: Personal Investments
Topic: Bought the wrong fund, what to do.
Replies: 12
Views: 1934

Re: Bought the wrong fund, what to do.

Well, I would be inclined to leave it alone. The yields are not greatly different and you do get growth potential. I think the blend is better. I like the exposure to growth and value together.

Just my 2 cents
by hollowcave2
Wed Apr 13, 2016 5:27 pm
Forum: Personal Investments
Topic: Need advice on bond fund
Replies: 10
Views: 1645

Re: Need advice on bond fund

I also agree that you should not overweight the portfolio towards short term bonds because of fear of rising interest rates. Remember, for a long term investor, a rise in bond rates would benefit you over the long run. Higher rates would lead to higher total returns after a few years. Don't forget the income provided by bonds and this would increase with rising rates. The drop in NAV would be temporary and short term, depending on the duration of the fund.

You already have the total bond market fund. Just stick with that.

My 2 cents.

Steve
by hollowcave2
Wed Apr 13, 2016 9:15 am
Forum: Investing - Theory, News & General
Topic: DCA considerations
Replies: 56
Views: 6194

Re: DCA considerations

The above post by dbr is excellent ! Very good analysis. DCA is actually designed as a short term strategy, generally 6 to 18 months, for a large sum of money available all at once. The purpose of DCA is to start investing today, without worrying if it is the "right time." If you are comfortable with a lump sum into a proper asset allocation for yourself, then just do it. However, if you find yourself delaying that lump sum purchase due to fear of a market downturn, then DCA is the way to go because you can overcome "investment paralysis" and get started today. Emotion drives the markets most of the time, IMHO. Fear and greed are not to be ignored or dismissed. These emotions are important factors in market movements. It...
by hollowcave2
Tue Apr 12, 2016 8:15 pm
Forum: Personal Investments
Topic: Switching from dividend growth investing to indexing?
Replies: 18
Views: 2699

Re: Switching from dividend growth investing to indexing?

You don't need to give up dividend investing to transition to index funds. As mentioned above, Vanguard has some very good index funds that focus on dividends.

If you like ETF's there's

VYM is an index fund focusing on high yielding dividend stocks.
VIG is an index fund emphasizing stocks with proven dividend growth.

You can own both of these, depending on how much income vs. growth you need.

These ETF's are also available as mutual funds. Just check the Vanguard site.

Good luck
by hollowcave2
Wed Apr 06, 2016 11:54 am
Forum: Investing - Theory, News & General
Topic: Vanguard's global head of fixed income discusses bonds, rising rates, and liquidity.
Replies: 4
Views: 893

Re: Vanguard's global head of fixed income discusses bonds, rising rates, and liquidity.

Great article that is well worth the read, especially:
Keep in mind that rising rates are not a bad thing for long-term investors. Coupons and maturities get reinvested at higher yields, resulting in higher long-term returns.
This point tends to be missed by investors looking at short term price movements in bond funds.
by hollowcave2
Tue Apr 05, 2016 8:09 pm
Forum: Personal Investments
Topic: Options (Holding Period) and 1099-DIV (Non-Dividend distributions)
Replies: 1
Views: 387

Re: Options (Holding Period) and 1099-DIV (Non-Dividend distributions)

You do need to report the covered call transactions. You will have a gain or loss on those. For the options that expire or bought back, the holding period determines whether it's short term (1 yr or less) or long term (more than 1 yr). Most covered calls are short term.

If a call is exercised, you can report the premium received with zero cost. The assigned stock will be sold at the sale price (strike price).
It sounds like the non-dividend distributions could be the premiums received from the calls. You'll need to check with your broker.

Any distribution potentially affects your taxes, assuming these are in a non-retirement account. If this is in the 401K, then you don't need to worry about the taxes.
by hollowcave2
Mon Apr 04, 2016 11:48 pm
Forum: Investing - Theory, News & General
Topic: Will I suffer major NAV loss when long term bonds mature?
Replies: 19
Views: 1724

Re: Will I suffer major NAV loss when long term bonds mature?

Hmmmm, Remember that the total return is capital gains PLUS income. If bonds were bought at a premium to par, then they should be getting higher than the current market coupon rates. These higher coupons produce income that add to the fund's assets. If the bonds were purchased near par and the market rates increased while the bonds are being held, then the principle value of the bond would be lower than par, not above. If held to maturity, the price would rise back to par. I think people focus only on capital appreciation/depreciation in the bond funds and forgetting the very important cash flow that is adding to the total return constantly. This cash flow cannot be ignored. When a manager purchases any bond for the fund, either at issue or...
by hollowcave2
Mon Apr 04, 2016 9:37 pm
Forum: Investing - Theory, News & General
Topic: DCA considerations
Replies: 56
Views: 6194

Re: DCA considerations

DCA is just proof that what most typically do (invest regularly with the only "timing" of the market being buying whenever the paycheck comes/there's money free) works. But it's not used for and should not be used for people making decisions on how to invest large windfalls , except to the extent that one should always invest what they can as soon as they can, whether it be a portion of a weekly paycheck or a huge inheritance. (italics mine) I respect your opinion Chad, but I don't understand this reasoning. DCA is a technique designed precisely for a situation where a person comes into a windfall of money. It is natural for an investor to be hesitant to commit a large sum of new money, readily available, into the market all at o...
by hollowcave2
Mon Apr 04, 2016 1:17 pm
Forum: Investing - Theory, News & General
Topic: DCA considerations
Replies: 56
Views: 6194

Re: DCA considerations

Dollar Cost Averaging is a great way to buy low and sell high without trying to time the market. I am a big fan of DCA, but the above statement is not true in all situations. DCA does not guarantee against loss nor does it guarantee you the lowest price when buying. DCA is simply a risk management technique that can help you in a market downturn. It's a way to overcome psychological fear causing "investment paralysis". DCA does not seek to maximize returns. DCA seeks to spread out your purchases over time and this lessens your dependence on any one snapshot of the market when you lump sum. DCA sometimes beats lump sum, sometimes not. But if you find yourself unable to enter the markets due to fear, do two things: 1) Re-evaluate y...
by hollowcave2
Mon Apr 04, 2016 12:55 pm
Forum: Personal Investments
Topic: Advice on investing a lump sum
Replies: 5
Views: 950

Re: Advice on investing a lump sum

Hi Brian. I think most people on this board would say that if you have an asset allocation appropriate to your risk tolerance and have at least a five year horizon, then just implement your strategy. But that's easier said than done. You said in your post that you were quite nervous about putting the money in because you wanted to wait for a pullback. But we just don't know if that will happen and even if it does, how can you be sure the pullback is going to offer lower prices than today? The pullback can happen at higher levels yet. Your situation is exactly what dollar-cost-averaging was designed for. Dollar cost averaging (DCA) is a way to get going with your investment plan in any situation. Your investment is spread out over time so yo...
by hollowcave2
Thu Mar 24, 2016 7:19 pm
Forum: Personal Investments
Topic: Help me to understand Tax Loss Harvesting during a short market drop and speedy recovery
Replies: 2
Views: 413

Re: Help me to understand Tax Loss Harvesting during a short market drop and speedy recovery

If the two investments are really substantially different, they will not track perfectly, so you may have done better just by doing nothing. On the other hand, you have TLH that can offset substantial gains elsewhere and that can help you on your taxes. But there's risk and cost to everything. The risk or cost here is that you may have a larger total return if you did nothing. My own personal philosophy is to maximize returns first, then manage the tax consequences. I'd rather pay more taxes because I made more money than expected, instead of paying no taxes and having no gains either. But the real issue here is "short market drop and speedy recovery." This requires short term trading and market timing, and I'm sure you know the i...
by hollowcave2
Thu Mar 24, 2016 7:11 pm
Forum: Personal Investments
Topic: Aggressive Allocation but need help with Bonds
Replies: 25
Views: 3044

Re: Aggressive Allocation but need help with Bonds

I'd say you got some pretty good advice. The recommended allocation is pure Boglehead, all the way. Remember the total allocation is 90/10 stocks/bonds. That's only 10 % bonds. The reason they recommended 10 % bonds instead of 100 % stocks is one of risk vs return. You just don't get that much more return by going 100 % stocks instead of staying at 90 %. And by having bonds in the portfolio, you add some predictable income and stability as part of the total return. I'm happy with the advice you got. Yes, it seems conservative in a way because you're not chasing sector funds or putting everything in one section of the market, like small caps. You have a bit of everything, and it's the 90% allocation to stocks that is going to drive the portf...
by hollowcave2
Wed Mar 09, 2016 11:27 am
Forum: Personal Investments
Topic: I-Bonds vs TIPS in a Roth
Replies: 10
Views: 1438

Re: I-Bonds vs TIPS in a Roth

First of all, while it may be possible to buy I-bonds in an IRA, I don't see it as either easy or desirable. Any IRA is under strict control and rules by a trustee or custodian, so you may need special permission or special ownership requirements to hold savings bonds in an IRA. So it's not as easy as you think. Savings bonds are designed to be held in addition to other retirement accounts, and the bonds themselves are tax advantaged. I don't really see the advantage of taking up space in an IRA when the savings bonds are already tax advantaged.

So that leaves TIPS, and I recommend the TIPS in an IRA because those do generate federal taxable income.
by hollowcave2
Sat Feb 20, 2016 8:24 pm
Forum: US Chapters
Topic: Sacramento Bogleheads @ McClatchy Lib 10:30 AM Sat Mar 12, 2016
Replies: 4
Views: 2170

Re: Sacramento Bogleheads @ McClatchy Lib 10:30 AM Sat Mar 12, 2016

Great. Good topic for the season. I'll plan to be there.

Steve
by hollowcave2
Fri Feb 19, 2016 5:41 pm
Forum: Personal Investments
Topic: Vanguard Brokerage sale
Replies: 1
Views: 463

Re: Vanguard Brokerage sale

Generally, for individual stocks, it is T+3 days. So, if you sold a stock on Wednesday 2/17, you count +3 more days to settle, so that would be Thursday, Friday, and Monday. The funds will show up, free and clear, this Tuesday, 2/23. Options only have a T+1 settlement, and I not totally sure, but I think mutual funds in a brokerage account also have a T+1 settlement. I am sure that ETF's are treated the same as stocks, so ETF's are T+3 days. But if you buy within the brokerage account, you can use the funds immediately within the brokerage account. These rules apply not just at Vanguard, but as general practice in the finance industry. If you want to actually transfer the funds to your bank, you can only initiate the transfer on Tuesday 2/2...
by hollowcave2
Sat Jan 02, 2016 11:41 am
Forum: Investing - Theory, News & General
Topic: Lump Sum vs Dollar Cost Averaging
Replies: 9
Views: 1615

Re: Lump Sum vs Dollar Cost Averaging

There's a lot on this board talking about LS vs. DCA, so if you want to see whole discussion threads on the topic, just use the search function and look for dollar cost averaging. I'm a big fan of DCA, and since you're making regular contributions already, one strategy is simply to continue that. However, you also stated in your post that: "I'm feeling pretty confident in the Boogle-ness of my portfolio as a whole" If that's the case, then just lump sum the amount and don't worry about it. It seems like you have an asset allocation that fits your investing style. But on the other hand, if you find yourself hesitating, losing some confidence, and delaying the investing, then by all means, please start DCA. The goal is to get starte...
by hollowcave2
Sat Dec 19, 2015 12:42 pm
Forum: Personal Investments
Topic: Upgrade to Brokerage Account with Vanguard
Replies: 46
Views: 13589

Re: Upgrade to Brokerage Account with Vanguard

With the new account you can sell a VG ETF and buy a VG mutual fund on the same day.
Wow. Well, that is a significant benefit. I am impressed.

But I also don't trade much, so I probably wouldn't make use of this benefit very often.

Maybe I'll eventually do it. I just don't want to change something that is working just fine as it is.
by hollowcave2
Thu Dec 17, 2015 9:20 pm
Forum: Personal Investments
Topic: Upgrade to Brokerage Account with Vanguard
Replies: 46
Views: 13589

Re: Upgrade to Brokerage Account with Vanguard

So if all of the mutual funds also went into the "Vanguard account," I wonder if I could sell an ETF and use those funds the same day to buy into a Vanguard fund. If that were possible, then I might see some benefit.

As it stands right now, if I sell an ETF in the brokerage account, I have to wait 3 days until the trade is settled before using the money to purchase into a Vanguard mutual fund. Does that change if I consolidate everything into one brokerage account? Could I use the funds the same day?
I suspect not. So I am not inclined to change anything. Not enough benefits for me. Maybe I'm missing something.
by hollowcave2
Thu Dec 17, 2015 6:54 pm
Forum: Personal Investments
Topic: What to do with VGPMX (Vanguard Precious Metals and Mining)?
Replies: 131
Views: 27555

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Very good assessment in the post above. Looks like price for VGPMX will drop more from here. I expect a new all time low soon. They may have to do a reverse split on the fund. It could be a good time to buy if you have staying power and the allocation represents a small portion of your overall portfolio. This is the problem with sector funds. Tough volatility sometimes. I like mining stocks, but even I am a bit skiddish here. VGPMX is still a good fund, but assess whether you really need it for your investment goals. It could take a while for a comeback. It may be better to wait and watch for a reversal in trend. I don't really mean short term timing the market, but I'd like to see some strength before buying into it. Instead of trying to c...
by hollowcave2
Thu Dec 17, 2015 5:29 pm
Forum: US Chapters
Topic: Sacramento Bogleheads @ McClatchy Library 10:30 AM Sat Dec 12, 2015
Replies: 4
Views: 2389

Re: Sacramento Bogleheads @ McClatchy Library 10:30 AM Sat Dec 12, 2015

I had a great time meeting other Bogleheads at the recent meeting Dec 12.

What a great place to meet, too. Nice old style building. Beautiful restoration. Very inspiring and comfortable for talking about market theory.
8-)

You know, Boglehead style investing is ultimately............. boring !! Stay the course, stay the course, stay the...... well, you know the rest.

So I guess we need to talk about all of these other theories and styles of investing just to give us something to do so that.............yes..........

We can stay the course !!!!!!!!!


:sharebeer
by hollowcave2
Thu Dec 17, 2015 5:21 pm
Forum: Personal Investments
Topic: Lump Sum or Dollar Cost Averaging Investing?
Replies: 102
Views: 9142

Re: Lump Sum or Dollar Cost Averaging Investing?

You seem to be of the Rick Ferri school: "If that's what it takes, then do it!"
LOL

I guess I'm happy to be in the Rick Ferri school !

:shock:

:moneybag
by hollowcave2
Thu Dec 17, 2015 11:56 am
Forum: Personal Investments
Topic: Lump Sum or Dollar Cost Averaging Investing?
Replies: 102
Views: 9142

Re: Lump Sum or Dollar Cost Averaging Investing?

Steve, What is the Asset Allocation you have set in your Investment Policy Statement? Are you invested to that AA? L. Thanks for the question. Yeah, I get your point about setting the proper AA. I'm at 70/30 stocks/bonds and have been for about 3 years now. I went to all stocks in 2009 (lucky). But after the market recovered, I decided to scale back again. That mix seems to suit me. Yes, if a person is afraid to invest right now, it is possible to go to a more conservative allocation. But I still think DCA can play a role in the short term. Of course, you know Vanguard has a questionnaire to determine a proper AA for anybody. Let's suppose that the questionnaire comes up with a 70/30 allocation like mine and the person has a 20 year time h...
by hollowcave2
Wed Dec 16, 2015 4:08 pm
Forum: Personal Investments
Topic: Lump Sum or Dollar Cost Averaging Investing?
Replies: 102
Views: 9142

Re: Lump Sum or Dollar Cost Averaging Investing?

Well, if it's your own fear and greed, get over it
Easier said than done.
by hollowcave2
Wed Dec 16, 2015 3:23 pm
Forum: Personal Investments
Topic: Lump Sum or Dollar Cost Averaging Investing?
Replies: 102
Views: 9142

Re: Lump Sum or Dollar Cost Averaging Investing?

Markets are often affected by psychology: greed and fear.

Fear is a big factor. Anything that gets you over investment paralysis is something to consider.

And there's no guarantees with waving a dead chicken....... except perhaps it smells a little.

:D
by hollowcave2
Wed Dec 16, 2015 2:04 pm
Forum: Personal Investments
Topic: Lump Sum or Dollar Cost Averaging Investing?
Replies: 102
Views: 9142

Re: Lump Sum or Dollar Cost Averaging Investing?

OMG Here we go with the DCA vs. Lump Sum thread again !! AAhhhhhh!!!!! It's really a matter of personal experience and personal risk tolerance. It has nothing at all to do with mazimizing return. DCA is a risk management technique. So data mining over the years to compare DCA vs LS and see which one is likely to return more is actually misleading and a futile exercise because each can outperform the other depending on the time frames chosen. The real question is: Are you, personally, so nervous about placing a lump sum into the markets right now because you feel you may lose money in the short run, or that you can do better if you waited? And you still feel this way even after you choose a long term asset allocation that suits your risk to...
by hollowcave2
Mon Dec 14, 2015 1:50 pm
Forum: Personal Investments
Topic: Mutual Fund Question -- New Young Investor
Replies: 10
Views: 1068

Re: Mutual Fund Question -- New Young Investor

I would definitely stay the course. You're assuming the market will go down this week. But everyone knows about the Fed. Have you considered the Fed raising rates less than expected? Would this cause the market to jump up? And if that happened, how would you feel about your cash holding?

You're young and have a lot of time. Any short term movements will pale in comparison to many years in the market. If you're worried and cannot sleep about this, then change your asset allocation to match your risk tolerance.

At your age, better to spend time dating, looking for fun new jobs, or inventing the next best mouse trap. Worrying about markets which you can't control or predict in the short term is unnecessary stress.

Good luck.

Steve
by hollowcave2
Mon Dec 14, 2015 1:40 pm
Forum: Personal Investments
Topic: Lump sum to Roth or student loans?
Replies: 23
Views: 2612

Re: Lump sum to Roth or student loans?

This choice is a matter of personal preference. If I was in your situation, I would contribute the $3K to the Roth. Here's my reasoning: The 3K will not pay off the student loan and still leaves most of the loan in place. You've already sacrificed contributing to the Roth to service your loans. Well done, but just accept that paying off loans does take time and will not happen overnight. The loan represents an investment in itself; your own education and future earning power. This offsets interest on the loan. The biggest benefit of a Roth is tax-advantaged time in the market. Don't underestimate time in the market. That's what is making you money. So I would not delay the Roth any further, especially for a student loan. I would simply lump...
by hollowcave2
Fri Oct 16, 2015 10:37 pm
Forum: Investing - Theory, News & General
Topic: Why is my stock ask "missed"?
Replies: 25
Views: 5063

Re: Why is my stock ask "missed"?

If you have a low volume highly illiquid security ( as you hinted ) then it may be that there simply weren't enough buyers at your price. The Bid-Ask spread on these stocks can also be very high, so there's a big difference between buying and selling it. Once some of the higher prices are filled, and you have a smaller order, there may not be enough to go around. That's a problem with these thinly traded stocks. Just like you have a strict price to sell, others have a strict limit to buy. You may just have to wait for the market to catch up to you or lower your price closer to current bid values. And yes, on these lesser traded securities be sure to use limit orders. Always. But you also need to be flexible and realize you may not get your ...
by hollowcave2
Fri Oct 16, 2015 10:26 pm
Forum: Investing - Theory, News & General
Topic: Getting into bonds at this point
Replies: 26
Views: 3525

Re: Getting into bonds at this point

I'm a big fan of dollar cost averaging, but in general, not for bond funds. Bond funds are less volatile than stocks (believe it or not). Also, we just had a significant drop in intermediate and longer term bond fund NAV earlier this year, so I don't think it's a bad time to buy bonds. The problem with delaying a bond fund purchase is missing the distributions. It's the distributions that give you cash flow or reinvestment potential in a bond fund. So dollar cost averaging into a less volatile fund and missing distributions does not make sense. I would just set an asset allocation that is consistent with your risk tolerance, have a longer time horizon (at least five years), and just lump sum into the bond fund. How about that? Yes, it's me ...
by hollowcave2
Fri Oct 16, 2015 10:17 pm
Forum: Investing - Theory, News & General
Topic: November I Bond Interest Rate Thread! [fixed goes from 0% to 0.10%]
Replies: 43
Views: 6701

Re: It's time for the "November I Bond Interest Rate?" Thread!

There hasn't been a decent fixed rate component since 2008 when it was at 1.2%, which sounds incredibly high now.
The highest it's been since 2009 is 0.3%, and a lot of 6 month periods where it was at zero.

Where's Mel with his 3% fixed rate bonds? :D

I personally never buy I-bonds with fixed rates of zero, and I don't expect any change next month. I predict the fixed rate will remain at zero.

So I'm holding on the ones I've got. When EE bonds look better than current I-bonds, it's not a good time for I-bonds. And inflation has not reared its head up yet. I don't expect rapid inflation right now.

Zero.
by hollowcave2
Thu Oct 15, 2015 8:54 am
Forum: Investing - Theory, News & General
Topic: Vanguard's new structure and direct ownership
Replies: 12
Views: 3302

Re: Vanguard's new structure and direct ownership

Thanks for all of the replies. I'm just trying to understand the organizational structure of Vanguard.

Looks like ownership stays in the family anyway.
by hollowcave2
Wed Oct 14, 2015 6:06 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's new structure and direct ownership
Replies: 12
Views: 3302

Vanguard's new structure and direct ownership

Like many of you, I have received an "Action Requested" message in my Vanguard account to move all of my mutual funds into a brokerage account at Vanguard Brokerage Services (VBS). We are being assured that this will cost us nothing and provide easier and more efficient investment flexibility for us. The temptation to trade notwithstanding, so far, so good. But I have not seen any discussions on what this move may mean to direct ownership of our funds. When I first joined Vanguard, one of the unique aspects of the company (so they claimed) was that it is a mutual mutual fund company, meaning that the people who hold shares in the fund actually own the fund, not just as holding the fund, but stakeholders in the fund. There are no t...
by hollowcave2
Wed Oct 14, 2015 9:29 am
Forum: Personal Investments
Topic: Vanguard asking me to move funds into brokerage?
Replies: 22
Views: 4653

Re: Vanguard asking me to move funds into brokerage?

Thanks, Blues, for calling a Vanguard rep and getting some clarity for me. I guess I have officially turned into an "old fogie." I am also inclined to do nothing. I have one more question about this change. Under the current structure, if I sell an ETF in a VBS account, I have to wait until settlement (T + 3 days) in order to use that money to purchase a Vanguard mutual fund outside of the brokerage account. The one benefit I might be able to see in the new structure is this: if I sell an ETF, can I immediately use that money the same day to buy into a Vanguard mutual fund? I understand that the money only goes into the fund at the end of the day, but at least it could be the same day of the trade instead of waiting until settleme...
by hollowcave2
Tue Oct 13, 2015 9:18 pm
Forum: Personal Investments
Topic: Vanguard asking me to move funds into brokerage?
Replies: 22
Views: 4653

Re: Vanguard asking me to move funds into brokerage?

I am just trying to understand this "New Structure" at Vanguard. They want us to put everything in a brokerage. Alright, let's just be sure we know what we are doing. As I see it, if I put one of my stock certificates into a brokerage, I am no longer the direct owner. The brokerage owns it in "street name." I have a right to the security, but the brokerage owns it. So right now, in Vanguard mutual funds, I am a direct owner of Vanguard, since the shareholders actually own the funds. There are no private interests or third parties. Now, when I put that fund in Vanguard Brokerage Services, I guess VBS owns it. So the only way to directly own my funds (like I do now) is if the shareholders also own VBS. That's probably true...
by hollowcave2
Tue Oct 13, 2015 8:38 am
Forum: Personal Investments
Topic: Vanguard asking me to move funds into brokerage?
Replies: 22
Views: 4653

Vanguard asking me to move funds into brokerage?

I just visited the Vanguard site and it is asking me to take action by moving funds into a new structure so that I can see them better. If I take this action, then my funds will be under a brokerage account and the old funds closed. That doesn't sound like a small shift in structure to me.

I apologize if this topic is already posted but I didn't see it yet. Anyone else join the new structure for viewing your funds on the Vanguard site? I prefer to do nothing. I just don't understand it. Perhaps someone can explain it better.

Thanks.

Steve
by hollowcave2
Tue Jul 14, 2015 3:24 pm
Forum: Personal Consumer Issues
Topic: Online Auction - Coins
Replies: 12
Views: 1694

Re: Online Auction - Coins

I've taken a break from coin collecting for a couple years now, so I haven't kept up with news as much. I am sorry to learn that Teletrade no longer exists. They used to be a nice site for weekly auctions. They were bought by Stack's and Bowers. So I was motivated today to look at some coin auction sites besides eBay. I agree that Heritage is a nice site and reputable, although the buying/selling fees are a little high. A reputable site that offers lower fees (by nearly half) is Great Collections. They started in 2010 and seem like a good site for the little guy making smaller purchases. So you might want to check them out. http://www.greatcollections.com But your best protection in buying coins is knowledge, experience, and common sense. A...
by hollowcave2
Sun Jul 12, 2015 10:27 pm
Forum: Personal Consumer Issues
Topic: Online Auction - Coins
Replies: 12
Views: 1694

Re: Online Auction - Coins

Can you be more specific about your interest in coins? Are you buying for an investment portfolio, like gold bullion, or are you interested in the numismatic value, like Morgan dollars?

If you are a novice and plan to spend more than $100 on a coin, I'd definitely buy certified coins from PCGS, NGC, or ANACS. That protects you very well and eBay would be a good site for auction.

For numismatic auctions, Teletrade is also a dependable site. They only sell certified coins.

But if you are buying raw coins on your own, I recommend educating yourself first about how to collect coins. Make your mistakes with the small purchases, not the big ones.
by hollowcave2
Thu Jun 25, 2015 5:20 pm
Forum: Investing - Theory, News & General
Topic: Vanguard on Rising Interest Rates
Replies: 1
Views: 979

Re: Vanguard on Rising Interest Rates

A rule of thumb for fixed income investors is that if your time horizon is longer than a bond's duration, you stand to benefit from rising interest rates. When interest rates rise, bond prices fall, which will result in short-term losses. But those losses will be offset by higher returns on reinvested income into higher-yielding bonds. In any environment, it's important to stay focused on your long-term goals, maintain the right mix of diversified stocks and bonds, and rebalance your portfolio when necessary. A wise rule of thumb stated in the above post that is always worth repeating. With all of the focus on short term losses in a rising rate environment, I think people forget that gradually rising higher rates over the long run for an i...
by hollowcave2
Thu Jun 25, 2015 5:15 pm
Forum: Personal Investments
Topic: VBTLX tax-loss harvesting, similar funds?
Replies: 9
Views: 1967

Re: VBTLX tax-loss harvesting, similar funds?

Capital gain/loss is treated separately from dividends and interest. In terms of total return, they may offset but not precisely.

And I would recommend the Short Term Bond Index for you, given your risk tolerance.
by hollowcave2
Thu Jun 25, 2015 11:00 am
Forum: Personal Investments
Topic: VBTLX tax-loss harvesting, similar funds?
Replies: 9
Views: 1967

Re: VBTLX tax-loss harvesting, similar funds?

The total bond admiral fund (VBTLX) has a duration of 5.7 years. A general rule of thumb is that your investment horizon in a bond fund should match or exceed the time frame of its duration. This helps to mitigate capital losses by reinvesting the money into shares at a lower price.

Already you are thinking of selling the fund only 3 months after purchase. This may indicate that you have exceeded your risk tolerance. So I would re-evaluate if this fund is the best one for your goals and risk tolerance. I suspect that you need a bond fund with a lower duration or a stable fund with a lower percentage of interest payments. Maybe you don't even need a bond fund. Re-evaluate.